Document:

arct-ex412_1677.htm

Exhibit 4.12

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2

 

Execution Copy

 

 

Development and Option Agreement

by and between

CureVac AG

and

Arcturus Therapeutics Inc.

dated

1 January 2018

 

 

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Table of Contents

 

 

	
Article 1
	
 
	
Definitions
	
 
	
4

	
 
	
 
	
 
	
 
	
 

	
Article 2
	
 
	
Fee and Governance
	
 
	
12

	
 
	
 
	
 
	
 
	
 

	
Article 3
	
 
	
The Program
	
 
	
15

	
 
	
 
	
 
	
 
	
 

	
Article 4
	
 
	
Reserved Targets
	
 
	
19

	
 
	
 
	
 
	
 
	
 

	
Article 5
	
 
	
CureVac License Options
	
 
	
22

	
 
	
 
	
 
	
 
	
 

	
Article 6
	
 
	
Background Technology; Ownership of Program Technology
	
 
	
24

	
 
	
 
	
 
	
 
	
 

	
Article 7
	
 
	
Confidentiality
	
 
	
31

	
 
	
 
	
 
	
 
	
 

	
Article 8
	
 
	
Warranties; Limitations of Liability; Indemnification
	
 
	
34

	
 
	
 
	
 
	
 
	
 

	
Article 9
	
 
	
Term and Termination
	
 
	
39

	
 
	
 
	
 
	
 
	
 

	
Article 10
	
 
	
Miscellaneous
	
 
	
42

 

2

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

List of Exhibits

	
Exhibit 1.3
	
Patents and Know-How in the Arcturus Background Technology

	
Exhibit 1.5
	
Arcturus LMD Technology

	
Exhibit 1.34
	
Exclusive License Agreement

	
Exhibit 1.61
	
Non-Exclusive License Agreement

	
Exhibit 3.1(a)
	
Work Plan

	
Exhibit 4.2
	
Target Reservation Request Form

 

 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Development and Option Agreement

This Development and Option Agreement (this "Agreement"), dated as of 1 January 2018 (the "Effective Date"), is made by and between CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tübingen, Germany ("CureVac"), and Arcturus Therapeutics Inc., a Delaware corporation with offices at 10628 Science Center Drive # 200, San Diego, CA 92121, USA ("Arcturus").  Each of CureVac and Arcturus may be referred to herein as a "Party" or together as the "Parties".

WHEREAS, Arcturus has expertise and intellectual property relating to the development of LMD Technologies that embody or incorporate delivery systems (and components thereof) for molecular therapeutics based on or incorporating lipid-enabled and unlocked nucleomonomer agents for delivery of nucleic acids as specified in Exhibit 1.5, the Arcturus LMD Technology (as defined below); and

WHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); and

WHEREAS, the Parties believe that certain proprietary Arcturus LMD Technology (as defined below) could be useful for the formulation and delivery of CureVac’s proprietary mRNA Constructs; and 

WHEREAS, the Parties are interested in evaluating the development of products incorporating Arcturus LMD Technology and CureVac Technology (as defined below), and Arcturus wishes to grant to CureVac, and CureVac wishes to obtain, an option to obtain a license under the Arcturus LMD Technology to develop and commercialize one or more specific products of CureVac, all in accordance with the terms and conditions set forth below.

WHEREAS, the Parties intend to also co-develop an ornithine transcarbamylase ("OTC") deficiency product and possibly other products under a contemporaneously executed co-development and co-commercialization agreement ("Co-Development Agreement"). 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

Article 1

Definitions

The following terms and their correlatives will have the following meanings:

1.1"Affiliate" of a person or entity means any other entity which (directly or indirectly) is controlled by, controls or is under common control with such person or entity.  For the purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as used with respect to an entity will mean (i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors or (ii) in the case of a non-corporate entity, direct or indirect ownership of at least fifty percent (50%) of the equity interests with the power to direct the management and policies of such entity, provided that if local Law restricts foreign ownership, control will be established by direct or indirect 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

ownership of the maximum ownership percentage that may, under such local Law, be owned by foreign interests. [...***...]. 

1.2"Agreement" has the meaning set forth in the Preamble.

1.3"Arcturus Background Technology" means any and all LMD Technology for delivering RNA therapeutics that is Controlled by Arcturus or any of its Affiliates as of the Effective Date or during the Term, including the LUNARTM platform, but excluding any Arcturus Program Know-How and Arcturus Program Patents, and necessary or useful for the research, development, manufacturing and commercialization of Licensed Products. The Patents and Know-How comprised in the Arcturus Background Technology as of the Effective Date are listed in Exhibit 1.3 attached hereto. 

1.4"Arcturus Indemnitees" has the meaning set forth in Section 8.7(b).

1.5“Arcturus Lipid-Mediated Delivery Technology” or “Arcturus LMD Technology” means Arcturus Background Technology and Arcturus Program Technology. 

1.6"Arcturus Program Know-How" means any and all Program Know-How owned by Arcturus in accordance with Section 6.2, including Arcturus’ right and interest in any Jointly-Owned Program Know-How (as defined in Section 6.2(c)).

1.7"Arcturus Program Patents" means any and all Patents that claim any of the Arcturus Program Know-How, including Arcturus’ right and interest in any Jointly-Owned Program Patents (as defined in Section 6.2(c)).

1.8"Arcturus Program Technology" means the Arcturus Program Know-How and the Arcturus Program Patents.  

1.9"Arcturus Work Plan Leader" has the meaning set forth in Section 2.2. 

1.10"Business Day" means a day other than a Saturday, Sunday, or bank or other public holiday in San Diego, California, USA or Tübingen, Germany or Boston, Massachusetts, USA.

1.11"Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.12“Change of Control” shall be deemed to have occurred if during the Term (i) any person or entity is or becomes the "beneficial owner", directly or indirectly, of shares of capital stock or other interests (including partnership interests) of Arcturus’ then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions of Arcturus representing fifty percent (50%) or more of the total voting power of all outstanding classes of voting stock of Arcturus or has the power, directly or indirectly, to elect a majority of the members of Arcturus’ board of directors, or similar governing body; or (ii) Arcturus enters into a merger, consolidation or similar transaction with another person or entity; or (iii) Arcturus sells or transfers to any Third Party, in one (1) or more related transactions, properties or assets representing all or substantially all of Arcturus’ consolidated total assets to which this 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Agreement relates; or (iv) the holders of capital stock of Arcturus approve a plan or proposal for the liquidation or dissolution of Arcturus; provided, however, that 

(a)subsections (i) to (iii) shall only apply if the person or entity or Third Party acquiring control is (i) a pharmaceutical company which has experience in developing and/or commercializing pharmaceutical products (i.e., is a strategic, not financial investor or partner) or (ii) a competitor, i.e., a company in the business of mRNA development, manufacturing and/or commercialization and

(b)a bona fide financing transaction with Third Parties that does not otherwise meet the requirements of subsection (a) shall not constitute a Change of Control.

1.13"Co-Development Agreement" has the meaning set forth in the Preamble.

1.14"Concurrent Reserved List Limits" has the meaning set forth in Section 4.2(d).

1.15"Confidential Information" of a Party means all proprietary Know-How, unpublished patent applications and other non-public information and data of a financial, commercial, business, operational, scientific or technical nature of such Party that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form in connection with this Agreement, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with this Agreement.  In addition, any non-public information related to this Agreement or the Products hereunder and disclosed by a Party to the other Party (or their respective Affiliates) under the Confidentiality Agreement will be deemed such Party’s Confidential Information hereunder. Program Know-How will be considered the Confidential Information of the Party (or Parties) owning such Program Know-How, and Jointly-Owned Program Know-How will be considered Confidential Information of both Parties.

1.16“Confidentiality Agreement” means that certain Confidentiality Agreement between the Parties dated as of [...***...]. 

1.17"Contract Year" will refer to the twelve (12)-month period beginning with the Effective Date and on each anniversary thereafter.

1.18"Control" or "Controlled" means, with respect to Technology, that a Party owns or has a license to use and practice the respective Patent or Know-How without violating the terms of any agreement with any Third Party.

1.19"CTA" means a clinical trial application.

1.20"CureVac Background Technology" means any and all mRNA Technology that is Controlled by CureVac or any of its Affiliates as of the Effective Date or during the Term, but excluding any CureVac Program Know-How and CureVac Program Patents, and necessary or useful for the research, development, manufacturing and commercialization of a Licensed Product.

1.21"CureVac Indemnitees" has the meaning set forth in Section 8.7(a).

 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

1.22"CureVac Program Know-How" means any and all Program Know-How owned by CureVac in accordance with Section 6.2, including CureVac’s right and interest in any Jointly-Owned Program Know-How.

1.23"CureVac Program Patents" means any and all Patents that claim any of the CureVac Program Know-How, including CureVac’s right and interest in any Jointly-Owned Program Patents (as defined in Section 6.2(c)).

1.24"CureVac Program Technology" means the CureVac Program Know-How and the CureVac Program Patents.  

1.25"CureVac Technology" means, collectively, CureVac Background Technology and CureVac Program Technology.

1.26"CureVac Work Plan Leader" has the meaning set forth in Section 2.2.

1.27“Diligent Efforts” means, with respect to the efforts to be expended by each Party with respect to any activity set forth in the Work Plan, active and sustained efforts as such Party would normally use to accomplish a similar task or obligation under similar circumstances to conduct the applicable activity, or to attempt to achieve the applicable requirement or goal, in a reasonable manner that is consistent with the achievement of the goals set forth in the Work Plan (including the level of FTE funding and budget for out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement.

1.28"Disclosing Party" has the meaning set forth in Section 7.1.

1.29"DNA Sequence" means any sequence of DNA intended to be inserted or copied into a DNA Target as set forth on Exhibit 4.2.

1.30"DNA Target" means a defined coding and/or non-coding sequence (e.g., a gene) within the genome of a human or animal cell or virus and/or variants thereof.

1.31"DNA Editing Protein" means a Target encoded by an mRNA that upon delivery to a cell is intended to Gene Edit a human, animal or virus coding or non-coding sequence within the genome of the human or animal cell or virus.

1.32"Dual Improvement Technology" is an Improvement to both the Arcturus Background Technology and the CureVac Background Technology at the time such Improvement is discovered, created, conceived, developed or reduced to practice.

1.33"Effective Date" has the meaning set forth in the Preamble.

1.34"Escrow Agent" shall be the agent selected by Arcturus in good faith to maintain in confidence the Restricted Target List and to respond to CureVac's Target Notices on behalf of Arcturus.  

1.35"Exclusive License Agreement" means an exclusive license agreement in the form attached hereto as Exhibit 1.34.

1.36"Executive Officers" has the meaning set forth in Section 2.3(d). 

 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

1.37"Formulated Product(s)" means a product (including Licensed Products) manufactured by or on behalf of Arcturus in accordance with the Work Plan that incorporate CureVac mRNA Constructs formulated with Arcturus Lipid-Mediated Delivery Technology. 

1.38"FTE" means a full-time person, or more than one person working the equivalent of a full-time person, where "full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel are working, consisting of a total of 1880 hours per year of Work directed to the Work Plan or work pursuant to this Agreement.  Any person who devotes less than 1880 hours per year on the applicable activities shall be treated as an FTE on a pro-rated basis, based upon the actual number of hours worked by such person on such activities, divided by 1880.  Any person who devotes more than 1880 hours per year on the applicable activities shall be treated as one (1) FTE, i.e., in no event shall one person be counted as more than one FTE. FTE activities shall include the performance of the Work and scientific management oversight, as reasonably required, but, for clarity, exclude (i) the work of general corporate or administrative personnel, overhead (including facilities costs), insurances and similar costs and (ii) the manufacture of Formulated Product for research and clinical activities as set forth in the Work Plan.  

1.39"FTE Costs" means an initial rate of [...***...] Dollars ($[...***...]) per FTE per year, which shall apply through [...***...].  Thereafter, the FTE Rate shall be changed bi-annually at the end of each second calendar year to reflect any percentage increase or decrease (as the case may be) in the Consumer Price Index in the U.S. (index for all items) (“CPI”) (based on the change in the CPI from the most recent index available as of the Effective Date to the most recent index available as of the date of the calculation of such revised FTE Cost rate).

1.40"Gene Edit" means to correct, modify, insert, delete, activate, inactivate or repair a coding or non-coding sequence within the genome of a human or animal cell or virus and "Gene Editing" has the corresponding meaning.

1.41"Guide RNA" means a modified or unmodified RNA sequence intended to direct a DNA Editing Protein to a specific DNA Target.

1.42"Improvement" means, with respect to the Arcturus Background Technology and/or the CureVac Background Technology any change, modification, variation or revision of such Technology, whether patentable, copyrightable or not.

1.43"Initial Term" has the meaning set forth in Section 9.1(a).

1.44"IND" means an investigational new drug.

1.45"Indemnified Party" has the meaning set forth in Section 8.7(c).

1.46"Indemnification Claim Notice" has the meaning set forth in Section 8.7(c).

1.47“IP Subcommittee” has the meaning set forth in Section 6.4.

1.48"JDC" has the meaning set forth in Section 2.3(a).

1.49"JDC Deadlock" has the meaning set forth in Section 2.3(d).

1.50"Jointly-Owned Program Patents" has the meaning set forth in Section 6.2(c).

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1.51"Know-How" means all commercial, technical, scientific and other know-how and information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, preclinical, clinical, safety, manufacturing and quality control data and know-how, including study designs and protocols), in all cases, provided it is confidential and proprietary, and regardless of whether patentable, in written, electronic or any other form now known or hereafter developed.

1.52"Law" or "Laws" means all laws, statutes, rules, regulations, orders, judgments, or ordinances having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

1.53"License Agreement" means an Exclusive License Agreement or Non-Exclusive License Agreement. 

1.54"Licensed Product" means [...***...] product comprised of (i) Lipid-mediated delivery systems, which are covered by Arcturus Lipid-Mediated Delivery Technology; and containing (ii) one or more mRNA Constructs as the active pharmaceutical ingredient(s) intended to express a Target which is subject to a License Agreement.  In case of two or more mRNA Constructs these constructs may be contained in the same or separate LMDs. Licensed Product includes mRNA-LMD products which are administered jointly or separately, and mRNA-LMD products which are administered simultaneously or sequentially as a combination medicinal product or treatment. For Gene Editing purposes, a Licensed Product may contain other RNA(s) (i.e., Guide RNA(s)) and/or DNA Sequence(s) which can be delivered together or separately (combined in one LMD or delivered in separate LMDs), in addition to the one or more mRNA Constructs intended to express the DNA Editing Protein. 

1.55"LMD Technology" means Technology that claims, embodies or incorporates delivery systems (and components thereof) based on or incorporating lipid-mediated delivery (LMD) systems. 

1.56"Losses" has the meaning set forth in Section 8.7(a).

1.57"Material Transfer Agreement" means the Material Transfer Agreement dated [...***...], as amended from time to time.

1.58"Materials" means any tangible chemical or biological material, including any compounds, LMD, DNA, RNA (including mRNA), clones, cells, and any expression product, progeny, derivative or other improvement thereto, along with any tangible chemical or biological material embodying any Know-How, Controlled by a Party.

1.59"Maximum Target" has the meaning set forth in Section 4.2(d).

1.60"mRNA Construct" means any mRNA construct for the expression of a protein, including the sequence of such construct (which potentially comprises one (1) or more of a cap, 5’ UTR, the associated open reading frame, 3’UTR and a poly A tail), the chemistry of natural and non-natural nucleic acids, and other chemical modifications associated with such construct.

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1.61"mRNA Technology" means Technology that claims, embodies or incorporates expression systems (and components thereof), based on or incorporating mRNA.

1.62"Non-Exclusive License Agreement" means a form Non-Exclusive License Agreement to be negotiated by the Parties within [...***...] days following the execution of this Agreement, on the basis of the terms and conditions of the Exclusive License Agreement and taking into account the specific circumstances of a non-exclusive licensing Option exercise by CureVac. Such form Non-Exclusive License Agreement shall be incorporated by reference into this Agreement as Exhibit 1.61.

1.63"Non-Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of equal to or more than [...***...] in [...***...] people in the U.S. or EU. The indication for which the first IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.

1.64"Option" has the meaning set forth in Section 5.1

1.65"Option Exercise Fee" has the meaning set forth in Section 5.3.

1.66"Option Notice" has the meaning set forth in Section 5.1.

1.67"Option Period" has the meaning set forth in Section 5.1.

1.68"Patent(s)" means an (i) issued patent, a patent application, and a future patent issued from any such patent application, (ii) a future patent issued from a patent application filed in any country worldwide which claims priority from a patent or patent application of (i), and (iii) any additions, divisions, continuations, continuations-in-part, invention certificates, substitutions, reissues, reexaminations, extensions, registrations, utility models, supplementary protection certificates and renewals based on any patent or patent application under (i) or (ii), but not including any rights that give rise to regulatory exclusivity periods (other than supplementary protection certificates, which will be treated as "Patents" hereunder).

1.69"Pre-Existing Restrictions" means, with respect to a Target on the Restricted Target List pursuant to Section 4.2(a), that Arcturus or its Affiliates have granted to a Third Party with respect to a Target a non-exclusive, co-exclusive or an exclusive license or option pursuant to a bona fide written agreement that is in effect at the time of a request by CureVac pursuant to Section 4.2.

1.70"Program" means each program of activities using Arcturus LMD Technology and CureVac Technology for the development of a Licensed Product incorporating CureVac’s mRNA Constructs that the Parties engage in under this Agreement pursuant to the Work Plan. "Programs" shall mean several or all of these programs, as the context admits. 

1.71"Program Improvement Technology" means Program Technology which constitutes an Improvement to either Party's or both Parties' Technology at the time such Improvement is discovered, created, conceived, developed or reduced to practice. Program Improvement Technology will be either Sole Improvement Technology of a Party or Dual Improvement Technology of the Parties. For the avoidance of doubt, Program Improvement Technology will not include any Improvement arising out of a Party's independent research and development efforts or collaborations with Third Parties, in each case conducted outside 

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of the Program; provided that such Improvement is not developed based upon, using or with reference to the Technology, Confidential Information or Material of the other Party.

1.72"Program Know-How" means all Know-How, including Know-How embodied in Materials, created, conceived, developed or reduced to practice in connection with activities performed pursuant to the Work Plan or using Formulated Product as set forth in the Work Plan under this Agreement (whether solely by or on behalf of one Party or jointly by or on behalf of the Parties). 

1.73"Program Technology" means all Program Know-How and all Patents directed to or disclosing such Program Know-How.

1.74"Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of less than [...***...] in [...***...] people in the U.S. or EU.  The indication for which the first IND or CTA application will be filed will determine whether a Target is a Rare Disease Target. 

1.75"Receiving Party" has the meaning set forth in Section 7.1.

1.76"Records" has the meaning set forth in Section 3.3(a).

1.77"Reserved Target" means a Target with respect to which CureVac shall have delivered to the Escrow Agent a Target Notice and in response thereto the Escrow Agent shall have delivered to CureVac a Target Response Notice under Section 4.2(c)(i) for such Target to become a Reserved Target. A Reserved Target that is replaced pursuant to Section 4.2 will no longer be deemed a Reserved Target. 

1.78"Reserved Target List" means collectively, the list of all Reserved Targets.

1.79"Restricted Target List" has the meaning set forth in Section 4.2(a). 

1.80"Sole Improvement Technology" means, without regard to inventorship, an Improvement to one Party’s Technology that is not also an Improvement to the other Party’s Technology at the time such Improvement is discovered, created, conceived, developed or reduced to practice. For clarity, Sole Improvement Technology of a Party shall exist only with respect to activities of the Parties pursuant to this Agreement (i.e., not to any Improvement or Technology independently developed by one Party without the use of Technology of the respective other Party).

1.81"Solely-Owned Program Know-How" has the meaning set forth in Section 6.2(c).

1.82"Solely-Owned Program Patents" has the meaning set forth in Section 6.2(c). 

1.83"Solely-Owned Program Technology" has the meaning set forth in Section 6.2(c).

1.84"Target" means

(a)up to N proteins (N = [...***...]), including all possible combinations resulting from removing one of the N proteins (N minus [...***...] proteins), together with all variants of such proteins, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof; provided, 

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however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring protein; and

(b)[...***...] antigens of a given pathogen, including [...***...] antigen and any combination of such antigens, together with all variants of such antigens, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof provided, however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring antigen; and

(c)a DNA Target, provided, however, that the first DNA Target for each DNA Editing Protein would not count as a Target.  Each subsequent DNA Target for this DNA Editing Protein would count as a Target. For clarity, a DNA Editing Protein would be defined as a Target under (a) above and count as a single Target.

If a given protein, e.g., an antibody or enzyme, comprises separated amino acid chains which might be delivered by separated mRNA Constructs, such protein would be defined as one Target.

1.85"Target Notice" has the meaning set forth in Section 4.2(b).

1.86"Target Reservation Request Form" has the meaning set forth in Section 4.2 (b). 

1.87"Target Response Notice" has the meaning set forth in Section 4.2(c).

1.88"Technology" means collectively Patents and Know-How.

1.89"Term" has the meaning set forth in Section 9.1.

1.90"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.

1.91"Third Party Claims" has the meaning set forth in Section 8.7(a).

1.92"Work Plan" has the meaning set forth in Section 3.1(a).

1.93"Work Plan Leaders" has the meaning set forth in Section 2.2.

1.94"Work" means the activities to be performed by Arcturus pursuant to the Work Plan.

Article 2

Fee and Governance

2.1One-Time Fee.  In consideration for the rights granted by Arcturus to CureVac hereunder, including the right to reserve Targets in accordance with Section 4 below, within 

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thirty (30) days as of the Effective Date, CureVac shall pay to Arcturus a one-time non-refundable fee of [...***...]. 

2.2Management.  Management of the Program activities will be under the responsibility of the individual designated in writing within [...***...] days of the Effective Date for Arcturus (the "Arcturus Work Plan Leader") and of the individual designated in writing within [...***...] days of the Effective Date for CureVac (the "CureVac Work Plan Leader", and together with the Arcturus Work Plan Leader, the "Work Plan Leaders").  Each Work Plan Leader will be the primary point of contact for the other Party on all matters relating to the Program activities.

2.3Joint Development Committee.

(a)Development Committee.  As soon as practicable, the Parties will establish a Joint Development Committee, comprised of up to [...***...] representatives of CureVac and up to [...***...] representatives of Arcturus (the "JDC").  One such representative from each Party will be such Party’s Work Plan Leader.  Each Party may replace its Work Plan Leader and other JDC representatives at any time upon written notice to the other Party, provided, however, that each Party shall use Diligent Efforts to ensure continuity on the JDC.  With the consent of the other Party (which will not be unreasonably withheld, delayed or conditioned), each Party may invite non-voting employees and consultants to attend meetings of the JDC, subject to their agreement to be bound to the same extent as a permitted subcontractor under Section 3.4.

(b)Meetings.  While in existence, the JDC will meet each Calendar Quarter by teleconference, videoconference or in person and, at a minimum, one of such meetings each calendar year will be in person (which in-person meeting will be held on an alternating basis in Tubingen, Germany and in San Diego, CA), unless agreed otherwise by the JDC representatives.  The JDC will have a quorum if at least one (1) representative of each Party is present or participating.  Each Party will be responsible for all of its own expenses of participating in the committee meetings.  The Parties will endeavor to schedule meetings of the JDC at least [...***...] months in advance.  The Parties will alternate in preparing the meeting agenda, and the Party that was responsible for preparing the meeting agenda will prepare and circulate for review and approval by the other Party written minutes of such meeting within [...***...] days after such meeting.  The Parties will agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JDC. 

(c)Responsibilities.  The JDC will oversee and supervise the overall performance of the Work Plan, prepare and maintain minutes of meetings and provide a forum for discussion of the Programs and Work Plans, and within such scope will:

	
 
	
(i)
	
review the efforts of the Parties and allocate those resources under the Work Plan committed by the Parties hereunder;

	
 
	
(ii)
	
revise and approve any revisions to the Work Plan regularly and in any event at least [...***...] days before the start of each Calendar Quarter during the Term;

	
 
	
(iii)
	
coordinate the activities of the Parties under the Work Plan and oversee the implementation thereof;

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(iv)
	
form such other committees as the JDC may deem appropriate, provided that such committees may make recommendations to the JDC but may not be delegated JDC decision-making authority;

	
 
	
(v)
	
address such other matters relating to the activities of the Parties under this Agreement as either Party may bring before the JDC, including any matters that are delegated to the JDC to decide as provided in this Agreement, such as CureVac's consent to subcontractors; and 

	
 
	
(vi)
	
attempt to resolve any disputes on an informal basis.

(d)Decision-making.  The JDC will make decisions only by unanimous consent, with each Party having only one vote by its representatives (regardless of the number of each such representatives present from a Party).  In the event the JDC is unable to reach agreement as to a matter within the JDC’s jurisdiction (such event, a "JDC Deadlock"), upon the written request of a Party, such matter will be referred to a senior executive of each Party (the "Executive Officers") (or their designees, which designee is required to have decision-making authority on behalf of such Party), who will attempt in good faith to resolve such JDC Deadlock by negotiation and consultation for a [...***...]-day period following receipt of such written notice.  If, despite such efforts, agreement on a particular matter cannot be reached by the Executive Officers within such [...***...]-day period, then CureVac shall have the final decision-making authority with respect to such JDC Deadlock, provided, however, that 

	
 
	
(i)
	
CureVac's final decision-making authority shall not apply if CureVac proposes (a) to amend the Work Plan to materially accelerate, decelerate, increase, add or remove planned activities to be performed by Arcturus thereunder, including significantly reducing or eliminating Arcturus’ responsibilities for an activity thereunder; (b) to materially change the Arcturus resources required to perform the Work Plan activities, including the timing of such resources; or (c) to require allocation by Arcturus of FTEs materially greater than or less than those provided for in the Work Plan. For purposes of this Section 2.3(d), the term "materially" shall mean, in relation to resources and FTE amounts set forth in the Work Plan, [...***...] percent ([...***...]%) or more of the relevant resource or FTE, and 

	
 
	
(ii)
	
In the event that CureVac desires Work with respect to which it does not have final decision-making authority pursuant to Section 2.3(d)(i) or is otherwise materially outside of the Work Plan with respect to a Program, Arcturus shall consider any proposal from CureVac in writing in good faith. 

(e)Limits on JDC Authority.  Each Party will retain the rights, powers and discretion granted to it under this Agreement and no such rights, powers, or discretion will be delegated to or vested in the JDC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  The JDC will not have the power to amend, modify or waive compliance with this Agreement (other than as expressly permitted hereunder).  Notwithstanding anything herein to the contrary, the JDC will not have the power to require any Party to perform

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any activities that are materially greater in scope or more costly than those provided for in the Work Plan then in effect or otherwise under this Agreement.

Article 3

The Program

3.1Programs Generally.  The Parties will jointly conduct each Program. It is intended that Arcturus will be responsible for the lipid chemistry and LMD formulation using the Arcturus LMD Technology, and for characterization work, CureVac will be responsible for mRNA Construct development, and Arcturus and CureVac will each undertake preclinical studies as allocated in each Work Plan.

(a)Work Plan Preparation.  The development activities to be undertaken by the Parties with respect to a Program will be described in a detailed written development plan (the "Work Plan"). The initial Work Plan includes a description of activities undertaken by the Parties under the Material Transfer Agreements and prior to the execution of this Agreement. The initial Work Plan, which will cover the initial twelve (12) months of the Program, is attached hereto as Exhibit 3.1(a).

(b)Work Plan Contents.  Each Work Plan will include (i) all activities to be undertaken by each Party with respect to a Program, including Arcturus’ manufacture and supply of Formulated Product, (ii) a detailed budget of the FTE activities, FTE Costs and out-of-pocket costs to be incurred by Arcturus for which CureVac will reimburse Arcturus in connection with the performance of the Work, (iii) the Materials to be provided by one Party to the other, (iv) forecasting and ordering procedures for the Formulated Product, and (v) the projected timelines for completion of all activities set forth therein.  The goal of each Work Plan and related Program will be to evaluate and produce tailored Arcturus LMD Technology formulations that are safe and efficacious for delivery of CureVac’s mRNA Constructs and to advance the development of such mRNA-LMD formulations against a Target.  Each Program will include activities with respect to Reserved Targets but may also include activities with respect to Targets that are not on the CureVac Reserved Target List. As defined

in the Work Plan, CureVac will perform up to [...***...] pivotal animal studies to make a go/ no go decision for a particular LMD composition for a given Target.

(c)Amendments to the Work Plan. Each Work Plan will be reviewed as necessary at each meeting of the JDC, and at any other time upon the request of either Party, and will be modified in accordance with the objectives defined in Section 3.1(b) and as appropriate at the direction of the JDC to reflect material scientific (and other) developments.  Each Calendar Quarter, the JDC will update the Work Plans to cover the subsequent six (6) months of the Program in detail.  In all events, the Work Plan will be consistent and not conflict with the terms of this Agreement, and in the event of any conflict between the Work Plan and this Agreement, the terms of this Agreement will control. 

(d)Obligations Under the Work Plans.  During the Term, each Party will use Diligent Efforts and perform the Work in a professional manner and in accordance with the Work Plan, and each Party will use Diligent Efforts to meet the objectives and 

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timelines set forth therein. It is understood that the activities and goals of the Work Plan are experimental and that successful results cannot be guaranteed.  The Parties will otherwise conduct the Program on the terms and conditions set forth in this Agreement and in accordance with the Work Plan.  Each Party will cooperate with and provide reasonably requested non-financial support to the other Party in such other Party’s performance of its responsibilities under the Work Plan. The Parties will use Diligent Efforts to develop LMD formulations which do not infringe Third Party Technology. In addition to the reporting obligations set forth in Section 3.3(b), each Party will keep the other Party reasonably informed of such Party’s activities under the Program and will reasonably consult with such other Party and consider such other Party’s comments and advice with respect to all material decisions relating to such activities in good faith.

(e)Supply of Formulated Products.  Arcturus will use Diligent Efforts to manufacture and supply CureVac with Formulated Product as set forth in the Work Plan. 

(f)Technology Transfer to Contract Manufacturing Organization. Following CureVac’s exercise of an Option and entry into a License Agreement, Arcturus will use Diligent Efforts to transfer the formulation process for the Licensed Products that are intended to express the intended Target to a reputable and competent GMP manufacturer selected by CureVac and reasonably acceptable to Arcturus. Arcturus and CureVac will agree on a technology transfer or other means to support availability of Licensed Products as part of the License Agreement. Specifically, the License Agreement will provide that upon written request by CureVac, Arcturus will conduct a technology transfer to CureVac and/or its designee(s). Such designee(s) may be an Affiliate, sublicensee or Third Party manufacturers, and which Third Party manufacturers may also be a backup manufacturer or a second manufacturer of Licensed Products as required for the applicable transferee of the then-current process.   

3.2FTEs.

(a)Generally.  Arcturus will perform the Work under the Work Plan, and as part of the Program CureVac will fund up to [...***...] scientists per year at Arcturus to perform the Work as defined and in accordance with the Work Plan for a period of up to [...***...] months at the FTE Costs. The Parties may agree to extend the performance of Work by Arcturus for an additional year. 

(b)FTEs.  Arcturus shall ensure that those individuals selected by Arcturus to perform the Work and Services and otherwise support the activities to be undertaken by Arcturus pursuant to the Work Plan will have sufficient scientific expertise, skill, training and competency to perform the proposed work and have similar skills, training and competency as those FTEs employed by Arcturus to perform work on Arcturus’ internal programs and for Third Parties. In the event that CureVac has concerns regarding the selection of an individual to perform the Work or other activities under this Agreement, the Parties will discuss such concerns in good faith.

(c)Reimbursement.  CureVac will reimburse Arcturus on a Calendar Quarter-by-Calendar Quarter basis for FTE Costs incurred to conduct the Work Plan in accordance with the Work Plan or pre-agreed by the JDC. Arcturus will send a reasonably detailed invoice to CureVac no later than [...***...] days after the end of each Calendar Quarter, which invoice shall include a summary of all activities by the 

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name of each FTE, number of hours devoted by each such FTE, and activity performed by each such FTE during such Calendar Quarter. CureVac agrees to pay undisputed amounts in each such invoice within [...***...] days of CureVac’s receipt thereof. Any amounts subject to dispute shall be reviewed by the JSC and if not resolved within [...***...] days, shall be subject to Section 10.1. 

3.3Program Records, Reports; Materials and Formulated Product.

(a)Records. Each Party will maintain, or cause to be maintained, records of its activities under a Program in sufficient detail and in good scientific manner appropriate for scientific, Patent and regulatory purposes, which will properly reflect all work included in a Program ("Records") for a period of at least [...***...] years after the creation of such Records.  CureVac will have the right to receive a copy of any such Records maintained by Arcturus which shall be used subject to the terms of this Agreement. Arcturus will have the right to receive a copy of any such Records maintained by CureVac to the extent such Records are required by Arcturus to exercise its rights or perform its obligations under this Agreement. 

(b)Program Reports.  During the Term, each Party will furnish to the JDC a summary written report within [...***...] days after the end of each Calendar Quarter describing its progress under the Work Plan as part of a Program. Within [...***...] days following expiration or earlier termination of this Agreement, each Party will furnish to the JDC a final summary written report.  Arcturus shall promptly provide all additional information with respect to the Arcturus LMD Technology that is reasonably requested by CureVac and necessary or useful for CureVac to determine whether to exercise an Option with respect to any Target.

(c)Materials and Formulated Product.

	
 
	
(i)
	
The Parties will, during the Term, furnish to each other Materials which comprise, embody or incorporate CureVac Technology or Arcturus LMD Technology only as expressly set forth in the Work Plan. 

	
 
	
(ii)
	
Arcturus will furnish to CureVac the quantities of Formulated Product as set forth in the Work Plan. In the event requested in writing by CureVac, to furnish additional Formulated Product of up to [...***...]% in excess of the total quantities set forth in the Work Plan for a Program, Arcturus shall use Diligent Efforts to supply such quantities. Arcturus shall consider in good faith furnishing additional quantities which may be required in the performance of the Program pursuant to any separate request by CureVac.

	
 
	
(iii)
	
In addition, each Party will, upon the other Party’s reasonable written request, furnish to such other Party other samples of Materials which comprise, embody or incorporate CureVac Technology or Arcturus LMD Technology that are in such Party’s Control and are reasonable (both in quantity and identity) and useful for the other Party to carry out its responsibilities under the Work Plan, provided (A) such Materials are reasonably and readily available in excess of the providing Party’s own requirements, and (B) supply of such Materials will not, in the providing Party’s reasonable judgment, (1) conflict with the 

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providing Party’s internal or Third Party research programs, (2) conflict with the providing Party’s internal policies regarding such Materials or (3) violate any agreement to which the providing Party is a party.  

	
 
	
(iv)
	
Each Party will use such Materials only in accordance with the Work Plan and otherwise in accordance with the terms and conditions of this Agreement, and the provision of Materials hereunder by either Party will not constitute any grant, option or license under any Patents or Know-How, except as expressly set forth herein. In any event, all Materials delivered to the receiving Party will remain the sole property of the providing Party and will be used in compliance with all applicable Laws.  The Materials supplied under this Agreement will be used with prudence and appropriate caution in any experimental work, because not all of their characteristics may be known. In the event that the Parties enter into a License Agreement with respect to a Program, the Materials may be retained subject to such License Agreement. 

	
 
	
(v)
	
Except with the prior written consent of the supplying Party, the Party receiving any Materials will not distribute or otherwise allow the release of Materials to any Third Party, except, with respect to either Party, to any permitted subcontractors under Section 3.4 and, with respect to CureVac, to any Third Party licensee or assignee or potential licensee or assignee of CureVac Technology in accordance with this Agreement.  

3.4Permitted Subcontracting.  Either Party may subcontract its activities to be performed under the Work Plan to a Third Party, provided that (i) Arcturus shall obtain, through the JSC, consent by CureVac for such subcontracting, such consent not to be unreasonably withheld, delayed or conditioned, and (ii) CureVac shall inform Arcturus about any subcontracting (including the identity of the subcontracting party and work to be performed) without undue delay, and in any event within [...***...] Business Days of entry into the subcontracting agreement. Any such subcontracting Party will have entered into a written agreement with the subcontractor that 

(a)includes terms and conditions protecting and limiting use and disclosure of Confidential Information and Materials and Know-How at least to the same extent as under this Agreement, and the subcontracting Party shall use Diligent Efforts to ensure compliance with the obligations of Confidentiality (including return or destruction on termination) as set forth in Article 7, 

(b)provides for reasonable auditing rights, with regard to the work provided by the Third Party subcontractor, of the subcontracting Party and third parties authorized by the subcontracting Party, and 

(c)requires such Third Party subcontractor and its personnel to assign to the subcontracting Party all right, title and interest in and to any Patents and Know-How and Materials created, conceived, developed or reduced to practice in connection with the performance of subcontracted activities pursuant to this Agreement, consistent with the requirements of Section 6, provided, however, that in the event of a subcontracting or sublicensing to a collaboration partner of CureVac, CureVac shall obtain at least a customary non-blocking, back-license of Improvements to Arcturus Background IP 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

 

generated by or jointly with such collaborators of CureVac, i.e., a non-exclusive, royalty-free, and sublicensable license under the applicable Know-How and Patents generated (if any).

3.5Program Licenses.

(a)By Arcturus.  Subject to the terms and conditions of this Agreement, Arcturus hereby grants to CureVac a worldwide, non-exclusive license under the Arcturus LMD Technology, including the right to grant sublicenses, limited in accordance with this Section 3.5, to research and pre-clinically develop (including the right to manufacture for such purposes), but expressly without the right to clinically develop or commercialize (including the right to manufacture for such purpose) except with the prior written consent of Arcturus) and in any event solely to the extent necessary:

	
 
	
(i)
	
to enable CureVac, Affiliates of CureVac and subcontractors selected in accordance with Section 3.4 to perform CureVac's activities set forth in the Work Plan, 

	
 
	
(ii)
	
to conduct research projects with academic partners (any such agreements of which (i) shall include back-licenses or grants of rights by the academic partner to Patents and Know-How (other than data) to meet the requirements of Section 6 and (ii) will not require Arcturus to enter into a license agreement with or make payments to such academic partner in order for Arcturus to use and exploit the Arcturus Background Technology), and  

	
 
	
(iii)
	
to permit, under confidentiality and non-use restrictions in accordance with this Agreement, to Third Party collaborators of CureVac who license or intend to license CureVac Technology to explore the Arcturus LMD Technology (any such agreements of which shall include back-licenses by the Third Party collaborator to Patents and Know-How (other than data) consistent with the requirements of Section 6).

(b)By CureVac.  Subject to the terms and conditions of this Agreement, CureVac hereby grants to Arcturus a worldwide, non-exclusive license under CureVac Technology, solely to the extent necessary to enable Arcturus to perform its activities set forth in the Work Plan and for no other purpose.  The foregoing license shall not include the right to grant sublicenses, except to permitted subcontractors in accordance with Section 3.4. 

(c)No Other Licenses.  No license or right is or will be created or granted hereunder by implication, estoppel or otherwise.  All licenses and rights are or will be granted only as expressly provided in this Agreement.

Article 4

Reserved Targets

19

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

4.1Generally.  CureVac will select the Targets that will be the subject of the Works to be performed as part of a Program from the Reserved Target List. CureVac shall have the right, but not the obligation, to reserve Targets (or replace a Reserved Target with a new Target) in accordance with this Article 4.

4.2Restricted Target List.

(a)Pre-existing Restrictions.  Arcturus shall maintain at the Escrow Agent an updated monthly (as of the final day of each month) list of Targets that are subject to Pre-Existing Restrictions (the "Restricted Target List").  The Restricted Target List will identify whether the Pre-Existing Restrictions are exclusive, non-exclusive or co-exclusive. Arcturus represents, warrants and covenants to CureVac that (i) the Restricted Target List is and will at all times be accurate in accordance with this Section 4.2(a); and (ii) Arcturus or the Escrow Agent will not add any Reserved Targets to the Restricted Target List or grant to any Third Party any licenses or options under the Arcturus LMD Technology with respect to the then current Reserved Target List that would preclude Arcturus from entering into a License Agreement with respect to such Reserved Target as set forth herein.

(b)Target Notices. 

	
 
	
(i)
	
If CureVac desires to include a Target as a Reserved Target hereunder, CureVac will notify the Escrow Agent in writing (with  contemporaneous information in writing to Arcturus about the notification to the Escrow Agent) of the Targets for potential inclusion on the Reserved Target List, which notice will provide (i) the information on the Target Reservation Request Form attached hereto as Exhibit 4.2; and (ii) the identity of each Reserved Target (if any) that CureVac desires to remove as a Reserved Target (each such notice, a "Target Notice").  For clarity, the Target Notices shall not include more Targets than the Maximum Targets then available (taking into consideration any removed Targets previously reserved) and shall be deemed to be a request for an exclusive license at the outset unless there is a Pre-Existing Restriction. For clarity, CureVac’s rights to enter into a Non-Exclusive License Agreement shall apply only if the Pre-Existing Restriction permits a non-exclusive license right to such proposed Reserved Target.

	
 
	
(ii)
	
Notwithstanding the formal Target reservation mechanism described herein, Arcturus and the Escrow Agent will in good faith respond to any interim requests (not to exceed [...***...] per month) on whether certain Targets can be reserved as Reserved Targets prior to the monthly consideration date, in order to assist CureVac in planning of development projects.  For clarity, the interim requests shall not include more Targets than the Maximum Targets then available (taking into consideration any removed Targets previously reserved). In case of an interim request, the Escrow Agent (i) will request from Arcturus an update of the Reserved Target List, such update to be provided by Arcturus to the Escrow Agent within [...***...] Business Days of the request, and (ii) provide CureVac with a Target Response Notice in accordance with subsection (c).

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(c)Target Response Notices.

	
 
	
(i)
	
The Escrow Agent, on behalf of Arcturus, will review each Target Notice provided by CureVac hereunder to determine whether or not any such proposed Target is on the Restricted Target List and if listed, the applicable Pre-Existing Restriction as of the date of such Target Notice.  Within [...***...] days of the Escrow Agent’s receipt of a Target Notice, the Escrow Agent will provide CureVac with written notice that includes the information set forth in subsection (c)(ii) and (iii) (each such notice, a "Target Response Notice").

	
 
	
(ii)
	
If, as of the date of CureVac’s Target Notice for a Target, such Target is on the Restricted Target List and is listed as being subject to Pre-Existing Restrictions that restrict Arcturus from granting the applicable license (i.e., an exclusive or non-exclusive license in accordance with a License Agreement) to CureVac under the Arcturus LMD Technology with respect to such Target, then such Target shall not be available to become a Reserved Target. The Target Response Notice issued for such Target will certify to CureVac that such Target is on the Restricted Target List and is listed as being subject to Pre-Existing Restrictions that restrict Arcturus from granting the applicable license.

If, as of the date of CureVac’s Target Notice for a Target, such Target is not listed on the Restricted Target List, then such Target will become a Reserved Target and will be added to the Reserved Target List subject to the Concurrent Reserved List Limits set forth in subsection (d) below. To the extent that the Pre-Existing Restriction is non-exclusive, then such Target may be added by CureVac to Reserved Target List, but CureVac shall only have the option to enter into a Non-Exclusive License Agreement.

(d)Concurrent Reserved List Limits and Removal of Targets.  The following concurrent reserved list limits will apply to all Reserved Targets ("Concurrent Reserved List Limits").

	
 
	
(i)
	
Reserved Targets and Removal thereof. CureVac may select Reserved Targets up to the totals allowed for in subparagraph (ii) below, in accordance with the process specified in Sections 4.2(b) and (c). CureVac shall have the right to remove a Target or replace a Target on the Reserved Target List with another Target, in accordance with the process specified in Section 4.2(b), provided (A) the total number of Targets on the Reserved Target List does not exceed the Maximum Targets at any one time; and (B) a newly nominated Target is not on the Restricted Target List.  Any abandoned Target(s) revert(s) back to Arcturus. 

	
 
	
(ii)
	
Maximum Number Reserved Targets.  CureVac will have the right to select up to [...***...] Targets at any one time to be placed on the Reserved Target List as exclusive Reserved Targets; provided that the [...***...] total shall be reduced by each exercise of an Option (the “Maximum Targets”) (e.g., [...***...], with

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such reduction in the total Targets applying from and after the date of exercise of an Option. 

	
 
	
(iii)
	
For clarification, the selection of any program under the Co-Development Agreement shall not constitute the selection of a Target in accordance with this Section 4.2. If one of the Reserved Targets is selected for co-development under the Co-Development Agreement, such Reserved Target shall be removed from the Reserved Target List with the effect that CureVac shall be entitled to nominate a new Target in accordance with this Section 4.2.

4.3Expiration of Pre-Existing Restrictions.  If any Pre-Existing Restrictions identified in a Target Response Notice that precluded Arcturus from granting CureVac a license (whether or not CureVac has elected to designate such Target on the Reserved Target List on a non-exclusive basis subject to the Pre-Existing Restriction) under the Arcturus LMD Technology later expire or otherwise are modified or terminate such that Arcturus is no longer precluded under the terms of the applicable Third Party agreement from granting a license to CureVac with respect to such Target, the Escrow Agent will notify CureVac of such event and CureVac will have an exclusive option, for a period of [...***...] days following delivery of notice to CureVac, to add (or extend its rights as identified by the Escrow Agent with respect to) such Target to the Reserved Target List as a Reserved Target in accordance with Section 4.2(c), subject to the Concurrent Reserved List Limits.  For clarity, CureVac will at all times thereafter have the right to provide a Target Notice for such Target to the Escrow Agent pursuant to Section 4.2(b) but such Target Notice will be subject to any intervening Pre-Existing Restrictions. 

4.4Escrow Agent. Arcturus shall ensure that the Escrow Agent meets the requirements set forth herein.  All costs and expenses incurred through the Escrow Agent will be borne by Arcturus.

Article 5

CureVac License Options

5.1Option.  

(a)From the period commencing on the Effective Date and ending on the expiration of the Term (the "Option Period"), CureVac will have a total of [...***...] options (each, an "Option"), on a Reserved Target-by-Reserved Target basis, to enter into a maximum of [...***...] licenses under the Arcturus LMD Technology with respect to the development, manufacture and commercialization of Licensed Products containing mRNA Constructs intended to express such Reserved Target in the form of the License Agreement, provided, however, that 

	
 
	
(i)
	
to the extent the Reserved Target is only available on a non-exclusive basis, the Parties shall enter into a Non-Exclusive License Agreement, and

	
 
	
(ii)
	
the appendices to the License Agreement are to be prepared or updated for each specific Target, in accordance with the terms of this Agreement. 

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(b) CureVac may exercise each such Option by providing to Arcturus, prior to the expiration of the Term, irrevocable written notice of Option exercise, setting forth the particular Reserved Target which is intended to be expressed by the Licensed Products (each such notice, an "Option Notice"). A separate Option Notice and Option Exercise Fee will be required for each License Agreement with respect to which CureVac exercises an Option pursuant to this Section 5.1, and CureVac will pay to Arcturus the Option Exercise Fee for each such License Agreement as set forth in Section 5.3. If not exercised prior to the expiration of the Term, the Options granted to CureVac under this Article 5 will terminate in full and will no longer be exercisable. In the event that CureVac terminates a license(s) during the Term, the Target(s) subject to the license(s) will be removed from the Reserved Target List and the number of remaining Options and/or License Agreements shall be reduced by one (1) (i.e., the exercise of an Option reduces the total number of Options remaining by one regardless of whether CureVac elects to continue such License Agreement in effect).  

(c)In the event that CureVac terminates a License Agreement during the Term, no additional or replacement Options shall be granted or reinstated and the Target(s) subject to such license(s) will no longer be available as a Target pursuant to this Agreement.

5.2CureVac’s Exercise of Option.  As soon as practicable following CureVac’s delivery of an Option Notice to Arcturus but in any event within [...***...] Business Days, CureVac and Arcturus will enter into a License Agreement with respect to the Reserved Target for which such Option Notice is provided, provided, however, that if the Parties fail to prepare the appendices to the License Agreement in accordance with Section 5.1(a)(ii) within [...***...] Business Days following CureVac’s delivery of an Option Notice to Arcturus, the License Agreement with respect to the Reserved Target shall nevertheless enter into force (including payment obligations of CureVac in accordance with the terms of the License Agreement) and the Parties shall complete the appendices as soon as practicable thereafter.

5.3Option Exercise Fee.  If CureVac exercises its Option for a Rare Disease Target pursuant to Section 5.1, CureVac shall pay an Option Exercise Fee of [...***...]; and if CureVac exercises its Option for a Non-Rare Disease Target pursuant to Section 5.1, CureVac shall pay an Option Exercise Fee of [...***...], hereinafter both the "Option Exercise Fee". Within [...***...] Business Days after exercise of the Option for Licensed Product(s), Arcturus will issue an invoice to CureVac for the Option Exercise Fee. Each such payment will be subject to entry into the License Agreement and due within [...***...] days after CureVac's receipt of such invoice from Arcturus. 

5.4Co-Development Agreement. For clarification, the selection of any program under the Co-Development Agreement shall not constitute the exercise of an Option in accordance with this Section 5, and, accordingly, no Option Exercise Fee will be payable and any paid Option Exercise Fee shall credited against any other payments by CureVac applied first to any outstanding payment obligations to Arcturus, and to the extent any remaining amounts remain creditable, then to the next due future payment obligations.

5.5Enablement. Arcturus will (a) with respect to any Reserved Targets, during the Term remain entitled to grant to CureVac the licenses to the Patents and the Know-How within the Arcturus Background Technology under a License Agreement, and (b) subject to the unrestricted rights of Arcturus and its Affiliates to grant to a Third Party a non-exclusive, co-

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

exclusive or an exclusive license or option with respect to a Target, use reasonable efforts to allow the potential for License Agreements to be available for Targets identified by CureVac to Arcturus for research and for election to become a Reserved Target pursuant to this Agreement during the Term.  

Article 6

Background Technology; Ownership of Program Technology

6.1Disclosure of Program Know-How.  Each Party will promptly (and at least on a Calendar Quarterly basis) disclose to the other Party any Program Know-How that is created, conceived or reduced to practice by or on behalf of such Party and owned by the other Party pursuant to Section 6.2(c), and will provide such documentation regarding the Program Know-How as such other Party may reasonably request. 

6.2Ownership.

(a)CureVac Background Technology.  As between the Parties, CureVac will continue to own all right, title and interest in and to the CureVac Background Technology.

(b)Arcturus Background Technology.  As between the Parties, Arcturus will continue to own all right, title and interest in and to the Arcturus Background Technology.

(c)Program Technology. 

	
 
	
(i)
	
Except as set forth in subsections (iii) and (iv) below, each Party will solely own all right, title and interest in and to all Program Technology that is discovered, created, conceived, developed or reduced to practice solely by or on behalf of such Party ("Solely-Owned Program Know-How"), and all Patents arising therefrom that claim such Solely-Owned Program Know-How ("Solely-Owned Program Patents" and together with the Solely-Owned Program Know-How, the "Solely-Owned Program Technology") and all right, title and interest in and to all Solely-Owned Technology will automatically vest solely in such Party. For clarity, Solely-Owned Program Technology shall not exist with respect to any Dual Improvement Technology and in the event of any conflict, such Know-How and Patents shall be deemed Dual Improvement Technology.

	
 
	
(ii)
	
Except as set forth in subsections (i) above and (iii) below, the Parties will jointly own in equal share any and all Program Technology that is not Sole Improvement Technology or that is Dual Improvement Technology ("Jointly-Owned Program Technology").  All Know-How in Jointly-Owned Program Technology shall be referred to as "Jointly-Owned Program Know-How" and all Patents in Jointly-Owned Program Technology shall be referred to as "Jointly-Owned Program Patents".  Each Party will have an undivided one-half interest in and to such Jointly-Owned Program Technology. 

24

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Arcturus will have a right to grant licenses (with the right to grant sublicenses through multiple tiers) to CureVac's share in such Jointly-Owned Program Technology to exercise and exploit the Arcturus LMD Technology, provided, however, that 

(A)Arcturus shall not have the right to grant licenses to Jointly-Owned Program Know-How and Jointly-Owned Program Patents with respect to mRNA Constructs or DNA Targets to a Third Party 

(x) prior to and within the first [...***...] immediately following the filing of the respective Jointly-Owned Program Patent without CureVac's prior written consent and 

(y) during [...***...] after the period specified in (a), without offering to CureVac the first right to obtain such license(s) on substantially similar financial and other terms and conditions agreed with the Third Party, such right to be exercised by CureVac within [...***...] days following CureVac’s receipt of a written notification from Arcturus about its intention to grant such license(s) to a Third Party, such notification to include the material financial and other terms and conditions of such license and other material information relevant for such license(s); and

(B)CureVac will have a right to grant licenses (with the right to grant sublicenses through multiple tiers) to Arcturus' share in such Jointly-Owned Program Technology to exercise or exploit the CureVac Technology and the Program Technology, which license grant may be exclusive with respect to a Licensed Product only pursuant to a License Agreement, 

i.e., subject to (A) and (B) above, neither Party is to be blocked or limited in the use of or rights to license and sublicense its own Technology by Jointly-Owned Program Technology; the Parties agree that the licenses (as between the Parties) to the respective other Party's share in such Jointly-Owned Program Technology shall be perpetual, irrevocable, non-exclusive, cost-free license, subject to the licenses hereunder or under any License Agreement. 

The Jointly-Owned Program Technology shall be assignable only (A) with the applicable, rights, restrictions and obligations in this Agreement and (B) subject to notification from the assigning Party to the other Party about the assignment and a written confirmation from the assignee to be bound by the applicable, rights, restrictions and obligations in this Agreement with respect to the assigned Jointly-Owned Program Technology. In any event, the ownership rights in Jointly-Owned Program Technology remain subject to the licenses hereunder or under any License 

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Agreement, other intellectual property rights of the other Party and the other terms and conditions of this Agreement. 

To the extent any Jointly-Owned Program Technology is discovered, created, conceived, developed or reduced to practice solely or predominantly by or on behalf of one Party, then such Party, for itself and on behalf of its and its Affiliates’ employees, subcontractors (subject to Section 3.4), consultants and agents, hereby assigns, a share of its interest in and to such Jointly-Owned Program Technology to the other Party, so that each Party owns an undivided one-half interest.

	
 
	
(iii)
	
Notwithstanding subsections (i) and (ii) above, 

(A)Arcturus will solely own any Program Improvement Technology that is Sole Improvement Technology to any Arcturus Background Technology, regardless of the Party or Parties such Sole Improvement Technology was discovered, created, conceived, developed or reduced to practice by or on behalf of, and CureVac, for itself and on behalf of its and its Affiliates’ employees, subcontractors (subject to Section 3.4), consultants and agents, hereby assigns all of its rights, title and interest in such Sole Improvement Technology to Arcturus.  

(B)CureVac will solely own any Program Improvement Technology that is Sole Improvement Technology to any CureVac Background Technology, regardless of the Party or Parties such Sole Improvement Technology was discovered, created, conceived, developed or reduced to practice by or on behalf of, and Arcturus, for itself and on behalf of its and its Affiliates’ employees, subcontractors (subject to Section 3.4), consultants and agents, hereby assigns, all of its rights, title and interest in such Sole Improvement Technology to CureVac.

(C)For clarity, nothing herein shall prevent (1) Arcturus from independently developing, owning and using outside of a Program any Know-How that is similar or related to any CureVac Technology, and (2) CureVac from independently developing, owning and using outside of a Program any Know-How that is similar or related to any Arcturus LMD Technology, provided that in each case such Know-How is not developed based upon, using or with reference to CureVac Technology or Arcturus LMD Technology, respectively. All of the respective independently developed intellectual property pursuant to this Section (iii)(C) shall be deemed Arcturus Background Technology and CureVac Background Technology, respectively.

	
 
	
(iv)
	
Dual Improvements. To the extent that a particular item of Program Technology constitutes Dual Improvement Technology, the Parties shall discuss in good faith whether any such Dual Improvement Technology can be divided, assigned and owned in accordance with 

26

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

subsection (iii) (A) and (B) above, or made subject to separate Patent filings to be assigned accordingly; and to the extent no such division is possible, the Dual Improvement Technology shall be treated as Jointly-Owned Program Technology in accordance with Section 6.2(c)(ii).

	
 
	
(v)
	
Each Party hereby agrees to take, upon the request of the other Party, any reasonable action to implement and give effect to the assignments and grants that the Parties intended, or a Party agreed to make, in this Section 6.2(c), including, without limitation, executing any assignment document and other documentation, provide any testimony, and provide any other assistance. 

6.3Inventorship.  

(a)Inventorship determination for all Program Technology, including Patents worldwide arising from any Program Know-How, will be made in accordance with applicable patent laws. Notwithstanding the previous sentence, ownership determinations for all Program Technology, as between the Parties, will be made in accordance with Section 6.2(c). 

(b)Each Party will ensure that each employee, consultant and each subcontractor conducting any activities under this Agreement on behalf of such Party will be subject to written agreements to assign to such Party all of its right, title and interest in and to the Program Technology so that such Party can comply with its obligations with respect to the ownership allocation of the Program Technology as set forth above.  In addition, each Party shall be solely responsible for payments that may be required to any of such Party’s employees or consultants and subcontractors in connection with or with respect to such agreements, including moral rights payments. 

6.4Prosecution and Maintenance.

(a)IP Subcommittee. The JDC shall establish a subcommittee regarding the Arcturus Background Technology and the Program Technology (“IP Subcommittee”). Sections 2.3(a) and (b) shall apply accordingly to the IP Subcommittee. In particular, in the IP Subcommittee, each Party shall

	
 
	
(i)
	
promptly notify the other Party with respect to all developments regarding the Arcturus Background Technology and the Program Technology significant for the development under any Work Plan and/or all developments that would reasonably be considered to negatively impact the rights of CureVac pursuant to this Agreement or any License Agreement, 

	
 
	
(ii)
	
provide to the other Party information about the status of and the general strategy in relation to Patents with respect to Programs included in the Arcturus Background Technology, CureVac Background Technology and Program Technology as may be applied to any Program or potential Licensed Product in order to enable the other Party to provide input regarding the strategy for the prosecution of such Patents with a view to enabling potential Licensed Products and/or enhancing 

***Confidential Treatment Requested

27

the potential strength of the Arcturus Background Technology and Program Technology generally, and 

	
 
	
(iii)
	
to directly or through appropriately qualified designees, consult with the prosecuting Party and its counsel regarding prosecution and maintenance of any such Patents as may be applied to any Program or potential Licensed Products without the requirement of a meeting of the IP Subcommittee, it being understood that in such consultation the prosecuting Party shall take the other Party’s comments reasonably into account, provided, however, that the prosecuting Party will have the right to make the final determination in the event of any disagreement between the Parties related to any decision in connection with the filing, prosecution and maintenance of such Patents.

For clarity, the discussions regarding the general strategy and any particular Patents shall not require either Party to disclose the confidential information of any Third Party whose rights, information or data may be implicated in any such Patents or Know-How.

(b)CureVac Patents.  As between the Parties, CureVac shall have the sole right, but not the obligation, to file, prosecute, and maintain (at its sole expense) Patents within CureVac Background Technology and Sole Improvement Technology to any CureVac Background Technology (collectively “CureVac Sole Patents”) at its sole expense.

(c)Arcturus Patents.  

	
 
	
(i)
	
Subject to the remainder of this Section 6.4 and to any License Agreement, as between the Parties, Arcturus shall have the sole right, but not the obligation, to file, prosecute, and maintain (at its sole expense) Patents within Arcturus Background Technology and Sole Improvement Technology to any Arcturus Background Technology (collectively “Arcturus Sole Patents”) at its sole expense.

	
 
	
(ii)
	
In relation to Patents within Sole Improvement Technology with respect to which CureVac has delivered an Option Notice, if Arcturus intends to abandon such Patent, it shall notify CureVac sufficiently in advance, and subject to any License Agreement, CureVac shall have the right to take over ownership of and prosecute, maintain such Patent at its sole expense, which Patent shall then be considered a CureVac Program Patent. 

	
 
	
(iii)
	
Arcturus shall, during the Term, based on information with respect to Targets and Reserved Targets disclosed by CureVac to Arcturus and existing Programs, use Diligent Efforts to enable the rights to the Options (and License Agreements) available to CureVac pursuant to this Agreement; provided that nothing herein shall limit the rights of Arcturus and Affiliates to grant to a Third Party a non-exclusive, co-exclusive or an exclusive license or other option with respect to any Target that is not a Reserved Target or otherwise subject to a License Agreement.

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

(d)Jointly-Owned Program Patents.  Subject to the remainder of this Section 6.4 and to any License Agreement, CureVac will have the first right, but not the obligation to file, prosecute, and maintain Jointly-Owned Program Patents, and the Parties shall share equally all costs incurred by CureVac in connection with such efforts.  CureVac shall, regarding the Jointly-Owned Program Patents, 

	
 
	
(i)
	
promptly notify Arcturus in writing with respect to all significant developments, 

	
 
	
(ii)
	
provide Arcturus with drafts of each material filing (including without limitation draft patent applications and responses to office actions and similar filings) for all such Patents, 

	
 
	
(iii)
	
provide to Arcturus all other material submissions and correspondence with any patent authorities regarding such Patents, in sufficient time in advance of the anticipated filing date (not to be less than [...***...] days) to allow for review and comment by Arcturus

	
 
	
(iv)
	
provide Arcturus and its counsel with an opportunity to consult with CureVac and its counsel regarding prosecution and maintenance of any such Jointly-Owned Program Patents, and shall, prior to filing, revise such documents to reflect Arcturus’s reasonable comments, provided that CureVac will have the right to make the final determination in the event of any disagreement between the Parties

related to any decision in connection with the filing, prosecution and maintenance of such Jointly-Owned Program Patents. 

	
 
	
(v)
	
If CureVac intends to abandon such Jointly-Owned Program Patent, it shall notify Arcturus sufficiently in advance, and subject to any License Agreement, Arcturus shall have the right to take over ownership of and prosecute, maintain such Patent at its sole expense, which Patent shall then be considered an Arcturus Sole Patent.

(e)Information Regarding Arcturus Patents. Arcturus will provide semi-annual updates on the status of the Arcturus Sole Patents with respect to any Programs and Reserved Targets during the Term. 

(f)Cooperation. Each Party will reasonably cooperate with the other Party in the prosecution and maintenance of the Patents within the Program Technology.  Such cooperation includes promptly executing all documents, or requiring inventors, subcontractors, employees and consultants to execute all documents, as reasonable and appropriate so as to enable the prosecution and maintenance of any such Patents in any country. 

6.5Patent Enforcement and Defense. 

(a)Notice.  To the extent not in breach of an obligation of confidentiality, 

	
 
	
(i)
	
Arcturus will promptly notify, in writing, CureVac upon learning of any actual or suspected infringement of any CureVac Sole Patents and Jointly-Owned Program Patents by a Third Party, or of any claim of 

***Confidential Treatment Requested

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

invalidity, unenforceability, or non-infringement of any such Patents, and will, along with such notice, supply CureVac with any evidence in its possession pertaining thereto, and

	
 
	
(ii)
	
CureVac will promptly notify Arcturus, in writing, upon learning of any actual or suspected infringement of any Arcturus Sole Patents by a Third Party, or of any claim of invalidity, unenforceability, or non-infringement of any such Patents, and will, along with such notice, supply Arcturus with any evidence in its possession pertaining thereto.

(b)Enforcement. As between the Parties and subject to any License Agreement, 

	
 
	
(i)
	
Arcturus will have the sole right, but not the obligation, to seek to abate any infringement of the Arcturus Sole Patents by a Third Party, or to file suit against any such Third Party for such infringement, provided that Arcturus shall bear all the expense of such suit or abatement of infringement, and

	
 
	
(ii)
	
CureVac will have the sole right, but not the obligation, to seek to abate any infringement of the CureVac Sole Patents and Jointly-Owned Program Patents by a Third Party, or to file suit against any such Third Party for such infringement; provided that CureVac shall bear all the expense of such suit or abatement of infringement.  

(c)Defense.  As between the Parties and subject to any License Agreement, Arcturus will have the sole right, but not the obligation, to defend against a declaratory judgment action or other action challenging any Arcturus Sole Patents and Jointly-Owned Program Patents; provided that Arcturus shall bear all the expense of such defense.  As between the Parties and subject to any License Agreement, CureVac will have the sole right, but not the obligation, to defend against a declaratory judgment action or other action challenging the CureVac Patents; provided that CureVac shall bear all the expense of such defense.  

(d)Withdrawal, Cooperation and Participation.  With respect to any infringement or defensive action identified above in this Section 6.5 which may be controlled by either CureVac or Arcturus, and subject to any License Agreement:

	
 
	
(i)
	
If the controlling Party ceases to pursue or withdraws from such action, it will promptly notify the other Party (in good time to enable the other Party to meet any deadlines by which any action must be taken to preserve any rights in such infringement or defensive action) and such other Party may substitute itself for the withdrawing Party, shall be granted the right and standing to sue in the other Party's name, and proceed under the terms and conditions of this Section 6.5.

	
 
	
(ii)
	
The non-controlling Party will cooperate with the Party controlling any such action (as may be reasonably requested by the controlling Party), including (A) providing access to relevant documents and other evidence, (B) making its and its Affiliates and licensees and sublicensees and all of their respective employees, subcontractors, 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

consultants and agents available at reasonable business hours and for reasonable periods of time, but only to the extent relevant to such action, and (C) if necessary, by being joined as a party, subject for this clause (C) to the controlling Party agreeing to indemnify such non-controlling Party for its involvement as a named party in such action and paying those reasonable, documented, out-of-pocket costs and expenses paid to outside legal counsel, and filing and maintenance expenses, actually and reasonably incurred by a Party in prosecuting and maintaining Patents and enforcing and defending them, incurred by such Party in connection with such joinder.  The Party controlling any such action will keep the other Party updated with respect to any such action, including providing copies of all documents received or filed in connection with any such action.

	
 
	
(iii)
	
Each Party will have the right to participate or otherwise be involved in any such action controlled by the other Party, in each case at the participating (i.e., non-controlling) Party’s sole cost and expense.  If a Party elects to so participate or be involved, the controlling Party will provide the participating Party and its counsel with an opportunity to consult with the controlling Party and its counsel regarding the prosecution of such action (including reviewing the contents of any correspondence, legal papers or other documents related thereto), and the controlling Party will take into account reasonable requests of the participating Party regarding such enforcement or defense.

(e)Settlement.  Neither Party will settle or consent to an adverse judgment in any action described in this Section 6.5 and controlled by such Party, including any judgment which affects the scope, validity or enforcement of any Patents owned by the other Party, without the prior written consent of the other Party (such consent not to be unreasonably withheld, delayed or conditioned).

(f)Damages.  Unless otherwise agreed by the Parties, all monies recovered upon the final judgment or settlement of any action which may be controlled by either CureVac or Arcturus and described in Section 6.5 in each case will be used first to reimburse the controlling Party, then the non-controlling Party, for each of their out-of-pocket costs and expenses relating to the action, with the balance of any such recovery to be retained by the controlling Party. 

6.6Updates.  Arcturus shall inform CureVac within [...***...] Business Days in writing of any significant developments with respect the Arcturus Program Technology that would reasonably be considered to negatively impact the rights of CureVac pursuant to this Agreement or any License Agreement.

Article 7

Confidentiality

7.1Confidential Information.  Each Party ("Disclosing Party") may disclose to the other Party ("Receiving Party"), and Receiving Party may acquire during the course and conduct of activities under the Agreement, certain Confidential Information of Disclosing Party 

***Confidential Treatment Requested

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

in connection with this Agreement.  Notwithstanding the foregoing, either Party may use and disclose Jointly-Owned Program Technology in connection with such Party's permitted exploitation of such Technology, provided that the recipient is bound by confidentiality obligations corresponding to the obligations under this Agreement with respect to the subject matter of this Agreement.

7.2Restrictions.  During the Term and for [...***...] years thereafter, Receiving Party will keep all Disclosing Party’s Confidential Information in confidence with the same degree of care with which Receiving Party holds its own confidential information, but in no event less than reasonable care.  Receiving Party will not use Disclosing Party’s Confidential Information except for in connection with the performance of its obligations and exercise of its rights under this Agreement or any License Agreement.  Receiving Party has the right to disclose Disclosing Party’s Confidential Information without Disclosing Party’s prior written consent to Receiving Party’s Affiliates, and each of their employees, subcontractors (subject to Section 3.4) and consultants or agents who have a need to know such Confidential Information in order to perform its obligations and exercise its rights under this Agreement or any License Agreement and who are under written obligation to comply with the restrictions on use and disclosure that are no less restrictive than those set forth in this Article 7.  Receiving Party assumes responsibility for such entities and persons maintaining Disclosing Party’s Confidential Information in confidence and using same only for the purposes described herein.

7.3Exceptions.  Receiving Party’s obligation of nondisclosure and the limitations upon the right to use the Disclosing Party’s Confidential Information will not apply to a specific portion of the Disclosing Party’s Confidential Information to the extent that Receiving Party can demonstrate that such portion: (i) was known to Receiving Party or any of its Affiliates prior to the time of disclosure by the Disclosing Party without obligation of confidentiality; (ii) is or becomes public knowledge through no fault or omission of Receiving Party or any of its Affiliates; (iii) is obtained on a non-confidential basis by Receiving Party or any of its Affiliates from a Third Party who to Receiving Party’s knowledge is lawfully in possession thereof and under no obligation of confidentiality to Disclosing Party; or (iv) has been independently developed by or on behalf of Receiving Party or any of its Affiliates without the aid, application or use of Disclosing Party’s Confidential Information as documented by the internal records of the Receiving Party.

7.4Permitted Disclosures.  The Receiving Party may only use any such Confidential Information for the purposes of performing its obligations or exercising its rights under this Agreement. Notwithstanding the obligations set forth in Sections 7.1 and 7.2, a Party may disclose the other Party’s Confidential Information (including this Agreement and the terms herein) in the following instances to the extent reasonably required:

(a)in order to comply with applicable Law (including any securities Law or regulation or the rules of a securities exchange) or with a legal or administrative proceeding;

(b)in connection with prosecuting or defending litigation, and filing, prosecuting and enforcing Patents in connection with Receiving Party’s rights and obligations pursuant to this Agreement or a License Agreement; 

(c)to attorneys, accountants, auditors, acquirers, licensees, partners, permitted assignees, financial advisors, investors and lenders, including potential acquirers, licensees, partners, assignees, financial advisors, investors and lenders;

***Confidential Treatment Requested

32

provided that (1) where reasonably possible, Receiving Party will notify Disclosing Party of Receiving Party’s intent to make any disclosure pursuant to subsections (a) and (b) sufficiently prior to making such disclosure so as to allow Disclosing Party reasonably adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed, and (2) with respect to subsection (c), each of those persons or entities are required to comply with the restrictions on use and disclosure in Section 7.2 (other than financial advisors, investors and lenders, which must be bound prior to disclosure by commercially reasonable obligations of confidentiality).

7.5Return of Confidential Information. Upon expiry or earlier termination of the Agreement, upon written request of a Party (such request, if made, to be made within [...***...] months of such expiry or termination) the other Party will destroy or return (as shall be specified in such request) to the requesting Party all copies of the Confidential Information of the requesting Party; provided that the Party may retain: (i) one copy of such Confidential Information for record-keeping purposes, for the sole purpose of ensuring compliance with this Agreement; (ii) any copies of such Confidential Information as is required to be retained under applicable Law; (iii) any copies of such Confidential Information as is necessary or useful for such Party to exercise a right or fulfill an obligation under a License Agreement, if any, or as set forth in this Agreement; and (iv) any copies of any computer records and files containing Confidential Information that have been created by such Party’s routine archiving/backup procedures. Upon request of the requesting Party, the Receiving Party shall confirm in writing to the requesting Party the destruction or return of all copies of the Confidential Information of the requesting Party.

7.6Publications.  Notwithstanding anything in this Agreement to the contrary, Arcturus shall be permitted to publish the results of a Program only with the prior written consent of CureVac.  Arcturus shall submit any proposed publication of the results of a Program to CureVac. Following receipt of the proposed publication by CureVac, CureVac will use Diligent Efforts to provide written approval or disapproval, at CureVac’s discretion, within [...***...] days.  Expedited reviews for abstracts or poster presentations, or for other publications that may relate to potential patent applications, may be arranged if mutually agreeable to the Parties. CureVac is permitted to publish the results of a Program provided, however, that it will not disclose Arcturus Confidential Information in any publication by CureVac of the results of a Program or any Licensed Product development by CureVac without Arcturus’ prior written consent, which will not be unreasonably withheld, conditioned or delayed in the event such Arcturus Confidential Information is reasonably required to support the results of a Program so published.  

7.7Terms of this Agreement; Press Release.  The Parties agree that the existence and terms of the Parties’ relationship and this Agreement will be treated as Confidential Information of both Parties, and thus may be disclosed only as permitted by Section 7.4.  Except as mutually agreed or otherwise required by Law or securities exchange regulation, each Party agrees not to issue any press release or public statement disclosing information relating to the existence of this Agreement or the transactions contemplated hereby or the terms hereof without the prior written consent of the other Party. 

Article 8

***Confidential Treatment Requested

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Warranties; Limitations of Liability; Indemnification

8.1Representations and Warranties.  Each Party represents and warrants to the other as of the Effective Date that (a) it is a corporation duly organized, validly existing, and in good standing under the Laws of the jurisdiction in which it is incorporated, (b) it has the legal right and power to enter into this Agreement, to extend the rights and licenses granted or to be granted to the other in this Agreement, and to fully perform its obligations hereunder, (c) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder (d) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms, and (e) the execution, delivery and performance by a Party of this Agreement and the consummation of the transactions contemplated hereby will not result in any violation of, conflict with, result in a breach of or constitute a default under any understanding, contract or agreement to which such Party is a party or by which it is bound.

8.2Additional Representations and Covenants of Arcturus.  Arcturus hereby represents and warrants to CureVac as of the Effective Date as follows: 

(a)Impairment. Neither Arcturus nor any of its Affiliates has entered into any agreement or otherwise licensed, granted, assigned, transferred, conveyed or 

otherwise encumbered or disposed of any right, title or interest in or to any of its assets, including any intellectual property rights including Know-How, that (i) conflicts with or impairs the scope of any rights or licenses granted to CureVac hereunder or (ii) to the knowledge of Arcturus, would otherwise conflict with or limit rights that would be granted to CureVac under any License Agreement. 

(b)Patents.  Exhibit 1.3 sets forth a complete and accurate list of all Patents included in the Arcturus Background Technology, indicating any licensor and/or co-owner(s), if applicable.  Arcturus is entitled to grant to CureVac the licenses to the Patents and the Know-How within the Arcturus Background Technology for the purposes of this Agreement, including to enter into a License Agreement, subject to the rights of Arcturus and its Affiliates to grant to a Third Party a non-exclusive, co-exclusive or an exclusive license or option with respect to a Target.  To Arcturus’ knowledge, the Patents listed on Exhibit 1.3 have been procured or are being procured from the respective patent offices in accordance with applicable Law.  None of the Patents included in the Arcturus Background Technology listed on Exhibit 1.3 is or has been involved in any opposition, cancellation, interference, reissue or reexamination proceeding, and to Arcturus’ knowledge as of the Effective Date, no Arcturus Background Technology is the subject of any judicial, administrative or arbitral order, award, decree, injunction, lawsuit, proceeding or stipulation.  As of the Effective Date, neither Arcturus nor any of its Affiliates has received any notice alleging that the Patents in the Arcturus Background Technology listed on Exhibit 1.3 are invalid or unenforceable, or challenging Arcturus’ ownership of or right to use any such rights.

(c)Arcturus LMD Technology. The Arcturus LMD Technology licensed to CureVac under this Agreement comprises all Arcturus LMD Technology Controlled by Arcturus (i) which is necessary or useful for purposes of this Agreement and (ii) to the knowledge of Arcturus, which would be necessary or useful for purposes of a License Agreement.

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

(d)Encumbrances. It has the right to grant the license and rights herein to CureVac and it has not granted any liens, security interest, encumbrance, license, right or interest in, to or under the Arcturus Background Technology to any Third Party that is inconsistent with the license granted to CureVac under Section 3.1.

(e)Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Arcturus, currently threatened against or affecting Arcturus that questions the validity of this Agreement or the right of Arcturus to enter into this Agreement or consummate the transactions contemplated hereby or that relates to the Arcturus LMD Technology.

(f)Infringement.  Neither Arcturus nor any of its Affiliates has received any written notice of any claim that, nor does Arcturus or its Affiliates have any knowledge of any claim, any Patent, Know-How or other intellectual property owned or controlled by a Third Party would be infringed or misappropriated by the practice of any Arcturus LMD Technology (i) in connection with the performance of this Agreement and (ii) to the knowledge of Arcturus, with respect to any product under a License Agreement.

(g)Third Party Infringement. To Arcturus' knowledge, no Third Party is infringing or has infringed any Patent within the Arcturus LMD Technology or is misappropriating or has misappropriated any Know-how within the Arcturus LMD Technology.

8.3Mutual Covenants.

(a)No Debarment.  In the course of the performance by the Parties, neither Party nor its Affiliates shall use any employee or consultant who has been debarred by any regulatory authority or, to such Party’s or its Affiliates’ knowledge, is the subject of debarment proceedings by a regulatory authority.  Each Party shall notify the other Party promptly upon becoming aware that any of its or its Affiliates’ employees or consultants has been debarred or is the subject of debarment proceedings by any regulatory authority.

(b)Compliance.  Each Party and its Affiliates shall comply in all material respects with all applicable Laws (including all anti-bribery laws) in the performance of its obligations under this Agreement.

8.4No Other Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 8, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF arcturus or curevac; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, POTENTIAL FOR SUCCESS OF A PROGRAM, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.   

8.5No Consequential Damages.  Notwithstanding anything in this Agreement or otherwise, neither Party will be liable to the other or any Third Party with respect to any subject matter of this Agreement for any indirect or consequential damages, provided that this Section 8.5 will not apply to breaches of Article 6 or 7 or the Parties’ indemnification rights or obligations under Section 8.7, or in the event of willful misconduct.

 

35

8.6Performance by Others.  The Parties recognize that each Party may perform some or all of its obligations under this Agreement through Affiliates, permitted subcontractors or other permitted Third Parties, provided, however, that each Party will remain fully responsible and liable for the performance by its Affiliates and/or permitted subcontractors and Third Parties and will cause its Affiliates, permitted subcontractors or other permitted Third Parties to comply with the provisions of this Agreement in connection therewith.

8.7Indemnification.

(a)Indemnification by Arcturus.  Arcturus will indemnify CureVac, its Affiliates and their respective directors, officers, employees, Third Party licensors and agents, and their respective successors, heirs and assigns (collectively, "CureVac Indemnitees"), and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, "Losses") in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, "Third Party Claims") against the CureVac Indemnitees to the extent arising from or occurring as a result of: 

 

(i) the breach of any representation or warranty by Arcturus under this Agreement; or (ii) any gross negligence or willful misconduct on the part of any Arcturus Indemnitee; or (iii) any alleged infringement or misappropriation of Patents or other intellectual property rights by CureVac in the conduct of the Work Plan based solely on CureVac’s use of Arcturus LMD Technology as permitted hereunder (excluding, for clarity, infringement of Patents, Know-How or Materials covering CureVac Technology used by CureVac in the performance of the Work Plan), except in each of cases (i)-(iii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of a CureVac Indemnitee or CureVac’s breach of this Agreement.

(b)Indemnification by CureVac.  CureVac will indemnify Arcturus, its Affiliates and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, "Arcturus Indemnitees"), and defend and hold each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims against Arcturus Indemnitees to the extent arising from or occurring as a result of: (i) the breach by CureVac of any representation or warranty under this Agreement; or (ii) any gross negligence or willful misconduct on the part of any CureVac Indemnitee; or (iii) any alleged infringement or misappropriation of Patents or other intellectual property rights by Arcturus in the conduct of the Work Plan based solely on Arcturus’ use of CureVac Technology as permitted hereunder (excluding, for clarity, infringement of Arcturus LMD Technology used by Arcturus in the performance of the Work Plan), except in each of cases (i)-(iii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this Agreement.

(c)Notice of Claim.  All indemnification claims provided for in subsections (a) and (b) above will be made solely by such Party to this Agreement (the "Indemnified Party").  The Indemnified Party will promptly notify the indemnifying Party (an "Indemnification Claim Notice") of any Losses or the discovery of any fact upon which the Indemnified Party intends to base a request for indemnification under subsections (a) or (b) above but in no event will the indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice 

 

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Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party will furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

(d)Defense, Settlement, Cooperation and Expenses.

	
 
	
(i)
	
Control of Defense.  At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within [...***...] days after the indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third Party Claim by the indemnifying Party will not be construed as an acknowledgment that the indemnifying Party is liable to 

indemnify the Indemnified Party in respect of the Third Party Claim, nor will it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party (the indemnifying Party will consult with the Indemnified Party with respect to such legal counsel and a possible conflict of interest of such counsel retained by the indemnifying Party).  In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party will as soon as practicable deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party will reimburse the indemnifying Party for any and all costs and expenses (including reasonable attorneys’ fees and costs of suit) and any Third Party Claims incurred by the indemnifying Party in its defense of the Third Party Claim.

	
 
	
(ii)
	
Right to Participate in Defense.  Without limiting subsection (i) above, any Indemnified Party will be entitled to participate in, but not control, the defense of such Third Party Claim and to engage counsel of its choice for such purpose; provided, however, that such engagement will be at the Indemnified Party’s own cost and expense unless (A) the indemnifying Party has failed to promptly assume the defense and engage counsel in accordance with subsection (i) above (in which case the Indemnified Party will control the defense) or (B) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under applicable Law, ethical rules or equitable principles, in which case the indemnifying Party will assume one hundred percent (100%) of any reasonable costs and expenses of counsel for the Indemnified Party.

	
 
	
(iii)
	
Settlement.  With respect to any Third Party Claims that relate solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnified Party’s becoming subject 

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37

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

to injunctive or other relief or otherwise adversely affecting the business, Patents or Technology of the Indemnified Party in any manner, and as to which the indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, will deem appropriate.  With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with subsection (i) above, the indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld, conditioned or delayed).  The indemnifying Party will not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the written consent of the indemnifying Party.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party.

	
 
	
(iv)
	
Cooperation.  Regardless of whether the indemnifying Party chooses to defend any Third Party Claim, the Indemnified Party will, and will use Diligent Efforts to cause each other indemnified party to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith at the indemnifying Party’s expense.  Such cooperation will include access during normal business hours afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.

	
 
	
(v)
	
Costs and Expenses.  Except as provided above in this Section 8.7, the costs and expenses, including reasonable attorneys’ fees and expenses, incurred by the Indemnified Party in connection with any claim will be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

8.8Insurance.  Each Party will maintain at its sole cost and expense, an adequate liability insurance or self-insurance program to protect against potential liabilities and risk 

 

38

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

arising out of activities to be performed under this Agreement and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the respective industry of such Party for the activities to be conducted by such Party under this Agreement.  The coverage limits set forth in any such programs or policies will not create any limitation on a Party’s liability to the other under this Agreement. 

Article 9

Term and Termination

9.1Term.  

(a)This Agreement will commence as of the Effective Date and, unless sooner terminated or extended in accordance with the terms hereof or by mutual written consent, will continue for a period of eight (8) years (the "Initial Term", as may be extended pursuant to Section 9.1(b), the “Term”).  

(b)Not later than sixty (60) days prior to the expiration of the Initial Term, CureVac shall have the option to extend the Term on an annual basis for up to three (3) years, by providing written notice to Arcturus, subject to payment by CureVac to Arcturus of a non-refundable annual extension fee of [...***...], payable within [...***...] Business Days after exercise of such option. 

(c)The Parties agree that this Agreement and the Co-Development Agreement relate to different projects and, therefore, the validity, term and termination of this Agreement shall be independent from the validity, term and termination of the Co-Development Agreement.

9.2Termination by CureVac.

(a)Breach, Change of Control.  CureVac will have the right to terminate this Agreement in full or on a Program-by-Program basis upon delivery of written notice to Arcturus in the event of 

	
 
	
(i)
	
any material breach by Arcturus 

(A)of any terms and conditions of this Agreement, provided that such breach has not been cured within sixty (60) days after written notice thereof is given by CureVac to Arcturus specifying in reasonable detail the nature of the alleged breach; or 

(B)in particular the failure of the Escrow Agent to send the Target response notice within the period provided for in Section 4.2(c)(i), provided that such failure has not been cured neither within a first cure period of five (5) Business Days after written notice thereof is given by CureVac to Arcturus nor within a second cure period of five (5) Business Days after written notice of the lapse of the first cure period is given by CureVac to Arcturus, or 

***Confidential Treatment Requested

39

	
 
	
(ii)
	
a Change of Control of Arcturus. 

In the event of a termination of this Agreement or a Program under this subsection, (i) the JDC will be disbanded or, if applicable, cease to be responsible for the terminated Programs, (ii) Arcturus will receive no further Arcturus FTE funding (if applicable, for the terminated Programs), and (iii) Arcturus will conduct a technology transfer of Arcturus Technology existing at the time of such transfer and provide necessary licenses to CureVac or its Third Party designee each as reasonably necessary for CureVac or such Third Party designee to complete the conduct of a Program, and (iv) the Option Exercise Fee and the payments under the License Agreement(s) (if

applicable, in relation to the terminated Programs) will be reduced by [...***...]%. For avoidance of doubt, termination of the Agreement or a Program will not terminate CureVac’s reservation of Reserved Targets or the Options subject to the payments associated therewith. For clarity, except in cases of willful misconduct, the remedy set forth in this Section 9.2(a) shall be the sole and exclusive remedy of CureVac under this Agreement (i.e., without limitation of any remedies that may be separately available under any License Agreement) in the event that CureVac elects to terminate a Program but otherwise continue the Agreement in effect.

In the event of a Change of Control of Arcturus, CureVac shall decide, no later than the later of: (i) ten (10) Business Days’ written notice following the receipt of a written notification that the closing date of such Change of Control has occurred or (ii) [...***...] months written notice following the receipt of a written notification that the signing date of such Change of Control has occurred, to (a) terminate this Agreement, (b) to continue this Agreement and elect (as set forth in such written notice) to have the JDC disbanded and Arcturus to undertake a technology transfer and provide necessary licenses to CureVac or its Third Party designee each as reasonably necessary for CureVac or such Third Party designee to complete the conduct of any then ongoing Programs in accordance with the Work Plan; or (c) continue the Agreement and receive reasonable assurance in writing from the acquirer that the CureVac Confidential Information is not shared with any other entities within the acquirer’s group that are not required to manage, perform and exercise Arcturus’ rights and obligations under this Agreement.

(b)Discretionary Termination.  CureVac will have the right to terminate this Agreement in full at any time without cause by giving sixty (60) days’ prior written notice to Arcturus. Upon termination by CureVac pursuant to this subsection, CureVac will pay to Arcturus any amounts payable to Arcturus for any Work performed pursuant to the Work Plan up through the date of such termination, subject to Arcturus’ transfer of all deliverables under the Work Plan to CureVac. 

9.3Termination by Arcturus.  Arcturus will have the right to terminate this Agreement in full upon delivery of written notice to CureVac in the event of (i) any material breach by CureVac of any terms and conditions of this Agreement, provided that such breach has not been cured within sixty (60) days after written notice thereof is given by Arcturus to CureVac specifying in reasonable detail the nature of the alleged breach.  CureVac hereby agrees that Arcturus is entitled to receive payment of any amounts payable to Arcturus pursuant to this Agreement, including amounts for any Work performed pursuant to the Work Plan, up through the date of such termination.  For clarity, a breach by CureVac under this Agreement shall not constitute a breach under a License Agreement unless such breach is also separately a breach pursuant to such License Agreement.

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40

9.4Termination Upon Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Arcturus or CureVac or their Affiliates are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that the Parties and their respective Affiliates and permitted Third Party sublicensees, as licensees of such rights under this Agreement, will retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code and any foreign counterparts thereto.  Without limiting the Parties’ rights under Section 365(n) of the U.S Bankruptcy Code, if a case under U.S. Bankruptcy Code is commenced by or against a Party, the other Party shall be entitled to a copy of any and all such intellectual property and all embodiments of such intellectual property, and the same, if not in the possession of such other Party, shall be promptly delivered to it (i) before this Agreement is rejected by or on behalf of the bankrupt Party, within thirty (30) days after the other Party’s written request, unless the bankrupt Party, or its trustee or receiver, elects within thirty (30) days to continue to perform all of its obligations under this Agreement, or (ii) after any rejection of this Agreement by or on behalf of the bankrupt Party, if not previously delivered as provided under clause (i) above.  All rights of the Parties under this Section 9.4 and under Section 365(n) of the U.S. Bankruptcy Code are in addition to and not in substitution of any and all other rights, powers, and remedies that each Party may have under this Agreement, under the U.S. Bankruptcy Code, and any other applicable Laws.  The non-bankrupt Party shall have the right to perform the obligations of the bankrupt Party hereunder with respect to such intellectual property, but neither such provision nor such performance by the non-bankrupt Party shall release the bankrupt Party from any such obligation or liability for failing to perform it.

9.5 Effects of Termination.  Upon termination by: 

(a)CureVac under Sections 9.2 or 9.4, (i) Arcturus will terminate all Work in progress in an orderly manner as soon as practicable and transfer all deliverables under the Work Plan to CureVac in its Control in the state of such deliverable as of the effective date of termination; (ii) each of the Parties will return or destroy any Materials of the other Party in its Control, based upon written instructions from the other Party within [...***...] days of the effective date of termination, unless such Material is necessary or useful for the exercise of a Party's rights or obligations under a License Agreement in which event the Party retaining the Material will notify the other Party of retention pursuant to the requirements of and subject to such License Agreement; and (iii) all rights and licenses pursuant to this Agreement except with respect to any then existing Programs (for which licenses to CureVac or its Third Party designee shall be granted to complete the Program and enter into a License Agreement under the terms of Section 9.2(a)(ii)) shall terminate and be of no further force and effect, it being understood that termination hereunder shall not affect any then existing License Agreement;

(b)Arcturus under Section 9.3, (i) CureVac will promptly pay Arcturus any monies due and owing Arcturus, as of the date of termination, for Work and Services actually performed and all expenses actually incurred as specified in the Work Plan as well as any amounts incurred for orderly wind down any then existing Third Party commitments entered into as of the date of notice of termination to perform the Work Plan; (ii) each of the Parties will return or destroy any Materials of the other Party in its Control, based upon written instructions from the other Party within [...***...] days of the effective date of termination, unless such Material is necessary or useful for the exercise of a Party's rights or obligations under a License Agreement in which event the 

***Confidential Treatment Requested

41

Party retaining the Material will notify the other Party of retention pursuant to the requirements of and subject to such License Agreement; and (iii) all rights and licenses pursuant to this Agreement shall terminate and be of no further force and effect, it being understood that termination hereunder shall not affect any then existing License Agreement. 

9.6Survival.  In addition to the termination consequences set forth in Section  9.5, the following provisions will survive termination or expiration of this Agreement, as well as any other provision which by its terms or by the context thereof, is intended to survive such termination: Sections 1, 3.1(f) (to the extent a License Agreement is executed prior to the effective date of termination), 3.3(a), 6.2, 6.3, 7, 8.5, 8.7, 9.2, 9.5 , 9.6 and 10.  Termination or expiration of this Agreement will not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor preclude either Party from pursuing all rights and remedies it may have hereunder or at Law or in equity with respect to any breach of this Agreement nor prejudice either Party’s right to obtain performance of any obligation.  All other rights and obligations will terminate upon expiration of this Agreement.

Article 10

Miscellaneous

10.1Dispute Resolution.

(a)Dispute Escalation.  In the event of a dispute between the Parties, the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves or the Program directors.  In the event that such dispute is not resolved on an informal basis within [...***...] days, either Party may, by written notice to the other, have such dispute referred to each Party’s Chief Executive Officer or his or her designee (who will be a senior executive with the appropriate authority to determine the matter for such Party), who will attempt in good faith to resolve such dispute by negotiation and consultation for a [...***...] day period following receipt of such written notice

(b)Dispute Resolution.  

	
 
	
(i)
	
In the event the Chief Executive Officers of the Parties are not able to resolve such dispute as set forth above, the Parties agree to try to solve such dispute amicably by mediation. The Parties shall conduct a mediation procedure according to the Mediation Rules of the World Intellectual Property Organization (WIPO) in effect on the date of the commencement of the mediation proceedings. The location of the mediation proceedings will be New York City, New York, USA. The number of mediators will be [...***...]. The language of the mediation proceedings will be English. If the dispute has not been settled pursuant to the said rules within [...***...] days following the filing of a request for mediation or within such other period as the Parties may agree in writing, either Party may submit the dispute to final and binding arbitration. 

***Confidential Treatment Requested

42

	
 
	
(ii)
	
Any dispute relating to the validity performance, construction or interpretation of this Agreement, which cannot be resolved amicably between the Parties after following the procedure set forth in this Section 10.1, shall be submitted to arbitration in accordance with the Arbitration Rules of WIPO in effect on the date of the commencement of the arbitration proceedings. The location of the arbitration proceedings will be New York City, New York, USA. The number of arbitrators will be [...***...]. The language of the arbitration proceeding will be English. The decision of the arbitrators shall be final and binding upon the Parties (absent manifest error on the part of the arbitrator(s)) and enforceable in any court of competent jurisdiction.

10.2Relationship of Parties.  Nothing in this Agreement is intended or will be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.  No Party will incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided therein.  There are no express or implied Third Party beneficiaries hereunder.

10.3Compliance with Law.  Each Party will perform or cause to be performed any and all of its obligations or the exercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.

10.4Governing Law.  This Agreement will be governed by and construed in accordance with the Laws of State of New York, USA, without respect to its conflict of Laws rules.

10.5Counterparts; Facsimiles.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  Facsimile or PDF execution and delivery of this Agreement by either Party will constitute a legal, valid and binding execution and delivery of this Agreement by such Party

10.6Headings.  All headings in this Agreement are for convenience only and will not affect the meaning of any provision hereof.

(a)Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement will be construed against the drafting party will not apply.

(b)Interpretation.  Whenever any provision of this Agreement uses the term "including" (or "includes"), such term will be deemed to mean "including without limitation" (or "includes without limitations").  "Herein," "hereby," "hereunder," "hereof" and other equivalent words refer to this Agreement as an entirety and not solely to the particular portion of this Agreement in which any such word is used.  All definitions set forth herein will be deemed applicable whether the words defined are used herein in the singular or the plural.  Unless otherwise provided, all references to Sections and Exhibits in this Agreement are to Sections and Exhibits of this Agreement.  References to any Sections include Sections and subsections that are part of the related Section.

***Confidential Treatment Requested

43

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

10.7Further Assurances.  Each Party shall take all customary and reasonable actions and do all things reasonably necessary or proper, including under applicable Law, to make effective and further the intents and purposes of the transactions contemplated by this 

 

Agreement, including executing any further instruments reasonably requested by the other Party.

10.8Binding Effect.  This Agreement will inure to the benefit of and be binding upon the Parties, their Affiliates, and their respective lawful successors and assigns.

10.9Assignment.  This Agreement may not be assigned by either Party, nor may either Party delegate its obligations or otherwise transfer licenses or other rights created by this Agreement, except as expressly permitted hereunder, without the prior written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned; provided that either Party may assign this Agreement without such consent to an Affiliate or to its successor in connection with sale of all or substantially all of its assets or business or that portion of its business pertaining to the subject matter of this Agreement (whether by merger, consolidation or otherwise).

10.10Notices.  All notices, requests, demands and other communications required or permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been duly given upon the date of receipt if delivered by hand, recognized international overnight courier, or registered or certified mail, return receipt requested, postage prepaid or facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier) to the addresses set forth below (or to such address as a Party may subsequently provide by written notice in accordance with this Section 10.10). 

If to CureVac:

CureVac AG

Paul-Ehrlich-Str. 15

72076 Tübingen

Germany

Attention: CEO and General Counsel

Fax: +49 7071 9883 - 1101

 

If to Arcturus:

Arcturus Therapeutics, Inc.

10628 Science Center Drive

Suite 200

San Diego, California 92121

USA 

Attn:CEO

Fax: (858) 300-5028

 

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

 

Cooley LLP

3175 Hanover St.

Palo Alto, CA  94303

Attn: Glen Y. Sato

Fax: (650) 849-7400

44

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

 

10.11Amendment and Waiver.  This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties; provided that any unilateral undertaking or waiver made by one Party in favor of the other will be enforceable if undertaken in a writing signed by the Party to be charged with the undertaking or waiver.  Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

10.12Severability.  In the event that any provision of this Agreement will, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent.

10.13Entire Agreement.  This Agreement together with any License Agreements (including all appendices and exhibits hereto and thereto) entered into during the Term and the Material Transfer Agreements and the Confidentiality Agreement are the sole agreements with respect to the subject matter and supersede all other agreements and understandings between the Parties with respect to same, provided, however, that the terms and conditions under this Agreement apply with respect to the activities which have been performed by the Parties under the Material Transfer Agreement but which are also set forth under the Work Plan, and to such extent this Agreement replaces the Material Transfer Agreements. In case of conflict between this Agreement and the Confidentiality Agreement, this Agreement shall prevail.  

10.14Force Majeure.  Neither Arcturus nor CureVac will be liable for failure of or delay in performing obligations set forth in this Agreement (other than any obligation to pay monies when due), and neither will be deemed in breach of such obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Arcturus or CureVac; provided that the Party affected will promptly notify the other of the force majeure condition and will exert reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.

[Signature page to follow]

 

 

45

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

IN WITNESS WHEREOF, the Parties have caused this Development and Option Agreement to be executed by their respective duly authorized officers as of the Effective Date.

CureVac AG

 

	
By:
	
 
	
/s/ Franz-Werner Haas

	
 
	
 
	
(Signature)

	
 
	
 
	
 

	
Name:
	
 
	
Franz-Werner Haas

	
Title:
	
 
	
CCO

 

	
By:
	
 
	
/s/ Dan Menichella

	
 
	
 
	
(Signature)

	
 
	
 
	
 

	
Name:
	
 
	
Dan Menichella

	
Title:
	
 
	
CBO

 

	
Arcturus Therapeutics Inc.

	
 

	
By:
	
 
	
/s/ Joseph E. Payne

	
 
	
 
	
(Signature)

	
 
	
 
	
 

	
Name:
	
 
	
Joseph E. Payne

	
Title:
	
 
	
President & CEO

 

 

 

 

Signature Page to Development and Option Agreement

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Exhibit 1.3

Patents and Know-How in the Arcturus Background Technology

[...***...]

 

 

***Confidential Treatment Requested

 

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Exhibit 1.5

 

ARCTURUS LMD TECHNOLOGY

[...***...]

 

 

 

 

***Confidential Treatment Requested

 

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

 

Exhibit 1.34

Exclusive License Agreement

see separate document

 

 

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Exhibit 1.61

Non-Exclusive License Agreement

[The payments under the Non-Exclusive License Agreement will be reduced by 50% for such non-exclusive license and the other terms under the Exclusive License Agreement will be adjusted to reflect the non-exclusivity of the license]

 

 

 

 

 

Development and Option Agreement between CureVac AG and Arcturus Therapeutics Inc

 

Exhibit 3.1 (a)

Work Plan

 

[...***...]

 

 

 

***Confidential Treatment Requested

 

 

 

Exhibit 4.2

Target Reservation Request Form

[...***...]

 

 

 

 

***Confidential Treatment Requested

 

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2

 

 

AMENDMENT TO DEVELOPMENT AND OPTION AGREEMENT

 

THIS AMENDMENT TO DEVELOPMENT AND OPTION AGREEMENT (this “Amendment”), dated as of May 3, 2018, is made by and between CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tubingen, Germany (“CureVac”), and Arcturus Therapeutics Inc., a Delaware corporation with offices at 10628 Science Center Drive #200, San Diego, CA 92121, USA (“Arcturus”). Each of CureVac and Arcturus may be referred to herein as a “Party” or together as the “Parties”.

WHEREAS, the Parties are parties to that certain Development and Option Agreement, dated as of January 1, 2018 (the “Development and Option Agreement”); 

WHEREAS, pursuant to Section 3.2 of the Development and Option Agreement, CureVac is responsible for funding up to [...***...] scientists per year at Arcturus to perform the Work as defined and in accordance with the Work Plan for a period of up to [...***...] months at the FTE costs;

WHEREAS, CureVac is now prepared to invest and commit to the full number of [...***...] FTEs for the full period of [...***...] months, provided Arcturus can provide security as to CureVac's access to the Technology generated in performance of the Work pursuant to the Development and Option Agreement; and 

WHEREAS, CureVac and Arcturus desire to amend the Development and Option Agreement as provided in this Amendment in accordance with Section 10.11 of the Development and Option Agreement.

NOW, THEREFORE, in consideration of the foregoing and the promises and mutual agreements contained in this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties agree as follows:

SECTION 1.  Irrevocable Offer.  

	
(a)
	
The heading of Article 5 of the Development and Option Agreement is hereby amended and restated in its entirety as follows: “Irrevocable Offer to Licenses” and the Table of Contents is updated accordingly.  The heading of Section 5.1 of the Development and Option Agreement is amended and restated in its entirety as follows: “Irrevocable Offer.” 

	
(b)
	
Section 5.1(a) of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

“ (a) Arcturus hereby makes a final, binding irrevocable offer (the “Irrevocable Offer”) to CureVac to enter into, on the terms of, and subject to the conditions set forth in, the Exclusive License Agreement or, if the Reserved Target is only available on a non-exclusive basis, the Non-Exclusive License Agreement, on a Reserved Target-by-Target basis, a maximum of [...***...] licenses under the Arcturus LMD Technology with respect to the development, manufacture and commercialization of Licensed Products containing mRNA Constructs intended to express such Reserved Target in the form of the License Agreement. Upon the execution of this Amendment, the Irrevocable Offer shall remain valid and legally binding on Arcturus and in effect, and the 

 

***Confidential Treatment Requested

 

 

Irrevocable Offer from Arcturus shall be irrevocable and open for acceptance from CureVac for the period commencing on the Effective Date and ending on the expiration of the Term (the “Offer Period”).” 

 

(c)Section 5.1(b) of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

 

“ (b) If, prior to the expiration of the Offer Period, CureVac delivers written notice to Arcturus of its intention to enter into a license for a Reserved Target, which such notice shall set forth the particular Reserved Target which is intended to be expressed by the Licensed Products (each such notice, an “Acceptance Notice”), then upon delivery thereof, for the Reserved Target set forth in such Acceptance Notice, the licenses and all other rights under the applicable License Agreement shall immediately be in effect without the requirement of either Party to execute any further documentation and there shall exist a legal, valid and binding obligation of Arcturus, enforceable against Arcturus in accordance with the terms of the Exclusive License Agreement or, if the Reserved Target set forth in such Acceptance Notice is only available on a non-exclusive basis, the Non-Exclusive License Agreement.  A separate Acceptance Notice and Acceptance Fee will be required for each License Agreement with respect to which CureVac accepts the Irrevocable Offer pursuant to this Section 5.1, and CureVac will pay to Arcturus the Acceptance Fee for each such License Agreement as set forth in Section 5.3.  In the event that CureVac terminations a license(s) during the Term, the Target(s) subject to the license(s) will be removed from the Reserved Target List and the number of License Agreements for which the Irrevocable Offer exists shall be reduced by one (1) (i.e. the delivery of an Acceptance Notice reduces the total number of License Agreements for which CureVac may accept the Irrevocable Offer  by one regardless of whether CureVac elects to continue such License Agreement in effect).”

 

(d)Section 5.1(c) of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

 

“ (c) In the event that CureVac terminates a License Agreement during the Term, the Targets subject to such license(s) will no longer be available as a Target pursuant to this Agreement.”  

 

(e)Section 5.2 of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

 

“5.2CureVac's Acceptance of Irrevocable Offer.  As soon as practicable following CureVac's delivery of each Acceptance Notice to Arcturus, CureVac and Arcturus will prepare the appendices to the corresponding License Agreement.  The License Agreement shall nevertheless enter into force (including payment obligations of CureVac in accordance with the terms of the License Agreement) upon delivery of the Acceptance Notice by CureVac.”

 

(f)Section 5.3 of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

 

“5.3Acceptance Fee.  If CureVac delivers an Acceptance Notice for a Rare Disease Target pursuant to Section 5.1, CureVac shall pay an Acceptance Fee of [...***...] and if CureVac delivers an Acceptance Notice for a Non-Rare Disease Target pursuant to Section 5.1, CureVac shall pay an Acceptance Fee of [...***...], hereinafter both the “Acceptance Fee”.  On the [...***...] it delivers an 

 

***Confidential Treatment Requested

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Acceptance Notice, CureVac shall pay the applicable Acceptance Fee by wire transfer in immediately available funds to the bank account of Arcturus set forth on Schedule 3 (or such other bank account notified in writing to CureVac prior to such date).” 

 

(g)Section 5.4 of the Development and Option Agreement is hereby amended and restated in its entirety as follows:

 

“5.4Co-Development Agreement.  For clarification, the selection of any program under the Co-Development Agreement shall not constitute the delivery of an Acceptance Notice in accordance with this Section 5, and, accordingly, no Acceptance Fee will be payable and any paid Acceptance Fee shall be credited against any other payments by CureVac applied first to any outstanding payment obligations to Arcturus, and to the extent any remaining amounts remain creditable, then to the next due future payment obligations.” 

 

(g)Definitions.  Each of the following Sections of the Development and Option Agreement are hereby amended and restated in their entirety as “Intentionally Omitted.” : Section 1.35, Section 1.62, Section 1.64, Section 1.65, Section 1.66 and Section 1.67   The following Sections are inserted immediately following Section 1.94 of the Development and Option Agreement:

 

“1.95“Irrevocable Offer” has the meaning set forth in Section 5.1(a). 

 

1.96“Acceptance Notice” has the meaning set forth in Section 5.1(b).

 

1.97“Acceptance Fee” has the meaning set forth in Section 5.3.”

 

(h)Additional Modifications.  

 

(i) In Section 3.1(f) of the Development and Option Agreement, the occurrence of “exercise of an Option and entry into a License Agreement” in the first sentence is hereby replaced with “delivery of an Acceptance Notice and the entering into force of a License Agreement”.

 

(ii) In Section 3.3(c) of the Development and Option Agreement, the occurrence of “whether to exercise an Option” in the third sentence is hereby replaced with “whether to delivery an Acceptance Notice”.

 

(iii) In Section 4.2(c)(iii) of the Development and Option Agreement, the occurrence of “option” in the second sentence is hereby replaced with “right”.

 

(iv) In Section 4.2(d)(ii) of the Development and Option Agreement, the occurrence of “shall be reduced by each exercise of an Option” in the first sentence is hereby replaced with “shall be reduced by each delivery of an Acceptance Notice” and the occurrence of “applying from and after the date of exercise of an Option.” in the first sentence is hereby replaced with “applying from and after the date of an Acceptance Notice.”.

 

(v) In Section 6.4(c)(ii) of the Development and Option Agreement, the occurrence of “an Option Notice” in the first sentence is hereby replaced with “an Acceptance Notice”.

 

(vi) In Section 6.4(c)(iii) of the Development and Option Agreement, the occurrence of “to the Options” in the first sentence is hereby replaced with “pursuant to the Irrevocable Offer”.

 

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(vii) In Section 9.2(a)(iv) of the Development and Option Agreement, the occurrence of “the Option Exercise Fee” is hereby replaced with “the Acceptance Fee”.

 

(viii) In Section 9.2(a) of the Development and Option Agreement, in the sentence immediately following subsection (iv), the occurrence of “or the Options” is hereby replaced with “or the Irrevocable Offers”.

 

SECTION 2.  License Agreements.  

 

(a)“Non-Exclusive License Agreement” means the terms of the Non-Exclusive License Agreement agreed by the Parties, incorporated by reference into the Development and Option Agreement and set forth on Schedule 1-A to this Amendment. 

 

(b)“Exclusive License Agreement” means the terms of the License Agreement agreed by the Parties, incorporated by reference into the Development and Option Agreement and set forth on Schedule 1-B to this Amendment. 

 

 

SECTION 3.  Grant of Security Interest.  

 

(a)As collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of its obligations under the Development and Option Agreement, and whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against Arcturus of any proceeding under any bankruptcy or insolvency Law naming Arcturus as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding, Arcturus hereby mortgages, pledges, assigns and hypothecates to CureVac, and grants to CureVac a Lien on and continuing security interest in, all the right, title and interest of Arcturus, in, to, and under the following property, wherever located, whether now owned or in the future acquired by Arcturus and whether now existing or in the future coming into existence owned by Arcturus (collectively, the “Collateral”): 

 

(i) the Patents and Know-How set forth on Exhibit 1.3 of the Development and Option Agreement;

(ii)the LUNARTM platform;

(iii) all other Arcturus Background Technology;

(iv)all other Arcturus Program Technology; and

(v)to the extent not otherwise included, all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, all claims and insurance proceeds arising out of the loss, nonconformity or any interference with the use of, or any defect or infringement of rights in, or damage to, any of the foregoing, and all proceeds, products, offspring, rents, issues, profits and returns of and from, and all distributions on and 

 

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rights arising out of, any of the foregoing;

provided that the Collateral shall not exceed the property to which CureVac has or may have rights to pursuant to the terms of the Development and Option Agreement.

For purposes of this Amendment, “Lien” means a pledge, lien, charge or security interest of any kind or nature.

(b) Notwithstanding anything herein to the contrary, in no event shall the Collateral include or the security interest granted under Section 3(a) attach to (i) any Collateral if and to the extent that a security interest therein is prohibited by or in violation of any Law applicable to Arcturus or (ii) any "intent-to-use" application for registration of a trademark or service mark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a "Statement of Use" pursuant to Section 1(d) of the Lanham Act or an "Amendment to Allege Use" pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use application under applicable Law and (ii) any Collateral if and to the extent that a grant of a security interest therein would violate or invalidate any lease, license or other agreement applicable thereto to which Arcturus is party as of the date of this Amendment or create a right of termination in favor of any other party thereto (after giving effect to the applicable anti-assignment provisions of the UCC or other applicable Law).

(c)Arcturus makes to CureVac each of the representations and warranties set forth on Part I of Schedule 2.

(d)Arcturus agrees that it will comply with each of the covenants set forth on Part II of Schedule 2.

	
(e)
	
For the avoidance of doubt, Arcturus shall be permitted, subject to the security interest granted under Section 3(a), to license the Collateral and in connection therewith, CureVac shall acknowledge and respect such licenses in writing the rights of such licensees as reasonably requested by any licensee of the Collateral.

	
 (f)
	
CureVac may exercise from time to time any rights and remedies available to it under the UCC and under any other applicable Law.   

SECTION 4. Additional Expenses.  In consideration for the rights granted pursuant to Section 1 and Section 3 of this Amendment, CureVac agrees to perform the Work under the Work Plan as part of which CureVac will fund [...***...] scientists per year at Arcturus for a period of [...***...] months at the FTE Costs.  

SECTION 5. Ratification of Agreement.  Except as expressly provided in this Amendment, all of the terms, covenants, and other provisions of the Development and Option Agreement are hereby ratified and confirmed and shall continue to be in full force and effect in accordance with their respective terms.  From and after the date hereof, all references to the Development and Option Agreement shall refer to the Development and Option Agreement as amended by this Amendment.  Capitalized terms used but not defined in this Amendment shall have the meanings assigned to them in the Development and Option Agreement.  

SECTION 6.  Governing Law.  This Amendment shall be governed by and construed in 

 

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accordance with the Laws of the State of New York, USA, without respect to its conflict of Laws rules.  In the event of a dispute arising out of or relating to this Amendment, the provisions of Section 10.1 of the Development and Option Agreement shall govern the resolution of such dispute.   

SECTION 7.  Counterparts.  This Amendment may be executed and in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument. Facsimile or PDF execution and delivery of this Amendment by either Party will constitute a legal, valid and binding execution and delivery of this Amendment by such Party.  

[signature page follows]

 

 

 

 

6

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective duly authorized officers as of the date hereof.

	
 
	
CUREVAC AG

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 /s/ Dr. Florian von der Mülbe

	
 
	
 
	
 
	
Name:
	
Dr. Florian von der Mülbe

	
 
	
 
	
 
	
Title:
	
Chief Operating Officer

 

	
 
	
 
	
By:
	
 /s/ Dr. Mariola Fotin-Mleczek 

	
 
	
 
	
 
	
Name:
	
Dr. Mariola Fotin-Mleczek

	
 
	
 
	
 
	
Title:
	
Chief Scientific Officer

 

	
 
	
ARCTURUS THERAPEUTICS INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 /s/ Mark Herbert

	
 
	
 
	
 
	
Name:
	
Mark Herbert

	
 
	
 
	
 
	
Title:
	
Interim President

 

Schedule 1-A

Non-Exclusive License Agreement

 

See attached

 

8

Schedule 1-B

 

Exclusive License Agreement

 

 

9

Schedule 2

 

[...***...]

 

 

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[...***...]

 

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[...***...]

“Copyright Office” means the United States Copyright Office.

“IP Filing Office” means, as applicable, the Copyright Office, the PTO or any similar office or agency in any other IP Jurisdiction.  

“IP Jurisdiction” means any jurisdiction creating or recognizing rights in intellectual property, including the United States, any state thereof, any foreign country or any subdivision thereof. 

“PTO” means the United States Patent and Trademark Office.

 

 

 

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Schedule 3

 

[...***...]

 

 

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Schedule 1-A

 

Non-Exclusive License Agreement

by and between

CureVac AG

and

Arcturus Therapeutics Inc.

dated

May 3, 2018

 

 

 

 

 

Table of Contents

 

 

	
1.
	
Definitions.
	
4

	
2.
	
License Grants; Technology Transfer.
	
12

	
3.
	
License Limitations.
	
15

	
4.
	
Payments and Royalties.
	
15

	
5.
	
Ownership and Inventorship of IP.
	
20

	
6.
	
Patent Prosecution and Maintenance.
	
21

	
7.
	
Patent Enforcement and Defense.
	
22

	
8.
	
Confidentiality.
	
26

	
9.
	
Warranties; Limitations of Liability; Indemnification.
	
28

	
10.
	
Term and Termination.
	
33

	
11.
	
General Provisions.
	
35

 

 

 

 

 

 

List of Appendices

 

	
Appendix 1.3
	
Description of the Arcturus LMD Technology

	
Appendix 1.4 
	
Patents and Know-How within the Arcturus Technology as of the License Agreement Effective Date

	
Appendix 1.28
	
Joint Interest Patents

	
Appendix 1.51
	
Pre-Existing Prosecution, Enforcement and Defense Restrictions

	
Appendix 1.60
	
Description of the Target

 

 

 

 

License Agreement

This License Agreement ("License Agreement"), effective as of delivery of an Acceptance Notice in accordance with Section 5.1(b) of the Development and Option Agreement (as defined below) (the "License Agreement Effective Date"), is made by and between Arcturus Therapeutics Inc., a Delaware corporation ("Arcturus"), and CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany ("CureVac"). Each of Arcturus and CureVac may be referred to herein as a "Party" or together as the "Parties."

WHEREAS, Arcturus has expertise and intellectual property relating to the development of LMD Technologies (as defined below) that embody or incorporate delivery systems (and components thereof) for molecular therapeutics based on or incorporating lipid-enabled and unlocked nucleomonomer  platform for delivery of nucleic acids as specified in Appendix 1.3, the Arcturus LMD Technology; and

WHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); and

WHEREAS, Arcturus and CureVac are parties to that certain Development and Option Agreement (dated January 1, 2018, and amended as of May 3, 2018) (the "Development and Option Agreement") pursuant to which CureVac has options to take licenses under the Arcturus LMD Technology (as defined below) with respect to CureVac’s mRNA Constructs; and

WHEREAS, pursuant to the terms of the Development and Option Agreement, CureVac has exercised an option to obtain a license pursuant to this Agreement with respect to the Target (as defined below) and the Parties are now entering into a licensing arrangement whereby CureVac will have a license under the Arcturus LMD Technology to develop and commercialize Licensed Products (as defined below) with respect to such Target.

WHEREAS, the Parties intend to also co-develop an ornithine transcarbamylase ("OTC") deficiency product and possibly other products under a separate co-development and co-commercialization agreement ("Co-Development Agreement"). 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.Definitions.

The following terms and their correlatives will have the following meanings: 

1.1"Affiliate" of a person or entity means any other entity which (directly or indirectly) is controlled by, controls or is under common control with such person or entity.  For the purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as used with respect to an entity will mean (i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors or (ii) in the case of a non-corporate entity, direct or indirect ownership of at least fifty percent (50%) of the equity interests with the power to direct the management and policies of such entity,

 

 

 

 

provided that if local Law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local Law, be owned by foreign interests. [...***...].

1.2"Arcturus Indemnitees" has the meaning set forth in Section 9.6(a).

1.3"Arcturus LMD Technology" means any and all LMD Technology for delivering RNA therapeutics that is Controlled by Arcturus or any of its Affiliates as of the Effective Date or during the Term, including the LUNARTM platform, a description of which technology, as in existence as  of the License Agreement Effective Date, is set forth on  Appendix 1.3.  

1.4"Arcturus Technology" means any Patents and Know-How that are Controlled by Arcturus or any of its Affiliates as of the License Agreement Effective Date or during the Term and that are necessary or useful for the research, development, manufacturing and commercialization of Licensed Products. The Patents and Know-How comprised in the Arcturus Technology as of the License Agreement Effective Date are listed in Appendix 1.4 hereto. Arcturus Technology shall include the Arcturus LMD Technology. Notwithstanding the foregoing, Arcturus Technology shall exclude 

(a)any Patents and Know-How acquired by Arcturus after License Agreement Effective Date if Arcturus is required to make any payment to a Third Party in connection with the grant, maintenance or exercise of a sublicense to CureVac, unless CureVac agrees in writing to reimburse Arcturus for all such payments; provided, however, that such payments shall reduce CureVac's royalty obligations in accordance with Section 4.3(b), 

(b)any Patents and Know-How of a Third Party (including its Affiliates) that becomes Arcturus’ Affiliate after the License Agreement Effective Date as a results of a Change of Control, but only if and to the extent that it is not LMD Technology, and

(c)any Patents that CureVac elects to exclude pursuant to Section 2.3. 

1.5"Arcturus Technology Patent(s)" means any and all Patents comprised in the Arcturus Technology during the Term, unless otherwise set forth herein. For clarity, Arcturus Technology Patents include Arcturus’ interest in the Joint Interest Patents.  

1.6"Business Day" means a day other than a Saturday, Sunday, or bank or other public holiday in San Diego, California, USA or Tübingen, Germany or Boston, Massachusetts, USA.

1.7"cGMP" means current Good Manufacturing Practices as specified in the U.S. C.F.R., ICH Guideline Q7A, or equivalent Laws of an applicable Regulatory Authority at the time of manufacture.

1.8"Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

 

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1.9"Change of Control" with respect to Arcturus, shall be deemed to have occurred if during the Term (i) any person or entity is or becomes the "beneficial owner", directly or indirectly, of shares of capital stock or other interests (including partnership interests) of Arcturus then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions of Arcturus representing fifty percent (50%) or more of the total voting power of all outstanding classes of voting stock of Arcturus or has the power, directly or indirectly, to elect a majority of the members of Arcturus’ board of directors, or similar governing body; or (ii) Arcturus enters into a merger, consolidation or similar transaction with another person or entity; or (iii) Arcturus sells or transfers to any Third Party, in one (1) or more related transactions, properties or assets representing all or substantially all of Arcturus’ consolidated total assets to which this License Agreement relates, provided however, that: 

(a)subsections (i) to (iii) shall only apply if the person or entity or Third Party acquiring control is (i) a pharmaceutical company which has experience in developing and commercializing pharmaceutical products (i.e., is a strategic, not financial investor or partner) or (ii) a competitor, i.e., a company whose business consists principally of mRNA development, manufacturing and/or commercialization, and

(b)a bona fide financing transaction with Third Parties that does not otherwise meet the requirements of subsection (a) shall not constitute a Change of Control.  

1.10"Combination Product" means a Licensed Product that includes at least one additional active pharmaceutical ingredient other than LMDs, mRNA Constructs, and other RNAs (i.e., Guide RNA(s)) or DNA Sequence(s).  Drug delivery vehicles, adjuvants, and excipients shall not be deemed to be "active ingredients", except in the case where such delivery vehicle, adjuvant, or excipient is recognized as an active ingredient in accordance with 21 C.F.R. 210.3(b)(7) or equivalent Laws in other jurisdictions, provided however, should LMDs comprised in a Licensed Product be characterized as "active ingredients" at any time during the Term, such LMDs will not be considered an "active ingredient" for the purposes of this definition. 

1.11"Confidential Information" of a Party means all proprietary Know-How, unpublished patent applications and other non-public information and data of a financial, commercial, business, operational, scientific or technical nature of such Party that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form in connection with this License Agreement, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with this License Agreement.  In addition, any non-public information related to this License Agreement or the Licensed Products hereunder and disclosed by a Party to the other Party (or their respective Affiliates) under the Development and Option Agreement will be deemed such Party’s Confidential Information hereunder. Technology will be considered the Confidential Information of the Party (or Parties) owning such Technology, and jointly-owned Technology will be considered Confidential Information of both Parties.

1.12"Control" or "Controlled" means with respect to Technology, a Party owns or has a license to use and practice the respective Patent or Know-How without violating the terms of any agreement with any Third Party.

1.13"CTA" means a clinical trial application.

 

 

 

1.14"CureVac Indemnitees" has the meaning set forth in Section 9.6(b).

1.15"Development and Option Agreement" has the meaning set forth in the Preamble.

1.16“Diligent Efforts” means, with respect to the efforts to be expended by each Party with respect to the activities of a Party pursuant to this Agreement, active and sustained efforts to conduct the applicable activity, or to attempt to achieve the applicable requirement or goal, in a prompt and expeditious manner, as is reasonably practicable under the circumstances (including the level of FTE funding and budget for out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement. 

1.17"Disclosing Party" has the meaning set forth in Section 8.1

1.18"Field of Use" means the treatment and diagnosis of all diseases and conditions.

1.19"First Commercial Sale" means the first sale for use or consumption of any Licensed Product in a country after all required Regulatory Approvals for commercial sale of such Licensed Product have been obtained in such country.

1.20"FTE" means a full-time person, or more than one person working the equivalent of a full-time person, where "full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel are working, consisting of a total of 1880 hours per year of work on the applicable activities.  Any person who devotes less than 1880 hours per year on the applicable activities shall be treated as an FTE on a pro-rated basis, based upon the actual number of hours worked by such person on such activities, divided by 1880.  Any person who devotes more than 1880 hours per year on the applicable activities shall be treated as one (1) FTE, i.e., in no event shall one person be counted as more than one FTE. FTE activities shall include the performance of the applicable activities and scientific management oversight, as reasonably required, but, for clarity, exclude (i) the work of general corporate or administrative personnel, overhead (including facilities costs), insurances and similar costs.  

1.21"FTE Costs" means an initial rate of [...***...] Dollars ($[...***...]) per FTE per year, which shall apply through December 31, 2019.  Thereafter, the FTE Rate shall be changed bi-annually at the end of each second calendar year to reflect any percentage increase or decrease (as the case may be) in the Consumer Price Index in the U.S. (index for all items) (“CPI”) (based on the change in the CPI from the most recent index available as of the Effective Date to the most recent index available as of the date of the calculation of such revised FTE Cost rate).

1.22 "IND" means an investigational new drug application, or equivalent application or submission for approval to conduct human clinical trials. 

1.23"Indemnification Claim Notice" has the meaning set forth in Section 9.6(c). 

1.24"Indemnified Party" has the meaning set forth in Section 9.6(c).

1.25"Indication" means an individual disease or clinical condition with respect to which at least one adequate and well controlled study is required to support inclusion of such 

 

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disease or condition in the indication statement of an FDA approved package insert for a Licensed Product. 

1.26"Initiation" means in connection with a clinical trial in any of its phases 1 through 3 the first dosing of the fifth patient or fifth healthy subject.

1.27"Inventions" has the meaning set forth in Section 5.1.

1.28"Joint Interest Patents" means the Patents generated under the Development and Option Agreement and jointly owned by the Parties. Such Joint Interest Patents are listed in   Appendix 1.28 hereto, as amended from time to time.

1.29"Know-How" means all commercial, technical, scientific and other know-how and information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, preclinical, clinical, safety, manufacturing and quality control data and know-how, including study designs and protocols), in all cases, provided it is confidential and proprietary, and regardless of whether patentable, in written, electronic or any other form now known or hereafter developed.

1.30"Late Stage Development" means Development after the Initiation of a Phase 3 Study.

1.31"Law" or "Laws" means all laws, statutes, rules, regulations, orders, judgments, or ordinances having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

1.32"License Agreement" has the meaning set forth in the Preamble.

1.33"License Agreement Effective Date" has the meaning set forth in the Preamble.

1.34"Licensed Product" means [...***...] product comprised of (i) LMD systems, which are covered by Arcturus LMD Technology; and containing (ii) one or more mRNA Constructs as the active pharmaceutical ingredient(s) intended to express the Target.  In case of two or more mRNA Constructs these constructs may be contained in the same or separate LMDs. Licensed Product includes mRNA-LMD products which are administered jointly or separately, and mRNA-LMD products which are administered simultaneously or sequentially as a combination medicinal product or treatment. For Gene Editing purposes a Licensed Product may contain other RNA(s) (i.e., Guide RNA(s)) and/or DNA Sequence(s) which can be delivered together or separately (combined in one LMD or delivered in separate LMDs), in addition to the one or more mRNA Constructs intended to express the DNA Editing Protein.  

1.35"LMD Technology" means Technology Controlled by Arcturus that claims, embodies or incorporates delivery systems (and components thereof) based on or incorporating lipid-mediated delivery (LMD) systems. 

1.36"Losses" has the meaning set forth in Section 9.6(a).

 

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1.37"Materials" means any tangible chemical or biological material, including any compounds, LMD, DNA, RNA (including mRNA), clones, cells, and any expression product, progeny, derivative or other improvement thereto, along with any tangible chemical or biological material embodying any Know-How, Controlled by Arcturus.

1.38"mRNA Construct" means any mRNA construct for the expression of a protein, including the sequence of such construct (which potentially comprises one (1) or more of a cap, 5’ UTR, the associated open reading frame, 3’UTR and a poly A tail), the chemistry of natural and non-natural nucleic acids, and other chemical modifications associated with such construct, such mRNA Construct being covered by mRNA Technology. 

1.39"mRNA Technology" means Technology Controlled by CureVac that claims, embodies or incorporates expression systems (and components thereof), based on or incorporating mRNA.

1.40"Milestones" means the milestones payable pursuant to Section 4.1.

1.41"Milestone Event" has the meaning set forth in Section 4.1.

1.42"Milestone Payment" has the meaning set forth in Section 4.1.

1.43"Net Sales" means, with respect to any Licensed Product, the gross amount received by CureVac and its Affiliates and Sublicensees for bona fide sales of such Licensed Product to a Third Party (other than Affiliates and Sublicensees but including distributors for resale), less deductions, in each case to the extent reasonable, customary, actually allowed and taken in connection with the sale of such Licensed Product and not otherwise recovered or reimbursed:

(a)discounts (including cash, quantity and patient program discounts), retroactive price reductions, commissions, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers;

(b)credits or allowances actually granted upon claims, damaged goods, rejections or returns of, such Licensed Product and not in excess of the selling price of such Product, including such Licensed Product returned in connection with recalls or withdrawals;

(c)freight out, postage, shipping and insurance charges for delivery of such Licensed Product;

(d)taxes or duties levied on, absorbed or otherwise imposed on the sale of such Licensed Product, including value-added taxes, or other governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds; and 

(e)wholesaler and distributor administration fees

(f)other customary deductions taken in the ordinary course of business in accordance with IFRS (International Financial Reporting Standards) principles. 

If a single item falls into more than one of the above categories above, such items will not be deducted more than once. 

 

Net Sales shall not include any payments among CureVac, its Affiliates and Sublicensees.  Net Sales shall be determined in accordance with generally accepted accounting principles, consistently applied across all products.  Net Sales for any Combination Product shall be calculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B), where A is the weighted average price paid for the Licensed Product contained in such Combination Product sold separately in finished form in such country, and B is the weighted average invoice price paid for the other active ingredients contained in such Combination Product sold separately in finished form in such country, if such Licensed Product and such other active ingredients are each sold separately in such country.

If such other active ingredients are not sold separately in such country, then Net Sales for such Combination Product shall be calculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/C, where C is the weighted average invoice price paid for such Combination Product in such country.  If such Licensed Product is not sold separately in finished form in such country, Net Sales for such Licensed Product will be determined by CureVac’s good faith estimate of the relative contribution of such Licensed Product and each such other active ingredients in such Combination Product, and shall take into account in good faith any applicable allocations and calculations that may have been made for the same period in other countries.

1.44"Non-Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of equal to or more than [...***...] in [...***...] people in the U.S. or EU. The indication for which the first IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.

1.45"Patent(s)" means (a) an issued patent, a patent application, and a future patent issued from any such patent application, (b) a future patent issued from a patent application filed in any country worldwide which claims priority from a patent or patent application of (a), and (c) any additions, divisions, continuations, continuations-in-part, invention certificates, substitutions, reissues, reexaminations, extensions, registrations, utility models, supplementary protection certificates and renewals based on any patent or patent application under (a) or (b), but not including any rights that give rise to regulatory exclusivity periods (other than supplementary protection certificates, which will be treated as "Patents" hereunder) 

1.46"Patent Costs" means the reasonable, documented, out-of-pocket costs and expenses paid to outside legal counsel, and filing and maintenance expenses, actually and reasonably incurred by a Party in prosecuting and maintaining Patents with respect to Licensed Products and enforcing and defending them. 

1.47"Phase 1 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(a) or corresponding foreign regulations.

1.48"Phase 2 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(b) or corresponding foreign regulations.

 

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1.49"Phase 3 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(c) or corresponding foreign regulations. 

1.50"Pre-Existing Licensing Restrictions" means, with respect to the Target, that Arcturus or its Affiliates have granted to a Third Party with respect to the Target a non-exclusive, co-exclusive or an exclusive license or option pursuant to a bona fide written agreement that is in effect at the time of the submission of the Acceptance Notice by CureVac pursuant to Section 5.1(b) of the (amended) Development and Option Agreement.

1.51"Pre-Existing Prosecution, Enforcement and Defense Restrictions" means, with respect to the Target, those certain prosecution, enforcement and defense rights granted by Arcturus or its Affiliates to a Third Party(ies) with respect to the Patents pursuant to the bona fide written agreement(s) set forth on Exhibit 1.51 hereto as such bona fide written agreement(s) were in effect as of the Effective Date of the Development and Option Agreement.  For clarity, the exercise of such foregoing rights by a Third Party with respect to Patents that are not specific to the Target or Licensed Products shall be deemed a Pre-Existing Prosecution, Enforcement and Defense Restriction. 

1.52"Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of less than [...***...] in [...***...] people in the U.S. or EU.  The indication for which the first IND or CTA application will be filed will determine whether a Target is a Rare Disease Target.

1.53"Receiving Party" has the meaning set forth in Section 8.1.

1.54"Regulatory Approval" means, with respect to a country or extra-national territory, any and all approvals (including BLAs and MAAs), licenses, registrations or authorizations of any Regulatory Authority necessary in order to commercially distribute, sell or market a product in such country or some or all of such extra-national territory, including solely to the extent required as a condition to commercial sale to end users, any pricing or reimbursement approvals.

1.55"Regulatory Authority" means any national (e.g., the FDA), supra-national (e.g., the EMA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental authority, in any jurisdiction in the world, involved in the granting of Regulatory Approval.

1.56"Royalty Reduction" has the meaning set forth in Section 4.3(b).

1.57"Royalty Term" has the meaning set forth in Section 4.3(d).

1.58"Sublicensee" means any Third Party that is granted a sublicense as permitted by Section 2.2, either directly by CureVac or its Affiliates or indirectly by any other Sublicensee hereunder.

1.59"Sublicense Income" means the fees and other payments, including upfront payments as well as development, regulatory milestone payments received by CureVac or its Affiliates from a Sublicensee, excluding: (a) royalty payments and net sales milestones; (b) reimbursement of costs and expenses, including for patent prosecution and enforcement and
 

 

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(c) equity or premium on equity and (d) loans or loans forgiven either (i) as a result of financial distress of the borrower or (ii) that are not specific to the Licensed Product.    

1.60"Target" means the Target identified in Appendix 1.60 hereto. The Target includes 

(a) up to N  (N= [...***...]) proteins, including all possible combinations resulting from removing one of the N proteins (N minus [...***...] proteins), together with all variants of such proteins, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof; provided, however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring protein; and

(b) [...***...] antigens of a given pathogen, including [...***...] antigen and any combination of such antigens, together with all variants of such antigens, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof, provided, however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring antigen; and

(c) a DNA Target, provided, however, that the first DNA Target for each DNA Editing Protein would not count as a Target.  Each subsequent DNA Target for this DNA Editing Protein would count as a Target. For clarity, a DNA Editing Protein would be defined as a Target under (a) above and count as a single Target.

If a given protein, e.g., an antibody or enzyme, comprises separated amino acid chains which might be delivered by separated mRNA Constructs, such proteins would be defined as one Target.

1.61"Technology" means collectively Patents and Know-How.

1.62"Term" has the meaning set forth in Section 10.1.

1.63"Territory" means worldwide.

1.64"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.

1.65"Third Party Claims" has the meaning set forth in Section 9.6(a).  

1.66“Valid Claim” means a claim of 

(a)an issued and unexpired patent (as may be extended through supplementary protection certificate or patent term extension) or 

(b)a pending patent application, provided, however, that once the priority date or earliest filing date to which the pending patent application refers is more than seven years old, such claim shall not constitute a Valid Claim for purposes of this License Agreement anymore, unless and until a patent issues with such claim  

 

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included in the Arcturus Technology Patents, which claim has not been revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable decision (or decision from which no appeal was taken within the allowable time period) and has not been disclaimed, denied, abandoned or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise.   

2.License Grants; Technology Transfer.

2.1Licenses by Arcturus. Subject to the terms and conditions of this License Agreement, Arcturus hereby grants to CureVac a non-exclusive license, with the right to sublicense in multiple tiers under the Arcturus Technology Patents and the Arcturus Know-How, in each case solely to develop, have developed, make, have made, use and have used, sell, offer for sale, have sold and import and have imported Licensed Products in the Field of Use in the Territory.  Arcturus covenants that, except as required by the Pre-Existing Licensing Restriction, Arcturus will not grant to any Third Party any additional licenses under the Arcturus Technology to develop, have developed, make, have made, use and have used, sell, offer for sale, have sold and import and have imported Licensed Products (or any LMD Product directed to the Target) in the Field of Use in the Territory.

2.2Sublicensing Rights.

(a)CureVac Sublicenses.  The licenses granted in Section 2.1 may be sublicensed (with the right to sublicense through multiple tiers), in full or in part, by CureVac, its Affiliates or Sublicensees to CureVac's Affiliates and Third Parties provided, that for any sublicense:

(i)Each sublicense will be in writing (provided, however, that not each sublicense to Affiliates must be in writing) and on terms consistent with and subject to the terms of this License Agreement, including but not limited to the limitations on patent prosecution, enforcement and defense rights of such Sublicensee as set forth in Sections 6.1(d) and 7.2(a);

(ii)CureVac will be responsible for any and all obligations of such Sublicensee (including Affiliates and Sublicensees) as if such Sublicensee were CureVac hereunder; 

(iii)CureVac provide to Arcturus a copy of such sublicense agreement within thirty (30) days of execution (which copy may be redacted for terms that are not otherwise required to confirm conformance with the terms of this License Agreement); and

(iv)Any sublicense granted by CureVac (and any further sublicenses) to any rights licensed to it hereunder shall terminate immediately upon the termination of this License Agreement, provided that for sublicense to a Third Party, such sublicensed rights shall not terminate if, as of the effective date of such termination pursuant to Sections 10.2, 10.3(a) or 10.4, such Sublicensee is not in material default of its obligations under its sublicense agreement, and within [...***...] days of such termination and the disclosure of this License Agreement to 

 

 

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the Sublicensee, the Sublicensee agrees in writing to be bound directly to Arcturus under a license agreement substantially similar to this License Agreement with respect to the rights sublicensed hereunder, substituting such Sublicensee for CureVac.

(b)Subcontractors.  For clarity purposes, CureVac is entitled to engage contract research organizations and contract manufacturing organizations for the development and manufacture of Licensed Products on behalf of CureVac. To the extent such contract organizations require a license to perform such subcontracted activities under applicable Laws, CureVac is entitled to grant a limited license solely to perform the work for which the subcontractor is engaged, without an obligation to meet the conditions of Section 2.2 (a)(iii).

(c)Technology Transfer. Following the License Agreement Effective Date, Arcturus will use Diligent Efforts to transfer the formulation process for the Licensed Products that are intended to express the Target to CureVac or a reputable and competent GMP manufacturer selected by CureVac and reasonably acceptable to Arcturus.  Upon written request by CureVac, Arcturus will conduct a technology transfer to CureVac and/or its designee(s). Arcturus will make its personnel available without charge for a total of [...***...] hours during normal working hours for such transfer, and for additional hours in excess of [...***...] up to a total of [...***...] hours to be invoiced monthly at the then current FTE Cost.  Such designee(s) may be an Affiliate, sublicensee or Third Party manufacturers selected by CureVac and reasonably acceptable to Arcturus, and which Third Party manufacturers may also be a backup manufacturer or a second manufacturer of Licensed Products as required for the applicable transferee of the then-current process.  CureVac shall reimburse Arcturus for the reasonable cost (including internal FTE Cost) incurred to conduct such technology transfer as specified above.     

2.3Updates to Appendix 1.4; Exclusion of Certain Patents.  Arcturus shall notify CureVac at least once every [...***...] months of Patents that are added to the Arcturus Technology following the License Agreement Effective Date or any Patents that have been abandoned or discontinued in accordance with the terms of this License Agreement.  Appendix 1.4 shall be deemed automatically updated to include any such added Patents, provided that with written notice to Arcturus, CureVac may elect upon [...***...] days’ irrevocable written notice to Arcturus to exclude any particular Arcturus Technology Patents.  Following any such written notice by CureVac, upon the expiration of the notice period the identified Arcturus Technology Patents that CureVac specifies for exclusion from this License Agreement will no longer be licensed to CureVac hereunder, and CureVac shall not have any rights (including rights pursuant to this Agreement) under such Arcturus Technology Patents nor obligations hereunder with respect to such Arcturus Technology Patents. For clarity, in the event that the Licensed Product is subsequently determined to be covered or otherwise infringe a Valid Claim of any excluded patent hereunder, then such infringement shall be deemed to be a material breach of this License Agreement by CureVac.

2.4Documents and Declarations. At CureVac’s reasonable request and cost and expense, Arcturus shall execute all documents, deliver declarations regarding the licenses granted hereunder, and Arcturus shall reasonably cooperate with CureVac to the extent such documents, declarations and/or cooperation are required to give effect to this License Agreement and/or for the recording or registration of the licenses granted hereunder at the
 

 

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various patent offices in the Territory for the benefit of CureVac, its Affiliates or their Sublicensees. 

2.5Diligence; Reporting.  CureVac shall use Diligent Efforts to develop, manufacture and commercialize Licensed Products in the Field of Use in the Territory, and shall keep Arcturus reasonably informed as to the progress and results of its and its Affiliates’ and Sublicensees’ development, manufacture and commercialization of the Licensed Product.  Without limiting the foregoing, CureVac shall provide Arcturus with a written report of the development, manufacture and commercialization of the Licensed Product within [...***...] days after the end of each calendar year, and shall promptly respond to Arcturus reasonable questions or requests for additional information relating to such activities.  

2.6Compliance.  CureVac shall at all times comply with all applicable Laws (including anti-bribery laws) in the development, manufacture and commercialization of the Licensed Product and the performance of its other obligations under this License Agreement, and shall not use any employee or consultant who has been debarred by any Regulatory Authority or, to CureVac’s knowledge, is the subject of debarment proceedings by a regulatory authority.    

2.7Updates.  Arcturus shall inform CureVac within [...***...] Business Days of intellectual property matters affecting the Arcturus Technology Patents and the Arcturus Know-How of which it becomes aware that would reasonably be considered to negatively impact the rights of CureVac pursuant to this Agreement.

2.8Material. CureVac shall have the right to retain Material provided by Arcturus under the Development and Option Agreement, to the extent such Material is necessary or useful for the exercise of a CureVac's rights or obligations under this License Agreement. Following the License Agreement Effective Date, only the provisions of this License Agreement, but not of the Development and Option Agreement, shall apply in relation to such Material.

3.License Limitations.  

3.1Reserved Rights. No licenses or other rights are granted by Arcturus hereunder to use any trademark, trade name, trade dress or service mark owned or otherwise Controlled by Arcturus or any of its Affiliates.  All licenses and other rights are or shall be granted only as expressly provided in this License Agreement, and no other licenses or other rights is or shall be created or granted by either Party hereunder by implication, estoppel or otherwise.  CureVac shall not, and shall not permit any of its Affiliates or Sublicensees to, practice or use any Arcturus Technology outside of the scope of the license granted to it under Section 2.1 or in contravention of Section 3.1.  Arcturus retains the exclusive right to practice, license and otherwise exploit the Arcturus Technology outside the scope of the licenses granted to CureVac under Section 2.1 and in an event to practice any rights that are not exclusive pursuant to Section 2.1.

3.2Other Licenses. Arcturus acknowledges the rights granted to CureVac pursuant to this Agreement and shall not grant licenses under Arcturus Technology to Third Parties that are in conflict with this License Agreement it being understood that a license to enable or implement any Pre-

 

 

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Existing Licensing Restriction with respect to the Target shall not be deemed a conflict hereunder. In addition, Arcturus shall use Diligent Efforts to undertake that any licenses obtained from Third Parties will be sublicensable to CureVac, to the extent required or useful for the Licensed Product, provided that CureVac shall be responsible for an allocable portion of the payment and obligations that may be required in order to obtain rights with respect to the Licensed Product pursuant to such Third Party agreement.  

4.Payments and Royalties. 

4.1Milestone Payments.  CureVac will make milestone payments (each, a "Milestone Payment") to Arcturus upon the first occurrence of each of the milestone events (each, a "Milestone Event") by Licensed Product as set forth below in this Section 4.1.  CureVac will notify Arcturus of the achievement of each Milestone Event (whether achieved by CureVac, its Affiliates or Sublicensees) within (i) [...***...] Business Days of such achievement, if the Milestone Event is achieved by CureVac or its Affiliates, or (ii) [...***...] Business Days of the receipt by CureVac of a notification about the achievement, if the Milestone Event is achieved by a Sublicensee.  

Each Milestone Payment will be non-refundable, non-creditable and payable to Arcturus by CureVac within [...***...] days of delivery of an invoice from Arcturus following notification from CureVac pursuant to the preceding paragraph, provided that if no such notification is timely provided by CureVac, the Milestone Payment shall be deemed payable [...***...] days after (A) the achievement of such Milestone Event, if the Milestone Event is achieved by CureVac or its Affiliates, or (B) after the receipt by CureVac of the notification from CureVac pursuant to Section 4.1(ii). For clarity, the term “non-refundable” is not intended to limit either Party’s rights to pursue damages arising from a breach of this Agreement.

If one or more of the Milestone Events set forth below are not achieved or not required for any reason, the payment for such skipped Milestone Event will be due at the same time as the payment for the next achieved Milestone Event. For clarity: [...***...].

For clarity, to the extent that a Licensed Product is initiated against a Rare Disease Target and later expanded to a non-Rare Disease Target, then any and all Milestone Payments not previously made shall be due and payable upon the achievement of the next non-Rare Disease Milestone (e.g., [...***...]).

 

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Milestone Event
	
Milestone Payment

 

	
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[...***...]
	
[...***...]

	
[...***...]
	
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[...***...]
	
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[...***...]
	
[...***...]

	
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[...***...]
	
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Non-rare Disease Targets
	
 

	
[...***...]
	
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[...***...]

 

4.2Sublicensing Revenues.If within twenty-four (24) months after the License Agreement Effective Date CureVac grants a sublicense to a Third Party under this License Agreement for the development and commercialization of Licensed Products, then CureVac will pay to Arcturus [...***...] of all Sublicense Income actually received by CureVac, to the extent the Sublicense Income exceeds the Option Exercise Fee paid by CureVac under the Development and Option Agreement to exercise the Option for this License Agreement and the Milestone Payments paid by CureVac under this License Agreement.  The payments will be made within [...***...] days after receipt by CureVac from the Third Party.  For purposes of clarity, if CureVac grants a sublicense to Third Parties later than [...***...] months after the License Agreement Effective Date, CureVac will not owe any Sublicensing Income to Arcturus. 

4.3Royalties.

(a)Royalty.  Subject to the remainder of this Section 4.3, on a country-by-country basis and a Licensed Product-by-Licensed Product basis, CureVac will pay to Arcturus (i) a royalty of [...***...] of Net Sales of the Licensed Product (ii) 

 

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as well as of any net sales milestones (without offset for any reductions pursuant to Section 4.3(b)) for such Licensed Product received from the Sublicensee. 

(b)Third Party Payments and Royalty Reductions.  If CureVac or its Affiliate or Sublicensee, in its reasonable judgment, considers it necessary or useful to obtain a license from any Third Party under any LMD Technology that Covers a Licensed Product in order to develop, manufacture or commercialize such Licensed Product, the amount of CureVac’s royalty obligations under Sections 4.3(a) will be reduced by [...***...] of the amount of the upfront, milestone and royalty payments made to such Third Party on account of the development, manufacture or commercialization of such Licensed Product ("Royalty Reductions"), provided, however, that any Royalty Reduction shall not result in less than the minimum royalty due to Arcturus under Section (c) below. 

(c)Minimum Royalty.  In no event will the Royalty payable by CureVac to Arcturus for any Licensed Product be less than (i) [...***...] if the reduction in subsection (e) does not apply; or (ii) [...***...] if the reduction in subsection (e) also applies. 

(d)Term. The royalty term ("Royalty Term") shall expire on a country-by-country and Licensed Product-by-Licensed Product basis, on the last to occur of (i) expiration of the last to expire Valid Claim in the Arcturus Technology that, but for the license described herein from Arcturus to CureVac for the applicable Licensed Product, is infringed by the making, using or sale of such Licensed Product, (ii) expiration of any period of data exclusivity, market exclusivity or supplemental protection certificates covering the Licensed Product in such country; and (iii) [...***...] years after First Commercial Sale of Licensed Product in such country. For the avoidance of doubt, upon exhaustion of the obligation to pay Royalties to Arcturus as set forth above the continued use of Arcturus Know-How comprised in the Arcturus Technology for the development, manufacture and/or sale of the Licensed Product shall not, in and of itself, obligate CureVac to pay further royalties to Arcturus. Thereafter, CureVac's license under Section 2.1 will become irrevocable, perpetual, fully paid-up and royalty-free on a country-by-country and Licensed Product-by-Licensed Product basis. 

(e)Know-How Royalty. On a country-by-country, and a Licensed -Product-by-Licensed Product basis, in the event that during the Royalty Term a Licensed Product is not covered by a Valid Claim, the royalty otherwise payable for such Licensed Product, after the Royalty Reductions above, will be reduced by [...***...].

4.4Payment Terms.

(a)Manner of Payment.  All payments to be made by CureVac hereunder will be made in U.S. dollars by wire transfer to such bank account as Arcturus may designate.

(b)Records and Audits. CureVac shall keep, and shall cause each of its Affiliates and Sublicensees, as applicable, to keep adequate books and records of accounting for the purpose of calculating all royalties and other amounts payable to Arcturus hereunder.  For the [...***...] years next following the end of the calendar 

 

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year to which each shall pertain, such books and records of accounting (including those of CureVac’s Affiliates and Sublicensees) shall be kept at each of their principal places of business and shall be open for inspection at reasonable times and upon reasonable notice by an independent certified accountant selected by Arcturus, and which is reasonably acceptable to CureVac, for the sole purpose of inspecting the Net Sales calculations and supporting details to the extent reasonably necessary and resulting royalties and other amounts due to Arcturus under this License Agreement.  In no event shall such inspections be conducted hereunder more frequently than once every [...***...] months.  Such accountant must have executed and delivered to CureVac and its Affiliates, a confidentiality agreement as reasonably requested by CureVac, which shall include provisions limiting such accountant’s disclosure to Arcturus to only the results and basis for such results of such inspection.  The results of such inspection, if any, shall be binding on both Parties.  Any underpayments plus interest from the original due date shall be paid by CureVac within [...***...] days of notification of the results of such inspection.  Any overpayments shall be fully creditable against amounts payable in subsequent payment periods.  Arcturus shall pay for such inspections, except that in the event there is any upward adjustment in aggregate royalties and other amounts payable for any calendar year shown by such inspection of more than [...***...] of the amount paid, CureVac shall reimburse Arcturus for any reasonable out-of-pocket costs of such accountant.

(c)Reports and Royalty Payments.  For as long as royalties are due under Section 4.3, CureVac shall furnish to Arcturus written reports. 

(i)Reports shall be provided within [...***...] days of (1) the end of the Calendar Quarter if Net Sales are generated by CureVac and its Affiliates, and (2) the receipt of corresponding information (which may be estimated) from Sublicensees but in any event within [...***...] days of the end of the Calendar Quarter with respect to Net Sales generated by such Sublicensees.  

(ii)Royalty payments for each Calendar Quarter shall be due within [...***...] Business Days of delivery of an invoice from Arcturus following submission of a royalty report from CureVac, but only subject to the prior receipt by CureVac of the corresponding royalty payment from the Sublicensee, if applicable; however such royalty payments due to Arcturus shall not be reduced by deductions which exceed those covered by the Net Sales definition according to Section 1.43.  

(iii)The report shall include, at a minimum, the following information for the applicable Calendar Quarter for each Licensed Product if Net Sales are generated by CureVac and its Affiliates: (i) the gross sales by country reasonably required for the calculation of royalty payments due according to this Agreement, (ii) the calculation in reasonable detail of the Net Sales from such gross sales amounts, including the deductions pursuant to the definition of Net Sales and the amounts of any credits or reductions permitted by Section 4.2; and (iii) the computations for any Arcturus currency conversions pursuant to subsection (d) below.  

(iv)CureVac will require each Sublicensee to share with Arcturus the information listed in the foregoing clauses as it relates to Net
 

 

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Sales made by such Sublicensee, and to the extent practicable, will include such Sublicensee information in such report; provided that the level of detail with respect to the items subject to report pursuant to Section 4.4(c)(iii) shall be limited to the information that CureVac actually receives from any such Sublicensee. All such reports shall be considered the Confidential Information of CureVac, subject to Section 4.4(b).  

(d)Currency Exchange.  With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the amounts due to Arcturus hereunder will be expressed in U.S. dollars.  With respect to Net Sales invoiced in a currency other than U.S. dollars, payments will be calculated based on the average of the closing exchange rates reported by the Wall Street Journal (http://quotes.wsj.com/fx/EURUSD), or such other source as the Parties may agree in writing, of the applicable reporting period for the payment due. 

(e)Taxes.  CureVac may withhold from payments due to Arcturus amounts for payment of any withholding tax that is required by Law to be paid to any taxing authority with respect to such payments.  CureVac will provide Arcturus all relevant documents and correspondence, and will also provide to Arcturus any other cooperation or assistance on a reasonable basis as may be necessary to enable Arcturus to claim exemption from such withholding taxes and to receive a refund of such withholding tax or claim a foreign tax credit.  CureVac will give proper evidence from time to time as to the payment of any such tax.  The Parties will cooperate with each other in seeking deductions under any double taxation or other similar treaty or agreement from time to time in force.  CureVac shall use Diligent Efforts to minimize withholding taxes. In the event that any tax deduction or withholding obligation arises or increases as a direct result of any reincorporation, redomiciliation, change in source of payments under this Agreement or other similar corporate structuring actions undertaken by CureVac from and after the License Agreement Effective Date, then CureVac shall increase the payment (in respect of which such deduction or withholding of tax is required to be made) to ensure that Arcturus receives an amount equal to the amount that it would have received had no such action occurred. Apart from any such permitted withholding and those deductions expressly included in the definition of Net Sales, the amounts payable by CureVac to Arcturus hereunder will not be reduced on account of any taxes, charges, duties or other levies. Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this License Agreement.

(f)Blocked Payments.  In the event that, by reason of applicable law in any country, it becomes impossible or illegal for CureVac or its Affiliates or Sublicensees to transfer, or have transferred on its behalf, payments owed to Arcturus hereunder, CureVac will promptly notify Arcturus of the conditions preventing such transfer and such payments will be deposited in local currency in the relevant country to the credit of Arcturus in a recognized banking institution proposed by Arcturus and reasonably acceptable to CureVac or, if none is proposed by Arcturus within a period of [...***...] days, in a recognized banking institution selected by CureVac or its Affiliate or Sublicensee, as the case may be, and identified in a written notice given to Arcturus.

(g)Interest Due.  If any payment due to Arcturus under this License Agreement is overdue (and is not subject to a good faith dispute), then CureVac will 

 

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pay interest thereon (before and after any judgment) at an annual rate of the lesser of [...***...] above the prime rate as reported in The Wall Street Journal, Eastern Edition, and the maximum rate permitted by applicable Law, such interest to run from the date upon which payment of such sum became due until payment thereof in full together with such interest.

(h)Mutual Convenience of the Parties.  The royalty and other payment obligations set forth hereunder have been agreed to by the Parties for the purpose of reflecting and advancing their mutual convenience, including the ease of calculating and paying royalties and other amounts to Arcturus.

5.Ownership and Inventorship of IP.

5.1Solely-Owned IP.  As between the Parties and subject to Section 5.3, each Party will own and retain all right, title and interest in and to any and all Know-How and Patents arising therefrom that are discovered, created, conceived, developed or reduced to practice under or in connection with this License Agreement (the “Inventions”) solely by or on behalf of such Party.  Subject to the licenses hereunder and the other terms and conditions of this License Agreement or any other agreement between the Parties, each Party will be solely responsible for the prosecution and maintenance, and the enforcement and defense, of its solely-owned Patents.

5.2Inventorship.  Inventorship of all Inventions shall be determined in accordance with applicable laws. Each Party will ensure that each employee, consultant and subcontractor conducting any activities under this License Agreement on behalf of such Party will be subject to written agreements to assign to such Party all of its right, title and interest in and to the Inventions so that such Party can comply with its obligations with respect to the ownership allocation of the Inventions as set forth below.  In addition, each Party shall be solely responsible for payments that may be required to any of such Party’s employees or consultants and subcontractors in connection with or with respect to such agreements, including moral rights payments. 

5.3Ownership.  Notwithstanding inventorship in the first instance pursuant to Section 5.2, ownership of all Inventions, as between the Parties, will be assigned by the Parties as follows: (a) Arcturus will solely own all Inventions that are improvements solely to the LMD Technology (“LMD Inventions”), and (b) CureVac will solely own all Inventions that are improvements solely to the mRNA Technology (“mRNA Inventions”).  Specifically, CureVac hereby assigns to Arcturus all of its right, title and interest in and to any and all LMD Inventions, and agrees to take such actions reasonably requested by Arcturus to evidence such assignment.  Arcturus hereby assigns to CureVac all of its right, title and interest in and to any and all mRNA Inventions, and agrees to take such actions reasonably requested by CureVac to evidence such assignment. For clarity, the assignment provisions with respect to mRNA Inventions are restricted solely to improvements to the mRNA Technology.

6.Patent Prosecution and Maintenance.

6.1Generally.  

 

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(a)As between the Parties and subject to Section 6.2 below, Arcturus (or its Third Party licensor, if any) will have the sole right, at its sole costs, to prosecute and maintain Arcturus Technology Patents, other than the Joint Interest Patents. 

(b)In relation to any Arcturus Technology Patents that specifically claim the Licensed Product, prior to filing, Arcturus will provide CureVac with copies of all specific claims relevant to the Licensed Product in such applications for all such Arcturus Technology Patents, and all other material submissions and correspondence relating to such claims with any patent authorities regarding such Arcturus Technology Patents, in sufficient time (not to be less than [...***...] days) to allow for review and comment by CureVac.  In addition, Arcturus will provide CureVac and its counsel with an opportunity to consult with Arcturus and its counsel regarding prosecution and maintenance of any such Arcturus Technology Patents, and Arcturus will not unreasonably refuse to address all reasonable comments timely made by or on behalf of CureVac.

(c)As between the Parties, CureVac will have the first right to prosecute and maintain any and all Joint Interest Patents and the Parties will share equally all costs incurred by CureVac in connection with such efforts. Prior to filing, CureVac will provide Arcturus with copies of all applications for such Joint Interest Patents, and all other material submissions and correspondence with any patent authorities regarding such Joint Interest Patents, in sufficient time (not to be less than [...***...] days) to allow for review and comment by Arcturus.  In addition, CureVac will provide Arcturus and its counsel with an opportunity to consult with CureVac and its counsel regarding prosecution and maintenance of any such Joint Interest Patents, and CureVac will consider in good faith all reasonable comments timely made by or on behalf of Arcturus.  

(d)In the event that CureVac or its Affiliates grants a sublicense pursuant to Section 2.2, as between CureVac and any such Sublicensee, 

	
 
	
(i)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent does not specifically claim the Licensed Product, CureVac shall retain its rights to prosecute any such sublicensed Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 6.1(b) and 6.1(c); provided, however, that such Sublicense may provide for instruction by the Sublicensee of CureVac’s exercise of its rights to prosecute any sublicensed Arcturus Technology Patent or Joint Interest Patent;

	
 
	
(ii)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent specifically claims the Licensed Product  (i.e., with respect to the claims limited to the Licensed Product, but not the broader claims that cover other products or potential products in such Arcturus Technology Patents or Joint Interest Patents), CureVac shall have the right to sublicense its rights to prosecute any such sublicensed Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 6.1(b) and 6.1(c) to the Sublicensee.

6.2Election Not to Prosecute or Maintain or Pay Patent Costs.

(a)If Arcturus elects not to pay its share of the Patent Costs associated with prosecution or maintenance of any Joint Interest Patents, then it shall assign its co-ownership share in such Patents to CureVac and the respective Patent shall no longer be considered a Joint Interest Patent.

 

***Confidential Treatment Requested

 

(b)By CureVac. If CureVac elects not (i) to file, prosecute or maintain any Joint Interest Patents for which it is responsible under Section 6.1 in any particular country before the applicable filing deadline or continue such activities once filed in a particular country, or (ii) to pay its share of the Patent Costs associated with prosecution or maintenance of any Joint Interest Patents then in each such case CureVac will so notify Arcturus, promptly in writing and in good time to enable Arcturus to meet any deadlines by which an action must be taken to preserve such Joint Interest Patent in such country at Arcturus' expense, if Arcturus so requests. Upon receipt of each such notice by CureVac, Arcturus will have the right, but not the obligation, to notify CureVac in writing on a timely basis that CureVac should transfer the prosecution or maintenance of such Joint Interest Patent to Arcturus and at Arcturus' sole expense. Arcturus is entitled to discontinue the payment of Patent Costs for any Joint Interest Patents at any time, provided that it will so notify CureVac in writing in time for such discontinuance. In the event that Arcturus assumes the prosecution and maintenance of any such Joint Interest Patent, then CureVac would make available to Arcturus all documentation and correspondence with respect to such Joint Interest Patent, such Joint Interest Patent shall no longer be licensed under this Agreement with respect to the Licensed Product.

6.3Cooperation.  Each Party will reasonably cooperate with the other Party in those activities involving the Arcturus Technology Patents and Joint Interest Patents set forth in Sections 6.1 and 6.2.  Such cooperation includes promptly executing all documents, or requiring inventors, subcontractors, employees and consultants and agents of CureVac and Arcturus and their respective Affiliates and Sublicensees to execute all documents, as reasonable and appropriate so as to enable such activities in respect of any such Arcturus Technology Patents in any country.

7.Patent Enforcement and Defense.  

7.1Notice.  To the extent not in breach of an obligation of confidentiality, each Party will promptly notify, in writing, the other Party upon learning of any actual or suspected infringement of any Arcturus Technology Patents by a Third Party, or of any claim of invalidity, unenforceability, or non-infringement of any Arcturus Technology Patents, and will, along with such notice, supply the other Party with any evidence in its possession pertaining thereto.

7.2Enforcement and Defense.

(a)Enforcement.  

	
 
	
(i)
	
As between the Parties, 

(1)Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up enforcement rights), at its cost, will have the first right, but not the obligation, to seek to abate any infringement of the Arcturus Technology Patents (other than those in subsection (2)) by a Third Party, or to file suit against any such Third Party for such infringement, and

(2)CureVac (or its sublicensee, if any) shall have the first right, but not the obligation, to take action or bring suit and bear all expenses against such Third Party infringer with respect to: (A) Joint Interest Patents; and/or (B) any other Arcturus 

 

Technology Patents that, on the date of first notice of such infringement, specifically claim the Licensed Product but are not necessary or useful for the research, development, manufacturing and commercialization of any product comprising Arcturus Technology that is exclusively licensed or optioned to a Third Party or is in Late Stage Development or being commercialized by Arcturus or its Affiliates. 

(b)If the Party first responsible for such enforcement elects not to take action or to bring suit to prosecute such infringement or to continue such action or suit, it shall notify the other Party of such election within [...***...] days after become aware of or receipt of the notice of the infringement or after the election to stop any such action or suit. If after the expiration of the [...***...] days period (or, if earlier, the date upon which the responsible Party provides written notice that it does not plan to bring such action) the responsible Party has neither obtained a discontinuance of infringement nor filed suit against any such Third Party infringer of such Patent, then 

	
 
	
(i)
	
in the case of an election by Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up enforcement rights) not to prosecute an infringement of an Arcturus Technology Patent specifically claiming the Licensed Product, CureVac shall have the right, but not the obligation, to take action or bring suit against such Third Party infringer of such Patents, provided that the infringement is with respect to a product related to the Target(s) under this License Agreement, and further provided that CureVac shall bear all the expenses of such suit and 

	
 
	
(ii)
	
in the case of a CureVac election not to prosecute an infringement of a Joint Interest Patents or Arcturus Technology Patent with respect to which CureVac has rights to take first action, (i) Arcturus shall have the right, but not the obligation, to take action or bring suit against such Third Party infringer of such Patents, provided that Arcturus shall bear all the expenses of such suit,and CureVac shall join Arcturus in such suit to the extent legally required, unless (ii) CureVac decides to assign its interest in such Joint Interest Patent – on a country-by-country basis - to Arcturus and such Joint Interest Patent shall become an Arcturus Technology Patent and no longer subject to license pursuant to this License Agreement. 

(c)Defense.  

	
 
	
(i)
	
As between the Parties, 

(1)Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up defense rights) will have the first right, but not the obligation, at its sole costs, to defend against a declaratory judgment action or other action challenging any Arcturus Technology Patents, other than: (i) Joint Interest Patents; and (ii) any other Arcturus Technology Patents that, on the date of first notice of such action, specifically claim the Licensed Product but are not necessary or useful for the research, development, manufacturing and commercialization of any product comprising Arcturus Technology that is exclusively licensed or optioned to a Third Party or is in Late Stage Development or being commercialized by Arcturus or its Affiliates, and

 

 

***Confidential Treatment Requested

 

(2)CureVac shall have the first right, but not the obligation, at its sole costs, to defend against a declaratory judgment action or other action challenging Joint Interest Patents as well as such other Arcturus Technology Patents that specifically claim the Licensed Product. 

	
 
	
(ii)
	
If the Party first responsible for such defense does not take steps to defend within a commercially reasonably time, or elects not to continue any such defense (in which case it will promptly provide notice thereof to the other Party), then (i) in the case of an election by Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up defense rights) not to defend an Arcturus Technology Patent specifically claiming the Licensed Product, CureVac shall have the right, but not the obligation, to defend any Arcturus Technology Patents that cover Licensed Product and no other product licensed or optioned by Arcturus to a Third Party or commercialized by Arcturus, provided that CureVac shall bear all the expenses of such suit and (ii) in the case of a CureVac election not to defend the Joint Interest Patents, Arcturus shall have the right, but not the obligation, to take action or bring suit to defend such Patents, provided that Arcturus shall bear all the expenses of such suit. Notwithstanding the foregoing, in the event that CureVac elects not to prosecute an infringement of a Joint Interest Patent, then CureVac shall, at its discretion, either (i) assign such Joint Interest Patent to Arcturus – on a country-by-country basis -, which shall become an Arcturus Technology Patent and no longer subject to license pursuant to this License Agreement or (ii) join Arcturus in such suit to the extent legally required.

(d)Notwithstanding the foregoing, any response to a Third Party infringer's counterclaim of invalidity or unenforceability of any Arcturus Technology Patents shall be controlled by the Party who controls the relevant enforcement proceeding pursuant to Section 7.2 (a) unless otherwise mutually agreed by the Parties.   

(e)In the event that CureVac or its Affiliates grants a sublicense pursuant to Section 2.2, as between CureVac and any such Sublicensee, 

	
 
	
(i)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent does not specifically claim the Licensed Product, CureVac shall retain its rights to enforce and defend Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d); provided, however, that CureVac’s exercise of its rights to enforce or defend such Arcturus Technology Patent or Joint Interest Patent may be instructed by a Sublicensee;

	
 
	
(ii)
	
 to the extent any such Arcturus Technology Patent or Joint Interest Patent specifically claims the Licensed Product, CureVac shall have the right to sublicense its rights to enforce and defend Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) to the Sublicensee.

(f)Withdrawal, Cooperation and Participation.  With respect to any infringement or defensive action identified above in this Section 7.2 which may be controlled by either CureVac or Arcturus:

 

 

	
 
	
(i)
	
If the controlling Party ceases to pursue or withdraws from such action, it will promptly notify the other Party (in good time to enable the other Party to meet any deadlines by which any action must be taken to preserve any rights in such infringement or defensive action) and such other Party may substitute itself for the withdrawing Party, shall be granted the right and standing to sue in the other Party's name, and proceed under the terms and conditions of this Section 7.2.

	
 
	
(ii)
	
The non-controlling Party will cooperate with the Party controlling any such action (as may be reasonably requested by the controlling Party), including (A) providing access to relevant documents and other evidence, (B) making its and its Affiliates and licensees and Sublicensees and all of their respective employees, subcontractors, consultants and agents available at reasonable business hours and for reasonable periods of time, but only to the extent relevant to such action, and (C) if necessary, by being joined as a party, subject for this clause (C) to the controlling Party agreeing to indemnify such non-controlling Party for its involvement as a named party in such action and paying those Patent Costs incurred by such Party in connection with such joinder.  The Party controlling any such action will keep the other Party updated with respect to any such action, including providing copies of all documents received or filed in connection with any such action.

	
 
	
(iii)
	
Each Party will have the right to participate or otherwise be involved in any such action controlled by the other Party, in each case at the participating (i.e., non-controlling) Party’s sole cost and expense.  If a Party elects to so participate or be involved, the controlling Party will provide the participating Party and its counsel with an opportunity to consult with the controlling Party and its counsel regarding the prosecution of such action (including reviewing the contents of any correspondence, legal papers or other documents related thereto), and the controlling Party will take into account reasonable requests of the participating Party regarding such enforcement or defense.

(g)Settlement.  Neither Party will settle or consent to an adverse judgment in any action described in this Section 7.2 and controlled by such Party, including any judgment which affects the scope, validity or enforcement of any Arcturus Technology Patents involved therewith, without the prior written consent of the other Party (such consent not to be unreasonably withheld, delayed or conditioned).

(h)Damages.  Unless otherwise agreed by the Parties, all monies recovered upon the final judgment or settlement of any action which may be controlled by either CureVac or Arcturus and described in Section 7.2(a) or 7.2(c) in each case will be used first to reimburse the controlling Party, and thereafter the non-controlling Party, for each of their out-of-pocket costs and expenses relating to the action, with the balance of any such recovery to be divided as follows:

	
 
	
(i)
	
To the extent the action involves a Third Party’s research, development, manufacture or commercialization of any product other than the Licensed Product (or a LMD product directed to the same 

 

Target as the Licensed Product), Arcturus shall retain all such recovery; and

	
 
	
(ii)
	
To the extent the action involves a Third Party’s research, development, manufacture or commercialization of the Licensed Product (or a LMD product directed to the same Target as the Licensed Product), CureVac will retain such recovery, less the amount of royalties payable to Arcturus by treating such recovery as "Net Sales" hereunder.  

(i)Patent Marking.  CureVac shall mark all Licensed Product if and to the extent required by the applicable patent marking laws, and shall require all of its Affiliates and sublicensees to do the same. 

8.Confidentiality.

8.1Confidential Information.  Each Party ("Disclosing Party") may disclose to the other Party ("Receiving Party"), and Receiving Party may acquire during the course and conduct of activities under this License Agreement, certain proprietary or confidential information of Disclosing Party in connection with this License Agreement.  

8.2Restrictions.  During the Term and for [...***...] years thereafter, Receiving Party will keep all Disclosing Party’s Confidential Information in confidence with the same degree of care with which Receiving Party holds its own confidential information, but in no event less than reasonable care.  Receiving Party will not use Disclosing Party’s Confidential Information except for in connection with the performance of its obligations and exercise of its rights under this License Agreement.  Receiving Party has the right to disclose Disclosing Party’s Confidential Information without Disclosing Party’s prior written consent to Receiving Party’s Affiliates, and each of their employees, subcontractors, consultants and agents who have a need to know such Confidential Information in order to perform their obligations and exercise their rights under this License Agreement and who are under written obligation to comply with the restrictions on use and disclosure that are no less restrictive than those set forth in this Section 8.2.  Receiving Party assumes responsibility for such entities and persons maintaining Disclosing Party’s Confidential Information in confidence and using same only for the purposes described herein.

8.3Exceptions.  Receiving Party’s obligation of nondisclosure and the limitations upon the right to use the Disclosing Party’s Confidential Information will not apply to a specific portion of the Disclosing Party’s Confidential Information to the extent that Receiving Party can demonstrate that such portion: (i) was known to Receiving Party or any of its Affiliates prior to the time of disclosure by the Disclosing Party without obligation of confidentiality; (ii) is or becomes public knowledge through no action or omission of Receiving Party or any of its Affiliates; (iii) is obtained on a non-confidential basis by Receiving Party or any of its Affiliates from a Third Party who to Receiving Party’s knowledge is lawfully in possession thereof (or if possession is obviously unlawful) and under no obligation of confidentiality to Disclosing Party; or (iv) has been independently developed by or on behalf of Receiving Party or any of its Affiliates without the aid, application or use of Disclosing Party’s Confidential Information as documented by the internal records of the Receiving Party.

8.4Permitted Disclosures.  Notwithstanding the obligations set forth in Section 8.2, Receiving Party may disclose Disclosing Party’s Confidential Information (including this 

 

***Confidential Treatment Requested

 

License Agreement and the terms herein) to the extent (and only to the extent) such disclosure is reasonably necessary in the following instances:

(a)in order to comply with applicable Law (including any securities Law or regulation or the rules of a securities exchange) or with a legal or administrative proceeding;

(b)in connection with prosecuting or defending litigation, and filing, prosecuting and enforcing Arcturus Technology Patents in connection with Receiving Party’s rights and obligations pursuant to this License Agreement; 

(c)to attorneys, accountants, auditors, acquirers, licensees, partners or permitted assignees; financial advisors, investors and lenders, including potential acquirers, licensees, partners, assignees, financial advisors, investors and lenders; and

(d)in the case of CureVac, to (i) subcontractors; or (ii) potential licensees or collaboration partners, but only such information that is reasonably necessary or useful for the subcontractor to perform the subcontracted work or for the potential licensee or partner to evaluate the applicable Licensed Product, and  LMD or Licensed Product manufacturing processes;

provided that (1) where reasonably possible, Receiving Party will notify Disclosing Party of Receiving Party’s intent to make any disclosure pursuant to subsections (a) and (b) sufficiently prior to making such disclosure so as to allow Disclosing Party reasonably adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed, and (2) with respect to subsections (c), each of those persons or entities are required to comply with the restrictions on use and disclosure in Section 8.2 (other than financial advisors, investors and lenders, which must be bound prior to disclosure by commercially reasonable obligations of confidentiality). 

8.5Return of Confidential Information. Upon expiry or earlier termination of this License Agreement, upon written request of a Party (such request, if made, to be made within three (3) months of such expiry or termination) the other Party will destroy or return (as shall be specified in such request) to the requesting Party all copies of the Confidential Information of the requesting Party; provided that the Party may retain: (i) one copy of such Confidential Information for record-keeping purposes, for the sole purpose of ensuring compliance with this License Agreement; (ii) any copies of such Confidential Information as is required to be retained under applicable Law; (iii) any copies of such Confidential Information as is necessary or useful for such Party to exercise a right or fulfill an obligation under another License Agreement, if any, or as set forth in this License Agreement; and (iv) any copies of any computer records and files containing Confidential Information that have been created by such Party’s routine archiving/backup procedures. Upon request of the requesting Party, the Receiving Party shall confirm in writing to the requesting Party the destruction or return of all copies of the Confidential Information of the requesting Party.

8.6Publications.  Notwithstanding anything in this License Agreement to the contrary, CureVac is permitted to publish the results of its development under this License Agreement, provided, however, that it will not disclose Arcturus Confidential Information in any publication by CureVac of the results of any Licensed Product development by CureVac

 

 

without Arcturus’ prior written consent, which will not be unreasonably withheld, conditioned or delayed.  

8.7Terms of this License Agreement; Press Release.  The Parties agree that the existence and terms of the Parties’ relationship and this License Agreement will be treated as Confidential Information of both Parties, and thus may be disclosed only as permitted by Section 8.4.  Except as mutually agreed or otherwise required by Law or securities exchange regulation, each Party agrees not to issue any press release or public statement disclosing information relating to the existence of this License Agreement or the transactions contemplated hereby or the terms hereof without the prior written consent of the other Party.

9.Warranties; Limitations of Liability; Indemnification.

9.1Representations and Warranties. Each Party represents and warrants to the other as of the License Agreement Effective Date that:

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

(b)it has the legal right and power to enter into this License Agreement, to extend the rights and licenses granted or to be granted to the other in this License Agreement, and to fully perform its obligations hereunder,

(c)it has taken all necessary corporate action on its part required to authorize the execution and delivery of this License Agreement and the performance of its obligations hereunder, 

(d)this License Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms  and 

(e)except with respect to any Pre-Existing Prosecution, Enforcement and Defense Restrictions, the execution, delivery and performance by such Party of this License Agreement and the consummation of the transactions contemplated hereby will not result in any violation of, conflict with, result in a breach of or constitute a default under any understanding, contract or agreement to which such Party is a party or by which it is bound, including, in the case of Arcturus, each of the agreements which Arcturus has identified to CureVac prior to the License Agreement Effective Date, in each case as would reasonably be expected to have a material adverse effect on the rights of the other Party hereunder.

9.2Additional Representations of Arcturus.  Arcturus hereby represents and warrants to CureVac as of the License Agreement Effective Date as follows:

(a)Impairment. Except with respect to any Pre-Existing Prosecution, Enforcement and Defense Restrictions, neither Arcturus nor any of its Affiliates has entered into any agreement or otherwise licensed, granted, assigned, transferred, conveyed or otherwise encumbered or disposed of any right, title or interest in or to any of its assets, including any intellectual property rights including Know-How, that would in any way conflict with or impair the scope of any rights or licenses granted to CureVac with respect to the Licensed Product hereunder.

 

 

(b)Patents.  Appendix 1.4 sets forth a complete and accurate list of all Arcturus Technology Patents.  Arcturus Controls the Arcturus Technology, and is entitled to grant the licenses specified herein.  To Arcturus’ knowledge, the Arcturus Technology Patents have been procured or are being procured from the respective patent offices in accordance with applicable Law.  None of the Arcturus Technology Patents is or has been involved in any opposition, cancellation, interference, reissue or reexamination proceeding, and to Arcturus’ knowledge as of the License Agreement Effective Date, no Arcturus Technology is the subject of any judicial, administrative or arbitral order, award, decree, injunction, lawsuit, proceeding or stipulation.  As of the License Agreement Effective Date, neither Arcturus nor any of its Affiliates has received any notice alleging that the Arcturus Technology Patents are invalid or unenforceable, or challenging Arcturus’ ownership of or right to use any such rights.

(c)Entire LMD Technology. The Arcturus LMD Technology licensed to CureVac under this License Agreement comprises all LMD Technology Controlled by Arcturus which is necessary or useful to develop, manufacture and commercialize the Licensed Products for purposes of this License Agreement.

(d)Encumbrances. As of the License Agreement Effective Date, Arcturus has the right to grant the license herein to CureVac and neither Arcturus nor any of its Affiliates has granted any liens or security interests on the Arcturus Technology to any Third Party that is inconsistent with the license granted to CureVac under Section 2.1.  

(e)Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Arcturus, currently threatened against or affecting Arcturus that questions the validity of this License Agreement or the right of Arcturus to enter into this License Agreement or consummate the transactions contemplated hereby or that relates to the Arcturus Technology.

(f)Infringement.  Neither Arcturus nor any of its Affiliates has received any written notice of any claim, nor does Arcturus or its Affiliates have any knowledge of any claim, that any Patent, Know-How or other intellectual property owned or controlled by a Third Party would be infringed or misappropriated by the practice of any Arcturus LMD Technology in connection with the production, use, research, development, manufacture or commercialization of any Licensed Product.

(g)Third Party Infringement.  To Arcturus’ knowledge, no Third Party is infringing or has infringed any Patent within the Arcturus LMD Technology or is misappropriating or has misappropriated any Know-how within the Arcturus LMD Technology, in each case relating to the Target.

9.3Disclaimers.  Without limiting the respective rights and obligations of the Parties expressly set forth herein, each Party specifically disclaims any guarantee that any Licensed Product will be successful, in whole or in part. Except as otherwise expressly provided in this License Agreement, the Parties make no representations and extend no warranty of any kind under this License Agreement, neither express nor implied.

9.4No Consequential Damages.  Notwithstanding anything in this License Agreement or otherwise, neither Party will be liable to the other or any Third Party with respect to any subject matter of this License Agreement for any indirect or consequential 

 

 

damages, provided that this Section 9.4 will not apply to breaches of Article 8 or the Parties’ indemnification rights or obligations under Section 9.6, or in the event of willful misconduct.

9.5Performance by Others.  The Parties recognize that each Party may perform some or all of its obligations under this License Agreement through Affiliates, subcontractors or - in the event of CureVac - Sublicensees, provided, however, that each Party will remain fully responsible and liable for the performance by its Affiliates, subcontractors and Sublicensees, and will cause its Affiliates, subcontractors and Sublicensees to comply with the provisions of this License Agreement in connection therewith.

9.6Indemnification.

(a)Indemnification by CureVac.  CureVac will indemnify Arcturus, its Affiliates and their respective directors, officers, employees, Third Party licensors and agents, and their respective successors, heirs and assigns (collectively, "Arcturus Indemnitees"), and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, "Losses") in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, "Third Party Claims") against the Arcturus Indemnitees to the extent arising from or occurring as a result of: (i) the breach by CureVac of any representation or warranty of this License Agreement; (ii) any gross negligence or willful misconduct on the part of any CureVac Indemnitee; or (iii) the development, manufacture or commercialization by or on behalf of CureVac or any of its Affiliates or Sublicensees of Licensed Product other than if related to an LMD component thereof specifically provided by Arcturus, except in each case (i)-(iii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this License Agreement.

(b)Indemnification by Arcturus.  Arcturus will indemnify CureVac, its Affiliates and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, "CureVac Indemnitees"), and defend and hold each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims against CureVac Indemnitees to the extent arising from or occurring as a result of: (i) the breach by Arcturus of any representation or warranty of this License Agreement; or (ii) any gross negligence or willful misconduct on the part of any Arcturus Indemnitee, except in each case (i) and (ii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of a CureVac Indemnitee or CureVac’s breach of this License Agreement.

(c)Notice of Claim.  All indemnification claims provided for in Sections 9.6(a) and 9.6(b) will be made solely by such Party to this License Agreement (the "Indemnified Party").  The Indemnified Party will promptly notify the indemnifying Party (an "Indemnification Claim Notice") of any Losses or the discovery of any fact upon which the Indemnified Party intends to base a request for indemnification under Section 9.6(a) and 9.6(b), but in no event will the indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and estimated amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party will furnish promptly to the indemnifying Party 

 

copies of all papers and official documents received in respect of any Losses and Third Party Claims.

(d)Defense, Settlement, Cooperation and Expenses.

(i)Control of Defense.  At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third Party Claim by the indemnifying Party will not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor will it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party (the indemnifying Party will consult with the Indemnified Party with respect to such counsel and a possible conflict of interest of such counsel retained by the indemnifying Party).  In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party will as soon as possible deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party will reimburse the indemnifying Party for any and all costs and expenses (including reasonable attorneys’ fees and costs of suit) and any Third Party Claims incurred by the indemnifying Party in its defense of the Third Party Claim.

(ii)Right to Participate in Defense.  Without limiting Section 9.6(d)(i), any Indemnified Party will be entitled to participate in, but not control, the defense of such Third Party Claim and to engage counsel of its choice for such purpose; provided, however, that such engagement will be at the Indemnified Party’s own cost and expense unless (i) the indemnifying Party has failed to promptly assume the defense and engage counsel in accordance with Section 9.6(d)(i) (in which case the Indemnified Party will control the defense) or (ii) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under applicable Law, ethical rules or equitable principles, in which case the indemnifying Party will assume one hundred percent (100%) of any such costs and expenses of counsel for the Indemnified Party.

(iii)Settlement.  With respect to any Third Party Claims that relate solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnified Party’s becoming subject to injunctive or other relief or 

32

otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which the indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party will have the sole right to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, will deem appropriate.  With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 9.6(d)(i), the indemnifying Party will have authority to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned).  The indemnifying Party will not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the prior written consent of the indemnifying Party.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party, such consent not to be unreasonably withheld, delayed or conditioned.

(iv)Cooperation.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will use Diligent Efforts to cause each other indemnified party to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith, at the indemnifying Party’s expense.  Such cooperation will include access during normal business hours afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.

(v)Costs and Expenses.  Except as provided above in this Section 9.6(d), the costs and expenses, including attorneys’ fees and expenses, incurred by the Indemnified Party in connection with any claim will be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

9.7Insurance.  Each Party will maintain at its sole cost and expense, an adequate liability insurance or self-insurance program (including product liability insurance) to protect 

33

 

against potential liabilities and risk arising out of activities to be performed under this License Agreement, and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the respective industry of such Party for the activities to be conducted by such Party under this License Agreement.  Subject to the preceding sentence, such liability insurance or self-insurance program will insure against all types of liability, including personal injury, physical injury or property damage arising out of the manufacture, sale, use, distribution or marketing of Licensed Product.  The coverage limits set forth herein will not create any limitation on a Party’s liability to the other under this License Agreement.

10.Term and Termination.

10.1Term.  

(a)This License Agreement will commence as of the License Agreement Effective Date and, unless sooner terminated in accordance with the terms hereof or by mutual written consent, will continue on a Licensed Product-by-Licensed Product and a country-by-country basis, until there are no more payments owed to Arcturus in such country (the longest such period of time hereunder, the "Term").  Upon there being no more such payments hereunder in such country, the license contained in Section 2.1 will become irrevocable, perpetual and fully paid up and will remain in effect with respect to such Licensed Product in such country. 

(b)If the Target to which this License Agreement relates is chosen by the Parties for co-development under the Co-Development Agreement, this License Agreement will automatically terminate upon the written agreement of the Parties to include such programs under the Co-Development Agreement, in accordance with Section 4.2(a) of the Co-Development Agreement. 

(c)The Parties agree that this Agreement and the Co-Development Agreement relate to different projects and, therefore, the validity, term and termination of this Agreement shall be independent from the validity, term and termination of the Co-Development Agreement.

10.2Termination by Arcturus.

(a)Breach.  Arcturus will have the right to terminate this License Agreement in full upon delivery of written notice to CureVac in the event of any material breach by CureVac of any terms and conditions of this License Agreement, provided that such breach has not been cured [...***...] after written notice thereof is given by Arcturus to CureVac specifying the nature of the alleged breach.

(b)Disputed Breach.  If CureVac disputes in good faith the existence or materiality of a breach specified in a notice provided in accordance with Section 10.2(a), and CureVac provides Arcturus notice of such dispute within such [...***...]period, then Arcturus shall not have the right to terminate this License Agreement under Section 10.2(a) unless and until it is finally determined, in accordance with Section 11.1, that CureVac has materially breached this License Agreement and that CureVac fails to cure such breach within [...***...] following such decision.  It is understood and agreed that during the pendency of such 

 

34

***Confidential Treatment Requested

 

dispute, all of the terms and conditions of this License Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder. During the pendency of any such dispute, CureVac shall pay to Arcturus all Milestone Payments and royalty payments set forth herein.  

(c)Patent Challenge.   Except to the extent the following is unenforceable under the Laws of a particular jurisdiction, Arcturus may terminate this License Agreement on a Patent-by-Patent basis upon delivery of [...***...] prior written notice to CureVac 

(i)if CureVac or its Affiliates, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Arcturus Technology Patents anywhere in the world and does not withdraw or settle such challenge within the [...***...] cure period; or

(ii)if a sublicensee of CureVac, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Arcturus Technology Patents anywhere in the world and CureVac does not terminate the corresponding sublicense agreement or such challenge is not withdrawn or settled (by such sublicensee or CureVac) within the [...***...] cure period.  

10.3Termination by CureVac; Certain Remedy for Breach.

(a)Breach.  CureVac will have the right to terminate this License Agreement in full upon delivery of written notice to Arcturus in the event of any material breach by Arcturus of any terms and conditions of this License Agreement, provided that such breach has not been cured within [...***...] after written notice thereof is given by CureVac to Arcturus specifying the nature of the alleged breach. 

(b)Discretionary Termination.  CureVac will have the right to terminate this License Agreement in full at its discretion for any reason by delivering written notice to Arcturus, such termination to be effective [...***...] following the date of such notice.

(c)Maintenance of License.  In the event of a material breach by Arcturus of Sections 2.2(c) or 3.2, if such breach has not been cured within [...***...] after written notice thereof, CureVac may notify Arcturus in writing that the License Agreement shall remain in full force and effect, provided that any remaining payments to Arcturus pursuant to Sections 4.1, 4.2 and 4.3 following such notification shall be reduced by [...***...]. 

10.4Rights Upon Bankruptcy.  All rights and licenses granted under or pursuant to this License Agreement by Arcturus or its Affiliates are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that CureVac and its Affiliates and Sublicensees, as licensees of such rights under this License Agreement, will retain and may fully exercise all of their rights and elections under the U.S. 

35

***Confidential Treatment Requested

Bankruptcy Code and any foreign counterparts thereto.  Without limiting the Parties’ rights under Section 365(n) of the U.S. Bankruptcy Code, if a case under U.S. Bankruptcy Code is commenced by or against a Party, the other Party shall be entitled to a copy of any and all such intellectual property and all embodiments of such intellectual property, and the same, if not in the possession of such other Party, shall be promptly delivered to it (i) before this License Agreement is rejected by or on behalf of the bankrupt Party, within thirty (30) days after the other Party’s written request, unless the bankrupt Party, or its trustee or receiver, elects within thirty (30) days to continue to perform all of its obligations under this License Agreement, or (ii) after any rejection of this License Agreement by or on behalf of the bankrupt Party, if not previously delivered as provided under clause (i) above.  All rights of the Parties under this Section 10.4 and under Section 365(n) of the U.S. Bankruptcy Code are in addition to and not in substitution of any and all other rights, powers, and remedies that each Party may have under this License Agreement, under the U.S. Bankruptcy Code, and any other applicable Laws.  The non-bankrupt Party shall have the right to perform the obligations of the bankrupt Party hereunder with respect to such intellectual property, but neither such provision nor such performance by the non-bankrupt Party shall release the bankrupt Party from any such obligation or liability for failing to perform it.

10.5Effects of Termination.  

(a)Upon termination (but not expiration pursuant to Section 10.1) of this License Agreement for any reason:

(i)Cessation of Rights.  Except as expressly provided herein, including Sections 8.5, 10.5(a) and as necessary for CureVac to sell off existing inventory as permitted under Section 10.5(iii) below, all rights and licenses granted by Arcturus to CureVac under this License Agreement will terminate. CureVac shall wind down the development (including any clinical trials), manufacture and commercialization of the Licensed Product in compliance with all applicable Laws and at its own cost and expense. 

(ii)Sell Off. Notwithstanding the termination of CureVac's licenses and other rights under this License Agreement, CureVac shall retain the right to distribute, sell or otherwise dispose of its existing inventory of the Licensed Products, in each case that is intended for distribution, sale or disposition in the Territory, for a period of not more than six (6) months following the date of the effective termination, as though this License Agreement had not been terminated, and such distribution, sale or other disposition shall not constitute infringement of the Patents or other intellectual property or proprietary rights of Arcturus or its Affiliates. CureVac's right to distribute, sell or otherwise dispose of its existing inventory of the Licensed Products pursuant to this Section 10.5(a)(ii) shall be subject to CureVac's continuing obligation to pay royalties with respect to the Net Sales. 

(b)Upon termination pursuant to Section 10.1(b), Arcturus shall refund to CureVac the Option Exercise Fee (as defined in the Development and Option Agreement), the Milestone Payments already paid by CureVac and all other payments made by CureVac in relation to this License Agreement. 

10.6Survival.  In addition to the termination consequences set forth in Section 10.5, the following provisions will survive termination or expiration of this License Agreement: 

36

Sections 1, 4 (to the extent of any outstanding payments accrued as of the effective date of termination), 5, 8, 9.4, 9.6, 10.5, 10.6 and 11.  Termination or expiration of this License Agreement will not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this License Agreement nor prejudice either Party’s right to obtain performance of any obligation.  All other rights and obligations will terminate upon expiration of this License Agreement.

11.General Provisions.

11.1Dispute Resolution.

(a)Disputes.  Disputes arising under or in connection with this License Agreement will be resolved pursuant to this Section 11.1; provided, however, that in the event a dispute cannot be resolved without an adjudication of the rights or obligations of a Third Party (other than any CureVac Indemnitees or Arcturus Indemnitees identified in Section 9.6), the dispute procedures set forth Sections 11.1(c) and 11.1(c) will be inapplicable as to such dispute.

(b)Dispute Escalation.  In the event of a dispute between the Parties, the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves.  In the event that such dispute is not resolved on an informal basis within thirty (30) days, either Party may, by written notice to the other, have such dispute referred to each Party’s Chief Executive Officer or his or her designee (who will be a senior executive with the appropriate authority to determine the matter for such party), who will attempt in good faith to resolve such dispute by negotiation and consultation for a thirty (30) day period following receipt of such written notice

(c)Dispute Resolution.  In the event the Chief Executive Officers of the Parties are not able to resolve such dispute as set forth above, the Parties agree to try to solve such dispute amicably by mediation. The Parties shall conduct a mediation procedure according to the Mediation Rules of the World Intellectual Property Organization (WIPO) in effect on the date of the commencement of the mediation proceedings. The location of the mediation proceedings will be New York City, New York, U.S.. The number of mediators will be one (1). The language of the mediation proceedings will be English. If the dispute has not been settled pursuant to the said rules within sixty (60) days following the filing of a request for mediation or within such other period as the Parties may agree in writing, either Party may submit the dispute to final and binding arbitration. Any dispute relating to the validity performance, construction or interpretation of this License Agreement, which cannot be resolved amicably between the Parties after following the procedure set forth in this Section 11.1, shall be submitted to arbitration in accordance with the Arbitration Rules of WIPO in effect on the date of the commencement of the arbitration proceedings. The location of the arbitration proceedings will be New York City, New York, U.S.. The number of arbitrators will be three (3). The language of the arbitration proceeding will be English. The decision of the arbitrators shall be final and binding upon the Parties (absent manifest error on the part of the arbitrator(s)) and enforceable in any court of competent jurisdiction. 

37

11.2Relationship of Parties.  Nothing in this License Agreement is intended or will be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.  No Party will incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided therein.  There are no express or implied third party beneficiaries hereunder (except for CureVac Indemnitees and Arcturus Indemnitees for purposes of Section 9.6).  For clarity, CureVac does not grant to Arcturus any rights or licenses under this License Agreement to any CureVac technology or intellectual property rights.

11.3Compliance with Law.  Each Party will perform or cause to be performed any and all of its obligations or the exercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.

11.4Governing Law.  This License Agreement will be governed by and construed in accordance with the Laws of the State of New York, U.S., without respect to its conflict of Laws rules.

11.5Counterparts; Facsimiles.  This License Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  Facsimile or PDF execution and delivery of this License Agreement by either Party will constitute a legal, valid and binding execution and delivery of this License Agreement by such Party.

11.6Headings.  All headings in this License Agreement are for convenience only and will not affect the meaning of any provision hereof.

11.7Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this License Agreement.  Accordingly, the rule of construction that any ambiguity in this License Agreement will be construed against the drafting party will not apply.

11.8Interpretation.  Whenever any provision of this License Agreement uses the term "including" (or "includes"), such term will be deemed to mean "including without limitation" (or "includes without limitations").  "Herein," "hereby," "hereunder," "hereof" and other equivalent words refer to this License Agreement as an entirety and not solely to the particular portion of this License Agreement in which any such word is used.  All definitions set forth herein will be deemed applicable whether the words defined are used herein in the singular or the plural.  Unless otherwise provided, all references to Sections and Appendices in this License Agreement are to Sections and Appendices of this License Agreement.  References to any Sections include Sections and subsections that are part of the related Section.

11.9Binding Effect.  This License Agreement will inure to the benefit of and be binding upon the Parties, their Affiliates, and their respective lawful successors and assigns.

11.10Assignment.  This License Agreement may not be assigned by either Party, nor may either Party delegate its obligations or otherwise transfer licenses or other rights created by this License Agreement, except as expressly permitted hereunder or otherwise without the prior written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned; provided that either Party may assign this License Agreement without such consent to an Affiliate or to its successor in connection with sale of all or 

38

substantially all of its assets or business or that portion of its business pertaining to the subject matter of this License Agreement (whether by merger, consolidation or otherwise).

11.11Notices.  All notices, requests, demands and other communications required or permitted to be given pursuant to this License Agreement will be in writing and will be deemed to have been duly given upon the date of receipt if delivered by hand, recognized international overnight courier, or registered or certified mail, return receipt requested, postage prepaid or facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier) to the following addresses (or to such address as a Party may subsequently provide by written notice in accordance with this Section 11.11):

If to CureVac:CureVac AG

Paul-Ehrlich-Str. 15

72076 Tübingen

Germany

Attention: CEO and General Counsel

Fax: +49 7071 9883 - 1101

 

 

If to Arcturus:Arcturus Therapeutics Inc.

10628 Science Center Drive

Suite 200

San Diego, California 92121

USA 

Attn:Chief Executive Officer

Copy to:  General Counsel

Fax: (858) 300-5028

 

 

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

Cooley LLP

3175 Hanover St.

Palo Alto, CA  94303

Attn: Glen Y. Sato

Fax: (650) 849-7400

 

 

11.12Amendment and Waiver.  This License Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties; provided that any unilateral undertaking or waiver made by one Party in favor of the other will be enforceable if undertaken in a writing signed by the Party to be charged with the undertaking or waiver.  Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

11.13Severability.  In the event that any provision of this License Agreement will, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith to modify the License Agreement to preserve (to the extent possible) their original intent.

39

11.14Entire Agreement.  This License Agreement together with the Development and Option Agreement and any other license agreements entered into during the Term pursuant to the Development and Option Agreement are the sole agreement with respect to the subject matter hereof and supersedes all other agreements and understandings between the Parties with respect to same.

11.15Force Majeure.  Neither Arcturus nor CureVac will be liable for failure of or delay in performing obligations set forth in this License Agreement (other than any obligation to pay monies when due), and neither will be deemed in breach of such obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Arcturus or CureVac; provided that the Party affected will promptly notify the other of the force majeure condition and will exert reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.

 

 

40

 

Appendix 1.3

Description of the Arcturus LMD Technology

[To be completed in accordance with Section 5.2 of the Development and Option Agreement.]

 

 

 

 

 

 

Appendix 1.4

Patents and Know-How within the Arcturus Technology 

as of the License Agreement Effective Date

[To be updated in accordance with Section 5.2 of the Development and Option Agreement.]]

 

	
 
	
(A)
	
 Patents

ARCTURUS LMD TECHNOLOGY

[...***...]

 

***Confidential Treatment Requested

 

[...***...]

 

	
 
	
(B)
	
Know-How

[...***...]

***Confidential Treatment Requested

 

 

Appendix 1.28

Joint Interest Patents

[To be completed in accordance with Section 5.2 of the Development and Option Agreement and updated during the Term] 

 

 

 

Appendix 1.51

Pre-Existing Restrictions

	
 
	
•
	
[...***...]

 

***Confidential Treatment Requested

 

 

Appendix 1.60

Description of the Target

The description for a Target described in sub-clause (a) of the definition of Target shall include the following information:

a.[...***...];

b.[...***...]; and

c.[...***...]; and 

d.[...***...]

The description for a Target described in sub-clause (b) of the definition of Target shall include the following information:

	
 
	
a.
	
[...***...]

 

***Confidential Treatment Requested

 

 

The description for a Target described in sub-clause (c) of the definition of Target shall include the following information:

a.[...***...]; and

b.[...***...]

 

 

***Confidential Treatment Requested

 

 

Schedule 1-B

 

Exclusive License Agreement

by and between

CureVac AG

and

Arcturus Therapeutics Inc.

dated

May 3, 2018

 

 

 

 

 

Table of Contents

 

 

	
1.
	
 
	
DEFINITIONS.
	
 
	
4

	
 
	
 
	
 
	
 
	
 

	
2.
	
 
	
LICENSE GRANTS; TECHNOLOGY TRANSFER.
	
 
	
13

	
 
	
 
	
 
	
 
	
 

	
3.
	
 
	
LICENSE LIMITATIONS.
	
 
	
15

	
 
	
 
	
 
	
 
	
 

	
4.
	
 
	
PAYMENTS AND ROYALTIES.
	
 
	
15

	
 
	
 
	
 
	
 
	
 

	
5.
	
 
	
OWNERSHIP AND INVENTORSHIP OF IP.
	
 
	
20

	
 
	
 
	
 
	
 
	
 

	
6.
	
 
	
PATENT PROSECUTION AND MAINTENANCE.
	
 
	
21

	
 
	
 
	
 
	
 
	
 

	
7.
	
 
	
PATENT ENFORCEMENT AND DEFENSE.
	
 
	
23

	
 
	
 
	
 
	
 
	
 

	
8.
	
 
	
CONFIDENTIALITY.
	
 
	
27

	
 
	
 
	
 
	
 
	
 

	
9.
	
 
	
WARRANTIES; LIMITATIONS OF LIABILITY; INDEMNIFICATION.
	
 
	
29

	
 
	
 
	
 
	
 
	
 

	
10.
	
 
	
TERM AND TERMINATION.
	
 
	
34

	
 
	
 
	
 
	
 
	
 

	
11.
	
 
	
GENERAL PROVISIONS.
	
 
	
37

 

2

 

 

 

List of Appendices

 

	
Appendix 1.3
	
Description of the Arcturus LMD Technology

	
Appendix 1.4 
	
Patents and Know-How within the Arcturus Technology as of the License Agreement Effective Date

Appendix 1.28Joint Interest Patents

Appendix 1.50Pre-Existing Restrictions

Appendix 1.59Description of the Target

 

3

 

 

License Agreement

This License Agreement ("License Agreement"), effective as of delivery of an Acceptance Notice in accordance with Section 5.1(b) of the Development and Option Agreement (as defined below) (the "License Agreement Effective Date"), is made by and between Arcturus Therapeutics Inc., a Delaware corporation ("Arcturus"), and CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany ("CureVac"). Each of Arcturus and CureVac may be referred to herein as a "Party" or together as the "Parties."

WHEREAS, Arcturus has expertise and intellectual property relating to the development of LMD Technologies (as defined below) that embody or incorporate delivery systems (and components thereof) for molecular therapeutics based on or incorporating lipid-enabled and unlocked nucleomonomer  platform for delivery of nucleic acids as specified in Appendix 1.3, the Arcturus LMD Technology; and

WHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); and

WHEREAS, Arcturus and CureVac are parties to that certain Development and Option Agreement (dated January 1, 2018, and amended as of May 3, 2018) (the "Development and Option Agreement") pursuant to which CureVac has options to take licenses under the Arcturus LMD Technology (as defined below) with respect to CureVac’s mRNA Constructs; and

WHEREAS, pursuant to the terms of the Development and Option Agreement, CureVac has exercised an option to obtain a license pursuant to this Agreement with respect to the Target (as defined below) and the Parties are now entering into a licensing arrangement whereby CureVac will have a license under the Arcturus LMD Technology to develop and commercialize Licensed Products (as defined below) with respect to such Target.

WHEREAS, the Parties intend to also co-develop an ornithine transcarbamylase ("OTC") deficiency product and possibly other products under a separate co-development and co-commercialization agreement ("Co-Development Agreement"). 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1.Definitions.

The following terms and their correlatives will have the following meanings: 

1.1"Affiliate" of a person or entity means any other entity which (directly or indirectly) is controlled by, controls or is under common control with such person or entity.  For the purposes of this definition, the term "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") as used with respect to an entity will mean (i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors or (ii) in the case of a non-corporate entity, direct or indirect ownership of at least fifty percent (50%) of the equity interests with the power to direct the management and policies of such entity

 

 

 

4

 

 

provided that if local Law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local Law, be owned by foreign interests. [...***...].

1.2"Arcturus Indemnitees" has the meaning set forth in Section 9.6(a).

1.3"Arcturus LMD Technology" means any and all LMD Technology for delivering RNA therapeutics that is Controlled by Arcturus or any of its Affiliates as of the Effective Date or during the Term, including the LUNARTM platform, a description of which technology, as in existence as of the License Agreement Effective Date, is set forth on Appendix 1.3. 

1.4"Arcturus Technology" means any Patents and Know-How that are Controlled by Arcturus or any of its Affiliates as of the License Agreement Effective Date or during the Term and that are necessary or useful for the research, development, manufacturing and commercialization of Licensed Products. The Patents and Know-How comprised in the Arcturus Technology as of the License Agreement Effective Date are listed in Appendix 1.4. Arcturus Technology shall include the Arcturus LMD Technology. Notwithstanding the foregoing, Arcturus Technology shall exclude 

(a)any Patents and Know-How acquired by Arcturus after License Agreement Effective Date if Arcturus is required to make any payment to a Third Party in connection with the grant, maintenance or exercise of a sublicense to CureVac, unless CureVac agrees in writing to reimburse Arcturus for all such payments; provided, however, that such payments shall reduce CureVac's royalty obligations in accordance with Section 4.3(b), 

(b)any Patents and Know-How of a Third Party (including its Affiliates) that becomes Arcturus’ Affiliate after the License Agreement Effective Date as a results of a Change of Control, but only if and to the extent that it is not LMD Technology, and

(c)any Patents that CureVac elects to exclude pursuant to Section 2.3. 

1.5"Arcturus Technology Patent(s)" means any and all Patents comprised in the Arcturus Technology during the Term, unless otherwise set forth herein. For clarity, Arcturus Technology Patents include Arcturus’ interest in the Joint Interest Patents.  

1.6"Business Day" means a day other than a Saturday, Sunday, or bank or other public holiday in San Diego, California, USA or Tübingen, Germany or Boston, Massachusetts, USA.

1.7"cGMP" means current Good Manufacturing Practices as specified in the U.S. C.F.R., ICH Guideline Q7A, or equivalent Laws of an applicable Regulatory Authority at the time of manufacture.

1.8"Calendar Quarter" means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

 

 

***Confidential Treatment Requested

5

 

 

1.9"Change of Control" with respect to Arcturus, shall be deemed to have occurred if during the Term (i) any person or entity is or becomes the "beneficial owner", directly or indirectly, of shares of capital stock or other interests (including partnership interests) of Arcturus then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions of Arcturus representing fifty percent (50%) or more of the total voting power of all outstanding classes of voting stock of Arcturus or has the power, directly or indirectly, to elect a majority of the members of Arcturus’ board of directors, or similar governing body; or (ii) Arcturus enters into a merger, consolidation or similar transaction with another person or entity; or (iii) Arcturus sells or transfers to any Third Party, in one (1) or more related transactions, properties or assets representing all or substantially all of Arcturus’ consolidated total assets to which this License Agreement relates, provided however, that: 

(a)subsections (i) to (iii) shall only apply if the person or entity or Third Party acquiring control is (i) a pharmaceutical company which has experience in developing and commercializing pharmaceutical products (i.e., is a strategic, not financial investor or partner) or (ii) a competitor, i.e., a company whose business consists principally of mRNA development, manufacturing and/or commercialization, and

(b)a bona fide financing transaction with Third Parties that does not otherwise meet the requirements of subsection (a) shall not constitute a Change of Control.  

1.10"Combination Product" means a Licensed Product that includes at least one additional active pharmaceutical ingredient other than LMDs, mRNA Constructs, and other RNAs (i.e., Guide RNA(s)) or DNA Sequence(s).  Drug delivery vehicles, adjuvants, and excipients shall not be deemed to be "active ingredients", except in the case where such delivery vehicle, adjuvant, or excipient is recognized as an active ingredient in accordance with 21 C.F.R. 210.3(b)(7) or equivalent Laws in other jurisdictions, provided however, should LMDs comprised in a Licensed Product be characterized as "active ingredients" at any time during the Term, such LMDs will not be considered an "active ingredient" for the purposes of this definition. 

1.11"Confidential Information" of a Party means all proprietary Know-How, unpublished patent applications and other non-public information and data of a financial, commercial, business, operational, scientific or technical nature of such Party that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form in connection with this License Agreement, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with this License Agreement.  In addition, any non-public information related to this License Agreement or the Licensed Products hereunder and disclosed by a Party to the other Party (or their respective Affiliates) under the Development and Option Agreement will be deemed such Party’s Confidential Information hereunder. Technology will be considered the Confidential Information of the Party (or Parties) owning such Technology, and jointly-owned Technology will be considered Confidential Information of both Parties.

1.12"Control" or "Controlled" means with respect to Technology, a Party owns or has a license to use and practice the respective Patent or Know-How without violating the terms of any agreement with any Third Party.

1.13"CTA" means a clinical trial application.

6

 

 

1.14"CureVac Indemnitees" has the meaning set forth in Section 9.6(b).

1.15"Development and Option Agreement" has the meaning set forth in the Preamble.

1.16“Diligent Efforts” means, with respect to the efforts to be expended by each Party with respect to the activities of a Party pursuant to this Agreement, active and sustained efforts to conduct the applicable activity, or to attempt to achieve the applicable requirement or goal, in a prompt and expeditious manner, as is reasonably practicable under the circumstances (including the level of FTE funding and budget for out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement. 

1.17"Disclosing Party" has the meaning set forth in Section 8.1

1.18"Field of Use" means the treatment and diagnosis of all diseases and conditions.

1.19"First Commercial Sale" means the first sale for use or consumption of any Licensed Product in a country after all required Regulatory Approvals for commercial sale of such Licensed Product have been obtained in such country.

1.20"FTE" means a full-time person, or more than one person working the equivalent of a full-time person, where "full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel are working, consisting of a total of 1880 hours per year of work on the applicable activities.  Any person who devotes less than 1880 hours per year on the applicable activities shall be treated as an FTE on a pro-rated basis, based upon the actual number of hours worked by such person on such activities, divided by 1880.  Any person who devotes more than 1880 hours per year on the applicable activities shall be treated as one (1) FTE, i.e., in no event shall one person be counted as more than one FTE. FTE activities shall include the performance of the applicable activities and scientific management oversight, as reasonably required, but, for clarity, exclude (i) the work of general corporate or administrative personnel, overhead (including facilities costs), insurances and similar costs.  

1.21"FTE Costs" means an initial rate of [...***...] Dollars ($[...***...]) per FTE per year, which shall apply through December 31, 2019.  Thereafter, the FTE Rate shall be changed bi-annually at the end of each second calendar year to reflect any percentage increase or decrease (as the case may be) in the Consumer Price Index in the U.S. (index for all items) (“CPI”) (based on the change in the CPI from the most recent index available as of the Effective Date to the most recent index available as of the date of the calculation of such revised FTE Cost rate).

1.22 "IND" means an investigational new drug application, or equivalent application or submission for approval to conduct human clinical trials. 

1.23"Indemnification Claim Notice" has the meaning set forth in Section 9.6(c). 

1.24"Indemnified Party" has the meaning set forth in Section 9.6(c).

1.25"Indication" means an individual disease or clinical condition with respect to which at least one adequate and well controlled study is required to support inclusion of such 

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disease or condition in the indication statement of an FDA approved package insert for a Licensed Product. 

1.26"Initiation" means in connection with a clinical trial in any of its phases 1 through 3 the first dosing of the fifth patient or fifth healthy subject.

1.27"Inventions" has the meaning set forth in Section 5.1.

1.28"Joint Interest Patents" means the Patents generated under the Development and Option Agreement and jointly owned by the Parties. Such Joint Interest Patents are listed in   Appendix 1.28 hereto, as amended from time to time.

1.29"Know-How" means all commercial, technical, scientific and other know-how and information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, preclinical, clinical, safety, manufacturing and quality control data and know-how, including study designs and protocols), in all cases, provided it is confidential and proprietary, and regardless of whether patentable, in written, electronic or any other form now known or hereafter developed.

1.30"Late Stage Development" means Development after the Initiation of a Phase 3 Study.

1.31"Law" or "Laws" means all laws, statutes, rules, regulations, orders, judgments, or ordinances having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision.

1.32"License Agreement" has the meaning set forth in the Preamble.

1.33"License Agreement Effective Date" has the meaning set forth in the Preamble.

1.34"Licensed Product" means [...***...] product comprised of (i) LMD systems, which are covered by Arcturus LMD Technology; and containing (ii) one or more mRNA Constructs as the active pharmaceutical ingredient(s) intended to express the Target.  In case of two or more mRNA Constructs these constructs may be contained in the same or separate LMDs. Licensed Product includes mRNA-LMD products which are administered jointly or separately, and mRNA-LMD products which are administered simultaneously or sequentially as a combination medicinal product or treatment. For Gene Editing purposes a Licensed Product may contain other RNA(s) (i.e., Guide RNA(s)) and/or DNA Sequence(s) which can be delivered together or separately (combined in one LMD or delivered in separate LMDs), in addition to the one or more mRNA Constructs intended to express the DNA Editing Protein.  

1.35"LMD Technology" means Technology Controlled by Arcturus that claims, embodies or incorporates delivery systems (and components thereof) based on or incorporating lipid-mediated delivery (LMD) systems. 

1.36"Losses" has the meaning set forth in Section 9.6(a).

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1.37"Materials" means any tangible chemical or biological material, including any compounds, LMD, DNA, RNA (including mRNA), clones, cells, and any expression product, progeny, derivative or other improvement thereto, along with any tangible chemical or biological material embodying any Know-How, Controlled by Arcturus.

1.38"mRNA Construct" means any mRNA construct for the expression of a protein, including the sequence of such construct (which potentially comprises one (1) or more of a cap, 5’ UTR, the associated open reading frame, 3’UTR and a poly A tail), the chemistry of natural and non-natural nucleic acids, and other chemical modifications associated with such construct, such mRNA Construct being covered by mRNA Technology. 

1.39"mRNA Technology" means Technology Controlled by CureVac that claims, embodies or incorporates expression systems (and components thereof), based on or incorporating mRNA.

1.40"Milestones" means the milestones payable pursuant to Section 4.1.

1.41"Milestone Event" has the meaning set forth in Section 4.1.

1.42"Milestone Payment" has the meaning set forth in Section 4.1.

1.43"Net Sales" means, with respect to any Licensed Product, the gross amount received by CureVac and its Affiliates and Sublicensees for bona fide sales of such Licensed Product to a Third Party (other than Affiliates and Sublicensees but including distributors for resale), less deductions, in each case to the extent reasonable, customary, actually allowed and taken in connection with the sale of such Licensed Product and not otherwise recovered or reimbursed:

(a)discounts (including cash, quantity and patient program discounts), retroactive price reductions, commissions, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers;

(b)credits or allowances actually granted upon claims, damaged goods, rejections or returns of, such Licensed Product and not in excess of the selling price of such Product, including such Licensed Product returned in connection with recalls or withdrawals;

(c)freight out, postage, shipping and insurance charges for delivery of such Licensed Product;

(d)taxes or duties levied on, absorbed or otherwise imposed on the sale of such Licensed Product, including value-added taxes, or other governmental charges otherwise imposed upon the billed amount, as adjusted for rebates and refunds; and 

(e)wholesaler and distributor administration fees

(f)other customary deductions taken in the ordinary course of business in accordance with IFRS (International Financial Reporting Standards) principles. 

If a single item falls into more than one of the above categories above, such items will not be deducted more than once. 

9

 

 

Net Sales shall not include any payments among CureVac, its Affiliates and Sublicensees.  Net Sales shall be determined in accordance with generally accepted accounting principles, consistently applied across all products.  Net Sales for any Combination Product shall be calculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B), where A is the weighted average price paid for the Licensed Product contained in such Combination Product sold separately in finished form in such country, and B is the weighted average invoice price paid for the other active ingredients contained in such Combination Product sold separately in finished form in such country, if such Licensed Product and such other active ingredients are each sold separately in such country.

If such other active ingredients are not sold separately in such country, then Net Sales for such Combination Product shall be calculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/C, where C is the weighted average invoice price paid for such Combination Product in such country.  If such Licensed Product is not sold separately in finished form in such country, Net Sales for such Licensed Product will be determined by CureVac’s good faith estimate of the relative contribution of such Licensed Product and each such other active ingredients in such Combination Product, and shall take into account in good faith any applicable allocations and calculations that may have been made for the same period in other countries.

1.44"Non-Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of equal to or more than [...***...] in [...***...] people in the U.S. or EU. The indication for which the first IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.

1.45"Patent(s)" means (a) an issued patent, a patent application, and a future patent issued from any such patent application, (b) a future patent issued from a patent application filed in any country worldwide which claims priority from a patent or patent application of (a), and (c) any additions, divisions, continuations, continuations-in-part, invention certificates, substitutions, reissues, reexaminations, extensions, registrations, utility models, supplementary protection certificates and renewals based on any patent or patent application under (a) or (b), but not including any rights that give rise to regulatory exclusivity periods (other than supplementary protection certificates, which will be treated as "Patents" hereunder) 

1.46"Patent Costs" means the reasonable, documented, out-of-pocket costs and expenses paid to outside legal counsel, and filing and maintenance expenses, actually and reasonably incurred by a Party in prosecuting and maintaining Patents with respect to Licensed Products and enforcing and defending them. 

1.47"Phase 1 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(a) or corresponding foreign regulations.

1.48"Phase 2 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(b) or corresponding foreign regulations.

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1.49"Phase 3 Study" means a human clinical trial of a Licensed Product in any country that would satisfy the requirements of 21 CFR 312.21(c) or corresponding foreign regulations. 

1.50"Pre-Existing Restrictions" means, with respect to the Target, those certain prosecution, enforcement and defense rights granted by Arcturus or its Affiliates to a Third Party(ies) with respect to the Patents pursuant to the bona fide written agreement(s) set forth on Exhibit 1.50 hereto as such bona fide written agreement(s) were in effect as of the Effective Date of the Development and Option Agreement.  For clarity, the exercise of such foregoing rights by a Third Party with respect to Patents that are not specific to the Target or Licensed Products shall be deemed a Pre-Existing Restriction. 

1.51"Rare Disease Target" means a Target that addresses at a first place an indication related to a Licensed Product with an incidence of less than [...***...] in [...***...] people in the U.S. or EU.  The indication for which the first IND or CTA application will be filed will determine whether a Target is a Rare Disease Target.

1.52"Receiving Party" has the meaning set forth in Section 8.1.

1.53"Regulatory Approval" means, with respect to a country or extra-national territory, any and all approvals (including BLAs and MAAs), licenses, registrations or authorizations of any Regulatory Authority necessary in order to commercially distribute, sell or market a product in such country or some or all of such extra-national territory, including solely to the extent required as a condition to commercial sale to end users, any pricing or reimbursement approvals.

1.54"Regulatory Authority" means any national (e.g., the FDA), supra-national (e.g., the EMA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental authority, in any jurisdiction in the world, involved in the granting of Regulatory Approval.

1.55"Royalty Reduction" has the meaning set forth in Section 4.3(b).

1.56"Royalty Term" has the meaning set forth in Section 4.3(d).

1.57"Sublicensee" means any Third Party that is granted a sublicense as permitted by Section 2.2, either directly by CureVac or its Affiliates or indirectly by any other Sublicensee hereunder.

1.58"Sublicense Income" means the fees and other payments, including upfront payments as well as development, regulatory milestone payments received by CureVac or its Affiliates from a Sublicensee, excluding: (a) royalty payments and net sales milestones; (b) reimbursement of costs and expenses, including for patent prosecution and enforcement and (c) equity or premium on equity and (d) loans or loans forgiven either (i) as a result of financial distress of the borrower or (ii) that are not specific to the Licensed Product.    

1.59"Target" means the Target identified in Appendix 1.59 hereto. The Target includes 

(a)up to N  (N= [...***...]) proteins, including all possible combinations resulting from removing one of the N proteins (N minus [...***...] proteins), together with all variants of such 

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proteins, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof; provided, however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring protein; and

(b) [...***...] antigens of a given pathogen, including [...***...] antigen and any combination of such antigens, together with all variants of such antigens, including the wild type, naturally occurring variants, engineered variants wherein modifications to the native amino acid sequence have been introduced (for example, mutated versions, derivatives or fragments), and species homologs, orthologs thereof, provided, however, that any such naturally occurring variant, engineered variant, or species homolog or ortholog possesses substantially similar biological activity to the naturally occurring antigen; and

(c) a DNA Target, provided, however, that the first DNA Target for each DNA Editing Protein would not count as a Target.  Each subsequent DNA Target for this DNA Editing Protein would count as a Target. For clarity, a DNA Editing Protein would be defined as a Target under (a) above and count as a single Target.

If a given protein, e.g., an antibody or enzyme, comprises separated amino acid chains which might be delivered by separated mRNA Constructs, such proteins would be defined as one Target.

1.60"Technology" means collectively Patents and Know-How.

1.61"Term" has the meaning set forth in Section 10.1.

1.62"Territory" means worldwide.

1.63"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.

1.64"Third Party Claims" has the meaning set forth in Section 9.6(a).  

1.65“Valid Claim” means a claim of 

(a)an issued and unexpired patent (as may be extended through supplementary protection certificate or patent term extension) or 

(b)a pending patent application, provided, however, that once the priority date or earliest filing date to which the pending patent application refers is more than seven years old, such claim shall not constitute a Valid Claim for purposes of this License Agreement anymore, unless and until a patent issues with such claim  

included in the Arcturus Technology Patents, which claim has not been revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable decision (or decision from which no appeal was taken within the allowable time period) and has not been disclaimed, denied, abandoned or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise.   

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2.License Grants; Technology Transfer.

2.1Licenses by Arcturus. Subject to the terms and conditions of this License Agreement, Arcturus hereby grants to CureVac an exclusive license, with the right to sublicense in multiple tiers under the Arcturus Technology Patents and the Arcturus Know-How, in each case solely to develop, have developed, make, have made, use and have used, sell, offer for sale, have sold and import and have imported Licensed Products in the Field of Use in the Territory.  

2.2Sublicensing Rights.

(a)CureVac Sublicenses.  The licenses granted in Section 2.1 may be sublicensed (with the right to sublicense through multiple tiers), in full or in part, by CureVac, its Affiliates or Sublicensees to CureVac's Affiliates and Third Parties provided, that for any sublicense:

	
 
	
(i)
	
Each sublicense will be in writing (provided, however, that not each sublicense to Affiliates must be in writing) and on terms consistent with and subject to the terms of this License Agreement, including but not limited to the limitations on patent prosecution, enforcement and defense rights of such Sublicensee as set forth in Sections 6.1(d) and 7.2(e);

	
 
	
(ii)
	
CureVac will be responsible for any and all obligations of such Sublicensee (including Affiliates and Sublicensees) as if such Sublicensee were CureVac hereunder; 

	
 
	
(iii)
	
CureVac provide to Arcturus a copy of such sublicense agreement within thirty (30) days of execution (which copy may be redacted for terms that are not otherwise required to confirm conformance with the terms of this License Agreement); and

	
 
	
(iv)
	
Any sublicense granted by CureVac (and any further sublicenses) to any rights licensed to it hereunder shall terminate immediately upon the termination of this License Agreement, provided that for sublicense to a Third Party, such sublicensed rights shall not terminate if, as of the effective date of such termination pursuant to Sections 10.2, 10.3(a) or 10.4, such Sublicensee is not in material default of its obligations under its sublicense agreement, and within [...***...] days of such termination and the disclosure of this License Agreement to the Sublicensee, the Sublicensee agrees in writing to be bound directly to Arcturus under a license agreement substantially similar to this License Agreement with respect to the rights sublicensed hereunder, substituting such Sublicensee for CureVac.

(b)Subcontractors.  For clarity purposes, CureVac is entitled to engage contract research organizations and contract manufacturing organizations for the development and manufacture of Licensed Products on behalf of CureVac. To the extent such contract organizations require a license to perform such subcontracted activities under applicable Laws, CureVac is entitled to grant a limited license solely 

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to perform the work for which the subcontractor is engaged, without an obligation to meet the conditions of Section 2.2 (a)(iii).

(c)Technology Transfer. Following the License Agreement Effective Date, Arcturus will use Diligent Efforts to transfer the formulation process for the Licensed Products that are intended to express the Target to CureVac or a reputable and competent GMP manufacturer selected by CureVac and reasonably acceptable to Arcturus.  Upon written request by CureVac, Arcturus will conduct a technology transfer to CureVac and/or its designee(s). Arcturus will make its personnel available without charge for a total of [...***...] hours during normal working hours for such transfer, and for additional hours in excess of [...***...] up to a total of [...***...] hours to be invoiced monthly at the then current FTE Cost.  Such designee(s) may be an Affiliate, sublicensee or Third Party manufacturers selected by CureVac and reasonably acceptable to Arcturus, and which Third Party manufacturers may also be a backup manufacturer or a second manufacturer of Licensed Products as required for the applicable transferee of the then-current process.  CureVac shall reimburse Arcturus for the reasonable cost (including internal FTE Cost) incurred to conduct such technology transfer as specified above.     

2.3Updates to Appendix 1.4; Exclusion of Certain Patents.  Arcturus shall notify CureVac at least once every [...***...] months of Patents that are added to the Arcturus Technology following the License Agreement Effective Date or any Patents that have been abandoned or discontinued in accordance with the terms of this License Agreement.  Appendix 1.4 shall be deemed automatically updated to include any such added Patents, provided that with written notice to Arcturus, CureVac may elect upon [...***...] days’ irrevocable written notice to Arcturus to exclude any particular Arcturus Technology Patents.  Following any such written notice by CureVac, upon the expiration of the notice period the identified Arcturus Technology Patents that CureVac specifies for exclusion from this License Agreement will no longer be licensed to CureVac hereunder, and CureVac shall not have any rights (including rights pursuant to this Agreement) under such Arcturus Technology Patents nor obligations hereunder with respect to such Arcturus Technology Patents. For clarity, in the event that the Licensed Product is subsequently determined to be covered or otherwise infringe a Valid Claim of any excluded patent hereunder, then such infringement shall be deemed to be a material breach of this License Agreement by CureVac.

2.4Documents and Declarations. At CureVac’s reasonable request and cost and expense, Arcturus shall execute all documents, deliver declarations regarding the licenses granted hereunder, and Arcturus shall reasonably cooperate with CureVac to the extent such documents, declarations and/or cooperation are required to give effect to this License Agreement and/or for the recording or registration of the licenses granted hereunder at the various patent offices in the Territory for the benefit of CureVac, its Affiliates or their Sublicensees. 

2.5Diligence; Reporting.  CureVac shall use Diligent Efforts to develop, manufacture and commercialize Licensed Products in the Field of Use in the Territory, and shall keep Arcturus reasonably informed as to the progress and results of its and its Affiliates’ and Sublicensees’ development, manufacture and commercialization of the Licensed Product.  Without limiting the foregoing, CureVac shall provide Arcturus with a written report of the development, manufacture and commercialization of the Licensed Product within [...***...] days after the end of each calendar year, and shall promptly respond to Arcturus reasonable questions or requests for additional information relating to such activities.  

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2.6Compliance.  CureVac shall at all times comply with all applicable Laws (including anti-bribery laws) in the development, manufacture and commercialization of the Licensed Product and the performance of its other obligations under this License Agreement, and shall not use any employee or consultant who has been debarred by any Regulatory Authority or, to CureVac’s knowledge, is the subject of debarment proceedings by a regulatory authority.    

2.7Updates.  Arcturus shall inform CureVac within [...***...] Business Days of intellectual property matters affecting the Arcturus Technology Patents and the Arcturus Know-How of which it becomes aware that would reasonably be considered to negatively impact the rights of CureVac pursuant to this Agreement.

2.8Material. CureVac shall have the right to retain Material provided by Arcturus under the Development and Option Agreement, to the extent such Material is necessary or useful for the exercise of a CureVac's rights or obligations under this License Agreement. Following the License Agreement Effective Date, only the provisions of this License Agreement, but not of the Development and Option Agreement, shall apply in relation to such Material.

3.License Limitations.  

3.1Reserved Rights. No licenses or other rights are granted by Arcturus hereunder to use any trademark, trade name, trade dress or service mark owned or otherwise Controlled by Arcturus or any of its Affiliates.  All licenses and other rights are or shall be granted only as expressly provided in this License Agreement, and no other licenses or other rights is or shall be created or granted by either Party hereunder by implication, estoppel or otherwise.  CureVac shall not, and shall not permit any of its Affiliates or Sublicensees to, practice or use any Arcturus Technology outside of the scope of the license granted to it under Section 2.1 or in contravention of Section 3.1.  Arcturus retains the exclusive right to practice, license and otherwise exploit the Arcturus Technology outside the scope of the licenses granted to CureVac under Section 2.1 Notwithstanding the exclusive license granted to CureVac under Section 2.1, Arcturus retains the right under the Arcturus Technology to perform, or have performed, Arcturus’ obligations under this License Agreement

3.2Other Licenses. Arcturus acknowledges the rights granted to CureVac pursuant to this Agreement and shall not grant licenses under Arcturus Technology to Third Parties that are in conflict with this License Agreement it being understood that a license to enable or implement any Pre-Existing Restriction with respect to the Target shall not be deemed a conflict hereunder. In addition, Arcturus shall use Diligent Efforts to undertake that any licenses obtained from Third Parties will be sublicensable to CureVac, to the extent required or useful for the Licensed Product, provided that CureVac shall be responsible for an allocable portion of the payment and obligations that may be required in order to obtain rights with respect to the Licensed Product pursuant to such Third Party agreement.  

4.Payments and Royalties. 

4.1Milestone Payments.  CureVac will make milestone payments (each, a "Milestone Payment") to Arcturus upon the first occurrence of each of the milestone events (each, a "Milestone Event") by Licensed Product as set forth below in this Section 4.1.  CureVac will notify Arcturus of the achievement of each Milestone Event (whether achieved by CureVac, its Affiliates or Sublicensees) within (i) [...***...] Business Days of such

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achievement, if the Milestone Event is achieved by CureVac or its Affiliates, or (ii) [...***...] Business Days of the receipt by CureVac of a notification about the achievement, if the Milestone Event is achieved by a Sublicensee.  

Each Milestone Payment will be non-refundable, non-creditable and payable to Arcturus by CureVac within [...***...] days of delivery of an invoice from Arcturus following notification from CureVac pursuant to the preceding paragraph, provided that if no such notification is timely provided by CureVac, the Milestone Payment shall be deemed payable [...***...] days after (A) the achievement of such Milestone Event, if the Milestone Event is achieved by CureVac or its Affiliates, or (B) after the receipt by CureVac of the notification from CureVac pursuant to Section 4.1(ii). For clarity, the term “non-refundable” is not intended to limit either Party’s rights to pursue damages arising from a breach of this Agreement.

If one or more of the Milestone Events set forth below are not achieved or not required for any reason, the payment for such skipped Milestone Event will be due at the same time as the payment for the next achieved Milestone Event. For clarity: [...***...].

For clarity, to the extent that a Licensed Product is initiated against a Rare Disease Target and later expanded to a non-Rare Disease Target, then any and all Milestone Payments not previously made shall be due and payable upon the achievement of the next non-Rare Disease Milestone (e.g., [...***......***...]).

	
Milestone Event
	
Milestone Payment

 

	
Rare Disease Targets
	
 

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***... ]
	
[...***...]

	
[...***...]
	
[...***...]

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Milestone Event
	
Milestone Payment

 

	
[...***......***...]
	
[...***...]

	
Non-rare Disease Targets
	
 

	
[...***... ]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***... ]
	
[...***...]

	
[...***...]
	
[...***...]

	
[...***...]
	
[...***...]

 

4.2Sublicensing Revenues.If within twenty-four (24) months after the License Agreement Effective Date CureVac grants a sublicense to a Third Party under this License Agreement for the development and commercialization of Licensed Products, then CureVac will pay to Arcturus [...***...] of all Sublicense Income actually received by CureVac, to the extent the Sublicense Income exceeds the Option Exercise Fee paid by CureVac under the Development and Option Agreement to exercise the Option for this License Agreement and the Milestone Payments paid by CureVac under this License Agreement.  The payments will be made within [...***...] days after receipt by CureVac from the Third Party.  For purposes of clarity, if CureVac grants a sublicense to Third Parties later than [...***...] months after the License Agreement Effective Date, CureVac will not owe any Sublicensing Income to Arcturus. 

4.3Royalties.

(a)Royalty.  Subject to the remainder of this Section 4.3, on a country-by-country basis and a Licensed Product-by-Licensed Product basis, CureVac will pay to Arcturus (i) a royalty of [...***...] of Net Sales of the Licensed Product (ii) as well as of any net sales milestones (without offset for any reductions pursuant to Section 4.3(b)) for such Licensed Product received from the Sublicensee. 

(b)Third Party Payments and Royalty Reductions.  If CureVac or its Affiliate or Sublicensee, in its reasonable judgment, considers it necessary or useful to obtain a license from any Third Party under any LMD Technology that Covers a Licensed Product in order to develop, manufacture or commercialize such Licensed Product, the amount of CureVac’s royalty obligations under Sections 4.3(a) will be reduced by [...***...] of the amount of the upfront, milestone and royalty payments made to such Third Party on account of the development, manufacture or commercialization of such Licensed Product ("Royalty Reductions"), provided, however, that any Royalty Reduction shall not result in less than the minimum royalty due to Arcturus under Section (c) below. 

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(c)Minimum Royalty.  In no event will the Royalty payable by CureVac to Arcturus for any Licensed Product be less than (i) [...***...] if the reduction in subsection (e) does not apply; or (ii) [...***...] if the reduction in subsection (e) also applies. 

(d)Term. The royalty term ("Royalty Term") shall expire on a country-by-country and Licensed Product-by-Licensed Product basis, on the last to occur of (i) expiration of the last to expire Valid Claim in the Arcturus Technology that, but for the license described herein from Arcturus to CureVac for the applicable Licensed Product, is infringed by the making, using or sale of such Licensed Product, (ii) expiration of any period of data exclusivity, market exclusivity or supplemental protection certificates covering the Licensed Product in such country; and (iii) [...***...] years after First Commercial Sale of Licensed Product in such country. For the avoidance of doubt, upon exhaustion of the obligation to pay Royalties to Arcturus as set forth above the continued use of Arcturus Know-How comprised in the Arcturus Technology for the development, manufacture and/or sale of the Licensed Product shall not, in and of itself, obligate CureVac to pay further royalties to Arcturus. Thereafter, CureVac's license under Section 2.1 will become irrevocable, perpetual, fully paid-up and royalty-free on a country-by-country and Licensed Product-by-Licensed Product basis. 

(e)Know-How Royalty. On a country-by-country, and a Licensed -Product-by-Licensed Product basis, in the event that during the Royalty Term a Licensed Product is not covered by a Valid Claim, the royalty otherwise payable for such Licensed Product, after the Royalty Reductions above, will be reduced by [...***...].

4.4Payment Terms.

(a)Manner of Payment.  All payments to be made by CureVac hereunder will be made in U.S. dollars by wire transfer to such bank account as Arcturus may designate.

(b)Records and Audits. CureVac shall keep, and shall cause each of its Affiliates and Sublicensees, as applicable, to keep adequate books and records of accounting for the purpose of calculating all royalties and other amounts payable to Arcturus hereunder.  For the [...***...] years next following the end of the calendar year to which each shall pertain, such books and records of accounting (including those of CureVac’s Affiliates and Sublicensees) shall be kept at each of their principal places of business and shall be open for inspection at reasonable times and upon reasonable notice by an independent certified accountant selected by Arcturus, and which is reasonably acceptable to CureVac, for the sole purpose of inspecting the Net Sales calculations and supporting details to the extent reasonably necessary and resulting royalties and other amounts due to Arcturus under this License Agreement.  In no event shall such inspections be conducted hereunder more frequently than once every [...***...] months.  Such accountant must have executed and delivered to CureVac and its Affiliates, a confidentiality agreement as reasonably requested by CureVac, which shall include provisions limiting such accountant’s disclosure to Arcturus to only the results and basis for such results of such inspection.  The results of such inspection, if any, shall be binding on both Parties.  Any underpayments plus interest from the original due date shall be paid by CureVac within [...***...] days

***Confidential Treatment Requested

18

 

 

of notification of the results of such inspection.  Any overpayments shall be fully creditable against amounts payable in subsequent payment periods.  Arcturus shall pay for such inspections, except that in the event there is any upward adjustment in aggregate royalties and other amounts payable for any calendar year shown by such inspection of more than [...***...] of the amount paid, CureVac shall reimburse Arcturus for any reasonable out-of-pocket costs of such accountant.

(c)Reports and Royalty Payments.  For as long as royalties are due under Section 4.3, CureVac shall furnish to Arcturus written reports. 

	
 
	
(i)
	
Reports shall be provided within [...***...] days of (1) the end of the Calendar Quarter if Net Sales are generated by CureVac and its Affiliates, and (2) the receipt of corresponding information (which may be estimated) from Sublicensees but in any event within [...***...] days of the end of the Calendar Quarter with respect to Net Sales generated by such Sublicensees.  

	
 
	
(ii)
	
Royalty payments for each Calendar Quarter shall be due within [...***...] Business Days of delivery of an invoice from Arcturus following submission of a royalty report from CureVac, but only subject to the prior receipt by CureVac of the corresponding royalty payment from the Sublicensee, if applicable; however such royalty payments due to Arcturus shall not be reduced by deductions which exceed those covered by the Net Sales definition according to Section 1.43.  

	
 
	
(iii)
	
The report shall include, at a minimum, the following information for the applicable Calendar Quarter for each Licensed Product if Net Sales are generated by CureVac and its Affiliates: (i) the gross sales by country reasonably required for the calculation of royalty payments due according to this Agreement, (ii) the calculation in reasonable detail of the Net Sales from such gross sales amounts, including the deductions pursuant to the definition of Net Sales and the amounts of any credits or reductions permitted by Section 4.2; and (iii) the computations for any Arcturus currency conversions pursuant to subsection (d) below.  

	
 
	
(iv)
	
CureVac will require each Sublicensee to share with Arcturus the information listed in the foregoing clauses as it relates to Net Sales made by such Sublicensee, and to the extent practicable, will include such Sublicensee information in such report; provided that the level of detail with respect to the items subject to report pursuant to Section 4.4(c)(iii) shall be limited to the information that CureVac actually receives from any such Sublicensee. All such reports shall be considered the Confidential Information of CureVac, subject to Section 4.4(b).  

(d)Currency Exchange.  With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the amounts due to Arcturus hereunder will be expressed in U.S. dollars.  With respect to Net Sales invoiced in a currency other than U.S. dollars, payments will be calculated based on the average of the closing exchange rates reported by the Wall Street Journal (http://quotes.wsj.com/fx/EURUSD), or such other source as the Parties may agree in writing, of the applicable reporting period for the payment due.

***Confidential Treatment Requested

19

 

 

(e)Taxes.  CureVac may withhold from payments due to Arcturus amounts for payment of any withholding tax that is required by Law to be paid to any taxing authority with respect to such payments.  CureVac will provide Arcturus all relevant documents and correspondence, and will also provide to Arcturus any other cooperation or assistance on a reasonable basis as may be necessary to enable Arcturus to claim exemption from such withholding taxes and to receive a refund of such withholding tax or claim a foreign tax credit.  CureVac will give proper evidence from time to time as to the payment of any such tax.  The Parties will cooperate with each other in seeking deductions under any double taxation or other similar treaty or agreement from time to time in force.  CureVac shall use Diligent Efforts to minimize withholding taxes. In the event that any tax deduction or withholding obligation arises or increases as a direct result of any reincorporation, redomiciliation, change in source of payments under this Agreement or other similar corporate structuring actions undertaken by CureVac from and after the License Agreement Effective Date, then CureVac shall increase the payment (in respect of which such deduction or withholding of tax is required to be made) to ensure that Arcturus receives an amount equal to the amount that it would have received had no such action occurred. Apart from any such permitted withholding and those deductions expressly included in the definition of Net Sales, the amounts payable by CureVac to Arcturus hereunder will not be reduced on account of any taxes, charges, duties or other levies. Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this License Agreement.

(f)Blocked Payments.  In the event that, by reason of applicable law in any country, it becomes impossible or illegal for CureVac or its Affiliates or Sublicensees to transfer, or have transferred on its behalf, payments owed to Arcturus hereunder, CureVac will promptly notify Arcturus of the conditions preventing such transfer and such payments will be deposited in local currency in the relevant country to the credit of Arcturus in a recognized banking institution proposed by Arcturus and reasonably acceptable to CureVac or, if none is proposed by Arcturus within a period of [...***...] days, in a recognized banking institution selected by CureVac or its Affiliate or Sublicensee, as the case may be, and identified in a written notice given to Arcturus.

(g)Interest Due.  If any payment due to Arcturus under this License Agreement is overdue (and is not subject to a good faith dispute), then CureVac will pay interest thereon (before and after any judgment) at an annual rate of the lesser of [...***...] above the prime rate as reported in The Wall Street Journal, Eastern Edition, and the maximum rate permitted by applicable Law, such interest to run from the date upon which payment of such sum became due until payment thereof in full together with such interest.

(h)Mutual Convenience of the Parties.  The royalty and other payment obligations set forth hereunder have been agreed to by the Parties for the purpose of reflecting and advancing their mutual convenience, including the ease of calculating and paying royalties and other amounts to Arcturus.

5.Ownership and Inventorship of IP.

5.1Solely-Owned IP.  As between the Parties and subject to Section 5.3, each Party will own and retain all right, title and interest in and to any and all Know-How and Patents 

***Confidential Treatment Requested

20

 

 

arising therefrom that are discovered, created, conceived, developed or reduced to practice under or in connection with this License Agreement (the “Inventions”) solely by or on behalf of such Party.  Subject to the licenses hereunder and the other terms and conditions of this License Agreement or any other agreement between the Parties, each Party will be solely responsible for the prosecution and maintenance, and the enforcement and defense, of its solely-owned Patents.

5.2Inventorship.  Inventorship of all Inventions shall be determined in accordance with applicable laws. Each Party will ensure that each employee, consultant and subcontractor conducting any activities under this License Agreement on behalf of such Party will be subject to written agreements to assign to such Party all of its right, title and interest in and to the Inventions so that such Party can comply with its obligations with respect to the ownership allocation of the Inventions as set forth below.  In addition, each Party shall be solely responsible for payments that may be required to any of such Party’s employees or consultants and subcontractors in connection with or with respect to such agreements, including moral rights payments. 

5.3Ownership.  Notwithstanding inventorship in the first instance pursuant to Section 5.2, ownership of all Inventions, as between the Parties, will be assigned by the Parties as follows: (a) Arcturus will solely own all Inventions that are improvements solely to the LMD Technology (“LMD Inventions”), and (b) CureVac will solely own all Inventions that are improvements solely to the mRNA Technology (“mRNA Inventions”).  Specifically, CureVac hereby assigns to Arcturus all of its right, title and interest in and to any and all LMD Inventions, and agrees to take such actions reasonably requested by Arcturus to evidence such assignment.  Arcturus hereby assigns to CureVac all of its right, title and interest in and to any and all mRNA Inventions, and agrees to take such actions reasonably requested by CureVac to evidence such assignment. For clarity, the assignment provisions with respect to mRNA Inventions are restricted solely to improvements to the mRNA Technology.

6.Patent Prosecution and Maintenance.

6.1Generally.  

(a)As between the Parties and subject to Section 6.2 below, Arcturus (or its Third Party licensor, if any) will have the sole right, at its sole costs, to prosecute and maintain Arcturus Technology Patents, other than the Joint Interest Patents. 

(b)In relation to any Arcturus Technology Patents that specifically claim the Licensed Product, prior to filing, Arcturus will provide CureVac with copies of all specific claims relevant to the Licensed Product in such applications for all such Arcturus Technology Patents, and all other material submissions and correspondence relating to such claims with any patent authorities regarding such Arcturus Technology Patents, in sufficient time (not to be less than [...***...] to allow for review and comment by CureVac.  In addition, Arcturus will provide CureVac and its counsel with an opportunity to consult with Arcturus and its counsel regarding prosecution and maintenance of any such Arcturus Technology Patents, and Arcturus will not unreasonably refuse to address all reasonable comments timely made by or on behalf of CureVac.

(c)As between the Parties, CureVac will have the first right to prosecute and maintain any and all Joint Interest Patents and the Parties will share equally all costs
 

***Confidential Treatment Requested

21

 

 

incurred by CureVac in connection with such efforts. Prior to filing, CureVac will provide Arcturus with copies of all applications for such Joint Interest Patents, and all other material submissions and correspondence with any patent authorities regarding such Joint Interest Patents, in sufficient time (not to be less than [...***...] days) to allow for review and comment by Arcturus.  In addition, CureVac will provide Arcturus and its counsel with an opportunity to consult with CureVac and its counsel regarding prosecution and maintenance of any such Joint Interest Patents, and CureVac will consider in good faith all reasonable comments timely made by or on behalf of Arcturus.  

(d)In the event that CureVac or its Affiliates grants a sublicense pursuant to Section 2.2, as between CureVac and any such Sublicensee, 

	
 
	
(i)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent does not specifically claim the Licensed Product, CureVac shall retain its rights to prosecute any such sublicensed Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 6.1(b) and 6.1(c); provided, however, that such Sublicense may provide for instruction by the Sublicensee of CureVac’s exercise of its rights to prosecute any sublicensed Arcturus Technology Patent or Joint Interest Patent;

	
 
	
(ii)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent specifically claims the Licensed Product  (i.e., with respect to the claims limited to the Licensed Product, but not the broader claims that cover other products or potential products in such Arcturus Technology Patents or Joint Interest Patents), CureVac shall have the right to sublicense its rights to prosecute any such sublicensed Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 6.1(b) and 6.1(c) to the Sublicensee.

6.2Election Not to Prosecute or Maintain or Pay Patent Costs. 

(a)If Arcturus elects not to file, prosecute or maintain any Arcturus Technology Patents that specifically claim the Licensed Product for which it is responsible under Section 6.1 in any particular country before the applicable filing deadline or continue such activities once filed in a particular country, then Arcturus will so notify CureVac, promptly in writing with reasonable notice to enable CureVac to meet any deadlines by which an action must be taken to preserve such Arcturus Technology Patent that specifically claim the Licensed Product in such country, if CureVac so requests. Upon receipt of each such notice by Arcturus, CureVac will have the right, but not the obligation, to notify Arcturus in writing on a timely basis that Arcturus should transfer the prosecution or maintenance of such Arcturus Technology Patents that specifically claim the Licensed Product to CureVac and at CureVac’s sole expense or continue the prosecution and/or maintenance of such Arcturus Technology Patent that specifically claim the Licensed Product in the respective country, and thereafter, Arcturus would prosecute and maintain such Arcturus Technology Patent that specifically claim the Licensed Product in such country at the sole direction and expense of CureVac, Arcturus would make available to CureVac all documentation and correspondence with respect to such Arcturus Technology Patent.  CureVac’s license to such Arcturus Technology Patent under Section 2.1 will be irrevocable and royalty-free, and such Arcturus Technology Patent will thereafter no longer be part of the Arcturus Technology for purposes of this License Agreement.  CureVac is entitled to discontinue the payment of Patent Costs

***Confidential Treatment Requested

22

 

 

for any Arcturus Technology Patents that specifically claim the Licensed Product at any time, provided that it will so notify Arcturus in writing in time for such discontinuance. 

(b)If Arcturus elects not to pay its share of the Patent Costs associated with prosecution or maintenance of any Joint Interest Patents, then it shall assign its co-ownership share in such Patents to CureVac and the respective Patent shall no longer be considered a Joint Interest Patent. 

(c)By CureVac. If CureVac elects not (i) to file, prosecute or maintain any Joint Interest Patents for which it is responsible under Section 6.1 in any particular country before the applicable filing deadline or continue such activities once filed in a particular country, or (ii) to pay its share of the Patent Costs associated with prosecution or maintenance of any Joint Interest Patents then in each such case CureVac will so notify Arcturus, promptly in writing and in good time to enable Arcturus to meet any deadlines by which an action must be taken to preserve such Joint Interest Patent in such country at Arcturus' expense, if Arcturus so requests. Upon receipt of each such notice by CureVac, Arcturus will have the right, but not the obligation, to notify CureVac in writing on a timely basis that CureVac should transfer the prosecution or maintenance of such Joint Interest Patent to Arcturus and at Arcturus' sole expense. Arcturus is entitled to discontinue the payment of Patent Costs for any Joint Interest Patents at any time, provided that it will so notify CureVac in writing in time for such discontinuance. In the event that Arcturus assumes the prosecution and maintenance of any such Joint Interest Patent, then CureVac would make available to Arcturus all documentation and correspondence with respect to such Joint Interest Patent, such Joint Interest Patent shall no longer be licensed under this Agreement with respect to the Licensed Product.

6.3Cooperation.  Each Party will reasonably cooperate with the other Party in those activities involving the Arcturus Technology Patents and Joint Interest Patents set forth in Sections 6.1 and 6.2.  Such cooperation includes promptly executing all documents, or requiring inventors, subcontractors, employees and consultants and agents of CureVac and Arcturus and their respective Affiliates and Sublicensees to execute all documents, as reasonable and appropriate so as to enable such activities in respect of any such Arcturus Technology Patents in any country.

7.Patent Enforcement and Defense.  

7.1Notice.  To the extent not in breach of an obligation of confidentiality, each Party will promptly notify, in writing, the other Party upon learning of any actual or suspected infringement of any Arcturus Technology Patents by a Third Party, or of any claim of invalidity, unenforceability, or non-infringement of any Arcturus Technology Patents, and will, along with such notice, supply the other Party with any evidence in its possession pertaining thereto.

7.2Enforcement and Defense.

(a)Enforcement.  

	
 
	
(i)
	
As between the Parties, 

23

 

 

(1)Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up enforcement rights), at its cost, will have the first right, but not the obligation, to seek to abate any infringement of the Arcturus Technology Patents (other than those in subsection (2)) by a Third Party, or to file suit against any such Third Party for such infringement, and

(2) CureVac (or its sublicensee, if any) shall have the first right, but not the obligation, to take action or bring suit and bear all expenses against such Third Party infringer with respect to: (A) Joint Interest Patents; and/or (B) any other Arcturus Technology Patents that, on the date of first notice of such infringement, specifically claim the Licensed Product but are not necessary or useful for the research, development, manufacturing and commercialization of any product comprising Arcturus Technology that is exclusively licensed or optioned to a Third Party or is in Late Stage Development or being commercialized by Arcturus or its Affiliates. 

(b)If the Party first responsible for such enforcement elects not to take action or to bring suit to prosecute such infringement or to continue such action or suit, it shall notify the other Party of such election within [...***...] days after become aware of or receipt of the notice of the infringement or after the election to stop any such action or suit. If after the expiration of the [...***...] days period (or, if earlier, the date upon which the responsible Party provides written notice that it does not plan to bring such action) the responsible Party has neither obtained a discontinuance of infringement nor filed suit against any such Third Party infringer of such Patent, then 

	
 
	
(i)
	
in the case of an election by Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up enforcement rights) not to prosecute an infringement of an Arcturus Technology Patent specifically claiming the Licensed Product, CureVac shall have the right, but not the obligation, to take action or bring suit against such Third Party infringer of such Patents, provided that the infringement is with respect to a product related to the Target(s) under this License Agreement, and further provided that CureVac shall bear all the expenses of such suit and 

	
 
	
(ii)
	
in the case of a CureVac election not to prosecute an infringement of a Joint Interest Patents or Arcturus Technology Patent with respect to which CureVac has rights to take first action, (i) Arcturus shall have the right, but not the obligation, to take action or bring suit against such Third Party infringer of such Patents, provided that Arcturus shall bear all the expenses of such suit,and CureVac shall join Arcturus in such suit to the extent legally required, unless (ii) CureVac decides to assign its interest in such Joint Interest Patent – on a country-by-country basis - to Arcturus and such Joint Interest Patent shall become an Arcturus Technology Patent and no longer subject to license pursuant to this License Agreement. 

(c)Defense.  

	
 
	
(i)
	
As between the Parties, 

(1)Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up defense rights) will have the first right, but not the

***Confidential Treatment Requested

24

 

 

obligation, at its sole costs, to defend against a declaratory judgment action or other action challenging any Arcturus Technology Patents, other than: (i) Joint Interest Patents; and (ii) any other Arcturus Technology Patents that, on the date of first notice of such action, specifically claim the Licensed Product but are not necessary or useful for the research, development, manufacturing and commercialization of any product comprising Arcturus Technology that is exclusively licensed or optioned to a Third Party or is in Late Stage Development or being commercialized by Arcturus or its Affiliates, and

(2)CureVac shall have the first right, but not the obligation, at its sole costs, to defend against a declaratory judgment action or other action challenging Joint Interest Patents as well as such other Arcturus Technology Patents that specifically claim the Licensed Product. 

	
 
	
(ii)
	
If the Party first responsible for such defense does not take steps to defend within a commercially reasonably time, or elects not to continue any such defense (in which case it will promptly provide notice thereof to the other Party), then (i) in the case of an election by Arcturus and its Third Party licensor or licensee (solely to the extent of any existing back-up defense rights) not to defend an Arcturus Technology Patent specifically claiming the Licensed Product, CureVac shall have the right, but not the obligation, to defend any Arcturus Technology Patents that cover Licensed Product and no other product licensed or optioned by Arcturus to a Third Party or commercialized by Arcturus, provided that CureVac shall bear all the expenses of such suit and (ii) in the case of a CureVac election not to defend the Joint Interest Patents, Arcturus shall have the right, but not the obligation, to take action or bring suit to defend such Patents, provided that Arcturus shall bear all the expenses of such suit. Notwithstanding the foregoing, in the event that CureVac elects not to prosecute an infringement of a Joint Interest Patent, then CureVac shall, at its discretion, either (i) assign such Joint Interest Patent to Arcturus – on a country-by-country basis -, which shall become an Arcturus Technology Patent and no longer subject to license pursuant to this License Agreement or (ii) join Arcturus in such suit to the extent legally required.

(d)Notwithstanding the foregoing, any response to a Third Party infringer's counterclaim of invalidity or unenforceability of any Arcturus Technology Patents shall be controlled by the Party who controls the relevant enforcement proceeding pursuant to Section 7.2 (a) unless otherwise mutually agreed by the Parties.    

(e)In the event that CureVac or its Affiliates grants a sublicense pursuant to Section 2.2, as between CureVac and any such Sublicensee, 

	
 
	
(i)
	
to the extent any such Arcturus Technology Patent or Joint Interest Patent does not specifically claim the Licensed Product, CureVac shall retain its rights to enforce and defend Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d); provided, however, that CureVac’s exercise of its rights to enforce or defend such Arcturus Technology Patent or Joint Interest Patent may be instructed by a Sublicensee;

	
 
	
(ii)
	
 to the extent any such Arcturus Technology Patent or Joint Interest Patent specifically claims the Licensed Product, CureVac shall have the right
 

25

 

 

to sublicense its rights to enforce and defend Arcturus Technology Patents and Joint Interest Patents as set forth in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) to the Sublicensee.

(f)Withdrawal, Cooperation and Participation.  With respect to any infringement or defensive action identified above in this Section 7.2 which may be controlled by either CureVac or Arcturus:

	
 
	
(i)
	
If the controlling Party ceases to pursue or withdraws from such action, it will promptly notify the other Party (in good time to enable the other Party to meet any deadlines by which any action must be taken to preserve any rights in such infringement or defensive action) and such other Party may substitute itself for the withdrawing Party, shall be granted the right and standing to sue in the other Party's name, and proceed under the terms and conditions of this Section 7.2.

	
 
	
(ii)
	
The non-controlling Party will cooperate with the Party controlling any such action (as may be reasonably requested by the controlling Party), including (A) providing access to relevant documents and other evidence, (B) making its and its Affiliates and licensees and Sublicensees and all of their respective employees, subcontractors, consultants and agents available at reasonable business hours and for reasonable periods of time, but only to the extent relevant to such action, and (C) if necessary, by being joined as a party, subject for this clause (C) to the controlling Party agreeing to indemnify such non-controlling Party for its involvement as a named party in such action and paying those Patent Costs incurred by such Party in connection with such joinder.  The Party controlling any such action will keep the other Party updated with respect to any such action, including providing copies of all documents received or filed in connection with any such action.

	
 
	
(iii)
	
Each Party will have the right to participate or otherwise be involved in any such action controlled by the other Party, in each case at the participating (i.e., non-controlling) Party’s sole cost and expense.  If a Party elects to so participate or be involved, the controlling Party will provide the participating Party and its counsel with an opportunity to consult with the controlling Party and its counsel regarding the prosecution of such action (including reviewing the contents of any correspondence, legal papers or other documents related thereto), and the controlling Party will take into account reasonable requests of the participating Party regarding such enforcement or defense.

(g)Settlement.  Neither Party will settle or consent to an adverse judgment in any action described in this Section 7.2 and controlled by such Party, including any judgment which affects the scope, validity or enforcement of any Arcturus Technology Patents involved therewith, without the prior written consent of the other Party (such consent not to be unreasonably withheld, delayed or conditioned).

(h)Damages.  Unless otherwise agreed by the Parties, all monies recovered upon the final judgment or settlement of any action which may be controlled by either CureVac or Arcturus and described in Section 7.2(a) or 7.2(c) in each case will be

26

 

 

used first to reimburse the controlling Party, and thereafter the non-controlling Party, for each of their out-of-pocket costs and expenses relating to the action, with the balance of any such recovery to be divided as follows:

	
 
	
(i)
	
To the extent the action involves a Third Party’s research, development, manufacture or commercialization of any product other than the Licensed Product (or a LMD product directed to the same Target as the Licensed Product), Arcturus shall retain all such recovery; and

	
 
	
(ii)
	
To the extent the action involves a Third Party’s research, development, manufacture or commercialization of the Licensed Product (or a LMD product directed to the same Target as the Licensed Product), CureVac will retain such recovery, less the amount of royalties payable to Arcturus by treating such recovery as "Net Sales" hereunder.  

(i)Patent Marking.  CureVac shall mark all Licensed Product if and to the extent required by the applicable patent marking laws, and shall require all of its Affiliates and sublicensees to do the same. 

8.Confidentiality.

8.1Confidential Information.  Each Party ("Disclosing Party") may disclose to the other Party ("Receiving Party"), and Receiving Party may acquire during the course and conduct of activities under this License Agreement, certain proprietary or confidential information of Disclosing Party in connection with this License Agreement.  

8.2Restrictions.  During the Term and for [...***...] years thereafter, Receiving Party will keep all Disclosing Party’s Confidential Information in confidence with the same degree of care with which Receiving Party holds its own confidential information, but in no event less than reasonable care.  Receiving Party will not use Disclosing Party’s Confidential Information except for in connection with the performance of its obligations and exercise of its rights under this License Agreement.  Receiving Party has the right to disclose Disclosing Party’s Confidential Information without Disclosing Party’s prior written consent to Receiving Party’s Affiliates, and each of their employees, subcontractors, consultants and agents who have a need to know such Confidential Information in order to perform their obligations and exercise their rights under this License Agreement and who are under written obligation to comply with the restrictions on use and disclosure that are no less restrictive than those set forth in this Section 8.2.  Receiving Party assumes responsibility for such entities and persons maintaining Disclosing Party’s Confidential Information in confidence and using same only for the purposes described herein.

8.3Exceptions.  Receiving Party’s obligation of nondisclosure and the limitations upon the right to use the Disclosing Party’s Confidential Information will not apply to a specific portion of the Disclosing Party’s Confidential Information to the extent that Receiving Party can demonstrate that such portion: (i) was known to Receiving Party or any of its Affiliates prior to the time of disclosure by the Disclosing Party without obligation of confidentiality; (ii) is or becomes public knowledge through no action or omission of Receiving Party or any of its Affiliates; (iii) is obtained on a non-confidential basis by Receiving Party or any of its Affiliates from a Third Party who to Receiving Party’s knowledge is lawfully in possession thereof (or if possession is obviously unlawful) and
 

***Confidential Treatment Requested

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under no obligation of confidentiality to Disclosing Party; or (iv) has been independently developed by or on behalf of Receiving Party or any of its Affiliates without the aid, application or use of Disclosing Party’s Confidential Information as documented by the internal records of the Receiving Party.

8.4Permitted Disclosures.  Notwithstanding the obligations set forth in Section 8.2, Receiving Party may disclose Disclosing Party’s Confidential Information (including this License Agreement and the terms herein) to the extent (and only to the extent) such disclosure is reasonably necessary in the following instances:

(e)in order to comply with applicable Law (including any securities Law or regulation or the rules of a securities exchange) or with a legal or administrative proceeding;

(f)in connection with prosecuting or defending litigation, and filing, prosecuting and enforcing Arcturus Technology Patents in connection with Receiving Party’s rights and obligations pursuant to this License Agreement; 

(g)to attorneys, accountants, auditors, acquirers, licensees, partners or permitted assignees; financial advisors, investors and lenders, including potential acquirers, licensees, partners, assignees, financial advisors, investors and lenders; and

(h)in the case of CureVac, to (i) subcontractors; or (ii) potential licensees or collaboration partners, but only such information that is reasonably necessary or useful for the subcontractor to perform the subcontracted work or for the potential licensee or partner to evaluate the applicable Licensed Product, and  LMD or Licensed Product manufacturing processes;

provided that (1) where reasonably possible, Receiving Party will notify Disclosing Party of Receiving Party’s intent to make any disclosure pursuant to subsections (a) and (b) sufficiently prior to making such disclosure so as to allow Disclosing Party reasonably adequate time to take whatever action it may deem appropriate to protect the confidentiality of the information to be disclosed, and (2) with respect to subsections (c), each of those persons or entities are required to comply with the restrictions on use and disclosure in Section 8.2 (other than financial advisors, investors and lenders, which must be bound prior to disclosure by commercially reasonable obligations of confidentiality). 

8.5Return of Confidential Information. Upon expiry or earlier termination of this License Agreement, upon written request of a Party (such request, if made, to be made within three (3) months of such expiry or termination) the other Party will destroy or return (as shall be specified in such request) to the requesting Party all copies of the Confidential Information of the requesting Party; provided that the Party may retain: (i) one copy of such Confidential Information for record-keeping purposes, for the sole purpose of ensuring compliance with this License Agreement; (ii) any copies of such Confidential Information as is required to be retained under applicable Law; (iii) any copies of such Confidential Information as is necessary or useful for such Party to exercise a right or fulfill an obligation under another License Agreement, if any, or as set forth in this License Agreement; and (iv) any copies of any computer records and files containing Confidential Information that have been created by such Party’s routine archiving/backup procedures. Upon request of the requesting Party, the
 

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Receiving Party shall confirm in writing to the requesting Party the destruction or return of all copies of the Confidential Information of the requesting Party.

8.6Publications.  Notwithstanding anything in this License Agreement to the contrary, CureVac is permitted to publish the results of its development under this License Agreement, provided, however, that it will not disclose Arcturus Confidential Information in any publication by CureVac of the results of any Licensed Product development by CureVac without Arcturus’ prior written consent, which will not be unreasonably withheld, conditioned or delayed.  

8.7Terms of this License Agreement; Press Release.  The Parties agree that the existence and terms of the Parties’ relationship and this License Agreement will be treated as Confidential Information of both Parties, and thus may be disclosed only as permitted by Section 8.4.  Except as mutually agreed or otherwise required by Law or securities exchange regulation, each Party agrees not to issue any press release or public statement disclosing information relating to the existence of this License Agreement or the transactions contemplated hereby or the terms hereof without the prior written consent of the other Party.

9.Warranties; Limitations of Liability; Indemnification.

9.1Representations and Warranties. Each Party represents and warrants to the other as of the License Agreement Effective Date that:

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

(b)it has the legal right and power to enter into this License Agreement, to extend the rights and licenses granted or to be granted to the other in this License Agreement, and to fully perform its obligations hereunder,

(c)it has taken all necessary corporate action on its part required to authorize the execution and delivery of this License Agreement and the performance of its obligations hereunder, 

(d)this License Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms  and 

(e)except with respect to any Pre-existing Restrictions, the execution, delivery and performance by such Party of this License Agreement and the consummation of the transactions contemplated hereby will not result in any violation of, conflict with, result in a breach of or constitute a default under any understanding, contract or agreement to which such Party is a party or by which it is bound, including, in the case of Arcturus, each of the agreements which Arcturus has identified to CureVac prior to the License Agreement Effective Date, in each case as would reasonably be expected to have a material adverse effect on the rights of the other Party hereunder.

9.2Additional Representations of Arcturus.  Arcturus hereby represents and warrants to CureVac as of the License Agreement Effective Date as follows:

 

29

 

 

(a)Impairment. Except with respect to any Pre-existing Restrictions, neither Arcturus nor any of its Affiliates has entered into any agreement or otherwise licensed, granted, assigned, transferred, conveyed or otherwise encumbered or disposed of any right, title or interest in or to any of its assets, including any intellectual property rights including Know-How, that would in any way conflict with or impair the scope of any rights or licenses granted to CureVac with respect to the Licensed Product hereunder.

(b)Patents.  Appendix 1.4 sets forth a complete and accurate list of all Arcturus Technology Patents.  Arcturus Controls the Arcturus Technology, and is entitled to grant the licenses specified herein.  To Arcturus’ knowledge, the Arcturus Technology Patents have been procured or are being procured from the respective patent offices in accordance with applicable Law.  None of the Arcturus Technology Patents is or has been involved in any opposition, cancellation, interference, reissue or reexamination proceeding, and to Arcturus’ knowledge as of the License Agreement Effective Date, no Arcturus Technology is the subject of any judicial, administrative or arbitral order, award, decree, injunction, lawsuit, proceeding or stipulation.  As of the License Agreement Effective Date, neither Arcturus nor any of its Affiliates has received any notice alleging that the Arcturus Technology Patents are invalid or unenforceable, or challenging Arcturus’ ownership of or right to use any such rights.

(c)Entire LMD Technology. The Arcturus LMD Technology licensed to CureVac under this License Agreement comprises all LMD Technology Controlled by Arcturus which is necessary or useful to develop, manufacture and commercialize the Licensed Products for purposes of this License Agreement.

(d)Encumbrances. As of the License Agreement Effective Date, Arcturus has the right to grant the license herein to CureVac and neither Arcturus nor any of its Affiliates has granted any liens or security interests on the Arcturus Technology to any Third Party that is inconsistent with the license granted to CureVac under Section 2.1.  

(e)Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Arcturus, currently threatened against or affecting Arcturus that questions the validity of this License Agreement or the right of Arcturus to enter into this License Agreement or consummate the transactions contemplated hereby or that relates to the Arcturus Technology.

(f)Infringement.  Neither Arcturus nor any of its Affiliates has received any written notice of any claim, nor does Arcturus or its Affiliates have any knowledge of any claim, that any Patent, Know-How or other intellectual property owned or controlled by a Third Party would be infringed or misappropriated by the practice of any Arcturus LMD Technology in connection with the production, use, research, development, manufacture or commercialization of any Licensed Product.

(g)Third Party Infringement.  To Arcturus’ knowledge, no Third Party is infringing or has infringed any Patent within the Arcturus LMD Technology or is misappropriating or has misappropriated any Know-how within the Arcturus LMD Technology, in each case relating to the Target.

30

 

 

9.3Disclaimers.  Without limiting the respective rights and obligations of the Parties expressly set forth herein, each Party specifically disclaims any guarantee that any Licensed Product will be successful, in whole or in part. Except as otherwise expressly provided in this License Agreement, the Parties make no representations and extend no warranty of any kind under this License Agreement, neither express nor implied.

9.4No Consequential Damages.  Notwithstanding anything in this License Agreement or otherwise, neither Party will be liable to the other or any Third Party with respect to any subject matter of this License Agreement for any indirect or consequential damages, provided that this Section 9.4 will not apply to breaches of Article 8 or the Parties’ indemnification rights or obligations under Section 9.6, or in the event of willful misconduct.

9.5Performance by Others.  The Parties recognize that each Party may perform some or all of its obligations under this License Agreement through Affiliates, subcontractors or - in the event of CureVac - Sublicensees, provided, however, that each Party will remain fully responsible and liable for the performance by its Affiliates, subcontractors and Sublicensees, and will cause its Affiliates, subcontractors and Sublicensees to comply with the provisions of this License Agreement in connection therewith.

9.6Indemnification.

(a)Indemnification by CureVac.  CureVac will indemnify Arcturus, its Affiliates and their respective directors, officers, employees, Third Party licensors and agents, and their respective successors, heirs and assigns (collectively, "Arcturus Indemnitees"), and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, "Losses") in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, "Third Party Claims") against the Arcturus Indemnitees to the extent arising from or occurring as a result of: (i) the breach by CureVac of any representation or warranty of this License Agreement; (ii) any gross negligence or willful misconduct on the part of any CureVac Indemnitee; or (iii) the development, manufacture or commercialization by or on behalf of CureVac or any of its Affiliates or Sublicensees of Licensed Product other than if related to an LMD component thereof specifically provided by Arcturus, except in each case (i)-(iii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this License Agreement.

(b)Indemnification by Arcturus.  Arcturus will indemnify CureVac, its Affiliates and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, "CureVac Indemnitees"), and defend and hold each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims against CureVac Indemnitees to the extent arising from or occurring as a result of: (i) the breach by Arcturus of any representation or warranty of this License Agreement; or (ii) any gross negligence or willful misconduct on the part of any Arcturus Indemnitee, except in each case (i) and (ii) to the extent arising from or occurring as a result of the gross negligence or willful misconduct on the part of a CureVac Indemnitee or CureVac’s breach of this License Agreement.

31

 

 

(c)Notice of Claim.  All indemnification claims provided for in Sections 9.6(a) and 9.6(b) will be made solely by such Party to this License Agreement (the "Indemnified Party").  The Indemnified Party will promptly notify the indemnifying Party (an "Indemnification Claim Notice") of any Losses or the discovery of any fact upon which the Indemnified Party intends to base a request for indemnification under Section 9.6(a) and 9.6(b), but in no event will the indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and estimated amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party will furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

(d)Defense, Settlement, Cooperation and Expenses.

	
 
	
(i)
	
Control of Defense.  At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third Party Claim by the indemnifying Party will not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor will it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party (the indemnifying Party will consult with the Indemnified Party with respect to such counsel and a possible conflict of interest of such counsel retained by the indemnifying Party).  In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party will as soon as possible deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party will reimburse the indemnifying Party for any and all costs and expenses (including reasonable attorneys’ fees and costs of suit) and any Third Party Claims incurred by the indemnifying Party in its defense of the Third Party Claim.

	
 
	
(ii)
	
Right to Participate in Defense.  Without limiting Section 9.6(d)(i), any Indemnified Party will be entitled to participate in, but not control, the defense of such Third Party Claim and to engage counsel of its choice for such purpose; provided, however, that such engagement will be at the Indemnified Party’s own cost and expense unless (i) the indemnifying Party has failed to promptly assume the defense and engage counsel in accordance with Section 9.6(d)(i) (in which case the Indemnified Party will control the defense) or (ii) the interests of the
 

32

 

 

Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under applicable Law, ethical rules or equitable principles, in which case the indemnifying Party will assume one hundred percent (100%) of any such costs and expenses of counsel for the Indemnified Party.

	
 
	
(iii)
	
Settlement.  With respect to any Third Party Claims that relate solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which the indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party will have the sole right to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, will deem appropriate.  With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 9.6(d)(i), the indemnifying Party will have authority to agree to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (such consent not to be unreasonably withheld, delayed or conditioned).  The indemnifying Party will not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the prior written consent of the indemnifying Party.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party will admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party, such consent not to be unreasonably withheld, delayed or conditioned.

	
 
	
(iv)
	
Cooperation.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will use Diligent Efforts to cause each other indemnified party to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith, at the indemnifying Party’s expense.  Such cooperation will include access during normal business hours afforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.

 

33

 

 

	
 
	
(v)
	
Costs and Expenses.  Except as provided above in this Section 9.6(d), the costs and expenses, including attorneys’ fees and expenses, incurred by the Indemnified Party in connection with any claim will be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

9.7Insurance.  Each Party will maintain at its sole cost and expense, an adequate liability insurance or self-insurance program (including product liability insurance) to protect against potential liabilities and risk arising out of activities to be performed under this License Agreement, and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the respective industry of such Party for the activities to be conducted by such Party under this License Agreement.  Subject to the preceding sentence, such liability insurance or self-insurance program will insure against all types of liability, including personal injury, physical injury or property damage arising out of the manufacture, sale, use, distribution or marketing of Licensed Product.  The coverage limits set forth herein will not create any limitation on a Party’s liability to the other under this License Agreement.

10.Term and Termination.

10.1Term.  

(a)This License Agreement will commence as of the License Agreement Effective Date and, unless sooner terminated in accordance with the terms hereof or by mutual written consent, will continue on a Licensed Product-by-Licensed Product and a country-by-country basis, until there are no more payments owed to Arcturus in such country (the longest such period of time hereunder, the "Term").  Upon there being no more such payments hereunder in such country, the license contained in Section 2.1 will become irrevocable, perpetual and fully paid up and will remain in effect with respect to such Licensed Product in such country. 

(b)If the Target to which this License Agreement relates is chosen by the Parties for co-development under the Co-Development Agreement, this License Agreement will automatically terminate upon the written agreement of the Parties to include such programs under the Co-Development Agreement, in accordance with Section 4.2(a) of the Co-Development Agreement. 

(c)The Parties agree that this Agreement and the Co-Development Agreement relate to different projects and, therefore, the validity, term and termination of this Agreement shall be independent from the validity, term and termination of the Co-Development Agreement.

10.2Termination by Arcturus.

(a)Breach.  Arcturus will have the right to terminate this License Agreement in full upon delivery of written notice to CureVac in the event of any material breach by CureVac of any terms and conditions of this License Agreement, provided that such breach has not been cured within [...***...] after written 

 

***Confidential Treatment Requested

34

 

 

notice thereof is given by Arcturus to CureVac specifying the nature of the alleged breach.

(b)Disputed Breach.  If CureVac disputes in good faith the existence or materiality of a breach specified in a notice provided in accordance with Section 10.2(a), and CureVac provides Arcturus notice of such dispute within such [...***...] period, then Arcturus shall not have the right to terminate this License Agreement under Section 10.2(a) unless and until it is finally determined, in accordance with Section 11.1, that CureVac has materially breached this License Agreement and that CureVac fails to cure such breach within [...***...] following such decision.  It is understood and agreed that during the pendency of such dispute, all of the terms and conditions of this License Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder. During the pendency of any such dispute, CureVac shall pay to Arcturus all Milestone Payments and royalty payments set forth herein.  

(c)Patent Challenge.   Except to the extent the following is unenforceable under the Laws of a particular jurisdiction, Arcturus may terminate this License Agreement on a Patent-by-Patent basis upon delivery of [...***...] prior written notice to CureVac 

	
 
	
(i)
	
if CureVac or its Affiliates, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Arcturus Technology Patents anywhere in the world and does not withdraw or settle such challenge within the [...***...] cure period; or

	
 
	
(ii)
	
if a sublicensee of CureVac, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Arcturus Technology Patents anywhere in the world and CureVac does not terminate the corresponding sublicense agreement or such challenge is not withdrawn or settled (by such sublicensee or CureVac) within the [...***...] cure period.  

10.3Termination by CureVac; Certain Remedy for Breach.

(a)Breach.  CureVac will have the right to terminate this License Agreement in full upon delivery of written notice to Arcturus in the event of any material breach by Arcturus of any terms and conditions of this License Agreement, provided that such breach has not been cured within [...***...] after written notice thereof is given by CureVac to Arcturus specifying the nature of the alleged breach. 

(b)Discretionary Termination.  CureVac will have the right to terminate this License Agreement in full at its discretion for any reason by delivering written notice to Arcturus, such termination to be effective [...***...] following the date of such notice.

(c)Maintenance of License.  In the event of a material breach by Arcturus of Sections 2.2(c) or 3.2, if such breach has not been cured within [...***...] after written notice thereof, CureVac may notify Arcturus in writing that the License
 

***Confidential Treatment Requested

35

 

 

Agreement shall remain in full force and effect, provided that any remaining payments to Arcturus pursuant to Sections 4.1, 4.2 and 4.3 following such notification shall be reduced by [...***...]. 

10.4Rights Upon Bankruptcy.  All rights and licenses granted under or pursuant to this License Agreement by Arcturus or its Affiliates are, and will otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to "intellectual property" as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that CureVac and its Affiliates and Sublicensees, as licensees of such rights under this License Agreement, will retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code and any foreign counterparts thereto.  Without limiting the Parties’ rights under Section 365(n) of the U.S. Bankruptcy Code, if a case under U.S. Bankruptcy Code is commenced by or against a Party, the other Party shall be entitled to a copy of any and all such intellectual property and all embodiments of such intellectual property, and the same, if not in the possession of such other Party, shall be promptly delivered to it (i) before this License Agreement is rejected by or on behalf of the bankrupt Party, within thirty (30) days after the other Party’s written request, unless the bankrupt Party, or its trustee or receiver, elects within thirty (30) days to continue to perform all of its obligations under this License Agreement, or (ii) after any rejection of this License Agreement by or on behalf of the bankrupt Party, if not previously delivered as provided under clause (i) above.  All rights of the Parties under this Section 10.4 and under Section 365(n) of the U.S. Bankruptcy Code are in addition to and not in substitution of any and all other rights, powers, and remedies that each Party may have under this License Agreement, under the U.S. Bankruptcy Code, and any other applicable Laws.  The non-bankrupt Party shall have the right to perform the obligations of the bankrupt Party hereunder with respect to such intellectual property, but neither such provision nor such performance by the non-bankrupt Party shall release the bankrupt Party from any such obligation or liability for failing to perform it.

10.5Effects of Termination.  

(a)Upon termination (but not expiration pursuant to Section 10.1) of this License Agreement for any reason:

	
 
	
(i)
	
Cessation of Rights.  Except as expressly provided herein, including Sections 8.5, 10.5(a) and as necessary for CureVac to sell off existing inventory as permitted under Section 10.5(iii) below, all rights and licenses granted by Arcturus to CureVac under this License Agreement will terminate. CureVac shall wind down the development (including any clinical trials), manufacture and commercialization of the Licensed Product in compliance with all applicable Laws and at its own cost and expense. 

	
 
	
(ii)
	
Sell Off. Notwithstanding the termination of CureVac's licenses and other rights under this License Agreement, CureVac shall retain the right to distribute, sell or otherwise dispose of its existing inventory of the Licensed Products, in each case that is intended for distribution, sale or disposition in the Territory, for a period of not more than six (6) months following the date of the effective termination, as though this License Agreement had not been terminated, and such distribution, sale or other disposition shall not constitute infringement of the Patents or other intellectual property or proprietary rights of Arcturus or its Affiliates. CureVac's right to distribute, sell or otherwise dispose of its existing inventory of the Licensed Products pursuant to this

 

***Confidential Treatment Requested

36

 

 

Section 10.5(a)(ii) shall be subject to CureVac's continuing obligation to pay royalties with respect to the Net Sales. 

(b)Upon termination pursuant to Section 10.1(b), Arcturus shall refund to CureVac the Option Exercise Fee (as defined in the Development and Option Agreement), the Milestone Payments already paid by CureVac and all other payments made by CureVac in relation to this License Agreement. 

10.6Survival.  In addition to the termination consequences set forth in Section 10.5, the following provisions will survive termination or expiration of this License Agreement: Sections 1, 4 (to the extent of any outstanding payments accrued as of the effective date of termination), 5, 8, 9.4, 9.6, 10.5, 10.6 and 11.  Termination or expiration of this License Agreement will not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor preclude either Party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this License Agreement nor prejudice either Party’s right to obtain performance of any obligation.  All other rights and obligations will terminate upon expiration of this License Agreement.

11.General Provisions.

11.1Dispute Resolution.

(a)Disputes.  Disputes arising under or in connection with this License Agreement will be resolved pursuant to this Section 11.1; provided, however, that in the event a dispute cannot be resolved without an adjudication of the rights or obligations of a Third Party (other than any CureVac Indemnitees or Arcturus Indemnitees identified in Section 9.6), the dispute procedures set forth Sections 11.1(c) and 11.1(c) will be inapplicable as to such dispute.

(b)Dispute Escalation.  In the event of a dispute between the Parties, the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves.  In the event that such dispute is not resolved on an informal basis within thirty (30) days, either Party may, by written notice to the other, have such dispute referred to each Party’s Chief Executive Officer or his or her designee (who will be a senior executive with the appropriate authority to determine the matter for such party), who will attempt in good faith to resolve such dispute by negotiation and consultation for a thirty (30) day period following receipt of such written notice

(c)Dispute Resolution.  In the event the Chief Executive Officers of the Parties are not able to resolve such dispute as set forth above, the Parties agree to try to solve such dispute amicably by mediation. The Parties shall conduct a mediation procedure according to the Mediation Rules of the World Intellectual Property Organization (WIPO) in effect on the date of the commencement of the mediation proceedings. The location of the mediation proceedings will be New York City, New York, U.S.. The number of mediators will be one (1). The language of the mediation proceedings will be English. If the dispute has not been settled pursuant to the said rules within sixty (60) days following the filing of a request for mediation or within such other period as the Parties may agree in writing, either Party may submit the dispute to final and binding arbitration. Any dispute relating to the validity
 

37

 

 

performance, construction or interpretation of this License Agreement, which cannot be resolved amicably between the Parties after following the procedure set forth in this Section 11.1, shall be submitted to arbitration in accordance with the Arbitration Rules of WIPO in effect on the date of the commencement of the arbitration proceedings. The location of the arbitration proceedings will be New York City, New York, U.S.. The number of arbitrators will be three (3). The language of the arbitration proceeding will be English. The decision of the arbitrators shall be final and binding upon the Parties (absent manifest error on the part of the arbitrator(s)) and enforceable in any court of competent jurisdiction. 

11.2Relationship of Parties.  Nothing in this License Agreement is intended or will be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.  No Party will incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided therein.  There are no express or implied third party beneficiaries hereunder (except for CureVac Indemnitees and Arcturus Indemnitees for purposes of Section 9.6).  For clarity, CureVac does not grant to Arcturus any rights or licenses under this License Agreement to any CureVac technology or intellectual property rights.

11.3Compliance with Law.  Each Party will perform or cause to be performed any and all of its obligations or the exercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.

11.4Governing Law.  This License Agreement will be governed by and construed in accordance with the Laws of the State of New York, U.S., without respect to its conflict of Laws rules.

11.5Counterparts; Facsimiles.  This License Agreement may be executed in one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  Facsimile or PDF execution and delivery of this License Agreement by either Party will constitute a legal, valid and binding execution and delivery of this License Agreement by such Party.

11.6Headings.  All headings in this License Agreement are for convenience only and will not affect the meaning of any provision hereof.

11.7Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this License Agreement.  Accordingly, the rule of construction that any ambiguity in this License Agreement will be construed against the drafting party will not apply.

11.8Interpretation.  Whenever any provision of this License Agreement uses the term "including" (or "includes"), such term will be deemed to mean "including without limitation" (or "includes without limitations").  "Herein," "hereby," "hereunder," "hereof" and other equivalent words refer to this License Agreement as an entirety and not solely to the particular portion of this License Agreement in which any such word is used.  All definitions set forth herein will be deemed applicable whether the words defined are used herein in the singular or the plural.  Unless otherwise provided, all references to Sections and Appendices in this License Agreement are to Sections and Appendices of this License Agreement.  References to any Sections include Sections and subsections that are part of the related Section.

38

 

 

11.9Binding Effect.  This License Agreement will inure to the benefit of and be binding upon the Parties, their Affiliates, and their respective lawful successors and assigns.

11.10Assignment.  This License Agreement may not be assigned by either Party, nor may either Party delegate its obligations or otherwise transfer licenses or other rights created by this License Agreement, except as expressly permitted hereunder or otherwise without the prior written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned; provided that either Party may assign this License Agreement without such consent to an Affiliate or to its successor in connection with sale of all or substantially all of its assets or business or that portion of its business pertaining to the subject matter of this License Agreement (whether by merger, consolidation or otherwise).

11.11Notices.  All notices, requests, demands and other communications required or permitted to be given pursuant to this License Agreement will be in writing and will be deemed to have been duly given upon the date of receipt if delivered by hand, recognized international overnight courier, or registered or certified mail, return receipt requested, postage prepaid or facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier) to the following addresses (or to such address as a Party may subsequently provide by written notice in accordance with this Section 11.11):

If to CureVac:CureVac AG

Paul-Ehrlich-Str. 15

72076 Tübingen

Germany

Attention: CEO and General Counsel

Fax: +49 7071 9883 - 1101

 

 

If to Arcturus:Arcturus Therapeutics Inc.

10628 Science Center Drive

Suite 200

San Diego, California 92121

USA 

Attn:Chief Executive Officer

Copy to:  General Counsel

Fax: (858) 300-5028

 

 

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

Cooley LLP

3175 Hanover St.

Palo Alto, CA  94303

Attn: Glen Y. Sato

Fax: (650) 849-7400

 

 

11.12Amendment and Waiver.  This License Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties; provided that any unilateral undertaking or waiver made by one Party in favor of the other will be enforceable if undertaken in a writing signed by the Party to be charged with the 

 

39

 

 

undertaking or waiver.  Any waiver of any rights or failure to act in a specific instance will relate only to such instance and will not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

11.13Severability.  In the event that any provision of this License Agreement will, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability will not affect any other provision hereof, and the Parties will negotiate in good faith to modify the License Agreement to preserve (to the extent possible) their original intent.

11.14Entire Agreement.  This License Agreement together with the Development and Option Agreement and any other license agreements entered into during the Term pursuant to the Development and Option Agreement are the sole agreement with respect to the subject matter hereof and supersedes all other agreements and understandings between the Parties with respect to same.

11.15Force Majeure.  Neither Arcturus nor CureVac will be liable for failure of or delay in performing obligations set forth in this License Agreement (other than any obligation to pay monies when due), and neither will be deemed in breach of such obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of Arcturus or CureVac; provided that the Party affected will promptly notify the other of the force majeure condition and will exert reasonable efforts to eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.

 

 

40

 

 

Appendix 1.3

Description of the Arcturus LMD Technology

[To be completed in accordance with Section 5.2 of the Development and Option Agreement.]

 

 

 

 

 

Appendix 1.4

Patents and Know-How within the Arcturus Technology 

as of the License Agreement Effective Date

[To be updated in accordance with Section 5.2 of the Development and Option Agreement.]

 

	
 
	
(C)
	
 Patents

 

ARCTURUS LMD TECHNOLOGY

[...***...]

***Confidential Treatment Requested

 

 

 

[...***...]

	
 
	
(D)
	
Know-How

[...***...]

 

 

***Confidential Treatment Requested

 

 

 

Appendix 1.28

Joint Interest Patents

[To be completed in accordance with Section 5.2 of the Development and Option Agreement and updated during the Term]

 

 

 

 

Appendix 1.50

Pre-Existing Restrictions

	
 
	
•
	
[...***...]

 

 

***Confidential Treatment Requested

 

 

 

Appendix 1.59

Description of the Target

The description for a Target described in sub-clause (a) of the definition of Target shall include the following information:

a.[...***...];

b.[...***...]; and

c.[...***...]; and 

d.[...***...]

The description for a Target described in sub-clause (b) of the definition of Target shall include the following information:

	
 
	
b.
	
[...***...]

 

***Confidential Treatment Requested

 

 

 

The description for a Target described in sub-clause (c) of the definition of Target shall include the following information:

a.[...***...]; and

b.[...***...]

 

***Confidential Treatment Requestedarct-ex413_1676.htm

Exhibit 4.13

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2

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CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT

This CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT (this “Agreement”) is made as of 1 January 2018 (the “Effective Date”), by and between Arcturus Therapeutics, Inc., a Delaware corporation with offices at 10628 Science Center Drive, Suite 200, San Diego, California 92121, U.S. (“Arcturus”), and CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany (“CureVac”).  CureVac and Arcturus are referred to in this Agreement individually as a “Party” and collectively as the “Parties”.

 

RECITALS

WHEREAS, Arcturus has expertise and intellectual property relating to the targeted delivery of nucleic acid therapeutics, including its proprietary lipid-mediated delivery technology, and is developing an mRNA-based product for treating ornithine transcarbamylase (“OTC”) deficiency, among other programs;

WHEREAS, CureVac has expertise and intellectual property relating to mRNA therapeutics, in particular mRNA Constructs (as defined below);

WHEREAS, Arcturus and CureVac desire to establish a collaboration for the co-development and, if successful, commercialization of such OTC product, incorporating CureVac’s or Arcturus’ mRNA technology in combination with Arcturus’s lipid-mediated delivery system; and

WHEREAS, Arcturus desires to grant CureVac an option to co-develop one additional mRNA therapeutics program of Arcturus, and CureVac desires to grant Arcturus an option to co-develop up to two of CureVac’s mRNA therapeutics programs, which co-development programs, if successful, would be commercialized by the Parties;

WHEREAS, the Parties have entered in parallel into a Development and Option Agreement of even date herewith (“Development and Option Agreement”) from which Reserved Target List potential Products for Development in the Field may be selected for Development, Manufacture and Commercialization pursuant to this Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, CureVac and Arcturus hereby agree as follows:

 

		
	
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Article 1

DEFINITIONS

The terms in this Agreement with initial letters capitalized shall have the meanings set forth below, or the meaning as designated in the indicated places throughout this Agreement.

1.1 “Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under common control with that Party, as of the Effective Date or thereafter during the Term, but only for so long as such control exists.  For the purpose of this definition only, “control” (including, with correlative meaning, the terms “controlled by” and “under the common control”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such Person, whether by the ownership of more than fifty percent (50%) of the voting stocking of such Person, by contract or otherwise. Regarding CureVac, Affiliate shall not include [*...***...].

1.2“Alliance Manager” is defined in Section 2.7.

1.3“Approved Third Party Payments” is defined in Section 3.5. 

1.4“Arcturus Clinical Development Plan” is defined in Section 4.5(c).

1.5“Arcturus Know-How” means, subject to Section 14.2, all Know-How that is (a) Controlled by Arcturus or its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture or Commercialization of any Product in the Field.  Arcturus Know-How includes Arcturus’s interest in Joint Know-How. Arcturus Know-How existing as of the Effective Date is listed in Exhibit 1.5.  

1.6“Arcturus LMD Technology” means Arcturus’s proprietary lipid-mediated delivery technology for delivering RNA therapeutics, including the LUNARTM platform, a description of which technology, as in existence as of the Effective Date, is set forth on Exhibit 1.6.

1.7“Arcturus mRNA Construct” means an mRNA Construct that embodies the Arcturus mRNA Technology.

1.8“Arcturus mRNA Technology” means technology Controlled by Arcturus or its Affiliates related to mRNA Constructs, a description of which technology, as in existence as of the Effective Date, is set forth on Exhibit 1.8.

1.9“Arcturus Option” is defined in Section 4.6(a).

1.10“Arcturus Patents” means, subject to Section 14.2, all Patent Rights that are (a) Controlled by Arcturus or its Affiliates as of the Effective Date or during the Term, and (b) reasonably required for the Development, Manufacture or Commercialization of any Product in the Field.  Arcturus Patents existing as of the Effective Date are listed in Exhibit 1.5.  Arcturus Patents include Arcturus’s interest in Joint Patents. 

 

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1.11“Arcturus Product” means any product being developed in the Arcturus Program that contains an Arcturus mRNA Construct formulated with the Arcturus LMD Technology.

1.12“Arcturus Product Marks” is defined in Section 9.9.

1.13“Arcturus Program” means one of Arcturus’s proprietary drug development programs to develop mRNA therapeutics, as determined pursuant to Section 4.2. 

1.14“Arcturus Technology” means the Arcturus Patents and Arcturus Know-How. 

1.15“Business Day” means a day other than a Saturday, Sunday, or bank or other public holiday in San Diego, California, USA or Tübingen, Germany or Boston, Massachusetts, USA.

1.16“Change of Control” with respect to a Party, shall be deemed to have occurred if during the Term (i) any person or entity is or becomes the "beneficial owner", directly or indirectly, of shares of capital stock or other interests (including partnership interests) of a Party’s then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions of a Party’s representing fifty percent (50%) or more of the total voting power of all outstanding classes of voting stock of such Party or has the power, directly or indirectly, to elect a majority of the members of the Party’s board of directors, or similar governing body; or (ii) such Party enters into a merger, consolidation or similar transaction with another person or entity; or (iii) such Party sells or transfers to any Third Party, in one (1) or more related transactions, properties or assets representing all or substantially all of such Party’s consolidated total assets to which this Agreement relates; provided, however, that 

(a)subsections (i) to (iii) shall only apply if the person or entity or Third Party acquiring control is a pharmaceutical company which has experience in developing and commercializing pharmaceutical products (i.e., is a strategic, not financial investor or partner) or a competitor, i.e., a company whose business consists principally of mRNA development, manufacturing and/or commercialization and

(b)a bone fide financing transaction with Third Parties that does not otherwise meet the requirements of subsection (a) shall not constitute a Change of Control.

1.17“Claims” means all liability, loss, damage, claim, injury, costs or expenses (including reasonable attorneys’ fees and expenses of litigation) of any kind arising from Third Party demands, claims, actions and proceedings (whether criminal or civil, in contract, tort or otherwise).

1.18“Clinical Development Costs” means, with respect to a Product, the costs and expenses for Developing such Product under a Clinical Development Plan, which shall include FTE Costs incurred (at the FTE Costs), and the direct Third Party costs, in each case without mark-up or administrative fee, recorded as an expense, by or on behalf of a Party or any of its Affiliates that are specifically identifiable or reasonably and directly allocable to those activities conducted in accordance with the applicable Clinical Development Plan. Except for costs in clause (d) below, Clinical Development Costs shall be limited to (i) those 

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activities that are specifically identified in the applicable Clinical Development Plan and (ii) those costs contained in the budget therein. Subject to the foregoing, Clinical Development Costs shall include such costs in connection with the following activities, as applicable:

(a)clinical trials (including Required Phase 4 Studies) for a Product, including (i) the preparation for and conduct of clinical trials; (ii) data collection and analysis and report writing; (iii) clinical laboratory work; (iv) regulatory activities in direct connection with such studies, including adverse event recordation and reporting, but not including regulatory activities relating generally to a Product and not directly related to such studies, such as regulatory activities relating to Marketing Authorization Applications, other than as set forth in clause (b); and (v) advisory meetings in connection with a Product.

(b)the preparation of a regulatory dossier to the extent necessary to obtain any Regulatory Approval for a Product and filing fees in connection with the filing of applications for Regulatory Approvals;

(c)(i) Manufacture or purchase of a Product for use in clinical trials or other activities for such Product; (ii) the manufacture, purchase or packaging of comparators or placebo for use in clinical trials for a Product (with the manufacturing costs for comparators or placebo to be determined in the same manner as manufacturing costs are determined for such Product); and (iii) costs and expenses of disposal of drugs and other supplies used in such clinical trials or other activities (in each case ((i) through (iii)) determined based on the definition of Manufacturing Costs), but excluding the costs for scale-up, qualification and validation; and

(d)Recall or withdrawal expenses to be treated as Clinical Development Costs pursuant to Section 5.5(b); and Damages from Third Party Claims to be treated as Clinical Development Costs pursuant to Section 13.4.

1.19“Clinical Development Plan” is defined in Section 4.7.

1.20“CMO” means any Third Party contract manufacturing organization.

1.21“Co-Developed Arcturus Product” means any Arcturus Product for which CureVac exercises the CureVac Option.

1.22“Co-Developed CureVac Product” means any CureVac Product for which Arcturus exercises an Arcturus Option.

1.23“Commercialization” means the commercial activities regarding a Product in the Field in the Territory as provided in Section 7.1.  “Commercialize” has a correlative meaning. 

1.24“Commercialization Costs” means all internal (at the FTE Costs) and Third Party costs and expenses incurred by or on behalf of either Party that are directly allocable to the Commercialization of Products in the Territory, including the manufacture of Products in support of such Commercialization. 

1.25“Commercialization Plan” is defined in Section 7.3.

 

 

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1.26“Committee” means the JSC or any subcommittee established under Section 2.1(l), as applicable.

1.27“Competing Product” means any product that contains or employs a nucleic acid construct that is capable of expressing a functional version of (a) with respect to the OTC Product, ornithine transcarbamylase, (b) with respect to a Product expressing an antibody, all antibodies directed at the same antigen and (c) with respect to all other Products, the protein that is the target of such Product, as further agreed by the Parties at the time the applicable program is included under this Agreement; for example if such protein referenced under (a) or (c) is part of an enzymatic pathway, then products directed to other components of the pathway may also be considered a Competing Product.  

1.28“Confidential Information” of a Party means all proprietary Know-How, unpublished patent applications and other non-public information and data of a financial, commercial, business, operational, scientific or technical nature of such Party that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or any of its Affiliates, whether made available orally, in writing or in electronic form in connection with this Agreement, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with this Agreement.  In addition, any non-public information related to this Agreement or the Products hereunder and disclosed by a Party to the other Party (or their respective Affiliates) under the Confidentiality Agreement will be deemed such Party’s Confidential Information hereunder. Any Joint Know-How shall be deemed to be Confidential Information of both CureVac and Arcturus. 

1.29“Confidentiality Agreement” means that certain Confidentiality Agreement between the Parties dated as of [*...***...]. 

1.30“Control” or “Controlled” means, with respect to any Know-How, Patent Rights or other intellectual property rights, a Party has the legal authority or right (whether by ownership, license or otherwise) to grant a license, sublicense, access or right to use (as applicable) under such Know-How, Patent Rights, or other intellectual property rights to the other Party on the terms and conditions set forth herein at the time of such grant, in each case without breaching the terms of any agreement with a Third Party.

1.31“CureVac Clinical Development Plan” is defined in Section 4.6(c).

1.32“CureVac Know-How” means, subject to Section 14.2, all Know-How that is (a) Controlled by CureVac or its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture or Commercialization of any Product in the Field.  CureVac Know-How includes CureVac’s interest in Joint Know-How. CureVac Know-How existing as of the Effective Date is listed in Exhibit 1.32.  

1.33“CureVac mRNA Construct” means an mRNA Construct that embodies the CureVac mRNA Technology.

1.34“CureVac mRNA Technology” means technology Controlled by CureVac or its Affiliates related to mRNA Constructs, a description of which technology, as in existence as of the Effective Date, is set forth on Exhibit 1.32. 

1.35“CureVac Option” is defined in Section 4.5(b).

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1.36“CureVac Patents” means, subject to Section 14.2, all Patent Rights that are (a) Controlled by CureVac or its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture or Commercialization of any Product in the Field.  CureVac Patents existing as of the Effective Date are listed in Exhibit 1.32.  CureVac Patents include CureVac’s interest in Joint Patents.

1.37“CureVac Product” means any product being developed in the CureVac Program that contains a CureVac mRNA Construct formulated with the Arcturus LMD Technology. 

1.38“CureVac Product Marks” is defined in Section 9.9.

1.39“CureVac Program” means one of CureVac’s proprietary drug development programs to develop mRNA therapeutics, as determined pursuant to Section 4.2.

1.40“CureVac Technology” means the CureVac Know-How and CureVac Patents. 

1.41“Develop” or “Development” means all development activities for any Product that are directed to obtaining Regulatory Approval(s) of such Product, including: all non-clinical, preclinical and clinical activities conducted in support of Regulatory Approval (including any Required Phase 4 Studies), testing and studies of such Product (including IND-enabling studies); manufacturing development, process and formulation development; toxicology, pharmacokinetic and pharmacological studies; manufacture and distribution of such Product for use in clinical trials (including placebos and comparators); statistical analyses; assay development; instrument design and development; protocol design and development; quality assurance and control; report writing; and the preparation, filing and prosecution of any MAA for such Product; and all regulatory affairs related to any of the foregoing. 

1.42“Development and Option Agreement” is defined in the Recitals above.

1.43“Development Plan” is defined in Section 4.7.

1.44“Diligent Efforts” means: (a) where applied to carrying out specific tasks and obligations of a Party under this Agreement, expending reasonable, diligent, good faith efforts and resources to accomplish such task or obligation as such Party would normally use to accomplish a similar task or obligation under similar circumstances; and (b) where applied to the Development, Manufacture and/or Commercialization of a Product, the use of reasonable, diligent, good faith efforts and resources, in an active and ongoing program, as normally used by a biotechnology company for a priority product discovered or identified internally by such Party, which product is at a similar stage in its development or product life and is of similar market potential and intellectual property protection.  “Diligent Efforts” shall require that such Party (on its own and/or acting through any of its Affiliates, sublicensees or subcontractors), at a minimum: (i) promptly assign responsibility for such obligations to qualified personnel, set annual goals and objectives for carrying out such obligations, and monitor and hold personnel accountable for progress with respect to such goals and objectives; (ii) set and seek to achieve specific and meaningful objectives for carrying out such obligations; and (iii) make and implement decisions and allocate resources designed to diligently advance progress with respect to such objectives.

 

 

 

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1.45“Disclosing Party” is defined in Section 10.1.

1.46“Distribution Costs” means those Commercialization Costs incurred by a Party or for its account, during the Term and pursuant to this Agreement, that are directly and reasonably allocable to the distribution of a Product in the Territory, including: (a) handling and transportation to fulfill orders with respect to a Product (but excluding such costs to the extent they are treated as a deduction in the definition of Net Sales); (b) customer services, including order entry, billing and adjustments, inquiry and credit and collection with respect to a Product; (c) reasonable and customary fees and other amounts payable to distributors; and (d) costs of storage and distribution of Products. 

1.47“Divestiture” means the sale, exclusive license or transfer of rights to a Competing Product to a Third Party without receiving a continuing share of equity, profit, royalty payments, or other economic interest in the success of such Competing Product in the Territory. “Divest” has a correlative meaning.

1.48“Dollar” means the U.S. dollar, and “$” shall be interpreted accordingly.

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

1.50“Executive Officers” means the Chief Executive Officer of Arcturus and the Chief Executive Officer of CureVac. 

1.51“FCPA” is defined in Section 14.8(a).

1.52“FDA” means the United States Food and Drug Administration or any successor entity thereto.

1.53“Field” means the treatment (except with vaccines) of all diseases and conditions in humans. 

1.54“Finance Officers” means one individual designated by each Party by written notice to the other Party to manage the financial reconciliation of Clinical Development Costs, Joint Commercialization Costs and other costs shared by the Parties under this Agreement.

1.55“First Commercial Sale” means, with respect to any Product in any country or jurisdiction, the first sale of such Product to a Third Party for distribution, use or consumption in such country or jurisdiction after Regulatory Approval for commercial sale has been obtained for such Product in such country or jurisdiction.

1.56“First Program Addition Period” is defined in Section 4.2.

1.57“Forced Opt-Out” is defined in Section 14.3.

1.58“FTE” means the equivalent of a full time individual’s work for a twelve (12) month period (consisting of a total of [*...***...] hours (in relation to Arcturus) or [...***...] hours (in relation to CureVac) per year of dedicated effort).  Any person who devotes less than [...***...] hours (in relation to Arcturus) or [...***...] hours (in relation to CureVac) per year on the applicable activities shall be treated as an FTE on a pro-rata basis, based upon the actual 

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number of hours worked by such person on such activities, divided by [*...***...] (in relation to Arcturus) or [...***...] (in relation to CureVac).  Any person who devotes more than [...***...] hours (in relation to Arcturus) or [...***...] hours (in relation to CureVac) per year on the applicable activities shall be treated as one (1) FTE.  FTE activities shall not include the work of general corporate or administrative personnel. 

1.59"FTE Costs" means an initial rate of [...***...] Dollars ($[...***...]) per FTE per year, which shall apply through [...***...].  Thereafter, the FTE Costs shall be changed bi-annually at the end of each second calendar year to reflect any percentage increase or decrease (as the case may be) in the Consumer Price Index in the U.S. or Germany (index for all items) (“CPI”) (based on the change in the CPI from the most recent index available as of the Effective Date to the most recent index available as of the date of the calculation of such revised FTE Cost rate).

1.60“GAAP” means (a) for Arcturus, U.S. generally accepted accounting principles; and (b) for CureVac, German generally accepted accounting principles. 

1.61“Governmental Authority” means any federal, state, national, state, provincial or local government, or political subdivision thereof, or any multinational organization 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).   

1.62“IND” means any investigational new drug application, clinical trial application, clinical trial exemption or similar or equivalent application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

1.63“Initiation” means, with respect to a clinical trial of a Product, the first dosing of the first human subject for such clinical trial.  

1.64“Invention” means any process, composition, formulation, article of manufacture, method, discovery or finding, patentable or otherwise, that is generated by or on behalf of a Party or both Parties (including their respective Affiliates, sublicensees and subcontractors), whether or not patentable, in connection with the Development, Manufacture or Commercialization of mRNA Constructs or Products under this Agreement, including all rights, title and interest in and to the intellectual property rights therein.

1.65“Joint Commercialization Costs” means, with respect to a Product in a given time period, the sum of the following: 

(a)Commercialization Costs incurred by a Party in performing its obligations under a Commercialization Plan and in accordance with the budget then in effect and that are directly and reasonably allocable to Commercialization of Products in the Territory under such Commercialization Plan, which consist of: (i) Manufacturing Costs; (ii) Sales and Marketing Costs; (iii) costs associated with medical education activities (to the extent not otherwise included in Sales and Marketing Costs); and (iv) Distribution Costs; 

(b)Approved Third Party Payments under Section 3.5; 

 

 

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(c)recall and withdrawal expenses to be treated as Joint Commercialization Costs pursuant to Section 5.5(b); 

(d)patent enforcement costs to be treated as Joint Commercialization Costs pursuant to Section 9.5(f); 

(e)Trademark Costs; 

(f)regulatory costs for Commercialization activities; and 

(g)Damages from Third Party Claims to be treated as Joint Commercialization Costs pursuant to Section 13.4.  

Joint Commercialization Costs shall include such Commercialization Costs that are incurred after the Effective Date and prior to the First Commercial Sale of a Product (i.e., pre-launch costs), including those Commercialization Costs set forth in the Commercialization Plan and related budget.  Notwithstanding the foregoing, Joint Commercialization Costs shall exclude income tax liabilities and corporate overhead costs of either Party.

1.66“Joint Know-How” is defined in Section 9.1(d).

1.67“Joint Patents” is defined in Section 9.1(d).

1.68“Joint Steering Committee” or “JSC” is defined in Section 2.1.

1.69“Know-How” means any information, including discoveries, improvements, modifications, processes, methods, assays, designs, protocols, formulas, data, know-how and trade secrets (in each case, patentable, copyrightable or otherwise), but excluding any Patent Rights.

1.70“Law” means any federal, state, local, foreign or multinational law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any order by any Governmental Authority, or any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law. 

1.71“MAA” or “Marketing Authorization Application” means an application to the appropriate Regulatory Authority for approval to market a Product (but excluding pricing approval) in the Field in any particular jurisdiction (including, without limitation, a New Drug Application in the U.S.) and all amendments and supplements thereto. 

1.72“Manufacture” and “Manufacturing” mean activities directed to manufacturing, including (i) preparation, e.g., process development, intermediate and validation, (ii) production, e.g., processing, filling, finishing, packaging, labeling, quality assurance testing, release and the conduct of stability studies and (iii) storing and transporting any Product, including. 

1.73“Manufacturing Costs” means costs of manufacturing an mRNA Construct or Product or any component thereof, including the formulation of Product, which is either: 

(a)supplied to a Party by a Third Party, in which event Manufacturing Costs means: (i) the amount paid to such Third Party for the manufacturing and supply of 

 

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mRNA Construct or Product (excluding any payments to Third Parties for licenses to intellectual property); plus (ii) reasonable direct and identifiable internal costs and Third Party costs incurred or accrued (including any prepayments) by the manufacturing Party in connection with inventory write-offs, variances, manufacturing process improvements, storage, freight, manufacturing scale-up, manufacturing site qualification, materials, quality assurance and quality control (including testing), supply chain management, capital equipment, similar activities composing the manufacturing Party’s oversight of the manufacturing process of the Third Party, and any value-added tax or similar tax due for amounts paid to such Third Party, but excluding costs otherwise included within Clinical Development Costs; or 

(b)manufactured directly by a Party or its Affiliate, in which case Manufacturing Costs means the “standard cost” per unit (which for purposes of ongoing cost accounting purposes shall be calculated in accordance with the Manufacturing Party’s then-current standard cost process in accordance with GAAP that is applied consistently to all pharmaceutical products manufactured by such Party in the applicable facility).  The Parties shall reconcile the standard cost charges, and appropriate credits or payments from one Party to the other shall be made to effect such reconciliation not less than annually against the above Manufacturing Cost definition, including variances to standard costs and inventory write-offs.  This standard cost shall include 

(i)the cost of materials, direct labor, and other direct and identifiable variable costs incurred or accrued by the manufacturing Party in connection with the manufacture of an mRNA Construct or Product, manufacturing process improvements, storage and freight  specific to an mRNA Construct or Product, manufacturing scale-up, and 

(ii)an allocable portion consistently applied to all products and mRNA Constructs or Product manufactured in the applicable manufacturing facility for: manufacturing process improvements, manufacturing site qualification, materials, quality assurance and quality control (including testing), supply chain management, and costs of equipment, plant operations and plant support services necessary to produce an mRNA Construct or Product, but excluding costs otherwise not specific to the mRNA Construct or Product or otherwise included within Clinical Development Costs.  For clarity, the costs of plant operations and support services shall include utilities, maintenance, engineering, safety and other similar activities, including idle plant capacity reserved specifically for the mRNA Construct or Product based on anticipated volumes in the ensuing [*...***...] months and an allocable portion of human resources, finance, plant management.  In any event, costs that cannot be identified to a specific activity supporting manufacturing of an mRNA Construct or Product, such as charges for corporate overhead or excess capacity not specifically reserved as described above, shall be excluded from the determination of Manufacturing Costs. 

(c)In each case ((a) and (b)), such costs shall be deemed Manufacturing Costs to the extent such costs are directly and reasonably allocable to the Development or Commercialization of a Product in the Territory, and in accordance with GAAP. Manufacturing Costs shall be included in Clinical Development Costs as incurred.  Manufacturing Costs shall be included in Joint Commercialization Costs on a “cost of sales” basis as Product is sold, via standard costs and reconciliation for variances to standard cost and inventory write-offs.  In the event that a Party performs any of its manufacturing and supply obligations through one or more Affiliates, any inter-company amounts or fees paid for any such services or Product or any intermediate used therein by such Party shall not be 

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included in calculating Manufacturing Costs and only those costs directly incurred by such Affiliate shall be so included.  Manufacturing Costs shall include costs of such activities that are undertaken at any time during the Term of this Agreement (including manufacturing activities relating to the Commercialization of a Product that are undertaken prior to the initial Regulatory Approval of such Product). The JSC shall determine the Manufacturing Costs and allocate them to the Clinical Development Costs and the Commercialization Costs, based on the rules stated in this Section 1.73.

1.74“Materials” means any and all proprietary tangible materials (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical materials), including reagents, research tools and compositions of matter. 

1.75 “mRNA Construct” means any mRNA construct for the expression of a protein that is either (a) ornithine transcarbamylase or (b) a protein that is the subject of an Arcturus Program or CureVac Program, if the CureVac Option or Arcturus Option, respectively, has been exercised for such program, in each case including the sequence of such construct (which potentially comprises one (1) or more of cap, 5’ UTR, the associated open reading frame, 3’UTR and a poly A tail), the chemistry of natural and non-natural nucleic acids, and other chemical modifications associated with such construct. 

1.76“Net Sales” means the gross amount billed or invoiced by or for the benefit of a Party, its Affiliates, and its sublicensees to independent, unrelated Third Parties (other than Affiliates and sublicensees but including distributors for resales) for the bona fide sale or transfer of a Product, less the following deductions, in each case to the extent reasonable, customary, actually allowed and taken in connection with such Product and not otherwise recovered by or reimbursed: 

(a)sales, value-added and excise taxes or customs duties paid by the selling party and any other governmental charges imposed upon the sale of such Product and actually paid, as adjusted for rebates and refunds; 

(b)discounts (including cash, quantity and patient program discounts), price reductions, commissions, rebates and chargebacks actually granted, allowed or incurred in connection with the sale of the such Product;

(c)allowances or credits to customers actually given and not in excess of the selling price of such Product, on account of claims, damaged goods, rejection, outdating, product withdraw, recalls or return of such Product; and

(d)rebates, reimbursements, fees or similar payments to wholesalers and other distributors, pharmacies and other retailers, buying groups (including group purchasing organizations), health care insurance carriers, pharmacy benefit management companies, health maintenance organizations, Governmental Authorities, or other institutions or health care organizations.

If a single item falls into more than one of the categories set forth in clauses (a)-(d) above, such item may not be deducted more than once.

Sales between a Party and its Affiliates and sublicensees shall be disregarded for purposes of calculating Net Sales except if such purchaser is an end user, but the subsequent sale from such entity to an unrelated Third Party shall be included in the Net Sales definition.

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With respect to any sale of any Product in a given country for any substantive consideration other than monetary consideration on arm’s length terms (which has the effect of reducing the invoiced amount below what it would have been in the absence of such non-monetary consideration), for purposes of calculating the Net Sales, such Product shall be deemed to be sold exclusively for cash at the average Net Sales price charged to Third Parties for cash sales of such Product in such country during the applicable reporting period (or if there were only de minimis cash sales in such country, at the fair market value as determined in good faith based on pricing in comparable markets).  Notwithstanding the foregoing, Net Sales shall not include amounts (whether actually existing or deemed to exist for purposes of calculation) for Products distributed for use in clinical trials.

Net Sales shall be calculated on an accrual basis, in a manner consistent with such Party’s accounting policies for external reporting purposes, as consistently applied across all products, in accordance with U.S. GAAP or German GAAP, as applicable.  To the extent any accrued amounts used in the calculation of Net Sales are estimates, such estimates shall be trued-up in accordance with such Party’s accounting policies for external reporting purposes, as consistently applied, and Net Sales and related payments under this Agreement shall be reconciled as appropriate.

1.77“Operating Profit (or Loss)” means, for a given Product and calendar quarter, (a) Net Sales of such Product by a Party and its Affiliates (but not sublicensees) in the Territory during such period, minus (b) Joint Commercialization Costs incurred during such time period, in each case with respect to such Product, plus (c) any payments received from any sublicensee of a Party with respect to such Product, whether in the form of upfront, milestone, or royalty payments.  For clarity, Operating Profit (or Loss) shall be determined prior to application of any income taxes, and if such terms are used individually, “Operating Profit” shall mean a positive Operating Profit (or Loss), and “Operating Loss” shall mean a negative Operating Profit (or Loss).

1.78“Opt-Out” is defined in Section 4.9(a).

1.79“Opt-Out Product” is defined in Section 4.9(b).

1.80“OTC” is defined in the Preamble. 

1.81“OTC Clinical Development Plan” is defined in Section 4.4(c). 

1.82“OTC Development Candidate” means an OTC Product that the JSC has approved for advancement into IND-enabling studies.

1.83“OTC mRNA Construct” means any mRNA Construct that encodes the enzyme ornithine transcarbamylase.

1.84“OTC Preclinical Development Plan” means the plan for preclinical Development of OTC Products until IND filing for an OTC Product, as amended from time to time in accordance with the terms of this Agreement, and including a budget for all such activities. 

1.85“OTC Product” means any product containing an OTC mRNA Construct formulated with the Arcturus LMD Technology.

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1.86“Partnering” is defined in Section 7.6.

1.87“Patent Rights” means all patents and patent applications (which for the purpose of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including all divisionals, continuations, substitutions, continuations-in-part, re-examinations, reissues, additions, renewals, revalidations, extensions, registrations, and supplemental protection certificates and the like of any such patents and patent applications, and any and all foreign equivalents of the foregoing.

1.88“Person” means any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization or other entity. 

1.89 “Phase 1 Clinical Trial” means a controlled human clinical trial of a Product that would satisfy the requirements of 21 CFR 312.21(a) or corresponding foreign regulations, regardless of whether such trial is referred to as a “phase 1 clinical trial” in the applicable Development Plan.

1.90“Phase 2 Clinical Trial” means a controlled human clinical trial of a Product that would satisfy the requirements of 21 CFR 312.21(b) or corresponding foreign regulations, regardless of whether such trial is referred to as a “phase 2 clinical trial” in the applicable Development Plan. 

1.91“Phase 3 Clinical Trial” means a controlled or uncontrolled human clinical trial of a Product that would satisfy the requirements of 21 CFR 312.21(c) or corresponding foreign regulations, regardless of whether such trial is referred to as a “phase 3 clinical trial” in the applicable Development Plan.  

1.92“Phase 4 Study” means a study or data collection effort with respect to any Product that is commenced after the receipt of Regulatory Approval in the country where such trial is conducted.  

1.93“Product” means any: (a) OTC Product; (b) Co-Developed Arcturus Product; or (c) Co-Developed CureVac Product.

1.94“Product Infringement” is defined in Section 9.5(a).

1.95“Program Addition Period” is defined in Section 4.2.

1.96“Receiving Party” is defined in Section 10.1.

1.97“Regulatory Approval” means all approvals necessary for the commercial sale of a Product in the Field in a given country or regulatory jurisdiction, including any pricing and reimbursement approvals (but solely to the extent necessary for commercial sale of the Product).

1.98“Regulatory Authority” means any applicable Governmental Authority responsible for granting Regulatory Approvals for the Products, including the FDA, the EMA and any corresponding national or regional regulatory authorities.

1.99“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a pharmaceutical product other than patents, including, without limitation, orphan drug exclusivity, new chemical entity exclusivity, biosimilar exclusivity, data exclusivity or pediatric exclusivity. 

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1.100“Regulatory Materials” means any regulatory application, submission, notification, communication, correspondence, registration and other filings made to, received from or otherwise conducted with a Regulatory Authority in order to Develop, Manufacture, or Commercialize a Product in the Field in a particular country or jurisdiction.  “Regulatory Materials” includes any IND, MAA and Regulatory Approval. 

1.101“Required Phase 4 Study” means a Phase 4 Study that is conducted pursuant to a request or requirement of a Regulatory Authority.

1.102“Royalty Rate” is defined in Section 4.9(b)(iv).

1.103“Sales and Marketing Costs” means the costs that are directly and reasonably allocable to the sales and marketing of a Product in the Territory and that are compliant with applicable Laws and applicable guidelines concerning the advertising, sales and marketing of prescription drug products (e.g., PhRMA Code), including: (a) activities directed to the advertising and marketing of a Product; (b) professional education in the Territory, including launch meetings; (c) costs of advertising, public relations and medical education agencies with respect to a Product; (d) speaker programs with respect to a Product, including the training of such speakers; (e) developing and providing training packages, promotional literature, samples, promotional materials and other selling materials with respect to a Product; (f) developing and performing market research with respect to a Product and developing branding, communications and life cycle management plans; (g) conducting symposia and opinion leader development activities with respect to a Product; (h) developing reimbursement programs with respect to a Product; and (i) sales force costs. 

1.104“Second Program Addition Period” is defined in Section 4.2.

1.105“Term” is defined in Section 11.1.

1.106“Territory” means all countries and territories of the world.

1.107“Third Party” means any Person other than a Party or an Affiliate of a Party. 

1.108“Trademark Costs” mean those costs incurred for outside counsel and other Third Parties, and filing and maintenance expenses, in each case incurred in connection with the establishment and maintenance of rights under trademarks applicable to a Product, including costs of trademark filing and registration fees, actions to enforce or maintain a trademark and other trademark proceedings.

1.109 “United States” or “U.S.” means the United States of America, including its territories and possessions. 

1.110 “Valid Claim” means a claim of 

(a)an issued and unexpired patent (as may be extended through supplementary protection certificate or patent term extension) or 

 

 

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(b)a pending patent application, provided, however, that once the priority date or earliest filing date to which the pending patent application refers is more than [*...***...] years old, such claim shall not constitute a Valid Claim for purposes of this Agreement anymore, unless and until a patent issues with such claim  

included in the Arcturus Patents or CureVac Patents, which claim has not been revoked, held invalid or unenforceable by a patent office, court or other governmental agency of competent jurisdiction in a final and non-appealable decision (or decision from which no appeal was taken within the allowable time period) and has not been disclaimed, denied, abandoned or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. 

1.111Interpretation.  In this Agreement, unless otherwise specified: 

(a)The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  

(b)words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders; 

(c)words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear; and

(d)the Exhibits and other attachments form part of the operative provision of this Agreement and references to “this Agreement” shall include references to the Exhibits and attachments.

Article 2

GOVERNANCE

2.1Joint Steering Committee.  The Parties hereby establish a joint steering committee (the “Joint Steering Committee” or the “JSC”) consisting of an equal number, initially [...***...] senior executives of each Party.  The JSC shall manage the overall collaboration of the Parties under this Agreement, and shall in particular:

(a)coordinate the activities of the Parties under this Agreement, including facilitating communications between the Parties with respect to the Development, Manufacture and Commercialization of mRNA Constructs and Products; 

(b)provide a forum for discussion of the Development, Manufacture and Commercialization of mRNA Constructs and Products; 

(c)discuss potential programs for inclusion as an Arcturus Program or CureVac Programs, in accordance with the procedure in Section 4.2;

(d)coordinate the activities of the Parties under each Development Plan and oversee the implementation of each Development Plan; 

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(e)review the Parties’ nomination of OTC Product as OTC Development Candidate and determine whether to approve such nomination;

(f)determine the final OTC mRNA Construct sequence as OTC Development Candidate;

(g)review and approve each Development Plan, and prepare and approve annual or interim amendments to the Development Plans;

(h)review and approve the protocol and statistical analysis plan established by the sponsor for each human clinical trial conducted under a Clinical Development Plan;

(i)review the progress of the clinical trials on a regular basis including interim data;

(j)monitor and coordinate all regulatory actions, communications and submissions for Products under the Development Plans; 

(k)coordinate the activities of the Parties under the Commercialization Plans and oversee the implementation of the Commercialization Plans; 

(l)establish and implement a publication plan for Products;

(m)establish joint subcommittees, as appropriate, to carry out its functions, and direct and oversee the operation of such joint subcommittees, including resolving any disputed matter of such joint subcommittees; and

(n)perform such other duties as are expressly assigned to the JSC in this Agreement, and perform such other functions as appropriate to further the purposes of this Agreement as may be allocated to it by the Parties’ written agreement. 

2.2Limitation of Committee Authority.  Each Committee shall only have the powers expressly assigned to in this Article 2 and elsewhere in this Agreement and shall not have the authority to: (a) modify or amend the terms and conditions of this Agreement; (b) waive either Party’s compliance with the terms and conditions of this Agreement; or (c) determine any such issue in a manner that would conflict with the express terms and conditions of this Agreement. 

2.3Committee Membership and Meetings.

(a)Committee Members.  The initial members of each Party on the JSC as of the Effective Date are designated in writing within [*...***...] days of the Effective Date and upon designation included in Exhibit 2.3.  Each Party may replace its representatives on any Committee by written notice to the other Party.  Each Committee representative shall have appropriate knowledge and expertise and sufficient seniority (including budgetary authority, as applicable) within the applicable Party to make recommendations and decisions arising within the scope of the applicable Committee’s responsibilities.  Each Party shall appoint one (1) of its representatives on each Committee to act as a co-chairperson of such Committee.  The co-chairpersons shall jointly prepare and circulate agendas [...***...] Business Days prior to such meeting and reasonably detailed 

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minutes for each Committee meeting within [*...***...] days after such meeting, but shall otherwise not have any additional function or authority as compared to the other members of the applicable Committee.   

(b)Meetings.  Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every [...***...] months for each Committee.  Meetings of any Committee will be held teleconference, videoconference or in person and, unless the Parties otherwise agree, at least one JSC meeting in each calendar year will be in person held on an alternative basis in Tubingen, Germany and in San Diego, CA.  Each Party shall be responsible for all of its own expenses of participating in any Committee.  No action taken at any meeting of a Committee shall be effective unless a representative of each Party is participating.  

(c)Non-Member Attendance.  With the consent of the other Party (which will not be unreasonably withheld, delayed or conditioned and which will not be required for the attendance of the Alliance Manager), each Party may from time to time invite a reasonable number of participants, in addition to its representatives, to attend the Committee meetings in a non‐voting capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide prior written notice to the other Party and shall ensure that such Third Party is bound by confidentiality and non-use obligations consistent with the terms of this Agreement.  

2.4Continuity of Representation.  Notwithstanding the Parties’ respective right to replace its Alliance Manager and members of Committees by written notification to the other Party, each Party shall strive to maintain continuity in the representation of such Alliance Manager and Committee members.

2.5Decision-Making.  All decisions of each Committee shall be made by unanimous vote, with each Party’s representatives collectively having one (1) vote.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before a Committee, the representatives of the Parties cannot reach an agreement as to such matter within [...***...] Business Days after such matter was brought to such Committee for resolution or after such matter has been referred to such Committee, such disagreement shall, upon the written request of either Party, be referred to the JSC (in the case of disagreement of a joint subcommittee) or to the Executive Officers (in the case of disagreement of the JSC) for resolution.  The Executive Officers shall meet in person within [...***...] days after such referral to attempt in good faith to resolve such disagreement.  If the Executive Officers cannot resolve such matter within [...***...] days after such matter has been referred to them, then: 

(a)Arcturus shall have the right to decide on matters pertaining to 

(i)the Manufacture of Products using mRNA Constructs, but not the  Manufacture of mRNA Constructs, supplied by CureVac (including the formulation but excluding fill and finish); 

(ii)subject to Sections 2.5(b)(i) and 2.5(d), the clinical Development of OTC Products and Co-Developed Arcturus Products, the regulatory strategy for OTC Products and Co-Developed Arcturus Products, the fill and finish of OTC Products 

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and Co-Developed Arcturus Products and the Commercialization of OTC Products and Co-Developed Arcturus Products, 

(b)CureVac shall have the right to decide on matters pertaining to 

(i)the Manufacture of mRNA Constructs for the Products; 

(ii)subject to Sections 2.5(a)(i) and 2.5(d), the clinical Development of Co-Developed CureVac Products, the regulatory strategy for Co-Developed CureVac Products, the fill and finish of Co-Developed CureVac Products and the Commercialization of Co-Developed CureVac Products, 

(c)with respect to all other matters, neither Party shall have the right to make the final decision, and the status quo will remain unless the Parties agree otherwise, 

(d)provided, however, that neither Party shall have 

(i)the right to require the other Party to conduct any activities or make any investments without such other Party’s written consent, in particular, to determine certain amounts of supply of mRNA Constructs other than in accordance with the Development Plan or Commercialization Plan, as applicable, or Products or to establish a second source, other than as may be expressly agreed in a supply agreement, 

(ii)a casting vote regarding the approval of a Development Plan or Commercialization Plan or any amendment thereto leading to a cost-increase of more than [*...***...]% from the agreed budgeted amount.

2.6 Discontinuation of Participation on a Committee.  The activities to be performed by each Committee shall solely relate to governance under this Agreement, and are not intended to be or involve the delivery of services.  Each Committee shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the committee; or (b) a Party providing written notice to the other Party of its intention to disband and no longer participate in such Committee.  Once the Parties mutually agree or a Party has provided written notice to disband such Committee to the other Party, such Committee shall have no further obligations under this Agreement and, thereafter, the Alliance Managers shall be the contact persons for the exchange of information under this Agreement and decisions of such Committee shall be decisions as between the Parties, subject to the other terms and conditions of this Agreement.  

2.7Alliance Managers.  Each Party hereby appoints the person listed on Exhibit 2.3 to act as its alliance manager under this Agreement as of the Effective Date (the “Alliance Manager”).  Each Party’s Alliance Manager shall: (a) serve as the primary contact point between the Parties for the purpose of providing the other Party with information on the progress of such Party’s activities under this Agreement; (b) be primarily responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties; (c) attempt to facilitate the prompt resolution of any disputes; (d) attend all JSC meetings, and have the right to attend all other Committee and subcommittee meetings, all as non-voting members.  An Alliance Manager may also bring any matter to the attention of any Committee if such Alliance Manager reasonably believes that such matter warrants such attention.  Each Party may replace its Alliance Manager at any time upon written notice to the other Party.

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2.8Commercialization and Collaboration Decisions.  The Parties shall mutually agree on any decisions for Commercialization by a licensee or strategic partner; provided that following the completion of Phase 1 Clinical Trials for each Product, the Parties shall determine which of the Parties shall be the lead in potential Commercialization efforts (subject to Section 7.5 and 7.6), including identifying and reviewing with the other Party on not less than a [*...***...] basis, the Commercialization plans and efforts and the discussions with potential future licensees or strategic partners with respect to such Product. This Section 2.8 shall not apply with respect to any Opt-Out Product. 

Article 3

LICENSES

3.1License to CureVac.  Subject to the terms and conditions of this Agreement, Arcturus hereby grants to CureVac the following licenses under the Arcturus Technology (sublicensable solely as provided in Section 3.3): 

(a)a non-exclusive, royalty-free license to Develop mRNA Constructs and Products in the Field in accordance with the Development Plans, and 

(b)a sole (i. e., Arcturus will not grant respective licenses to any Third Party, however, Arcturus reserves for itself and its Affiliates the right to use the licensed rights), profit sharing (in case of Commercialization in accordance with Article 7) or royalty-bearing (in case of an Opt-Out or Forced Opt-Out in accordance with Sections 4.9 or 14.3, respectively) license to Commercialize Co-Developed CureVac Products in the Field in the Territory; and 

(c)a non-exclusive, royalty-free license to Manufacture and have Manufactured the mRNA Constructs that are included in Products worldwide, provided that CureVac shall have the right to use such mRNA Constructs solely for supply to Arcturus to Manufacture Products for use by CureVac in connection with the exercising of its rights under Sections 3.1(a) and/or 3.1(b) or for use by Arcturus in connection with the exercising of its rights under Sections 3.2(a) and/or 3.2(b).

For the avoidance of doubt, the licenses granted by Arcturus to CureVac under this Agreement do not include any rights for CureVac to develop, make, have made, sell, offer for sale or otherwise commercialize any proprietary product of Arcturus that is not a Product.

3.2License to Arcturus.  Subject to the terms and conditions of this Agreement, CureVac hereby grants to Arcturus the following licenses under the CureVac Technology (sublicensable solely as provided in Section 3.3): 

(a)a non-exclusive, royalty-free license to Develop mRNA Constructs and Products in the Field in accordance with the Development Plans, 

(b)a sole (i. e., CureVac will not grant respective licenses to any Third Party, however, CureVac reserves for itself and its Affiliates the right to use the licensed rights), profit sharing (in case of Commercialization in accordance with Section 7) or royalty-bearing (in case of an Opt-Out or Forced Opt-Out in accordance with Sections 4.9 or 14.3, 

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respectively) license to Commercialize OTC Products and Co-Developed Arcturus Products in the Field in the Territory; and 

(c)a non-exclusive, royalty-free license to Manufacture and have Manufactured Products worldwide from mRNA Constructs supplied by CureVac (i.e. no license granted for the Manufacture of mRNA Constructs), provided that Arcturus shall have the right to use such Products solely in connection with the exercising of its rights under Sections 3.2(a) and/or 3.2(b) or for supply to CureVac for use by CureVac in connection with the exercising of its rights under Sections 3.1(a) and/or 3.1(b). 

For the avoidance of doubt, the licenses granted by CureVac to Arcturus under this Agreement do not include any rights for Arcturus to develop, make, have made, sell, offer for sale or otherwise commercialize any proprietary product of CureVac that is not a Product.  

3.3Sublicense Rights.  Subject to the terms and conditions of this Agreement: 

(a)Subject to Section 3.4(c) below, each Party may exercise its rights and perform its obligations under this Agreement by itself or through the engagement of any of its Affiliates without the other Party’s prior written consent; provided, however, that 

(i)such Party shall provide written notice to the other Party informing the other Party of such engagement within [*...***...] days after such engagement, and

(ii)the Affiliate, in performing the obligations, shall use the standard of care applicable to the Party making the delegation.

(b)Each Party may sublicense (through multiple tiers) the rights granted to it under Section 3.1 (in the case of CureVac) or Section 3.2 (in the case of Arcturus) to one (1) or more Third Parties with the other Party’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Each Party will provide to the other Party a copy of any such sublicense agreement within [...***...] days of execution thereof, which sublicense agreement may be redacted as necessary to protect commercially sensitive information and shall be treated as Confidential Information of the Party providing the sublicense agreement. 

(c)Each Party shall remain directly responsible for all of its obligations under this Agreement that have been delegated, subcontracted or sublicensed to any of its Affiliates, sublicensees or subcontractors and shall ensure that such Affiliates, sublicensees and subcontractors comply with the terms and conditions of this Agreement.  Without limiting the foregoing, in the event that a Party engages a subcontractor to perform any activities assigned to it under this Agreement, such Party shall ensure that such subcontractor is bound by written obligations of confidentiality and non-use consistent with this Agreement and has agreed to assign to the Party engaging such subcontractor (and/or grant a fully-paid, exclusive, royalty-free, worldwide license to such Party, with the right to sublicense through multiple tiers, under) all Inventions made by such subcontractor in the course of performing such subcontracted work that relate to any Products or their use, manufacture or sale.  

3.4No Implied Licenses; Negative Covenant.  Except as set forth herein, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, under or to any trademarks, Patent Rights, Know-How, or other intellectual 

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property owned or Controlled by the other Party.  For clarity, the license granted to each Party under any particular Patent Rights or Know-How Controlled by the other Party shall confer exclusivity to the Party obtaining such license only to the extent the Party granting such license Controls the exclusive rights to such Patent Rights or Know-How.  Neither Party shall, nor shall permit any of its Affiliates or sublicensees to, practice any Patent Rights or Know-How licensed to it by the other Party outside the scope of the license granted to it under this Agreement.

3.5Third Party Licenses.  The Parties acknowledge that during the Term, it may be beneficial to obtain a license under intellectual property controlled by a Third Party.  The Parties agree that (a) 

(a)with respect to any such Third Party intellectual property that is necessary (i.e., in the absence of a license thereto a claim of infringement or misappropriation is likely) to make, have made, use, sell, offer for sale, import and export mRNA Constructs or Products in the Territory, the Parties shall discuss whether to obtain such license, with the Party having the final say and responsibility for negotiating such license that has the lead regarding Commercialization of the respective Product, after good faith consideration of the other Party’s input, and 

(b)with respect to Third Party intellectual property that is useful (but not necessary, e.g., it covers a technology or feature desired to be incorporated into the Product or used in its manufacture) to make, have made, use, sell, offer for sale, import and export mRNA Constructs or Products in the Territory, the Parties  shall determine  whether to obtain a license to such Third Party intellectual property, provided, however, that the decision to obtain a license must be made unanimously and that, notwithstanding Section 2.5, neither Party has the final say in this decision, and if a determination is made to obtain such license, the Party that has the lead regarding Commercialization of the respective Product shall have responsibility for negotiating such license, after good faith consideration of the other Party’s input.  

The Party entering into any such Third Party license after the Effective Date pursuant to this Section 3.5 shall be responsible for making all payments with respect to such licenses (“Approved Third Party Payments”), subject to inclusion of any and all such payments with respect to a Product in Joint Commercialization Costs.

3.6Exclusivity.

(a)Exclusivity Obligation.  During the Term with respect to each Product, Arcturus shall not, and shall ensure that its Affiliates do not, and CureVac shall not, and shall ensure that its Affiliates do not, directly or indirectly, alone or with or through any Third Party, clinically develop or commercialize any Competing Product to such Product in the Territory. 

(b)Acquired Rights of Arcturus.  In the event that Arcturus or its Affiliate, either through its own efforts or by acquisition of such rights (whether through merger, acquisition or similar transaction), obtains the rights to a Competing Product that would cause Arcturus to breach Section 3.6(a), then Arcturus shall:

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(i)if such Product is a Co-Developed CureVac Product, upon written notice to CureVac within [*...***...] days after such rights are first obtained, either

(1)terminate this Agreement with respect to such Co-Developed CureVac Products pursuant to Section 11.2(a), in which case such notice will serve as notice of termination under Section 11.2(a) with respect to such Products; or 

(2)Divest such Competing Product, in which case Arcturus or its Affiliate shall, or shall cause the applicable entity to, complete the Divestiture of such Competing Product within [...***...] months from the date Arcturus or its Affiliate obtained any rights in such Competing Product, in which case the conduct of activities with respect to such Competing Product by Arcturus or its Affiliate during such [...***...] month period shall not be deemed a breach of Arcturus’s exclusivity obligations under Section 3.6, provided that such activities with respect to such Competing Product during such [...***...] month period are conducted independently of the activities conducted under this Agreement and no Arcturus Technology or CureVac Technology is used in the conduct of such activities; or 

(ii)if such Product is an OTC Product or Co-Developed Arcturus Product, Divest such Competing Product in accordance with Section 3.6(b)(i)(2).

(c)Acquired Rights of CureVac.  In the event that CureVac or its Affiliate, either through its own efforts or by acquisition of such rights (whether through merger, acquisition or similar transaction), obtains the rights to a Competing Product that would cause CureVac to breach Section 3.6, then CureVac shall:

(i)if such Product is an OTC Product or Co-Developed Arcturus Product, upon written notice to Arcturus within [...***...] days after such rights are first obtained, either 

(1)terminate this Agreement with respect to such Products pursuant to Section 11.2(a), in which case such notice will serve as notice of termination under Section 11.2(a) with respect to such Products; or 

(2)Divest such Competing Product, in which case CureVac or its Affiliate shall, or shall cause the applicable entity to, complete the Divestiture of such Competing Product within [...***...] months from the date CureVac or its Affiliate obtained any rights in such Competing Product, in which case the conduct of activities with respect to such Competing Product by CureVac or its Affiliate during such [...***...] month period shall not be deemed a breach of CureVac’s exclusivity obligations under Section 3.6(a), provided that such activities with respect to such Competing Product during such [...***...] month period are conducted independently of the activities conducted under this Agreement and no Arcturus Technology or CureVac Technology is used in the conduct of such activities; or 

(ii)if such Product is a Co-Developed CureVac Product, Divest such Competing Product in accordance with Section 3.6(c)(i)(2).

3.7Diligent Efforts. During the Term with respect to each Product and potential program subject to co-development hereunder, each Party shall act in good faith and use Diligent Efforts to undertake and complete its obligations with respect to such program and Product hereunder.

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Article 4

DEVELOPMENT

4.1General.  Subject to the terms and conditions of this Agreement, the Parties will collaborate on the Development of Products in the Field for up to four (4) different co-development programs, under the direction of the JSC and pursuant to Development Plans, as described in more detail in this Article 4. As of the Effective Date, the Parties have agreed to Develop an OTC Product.  In addition, Arcturus will have an option to co-Develop with CureVac up to two (2) different CureVac Programs, and CureVac will have an option to co-Develop with Arcturus one (1) Arcturus Program.  For clarification, the Parties contemplate that Targets for programs and potential Products in the Field will be selected, in case of CureVac, from the Reserved Target List under the Development and Option Agreement; provided that the selection of any program under this Agreement shall not constitute the selection of a Target as defined and in accordance with Section 4.2 of the Development and Option Agreement (i.e., shall be subject to substitution rather than reduction of Targets then currently available to CureVac upon such selection hereunder). Accordingly, once one of the Reserved Targets as defined in the Development and Option Agreement is selected for co-Development under this Agreement, such Reserved Target shall be removed from the Reserved Target List following the effectiveness of a license hereunder, with the effect that CureVac shall be entitled to nominate a new Target in accordance with Section 4.2 of the Development and Option Agreement. 

4.2Additional Programs for Potential Co-Development. 

(a)During the first [*...***...] month period after the Effective Date (the “First Program Addition Period”), each Party will propose to the other Party in writing an available drug development program to develop mRNA therapeutics, in case of CureVac from the Reserved Target List under the Development and Option Agreement, which is reasonably acceptable to the other Party. In relation to the proposed program, each Party will reasonably inform the other Party about the respective development activities, answer questions and provide reasonable access to the results and data of such program, such results and data to include (i) the requirements for a data package consisting of up to [...***...] pivotal animal studies and (ii) other requirements as set forth on Exhibit 4.2. The Parties will (i) determine by written agreement whether to include such programs under this Agreement, and (ii) at such time will agree on the applicable exclusivity for such program according to Section 3.6 and the lead party pursuant to Section 2.8, subject to Section 4.3, if included under this Agreement. 

(b)During [...***...] months after the Effective Date (the “Second Program Addition Period”, together with the “First Program Addition Period” the “Program Addition Period”), CureVac will propose to Arcturus in writing a second drug development program to develop mRNA therapeutics from the Reserved Target List under the Development and Option Agreement, which is reasonably acceptable to Arcturus. The procedure under Section 4.2(a) shall apply accordingly.

4.3Overall Allocation of Responsibilities.

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(a)OTC Product.  The Parties have agreed to conduct preclinical development of OTC Product pursuant to the OTC Preclinical Development Plan, which allocates responsibility for preclinical development activities for OTC Product between the Parties.  Thereafter, Arcturus will be responsible for IND filing for an OTC Product and will be the sponsor of clinical trials of such OTC Product.  

(b)Co-Developed Arcturus Product.  Arcturus will be responsible for all preclinical development of Co-Developed Arcturus Product.  Following CureVac’s exercise of its CureVac Option, Arcturus will be responsible for IND filing for a Co-Developed Arcturus Product and will be the sponsor of clinical trials of such Co-Developed Arcturus Product. 

(c)Co-Developed CureVac Products.  CureVac will be responsible for all preclinical development of Co-Developed CureVac Products, except that Arcturus will be responsible for the activities related to formulating CureVac mRNA Constructs with Arcturus LMD Technology.  Following Arcturus’s exercise of its Arcturus Option with respect to a CureVac Program, CureVac will be responsible for IND filing for a Co-Developed CureVac Product from such program and will be the sponsor of clinical trials of such Co-Developed CureVac Product.

4.4OTC Products.  

(a)OTC Preclinical Development Plan.  As of the Effective Date, the Parties have agreed on an initial OTC Preclinical Development Plan, attached to this Agreement as Exhibit 4.4.  Either Party may propose amendments to the OTC Preclinical Development Plan from time to time, and such amendments shall become effective upon the approval of the JSC.  The OTC Preclinical Development Plan shall set forth: (a) the activities to be conducted by each Party for the preclinical Development of OTC Products, including IND enabling studies; (b) the estimated timelines for such activities; (c) the estimated internal and external costs to be incurred by or on account of each Party in connection with such activities; and (d) the criteria for selecting OTC Development Candidates.

(b)Designation of OTC Development Candidates.  

(i)Selection of Technology.  The Parties agree that the OTC Products will include OTC mRNA Constructs based on Arcturus mRNA Technology or CureVac mRNA Technology.  In addition, during the [*...***...] period following the Effective Date, the JSC shall select the sequence for the OTC mRNA Construct. 

(ii)OTC Development Candidate Selection.  From time to time during the conduct of the OTC Preclinical Development Plan (such timeline to be further specified in the OTC Preclinical Development Plan), either Party may nominate a particular OTC Product to the JSC for consideration as an OTC Development Candidate. Such nomination shall be made prior to the Initiation of IND-enabling studies for such OTC Product, unless the Parties otherwise agree.  Promptly after such nomination, each Party shall present to the JSC the data and results it has obtained with respect to such OTC Product, and the JSC shall determine, within [...***...] Business Days after receiving such data and results, whether such OTC Product will be approved as an OTC Development Candidate under this Agreement.  If the JSC determines not to approve such OTC Product as an OTC Development Candidate, then the JSC shall inform the Parties in writing of such decision, 

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and may request that further activities be conducted with respect to such OTC Product prior to reconsideration for nomination as an OTC Development Candidate, subject to Section 2.5.  If the JSC approves a particular OTC Product as a Development Candidate, then the Parties shall proceed to conduct IND-enabling studies in accordance with the OTC Preclinical Development Plan. 

(c)Clinical Development.  At the time a particular OTC Product is designated as an OTC Development Candidate by the JSC, the JSC shall prepare and submit to the Parties for approval a comprehensive clinical Development plan and budget for such OTC Development Candidate (the “OTC Clinical Development Plan”).  The OTC Clinical Development Plan shall include a development and regulatory strategy for the OTC Product, including the Parties’ respective roles in the Development of such OTC Product and the countries in which Development will occur, and in particular will set forth: (i) the timeline and details of all additional preclinical and clinical Development activities to be conducted by the Parties that are designed to generate data sufficient to file an MAA for the applicable OTC Product in the U.S., EU and Japan; (ii) the protocol synopsis for each clinical trial included in such OTC Clinical Development Plan; (iii) a Manufacturing plan for the Manufacture of the OTC Product in support of the OTC Clinical Development Plan; and (iv) the Clinical Development Costs expected to be incurred by or on behalf of the Parties to carry out such clinical Development.  Arcturus shall have the primary responsibility to conduct the Development activities under the OTC Clinical Development Plan.

4.5Arcturus Products.  

(a)Preclinical Development.  Arcturus will be solely responsible, in its sole discretion, for all preclinical Development of Arcturus Products.

(b)Option to CureVac to Co-Develop Arcturus Products.  Arcturus hereby grants to CureVac an option during the Program Addition Period to one (1) Arcturus Program to co-Develop and share Operating Profit (or Loss) for Arcturus Products in accordance with the terms of this Agreement (the “CureVac Option”).  

(i)Arcturus shall propose a Program in accordance with Section 4.2.

(ii)Upon request from CureVac, such request to be made within [*...***...] days following such proposal, Arcturus shall promptly provide to CureVac a data package containing (i) all data and results from its preclinical development of Arcturus Products and (ii) an itemized statement setting forth all costs and expenses incurred by Arcturus to conduct the Arcturus Program to date, including Third Party expense and FTE Costs (at the FTE Costs) (the “Arcturus Preclinical Program Costs”).  During an [...***...]-day period following delivery of such data package, which period may be extended by mutual agreement not to be unreasonably withheld by either Party, Arcturus shall promptly respond to CureVac’s reasonable requests for more information and other inquiries with respect to the Arcturus Program.  

(iii)CureVac may exercise the CureVac Option, within [...***...] days following the end of the [...***...]-day period (extended if applicable) specified in subsection (ii), by (1) written notice to Arcturus together with (2) payment of fifty percent (50%) of the Arcturus Preclinical Program Costs, and thereafter the Parties shall share all 

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further co-Development costs equally. For clarity, to the extent that an option is not exercised following delivery of the information set forth in this Section 4.5(b), then the option to CureVac shall terminate. 

(c)Clinical Development.  Promptly after CureVac’s exercise of the CureVac Option, the JSC shall prepare and submit to the Parties for approval a comprehensive clinical Development plan and budget for the applicable Co-Developed Arcturus Product (the “Arcturus Clinical Development Plan”). The Arcturus Clinical Development Plan shall include a development and regulatory strategy for the Co-Developed Arcturus Product, including the Parties’ respective roles in the Development of such Product and the countries in which Development will occur, and in particular will set forth the timeline and details of: (i) all additional preclinical and clinical Development activities to be conducted by the Parties that are designed to generate data sufficient to file an MAA for the applicable Co-Developed Arcturus Product in the U.S., EU and Japan; (ii) the protocol synopsis for each clinical trial included in such Arcturus Clinical Development Plan; (iii) a Manufacturing plan for the Manufacture of the Co-Developed Arcturus Product for such clinical trials; and (iv) the Clinical Development Costs expected to be incurred by or on behalf of the Parties to carry out such clinical Development.  Arcturus shall have the primary responsibility to conduct the Development activities under the Arcturus Clinical Development Plan.  

4.6CureVac Products

(a)Preclinical Development.  CureVac will be solely responsible, in its sole discretion, for all preclinical Development of CureVac Products. 

(b)Option to Arcturus to Co-Develop CureVac Products.  CureVac hereby grants to Arcturus an option during the Program Addition Period for two (2) CureVac Programs to co-Develop and share Operating Profit (or Loss) for CureVac Products in accordance with the terms of this Agreement (the “Arcturus Option”).  

(i)CureVac shall propose a Program in accordance with Section 4.2.

(ii)Upon request from Arcturus, such request to be made within [*...***...] days following such proposal, CureVac shall promptly provide to Arcturus a data package containing (i) all data and results from its preclinical development of CureVac Products and (ii) an itemized statement setting forth all costs and expenses incurred by CureVac to conduct the applicable CureVac Program to date, including Third Party expense and FTE Costs incurred by CureVac and Arcturus under the Development and Option and, if applicable, the License Agreement (the “CureVac Preclinical Program Costs” for the applicable CureVac Program).  During an [...***...]-day period following delivery of such data package, which period may be extended by mutual agreement not to be unreasonably withheld by either Party, CureVac shall promptly respond to Arcturus’s reasonable requests for more information and other inquiries with respect to the applicable CureVac Program. 

(iii)The Option Exercise Fee and the Milestone Payments already paid by CureVac under the Development and Option Agreement and the License Agreement shall not be included in the CureVac Preclinical Program Costs. However, CureVac shall 

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have the right to set off such payments against any payments due to Arcturus under this Agreement, the Development and Option Agreement or any License Agreement. 

(iv)Arcturus may exercise the Arcturus Option for a CureVac Program, within [*...***...] days following the end of the [...***...]-day period (extended if applicable) specified in subsection (ii), by (1) written notice to CureVac together with (2) payment of fifty percent (50%) of the CureVac Preclinical Program Costs for such CureVac Program, and thereafter the Parties shall share all further co-Development costs equally. For clarity, to the extent that an option is not exercised following delivery of the information set forth in this Section 4.6(b), then such one (1) Arcturus Option shall terminate.

(c)Clinical Development.  Promptly after Arcturus’s exercise of an Arcturus Option, the JSC shall prepare and submit to the Parties for approval a comprehensive clinical Development plan and budget for the applicable Co-Developed CureVac Product (the “CureVac Clinical Development Plan” for such Product).  Each CureVac Clinical Development Plan shall include a development and regulatory strategy for the applicable Co-Developed CureVac Product, including the Parties’ respective roles in the Development of such Product and the countries in which Development will occur, and in particular will set forth the timeline and details of: (i) all additional preclinical and clinical Development activities to be conducted by the Parties that are designed to generate data sufficient to file an MAA for the applicable Co-Developed CureVac Product in the U.S., EU and Japan; (ii) the protocol synopsis for each clinical trial included in such CureVac Clinical Development Plan; (iii) a Manufacturing plan for the Manufacture of such Co-Developed CureVac Product for such clinical trials; and (iv) the Clinical Development Costs expected to be incurred by or on behalf of the Parties to carry out such clinical Development.  CureVac shall have the primary responsibility to conduct the Development activities under each CureVac Clinical Development Plan.  

4.7Development Plans; Amendment.  

(a)The OTC Preclinical Development Plan, OTC Clinical Development Plan, Arcturus Clinical Development Plan and CureVac Clinical Development Plans shall each be referred to as a “Development Plan” for the applicable Product, and each Development Plan for clinical Development will be referred to as a “Clinical Development Plan”.  

(b)From time to time during the Term, the JSC shall prepare and approve amendments, as appropriate, to the then-current Development Plans.  Once approved by the JSC, a revised Development Plan shall replace the corresponding prior Development Plan.  If the terms of any Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

4.8Development Costs.

(a)Preclinical Development.  The Parties shall share equally all internal costs (at the FTE Costs) and Third Party costs incurred to conduct (i) preclinical Development under the OTC Preclinical Development Plan and (ii) preclinical Development of Co-Developed Arcturus Products and Co-Developed CureVac Products, provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties; provided, further, that the foregoing does 

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not include any Manufacturing Costs, which are addressed in Section 6.3 and which shall be balanced in accordance with Section 4.8(b).  In addition, Arcturus will be solely responsible for all costs incurred for regulatory activities for the Co-Developed Arcturus Products prior to the Initiation of clinical trials, and CureVac will be solely responsible for all costs incurred for regulatory activities for the Co-Developed CureVac Products prior to the Initiation of clinical trials.

(b)True-Up Prior to Clinical Development.  The Parties agree that as soon as practicable but in any event prior to Initiating a clinical trial for each Product, each Party should have invested approximately the same amount in internal costs (including costs related to the Program incurred under the Development and Option Agreement and, if applicable, the respective License Agreement) and Third Party costs to conduct its activities with respect to such OTC Product, Co-Developed Arcturus Product and Co-Developed CureVac Product, including Manufacturing Costs.  Within [*...***...] days after the JSC approves the applicable Clinical Development Plan, the Parties shall determine a mechanism for balancing such investments, and each Party shall comply with the determined mechanism and the costs should be shared and balanced equally prior to the Initiation of such clinical trial. 

(c)Clinical Development.  

(i)The Parties shall share equally all Clinical Development Costs, subject to the remainder of this Section 4.8(c) , provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties; provided, further, that for any calendar year, neither Party will be permitted to recover Clinical Development Costs in excess of the amount allocated to such Party’s Development activities for such year under the budget in the applicable Clinical Development Plan without the advance or retroactive, unanimous approval of the JSC.  

(ii)At each of the development stages for each Product, the Parties will update the Clinical Development Plan for such Product to include a detailed budget for the next phase of clinical Development and submit such updated plan and budget to the JSC for approval. 

(d)Payments of Costs.  The Parties shall reconcile and pay costs described in this Section 4.8 in accordance with Section 8.2.

4.9Opt-Out

(a)Within [...***...] days after approval of the applicable budget in accordance with Section 4.8(c)(ii), Arcturus shall have the right to opt out of future sharing of Clinical Development Costs with respect to Co-Developed CureVac Products, and CureVac shall have the right to opt out of future sharing of Clinical Development Costs with respect to OTC Products and Co-Developed Arcturus Products, in each case upon written notice to the other Party (an “Opt-Out”). 

(b)Consequences of an Opt-Out. 

(i)The Party that Opts-Out for a Product (the “Opt-Out Product”) will not be obligated to pay any Clinical Development Costs for such Product incurred after delivery of such notice.  

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(ii)From and after such Opt-Out, such Party shall no longer have license rights pursuant to Article 3, but shall remain subject to the limitations and obligations set forth in Section 3.6.  

(iii)Section 11.3(a)(iv) shall apply accordingly, provided that the Party that Opts-Out is considered the Terminating Party.

(iv)From and after such Opt-Out, such Party shall no longer be eligible to receive its share of Operating Profit or obligated to pay its share of Operating Loss for the applicable Product, and instead such Party shall receive royalties on Net Sales in the Territory of the Product for which it has opted out (the “Royalty Rate” for the applicable Product):

(A)The Royalty Rate for the OTC product shall be as follows, provided that these rates shall be reviewed and if appropriate, adjusted in good faith by the Parties upon the earlier of (1) [*...***...] days following the Opt-Out notice and (2) the Initiation of a Phase 3 Clinical Trial

	
Time of Opt-Out or Forced Opt-Out
	
Applicable Royalty Rate

	
[...***...]
	
[...***...]%

	
[...***...]
	
[...***...]%

	
[...***...]
	
[...***...]%

	
[...***...]
	
[...***...]%

	
[...***...]
	
[...***...]%

 

(B)The Royalty Rate for other Products shall be agreed to in good faith by the Parties upon the earlier of (1) [...***...] days following the Opt-Out notice and (2) [...***...].

4.10Diligence.  Each Party shall use Diligent Efforts to conduct the Development activities (including related regulatory activities) assigned to it under the Development Plans, and shall conduct such activities in good scientific manner and in compliance with applicable Laws.  Arcturus shall use Diligent Efforts to Develop and seek Regulatory Approval of an OTC Product and a Co-Developed Arcturus Product in the Field in the Territory, and CureVac shall use Diligent Efforts to Develop and seek Regulatory Approval of a Co-Developed CureVac Product from each CureVac Program in the Field in the Territory.

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4.11Development Records.  Each Party shall maintain complete, current and accurate records of all Development activities conducted by it hereunder, and all data and other Information resulting from such activities.  Such records shall fully and properly reflect all work done and results achieved in the performance of the Development activities in good scientific manner appropriate for regulatory and patent purposes.  Each Party shall document all non-clinical studies and clinical trials in formal written study reports according to applicable Laws and national and international guidelines (e.g., ICH, GCP, GLP, and GMP).  Each Party shall have the right to review and copy such records maintained by the other Party at reasonable times and to obtain access to the original to the extent necessary for regulatory and patent purposes or for other legal proceedings.

4.12Data Exchange and Development Reports.  In addition to adverse event and safety data reporting obligations pursuant to Section 5.4, each Party shall promptly provide the other Party with copies of all data and results generated by or on behalf of such Party in the course of performing the Development activities hereunder.  Each Party shall provide the JSC with regular reports detailing its Development activities for the Products, and the results of such activities at each regularly scheduled JSC meeting.  The Parties shall discuss the status, progress and results of each Party’s Development activities at such JSC meetings. In addition, each Party agrees to provide serious adverse events and suspected unexpected serious adverse reactions reports (redacted with respect to any specific trials or collaborator or licensee confidential information) then in such Party’s Control with respect to the CureVac mRNA Technology and Arcturus LMD Technology then being evaluated by a Party for a program under Development hereunder, respectively. 

4.13Exchange of Materials.  

(a)If a Party provides any Materials to the other Party under this Agreement in connection with the Development of the Products, the Party receiving such Materials shall use such Materials solely to Develop the Products in accordance with this Agreement.  Without limiting the foregoing, except as necessary to Develop the Products in accordance with this Agreement, neither Party shall attempt to reverse engineer, design around, deconstruct or in any way determine the structure or composition of the other Party’s Materials, shall not generate analogs of or derivatives based on such Materials, shall not sell, transfer, disclose or otherwise provide access to such Materials to any Third Party without the written consent of the other Party, except that each Party may allow access to the other Party’s Materials to its employees, agents, and sub-contractors who require such access for the Development of the Products under and in accordance with this Agreement; provided that such employees, agents and sub-contractors are apprised of the proprietary nature of the Materials and are bound by written agreement to retain and use the Materials in a manner that is consistent with the terms of this Agreement.  

(b)Upon the completion of the relevant Development work or the providing Party’s request, any remaining Materials will be returned to the providing Party, or otherwise disposed of as mutually agreed by the Parties. 

 

Article 5

REGULATORY

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5.1Regulatory Responsibilities.  The Development Plans shall set forth the regulatory strategy for seeking Regulatory Approval for the Products in the Field by the FDA, EMA and Regulatory Authorities in Japan.  All regulatory activities shall be conducted using Diligent Efforts and in accordance with the regulatory strategy set forth in the Development Plans.

5.2Cooperation and Allocation of Responsibilities.  

(a)OTC Products and Arcturus Product.  Arcturus shall be the regulatory sponsor and shall be solely responsible for all regulatory activities for the OTC Products and the Co-Developed Arcturus Products.  Arcturus shall be responsible for preparing and filing, and shall be the owner of, all MAAs for such Products in the Field in the Territory, and shall be responsible for all regulatory activities necessary to obtain and maintain Regulatory Approval of such Products in the Field in the Territory. 

(b)CureVac Products.  CureVac shall be the regulatory sponsor and shall be solely responsible for all regulatory activities for the Co-Developed CureVac Products.  CureVac shall be responsible for preparing and filing, and shall be the owner of, all MAAs for such Products in the Field in the Territory, and shall be responsible for all regulatory activities necessary to obtain and maintain Regulatory Approval of such Products in the Field in the Territory. 

(c)Cooperation.  For each Product, each Party shall cooperate reasonably with the other Party with respect to all regulatory activities.  Without limiting the foregoing, each Party: 

(i)shall consult with the other Party through the JSC regarding regulatory matters pertaining to all Regulatory Materials of the Products, including plans, strategies, filings, reports, updates and supplements in connection therewith; 

(ii)shall provide the other Party with drafts of any Regulatory Materials for the Products to be submitted by such Party to any Regulatory Authority a reasonable time (but in no event less than [*...***...] days, unless impractical) prior to submission for review and comment, and shall consider in good faith any comments received from the other Party;  

(iii)shall provide the other Party with copies of any Regulatory Materials submitted to and any correspondence received from any Regulatory Authority pertaining to the Products promptly after its submission or receipt by such Party; and 

(iv)shall provide the other Party written minutes or other records of any oral discussions with any Regulatory Authority pertaining to the Products promptly after any such discussion. 

If any Regulatory Material to be provided under this Section 5.2 was originally created in a language other than the English language, the providing Party shall provide an English translation along with the original document to the receiving Party at the providing Party’s cost.   

5.3Meetings with Regulatory Authorities.

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(a)Arcturus shall lead and present at each meeting and teleconference with Regulatory Authorities for OTC Products and Co-Developed Arcturus Products.  CureVac shall not initiate contact, or respond to any inquiry from, any Regulatory Authority with respect to such Products without first notifying Arcturus in writing and obtaining Arcturus’s written consent for such contact or response. Arcturus shall provide CureVac with at least [*...***...] days (unless impractical) advance notification of any in-person meeting or teleconference with the Regulatory Authorities that relates to the Development of such Products.  CureVac shall have the right, but not the obligation, to have its representatives attend (but, unless otherwise requested by Arcturus, not participate in) such meetings. 

(b)CureVac shall lead and present at each meeting and/or teleconference with Regulatory Authorities for Co-Developed CureVac Products.  Arcturus shall not initiate contact, or respond to any inquiry from, any Regulatory Authority with respect to such Products without first notifying CureVac in writing and obtaining CureVac’s written consent for such contact or response. CureVac shall provide Arcturus with at least [...***...] days (unless impractical) advance notification of any in-person meeting or teleconference with the Regulatory Authorities that relates to the Development of such Products.  Arcturus shall have the right, but not the obligation, to have its representatives attend (but, unless otherwise requested by CureVac, not actively participate in) such meetings. 

5.4Pharmacovigilance.  Within [...***...] year after the Effective Date, the Parties shall enter into a pharmacovigilance agreement regarding the Products setting forth the procedures and actions that the Parties shall employ with respect to safety data sharing and adverse event reporting for the Products (the “Pharmacovigilance Agreement”).  The Pharmacovigilance Agreement shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, and exchange (as between the Parties) of adverse event reports and any other information concerning the safety of the Products.  The Pharmacovigilance Agreement shall also cover adverse events related to the use of the Arcturus LMD Technology.  Such guidelines and procedures shall be in accordance with, and enable the Parties to fulfill, local and national regulatory reporting obligations under applicable laws and regulations.  Each Party hereby agrees to comply with its respective obligations under such Pharmacovigilance Agreement and to cause its Affiliates and sublicensees to comply with such obligations.  

5.5Product Withdrawals and Recalls.  

(a)If any Regulatory Authority (a) threatens, initiates or advises any action regarding clinical holds of trials or any validated safety signals or to remove any Product from the market in the Territory or (b) requires or advises a Party or its Affiliates to distribute a “Dear Doctor” letter or its equivalent regarding use of any Product in the Territory, then such Party shall notify the other Party of such event within [...***...] Business Days (or sooner if required by applicable Laws) after such Party becomes aware of the action, threat, advice or requirement (as applicable).  The JSC will discuss and attempt to agree upon whether to recall or withdraw a Product in the Territory; provided, however, that if the Parties fail to agree within an appropriate time period, Arcturus shall decide whether to recall or withdraw any OTC Product or Co-Developed Arcturus Product in the Territory, and CureVac shall decide whether to recall or withdraw any Co-Developed CureVac Product in the Territory.  

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(b)Any recall or withdrawal expenses with respect to Products shall be treated as Clinical Development Costs or Joint Commercialization Costs, as applicable, except to the extent that the recall or withdrawal is attributable to the gross negligence or willful misconduct of a Party in which event (i) such Party shall bear such costs for which it is responsible and (ii) such costs shall not be included in Clinical Development Costs or Joint Commercialization Costs.

Article 6

MANUFACTURING AND SUPPLY

6.1General.  The Manufacture of the mRNA Constructs and Products, including all process and formulation development in connection therewith, including CMC activities, shall be overseen and coordinated by the JSC, and conducted pursuant to the sections of the Development Plans and the Commercialization Plans pertaining to such Manufacturing activities.  At each regularly scheduled JSC meeting, as applicable, each Party shall provide reports summarizing its Manufacturing activities and the results of such activities.  Each Party shall use Diligent Efforts to conduct all Manufacturing activities allocated to such Party under this Agreement, the Development Plans and the Commercialization Plans.

6.2Allocation of Supply Obligations.  

(a)Preclinical and Clinical Supply.

(i)mRNA Constructs.  

(1)Subject to subsection (ii), CureVac shall Manufacture and supply all mRNA Constructs in the Products (whether using the CureVac mRNA Technology or (in case of the OTC Product) the Arcturus mRNA Technology) for use in Development activities under the Development Plans and for Commercial use.  The Parties shall negotiate in good faith and enter into preclinical and clinical supply agreements for mRNA Constructs within [*...***...] days after the Effective Date to enable the Manufacturing and supply for Development of Products.  

(2)If and to the extent the Parties agree to use the Arcturus mRNA Technology (in case of the OTC Product), CureVac's obligation to Manufacture and supply mRNA Constructs shall be subject to the successful establishment of the production process. The Parties will further specify the necessary activities, including sufficient periods of testing, in the respective Development Plan.

(ii)Products.  Arcturus shall Manufacture and supply all Products, using mRNA Constructs supplied by CureVac, for use in Development activities under the Development Plans and for Commercial use.  Such activities include producing lipid-mediated delivery systems and formulating such lipid-mediated delivery systems with mRNA Constructs provided by CureVac. The Parties shall negotiate in good faith and enter into preclinical and clinical supply agreements for the Products within [...***...] days after the Effective Date to enable the Development and Commercialization of Products. Each such supply agreement shall contain provisions expressly providing for technology transfer, qualification and license rights to a second source of Manufacture of Products designated by the Party Commercializing such Product (or OTC Product), subject to reasonable approval not to be unreasonably withheld, conditioned or delayed. 

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(iii)Fill and Finish. The Parties will discuss and decide upon the use of a sub-contractor for fill and finish in the JSC in accordance with section 2.5.

(b)Commercial Supply.  At a time to be determined by the JSC but in any event not later than [*...***...] following the completion of [...***...] for a Product, the Parties shall negotiate in good faith and enter into commercial supply agreements governing the Manufacture and supply of mRNA Constructs by CureVac and the Manufacture and supply of Products by Arcturus, in each case for commercial use. Each such commercial supply agreement shall contain provisions expressly providing for technology transfer, qualification and license rights to a second source of Manufacture of Constructs or Products, respectively, designated by the Party Commercializing such Product (or OTC Product), subject to reasonable approval not to be unreasonably withheld, conditioned or delayed.

(c)For clarification, regarding the Manufacture and supply for Development and Commercialization, CureVac shall have the casting vote in relation to the mRNA Constructs in accordance with Section 2.5(b)(i) and Arcturus shall have the casting vote in relation to the Manufacture and supply of Products using mRNA Constructs supplied by CureVac in accordance with Section 2.5(a)(i), in particular in relation to the selection of a second source. 

6.3Allocation of Manufacturing Costs.

(a)Preclinical Manufacture.

(i)OTC Products.

(1)Pre-Candidate Selection.  For all [...***...] activities conducted under the OTC Preclinical Development Plan prior to selection of a Development Candidate, [...***...] shall be [...***...] responsible for [...***...] costs (at the [...***...]) and [...***...] costs [...***...] incurs to [...***...], and [...***...] shall be initially responsible for [...***...] costs (at the [...***...]) and [...***...] costs [...***...] incurs to [...***...] using [...***...], provided that such [...***...] shall be [...***...]. 

(2)Post-Candidate Selection.  For [...***...] activities conducted under the OTC Preclinical Development Plan from and after selection of an OTC Development Candidate, [...***...] shall be [...***...] responsible for [...***...] costs incurred by [...***...] to [...***...] and [...***...], and [...***...] shall [...***...] (at the [...***...]) incurred by [...***...] for such activities, provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties. 

(3)Process Development.  Notwithstanding the foregoing, [...***...] shall be [...***...] responsible for [...***...] costs (at the [...***...]) and [...***...] costs incurred by [...***...] for process development necessary for establishing GMP production of mRNA Constructs.

(4)Payment of Costs.  To the extent that a Party is responsible for costs under this Section 6.3(a)(i), the Parties shall reconcile and pay costs in 

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(1)accordance with the procedures of Section 8.1(a) and true up the costs as provided in Section 4.8. The costs under this Section 6.3(a)(i) shall be considered Manufacturing Costs.

(ii)Co-Development Programs.  All internal costs (at the FTE Costs) and all Third Party costs incurred by a Party to Manufacture Products under its respective program (i.e., the CureVac Programs or the Arcturus Program) prior to IND filing will be borne by such Party and included in the Arcturus Preclinical Program Costs or CureVac Preclinical Program Costs, as applicable, and subject to fifty percent (50%) reimbursement by the other Party pursuant to Sections 4.5(b) and 4.6(b) , provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties.

(b)Clinical Development Plans.  The Manufacturing Costs incurred by or on behalf of either Party under the Clinical Development Plans shall be deemed Clinical Development Costs and shared equally between the Parties, subject to a Party’s Opt-Out, provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties.

(c)Commercial Supply.  The Manufacturing Costs incurred by or on behalf of either Party for Commercialization in the Territory shall be included in Joint Commercialization Costs and shared between the Parties accordingly, provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties.

(d)Contract Manufacturer.  Each Party shall have the right to Manufacture the mRNA Constructs and Products under this Agreement through a CMO, provided that its agreement with such CMO shall 

(i)permit such Party to transfer the manufacturing process used by such CMO to the other Party, in case and to the extent such technology transfer is required under this Agreement; and 

(ii)require such CMO to transfer to such Party engaging such CMO all records pertaining to such Manufacturing activities, so that such Party may satisfy its obligations under Section 6.5. 

6.4Transfer of Manufacturing Know-How.  

(a)Technology Transfer.  Following the successful establishment of the production process as described in Section 6.2(a)(i)(2), upon selection of the OTC Product or a Co-Developed Arcturus Product using Arcturus mRNA Technology, the Parties shall establish the procedures for Arcturus to effect the transfer to CureVac of the Arcturus Know-How that is then being used by Arcturus or its CMO in the Manufacture of mRNA Constructs using the Arcturus mRNA Technology.  Arcturus shall conduct such technology transfer as soon as practicable in accordance with such procedures, at CureVac’s expense. 

(b)Assistance.  In connection with the transfer of Know-How under this Section 6.4, Arcturus shall provide reasonable technical assistance at CureVac’s request and expense.  

 

 

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6.5Manufacturing Records.  Each Party shall promptly provide the other Party, upon its reasonable request for the purpose of this Agreement, copies of the Manufacturing records (including specifications, protocols, batch records, master batch records and other CMC information) maintained by the first Party, its Affiliates or Third Party contractors pertaining to mRNA Constructs and Products for such other Party’s use in connection with the Manufacture of the mRNA Constructs or Products under this Agreement, to the extent reasonably necessary to perform obligations or exercise rights under this Agreement.  Each Party hereby grants the other Party the right to reference (and have referenced by its CMO) the Drug Master Files, if any, maintained by the first Party, its Affiliates or Third Party contractors pertaining to mRNA Constructs and Products for such other Party’s use in connection with the Manufacture of the mRNA Constructs and Products under this Agreement.  For as long as a Party Manufactures any mRNA Construct or Product under this Agreement for use in Development or Commercialization by the other Party, the other Party shall have the right to inspect the facility where such mRNA Construct or Product is being Manufactured, upon reasonable request by such other Party and at a time mutually agreed upon by the Parties, provided that neither Party shall have the right to conduct such inspection at any given facility more frequently than [*...***...] per calendar year.  As between the Parties, all proprietary information pertaining to the facility and personnel obtained by the inspecting Party through such inspection shall be deemed Confidential Information of the inspected Party. 

6.6Manufactured Products.  Each Party represents and warrants that all mRNA Constructs and Products Manufactured and supplied by such Party for clinical use under this Agreement shall at the time of delivery: (a) meet the applicable specifications; (b) be Manufactured in accordance with current Good Manufacturing Practices; and (c) be Manufactured in accordance with all applicable Laws.

Article 7

COMMERCIALIZATION

7.1General.  Subject to Section 7.5, Arcturus shall have the primary responsibility for all aspects of the Commercialization of OTC Products and Co-Developed Arcturus Products in the Field in the Territory, and CureVac shall have the primary responsibility for all aspects of the Commercialization of Co-Developed CureVac Products in the Field in the Territory, such activities to include in each case: (a) developing and executing a commercial launch and pre-launch plan of a Product, (b) negotiating with applicable Governmental Authorities regarding the pricing and reimbursement status of the applicable Products; (c) strategic marketing and promotion, sale force detailing, advertising, medical education and liaison; (d) offer for sale, booking sales, importation, product distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection, inventory and receivables and other sales activities; (f) providing customer support, including handling medical queries, and performing other related functions; (g) conforming its practices and procedures to applicable Laws relating to the marketing, detailing and promotion of the applicable Products and (h) any Phase 4 Studies that are not Required Phase 4 Studies.  

7.2Commercial Diligence.  Arcturus shall use Diligent Efforts to Commercialize one (1) OTC Product and, if CureVac exercises the CureVac Option, one (1) Co-Developed Arcturus Product in each country in which it receives Regulatory Approval.  If Arcturus 

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exercises the Arcturus Option for one or both CureVac Programs, CureVac shall use Diligent Efforts to Commercialize one Co-Developed CureVac Product from each such CureVac Program in each country in which it receives Regulatory Approval.

7.3Commercialization Plan.  No later than [*...***...] after the Initiation of the first Phase 3 Clinical Trial of (a) each Co-Developed CureVac Product, but excluding Opt-Out Products, CureVac shall prepare and provide to Arcturus for review and discussion a written plan for the Commercialization of such Product in the Territory and (b) the OTC Product and the Co-Developed Arcturus Product, but excluding Opt-Out Products, Arcturus shall prepare and provide to CureVac for review and discussion a written plan for the Commercialization of such Product in the Territory (with respect to each Product, a “Commercialization Plan”).  Each Commercialization Plan shall include a reasonably detailed description of (i) the level of activities and support for, anticipated timeline and corresponding budget for the applicable Party’s Commercialization activities and (ii) the supply by the other Party with respect to such Product, including mRNA Constructs.  Each Party shall periodically (at least on an annual basis) prepare updates and amendments to its Commercialization Plans to reflect changes in its plans, including in response to changes in the marketplaces, relative success of the Products and other relevant factors influencing such plans and activities.  Each Party shall submit all updates and amendments to each Commercialization Plan to the other Party for review and discussion before adopting such updates and amendments.

7.4Reports.  Each Party shall update the JSC at each regularly scheduled JSC meeting regarding its Commercialization activities with respect to the applicable Products in the Territory.  Each such update shall be in a form to be agreed by the JSC and shall summarize such Party’s (either by itself or through its Affiliates and its sublicensees) Commercialization activities with respect to the applicable Products in the Territory.  Each update will be at a level of detail reasonably requested by the other Party and sufficient to enable such other Party to determine such Party’s compliance with its diligence obligations pursuant to Section 7.2.

7.5Co-Commercialization.  Promptly following the completion of Phase 2 Clinical Trials, the Parties shall discuss in good faith the potential for Co-Commercialization of a Co-Developed Product and shall negotiate [...***...] to enter into a term sheet specifying the terms pursuant to which the Parties may Co-Commercialize any such Co-Developed Product (such terms may include a territorial split). In the event that the Parties are unable to agree, then the Party leading the Co-Development shall have the right to Commercialize (but not license to or co-commercialize with a Third Party except in accordance with Section 7.6) such Co-Developed Product for the applicable share of Operating Profit (or Loss).

7.6Partnering.  With respect to any Co-Developed Products, the Parties shall mutually agree upon a strategy for potential licensing and the lead Party to identify, negotiate and enter into a sublicense to a Third Party ("Partnering"). In the event that the Parties are unable to agree, then the Party leading the Co-Development shall be the lead Party. In the conduct of any such licensing activities by a Party, the other Party shall be kept informed in reasonable detail of the list of identified potential licensees, the status of inquiries and discussions and the progress of any negotiations.  In addition, the non-lead Party shall be provided a copy of any term sheet or draft agreement for comment, which input shall be reasonably considered by the lead Party. For clarity, Commercial Partnering activities shall 

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be considered "Commercialization" as defined in Section 1.23, provided, however, that costs associated with Partnering activities shall be shared equally as Development Costs prior to the execution of a Partnering agreement and as Commercialization Costs after the execution of a Partnering agreement.

Article 8

FINANCIAL PROVISIONS

8.1Preclinical Costs for OTC Products. 

(a)Reporting.  Within [*...***...] days after the end of each month during which either Party incurs any costs in accordance with the OTC Preclinical Development Plan that are subject to cost sharing under Sections 4.8(a) and 6.3(a)(i), each Party shall submit to the Finance Officers a report summarizing in reasonable detail all such internal costs (at the FTE Costs) and Third Party costs incurred by such Party to conduct the applicable activities in accordance with the OTC Preclinical Development Plan; provided that if there are any such costs incurred in such month that a Party is unable to timely include in such financial report, such amount shall be included and reconciled in the financial report in a future month.  Each such report shall specify in reasonable detail all such costs, and if requested by the other Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed [...***...] Dollars ($[...***...]) or with respect to which documentation is otherwise reasonably requested shall be promptly provided.  

(b)Payment.  Within [...***...] Business Days after receipt of the reports under Section 8.1(a), the Finance Officers shall conduct a reconciliation and determine if any reconciliation payment is due from one Party to another for such calendar month and, if so, the amount of such reconciliation payment.  If any such payment is owed, the applicable Party shall make such payment to the other Party within [...***...] days after the Finance Officer’s reconciliation; provided, however, that in the event of any disagreement with respect to the calculation of such payment, any undisputed portion thereof shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall be paid within [...***...] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute.  In addition, within [...***...] days after the end of each calendar quarter during which a Party is conducting activities under the OTC Preclinical Development Plan, each Party shall submit to the Finance Officers a statement of all costs such Party incurred that are subject to cost sharing under Sections 4.8(a) and 6.3(a)(i), and to the extent that such statements differ from the previously provided monthly statements, the Finance Officers will determine any true-up payment due from one Party to the other, which payments will be due within [...***...] days after the Finance Officers’ determination.

(c)True-Up.  The Parties will provide all information and make payments necessary to comply with any mechanism determined by the JSC pursuant to Section 4.8(b).

8.2Clinical Development Costs.  

(a)Reconciliation of Clinical Development Costs.  Within [...***...] days after the end of each calendar quarter during which either Party incurs any Clinical Development Costs for any Product which have been included in the respective Development 

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Plan or have otherwise been approved by both Parties, unless an Opt-Out has become effective for such Product prior to such calendar quarter, each Party shall submit to the Finance Officers a report setting forth the Clinical Development Costs it incurred in such calendar quarter for each Product; provided that if there are any Clinical Development Costs incurred in such calendar quarter that a Party is unable to timely include in such financial report, such amount shall be included and reconciled in the financial report in a future calendar quarter.  Each such report shall specify in reasonable detail all such costs, and if requested by the other Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed [*...***...] Dollars ($[...***...]) or with respect to which documentation is otherwise reasonably requested shall be promptly provided.  

(b)Payment of Quarterly Aggregate Payment.  Within [...***...] Business Days after receipt of the reports under Section 8.2(a), the Finance Officers shall conduct a reconciliation of the actual costs incurred by the Parties for each Product and determine if any reconciliation payment is due from one Party to another for such Product for such calendar quarter and, if so, the amount of such reconciliation payment (the “Quarterly Reconciliation Payment” for a Product) such that each Party bears fifty percent (50%) of the Clinical Developments Costs for each Product and calendar quarter.  The Finance Officers shall determine, based on the Quarterly Reconciliation Payments for all Products for such calendar quarter, the overall payment due from one Party to another (the “Quarterly Aggregate Payment”).  If a Quarterly Aggregate Payment is owed, the applicable Party shall make such payment to the other Party within [...***...] days after the Finance Officer’s reconciliation; provided, however, that in the event of any disagreement with respect to the calculation of any Quarterly Reconciliation Payment, any undisputed portion of such Quarterly Aggregate Payment shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall be paid within [...***...] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute.

8.3Joint Commercialization Cost Sharing Prior to First Commercial Sale.

(a)Payment of Joint Commercialization Costs.  Prior to First Commercial Sale of each Product, the Parties shall share all Joint Commercialization Costs incurred for such Product prior to an Opt-Out with respect to such Product, with each Party responsible for fifty percent (50%) of such costs, provided, however, that the costs have been included in the respective Commercialization Plan or have otherwise been approved by both Parties.  Following the reconciliation of Joint Commercialization Costs incurred for such Product during a calendar quarter prior to an Opt-Out for such Product pursuant to Section 8.3(b), the Party owing a reconciliation payment shall make such payment in accordance with Section 8.3(b).

(b)Reconciliation of Joint Commercialization Costs.  Within [...***...] days after the end of each calendar quarter prior to First Commercial Sale anywhere in the Territory and during which either Party incurs prior to an Opt-Out any Joint Commercialization Costs with respect to a Product, both Parties shall submit to the Finance Officers a report setting forth the Joint Commercialization Costs it incurred in such calendar quarter; provided that if there are any Joint Commercialization Costs incurred in such calendar quarter that a Party is unable to timely include in such financial report, such amount shall be included and reconciled in the financial report in the next possible calendar quarter.  Each such report shall specify in reasonable detail all such costs, and if requested by the other 

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Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed [*...***...] Dollars ($[...***...]) or with respect to which documentation is otherwise reasonably requested shall be promptly provided.  Within [...***...] Business Days after receipt of such reports, the Finance Officers shall confer and agree in writing on whether a reconciliation payment is due from one Party to the other Party, and if so, the amount of such reconciliation payment, so that the Parties share equally the Joint Commercialization Costs for such Product.  The Party required to pay such reconciliation payment shall make such payment to the other Party within [...***...] Business Days after the end of such [...***...]  Business Day conferral period; provided, however, that in the event of any disagreement with respect to the calculation of such reconciliation payment, any undisputed portion of such reconciliation payment shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall be paid within [...***...] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute.  

8.4Operating Profit and Loss Sharing After First Commercial Sale.

(a)Share of Operating Profits and Operating Losses.  Following the first calendar quarter in which occurs the First Commercial Sale of each Product anywhere in the Territory, and for so long as such Product is being sold in the Territory, and provided that an Opt-Out has not occurred with respect to such Product, the Parties shall share equally all Operating Profits and all Operating Losses (as applicable) for such Product in the Territory.  The remainder of this Section 8.4 will apply only for Products for which an Opt-Out has not occurred.

(b)Calculation and Payment.

(i)Within [...***...] days after the end of each calendar quarter beginning with the calendar quarter in which the First Commercial Sale of each Product occurs in the Territory, the applicable Party (i.e., Arcturus, with respect to OTC Products and Co-Developed Arcturus Products, and CureVac, with respect to Co-Developed CureVac Products) shall report to the Finance Officers the Net Sales of the applicable Product in the Territory, and each Party shall report to the Finance Officers the Joint Commercialization Costs incurred by it in such calendar quarter for such Product in the Territory; provided that if there are any Joint Commercialization Costs incurred in such calendar quarter that a Party is unable to timely include in such financial report, such amount shall be included and reconciled in the financial report for a future calendar quarter.  Each such report shall specify in reasonable detail all deductions to the extent allowed in the calculation of such Net Sales and all expenses included in Joint Commercialization Costs, and if requested by the other Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed [...***...] Dollars ($[...***...]) or with respect to which documentation is otherwise reasonably requested shall be promptly provided.  

(ii)Within [...***...] Business Days after receipt of such reports, the Finance Officers shall confer and agree upon in writing a consolidated financial statement for each Product setting forth: (A) the Operating Profit or Operating Loss for such calendar quarter and (B) each Party’s fifty percent (50%) share of Operating Profit or Operating Loss.  The Finance Officers will also determine, based on the amounts in the preceding clause (B) for all Products, the amount due from one Party to the other Party such that each Party bears fifty percent (50%) of Operating Loss and receives fifty percent (50%) of Operating Profit for 

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each Product.  Within [*...***...] Business Days after such [...***...] Business Day conferral period, Arcturus or CureVac, as applicable, shall make such payment to the other Party; provided, however, that in the event of any disagreement with respect to the calculation of such payment, any undisputed portion of such payment shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall be paid within [...***...] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute. 

8.5Royalty Payments for Products Following an Opt-Out.

(a)Royalties.  Subject to the other terms of this Section 8.5, the Party that is responsible for selling an Opt-Out Product shall make quarterly, non-refundable, non-creditable royalty payments to the other Party equal to the applicable Royalty Rate of Net Sales of such Opt-Out Product in the Territory. 

(b)Royalty Term.  A Party’s royalty payment obligations under this Section 8.5 with respect to a particular Opt-Out Product and country shall commence upon the First Commercial Sale of such Opt-Out Product in such country (by such Party or its respective Affiliates or sublicensees) and shall continue, on a Product-by-Product and country-by-country basis, until the latest of (i) the expiration of the last to expire Valid Claim in such country claiming the composition of, or the method of making or using, such Opt-Out Product; (ii) the expiration of any Regulatory Exclusivity granted with respect to such Opt-Out Product in such country; and (iii) [...***...] years after the First Commercial Sale of such Opt-Out Product in such country (the “Royalty Term” for such Product and country). 

(c)Royalty Reduction upon Loss of Exclusivity.  In any country in which there is no Valid Claim claiming the composition of, or the method of making or using, a particular Opt-Out Product, and no Regulatory Exclusivity granted with respect to such Opt-Out Product, during the Royalty Term for such Opt-Out Product and country, the applicable Party shall owe royalties under this Section 8.5 on Net Sales of such Opt-Out Product in such country at a rate that is [...***...] ([...***...]%) of the applicable Royalty Rate.

(d)Royalty Reports and Payment.  Within [...***...] days after each calendar quarter, commencing with the calendar quarter during which the First Commercial Sale of any Opt-Out Product is made anywhere in the Territory, the Party responsible for making royalty payments shall provide the other Party with a report that contains the following information for the applicable calendar quarter, on an Opt-Out Product-by-Opt-Out Product and country-by-country basis: (i) the amount of gross sales of the Opt-Out Products, (ii) a calculation of the royalty payment due on such sales, and (iii) the exchange rate for such country.  Concurrent with the delivery of the applicable quarterly report, the Party providing such report shall pay in Dollars all royalties due to the other Party with respect to Net Sales of Opt-Out Products by such Party and its Affiliates and sublicensees for such calendar quarter.

8.6Currency; Exchange Rate.  All payments to be made by a Party to the other Party under this Agreement shall be made in Dollars or Euros, as appropriate, by bank wire transfer in immediately available funds to a bank account designated by written notice from the Party that receives the payment.  The rate of exchange to be used in computing the amount of currency equivalent in Dollars or Euros shall be made at the average of the closing exchange rates reported by the Wall Street Journal (http://quotes.wsj.com/fx/EURUSD), or

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such other source as the Parties may agree in writing, of the applicable reporting period for the payment due. 

8.7Late Payments.  If a Party does not receive payment of any sum due to it on or before the due date therefor, simple interest shall thereafter accrue on the sum due to such Party from the due date until the date of payment at a per-annum rate of U.S. prime plus [*...***...] percentage points or the maximum rate allowable by applicable Law, whichever is less.

8.8Taxes.

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

(b)Tax Cooperation.  The Parties agree to cooperate with one another and use reasonable efforts to avoid or reduce tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by a Party to the other Party under this Agreement.  To the extent a Party is required by applicable Laws to deduct and withhold taxes on any payment to the other Party, such Party shall (i) promptly notify the other Party of such requirement; (ii) pay the amounts of such taxes to the proper Governmental Authority in a timely manner, (iii) promptly provide the other party with an official receipt or other document evidencing such payment of tax. Each Party shall provide the other Party any tax forms that may be reasonably necessary in order for such other Party to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty, to the extent legally able to do so.  Each Party shall use reasonable efforts to provide any such tax forms to the other Party in advance of the due date.  Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by Law, of withholding taxes or similar obligations resulting from payments made under this Agreement.

(c)Payor Withholding Tax Action.  If a Party (the “Payor”) is required to make a payment to the other Party subject to a deduction or withholding of tax, then (A) if such deduction or withholding of tax obligation arises as a result of any action by Payor, including an assignment of this Agreement, or any failure on the part of Payor to comply with applicable Law, that has the effect of modifying the tax treatment or increasing the tax of the other Party (a “Payor Withholding Tax Action”), then Payor shall increase the payment (in respect of which such deduction or withholding of tax is required to be made) by the amount necessary (the “Additional Tax”) to ensure that the other Party receives an amount equal to the amount that it would have received had no such Payor Withholding Tax Action occurred, and (B) Payor shall deduct and withhold the Additional Tax from the payment made by Payor to the other Party.  Payor shall timely remit the Additional Tax, along with any other tax deducted and withheld from the payment made by Payor, to the proper Governmental Authority for the account of the other Party in accordance with applicable Law. 

8.9Records and Audit Rights.  Each Party shall maintain complete and accurate records in sufficient detail to permit the other Party to confirm the accuracy of the amount of Clinical Development Costs, Operating Profit (and Loss), royalties and other amounts payable under this Agreement.  Upon reasonable prior notice, such records shall be open during regular business hours for a period of [...***...] years from the creation of individual records for examination by an independent certified public accountant selected by the

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auditing Party and reasonably acceptable to the audited Party for the sole purpose of verifying for the auditing Party the accuracy of the financial reports furnished by the audited Party pursuant to this Agreement or of any payments made, or required to be made, by or to the audited Party pursuant to this Agreement.  Such audits not occur more often than [*...***...] each calendar year.  Such auditor shall not disclose the audited Party’s Confidential Information to the auditing Party, except to the extent such disclosure is necessary to verify the accuracy of the financial reports furnished by the audited Party or the amount of payments to or by the audited Party under this Agreement.  Any amounts shown to be owed but unpaid shall be paid within [...***...] days after the accountant’s report, plus interest (as set forth in Section 8.7) from the original due date (unless challenged in good faith by the audited Party in which case any dispute with respect thereto shall be resolved in accordance with Section 14.6).  The auditing Party shall bear the full cost of such audit unless such audit reveals an overpayment to, or an underpayment by, the audited Party that resulted from a discrepancy in the financial report provided by the audited Party for the audited period, which underpayment or overpayment was more than [...***...] percent ([...***...]%) of the amount set forth in such report, in which case the audited Party shall reimburse the auditing Party for the costs for such audit.  If any such overpayment exceeds such five percent amount, then the auditing Party will refund such amount to the auditing Party within [...***...] days after the accountant’s report (unless challenged in good faith by the audited Party in which case any dispute with respect thereto shall be resolved in accordance with Section 14.7).  

Article 9

INTELLECTUAL PROPERTY RIGHTS

9.1Ownership of Inventions. 

(a)Inventorship of all Inventions shall be determined in accordance with appliable patent laws. Notwithstanding the previous sentence, ownership of all Inventions, as between the Parties, will be determined and assigned in accordance with Section 9.1(b) Section 9.1(c), respectively.

(b)(i) Arcturus shall solely own any and all Inventions that are improvements, modifications, derivatives or enhancements to the Arcturus LMP Technology or the Arcturus mRNA Technology (but not also an improvement to the CureVac mRNA Technology) (the “Arcturus Improvement Technology”), (ii) CureVac shall solely own any and all Inventions that are improvements, modifications, derivatives or enhancements to the CureVac mRNA Technology (but not also an improvement to the Arcturus LMP Technology or the Arcturus mRNA Technology) (the “CureVac Improvement Technology”), and (iii) Arcturus and CureVac shall jointly own any and all Inventions that are improvements, modifications, derivatives or enhancements to both (A) the CureVac mRNA technology and (B) the Arcturus LMP Technology and/or the Arcturus mRNA Technology (the “Joint Improvement Technology”). 

(c)CureVac hereby assigns to Arcturus all of its right, title and interest in and to any and all Arcturus Improvement Technology, and agrees to take such actions reasonably requested by Arcturus to evidence such assignment.  Arcturus hereby assigns to CureVac all of its right, title and interest in and to any and all CureVac Improvement 

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Technology, and agrees to take such actions reasonably requested by Arcturus to evidence such assignment.  To the extent any Joint Improvement Technology is made solely by one Party, such Party hereby assigns to the other Party, without any additional costs, an undivided one-half interest in and to such Joint Improvement Technology, and agrees to take such actions reasonably requested by the other Party to evidence such assignment; this assignment obligation shall apply accordingly if otherwise an assignment of a partial interest is necessary for each Party to have an undivided one-half interest in and to such Joint Improvement Technology.  

(d)All jointly owned Inventions shall be referred to as “Joint IP”, and each Party shall own an undivided one-half interest in the Joint IP.  Know-How included in Joint IP shall be referred to as “Joint Know-How” and Patent Rights included in Joint IP shall be referred to as “Joint Patents”.  

(e)Personnel Obligations.  Prior to beginning work under this Agreement, each employee, agent or independent contractor of a Party or its respective Affiliates shall be bound by non-disclosure and invention assignment obligations that are consistent with the obligations of such Party in this Article 9, including: (i) promptly reporting any invention, discovery, process or other intellectual property right; (ii) assigning to such Party, as appropriate, all of his or her right, title and interest in and to any invention, discovery, process or other intellectual property right; (iii) cooperating in the preparation, filing, prosecution, maintenance and enforcement of any patent and patent application; (iv) performing all acts and signing, executing, acknowledging and delivering any and all documents required for effecting the obligations and purposes of this Agreement; and (v) abiding by the obligations of confidentiality and non-use set forth in Article 10.  It is understood and agreed that such non-disclosure and invention assignment agreement need not reference or be specific to this Agreement.  Each Party shall be solely responsible for payments that may be required to any of such Party’s employees, agents or independent contractors in connection with or with respect to such agreements, including moral rights (or droit moral) payments with respect to any Inventions hereunder. 

(f)Background Technology.  Each Party shall continue to own all right, title and interest in and to its background technology and any technology or intellectual property that is not an Invention (i.e., Arcturus Technology and CureVac Technology, as applicable, excluding Inventions).      

9.2Disclosure of Inventions.  Each Party shall promptly disclose to the other Party all Inventions and shall also respond promptly to reasonable requests from the other Party for additional information relating to such Inventions.         

9.3Exploitation and Licenses of Joint IP. Each Party (i) shall have the right to license, and exploit such Joint IP (including Joint Know-How and Joint Patents) anywhere in the world, without a duty of accounting or an obligation to seek consent from the other Party for the exploitation or license of the Joint IP (subject to the licenses granted to the other Party under this Agreement and subject to any other intellectual property held by such other Party), and (ii) hereby grants to the other Party a cost-free, perpetual, non-exclusive, transferable license, with the right to grant sublicenses in multiple tiers, under its interest in the Joint IP to enable the other Party to use the Joint IP as specified in (i).

9.4Patent Prosecution.

 

 

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(a)Arcturus Patents.

(i)Arcturus shall be responsible for filing, prosecuting and maintaining the Arcturus Patents (excluding the Joint Patents), at its own cost and expense, and shall keep CureVac reasonably informed of the status of such Arcturus Patents.  With respect to any Arcturus Patents (excluding Joint Patents) that specifically claim (i) a Co-Developed CureVac Product but not any other product or (ii) Joint Improvement Technology (the “Arcturus Product Patents”), Arcturus shall consult with CureVac and shall promptly provide CureVac with material correspondence received from any patent authorities in connection therewith.  In addition, Arcturus shall promptly provide CureVac with drafts of all proposed material filings and correspondence to any patent authorities with respect to such Arcturus Product Patents for CureVac’s review and comment prior to the submission of such proposed filings and correspondence.  Arcturus shall confer with CureVac and take into consideration CureVac’s comments prior to submitting such filings and correspondence, provided that CureVac shall provide such comments within [*...***...] days of receiving the draft filings and correspondence from Arcturus.  If CureVac does not provide comments within such period of time, then CureVac shall be deemed to have no comment to such proposed filings or correspondence.  In case of disagreement between the Parties with respect to the filing, prosecution and maintenance of such Arcturus Product Patents, the final decision shall be made by Arcturus.  For the purpose of this Article 9, “prosecution” shall include any post-grant proceeding including supplemental examination, post grant review proceeding, inter parties review proceeding, patent interference proceeding, opposition proceeding and reexamination.

(ii)Arcturus shall notify CureVac of any decision to cease prosecution or maintenance of any Arcturus Product Patents.  Arcturus shall provide such notice at least [...***...] days prior to any filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such Arcturus Product Patent.  In such event, Arcturus shall permit CureVac, at its discretion and expense, to continue prosecution or maintenance of such Arcturus Product Patent.  CureVac’s prosecution or maintenance of such Arcturus Product Patent shall not change the Parties’ respective rights and obligations under this Agreement with respect to such Arcturus Product Patent other than those expressly set forth in this Section 9.4(a)(ii). 

(b)CureVac Patents. 

(i)CureVac shall be responsible for filing, prosecuting and maintaining the CureVac Patents (excluding the Joint Patents), at its own cost and expense, and shall keep Arcturus reasonably informed of the status of such CureVac Patents.  With respect to any CureVac Patents (excluding Joint Patents) that specifically claim (i) an OTC Product or Co-Developed Arcturus Product but not any other product or (ii) Joint Improvement Technology (the “CureVac Product Patents”), CureVac shall consult with Arcturus and shall promptly provide Arcturus with material correspondence received from any patent authorities in connection therewith.  In addition, CureVac shall promptly provide Arcturus with drafts of all proposed material filings and correspondence to any patent authorities with respect to such CureVac Product Patents for Arcturus’s review and comment prior to the submission of such proposed filings and correspondence.  CureVac shall confer with Arcturus and take into consideration Arcturus’s comments prior to submitting such filings and correspondence, provided that Arcturus shall provide such comments within [...***...] days of receiving the draft filings and correspondence from CureVac.  If 

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Arcturus does not provide comments within such period of time, then Arcturus shall be deemed to have no comment to such proposed filings or correspondence.  In case of disagreement between the Parties with respect to the filing, prosecution and maintenance of such CureVac Product Patents, the final decision shall be made by CureVac.  

(ii)CureVac shall notify Arcturus of any decision to cease prosecution or maintenance of any CureVac Product Patents.  CureVac shall provide such notice at least [*...***...] days prior to any filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such CureVac Product Patent.  In such event, CureVac shall permit Arcturus, at its discretion and expense, to continue prosecution or maintenance of such CureVac Product Patent.  Arcturus’s prosecution or maintenance of such CureVac Product Patent shall not change the Parties’ respective rights and obligations under this Agreement with respect to such CureVac Product Patent other than those expressly set forth in this Section 9.4(b)(ii). 

(c)Joint Patents.

(i)The Parties shall determine which Party shall be responsible for filing, prosecuting and maintaining the Joint Patents worldwide and the Parties shall share equally the cost for the prosecution and maintenance of Joint Patents, provided that unless agreed otherwise the Parties intend that the Party designated as the lead for Commercialization of an OTC or Co-Developed Product shall be responsible for prosecuting and maintaining applicable Joint Patents. The prosecuting Party shall consult with the other Party and keep the other Party reasonably informed of the status of the Joint Patents and shall promptly provide the other Party with material correspondence received from any patent authorities in connection therewith.  In addition, the prosecuting Party shall promptly provide the other Party with drafts of all proposed material filings and correspondence to any patent authorities with respect to Joint Patents for review and comment prior to the submission of such proposed filings and correspondence.  The prosecuting Party shall confer with the other Party and take into consideration such other Party’s comments prior to submitting such filings and correspondence, provided that the other Party shall provide such comments within [...***...] days of receiving the draft filings and correspondence from the prosecuting Party.  If the other Party does not provide comments within such period of time, then it shall be deemed to have no comment to such proposed filings or correspondence.  In case of disagreement between the Parties with respect to the filing, prosecution and maintenance of such Joint Patents, the final decision shall be made the prosecuting Party.

(ii)The prosecuting Party shall notify the other Party of any decision to cease prosecution or maintenance of any Joint Patents.  The prosecuting Party shall provide such notice at least [...***...] days prior to any filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such Joint Patent.  In such event, the prosecuting Party shall permit the other Party, at its discretion and expense, to continue prosecution or maintenance of such Joint Patent. 

(d)Collaboration.  Each Party shall provide the other Party all reasonable assistance and cooperation in the patent prosecution efforts under this Section 9.4, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.  When a Party assumes the responsibilities for the prosecution and maintenance of a Patent under Section 9.4(a)(ii), 9.4(b)(ii) or 9.4(c)(ii) above, the other Party shall promptly transfer to such Party the patent prosecution files for  

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such Patent and provide reasonable assistance in the transfer of the prosecution responsibilities.  The Party assuming such prosecution and maintenance responsibilities shall have the right to engage its own counsel to do so.      

9.5Patent Enforcement. 

(a)If either Party becomes aware of (i) any existing or threatened infringement of any Arcturus Patent or CureVac Patents (including Joint Patents) in the Field in the Territory, which infringing activity involves the using, making, importing, exporting, offering for sale or selling Products or products that are competitive with Products, or the submission to a Party or a Regulatory Authority of an application for a product that references a Product, or (ii) a declaratory judgment action asserting the invalidity, unenforceability or non-infringement of any Arcturus Patent or CureVac Patent (including a Joint Patents) in the Territory in connection with any infringement described in clause (i) (each of (i) and (ii), a “Product Infringement”), it shall promptly notify the other Party in writing to that effect, and the Parties will consult with each other regarding any actions to be taken with respect to such Product Infringement.

(b)CureVac shall have the first right to bring and control any legal action to enforce CureVac Patents (and Joint Patents prosecuted by CureVac) in connection with any Product Infringement (“CureVac Product Infringement”) as it reasonably determines appropriate, and Arcturus shall have the right to be represented in any such action by counsel of its choice.  Prior to CureVac’s commencing any such action, and periodically during the course of such action, the Parties shall meet to discuss CureVac’s proposed strategy for such action and the progress thereof, and CureVac shall reasonably consider any comments thereto made by Arcturus.  If CureVac decides not to bring such legal action, it shall so inform Arcturus promptly and Arcturus shall have the right to bring and control any legal action to enforce CureVac Patent in connection with such CureVac Product Infringement as it reasonably determines appropriate after consultation with CureVac.

(c)Arcturus shall have the first right to bring and control any legal action to enforce Arcturus Patents (and Joint Patents prosecuted by Arcturus) in connection with any Product Infringement (“Arcturus Product Infringement”) as it reasonably determines appropriate, and CureVac shall have the right to be represented in any such action by counsel of its choice.  Prior to Arcturus’s commencing any such action, and periodically during the course of such action, the Parties shall meet to discuss Arcturus’s proposed strategy for such action and the progress thereof, and Arcturus shall reasonably consider any comments thereto made by CureVac.  If Arcturus decides not to bring such legal action, it shall so inform CureVac promptly and CureVac shall have the right to bring and control any legal action to enforce Arcturus Patent in connection with such Arcturus Product Infringement as it reasonably determines appropriate after consultation with Arcturus. 

(d)Arcturus shall have the exclusive right to enforce the Arcturus Patents (other than Joint Patents) for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate.  CureVac shall have the exclusive right to enforce the CureVac Patents (other than Joint Patents) for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate.  Each Party shall have the right to enforce the Joint Patents for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate.  

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(e)At the request of the Party bringing the action against any Product Infringement, the other Party shall provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents, cooperating in discovery and joining as a party to the action if required.  In connection with any such proceeding, the Party bringing the action shall not enter into any settlement admitting the invalidity of, or otherwise impairing any Patent Rights of the other Party.

(f)All costs and expenses incurred in connection with an enforcement action relating to a claim of Product Infringement shall be treated as Joint Commercialization Costs for the applicable Product, except that with respect to Opt-Out Products, the Party bringing the action will bear its costs and expenses, and those of the other Party if incurred at such Party’s request.  Any recoveries from such actions shall (i) in the case of Opt-Out Products, be used first to reimburse the Parties’ costs and expenses in connection with such actions, and the remainder will be deemed Net Sales and retained by the selling Party, subject to a royalty payment to the other Party in accordance with Section 8.5, and (ii) in the case of other Products, be deemed Net Sales and shared between the Parties as part of the Operating Profit (or Loss) for the applicable Product.

9.6Orange Book.  Each Party shall cooperate with the other Party to: (i) file appropriate information with the FDA listing any of the Arcturus Patents and CureVac Patents (including Joint Patents) in the Orange Book; and (ii) with respect to other countries in the Territory, file appropriate information with the applicable Regulatory Authority listing any such Patent Rights in the listing source in such country.

9.7Patent Extensions

(a)The Parties shall cooperate in obtaining patent term restoration (under but not limited to the U.S. Drug Price Competition and Patent Term Restoration Act and its foreign equivalent), supplemental protection certificates or their equivalents, and patent term extensions with respect to the Arcturus Patents and CureVac Patents (including Joint Patents) in any country and/or region where applicable.

(b)CureVac shall determine which Arcturus Patents and CureVac Patents it shall apply to extend in any country and/or region for any Co-Developed CureVac Product; provided that CureVac shall not have the right to extend any Arcturus Patent that claims (generically or specifically) any product then being developed or commercialized other than a Co-Developed CureVac Product without the prior written consent of Arcturus, which shall not be unreasonably withheld, conditioned or delayed.  Arcturus shall determine which Arcturus Patents and CureVac Patents it shall apply to extend in any country and/or region for any OTC Product or Co-Developed Arcturus Product; provided that Arcturus shall not have the right to extend any CureVac Patent that claims (generically or specifically) any product then being developed or commercialized other than an OTC Product or Co-Developed Arcturus Product without the prior written consent of CureVac, which shall not be unreasonably withheld, conditioned or delayed.  

9.8Patents Licensed From Third Parties.  Each Party’s rights under this Article 9 with respect to the prosecution and enforcement of any Arcturus Patent or CureVac Patent shall be subject to the rights retained by and/or any obligations to any upstream licensor to prosecute and enforce such Patent Right, if such Arcturus Patent is subject to an upstream license agreement.

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9.9Trademarks.  CureVac shall have the right to brand the Co-Developed CureVac Products in Territory using CureVac trademarks and any other trademarks and trade names it determines appropriate for such Products (the “CureVac Product Marks”), which may vary by country or within a country.  CureVac shall own all rights in the CureVac Product Marks and shall register and maintain the CureVac Product Marks in the countries and regions in the Territory that it determines reasonably necessary.  Arcturus shall have the right to brand the OTC Products and Co-Developed Arcturus Products using Arcturus trademarks and any other trademarks and trade names it determines appropriate for such Products (the “Arcturus Product Marks”).  Arcturus shall own all rights in the Arcturus Product Marks and shall register and maintain the Arcturus Product Marks in the countries and regions in the Territory that it determines reasonably necessary.  Each Party shall not, and shall ensure that its Affiliates and sublicensees will not, make any use of the trademarks or house marks of the other Party or its Affiliates or licensees (including their corporate names) or any trademark confusingly similar thereto. 

Article 10

CONFIDENTIALITY; PUBLICATION 

10.1Duty of Confidence.  Subject to the other provisions of this Article 10, all Confidential Information of a Party (the “Disclosing Party”) shall be maintained in confidence and otherwise safeguarded by the other Party (the “Receiving Party”) and its Affiliates, using Diligent Efforts, but in any event no less than in the same manner and the same protections with which the Receiving Party maintains its own confidential information. 

10.2Exceptions.  The foregoing obligations as to particular Confidential Information of a Disclosing Party shall not apply to the extent that the Receiving Party can demonstrate that such Confidential Information:

(a)is known by the Receiving Party at the time of its receipt without an obligation of confidentiality, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party’s business records;

(b)is in the public domain before its receipt from the Disclosing Party, or thereafter enters the public domain through no fault or omission of the Receiving Party or any of its Affiliates;

(c)is subsequently disclosed to the Receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the Disclosing Party; or

(d)is developed by the Receiving Party independently and without the aid, application or use of or reference to any Confidential Information received from the Disclosing Party, as documented by the Receiving Party’s business records.

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle

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of operation are published or available to the general public or in the rightful possession of the Receiving Party. 

10.3Authorized Disclosures.  The Receiving Party may only use any such Confidential Information for the purposes of performing its obligations or exercising its rights under this Agreement. Notwithstanding the obligations set forth in Sections 10.1 and 10.5, a Party may disclose the other Party’s Confidential Information (including this Agreement and the terms herein) 

(a)if and to the extent such disclosure is reasonably necessary (i) for the filing or prosecuting Patent Rights as contemplated by this Agreement; (ii) in connection with regulatory filings for the Products; (iii) for the prosecuting or defending litigation as contemplated by this Agreement; (iv) in connection with the exercise of its rights or the performance of its obligations hereunder, including in relation to Joint Know-How the Development and Commercialization in accordance with this Agreement, provided that the recipient is bound by confidentiality obligations corresponding to the obligations under this Agreement; (v) to obtain advice in relation to this Agreement and the activities hereunder; (vi) for the purpose of evaluating or carrying out an actual or potential investment, acquisition or collaboration to such Party’s attorneys, independent accountants or financial advisors, actual or potential investors and lenders, acquirers, licensees, assignees and other financial or commercial partners (“Recipients”), provided that in each such case such Recipients are bound by confidentiality and non-use obligations substantially consistent with those contained in this Agreement; or 

(b)if and to the extent such disclosure is required by judicial or administrative process, provided that in such event such Party shall promptly inform the other Party of such required disclosure and provide the other Party an opportunity to challenge or limit the disclosure obligations.  Confidential Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions of this Article 10, and the Party disclosing Confidential Information pursuant to law or court order shall take all steps reasonably necessary, including seeking confidential treatment or a protective order to ensure the continued confidential treatment of such Confidential Information.  

10.4Publications.  The JSC (itself or through a subcommittee) shall establish a publication strategy and plan for the Products.  Such strategy as it pertains to any particular clinical trial will be established prior to the Initiation of such trial, and updated from time to time as the publication subcommittee may agree.  Such publication subcommittee shall have the right to review and approve any publication relating to the Products, including scientific, health economic or pharmacoeconomic publications, considering CureVac’s and Arcturus’s interest in publishing the results of the Development work in order to obtain recognition within the scientific or other applicable community and to advance the state of knowledge in the field, the need to protect Confidential Information and the Parties’ mutual interest in obtaining valid patent protection, and protecting reasonable business interests and trade secret information.  Consequently, except for disclosures permitted pursuant to Sections 10.2 and 10.3, each Party and its respective Affiliates, employee(s) and consultant(s) shall deliver to such publication subcommittee for review and comment a copy of any proposed publication or presentation that pertains to any Product, pursuant to a procedure to be established by such publication subcommittee (but excluding general corporate publications and presentations).  Such publication subcommittee shall have the right to require modifications of the 

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publication or presentation: (a) to protect each Parties’ respective Confidential Information; (b) for trade secret reasons or business reasons; and/or (c) to delay such submission for an additional [*...***...] days as may be reasonably necessary to seek patent protection for the information disclosed in such proposed submission.  

10.5Publicity; Use of Names.  

(a)The Parties intend to issue a mutually agreed joint press release announcing this Agreement promptly after the mutual execution of the Agreement.  Subject to Section 10.3 above, no other disclosure of the existence or the terms of this Agreement may be made by either Party or its Affiliates except as provided in this Section 10.5, and no Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employees in any publicity, promotion, news release or disclosure relating to this Agreement or its subject matter, except as provided in this Section 10.5 or with the prior express written permission of the other Party, except as may be required by applicable Law.  

(b)A Party may disclose this Agreement in securities filings with the U.S. Securities and Exchange Commission (the “SEC”) or equivalent foreign agency to the extent required by applicable Law.  In such event, the Party seeking such disclosure shall prepare a proposed redacted version of this Agreement to request confidential treatment for this Agreement, and the other Party agrees to promptly (and in any event, no less than [...***...] days after receipt of such proposed redactions) give its input in a reasonable manner in order to allow the Party seeking disclosure to file its request within the time lines proscribed by applicable Law.  The Party seeking such disclosure shall reasonably consider any comments thereto provided by the other Party within such [...***...] day period.

(c)Each Party acknowledges that the other Party may be legally required to make public disclosures (including in filings with the Governmental Authorities) of certain terms of or material developments or material information generated under this Agreement and agrees that each Party may make such disclosures as required by law, provided that the Party seeking such disclosure first provides the other Party a copy of the proposed disclosure, and shall reasonably consider any comments thereto provided by the other Party within [...***...] days after the receipt of such proposed disclosure, to the extent practicable.    

(d)Other than the press release set forth in Exhibit 10.5, the Parties agree that the portions of any other news release or other public announcement relating to this Agreement or the performance hereunder that would disclose information other than that already in the public domain, shall first be reviewed and approved by both Parties (with such approval not to be unreasonably withheld, conditioned or delayed).  For each such disclosure, a Party shall provide the other Party with a draft of such disclosure at least [...***...] Business Days prior to its intended release for review and comment, and shall consider such other Party’s comments in good faith.  If a Party does not receive comments from the other Party within [...***...] Business Days, such Party shall have the right to make such disclosure without further delay.  

(e)The Parties agree that after a disclosure pursuant to Section 10.5(c), or after a press release (including the initial press release) or other public announcement pursuant to Section 10.5(d) has been reviewed and approved by the other Party, the disclosing Party may make subsequent public disclosures reiterating such information without having to obtain the other Party’s prior consent and approval.

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(f)Each Party agrees that the other Party shall have the right to use such first Party’s name and logo in presentations, the company’s website, collateral materials and corporate overviews to describe the collaboration relationship, as well as in taglines of press releases issued pursuant to this Section 10.5.

Article 11

TERM AND TERMINATION

11.1Term.  The term of this Agreement shall commence upon the Effective Date and, unless earlier terminated pursuant to this Article 11, shall continue in full force and effect, on a country-by-country and Product-by-Product basis, until such time when the applicable Party (including its Affiliates and sublicensees) (i.e., CureVac with respect to Co-Developed CureVac Products and Arcturus with respect to OTC Products and Co-Developed CureVac Products) has permanently stopped selling such Product in such country, or with respect to Opt-Out Products, the expiration of the Royalty Term for such Product and country (the “Term”).  

11.2Termination.

(a)Termination by a Party for Convenience.  CureVac may terminate this Agreement with respect to all OTC Products and/or all Co-Developed Arcturus Products, on one hundred eighty (180) days written notice to Arcturus.  Arcturus may terminate this Agreement with respect to all Co-Developed CureVac Products from one or both CureVac Programs, on one hundred eighty (180) days written notice to CureVac.

(b)Termination for Material Breach.  

(i)If either Party believes that the other is in breach of its material obligations hereunder, then the non-breaching Party may deliver notice of such breach to the other Party.  For all breaches other than a failure to make a payment as set forth in this Agreement, the allegedly breaching Party shall have [*...***...] from such notice to dispute or cure such breach; provided that if such breach is not reasonably capable of cure within such time period, the breaching Party may submit a cure plan reasonably acceptable to the non-breaching Party prior to the end of such time period, in which case the cure period shall be extended for up to an additional [...***...], so long as the breaching Party is using Diligent Efforts to implement such cure plan during such cure period.  For any breach arising from a failure to make a payment set forth in this Agreement, the allegedly breaching Party shall have [...***...] from the receipt of the notice to dispute or cure such breach.  If the Party receiving notice of breach fails to cure, or fails to dispute, that breach within the applicable period set forth above, then the Party originally delivering the notice of breach may terminate this Agreement effective on written notice of termination to the other Party.  

(ii)If the allegedly breaching Party in good faith disputes such material breach or disputes the failure to cure or remedy such material breach and provides written notice of that dispute to the other Party within the applicable period set forth above, the matter shall be addressed under the dispute resolution provisions in Section 14.7, and the notifying Party may not terminate this Agreement until it has been determined under Section 14.7 that the allegedly breaching Party is in material breach of this Agreement, and: (i) the 

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breach cannot be cured; or (ii) if the breach can be cured, such breaching Party further fails to cure such breach within [*...***...] after the conclusion of that dispute resolution procedure, and in each case such termination shall then be effective upon written notification from the notifying Party to the breaching Party.  

(iii)Notwithstanding the foregoing, if the breach relates only to one or more, but not all types of Product (i.e., OTC Products, Co-Developed Arcturus Products or Co-Developed CureVac Products from each CureVac Program), then the non-breaching Party’s termination right will be with respect to the affected Products only, and not this Agreement in its entirety.

(c)Termination for Patent Challenge.  Arcturus may terminate, at its discretion, this Agreement in its entirety or in relation to the affected Products, if CureVac or its Affiliates or sublicensees, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Arcturus Patents.  CureVac may terminate, at its discretion, this Agreement in its entirety or in relation to the affected Products, if Arcturus or its Affiliates or sublicensees, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any CureVac Patents. 

11.3Effects of Termination.  Upon the termination (but not expiration) of this Agreement for any reason, the following provisions shall apply, provided that, if the Agreement is terminated with respect to particular Products only, the following provisions shall only apply to such Products and the mRNA Constructs therein (collectively, “Terminated Products”):  

(a)Termination by a Party for Convenience. If this Agreement is terminated by either Party under Section 11.2(a) (the “Terminating Party”), then the following will apply: 

(i)All licenses and other rights granted to the Terminating Party for Terminated Products will terminate.

(ii)All licenses and other rights granted to the other Party (the “Non-Terminating Party”) with respect to the Terminated Products shall survive and become fully paid and royalty free.  In addition, if CureVac is the Terminating Party, CureVac hereby grants Arcturus an exclusive, sublicensable, irrevocable, perpetual, fully paid up, royalty free license under the CureVac Technology to develop and commercialize Terminated Products in the Field in the Territory, and if Arcturus is the Terminating Party, Arcturus hereby grants CureVac an exclusive, sublicensable, irrevocable, perpetual, fully paid up, royalty free license under the Arcturus Technology to develop and commercialize Terminated Products in the Field in the Territory.  

(iii)The Terminating Party shall promptly return to the Non-Terminating Party all Confidential Information of the Non-Terminating Party.  

(iv)With respect to mRNA Constructs or Products being Manufactured by the Terminating Party or its Affiliate, such Party shall, at the Non-Terminating Party's discretion: 

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(1)continue to Manufacture and supply such mRNA Constructs or Products for a period of the earlier of (x) such time as technology transfer and qualification of a CMO designated by the Non-Terminating Party and reasonably acceptable to the Terminating Party is completed and (y) [*...***...] years after such termination, provided, however, that in such case the Terminating Party may charge a markup of [...***...] percent on the Manufacturing Costs in relation to mRNA Constructs or Products which are not included in the binding forecasts (as defined in the respective supply agreement) on the date the termination notice is received by the Non-Terminating Party; 

(2)assign or transfer to the Non-Terminating Party any Manufacturing agreement between the Terminating Party and a CMO with respect to such mRNA Construct or Product; and/or 

(3)transfer to the Non-Terminating Party (or its designee) all Know-How and materials to enable it to assume the Manufacture and supply of such mRNA Construct or Product for. The Terminating Party will make its personnel available during normal working hours without charge for a total of [...***...] hours for such transfer, and for additional hours in excess of [...***...] up to a total of [...***...] hours to be invoiced monthly at the then current FTE Cost.  Such designee(s) may be an Affiliate, sublicensee or Third Party manufacturers selected by the Non-Terminating Party and reasonably acceptable to the Terminating Party, and which Third Party manufacturers may, in case of commercial supply, also be a backup manufacturer or a second source manufacturer of mRNA Constructs or Products as required for the applicable transferee of the then-current process.  

For clarity, the Non-Terminating Party shall retain the right of reference to any drug master file or other corresponding regulatory filing until such time as the transfer of Manufacture is completed hereunder. 

(v)In addition to the foregoing, the Terminating Party shall use reasonable efforts with respect to those activities for which it is responsible to ensure orderly transition and uninterrupted Development, Manufacturing and Commercialization of Terminated Products by the Non-Terminating Party.

(b)Termination by a Party for Material Breach or Patent Challenge. If this Agreement is terminated by either Party (the “Non-Breaching Party”) under Section 11.2(b) or 11.2(c), then Section 11.3(a) will apply, provided, however, that

(i)the breaching or challenging Party will be deemed the Terminating Party and the non-breaching or non-challenging Party will be deemed the Non-Terminating Party, 

(ii)the non-breaching or non-challenging Party shall not be required to use Diligent Efforts regarding the Development and Commercialization and shall no longer be bound by the Development Plan or Commercialization Plan, if any, and

(iii)the non-breaching or non-challenging Party shall have the right, at its discretion, to select between the options (1)-(3) specified in Section 11.3(a)(iv).

(iv)For clarity, if this Agreement is terminated in its entirety, then the consequences set forth above will apply to each Terminated Product as provided above.

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(c)Termination Press Releases.  In the event of termination of this Agreement for any reason and subject to the provisions of Section 10.5, the Parties shall cooperate in good faith to coordinate public disclosure of such termination and the reasons therefor, and shall not, except to the extent required by applicable Law, disclose such information without the prior approval of the other Party.  The principles to be observed in such disclosures shall be accuracy, compliance with applicable Law and regulatory guidance documents, and reasonable sensitivity to potential negative reactions to such news. 

11.4Survival.  Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination.  Without limiting the foregoing, the provisions of the following Articles and Sections shall survive the expiration or termination of this Agreement: 1 (to the extent applicable), 4.9 (if applicable), 5.5, 6 (in case of ongoing Manufacture and supply obligations), 6.5, 8.1, 8.2(b), 8.4 (for these to the extent required to finally reconcile the equalization of costs or profit share), 8.5 – 8.9 (if applicable), 9.1, 9.3, 9.4(c), 10, 11.3-11.5, 13 and 14.

11.5Termination Not Sole Remedy.  Termination is not the sole remedy under this Agreement and, whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remedies shall remain available except as agreed to otherwise herein.

Article 12

REPRESENTATIONS AND WARRANTIES

12.1Representations and Warranties of Each Party.  Each Party represents and warrants to the other Party as of the Effective Date that: 

(a)it has the full right, power and authority to enter into this Agreement, to perform its obligations hereunder; and

(b)this Agreement has been duly executed by it and is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

12.2Representations and Warranties by Arcturus.  Arcturus represents and warrants to CureVac as of the Effective Date that: 

(a)it has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in Arcturus Technology in a manner that is inconsistent with the license granted to CureVac under Section 3.1;

(b)to Arcturus’s knowledge, all Arcturus Patents existing as of the Effective Date are listed in Exhibit 1.5; 

(c)it has the right to grant the license and rights herein to CureVac and it has not granted any license, right or interest in, to or under the Arcturus Technology to any Third Party that is inconsistent with the license granted to CureVac under Section 3.1;

 

 

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(d)it has not received any written notice from any Third Party asserting or alleging that the development of Arcturus Technology prior to the Effective Date infringed or misappropriated the intellectual property rights of such Third Party;

(e)to Arcturus’s knowledge, the development of Arcturus Technology prior to the Effective Date did not infringe any valid intellectual property rights owned or possessed by any Third Party and did not breach any obligation of confidentiality or non-use owed by Arcturus to a Third Party; and

(f)there are no judgments or settlements against or owed by Arcturus, and to Arcturus’s knowledge, there are no pending or threatened claims or litigation, in each case relating to Arcturus Technology.

12.3Representations and Warranties by CureVac.  CureVac represents and warrants to Arcturus as of the Effective Date, subject to the disclosures in Exhibit 12.3, that:

(a)it has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in CureVac Technology in a manner that is inconsistent with the license granted to Arcturus under Section 3.2;

(b)to CureVac’s knowledge, all CureVac Patents existing as of the Effective Date are listed in Exhibit 1.32; 

(c)it has the right to grant the license and rights herein to Arcturus and it has not granted any license, right or interest in, to or under the CureVac Technology to any Third Party that is inconsistent with the license granted to CureVac under Section 3.2;

(d)it has not received any written notice from any Third Party asserting or alleging that the development of CureVac Technology prior to the Effective Date infringed or misappropriated the intellectual property rights of such Third Party;

(e)to CureVac’s knowledge, the development of CureVac Technology prior to the Effective Date did not infringe any valid intellectual property rights owned or possessed by any Third Party and did not breach any obligation of confidentiality or non-use owed by CureVac to a Third Party; and

(f)there are no judgments or settlements against or owed by CureVac, and to CureVac’s knowledge, there are no pending or threatened claims or litigation, in each case relating to CureVac Technology.  

12.4Mutual Covenants.

(a)No Debarment.  In the course of the Development, Manufacture and Commercialization of the Products, neither Party nor its Affiliates shall use any employee or consultant who has been debarred by any Regulatory Authority or, to such Party’s or its Affiliates’ knowledge, is the subject of debarment proceedings by a Regulatory Authority.  Each Party shall notify the other Party promptly upon becoming aware that any of its or its Affiliates’ employees or consultants has been debarred or is the subject of debarment proceedings by any Regulatory Authority.

 

 

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(b)Compliance.  Each Party and its Affiliates shall comply in all material respects with all applicable Laws (including all anti-bribery laws) in the Development, Manufacture and Commercialization of the Products and performance of its obligations under this Agreement.

12.5No Other Warranties.  Except as expressly stated in this Article 12, (a) no representation, condition or warranty whatsoever is made or given by or on behalf of Arcturus or CureVac; and (b) all other conditions and warranties whether arising by operation of law or otherwise are hereby expressly excluded, including any conditions and warranties of merchantability, fitness for a particular purpose or non-infringement. 

Article 13

INDEMNIFICATION; INSURANCE 

13.1Indemnification by Arcturus.  Arcturus shall indemnify, defend and hold CureVac, its Affiliates and their respective officers, directors, agents, employees, licensees, sublicensees or contractors (“CureVac Indemnitees”) harmless from and against any Claims arising under or related to this Agreement against them to the extent arising or resulting from: (a) the gross negligence, recklessness or willful misconduct of any of the Arcturus Indemnitees; (b) the breach of any of the warranties or representations made by Arcturus to CureVac under this Agreement; (c) the Development, Manufacture or Commercialization of Opt-Out Products that are OTC Products or Co-Developed Arcturus Products by or on behalf of Arcturus or any of its Affiliates, licensees, sublicensees or contractors; 

except, in each case (a)-(c), to the extent such Claims result from the breach by CureVac of any covenant, representation, warranty or other agreement made by CureVac in this Agreement or the gross negligence, recklessness or willful misconduct of any CureVac Indemnitee. 

13.2Indemnification by CureVac.  CureVac shall indemnify, defend and hold Arcturus, its Affiliates, and their respective officers, directors, agents, employees, licensees, sublicensees or contractors (“Arcturus Indemnitees”) harmless from and against any Claims arising under or related to this Agreement against them to the extent arising or resulting from (a) the, gross negligence, recklessness or willful misconduct of any of the CureVac Indemnitees; (b) the breach of any of the warranties or representations made by CureVac to Arcturus under this Agreement; (c) the Development, Manufacture or Commercialization of Opt-Out Products that are Co-Developed CureVac Products by or on behalf of CureVac or any of its Affiliates, licensees, sublicensees or contractors; 

except, in each case (a)-(c), to the extent such Claims result from the breach by Arcturus of any covenant, representation, warranty or other agreement made by Arcturus in this Agreement or the gross negligence, recklessness or willful misconduct of any Arcturus Indemnitee.

13.3Indemnification Procedure.  If either Party is seeking indemnification under Sections 13.1 or 13.2 (the “Indemnified Party”), it shall inform the other Party (the “Indemnifying Party”) of the Claim giving rise to the obligation to indemnify pursuant to such Section as soon as reasonably practicable after receiving notice of the Claim.  The Indemnifying Party shall have the right to assume the defense of any such Claim for which it 

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is obligated to indemnify the Indemnified Party.  The Indemnified Party shall cooperate with the Indemnifying Party and the Indemnifying Party’s insurer as the Indemnifying Party may reasonably request, and at the Indemnifying Party’s cost and expense.  The Indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any Claim that has been assumed by the Indemnifying Party.  Neither Party shall have the obligation to indemnify the other Party in connection with any settlement made without the Indemnifying Party’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  If the Parties cannot agree as to the application of Section 13.1 or 13.2 as to any Claim, pending resolution of the dispute pursuant to Section 14.7, the Parties may conduct separate defenses of such Claims, with each Party retaining the right to claim indemnification from the other Party in accordance with Section 13.1 or 13.2 upon resolution of the underlying Claim.  

13.4Third Party Claims Related To Products.  Subject to Sections 5.5, 13.1 or 13.2, damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by either Party (collectively, “Damages”) from Third Party claims relating to the Development, Manufacture or Commercialization of any Product that is not an Opt-Out Product, including Damages from claims of infringement of Third Party patent rights and product liability claims of death or personal injury, shall be included within Clinical Development Costs or Joint Commercialization Costs (as the case may be) incurred by the affected Party and shared by the Parties accordingly.    

13.5Mitigation of Loss.  Each Indemnified Party shall take and shall procure that its Affiliates take all such reasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate any Claims (or potential losses or damages) under this Article 13.  Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

13.6Limitation of Liability.  Neither Party shall be liable to the other for any special, consequential, incidental, punitive or indirect damages arising from or relating to any breach of this Agreement, regardless of any notice of the possibility of such damages. Notwithstanding the foregoing, nothing in this Section 13.6 is intended to or shall limit or restrict the indemnification rights or obligations of any Party under Sections 13.1 or 13.2, or damages available for a Party's breach of its obligations relating to Confidentiality or intellectual property hereunder. 

13.7Insurance.  Each Party shall procure and maintain insurance, including product liability insurance, with respect to its activities hereunder and which is consistent with normal business practices of prudent companies similarly situated at all times during which any Product is being clinically tested in human subjects or commercially distributed or sold.  Each Party shall provide the other Party with evidence of such insurance upon request and shall provide the other Party with written notice at least [*...***...] days prior to the cancellation, non-renewal or material changes in such insurance.  It is understood that such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this Article 13.  

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Article 14

GENERAL PROVISIONS

14.1Force Majeure.  Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, earthquakes or other acts of God, or acts, generally applicable action or inaction by any governmental authority (but excluding any government action or inaction that is specific to such Party, its Affiliates or sublicensees, such as revocation or non-renewal of such Party’s license to conduct business), or omissions or delays in acting by the other Party, or unavailability of materials related to the Manufacture of the Products.  The affected Party shall notify the other Party in writing of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake and continue diligently all reasonable efforts necessary to cure such force majeure circumstances or to perform its obligations in spite of the ongoing circumstances.

14.2Assignment.  This Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party.  Notwithstanding the foregoing, either Party may, without consent of the other Party, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate of such Party, or in whole to its successor in interest in connection with the sale of all or substantially all of its stock or its assets to which this Agreement relates, or in connection with a merger, acquisition or similar transaction.  The intellectual property of any such successor in interest (an “Acquiror”) held or developed by such Acquiror (whether prior to or after such acquisition) shall be excluded from the Arcturus Technology and the CureVac Technology, and such Acquiror (and Affiliates of such Acquiror that are not controlled by (as defined in the definition of Affiliate) the acquired Party itself) shall be excluded from “Affiliate” solely for purposes of the applicable components of the foregoing intellectual property definitions, in all such cases if and only if: (a) the acquired Party remains a wholly-owned subsidiary of the Acquiror; (b) all intellectual property of the acquired Party and all research and development assets and operations of the acquired Party, in each case relating to mRNA Constructs and Products, remain with the acquired Party and are not transferred to the Acquiror or another Affiliate of the Acquiror; (c) the scientific and Development activities of the acquired Party and the Acquiror (if any) are maintained separate and distinct, and (d) there is no exchange of Know-How relating to mRNA Constructs or Products between the acquired Party and the Acquiror.  Any attempted assignment not in accordance with this Section 14.2 shall be null and void and of no legal effect.  Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement.  The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns.  

14.3Change of Control

 

 

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(a)In case of a Change of Control of a Party, within [*...***...] days after the other Party has been informed about such Change of Control in writing, the other Party shall have the right to require the Party to opt out of future sharing of Clinical Development Costs with respect to any or all of such other Party’s Products (i.e., Co-Developed CureVac Products if the Change of Control Party is Arcturus, and OTC Products and Co-Developed Arcturus Product if the Change of Control party is CureVac) (a “Forced Opt-Out”). 

(b)In case of a Forced Opt-Out, the effects of the Opt-Out for the Party that Opts-Out specified in Section 4.9(b) shall apply accordingly to the Party required to Opt-Out under this Section 14.3.

14.4Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

14.5Notices.  All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Arcturus:

Arcturus Therapeutics, Inc.

10628 Science Center Drive

Suite 200

San Diego, California 92121

USA 

Attn:CEO

Fax:(858) 300-5028

 

 

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

 

Cooley LLP

3175 Hanover St.

Palo Alto, CA  94303

Attn: Glen Y. Sato

Fax: (650) 849-7400

 

 

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If to CureVac:

CureVac AG

Paul-Ehrlich-Str. 15
72076 Tübingen
Germany
Attention: CEO and General Counsel 

Fax:+49 7071 9883 - 1101

 

or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day (or if delivered or sent on a non-Business Day, then on the next Business Days); (b) on the Business Day after dispatch if sent by internationally-recognized overnight courier; or (c) on the [*...***...] Business Day following the date of mailing, if sent by mail.

14.6Governing Law.  This Agreement shall be governed by and construed and any dispute under this Agreement shall be resolved in accordance with the laws of the State of New York, USA, without reference to any rules of conflict of laws. 

14.7Dispute Resolution.  

(a)Dispute Escalation.  In the event of a dispute between the Parties, the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves or the co-chairpersons of the JSC.  In the event that such dispute is not resolved on an informal basis within [...***...] days, any Party may, by written notice to the other, have such dispute referred to each Party’s Chief Executive Officer or his or her designee (who will be a senior executive with the appropriate authority to determine the mater for such Party), who will attempt in good faith to resolve such dispute by negotiation and consultation for a [...***...] day period following receipt of such written notice.

(b)Dispute Resolution.  

(i)In the event the Chief Executive Officers of the Parties are not able to resolve such dispute as set forth above, the Parties agree to try to solve such dispute amicably by mediation. The Parties shall conduct a mediation procedure according to the Mediation Rules of the World Intellectual Property Organization (WIPO) in effect on the date of the commencement of the mediation proceedings. The location of the mediation proceedings will be New York City, New York, USA. The number of mediators will be one (1). The language of the mediation proceedings will be English. 

(ii)If the dispute has not been settled pursuant to the said rules within [...***...] days following the filing of a request for mediation or within such other period as the Parties may agree in writing, either Party may submit the dispute to final and binding arbitration. Any dispute relating to the validity performance, construction or interpretation of this Agreement, which cannot be resolved amicably between the Parties after following the procedure set forth in this Section 14.7, shall be submitted to arbitration in accordance with the Arbitration Rules of WIPO in effect on the date of the commencement of the arbitration proceedings. The location of the arbitration proceedings will be New York 

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City, New York, USA. The number of arbitrators will be [*...***...]. The language of the arbitration proceeding will be English. The decision of the arbitrators shall be final and binding upon the Parties (absent manifest error on the part of the arbitrator(s)) and enforceable in any court of competent jurisdiction.

14.8Foreign Corrupt Practices Act Compliance. 

(a)Compliance with FCPA.  The U.S. government imposes and enforces prohibitions on the payment or transfer of anything of value to governments, government officials, political parties, political party officials (or relatives or associates of such officials), whether directly or indirectly, to obtain or retain business.  This U.S. law is referred to as the Foreign Corrupt Practices Act (“FCPA”), and it can have application to conduct of a U.S. corporation’s foreign subsidiaries, employees, agents and distributors.  A summary of the law and related information can be found at http://www.justice.gov/criminal/fraud/fcpa.  By signing this Agreement, each Party warrants that:

(i)It is familiar with the provisions and restrictions contained in the OECD Anti-Bribery Convention and FCPA and it has adopted and maintained an FCPA policy.

(ii)It shall comply with the FCPA in marketing, selling and/or servicing the Products under this Agreement.  

(iii)It shall not, in the course of its duties under the Agreement, offer, promise, give, demand, seek or accept, directly or indirectly, any gift or payment, consideration or benefit in kind that would or could be construed as an illegal or corrupt practice.

(iv)It is not a government official (as the term is defined in the FCPA) or affiliated with any government official.

(v)It shall immediately notify the other Party of any attempt by a government official to directly or indirectly solicit, ask for, or attempt to extort anything of value from such Party, and shall refuse any such solicitation, request or extortionate demand.

(b)No Action.  In no event shall a Party be obligated under the Agreement to take any action or omit to take any action that such Party believes, in good faith, would cause it to be in violation of any applicable laws and regulations, including the anti-bribery laws referenced in this Section 14.8.  

(c)Due Diligence.  Each Party shall have the right to visit the offices of the other Party from time to time during the term of the Agreement on an “as needed” basis and conduct due diligence in relation to such other Party’s business related to performance of its obligations under this Section 14.8 and may do so in the way it deems necessary, appropriate or desirable so as to ensure that such other Party complies with this Section 14.8 and any other applicable laws and regulations in its business operations.  Each Party shall make every effort to cooperate fully with the other Party in any such due diligence.  

(d)Audit.  In the event that a Party has reason to believe that a breach of any obligation of the other Party under this Section 14.8 has occurred or may occur, such Party shall have the right to select an independent Third Party to conduct an audit of the other 

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Party and review relevant books and records of the other Party, to satisfy itself that no breach has occurred.  Unless otherwise required under applicable laws and regulations or by order of a competent court or regulatory authority, the auditing Party shall ensure that the selected independent Third Party will keep confidential all audited matters and the results of the audit.  Each Party does reserve the right to disclose to the U.S. or foreign government, its agencies and/or any other government or non-government party, information relating to a possible violation by the other Party of any applicable law, including a violation of the FCPA or any other applicable anti-bribery law.

(e)Material Breach.  Each Party acknowledges that any material violation of this Section 14.8 by such Party or any of its Affiliates, sublicensees or subcontractors shall be deemed a material breach of this Agreement by such Party and shall give rise to the right for the other Party to terminate this Agreement immediately by written notice to such Party.

14.9Entire Agreement; Amendments.  This Agreement, together with the Exhibits hereto and the Confidentiality Agreement, contains the entire understanding of the Parties with respect to the collaboration and the licenses granted hereunder. In case of conflict between this Agreement and the Confidentiality Agreement, this Agreement shall prevail.  Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to the collaboration and the licenses granted hereunder are superseded by the terms of this Agreement.  The Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement.  This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

14.10Headings.  The captions to the several Articles, Sections and subsections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.

14.11Rights in Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by CureVac and Arcturus are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, United States Code, as amended (the “U.S. Bankruptcy Code”), licenses of rights to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that each Party, as licensee of certain rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party (such Party, the “Bankrupt Party”) under the U.S. Bankruptcy Code or analogous provisions of applicable Law outside the U.S., (a) the other Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property licensed to such other Party and all embodiments of such intellectual property, which, if not already in such other Party’s possession, shall be promptly delivered to it (x) upon any such commencement of a bankruptcy proceeding upon such other Party’s written request therefor, unless the Bankrupt Party elects to continue to perform all of its obligations under this Agreement or (y) if not delivered under clause (x), following the rejection of this Agreement by the Bankrupt Party upon written request therefor by the other Party and (b) the Bankrupt Party shall not interfere with the other Party’s rights to intellectual property and all embodiments of intellectual property, and shall assist and not interfere with the other Party in obtaining intellectual property and all embodiments of intellectual property from another entity.  The “embodiments” of intellectual property 

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includes all tangible, intangible, electronic or other embodiments of rights and licenses hereunder, including all products embodying intellectual property, mRNA Constructs, Products, filings with Regulatory Authorities and related rights and CureVac Know-How in the case that CureVac is the Bankrupt Party and Arcturus Know-How in the case that Arcturus is the Bankrupt Party.  

14.12Independent Contractors.  It is expressly agreed that Arcturus and CureVac shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Arcturus nor CureVac shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

14.13Waiver.  The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise.

14.14Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

14.15Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

14.16Business Day Requirements.  In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a Business Day then such notice or other action or omission shall be deemed to be required to be taken on the next occurring Business Day.

14.17Translations.  This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties.  All communications and notices to be made or given pursuant to this Agreement, and any dispute proceeding related to or arising hereunder, shall be in the English language.  If there is a discrepancy between any translation of this Agreement and this Agreement, this Agreement shall prevail.

14.18Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as necessary or appropriate in order to carry out the purposes and intent of this Agreement.

14.19Counterparts.  This Agreement may be executed in two or more counterparts by original signature, facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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Execution Copy

 

IN WITNESS WHEREOF, the Parties intending to be bound have caused this Co-Development and Co-Commercialization and Collaboration Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

	
Arcturus Therapeutics, Inc.
	
 
	
CureVac AG

	
By:
	
 
	
/s/ Joseph E. Payne
	
 
	
By:
	
 
	
/s/ Dan Menichella

	
Name:
	
 
	
Joseph E. Payne
	
 
	
Name:
	
 
	
Dan Menichella

	
Title:
	
 
	
President & CEO
	
 
	
Title:
	
 
	
CBO

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
/s/ Franz W. Haas

	
 
	
 
	
 
	
 
	
Name:
	
 
	
Franz W. Haas

	
 
	
 
	
 
	
 
	
Title:
	
 
	
CCO

 

Signature Page to the Co-Development and Co-Commercialization Agreement

 

 

65

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

LIST OF EXHIBITS

 

Exhibit 1.5:Existing Arcturus Know-How and Arcturus Patents

Exhibit 1.6:Arcturus LMD Technology

Exhibit 1.8:Arcturus mRNA Technology

Exhibit 1.32:Existing CureVac Know-How and CureVac Patents

Exhibit 2.3:Initial JSC Members and Alliance Managers

Exhibit 4.2:Minimum data package requirements

Exhibit 4.4:OTC Preclinical Development Plan 

Exhibit 10.5:Joint Press Release

Exhibit 12.3: Disclosure Letter

 

 

 

 

 

 

66

 

 

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 1.5

ARCTURUS PATENTS AND KNOW HOW

[*...***...]

***Confidential Treatment Requested 

67

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

*...***...]

***Confidential Treatment Requested 

68

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[...***...]

***Confidential Treatment Requested 

69

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 1.6

ARCTURUS LMD TECHNOLOGY

...***...]

***Confidential Treatment Requested 

70

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

71

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 1.8

ARCTURUS mRNA TECHNOLOGY

*...***...]

***Confidential Treatment Requested

72

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

73

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

74

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

75

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

76

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 1.32

Existing CureVac Know-How and CureVac Patents

[*...***...]

 

***Confidential Treatment Requested

77

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

 

***Confidential Treatment Requested

78

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

***Confidential Treatment Requested

79

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

***Confidential Treatment Requested

80

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

 

 

 

 

***Confidential Treatment Requested

81

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

***Confidential Treatment Requested

*...***...]

***Confidential Treatment Requested

82

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

 

***Confidential Treatment Requested

83

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

84

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

85

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

86

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

Exhibit 4.4

 

OTC Preclinical Development Plan

[*...***...]

 

 

***Confidential Treatment Requested

87

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

Exhibit 10.5

 

Joint Press Release

 

[to be agreed post signature]

88

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

Exhibit 12.3

Disclosure Letter

 

Disclosures Regarding Representations and Warranties of CureVac

 

[*...***...]

***Confidential Treatment Requested

89

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

90

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

91

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

92

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

93

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

94

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

95

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

96

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

97

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...]

***Confidential Treatment Requested

98

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[*...***...

***Confidential Treatment Requested

99

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

[...***...*]

***Confidential Treatment Requested

100

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

*...***...]

 

***Confidential Treatment Requested

101

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 2.3

 

[*...***...]

 

***Confidential Treatment Requested

102

		
	
CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT 

between CUREVAC and ARCTURUS
	
Confidential

 

EXHIBIT 4.2

 

Minimum Data Package Requirements

[*...***...]

***Confidential Treatment Requested

103

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