Document:

Exhibit 10.6

    

     

    

    
      Certain identified information in this document has been excluded because it is both (i) not material and (ii) would likely cause competitive harm if publicly disclosed. [***]
        indicates where such information has been omitted.

      

      

      LICENSE AGREEMENT

       

      by and between

       

      MERCK SHARP & DOHME CORP.

       

      and

       

      AMMONETT PHARMA LLC

       

      

      
        
          

        

      

      
      EXCLUSIVE LICENSE AGREEMENT

       

      THIS EXCLUSIVE LICENSE AGREEMENT (this “Agreement”), effective as of October 22, 2013 (the “Effective Date”), is by and between MERCK SHARP & DOHME CORP., a corporation organized and existing
        under the laws of New Jersey (“Merck”), and AMMONETT PHARMA LLC, a corporation organized and existing under the laws of Delaware (hereinafter referred to as “Licensee”).  Merck and Licensee are sometimes referred to herein individually as a “Party”
        and collectively as the “Parties”.

       

      WHEREAS, Merck has discovered and developed the drug MK-0677 and Merck is seeking a licensee to further develop and commercialize MK-0677;

       

      WHEREAS, Licensee desires to develop and commercialize MK-0677; and

       

      WHEREAS, Licensee and Merck desire to enter into a license arrangement whereby Licensee will develop and commercialize MK-0677.

       

      NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, Licensee and Merck hereby agree as follows:

       

      ARTICLE I - DEFINITIONS

       

      As used in this Agreement, the following capitalized terms, whether used in the singular or plural, shall have the respective meanings set forth below:

       

      1.01       “Affiliate” shall mean any individual or entity directly or indirectly controlling, controlled by or under common control
        with a Party to this Agreement.  For purposes of this Agreement, the direct or indirect ownership of fifty percent (50%) or more of the outstanding voting securities of an entity, or the right to receive fifty percent (50%) or more of the profits
        or earnings of an entity shall be deemed to constitute control.  Such other relationship as in fact results in actual control over the management, business and affairs of an entity shall also be deemed to constitute control.

       

      1.02       “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30,
        September 30 and December 31, for so long as this Agreement is in effect; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter, and (b) the
        last Calendar Quarter of the Term shall end upon the expiration of this Agreement.

       

      1.03        “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31,
        for so long as this Agreement is in effect; provided, however, that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31, 2013 and (b) the last Calendar Year of the Term shall commence on January 1 of
        the Calendar Year in which this Agreement terminates or expires and end on the date of termination or expiration of this Agreement.

       

      

      
        2

        
          

        

      

      1.04        “Clinical Trial” shall mean a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, Phase IIIb Clinical
        Trial and/or post-approval clinical trial.

       

      1.05       “Combination Product” shall mean Licensed Product which includes one or more active ingredients other than Licensed Compound
        in combination with Licensed Compound.  All references to Licensed Product in this Agreement shall be deemed to include Combination Product.

       

      1.06       “Commercialization” or “Commercialize” shall
        mean, with respect to Licensed Compound or Licensed Product, any and all activities directed to the marketing, promotion, distribution, offering for sale and selling such product, importing and exporting such product for sale, and interacting with
        Regulatory Authorities regarding the foregoing.  Commercialization shall also include Commercialization Studies.

       

      1.07        “Commercialization Studies” shall mean a study or data collection effort for Licensed Product that is initiated in the
        Territory after receipt of Marketing Authorization for Licensed Product and is principally intended to support the Commercialization of Licensed Product in the Territory; provided, that such study or data collection effort is not principally to
        support or maintain a Marketing Authorization or obtain a label change or maintain a label.

       

      1.08       “Compound Patent Rights” shall mean those patents and patent applications that as of the Effective Date are owned or
        controlled by Merck (and/or any of its Affiliates) and are listed on Schedule 1.8, that (A) have claims specifically covering Licensed Compound or the Manufacture and/or use thereof; (B) are substitutions, divisions, continuations,
        continuations-in-part, reissues, renewals, registrations, certificates of invention, confirmations, re-examinations, extensions, supplementary protection certificates or the like, or the provisional applications of any such patents and patent
        applications; or (C) are foreign equivalents of any of the above.

       

      1.09       “Development” or “Develop” shall mean all
        preclinical research and development activities and all clinical drug development activities, including, among other things: drug discovery, toxicology, formulation, statistical analysis and report writing, conducting clinical trials for the
        purpose of obtaining and maintaining Marketing Authorization (including without limitation, post-marketing studies), and regulatory affairs related to all of the foregoing.  Development shall include all clinical studies (including Phase III-B)
        that are primarily intended to support or maintain a Marketing Authorization, maintain a label or obtain any label change, but shall exclude Commercialization Studies.

       

      1.10        “Development or Commercial Arrangement” shall mean a license, distributorship, co-marketing or co-promotion arrangement to
        research, develop, commercialize, manufacture, have manufactured, use, import, export, sell and/or offer to sell Licensed Product in the Field in at least one of the United States, a Major European Country or Japan; provided, however, that a Development or Commercial Arrangement with a Third Party shall not include: (i) any agreement with a contractor, contract research organization, contract
        manufacturer or other Third Party, under which such Third Party performs contract services on behalf of Licensee or its Affiliates, (ii) an assignment by the Licensee of the Agreement and its rights and obligations hereunder to an Affiliate or in
        connection with the transfer or sale of all or substantially all of its assets related to the division or the subject business, or in the event of its merger or consolidation or change in control or similar transaction described in Section
          14.01(a) or (iii) a Change of Control.

       

      

      
        3

        
          

        

      

      1.11       “Diligent Efforts” shall mean the performance of obligations or tasks in a continuous, sustained manner consistent with the
        reasonable best practices of the pharmaceutical industry for the development or commercialization of a product having similar technical and regulatory factors and similar market potential, profit potential and strategic value, and that is at a
        similar stage in its development or product life cycle, in each case based on conditions then prevailing and without regard to any competitive internal program of Licensee.  Diligent Efforts requires that the Party (a) promptly assign
        responsibility for such obligations to specific employees who are held accountable for progress and monitoring such progress on an ongoing basis, (b) set and consistently seek to achieve specific and meaningful objectives for carrying out such
        obligations, and (c) consistently make and implement decisions and allocate adequate resources designed to advance progress with respect to such obligations.

       

      1.12        “Field” shall mean the use of Licensed Compound or Licensed Product to treat or prevent any disease, disorder or conditions
        in human, excluding Autism Spectrum Disorders as defined in the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders.

       

      1.13       “First Commercial Sale” shall mean, with respect to a country in the Territory, the first shipment of commercial quantities
        to a Third Party of a Licensed Product sold in such country to a Third Party on arm’s length terms by Licensee, its Affiliate or sublicensee for use in the Field after the receipt of Marketing Authorization in such country.  Sales for test
        marketing, sampling and promotional uses, Clinical Trial purposes or compassionate or similar use shall not be considered to constitute a First Commercial Sale.

       

      1.14       “Good Clinical Practices” shall mean the then current Good Clinical Practices as such term is defined from time to time by
        the United States Food and Drug Administration (“FDA”) or other relevant governmental authority having jurisdiction over the Development, Manufacture or sale of Licensed Product in the Territory pursuant to its regulations, guidelines or otherwise.

       

      1.15        “Good Laboratory Practices” shall mean the current good laboratory practice regulations of the FDA as described in the
        United States Code of Federal Regulations (“CFR”) or any comparable corresponding foreign regulations or their respective successor regulations.

       

      1.16        “Good Manufacturing Practices”shall mean the then current Good Manufacturing Practices as such term is defined from time to
        time by the FDA or other relevant governmental authority having jurisdiction over the Development, manufacture or sale of Licensed Product in the Territory pursuant to its regulations, guidelines or otherwise.

       

      1.17        “IND”shall mean an investigational new drug application with respect to Licensed Product filed with the FDA for beginning
        clinical trials in humans, or any comparable application filed with the Regulatory Authorities of a country other than the United States prior to beginning clinical trials in humans in that country, as well as all supplements or amendments filed
        with respect to such filings.

       

      

      
        4

        
          

      

      
        [***] Indicates that information has been omitted.

         

        

        1.18        “Know-How” shall mean proprietary information and materials (whether patentable or not) related to Licensed Compound, Licensed Product, any Combination
        Product, formulation, product improvement and/or indication, or the Manufacture or use of any of the foregoing, that are not in the public domain, including, without limitation, (a) ideas, discoveries, inventions, improvements, technology or trade
        secrets, (b) pharmaceutical, chemical and biological materials, products, components or compositions, (c) methods, procedures, formulas, processes, tests, assays, techniques, regulatory requirements and strategies, (d) biological, chemical,
        pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, Manufacturing and quality control data and information related thereto, (e) technical and non-technical data and other information related to the foregoing,
        (f) drawings, plans, designs, diagrams, sketches, specifications or other documents containing or relating to such information or materials and (g) all applications, registrations, licenses, authorizations, approvals and correspondence relating to
        Licensed Compound and/or Licensed Product submitted to Regulatory Authorities.

       

      1.19        “Licensee” shall have the meaning given to such term in the preamble of this Agreement.

       

      1.20        “Licensee Know-How”shall mean Know-How developed by Licensee and/or any of its Affiliates or sublicensees after the
        Effective Date.

       

      1.21       “Licensee Patent Rights” shall mean any and all patents and patent applications that after the Effective Date are owned or
        controlled by Licensee (and/or any of its Affiliates) that (A) have claims covering: (i) Licensed Compound or the Manufacture and/or use thereof, or (ii) Licensed Product or the Manufacture and/or use thereof; (B) arc substitutions, divisions,
        continuations, continuations-in-part, reissues, renewals, registrations, certificates of invention, confirmations, re-examinations, extensions, supplementary protection certificates or the like, or the provisional applications of any such patents
        and patent applications; or (C) are foreign equivalents of any of the above.

       

      1.22        “Licensed Compound” shall mean:

       

      (i)          the Merck compound known as ibutamoren or MK-0677 with the following chemical name:

       

      N-[1(R)-[(1,2-dihydro-l-methanesulfonylspiro[3H-indole-3,4’-piperidin]-1‘-yl)carbony1]-2-(phenylmethyloxy)ethyl]-2-amino-2-methylpropanamide,

       

      and/or

       

      (ii)          [***];

       

      including any pharmaceutically acceptable salt, polymorph, crystal form, prodrug or solvate of (i) or (ii).

      

      

      1.23        “Licensed Product” shall mean any pharmaceutical composition, dosage form or preparation, including, without limitation, a
        Combination Product, which contains as an active ingredient Licensed Compound.

       

      

      
        5

        
          

      

      1.24        “Major European Country” shall mean any of France, Germany, Italy, Spain or the United Kingdom.

       

      1.25       “Manufacture” shall mean all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof,
        including but not limited to test method development and stability testing, formulation, process development, manufacturing for use in non-clinical or clinical studies, manufacturing scale-up, manufacturing Licensed Compound or Licensed Product
        quality assurance/quality control development, quality control testing (including in-process release and stability testing), packaging, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing
        and release of product, and regulatory activities related to all of the foregoing.

       

      1.26       “Marketing Authorization” shall mean all approvals from the relevant Regulatory Authority necessary to market and sell a
        Licensed Product in any country (including without limitation all applicable Price Approvals even if not legally required to sell Licensed Product in a country).

       

      1.27        “Merck” shall have the meaning given to such term in the preamble to this Agreement.

       

      1.28       “Merck Know-How” shall mean the Know-How owned or controlled by Merck and/or any of its Affiliates as of the Effective Date
        that was used by Merck or its Affiliates as of the Effective Date in the Development or Manufacture of Licensed Compound that is listed on Schedule 1.28 or is otherwise provided to Licensee by Merck under this Agreement.

       

      1.29        “NDA” shall mean a New Drug Application, Biologics License Application, Worldwide Marketing Application, Marketing
        Application Authorization, filing pursuant to Section 510(k) of the Federal Food, Drug and Cosmetic Act (the “Act”) or similar application or submission for Marketing Authorization of a Product filed with a Regulatory Authority to obtain marketing
        approval for a biological, pharmaceutical or diagnostic product in that country or in that group of countries.

       

      1.30        “Net Sales” shall mean the gross invoice
        price (not including value added taxes, sales taxes, or similar taxes) of Licensed Product sold by Licensee or its Related Parties to the first Third Party after deducting, if not previously deducted, from the amount invoiced or received:

       

      
        
          	

                	(a)	
                  trade and quantity discounts other than early payment cash discounts;

                

        

      

       

      
        
          	

                	(b)	
                  returns, rebates, chargebacks and other allowances;

                

        

      

       

      
        
          	

                	(c)	
                  retroactive price reductions that are actually allowed or granted;

                

        

      

       

      
        
          	

                	(d)	
                  sales commissions paid to Third Party distributors and/or selling agents;

                

        

      

       

      
        
          	

                	(e)	
                  a fixed amount equal to one percent (1%) of the amount invoiced to cover bad debt, early payment cash discounts, transportation and insurance and custom duties; and

                

        

      

       

      
        
          	

                	(f)	
                  the standard inventory cost of devices or delivery systems used for dispensing or administering Product.

                

           

          

        

      

      
        6

        
          

      

      With respect to sales of Combination Products, Net Sales shall be calculated on the basis of the gross invoice price of Products(s) containing the same strength of Compound sold without other active ingredients.  In
        the event that Product is sold only as a Combination Product, Net Sales shall be calculated on the basis of the gross invoice price of the Combination Product multiplied by a fraction, the numerator of which shall be the inventory cost of Compound
        in the Product and the denominator of which shall be the inventory cost of all of the active ingredients in the Combination Product.  Inventory cost shall be determined in accordance with Licensee’s regular accounting methods.  Consistently
        applied.  The deductions set forth in Sections 1.30 (a) through (e) will be applied in calculating Net Sales for a Combination Product.  In the even that Product is sold only as a Combination Product and either Party reasonably believes
        that the calculation set forth in this Paragraph does not fairly reflect the value of the Product relative to the other active ingredients in the Combination Product, the Parties shall negotiate, in good faith.  Other means of calculating Net Sales
        with respect to Combination Products.

       

      1.31        “Party” or “Parties” shall have the meaning
        given to such term in the preamble to this Agreement.

       

      1.32       “Phase 1 Clinical Trial” shall mean a clinical trial of a Licensed Product in human patients at single and multiple dose
        levels with the primary purpose of determining safety, metabolism, and pharmacokinetic and pharmacodynamic properties of such Licensed Product, and which is consistent with 21 U.S. CFR § 312.21 (a).

       

      1.33      “Phase II Clinical Trial” shall mean a clinical trial of a Licensed Product in human patients, the principal purposes of which
        are to make a preliminary determination that Licensed Product is safe for its intended use, to determine its optimal dose, and to obtain sufficient information about such Licensed Product’s efficacy to permit the design of Phase III Trials, and
        which is consistent with 21 U.S. CFR § 312.21(b).

       

      1.34        “Phase III Clinical Trial” shall mean a clinical trial of a Licensed Product in human patients, which trial is designed (a)
        to establish that Licensed Product is safe and efficacious for its intended use, (b) to define warnings, precautions and adverse reactions that are associated with such Licensed Product in the dosage range to be prescribed, (c) to be, either by
        itself or together with one or more other Clinical Trials having a comparable design and size, the final human Clinical Trial in support of Marketing Authorization of such Licensed Product, and (d) consistent with 21 U.S. CFR § 312,21(c). “Phase
        III Trial” shall not include a Phase IIIb Trial.

       

      1.35        “Phase IIIb Clinical Trial” shall mean a clinical trial of a Licensed Product in human patients, which provides for product
        support (i.e., a clinical trial which is not required for receipt of initial Marketing Authorization but which may be useful in providing additional drug profile data or in seeking a label expansion) commenced before receipt of Marketing
        Authorization for the indication for which such trial is being conducted.

       

      1.36        “Price Approval” shall mean the approval or determination by a Regulatory Authority for the pricing or pricing reimbursement
        for a pharmaceutical products.

       

      

      
        7

        
          

      

      1.37        “Proprietary Information” shall mean, as applicable, Know-How and all other scientific, clinical, regulatory, marketing,
        financial and commercial information or data, whether communicated in writing, verbally or electronically, that is provided by one Party to the other Party in connection with this Agreement.

       

      1.38       “Regulatory Authority” shall mean any United States federal, state, or local government, or any foreign government, or
        political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any
        court or tribunal (or any department, bureau or division thereof), or any governmental arbitrator or arbitral body with responsibility for granting licenses or approvals, including Marketing Authorizations, necessary for the marketing and sale of
        Licensed Product in any country.

       

      1.39        “Related Party” shall mean each of Licensee, its Affiliates, and their respective sublicensees (which term does not include
        distributors), as applicable.

       

      1.40        “Territory” shall mean the entire world.

       

      1.41        “Third Party” shall mean an entity other than Merck and its Affiliates and Licensee and its Related Parties.

       

      1.42       “Valid Claim”shall mean a claim of an issued and unexpired patent included within the Compound Patent Rights, that has not
        been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and that has not been disclaimed, denied or admitted to be
        invalid or unenforceable through reissue or disclaimer.

       

      1.43        Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below.

       

      	
              Definition

            	
              Section

            
	
              AAA

            	
              13.02(a)

            
	
              Act

            	
              1.28

            
	
              AEs

            	
              4.02(a)

            
	
              Agents

            	
              9.01(b)

            
	
              Agreement

            	
              Preamble

            
	
              Annual Commercialization Report

            	
              3.04

            
	
              CFR

            	
              1.14

            
	
              Change of Control

            	
              14.01(c)

            
	
              Contract Sales Force

            	
              3.05

            
	
              Development Plan

            	
              3.02(a)

            
	
              Effective Date

            	
              Preamble

            
	
              FDA

            	
              1.13

            
	
              Force Majeure

            	
              14.08

            
	
              Inventory

            	
              4.01(b)

            
	
              Liability

            	
              11.01

            

       

      

      
        8

        
          

      

      	
              LIBOR

            	
              7.05(e)

            
	
              Licensee Indemnified Party

            	
              11.02

            
	
              Merck Indemnified Party

            	
              11.01

            
	
              Merck Retained Rights

            	
              2.01

            
	
              Option Notice

            	
              3.06(a)

            
	
              Research Use

            	
              2.01(c)

            
	
              Sublicense Agreement

            	
              2.05

            
	
              Supply Agreement

            	
              6.02(a)

            
	
              Supply Option

            	
              6.02(a)

            
	
              Term

            	
              12.01

            

       

      ARTICLE II - LICENSE

       

      2.01        License Grant. Subject to the terms and conditions of this agreement and Merck’s retained rights, Merck hereby grants the
        following to Licensee:

       

      
        
          	

                	(a)	
                  Development License.  A royalty bearing license in the Territory in the Field, with the right to grant sublicenses as provided herein, under the Compound Patent Rights, which Compound Patent
                    Rights license shall be exclusive (even as to Merck and its Affiliates, except as provided in Section 2.01(c)) to Develop, Manufacture, have Manufactured, use, import, export and Commercialize Licensed Compound and Licensed
                    Product in the Field in the Territory during the Term.

                

        

      

       

      
        
          	

                	(b)	
                  Know-How License.  A royalty bearing exclusive license in the Territory in the Field, with the right to grant sublicenses as provided herein, to Merck Know-How to Develop, Manufacture, have
                    Manufactured, use, import, export and Commercialize Licensed Compound and Licensed Product in the Field in the Territory during the Term.

                

        

      

       

      
        
          	

                	(c)	
                  Research License.  A license, co-exclusive with Merck and its Affiliates, with the right to grant sublicenses as provided herein, under the Compound Patent Rights and Merck Know-How to
                    research, make, have made, use, and import Licensed Compound and Licensed Product in the Field in the Territory during the Term for research use (“Research Use”).  Research Use does not include any right to Commercialize Licensed
                    Compound or Licensed Product in the Field.

                

        

      

       

      For the avoidance of doubt, Merck retains all rights not granted herein, including the Research Use right, to all Compound Patent Rights and Merck Know-How including Licensed Compound and Licensed Product for the
        Term (“Merck Retained Rights”).

       

      2.02       Non-Exclusive License Grant. Merck hereby grants to Licensee a non-exclusive license in the Territory in the Field to any
        patent applications or patents owned or controlled by Merck that result from the exercise of its Research License under Section 2.01(c), but only to the extent said patent applications or patents (i) have claims specifically and solely
        covering Licensed Compound and/or the Manufacture and/or use thereof and (ii) are reasonably necessary by Licensee for the Development or Commercialization of Licensed Compound as contemplated in the Development Plan, said non-exclusive license to
        Develop, Manufacture, have Manufactured, use, import, export and Commercialize Licensed Compound in the Field in the Territory during the Term in accordance with the Development Plan.

       

      

      
        9

        
          

      

      2.03       No Non-Permitted Use. Licensee hereby covenants that it shall not, nor shall it cause or permit any Affiliate or sublicensee
        to knowingly, use or practice, directly or indirectly, any Merck Know-How or Compound Patent Rights for any purposes other than those expressly permitted by this Agreement.

       

      2.04        No Other Licenses. Neither Party grants to the other Party any rights or licenses in or to any intellectual property,
        whether by implication, estoppel, or otherwise, other than the license rights that are expressly granted under this Agreement.

       

      2.05       Right to Sublicense and Sublicense Agreements. The licenses granted in this Section 2.01 may be sublicensed by
        Licensee to (a) an Affiliate, (b) a Third Party for any country in the Territory other than the U.S., the Major European Countries and Japan without the consent of Merck; and (c) a Third Party for the U.S., Major European Countries and Japan with
        the prior written consent of Merck, not to be unreasonably withheld.  Licensee shall, in each agreement under which it grants a sublicense under the licenses set forth in Section 2.01 (each, a “Sublicense Agreement”), require the
        sublicensee to transfer to Merck, if this Agreement terminates, and to Licensee, if only such sublicense terminates, (a) all regulatory filings and Marketing Authorizations held, possessed or controlled by such sublicensee and (b) all patent rights
        and Know-How controlled by such sublicensee relating to Licensed Compound or Licensed Product or its use, Manufacture, sale, or importation (such patent rights and Know-How shall be transferred either by (i) assignment, or by a freely sublicensable
        exclusive license, in the case of patent rights and Know-How related solely to Licensed Compound or Licensed Product, or (ii) by a non-exclusive license in the case of patent rights and Know-How that are related to patents or products other than
        Licensed Compound or Licensed Product).  Any sublicense agreement shall be consistent with the terms and conditions of this Agreement, and without limiting the foregoing, shall include the following provisions for the benefit of Merck:

       

      
        
          	

                	(a)	
                  must require the sublicensee to abide by confidentiality and non-use obligations at least as stringent as those contained in Article IX of this Agreement;

                

        

      

       

      
        
          	

                	(b)	
                  must include rights and obligations upon termination of the sublicense which are consistent in all material respects with the termination provisions of this Agreement;

                

        

      

       

      
        
          	

                	(c)	
                  in the event that the sublicensee is granted the right to offer to sell or sell Licensed Compound or Licensed Product, must require the sublicensee to pay at least the royalties on Net Sales of Licensed Product specified in Article

                      VII of this Agreement and to keep records and render reports as required in Section 7.04 and Section 7.05 and be subject to Merck’s audit rights as set forth in Section 7.05 of this Agreement;

                

        

      

       

      
        
          	

                	(d)	
                  must preclude the sublicensee from granting further sublicenses or the right to enforce the Compound Patent Rights;

                

        

      

       

      
        
          	

                	(e)	
                  must obligate the sublicensee to maintain insurance in amounts consistent with Section 11.06;

                

           

          

        

      

      
        10

        
          

      

      
        
          	

                	(f)	
                  must provide an indemnity from the sublicensee in favor of Merck and Merck Indemnified Party to the same extent as the indemnity contained in Section 11.01, and must provide that the sublicensee agrees that it will not
                    challenge the standing of Merck if it seeks to rely on such indemnification; and

                

        

      

       

      
        
          	

                	(g)	
                  must include a provision stating, in words or substance, that Merck is not a party to the sublicense agreement and has no liability to any licensee, sublicensee or user of anything covered by the sublicense agreement, but that Merck
                    is an intended third party beneficiary of the sublicense agreement and certain of its provisions are for the benefit of Merck and are enforceable by Merck in its own name.

                

        

      

       

      Licensee shall (i) use reasonable efforts to procure the performance by any sublicensee of the terms of each such sublicense Agreement, and (ii) ensure that any sublicensee will comply with the applicable terms and
        conditions of this Agreement.  Licensee hereby guarantees the performance of its Affiliates and sublicensees that are sublicensed as permitted herein, and the grant of any such sublicense will not relieve Licensee of its obligations under this
        Agreement, except to the extent they are satisfactorily performed by such Affiliate or sublicensee.

       

      2.06       Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section of this Agreement
        are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code.  Each Party shall retain and may fully
        exercise all of its rights and elections under the Bankruptcy Code or equivalent legislation in any other jurisdiction.  Upon the bankruptcy of either Party, the other Party shall further be entitled to a complete duplicate of (or complete access
        to, as appropriate) any such intellectual property, and such, if not already in its possession, shall be promptly delivered to such other Party, unless the Party in bankruptcy elects to continue, and continues, to perform all of its obligations
        under this Agreement.

       

      ARTICLE III - DEVELOPMENT AND COMMERCIALIZATION

       

      3.01        Overview.  As of the Effective Date, Licensee shall be solely responsible for the Development and Commercialization,
        including all costs thereof, of Licensed Product in the Field in the Territory.  Licensee shall perform all of its Development activities in accordance with an IND for Licensed Product and with all applicable laws, rules and regulations.

       

      3.02        Development and Commercialization Plans.

       

      
        
          	

                	(a)	
                  Initial Development Plan.  Not later than the Effective Date, the Parties shall have agreed on the initial Development plan for Licensed Product in the Field in the Territory, which shall be
                    incorporated as part of this Agreement as Schedule 3.02(a) (as may be amended in accordance with this Agreement, the “Development Plan”).

                

           

          

        

      

      
        11

        
          

      

      
        
          	

                	(b)	
                  Annual Development Plan.  Not later than thirty (30) days after December 31 of each Calendar Year, Licensee shall submit to Merck an updated Development Plan for the pending Calendar Year. 
                    Such update shall take into account completion, commencement, changes in or cessation of Development activities not contemplated by the then-current Development Plan sufficient to reflect that Diligent Efforts are being undertaken by
                    Licensee with respect to Licensed Compound.  The updated Development Plan shall also describe Licensee’s progress with respect to its Development efforts under this Agreement and shall include the following information for Licensed
                    Product: a description of the Development work to be conducted during the year in reasonable detail, including clinical studies, formulation work, manufacturing work, other testing work and regulatory activity; timelines for such work;
                    and key decision gates and milestones for such work.  Merck shall have the right to comment on such annual plan.  In the event Merck reasonably disagrees with the plan, Licensee shall consider Merck’s comments for revising the plan.  At
                    Merck’s written request, the President of Merck’s research division, or his designee, and the President of Licensee’s research division or equivalent position, or his designee, shall meet to discuss such comments and, if Licensee so
                    chooses, the changes can be incorporated into a revised annual Development Plan.  Any revision of the annual plan shall be submitted to Merck promptly after its completion.

                

        

      

       

      
        
          	

                	(c)	
                  Performance.  Licensee shall perform, and shall ensure that its Affiliates, sublicensees, and Third Party contractors perform, the activities described in the Development Plan in a professional
                    manner and in compliance with, to the extent applicable, Good Laboratory Practices, Good Clinical Practices and/or Good Manufacturing Practices and in compliance with all other applicable laws, rules, and regulations.

                

        

      

       

      
        
          	

                	(d)	
                  The Development Plans provided to Merck shall constitute Proprietary Information of Licensee subject to Article X.

                

        

      

       

      3.03       Commercialization. Licensee shall give Merck prior written notice of at least sixty (60) days of its intent to file an NDA
        for Licensed Product and at that time shall further provide Merck with the non-binding anticipated date of First Commercial Sale for Licensed Product in the country of filing based on best information available at the time.  Licensee shall promptly
        provide Merck with notice of any Marketing Authorization of Licensed Product.

       

      3.04       Commercialization Reports. Commencing with the First Commercial Sale and thereafter on an annual basis, Licensee shall
        provide Merck with a written non-binding estimate of annual Net Sales for Licensed Product in the Territory (“Annual Commercialization Report”).  The Annual Commercialization Report shall also list all ongoing Commercialization Studies and the
        status of such studies in the United States, the Major European Countries and Japan.

       

      3.05        Contract Sales Force. Licensee shall not use the services of sales representatives employed by a Third Party as a contract
        sales force for Licensed Product (“Contract Sales Force”) without the prior written consent of Merck, such consent not to be unreasonably withheld.

       

      3.06       Merck Option. In addition to the rights granted by Licensee to Merck in Section 2.01.  Licensee grants to Merck the
        option to evaluate Licensed Product and propose terms for a Development or Commercial Arrangement with respect to the Licensed Product in the Field on the following terms:

       

      

      
        12

        
          

      

      
        
          	

                	(a)	
                  Licensee shall notify Merck, in advance, in writing if at any time during the Term, Licensee intends to enter into a Development or Commercial Arrangement with a Third Party (“Option Notice”).

                

        

      

       

      
        
          	

                	(b)	
                  In the event that Merck notifies Licensee within 10 days after the delivery of the Option Notice that Merck intends to propose terms for a Development or Commercial Arrangement between the Parties, Licensee shall provide Merck with
                    reasonable access to due diligence information customarily provided in the evaluation of similar Development or Commercial Arrangements.  No later than 45 days after the delivery of the Option Notice, Merck shall, at its sole
                    discretion, submit terms for a Development or Commercial Arrangement and if such terms are satisfactory to Licensee, after Licensee considers them in good faith, the Parties will negotiate in good faith for a period of sixty (60) days
                    from Merck’s submission of its terms to enter into a definitive agreement for such Development or Commercial Arrangement.

                

        

      

       

      ARTICLE IV - REGULATORY; MATERIALS AND INFORMATION TRANSFER

       

      4.01        Materials and Regulatory Filings Transfer.

       

      
        
          	

                	(a)	
                  As soon as is reasonably practicable following the Effective Date of this Agreement, but in any event no later than forty-five (45) days after the Effective Date, Merck shall transfer to Licensee the Merck Know-How listed in Schedule

                      1.28 in single copy in electronic format only.  Merck shall be responsible for all costs associated with transfer of Merck Know-How.

                

        

      

       

      
        
          	

                	(b)	
                  As soon as is reasonably practicable following the Effective Date of this Agreement, Merck shall transfer to Licensee, in a mutually agreed manner, the quantities of physical inventory (“Inventory”) of Licensed Compound in Merck’s
                    possession solely as listed in Schedule 4.01(b) and shall inform Licensee in writing as to the quantities of such Inventory that are in compliance with Good Manufacturing Practices following Merck’s recertification of such
                    Inventory; provided that the quantities listed are general guidance estimates only of the amounts currently anticipated to be available for shipping from Merck.  Merck shall have no further obligation to make any further Licensed
                    Compound(s) available to Licensee.  Consistent with the license grant in Section 2.01, such Inventory shall only be used for clinical or commercial purposes to the extent that such Inventory was recertified by Merck as compliant
                    with Good Manufacturing Practices; otherwise, such Inventory shall only be used in preclinical work in accordance with the license grant is Section 2.01.

                

        

      

       

      
        
          	

                	(c)	
                  As soon as is reasonably practicable after the Effective Date (or such other date as may be mutually agreed by the Parties), Merck shall transfer to Licensee in electronic format the existing INDs and other drug approval applications
                    listed in Schedule 1.28 covering Licensed Product.  All further submissions to any Regulatory Authorities relating to such drug approval applications and/or INDs shall be filed in the name of and owned by Licensee or its
                    Affiliates.  Licensee or its Affiliates shall hold all Marketing Authorizations for Licensed Product throughout the Territory.

                

           

          

        

      

      
        13

        
          

      

      
        
          	

                	(d)	
                  As soon as is reasonably practicable after the Effective Date (or such other date as mutually agreed by the Parties), Merck shall transfer to Licensee one (1) copy of the material documents and records that have been generated by or
                    on behalf of Merck with respect to any existing INDs and other drug approval applications covering Licensed Product in the Territory, as well as any material correspondence between Merck and Regulatory Authorities related to Licensed
                    Product, solely to the extent listed on Schedule 1.28.

                

        

      

       

      
        
          	

                	(e)	
                  Licensee shall oversee, monitor and coordinate all regulatory actions, communications and filings with, and submissions to, the FDA and other Regulatory Authorities in the Territory with respect to Licensed Product.

                

        

      

       

      
        
          	

                	(f)	
                  Licensee shall be solely responsible for interfacing, corresponding and meeting with the FDA and other Regulatory Authorities throughout the Territory with respect to Licensed Product.  Licensee shall provide Merck with copies of any
                    material correspondence with FDA or other Regulatory Authorities in the United States, the Major European Countries and Japan relating to approval of Licensed Product, and respond to all reasonable inquiries by Merck with respect
                    thereto.  Licensee shall also provide Merck in a timely manner with meeting minutes from any material meetings with Regulatory Authorities in the United States, the Major European Countries and Japan concerning the approval of Licensed
                    Product.

                

        

      

       

      
        
          	

                	(g)	
                  Licensee shall provide to Merck a table report on an annual basis that contains the status of Marketing Authorizations for Licensed Product in the Territory.

                

        

      

       

      
        
          	

                	(h)	
                  In the event that any Regulatory Authority (a) threatens or initiates any action to remove a Licensed Product from the market in any country in the Field in the Territory after a Marketing Authorization has been issued in such
                    country or (b) requires Licensee, its Affiliates, or its sublicensees to distribute a “Dear Doctor” letter or its equivalent regarding use of Licensed Product in the Field, Licensee shall notify Merck of such event within one (1)
                    business day after Licensee becomes aware of the action, threat, or requirement (as applicable).  Licensee shall consult with Merck prior to initiating a recall or withdrawal of Licensed Product in the U.S., Japan, or a Major European
                    Country; provided, however, that the final decision as to whether to recall or withdraw a Licensed Product in the Territory shall be made by Licensee in its sole discretion.  Licensee shall be responsible, at its sole expense, for
                    conducting any recalls or taking such other necessary remedial action.

                

        

      

       

      
        
          	

                	(i)	
                  Other than as set forth in Section 4.01(j), Merck shall have no obligation under this Section 4.01 to provide additional Merck Know-How to Licensee that is not specifically listed in Schedule 1.28, additional
                    Inventory of Licensed Compound that is not listed in Schedule  4.01(b), or to provide any technical, regulatory or other advice or assistance.  Merck shall retain the Inventory of Licensed Compound in Merck’s possession that is
                    not listed in Schedule 4.01(b), which may be used by Merck pursuant to the Merck Retained Rights under Section 2.01.  For the avoidance of doubt, Merck shall have no obligation to provide the source documentation or any
                    additional data, in any form, other than that provided within the Merck Know-How as listed in Schedule 1.28, or to provide information on patent searches, competitive analyses, market assessments, financial projections and/or
                    strategies relating to Licensed Compound or Licensed Product.

                

           

          

        

      

      
        14

        
          

      

      
        
          	

                	(j)	
                  Merck agrees, at the reasonable request of Licensee, to provide Licensee with technical, regulatory or other advice or assistance, and to reasonably cooperate with Licensee in connection with the transfer of regulatory filings
                    relating to Licensed Compound or Licensed Product.  It is the intent of the Parties that Merck’s obligation under this Section 4.01(j) shall extend no longer than nine (9) months after the Effective Date, after which date, Merck
                    shall have no obligation under this Section 4.01, though Merck may at its sole discretion provide such advice or assistance beyond this date.

                

        

      

       

      4.02        Pharmacovigilance.

       

      
        
          	

                	(a)	
                  Following the transfer of any INDs related to Licensed Product from Merck to Licensee, Licensee shall be solely responsible for the collection, review, assessment, tracking and filing of information related to adverse events (“AEs”)
                    associated with each Licensed Product in the Field, in accordance with 21 CFR 312.32, 314.80 and comparable regulations, guidance, directives and the like governing AEs associated with Licensed Product that are applicable outside of the
                    United States.

                

        

      

       

      
        
          	

                	(b)	
                  Licensee shall assume responsibility for maintaining a global safety database for Licensed Product consistent with industry practices.

                

        

      

       

      ARTICLE V - DILIGENCE

       

      5.01        Generally. Licensee shall use Diligent Efforts to Develop and Commercialize Licensed Product in the Field in the United
        States, a Major European Country or Japan.

       

      5.02       Specific Obligations. Without limiting the generality of Section 5.01, Licensee shall (a) within twelve (12) months
        after the Effective Date, submit to Merck for review and consideration a non-binding update to the Development Plan proposing activities for the Development of Licensed Product, and (b) undertake the commercial launch of any Licensed Product in a
        country promptly after, and in any case not later than nine (9) months after, the date that Marketing Authorization is granted with respect to such country.

       

      5.03       Failure. In the event Licensee fails, in Merck’s determination, to comply with the obligations set forth in this Article
          V, Merck shall furnish Licensee with Notice of such determination.  Within ninety (90) days after receipt of such Notice, Licensee shall either (i) fulfill the relevant obligation or (ii) negotiate with Merck a mutually acceptable schedule of
        revised diligence obligations, failing which Merck shall have the right to exercise its termination rights under Article XII.

       

      ARTICLE VI - MANUFACTURING TECHNOLOGY TRANSFER

       

      6.01        Manufacturing Responsibility. Licensee will be responsible for the manufacturing of Licensed Compound and Licensed Product
        for use by Licensee, its Affiliates, and its sublicensees in the Field in the Territory.

       

      

      
        15

        
          

      

      
        [***] Indicates that information has been omitted.

         

        

        6.02        Supply Option Grant.

       

      
        
          	

                	(a)	
                  In further consideration of the license granted to Licensee hereunder, Licensee hereby grants to Merck an option to enter into a supply agreement with Licensee (“Supply Agreement”) pursuant to which Licensee or a Related Party will
                    supply Licensed Compound or Licensed Product to Merck for use under the Merck Retained Rights pursuant to Section 2.01 (“Supply Option”).  Merck shall have the right to exercise the Supply Option by providing written notice to
                    Licensee at any time during the Term.  Promptly following such notice, the Parties shall proceed in good faith to negotiate and execute a Supply Agreement for the supply of a specified amount of Licensed Compound or Licensed Product. 
                    The Parties shall have a period of three (3) months after the date on which Licensee receives notice of Merck exercising the Supply Option, in which to finalize and execute the Supply Agreement, which may be extended upon mutual written
                    agreement of the Parties.

                

        

      

       

      
        
          	

                	(b)	
                  The Supply Agreement shall include the following terms: (i) the specific amount of Licensed Compound or Licensed Product, which shall be no more than 2 kg of Licensed Compound or 15,000 units of Licensed Product, (ii) Licensed
                    Compound or Licensed Product shall be supplied to Merck at cost, and (iii) use of Licensed Compound or Licensed Product shall be permitted by Merck, its Affiliates or a Third Party under an agreement with Merck or its Affiliate, all in
                    accordance with the Merck Retained Rights as set forth in Section 2.01 of this Agreement.  Otherwise, the Supply Agreement shall contain the usual and typical clauses for such an agreement to be negotiated by the Parties.

                

        

      

       

      
        
          	

                	(c)	
                  Merck shall have the right to exercise the Supply Option a total number of five (5) times.

                

        

      

       

      ARTICLE VII - PAYMENTS; ROYALTIES AND REPORTS

       

      7.01        Consideration for License. In consideration for the license granted to Licensee hereunder, Licensee shall pay to Merck a
        non-refundable, non-creditable, upfront payment of [***], which shall be due within thirty (30) days of the Effective Date.

       

      7.02       Milestone Payments. Subject to the terms and conditions of this Agreement and in further consideration for the license
        granted herein, licensee shall make each of the following one-time, non-refundable, non-creditable milestone payments to Merck based on attainment of the Development, regulatory and commercial milestones indicated below:

       

      
        16

        
          

      

      
        [***] Indicates that information has been omitted.

         

        

      

      	 	
              Development Milestones

               

              

            
	 	
              Development Milestones

            	
              [***]

               

            
	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            	
              [***]

               

            
	 	
              [***]

               

              

            

       

      	 	
              Sales Milestone

               

              

            
	 	
              Sales Milestone

               

              

            	
              [***]

            
	 	
              [***]

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            
	 	
              [***]

            	
              [***]

               

            

       

      Licensee shall notify Merck in writing within ten (10) business days after the achievement of each such milestone event giving rise to a payment obligation under this Section and Licensee shall pay Merck the
        indicated amount no later than thirty (30) days after such notification to Merck.

       

      

      
        17

        
          

      

      
        [***] Indicates that information has been omitted.

         

        

        7.03        Royalties.

       

      
        
          	

                	(a)	
                  Royalty Rates.  Subject to the terms and conditions of this Agreement, Licensee shall pay to Merck royalties on Net Sales of Licensed Products on a country-by-country basis in an amount equal
                    to [***].  Notwithstanding the foregoing, in the event a generic version of a Licensed Product achieves [***] of total gross sales of Licensed Products in
                    a particular country (as stated in IMS reports, for example in the United States, and in an  analogous reports in other countries), the royalties payable to Merck under this Section 7.03(a) shall be reduced to [***] on Net Sales of Licensed Products in that particular country, for such time that the generic version of Licensed Product maintains [***] total gross
                    sales of Licensed Products tit in that particular country.

                

        

      

       

      
        
          	

                	(b)	
                  Term of Royalty Obligation.  Royalties on Licensed Product shall commence upon the First Commercial Sale of a Licensed Product in a particular country in the Territory and will continue on a
                    product-by-product, country-by-country basis until the later of (i) the expiration of the last to expire Valid Claim covering a Licensed Product in such country or (ii) the expiration of
                    regulatory exclusivity for Licensed Product in such country or (iii) [***].

                

        

      

       

      7.04        Reports; Payment of Royalty; Payment Exchange Rate and Currency Conversions.

       

      
        
          	

                	(a)	
                  Royalties Paid Quarterly.  Within [***] following the end of each Calendar Quarter, following the First Commercial Sale of a Licensed Product, Licensee
                    shall furnish to Merck a written report for the Calendar Quarter showing the Net Sales of Licensed Product sold by Licensee, its Affiliates and its sublicensees in the Territory during such Calendar Quarter and the royalties payable
                    under this Agreement for such Calendar Quarter.  Such written report shall include the gross sales of Licensed Product on a country-by-country basis, an itemized calculation of any deductions taken from such gross sales to arrive at Net
                    Sales for the applicable Calendar Quarter and the calculation of the amount of royalty payment due on such Net Sales.  Such report shall also include, on a country-by-country basis, the month and year of the first commercial sale of
                    Licensed Product.  Simultaneously with the submission of the written report, Licensee shall pay to Merck, for the account of Licensee or the applicable Affiliate or sublicensee, as the case may be, a sum equal to the aggregate royalty
                    due for such Calendar Quarter calculated in accordance with this Agreement.

                

        

      

       

      
        
          	

                	(b)	
                  Method of Payment.  All payments to be made by Licensee to Merck under this Agreement shall be paid by bank wire transfer in immediately available funds to such bank account as is designated in
                    writing by Merck from time to time.  Royalty payments shall be made in United States dollars to the extent that free conversion to United States dollars is permitted.  The rate of exchange to be used in any such conversion from the
                    currency in the country where such Net Sales are made shall be the rate of exchange used by Licensee for reporting such sales for United States financial statement purposes.  If, due to restrictions or prohibitions imposed by national
                    or international authority, payments cannot be made as aforesaid, the Parties shall consult with a view to finding a prompt and acceptable solution, and Licensee will make such payments in any manner as Merck may lawfully direct;
                    ,provided that Licensee shall not be obligated to incur any additional out-of-pocket expenses in connection with such payments.  Notwithstanding the foregoing, if royalties in any country cannot be remitted to Merck for any reason
                    within six (6) months after the end of the Calendar Quarter during which they arc earned, then Licensee shall be obligated to deposit the royalties in a bank account in such country in the name of Merck.

                

           

          

        

      

      
        18

        
          

      

      
        [***] Indicates that information has been omitted.

      

       

        

      7.05        Maintenance of Records; Audits.

       

      
        
          	

                	(a)	
                  Record Keeping by Licensee.  Licensee and its Affiliates shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined.  Upon sixty
                    (60) days prior written notice from Merck, Licensee shall permit an independent certified public accounting firm of nationally recognized standing selected by Merck and reasonably acceptable to Licensee, at Merck’s expense, to have
                    access during normal business hours to examine the pertinent books and records of Licensee, its Affiliates and/or sublicensees as may be reasonably necessary to verify the accuracy of the royalty reports hereunder.  The examination
                    shall be limited to the pertinent books and records for any year ending not more than thirty-six (36) months prior to the date of such request.  Historical records will not be requested from Licensee for any periods prior to the
                    Effective Date of this Agreement.  An examination under this Section 7.05(a) shall not occur more than once in any Calendar Year.  Licensee may designate competitively sensitive information that such auditor may not disclose to
                    Merck, provided, however.  that such designation shall not encompass the auditor’s conclusions.  The accounting firm shall disclose to Merck only whether the royalty reports arc correct or incorrect and the specific
                    details concerning any discrepancies.  No other information shall be provided to Merck.  All such accounting firms shall sign a confidentiality agreement (in form and substance reasonably acceptable to Licensee) as to any of Licensee’s
                    or its Affiliate’s confidential information that such accounting firms are provided, or to which they have access, while conducting any audit pursuant to this Section 7.05(a).

                

        

      

       

      
        
          	

                	(b)	
                  Underpayments/Overpayments.  If such accounting firm correctly concludes that additional royalties were owed during such period, Licensee shall pay such additional royalties within thirty (30)
                    days of the date Merck delivers to Licensee such accounting firm’s written report so correctly concluding.  If such underpayment exceeds Two Hundred Fifty Thousand Dollars and five percent (5%) of the sums correctly due Merck then the
                    fees charged by such accounting firm for the work associated with the underpayment audit shall be paid by Licensee.  Any overpayments by Licensee will be credited against future royalty obligations.

                

        

      

       

      
        
          	

                	(c)	
                  Record Keeping by Sublicensee.  Licensee shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to Licensee, to keep and
                    maintain records of sales made pursuant to such sublicense and to grant access to such records by Merck’s independent accountant to the same extent required of Licensee under this Agreement.

                

        

      

       

      
        
          	

                	(d)	
                  Confidentiality.  Merck shall treat all financial information subject to review under this Section 7.05, or under any sublicense agreement, in accordance with the confidentiality

                

           

          

        

      

       provisions of Article IX of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with Licensee obligating it to retain all such
        financial information in confidence pursuant to such confidentiality agreement.

       

      
        
          	

                	(e)	
                  [***].

                

        

      

      

      
        19

        
          

      

       ARTICLE VIII - PATENTS

       

      8.01       Prosecution and Maintenance of Patents. Merck agrees to prosecute and maintain in the Territory, on its own or through
        mutually agreeable outside counsel, the Compound Patent Rights, provided that Licensee will reimburse Merck for its out-of-pocket expenses, including legal fees, relating to such patent prosecution and maintenance in all countries.  Merck shall
        keep Licensee advised of such patent prosecution and maintenance and upon the written request of the Licensee, will provide advance copies of any substantive papers related to the prosecution and maintenance of such patent filings.  A budget
        estimate of total patent costs to the best estimate of Merck will be provided to Licensee within sixty (60) days of after the Effective Date.

       

      8.02       Option of Licensee to Prosecute and Maintain Patents. Merck shall give notice to Licensee of any desire to cease prosecution
        and/or maintenance of any patent application or patent included in the Compound Patent Rights and, in such case, shall permit Licensee, at Licensee’s sole discretion, to continue the prosecution or maintenance of the Compound Patent Rights in
        Merck’s name at the expense of Licensee.

       

      8.03       Enforcement and Defense. In the event that either Licensee or Merck becomes aware of any alleged, threatened or actual
        commercially material infringement of a Compound Patent Right in a country in the Territory, or judicial challenge to the validity of a Compound Patent Right in a country in the Territory, it will notify the other Party in writing to that effect
        within a reasonable time period.  Merck and Licensee shall thereafter consult and cooperate fully to determine a course of action, including but not limited to the commencement of legal action by either or both Merck and Licensee to terminate any
        infringement of Compound Patent Rights or defend the validity of any Compound Patent Right.  In all instances, each Party shall have the right to be represented by counsel of its own choice.

       

      
        
          	

                	(a)	
                  First Right of Merck; Right of Licensee to Assume.  Merck shall have the first right to initiate, prosecute or control any such legal action.  Merck shall promptly notify Licensee in writing if
                    it elects not to exercise such first right and, if the rights of Licensee under this Agreement may be materially affected, Licensee shall thereafter have the right to either initiate, prosecute or control, entirely under its own
                    direction, any such legal action, in the name of Licensee and, if necessary, Merck.

                

           

          

        

      

      
        20

        
          

      

      
        
          
            [***] Indicates that information has been omitted.

             

            

          

          	

                	(b)	
                  Expenses and Cooperation.  Merck shall bear all the expenses of any legal action brought by it and in which Licensee is not a party to the action.  Licensee shall have the right, prior to
                    commencement of the legal action brought by Merck, to join any such legal action in which the rights of Licensee under this Agreement may be materially affected.  In the event that Licensee joins in such legal action, or initiates,
                    prosecutes or controls the defense of any such action pursuant to Section 8.03(a), Licensee shall pay the costs of such legal action.  Each Party shall keep the other informed of developments in any action or proceeding,
                    including, to the extent permissible by law, the consultation and approval of any settlement negotiations and the terms of any offer related thereto.  In the event that Licensee is a party to such a legal action, no settlement, consent
                    judgment or other voluntary final disposition of the suit may be entered into without the mutual consent of Licensee and Merck, and such consent shall not be unreasonably withheld.

                

        

      

       

      
        
          	

                	(c)	
                  Recovery.  [***].

                

        

      

       

      8.04       Patent Term Restoration.  The Parties hereto shall cooperate with each other in obtaining patent term restoration or
        supplemental protection certificates or their equivalents in any country in the Territory where applicable to Compound Patent Rights.  In the event there is a conflict between Merck and Licensee with respect to an election for obtaining such patent
        term restoration or supplemental protection certificates or their equivalents, Merck shall have the right to make the election and Licensee agrees to abide by such election.  Each Party agrees to assist the other Party as needed with the filing and
        prosecuting of any such application for patent term restoration or supplemental protection certificates or their equivalents.  In the event Merck makes the election pursuant to its right under this Section 8.04.  Merck shall pay all costs
        associated with the preparation, filing and prosecuting of any such application for patent term restoration or supplemental protection certificates or their equivalents; otherwise the cost will be borne by Licensee.

       

      8.05       Interference, Derivation, Opposition, Reissue Reexamination and Post Grant Review Proceedings. Any Party shall, within ten
        (10) business days of learning of any request for, or filing or declaration of, any interference, derivation, opposition, reexamination, or post grant review (or similar administrative proceedings) relating to Compound Patent Rights, inform the
        other Party of such event.  Merck and Licensee shall thereafter consult and cooperate fully to determine a course of action with respect to any such proceeding.  Merck shall have the first right to control any such proceeding or action.  Merck
        shall promptly notify Licensee in writing if it elects not to exercise such first right and, if the rights of Licensee under this Agreement may be materially affected, Licensee shall thereafter have the right to control, entirely under its own
        direction, any such proceeding or action, in the name of Merck.  The controlling Party shall bear the expense of such proceeding or action.  The controlling Party shall keep the non-controlling Party informed of developments in any such action or
        proceeding, including, to the extent permissible by law, consultation and approval of any settlement, the status of any settlement negotiations and the terms of any offer related thereto.

       

      8.06       Abandonment. Merck shall promptly give notice to Licensee of the grant lapse, revocation, surrender, invalidation or
        abandonment of any Compound Patent Rights licensed to Licensee for which Merck is responsible for the prosecution and maintenance under this Agreement.  If Merck declines to exercise its first right under Section 8.03 or Section 8.05,
        Merck shall have no obligation to initiate, prosecute or control any such legal action or proceeding.

       

      8.07       No Challenge of Validity of Patent. Licensee hereby agrees that in the event that it, its Affiliates or sublicensees
        challenges the validity of any patent application or patent within the Compound Patent Rights, Merck may, in its sole discretion, exercise its termination rights under Article XII.

       

      

      
        21

        
          

      

      ARTICLE IX - CONFIDENTIALITY AND PUBLICATION

       

      9.01        Confidentiality.

       

      
        
          	

                	(a)	
                  Nondisclosure Obligation.  Each of Merck and Licensee shall use any Proprietary Information received by it from the other Party only in accordance with this Agreement and shall not disclose to
                    any Third Party any such Proprietary Information without the prior written consent of the other Party.  The foregoing obligations shall survive the expiration or termination of this Agreement for a period of ten (10) years.  These
                    obligations shall not apply to Proprietary Information that:

                

        

      

       

      
        
          	

                	(i)	
                  is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party’s written records;

                

        

      

       

      
        
          	

                	(ii)	
                  is at the time of disclosure or thereafter becomes, published or otherwise part of the public domain without breach of the obligation of confidentiality under this Agreement by the receiving Party;

                

        

      

       

      
        
          	

                	(iii)	
                  is subsequently disclosed to the receiving Party by a Third Party who has the right to make such disclosure, as documented by the receiving Party’s written records;

                

        

      

       

      
        
          	

                	(iv)	
                  is independently developed by the receiving Party or its Affiliates and without the aid, use or application of any of the disclosing Party’s Proprietary Information, and such independent development can be documented by the receiving
                    Party’s written records;

                

        

      

       

      
        
          	

                	(v)	
                  is disclosed to any institutional review board of any entity conducting clinical trials with Licensed Product or to any governmental or other regulatory agencies in order to obtain patents or to gain approval to conduct clinical
                    trials or to market Licensed Product, provided that such disclosure may be made only to the extent reasonably necessary to obtain such patents or authorizations; or

                

        

      

       

      
        
          	

                	(vi)	
                  is required to be disclosed by law, regulation, rule, act or order of any governmental authority or agency to be disclosed, provided that notice is promptly delivered to the other Party in order to provide an opportunity to seek a
                    protective order or other similar order with respect to such Proprietary Information and thereafter the receiving Party discloses to the requesting entity only the minimum information required to be disclosed in order to comply with the
                    request, whether or not a protective order or other similar order is obtained by the other Party.

                

        

      

       

      
        
          	

                	(b)	
                  Disclosure to Agents.  Notwithstanding the provisions of Section 9.01(a) and subject to the other terms of this Agreement, each of Licensee and Merck shall have the right to disclose
                    Proprietary Information to their respective sublicensees, agents, consultants, Affiliates or other Third Parties (collectively “Agents”) in accordance with this Section 9.01(b).  Such disclosure shall be limited only to those
                    Agents directly involved in the Development, Manufacturing, marketing or promotion of Licensed Compound or Licensed Product (or for such Agents to determine their interest in performing such activities) in accordance with this
                    Agreement.  Any such Agents must agree in writing to be bound by confidentiality and non-use obligations essentially the same as those contained in this Agreement.

                

           

          

        

      

      
        22

        
          

      

      9.02       Return of Confidential Information. Upon termination of this Agreement, the receiving Party will return all documents, and
        copies thereof, including those in the possession of the receiving Party’s Agents pursuant to Section 9.01(b), containing the disclosing Party’s Proprietary Information at any time upon the written request of the disclosing Party.  However,
        the receiving Party may retain one (1) copy of such documents in a secure location solely for the purposes of (i) determining its obligations hereunder, (ii) complying with any applicable regulatory requirements, or (iii) defending against any
        product liability claim.

       

      9.03        Breach of Confidentiality. The Parties agree that the disclosure of the Disclosing Party’s Proprietary Information in
        violation of this Agreement may cause the Disclosing Party irreparable harm and that any breach or threatened breach of this Agreement by the Receiving Party entitles disclosing Party to seek injunctive relief, in addition to any other legal or
        equitable remedies available to it, in any court of competent jurisdiction.  For clarity, such disputes shall not be subject to Article XIII.

       

      9.04       No Publicity. A Party may not use the name of the other Party in any publicity or advertising and may not issue a press
        release or otherwise publicize or disclose any information related to the existence of this Agreement or the terms or conditions herein, except (i) on the advice of its counsel as required by law (e.g., any Securities and Exchange Commission
        filings and disclosures) and provided the Party who will be disclosing such information has consulted with the other Party to the extent feasible prior to such disclosure with respect to the substance of the disclosure; or (ii) as consented to in
        advance by the other Party in writing.  The Parties shall agree on a form of initial press release that may be used by either Party on an ongoing basis to describe this Agreement.  Licensee shall provide Merck with reasonable advance written notice
        of any press release or other public disclosure of the results of any of its work on Licensed Product under this Agreement.

       

      9.05        Scientific Publications. Each Party recognizes the mutual interest in obtaining valid patent protection and in protecting
        business interests and trade secret information.  Consequently, except for disclosures permitted pursuant to Section 9.01 and Section 9.04 of this Agreement, in the event that a Party wishes to make a publication containing any
        Merck Know-How or that is the subject of Compound Patent Rights, such Party shall deliver to the other Party a copy of the proposed written publication at least sixty (60) days prior to submission for publication.  The Parties shall have the right
        to propose modifications to or delay of the publication for patent reasons or trade secrets.  If a reviewing Party requests a delay for patent reasons, the other Party shall delay submission for a period of up to ninety (90) days to enable patent
        applications protecting each Party’s rights in such information to be filed.  Upon expiration of such delay, the Party seeking to publish shall be free to proceed with the publication.  If a Party requests modifications to the publication, the
        Party seeking to publish shall edit such publication to prevent disclosure of trade secret or Proprietary Information prior to submission of the publication.

       

      

      
        23

        
          

      

      9.06       Terms of Agreement. Neither Party nor its Affiliates shall disclose any terms or conditions of this Agreement to any Third
        Party without the prior consent of the other Party, except as follows: A Party and its Affiliates may disclose the terms or conditions of this Agreement (but not any other Proprietary Information, which may be disclosed only as described elsewhere
        in this Article IX), (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, provided that such advisors are subject to confidentiality with regard to such information under an
        agreement or ethical obligation; (b) to a Third Party in connection with (i) a financing (or proposed financing) or an equity investment (or proposed investment) in such Party or its Affiliates, including to its shareholders and prospective
        shareholders, (ii) a merger, consolidation or similar transaction by such Party or its Affiliates, (iii) the sale of all or substantially all of the assets of such Party or its Affiliates, or (iv) in connection with a Securitization, provided that
        such Third Party executes a non-use and non-disclosure agreement and observes the same obligations of confidentiality as such Party owes under this Agreement with respect to Proprietary Information of the other Party; (c) to the United States
        Securities and Exchange Commission or any other securities exchange or governmental entity, including as required to make an initial or subsequent public offering, or (d) as otherwise required by law or regulation, provided that in the case of (c)
        and (d) the disclosing Party shall (x) if practicable, provide the other Party with reasonable advance notice of and an opportunity to comment on any such required disclosure, (y) if requested by such other Party, seek, or cooperate with such
        Party’s efforts to obtain, confidential treatment or a protective order with respect to any such disclosure to the extent available at such other Party’s expense, and (z) use good faith efforts to incorporate the comments of such other Party in any
        such disclosure or request for confidential treatment or protective order.

       

      ARTICLE X - REPRESENTATIONS AND WARRANTIES

       

      10.01      Representations and Warranties of Each Party.  Each of Merck and Licensee hereby represents, warrants and covenants to the
        other Party hereto as follows:

       

      
        
          	

                	(a)	
                  it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation;

                

        

      

       

      
        
          	

                	(b)	
                  the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action;

                

        

      

       

      
        
          	

                	(c)	
                  it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

                

        

      

       

      
        
          	

                	(d)	
                  the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions herein does not and will not conflict with or result in a breach of any of the terms and provisions of or
                    constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its corporate charter or
                    other operative documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound;

                

           

          

        

      

      
        24

        
          

      

      
        
          	

                	(e)	
                  except for the governmental and Marketing Authorizations required to market Licensed Product in the Territory, the execution, delivery and performance of this Agreement by such Party does not require the consent, approval or
                    authorization of, or notice, declaration, filing or registration with, any governmental or Regulatory Authority and the execution, delivery or performance of this Agreement will not violate any law, rule or regulation applicable to such
                    Party;

                

        

      

       

      
        
          	

                	(f)	
                  this Agreement has been duly authorized, executed and delivered and constitutes such Party’s legal, valid and binding obligation enforceable against it in accordance with its terms subject, as to enforcement, to bankruptcy,
                    insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to the availability of particular remedies under general equity principles; and

                

        

      

       

      
        
          	

                	(g)	
                  it shall comply with all applicable material laws and regulations relating to its activities under this agreement.

                

        

      

       

      10.02      Licensee’s Representations.  Licensee hereby represents, warrants and covenants to Merck as follows: 

       

      
        
          	

                	(a)	
                  during the Term of this Agreement it will not use in any capacity, in connection with any services to be performed under this Agreement, any individual who has been debarred pursuant to the Act;

                

        

      

       

      
        
          	

                	(b)	
                  its strategy incorporates the capacity and resources to Develop and Commercialize Licensed Product and to Manufacture Licensed Compound.

                

        

      

       

      10.03      Merck’s Representations. Merck hereby represents, warrants and covenants to Licensee as follows: 

       

      
        
          	

                	(a)	
                  Merck owns or has licensed with a sublicensable interest the Compound Patent Rights and the Merck Know-How and has the full legal right and power to grant to Licensee the licenses of the scope and on the terms granted herein;

                

        

      

       

      
        
          	

                	(b)	
                  Merck has received no written communication claiming (or threatening to claim), and to the knowledge of Merck there is no pending claim, that the practice of the inventions described in the Compound Patent Rights infringes any
                    patents or patent applications or other rights of any third party; and

                

        

      

       

      
        
          	

                	(c)	
                  to its reasonable knowledge, as the Effective Date, the patents and patent applications listed in Schedule 1.8 are the only patents in force and pending patent applications owned or controlled by Merck (and/or its Affiliates)
                    that claim Licensed Compound as a composition of matter and are necessary for the Development or Commercialization of Licensed Compound as contemplated in the Development Plan.

                

           

          

        

      

      
        25

        
          

      

      10.04      No Inconsistent Agreements. Neither Party has in effect, and after the Effective Date neither Party shall enter into, any
        oral or written agreement or arrangement that would be inconsistent with its obligations under this Agreement.

       

      10.05     Representation by Legal Counsel. Each Party hereto represents that it has been represented by legal counsel in connection
        with this Agreement and acknowledges that it has participated in the drafting of this Agreement.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the
        Party that drafted such terms and provisions.

       

      10.06     Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE X, LICENSED COMPOUND, LICENSED PRODUCT, COMPOUND PATENT
        RIGHTS AND MERCK KNOW-HOW ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE
        USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

       

      10.07     No Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY HERETO MAKES ANY REPRESENTATION AND
        EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED.  IN PARTICULAR, BUT WITHOUT LIMITATION, MERCK MAKES NO REPRESENTATION AND EXTENDS NO WARRANTY CONCERNING WHETHER THE DESIGNATED COMPOUND OR A DESIGNATED PRODUCT IS FIT FOR ANY PARTICULAR
        PURPOSE OR SAFE FOR HUMAN CONSUMPTION.

       

      ARTICLE XI - INDEMNIFICATION AND LIMITATION ON LIABILITY

       

      11.01      Indemnification by Licensee. Licensee shall indemnify, defend and hold harmless Merck and its Affiliates, and each of its
        and their respective employees, officers, directors and agents (each, a “Merck Indemnified Party”) from and against any and all liability, loss, damage, cost, and expense (including reasonable attorneys’ fees), subject to the limitations in Section

          11.05 (collectively, a “Liability”) that a Merck Indemnified Party may incur, suffer or be required to pay resulting from or arising out of (i) the development, Manufacture, promotion, distribution, use, marketing, sale or other disposition
        of Licensed Compound and/or Licensed Product by Licensee, its Affiliates or sublicensees, (ii) any breach by Licensee of any of its representations, warranties and covenants contained in Sections 10.01, 10.02, and 10.04 herein, and (iii)
        the negligence and/or willful misconduct of Licensee, its Affiliates or sublicensees.  Notwithstanding the foregoing, Licensee shall have no obligation under this Agreement to indemnify, defend or hold harmless any Merck Indemnified Party with
        respect to any Liabilities that result from the gross negligence or willful misconduct of Merck, Merck Indemnified Party or any of their respective employees, officers, directors or agents or that result from Merck’s breach of its obligations under
        this Agreement.

       

      

      
        26

        
          

      

      11.02     Indemnification by Merck. Merck shall indemnify, defend and hold harmless Licensee and its Affiliates, and each of its and
        their respective employees, officers, directors and agents (each, a “Licensee Indemnified Party”) from and against any Liability that a Licensee Indemnified Party may incur, suffer or be required to pay resulting from or arising in connection with
        (i) any breach by Merck of any of its representations, warranties and covenants contained in Sections 10.01, 10.03 and 10.04 herein and (ii) the negligence and/or willful misconduct of Merck.  Notwithstanding the foregoing, Merck shall have
        no obligation under this Agreement to indemnify, defend or hold harmless any Licensee Indemnified Party with respect to any Liabilities that result from the gross negligence or willful misconduct of Licensee, Licensee Indemnified Party or any of
        their respective employees, officers, directors or agents or that result from Licensee’s breach of its obligations under this Agreement,.

       

      11.03     Conditions to Indemnification.  The obligations of the indemnifying Party under Sections 11.01 and 11.02 are
        conditioned upon the delivery of written notice to the indemnifying Party of any potential Liability promptly after the indemnified Party becomes aware of such potential Liability.  The indemnifying Party shall have the right to assume the defense
        of any suit or claim related to the Liability if it has assumed responsibility for the suit or claim in writing; however, if in the reasonable judgment of the indemnified Party, such suit or claim involves an issue or matter that could have a
        materially adverse effect on the business operations or assets of the indemnified Party, the indemnified Party may retain control of the defense or settlement thereof by providing written notice of such effect to the indemnifying Party, but in no
        event shall such action or notice be construed as a waiver of any indemnification rights that the indemnified Party may have at law or in equity.  If the indemnifying Party defends the suit or claim, the indemnified Party may participate in (but
        not control) the defense thereof at its sole cost and expense.  The foregoing notwithstanding, the Parties acknowledge and agree that failure of the indemnified Party to promptly notify the indemnifying Party of a potential Liability shall not
        constitute a waiver of, or result in the loss of, such Party’s right to indemnification under Section 11.01 or 11.02.  as appropriate, except to the extent that the indemnifying Party’s rights, and/or its ability to defend against such
        Liability, are materially prejudiced by such failure to notify.

       

      11.04     Settlements. Neither Party may settle a claim or action related to a Liability without the consent of the other Party, and
        such consent shall not be unreasonably withheld, if such settlement would impose any monetary obligation on the other Party or require the other Party to submit to an injunction or otherwise limit the other Party’s rights under this Agreement.  Any
        payment made by a Party to settle any such claim or action shall be at its own cost and expense.

       

      11.05      Limitation of Liability. With respect to any claim by one Party against the other arising out of the performance or failure
        of performance of the other Party under this Agreement, the Parties expressly agree that the liability of such Party to the other Party for such breach shall be limited under this Agreement or otherwise at law or equity to direct damages only and
        in no event shall a Party be liable for punitive, exemplary or consequential damages.

       

      
        27

        
          

      

      
        [***] Indicates that information has been omitted.

         

        

        11.06      Insurance. At such time as Licensee or any of its sublicensee begins to sell or distribute Product(s), Licensee shall, at its own expense, procure and
        maintain policies of comprehensive general liability insurance (including without limitation product liability insurance) [***].  All such policies shall name Merck as an additional insured , and insurers
        will waive all rights of subrogation against Merck.  Upon Merck’s request, Licensee will promptly provide for itself and its sublicensees copies of certificates of insurance evidencing such coverages.  Licensee shall notify Merck not less than
        thirty (30) days in advance of any material change or cancellation of any policy.  Licensee shall continue to maintain such insurance in effect after the expiration or termination of this Agreement during any period in which Licensee or its
        sublicensee continues to make, have made, use, sell, offer to sell or import Product.  If any insurance is on a claims made basis, Licensee will maintain such insurance for a period of not less than five (5) years after it has ceased all commercial
        sale, distribution or use of any Product.

       

      ARTICLE XII - TERM AND TERMINATION

       

      12.01     Term and Expiration. This Agreement shall be effective as of the Effective Date and unless terminated earlier by mutual
        written agreement of the Parties or pursuant to Sections 12.02 or 12.03 below, the term of this Agreement shall continue in effect on a country-by-country and product-by-product basis until the expiration of Licensee’s obligation to pay
        royalties under Article VII herein (the “Term”).  Upon expiration of this Agreement in its entirety, Licensee’s license pursuant to Section 2.01 shall become a fully paid-up, perpetual non-exclusive license.

       

      12.02      Termination by Licensee.

       

      
        
          	

                	(a)	
                  Licensee’s Right to Terminate.  Licensee shall have the unilateral right to terminate this Agreement in its entirety without cause at any time by giving one hundred eighty (180) days advance
                    written notice to Merck.

                

        

      

       

      
        
          	

                	(b)	
                  Effect of Termination.  Upon termination of this Agreement in its entirety under Section 12.02(a), the rights and obligations hereunder shall terminate except as provided under Section

                      12.04.  and all rights to Licensed Compound and Licensed Product shall revert to Merck pursuant to Section 12.05.

                

        

      

       

      12.03      Termination for Cause.

       

      
        
          	

                	(a)	
                  Termination for Cause.  This Agreement may be terminated, in its entirety by written notice by either Party at any time during the term of this Agreement:

                

        

      

       

      
        
          	

                	(i)	
                  upon or after the breach of any material provision of this Agreement if the breaching Party has not cured such breach within sixty (60) days following receipt of written notice from the non-breaching Party requesting cure of the
                    breach or, if such breach is not susceptible of cure within such sixty (60) day period , the breaching Party has not taken appropriate steps to commence such cure during such sixty (60)-day period and continued to diligently pursue such
                    cure in a manner reasonably assuring such cure within a reasonable period of time thereafter (not to exceed one hundred eighty (180) days).  Any right to terminate under this Section 12.03(a) shall be stayed and the cure period
                    tolled in the event that, during any cure period, the Party alleged to have been in material breach shall have initiated dispute resolution in accordance with Article XIII with respect to the alleged breach, which stay and
                    tolling shall last so long as the allegedly breaching Party diligently and in good faith cooperates in the prompt resolution of such dispute resolution proceedings; or

                

           

          

        

      

      
        28

        
          

      

      
        
          
            [***] Indicates that information has been omitted.

             

            

          

          	

                	(ii)	
                  upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings by or against the other Party, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the
                    other Party, or in the event a receiver or custodian is appointed for such Party’s business, or if a substantial portion of such Party’s business is subject to attachment or similar process; provided, however, that in the case of any
                    involuntary bankruptcy proceeding, such right to terminate shall only become effective if the proceeding is not dismissed within one hundred twenty (120) days after the filing thereof.

                

        

      

       

      
        
          	

                	(b)	
                  Effect of Termination for Cause on License.

                

        

      

       

      
        
          	

                	(i)	
                  Termination by Licensee for Cause.  In the event this Agreement is properly terminated by Licensee under Section 12.03(a)(i), [***].  All other
                    rights and obligations hereunder shall terminate except as provided under Section 12.04.

                

        

      

       

      
        
          	

                	(ii)	
                  Termination by Merck for Cause.  In the event this Agreement is terminated by Merck under Section 5.03, 8.07, 12.03(a) and/or 14.01(b) the rights and obligations hereunder shall
                    terminate except as provided under Section 12.04, and all rights to Licensed Compound and Licensed Product shall revert to Merck pursuant to Section 12.05.

                

        

      

       

      12.04      Effect of Termination Generally. Expiration or termination of this Agreement shall not relieve the Parties of any obligation
        accruing prior to such expiration or termination, and the provisions of Article I (Definitions), Article IX (Confidentiality), Article XI (Indemnification and Limitation on Liability), Article XIII (Dispute Resolution),
        Article X1V (Miscellaneous) and Section 10.05, Section 10.06, Section 12.03(b), Section 12.04, Section 12.05 and Section 12.06 shall survive the expiration or termination of this Agreement. 
        Any expiration or early termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to termination, including the obligation to pay royalties for Licensed
        Product sold prior to such termination.

       

      12.05      Licensed Product Reversion. Upon termination of this Agreement in its entirety by Merck for any reason or by Licensee
        pursuant to Section 12.02, at Merck’s option and upon Merck’s written request, the following provisions shall apply:

       

      

      
        29

        
          

      

      
        
          	

                	(a)	
                  Effective upon such termination, without further action by either Party, Merck shall have a worldwide, fully paid-up, royalty-free, sublicensable, exclusive and perpetual license from Licensee under any Licensee Know-How or Licensee
                    Patent Rights existing at the time of termination and that is necessary or useful for the use, Development, Manufacture, or Commercialization of Licensed Product that is then being Developed or Commercialized by Licensee.  Merck’s
                    license under this Section 12.05(a) shall be limited solely to the right to Develop, make, have made, use, import, export, Commercialize, offer to sell and sell such Licensed Product in the Field and Territory.

                

        

      

       

      
        
          	

                	(b)	
                  Licensee shall reasonably cooperate with Merck in order to enable Merck to assume responsibility for the Development, Manufacture and/or Commercialization of all Licensed Products then being Developed, Manufactured or Commercialized
                    by Licensee.  Such cooperation and assistance shall be provided in a timely manner, not to exceed six (6) months, and shall include without limitation:

                

        

      

       

      
        
          	

                	(i)	
                  Licensee shall transfer to Merck (or its nominee) all INDs, Marketing Authorizations, drug approval applications for Marketing Authorizations, and all supporting documentation for such filings and applications, made or obtained by
                    Licensee or its Affiliates or any of its sublicensees to the extent relating to Licensed Product then being Commercialized or in Development.

                

        

      

       

      
        
          	

                	(ii)	
                  Licensee shall assign to Merck all of its rights in any trademarks and shall transfer to Merck all of its rights in any domain names containing trademarks, in each case to the extent that such trademarks have actually been or are
                    planned to be utilized by Licensee in connection with the Commercialization of Licensed Product in the Field.  Any assignment or transfer to Merck pursuant to this Section 12.05(b)(ii) shall be at no cost to Merck.

                

        

      

       

      
        
          	

                	(iii)	
                  Licensee shall transfer to Merck (or its nominee), to the extent not previously provided, a copy of all Licensee Know-How in its possession or under its control relating to any Licensed Product then being Commercialized or in
                    clinical Development by Licensee and reasonably necessary or useful for its continued Development, Manufacture and/or Commercialization, including without limitation all information contained in Licensee’s regulatory and/or safety
                    databases, all in the format then currently maintained by Licensee.

                

        

      

       

      
        
          	

                	(iv)	
                  Upon the written request of Merck, Licensee shall use reasonable and diligent efforts to assign to Merck any sublicenses previously granted by Licensee related to Licensed Product.

                

        

      

       

      
        
          	

                	(v)	
                  Upon the written request of Merck, Licensee, its Affiliates and its sublicensees shall complete any clinical studies related to Licensed Product in the Field that (x) are being conducted under Licensee’s IND for Licensed Product and
                    arc ongoing as of the date this Agreement is terminated, and (y) for which it is not practicable to transfer responsibility for conducting such studies to Merck; provided, however, that Merck agrees to reimburse Licensee for all
                    Development costs incurred by Licensee after termination in completing such studies.

                

           

          

        

      

      
        30

        
          

      

      
        
          	

                	(vi)	
                  Upon the request of Merck, Licensee shall transfer to Merck, at a price to be agreed in good faith, that shall not be more than one hundred and twenty-five percent (125%) of Licensee’s fully allocated Manufacturing cost for Licensed
                    Product, all quantities of Licensed Product in the possession of Licensee or its Affiliates (including, without limitation, clinical trial supplies and Licensed Product intended for commercial sale).

                

        

      

       

      
        
          	

                	(vii)	
                  At Merck’s written request, Licensee shall promptly provide to Merck copies of all clinical trial, contract manufacturing, or service agreements entered into by Licensee or its Affiliates with respect to Licensed Product.  At Merck’s
                    written request, Licensee shall promptly assign (or cause to be assigned), such agreements to Merck, to the extent such assignment is permitted under such agreement or, in the case that such agreements involve products other than
                    Licensed Product, to the extent that the portion of the agreement involving solely Licensed Product can be assigned.  In the event that such an assignment is not permitted under a particular clinical trial, contract manufacturing, or
                    service agreement, then Licensee shall reasonably cooperate (at Merck’s request) to assist Merck in obtaining the benefits of such agreement.

                

        

      

       

      
        
          	

                	(viii)	
                  The Parties shall use diligent efforts to complete the transition of the Development, Manufacture and Commercialization of Licensed Product from Licensee to Merck pursuant to this Section 12.05 as soon as is reasonably
                    possible.

                

        

      

       

      
        
          	

                	(ix)	
                  Notwithstanding anything to the contrary in this Section 12.05, any termination of this Agreement by Merck pursuant to Section 12.03(a)(i) or Section 5.03 shall be stayed and the cure period tolled in the
                    event that, during any cure period, Licensee shall have initiated dispute resolution in accordance with Article XIII with respect to the alleged breach, which stay and tolling shall last so long as Licensee diligently and in
                    good faith cooperates in the prompt resolution of such dispute resolution proceedings.

                

        

      

       

      12.06     Return of Merck Know-How. Not later than thirty days (30) days after the termination of this Agreement in its entirety by
        Merck for any reason or by Licensee pursuant to Section 12.02, Licensee shall, at Merck’s discretion, either destroy or return or cause to be returned to Merck, all Merck Know-How in tangible form received from Merck and any other documents
        containing Merck’s Proprietary information, and all copies thereof, including those in the possession of the receiving Party’s Agents pursuant to Section 9.01(b), except that Licensee may retain one (1) copy of Merck Proprietary Information
        in its confidential files in a secure location solely for the purposes of (i) determining its obligations hereunder, (ii) complying with any applicable regulatory requirements, or (iii) defending against any product liability claim.

       

      

      
        31

        
          

      

      ARTICLE XIII - DISPUTE RESOLUTION

       

      13.01     Informal Discussions. Except as otherwise provided herein, in the event of any controversy or claim arising out of or
        relating to this Agreement, or the rights or obligations of the Parties hereunder, or the relationship between the Parties with respect to Licensed Compound or Licensed Product, the Parties shall first try to settle their differences amicably
        between themselves.  Either Party may initiate such informal dispute resolution by sending written notice of the dispute to the other Party, and within thirty (30) days after such notice appropriate representatives of the Parties shall meet for
        attempted resolution by good faith negotiations.  If such representatives are unable to resolve promptly such disputed matter within the said thirty (30) days, either Party may refer the matter by written notice to the other to the appropriate
        therapy area Vice President of Merck Research Laboratories, or his designee, and the Chief Executive Officer of Licensee, or his designee, for discussion and resolution.  If such individuals or their designees are unable to resolve such dispute
        within thirty (30) days of such written notice, either Party may initiate arbitration proceedings in accordance with the provisions of this Article XIII.

       

      13.02     Arbitration. All disputes arising out of or relating to this Agreement, or the rights or obligations of the Parties
        hereunder, or relating in any way to the relationship between the Parties with respect to Licensed Compound or Licensed Product, shall be finally and exclusively settled by arbitration by a panel of three (3) arbitrators, provided such dispute is
        not an “Excluded Claim”.  As used in this Section, the phrase “Excluded Claim” shall mean a dispute, controversy or claim that concerns (a) the validity or infringement of a patent, trademark or copyright; or (b) any antitrust, anti-monopoly or
        competition law or regulation, whether or not statutory

       

      
        
          	

                	(a)	
                  The arbitration proceeding shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) with such proceedings to be held in Newark, New Jersey, United States.  In all cases, the
                    arbitration proceedings shall be conducted in the English language, and all documents that are submitted in the proceeding shall be in the English language.  Judgment upon the award rendered by arbitration may be issued and enforced by
                    any court having competent jurisdiction.

                

        

      

       

      
        
          	

                	(b)	
                  If a Party intends to begin an arbitration to resolve a dispute, such Party shall provide written notice to the other Party, informing the other Party of such intention and any statement of claim required under the applicable
                    arbitration rules (as determined in accordance with Section 13.02(a)).  Within twenty (20) business days after its receipt of such notice, the other Party shall, by written notice to the Party initiating arbitration, add any
                    additional issues to be resolved that would be considered mandatory counterclaims under New Jersey law.  For clarity, the resolution of any disputes regarding such counterclaims shall be conducted in the same proceedings as the initial
                    claims.

                

        

      

       

      
        
          	

                	(c)	
                  Within forty-five (45) days following the receipt of the notice of arbitration, the Party referring the matter to arbitration shall appoint an arbitrator and promptly notify the other Party of such appointment.  The other Party
                    shall, upon receiving such notice, appoint a second arbitrator within twenty one (21) days, and the two (2) arbitrators shall, within fifteen (15) days of the appointment of the second arbitrator, agree on the appointment of a third
                    arbitrator who will act with them and be the chairperson of the arbitration panel.  In the event that either Party shall fail to appoint an arbitrator within thirty (30) days after the commencement of the arbitration proceeding, the
                    arbitrator shall be appointed by the AAA.  In the event of the failure of the two (2) arbitrators to agree within sixty (60) days after the commencement of the arbitration proceeding to appoint the chairperson, the chairperson shall
                    also be appointed by the AAA.

                

           

          

        

      

      
        32

        
          

      

      
        
          	

                	(i)	
                  All of the arbitrators shall have significant legal or business experience in pharmaceutical licensing matters.  The arbitrators shall not be employees, directors or shareholders of either Party or any of their Affiliates.

                

        

      

       

      
        
          	

                	(ii)	
                  Each Party shall have the right to be represented by counsel throughout the arbitration proceedings.

                

        

      

       

      
        
          	

                	(iii)	
                  To the extent possible, the arbitration hearings and award will be maintained in confidence.

                

        

      

       

      
        
          	

                	(iv)	
                  In any arbitration pursuant to this Agreement, the award or decision shall be rendered by a majority of the members of the panel provided for herein, with each member having one (1) vote.  The arbitrators shall render a written
                    decision with their resolution of the dispute that shall set forth in reasonable detail the facts of the dispute and the reasons for their decision.  The decision of the arbitrators shall be final and non-appealable and binding on the
                    Parties.

                

        

      

       

      13.03     Injunctive Relief. By agreeing to arbitration, the Parties do not intend to deprive any competent court of such court’s
        jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings and the enforcement of any award or judgment.  Without prejudice to such provisional remedies in aid of arbitration as may
        be available under the jurisdiction of a national court, the court of arbitration shall have full authority to grant provisional remedies and to award damages for failure of any Party to respect the court of arbitration’s order to that effect.

       

      13.04     Expenses of Arbitration and Expert Determination. Each Party shall bear its own attorneys’ fees, costs, and disbursements
        arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrators; provided, however, that the arbitrators shall be authorized
        to determine whether a Party is the prevailing Party, and if so, to award to that prevailing Party reimbursement for its reasonable attorneys’ fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy
        charges and travel expenses).  Absent the filing of an application to correct or vacate the arbitration award as permitted by applicable law, each Party shall fully perform and satisfy the arbitration award within fifteen (15) days of the service
        of the award.

       

      ARTICLE XIV - MISCELLANEOUS

       

      14.01      Assignment/Change of Control.

       

      
        
          	

                	(a)	
                  Assignment.  Neither this Agreement nor any or all of the rights and obligations of a Party hereunder may be assigned, delegated, sold, transferred, sublicensed (except as otherwise provided
                    herein) or otherwise disposed of, by operation of law or otherwise, to any Third Party without the prior written consent of the other Party, and any attempted assignment, delegation, sale, transfer, prohibited sublicense or other
                    disposition, by operation of law or otherwise, of this Agreement or of any rights or obligations hereunder contrary to this Section 14.01 shall be a material breach of this Agreement by the attempting Party, and shall be void
                    and without force or effect; provided, however, that either Party may, without such consent of such Party, assign the Agreement and its rights and obligations hereunder to an Affiliate or in connection with the transfer
                    or sale of all or substantially all of its assets related to the division or the subject business, or in the event of its merger or consolidation or change in control or similar transaction.  This Agreement shall be binding upon, and
                    inure to the benefit of, each Party, its Affiliates, and its permitted successors and assigns.  Each Party shall be responsible for the compliance by its Affiliates with the terms and conditions of this Agreement.

                

           

          

        

      

      
        33

        
          

      

      
        
          	

                	(b)	
                  Change of Control at Licensee.  In the event that any Change of Control (as defined below) causes Licensee’s rights and obligations hereunder to pass to any Third Party, such Third Party shall,
                    within sixty (60) days after the effective date of such Change of Control, notify Merck of its intentions with regard to the Development and Commercialization of Licensed Product under this Agreement.  If the Third Party succeeding to
                    Licensee’s rights and obligations under this Agreement decides it will not continue the Development and/or Commercialization of Licensed Product, then Merck shall have the right to terminate this Agreement upon thirty (30) days written
                    notice to Licensee, without any opportunity to cure.  If the Third Party succeeding to Licensee’s rights and obligations under this Agreement decides to continue the Development and Commercialization of Licensed Product, then all of the
                    rights and obligations of Licensee under this Agreement shall inure to such Third Party; provided, that within forty-five (45) days after the Change of Control, such Third Party successor shall submit to Merck a new
                    Development Plan for the next succeeding twelve (12) month period.  Merck shall have the right to comment on the new Development Plan in accordance with the procedures set forth in Section 3.02(b).

                

        

      

       

      
        
          	

                	(c)	
                  Definition of Change of Control.  As used in this Section 14.01 the term “Change of Control” shall mean (i) any merger, reorganization, consolidation or combination in which a Party to
                    this Agreement is not the surviving corporation, or (ii) where any “person” (within the meaning of Sections 13(d) and 14 (d)(2) of the Securities Exchange Act of 1934), excluding Licensee and its Affiliates, is or becomes the beneficial
                    owner, directly or indirectly, of securities of the Party representing 50% or more of either (a) the then-outstanding shares of common stock of the Party or its parent corporation, or (b) the combined voting power of the Party’s
                    then-outstanding voting securities; or (iii) if individuals who as of the Effective Date constitute the Board of Directors of the Party or its parent corporation (the “Incumbent Board”) cease for any reason to constitute at least a
                    majority of such Board of Directors; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Party’s shareholders, was approved by a vote of at least
                    a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office
                    occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent
                    Board; or (iv) approval by the shareholders of a Party of a complete liquidation or the complete dissolution of such Party.  For the avoidance of doubt, any debt or equity capital raising transaction or series of related debt or equity
                    capital raising transactions entered into by Licensee for purposes of financing Licensee’s ongoing operations or other use contemplated by its then-current business plan shall not constitute a Change of Control hereunder.

                

           

          

        

      

      
        34

        
          

      

      14.02     Governing Law. This Agreement shall be governed, interpreted and construed in accordance with the laws of the State of New
        Jersey, without giving effect to its conflict of law principles.  Subject to the terms of this Agreement, all disputes under this Agreement shall be governed by binding arbitration pursuant to the mechanism set forth in Article XIII herein.

       

      14.03      Waiver. Any delay or failure 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, nor operate to bar the exercise or enforcement thereof at any time or times thereafter, excepting only as to an express
        written and signed waiver as to a particular matter for a particular period of time.

       

      14.04     Independent Relationship. Nothing herein contained shall be deemed to create an employment, agency, joint venture or
        partnership relationship between the Parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party.  Neither Party shall have any power
        to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever.

       

      14.05      Export Control. This Agreement is made subject to any restrictions concerning the export of products or technical
        information from the United States of America that may be imposed upon or related to Merck or Licensee from time to time by the government of the United States of America.  Furthermore, Licensee agrees that it will not export, directly or
        indirectly, any technical information acquired from Merck under this Agreement or any products using such technical information to any country for which the United States government or any agency thereof at the time of export requires an export
        license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other agency of the United States government when required by an applicable statute or regulation.

       

      14.06     Entire Agreement; Amendment. This Agreement, including the Exhibits and Schedules hereto and thereto, sets forth the
        complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersedes and terminates all prior agreements and understandings between
        the Parties with regard to the subject matter of this Agreement in the Territory.  There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as
        are set forth herein and therein.  No subsequent alteration, amendment, change, waiver or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

       

      14.07     Notices. Any notice required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by
        facsimile or electronic mail (and promptly confirmed by the other Party), sent by nationally-recognized overnight courier or sent by registered or certified mail; postage prepaid, return receipt requested, addressed as follows.

       

      
        35

        
          

      

      
        	 	
                if to Licensee, to:

              	
                Ammonett Pharma LLC

                3606 Salles Ridge Court

                Midlothian, VA, 23113

                Attention: Kevin P Tully CGA

                E Mail: kptully@hotmail.com

              
	 	 	 
	 	
                if to Merck, to:

              	
                Merck Sharp & Dohme Corp.

                One Merck Drive

                P.O. Box 100, WS3AB-05

                Whitehouse Station, NJ 08889-0100

                Attention: Office of Secretary

                Facsimile No.: (908)735-1246

              
	 	 	 
	 	
                and

              	
                Merck Sharp & Dohme Corp.

                2000 Galloping Hill Rd Mail Code 4385

                Kenilworth, NJ 07033

                Attention: Head of Global Outlicensing

                Facsimile: (908) 740-4040

              

         

        

      

      Any such notice shall be deemed to have been received on the earlier of the date actually received or the date five (5) days after the same was posted or sent.  Either Party may change its address or its facsimile
        number by giving the other Party written notice, delivered in accordance with this Section 14.07.

       

      14.08     Force Majeure. Failure of any Party to perform its obligations under this Agreement (except the obligation to make payments
        when properly due) shall not subject such Party to any liability or place them in breach of any term or condition of this Agreement to the other Party if such failure is due to any cause beyond the reasonable control of such non-performing Party
        (“Force Majeure”), unless conclusive evidence to the contrary is provided.  Causes of non-performance constituting Force Majeure shall include, without limitation, acts of God, fire, explosion, flood, drought, war, riot, sabotage, embargo, strikes
        or other labor trouble, failure in whole or in part of suppliers to deliver on schedule materials, equipment or machinery, interruption of or delay in transportation, a national health emergency or compliance with any order or regulation of any
        government entity acting with color of right.  The Party affected shall promptly notify the other Party of the condition constituting Force Majeure as defined herein and shall exert reasonable efforts to eliminate, cure and overcome any such causes
        and to resume performance of its obligations with all possible speed; provided that nothing herein shall obligate a Party to settle on terms unsatisfactory to such Party any strike, lockout or other labor difficulty, any investigation or other
        proceeding by any public authority or any litigation by any Third Party.  If a condition constituting Force Majeure as defined herein exists for more than ninety (90) consecutive days, the Parties shall meet to negotiate a mutually satisfactory
        resolution to the problem, if practicable.  If the Parties cannot in good faith reach a satisfactory resolution to the problem within sixty (60) days of meeting, the matter shall be handled pursuant to the dispute resolution provisions of Article

          XIII herein. 

       

      

      
        36

        
          

      

      14.09     Severability. If any provision of this Agreement is declared illegal, invalid or unenforceable by a court having competent
        jurisdiction, it is mutually agreed that this Agreement shall continue in accordance with its terms except for the part declared invalid or unenforceable by order of such court, provided, however, that in the event that the terms and conditions of
        this Agreement arc materially altered, the Parties will, in good faith, renegotiate the terms and conditions of this Agreement to reasonably substitute such invalid or unenforceable provisions in light of the intent of this Agreement. 

       

      14.10     Extension to Affiliates. Merck shall have the right to extend the rights, licenses, immunities and obligations under this
        Agreement to one or more Affiliates.  All applicable terms and provisions of this Agreement shall apply to such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to Merck. 

       

      14.11      Counterpart. This Agreement shall become binding when any one or more counterparts of it, individually or taken together,
        shall bear the signatures of each of the Parties hereto.  This Agreement may be executed in any number of counterparts, each of which shall be an original as against either Party whose signature appears thereon, but all of which taken together
        shall constitute but one and the same instrument. 

       

      14.12      Captions. The captions of this Agreement are solely for the convenience of reference and shall not affect its
        interpretation. 

       

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

       

      

      
        37

        
          

      

      
      14.14      Signatures.  For purposes of this Agreement, signatures sent by facsimile or PDF shall also constitute originals.

       

      IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized representatives of the Parties.

       

      	
              MERCK SHARP & DOHME CORP.

            	 	
              AMMONETT PHARMA LLC

            
	 	 	 

      	
              By:

            	 /s/ Iain Dukes

            	 	
              By:

            	 /s/ Kevin P Tully

            
	 	 	 	 	 

      	
              Title:

            	 Senior Vice President Licensing & External Scientific Affairs

            	 	
              Title:

            	 Chief Executive Officer

            

      	 	 	 	 	 
	
              Date:

            	 22 Oct. 2013

            	 	
              Date:

            	 23rd October 2013

            

       

       

      

    

  

  38Exhibit 10.7

    

    

    Certain identified information in this document has been excluded because it is both (i) not material and (ii) would likely cause competitive harm if publicly disclosed. [***] indicates where such
      information has been omitted.

  

  

  

  
    ASSET PURCHASE AGREEMENT

     

    THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of the 26th day of July, 2018 by and among Lumos Pharma, Inc., a Delaware corporation (“Purchaser”), and Ammonett Pharma LLC,
      a Delaware limited liability company (“Seller” or the “Company”), and each of the Key Individuals.

     

    RECITALS

     

    A.          Seller owns, holds, and/or has rights to certain assets relating to a product known as OratropeTM (the “Product”), which Seller is developing for the treatment of growth hormone
      deficiency.

     

    B.          Purchaser desires to purchase, and Seller desires to sell, substantially all of the assets of Seller relating to the Product, on the terms and subject to the conditions contained in this
      Agreement.

     

    C.          Purchaser desires to assume, and Seller desires to assign, certain liabilities of Seller relating to the Product, on the terms and subject to the conditions contained in this Agreement.

     

    D.         To induce Purchaser to enter into this Agreement, (i) each of the Key Individuals (as defined below) has entered into a consulting agreement with Purchaser or any of its Affiliates, and
      (ii) each of the Persons listed on Exhibit A hereto (each, a “Member” and collectively, the “Members”) has agreed to make the representations and warranties and be bound by the other obligations set forth in an acknowledgement,
      waiver and release in the form attached as Exhibit D hereto.

     

    E.          Capitalized terms used and not defined in this Agreement shall have the meaning ascribed to them on Annex I hereto.

     

    AGREEMENT

     

    NOW, THEREFORE, for and in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement and for other good and valuable consideration, the parties
      agree as follows:

     

    
      	
              ARTICLE 1.

            	
              PURCHASE OF ASSETS; ASSUMPTION OF SELECT LIABILITIES

            

    

     

    1.1         Assets.  Seller hereby sells, assigns, transfers, conveys and delivers to Purchaser, and Purchaser hereby
      purchases, acquires and accepts from Seller, all of Seller’s right, title, and interest in, to and under all of the assets, properties and rights of every kind and nature (other than the Excluded Assets, as defined below) that relate to, are used or
      held for use in connection with the research, development, registration, commercialization, or any other use or exploitation of the Product, including under the Merck License Agreement (the “Business”) (except those assets that are defined in
      Section 1.2 as Excluded Assets).  All of the Assets sold and purchased hereunder are collectively referred to as the “Assets” and individually referred to as an “Asset.” The Assets include, without limitation, all of the
      following:

     

    
      

      
        

    

    
    (a)         all raw materials or ingredients for, components of, works in progress of, firm orders for, inventory in transit of, and inventory of Product or the Business, including clinical supply,
      whether held by Seller, Merck or any Person on behalf of Seller (collectively, “Inventory”);

     

    (b)        all Intellectual Property that is related to the Product or the Business (the “Intellectual Property Assets”), including any patents and patent applications licensed to Seller under
      any Assigned Contracts as set forth on Schedule 1.1(b)(1) (the “Seller-Licensed Intellectual Property Assets”) and any patents and patent applications owned by Seller as set forth on Schedule 1.1(b)(2) (the “Seller-Owned
        Intellectual Property Assets”);

     

    (c)          all goodwill of the Seller associated with the Business;

     

    (d)         all Contracts set forth on Schedule 1.1(d) (the “Assigned Contracts”);

     

    (e)        all rights, remedies, defenses, claims, rights to offset, and causes of action against customers, suppliers, insurers or any other Person, whether known or unknown, relating to or arising
      from the Business, Assets or any Assumed Liability (as defined below), whether arising before, on or after the Closing Date, and all rights to enforce any assignment of, license to, or confidentiality covenant with respect to, any Intellectual
      Property Asset;

     

    (f)         all books and records of Seller that directly relate to the Business, including all clinical and preclinical reports, laboratory notebooks, copies of all supplier lists, marketing
      studies, consultant reports, physician databases, and correspondence with respect to the Product to the extent maintained by Sellers, all reports to and correspondence with any Regulatory Authority, exception reports and investigations,
      specifications for raw materials and Regulatory Authority communication thereon, including communication relating to manufacturing or packaging with any of Regulatory Authority (as defined in Section 4.13(a)), vendors, or suppliers and all
      complaint files and adverse event files with respect to the Product; and

     

    (g)         all permits, authorizations, approvals, clearances, registrations, certificates, or similar rights obtained or required to be obtained from any Governmental Entity in connection with the
      operation of the Business, including (i) approvals, clearances or registrations which have been received by the Sellers and their Affiliates, for the investigation, clinical testing, sale, distribution and/or marketing of Product, and any
      applications therefor (including any NDAs and INDs and including all Orphan Drug Designations) and (ii) all dossiers, reports, data and other written materials filed as part of such approvals, registrations, or applications, or maintained by the
      Sellers and their Affiliates and relating to such approvals or registrations ((i) and (ii) together, the “Product Registrations”).

     

    Seller has made a good faith attempt to list all of the Assets in the schedules provide in Section 1.1; provided, however, notwithstanding the foregoing, any failure to list an Asset thereon shall not mean that
      such item is not an Asset purchased by Purchaser hereunder. At the Closing, the Assets shall be directly conveyed, transferred, assigned and delivered by Seller to Purchaser, free and clear of all Encumbrances.

     

    
      

      2

      
        

    

    1.2         Excluded Assets.  Notwithstanding anything to the contrary herein, the Assets purchased hereunder shall
      not include, and Seller will retain all of its existing right, title and interest in and to, and there will be excluded from the sale, conveyance, transfer, assignment and delivery, (i) those assets set forth on Schedule 1.2, and (ii) all
      cash, accounts receivable, Tax Returns and related workpapers, and Tax refunds attributable to the Assets or the Business for all taxable periods (or portions thereof) ending on or prior to the Closing Date (collectively, the “Excluded Assets”),

      which Excluded Assets shall remain the property of Seller after Closing.

     

    1.3        Assumed Liabilities. Purchaser hereby assumes, and Seller hereby assigns to Purchaser, Seller’s obligations
      under the Assigned Contracts, but only to the extent that such obligations thereunder are required to be performed after the Closing Date and do not result from any failure to perform, improper performance, warranty or other breach, default or
      violation by Seller (the “Assumed Liabilities”).

     

    1.4         Retained Liabilities. Other than the Assumed Liabilities, Purchaser shall not assume and shall not be
      liable for, and Seller shall retain and, as between Purchaser and Seller, remain solely liable for and obligated to discharge, all liabilities and obligations of Seller, whether known or unknown, accrued or not accrued, fixed or contingent, and
      arising out of or resulting from the operation of the Business (each a “Retained Liability” and collectively, the “Retained Liabilities”), including but not limited to: (a) costs and expenses of Seller incurred or to be incurred by it
      in the negotiation and preparation of this Agreement and carrying out the transactions contemplated by this Agreement, including legal fees, (b) obligations, commitments or other liabilities of Seller (each a “Liability”) under any Contract of
      Seller other than the Assigned Contracts, (c) Liabilities relating to the operation of the Business on or before the Closing, (d) Liabilities arising out of or relating to any product liability, breach of warranty or similar claim for injury to
      person or property which resulted from the use or misuse of, or otherwise related to Product, used, manufactured, or sold before the Closing, (e) Seller’s liabilities for Taxes and all liabilities for Taxes attributable to the Assets or the Business
      for all taxable periods (or portions thereof) ending on or prior to the Closing Date, (f) litigation currently pending against Seller or, to the knowledge of Seller, currently threatened against Seller, (g) obligations, liabilities and commitments of
      Seller with respect to any employee or contractor of Seller or the Business, including for salary, wages, overtime, severance, benefits or other monetary obligations relating or owed to any of such employees or contractors, (h) obligations,
      commitments and liabilities arising from the Excluded Assets, and (i) other obligations, liabilities and commitments of Seller that are not an Assumed Liability.

     

    1.5       Consent of Third Parties.  Neither this Agreement nor the consummation of the transactions contemplated
      hereby shall be construed as an attempt or agreement to transfer or assign any Asset, the transfer or assignment of which would result in a violation of any applicable law or Contract if the consent of a third party is not obtained before such
      transfer or assignment (“Non-Assignable Assets”) unless and until such consent shall have been obtained. Seller shall use its commercially reasonable efforts, with which Purchaser shall cooperate, in endeavoring to obtain such consents. Until
      such consent is obtained, Seller shall cooperate with Purchaser in any lawful arrangement designed to provide Purchaser with the benefits of such Non-Assignable Assets at no cost to Purchaser in excess of the cost Purchaser would have incurred
      (without modification to the terms of any Contract that is an Non-Assignable Asset) if the consent had been obtained.

     

    
      

      3

      
        

    

    
      	
              ARTICLE 2.

            	
              PURCHASE, PAYMENT AND TAXES

            

    

     

    2.1         Purchase Price.  In consideration for the sale, transfer and assignment by Seller of the Assets and in
      consideration of the representations, warranties, covenants and indemnities of Seller set forth herein, Purchaser hereby agrees to deliver and pay to Seller or on Seller’s behalf an amount equal to:

     

    (a)          at Closing (as defined below) in accordance with the Funds Flow Memorandum (as defined below), a cash amount equal to $3,500,000 (the “Closing Payment”), minus amounts
      equal to,

     

    (i)    any Indebtedness of Seller or the Business that remains outstanding as of the Closing Date and is identified on Schedule 2.1(a)(i), which such Indebtedness shall be paid to the
      applicable creditor as set forth in the Funds Flow Memorandum; and

     

    (ii)   any Transaction Expenses that remain outstanding as of the Closing Date, which such Transaction Expenses shall be identified on Schedule 2.1(a)(ii) and shall be paid to the applicable
      recipient as set forth in the Funds Flow Memorandum; plus

     

    (b)          additional amounts up to and subject to the terms and conditions set forth on Exhibit B hereto (the “Subsequent Payments, the Subsequent Payments together with the Closing
      Payment, the “Total Purchase Price”).

     

    2.2         Purchase Price Allocation.  Purchaser shall provide to the Seller for its review and approval a schedule,
      which schedule shall be periodically updated as additional payments are made pursuant to Section 2.1(b) of this Agreement, which schedule shall allocate the sum of the purchase price for the Assets, the Assumed Liabilities and any other
      relevant items among the Assets for all purposes (including Tax and financial accounting purposes) in a manner consistent with the Assets’ respective fair market values (the “Allocation Schedule”).  Purchaser and Seller will use reasonable
      efforts to agree to the contents of each Allocation Schedule and upon such agreement shall be bound by the Allocation Schedule and act in accordance with the Allocation Schedule in all federal, state and local Tax Returns (including, without
      limitation, Form 8883).

     

    2.3        Taxes.  All transfer, documentary, sales, use, value added, duties, stamp and registration Taxes and all
      conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement, shall be borne half by Seller and half by
      Purchaser.  Purchaser and Seller agree, upon request, to use their respective reasonable best efforts to obtain any certificate or other document from any tax authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax
      that could be imposed (including with respect to the transactions contemplated hereby.

     

    
      

      4

      
        

    

    
      	
              ARTICLE 3.

            	
              MUTUAL REPRESENTATIONS AND WARRANTIES

            

    

     

    Each party hereby represents and warrants to the other party that the following representations and warranties as to such party are true, accurate and complete as of the date hereof:

     

    3.1         Organization and Good Standing.  Purchaser is a corporation duly incorporated and validly existing under
      the laws of the State of Delaware and Seller is a limited liability company duly organized and validly existing under the laws of the State of Delaware.  Each party has all requisite power and authority to execute and deliver and perform its
      obligations under this Agreement.

     

    3.2         Authorization.  The execution and delivery of this Agreement and performance by each party of its
      obligations hereunder, and all transactions contemplated hereby, have been duly and validly authorized by all necessary action on the part of such party.  This Agreement has been, and the other agreements and documents required to be delivered by
      each party in accordance with the provisions hereof will be, duly executed and delivered on behalf of each party; and this Agreement constitutes, and such agreements and documents when executed and delivered will constitute, the valid and binding
      obligations of such party, enforceable in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar laws from time to time in effect affecting creditor’s rights
      generally and by legal and equitable limitations on the availability of specific remedies.

     

    3.3        Conflicts with Other Agreements; Consents.  The execution and delivery by the parties of this Agreement and
      the performance by such party of its obligations hereunder will not conflict with or result in a breach of or constitute a default under any contract, license, indenture, loan agreement, restriction, lien, Encumbrance or other obligation or liability
      to which such party is or by which such party is affected or bound; nor is the effectiveness or enforceability of this Agreement or such other documents adversely affected by any provision of the organizational documents of Seller or Purchaser, as
      applicable.  No consent, approval or agreement of any person, party, court, government or entity is required to be obtained by either party hereto in connection with the execution, delivery or performance of this Agreement.

     

    3.4        Brokers and Finders.  There is no investment banker, broker, finder, financial advisor or other financial
      intermediary that has been retained by or is authorized to act on behalf of such party or any of its Affiliates that is entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

     

    
      	
              ARTICLE 4.

            	
              REPRESENTATIONS AND WARRANTIES OF SELLER AND KEY INDIVIDUALS

            

    

     

    Subject to such exceptions as are disclosed in the disclosure schedule dated as of the date hereof and delivered herewith by Seller to Purchaser (the “Disclosure Schedule”) corresponding to
      the applicable section and subsection or clause of this Article 4 (the “Applicable Article 4 Provision”) (or disclosed in any other section, subsection or clause of the Disclosure Schedule; provided that it is reasonably apparent on
      its face, upon a reading of the disclosure without any independent knowledge on the part of the reader regarding the matter disclosed, that such disclosure is responsive to the Applicable Article 4 Provision), Seller and, solely for the purposes of Section

        4.3 and Section 4.6(c), each Key Individual, hereby jointly and severally represent and warrant to Purchaser that the following representations and warranties are true, accurate and complete as of the date hereof:

     

    
      

      5

      
        

    

    4.1         Title to Assets; Subsidiaries.

     

    (a)          Seller has good and marketable title to all the Assets (other than the Assigned Contracts and the Seller-Licensed Intellectual Property Assets), free and clear of Encumbrances, other
      than Permitted Encumbrances.  Seller is not a party to, and the Assets are not subject to, any judgment, judicial order, writ, injunction or decree that affects the Assets or the use thereof by Seller, Purchaser or any of its Affiliates.

     

    (b)          Section 4.1(b) of the Disclosure Schedule sets forth a complete and correct list of any Seller’s Affiliates (the “Seller Affiliates”). Seller does not own, directly or
      indirectly, any shares of capital stock or equity interests in any Person.

     

    4.2         Sufficiency.  The Assets are sufficient, are in satisfactory condition and constitute all assets necessary
      to operate the Business in substantially the same manner as previously and currently conducted by Seller.

     

    4.3         Contracts.  Set forth on Section 4.3 of the Disclosure Schedule is a true, accurate and complete
      list, and Seller has delivered or made available to Purchaser true, accurate and complete copies, of each Assigned Contract, including the Merck License Agreement, to which Seller is a party to or bound by and any amendment, supplement and
      modification (whether oral or written) in respect of thereto.  There are no Contracts relating to the Business other than as disclosed to Purchaser and as set forth on Section 4.3 of the Disclosure Schedule.  Each Assigned Contract is in full
      force and effect and is valid and enforceable in accordance with its terms.  Seller is, and at all times has been, in compliance with all applicable terms and requirements of the Merck License Agreement.  Seller is, and at all times has been, in
      compliance in all material respects with all applicable terms and requirements of each other Assigned Contract.  Each other Person that has or had any obligation or liability under the Merck License Agreement is, and at all times has been, in
      compliance with all applicable terms and requirements of the Merck License Agreement. Each other Person that has or had any obligation or liability under any other Assigned Contract is, and at all times has been, in compliance in all material
      respects with all applicable terms and requirements of such Assigned Contract.  No event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in a breach of, or give Seller or
      other person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify, any Assigned Contract.  No event has occurred or circumstance exists under
      or by virtue of any Assigned Contract that (with or without notice or lapse of time) would cause the creation of any Encumbrance affecting any of the Assets.  Seller has not given to or received from any other Person, at any time, any notice or other
      communication (whether oral or written) regarding any actual, alleged, possible or potential violation or breach of, or default under, any Assigned Contract.  There are no renegotiations of, attempts to renegotiate or outstanding rights to
      renegotiate any material amounts paid or payable to Seller under current or completed Assigned Contracts and no such person has made written demand for such renegotiation.  Except with respect to the noncompetition provisions set forth herein, Seller
      is not a party to any noncompetition or nonsolicitation agreement with any other party.

     

    
      

      6

      
        

    

    4.4         Intellectual Property; Technology, Preservation of Confidential Information.

     

    (a)        The Seller is the sole legal and beneficial owner of the Seller-Owned Intellectual Property Assets, free and clear of any Encumbrances.  The consummation of the transactions contemplated
      by this Agreement will not result in the loss or impairment of, or otherwise adversely affect, any ownership rights of Purchaser in the Seller-Owned Intellectual Property Assets or any right of Purchaser to exploit the Seller-Owned Intellectual
      Property Assets.  The Seller has the sole right to file, prosecute and maintain all applications and registrations with respect to the Seller-Owned Intellectual Property Assets.  Seller has not conducted its Business or used or enforced (or failed to
      use or enforce) the Intellectual Property Assets in a manner that would reasonably be expected to result in the abandonment, cancellation or unenforceability of any of the Intellectual Property Assets, and Seller has not taken (or failed to take) any
      action that would reasonably be expected to result in the forfeiture or relinquishment of any of the Intellectual Property Assets.  Seller has not granted any license of or right to use, or authorized the retention of any rights in or joint ownership
      of, any Intellectual Property Assets.  Seller has not transferred, sold, assigned, exclusively licensed, dedicated to the public, licensed pursuant to an open source license or covenanted not to exercise rights under any Intellectual Property
      developed by or on behalf of the Seller or previously owned or claimed to be owned by the Seller, which was used in the Business.

     

    (b)         Section 4.4(b)(1) of the Disclosure Schedule contains a true, complete and accurate list of the following types of Intellectual Property Assets owned by Seller, both domestic and
      foreign, along with the jurisdiction in which each such item of Intellectual Property has been registered or filed and the applicable registration, application or serial number or similar identifier: all patents and pending patent applications, all
      trademark registrations and pending trademark registration applications; all copyright registrations and pending copyright registration applications; and all domain name registrations and pending domain name registrations (“Seller-Owned Registered
        Intellectual Property Assets”). All of the Seller-Owned Registered Intellectual Property Assets are solely and exclusively owned by the Seller. Except as set forth on Schedule 4.4(b)(1), Seller is not aware of any issues relating to the
      validity of and/or the enforceability of the Seller-Owned Registered Intellectual Property Assets.  Seller has taken all actions required to maintain the effectiveness of the Seller-Owned Registered Intellectual Property Assets. Seller has not
      received any notice of any pending or threatened action before any Governmental Entity challenging the use, ownership, or the validity, enforceability or registerability of any of the Seller-Owned Registered Intellectual Property Assets and Seller is
      not aware of any reasonable basis for any such challenge.

     

    Section 4.4(b)(2) of the Disclosure Schedule contains a true, complete and accurate list of the following types of Intellectual Property Assets licensed to Seller in the Assigned Contracts,
      both domestic and foreign, along with the jurisdiction in which each such item of Intellectual Property has been registered or filed and the applicable registration, application or serial number or similar identifier: all patents and pending patent
      applications, all trademark registrations and pending trademark registration applications; all copyright registrations and pending copyright registration applications; and all domain name registrations and pending domain name registrations (“Seller-Licensed

        Registered Intellectual Property Assets”). Seller has not received any notice of any pending or threatened action before any Governmental Entity challenging the use, ownership, or the validity, enforceability or registerability of any of the
      Seller-Licensed Registered Intellectual Property Assets and Seller is not aware of any reasonable basis for any such challenge.

     

    
      

      7

      
        

    

    (c)         Section 4.4(c) of the Disclosure Schedule contains a true, complete and accurate list of all unregistered trademarks, service marks, trade names, logos owned or used by Seller in
      the operation of the Business (“Unregistered Marks”).  Seller has all necessary rights in the Unregistered Marks and there are no circumstances which might prevent Purchaser from continuing to use such Unregistered Marks.  No Unregistered
      Marks or Seller-Owned Registered Intellectual Property Assets is alleged to be confusingly similar, to any trademark, logo, service mark, domain name or trade name owned, used or applied for by any third party in any jurisdiction in which the Seller
      uses such Unregistered Marks or Seller-Owned Registered Intellectual Property Assets.

     

    (d)         Section 4.4(d) of the Disclosure Schedule contains a true, complete and accurate list of all licenses, sublicenses and other agreements by or through which other Persons,
      including Seller’s Affiliates, that grant Seller exclusive or non-exclusive rights or interests in or to any Intellectual Property that is used in or necessary for the conduct of the Business as currently conducted (“Seller In-Licenses”). 
      Sellers have provided Purchaser with true and complete copies of all such Seller In-Licenses. All such Seller In-Licenses are valid, binding and enforceable between Seller and the other parties thereto, and Seller and such other parties are in full
      compliance with the terms and conditions of such Seller In-Licenses.

     

    (e)         Section 4.4(e) of the Disclosure Schedule contains a true, complete and accurate list of licenses, sublicenses and other agreements pursuant to which Seller grants rights or
      authority to any Person with respect to any Intellectual Property or Seller In-Licenses.  Seller has provided Purchaser with true and complete copies of all such agreements. All such agreements are valid, binding and enforceable between Seller and
      the other parties thereto, and Seller and such other parties are in full compliance with the terms and conditions of such agreements.

     

    (f)         The Seller-Owned Intellectual Property Assets conveyed to Purchaser pursuant to this Agreement and the Intellectual Property expressly licensed in valid Assigned Contracts assigned to
      Purchaser pursuant to this Agreement, constitute all the Intellectual Property used in or held for use in the Business and all the Intellectual Property necessary to the conduct the Business.  All Seller-Owned Intellectual Property Assets, and all
      Intellectual Property rights licensed pursuant to the Assigned Contracts, will be fully and validly transferred to Purchaser as part of the Assets.  After Closing, all Seller-Owned Intellectual Property Assets will be fully transferable and
      assignable by Purchaser, in each case without restriction and without payment of any kind to any third party.  Any Intellectual Property rights licensed to Seller and transferred to Purchaser as part of the Assets are not subject to any restrictions
      except as set forth in Seller In-Licenses identified on Section 4.4(d) of the Disclosure Schedule.

     

    
      

      8

      
        

    

    (g)        Neither the conduct of the Business as currently or formerly conducted nor the use of the Product or Assets (a) to the Knowledge of the Seller, infringes or misappropriates (or will
      infringe or misappropriate) any patent, copyright, trademark, trade secret or any other intellectual property of a third party, (b) to the Knowledge of the Seller, violates any right to privacy or publicity of any Person, or (c) to the Knowledge of
      the Seller, constitutes unfair competition or unfair trade practices under the laws of any jurisdiction where the Business is currently conducted.  Seller has no knowledge of any claims of such infringement, violation or unfair competition or unfair
      trade practices.  To the Seller’s knowledge, no Person is misappropriating, infringing, diluting (with respect to trademarks) or violating any Intellectual Property Assets.

     

    (h)        Seller has not disclosed any proprietary information embodying or related to the Assets including the Intellectual Property Assets other than to employees, consultants, professional
      advisors, licensees or distributors of Seller, and in each case, such disclosure has been pursuant to written agreements requiring the recipients to maintain the confidentiality of such information and appropriately restricting the use thereof.  To
      the Seller’s knowledge (i) there has been no misappropriation of any Intellectual Property Assets by any Person, (ii) no employee, independent contractor or agent of Seller has misappropriated any trade secrets or proprietary information of any other
      person or party in the course of performance as an employee, independent contractor or agent of the Seller, and (iii) no employee, independent contractor or agent of Seller is in default or breach of any term of any employment agreement,
      non-disclosure agreement, assignment of invention agreement or similar contract relating in any way to, or otherwise affecting, the Intellectual Property Assets or the Business.

     

    (i)         All current and former employees, officers, directors, consultants and contractors of the Seller who contribute or have contributed to the creation or development of any Intellectual
      Property Asset, or any other Intellectual Property used or held for use in the operation of the Business, have executed written instruments with the Seller assigning all rights, title and interest in and to any such contributions to the Seller.  No
      current or former employee, officer, director, consultant or independent contractor has any right, moral right, claim, right to receive payment or remuneration, or interest in or with respect to any such contributions, any Intellectual Property
      Asset.

     

    (j)         Since January 1, 2015 Seller has, in all material respects (i) complied at all times with all applicable privacy laws and regulations and contractual obligations regarding the collection,
      processing, disclosure and use of all data consisting of personally identifiable information that is, or is capable of being, associated with specific individuals; (ii) complied with Seller’s privacy policy substantially in the form provided to
      Purchaser or its counsel with respect to personally identifiable information; and (iii) taken all appropriate and industry standard measures to secure, protect and maintain the confidential nature of any personally identifiable information that
      Seller has collected or otherwise acquired.

     

    4.5         Inventory.  The items of Inventory of Seller are suitable, usable, and not expired, materially conform to
      generally accepted standards in the industry of which Seller is a part (including GMP), materially meet Seller’s current standards and specifications, and comply in all material respects with applicable laws.

     

    
      

      9

      
        

    

    4.6         Employees.

     

    (a)        Other than the Key Individuals, Seller does not employs or engages, nor in the past two-years has employed or engaged, any employee, consultant or contractor in connection with the
      operation of the Business Seller now and during the two-year period immediately preceding the date of this Agreement has been in compliance, in all material respects, with all applicable laws respecting employment, employment practices, labor, terms
      and conditions of employment, occupational health and safety, layoffs, plant closings or reductions in force, employee classification and wages and, including all contractual commitments and all such laws relating to wages, hours, collective
      bargaining, discrimination, civil rights, safety and health, and workers’ compensation.

     

    (b)         Seller has delivered or made available to Purchaser a true, complete and accurate list of all employees as of the date hereof and, to the extent such information may be shared consistent
      with applicable law, their names, titles, and current wages (salaries or hourly rates of pay), guaranteed bonuses and status as exempt or non-exempt.  Seller has delivered or made available to Purchaser a true, complete and accurate list of all
      independent contractors or consultants who are natural persons and have performed services for Seller or the Business in any given calendar year during the last three calendar years and for who, to the knowledge of Seller, Seller is the primary
      service recipient.  All Seller employees are at-will and each of them may terminate or be terminated from employment at any time with or without prior notice.  All Seller employees are subject to written employment agreements or written offer
      letters, which have been delivered or made available to Purchaser.

     

    (c)         Other than compensation and benefits due and payable in the ordinary course of business and consistent with past practices, Seller has paid all (and there are no outstanding) wages,
      salaries, bonuses, commissions, wage premiums and other compensation that has become due and payable to their employees (including the Key Individuals) or other service providers pursuant to applicable law or Contract.

     

    (d)        During the two-year period immediately preceding the date of this Agreement, Seller has conducted background checks of its employees or employee of the Business when required by applicable
      Assigned Contracts, including obtaining all required consent forms.  Seller’s use of information obtained from such background checks had been compliant in all material respects with all applicable law and background check reports and verifications
      have been maintained consistent in all material respects with all applicable law, including applicable privacy and data security laws.

     

    4.7         Litigation.  Except as set forth in Section 4.7 of the Disclosure Schedule, there is no, and at no
      time in the two-year period immediately preceding the date of this Agreement has been, (a) any Proceeding or investigation pending or, to the knowledge of Seller, threatened, against Seller or the Members with respect to the Assets, any intellectual
      property rights therein and thereto or the Business, (b) existing or threatened product liability, warranty or other similar claims related to the Business, or any facts upon which a material claim of such nature could be based, against Seller or the
      Members for products or services which are defective or fail to meet any product or service warranties.

     

    
      

      10

      
        

    

    4.8         Taxes.

     

    (a)         Seller is, and has been treated as, a partnership for United States federal income Tax purposes and state income Tax purposes at all times from the date on which Seller was organized.
      Seller has filed or caused to be filed all Tax Returns required to be filed by Seller under applicable laws, and such Tax Returns are true and correct in all respects.  Seller has made delivered or made available to Purchaser correct and complete
      copies of Seller’s United States federal and state income and franchise Tax Returns which have been filed since 2014.  Seller’s Tax Returns have not been audited by any taxing authority. The Company has not received written notice from any tax
      authority that the Company has not filed a Tax Return required to be filed, or that the Company has not paid Taxes required to be paid, by the Company.

     

    (b)          Seller has, within the time and in the manner prescribed by law, paid all Taxes that were due and payable by Seller (whether or not shown on any Tax Return).

     

    (c)        None of the Assets is a Tax Sharing Agreement, and none of the Assumed Liabilities includes any liability under a Tax Sharing Agreement or any obligation to pay any Tax obligations of, or
      with respect to any transaction relating to, any other Person or indemnify any other Person with respect to any Tax.

     

    (d)         There is no currently effective agreement, waiver or consent providing for an extension of time with respect to the assessment of any Taxes or the filing of any Tax Returns.

     

    (e)        There are no (i) currently effective powers of attorney granted by Seller concerning any Tax matter, (ii) agreements entered into by Seller with any taxing authority that would have a
      continuing effect on the Assets or the Business after the Closing or (iii) Encumbrances (and immediately following the Closing there will be no Encumbrances) on the Assets relating to or attributable to Taxes other than Encumbrances for Taxes not yet
      due and payable.

     

    (f)         There is no Proceeding, investigation, examination, audit, demand, notice of deficiency or assessment against Seller pending (or any threat of any of the foregoing that has been
      communicated to Seller) with respect to any Tax and no notice of such an audit or examination has been received by Seller and no written claim has ever been made by any taxing authority where Seller does not file Tax Returns that it may be subject to
      taxation in that jurisdiction.

     

    (g)         All Taxes required by applicable law to be withheld by Seller on or before the Closing have been or will be withheld and paid when due to the appropriate agency or authority.

     

    (h)         None of the Assets is an interest in any joint venture, partnership or other arrangement or contract which could be treated as a partnership for U.S. federal income tax purposes.

     

    4.9        Environmental Matters.  As of the date of this Agreement, there is no Proceeding or investigation pending
      or, to the knowledge of Seller, threatened, against Seller for alleged noncompliance with or liability under any environmental laws.  Seller has made available to Purchaser copies of all material environmental reports with respect to inspections
      conducted by or on behalf of Seller, to the extent such reports are in the possession or control of Seller, with respect to any real property currently owned or leased by Seller or used in connection with the operation of the Business.

     

    
      

      11

      
        

    

    4.10       Financial Statements. Section 4.10 of the Disclosure Schedule sets forth (i) the unaudited
      consolidated balance sheet of Seller as of December 31, 2017 (the “Most Recent Balance Sheet”), (ii) the unaudited consolidated balance sheet of Seller as of June 30, 2018 and (iii) the unaudited consolidated profit and loss statement of
      Seller for the fiscal year ended December 31, 2017 and for the six-month period ended on June 30, 2018 (collectively, the “Financial Statements”; and the date of the Most Recent Balance Sheet, the “Most Recent Balance Sheet Date”).  The
      Financial Statements have been prepared based on the books and records of the Seller, which, for the periods covered by the Financial Statements, have been maintained in accordance with United States generally accepted accounting principles applied
      on a consistent basis, and on that basis the Financial Statements present, to the knowledge of Seller, in all material respects, the financial position and results of operations of Seller as of the dates thereof and for the respective periods
      indicated.

     

    4.11       No Undisclosed Liabilities.  Seller has no liabilities, other than:

     

    (a)          liabilities provided for in the Financial Statements or the notes thereto;

     

    (b)          liabilities incurred in the ordinary course of business and consistent with past practices since the Most Recent Balance Sheet Date;

     

    (c)          liabilities set forth in Section 4.11 of the Disclosure Schedule;

     

    (d)          liabilities disclosed in, related to or arising under any Contract or other matter disclosed in this Agreement or set forth in the Disclosure Schedule;

     

    (e)          liabilities incurred in connection with this Agreement; and

     

    (f)          other liabilities that, individually or in the aggregate, would not reasonably be expected to be material to Seller or the Business, taken as a whole.

     

    4.12       Compliance with Laws.

     

    (a)         Seller is, and has been during the two-year period immediately preceding the date of this Agreement in compliance in all material respects with all applicable laws that apply to the
      Business (including all Healthcare Laws), and during such period has not received any notice of noncompliance of such laws.

     

    (b)          Seller is not subject to a corporate integrity agreement, deferred prosecution agreement, consent decree or settlement agreement with any Governmental Entity with respect to the conduct
      of the Business.

     

    (c)         All practices of Seller regarding the collection, access, maintenance, transmission, use, and disclosure of “Individually Identifiable Health Information” in connection with the conduct
      and operations of the Business are and have been in compliance in all material respects with HIPAA.

     

    
      

      12

      
        

    

    4.13       Regulatory Matters.

     

    (a)         Seller has operated and currently is in compliance in all material respects with all applicable statutes and implementing regulations administered or enforced by the United States Food
      and Drug Administration (“FDA”) or any similar Governmental Entity outside the United States (each, including the FDA, a “Regulatory Authority”).

     

    (b)        The Company holds, and is operating in compliance in all material respects with, such licenses, permits, authorizations, certificates, franchises, consents and other approvals from any
      governmental body relating to the Business which are required in order for Seller to operate the Business as presently conducted (collectively, the “Regulatory Permits”), and is in compliance in all material respects with all such Regulatory
      Permits.  The Seller has fulfilled and performed all of its material obligations with respect to the Regulatory Permits, and no event has occurred which allows, or after notice or lapse of time would allow, suspension, revocation or termination
      thereof or result in any other material impairment of the rights of the holder of any Regulatory Permit. All applications, notifications, product reports and submissions submitted in connection with any and all requests for a Regulatory Permit from
      any Regulatory Authority, were truthful and accurate in all material respects as of the date of submission and as of the date of the marketing authorization, and with respect to any marketing applications complete in all material respects as of the
      date of submission. To the knowledge of Seller, any necessary or required changes, modifications, updates, or corrections to such applications, notifications, and submissions have been submitted to any Regulatory Authority.

     

    (c)         All of Seller’s products that are subject to the jurisdiction of a Regulatory Authority are being, and have been, designed, manufactured, imported, exported, processed, developed,
      labeled, stored, tested, marketed, promoted and distributed by or, on behalf of Seller in compliance in all material respects with all applicable requirements under any Regulatory Permit or law, including applicable statutes and implementing
      regulations administered or enforced by the Regulatory Authority.

     

    (d)         All preclinical studies and clinical trials conducted by or, to the knowledge of Seller, on behalf of Seller have been, and if still pending are being, conducted in compliance in all
      material respects with the research protocols applicable to each such study or test and all applicable law, including the United States Federal Food, Drug, and Cosmetic Act, its applicable implementing regulations at 21 C.F.R. Parts 50, 54, 56, 58,
      812 and applicable good clinical practices or good laboratory practices, and 21 C.F.R. Parts 1000 through 1050.  No clinical trial conducted by or, to the knowledge of Seller, on behalf of Seller has been terminated or suspended prior to completion,
      and no Regulatory Authority, or institutional review board or ethics committee, that has or has had jurisdiction over a clinical trial conducted by or on behalf of Seller has commenced, or to the knowledge of Seller, threatened to commence, any
      Proceeding investigation, audit, demand, or assessment to place a clinical hold order on, or otherwise terminate or suspend, any proposed or ongoing clinical investigation conducted or proposed to be conducted by or on behalf of Seller. No clinical
      trial conducted by or, to the knowledge of Seller, on behalf of Seller, has utilized the services of a clinical investigator or any other Person that was then or later became debarred or disqualified by a Regulatory Authority (including debarment
      under the Generic Drug Enforcement Act of 1992, 21 U.S. C. §§335a-335c).

     

    
      

      13

      
        

    

    (e)        Seller has not had any product or manufacturing site subject to a Governmental Entity shutdown or import or export prohibition, nor received any written notice of inspectional observations
      from a Regulatory Authority, “warning letters,” “untitled letters” or requests or requirements to make changes to the products or any of Seller’s manufacturing processes or procedures, or similar written correspondence or notice from a Regulatory
      Authority in respect of the Business or Seller, as applicable, and alleging or asserting noncompliance with any applicable law, Regulatory Permit or such requests or requirements of a Regulatory Authority.  To the knowledge of Seller, no contract
      manufacturer of Seller has had any manufacturing site subject to a Governmental Entity (including FDA or other Regulatory Authority) shutdown, or received any correspondence or notice from the any Regulatory Authority or any other Governmental
      Entity, alleging or asserting noncompliance with any applicable law, Regulatory Permit or requirements of a Governmental Entity for problems that could affect products manufactured by or on behalf of Seller.

     

    (f)         There are not and have not been any (i) recalls, field notifications, corrections, product replacements, warnings, “dear doctor” letters, investigator notices, safety alerts, reports of
      accidental radiation occurrences, notifications of defect or failure to comply under 21 C.F.R. Part 1003 or other notice of any Proceeding investigation, audit, demand, or assessment relating to an alleged lack of safety or regulatory compliance of
      the products issued by Seller (“Safety Notices”) or (ii) material product complaints with respect to the medical device products.  To the knowledge of Seller, there are no facts that would be reasonably likely to result in (A) a material
      Safety Notice with respect to the medical device products, (B) a material change in the labeling of any of the medical device products due to a safety or performance issue, or (C) a termination or suspension of developing and testing of any of the
      medical device products due to safety or performance issues.  All adverse events occurring within or outside the United States have been submitted to the applicable Regulatory Authority in accordance with applicable law.

     

    4.14       Transaction with Affiliates. Other than as set forth in Section 4.14 of the Disclosure Schedule,
      none of the Members, managers or officers of Seller: (a) own directly or indirectly any interest in, or serve as an officer or director of, any client, competitor, vendor or supplier of the Business; (b) have any loans or receivables outstanding to
      Seller; (c) are otherwise indebted to Seller with respect to the Business; (d) own any property, real or personal, tangible or intangible, required for or used in the Business; or (e) are owed any money or property by Seller, other than wages or
      salary earned (or expenses reimbursements owed) in the ordinary course of business.

     

    4.15      Anti-Bribery. During the past two years, Seller has, and, to the knowledge of Seller, no representative of
      Seller has, (i) offered, made, paid or received any unlawful bribes, kickbacks or other similar payments to or from any Person (including any customer or supplier) or Governmental Entity, (ii) made or paid any contribution, directly or indirectly, to
      a domestic or foreign political party or candidate or (iii) made or paid any improper foreign payment (as defined in the Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1 et seq.)), in each case ((i) through (iii)), in material violation of the
      Foreign Corrupt Practices Act or any other applicable anti-corruption Law.

     

    
      

      14

      
        

    

    4.16       Insurance. Seller has delivered or made available to Purchaser, a complete and correct list of each
      insurance policy (including the name of the carrier, the coverage limits and premium amounts) currently maintained in favor of Seller or the Business with a non-captive third party insurer (the “Insurance Policies”).  Each of the Insurance
      Policies is in full force and effect.  All premiums due and payable under the Insurance Policies have been paid on a timely basis and Seller is in compliance in all material respects with all its obligations under the Insurance Policies.  As of the
      date of this Agreement, Seller has not received any written notice of cancellation, avoidance, rescission or material change in coverage with respect to any Insurance Policy.  There are no material pending claims notified or asserted by Seller as to
      which any insurer under an Insurance Policy has denied coverage in whole or in part, or has reserved its rights to deny coverage in whole or in part.

     

    
      	
              ARTICLE 5.

            	
              CLOSING

            

    

     

    5.1         Closing and Closing Deliverables.  The closing of the transactions contemplated hereby shall take place
      upon the execution of this Agreement (the “Closing” and the date on which the Closing takes place the “Closing Date”).

     

    5.2         Seller Closing Deliverables.  Concurrently with this Agreement, Seller shall deliver to Purchaser:

     

    (a)          a Bill of Sale evidencing conveyance from Seller to Purchaser of the tangible personal property included in the Assets, in the form attached as Exhibit C hereto, duly executed by
      Seller;

     

    (b)          an Assignment and Assumption Agreement effecting the assignment to and assumption by Purchaser of the Assigned Contracts, in the form attached as Exhibit E hereto, duly executed
      by Seller;

     

    (c)          assignments transferring to Purchaser all of Seller’s right, title and interest in and to the Intellectual Property Assets, in the forms attached as Exhibit F, duly executed by
      Seller;

     

    (d)          any and all other documents necessary or desirable for the transfer to Purchaser and proper recordation of ownership of the Assets, in form and substance satisfactory to Purchaser, each
      as duly executed by Seller;

     

    (e)          consulting agreements, duly executed by each of the Key Individuals, effective as of the Closing Date;

     

    (f)          an acknowledgment, waiver and release, as executed by:

     

    (i)    each Member and holder of any convertible securities listed on Schedule 5.2(f)(i), in the form attached as Exhibit D hereto;

     

    (ii)   the Persons identified on Schedule 5.2(f)(ii) confirming that, upon payment of no more than the amount specified next to such Person’s name on Schedule 5.2(f)(ii), no amounts
      will be due or owing to such Person by the Seller, and related releases of claims by such Persons, in each case, in a form satisfactory to Purchaser;

     

    
      

      15

      
        

    

    (g)          evidence satisfactory to Purchaser of the release by any Person who held a security interest in the Assets of all Encumbrances on the Assets;

     

    (h)        duly executed consents, in form and substance satisfactory to Purchaser, of all Governmental Entities and other Persons that are required (i) for the consummation of the transactions
      contemplated by this Agreement or (ii) in order to prevent a breach of, or a default under or a termination of any Assigned Contract;

     

    (i)          a certificate of the Secretary of State of the state of Delaware, dated as of a recent date, as to the due formation and good standing of the Seller and listing all documents of the
      Seller on file with said Secretary;

     

    (j)          a certificate of the Secretary of the Seller, dated as of the Closing Date and certifying on behalf of Seller: (A) that attached thereto is a true, correct and complete copy of each of
      the organizational documents of Seller, as in effect on the date of such certification; and (B) that attached thereto is a true, correct and complete copy of all resolutions adopted by the Seller’s managers and Members authorizing the execution,
      delivery and performance of the sale, transfer and delivery of the Assets, this Agreement and the transactions contemplated hereby and that all such resolutions are still in full force and effect;

     

    (k)         the letter from Merck acknowledging the assignment by Seller to Purchaser of the Merck License Agreement; and

     

    (l)          such other Closing documents as Purchaser may reasonably require.

     

    5.3         Purchaser Closing Deliverables.  Concurrently with this Agreement, Purchaser shall deliver to Seller:

     

    (a)          the Closing Payment, in accordance with the terms of Section 2.1 and the funds flow memorandum (the “Funds Flow Memorandum”) delivered by Seller to Purchaser prior to the
      Closing Date;

     

    (b)          an Assignment and Assumption Agreement regarding the Assumed Liabilities of Seller, attached as Exhibit E hereto, duly executed by Purchaser; and

     

    (c)          such other Closing documents as Purchaser may reasonably require.

     

    
      	
              ARTICLE 6.

            	
              COVENANTS

            

    

     

    6.1        Further Assurances.  Upon the request of either party hereto, the other party will execute and deliver to
      the requesting party, or such party’s nominee, all such instruments and documents of further assurance or otherwise, and will do any and all such acts and things as may reasonably be required to carry out the obligations of such party hereunder and
      to more effectively consummate the transactions contemplated hereby, including obtaining all consents and approvals from third parties as may be necessary.

     

    
      

      16

      
        

    

    6.2       Confidentiality.  Seller agrees not to use or disclose to others, or permit the use or disclosure of, any
      and all Confidential Information (as defined herein) of Seller nor any Confidential Information of Purchaser that may have been furnished to Seller (including Confidential Information transmitted by each to representatives, accountants, counsel or
      advisors) in the course of negotiations relating to this Agreement and the business and financial reviews and investigations conducted pursuant hereto; provided, however, that Seller may disclose Confidential Information if, and to the extent that,
      such disclosure is required by any applicable law, subpoena, court order, regulation, or judicial or administrative process, provided that, to the extent practicable and permitted by applicable law or regulation, Seller will provide notice of such
      requirement to Purchaser for the purpose of enabling Purchaser to seek a protective order or otherwise prevent such disclosure. “Confidential Information” means information of Purchaser or Seller that is confidential and proprietary to
      Purchaser or Seller and not generally available to the public.  Notwithstanding anything to the contrary, “Confidential Information” does not include information that (a) is or becomes generally available to the public other than as a result
      of a breach of this Agreement by Seller or any Member, (b) was available to Seller or Members on a non-confidential basis prior to its disclosure by Purchaser or Seller and (c) becomes available to Seller on a non-confidential basis from another
      source, provided that such other source is not known by Seller to be bound by, and to Seller’s knowledge such disclosure does not breach, directly or indirectly, a confidentiality agreement between such other source and Purchaser.

     

    6.3         Non-Interference.  From and after the date of this Agreement and for a period of three (3) years from and
      after the Closing (the “Non-Interference Term”) neither Seller nor any Key Individual will, anywhere in world, directly or indirectly:

     

    (a)         solicit for employment, recruit or hire, either as an employee or a consultant or independent contractor, any employee, consultant or independent contractor of Purchaser, Seller or any of
      their respective Affiliates who was an employee, consultant or independent contractor of Purchaser, Seller or any of their respective Affiliates (collectively, “Purchaser Entities”) at any time prior to the end of the Non-Interference Term;

     

    (b)         interfere or attempt to interfere with any transaction, agreement, prospective agreement, business opportunity or business relationship in which any Purchaser Entity was involved, to the
      Knowledge of the Seller, at any time prior to the end of the Non-Interference Term; or

     

    (c)          otherwise engage or participate in any effort or act to induce any person to discontinue a relationship with any Purchaser Entity.

     

    6.4        Non-Disparagement. From and after the date of this Agreement, no Key Individual shall, and each Key
      Individual agrees that it shall not, make or cause to be made or condone the making of any statement, comment or other communication, written or otherwise, that
        constitutes disparagement or criticism of, or otherwise be considered to be derogatory or detrimental to, or otherwise reflect materially adversely on, materially harm the reputation of, any Purchaser Entity or any of their respective
      owners, directors, officers, employees, agents or Affiliates or any of the products or services of any Purchaser Entity.

     

    6.5        Purchaser’s Efforts.  From and after Closing, Purchaser shall use Commercially Reasonable Efforts to
      develop Product towards Marketing Authorization in the United States, Japan or the European Union for at least one indication and to commercialize such Product in the applicable territory following receipt of Marketing Authorization therein. Seller
      acknowledges that development activities toward Marketing Authorization for various countries may be conducted, in Purchaser’s reasonable discretion, sequentially rather than simultaneously. Except as expressly provided in this Agreement, there shall
      be no obligations of development, commercialization or other diligence, either implied or construed, upon Purchaser.

     

    
      

      17

      
        

    

    6.6        Audit Rights. Purchaser shall make available, or cause to be made
        available to Seller, upon Seller’s reasonable advance notice (but not less than three (3) business days’ notice), during normal business hours and to the extent that doing so does not materially disrupt or interfere with the operations of
      Purchaser or the Business, Purchaser’s records that are reasonably necessary to allow Seller to verify Purchaser’s compliance with its payments obligations to Seller of the Subsequent Payments.  All information
        disclosed pursuant to this Section 6.6 shall be treated as Confidential Information and shall not be disclosed to any third party or used for any purpose
        other than for the calculation of payments to be made to Seller and to determine Purchaser’s compliance with the terms and conditions of this Agreement.  Subject to this Section 6.6, the right to audit set forth herein shall include the right to interview personnel and review records as reasonably determined by the Seller, including sales analysis reports, accounting general ledgers, sublicense
        and distributor agreements, price lists, marketing materials, catalogs, audited financial statements, income tax returns, sales tax returns, inventory records, purchase records, and shipping documents, solely to the extent such records or access to
        such personnel is reasonably necessary to allow Seller to verify Purchaser’s compliance with its payments obligations to Seller of the Subsequent Payments.

     

    
      	
              ARTICLE 7.

            	
              INDEMNIFICATION

            

    

     

    7.1         Indemnification by Seller and Purchaser; Limitations.

     

    (a)         From and after the Closing, Seller shall indemnify, defend and hold Purchaser, its Affiliates, and their respective directors, officers, representatives, employees and agents
      (collectively, the “Purchaser Indemnified Parties”) harmless from and against any and all liability, loss, cost, expense, claim, lien or other damage, including, without limitation, reasonable attorneys’ fees and expenses (all of the foregoing
      items for purposes of this Agreement are referred to as “Damages”), that may be incurred by Purchaser resulting or arising from or related to, or incurred in connection with: (i) the failure of Seller to assume, pay, perform and discharge any
      Retained Liability, (ii) any breach of any representation or warranty of Seller contained in this Agreement, (iii) any breach of any covenant, obligation or agreement of Seller contained in this Agreement, (iv) the liquidation and dissolution of
      Seller, including without limitation, any Damages incurred by Purchaser resulting from Seller’s preferential payment of any liability or obligation prior to Seller’s dissolution, or (v) any inaccuracy of the Funds Flow Memorandum.

     

    (b)        From and after the Closing, Purchaser shall indemnify, defend and hold Seller, its Affiliates, and their respective managers, officers, representatives, employees and agents (collectively,
      the “Seller Indemnified Parties”) harmless from and against any and all Damages, that may be incurred by Seller resulting or arising from or related to, or incurred in connection with: (i) any breach of any representation, or warranty of
      Purchaser contained in this Agreement, (ii) any breach of any covenant, obligation or agreement of Purchaser contained in this Agreement, (iii) any Assumed Liability, or (iv) Liabilities arising out of or relating to any product liability, breach of
      warranty or similar claim for injury to person or property which resulted from the use or misuse of, or otherwise related to Product, used, manufactured, and sold/licensed after the Closing.

     

    
      

      18

      
        

    

    (c)          Limitations:

     

    (i)   Other than with respect to the representations and warranties contained in Section 3.1 (Organization and Power), Section 3.2 (Authorization), 3.4 (Brokers and Finders), Section 4.1 (Title to
      Assets; Subsidiaries), and 4.8 (Taxes) (the “Excluded Representations”), neither Seller nor Purchaser shall have any liability under Section 7.1(a)(ii) and Section 7.1(b)(i), respectively, to indemnify any Purchaser Indemnified
      Party or Seller Indemnified Party, as applicable, for Damages until the aggregate amount of Damages exceeds Fifty Thousand and 00/100 ($50,000.00) Dollars (the “Threshold”), in which event the indemnifying party shall become liable only for
      amounts in excess of the Threshold.

     

    (ii)   Other than with respect to the Excluded Representations and the representations provided under Section 4.3, the aggregate indemnification obligation of Seller under Section
        7.1(a)(ii) and of Purchaser under Section 7.1(b)(i), respectively, for Damages will not exceed the sum of (i) twenty percent (20%) of the Closing Payment, and (ii) twenty percent (20%) of the Subsequent Payments actually received by the
      Seller.

     

    (iii)  Subject to Section 7.1(c)(i)-(ii), notwithstanding anything in this Agreement to the contrary, absent Fraud, in no event will either Seller or Purchaser be required to repay any
      amount for Damages incurred under this Section 7.1 (including Damages arising out of the breach of any representation or warranty including an Excluded Representation) in excess of the Total Purchase Price actually paid to Seller pursuant to
      this Agreement. Seller’s and Purchaser’s obligation to indemnify and hold harmless the Purchaser Indemnified Parties or the Seller Indemnified Parties pursuant to this Section 7.1 shall survive until Seller is entitled to receive any
      Subsequent Payments under this Agreement.

     

    (iv)  The amount of any Damages of any Person subject to indemnification under this ARTICLE 7 shall be reduced by the amount, if any, received by the
      indemnified party from any third Person (including, without limitation, any insurance company or other insurance provider (such amount being referred to herein as a “Third Party Reimbursement”)), in respect of the Damages suffered thereby;
      provided, however, that nothing in this Section 7.1(c)(iv) shall be interpreted or construed as an obligation of any indemnified party hereunder to seek relief or indemnification from any third Person.  If, after receipt by an indemnified
      party of any indemnification payment hereunder, such Person receives or becomes entitled to receive a Third Party Reimbursement in respect of the same Damages for which indemnification was made and such Third Party Reimbursement was not taken into
      account in assessing the amount of indemnification, then the indemnified party shall turn over all of such Third Party Reimbursement to the indemnifying party up to the amount of the indemnification paid pursuant hereto.

     

    (v)   Any indemnified party that becomes aware of Damages for which it seeks indemnification under this ARTICLE 7 shall be required to use reasonable efforts
      to mitigate the Damages including taking any actions reasonably requested by the indemnifying party, and an indemnifying party shall not be liable for any Damages to the extent that it is attributable to the indemnified party’s failure to mitigate.

     

    
      

      19

      
        

    

    (vi)  No party hereto shall be liable under this ARTICLE 7 for any incidental and consequential damages or special, punitive, exemplary or other similar
      damages other than (i)  such damages that are shown be either (1) losses that would arise would be reasonably expected to arise as the result of a breach of any similar promise or undertaking or (2) losses
        reasonably foreseeable as a probable consequence of a breach of that promise or undertaking, and (ii) punitive and exemplary damages arising from a Third Party Claim (as defined below).

     

    (vii) No party shall have any liability for any Damages which would not have arisen but for any alteration or repeal or enactment of any law after the Closing.

     

    (viii) For purposes of this ARTICLE 7 and notwithstanding anything to the contrary in this Agreement, all determinations of Damages in connection herewith
      shall be determined without regard to any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

     

    7.2         Procedures for Indemnification.

     

    (a)         If any indemnified party receives notice of the assertion of any claim, the commencement of any Proceeding, or the imposition of any penalty or assessment by a third party in respect of
      which indemnity may be sought hereunder (a “Third Party Claim”), and the indemnified party intends to seek indemnity hereunder, then the indemnified party shall provide the indemnifying party with prompt written notice of the Third Party
      Claim.  The failure by an indemnified party to notify an indemnifying party of a Third Party Claim shall not relieve the indemnifying party of any indemnification responsibility under this ARTICLE 7, unless
      the indemnifying party can prove that the failure materially prejudiced the ability of the indemnifying party to defend such Third Party Claim.

     

    (b)         The indemnified party shall have the right to control the defense or settlement of such Third Party Claim with counsel of its choosing; provided, however, that the
      indemnified party shall not settle or compromise any Third Party Claim without the indemnifying party’s prior written consent, unless the terms of such settlement or compromise release the indemnified party or the indemnifying party from any and all
      liability with respect to the Third Party Claim.  The indemnifying party shall be entitled (at the indemnifying party’s expense) to participate in (but not control) the defense of any Third Party Claim with its own counsel.

     

    (c)        In the event the indemnified party elects not to defend the Third Party Claim, then the indemnifying party may defend such claim at indemnifying party’s sole cost and expense with counsel
      selected by the indemnifying party, such counsel to be reasonably acceptable to the indemnified party.  In such event, the indemnifying party shall not settle or compromise any Third Party Claim without the indemnified party’s prior written consent,
      unless the terms of such settlement or compromise release the indemnified party from any and all liability with respect to the Third Party Claim.

     

    
      

      20

      
        

    

    (d)         Notwithstanding the foregoing, in the event of a Third Party Claim by which a claim for indemnification is made against Seller pursuant to Section 7.1(a)(iii), Seller shall have
      the right to control the defense or settlement of such Third Party Claim with counsel of its choosing; provided, however, that Seller shall not settle or compromise any Third Party Claim without Purchaser’s prior written consent,
      unless the terms of such settlement or compromise release Purchaser and its Affiliates from any and all liability with respect to the Third Party Claim.  The indemnifying party shall be entitled (at the indemnifying party’s expense) to participate in
      (but not control) the defense of any Third Party Claim described in this Section 7.2(d) with its own counsel.

     

    (e)         Any indemnifiable claim hereunder that is not a Third Party Claim shall be asserted by the indemnified party by promptly delivering notice thereof (the “Claim Notice”) to the
      indemnifying party.  If the indemnifying party: (i) agrees with the indemnified party with respect to such claim, a memorandum setting forth such agreement shall be prepared and signed by both parties or (ii) disputes the existence or the amount of
      such claim, the indemnifying party shall notify the indemnified party in writing (with reasonable specificity) within twenty (20) days following the indemnifying party’s receipt of the Claim Notice (the “Response Notice”) and the parties will
      negotiate in good faith to resolve such claim for up to thirty (30) days or such other period of time as the parties mutually agree.  If the parties should then so agree with respect to such claim, a memorandum setting forth such agreement shall be
      prepared and signed by both parties.  If no Response Notice is received by the indemnified party within twenty (20) days after the indemnifying party’s receipt of the Claim Notice, the matter shall be deemed undisputed and the indemnifying party
      shall indemnify the indemnified party for the Damages.  If the parties are unable to agree within the thirty (30) day negotiation period specified herein, either party can submit such matter for dispute resolution pursuant to Section 8.4.

     

    7.3         Set-off. Subject to Section 7.2(e) and this Section 7.3, in addition to any and all other
      remedies hereunder or at law or in equity, Purchaser shall be entitled to recover any indemnification payment or other undisputed amounts due from Seller hereunder by retaining and setting off such payment or other amounts (whether or not such
      payment or amounts are liquidated or reduced to judgment) against the amounts representing the Subsequent Payments; provided, however, that Purchaser will not exercise any set-off rights:  without providing advance
        written notice thereof to the Seller (a “Proposed Set-off Notice”), setting forth in reasonable detail the material facts providing a basis for such set-off
        as well as the amount proposed to be set-off. In the event that Seller and Purchaser cannot agree in writing with respect to a claim described in a Claim Notice pursuant to Section 7.2(e) or described in the Proposed Set-off Notice,
      Purchaser shall deposit such disputed amount in escrow with a mutually agreed-upon financial institution as escrow agent within 30 days following the end of the 30-day negotiation period set forth in Section 7.2(e), where such amount shall be
      held until the underlying dispute is resolved pursuant to the terms of this Agreement, after which the set-off provisions of this paragraph shall apply to such portion of the Subsequent Payments deposited in escrow.  All costs and expenses of such
      escrow account shall be paid one half by Seller and one half by Purchaser. Notwithstanding the foregoing, (i) Purchaser shall only be obligated to deposit in escrow any portion of amounts payable to Seller which has been otherwise withheld by
      Purchaser pursuant to this Section 7.3, once such withheld amount exceeds $500,000, and (ii) the escrow agreement to be entered into by the parties and the escrow agent pursuant to this Section 7.3 shall set forth that any release of
      amounts held in escrow shall only be made pursuant to a joint written instruction signed by Seller and Purchaser.

     

    
      

      21

      
        

    

    7.4         No Subrogation. Following the Closing, Seller shall not have any right of indemnification, contribution or
      subrogation against any indemnified party with respect to any indemnification payment made by or on behalf of the Seller under Section 7.1.

     

    7.5        Exclusive Remedy.  Subject to Section 8.4(d), each party hereto agrees that indemnification under this ARTICLE 7 shall be its sole and exclusive remedy solely with respect to any breach of this Agreement or any of the documents executed in connection with the Closing, other than claims for Fraud.  In furtherance of
      the foregoing, each party hereto hereby waives, to the extent it may do so, any other rights or remedies that may arise at law or in equity, including under any applicable law.

     

    
      	
              ARTICLE 8.

            	
              MISCELLANEOUS PROVISIONS

            

    

     

    8.1        Announcements.  No party shall issue any press release or make any public announcement relating to the
      subject matter of this Agreement without the prior written approval of the other party; provided, however, that after the Closing Purchaser may make (i) appropriate announcements to customers of the Business or (ii) any public disclosure it believes
      in good faith is required by applicable law.

     

    8.2         Expenses.  Each of the parties shall pay its own respective costs and expenses incurred or to be incurred
      by it in the negotiation and preparation of this Agreement and carrying out the transactions contemplated by this Agreement, including legal fees.

     

    8.3         Assignment.  The rights and obligations of the parties to this Agreement or any interest in this Agreement
      shall not be assigned, transferred, hypothecated, pledged or otherwise disposed of without the prior written consent of the nonassigning party which consent may be withheld in such party’s sole discretion.

     

    8.4         Applicable Law; Dispute Resolution; Waiver of Jury Trial. 

     

    (a)          The terms, conditions and other provisions of this Agreement and any documents or instruments delivered in connection with it shall be governed and construed according to the internal
      laws of the State of Delaware.

     

    (b)         Each party irrevocably agrees that any Proceeding against it arising out of or in connection with this Agreement or the transactions contemplated by this Agreement or disputes relating
      hereto (whether for breach of contract, tortious conduct or otherwise) shall (subject to Section 8.4(d)) be brought exclusively in the Court of Chancery of the State of Delaware or, solely if such court lacks subject matter jurisdiction, the
      United States District Court for the District of Delaware, and the appellate courts having jurisdiction thereover (collectively, the “Chosen Courts”), and hereby irrevocably accepts and submits to the exclusive jurisdiction and venue of the
      Chosen Courts in personam with respect to any such Proceeding and waives to the fullest extent permitted by Law any objection that it may now or hereafter have that
      any such Proceeding has been brought in an inconvenient forum

     

    
      

      22

      
        

    

    (c)         EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
      UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO.  EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
      OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
      THIS SECTION 8.4(C).

     

    (d)         The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their
      obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions.  The parties acknowledge and agree that (a) each party shall be entitled to an injunction or injunctions, specific
      performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction without proof of damages or otherwise, this being in addition to any other
      remedy to which it is entitled under this Agreement and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without that right, neither Seller nor Purchaser would have entered into this
      Agreement.  The parties acknowledge and agree that a party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 8.4(d) shall

      not be required to provide any bond or other security in connection with any such order or injunction.

     

    8.5         Headings; Counterparts.  The section headings appearing in this Agreement are inserted only as a matter
      of convenience and in no way define, limit, construe or describe the scope or extent of such Section or in any way affect such Section.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of
      which together shall constitute one and the same instrument.

     

    8.6        Entire Agreement; Amendment.  This Agreement, together with all Exhibits hereto, constitutes the entire
      agreement among the parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written, of the parties, and there are no representations,
      warranties or other agreements among the parties in connection with the subject matter hereof except as set forth specifically herein or contemplated hereby.  This Agreement may not be amended nor provisions waived except for by written instrument
      signed by the Purchaser and the Seller.

     

    [signature page to follow]

     

    

    
      

      23

      
        

    

    IN WITNESS WHEREOF, the authorized representative of the parties to this Agreement have duly executed this Agreement effective as of the date first above
      written.

     

    	
            Purchaser:

          	 	
            Seller:

          	 
	

          	 	

          	 
	
            Lumos Pharma, Inc.

          	 	
            Ammonett Pharma LLC

          	 
	

          	 	

          	 
	
            By:

            

          	 /s/ Richard J. Hawkins

          	 	
            By:

            

          	 /s/ Kevin Tully

          	 
	
            Name: Richard J. Hawkins

          	   

          	
            Name: Kevin Tully

          	 
	
            Title: Chief Executive Officer

            

          	 	
            Title: Chief Executive Officer

            

          	 
	

          	 	

          	 
	
            Address: 4200 Marathon Blvd., Ste 200

            

          	 	
            Address: 3606 Salles Ridges Court

            

          	 
	
            
              
                
                  
                     Austin, Texas 78756

                    

                  

                

              

            

          	 	
            
              
                
                   Midlothian, VA 23113

                

              

            

          	 
	 	 	 	 
	

          	 	
            Key Individuals:

          	 
	 	 	 	 
	

          	 	 /s/ Michael Thorner	 
	 	 	
            Michael Thorner

          	 
	 	 	 	 
	 	 	 /s/ Roy Smith 	 
	 	 	
            Roy Smith

          	 
	 	 	 	 
	 	 	 /s/ Kevin Tully 	 
	 	 	
            Kevin Tully

          	 

    
       

      

      Signature Page to Asset Purchase Agreement

       
        
          

          
            

        

      

    

    Annex I

     

    DEFINED TERMS

     

    For the purposes of this Agreement:

     

    
      
        
          
            	 	
                    a)

                  	
                    “Affiliate” of a Person means any affiliate, as defined in Rule 12b-2 under the Exchange Act.

                  

          

        

      

    

     

    
      
        	

              	b)	
                “Commercially Reasonable Efforts” means the efforts and resources, consistent with the normal business practices of the Purchaser, used for the development of products owned by it or to which it has exclusive rights, which
                  products are at a similar stage in their development or product life and are of similar market potential as the Product (collectively, “Similarly Situated Products”), taking into account efficacy, safety, regulatory authority
                  approved labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, ability to finance the project, medical and clinical considerations, the likelihood of regulatory
                  approval given the regulatory structure involved, the profitability of the product, including the royalties payable to licensors of patent or other rights, the costs of development, manufacture and marketing, and any other relevant
                  information.  For clarity, it is understood that Purchaser may, consistent with using “Commercially Reasonable Efforts,” reduce efforts or application of resources, or delay or halt (temporarily or permanently) development, manufacturing
                  and/or commercialization of the Product to the extent that such actions are consistent with the actions that Purchaser would typically take in light of the circumstances with respect to Similarly Situated Products, such as (without
                  limitation) delay of clinical trials due to a clinical hold being imposed (e.g., due to identification or discovery of clinical safety issues that must be addressed before further research and development activities can resume) or delay
                  in initiating subsequent clinical trials due to efficacy and/or safety issues, until such issues have been resolved, or cessation of manufacturing and marketing a Product due to safety or applicable commercial issues.

              

      

    

     

    
      
        	

              	c)	
                 “Contracts” means any and all written or oral contracts or other agreements or understandings (including all schedules, annexes and exhibits thereto, and all amendments, waivers, change orders and statements of work or the like
                  related thereto), of any nature, including evidences of indebtedness, loans, letters of credit, guarantees, leases, notes, indentures, security or pledge agreements, franchise agreements, master service contracts, purchase orders, work
                  orders, statements of work, nondisclosure agreements, alliance/partner agreements, licenses, easements, permits, instruments, commitments, arrangements, understandings, powers of attorney, covenants not to compete, covenants not to sue,
                  change of control agreements, employment agreements or settlement agreements to which the Seller is a party or by which any of the Seller’s Assets are bound; provided, however, that, for purposes of this Agreement, Contracts do not
                  include any Immaterial Contracts.

              

      

    

     

    
      

      
        

    

    
      
        	

              	d)	
                “Encumbrances” means all liens, encumbrances, claims, charges, options, security interests, pledges, rights of first refusal, or other title retention agreement.

              

      

    

     

    
      
        	

              	e)	
                “Exchange Act” means the Securities Exchange Act of 1934, as amended.

              

      

    

     

    
      
        	

              	f)	
                “GMP” means the current good manufacturing practices and standards for the production of pharmaceutical intermediates and active pharmaceutical ingredients applicable to both commercial and investigational quantities of
                  compounds (as applicable), as set forth in: (a) Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations (21 CFR 210 and 21 CFR 211); and (b) European Community Directive 2003/94/EC and the Rules Governing Medicinal Products
                  in the European Union, Volume 4 (Medicinal Products for Human and Veterinary Use: Good Manufacturing Practice), in each case, as may be amended from time to time after the Closing Date, and as interpreted by ICH Harmonised Tripartite
                  Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients.

              

      

    

     

    
      
        	

              	g)	
                “Governmental Entity” means any (i) federal, state, local, foreign or other Governmental Entity, including any nation, state, commonwealth, province, territory, county, municipality, district or other juridical or political
                  body; (ii) public primary, secondary or higher educational institution; or (iii) other governmental, self-regulatory or quasi-governmental entity of any nature (including any governmental division, department, agency, commission,
                  instrumentality, official, organization, unit, body or entity and any court or other tribunal).

              

      

    

     

    
      
        	

              	h)	
                “Fraud” means that (i) to the actual knowledge of Seller, such representation and warranty was false when made, (ii) Seller had as such Seller’s primary intention in making such representation and warranty to induce Purchaser to
                  act or refrain from acting in such context, and (iii) Purchaser acted in justifiable reliance on such representation and warranty and was actually damaged as a result of same.

              

      

    

     

    
      
        	

              	i)	
                “Healthcare Laws” means Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395hhh (Medicare), including specifically, the Ethics in Patient Referrals Act, as amended, 42 U.S.C. § 1395nn; Title XIX of the Social Security
                  Act, 42 U.S.C. §§ 1396-1396v (Medicaid); the Federal Health Care Program Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b); the False Claims Act, 31 U.S.C. §§ 3729-3733 (as amended); the Program Fraud Civil Remedies Act, 31 U.S.C. §§
                  3801-3812; the Anti-Kickback Act of 1986, 41 U.S.C. §§ 51-58; the Civil Monetary Penalties Law, 42 U.S.C. §§ 1320a-7a and 1320a-7b; the Exclusion Laws, 42 U.S.C. § 1320a-7; HIPAA; laws related to the practice of pharmacy and the
                  dispensing of medication, including the Controlled Substances Act (21 U.S.C. §§ 801 et seq.) and any corresponding state laws; Section 340B of the Public Health Services Act, as amended from time to time; all applicable implementing
                  regulations, rules, ordinances, judgments, and orders for the foregoing; any similar state and local statutes, regulations, rules, ordinances, judgments, and orders; and all applicable laws related to licensing healthcare service
                  providers providing the items and services that Seller provides, certificate of need, and reimbursement of healthcare service providers providing the items and services that Seller provides.

              

      

    

     

    
      

      
        

    

    
      
        	

              	j)	
                “HIPAA” means the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191), the Health Information Technology for Economic and Clinical Health Act (Pub. L. No. 111-5) and their implementing regulations
                  set forth at 45 CFR Part 160, 162 and 164.

              

      

    

     

    
      
        	

              	k)	
                “Indebtedness” means, with respect to any Person, all liabilities and obligations (including the outstanding principal amount of, accrued and unpaid interest on, fees, expenses and all other payment obligations (including any
                  prepayment penalties or premiums payable as a result of the consummation of the transactions contemplated by this Agreement)), contingent or otherwise, in respect of, without duplication: (a) borrowed money or funded indebtedness or
                  obligations issued in substitution or exchange for borrowed money or funded indebtedness; (b) indebtedness and obligations evidenced by any bond, note, debenture, or other debt security, guarantees, interest rate, currency or other
                  hedging or swap arrangements; (c) all liabilities associated with capital leases, synthetic leases and sale leasebacks; (d) all guaranties, endorsements (except endorsements on checks) and other contingent obligations whether direct or
                  indirect in respect of indebtedness or performance of others, including any obligation to supply funds to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness
                  against loss, through an agreement to purchase goods, supplies or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise; (e) obligations to reimburse issuers of any letters of
                  credit with respect to amounts drawn thereunder, (f) any incentive or change in control payments (including any professional fees) accelerated or required to be made by Seller in connection with the transactions contemplated hereby to the
                  extent not included in Transaction Expenses; (g) amounts accrued for annual and quarterly bonuses for the year ending December 31, 2017 and any accrued and unpaid payroll or severance liabilities (including payroll taxes), if not paid on
                  or prior to the Closing Date to the extent not included in Transaction Expenses, (h) all obligations of the type referred to in clauses (a) though (g) of other persons secured by any Encumbrances on any property or asset of such Person
                  (whether or not such obligation is assumed by such person).

              

      

    

     

    
      
        	

              	l)	
                “Immaterial Contract” means any contract that: (a) was entered into by the Seller in the ordinary course of business consistent with past practice; (b) has a term of less than sixty (60) days or may be terminated by the Seller
                  (without penalty) within thirty (30) days of delivery of a termination notice by the Seller to the other party thereto; (c) does not contemplate or involve the payment of cash or other consideration in an amount or having a value in
                  excess of $10,000, and (e) does not impose any guaranty, indemnity or similar obligation on the Seller; provided that no Contract pursuant to which Intellectual Property was created for, or
                  transferred to, Seller shall be deemed an Immaterial Contract.

              

      

    

     

    
      
        	

              	m)	
                “Intellectual Property” means all intellectual property and other intangible property rights (including any related proprietary rights, interests and protections arising pursuant to the
                  laws of any jurisdiction throughout the world), including (i) all patents, copyrights; database rights; trade secrets and other confidential business information, product names, trademarks, trade names, logos, slogans, domain names and
                  service marks together with all goodwill related to the foregoing and any other intellectual property right recognized or protectable by any jurisdiction in the world and all registrations and applications for any of the foregoing and
                  (ii) all technical, scientific, regulatory, clinical, medical, marketing, sales, financial and business information and data, know-how, structures, formulas, formulations, trade secrets, techniques, methods, processes, protocols, ideas,
                  concepts, designs, compositions, devices, original works of authorship, technology, software, databases, algorithms, enhancements, derivative works, adaptations, discoveries and inventions (whether patentable or not).

              

      

    

     

    
      

      
        

    

    
      
        	

              	n)	
                “Key Individuals” means each of Michael Thorner, Roy Smith, and Kevin Tully.

              

      

    

     

    
      
        	

              	o)	
                “Knowledge”, “knowledge” or “aware” means, with respect to the Seller, the actual knowledge of the Key Individuals, and the knowledge that the Key Individuals would have acquired after due inquiry of the employees
                  of the Seller who would likely have knowledge of a matter in question given their employment responsibilities and functions.  The words “know,” “knowing” and “known” shall be construed accordingly.

              

      

    

     

    
      
        	

              	p)	
                “Merck” means Merck Sharp & Dohme Corp. and its Affiliates.

              

      

    

     

    
      
        	

              	q)	
                “Merck License Agreement” means the License Agreement by and between Seller and Merck Sharp & Dohme Corp., dated as of October 22, 2013, as amended, including all exhibits, schedules and attachments thereto.

              

      

    

     

    
      
        	

              	r)	
                “Orphan Drug Designations” means all orphan drug designations for Product that have been granted to Seller by Governmental Entities, including (a) the orphan drug designation, dated June 15, 2017, granted by the FDA to the
                  Seller for Product for treatment of growth hormone deficiency and (b) the orphan drug designation, dated May 12, 2017, granted by the European Medicines Agency to the Seller for Product for treatment of growth hormone deficiency.

              

      

    

     

    
      
        	

              	s)	
                “Permitted Encumbrances” means collectively, (i) any restriction on transfer arising under applicable securities laws, (ii) Encumbrances for Taxes not yet delinquent or for Taxes that the taxpayer is contesting in good faith
                  through appropriate proceedings, (iii) Encumbrances of lessors, lessees, sublessors, sublessees, licensors or licensees arising under lease arrangements or license arrangements, and (iv) Encumbrances arising in the ordinary course of
                  business and not incurred in connection with the borrowing of money.

              

      

    

     

    
      
        	

              	t)	
                “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or governmental entity.

              

      

    

     

    
      
        	

              	u)	
                “Proceeding” means any suit, litigation, claim, formal or informal charge, complaint, action, hearing or other proceeding, whether judicial or administrative, before any Governmental Entity or arbitrator.

              

      

    

     

    
      
        	

              	v)	
                “Taxes” means any federal, state, county, local or foreign taxes, charges, fees, levies, or other assessments, including but not limited to all net income, gross income, sales and use, transfer, gains, profits, excise,
                  franchise, real and personal property, gross receipt, capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance or withholding taxes or charges imposed by a
                  governmental entity, and includes any interest and penalties (civil or criminal) on or additions to any such taxes.

              

      

    

     

    
      

      
        

    

    
      
        	

              	w)	
                “Tax Return” means any return, statement, report or form (including estimated Tax returns and reports, withholding Tax returns and reports, amended returns, claims for refund, any schedule or attachment, and information returns
                  and reports) required to be filed with respect to Taxes.

              

      

    

     

    
      
        	

              	x)	
                “Tax Sharing Agreement” means all written agreements the principal purpose of which is to provide for the allocation, apportionment, sharing or assignment of any Tax liability or benefit, or the transfer or assignment of income,
                  revenues, receipts, or gains for the purpose of determining any Person’s Tax liability, including any express or implied obligation to assume Taxes or to indemnify any other Person.

              

      

    

     

    
      
        	

              	y)	
                “Transaction Expenses” means to the extent not paid prior to the Closing, (a) all fees and expenses of Seller payable in connection with the transactions contemplated by this Agreement, including fees and expenses relating to
                  the process of selling the Assets and the Business whether incurred in connection with this Agreement or otherwise, including all legal fees and expenses, accounting fees and expenses, Taxes and advisory fees and expenses, fees associated
                  with the release and termination of any Encumbrance, investment banking fees and expenses, and financial advisory fees and expenses related to such sale process and (b) solely to the extent payable as a result of this Agreement or prior
                  to the Closing, payments to be made on account of any stock options, incentive payouts, bonuses or any other similar instruments issued by Seller and any severance and other associated liabilities.

              

         

        

      

    

    
      

      
        

    

    Exhibit B

     

    SUBSEQUENT PAYMENTS

     

    
      
        	1.	
                Definitions.  Capitalized terms used in this Exhibit B shall have the meanings ascribed to them below or, if not defined below, the meanings set forth in the Agreement or the Merck License
                  Agreement (as defined in the Agreement).

              

      

    

     

    
      
        
          
            	 	
                    1.1

                  	
                    “Agreement” means the Asset Purchase Agreement to which this Schedule C is attached.

                  

          

        

      

    

     

    
      
        	

              	1.2	
                “EOP2 Submission” means the submission made to the FDA in advance of an “end of Phase 2” meeting with the FDA, as described in 21 C.F.R. 312.47(b)(iv).

              

      

    

     

    
      
        	

              	1.3	
                “Initiation” has the meaning given to such term in the table set forth in Section 7.02 of the Merck License Agreement.

              

      

    

     

    
      
        	

              	1.4	
                “Licensed Product” has the meaning given to such term in the Merck License Agreement.

              

      

    

     

    
      
        	

              	1.5	
                “Merck License Agreement” has the meaning given to such term in the Agreement.

              

      

    

     

    
      
        	

              	1.6	
                “Net Sales” has the meaning given to such term in the Merck License Agreement, with any references to “Licensee” changed to “Purchaser.”

              

      

    

     

    
      
        	

              	1.7	
                “Phase IIb Trial” means a Phase II Trial of a Licensed Product that is designed to support initiation of a Phase III Trial by finding the
                    optimum dose at which the Licensed Product shows clinical efficacy in human patients with minimal side-effects.

              

      

    

     

    
      
        	

              	1.8	
                “Primary Royalty Period” has the meaning given to such term in Section 3.2.

              

      

    

     

    
      
        	

              	1.9	
                “Seller Patents” means (a) any patents or patent applications owned by Seller that are listed in Schedule 1.1(b) of the Agreement as of the Closing; (b) any substitutions, divisions, and
                  continuations thereof, and any continuations-in-part thereof (but only to the extent that claims in such continuations-in-part are supported in the specification of the parent patent application), (c) any patents issued from the foregoing
                  patent applications; (d) any reissues, renewals, registrations, confirmations, re-examinations and extensions of the foregoing patents; and (e) all foreign counterparts of the foregoing.

              

      

    

     

    
      
        	

              	1.10	
                “Tail Royalty Period” has the meaning given to such term in Section 3.4.

              

      

    

     

    
      
        	

              	1.11	
                “Threshold” has the meaning given to such term in Section 3.5.

              

      

    

     

    
      

      
        

    

    
      
        	

              	1.12	
                “Valid Claim” has the meaning given to such term in the Merck License Agreement, with any references to “Compound Patent Rights” changed to “Seller Patent.”

              

      

    

     

    
      
        	2.	
                Milestone Payments.

              

      

    

     

    
      
        	

              	2.1	
                Development/Regulatory Milestones.  Purchaser shall pay to Seller the one-time milestone payments set forth in the table below if and when the listed milestone event is achieved by or on
                  behalf of Purchaser (solely with respect to the first Licensed Product to achieve such milestone event).  For clarity, once a milestone payment is paid, no further payments shall be owed if the applicable milestone event is later achieved
                  with respect to other Licensed Products.  Each such payment shall be due within thirty (30) days after achievement of such milestone event.  Purchaser shall notify Seller within seven (7) Business Days after the occurrence of each
                  milestone event giving rise to a payment obligation under this Section 2.1.

              

      

    

     

    
      	 	
              MILESTONE EVENT

            	 	
              PAYMENT

            
	 	
              Initiation of first Phase IIb Trial for Licensed Product in Second Indication

            	 	
              $1,000,000

            
	 	
              First EOP2 Submission for Licensed Product in First Indication

            	 	
              $2,000,000

            
	 	
              First EOP2 Submission for Licensed Product in Second Indication

            	 	
              $1,000,000

            
	 	
              Initiation of first Phase III Trial for Licensed Product for First Indication

            	 	
              $2,000,000

            
	 	
              Initiation of first Phase III Trial for Licensed Product for Second Indication

            	 	
              $2,000,000

            
	 	
              Acceptance for filing of first NDA for Licensed Product in the United States for First Indication

            	 	
              $2,000,000

            
	 	
              Acceptance for filing of first NDA for Licensed Product in the United States for Second Indication

            	 	
              $3,000,000

            
	 	
              Acceptance for filing of first application for Marketing Authorization for Licensed Product in either the European Union or a Major European Country for First Indication

            	 	
              $2,000,000

            
	 	
              Acceptance for filing of first application for Marketing Authorization for Licensed Product in either the European Union or a Major European Country for Second Indication

            	 	
              $1,000,000

            
	 	
              First Commercial Sale of Licensed Product in United States after receipt of Marketing Authorization for such Licensed Product in United States for First Indication

            	 	
              $4,000,000

            
	 	
              First Commercial Sale of Licensed Product in United States after receipt of Marketing Authorization for such Licensed Product in United States for Second Indication

            	 	
              $3,000,000

            
	 	
              First Commercial Sale of Licensed Product in European Union after receipt of Marketing Authorization for such Licensed Product in either the European Union or a Major European Country for First Indication

            	 	
              $3,000,000

            
	 	
              First Commercial Sale of Licensed Product in European Union after receipt of Marketing Authorization for such Licensed Product in either the European Union or a Major European Country for Second  Indication

            	 	
              $2,000,000

            
	 	
              First Commercial Sale of Licensed Product in Japan after receipt of Marketing Authorization for such Licensed Product in Japan for First Indication

            	 	
              $2,000,000

            
	 	
              First Commercial Sale of Licensed Product in Japan after receipt of Marketing Authorization for such Licensed Product in Japan for Second Indication

            	 	
              $1,000,000

            

    

     

    

    The Parties acknowledge and agree that “First Indication” and “Second Indication” are used herein with the express intent of capturing the same meaning as in the table set forth in Section 7.02 of
      the Merck License Agreement.

     

    
      

      
        

    

    
      
        	

              	2.2	
                Sales Milestones.  Purchaser shall pay to Seller the one-time milestone payments set forth below if and when worldwide Net Sales of Licensed Products first exceed the indicated dollar
                  value in a Calendar Year.  Each such payment shall be due within thirty (30) days after the end of the Calendar Year in which such milestone event occurs.  Purchaser shall promptly notify Seller of the occurrence of the first achievement
                  of each such sales level.

              

      

    

     

    
      	
              GLOBAL ANNUAL NET SALES (US$)

            	
              PAYMENT

            
	
              $100M

            	
              $5,000,000

            
	
              $200M

            	
              $5,000,000

            
	
              $300M

            	
              $5,000,000

            
	
              $400M

            	
              $5,000,000

            
	
              $500M

            	
              $10,000,000

            
	
              $1B

            	
              $25,000,000

            

    

    

    

    
      

      
        

    

    
      
        
          
            [***] Indicates that information has been omitted.

             

            

          

        

        	3.	
                Royalty Payments.

              

      

    

     

    
      
        	

              	3.1	
                During the Primary Royalty Period (as defined below) and subject to Section 3.5, Purchaser shall pay Seller incremental royalties on Net Sales of Licensed Products at tiered royalty rates determined by annual Net Sales, as follows

              

      

    

     

    
      	 	
              NET SALES (US$) DURING CALENDAR YEAR

            	
              ROYALTY

              RATE

            
	 	
              [***]

            	
              [***]

            
	 	
              [***]

            	
              [***]

            
	 	
              [***]

            	
              [***]

            

    

    

    

    
      
        	

              	3.2	
                Primary Royalty Period.  Purchaser’s obligation to pay royalties under Section 3.1 shall continue, on a country-by-country and product-by-product basis, until the expiration of royalty
                  obligations under the Merck License Agreement with respect to the particular country and product, as set forth in Section 7.03(b) of the Merck License Agreement (the “Primary Royalty Period”).

              

      

    

     

    
      
        	

              	3.3	
                Tail Royalty.  During the Tail Royalty Period (as defined below) and subject to Section 3.5, Purchaser shall pay Seller a royalty equal to [***] of

                  Net Sales of Licensed Product.

              

      

    

     

    
      
        	

              	3.4	
                Tail Royalty Period.  Purchaser’s obligation to pay royalties under Section 3.3 shall, on a country-by-country and product-by-product basis, commence on the end of the Primary Royalty
                  Period and continue until [***] (the “Tail Royalty Period”).

              

      

    

     

    
      
        	

              	3.5	
                Generic Erosion.  In the event that a generic version of a Licensed Product achieves [***] of total gross sales of Licensed Products in a
                  particular country (as stated in IMS reports, for example in the United States, and in analogous reports in other countries) (the “Threshold”), (a) the royalties payable

                  to Seller under Section 3.1 shall be reduced to [***] of Net Sales of Licensed
                  Product in that particular country; and (b) the royalties payable to Seller under Section 3.3 shall be reduced to [***] of Net Sales of Licensed Product in that particular country; in each case for such time that the generic version of Licensed Product maintains the Threshold.

              

      

    

     

    
      
        	4.	
                Payment Terms. Sections 7.04 of the Merck License Agreement shall apply mutatis mutandis
                  to all payments owed under this Exhibit B.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00309-of-00352.parquet"}]]