NovaBridge Biosciences 6-K/A, filed Oct 24, 2025
NovaBridge Biosciences (NBP)
6-K/A
2025-10-24
For: 2025-10-24
View Original
Added on
August 22, 2026
About this 6-K/A
NovaBridge Biosciences filed this 6-K/A on October 24, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K/A
(Amendment No. 1)
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2025
Commission File Number: 001-39173
I-MAB
2440 Research Boulevard, Suite 400
Rockville, MD 20850
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
This Amendment No. 1 (this “Amendment No. 1”) to the Report on Form 6-K, originally furnished with the U.S. Securities and Exchange Commission on October 16, 2025 (the “Initial Report”), is being furnished solely for the purpose of adding the following information and Exhibits 1.1, 1.2, 1.3 and 1.4 to the Initial Report. Except as set forth herein, there are no other changes to the Initial Report.
DOCUMENTS INCORPORATED BY REFERENCE
Exhibits 1.1, 1.2, 1.3 and 1.4 included with this Amendment No. 1 shall be deemed to be incorporated by reference into I-Mab’s Registration Statements on Form F-3 (File No. 333-286954) and Form S-8 (File No. 333-239871, File No. 333-256603, File No. 333-265684, File No. 333-279842 and File No. 333-290195) (including any prospectuses forming a part of such registration statements) and to be a part thereof from the date on which this Amendment No. 1 is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
EXHIBIT INDEX
Exhibit No. |
Description |
|
|
|
|
|
|
|
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
I-MAB |
||
|
|
||
|
By |
: |
/s/ Xi-Yong Fu |
|
Name |
: |
Xi-Yong (Sean) Fu |
|
Title |
: |
Chief Executive Officer |
Date: October 24, 2025
Exhibit 1.1
PRIVATE AND CONFIDENTIAL
EXECUTION VERSION
CERTAIN INFORMATION (INDICATED BY “[***]”) HAS BEEN EXCLUDED FROM THIS AGREEMENT BECAUSE (I) SUCH INFORMATION IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.
SERIES A PREFERRED STOCK SUBSCRIPTION AGREEMENT
This SERIES A PREFERRED STOCK SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into on October 14, 2025 by and among:
1.
VISARA, INC., a corporation organized and existing under the laws of the State of Delaware, the United States, with a registered office at 1209 Orange Street, City of Wilmington, County of New Castle, 19801 (the “Company”);
2.
I-MAB, a company incorporated with limited liability under the laws of the Cayman Islands, with a registered address at Vistra (Cayman) Limited, P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands (“IMAB”); and
3.
AFFAMED THERAPEUTICS (HK) LIMITED, a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK (“AffaMed”, together with IMAB, the “Investors”, and each an “Investor”).
Each of the parties listed above is referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
A.
As of the date of this Agreement, the authorized share capital of the Company consists of a total of 50,000,000 authorized Common Shares, 1 of which is issued and outstanding (the “Existing Common Share”).
B.
IMAB wishes to invest in the Company by subscribing for certain Series A Preferred Shares to be issued by the Company pursuant to the terms and subject to the conditions of this Agreement (the “IMAB Investment”).
C.
The Company has entered into an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”) with AffaMed on or prior to the date of this Agreement, pursuant to which, AffaMed agrees to assign to the Company all of its right, title, and interest in and to the Assigned Contracts (as defined below) upon IMAB’s payment of its Subscription Price (as defined below) to the Company.
D.
The Company also intends to enter into an Exclusive License Agreement (the “Direct License Agreement”) with AskGene Pharma, Inc., a corporation organized and existing under the laws of State of Delaware, the United States, with a registered address at 5217 Verdugo Way, Suite A, Camarillo, CA 93012 (“AskGene”), pursuant to which, AskGene will agree to grant to the Company the exclusive license to develop, manufacture, and commercialize the Licensed Antibodies (as defined in the Direct License Agreement) and Licensed Products (as defined in the Direct License
Agreement) in the Field (as defined in the Direct License Agreement) in the Territory (as defined in the Direct License Agreement).
E.
Simultaneously with the Closing of the IMAB Investment, in consideration of AffaMed’s assignment of the relevant right, title and interest in and to the Assigned Contracts under the Assignment and Assumption Agreement to the Company, the Company will issue to AffaMed certain Series A Preferred Shares of the Company pursuant to the terms of this Agreement.
F.
At or prior to the Closing, 2,700,000 Common Shares will be reserved for the ESOP (as defined below) to be approved by the Board (as defined below) (the “ESOP Pool”).
G.
The capitalization of the Company immediately after the Closing is set out in Part 2 of Schedule II.
H.
The Parties desire to enter into this Agreement and make the respective representations, warranties, covenants and agreements set forth herein on the terms and conditions set forth herein.
WITNESSETH
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound hereto hereby agree as follows:
1.
Definitions
Unless the context otherwise requires, the capitalized terms in this Agreement shall have the meanings ascribed to them in Schedule III.
2.
Purchase and Sale of preferred stock
2.1
Sale and Issuance of Preferred Stock at Closing. Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue and sell to each Investor, and each Investor agrees to subscribe for and purchase from the Company (severally but not jointly), such number of Series A Preferred Shares as set forth opposite such Investor’s name under the heading “Number of Subscription Shares” in Schedule I (in respect of such Investor, the “Subscription Shares”), at the subscription price per Share of US$1.0571 (the “Subscription Price Per Share”). The aggregate subscription price for the Subscription Shares of each Investor shall be the amount set forth opposite such Investor’s name under the heading “Consideration” in Schedule I (in respect of such Investor, the “Subscription Price”).
2.2
Closing
(a)
Closing. The consummation of the sale and issuance of the Subscription Shares pursuant to Section 2.1 (the “Closing”) shall take place remotely via the exchange of documents and signatures on or prior to the tenth (10th) Business Day after all Closing Conditions specified in Section 5 and Section 6 hereof having been waived or satisfied (other than those Closing Conditions to be satisfied at the Closing, but subject to the satisfaction or waiver thereof at the Closing), or at such other time and place as the Company and the Investors shall mutually agree in writing. For the avoidance doubt, the Parties agree that the Closing for
2
the Investors shall occur simultaneously, and none of the Parties shall have the right to procure the Closing to occur solely for one Investor, unless the other Investor agrees otherwise in writing.
(b)
Deliverables by the Company at Closing. At the Closing, the Company shall deliver to each Investor:
(i)
a scanned copy of the duly executed share certificate issued in the name of such Investor representing the relevant Subscription Shares being issued to such Investor at the Closing (or other evidence of such ownership, including a digital certificate, other digital evidence, or evidence of a book entry or updated stock ledger);
(ii)
copies of the written resolutions of the stockholder of the Company and written resolutions of the Board approving, amongst others, (A) the execution, delivery and performance by the Company of this Agreement and the Transaction Documents to which the Company is a party and the transactions contemplated hereunder and thereunder, (B) the issuance of the Subscription Shares to the Investors pursuant to this Agreement, (C) the appointment of Emmett Cunningham, and Ting Liu (whom is designated by AffaMed) and another individual designated by IMAB as Directors as of the Closing Date, (D) the adoption of the Restated Certificate and the Restated By-Laws, and (E) the redemption by the Company of the Existing Common Share.
(c)
Deliverables by the Investors at the Closing. At the Closing:
(i)
IMAB shall pay its Subscription Price by wire transfer of immediately available funds in U.S. dollars to the bank account of the Company notified by the Company to IMAB prior to the third (3rd) Business Day before the Closing Date;
(ii)
AffaMed shall take all actions and deliver all documents necessary to ensure that the Assignment and Assumption Agreement shall become effective on the Closing Date and all of AffaMed’s right, title, and interest in and to the Assigned Contracts shall have been assigned to the Company pursuant to the Assignment and Assumption Agreement on the Closing Date (the “AM712 License Assignment”) (it being acknowledged that, the Subscription Price of AffaMed is paid in kind through such AM712 License Assignment); and
(iii)
each Investor shall deliver to the Company and the other Investor a scanned copy of the resolutions of its board of directors, authorising the execution, delivery and performance by it of this Agreement and the Transaction Documents to which it is a party and the transactions contemplated hereunder and thereunder.
2.3
Use of Proceeds. The Company shall use the proceeds from the issuance and sale of the Subscription Shares (the “Proceeds”) solely for the following purposes:
(a)
product development, business development, internal management improvement, working capital and other general business activities of the Group Companies in accordance with the Approved Business Plan and Budget;
3
(b)
the payment of US$5,000,000 to AffaMed as part of the consideration for AM712 License Assignment in accordance with the Assignment and Assumption Agreement;
(c)
the payment of US$2,000,000 to ABio-X Holdings, Inc. (i) as service compensation for the founding team’s prior and continuing business development and operational (including G&A functions) support since 2024 and through 2025 and as needed in 2026 upon mutual agreement, and (ii) as reimbursement for the expenses and fees related to the transactions contemplated hereunder, in each case pursuant to the service agreement to be entered into by and between the Company and ABio-X Holdings, Inc. in the Agreed Form; and
(d)
upfront payment to AskGene for the exclusive license granted to the Company to develop, manufacture, and commercialize the Licensed Antibodies and Licensed Products in the Field in the Territory pursuant to the Direct License Agreement.
3.
Representations and Warranties of the Company
The Company represents and warrants to each Investor that, except as Disclosed, the statements in Schedule IV (collectively, the “Company Warranties”) are true, correct, complete and not misleading in all material respects as of the date hereof and as of Closing Date (except in either case for those Company Warranties that address matters only as of a particular date, which Company Warranties will have been true, correct, complete and not misleading as of such particular date).
4.
Representations and Warranties of the Investors
Each of the Investors hereby represents and warrants (severally but not jointly) to the Company that the statements set forth in Sections 4.1 to 4.12 are true, correct, complete and not misleading in all material respects as of the date hereof and as of Closing Date (except in either case for those representations and warranties that address matters only as of a particular date, which representations will have been true, correct, complete and not misleading as of such particular date), and AffaMed hereby represents and warrants to the Company and IMAB that the statements set forth in Section 4.13 are true, correct, complete and not misleading as of the date hereof and as of Closing Date.
4.1
Organization. Such Investor is duly organized or incorporated, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under the Laws of the place of its incorporation or establishment.
4.2
Authorization. Such Investor has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its obligations thereunder. All action on the part of such Investor necessary for the authorization, execution delivery and performance of the Transaction Documents to which it is a party, has been taken or will be taken prior to the Closing. Each Transaction Document has been duly executed and delivered by such Investor (to the extent such Investor is a party), enforceable against such Investor in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
4
4.3
Compliance with Other Instruments. All Consents from or with any Governmental Authority or any other Person required in connection with such Investor’s valid execution, delivery and performance of the Transaction Documents to which such Investor is a party, and the consummation by such Investor of the transactions contemplated thereunder, have been duly obtained or completed (as applicable) and are in full force and effect as of the Closing Date. The execution, delivery and performance of each Transaction Document by such Investor do not, and the consummation by such Investor of the transactions contemplated thereby will not, result in any violation of, be in conflict with or constitute a default under any provision of the Constitutional Documents of such Investor, or any applicable Laws.
4.4
No Insolvency. No proceedings for the bankruptcy, insolvency, winding up, liquidation or reorganization of such Investor have commenced, are pending, or threatened against such Investor which could reasonably be expected in any manner to challenge or seek to prevent, enjoin or materially delay any of the transactions contemplated by this Agreement.
4.5
Accredited Investor. Such Investor is an “accredited investor,” as such term is defined in Rule 501(a) of Regulation D of the Securities Act. Such Investor has the knowledge, sophistication and experience necessary to make an investment decision in the purchase of its Subscription Shares and can bear the economic risk of its investment in its Subscription Shares.
4.6
Non-United States Investor. If such Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), such Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for its Subscription Shares or any use of this Agreement, including (a) the legal requirements within its jurisdiction for the purchase of its Subscription Shares, (b) any foreign exchange restrictions applicable to such purchase, (c) any governmental or other consents that may need to be obtained, and (d) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of its Subscription Shares. Such Investor’s subscription and payment for its Subscription Shares and continued beneficial ownership of the of such Subscription Shares or the relevant Conversion Shares will not violate any applicable securities laws or other laws, rules, and regulations of the Investor’s jurisdiction.
4.7
Purchase Entirely for Own Account. The Subscription Shares to be acquired by such Investor will be acquired for investment for such Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person, with respect to any of its Subscription Shares or the relevant Conversion Shares.
4.8
Investment Experience. Such Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company and can protect its own interests. Such Investor has such knowledge, sophistication and experience, including with respect to financial and business matters, necessary to make an investment decision in the purchase of its Subscription Shares and can bear the economic risk of its investment in its Subscription Shares.
4.9
Disclosure of Information. Such Investor has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the
5
offering of the Subscription Shares with the Company’s management. The foregoing, however, does not limit or modify the representations and warranties of the Company in this Agreement or the right of such Investor to rely thereon.
4.10
No Public Market. Such Investor understands that no public market now exists for the Subscription Shares or the Conversion Shares, and that the Company has made no assurances that a public market will ever exist for the Subscription Shares or the Conversion Shares.
4.11
Restricted Securities. Such Investor understands that the Subscription Shares or the Conversion Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein. Such Investor understands that the Subscription Shares are, and the Conversion Shares will be, “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, such Investor must hold its Subscription Shares and Conversion Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Such Investor acknowledges that the Company has no obligation to register or qualify the Shares, or the Conversion Shares into which it may be converted, for resale except as set forth in the Stockholders Agreement. Such Investor further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Subscription Shares or the Conversion Shares, and on requirements relating to the Company which are outside of the Investor’s control, and which the Company is under no obligation and may not be able to satisfy.
4.12
Restrictive Legends. Such Investor understands that the Subscription Shares and any Shares issued in respect of or exchange for the Subscription Shares, may be notated with one or all of the following legends and any legend set forth in, or required by, the other Transaction Documents:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED, UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
4.13
Assignment and Assumption Agreement.
(a)
Upon IMAB’s payment of its Subscription Price to the Company pursuant to this Agreement, the entire Assignment and Assumption Agreement (including, without limitation, the assignment to the Company of all of AffaMed’s right, title, and interest in and to the Assigned Contracts and the assumption by the Company of all of AffaMed’s
6
obligations under the Assigned Contracts, in each case as contemplated under Sections 1.1 and 1.2 of the Assignment and Assumption Agreement) shall have become fully effective.
(b)
AffaMed is not in breach or default under the Assignment and Assumption Agreement and the Direct License Agreement.
(c)
All Consents of any competent Governmental Authority or of any other Person that are required to be obtained by the AffaMed in connection with the consummation of the assignment, assumption, licensing and other transactions contemplated by the Assignment and Assumption Agreement and the Direct License Agreement have been duly obtained and effective as of the Closing.
5.
Conditions of the Investors’ Obligations at Closing.
The obligations of each of the Investors to consummate the Closing under Section 2.2 of this Agreement are subject to the fulfillment, to the reasonable satisfaction of such Investor on or before the Closing, or waiver by such Investor, of the following conditions (collectively, the “Investor Closing Conditions”):
5.1
Representations and Warranties. Except as Disclosed, each of the Company Warranties shall have been true, correct, complete and not misleading in all material respects as of the date hereof and on and as of the Closing with the same effect as though such Company Warranties had been made on and as of the Closing Date, except in either case for those Company Warranties that address matters only as of a particular date, which Company Warranties shall have been true, correct, complete and not misleading as of such particular date.
5.2
Performance. The Company shall have performed and complied with in all material respects all covenants and obligations contained in the Transaction Documents that are required to be performed or complied with by it on or before the Closing.
5.3
Authorizations. All Consents of any competent Governmental Authority or of any other Person that are required to be obtained by the Company in connection with the consummation of the transactions contemplated by the Transaction Documents shall have been duly obtained and effective as of the Closing.
5.4
Proceedings and Documents. All corporate and other proceedings in connection with the transactions to be completed at the Closing, shall have been completed in form and substance reasonably satisfactory to such Investor.
5.5
Transaction Documents. Each of the parties to the Transaction Documents, other than the Investors, shall have executed and delivered such Transaction Documents.
5.6
Restated Certificate. The Company shall have filed the Restated Certificate with the Secretary of State of the State of Delaware on or prior to the Closing, which shall continue to be in full force and effect as of the Closing.
5.7
No Prohibition. No provision of any applicable Law shall prohibit the consummation of any transactions contemplated by the Transaction Documents.
5.8
Assignment and Assumption Agreement and Direct License Agreement. The Direct License Agreement shall have become fully effective as of the Closing, and the
7
Assignment and Assumption Agreement (including, without limitation, the assignment to the Company of all of AffaMed’s right, title, and interest in and to the Assigned Contracts and the assumption by the Company of all of AffaMed’s obligations under the Assigned Contracts, in each case as contemplated under Sections 1.1 and 1.2 of the Assignment and Assumption Agreement) shall have become fully effective upon IMAB’s payment of its Subscription Price to the Company pursuant to this Agreement, and no party to these agreements shall have been in breach or default thereunder.
6.
Conditions of the Company’s Obligations at Closing.
The obligations of the Company to consummate the Closing under Section 2.2 of this Agreement with respect to an Investor, unless otherwise waived in writing by the Company, are subject to the fulfillment on or before the Closing of each of the following conditions (collectively, the “Company Closing Conditions”):
6.1
Representations and Warranties. The representations and warranties of such Investor contained in Section 4 shall have been true, correct, complete and not misleading in all material respects as of the date hereof and on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing Date, except in either case for those representations and warranties that address matters only as of a particular date, which representations will have been true, correct, complete and not misleading as of such particular date.
6.2
Performance. Such Investor shall have performed and complied with in all material respects all covenants and obligations contained in this Agreement that are required to be performed or complied with by such Investor on or before the Closing.
6.3
Execution of the Transaction Documents. Such Investor shall have executed and delivered to the Company the Transaction Documents to which it is a party.
6.4
Restated Certificate. The Restated Certificate shall have been filed with the Secretary of State of the State of Delaware and shall continue to be in full force and effect as of the Closing.
7.
Termination.
7.1
Termination of Agreement. This Agreement may be terminated prior to the Closing:
(a)
by mutual written consent of the Parties,
(b)
by any Party if the Closing has not been consummated on or prior to the thirtieth (30th) Business Day (the “Long Stop Date”) after the date hereof; provided, that if the failure of the Closing to occur by the Long Stop Date is due to a breach by any Party hereunder, the right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to such breaching Party, or
(c)
by any Party upon written notice to the other Parties if there has been a material misrepresentation or material breach of a covenant or agreement contained in this Agreement on the part of any other Party, and such breach, if curable, has not been cured within
8
fourteen (14) days of such notice; provided however that the breaching Party shall not have the right to terminate this Agreement in accordance herewith.
7.2
Effect of Termination. If this Agreement is terminated pursuant to the provision of Section 7.1, this Agreement will be of no further force or effect among the Parties; provided that, (a) no Party shall be relieved of any liability for a breach of this Agreement or for any misrepresentation hereunder prior to such termination, nor shall such termination be deemed to constitute a waiver of any available remedy (including specific performance if available) for any such breach or misrepresentation, and (b) Sections 1, 7.2 and 8 shall survive the termination of this Agreement and shall continue in full force and effect.
8.
Miscellaneous.
8.1
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Parties whose rights or obligations hereunder are affected by such terms and conditions. This Agreement and the rights and obligations therein may not be assigned by any Party without the prior written consent of the other Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.2
Governing Law. This Agreement shall be governed by and construed under the Laws of the State of Delaware, without regard to principles of conflict of Laws thereunder.
8.3
Dispute Resolution.
(a)
Any dispute, controversy, difference or claim arising out of or relating to this Agreement (including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it) shall be referred to arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted (the “HKIAC Rules”).
(b)
The tribunal shall consist of three (3) arbitrators (the “Tribunal”). Each of the claimant or group of claimants and the respondent or group of respondents shall designate one (1) arbitrator and HKIAC shall appoint the third (3rd) arbitrator.
(c)
The seat of such arbitration shall be Hong Kong.
(d)
The arbitral proceedings shall be conducted in English. All documents submitted in connection with the proceedings shall be in the English language, or if in another language, accompanied by an English translation.
(e)
The award of the Tribunal shall be final and binding upon the Parties. Judgment upon the award may be entered by any court having jurisdiction of the award or having jurisdiction over the relevant party or its assets.
8.4
Notices. Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, electronic mail or similar means to the address of the relevant Party as
9
shown under Schedule V (or at such other address as such Party may designate by fifteen (15) days’ advance written notice to the other Parties to this Agreement given in accordance with this Section 8.4). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (a) delivery (or when delivery is refused) and (b) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day.
8.5
Consent to Electronic Notice. Each of the Investors consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic mail pursuant to Section 232 of the DGCL (or any successor thereto) at the e-mail address as shown under Schedule V, as updated from time to time by notice to the Company. To the extent that any notice given by means of electronic mail is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected e-mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party agrees to promptly notify the other parties of any change in its e-mail address, and that failure to do so shall not affect the foregoing.
8.6
Specific Performance. The exercise or partial exercise of any right, power or remedy by any Party will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such Party. Without limiting the foregoing, the Parties hereto acknowledge and agree irreparable harm may occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.
8.7
Fees and Expenses. Irrespective of whether the Closing is effected, each of the Company and the Investors shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement.
8.8
Severability. In the event that any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable Law in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such Law, or, if for any reason it is not deemed so modified, it shall be invalid, illegal, or unenforceable only to the extent of such invalidity, illegality, or limitation on enforceability without affecting the remaining provisions of this Agreement, or the validity, legality, or enforceability of such provision in any other jurisdiction.
8.9
Amendments and Waivers. Any term of this Agreement may be amended only with the written consent of each of the Parties. Any amendment effected in accordance with this paragraph shall be binding upon each of the Parties. Notwithstanding the foregoing, the observance of any term of this Agreement may be waived (either generally or in a particular
10
instance and either retroactively or prospectively) only with the written consent of the Party against whom such waiver is sought.
8.10
No Waiver. Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy power hereunder at any one or more times be deemed a waiver or relinquishment of such right, power or remedy at any other time or times.
8.11
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.
8.12
No Presumption. The Parties acknowledge that any applicable Law that would require interpretation of any claimed ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any Party or its counsel.
8.13
Headings and Subtitles; Interpretation
(a)
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
(b)
In this Agreement, unless a provision hereof expressly provides otherwise:
(i)
the term “or” is not exclusive;
(ii)
words in the singular include the plural, and words in the plural include the singular;
(iii)
the terms “herein”, “hereof”, and other similar words refer to this Agreement as a whole and not to any particular section, subsection, paragraph, clause, or other subdivision;
(iv)
all references to “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation”;
(v)
the masculine, feminine, and neuter genders will each be deemed to include the others;
(vi)
the terms “shall”, “will”, and “agrees” are mandatory, and the term “may” is permissive;
11
(vii)
the term “day” shall mean “calendar day”, and “month” shall mean calendar month;
(viii)
all references in this Agreement to designated “Sections” and other subdivisions are to the designated Sections and other subdivisions of the body of this Agreement;
(ix)
all references in this Agreement to designated Schedules, Exhibits and Appendices are to the Schedules, Exhibits and Appendices attached to this Agreement;
(x)
the phrase “directly or indirectly” shall mean directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning;
(xi)
references to laws or Law include any such law modifying, reenacting, extending or made pursuant to the same or which is modified, reenacted, or extended by the same or pursuant to which the same is made;
(xii)
each representation, warranty, agreement, and covenant contained herein will have independent significance, regardless of whether also addressed by a different or more specific representation, warranty, agreement, or covenant;
(xiii)
all accounting terms not otherwise defined herein have the meanings assigned under the applicable accounting principle or policy;
(xiv)
pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms;
(xv)
references to this Agreement, any other Transaction Documents and any other document shall be construed as references to such document as the same may be amended, supplemented or novated from time to time;
(xvi)
all references to dollars or to “US$” are to currency of the United States of America (and shall be deemed to include reference to the equivalent amount in other currencies); and
(xvii)
any reference to writing or written shall include typewriting, printing, lithography, photography, email message and facsimile message and other modes of reproducing words in a legible and non-transitory form.
8.14
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and e-mailed copies of signatures or electronic signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement.
8.15
Confidentiality. The terms and conditions of the Transaction Documents (collectively, the “Confidential Information”), including their existence and the subscription of Subscription Shares, shall be considered confidential information and, without the written approval of all Parties, shall not be disclosed by any press release or public announcement, or otherwise by any of the Parties to any other Person, except that:
12
(a)
such information is in the public domain other than through breach of Section 8.15;
(b)
each Party, as appropriate, may disclose any of the Confidential Information to current or bona fide prospective investors, prospective permitted transferees, employees, investment bankers, lenders, accountants and attorneys, in each case only where such Persons are under appropriate nondisclosure obligations;
(c)
each of the Investors may disclose any of the Confidential Information to its fund manager, the employees, advisors and counsels so long as such Persons are under appropriate nondisclosure obligations;
(d)
each of the Investors may disclose any of the Confidential Information to its Affiliates (for this purpose only, an Affiliate of the Investor shall be deemed to include any investment fund and the Affiliates and limited partners of such investment fund);
(e)
any Party is requested or becomes legally compelled (including without limitation, pursuant to securities Laws) to disclose the existence or content of any of the Confidential Information; provided that such Party shall promptly provide the other Parties with written notice of that fact so that such other Parties may seek a protective order, confidential treatment or other appropriate remedy and in any event shall furnish only that portion of the information that is legally required and shall exercise reasonable efforts to obtain reliable assurance that confidential treatment will be accorded such information; and
(f)
the disclosure is required to vest the full benefit of this Agreement in any Party.
8.16
Third Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the Parties hereto and their permitted successors and assigns any rights or remedies under or by reason of this Agreement. The rights of the Parties to terminate, rescind or agree to any variation, waiver or settlement under this Agreement are not subject to the consent of any other Person.
8.17
Entire Agreement. This Agreement and the Transaction Documents, together with all schedules and exhibits hereto and thereto, constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof and thereof, and supersede all other agreements between or among any of the Parties with respect to the subject matters hereof and thereof.
[The remainder of this page has been left intentionally blank]
13
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
THE COMPANY:
VISARA, INC.
By: _/s/ Xi-Yong Fu_______________
Name: Xi-Yong Fu
Title: Director
SIGNATURE PAGE TO SERIES A PREFERRED STOCK SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
INVESTOR:
I-MAB
By: _/s/ Xi-Yong Fu_______________
Name: Xi-Yong Fu
Title: Director
SIGNATURE PAGE TO SERIES A PREFERRED STOCK SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
INVESTOR:
AFFAMED THERAPEUTICS (HK) LIMITED
By: _/s/ Ting Liu_______________
Name: Ting Liu
Title: President
SIGNATURE PAGE TO SERIES A PREFERRED STOCK SUBSCRIPTION AGREEMENT
Schedule I
LIST OF SERIES A INVESTORS
Schedule II
CAPITALIZATION TABLE
Part 1
Fully Diluted Capitalization Immediately prior to the Closing
Part 2
Fully Diluted Capitalization Immediately after the Closing
Schedule III
DEFINITION
“Action”
|
shall mean any charge, claim, action, complaint, petition, investigation, appeal, suit, litigation, grievance, inquiry or other proceeding, whether administrative, civil, regulatory or criminal, whether at law or in equity, or otherwise under any applicable Law, and whether or not before any mediator, arbitrator or Governmental Authority. |
“AffaMed” |
shall have the meaning ascribed to it in the preamble. |
“Affiliate”
|
shall mean, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. In the case of the Investor, the term “Affiliate” also includes investment vehicles sponsored, managed and/or advised by such Investor or its Affiliate(s). Notwithstanding the foregoing, (x) the Group Company’s Affiliate shall exclude the private equity funds managed or advised by CBC Group Investment Management, Ltd. and its Affiliates, and their respective portfolio companies, and (y) for the purpose of this Agreement, except as otherwise expressly provided under this Agreement, no Group Company shall be deemed to be an Affiliate of a Stockholder and vice versa. |
“Agreed Form” |
shall mean, in relation to any document, the form of that document which has been confirmed for the purpose of identification by or on behalf of the Investors and the Company. |
“Agreement” |
shall have the meaning ascribed to it in the preamble. |
“AM712 License Assignment” |
shall have the meaning ascribed to it in Section 2.2. |
“Approved Business Plan and Budget” |
shall mean the business plan and budget of the Company and/or its Subsidiaries as approved by the Board (including the approval of a majority of the Preferred Directors pursuant to the Stockholders Agreement) from time to time. |
“AskGene” |
shall have the meaning ascribed to it in the recitals. |
“Assigned Contracts” |
shall mean (a) the Exclusive License Agreement dated November 6, 2021 by and among AskGene and AffaMed; (b) the Safety Data Exchange Agreement dated August 25, 2022 by and among AskGene and AffaMed. |
“Assignment and Assumption Agreement” |
shall have the meaning ascribed to it in the recitals. |
“Board” or “Board of Directors” |
shall mean the board of directors of the Company. |
“Business Day” |
shall mean any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by applicable Law to be closed in Hong Kong, the State of Delaware, the State of New York, the PRC or Singapore. |
“Closing” |
shall have the meaning ascribed to it in Section 2.2. |
“Closing Conditions” |
shall mean the Investor Closing Conditions and Company Closing Conditions. |
“Closing Date” |
shall mean the date on which the Closing takes place pursuant to this Agreement. |
“Common Shares” |
shall mean the shares of common stock of the Company. |
“Company Closing Conditions” |
shall have the meaning ascribed to it in Section 6. |
“Company Warranties” |
shall have the meaning ascribed to it in Section 3. |
“Company” |
shall have the meaning ascribed to it in the preamble. |
“Confidential Information” |
shall have the meaning ascribed to it in Section 8.15. |
“Consent” |
shall mean any consent, approval, authorization, release, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority. |
“Constitutional Documents” |
shall mean, with respect to a particular legal entity, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such entity. Unless the context provides otherwise, Constitutional Documents hereunder refer to the Constitutional Documents of the Company, which as of the Closing consist of the Restated Certificate and the Restated By-laws. |
“Contract” |
shall mean a legally binding written contract, agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, or purchase order. |
“Control”
|
of a given Person shall mean, the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing. |
“Conversion Shares” |
shall mean Common Shares issuable upon conversion of any Shares. |
“DGCL” |
shall have the meaning ascribed to it in Section 8.5. |
“Direct License Agreement” |
shall have the meaning ascribed to it in the recitals. |
“Director” |
shall mean a director for the time being of the Company including, where applicable, any alternate Director, and “Directors” shall be construed accordingly. |
“Disclosed” |
shall mean any fact, matter or circumstance fairly disclosed during the process of the due diligence on the Company, the Licensed Antibodies and Licensed Products or in the Transaction Documents, whether generally or specifically, and in such manner and with sufficient details for a reasonable investor to identify the nature and scope of the fact, matter or circumstance disclosed, and “Disclose”, “Disclosing” and “Disclosure” shall be construed accordingly. |
“Equity Securities”
|
shall mean with respect to any Person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing. Unless the context provides otherwise, the Equity Securities hereunder refer to the Equity Securities of the Company. |
“ESOP Pool” |
shall have the meaning ascribed to it in the recitals. |
“ESOP” |
shall mean any employee share option plan, equity-based employee incentive, purchase or participation arrangement, contract, or plan or any benefit plan of any Group Company for |
|
the benefit of any employee, officer, director, contract labor, advisor or consultant of any Group Company, in each case adopted by the Board in accordance with the Constitutional Documents and the Stockholders Agreement from time to time. |
“Existing Common Share” |
shall have the meaning ascribed to it in the recitals. |
“Governmental Authority” |
shall mean any government of any nation, federation, province or state or any other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of government, including any government authority, agency, department, board, commission or instrumentality of any country, or any political subdivision thereof, and any court, tribunal or arbitrator. |
“Governmental Order” |
shall mean any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority. |
“Group Company”
|
shall mean any of the Company and any Subsidiaries of the Company, and “Group” refers to all of the Group Companies collectively. |
“HKIAC” |
shall have the meaning ascribed to it in Section 8.3(a). |
“HKIAC Rules” |
shall have the meaning ascribed to it in Section 8.3(a). |
“Hong Kong” |
shall mean the Hong Kong Special Administrative Region of the People’s Republic of China. |
“IMAB” |
shall have the meaning ascribed to it in the preamble. |
“IMAB Investment” |
shall have the meaning ascribed to it in the recitals. |
“Investor” or “Investors” |
shall have the meaning ascribed to it in the preamble. |
“Investor Closing Conditions” |
shall have the meaning ascribed to it in Section 5. |
“Knowledge” |
shall mean, with respect to the Company, the actual knowledge of the Directors of the Company as of the date hereof. |
“Law” or “Laws” |
shall mean any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement, or other |
|
governmental restriction, in each case as amended, and any and all applicable Governmental Orders. |
“Lien” |
shall mean any claim, mortgage, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by Contract, understanding, law, equity or otherwise. |
“Long Stop Date” |
shall have the meaning ascribed to it in Section 7.1(b). |
“Material Contract” |
shall have the meaning ascribed to it in Paragraph 7(a) of Schedule IV. |
“Party” or “Parties” |
shall have the meaning ascribed to it in the preamble. |
“Permitted Liens”
|
shall mean (a) Liens for Taxes not yet delinquent or the validity of which are being contested in good faith and for which there are adequate reserves on the applicable financial statements, (b) Liens incurred in the ordinary course of business, which (x) do not individually or in the aggregate materially detract from the value, use, or transferability of the assets that are subject to such Liens, and (y) were not incurred in connection with the borrowing of money, and (c) Liens created under the Transaction Documents. |
“Person” |
shall mean any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity. |
“Preferred Director” |
shall mean any Director designated by any Investor, and collectively the “Preferred Directors”. |
“Proceeds” |
shall have the meaning ascribed to it in Section 2.3. |
“Required Governmental Consent” |
shall have the meaning ascribed to it in Paragraph 5(a) of Schedule IV. |
“Restated By-Laws” |
shall mean the amended and restated by-laws of the Company to be adopted on or before the Closing in the Agreed Form. |
“Restated Certificate” |
shall mean the amended and restated certificate of incorporation of the Company to be adopted on or before the Closing in the Agreed Form. |
“Securities Act” |
shall mean the Securities Act of 1933 of the United States of America, as amended, and all rules and regulations promulgated thereunder. |
“Series A Preferred Shares” |
shall mean the shares of Series A Preferred Stock. |
“Series A Preferred Stock” or “Preferred Stock” |
shall mean the series A preferred stock of the Company, with the rights and privileges attached to such stock as set out in the Constitutional Documents of the Company. |
“Shares” |
shall mean the shares of the Company’s stock of any or all series or classes as the context may require, and “Share” shall mean any of them. |
“Stockholder” |
shall mean any holder of a Share of the Company for the time being. |
“Stockholders Agreement” |
shall mean the Stockholders Agreement to be entered into by and among the parties named therein on or before the Closing, which shall be in substantially the form as set forth in Exhibit A. |
“Subscription Price Per Share” |
shall have the meaning ascribed to it in Section 2.1. |
“Subscription Price” |
shall have the meaning ascribed to it in Section 2.1. |
“Subscription Shares” |
shall have the meaning ascribed to it in Section 2.1. |
“Subsidiary” |
shall mean, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person. |
“Tax” |
shall mean any form of taxation, tax liability, levy, duty, charge, contribution, or withholding of whatever nature (including any related fine, penalty, surcharge or interest) imposed, collected or assessed by, or payable to, any Governmental Authority exercising a fiscal, revenue, customs or excise function. |
“Transaction Documents” |
shall mean this Agreement, the Stockholders Agreement, the Constitutional Documents, the Assignment and Assumption Agreement, the Direct License Agreement and each of the other agreements and documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing. |
“Tribunal” |
shall have the meaning ascribed to it in Section 8.3(b). |
Schedule IV
REPRESENTATION AND WARRANTIES OF THE COMPANY
1
Organization, Good Standing and Qualification.
The Company is duly organized, validly existing and in good standing (or equivalent status in the relevant jurisdiction) under, and by virtue of, the Laws of the place of its incorporation or establishment and has all requisite power and authority to own its properties and assets and to carry on its business as presently being conducted and as proposed to be conducted.
2
Capitalization and Voting Rights.
(a)
Company. The authorized share capital of the Company as of the date hereof consists of a total of 50,000,000 authorized Common Shares, 1 of which is issued and outstanding.
(b)
Capitalization. Part I of Schedule II sets forth the capitalization table of the Company as of immediately prior to the Closing reflecting all then outstanding and authorized Equity Securities of the Company, and the record holders thereof.
(c)
No Other Securities. Except for (i) the conversion privileges of the Series A Preferred Shares, (ii) certain rights provided in the Constitutional Documents of the Company as currently in effect, (iii) certain rights provided in the Constitutional Documents and the Stockholders Agreement, and (iv) shares to be issued upon exercise of Equity Securities granted under the ESOP, no Equity Securities of the Company are subject to any preemptive rights, rights of first refusal (except to the extent provided by applicable Law) or other rights to purchase such Equity Securities, and the Company is not a party or subject to any Contract that affects or relates to the voting or giving of written consents with respect to, or the right to cause the redemption, or repurchase of, any Equity Security of the Company. Except as set forth in the Transaction Documents, the Company has not granted any registration rights or information rights to any other Person, nor is the Company obligated to list, any of its Equity Securities on any securities exchange. Except as contemplated under the Transaction Documents, there are no voting or similar agreements which relate to the share capital of any Company.
(d)
Issuance and Status. All presently outstanding Equity Securities of the Company were duly and validly issued (or subscribed for) in compliance with all applicable Law, preemptive rights of any Person, and applicable Contracts. The authorized and issued share capital of the Company is fully paid and non-assessable and free of any and all Liens (except for any Liens under the Stockholders Agreement, the Constitutional Documents and applicable Laws).
3
Authorization.
The Company has all requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to carry out and perform its
obligations thereunder. All actions on the part of Company necessary for its authorization, execution and delivery of the Transaction Documents and the performance by it of all its obligations thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Subscription Shares and the Conversion Shares, have been taken or will be taken at or prior to the Closing. Each Transaction Document to which the Company is a party has been duly executed and delivered by the Company as of the Closing and (assuming such Transaction Document has been duly executed and delivered by all the other parties thereto) constitutes valid and legally binding obligations of Company, enforceable against the Company in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.
4
Valid Issuance of Shares.
The Subscription Shares, when issued and paid for in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable, free from any Liens (except for any Liens under applicable Law, the Constitutional Documents and the Stockholders Agreement) as of the Closing. The Conversion Shares will be reserved for issuance as of the Closing and, upon issuance in accordance with the terms of the Constitutional Documents, will be duly and validly issued, fully paid and non-assessable, free from any Liens (except for any restrictions on transfer under applicable securities Laws and under the Stockholders Agreement). The issuance of the Subscription Shares and the Conversion Shares is not subject to any preemptive rights, rights of first refusal or similar rights (which, if any, have been waived as of the Closing). Subject in part to the accuracy of the Investors’ representations set forth in Section 4 of this Agreement, the offer, sale and issuance of the Subscription Shares are, and the issuance of the Conversion Shares will be, exempt from the qualification, registration and prospectus delivery requirements of the Securities Act and any other applicable securities Laws.
5
Consents; No Conflicts.
(a)
Except for the filing of the Restated Certificate, which will have been filed as of the Closing, All Consents from or with any Governmental Authority (each a “Required Governmental Consent”) or any other Person required in connection with (i) the valid execution, delivery and performance by the Company of the Transaction Documents to which the Company is a party, (ii) the consummation by the Company of the transactions contemplated by the Transaction Documents to which the Company is a party, and (iii) the due and proper establishment and operations of the Company as presently being conducted, have been duly obtained or completed (as applicable) and are in full force and effect as of the Closing Date. Each Required Governmental Consent is in full force and effect as of the Closing Date.
(b)
The execution, delivery and performance by the Company of each Transaction Document to which it is a party and the consummation by the Company of the transactions contemplated thereby, and the business of the Company, will not, to the Knowledge of the Company, (i) result in any violation of, be in conflict with, or constitute a default under, any Governmental Order, any provision of
the Constitutional Documents of the Company or any applicable Law, or (ii) result in the creation of any Lien upon any of the material properties or assets of the Company other than Permitted Liens.
6
No Insolvency.
No proceedings have been commenced or are pending for the bankruptcy, insolvency, winding up, liquidation or reorganization of the Company and the Company is not bankrupt or insolvent.
7
Assignment and Assumption Agreement.
(a)
The Company has duly executed the Assignment and Assumption Agreement with AffaMed on or prior to the date of this Agreement (the “Material Contract”).
(b)
As of the Closing Date, the Material Contract is a valid and binding agreement of the Company, the performance by the Company of which does not and will not violate any applicable Law or Governmental Order, and, subject to the terms of the Material Contract, is in full force and effect and enforceable against the parties thereto. The Company has not given notice (whether or not written) that it intends to terminate the Material Contract or that any other party thereto has breached, violated or defaulted under the Material Contract in any material respect. The Company has not received any notice (whether or not written) that it has breached, violated or defaulted under the Material Contract in any material respect or that any other party thereto intends to terminate the Material Contract.
8
Intellectual Property.
Upon the completion of the Closing (including IMAB’s payment of its Subscription Price to the Company), the Company will obtain (a) all of AffaMed’s right, title, and interest in and to the Assigned Contracts pursuant to the terms of the Assignment and Assumption Agreement, and (b) the exclusive license to develop, manufacture, and commercialize the Licensed Antibodies and Licensed Products in the Field in the Territory pursuant to the Direct License Agreement.
PRIVATE AND CONFIDENTIAL
Schedule V
ADDRESS FOR NOTICES
If to the Company:
Visara, Inc.
c/o I-MAB
2440 Research Boulevard, Suite 400, Rockville, MD 20850
Attention: [***]
[***]
With a copy to:
Visara, Inc.
c/o ABio-X Holdings, Inc.
117 Kendrick Street, Suite 400
Needham, MA 02494
Attention: [***]
[***]
Copy: [***]
If to IMAB:
Address: 2440 Research Boulevard, Suite 400, Rockville, MD 20850
Attention: [***]
Email: [***]
If to AffaMed:
Address: Unit 2002, 20/F, Nexxus Building, No. 41 Connaught Road, Central, Hong Kong S.A.R., China
Attention: [***]
Email: [***]
1
Exhibit A
STOCKHOLDERS AGREEMENT
(attached)
|
- 2 - |
|
STOCKHOLDERS AGREEMENT1
This STOCKHOLDERS AGREEMENT (this “Agreement”) is made and entered into on [●], 2025 by and among:
1.
VISARA, INC., a corporation organized and existing under the laws of the State of Delaware, the United States, with a registered office at 1209 Orange Street, City of Wilmington, County of New Castle, 19801 (the “Company”);
2.
I-MAB, a company incorporated with limited liability under the laws of the Cayman Islands, with a registered address at Vistra (Cayman) Limited, P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands (“IMAB”); and
3.
AFFAMED THERAPEUTICS (HK) LIMITED, a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK (“AffaMed”, together with IMAB, the “Investors”, and each an “Investor”).
Each of the parties to this Agreement is referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
A.
The Company and the Investors entered into a Series A Preferred Stock Subscription Agreement dated [●], 2025 (the “Subscription Agreement”), pursuant to which the Investors agreed to subscribe for certain shares of the Series A Preferred Stock of the Company on the terms and conditions set forth in the Subscription Agreement (the “Series A Financing”).
B.
In connection with the consummation of the Series A Financing, the Parties desire to enter into this Agreement in order to set forth the rights and obligations of the Parties in the Company and governance matters of the Company as set forth below.
WITNESSETH
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound hereto hereby agree as follows:
1.
Definitions
Unless the context otherwise requires, the capitalized terms in this Agreement shall have the meanings ascribed to them in Schedule I.
2.
BOARD OF DIRECTORS
2.1
Board of the Company
1 Note to Draft: Subject to advice of the Delaware counsel and agreement of the Parties, certain provisions under this draft Stockholders Agreement will be removed to the Restated Certificate or Restated By-Laws.
|
- 3 - |
|
2.1.1
The Board shall be responsible for the management of the Company and shall consist of up to five (5) members, of which:
(a)
one (1) Director shall be the executive chairman of the Board as designated by the Board (who shall initially be Emmett Cunningham, until his earlier death, bankruptcy, insanity, resignation, removal by the Board or being prohibited by applicable Laws to serve as a Director of the Company);
(b)
one (1) Director shall be Sean Wuxiong Cao (until his earlier death, bankruptcy, insanity, resignation or being prohibited by applicable Laws to serve as a Director of the Company); and
(c)
the Preferred Stockholders shall be entitled to appoint, remove and replace three (3) individuals as Directors (collectively, the “Preferred Directors”, and each a “Preferred Director”), among which:
(i)
for as long as IMAB’s Ownership Percentage (on an as-converted basis) is higher than five percent (5%) and it holds at least fifty percent (50%) of the Series A Preferred Shares subscribed by it at the Closing (as adjusted for any stock dividend, stock split, combination of stock, reorganization, recapitalization, reclassification or other similar event effected after the date hereof), IMAB shall be entitled to appoint, remove and replace two (2) Directors, and one of which shall initially be Xi-Yong Fu; and
(ii)
for as long as AffaMed’s Ownership Percentage (on an as-converted basis) is higher than five percent (5%) and it holds at least fifty percents (50%) of the Series A Preferred Shares subscribed by it at the Closing (as adjusted for any stock dividend, stock split, combination of stock, reorganization, recapitalization, reclassification or other similar event effected after the date hereof), AffaMed shall be entitled to appoint, remove and replace one (1) Director, who shall initially be Ting Liu.
2.1.2
To the extent required by applicable Laws, the Stockholders shall exercise their voting rights to ensure that the composition of the Board shall at all times be in compliance with Section 2.1.1.
2.1.3
The quorum for a meeting of the Board shall be the majority of the Directors, including the Majority Preferred Directors. If, at the time of a scheduled meeting, the quorum was not met, then the said meeting shall be rescheduled to the fifth (5th) Business Day after the scheduled time of meeting (the “Adjourned Meeting”), and the chairman of the Board shall notify all Directors of such Adjourned Meeting. At the Adjourned Meeting, any and all present Director(s) shall constitute the quorum for the meeting of the Board.
2.1.4
To the extent that any Preferred Stockholder is not entitled to appoint a Director pursuant to Section 2.1.1, such Preferred Stockholder shall have the right to
|
- 4 - |
|
appoint one Person to attend in a non-voting observer capacity all meetings of the Board of Directors, provided that the Company may exclude any observer from attending any meeting if the Board determines in good faith that such exclusion is necessary to (i) preserve attorney-client privilege, or (ii) protect confidential, proprietary or competition-sensitive information of the Group.
2.2
Removal and Replacement of Directors. Each Investor may remove any Director designated by it and designate a new Director as successor by notice in writing to the Company and other Stockholder(s). The Stockholders shall exercise the Stockholders’ voting rights and such other action as is necessary to remove such Director and to appoint the new Director as the successor. At the time (a) of the completion of any sale, assignment, transfer or other disposition of all of the Shares held by a Stockholder, or (ii) when such Stockholder ceases to be entitled to appoint a Director pursuant to Section 2.1.1, such Stockholder shall procure the resignation of each Director designated by it.
2.3
Board Decisions
2.3.1
Each Stockholder shall procure that the Directors appointed by it shall duly perform their duties at the Board of Directors in accordance with and so as to give effect to the terms of this Agreement.
2.3.2
Each Stockholder shall procure the director nominated by it to the board of each other Group Company (if any) shall exercise his/her voting powers, subject to applicable fiduciary duties, in a manner consistent with the decisions of the Board.
2.4
Proceedings of Directors
2.4.1
Meetings of the Board shall be held at such times and at such place as the Board may from time to time determine, and in any event held at least once every quarter. No Board meeting shall be convened on less than ten (10) Business Day’s prior notice, but Board meetings may be convened by giving not less than twenty-four (24) hours’ notice if all of the Directors agree to shorter notice.
2.4.2
Each notice of a Board meeting shall specify a reasonably detailed agenda, be accompanied by relevant documents, and be sent by courier, facsimile transmission or email.
2.4.3
The Directors may participate in a meeting of the Board or of such committee thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. A Director participating in a meeting pursuant to this provision shall be deemed to be present in person at such meeting.
2.4.4
Each Director may appoint one alternate at any time to act on his or her behalf. An alternate Director may receive notice of all meetings of the Board, to attend and vote at any such meeting at which the Director appointing him or her is not personally present and at the meeting to exercise and discharge all the functions, powers and duties of his or her appointer as a Director. An alternate Director
|
- 5 - |
|
shall automatically vacate his or her office as an alternate Director if the Director who appointed him or her ceases to be a Director.
2.5
Board Resolutions
2.5.1
Save as provided under Section 3.1, all resolutions of the Board shall, unless otherwise required by Laws, be made by the approval of a simple majority of the Directors attending the meeting of the Board.
2.5.2
A resolution in writing signed by all the Directors shall be valid as if it had been passed by the Directors in a duly convened and quorate Board meeting.
2.6
Directors’ Expenses. The Company shall reimburse the reasonable out-of-pocket expenses (including travel and accommodation expenses) incurred by the Directors in connection with attending meetings of the Board upon presentation of the relevant receipts.
2.7
Governance of Subsidiaries
2.7.1
IMAB is entitled to require that the board of each Subsidiary of the Company shall comprise such number and composition of directors as is consistent with the Board.
2.7.2
As soon as reasonably practicable after the delivery by the IMAB of a written notice to the Company containing the request provided in Section 2.7.1 with respect to any Subsidiary of the Company, such Subsidiary will insert appropriate provisions into its Constitutional Documents and adopt all other necessary measures to ensure that its board shall comprise such number and composition of directors as is consistent with the Board.
3.
Reserved Matters
3.1
Board Reserved Matters. Unless otherwise expressly specified in this Agreement, for so long as the Preferred Stockholders are entitled to designate and have designated at least one (1) Preferred Director pursuant to Section 2.1.1, the Company shall not, and shall procure that none of the other Group Companies shall, take any action (whether in a single transaction or a series of transactions, whether directly or indirectly, and whether or not by amendment, merger, consolidation, scheme of arrangement, amalgamation, or otherwise) that effects or approves any of the matters or transactions set forth below (excluding the transactions consummated pursuant to the AffaMed Anti-Dilution Protection; each, a “Board Reserved Matter”) without the prior approval by the majority of the Board including the prior approval of the Majority Preferred Directors (and, in respect of the matter specified in Section 3.1.6, without the prior approval by the two-thirds (2/3) of the members of the Board, including the two-thirds (2/3) of the Preferred Directors), and any such Board Reserved Matter entered into without such approval shall be null and void ab initio, and of no force or effect:
3.1.1
incurring any indebtedness in excess of US$1,000,000, either individually in a single transaction or in the aggregate in a series of transactions (other than equipment leases, bank lines of credit or trade payables incurred in the ordinary course of business of the Group);
|
- 6 - |
|
3.1.2
changing the principal business of the Group;
3.1.3
hiring or terminating any C-level officer;
3.1.4
any sale, exclusive license, or transfer of material Intellectual Property or the entry into a material strategic partnership pursuant to which the Group is obligated to make one or more upfront payments in excess of US$1,000,000 or aggregated total payments in excess of US$5,000,000;
3.1.5
the adoption or approval of any business plan and budget of the Company and/or its Subsidiaries or any amendment thereto;
3.1.6
authorizing or issuing any Equity Securities, of which the per Share price (on an as-converted and fully-diluted basis) being lower than the Series A Issue Price (as adjusted for any stock dividend, stock split, combination of stock, reorganization, recapitalization, reclassification or other similar event); and
3.1.7
any action by the Group Companies to authorize, approve or enter into any agreement or commitment with respect to any action listed above.
3.2
Stockholders Reserved Matters. The Company shall not, and shall procure that none of the other Group Companies shall, take any action (whether in a single transaction or a series of transactions, whether directly or indirectly, and whether or not by amendment, merger, consolidation, scheme of arrangement, amalgamation, or otherwise) that effects or approves any of the matters or transactions set forth below (excluding the transactions consummated pursuant to the AffaMed Anti-Dilution Protection; each, a “Stockholder Reserved Matter”) without (in addition to any other vote required by applicable Laws or Constitutional Documents) the written consent or affirmative vote of the holders of at least a majority of the Series A Preferred Shares, and any such Stockholder Reserved Matter entered into without such consent or vote shall be null and void ab initio, and of no force or effect:
3.2.1
any proposal or consent to any proceeding seeking bankruptcy, dissolution, liquidation, insolvency or winding up of any Group Company or any arrangement relating thereto;
3.2.2
effecting any merger or consolidation or any other Deemed Liquidation Event;
3.2.3
amending, altering or repealing any provision of Constitutional Documents;
3.2.4
authorizing or issuing any Equity Securities senior to or pari passu with the Series A Preferred Stock;
3.2.5
the adoption of, any amendment to, or the termination of, any ESOP, or any granting of options or issuance of Equity Securities under any ESOP; and
3.2.6
any action by the Group Companies to authorize, approve or enter into any agreement or commitment with respect to any action listed above.
4.
ISSUE OF SHARES
4.1
IMAB Pro Rata Participation Right
|
- 7 - |
|
4.1.1
The Company hereby grants to IMAB the right (but not obligation) to subscribe for the IMAB Pro Rata Share of all the New Securities to be issued by the Company after the Closing Date (the “IMAB Pro Rata Participation Right”).
4.1.2
In the event that the Company proposes to undertake an issuance of New Securities (in a single transaction or a series of related transactions), it shall give to IMAB a prior written notice of its intention to issue New Securities (the “First Participation Notice”), describing the amount and type of New Securities, the price per New Security (the “New Issue Price”) and the general terms upon which the Company proposes to issue such New Securities (the “New Issue Terms”). IMAB shall have the right, by giving written notice (the “First Participation Acceptance Notice”) to the Company within fifteen (15) Business Days (the “First Participation Period”) from the date of receipt of such First Participation Notice, to purchase up to IMAB Pro Rata Share of such New Securities at the New Issue Price and on the New Issue Terms. The First Participation Acceptance Notice shall state the quantity of New Securities to be purchased by IMAB (the “IMAB Accepted New Securities”), which shall not exceed the IMAB Pro Rata Share of the New Securities, and within fifteen (15) Business Days after the date of the First Participation Acceptance Notice, the Company shall issue to IMAB the IMAB Accepted New Securities, free of Encumbrances (except for the Encumbrances set forth under this Agreement or the Constitutional Documents), at the New Issue Price and on the New Issue Terms. If IMAB fails to deliver the First Participation Acceptance Notice within the First Participation Period, then IMAB shall forfeit only the right under this Section 4.1.2 to purchase IMAB Pro Rata Share of such New Securities, but shall not be deemed to forfeit any right with respect to any other subsequent issuance of New Securities.
4.1.3
With respect to any portion of the New Securities that is not to be purchased by IMAB pursuant to Section 4.1.2 (the “Unpurchased New Securities”), the Board shall be entitled to decide to grant all Preferred Stockholders (the “Secondary Pro Rata Participants”) a right (“Secondary Pro Rata Participation Right”) to subscribe for its Secondary Participants Pro Rata Share of the Unpurchased New Securities, or sell to the new investors all Unpurchased New Securities in accordance with Section 4.1.6 below.
4.1.4
If the Board approves the grant of the Secondary Pro Rata Participation Right, the Company shall promptly give written notice (the “Second Participation Notice”) to each Secondary Pro Rata Participant describing the amount and type of the Unpurchased New Securities, the New Issue Price and the New Issue Terms. Each Secondary Pro Rata Participant shall have five (5) Business Days from the date of the Second Participation Notice (the “Second Participation Period”) to notify the Company of its desire to purchase up to its Secondary Participants Pro Rata Share of the Unpurchased New Securities at the New Issue Price and on the New Issue Terms by giving written notice (the “Second Participation Acceptance Notice”) to the Company and stating therein the quantity of New Securities to be purchased by it (which shall not exceed its Secondary Participants Pro Rata Share of the Unpurchased New Securities) (in respect of such Secondary Pro Rata Participant, the “Secondary Participant Accepted New Securities”), and within ten (10) Business Days after the date of
|
- 8 - |
|
the expiry of the Second Participation Period, the Company shall issue to the Secondary Pro Rata Participants who have delivered the Second Participation Acceptance Notice to the Company its Secondary Participant Accepted New Securities, free of Encumbrances (except for the Encumbrances set forth under this Agreement or the Constitutional Documents), at the New Issue Price and on the New Issue Terms. If any Secondary Pro Rata Participant fails to so respond in writing within the Second Participation Period, then such Secondary Pro Rata Participant shall forfeit the right under this Section 4.1.4 to purchase any Unpurchased New Securities, but shall not be deemed to forfeit its right to purchase (A) the New Securities pursuant to the First Participation Notice or (B) any other subsequent issuance of New Securities.
4.1.5
Notwithstanding the foregoing, subject to applicable Laws, each of IMAB and the Secondary Pro Rata Participants shall be entitled to apportion the New Securities to be purchased by it among its Affiliates (for the avoidance of doubt, the Board is entitled to approve the issuance of such apportioned New Securities to such Affiliate, notwithstanding that such Affiliate is a competitor of the Group as determined by the Board), and such Preferred Stockholder shall give prior written notice to the Company.
4.1.6
Upon the expiration of the Second Participation Period (if the Board decides to grant the Secondary Pro Rata Participation Rights to the Secondary Pro Rata Participants) or the First Participation Period (if the Board decides not to grant any Secondary Pro Rata Participation Rights), the Company shall have ninety (90) Business Days thereafter to complete the sale to the third party investors, at the price same or higher than the New Issue Price and upon non-price terms not more favorable to the purchasers thereof than the New Issue Terms, of the portion of the New Securities described in the First Participation Acceptance Notice with respect to which the IMAB Pro Rata Participation Right and the Secondary Pro Rata Participation Rights hereunder were not exercised. In the event that the Company has not issued and sold such New Securities within such ninety (90) Business Days period, then the Company shall not thereafter issue or sell any New Securities without again first offering such New Securities to IMAB and Secondary Pro Rata Participants pursuant to Sections 4.1.1 to 4.1.5.
4.1.7
The covenants in relation to IMAB Pro Rata Participation Right set forth in Section 4.1.1 and Section 4.1.2 shall terminate and be of no further force or effect on the earlier to occur of: (a) the Qualified IPO, and (b) the Share Sale.
4.2
Issue of Additional Shares to AffaMed
4.2.1
Subject to full compliance with Section 4.1 and provisos and assumptions set forth under Section 4.2.2, to the extent that (a) the Company issues any new Shares (other than Shares set forth in paragraphs (a) to (e) of the definition of New Securities) following the Closing Date, and (b) the post-money valuation of the Group immediately after such issuance equals to or exceeds US$60,000,000 while being less than US$70,000,000 (such issuance, the “AffaMed Anti-Dilution Event”), the Company shall, concurrently with the issuance of such new Shares, issue to AffaMed such number of additional Series A Preferred Shares (the “AffaMed Anti-Dilution Shares”) at nil price (save for any taxes arising from the issuance, which should be solely borne by AffaMed)
|
- 9 - |
|
as is necessary for AffaMed to maintain the Ownership Percentage (on an as-converted and fully-diluted basis) at 29.99% (the “AffaMed Anti-Dilution Protection”).
4.2.2
The Parties acknowledge and agree that:
(a)
AffaMed’s entitlement to AffaMed Anti-Dilution Shares under Section 4.2.1 shall lapse and cease to have any effect (and, for the avoidance of doubt, will never be reinstated or re-invoked) upon the earlier occurrence of the following events: (i) the post-money valuation of the Group once becoming higher than US$70,000,000 in any issuance of new Equity Securities by Company for once following the date of this Agreement; and (ii) AffaMed’s Ownership Percentage (on an as-converted basis) equals to or becomes lower than five percent (5%) and it holds less than fifty percents (50%) of the Series A Preferred Shares subscribed by it at the Closing (as adjusted for any stock dividend, stock split, combination of stock, reorganization, recapitalization, reclassification or other similar event effected after the date hereof);
(b)
for the purpose of calculating the amount of the AffaMed Anti-Dilution Shares, the following events shall not be taken into account and shall be deemed having not occurred when calculating the Ownership Percentage of AffaMed (on an as-converted and fully-diluted basis):
(i)
any Transfer by AffaMed of its Equity Securities in the Company; and
(ii)
any issuance of Equity Securities after the Closing Date (other than the new Shares that trigger the AffaMed Anti-Dilution Protection under Section 4.2.1).
4.3
Issue of New Shares to a Third Party
4.3.1
If the Company is to issue any Shares to a Person who is not already a party to this Agreement (“New Stockholder”) in accordance with this Section 4, the Company shall procure the New Stockholder to execute a Deed of Adherence confirming to the other Stockholders that it shall be bound by this Agreement as a Stockholder.
4.3.2
Except as otherwise agreed by the holders of the majority of the Series A Preferred Shares in writing, the Company shall not issue any Shares under any ESOP to a Person who is not already a party to this Agreement, unless such Person shall, together with the Parties, amend and restate this Agreement in the form reasonably satisfactory to the Parties, which shall, amongst others, provide that such Person shall be subject to all the restrictions on Transfer applying to a Common Stockholder hereunder.
5.
TRANSFER OF SHARES
5.1
General
|
- 10 - |
|
5.1.1
Transfer. Any sale of, assignment of, transfer of, creation of any Encumbrances with respect to or otherwise disposal of, whether directly or indirectly, the legal or beneficial ownership of any Equity Securities of the Company, or agreement or undertaking to do the same (the “Transfer”) shall be made in accordance with this Section 5.
5.1.2
Preferred Stockholders. No Stockholder shall Transfer any Equity Securities of the Company to any Prospective Transferee that is a competitor of the Group as determined by the Board in good faith (including the affirmative vote of the Majority Preferred Directors). Subject to the foregoing restriction, each Preferred Stockholder may freely Transfer any Equity Securities of the Company now or hereafter owned or held by it without any limitation; provided that, if the Prospective Transferee is not a Party to this Agreement as a Stockholder, the Prospective Transferee shall execute a Deed of Adherence confirming to the other Stockholders that it shall be bound by this Agreement as a Stockholder and deliver such documents and take such other actions as may be necessary for the Transfer.
5.1.3
Prohibited Transfers Void. Any Transfer of Equity Securities of the Company not made in compliance with this Agreement and Constitutional Documents shall be null and void as against the Company, shall not be recorded on the books of the Company and shall not be recognized by the Company or any other Stockholders. The Prospective Transferee shall have no rights, preferences, privileges and obligations in or with respect to the Company in connection with such Equity Securities. Any Stockholder attempting to effect any Transfer in violation of this Agreement and Constitutional Documents shall indemnify and hold harmless the Company and each other Stockholder from all losses that any such person may incur in enforcing the provisions of this Agreement and Constitutional Documents.
5.1.4
Cumulative Restrictions. For purposes of clarity, the restrictions on Transfer set forth in this Agreement and Constitutional Documents are cumulative with, and in addition to, the restrictions set forth in each other agreement imposing restrictions on Transfer of Equity Securities of the Company, and not in lieu thereof.
5.1.5
No Circumvention. No Stockholders shall take any action that has the purpose of evading the restrictions and limitations on Transfer contained under this Agreement and the Constitutional Documents by way of any direct or indirect Transfer, issuance or buyback of Equity Securities in itself and/or its Affiliates, reduction in capital or any other similar actions. Any attempt to Transfer any Equity Securities or any rights thereunder in violation of the Constitutional Documents or this Agreement shall be null and void ab initio.
5.2
Right of First Refusal
5.2.1
Transfer Notice. If any Restricted Common Stockholder (the “Transferor”) proposes to Transfer any Equity Securities of the Company or any right, title or interest therein or thereto to a Prospective Transferee, then the Transferor shall, not later than forty-five (45) days prior to the consummation of such proposed Transfer, give the Company and each Preferred Stockholder written notice of
|
- 11 - |
|
the Transferor’s intention to make the Transfer, which shall include (a) a description of the Equity Securities to be transferred (the “Offered Shares”), (ii) the identity and address of the Prospective Transferee, and (iii) the cash consideration per Offered Share (the “Offered Price”) and the material terms and conditions (the “Offered Terms”) upon which the proposed Transfer is to be made (the “Transfer Notice”).
5.2.2
Right of First Refusal of the Company. The Company shall have a right of first refusal (the “Company’s Right of First Refusal”) to purchase all or any portion of the Offered Shares at the Offered Price and on the Offered Terms, by giving written notice to the Transferor and the Preferred Stockholders before expiration of the Company Option Period as to the number of Offered Shares that it wishes to purchase (the “Company Notice”) within a period of fifteen (15) days following receipt of the Transfer Notice (the “Company Option Period”). If the Company does not provide the Company Notice exercising the Company’s Right of First Refusal with respect to all Offered Shares, the Company must deliver a secondary written notice (the “Secondary Notice”) to the Transferor and to each Preferred Stockholder no later than fifteen (15) days after the Transferor delivers the Transfer Notice to the Company, identifying the portion of the Offered Shares with respect to which the Company does not exercise the Company’s Right of First Refusal (the “Remaining Offered Shares”).
5.2.3
Option of Preferred Stockholders.
(a)
Each Preferred Stockholder shall have a secondary right of first refusal (the “Secondary Right of First Refusal”) to elect to purchase all or any portion of its Pro Rata Share of the Remaining Offered Shares at the Offered Price and on the Offered Terms, by giving written notice to the Transferor and the Company within ten (10) days following receipt of the Secondary Notice (the “Preferred Stockholder Option Period” and together with the Company Option Period, the “Option Period”) as to the number of Remaining Offered Shares that it wishes to purchase.
(b)
If any Preferred Stockholder fails or declines to exercise its Secondary Right of First Refusal to purchase its full Pro Rata Share of the Remaining Offered Shares, the Company shall give written notice thereof (the “Over-Purchase Notice”), within five (5) days after the expiration of the Preferred Stockholder Option Period, to the Transferor and the Preferred Stockholders that have elected to purchase their full Pro Rata Share of the Remaining Offered Shares. Each such Preferred Stockholder shall have a right to purchase such unpurchased Remaining Offered Shares (the “Unpurchased Offered Shares”) by giving written notice to the Transferor and the Company within ten (10) days after receipt of the Over-Purchase Notice (each Preferred Stockholder exercising such right, the “Over-Purchasing Stockholder”). If the aggregate number of Unpurchased Offered Shares the Over-Purchasing Stockholders desire to purchase exceeds the aggregate number of Unpurchased Offered Shares available for purchase, the number of Unpurchased Offered Shares that each such Over-Purchasing Stockholder is entitled to purchase is equal to the lesser of (x) the
|
- 12 - |
|
number of Unpurchased Offered Shares that such Over-Purchasing Stockholder elects to purchase, and (y) the product obtained by multiplying (i) the number of Unpurchased Offered Shares available for purchase by (ii) a fraction, the numerator of which is the number of Shares (on an as-converted basis) held by such Over-Purchasing Stockholder and the denominator of which is the total number of Shares (on an as-converted basis) held by all the Over-Purchasing Stockholders.
Subject to applicable Laws, each Over-Purchasing Stockholder shall be entitled to apportion the Unpurchased Offered Shares to be purchased among its Affiliates, provided that such Affiliate is not a competitor of the Group as determined by the Board in good faith (including the affirmative vote of the Majority Preferred Directors).
5.2.4
Procedure. The closing of the purchase of Offered Shares by the Company and the Preferred Stockholders, as applicable, shall take place, and all payments from the Company and such Preferred Stockholders shall have been made to the Transferor against delivery of such Offered Shares to be purchased and a share transfer form duly executed by the Transferor whereby it agrees to transfer such Offered Shares to the Company or the Preferred Stockholders, as applicable, by the later of (i) the date specified in the Transfer Notice as the intended date of the proposed Transfer by Transferor; and (ii) forty-five (45) days after delivery of the Transfer Notice.
5.2.5
Valuation of Property. If the consideration proposed to be paid for the Offered Shares is in property, services or other non-cash consideration, the fair market value of the consideration shall be as determined in good faith by the Board of Directors and as set forth in the Company Notice. If the Company or any Preferred Stockholder cannot for any reason pay for the Offered Shares in the same form of non-cash consideration, the Company or such Preferred Stockholder may pay the cash value equivalent thereof, as determined in good faith by the Board of Directors and as set forth in the Company Notice.
5.3
Right of Co-Sale
5.3.1
To the extent that any Preferred Stockholder does not exercise its Secondary Right of First Refusal pursuant to Section 5.2 (a “Co-Sale Right Holder”), the Transferor shall give a written notice to each Co-Sale Right Holder (the “Co-Sale Notice”), specifying the number of remaining Offered Shares that are not purchased or to be purchased by the Company or other Preferred Stockholder(s) pursuant to Section 5.2, and such Co-Sale Right Holder shall have the right (the “Co-Sale Right”) to participate in such sale to the Prospective Transferee at the Offered Price and on the Offered Terms by giving written notice to the Transferor within fifteen (15) Business Days following the date of the Co-Sale Notice (each such electing Co-Sale Right Holder, a “Selling Stockholder”). Such Selling Stockholder’s notice to the Transferor shall indicate the number of Equity Securities of the Company the Selling Stockholder wishes to sell under its right to participate (the “Co-Sale Shares”), which, for the avoidance of doubt, shall not exceed its Co-Sale Proportion. To the extent one or more Co-Sale Right Holder exercise such right of participation in accordance with the terms and conditions set forth below, the number of Offered Shares that the Transferor
|
- 13 - |
|
may sell in the Transfer to the Prospective Transferee shall be correspondingly reduced until such number reaches zero, and the Transferor shall ensure that the Prospective Transferee will purchase the remaining Co-Sale Shares.
5.3.2
The “Co-Sale Proportion” of a Co-Sale Right Holder shall be equal to the product of (i) the aggregate number of the remaining Offered Shares that will be transferred to the Prospective Transferee after giving effect to the exercise of all rights of first refusal of the Company and Preferred Stockholders pursuant to Section 5.2 hereof, multiplied by (ii) a fraction, the numerator of which is the number of Common Shares (on an as-converted basis) owned by such Co-Sale Right Holder on the date of the Transfer Notice and the denominator of which is the number of Common Shares (on an as-converted basis) owned by the Transferor.
5.3.3
Each Selling Stockholder shall effect its participation in the sale by promptly delivering to the Transferor for transfer to the Prospective Transferee, before the applicable closing, a duly executed share transfer form and the original share certificate(s) properly endorsed for transfer (or a duly executed indemnity for lost certificate in a form reasonably satisfactory to the Company), both of which represent the type and number of Equity Securities of the Company which such Selling Stockholder elects to sell; provided, however that if the Prospective Transferee objects to the delivery of Common Share Equivalents in lieu of Common Shares, such Selling Stockholder shall only deliver Common Shares (and therefore shall convert any such Common Share Equivalents into Common Shares) and original share certificate(s) corresponding to such Common Shares, and the Company shall effect any such conversion concurrent with the actual transfer of such shares to the Prospective Transferee and contingent on such Transfer.
5.3.4
The duly executed share transfer form and original share certificate(s) (or a duly executed indemnity for lost certificate in a form reasonably satisfactory to the Company) that a Selling Stockholder delivers to the Transferor pursuant to this Section 5.3 shall be transferred to the Prospective Transferee in consummation of the sale of the Equity Securities of the Company at the Offered Price and on the Offered Terms, and the Transferor shall concurrently therewith remit (or ensure the Prospective Transferee to remit) to such Selling Stockholder that portion of the sale proceeds to which such Selling Stockholder is entitled by reason of its participation in such sale.
5.3.5
To the extent that any Prospective Transferee prohibits the participation by a Selling Stockholder exercising its Co-Sale Right hereunder in a proposed Transfer or otherwise refuses to purchase Shares or other Equity Securities of the Company from a Selling Stockholder exercising its Co-Sale Right hereunder, the Transferor shall not sell to such Prospective Transferee any Equity Securities unless and until, simultaneously with such sale, the Transferor shall purchase from such Selling Stockholder such Shares or other Equity Securities of the Company that such Selling Stockholder would otherwise be entitled to sell to the Prospective Transferee pursuant to its Co-Sale Right at the Offered Price and on the Offered Terms.
5.4
Non-Exercise of Rights
|
- 14 - |
|
5.4.1
If the Company and the Preferred Stockholders do not elect to purchase all of the Offered Shares in accordance with Section 5.2, then, subject to the Co-Sale Right of the Co-Sale Right Holders under Section 5.3, the Transferor shall have a period of ninety (90) Business Days from the expiration of the Option Period in which to sell the remaining Offered Shares to the Prospective Transferee upon terms and conditions (including the purchase price) no more favorable to the Prospective Transferee than the Offered Price and the Offered Terms, so long as any such sale is effected in accordance with all applicable Laws.
5.4.2
In the event the Transferor does not consummate the sale of such Offered Shares to the Prospective Transferee within ninety (90) Business Days from the expiration of the Option Period, the rights of the Company and the Preferred Stockholders under Section 5.2 and Section 5.3 shall be re-invoked and each subsequent Transfer of such Offered Shares by the Transferor shall not be made without first comply with Section 5.2 and Section 5.3 all over again.
5.4.3
The exercise or non-exercise of the rights of the Preferred Stockholders under this Section 5.4 to purchase Equity Securities from a Transferor or participate in the sale of Equity Securities by a Transferor shall not adversely affect their rights to make subsequent purchases from the Transferor of Equity Securities or subsequently participate in sales of Equity Securities by the Transferor hereunder.
5.5
Limitations to Rights of First Refusal and Co-Sale
5.5.1
Subject to the requirements of applicable Laws, the Company’s Right of First Refusal, the Secondary Right of First Refusal and Co-Sale Right under Section 5.2 and Section 5.3 shall not apply to Transfer of any Common Shares of the Company now or hereafter held by an Restricted Common Stockholder to such Restricted Common Stockholder’s parents, children, spouse, or to a trustee, executor, or other fiduciary for the benefit of such Restricted Common Stockholder, or other person as approved by the Board, in each case solely for bona fide estate planning purposes (each such transferee pursuant to Section 5.5.1, a “Permitted Transferee”, and collectively, the “Permitted Transferees”); provided, (a) that the Transferor shall remain liable for any breach by such Permitted Transferee of any provision under this Agreement and Constitutional Documents, and (b) the non-economic rights related to such Transferred Equity Securities (such as voting rights, consent rights, the right to appoint and remove Directors and other rights in relation to the governance or management of any Group Company, in each case to the extent applicable) shall remain exclusively with and can only be exercised by such Transferor.
5.6
Drag Sale
5.6.1
Definition. A “Sale of the Company” shall mean either: (a) a transaction or series of related transactions in which a Person, or a group of related Persons, acquire from the Stockholders Shares representing more than fifty percent (50%) of the outstanding voting power of the Company (a “Share Sale”); or (b) a transaction that qualifies as a Deemed Liquidation Event.
|
- 15 - |
|
5.6.2
Actions to be Taken. In the event that (i) the holders of at least a majority of the Preferred Shares (the “Selling Investors”), (ii) the Board of Directors (including the consent from Majority Preferred Directors), and (iii) holders of a majority of the Common Shares (on an as-converted basis) held by the Group’s employees approve a Sale of the Company, specifying that this Section 5.6 shall apply to such transaction, then, subject to satisfaction of each of the conditions set forth in Section 5.6.4 below, each Stockholder and the Company hereby agree:
(a)
if such transaction requires Stockholders’ approval, with respect to all Equity Securities that such Stockholder owns or over which such Stockholder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all such Equity Securities in favor of, and adopt, such Sale of the Company (together with any related amendment or restatement to the Constitutional Documents required to implement such Sale of the Company) and to vote in opposition to any and all other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Sale of the Company;
(b)
if such transaction is a Share Sale, to sell the same proportion of Equity Securities of the Company beneficially held by such Stockholder as is being sold by the Selling Investors to the Person to whom the Selling Investors propose to sell their Equity Securities, and, except as permitted in Section 5.6.4 below, on the same terms and conditions as the other Stockholders of the Company;
(c)
to execute and deliver all related documentation and take such other action in support of the Sale of the Company as shall reasonably be requested by the Company or the Selling Investors in order to carry out the terms and provision of this Section 5.6 including, without limitation, executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible Encumbrances), and any similar or related documents;
(d)
to refrain from (i) exercising any dissenters’ rights or rights of appraisal under applicable Law at any time with respect to such Sale of the Company, or (ii) asserting any claim or commencing any suit (x) challenging the Sale of the Company or this Agreement and Constitutional Documents, or (y) alleging a breach of any fiduciary duty of the Selling Investors or any Affiliate or associate thereof (including, without limitation, aiding and abetting breach of fiduciary duty) in connection with the evaluation, negotiation or entry into the Sale of the Company, or the consummation of the transactions contemplated thereby.
5.6.3
None of the Transfer restrictions set forth in Section 5.1, 5.2 and Section 5.3 shall apply in connection with a Sale of the Company pursuant to this Section
|
- 16 - |
|
5.6, notwithstanding anything contained to the contrary in this Agreement and Constitutional Documents.
5.6.4
Notwithstanding anything to the contrary set forth herein, a Stockholder will not be required to comply with Section 5.6.2 above in connection with any proposed Sale of the Company (the “Proposed Sale”), unless the Stockholder is not liable for the breach of any representation, warranty or covenant made by any other Person in connection with the Proposed Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any Stockholder of any of identical representations, warranties and covenants provided by all Stockholders).
6.
Dividends Rights
6.1
Each Preferred Stockholder shall be entitled, for each Series A Preferred Share, to a non-cumulative dividend at the rate of six percent (6%) per annum of the subscription price or consideration thereof of such Series A Preferred Share (the “Preferential Dividend”), payable only as, when and if declared by the Board, which shall be paid out of profits available for distribution in any fiscal year.
6.2
Notwithstanding the provisions under Section 6.1, in the event that any Group Company enters into any business partnership or similar form of arrangement with a third party in relation to the exploitation of any of the Group’s products (including but not limited to the sale, license, assignment of any of its product rights, such as any and all rights to use intellectual property, regulatory approvals, clinical data, manufacturing know-how, commercialization rights, and other related rights and assets necessary or useful for the development, manufacture, and commercialization of such products in any or all territories), and receives cash proceeds from such arrangement, to the extent that the distribution of dividends is not inconsistent with applicable Laws and the Constitutional Documents of the Company and leaves the Group a sufficient level of cash required for its continuous operations in the ordinary course of business as reasonably determined by the Board, the Board shall, subject to any Stockholders’ resolutions then required, declare dividends out of the proceeds of such arrangement on a pro rata basis to all of its Stockholders (on an as-converted and fully-diluted basis).
6.3
The Company shall not declare, pay or set apart for payment, any dividend or other distributions on any Common Shares or make any payment on account of, or set apart for payment, money for a sinking or other similar fund for, the purchase, redemption or other retirement of, any Common Shares or any warrants, rights, calls or options exercisable or exchangeable for or convertible into any such Shares, or make any distribution in respect thereof, either directly or indirectly, and whether in cash, obligations or shares of the Company or other property, unless (in addition to the obtaining of any consents required elsewhere in the Constitutional Documents) the holders of the applicable Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding Preferred Share in an amount equal to the applicable aggregate Preferential Dividend on such Preferred Share and not previously paid in accordance with Section 6.1.
6.4
To the extent that the aggregate Preferential Dividends on all Preferred Shares under Section 6.1 have been paid in full to the Preferred Stockholders, and the Board intends
|
- 17 - |
|
to declare any additional dividends, each Stockholder shall be entitled to receive, for each Share held by it (on an as-converted basis), same amount of dividend in respect of such Share (without taking into account the Preferential Dividends).
7.
Liquidation Preferences
7.1
Liquidation Preferences. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all assets and funds of the Company legally available for distribution to the Stockholders (after satisfaction of all creditors’ claims and claims that may be preferred by applicable Laws) shall be distributed to the Stockholders as follows:
7.1.1
Series A Preferred Shares Liquidation Preference (Cash). First, each Preferred Stockholder (other than AffaMed and its Affiliates) (each such Preferred Stockholder, the “Cash Preferred Stockholder”) shall be entitled to receive, for each Series A Preferred Share held by such holder, on parity with each other Cash Preferred Stockholder and prior and in preference to any distribution of any of the assets or funds of the Company to AffaMed and its Affiliates and Common Stockholders, the amount equal to (x) 100% of the Series A Issue Price, plus (y) compound interest of 10% per annum calculated on the basis of the Series A Issue Price, plus (z) all declared but unpaid dividends on such Series A Preferred Share (the “Series A Preference Amount (Cash)”). If the assets and funds shall be insufficient to permit the payment to such Cash Preferred Stockholders of the full Series A Preference Amount (Cash) for all Series A Preferred Shares of such Cash Preferred Stockholders, then the entire assets and funds of the Company legally available for distribution shall be distributed ratably among the Cash Preferred Stockholders in proportion to the aggregate Series A Preference Amount (Cash) each such Cash Preferred Stockholder is otherwise entitled to receive pursuant to this Section 7.1.1.
7.1.2
Series A Preferred Shares Liquidation Preference (In-Kind). Second, after distribution or payment in full of the Series A Preference Amount (Cash) to the Cash Preferred Stockholders, AffaMed shall be entitled to receive the following cash or in-kind distributions (as applicable) (the “Series A Preference Amount (In-Kind)”):
(a)
to the extent that the Group still holds the right, title and interest in and to the Assigned Contracts, the Assigned Contracts (in their entireties) (and, for the avoidance of doubt, AffaMed shall simultaneously assume to all the obligations and liabilities of the Company thereunder); or
(b)
to the extent that the Group ceases to hold the right, title and interest in and to the Assigned Contracts, in preference to any distribution of any of the assets or funds of the Company to Common Stockholders, the amount equal to (x) 100% of the Series A Issue Price multiple the Series A Preferred Shares held by AffaMed, plus (y) all declared but unpaid dividends on the Series A Preferred Shares held by AffaMed.
7.1.3
If the assets and funds shall be more than sufficient to pay the full Series A Preference Amount (Cash) and Series A Preference Amount (In-Kind) for all
|
- 18 - |
|
Series A Preferred Shares, the excess shall be distributed ratably among the Preferred Stockholders and the Common Stockholders according to the relative number of Common Shares held by such Stockholders on an as-converted basis.
7.2
Deemed Liquidation Event. A Deemed Liquidation Event shall be deemed as a liquidation, dissolution or winding up of the Company for purposes of Section 7.1, and any proceeds, whether in cash or properties, resulting from a Deemed Liquidation Event shall be distributed in accordance with the terms of Section 7.1.
7.3
Valuation of Properties. In the event the Company proposes to distribute assets other than cash in connection with any liquidation, dissolution or winding up of the Company pursuant to Section 7.1 or pursuant to a Deemed Liquidation Event, the value of the assets to be distributed to the Stockholders shall be determined by the Board of Directors (including the affirmative votes of Majority Preferred Directors) in good faith, provided that any securities not subject to restrictions on free marketability shall be valued as follows:
7.3.1
if traded on a securities exchange, the value shall be deemed to be the average of the security’s closing prices on such exchange over the thirty (30) day period ending one (1) day prior to the distribution;
7.3.2
if traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the thirty (30) day period ending three (3) days prior to the distribution; and
7.3.3
if there is no active public market, the value shall be the fair market value thereof as determined by the Board of Directors (including the affirmative votes of Majority Preferred Directors) in good faith.
provided further that the method of valuation of securities subject to restrictions on free marketability shall be adjusted to make an appropriate discount from the market value determined as above in Section 7.3.1, Section 7.3.2 or Section 7.3.3 to reflect the fair market value thereof as determined by the Board in good faith.
8.
Conversion Rights
8.1
Conversion Ratio. The number of Common Shares to which a Stockholder shall be entitled upon conversion of each Preferred Share shall be the quotient of the Series A Issue Price divided by the then effective conversion price, which shall initially be the Series A Issue Price, and shall be adjusted from time to time as provided below in Section 8.5 (the “Conversion Price”), resulting in an initial conversion ratio for Preferred Shares of 1:1, and shall be subject to adjustments of the Conversion Price as set forth below.
8.2
Optional Conversion. Subject to applicable Laws and the Constitutional Documents, any Preferred Share may, at the option of the Preferred Stockholder thereof, be converted at any time after the date of issuance of such Shares, without the payment of any additional consideration, into fully paid and non-assessable Common Shares based on the applicable then-effective Conversion Price.
|
- 19 - |
|
8.3
Automatic Conversion Event. Each Preferred Share shall automatically be converted, based on the applicable then-effective Conversion Price, without the payment of any additional consideration, into fully paid and non-assessable Common Shares upon the earlier to occur (the “Automatic Conversion Event”) of (i) a Qualified IPO, or (ii) the date specified by written consent or agreement of holders of a majority of the Series A Preferred Shares.
8.4
Conversion Mechanism. The conversion hereunder of any applicable Preferred Share shall be effected in the following manner:
8.4.1
Except as provided in Section 8.4.2 and Section 8.4.3 below, before any Preferred Stockholder shall be entitled to convert the same into Common Shares, such Preferred Stockholder shall surrender the certificate or certificates therefor (if any) (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor) at the office of the Company or of any transfer agent for such Share to be converted and shall give notice to the Company, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for Common Shares are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver to such Preferred Stockholder, or to the nominee(s) of such Preferred Stockholder, a certificate or certificates for the number of Common Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such notice and such surrender of the Preferred Shares to be converted, and the Person(s) entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder(s) of such Common Shares as of such date.
8.4.2
If the conversion is in connection with an IPO (including any Qualified IPO), the conversion will be conditioned upon the closing with the underwriter(s) of the sale of securities pursuant to such IPO and the Person(s) entitled to receive the Common Shares issuable upon such conversion shall not be deemed to have converted the applicable Preferred Shares until immediately prior to the closing of such sale of securities.
8.4.3
Upon the occurrence of the Automatic Conversion Event, all Preferred Stockholders whose Preferred Shares to be automatically converted will be given at least ten (10) days’ prior written notice of the date fixed (which date shall in the case of a Qualified IPO be the latest practicable date immediately prior to the closing of the Qualified IPO) and the place designated for automatic conversion of all such Preferred Shares pursuant to this Section 8.4. On or before the date fixed for conversion, each Preferred Stockholder shall surrender the applicable certificate(s) (if any) (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor) for all such Shares to the Company at the place designated in such notice. On the date fixed for conversion, the Company shall promptly effect such conversion, and all rights with respect to such Preferred Shares so converted will terminate, with the exception of the right of a holder thereof to receive the Common Shares issuable upon conversion of such Preferred Shares, and upon surrender of the certificate or certificates therefor (if any) (or in lieu thereof shall deliver an affidavit of lost certificate and indemnity therefor), to receive certificates (if applicable) for the number of Common Shares into which such Preferred Shares have been
|
- 20 - |
|
converted. All certificates evidencing such Preferred Shares shall, from and after the date of conversion, be deemed to have been retired and cancelled and the Preferred Shares represented thereby converted into Common Shares for all purposes, notwithstanding the failure of the holder(s) thereof to surrender such certificates on or prior to such date.
8.4.4
The Company may effect the conversion of the Preferred Shares in any manner available under applicable Laws, including redeeming or repurchasing the relevant Preferred Shares and applying the proceeds thereof towards payment for the new Common Shares or where the conversion ratio is one to one, by re- designating a Preferred Share to a Common Share. For purposes of the repurchase or redemption, the Company may, subject to the Company being able to pay its debts in the ordinary course of business, make payments out of its capital.
8.4.5
8.4.6
Upon conversion, all accrued but unpaid share dividends on the applicable Preferred Shares shall be paid in shares and all accrued but unpaid cash dividends on the applicable Preferred Shares shall be paid either in cash or by the issuance of a number of further Common Shares equal to the value of such cash amount, at the option of the Preferred Stockholder of the applicable Preferred Shares.
8.5
Adjustment of the Conversion Price. The Conversion Price shall be adjusted and readjusted from time to time as provided below:
8.5.1
8.5.2
Adjustment for Common Share Dividends and Distributions. If the Company makes (or fixes a record date for the determination of Common Stockholders entitled to receive) a dividend or other distribution to the Common Stockholders payable in additional Common Shares, the Conversion Price then in effect with respect to each Preferred Share shall be decreased as of the time of such issuance (or in the event such record date is fixed, as of the close of business on such record date) by multiplying such Conversion Price by a
|
- 21 - |
|
fraction, (i) the numerator of which is the total number of Common Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of Common Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Common Shares issuable in payment of such dividend or distribution.
8.5.3
Adjustments for Other Dividends. If the Company at any time, or from time to time, makes (or fixes a record date for the determination of holders of Common Shares entitled to receive) a dividend or other distribution payable in securities of the Company other than Common Shares or Common Share Equivalents, then, and in each such event, provision shall be made so that, upon conversion of any Preferred Share thereafter, the holder thereof shall receive, in addition to the number of Common Shares issuable thereon, the amount of securities of the Company which the holder of such share would have received had the Preferred Shares been converted into Common Shares immediately prior to such event, all subject to further adjustment as provided herein.
8.5.4
Adjustments for Reorganizations, Mergers, Consolidations, Reclassifications, Exchanges, and Substitutions. If at any time, or from time to time, any capital reorganization or reclassification of the Common Shares (other than as a result of a share dividend, subdivision, split or combination otherwise treated above) occurs or the Company is consolidated, merged or amalgamated with or into another Person (other than a consolidation, merger or amalgamation treated as a Deemed Liquidation Event), then in any such event, provision shall be made so that, upon conversion of any Preferred Shares thereafter, the holder thereof shall receive the kind and amount of shares and other securities and property which the holder of such shares would have received in connection with such event had the relevant Preferred Shares been converted into Common Shares immediately prior to such event, all subject to further adjustment as provided herein, or with respect to such other securities or property, in accordance with any terms applicable thereto.
8.5.5
Adjustments to Conversion Price for Dilutive Issuance.
(a)
No Adjustment of Conversion Price. Unless provided otherwise under Sections 8.5.1 to 8.5.4 above, no adjustment in the Conversion Price with respect to any Preferred Share shall be made in respect of the issuance of New Securities unless the consideration per Common Share (determined pursuant to Section 8.5.5(c) hereof) for the New Securities issued or deemed to be issued by the Company is less than such Conversion Price in effect immediately prior to such issuance, as provided for by Section 8.5.6. No adjustment or readjustment in the Conversion Price with respect to any Preferred Share otherwise required by this Section 8.5 shall affect any Common Shares issued upon conversion of any applicable Preferred Share prior to such adjustment or readjustment, as the case may be.
(b)
Deemed Issuance of New Securities. In the event the Company at any time or from time to time after the date hereof shall issue any Options or
|
- 22 - |
|
Convertible Securities or shall fix a record date for the determination of holders of any series or class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of Common Shares (as set forth in the instrument relating thereto without regard to any provisions contained therein for a subsequent adjustment of such number for anti-dilution adjustments) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities or the exercise of such Options, shall be deemed to be New Securities issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that in any such case in which New Securities are deemed to be issued:
(i)
no further adjustment in the Conversion Price with respect to any Preferred Share shall be made upon the subsequent issue of Convertible Securities or Common Shares upon the exercise of such Options or conversion or exchange of such Convertible Securities or upon the subsequent issue of Options for Convertible Securities or Common Shares;
(ii)
if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the Company, or change in the number of Common Shares issuable, upon the exercise, conversion or exchange thereof, the then effective Conversion Price with respect to any Preferred Share computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such change becoming effective, be recomputed to reflect such change insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities;
(iii)
no readjustment pursuant to Section 8.5.5(b)(ii) shall have the effect of increasing the then effective Conversion Price with respect to any Preferred Share to an amount which exceeds the Conversion Price with respect to such Preferred Share that would have been in effect had no adjustments in relation to the issuance of the Options or Convertible Securities as referenced in Section 8.5.5(b)(ii) been made;
(iv)
upon the expiration of any such Options or any rights of conversion or exchange under such Convertible Securities that have not been exercised, the then effective Conversion Price with respect to any Preferred Share computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto) and any subsequent adjustments based thereon shall, upon such expiration, be recomputed as if:
(A)
in the case of Convertible Securities or Options for Common Shares, the only New Securities issued were the Common Shares, if any, actually issued upon the
|
- 23 - |
|
exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Company for the issue of such exercised Options plus the consideration actually received by the Company upon such exercise or for the issue of all such Convertible Securities that were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange, and
(B)
in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Company for the New Securities deemed to have been then issued was the consideration actually received by the Company for the issue of such exercised Options, plus the consideration deemed to have been received by the Company (determined pursuant to Section 8.5.5(c)) upon the issue of the Convertible Securities with respect to which such Options were actually exercised; and
(v)
if such record date shall have been fixed and such Options or Convertible Securities are not issued on the date fixed therefor, the adjustment previously made in the Conversion Price with respect to any Preferred Share which became effective on such record date shall be cancelled as of the close of business on such record date, and thereafter the Conversion Price with respect to such Preferred Share shall be adjusted pursuant to this Section 8.5.5(b) as of the actual date of their issuance.
(c)
Determination of Consideration. For purposes of this Section 8.5.5 and Section 8.5.6, the consideration received by the Company for the issuance of any New Securities shall be computed as follows:
(i)
Cash and Property. Such consideration shall:
(A)
insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company excluding amounts paid or payable for accrued interest or accrued dividends and excluding any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance of any New Securities;
(B)
insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined and approved in good faith by the Board of Directors; or
|
- 24 - |
|
(C)
in the event New Securities are issued together with other Shares or securities or other assets of the Company for consideration which covers both cash and property, be the proportion of such consideration so received which relates to such New Securities, computed as provided in Section 8.5.1 and Section 8.5.2 above, as reasonably determined in good faith by the Board of Directors.
(ii)
Options and Convertible Securities. The consideration per Common Share received by the Company for New Securities deemed to have been issued pursuant to Section 8.5.5(b) hereof relating to Options and Convertible Securities, shall be determined by dividing (a) the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities (determined in the manner described in Section 8.5.5(c)(i) above), plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by (b) the maximum number of Common Shares (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.
8.5.6
Adjustment of the Conversion Price upon the Issuance of New Securities. In the event of an issuance of New Securities, at any time after the date hereof, without consideration or for a consideration per share received by the Company (net of any selling concessions, discounts or commissions) less than the applicable Conversion Price for any Preferred Share in effect immediately prior to such issue, then and in such event, the applicable Conversion Price for such Preferred Share shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula (unless the Board (including the affirmative vote of the Majority Preferred Directors) determines that the Conversion Price shall not be reduced):
CP2 = CP1 * (A + (B/CP1)) / (A + C).
For purposes of the foregoing formula, the following definitions shall apply:
(a)
CP2 shall mean the Conversion Price in effect immediately after such issue of New Securities;
(b)
CP1 shall mean the Conversion Price in effect immediately prior to such issue of New Securities;
|
- 25 - |
|
(c)
“A” shall mean the number of Common Shares outstanding immediately prior to such issuance of New Securities, treating for this purpose as outstanding all Common Shares issuable upon exercise of Options outstanding immediately prior to such issue or upon conversion or exchange of Equity Securities (including the Preferred Shares) outstanding (assuming exercise of any outstanding Options or Convertible Securities therefor) immediately prior to such issue;
(d)
“B” shall mean the total consideration received by the Company for the issuance or sale of the New Securities; and
(e)
“C” shall mean the number of Common Shares issued in such transaction and/or convertible from such New Securities issued in such transaction (as applicable) on an as-converted and fully-diluted basis.
Notwithstanding the foregoing, to the extent that AffaMed receives AffaMed Anti-Dilution Shares due to the AffaMed Anti-Dilution Event, the Conversion Price for each Series A Preferred Share held by AffaMed shall not be adjusted due to the same AffaMed Anti-Dilution Event.
8.5.7
Other Dilutive Events. In case any event shall occur as to which the other provisions of this Section 8.5 are not strictly applicable, but the failure to make any adjustment to the Conversion Price with respect to any Preferred Share, would not fairly protect the conversion rights of the Preferred Stockholders in accordance with the essential intent and principles hereof, then the Company, in good faith, shall determine the appropriate adjustment to be made, on a basis consistent with the essential intent and principles established in this Section 8.5, necessary to preserve, without dilution, the conversion rights of the Preferred Stockholders.
8.5.8
Certificate of Adjustment. In the case of any adjustment or readjustment of the Conversion Price with respect to any Preferred Share, the Company, at its sole expense, shall compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall deliver such certificate by notice to each registered Preferred Stockholder at the Preferred Stockholder’s address as shown in the Company’s books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (i) the consideration received or deemed to be received by the Company for any New Securities issued or sold or deemed to have been issued or sold, (ii) the number of New Securities issued or sold or deemed to be issued or sold, (iii) the Conversion Price with respect to such Preferred Share, in effect before and after such adjustment or readjustment, and (iv) the type and number of Equity Securities of the Company, and the type and amount, if any, of other property which would be received upon conversion of such Preferred Shares after such adjustment or readjustment.
8.5.9
Notice of Record Date. In the event the Company shall propose to take any action of the type or types requiring an adjustment set forth in this Section 8.5, the Company shall give notice to the relevant Preferred Stockholders, which shall specify the record date, if any, with respect to any such action and the date
|
- 26 - |
|
on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Conversion Price with respect to the relevant Preferred Share, and the number, kind or class of shares or other securities or property which shall be deliverable upon the occurrence of such action or deliverable upon the conversion of the relevant Preferred Shares. In the case of any action which would require the fixing of a record date, such notice shall be given at least twenty (20) days prior to the date so fixed, and in the case of all other actions, such notice shall be given at least thirty (30) days prior to the taking of such proposed action.
8.5.10
Payment of Charges. The Company will pay all governmental charges and taxes (for the avoidance of doubt, excluding any taxes based on income) that may be imposed with respect to the issue or delivery of Common Shares upon conversion of the Preferred Shares, excluding any other charge imposed in connection with any transfer involved in the issue and delivery of Common Shares in a name other than that in which such Preferred Shares so converted were registered.
8.5.11
Common Shares Resulting from Conversion. The Common Shares resulting from the conversion of the Preferred Shares: (a) shall be credited as fully paid and non-assessable; (b) shall rank pari passu in all respects and form one class with the Common Shares then issued; and (c) shall entitle the holder to all dividends payable on the Common Shares by reference to a record date after the date of conversion.
9.
Redemption Rights
9.1
At any time after the fifth (5th) anniversary of the Closing Date, if IMAB (the “Redemption Initiating Holder”) elects in writing to request the Company to redeem all or any part of the Series A Preferred Shares held by it (the “Redeeming Preferred Shares”) (the “Redemption Request”), the Company shall take all necessary actions so far as it is lawfully able to do so, to procure the completion of the redemption of the Redeeming Preferred Shares and to pay out of its legally available funds to IMAB in respect of such Redeeming Preferred Shares the Redemption Price within one hundred and twenty (120) days from the date of the Redemption Request.
9.2
The “Redemption Price” for each Redeeming Preferred Share held by IMAB shall be the sum of (x) 100% of the IMBA’s Series A Issue Price, (y) compound interest of 10% per annum calculated on the basis of the Series A Issue Price, and (z) any accrued and declared and unpaid dividends on such Redeeming Preferred Share. The Redemption Price may be proportionally adjusted for any share splits, share dividends, recapitalizations and similar transactions.
9.3
If the Company fails to complete the redemption of all Redeeming Preferred Shares within one hundred and twenty (120) days from the date of the Redemption Request:
9.3.1
the Company shall remain liable for the payment of the remaining Redemption Price out of its legally available funds and shall take all necessary actions so far as it is lawfully able to do so, to procure the completion of the redemption of
|
- 27 - |
|
the remaining Redeeming Preferred Shares and to pay to IMAB all remaining amounts of the Redemption Price as soon as practicable; and
9.3.2
IMAB is entitled to request the Company to take any and all actions necessary to complete the redemption of the remaining Redeeming Preferred Shares and to pay to IMAB all due and payable amounts of the Redemption Price as soon as practicable, including, without limitation, (a) selling, transferring, or otherwise disposing of all or part of the assets of the Group to a bona fide transferee determined by such IMAB in good faith, (b) incur any indebtedness and (c) issue any New Securities, without being subject to any restrictions set forth in this Agreement or the Constitutional Documents, and the proceeds thereof shall be applied to pay to IMAB all remaining amounts of the Redemption Price (notwithstanding Sections 6 and 7).
9.4
Without limiting any rights of IMAB which are set forth in this Agreement, the Constitutional Documents, or are otherwise available under applicable Law, any Preferred Shares held by IMAB subject to redemption hereunder with respect to which the Company has become obligated to pay the applicable Redemption Price but has not paid in full shall remain owned by IMAB and continue to have all the powers, designations, preferences and relative participating, optional, and other special rights (including, without limitation, rights to dividends) which such Preferred Share had prior to the redemption date, until the amount for redemption and all other redemption payments (including, without limitation, any dividend and other distribution, if any) accrued after the redemption date have been paid in full with respect to such Preferred Shares.
9.5
Each of the Company and all of the Stockholders shall, to the extent permitted by applicable Laws, take all necessary or desirable actions (including passing all relevant resolutions) to procure the Group Companies to declare and distribute sufficient dividends, out of any funds and assets legally available therefor, to the Company in order to enable the Company to effect the redemption in accordance with this Section 9.
9.6
All Redeeming Preferred Shares which are redeemed by the Company shall forthwith be cancelled upon full payment of the Redemption Price with respect to such Redeeming Preferred Shares.
10.
OTHER COVENANTS
10.1
Business
10.1.1
The principal business of the Group Companies is to, subject to applicable Laws and terms and conditions of this Agreement, engage in the research, development, manufacturing and commercialization of pharmaceutical products, including Licensed Antibodies and Licensed Products (each as defined in the Subscription Agreement).
10.1.2
Except as otherwise provided under this Agreement, the Stockholders shall not be obliged to contribute further funds (whether in the form of debt or equity) to the Company or any member of the Group under any circumstances, even in the
|
- 28 - |
|
event that the Company or any member of the Group requires further funding for its operations.
10.2
Access to Information
10.2.1
Each Preferred Stockholder shall have customary inspection rights to (a) visit the premises where the business of the Group is conducted and examine the books, records, files and other information of the Group; and (b) have access to such management and personnel of the Group as may be reasonably requested by the Preferred Stockholder for the purpose of consulting with and advising management, obtaining information regarding the business, operations, the financial position and prospects of the Group or expressing the views of the Preferred Stockholder on such matters, in each case during normal business hours of the Group Companies as may be reasonably requested by the Preferred Stockholder with at least ten (10) days advance notification; provided, however, that the Company shall not be obligated to provide access to any information that is reasonably and in good faith considers to be a trade secret or confidential information. The Preferred Stockholder acknowledges and agrees that any exercise of the inspection rights hereunder shall in no event impair the normal business operations of the Company.
10.2.2
Each Preferred Stockholder shall have the right to receive from the Company the following:
(a)
within forty-five (45) days after the end of each calendar quarter, the unaudited consolidated quarterly management accounts for each of the Company and its Subsidiaries made up to the end of the relevant calendar quarter;
(b)
within one hundred and twenty (120) days after the end of the financial year to which they relate, annual audited consolidated balance sheet, profit and loss statement and cash flow statement of the Company and its Subsidiaries, in each case audited by the Auditors in accordance with IFRS; and
(c)
not later than thirty (30) days after the beginning of each financial year, a proposed annual budget and business plan of each of the Company and its Subsidiaries for such financial year.
10.3
Registration Rights. The Designated Holders shall be entitled to the registration rights with respect to the Registrable Securities held thereby as are set forth in Schedule IV.
11.
TERM AND TERMINATION
11.1
Terms. The provisions of this Agreement shall come into force on the Closing Date (save for Sections 1, 11, 12, 13, 14 and Schedule I, which shall come into force on the date of this Agreement) and, save as terminated pursuant to Section 11.2, shall remain in full force and effect.
11.2
Termination
|
- 29 - |
|
11.2.1
This Agreement terminates:
(a)
in respect of the rights and obligations of all Parties:
(i)
if all Parties agree in writing to terminate this Agreement;
(ii)
upon the winding up of the Company and the completion of the distribution of proceeds, if any, from such winding up; and
(b)
in respect of the rights and obligations of a Stockholder, when such Stockholder ceases to hold any Shares.
11.3
Effect of Termination. Termination of this Agreement (howsoever occasioned) shall not affect any accrued rights or liabilities to any Party, nor shall it affect the effect of any provision hereof which is expressly or by implication intended to come into or to continue in force on or after such termination. Sections 1, 11, 12, 13, 14 and Schedule I shall survive the termination of this Agreement and shall continue in full force and effect.
12.
CONFIDENTIALITY
12.1
Confidentiality Undertakings. During the term of this Agreement and after termination or expiration of this Agreement for any reason whatsoever the Receiving Party shall:
12.1.1
not use or disclose to any Person Confidential Information it has or acquires other than for the purposes of the Transaction Documents;
12.1.2
make every effort to prevent the use or disclosure of Confidential Information other than for the purposes of the Transaction Documents; and
12.1.3
procure that each of its Affiliates complies with Sections 12.1.1 and 12.1.2.
12.2
Exceptions
Section 12.1 does not apply to disclosure of Confidential Information:
12.2.1
to the extent that such information is in the public domain other than through breach of Section 12.1;
12.2.2
to any director, officer or employee of any Party whose function requires him to have the Confidential Information;
12.2.3
to the extent that it is required to be disclosed by applicable Laws, by any rule of a listing authority or stock exchange, or by any Governmental Authority with relevant powers to which any party is subject or submits, provided that the disclosure shall so far as is practicable be made after consultation with the other Parties and after taking into account the other Parties’ reasonable requirements as to its timing, content and manner of making or despatch;
12.2.4
to any adviser for the purpose of advising any Party in connection with the transactions contemplated by this Agreement provided that such disclosure is
|
- 30 - |
|
essential for these purposes and that such Party procures that such adviser complies with Section 12.1;
12.2.5
by any Investor to its Affiliates (for this purpose only, an Affiliate of the Investor shall be deemed to include any investment fund and the Affiliates and limited partners of such investment fund);
12.2.6
to the extent required to vest the full benefit of this Agreement in any Party;
12.2.7
as is required to facilitate a proposed bona fide Sale of the Company;
12.2.8
to the extent that the Disclosing Party has been given prior written consent to such disclosure.
12.3
Definitions
For the purposes of this Section, the “Disclosing Party” means the Party that discloses (whether in writing, verbally or by any other means and whether directly or indirectly) Confidential Information to any other Party (the “Receiving Party”) whether before or after the date of this Agreement.
13.
ANNOUNCEMENTS
13.1
Public Announcements. Subject to Section 13.2, none of the Parties may make or send a public announcement, communication or circular concerning the transactions referred to in this Agreement unless it has first obtained the other Parties’ written consent, which may not be unreasonably withheld or delayed.
13.2
Exceptions. Section 13.1 does not apply to a public announcement, communication or circular required by applicable Laws, by any rule of a listing authority or stock exchange, or by any Governmental Authority with relevant powers to which any Party is subject or submits, provided that the public announcement, communication or circular shall so far as is practicable be made after consultation with the other Parties and after taking into account the reasonable requirements of the other Parties as to its timing, content and manner of making or despatch.
14.
Miscellaneous
14.1
Compliance with this Agreement. The Stockholders shall at all times exercise their voting rights and any other powers of control available to them in relation to the Group (whether as Stockholder, director or otherwise), and shall otherwise use their reasonably practicable efforts, so as to cause the Company or any other member of the Group to comply with the provisions of this Agreement.
14.2
Conflicts with Constitutional Documents. If there is a conflict between any provision of this Agreement and the Constitutional Documents, the provisions of this Agreement shall prevail as between the Stockholders, and the Stockholders shall promptly procure the amendment of the Constitutional Documents so as to be consistent with this Agreement.
14.3
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
|
- 31 - |
|
respective successors and assigns of the Parties hereto whose rights or obligations hereunder are affected by such terms and conditions. This Agreement and the rights and obligations therein may not be assigned by the Company without the prior written consent of the Investors. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
14.4
Governing law. This Agreement shall be governed by and construed under the Laws of the State of Delaware, without regard to principles of conflict of Laws thereunder.
14.5
Dispute Resolution
14.5.1
Any dispute, controversy, difference or claim arising out of or relating to this Agreement (including the existence, validity, interpretation, performance, breach or termination thereof or any dispute regarding non-contractual obligations arising out of or relating to it) shall be referred to arbitration administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted (the “HKIAC Rules”).
14.5.2
The tribunal shall consist of three (3) arbitrators (the “Tribunal”). Each of the claimant or group of claimants and the respondent or group of respondents shall designate one (1) arbitrator and HKIAC shall appoint the third (3rd) arbitrator.
14.5.3
The seat of such arbitration shall be Hong Kong.
14.5.4
The arbitral proceedings shall be conducted in English. All documents submitted in connection with the proceedings shall be in the English language, or if in another language, accompanied by an English translation.
14.5.5
The award of the Tribunal shall be final and binding upon the Parties. Judgment upon the award may be entered by any court having jurisdiction of the award or having jurisdiction over the relevant party or its assets.
14.6
Notice. Any notice required or permitted pursuant to this Agreement shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, electronic mail or similar means to the address of the relevant Party, as shown on Schedule III (or at such other address as such Party may designate by fifteen (15) days’ advance written notice to the other Parties to this Agreement given in accordance with this Section 14.6). Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a written confirmation of delivery, and to have been effected at the earlier of (i) delivery (or when delivery is refused) and (ii) expiration of two (2) Business Days after the letter containing the same is sent as aforesaid. Where a notice is sent by electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid, if such day is a
|
- 32 - |
|
Business Day and if sent during normal business hours of the recipient, otherwise the next Business Day.
14.7
Specific Performance. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such Party. Without limiting the foregoing, the Parties hereto acknowledge and agree irreparable harm may occur for which money damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement.
14.8
Severability. In the event that any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If, however, any provision of this Agreement shall be invalid, illegal, or unenforceable under any such applicable Law in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such Law, or, if for any reason it is not deemed so modified, it shall be invalid, illegal, or unenforceable only to the extent of such invalidity, illegality, or limitation on enforceability without affecting the remaining provisions of this Agreement, or the validity, legality, or enforceability of such provision in any other jurisdiction.
14.9
Amendments and Waivers. Any term of this Agreement may be amended, only with the written consent of each of the Parties. Any amendment effected in accordance with this paragraph shall be binding upon each of the Parties hereto, provided that the consent of the Founder shall be required for any amendment or waiver if such amendment or waiver adversely affect the rights of the Founder in a manner that is different than the effect on the rights of the other Parties hereto. Notwithstanding the foregoing, the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Party against whom such waiver is sought.
14.10
No Waiver. Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy power hereunder at any one or more times be deemed a waiver or relinquishment of such right, power or remedy at any other time or times.
14.11
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any Party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.
|
- 33 - |
|
14.12
No Presumption. The Parties acknowledge that any applicable Law that would require interpretation of any claimed ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any Party or its counsel.
14.13
Headings and Subtitles; Interpretations
14.13.1
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
14.13.2
In this Agreement, unless a provision hereof expressly provides otherwise:
(a)
the term “or” is not exclusive;
(b)
words in the singular include the plural, and words in the plural include the singular;
(c)
the terms “herein”, “hereof”, and other similar words refer to this Agreement as a whole and not to any particular section, subsection, paragraph, clause, or other subdivision;
(d)
all references to “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation”;
(e)
the masculine, feminine, and neuter genders will each be deemed to include the others;
(f)
the terms “shall”, “will”, and “agrees” are mandatory, and the term “may” is permissive;
(g)
the term “day” shall mean “calendar day”, and “month” shall mean calendar month;
(h)
all references in this Agreement to designated “Sections” and other subdivisions are to the designated Sections and other subdivisions of the body of this Agreement;
(i)
all references in this Agreement to designated Schedules are to the Schedules attached to this Agreement;
(j)
the phrase “directly or indirectly” shall mean directly, or indirectly through one or more intermediate Persons or through contractual or other arrangements, and “direct or indirect” has the correlative meaning;
(k)
references to law or applicable Law include any such law modifying, reenacting, extending or made pursuant to the same or which is modified, reenacted, or extended by the same or pursuant to which the same is made;
|
- 34 - |
|
(l)
the phrase “on an as-converted and fully-diluted basis” shall mean assuming conversion of all Preferred Shares and exercise of other outstanding options, warrants, or other convertible securities into Common Shares, and the phrase “on an as-converted basis” shall mean assuming conversion of all Preferred Shares into Common Shares;
(m)
all accounting terms not otherwise defined herein have the meanings assigned under the applicable accounting principle or policy;
(n)
pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms;
(o)
references to this Agreement, any other Transaction Documents and any other document shall be construed as references to such document as the same may be amended, supplemented or novated from time to time;
(p)
all references to dollars or to “US$” are to currency of the United States of America (and shall be deemed to include reference to the equivalent amount in other currencies); and
(q)
any reference to writing or written shall include typewriting, printing, lithography, photography, email message and facsimile message and other modes of reproducing words in a legible and non-transitory form.
14.14
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and e-mailed copies of signatures or electronic signatures shall be deemed to be originals for purposes of the effectiveness of this Agreement.
14.15
Third Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any Person, other than the Parties hereto and their permitted successors and assigns any rights or remedies under or by reason of this Agreement. The rights of the Parties to terminate, rescind or agree to any variation, waiver or settlement under this Agreement are not subject to the consent of any other Person.
14.16
Costs. Except where this Agreement or the relevant document provides otherwise, each Party shall pay its own costs relating to the negotiation, preparation, execution and performance by it of this Agreement and of each document referred to in it.
14.17
Entire Agreement. This Agreement and the Transaction Documents, together with all schedules and exhibits hereto and thereto, constitute the full and entire understanding and agreement among the Parties with regard to the subjects hereof and thereof, and supersede all other agreements between or among any of the Parties with respect to the subject matters hereof and thereof.
14.18
Governing Language. This Agreement is written in English. If this Agreement is translated into another language, the English version shall prevail.
|
- 35 - |
|
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
VISARA, INC.
By: __________________________________
Name:
Title:
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
I-MAB
By: __________________________________
Name:
Title:
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized representatives to execute this Agreement on the date and year first above written.
AFFAMED THERAPEUTICS (HK) LIMITED
By: __________________________________
Name: Ting Liu
Title: President
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT
Schedule VI
DEFINITION
DEFINITION
“Adjourned Meeting” |
shall have the meaning ascribed to it in the Section 2.1.3. |
“AffaMed” |
shall have the meaning ascribed to it in the preamble. |
“AffaMed Anti-Dilution Event” |
shall have the meaning ascribed to it in the Section 4.2.1. |
“AffaMed Anti-Dilution Protection” |
shall have the meaning ascribed to it in the Section 4.2.1. |
“AffaMed Anti-dilution Shares” |
shall have the meaning ascribed to it in the Section 4.2.1. |
“Affiliate”
|
shall mean, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person. In the case of the Investor, the term “Affiliate” also includes investment vehicles sponsored, managed and/or advised by such Investor or its Affiliate(s). Notwithstanding the foregoing, (x) the Group Company’s Affiliate shall exclude the private equity funds managed or advised by CBC Group Investment Management, Ltd. and its Affiliates, and their respective portfolio companies, and (y) for the purpose of this Agreement, except as otherwise expressly provided under this Agreement, no Group Company shall be deemed to be an Affiliate of a Stockholder and vice versa. |
“Agreement” |
shall have the meaning ascribed to it in the preamble. |
“Assigned Contracts” |
shall mean (a) the Exclusive License Agreement dated November 6, 2021 by and among AskGene and AffaMed; (b) the Safety Data Exchange Agreement dated August 25, 2022 by and among AskGene and AffaMed. |
“Auditors” |
shall mean, one of Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers appointed by the Company to prepare the audited accounts of the relevant Financial Year. |
“Automatic Conversion Event” |
shall mean, shall have the meaning ascribed to it in Section 8.3. |
“Board Reserved Matter” |
shall have the meaning ascribed to it in the Section 3.1. |
“Board” or “Board of Directors” |
shall mean the board of directors of the Company for the time being and from time to time. |
“Business Day” |
shall mean, any day that is not a Saturday, Sunday, legal holiday or other day on which commercial banks are required or authorized by applicable Law to be closed in Hong Kong, the State of Delaware, the State of New York, the PRC or Singapore. |
“Cash Preferred Stockholder” |
shall have the meaning ascribed to it in the Section 7.1.1. |
“Closing” |
shall have the meaning ascribed to it in the Subscription Agreement. |
“Closing Date” |
shall mean the date on which the consummation of the Closing takes place pursuant to the terms and conditions of the Subscription Agreement. |
“Common Share Equivalents” |
shall mean any Equity Security of the Company which is by its terms convertible into or exchangeable or exercisable for Common Shares or other share capital of the Company, including without limitation, the Preferred Shares. |
“Common Shares” |
shall mean the shares of Common Stock of the Company. |
“Common Stock” |
shall mean the Common Stock of the Company, |
“Common Stockholder” |
shall mean any holder of any Common Shares. |
“Company Notice” |
shall have the meaning ascribed to it in Section 5.2.2. |
“Company Option Period” |
shall have the meaning ascribed to it in Section 5.2.2. |
“Company’s Right of First Refusal” |
shall have the meaning ascribed to it in the Section 5.2.2. |
“Company” |
shall have the meaning ascribed to it in the preamble. |
“Confidential Information” |
shall mean (a) all information of a confidential nature that received from any other Parties, either directly or from any person associated with that Party; and (b) the existence, terms and subject matter of, and the negotiations relating to, the Transaction Documents. |
“Constitutional Documents” |
shall mean, with respect to a particular legal entity, the articles of incorporation, certificate of incorporation, formation or registration (including, if applicable, certificates of change of name), memorandum of association, articles of association, bylaws, articles of organization, limited liability company agreement, trust deed, trust instrument, operating agreement, joint venture agreement, business license, or similar or other constitutive, governing, or charter documents, or equivalent documents, of such entity. Unless the context provides otherwise, Constitutional Documents hereunder refer to the Constitutional Documents of the Company. |
“Contract”
|
shall mean a legally binding written contract, agreement, understanding, indenture, note, bond, loan, instrument, lease, mortgage, franchise, license, commitment, or purchase order. |
“Control”
|
of a given Person shall mean, the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by Contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing. |
“Conversion Price” |
shall have the meaning ascribed to it in Section 8.1. |
“Convertible Securities” |
shall mean any notes, debentures, preferred shares or other securities or rights which are ultimately convertible into or exchangeable for Common Shares. |
“Co-Sale Notice” |
shall have the meaning ascribed to it in Section 5.3.1. |
“Co-Sale Proportion” |
shall have the meaning ascribed to it in the Section 5.3.2. |
“Co-Sale Right” |
shall have the meaning ascribed to it in the Section 5.3.1. |
“Co-Sale Right Holder” |
shall have the meaning ascribed to it in the Section 5.3.1. |
“Co-Sale Shares” |
shall have the meaning ascribed to it in the Section 5.3.1. |
“Deed of Adherence” |
shall mean the form of deed of adherence set out in Schedule II. |
“Deemed Liquidation Event” |
shall mean any of the following events: (1) (i) the acquisition or sale of Equity Securities of the Group Companies taken as a whole in which in excess of fifty percent (50%) of the voting power of the Group Companies taken as a whole outstanding before such transaction is transferred, or (ii) any consolidation, amalgamation, merger, scheme of arrangement or reorganization of the Group Companies taken as a whole in which the Stockholders of the Company immediately prior to such consolidation, amalgamation, merger, scheme of arrangement or reorganization own less than fifty percent (50%) of the voting power of the Group Companies taken as a whole in the aggregate immediately after such consolidation, merger, amalgamation, scheme of arrangement or reorganization, in each case, excluding the sale of Equity Securities by any Preferred Stockholder that is made in compliance with Section 5.1 without the intention to sell the Group Companies (together with the other Stockholders) as a whole; (2) the sale, transfer or other disposition of all or substantially all of the assets or business of the Group Companies taken as a whole; or (3) the exclusive licensing, sale or transfer of all or substantially all of the Intellectual Properties of the Group Companies taken as a whole. |
“Demand Notice” |
shall have the meaning ascribed to it in Paragraph 1(a) of Schedule IV. |
“Demand Registration Statement” |
shall have the meaning ascribed to it in Paragraph 1(a) of Schedule IV. |
“Demand Registration” |
shall have the meaning ascribed to it in Paragraph 1(a) of Schedule IV. |
“Designated Holders” |
shall mean the Preferred Stockholders and any permitted transferees of Preferred Stockholders (and/or holders of any Common Shares converted from the Preferred Shares). |
“Director” |
shall mean a director for the time being of the Company including, where applicable, any alternate Director, and “Directors” shall be construed accordingly. |
“Disclosing Party” |
shall have the meaning ascribed to it in the Section 12.3. |
“Encumbrance” |
shall mean a mortgage, charge, pledge, Lien, option, restriction, right of first refusal, right of pre‑emption, third‑party right or interest, other encumbrance or security interest of any kind, or other type of preferential arrangement (including, without limitation, a title transfer or retention arrangement) having similar effect. |
“Equity Securities”
|
shall mean, with respect to any Person that is a legal entity, any and all shares of capital stock, membership interests, units, profits interests, ownership interests, equity interests, registered capital, and other equity securities of such Person, and any right, warrant, option, call, commitment, conversion privilege, preemptive right or other right to acquire any of the foregoing, or security convertible into, exchangeable or exercisable for any of the foregoing, or any Contract providing for the acquisition of any of the foregoing. Unless the context provides otherwise, the Equity Securities hereunder refer to the Equity Securities of the Company. |
“ESOP” |
shall mean any employee share option plan, equity-based employee incentive, purchase or participation arrangement, contract, or plan or any benefit plan of any Group Company for the benefit of any employee, officer, director, contract labor, advisor or consultant of any Group Company, in each case adopted by the Board in accordance with the Constitutional Documents and this Agreement from time to time. |
“Exchange Act” |
shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. |
“Exempted Period” |
shall have the meaning ascribed to it in Paragraph 3 of Schedule IV. |
“Financial Year” |
shall mean, a financial year of the Company ending 31 December. |
“First Participation Acceptance Notice” |
shall have the meaning ascribed to it in the Section 4.1.2. |
“First Participation Notice” |
shall have the meaning ascribed to it in Section 4.1.2. |
“First Participation Period” |
shall have the meaning ascribed to it in Section 4.1.2. |
“Governmental Authority” |
shall mean any government of any nation, federation, province or state or any other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of government, including any government authority, agency, department, board, commission or instrumentality of any country, or any political subdivision thereof, and any court, tribunal or arbitrator. |
“Governmental Order”
|
shall mean any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority. |
“Group Company” |
shall mean any of the Company and any Subsidiaries of the Company, and “Group” refers to all of the Group Companies collectively. |
“HKIAC” |
shall have the meaning ascribed to it in Section 14.5.1. |
“HKIAC Rules” |
shall have the meaning ascribed to it in Section 14.5.1. |
“Hong Kong” |
shall mean the Hong Kong Special Administrative Region of the People’s Republic of China. |
“IFRS” |
shall mean the International Financial Reporting Standards issued and/or adopted by the International Accounting Standards Board from time to time. |
“IMAB” |
shall have the meaning ascribed to it in the preamble. |
“IMAB Accepted New Securities” |
shall have the meaning ascribed to it in the Section 4.1.2. |
“IMAB Pro Rata Participation Right” |
shall have the meaning ascribed to it in Section 4.1.1. |
“IMAB Pro Rata Share” |
shall mean the ratio of (i) the number of Common Shares (on an as-converted basis) owned by IMAB on the date of the relevant First Participation Notice to (ii) the Company’s total number of the issued Common Shares (on an as-converted basis) outstanding on the same date. |
“Indemnified Party” |
shall have the meaning ascribed to it in Paragraph 5(b) of Schedule IV. |
“Indemnifying Party” |
shall have the meaning ascribed to it in Paragraph 5(b) of Schedule IV. |
“Intellectual Property” |
shall mean any and all (a) patents, patent rights and applications therefor and reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof, (b) inventions (whether patentable or not), discoveries, improvements, concepts, innovations and industrial models, (c) copyrightable works, mask works and works of authorship (including rights in artwork, computer programs, source code, object code, firmware, development tools, files, records and data, and related documentation) and registrations and applications therefor, (d) URLs, web sites, web pages and any part thereof, (e) technical information, know-how, trade secrets, drawings, designs, design protocols, specifications, proprietary data, customer lists, databases, proprietary processes, technology, formulae, and algorithms and other proprietary right, (f) trade names, trade dress, trademarks, domain names, service marks, logos, business names, and registrations and applications therefor, and (g) the goodwill symbolized or represented by the foregoing. |
“Investor” or “Investors” |
shall have the meaning ascribed to it in the preamble. |
“IPO” |
shall mean an initial public offering or any other admission to trading of the shares of Common Stock |
|
or other Shares of (a) the Company (or as the case may be, the Equity Securities of the relevant entity resulting from any merger, reorganization or other arrangements made by or to the Company for the purposes of the initial public offering), or (b) another Group Company (approved by IMAB in writing) holding, directly or indirectly, all or a substantial portion of the shares or equity interests of the Company and/or any of its Subsidiaries or the undertakings of the Group. |
“Law” or “Laws” |
shall mean any and all provisions of any applicable constitution, treaty, statute, law, regulation, ordinance, code, rule, or rule of common law, any governmental approval, concession, grant, franchise, license, agreement, directive, requirement or other governmental restriction, or any regulations, rules, measures, guidelines, treaties, judgments, determination, orders or notices of any stock exchange, in each case as amended, and any and all applicable Governmental Orders. |
“Lien”
|
shall mean any claim, mortgage, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others, or restriction (whether on voting, sale, transfer, disposition or otherwise), whether imposed by Contract, understanding, law, equity or otherwise. |
“Majority Preferred Directors” |
shall mean, (a) when the Board only has one (1) Preferred Director, such Preferred Director; and (b) when the Board has more than one (1) Preferred Directors, the majority of all Preferred Directors. |
“Managing Underwriter” |
shall have the meaning ascribed to it in Paragraph 1(b) of Schedule IV. |
“Maximum Number of Securities” |
shall have the meaning ascribed to it in Paragraph 1(b) of Schedule IV. |
“New Issue Price” |
shall have the meaning ascribed to it in the Section 4.1.2. |
“New Issue Terms” |
shall have the meaning ascribed to it in the Section 4.1.2. |
“New Securities” |
shall mean any Equity Securities of the Company (including, without limitation, any Common Shares or Series A Preferred Shares) to be issued (or deemed |
|
to be issued) by the Company after the Closing Date, other than: the Series A Preferred Shares issued to AffaMed pursuant to Section 4.2; (4) (i) any of the options, warrants or other securities arrangements to purchase any Common Shares issued from time to time to the employees, officers, directors, contractors, advisors or consultants of the Group Companies pursuant to the ESOP; and (ii) any Common Shares issuable upon exercise or conversion of the forgoing options, warrants or other securities arrangements; any Shares issued in connection with any share split, share dividend or any subdivision of the Shares or other similar events in which all the Preferred Stockholders are entitled to participate on a pro rata basis; any Equity Securities issued pursuant to a Qualified IPO; and the Common Shares issued upon the conversion of any Series A Preferred Shares. |
“New Stockholder” |
shall have the meaning ascribed to it in Section 4.3.1. |
“Offered Price” |
shall have the meaning ascribed to it in the Section 5.2.1. |
“Offered Shares” |
shall have the meaning ascribed to it in Section 5.2.1. |
“Offered Terms” |
shall have the meaning ascribed to it in the Section 5.2.1. |
“Option Period” |
shall have the meaning ascribed to it in Section 5.2.3. |
“Options” |
shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Shares or Convertible Securities. |
“Over-Purchase Notice” |
shall have the meaning ascribed to it in the Section 5.2.3. |
“Over-Purchasing Stockholder” |
shall have the meaning ascribed to it in Section 5.2.3. |
“Ownership Percentage” |
shall mean, in relation to any Stockholder and at any time, the total number of Shares held by such |
|
Stockholder at that time expressed as a percentage of all issued and outstanding Shares of the Company as at that time. |
“Participating Demand Holder” |
shall have the meaning ascribed to it in Paragraph 1(a) of Schedule IV. |
“Party” or “Parties” |
shall have the meaning ascribed to it in the preamble. |
“Permitted Transferee” |
shall have the meaning ascribed to it in Section 5.5.1. |
“Person”
|
shall mean any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity. |
“Piggy-Back Registration Statement” |
shall have the meaning ascribed to it in Paragraph 2(a) of Schedule IV. |
“Piggy-Back Registration” |
shall have the meaning ascribed to it in Paragraph 2(a) of Schedule IV. |
“PRC” |
shall mean the People’s Republic of China excluding, for the purposes of this Agreement, Hong Kong, Macau and Taiwan. |
“Preferential Dividend” |
shall have the meaning ascribed to it in Section 6.1. |
“Preferred Director” |
shall have the meaning ascribed to it in Section 2.1.1(c). |
“Preferred Stockholder Option Period” |
shall have the meaning ascribed to it in Section 5.2.3. |
“Preferred Stockholder” |
shall mean any holder of the Series A Preferred Shares. |
“Pro Rata Share” |
shall mean, in respect of a Preferred Stockholder, as at the relevant time of determination, the ratio of (i) the number of Common Shares (on an as-converted basis) owned by such Preferred Stockholder at such time to (ii) the total number of Common Shares (on an as-converted basis) held by all Preferred Stockholders at the same time. |
“Proposed Sale” |
shall have the meaning ascribed to it in Section 5.6.4. |
“Prospective Transferee” |
shall mean any Person to whom any Stockholder intends to transfer its Equity Securities of the Company. |
“Qualified IPO” |
shall mean an IPO at the New York Stock Exchange, the Nasdaq Global Market System, the Main Board of the Hong Kong Stock Exchange, or any other internationally recognized exchange or quotation system that is approved in writing by IMAB (each, an “Qualified Exchange”), and in any case with (a) the offer price per share of such an IPO being not lower than three (3) times of the Series A Issue Price (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions); and (b) the gross proceeds (before deduction of underwriters' commission and expenses) raised through such IPO by the Group being not less than US$50,000,000. |
“Receiving Party” |
shall have the meaning ascribed to it in Section 12.3. |
“Redeeming Preferred Shares” |
shall have the meaning ascribed to it in Section 9.1. |
“Redemption Initiating Holder” |
shall have the meaning ascribed to it in Section 9.1. |
“Redemption Price” |
shall have the meaning ascribed to it in Section 9.2. |
“Redemption Request” |
shall have the meaning ascribed to it in Section 9.1. |
“Registrable Securities” |
shall mean (a) the Preferred Shares (and/or any Common Shares converted therefrom) and any other Shares held from time to time by a Designated Holder; and (b) any Equity Securities issuable or issued or distributed in respect of any of the Shares identified in paragraph (a) by way of share dividend or share split or in connection with a combination of shares, recapitalization, reorganization, merger, consolidation or otherwise. For purposes of this Agreement, Registrable Securities shall cease to be Registrable Securities when a Registration Statement covering such Registrable Securities has been declared effective under the Securities Act or under the securities laws or rules applicable to an offering of Securities on a Qualified Exchange and such Registrable Securities have been disposed of pursuant to such effective Registration Statement. |
“Registration Statement” |
shall mean the Demand Registration Statement and/or the Piggy-Back Registration Statement, as the case may be. |
“Remaining Offered Shares” |
shall have the meaning ascribed to it in the Section 5.2.2. |
“Restricted Common Stockholder” |
shall mean any Common Stockholder holding no less than 1% of the Company’s outstanding Shares (on an as-converted basis). |
“Sale of the Company” |
shall have the meaning ascribed to it in the Section 5.6.1. |
“SEC” |
shall mean the Securities and Exchange Commission of the United States of America (or any successor thereto). |
“Second Participation Acceptance Notice” |
shall have the meaning ascribed to it in the Section 4.1.4. |
“Second Participation Notice” |
shall have the meaning ascribed to it in the Section 4.1.4. |
“Second Participation Period” |
shall have the meaning ascribed to it in the Section 4.1.4. |
“Secondary Notice” |
shall have the meaning ascribed to it in the Section 5.2.2. |
“Secondary Participant Accepted New Securities” |
shall have the meaning ascribed to it in the Section 4.1.4. |
“Secondary Participants Pro Rata Share” |
shall mean, in respect of a Secondary Pro Rata Participant, the ratio of (i) the number of Common Shares (on an as-converted basis) owned by such Secondary Pro Rata Participant on the date of the relevant Second Participation Notice to (ii) the total number of Common Shares (on an as-converted basis) held by all the Secondary Pro Rata Participants on the same date. |
“Secondary Pro Rata Participants” |
shall have the meaning ascribed to it in Section 4.1.3. |
“Secondary Pro Rata Participation Right” |
shall have the meaning ascribed to it in Section 4.1.3. |
“Secondary Right of First Refusal” |
shall have the meaning ascribed to it in the Section 5.2.3. |
“Securities Act” |
shall mean the Securities Act of 1933 of the United States of America, as amended, and all rules and regulations promulgated thereunder. |
“Selling Investors” |
shall have the meaning ascribed to it in the Section 5.6.2. |
“Selling Stockholder” |
shall have the meaning ascribed to it in the Section 5.3.1. |
“Series A Financing” |
shall have the meaning ascribed to it in the recitals. |
“Series A Issue Price” |
shall mean the initial subscription price per share that the Investors pay for the Series A Preferred Shares at Closing which is US$1.0571 per Series A Preferred Share (as adjusted for any stock dividend, stock split, combination of stock, reorganization, recapitalization, reclassification or other similar event). |
“Series A Preference Amount (Cash)” |
shall have the meaning ascribed to it in the Section 7.1.1. |
“Series A Preference Amount (In-Kind)” |
shall have the meaning ascribed to it in the Section 7.1.2. |
“Series A Preferred Shares” or “Preferred Shares” |
shall mean the shares of Series A Preferred Stock. |
“Series A Preferred Stock” or “Preferred Stock” |
shall mean the series A preferred stock of the Company, with the rights and privileges attached to such stock as set out in the Constitutional Documents. |
“Share Sale” |
shall have the meaning ascribed to it in the Section 5.6.1. |
“Shares” |
shall mean the shares of the Company’s stock of any or all series or classes as the context may require, and “Share” shall mean any of them. |
“Stockholder Reserved Matter” |
shall have the meaning ascribed to it in the Section 3.2. |
“Stockholder” |
shall mean, any holder of a Share of the Company for the time being. |
“Subscription Agreement” |
shall have the meaning ascribed to it in the recitals. |
“Subsidiary”
|
shall mean, with respect to any given Person, any other Person that is Controlled directly or indirectly by such given Person. |
“Transaction Documents” |
shall mean this Agreement, the Subscription Agreement, the Constitutional Documents and each |
|
of the other agreements and documents otherwise required in connection with implementing the transactions contemplated by any of the foregoing. |
“Transfer Notice” |
shall have the meaning ascribed to it in Section 5.2.1. |
“Transfer” |
shall have the meaning ascribed to it in Section 5.1. |
“Transferor” |
shall have the meaning ascribed to it in Section 5.2.1. |
“Tribunal” |
shall have the meaning ascribed to it in the Section 14.5.2. |
“Unpurchased New Securities” |
shall have the meaning ascribed to it in Section 4.1.3. |
“Unpurchased Offered Shares” |
shall have the meaning ascribed to it in Section 5.2.3. |
“US$” |
shall mean the lawful currency of the United States of America (“U.S.”). |
Schedule VII
FORM OF DEED OF ADHERENCE
THIS DEED (this “Deed”) is made the [●] day of [●] by [●] of [●] (the “New Stockholder”) and is supplemental to the Stockholders Agreement dated [●] made between the Company and the Investors (as defined therein) (such agreement as amended, restated or supplemented from time to time, the “Stockholders Agreement”).
WITNESSETH as follows:
1.
The “Effective Date” means the date of this Deed.
2.
The New Stockholder confirms that it has been supplied with a copy of the Stockholders Agreement and of all amendments, restatements and supplements thereto and hereby covenants with [Investor] (delete as appropriate) and the Company to, with effect from the Effective Date, observe, perform and be bound by all the terms and conditions of the Stockholders Agreement [(other than [●] thereof)] which are capable of applying to the New Stockholder to the intent and effect that the New Stockholder shall be deemed as and with effect from the date hereof to be a party to the Stockholders Agreement as if the New Stockholder were named in the Stockholders Agreement as holding [number of securities] [class of securities] [Shares][Securities] [in place of the transferor].
3.
The address at which notices are to be served on the New Stockholder under the Stockholders Agreement and the person for whose attention notices are to be addressed are as follows: [●].
4.
This Deed is made for the benefit of: (a) the Parties to the Stockholders Agreement; and (b) every other Person who after the date of the Stockholders Agreement (and whether before or after the execution of this Deed) assumes any rights or obligations under the Stockholders Agreement or adheres to it.
5.
Words and expressions defined in the Stockholders Agreement shall have the same meaning in this Deed. This Deed shall be governed by and construed in accordance with the laws of the State of Delaware.
IN WITNESS whereof the New Stockholder have executed this Deed the day and year first above written.
THE COMMON SEAL of [●])
was hereunto affixed )
in the presence of: )
__________________________
(Director)
__________________________
(Director/Secretary)
Schedule VIII
ADDRESS FOR NOTICES
If to the Company:
Visara, Inc.
c/o I-MAB
2440 Research Boulevard, Suite 400, Rockville, MD 20850
Attention: [***]
[***]
With a copy to:
Visara, Inc.
c/o ABio-X Holdings, Inc.
117 Kendrick Street, Suite 400
Needham, MA 02494
Attention: [***]
[***]
Copy: [***]
If to IMAB:
Address: 2440 Research Boulevard, Suite 400, Rockville, MD 20850
Attention: [***]
Email: [***]
If to AffaMed:
Address: Unit 2002, 20/F, Nexxus Building, No. 41 Connaught Road, Central, Hong Kong S.A.R., China
Attention: [***]
Email: [***]
Schedule IX
Registration Rights
1.
Demand Registration
(a)
At any time after the earlier of (i) five (5) years after the Closing Date and (ii) one hundred eighty (180) days after the effective date of the registration statement for an IPO, upon receipt of a written request from any Designated Holder, requesting that the Company effect a registration (a “Demand Registration”) under the Securities Act (including without limitation, registration on Form F-1 or Form S-1, or (if the Company so qualifies) registration on Form F-3 or Form S-3) covering at least forty percent (40%) and up to all of the Registrable Securities and specifying the intended method or methods of disposition thereof, the Company shall (x) within ten (10) days after receipt of a written request for a Demand Registration, give written notice thereof (the “Demand Notice”) to all other holders of Registrable Securities other than the Designated Holder, and (y) as expeditiously as reasonably possible, but in any event no later than one hundred and eighty (180) days to the extent possible (excluding any days which occur during a permitted Exempted Period under paragraph 3 below) after receipt of a written request for a Demand Registration, file with the SEC and use its best efforts to cause to be declared effective a registration statement (a “Demand Registration Statement”) relating to all shares of Registrable Securities which the Company has been so requested to register by such Designated Holder for sale, together with any additional Registrable Securities requested to be included in such registration by any other holders of Registrable Securities (each, a “Participating Demand Holder”), as specified by notice given by each such Participating Demand Holder to the Company within twenty (20) days of the date the Demand Notice is given (but subject to paragraphs 1(b) and 2(c) below), to the extent required to permit the disposition (in accordance with the intended method or methods thereof, as aforesaid) of the Registrable Securities so registered.
(b)
The public offering shall be underwritten with a managing underwriter selected by the Company and reasonably satisfactory to the Participating Demand Holders holding a majority in interest of the Registrable Securities (the “Managing Underwriter”) (provided that the Participating Demand Holders shall not unreasonably refuse the selection of the Company) and if such Managing Underwriter of such Demand Registration advises the Company in writing that, in its opinion, the number of Securities to be included in such offering is greater than the total number of Securities which can be sold therein without having a material adverse effect on the distribution of such securities or otherwise having a material adverse effect on the marketability thereof (the “Maximum Number of Securities”), then the Company shall include in such Demand Registration the Registrable Securities that the Participating Demand Holders have requested to be registered thereunder only to the extent the number of such Registrable Securities does not exceed the Maximum Number of Securities. If such amount exceeds the Maximum Number of Securities, the number of Registrable Securities included in such Demand Registration shall
be allocated among all the Participating Demand Holders on a pro rata basis (based on the number of Registrable Securities held by each Participating Demand Holder). If the amount of such Registrable Securities does not exceed the Maximum Number of Securities, the Company may include in such Demand Registration any other Securities of the Company and other Securities held by other security holders of the Company, as the Company may in its discretion determine or be obligated to allow, in an amount which together with the Registrable Securities included in such Demand Registration shall not exceed the Maximum Number of Securities. However, in no event shall the Company include, in the applicable offering (other than an IPO), less than thirty percent (30%) of aggregate number of the Registrable Securities that the Designated Holder has requested to be registered. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Participating Demand Holder to the nearest one hundred (100) shares. For purposes of this paragraph 1, a registration shall not be counted as “effected” if, as a result of an exercise of the Managing Underwriter’s cutback provisions in paragraph 1(b), fewer than fifty percent (50%) of the total number of Registrable Securities that Designated Holders have requested to be included in such registration statement are actually included.
(c)
The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this paragraph 1, (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected three (3) registrations pursuant to this paragraph 1. A registration shall not be counted as “effected” for purposes of this paragraph 1(c) until such time as the applicable registration statement has been declared effective by the SEC.
(d)
Notwithstanding anything to the contrary, Form F-3 or Form S-3 registrations shall not be deemed to be demand registrations on Form F-1 and Form S-1. Except as otherwise provided herein, there shall be no limit on the number of times the Designated Holders may request registration of Registrable Securities on Form F-3 or Form S-3; provided that the Designated Holders shall not request for more than twice within a Financial Year.
2.
Piggy-Back Rights
(a)
If the Company proposes to file on its behalf and/or on behalf of any holder of its Securities a registration statement under the Securities Act for the registration of Common Shares (a “Piggy-Back Registration”), it will promptly give written notice to all holders of Registrable Securities at least thirty (30) days before the filing with the SEC of any such piggy-back registration statement (a “Piggy-Back Registration Statement”), which notice shall set forth the intended method of disposition of the Securities proposed to be registered by the Company. The notice shall offer to include in such filing the aggregate number of shares of Registrable Securities as any Designated Holders may request.
(b)
Each Designated Holder desiring to have Registrable Securities registered under this paragraph 2 shall advise the Company in writing within twenty (20) days after the date of receipt of such offer from the Company, setting forth the amount of such Registrable Securities for which registration is requested. The Company shall thereupon include in such filing the number or amount of Registrable Securities for which registration is so requested, subject to paragraph 2(c), and shall use its reasonable efforts to effect registration of such Registrable Securities under the Securities Act.
(c)
If the Piggy-Back Registration relates to an underwritten public offering and the Managing Underwriter advises in writing that, in its opinion, the amount of Registrable Securities requested to be included in the Piggy-Back Registration in addition to the Equity Securities being registered by the Company would be greater than the Maximum Number of Securities (having the same meaning as defined in paragraph 1 but replacing the term “Demand Registration” with “Piggy-Back Registration”), then the Company shall include in such Piggy-Back Registration in the following order: first, the Registrable Securities of the Designated Holder(s); second, the Registrable Securities of any other Participating Demand Holder, in an amount which together with the Securities that the Designated Holder(s) proposes to register, shall not exceed the Maximum Number of Securities, such amount to be allocated among such other Participating Demand Holders on a pro rata basis (based on the number of Securities of the Company held by each such Participating Demand Holders); and third, any Registrable Securities the Company proposes to register, in an amount which together with the Registrable Securities the Designated Holder(s) and all other Participating Demand Holders propose to register, shall not exceed the Maximum Number of Securities. However, in no event shall the Company include, in the applicable offering (other than an IPO), less than thirty percent (30%) of aggregate number of the Registrable Securities that the Designated Holder has requested to be registered.
(d)
Registration pursuant to this paragraph 2 shall not be deemed to be a demand registration on Form F-1 and Form S-1as described in paragraph 1. There shall be no limit on the number of times any Designated Holder may request registration of Registrable Securities under this paragraph 2.
3.
Exempted Periods
The Company shall have the right to delay the filing or effectiveness of a Registration Statement required pursuant to paragraphs 1 or 2 hereof during no more than one (1) period of not more than thirty (30) days in any twelve-month period (an “Exempted Period”), provided that the Company may not register any of its other Securities during such period in the event that: (a) the Company would, pursuant to the advice of its outside counsel, be required to disclose in the prospectus information not otherwise then required by applicable Laws to be publicly disclosed; and (b) in the reasonable judgment of the Board, there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect or interfere with any financing, acquisition, merger, disposition of assets (not in the ordinary course of business), corporate reorganization or other similar transaction involving the Company. The Company shall promptly give all holders of Registrable Securities written notice of such determination containing in
reasonable detail a statement of the reasons for such postponement and an approximation of the anticipated delay.
4.
Expenses
All expenses incurred in connection with each registration pursuant to paragraphs 1 and 2, excluding underwriters’ discounts and commissions, but including without limitation all registration, filing and qualification fees, word processing, duplicating, printers' and accounting fees (including the expenses of any special audits or “comfort” letters required by or incident to such performance and compliance), listing fees, messenger and delivery expenses, all fees and expenses of complying with state securities or blue sky laws, fees and disbursements of counsel for the Company, fees and expenses of the Company and the underwriters relating to “road show” investor presentations, and the reasonable fees and disbursements, not to exceed US$75,000 per registration, of one counsel for all Participating Demand Holders (which counsel shall be selected by the Designated Holders holding a majority in interest of the Registrable Securities), shall be paid by the Company, except that:
(a)
all such expenses in connection with any amendment or supplement to a Registration Statement or prospectus filed more than thirty (30) days after the effective date of such Registration Statement because any Designated Holder has not effected the disposition of the Securities requested to be registered shall be paid by such Designated Holder;
(b)
if the registration request is subsequently withdrawn at the request of any Designated Holder, the Company shall not be required to pay for any expenses of such registration;
(c)
the Participating Demand Holders shall bear and pay the underwriting commissions and discounts applicable to Securities offered for their account in connection with any registrations, filings and qualifications made pursuant to this Agreement; and
(d)
if paragraph1 applies, other than in connection with an IPO, in circumstances where only the Registrable Securities of a Participating Demand Holder are included in the registration (and no other Securities are included in the registration, whether pursuant to paragraph 2 or otherwise), the Participating Demand Holder shall be liable to pay all of the expenses (including without limitation all registration, filing and qualification fees) incurred by the Company in connection with such Demand Registration.
5.
Indemnification and Contribution
(a)
In the event of a registration under this Agreement, to the maximum extent permitted by applicable Laws, the Company shall indemnify and hold harmless each holder of Registrable Securities, such holder’s partners, directors, officers, legal counsel, each person who participates in the offering of such Registrable Securities, including underwriters (as defined in the Securities Act), and each person, if any, who controls such holder or participating person within the meaning of the Securities Act, against any Losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities Act or
otherwise, insofar as such Losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based on (i) any untrue or alleged untrue statement of any material fact contained in such registration statement (including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto), (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any United States federal or state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any United States federal or state securities law in connection with the offering covered by such registration statement, and the Company shall reimburse each such holder of Registrable Securities, such holder's partners, directors, officers, legal counsel, underwriter, any participating person or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to any holder of Registrable Securities, such holder’s directors and officers, participating person or controlling person in any such case for any such Loss, claim, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in connection with such registration statement, preliminary prospectus, final prospectus or amendments or supplements thereto, in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such holder, such holder’s directors and officers, participating person or controlling person; provided, further, that the Company shall not be liable to any holder of Registrable Securities, such holder's directors and officers, participating person or controlling person in any such case for any such Loss, claim, damage, liability or action to the extent that it arises out of or in connection with any fraud or intentional misconduct by any such holder, such holder's directors and officers, participating person or controlling person. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any such holder, such holder’s directors and officers, participating person or controlling person, and shall survive the transfer of such Securities by such holder.
(b)
Any person entitled to indemnification hereunder (an “Indemnified Party”) agrees to give prompt written notice to the indemnifying party (the “Indemnifying Party”) after the receipt by such Indemnified Party of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such Indemnified Party intends to claim indemnification or contribution pursuant to this Agreement; provided that the failure so to notify such Indemnified Party shall not relieve the Indemnifying Party of any liability that it may have to the Indemnifying Party hereunder unless such failure is materially prejudicial to the Indemnifying Party. If notice of commencement of any such action is given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, to assume the defense of such action at its own expense, with counsel chosen by it and reasonably satisfactory to such Indemnified Party. An Indemnified Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be paid by such Indemnified Party unless: (i) the Indemnifying Party agrees to pay the same; (ii) the Indemnifying Party fails to assume the defense of such action; or (iii) the named parties to any such action (including any impleaded parties) have been advised by such counsel that either: (A) representation of such Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under applicable standards of professional conduct; or (B) there are one or more legal defenses available to it which are substantially different from or additional to those available to the Indemnifying Party. No Indemnifying Party shall be liable for any settlement entered into without its written consent, which consent shall not be unreasonably withheld.
(c)
If the indemnification provided for in this paragraph 5(b) from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any Losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party in connection with the actions which resulted in such Losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and such Indemnified Parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. If the allocation provided in this paragraph 5(b) is not permitted by applicable Law, the parties shall contribute based upon the relevant benefits received by the Company from the initial offering of the Registrable Securities on the one hand and the net proceeds received by the holders of Registrable Securities from the sale of Registrable Securities on the other. The parties hereto agree that it would not be just and equitable if contribution pursuant to this paragraph 5(b) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in paragraph 5(b). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(d)
The agreements contained in this paragraph 5(b) shall survive the transfer of the Registrable Securities by any holder of Registrable Securities and sale of all the Registrable Securities pursuant to any registration statement and shall remain in full force and effect, regardless of any investigation made by or on behalf of any holder of Registrable Securities or such director, officer or participating or controlling person.
6.
Non-U.S. Registration Rights
The foregoing provisions of this Schedule IV shall apply mutatis mutandis in respect of any registration of Registrable Securities in any jurisdiction other than the United States, together with such changes thereto as may be necessary or appropriate to reflect the applicable customs, practices and legal requirements in such jurisdiction; provided that: (a) for purposes of this Schedule IV, the defined term “IPO” shall be deemed to mean that a registration statement comparable to a registration statement on Form S-1 or Form F-1 has been filed, and Securities of the Company are publicly traded in the jurisdiction with respect to which a request for registration is being made; and (b) paragraph 4(d) shall only apply in respect of a registration of Registrable Securities under the Securities Act.
7.
Successors and Assigns; Third Party Beneficiaries
The registration rights of any Designated Holder with respect to any Registrable Securities shall be transferred to any person who is the transferee of such Registrable Securities in accordance with this Agreement. All of the obligations of the Company hereunder shall survive any such Transfer. Except as provided in paragraph 5, no Person other than the Parties hereto and their successors and permitted assigns is intended to be a beneficiary of the rights hereunder.
Exhibit 1.2
Confidential
Execution Version
CERTAIN INFORMATION (INDICATED BY “[***]”) HAS BEEN EXCLUDED FROM THIS AGREEMENT BECAUSE (I) SUCH INFORMATION IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.
Assignment and Assumption Agreement
This Assignment and Assumption Agreement ("Agreement") dated as of October 14, 2025, is entered into by and between AffaMed Therapeutics (HK) Limited, a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK ("Assigning Party") and Visara, Inc., a Delaware corporation with a registered office at 1209 Orange Street, City of Wilmington, County of New Castle, 19801 ("Assuming Party").
WHEREAS, Assigning Party desires to assign to Assuming Party all of its rights and to delegate to Assuming Party all of its obligations under those certain contracts as described on Schedule 1 attached hereto ("Assigned Contracts"); and
WHEREAS, Assuming Party desires to accept such assignment of rights and delegation of obligations under the Assigned Contracts.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set out herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.
Assignment and Assumption.
1.1
Assignment. Effective as of the date that I-MAB pays its Subscription Price (as defined in the Subscription Agreement) to Assuming Party pursuant to the Series A Preferred Stock Subscription Agreement (the “Subscription Agreement”) dated on or around the date hereof by and among Assigning Party, Assuming Party and I-MAB (the “Effective Date”), Assigning Party irrevocably sells, assigns, grants, conveys, and transfers to Assuming Party all of Assigning Party's right, title, and interest in and to the Assigned Contracts.
1.2
Assumption. As of the Effective Date, Assuming Party unconditionally accepts such assignment and assumes all of Assigning Party's duties, liabilities, and obligations under the Assigned Contracts, and agrees to pay, perform, and discharge, as and when due, all of the obligations of Assigning Party under the Assigned Contracts accruing on and after the Effective Date, including but not limited to, any and all applicable development and sales milestone payments and royalty payments obligations of the Assigning Party under the Assigned Contracts.
1.3
Third Party Payment. For clarity, Assigning Party shall be responsible for any and all applicable third-party payment obligations incurred under the Assigned Contracts prior to the Effective Date, including but not limited to, the payments that are payable by Assigning Party or its Affiliates to any third party(ies); and Assuming Party shall be responsible for any and all applicable third-party payment obligations incurred under the Assigned Contracts on
and after the Effective Date, including but not limited to, the payments that are expected to be payable by Assuming Party or its Affiliates to any third party(ies).
2.
Consideration in Equity and Control. Assigning Party will own Assuming Party’s preferred stock and have the right to appoint one (1) member of Assuming Party’s Board of Directors, in each case subject to the terms and conditions of the Subscription Agreement and the other Transaction Documents (as defined in the Subscription Agreement).
3.
Consideration in Cash. 1) Assuming Party shall pay a non-refundable, one-time USD $5,000,000.00 to Assigning Party within sixty (60) days of the Effective Date. Upon the Closing (as defined in the Subscription Agreement) and the payment by I-MAB of its Subscription Price to Assuming Party pursuant to the Subscription Agreement, Assigning Party shall issue to Assuming Party an invoice in the amount of USD $5,000,000.00, and Assuming Party shall pay such invoice within thirty (30) days of its receipt. 2) In the event that Assuming Party enters into a partnership with a third party on the exploitation of any of its products and receives cash income from the partnership, the Board of Directors of the Assuming Party, subject to the then-required shareholders’ consent of Assuming Party, shall declare dividends in accordance with (and subject to) the terms of the Stockholders Agreement (as defined in the Subscription Agreement) and the Constitutional Documents (as defined in the Subscription Agreement) of Assuming Party.
4.
Representations and Warranties.
4.1
Assigning Party's Representations and Warranties. Assigning Party represents and warrants as follows:
(a)
It is duly organized, validly existing, and in good standing under the laws of Hong Kong.
(b)
It has the full right, corporate power, and authority to enter into this Agreement and to perform its obligations hereunder.
(c)
It has taken all necessary corporate action to authorize the execution of this Agreement by its representative whose signature is set out at the end hereof.
(d)
Its execution, delivery, and performance of this Agreement will not violate, conflict with, require consent under, or result in any breach or default under the provisions of any contract or agreement to which it is a party.
(e)
When executed and delivered by it, this Agreement will constitute the legal, valid, and binding obligation of Assigning Party, enforceable against it in accordance with its terms.
(f)
It is the sole legal and beneficial owner of the all the rights under the Assigned Contracts on the Effective Date, free and clear of any lien, security interest, charge, or encumbrance.
2
(g)
The Assigned Contracts have not been amended or modified as of the Effective Date.
(h)
The Assigned Contracts are in full force and effect on the Effective Date. No event or condition has occurred that is an event of default or termination under the Assigned Contracts. There are no material disputes, pending or threatened, related to any rights or obligations transferred under this Agreement.
(i)
It has performed all of its obligations under the Assigned Contracts that are required to be performed on or before the Effective Date.
4.2
Assuming Party's Representations and Warranties. Assuming Party represents and warrants as follows:
(a)
It is duly organized, validly existing, and in good standing under the laws of Cayman Islands.
(b)
It has the full right, corporate power, and authority to enter into this Agreement and to perform its obligations hereunder.
(c)
It has taken all necessary corporate action to authorize the execution of this Agreement by its representative whose signature is set out at the end hereof.
(d)
When executed and delivered by it, this Agreement will constitute the legal, valid, and binding obligation of Assuming Party, enforceable against it in accordance with its terms.
4.3
Assuming Party covenants and undertakes that upon and after the Effective Date, it will perform and comply with all the terms of the Assigned Contracts.
5.
Indemnification.
5.1
Mutual Indemnification. Subject to the terms and conditions set out in 45.2, Assigning Party and Assuming Party (as Indemnifying Party") shall indemnify, hold harmless, and defend each other and their respective officers, directors, employees, agents, affiliates, successors and permitted assigns (collectively, "Indemnified Party") against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorney fees, that are incurred by Indemnified Party (collectively, "Losses"), resulting from any third-party claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or other, whether at law, in equity or otherwise ("Claim") or any direct Claim against Indemnifying Party alleging:
(a)
a material breach or non-fulfillment of any material representation, warranty, or covenant under/representation or warranty set out in this Agreement by Indemnifying Party;
3
(b)
any grossly negligent or more culpable act or omission of Indemnifying Party or any of its representatives (including any reckless or willful misconduct) in connection with the performance of its obligations under this Agreement;
(c)
any bodily injury, death of any person, or damage to real or tangible personal property caused by the grossly negligent or more culpable acts or omissions of Indemnifying Party or its representatives (including any reckless or willful misconduct); or
(d)
any failure by Indemnifying Party to materially comply with any applicable federal, state, or local laws, regulations, or codes in the performance of its obligations under this Agreement.
5.2
Exceptions and Limitations on Indemnification. Despite anything to the contrary in this Agreement, Indemnifying Party is not obligated to indemnify or defend Indemnified Party against any Claim if such Claim or the corresponding Losses arise out of or result from Indemnified Party's:
(a)
Gross negligence or more culpable act or omission (including recklessness or willful misconduct); or
(b)
Failure to materially comply with any of its material obligations set out in this Agreement.
6.
Miscellaneous.
6.1
Further Assurances. On the other party's reasonable request, each party shall, at its sole cost and expense, execute and deliver all such further documents and instruments, and take all such further acts, necessary to give full effect to this Agreement.
6.2
Notices. Each party shall deliver all notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a "Notice") in writing and addressed to the other party at its address set out below (or to such other address that the receiving party may designate from time to time in accordance with this section). Each party shall deliver all Notices by personal delivery, nationally recognized overnight courier (with all fees pre-paid), or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) on receipt by the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.
Notice to Assigning Party: |
Unit 2002, 20/F, Nexxus Building, No. 41 Connaught Road, Central, Hong Kong S.A.R., China |
|
Email: [***] |
|
Attention: [***] |
4
Notice to Assuming Party: |
Visara, Inc. c/o I-MAB 2440 Research Boulevard, Suite 400, Rockville, MD 20850 |
|
Attention: [***] [***] With a copy to: Visara, Inc. c/o ABio-X Holdings, Inc. 117 Kendrick Street, Suite 400 Needham, MA 02494 Attention: [***] [***] Copy: [***] |
|
|
6.3
Interpretation. For purposes of this Agreement: (a) the words "include," "includes," and "including" are deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references in this Agreement: (x) to sections, schedules, and exhibits mean the sections of, and schedules and exhibits attached to, this Agreement; (y) to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The parties drafted this Agreement without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The schedules and exhibits referred to herein are an integral part of this Agreement to the same extent as if they were set out verbatim herein.
6.4
Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.
6.5
Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability does not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
6.6
Entire Agreement. This Agreement, together with all related exhibits and schedules, is the sole and entire agreement of the parties to this Agreement regarding the
5
subject matter contained herein and therein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter.
6.7
Amendment and Modification. No amendment to, or rescission, termination, or discharge of this Agreement is effective unless it is in writing, identified as an amendment to or rescission, termination, or discharge of this Agreement and signed by an authorized representative of each party to this Agreement.
6.8
Waiver.
(a)
No waiver under this Agreement is effective unless it is in writing, identified as a waiver to this Agreement, and signed by an authorized representative of the party waiving its right.
(b)
Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated, and does not operate as a waiver on any future occasion.
(c)
None of the following is a waiver or estoppel of any right, remedy, power, privilege, or condition arising from this Agreement:
(i)
any failure or delay in exercising any right, remedy, power, or privilege or in enforcing any condition under this Agreement; or
(ii)
any act, omission, or course of dealing between the parties.
6.9
Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by a party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the parties or otherwise. Despite the previous sentence, the parties intend that Indemnified Party's rights under 35 are its exclusive remedies for the events specified therein.
6.10
Equitable Remedies. Each of Assigning Party and Assuming Party acknowledges that a breach or threatened breach by it of any of its obligations under this Agreement would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and hereby agrees that if a breach or a threatened breach by such party of any such obligations occurs, the other Party will, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to seek equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).
6.11
No Third-Party Beneficiaries. This Agreement benefits solely the parties to this Agreement and their respective successors and assigns and nothing in this Agreement, express or implied, confers on any other person any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement. Despite the previous sentence, the
6
parties hereby designate the third parties included in the definition of Indemnified Party as third-party beneficiaries of 35 having the right to enforce 35.
6.12
Choice of Law. This Agreement and exhibits and schedules attached hereto are governed by, and construed in accordance with, the laws of the State of New York, United States of America without giving effect to the conflict of laws provisions thereof.
6.13
Choice of Forum. Each party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other party in any way arising from or relating to this Agreement, and exhibits and schedules attached hereto, and all contemplated transactions, including, but not limited to, contract, equity, tort, fraud, and statutory claims, in any forum other than a federal or state court in New York and any appellate court from any thereof.
6.14
Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together is deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
[signature page follows]
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.
|
AffaMed Therapeutics (HK) Limited |
|
By /s/Ting Liu_____________________ Name: Ting Liu Title: President
|
|
Visara, Inc. |
|
By /s/Sean Wuxiong Cao________________ Name: Sean Wuxiong Cao Title: Director |
8
Schedule 1
Assigned Contracts
The Exclusive License Agreement dated November 6, 2021 by and among AskGene Pharma, Inc. a corporation organized and existing under the laws of Delaware USA, with a registered address at 5217 Verdugo Way, Suite A, Camarillo, CA 93012, and AffaMed Therapeutics (HK) Limited a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK.
The Safety Data Exchange Agreement dated August 25, 2022 by and among AskGene Pharma, Inc. a corporation organized and existing under the laws of Delaware USA, with a registered address at 5217 Verdugo Way, Suite A, Camarillo, CA 93012, and AffaMed Therapeutics (HK) Limited a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK.
9
Exhibit 1.3
Execution Version
Confidential
CERTAIN INFORMATION (INDICATED BY “[***]”) HAS BEEN EXCLUDED FROM THIS AGREEMENT BECAUSE (I) SUCH INFORMATION IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.
EXCLUSIVE LICENSE AGREEMENT
by and between
AskGene Pharma, Inc.
and
AffaMed Therapeutics (HK) Limited
Dated as of November 6, 2021
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS 1
Article 2 LICENSES AND EXCLUSIVITY 13
Article 3 GOVERNANCE 16
Article 4 DEVELOPMENT 18
Article 5 REGULATORY 20
Article 6 MANUFACTURING AND SUPPLY 20
Article 7 COMMERCIALIZATION 22
Article 8 FINANCIALS 23
Article 9 INTELLECTUAL PROPERTY 29
Article 10 REPRESENTATIONS, WARRANTIES AND COVENANTS 33
Article 11 INDEMNIFICATION 37
Article 12 CONFIDENTIALITY 39
Article 13 TERM AND TERMINATION 42
Article 14 DISPUTE RESOLUTION 46
Article 15 MISCELLANEOUS 47
i
EXCLUSIVE LICENSE AGREEMENT
THIS EXCLUSIVE LICENSE AGREEMENT (this “Agreement”) is entered into as of November 6, 2021 (the “Effective Date”) by and among AskGene Pharma, Inc. a corporation organized and existing under the laws of Delaware USA, with a registered address at 5217 Verdugo Way, Suite A, Camarillo, CA 93012 (“Licensor”), and AffaMed Therapeutics (HK) Limited a corporation organized and existing under the laws of Hong Kong, with a registered address at Unit 417 4/F, Lippo Centre Tower Two, No. 89 Queensway Admiralty, HK (“AffaMed”). Licensor and AffaMed are referred to herein individually as a “Party” and collectively as the “Parties.”
BACKGROUND
Licensor and its Affiliates Control certain Patent Rights and Know-How relating to the Licensed Antibodies and Licensed Products.
Licensor desires to grant, and AffaMed desires to receive, a license under such Patent Rights and Know-How to permit AffaMed to Develop, Manufacture, and Commercialize the Licensed Antibodies and Licensed Products in the Territory (all as defined below), in accordance with the terms and conditions set forth herein.
NOW THEREFORE, the Parties agree as follows:
Article 1
DEFINITIONS
DEFINITIONS
1.1
“Accounting Standard” means International Financial Reporting Standards (IFRS) or Generally Acceptable Accounting Principles (GAAP), consistently applied per the practice of each Party as of the Effective Date.
1.2
“AffaMed” has the meaning set forth in the Preamble.
1.3
“AffaMed Indemnitees” has the meaning set forth in Section 11.1 (Indemnification by Licensor).
1.4
“AffaMed Licensed Technology” means any and all (a) Know-How developed or invented by AffaMed in the performance of activities under this Agreement and (b) all Patent Rights Controlled by AffaMed that have a priority date after the Effective Date and cover any Know-How described in the foregoing clause (a).
1.5
“AffaMed Phase I and II Data” has the meaning set forth in Section 4.4(a) (Phase I and II Data in the Territory).
1.6
“AffaMed Phase III and Post-Marketing Data” has the meaning set forth in Section 4.4(b) (Phase III and Post-Marketing Data in the Territory).
1.7
“Affiliate” means, with respect to a Party, a Person, corporation, partnership, or other entity that controls, is controlled by, controlling or is under common control with such Party, but only for so long as such control will continue. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by”, “controlling” or “under the common control with”) 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 entity, whether by the ownership of more than 50% of the voting stock of such entity, or by contract or otherwise.
1.8
“Agreement” has the meaning set forth in the Preamble.
1.9
“ANG-2” means [***].
1.10
“Antibody” means an antibody, or a fragment thereof or derived therefrom, alone or in combination with any Other Component (including another antibody or antibody fragment). For clarity, a fragment may be synthetic, enzymatically obtainable or genetically engineered polypeptides and include portions of an immunoglobulin that bind an antigen, such as [***].
1.11
“Backup Molecules” means any and all Antibodies that are the subject of any Development activities conducted by Licensor or its Affiliates and that are capable of inhibiting [***]. The Backup Molecules existing as of the Effective Date are set forth on Schedule 1.11 (Backup Molecules).
1.12
“Bankruptcy Code” means Section 365(n) of title 11 of the United States Code (as amended or any replacement thereof).
1.13
“Biosimilar Product” means, with respect to a Licensed Product that has received Regulatory Approval in a country or region in the Territory or Licensor Territory (as applicable), a biologic therapeutic sold in the Territory not authorized by or on behalf of AffaMed (with respect to the Territory) or Licensor (with respect to the Licensor Territory), (a) that has been licensed as a biosimilar or interchangeable product by FDA pursuant to Section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) or considered by the applicable Regulatory Authority as a “similar biological medicinal product” pursuant to EU Directive 2001/83/EC, in each case, as may be amended, or any subsequent or superseding law, statute or regulation, (b) that has otherwise received Regulatory Approval as a generic, biosimilar, bioequivalent, or interchangeable product from another applicable Regulatory Authority in such country, or, in each case, (a) or (b), an analogous law, statute, or regulation, or (c) that has achieved analogous regulatory Marketing Approval from a Regulatory Authority in another jurisdiction in reliance on the fact of, or the data supporting, the prior approval of such Licensed Product by such Regulatory Authority.
1.14
“BLA” means a Biologics License Application submitted to the FDA pursuant to 21 U.S.C. §601.2, for purposes of obtaining Regulatory Approval for a new biologic in the United States, or any equivalent filing in a country or regulatory jurisdiction other than the United States.
1.15
“Blocking IP” has the meaning set forth in Section 2.5 (Third Party In-Licenses).
1.16
“Breaching Party” has the meaning set forth in Section 13.3(a) (Termination of Entire Agreement for Material Breach).
1.17
“Business Day” means a day other than a Saturday, Sunday, or a day on which banking institutions in the State of California or Shanghai, China are required by applicable law to remain closed.
1.18
“Calendar Quarter” means a period of three consecutive months ending on the last day of March, June, September, or December, respectively.
1.19
“Calendar Year” means a period of 12 consecutive months beginning on January 1 and ending on December 31.
1.20
“cGMP” means applicable current Good Manufacturing Practices, including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the International Conference on Harmonization’s Q7 guidelines, and (d) the applicable laws the
2
Territory corresponding to (a) through (c) above, each as may be amended and applicable from time to time.
1.21
“Chairperson” has the meaning set forth in Section 3.1 (Joint Steering Committee).
1.22
“Claim” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.23
“Clinical Manufacturing and Supply Agreement” has the meaning set forth in Section 6.16.1 (Clinical Supply).
1.24
“Clinical Trial” means a study in humans to obtain information regarding a product, including information relating to the safety, tolerability, pharmacological activity, pharmacokinetics, dose ranging, or efficacy of such product, including a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, Phase IV Clinical Trial, and a Global Clinical Trial.
1.25
“CMO” means a contract manufacturing organization.
1.26
“Combination Product” means a Licensed Product (a) in which a Licensed Antibody is sold in combination with any Other Component, or (b) that is defined as a “combination product” by the FDA pursuant to 21 C.F.R. §3.2(e) or its foreign equivalent, in each case (a) or (b), whether combined in a single formulation or package, as applicable, or formulated or packaged separately but sold together for a single price.
1.27
“Commercialization” means, with respect to a pharmaceutical or biologic product (whether in monotherapy or as part of a Combination Product), any and all activities directed to the marketing, promotion, importation, distribution, pricing, Pricing and Reimbursement Approval, offering for sale, or sale of such pharmaceutical or biologic product, and interacting with Regulatory Authorities regarding the foregoing. “Commercialize” and “Commercial” will be construed accordingly.
1.28
“Commercially Reasonable Efforts” means, with respect to the efforts to be expended by AffaMed or its Affiliate with respect to any objective, activity, or goal related to a Licensed Product under this Agreement, those efforts that a biotechnology company of similar size and scope as AffaMed developing products similar to AffaMed would normally use to accomplish such objective, activity, or decision, and specifically means the carrying out of activities using efforts that such biotechnology company developing products similar to AffaMed would normally devote to a product at a similar stage in its development or product life and of similar market potential, strategic importance, and profit potential (taking into account payments under this Agreement), based on conditions then prevailing and taking into account efficacy, safety, approved labeling, profitability, the competitiveness of alternative products sold by Third Parties in the marketplace, the patent and other proprietary position of the product, the likelihood of Regulatory Approval given the regulatory structure involved, and all other relevant factors. Commercially Reasonable Efforts will be determined on a country-by-country and indication-by-indication basis for the applicable Licensed Product, and it is anticipated that the level of effort will change over time, reflecting changes in the status of such Licensed Product and the market or country involved. Licensor expressly understands and accepts that the use of Commercially Reasonable Efforts may result in AffaMed ceasing the Development or Commercialization of a Licensed Product (in whole or in part), and that once Development for a Licensed Product has ceased in compliance with this Agreement, Commercially Reasonable Efforts does not require the continued re-evaluation of whether Development or Commercialization, as applicable, must be re-initiated for such Licensed Product.
3
1.29
“Confidential Information” has the meaning set forth in Section 12.1 (Confidentiality; Exceptions).
1.30
“Continuing Technology Transfer” has the meaning set forth in Section 2.6(c) (Continuing Technology Transfer).
1.31
“Control” or “Controlled” means (a) the possession by a Party (whether by ownership, license, or otherwise other than pursuant to this Agreement) of, (i) with respect to any tangible Know-How, the legal authority or right to physical possession of such tangible Know-How, with the right to provide such tangible Know-How to the other Party on the terms set forth herein, or (ii) with respect to Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights, the legal authority or right to grant a license, sublicense, access, or right to use (as applicable) to the other Party under such Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights on the terms set forth herein, in each case ((i) and (ii)), (A) without breaching or otherwise violating the terms of any arrangement or agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such access, right to use, licenses, or sublicense and (B) with respect to any Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights in-licensed by AffaMed pursuant to Section 2.5 (Third Party In-Licenses), AffaMed will only be deemed to Control such rights if Licensor agrees to assume all financial and other obligations under any arrangement or agreement with the applicable Third Party that are applicable to Licensor’s exercise of the relevant Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights in the Licensor Territory; and (b) with respect to any product, the possession by a Party of the ability (whether by sole or joint ownership, license or otherwise, other than pursuant to this Agreement) to grant a license or sublicense of Patent Rights that claim such product or proprietary Know-How that is used in connection with the Exploitation of such product.
1.32
“CPA Firm” has the meaning set forth in Section 8.5(a) (Books and Records; Audit Rights).
1.33
“Development” means, with respect to any product, any and all development or regulatory activities that relate to obtaining, maintaining or expanding Regulatory Approval of such product, including any and all activities related to the research, profiling, characterization, pre‑clinical development, or nonclinical studies of such product, clinical drug development activities conducted before or after obtaining Regulatory Approval for such product that are reasonably related to or leading to the development, preparation, or submission of data and information to a Regulatory Authority for the purpose of obtaining, supporting, expanding or maintaining Regulatory Approval of such product, together with all activities related to pharmacokinetic profiling, design and conduct of Clinical Trials (including Phase IV Clinical Trials and Clinical Trials pertaining to additional presentations for a product, and statistical analysis and report writing) of such product, pharmacovigilance activities, adverse event reporting, and regulatory affairs, statistical analysis, report writing and the creation and submission of regulatory submissions related to the foregoing (including the services of outside advisors and consultants in connection therewith); but excluding, in each case, any activities directed to Commercialization or Manufacturing. “Developing” and “Developed” will be construed accordingly.
1.34
“Effective Date” has the meaning set forth in the Preamble.
1.35
“Executive Officer” means (a) in the case of AffaMed, the chief executive officer of AffaMed, and (b) in the case of Licensor, the chief executive officer of Licensor.
1.36
“Exploit” and “Exploitation” have the meaning set forth in Section 2.1 (License to AffaMed).
4
1.37
“FDA” means the U.S. Food and Drug Administration or any successor agency thereto.
1.38
“Field” means any and all uses.
1.39
“First Commercial Sale” means, with respect to a Licensed Product in a country or region in the Territory, the first sale to a Third Party of such Licensed Product in such country or region after Regulatory Approval and Pricing and Reimbursement Approval (where Pricing and Reimbursement Approval is applicable for the Commercialization of any Licensed Product in such country or region) have been obtained. First Commercial Sale excludes transfers of Licensed Product to Third Parties as bona fide samples, as donations, for the performance of Clinical Trials, or for similar purposes in accordance with applicable law pertaining to any expanded access program, any compassionate sales or use program (including named patient program or single patient program), or any indigent program.
1.40
“Force Majeure” has the meaning set forth in Section 15.2 (Force Majeure).
1.41
“Fully Burdened Manufacturing Costs” means, with respect to any Licensed Antibody or Licensed Product, supplied by or on behalf of the applicable Party to the other Party or its Affiliates hereunder:
if and to the extent such Licensed Antibody or Licensed Product is Manufactured by a CMO, the actual invoiced costs from the CMO that are solely and specifically related to the Manufacture of any Licensed Antibody or Licensed Product for the other Party, including any incremental handling and administrative cost incurred by the applicable Party; or
if and to the extent such Licensed Antibody or Licensed Product is Manufactured (including performance of any of the following Manufacturing activities for the benefit of, or in conjunction with, the activities of any CMO that is Manufacturing such Licensed Antibody or Licensed Product or component thereof) by a Party or its Affiliate, the actual, fully burdened costs that are directly attributable to such Manufacturing, including the actual costs of materials (including materials supplied to a CMO engaged by such Party to Manufacture the applicable product or component thereof), direct labor, ordinary course quality assurance costs, stability testing cost, characterization testing, quality control, costs of engineering runs, release testing of drug substance and drug product, equipment maintenance costs, and other costs variable with production, scale-up expenses, customs and duty and charges levied by governmental authorities, all costs of packaging, the cost of freight into or between Manufacturing sites, which will be calculated in accordance with the applicable Accounting Standards. Notwithstanding the foregoing, Fully Burdened Manufacturing Cost will be computed on a theoretical full-capacity basis, and no overhead, equipment, or facilities costs will be included for unutilized, vacant, or dormant facilities or equipment (and Manufacturing overhead costs related to an underutilized facility or underutilized equipment will be allocated proportionately over the entire Manufacturing production (based on a theoretical full-capacity production schedule) of the facility and applicable equipment, whether or not the entire Manufacturing facility is being utilized).
1.42
“GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) (the “ICH Guidelines”) and any other guidelines for good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts
5
50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (d) the equivalent applicable laws in the region in the Territory, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.
1.43
“Global Brand Elements” has the meaning set forth in Section 9.5 (Trademarks).
1.44
“Global Clinical Trial” means a Clinical Trial of a Licensed Product in the Field that includes sufficient clinical sites or study subjects to achieve Regulatory Approval for the indication associated with such Clinical Trial in at least one country or jurisdiction within the Territory and at least one country or jurisdiction within the Licensor Territory.
1.45
“Global Development Plan” has the meaning set forth in Section 4.2 (Global Development).
1.46
“GLP” means all applicable Good Laboratory Practice standards, including, as set forth in the then-current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration, as defined in 21 C.F.R. Part 58, and the equivalent applicable laws in the Territory, each as may be amended and applicable from time to time.
1.47
“IND” means (a) an Investigational New Drug Application as defined in the United States Federal Food, Drug and Cosmetic Act, as amended (the “FD&C Act”) and applicable regulations promulgated thereunder by the FDA, or (b) the equivalent application to the equivalent Regulatory Authority in any other regulatory jurisdiction, the filing of which is necessary to initiate or conduct clinical testing of a pharmaceutical or biologic product in humans in such jurisdiction.
1.48
“Indemnified Party” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.49
“Indemnifying Party” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.50
“Initial Technology Transfer” has the meaning set forth in Section 2.6(a) (Initial Technology Transfer).
1.51
“Initiation” means, with respect to a given Clinical Trial, the administration of the first dose of Licensed Product to the first patient in such Clinical Trial.
1.52
“Insolvency Event” means circumstances under which a Party (a) has a receiver or similar officer appointed over all or substantially all of such Party’s assets, (b) the institution of any bankruptcy, receivership, insolvency, reorganization, or other similar proceedings by or against the other Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, (c) makes an assignment for the benefit of its creditors (other than relating to a solvent restructuring), or (d) any corporate action taken by the board of directors of such Party in furtherance of any of the foregoing actions.
1.53
“IP Assignment Agreement” has the meaning set forth in Section 9.1(a)(ii).
1.54
“Joint Know-How” means any and all Know-How developed or invented jointly by or on behalf of the Parties or their respective Affiliates.
1.55
“Joint Patent Rights” means any Patent Right covering any Joint Know-How.
1.56
“Joint Steering Committee” and “JSC” have the meaning set forth in Section 3.2(a) (Formation; Composition).
6
1.57
“Joint Technology” means the Joint Know-How and Joint Patent Rights.
1.58
“Know-How” means any data, results, and information of any type whatsoever, in any tangible or intangible form, including trade secrets, practices, techniques, methods, processes, inventions, discoveries, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports, clinical and non-clinical study reports, clinical and non-clinical data, regulatory filings and regulatory submission documents and summaries, technology, test data including pharmacological, biological, chemical, biochemical, toxicological, and clinical test data, analytical and quality control data, stability data, studies and procedures and any other know-how, and any physical embodiments of any of the foregoing.
1.59
“Licensed Antibody” means (a) the Antibody known as ASKG712 and all derivatives thereof, and (b) all Backup Molecules. The amino acid and nucleotide sequences of ASKG712 are set forth as Schedule 1.59 (Licensed Antibody).
1.60
“Licensed Product” means any product that includes a Licensed Antibody in any and all (current and future) forms, formulations, dosages and delivery modes, and any improvements to any of the foregoing.
1.61
“Licensor” has the meaning set forth in the Preamble.
1.62
“Licensor Indemnitees” has the meaning set forth in Section 11.2 (Indemnification by AffaMed).
1.63
“Licensor Know-How” means any Know-How Controlled by Licensor or any of its Affiliates as of the Effective Date or during the Term, other than Joint Know-How, that is necessary or reasonably useful to Exploit any Licensed Antibody or Licensed Product.
1.64
“Licensor Manufacturing Technology” has the meaning set forth in Section 2.6(b) (Manufacturing Technology Transfer).
1.65
“Licensor Patent Rights” means any Patent Rights Controlled by Licensor or any of its Affiliates as of the Effective Date or during the Term, other than Joint Patent Rights, that (a) cover any Licensor Know-How or (b) are otherwise necessary or reasonably useful to Exploit any Licensed Antibody or Licensed Product. All Licensor Patent Rights existing as of the Effective Date are listed on Schedule 1.65 (Licensor Patent Rights).
1.66
“Licensor Technology” means any and all Licensor Patent Rights and Licensor Know-How and Licensor’s interest in any Joint Patent Rights or Joint Know-How.
1.67
“Licensor Territory” means, collectively, Singapore, Thailand, Malaysia, Indonesia, Vietnam, the People’s Republic of China, Taiwan, Macau, Hong Kong, Korea, and India.
1.68
“Manufacture” or “Manufacturing” means, as applicable, all activities associated with the production, manufacture, process of formulating, processing, filling, finishing, packaging, labeling, shipping, importing or storage of pharmaceutical compounds or materials, including process development, process validation, stability testing, manufacturing scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterization, quality assurance and quality control development, testing and release.
1.69
“Manufacturing and Supply Agreement” means either the Clinical Manufacturing and Supply Agreement or the Commercial Manufacturing and Supply Agreement, as applicable.
7
1.70
“Manufacturing Arbitration Draft” has the meaning set forth in Section 6.1(c)(i).
1.71
“Manufacturing Technology Transfer” has the meaning set forth in Section 2.6(b) (Manufacturing Technology Transfer).
1.72
“Marketing Approval” means, with respect to a country or region, any and all approvals (including Regulatory Approval), licenses, registrations, or authorizations of any governmental authority that are required in order to Commercialize a pharmaceutical or biologic product in such country or region, including any Pricing and Reimbursement Approval where applicable for the Commercialization of any product in such country or region.
1.73
“Net Sales” means, with respect to a Licensed Product, the aggregate gross sales of such Licensed Product sold by a Party or any of its Affiliates or (Sub)licensees (each, a “Selling Party”) to a Third Party (including distributors, resellers, wholesalers, hospitals, and end users) (each, a “Buying Party”) in the Territory, less the following deductions, in each case, to the extent actually allowed and taken by any such Buying Party and not otherwise recovered by or reimbursed to the applicable Selling Party, all determined in accordance with the applicable Accounting Standard of the applicable Selling Party:
(a) reasonable and customary discounts, including trade, quantity or cash discounts and rebates, and patient discount programs;
(b) rebates, reimbursements, fees, clawbacks, discounts, allowances, chargebacks, and retroactive price reductions, including those granted to wholesalers, buying groups, retailers, managed health care organizations, governmental agencies, reimbursers, and trade customers;
(c) any amount paid or credited by reasons of defects, rejections, recalls, outdating or returns, such as unrecoverable damaged goods or rejections and including Licensed Product returned in connection with recalls or withdrawals;
(d) transportation, freight, postage charges and other charges, such as insurance, relating thereto, in each case paid or incurred by Selling Party and any other governmental charges or taxes imposed with respect to the sale, transportation, delivery, use, exportation, or importation of such Licensed Product;
(e) taxes, duties, tariffs, excises or other governmental charges or levies charged or imposed with respect to the import, export, production, sale, transportation, delivery or use of goods (other than income taxes);
(f) amounts written off by reason of uncollectible debt if and when actually written off or allowed in accordance with the Selling Party’s accounting policies, as consistently applied; provided that such amounts will be added back to Net Sales if and when collected; and
(g) other specifically identifiable amounts that have been credited against or deduct from gross sales of such Licensed Product and to the extent such amounts are customary deductions permitted under the applicable Accounting Standard from net sales calculations for reasons substantially equivalent to those listed above.
Such amounts shall be determined from the books and records of Selling Party, maintained in accordance with generally accepted accounting principles (in accordance with GAAP or IFRS, as applicable) as consistently applied across its pharmaceutical products generally.
8
Net Sales on Licensed Product provided as part of a non-cash exchange or other than through an arms-length transaction shall mean the average amount invoiced in arms-length sales of the same or equivalent Licensed Products during the applicable royalty reporting period in the same country, and if no such sales have occurred, shall be the fair market value of the transferred Licensed Product(s). Net Sales will be calculated only once for the first bona fide arm’s length sale of the Licensed Product to a Third Party that is not a Selling Party.
Net Sales excludes transfers of Licensed Product to Third Parties as bona fide samples, as donations, for the performance of Clinical Trials, or for similar purposes in accordance with applicable law pertaining to any expanded access program, any compassionate sales or use program (including named patient program or single patient program), or any indigent program.
In the case of any Combination Product sold in a given country and reporting period, Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product in such country will be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B), where A is the invoice price of the Licensed Product if sold separately in the same indication in such country, and B is the total invoice price of the Other Components in the Combination Product, if sold separately in the same indication in such country.
If, on a country-by-country basis in a particular reporting period, the Licensed Product is sold separately in the same indication in a country, but the Other Components in the Combination Product are not sold separately in the same indication in such country, then Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product for such country will be calculated by multiplying actual Net Sales of the Combination Product by the fraction A/C, where A is the invoice price of the Licensed Product if sold separately in the same indication in such country, and C is the invoice price of the Combination Product in such country.
If, on a country-by-country basis in a particular reporting period, the Licensed Product in the Combination Product is not sold separately in the same indication in such country, but the Other Components included in the Combination Product are sold separately in the same indication in such country, then Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product for such country will be calculated by multiplying actual Net Sales of the Combination Product by the fraction C-B/C, where B is the invoice price of the Other Components included in such Combination Product if sold separately in the same indication in such country, and C is the invoice price of the Combination Product in such country.
If neither the Licensed Product nor the Other Components are sold separately in the same indication in a given country during a particular reporting period, then Net Sales will be calculated based on AffaMed’s good faith estimate of the fair market value of the Licensed Product and each of the Other Components included in such Combination Product when sold in such indication in such country.
1.74
“Net Sales Royalty” has the meaning set forth in Section 8.3 (Royalties).
1.75
“Net Sales Statement” has the meaning set forth in Section 8.3(c) (Reports; Payment).
1.76
“Non-Breaching Party” has the meaning set forth in Section 13.3(a) (Termination of Entire Agreement for Material Breach).
9
1.77
“Other Component” means any (a) therapeutically active ingredient that is not a Licensed Antibody (including any product of AffaMed), (b) delivery device or component therefor, (c) companion diagnostic, or (d) other product, process, or service that is sold with a Licensed Antibody for a fixed price.
1.78
“Party” and “Parties” have the meaning set forth in the Preamble.
1.79
“Patent Right” means (a) any national, regional or international patent or patent application, including any provisional patent application, (b) any patent application filed either from such a patent, patent application or provisional application or from an application claiming priority from any of these, including any divisional, continuation, continuation-in-part, provisional, converted provisional, and continued prosecution application, (c) any patent that has issued or in the future issues from any of the foregoing patent applications ((a) and (b)), including any utility model, petty patent, design patent and certificate of invention, (d) any extension or restoration by existing or future extension or restoration mechanisms, including any revalidation, reissue, re-examination and extension (including any supplementary protection certificate and the like) of any of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any such foregoing patent application or patent.
1.80
“Perfection Condition” has the meaning set forth in Section 9.1(a)(ii).
1.81
“Person” means any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, Regulatory Authority, or any other entity not specifically listed in this definition.
1.82
“Pharmacovigilance Agreement” has the meaning set forth in Section 5.2 (Adverse Event Reporting).
1.83
“Phase I Clinical Trial” means a human clinical trial of a product, the principal purpose of which is a determination of initial tolerance or safety of such product in healthy volunteers or the target patient population, as described in 21 CFR 312.21(a) (as amended or any replacement thereof), or a similar clinical trial prescribed by the Regulatory Authority in a country other than the United States.
1.84
“Phase II Clinical Trial” means a human clinical trial of a product, the principal purpose of which is a determination of safety and efficacy in the target patient population, as described in 21 C.F.R. 312.21(b) (as amended or any replacement thereof), or a similar clinical trial prescribed by the Regulatory Authority in a country other than the United States.
1.85
“Phase III Clinical Trial” means a human clinical trial of a product, the design of which is acknowledged by the FDA to be sufficient for such clinical trial to satisfy the requirements of 21 C.F.R. 312.21(c) (as amended or any replacement thereof), or a similar human clinical trial prescribed by the Regulatory Authority in a country other than the United States, the design of which is acknowledged by such Regulatory Authority to be sufficient for such clinical trial to satisfy the requirements of a pivotal efficacy and safety clinical trial.
1.86
“Phase III and Commercial Manufacturing and Supply Agreement” has the meaning set forth in Section 6.1(b) (Commercial Supply).
1.87
“Phase IV Clinical Trial” means a human clinical trial of a compound or product for an indication that is (a) commenced after receipt of the initial Regulatory Approval for such indication in the
10
country for which such trial is being conducted and that is conducted within the parameters of the Regulatory Approval for the compound or product for such indication (and which may include investigator sponsored clinical trials) in such country, including a clinical trial conducted due to the request or requirement of a Regulatory Authority in such country or as a condition of a previously granted Regulatory Approval in such country.
1.88
“Pricing and Reimbursement Approval” means the later of (a) the approval, agreement, determination, or governmental decision establishing a price for a pharmaceutical or biologic product that can be legally charged to consumers, if applicable in a given jurisdiction or country for the Commercialization of such pharmaceutical or biologic product in such jurisdiction or country; and (b) the approval, agreement, determination, or governmental decision establishing the level of reimbursement for a pharmaceutical or biologic product that will be reimbursed by governmental authorities, if either applicable in a given jurisdiction or country for the Commercialization of such pharmaceutical or biologic product in such jurisdiction or country.
1.89
“Product Marks” has the meaning set forth in Section 9.5 (Trademarks).
1.90
“Publication” has the meaning set forth in Section 12.4 (Publications).
1.91
“Publishing Notice” has the meaning set forth in Section 12.4 (Publications).
1.92
“Publishing Party” has the meaning set forth in Section 12.4 (Publications).
1.93
“Regulatory Approval” means all approvals necessary for the Manufacture, marketing, importation, and sale of a product for one or more indications in a country or regulatory jurisdiction, which may include satisfaction of all applicable regulatory and notification requirements. Regulatory Approvals include approvals by Regulatory Authorities of INDs and BLAs. “Regulatory Approval” excludes Pricing and Reimbursement Approval.
1.94
“Regulatory Authority” means, in a particular country or regulatory jurisdiction, any applicable governmental authority involved in granting Regulatory Approval or, to the extent required in such country or regulatory jurisdiction, Pricing and Reimbursement Approval of a product in such country or regulatory jurisdiction.
1.95
“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a Licensed Product other than Patent Rights, that prohibits a Person from Commercializing a Licensed Product, including orphan drug exclusivity or rights similar thereto in other countries or regulatory jurisdictions.
1.96
“Regulatory Materials” means regulatory applications, submissions, notifications, registrations, or other filings made to or with a Regulatory Authority that are necessary or reasonably desirable in order to Develop, Manufacture, market, sell or otherwise Commercialize a Licensed Product in a particular country or regulatory jurisdiction. Regulatory Materials include INDs and BLAs (as applications, but not the approvals with respect thereto).
1.97
“Residual Knowledge” has the meaning set forth in Section 12.6 (Residual Knowledge).
1.98
“ROFN Compound” has the meaning set forth in Section 2.7 (Right of First Negotiation).
1.99
“Royalty Term” means, on a country-by-country and Licensed Product-by-Licensed Product basis, the period commencing upon the First Commercial Sale of the Licensed Product in such country in the Territory, and ending upon the later to occur of (a) the expiration in such country of
11
the last to expire of any Licensor Patent Right containing a Valid Claim covering such Licensed Product that would be infringed by the sale of such Licensed Product in such country; provided that if a Biosimilar Product to a Licensed Product is sold in accordance with applicable law in such country, then clause (a) of this definition will be deemed to no longer apply to extend the Royalty Term; or (b) 10 years after the First Commercial Sale in such country of such Licensed Product. Notwithstanding the foregoing, if a court of competent jurisdiction in a country in which the Royalty Term has ended as a result of the application of the foregoing clause (a) issues a final judgement that stops the sale of such Biosimilar Product, then the Royalty Term will be restored effective as of the date of the first sale of the Biosimilar Product through the expiration of such Royalty Term for the applicable Licensed Product in such country as if there had been no sale of the Biosimilar Product; provided that during the period commencing upon the first sale of such Biosimilar Product in such country and ending upon the expiration of the Royalty Term for the applicable Licensed Product in such country, all Royalties will be reduced by [***] of the Royalty payments that would have otherwise been due on Net Sales of the applicable Licensed Product in such country. For the avoidance of doubt, AffaMed will pay [***] of any Royalties that would have been due during the period commencing upon first sale of the applicable Biosimilar Product in the applicable country and ending on the date on which there is a final judgement that stops the sale of such Biosimilar Product in such country consistent with Section 8.3(c) (Reports; Payments).
1.100
“Sales Milestone Event” has the meaning set forth in Section 8.2(b) (Sales Milestones).
1.101
“Sales Milestone Payment” has the meaning set forth in Section 8.2(b) (Sales Milestones).
1.102
“Sublicensee” means, as the context indicates, any Third Party granted a sublicense by (a) AffaMed under the rights licensed to AffaMed, or (b) Licensor under the rights licensed to Licensor, in each case (a) and (b), pursuant to Article 2 (Licenses and Exclusivity) hereof.
1.103
“Technology Transfer” has the meaning set forth in Section 2.6(c) (Continuing Technology Transfer).
1.104
“Term” has the meaning set forth in Section 13.1 (Term).
1.105
“Terminated Country” has the meaning set forth in Section 13.4 (Effects of Termination).
1.106
“Terminated Product(s)” has the meaning set forth in Section 13.4 (Effects of Termination).
1.107
“Territory” means all countries and territories throughout the world, except for the Licensor Territory.
1.108
“Territory-Specific Payments” has the meaning set forth in Section 2.5 (Third Party In-Licenses).
1.109
“Third Party” means any entity other than Licensor or AffaMed or their respective Affiliates.
1.110
“Third Party Agreements” has the meaning set forth in Section 10.2(e) (Third Party Agreements).
1.111
“Third Party License” has the meaning set forth in Section 2.5 (Third Party In-Licenses).
1.112
“United States” or “U.S.” means the United States of America and all of its territories and possessions.
1.113
“Upfront Payment” has the meaning set forth in Section 8.1 (Upfront Payment).
12
1.114
“Valid Claim” means a claim of any issued, unexpired United States or granted foreign Patent Right that has not been dedicated to the public, disclaimed, abandoned, or held invalid or unenforceable by a court or other body of competent jurisdiction from which no further appeal can be taken, and that has not been explicitly disclaimed, or admitted in writing to be invalid or unenforceable or of a scope not covering a particular product or service through reissue, disclaimer, or otherwise.
1.115
“VAT” has the meaning set forth in Section 8.6(d) (VAT).
1.116
“VEGF” means vascular endothelial growth factor.
Article 2
LICENSES
LICENSES
2.1
License to AffaMed. Subject to the terms and conditions of this Agreement, Licensor hereby grants and agrees to grant to AffaMed, on behalf of itself and its Affiliates, (a) an exclusive (even as to Licensor and each of its Affiliates), transferable license, with the right to sublicense (as permitted in accordance with Section 2.3 (Sublicensing)), under the Licensor Technology, to Develop, Commercialize, make or have made (subject to Section 6.2 (Manufacturing by AffaMed)), use, sell, offer for sale, import, export, and otherwise exploit (collectively, “Exploit” or “Exploitation”) Licensed Antibodies and Licensed Products in the Field in the Territory, and (b) a non-exclusive license with the right to sublicense (as permitted in accordance with Section 2.3 (Sublicensing)) under the Licensor Technology to develop, make, have made, and export Licensed Products and Licensed Antibodies in the Licensor Territory solely for the purpose of Exploiting such Licensed Antibodies and Licensed Products in the Territory.
2.2
License to Licensor. Subject to the terms and conditions of this Agreement, AffaMed hereby grants to Licensor, on behalf of itself and its Affiliates, a non-exclusive, transferrable license, with the right to sublicense (through multiple tiers; provided that each such sublicense is consistent with the terms of this Agreement), under the AffaMed Licensed Technology to (a) Exploit the Licensed Antibodies and Licensed Products in the Field in the Licensor Territory or (b) conduct activities as otherwise permitted under this Agreement (including under a Global Development Plan).
2.3
Sublicensing. The license granted by Licensor to AffaMed in Section 2.1 (License to AffaMed) may be sublicensed by AffaMed through multiple tiers to any Affiliate of AffaMed or Third Party without any requirement of Licensor’s consent or notice. Each sublicense granted by AffaMed will be consistent with the terms of this Agreement and require each Sublicensee to comply with the terms of this Agreement that are applicable to such Sublicensee, and AffaMed will remain primarily liable to Licensor for the performance of all its obligations under this Agreement, including those conducted by a Sublicensee.
2.4
No Implied Licenses; Retained Rights. Except as explicitly set forth in this Agreement, neither Party grants to the other Party any license or other rights, express or implied, under any intellectual property rights (whether by implication, estoppel or otherwise).
2.5
Third Party In-Licenses. During the Term, if either Party identifies any Patent Right or related Know-How owned or controlled by a Third Party in a particular country or other jurisdiction that it reasonably believes may, absent a license or agreement with such Third Party, be infringed by the Exploitation of a Licensed Antibody or a Licensed Product in the Field in the Territory (“Blocking IP”), then it will so notify the other Party. AffaMed will have the sole right, but not the obligation, to enter into a Third Party License under any Blocking IP. With respect to any such Third Party License that AffaMed enters into with the applicable Third Party, AffaMed will use reasonable efforts to ensure that such Third Party License includes the right to grant a sublicense to Licensor under such Blocking IP in the Licensor Territory on fair and reasonable terms. If
13
AffaMed enters into such Third Party License, then (a) AffaMed will be responsible for all payments payable to such Third Party thereunder that solely pertain to, or arise solely as a result of, the Exploitation of the Licensed Antibodies or Licensed Products in the Territory (for example, royalty payments that are solely attributable to sales of Licensed Products in the Territory or milestone payments payable upon achievement of events solely in the Territory) (the “Territory-Specific Payments”), and will have the right to offset any such Territory-Specific Payments in accordance with Section 8.3(d)(iii) (Reduction for Blocking IP), and (b) if applicable, Licensor may elect to obtain a sublicense thereunder for the Licensor Territory, in which case it will reimburse AffaMed for all payments payable to such Third Party thereunder that solely pertain to, or arise solely as a result of, the Exploitation of the Licensed Antibodies or Licensed Products in the Licensor Territory, and such in-licensed Blocking IP will be considered AffaMed Licensed Technology for the purpose of this Agreement.
2.6
Technology Transfer.
(a)
Initial Technology Transfer. During the [***] day period following the Effective Date, Licensor will provide to AffaMed copies of (i) all documents, data, and other Know-How included within the Licensor Know-How existing as of the Effective Date and (ii) the CMC package and Licensor Manufacturing Technology required for IND filing, but excluding other Licensor Manufacturing Technology that is not set forth in the foregoing clause (ii), which will be transferred to AffaMed as contemplated in Section 2.6(b) (Manufacturing Technology Transfer) (the “Initial Technology Transfer”). Due to the subjective nature of this particular term (Section 2.6(a)), an omission of one or more documents, information, or data of Licensor during the Initial Technology shall not be deemed as a material breach of this Agreement unless the omission is material or the applicable documents, information, or data is intentionally or knowingly withheld or not fully provided to AffaMed. In addition, during the Term, AffaMed may request in writing any documents, data, or other Know-How that AffaMed reasonably believes is included in the Licensor Know-How, and Licensor will provide such Licensor Know-How.
(b)
Manufacturing Technology Transfer. In addition to the documents, data, and other Know-How provided to AffaMed pursuant to the Initial Technology Transfer, upon the request of AffaMed during the Term, Licensor will conduct a transfer of all relevant documents, data, other Know-How or activities necessary or reasonably useful to Manufacture the Licensed Products (“Licensor Manufacturing Technology”) to AffaMed or a CMO designated by AffaMed that is reasonably acceptable to Licensor (such approval not to be unreasonably withheld, conditioned, or delayed) to enable AffaMed or its designated CMO to assume the Manufacturing activities of the Licensed Products (the “Manufacturing Technology Transfer”) pursuant to a transfer plan to be agreed upon by the Parties no later than [***] days after the Parties enter into the Clinical Manufacturing and Supply Agreement in accordance with Section 6.1(b) (Clinical Supply).
(c)
Continuing Technology Transfer. During the Term and after the completion of the Initial Technology Transfer, Licensor will transfer to AffaMed any additional Licensor Know-How (including all data and results and all supporting documentation, such as protocols, investigator’s brochures, case report forms, analysis plans) Controlled by Licensor that are generated by or on behalf of Licensor or its Affiliates, Sublicensees, or subcontractors, if applicable, that is used to Exploit or incorporated into any Licensed Product and that has not been previously transferred to AffaMed or one of its Affiliates or designees, promptly after such Licensor Know-How is developed or invented (the “Continuing Technology Transfer,” and together with the Initial Technology Transfer, the “Technology Transfer”). Due to the subjective nature of this particular term (Section 2.6(c)), an omission of one or more documents, information, or data of Licensor during the Continuing
14
Technology shall not be deemed as a material breach of this Agreement unless the omission is material or the applicable documents, information, or data is intentionally or knowingly withheld or not fully provided to AffaMed. In addition, during the Term, AffaMed may request in writing any documents, data, or other Know-How that AffaMed reasonably believes is included in the Licensor Know-How, and Licensor will provide such Licensor Know-How, if available.
(d)
Costs of Technology Transfer. In the course of any Technology Transfer, Licensor will provide AffaMed with reasonable access by teleconference or in-person at Licensor’s, or any of its Affiliates’, facilities to Licensor or any of its Affiliates’ personnel involved in the Development or Manufacture of the Licensed Antibodies and Licensed Products to provide AffaMed with a reasonable level of technical assistance and consultation in connection with the Technology Transfer. Each Party will be responsible for its own costs for the foregoing reasonable level of consultation and assistance in connection with the Initial Technology Transfer and Continuing Technology Transfer. Licensor will be responsible for all costs of the Initial Technology Transfer, and Licensor will be responsible for all costs of the Continuing Technology Transfer incurred by its employees in the aggregate up to an equivalent of [***] FTE in a given Calendar Year. AffaMed agrees to reimburse Licensor any FTE costs for Continuing Technology Transfer in excess of [***] FTE in a given Calendar Year.
2.7
Right of First Negotiation. If, during the Term, Licensor discovers or develops an Antibody or other product candidate that inhibits [***]and that could reasonably be used to treat an [***] disease or disorder (each, a “ROFN Compound”), then, on a ROFN Compound-by-ROFN Compound basis, Licensor will provide to AffaMed written notice of the applicable ROFN Compound, and upon AffaMed’s election to be made no later than [***] days after receipt of such written notice, the Parties will negotiate in good faith and on an exclusive basis for a period of up to [***] days regarding the terms of a license agreement with respect to the Exploitation of such ROFN Compound for such ophthalmic disease or disorder (or an amendment to any existing agreement between the Parties with respect to the Exploitation of such ROFN Compound) in Territory. For the avoidance of doubt, a compound targeting [***], and one or more additional targets is a ROFN Compound. If, on a ROFN Compound-by-ROFN Compound basis, the Parties do not agree on the terms of such a definitive agreement during the foregoing [***] day period, then Licensor will be free to develop the applicable ROFN Compound itself or, subject to the remainder of this Section 2.7 (Right of First Negotiation) enter into negotiations with a Third Party with respect to the terms of a definitive license agreement as described pursuant to which Licensor would grant to such Third Party rights to such ROFN Compound, provided that the material terms included in such definitive agreement with such Third Party will be no less favorable to Licensor than the applicable terms last offered by Licensor to AffaMed in such negotiations. If, with respect to a particular ROFN Compound, Licensor does not enter into such a definitive agreement with such Third Party within [***] after the conclusion of such negotiations with AffaMed, then AffaMed’s right of first negotiation under this Section 2.7 (Right of First Negotiation) with respect to such ROFN Compound will be reinstated.
Article 3
GOVERNANCE
GOVERNANCE
3.1
Alliance Managers. No later than 30 days after the Effective Date, each Party will appoint (and notify the other Party of the identity of) a representative having the appropriate qualifications including a general understanding of pharmaceutical Development and Commercialization to act as its alliance manager under this Agreement (each an “Alliance Manager”). The Alliance Managers will: (a) serve as the primary contact points between the Parties for the purpose of providing the other Party with information on the progress of such Party’s activities under this
15
Agreement; (b) be primarily responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties, providing single point communication for seeking consensus both internally within each Party’s respective organization, including facilitating review of external corporate communications, and raising disputes in a timely manner; (c) have the right to attend all JSC meetings as a non-voting member, and (d) after the JSC is disbanded under Section 3.4 (Discontinuation of JSC), provide annual Commercialization updates and coordinate ad hoc meetings between the Parties as necessary. Without limiting the foregoing, the Alliance Managers will be responsible (i) for scheduling JSC meetings, (ii) setting the agendas for JSC meetings, and (iii) preparing the draft minutes of such meetings (with the responsibility alternating between the Alliance Managers). Each Party may replace its Alliance Manager on written notice to the other Party.
3.2
Joint Steering Committee.
(a)
Formation; Composition. No later than 30 days after the Effective Date, the Parties will establish a joint steering committee (the “Joint Steering Committee” or “JSC”) comprised of three representatives from each Party (or appointed representatives of any Affiliate of such Party) with sufficient seniority and decision-making authority within the applicable Party to make decisions arising within the scope of the JSC’s responsibilities. Each Party may replace its JSC representatives at any time upon written notice to the other Party. The JSC may invite non-member employees to participate in, the discussions and meetings of the JSC, provided that such participants will have no voting authority at the JSC. The JSC will be chaired by one of the representatives (“Chairperson”) and will rotate between the Parties every 12 months during the Term. The role of the Chairperson will be to convene and preside at meetings of the JSC. The Chairperson will have no additional powers or rights beyond those held by the other JSC representatives.
(b)
Specific Responsibilities. The JSC will:
(i)
facilitate the flow of information between the Parties with respect to the Exploitation of the Licensed Antibodies and Licensed Products;
(ii)
review, discuss, and determine whether to approve the budget associated with any joint tasks, such as commercial process development or process characterization, a long-term preclinical safety study, or clinical re-supply Manufacture campaigns.
(iii)
review, discuss, and determine whether to approve any Global Development Plan, or any update thereto, pursuant to Section 4.2 (Global Development);
(iv)
review and discuss any Development reports provided by either Party pursuant to Section 4.6 (Development Reports);
(v)
resolve any disagreement between the Parties relating to this Agreement; and
(vi)
perform such other functions as appropriate, to further the purposes of this Agreement, in each case as agreed in writing by the Parties.
(c)
Meetings. During the Term, the JSC will meet on a quarterly basis, unless otherwise agreed to by the JSC. No later than [***] Business Days prior to any meeting of the JSC, the Alliance Managers will jointly prepare and circulate an agenda for such meeting. Either Party may also call a special meeting of the JSC (by videoconference, teleconference, or, if agreed by the Parties, in person) by providing at least five Business Days’ prior written notice to the other Party if such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting, in which event such Party will provide the members of the JSC no later than three Business Days prior to the special meeting with an agenda for the meeting and materials reasonably adequate to enable an
16
informed decision on the matters to be considered. The JSC may meet in person, by videoconference, or by teleconference, as may be agreed by the Parties. Each Party will bear the expense of its respective JSC members’ participation in JSC meetings. Meetings of the JSC will be effective only if at least two JSC members from each Party are present or participating (including by videoconference or teleconference) in such meeting.
(d)
Decision-Making. The representatives from each Party on the JSC will have, collectively, one vote on behalf of that Party, and all decision making will be by consensus. Disputes at the JSC will be handled in accordance with Section 3.3 (Resolution of JSC Disputes). Except as otherwise expressly set forth in this Agreement, the phrase “determine,” “designate,” “confirm,” “approve,” or “determine whether to approve” by the JSC and similar phrases used in this Agreement will mean approval in accordance with this Section 3.2(d) (Decision-Making), including the escalation and tie breaking provisions set forth in Section 3.3 (Resolution of JSC Disputes).
3.3
Resolution of JSC Disputes.
(a)
Within the JSC. All decisions within the JSC will be made by consensus. If the JSC is unable to reach consensus on any issue for which it is responsible within [***] days after a Party affirmatively states that a decision needs to be made, then either Party may elect, by written notice to the other Party, to submit such issue the Parties’ Executive Officers in accordance with Section 3.3(b) (Referral to Executive Officers).
(b)
Referral to Executive Officers. If a Party makes an election under Section 3.3(a) (Resolution of JSC Disputes; Within the JSC) to refer a matter to the Executive Officers, then the Executive Officers will use good faith efforts to resolve promptly such matter, which good faith efforts will include at least one in-person, video, or telephonic meeting between such Executive Officers within [***] Business Days after the submission of such matter to them.
(c)
Final Decision-Making Authority. If the Executive Officers are unable to reach consensus on any such matter within [***] days after its submission to them, then neither Party will have final decision-making authority over such matters, except:
(i)
AffaMed Final Decision-Making Authority. AffaMed will have final decision-making authority with respect to any matter related to the approval of a Global Development Plan under Section 3.2(b)(i) or relating solely to Development activities in the Territory, provided that there is not a reasonable likelihood that any such Development activities could have a material safety impact in the Licensor Territory; and
(ii)
Licensor Final Decision-Making Authority. Licensor will have final decision-making authority with respect to any matter relating solely to Development activities in the Licensor Territory, provided that there is not a reasonable likelihood that any such Development activities could have a material safety impact in the Territory.
(d)
Limitations on Decision-Making. Without the other Party’s prior written consent, neither Party may unilaterally make a decision (in exercise of its final decision-making authority on any such matters) that (A) expands such Party’s contractual rights or reduces such Party’s contractual obligations under this Agreement, (B) results in a material increase in the other Party’s obligations, costs, or expenses or a limitation to the other Party’s rights under this Agreement, (C) conflicts with this Agreement, or would be reasonably likely to result in a violation of applicable law, the requirement of any Regulatory Authorities, or any agreement with any Third Party (including any Third Party License), or result in the
17
infringement or misappropriation of intellectual property rights of any Third Party, or (D) is stated to require the agreement or consent of the JSC. In addition, no exercise by either Party of such Party’s decision-making authority can amend or waive compliance with any terms of this Agreement.
3.4
Discontinuation of JSC. Unless otherwise agreed by the Parties, the JSC will continue to exist until the completion of the Development of the Licensed Antibodies and Licensed Products under this Agreement. Once the JSC is disbanded, the JSC will have no further obligations under this Agreement and, thereafter, the Alliance Managers will directly exchange information as required under this Agreement and any references in this Agreement to decisions of the JSC will automatically become references to decisions by and between the Parties in writing, subject to the other terms of this Agreement and consistent with the terms of Section 3.3(c) (Final Decision-Making Authority).
Article 4
DEVELOPMENT
DEVELOPMENT
4.1
Development Diligence Obligations. AffaMed will use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval of a Licensed Product in the United States. Notwithstanding any provision to the contrary set forth in this Agreement, if Licensor terminates this Agreement in accordance with Section 13.3 (Termination for Breach or Insolvency) as a result of a breach of AffaMed’s diligence obligations under this Section 4.1 (Development Diligence Obligations), then such termination will be Licensor’s sole and exclusive remedy with respect to such breach.
4.2
Global Development. During the Term, the Parties, each at its own sole discretion, may agree, through the JSC, to conduct one or more Global Clinical Trials for the Licensed Products of each Licensed Antibody, all of which Development will be conducted pursuant to a written plan with respect to such Licensed Antibody (each, a “Global Development Plan”) that will be prepared by AffaMed and provided to the JSC to review, discuss, and decide whether to approve the Global Development Plan. Each Global Development Plan will include (a) an outline of all Global Clinical Trials and the trial design thereof, and any all non-clinical or preclinical studies related thereto, in each case, to be conducted by either Party in their respective territories, (b) a timeline for the performance of the foregoing global Development activities, and (c) a budget of the costs and expenses anticipated to be incurred in the performance of the foregoing global Development activities for each Licensed Antibody and related cost sharing mechanism between the Parties.
4.3
Responsibility for Development. Unless otherwise set forth under a Global Development Plan approved by the JSC or if JSC approval is required pursuant to Section 3(b)(ii), each Party will have sole control over and decision-making authority with respect to Development activities with respect to the Licensed Antibodies and Licensed Products for its respective territory at its cost and expense.
4.4
Data Exchange and Use.
(a)
Phase I and II Data in the Territory. Except as otherwise required under this Agreement (including under Section 5.2 (Adverse Event Reporting) and the Pharmacovigilance Agreement pursuant to which Licensee will have access to applicable safety data for the Licensed Products), if Licensor desires to use and reference data and results and any supporting documentation (e.g., protocols, investigator’s brochures, case report forms, analysis plans) for the Licensed Products generated by or on behalf of AffaMed or its Affiliates, Sublicensees, contractors, or subcontractors, if applicable, in a Phase I Clinical Trial or Phase II Clinical Trial for a Licensed Product (collectively the “AffaMed Phase I
18
and II Data”), then Licensor may provide written notice to AffaMed. Upon receipt of such written notice:
(i)
AffaMed will transfer to Licensor such AffaMed Phase I and II Data in a timely manner; and
(ii)
Licensor will pay to AffaMed royalties in accordance with Section 8.3(b)(i) (Early-Stage Trial Royalty).
AffaMed will be responsible for all costs of transferring AffaMed Phase I and II Data incurred by its employees in the aggregate up to an equivalent of [***] FTE in a given Calendar Year. Licensor agrees to reimburse AffaMed any FTE costs of transferring AffaMed Phase I and II Data in excess of [***] FTE in a given Calendar Year.
(b)
Phase III and Post-Marketing Data in the Territory. Except as otherwise required under this Agreement (including under Section 5.2 (Adverse Event Reporting) and the Pharmacovigilance Agreement pursuant to which Licensee will have access to applicable safety data for the Licensed Products), if Licensor desires to use and reference data and results and any supporting documentation (e.g., protocols, investigator’s brochures, case report forms, analysis plans) for the Licensed Products generated by or on behalf of AffaMed or its Affiliates, Sublicensees, contractors or subcontractors, if applicable, in a Phase III Clinical Trial or any Phase IV Clinical Trial or other post-marketing study or post-approval commitment for a Licensed Product (collectively the “AffaMed Phase III and Post-Marketing Data”), then Licensor may provide written notice to AffaMed. Upon receipt of such written notice:
(i)
AffaMed will transfer to Licensor AffaMed Phase III and Post-Marketing Data in a timely manner; and
(ii)
In lieu of the royalties set forth under Section 8.3(b)(i) (Early-Stage Trial Royalty), Licensor will pay to AffaMed royalties set forth in Section 8.3(b)(ii) (Late-Stage Trial Royalty).
AffaMed will be responsible for all costs of transferring AffaMed Phase III and Post-Marketing Data incurred by its employees in the aggregate up to an equivalent of [***] FTE in a given Calendar Year. Licensor agrees to reimburse AffaMed any FTE costs of transferring AffaMed Phase III and Post-Marketing Data in excess of [***] FTE in a given Calendar Year.
4.5
Development Records. Each Party will, and will cause its Affiliates, Sublicensees, and subcontractors to, maintain reasonably complete, current, and accurate records of all Development activities conducted by or on behalf of it and its Affiliates, Sublicensees, and subcontractors, respectively, pursuant to this Agreement and all data and other information resulting from such activities consistent with its usual practices in accordance with applicable law in the Territory. Each Party will maintain all such records relating to the Development of Licensed Products for a period of three years, or a longer period as may be required by applicable law or regulation, after the end of the Term. Each Party will document all non-clinical and preclinical studies and Clinical Trials in formal written study reports in accordance with GLP, cGMP, and GCP in compliance with ICH Guidelines, as applicable, and in compliance with applicable law.
4.6
Development Reports. At each JSC meeting for a Calendar Quarter during which either Party is performing, or having performed, Development activities for any Licensed Product, such Party will provide a report to the other Party summarizing the Development activities for the Licensed Products performed during the period since the preceding JSC meeting. Such reports and any additional information provided by a Party regarding Development activities for the Licensed
19
Products, in each case, will be the Confidential Information of the providing Party and subject to the terms of Article 12 (Confidentiality).
Article 5
REGULATORY
REGULATORY
5.1
Regulatory Responsibilities. Subject to the terms and conditions of this Agreement, AffaMed will have sole control over and decision-making authority with respect to all regulatory activities for the Licensed Antibodies and Licensed Products in the Field in the Territory, both before and after obtaining Regulatory Approval, at its sole cost and expense. AffaMed (itself or through its designee) will own all INDs, Marketing Approvals, Regulatory Approvals, other Regulatory Materials, and related documents, with respect to such Licensed Products (in each case, as applicable) in the Territory. Licensor will provide to AffaMed all assistance reasonably requested in connection with any Regulatory Materials or regulatory activities for the Licensed Products in the Territory.
5.2
Adverse Event Reporting. Within [***] days after the Effective Date, and in any event before the conduct of any Clinical Trial by AffaMed in the Territory, Licensor and AffaMed will Develop and agree on a written agreement to worldwide safety and pharmacovigilance procedures for the Parties with respect to Licensed Products, such as safety data sharing and exchange, adverse events reporting, and signal detection (the “Pharmacovigilance Agreement”). The Pharmacovigilance Agreement will provide that AffaMed will own the global safety database for the Licensed Products.
Article 6
MANUFACTURING AND SUPPLY
MANUFACTURING AND SUPPLY
6.1
Manufacturing by Licensor.
(a)
Clinical Supply. Within [***] days after the Effective Date, the Parties will enter into a manufacturing and supply agreement (the “Clinical Manufacturing and Supply Agreement”) that will be consistent with the material terms and conditions set forth on Schedule 6.1 and which will govern the terms and conditions of the Manufacturing and supply of Licensed Antibodies and Licensed Products for Development, including Clinical Trials.
(b)
Phase III and Commercial Supply. At any time during the Term, if agreed by the Parties, the Parties will enter into a manufacturing and supply agreement that will govern the terms and conditions of the Manufacturing and supply of Licensed Antibodies and Licensed Products to AffaMed for Phase III Clinical Trial or Commercialization purposes (the “Phase III and Commercial Manufacturing and Supply Agreement”). Within [***]days after the Parties agree that Licensor will supply to AffaMed the Licensed Antibodies and Licensed Products for Phase III Clinical Trial or Commercialization purposes, the Parties will enter into such Phase III and Commercial Manufacturing and Supply Agreement. If Licensor is Manufacturing using a CMO, then Licensor will use best efforts to negotiate for such CMO to provide sufficient Licensed Product to satisfy AffaMed’s requirements of Licensed Products for Phase III Clinical Trial(s) and Commercialization in the Territory. If, despite Licensor’s best efforts, such CMO is unable to provide sufficient supply of Licensed Product to satisfy AffaMed’s Phase III and Commercialization requirements in the Territory, then Licensor will complete a
20
Manufacturing Technology Transfer for Phase III Clinical Trial and Commercial supply of the Licensed Products to a CMO designated by AffaMed.
(c)
Arbitration for Failure to Agree. If the Parties cannot reach agreement and enter into a Manufacturing and Supply Agreement within the applicable period set forth in Section 6.1(a) (Clinical Supply) or Section 6.1(b) (Commercial Supply), then the final terms and conditions of such Manufacturing and Supply Agreement will be determined through binding arbitration as follows:
(i)
Each Party will (A) prepare a draft of such Manufacturing and Supply Agreement (which for the Clinical Manufacturing and Supply Agreement will be consistent with the terms set forth on Schedule 6.1(a)) to be used in such arbitration proceeding (each, a “Manufacturing Arbitration Draft”) and (B) submit its Manufacturing Arbitration Draft to the other Party. No later than [***] days after such submissions, the Parties will meet to determine whether they agree to enter into either Party’s Manufacturing Arbitration Draft or a modified version thereof as such Manufacturing and Supply Agreement.
(ii)
If the Parties are unable to agree within the [***] day period set forth in Section 6.1(c)(i), then each Party will select one independent, impartial, and conflicts-free individual to act as arbitrator and the two Party-selected arbitrators will select a third independent, impartial, and conflicts-free arbitrator no later than [***] days after their appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, then the third arbitrator will be appointed by JAMS ADR.
(iii)
Within [***] days after the appointment of such JAMS arbitral tribunal, each Party will submit its Manufacturing Arbitration Draft to the arbitral tribunal. The arbitral tribunal will be instructed to select one of the Parties’ Manufacturing Arbitration Drafts within [***] days following the receipt of the latter of such Manufacturing Arbitration Drafts and to select the draft that it determines to contain the most fair, balanced and customary terms (in addition to reflecting the terms set forth on Schedule 6.1(a) for the Clinical Manufacturing and Supply Agreement). The arbitral tribunal will be limited to selecting only one or the other of the Manufacturing Arbitration Drafts submitted by the Parties. The selection by the arbitral tribunal of one Party’s Manufacturing Arbitration Draft will be binding and conclusive upon both Parties and their Affiliates, and such Manufacturing Arbitration Draft will be the applicable Manufacturing and Supply Agreement, and the Parties will execute the same.
(iv)
The (A) fees of the arbitrators and (B) costs and expenses of the arbitration will be borne by the Party whose Manufacturing Arbitration Draft is not selected by the arbitral tribunal.
(d)
Change of Manufacturer. If, during the Term, Licensor seeks to engage a new CMO to Manufacture or supply the Licensed Antibodies or Licensed Products for the Territory, then such new CMO must be reasonably acceptable to AffaMed (and such consent shall not be unreasonably withheld, conditioned, or delayed). If, during the Term, Licensor or its CMO seeks to initiate any changes with respect to the Manufacture of the Licensed Products that could reasonably be expected to affect the quality or performance of the Licensed Products as Manufactured by Licensor or its CMO, such changes must be reasonably acceptable to AffaMed (and such consent shall not be unreasonably withheld, conditioned or delayed).
21
6.2
Manufacturing by AffaMed. Following completion of the Manufacturing Technology Transfer for the Licensed Products pursuant to Section 2.6(b) (Manufacturing Technology Transfer), AffaMed will, by itself, by an Affiliate or through a designated CMO, have sole control over and decision making authority with respect to the Manufacture of the Licensed Products for Development and Commercial purposes in the Territory. For the avoidance of doubt, AffaMed’s indemnification obligation under Section 11.2(a) applies to Licensed Products Manufactured by AffaMed pursuant to the terms of this Section 6.2 (Manufacture by AffaMed).
Article 7
COMMERCIALIZATION
COMMERCIALIZATION
7.1
Commercialization Diligence Obligations. Following receipt of Regulatory Approval of the Licensed Product in the U.S., AffaMed will use Commercially Reasonable Efforts to Commercialize such Licensed Product in the U.S. Notwithstanding any provision to the contrary set forth in this Agreement, if Licensor terminates this Agreement in accordance with Section 13.3 (Termination for Breach or Insolvency) as a result of a breach of AffaMed’s diligence obligations under this Section 7.1 (Commercialization Diligence Obligations), then such termination will be Licensor’s sole and exclusive remedy with respect to such breach.
7.2
Commercialization Reports. At each JSC meeting for a Calendar Quarter during which either Party is performing, or having performed, Commercialization activities for any Licensed Product, such Party will provide a report to the other Party summarizing the Commercialization activities for the Licensed Products performed during the period since the preceding JSC meeting. Such reports and any additional information provided by a Party regarding Commercialization activities for the Licensed Products, in each case, will be the Confidential Information of the providing Party and subject to the terms of Article 12 (Confidentiality).
7.3
Diversion. Each Party agrees that it will not, and will ensure that its Affiliates and Sublicensees and subcontractors will not, either directly or indirectly, promote, market, distribute, import, sell, or have sold any Licensed Products to any Third Party or to any address or Internet Protocol address or the like in the other Party’s territory, including via the Internet or mail order. Neither Party will engage, nor permit its Affiliates or Sublicensees to engage, in any advertising or promotional activities relating to any Licensed Products for use directed primarily to customers or other buyers or users of the Licensed Products located in any country or jurisdiction in the other Party’s territory, or solicit orders from any prospective purchaser located in any country or jurisdiction in the other Party’s territory. If a Party or its Affiliates or Sublicensees receive any order for any Licensed Products from a prospective purchaser located in a country or jurisdiction in the other Party’s territory, then such Party will immediately refer that order to such other Party and will not accept any such orders. Neither Party will, nor permit its Affiliates or Sublicensees to, deliver or tender (or cause to be delivered or tendered) any Licensed Products to Third Parties for use in the other Party’s territory except in accordance with a Global Development Plan, or except in connection with a Manufacturing Technology Transfer pursuant to Section 2.6(b) (Manufacturing Technology Transfer). Notwithstanding any provision to the contrary set forth in this Agreement, each Party will have the right to attend conferences and meetings of congresses in the other Party’s territory and to promote and market the Licensed Products to Third Party attendees at such conferences and meetings, subject to this Section 7.2 (Diversion). Each Party will have the right to engage key opinion leaders from outside its territory and to participate in education, advisory, and other activities relating to Licensed Products in the other Party’s territory.
22
Article 8
FINANCIALS
FINANCIALS
8.1
Upfront Payment. Within 30 Business Days after receipt of evidence that the Perfection Condition has been satisfied by Licensor, AffaMed will pay to Licensor a one-time, non-refundable, non-creditable payment in the amount of $9,000,000.
8.2
Development and Sales Milestone Payments.
(a)
Development Milestones. AffaMed will make the one-time non-refundable, non-creditable milestone payments set forth in Table 8.2(a) below (each such payment a “Development Milestone Payment”) upon the first achievement of the corresponding milestone event (each such event a “Development Milestone Event”) by AffaMed or its Affiliates or Sublicensees as set forth in this Section 8.2(a). AffaMed will notify Licensor in writing of the achievement of a Development Milestone Event by AffaMed or its Affiliates or Sublicensees promptly after the achievement thereof. Thereafter, Licensor will provide AffaMed with an invoice for the corresponding Development Milestone Payment, and AffaMed will pay to Licensor such Development Milestone Payment no later than [***] days after its receipt of an invoice for such Development Milestone Payment.
Table 8.2(a) - Development Milestones |
||
No. |
Development Milestone Event |
Development Milestone Payment |
1 |
[***] |
[***] |
2 |
[***] |
[***] |
3 |
[***] |
[***] |
4 |
[***] |
[***] |
5 |
[***] |
[***] |
6 |
[***] |
[***] |
7 |
[***] |
[***] |
8 |
[***] |
[***] |
9 |
[***] |
[***] |
10 |
[***] |
[***] |
11 |
[***] |
[***] |
12 |
[***] |
[***] |
Notwithstanding the foregoing, if Development Milestone Event 3 is achieved, but Development Milestone Payment 2 has not been paid, then both Development Milestone Payment 2 and Development Milestone Payment 3 will be due, and if Development Milestone Event 4 is achieved, but Development Milestone Payment 3 has not been paid, then both Development Milestone Payment 3 and Development Milestone Payment 4 will be due.
(b)
Sales Milestones. AffaMed will make the one-time, non-refundable, non-creditable milestone payments set forth in Table 8.2(b) below (each such payment a “Sales Milestone Payment”) upon the first achievement of the corresponding
23
milestone event based on Net Sales of the Licensed Product in the Territory by AffaMed and its Affiliates and Sublicensees (each such event a “Sales Milestone Event”) as set forth in this Section 8.2(b). AffaMed will notify Licensor in writing of the achievement of a Sales Milestone Event by AffaMed or its Affiliates or Sublicensees promptly after the achievement thereof. Thereafter, Licensor will provide AffaMed with an invoice for the corresponding Sales Milestone Payment, and AffaMed will pay to Licensor such Sales Milestone Payment no later than [***] days after its receipt of an invoice for such Sales Milestone Payment.
Table 8.2(b) – Sales Milestones |
||
No. |
Sales Milestone Event |
Sales Milestone Payment |
1 |
[***] |
[***] |
2 |
[***] |
[***] |
3 |
[***] |
[***] |
4 |
[***] |
[***] |
5 |
[***] |
[***] |
8.3
Royalties.
(a)
Net Sales Royalty. During the Royalty Term for a Licensed Product in a country in the Territory, AffaMed will pay to Licensor royalties on annual Net Sales for the Licensed Products in the Territory at the royalty rates set forth below (the “Net Sales Royalty”):
Table 8.3(a) – Net Sales Royalties |
|
Net Sales Royalty Trigger |
Net Sales Royalty Rate |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
(b)
Royalty Payments for AffaMed’s Clinical Data. In accordance with Section 4.4 (Data Exchange and Use), during the Royalty Term for a Licensed Product in a country in the Licensor Territory, Licensor will pay to AffaMed royalties on annual Net Sales for the Licensed Products in the Licensor Territory at the royalty rates set forth below (the “Data Royalty”).
(i)
Early-Stage Trial Royalty. If Licensor exercised its right pursuant to Section 4.4 (Phase I and II Data in the Territory) to access AffaMed’s Phase I Clinical Trial or Phase II Clinical Trial data for a Licensed Product for use in the Licensor Territory, then Licensor will pay the Data Royalty set forth in Table 8.3(b)(i) below, on a country-by-country basis, where such data was used in Regulatory Material that resulted in a Regulatory Approval for the Licensed Product in the Licensor Territory:
Table 8.3(b)(i) – Early Stage |
|
Data Royalty Trigger |
Data Royalty Rate |
[***] |
[***] |
24
Table 8.3(b)(i) – Early Stage |
|
Data Royalty Trigger |
Data Royalty Rate |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
(ii)
Late-Stage Trial Royalty. If Licensor exercised its right pursuant to Section 4.4(b) (Phase III and Post-Marketing Data in the Territory) to access AffaMed’s Phase III Clinical Trial or any Phase IV Clinical Trial or other post-marketing study or post-approval commitment for a Licensed Product for the Licensor Territory, then Licensor will pay the Data Royalty set forth in Table 8.3(b)(ii) below, on a country-by-country basis, where such data was used in Regulatory Material that resulted in Regulatory Approval for the Licensed Product in the Licensor Territory:
Table 8.3(b)(ii) – Late Stage |
|
Data Royalty Trigger |
Data Royalty Rate |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
For the avoidance of doubt, if both Section 8.3(b)(i) and Section 8.3(b)(ii) apply in a given country in the Licensor Territory, then Licensor will only owe to AffaMed the Data Royalties set forth in Section 8.3(b)(ii).
(c)
Reports; Payment. The Net Sales Royalty or Data Royalty calculation will be delivered in writing by the applicable Party to the other Party within [***] days after the end of each Calendar Quarter, and will include the aggregate gross sales of the Licensed Product in the applicable territory during such Calendar Quarter by the applicable Party and its Affiliates and (Sub)licensees, the corresponding Net Sales of the Licensed Product in the applicable territory during such Calendar Quarter by the applicable Party and its Affiliates and (Sub)licensees, the aggregate amount of Net Sales in the current Calendar Year by the applicable Party and its Affiliates and (Sub)licensees, and the amount of the Net Sales Royalty or Data Royalty payment, as applicable, payable by the applicable Party with respect to such Net Sales (each, a “Net Sales Statement”). The Party receiving the Net Sales Statement will invoice the other Party within [***] days after receipt of the Net Sales Statement. Parties will pay all invoices within [***] days from receipt of such invoice. All payments under this Agreement will be payable, in full, in U.S. dollars, regardless of the country(ies) in which such sales are made. For purposes of computing the royalty of any Licensed Product that is sold in a currency other than United States dollars, such currency will be converted into United States dollars at the median of the buying rate and the selling rate of exchange reported by the Wall Street Journal on the last day for the month in which such sales were recorded.
(d)
Reductions of Net Sales Royalty. Notwithstanding the foregoing:
(i)
Royalty Reduction upon Expiration of Valid Claims. If, on a country-by-country and Licensed Product-by-Licensed Product basis, pursuant to Section 8.3(a) (Net Sales Royalty), any Net Sales Royalties are payable on Net Sales of a
25
Licensed Product attributable to any country in the Territory where there is no Licensor Patent Right containing a Valid Claim covering such Licensed Product in such country (i.e., Net Sales Royalties are payable on Net Sales of a Licensed Product in a country on the basis of clauses (b) or (c) in the definition of Royalty Term), then, except as otherwise set forth in this Section 8.3(d) (Reductions), the royalty rates applicable to those Net Sales of such Licensed Product for such country will be reduced by [***] from those set forth in Section 8.3(a) (Net Sales Royalty).
(ii)
Reduction for Biosimilar Launch in the Territory. On a country-by-country and Licensed Product-by-Licensed Product basis in the Territory, upon first sale of a Biosimilar Product with respect to a Licensed Product in a country in the Territory, the Net Sales Royalty payable to Licensor for Net Sales of Licensed Products in the applicable country will be reduced by [***].
(iii)
Reduction for Blocking IP. With respect to any Third Party License pursuant to which AffaMed is granted rights under any Blocking IP to Exploit the Licensed Products in a country or jurisdiction in the Territory, AffaMed will be entitled to deduct from any (A) Net Sales Royalties payable hereunder with respect to that country or other jurisdiction [***] of any amounts paid to such Third Party under such Third Party License to the extent attributable to such country or region and (B) milestone payments payable hereunder with respect to that country or other jurisdiction, [***] of any upfront or milestones paid to such Third Party under such Third Party License.
(iv)
Royalty Floor. In no event will the Net Sales Royalties otherwise due to Licensor for the Licensed Products in a Calendar Quarter during the Royalty Term be reduced by more than [***] of the amount that would otherwise be due in such Calendar Quarter for the Licensed Products but for the reductions set forth in Section 8.3(d)(iii) (Reduction for Blocking IP). However, if AffaMed is unable to fully offset against Net Sales Royalties any reductions and deductions permitted under this Section 8.3(d) (Reductions) due to the operation of the foregoing floor, then AffaMed may carry forward any such amounts to reduce subsequent royalty payments in future periods.
8.4
Reduction of Data Royalty for Biosimilar Launch. On a country-by-country and Licensed Product-by-Licensed Product basis in the Licensor Territory, upon first sale of a Biosimilar Product with respect to a Licensed Product in a country in the Licensor Territory, the Data Royalty payable to AffaMed for Net Sales of Licensed Products in the applicable country will be reduced by [***].
8.5
Books and Records; Audit Rights.
(a)
Each Party will have the right to engage, at its own cost and expense, subject to this Section 8.4 (Books and Records; Audit Rights), an independent nationally recognized public accounting firm in the United States chosen by such Party and reasonably acceptable to the audited Party (which accounting firm will not be the external auditor of the auditing Party, will not have been hired or paid on a contingency basis, and will have experience auditing biotech or pharmaceutical companies) (a “CPA Firm”) to conduct an audit of the audited Party for the purposes of confirming the audited Party’s compliance with the payment provisions of this Agreement.
26
(b)
The CPA Firm will be given access to and will be permitted to examine such books and records of the audited Party as it will reasonably request, upon [***] days’ prior written notice having been given by the auditing Party, during regular business hours, for the sole purpose of determining compliance with the payment provisions of this Agreement. Prior to any such examination taking place, the CPA Firm will enter into a confidentiality agreement reasonably acceptable to the audited Party and will not include in its report or otherwise disclose to the auditing Party or any Third Party any information labeled by the audited Party as being confidential customer information regarding pricing or other competitively sensitive proprietary information.
(c)
Licensor and AffaMed will be entitled to receive a full written report of the CPA Firm with respect to its findings and the auditing Party will provide, without condition or qualification, the audited Party with a copy of the report, or other summary of findings, prepared by such CPA Firm promptly following the auditing Party’s receipt of same. In the event of any dispute between Licensor and AffaMed regarding the findings of any such inspection or audit, the Parties will initially attempt in good faith to resolve the dispute amicably between themselves, and if the Parties are unable to resolve such dispute within [***] days after delivery to both Parties of the CPA Firm’s report, each Party will select an internationally recognized independent certified public accounting firm (other than the CPA Firm), and the two firms chosen by the Parties will choose a third internationally recognized independent certified public accounting firm which will resolve the dispute, and such accounting firm’s determination will be binding on both Parties, absent manifest error by such accounting firm.
(d)
Within [***] days after completion of the CPA Firm’s audit, the audited Party will pay to the auditing Party any deficiency in the payment amount determined by the CPA Firm. If the report of the CPA Firm shows that the audited Party overpaid, then the audited Party will be entitled to off-set such overpayment against any payments then owed to the auditing Party hereunder. If no payments are then owed to the auditing Party, then the auditing Party will remit such overpayment to the audited Party. If the report of the CPA Firm shows a discrepancy between the amount of the royalty to which the auditing Party is entitled and the amounts actually paid hereunder by the audited Party, then in addition to the payment of the shortfall in the payment amounts due hereunder, if such discrepancy exceeds [***] of the audited amount, then the fees and expenses of the CPA Firm in performing such audit will be paid by the audited Party.
(e)
The auditing Party’s exercise of its audit rights under this Section 8.4 (Books and Records; Audit Rights) may not (i) be conducted for any Calendar Quarter more than three years after the end of such Calendar Quarter to which such books and records pertain, (ii) be conducted more than [***] in any [***] period (unless a previous audit during such [***] period revealed a material underpayment with respect to such period), or (iii) be repeated for any Calendar [***].
8.6
Taxes.
(a)
Taxes on Income. Except as set forth in this Section 8.6 (Taxes), each Party will be solely responsible for the payment of any and all taxes levied on account of all payments it receives under this Agreement.
(b)
Tax Withholding. If applicable laws require the withholding of taxes, then AffaMed will make such withholding payments in a timely manner and will subtract the amount thereof from the payments to Licensor. AffaMed will promptly (as available) submit to Licensor appropriate proof of payment of the withheld taxes as well as the official receipts within a
27
reasonable period of time. AffaMed will provide Licensor reasonable assistance in order to allow Licensor to obtain the benefit of any present or future treaty against double taxation or refund or reduction in taxes that may apply to the payments under this Agreement. Without limiting the generality of the foregoing, if Licensor is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, or recovery of, applicable withholding taxes, then it may deliver to AffaMed or the appropriate governmental authority in the Territory the prescribed forms necessary to reduce the applicable rate of withholding or to relieve AffaMed of its obligation to withhold taxes. In such case, AffaMed will apply the reduced rate of withholding, or not withhold, as the case may be, provided that AffaMed is in receipt of evidence, in a form reasonably satisfactory to AffaMed (e.g., Licensor’s delivery of all applicable documentation) prior to the time that the applicable payments are due.
(c)
Tax Cooperation. Each Party will provide the other with reasonable assistance to enable the recovery, as permitted by applicable law, of withholding taxes, VAT, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or VAT.
(d)
VAT. The Parties agree to cooperate with one another and use reasonable efforts to ensure that any value added tax or similar payment (“VAT”) does not represent an unnecessary cost in respect of payments made under this Agreement. If any VAT is owing in any jurisdiction with respect to any such payment, then AffaMed will pay such VAT and, such payment will be made after deduction of such VAT that is due specifically in relation to such payment to Licensor under this Agreement. In the event that any deducted VAT is later recovered by AffaMed or its Affiliates, AffaMed will promptly reimburse Licensor for the deducted amount. In the event that any VAT is owing in any jurisdiction in respect of any such payment, Licensor will provide to AffaMed tax invoices showing the correct amount of VAT in respect of such payments hereunder.
8.7
Late Payments. Any payments or portions thereof due hereunder that are not paid on the date such payments are due under this Agreement will bear interest at a rate equal to the lesser of: (a) [***] in which such payments are overdue; or (b) the maximum rate permitted by applicable law; in each case, calculated on the number of days such payment is delinquent, compounded monthly.
8.8
No Other Compensation. Other than as explicitly set forth (and as applicable) in this Agreement, neither AffaMed nor any of its Affiliates will be obligated to pay any additional fees, milestone payments, royalties, or other payments of any kind to or on behalf of Licensor or any of its Affiliates under this Agreement.
8.9
Other Amounts Payable. With respect to any amounts owed under this Agreement by a Party to the other Party for which no other invoicing and payment procedure is specified in this Agreement, the payee Party will provide an invoice, together with reasonable supporting documentation, to the paying Party for such amounts owed. The paying Party will pay any undisputed amounts within [***] days after receipt of the invoice, and will pay any disputed amounts owed by the paying Party no later than [***]days after resolution of the dispute.
Article 9
INTELLECTUAL PROPERTY
INTELLECTUAL PROPERTY
9.1
Ownership.
(a)
Background Technology.
28
(i)
As between the Parties, Licensor will retain all rights, title, and interests in and to any Patent Rights, Know-How, and other intellectual property rights owned or Controlled by Licensor or any of its Affiliates as of the Effective Date or generated or obtained by or on behalf of Licensor or any of its Affiliates during the Term outside of the scope of this Agreement, and (b) AffaMed will retain all rights, title, and interests in and to any Patent Rights, Know-How, and other intellectual property rights owned or Controlled by AffaMed or any of its Affiliates as of the Effective Date or generated or obtained by or on behalf of AffaMed or any of its Affiliates during the Term outside of the scope of this Agreement.
(ii)
Licensor has entered into an assignment agreement with Jiangsu Aosaikang Pharmaceutical Co Ltd. under which Jiangsu Aosaikang Pharmaceutical Co Ltd. has assigned all right, title, and interest it had in and to any Licensor Patent Rights in the Territory to Licensor (the “IP Assignment Agreement”). For clarity, Jiangsu Aosaikang Pharmaceutical Co Ltd. did not and does not have any right, title, or interest in and to U.S. patent application numbers [***] and Licensor is the sole owner of such patent applications. Licensor will, at its sole cost and expense, take all actions necessary to perfect its sole ownership of the Licensor Patent Rights assigned under the IP Assignment Agreement, including recording the IP Assignment Agreement with any applicable government authorities where Licensor Patent Rights currently exist (the “Perfection Condition”).
(iii)
Licensor will, at its sole cost and expense, promptly take all actions necessary to perfect its sole ownership of U.S. patent application numbers [***], including recording inventor assignment agreements with any applicable government authorities.
(b)
Arising Technology. Subject to the licenses granted in Article 2 (Licenses), each Party will exclusively retain all right, title and interest in and to, and ownership of, all Know-How, Patent Rights and other intellectual property developed or invented solely by or on behalf of such Party (or its Affiliates or its or their Sublicensees) in the course of performance of activities under this Agreement. Subject to the licenses and other rights granted herein, as between the Parties, each Party will own an equal, undivided interest in any and all Joint Know-How and Joint Patent Rights generated in performance of activities under this Agreement. Inventorship and ownership rights in Patent Rights and other Know-How invented or developed after the Effective Date under this Agreement will be determined under the intellectual property laws of the United States (regardless of where such Know-How or intellectual property was created, conceived, discovered, developed or reduced to practice).
(c)
Disclosure. Each Party will promptly disclose to the other Party all invention disclosures or other similar documents relating to Know-How (i) developed or invented by or on behalf of such Party hereunder during the Term and (ii) that is necessary or reasonably useful to Exploit Licensed Products in the other Party’s territory, and all invention disclosures or other similar documents submitted to such Party by its or its Affiliates’ employees, agents or independent contractors relating to such Know-How, and will also respond promptly to reasonable requests from the other Party for additional information relating to such disclosures, documents or applications.
(d)
CREATE Act. Notwithstanding any provision to the contrary set forth in this Agreement, neither Party may invoke this Agreement as a “joint research agreement” pursuant to the
29
Cooperative Research and Technology Enhancement Act, 35 U.S.C. § 102(c) without the prior written consent of the other Party.
9.2
Prosecution, Maintenance, and Enforcement of Licensor Technology.
(a)
Licensor Technology. From and after the Effective Date, AffaMed will have the right to control the preparation of, filing for, and prosecution and maintenance of (including the defense of any oppositions, interferences, reissue proceedings, re-examinations and other post-grant proceedings originating in a patent office) the Licensor Patent Rights, at AffaMed’s cost and expense, as well as filing for any patent term extensions or similar protections in the Territory, subject to Section 9.6 (Patent Right Extensions; Regulatory Exclusivity).
(b)
Notice and Comment; Step-In. AffaMed will provide Licensor copies of and a reasonable opportunity to review and comment upon the text of the applications relating to the Licensor Patent Rights. AffaMed will reasonably consider any comments from Licensor in good faith and will reasonably incorporate such comments where appropriate. AffaMed will provide Licensor with a copy of each application for a Licensor Patent Right as filed, together with notice of its filing date and application number. AffaMed will keep Licensor advised of the status of all material communications, actual and prospective filings or submissions regarding Licensor Patent Rights, and will give Licensor copies of and a reasonable opportunity to review and comment on any such communications, filings, and submissions proposed to be sent to any patent office or judicial body. AffaMed will reasonably consider in good faith Licensor’s comments on the communications, filings, and submission for the Licensor Patent Rights and if reasonable, include such comments in any response to a patent office or judicial body. Licensor will provide AffaMed any cooperation or assistance reasonably requested by AffaMed in connection with such filing, prosecution and maintenance (including defending or prosecuting office actions, prosecutions or interferences). If AffaMed declines to file for, prosecute or maintain (including defending or prosecuting office actions, prosecutions or interferences) any Licensor Patent Right, then it will give Licensor reasonable notice thereof and thereafter, Licensor may, upon written notice to AffaMed and at Licensor’s sole cost, control the filing for, prosecution and maintenance of such Licensor Patent Right thereafter in accordance with this Section 9.2(a) (Licensor Technology), mutatis mutandis.
(c)
Transfer of Files. No later than [***] days after the Effective Date, Licensor will (i) provide AffaMed, at no charge, with copies of all documents (including file histories and then current dockets) for the applicable Licensor Patent Rights that are in the file maintained by Licensor’s in-house or outside patent counsel for such Licensor Patent Rights or otherwise available to Licensor, including any communications, filings, and drafts as well as written notice of any pending deadlines or communications for such Licensor Patent Rights (provided, however, that Licensor will provide notice of pending deadlines as promptly as possible after the Effective Date so as to ensure adequate time and coordination with respect to such deadlines), and (ii) execute and deliver any legal papers reasonably requested by AffaMed to effectuate transfer of control of the filing, prosecution and maintenance of the Licensor Patent Rights (excluding papers that transfer any right, title or interest in or to the Licensor Patent Rights other than such control). In the event Licensor assumes control of the preparation of, filing for, and prosecution and maintenance (including the defense of any oppositions, interferences, reissue proceedings, re-examinations and other post-grant proceedings originating in a patent office) with respect to any Licensor Patent Rights pursuant to Section 9.2(a) (Licensor Technology), then AffaMed will (A) provide Licensor with copies of any relevant communications, filings, drafts and documents not previously provided to Licensor as well as written notice
30
of any pending deadlines or communications applicable thereto, and (B) execute and deliver any legal papers reasonably requested by Licensor to effectuate transfer of control of the filing, prosecution and maintenance of such Licensor Patent Rights (including papers that transfer any rights, title, or interests in or to the Licensor Patent Rights to Licensor).
(d)
Cooperation. Each Party will reasonably cooperate with the other Party in the filing, prosecution, defense, and maintenance of the Licensor Patent Rights. Such cooperation includes promptly executing all documents, requiring inventors to be available to discuss and review applications and other filings, and requiring inventors, subcontractors, employees, and consultants and agents of such Party and any of its Affiliates, and for the prosecuting Party and any of its Affiliates and Sublicensees (with respect to AffaMed), to execute all documents, as reasonable and appropriate so as to enable the prosecution and maintenance of any such Licensor Patent Rights.
9.3
Defense and Settlement of Third Party Claims.
(a)
Notice. Each Party will give the other Party prompt written notice of any allegation by any Third Party that a Patent Right or other right owned or controlled by it is infringed by the Exploitation of any Licensed Antibody or Licensed Product.
(b)
AffaMed’s Territory. From and after the Effective Date, if a Third Party asserts that a Patent Right or other right owned by it is infringed by the Exploitation of any Licensed Antibody or Licensed Product in the Field in the Territory, then AffaMed will have the sole right to defend against any such assertions at AffaMed’s sole cost or elect to settle such claims (except as set forth below). Licensor or any of its Affiliates will assist AffaMed and cooperate in any such litigation at Licensor’s request. Licensor may join any defense pursuant to this Section 9.3(b) (AffaMed’s Territory), with its own counsel, at its sole cost and expense. AffaMed or any of its Affiliates may settle or consent to the entry of any judgment in any enforcement action hereunder without Licensor’s prior consent; provided, that AffaMed provides a reasonable opportunity for Licensor to review and comment on such proposed settlement or consent judgment, which comments will be considered in good faith. Notwithstanding the foregoing, AffaMed may not enter any settlement or consent judgment that imposes any liability or obligation on Licensor or any of its Affiliates without the prior written consent of Licensor (such consent not to be unreasonably withheld, conditioned, or delayed).
(c)
Licensor’s Territory. From and after the Effective Date, if a Third Party asserts that a Patent Right or other right owned by it is infringed by the Exploitation of any Licensed Antibody or Licensed Product in the Field in the Licensor Territory, then Licensor will have the sole right to defend against any such assertions at Licensor’s sole cost or elect to settle such claims (except as set forth below). AffaMed or any of its Affiliates will assist Licensor and cooperate in any such litigation at AffaMed’s request. AffaMed may join any defense pursuant to this Section 9.3(c) (Licensor’s Territory), with its own counsel, at its sole cost and expense. Licensor or any of its Affiliates may not settle or consent to the entry of any judgment in any enforcement action hereunder without AffaMed’s prior consent (such consent not to be unreasonably withheld, conditioned or delayed).
9.4
Enforcement.
(a)
Enforcement and Cooperation. If (i) Licensor or AffaMed becomes aware of any actual or suspected infringement of any Licensor Patent Right, or (ii) any such Licensor Patent Right is challenged in any action or proceeding (other than any interferences, oppositions, reissue proceedings or re-examinations, which are addressed in Section 9.2(a) (Licensor Technology)), then such Party will notify the other Party promptly, and following such
31
notification, the Parties will confer. AffaMed will have the first right, but will not be obligated, to defend any such action or proceeding in the Territory or bring an infringement action with respect to such infringement in the Territory at its own expense, in its own name and entirely under its own direction and control, or settle any such action or proceeding by sublicense (including, at AffaMed’s sole discretion, granting a sublicense, covenant not to sue or other right with respect to an Antibody or product (including a Biosimilar Product) in the Field in the Territory). In the event AffaMed fails to defend such action, abate such infringement, or file an action to abate such infringement in the Territory within [***] days after a written request from the Licensor to do so, or if AffaMed discontinues the prosecution of any such action after filing without abating such infringement, then Licensor will have the second right, but will not be obligated, to defend any such action or proceeding in the Territory or bring an infringement action with respect to such infringement in the Territory at its own expense, in its own name and under its own direction and control. Regardless of which Party exercises its right this Section 9.4(a) (Enforcement and Cooperation), the other Party and its Affiliates will reasonably assist such enforcing Party in any action or proceeding being defended or prosecuted if so requested, and will agree to be named in or join such action or proceeding if requested by such enforcing Party. If the other Party elects to be represented by legal counsel, then the enforcing Party will bear all of such Party’s related and reasonable legal costs and expenses if the other Party is required to be named in or joined in such action or proceeding or is joined in such action or proceeding at the enforcing Party’s request.
(b)
Damages. If either Party exercises the rights conferred in this Section 9.4 (Enforcement) and recovers any damages, payments, or other sums in such action or proceeding or in settlement thereof, then such damages or other sums recovered will first be applied to all out-of-pocket costs and expenses incurred by such enforcing Party in connection therewith (including attorney’s fees). If such recovery is insufficient to cover all such costs and expenses of both Parties, then the enforcing Party’s costs will be paid in full first before any of the other Party’s costs. If after such reimbursement any funds will remain from such damages or other sums recovered, such funds will be treated as Net Sales of AffaMed in the Territory.
9.5
Trademarks. The Parties may develop and adopt certain distinctive colors, logos, images, symbols, and trademarks to be used in connection with the Commercialization of the Licensed Products on a global basis (such branding elements, collectively, the “Global Brand Elements”). Each Party will have the right to brand the Licensed Products in its respective territory using trademarks, logos, and trade names that it determines appropriate, which may vary by region or within a region, and that are consistent with the Global Brand Elements (the “Product Marks”). Each Party will solely own all right, title and interest in and to any Product Marks adopted for use with the Licensed Products in its respective territory, and will be responsible for the registration, filing, maintenance, and enforcement thereof.
9.6
Patent Right Extensions; Regulatory Exclusivity.
(a)
Patent Right Term Extension. If elections with respect to obtaining patent term extension or supplemental protection certificates or their equivalents in any country in the Territory with respect to any Licensed Product becomes available, upon Regulatory Approval or otherwise, AffaMed will have the sole right to file for patent term extension or supplemental protection certificates or their equivalents and to determine which issued patent to extend. Licensor and any of its Affiliates will reasonably cooperate with AffaMed so as to enable AffaMed to exercise its rights under this Section 9.6(a) (Patent Right Term Extension). Such cooperation includes promptly executing all documents, requiring inventors to be available to discuss and review any filings, and requiring inventors,
32
subcontractors, employees, consultants and agents of Licensor or any of its Affiliates to execute all documents, as reasonable and appropriate so as to enable AffaMed to exercise its rights under this Section 9.6(a) (Patent Right Term Extension).
(b)
Regulatory Exclusivity. With respect to Regulatory Exclusivity periods (such as orphan drug exclusivity and any available pediatric extensions), AffaMed will have the sole right to seek and maintain all such Regulatory Exclusivity periods that may be available for the Licensed Products in the Field in the Territory.
Article 10
REPRESENTATIONS, WARRANTIES AND COVENANTS
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1
Mutual Representations, Warranties, and Covenants. Each Party hereby represents and warrants to the other Party as of the Effective Date, and covenants, as applicable, as a material inducement for such other Party’s entry into this Agreement, as follows:
(a)
Corporate Existence and Power. It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including the right to grant the licenses granted by it hereunder.
(b)
Authority and Binding Agreement. (i) It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder (including granting licenses and rights); (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (iii) this Agreement has been 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.
(c)
No Conflict. It is not a party to and will not enter into any agreement that would prevent it from granting the rights or exclusivity granted or intended to be granted to the other Party under this Agreement or performing its obligations under this Agreement.
(d)
Consents. All consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with this Agreement have been obtained.
(e)
Bankruptcy; Insolvency. It and its Affiliates are not subject to any action or petition, pending or otherwise, for bankruptcy or insolvency in any state, country, or other jurisdiction, and it is not aware of any facts or circumstances that could result in such Party or any of its Affiliates becoming or being declared insolvent, bankrupt, or otherwise incapable of meeting its obligations under this Agreement as they become due in the ordinary course of business.
10.2
Additional Representations and Warranties of Licensor. Except as may be qualified by the disclosures set forth in the applicable schedules set forth below, Licensor represents and warrants to AffaMed as of the Effective Date, as applicable, as follows:
(a)
No Conflicts. Neither Licensor nor any of its Affiliates has entered into any agreement (other than agreements with subcontractors) granting any right, interest, or claim in or to,
33
any Licensor Technology to any Third Party that would conflict with the licenses and other rights granted to AffaMed under this Agreement. The Licensor Technology constitutes all intellectual property rights owned, Controlled, or otherwise held for use by Licensor and any of its Affiliates that are necessary or reasonably useful for the Exploitation of the Licensed Antibodies or Licensed Products in the Field in the Territory.
(b)
Ownership. All Licensor Technology existing as of the Effective Date is exclusively owned by Licensor or any of its Affiliates, and is free and clear of any (i) liens, charges, security interests, and encumbrances or licenses, including claims by any governmental authority or academic or non-profit institution, and (ii) claims or covenants that would conflict with or limit the scope of any of the rights or licenses granted to AffaMed hereunder, or would give rise to any Third Party claims for payment against AffaMed or any of its Affiliates.
(c)
No Notice of Infringement or Misappropriation. Neither Licensor nor its Affiliates have received any written notice or threat in writing from any Third Party asserting or alleging that any Exploitation of the Licensor Technology, Licensed Products, or Licensed Antibodies prior to the Effective Date infringed, misappropriated, or otherwise violated any intellectual property rights of such Third Party. To the best of Licensor’s knowledge, the conception, development, and reduction to practice of any of the Licensor Technology has not constituted or involved the misappropriation of trade secrets or other rights or property of any Third Party. Additionally, to the best of Licensor’s knowledge, there is no unauthorized use, infringement, or misappropriation of any Licensor Technology by any Third Party.
(d)
Licensor Patent Rights. Schedule 1.63 sets forth a complete and accurate list all Licensor Patent Rights as of the Effective Date. All Licensor Patent Rights existing as of the Effective Date have been and are being diligently prosecuted in the respective patent offices in the Territory in accordance with applicable law, have been and are being filed and maintained properly and all applicable fees have been paid on or before the due date for payment, and to the knowledge of Licensor, are not invalid or unenforceable, in whole or in part. There are no oppositions, nullity actions, interferences, inter partes reexaminations, inter partes reviews, post‑grant reviews, derivation proceedings, or other proceedings pending or threatened in writing (but excluding office actions or similar communications issued by the United States Patent Right and Trademark Office or any analogous foreign governmental authority). The inventorship of each Licensor Patent Right is properly identified on each patent and patent application, and to the best of Licensor’s knowledge there are not any disputes with respect to inventorship of any Licensor Patent Right. All Licensor Patent Rights have been duly and properly filed and maintained and the inventors thereof and to the best of Licensor’s knowledge the parties prosecuting such applications have complied in all material respects with their duty of candor and disclosure to the U.S. Patent Right and Trademark Office and other foreign patent offices in connection with such applications. The Licensor Patent Rights represent all Patent Rights owned, Controlled, or held for use by Licensor and any of its Affiliates that are necessary or reasonably useful for the Exploitation of the Licensed Antibodies or Licensed Products in the Territory.
(e)
Third Party Agreements. Neither Licensor nor any of its Affiliates have entered into any agreement with any Third Party pursuant to which Licensor Controls or grants any
34
intellectual property rights with respect to the Licensor Technology or Licensed Antibodies for the Territory.
(f)
Licensed Antibodies. Licensor has disclosed to AffaMed all Antibodies that Licensor or any of its Affiliates owns or in-licenses, as of the Effective Date, that relate to the Licensed Antibodies including Backup Molecules.
(g)
Licensor Assignment. With respect to any Licensor Technology owned by Licensor, (i) Licensor and its Affiliates have obtained from all employees and independent contractors who participated in the invention or authorship thereof, assignments of all ownership rights of such employees and independent contractors in such Licensor Technology, either as described in written agreement or by operation of law; (ii) all of its employees, officers, contractors, and consultants have executed agreements or have existing obligations under applicable law requiring assignment to Licensor or its Affiliates, as applicable, of all rights, title, and interests in and to inventions made during the course of and as the result of this Agreement; and (iii) no officer or employee of Licensor or its Affiliates is subject to any agreement with any other Third Party that requires such officer or employee to assign any interest in any Licensor Technology to any Third Party.
(h)
All Material Information Furnished. Licensor has provided AffaMed with the opportunity to review all written material information or data in Licensor’s possession relating to the subject matter of this Agreement and such written material information or data is true, correct and complete in all material respects. Licensor has not intentionally concealed from AffaMed any such material information or data and has not withheld any material information related to the Licensor Technology, Licensed Antibodies, or Licensed Products, in each case, that was requested by AffaMed in writing.
(i)
Government Funding. No government funding, facilities of a university, college, or other educational institution or research center was used in the development of any Licensor Technology. No Person who was involved in, or who contributed to, the creation or development of any Licensor Patent Right has performed services for the government, university, college, or other educational institution or research center in a manner that would affect Licensor’s rights in the Licensor Technology.
(j)
Conduct of Research and Development. Licensor and its Affiliates have conducted, and their respective contractors and consultants have conducted prior to the Effective Date, the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products in compliance with all applicable laws, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over such Exploitation. Licensor possesses all permits, licenses, and other authorizations required to be held or maintained for the Manufacture of the Licensed Antibodies and Licensed Products as of the Effective Date. Licensor and its Affiliates did not use in any capacity in connection with the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products any Person that had been debarred as described in Section 306 of the FD&C Act, as amended, or that was the subject of a conviction described in such section.
(k)
Confidentiality of Trade Secrets. Licensor and its Affiliates have taken commercially reasonable measures consistent with industry practices to protect the secrecy, confidentiality, and value of all Licensor Know-How that constitutes trade secrets under applicable law (including requiring all employees, consultants, and independent contractors to execute binding and enforceable agreements requiring all such employees, consultants, and independent contractors to maintain the confidentiality of such Know-How), and such Know-How has not been used, disclosed to, or discovered by any Third
35
Party except as described in confidentiality agreements and, to Licensor’s knowledge, there has not been a breach by any party to such confidentiality agreements.
10.3
Covenants of Licensor. Licensor covenants to AffaMed that, during the Term:
(a)
Licensor will not, and will cause its Affiliates not to (a) license, sell, assign, or otherwise transfer to any Person, or otherwise encumber, the Licensor Technology or (b) incur or permit to exist, with respect to the Licensor Technology, any lien, encumbrance, charge, security interest, mortgage, liability, grant of license to Third Parties, or other restriction (including in connection with any indebtedness), in each case ((a) and (b)), in a manner that conflicts with, or limits the scope of, any of the rights or licenses granted to AffaMed hereunder;
(b)
Neither Licensor nor any of its Affiliates will effect any corporate restructuring or enter into any new agreement with or otherwise obligate itself to any Third Party, or amend an existing agreement with a Third Party, in each case, in a manner that conflicts with or otherwise adversely affects the rights and licenses (or sublicenses, as the case may be) granted to AffaMed hereunder;
(c)
Licensor and its Affiliates will not, to their respective knowledge, misappropriate the trade secrets or other rights or property of any Third Party in the conception, development, and reduction to practice of any Licensor Technology;
(d)
Licensor will promptly inform AffaMed if it at any time becomes aware that any Licensed Antibody, Licensed Product, or Licensor Technology, infringes, misappropriates, or otherwise violates any intellectual property of any Third Party;
(e)
Licensor will not assign, transfer, convey, or grant any license or other rights under its interest in the Joint Technology that would conflict with or limit the scope of the licenses granted to AffaMed hereunder; and
(f)
Licensor will, upon obtaining knowledge of any non-compliance with any applicable laws, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over Exploitation of the Licensed Products or Licensed Antibodies, take all corrective action possible to remedy such non-compliance.
10.4
Compliance by AffaMed. AffaMed and its Affiliates will not use in any capacity in connection with the Exploitation of the Licensor Technology, Licensed Antibodies, or Licensed Products any Person that had been debarred as described in Section 306 of the FD&C Act, as amended, or that was the subject of a conviction described in such section.
10.5
NO OTHER REPRESENTATIONS OR WARRANTIES. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY WITH RESPECT TO ANY PATENTS, KNOW‑HOW, MATERIALS, COMPOUND, PRODUCT, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE EXPLOITATION OF ANY COMPOUND OR PRODUCT AS DESCRIBED IN THIS AGREEMENT WILL BE SUCCESSFUL.
36
Article 11
INDEMNIFICATION
INDEMNIFICATION
11.1
Indemnification by Licensor. Subject to the remainder of this Article 11 (Indemnification), Licensor will defend, indemnify, and hold AffaMed, its Affiliates, and its and their respective officers, directors, employees, and agents (the “AffaMed Indemnitees”) harmless from and against any and all liabilities, losses, costs, damages, fees, taxes, expenses or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such AffaMed Indemnitees, all to the extent resulting from claims, suits, proceedings, or causes of action brought by or on behalf of such Third Party against such AffaMed Indemnitees that arise from or are based on: (a) the Exploitation of Licensed Antibodies or Licensed Products by or on behalf of Licensor or any of its Affiliates or any Third Party; (b) a breach of any of Licensor’s representations, warranties, or obligations under this Agreement; or (c) the willful misconduct or grossly negligent acts by or on behalf of Licensor or any of its Affiliates; excluding, in each case ((a), (b), and (c)), any damages or other amounts for which AffaMed has an obligation to indemnify any Licensor Indemnitee pursuant to Section 11.2 (Indemnification by AffaMed).
11.2
Indemnification by AffaMed. Subject to the remainder of this Article 11 (Indemnification), AffaMed will defend, indemnify, and hold Licensor, its Affiliates, and each of their respective officers, directors, employees, and agents (the “Licensor Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such Licensor Indemnitees, all to the extent resulting from any claims, suits, proceedings, or causes of action brought by such Third Party against such Licensor Indemnitees that arise from or are based on: (a) the Exploitation of Licensed Antibodies or Licensed Products by or on behalf of AffaMed or any of its Affiliates in the Territory during the Term; (b) a breach of any of AffaMed’s representations, warranties, or obligations under this Agreement; or (c) the willful misconduct or grossly negligent acts by or on behalf of AffaMed or any of its Affiliates; excluding, in each case ((a), (b), and (c)), any damages or other amounts for which Licensor has an obligation to indemnify any AffaMed Indemnitee pursuant to Section 11.1 (Indemnification by Licensor).
11.3
Indemnification Procedures. The Party claiming indemnity under this Article 11 (Indemnification) (the “Indemnified Party”) will give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of the claim, suit, proceeding or cause of action for which indemnity is being sought (“Claim”). The Indemnifying Party’s obligation to defend, indemnify, and hold harmless pursuant to Section 11.1 (Indemnification by Licensor) or Section 11.2 (Indemnification by AffaMed), as applicable, will be reduced to the extent the Indemnified Party’s delay in providing notification pursuant to the previous sentence results in actual prejudice to the Indemnifying Party; provided, however, that the failure by an Indemnified Party to give such notice or otherwise meet its obligations under this Section 11.3 (Indemnification Procedures) will not relieve the Indemnifying Party of its indemnification obligation under this Agreement. At its option, the Indemnifying Party may assume the defense and have exclusive control, at its own expense, of any Claim for which indemnity is being sought by giving written notice to the Indemnified Party within [***] days after receipt of the notice of the Claim. The assumption of defense of the Claim will not be construed as an acknowledgment that the Indemnifying Party is liable to indemnify any Indemnified Party in respect of the Claim, nor will it constitute waiver by the Indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification. The Indemnified Party will provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, the Indemnifying Party will have the right to assume and conduct the defense of the Claim with counsel of its choice. The
37
Indemnifying Party will not settle any Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld. The Indemnified Party will not settle any such Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, then (a) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnified Party reserves any right it may have under this Article 11 (Indemnification) to obtain indemnification from the Indemnified Party.
11.4
Limitation of Liability. NEITHER PARTY WILL BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT, OR THE EXERCISE OF ITS RIGHTS OR THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, OR ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, OR ANY LOST PROFITS, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR DAMAGES THAT ARISE AS A RESULT OF (A) A PARTY’S FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT, OR (B) A BREACH OF SECTION 2.7 (RIGHT OF FIRST NEGOTIATION) OR Article 12 (CONFIDENTIALITY). NOTHING IN THIS SECTION 11.4 (LIMITATION OF LIABILITY) IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER THIS AGREEMENT.
11.5
Insurance. During the Term, each Party will obtain and maintain, at its individual sole expense, the following minimum required insurance, and each such insurance policy will name the other Party as an additional insured: comprehensive general liability insurance and clinical trials insurance. Any combination of Primary and Excess/Umbrella policies may be utilized to maintain the required limit structure. Each Party is required to obtain and maintain clinical trial insurance only for those trials they are sponsoring. Each Party will also maintain any mandatory insurance, including workers compensation coverage, in accordance with all applicable laws and regulations. Commercial insurance will be obtained from reputable and financially secure insurance carriers having a minimum A.M. Best rating (or equivalent) of A-. Each Party will ensure continuity of coverage for claims, which may be presented during the six year period following the expiration or termination of this Agreement. Each Party will furnish to the other Party, on request, certificates of insurance evidencing the minimum required insurance, including notice of cancellation to be provided in accordance with the terms of the insurance policies. Such insurance will not be construed to create a limit of the insured Party’s liability with respect to its indemnification obligations under this Article 11 (Indemnification).
Article 12
CONFIDENTIALITY
CONFIDENTIALITY
12.1
Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, during the Term and for [***] years thereafter, the Parties agree that the receiving Party will keep confidential and will not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement (a) the terms of this Agreement or (b) any information and materials furnished to it by or on behalf of the other Party or any of its Affiliates or generated pursuant to this Agreement (collectively, “Confidential Information”). Confidential Information of a Party or any of its Affiliates will include all information and materials disclosed by such Party or any of its Affiliates or their respective designees that (i) is marked as “Confidential,” “Proprietary” or with similar designation at the time of disclosure or (ii) by its nature can reasonably be expected to be considered Confidential Information by the recipient. The terms of this Agreement will be deemed to be the Confidential Information of both Parties. The receiving Party
38
will keep the Confidential Information of the Disclosing Party confidential using at least the same degree of care with which the receiving Party holds its own confidential information (but in no event less than a reasonable degree of care). For any Confidential Information that constitutes trade secrets of either Party, the foregoing non-disclosure obligations will continue for as long as such Confidential Information remains trade secrets. Neither Party may attempt to reverse engineer or perform reverse engineering on any trade secret or technology of the other Party licensed hereunder for any purpose other than to perform activities under this Agreement. Neither Party may remove any label setting forth that such information is Confidential Information or alter such label. Both Parties agree to mark all Licensed Products with the appropriate patent numbers to the extent the applicable Party does so for its other products on a country-by-country basis or as required by the Applicable Law of a country in which a Licensed Product is sold.
12.2
Exceptions. Information of a disclosing Party will not be Confidential Information of such disclosing Party to the extent that the receiving Party can demonstrate through competent evidence that such information: (A) was already known to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), at the time of disclosure, (B) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party, (C) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement, (D) was independently developed by the receiving Party as demonstrated by written documentation prepared contemporaneously with such independent development; or (E) was disclosed to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.
12.3
Authorized Disclosure.
(a)
Permitted Disclosure. Except as expressly provided otherwise in this Agreement, each Party may use and disclose Confidential Information of the other Party solely as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but of shorter duration, if customary): (A) in connection with the performance of its obligations or as reasonably necessary or useful in the exercise of its rights under this Agreement, including the right to grant licenses or sublicenses as permitted hereunder, (B) to the extent such disclosure is reasonably necessary or useful in conducting Clinical Trials under this Agreement; or (C) to actual or potential (sub)licensees, acquirers or assignees, collaborators, investment bankers, investors or lenders (including in connection with any royalty factoring transaction), or; (ii) to the extent such disclosure is to a governmental authority as reasonably necessary in filing or prosecuting Patent Right, copyright and trademark applications in accordance with this Agreement, prosecuting or defending litigation related to this Agreement, complying with applicable governmental regulations with respect to performance under this Agreement (including any disclosure to any securities exchange), obtaining Regulatory Approval or Marketing Approval or fulfilling post‑approval regulatory obligations for the Licensed Antibodies or Licensed Products, or otherwise required by applicable law; provided, however, that if a Party is required by applicable law or the rules of any securities exchange or automated quotation system to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, in each of the foregoing, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed and will
39
only disclose that Confidential Information that is required to be disclosed; (iii) to advisors (including lawyers and accountants) on a need to know basis, in each case under appropriate confidentiality provisions or professional standards of confidentiality substantially equivalent to those of this Agreement, or (iv) to the extent agreed to by the Parties.
(b)
Press Release. The Parties may agree to issue an initial press release promptly after the Effective Date, the content of which will be agreed by the Parties. Other than the announcement and disclosures required by applicable law, 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 that is not already in the public domain, must first be reviewed and approved by both Parties in writing (with such approval not to be unreasonably withheld or delayed). After a disclosure or other public announcement has been reviewed and approved by both Parties in writing under this Section 12.3 (Authorized Disclosure), either Party may make subsequent public disclosures reiterating the same information without having to obtain the other Party’s prior consent and approval, so long as the information in such disclosure or other public announcement remains true, correct, and the most current information with respect to the subject matters set forth therein.
12.4
Publications. During the Term, each Party may present, publish, or otherwise publicly disclose (including at symposiums and conferences, and in printed or online publications, posters, presentations, and abstracts) any Clinical Trial data, non-clinical or preclinical data, or any associated results or conclusions generated by or on behalf of either Party pursuant to this Agreement (each such proposed presentation or publication, a “Publication”) subject to the limitations set forth in this Section 12.4 (Publications) and Section 12.5 (Publication and Listing of Clinical Trials).
(a)
Both Parties acknowledge that it is their policy for the studies and results thereof to be registered and published in accordance with their internal guidelines.
(b)
A Party (“Publishing Party”) will provide the other Party with a copy of any proposed Publication at least [***] days prior to disclosure of such Publication so as to provide such other Party with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain such other Party’s Confidential Information in accordance with the requirements of this Agreement. The Publishing Party will remove from the proposed Publication any Confidential Information of such non-Publishing Party that is reasonably requested by such non-Publishing Party. If such other Party notifies the Publishing Party in writing (“Publishing Notice”), within [***] days after receipt of the copy of the proposed Publication, that such Publication in its reasonable judgment contains an invention, solely or jointly conceived or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent protection, then the Publishing Party will prevent or delay disclosure of such Publication for a period of [***] days or such other period of time as may be agreed by the Parties. If such other Party provides a Publishing Notice to the Publishing Party, within [***] days after receipt of the copy of the proposed Publication, that such Publication in its reasonable judgment could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, then the Publishing Party will prevent or delay disclosure of such Publication for a period of time agreed by the Parties.
(c)
Each Party will provide the other Party a copy of the Publication at the time of the submission or presentation thereof.
40
(d)
Each Party agrees to determine the authorship of all Publications in accordance with all applicable International Committee of Medical Journal Editors (ICMJE) guidelines, and, in addition, to acknowledge the contributions of the other Party and its employees, in each case, as scientifically appropriate.
12.5
Publication and Listing of Clinical Trials. With respect to the listing of Clinical Trials or the publication of Clinical Trial results for the Licensed Products and to the extent applicable to a Party’s activities conducted under this Agreement, each Party will comply with (a) the Pharmaceutical Research and Manufacturers of America (PhRMA) Guidelines on the listing of Clinical Trials and the Publication of Clinical Trial results, and (b) any applicable law or applicable court order, stipulations, consent agreements, and settlements entered into by such Party. The Parties agree that any such listings or publications made pursuant to this Section 12.5 (Publication and Listing of Clinical Trials) will be considered a Publication for purposes of this Agreement and will be subject to Section 12.4 (Publications).
12.6
Residual Knowledge. Notwithstanding any provision to the contrary set forth in this Agreement, Confidential Information will not include any knowledge, technique, experience, or Know-How that is retained in the unaided memory of any authorized representative of the receiving Party after having access to such Confidential Information (“Residual Knowledge”). Any use made by the receiving Party of any such Residual Knowledge is on an “as is, where is” basis, with all faults and all representations and warranties disclaimed and at its sole risk.
Article 13
TERM AND TERMINATION
TERM AND TERMINATION
13.1
Term. This Agreement will commence on the Effective Date and, unless earlier terminated pursuant to this Article 13 (Term and Termination), will expire on a Licensed Product-by-Licensed Product and country-by-country basis (in the Territory) at the end of the applicable Royalty Term (the “Term”). Following the end of the Term for the applicable Licensed Product and in such country by expiration (but not termination), the licenses granted to AffaMed under Section 2.1 (License to AffaMed) will survive termination and become perpetual, irrevocable, fully paid-up, and royalty-free.
13.2
Termination by AffaMed. AffaMed will have the right for any or no reason to terminate this Agreement in its entirety upon [***] days’ prior written notice to Licensor.
13.3
Termination for Breach or Insolvency.
(a)
Termination for Material Breach. Each Party (as applicable, the “Non-Breaching Party”) will have the right to terminate this Agreement with respect to those countries to which such breach relates upon written notice to the other Party (as applicable, the “Breaching Party”) if the Breaching Party materially breaches this Agreement, and, after receiving written notice from the Non-Breaching Party identifying such material breach by the Breaching Party in reasonable detail, fails to cure such material breach within [***] days from the date of such notice (or, if such breach cannot be cured within [***] days from the date of such notice despite the Breaching Party’s continued diligent efforts to cure in good faith, within an additional [***] days).
(b)
Insolvency. To the extent permitted by applicable law, either Party may terminate this Agreement in whole upon the filing or institution of bankruptcy, reorganization, liquidation, or receivership proceedings, upon the appointment of a receiver or trustee over all or substantially all property, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate will only become effective if
41
the other Party consents to the involuntary bankruptcy or such proceeding is not dismissed within [***] days after the filing thereof.
13.4
Termination for Patent Challenge. If AffaMed, its Affiliates, or their Sublicensees initiates or joins any challenge, whether in a court of law or in an administrative proceeding, to the validity or enforceability of any Licensor Patent Right, then Licensor may provide notice requesting AffaMed cease such patent challenge, and unless AffaMed or its Sublicensee (or the applicable Affiliate) causes such patent challenge to be withdrawn within [***] days of receiving such notice (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenges in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, such challenging party withdraws as a party from such patent challenge (if applicable) and ceases actively assisting any other party to such patent challenge within [***] days of receiving such notice), then Licensor may, in its sole discretion, terminate AffaMed’s license to the applicable Licensor Patent Rights by providing written notice thereof to AffaMed. The foregoing termination right will not apply with respect to (a) any claim of a Licensor Patent Right that Licensor first asserts against AffaMed, its Sublicensees or any of their Affiliates where the patent challenge is made in defense of such assertion, or (b) any patent challenge commenced by a Third Party that after the Effective Date acquires AffaMed, a Sublicensee, or one of their Affiliates or its or their business or assets, whether by stock purchase, merger, asset purchase, or otherwise, but only with respect to a patent challenge commenced prior to the execution of the purchase agreement or merger agreement for such acquisition, provided that said Third Party and AffaMed will establish a firewall so that Licensor’s Know-How is not accessible to such Third Party for use in invalidating Licensor Patent Rights. In the case wherein a Third Party commences a patent challenge after the Effective Date, and said Third Party is later acquired by AffaMed, Licensor will not terminate this Agreement or any license granted hereunder if AffaMed causes any patent challenge initiated by said Third Party to be withdrawn within such [***]-day notice period (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenge in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, AffaMed causes said Third Party to cease actively assisting any other party to such patent challenge within such [***]-day notice period). In addition, with respect to any patent challenge commenced by a Sublicensee (or an Affiliate of a Sublicensee), Licensor may not terminate the license granted to AffaMed under the applicable Licensor Patent Right(s) if AffaMed promptly terminates the sublicense granted to such Sublicensee upon the Sublicensee’s (or its Affiliate’s) failure to cause any patent challenge initiated by it to be withdrawn within such [***]-day notice period (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenge in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, upon the Sublicensee’s (or its Affiliate’s) failure to withdraw as a party from such patent challenge and cease actively assisting any other party to such patent challenge within such [***]-day notice period).
13.5
Effects of Termination.
(a)
Effects of Termination Generally. In the event that this Agreement is terminated for a Licensed Product in a country in the Territory, then such Licensed Product will become a “Terminated Product” and such country will be a “Terminated Country.” Upon the termination of this Agreement (in addition to any other rights and obligations under this Article 13 (Term and Termination)):
(i)
Licenses. As of the effective date of termination of this Agreement, all licenses and all other rights granted by Licensor to AffaMed under Section 2.1 (License to AffaMed) and granted by AffaMed to Licensor under Section 2.2 (License to Licensor) with respect to the Terminated Product(s) in the Terminated Countries will terminate. As of the effective date of termination of this Agreement, all sublicenses granted by AffaMed pursuant to Section 2.3 (AffaMed Sublicensing) with respect to the Terminated Product(s) will also terminate; provided, however, that at the request of any Sublicensee who is in compliance with and is not in breach of its applicable sublicense agreement, Licensor will enter into a
42
direct license agreement with such Sublicensee with respect to the Terminated Product(s) or Licensed Products, on the same terms as this Agreement, taking into account any difference in license scope, territory, and duration of sublicense grant (each, a “New License Agreement”). Under any such New License Agreement between Licensor and such former Sublicensee, such Sublicensee will be required to pay to Licensor the same amounts in consideration for such direct grant as Licensor would have otherwise received from AffaMed as described in this Agreement on account of such Sublicensee’s Exploitation of the relevant Licensed Products had this Agreement not been terminated. Under such New License Agreement, Licensor will not be bound by any grant of rights broader than, and will not be required to perform any obligation other than those rights and obligations contained in this Agreement and all applicable rights of Licensor set forth in this Agreement will be included in such New License Agreement. Each Sublicensee will be an intended Third Party beneficiary of this Section 13.5(a)(i) (Licenses) with the right to enforce the same against Licensor. At the request of AffaMed, Licensor will issue a comfort letter directly to any potential Sublicensee confirming the terms of this Section 13.5(a)(i) (Licenses).
(ii)
Return of Confidential Information. Upon the termination of this Agreement with respect to a Terminated Product in a Terminated Country, the receiving Party will return (or, as directed by the Disclosing Party, destroy) all Confidential Information of the Disclosing Party to the Disclosing Party related to such Terminated Product in such Terminated Country, as applicable, that is in the receiving Party’s possession or control (other than any Confidential Information required to continue to exercise a Party’s rights that survive termination of this Agreement), provided, however, copies may be retained and stored solely for the purpose of determining its obligations under this Agreement, subject to the non-disclosure and non-use obligation under Article 12 (Confidentiality) or as required by law. In addition, the receiving Party will not be required to return or destroy Confidential Information contained in any computer system back-up records made in the ordinary course of business; provided that such Confidential Information may not be accessed without the Disclosing Party’s prior written consent or as required by applicable law.
(b)
Effects of Certain Termination. In the event Licensor terminates under Section 13.3 (Termination for Breach or Insolvency) for AffaMed’s breach of a development diligence obligation under Section 4.1, AffaMed’s breach of a commercial diligence obligation under Section 7.1 (Commercialization Diligence Obligations), or if AffaMed terminates the Agreement under Section 13.2 (Termination by AffaMed), then:
(i)
AffaMed will transfer any relevant documents, data, and other Know-How included in the AffaMed Know-How (including all data and results and all supporting documentation, such as protocols, investigator’s brochures, case report forms, analysis plans) Controlled by AffaMed related to the Terminated Product in the Terminated Country that are generated by or on behalf of AffaMed or its Affiliates, Sublicensees, or subcontractors, if applicable, during the Term in the Development of such Terminated Product and that has not been previously transferred to Licensor or one of its Affiliates or designees; and
(ii)
Licensor will no longer be required to pay royalty set forth in Schedule 8.3(b)(i) and Schedule 8.3(b)(ii).
13.6
AffaMed’s Alternative Remedy in Lieu of Termination. Licensor stipulates and agrees that AffaMed’s decision to enter into this Agreement and invest in the Development of the Licensed Products is premised upon the assumption that Licensor will perform its obligations under this Agreement, and that a material breach of the Agreement by Licensor will undermine the economic fundamentals of the transaction for AffaMed, and that in such event AffaMed’s damages arising from Licensor’s breach would be of uncertain amount and difficult to prove. Accordingly, if during the Term, AffaMed has the right to terminate this Agreement as described in Section 13.3 (Termination for Breach or Insolvency), then as the sole monetary remedy available to AffaMed
43
(other than any equitable remedies), in lieu of terminating this Agreement AffaMed may, in its sole discretion, exercise an alternative remedy as follows, which Licensor stipulates and agrees would be a reasonable remedy in such circumstance and not a penalty:
(a)
AffaMed may retain all of its licenses and other rights granted under this Agreement, subject to all of its payment and other obligations, except that (i) the then-unearned milestone payments and the Net Sales Royalties payable thereafter under this Agreement will be reduced by [***] effective from and after the delivery of the applicable notice of breach, and (ii) AffaMed’s obligations under Section 4.1 (Development Diligence Obligations) and Section 7.1 (Commercialization Diligence Obligations) will terminate; and
(b)
any Confidential Information of AffaMed provided to Licensor as described in this Agreement will be promptly returned to AffaMed or destroyed, and AffaMed will be released from its ongoing disclosure and information exchange obligations with respect to Development and Commercialization activities following the date of such election.
For the avoidance of doubt, except as set forth in this Section 13.5(b)(ii) (Alternative Remedy in Lieu of Termination), if AffaMed exercises the alternative remedy set forth above in this Section 13.5(b)(ii) (Alternate Remedy in Lieu of Termination), then all rights and obligations of both Parties under this Agreement will continue unaffected, unless and until this Agreement is subsequently terminated by either Party as described in this Article 13 (Term and Termination). In addition, and notwithstanding anything to the contrary set forth in this Agreement, if Licensor disputes the allegation of a material breach and it is determined, as a result of the dispute resolution process set forth in Article 14 (Dispute Resolution), that AffaMed has the right to terminate this Agreement as described in Section 13.3(a) (Termination for Material Breach) based on the uncured material breach by Licensor or as described in Section 13.3(b) (Termination for Insolvency), then the adjustments of milestone payments and Net Sales Royalties contemplated by this Section 13.5(b)(ii) (Alternative Remedy in Lieu of Termination) will be deemed effective since the date of notice of the applicable material breach, and AffaMed will have the right to credit any overpayment that has been made during the dispute resolution process against future payments payable to Licensor.
13.7
Other Remedies. Termination or expiration of this Agreement for any reason will not release either Party from any liability or obligation that already has accrued prior to such expiration or termination, nor affect the survival of any provision hereof to the extent it is expressly stated to survive such termination. Termination or expiration of this Agreement for any reason will not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims, whether for damages or otherwise, that a Party may have hereunder or that may arise out of or in connection with such termination or expiration.
13.8
Survival. Termination or expiration of this Agreement will not affect rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination or expiration of this Agreement. Notwithstanding any provision to the contrary set forth in this Agreement, the following provisions will survive and apply after expiration or termination of this Agreement in its entirety: Article 1 (Definitions), Section 4.5 (Development Records), Section 8.3 (Royalties) (but only with respect to Net Sales made during the Term), Section 8.5 (Books and Records; Audit Rights) (but only with respect to payment obligations accruing during the Term and only for a period of three years after expiration or termination), Section 8.7 (Late Payments) (but only with respect to payment obligations accruing during the Term), Section 9.1 (Ownership), Section 10.4 (No Other Representations or Warranties), Article 11 (Indemnification), Article 12 (Confidentiality), Section 13.1 (Term), Section 13.5 (Effects of Termination), Section 13.7 (Other Remedies), this Section 13.8 (Survival), Article 14 (Dispute Resolution), and Article 15
44
(Miscellaneous). In addition, the other applicable provisions of Article 8 (Financials) will survive such expiration or termination of this Agreement in its entirety to the extent required to make final reimbursements, reconciliations or other payments incurred or accrued prior to the date of termination or expiration. For any surviving provisions requiring action or decision by the JSC or an Executive Officer, each Party will appoint representatives to act as its JSC members or Executive Officer, as applicable. All provisions not surviving in accordance with the foregoing will terminate upon expiration or termination of this Agreement and be of no further force and effect.
Article 14
DISPUTE RESOLUTION
DISPUTE RESOLUTION
14.1
Resolution by Executive Officers. In the event of any dispute between the Parties under this Agreement (other than the matters that are subject to resolution by the JSC under Article 3 (Governance)), the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves. If such dispute is not resolved on an informal basis within 15 Business Days, then either Party may refer the matter to the Executive Officers of the Parties for attempted resolution, whereupon the Executive Officers will confer and attempt in good faith to resolve such dispute by negotiation and consultation for a [***] day period following such referral.
14.2
Litigation. With the exception of (a) legal actions, proceedings, or claims described in Section 14.4 (Injunctive Relief) and (b) Section 14.3 (Patent Right and Trademark Disputes) below, any legal action or proceedings to resolve a dispute that was not resolved under Section 14.1 (Resolution by Executive Officers) will be brought exclusively in a federal court of competent jurisdiction located in New York, New York, and in no other jurisdiction. Each Party hereby irrevocably consents to personal jurisdiction and venue in, and irrevocably agrees to service of process issued or authorized by, any such court in any such action or proceeding. The Parties hereby irrevocably waive any objection that they may now have or hereafter have to the laying of venue in the federal courts of New York in any such action or proceeding, and hereby irrevocably waive and agree not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. The Parties hereby agree that any final judgment rendered by any such federal court of New York in any action or proceeding involving any Dispute, from which no appeal can be or is taken, may be enforced by the prevailing Party in any court of competent jurisdiction. THE PARTIES EXPRESSLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY.
14.3
Patent Right and Trademark Disputes. Notwithstanding any provision to the contrary set forth in this Agreement, any and all issues regarding the scope, construction, validity, and enforceability of any Patent Right or Trademark relating to a Licensed Product will be determined in a court or other tribunal, as the case may be, of competent jurisdiction under the applicable patent or trademark laws of the country in which such Patent Right or Trademark were granted or arose.
14.4
Injunctive Relief. Nothing in this Article 14 (Dispute Resolution) will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction, or other interim equitable relief, concerning a dispute either prior to or during any proceeding if necessary to protect the interests of such Party or to preserve the status quo pending the proceeding. Therefore, in addition to its rights and remedies otherwise available at law, including the recovery of damages for breach of this Agreement, upon an adequate showing of material breach, and without further proof of irreparable
45
harm other than this acknowledgement, such Non-Breaching Party will be entitled to seek (a) immediate equitable relief, specifically including both interim and permanent restraining orders and injunctions, and (b) such other and further equitable relief as the court may deem proper under the circumstances. For clarity, nothing in this Section 14.4 (Injunctive Relief) will otherwise limit a Breaching Party’s opportunity to cure a material breach as permitted in accordance with Section 13.3(a) (Termination of Agreement for Material Breach).
Article 15
MISCELLANEOUS
MISCELLANEOUS
15.1
Entire Agreement; Amendment. This Agreement, including the Exhibits hereto, set forth the complete, final, and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions, and understandings between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings between the Parties existing as of the Effective Date with respect to the subject matter hereof. In the event of any inconsistency between any plan hereunder and this Agreement, the terms of this Agreement will prevail. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change, or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.
15.2
Force Majeure. Neither Party will be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in achieving any objective, satisfying any condition, or performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from acts or events beyond the reasonable control of such Party, including acts of God, embargoes, war, acts of war (whether war be declared or not), terrorism, insurrections, riots, civil commotions, strikes, lockouts, or other labor disturbances (other than strikes, lockouts, or labor disturbances involving a Party’s own employees), government actions, fire, earthquakes, floods, epidemics, pandemics, the spread of infectious diseases, and quarantines (“Force Majeure”). The Parties agree the effects of the COVID-19 pandemic that is ongoing as of the Effective Date (including related government orders) may be invoked as a Force Majeure for the purposes of this Agreement even though the pandemic is ongoing and those effects may be reasonably foreseeable (but are not known for certain) as of the Effective Date. In addition, a Force Majeure may include reasonable measures affirmatively taken by a Party or its Affiliates to respond to any epidemic, pandemic, or spread of infectious disease (including the COVID-19 pandemic), such as requiring employees to stay home, closures of facilities, delays of Clinical Trials, or cessation of activities in response to an epidemic or other Force Majeure event. The affected Party will notify the other Party in writing of any Force Majeure circumstances that may affect its performance under this Agreement as soon as reasonably practical, will provide a good faith estimate of the period for which its failure or delay in performance under the Agreement is expected to continue based on currently available information, and will undertake reasonable efforts necessary to mitigate and overcome such Force Majeure circumstances and resume normal performance of its obligations hereunder as soon a reasonably practicable under the circumstances.
15.3
Notices. Any notice required or permitted to be given under this Agreement will be in writing, will specifically refer to this Agreement, and will be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 15.3 (Notices), and will be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by a reputable international expedited delivery service, or (b) five (5) Business Days after mailing, if mailed by first class certified or registered mail, postage prepaid, return receipt requested. This Section 15.3 (Notices) is not intended to govern the
46
day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.
If to Licensor:
|
Attention: Chief Executive Officer |
|
|
With a copy to (which will not constitute notice): |
Attention: [***]
|
|
|
|
|
|
|
If to AffaMed: |
AffaMed Therapeutics Limited |
|
|
|
Attention: [***]
|
With a copy to (which will not constitute notice): |
|
|
and |
|
Ropes & Gray 800 Boylston Street Boston MA 02199 Attention: [***] |
15.4
No Strict Construction; Headings. This Agreement has been prepared jointly and will not be strictly construed against either Party. Ambiguities, if any, in this Agreement will not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.
15.5
Rights in Bankruptcy.
(a)
All rights and licenses now or hereafter granted by Licensor to AffaMed under or pursuant to this Agreement, including, for the avoidance of doubt, the licenses granted to AffaMed pursuant to Section 2.1 (License to AffaMed), are, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined in the Bankruptcy Code. Upon the occurrence of any Insolvency Event with respect to Licensor, Licensor agrees that AffaMed, as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code. Without limiting the generality of the foregoing, Licensor and AffaMed intend and agree that any sale of
47
Licensor’s assets under Section 363 of the Bankruptcy Code will be subject to AffaMed’s rights under Section 365(n), that AffaMed cannot be compelled to accept a money satisfaction of its interests in the intellectual property licensed pursuant to this Agreement, and that any such sale therefore may not be made to a purchaser “free and clear” of AffaMed’s rights under this Agreement and Section 365(n) without the express, contemporaneous consent of AffaMed. Further, each Party agrees and acknowledges that all payments by AffaMed to Licensor hereunder, other than the Net Sales Royalties, do not constitute royalties within the meaning of Section 365(n) of the Bankruptcy Code or relate to licenses of intellectual property hereunder. Licensor will, during the Term of this Agreement, create and maintain current copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, to the extent feasible, of all such intellectual property. Licensor and AffaMed acknowledge and agree that “embodiments” of intellectual property within the meaning of Section 365(n) include laboratory notebooks, cell lines, product samples and inventory, research studies and data, and Regulatory Materials and other Regulatory Approvals. If (i) a case under the Bankruptcy Code is commenced by or against Licensor, (ii) this Agreement is rejected as provided in the Bankruptcy Code, and (iii) AffaMed elects to retain its rights hereunder as provided in Section 365(n) of the Bankruptcy Code, then Licensor (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) will:
(i)
provide to AffaMed all such intellectual property (including all embodiments thereof) held by Licensor and such successors and assigns, or otherwise available to them, immediately upon AffaMed’s written request. Whenever Licensor or any of its successors or assigns provides to AffaMed any of the intellectual property licensed hereunder (or any embodiment thereof) pursuant to this Section 15.5 (Rights in Bankruptcy), AffaMed will have the right to perform Licensor’s obligations hereunder with respect to such intellectual property, but neither such provision nor such performance by AffaMed will release Licensor from liability resulting from rejection of the license or the failure to perform such obligations; and
(ii)
not interfere with AffaMed’s rights under this Agreement, or any agreement supplemental hereto, to such intellectual property (including such embodiments), including any right to obtain such intellectual property (or such embodiments) from another entity, to the extent provided in Section 365(n) of the Bankruptcy Code.
(b)
All rights, powers and remedies of AffaMed provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Code) in the event of the commencement of a case under the Bankruptcy Code with respect to Licensor. The Parties agree that they intend the following rights to extend to the maximum extent permitted by law, and to be enforceable under Bankruptcy Code Section 365(n):
(i)
the right of access to any intellectual property (including all embodiments thereof) of Licensor, or any Third Party with whom Licensor contracts to perform an obligation of Licensor under this Agreement, and, in the case of the Third Party, which is necessary for the manufacture, use, sale, import or export of Licensed Products; and
(ii)
the right to contract directly with any Third Party to complete the contracted work.
48
15.6
Compliance with Applicable Law and Regulation. Each Party will, and will cause their Affiliates, licensees, Sublicensee, contractors, subcontractors, and consultants to comply with the applicable laws and regulations, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over the activities contemplated under this Agreement, in the course of performing its obligations or exercising its rights pursuant to this Agreement (including the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products). No Party will be required to take any action under this Agreement that would, on written advice of counsel, require such Party to violate such applicable law or regulation.
15.7
Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein will be deemed to encompass references to either or both genders, and the use of the singular will be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation,” (c) the word “will” will be construed to have the same meaning and effect as the word “shall,” (d) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person or entity will be construed to include the person’s or entity’s successors and assigns, (f) the words “herein,” “hereof,” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Schedules will be construed to refer to Sections or Schedules of this Agreement, and references to this Agreement include all Schedules hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and will include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree,” “consent,” or “approve” or the like will require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, (k) the term “or” will be interpreted in the inclusive sense commonly associated with the term “and/or,” (l) references to any Sections include Sections and subsections that are part of the related Section (e.g., a section numbered “Section 2.2” would be part of “Section 2”, and references to “Section 2.2” would also refer to material contained in the subsection described as “Section 2.2(a)”), and (m) unless otherwise set forth herein, 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.
15.8
Assignment. Neither Party may assign or transfer (whether by operation of applicable law or otherwise) this Agreement or any rights or obligations hereunder without the prior written consent of the other, except that a Party may make such an assignment without the other Party’s consent to (a) an Affiliate or (b) a successor to substantially all of such Party’s business to which this Agreement relates, whether in a merger, sale of stock, sale of assets, reorganization, or other transaction. Any permitted successor or assignee of rights or obligations hereunder will, in a writing to the other Party, expressly assume performance of such rights or obligations (and in any event, any Party assigning this Agreement to an Affiliate will remain bound by the terms and conditions hereof). Any permitted assignment will be binding on and inure to the benefit of the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 15.8 (Assignment) will be null, void and of no legal effect.
49
15.9
Performance by Affiliates. Each Party may perform any obligations and exercise any right hereunder through any of its Affiliates, provided that such Party will remain primarily responsible for the other Party hereunder. Each Party hereby guarantees the performance by any of its Affiliates of such Party’s obligations under this Agreement, and will cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement will be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.
15.10
Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
15.11
Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by an arbitrator or by any court of competent jurisdiction from which no appeal can be or is taken, then the provision will be considered severed from this Agreement and will not serve to invalidate any remaining provisions hereof. The Parties will make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering into this Agreement may be realized.
15.12
No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter will not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time.
15.13
Independent Contractors. Each Party will act solely as an independent contractor, and nothing in this Agreement will be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way. Nothing herein will be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.
15.14
Choice of Law. This Agreement will be governed by, and enforced and construed in accordance with, the laws of the State of New York, without regard to its conflicts of law provisions.
15.15
Counterparts. This Agreement may be executed in counterparts, all of which taken together will be regarded as one and the same instrument. Counterparts may be delivered via electronic mail, including Adobe™ Portable Document Format (PDF) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000, and any counterpart so delivered will be deemed to be original signatures, will be valid and binding upon the Parties, and, upon delivery, will constitute due execution of this Agreement.
[Signature Page Follows]
50
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the Effective Date.
AskGene Pharma, Inc. |
AffaMed Therapeutics (HK) Limited |
|
|
By: /s/ Lu Jeff_____________________ |
By: /s/ Dayao Zhao__________________ |
Name: Lu Jeff |
Name: Dayao Zhao |
Title: CEO |
Title: CEO |
|
|
[Signature Page to Exclusive License Agreement]
IF " DOCVARIABLE "SWDocIDLocation" " = "1" "" ""
SCHEDULE 1.11
BACKUP MOLECULES
SCHEDULE 1.59
LICENSED ANTIBODY
SCHEDULE 1.65
LICENSOR PATENT RIGHTS
SCHEDULE 6.1
CLINICAL MANUFACTURING AND SUPPLY AGREEMENT TERMS
1. Overview. The Clinical Manufacturing and Supply Agreement would provide for the Manufacture and supply of Licensed Antibodies and Licensed Products as Finished Drug Products (“CTM Product”) on commercially reasonable terms customary for supply of material to a collaboration partner for Phase I and Phase II Clinical Trials that are consistent with the principles set forth below. Subject to the foregoing, AskGene would Manufacture and supply, either itself or on a subcontracted basis through a CMO, and AffaMed would purchase from AskGene its requirements of clinical supply for Phase I and Phase II Clinical Trials of each CTM Product in accordance with the terms of the Clinical Manufacturing and Supply Agreement (which would be consistent with the principles set forth in this Schedule 6.1).
a. “Finished Drug Product” means the finished product formulation of a Licensed Product, filled into unit packages for final labeling and packaging, and as finally labeled and packaged in a form ready for administration by AffaMed in Phase I and Phase II Clinical Trials.
2. Supply of Product.
a. Supply Obligation. AskGene would use best efforts to supply AffaMed Finished Drug Product that would be Manufactured in accordance with cGMP and the Clinical Manufacturing and Supply Agreement will be negotiated by the Parties in accordance with Section 6.1 of the Agreement and consistent with the principles set forth in this Schedule 6.1. AffaMed would purchase such CTM Product (in the product volume elected by AffaMed) exclusively from AskGene or AskGene’s subcontracted CMO (and would not obtain or otherwise purchase from any others) except as set forth in the Clinical Manufacturing and Supply Agreement.
b. Supply Price. AffaMed would pay to AskGene a transfer price with respect to supply of CTM Product that is [***].
c. Specifications. The Clinical Manufacturing and Supply Agreement would contain written specifications for the Finished Drug Product agreed in writing by the Parties.
d. Forecasts. The Clinical Manufacturing and Supply Agreement would provide a rolling forecast of AffaMed’s requirements for supply of CTM Product with at least [***] prior to the expected delivery date to ensure that AskGene can secure an adequate number of manufacturing slots, provided that the Parties would negotiate an initial supply of CTM Product to be supplied as soon as reasonably practicable after execution of the Clinical Manufacturing and Supply Agreement that is sufficient for AffaMed to begin performing its obligations under this Agreement.
3. Additional Formulation and Process Development. The Clinical Manufacturing and Supply Agreement would include a mechanism through which AskGene and AffaMed would share responsibilities for the costs and expenses incurred in furtherance of Development of a high concentration formulation for the Licensed Product. The Clinical Manufacturing and Supply Agreement would also include a mechanism through which AskGene and AffaMed would share responsibilities for the costs and expenses incurred related to commercial formulation development (including high concentration formulations), commercial method development/optimization,
commercial process development/optimization, and/or process characterization, if the Parties, in each of their own sole discretion, choose to work together in one or more of those activities.
4. Term and Termination. The term and termination provisions of the Clinical Manufacturing and Supply Agreement would give due consideration to the term and termination provisions of AskGene’s agreements with its applicable CMOs.
5. Compliance, Warranties, Acceptance, Recalls, Indemnification and Limitations of Liability. The Clinical Manufacturing and Supply Agreement would contain terms and conditions regarding compliance with Laws (including cGMPs and the Regulatory Approvals for cGMP facilities and labs and the applicable for CTM Product) and specifications for the applicable CTM Product, delivery, acceptance and recalls of CTM Product, indemnification and limitations of liability that are customary in Third Party contract manufacturing agreements (taking into account any upstream obligations appurtenant to supply of any CTM Product under the Clinical Manufacturing and Supply Agreement).
6. Miscellaneous. The Clinical Manufacturing and Supply Agreement would contain other customary terms and provisions for agreements of their type as agreed by the Parties.
Exhibit 1.4
Execution
Confidential
CERTAIN INFORMATION (INDICATED BY “[***]”) HAS BEEN EXCLUDED FROM THIS AGREEMENT BECAUSE (I) SUCH INFORMATION IS NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.
EXCLUSIVE LICENSE AGREEMENT
by and between
AskGene Pharma, Inc.
and
Visara, Inc.
Dated as of October 15, 2025
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS 1
Article 2 LICENSES AND EXCLUSIVITY 13
Article 3 GOVERNANCE 15
Article 4 DEVELOPMENT 17
Article 5 REGULATORY 18
Article 6 MANUFACTURING AND SUPPLY 19
Article 7 COMMERCIALIZATION 19
Article 8 FINANCIALS 20
Article 9 INTELLECTUAL PROPERTY 27
Article 10 REPRESENTATIONS, WARRANTIES AND COVENANTS 31
Article 11 INDEMNIFICATION 35
Article 12 CONFIDENTIALITY 37
Article 13 TERM AND TERMINATION 40
Article 14 DISPUTE RESOLUTION 45
Article 15 MISCELLANEOUS 46
i
EXCLUSIVE LICENSE AGREEMENT
THIS EXCLUSIVE LICENSE AGREEMENT (this “Agreement”) is entered into as of October 15, 2025 (the “cuExecution Date”) by and among AskGene Pharma, Inc. a corporation organized and existing under the laws of Delaware USA, with a registered address at 5217 Verdugo Way, Suite A, Camarillo, CA 93012 (“Licensor”), and Visara, Inc., a Delaware corporation with a registered office at 1209 Orange Street, in the city of Wilmington, County of New Castle, Delaware 19801 (“Visara”). Licensor and Visara are referred to herein individually as a “Party” and collectively as the “Parties.”
BACKGROUND
Licensor and its Affiliates Control certain Patent Rights and Know-How relating to the Licensed Antibodies and Licensed Products.
Licensor desires to grant, and Visara desires to receive, a license under such Patent Rights and Know-How to permit Visara to Develop, Manufacture, and Commercialize the Licensed Antibodies and Licensed Products in the Territory (all as defined below), in accordance with the terms and conditions set forth herein.
Visara is a wholly owned subsidiary of I-MAB, a Cayman Islands company having its principal executive offices at 2440 Research Boulevard, Suite 400, Rockville, MD 20850 (“I-MAB”) and is scheduled to receive capital injection by I-MAB as part of Visara’s series A financing, the proceeds of which shall be used by Visara to obtain this license under this Agreement and fund the global development of the Licensed Antibodies and Licensed Products. The Parties acknowledge and agree that Visara’s series A funding is a condition precedent of Licensor’s obligations under this Agreement.
NOW THEREFORE, the Parties agree as follows:
Article 1
DEFINITIONS
DEFINITIONS
1.1
“Accounting Standard” means International Financial Reporting Standards (IFRS) or Generally Acceptable Accounting Principles (GAAP), consistently applied per the practice of each Party as of the Effective Date.
1.2
“Acquisition Deal” has the meaning set forth in Section 8.2(b).
1.3
“Appraised Value” has the meaning set forth in Section 8.2(b).
1.4
“Visara” has the meaning set forth in the Preamble.
1.5
“Visara Indemnitees” has the meaning set forth in Section 11.1 (Indemnification by Licensor).
1.6
“Licensor Phase I and II Data” has the meaning set forth in Section 4.2 (Date Transfer. Phase I and II Data in the Territory).
1.7
“Affiliate” means, with respect to a Party, a Person, corporation, partnership, or other entity that controls, is controlled by, controlling or is under common control with such Party, but only for so long as such control will continue. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by”, “controlling” or “under the common control with”) 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 entity, whether by the ownership of more than 50% of the voting stock of such entity, or by contract or otherwise. Notwithstanding the foregoing or any provision to the contrary in this Agreement, for the purpose of this Agreement, Affiliates of Visara only include any entity that 1) controls Visara, 2) is controlled by Visara, 3) is I-MAB or its controlled subsidiary, 4) is Everest Medicines Limited, a Cayman Islands company with its registered office at PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands or its controlled subsidiary. Any other entity that under common control with Visara, for example, CBC Group portfolio companies, shall not be deemed as “Affiliates” of Visara but as the Third Parties for the purpose of this Agreement.
1.8
“Agreement” has the meaning set forth in the Preamble.
1.9
“ANG-2” means [***].
1.10
“Antibody” means an antibody, or a fragment thereof or derived therefrom, alone or in combination with any Other Component (including another antibody or antibody fragment). For clarity, a fragment may be synthetic, enzymatically obtainable or genetically engineered polypeptides and include portions of an immunoglobulin that bind an antigen, such as [***].
1.11
“Backup Molecules” means any and all Antibodies that are the subject of any research and development for ophthalmology by Licensor or its Affiliates and that are capable of inhibiting [***]. The Backup Molecules existing as of the Effective Date are set forth on Schedule 1.11 (Backup Molecules), and additional Backup Molecules may be added to the schedule by the Parties through mutual agreement from time to time.
1.12
“Bankruptcy Code” means Section 365(n) of title 11 of the United States Code (as amended or any replacement thereof).
1.13
“Biosimilar Product” means, with respect to a Licensed Product that has received Regulatory Approval in a country or region in the Territory (as applicable), a biologic therapeutic sold in the Territory not authorized by or on behalf of Visara (with respect to the Territory), (a) that has been licensed as a biosimilar or interchangeable product by FDA pursuant to Section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) or considered by the applicable Regulatory Authority as a “similar biological medicinal product” pursuant to EU Directive 2001/83/EC, in each case, as may be amended, or any subsequent or superseding law, statute or regulation, (b) that has otherwise received Regulatory Approval as a generic, biosimilar, bioequivalent, or interchangeable product from another applicable Regulatory Authority in such country, or, in each case, (a) or (b), an analogous law, statute, or regulation, or (c) that has achieved analogous regulatory Marketing Approval from a Regulatory Authority in another jurisdiction in reliance on the fact of, or the data supporting, the prior approval of such Licensed Product by such Regulatory Authority.
1.14
“BLA” means a Biologics License Application submitted to the FDA pursuant to 21 U.S.C. §601.2, for purposes of obtaining Regulatory Approval for a new biologic in the United States, or any equivalent filing in a country or regulatory jurisdiction other than the United States.
1.15
“Blocking IP” has the meaning set forth in Section 2.5 (Third Party In-Licenses).
1.16
“Breaching Party” has the meaning set forth in Section 13.3(a) (Termination for Material Breach).
1.17
“Business Day” means a day other than a Saturday, Sunday, or a day on which banking institutions in the State of California or Shanghai, China are required by applicable law to remain closed.
2
1.18
“Calendar Quarter” means a period of three consecutive months ending on the last day of March, June, September, or December, respectively.
1.19
“Calendar Year” means a period of 12 consecutive months beginning on January 1 and ending on December 31.
1.20
“cGMP” means applicable current Good Manufacturing Practices, including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the International Conference on Harmonization’s Q7 guidelines, and (d) the applicable laws the Territory corresponding to (a) through (c) above, each as may be amended and applicable from time to time.
1.21
“Claim” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.22
“Clinical Trial” means a study in humans to obtain information regarding a product, including information relating to the safety, tolerability, pharmacological activity, pharmacokinetics, dose ranging, or efficacy of such product, including a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, Phase IV Clinical Trial, and a Global Clinical Trial.
1.23
“CMO” means a contract manufacturing organization.
1.24
“Combination Product” means a Licensed Product (a) in which a Licensed Antibody is sold in combination with any Other Component, or (b) that is defined as a “combination product” by the FDA pursuant to 21 C.F.R. §3.2(e) or its foreign equivalent, in each case (a) or (b), whether combined in a single formulation or package, as applicable, or formulated or packaged separately but sold together for a single price.
1.25
“Commercialization” means, with respect to a pharmaceutical or biologic product (whether in monotherapy or as part of a Combination Product), any and all activities directed to the marketing, promotion, importation, distribution, pricing, Pricing and Reimbursement Approval, offering for sale, or sale of such pharmaceutical or biologic product, and interacting with Regulatory Authorities regarding the foregoing. “Commercialize” and “Commercial” will be construed accordingly.
1.26
“Commercially Reasonable Efforts” means, with respect to the efforts to be expended by Visara or its Affiliate with respect to any objective, activity, or goal related to a Licensed Product under this Agreement, those efforts that a biotechnology company of similar size and scope as Visara developing products similar to Visara would normally use to accomplish such objective, activity, or decision, and specifically means the carrying out of activities using efforts that such biotechnology company developing products similar to Visara would normally devote to a product at a similar stage in its development or product life and of similar market potential, strategic importance, and profit potential (taking into account payments under this Agreement), based on conditions then prevailing and taking into account efficacy, safety, approved labeling, profitability, the competitiveness of alternative products sold by Third Parties in the marketplace, the patent and other proprietary position of the product, the likelihood of Regulatory Approval given the regulatory structure involved, and all other relevant factors. Commercially Reasonable Efforts will be determined on a country-by-country and indication-by-indication basis for the applicable Licensed Product, and it is anticipated that the level of effort will change over time, reflecting changes in the status of such Licensed Product and the market or country involved. Licensor expressly understands and accepts that the use of Commercially Reasonable Efforts may result in Visara ceasing the Development or Commercialization of a Licensed Product (in whole or in part), and that once Development for a Licensed Product has ceased in compliance with this Agreement,
3
Commercially Reasonable Efforts does not require the continued re-evaluation of whether Development or Commercialization, as applicable, must be re-initiated for such Licensed Product.
1.27
“Confidential Information” has the meaning set forth in Section 12.1 (Confidentiality; Exceptions).
1.28
“Control” or “Controlled” means (a) the possession by a Party (whether by ownership, license, or otherwise other than pursuant to this Agreement) of, (i) with respect to any tangible Know-How, the legal authority or right to physical possession of such tangible Know-How, with the right to provide such tangible Know-How to the other Party on the terms set forth herein, or (ii) with respect to Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights, the legal authority or right to grant a license, sublicense, access, or right to use (as applicable) to the other Party under such Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights on the terms set forth herein, in each case ((i) and (ii)), (A) without breaching or otherwise violating the terms of any arrangement or agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such access, right to use, licenses, or sublicense and (B) with respect to any Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights in-licensed by Visara pursuant to Section 2.5 (Third Party In-Licenses), Visara will only be deemed to Control such rights if Licensor agrees to assume all financial and other obligations under any arrangement or agreement with the applicable Third Party that are applicable to Licensor’s exercise of the relevant Patent Right, Marketing Approvals, Regulatory Materials, intangible Know-How, or other intellectual property rights in the Territory; and (b) with respect to any product, the possession by a Party of the ability (whether by sole or joint ownership, license or otherwise, other than pursuant to this Agreement) to grant a license or sublicense of Patent Rights that claim such product or proprietary Know-How that is used in connection with the Exploitation of such product.
1.29
“CPA Firm” has the meaning set forth in Section 8.6(a) (Books and Records; Audit Rights).
1.30
“Development” means, with respect to any product, any and all development or regulatory activities that relate to obtaining, maintaining or expanding Regulatory Approval of such product, including any and all activities related to the research, profiling, characterization, pre‑clinical development, or nonclinical studies of such product, clinical drug development activities conducted before or after obtaining Regulatory Approval for such product that are reasonably related to or leading to the development, preparation, or submission of data and information to a Regulatory Authority for the purpose of obtaining, supporting, expanding or maintaining Regulatory Approval of such product, together with all activities related to pharmacokinetic profiling, design and conduct of Clinical Trials (including Phase IV Clinical Trials and Clinical Trials pertaining to additional presentations for a product, and statistical analysis and report writing) of such product, pharmacovigilance activities, adverse event reporting, and regulatory affairs, statistical analysis, report writing and the creation and submission of regulatory submissions related to the foregoing (including the services of outside advisors and consultants in connection therewith); but excluding, in each case, any activities directed to Commercialization or Manufacturing. “Developing” and “Developed” will be construed accordingly.
1.31
“Development Milestone Event” has the meaning set forth in Section 8.3(a) (Development Milestones).
1.32
“Development Milestone Payment” has the meaning set forth in Section 8.3(a) (Development Milestones).
4
1.33
“Effective Date” has the meaning set forth in Section 8.1 (Upfront Payment).
1.34
“Executive Officer” means (a) in the case of Visara, the chief executive officer or executive chairman of Visara, and (b) in the case of Licensor, the chief executive officer of Licensor.
1.35
“Exploit” and “Exploitation” have the meaning set forth in Section 2.1 (License to Visara).
1.36
“FDA” means the U.S. Food and Drug Administration or any successor agency thereto.
1.37
“Field” means any and all uses.
1.38
“First Commercial Sale” means, with respect to a Licensed Product in a country or region in the Territory, the first sale to a Third Party of such Licensed Product in such country or region after Regulatory Approval and Pricing and Reimbursement Approval (where Pricing and Reimbursement Approval is applicable for the Commercialization of any Licensed Product in such country or region) have been obtained. First Commercial Sale excludes transfers of Licensed Product to Third Parties as bona fide samples, as donations, for the performance of Clinical Trials, or for similar purposes in accordance with applicable law pertaining to any expanded access program, any compassionate sales or use program (including named patient program or single patient program), or any indigent program.
1.39
“Force Majeure” has the meaning set forth in Section 15.2 (Force Majeure).
1.40
“Fully Burdened Manufacturing Costs” means, with respect to any Licensed Antibody or Licensed Product, supplied by or on behalf of the applicable Party to the other Party or its Affiliates hereunder:
if and to the extent such Licensed Antibody or Licensed Product is Manufactured by a CMO, the actual invoiced costs from the CMO that are solely and specifically related to the Manufacture of any Licensed Antibody or Licensed Product for the other Party, including any incremental handling and administrative cost incurred by the applicable Party; or
if and to the extent such Licensed Antibody or Licensed Product is Manufactured (including performance of any of the following Manufacturing activities for the benefit of, or in conjunction with, the activities of any CMO that is Manufacturing such Licensed Antibody or Licensed Product or component thereof) by a Party or its Affiliate, the actual, fully burdened costs that are directly attributable to such Manufacturing, including the actual costs of materials (including materials supplied to a CMO engaged by such Party to Manufacture the applicable product or component thereof), direct labor, ordinary course quality assurance costs, stability testing cost, characterization testing, quality control, costs of engineering runs, release testing of drug substance and drug product, equipment maintenance costs, and other costs variable with production, scale-up expenses, customs and duty and charges levied by governmental authorities, all costs of packaging, the cost of freight into or between Manufacturing sites, which will be calculated in accordance with the applicable Accounting Standards. Notwithstanding the foregoing, Fully Burdened Manufacturing Cost will be computed on a theoretical full-capacity basis, and no overhead, equipment, or facilities costs will be included for unutilized, vacant, or dormant facilities or equipment (and Manufacturing overhead costs related to an underutilized facility or underutilized equipment will be allocated proportionately over the entire Manufacturing production (based on a theoretical full-capacity production schedule) of the facility and applicable equipment, whether or not the entire Manufacturing facility is being utilized).
5
1.41
“GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) (the “ICH Guidelines”) and any other guidelines for good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (d) the equivalent applicable laws in the region in the Territory, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.
1.42
“Global Clinical Trial” means a Clinical Trial of a Licensed Product in the Field that includes sufficient clinical sites or study subjects to achieve Regulatory Approval for the indication associated with such Clinical Trial in at least one country or jurisdiction within the Territory and at least one country or jurisdiction within the Territory.
1.43
“GLP” means all applicable Good Laboratory Practice standards, including, as set forth in the then-current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration, as defined in 21 C.F.R. Part 58, and the equivalent applicable laws in the Territory, each as may be amended and applicable from time to time.
1.44
“IND” means (a) an Investigational New Drug Application as defined in the United States Federal Food, Drug and Cosmetic Act, as amended (the “FD&C Act”) and applicable regulations promulgated thereunder by the FDA, or (b) the equivalent application to the equivalent Regulatory Authority in any other regulatory jurisdiction, the filing of which is necessary to initiate or conduct clinical testing of a pharmaceutical or biologic product in humans in such jurisdiction.
1.45
“Indemnified Party” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.46
“Indemnifying Party” has the meaning set forth in Section 11.3 (Indemnification Procedures).
1.47
“Initial Technology Transfer” has the meaning set forth in Section 2.6(a) (Initial Technology Transfer).
1.48
“Initiation” means, with respect to a given Clinical Trial, the administration of the first dose of Licensed Product to the first patient in such Clinical Trial.
1.49
“Insolvency Event” means circumstances under which a Party (a) has a receiver or similar officer appointed over all or substantially all of such Party’s assets, (b) the institution of any bankruptcy, receivership, insolvency, reorganization, or other similar proceedings by or against the other Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, (c) makes an assignment for the benefit of its creditors (other than relating to a solvent restructuring), or (d) any corporate action taken by the board of directors of such Party in furtherance of any of the foregoing actions.
1.50
“Know-How” means any data, results, and information of any type whatsoever, in any tangible or intangible form, including trade secrets, practices, techniques, methods, processes, inventions, discoveries, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports,
6
clinical and non-clinical study reports, clinical and non-clinical data, regulatory filings and regulatory submission documents and summaries, technology, test data including pharmacological, biological, chemical, biochemical, toxicological, and clinical test data, analytical and quality control data, stability data, studies and procedures and any other know-how, and any physical embodiments of any of the foregoing.
1.51
“Licensed Antibody” means (a) the Antibody known as ASKG712 and all derivatives thereof, and (b) all Backup Molecules. The amino acid and nucleotide sequences of ASKG712 are set forth as Schedule 1.51 (Licensed Antibody).
1.52
“Licensed Product” means any product that includes a Licensed Antibody in any and all (current and future) forms, formulations, dosages and delivery modes, and any improvements to any of the foregoing.
1.53
“Licensor” has the meaning set forth in the Preamble.
1.54
“Licensor Indemnitees” has the meaning set forth in Section 11.2 (Indemnification by Visara).
1.55
“Licensor Know-How” means any Know-How Controlled by Licensor or any of its Affiliates as of the Effective Date, that is necessary or reasonably useful to Exploit any Licensed Antibody or Licensed Product.
1.56
“Licensor Manufacturing Technology” has the meaning set forth in Section 2.6(b) (Manufacturing Technology Transfer).
1.57
“Licensor Phase I and II Data” has the meaning set forth in Section 4.2 (Data Transfer. Phase I and II Data in the Territory).
1.58
“Licensor Patent Rights” means any Patent Rights Controlled by Licensor or any of its Affiliates as of the Effective Date that (a) cover any Licensor Know-How or (b) are otherwise necessary or reasonably useful to Exploit any Licensed Antibody or Licensed Product. All Licensor Patent Rights existing as of the Effective Date are listed on Schedule 1.58 (Licensor Patent Rights).
1.59
“Licensor Technology” means any and all Licensor Patent Rights and Licensor Know-How.
1.60
“Licensed Territory” means, collectively, Singapore, Thailand, Malaysia, Indonesia, Vietnam, the People’s Republic of China, Taiwan, Macau, Hong Kong, Korea, and India.
1.61
“Manufacture” or “Manufacturing” means, as applicable, all activities associated with the production, manufacture, process of formulating, processing, filling, finishing, packaging, labeling, shipping, importing or storage of pharmaceutical compounds or materials, including process development, process validation, stability testing, manufacturing scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterization, quality assurance and quality control development, testing and release.
1.62
“Manufacturing Technology Transfer” has the meaning set forth in Section 2.6(b) (Manufacturing Technology Transfer).
1.63
“Marketing Approval” means, with respect to a country or region, any and all approvals (including Regulatory Approval), licenses, registrations, or authorizations of any governmental authority that are required in order to Commercialize a pharmaceutical or biologic product in such
7
country or region, including any Pricing and Reimbursement Approval where applicable for the Commercialization of any product in such country or region.
1.64
“Net Sales” means, with respect to a Licensed Product, the aggregate gross sales of such Licensed Product sold by a Party or any of its Affiliates or (Sub)licensees (each, a “Selling Party”) to a Third Party (including distributors, resellers, wholesalers, hospitals, and end users) (each, a “Buying Party”) in the Territory, less the following deductions, in each case, to the extent actually allowed and taken by any such Buying Party and not otherwise recovered by or reimbursed to the applicable Selling Party, all determined in accordance with the applicable Accounting Standard of the applicable Selling Party:
(a) reasonable and customary discounts, including trade, quantity or cash discounts and rebates, and patient discount programs;
(b) rebates, reimbursements, fees, clawbacks, discounts, allowances, chargebacks, and retroactive price reductions, including those granted to wholesalers, buying groups, retailers, managed health care organizations, governmental agencies, reimbursers, and trade customers;
(c) any amount paid or credited by reasons of defects, rejections, recalls, outdating or returns, such as unrecoverable damaged goods or rejections and including Licensed Product returned in connection with recalls or withdrawals;
(d) transportation, freight, postage charges and other charges, such as insurance, relating thereto, in each case paid or incurred by Selling Party and any other governmental charges or taxes imposed with respect to the sale, transportation, delivery, use, exportation, or importation of such Licensed Product;
(e) taxes, duties, tariffs, excises or other governmental charges or levies charged or imposed with respect to the import, export, production, sale, transportation, delivery or use of goods (other than income taxes);
(f) amounts written off by reason of uncollectible debt if and when actually written off or allowed in accordance with the Selling Party’s accounting policies, as consistently applied; provided that such amounts will be added back to Net Sales if and when collected; and
(g) other specifically identifiable amounts that have been credited against or deduct from gross sales of such Licensed Product and to the extent such amounts are customary deductions permitted under the applicable Accounting Standard from net sales calculations for reasons substantially equivalent to those listed above.
Such amounts shall be determined from the books and records of Selling Party, maintained in accordance with generally accepted accounting principles (in accordance with GAAP or IFRS, as applicable) as consistently applied across its pharmaceutical products generally.
Net Sales on Licensed Product provided as part of a non-cash exchange or other than through an arms-length transaction shall mean the average amount invoiced in arms-length sales of the same or equivalent Licensed Products during the applicable royalty reporting period in the same country, and if no such sales have occurred, shall be the fair market value of the transferred Licensed Product(s). Net Sales will be calculated only once for the first bona fide arm’s length sale of the Licensed Product to a Third Party that is not a Selling Party.
Net Sales excludes transfers of Licensed Product to Third Parties as bona fide samples, as donations, for the performance of Clinical Trials, or for similar purposes in accordance
8
with applicable law pertaining to any expanded access program, any compassionate sales or use program (including named patient program or single patient program), or any indigent program.
In the case of any Combination Product sold in a given country and reporting period, Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product in such country will be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B), where A is the invoice price of the Licensed Product if sold separately in the same indication in such country, and B is the total invoice price of the Other Components in the Combination Product, if sold separately in the same indication in such country.
If, on a country-by-country basis in a particular reporting period, the Licensed Product is sold separately in the same indication in a country, but the Other Components in the Combination Product are not sold separately in the same indication in such country, then Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product for such country will be calculated by multiplying actual Net Sales of the Combination Product by the fraction A/C, where A is the invoice price of the Licensed Product if sold separately in the same indication in such country, and C is the invoice price of the Combination Product in such country.
If, on a country-by-country basis in a particular reporting period, the Licensed Product in the Combination Product is not sold separately in the same indication in such country, but the Other Components included in the Combination Product are sold separately in the same indication in such country, then Net Sales for the purpose of determining royalties and Sales Milestone Events of the Combination Product for such country will be calculated by multiplying actual Net Sales of the Combination Product by the fraction C-B/C, where B is the invoice price of the Other Components included in such Combination Product if sold separately in the same indication in such country, and C is the invoice price of the Combination Product in such country.
If neither the Licensed Product nor the Other Components are sold separately in the same indication in a given country during a particular reporting period, then Net Sales will be calculated based on Visara’s good faith estimate of the fair market value of the Licensed Product and each of the Other Components included in such Combination Product when sold in such indication in such country.
1.65
“Net Sales Royalty” has the meaning set forth in Section 8.4(a) (Royalties).
1.66
“Net Sales Statement” has the meaning set forth in Section 8.4(b) (Reports; Payment).
1.67
“Visara Development Plan” has the meaning set forth in Section 4.1 (Development Diligence Obligations).
1.68
“Non-Breaching Party” has the meaning set forth in Section 13.3(a) (Terminatio for Material Breach).
1.69
“Other Component” means any (a) therapeutically active ingredient that is not a Licensed Antibody (including any product of Visara), (b) delivery device or component therefor, (c) companion diagnostic, or (d) other product, process, or service that is sold with a Licensed Antibody for a fixed price.
9
1.70
“Party” and “Parties” have the meaning set forth in the Preamble.
1.71
“Patent Right” means (a) any national, regional or international patent or patent application, including any provisional patent application, (b) any patent application filed either from such a patent, patent application or provisional application or from an application claiming priority from any of these, including any divisional, continuation, continuation-in-part, provisional, converted provisional, and continued prosecution application, (c) any patent that has issued or in the future issues from any of the foregoing patent applications ((a) and (b)), including any utility model, petty patent, design patent and certificate of invention, (d) any extension or restoration by existing or future extension or restoration mechanisms, including any revalidation, reissue, re-examination and extension (including any supplementary protection certificate and the like) of any of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any such foregoing patent application or patent.
1.72
“Person” means any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, Regulatory Authority, or any other entity not specifically listed in this definition.
1.73
“Pharmacovigilance Agreement” has the meaning set forth in Section 5.2 (Adverse Event Reporting).
1.74
“Phase II Clinical Trial” means a human clinical trial of a product, the principal purpose of which is a determination of safety and efficacy in the target patient population, as described in 21 C.F.R. 312.21(b) (as amended or any replacement thereof), or a similar clinical trial prescribed by the Regulatory Authority in a country other than the United States. For the purpose of this Agreement, Phase II Clinical Trial refers to a Phase IIb clinical trial as described in the Visara Development Plan.
1.75
“Phase III Clinical Trial” means a human clinical trial of a product, the design of which is acknowledged by the FDA to be sufficient for such clinical trial to satisfy the requirements of 21 C.F.R. 312.21(c) (as amended or any replacement thereof), or a similar human clinical trial prescribed by the Regulatory Authority in a country other than the United States, the design of which is acknowledged by such Regulatory Authority to be sufficient for such clinical trial to satisfy the requirements of a pivotal efficacy and safety clinical trial.
1.76
“Phase IV Clinical Trial” means a human clinical trial of a compound or product for an indication that is (a) commenced after receipt of the initial Regulatory Approval for such indication in the country for which such trial is being conducted and that is conducted within the parameters of the Regulatory Approval for the compound or product for such indication (and which may include investigator sponsored clinical trials) in such country, including a clinical trial conducted due to the request or requirement of a Regulatory Authority in such country or as a condition of a previously granted Regulatory Approval in such country.
1.77
“Pricing and Reimbursement Approval” means the later of (a) the approval, agreement, determination, or governmental decision establishing a price for a pharmaceutical or biologic product that can be legally charged to consumers, if applicable in a given jurisdiction or country for the Commercialization of such pharmaceutical or biologic product in such jurisdiction or country; and (b) the approval, agreement, determination, or governmental decision establishing the level of reimbursement for a pharmaceutical or biologic product that will be reimbursed by governmental authorities, if either applicable in a given jurisdiction or country for the Commercialization of such pharmaceutical or biologic product in such jurisdiction or country.
10
1.78
“Publication” has the meaning set forth in Section 12.4 (Publications).
1.79
“Publishing Notice” has the meaning set forth in Section 12.4(b) (Publications).
1.80
“Publishing Party” has the meaning set forth in Section 12.4(b) (Publications).
1.81
“Regulatory Approval” means all approvals necessary for the Manufacture, marketing, importation, and sale of a product for one or more indications in a country or regulatory jurisdiction, which may include satisfaction of all applicable regulatory and notification requirements. Regulatory Approvals include approvals by Regulatory Authorities of INDs and BLAs. “Regulatory Approval” excludes Pricing and Reimbursement Approval.
1.82
“Regulatory Authority” means, in a particular country or regulatory jurisdiction, any applicable governmental authority involved in granting Regulatory Approval or, to the extent required in such country or regulatory jurisdiction, Pricing and Reimbursement Approval of a product in such country or regulatory jurisdiction.
1.83
“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority with respect to a Licensed Product other than Patent Rights, that prohibits a Person from Commercializing a Licensed Product, including orphan drug exclusivity or rights similar thereto in other countries or regulatory jurisdictions.
1.84
“Regulatory Materials” means regulatory applications, submissions, notifications, registrations, or other filings made to or with a Regulatory Authority that are necessary or reasonably desirable in order to Develop, Manufacture, market, sell or otherwise Commercialize a Licensed Product in a particular country or regulatory jurisdiction. Regulatory Materials include INDs and BLAs (as applications, but not the approvals with respect thereto).
1.85
“Residual Knowledge” has the meaning set forth in Section 12.6 (Residual Knowledge).
1.86
“ROFN Compound” has the meaning set forth in Section 2.7 (Right of First Negotiation).
1.87
“Royalty Term” means, on a country-by-country and Licensed Product-by-Licensed Product basis, the period commencing upon the First Commercial Sale of the Licensed Product in such country in the Licensed Territory, and ending upon the later to occur of (a) the expiration in such country of the last to expire of any Licensor Patent Right containing a Valid Claim covering such Licensed Product that would be infringed by the sale of such Licensed Product in such country; provided that if a Biosimilar Product to a Licensed Product is sold in accordance with applicable law in such country, then clause (a) of this definition will be deemed to no longer apply to extend the Royalty Term; or (b) 10 years after the First Commercial Sale in such country of such Licensed Product. Notwithstanding the foregoing, if a court of competent jurisdiction in a country in which the Royalty Term has ended as a result of the application of the foregoing clause (a) issues a final judgement that stops the sale of such Biosimilar Product, then the Royalty Term will be restored effective as of the date of the first sale of the Biosimilar Product through the expiration of such Royalty Term for the applicable Licensed Product in such country as if there had been no sale of the Biosimilar Product; provided that during the period commencing upon the first sale of such Biosimilar Product in such country and ending upon the expiration of the Royalty Term for the applicable Licensed Product in such country, all Royalties will be reduced by [***]of the Royalty payments that would have otherwise been due on Net Sales of the applicable Licensed Product in such country. For the avoidance of doubt, Visara will pay [***] of any Royalties that would have been due during the period commencing upon first sale of the applicable Biosimilar Product in the
11
applicable country and ending on the date on which there is a final judgement that stops the sale of such Biosimilar Product in such country consistent with Section 8.4(b) (Reports; Payments).
1.88
“Sales Milestone Event” has the meaning set forth in Section 8.3(b) (Sales Milestones).
1.89
“Sales Milestone Payment” has the meaning set forth in Section 8.3(b) (Sales Milestones).
1.90
“Sublicensee” means, as the context indicates, any Third Party granted a sublicense by (a) Visara under the rights licensed to Visara, or (b) Licensor under the rights licensed to Licensor, in each case (a) and (b), pursuant to Article 2 (Licenses and Exclusivity) hereof.
1.91
“Sublicensing and Assignment Revenue” as the meaning set forth in Section 8.2(a) (Sublicensing and Assignment Revenue Sharing).
1.92
“Term” has the meaning set forth in Section 13.1 (Term).
1.93
“Terminated Country” has the meaning set forth in Section 13.5(a) (Effects of Termination Generally).
1.94
“Terminated Product(s)” has the meaning set forth in Section 13.5(a) (Effects of Termination Generally).
1.95
“Territory” means the Licensed Territory.
1.96
“Territory-Specific Payments” has the meaning set forth in Section 2.5 (Third Party In-Licenses).
1.97
“Third Party” means any entity other than Licensor or Visara or their respective Affiliates.
1.98
“United States” or “U.S.” means the United States of America and all of its territories and possessions.
1.99
“Upfront Payment” has the meaning set forth in Section 8.1 (Upfront Payment).
1.100
“Valid Claim” means a claim of any issued, unexpired United States or granted foreign Patent Right that has not been dedicated to the public, disclaimed, abandoned, or held invalid or unenforceable by a court or other body of competent jurisdiction from which no further appeal can be taken, and that has not been explicitly disclaimed, or admitted in writing to be invalid or unenforceable or of a scope not covering a particular product or service through reissue, disclaimer, or otherwise.
1.101
“VAT” has the meaning set forth in Section 8.7(d) (VAT).
1.102
“VEGF” means vascular endothelial growth factor.
Article 2
LICENSES
LICENSES
2.1
License to Visara. Subject to the terms and conditions of this Agreement, Licensor hereby grants and agrees to grant to Visara, on behalf of itself and its Affiliates, (a) an exclusive (even as to Licensor and each of its Affiliates), royalty bearing license, with the right to sublicense (as permitted in accordance with Section 2.3 (Sublicensing)), under the Licensor Technology, to Develop, Commercialize, make or have made (subject to Article 6 (Manufacturing and Supply),
12
use, sell, offer for sale, import, export, and otherwise exploit (collectively, “Exploit” or “Exploitation”) Licensed Antibodies and Licensed Products in the Field in the Territory.
2.2
License to Licensor. [Reserved].
2.3
Sublicensing. The license granted by Licensor to Visara in Section 2.1 (License to Visara) may be sublicensed by Visara through multiple tiers to any Affiliate of Visara or Third Party without any requirement of Licensor’s consent, provided that (i) Visara will notify Licensor of the grant of such sublicense and the identity of the applicable Sublicensee in writing no later than fifteen (15) days following the grant of such sublicense, and (ii) Visara shall provide Licensor with the redacted version of each such sublicense agreement for Licensor to determine its compliance with this Agreement. Each sublicense granted by Visara will be consistent with the terms of this Agreement and require each Sublicensee to comply with the terms of this Agreement that are applicable to such Sublicensee, and Visara will remain primarily liable to Licensor for the performance of all its obligations under this Agreement, including those conducted by a Sublicensee.
2.4
No Implied Licenses; Retained Rights. Except as explicitly set forth in this Agreement, neither Party grants to the other Party any license or other rights, express or implied, under any intellectual property rights (whether by implication, estoppel or otherwise).
2.5
Third Party In-Licenses. During the Term, if either Party identifies any Patent Right or related Know-How owned or controlled by a Third Party in a particular country or other jurisdiction that it reasonably believes may, absent a license or agreement with such Third Party, be infringed by the Exploitation of any Licensor Patent Rights or Licensor Know-How in the Field in the Territory (“Blocking IP”), then it will so notify the other Party. Visara will have the first right, but not the obligation, to enter into a Third Party License under any Blocking IP. With respect to any such Third Party License that Visara enters into with the applicable Third Party, Visara will use reasonable efforts to ensure that such Third Party License includes the right to grant a sublicense to Licensor under such Blocking IP in the Territory on fair and reasonable terms. If Visara enters into such Third Party License, then Visara will be responsible for all payments payable to such Third Party thereunder that solely pertain to, or arise solely as a result of, the Exploitation of the Licensor Patent Rights or Licensor Know-How in the Territory (the “Territory-Specific Payments”), and will have the right to offset any such Territory-Specific Payments in accordance with Section 8.4(c)(ii) (Reduction for Blocking IP).
2.6
Technology Transfer.
(a)
Initial Technology Transfer. During the [***] following the Effective Date, which can be extended through reasonable mutual agreement in accordance with the Visara Development Plan, Licensor will provide to Visara copies of (i) all documents, data, and other Know-How included within the Licensor Know-How existing as of the Effective Date and (ii) the CMC package and Licensor Manufacturing Technology that Licensor submitted for IND filing and additional regulatory submissions as of the Effective Date in P.R. China, which will be transferred to Visara as contemplated in Section 2.6(b) (Manufacturing Technology Transfer) (the “Initial Technology Transfer”). Due to the subjective nature of this particular term (Section 2.6(a)), an omission of one or more documents, information, or data of Licensor during the Initial Technology shall not be deemed as a material breach of this Agreement unless the omission is material or the applicable documents, information, or data is intentionally or knowingly withheld or not fully provided to Visara. In addition, during the Term, Visara may request in writing any documents, data, or other Know-How that Visara reasonably believes is included in the Licensor Know-How, and Licensor will provide such Licensor Know-How that is in Licensor’s possession and Control.
13
(b)
Manufacturing Technology Transfer. In addition to the documents, data, and other Know-How provided to Visara pursuant to the Initial Technology Transfer, upon the request of Visara during the Term (provided that such request shall come no later than[***] after the Effective Date), Licensor will conduct a one-time-only transfer of all relevant documents, data, other Know-How or activities Controlled by Licensor as of the Effective Date necessary or reasonably useful to Manufacture the Licensed Products (“Licensor Manufacturing Technology”) to Visara or a CMO designated by Visara that is reasonably acceptable to Licensor (such approval not to be unreasonably withheld, conditioned, or delayed) to enable Visara or its designated CMO to assume the Manufacturing activities of the Licensed Products (the “Manufacturing Technology Transfer”) pursuant to a transfer plan to be agreed upon by the Parties. For clarity, the one-time-only transfer may include multiple steps and requests, subject to the transfer plan as agreed by the Parties.
(c)
Continuing Technical Service. The Parties understand that Licensor is not obligated to generate or transfer any additional Licensor Know-How other than the Licensor Know-How Controlled by Licensor as of the Effective Date. If Visara requests Licensor to conduct any further Development activities (including making any improvement to the Licensor Know-How that is necessary or reasonably useful to Manufacture the Licensed Products), the Parties may negotiate and execute a service agreement separately, pursuant to which Licensor may provide the agreed Development services to Visara with fair market consideration.
(d)
Costs of Manufacturing Technology Transfer. In the course of any Manufacturing Technology Transfer, Licensor will provide Visara with reasonable access by teleconference or in-person at Licensor’s, or any of its Affiliates’, facilities to Licensor or any of its Affiliates’ personnel involved in the Development or Manufacture of the Licensed Antibodies and Licensed Products to provide Visara with a reasonable level of technical assistance and consultation in connection with the Manufacturing Technology Transfer. Each Party will be responsible for its own costs for the foregoing reasonable level of consultation and assistance in connection with the Initial Technology Transfer. Licensor will be responsible for the costs of the one-time Manufacturing Technology Transfer set forth in Section 2.6(b) incurred by its employees in the aggregate up to an equivalent of [***] FTE in the [***] after the initiation of such Manufacturing Technology Transfer. If Visara requests Licensor to provide any technical service beyond the aforesaid scope, the Parties may negotiate and execute a technical service agreement separately, pursuant to which Licensor may provide the agreed technical service to Visara with fair market consideration. For clarity, in the event that upon Visara’s reasonable request, Licensor agrees to have its personnel travel to provide any in-person support hereunder, Visara shall reimburse Licensor for all reasonable out-of-pocket expenses incurred thereby (including the travel expenses incurred thereby).
2.7
Right of First Negotiation. If, during the Term, Licensor discovers or develops an Antibody or other product candidate that is not a Licensed Product or Backup Molecule, that inhibits [***]and that could reasonably be used to treat an [***] disease or disorder (each, a “ROFN Compound”), then, on a ROFN Compound-by-ROFN Compound basis, Licensor will provide to Visara written notice of the applicable ROFN Compound, and upon Visara’s election to be made no later than [***] days after receipt of such written notice, the Parties will negotiate in good faith and on an exclusive basis for a period of up to [***] days regarding the terms of a license agreement with respect to the Exploitation of such ROFN Compound for such ophthalmic disease or disorder (or an amendment to any existing agreement between the Parties with respect to the Exploitation of such ROFN Compound) in Territory. For the avoidance of doubt, a compound targeting [***], and one or more additional targets is a ROFN Compound. If, on a ROFN Compound-by-ROFN
14
Compound basis, the Parties do not agree on the terms of such a definitive agreement during the foregoing [***] day period, then Licensor will be free to develop the applicable ROFN Compound itself or, subject to the remainder of this Section 2.7 (Right of First Negotiation) enter into negotiations with a Third Party with respect to the terms of a definitive license agreement as described pursuant to which Licensor would grant to such Third Party rights to such ROFN Compound, provided that the material terms included in such definitive agreement with such Third Party will be no less favorable to Licensor than the applicable terms last offered by Licensor to Visara in such negotiations. If, with respect to a particular ROFN Compound, Licensor does not enter into such a definitive agreement with such Third Party within [***]after the conclusion of such negotiations with Visara, then Visara’s right of first negotiation under this Section 2.7 (Right of First Negotiation) with respect to such ROFN Compound will be reinstated.
Article 3
GOVERNANCE
GOVERNANCE
3.1
Alliance Managers. No later than thirty (30) Business Days after the Execution Date, each Party will appoint (and notify the other Party of the identity of) a representative having the appropriate qualifications including a general understanding of pharmaceutical Development and Commercialization to act as its alliance manager under this Agreement (each an “Alliance Manager”). The Alliance Managers will: (a) serve as the primary contact points 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, providing single point communication for seeking consensus both internally within each Party’s respective organization, including facilitating review of external corporate communications, and raising disputes in a timely manner; (c) have the right to attend all JSC meetings as a non-voting member, and (d) after the JSC is disbanded under Section 3.4 (Discontinuation of JSC), provide annual Commercialization updates and coordinate ad hoc meetings between the Parties as necessary. Without limiting the foregoing, the Alliance Managers will be responsible (i) for scheduling JSC meetings, (ii) setting the agendas for JSC meetings, and (iii) preparing the draft minutes of such meetings (with the responsibility alternating between the Alliance Managers). Each Party may replace its Alliance Manager on written notice to the other Party.
3.2
Joint Steering Committee.
(a)
Formation; Composition. No later than thirty (30) Business Days after the Execution Date, the Parties will establish a joint steering committee (the “Joint Steering Committee” or “JSC”) comprised of two representatives from each Party (or appointed representatives of any Affiliate of such Party) with sufficient seniority and decision-making authority within the applicable Party to make decisions arising within the scope of the JSC’s responsibilities. Each Party may replace its JSC representatives at any time upon written notice to the other Party. The JSC may invite non-member employees or advisors to participate in, the discussions and meetings of the JSC, provided that such participants will have no voting authority at the JSC. The Parties acknowledge that Licensor is represented on a similar joint steering committee (the “Global JSC”) is in place to coordinate the global (in and outside of the Territory defined herein) Exploitation of the Licensed Antibodies and Licensed Products and expects that Visara will be represented on that Global JSC on or about the Effective Date. The Parties agree to consolidate the JSC and the Global JSC with the understanding that the JSC’s responsibilities and decision-making authorities shall be updated to align with each Party’s rights and obligations to Exploit the Licensed Antibodies and Licensed Products in and outside of the Territory.
(b)
Specific Responsibilities. The JSC will:
15
i.
facilitate the flow of information between the Parties with respect to the Exploitation of the Licensed Antibodies and Licensed Products;
ii.
review, discuss, and/or determine whether to approve any Development Plan, or any update thereto in accordance with Section 4.1;
iii.
review and discuss any Development reports provided by Visara pursuant to Section 4.4 (Development Reports) and any Commercialization Reports provided by Visara pursuant to Section 7.2 (Commercialization Reports);
iv.
review and discuss regulatory updates, regulatory strategy, and regulatory affairs related to the Licensed Antibodies and Licensed Products including any major events and milestones with respect thereto;
v.
review and discuss mitigation of Unintended Delay that may impair Visara’s abilities to perform any Development activities hereunder;
vi.
oversee and coordinate the Technology Transfer in accordance with this Agreement and publications and safety/pharmacovigilance matters with respect to Licensed Products hereunder;
vii.
resolve any disagreement between the Parties relating to this Agreement; and
viii.
perform such other functions as appropriate, to further the purposes of this Agreement, in each case as agreed in writing by the Parties.
(c)
Meetings. During the Term, the JSC will meet on a quarterly basis, unless otherwise agreed to by the JSC. No later than [***] Business Days prior to any meeting of the JSC, the Alliance Managers will jointly prepare and circulate an agenda for such meeting. Either Party may also call a special meeting of the JSC (by videoconference, teleconference, or, if agreed by the Parties, in person) by providing at least five (5) Business Days’ prior written notice to the other Party if such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting, in which event such Party will provide the members of the JSC no later than three (3) Business Days prior to the special meeting with an agenda for the meeting and materials reasonably adequate to enable an informed decision on the matters to be considered. The JSC may meet in person, by videoconference, or by teleconference, as may be agreed by the Parties. Each Party will bear the expense of its respective JSC members’ participation in JSC meetings. Meetings of the JSC will be effective only if at least two JSC members from each Party are present or participating (including by videoconference or teleconference) in such meeting.
(d)
Decision-Making. The representatives from each Party on the JSC, or the consolidated JSC as applicable, will have, collectively, one vote on behalf of that Party, and all decision making will be by consensus. Disputes at the JSC will be handled in accordance with Section 3.3 (Resolution of JSC Disputes).
3.3
Resolution of JSC Disputes.
(a)
Within the JSC. All decisions within the JSC will be made by consensus. If the JSC is unable to reach consensus on any issue for which it is responsible within [***]days after a Party affirmatively states that a decision needs to be made, then either Party may elect, by written notice to the other Party, to submit such issue the Parties’ Executive Officers in accordance with Section 3.3(b) (Referral to Executive Officers).
(b)
Referral to Executive Officers. If a Party makes an election under Section 3.3(a) (Resolution of JSC Disputes; Within the JSC) to refer a matter to the Executive Officers, then the Executive Officers will use good faith efforts to resolve promptly such matter,
16
which good faith efforts will include at least one in-person, video, or telephonic meeting between such Executive Officers within [***]Business Days after the submission of such matter to them.
(c)
Final Decision-Making Authority. If the Executive Officers are unable to reach consensus on any such matter within [***]days after its submission to them, then Visara will have final decision-making authority over such matters in the Territory.
(d)
Limitations on Decision-Making. Without the other Party’s prior written consent, neither Party may unilaterally make a decision (in exercise of its final decision-making authority on any such matters) that (A) expands such Party’s contractual rights or reduces such Party’s contractual obligations under this Agreement, (B) results in a material increase in the other Party’s obligations, costs, or expenses or a limitation to the other Party’s rights under this Agreement, (C) conflicts with this Agreement, or would be reasonably likely to result in a violation of Applicable Law, the requirement of any Regulatory Authorities, or any agreement with any Third Party, or result in the infringement or misappropriation of intellectual property rights of any Third Party, or (D) is stated to require the agreement or consent of either Party or both Parties. In addition, no exercise by either Party of such Party’s decision-making authority can amend or waive compliance with any terms of this Agreement.
3.4
Discontinuation of JSC. Unless otherwise agreed by the Parties, the JSC (or the consolidated JSC as applicable) will continue to exist until the completion of the Development of the Licensed Antibodies and Licensed Products under this Agreement. Once the JSC is disbanded, the JSC will have no further obligations under this Agreement and, thereafter, the Alliance Managers will directly exchange information as required under this Agreement and any references in this Agreement to decisions of the JSC will automatically become references to decisions by and between the Parties in writing, subject to the other terms of this Agreement and consistent with the terms of Section 3.3(c) (Final Decision Making Authority).
Article 4
DEVELOPMENT
DEVELOPMENT
4.1
Development Diligence Obligations. Visara will use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval of a Licensed Product in the Territory. A Development plan for Visara’s intended Development activities and regulatory activities is set forth on Schedule 4.1 (as amended by the Parties in accordance with this Agreement, the “Visara Development Plan”), and Visara shall conduct any Development and regulatory activities regarding the Licensed Antibodies and/or Licensed Product under this Agreement in accordance with the agreed Visara Development Plan. Any material amendment to the Visara Development Plan will be subject to notice to Licensor (such as via a JSC discussion or meeting), provided, however, in the event that Visara elects to make any change to the agreed timeline as set forth in the Development Plan or any change that would reasonably be expected to result in any material delay in any timelines with respect to the initiation of Phase IIb Clinical Trial or the initiation of Phase III Clinical Trial, each indicated as “FPI,” set forth in Schedule 4.1, Visara shall promptly notify Licensor and seek Licensor’s prior written consent. Any material delay due to objective scientific risk or Force Majeure event, in each case, that are beyond Visara’s reasonable control would be an “Unintended Delay.” Notwithstanding any provision to the contrary set forth in this Agreement, if Licensor terminates this Agreement as a result of a breach of Visara’s diligence obligations that is an Unintended Delay under this Section 4.1 (Development Diligence Obligations), then such termination will be Licensor’s sole and exclusive remedy with respect to such breach.
4.2
Data Transfer. Phase I and II Data in the Territory. Licensor will promptly transfer data and results and any supporting documentation (e.g., protocols, investigator’s brochures, case report
17
forms, analysis plans) for the Licensed Products generated by or on behalf of Licensor or its Affiliates, Sublicensees, contractors, or subcontractors, if applicable, in a Phase I Clinical Trial or Phase II Clinical Trial for a Licensed Product (collectively the “Licensor Phase I and II Data”).
4.3
Development Records. Visara will, and will cause its Affiliates, Sublicensees, and subcontractors to, maintain reasonably complete, current, and accurate records of all Development activities conducted by or on behalf of it and its Affiliates, Sublicensees, and subcontractors, respectively, pursuant to this Agreement and all data and other information resulting from such activities consistent with its usual practices in accordance with applicable law in the Territory. Visara will maintain all such records relating to the Development of Licensed Antibodies and Licensed Products for a period of three years, or a longer period as may be required by applicable law or regulation, after the end of the Term. Visara will document all non-clinical and preclinical studies and Clinical Trials in formal written study reports in accordance with GLP, cGMP, and GCP in compliance with ICH Guidelines, as applicable, and in compliance with applicable law. For Licensor’s records of its Development activities as of the Effective Date, Licensor will maintain such records with its usual practices in accordance with applicable law in the Territory. Visara and Licensor will also maintain records of their respective Development activities pursuant to the Phase II Clinical Supply Agreement.
4.4
Development Reports. Visara will provide a report to Licensor summarizing the Development and regulatory activities for the Licensed Products performed by or on behalf of it and its Affiliates, Sublicensees, and subcontractors under the Visara Development Plan at least [***]months. Such reports and any additional information provided by Visara regarding Development and regulatory activities for the Licensed Products, in each case, will be subject to the terms of Article 12 (Confidentiality).
Article 5
REGULATORY
REGULATORY
5.1
Regulatory Responsibilities. Subject to the terms and conditions of this Agreement, Visara will have control over and decision-making authority with respect to all regulatory activities for the Licensed Antibodies and Licensed Products in the Field in the Territory, both before and after obtaining Regulatory Approval, at its sole cost and expense, provided that Visara shall conduct all such regulatory activities in accordance with the agreed Visara Development Plan, and report to Licensor at least [***] months through the Development Report all such regulatory activities performed by or on behalf of it and its Affiliates, Sublicensees, and subcontractors during the Term. Promptly after the Effective Date, Licensor will use reasonable efforts to transfer its or its Affiliate’s sponsorship of the clinical trial in the Territory to Visara or its designee. Visara (itself or through its designee) will own all INDs, Marketing Approvals, Regulatory Approvals, other Regulatory Materials, and related documents, with respect to such Licensed Products (in each case, as applicable) in the Territory. Licensor will provide to Visara all assistance reasonably requested in connection with any Regulatory Materials or regulatory activities for the Licensed Products in the Territory.
5.2
Adverse Event Reporting. Within [***] days after the Effective Date, and in any event before the conduct of any Clinical Trial by Visara in the Territory, Visara will Develop and agree on a written agreement to worldwide safety and pharmacovigilance procedures for the Parties with respect to Licensed Products, such as safety data sharing and exchange, adverse events reporting, and signal detection (the “Pharmacovigilance Agreement”). The Pharmacovigilance Agreement will provide that Visara will own the global safety database for the Licensed Products.
18
Article 6
MANUFACTURING AND SUPPLY
MANUFACTURING AND SUPPLY
6.1
Product Supply.
(a)
Phase IIb Clinical Supply. Within [***] days after the Effective Date, and with reasonable assistance by Licensor, Visara will negotiate and enter into a manufacturing and supply agreement with the CMO that was previously engaged by Licensor for Manufacturing Licensed Antibodies and Licensed Products in the Territory which will govern the terms and conditions of the Manufacturing and supply of Licensed Antibodies and Licensed Products for Phase IIb Clinical Trial in the Territory between Visara and such CMO. Licensor will cooperate with the CMO and Visara to facilitate such a new manufacturing and supply agreement to avoid delay in the Phase IIb Clinical Supply due to regulatory requirements.
(b)
Phase III and Commercial Clinical Supply Service. At any time during the Term, if requested by Visara, and if agreed by the Parties, the Parties may negotiate and enter into a service agreement, pursuant to which Licensor may provide the agreed technical support service in connection with Phase III Clinical Trial or Commercialization supply.
6.2
Manufacturing by Visara. Following completion of the Manufacturing Technology Transfer for the Licensed Products pursuant to Section 2.6(b) (Manufacturing Technology Transfer), Visara will, by itself, by an Affiliate or through a designated CMO, have sole control over and decision making authority with respect to the Manufacture of the Licensed Products for Development and Commercial purposes in the Territory during the Term. For the avoidance of doubt, Visara’s indemnification obligation under Section 11.2 applies to Licensed Products Manufactured by Visara pursuant to the terms of this Section 6.2 (Manufacture by Visara).
Article 7
COMMERCIALIZATION
COMMERCIALIZATION
7.1
Commercialization Diligence Obligations. Following receipt of Regulatory Approval of the Licensed Product in any country in the Territory, Visara will use Commercially Reasonable Efforts to Commercialize such Licensed Product in such country in the Territory.
7.2
Commercialization Reports. For each [***] during which Visara is performing, or having performed, Commercialization activities for any Licensed Product, Visara will provide a report to Licensor summarizing the Commercialization activities for the Licensed Products performed during the period. Such reports and any additional information provided by Visara regarding Commercialization activities for the Licensed Products, in each case, will be subject to the terms of Article 12 (Confidentiality).
Article 8
FINANCIALS
8.1
Upfront Payment. This Agreement shall become effective upon the closing date of Visara’s series A financing (“Effective Date”), Visara will pay to Licensor within 30 Business Days after the Effective Date, a one-time, non-refundable, non-creditable payment in the amount of $7,000,000 (“Upfront Payment”). Visara shall communicate to Licensor in writing (including email) of such closing date. In addition, within [***] Business Days after the Effective Date, Visara will reimburse
19
Licensor its such out-of-pocket expenses for initiating its Phase IIa study and long-term toxicology study, up to [***] in accordance with the payment schedule as follows:
(a)
twelve (12) million RMB within thirty (30) Business Days after the Effective Date;
(b)
[***]; and
(c)
[***].
8.2
Revenue Sharing
(a)
Sublicensing and Assignment Revenue Sharing. “Sublicensing and Assignment Revenue” means all upfront payments (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) received by Visara or its Affiliate from a Third Party if Visara or its Affiliate assigns, sub-license or otherwise dispose whole or any part of the title, rights and interests of the Licensed Antibody or the Licensed Product (“Product Deal”), but excluding: (a) royalty and other payments based Net Sales of the Licensed Product sold by such Third Party; (b) milestone payments based on the achievement of the same milestone events on the Licensed Product; (c) payments to fund or reimburse the actual costs of research, development, manufacture and similar services (including such amounts calculated on a commercially reasonable full-time equivalent, or FTE, rate basis, which FTE rates may include normal and customary allocations of overhead) for the Licensed Antibody or the Licensed Product performed for such Third Party during the term of the Product Deal; (d) equity investment or debt financing in Visara or its Affiliates, provided that, in the event that the share of the Sublicensing and Assignment Revenue payable to Licensor under such Product Deal is less than the higher of (i) [***], and (ii) the amount of the upfront payment for such Product Deal shall be no less than [***] of the total value of the Product Deal Visara shall obtain Licensor’s prior written consent before entering into such Product Deal. In the event that Visara enters into a Product Deal under the Licensed Technology in conjunction with an assignment or (sub)license or disposal to other intellectual property rights owned or controlled by Visara or its Affiliates, Visara shall reasonably allocate amount received between the Licensed Technology on one hand, and such other intellectual property rights on the other hand, and the amount allocated to such other intellectual property rights shall be excluded from Sublicense and Assignment Revenue.
Visara shall notify Licensor of such Product Deal immediately after Visara enters into an agreement for such Product Deal, and provide Licensor with sufficient written details of such Product Deal so that Licensor is able to determine the Sublicensing and Assignment Revenue payable to Licensor under such Product Deal. In the event that the upfront payment includes non-cash consideration, Licensor and Visara shall negotiate in good faith, subject to applicable laws and regulations as well as each Party’s internal controls, to determine the amount and form of such Sublicensing and Assignment Revenue to be shared under this Section 8.2. Visara shall pay to Licensor the share of such Sublicensing and Assignment Revenue within [***] Business Days upon Visara’s receipt of the upfront payment (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) from such Third Party. For clarity, Sublicensing and Assignment Revenue sharing hereunder is applicable to each and multiple Product Deals. For clarity, if Visara assigns or sell whole or any part of the title, rights and interests of the Licensed Antibody or the Licensed Product to its Affiliate or a Third Party, the Parties acknowledge that the assignee or acquiror shall comply with this Agreement and shall share any Sublicense and Assignment Revenue received by it under any Product Deal with Licensor in accordance with this Section 8.2. In the event that Visara sublicenses or assigns its rights and obligations under this Agreement to an Affiliate, Visara shall notify in writing Licensor of such sublicense or assignment no later than [***] Business Days from its respective effective date and shall include in such notice information about upfront payments Visara shall receive from the
20
Affiliate; Visara and Licensor shall cooperate with each other to determine whether such upfront payments (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) represent a material windfall for Visara or otherwise should be regarded as a Product Deal, and if so, any amount of such upfront payments (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) received by Visara in excess of the costs it has incurred from the Execution Date to that receipt date in connection with the Licensed Product (including the costs under this Agreement) shall be included as Sublicensing and Assignment Revenue subject to this Section 8.2.
For any Sublicensing and Assignment Revenue received by or on behalf Visara or its Affiliate during its sponsored Phase IIb Clinical Trial but before the completion of the Phase II Clinical Trial from a Product Deal in the Territory, Visara shall share [***] of that Sublicensing and Assignment Revenue with Licensor. For any Sublicensing and Assignment Revenue received by or on behalf Visara or its Affiliate during its sponsored Phase IIb Clinical Trial but before the completion of the Phase II Clinical Trial from a Product Deal outside the Territory, Visara shall share [***] of that Sublicensing and Assignment Revenue with Licensor.
For any Sublicensing and Assignment Revenue received by or on behalf Visara or its Affiliate during its sponsored Phase III Clinical Trial but before the completion of the Phase III Clinical Trial from a Product Deal in the Territory, Visara shall share [***] of that Sublicensing and Assignment Revenue with Licensor. For any Sublicensing and Assignment Revenue received by or on behalf Visara or its Affiliate during its sponsored Phase III Clinical Trial but before the completion of the Phase III Clinical Trial from a Product Deal outside the Territory, Visara shall share [***] of that Sublicensing and Assignment Revenue with Licensor.
For clarity, in the event that a Product Deal involving the title, rights and interests of the Licensed Antibody or the Licensed Product both within and outside the Territory, the Parties will engage a qualified Third Party appraisal entity acceptable to both Parties to appraise and determine the value of the Licensed Antibody and/or the Licensed Product in the Territory and outside the Territory respectively, which will be subject to the applicable Sublicensing and Assignment Revenue sharing rate applied to the given territory as set forth in this Section. For any Sublicensing and Assignment Revenue received by or on behalf Visara or its Affiliate after completing of dosing in its sponsored Phase III Clinical Trial, Visara shall not be obligated to share any such Sublicensing and Assignment Revenue with Licensor.
(b)
Acquisition Deal Payment. In the event of the acquisition of Visara or its Affiliates by a Third Party of all or part of the business, stock or assets of Visara or its Affiliates involving the Licensed Antibody and/or the Licensed Product herein (a “Acquisition Deal”), the value of the Licensed Antibody and/or the Licensed Product acquired thereunder will be determined in accordance with the applicable appraisal report for such Acquisition Deal prepared by a qualified Third Party appraisal entity acceptable to Licensor (“Appraised Value”). Visara agrees to pay Licensor the upfront payment (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) received by Visara or its Affiliates under the Acquisition Deal proportionately based on the Appraised Value of the Licensed Antibody and/or the Licensed Product herein, further following the proportion of the upfront payment sharing scheme as set forth in Section 8.2(a) above. In the event that the acquisition of Visara or its Affiliates by an Affiliate of all or part of the business, stock or assets of Visara or its Affiliates involving the Licensed Antibody and/or the Licensed Product herein, Visara shall notify in writing Licensor of such acquisition no later than [***] Business Days from its respective effective date and shall include in such notice information about upfront payments that Visara or its Affiliates shall receive from the Affiliate; Visara and Licensor shall cooperate with each other
21
to determine whether such upfront payments (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) represent a material windfall for Visara or its Affiliates or otherwise should be regarded as an Acquisition Deal, and if so, any amount of such upfront payments (or in case there is no upfront payment, the purchase price, or any other payment of similar nature, either in cash, or equity or other form) received by Visara or its Affiliates in excess of the costs it has incurred from the Execution Date to that receipt date in connection with the Licensed Product (including the costs under this Agreement) shall be shared with Licensor further following the proportion of the upfront payment sharing scheme as set forth in Section 8.2(a) above.
For illustration purpose, if Visara or its Affiliates receives an upfront payment of RMB 10,000,000 for the Acquisition Deal in the Territory, and the Appraised Value of the Licensed Antibody and/or the Licensed Product in the Territory is fifty percent (50%) of the value of the Acquisition Deal, and if the Acquisition Deal occurs during its sponsored Phase II Clinical Trial but before the completion of the Phase II Clinical Trial, then the payment payable to Licensor under such Acquisition Deal will be RMB 10,000,000 x 50% [***]. Alternatively, if Visara or its Affiliates receives an upfront payment of USD10,000,000 for the Acquisition Deal for the assets outside the Territory, and the Appraised Value of the Licensed Antibody and/or the Licensed Product outside the Territory is eighty percent (80%) of the value of the Acquisition Deal, and if the Acquisition Deal occurs during its sponsored Phase II Clinical Trial but before the completion of the Phase II Clinical Trial, then the payment payable to Licensor under such Acquisition Deal will be USD 10,000,000 x 80% x [***]. For clarity, in the event that an Acquisition Deal involving the title, rights and interests of the Licensed Antibody or the Licensed Product both within and outside the Territory, the applicable appraisal report for such Acquisition Deal shall further determine the value of the Licensed Antibody and/or the Licensed Product in the Territory and outside the Territory respectively, which will be subject to the applicable Sublicensing and Assignment Revenue sharing rate applied to the given territory as set forth in Section 8.2(a).
Visara shall notify Licensor of such Acquisition Deal immediately after Visara enters into an agreement for such Acquisition Deal, and provide Licensor with sufficient written details of such Acquisition Deal so that Licensor is able to determine the amount and other details of the upfront payment, purchase price or other payments of similar nature of the Acquisition Deal. Visara shall pay to Licensor such payments under the Acquisition Deal within [***] Business Days upon Visara’s receipt of the upfront payment, purchase price or other payments of similar nature under the Acquisition Deal from such Third Party.
8.3
Development and Sales Milestone Payments.
(a)
Development Milestones. Visara will make the one-time non-refundable, non-creditable milestone payments set forth in Table 8.3(a) below (each such payment a “Development Milestone Payment”) upon the first achievement of the corresponding milestone event (each such event a “Development Milestone Event”) by Visara or its Affiliates or Sublicensees as set forth in this Section 8.3(a). Visara will promptly notify Licensor in writing of the achievement of a Development Milestone Event by Visara or its Affiliates or Sublicensees promptly after the achievement thereof. Thereafter, Licensor will provide Visara with an invoice for the corresponding Development Milestone Payment, and Visara will pay to Licensor such Development Milestone Payment no later than [***] days after its receipt of an invoice for such Development Milestone Payment. If a subsequent Development milestone is achieved for a given country in the Territory (for example, in the event that a Phase II Clinical Trial is skipped), the Development Milestone Payment for the Development milestone event that was skipped shall be paid in addition to the Development Milestone Payment for the
22
subsequent Development milestone event is made.
Table 8.3(a) - Development Milestones |
||
No. |
Development Milestone Event |
Development Milestone Payment |
1 |
[***] |
$[***] |
2 |
[***] |
$[***] |
3 |
[***] |
$[***] |
4 |
[***] |
$[***] |
5 |
[***] |
$[***] |
6 |
[***] |
$[***] |
(b)
Sales Milestones. Visara will make the one-time, non-refundable, non-creditable milestone payments set forth in Table 8.3(b) below (each such payment a “Sales Milestone Payment”) upon the first achievement of the corresponding milestone event based on Net Sales of the Licensed Product in the Territory by Visara and its Affiliates and Sublicensees (each such event a “Sales Milestone Event”) as set forth in this Section 8.3(b). Visara will promptly notify Licensor in writing of the achievement of a Sales Milestone Event by Visara or its Affiliates or Sublicensees promptly after the achievement thereof. Thereafter, Licensor will provide Visara with an invoice for the corresponding Sales Milestone Payment, and Visara will pay to Licensor such Sales Milestone Payment no later than [***] days after its receipt of an invoice for such Sales Milestone Payment. For clarity, the Sales Milestone Payments in this Section 8.3(b) will be additive such that if multiple Sales Milestone Events specified below are achieved in the same Calendar Year, then the Sales Milestone Payments for all such Sales Milestone Events will be payable for the given Calendar Year.
Table 8.3(b) – Sales Milestones |
||
No. |
Sales Milestone Event |
Sales Milestone Payment |
1 |
[***] |
$[***] |
2 |
[***] |
$[***] |
3 |
[***] |
$[***] |
4 |
[***] |
$[***] |
8.4
Royalties.
(a)
Net Sales Royalty. During the Royalty Term for a Licensed Product in a country in the Territory, Visara will pay to Licensor royalties on annual Net Sales for the Licensed Products in the Territory at the royalty rates set forth below (the “Net Sales Royalty”):
Table 8.4(a) – Net Sales Royalties |
|
Aggregate Net Sales Royalty Trigger |
Net Sales Royalty Rate |
[***] |
[***] |
[***] |
[***] |
[***] |
[***] |
23
(b)
Reports; Payment. The Net Sales Royalty calculation will be delivered in writing by Visara to the Licensor within [***] days after the end of each Calendar Quarter, and will include the aggregate gross sales of the Licensed Product in the Territory during such Calendar Quarter by Visara and its Affiliates and (Sub)licensees, the corresponding Net Sales of the Licensed Product in the Territory during such Calendar Quarter by Visara and its Affiliates and (Sub)licensees, the aggregate amount of Net Sales in the current Calendar Year by Visara and its Affiliates and (Sub)licensees, and the amount of the Net Sales Royalty payment, as applicable, payable by Visara with respect to such Net Sales (each, a “Net Sales Statement”). Licensor will invoice Visara within [***] days after receipt of the Net Sales Statement. Visara will pay all invoices within[***] days from receipt of such invoice. All payments under this Agreement will be payable, in full, in U.S. dollars, regardless of the country(ies) in which such sales are made. For purposes of computing the royalty of any Licensed Product that is sold in a currency other than United States dollars, such currency will be converted into United States dollars at the median of the buying rate and the selling rate of exchange reported by the Wall Street Journal on the last day for the month in which such sales were recorded.
(c)
Reductions of Net Sales Royalty. Notwithstanding the foregoing:
i.
Royalty Reduction upon Expiration of Valid Claims. If, on a country-by-country and Licensed Product-by-Licensed Product basis, pursuant to Section 8.4(a) (Net Sales Royalty), any Net Sales Royalties are payable on Net Sales of a Licensed Product attributable to any country in the Territory where there is no Licensor Patent Right containing a Valid Claim covering such Licensed Product in such country (i.e., Net Sales Royalties are payable on Net Sales of a Licensed Product in a country on the basis of clauses (b) or (c) in the definition of Royalty Term), then, except as otherwise set forth in this Section 8.4(c) (Reductions of Net Sales Royalty), the royalty rates applicable to those Net Sales of such Licensed Product for such country will be reduced by [***] from those set forth in Section 8.4(a) (Net Sales Royalty).
ii.
Reduction for Blocking IP. With respect to any Third Party License pursuant to which Visara is granted rights under any Blocking IP to Exploit the Licensor Patent Rights or Licensor Know-How in a country or jurisdiction in the Territory, Visara will be entitled to deduct from any (A) Net Sales Royalties payable hereunder with respect to that country or other jurisdiction [***] of any amounts paid to such Third Party under such Third Party License to the extent attributable to such country or region and (B) milestone payments payable hereunder with respect to that country or other jurisdiction, [***] of any upfront or milestones paid to such Third Party under such Third Party License.
iii.
Royalty Floor. In no event will the Net Sales Royalties otherwise due to Licensor for the Licensed Products in a Calendar Quarter during the Royalty Term be reduced by more than [***] of the amount that would otherwise be due in such Calendar Quarter for the Licensed Products but for the reductions set forth in Section 8.4(c)(ii) (Reduction for Blocking IP). However, if Visara is unable to fully offset against Net Sales Royalties any reductions and deductions permitted under this Section 8.4(c) (Reductions of Net Sales Royalty) due to the operation of the foregoing floor, then Visara may carry forward any such amounts to reduce subsequent royalty payments in future periods.
24
8.5
Reduction of Royalty for Biosimilar Launch. On a country-by-country and Licensed Product-by-Licensed Product basis in the Territory, upon first sale of a Biosimilar Product with respect to a Licensed Product in a country in the Territory, the Royalty payable to Licensor for Net Sales of Licensed Products in the applicable country will be reduced by [***] if the Net Sales of such Licensed Product in such country in a Calendar Year is less than [***]of the average Net Sales of such Licensed Product in the [***] immediately before the launch of the first Biosimilar Product in such country in the Territory.
8.6
Books and Records; Audit Rights.
(a)
Licensor will have the right to engage, at its own cost and expense, subject to this Section 8.6 (Books and Records; Audit Rights), an independent nationally recognized public accounting firm in the United States chosen by Licensor and reasonably acceptable to Visara (which accounting firm will not be the external auditor of Licensor, will not have been hired or paid on a contingency basis, and will have experience auditing biotech or pharmaceutical companies) (a “CPA Firm”) to conduct an audit of Visara, its Affiliates or Sublicensees for the purposes of confirming Visara’s compliance with the payment provisions of this Agreement.
(b)
The CPA Firm will be given access to and will be permitted to examine such books and records of Visara as it will reasonably request, upon [***] days’ prior written notice having been given by Licensor, during regular business hours, for the sole purpose of determining compliance with the payment provisions of this Agreement. Prior to any such examination taking place, the CPA Firm will enter into a confidentiality agreement reasonably acceptable to Visara and will not include in its report or otherwise disclose to Licensor or any Third Party any information labeled by Visara as being confidential customer information regarding pricing or other competitively sensitive proprietary information.
(c)
Licensor and Visara will be entitled to receive a full written report of the CPA Firm with respect to its findings and Licensor will provide, without condition or qualification, Visara with a copy of the report, or other summary of findings, prepared by such CPA Firm promptly following Licensor’s receipt of same. In the event of any dispute between Licensor and Visara regarding the findings of any such inspection or audit, the Parties will initially attempt in good faith to resolve the dispute amicably between themselves, and if the Parties are unable to resolve such dispute within [***] days after delivery to both Parties of the CPA Firm’s report, each Party will select an internationally recognized independent certified public accounting firm (other than the CPA Firm), and the two firms chosen by the Parties will choose a third internationally recognized independent certified public accounting firm which will resolve the dispute, and such accounting firm’s determination will be binding on both Parties, absent manifest error by such accounting firm.
(d)
Within [***] days after completion of the CPA Firm’s audit, Visara will pay to Licensor any deficiency in the payment amount determined by the CPA Firm. If the report of the CPA Firm shows that Visara overpaid, then Visara will be entitled to off-set such overpayment against any payments then owed to Licensor hereunder. If no payments are then owed to Licensor, then Licensor will remit such overpayment to Visara. If the report of the CPA Firm shows a discrepancy between the amount of the royalty to which Licensor is entitled and the amounts actually paid hereunder by Visara, then in addition to the payment of the shortfall in the payment amounts due hereunder, if such discrepancy exceeds [***] of the audited amount, then the fees and expenses of the CPA Firm in performing such audit will be paid by Visara.
25
(e)
Licensor’s exercise of its audit rights under this Section 8.6 (Books and Records; Audit Rights) may not (i) be conducted for any Calendar Quarter more than three years after the end of such Calendar Quarter to which such books and records pertain, (ii) except for for-cause audit, be conducted more than [***] in any [***] period (unless a previous audit during such [***] period revealed a material underpayment with respect to such period), or (iii) be repeated for any Calendar [***].
8.7
Taxes.
(a)
Taxes on Income. Except as set forth in this Section 8.7 (Taxes), each Party will be solely responsible for the payment of any and all taxes levied on account of all payments it receives under this Agreement.
(b)
Tax Withholding. If applicable laws require the withholding of taxes, then Visara will make such withholding payments in a timely manner and will subtract the amount thereof from the payments to Licensor. Visara will promptly (as available) submit to Licensor appropriate proof of payment of the withheld taxes as well as the official receipts within a reasonable period of time. Visara will provide Licensor reasonable assistance in order to allow Licensor to obtain the benefit of any present or future treaty against double taxation or refund or reduction in taxes that may apply to the payments under this Agreement. Without limiting the generality of the foregoing, if Licensor is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, or recovery of, applicable withholding taxes, then it may deliver to Visara or the appropriate governmental authority in the Territory the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Visara of its obligation to withhold taxes. In such case, Visara will apply the reduced rate of withholding, or not withhold, as the case may be, provided that Visara is in receipt of evidence, in a form reasonably satisfactory to Visara (e.g., Licensor’s delivery of all applicable documentation) prior to the time that the applicable payments are due.
(c)
Tax Cooperation. Each Party will provide the other with reasonable assistance to enable the recovery, as permitted by applicable law, of withholding taxes, VAT, or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of the Party bearing such withholding tax or VAT.
(d)
VAT. The Parties agree to cooperate with one another and use reasonable efforts to ensure that any value added tax or similar payment (“VAT”) does not represent an unnecessary cost in respect of payments made under this Agreement. If any VAT is owing in any jurisdiction with respect to any such payment, then Visara will pay such VAT and, such payment will be made after deduction of such VAT that is due specifically in relation to such payment to Licensor under this Agreement. In the event that any deducted VAT is later recovered by Visara or its Affiliates, Visara will promptly reimburse Licensor for the deducted amount. In the event that any VAT is owing in any jurisdiction in respect of any such payment, Licensor will provide to Visara tax invoices showing the correct amount of VAT in respect of such payments hereunder.
8.8
Late Payments. Any payments or portions thereof due hereunder that are not paid on the date such payments are due under this Agreement will bear interest at a rate equal to the lesser of: (a) [***] in which such payments are overdue; or (b) the maximum rate permitted by applicable law; in each case, calculated on the number of days such payment is delinquent, compounded monthly.
8.9
No Other Compensation. Other than as explicitly set forth (and as applicable) in this Agreement, neither Visara nor any of its Affiliates will be obligated to pay any additional fees, milestone payments, royalties, or other payments of any kind to or on behalf of Licensor or any of its Affiliates under this Agreement.
26
8.10
Other Amounts Payable. With respect to any amounts owed under this Agreement by a Party to the other Party for which no other invoicing and payment procedure is specified in this Agreement, the payee Party will provide an invoice, together with reasonable supporting documentation, to the paying Party for such amounts owed. The paying Party will pay any undisputed amounts within [***] days after receipt of the invoice, and will pay any disputed amounts owed by the paying Party no later than [***] days after resolution of the dispute.
Article 9
INTELLECTUAL PROPERTY
INTELLECTUAL PROPERTY
9.1
Ownership.
(a)
Background Technology.
i.
As between the Parties, Licensor will retain all rights, title, and interests in and to any Patent Rights, Know-How, and other intellectual property rights owned or Controlled by Licensor or any of its Affiliates as of the Effective Date or generated or obtained by or on behalf of Licensor or any of its Affiliates during the Term outside of the scope of this Agreement, and (b) Visara will retain all rights, title, and interests in and to any Patent Rights, Know-How, and other intellectual property rights owned or Controlled by Visara or any of its Affiliates as of the Effective Date or generated or obtained by or on behalf of Visara or any of its Affiliates during the Term outside of the scope of this Agreement.
(b)
Arising Technology. Subject to the licenses granted in Article 2 (Licenses), each Party will exclusively retain all right, title and interest in and to, and ownership of, all Know-How, Patent Rights and other intellectual property developed or invented solely by or on behalf of such Party (or its Affiliates or its or their Sublicensees) in the course of performance of activities under this Agreement. Inventorship and ownership rights in Patent Rights and other Know-How invented or developed after the Effective Date under this Agreement will be determined under the intellectual property laws of the United States (regardless of where such Know-How or intellectual property was created, conceived, discovered, developed or reduced to practice).
(c)
Disclosure. Each Party will promptly disclose to the other Party all invention disclosures or other similar documents relating to Know-How (i) developed or invented by or on behalf of such Party hereunder during the Term and (ii) that is necessary or reasonably useful to Exploit Licensed Products in the other Party’s territory, and all invention disclosures or other similar documents submitted to such Party by its or its Affiliates’ employees, agents or independent contractors relating to such Know-How, and will also respond promptly to reasonable requests from the other Party for additional information relating to such disclosures, documents or applications.
(d)
CREATE Act. Notwithstanding any provision to the contrary set forth in this Agreement, neither Party may invoke this Agreement as a “joint research agreement” pursuant to the Cooperative Research and Technology Enhancement Act, 35 U.S.C. § 102(c) without the prior written consent of the other Party.
9.2
Prosecution, Maintenance, and Enforcement of Licensor Technology.
(a)
Licensor Technology. From and after the Effective Date, Visara will have the right to control the preparation of, filing for, and prosecution and maintenance of (including the defense of any oppositions, interferences, reissue proceedings, re-examinations and other post-grant proceedings originating in a patent office) the Licensor Patent Rights, at Visara’s
27
cost and expense, as well as filing for any patent term extensions or similar protections in the Territory, subject to Section 9.5 (Patent Right Extensions; Regulatory Exclusivity).
(b)
Notice and Comment; Step-In. Visara will provide Licensor copies of and a reasonable opportunity to review and comment upon the text of the applications relating to the Licensor Patent Rights. Visara will reasonably consider any comments from Licensor in good faith and will reasonably incorporate such comments where appropriate. Visara will provide Licensor with a copy of each application for a Licensor Patent Right as filed, together with notice of its filing date and application number. Visara will keep Licensor advised of the status of all material communications, actual and prospective filings or submissions regarding Licensor Patent Rights, and will give Licensor copies of and a reasonable opportunity to review and comment on any such communications, filings, and submissions proposed to be sent to any patent office or judicial body. Visara will reasonably consider in good faith Licensor’s comments on the communications, filings, and submission for the Licensor Patent Rights and if reasonable, include such comments in any response to a patent office or judicial body. Licensor will provide Visara any cooperation or assistance reasonably requested by Visara in connection with such filing, prosecution and maintenance (including defending or prosecuting office actions, prosecutions or interferences). If Visara declines to file for, prosecute or maintain (including defending or prosecuting office actions, prosecutions or interferences) any Licensor Patent Right, then it will promptly give Licensor reasonable notice thereof and thereafter, Licensor may, upon written notice to Visara and at Licensor’s sole cost, control the filing for, prosecution and maintenance of such Licensor Patent Right thereafter in accordance with this Section 9.2(a) (Licensor Technology), mutatis mutandis.
(c)
Transfer of Files. No later than [***] days after the Effective Date, Licensor will (i) provide Visara, at no charge, with copies of all major documents (including file histories and then current dockets) for the applicable Licensor Patent Rights that are in the file maintained by Licensor’s in-house or outside patent counsel for such Licensor Patent Rights or otherwise available to Licensor, including any major communications, filings, and drafts as well as written notice of any pending deadlines or communications for such Licensor Patent Rights (provided, however, that Licensor will provide notice of pending deadlines as promptly as possible after the Effective Date so as to ensure adequate time and coordination with respect to such deadlines), and (ii) execute and deliver any legal papers reasonably requested by Visara to effectuate transfer of control of the filing, prosecution and maintenance of the Licensor Patent Rights (excluding papers that transfer any right, title or interest in or to the Licensor Patent Rights other than such control). In the event Licensor assumes control of the preparation of, filing for, and prosecution and maintenance (including the defense of any oppositions, interferences, reissue proceedings, re-examinations and other post-grant proceedings originating in a patent office) with respect to any Licensor Patent Rights pursuant to Section 9.2(a) (Licensor Technology), then Visara will (A) provide Licensor with copies of any relevant communications, filings, drafts and documents not previously provided to Licensor as well as written notice of any pending deadlines or communications applicable thereto, and (B) execute and deliver any legal papers reasonably requested by Licensor to effectuate transfer of control of the filing, prosecution and maintenance of such Licensor Patent Rights (including papers that transfer any rights, title, or interests in or to the Licensor Patent Rights to Licensor).
(d)
Cooperation. Each Party will reasonably cooperate with the other Party in the filing, prosecution, defense, and maintenance of the Licensor Patent Rights. Such cooperation includes promptly executing all documents, requiring inventors to be available to discuss and review applications and other filings, and requiring inventors, subcontractors,
28
employees, and consultants and agents of such Party and any of its Affiliates, and for the prosecuting Party and any of its Affiliates and Sublicensees (with respect to Visara), to execute all documents, as reasonable and appropriate so as to enable the prosecution and maintenance of any such Licensor Patent Rights.
9.3
Defense and Settlement of Third Party Claims.
(a)
Notice. Each Party will give the other Party prompt written notice of any allegation by any Third Party that a Patent Right or other right owned or controlled by it is infringed by the Exploitation of any Licensed Antibody or Licensed Product.
(b)
Visara’s Territory. From and after the Effective Date, if a Third Party asserts that a Patent Right or other right owned by it is infringed by the Exploitation of any Licensed Antibody or Licensed Product in the Field in the Territory, then Visara will have the first right to defend against any such assertions at Visara’s sole cost or elect to settle such claims (except as set forth below). Licensor or any of its Affiliates will assist Visara and cooperate in any such litigation at Licensor’s request. Licensor may join any defense pursuant to this Section 9.3(b) (Visara’s Territory), with its own counsel, at its sole cost and expense. Visara or any of its Affiliates may settle or consent to the entry of any judgment in any enforcement action hereunder without Licensor’s prior consent; provided, that Visara provides a reasonable opportunity for Licensor to review and comment on such proposed settlement or consent judgment, which comments will be considered in good faith. Notwithstanding the foregoing, Visara may not enter any settlement or consent judgment that imposes any liability or obligation on Licensor or any of its Affiliates (including without limitation any settlement in connection with Territory-Specific Payments or the Blocking IP) without the prior written consent of Licensor (such consent not to be unreasonably withheld, conditioned, or delayed). In the event Visara declines to take any action to defend against any such assertions under this Section, it will promptly give Licensor reasonable notice thereof and thereafter, Licensor will have the second right, but will not be obligated, to take control over any defense action in accordance with this Section 9.2(b) (Visara’s Territory), mutatis mutandis.
9.4
Enforcement.
(a)
Enforcement and Cooperation. If (i) Licensor or Visara becomes aware of any actual or suspected infringement of any Licensor Patent Right, or (ii) any such Licensor Patent Right is challenged in any action or proceeding (other than any interferences, oppositions, reissue proceedings or re-examinations, which are addressed in Section 9.2(a) (Licensor Technology)), then such Party will notify the other Party promptly, and following such notification, the Parties will confer. Visara will have the first right, but will not be obligated, to defend any such action or proceeding in the Territory or bring an infringement action with respect to such infringement in the Territory at its own expense, in its own name and entirely under its own direction and control, or settle any such action or proceeding by sublicense (including, at Visara’s sole discretion, granting a sublicense, covenant not to sue or other right with respect to an Antibody or product (including a Biosimilar Product) in the Field in the Territory). In the event Visara fails to defend such action, abate such infringement, or file an action to abate such infringement in the Territory within [***] days after a written request from the Licensor to do so, or if Visara discontinues the prosecution of any such action after filing without abating such infringement, then Licensor will have the second right, but will not be obligated, to defend any such action or proceeding in the Territory or bring an infringement action with respect to such infringement in the Territory at its own expense, in its own name and under its own direction and control. Regardless of which Party exercises its right this Section 9.4(a)
29
(Enforcement and Cooperation), the other Party and its Affiliates will reasonably assist such enforcing Party in any action or proceeding being defended or prosecuted if so requested, and will agree to be named in or join such action or proceeding if requested by such enforcing Party. If the other Party elects to be represented by legal counsel, then the enforcing Party will bear all of such Party’s related and reasonable legal costs and expenses if the other Party is required to be named in or joined in such action or proceeding or is joined in such action or proceeding at the enforcing Party’s request.
(b)
Damages. If either Party exercises the rights conferred in this Section 9.4 (Enforcement) and recovers any damages, payments, or other sums in such action or proceeding or in settlement thereof, then such damages or other sums recovered will first be applied to all out-of-pocket costs and expenses incurred by such enforcing Party in connection therewith (including attorney’s fees). If such recovery is insufficient to cover all such costs and expenses of both Parties, then the enforcing Party’s costs will be paid in full first before any of the other Party’s costs. If after such reimbursement any funds will remain from such damages or other sums recovered, such funds will be treated as Net Sales of Visara in the Territory.
9.5
Patent Right Extensions; Regulatory Exclusivity.
(a)
Patent Right Term Extension. If elections with respect to obtaining patent term extension or supplemental protection certificates or their equivalents in any country in the Territory with respect to any Licensed Product becomes available, upon Regulatory Approval or otherwise, Visara will have the first right to file for patent term extension or supplemental protection certificates or their equivalents and to determine which issued patent to extend. Licensor and any of its Affiliates will reasonably cooperate with Visara so as to enable Visara to exercise its rights under this Section 9.5(a) (Patent Right Term Extension). Such cooperation includes promptly executing all documents, requiring inventors to be available to discuss and review any filings, and requiring inventors, subcontractors, employees, consultants and agents of Licensor or any of its Affiliates to execute all documents, as reasonable and appropriate so as to enable Visara to exercise its rights under this Section 9.5(a) (Patent Right Term Extension). In the event Visara declines to file for any such patent term extension or supplemental protection certificates or their equivalents, it will promptly give Licensor reasonable notice thereof and thereafter, Licensor will have the second right, but will not be obligated, to make such filing in accordance with this Section 9.5(a) (Patent Right Term Extension), mutatis mutandis.
(b)
Regulatory Exclusivity. With respect to Regulatory Exclusivity periods (such as orphan drug exclusivity and any available pediatric extensions), Visara will have the first right to seek and maintain all such Regulatory Exclusivity periods that may be available for the Licensed Products in the Field in the Territory. In the event Visara declines to seek for or maintain any such Regulatory Exclusivity period under this Section, it will promptly give Licensor reasonable notice thereof and thereafter, Licensor will have the second right, but will not be obligated, to seek and maintain such Regulatory Exclusivity periods.
Article 10
REPRESENTATIONS, WARRANTIES AND COVENANTS
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1
Mutual Representations, Warranties, and Covenants. Each Party hereby represents and warrants to the other Party as of the Effective Date, and covenants, as applicable, as a material inducement for such other Party’s entry into this Agreement, as follows:
30
(a)
Corporate Existence and Power. It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including the right to grant the licenses granted by it hereunder.
(b)
Authority and Binding Agreement. (i) It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder (including granting licenses and rights); (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (iii) this Agreement has been 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.
(c)
No Conflict. It is not a party to and will not enter into any agreement that would prevent it from granting the rights or exclusivity granted or intended to be granted to the other Party under this Agreement or performing its obligations under this Agreement.
(d)
Consents. All consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with this Agreement have been obtained.
(e)
Bankruptcy; Insolvency. It and its Affiliates are not subject to any action or petition, pending or otherwise, for bankruptcy or insolvency in any state, country, or other jurisdiction, and it is not aware of any facts or circumstances that could result in such Party or any of its Affiliates becoming or being declared insolvent, bankrupt, or otherwise incapable of meeting its obligations under this Agreement as they become due in the ordinary course of business.
10.2
Additional Representations and Warranties of Licensor. Except as may be qualified by the disclosures set forth in the applicable schedules set forth below, Licensor represents and warrants to Visara as of the Effective Date and to its knowledge, as applicable, as follows:
(a)
No Conflicts. Neither Licensor nor any of its Affiliates has entered into any agreement (other than agreements with subcontractors) granting any right, interest, or claim in or to, any Licensor Technology to any Third Party that would conflict with the licenses and other rights granted to Visara under this Agreement. The Licensor Technology constitutes all intellectual property rights Controlled by Licensor and any of its Affiliates that are necessary or reasonably useful for the Exploitation of the Licensed Antibodies or Licensed Products in the Field in the Territory.
(b)
Ownership. All Licensor Technology existing as of the Effective Date is exclusively Controlled by Licensor or any of its Affiliates, and is free and clear of any (i) liens, charges, security interests, and encumbrances or licenses, including claims by any governmental authority or academic or non-profit institution, and (ii) claims or covenants that would conflict with or limit the scope of any of the rights or licenses granted to Visara hereunder, or would give rise to any Third Party claims for payment against Visara or any of its Affiliates.
(c)
No Notice of Infringement or Misappropriation. Neither Licensor nor its Affiliates have received any written notice or threat in writing from any Third Party asserting or alleging that any Exploitation of the Licensor Technology, Licensed Products, or Licensed Antibodies prior to the Effective Date infringed, misappropriated, or otherwise violated any intellectual property rights of such Third Party. To the Licensor’s knowledge, the
31
conception, development, and reduction to practice of any of the Licensor Technology has not constituted or involved the misappropriation of trade secrets or other rights or property of any Third Party. Additionally, to the Licensor’s knowledge, there is no unauthorized use, infringement, or misappropriation of any Licensor Technology by any Third Party.
(d)
Licensor Patent Rights. Schedule 1.58 sets forth a complete and accurate list all Licensor Patent Rights as of the Effective Date. All Licensor Patent Rights existing as of the Effective Date have been and are being diligently prosecuted in the respective patent offices in the Territory in accordance with applicable law, have been and are being filed and maintained properly and all applicable fees have been paid on or before the due date for payment, and to the knowledge of Licensor, are not invalid or unenforceable, in whole or in part. There are no oppositions, nullity actions, interferences, inter partes reexaminations, inter partes reviews, post‑grant reviews, derivation proceedings, or other proceedings pending or threatened in writing (but excluding office actions or similar communications issued by the United States Patent Right and Trademark Office or any analogous foreign governmental authority). The inventorship of each Licensor Patent Right is properly identified on each patent and patent application, and to the Licensor’s knowledge there are not any disputes with respect to inventorship of any Licensor Patent Right. All Licensor Patent Rights have been duly and properly filed and maintained and the inventors thereof and to the Licensor’s knowledge the parties prosecuting such applications have complied in all material respects with their duty of candor and disclosure to the U.S. Patent Right and Trademark Office and other foreign patent offices in connection with such applications. The Licensor Patent Rights represent all Patent Rights owned, Controlled, or held for use by Licensor and any of its Affiliates that are necessary or reasonably useful for the Exploitation of the Licensed Antibodies or Licensed Products in the Territory.
(e)
Third Party Agreements. Neither Licensor nor any of its Affiliates have entered into any agreement with any Third Party pursuant to which Licensor Controls or grants any intellectual property rights with respect to the Licensor Technology or Licensed Antibodies for the Territory.
(f)
Licensed Antibodies. Licensor has disclosed to Visara all Antibodies that Licensor or any of its Affiliates owns or in-licenses, as of the Effective Date, that relate to the Licensed Antibodies including Backup Molecules.
(g)
Licensor Assignment. With respect to any Licensor Technology owned by Licensor, (i) Licensor and its Affiliates have obtained from all employees and independent contractors who participated in the invention or authorship thereof, assignments of all ownership rights of such employees and independent contractors in such Licensor Technology, either as described in written agreement or by operation of law; (ii) all of its employees, officers, contractors, and consultants have executed agreements or have existing obligations under applicable law requiring assignment to Licensor or its Affiliates, as applicable, of all rights, title, and interests in and to inventions made during the course of and as the result of this Agreement; and (iii) no officer or employee of Licensor or its Affiliates is subject to any agreement with any other Third Party that requires such officer or employee to assign any interest in any Licensor Technology to any Third Party.
(h)
All Material Information Furnished. Licensor has provided Visara with the opportunity to review all written material information or data in Licensor’s possession relating to the subject matter of this Agreement and such written material information or data is true, correct and complete in all material respects. Licensor has not intentionally concealed from Visara any such material information or data and has not withheld any material information
32
related to the Licensor Technology, Licensed Antibodies, or Licensed Products, in each case, that was requested by Visara in writing.
(i)
Government Funding. No government funding, facilities of a university, college, or other educational institution or research center was used in the development of any Licensor Technology. No Person who was involved in, or who contributed to, the creation or development of any Licensor Patent Right has performed services for the government, university, college, or other educational institution or research center in a manner that would affect Licensor’s rights in the Licensor Technology.
(j)
Conduct of Research and Development. Licensor and its Affiliates have conducted, and their respective contractors and consultants have conducted prior to the Effective Date, the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products in compliance with all applicable laws in all material aspects, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over such Exploitation. Licensor possesses all permits, licenses, and other authorizations required to be held or maintained for the Manufacture of the Licensed Antibodies and Licensed Products as of the Effective Date. Licensor and its Affiliates did not use in any capacity in connection with the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products any Person that had been debarred as described in Section 306 of the FD&C Act, as amended, or that was the subject of a conviction described in such section.
(k)
Confidentiality of Trade Secrets. Licensor and its Affiliates have taken commercially reasonable measures consistent with industry practices to protect the secrecy, confidentiality, and value of all Licensor Know-How that constitutes trade secrets under applicable law (including requiring all employees, consultants, and independent contractors to execute binding and enforceable agreements requiring all such employees, consultants, and independent contractors to maintain the confidentiality of such Know-How), and such Know-How has not been used, disclosed to, or discovered by any Third Party except as described in confidentiality agreements and, to Licensor’s knowledge, there has not been a breach by any party to such confidentiality agreements.
10.3
Covenants of Licensor. Licensor covenants to Visara that, during the Term:
(a)
Licensor will not, and will cause its Affiliates not to (a) license, sell, assign, or otherwise transfer to any Person, or otherwise encumber, the Licensor Technology or (b) incur or permit to exist, with respect to the Licensor Technology, any lien, encumbrance, charge, security interest, mortgage, liability, grant of license to Third Parties, or other restriction (including in connection with any indebtedness), in each case ((a) and (b)), in a manner that conflicts with, or limits the scope of, any of the rights or licenses granted to Visara hereunder;
(b)
Neither Licensor nor any of its Affiliates will effect any corporate restructuring or enter into any new agreement with or otherwise obligate itself to any Third Party, or amend an existing agreement with a Third Party, in each case, in a manner that conflicts with or
33
otherwise adversely affects the rights and licenses (or sublicenses, as the case may be) granted to Visara hereunder;
(c)
Licensor and its Affiliates will not, to their respective knowledge, misappropriate the trade secrets or other rights or property of any Third Party in the conception, development, and reduction to practice of any Licensor Technology;
(d)
Licensor will promptly inform Visara if it at any time becomes aware that any Licensed Antibody, Licensed Product, or Licensor Technology, infringes, misappropriates, or otherwise violates any intellectual property of any Third Party;
(e)
Licensor will, upon obtaining knowledge of any of its non-compliance with any applicable laws, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over Exploitation of the Licensed Products or Licensed Antibodies, take all corrective action possible to remedy such non-compliance.
10.4
Additional Visara Covenants. Visara covenants to Licensor that, during the Term:
(a)
Visara and its Affiliates will not use in any capacity in connection with the Exploitation of the Licensor Technology, Licensed Antibodies, or Licensed Products any Person that had been debarred as described in Section 306 of the FD&C Act, as amended, or that was the subject of a conviction described in such section. In the course of performing its obligations and exercising its rights under this Agreement, Visara shall, and shall cause its Affiliates, Sublicensees and any Third Party contractors to, comply with all Applicable Laws, including but not limited to, as applicable, cGMP, GCP, and GLP standards;
(b)
Visara will not grant during the Term, any sublicense or other right under the Licensed Technology that is inconsistent with the license granted to Visara under this Agreement. Visara shall, and shall include in the applicable agreements with its Sublicensees and any Third Party contractors requiring them to, ensure that such person’s employees, including employees exiting the employ of such person, retain the confidentiality of all Confidential Information disclosed to it, do not carry out any unauthorized use or disclosure of such Licensor Technology and Confidential Information;
(c)
Neither Visara nor any of its Affiliates will effect any corporate restructuring or enter into any new agreement with or otherwise obligate itself to any Third Party, or amend an existing agreement with a Third Party, in each case, in a manner that conflicts with or otherwise adversely affects Licensor Technology or any rights and interests available to Licensor hereunder; and
(d)
Visara has or will have sufficient financial wherewithal to (i) perform all of its obligations pursuant to this Agreement, and (ii) meet all of its obligations that come due in the ordinary course of business. Visara will have or can readily obtain, sufficient technical, clinical, and regulatory expertise to perform all of its obligations pursuant to this Agreement, including its obligations relating to the Exploitation of the Licensor Technology, Licensed Antibodies, or Licensed Products in the Territory.
10.5
NO OTHER REPRESENTATIONS OR WARRANTIES. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY WITH RESPECT TO ANY PATENTS, KNOW‑HOW, MATERIALS, COMPOUND, PRODUCT, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR
34
NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE EXPLOITATION OF ANY COMPOUND OR PRODUCT AS DESCRIBED IN THIS AGREEMENT WILL BE SUCCESSFUL.
Article 11
INDEMNIFICATION
INDEMNIFICATION
11.1
Indemnification by Licensor. Subject to the remainder of this Article 11 (Indemnification), Licensor will defend, indemnify, and hold Visara, its Affiliates, and its and their respective officers, directors, employees, and agents (the “Visara Indemnitees”) harmless from and against any and all liabilities, losses, costs, damages, fees, taxes, expenses or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such Visara Indemnitees, all to the extent resulting from claims, suits, proceedings, or causes of action brought by or on behalf of such Third Party against such Visara Indemnitees that arise from or are based on: (a) a breach of any of Licensor’s representations, warranties, or obligations under this Agreement; or (b) the willful misconduct or grossly negligent acts by or on behalf of Licensor or any of its Affiliates; excluding, in each case (a), and (b)), any damages or other amounts for which Visara has an obligation to indemnify any Licensor Indemnitee pursuant to Section 11.2 (Indemnification by Visara).
11.2
Indemnification by Visara. Subject to the remainder of this Article 11 (Indemnification), Visara will defend, indemnify, and hold Licensor, its Affiliates, and each of their respective officers, directors, employees, and agents (the “Licensor Indemnitees”) harmless from and against any and all damages or other amounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by such Licensor Indemnitees, all to the extent resulting from any claims, suits, proceedings, or causes of action brought by such Third Party against such Licensor Indemnitees that arise from or are based on: (a) the Exploitation of Licensed Antibodies or Licensed Products by or on behalf of Visara or any of its Affiliates in the Territory during the Term; (b) a breach of any of Visara’s representations, warranties, or obligations under this Agreement; or (c) the willful misconduct or grossly negligent acts by or on behalf of Visara or any of its Affiliates; excluding, in each case ((a), (b), and (c)), any damages or other amounts for which Licensor has an obligation to indemnify any Visara Indemnitee pursuant to Section 11.1 (Indemnification by Licensor).
11.3
Indemnification Procedures. The Party claiming indemnity under this Article 11 (Indemnification) (the “Indemnified Party”) will give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of the claim, suit, proceeding or cause of action for which indemnity is being sought (“Claim”). The Indemnifying Party’s obligation to defend, indemnify, and hold harmless pursuant to Section 11.1 (Indemnification by Licensor) or Section 11.2 (Indemnification by Visara), as applicable, will be reduced to the extent the Indemnified Party’s delay in providing notification pursuant to the previous sentence results in actual prejudice to the Indemnifying Party; provided, however, that the failure by an Indemnified Party to give such notice or otherwise meet its obligations under this Section 11.3 (Indemnification Procedures) will not relieve the Indemnifying Party of its indemnification obligation under this Agreement. At its option, the Indemnifying Party may assume the defense and have exclusive control, at its own expense, of any Claim for which indemnity is being sought by giving written notice to the Indemnified Party within [***] days after receipt of the notice of the Claim. The assumption of defense of the Claim will not be construed as an acknowledgment that the Indemnifying Party is liable to indemnify any Indemnified Party in respect of the Claim, nor will it constitute waiver by the Indemnifying Party of any defenses it may
35
assert against the Indemnified Party’s claim for indemnification. The Indemnified Party will provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, the Indemnifying Party will have the right to assume and conduct the defense of the Claim with counsel of its choice. The Indemnifying Party will not settle any Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld. The Indemnified Party will not settle any such Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, then (a) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to the Claim in any manner the Indemnified Party may deem reasonably appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith), and (b) the Indemnified Party reserves any right it may have under this Article 11 (Indemnification) to obtain indemnification from the Indemnified Party.
11.4
Limitation of Liability. NEITHER PARTY WILL BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT, OR THE EXERCISE OF ITS RIGHTS OR THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, OR ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, OR ANY LOST PROFITS, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT FOR DAMAGES THAT ARISE AS A RESULT OF (A) A PARTY’S FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT, OR (B) A BREACH OF SECTION 2.7 (RIGHT OF FIRST NEGOTIATION) OR Article 12 (CONFIDENTIALITY). NOTHING IN THIS SECTION 11.4 (LIMITATION OF LIABILITY) IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER THIS AGREEMENT.
11.5
Insurance. During the Term, Visara will obtain and maintain, at its individual sole expense, the following minimum required insurance, and each such insurance policy will name the Licensor as an additional insured: comprehensive general liability insurance and clinical trials insurance. Any combination of Primary and Excess/Umbrella policies may be utilized to maintain the required limit structure. Visara is required to obtain and maintain clinical trial insurance only for those trials they are sponsoring. Visara will also maintain any mandatory insurance, including workers compensation coverage, in accordance with all applicable laws and regulations. Commercial insurance will be obtained from reputable and financially secure insurance carriers having a minimum A.M. Best rating (or equivalent) of A-. Visara will ensure continuity of coverage for claims, which may be presented during the six year period following the expiration or termination of this Agreement. Visara will furnish to the Licensor, on request, certificates of insurance evidencing the minimum required insurance, including notice of cancellation to be provided in accordance with the terms of the insurance policies. Such insurance will not be construed to create a limit of the insured Party’s liability with respect to its indemnification obligations under this Article 11 (Indemnification).
Article 12
CONFIDENTIALITY
CONFIDENTIALITY
12.1
Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, during the Term and for [***] years thereafter, the Parties agree that the receiving Party will keep confidential and will not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement (a) the terms of this Agreement or (b) any information and
36
materials furnished to it by or on behalf of the other Party or any of its Affiliates or generated pursuant to this Agreement (collectively, “Confidential Information”). Confidential Information of a Party or any of its Affiliates will include all information and materials disclosed by such Party or any of its Affiliates or their respective designees that (i) is marked as “Confidential,” “Proprietary” or with similar designation at the time of disclosure or (ii) by its nature can reasonably be expected to be considered Confidential Information by the recipient. The terms of this Agreement will be deemed to be the Confidential Information of both Parties. The receiving Party will keep the Confidential Information of the Disclosing Party confidential using at least the same degree of care with which the receiving Party holds its own confidential information (but in no event less than a reasonable degree of care). For any Confidential Information that constitutes trade secrets of either Party, the foregoing non-disclosure obligations will continue for as long as such Confidential Information remains trade secrets. Neither Party may attempt to reverse engineer or perform reverse engineering on any trade secret or technology of the other Party licensed hereunder for any purpose other than to perform activities under this Agreement. Neither Party may remove any label setting forth that such information is Confidential Information or alter such label. Both Parties agree to mark all Licensed Products with the appropriate patent numbers to the extent the applicable Party does so for its other products on a country-by-country basis or as required by the Applicable Law of a country in which a Licensed Product is sold.
12.2
Exceptions. Information of a disclosing Party will not be Confidential Information of such disclosing Party to the extent that the receiving Party can demonstrate through competent evidence that such information: (A) was already known to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), at the time of disclosure, (B) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party, (C) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement, (D) was independently developed by the receiving Party as demonstrated by written documentation prepared contemporaneously with such independent development; or (E) was disclosed to the receiving Party, other than under an obligation of confidentiality (except to the extent such obligation has expired or an exception is applicable under the relevant agreement pursuant to which such obligation was established), by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.
12.3
Authorized Disclosure.
(a)
Permitted Disclosure. Except as expressly provided otherwise in this Agreement, each Party may use and disclose Confidential Information of the other Party solely as follows: (i) under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but of shorter duration, if customary): (A) in connection with the performance of its obligations or as reasonably necessary or useful in the exercise of its rights under this Agreement, including the right to grant licenses or sublicenses as permitted hereunder, (B) to the extent such disclosure is reasonably necessary or useful in conducting Clinical Trials under this Agreement; or (C) to actual or potential (sub)licensees, acquirers or assignees, collaborators, investment bankers, investors or lenders (including in connection with any royalty factoring transaction), or; (ii) to the extent such disclosure is to a governmental authority as reasonably necessary in filing or prosecuting Patent Right, copyright and trademark applications in accordance with this Agreement, prosecuting or defending litigation related to this Agreement, complying with applicable governmental regulations with respect to performance under this Agreement (including any disclosure to any securities exchange), obtaining Regulatory Approval or Marketing Approval or fulfilling post‑approval regulatory obligations for the Licensed Antibodies or Licensed Products, or
37
otherwise required by applicable law; provided, however, that if a Party is required by applicable law or the rules of any securities exchange or automated quotation system to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, in each of the foregoing, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed and will only disclose that Confidential Information that is required to be disclosed; (iii) to advisors (including lawyers and accountants) on a need to know basis, in each case under appropriate confidentiality provisions or professional standards of confidentiality substantially equivalent to those of this Agreement, or (iv) to the extent agreed to by the Parties.
(b)
Press Release. The Parties may agree to issue an initial press release promptly after the Effective Date, the content of which will be agreed by the Parties. Other than the announcement and disclosures required by applicable law, 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 that is not already in the public domain, must first be reviewed and approved by both Parties in writing (with such approval not to be unreasonably withheld or delayed). After a disclosure or other public announcement has been reviewed and approved by both Parties in writing under this Section 12.3 (Authorized Disclosure), either Party may make subsequent public disclosures reiterating the same information without having to obtain the other Party’s prior consent and approval, so long as the information in such disclosure or other public announcement remains true, correct, and the most current information with respect to the subject matters set forth therein.
12.4
Publications. During the Term, each Party may present, publish, or otherwise publicly disclose (including at symposiums and conferences, and in printed or online publications, posters, presentations, and abstracts) any Clinical Trial data, non-clinical or preclinical data, or any associated results or conclusions generated by or on behalf of either Party pursuant to this Agreement (each such proposed presentation or publication, a “Publication”) subject to the limitations set forth in this Section 12.4 (Publications) and Section 12.5 (Publication and Listing of Clinical Trials).
(a)
Both Parties acknowledge that it is their policy for the studies and results thereof to be registered and published in accordance with their internal guidelines.
(b)
A Party (“Publishing Party”) will provide the other Party with a copy of any proposed Publication at least [***] days prior to disclosure of such Publication so as to provide such other Party with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain such other Party’s Confidential Information in accordance with the requirements of this Agreement. The Publishing Party will remove from the proposed Publication any Confidential Information of such non-Publishing Party that is reasonably requested by such non-Publishing Party. If such other Party notifies the Publishing Party in writing (“Publishing Notice”), within [***] days after receipt of the copy of the proposed Publication, that such Publication in its reasonable judgment contains an invention, solely or jointly conceived or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent protection, then the Publishing Party will prevent or delay disclosure of such Publication for a period of [***] days or such other period of time as may be agreed by the Parties. If such other Party provides a Publishing Notice to the Publishing Party, within [***] days after receipt of the copy of the proposed
38
Publication, that such Publication in its reasonable judgment could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, then the Publishing Party will prevent or delay disclosure of such Publication for a period of time agreed by the Parties.
(c)
Each Party will provide the other Party a copy of the Publication at the time of the submission or presentation thereof.
(d)
Each Party agrees to determine the authorship of all Publications in accordance with all applicable International Committee of Medical Journal Editors (ICMJE) guidelines, and, in addition, to acknowledge the contributions of the other Party and its employees, in each case, as scientifically appropriate.
12.5
Publication and Listing of Clinical Trials. With respect to the listing of Clinical Trials or the publication of Clinical Trial results for the Licensed Products and to the extent applicable to a Party’s activities conducted under this Agreement, each Party will comply with (a) the Pharmaceutical Research and Manufacturers of America (PhRMA) Guidelines on the listing of Clinical Trials and the Publication of Clinical Trial results, and (b) any applicable law or applicable court order, stipulations, consent agreements, and settlements entered into by such Party. The Parties agree that any such listings or publications made pursuant to this Section 12.5 (Publication and Listing of Clinical Trials) will be considered a Publication for purposes of this Agreement and will be subject to Section 12.4 (Publications).
12.6
Residual Knowledge. Notwithstanding any provision to the contrary set forth in this Agreement, Confidential Information will not include any knowledge, technique, experience, or Know-How that is retained in the unaided memory of any authorized representative of the receiving Party after having access to such Confidential Information (“Residual Knowledge”). Any use made by the receiving Party of any such Residual Knowledge is on an “as is, where is” basis, with all faults and all representations and warranties disclaimed and at its sole risk.
Article 13
TERM AND TERMINATION
TERM AND TERMINATION
13.1
Term. This Agreement will commence on the Effective Date and, unless earlier terminated pursuant to this Article 13 (Term and Termination), will expire on a Licensed Product-by-Licensed Product and country-by-country basis (in the Territory) at the end of the applicable Royalty Term (the “Term”). Following the end of the Term for the applicable Licensed Product and in such country by expiration (but not termination), and subject to Licensor’s receipt of all the payments payable to Licensor hereunder with respect to such Licensed Product and such country, the licenses granted to Visara under Section 2.1 (License to Visara) for such Licensed Product and such country will survive termination and become perpetual, irrevocable, fully paid-up, and royalty-free.
13.2
Termination by Visara. Visara will have the right for any or no reason to terminate this Agreement in its entirety upon [***] days’ prior written notice to Licensor.
13.3
Termination for Breach or Insolvency.
(a)
Termination for Material Breach. Each Party (as applicable, the “Non-Breaching Party”) will have the right to terminate this Agreement with respect to those countries to which such breach relates upon written notice to the other Party (as applicable, the “Breaching Party”) if the Breaching Party materially breaches this Agreement, and, after receiving written notice from the Non-Breaching Party identifying such material breach by the Breaching Party in reasonable detail, fails to cure such material breach within [***] days from the date of such notice (or, if such breach cannot be cured within [***] days from
39
the date of such notice despite the Breaching Party’s continued diligent efforts to cure in good faith, within an additional [***] days). The Parties acknowledge that any of the following event will constitute a “material breach” by Visara for the purpose of this Section 13.3 (a):
i.
if Visara is unable to make any payment due to Licensor hereunder for more than [***] days past the respective due date for such payment; or
ii.
if Visara is unable to initiate a Phase IIb Clinical Trial for the Licensed Product in Mainland China in accordance with the timeline agreed by the Parties in the Development Plan, provided however, if Visara reasonably believes that the Regulatory Authority in Mainland China will not allow the conduction of the Phase IIb Clinical Trial as set forth in the Development Plan, the Parties shall communicate the same with the Regulatory Authority in Mainland China, in which case if the Regulatory Authority in Mainland China does not reject the conduction of the Phase IIb Clinical Trial set forth in the Development Plan during the communication, it will constitute a “material breach” by Visara if Visara fails, in the absence of any Unintended Delay, to initiate such Phase IIb Clinical Trial for the Licensed Product in Mainland China within [***] after the aforesaid communication with the Regulatory Authority, except if Visara reasonably believes that Phase IIb Clinical Trial may be skipped and communicates to Licensor an updated Development Plan that sets forth a reasonable timeline of a China or global Phase III Clinical Trial (subject to Licensor’s prior consent on such updated timeline), such skipping of Phase IIb Clinical Trial shall not be a breach; or
iii.
if Visara is unable to initiate a Phase III Clinical Trial for the Licensed Product in Mainland China and in the United States in accordance with the timeline agreed by the Parties in the Development Plan (or as updated with the timeline subject to Licensor’s prior consent), provided, however, if Visara reasonably believes that the Regulatory Authority in Mainland China and/or in the United States will not allow the conduction of the Phase III Clinical Trial as set forth in the Development Plan (as updated with the timeline subject to Licensor’s prior consent), the Parties shall communicate the same with the applicable Regulatory Authority in Mainland China and/or in the United States, in which case if the applicable Regulatory Authority in Mainland China and/or in the United States do not reject the conduction of the Phase III Clinical Trial set forth in the Development Plan during the communication, it will constitute a “material breach” by Visara if Visara fails, in the absence of any Unintended Delay, to initiate such Phase III Clinical Trial for the Licensed Product in Mainland China and/or in the United States respectively within [***] after the aforesaid communication with the applicable Regulatory Authority.
iv.
if, in the absence of any Unintended Delay, Visara is otherwise unable to perform its obligations in the Development Plan within the timeline agreed by the Parties for more than [***].
(b)
Termination for Insolvency. To the extent permitted by applicable law, either Party may terminate this Agreement in whole upon the filing or institution of bankruptcy, reorganization, liquidation, or receivership proceedings, upon the appointment of a receiver or trustee over all or substantially all property, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate will only
40
become effective if the other Party consents to the involuntary bankruptcy or such proceeding is not dismissed within [***] days after the filing thereof.
13.4
Termination for Patent Challenge. If Visara, its Affiliates, or their Sublicensees initiates or joins any challenge, whether in a court of law or in an administrative proceeding, to the validity or enforceability of any Licensor Patent Right, then Licensor may provide notice requesting Visara cease such patent challenge, and unless Visara or its Sublicensee (or the applicable Affiliate) causes such patent challenge to be withdrawn within [***] days of receiving such notice (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenges in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, such challenging party withdraws as a party from such patent challenge (if applicable) and ceases actively assisting any other party to such patent challenge within [***] days of receiving such notice), then Licensor may, in its sole discretion, terminate Visara’s license to the applicable Licensor Patent Rights by providing written notice thereof to Visara. The foregoing termination right will not apply with respect to (a) any claim of a Licensor Patent Right that Licensor first asserts against Visara, its Sublicensees or any of their Affiliates where the patent challenge is made in defense of such assertion, or (b) any patent challenge commenced by a Third Party that after the Effective Date acquires Visara, a Sublicensee, or one of their Affiliates or its or their business or assets, whether by stock purchase, merger, asset purchase, or otherwise, but only with respect to a patent challenge commenced prior to the execution of the purchase agreement or merger agreement for such acquisition, provided that said Third Party and Visara will establish a firewall so that Licensor’s Know-How is not accessible to such Third Party for use in invalidating Licensor Patent Rights. In the case wherein a Third Party commences a patent challenge after the Effective Date, and said Third Party is later acquired by Visara, Licensor will not terminate this Agreement or any license granted hereunder if Visara causes any patent challenge initiated by said Third Party to be withdrawn within such [***]-day notice period (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenge in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, Visara causes said Third Party to cease actively assisting any other party to such patent challenge within such [***]-day notice period). In addition, with respect to any patent challenge commenced by a Sublicensee (or an Affiliate of a Sublicensee), Licensor may not terminate the license granted to Visara under the applicable Licensor Patent Right(s) if Visara promptly terminates the sublicense granted to such Sublicensee upon the Sublicensee’s (or its Affiliate’s) failure to cause any patent challenge initiated by it to be withdrawn within such [***]-day notice period (or in the case of ex-parte proceedings, multi-party proceedings, or other patent challenge in which the challenging party does not have the power to unilaterally cause the patent challenge to be withdrawn, upon the Sublicensee’s (or its Affiliate’s) failure to withdraw as a party from such patent challenge and cease actively assisting any other party to such patent challenge within such [***]-day notice period).
13.5
Effects of Termination.
(a)
Effects of Termination Generally. In the event that this Agreement is terminated for a Licensed Product in a country in the Territory, then such Licensed Product will become a “Terminated Product” and such country will be a “Terminated Country.” Upon the termination of this Agreement (in addition to any other rights and obligations under this Article 13 (Term and Termination)):
i.
Licenses. As of the effective date of termination of this Agreement, all licenses and all other rights granted by Licensor to Visara under Section 2.1 (License to Visara) with respect to the Terminated Product(s) in the Terminated Countries will terminate. As of the effective date of termination of this Agreement, all sublicenses granted by Visara pursuant to Section 2.3 (Visara Sublicensing) with respect to the Terminated Product(s) will also terminate; provided, however, that at the request of any Sublicensee who is in compliance with and is not in breach of its applicable sublicense
41
agreement, Licensor will enter into a direct license agreement with such Sublicensee with respect to the Terminated Product(s) or Licensed Products, on the same terms as this Agreement, taking into account any difference in license scope, territory, and duration of sublicense grant (each, a “New License Agreement”), regardless of the sublicense terms and conditions under any sublicense agreement between Visara and its Sublicensee. Under any such New License Agreement between Licensor and such former Sublicensee, such Sublicensee will be required to pay to Licensor the same amounts in consideration for such direct grant as Licensor would have otherwise received from Visara as described in this Agreement on account of such Sublicensee’s Exploitation of the relevant Licensed Products had this Agreement not been terminated, unless Licensor and such Sublicensee otherwise agreed. Under such New License Agreement, Licensor will not be bound by any grant of rights broader than, and will not be required to perform any obligation other than those rights and obligations contained in this Agreement and all applicable rights of Licensor set forth in this Agreement will be included in such New License Agreement. Each Sublicensee will be an intended Third Party beneficiary of this Section 13.5(a)i (Licenses) with the right to enforce the same against Licensor. At the request of Visara, Licensor will issue a comfort letter directly to any potential Sublicensee confirming the terms of this Section 13.5(a)i (Licenses).
ii.
Return of Confidential Information. Upon the termination of this Agreement with respect to a Terminated Product in a Terminated Country, the receiving Party will return (or, as directed by the Disclosing Party, destroy) all Confidential Information of the Disclosing Party to the Disclosing Party related to such Terminated Product in such Terminated Country, as applicable, that is in the receiving Party’s possession or control (other than any Confidential Information required to continue to exercise a Party’s rights that survive termination of this Agreement), provided, however, copies may be retained and stored solely for the purpose of determining its obligations under this Agreement, subject to the non-disclosure and non-use obligation under Article 12 (Confidentiality) or as required by law. In addition, the receiving Party will not be required to return or destroy Confidential Information contained in any computer system back-up records made in the ordinary course of business; provided that such Confidential Information may not be accessed without the Disclosing Party’s prior written consent or as required by applicable law.
iii.
Arising Technology.
(A) In the event that Visara terminates this Agreement under Section 13.2 or Licensor terminates the Agreement under Section 13.3(a) for Visara’s uncured material breach, Visara will (and will cause its Affiliates and sublicensees to) promptly transfer and assign, at no additional costs, all Know-How, Patent Rights, any relevant documents, data, and other intellectual property (including Arising Technology owned or co-owned by Visara, all data and results and all supporting documentation, such as protocols, investigator’s brochures, case report forms, analysis plans) (i) developed or invented by or on behalf of Visara (or its Affiliates or its or their Sublicensees) in the course of performance of activities under this Agreement, or (ii) Controlled by Visara or its Affiliates related to the Terminated Product in the Terminated Country that are generated by or on behalf of Visara or its Affiliates, Sublicensees, or subcontractors, if applicable, during the Term and that has not been previously transferred or assigned to Licensor or one of its Affiliates or designees.
42
(B) In the event that the Agreement is terminated by either Party for reasons other than (A) above, upon timely written request of Licensor, the Parties shall negotiate in good faith a license and other terms and conditions for Licensor to receive a non-exclusive or exclusive, royalty-bearing and sublicensable (through multiple tiers) license under the Arising Technology owned or co-owned by Visara, including all Know-How, Patent Rights, any relevant documents, data, and other intellectual property (including all data and results and all supporting documentation, such as protocols, investigator’s brochures, case report forms, analysis plans), to Exploit any Licensed Product in the Territory; provided that, Licensor shall pay to Visara or its designee fair value consideration for such license (taking into account either Party’s actions or fault in the cause of the termination); provided further that, neither Party shall be obligated to enter into an agreement for any such license if the Parties are unable in good faith to agree on mutually acceptable terms and conditions.
iv.
Regulatory Approvals and Materials. For any Regulatory Materials and Regulatory Approvals for the Licensed Product that are held by Visara or its Affiliate or Sublicensees, Visara shall (and shall cause its Affiliates and sublicensees to), as instructed by Licensor and in the case of 13.5(a)(iii)(B) at its own costs, either (i) if permitted by Applicable Laws, promptly transfer and assign all such Regulatory Materials and Regulatory Approvals to Licensor or its designee, (ii) continue to hold any such Regulatory Materials and Regulatory Approvals for the sole benefit of Licensor or its designee under such Regulatory Materials and Regulatory Approvals for the Licensed Product in the Terminated Country until such time Licensor or its designee files its own Regulatory Materials and obtain its own Regulatory Approvals for the Licensed Product in the Terminated Country; and/or (iii) terminate or withdraw any such Regulatory Materials and Regulatory Approvals under Licensor’s instruction. Upon Licensor’s request and in the case of 13.5(a)(iii)(B) at its own costs, Visara shall provide Licensor with reasonable assistance and cooperation regarding any inquiries and correspondence with Regulatory Authorities relating to the Licensed Antibodies and Licensed Products in the Territory.
v.
Transition Assistance. Visara shall (and shall cause its Affiliates and Sublicensees to) reasonably cooperate with Licensor to facilitate orderly transition, and in the case of 13.5(a)(iii)(B), at Licensor’s own costs (including any costs that may be passed through to Licensor and any reasonable administrative costs incurred by Visara), of the Development, Manufacture and Commercialization of the Licensed Antibodies and Licensed Product to Licensor, including (i) assigning or amending as appropriate, upon request of Licensor, any agreements or arrangements with Third Party vendors to Develop, Manufacture, promote, distribute, sell or otherwise Commercialize the Licensed Product or, to the extent any such Third Party agreement or arrangement is not assignable to Licensor, reasonably cooperating with Licensor to arrange to continue to provide such services for a reasonable time after termination; (ii) to the extent that Visara or its Affiliate or Sublicensee is performing any activities described above in (i), reasonably cooperating with Licensor to transfer such activities to Licensor or its designee, and continuing to perform such activities on Licensor’s behalf for a reasonable time after termination until such transfer is completed; and (iii) providing Licensor with reasonable quantities of materials used or generated by Visara, its Affiliates and Sublicensees in the Development, Manufacture and Commercialization of the Licensed Antibodies and Licensed Product in the Territory, such as clinical brochures and promotional materials, or any chemical or biological materials, that were not received by Licensor.
43
13.6
Visara’s Alternative Remedy in Lieu of Termination. Licensor stipulates and agrees that Visara’s decision to enter into this Agreement and invest in the Development of the Licensed Products is premised upon the assumption that Licensor will perform its obligations under this Agreement, and that a material breach of the Agreement by Licensor will undermine the economic fundamentals of the transaction for Visara, and that in such event Visara’s damages arising from Licensor’s breach would be of uncertain amount and difficult to prove. Accordingly, if during the Term, Visara has the right to terminate this Agreement as described in Section 13.3 (Termination for Material Breach or Insolvency), then as the sole monetary remedy available to Visara (other than any equitable remedies), in lieu of terminating this Agreement Visara may, in its sole discretion, exercise an alternative remedy as follows, which Licensor stipulates and agrees would be a reasonable remedy in such circumstance and not a penalty: Visara may retain all of its licenses and other rights granted under this Agreement, subject to all of its payment and other obligations, except that the then-unearned milestone payments and the Net Sales Royalties payable thereafter under this Agreement will be reduced by [***] effective from and after the delivery of the applicable notice of breach.
For the avoidance of doubt, except as set forth in this Section 13.6 (Visara’s Alternative Remedy in Lieu of Termination), if Visara exercises the alternative remedy set forth above in this Section 13.6 (Visara’s Alternate Remedy in Lieu of Termination), then all rights and obligations of both Parties under this Agreement will continue unaffected, unless and until this Agreement is subsequently terminated by either Party as described in this Article 13 (Term and Termination). In addition, and notwithstanding anything to the contrary set forth in this Agreement, if Licensor disputes the allegation of a material breach and it is determined, as a result of the dispute resolution process set forth in Article 14 (Dispute Resolution), that Visara has the right to terminate this Agreement as described in Section 13.3(a) (Termination for Material Breach) based on the uncured material breach by Licensor or as described in Section 13.3(b) (Termination for Insolvency), then the adjustments of milestone payments and Net Sales Royalties contemplated by this Section 13.6 (Visara’s Alternative Remedy in Lieu of Termination) will be deemed effective since the date of notice of the applicable material breach, and Visara will have the right to credit any overpayment that has been made during the dispute resolution process against future payments payable to Licensor.
13.7
Other Remedies. Termination or expiration of this Agreement for any reason will not release either Party from any liability or obligation that already has accrued prior to such expiration or termination, nor affect the survival of any provision hereof to the extent it is expressly stated to survive such termination. Termination or expiration of this Agreement for any reason will not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remedies or claims, whether for damages or otherwise, that a Party may have hereunder or that may arise out of or in connection with such termination or expiration.
13.8
Survival. Termination or expiration of this Agreement will not affect rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination or expiration of this Agreement. Notwithstanding any provision to the contrary set forth in this Agreement, the following provisions will survive and apply after expiration or termination of this Agreement in its entirety: Article 1 (Definitions), Section 4.3 (Development Records), Section 8.4 (Royalties) (but only with respect to Net Sales made during the Term), Section 8.6 (Books and Records; Audit Rights) (but only with respect to payment obligations accruing during the Term and only for a period of three years after expiration or termination), Section 8.8 (Late Payments) (but only with respect to payment obligations accruing during the Term), Section 9.1 (Ownership), Section 10.5 (No Other Representations or Warranties), Article 11 (Indemnification), Article 12 (Confidentiality), Section 13.1 (Term), Section 13.5 (Effects of Termination), Section 13.7 (Other Remedies), this Section 13.8 (Survival), Article 14 (Dispute Resolution), and Article 15
44
(Miscellaneous). In addition, the other applicable provisions of Article 8 (Financials) will survive such expiration or termination of this Agreement in its entirety to the extent required to make final reimbursements, reconciliations or other payments incurred or accrued prior to the date of termination or expiration. For any surviving provisions requiring action or decision by an Executive Officer, each Party will appoint representatives to act as its Executive Officer, as applicable. All provisions not surviving in accordance with the foregoing will terminate upon expiration or termination of this Agreement and be of no further force and effect.
Article 14
DISPUTE RESOLUTION
DISPUTE RESOLUTION
14.1
Resolution by Executive Officers. In the event of any dispute between the Parties under this Agreement (other than the matters that are subject to resolution by the JSC under Article 3 (Governance)), the Parties will first attempt in good faith to resolve such dispute by negotiation and consultation between themselves. If such dispute is not resolved on an informal basis within [***] Business Days, then either Party may refer the matter to the Executive Officers of the Parties for attempted resolution, whereupon the Executive Officers will confer and attempt in good faith to resolve such dispute by negotiation and consultation for a [***] day period following such referral.
14.2
Litigation. With the exception of (a) legal actions, proceedings, or claims described in Section 14.4 (Injunctive Relief) and (b) Section 14.3 (Patent Right and Trademark Disputes) below, any legal action or proceedings to resolve a dispute that was not resolved under Section 14.1 (Resolution by Executive Officers) will be brought exclusively in a federal court of competent jurisdiction located in New York, New York, and in no other jurisdiction. Each Party hereby irrevocably consents to personal jurisdiction and venue in, and irrevocably agrees to service of process issued or authorized by, any such court in any such action or proceeding. The Parties hereby irrevocably waive any objection that they may now have or hereafter have to the laying of venue in the federal courts of New York in any such action or proceeding, and hereby irrevocably waive and agree not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. The Parties hereby agree that any final judgment rendered by any such federal court of New York in any action or proceeding involving any Dispute, from which no appeal can be or is taken, may be enforced by the prevailing Party in any court of competent jurisdiction. THE PARTIES EXPRESSLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE AND FOREGO ANY RIGHT TO TRIAL BY JURY.
14.3
Patent Right and Trademark Disputes. Notwithstanding any provision to the contrary set forth in this Agreement, any and all issues regarding the scope, construction, validity, and enforceability of any Patent Right or trademark relating to a Licensed Product will be determined in a court or other tribunal, as the case may be, of competent jurisdiction under the applicable patent or trademark laws of the country in which such Patent Right or trademark were granted or arose.
14.4
Injunctive Relief. Nothing in this Article 14 (Dispute Resolution) will preclude either Party from seeking equitable relief or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction, or other interim equitable relief, concerning a dispute either prior to or during any proceeding if necessary to protect the interests of such Party or to preserve the status quo pending the proceeding. Therefore, in addition to its rights and remedies otherwise available at law, including the recovery of damages for breach of this Agreement, upon an adequate showing of material breach, and without further proof of irreparable
45
harm other than this acknowledgement, such Non-Breaching Party will be entitled to seek (a) immediate equitable relief, specifically including both interim and permanent restraining orders and injunctions, and (b) such other and further equitable relief as the court may deem proper under the circumstances. For clarity, nothing in this Section 14.4 (Injunctive Relief) will otherwise limit a Breaching Party’s opportunity to cure a material breach as permitted in accordance with Section 13.3(a) (Termination for Material Breach).
Article 15
MISCELLANEOUS
MISCELLANEOUS
15.1
Entire Agreement; Amendment. This Agreement, including the Exhibits hereto, set forth the complete, final, and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions, and understandings between the Parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings between the Parties existing as of the Effective Date with respect to the subject matter hereof. In the event of any inconsistency between any plan hereunder and this Agreement, the terms of this Agreement will prevail. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change, or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.
15.2
Force Majeure. Neither Party will be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in achieving any objective, satisfying any condition, or performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from acts or events beyond the reasonable control of such Party, including acts of God, embargoes, war, acts of war (whether war be declared or not), terrorism, insurrections, riots, civil commotions, strikes, lockouts, or other labor disturbances (other than strikes, lockouts, or labor disturbances involving a Party’s own employees), government actions, fire, earthquakes, floods, epidemics, pandemics, the spread of infectious diseases, and quarantines (“Force Majeure”). In addition, a Force Majeure may include reasonable measures affirmatively taken by a Party or its Affiliates to respond to any epidemic, pandemic, or spread of infectious disease, such as requiring employees to stay home, closures of facilities, delays of Clinical Trials, or cessation of activities in response to an epidemic or other Force Majeure event. The affected Party will notify the other Party in writing of any Force Majeure circumstances that may affect its performance under this Agreement as soon as reasonably practical, will provide a good faith estimate of the period for which its failure or delay in performance under the Agreement is expected to continue based on currently available information, and will undertake reasonable efforts necessary to mitigate and overcome such Force Majeure circumstances and resume normal performance of its obligations hereunder as soon a reasonably practicable under the circumstances.
15.3
Notices. Any notice required or permitted to be given under this Agreement will be in writing, will specifically refer to this Agreement, and will be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 15.3 (Notices), and will be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by a reputable international expedited delivery service, or (b) five (5) Business Days after mailing, if mailed by first class certified or registered mail, postage prepaid, return receipt requested. This Section 15.3 (Notices) is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.
46
If to Licensor:
|
AskGene Pharma, Inc. 5217 Verdugo Way Unit A CA 93012 Attention: [***] |
|
|
With a copy to (which will not constitute notice): |
AskGene Pharma, Inc. 5217 Verdugo Way Unit A CA 93012 Attention: [***] [***] |
|
|
If to Visara: |
Visara, Inc. c/o I-MAB 2440 Research Boulevard, Suite 400, Rockville, MD 20850 |
|
|
|
Attention: [***] [***]
|
With a copy to (which will not constitute notice): |
Visara, Inc. |
|
c/o ABio-X Holdings, Inc. 117 Kendrick Street, Suite 400 Needham, MA 02494 Attention: [***] [***] Copy: [***] |
|
|
15.4
No Strict Construction; Headings. This Agreement has been prepared jointly and will not be strictly construed against either Party. Ambiguities, if any, in this Agreement will not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.
15.5
Rights in Bankruptcy.
(a)
All rights and licenses now or hereafter granted by Licensor to Visara under or pursuant to this Agreement, including, for the avoidance of doubt, the licenses granted to Visara pursuant to Section 2.1 (License to Visara), are, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined in the Bankruptcy
47
Code. Upon the occurrence of any Insolvency Event with respect to Licensor, Licensor agrees that Visara, as licensee of such rights under this Agreement, will retain and may fully exercise all of its rights and elections under the Bankruptcy Code. Without limiting the generality of the foregoing, Licensor and Visara intend and agree that any sale of Licensor’s assets under Section 363 of the Bankruptcy Code will be subject to Visara’s rights under Section 365(n), that Visara cannot be compelled to accept a money satisfaction of its interests in the intellectual property licensed pursuant to this Agreement, and that any such sale therefore may not be made to a purchaser “free and clear” of Visara’s rights under this Agreement and Section 365(n) without the express, contemporaneous consent of Visara. Further, each Party agrees and acknowledges that all payments by Visara to Licensor hereunder, other than the Net Sales Royalties, do not constitute royalties within the meaning of Section 365(n) of the Bankruptcy Code or relate to licenses of intellectual property hereunder. Licensor will, during the Term of this Agreement, create and maintain current copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, to the extent feasible, of all such intellectual property. Licensor and Visara acknowledge and agree that “embodiments” of intellectual property within the meaning of Section 365(n) include laboratory notebooks, cell lines, product samples and inventory, research studies and data, and Regulatory Materials and other Regulatory Approvals. If (i) a case under the Bankruptcy Code is commenced by or against Licensor, (ii) this Agreement is rejected as provided in the Bankruptcy Code, and (iii) Visara elects to retain its rights hereunder as provided in Section 365(n) of the Bankruptcy Code, then Licensor (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) will:
i.
provide to Visara all such intellectual property (including all embodiments thereof) held by Licensor and such successors and assigns, or otherwise available to them, immediately upon Visara’s written request. Whenever Licensor or any of its successors or assigns provides to Visara any of the intellectual property licensed hereunder (or any embodiment thereof) pursuant to this Section 15.5 (Rights in Bankruptcy), Visara will have the right to perform Licensor’s obligations hereunder with respect to such intellectual property, but neither such provision nor such performance by Visara will release Licensor from liability resulting from rejection of the license or the failure to perform such obligations; and
ii.
not interfere with Visara’s rights under this Agreement, or any agreement supplemental hereto, to such intellectual property (including such embodiments), including any right to obtain such intellectual property (or such embodiments) from another entity, to the extent provided in Section 365(n) of the Bankruptcy Code.
(b)
All rights, powers and remedies of Visara provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Code) in the event of the commencement of a case under the Bankruptcy Code with respect to Licensor. The Parties agree that they intend the following rights to extend to the maximum extent permitted by law, and to be enforceable under Bankruptcy Code Section 365(n):
i.
the right of access to any intellectual property (including all embodiments thereof) of Licensor, or any Third Party with whom Licensor contracts to perform an obligation of Licensor under this Agreement, and, in the case of the Third Party, which is necessary for the manufacture, use, sale, import or export of Licensed Products; and
48
ii.
the right to contract directly with any Third Party to complete the contracted work.
15.6
Compliance with Applicable Law and Regulation. Each Party will, and will cause their Affiliates, licensees, Sublicensee, contractors, subcontractors, and consultants to comply with the applicable laws and regulations, including as applicable GLP, GCP, and cGMP and any applicable anti‑corruption or anti‑bribery laws or regulations of any governmental authority with jurisdiction over the activities contemplated under this Agreement, in the course of performing its obligations or exercising its rights pursuant to this Agreement (including the Exploitation of the Licensor Technology, Licensed Antibodies, and Licensed Products). No Party will be required to take any action under this Agreement that would, on written advice of counsel, require such Party to violate such applicable law or regulation.
15.7
Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein will be deemed to encompass references to either or both genders, and the use of the singular will be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation,” (c) the word “will” will be construed to have the same meaning and effect as the word “shall,” (d) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person or entity will be construed to include the person’s or entity’s successors and assigns, (f) the words “herein,” “hereof,” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Schedules will be construed to refer to Sections or Schedules of this Agreement, and references to this Agreement include all Schedules hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and will include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree,” “consent,” or “approve” or the like will require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, (k) the term “or” will be interpreted in the inclusive sense commonly associated with the term “and/or,” (l) references to any Sections include Sections and subsections that are part of the related Section (e.g., a section numbered “Section 2.2” would be part of “Section 2”, and references to “Section 2.2” would also refer to material contained in the subsection described as “Section 2.2(a)”), and (m) unless otherwise set forth herein, 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.
15.8
Assignment. Neither Party may assign or transfer (whether by operation of applicable law or otherwise) this Agreement or any rights or obligations hereunder without the prior written consent of the other, except that a Party may make such an assignment without the other Party’s consent (but with a prior written notice to the other Party) to (a) an Affiliate or (b) a successor to substantially all of such Party’s business to which this Agreement relates, whether in a merger, sale of stock, sale of assets, reorganization, or other transaction. Any permitted successor or assignee of rights or obligations hereunder will, in a writing to the other Party, expressly assume performance of such rights or obligations (and in any event, any Party assigning this Agreement to an Affiliate will remain bound by the terms and conditions hereof). Any permitted assignment will be binding on and inure to the benefit of the successors of the assigning Party. Any assignment or
49
attempted assignment by either Party in violation of the terms of this Section 15.8 (Assignment) will be null, void and of no legal effect.
15.9
Performance by Affiliates. Each Party may perform any obligations and exercise any right hereunder through any of its Affiliates, provided that such Party will remain primarily responsible for the other Party hereunder. Each Party hereby guarantees the performance by any of its Affiliates of such Party’s obligations under this Agreement, and will cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement will be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.
15.10
Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
15.11
Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by an arbitrator or by any court of competent jurisdiction from which no appeal can be or is taken, then the provision will be considered severed from this Agreement and will not serve to invalidate any remaining provisions hereof. The Parties will make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering into this Agreement may be realized.
15.12
No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter will not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time.
15.13
Independent Contractors. Each Party will act solely as an independent contractor, and nothing in this Agreement will be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way. Nothing herein will be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.
15.14
Choice of Law. This Agreement will be governed by, and enforced and construed in accordance with, the laws of the State of New York, without regard to its conflicts of law provisions.
15.15
Counterparts. This Agreement may be executed in counterparts, all of which taken together will be regarded as one and the same instrument. Counterparts may be delivered via electronic mail, including Adobe™ Portable Document Format (PDF) or any electronic signature complying with the U.S. Federal ESIGN Act of 2000, and any counterpart so delivered will be deemed to be original signatures, will be valid and binding upon the Parties, and, upon delivery, will constitute due execution of this Agreement.
[Signature Page Follows]
50
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives as of the Execution Date.
AskGene Pharma, Inc. |
Visara, Inc. |
|
|
By: /s/ Jian-Feng Lu____________________ |
By: /s/ Sean Wuxiong Cao______________ |
Name: Jian-Feng (Jeff) Lu |
Name: Sean Wuxiong Cao |
Title: CEO |
Title: Director |
|
|
[Signature Page to Exclusive License Agreement]
IF " DOCVARIABLE "SWDocIDLocation" " = "1" "" ""
SCHEDULE 1.9
BACKUP MOLECULES
SCHEDULE 1.51
LICENSED ANTIBODY
SCHEDULE 1.58
LICENSOR PATENT RIGHTS
.
SCHEDULE 4.1
Visara Development Plan