Exhibit 3.1

 

SECOND AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT OF

 

APOGEE THERAPEUTICS, LLC

 

A Delaware Limited Liability Company

 

Dated as of November 15, 2022

 

 

ARTICLE I ORGANIZATION AND POWERS	1
1.01   Organization	1
1.02   Purpose and Powers	2
1.03   Principal Place of Business	2
1.04   Fiscal Year	2
1.05   Qualification in Other Jurisdictions	2
1.06   Tax Status	2
ARTICLE II MEMBERS; CAPITAL STRUCTURE	2
2.01   Members	2
2.02   Compliance with Securities Laws and Other Laws and Obligations	3
2.03   Meetings of the Members	3
2.04   Voting	4
2.05   Limitation of Liability of Members	4
2.06   Authority	4
2.07   No Right to Withdraw	4
2.08   Rights to Information	5
2.09   Confidential Information	7
2.10   Units	7
ARTICLE III BOARD OF MANAGERS; CERTAIN GOVERNANCE MATTERS	9
3.01   Board of Managers	9
3.02   Composition of the Board of Managers	10
3.03   No Liability for Election of Recommended Managers	11
3.04   Powers and Duties of the Managers	11
3.05   Certain Approval Rights	12
3.06   Matters Requiring Investor Manager Approval	14
3.07   Board Voting Rights; Meetings; Quorum	15
3.08   Actions of the Board of Managers	16
3.09   Reimbursement of Managers	16
3.10   Transaction with Interested Persons	17
3.11   Limitation of Liability of Managers	17
ARTICLE IV OFFICERS	18
4.01   Enumeration	18
4.02   Election	18
4.03   Qualification	18
4.04   Tenure	18
4.05   Removal	18
4.06   Vacancies	18
4.07   Chief Executive Officer	18
4.08   President	18
4.09   Treasurer and Chief Financial Officer	19
4.10   Secretary and Assistant Secretaries	19
4.11   Other Powers and Duties	19

 

 

ARTICLE V INDEMNIFICATION AND OTHER COVENANTS	19
5.01   Right to Indemnification	19
5.02   Primary Indemnification	19
5.03   Award of Indemnification	20
5.04   Successful Defense	20
5.05   Advance Payments	20
5.06   Definitions	21
5.07   Insurance	21
5.08   Successor Indemnification	21
5.09   Non-Exclusivity	21
5.10   Employee Agreements	22
5.11   Expenses of Counsel	22
5.12   Right to Conduct Activities	23
5.13   FCPA	23
5.14   Amendment; Survival	24
ARTICLE VI CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS	24
6.01   Additional Capital Contributions	24
6.02   Capital Accounts	24
ARTICLE VII ALLOCATIONS OF INCOME, ETC.	25
7.01   Allocations Generally	25
7.02   Tax Allocations	25
7.03   Special Allocations, Tax Elections and Partnership Representative	26
ARTICLE VIII DISTRIBUTIONS	27
8.01   Distributions Generally	27
8.02   Tax Distributions	29
8.03   Limitations on Distributions	30
8.04   In-Kind Distributions; Distributions of Subsidiaries	30
8.05   Tax Information	30
8.06   Adjustments for Dilutive Issues	31
8.07   Adjustment for Splits and Combinations	34
8.08   Adjustment for Certain Distributions	35
8.09   Adjustments for Other Distributions	35
8.10   Adjustment for Merger or Reorganization, Etc	35
8.11   Certificate as to Adjustments	35
8.12   Mandatory Conversion	36
ARTICLE IX TAX MATTERS AND REPORTS; ACCOUNTING	37
9.01   Tax Reports to Current and Former Members	37
9.02   Accounting Records	37
9.03   Tax Accounting Method	37
9.04   No United States Trade or Business	37
9.05   No Unrelated Business Taxable Income	37
9.06   No Commercial Activity	37
9.07   Real Property	38
9.08   No Filing Tax Returns	38

 

 

ARTICLE X RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS; CONVERSION TO CORPORATION; AND LOCK-UP	39
10.01   Transfers	39
10.02   Effective Date and Requirements of Transfer	39
10.03   Right of First Refusal	41
10.04   Right of Co-Sale	43
10.05   Effect of Failure to Comply with Right of First Refusal and Right of Co-Sale	44
10.06   Exempt Transfers	45
10.07   Drag-Along Right	45
10.08   Effect of Non-Compliance	49
10.09   Restrictions on Sales of Control of the Company	49
10.10   Substitution of Members	49
10.11   Conversion to Corporation and Registration Rights	50
10.12   Preemptive Rights	51
10.13   Lock-Up	53
ARTICLE XI DISSOLUTION, LIQUIDATION, AND TERMINATION; INCORPORATION	54
11.01   Dissolution	54
11.02   Liquidating Distributions	54
11.03   Allocation of Sale Proceeds	54
11.04   Orderly Winding Up	55
ARTICLE XII DEFINITIONS	56
12.01   Terms Defined Elsewhere in the Agreement	56
12.02   Other Definitions	61
ARTICLE XIII GENERAL PROVISIONS	67
13.01   Offset and Withholding	67
13.02   Notices	68
13.03   Entire Agreement	69
13.04   Amendment or Modification	69
13.05   Assignment	70
13.06   Binding Effect	70
13.07   Governing Law	70
13.08   Severability	70
13.09   Dispute Resolution	70
13.10   Waiver of Certain Rights	72
13.11   Interpretation	72

 

 

SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
APOGEE THERAPEUTICS, LLC

 

This Second Amended and Restated Limited Liability Company Agreement (the “Agreement”) of Apogee Therapeutics, LLC, a Delaware limited liability company (the “Company”), is made as of November 15, 2022, by and among the Company, the Persons identified as the Members on Schedule A attached hereto (each a “Member” and, collectively, the “Members”), and such other Persons who may, or have, become Members from time to time under the terms of this Agreement. Certain capitalized terms used in this Agreement are defined in Section 12.02 below.

 

WHEREAS, the Company was formed as a limited liability company under the Delaware Limited Liability Company Act (as amended from time to time, the “Act”) on February 4, 2022, by the filing of a Certificate of Formation with the office of the Secretary of State of the State of Delaware;

 

WHEREAS, certain of the Members of the Company previously entered into an Amended and Restated Limited Liability Company Agreement dated as of February 24, 2022; (as amended and in effect, the “Existing Agreement”);

 

WHEREAS, concurrently herewith, the Company is entering into a Series B Preferred Unit Purchase Agreement (as may be amended from time to time, the “Series B Purchase Agreement”) with certain purchasers of the Company’s Series B Preferred Units (the “Series B Preferred Units”); and

 

WHEREAS, the Company and the undersigned Members wish to amend and restate the Existing Agreement in accordance with the terms thereof to authorize the issuance of the Series B Preferred Units, set forth the respective rights and obligations of the Members and to provide for the governance and management of the Company and its affairs and for the conduct of the business of the Company.

 

NOW, THEREFORE, in consideration of the premises, representations and warranties and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Members hereby agree that the Existing Agreement is hereby amended and restated by this Agreement in its entirety and further agree as follows:

 

ARTICLE I
ORGANIZATION AND POWERS

 

1.01            Organization. The Company has been formed by the filing of its Certificate of Formation with the Delaware Secretary of State pursuant to the Act. The Certificate of Formation may be amended or restated with respect to the address of the registered office of the Company in Delaware, the name and address of its registered agent in Delaware or to make corrections required by the Act as provided in the Act. Other additions to or amendments of the Certificate of Formation shall be authorized by the Board of Managers of the Company (the “Board of Managers”) and the Members as provided in Sections ‎3.04 and ‎13.04. The Certificate of Formation as so amended from time to time, is referred to herein as the “Certificate.” The Board of Managers shall deliver a copy of the Certificate and this Agreement (subject to Section ‎2.08(c)), and any amendment thereto, to any Member if so requested.

 

 

1.02            Purpose and Powers. The principal business activity and purpose of the Company shall be to directly and/or indirectly through one or more subsidiaries engage in any and all activities permitted under the Act.

 

1.03            Principal Place of Business. The principal office and place of business of the Company shall initially be 2001 Market Street, Suite 2500, Philadelphia, PA 19103. The Company may locate its place of business at any other place or places as the Board of Managers may, from time to time, deem advisable.

 

1.04            Fiscal Year. Except as may otherwise be required by the federal tax laws, the fiscal year of the Company for both financial and tax reporting purposes shall end on December 31 (the “Fiscal Year”).

 

1.05            Qualification in Other Jurisdictions. The Board of Managers shall cause the Company to be qualified or registered under applicable laws of any jurisdiction in which the Company owns property or engages in activities and shall be authorized to execute, deliver and file any certificates and documents necessary to effect such qualification or registration, including, without limitation, the appointment of agents for service of process in such jurisdictions, if such qualification or registration is necessary or desirable to permit the Company to own property and engage in the Company’s business in such jurisdictions.

 

1.06            Tax Status. The Company is intended to be classified as a partnership for federal and state income tax purposes, and each Member and the Company shall file all tax returns and take all tax and financial reporting positions in a manner consistent therewith and shall otherwise take actions necessary to obtain such treatment (except as otherwise provided by Section ‎10.11 or otherwise approved by the Board of Managers). This classification for tax purposes shall not create or imply a general partnership, limited partnership or joint venture for state law or any other purpose.

 

ARTICLE II
MEMBERS; CAPITAL STRUCTURE

 

2.01            Members. The Members of the Company shall be the Persons identified on Schedule A hereto, as may be amended from time to time by the Company to reflect any Permitted Transfers and further issuances of Units that are permitted under this Agreement. The Members shall have only such rights with respect to the Company as specifically provided in this Agreement and as required by non-waivable provisions of the Act.

 

 

2.02            Compliance with Securities Laws and Other Laws and Obligations. Each Member hereby represents and warrants to the Company and acknowledges that (a) it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Company and making an informed investment decision with respect thereto, (b) it is able to bear the economic and financial risk of an investment in the Company for an indefinite period of time and understands that, except in connection with a Permitted Transfer in accordance with the applicable terms of this Agreement, the Member has no right to withdraw and/or have its Units repurchased by the Company, (c) it is acquiring Units in the Company for investment only and not with a view to, or for resale in connection with, any distribution to the public or public offering thereof, (d) unless the Member holds only Incentive Units, the Member is an “accredited investor” as defined in Rule 501 under the Securities Act of 1933, as amended (the “Securities Act”), (e) it understands that the Units in the Company have not been registered under the securities laws of any jurisdiction and cannot be disposed of unless they are subsequently registered and/or qualified under applicable securities laws, or in accordance with an applicable exemption therefrom, and the provisions of this Agreement have been complied with, and (f) the execution, delivery and performance of this Agreement does not require it to obtain any consent or approval that has not been obtained and do not contravene or result in a default under any provision of any existing law or regulation applicable to it, any provision of its charter, by-laws or other governing documents (if applicable) or any agreement or instrument to which it is a party or by which it is bound. Each Person with the right to designate or participate in the designation of a Manager as specified in Section 3.02(b) hereby represents and warrants to the Company that, to such Person’s knowledge, none of the “bad actor” disqualifying events described in Rule 506(d)(1)(i)-(viii) promulgated under the Securities Act (each, a “Disqualification Event”), is applicable to such Person’s initial designee named in Section ‎3.02(b) except, if applicable, for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable. Any Manager designee to whom any Disqualification Event is applicable, except for a Disqualification Event as to which Rule 506(d)(2)(ii) or (iii) or (d)(3) is applicable, is hereinafter referred to as a “Disqualified Designee”. Each Person with the right to designate or participate in the designation of a Manager as specified in Section ‎3.02(b) hereby covenants and agrees (A) not to designate or participate in the designation of any Manager designee who, to such Person’s knowledge, is a Disqualified Designee and (B) that in the event such Person becomes aware that any individual previously designated by any such Person is or has become a Disqualified Designee, such Person shall as promptly as practicable take such actions as are necessary to remove such Disqualified Designee from the Board of Managers and designate a replacement designee who is not a Disqualified Designee.

 

2.03            Meetings of the Members

 

(a)            The Members may hold meetings at such time and place and use such procedures as the Board of Managers may reasonably determine from time to time. Meetings of the Members may be called at any time by (i) the affirmative vote or written consent of the Requisite Preferred Holders or (ii) the consent of a majority of the Board of Managers, in either case, upon twenty-four (24) hours written or electronic mail notice to the Members entitled to vote thereon. Notice of any such meeting may be waived by any Member upon either the signing of a written waiver thereof or presence at a meeting by such Member as provided herein.

 

(b)            At any meeting of the Members, the Members representing a majority of the outstanding Preferred Units and Common Units, voting together as a single class on an As Adjusted Voting Basis, as applicable (the “Voting Majority”), shall constitute a quorum; provided, however, that where a separate vote by a class of Units is required by law or this Agreement, the Members representing a majority of the outstanding class of Units entitled to vote at such meeting shall constitute a quorum. Less than a quorum may adjourn any meeting from time to time and the meeting may be held as adjourned without further notice upon reaching a quorum.

 

 

(c)            Any action required or permitted to be taken at any meeting of the Members may be taken without a meeting and without any notice to the Members upon the written consent of the requisite percentage of the class or classes of the Members entitled to vote on such matter. The Secretary of the Company shall provide prompt written notice to the other Members who, if the action had been taken at a meeting of the Members, would have been entitled to notice of the meeting pursuant to Section 2.03‎(a), of any action so taken.

 

2.04            Voting. Without limiting any other consent or approval required by this Agreement or non-waivable provisions of the Act, holders of Preferred Units shall vote together with the holders of Common Units as a single class on an As Adjusted Voting Basis, as applicable; provided, however, that where a separate vote by a class of Units is required by law or this Agreement, the Members representing a majority of the outstanding class of Units entitled to such vote shall be required. Unless otherwise provided by the Act, the Incentive Units shall not carry the right to vote on any matter under this Agreement or under the Act, including without limitation, with respect to any amendment or restatement of this Agreement or the merger, consolidation, conversion or dissolution of the Company. Any action to be taken by the Members shall require the approval of the Voting Majority, unless a different threshold is specifically required by the Act or this Agreement.

 

2.05            Limitation of Liability of Members. Except as otherwise provided in the Act, no Member shall be obligated personally for any debt, obligation or liability of the Company, its subsidiaries or other Members, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company. Except as otherwise provided in the Act or expressly in this Agreement or by another writing signed by a Member, such Member shall have no fiduciary or other duty with respect to the business and affairs of the Company, and such Member shall not be liable to the Company for acting in good faith reliance upon the provisions of this Agreement. No Member shall have any obligation to contribute to, or in respect of, the liabilities or obligations of the Company or return distributions made by the Company except as required by the Act or other applicable law. The failure of the Company to observe any formalities or requirements relating to the exercise of its powers or the management of its business or affairs under this Agreement or the Act shall not be grounds for making its Members responsible for the liabilities of the Company.

 

2.06            Authority. Unless specifically authorized by this Agreement or by the Board of Managers, no Member shall be an agent of the Company or have any right, power or authority to act for or to bind the Company, or to undertake or assume any obligation or responsibility of the Company or any other Member.

 

2.07            No Right to Withdraw. Except in connection with a Permitted Transfer in accordance with the applicable terms of this Agreement, no Member shall have any right to resign or withdraw from the Company without the consent of the Board of Managers. No Member shall have any right to receive any distribution or the repayment of its Capital Contribution, except as provided in ARTICLE VIII, upon dissolution and liquidation of the Company. No interest or other compensation shall be paid on or with respect to the Capital Contribution of any of the Members, except as expressly provided herein or authorized by the Board of Managers. No Member shall have any right to have the fair value of its interest in the Company appraised and paid out upon its resignation or withdrawal.

 

 

2.08            Rights to Information.

 

(a)            Financial Statements. The Company shall deliver to each Major Investor, provided that the Board of Managers has not reasonably determined that such Major Investor is (or, in the case of a Major Investor that is an individual, is employed by or serves as a consultant to) a competitor of the Company:

 

(i)            as soon as practicable, but in any event within one hundred twenty (120) days after the end of each Fiscal Year, (i) statements of income and of cash flows for such Fiscal Year, (ii) a statement of members’ equity as of the end of such Fiscal Year and (iii) a balance sheet as of the end of such Fiscal Year, in each case, prepared in accordance with GAAP, with all such financial statements to be audited and certified by independent public accountants of nationally recognized standing selected by the Company commencing with Fiscal Year ending December 31, 2023;

 

(ii)           as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each Fiscal Year, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);

 

(iii)          as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each Fiscal Year, a statement showing the number of Units, broken down by class, and securities convertible into or exercisable for Units, in each case, outstanding at the end of the quarter, the Units issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Units and the exchange ratio or exercise price applicable thereto, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company;

 

(iv)          as soon as practicable, but in any event within thirty (30) days after the beginning of each Fiscal Year, a budget for such Fiscal Year (collectively, the “Budget”), approved by the Board of Managers and prepared on a quarterly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company; and

 

(v)           such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Major Investor may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Section 2.08(v) to provide information (i) that the Company reasonably determines in good faith to be a Trade Secret or similar confidential information of unusual sensitivity (unless covered by an enforceable confidentiality agreement, in a form acceptable to the Company); or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing subsections of this Section ‎2.08 shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Section ‎2.08‎(a) to the contrary, the Company may cease providing the information set forth in this Section ‎2.08‎(a) during the period starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the Securities and Exchange Commission’s rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section ‎2.08‎(a) shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

All financial statements and other information to be delivered a Major Investor pursuant to this Section 2.08(a) shall be furnished in a form and manner reasonably acceptable to such Major Investor (including to any particular email address or website specified by such Major Investor).

 

(b)            Other Information Requests. The Company shall permit each Major Investor (provided that the Board of Managers has not reasonably determined that such Major Investor is, or, in the case of a Major Investor that is an individual, is employed by or serves as a consultant to, a competitor of the Company), at such Major Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with the Officers, during normal business hours of the Company as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section ‎2.08‎(b) to provide access to any information that it reasonably and in good faith (x) considers to be a Trade Secret or similar confidential information of unusual sensitivity (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or (y) believes the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

(c)            Confidentiality of Certain Information. Each Member other than the Paragon Members and the Preferred Members acknowledges and agrees that the contents of Schedule A are confidential and that the Board of Managers shall be entitled, in its sole discretion, to restrict access to some or all of Schedule A to such Member; provided, that each Member shall be entitled to receive (i) all information regarding such Member on Schedule A and (ii) the total number of each series or class of Units outstanding. Notwithstanding anything to the contrary herein, no Member other than the Paragon Members and the Preferred Members shall be entitled to any information from or about the Company, other than the information required to be reported on such Member’s federal Schedule K-1 and any equivalent state and local income tax information forms.

 

 

(d)            Termination. The covenants set forth in this Section ‎2.08 shall terminate and be of no further force or effect (i) immediately before the consummation of an IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Change of Control, dissolution or liquidation of the Company, whichever event occurs first.

 

2.09            Confidential Information. Each Member agrees that such Member will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any Trade Secrets or confidential information obtained from the Company (which for purposes of this Section ‎2.09, shall include the Company’s Affiliates) or otherwise relating to the Company (including notice of the Company’s intention to file a registration statement under the Securities Act), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Section ‎2.09 by such Member), (b) is or has been independently developed or conceived by such Member without use of the Company’s confidential information, or (c) is or has been made known or disclosed to such Member by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that a Member may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Units from such Member except any Prohibited Transferee, if such prospective purchaser agrees to be bound by the provisions of this Section ‎2.09; (iii) to any existing or prospective Affiliate, general or limited partner, member, stockholder, or wholly owned subsidiary of such Member in the ordinary course of business, provided that such Member informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; (iv) to the extent required in connection with any examination, demand, request or similar action by any regulatory or self-regulatory body or authority, provided that in the case of this clause (iv) such Member takes reasonable steps to minimize the extent of any such required disclosure; (v) in the case of any Member that is (A) a registered investment company within the meaning of the Investment Company Act of 1940, as amended, or (B) is advised by a registered investment adviser or Affiliates thereof, relating to the existence of such Member’s investment in the Company and the value of such Member’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies; or (vi) as may otherwise be required by law, provided that in the case of this clause (vi) such Member promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

2.10            Units.

 

(a)            All interests of Members in distributions and other amounts specified herein shall be represented by their units of membership interests in the Company (each a “Unit” and, collectively, the “Units”). No fractional Units shall be issued. The Units shall be evidenced by an electronic book entry system (provided, however, that with respect to any Member that is (A) a registered investment company within the meaning of the Investment Company Act of 1940, as amended, or (B) is advised by a registered investment adviser or Affiliates thereof, upon the request of such Member, Units held by such Member may be certificated). There shall be four (4) classes of Units: “Series A Preferred Units”, “Series B Preferred Units”, “Common Units” and “Incentive Units.” Except as otherwise provided herein, on any matter to be approved by the Members, (i) each Common Unit shall carry the right to cast one (1) vote per Common Unit, (ii) each Series A Preferred Unit shall carry the right to cast the number of votes equal to the Series A Adjustment Ratio for the Series A Preferred Units (the result of such calculation, the “Series A As Adjusted Voting Basis”) and (iii) each Series B Preferred Unit shall carry the right to cast the number of votes equal to the Series B Adjustment Ratio for the Series B Preferred Units (the result of such calculation, the “Series B As Adjusted Voting Basis”) that is in effect as of the record date for determining Members entitled to vote on such matter. For illustrative purposes only, (i) if the Series A Adjustment Price for the Series A Preferred Units is $0.50 as of the record date for determining Members entitled to vote on a matter, each Series A Preferred Unit shall be entitled to two (2) votes (the quotient obtained by dividing the Series A Original Issuance Price ($1.00) by such Series A Adjustment Price) or (ii) if the Series B Adjustment Price for the Series B Preferred Units is $3.30456 as of the record date for determining Members entitled to vote on a matter, each Series B Preferred Unit shall be entitled to one (1) vote (the quotient obtained by dividing the Series B Original Issuance Price ($3.30456) by such Series B Adjustment Price).

 

 

(b)            The Units shall have the respective rights, preferences, privileges and restrictions set forth in this Agreement.

 

(c)            The Company is authorized to issue from time to time up to an aggregate of 82,501,685 Units, as follows: (i) up to 5,000,000 Common Units, (ii) up to 20,000,000 Series A Preferred Units, (iii) up to 45,089,212 Series B Preferred Units and (iv) up to 12,412,473 Incentive Units. Each authorized Unit may be issued pursuant to such agreements as the Board of Managers or committee thereof shall approve; provided, that the Series B Preferred Units may only be issued pursuant to the Series B Purchase Agreement.

 

(d)            The Board of Managers may, subject to Sections ‎3.04 and ‎10.10, authorize the Company to create and, for such consideration as the Board of Managers may deem appropriate, issue Units or additional classes or series of Units, having such designations, preferences and relative, participating or other special rights, powers and duties, as the Board of Managers shall determine, including, without limitation: (i) the right of any such class or series of Units to share in Proceeds Available for Distribution; (ii) the allocation to any such class or series of Units of items of Company income, gains, losses and deductions; (iii) the rights of any such class or series of Units upon dissolution or liquidation of the Company; and (iv) the right of any such class or series of Units to vote on matters relating to the Company and this Agreement.

 

(e)            The Board of Managers may issue Incentive Units to employees or Managers of, or consultants or advisors to, the Company or any of its subsidiaries pursuant to a plan, agreement or arrangement (and any amendments thereto) approved by the Board of Managers. Incentive Units may be issued subject to vesting, reverse vesting, forfeiture and repurchase pursuant to separate agreements, the provisions of which may be determined, altered or waived in the sole discretion of the Board of Managers. Unless otherwise approved by the Board of Managers, all Incentive Units issued after the date hereof shall vest over a four (4) year period, with the first twenty-five percent (25%) of such Incentive Units vesting on the twelve (12) month anniversary of the vesting start date and the remaining Incentive Units vesting in equal quarterly installments over the following thirty-six (36) months.

 

 

(f)            In connection with the issuance of Incentive Units, the Board of Managers shall set a strike price with respect to such Incentive Units on a per Incentive Unit basis (the “Strike Price”). The Strike Price with respect to each such Incentive Unit will be determined by the Board of Managers and will be at least equal to the amount that would be distributed in respect of a Common Unit (which for the avoidance of doubt, is not subject to a Strike Price) in a hypothetical liquidation of the Company on the date of issuance of such Incentive Unit in which the Company sold its assets for their Fair Market Value, satisfied its liabilities (excluding any non-recourse liabilities to the extent the balance of such liabilities exceeds the Fair Market Value of the assets that secure them) and distributed the net proceeds to the holders of Units in liquidation of the Company. The Board of Managers may adjust the Strike Price as appropriate (i) to reflect the consideration, if any, paid in connection with any issuance of Incentive Units, (ii) to reflect an increase to the Fair Market Value of the Company’s assets that is attributable to Capital Contributions made to the Company in respect of other Units and (iii) when and as permitted pursuant to any award agreement. The determination of the Board of Managers of the Strike Price shall be final, conclusive and binding on all Members. In the event the Board of Managers issues additional Incentive Units with a Strike Price lower than the Strike Price associated with a prior issuance of Incentive Units, the Board of Managers may, in its sole discretion, reduce the Strike Price of the Incentive Units issued at the higher Strike Price.

 

(g)            Each Incentive Unit that has an associated Strike Price is intended to be a “profits interest” within the meaning of IRS Revenue Procedures 93-27 and 2001-43 and is issued with the intention that under current interpretations of the Code the recipient will not recognize income upon the issuance of such Incentive Unit, and that neither the Company nor any Member is entitled to any deduction either immediately or through depreciation or amortization as a result of the issuance of such Incentive Unit. Any Person holding a Unit subject to a vesting arrangement or other “substantial risk of forfeiture” shall make a timely Code Section 83(b) election in accordance with Treasury Regulation 1.83-2 with respect to each such Unit (to the extent applicable).

 

(h)            No Person shall be admitted as a new Member of the Company unless and until the Board of Managers has approved the admission of such Person as a new Member and such Person has executed this Agreement or a joinder or counterpart signature page hereto and such other documents or agreements as the Board of Managers may request reasonably in connection with such admission.

 

ARTICLE III
BOARD OF MANAGERS; CERTAIN GOVERNANCE MATTERS

 

3.01            Board of Managers. The business of the Company shall be managed by a Board of Managers who may exercise all the powers of the Company, except as otherwise provided by law or by this Agreement, and by any committees that the Board of Managers may from time to time establish. In the event of a vacancy in the Board of Managers, the remaining Managers, except as otherwise provided by law and subject to the rights of Members to elect Managers pursuant to Section ‎3.02‎(b), may exercise the powers of the full Board of Managers until the vacancy is filled.

 

 

3.02            Composition of the Board of Managers.

 

(a)            The Board of Managers shall consist of one or more members. The number of Managers shall initially be five (5) and, subject to Section ‎3.05, may be increased or decreased by the Board of Managers with the affirmative vote or written consent of the Requisite Preferred Holders.

 

(b)            From and after the date of this Agreement, the Board of Managers shall be appointed as follows:

 

(i)            Two (2) individuals designated from time to time by the Venrock Members (together, the “Venrock Manager(s)”), for so long as such Members and their Affiliates continue to beneficially own any Preferred Units, which individuals shall initially be Nimish Shah and Andrew Gottesdiener; and

 

(ii)           Two (2) individuals designated from time to time by the Fairmount Members (together, the “Fairmount Manager(s)”), for so long as such Members and their Affiliates continue to beneficially own any Preferred Units, which individuals shall initially be Peter Harwin and Tomas Kiselak; and

 

(iii)          the Company’s Chief Executive Officer, who shall initially be Michael Henderson (the “CEO Manager”), provided that if for any reason the CEO Manager shall cease to serve as the Chief Executive Officer of the Company, each of the Preferred Members shall promptly vote their respective Units (i) to remove the former Chief Executive Officer of the Company from the Board of Mangers if such person has not resigned as a member of the Board of Managers; and (ii) to elect such person’s replacement as Chief Executive Officer of the Company as the new CEO Manager.

 

(c)            In the absence of any designation from the Members with the right to designate a Manager as specified above, the Manager previously designated by them and then serving shall be reelected if still eligible to serve as provided herein and if there is no such manager previously designated by them and then serving, such seat shall remain vacant until such time as such Manager is designated.

 

(d)            No Manager elected pursuant to Section ‎3.02‎(b) may be removed from office other than for cause unless (i) such removal is directed or approved by the Person(s) or the affirmative vote or written consent of the holders of the requisite number of Units entitled under Section ‎3.02‎(b) to designate or approve that Manager or (ii) the Person(s) originally entitled to designate or approve such Manager pursuant to Section ‎3.02‎(b) is no longer entitled to designate or approve such Manager.

 

(e)            Except as otherwise provided by law or by this Agreement, Managers shall hold office until their successors are elected and duly qualified or until their earlier death, disability, resignation or removal. Any Manager may resign by delivering his or her written resignation to the Company. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Any vacancies created by the resignation, removal or death of a Manager elected pursuant to clause (b) above shall be filled pursuant to the provisions of this Section ‎3.02.

 

 

(f)            For so long as Deep Track and its Affiliates continue to beneficially own at least twenty five percent (25%) of the Series B Preferred Units issued to Deep Track or its Affiliates at the Closing (as defined in the Series B Purchase Agreement) (as adjusted for any unit split, combination, or other recapitalization or reclassification effected after the date hereof), Deep Track shall have the right, but not the obligation, to designate one (1) individual as a non-voting observer (any such individual, the “Deep Track Board Observer”) to attend each meeting of the Board of Managers or committee thereof. For so long as RTW continues to beneficially own at least twenty five percent (25%) of the Series B Preferred Units issued to RTW at the Closing (as adjusted for any unit split, combination, or other recapitalization or reclassification effect after the date hereof), RTW shall have the right, but not the obligation, to designate one (1) individual as a non-voting observer (any such individual, the “RTW Board Observer” and together with the Deep Track Board Observer, the “Board Observers”) to attend each meeting of the Board of Managers. The Board Observers shall be given (at the same time as the Managers) notice of all such meetings and all agendas, minutes and other papers relating to those meetings pursuant to Section ‎3.07(c); provided that the Company reserves the right to exclude any such Board Observer from access to any material or meeting or portion thereof if (i) the Board of Managers believes that such exclusion is reasonably necessary to preserve the attorney-client privilege between the Company and its counsel, or (ii) access to such information or attendance at such meeting, as determined by the Board of Managers, would result in a direct conflict of interest with the applicable Board Observer or any Affiliate of such Board Observer. For the avoidance of doubt, the Board Observers shall not have voting rights but shall be, and by becoming a Board Observer is, bound by the same confidentiality obligations as the Managers (and a Board Observer may be required to enter into a confidentiality agreement upon the request of the Board of Managers). Deep Track and RTW shall each have the right to remove and/or replace its respective Board Observer at any time and from time to time.

 

3.03            No Liability for Election of Recommended Managers. No Member, nor any Affiliate of any Member, shall have any liability as a result of designating a person for election as a Manager for any act or omission by such designated person in his or her capacity as a Manager of the Company.

 

3.04            Powers and Duties of the Managers. Subject in all cases to the provisions of Sections ‎3.05 and ‎3.06, and subject to any applicable consents that must be obtained thereunder or otherwise under this Agreement or law, the Board of Managers shall have and may exercise on behalf of the Company all of its rights, powers, duties and responsibilities under Section ‎1.02 or as otherwise provided by law or this Agreement, including without limitation the right and authority:

 

(a)            to manage the business and affairs of the Company and its subsidiaries and for this purpose to employ, retain or appoint any officers, employees, consultants, agents, brokers, professionals or other Persons in any capacity with the Company or its subsidiaries for such compensation and on such terms as the Board of Managers deems necessary or desirable and to delegate to such Persons such of its duties and responsibilities as the Board of Managers shall determine, and to remove such Persons or revoke their delegated authority on such terms or under such conditions as the Board of Managers shall determine;

 

 

(b)            to form, manage, dissolve and make capital contributions to any subsidiaries of the Company;

 

(c)            to merge or consolidate the Company or any of its subsidiaries with or into any other entity or otherwise effect the sale of the Company and its business;

 

(d)            to acquire or invest in other entities or businesses directly or indirectly through one or more subsidiaries;

 

(e)            to enter into, execute, deliver, acknowledge, make, modify, supplement or amend any documents or instruments in the name of the Company;

 

(f)             to borrow money or otherwise obtain credit and other financial accommodations on behalf of the Company or any of its subsidiaries on a secured or unsecured basis and to perform or cause to be performed all of the Company’s obligations in respect of its indebtedness or guarantees and any mortgage, lien or security interest securing such indebtedness;

 

(g)            to issue authorized but unissued Units or other rights or other interests in the Company and to designate additional classes of interest in the Company as provided in Section ‎2.10; and

 

(h)            to designate one Person (as appointed by the Board of Managers) to serve as the “Partnership Representative” of the Company for purposes of Section 6223 of the Code and any similar provisions of state or local laws (the “Partnership Representative”), which shall initially be Michael Henderson, and the “designated individual” within the meaning of Treasury Regulations Section 301.6223-1, in each case, with power to manage and represent the Company in any administrative proceeding of the Internal Revenue Service.

 

3.05            Certain Approval Rights.

 

(a)            Requisite Preferred Holders Approval Rights. Notwithstanding anything contained in this Agreement to the contrary, including Section ‎3.04, for as long as any of the Preferred Units remain outstanding, the Company shall not and shall not permit any subsidiary to (either directly or by amendment, merger, consolidation, conversion or otherwise) without first having obtained the affirmative vote or written consent of the Requisite Preferred Holders:

 

(i)            liquidate, dissolve or wind-up the business and affairs of the Company, effect a Change of Control or be party to or take any act to facilitate a Sale of the Company, or consent to any of the foregoing;

 

(ii)           permit any direct or indirect subsidiary to sell, lease, transfer, exclusively license or otherwise dispose (in a single transaction or series of related transactions) of all or substantially all of the equity or assets of such subsidiary (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions);

 

 

(iii)          except as provided for in this Agreement, redeem or purchase any Units; provided, however, that this restriction shall not apply to the repurchase of Units from employees, Officers, Managers, consultants or other persons performing services for the Company pursuant to agreements under which the Company has the option to repurchase such Units at the lower of (A) Fair Market Value of such Units or (B) the original purchase price of such Units, in each case, upon the occurrence of certain events, such as the termination of employment or service, or pursuant to a right of first refusal;

 

(iv)         except as required under this Agreement, pay any distribution on any Units;

 

(v)           incur any indebtedness for money borrowed in excess of $1,000,000;

 

(vi)          create, or hold equity interests in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by the Company (except as approved by the Board of Managers), or permit any subsidiary to create, or authorize the creation of, or issue or obligate itself to issue, any equity interests (except as approved by the Board of Managers); or

 

(vii)         enter into any agreement or otherwise obligate the Company or any subsidiary to do any of the foregoing.

 

(b)            Requisite Series A Preferred Holders Approval Rights. Notwithstanding anything contained in this Agreement to the contrary, including Section ‎3.04, for as long as any of the Series A Preferred Units remain outstanding, the Company shall not and shall not permit any subsidiary to (either directly or by amendment, merger, consolidation, conversion or otherwise) without first having obtained the affirmative vote or written consent of the Requisite Series A Preferred Holders:

 

(i)            (A) reclassify, alter or amend any existing security of the Company that is pari passu with the Series A Preferred Units in respect of the distribution of assets on the liquidation, dissolution or winding up of the Company, if such reclassification, alteration or amendment would render such other security senior to the Series A Preferred Units in respect of any such right, preference or privilege, or (B) reclassify, alter or amend any existing security of the Company that is junior to the Series A Preferred Units in respect of the distribution of assets on the liquidation, dissolution or winding up of the Company, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series A Preferred Units in respect of any such right, preference or privilege;

 

(ii)           create, or authorize the creation of, or issue or obligate itself to issue, any new class or series of Units, or increase or decrease the authorized number of Series A Preferred Units or increase the authorized number of any other class of Units;

 

(iii)          alter or change the powers, preferences, privileges or rights of the Series A Preferred Units; or

 

 

(iv)          enter into any agreement or otherwise obligate the Company or any subsidiary to do any of the foregoing.

 

(c)            Requisite Series B Preferred Holders Approval Rights. Notwithstanding anything contained in this Agreement to the contrary, including Section ‎3.04, for as long as any of the Series B Preferred Units remain outstanding, the Company shall not and shall not permit any subsidiary to (either directly or by amendment, merger, consolidation, conversion or otherwise) without first having obtained the affirmative vote or written consent of the Requisite Series B Preferred Holders:

 

(i)            effect a Change of Control or a Sale of the Company in which the value of the upfront, non-contingent (but including any proceeds subject to escrow or holdback) proceeds payable per Series B Preferred Unit to the holders of Series B Preferred Units upon the consummation of such Change of Control or Sale of the Company would be less than one and a half (1.5) times the Series B Original Issuance Price;

 

(ii)            (A) reclassify, alter or amend any existing security of the Company that is pari passu with the Series B Preferred Units in respect of the distribution of assets on the liquidation, dissolution or winding up of the Company, if such reclassification, alteration or amendment would render such other security senior to the Series B Preferred Units in respect of any such right, preference or privilege, or (B) reclassify, alter or amend any existing security of the Company that is junior to the Series B Preferred Units in respect of the distribution of assets on the liquidation, dissolution or winding up of the Company, if such reclassification, alteration or amendment would render such other security senior to or pari passu with the Series B Preferred Units in respect of any such right, preference or privilege;

 

(iii)          create, or authorize the creation of, or issue or obligate itself to issue, any new class or series of Units, or increase or decrease the authorized number of Series B Preferred Units or increase the authorized number of any other class of Units;

 

(iv)          alter or change the powers, preferences, privileges or rights of the Series B Preferred Units; or

 

(v)          enter into any agreement or otherwise obligate the Company or any subsidiary to do any of the foregoing.

 

3.06            Matters Requiring Investor Manager Approval. The Company hereby covenants and agrees with the Members that it shall not, nor shall it permit any subsidiary to, without approval of the Board of Managers, which approval must include the affirmative vote of at least one (1) Venrock Manager and at least one (1) Fairmount Manager:

 

(a)            make any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned (directly or indirectly) by the Company;

 

 

(b)            make any loan or advance to any Person, including, without limitation, any employee or manager of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an equity incentive plan approved by the Board of Managers;

 

(c)            guarantee, directly or indirectly, any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;

 

(d)            make any investment inconsistent with any investment policy approved by the Board of Managers;

 

(e)            incur any aggregate indebtedness in excess of $1,000,000 that is not already included in a budget approved by the Board of Managers, other than trade credit and equipment financing incurred in the ordinary course of business;

 

(f)             otherwise enter into or be a party to any transaction with any manager, officer, or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, except for transactions contemplated by this Agreement and the Purchase Agreement, transactions resulting in payments to or by the Company in an aggregate amount less than $50,000 per year, or transactions made in the ordinary course of business and pursuant to reasonable requirements of the Company’s business and upon fair and reasonable terms that are approved by a majority of the Board of Managers;

 

(g)            hire, terminate, or change the compensation of the executive officers, including approving any equity awards to executive officers;

 

(h)            change the principal business of the Company, enter new lines of business, or exit the current line of business;

 

(i)             sell, assign, license, pledge, or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business;

 

(j)             increase the number of authorized Incentive Units; or

 

(k)            enter into any corporate strategic relationship involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater than $50,000.

 

3.07            Board Voting Rights; Meetings; Quorum.

 

(a)            Each Manager shall be entitled to one (1) vote with respect to any matter before the Board of Managers or any committee thereof.

 

(b)            Regularly scheduled meetings of the Board of Managers may be held without notice at such time, date and place as any one (1) Manager may from time to time determine. Unless otherwise determined by the vote of a majority of the Managers then in office, the Board of Managers shall meet at least quarterly in accordance with an agreed-upon schedule. Special meetings of the Board of Managers may be called, in person, in writing or by means of electronic communication, by at least one (1) of the Managers, designating the time, date and place thereof. Managers may participate in meetings of the Board of Managers by means of telephone conference or similar communications equipment by means of which all Managers participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting. No Manager may delegate its rights and obligations to participate in and vote at any meeting of the Board of Managers.

 

 

(c)            Notice of the time, date and place of all special meetings of the Board of Managers shall be given to each Manager by the Secretary or Assistant Secretary, or in case of the death, absence, incapacity or refusal of such Persons, by the Officer or one of the Managers calling the meeting. Notice shall be given to each Manager in person or by facsimile or electronic mail sent to his or her business or home address at least twenty-four (24) hours in advance of the meeting, or by written notice mailed to his or her business or home address at least seventy-two (72) hours in advance of the meeting. Notice need not be given to any Manager if a written waiver of notice is executed by him before or after the meeting, or if communication with such Manager is unlawful. The attendance of a Manager at a meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business, because such meeting is not lawfully called or convened. A notice or waiver of notice of a meeting of the Board of Managers need not specify the purposes of the meeting.

 

(d)            At any meeting of the Board of Managers, a majority of the Board of Managers then in office, which majority shall include at least one Venrock Manager and one Fairmount Manager, shall constitute a quorum. Less than a quorum may adjourn any meeting from time to time and the meeting may be held as adjourned without further notice upon reaching a quorum.

 

3.08            Actions of the Board of Managers.

 

(a)            At any meeting of the Board of Managers at which a quorum is present, a majority of the Managers present may take any action on behalf of the Board of Managers, unless a larger number is required by law or by this Agreement.

 

(b)            Any action required or permitted to be taken at any meeting of the Board of Managers may be taken without a meeting if a written consent thereto is signed (including by means of an authorized electronic, stamped or other facsimile signature) by all of the Managers then in office and filed with the records of the meetings of the Board of Managers. Such consent shall be treated as a vote of the Board of Managers for all purposes.

 

3.09            Reimbursement of Managers. The Company shall promptly reimburse in full each non-employee Manager for all such Manager’s reasonable out-of-pocket expenses incurred in connection with attending any meeting of the Board of Managers or a committee thereof or any board of managers or committee thereof of a subsidiary of the Company for each Manager with respect to service on the Board of Managers. The Company shall cause to be established, as soon as practicable after such request, and will maintain, an audit and compensation committee. Each committee of the Board of Managers shall include a Fairmount Manager and a Venrock Manager unless the Fairmount Managers or the Venrock Managers otherwise notifies the Company in writing.

 

 

3.10            Transaction with Interested Persons.

 

(a)            Unless entered into in bad faith, no commercial contract or transaction entered into on arms-length terms between the Company or any of its subsidiaries and one of its or their Managers, Officers or Members, or between the Company or any of its subsidiaries and any other Person in which one or more of its or any of its subsidiaries’ Managers, Officers or Members have a financial interest or are directors, partners, members, stockholders, officers or employees, shall be voidable solely for this reason or solely because said Member, Manager or Officer was present or participated in the authorization of such contract or transaction if: (i) the material facts as to the relationship or interest of said Person and as to the contract or transaction were disclosed or known to the Board of Managers and the contract or transaction was authorized by a majority of the votes held by disinterested members of the Board of Managers (if any); or (ii) the contract or transaction was approved by the affirmative vote or written consent of the Requisite Preferred Holders. Subject to compliance with the provisions of this Section ‎3.10, no Member, Manager or Officer interested in such contract or transaction, because of such interest, shall be considered to be in breach of this Agreement or liable to the Company, any other Member, Manager or other Person for any loss or expense incurred by reason of such contract or transaction or shall be accountable for any gain or profit realized from such contract or transaction.

 

(b)            The Company hereby renounces, to the fullest extent permitted by the Act and applicable law, any interest or expectancy of the Company in, or in being offered, an opportunity to participate in, any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any Manager who is not an employee or consultant of the Company or any of its subsidiaries, or (ii) any holder of Units or any partner, member, director, stockholder, officer, employee or agent of any such holder, other than someone who is an employee of the Company or any of its subsidiaries (collectively, “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a Manager (each of (i) and (ii), an “Investor Business Opportunity”). To the fullest extent permitted by law, and solely in connection therewith, the Company hereby waives any claim against a Covered Person, and agrees to indemnify all Covered Persons against any claim, that is based on fiduciary duties, the corporate opportunity doctrine or any other legal theory which could limit any Covered Person from pursuing or engaging in any Investor Business Opportunity.

 

3.11            Limitation of Liability of Managers. No Manager shall be obligated personally for any debt, obligation or liability of the Company or of any Member, whether arising in contract, tort or otherwise, by reason of being or acting as Manager of the Company. No Manager shall be personally liable to the Company or its Members for any action undertaken or omitted in good faith reliance upon the provisions of this Agreement unless the acts or omissions of the Manager were not in good faith or involved gross negligence or intentional misconduct; provided, that, subject to this Section ‎3.11, each Manager shall owe, and shall act in a manner consistent with fiduciary duties to the Company and its Members of the nature, and to the same extent, as those owed by Managers of a Delaware corporation to such corporation and its stockholders. Any Person alleging any act or omission as not taken or omitted in good faith shall have the burden of proving by a preponderance of the evidence the absence of good faith.

 

 

ARTICLE IV
OFFICERS

 

4.01            Enumeration. Except as otherwise provided herein, the Board of Managers may delegate its powers to act on behalf of the Company to officers of the Company (each, an “Officer” and, collectively, the “Officers”), which may consist of a President (the “President”), Chief Executive Officer (the “CEO”), Treasurer (the “Treasurer”), Secretary (the “Secretary”), and such other Officers, including one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries, as the Board of Managers may determine. Michael Henderson is hereby designated as the President, Chief Executive Officer, Treasurer and Secretary of the Company.

 

4.02            Election. The President, CEO, Treasurer and Secretary may be elected by the Managers at any meeting.

 

4.03            Qualification. No Officer need be a Member or Manager. Any two (2) or more offices may be held by the same Person.

 

4.04            Tenure. Except as otherwise provided by the Act or by this Agreement, each of the Officers shall hold office until his or her successor is elected or until his or her earlier resignation or removal. Any Officer may resign by delivering his or her written resignation to the Company, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

 

4.05            Removal. The Board of Managers may remove any Officer with or without cause.

 

4.06            Vacancies. Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Managers.

 

4.07            Chief Executive Officer. The CEO shall, subject to the direction of the Board of Managers, have general supervision and control of the Company’s business. Unless otherwise provided by the Board of Managers, he or she shall preside, when present, at all meetings of the Members. Any action taken by the CEO, and the signature of the CEO on any agreement, contract, instrument or other document on behalf of the Company shall, with respect to any third party, be sufficient to bind the Company and shall conclusively evidence the authority of the CEO and the Company with respect thereto.

 

4.08            President. The President shall, subject to the direction of the Board of Managers and the CEO, have general supervision and control of the Company’s business. Any action taken by the President, and the signature of the President on any agreement, contract, instrument or other document on behalf of the Company shall, with respect to any third party, be sufficient to bind the Company and shall conclusively evidence the authority of the President and the Company with respect thereto.

 

 

4.09            Treasurer and Chief Financial Officer. The Treasurer and Chief Financial Officer shall, subject to the direction of the Board of Managers, have general charge of the financial affairs of the Company and shall cause to be kept accurate books of account. He or she shall have custody of all funds, securities, and valuable documents of the Company, except as the Board of Managers may otherwise provide.

 

4.10            Secretary and Assistant Secretaries. The Secretary shall record all the proceedings of the meetings of the Board of Managers (including committees thereof) in books kept for that purpose. In his or her absence from any such meeting an Assistant Secretary, or if there be none or he or she is absent, a temporary secretary chosen at the meeting, shall record the proceedings thereof. The Secretary shall have such other duties and powers as may be designated from time to time by the Board of Managers, the President or the CEO.

 

4.11            Other Powers and Duties. Subject to this Agreement, each Officer shall have, in addition to the duties and powers specifically set forth in this Agreement, such duties and powers as are customarily incident to his or her office, and such duties and powers as may be designated from time to time by the Board of Managers.

 

ARTICLE V
INDEMNIFICATION AND OTHER COVENANTS

 

5.01            Right to Indemnification. Subject to the provisions of this ‎ARTICLE V, the Company shall indemnify, to the fullest extent that would have been permissible under the Delaware General Corporation Law (as amended, the “DGCL”) if the Company were a corporation organized and existing under the DGCL, all Indemnified Persons against all Expenses incurred by the Indemnified Persons in connection with any Proceeding in which an Indemnified Person is involved as a result of serving in the capacity by reason of which such Person is deemed to be an “Indemnified Person” pursuant to Section ‎5.06(a). Subject to the foregoing limitation, such indemnification shall be provided by the Company with respect to a Proceeding in which it is claimed that the Indemnified Person received an improper personal benefit by reason of his position, regardless of whether the claim arises out of the Indemnified Person’s service in such capacity, except for matters as to which it is finally judicially determined that an improper personal benefit was received by the Indemnified Person.

 

5.02            Primary Indemnification. Each Member acknowledges that each Indemnified Person may have certain rights to indemnification, advancement of Expenses or insurance available to such Indemnified Person pursuant to other agreements or arrangements with one or more third parties, including, without limitation, a Member or its Affiliates (collectively, “Other Indemnitors”). The Company shall be the indemnitor of first resort (i.e., its obligations to an Indemnified Person are primary and any obligation of any Other Indemnitor to advance Expenses or to provide indemnification for the same Expenses or liabilities incurred by an Indemnified Person are secondary) in connection with any claims or losses arising from any matter referred to in this ‎ARTICLE V in which an Indemnified Person may be involved or threatened to be involved, as a party or otherwise, arising out of or incident to the business or operations of the Company or any of its subsidiaries. The Company shall advance the full amount of Expenses incurred by an Indemnified Person and shall be liable for the full amount of all such losses to the extent legally permitted and required by the terms of this Agreement (or any other agreement between the Company and an Indemnified Person), without regard to any rights an Indemnified Person may have against any Other Indemnitor. The Company irrevocably waives, relinquishes and releases the Other Indemnitors from any claim against the Other Indemnitors for contribution, subrogation or any other recovery of any kind in respect of any amount paid or advanced by the Company pursuant to this provision. No advancement or payment by any Other Indemnitor on behalf of an Indemnified Person with respect to any claim for which an Indemnified Person has sought indemnification from the Company shall affect the Company’s obligation as primary obligor and to the extent of such advancement or payment by any of the Other Indemnitors, the Other Indemnitors shall have a right of contribution and shall be subrogated to all of the rights of recovery of an Indemnified Person against the Company. The Other Indemnitors are express third party beneficiaries of the terms of this Section ‎5.02. An Indemnified Person may notify the Company in writing of the existence of any Other Indemnitor in respect of such Indemnified Person, provided that the failure of an Indemnified Person to so notify the Company shall not adversely impact the rights of any Other Indemnitor under this Section ‎5.02.

 

 

5.03            Award of Indemnification. The determination of whether the Company is authorized to indemnify the Indemnified Persons hereunder and any award of indemnification shall be made in each instance (a) if there is more than one Indemnified Person, by a majority of the votes held by Managers who are not parties to the Proceeding in question or (b) by independent legal counsel appointed by such Managers or the Requisite Preferred Holders. The Company shall be obliged to pay indemnification applied for by the Indemnified Persons unless there is an adverse determination (as provided above) within forty-five (45) days after the application. If indemnification is denied, the applicant may seek an independent determination of its right to indemnification by a court, and in such event, the Company shall have the burden of proving that the applicant was ineligible for indemnification under this ‎ARTICLE V.

 

5.04            Successful Defense. Notwithstanding any contrary provisions of this ‎ARTICLE V, if the Indemnified Person has been wholly successful on the merits in the defense of any Proceeding in which it was involved by reason of its position as an Indemnified Person or as a result of serving in such capacity (including termination of investigative or other Proceedings without a finding of fault on the part of the Indemnified Person), the Indemnified Person shall be indemnified by the Company against all Expenses incurred by the Indemnified Person in connection therewith.

 

5.05            Advance Payments. Except as limited by law, Expenses incurred by the Indemnified Person in defending any Proceeding, including a Proceeding by or in the right of the Company, shall be paid by the Company to the Indemnified Person in advance of final disposition of the Proceeding upon receipt of its written undertaking to repay such amount if the Indemnified Person is determined pursuant to this ‎ARTICLE V or adjudicated to be ineligible for indemnification, which undertaking shall be an unlimited general obligation but need not be secured and may be accepted without regard to the financial ability of the Indemnified Person to make repayment.

 

 

5.06            Definitions. For purposes of this ‎ARTICLE V:

 

(a)            “Indemnified Person” includes (i) a Person serving as a Manager, or an Officer or in a similar executive capacity appointed by the Managers and exercising rights and duties delegated by the Managers, (ii) a Person serving at the request of the Company as a director, manager, officer, employee or other agent of another organization, including, without limitation, any subsidiary of the Company, (iii) any Person who formerly served in any of the foregoing capacities (with respect to matters relating to such services), and (iv) the Paragon Members and Preferred Members;

 

(b)            “Expenses” means all expenses, including attorneys’ fees and disbursements, actually and reasonably incurred in defense of a Proceeding or in seeking indemnification under this ‎ARTICLE V, and except for Proceedings by or in the right of the Company or alleging that the Indemnified Person received an improper personal benefit (unless it is judicially determined that the Indemnified Person satisfied the standard of conduct set forth above for indemnification), any judgments, awards, fines, penalties and reasonable amounts paid in settlement of a Proceeding; and

 

(c)            “Proceeding” means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and any claim which could be the subject of a proceeding.

 

5.07            Insurance.

 

(a)            The Company shall have the power to purchase and maintain insurance on behalf of any Manager, Officer, agent or employee against any liability or cost incurred by such Person in any such capacity or arising out of its status as such, whether or not the Company would have power to indemnify against such liability or cost.

 

(b)            The Company shall maintain in effect, from financially sound and reputable insurers, directors and officers liability insurance in an amount and on terms and conditions satisfactory to the Board of Managers and will cause such insurance policy to be maintained until such time as the Board of Managers determines that such insurance should be discontinued. The policy shall not be cancelable by the Company without prior approval by the Board of Managers. Unless the requirement is waived by the Board of Managers the Company shall maintain “key person” insurance on the Chief Executive Officer, in an amount and on terms and conditions satisfactory to the Board of Managers.

 

5.08            Successor Indemnification. The indemnification provided by this ‎ARTICLE V shall inure to the benefit of the heirs and personal representatives of the Indemnified Persons. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of Indemnified Persons as in effect immediately before such transaction, whether such obligations are contained in this Agreement, or elsewhere, as the case may be.

 

5.09            Non-Exclusivity. The provisions of this ‎ARTICLE V shall not be construed to limit the power of the Company to indemnify its or any of its subsidiaries’ directors, members, equity holders, partners, officers, employees or agents to the full extent that would have been permitted by the DGCL if the Company were a corporation organized and existing under the DGCL, or otherwise permitted by law, or to enter into specific agreements, commitments or arrangements for indemnification that would have been or are so permitted. The absence of any express provision for indemnification herein shall not limit any right of indemnification existing independently of this ‎ARTICLE V. The Company shall enter into an indemnification agreement with each of the Managers in a form approved by the Board of Managers.

 

 

5.10            Employee Agreements. The Company will cause (i) each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or Trade Secrets to enter into a nondisclosure and proprietary rights assignment agreement and (ii) each executive level employee (including division director and vice president-level positions as well as any employee with such other title as the Board of Managers) approves or above, or any other employee for whom the Requisite Preferred Holders so requests, to enter into a one (1) year noncompetition and non solicitation agreement, each in a form acceptable to the Board of Managers. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any equity agreement between the Company and any employee, without the prior approval of the Board of Managers.

 

5.11            Expenses of Counsel. In the event of a transaction which is a Sale of the Company, the reasonable fees and disbursements of one counsel for the Major Investors (“Investor Counsel”), in their capacities as Members, shall be borne and paid by the Company. At the outset of considering a transaction which, if consummated would constitute a Sale of the Company, the Company shall obtain the ability to share with the Investor Counsel (and such counsel’s clients) and shall share the confidential information (including, without limitation, the initial and all subsequent drafts of memoranda of understanding, letters of intent and other transaction documents and related noncompete, employment, consulting and other compensation agreements and plans) pertaining to and memorializing any of the transactions which, individually or when aggregated with others would constitute the Sale of the Company. The Company shall be obligated to share (and cause the Company’s counsel and investment bankers to share) such materials when distributed to the Company’s executives and/or any one or more of the other parties to such transaction(s). In the event that Investor Counsel deems it appropriate, in its reasonable discretion, to enter into a joint defense agreement or other arrangement to enhance the ability of the parties to protect their communications and other reviewed materials under the attorney client privilege, the Company shall, and shall direct its counsel to, execute and deliver to Investor Counsel and its clients such an agreement in form and substance reasonably acceptable to Investor Counsel. In the event that one or more of the other party or parties to such transactions require the clients of Investor Counsel to enter into a confidentiality agreement and/or joint defense agreement in order to receive such information, then the Company shall share whatever information can be shared without entry into such agreement and shall, at the same time, in good faith work expeditiously to enable Investor Counsel and its clients to negotiate and enter into the appropriate agreement(s) without undue burden to the clients of Investor Counsel.

 

 

5.12            Right to Conduct Activities; Competitors.

 

(a)            The Company hereby agrees and acknowledges that certain of the Members are in the business of investing and that such Members (together with their Affiliates) invest in numerous portfolio companies, some of which may be deemed competitive with the Company’s business (as currently conducted or as currently propose to be conducted). Nothing in this Agreement, including, without limitation, access to the Company’s confidential information, shall preclude or in any way restrict the Members (or any of their respective Affiliates) from evaluating or purchasing securities, including publicly traded securities, of a particular enterprise, or investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company, and the Company hereby agrees that, to the extent permitted under applicable law, such Members (and their respective Affiliates) shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by such Members (or their respective Affiliates) in any entity competitive with the Company (including an entity with publicly traded securities), or (ii) actions taken by any partner, officer or other representative of such Members (or their respective Affiliates) to assist any such competitive company, whether or not such action was taken as a member of the board of managers or board of directors, as applicable, of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Members from liability associated with the unauthorized disclosure of the Company’s confidential information and Trade Secrets obtained pursuant to this Agreement, or (y) any Manager or Officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

(b)            Notwithstanding anything to the contrary set forth in this Agreement, none of Deep Track, RTW, RA Capital, the Fidelity Members, Xontogeny, OrbiMed or the Wellington Investors, nor their respective Affiliates, shall be deemed a direct or indirect competitor of the Company for any purpose under this Agreement.

 

5.13            FCPA. The Company represents that it shall not (and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any Non-U.S. Official (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anticorruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Upon request, the Company agrees to provide responsive information and/or certifications concerning its compliance with applicable anti-corruption laws. The Company shall promptly notify each Member if the Company becomes aware of any allegation, voluntary disclosure, investigation, prosecution or other enforcement action related to the FCPA or any other anti-corruption law. The Company shall, and shall cause any direct or indirect subsidiary or entity controlled by it, whether now in existence or formed in the future, to comply with the FCPA. The Company shall use its best efforts to cause any direct or indirect subsidiary, whether now in existence or formed in the future, to comply in all material respects with all applicable laws.

 

 

5.14            Amendment; Survival. The provisions of this ‎ARTICLE V may be amended or repealed in accordance with Section ‎13.04; provided, however, that no amendment or repeal of such provisions that adversely affects the rights of an Indemnified Person under this ‎ARTICLE V with respect to his, her or its acts or omissions at any time prior to such amendment or repeal, shall apply to an Indemnified Person without his, her or its consent. The obligations of the Company under Sections ‎5.01 through ‎5.09 and ‎5.11 shall survive any Change of Control of the Company.

 

ARTICLE VI
CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS

 

6.01            Additional Capital Contributions. Except as specified in this Agreement or in any other agreement executed by such Member and the Company, no Member shall be required to make any additional Capital Contributions to the Company.

 

6.02            Capital Accounts.

 

(a)            A separate Capital Account shall be established for each Member and shall be maintained in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv) and this Section ‎6.02‎(a) shall be interpreted and applied in a manner consistent with such regulations. No Member shall have any obligation to restore any portion of any deficit balance in such Member’s Capital Account, whether upon liquidation of its interest in the Company, liquidation of the Company or otherwise. In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), the Company may adjust the Capital Accounts of its Members to reflect revaluations (including any unrealized income, gain or loss) of the Company’s property (including intangible assets such as goodwill), whenever it issues additional interests in the Company (including any interests with a zero initial Capital Account), or whenever the adjustments would otherwise be permitted under the Treasury Regulations. In the event that the Capital Accounts of the Members are so adjusted, (i) the Capital Accounts of the Members shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss, as computed for book purposes, with respect to such property and (ii) the Members’ distributive shares of depreciation, depletion, amortization and gain or loss, as computed for tax purposes, with respect to such property shall be determined so as to take account of the variation between the adjusted tax basis and book value of such property in the same manner as under Section 704(c) of the Code. In the event that Code Section 704(c) applies to property of the Company, the Capital Accounts of the Members shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization, and gain and loss, as computed for book purposes with respect to such property. The Capital Accounts shall be maintained for the sole purpose of allocating items of income, gain, loss and deduction among the Members and shall have no effect on the amount of any distributions to any Members in liquidation or otherwise (except with respect to Tax Distributions to the extent of any allocation that gives rise to taxable income or loss under Section ‎8.02).

 

 

(b)            The Capital Accounts of the Members as of the date hereof are set forth on Schedule A. Except as otherwise expressly provided herein, no Member may withdraw, or shall be entitled to a return of, any portion of such Member’s Capital Contribution.

 

ARTICLE VII
ALLOCATIONS OF INCOME, ETC.

 

7.01            Allocations Generally.

 

(a)            General Allocations. Subject to, and after applying Section ‎7.01‎(b), net income or net loss (and not items of income, gain, deduction and loss), if any, shall be allocated among the Members in such ratio or ratios as may be required to cause the balances of the Members’ Economic Capital Accounts to equal, as nearly as possible, their Target Balances, consistent with the provisions of Section ‎7.01‎(b).

 

(b)            Regulatory Allocations. To the extent the allocation provisions of this Section ‎7.01 would not comply with the Treasury Regulations under Section 704(b) of the Code, there is hereby included in this Agreement such special allocation provisions governing the allocation of income, gain, loss, deduction and credit (prior to making the remaining allocations in conformity with this Section ‎7.01) as may be necessary to provide herein a so-called “qualified income offset,” and ensure that this Agreement complies with all provisions, including “minimum gain” provisions, relating to the allocation of so-called “nonrecourse deductions” and “partner nonrecourse deductions” and the charge back thereof as are required to comply with the Treasury Regulations under Section 704(b) of the Code. In particular, so-called “nonrecourse deductions” and “excess nonrecourse liabilities,” as defined in the Treasury Regulations under Sections 704(b) and 752 of the Code, shall be allocated to each Member based upon each Member’s pro rata distributions under Section ‎8.01(b) immediately prior to such allocation.

 

(c)            Compliance with Code Section 704(b). The allocation provisions contained in this ‎ARTICLE VII are intended to comply with Code Section 704(b) and the Treasury Regulations promulgated thereunder and shall be interpreted and applied in a manner consistent therewith.

 

(d)            Other Allocation Provisions. Notwithstanding this Section ‎7.01, the Board of Managers shall have the authority to adjust the allocation of net income and net loss in any manner reasonably intended to reflect more accurately, under the principles of Section 704(b) of the Code, the economic arrangement among the Members and each Member’s relative holdings of Units, taking into account all factors, including unrealized gain, in the sole discretion of the Board of Managers.

 

7.02            Tax Allocations.

 

(a)            Subject to Section ‎7.02‎(b), ‎(c) and ‎(d), net income and net loss (and not items of income, gain, loss, deduction, and credit) to be allocated for income tax purposes shall be allocated among the Members on the same basis as the corresponding “book” items are allocated as provided in Section ‎7.01; provided however, that the tax items allocated to Members pursuant to this Section ‎7.02‎(a) shall not be reflected in the Capital Accounts of the Members.

 

 

(b)            If any assets of the Company are subject to Code Section 704(c) or reflected in the Capital Accounts of the Members at a book value that differs from the adjusted federal income tax basis of such property, then the tax items with respect to such property shall be shared among the Members in a manner that takes account of the variation between the adjusted federal income tax basis of such property of the Company and its book value in accordance with the requirements of Code Section 704(c), the Treasury Regulations thereunder, and Treasury Regulations Section 1.704-1(b)(4)(i).

 

(c)            If the book value of any Company asset is adjusted pursuant to Section ‎6.02(a), subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its book value in the same manner as under Code Section 704(c).

 

(d)            Allocations of tax credits, tax credit recapture, and any items related thereto shall be allocated to the holders of Units according to their interests in such items as determined by the Board of Managers taking into account the principles of Treasury Regulations Section 1.704-1(b)(4)(ii).

 

(e)            Allocations pursuant to this Section ‎7.02 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any holder’s Capital Account or share of book income, gain, loss or deduction, distributions or other Company items pursuant to any provision of this Agreement.

 

7.03            Special Allocations, Tax Elections and Partnership Representative.

 

(a)            If any interest in the Company is transferred, increased or decreased during the year, all items of income, gain, loss, deduction and credit recognized by the Company for such year shall be allocated among the Members as determined by the Board of Managers, subject to compliance with Section 706(d) of the Code.

 

(b)            The Company and the Members shall not treat any of the rights of the Members under this Agreement as giving rise to any guaranteed payment for capital under Section 707 of the Code.

 

(c)            Subject to compliance with the terms of this Agreement and any express limitations herein, the Board of Managers shall have the authority to make any tax elections and other tax decisions with respect to the Company, to approve any returns regarding any foreign, federal, state or local tax obligations of the Company, and to make all determinations regarding the allocation of income and loss contemplated by this ‎ARTICLE VII.

 

 

(d)            Subject to the last sentence of this Section ‎7.03‎(d), the Partnership Representative shall have authority to make decisions regarding any Company tax controversy. Each Member hereby agrees (i) to take such actions as may be required to effect the appointed Member’s designation as the Partnership Representative (as determined pursuant to Section ‎3.04(h)), (ii) to cooperate to provide any information or take such other actions as may be reasonably requested by the Partnership Representative in order to determine whether any Imputed Underpayment Amount may be modified pursuant to Code Section 6225(c) and any similar provisions of state or local laws, and (iii) to, upon the request of the Partnership Representative, file any amended U.S. federal income tax return (or to cooperate with the Company’s use of the alternative procedure to filing amended returns) and pay any tax due in connection with such tax return in accordance with Code Section 6225(c)(2) and any similar provisions of state or local laws; provided, however, that if the Partnership Representative requests that any Member file an amended U.S. federal income tax return pursuant to Code Section 6225(c), each Member shall be entitled to satisfy such request through adherence to the alternative procedure forth in Code Section 6225(c)(2)(B); provided, further, that to the extent any administrative or judicial proceeding could reasonably be expected to disproportionately adversely affect a Member, the Partnership Representative shall (i) provide notice to such Member of any such proceeding; (ii) provide such Member with a reasonable opportunity to review and comment on any written communications related to such proceeding; and (iii) not settle or compromise any such proceeding without obtaining the prior written consent of such Member (which consent shall not be unreasonably withheld, conditioned or delayed). A Member’s obligations under this Section ‎7.03‎(d) and Section ‎13.01 shall survive the transfer, assignment or liquidation of such Member’s interest in the Company, a withdrawal by such Member and/or the dissolution of such Member. Notwithstanding the foregoing, the Partnership Representative shall be subject to the control of the Board of Managers pursuant to Section ‎7.03‎(c) and shall not settle or otherwise compromise any issue in any such examination, audit or other Proceeding without first obtaining approval of the Board of Managers.

 

ARTICLE VIII
DISTRIBUTIONS

 

8.01            Distributions Generally.

 

(a)            Subject to the other provisions of this Section ‎8.01‎(a), and the further provisions of this ‎ARTICLE VIII, the Board of Managers may, in its discretion, determine the amount of any Proceeds Available for Distribution and the time when such amounts are to be distributed. Upon the closing of a Change of Control, the Company shall immediately distribute any Proceeds Available for Distribution associated with such Change of Control transaction in accordance with Section ‎8.01‎(b). Upon a dissolution, winding up and liquidation in accordance with Section ‎11.02, the Company shall immediately distribute any Proceeds Available for Distribution associated with such dissolution, winding up and liquidation. The Board of Managers may establish record dates for the purpose of determining the Members of the Company entitled to any distribution.

 

(b)            Proceeds Available for Distribution (collectively, the “Proceeds”) shall be distributed to the Members as follows:

 

(i)            First, to the holders of Series B Preferred Units, pro rata in proportion to the remaining amount to be distributed to each such holder under this Section ‎8.01‎(b)‎(i), until the Unpaid Series B Preferred Unit Preference Amount for each Series B Preferred Unit is $0;

 

 

(ii)            Second, to the holders of Series A Preferred Units, pro rata in proportion to the remaining amount to be distributed to each such holder under this Section ‎8.01‎(b)‎(ii), until the Unpaid Series A Preferred Unit Preference Amount for each Series A Preferred Unit is $0;

 

(iii)           Third, to each holder of vested Common Units and vested Incentive Units (excluding, for the avoidance of doubt, all Units that are unvested), pro rata in proportion to the remaining amount to be distributed to such Units under this Section ‎8.01‎(b)‎(iii), until each such vested Common Unit and each such vested Incentive Unit (taking into account Section ‎8.01‎(c)) has received an aggregate amount under this Section ‎8.01‎(b)‎(iii) equal to the Series A Original Issuance Price;

 

(iv)           Fourth, to the holders of Series A Preferred Units, vested Common Units and vested Incentive Units (excluding, for the avoidance of doubt, all Units that are unvested), pro rata in proportion to the remaining amount to be distributed to such Units under this Section 8.01(b)(iv), until each such Series A Preferred Unit, each such vested Common Unit and each such vested Incentive Unit (taking into account Section ‎8.01‎(c)) has received an aggregate amount under Section ‎8.01‎(b)‎(ii), Section ‎8.01‎(b)‎(iii) and this Section 8.01(b)(iv) equal to the Series B Original Issuance Price; and

 

(v)           Thereafter, subject to Section ‎8.01‎(c), to the holders of Preferred Units, vested Common Units and vested Incentive Units (excluding, for the avoidance of doubt, all Units that are unvested) pro rata in relative proportion to such holder’s Percentage Interest.

 

(c)            Notwithstanding any provision in this Agreement to the contrary, no distributions shall be made in respect of an Incentive Unit (and no such Incentive Unit shall be treated as outstanding for purposes of apportioning any distributions) under this Section ‎8.01 (other than Tax Distributions treated as advances on distributions made pursuant to this Section ‎8.01) until there shall have been distributions pursuant to Section ‎8.01‎(b) subsequent to the issuance of such Incentive Unit to each Common Unit in an aggregate amount in respect of such Incentive Unit equal to the Strike Price of such Incentive Unit. The Board of Managers shall have the discretion to make any determinations required under this clause, including as to the extent to which Incentive Units with an associated Strike Price will be excluded from participating in Proceeds Available for Distribution on account of this Section ‎8.01‎(c).

 

 

8.02            Tax Distributions.

 

(a)            At least three (3) weeks prior to the end of any fiscal quarter of the Company, the Company shall deliver to each Member a statement setting forth the amount of income and gain (and, to the extent reasonably practicable, each item thereof) expected to be allocated by the Company to such Member for federal income tax purposes with respect to such fiscal quarter, as estimated by the Board of Managers, in good faith and in consultation with the Officers and tax and accounting advisors. Notwithstanding any other provision of this Section ‎8.02, and prior to and in preference over any distributions pursuant to Section ‎8.01, the Company, to the extent of any available cash on hand, shall distribute to such Member, at least seven (7) days prior to the estimated tax payment due date for such fiscal quarter, an amount of cash equal to the amounts estimated by the Board of Managers, in good faith and in consultation with the Officers and the Company’s tax and accounting advisors, to represent the assumed federal, state and local income tax liability (such liability, a “Tax Liability”) that would be incurred by such Member with respect to such Member’s allocable share of the Company’s taxable net income for such quarter (any such distribution, and any other distribution under this Section ‎8.02, a “Tax Distribution”). In calculating the amount of each Tax Distribution, the Company shall assume that each Member’s Tax Liability is equal to (i) the highest combined marginal federal, state and local income tax rate applicable for such period to an individual resident in the jurisdiction with the highest combined marginal federal, state and local income tax rate, as determined by the Board of Managers in good faith and in consultation with the Company’s tax and accounting advisors (the “Tax Rate”), multiplied by (ii) such Member’s allocable share of the taxable income of the Company (as reduced, but not below zero, by any prior net loss allocated to such Member that was not previously taken into account under this sentence). The Tax Rate may be adjusted by the Board of Managers in good faith and in consultation with the Company’s tax and accounting advisors (provided that the same percentage shall apply to each Member) to account for preferential rates of income tax applicable to certain kinds of income for individuals (including as a result of Section 1061 of the Code). In addition, within ninety (90) days after the end of each Fiscal Year, the Company shall distribute to each Member an amount equal to the excess, if any, of (x) such Member’s Tax Liability with respect to such Fiscal Year minus (y) the sum of all other Tax Distributions distributed to such Member pursuant to this Section ‎8.02 with respect to such Fiscal Year. For purposes of calculating the Tax Liability of a Member, the Company shall take into account any allocations of income or gain to a Member with respect to any interest or other amount properly treated as a guaranteed payment for capital under Section 707(c) of the Code. Notwithstanding the foregoing, Tax Distributions shall not be available to a Member with respect to any guaranteed payment for services under Section 707(c) of the Code or any other payment for services to a Member not in his, her or its capacity as a Member under Section 707(a) of the Code. Notwithstanding anything herein to the contrary, Tax Distributions pursuant to this Section ‎8.02‎(a) shall be treated as advances of the first distributions under Section ‎8.01(b) that would otherwise be made to such Member, and shall reduce or offset amounts otherwise distributable pursuant to Section ‎8.01(b) accordingly. Furthermore, no Tax Distributions shall be made in connection with a Sale Event, Change of Control, Sale of the Company or the dissolution and liquidation of the Company.

 

(b)            To the extent that (i) the sum of all Tax Distributions distributed to any Member pursuant to this Section ‎8.02 with respect to a Fiscal Year exceed (ii) such Member’s Tax Liability with respect to such Fiscal Year, such excess shall be considered a Tax Distribution in respect of the immediately succeeding Fiscal Year for purposes of determining the Company’s obligation to make Tax Distributions with respect to such immediately succeeding Fiscal Year. To the extent that (iii) any Member’s Tax Liability with respect to such Fiscal Year exceeds (iv) the sum of all Tax Distributions distributed to such Member pursuant to this Section ‎8.02 with respect to such Fiscal Year, the Company shall distribute such excess to such Member as soon as possible, and any such distributions shall be made in preference of, and in addition to, any subsequent Tax Distributions for subsequent Fiscal Years. For the avoidance of doubt, this Section ‎8.02‎(b) shall apply in the event of a redetermination of the Tax Liability of a Member after the close of a Fiscal Year, whether as a result of an audit and assessment by a taxing authority or otherwise.

 

 

8.03            Limitations on Distributions. No distribution shall be made to a Member if and to the extent that such distribution would cause the Company to be insolvent.

 

8.04            In-Kind Distributions; Distributions of Subsidiaries.

 

(a)            The amount of any in-kind distribution shall be distributed on the basis of the property’s then Fair Market Value and shall be distributed to the Members in proportion to their overall shares of the amounts then being distributed; provided, however, that notwithstanding anything to the contrary herein, the Company shall not, without the consent of the Members to whom such distribution is to be made, make any in-kind distributions of property that is equity in any entity unless such entity is (a) classified as a corporation for U.S. federal income tax purposes or (b) subject to covenants that are substantially similar to the covenants contained in ‎ARTICLE IX.

 

(b)            Notwithstanding any provision herein to the contrary, unless otherwise determined by a unanimous vote of the Board of Managers, in the event the Board of Managers determines to distribute a subsidiary of the Company to the Members and such distribution is not being made in connection with or after a public offering of such subsidiary pursuant to which such subsidiary will or has become traded on a national securities exchange, such distribution shall be made to all the Members in a manner such that, to the extent reasonably possible, each Member receives equity interests in such subsidiary having rights, preferences, privileges and obligations substantially similar to those that exist with respect to the interests of the Member in the Company at the time of such distribution, subject to such adjustments as the Board of Managers determines fair and equitable to take into account the relative values of the Company and such subsidiary. In the event of such distribution, the rights to distributions from the Company thereafter shall be proportionately reduced in a manner determined fair and equitable by the Board of Managers.

 

8.05            Tax Information. The Members shall deliver to the Company, at the same time or times prescribed by applicable law and at any times reasonably requested by the Company, such information, documentation or certification as may be prescribed by law or reasonably requested by the Company to determine whether withholding may be required with respect to the Member’s interest in the Company or in connection with tax filings in any jurisdiction in which or through which the Company invests, including any information or certification required for the Company (or any other entity in which the Company directly or indirectly invests) to comply with any tax return or information filing requirements or to obtain a reduced rate of, or exemptions from, any applicable tax, whether pursuant to the laws of such jurisdiction or an applicable tax treaty. The Board of Managers shall make or cause the Company to make any reasonable filings, applications, or elections necessary to obtain any available exemption from, reduction in, or refund of, any withholding or other taxes imposed by any tax authority with respect to income of or distributions from the Company in respect of the Member’s interest. If the Member must make any such filings, applications, or elections directly, the Board of Managers, at the Member’s request, shall (or shall cause the Company to) (i) use commercially reasonable efforts to provide such relevant information as it possesses, and (ii) take such other action as may reasonably be necessary to (x) complete or make such filings, applications, or elections, and (y) obtain the related exemption from, reduction in, or refund of, such withholdings or other taxes.

 

 

8.06            Adjustments for Dilutive Issues

 

(a)            No Adjustments. No adjustment in the Adjustment Price for the Series A Preferred Units or Series B Preferred Units, as applicable, shall be made as a result of the issuance of Additional Units if the Company receives written notice from the Requisite Series A Preferred Holders or Requisite Series B Preferred Holders, respectively, agreeing that no such adjustment shall be made to the applicable Adjustment Price as a result of the issuance of such Additional Units.

 

(b)            Adjustment of Adjustment Price Upon Issuance of Additional Units. In the event the Company shall at any time or from time to time after the date of this Agreement issue Additional Units (including Additional Units deemed to be issued pursuant to Section ‎8.06(e)), without consideration or for a consideration per Unit less than the Series A Adjustment Price for the Series A Preferred Units or the Series B Adjustment Price for the Series B Preferred Units, in each case, in effect immediately prior to such issuance or deemed issuance, then such Adjustment Price shall be reduced, concurrently with such issuance or deemed issuance, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:

 

CP₂ = CP₁ * (A + B) ÷ (A + C).

 

For purposes of the foregoing formula, the following definitions shall apply:

 

(A)            “CP₂” shall mean the Adjustment Price in effect immediately after such issuance or deemed issuance of Additional Units;

 

(B)            “CP₁” shall mean the Adjustment Price in effect immediately prior to such issuance or deemed issuance of Additional Units;

 

(C)            “A” shall mean the number of Units Deemed Outstanding immediately prior to such issuance or deemed issuance of Additional Units;

 

(D)            “B” shall mean the number of Units that would have been issued if such Additional Units had been issued or deemed issued at a price per Unit equal to CP₁ (determined by dividing the aggregate consideration received by the Company in respect of such issue by CP₁); and

 

(E)            “C” shall mean the number of such Additional Units issued or deemed issued in such transaction.

 

 

(c)            Determination of Consideration. For purposes of this Section ‎8.06, the consideration received by the Company for the issue of any Additional Units 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;

 

(B)            insofar as it consists of property other than cash, be computed at the Fair Market Value thereof at the time of such issue; and

 

(C)            in the event Additional Units are issued together with other units or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (A) and (B) above, as determined in good faith by the Board of Managers.

 

(ii)            Options and Convertible Securities: The consideration per unit received by the Company for Additional Units deemed to have been issued pursuant to Section ‎8.06(e), relating to Options (as defined below) and Convertible Securities (as defined below), 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, 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 Units (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, 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.

 

(d)            Multiple Closing Dates. In the event the Company shall issue on more than one date Additional Units that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Adjustment Price, then, upon the final such issuance, the number of the issued and outstanding Series A Preferred Units and Series B Preferred Units shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).

 

 

(e)            Deemed Issue of Additional Units.

 

(i)            For purposes hereof, (x) “Convertible Securities” shall mean any evidences of indebtedness, Units or other securities directly or indirectly convertible into or exchangeable for Units, but excluding Options, and (y) “Options” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Units or Convertible Securities.

 

(ii)           If the Company at any time or from time to time after the date of this Agreement shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities), then the maximum number of Units (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) 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, shall be deemed to be Additional Units issued as of the time of such issue.

 

(iii)          If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Adjustment Price pursuant to the terms of Section 8.06(b), are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of Units issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Company upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Adjustment Price computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Adjustment Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (iii) shall have the effect of increasing the Adjustment Price to an amount which exceeds the lower of (x) the Adjustment Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (y) the Adjustment Price that would have resulted from any issuances of Additional Units (other than deemed issuances of Additional Units as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

 

(iv)         If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Adjustment Price pursuant to the terms of Section 8.06‎(b) (either because the consideration per Unit of the Additional Units subject thereto was equal to or greater than the Adjustment Price then in effect, or because such Option or Convertible Security was issued before the date of this Agreement), are revised after the date of this Agreement as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase in the number of Units issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Company upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Units subject thereto shall be deemed to have been issued effective upon such increase or decrease becoming effective.

 

 

(v)            Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Adjustment Price pursuant to the terms of Section 8.06‎(b), the Adjustment Price shall be readjusted to such Adjustment Price as would have prevailed had such Option or Convertible Security (or portion thereof) never been issued.

 

(vi)            If the number of Units issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Adjustment Price shall be effected at the time of such issuance or amendment based on such number of Units or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided herein). If the number of Units issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Adjustment Price that would result under the terms of this Section 8.06‎(e) at the time of such issuance or amendment shall instead be effected at the time such number of Units and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Adjustment Price that such issuance or amendment took place at the time such calculation can first be made.

 

8.07            Adjustment for Splits and Combinations. If the Company shall at any time or from time to time after the date of this Agreement effect a subdivision of the outstanding Units, each Adjustment Price in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the date of this Agreement combine the outstanding Units, each Adjustment Price in effect immediately before the combination shall be proportionately increased. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

 

8.08            Adjustment for Certain Distributions. In the event the Company at any time or from time to time after the date of this Agreement shall make a distribution payable on the Units in additional Units, then and in each such event each Adjustment Price in effect immediately before such event shall be decreased as of the time of such issuance by multiplying the Adjustment Price then in effect by a fraction:

 

(i)            the numerator of which shall be the total number of Units issued and outstanding immediately prior to the time of such issuance, and

 

(ii)            the denominator of which shall be the total number of Units issued and outstanding immediately prior to the time of such issuance plus the number of Units issuable in payment of such distribution.

 

Notwithstanding the foregoing, no such adjustment shall be made if the holders of Preferred Units simultaneously receive a distribution of Units in a number equal to the number of Units as they would have received in a pro rata distribution to holders of Units in relative proportion to each such holder’s Percentage Interest on the date of such event.

 

8.09            Adjustments for Other Distributions. In the event the Company at any time or from time to time after the date of this Agreement shall make a distribution payable in securities of the Company or in other property and the other provisions of ‎ARTICLE VIII do not apply to such distribution, then and in each such event the holders of Preferred Units shall receive, simultaneously with the distribution to the holders of Units, a distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received in a pro rata distribution to holders of Units in relative proportion to each such holder’s Percentage Interest on the date of such event.

 

8.10            Adjustment for Merger or Reorganization, Etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation or merger (excluding a Change of Control, Sale of the Company or dissolution event) involving the Company in which the Common Units are converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 8.07, 8.08 and 8.09 above), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each Preferred Unit of each series shall thereafter be convertible in lieu of the Common Units into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of Common Units of the Company issuable upon conversion of one Preferred Unit of such series immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Managers of the Company) shall be made in the application of the provisions in ‎ARTICLE VIII with respect to the rights and interests thereafter of the holders of the Preferred Unit, to the end that the provisions set forth in ‎ARTICLE VIII (including provisions with respect to changes in and other adjustments of the Adjustment Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Preferred Units.

 

8.11            Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Adjustment Price pursuant to Sections ‎8.06 through ‎8.10, the Company at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each Preferred Member a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, as promptly as reasonably practicable after the written request at any time of any Preferred Member (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the applicable Adjustment Price and Adjustment Ratio then in effect, and (ii) such holder’s Percentage Interest.

 

 

8.12            Mandatory Conversion.

 

(a)            Trigger Event. Each Preferred Unit shall automatically be converted into the number of Common Units (or other applicable common stock or common equity of the applicable successor entity) equal to the then effective Adjustment Ratio for such Preferred Unit upon the earlier of (i) the date, or the occurrence of an event, specified by the vote or written consent of the Requisite Preferred Holders and the Requisite Series B Preferred Holders, or (ii) immediately prior to the closing of an IPO resulting in minimum gross proceeds to the Company of at least seventy five million dollars ($75,000,000) (a “Qualified IPO”) (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”). For the avoidance of doubt, and notwithstanding Section 10.11 with respect to the obligation thereunder to obtain the approval of the Requisite Preferred Holders, the Company may directly or indirectly convert into a corporation prior the Mandatory Conversion Time with respect to a Qualified IPO without the vote or written consent of the Requisite Preferred Holders; provided, however, that (1) such conversion to a corporation is in contemplation of an IPO that would qualify as a Qualified IPO, (2) such conversion shall take place as immediately prior to completion of the IPO as is reasonably practical, and (3) if for any reason such IPO does not take place, then the Company shall promptly convert back to a limited liability company (with an operating agreement and other governance agreements on substantially the same terms as applied prior to the conversion, with the Persons that were Preferred Members prior to such conversion receiving the same Preferred Units (representing the same rights and interests) that had been previously converted) unless otherwise agreed by Persons representing the Requisite Preferred Holders prior to such conversion and Persons representing the Requisite Series B Preferred Holders prior to such conversion. The documents effecting such conversion shall include the foregoing provisos as a surviving covenant on the part of the resulting corporation.

 

(b)            Procedural Requirements. All Preferred Members shall be sent written notice of the Mandatory Conversion Time. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. All rights with respect to the Preferred Units converted pursuant to Section ‎8.12(a), including the rights, if any, to receive notices and vote (other than as a holder of Common Units or Incentive Units), will terminate at the Mandatory Conversion Time, except only the rights of the Preferred Members to receive the items provided for in the next sentence of this Section ‎8.12‎(b). As soon as practicable after the Mandatory Conversion Time, the Company shall (A) issue and deliver to such Preferred Member, or such Person’s nominees, a notice of issuance of applicable Common Units (or other applicable common stock or common equity of the applicable successor entity) and (B) pay any declared but unpaid distributions with respect to the Preferred Units that have been so converted.

 

(c)            Notwithstanding Section ‎8.12‎(a), if at the Mandatory Conversion Time, a Preferred Member would own greater than nine point nine percent (9.9%) of the outstanding voting securities of the Company (or applicable successor entity), such Preferred Member may, upon delivery of written notice to the Company, elect in its sole discretion to convert all or a portion of its Preferred Units into non-voting equity securities of the Company (or applicable successor entity) otherwise identical to the Common Units (or other applicable common stock or common equity of the applicable successor entity). The Company and the Members agree to take such actions as may be reasonably necessary to create and authorize the issuance of such non-voting equity securities in accordance with this Section ‎8.12‎(a).

 

 

ARTICLE IX
TAX MATTERS AND REPORTS; ACCOUNTING

 

9.01            Tax Reports to Current and Former Members. After the end of each Fiscal Year, the Company shall use commercially reasonable efforts to prepare and mail, or cause its accountants to prepare and mail, not later than seventy-five (75) days following the end of such Fiscal Year, to each Member and, to the extent necessary, to each former Member (or its legal representatives), a report setting forth in sufficient detail such information as is required to be furnished to Members by law and as shall enable such Member or former Member (or its legal representatives) to prepare their respective U.S. federal and state income tax returns or informational returns; provided, however, that the Company shall in all events provide the tax information and documentation specified in this sentence not later than ninety (90) days following the end of such Fiscal Year. The Company will use commercially reasonable efforts to provide, on request by any Member, an estimate of such Member’s taxable income (loss) not later than sixty (60) days after the end of each such Fiscal Year.

 

9.02            Accounting Records. The Company shall maintain complete books and records accurately reflecting the accounts, business, transactions and Members of the Company.

 

9.03            Tax Accounting Method. Those documents relating to allocations of items of income, gain, loss, deduction or credit and Capital Accounts shall be kept under federal income tax accounting principles as provided herein.

 

9.04            No United States Trade or Business. The Board of Managers shall cause the Company to conduct its affairs so that the Company and its Members are not treated as engaging in a “trade or business within the United States” within the meaning of Section 864 of the Code, and so that no Member that is not a United States person (within the meaning of Section 7701(a)(30) of the Code) recognizes income that is treated as “effectively connected with the conduct of a trade or business within the United States,” within the meaning of Section 864 of the Code solely as a result of its interest in the Company.

 

9.05            No Unrelated Business Taxable Income. The Board of Managers shall cause the Company to conduct its affairs so that no Member recognizes income that is (i) unrelated business taxable income (as such term is used in Sections 511 through 514 of the Code) or (ii) unrelated debt-financed income within the meaning of Section 514 of the Code solely as a result of its interest in the Company.

 

9.06            No Commercial Activity. The Board of Managers shall cause the Company to conduct its affairs so that the Company and its Members are not treated as engaging in the conduct of any “commercial activity” within the meaning of Treasury Regulation Section 1.892-4T, as modified by proposed Treasury Regulations Section 1.892-4 and -5, solely as a result of owning an interest in the Company.

 

 

9.07            Real Property. The Company covenants that it will not purchase any United States real property interest (within the meaning of Section 897(c) of the Code, enter into a lease for United States real property with a term longer than 49 years, or otherwise take any action, in each case, to the extent such action could reasonably be expected to result in the Company or Apogee Therapeutics, Inc. becoming (i) a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code (a “USRPHC”) or (ii) a partnership described in Temporary Treasury Regulations Section 1.1445-11T(b). The Company agrees to make determinations as to its status, or the status of any subsidiary of the Company, as a USRPHC, and will file statements concerning those determinations with the Internal Revenue Service, in the manner and at the times required under Treasury Regulations Section 1.897-2(h), or any supplementary or successor provision thereto, as applicable. If at any time in the future the Company or any subsidiary of the Company should become a USRPHC, the Company shall, as promptly as possible, notify each Member of such change in status).

 

9.08            Certain Assets. The Company shall hold all of its assets and conduct all of its related activities, directly or indirectly, through entities classified as corporations for U.S. federal income tax purposes; provided that, notwithstanding the foregoing, the Company, directly or indirectly, may hold the following assets (and conduct related activities) outside of any such corporations in each case with respect to the below to the extent consistent with the covenants set forth in this Article IX, including without limitation, Sections 9.04 and 9.05 above: (i) equity of any entity classified as a corporation for U.S. federal income tax purposes, (ii) any instrument classified as debt for U.S. federal income tax purposes that is held for investment, cash management, or to finance the activities of the Company and/or its subsidiaries or other companies in which the Company owns equity, (iii) cash or cash equivalents, (iv) business records and other related assets utilized in the administration of the Company and its subsidiaries, (v) any other asset which will produce solely income described in Section 851(b)(2) of the Code, and (vi) any option (including put or call options) or any right to any contingent payment, including any rights to an earn-out, issued in respect of (including upon the disposition of or a distribution in respect of) an asset described in clauses (i) through (v). For purposes of clarity, the preceding sentence shall not preclude the Company from holding assets (and conducting related activities) enumerated in clauses (i) through (vi) of the proviso of the preceding sentence directly or indirectly through entities classified as partnerships or disregarded entities for U.S. federal income tax purposes (“Pass-Through Entities”), provided that the Board of Managers causes such Pass-Through Entities to be operated in a manner consistent with the covenants set forth in this Article IX, including without limitation, Sections 9.04 and 9.05 above.

 

9.09            No Filing Tax Returns. The Board of Managers shall cause the Company to conduct its affairs so that no Member is required to (a) file any income tax or other tax return in any jurisdiction other than such Member’s tax residence (other than any form or declaration required to establish a right to the benefit of an applicable tax treaty or an exemption from or reduced rate of withholding or similar taxes, or in connection with an application for a refund of withholding or similar taxes), or (b) directly pay income tax or other taxes (other than withholding or similar taxes) in such jurisdiction solely as a result of its interest in the Company.

 

 

ARTICLE X
RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL; DRAG-ALONG RIGHTS; PRE-EMPTIVE RIGHTS; CONVERSION TO CORPORATION; AND LOCK-UP

 

10.01         Transfers.

 

(a)            Except as otherwise specifically provided herein, no Member holding Common Units (other than Common Units converted from Preferred Units) or Incentive Units shall, directly or indirectly, sell, exchange, transfer (by gift or otherwise), assign, distribute, pledge, create a security interest, lien or trust with respect to, or otherwise dispose of or encumber such Units owned by such Member or any interest in or option on or based on the value of such Units (any of the foregoing being referred to as a “Transfer”) without the prior written consent of the Board of Managers, which consent may be granted or withheld in the sole discretion of the Board of Managers. Any purported Transfer of Units in violation of the provisions of this ‎ARTICLE X shall be void and of no force and effect whatsoever, and the Company shall not record any such event on its books or treat any such transferee as the owner of such Units for any purpose. Any Transfer permitted by this Agreement shall be termed a “Permitted Transfer” and the transferee of any Permitted Transfer shall be termed a “Permitted Transferee.”

 

(b)            Notwithstanding anything herein to the contrary, the following Transfers shall be limited only by Section ‎10.02 and for the purposes of clarity shall not be subject to the restrictions set forth in Sections ‎10.03, ‎10.04 or ‎10.08: (i) by any Member to the spouse, children (natural or adopted) or siblings (and siblings’ children) of such Member or to a trust or family limited partnership for the benefit of any of them; (ii) upon the death of any Member, to such Member’s heirs, executors or administrators or to a trust under such Member’s will, or between such Member and such Member’s guardian or conservator; or (iii) with respect to a Member that is not a natural person, to another entity that is an Affiliate of such Member.

 

(c)            Any Imputed Underpayment Amount that is properly allocable to a transferor of an interest, as reasonably determined by the Board of Managers, shall be treated as a Withholding Payment with respect to the applicable transferee in accordance with Section ‎13.01. Furthermore, as a condition to any Transfer, each transferor shall be required to agree (i) to continue to comply with the provisions of Section ‎7.03(d) notwithstanding such Transfer and (ii) to indemnify and hold harmless the Company and the Board of Managers from and against any and all liability with respect to the transferee’s Withholding Payments resulting from Imputed Underpayment Amounts attributable to the transferor to the extent that the transferee fails to do so.

 

10.02         Effective Date and Requirements of Transfer.

 

(a)            Any valid Transfer of a Member’s Units, or part thereof, pursuant to the provisions of this Agreement, shall be effective as of the close of business on the day in which such Transfer occurs (including fulfillment of all conditions and requirements with respect thereto). The Company shall, from the effective date of such Transfer, thereafter make all further distributions, on account of the Units (or part thereof) so assigned to the Permitted Transferee of such interest, or part thereof.

 

 

(b)            Every Permitted Transfer shall be subject to the following requirements (in addition to any other requirements contained in this Agreement):

 

(i)            If not already a Member, the transferee shall execute a counterpart to this Agreement thereby agreeing to be bound by all the terms and conditions of this Agreement;

 

(ii)           The transferee shall establish that the proposed Transfer will not cause or result in any violation of law, including without limitation, federal or state securities laws, and that the proposed Transfer would not cause or require (A) the Company to be an investment company as defined in the Investment Company Act of 1940, as amended or (B) the registration of the Company’s securities under federal securities laws;

 

(iii)          The transferee shall establish to the satisfaction of the Board of Managers that the proposed Transfer would not adversely affect the classification of the Company as a partnership for federal or state tax purposes, cause the Company to fail to qualify for any applicable regulatory safe harbor from treatment as a publicly traded partnership treated as a corporation under Section 7704 of the Code, or have a substantial adverse effect with respect to federal income taxes payable by the Company;

 

(iv)         If the transferor (or if such transferor is a disregarded entity for U.S. federal income tax purposes, the first direct or indirect beneficial owner of such transferor that is not a disregarded entity (the “Transferor’s Owner”)) is a “United States person” as defined in Section 7701(a)(30) of the Code, then such transferor (or Transferor’s Owner, if applicable) shall complete and provide to both of the transferee and the Company, a duly executed affidavit in the form provided to such transferor by the Company, certifying, under penalty of perjury, that the transferor (or Transferor’s Owner, if applicable) is not a foreign person, nonresident alien, foreign corporation, foreign partnership, foreign trust, or foreign estate (as such terms are defined under the Code and applicable Treasury Regulations) and the transferor’s (or Transferor’s Owner’s, if applicable) United States taxpayer identification number; and

 

(v)           If the transferor (or if such transferor is a disregarded entity for U.S. federal income tax purposes, the Transferor’s Owner) is not a “United States person” as defined in Section 7701(a)(30) of the Code, then such transferor and transferee shall jointly provide to the Company written proof reasonably satisfactory (1) that any applicable withholding tax that may be imposed on such Transfer (including pursuant to Sections 864 and 1446 of the Code) and any related tax returns or forms that are required to be filed, have been, or will be, timely paid and filed, as applicable, or (2) that withholding is not required because the transferor is not required to recognize any gain or loss by reason of a nonrecognition provision of the Code or other applicable exception and that any required notices or forms have been, or will be, timely filed.

 

 

(c)            Any Transfer that the Board of Managers reasonably determines may have a consequence described in Section 10.02‎(b) shall not be permitted.

 

10.03         Right of First Refusal.

 

(a)            Grant. Subject to Sections ‎10.01 and ‎10.02, each holder of Common Units (other than Common Units converted from Preferred Units) and Incentive Units (collectively, the “ROFR Subjects”) hereby unconditionally and irrevocably grants first, to the Company and second, to the Preferred Members, a Right of First Refusal to purchase all or any portion of Transfer Units that such Member may propose to transfer in a Proposed Transfer, at the same price and on the same terms and conditions as those offered to the Proposed Transferee.

 

(b)            Notice. Each ROFR Subject proposing to make a Proposed Transfer must deliver a Transfer Notice to the Company and each Preferred Member not later than forty-five (45) days prior to the consummation of such Proposed Transfer. Such Transfer Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Transfer, the identity of the Proposed Transferee and the intended date of the Proposed Transfer.

 

(c)            To exercise its Right of First Refusal under this Section ‎10.03, the Company must deliver a Company Notice to the selling ROFR Subject, as applicable, within ten (10) days after delivery of the Transfer Notice (the “Company Refusal Period”). Within five (5) days after expiration of the Company Refusal Period, the Company shall give written notice (the “Company’s Expiration Notice”) to the selling ROFR Subject and to the Preferred Members stating whether (A) the Company has exercised its Right of First Refusal with respect to all of the Transfer Units or (B) the Company’s Right of First Refusal has lapsed or been waived as to any portion of the Transfer Units (specifying the number of Transfer Units as to which the Right of First Refusal has lapsed or been waived). Notwithstanding any failure by the Company to deliver a Company’s Expiration Notice, to the extent that the Company does not exercise its Right of First Refusal during the Company Refusal Period, it shall be deemed to have waived such right; however, a failure to deliver a Company’s Expiration Notice shall not affect the Preferred Members’ Right of First Refusal as set forth in Section‎ 10.03‎(d) below.

 

(d)            To the extent the Company does not exercise its right to purchase all of the Transfer Units, for a period of twenty (20) days following receipt of the Company’s Expiration Notice (the “Acceptance Period”), each Preferred Member shall have the right to purchase its pro rata share of the Transfer Units on the same terms and conditions as set forth in the Transfer Notice. If a Preferred Member desires to exercise its right to purchase all or any portion of its pro rata share of the Transfer Units, it shall give written notice (the “Purchase Notice”) to the Transferring Member, with a copy to the Company, no later than the expiration of the Acceptance Period. Each Preferred Member’s pro rata share of the Transfer Units shall be equal to a fraction, the numerator of which is the number of Preferred Units (as adjusted by the applicable Adjustment Ratio) owned by such Preferred Member on the date of the Transfer Notice and the denominator of which is the total number of outstanding Preferred Units (as adjusted by the applicable Adjustment Ratio) and Common Units owned by all of the Preferred Members on the date of the Transfer Notice.

 

 

(e)            If the Rights of First Refusal have been exercised by the Company and the Preferred Members with respect to some but not all of the Transfer Units by the end of the twenty (20) day period specified in Section ‎10.03‎(d) (the “Investor Notice Period”), then the Company shall, immediately after the expiration of the Investor Notice Period, send written notice (the “Company Undersubscription Notice”) to those Preferred Members who fully exercised their Right of First Refusal within the Investor Notice Period (the “Fully Exercising Investors”). Each Fully Exercising Investor shall, subject to the provisions of this Section ‎10.03‎(e), have an additional option to purchase all or any part of the balance of any such remaining unsubscribed Transfer Units. To exercise such option, a Fully Exercising Investor must give written notice of such Fully Exercising Investor’s election to the Transferring Member and the Company within ten (10) days after the expiration of the Investor Notice Period. In the event there are two (2) or more such Fully Exercising Investors that choose to exercise the last-mentioned option for a total number of remaining Transfer Units in excess of the number available, the remaining Transfer Units available for purchase under this Section ‎10.03‎(e) shall be allocated to such Fully Exercising Investors pro rata based on the number of Transfer Units such Fully Exercising Investors have elected to purchase pursuant to the Right of First Refusal (without giving effect to any Transfer Units that any such Fully Exercising Investor has elected to purchase pursuant to the Company Undersubscription Notice). If the options to purchase the remaining Transfer Units are exercised in full by the Fully Exercising Investors, the Company shall immediately notify all of the Fully Exercising Investors and the Transferring Member of that fact.

 

(f)            Aggregation of Units. All Preferred Units held or acquired by Affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Section ‎10.03 and Section ‎10.04 and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

 

(g)            Consideration; Closing. If the consideration proposed to be paid for the Transfer Units is in property, services or other non-cash consideration, the value of the consideration shall be the Fair Market Value and as set forth in the Company Notice. If the Company or any Preferred Member cannot for any reason pay for the Transfer Units in the same form of non-cash consideration, the Company, such Preferred Member, as applicable, may pay the Fair Market Value cash value equivalent thereof, as set forth in the Company Notice or Purchase Notice, as applicable. The closing of the purchase of Transfer Units by the Company and/or the Preferred Members shall take place, and all payments from the Company shall have been delivered to the selling ROFR Subject by the later of (i) the date specified in the Transfer Notice as the intended date of the Proposed Transfer and (ii) forty-five (45) days after delivery of the Transfer Notice.

 

(h)            In the event of a conflict between this Agreement and any other agreement that may have been entered into by a ROFR Subject with the Company that contains a preexisting right of first refusal, the Company and the ROFR Subject acknowledge and agree that the terms of this Agreement shall control and the preexisting right of first refusal shall be deemed satisfied by compliance with this Section ‎10.03.

 

 

10.04          Right of Co-Sale.

 

(a)            Exercise of Right. If any Transfer Units subject to a Proposed Transfer are not purchased pursuant to Section ‎10.03 above and thereafter are to be sold to a Proposed Transferee (subject to Section ‎10.01), each respective Preferred Member may elect to exercise its Right of Co-Sale and participate on a pro rata basis in the Proposed Transfer as set forth in Section ‎10.04‎(b) below and otherwise on the same terms and conditions specified in the Transfer Notice. Each Preferred Member who desires to exercise its Right of Co-Sale (each, a “Participating Preferred Member”) must give the selling ROFR Subject, written notice to that effect within fifteen (15) days after the expiration of the Acceptance Period described above, and upon giving such notice such Preferred Member shall be deemed to have effectively exercised the Right of Co Sale.

 

(b)            Units Includable. Each Participating Preferred Member may include in the Proposed Transfer all or any part of such Participating Preferred Member’s Units equal to the product obtained by multiplying (i) the aggregate number of Transfer Units subject to the Proposed Transfer (excluding Units purchased by the Company or the Preferred Members pursuant to the Right of First Refusal) by (ii) a fraction, the numerator of which is the number of Units owned by such Participating Preferred Member immediately before consummation of the Proposed Transfer and the denominator of which is the total number of Units owned, in the aggregate, by all Participating Preferred Members immediately prior to the consummation of the Proposed Transfer, plus the number of Transfer Units held by the selling ROFR Subject, as applicable. To the extent one or more of the Participating Preferred Members exercise such right of participation in accordance with the terms and conditions set forth herein, the number of Transfer Units that the selling ROFR Subject, as applicable, may sell in the Proposed Transfer shall be correspondingly reduced.

 

(c)            Purchase Covenants. The parties hereby agree that the terms and conditions of any sale pursuant to this Section ‎10.04 will be memorialized in, and governed by, a written purchase and sale agreement with customary terms and provisions for such a transaction and the parties further covenant and agree to enter into such an agreement as a condition precedent to any sale or other transfer pursuant to this Section ‎10.04. Neither the Transfer of Transfer Units by the selling ROFR Subject, nor the Transfer of Units by a Participating Preferred Member shall be effective, unless, contemporaneously with such Transfer, the Proposed Transferee executes a counterpart to this Agreement, thereby agreeing to be bound to all the terms and conditions of this Agreement. If any Proposed Transferee or Transferees refuse(s) to purchase securities subject to the Right of Co-Sale from any Participating Preferred Member exercising its Right of Co-Sale hereunder, no ROFR Subject may sell any Transfer Units to such Proposed Transferee or Transferees unless and until, simultaneously with such sale, such ROFR Subject purchases all securities subject to the Right of Co-Sale from such Participating Preferred Member on the same terms and conditions (including the proposed purchase price) as set forth in the Transfer Notice.

 

(d)            Additional Compliance. If any Proposed Transfer is not consummated within sixty (60) days after receipt of the Transfer Notice by the Company, the ROFR Subject proposing the Proposed Transfer may not sell any Transfer Units unless they first comply again in full with each provision of Section ‎10.03 and this Section ‎10.04 with respect to such Proposed Transfer. The exercise or election not to exercise any right by any Preferred Member hereunder shall not adversely affect its right to participate in any other sales of Transfer Units subject to this Section ‎10.04.

 

 

10.05          Effect of Failure to Comply with Right of First Refusal and Right of Co-Sale.

 

(a)            Transfer Void; Equitable Relief. Any Proposed Transfer not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the Company. Each party hereto acknowledges and agrees that any breach of this Agreement would result in substantial harm to the other parties hereto for which monetary damages alone could not adequately compensate. Therefore, the parties hereto unconditionally and irrevocably agree that any non-breaching party hereto shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Transfer Units not made in strict compliance with this Agreement).

 

(b)            Violation of First Refusal Right. If any ROFR Subject becomes obligated to sell any Transfer Units to the Company or any Preferred Member under this Agreement and fails to deliver such Transfer Units in accordance with the terms of this Agreement, the Company or such Preferred Member, as applicable, may, at its option, in addition to all other remedies it may have, send to such ROFR Subject the purchase price for such Transfer Units as is herein specified and transfer to the name of the Company or such Preferred Member (or request that the Company effect such transfer in the name of a Preferred Member) on the Company’s books the Transfer Units to be sold.

 

(c)            Violation of Co-Sale Right. If any ROFR Subject purports to sell any Transfer Units in contravention of the Right of Co-Sale (a “Prohibited Transfer”), each Preferred Member who desires to exercise its Right of Co-Sale under Section ‎10.04 may, in addition to such remedies as may be available by law, in equity or hereunder, require such ROFR Subject to purchase from such Preferred Member the type and number of Units that such Preferred Member would have been entitled to sell to the Proposed Transferee under Section ‎10.04 had the Prohibited Transfer been effected pursuant to and in compliance with the terms of Section ‎10.04. The sale will be made on the same terms and subject to the same conditions as would have applied had the ROFR Subject not made the Prohibited Transfer, except that the sale (including, without limitation, the delivery of the purchase price) must be made within ninety (90) days after the Preferred Member learns of the Prohibited Transfer, as opposed to the timeframe proscribed in Section ‎10.04. Such ROFR Subject shall also reimburse each Preferred Member for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of the Preferred Member’s rights under Section ‎10.04.

 

 

10.06            Exempt Transfers.

 

(a)            Exempted Transfers. Notwithstanding the foregoing or anything to the contrary herein, the provisions of Sections ‎10.03 and ‎10.04 shall not apply: (a) in the case of a ROFR Subject that is an entity, upon a transfer by such ROFR Subject to its stockholders, members, partners or other equity holders, (b) to a repurchase of Transfer Units from a ROFR Subject by the Company at a price no greater than the lower of (A) Fair Market Value of such Units or (B) the price originally paid by such ROFR Subject for such Transfer Unit, in each case, pursuant to an agreement containing vesting and/or repurchase provisions approved by a majority of the Board of Managers, (c) to a pledge of Transfer Units that creates a mere security interest in the pledged Transfer Units, provided that the pledgee thereof agrees in writing in advance to be bound by and comply with all applicable provisions of this Agreement to the same extent as if it were the ROFR Subject making such pledge, or (d) in the case of a ROFR Subject that is a natural person, upon a transfer of Transfer Unit by such ROFR Subject made for bona fide estate planning purposes, either during his or her lifetime or on death by will or intestacy to his or her spouse, including any life partner or similar statutorily recognized domestic partner, child (natural or adopted), or any other direct lineal descendant of such ROFR Subject (or his or her spouse, including any life partner or similar statutorily recognized domestic partner) (all of the foregoing collectively referred to as “family members”), or any other person approved by unanimous consent of the Board of Managers, or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, such ROFR Subject or any such family members; provided that in the case of clauses (a), (c) or (d), the ROFR Subject shall deliver prior written notice to the Members of such pledge, gift or transfer and such Transfer Units shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such issuance, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a ROFR Subject (but only with respect to the securities so transferred to the transferee), including the obligations of a ROFR Subject with respect to Proposed Transfers of such Transfer Units pursuant ‎ARTICLE X; provided, further, in the case of any transfer pursuant to clause (a) or (d) above, that such transfer is made pursuant to a transaction in which there is no consideration actually paid for such transfer; and provided, further, that in no event shall any unvested Units be transferred pursuant to this Section ‎10.06‎(a).

 

(b)            Exempted Offerings. Notwithstanding the foregoing or anything to the contrary herein, the provisions of ‎ARTICLE X shall not apply to the sale of any Transfer Units (a) to the public in an offering pursuant to an effective registration statement under the Securities Act or (b) pursuant to a Change of Control.

 

(c)            Prohibited Transferees. Notwithstanding the foregoing, no ROFR Subject shall transfer any Transfer Unit to (a) any entity which, in the determination of the Board of Managers, directly or indirectly competes with the Company or (b) any customer, distributor or supplier of the Company, if the Board of Managers should determine that such transfer would result in such customer, distributor or supplier receiving information that would place the Company at a competitive disadvantage with respect to such customer, distributor or supplier (collectively, the “Prohibited Transferees”).

 

10.07            Drag-Along Right.

 

(a)            Definitions. A “Sale of the Company” means either: (a) a transaction or series of related transactions in which a Person, or a group of related Persons, that is or are not Affiliates of the Company, acquires from the Members, Units representing more than fifty percent (50%) of the outstanding voting power of the Company (a “Unit Sale”); or (b) a transaction that qualifies as a Change of Control.

 

 

(b)            Actions to be Taken. In the event that (A) the Requisite Preferred Holders and the Requisite Series B Preferred Holders as required under Section ‎3.05(c) (collectively, the “Selling Holders”) and (B) the Board of Managers approve a Sale of the Company in writing, specifying that this Section ‎10.07‎(b) shall apply to such transaction, then each Member hereby agrees:

 

(i)            if such transaction requires Member approval, with respect to all Units that such Member owns or over which such Member otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Units in favor of, and adopt, such Sale of the Company (together with any related amendment to this Agreement required in order 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;

 

(ii)           if such transaction is a Unit Sale, to sell the same proportion of Units beneficially held by such Member as is being sold by the Selling Holders to the Person to whom the Selling Holders propose to sell their Units, and, except as permitted in Section ‎10.07‎(c) below, on the same terms and conditions as the Selling Holders;

 

(iii)          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 Holders in order to carry out the terms and provisions of this Section ‎10.07, including without limitation executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, indemnity agreement, escrow agreement, consent, waiver, governmental filing, and any similar or related documents;

 

(iv)         not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any Units owned by such party or Affiliate in a voting trust or subject any Units to any arrangement or agreement with respect to the voting of such Units, unless specifically requested to do so by the acquirer in connection with the Sale of the Company;

 

(v)           to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale of the Company;

 

(vi)          if the consideration to be paid in exchange for the Units pursuant to this Section ‎10.07 includes any securities and due receipt thereof by any Member would require under applicable law (x) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities or (y) the provision to any Member of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Member in lieu thereof, against surrender of the Units which would have otherwise been sold by such Member, an amount in cash equal to the fair value (as determined in good faith by the Company) of the securities which such Member would otherwise receive as of the date of the issuance of such securities in exchange for the Units; and

 

 

(vii)         in the event that the Selling Holders, in connection with such Sale of the Company, appoint a member representative (the “Member Representative”) with respect to matters affecting the Members under the applicable definitive transaction agreements following consummation of such Sale of the Company, (x) to consent to (i) the appointment of such Member Representative, (ii) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations, and (iii) the payment of such Member’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Member Representative in connection with such Member Representative’s services and duties in connection with such Sale of the Company and its related service as the representative of the Members, and (y) not to assert any claim or commence any suit against the Member Representative or any other Member with respect to any action or inaction taken or failed to be taken by the Member Representative in connection with its service as the Member Representative, absent fraud or willful misconduct.

 

(c)            Exceptions. Notwithstanding the foregoing, a Member will not be required to comply with Section ‎10.07‎(b) above in connection with any proposed Sale of the Company (the “Proposed Sale”) unless:

 

(i)            any representations and warranties to be made by such Member in connection with the Proposed Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such Units, including but not limited to representations and warranties that (A) the Member holds all right, title and interest in and to the Units such Member purports to hold, free and clear of all liens and encumbrances, (B) the obligations of the Member in connection with the transaction have been duly authorized, if applicable, (C) the documents to be entered into by the Member have been duly executed by the Member and delivered to the acquirer and are enforceable against the Member in accordance with their respective terms and (D) neither the execution and delivery of documents to be entered into in connection with the transaction, nor the performance of the Member’s obligations thereunder, will cause a breach or violation of the terms of any agreement, law or judgment, order or decree of any court or governmental agency;

 

(ii)           the Member shall not be liable for the inaccuracy of any representation or warranty made by any other Person in connection with the Proposed Sale, other than for the inaccuracy of any representation or warranty made by the Company in connection with the Proposed Sale (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 Member of any of identical representations, warranties and covenants provided by all Members);

 

 

(iii)          the liability for indemnification, if any, of such Member in the Proposed Sale and for the inaccuracy of any representations and warranties made by the Company or its Members in connection with such Proposed Sale, is several and not joint with any other Person (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 Member of any of identical representations, warranties and covenants provided by all Members), and subject to the provisions of this Agreement, and is pro rata in proportion to the amount of consideration paid to such Member in connection with such Proposed Sale (in accordance with the provisions of this Agreement related to the allocation of the escrow);

 

(iv)         a Member’s liability shall be limited to such Member’s pro rata share (determined based on the respective proceeds payable to each Member in connection with such Proposed Sale in accordance with the provisions of this Agreement) of a negotiated aggregate indemnification amount that applies equally to all Members but that in no event exceeds the amount of consideration actually paid to such Member in connection with such Proposed Sale, except with respect to claims of fraud by such Member, the liability for which need not be limited as to such Member;

 

(v)           upon the consummation of the Proposed Sale: (A) except as provided in Section ‎10.07‎(b)(vi), each holder of each class or series of Units will receive the same form of consideration for their Units of such class or series as is received by other holders in respect of their Units of such same class or series of Units; and (B) the aggregate consideration receivable by all holders of Units shall be allocated among the holders of Series B Preferred Units, Series A Preferred Units, Common Units and Incentive Units in accordance with Section ‎8.01 of this Agreement as if such consideration were distributed to the Members pursuant thereto;

 

(vi)         except as provided in Section ‎10.07‎(b)‎(b)(vi), subject to clause (v) above, requiring the same form of consideration to be available to the holders of any single class or series of Units, if any holders of any Units are given an option as to the form and amount of consideration to be received as a result of the Proposed Sale, all holders of such Units will be given the same option; and

 

(vii)         no Member who is not an employee shall be required to agree to any restrictive covenant in connection with the Proposed Sale (including, without limitation, any covenant not to compete with or covenant not to solicit or hire customers, employees or suppliers of any party to the Proposed Sale) or any release of claims other than a release in customary form of claims arising solely in such Member’s capacity as a Member of the Company.

 

 

(d)            Irrevocable Proxy and Power of Attorney. Each party to this Agreement hereby constitutes and appoints as the proxies of the party and hereby grants a power of attorney to the President of the Company, and a designee of the Selling Holders, and each of them, with full power of substitution, with respect to the matters set forth in this Section ‎10.07, and hereby authorizes each of them to represent and to vote, in each case, if and only if the party (i) fails to vote or (ii) attempts to vote (whether by proxy, in person or by written consent), in a manner which is inconsistent with the terms of this Agreement, all of such party’s Units and in accordance with the terms and provisions of this Section ‎10.07 of this Agreement or to take any action reasonably necessary to effect this Section ‎10.07. Each of the proxy and power of attorney granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the Company and the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until this Agreement terminates. Each party hereto hereby revokes any and all previous proxies or powers of attorney with respect to the Units and shall not hereafter, unless and until this Agreement terminates, purport to grant any other proxy or power of attorney with respect to any of the Units, deposit any of the Units into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Units, in each case, with respect to any of the matters set forth herein. This Section 10.07(d) shall not apply to the Wellington Investors; provided, however, that the Wellington Investors shall not be relieved of any of their voting obligations under this Agreement.

 

(e)            Specific Enforcement. Each party acknowledges and agrees that each party hereto will be irreparably damaged in the event any of the provisions of this Section ‎10.07 are not performed by the parties in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Company and each Member shall be entitled to an injunction to prevent breaches of this Section ‎10.07, and to specific enforcement of this Agreement and its terms and provisions in any action instituted in any court of the United States or any state having subject matter jurisdiction.

 

(f)            Remedies Cumulative. All remedies, either under this Section ‎10.07 or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

10.08         Effect of Non-Compliance. Any attempted Transfer not permitted by and in compliance with this ‎ARTICLE X shall be null and void, and the Company shall not recognize the attempted purchaser, assignee, or transferee for any purpose whatsoever, and the Member attempting such Transfer shall have breached this Agreement for which the Company shall have all remedies available for breach of contract.

 

10.09          Restrictions on Sales of Control of the Company. No Member shall be a party to any Unit Sale unless all holders of Preferred Units are allowed to participate in such transaction and the consideration received pursuant to such transaction is allocated among the parties thereto in the manner specified in Section ‎8.01 of this Agreement in effect immediately prior to the Unit Sale (as if such transaction were a Change of Control), unless the Requisite Series A Preferred Holders and Requisite Series B Preferred Holders elect otherwise by written notice given to the Company at least ten (10) days prior to the effective date of any such transaction or series of related transactions.

 

10.10         Substitution of Members. A transferee of a Unit shall have the right to become a substitute Member only with the consent of the Board of Managers. The admission of a substitute Member shall not result in the release of the Member who assigned the Unit from any liability that such Member may have to the Company.

 

 

10.11          Conversion to Corporation and Registration Rights.

 

(a)            The Members acknowledge that the Company may need to convert into a corporation organized under the DGCL at some future date in connection with preparation for an IPO or in order to facilitate a financing or for tax purposes or for some other reason. Whether the Company is directly converted into a corporation or indirectly converted into a corporation pursuant to a merger or reorganization, any conversion of the Company into a corporation must be approved by (i) the Board of Managers, and (ii) the Requisite Preferred Holders. If the conversion into a corporation is approved in accordance with the preceding sentence, all Members will take necessary and appropriate steps to implement a corporate conversion of the Company, whether pursuant to conversion, merger or reorganization of the Company (“Corporate Conversion”) which may include, as an example, contribution of their Units to a newly formed corporation or distribution of a subsidiary of the Company that owns all material assets of the Company and its subsidiaries to the Members in liquidation of the Company (in each case, such surviving entity, “Holdings”) on terms that preserve and reflect the substantive economic rights of their Units; provided, that in connection with a conversion to effect an IPO, if such Units are entitled to distributions under Section ‎8.01(b), then, following the consummation of such IPO, such Unit shall be converted to a number of shares of common stock of Holdings equal to such number of shares of common stock as would provide all Members of such Units so entitled to distributions under Section ‎8.01(b) with an aggregate ownership percentage in Holdings equal to the Percentage Interest attributable to such Units (assuming full vesting of Units for this purpose and no issuance of additional equity in connection with an IPO), allocated on a pro rata basis among such Members in accordance with their respective Percentage Interest (assuming full vesting of Units for this purpose), in each case, subject to adjustment to such Percentage Interests as contemplated by the next proviso (the “Initial Equity Allocation”); provided, further, notwithstanding the foregoing, the Board of Managers shall modify the economic rights associated with any shares issued to holders of Incentive Units to preserve the status of such Units as “profits interests” within the meaning of IRS Revenue Procedures 93-27 and 2001-43 and to reduce the absolute number of shares of common stock of Holdings issued in respect of Incentive Units (the amount of the reduction of the common equity of Holdings, the “Holdings Reduced Equity”) at the time of a Corporate Conversion (unless otherwise determined by the Board of Managers), provided that the aggregate value of such shares of common stock of Holdings, as determined by the Board of Managers in its discretion, is equal in value to the amount of proceeds, if any, distributable to such Incentive Units under Section ‎8.01(b) in the event of a hypothetical liquidating distribution pursuant to Section ‎11.02 if the Company was sold for an aggregate purchase price equal to its then-current enterprise value (with any such Holdings Reduced Equity being allocated to the Members (other than any Member holding Incentive Units in respect of their Incentive Units) in accordance with their respective Percentage Interests (assuming full vesting of Units for this purpose, but excluding the Incentive Units) after taking into account the Initial Equity Allocation as part of the same transaction); provided, further, that, any such shares of common stock issued with respect to any Units and Incentive Units subject to vesting at the time of such IPO shall continue to vest on the same schedule as such Units or Incentive Units. For the avoidance of doubt, it is the intention of the parties that any shares or the number of shares in Holdings to be received pursuant to this Section ‎10.11 will afford to the party receiving the same economic interest, rights, benefits and obligations as were associated with the Units held by such party immediately prior to such Corporate Conversion, both generally and relative to the holders of other shares of Holdings (but subject to the terms hereof, including the proviso in the immediately preceding sentence). In addition, the consent to any Corporate Conversion pursuant to the terms of this Section ‎10.11 shall be conclusive and binding on all Members, and the Members hereby waive any dissenters’ or appraisal rights that they may have pursuant to the Act, and agree to take any actions necessary and appropriate (including voting Units) in order to facilitate and effect such Corporate Conversion. The Company and the Members agree to use commercially reasonable efforts to effect such Corporate Conversion in a manner intended to be tax-free for the holders of the Units to the extent permitted by any applicable law.

 

 

(b)            In connection with a Corporate Conversion approved by the Board of Managers and the Requisite Preferred Holders, each Member hereby agrees, if requested by the Company and such transaction requires Member approval, with respect to all Units that such Member owns or over which such Member otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all Units in favor of, and adopt, such Corporate Conversion and any related documents (including any documents required to effect the reorganization 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 Corporate Conversion.

 

(c)            Promptly following a Corporate Conversion, the Company shall enter into the Registration Rights Agreement attached hereto as Exhibit A with the Preferred Members (in which the Preferred Members will be “Investors” thereunder); provided, however, if the Corporate Conversion is not effected in connection with an IPO, the Members shall also enter into such additional agreements as are necessary to provide the Members substantially similar obligations and rights as set forth in this Agreement (including customary a voting agreement, right of first refusal and co-sale agreement and investor rights agreement).

 

10.12          Preemptive Rights. Subject to the terms and conditions of this Section ‎10.12 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Major Investor. A Major Investor shall be entitled to apportion the right of first offer hereby granted to it among itself and its Affiliates in such proportions as it deems appropriate.

 

(a)            The Company shall give notice (the “Offer Notice”) to each such Major Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities, including a summary of the rights and privileges of such New Securities.

 

(b)            By notification to the Company within twenty (20) days after the Offer Notice is given (provided, that with the consent of the Requisite Preferred Holders, the Company may reduce such period to respond to no less than five (5) days), each such Major Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Preferred Units (as adjusted by the applicable Adjustment Ratio) then held by such Major Investor bears to the total number of Units (as adjusted by the applicable Adjustment Ratio) then outstanding (excluding all authorized unissued Incentive Units). If the right to purchase the New Securities has been exercised by the Major Investors with respect to some but not all of the New Securities by the end of the twenty (20) day period specified above (or such shorter period (to be no less than five (5) days) as approved by the Requisite Preferred Holders), then the Company shall send written notice (the “Secondary Offer Notice”) to those Major Investors who fully exercised their preemptive rights within the initial notice period. During the ten (10) day period commencing after the Company has given such notice (provided, that with the consent of the Requisite Preferred Holders, the Company may reduce such period to respond to no less than five (5) days), each such Major Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of units specified above, up to that portion of the New Securities for which Major Investors were entitled to subscribe but were not subscribed for which is equal to the proportion that the Preferred Units (as adjusted by the applicable Adjustment Ratio) then held by such Fully Exercising Investor bears to the Preferred Units (as adjusted by the applicable Adjustment Ratio) and Common Units then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Section ‎10.12‎(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section ‎10.12‎(c).

 

 

(c)            If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section ‎10.12‎(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Section ‎10.12‎(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Major Investors in accordance with this Section ‎10.12.

 

(d)            Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section ‎10.12, the Company may elect to give notice to the Major Investors within thirty (30) days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Major Investor shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Major Investor, maintain such Major Investor’s percentage-ownership position, calculated as set forth in Section ‎10.12‎(b) before giving effect to the issuance of such New Securities.

 

(e)            The covenants set forth in Sections ‎10.03, ‎10.04, ‎10.06, ‎10.09 and ‎10.12 shall terminate and be of no further force or effect (i) immediately before the consummation of an IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Change of Control, dissolution or liquidation of the Company, whichever event occurs first.

 

 

10.13          Lock-Up.

 

(a)            Each Member hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the IPO by the Company (or its successor), and ending on the date specified by the Company (or its successor) and the managing underwriter (such period not to exceed one hundred eighty (180) days): (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option; right; or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any equity securities of the Company (or its successor) held immediately before the effective date of the registration statement for the IPO or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such equity securities of the Company (or its successor), whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of equity securities of the Company (or its successor) or other securities, in cash, or otherwise.

 

(b)            The foregoing provisions of this Section ‎10.13 (i) shall apply only to the IPO; (ii) shall not apply to (A) transactions (including, without limitation, any swap, hedge or similar agreement or arrangement) or announcements, in each case, relating to equity securities of the Company (or its successor) acquired in the IPO or securities acquired in open market or other transactions from and after the IPO or that otherwise do not involve or relate to equity securities of the Company (or its successor) owned by a Member or its underlying holder prior to the IPO, notwithstanding any voluntary or required filings that may be made in connection therewith under Section 16(a) of the Exchange Act, (B) the transfer of any shares to Affiliates of the Member, or (C) the sale of any shares to an underwriter pursuant to an underwriting agreement for such IPO; and (iii) shall be applicable to the Members (or their transferees) only if all Officers and Managers and holders of at least one percent (1%) of the outstanding equity securities of the Company (or its successor) are subject to the same restrictions. The underwriters in connection with the IPO are intended third party beneficiaries of this Section ‎10.13 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Member further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with the IPO that are consistent with this Section ‎10.13 or that are necessary to give further effect thereto. In the event that the Company or the managing underwriter waives or terminates any of the restrictions contained in this Section ‎10.13 or in a lock-up agreement with respect to the securities of any Member, Officer, Manager or greater than one-percent equityholder of the Company (in any such case, the “Released Securities”), the restrictions contained in this Section ‎10.13 and in any lock-up agreements executed by the Preferred Members shall be waived or terminated, as applicable, to the same extent and with respect to the same percentage of securities of each Preferred Member as the percentage of Released Securities represent with respect to the securities held by the applicable Member, Officer, Manager or greater than one-percent equityholder.

 

(c)            In order to enforce the covenant in Section ‎10.13‎(a) above, the Company may impose stop-transfer instructions with respect to the equity securities of each Member (and transferees and assignees thereof) until the end of such restricted period.

 

 

ARTICLE XI
DISSOLUTION, LIQUIDATION, AND TERMINATION; INCORPORATION

 

11.01          Dissolution. The Company shall be dissolved upon (i) the entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act or (ii) the decision of the Board of Managers, the Requisite Preferred Holders and the Requisite Series B Preferred Holders.

 

11.02          Liquidating Distributions. In settling accounts upon dissolution, winding up and liquidation of the Company, the assets of the Company shall be applied and distributed as expeditiously as possible in the following order:

 

(a)            To pay (or make reasonable provision for the payment of) all creditors of the Company, including, to the extent permitted by law, Members or other Affiliates that are creditors, in satisfaction of liabilities of the Company in the order of priority provided by law, including expenses relating to the dissolution and winding up of the Company, discharging liabilities of the Company, distributing the assets of the Company and terminating the Company as a limited liability company in accordance with this Agreement and the Act; and

 

(b)            To the Members in accordance with Section ‎8.01(b), subject to the other provisions of ‎ARTICLE VIII and Section ‎13.01.

 

11.03          Allocation of Sale Proceeds.

 

(a)            Notwithstanding anything to the contrary contained herein, net proceeds paid or deemed paid in connection with a Sale Event (which shall include the aggregate consideration payable to holders of Units of the Company or received by the Company in connection with any Change of Control), after the full payment to any creditors of the Company and the establishment of reasonable reserves for contingent liabilities of the Company, to the extent required by law or in the Board of Managers’ reasonable discretion, shall be allocated among the participating Members by treating such proceeds as distributions under Section ‎8.01(b) hereof, subject to the other provisions of ‎ARTICLE VIII and Section ‎13.01. For purposes hereof, a “Sale Event” means a bona fide, negotiated transaction in which the Company has determined to affect a Change of Control.

 

(b)            To the extent that the proceeds from a Sale Event are in a form other than cash, such non-cash proceeds shall be, in the Board of Managers’ discretion, either (i) reduced to cash or some other easily divisible and reasonably liquid asset for subsequent distribution among the Members in the order provided in Section ‎8.01(b) or (ii) distributed in-kind among the Members in the order provided in Section ‎8.01(b), in each case subject to the other provisions of ‎ARTICLE VIII and Section ‎13.01. To the extent that non-cash proceeds from a Sale Event are not reduced to cash or other liquid asset and are distributed in-kind to the Members, distributions under Section ‎8.01(b) shall be made in a manner such that all Members receive their pro rata share of the cash proceeds from such transaction and each class or type of non-cash proceeds (unless otherwise agreed to by the Members). The value of such non-cash proceeds shall be equal to the Fair Market Value of the non-cash proceeds at the time of the distribution.

 

(c)            To the extent any proceeds of a Sale Event are set aside as a reserve against contingent liabilities and are not used to satisfy such liabilities and are subsequently distributed, such unused proceeds shall be distributed to the Members in the order provided in Section ‎8.01(b), subject to the other provisions of ‎ARTICLE VIII and Section ‎13.01, as if such amounts had been distributed immediately following the receipt of the proceeds of the Sale Event and no such reserves had been established, but taking into account all other distributions made prior to or contemporaneously with such distribution of unused reserves.

 

 

(d)            To the extent that any portion of the consideration payable to the Members of the Company in any Sale Event is payable only upon satisfaction of contingencies (the “Additional Consideration”), the agreement governing such Sale Event shall provide that (i) the portion of such consideration that is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the participating Members by treating such proceeds as distributions under Section ‎8.01(b) hereof and shall take into account any amounts previously distributed pursuant to Section ‎8.01(b), as if the Initial Consideration were the only consideration payable in connection with such Sale Event; and (ii) any Additional Consideration which becomes payable to the Members upon satisfaction of such contingencies shall be allocated among the participating Members by treating such proceeds as distributions under Section ‎8.01(b) hereof after taking into account the previous payment of the Initial Consideration and any other amounts previously distributed pursuant to Section ‎8.01(b), in each case subject to the other provisions of ‎ARTICLE VIII and Section ‎13.01. For the purposes of this Section ‎11.03‎(d), consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Sale Event shall be deemed to be Additional Consideration.

 

11.04          Orderly Winding Up. Notwithstanding anything herein to the contrary, upon winding up and liquidation, if required to maximize the proceeds of liquidation, the Members may transfer the assets of the Company to a liquidating trust or trustees.

 

 

ARTICLE XII
DEFINITIONS

 

12.01            Terms Defined Elsewhere in the Agreement. For purposes of this Agreement, the following terms have the meaning set forth in the Section indicated:

 

Term	Section
Acceptance Period	10.03(d)
Act	Preamble
Additional Consideration	11.03(d)
Additional Units	12.02
Adjustment Price	12.02
Adjustment Ratio	12.02
Affiliate	12.02
Agreement	Preamble
As Adjusted Voting Basis	12.02
Board of Managers	1.01
Board Observers	3.02(f)
Budget	2.08(a)(iv)
Capital Account	12.02
Capital Contribution	12.02
CEO	4.01
CEO Manager	3.02(b)(iii
Certificate	1.01
Change of Control	12.02
Code	12.02
Common Units	2.10(a)
Company	Preamble
Company Notice	12.02
Company Refusal Period	10.03(c)
Company Undersubscription Notice	10.03(e)

 

 

Company’s Expiration Notice	10.03(c)
Control	12.02
Convertible Securities	8.06(e)(i)
Corporate Conversion	10.11(a)
Covered Persons	3.10(b)
Deep Track	12.02
Deep Track Board Observer	3.02(f)
DGCL	5.01
Disqualification Event	2.02
Disqualified Designee	2.02
Economic Capital Account	12.02
Exchange Act	12.02
Exempted Securities	12.02
Existing Agreement	Preamble
Expenses	5.06(b)
Fair Market Value	12.02
Fairmount Managers	3.02(b)(ii)
Fairmount Members	12.02
FCPA	5.13
Fidelity Member	12.02
Fiscal Year	1.04
Fully Exercising Investors	10.03(e)
Holdings	10.11(a)
Holdings Reduced Equity	10.11(a)
Imputed Underpayment Amount	13.01(b)

 

 

Incentive Units	2.10(a)
Indemnified Person	5.06(a)
Initial Consideration	11.03(d)
Initial Equity Allocation	10.11(a)
Investor Business Opportunity	3.10(b)
Investor Counsel	5.11
Investor Notice Period	10.03(e)
IPO	12.02
Major Investor	12.02
Manager	12.02
Mandatory Conversion Time	8.12(a)
Member	Preamble
Member Representative	10.07(b)(vii)
New Securities	12.02
Offer Notice	10.12(a)
Options	8.06(e)(i)
Officer	4.01
OrbiMed	12.02
Other Indemnitors	5.02
Paragon Member	12.02
Participating Preferred Member	10.04(a)
Partnership Representative	3.04(h)
Pass -Through Entities	9.08
Percentage Interest	12.02
Permitted Transfer	10.01(a)

 

 

Permitted Transferee	10.01(a)
Person	12.02
Preferred Member	12.02
President	4.01
Proceeding	5.06(c)
Proceeds	8.01(b)
Proceeds Available for Distribution	12.02
Prohibited Transfer	10.05(c)
Prohibited Transferees	10.06(c)
Proposed Sale	10.07(c)
Proposed Transfer	12.02
Proposed Transferee	12.02
Purchase Agreement	Preamble
Purchase Notice	10.03(d)
Qualified IPO	8.12(a)
RA Capital	12.02
Released Securities	10.13(b)
Requisite Preferred Holders	12.02
Requisite Series A Preferred Holders	12.02
Requisite Series B Preferred Holders	12.02
Right of Co-Sale	12.02
Right of First Refusal	12.02
ROFR Subject	10.03(a)
RTW Funds	12.02
RTW Board Observer	3.02(f)

 

 

Rule 506(d) Related Party	12.02
Sale Event	11.03(a)
Sale of the Company	10.07(a)
Secondary Offer Notice	10.12(b)
Secretary	4.01
Securities Act	2.02
Selling Holders	10.07(b)
Series A Adjustment Price	12.02
Series A Adjustment Ratio	12.02
Series A As Adjusted Voting Basis	2.10(a)
Series A Original Issuance Price	12.02
Series A Preferred Units	12.02
Series B Adjustment Price	12.02
Series B Adjustment Ratio	12.02
Series B As Adjusted Voting Basis	2.10(a)
Series B Original Issuance Price	12.02
Series B Preferred Units	Preamble
Strike Price	2.10(f)
Target Balance	12.02
Tax Distribution	8.02(a)
Tax Liability	8.02(a)
Tax Rate	8.02(a)
Transfer	10.01(a)
Trade Secrets	12.02
Transferring Member	12.02

 

 

Transfer Notice	12.02
Transfer Units	12.02
Transferor’s Owner	10.02(b)(iv)
Treasurer	4.01
Treasury Regulation	12.02
Unit Sale	10.07(a)
Units	2.10(a)
Units Deemed Outstanding	12.02
United States Person	10.02(b)(iv)
Unpaid Series A Preferred Unit Preference Amount	12.02
Unpaid Series B Preferred Unit Preference Amount	12.02
USRPHC	9.07
Venrock Managers	3.02(b)(i)
Voting Majority	2.03(b)
Wellington Investors	12.02
Withholding Payment	13.01(a)
Xontogeny	12.02

 

12.02          Other Definitions. For purposes of this Agreement the following terms have the following meanings:

 

“Additional Units” means all Units issued or deemed to be issued by the Company after the date hereof, other than Exempted Securities.

 

“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified, including without limitation any general partner, limited partner, member, managing member, manager, employee, officer or director of such Person and any venture capital fund or other investment fund now or hereafter existing that is Controlled by or under common Control with one or more general partners or managing members of, or shares the same management company or investment adviser with, such Person.

 

 

 

“Adjustment Price” means the Series A Adjustment Price and the Series B Adjustment Price, as applicable.

 

“Adjustment Ratio” means the Series A Adjustment Ratio and the Series B Adjustment Ratio, as applicable.

 

“As Adjusted Voting Basis” means, when calculating voting thresholds hereunder, taking into account the Series A As Adjusted Voting Basis and the Series B As Adjusted Voting Basis, as applicable.

 

“Capital Account” means the capital account maintained by the Company for each Member as described in Section ‎6.02.

 

“Capital Contribution” means, for any Member, all cash and the agreed Fair Market Value of the property contributed by the Member to the Company.

 

“Change of Control” means (i) a merger or consolidation in which (A) the Company is a constituent party or (B) a subsidiary of the Company is a constituent party and the Company issues equity ownership interests pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the equity ownership interests of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of equity securities that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the equity ownership of the surviving or resulting entity or if the surviving or resulting entity is a wholly owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity or (ii) (A) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets or intellectual property (other than an license in a field of use not central to the Company’s business) of the Company and its subsidiaries (taken as a whole) or (B) the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Company Notice” means written notice from the Company notifying the selling ROFR Subject that the Company intends to exercise its Right of First Refusal as to some or all of the Transfer Units with respect to any Proposed Transfer.

 

“Control” of a Person means the possession, direct or indirect, of the power to vote in excess of 50% of the voting power of such Person, to appoint the majority of the managers, general partners or the equivalent of such Person, or to direct or cause the direction of the management and policies of such Person (e.g., as managing member or in a similar capacity but not including an advisory or management agreement (in the case of a managed account)).

 

 

“Deep Track” means Deep Track Biotechnology Master Fund, Ltd.

 

“Economic Capital Account” means, with respect to any Member, such Member’s Capital Account balance as of the date of determination, after crediting to such Capital Account any amounts that the Member is deemed obligated to restore under Treasury Regulations Section 1.704-2.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exempted Securities” means: (i) Units issued as a distribution on the Preferred Units, (ii) Units issued by reason of a unit split, split-up or other distribution on Units that are covered by Section ‎8.07, (iii) Incentive Units issued by the Board of Managers; (iv) Units issued in an IPO, (v) Units issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Managers and the principal purpose of which is not raising equity capital; (vi) Units issued to suppliers or third-party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Managers; (vii) Units issued as acquisition consideration pursuant to the acquisition of another entity by the Company by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided that such transaction and such issuances are approved by the Board of Managers; or (viii) Units issued in connection with sponsored research, collaboration, technology license, development, marketing or other similar agreements or strategic partnerships approved by the Board of Managers.

 

“Fair Market Value” means, with respect to any asset, as of the date of determination, the cash price (as determined in the reasonable discretion of the Board of Managers) at which a willing seller would sell, and a willing buyer would buy, each being apprised of all relevant facts and neither acting under compulsion, such asset in an arm’s-length negotiated transaction with an unaffiliated third party without time constraints.

 

“Fairmount Members” means Fairmount Healthcare Fund LP, Fairmount Healthcare Fund II LP and their Affiliates.

 

“Fidelity Member” means any Member advised or sub-advised by Fidelity Management & Research Company LLC or one of its Affiliates.

 

“IPO” means the closing of the Company’s (or its successor) first firm commitment underwritten initial public offering of Common Units (or equivalent common stock or common equity) pursuant to a registration statement filed under the Securities Act.

 

“Major Investor” means any Member who, together with its Affiliates, holds at least (i) 2,500,000 Series A Preferred Units (as adjusted for any unit split, combination, or other recapitalization or reclassification effected after the date hereof) or (ii) 3,026,121 Series B Preferred Units (as adjusted for any unit split, combination, or other recapitalization or reclassification effected after the date hereof).

 

 

“Manager” means a member of the Company’s Board of Managers.

 

“New Securities” means any equity securities (or securities exercisable for or convertible into equity securities) of any kind or class issued by the Company after the date hereof; provided, however, that none of the following shall constitute New Securities for any purpose hereunder: (i) Incentive Units; or (ii) Exempted Securities.

 

“OrbiMed” means OrbiMed Private Investments IX, LP and OrbiMed Genesis Master Fund, L.P.

 

“Paragon Member” means each of Paragon Therapeutics, Inc., and Paragee Holding, LLC.

 

“Percentage Interest” of each Member at any time means (i) the sum of (A) the number of Series A Preferred Units held by such Member at such time multiplied by the Series A Adjustment Ratio applicable to the Series A Preferred Units then in effect, (B) the number of Series B Preferred Units held by such Member at such time multiplied by the Series B Adjustment Ratio applicable to the Series B Preferred Units then in effect, (C) the number of Common Units held by such Member at such time and (D) the number of Incentive Units held by such Member at such time divided by (ii) the sum of (A) the number of Series A Preferred Units then outstanding at such time multiplied by the Series A Adjustment Ratio applicable to the Series A Preferred Units then in effect, (B) the number of Series B Preferred Units then outstanding at such time multiplied by the Series B Adjustment Ratio applicable to the Series B Preferred Units then in effect, (C) the number of Common Units then outstanding at such time and (D) the number of Incentive Units then outstanding at such time; provided that Units that are unvested at such time shall not be included in the calculation of Percentage Interest for any Member.

 

“Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, estate, unincorporated organization, governmental or regulatory body or other entity.

 

“Preferred Member” means a Member holding Preferred Units.

 

“Preferred Units” means Series A Preferred Units and Series B Preferred Units.

 

“Proceeds Available for Distribution” means all cash amounts received (excluding proceeds from Capital Contributions) after deduction for payments of operating expenses, other cash expenditures, and any amounts set aside for the restoration, increase or creation of reasonable reserves.

 

“Proposed Transfer” means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering of any Transfer Units (or any interest therein) proposed by any ROFR Subject.

 

 

“Proposed Transferee” means the prospective purchaser or transferee of the Transfer Units.

 

“RA Capital” means RA Capital Nexus Fund III, L.P., RA Capital Healthcare Fund, L.P. and their Affiliates.

 

“Requisite Preferred Holders” means the holders of a majority of the outstanding Preferred Units, voting together as a single class on an As Adjusted Voting Basis.

 

“Requisite Series A Preferred Holders” means the holders of a majority of the outstanding Series A Preferred Units.

 

“Requisite Series B Preferred Holders” means the holders of a majority of the outstanding Series B Preferred Units.

 

“Right of Co-Sale” means the right, but not an obligation, of a Member to participate in a Proposed Transfer on the terms and conditions specified in the Transfer Notice.

 

“Right of First Refusal” means the right, but not an obligation, of the Company, first, or the Preferred Members or their Permitted Transferees or assigns, second, to purchase some or all of the Transfer Units with respect to a Proposed Transfer pursuant to Section 10.03, on the terms and conditions specified in the Transfer Notice.

 

“RTW” means RTW Investments, LP, RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd., RTW Venture Fund Limited, and other entities managed by or Affiliates of the forgoing.

 

“RTW Funds” means RTW Master Fund, Ltd., RTW Innovation Master Fund, Ltd. and RTW Venture Fund Limited.

 

“Rule 506(d) Related Party” means a person or entity covered by the “Bad Actor disqualification” provision of Rule 506(d) of the Securities Act.

 

“Series A Adjustment Price” shall initially be equal to $1.00 for the Series A Preferred Units, subject to adjustment as provided in Section ‎8.07.

 

“Series A Adjustment Ratio” shall equal the Series A Original Issuance Price divided by the Series A Adjustment Price then in effect for such Series A Preferred Units.

 

“Series A Original Issuance Price” means $1.00 per Series A Preferred Unit (as adjusted for any unit split, combination, or other recapitalization or reclassification with respect to the Series A Preferred Units effected after the date hereof).

 

“Series A Preferred Units” means the Company’s Series A Preferred Units.

 

“Series B Adjustment Price” shall initially be equal to $3.30456 for the Series B Preferred Units, subject to adjustment as provided in Section ‎8.07.

 

 

“Series B Adjustment Ratio” shall equal the Series B Original Issuance Price divided by the Series B Adjustment Price then in effect for such Series B Preferred Units.

 

“Series B Original Issuance Price” means $3.30456 per Series B Preferred Unit (as adjusted for any unit split, combination, or other recapitalization or reclassification with respect to the Series B Preferred Units effected after the date hereof).

 

“Target Balance” means, with respect to any Member as of the close of any period for which allocations are made under ‎ARTICLE VIII, the amount such Member would receive (or be required to contribute) in a hypothetical liquidation of the Company as of the close of such period, assuming for purposes of any hypothetical liquidation (i) a sale of all of the assets of the Company at prices equal to their then book values (as maintained by the Company for purposes of, and as maintained pursuant to, the capital account maintenance provisions of Treasury Regulations Sections 1.704-1(b)(2)(iv)), and (ii) the distribution of the net proceeds thereof to the Members pursuant to the provisions of Section ‎8.01 (after the payment of all actual Company indebtedness, and any other liabilities related to the Company’s assets, limited, in the case of non-recourse liabilities, to the collateral securing or otherwise available to satisfy such liabilities) treating all outstanding unvested Incentive Units as vested Incentive Units in compliance with the requirements of Section 4.01 of IRS Revenue Procedure 2001-43.

 

“Trade Secrets” means all secret, proprietary or confidential information regarding the Company or the Company’s activities, including any and all information not generally known to, or ascertainable by, Persons not employed by the Company, the disclosure or knowledge of which would permit those Persons to derive actual or potential material economic value therefrom or to cause material economic or financial harm to the Company and shall include, but not be limited to, customer lists, pricing information, customer and supplier contacts, technical information regarding Company processes, services and process and service development, information concerning Company methods, current development and expansion or contraction plans of the Company, information concerning the legal affairs of the Company and information concerning the financial affairs of the Company. “Trade Secrets” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating a legal right or privilege of the Company. This definition shall not limit any definition of “trade secrets” or any equivalent term under state or federal law.

 

“Transferring Member” means a Member making a Proposed Transfer.

 

“Transfer Notice” means written notice from a ROFR Subject setting forth the terms and conditions of a Proposed Transfer.

 

“Transfer Units” means Common Units (other than Common Units converted from Preferred Units) and Incentive Units owned by a ROFR Subject, or issued to a ROFR Subject after the date hereof (including, without limitation, in connection with any unit split, recapitalization, reorganization, or the like).

 

“Treasury Regulation” means a regulation issued by the United States Department of the Treasury and relating to a matter arising under the Code.

 

 

“Units Deemed Outstanding” means, at any time, the sum of (a) the number of Series A Preferred Units outstanding at such time multiplied by the Series A Adjustment Ratio applicable to the Series A Preferred Units then in effect, (b) the number of Series B Preferred Units outstanding at such time multiplied by the Series B Adjustment Ratio applicable to the Series A Preferred Units then in effect and (c) all other Units then outstanding (including Common Units and Incentive Units, whether or not vested).

 

“Unpaid Series A Preferred Unit Preference Amount” means with respect to a Series A Preferred Unit at a particular time of determination, the excess of (i) the amount of Series A Original Issuance Price reduced, but not below zero dollars ($0), by (ii) the aggregate amount of distributions made with respect to such Series A Preferred Unit pursuant to Section ‎8.01(b)(ii).

 

“Unpaid Series B Preferred Unit Preference Amount” means with respect to a Series B Preferred Unit at a particular time of determination, the excess of (i) the amount of Series B Original Issuance Price reduced, but not below zero dollars ($0), by (ii) the aggregate amount of distributions made with respect to such Series B Preferred Unit pursuant to Section ‎8.01(b)(i).

 

“Venrock Members” means Venrock Healthcare Capital Partners EG, L.P., Venrock Healthcare Capital Partners III, L.P., and VHCP Co-Investment Holdings III, LLC, and their Affiliates.

 

“Wellington Investors” means Members, or permitted transferees of Units held by Members, that are advisory or subadvisory clients of Wellington Management Company LLP, including, without limitation Wellington Biomedical Innovation Master Investors (Cayman) II L.P.

 

“Xontogeny” means Perceptive Xontogeny Venture Fund II, LP.

 

ARTICLE XIII
GENERAL PROVISIONS

 

13.01        Offset and Withholding.

 

(a)            The Company shall at all times be entitled to make payments with respect to any Member in amounts required to discharge any obligation of the Company to withhold from a distribution or make payments to any governmental authority with respect to any foreign, federal, state or local tax liability of such Member arising as a result of such Member’s interest in the Company (a “Withholding Payment”). In addition, if the Company is obligated to pay any taxes (including penalties, interest and any addition to tax) to any governmental authority that is specifically attributable to a Member, such Member’s transferor or as a result of any Transfer of an interest in the Company, including, without limitation, on account of Sections 864 or 1446 of the Code, then (i) such Persons shall indemnify the Company in full for the entire amount paid or payable, (ii) the Board of Managers may offset future distributions from such Persons pursuant to Section ‎8.01 to which such Person is otherwise entitled under this Agreement against such Person’s obligation to indemnify the Company under this Section ‎13.01‎(a) and (iii) such amounts shall be treated as a Withholding Payment pursuant to this Section ‎13.01‎(a) with respect to both such former Member and such former Member’s transferee(s), as applicable. Any Withholding Payment made from funds withheld upon a distribution will be treated as distributed to such Member for all purposes of this Agreement. Any other Withholding Payment will be deemed to be a recourse loan by the Company to the relevant Member. The amount of Withholding Payment treated as a loan, plus interest thereon from the date of each such Withholding Payment until such amount is repaid to the Company at an interest rate of six percent (6%) per annum, shall be repaid to the Company upon demand by the Company and may be repaid by the relevant Member at any time; provided, however, that in the Board of Managers’ sole discretion, any such amount may be repaid by deduction from any distributions payable to such Member pursuant to this Agreement (with such deduction treated as an amount distributed to the Member) as determined by the Board of Managers in its sole discretion.

 

 

(b)            Any imputed underpayment within the meaning of Code Section 6225 paid (or payable) by the Company as a result of an adjustment with respect to any Company item, including any interest or penalties with respect to any such adjustment (collectively, an “Imputed Underpayment Amount”), shall be treated as if it were paid by the Company as a Withholding Payment with respect to the appropriate Members. The Board of Managers, in consultation with the Company’s accountants, shall reasonably determine, in good faith, the portion of any Imputed Underpayment Amount that is attributable to each Member, with the intent of allocating the liability for such amounts as if the Company had elected the “push out procedure” pursuant to Section 6226 of the Code and the imputed underpayment for tax or other adjustment had been assessed directly against the Members in the reviewed year. The portion of the Imputed Underpayment Amount that the Board of Managers attributes to a Member shall be treated as a Withholding Payment with respect to such Member. The portion of the Imputed Underpayment Amount that the Board of Managers attributes to a former Member of the Company shall be treated as a Withholding Payment with respect to both such former Member and such former Member’s transferee(s) or assignee(s), as applicable, and the Board of Managers may in its discretion exercise the Company’s rights pursuant to this Section ‎13.01‎(b) in respect of either or both of the former Member and its transferee or assignee. Imputed Underpayment Amounts treated as Withholding Payments also shall include any imputed underpayment within the meaning of Code Section 6225 paid (or payable) by any entity treated as a partnership for U.S. federal income tax purposes in which the Company holds (or has held) a direct or indirect interest other than through entities treated as corporations for U.S. federal income tax purposes to the extent that the Company bears the economic burden of such amounts, whether by law or agreement.

 

13.02        Notices. Except as expressly set forth to the contrary in this Agreement, all notices, requests, or consents required or permitted to be given under this Agreement must be in writing and shall be deemed to have been given (a) three (3) days after the date mailed by registered or certified mail, addressed to the recipient, with return receipt requested, (b) upon delivery to the recipient in person or by courier, or (c) upon receipt of an electronic mail transmission by the recipient. Such notices, requests and consents shall be given (x) to the Members at the addresses set forth on the records of the Company or such other address as may be specified by notice to the Board of Managers, and (y) to the Company or the Board of Managers at the address of the principal office of Company and to Gibson, Dunn & Crutcher LLP, 555 Mission Street, Suite 3000, San Francisco, CA 94105, Attn: Ryan A. Murr and Branden C. Berns. Whenever any notice is required to be given by law, the Certificate or this Agreement, a written waiver thereof, signed by the Person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

 

 

13.03        Entire Agreement. This Agreement (together with any management rights letter or similar letter agreement by and between the Company and any Member, with respect to the applicable Member only) constitutes the entire agreement of the Members and the Company relating to the subject matter of this Agreement and supersedes all prior contracts or agreements among the Members relating to the subject matter of this Agreement, whether oral or written.

 

13.04        Amendment or Modification. Except as otherwise set forth herein, this Agreement and the Certificate may be modified or amended (or compliance with any provision hereof or thereof waived) by an instrument in writing signed by (a) the Company, (b) the Requisite Preferred Holders, and (c) in the event such modification, amendment or waiver would result in the occurrence of any of the actions set forth in Section 3.05(b) and/or Section 3.05(c), the Requisite Series A Preferred Holders and/or Requisite Series B Preferred Holders, as applicable; provided that (i) Section ‎3.02(b)(i) shall not be amended or waived without the written consent of the Venrock Members, (ii) Section ‎3.02(b)(ii) shall not be amended or waived without the written consent of the Fairmount Members, (iii) Section ‎3.02(f) shall not be amended or waived with respect to the rights granted to Deep Track thereunder without the written consent of Deep Track, (iv) Section ‎3.02(f) shall not be amended or waived with respect to the rights granted to RTW thereunder without the written consent of the RTW Funds, (v) Section 5.12(b) (as it pertains to the Wellington Investors), the last sentence of Section 10.07(d), and the definition of “Wellington Investors” shall not be amended or waived with respect to the rights granted to the Wellington Investors thereunder without the written consent of the Wellington Investors, (vi) Section ‎3.05(b), Section ‎8.01(b), Section ‎8.06(a) and Section ‎10.07(c)(v) shall not be amended or waived with respect to rights granted to the holders of Series A Preferred Units thereunder without the written consent of the Requisite Series A Preferred Holders, (vii) Section‎3.05(c), Section ‎8.01(b), Section 8.06(a), Section 8.12(a)(ii), Section 10.07(b)(A), Section 10.07(c)(v), Section 10.09, Section 10.11, Section 11.01 and Section 11.03 shall not be amended or waived with respect to rights granted to the holders of Series B Preferred Units thereunder without the written consent of the Requisite Series B Preferred Holders, (viii) Section ‎5.12(b) shall not be amended in any manner adverse to any party expressly named therein without the written consent of such party; (ix) Section ‎10.07 may not be adversely amended with respect to any Preferred Member without the written consent of the Preferred Member so affected; (x) Section 2.09(v) and the second sentence of Section 2.10 shall not be amended or waived without the written consent of each Member that is (A) a registered investment company within the meaning of the Investment Company Act of 1940, as amended, or (B) is advised by a registered investment adviser or Affiliates thereof; and (xi) no provision of this sentence may be modified or amended (or compliance with any provision hereof or thereof waived) without the prior written consent of the party or parties that would be required to validly amend the applicable underlying provision(s) of this Agreement; provided, further that no such amendment may, without the consent of each affected Member, require such Member to make contributions to the Company or make the Member liable for any debts or obligations of the Company. Notwithstanding the foregoing, this Agreement may not be amended or modified and the observance of any term hereunder may not be waived with respect to any Member without the written consent of such Member, if such amendment or modification or waiver would adversely affect the rights of such Member set forth in this Agreement in a manner disproportionate to any adverse effect such amendment, modification or waiver would have on the rights of the other Members holding the same class of Units set forth in this Agreement. Notwithstanding the foregoing, in the event any Major Investor (or any of their respective Affiliates) purchases any New Securities in any issuance of New Securities by the Company following an amendment, modification, termination, or waiver of Section 10.12 (a “Participating Investor”), then each other Major Investor (each, a “Non-Participating Investor”) shall be given the opportunity to participate in such offering and to purchase the same proportion (up to 100%) of such Non-Participating Investor’s pro rata share of the New Securities being offered by the Company in the relevant transaction as is being purchased by the Participating Investor purchasing the largest proportion of such Participating Investor’s pro rata share; provided further that each Non-Participating Investor’s pro rata participation amount shall in no event exceed the amount such Non-Participating Investor would have been entitled to purchase pursuant to Section 10.12 had such amendment, modification, termination or waiver not have been obtained.

 

 

13.05         Assignment. The rights granted to a Preferred Member under this Agreement may be assigned by such Preferred Member to a transferee of Preferred Units that (a) is an Affiliate, subsidiary, parent, partner, limited partner, retired partner, member or stockholder of such Preferred Member or any of their respective directors, officers or partners or (b) after such transfer, holds at least 2,000,000 Preferred Units (subject to appropriate adjustment for unit splits, combinations, and other recapitalizations or reclassifications) or, if less, all of the Preferred Units held by such Preferred Member, and is not a competitor of the Company.

 

13.06         Binding Effect. Subject to the restrictions on transfers set forth in this Agreement, this Agreement is binding on and inures to the benefit of each of the Members and their respective heirs, legal representatives, successors and assigns.

 

13.07         Governing Law. This Agreement and any claims or causes of action arising out of or relating to this Agreement, the negotiation, execution or performance of this Agreement or the transactions contemplated hereby (whether in contract, in tort, under statute or otherwise) (each, a “Dispute”) shall be governed by, and interpreted, construed and enforced in accordance with, the internal laws of the State of Delaware, including its statutes of limitations, without giving effect to any choice or conflict of laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would result in the application of the Laws of any jurisdiction other than the State of Delaware.

 

13.08         Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

13.09         Dispute Resolution.

 

(a)            All Disputes shall be finally resolved by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect (the “Rules”), except as modified herein. The seat of arbitration shall be New York, New York. There shall be three (3) neutral and impartial arbitrators, of whom one (1) shall be appointed by the claimant(s) and one (1) shall be appointed by the respondent(s), in each case, within fifteen (15) days after the receipt by the respondent(s) of the demand for arbitration. The two (2) arbitrators so appointed shall select the chair of the arbitral tribunal within fifteen (15) days after the appointment of the second arbitrator. If any arbitrator is not appointed within the time limit provided herein, then such arbitrator shall be appointed by the AAA in accordance with the listing, striking and ranking procedure in the Rules. Any arbitrator appointed by the AAA shall be a retired judge or a practicing attorney with no less than fifteen (15) years of experience with large commercial cases.

 

 

(b)            In addition to monetary damages, the arbitral tribunal may award any remedies provided for under applicable law and the terms of this Agreement, including specific performance or other forms of injunctive relief. The arbitral tribunal shall not be empowered to award, and each party hereby irrevocably waives any right to recover, punitive or exemplary damages with respect to any Dispute. The fees and expenses of the arbitrators and the administrative fees of the AAA shall be shared equally by the parties, and the parties shall otherwise bear their respective fees and expenses in the arbitration, in each case, unless otherwise determined by the arbitral tribunal. Any arbitration proceeding, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The award shall be in writing and shall state the findings of fact and conclusions of law on which it is based. The award shall be final and binding upon the parties and shall be the sole and exclusive remedy between the parties regarding any claims, counterclaims, issues or accounting presented to the arbitral tribunal. Judgment upon the award may be entered in any court having jurisdiction. By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect. The parties hereby submit to the nonexclusive jurisdiction, including the personal jurisdiction and venue, of the federal and state courts located in New York, New York for the purpose of preliminary relief in aid of arbitration or for a preliminary injunction to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitrators and to the nonexclusive jurisdiction of the aforementioned courts for the enforcement of any award issued hereunder, and the parties hereby irrevocably and unconditionally waive any right to stay or dismiss any such actions or proceedings brought before any such court on the basis of forum non conveniens or improper venue. In any such action, each of the parties hereby irrevocably and unconditionally (x) consents to service of process in the manner provided for notices in Section 13.02 or in any other manner permitted by applicable law and (y) WAIVES ANY RIGHT TO TRIAL BY JURY.

 

(c)            The pendency of arbitration shall not in and of itself relieve any party from its duty to perform under this Agreement. Each party shall continue to perform all of its obligations under this Agreement during the pendency of arbitration in good faith.

 

 

13.10         Waiver of Certain Rights. Each Member irrevocably waives any right it may have to maintain any action for dissolution of the Company or for partition of the property of the Company. The failure of any Member to insist upon strict performance of a covenant hereunder or of any obligation hereunder, irrespective of the length of time for which such failure continues, shall not be a waiver of such Member’s right to demand strict compliance herewith in the future. No consent or waiver, express or implied, to or of any breach or default in the performance of any obligation hereunder, shall constitute a consent or waiver to or of any other breach or default in the performance of the same or any other obligation hereunder.

 

13.11         Interpretation. For the purposes of this Agreement, terms not defined in this Agreement shall be defined as provided in the Act; and all nouns, pronouns and verbs used in this Agreement shall be construed as masculine, feminine, neuter, singular, or plural, whichever shall be applicable. Titles or captions of Articles and Sections contained in this Agreement are inserted as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the Company has executed this Agreement as of the date set forth above.

 

		COMPANY:
		APOGEE THERAPEUTICS, LLC
		/s/ Michael Henderson
		Name: Michael Henderson
		Title: President and CEO

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	PARAGEE HOLDING, LLC
	By:	/s/ K. Evan Thompson
	Name:	K. Evan Thompson
	Title:	President and CEO

  

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	PARAGON THERAPEUTICS, INC.
	By:	/s/ K. Evan Thompson
	Name:	K. Evan Thompson
	Title:	President

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above. 

 

	MEMBERS:
	VENROCK HEALTHCARE CAPITAL PARTNERS EG, L.P. By: VHCP Management EG, LLC Its: General Partner
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory

 

	MEMBERS:
	VENROCK HEALTHCARE CAPITAL PARTNERS EG, L.P. By: VHCP Management EG, LLC Its: General Partner By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory

 

	VENROCK HEALTHCARE CAPITAL PARTNERS EG, L.P. By: VHCP Management EG, LLC Its: Manager By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	FAIRMOUNT HEALTHCARE FUND LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member

 

	FAIRMOUNT HEALTHCARE FUND II LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member

  

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	DEEP TRACK BIOTECHNOLOGY MASTER FUND, LTD.
	By:	/s/ Nir Messafi
	Name:	Nir Messafi
	Title:	Authorized Person

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	RTW MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW INNOVATION MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW VENTURE FUND LIMITED
	By: RTW Investments, LP
	Its: Investment Manager
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Managing Partner

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	PERCEPTIVE XONTOGENY VENTURE FUND II, LP
	By: Perceptive Xontogeny Venture II GP, LLC Its: General Partner
	By:	/s/ James Mannix
	Name:	James Mannix
	Title:	Chief Operating Officer
	By:	/s/ Frederick P. Callori
	Name:	Frederick P. Callori
	Title:	Authorized Signatory

  

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	ORBIMED PRIVATE INVESTMENTS IX, LP
	By: OrbiMed Capital GP IX LLC,
	Its: General Partner
	By: OrbiMed Advisors LLC,
	Its: Managing Member
	By:	/s/ Carl Gordon
	Name:	Carl Gordon
	Title:	Member

 

	ORBIMED GENESIS MASTER FUND, L.P.
	By: OrbiMed Genesis GP LLC
	Its: General Partner
	By: OrbiMed Advisors LLC
	Its: Managing Member
	By:	/s/ C. Scotland Stevens
	Name:	C. Scotland Stevens
	Title:	Member

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	RA CAPITAL HEALTHCARE FUND, L.P.
	By: RA Capital Healthcare Fund GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager
	RA CAPITAL NEXUS FUND, L.P.
	By: RA Capital Nexus Fund III GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

  

	MEMBERS:
	WELLINGTON BIOMEDICAL INNOVATION MASTER INVESTORS (CAYMAN) II, L.P.
	By: Wellington Management Company LLP, as investment adviser
	By:	/s/ Peter N. McIsaac
	Name:	Peter N. McIsaac
	Title:	Managing Director & Counsel

 

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR BIOTECHNOLOGY FUND
	By:	/s/ Colm Hogan
	Name:	Colm Hogan
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY SERIES GROWTH COMPANY FUND
	By:	/s/ Colm Hogan
	Name:	Colm Hogan
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
	By:	/s/ Colm Hogan
	Name:	Colm Hogan
	Title:	Authorized Signatory

 

  [Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

IN WITNESS WHEREOF, the undersigned Member has executed this Agreement as of the date set forth above.

 

	MEMBERS:
	FIDELITY GROWTH COMPANY COMMINGLED POOL By: Fidelity Management Trust Company, as Trustee
	By:	/s/ Colm Hogan
	Name:	Colm Hogan
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY K6 FUND
	By:	/s/ Colm Hogan
	Name:	Colm Hogan
	Title:	Authorized Signatory

  

[Signature Page to Amended and Restated Limited Liability Company Agreement]

 

 

Schedule A

 

APOGEE THERAPEUTICS, LLC
SCHEDULE OF MEMBERS

 

 

Exhibit A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

 

FIRST AMENDMENT TO AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF APOGEE THERAPEUTICS, LLC

 

This First Amendment (the “Amendment”) to the Second Amended and Restated Limited Liability Company Agreement of Apogee Therapeutics, LLC (the “Operating Agreement”) is made and entered into as of May 16, 2023, by and among Apogee Therapeutics, LLC, a Delaware limited liability company (the “Company”), and the Persons identified as Members on Schedule A of the Operating Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Operating Agreement.

 

WHEREAS, the parties entered into the Operating Agreement on November 15, 2022;

 

WHEREAS, the parties desire to amend the Operating Agreement to (i) increase the number of Incentive Units the Company is authorized to issue and (ii) increase the number of Managers; and

 

WHEREAS, the Operating Agreement may be amended by a writing signed by the Company and the Requisite Preferred Holders.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Amendment to Section 2.10(c). Section 2.10(c) of the Operating Agreement is hereby amended and restated in its entirety to read as follows:

 

“(c)            The Company is authorized to issue from time to time up to an aggregate of 86,626,769 Units, as follows: (i) up to 5,000,000 Common Units, (ii) up to 20,000,000 Series A Preferred Units, (iii) up to 45,089,212 Series B Preferred Units and (iv) up to 16,537,557 Incentive Units. Each authorized Unit may be issued pursuant to such agreements as the Board of Managers or committee thereof shall approve; provided, that the Series B Preferred Units may only be issued pursuant to the Series B Purchase Agreement.”

 

2.            Amendment to Section 3.02(a). Section 3.02(a) of the Operating Agreement is hereby amended and restated in its entirety to read as follows:

 

“(a)            The Board of Managers shall consist of one or more members. The number of Managers shall initially be seven (7) and, subject to Section ‎3.05, may be increased or decreased by the Board of Managers with the affirmative vote or written consent of the Requisite Preferred Holders.”

 

3.            Ratification. Except as expressly amended by this Amendment, the Operating Agreement is and shall be unchanged and all of the terms, provisions, covenants, agreements, conditions, schedules and exhibits thereof or thereto shall remain and continue in full force and effect and are hereby incorporated by reference, and hereby ratified, reaffirmed and confirmed by the parties in all respects on and as of the date of this Amendment as if the Agreement were re-executed as of the date hereof.

 

 

4.            Governing Law. The laws of the State of Delaware shall govern the construction of this Amendment and the rights and remedies and duties of the parties hereto.

 

5.            Binding Effect. This Amendment shall bind and inure to the benefit of the parties and their respective successors and assigns.

 

6.            Counterparts. This Amendment may be signed by each party hereto upon a separate copy, in which event all of said copies shall constitute a single counterpart to this Amendment. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument, and it shall not be necessary, in making proof of this Amendment, to produce or account for more than one such, counterpart.

 

[Remainder of page intentionally blank]

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date first set forth above.

 

	COMPANY:
	APOGEE THERAPEUTICS, LLC
	By:	/s/ Michael Henderson
	Name:	Michael Henderson
	Title:	Chief Executive Officer

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	FAIRMOUNT HEALTHCARE FUND LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member
	FAIRMOUNT HEALTHCARE FUND II LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	VENROCK HEALTHCARE CAPITAL PARTNERS EG, L.P.
	By: VHCP Management EG, LLC
	Its: General Partner
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory
	VENROCK HEALTHCARE CAPITAL PARTNERS III, L.P.
	By: VHCP Management III, LLC Its: General Partner By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory
	VHCP CO-INVESTMENT HOLDINGS III, LLC. By: VHCP Management III, LLC Its: Manager By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	DEEP TRACK BIOTECHNOLOGY MASTER FUND, LTD.
	By:	/s/ Nir Messafi
	Name:	Nir Messafi
	Title:	Authorized Person

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	RTW MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW INNOVATION MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW VENTURE FUND LIMITED
	By:	RTW Investments, LP
	Its:	Investment Manager
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Managing Partner

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	RA CAPITAL HEALTHCARE FUND, L.P.
	By: RA Capital Healthcare Fund GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager
	RA CAPITAL NEXUS FUND, L.P.
	By: RA Capital Nexus Fund III GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	WELLINGTON BIOMEDICAL INNOVATION MASTER INVESTORS (CAYMAN) II, L.P.
	By: Wellington Management Company LLP, as investment adviser
	By:	/s/ Peter N. McIsaac
	Name:	Peter N. McIsaac
	Title:	Managing Director & Counsel

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR BIOTECHNOLOGY FUND
	By:	/s/ Elizabeth Thornton
	Name:	Elizabeth Thornton
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY SERIES GROWTH COMPANY FUND
	By:	/s/ Elizabeth Thornton
	Name:	Elizabeth Thornton
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
	By:	/s/ Elizabeth Thornton
	Name:	Elizabeth Thornton
	Title:	Authorized Signatory

 

[Signature Page to First Amendment to Operating Agreement]

 

 

	MEMBERS:
	FIDELITY GROWTH COMPANY COMMINGLED POOL By: Fidelity Management Trust Company, as Trustee
	By:	/s/ Elizabeth Thornton
	Name:	Elizabeth Thornton
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY K6 FUND
	By:	/s/ Elizabeth Thornton
	Name:	Elizabeth Thornton
	Title:	Authorized Signatory

 

[Signature Page to First Amendment to Operating Agreement]

 

 

SECOND AMENDMENT TO AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF APOGEE THERAPEUTICS, LLC

 

This Second Amendment (this “Amendment”) to the Second Amended and Restated Limited Liability Company Agreement of Apogee Therapeutics, LLC (the “Operating Agreement”) is made and entered into as of May 26, 2023, by and among Apogee Therapeutics, LLC, a Delaware limited liability company (the “Company”), and the Persons identified as Members on Schedule A of the Operating Agreement. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Operating Agreement.

 

WHEREAS, the parties entered into the Operating Agreement on November 15, 2022;

 

WHEREAS, the parties entered into the First Amendment to the Operating Agreement on May 16, 2023 (the “First Amendment”);

 

WHEREAS, the parties desire to further amend the Operating Agreement to include provisions governing the appointment of independent Managers; and

 

WHEREAS, the Operating Agreement may be amended by a writing signed by the Company and the Requisite Preferred Holders.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Amendment to Section 3.02(b). Section 3.02(b) of the Operating Agreement is hereby amended and restated in its entirety to read as follows:

 

“(b)         From and after the date of this Agreement, the Board of Managers shall be appointed as follows:

 

(i) Two (2) individuals designated from time to time by the Venrock Members (together, the “Venrock Manager(s)”), for so long as such Members and their Affiliates continue to beneficially own any Preferred Units, which individuals shall initially be Nimish Shah and Andrew Gottesdiener; and

 

(ii) Two (2) individuals designated from time to time by the Fairmount Members (together, the “Fairmount Manager(s)”), for so long as such Members and their Affiliates continue to beneficially own any Preferred Units, which individuals shall initially be Peter Harwin and Tomas Kiselak;

 

(iii) the Company’s Chief Executive Officer, who shall initially be Michael Henderson (the “CEO Manager”), provided that if for any reason the CEO Manager shall cease to serve as the Chief Executive Officer of the Company, each of the Preferred Members shall promptly vote their respective Units (i) to remove the former Chief Executive Officer of the Company from the Board of Mangers if such person has not resigned as a member of the Board of Managers; and (ii) to elect such person’s replacement as Chief Executive Officer of the Company as the new CEO Manager; and

 

 

(iv) Two (2) individuals appointed from time to time by the holders of a majority of the outstanding voting Units, voting together as a single class on an As Adjusted Voting Basis, as applicable (together, the “Independent Manager(s)”), provided that each Independent Manager shall not be an Affiliate of the Company.

 

2.             Ratification. Except as expressly amended by the First Amendment and this Amendment, the Operating Agreement is and shall be unchanged and all of the terms, provisions, covenants, agreements, conditions, schedules and exhibits thereof or thereto shall remain and continue in full force and effect and are hereby incorporated by reference, and hereby ratified, reaffirmed and confirmed by the parties in all respects on and as of the date of this Amendment as if the Operating Agreement were re-executed as of the date hereof.

 

3.             Governing Law. The laws of the State of Delaware shall govern the construction of this Amendment and the rights and remedies and duties of the parties hereto.

 

4.           Binding Effect. This Amendment shall bind and inure to the benefit of the parties and their respective successors and assigns.

 

5.           Counterparts. This Amendment may be signed by each party hereto upon a separate copy, in which event all of said copies shall constitute a single counterpart to this Amendment. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument, and it shall not be necessary, in making proof of this Amendment, to produce or account for more than one such, counterpart.

 

[Remainder of page intentionally blank]

 

 

IN WITNESS WHEREOF, each of the undersigned has executed this Amendment as of the date first set forth above.

 

	COMPANY:
	APOGEE THERAPEUTICS, LLC
	By:	/s/ Michael Henderson
	Name:	Michael Henderson
	Title:	Chief Executive Officer

  

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	FAIRMOUNT HEALTHCARE FUND LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member
	FAIRMOUNT HEALTHCARE FUND II LP
	By:	/s/ Peter Harwin
	Name:	Peter Harwin
	Title:	Managing Member

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	VENROCK HEALTHCARE CAPITAL PARTNERS EG, L.P.
	By: VHCP Management EG, LLC
	Its: General Partner
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory
	VENROCK HEALTHCARE CAPITAL PARTNERS III, L.P.
	By: VHCP Management III, LLC Its: General Partner By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory
	VHCP CO-INVESTMENT HOLDINGS III, LLC. By: VHCP Management III, LLC Its: Manager By: VR Advisor, LLC Its: Manager
	By:	/s/ Nimish Shah
	Name:	Nimish Shah
	Title:	Authorized Signatory

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	DEEP TRACK BIOTECHNOLOGY MASTER FUND, LTD.
	By:	/s/ Nir Messafi
	Name:	Nir Messafi
	Title:	Authorized Person

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	RTW MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW INNOVATION MASTER FUND, LTD.
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Director

 

	RTW VENTURE FUND LIMITED
	By:	RTW Investments, LP
	Its:	Investment Manager
	By:	/s/ Roderick Wong, M.D.
	Name:	Roderick Wong, M.D.
	Title:	Managing Partner

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	PERCEPTIVE XONTOGENY VENTURE FUND II, LP
	By: Perceptive Xontogeny Venture II GP, LLC Its: General Partner
	By:	/s/ James Mannix
	Name:	James Mannix
	Title:	Chief Operating Officer
	By:	/s/ Frederick P. Callori
	Name:	Frederick P. Callori
	Title:	Authorized Signatory

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	ORBIMED PRIVATE INVESTMENTS IX, LP
	By:	OrbiMed Capital GP IX LLC,
	Its:	General Partner
	By:	OrbiMed Advisors LLC,
	Its:	Managing Member
	By:	/s/ Carl Gordon
	Name:	Carl Gordon
	Title:	Member

 

	ORBIMED GENESIS MASTER FUND, L.P.
	By:	OrbiMed Genesis GP LLC
	Its:	General Partner
	By:	OrbiMed Advisors LLC
	Its:	Managing Member
	By:	/s/ Carl Gordon
	Name:	Carl Gordon
	Title:	Member

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	RA CAPITAL HEALTHCARE FUND, L.P.
	By: RA Capital Healthcare Fund GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager
	RA CAPITAL NEXUS FUND III, L.P.
	By: RA Capital Nexus Fund III GP, LLC
	Its: General Partner
	By:	/s/ Rajeev Shah
	Name:	Rajeev Shah
	Title:	Manager

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	WELLINGTON BIOMEDICAL INNOVATION MASTER INVESTORS (CAYMAN) II, L.P.
	By: Wellington Management Company LLP, as investment adviser
	By:	/s/ Peter N. McIsaac
	Name:	Peter N. McIsaac
	Title:	Managing Director & Counsel

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	FIDELITY ADVISOR SERIES VII: FIDELITY ADVISOR BIOTECHNOLOGY FUND
	By:	/s/ Paul Smith
	Name:	Paul Smith
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY SERIES GROWTH COMPANY FUND
	By:	/s/ Paul Smith
	Name:	Paul Smith
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY FUND
	By:	/s/ Paul Smith
	Name:	Paul Smith
	Title:	Authorized Signatory

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

	MEMBERS:
	FIDELITY GROWTH COMPANY COMMINGLED POOL By: Fidelity Management Trust Company, as Trustee
	By:	/s/ Paul Smith
	Name:	Paul Smith
	Title:	Authorized Signatory
	FIDELITY MT. VERNON STREET TRUST: FIDELITY GROWTH COMPANY K6 FUND
	By:	/s/ Paul Smith
	Name:	Paul Smith
	Title:	Authorized Signatory

 

[Signature Page to Second Amendment to Operating Agreement]

 

 

 

 

 

 

 

Exhibit 3.2

 

CERTIFICATE OF INCORPORATION

 

OF

 

Apogee Therapeutics, Inc.
(a Delaware corporation)

 

Article I
NAME

 

The name of the corporation is Apogee Therapeutics, Inc. (the “Corporation”).

 

Article II
AGENT

 

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

 

Article III
PURPOSE

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

 

Article IV
AUTHORIZED CAPITAL STOCK

 

The Corporation shall be authorized to issue one class of stock to be designated Common Stock; the total number of shares of Common Stock which the Corporation shall have authority to issue is 1,000, and each such share shall have a par value of $0.00001.

 

Article V
BOARD OF DIRECTORS

 

Section 5.1        Number. Except as otherwise provided for or fixed pursuant to the provisions of this Certificate of Incorporation, the number of directors of the Corporation shall be fixed by or in the manner provided in the Bylaws of the Corporation.

 

Section 5.2        Election. Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

Article VI
EXISTENCE

 

The Corporation shall have perpetual existence.

 

 

Article VII
AMENDMENT

 

Section 7.1        Amendment of Certificate of Incorporation. The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by the laws of the State of Delaware, and all powers, preferences and rights of any nature conferred upon stockholders, directors or any other persons by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.

 

Section 7.2        Amendment of Bylaws. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.

 

Article VIII
LIABILITY OF DIRECTORS AND OFFICERS

 

Section 8.1        No Personal Liability. To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, no director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable. Solely for purposes of this Article VIII, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL.

 

Section 8.2        Amendment or Repeal. Any amendment, repeal or elimination of this Article VIII, or the adoption of any provision of the Certificate of Incorporation inconsistent with this Article VIII, shall not affect its application with respect to an act or omission by a director or officer occurring before such amendment, adoption, repeal or elimination.

 

Article IX
FORUM FOR ADJUDICATION OF DISPUTES

 

Section 9.1        Forum. Unless the Corporation, in writing, selects or consents to the selection of an alternative forum, the sole and exclusive forum for any complaint asserting any internal corporate claims (as defined below), to the fullest extent permitted by law, and subject to applicable jurisdictional requirements, shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, another state court or a federal court located within the State of Delaware). For purposes of this Article IX, internal corporate claims means claims, including claims in the right of the Corporation: (a) that are based upon a violation of a duty by a current or former director, officer, employee or stockholder in such capacity; or (b) as to which the DGCL confers jurisdiction upon the Court of Chancery. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article IX.

 

Section 9.2        Enforceability. If any provision of this Article IX shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Article IX (including, without limitation, each portion of any sentence of this Article IX containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities or circumstances shall not in any way be affected or impaired thereby.

 

 

Article X
INCORPORATOR

 

The name and mailing address of the incorporator are as follows:

 

Abby Quinio
Gibson, Dunn & Crutcher LLP
3161 Michelson Drive

Irvine, CA 92612-4412

 

[The remainder of this page has been intentionally left blank.]

 

 

IN WITNESS WHEREOF, the undersigned incorporator hereby acknowledges that the foregoing Certificate of Incorporation is her act and deed and that the facts stated herein are true.

 

Dated: June 9, 2023

 

	By:	/s/ Abby Quinio
	Name: Abby Quinio
	Title: Incorporator

 

Signature Page to Certificate of Incorporation

 

Exhibit 3.3

 

BYLAWS

 

OF

 

APOGEE THERAPEUTICS, INC.,
a Delaware corporation
(the “Corporation”)

 

Article I
CORPORATE OFFICES

 

Section 1.1         Registered Office. The registered office of the Corporation shall be fixed in the Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”).

 

Section 1.2         Other Offices. The Corporation may also have an office or offices, and keep the books and records of the Corporation, except as otherwise required by law, at such other place or places, either within or without the State of Delaware, as the Corporation may from time to time determine or the business of the Corporation may require.

 

Article II
MEETINGS OF STOCKHOLDERS

 

Section 2.1         Annual Meeting. Unless directors are elected by written consent in lieu of an annual meeting, the annual meeting of stockholders, for the election of directors and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, either within or without the State of Delaware, on such date, and at such time as the Board of Directors of the Corporation (the “Board of Directors”) shall fix. The Board of Directors may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors.

 

Section 2.2         Special Meeting. Except as otherwise required by law, and except as otherwise provided for or fixed pursuant to the Certificate of Incorporation, a special meeting of the stockholders of the Corporation: (i) may be called at any time by the Board of Directors; and (ii) shall be called by the Chairperson of the Board of Directors (the “Chairperson of the Board”) or the Secretary of the Corporation (the “Secretary”) upon the written request or requests of one or more stockholders of record that, at the time a request is delivered, hold shares representing at least 10% of the voting power of the stock entitled to vote on the matter or matters to be brought before the proposed special meeting. Except as otherwise required by law, and except as otherwise provided for or fixed pursuant to the Certificate of Incorporation, special meetings of the stockholders of the Corporation may not be called by any other person or persons. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. If none of the stockholders who submitted the special meeting request (or their qualified representatives) appears at the special meeting to present the matter or matters to be brought before the special meeting that were specified in the special meeting request, the Corporation need not present the matter or matters for a vote at the meeting, notwithstanding that proxies in respect of such vote may have been received by the Corporation. The Board of Directors may postpone, reschedule or cancel any special meeting of stockholders previously scheduled pursuant to this Section 2.2.

 

 

Section 2.3         Notice of Stockholders’ Meetings.

 

(a)        Whenever stockholders are required or permitted to take any action at a meeting, a notice of the meeting of stockholders shall specify the place, if any, date and time of the meeting of stockholders, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for determining the stockholders entitled to notice of the meeting), and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice shall be given not less than 10 nor more than 60 days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting, except as otherwise provided by law, the Certificate of Incorporation or these Bylaws. In the case of a special meeting, the purpose or purposes for which the meeting is called also shall be set forth in the notice.

 

(b)        Any notice to stockholders given by the Corporation may be given in writing directed to the stockholder’s mailing address as it appears on the records of the Corporation (or by electronic transmission directed to the stockholder’s electronic mail address, as applicable) and shall be given (i) if mailed, when the notice is deposited in the U.S. mail, postage prepaid, (ii) if delivered by courier service, the earlier of when the notice is received or left at such stockholder’s address or (iii) if given by electronic mail, when directed to such stockholder’s electronic mail address unless the stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail or such notice is prohibited by Section 232(e) of the General Corporation Law of the State of Delaware (as the same exists or may hereafter be amended from time to time, the “DGCL”). If notice is given by electronic mail, such notice shall comply with the applicable provisions of Section 232 of the DGCL.

 

(c)        Notice may be given by other forms of electronic transmission with the consent of a stockholder in the manner permitted by Section 232(b) of the DGCL and shall be deemed given as provided therein.

 

(d)        An affidavit that notice has been given, executed by the Secretary, an Assistant Secretary or any transfer agent or other agent of the Corporation, shall be prima facie evidence of the facts stated in the notice in the absence of fraud. Notice shall be deemed to have been given to all stockholders who share an address if notice is given in accordance with Section 233 of the DGCL.

 

 

(e)        When a meeting is adjourned to another time or place (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication), notice need not be given of the adjourned meeting if the place, if any, date and time thereof, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are (i) announced at the meeting at which the adjournment is taken; (ii) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxyholders to participate in the meeting by means of remote communication; or (iii) set forth in the notice of meeting given in accordance with Section 2.3(a); provided, however, that if the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 7.6(a), and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.

 

Section 2.4         Organization.

 

(a)        Meetings of stockholders shall be presided over by the Chairperson of the Board, if any, or in his or her absence, by the Chief Executive Officer (if separate and serving as a director) or another person designated by or in the manner provided by the Board of Directors. The Secretary, or in his or her absence, an Assistant Secretary, or in the absence of the Secretary and all Assistant Secretaries, a person whom the chairperson of the meeting shall appoint, shall act as secretary of the meeting and keep a record of the proceedings thereof.

 

(b)        The date and time of the opening and the closing of the polls for each matter upon which the stockholders shall vote at a meeting of stockholders shall be announced at the meeting. The Board of Directors may adopt such rules and regulations for the conduct of any meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairperson of the meeting shall have the authority to adopt and enforce such rules and regulations for the conduct of any meeting of stockholders and the safety of those in attendance as, in the judgment of the chairperson, are necessary, appropriate or convenient for the conduct of the meeting. Rules and regulations for the conduct of meetings of stockholders, whether adopted by the Board of Directors or by the chairperson of the meeting, may include without limitation, establishing: (i) an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies, qualified representatives (including rules around who qualifies as such) and such other persons as the chairperson of the meeting shall permit; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; (v) limitations on the time allotted for consideration of each agenda item and for questions and comments by participants; (vi) regulations for the opening and closing of the polls for balloting and matters which are to be voted on by ballot (if any); and (vii) procedures (if any) requiring attendees to provide the Corporation advance notice of their intent to attend the meeting. Subject to any rules and regulations adopted by the Board of Directors, the chairperson of the meeting may convene and, for any reason, from time to time, adjourn and/or recess any meeting of stockholders pursuant to Section 2.7. The chairperson of the meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall declare that a nomination or other business was not properly brought before the meeting if the facts warrant, and if such chairperson should so declare, such nomination shall be disregarded or such other business shall not be transacted.

 

 

Section 2.5         List of Stockholders. The Corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, that if the record date for determining the stockholders entitled to vote is less than 10 days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the 10th day before the meeting date. Such list shall be arranged in alphabetical order and shall show the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing in this Section 2.5 shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for 10 days ending on the day before the meeting date: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of meeting; or (b) during ordinary business hours at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. Except as otherwise required by law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 2.5 or to vote in person or by proxy at any meeting of stockholders.

 

Section 2.6         Quorum. Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, at any meeting of stockholders, the holders of a majority of the voting power of the stock outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. If a quorum is not present or represented at any meeting of stockholders, then the chairperson of the meeting, or the holders of a majority of the voting power of the stock present in person or represented by proxy at the meeting and entitled to vote thereon, shall have power to adjourn or recess the meeting from time to time in accordance with Section 2.7, until a quorum is present or represented. Subject to applicable law, if a quorum initially is present at any meeting of stockholders, the stockholders may continue to transact business until adjournment or recess, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, but if a quorum is not present at least initially, no business other than adjournment or recess may be transacted.

 

Section 2.7         Adjourned or Recessed Meeting. Any annual or special meeting of stockholders, whether or not a quorum is present, may be adjourned or recessed for any or no reason from time to time by the chairperson of the meeting, subject to any rules and regulations adopted by the Board of Directors pursuant to Section 2.4(b). Any such meeting may be adjourned for any or no reason (and may be recessed if a quorum is not present or represented) from time to time by the holders of a majority of the voting power of the stock present in person or represented by proxy at the meeting and entitled to vote thereon. At any such adjourned or recessed meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally called.

 

Section 2.8         Voting.

 

(a)        Except as otherwise required by law or the Certificate of Incorporation, each holder of stock of the Corporation entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of such stock held of record by such holder that has voting power upon the subject matter in question.

 

 

(b)        Except as otherwise required by law, the Certificate of Incorporation, these Bylaws or any law, rule or regulation applicable to the Corporation or its securities, at each meeting of stockholders at which a quorum is present, all corporate actions to be taken by vote of the stockholders shall be authorized by the affirmative vote of the holders of at least a majority of the voting power of the stock present in person or represented by proxy and entitled to vote on the subject matter. Voting at meetings of stockholders need not be by written ballot.

 

Section 2.9         Proxies. Every stockholder entitled to vote for directors, or on any other matter, shall have the right to do so either in person or by one or more persons authorized to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or executed new proxy bearing a later date.

 

Section 2.10       Action by Written Consent.

 

(a)        Except as otherwise provided for or fixed pursuant to the Certificate of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents, setting forth the action so taken, are signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. To be effective, such a consent must be delivered to the Corporation in accordance with Section 228(d) of the DGCL; provided, however, that the Corporation has not designated, and shall not designate, any information processing system for receiving such consents. No consent shall be effective to take the corporate action referred to therein unless consents signed by a sufficient number of holders to take action are delivered to the Corporation in accordance with this Section 2.10 within 60 days of the first date on which a consent is so delivered to the Corporation. Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such consent shall be effective at a future time, including a time determined upon the happening of an event, occurring not later than 60 days after such instruction is given or such provision is made, if evidence of the instruction or provision is provided to the Corporation. If the person is not a stockholder of record when the consent is executed, the consent shall not be valid unless the person is a stockholder of record as of the record date for determining stockholders entitled to consent to the action. Unless otherwise provided, any such consent shall be revocable prior to its becoming effective.

 

(b)        Prompt notice of the taking of the corporate action without a meeting by less than unanimous consent shall be given to those stockholders entitled thereto in accordance with Section 228(e) of the DGCL.

 

 

Section 2.11         Meetings by Remote Communications. The Board of Directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a)(2) of the DGCL. If authorized by the Board of Directors in its sole discretion, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication: (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that: (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder; (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

 

Section 2.12         Delivery to the Corporation. Whenever this Article II requires one or more persons (including a record or beneficial owner of stock) to deliver a document or information (other than a document authorizing another person to act for a stockholder by proxy at a meeting of stockholders pursuant to Section 212 of the DGCL) to the Corporation or any officer, employee or agent thereof (including any consent, notice, request, questionnaire, revocation, representation or other document or agreement), the Corporation shall not be required to accept delivery of such document or information unless the document or information is in writing exclusively (and not in an electronic transmission) and delivered exclusively by hand (including, without limitation overnight courier service) or by certified or registered mail, return receipt requested. For the avoidance of doubt, the Corporation expressly opts out of Section 116 of the DGCL with respect to the delivery of information and documents (other than a document authorizing another person to act for a stockholder by proxy at a meeting of stockholders pursuant to Section 212 of the DGCL) to the Corporation required by this Article II.

 

Article III
DIRECTORS

 

Section 3.1         Powers. Except as otherwise required by the DGCL or as provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and authorities these Bylaws expressly confer upon it, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law, the Certificate of Incorporation or these Bylaws required to be exercised or done by the stockholders.

 

Section 3.2         Number, Term of Office and Election. Except as otherwise provided for or fixed pursuant to the Certificate of Incorporation, the Board of Directors shall consist of such number of directors as shall be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the total number of directors then authorized (hereinafter referred to as the “Whole Board”). The first Board of Directors shall consist of the person or persons elected by the incorporator or designated in the Certificate of Incorporation. At any meeting of stockholders at which directors are to be elected, directors shall be elected by a plurality of the votes cast. Each director shall hold office until the next election of directors and until his or her successor shall have been duly elected and qualified. Directors need not be stockholders unless so required by the Certificate of Incorporation or these Bylaws, wherein other qualifications for directors may be prescribed.

 

 

Section 3.3         Vacancies and Newly Created Directorships. Unless otherwise required by law, newly created directorships resulting from any increase in the authorized number of directors and any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum, or by the sole remaining director, and any director so chosen shall hold office until the next election of directors and until his or her successor shall have been duly elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director.

 

Section 3.4         Resignations and Removal.

 

(a)        Any director may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors, the Chairperson of the Board or the Secretary. Such resignation shall take effect upon delivery, unless the resignation specifies a later effective date or time or an effective date or time determined upon the happening of an event or events. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

 

(b)        Any director, or the entire Board of Directors, may be removed, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of the stock outstanding and entitled to vote thereon.

 

Section 3.5         Regular Meetings. Regular meetings of the Board of Directors shall be held at such place or places (if any), within or without the State of Delaware, on such date or dates and at such time or times, as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required.

 

Section 3.6         Special Meetings. Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairperson of the Board, the Chief Executive Officer (if separate and serving as a director) or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix the place (if any), within or without the State of Delaware, date and time of such meetings. Notice of each such meeting shall be given to each director, if by mail, addressed to such director at his or her residence or usual place of business, at least five days before the day on which such meeting is to be held, or shall be sent to such director by electronic transmission, or be delivered personally or by telephone, in each case at least 24 hours prior to the time set for such meeting. A notice of special meeting need not state the purpose of such meeting, and, unless indicated in the notice thereof, any and all business may be transacted at a special meeting.

 

 

Section 3.7         Remote Participation in Meetings. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board of Directors or committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

 

Section 3.8         Quorum and Voting. Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, a majority of the Whole Board shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, and the affirmative vote of a majority of the directors present at a duly held meeting at which a quorum is present shall be the act of the Board of Directors. The chairperson of the meeting or a majority of the directors present may adjourn the meeting to another time and place (if any) whether or not a quorum is present. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called.

 

Section 3.9         Board of Directors Action by Written Consent Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or any committee thereof, may be taken without a meeting, provided that all members of the Board of Directors or committee, as the case may be, consent in writing or by electronic transmission to such action. After an action is taken, the consent or consents relating thereto shall be filed with the minutes or proceedings of the Board of Directors or committee in the same paper or electronic form as the minutes are maintained. Any person (whether or not then a director) may provide, whether through instruction to an agent or otherwise, that a consent to action shall be effective at a future time (including a time determined upon the happening of an event), occurring not later than 60 days after such instruction is given or such provision is made and such consent shall be deemed to have been given at such effective time so long as such person is then a director and did not revoke the consent prior to such time. Any such consent shall be revocable prior to its becoming effective.

 

Section 3.10         Chairperson of the Board. The Chairperson of the Board shall preside at meetings of stockholders in accordance with Section 2.4(a) above and at meetings of directors, and shall perform such other duties as the Board of Directors may from time to time determine. If the Chairperson of the Board is not present at a meeting of the Board of Directors, the Chief Executive Officer (if separate and serving as a director) or another director chosen by or in the manner provided by the Board of Directors shall preside.

 

Section 3.11         Rules and Regulations. The Board of Directors shall adopt such rules and regulations not inconsistent with the provisions of law, the Certificate of Incorporation or these Bylaws for the conduct of its meetings and management of the affairs of the Corporation as the Board of Directors shall deem proper.

 

Section 3.12         Fees and Compensation of Directors. Unless otherwise restricted by the Certificate of Incorporation, directors may receive such compensation, if any, for their services on the Board of Directors and its committees, and such reimbursement of expenses, as may be fixed or determined by resolution of the Board of Directors.

 

 

Section 3.13         Emergency Bylaws. This Section 3.13 shall be operative during any emergency condition as contemplated by Section 110 of the DGCL (an “Emergency”), notwithstanding any different or conflicting provisions in these Bylaws, the Certificate of Incorporation or the DGCL. In the event of any Emergency, or other similar emergency condition, the director or directors in attendance at a meeting of the Board of Directors or a standing committee thereof shall constitute a quorum. Such director or directors in attendance may further take action to appoint one or more of themselves or other directors to membership on any standing or temporary committees of the Board of Directors as they shall deem necessary and appropriate. Except as the Board of Directors may otherwise determine, during any Emergency, the Corporation and its directors and officers, may exercise any authority and take any action or measure contemplated by Section 110 of the DGCL.

 

Article IV
COMMITTEES

 

Section 4.1         Committees of the Board of Directors. The Board of Directors may designate one or more committees, each such committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee to replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by law and provided in the resolution of the Board of Directors establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval; or (b) adopting, amending or repealing any bylaw of the Corporation. All committees of the Board of Directors shall keep minutes of their meetings and shall report their proceedings to the Board of Directors when requested or required by the Board of Directors.

 

Section 4.2         Meetings and Action of Committees. Unless the Board of Directors provides otherwise by resolution, any committee of the Board of Directors may adopt, alter and repeal such rules and regulations not inconsistent with the provisions of law, the Certificate of Incorporation or these Bylaws for the conduct of its meetings as such committee may deem proper. A majority of the directors then serving on a committee shall constitute a quorum for the transaction of business by the committee except as otherwise required by law, the Certificate of Incorporation or these Bylaws, and except as otherwise provided in a resolution of the Board of Directors; provided, however, that in no case shall a quorum be less than one-third of directors then serving on the committee. Unless the Certificate of Incorporation, these Bylaws or a resolution of the Board of Directors requires a greater number, the vote of a majority of the members of a committee present at a meeting at which a quorum is present shall be the act of the committee.

 

 

Article V
OFFICERS

 

Section 5.1.         Officers. The officers of the Corporation shall include a Chief Executive Officer and a Secretary, who shall be elected by the Board of Directors. The Corporation may have such other officers as the Board of Directors or the Chief Executive Officer or another authorized officer may determine and appoint from time to time. Officers shall have such authority, functions or duties as set forth in these Bylaws or as determined by the Board of Directors or the Chief Executive Officer. Each officer shall hold office until such person’s successor shall have been duly elected and qualified, or until such person’s earlier death, disqualification, resignation or removal. Any number of offices may be held by the same person. The Board of Directors may determine to leave any office vacant.

 

Section 5.2.         Additional Positions and Titles. The Corporation may have assistants to officers, with such powers and duties as the Board of Directors, or the Chief Executive Officer or another authorized officer, may from time to time determine. Any officer or employee may be assigned any additional title, with such powers and duties, as the Board of Directors or an authorized officer may from time to time determine. Any persons appointed as assistant officers, and any persons upon whom such titles are conferred, shall not be deemed officers of the Corporation unless appointed by the Board of Directors or the Chief Executive Officer pursuant to Section 5.1.

 

Section 5.3.         Compensation. The salaries of the officers of the Corporation shall be fixed from time to time by the Board of Directors or by any person or persons to whom the Board of Directors has delegated such authority.

 

Section 5.4.         Removal, Resignation and Vacancies. Any officer of the Corporation may be removed, with or without cause, by the Board of Directors or an authorized officer. Any officer or assistant officer, if appointed by an officer, also may be removed by the officer authorized to appoint such officer or assistant officer. Any officer may resign at any time upon notice given in writing or by electronic transmission to the Corporation. Any resignation or removal shall be without prejudice to the rights, if any, of such officer under any contract to which it is a party. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors or in accordance with Section 5.1 or Section 5.2, as applicable, or such office may be left vacant.

 

Section 5.5.         Chief Executive Officer. The Chief Executive Officer shall have general supervision and direction of the business and affairs of the Corporation, shall be responsible for corporate policy and strategy, and shall report directly to the Board of Directors.

 

Section 5.6.         Secretary. The powers and duties of the Secretary shall include acting as Secretary at all meetings of the Board of Directors, of the committees of the Board of Directors and of the stockholders, and performing all other duties incident to the office of Secretary. The Secretary shall perform such other duties as the Board of Directors, the Chief Executive Officer or another authorized officer may from time to time determine.

 

 

Section 5.7.         Authority and Duties of Other Officers. The Chief Executive Officer and the Secretary shall have such authority, functions or duties as set forth in these Bylaws or as determined by the Board of Directors. Other officers shall have such authority, functions or duties as set forth in these Bylaws or as determined by the Board of Directors, the Chief Executive Officer or another officer authorized to prescribe the duties of such officer. To the extent not so set forth or determined, each such officer shall have such authority, functions or duties as those that generally pertain to their respective offices, subject to the control of the Board of Directors.

 

Section 5.8.         Action with Respect to Securities of Other Corporations or Entities. The Chief Executive Officer, or any other person or persons to whom the Board of Directors or the Chief Executive Officer has delegated such authority, is authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares or other equity interests of any other corporation or entity or corporations or entities, standing in the name of the Corporation. The authority herein granted may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by the person having such authority.

 

Section 5.9.         Delegation. The Board of Directors or an authorized officer may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding the foregoing provisions of this Article V.

 

Article VI
INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

 

Section 6.1         Right to Indemnification.

 

(a)        Each person who was or is a party or is threatened to be made a party to, or was or is otherwise involved in, any action, suit, arbitration, alternative dispute resolution mechanism, investigation, inquiry, judicial, administrative or legislative hearing, or any other threatened, pending or completed proceeding, whether brought by or in the right of the Corporation or otherwise, including any and all appeals, whether of a civil, criminal, administrative, legislative, investigative or other nature (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or while a director or officer of the Corporation is or was serving at the request of the Corporation as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), or by reason of anything done or not done by him or her in any such capacity, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes, penalties and amounts paid in settlement by or on behalf of the indemnitee) actually and reasonably incurred by such indemnitee in connection therewith, all on the terms and conditions set forth in these Bylaws; provided, however, that, except as otherwise required by law or provided in Section 6.4 with respect to suits to enforce rights under this Article VI, the Corporation shall indemnify any such indemnitee in connection with a proceeding, or part thereof, voluntarily initiated by such indemnitee (including claims and counterclaims, whether such counterclaims are asserted by: (i) such indemnitee; or (ii) the Corporation in a proceeding initiated by such indemnitee) only if such proceeding, or part thereof, was authorized or ratified by the Board of Directors or the Board of Directors otherwise determines that indemnification or advancement of expenses is appropriate.

 

 

Section 6.2         Right to Advancement of Expenses.

 

(a)        In addition to the right to indemnification conferred in Section 6.1, an indemnitee shall, to the fullest extent permitted by law, also have the right to be paid by the Corporation the expenses (including attorneys’ fees) incurred in defending any proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that an advancement of expenses shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Article VI or otherwise.

 

Section 6.3         Indemnification for Successful Defense. To the extent that an indemnitee has been successful on the merits or otherwise in defense of any proceeding (or in defense of any claim, issue or matter therein), such indemnitee shall be indemnified under this Section 6.3 against expenses (including attorneys’ fees) actually and reasonably incurred in connection with such defense. Indemnification under this Section 6.3 shall not be subject to satisfaction of a standard of conduct, and the Corporation may not assert the failure to satisfy a standard of conduct as a basis to deny indemnification or recover amounts advanced, including in a suit brought pursuant to Section 6.4 (notwithstanding anything to the contrary therein); provided, however, that, any indemnitee who is not a current or former director or officer (as such term is defined in the final sentence of Section 145(c)(1) of the DGCL) shall be entitled to indemnification under Section 6.1 and this Section 6.3 only if such indemnitee has satisfied the standard of conduct required for indemnification under Section 145(a) or Section 145(b) of the DGCL, as applicable.

 

Section 6.4         Right of Indemnitee to Bring Suit. If a request for indemnification under Section 6.1 or Section 6.3 is not paid in full by the Corporation within 60 days, or if a request for an advancement of expenses under Section 6.2 is not paid in full by the Corporation within 20 days, after a written request has been received by the Secretary of the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation in a court of competent jurisdiction in the State of Delaware seeking an adjudication of entitlement to such indemnification or advancement of expenses. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit to the fullest extent permitted by law. In any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that the indemnitee has not met any applicable standard of conduct for indemnification set forth in Section 145(a) or Section 145(b) of the DGCL. Further, in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the indemnitee has not met any applicable standard of conduct for indemnification set forth in Section 145(a) or Section 145(b) of the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met such applicable standard of conduct, nor an actual determination by the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under applicable law, this Article VI or otherwise shall be on the Corporation.

 

 

Section 6.5         Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article VI shall not be exclusive of any other right which any person may have or hereafter acquire under any law, agreement, vote of stockholders or disinterested directors, provisions of a certificate of incorporation or bylaws, or otherwise.

 

Section 6.6         Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

 

Section 6.7         Indemnification of Employees and Agents of the Corporation; Service at Subsidiaries. The Corporation may, to the extent and in the manner permitted by law, and to the extent authorized from time to time, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation. Any person serving as a director or officer of a subsidiary of the Corporation shall be entitled to the rights to indemnification conferred in this Article VI, and to the advancement of expenses, as defined in Section 6.2, with respect to his or her service at such subsidiary; provided, however, that the advancement of expenses to any person who is not an indemnitee as defined in Section 6.1(a) shall be at the discretion of the Corporation. Any director or officer of a subsidiary is deemed to be serving such subsidiary at the request of the Corporation, and the Corporation is deemed to be requesting such service. This Article VI shall, to the fullest extent permitted by law, supersede any conflicting provisions contained in the corporate governance documents of any other subsidiary of the Corporation. In addition, the Corporation may, to the extent and in the manner permitted by law, and to the extent authorized from time to time, grant rights to indemnification and to the advancement of expenses to individuals with respect to their service as an employee or agent of subsidiaries of the Corporation.

 

Section 6.8         Nature of Rights. The rights conferred upon indemnitees in this Article VI shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article VI that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment, alteration or repeal.

 

 

Section 6.9         Settlement of Claims. Notwithstanding anything in this Article VI to the contrary, the Corporation shall not be liable to indemnify any indemnitee under this Article VI for any amounts paid in settlement of any proceeding effected without the Corporation’s written consent, which consent shall not be unreasonably withheld.

 

Section 6.10         Subrogation. In the event of payment under this Article VI, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee (excluding insurance obtained on the indemnitee’s own behalf), and the indemnitee shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.

 

Section 6.11         Severability. If any provision or provisions of this Article VI shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law: (a) the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not by themselves invalid, illegal or unenforceable) and the application of such provision to other persons or entities or circumstances shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VI (including, without limitation, all portions of any paragraph of this Article VI containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent of the parties that the Corporation provide protection to the indemnitee to the fullest extent set forth in this Article VI.

 

Article VII
CAPITAL STOCK

 

Section 7.1         Certificates of Stock. The shares of the Corporation shall be uncertificated shares; provided, however, that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of stock shall be represented by certificates. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by any two authorized officers of the Corporation, including, without limitation, the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer, the Controller, the Secretary or an Assistant Treasurer or Assistant Secretary representing the number of shares registered in certificated form. Any or all such signatures may be facsimiles or otherwise electronic signatures. In case any officer, transfer agent or registrar who has signed or whose facsimile or otherwise electronic signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

 

 

Section 7.2         Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation upon authorization by the registered holder thereof or by such holder’s attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary or a transfer agent for such stock, and if such shares are represented by a certificate, upon surrender of the certificate or certificates for such shares properly endorsed or accompanied by a duly executed stock transfer power and the payment of any taxes thereon; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer.

 

Section 7.3         Lost Certificates. The Corporation may issue a new share certificate or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or the owner’s legal representative to give the Corporation a bond (or other adequate security) sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares. The Board of Directors may adopt such other provisions and restrictions with reference to lost certificates, not inconsistent with applicable law, as it shall in its discretion deem appropriate.

 

Section 7.4         Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

 

Section 7.5         Record Date for Determining Stockholders.

 

(a)        In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjourned meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, unless otherwise required by law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjourned meeting; provided, however, that the Board of Directors may fix a new record date for the determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

 

 

(b)        In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

(c)        Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to express consent to corporate action without a meeting, when no prior action of the Board of Directors is required by law, shall be the first date on which a signed consent setting forth the action taken or proposed to be taken was delivered to the Corporation in accordance with Section 2.10. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to express consent to corporate action without a meeting, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

 

Section 7.6         Regulations. To the extent permitted by applicable law, the Board of Directors may make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of shares of stock of the Corporation.

 

Section 7.7         Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL or the Certificate of Incorporation or these Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, the Board of Directors or a committee of the Board of Directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or these Bylaws.

 

 

Article VIII
GENERAL MATTERS

 

Section 8.1         Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December of the same year, or shall extend for such other 12 consecutive months as the Board of Directors may designate.

 

Section 8.2         Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.

 

Section 8.3         Reliance Upon Books, Reports and Records. Each director and each member of any committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

 

Section 8.4         Subject to Law and Certificate of Incorporation. All powers, duties and responsibilities provided for in these Bylaws, whether or not explicitly so qualified, are qualified by the Certificate of Incorporation and applicable law.

 

Section 8.5         Electronic Signatures, etc. Except as otherwise required by the Certificate of Incorporation or these Bylaws (including, without limitation, as otherwise required by Section 2.12), any document, including, without limitation, any consent, agreement, certificate or instrument, required by the DGCL, the Certificate of Incorporation or these Bylaws to be executed by any officer, director, stockholder, employee or agent of the Corporation may be executed using a facsimile or other form of electronic signature to the fullest extent permitted by applicable law. All other contracts, agreements, certificates or instruments to be executed on behalf of the Corporation may be executed using a facsimile or other form of electronic signature to the fullest extent permitted by applicable law. The terms “electronic mail,” “electronic mail address,” “electronic signature” and “electronic transmission” as used herein shall have the meanings ascribed thereto in the DGCL.

 

Article IX
FORUM FOR ADJUDICATION OF DISPUTES

 

Section 9.1         Forum. Unless the Corporation, in writing, selects or consents to the selection of an alternative forum, the sole and exclusive forum for any complaint asserting any internal corporate claims (as defined below), to the fullest extent permitted by law, and subject to applicable jurisdictional requirements, shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, another state court or a federal court located within the State of Delaware). For purposes of this Article IX, internal corporate claims means claims, including claims in the right of the Corporation: (a) that are based upon a violation of a duty by a current or former director, officer, employee or stockholder in such capacity; or (b) as to which the DGCL confers jurisdiction upon the Court of Chancery. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article IX.

 

 

Section 9.2         Enforceability. If any provision of this Article IX shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Article IX (including, without limitation, each portion of any sentence of this Article IX containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities or circumstances shall not in any way be affected or impaired thereby.

 

Article X
AMENDMENTS

 

Section 10.1         Amendments. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to adopt, amend or repeal these Bylaws. The stockholders may make additional Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise.

 

The foregoing Bylaws were adopted by the Board of Directors on June 9, 2023.

 

 

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is dated as of June 21, 2023 (the “Effective Date”), between Apogee Biologics, Inc. (the “Company”), on the one hand, and Michael Henderson, MD (variously “you” or “your”).

 

WHEREAS, you have served as Chief Executive Officer of the Company (“CEO”) since September 16, 2022;

 

WHEREAS, you and Company desire that you continue to serve as CEO pursuant to the terms and conditions set forth in this Agreement; and

 

WHEREAS, this Agreement is intended to supersede any and all prior agreements, arrangements or understandings between you and Company relating to your provision of services to Company (the “Prior Arrangements”), which Prior Arrangements shall be null and void and of no further force or effect.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

1.

Position. As CEO, you will report to the Company’s Board of Directors (the “Board”). This is a full-time employment position. During your tenure as CEO or as otherwise provided by the Board you would continue to serve as a member of the Board. You shall be a member of the Board until your successor is elected and duly qualified or until your earlier death, disability, resignation or removal. You will be deemed to have resigned from the Board upon ceasing to serve as CEO for any reason, unless the Board agrees otherwise. It is understood and agreed that, while rendering services to the Company in your capacity as CEO, you will not engage in any other employment, consulting or other business activities (whether full-time or part-time), except as a member of the board of directors of ARYA Sciences Acquisition Corp IV or as expressly authorized in writing by the Board. Notwithstanding the foregoing, you may engage in religious, charitable and other community activities so long as such activities do not interfere or conflict with your obligations to the Company.

 

2.

Cash Compensation. The Company will pay you a base salary as CEO at the rate of $500,000 per year, payable in accordance with the Company’s standard payroll schedule and subject to applicable deductions and withholdings. Your base salary will increase to $630,000 per year upon the consummation of Apogee Therapeutics, Inc.’s initial public offering. Your base salary will also be subject to periodic review and adjustments at the Company’s discretion. Your base salary in effect at any given time is referred to herein as the “Base Salary.”

 

3.

Annual Bonus. You will be eligible to receive an annual performance bonus of up to 50% of your Base Salary. Your target annual bonus will increase to 55% of your Base Salary upon consummation of Apogee Therapeutics, Inc.’s initial public offering. The target annual bonus in effect at any given time is referred to herein as “Target Bonus.” The actual bonus amount is discretionary. To earn an annual bonus, you must be employed by the Company as of the payment date of such bonus. Any annual bonus will be paid no later than March 15th of the calendar year following the calendar year to which such bonus relates.

 

 

4.

Benefits/Paid Time Off. You will be eligible, subject to the terms of the applicable plans and programs, to participate in the employee benefits and insurance programs generally made available to the Company’s full-time employees. You will be entitled to paid time off consistent with the terms of the Company’s paid time off policy, as in effect from time to time. The Company reserves the right to modify, limit, amend or cancel any of its benefits plans or programs at any time.

 

5.

Board Meetings; Expenses; Indemnification. You will be expected to attend scheduled Board meetings in person whenever you are able and permitted by applicable health regulations and to participate by telephone if you are not able to attend in person. In addition, we expect you will be available for consultations via email or phone. The Company will reimburse you for reasonable travel expenses in connection with attending Board meetings and for performing services as CEO in accordance with the policies and procedures then in effect and established by the Company for its executives. The Company will indemnify you for your service as an officer and director of the Company in accordance with the Company’s governing documents and as provided by the Board.

 

6.

Location. Your primary work location as CEO will be in California, as determined by the Board, provided that you may be required to travel for business, consistent with the Company’s business needs.

 

7.

At-Will Employment; Date of Termination. At all times your employment as CEO or any other employment position you may receive is “at will,” meaning you or the Company may terminate it at any time for any or no reason, subject to the terms of this Agreement. Although your job duties, title, reporting structure, compensation and benefits, as well as the Company’s benefit plans and personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Chairperson of the Board or a majority of the Board. Your last day of employment for any reason is referred to herein as the “Date of Termination.” In the event that you elect to end your employment other than for Good Reason (as defined below), the Company requires you to provide at least 30 days’ advance written notice to the Company. Notwithstanding the foregoing, the Company may unilaterally accelerate the Date of Termination, and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

To the extent applicable, you shall be deemed to have resigned from all officer and board member positions that you hold with the Company or any of its respective subsidiaries and affiliates upon the termination of your employment for any reason. You shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

 

 

8.

Accrued Obligations. In the event of the ending of your employment for any reason, the Company shall pay you (i) your Base Salary and, if applicable, any accrued but unused vacation, through the Date of Termination, and (ii) the amount of any documented expenses properly incurred by you on behalf of the Company prior to any such termination and not yet reimbursed (the “Accrued Obligations”).

 

9.

Severance Pay and Benefits Outside of the Change in Control Period. As explained below, under certain circumstances you would be entitled to severance equal to the Severance Amount (as defined below), accelerated vesting of a portion of your unvested equity-based awards, plus COBRA:

 

In the event that the Company terminates your employment without Cause outside of the Change in Control Period (as such capitalized terms are defined in Appendix A), then, in addition to you being entitled to the Accrued Obligations, and subject to (i) you signing a separation agreement and release in a form and manner reasonably satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities and a reaffirmation of the Continuing Obligations (as defined below) and shall provide that if you breach the Continuing Obligations, all payments of the Severance Amount (as defined below) shall immediately cease (the “Separation Agreement and Release”), and (ii) the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), which shall include a seven (7) day revocation period:

 

(a)

The Company shall pay you an amount equal to 12 months of your Base Salary plus any bonus earned but unpaid for the year prior to the year of termination (such salary and bonus together, the “Severance Amount”).

 

(b)

Notwithstanding anything to the contrary in any applicable equity-based award agreement, thirty percent (30%) of the unvested portion of your then-outstanding equity-based awards subject solely to time-based vesting (the “Time-Based Equity Awards”) shall immediately accelerate and become vested or nonforfeitable as of the later of (i) the Date of Termination or (ii) the effective date of the Separation Agreement and Release (such later date being the “Accelerated Vesting Date”); provided that any termination or forfeiture of the unvested portion of such Time-Based Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the effective date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Time-Based Equity Awards shall occur during the period between the Date of Termination and the Accelerated Vesting Date.

 

 

(c)

Subject to your copayment of premium amounts at the applicable active employees’ rate and your proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider(s), the COBRA provider or you a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to you if you had remained employed by the Company until the earliest of (A) the 12 month anniversary of the Date of Termination; (B) your eligibility for group health plan benefits under any other employer’s group health plan; or (C) the cessation of your continuation rights under COBRA; provided, however, that if the Company reasonably determines that it cannot pay such amounts to the group health plan provider(s) or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to you for the time period specified above. Such payments, if to you, shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

The amounts payable under this Section 9, to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over 12 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount, to the extent it qualifies as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

Notwithstanding anything to the contrary in this Agreement, for the avoidance of doubt:

 

(i)

If your employment ends for any reason other than a termination by the Company without Cause, you will be entitled to the Accrued Obligations and will not be entitled to any further compensation from the Company;

 

(ii)

your services as a member of the Board does not constitute employment by the Company and if you depart or are terminated from the Board for any reason, such departure or termination does not constitute termination without Cause, resignation for Good Reason (as defined below) or termination of employment of any kind; and

 

(iii)

if your employment ends due to your death or disability, you will receive the Accrued Obligations but will not be eligible for severance pay, accelerated vesting, or benefits, whether pursuant to Section 9, Section 10 or otherwise.

 

 

10.

Severance Pay and Benefits Within the Change in Control Period. As explained below, under certain circumstances in the event of a Change of Control you would be entitled to accelerated vesting of your equity-based awards:

 

In the event that the Company terminates your employment as CEO without Cause or you resign for Good Reason, in each case within the Change in Control Period, then, in addition to you being entitled to the Accrued Obligations, and subject to you signing the Separation Agreement and Release and it becoming fully effective, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), which shall include a seven (7) day revocation period, the Company shall (i) provide you the severance pay and benefits set forth in Section 9, subject to the terms and conditions set forth in Section 9, and (ii) notwithstanding anything to the contrary in any applicable equity-based award agreement, all of your Time-Based Equity Awards shall immediately accelerate and become fully vested or nonforfeitable as of the Accelerated Vesting Date; provided that any termination or forfeiture of the unvested portion of such Time-Based Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the effective date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Time-Based Equity Awards shall occur during the period between the Date of Termination and the Accelerated Vesting Date.

 

For the avoidance of doubt, Section 9 and Section 10 of this Agreement are mutually exclusive and in no event shall you be entitled to payments or benefits pursuant to both Section 9 and Section 10 of this Agreement.

 

11.

Continuing Obligations.

 

(a)            Restrictive Covenants Agreement. As a condition of your employment as CEO, you entered into that certain Proprietary Information and Invention Assignment Agreement, dated as of November 1, 2022 (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 11 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the “Continuing Obligations.”

 

(b)            Third Party Agreements and Rights. You hereby confirm that you are not bound by the terms of any agreement with any previous employer or other party which restricts in any way your use or disclosure of information, other than confidentiality restrictions (if any) or your engagement in any business. You represent to the Company that your execution of this Agreement, your employment with the Company and the performance of your proposed duties for the Company will not violate any obligations you may have to any such previous employer or other party. In your work for the Company, you will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and you will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

 

 

(c)            Litigation and Regulatory Cooperation. During and after your employment, you shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while you were employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes you may have knowledge or information. Your full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being reasonably available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after your employment, you also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while you were employed by the Company. The Company shall reimburse you for any reasonable out-of-pocket expenses incurred in connection with your performance of obligations pursuant to this Section 11(c).

 

(d)            Relief. You agree that it would be difficult to measure any damages caused to the Company which might result from your breach of any of the Continuing Obligations, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, you agree that if you breach, or propose to breach, any portion of the Continuing Obligations, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.

 

12.

Section 409A.

 

(a)            Anything in this Agreement to the contrary notwithstanding, if at the time of your separation from service within the meaning of Section 409A of the Code, the Company determines that you are a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that you become entitled to under this Agreement or otherwise on account of your separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after your separation from service, or (B) your death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.

 

 

(b)            All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by you during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses). Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(c)            To the extent that any payment or benefit described in this Agreement constitutes “non- qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the termination of your employment, then such payments or benefits shall be payable only upon your “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-l(h).

 

(d)            The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

 

(e)            The Company makes no representation or warranty and shall have no liability to you or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

 

13.            Withholding; Tax Effect. All forms of compensation referred to in this Agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. You hereby acknowledge that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation.

 

14.            Interpretation and Enforcement. This Agreement, together with Appendix A, the Restrictive Covenants Agreement and the other agreements referenced herein, constitute the complete agreement between you and the Company, contains all of the terms of your employment with the Company and supersedes any prior agreements, representations or understandings (whether written, oral or implied) between you and the Company. The terms of this Agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this Agreement or arising out of, related to, or in any way connected with this Agreement, your employment with the Company or any other relationship between you and the Company (the “Disputes”) will be governed by California law, excluding laws relating to conflicts or choice of law. You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in the State of California in connection with any Dispute or any claim related to any Dispute.

 

 

15.            Assignment. Neither you nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without your consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization, consolidate with, or merge into or to whom it transfers all or substantially all of its properties or assets; provided further, that if you remain employed or become employed by the Company, the purchaser or any of their affiliates in connection with any such transaction, then you shall not be entitled to any payments, benefits or vesting pursuant to Section 9 or pursuant to Section 10 of this Agreement solely as a result of such transaction. This Agreement shall inure to the benefit of and be binding upon you and the Company, and each of your and its respective successors, executors, administrators, heirs and permitted assigns.

 

16.            Waiver; Amendment. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach. This Agreement may be amended or modified only by a written instrument signed by you and by a duly authorized representative of the Company.

 

17.            Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

18.            Other Terms. The Company will pay reasonable legal fees of your counsel incurred in connection with the review of this Agreement and related documentation. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of your employment to the extent necessary to effectuate the terms contained herein. The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any of the provisions of this Agreement. This Agreement may be executed in separate counterparts. When both counterparts are signed, they shall be treated together as one and the same document. PDF copies of signed counterparts shall be equally effective as originals.

 

Signature page follows.

 

 

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

 

	APOGEE BIOLOGICS, INC.
	/s/ Peter Harwin
	By: Peter Harwin
	Its: Director
	/s/ Michael Henderson, M.D.
	MICHAEL HENDERSON, M.D.

 

 

Appendix A

 

1)

“Cause” shall mean (i) your dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business that results in or is reasonably anticipated to result in harm to the Company; (ii) your commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) your failure to perform in all material respects your assigned duties and responsibilities to the reasonable satisfaction of the Board, which failure continues, in the reasonable judgment of the Board, for thirty (30) days after written notice given to you describing such failure; (iv) your gross negligence, willful misconduct that results in or is reasonably anticipated to result in harm to the Company; or (v) your violation of any material provision of any agreement(s) between you and the Company or any Company policies including, without limitation, agreements relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions or policies related to ethics or workplace conduct.

 

2)

“Change in Control” shall mean (i) the sale of the Company in which the shareholders of the Company in their capacity as such no longer own a majority of the outstanding equity securities of the Company (or its successor); (ii) any sale of all or substantially all of the assets or capital stock of the Company (other than in a spin-off or similar transaction) or (iii) any other acquisition of the business of the Company, as determined by the Board in its sole discretion. For the avoidance of doubt, in no event shall a bona fide equity or debt financing of the Company, including a financing in which greater than 50% of the Company’s outstanding equity securities are acquired by a third-party, or reorganization required to effect an initial public offering, be deemed a “Change in Control” for purposes of this Agreement.

 

3)

“Change in Control Period” shall mean the twelve (12) month period that immediately follows the first event constituting a Change in Control.

 

4)

“Good Reason” shall mean that you have complied with the Good Reason Process (hereinafter defined) following the occurrence of any of the following events: (i) a material diminution in your base salary or Target Bonus except for across-the-board salary and target bonus reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; or (ii) a material change in the geographic location at which you provide services to the Company; or (iii) a material reduction in your duties, authority or responsibilities, but excluding any change in title that does not represent a material reduction in your duties, authority or responsibilities; or (iv) the failure of the Company to obtain the assumption of this Agreement by a successor; or (v) the material breach of this Agreement by the Company.

 

5)

“Good Reason Process” shall mean that (i) you reasonably determine in good faith that a “Good Reason” condition has occurred; (ii) you notify the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) you cooperate in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

 

Exhibit 10.3

 

Apogee Therapeutics, Inc.

 

August 28, 2022

 

Dr. Carl Dambkowski
 

Dear Dr. Dambkowski:

 

Apogee Therapeutics, Inc., a Delaware corporation (the “Company”), is pleased to offer you employment on the following terms:

 

1.            Position. Your initial title will be Chief Medical Officer, and you will initially report to the Company’s Chief Executive Officer. This is a full-time exempt position and, as such, you are expected to dedicate all of your business time and efforts to your employment with the Company. It is anticipated that you will initially work remotely from California, although some travel may be required consistent with the business needs of the Company and its affiliates. While you render services to the Company, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company or any of its affiliates. By signing this letter agreement, you confirm to the Company that (i) you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company; (ii) you do not have and shall not bring onto the Company’s premises, or use in the course of your providing services to the Company, any confidential or proprietary information of another person, company or business enterprise to whom you previously provided services; and (iii) you will not, at any time during your providing services to the Company, breach any obligation or agreement that you have entered into with any third party, including your former employers.

 

2.            Cash Compensation. The Company will pay you a starting salary at the rate of $450,000 per year, payable in accordance with the Company’s standard payroll schedule and subject to applicable deductions and withholdings. This salary will be subject to periodic review and adjustments at the Company’s discretion. Your base salary in effect at any given time is referred to herein as the “Base Salary.”

 

3.            Equity Grant. Upon the Company’s recommendation and subject to the approval of the Board of Managers (the “LLC Board”) of Apogee Therapeutics, LLC, a Delaware limited liability company and the sole stockholder of the Company (the “LLC”), you will be granted Non-Voting Incentive Units (the “Incentive Units”) in the LLC, representing 1.25% of the LLC’s fully diluted equity as of the date of grant (reflecting all outstanding voting and non-voting units) with a Strike Price (as defined in that certain Amended and Restated Limited Liability Company Agreement of Apogee Therapeutics, LLC dated as of February 24, 2022 (the “LLC Agreement”)) determined by the LLC Board at the time of grant and determined in accordance with the terms of the LLC Agreement. The Incentive Units will vest as follows: 25% of the Incentive Units will vest on the one-year anniversary of your vesting start date and the balance will vest thereafter in equal monthly installments for the next 36 months of continuous service with the Company, provided that your employment with the Company is still in effect and has not been terminated for any reason as of each such vesting date. The Company shall permit you to make, and you shall make, a timely Code Section 83(b) election in accordance with Treasury Regulation 1.83-2 with respect to each grant of Incentive Units (to the extent applicable). The grant of the Incentive Units will be governed by the terms of the related award agreement, the LLC’s operating agreement and the terms and conditions approved by the LLC Board.

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 2

 

4.            Discretionary Bonus. In addition to your salary, equity and benefits, you will initially be eligible to receive an annual performance bonus of up to 40.0% of your Base Salary. Any bonus awarded for the calendar year in which your employment commences will be prorated based on the date that you entered into a consulting agreement with the Company. The Company maintains full and absolute discretion over the decision to award any bonus, and the amount of any bonus, based upon various factors that include, but are not limited to, your performance and the Company’s performance. To the extent the Company decides to award you a bonus, such bonus will be paid to you no later than March 15th of the calendar year following the end of the calendar year to which such bonus relates. You must be employed by the Company on the date the bonus is paid to earn such bonus.

 

5.            Signing Bonus. You will be paid a one-time signing bonus in the amount of $100,000 as soon as practicable following the date you execute this letter agreement, and in no event more than 30 days thereafter/on the first payroll date following such date; provided that you commence employment with the Company on or prior to October 1, 2022. If your employment is terminated by the Company for Cause or if you terminate your employment voluntarily prior to the first anniversary of the date you execute this letter agreement, you agree to repay the full amount of the signing bonus within 30 days following your termination date.

 

6.            Employee Benefits. As a regular full-time employee of the Company, you will be eligible, subject to the terms of the applicable plans and programs, to participate in a number of Company-sponsored benefits generally available to the Company’s full time employees. Details of such benefits programs, including mandatory employee contributions, if any, and waiting periods, if applicable, will be made available to you when such benefit(s) become available. In addition, you will be entitled to paid time off/paid vacation and sick leave in accordance with the Company’s paid time off/vacation and sick leave policy, as in effect from time to time. The Company reserves the right to modify, limit, amend or cancel any of its benefits plans or programs at any time.

 

7.            Proprietary Information and Invention Assignment Agreement. Like all Company employees, you will be required, as a condition of your employment with the Company, to sign the Company’s standard Proprietary Information and Invention Assignment Agreement, a copy of which is attached hereto as Exhibit A.

 

8.            Reservation of Rights. The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon clearance of such a background investigation and/or background check, if any.

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 3

 

9.            Employment Relationship. Employment with the Company is for no specific period of time. Your employment with the Company will be “at will”, meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. Any contrary representations that may have been made to you are superseded by this letter agreement. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized officer of the Company (other than you). Your last day of employment for any reason is referred to herein as the “Date of Termination.”

 

10.          Accrued Obligations. In the event of the ending of your employment for any reason, the Company shall pay you (i) your Base Salary and, if applicable, any accrued but unused vacation, through the Date of Termination, and (ii) the amount of any documented expenses properly incurred by you on behalf of the Company prior to any such termination and not yet reimbursed (the “Accrued Obligations”).

 

11.          Severance Pay and Benefits Outside of the Change in Control Period. As explained below, under certain circumstances you would be entitled to severance equal to the Severance Amount (as defined below) plus COBRA:

 

In the event that the Company terminates your employment without Cause outside of the Change in Control Period (as such capitalized terms are defined in Appendix A), then, in addition to you being entitled to the Accrued Obligations, and subject to (i) you signing a separation agreement and release in a form and manner reasonably satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities and a reaffirmation of the Continuing Obligations (as defined below) and shall provide that if you breach the Continuing Obligations, all payments of the Severance Amount (as defined below) shall immediately cease (the “Separation Agreement and Release”), and (ii) the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), which shall include a seven (7) day revocation period:

 

(a)

The Company shall pay you an amount equal to 6 months of your Base Salary plus any bonus earned but unpaid for the year prior to the year of termination (such salary and bonus together, the “Severance Amount”).

 

(b)

Subject to your copayment of premium amounts at the applicable active employees’ rate and your proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider(s), the COBRA provider or you a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to you if you had remained employed by the Company until the earliest of (A) the 6 month anniversary of the Date of Termination; (B) your eligibility for group health plan benefits under any other employer’s group health plan; or (C) the cessation of your continuation rights under COBRA; provided, however, that if the Company reasonably determines that it cannot pay such amounts to the group health plan provider(s) or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to you for the time period specified above. Such payments, if to you, shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 4

 

The amounts payable under this Section 11, to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over 6 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount, to the extent it qualifies as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section l.409A-2(b)(2). Notwithstanding the foregoing, any portion of the Severance Amount related to an earned but unpaid bonus for the year prior to the year of termination shall be paid at the same time and in the same manner as such bonus would have been paid had you remained employed with the Company and, in all events, no later than March 15 of the year following the year to which such bonus relates.

 

Notwithstanding anything to the contrary in this Agreement, for the avoidance of doubt:

 

(i)

If your employment ends for any reason other than a termination by the Company without Cause, you will be entitled to the Accrued Obligations and will not be entitled to any further compensation from the Company and

 

(ii)

if your employment ends due to your death or disability, you will receive the Accrued Obligations but will not be eligible for severance pay, accelerated vesting, or benefits, whether pursuant to Section 11, Section 12 or otherwise.

 

12.          Severance Pay and Benefits Within the Change in Control Period. As explained below, under certain circumstances in the event of a Change of Control you would be entitled to accelerated vesting of your Incentive Units:

 

In the event that the Company terminates your employment without Cause or there is a material reduction in your duties, authority or responsibilities in connection with a Change in Control, but excluding any change in title that does not represent a material reduction in your duties, authority or responsibilities, in each case, within the Change in Control Period, then, in addition to you being entitled to the Accrued Obligations, and subject to you signing the Separation Agreement and Release and it becoming fully effective, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release), which shall include a seven (7) day revocation period, the Company shall (i) provide you the severance pay and benefits set forth in Section 11, subject to the terms and conditions set forth in Section 11, and (ii) notwithstanding anything to the contrary in any applicable Incentive Unit agreement or equity-based award agreement, all of your unvested Incentive Units and any other equity-based awards subject to time-based vesting (the “Time-Based Equity Awards”) shall immediately accelerate and become fully vested or nonforfeitable as of the later of (i) the Date of Termination or (ii) the effective date of the Separation Agreement and Release (such later date being the “Accelerated Vesting Date”); provided that any termination or forfeiture of the unvested portion of such Time-Based Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the effective date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Time-Based Equity Awards shall occur during the period between the Date of Termination and the Accelerated Vesting Date.

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 5

 

For the avoidance of doubt, Section 11 and Section 12 of this letter agreement are mutually exclusive and in no event shall you be entitled to payments or benefits pursuant to both Section 11 and Section 12 of this letter agreement.

 

13.          Tax Matters.

 

(a)

Withholding. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law.

 

(b)

Tax Advice. You are encouraged to obtain your own tax advice regarding your compensation from the Company. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or its board of directors, or the LLC or the LLC Board, or any affiliate thereof or its governing body, related to tax liabilities arising from your compensation.

 

14.          Interpretation, Amendment and Enforcement. This letter agreement (including Appendix A) and Exhibit A constitute the complete agreement between you and the Company, contain all of the terms of your employment with the Company and supersede any prior agreements, representations or understandings (whether written, oral or implied) between you and the Company. This letter agreement may not be amended or modified, except by an express written agreement signed by both you and a duly authorized officer of the Company. The terms of this letter agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this letter agreement or arising out of, related to, or in any way connected with, this letter agreement, your employment with the Company or any other relationship between you and the Company (the ‘‘Disputes”) will be governed by California law, excluding laws relating to conflicts or choice of law. You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in California, in connection with any Dispute or any claim related to any Dispute. This letter agreement is not assignable or transferable by you without the prior written consent of the Company; any attempt to do so shall be void. The Company may freely transfer and assign this letter agreement and any of its obligations to you hereunder. This letter agreement will be binding upon your heirs, executors, assigns, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns.

 

* * * * *

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 6

 

We hope that you will accept our offer to join the Company. You may indicate your agreement with these terms and accept this offer by signing and dating both the enclosed duplicate original of this letter agreement and the enclosed Proprietary Information and Invention Assignment Agreement and returning them to me. This offer, if not accepted, will expire at the close of business on August 31, 2022. As required by law, your employment with the Company is contingent upon your providing legal proof of your identity and authorization to work in the United States. Your employment is also contingent upon your starting work with the Company on or before October 1, 2022.

 

	Very truly yours,
	Apogee Therapeutics, Inc.
	By:	/s/ Evan Thompson
	Name: Evan Thompson
	Title: Chief Executive Officer

 

I accept employment with Apogee Therapeutics, Inc. and acknowledge and fully agree to the terms and conditions set forth in this this employment offer:

 

/s/ Carl Dambkowski
Signature of Employee
By: Dr. Carl Dambkowski
Dated: 28 August 2022

 

Attachment

 

Exhibit A: Proprietary Information and Invention Assignment Agreement

 

 

Apogee Therapeutics, Inc.

August 28, 2022

Page 7

 

Appendix A

 

1)

“Cause” shall mean (i) your dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business that results in or is reasonably anticipated to result in harm to the Company; (ii) your commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) your failure to perform in all material respects your assigned duties and responsibilities to the reasonable satisfaction of the Board, which failure continues, in the reasonable judgment of the Board, for thirty (30) days after written notice given to you describing such failure; (iv) your gross negligence, willful misconduct that results in or is reasonably anticipated to result in harm to the Company; or (v) your violation of any material provision of any agreement(s) between you and the Company or any Company policies including, without limitation, agreements relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions or policies related to ethics or workplace conduct.

 

2)

“Change in Control” shall mean (i) the sale of the LLC in which the equityholders of the LLC in their capacity as such no longer own a majority of the outstanding equity securities of the LLC (or its successor); or (ii) any other acquisition of the business of the LLC, as determined by the LLC Board in its sole discretion. For the avoidance of doubt, and notwitthanding anything contained herein to the contrary, in no event shall (i) a bona fide equity or debt financing of the LLC, including a financing in which greater than 50% of the LLC’s outstanding equity securities are acquired by a third-party, (ii) any reorganization required to effect an initial public offering, (iii) a de-SPAC transaction, or (iv) a reverse merger transaction, be deemed a “Change in Control” for purposes of this Agreement.

 

3)

“Change in Control Period” shall mean the twelve (12) month period that immediately follows the first event constituting a Change in Control.

 

Exhibit 10.4

 

Apogee Therapeutics, Inc.

 

January 12, 2023

 

Jane Pritchett Henderson
 

Dear Jane:

 

Apogee Therapeutics, Inc., a Delaware corporation (the “Company”), is pleased to offer you employment on the following terms:

 

1.            Position. Your title will be Chief Financial Officer with duties, responsibilities, functions and authority in a manner reasonably consistent with this title, and you will report to the Company’s Chief Executive Officer. This is a full-time exempt position and, as such, you are expected to dedicate substantially all of your business time and efforts to your employment with the Company, it being agreed and acknowledged in all events that you will be able to continue your current outside board services as disclosed in writing to me prior to the date of this letter agreement (any new outside board service will require pre-approval by the Company in its sole discretion which shall not be unreasonably withheld). It is anticipated that you will primarily work remotely, although some travel may be required consistent with the business needs of the Company and its affiliates. While you render services to the Company, you will not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company or any of its affiliates. By signing this letter agreement, you confirm to the Company that (i) you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company; (ii) you do not have and shall not bring onto the Company’s premises, or use in the course of your providing services to the Company, any confidential or proprietary information of another person, company or business enterprise to whom you previously provided services; and (iii) you will not, at any time during your providing services to the Company, breach any obligation or agreement that you have entered into with any third party, including your former employers.

 

2.            Cash Compensation. The Company will pay you a starting salary at the rate of $475,000 per year, payable in accordance with the Company’s standard payroll schedule and subject to applicable deductions and withholdings. This salary will be subject to periodic review and adjustments at the Company’s discretion. Your base salary in effect at any given time is referred to herein as the “Base Salary.”

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 2

 

3.            Equity Grant. Upon the Company’s recommendation and subject to the approval of the Board of Managers (the “LLC Board”) of Apogee Therapeutics, LLC, a Delaware limited liability company and the sole stockholder of the Company (the “LLC”), you will be granted not later than March 31, 2023 Non-Voting Incentive Units (the “Incentive Units”) in the LLC, representing 1.2% of the LLC’s fully diluted equity as of the date of grant (as determined by the Board, reflecting all then outstanding voting and non-voting units, it being expected that the grant size will be approximately 990,020 Incentive Units) with a Strike Price (as defined in that certain Amended and Restated Limited Liability Company Agreement of Apogee Therapeutics, LLC dated as of February 24, 2022 (the “LLC Agreement”)) determined by the LLC Board at the time of grant and determined consistent with the Company’s valuation as of November 30, 2022, which was $2.91 per Common Unit. An equitable adjustment to your equity grant shall be made by the Board in good faith if the Strike Price is determined to be greater than $2.91 in order to comply with the requirements for a profits interest under Revenue Procedure 93-27. The Incentive Units will vest as follows: 25% of the Incentive Units will vest on the one-year anniversary of your vesting start date and the balance will vest thereafter in equal monthly installments for the next 36 months of continuous service with the Company, provided that your employment with the Company is still in effect and has not been terminated for any reason as of each such vesting date. Notwithstanding the foregoing, in the event that the Company terminates your employment without Cause (as defined in Appendix A) or there is a material reduction in your duties, authority or responsibilities in connection with a Change in Control (as defined in Appendix A), but excluding any change in title that does not represent a material reduction in your duties, authority or responsibilities, in each case, within the Change in Control Period (as defined in Appendix A), all of your unvested Incentive Units shall immediately accelerate and become fully vested as of the later of (i) the Date of Termination (as defined below) or (ii) the effective date of the Separation Agreement and Release (such later date being the “Accelerated Vesting Date”); provided that any termination or forfeiture of the unvested portion of such Incentive Units that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the effective date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein (for the avoidance of doubt, no additional vesting of the Incentive Units shall occur during the period between the Date of Termination and the Accelerated Vesting Date). The Company shall permit you to make, and you shall make, a timely Section 83(b) election in accordance with Treasury Regulation Section 1.83-2 with respect to each grant of Incentive Units (to the extent applicable). The grant of the Incentive Units will be governed by the terms of the related award agreement, which shall be substantially in the form attached hereto as Exhibit B, the LLC’s operating agreement and the terms and conditions approved by the LLC Board. Contractual terms applicable to your grant of 990,020 Incentive Units that are not set forth in this Section 3 shall be on terms no less favorable that apply to the Company’s Chief Executive Officer.

 

4.            Discretionary Bonus. In addition to your salary, equity and benefits, you will be eligible to receive an annual performance bonus with a target of 40% of your Base Salary. Any bonus awarded for the calendar year in which your employment commences will be prorated based on the date that you commence employment with the Company. The Company maintains full and absolute discretion over the decision to award any bonus, and the amount of any bonus, based upon various factors that include, but are not limited to, your performance and the Company’s performance. To the extent the Company decides to award you a bonus, such bonus will be paid to you no later than March 15th of the calendar year following the end of the calendar year to which such bonus relates. You must be employed by the Company on the date the bonus is paid to earn such bonus. Your discretionary bonus opportunity in effect at any given time is referred to herein as the “Discretionary Bonus.” If your employment is terminated due to death or disability after the end of a fiscal year during the term of this letter agreement but before payment of the bonus, you shall receive payment of the full bonus that you otherwise would have been entitled to receive under this Section 4 assuming individual performance at target.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 3

 

5.            Employee Benefits. As a regular full-time employee of the Company, you will be eligible, subject to the terms of the applicable plans and programs, to participate in a number of Company-sponsored benefits generally available to the Company’s full time employees. Details of such benefits programs, including mandatory employee contributions, if any, and waiting periods, if applicable, will be made available to you when such benefit(s) become available. In addition, you will be entitled to paid time off/paid vacation and sick leave in accordance with the Company’s paid time off/vacation and sick leave policy, as in effect from time to time. The Company reserves the right to modify, limit, amend or cancel any of its benefits plans or programs at any time.

 

6.            Proprietary Information and Invention Assignment Agreement. Like all Company employees, you will be required, as a condition of your employment with the Company, to sign the Company’s standard Proprietary Information and Invention Assignment Agreement, a copy of which is attached hereto as Exhibit A.

 

7.            Reservation of Rights. The Company reserves the right to conduct background investigations checks on all of its potential employees. Your job offer, therefore, is contingent upon clearance of such a background investigation, if any.

 

8.            Employment Relationship. Employment with the Company is for no specific period of time. Your employment with the Company will be “at will”, meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. Any contrary representations that may have been made to you are superseded by this letter agreement. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized officer of the Company (other than you). Your last day of employment for any reason is referred to herein as the “Date of Termination.”

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 4

 

9.            Payments on Termination of Employment. If your employment with the Company terminates for any reason, the Company shall pay you: (i) the unpaid amount, if any, of your Base Salary through the Date of Termination; (ii) any accrued but unused vacation, if applicable, through the Date of Termination; and (iii) the amount of any documented expenses properly incurred by you on behalf of the Company prior to the Date of Termination and not yet reimbursed. In the event the Company terminates your employment without Cause, in connection with a Change in Control (as defined in Appendix A) or outside of the Change in Control Period (as defined in Appendix A), or there is a material reduction in your duties, authority or responsibilities within the Change in Control Period, and subject to you signing a Separation Agreement and Release, and the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or shorter period as set forth in the Separation Agreement and Release), which shall include a seven (7) day revocation period:

 

a)            The Company shall pay you an amount equal to twelve (12) months of your Base Salary plus any bonus earned, but unpaid for the year prior to the year of termination based on Company performance in the prior year and assuming individual performance at target.

 

b)            Subject to your copayment of premium amounts at the applicable active employees’ rate and your proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider(s), the COBRA provider or you a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to you if you had remained employed by the Company until the earliest of (A) the twelve (12) month anniversary of the Date of Termination; (B) your eligibility for group health plan benefits under any other employer’s group health plan; or (C) the cessation of your continuation rights under COBRA; provided, however, that if the Company reasonably determines that it cannot pay such amounts to the group health plan provider(s) or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payment to payroll payments directly to you for the time period specified above. Such payments, if to you, shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

10.          Tax Matters.

 

a)            Withholding. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law.

 

b)            Tax Advice. You are encouraged to obtain your own tax advice regarding your compensation from the Company. You agree that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or its board of directors, or the LLC or the LLC Board, or any affiliate thereof or its governing body, related to tax liabilities arising from your compensation.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 5

 

11.          Interpretation, Amendment and Enforcement. This letter agreement (including Appendix A), Exhibit A (including its Appendices) and Exhibit B constitute the complete agreement between you and the Company, contain all of the terms of your employment with the Company and supersede any prior agreements, representations or understandings (whether written, oral or implied) between you and the Company. This letter agreement may not be amended or modified, except by an express written agreement signed by both you and a duly authorized officer of the Company. The terms of this letter agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this letter agreement or arising out of, related to, or in any way connected with, this letter agreement, your employment with the Company or any other relationship between you and the Company (the “Disputes”) will be governed by California law, excluding laws relating to conflicts or choice of law. You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in California, in connection with any Dispute or any claim related to any Dispute. This letter agreement is not assignable or transferable by you without the prior written consent of the Company; any attempt to do so shall be void. The Company may freely transfer and assign this letter agreement and any of its obligations to you hereunder. This letter agreement will be binding upon your heirs, executors, assigns, administrators, and other legal representatives, and will be for the benefit of the Company, its successors, and its assigns.

 

* * * * *

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 6

 

We hope that you will accept our offer to join the Company. You may indicate your agreement with these terms and accept this offer by signing and dating both the enclosed duplicate original of this letter agreement and the enclosed Proprietary Information and Invention Assignment Agreement and returning them to me. This offer, if not accepted, will expire at the close of business on January 13, 2023. As required by law, your employment with the Company is contingent upon your providing legal proof of your identity and authorization to work in the United States. Your employment is also contingent upon your starting work with the Company on January 18, 2023.

 

	Very truly yours,
	Apogee Therapeutics, Inc.
	By:	/s/ Michael Henderson
	Name: Michael Henderson
	Title: Chief Executive Officer

 

I accept employment with Apogee Therapeutics, Inc. and acknowledge and fully agree to the terms and conditions set forth in this this employment offer:

 

/s/ Jane Pritchett Henderson
Signature of Employee
By: Jane Pritchett Henderson
Dated: 1/12/2023

 

Attachment

 

Exhibit A: Proprietary Information and Invention Assignment Agreement

 

Exhibit B: Form of Incentive Unit Award Agreement

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 7

 

Appendix A

 

1)            “Cause” shall mean (i) your dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business that results in or is reasonably anticipated to result in harm to the Company; (ii) your commission of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) your failure to perform in all material respects your assigned duties and responsibilities to the reasonable satisfaction of the LLC Board, which failure continues, in the reasonable judgment of the Board, for thirty (30) days after written notice given to you describing such failure; (iv) your gross negligence, willful misconduct that results in or is reasonably anticipated to result in harm to the Company; or (v) your violation of any material provision of any agreement(s) between you and the Company or any Company policies including, without limitation, agreements relating to noncompetition, non-solicitation, nondisclosure and/or assignment of inventions or policies related to ethics or workplace conduct. For the avoidance, of doubt, in the event that it is subsequently determined that there were not proper grounds for termination of your employment for Cause, your termination of employment shall be considered to be without Cause, with you being eligible to receive retroactive payment of severance benefits under this letter agreement, subject to you signing a Separation Agreement and Release, and the Separation Agreement and Release becoming irrevocable, all within 60 days after the date of such termination, which shall include a seven (7) day revocation period.

 

2)            “Change in Control” shall mean (i) the sale of the LLC in which the equity holders of the LLC in their capacity as such no longer own a majority of the outstanding equity securities of the LLC (or its successor); or (ii) any other acquisition of the business of the LLC, as determined by the LLC Board in its sole discretion. For the avoidance of doubt, and notwithstanding anything contained herein to the contrary, in no event shall (i) a bona fide equity or debt financing of the LLC, including a financing in which greater than 50% of the LLC’s outstanding equity securities are acquired by a third-party, (ii) any reorganization required to effect an initial public offering, (iii) a de-SPAC transaction, or (iv) a reverse merger transaction, be deemed a “Change in Control” for purposes of this Agreement.

 

3)            “Change in Control Period” shall mean the twelve (12) month period that immediately follows the first event constituting a Change in Control.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 8

 

Exhibit A

 

PROPRIETARY INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

 

The following confirms and memorializes an agreement that Apogee Therapeutics, Inc., a Delaware corporation (“Company”), and I (Jane Pritchett Henderson) have had since the commencement of my employment (which term, for purposes of this agreement, shall be deemed to include any relationship of service to Company that I may have had prior to actually becoming an employee) with Company in any capacity and that is and has been a material part of the consideration for my employment by Company:

 

1.            I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement or my employment with Company. I will not violate any agreement with or rights of any third party or, except as expressly authorized by Company in writing hereafter, use or disclose my own or any third party’s confidential information or intellectual property when acting within the scope of my employment or otherwise on behalf of Company. Further, I have not retained anything containing any confidential information of a prior employer or other third party, whether or not created by me.

 

2.            Company shall own, and I hereby irrevocably assign to Company, all right, title and interest I may have or acquire in any and all Inventions (as defined below) made, conceived, contributed to, or reduced to practice, in whole or in part, by me during the term of my employment with Company (such Inventions, “Company Inventions”), subject to applicable laws and I will promptly disclose all Inventions to Company. “Inventions” shall mean any (i) discoveries, designs, developments, technology, formulas, processes, architectures, techniques and inventions (whether or not protectable under patent laws); (ii) works of authorship, software programs or subroutines, APIs, databases, data assets, specifications, tools, test kits, user interfaces, media assets, source or object code and information fixed in any tangible medium of expression (whether or not protectable under copyright laws); (iii) trade secrets, know-how, show-how, and ideas (whether or not protectable under trade secret laws); (iv) trademarks, service marks, trade names, and trade dress (whether or not protectable under trademark laws); and (v) any improvements, modifications, derivative works, or enhancements to any of the foregoing. To the extent any of the rights, title and interest in and to Company Inventions cannot be assigned by me to the Company, subject to applicable laws, I hereby grant to the Company an exclusive, royalty-free, transferable, irrevocable, worldwide, fully paid-up, perpetual license (with rights to sublicense through multiple tiers of sublicensees) to fully use, practice, and exploit those non-assignable rights, title and interest, including but not limited to, the right to make, use, sell, offer for sale, import, have made, have sold, distribute, modify, copy, display and perform the Company Inventions. To the extent any of the rights, title and interest in and to Company Inventions can neither be assigned nor licensed by me to the Company, I hereby irrevocably waive and agree never to assert the non-assignable and non-licensable rights, title and interest against Company or any of Company’s successors in interest. If I am employed in California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah or Washington, I acknowledge that I have reviewed the notification in Appendix A. Without disclosing any third party confidential information, I will also disclose any Inventions I believe are excluded by applicable law so that Company can make an independent assessment. I shall further assist Company, at Company’s expense, to further evidence, record and perfect the foregoing assignment and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned. I hereby irrevocably designate and appoint Company as my agent and attorney-in-fact, coupled with an interest and with full power of substitution, to act for and in my behalf to execute and file any document and to do all other lawfully permitted acts to further the purposes of the foregoing with the same legal force and effect as if executed by me. If I wish to clarify that something created by me prior to my employment that relates to Company’s actual or proposed business is not within the scope of the foregoing assignment, I have listed it on Appendix B in a manner that does not violate any third party rights or disclose any confidential information. Without limiting Section 1 or Company’s other rights and remedies, if, when acting within the scope of my employment or otherwise on behalf of Company, I use or (except pursuant to this Section 2) disclose my own or any third party’s confidential information or intellectual property (or if any Invention cannot be fully made, used, reproduced, distributed and otherwise exploited without using or violating the foregoing), Company will have and I hereby grant Company a perpetual, irrevocable, worldwide royalty-free, non-exclusive, transferable, sublicensable (through multiple tiers of sublicensees) right and license to fully use and exploit all such confidential information and intellectual property rights.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 9

 

3.            To the extent allowed by law, paragraph 2 includes all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively “Moral Rights”). To the extent I may have Moral Rights that cannot be assigned under applicable law, I hereby irrevocably waive such Moral Rights.

 

4.            I agree that all Inventions and all other business, technical and financial information (including, without limitation, the identity of and information relating to customers or employees) I develop, learn or obtain during the term of my employment that relate to Company or the business or demonstrably anticipated business of Company or that are received by or for Company in confidence, constitute “Proprietary Information.” I will hold in confidence and not disclose or, except within the scope of my employment, use any Proprietary Information. However, I shall not be obligated under this paragraph with respect to information I can document is or becomes readily publicly available without restriction through no fault of mine. Upon termination of my employment, I will promptly return to Company all items containing or embodying Proprietary Information (including all copies), except that I may keep my personal copies of (i) my compensation records, (ii) materials distributed to shareholders generally and (iii) this Agreement. I also recognize and agree that I have no expectation of privacy with respect to Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice.

 

5.            To the extent permitted under applicable law, until one year after the term of my employment, I will not encourage or solicit any employee or consultant of Company to leave Company for any reason (except for the bona fide firing of Company personnel within the scope of my employment).

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 10

 

6.            I agree that during the term of my employment with Company (whether or not during business hours), I will not engage in any activity that is in any way competitive with the business or demonstrably anticipated business of Company, and I will not assist any other person or organization in competing or in preparing to compete with any business or demonstrably anticipated business of Company.

 

7.            I agree that this Agreement is not an employment contract for any particular term and that I have the right to resign and Company has the right to terminate my employment at will, at any time, for any or no reason, with or without cause. In addition, this Agreement does not purport to set forth all of the terms and conditions of my employment, and, as an employee of Company, I have obligations to Company which are not set forth in this Agreement. However, the terms of this Agreement govern over any inconsistent terms and can only be changed by a subsequent written agreement signed by the President of Company.

 

8.            I understand that my obligations under this Agreement will continue in accordance with its express terms regardless of any changes in my title, position, duties, salary, compensation or benefits or other terms and conditions of employment. I agree that my obligations under paragraphs 2, 3, 4 and 5 of this Agreement shall continue in effect after termination of my employment, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary on my part, and that Company is entitled to communicate my obligations under this Agreement to any future employer or potential employer of mine. My obligations under paragraphs 2, 3 and 4 also shall be binding upon my heirs, executors, assigns, and administrators and shall inure to the benefit of Company and its subsidiaries, successors and assigns.

 

9.            Any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of California without regard to the conflict of laws provisions thereof. I further agree that if one or more provisions of this Agreement are held to be illegal or unenforceable under applicable law, such illegal or unenforceable portion(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms. This Agreement is fully assignable and transferable by Company, but any purported assignment or transfer by me is void. I expressly consent to be bound by the provisions of this Agreement for the benefit of the Company or any parent, subsidiary or affiliate to whose employ I may be transferred without the necessity that this Agreement be resigned at the time of such transfer, and agree that, after such transfer, the term “Company” herein will mean the parent, subsidiary or affiliate to which I am transferred. I also understand that any breach of this Agreement will cause irreparable harm to Company for which damages would not be an adequate remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other remedies and without any requirement to post bond. This Agreement (together with any employment agreement or employment offer I may be subject to) sets for the entire agreement and understanding between the Company and me relating to the subject matter herein and merger all prior discussions between us, written or oral, including but not limited to any and all statements made by any officer, employee or representative of the Company regarding the Company’s financial condition or future prospects. I understand and acknowledge that, except as set forth in this Agreement and in the offer letter from the Company to me: (i) no other representation or inducement has been made to me; and (ii) I have relied on my own judgment and investigation in accepting my employment with the Company. No modification of or amendment to this Agreement nor any waiver of any rights under this Agreement will be effective unless in a writing signed by an authorized representative of the Company and me. Copies of this Agreement, including those transmitted electronically, are effective originals.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 11

 

10.          Pursuant to the federal Defend Trade Secrets Act of 2016, I acknowledge receipt of the following notice: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.” I further understand that nothing contained in this Agreement limits my ability to (A) communicate with any federal, state or local governmental agency or commission, including to provide documents or other information, without notice to Company, (B) share compensation information concerning myself or others, except that this does not permit me to disclose compensation information concerning others that I obtain because my job responsibilities require or allow access to such information, or (C) discuss or disclose information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that I have reason to believe is unlawful.

 

[Remainder of Page Intentionally Left Blank]

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 12

 

I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT COMPANY WILL RETAIN ONE COUNTERPART AND THE OTHER COUNTERPART WILL BE RETAINED BY ME.

 

1/12/2023 (date)
	Employee Signature
	/s/ Jane Pritchett Henderson
	Employee Name (Printed)
	Jane Pritchett Henderson

 

Accepted and Agreed to:
Apogee Therapeutics, Inc.
By	/s/ Michael Henderson
Name	Michael Henderson
Title	CEO

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 13

 

APPENDIX A

 

Notice of Non-assignable Inventions to Employees in California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah and Washington. If I am an employee whose principal workplace is California, Delaware, Illinois, Kansas, Minnesota, North Carolina, Utah or Washington, this Agreement does not apply to an Invention that qualifies fully as a non-assignable invention under the provisions of CA Labor Code § 2870, 19 Del. Code § 805, 765 I.L.C.S. 1060/2, Kansas Statutes Annotated, § 44-130, M.S.A. § 181.78, North Carolina General Statutes §§ 66-57.1, 66-57.2, U.C.A. 1953, § 34-39-3 or RCW §§ 49.44.140 to 49.44.150, as applicable.

 

I have reviewed the applicable notification in this Exhibit below if I am an employee in California, Illinois, Kansas, Minnesota, North Carolina or Washington, and agree that my signature on the Agreement to which this is an exhibit acknowledges receipt of the applicable notification. However, I agree to disclose promptly in writing to Company all Inventions conceived, reduced to practice, created, derived, developed, or made by me during the term of my employment and for three months thereafter, whether or not I believe such Inventions are subject to this Agreement, to permit a determination by Company as to whether or not the Inventions should be the property of Company. Any such information will be received in confidence by Company.

 

===============================================================

 

LIMITED EXCLUSION NOTIFICATION TO EMPLOYEES IN CALIFORNIA

 

California Labor Code Section 2870. Application of provision providing that employee shall assign or offer to assign rights in invention to employer.

 

(a)            Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(i)            Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

(ii)           Result from any work performed by the employee for his employer.

 

(b)            To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

 

 

Apogee Therapeutics, Inc.

January 12, 2023

Page 14

 

APPENDIX B

 

PRIOR MATTER

 

Exhibit 10.5

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

ANTIBODY DISCOVERY AND OPTION AGREEMENT

 

This Antibody Discovery And Option Agreement (“Agreement”) is entered into and effective as of February 24, 2022 (the “Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 34 Cypress Road, Arlington, MA 02474, and Apogee Therapeutics, Inc. (“Apogee”), a company organized under the laws of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.”

 

Recitals

 

Whereas, Paragon has developed a proprietary platform technology for the discovery and development of antibodies against therapeutically relevant targets;

 

Whereas, Apogee desires to engage Paragon to identify, evaluate and develop one or more antibody candidates directed to certain mutually agreed therapeutic targets of interest to Apogee;

 

Whereas, Paragon is willing to perform certain antibody discovery and development activities for Apogee; and

 

Whereas, Apogee will have an exclusive option to enter into separate license agreements with Paragon to develop, manufacture and commercialize the resulting antibodies with respect to a given target, all on the terms and subject to the conditions set forth in this Agreement.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

Agreement

 

Article 1
DEFINED TERMS

 

1.1            “Actual Annual Costs” shall have the meaning set forth in Section 5.2(b).

 

1.2            “Affiliate” shall mean any entity controlled by, controlling, or under common control with a Party hereto. For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlled by” or “under common control”) means the direct or indirect ownership of more than fifty percent (50%) of the voting interest in, or more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of, such corporation or other business entity.

 

1.3            “Antibody” shall mean any molecule, including [***].

 

1.4            “Apogee Indemnitee” shall have the meaning provided in Section 10.2.

 

 

1.5            “Applicable Law” means any national, supra-national, federal, state or local laws, rules, guidances and regulations, in each case, as applicable to the subject matter and the party at issue.

 

1.6            “Background IP” shall mean all Patents and Know-How Controlled by a Party (a) as of the Effective Date, or (b) that otherwise arise outside of and independently of this Agreement. Paragon’s Background IP includes the Paragon Platform Technology.

 

1.7            “Budget” means the agreed budget for the activities set forth in the applicable Research Plan.

 

1.8            “Business Day” shall mean any day other than Saturday, Sunday or other national holidays in the United States.

 

1.9            “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.10          “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

 

1.11          “Commercialize” or “Commercializing” shall mean to market, promote, distribute, offer for sale, sell, have sold, import, have imported, export, have exported or otherwise commercialize an Antibody, including any Project Antibody or Derived Antibody, or Product, as applicable. When used as a noun, “Commercialization” means any and all activities involved in Commercializing.

 

1.12          “Confidential Information” of a Party shall mean any and all non-public scientific, business, regulatory or technical information that is disclosed or made available by or on behalf of one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement, whether in writing, orally, visually or otherwise. Notwithstanding any provision of this Agreement to the contrary, all Project Antibody Inventions and Project Antibody Technology shall be the Confidential Information of both Parties, and each Party shall be deemed as both the “Disclosing Party” and the “Receiving Party” with respect thereto; provided that if Apogee does not exercise its Option or the Parties do not enter into a License Agreement in accordance with this Agreement, then the Project Antibody Inventions and Project Antibody Technology shall thereafter be the Confidential Information of Paragon.

 

1.13          “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any Technology or Intellectual Property Rights, possession by a Party and the ability (whether by ownership, license or otherwise) to grant a license or a sublicense of or under such Technology or Intellectual Property Rights without violating the terms of any agreement or other arrangement with any Third Party.

 

1.14          “Cost Advance” shall have the meaning set forth in Section 5.2(a).

 

 

1.15          “Cover” or “Covering” means, with respect to a Patent, that, in the absence of a license granted under, or ownership of, such Patent, the making, using, selling, importation, or exportation of such product would infringe a valid and unexpired claim of such Patent.

 

1.16          “Deliverables” has the meaning set forth in Section 2.l(c).

 

1.17          “Derived Antibody” shall mean any Antibody that (a) is derived from or constitutes a modification of a Project Antibody, including [***], and (b) is [***]. For avoidance of doubt, any Antibody that [***] will be deemed a Derived Antibody, irrespective of origin.

 

1.18          “Derived Antibody Patent” means any Patent that Covers the composition of matter of, or any method of specifically making or using, any Derived Antibody.

 

1.19          “Develop” or “Developing” shall mean to discover, evaluate, test, research or otherwise develop an Antibody, including a Project Antibody or Derived Antibody, or Product. When used as a noun, “Development” means any and all activities involved in Developing.

 

1.20          “Development Costs” shall mean (a) [***] (such amounts, the “Third Party Costs”), and (b) [***] (such development fees, the “Development Fees”, and the development fees to be paid in any given Calendar Year during the Research Program, the “Annual Development Fees”); in each case ((a) and (b)) to the extent consistent with the applicable Research Plan (including [***]).

 

1.21          “Directed To” means, with regard to an Antibody or Product, that such Antibody or Product is developed or designed to (a) [***], and (b) [***].

 

1.22          “Dispute” shall have the meaning provided in Section 11.7.

 

1.23          “Election Notice” shall have the meaning provided in Section 4.3.

 

1.24          “Field” shall mean the prophylaxis, palliation, treatment and diagnosis of human disease and disorders in all therapeutic areas.

 

1.25          “Indemnified Party” shall have the meaning provided in Section 10.3.

 

1.26          “Indemnifying Party” shall have the meaning provided in Section 10.3.

 

1.27          “Intellectual Property Rights” shall mean any and all proprietary rights provided under (a) patent law, including any Patents; (b) copyright law; or (c) any other applicable statutory provision or common law principle, including trade secret law, that may provide a right in Know-How, or the expression or use thereof.

 

1.28          “JDC” shall have the meaning provided in Section 3.1.

 

 

1.29          “Know-How” shall mean all technical information and know-how in any tangible or intangible form, including (a) inventions, discoveries, trade secrets, data, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and any other technology, including the applicability of any of the foregoing to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and (b) all data, instructions, processes, formulae, strategies, and expertise, whether biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical, analytical, or otherwise and whether related to safety, quality control, manufacturing or other disciplines. Notwithstanding the foregoing, Know-How excludes Patent claims.

 

1.30          “License Agreement” shall have the meaning set forth in Section 4.4(b).

 

1.31          “License Template” shall have the meaning set forth in Section 4.4(a).

 

1.32          “Losses” shall have the meaning provided in Section 10.1.

 

1.33          “Manufacture” or “Manufacturing” shall mean to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, ship or store an Antibody, including any a Project Antibody or Derived Antibody, or Product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing an Antibody, including any a Project Antibody or Derived Antibody, or Product or any component thereof.

 

1.34          “Option” shall have the meaning provided in Section 4.1.

 

1.35          “Option Period” shall have the meaning provided in Section 4.3.

 

1.36          “Paragon Indemnitee” shall have the meaning provided in Section 10.1.

 

1.37          “Paragon Platform Know-How” means (a) Know-How Controlled by Paragon or its Affiliates prior to or during the Term relating to antibody discovery and development, (b) all methods, materials and other Know-How used in the foregoing Controlled by Paragon or its Affiliates, and (c) platforms embodying, components, component steps and other portions of any of the foregoing in (a) or (b) Controlled by Paragon or its Affiliates.

 

1.38          “Paragon Platform Know-How Improvement” means all Know-How developed or discovered through or as a result of the activities performed by or on behalf of Paragon under a Research Program that constitutes an improvement, enhancement, modification, substitution, or alteration to the Paragon Platform Technology; provided, however, to the extent any of the Know-How developed or discovered during the Term that specifically relates to a Project Antibody will be considered Project Antibody Technology and not Paragon Platform Know-How Improvements.

 

1.39          “Paragon Platform Patents” means all Patents that Paragon or its Affiliates Control prior to or during the Term that Cover Paragon Platform Know-How, including Patents that Cover Paragon Platform Know- How Improvements.

 

1.40          “Paragon Platform Technology” means Paragon Platform Know-How, Paragon Platform Know-How Improvements and Paragon Platform Patents.

 

 

1.41          “Patents” shall mean (a) unexpired patents and patent applications, (b) any and all divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates and the like of any such patents and patent applications, and (c) any and all foreign equivalents of the foregoing.

 

1.42          “Product” shall mean any product that comprises or contains (a) any Project Antibody or (b) any Derived Antibody.

 

1.43          “Project Antibody” any and all Antibodies that are Directed To a particular Selected Target and that are discovered, generated, identified or characterized by Paragon in the course of performing the applicable Research Program.

 

1.44          “Project Antibody Invention” shall mean (a) any invention or discovery, whether or not patentable, that constitutes the composition of matter of, or any method of specifically making or using, any Project Antibody or a Derived Antibody; and (b) all Intellectual Property Rights therein.

 

1.45          “Project Antibody Patents” shall mean all Patents that Cover the composition of matter of, or any method of specifically making or using, any Project Antibody.

 

1.46          “Project Antibody Samples” shall have the meaning provided in Section 2.l(c).

 

1.47          “Project Antibody Selection Criteria” means those criteria agreed to by the Parties in the applicable Research Plan that establish that a Project Antibody is suitable for clinical testing.

 

1.48          “Project Antibody Technology” shall mean (a) the Project Antibody Inventions; (b) the Project Antibody Patents, (c) the Sequence Information and Results; and (d) all Intellectual Property Rights therein.

 

1.49          “Representatives” of a Party shall mean such Party’s officers, directors, employees, contractors, subcontractors, agents and consultants.

 

1.50          “Research Plan” has the meaning set forth in Section 2.l(b).

 

1.51          “Research Program” means a research program agreed to by the Parties to identify Project Antibodies with activity against one Selected Target and to perform such additional activities with respect to such Selected Target as set forth in the applicable Research Plan.

 

1.52          “Research Term” shall mean, on a Research Program-by-Research Program basis, the period of time beginning on the Effective Date and continuing until completion of such Research Program.

 

1.53          “Results” means the data, results, analysis, conclusions, outcomes, information, documentation and reports (in each case, excluding Project Antibody Technology) that are generated by or on behalf of Paragon in performance of a Research Program, excluding Project Antibodies.

 

 

1.54          “Selected Target” has the meaning set forth in Section 2.l(a).

 

1.55          “Sequence Information” means electronic files containing all Project Antibody sequences generated under a given Research Program.

 

1.56          “Target” means a protein molecule that (a) [***], and (b) [***]

 

1.57          “Term” shall have the meaning provided in Section 9.1.

 

1.58          “Territory” shall mean worldwide.

 

1.59          “Third Party” shall mean any person or entity other than Paragon or Apogee or an Affiliate of either Paragon or Apogee.

 

1.60          “Third Party Claim” shall have the meaning provided in Section 10.1.

 

Article 2
CONDUCT OF RESEARCH PROGRAM

 

2.1            Research Program.

 

(a)            Target Selection. The Parties intend to initiate one or more Research Programs, each focused on a particular Target (each, a “Selected Target”). No more than one (1) Selected Target will be included in any Research Program, unless the Parties otherwise agree in writing (e.g., in the case of a Research Program seeking to develop [***]). As of the Effective Date, the Parties have agreed to the Selected Targets listed on Exhibit A. Additional Targets may be added to the Selected Targets by mutual written agreement of the Parties, it being understood that each Party may accept or reject a new Selected Target in its sole discretion and neither Party shall be obligated under this Agreement to agree to any further Selected Targets.

 

(b)            Research Plan. No later than [***] days after the Effective Date (or in the case of any Selected Target added after the Effective Date, no later than [***] days after the Parties’ written agreement on such additional Selected Target), the Parties will agree on a research plan for the applicable Selected Target that will include design, modeling, synthesis, evaluation, and other mutually agreed activities (“Research Plan”). For clarity, if at the end of such [***] day period (or any extension thereof mutually agreed in writing) (a) the Parties have not agreed on a Research Plan, or (b) Apogee has not paid Paragon the Research Initiation Fee, the target shall cease to be a Selected Target and Paragon shall have no obligations with respect thereto. Once the Parties agree on a Research Plan and Apogee pays the Research Initiation Fee for the Research Program, Paragon shall conduct research under a Research Program directed to the applicable Selected Target in an effort to produce Project Antibodies against such Selected Target for further Development, Manufacture and Commercialization by Apogee. The Parties may amend the Research Plan upon mutual written agreement. Paragon will use [***] to conduct and complete the activities set forth in such Research Plan on the timelines set forth in such Research Plan and in compliance with the Budget.

 

 

(c)            Deliverables; Project Antibody Samples. Following completion of a Research Program, Paragon will deliver to Apogee a data package that includes Sequence Information for all Project Antibodies and all Results (the “Deliverables”). Additionally, upon request by Apogee, and at [***] cost and expense, Paragon shall provide to Apogee samples of proteins corresponding to Project Antibodies that have been expressed in accordance with the Research Plan (“Project Antibody Samples”) to enable Apogee to evaluate the Option. During the Option Period, Apogee will review the Deliverables and Project Antibody Samples to determine whether [***] Project Antibody meets the Project Antibody Selection Criteria. If Apogee determines that [***] Project Antibody meets the Project Antibody Selection Criteria, then Apogee will so notify Paragon prior to the end of the Option Period.

 

(d)            Conduct of Research Program. During the Research Term, Paragon shall (a) perform the activities assigned to Paragon under the applicable Research Plan in a professional, diligent and good scientific manner, in compliance with all Applicable Law, and in compliance with the applicable Research Plans; (b) ensure that its Representatives and subcontractors diligently perform the applicable Research Program in a manner in accordance with generally accepted industry practices by appropriately trained personnel who are experienced in the relevant fields and in compliance with Applicable Law; (c) keep Apogee fully informed regarding the progress and results of the Research Program; (d) promptly provide Apogee with any additional information regarding the Research Program that Apogee reasonably requests; (e) participate in teleconference(s) at a time(s) agreed upon by the Parties to provide an update to Apogee on the performance of the Research Program; and (f) give Apogee prompt written notice with respect to information known or believed by Paragon to be likely to materially impede or otherwise adversely affect the performance of the Research Program.

 

2.2            Subcontractors. Paragon may perform some of the activities under a Research Program through one or more subcontractors, provided that Paragon shall at all times be fully responsible for the compliance of such subcontractors with this Agreement and for the performance of Paragon’s obligations under this Agreement.

 

2.3            Research Books and Records; Audit. Paragon shall maintain complete and accurate records related to the activities performed by Paragon under a Research Program. All such books and records shall be retained by Paragon until the later of: (a) [***] after the end of the applicable stage of research; and (b) such longer period as may be required by Applicable Law. Upon Apogee’s request and at [***] expense, Paragon shall provide copies of such records or such records shall be made available for Apogee’s reasonable review, audit and inspection upon [***] notice and with reasonable frequency.

 

 

Article 3
GOVERNANCE

 

3.1            Joint Development Committee. The Parties will establish a single Joint Development Committee (the “JDC”) to oversee and coordinate the activities under all Research Programs in accordance with the remainder of this Article 3. The JDC shall be comprised of two (2) employees from Apogee and two (2) employees from Paragon, with each Party designating one (1) such employee as its JDC co-chairperson. Subject to the foregoing, each Party shall appoint its respective Representatives to the JDC from time to time, and may change its Representatives, in its sole discretion, effective upon notice to the other Party designating such change. Representatives from each Party shall have appropriate technical credentials, experience and knowledge pertaining to and ongoing familiarity with the activities to be performed under the Research Programs.

 

3.2            JDC Meetings. The JDC shall meet in accordance with a schedule established by mutual written agreement of the Parties no less frequently than once every three (3) months until, on a Research Program-by-Research Program basis, the end of the period specified in Section 3.5. The JDC may meet by means of teleconference, videoconference or other similar means, as jointly determined by the Parties. As appropriate, additional employees or consultants may from time to time attend the JDC meetings as nonvoting observers, provided that any such consultant shall agree in writing to comply with the confidentiality obligations under this Agreement; and provided further that no Third Party personnel may attend unless otherwise agreed by both Parties. Each Party shall bear its own expenses related to the attendance of the JDC meetings by its representatives. Each Party may also call for special meetings to resolve particular matters requested by such Party. Paragon shall be responsible for keeping minutes of each JDC meeting that record in writing all decisions made, action items assigned or completed and other appropriate matters. Paragon shall send meeting minutes to all members of the JDC within [***] Business Days after a meeting for review. Each member shall have [***] Business Days from receipt in which to comment on and to approve/provide comments to the minutes (such approval not to be unreasonably withheld, conditioned or delayed). If a member, within such time period, does not notify the drafting Party that s/he does not approve of the minutes, the minutes shall be deemed to have been approved by such member.

 

3.3            JDC Functions. The JDC’s responsibilities are as follows:

 

(a)            Developing, reviewing, overseeing and coordinating the activities under each Research Plan;

 

(b)            Periodically reviewing the progress of activities under each Research Plan;

 

(c)            Updating or modifying each Research Plan, provided that such update or modification does not obligate any Party to perform any task or expend any resources outside of or beyond its obligations under the applicable Budget;

 

(d)            Reviewing performance against the Budget and timeline for each Research Program periodically (at least [***]), and periodically meeting to review and (subject to mutual approval of the Parties), approving any annual Budget deviation where such deviation is greater than [***] percent ([***]%);

 

(e)            Reviewing the reconciliation of Actual Annual Costs against the Cost Advance at the end of each Calendar Year for each Research Program; and

 

 

(f)            Determining whether the Project Antibody Selection Criteria for a Research Program are not achievable for any reason and therefore such Research Program no longer warrants further research.

 

3.4            JDC Decision Making and Disputes. The JDC will endeavor to make decisions by consensus, with each of Apogee and Paragon having one vote. If consensus is not reached by the Parties’ Representatives pursuant to such vote, then disputes relating to: (a) the reconciliation of Actual Annual Costs against the Cost Advance, as set forth in Section 5.2(b), will be resolved in accordance with Section 11.7; (b) technical or scientific decisions in the course of operationalizing each Research Program, including the nature of activities to be performed by Paragon thereunder, shall be finally decided by [***]; and (c) the Budget for any Research Program, and all other matters not covered by clauses (a) or (b) shall be finally decided by [***]. For clarity, and notwithstanding the creation of the JDC, each Party shall retain the rights, powers and discretion granted to it hereunder, and the JDC shall not be delegated or vested with such rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing. The JDC shall not have the power to amend, waive or modify any term of this Agreement, and no decision of the JDC shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by the JDC are limited to those specific issues that are expressly provided in this Agreement to be decided by the JDC.

 

3.5            Disbandment. The JDC shall remain in effect from the date on which it is established in accordance with Section 3.1 until, on a Research Program-by-Research Program basis, the earlier of (a) expiration of the Term and (b) Apogee’s exercise of the Option in accordance with Section 4.3.

 

Article 4
OPTION; LICENSE

 

4.1            Grant of Option. Subject to the terms and conditions of this Agreement, on a Research Program-by-Research Program basis, Paragon hereby grants to Apogee, during the Term and subject to delivery of the Election Notice in accordance with Section 4.3, an exclusive option (“Option”), to be granted an exclusive license to, or assignment of, all of Paragon’s right, title, and interest in and to the Project Antibody Technology under the applicable Research Program to Develop and Commercialize Project Antibodies, Derived Antibodies and Products in the Field in the Territory.

 

4.2            Limited License Grant During Option Period. Subject to the terms and conditions of this Agreement, on a Research Program-by-Research Program basis, and effective only during the Term, Paragon hereby grants to Apogee a limited, exclusive, royalty-free license, without the right to sublicense, under the Project Antibody Technology arising from such Research Program solely to evaluate the Option and for the purpose of allowing Apogee to determine whether to exercise the Option with respect to such Research Program.

 

 

4.3            Option Exercise. On a Research Program-by-Research Program basis, Apogee may, in its sole discretion, exercise the Option at any time during the period beginning on the initiation of activities under such Research Program and ending [***] days following Apogee’s receipt of the Deliverables for such Research Program, or such longer period as agreed upon by the Parties (“Option Period”) by delivering written notice of such exercise to Paragon (“Election Notice”). If Apogee fails to exercise an Option in accordance with this Section 4.3 prior to expiration of the applicable Option Period, then, upon such expiration, such Option shall terminate and be of no further force or effect.

 

4.4            License Template; Execution After Option Exercise.

 

(a)            Within [***] days of the Effective Date, the Parties shall negotiate [***] and use [***] to agree upon a form of agreement template (“License Template”) to be used in connection with Apogee’s exercise of its Option with respect to a given Research Program. The License Template will be consistent with the economic and other terms set forth in Exhibit A, and upon mutual agreement by the Parties on the form of the License Template, will be attached to this Agreement and replace the terms on the existing Exhibit B. If the Parties are unable to reach agreement on the definitive terms of the License Template within such [***] period, the matter will be resolved in accordance with Section 11.7.

 

(b)            Within [***] days of Apogee’s exercise of its Option with respect to a Research Program as set forth in Section 4.3, the Parties shall use [***] to finalize and execute a definitive written agreement consistent with the License Template (the “License Agreement”) with respect to such Research Program.

 

Article 5
PAYMENTS

 

5.1            Research Initiation Fee. Apogee shall pay to Paragon, on a Research Program-by-Research Program basis, a one-time nonrefundable fee of $500,000 (the “Research Initiation Fee”) no later than [***] days following finalization of the Research Plan for such Research Program. For clarity, the Research Initiation Fee is nonrefundable and separate from any Development Costs (including Pre-Effective Date Development Costs) or Cost Advance paid or owing with respect to a particular Research Program.

 

5.2            Development Costs.

 

(a)            On a quarterly basis for each Research Program, Apogee will advance to Paragon any Development Costs contemplated in the Budget, including [***], and any [***] reasonably expected to be incurred by Paragon in the performance of the Research Program during the upcoming [***] (less any pre-payments for [***] from earlier [***] that Paragon reasonably anticipates will be carried over to such upcoming [***] ) (the “Cost Advance”). Apogee will pay the Cost Advance within [***] days after receipt of Paragon’s invoice for such Development Costs. The Parties acknowledge that Paragon has incurred approximately $1,254,000 in Development Costs prior to the Effective Date, as a result of work performed by Paragon at risk on one or more Research Programs (the “Pre-Effective Date Development Costs”). Apogee shall reimburse Paragon for the Pre-Effective Date Development Costs no later than [***] days after the later of (i) the Effective Date and (ii) Apogee’s receipt of a written invoice that details the Pre-Effective Date Development Costs and includes reasonable documentation therefor.

 

 

(b)            Within [***] days after the end of each Calendar Year, Paragon will calculate and provide to Apogee a written reconciliation of its actually-incurred Third Party Costs (incurred in a manner consistent with the Budget) for the prior Calendar Year (“Actual Annual Costs”) against that portion of the Cost Advance for such Third Party Costs for that Calendar Year, including reasonable documentation of such Actual Annual Costs. The form of such reconciliation shall be subject to JDC review and approval. If the amounts paid for anticipated Third Party Costs in the Cost Advance exceeds the Actual Annual Costs, then Paragon will credit such excess payment against Development Costs contemplated in the Budget and reasonably expected to be incurred by Paragon in the performance of the Research Program during any upcoming Calendar Year and Apogee will deduct such amount from its next quarterly Cash Advance. If the Cost Advance is less than the Actual Annual Costs, then Paragon will invoice Apogee for the difference and Apogee will pay such amount together with its next quarterly Cost Advance. If no further amounts will be owed to Paragon hereunder, Paragon will refund such amount. For clarity, the above reconciliation will not apply to Annual Development Fees.

 

5.3            Financial Records. Paragon shall keep complete and accurate books of account and records in sufficient detail to enable the Development Costs payable under this Agreement to be determined. Such books and records shall be kept at the principal place of business of Paragon, for at least [***] months following the end of the [***] to which such books and records pertain and Apogee shall be entitled to inspect such books and records at Paragon’s offices upon Apogee’s reasonable request.

 

5.4            Manner and Method of Payment. All payment amounts hereunder are expressed in U.S. dollars (USD) unless otherwise specified. Each payment shall be made by electronic funds transfer in immediately available funds to a bank and account designated in writing by Paragon, unless otherwise specified in writing by Paragon.

 

5.5            Tax. Each Party shall be responsible for paying its own respective taxes in connection with any activities that it performs and any payments that it receives under this Agreement. The Parties will commit [***] to provide each other with any tax forms that may be reasonably necessary in order for either Party to not pay or withhold tax or to pay or withhold tax at a reduced rate under an applicable income tax treaty.

 

5.6            Late Payments. In the event that any payment due for any undisputed amount under this Agreement is not made when due, then the payment shall accrue interest from the date due at a per annum rate equal to [***] above the then-current per annum prime rate reported by the Wall Street Journal (U.S., Western Edition) or, if lower, the maximum legal annual interest rate.

 

 

Article 6
INTELLECTUAL PROPERTY RIGHTS

 

6.1            Ownership.

 

(a)            Background IP. As between the Parties, each Party will retain all right, title and interest in and to all of its Background IP.

 

(b)            Project Antibody Technology. Subject to the rights and licenses granted to Apogee in this Agreement, as between the Parties, Paragon or its Affiliates shall own all right, title and interest in and to all Project Antibody Technology, irrespective of inventorship.

 

6.2            Patent Prosecution, Maintenance and Enforcement - Project Antibody Patents.

 

(a)            Prior to execution of the License Agreement, Paragon shall have the sole right, but not the obligation, to prepare, file, prosecute, maintain or enforce any Project Antibody Patents at Paragon’s sole expense, and Apogee shall reasonably cooperate and assist Paragon in such preparation, filing, prosecution, maintenance and enforcement, at Paragon’s request. Following execution of the License Agreement, the Parties’ respective rights relating to the preparation, filing, prosecution, maintenance and enforcement of Project Antibody Patents shall be as set forth therein and Apogee shall reimburse Paragon for any costs and expenses actually incurred by Paragon in the prosecution and maintenance of any Project Antibody Patents prior to the exercise of the Option by Apogee, in accordance with the terms of the License Agreement.

 

(b)            Apogee covenants and agrees that it will not file or prosecute any Patents Covering any Project Antibody or Derived Antibody (including without limitation any Project Antibody Inventions) during the Term of this Agreement except as permitted under a License Agreement executed by both Parties with respect to a given Research Program.

 

6.3            Defense of Claims Brought by Third Parties. If a Party becomes aware of any actual or potential claim that the research, development, or manufacture of any Project Antibody, Derived Antibody or Product being Developed pursuant to this Agreement or that are contemplated for Development, Manufacture of Commercialization under a License Agreement, infringes the Intellectual Property Rights of any Third Party, such Party will [***] notify the other Party. In any such instance, the Parties will [***] thereafter meet (which may be through the JDC) to discuss [***] regarding the best response to such notice. Certain additional rights and obligations of the Parties with respect to any such claim will be set forth in the applicable License Agreement (to the extent applicable).

 

6.4            No Implied Licenses. Except as expressly set forth herein, no right or license under any Patents, Know-How or Intellectual Property Right of either Party is granted or shall be granted by implication hereunder. All such rights or licenses are or shall be granted only as expressly provided in this Agreement or the applicable License Agreement.

 

 

Article 7
PROTECTION OF CONFIDENTIAL INFORMATION

 

7.1            Confidentiality. Except to the extent expressly authorized by this Agreement, the Receiving Party agrees that, during the Term and for [***] years thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose other than as expressly provided for in this Agreement, any Confidential Information of the Disclosing Party. The Receiving Party may disclose Confidential Information of the Disclosing Party to those of the Receiving Party’s Representatives who have a need for such information, provided that the Receiving Party shall advise such Representatives of the confidential nature thereof, shall ensure that each such Representative is bound in writing by obligations of confidentiality and non-use at least as stringent as those contained in this Agreement, and shall be responsible for the compliance of its Representatives with the terms of this Agreement. The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its Representatives do not disclose or make any unauthorized use of the Confidential Information of the Disclosing Party. The Receiving Party shall [***] notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the Disclosing Party.

 

7.2            Exceptions. The Receiving Party’s obligations under Section 7.1 shall not apply to any Confidential Information of the Disclosing Party that the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party in breach of this Agreement, generally known or available; (b) is known by the Receiving Party at the time of receiving such information from the Disclosing Party; (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party, without the aid, use or application of any Confidential Information of the Disclosing Party.

 

7.3            Authorized Disclosure. Notwithstanding the provisions of this Article 7, the Receiving Party may disclose Confidential Information, without violating its obligations under this Agreement, to the extent the disclosure is:

 

(a)            required by a valid order of a court or other governmental body of competent jurisdiction or as otherwise required by Applicable Law, rule, regulation (including securities laws and regulations), government requirement, or as may be required in connection with any filings made with, or by the disclosure policies of, a stock exchange, provided that the Receiving Party shall give reasonable prior written notice to the Disclosing Party of such required disclosure and, at the [***] request and expense, shall cooperate with the Disclosing Party’s efforts to contest such requirement, to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued or the law, rule or regulation required, or to obtain other confidential treatment of such Confidential Information; or

 

(b)            reasonably necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, in each case, in accordance with this Agreement.

 

 

7.4            No Requirement to Disclose Paragon Platform Technology. Notwithstanding anything to the contrary in this Agreement, Paragon will not be required to disclose any of the Paragon Platform Technology to Apogee other than as required to be included in the Deliverables.

 

7.5            Use of Names. Neither Party shall use the other Party’s name or trademarks in any advertising, sales, or promotional material or in any publication without the prior written consent of the other Party.

 

7.6            Confidentiality of this Agreement. This Agreement and its terms are considered Confidential Information of both Parties, and each Party shall keep confidential and shall not publish or otherwise disclose the terms of this Agreement without the prior written consent of the other Party, except as expressly permitted by Section 7.3 or Section 7.7, and except that both Parties may disclose this Agreement and its terms to actual or potential investors, lenders, and strategic partners in connection with due diligence or similar investigations by such Third Parties or in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by obligations of confidentiality and non-use at least as restrictive as those set forth in this Article 7 (provided that the confidentiality term applicable to such Third Party may be shorter so long as it is commercially reasonable).

 

7.7            Publicity. Except to the extent required by Applicable Law or the rules of any stock exchange or listing agency, neither Party shall issue a press release announcing that they have entered into an Antibody discovery partnership, without the other Party’s prior written consent, which shall not be unreasonably withheld.

 

Article 8
REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMER

 

8.1            Mutual Representations and Warranties. Each Party represents and warrants to the other Party that:

 

(a)            it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof;

 

(b)            it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder; and

 

(c)            this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not and will not conflict with any agreement, instrument, or understanding, oral or written, to which it is or may become a party or by which it may be or become bound.

 

8.2            Paragon Representations, Warrants and Covenants. Paragon hereby represents, warrants and covenants to Apogee that:

 

(a)            it will perform its activities under a Research Program with due care and in accordance with (i) Applicable Law, (ii) the terms and conditions contained herein and the applicable Research Plan, and (iii) generally prevailing industry standards;

 

 

(b)            neither it nor any of its Affiliates have entered or will enter, directly or indirectly, into any contract or any other transaction with any Third Party or Affiliate that conflicts or derogates from its undertakings under this Agreement;

 

(c)            it has the unencumbered right to the Paragon Platform Technology and the right, power and authority to use the Paragon Platform Technology in performance of the Research Plans and the performance of its obligations under this Agreement, in each case in accordance with the terms hereof;

 

(d)            each Representative employed or engaged by Paragon or its Affiliate to conduct the activities under a Research Program has assigned and has executed an agreement assigning its entire right, title and interest in and to Project Antibody Technology to Paragon;

 

(e)            there are no claims, actions, or proceedings pending or threatened, nor are there any formal inquiries initiated or written notices received that may lead to the institution of any such legal proceedings, in each case (or in aggregate) against Paragon or its properties, assets or business, which would, individually or in the aggregate, have a material adverse effect on, or materially prevent, Paragon’s ability to perform under this Agreement or to grant the Option or other rights granted to Apogee under this Agreement; and

 

(f)            none of Paragon, its Representatives, or any other person used by Paragon in the performance of the Agreement has been or is (a) debarred, convicted, or is subject to a pending debarment or conviction, pursuant to section 306 of the United States Food Drug and Cosmetic Act, 21 U.S.C. § 335a, (b) listed by any government or regulatory agencies as ineligible to participate in any government healthcare programs or government procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)), or excluded, debarred, suspended or otherwise made ineligible to participate in any such program, or (c) convicted of a criminal offense related to the provision of healthcare items or services, or is subject to any such pending action. Paragon agrees to inform Apogee in writing promptly if Paragon or any person who is performing activities on its behalf under the Agreement is subject to the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending or threatened.

 

8.3            Disclaimer. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, DURABILITY, MERCHANTABLE QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

 

Article 9
TERM AND TERMINATION

 

9.1            Term. The term of this Agreement (“Term”) shall commence on the Effective Date and, subject to earlier termination of this Agreement in accordance with this Article 9, shall continue in force on a Research Program-by-Research Program basis until the earlier of:

 

(a)            end of the Option Period for such Research Program, as applicable, if such Option is not exercised by Apogee; and

 

(b)            the effective date of the License Agreement for such Research Program if Apogee exercises its Option with respect to such Research Program.

 

Upon the expiration of the Term for all then-existing Research Programs, this Agreement will automatically expire in its entirety. For clarity, any executed License Agreements shall not be affected by such expiration.

 

9.2            Termination of Agreement for Material Breach. Each Party shall have the right to terminate this Agreement or a Research Program upon thirty (30) days’ prior written notice to the other Party upon or after the material breach of any provision of this Agreement by the other Party if the breaching Party has not cured such breach by the end of such thirty (30) day period.

 

9.3            Termination for Convenience. Apogee shall have the right to terminate this Agreement or any Research Program for any reason or no reason upon thirty (30) days’ prior written notice to Paragon; provided that Apogee will pay Paragon any unpaid fees due for Development Costs accrued prior to such effective termination date, as well as any non-cancellable obligations reasonably incurred by Paragon in connection with its activities under any terminated Research Program, as evidenced by Paragon’s records.

 

9.4            Termination for a Bankruptcy Event. Each Party will have the right to terminate this Agreement in the event of a Bankruptcy Event with respect to the other Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the United States Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof (the “Bankruptcy Code”), where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within [***] days after they are instituted, (b) the insolvency or making of an assignment for the benefit of creditors or the admittance by a Party of any involuntary debts as they mature, (c) the institution of any reorganization, arrangement or other readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment of a receiver for all or substantially all of a Party’s assets, or (e) any corporate action taken by the board of directors of a Party in furtherance of any of the foregoing actions.

 

9.5            Disposal of Confidential Information. In the event this Agreement expires or this Agreement or any Research Program is terminated and the Parties have not entered into a License Agreement with respect to an expired or terminated Research Program, each Party shall return to the other Party all Confidential Information of the other Party (including all copies thereof) in such Party’s possession related to any expired or terminated Research Program; provided, however, that each Party may retain one copy of the other Party’s Confidential Information in such Party’s secure archives for the sole purpose of monitoring compliance with its obligations hereunder; provided that it use any Confidential Information of the other Party for any other purpose whatsoever.

 

 

9.6            Accrued Rights; Survival. The expiration or termination of this Agreement for any reason shall not release either Party from any liability or obligation that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement. In the event of expiration or any termination of this Agreement, the following provisions of this Agreement shall survive such expiration or termination in accordance with their respective terms and conditions: Articles 5, 7, 10 and 11, as well as Sections 2.3, 6.1, 6.2(a), 6.4, 9.3, 9.5 and 9.6.

 

Article 10
INDEMNIFICATION; LIMITATION OF LIABILITY

 

10.1          By Apogee. Apogee hereby agrees to defend, indemnify, and hold harmless Paragon, its Affiliates and its or their Representatives (each, an “Paragon Indemnitee”) from and against any and all losses, damages, liabilities, expenses, and costs, including reasonable legal expense and attorneys’ fees (collectively, “Losses”), to which any Paragon Indemnitee may become subject as a result of any claim, demand, action, or other proceeding by any Third Party (“Third Party Claim”) to the extent such Losses result from: (a) the negligence or willful misconduct of any Apogee Indemnitee in the performance of this Agreement; or (b) the material breach by any Apogee Indemnitee of this Agreement; except, in each case, to the extent such Losses result from the negligence or willful misconduct of any Paragon Indemnitee or the material breach by Paragon of this Agreement, or where such Losses are subject to indemnification pursuant to Section 10.2 below.

 

10.2          By Paragon. Paragon hereby agrees to defend, indemnify, and hold harmless Apogee, its Affiliates, and its or their Representatives (each, a “Apogee Indemnitee”) from and against any and all Losses to which any Apogee Indemnitee may become subject as a result of any Third Party Claim to the extent such Losses result from: (a) the negligence or willful misconduct of any Paragon Indemnitee in the performance of this Agreement; or (b) the material breach by any Paragon Indemnitee of this Agreement; except, in each case, to the extent such Losses result from the negligence or willful misconduct of any Apogee Indemnitee, the material breach by Apogee of this Agreement, or where such Losses are subject to indemnification pursuant to Section 10.1 above.

 

10.3          Indemnification Procedure. In connection with any Claim for which a Party (the “Indemnified Party”) seeks indemnification from the other Party (the “Indemnifying Party”) pursuant to this Agreement, the Indemnified Party will: (a) give the Indemnifying Party [***] notice of the Claim; provided, however, that failure to provide such notice will not relieve the Indemnifying Party from its liability or obligation hereunder, except to the extent of any material prejudice as a direct result of such failure; (b) cooperate with the Indemnifying Party, at the Indemnifying Party’s expense, in connection with the defense and settlement of the Claim; and (c) permit the Indemnifying Party to control the defense and settlement of the Claim; provided, however, that the Indemnifying Party may not settle the Claim without the Indemnified Party’s prior written consent, which will not be unreasonably withheld or delayed, in the event that such settlement materially adversely impacts the Indemnified Party’s rights or obligations. Further, the Indemnified Party will have the right to participate (but not control) and be represented in any suit or action by advisory counsel of its selection and at its own expense.

 

 

10.4          Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 7 OR FOR INDEMNIFICATION CLAIMS UNDER ARTICLE 10, IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE OTHER PARTY HAD NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

Article 11
MISCELLANEOUS

 

11.1          Independent Contractor Relationship. Paragon’s relationship with Apogee is that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Neither Party is an agent of the other Party or authorized to make any representation, contract, or commitment on behalf of the other Party.

 

11.2          Force Majeure. Neither Party will be charged with any liability for delay or failure in performance of an obligation under this Agreement (other than any obligation to pay monies when due) to the extent such delay or failure is due to a cause beyond the reasonable control of the affected Party, such as war, riots, labor disturbances, epidemic, pandemic, fire, explosion, and compliance in good faith with any Applicable Law. The Party affected will give prompt written notice to the other Party of the nature of the cause of any material delay or failure to perform, its anticipated duration and any action being taken to avoid or minimize the effect. The Party affected will use its diligent efforts to avoid or remove such causes of delay or failure to perform and to mitigate the effect of such occurrence, and will continue performance in accordance with the terms of this Agreement whenever such causes are removed. The Party affected will give prompt written notice to the other Party of such resumed performance. If any such failure or delay in a Party’s performance hereunder continues for more than [***] days, the other Party may terminate this Agreement upon written notice to the affected Party.

 

11.3          Entire Agreement; Amendment. This Agreement, together with all Exhibits attached hereto, constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, relating to its subject matter. This Agreement (including its Exhibits) may not be changed, modified, amended, or supplemented except by a written instrument signed by both Parties.

 

11.4          Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

 

 

11.5          Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable Law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

 

11.6          Assignment. Neither this Agreement nor any rights or obligations hereunder may be assigned by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent to its successor to all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement shall be void.

 

11.7          Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may arise from time to time during the Term relating to either Party’s rights or obligations hereunder or otherwise relating to the validity, enforceability or performance of this Agreement, including disputes relating to alleged breach or termination of this Agreement but excluding any disputes relating to Article 7 (Confidentiality) hereof or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights (hereinafter, a “Dispute”). In the event of the occurrence of any Dispute, the Parties will follow the following procedures in an attempt to resolve the dispute or disagreement:

 

(a)            The Party claiming that such a Dispute exists will give notice in writing (a “Notice of Dispute”) to the other Party of the nature of the Dispute.

 

(b)            The Dispute will be referred to the then Chief Executive Officer of Paragon and the then Chief Executive Officer of Apogee who will meet no later than [***] days following the initial receipt of the Notice of Dispute and use reasonable endeavors to resolve the Dispute.

 

(c)            If, within [***] days of initial receipt of the Notice of Dispute, the Dispute has not been resolved, or if, for any reason, the meeting described in Section 11.7(b) hereof has not been held within [***] days of initial receipt of the Notice of Dispute, then the Parties agree that such Dispute will be finally resolved through binding arbitration to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules, as specifically modified by the provisions of this Section 11.7(c). The arbitration will be conducted by a panel of three arbitrators. Within [***] days after the initiation of the arbitration, each Party will nominate one person to act as arbitrator, and the two arbitrators so named will then jointly appoint the third arbitrator within [***] days of their appointment, who will serve as chairman of the panel. All three arbitrators must be independent Third Parties having at least [***] years of dispute resolution experience (which may include judicial experience) or legal or business experience in the biotech or pharmaceutical industry. If either Party fails to nominate its arbitrator, or if the arbitrators selected by the Parties cannot agree on a person to be named as chairman within such [***]-day period, JAMS will make the necessary appointments for such arbitrator(s) or the chairman. Once appointed by a Party, such Party will have no ex parte communication with its appointed arbitrator. The place of arbitration will be in Boston, Massachusetts or such other venue as the Parties may mutually agree. The arbitration proceedings and all communications with respect thereto will be in English. Any written evidence originally in another language will be submitted in English translation accompanied by the original or a true copy thereof. The arbitrators have the power to decide all matters in Dispute, including any questions of whether or not such matters are subject to arbitration hereunder. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrators may be entered in any court having competent jurisdiction thereof. The existence, content and results of any arbitration proceedings pursuant to this Section 11.7 will be deemed the Confidential Information of both Parties.

 

 

(d)            Notwithstanding any provision of this Agreement to the contrary, either Party may immediately initiate litigation in any court of competent jurisdiction seeking any remedy at law or in equity, including the issuance of a preliminary, temporary or permanent injunction, to preserve or enforce its rights under this Agreement.

 

(e)            The Parties agree that any disputes relating to Article 7 (Confidentiality) hereof or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights shall be subject to the exclusive jurisdiction of the state and federal courts in New York, New York and each Party hereby submits to such jurisdiction.

 

11.8          Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

11.9          Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by internationally recognized express courier, by email, or by facsimile, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if delivered by express courier, the next Business Day the express courier regularly makes deliveries; or (c) if delivered by email, upon the date upon which the receipt of such email is confirmed by return email. Together with any notice provided by a Party to the other Party in accordance with this Section 11.9, the Party shall send a copy of such notice by email to the other Party.

 

If to Paragon:

Paragon Therapeutic, Inc.

34 Cypress Road
Arlington, MA 02474
Attn: President

 

 

If to Apogee:

Apogee Therapeutics, Inc.

2001 Market St.
Suite 2500
Philadelphia, PA 19103
Attn: President

 

11.10        Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall 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 shall 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 shall be construed to include such person’s or entity’s successors and assigns, (f) the words “herein”, “hereof’ and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Exhibits shall be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall 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 shall 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, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “or.” The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement or have any effect on its interpretation or construction. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language, and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language. To the extent there is any inconsistency or conflict between the terms and conditions of this Agreement and any Research Plan, the terms and conditions of this Agreement will prevail.

 

11.11        No Third-Party Rights. The provisions of this Agreement are for the exclusive benefit of the Parties and their successors and permitted assigns, and no other person shall have any right or claim against any Party by reason of these provisions or be entitled to enforce any of these provisions against any Party.

 

 

11.12        Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

11.13        Expenses. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.

 

11.14        Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns.

 

11.15        Construction. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

 

11.16        Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

 

[Remainder of page left intentionally blank; signature page follows.]

 

In Witness Whereof, the Parties hereto have executed this Antibody Discovery and Option Agreement on the Effective Date.

 

Paragon Therapeutics, Inc.			Apogee Therapeutics, Inc.
By:	/s/ K. Evan Thompson		By:	/s/ H. Evan Thomson
Name:	K. Evan Thompson		Name:	H. Evan Thomson
Title:	President		Title:	Chief Executive Officer
Date:	February 24, 2022		Date:	February 24, 2022

 

Exhibit 10.6

 

AMENDMENT TO ANTIBODY DISCOVERY AND OPTION AGREEMENT

 

This Amendment To Antibody Discovery And Option Agreement (“Amendment”) is entered into and effective as of November 10, 2022 (the “Amendment Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 221 Crescent Street, Building 17, Suite 102B, Waltham, MA 02453, and Apogee Therapeutics, Inc. (“Apogee”), a company organized under the laws of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.” Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings given to them in the Agreement (as defined below).

 

RECITALS

 

Whereas, Paragon and Apogee are parties to that certain Antibody Discovery and Option Agreement, dated as of February 24, 2022 (the “Agreement”);

 

Whereas, pursuant to Section 2.1(a) of the Agreement, Paragon and Apogee now desire to amend the Agreement to include an additional Selected Target.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

1.            Exhibit A is hereby amended by adding “OX40L” at the end of Exhibit A, and the Parties agree that OX40L shall be a Selected Target. The Parties acknowledge and agree that the Research Program for OX40L commenced prior to the Amendment Effective Date, and the terms and conditions of the Agreement, as amended herein, shall apply to work under such Research Program that was conducted prior to the Amendment Effective Date.

 

2.            The Parties are hereby deemed to have agreed on Research Plans for IL4Ra, IL13, and OX40L in accordance with the process and timing required by Section 2.1(b) of the Agreement. The Research Plan for OX40L is attached hereto as Appendix 1.

 

3.            Except as explicitly provided in this Amendment, the Agreement shall continue in full force and effect in accordance with its terms. No subsequent alteration, amendment, change or addition to this Amendment shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party.

 

4.            This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

5.            This Amendment may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile, electronic or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

 

6.            This Amendment, the Appendix, together with the Agreement and all Exhibits thereto (each as amended herein), sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter.

 

[Remainder of page left intentionally blank; signature page follows.]

 

 

In Witness Whereof, the Parties hereto have executed this Amendment to Antibody Discovery and Option Agreement as of the Amendment Effective Date.

 

Paragon Therapeutics, Inc.			Apogee Therapeutics, Inc.
By:	/s/ Evan Thompson		By:	/s/ Michael Henderson
Name:	Evan Thompson		Name:	Michael Henderson
Title:	COO		Title:	CEO
Date:	11/10/2022		Date:	11/10/2022

 

 

Appendix 1

 

OX40L Research Plan

 

Antibody Discovery

 

·

Immunization of Alloy ATX-GK CROSS Mice for Hybridoma Fusions

 

·

Cohort 1 — Homologous Vaccination

 

·

Recombinant Human OX40L-His (ECD)

 

·

Cohort 2— Heterologous Vaccination

 

·

Recombinant Human OX40L-His (ECD)

 

·

Human OX40L DNA (Full-Length)

 

·

Immunization of Alloy ATX-GK CROSS Mice for Single B-Cell Screening

 

·

Cohort 3— Heterologous Vaccination

 

·

Recombinant Human OX40L-His (ECD)

 

·

Human OX40L DNA (Full-Length)

 

In Vitro Assay Development

 

·

Validation of benchmark antibodies and commercial antigens (hOX40 and hOX40L)

 

·

Generation of hOX40L expressing cell lines to evaluate cell binding

 

·

Optimization of receptor-blocking assays (ELISA and FACS) and reporter assays

 

Ex Vivo Assay Development

 

·

Optimization of human PBMC and/or primary CD3+ T-cell assays for OX40L inhibition by cytokine release and other relevant immunological read-outs

 

Hit ID

 

·

KD by SPR and binning against amlitelimab

 

·

Aiming KD < 1 nM

 

·

Sequencing conducted in parallel

 

 

High-Throughput Screening

 

·

Reproduce up to 48 hits recombinantly formatted with half-life extension, as determined by best affinities and sequences with least potential liabilities determined from Hit ID

 

·

Run up to 48 hits in Tier I Pharmacology and Developability assays

 

·

Proceed with up to 24 best candidates in Tier II Pharmacology and Developability assays

 

DC Selection

 

·

Proceed with short-list for Tier III Developability/Pre-Manufacturability and ex vivo assays.

 

·

Conduct NHP PK studies with lead candidates to confirm PK extension.

 

 

Exhibit 10.7

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (“Agreement”) is entered into and effective as of November 4, 2022 (the “Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 221 Crescent Street Building 17, Suite 102B Waltham, MA 02453, and Apogee Therapeutics, Inc. (“Apogee”), a company organized under the laws of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.”

 

RECITALS

 

Whereas, Paragon has developed a proprietary platform technology for the discovery and development of antibodies against therapeutically relevant targets;

 

Whereas, pursuant to that certain Antibody Discovery and Option Agreement, dated as of February 24, 2022 (the “Option Agreement”), Apogee has engaged Paragon to identify, evaluate and develop one or more antibody candidates directed to certain therapeutic targets and has been granted an exclusive option to enter into one or more separate license agreements to develop, manufacture and commercialize the resulting antibodies with respect to a given target;

 

Whereas, Apogee has exercised such option with respect to the Licensed Target (as defined below), and the Parties desire to memorialize the exclusive license from Paragon to Apogee with respect to such Licensed Target, all on the terms and subject to the conditions set forth in this Agreement.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

Article I

 

DEFINITIONS.

 

The following initially capitalized terms have the following meanings (and derivative forms of them shall be interpreted accordingly):

 

1.1            “Affiliate” shall mean any entity controlled by, controlling, or under common control with a Party hereto. For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlled by” or “under common control”) means the direct or indirect ownership of more than fifty percent (50%) of the voting interest in, or more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of, such corporation or other business entity.

 

1.2            “Antibody” shall mean any molecule, including [***].

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.3            “Apogee Indemnitees” has the meaning set forth in Section 9.2.

 

1.4            “Apogee Intellectual Property” means any Patents, Know-How or Intellectual Property Right that is (a) necessary for, and actually used (or held for use) by Apogee or its Affiliates as of the effective date of termination of this Agreement in, the Development, Manufacturing, or Commercialization of Products and (b) Controlled by Apogee or its Affiliates as of the effective date of termination of this Agreement.

 

1.5            “Apogee Patents” has the meaning set forth in Section 5.3.

 

1.6            “Applicable Law” means any national, supra-national, federal, state or local laws, rules, guidances and regulations, in each case, as applicable to the subject matter and the party at issue.

 

1.7            “Bankruptcy Code” has the meaning set forth in Section 8.4.

 

1.8            “Business Day” shall mean any day other than Saturday, Sunday or other national holidays in the United States.

 

1.9            “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.10          “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

 

1.11          “Claim” has the meaning set forth in Section 9.3.

 

1.12          “Commercialize” or “Commercializing” shall mean to market, promote, distribute, offer for sale, sell, have sold, import, have imported, export, have exported or otherwise commercialize an Antibody, including any Licensed Antibody or Derived Antibody, or Product, as applicable. When used as a noun, “Commercialization” means any and all activities involved in Commercializing.

 

1.13          “Commercially Reasonable Efforts” means the level of efforts, expertise, and resources commonly applied by such Party to carry out a particular task or obligation, consistent with the general practice followed by such Party relating to other pharmaceutical compounds, products or therapies owned by it, or to which it has exclusive rights, which are of similar market potential at a similar stage in their development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of other products in development and in the marketplace, supply chain management considerations, the proprietary position of the compound, product or therapy (including with respect to patent or regulatory exclusivity), the regulatory structure involved, the profitability of the applicable compound, product or therapy (including pricing and reimbursement status achieved), and other relevant technical, legal, scientific or medical factors. For clarity, the “Commercially Reasonable Efforts” of a Party under this Agreement will be determined on a product-by-product and country-by-country basis within the Territory, and it is anticipated that the level of effort for different indications and countries may differ and may change over time, reflecting changes in the status of the compound, product or therapy and the indications and the country or countries involved.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.14          “Confidential Information” of a Party shall mean any and all non-public scientific, business, regulatory or technical information that is disclosed or made available by or on behalf of one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement, whether in writing, orally, visually or otherwise. Notwithstanding any provision of this Agreement to the contrary, all Licensed Antibody Inventions and Licensed Antibody Technology shall be the Confidential Information of Apogee; provided that in the event of any termination of this Agreement (other than by Apogee for Paragon’s uncured material breach) and that Apogee assigns the Licensed Antibody Patents to Paragon in accordance with Section 8.5(c), then the Licensed Antibody Inventions and Licensed Antibody Technology shall thereafter be the Confidential Information of Paragon.

 

1.15          “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any Technology or Intellectual Property Rights, possession by a Party and the ability (whether by ownership, license or otherwise) to grant a license or a sublicense of or under such Technology or Intellectual Property Rights without violating the terms of any agreement or other arrangement with any Third Party.

 

1.16          “Cover” or “Covering” means, with respect to a particular product, any Patent, that, in the absence of a license granted under, or ownership of, such Patent, the making, using, selling, importation, or exportation of such product would infringe a valid and unexpired claim of such Patent.

 

1.17          “Derived Antibody” shall mean any Antibody that is created by or on behalf of Apogee, its Affiliates or its or their licensees and: (a) is derived from or constitutes a modification of a Licensed Antibody, [***], and (b) is [***]. For avoidance of doubt, any Antibody that [***] will be deemed a Derived Antibody, irrespective of origin. Notwithstanding the foregoing, a Derived Antibody shall not include (i) [***], or (ii) [***].

 

1.18          “Develop” or “Developing” shall mean to discover, evaluate, test, research or otherwise develop an Antibody, including a Licensed Antibody or Derived Antibody, or Product. When used as a noun, “Development” means any and all activities involved in Developing.

 

1.19          “Development Candidate” means a Licensed Antibody or Derived Antibody that has been nominated by Apogee’s Board of Directors as a “Development Candidate”.

 

1.20          “Directed To” means, with regard to an Antibody or Product, that such Antibody or Product is developed or designed to (a) [***], and (b) [***].

 

1.21          “Disclosing Party” has the meaning set forth in Section 1.14.

 

1.22          “Dispute” has the meaning set forth in Section 10.7.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

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

 

1.24          “Effective Date” has the meaning set forth in the preamble.

 

1.25          “Field” shall mean the prophylaxis, palliation, treatment and diagnosis of human disease and disorders in all therapeutic areas.

 

1.26          “First Commercial Sale” means the first sale of a Product by Apogee, or one of its Affiliates or its or their Sublicensees, to an unaffiliated third party after receipt of all Regulatory Approvals required to market and sell the Product have been obtained in the country in which such Product is sold. Sales for purposes of testing the Product and sample purposes shall not be deemed a First Commercial Sale. Furthermore, for purposes of clarity, the term “First Commercial Sale” as used in this Agreement shall not include: (i) [***]; (ii) [***]; nor (iii) [***].

 

1.27          “Indemnified Party” shall have the meaning provided in Section 9.3.

 

1.28          “Indemnifying Party” shall have the meaning provided in Section 9.3.

 

1.29          “Intellectual Property Rights” shall mean any and all proprietary rights provided under (a) patent law, including any Patents; (b) copyright law; or (c) any other applicable statutory provision or common law principle, including trade secret law, that may provide a right in Know-How, or the expression or use thereof.

 

1.30          “Know-How” shall mean all technical information and know-how in any tangible or intangible form, including (a) inventions, discoveries, trade secrets, data, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and any other technology, including the applicability of any of the foregoing to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and (b) all data, instructions, processes, formulae, strategies, and expertise, whether biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical, analytical, or otherwise and whether related to safety, quality control, manufacturing or other disciplines. Notwithstanding the foregoing, Know-How excludes Patent claims.

 

1.31          “License” has the meaning set forth in Section 2.1(a).

 

1.32          “Licensed Antibody Invention” shall mean (a) any invention or discovery, whether or not patentable, that constitutes the composition of matter of, or any method of specifically making or using, any Licensed Antibody or a Derived Antibody; and (b) all Intellectual Property Rights therein.

 

1.33          “Licensed Antibody Patents” shall mean all Patents that Cover the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.34          “Licensed Antibody” shall mean any and all Antibodies that are Directed To the Licensed Target and that are discovered, generated, identified or characterized by Paragon in the course of performing the Research Program.

 

1.35          “Licensed Antibody Technology” shall mean (a) the Licensed Antibody Inventions; (b) the Licensed Antibody Patents, (c) the Sequence Information and Results; and (d) all Intellectual Property Rights therein.

 

1.36          “Licensed Target” means IL-13.

 

1.37          “Losses” has the meaning provided in Section 9.1.

 

1.38          “MAA” means (a) a New Drug Application in the United States, as defined in the United States Federal Food, Drug and Cosmetics Act, and applicable regulations promulgated thereunder by the FDA; (b) a Biologics License Application in the United States, as defined in the United States Public Health Service Act; or (c) any application filed with any Regulatory Authority in a country other than the United States that is equivalent to either of the foregoing.

 

1.39          “Manufacture” or “Manufacturing” shall mean to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, ship or store an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof.

 

1.40          “Milestone Payment” has the meaning set forth in Section 4.1.

 

1.41          “Milestone” has the meaning set forth in Section 4.1.

 

1.42          “Multispecific Antibody” shall mean any Antibody that is comprised of (a) [***], and (b) [***].

 

1.43          “Net Sales” means the gross amounts received for Product by Apogee, its Affiliates and Sublicensees for sales or other commercial disposition of such Product in the Territory to unrelated Third Parties, less the following, in each case related specifically to the Product and actually incurred, paid or accrued by Apogee, its Affiliates or Sublicensees and not otherwise recovered by or reimbursed to Apogee, its Affiliates, or Sublicensees;

 

(a)            [***];

 

(b)            [***];

 

(c)            [***];

 

(d)            [***];

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(e)            [***]; and

 

(f)             [***].

 

Net Sales will include [***]. Net Sales will be calculated only once for the first bona fide arm’s length sale of the Product by Apogee, its Affiliates or its Sublicensees to a Third Party, and will not include sales between or among [***]. Net Sales shall not include any amounts invoiced for [***] (i) [***], (ii) [***], or (iii) [***].

 

Net Sales shall be determined from the books and records of Apogee, Affiliates of Apogee or any Sublicensee maintained in accordance with generally accepted accounting principles consistently applied. Apogee further agrees in determining Net Sales, it (or its applicable Affiliate or Sublicensee) will use Apogee’s (or such Affiliate’s or Sublicensee’s) then current standard procedures and methodology.

 

If a Product is sold as a Combination Product (as defined below), the Net Sales of such Combination Product for the purpose of calculating royalties and sales-based milestones owed under this Agreement for sales of such Combination Product, shall be determined as follows: [***]. If any Other Component in the Combination Product is not sold separately, Net Sales shall be calculated by [***]. If both the Licensed Component and any of the Other Components are not sold separately, the adjustment to Net Sales shall be determined by the Parties [***] to reasonably reflect the [***]of the contribution of such Licensed Component in the Combination Product to the [***] of such Combination Product.

 

For purposes of this definition, “Combination Product” means any pharmaceutical product that contains two (2) or more active ingredients, including both (A) a Licensed Antibody or Derivative Antibody (the “Licensed Component”); and (B) one (1) or more active pharmaceutical or biological ingredients that are not a Licensed Antibody or Derivative Antibody (“Other Component(s)), either as a [***], [***], or [***], and [***].

 

1.44          “Paragon Indemnitee” shall have the meaning provided in Section 9.1.

 

1.45          “Paragon Know-How” means all Know-How in the Licensed Antibody Technology.

 

1.46          “Party” means has the meaning set forth in the Preamble.

 

1.47          “Patent Challenge” means has the meaning set forth in Section 5.4(a).

 

1.48          “Patent Infringement” means has the meaning set forth in Section 5.4(a).

 

1.49          “Patents” shall mean (a) unexpired patents and patent applications, (b) any and all divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates and the like of any such patents and patent applications, and (c) any and all foreign equivalents of the foregoing.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.50          “Phase I Trial” means a human clinical trial in any country of the type described in 21 C.F.R. §312.21(a), or the foreign equivalent thereof, regardless of where such clinical trial is conducted.

 

1.51          “Product” shall mean any product that comprises or contains any Licensed Antibody or Derived Antibody (whether alone or as part of a Multispecific Antibody).

 

1.52          “Prosecute” or “Prosecution” has the meaning set forth in Section 5.3(a).

 

1.53          “Receiving Party” has the meaning set forth in Section 1.14.

 

1.54          “Regulatory Approval” means all clearances, approvals (including approval of an MAA as well as any applicable pricing and/or reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell and market a pharmaceutical product in a country or territory under this Agreement.

 

1.55          “Regulatory Authority” means any supranational, multinational, federal, national, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the clinical development, manufacture, marketing or sale of a Product in a country or region, including the FDA in the United States and the EMA in Europe.

 

1.56          “Representatives” of a Party shall mean such Party’s officers, directors, employees, contractors, subcontractors, agents and consultants.

 

1.57          “Research Program” means the research program conducted by the Parties pursuant to the Option Agreement with respect to the Licensed Target.

 

1.58          “Results” means the data, results, analysis, conclusions, outcomes, information, documentation and reports (in each case, excluding Licensed Antibody Inventions, Licensed Antibody Patents, and the Sequence Information) that are generated by or on behalf of Paragon in performance of the Research Program, excluding Licensed Antibodies.

 

1.59          “Royalty Payments” has the meaning set forth in Section 4.2.

 

1.60          “Royalty Term” means, on a Product-by-Product and country-by-country basis, the period commencing on First Commercial Sale of the applicable Product in the applicable country in the Territory and ending, with respect to the particular Product and country at issue on the latest of the following dates: (a) the twelfth (12th) anniversary of the date of first commercial sale of such Product in such country; or (b) the expiration of the last-to-expire Valid Claim of a Licensed Antibody Patent owned or controlled by Paragon or Apogee (or a Patent Controlled by Paragon and licensed to Apogee pursuant to Section 2.1(b)) Covering the manufacture, use or sale of such Product in the country at issue.

 

1.61          “Sequence Information” means electronic files containing all Project Antibody sequences generated under the Research Program.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.62          “Sublicensee” means any Third Party with respect to Apogee, to whom Apogee grants a sublicense of, or other authorization or permission granted under, the rights granted to Apogee in Section 2.1.

 

1.63          “Target” means a protein molecule that (a) is chemically distinct from other molecules, and (b) wherein a binding entity derives recognized therapeutic value from binding to such molecule.

 

1.64          “Term” has the meaning set forth in Section 8.1.

 

1.65          “Territory” shall mean worldwide.

 

1.66          “Third Party Claim” shall have the meaning provided in Section 9.1.

 

1.67          “Third Party” shall mean any person or entity other than Paragon or Apogee or an Affiliate of either Paragon or Apogee.

 

1.68          “US” or “United States” means the United States of America and its possessions and territories, including Puerto Rico.

 

1.69          “Valid Claim” means, with respect to a particular country, a claim (including a process, use, or composition of matter claim) of an issued and unexpired patent (or a supplementary protection certificate thereof) that has not (a) irretrievably lapsed or been abandoned, permanently revoked, dedicated to the public or disclaimed, or (b) been held invalid, unenforceable or not patentable by a court, governmental agency, national or regional patent office or other appropriate body that has competent jurisdiction, which holding, finding or decision is final and unappealable or unappealed within the time allowed for appeal.

 

Article II

 

LICENSES; TECHNOLOGY TRANSFER; MULTISPECIFIC ANTIBODIES

 

2.1            License Grant from Paragon.

 

(a)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee, a worldwide, royalty-bearing, exclusive (even as to Paragon) right and license, including the right to sublicense through multiple tiers, under Paragon’s interest in and to the Licensed Antibody Technology to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies, Derived Antibodies and/or Products in the Field in the Territory.

 

(b)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee a worldwide, royalty-bearing, nonexclusive right and license, including the right to sublicense through multiple tiers, under Paragon’s interest in and to any other Patents Controlled by Paragon that are necessary to make, use, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies or Derived Antibodies in the Field in the Territory. For clarity, the foregoing license rights do not include any rights to that portion of [***], unless the Parties otherwise agree in writing.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

2.2            Sublicenses. Any sublicense granted by Apogee under the license granted in Section 2.1(a) shall be consistent with all relevant terms, conditions and restrictions of this Agreement. Apogee shall remain responsible for all of its payments and other performance obligations due under this Agreement, notwithstanding any license or sublicense that it may grant.

 

2.3            No Implied Licenses; Reservation of Rights. Except as expressly set forth herein, no right or license under any Patents, Know-How or Intellectual Property Right of either Party is granted or shall be granted by implication hereunder. All such rights or licenses are or shall be granted only as expressly provided in this Agreement, and each Party reserves to itself all rights not expressly granted under this Agreement.

 

2.4            Initial Information Transfer to Apogee. Within [***] days after the Effective Date, Paragon shall provide Apogee with the Paragon Know-How and Results in existence as of the Effective Date. Additionally, on a continuing basis during the term of the Research Program, within [***] days after additional Paragon Know-How or Results come into existence or are identified by Paragon, Paragon shall disclose and transfer such additional Paragon Know-How and Results to Apogee. Each Party shall bear all costs and expenses incurred by such Party in connection with the disclosure and transfer of any Paragon Know-How and/or Results as set forth above. During the first [***] days after the delivery of the Paragon Know-How and Results transferred to Apogee following completion of the Research Program, in the event Apogee makes any reasonable request for further information or assistance specific to any particular Paragon Know-How or Results, Paragon shall disclose and transfer such Paragon Know-How and/or Results and provide reasonable assistance to Apogee in connection therewith at [***] cost and expense at [***] then-current FTE rates.

 

2.5            Multispecific Antibodies.

 

(a)            License to Paragon. Apogee hereby grants to Paragon, a worldwide, royalty-bearing (in accordance with Article 4, mutatis mutandis), nonexclusive right and license, including the right to sublicense through multiple tiers, under (i) the Licensed Antibody Patents assigned to Apogee in accordance with Section 5.2, and (ii) the other Licensed Antibody Technology, in each case to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products containing or comprising Multispecific Antibodies (i.e., [***]) in the Field and in the Territory.

 

(b)            Right of First Negotiation.

 

(i)             Commencing on the Effective Date and continuing until the [***] anniversary of thereof (“ROFN Period”), Paragon will promptly notify Apogee in writing if Paragon has developed a descriptive research plan with respect to the Development of a Multispecific Antibody or license or grant rights in a Multispecific Antibody to a Third Party, or enters into good faith negotiations pursuant to an offer to or from any Third Party relating to the foregoing. Together with such notice, Paragon will provide to Apogee all material information and research plans developed by Paragon with respect to such Multispecific Antibody. Apogee will have [***] days from receipt of this notice to deliver a written notice to Paragon of Apogee’s desire to engage in negotiations for an agreement concerning the Development, license or grant of rights to such Multispecific Antibody.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(ii)            If Apogee does not provide such written notice to Paragon of its interest to engage in such negotiations within such [***] day period, Paragon shall be free to enter into an agreement with respect to the Development, license or grant of rights to such Multispecific Antibody with a Third Party without further obligation under this Section 2.5(b). If Apogee does provide Paragon such written notice within such period, the Parties will negotiate [***] on a non-exclusive basis for a period of up to [***] months from the date of the Apogee’s notice (“ROFN Negotiation Period”), an agreement for the Development, license or grant of rights to such Multispecific Antibody. Prior to and during the ROFN Negotiation Period, Paragon shall not enter into an agreement with respect to such Multispecific Antibody with any Third Party. In the event that the Parties have not entered into an agreement with respect to Development, license or grant of rights to such Multispecific Antibody prior to the expiration of the ROFN Negotiation Period, Paragon will be free to enter into any agreement with a Third Party with respect to such Multispecific Antibody.

 

Article III

 

DEVELOPMENT, MANUFACTURING & COMMERCIALIZATION

 

3.1            Apogee Responsibilities.

 

(a)            As between the Parties, Apogee shall be solely responsible for all aspects of the Development, Manufacturing, and Commercialization of the Products in the Territory in the Field during the Term, including distribution, product positioning, product strategy, product branding, core messaging, marketing, promotion, detailing activities and all decisions relating to the setting of Product prices in the Territory; invoicing and booking sales, and establishing all terms of sale, and all regulatory Activities with respect to Products in the Territory.

 

(b)            As between the Parties, Apogee shall be solely responsible for selection, registration and maintenance of all trademarks associated with the Products in the Field in the Territory. As between the Parties, Apogee shall solely own such trademarks in the Territory and pay all relevant costs thereof.

 

3.2            Regulatory. As between the Parties, Apogee shall control the regulatory strategy, regulatory filings, regulatory activities (including clinical trials for Products) and communication with each Regulatory Authority for the Products in the Field in the Territory. Apogee shall have the right to reference any relevant data generated by Paragon with respect to Licensed Antibodies, Derivative Antibodies, or Products for the purposes of regulatory filings and safety reporting, including all nonclinical data, pre-approval and post-approval clinical use data, and regulatory data with respect thereto. Apogee or its designee shall be the party to file an application to each applicable Regulatory Authority in the Territory for, and to obtain and maintain, in its own name, the Regulatory Approval of the Products in each country in the Territory.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

3.3            Diligence; Reporting. Apogee shall use Commercially Reasonable Efforts (i) to Develop and seek Regulatory Approval for at least one Product in the Field in the United States and at least one other Major Market Country and (ii) upon receipt of Regulatory Approval for a given Product in a given country, to commercialize such Product in such country, in each case ((i) or (ii)) either by itself or through its Affiliates or Sublicensees or its or their respective contractors. Additionally, on or before [***] of each year during the Term, Apogee shall deliver to Paragon a report summarizing its material development efforts with respect to any Licensed Antibodies, Derived Antibodies and Products, including preclinical and clinical activities, and achievement of any Milestones, during the preceding [***].

 

Article IV

 

FINANCIAL TERMS.

 

4.1            Milestones Payments. Apogee shall make the following one-time payments to Paragon (each, a “Milestone Payment”), based on the achievement of the corresponding milestone (each, a “Milestone”) by Apogee, its Affiliates, or its Sublicensees with respect to the first Product, Licensed Antibody, or Derived Antibody to achieve such Milestone. Apogee shall, within [***] days after it or its Affiliates achieve such Milestone or within [***] days after it learns that its Sublicensee has achieved such Milestone, make the corresponding Milestone Payment to Paragon. Each Milestone Payment shall be paid no more than once, and Apogee’s total Milestone Payments hereunder shall not exceed Three Million Dollars ($3,000,000).

 

	Milestone	Milestone Payment
#1	Achievement of Development Candidate	One Million Dollars ($1,000,000)
#2	First dosing of a human patient in a Phase I Trial	Two Million Dollars ($2,000,000)

 

4.2            Royalties. During the applicable Royalty Term (which shall be measured on a country-by-country and product-by-product basis), Apogee shall pay royalties to Paragon equal to [***] percent ([***]%) of Net Sales of all Product sold by Apogee, its Affiliates or its Sublicensees (“Royalty Payments”). For clarity, any Net Sales of Product made in a given country after the expiration of the Royalty Term for such Product in such country will not be royalty-bearing.

 

4.3            Payment Reports. Within [***] days after the end of the [***], Apogee shall provide to Paragon a written report, on a [***] basis, stating [***]; [***]; and [***]. [***].

 

4.4            Payment Method. All payments due under this Agreement to Paragon shall be made in US Dollars by bank wire transfer in funds to an account designated by Paragon from time to time reasonably in advance of any payment due date.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

4.5            Taxes. The Parties agree to cooperate with one another and use reasonable effort to minimize obligations for any and all income or other taxes required by Applicable Law to be withheld or deducted from any Royalty Payments, Milestone Payments or other payments made by Apogee to Paragon under this Agreement, including by completing all procedural steps, and taking all reasonable measures, to ensure that any withholding tax is reduced or eliminated to the extent permitted under Applicable Law, including income tax treaty provisions and related procedures for claiming treaty relief. To the extent that Apogee is required to deduct and withhold taxes on any payment to Paragon, Apogee shall: (i) deduct such taxes from such payment to Paragon, (ii) pay the amounts of such taxes to the proper government authority in a timely manner, and (iii) promptly submit to Paragon an official tax certificate or other available evidence of such withholding sufficient to enable Paragon to claim such payment of taxes. For the avoidance of doubt, Apogee’s remittance of such withheld amounts to the appropriate governmental authority, together with payment to Paragon of the remaining amount owed, shall constitute full satisfaction of the applicable payment due to Paragon. Apogee shall provide Paragon with reasonable assistance in order to allow Paragon to recover, as permitted by Applicable Law, withholding taxes, value added taxes or similar obligations resulting from payments made hereunder or to obtain the benefit of any present or future treaty against double taxation which may apply to such payments. Paragon shall promptly provide Apogee with any requested tax forms that may be reasonably necessary in order for Apogee to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral tax income treaty.

 

4.6            Foreign Exchange. If any currency conversion shall be required in connection with the calculation of amounts payable hereunder, such conversion shall be made using the exchange rates reported on the [***] business day prior the payment due date for the purchase and sale of Dollars, as reported by the Wall Street Journal (East Coast Edition).

 

4.7            Late Payments. Any amount owed by Apogee to Paragon under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the per annum rate of [***] percentage point above the then-applicable United States prime rate as quoted in the Wall Street Journal (East Coast Edition) (or if it no longer exists, a similarly authoritative source), calculated on a [***] basis, or, if lower, the highest rate permitted under Applicable Law.

 

4.8            Blocked Currency. If by Applicable Law of a country in which Net Sale occurred, conversion of funds into Dollars or transfer of funds from such country to the United States is restricted, forbidden or delayed for more than [***] days, then Apogee can elect, at its sole discretion, that the amounts accrued in such country and owed by Apogee to Paragon under this Agreement shall be paid to Paragon in such country in local currency by deposit in a local bank designated by Paragon, unless the Parties otherwise agree in writing.

 

4.9            Records; Inspection.

 

(a)            Apogee shall, and shall cause its applicable Affiliates to, create and keep complete and accurate records of its sales and other dispositions of all Products, including all records that are reasonably necessary for the purposes of calculating all payments due under this Agreement.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            Upon reasonable advance written notice to Apogee, Paragon shall have the right to retain a nationally recognized (in the US) independent certified public accounting firm to perform on behalf of Paragon an audit, conducted in accordance with U.S. generally accepted accounting principles (GAAP), of such books and records of Apogee or its applicable Affiliates as may be reasonably necessary to verify the accuracy of any reports provided pursuant to Section 4.3 hereunder for any calendar quarter ending not more than [***] calendar months prior to the date of such request. Such audits shall not occur more frequently than [***] in each calendar year and shall not be conducted more than [***] with respect to any reporting period, in each case other than for cause. All information disclosed or observed during any audit pursuant to this Section 4.9 shall be the Confidential Information of Apogee, and Paragon shall cause the accounting firm to retain all such information as Confidential Information, including, if requested by Apogee, by requiring such accounting firm to enter into a customary confidentiality agreement with Apogee prior to the initiation of any such audit.

 

(c)            Upon completion of any audit hereunder, the accounting firm shall provide both Apogee and Paragon a written report disclosing whether the reports submitted by Apogee are correct or incorrect, whether the amounts paid are correct or incorrect, and in each case, the specific details concerning any discrepancies. No other information regarding Apogee’s records shall be provided to Paragon.

 

(d)            Paragon shall bear its internal expenses and the out-of-pocket costs for engaging such accounting firm in connection with performing such audits; provided, however, that if any such audit uncovers an underpayment by Apogee that exceeds [***] percent ([***]%) of the total owed for such payment or payment period, as applicable, then Apogee shall reimburse Paragon for the amounts actually paid to such accounting firm for performing such audit.

 

(e)            If such accounting firm concludes that Apogee has in aggregate underpaid amounts owed to Paragon during the audited period, Apogee shall pay Paragon the amount of the discrepancy within [***] days of the date Paragon delivers to Apogee such accounting firm’s written report and an invoice for such amounts. If such accounting firm concludes that Apogee has in aggregate overpaid amounts owed to Paragon during the audited period, then Apogee may, at its election, either credit such overpaid amount against any future payment obligation to Paragon or require Paragon to refund such amounts within [***] days.

 

Article V

 

INTELLECTUAL PROPERTY.

 

5.1            Ownership. Other than rights granted to Apogee under the Agreement with respect to the Licensed Antibody Technology, nothing in this Agreement shall affect Paragon’s rights I any Patents, Know-How, or other intellectual property owned or controlled by Paragon, now or in the future. Other than rights granted to Paragon under the Agreement with respect to the Apogee Intellectual Property, nothing in the Agreement shall affect Apogee’s rights in any Patents, Know-How, or other intellectual property owned or controlled by Apogee, now or in the future.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

5.2            Assignment of Licensed Antibody Patents.

 

(a)            Effective as of Apogee’s payment of the Milestone Payment #1, Paragon hereby assigns to Apogee all of its right, title, and interest in the Licensed Antibody Patents, in each case to the extent arising from the Research Program.

 

5.3            Patent Prosecution.

 

(a)            Prosecution Generally. For the purpose of this Article V, (i) “prosecute” and “prosecution” shall include any patent interference, opposition, pre-issuance Third Party submission, ex parte re-examination, post-grant review, inter partes review or other similar proceeding, appeals or petitions to any board of appeals in a patent office, appeals to any court for any patent office decisions, reissue proceedings, and applications for patent term extensions and the like, and (ii) “Multispecific Patents” means those Patents owned or Controlled by a Party that claim the composition of matter of, or any method of specifically making or using, a Multispecific Antibody.

 

(b)            Prosecution by Apogee. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining (i) any Patents that it owns or controls (the “Apogee Patents”), and (ii) the Licensed Antibody Patents, in each case, at Apogee’s sole expense.

 

(i)             Consultation with Paragon. Apogee shall provide Paragon with copies of all material correspondence from and to any patent office relating to the Licensed Antibody Patents, and Apogee shall provide Paragon with drafts of all proposed filings to any patent office with respect to such Licensed Antibody Patents in reasonably adequate time before submission of such filings for Paragon’s review and comment. Apogee will take into consideration Paragon’s reasonable comments prior to submitting such filings. Additionally, Apogee will reasonably consider and coordinate with Paragon with respect to the filing of any Multispecific Patents that Apogee owns or otherwise Controls.

 

(ii)            Paragon’s Backup Right to Prosecute. Apogee shall notify Paragon of any decision not to prepare or file, or to abandon, cease prosecution or not maintain any Licensed Antibody Patent anywhere in the Territory. Apogee shall provide such notice at least [***] days prior to any filing or payment due date, or any other due date that requires action, in connection with such Licensed Antibody Patent. In such event, Paragon shall have a backup right, but not the obligation, to prepare, file, or continue prosecution or maintenance of, such Licensed Antibody Patent in Apogee’s name, at Paragon’s expense.

 

(iii)           Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Licensed Antibody Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(c)            Prosecution by Paragon. Except with respect to Licensed Antibody Patents, Paragon shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining any Patents (including Multispecific Patents) that it owns or otherwise Controls. Paragon’s prosecution of such Patents shall be at Paragon’s sole expense. Notwithstanding the foregoing, in prosecuting any Multispecific Patents, Paragon hereby agrees that during the Term, neither Paragon nor any of its Affiliates or licensees will file, or assist any Third Party in filing, any Patent claiming the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody, other than as part of a Multispecific Antibody.

 

(i)             Consultation with Apogee. During the ROFN Period, Paragon shall provide Apogee with copies of all material correspondence from and to any patent office relating to the Multispecific Patents, and Paragon shall provide Apogee with drafts of all proposed filings to any patent office with respect to such Multispecific Patents in reasonably adequate time before submission of such filings for Apogee’s review and comment. Paragon will take into consideration Apogee’s reasonable comments prior to submitting such filings.

 

(ii)            Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Multispecific Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

(d)            Patent Prosecution Costs Prior to Assignment. No later than [***] days after the Effective Date, Apogee shall reimburse Paragon for any actual costs and expenses incurred by Paragon that are related to the Prosecution of any Licensed Antibody Patents prior to the Effective Date. Such costs are approximately $[***] (of which $[***] has already been reimbursed by Apogee), and Apogee will [***] reimburse Paragon for any future Prosecution costs and expenses incurred by Paragon prior to assignment of the Licensed Antibody Patents pursuant to Section 5.2.

 

(e)            CREATE Act. Notwithstanding anything to the contrary in this Agreement, each Party will have the right to invoke the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3) (the “CREATE Act”) when exercising its rights under Article V of this Agreement, without the prior written consent of the other Party. Where such Party intends to invoke the CREATE Act, it will notify the other Party and the other Party will cooperate and coordinate its activities with such Party with respect to any submissions, filings or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a joint research agreement (JRA) as defined in the CREATE Act.

 

5.4            Patent Enforcement and Defense.

 

(a)            Notice of Patent Infringement and Patent Challenge. Each Party shall give the other Party notice of any known or suspected infringement by a Third Party of any Licensed Antibody Patent (“Patent Infringement”) and any known or suspected challenge by a Third Party against the validity or enforceability of any Licensed Antibody Patent (“Patent Challenge”) within [***] days after such Patent Infringement or Patent Challenge comes to such Party’s attention.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            Apogee’s First Right to Enforce or Defend. Apogee shall have the first right, but not the obligation, to bring and control any legal action, including by declaratory judgment action, patent litigation or similar proceeding, in connection with any Patent Infringement or Patent Challenge with respect to the Licensed Antibody Patents in the Territory at its own expense and discretion as it reasonably determines appropriate. Apogee shall keep Paragon informed and reasonably consult with Paragon in the course of such legal action. Paragon shall have the right to be represented in any such legal action by counsel of its choice at its own expense.

 

(c)            Settlement. In connection with any such legal action or proceeding, Apogee shall not enter into any settlement admitting the invalidity or unenforceability of Licensed Antibody Patents without the prior written consent of Paragon (such consent not to be unreasonably conditioned, withheld, or delayed).

 

(d)            Paragon’s Backup Right to Enforce or Defend. If Apogee does not initiate a legal action for Patent Infringement or Patent Challenge within [***] days after a notice from Paragon under Section 5.4(a), then Paragon shall have a backup right, but not the obligation, to initiate such legal action at its own expense.

 

(e)            Allocation of Recoveries. Any recoveries resulting from such legal action initiated by Apogee or Paragon hereunder relating to Patent Infringement or Patent Challenge, including pursuant to a settlement, shall be applied as follows: (i) first to reimburse [***] of each of the Parties in such action; and (ii) second, any amounts remaining after paying the amounts due each Party under clause (i) (the “Remaining Recovery”) shall be allocated to [***] in an amount equal to [***], with the remaining portion of the Remaining Recovery being allocated to as follows: [***] percent ([***]%) to the Party initiating the action, and [***] percent ([***]%) to the other Party.

 

(f)            Apogee Patents. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, enforcement and defense of any Apogee Patents. Any recoveries resulting from any legal action with respect to the Apogee Patents shall be retained solely by Apogee.

 

(g)            Cooperation with Patent Enforcement. At the request of the enforcing Party (and at the requesting Party’s expense), the other Party shall reasonably cooperate and provide any information or assistance in connection with any legal action under this Section 5.4, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the legal action at its own expense.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

5.5            Third Party Patent Proceedings.

 

(a)            Apogee’s First Right to Challenge Third Party Patents. Apogee shall have the sole and exclusive right, but not the obligation, to bring and control any legal action to challenge any Patents controlled by a Third Party, including by declaratory judgment action, patent interference, opposition, pre-issuance submission, ex parte re-examination, post-grant review, inter partes review, patent litigation or similar proceeding, in each case that are necessary or reasonably useful to make, use, offer for sale, sell, import, export, research, develop, manufacture or commercialize any Licensed Antibody, Derived Antibody or Product.

 

(b)            Cooperation by Paragon. At the request of Apogee, Paragon shall cooperate and provide any information or assistance in connection with any legal action under this Section 5.5, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the action at Apogee’s cost and expense.

 

5.6            Common Interest Agreement. At the request of either Party to conduct the activities under this Article V, the Parties shall cooperate in good faith to enter into a customary common-interest agreement intended to preserve attorney-client privilege with respect to disclosures and communications by or on behalf of either Party or its Affiliates in connection with such activities.

 

Article VI

 

PROTECTION OF CONFIDENTIAL INFORMATION

 

6.1            Confidentiality. Except to the extent expressly authorized by this Agreement, the Receiving Party agrees that, during the Term and for [***] years thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose other than as expressly provided for in this Agreement, any Confidential Information of the Disclosing Party. The Receiving Party may disclose Confidential Information of the Disclosing Party to those of the Receiving Party’s Representatives who have a need for such information, provided that the Receiving Party shall advise such Representatives of the confidential nature thereof, shall ensure that each such Representative is bound in writing by obligations of confidentiality and non-use at least as stringent as those contained in this Agreement, and shall be responsible for the compliance of its Representatives with the terms of this Agreement. The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its Representatives do not disclose or make any unauthorized use of the Confidential Information of the Disclosing Party. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the Disclosing Party.

 

6.2            Exceptions. The Receiving Party’s obligations under Section 6.1 shall not apply to any Confidential Information of the Disclosing Party that the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party in breach of this Agreement, generally known or available; (b) is known by the Receiving Party at the time of receiving such information from the Disclosing Party; (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party, without the aid, use or application of any Confidential Information of the Disclosing Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

6.3            Authorized Disclosure. Notwithstanding the provisions of this Article VI, the Receiving Party may disclose Confidential Information, without violating its obligations under this Agreement, to the extent the disclosure is:

 

(a)            required by a valid order of a court or other governmental body of competent jurisdiction or as otherwise required by Applicable Law, rule, regulation (including securities laws and regulations), government requirement, or as may be required in connection with any filings made with, or by the disclosure policies of, a stock exchange, provided that the Receiving Party shall give reasonable prior written notice to the Disclosing Party of such required disclosure and, at [***] request and expense, shall cooperate with the Disclosing Party’s efforts to contest such requirement, to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued or the law, rule or regulation required, or to obtain other confidential treatment of such Confidential Information; or

 

(b)            reasonably necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, in each case, in accordance with this Agreement; or

 

(c)            under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but of shorter duration if customary in the case of subclause (ii)) (i) 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, or (ii) to actual or bona fide potential Sublicensees, acquirers, merger partners, assignees, collaborators, investment bankers, investors or lenders.

 

6.4            Use of Names. Neither Party shall use the other Party’s name or trademarks in any advertising, sales, or promotional material or in any publication without the prior written consent of the other Party.

 

6.5            Confidentiality of this Agreement. This Agreement and its terms are considered Confidential Information of both Parties, and each Party shall keep confidential and shall not publish or otherwise disclose the terms of this Agreement without the prior written consent of the other Party, except as expressly permitted by Section 6.3, and except that both Parties may disclose this Agreement and its terms to its legal, financial and investment banking advisors; bona fide potential and actual investors, acquirers, merger partners, assignees, collaborators, investment bankers, lenders, licensees, sublicensees, or strategic partners in connection with license or partnering transactions, due diligence or similar investigations by such Third Parties or in confidential financing documents; and counsel or other advisors for the foregoing; provided, in each case, that any such Third Party agrees to be bound by obligations of confidentiality and nonuse at least as restrictive as those set forth in this Article VI (provided that the confidentiality term applicable to such Third Party may be shorter so long as it is commercially reasonable).

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

6.6            Publicity. Neither Party will generate or allow any publicity regarding this Agreement or the transaction contemplated hereunder without the other Party first approving such press release or publication in writing, except for any public disclosure by or on behalf of a Party that is, in the opinion of such Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of such Party are listed (or to which an application for listing has been submitted) and except that a Party may, once a press release or other public written statement is approved in writing by both Parties, make subsequent public disclosure of the information contained in such press release or other public written statement without the further approval of the other Party.

 

6.7            Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party will return to the other Party or destroy, as such other Party will direct, all tangible manifestations of such other Party’s Confidential Information at that time in the possession of the receiving Party, subject to the receiving Party’s right to maintain one copy of such tangible manifestations of such other Party’s Confidential Information solely for purposes of monitoring its compliance with this Agreement.

 

Article VII

 

REPRESENTATIONS AND WARRANTIES.

 

7.1            Mutual Representations. Each Party represents and warrants to the other Party that: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not and will not conflict with any agreement, instrument, or understanding, oral or written, to which it is or may become a party or by which it may be or become bound.

 

7.2            Representations of Paragon. Paragon hereby represents, warrants and covenants to Apogee as of the Effective Date that:

 

(a)            Paragon has set forth, in Exhibit A, a complete and accurate list of all the Licensed Antibody Patents it owns or Controls as of the Effective Date (including title, all inventors, owners, assignees, filing date, grant date, expiration date, and status); (ii) Paragon has properly filed, prosecuted and maintained such Licensed Antibody Patents; (iii) Paragon has complied with all duties of disclosure and has not engaged in any inequitable conduct with respect to all such Licensed Antibody Patents; (iv) all patents listed in Exhibit A are in full force and effect and are, to Paragon’s knowledge, valid and enforceable; and (v) other than the Patents listed in Exhibit A, neither Paragon nor any of its Affiliates own or have any rights in, to or under any Patents Covering any Licensed Antibody or Derivative Antibody, or their composition, or any method of specifically manufacturing such Antibody;

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            There are no judgments against or awards or settlements against Paragon or any of its Affiliates, and there are no claims, actions, or proceedings pending or, to Paragon’s knowledge, threatened, nor to Paragon’s knowledge are there any formal inquiries initiated or written notices received that are reasonably likely to lead to the institution of any such legal proceedings, in each case (i) relating to any Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology or alleging that any Third Party has any right to or under any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology that would conflict with the rights granted in this Agreement; or (ii) alleging that any Licensed Antibody Patent is unpatentable, invalid, unenforceable, or not infringed;

 

(c)            All of Paragon’s and its Affiliates’ employees, officers, subcontractors and consultants: (i) have assigned, or are under contractual obligations to assign, to Paragon all inventions conceived, reduced to practice or otherwise related to Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology; (ii) to Paragon’s knowledge, have no obligations under agreements or Applicable Law to assign any interest in any such inventions to any Third Party; and (iii) have existing obligations under agreements or Applicable Law to maintain as confidential Paragon’s Confidential Information as well as confidential information of other parties (including of Apogee and its Affiliates);

 

(d)            none of Paragon, its Representatives, or any other person used by Paragon in the performance of the Agreement has been or is (i) debarred, convicted, or is subject to a pending debarment or conviction, pursuant to section 306 of the United States Food Drug and Cosmetic Act, 21 U.S.C. § 335a, (ii) listed by any government or regulatory agencies as ineligible to participate in any government healthcare programs or government procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)), or excluded, debarred, suspended or otherwise made ineligible to participate in any such program, or (iii) convicted of a criminal offense related to the provision of healthcare items or services, or is subject to any such pending action. Paragon agrees to inform Apogee in writing promptly if Paragon or any person who is performing activities on its behalf under the Agreement is subject to the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending or threatened;

 

(e)            No funding, facilities, or personnel of any governmental authority or any public or private educational or research institutions were used to develop or create any Licensed Antibody Technology, and neither Paragon nor any of its Affiliates has entered into a government funding relationship that would result in rights to any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology residing in the U.S. Government, the National Institutes of Health, or other agency, and the licenses granted hereunder are not subject to overriding obligations to the U.S. Government as set forth in Public Law 96-517 (35 U.S.C. §§ 200-204), or any similar obligations under the laws of any other country in the Territory; and

 

(f)             Subject to Article V, and Section 10.6, during the Term Paragon will not grant a Third Party any license or other right in the Licensed Antibody Technology that would conflict with the rights and licenses granted to Apogee hereunder with respect to such Licensed Antibody Technology.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

7.3            DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, DURABILITY, MERCHANTABLE QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

Article VIII

 

TERM; TERMINATION.

 

8.1            Term. The term of this Agreement shall commence on the Effective Date and shall expire on a country-by-country and Product-by-Product basis on the expiration of the Royalty Term for such Product in such country, in each case, unless earlier terminated by a Party as set forth below in this Article VIII (the “Term”). Upon expiration (but not termination) of the Agreement, the License granted in Section 2.1 shall survive and become royalty-free, fully paid-up, perpetual and irrevocable with respect to the applicable Product in the applicable country.

 

8.2            Termination by Apogee. Apogee shall have the right to terminate this Agreement in its entirety or on country-by-country or Product-by-Product basis for any or no reason upon sixty (60) days’ prior written notice to Paragon.

 

8.3            Material Breach. Either Party may terminate this Agreement in its entirety for the material breach of this Agreement by the other Party, if such material breach remains uncured ninety (90) days (or thirty (30) days with respect to any failure to make any payments owing to a Party hereunder) following notice from the non-breaching Party to the breaching Party specifying such breach, provided that, in the event of a dispute regarding the existence or cure of a material breach, no termination shall become effective until such dispute is finally resolved pursuant to Section 10.7 in favor of the non-breaching Party and the breaching Party fails to cure such material breach within ninety (90) days thereafter.

 

8.4            Insolvency. Each Party will have the right to terminate this Agreement in the event of a Bankruptcy Event with respect to the other Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the United States Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof (the “Bankruptcy Code”), where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within [***] days after they are instituted, (b) the insolvency or making of an assignment for the benefit of creditors or the admittance by a Party of any involuntary debts as they mature, (c) the institution of any reorganization, arrangement or other readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment of a receiver for all or substantially all of a Party’s assets, or (e) any corporate action taken by the board of directors of a Party in furtherance of any of the foregoing actions.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

8.5            Effect of Termination of this Agreement. If this Agreement terminates for any reason (excluding expiration under Section 8.1), whether with respect to a particular Product, particular country, or in its entirety, then the following shall apply:

 

(a)            All licenses granted pursuant to Section 2.1 with respect to the terminated Product(s) and terminated country(ies) shall terminate, except as required for Apogee, its Affiliates, and/or its Sublicensees to continue to complete or wind down any ongoing clinical trials for any Product, as may be required by Applicable Law or ethical principles.

 

(b)            No later than [***] days after the effective date of such termination, each Party shall return or cause to be returned to the other Party, or destroy, all Confidential Information received from the other Party and all copies thereof related to the terminated Product(s) in the terminated country(ies); provided, however, that each Party may retain any Confidential Information reasonably necessary for such Party’s ongoing obligations and rights under this Agreement which do not terminate, and each Party may keep one (1) copy of Confidential Information received from the other Party in its confidential files for record purposes and such copy shall remain subject to Article VI of this Agreement.

 

(c)            If this Agreement is terminated in its entirety, then, upon [***], (which must be provided to [***] within [***] days after the effective date of termination), (i) Apogee shall assign to Paragon all right, title, and interest in the Licensed Antibody Patents previously assigned to Apogee pursuant to Section 5.2, and (ii) Paragon and Apogee shall [***] discuss in good faith, for a period of up to [***] days following such written request, terms and conditions under which Apogee may be willing to grant to Paragon a [***], [***] license under the Apogee Intellectual Property to, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products in the Field in the Territory that were the subject of any Research, Development or Commercialization by Apogee or its Affiliates prior to such termination, (“Reversion Products”), as well as the potential transfer of materials, ongoing clinical trials, and applicable regulatory filings and relevant data generated by Apogee with respect to the Reversion Products and necessary for the development and commercialization of such Reversion Product, such agreement to include commercially reasonable financial and other terms, which terms shall take into consideration Apogee’s contributions made in the Development, Commercialization and other exploitation of the Reversion Products.

 

8.6            Survival of Sublicenses. Upon termination of this Agreement, at the written request of any Sublicensee who is not then in breach of its sublicense agreement, such sublicense agreement will survive such termination of this Agreement, and Paragon will negotiate in good faith the terms and conditions of a direct license with such Sublicensee that is consistent with the terms of this Agreement (as adjusted for the scope of license, products, field of use, and other provisions of the original sublicense).

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

8.7            Accrued Rights; Survival. The expiration or termination of this Agreement for any reason shall not release either Party from any liability or obligation that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement. In the event of expiration or any termination of this Agreement, the following provisions of this Agreement shall survive such expiration or termination in accordance with their respective terms and conditions: Article I (Definitions); Section 2.2 (Sublicenses)(with respect to any payments or other performance obligations prior to conversion (if any) to a direct license pursuant to Section 8.6; Section 2.3 (No Implied Licenses; Reservation of Rights); Section 4.1 (Milestone Payments) (with respect to any outstanding payment obligations incurred prior to the date of termination or expiration); Section 4.2 (Royalties) (with respect to any outstanding payments accrued prior to the effective date of termination); Section 4.3 (Payment Reports) (with respect to the last calendar quarter of the Term to the extent not already reported and any outstanding payment obligation with respect to any royalty payments accrued prior to the date of termination or expiration); Section 4.4 (Payment Method) to 4.8 (Blocked Currency) (for the duration of any outstanding payment obligations under this Agreement); Section 4.9 (Records; Inspection) (for the duration set forth therein); Section 5.1 (Ownership); Section 7.3 (Disclaimer of Warranties); Article VI (Protection of Confidential Information) (for the duration set forth therein); Section 8.5 (Effect of Termination of this Agreement); Section 8.6 (Survival of Sublicenses); Section 8.7 (Accrued Rights; Survival); Article IX (Indemnification); and Article X (Miscellaneous).

 

Article IX

 

INDEMNIFICATION

 

9.1            By Apogee. Apogee hereby agrees to defend, indemnify, and hold harmless Paragon, its Affiliates and its or their Representatives (each, an “Paragon Indemnitee”) from and against any and all losses, damages, liabilities, expenses, and costs, including reasonable legal expense and attorneys’ fees (collectively, “Losses”), to which any Paragon Indemnitee may become subject as a result of any claim, demand, action, or other proceeding by any Third Party (“Third Party Claim”) to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Apogee Indemnitee in the performance of this Agreement; (b) Apogee’s breach of any of its representations, warranties or covenants under this Agreement; or (c) Apogee’s research, testing, development, manufacture, use, sale, distribution, licensing and/or commercialization of Licensed Antibodies, Derived Antibodies and/or Products (but, for clarity, excluding any activities conducted by Paragon under this Agreement or the Option Agreement), in each case ((a) to (c)), except in each case to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Paragon Indemnitee.

 

9.2            By Paragon. Paragon hereby agrees to defend, indemnify, and hold harmless Apogee, its Affiliates, and its or their Representatives (each, a “Apogee Indemnitee”) from and against any and all Losses to which any Apogee Indemnitee may become subject as a result of any Third Party Claim to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Paragon Indemnitee in the performance of this Agreement; or (b) Paragon’s breach of any of its representations, warranties or covenants under this Agreement; in each case ((a) to (c)), except to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Apogee Indemnitee.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

9.3            Indemnification Procedures. The Party claiming indemnity under this Article IX (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 9.1 or Section 9.2, as applicable, will be reduced to the extent the Indemnified Party’s delay in providing notification pursuant to the previous sentence results in material 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 9.3 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, provided that (a) it agrees to indemnify the Indemnified Party from and against all Losses the Indemnified Party may suffer arising out of the Claim; (b) the Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Party; and (c) the Indemnifying Party conducts the defense of the Claim diligently. 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, unless the settlement involves only the payment of money. The Indemnified Party will not settle any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (i) 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 (ii) the Indemnified Party reserves any right it may have under this Article IX to obtain indemnification from the Indemnifying Party.

 

9.4            Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE VI OR FOR INDEMNIFICATION CLAIMS UNDER THIS ARTICLE IX, IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE OTHER PARTY HAD NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article X

 

MISCELLANEOUS.

 

10.1          Independent Contractor Relationship. Paragon’s relationship with Apogee is that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Neither Party is an agent of the other Party or authorized to make any representation, contract, or commitment on behalf of the other Party.

 

10.2          Force Majeure. Neither Party will be charged with any liability for delay or failure in performance of an obligation under this Agreement (other than any obligation to pay monies when due) to the extent such delay or failure is due to a cause beyond the reasonable control of the affected Party, such as war, riots, labor disturbances, epidemic, pandemic, fire, explosion, and compliance in good faith with any Applicable Law (in each case, a “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 to the extent such effects otherwise qualify as a Force Majeure event, even though the pandemic is ongoing and those effects may be foreseeable. In addition, a Force Majeure event may include reasonable measures affirmatively taken by a Party or its Affiliates to respond to the COVID-19 pandemic or any other pandemic (or other Force Majeure event), such as requiring employees to stay home, closures of facilities, delays of clinical trials, or cessation of activities in response to the pandemic. The Party affected by a Force Majeure will give prompt written notice to the other Party of the nature of the cause of any material delay or failure to perform, its anticipated duration and any action being taken to avoid or minimize the effect. The Party affected will use its diligent efforts to avoid or remove such causes of delay or failure to perform and to mitigate the effect of such occurrence, and will continue performance in accordance with the terms of this Agreement whenever such causes are removed. The Party affected will give prompt written notice to the other Party of such resumed performance. If any such failure or delay in a Party’s performance hereunder continues for more than [***] days, the other Party may terminate this Agreement upon written notice to the affected Party.

 

10.3          Entire Agreement; Amendment. This Agreement, together with all Exhibits attached hereto, constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, relating to its subject matter. This Agreement (including its Exhibits) may not be changed, modified, amended, or supplemented except by a written instrument signed by both Parties.

 

10.4          Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

 

10.5          Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable Law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.6          Assignment. Neither this Agreement nor any rights or obligations hereunder may be assigned by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent to its successor to all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement shall be void.

 

10.7          Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may arise from time to time during the Term relating to either Party’s rights or obligations hereunder or otherwise relating to the validity, enforceability or performance of this Agreement, including disputes relating to alleged breach or termination of this Agreement but excluding any disputes relating to Article VI or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights (hereinafter, a “Dispute”). In the event of the occurrence of any Dispute, the Parties will follow the following procedures in an attempt to resolve the dispute or disagreement:

 

(a)            The Party claiming that such a Dispute exists will give notice in writing (a “Notice of Dispute”) to the other Party of the nature of the Dispute.

 

(b)            The Dispute will be referred to the then Chief Executive Officer of Paragon and the then Chief Executive Officer of Apogee who will meet no later than [***] days following the initial receipt of the Notice of Dispute and use reasonable endeavors to resolve the Dispute.

 

(c)            If, within [***] days of initial receipt of the Notice of Dispute, the Dispute has not been resolved, or if, for any reason, the meeting described in Section 10.7(b) hereof has not been held within [***] days of initial receipt of the Notice of Dispute, then the Parties agree that such Dispute will be finally resolved through binding arbitration to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules, as specifically modified by the provisions of this Section 10.7(c). The arbitration will be conducted by a panel of three arbitrators. Within [***] days after the initiation of the arbitration, each Party will nominate one person to act as arbitrator, and the two arbitrators so named will then jointly appoint the third arbitrator within [***] days of their appointment, who will serve as chairman of the panel. All three arbitrators must be independent Third Parties having at least [***] years of dispute resolution experience (which may include judicial experience) or legal or business experience in the biotech or pharmaceutical industry. If either Party fails to nominate its arbitrator, or if the arbitrators selected by the Parties cannot agree on a person to be named as chairman within such [***]-day period, JAMS will make the necessary appointments for such arbitrator(s) or the chairman. Once appointed by a Party, such Party will have no ex parte communication with its appointed arbitrator. The place of arbitration will be in Boston, Massachusetts or such other venue as the Parties may mutually agree. The arbitration proceedings and all communications with respect thereto will be in English. Any written evidence originally in another language will be submitted in English translation accompanied by the original or a true copy thereof. The arbitrators have the power to decide all matters in Dispute, including any questions of whether or not such matters are subject to arbitration hereunder. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrators may be entered in any court having competent jurisdiction thereof. The existence, content and results of any arbitration proceedings pursuant to this Section 10.7 will be deemed the Confidential Information of both Parties.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(d)            Notwithstanding any provision of this Agreement to the contrary, either Party may immediately initiate litigation in any court of competent jurisdiction seeking any remedy at law or in equity, including the issuance of a preliminary, temporary or permanent injunction, to preserve or enforce its rights under this Agreement.

 

(e)            The Parties agree that any disputes relating to Article VI or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights shall be subject to the exclusive jurisdiction of the state and federal courts in Boston, Massachusetts and each Party hereby submits to such jurisdiction.

 

10.8          Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

10.9          Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by internationally recognized express courier, by email, or by facsimile, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if delivered by express courier, the next Business Day the express courier regularly makes deliveries; or (c) if delivered by email, upon the date upon which the receipt of such email is confirmed by return email. Together with any notice provided by a Party to the other Party in accordance with this Section 10.9, the Party shall send a copy of such notice by email to the other Party.

 

	If to Paragon:	Paragon Therapeutics, Inc. 221 Crescent Street Building 17, Suite 102B Waltham, MA 02453 Attn: President
	If to Apogee:	Apogee Therapeutics, Inc. 2001 Market St. Suite 2500 Philadelphia, PA 19103 Attn: President

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.10        Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall 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 shall 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 shall be construed to include such person’s or entity’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Exhibits shall be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall 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 shall 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, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “or.” The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement or have any effect on its interpretation or construction. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language, and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language. To the extent there is any inconsistency or conflict between the terms and conditions of this Agreement and any Research Plan, the terms and conditions of this Agreement will prevail.

 

10.11        No Third-Party Rights. The provisions of this Agreement are for the exclusive benefit of the Parties and their successors and permitted assigns, and no other person shall have any right or claim against any Party by reason of these provisions or be entitled to enforce any of these provisions against any Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.12        Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

10.13        Expenses. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.

 

10.14        Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns.

 

10.15        Construction. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

 

10.16        Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

 

10.17        Performance by Affiliates. A Party may perform some or all of its obligations under this Agreement through Affiliate(s) or may exercise some or all of its rights under this Agreement through Affiliates. However, each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance as if such Party were performing such obligations itself, and references to a Party in this Agreement shall be deemed to also reference such Affiliate. In particular and without limitation, all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in Article VI, and shall be subject to the intellectual property assignment and other intellectual property provisions of Article V as if they were the original Party to this Agreement (and be deemed included in the actual Party to this Agreement for purposes of all intellectual property-related definitions). A Party and its Affiliates shall be jointly and severally liable for their performance under this Agreement.

 

[Remainder of Page Left Intentionally Blank; Signature Page Follows]

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

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

 

Paragon Therapeutics, Inc.			Apogee Therapeutics, Inc.
By:	/s/ Evan Thompson		By:	/s/ Michael Henderson
Name:	Evan Thompson		Name:	Michael Henderson
Title:	COO		Title:	CEO
Date:	11/4/2022		Date:	11/4/2022

 

[SIGNATURE PAGE TO COLLABORATION AND LICENSE AGREEMENT]

 

 

 

Exhibit 10.8

 

AMENDMENT #1 TO LICENSE AGREEMENT

 

This Amendment #1 To License Agreement (“Amendment”) is entered into and effective as of November 10, 2022 (the “Amendment Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 221 Crescent Street, Building 17, Suite 102B, Waltham, MA 02453, and Apogee Therapeutics, Inc. (“Apogee”), a company organized under the laws of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.” Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings given to them in the Agreement (as defined below).

 

RECITALS

 

Whereas, Paragon and Apogee are parties to that certain License Agreement, dated as of November 4, 2022 (the “Agreement”); and

 

Whereas, the Parties now desire to amend certain provisions of the Agreement as set forth below.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

1.            A new Section 1.71 is hereby added to the License Agreement as follows:

 

“Major Market Country” means any of the following: the United States, France, Germany, Italy, Spain, and the United Kingdom.”

 

2.            The following sentence is hereby added to the end of Section 3.3:

 

“For the avoidance of doubt, if Apogee determines, in its sole discretion, that it is commercially unreasonable to pursue Commercialization of a Product in any country (other than the United States), it will not be considered a material breach of this Agreement to cease Development or Commercialization of such Product with respect to such country.”

 

3.            The following sentence is hereby added to the end of Section 5.2(a):

 

“Within ninety (90) days of Paragon’s receipt of Milestone Payment #1, as requested by Apogee, Paragon will assist and take any actions necessary to assign and effectuate the assignment of the Licensed Antibody Patents to Apogee.”

 

4.            This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

5.            This Amendment may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile, electronic or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

 

6.            This Amendment, together with the Agreement and all Exhibits thereto, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter.

 

[Remainder of page left intentionally blank; signature page follows.]

 

 

In Witness Whereof, the Parties hereto have executed this Amendment #1 to the License Agreement as of the Amendment Effective Date.

 

Paragon Therapeutics, Inc.			Apogee Therapeutics, Inc.
By:	/s/ Evan Thompson		By:	/s/ Michael Henderson
Name:	Evan Thompson		Name:	Michael Henderson
Title:	COO		Title:	CEO
Date:	11/10/2022		Date:	11/10/2022

 

 

 

Exhibit 10.9

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

LICENSE AGREEMENT

 

This License Agreement (“Agreement”) is entered into and effective as of April 3, 2023 (the “Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 221 Crescent Street, Building 17, Suite 102B, Waltham, MA 02453, and Apogee Biologics, Inc. (“Apogee”), a company organized under the laws of the State of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.”

 

Recitals

 

Whereas, Paragon has developed a proprietary platform technology for the discovery and development of antibodies against therapeutically relevant targets;

 

Whereas, pursuant to that certain Antibody Discovery and Option Agreement, dated as of February 24, 2022, and amended by Amendment to Antibody Discovery and Option Agreement, dated as of November 10, 2022 (the “Option Agreement”), Apogee has engaged Paragon to identify, evaluate and develop one or more antibody candidates directed to certain therapeutic targets and has been granted an exclusive option to enter into one or more separate license agreements to develop, manufacture and commercialize the resulting antibodies with respect to a given target;

 

Whereas, Apogee has exercised such option with respect to the Licensed Target (as defined below), and the Parties desire to memorialize the exclusive license from Paragon to Apogee with respect to such Licensed Target, all on the terms and subject to the conditions set forth in this Agreement.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

Article I

 

DEFINITIONS.

 

The following initially capitalized terms have the following meanings (and derivative forms of them shall be interpreted accordingly):

 

1.1              “Affiliate” shall mean any entity controlled by, controlling, or under common control with a Party hereto. For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlled by” or “under common control”) means the direct or indirect ownership of more than fifty percent (50%) of the voting interest in, or more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of, such corporation or other business entity. Notwithstanding the foregoing, with respect to either Party, Affiliates of such Party do not include [***] or its Affiliates other than such Party and its subsidiaries.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.2              “Antibody” shall mean any molecule, including [***].

 

1.3              “Apogee Indemnitees” has the meaning set forth in Section 9.2.

 

1.4              “Apogee Intellectual Property” means any Patents, Know-How or Intellectual Property Right that is (a) necessary for, and actually used (or held for use) by Apogee or its Affiliates as of the effective date of termination of this Agreement in, the Development, Manufacturing, or Commercialization of Products and (b) Controlled by Apogee or its Affiliates as of the effective date of termination of this Agreement.

 

1.5              “Apogee Patents” has the meaning set forth in Section 5.3(b).

 

1.6              “Applicable Law” means any national, supra-national, federal, state or local laws, rules, guidances and regulations, in each case, as applicable to the subject matter and the party at issue.

 

1.7              “Bankruptcy Code” has the meaning set forth in Section 8.4.

 

1.8              “Business Day” shall mean any day other than Saturday, Sunday or other national holidays in the United States.

 

1.9              “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.10            “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

 

1.11            “Change of Control” means, with respect to any entity, any of the following: (a) the sale or disposition of all or substantially all of the assets of such entity or its direct or indirect controlling Affiliate to a Third Party; or (b) (i) the acquisition by a Third Party, alone or together with any of its Affiliates, other than an employee benefit plan (or related trust) sponsored or maintained by such entity or any of its Affiliates, of more than fifty percent (50%) of the then-outstanding shares of voting capital stock of such entity or its direct or indirect parent entity that holds, directly or indirectly, beneficial ownership of more than fifty percent (50%) of the then-outstanding shares of voting capital stock of such entity (a “Parent Entity”), or (ii) the acquisition, merger or consolidation of such entity or its Parent Entity with or into another entity, other than, in the case of clause (i) or (ii), an acquisition or a merger or consolidation of such entity or its Parent Entity in which the holders of shares of voting capital stock of such entity or its Parent Entity, as the case may be, immediately prior to such acquisition, merger or consolidation will beneficially own, directly or indirectly, at least fifty percent (50%) of the shares of voting capital stock of the acquiring Third Party or the surviving corporation in such acquisition, merger or consolidation, as the case may be, immediately after such acquisition, merger or consolidation, and in each case of (a) or (b), whether through a single transaction or a series of related transactions, but excluding any and all bona fide financing transactions or internal reorganizations for tax purposes (including the change of place of incorporation or domicile of such entity).

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.12            “Claim” has the meaning set forth in Section 9.3.

 

1.13            “Commercialize” or “Commercializing” shall mean to market, promote, distribute, offer for sale, sell, have sold, import, have imported, export, have exported or otherwise commercialize an Antibody, including any Licensed Antibody or Derived Antibody, or Product, as applicable. When used as a noun, “Commercialization” means any and all activities involved in Commercializing.

 

1.14            “Commercially Reasonable Efforts” means the level of efforts, expertise, and resources commonly applied by such Party to carry out a particular task or obligation, consistent with the general practice followed by such Party relating to other pharmaceutical compounds, products or therapies owned by it, or to which it has exclusive rights, which are of similar market potential at a similar stage in their development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of other products in development and in the marketplace, supply chain management considerations, the proprietary position of the compound, product or therapy (including with respect to patent or regulatory exclusivity), the regulatory structure involved, the profitability of the applicable compound, product or therapy (including pricing and reimbursement status achieved), and other relevant technical, legal, scientific or medical factors. For clarity, the “Commercially Reasonable Efforts” of a Party under this Agreement will be determined on a product-by-product and country-by-country basis within the Territory, and it is anticipated that the level of effort for different indications and countries may differ and may change over time, reflecting changes in the status of the compound, product or therapy and the indications and the country or countries involved.

 

1.15            “Confidential Information” of a Party shall mean any and all non-public scientific, business, regulatory or technical information that is disclosed or made available by or on behalf of one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement, whether in writing, orally, visually or otherwise. Notwithstanding any provision of this Agreement to the contrary, all Licensed Antibody Inventions and Licensed Antibody Technology shall be the Confidential Information of Apogee; provided that in the event of any termination of this Agreement (other than by Apogee for Paragon’s uncured material breach) and that Apogee assigns the Licensed Antibody Patents to Paragon in accordance with Section 8.5(c), then the Licensed Antibody Inventions and Licensed Antibody Technology shall thereafter be the Confidential Information of Paragon.

 

1.16            “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any technology (including Know-How) or Intellectual Property Rights, possession by a Party and the ability (whether by ownership, license or otherwise) to grant a license or a sublicense of or under such technology or Intellectual Property Rights without violating the terms of any agreement or other arrangement with any Third Party. Notwithstanding the foregoing, a Party and its Affiliates shall not be deemed to “Control” any technology or Intellectual Property Rights that (a) prior to the consummation of a Change of Control of such Party is owned or in-licensed, or (b) after the consummation of a Change of Control of such Party, becomes owned or in-licensed (to the extent such technology or Intellectual Property is developed outside of the scope of the activities conducted hereunder and without use of or reference to any technology or Intellectual Property rights such Party or any of Affiliate of such Party immediately before such Change of Control, or any Confidential Information of the other Party), in each case ((a) or (b)), by a Third Party that becomes an Affiliate of such Party after the Effective Date as a result of such Change of Control or an assignee of such Party after the Effective Date as the result of an assignment of this Agreement in connection with a Change of Control unless prior to the consummation of such Change of Control or assignment, such Party or any of its Affiliates also Controlled such technology or Intellectual Property Rights.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.17            “Cover” or “Covering” means, with respect to a particular product, any Patent, that, in the absence of a license granted under, or ownership of, such Patent, the making, using, selling, importation, or exportation of such product would infringe a valid and unexpired claim of such Patent.

 

1.18            “Derived Antibody” shall mean any Antibody that is created by or on behalf of Apogee, its Affiliates or its or their licensees and: (a) is derived from or constitutes a modification of a Licensed Antibody, [***], and (b) is [***]. For avoidance of doubt, any Antibody that [***] will be deemed a Derived Antibody, irrespective of origin. Notwithstanding the foregoing, a Derived Antibody shall not include (i) [***], or (ii) [***].

 

1.19            “Develop” or “Developing” shall mean to discover, evaluate, test, research or otherwise develop an Antibody, including a Licensed Antibody or Derived Antibody, or Product. When used as a noun, “Development” means any and all activities involved in Developing.

 

1.20            “Development Candidate” means a Licensed Antibody or Derived Antibody that has been nominated by Apogee’s Board of Directors as a “Development Candidate”.

 

1.21            “Directed To” means, with regard to an Antibody or Product, that such Antibody or Product is developed or designed to (a) [***], and (b) [***].

 

1.22            “Disclosing Party” has the meaning set forth in Section 1.15.

 

1.23            “Dispute” has the meaning set forth in Section 10.7.

 

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

 

1.25            “Effective Date” has the meaning set forth in the preamble.

 

1.26            “Field” shall mean the prophylaxis, palliation, treatment and diagnosis of human disease and disorders in all therapeutic areas.

 

1.27            “First Commercial Sale” means the first sale of a Product by Apogee, or one of its Affiliates or its or their Sublicensees, to an unaffiliated third party after receipt of all Regulatory Approvals required to market and sell the Product have been obtained in the country in which such Product is sold. Sales for purposes of testing the Product and sample purposes shall not be deemed a First Commercial Sale. Furthermore, for purposes of clarity, the term “First Commercial Sale” as used in this Agreement shall not include: (i) [***]; (ii) [***]; nor (iii) [***].

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.28            “Indemnified Party” shall have the meaning provided in Section 9.3.

 

1.29            “Indemnifying Party” shall have the meaning provided in Section 9.3.

 

1.30            “Intellectual Property Rights” shall mean any and all proprietary rights provided under (a) patent law, including any Patents; (b) copyright law; or (c) any other applicable statutory provision or common law principle, including trade secret law, that may provide a right in Know-How, or the expression or use thereof.

 

1.31            “Know-How” shall mean all technical information and know-how in any tangible or intangible form, including (a) inventions, discoveries, trade secrets, data, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and any other technology, including the applicability of any of the foregoing to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and (b) all data, instructions, processes, formulae, strategies, and expertise, whether biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical, analytical, or otherwise and whether related to safety, quality control, manufacturing or other disciplines. Notwithstanding the foregoing, Know-How excludes Patent claims.

 

1.32            “Licensed Antibody Invention” shall mean (a) any invention or discovery, whether or not patentable, that constitutes the composition of matter of, or any method of specifically making or using, any Licensed Antibody or a Derived Antibody; and (b) all Intellectual Property Rights therein, that in each case is Controlled by Paragon or its Affiliates as of the Effective Date or during the Term.

 

1.33            “Licensed Antibody Patents” shall mean all Patents that Cover the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody.

 

1.34            “Licensed Antibody” shall mean any and all Antibodies that are Directed To the Licensed Target and that are discovered, generated, identified or characterized by Paragon in the course of performing the Research Program.

 

1.35            “Licensed Antibody Technology” shall mean (a) the Licensed Antibody Inventions; (b) the Licensed Antibody Patents; (c) the Sequence Information and Results; and (d) all Intellectual Property Rights therein.

 

1.36            “Licensed Target” means IL-4Ra.

 

1.37            “Losses” has the meaning provided in Section 9.1.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.38            “MAA” means (a) a New Drug Application in the United States, as defined in the United States Federal Food, Drug and Cosmetics Act, and applicable regulations promulgated thereunder by the FDA; (b) a Biologics License Application in the United States, as defined in the United States Public Health Service Act; or (c) any application filed with any Regulatory Authority in a country other than the United States that is equivalent to either of the foregoing.

 

1.39            “Major Market Country” means any of the following: the [***], and [***].

 

1.40            “Manufacture” or “Manufacturing” shall mean to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, ship or store an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof.

 

1.41            “Milestone Payment” has the meaning set forth in Section 4.1.

 

1.42            “Milestone” has the meaning set forth in Section 4.1.

 

1.43            “Multispecific Antibody” shall mean any Antibody that is comprised of (a) [***], and (b) [***].

 

1.44            “Net Sales” means the gross amounts received for Product by Apogee, its Affiliates and Sublicensees for sales or other commercial disposition of such Product in the Territory to unrelated Third Parties, less the following, in each case related specifically to the Product and actually incurred, paid or accrued by Apogee, its Affiliates or Sublicensees and not otherwise recovered by or reimbursed to Apogee, its Affiliates, or Sublicensees;

 

(a)            [***];

 

(b)            [***];

 

(c)            [***];

 

(d)            [***];

 

(e)            [***]; and

 

(f)            [***].

 

Net Sales will include [***]. Net Sales will be calculated only once for the first bona fide arm’s length sale of the Product by Apogee, its Affiliates or its Sublicensees to a Third Party, and will not include sales between or among [***]. Net Sales shall not include any amounts invoiced for [***] (i) [***], (ii) [***], or (iii) [***].

 

Net Sales shall be determined from the books and records of Apogee, Affiliates of Apogee or any Sublicensee maintained in accordance with generally accepted accounting principles consistently applied. Apogee further agrees in determining Net Sales, it (or its applicable Affiliate or Sublicensee) will use Apogee’s (or such Affiliate’s or Sublicensee’s) then current standard procedures and methodology.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

If a Product is sold as a Combination Product (as defined below), the Net Sales of such Combination Product for the purpose of calculating royalties and sales-based milestones owed under this Agreement for sales of such Combination Product, shall be determined as follows: [***]. If any Other Component in the Combination Product is not sold separately, Net Sales shall be calculated by [***]. If both the Licensed Component and any of the Other Components are not sold separately, the adjustment to Net Sales shall be determined by the Parties [***] to reasonably reflect the [***] of the contribution of such Licensed Component in the Combination Product to the [***] of such Combination Product.

 

For purposes of this definition, “Combination Product” means any pharmaceutical product that contains two (2) or more active ingredients, including both (A) a Licensed Antibody or Derivative Antibody (the “Licensed Component”); and (B) one (1) or more active pharmaceutical or biological ingredients that are not a Licensed Antibody or Derivative Antibody (“Other Component(s)”), either as a [***], [***], or [***], and [***].

 

1.45            “Paragon Indemnitee” shall have the meaning provided in Section 9.1.

 

1.46            “Paragon Know-How” means all Know-How in the Licensed Antibody Technology.

 

1.47            “Party” means has the meaning set forth in the Preamble.

 

1.48            “Patent Challenge” means has the meaning set forth in Section 5.4(a).

 

1.49            “Patent Infringement” means has the meaning set forth in Section 5.4(a).

 

1.50            “Patents” shall mean (a) unexpired patents and patent applications, (b) any and all divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates and the like of any such patents and patent applications, and (c) any and all foreign equivalents of the foregoing.

 

1.51            “Phase I Trial” means a human clinical trial in any country of the type described in 21 C.F.R. §312.21(a), or the foreign equivalent thereof, regardless of where such clinical trial is conducted.

 

1.52            “Product” shall mean any product that comprises or contains any Licensed Antibody or Derived Antibody (whether alone or as part of a Multispecific Antibody).

 

1.53            “Prosecute” or “Prosecution” has the meaning set forth in Section 5.3(a).

 

1.54            “Receiving Party” has the meaning set forth in Section 1.15.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.55            “Regulatory Approval” means all clearances, approvals (including approval of an MAA as well as any applicable pricing and/or reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell and market a pharmaceutical product in a country or territory under this Agreement.

 

1.56            “Regulatory Authority” means any supranational, multinational, federal, national, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the clinical development, manufacture, marketing or sale of a Product in a country or region, including the FDA in the United States and the EMA in Europe.

 

1.57            “Representatives” of a Party shall mean such Party’s officers, directors, employees, contractors, subcontractors, agents and consultants.

 

1.58            “Research Program” means the research program conducted by the Parties pursuant to the Option Agreement with respect to the Licensed Target.

 

1.59            “Results” means the data, results, analysis, conclusions, outcomes, information, documentation and reports (in each case, excluding Licensed Antibody Inventions, Licensed Antibody Patents, and the Sequence Information) that are generated by or on behalf of Paragon in performance of the Research Program, excluding Licensed Antibodies.

 

1.60            “Royalty Payments” has the meaning set forth in Section 4.2.

 

1.61            “Royalty Term” means, on a Product-by-Product and country-by-country basis, the period commencing on First Commercial Sale of the applicable Product in the applicable country in the Territory and ending, with respect to the particular Product and country at issue on the latest of the following dates: (a) the twelfth (12th) anniversary of the date of first commercial sale of such Product in such country; or (b) the expiration of the last-to-expire Valid Claim of a Licensed Antibody Patent owned or controlled by Paragon or Apogee (or a Patent Controlled by Paragon and licensed to Apogee pursuant to Section 2.1(b)) Covering the Manufacture, use or sale of such Product in the country at issue.

 

1.62            “Sequence Information” means electronic files of Paragon containing all Project Antibody sequences generated under the Research Program.

 

1.63            “Sublicensee” means any Third Party with respect to Apogee, to whom Apogee grants a sublicense of, or other authorization or permission granted under, the rights granted to Apogee in Section 2.1.

 

1.64            “Target” means a protein molecule that (a) is chemically distinct from other molecules, and (b) wherein a binding entity derives recognized therapeutic value from binding to such molecule.

 

1.65            “Term” has the meaning set forth in Section 8.1.

 

1.66            “Territory” shall mean worldwide.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.67            “Third Party Claim” shall have the meaning provided in Section 9.1.

 

1.68            “Third Party” shall mean any person or entity other than Paragon or Apogee or an Affiliate of either Paragon or Apogee.

 

1.69            “US” or “United States” means the United States of America and its possessions and territories, including Puerto Rico.

 

1.70            “Valid Claim” means, with respect to a particular country, a claim (including a process, use, or composition of matter claim) of an issued and unexpired patent (or a supplementary protection certificate thereof) that has not (a) irretrievably lapsed or been abandoned, permanently revoked, dedicated to the public or disclaimed, or (b) been held invalid, unenforceable or not patentable by a court, governmental agency, national or regional patent office or other appropriate body that has competent jurisdiction, which holding, finding or decision is final and unappealable or unappealed within the time allowed for appeal.

 

Article II

 

LICENSES; TECHNOLOGY TRANSFER; MULTISPECIFIC ANTIBODIES

 

2.1            License Grant from Paragon.

 

(a)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee, a worldwide, royalty-bearing, exclusive (even as to Paragon) right and license, including the right to sublicense through multiple tiers, under Paragon’s interest in and to the Licensed Antibody Technology to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies, Derived Antibodies and/or Products in the Field in the Territory.

 

(b)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee a worldwide, royalty-bearing, nonexclusive right and license, including the right to sublicense through multiple tiers, under Paragon’s interest in and to any other Patents Controlled by Paragon that are necessary to make, use, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies or Derived Antibodies in the Field in the Territory. For clarity, the foregoing license rights do not include any rights to that portion of [***], unless the Parties otherwise agree in writing.

 

2.2            Sublicenses. Any sublicense granted by Apogee under the license granted in Section 2.1 shall be consistent with all relevant terms, conditions and restrictions of this Agreement. Apogee shall remain responsible for all of its payments and other performance obligations due under this Agreement, notwithstanding any license or sublicense that it may grant.

 

2.3            No Implied Licenses; Reservation of Rights. Except as expressly set forth herein, no right or license under any Patents, Know-How or Intellectual Property Right of either Party is granted or shall be granted by implication hereunder. All such rights or licenses are or shall be granted only as expressly provided in this Agreement, and each Party reserves to itself all rights not expressly granted under this Agreement.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

2.4            Initial Information Transfer to Apogee. Within [***] days after the Effective Date, Paragon shall provide Apogee with the Paragon Know-How and Results in existence as of the Effective Date. Additionally, on a continuing basis during the term of the Research Program, within [***] days after additional Paragon Know-How or Results come into existence or are identified by Paragon, Paragon shall disclose and transfer such additional Paragon Know-How and Results to Apogee. Each Party shall bear all costs and expenses incurred by such Party in connection with the disclosure and transfer of any Paragon Know-How and/or Results as set forth above. During the first [***] days after the delivery of the Paragon Know-How and Results transferred to Apogee following completion of the Research Program, in the event Apogee makes any reasonable request for further information or assistance specific to any particular Paragon Know-How or Results, Paragon shall disclose and transfer such Paragon Know-How and/or Results and provide reasonable assistance to Apogee in connection therewith at [***] cost and expense at [***] then-current FTE rates.

 

2.5            Multispecific Antibodies.

 

(a)            License to Paragon. Apogee hereby grants to Paragon, a worldwide, royalty-bearing (in accordance with Article IV, mutatis mutandis), nonexclusive right and license, including the right to sublicense through multiple tiers, under (i) the Licensed Antibody Patents assigned to Apogee in accordance with Section 5.2, and (ii) the other Licensed Antibody Technology, in each case to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products containing or comprising Multispecific Antibodies (i.e., [***]) in the Field and in the Territory.

 

(b)            Right of First Negotiation.

 

(i)            Commencing on the Effective Date and continuing until the [***] anniversary thereof (“ROFN Period”), Paragon will promptly notify Apogee in writing if Paragon has developed a descriptive research plan with respect to the Development of a Multispecific Antibody or a plan to license or grant rights in a Multispecific Antibody to a Third Party, or enters into good faith negotiations pursuant to an offer to or from any Third Party relating to the foregoing. Together with such notice, Paragon will provide to Apogee all material information and research plans developed by Paragon with respect to such Multispecific Antibody. Apogee will have [***] days from receipt of this notice to deliver a written notice to Paragon of Apogee’s desire to engage in negotiations for an agreement concerning the Development, license or grant of rights to such Multispecific Antibody.

 

(ii)            If Apogee does not provide such written notice to Paragon of its interest to engage in such negotiations within such [***] day period, Paragon shall be free to enter into an agreement with respect to the Development, license or grant of rights to such Multispecific Antibody with a Third Party without further obligation under this Section 2.5(b). If Apogee does provide Paragon such written notice within such period, the Parties will negotiate [***] on a non-exclusive basis for a period of up to [***] months from the date of Apogee’s notice (“ROFN Negotiation Period”), an agreement for the Development, license or grant of rights to such Multispecific Antibody. Prior to and during the ROFN Negotiation Period, Paragon shall not enter into an agreement with respect to such Multispecific Antibody with any Third Party. Unless and until the Parties have entered into an agreement with respect to such Multispecific Antibody, Apogee shall have no rights with respect to such Multispecific Antibody. In the event that the Parties have not entered into an agreement with respect to Development, license or grant of rights to such Multispecific Antibody prior to the expiration of the ROFN Negotiation Period, Paragon will be free to enter into any agreement with a Third Party with respect to such Multispecific Antibody.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article III

 

DEVELOPMENT, MANUFACTURING & COMMERCIALIZATION

 

3.1            Apogee Responsibilities.

 

(a)            As between the Parties, Apogee shall be solely responsible for all aspects of the Development, Manufacturing, and Commercialization of the Products in the Territory in the Field during the Term, including distribution, product positioning, product strategy, product branding, core messaging, marketing, promotion, detailing activities and all decisions relating to the setting of Product prices in the Territory; invoicing and booking sales, and establishing all terms of sale, and all regulatory activities with respect to Products in the Territory.

 

(b)            As between the Parties, Apogee shall be solely responsible for selection, registration and maintenance of all trademarks associated with the Products in the Field in the Territory. As between the Parties, Apogee shall solely own such trademarks in the Territory and pay all relevant costs thereof.

 

3.2            Regulatory. As between the Parties, Apogee shall control the regulatory strategy, regulatory filings, regulatory activities (including clinical trials for Products) and communication with each Regulatory Authority for the Products in the Field in the Territory. Apogee shall have the right to reference any relevant data generated by Paragon with respect to Licensed Antibodies, Derivative Antibodies, or Products for the purposes of regulatory filings and safety reporting, including all nonclinical data, pre-approval and post-approval clinical use data, and regulatory data with respect thereto. Apogee or its designee shall be the party to file an application to each applicable Regulatory Authority in the Territory for, and to obtain and maintain, in its own name, the Regulatory Approval of the Products in each country in the Territory.

 

3.3            Diligence; Reporting. Apogee shall use Commercially Reasonable Efforts (i) to Develop and seek Regulatory Approval for at least one Product in the Field in the United States and at least one other Major Market Country and (ii) upon receipt of Regulatory Approval for a given Product in a given country, to commercialize such Product in such country, in each case ((i) or (ii)) either by itself or through its Affiliates or Sublicensees or its or their respective contractors. Additionally, on or before [***] of each year during the Term, Apogee shall deliver to Paragon a report summarizing its material development efforts with respect to any Licensed Antibodies, Derived Antibodies and Products, including preclinical and clinical activities, and achievement of any Milestones, during the preceding [***]. For the avoidance of doubt, if Apogee determines, in its sole discretion, that it is commercially unreasonable to pursue Commercialization of a Product in any country (other than the United States), it will not be considered a material breach of this Agreement to cease Development or Commercialization of such Product with respect to such country.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article IV

 

FINANCIAL TERMS.

 

4.1            Milestone Payments. Apogee shall make the following one-time payments to Paragon (each, a “Milestone Payment”), based on the achievement of the corresponding milestone (each, a “Milestone”) by Apogee, its Affiliates, or its Sublicensees with respect to the first Product, Licensed Antibody, or Derived Antibody to achieve such Milestone. Apogee shall, within [***] days after it or its Affiliates achieve such Milestone or within [***] days after it learns that its Sublicensee has achieved such Milestone, make the corresponding Milestone Payment to Paragon. Each Milestone Payment shall be paid no more than once, and Apogee’s total Milestone Payments hereunder shall not exceed Three Million Dollars ($3,000,000).

 

	Milestone	Milestone Payment
#1	Achievement of Development Candidate	One Million Dollars ($1,000,000)
#2	First dosing of a human patient in a Phase I Trial	Two Million Dollars ($2,000,000)

 

4.2            Royalties. During the applicable Royalty Term (which shall be measured on a country-by-country and Product-by-Product basis), Apogee shall pay royalties to Paragon equal to [***] percent ([***]%) of Net Sales of all Product sold by Apogee, its Affiliates or its Sublicensees (“Royalty Payments”). For clarity, any Net Sales of Product made in a given country after the expiration of the Royalty Term for such Product in such country will not be royalty-bearing.

 

4.3            Payment Reports. Within [***] days after the end of the [***] , Apogee shall provide to Paragon a written report, on a [***] basis, stating [***]; [***]; and [***]. [***].

 

4.4            Payment Method. All payments due under this Agreement to Paragon shall be made in US Dollars by bank wire transfer in funds to an account designated by Paragon from time to time reasonably in advance of any payment due date.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

4.5            Taxes. The Parties agree to cooperate with one another and use reasonable efforts to minimize obligations for any and all income or other taxes required by Applicable Law to be withheld or deducted from any Royalty Payments, Milestone Payments or other payments made by Apogee to Paragon under this Agreement, including by completing all procedural steps, and taking all reasonable measures, to ensure that any withholding tax is reduced or eliminated to the extent permitted under Applicable Law, including income tax treaty provisions and related procedures for claiming treaty relief. To the extent that Apogee is required to deduct and withhold taxes on any payment to Paragon, Apogee shall: (i) deduct such taxes from such payment to Paragon, (ii) pay the amounts of such taxes to the proper government authority in a timely manner, and (iii) promptly submit to Paragon an official tax certificate or other available evidence of such withholding sufficient to enable Paragon to claim such payment of taxes. For the avoidance of doubt, Apogee’s remittance of such withheld amounts to the appropriate governmental authority, together with payment to Paragon of the remaining amount owed, shall constitute full satisfaction of the applicable payment due to Paragon. Apogee shall provide Paragon with reasonable assistance in order to allow Paragon to recover, as permitted by Applicable Law, withholding taxes, value added taxes or similar obligations resulting from payments made hereunder or to obtain the benefit of any present or future treaty against double taxation which may apply to such payments. Paragon shall promptly provide Apogee with any requested tax forms that may be reasonably necessary in order for Apogee to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral tax income treaty.

 

4.6            Foreign Exchange. If any currency conversion shall be required in connection with the calculation of amounts payable hereunder, such conversion shall be made using the exchange rates reported on the [***] Business Day prior the payment due date for the purchase and sale of Dollars, as reported by the Wall Street Journal (East Coast Edition).

 

4.7            Late Payments. Any amount owed by Apogee to Paragon under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the per annum rate of [***] percentage point above the then-applicable United States prime rate as quoted in the Wall Street Journal (East Coast Edition) (or if it no longer exists, a similarly authoritative source), calculated on a [***] basis, or, if lower, the highest rate permitted under Applicable Law.

 

4.8            Blocked Currency. If by Applicable Law of a country in which Net Sales occurred, conversion of funds into Dollars or transfer of funds from such country to the United States is restricted, forbidden or delayed for more than [***] days, then Apogee can elect, at its sole discretion, that the amounts accrued in such country and owed by Apogee to Paragon under this Agreement shall be paid to Paragon in such country in local currency by deposit in a local bank designated by Paragon, unless the Parties otherwise agree in writing.

 

4.9            Records; Inspection.

 

(a)            Apogee shall, and shall cause its applicable Affiliates to, create and keep complete and accurate records of its sales and other dispositions of all Products, including all records that are reasonably necessary for the purposes of calculating all payments due under this Agreement.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            Upon reasonable advance written notice to Apogee, Paragon shall have the right to retain a nationally recognized (in the US) independent certified public accounting firm to perform on behalf of Paragon an audit, conducted in accordance with U.S. generally accepted accounting principles (GAAP), of such books and records of Apogee or its applicable Affiliates as may be reasonably necessary to verify the accuracy of any reports provided pursuant to Section 4.3 hereunder for any Calendar Quarter ending not more than [***] calendar months prior to the date of such request. Such audits shall not occur more frequently than [***] in each Calendar Year and shall not be conducted more than [***] with respect to any reporting period, in each case other than for cause. All information disclosed or observed during any audit pursuant to this Section 4.9 shall be the Confidential Information of Apogee, and Paragon shall cause the accounting firm to retain all such information as Confidential Information, including, if requested by Apogee, by requiring such accounting firm to enter into a customary confidentiality agreement with Apogee prior to the initiation of any such audit.

 

(c)            Upon completion of any audit hereunder, the accounting firm shall provide both Apogee and Paragon a written report disclosing whether the reports submitted by Apogee are correct or incorrect, whether the amounts paid are correct or incorrect, and in each case, the specific details concerning any discrepancies. No other information regarding Apogee’s records shall be provided to Paragon.

 

(d)            Paragon shall bear its internal expenses and the out-of-pocket costs for engaging such accounting firm in connection with performing such audits; provided, however, that if any such audit uncovers an underpayment by Apogee that exceeds [***] percent ([***]%) of the total owed for such payment or payment period, as applicable, then Apogee shall reimburse Paragon for the amounts actually paid to such accounting firm for performing such audit.

 

(e)            If such accounting firm concludes that Apogee has in aggregate underpaid amounts owed to Paragon during the audited period, Apogee shall pay Paragon the amount of the discrepancy within [***] days of the date Paragon delivers to Apogee such accounting firm’s written report and an invoice for such amounts. If such accounting firm concludes that Apogee has in aggregate overpaid amounts owed to Paragon during the audited period, then Apogee may, at its election, either credit such overpaid amount against any future payment obligation to Paragon or require Paragon to refund such amounts within [***] days.

 

Article V

 

Intellectual Property.

 

5.1            Ownership. Other than rights granted to Apogee under the Agreement with respect to the Licensed Antibody Technology, nothing in this Agreement shall affect Paragon’s rights in any Patents, Know-How, or other intellectual property owned or controlled by Paragon, now or in the future. Other than rights granted to Paragon under the Agreement with respect to the Apogee Intellectual Property, nothing in the Agreement shall affect Apogee’s rights in any Patents, Know-How, or other intellectual property owned or controlled by Apogee, now or in the future.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

5.2            Assignment of Licensed Antibody Patents.

 

(a)            Effective as of Apogee’s payment of the Milestone Payment #1, Paragon hereby assigns to Apogee all of its right, title, and interest in the Licensed Antibody Patents owned by Paragon, in each case to the extent arising from the Research Program. Within [***] of Paragon’s receipt of Milestone Payment #1, as requested by Apogee, Paragon will assist and take any actions necessary to assign and effectuate the assignment of the Licensed Antibody Patents owned by Paragon to Apogee.

 

5.3            Patent Prosecution.

 

(a)            Prosecution Generally. For the purpose of this Article V, (i) “prosecute” and “prosecution” shall include any patent interference, opposition, pre-issuance Third Party submission, ex parte re-examination, post-grant review, inter partes review or other similar proceeding, appeals or petitions to any board of appeals in a patent office, appeals to any court for any patent office decisions, reissue proceedings, and applications for patent term extensions and the like, and (ii) “Multispecific Patents” means those Patents owned or Controlled by a Party that claim the composition of matter of, or any method of specifically making or using, a Multispecific Antibody.

 

(b)            Prosecution by Apogee. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining (i) any Patents that it owns or controls (the “Apogee Patents”), and (ii) the Licensed Antibody Patents, in each case, at Apogee’s sole expense.

 

(i)            Consultation with Paragon. Apogee shall provide Paragon with copies of all material correspondence from and to any patent office relating to the Licensed Antibody Patents, and Apogee shall provide Paragon with drafts of all proposed filings to any patent office with respect to such Licensed Antibody Patents in reasonably adequate time before submission of such filings for Paragon’s review and comment. Apogee will take into consideration Paragon’s reasonable comments prior to submitting such filings. Additionally, Apogee will reasonably consider and coordinate with Paragon with respect to the filing of any Multispecific Patents that Apogee owns or otherwise Controls.

 

(ii)           Paragon’s Backup Right to Prosecute. Apogee shall notify Paragon of any decision not to prepare or file, or to abandon, cease prosecution or not maintain any Licensed Antibody Patent anywhere in the Territory. Apogee shall provide such notice at least [***] days prior to any filing or payment due date, or any other due date that requires action, in connection with such Licensed Antibody Patent. In such event, Paragon shall have a backup right, but not the obligation, to prepare, file, or continue prosecution or maintenance of, such Licensed Antibody Patent in Apogee’s name, at Paragon’s expense.

 

(iii)          Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Licensed Antibody Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(c)            Prosecution by Paragon. Except with respect to Licensed Antibody Patents, Paragon shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining any Patents (including Multispecific Patents) that it owns or otherwise Controls. Paragon’s prosecution of such Patents shall be at Paragon’s sole expense. Notwithstanding the foregoing, in prosecuting any Multispecific Patents, Paragon hereby agrees that during the Term, neither Paragon nor any of its Affiliates or licensees will file, or assist any Third Party in filing, any Patent claiming the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody, other than as part of a Multispecific Antibody.

 

(i)            Consultation with Apogee. During the ROFN Period, Paragon shall provide Apogee with copies of all material correspondence from and to any patent office relating to the Multispecific Patents, and Paragon shall provide Apogee with drafts of all proposed filings to any patent office with respect to such Multispecific Patents in reasonably adequate time before submission of such filings for Apogee’s review and comment. Paragon will take into consideration Apogee’s reasonable comments prior to submitting such filings.

 

(ii)           Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Multispecific Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

(d)            Patent Prosecution Costs Prior to Assignment. No later than [***] days after the Effective Date, Apogee shall reimburse Paragon for any actual costs and expenses incurred by Paragon that are related to the Prosecution of any Licensed Antibody Patents prior to the Effective Date. Such costs are approximately $[***], and Apogee will [***] reimburse Paragon for any future Prosecution costs and expenses incurred by Paragon prior to assignment of the Licensed Antibody Patents pursuant to Section 5.2.

 

(e)            CREATE Act. Notwithstanding anything to the contrary in this Agreement, each Party will have the right to invoke the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3) (the “CREATE Act”) when exercising its rights under Article V of this Agreement, without the prior written consent of the other Party. Where such Party intends to invoke the CREATE Act, it will notify the other Party and the other Party will cooperate and coordinate its activities with such Party with respect to any submissions, filings or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a joint research agreement (JRA) as defined in the CREATE Act.

 

5.4            Patent Enforcement and Defense.

 

(a)            Notice of Patent Infringement and Patent Challenge. Each Party shall give the other Party notice of any known or suspected infringement by a Third Party of any Licensed Antibody Patent (“Patent Infringement”) and any known or suspected challenge by a Third Party against the validity or enforceability of any Licensed Antibody Patent (“Patent Challenge”) within [***] days after such Patent Infringement or Patent Challenge comes to such Party’s attention.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            Apogee’s First Right to Enforce or Defend. Apogee shall have the first right, but not the obligation, to bring and control any legal action, including by declaratory judgment action, patent litigation or similar proceeding, in connection with any Patent Infringement or Patent Challenge with respect to the Licensed Antibody Patents in the Territory at its own expense and discretion as it reasonably determines appropriate. Apogee shall keep Paragon informed and reasonably consult with Paragon in the course of such legal action. Paragon shall have the right to be represented in any such legal action by counsel of its choice at its own expense.

 

(c)            Settlement. In connection with any such legal action or proceeding, Apogee shall not enter into any settlement admitting the invalidity or unenforceability of Licensed Antibody Patents without the prior written consent of Paragon (such consent not to be unreasonably conditioned, withheld, or delayed).

 

(d)            Paragon’s Backup Right to Enforce or Defend. If Apogee does not initiate a legal action for Patent Infringement or Patent Challenge within [***] days after a notice from Paragon under Section 5.4(a), then Paragon shall have a backup right, but not the obligation, to initiate such legal action at its own expense.

 

(e)            Allocation of Recoveries. Any recoveries resulting from such legal action initiated by Apogee or Paragon hereunder relating to Patent Infringement or Patent Challenge, including pursuant to a settlement, shall be applied as follows: (i) first to reimburse [***] of each of the Parties in such action; and (ii) second, any amounts remaining after paying the amounts due each Party under clause (i) (the “Remaining Recovery”) shall be allocated to [***] in an amount equal to [***], with the remaining portion of the Remaining Recovery being allocated to as follows: [***] percent ([***]%) to the Party initiating the action, and [***] percent ([***]%) to the other Party.

 

(f)            Apogee Patents. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, enforcement and defense of any Apogee Patents. Any recoveries resulting from any legal action with respect to the Apogee Patents shall be retained solely by Apogee.

 

(g)           Cooperation with Patent Enforcement. At the request of the enforcing Party (and at the requesting Party’s expense), the other Party shall reasonably cooperate and provide any information or assistance in connection with any legal action under this Section 5.4, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the legal action at its own expense.

 

5.5            Third Party Patent Proceedings.

 

(a)            Apogee’s First Right to Challenge Third Party Patents. Apogee shall have the sole and exclusive right, but not the obligation, to bring and control any legal action to challenge any Patents controlled by a Third Party, including by declaratory judgment action, patent interference, opposition, pre-issuance submission, ex parte re-examination, post-grant review, inter partes review, patent litigation or similar proceeding, in each case that are necessary or reasonably useful to make, use, offer for sale, sell, import, export, research, develop, manufacture or commercialize any Licensed Antibody, Derived Antibody or Product.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)           Cooperation by Paragon. At the request of Apogee, Paragon shall cooperate and provide any information or assistance in connection with any legal action under this Section 5.5, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the action at Apogee’s cost and expense.

 

5.6            Common Interest Agreement. At the request of either Party to conduct the activities under this Article V, the Parties shall cooperate in good faith to enter into a customary common-interest agreement intended to preserve attorney-client privilege with respect to disclosures and communications by or on behalf of either Party or its Affiliates in connection with such activities.

 

Article VI

 

PROTECTION OF CONFIDENTIAL INFORMATION

 

6.1            Confidentiality. Except to the extent expressly authorized by this Agreement, the Receiving Party agrees that, during the Term and for [***] years thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose other than as expressly provided for in this Agreement, any Confidential Information of the Disclosing Party. The Receiving Party may disclose Confidential Information of the Disclosing Party to those of the Receiving Party’s Representatives who have a need for such information, provided that the Receiving Party shall advise such Representatives of the confidential nature thereof, shall ensure that each such Representative is bound in writing by obligations of confidentiality and non-use at least as stringent as those contained in this Agreement, and shall be responsible for the compliance of its Representatives with the terms of this Agreement. The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its Representatives do not disclose or make any unauthorized use of the Confidential Information of the Disclosing Party. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the Disclosing Party.

 

6.2            Exceptions. The Receiving Party’s obligations under Section 6.1 shall not apply to any Confidential Information of the Disclosing Party that the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party in breach of this Agreement, generally known or available; (b) is known by the Receiving Party at the time of receiving such information from the Disclosing Party; (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party, without the aid, use or application of any Confidential Information of the Disclosing Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

6.3            Authorized Disclosure. Notwithstanding the provisions of this Article VI, the Receiving Party may disclose Confidential Information, without violating its obligations under this Agreement, to the extent the disclosure is:

 

(a)            required by a valid order of a court or other governmental body of competent jurisdiction or as otherwise required by Applicable Law, rule, regulation (including securities laws and regulations), government requirement, or as may be required in connection with any filings made with, or by the disclosure policies of, a stock exchange, provided that the Receiving Party shall give reasonable prior written notice to the Disclosing Party of such required disclosure and, at [***] request and expense, shall cooperate with the Disclosing Party’s efforts to contest such requirement, to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued or the law, rule or regulation required, or to obtain other confidential treatment of such Confidential Information; or

 

(b)            reasonably necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, in each case, in accordance with this Agreement; or

 

(c)            under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but of shorter duration if customary in the case of subclause (ii)) (i) 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, or (ii) to actual or bona fide potential Sublicensees, acquirers, merger partners, assignees, collaborators, investment bankers, investors or lenders.

 

6.4            Use of Names. Neither Party shall use the other Party’s name or trademarks in any advertising, sales, or promotional material or in any publication without the prior written consent of the other Party.

 

6.5            Confidentiality of this Agreement. This Agreement and its terms are considered Confidential Information of both Parties, and each Party shall keep confidential and shall not publish or otherwise disclose the terms of this Agreement without the prior written consent of the other Party, except as expressly permitted by Section 6.3, and except that both Parties may disclose this Agreement and its terms to its legal, financial and investment banking advisors; bona fide potential and actual investors, acquirers, merger partners, assignees, collaborators, investment bankers, lenders, licensees, sublicensees, or strategic partners in connection with license or partnering transactions, due diligence or similar investigations by such Third Parties or in confidential financing documents; and counsel or other advisors for the foregoing; provided, in each case, that any such Third Party agrees to be bound by obligations of confidentiality and non-use at least as restrictive as those set forth in this Article VI (provided that the confidentiality term applicable to such Third Party may be shorter so long as it is commercially reasonable).

 

6.6            Publicity. Neither Party will generate or allow any publicity regarding this Agreement or the transaction contemplated hereunder without the other Party first approving such press release or publication in writing, except for any public disclosure by or on behalf of a Party that is, in the opinion of such Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of such Party are listed (or to which an application for listing has been submitted) and except that a Party may, once a press release or other public written statement is approved in writing by both Parties, make subsequent public disclosure of the information contained in such press release or other public written statement without the further approval of the other Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

6.7            Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party will return to the other Party or destroy, as such other Party will direct, all tangible manifestations of such other Party’s Confidential Information at that time in the possession of the receiving Party, subject to the receiving Party’s right to maintain one copy of such tangible manifestations of such other Party’s Confidential Information solely for purposes of monitoring its compliance with this Agreement.

 

Article VII

 

REPRESENTATIONS AND WARRANTIES.

 

7.1            Mutual Representations. Each Party represents and warrants to the other Party that: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not and will not conflict with any agreement, instrument, or understanding, oral or written, to which it is or may become a party or by which it may be or become bound.

 

7.2            Representations of Paragon. Paragon hereby represents, warrants and covenants to Apogee as of the Effective Date that:

 

(a)            Paragon has set forth, in Exhibit A, a complete and accurate list of all the Licensed Antibody Patents it owns or Controls as of the Effective Date (including title, all inventors, owners, assignees, filing date, grant date, expiration date, and status);

 

(b)            Paragon has properly filed, prosecuted and maintained such Licensed Antibody Patents;

 

(c)            Paragon has complied with all duties of disclosure and has not engaged in any inequitable conduct with respect to all such Licensed Antibody Patents;

 

(d)           all Licensed Antibody Patents listed in Exhibit A that have been issued as of the Effective Date are in full force and effect and are, to Paragon’s knowledge, valid and enforceable;

 

(e)            other than the Patents listed in Exhibit A, as of the Effective Date neither Paragon nor any of its Affiliates own or have any rights in, to or under any Patents Covering any Licensed Antibody or Derivative Antibody, or their composition, or any method of specifically manufacturing such Antibody;

 

(f)            There are no judgments against or awards or settlements against Paragon or any of its Affiliates, and there are no claims, actions, or proceedings pending or, to Paragon’s knowledge, threatened, nor to Paragon’s knowledge are there any formal inquiries initiated or written notices received that are reasonably likely to lead to the institution of any such legal proceedings, in each case (i) relating to any Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology or alleging that any Third Party has any right to or under any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology that would conflict with the rights granted in this Agreement; or (ii) alleging that any Licensed Antibody Patent is unpatentable, invalid, unenforceable, or not infringed;

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(g)            All of Paragon’s and its Affiliates’ employees, officers, subcontractors and consultants: (i) have assigned, or are under contractual obligations to assign, to Paragon all inventions conceived, reduced to practice or otherwise related to Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology; (ii) to Paragon’s knowledge, have no obligations under agreements or Applicable Law to assign any interest in any such inventions to any Third Party; and (iii) have existing obligations under agreements or Applicable Law to maintain as confidential Paragon’s Confidential Information as well as confidential information of other parties (including of Apogee and its Affiliates);

 

(h)            none of Paragon, its Representatives, or any other person used by Paragon in the performance of the Agreement has been or is (i) debarred, convicted, or is subject to a pending debarment or conviction, pursuant to section 306 of the United States Food Drug and Cosmetic Act, 21 U.S.C. § 335a, (ii) listed by any government or regulatory agencies as ineligible to participate in any government healthcare programs or government procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)), or excluded, debarred, suspended or otherwise made ineligible to participate in any such program, or (iii) convicted of a criminal offense related to the provision of healthcare items or services, or is subject to any such pending action. Paragon agrees to inform Apogee in writing promptly if Paragon or any person who is performing activities on its behalf under the Agreement is subject to the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending or threatened;

 

(i)             No funding, facilities, or personnel of any governmental authority or any public or private educational or research institutions were used to develop or create any Licensed Antibody Technology, and neither Paragon nor any of its Affiliates has entered into a government funding relationship that would result in rights to any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology residing in the U.S. Government, the National Institutes of Health, or other agency, and the licenses granted hereunder are not subject to overriding obligations to the U.S. Government as set forth in Public Law 96-517 (35 U.S.C. §§ 200-204), or any similar obligations under the laws of any other country in the Territory; and

 

(j)             Subject to Article V, and Section 10.6, during the Term Paragon will not grant a Third Party any license or other right in the Licensed Antibody Technology that would conflict with the rights and licenses granted to Apogee hereunder with respect to such Licensed Antibody Technology.

 

7.3            DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, DURABILITY, MERCHANTABLE QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article VIII

 

TERM; TERMINATION.

 

8.1            Term. The term of this Agreement shall commence on the Effective Date and shall expire on a country-by-country and Product-by-Product basis on the expiration of the Royalty Term for such Product in such country, in each case, unless earlier terminated by a Party as set forth below in this Article VIII (the “Term”). Upon expiration (but not termination) of the Agreement, the license granted in Section 2.1 shall survive and become royalty-free, fully paid-up, perpetual and irrevocable with respect to the applicable Product in the applicable country.

 

8.2            Termination by Apogee. Apogee shall have the right to terminate this Agreement in its entirety or on country-by-country or Product-by-Product basis for any or no reason upon sixty (60) days’ prior written notice to Paragon.

 

8.3            Material Breach. Either Party may terminate this Agreement in its entirety for the material breach of this Agreement by the other Party, if such material breach remains uncured ninety (90) days (or thirty (30) days with respect to any failure to make any payments owing to a Party hereunder) following notice from the non-breaching Party to the breaching Party specifying such breach, provided that, in the event of a dispute regarding the existence or cure of a material breach, no termination shall become effective until such dispute is finally resolved pursuant to Section 10.7 in favor of the non-breaching Party and the breaching Party fails to cure such material breach within ninety (90) days thereafter.

 

8.4            Insolvency. Each Party will have the right to terminate this Agreement in the event of a Bankruptcy Event with respect to the other Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the United States Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof (the “Bankruptcy Code”), where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within [***] days after they are instituted, (b) the insolvency or making of an assignment for the benefit of creditors or the admittance by a Party of any involuntary debts as they mature, (c) the institution of any reorganization, arrangement or other readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment of a receiver for all or substantially all of a Party’s assets, or (e) any corporate action taken by the board of directors of a Party in furtherance of any of the foregoing actions.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

8.5            Effect of Termination of this Agreement. If this Agreement terminates for any reason (excluding expiration under Section 8.1), whether with respect to a particular Product, particular country, or in its entirety, then the following shall apply:

 

(a)            All licenses granted pursuant to Section 2.1 with respect to the terminated Product(s) and terminated country(ies) shall terminate, except as required for Apogee, its Affiliates, and/or its Sublicensees to continue to complete or wind down any ongoing clinical trials for any Product, as may be required by Applicable Law or ethical principles.

 

(b)            No later than [***] days after the effective date of such termination, each Party shall return or cause to be returned to the other Party, or destroy, all Confidential Information received from the other Party and all copies thereof related to the terminated Product(s) in the terminated country(ies); provided, however, that each Party may retain any Confidential Information reasonably necessary for such Party’s ongoing obligations and rights under this Agreement which do not terminate, and each Party may keep one (1) copy of Confidential Information received from the other Party in its confidential files for record purposes and such copy shall remain subject to Article VI of this Agreement.

 

(c)            If this Agreement is terminated in its entirety, then, upon [***] , (which must be provided to [***] within [***] days after the effective date of termination), (i) Apogee shall assign to Paragon all right, title, and interest in the Licensed Antibody Patents previously assigned to Apogee pursuant to Section 5.2, and (ii) Paragon and Apogee shall [***] discuss in good faith, for a period of up to [***] days following such written request, terms and conditions under which Apogee may be willing to grant to Paragon a [***], [***] license under the Apogee Intellectual Property to make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products in the Field in the Territory that were the subject of any research, Development or Commercialization by Apogee or its Affiliates prior to such termination, (“Reversion Products”), as well as the potential transfer of materials, ongoing clinical trials, and applicable regulatory filings and relevant data generated by Apogee with respect to the Reversion Products and necessary for the development and commercialization of such Reversion Product, such agreement to include commercially reasonable financial and other terms, which terms shall take into consideration Apogee’s contributions made in the Development, Commercialization and other exploitation of the Reversion Products.

 

8.6            Survival of Sublicenses. Upon termination of this Agreement, at the written request of any Sublicensee who is not then in breach of its sublicense agreement, such sublicense agreement will survive such termination of this Agreement, and Paragon will negotiate in good faith the terms and conditions of a direct license with such Sublicensee that is consistent with the terms of this Agreement (as adjusted for the scope of license, products, field of use, and other provisions of the original sublicense).

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

8.7            Accrued Rights; Survival. The expiration or termination of this Agreement for any reason shall not release either Party from any liability or obligation that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement. In the event of expiration or any termination of this Agreement, the following provisions of this Agreement shall survive such expiration or termination in accordance with their respective terms and conditions: Article I (Definitions); Section 2.2 (Sublicenses) (with respect to any payments or other performance obligations prior to conversion (if any) to a direct license pursuant to Section 8.6; Section 2.3 (No Implied Licenses; Reservation of Rights); Section 4.1 (Milestone Payments) (with respect to any outstanding payment obligations incurred prior to the date of termination or expiration); Section 4.2 (Royalties) (with respect to any outstanding payments accrued prior to the effective date of termination); Section 4.3 (Payment Reports) (with respect to the last Calendar Quarter of the Term to the extent not already reported and any outstanding payment obligation with respect to any royalty payments accrued prior to the date of termination or expiration); Section 4.4 (Payment Method) to 4.8 (Blocked Currency) (for the duration of any outstanding payment obligations under this Agreement); Section 4.9 (Records; Inspection) (for the duration set forth therein); Section 5.1 (Ownership); Section 7.3 (Disclaimer of Warranties); Article VI (Protection of Confidential Information) (for the duration set forth therein); Section 8.5 (Effect of Termination of this Agreement); Section 8.6 (Survival of Sublicenses); Section 8.7 (Accrued Rights; Survival); Article IX (Indemnification); and Article X (Miscellaneous).

 

Article IX

 

INDEMNIFICATION

 

9.1            By Apogee. Apogee hereby agrees to defend, indemnify, and hold harmless Paragon, its Affiliates and its or their Representatives (each, an “Paragon Indemnitee”) from and against any and all losses, damages, liabilities, expenses, and costs, including reasonable legal expense and attorneys’ fees (collectively, “Losses”), to which any Paragon Indemnitee may become subject as a result of any claim, demand, action, or other proceeding by any Third Party (“Third Party Claim”) to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Apogee Indemnitee in the performance of this Agreement; (b) Apogee’s breach of any of its representations, warranties or covenants under this Agreement; or (c) Apogee’s research, testing, development, manufacture, use, sale, distribution, licensing and/or commercialization of Licensed Antibodies, Derived Antibodies and/or Products (but, for clarity, excluding any activities conducted by Paragon under this Agreement or the Option Agreement), in each case ((a) to (c)), except in each case to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Paragon Indemnitee.

 

9.2            By Paragon. Paragon hereby agrees to defend, indemnify, and hold harmless Apogee, its Affiliates, and its or their Representatives (each, a “Apogee Indemnitee”) from and against any and all Losses to which any Apogee Indemnitee may become subject as a result of any Third Party Claim to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Paragon Indemnitee in the performance of this Agreement; or (b) Paragon’s breach of any of its representations, warranties or covenants under this Agreement; in each case ((a) to (c)), except to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Apogee Indemnitee.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

9.3            Indemnification Procedures. The Party claiming indemnity under this Article IX (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 9.1 or Section 9.2, as applicable, will be reduced to the extent the Indemnified Party’s delay in providing notification pursuant to the previous sentence results in material 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 9.3 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, provided that (a) it agrees to indemnify the Indemnified Party from and against all Losses the Indemnified Party may suffer arising out of the Claim; (b) the Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Party; and (c) the Indemnifying Party conducts the defense of the Claim diligently. 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, unless the settlement involves only the payment of money. The Indemnified Party will not settle any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (i) 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 (ii) the Indemnified Party reserves any right it may have under this Article IX to obtain indemnification from the Indemnifying Party.

 

9.4            Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE VI OR FOR INDEMNIFICATION CLAIMS UNDER THIS ARTICLE IX, IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE OTHER PARTY HAD NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

Article X

 

MISCELLANEOUS.

 

10.1          Independent Contractor Relationship. Paragon’s relationship with Apogee is that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Neither Party is an agent of the other Party or authorized to make any representation, contract, or commitment on behalf of the other Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.2          Force Majeure. Neither Party will be charged with any liability for delay or failure in performance of an obligation under this Agreement (other than any obligation to pay monies when due) to the extent such delay or failure is due to a cause beyond the reasonable control of the affected Party, such as war, riots, labor disturbances, epidemic, pandemic, fire, explosion, and compliance in good faith with any Applicable Law (in each case, a “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 to the extent such effects otherwise qualify as a Force Majeure event, even though the pandemic is ongoing and those effects may be foreseeable. In addition, a Force Majeure event may include reasonable measures affirmatively taken by a Party or its Affiliates to respond to the COVID-19 pandemic or any other pandemic (or other Force Majeure event), such as requiring employees to stay home, closures of facilities, delays of clinical trials, or cessation of activities in response to the pandemic. The Party affected by a Force Majeure will give prompt written notice to the other Party of the nature of the cause of any material delay or failure to perform, its anticipated duration and any action being taken to avoid or minimize the effect. The Party affected will use its diligent efforts to avoid or remove such causes of delay or failure to perform and to mitigate the effect of such occurrence, and will continue performance in accordance with the terms of this Agreement whenever such causes are removed. The Party affected will give prompt written notice to the other Party of such resumed performance. If any such failure or delay in a Party’s performance hereunder continues for more than [***] days, the other Party may terminate this Agreement upon written notice to the affected Party.

 

10.3          Entire Agreement; Amendment. This Agreement, together with all Exhibits attached hereto, constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, relating to its subject matter. This Agreement (including its Exhibits) may not be changed, modified, amended, or supplemented except by a written instrument signed by both Parties.

 

10.4          Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

 

10.5          Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable Law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

 

10.6          Assignment. Neither this Agreement nor any rights or obligations hereunder may be assigned by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent to its successor to all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement shall be void.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.7          Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may arise from time to time during the Term relating to either Party’s rights or obligations hereunder or otherwise relating to the validity, enforceability or performance of this Agreement, including disputes relating to alleged breach or termination of this Agreement but excluding any disputes relating to Article VI or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights (hereinafter, a “Dispute”). In the event of the occurrence of any Dispute, the Parties will follow the following procedures in an attempt to resolve the dispute or disagreement:

 

(a)            The Party claiming that such a Dispute exists will give notice in writing (a “Notice of Dispute”) to the other Party of the nature of the Dispute.

 

(b)            The Dispute will be referred to the then Chief Executive Officer of Paragon and the then Chief Executive Officer of Apogee who will meet no later than [***] days following the initial receipt of the Notice of Dispute and use reasonable endeavors to resolve the Dispute.

 

(c)            If, within [***] days of initial receipt of the Notice of Dispute, the Dispute has not been resolved, or if, for any reason, the meeting described in Section 10.7(b) hereof has not been held within [***] days of initial receipt of the Notice of Dispute, then the Parties agree that such Dispute will be finally resolved through binding arbitration to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules, as specifically modified by the provisions of this Section 10.7(c). The arbitration will be conducted by a panel of three arbitrators. Within [***] days after the initiation of the arbitration, each Party will nominate one person to act as arbitrator, and the two arbitrators so named will then jointly appoint the third arbitrator within [***] days of their appointment, who will serve as chairman of the panel. All three arbitrators must be independent Third Parties having at least [***] years of dispute resolution experience (which may include judicial experience) or legal or business experience in the biotech or pharmaceutical industry. If either Party fails to nominate its arbitrator, or if the arbitrators selected by the Parties cannot agree on a person to be named as chairman within such [***]-day period, JAMS will make the necessary appointments for such arbitrator(s) or the chairman. Once appointed by a Party, such Party will have no ex parte communication with its appointed arbitrator. The place of arbitration will be in Boston, Massachusetts or such other venue as the Parties may mutually agree. The arbitration proceedings and all communications with respect thereto will be in English. Any written evidence originally in another language will be submitted in English translation accompanied by the original or a true copy thereof. The arbitrators have the power to decide all matters in Dispute, including any questions of whether or not such matters are subject to arbitration hereunder. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrators may be entered in any court having competent jurisdiction thereof. The existence, content and results of any arbitration proceedings pursuant to this Section 10.7 will be deemed the Confidential Information of both Parties.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(d)            Notwithstanding any provision of this Agreement to the contrary, either Party may immediately initiate litigation in any court of competent jurisdiction seeking any remedy at law or in equity, including the issuance of a preliminary, temporary or permanent injunction, to preserve or enforce its rights under this Agreement.

 

(e)            The Parties agree that any disputes relating to Article VI or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights shall be subject to the exclusive jurisdiction of the state and federal courts in Boston, Massachusetts and each Party hereby submits to such jurisdiction.

 

10.8            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

10.9            Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by internationally recognized express courier, by email, or by facsimile, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if delivered by express courier, the next Business Day the express courier regularly makes deliveries; or (c) if delivered by email, upon the date upon which the receipt of such email is confirmed by return email. Together with any notice provided by a Party to the other Party in accordance with this Section 10.9, the Party shall send a copy of such notice by email to the other Party.

 

If to Paragon:	Paragon Therapeutics, Inc.
	221 Crescent Street
	Building 17, Suite 102B
	Waltham, MA 02453
	Attn: President
If to Apogee:	Apogee Biologics, Inc.
	2001 Market St.
	Suite 2500
	Philadelphia, PA 19103
	Attn: President

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.10        Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall 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 shall 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 shall be construed to include such person’s or entity’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Exhibits shall be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall 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 shall 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, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “or.” The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement or have any effect on its interpretation or construction. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language, and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language. To the extent there is any inconsistency or conflict between the terms and conditions of this Agreement and any exhibit, the terms and conditions of this Agreement will prevail.

 

10.11        No Third-Party Rights. The provisions of this Agreement are for the exclusive benefit of the Parties and their successors and permitted assigns, and no other person shall have any right or claim against any Party by reason of these provisions or be entitled to enforce any of these provisions against any Party.

 

10.12        Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

10.13        Expenses. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.

 

10.14        Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.15        Construction. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

 

10.16        Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

 

10.17        Performance by Affiliates. A Party may perform some or all of its obligations under this Agreement through Affiliate(s) or may exercise some or all of its rights under this Agreement through Affiliates. However, each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance as if such Party were performing such obligations itself, and references to a Party in this Agreement shall be deemed to also reference such Affiliate. In particular and without limitation, all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in Article VI, and shall be subject to the intellectual property assignment and other intellectual property provisions of Article V as if they were the original Party to this Agreement (and be deemed included in the actual Party to this Agreement for purposes of all intellectual property-related definitions). A Party and its Affiliates shall be jointly and severally liable for their performance under this Agreement.

 

[Remainder of Page Left Intentionally Blank; Signature Page Follows]

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

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

 

Paragon Therapeutics, Inc.			Apogee Biologics, Inc.
By:	/s/ Evan Thompson		By:	/s/ Michael Henderson
Name:	Evan Thompson		Name:	Michael Henderson
Title:	COO		Title:	CEO
Date:	4/3/2023		Date:	4/3/2023

[Signature Page to License Agreement]

 

 

 

Exhibit 10.10

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

LICENSE AGREEMENT

 

This License Agreement (“Agreement”) is entered into and effective as of April 28, 2023 (the “Effective Date”), by and between Paragon Therapeutics, Inc., a company organized under the laws of the State of Delaware (“Paragon”), having its principal place of business at 221 Crescent Street, Building 17, Suite 102B, Waltham, MA 02453, and Apogee Biologics, Inc. (“Apogee”), a company organized under the laws of the State of Delaware, having its principal place of business at 2001 Market St., Suite 2500, Philadelphia, PA 19103. Paragon and Apogee are also referred to herein individually as a “Party”, or collectively as the “Parties.”

 

Recitals

 

Whereas, Paragon has developed a proprietary platform technology for the discovery and development of antibodies against therapeutically relevant targets;

 

Whereas, pursuant to that certain Antibody Discovery and Option Agreement, dated as of February 24, 2022, and amended by Amendment to Antibody Discovery and Option Agreement, dated as of November 10, 2022 (the “Option Agreement”), Apogee has engaged Paragon to identify, evaluate and develop one or more antibody candidates directed to certain therapeutic targets and has been granted an exclusive option to enter into one or more separate license agreements to develop, manufacture and commercialize the resulting antibodies with respect to a given target;

 

Whereas, Apogee has exercised such option with respect to the Licensed Target (as defined below), and the Parties desire to memorialize the exclusive license from Paragon to Apogee with respect to such Licensed Target, all on the terms and subject to the conditions set forth in this Agreement.

 

Now Therefore, in consideration of the foregoing premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

Article I

 

DEFINITIONS

 

The following initially capitalized terms have the following meanings (and derivative forms of them shall be interpreted accordingly):

 

1.1            “Affiliate” shall mean any entity controlled by, controlling, or under common control with a Party hereto. For the purpose of this definition, “control” (including, with correlative meaning, the terms “controlled by” or “under common control”) means the direct or indirect ownership of more than fifty percent (50%) of the voting interest in, or more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of, such corporation or other business entity. Notwithstanding the foregoing, with respect to either Party, Affiliates of such Party do not include [***].

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.2            “Agreement” has the meaning set forth in the preamble.

 

1.3            “[***]” shall mean [***].

 

1.4            “[***] IP” means the [***] Licensed Patents and the [***] Licensed Know-How.

 

1.5            “[***] License Agreement” means that certain License Agreement between Paragon and [***], as such agreement may be amended or restated from time to time. A copy of the [***] License Agreement is attached hereto as Exhibit B, which shall be updated from time to time in the event of any amendment to or restatement of the [***] License Agreement becoming effective after the Effective Date.

 

1.6            “[***] Licensed Know-How” means the Know-How (as defined in the [***] License Agreement) that (a) is licensed by [***] to Paragon under Section 2.1(a)(ii) of the [***] License Agreement, and (b) is reasonably necessary for the Development and/or Commercialization of the Products in the Field in the Territory.

 

1.7            “[***] Licensed Patents” means the Patent Rights (as defined in the [***] License Agreement) that are (a) licensed by [***] to Paragon under Section 2.1(a)(ii) of the [***] License Agreement, and (b) reasonably necessary for the Development and/or Commercialization of the Products in the Field in the Territory.

 

1.8            “Antibody” shall mean any molecule, including full [***].

 

1.9            “Apogee” has the meaning set forth in the preamble.

 

1.10          “Apogee Indemnitee” has the meaning set forth in Section 10.2.

 

1.11          “Apogee Intellectual Property” means any Patents, Know-How or Intellectual Property Right that is (a) necessary for, and actually used (or held for use) by Apogee or its Affiliates as of the effective date of termination of this Agreement in, the Development, Manufacturing, or Commercialization of Products and (b) Controlled by Apogee or its Affiliates as of the effective date of termination of this Agreement.

 

1.12          “Apogee Patents” has the meaning set forth in Section 6.3(b).

 

1.13          “Apogee Program” has the meaning set forth in Section 3.2(a).

 

1.14          “Apogee Prosecutable Patents” has the meaning set forth in Section 6.3(b).

 

1.15          “Applicable Law” means any national, supra-national, federal, state or local laws, rules, guidances and regulations, in each case, as applicable to the subject matter and the party at issue.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.16            “Bankruptcy Code” has the meaning set forth in Section 9.4.

 

1.17            “Bankruptcy Event” has the meaning set forth in Section 9.4.

 

1.18            “Business Day” shall mean any day other than Saturday, Sunday or other national holidays in the United States.

 

1.19            “Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.20            “Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

 

1.21            “Change of Control” means, with respect to any entity, any of the following: (a) the sale or disposition of all or substantially all of the assets of such entity or its direct or indirect controlling Affiliate to a Third Party; or (b) (i) the acquisition by a Third Party, alone or together with any of its Affiliates, other than an employee benefit plan (or related trust) sponsored or maintained by such entity or any of its Affiliates, of more than fifty percent (50%) of the then-outstanding shares of voting capital stock of such entity or its direct or indirect parent entity that holds, directly or indirectly, beneficial ownership of more than fifty percent (50%) of the then-outstanding shares of voting capital stock of such entity (a “Parent Entity”), or (ii) the acquisition, merger or consolidation of such entity or its Parent Entity with or into another entity, other than, in the case of clause (i) or (ii), an acquisition or a merger or consolidation of such entity or its Parent Entity in which the holders of shares of voting capital stock of such entity or its Parent Entity, as the case may be, immediately prior to such acquisition, merger or consolidation will beneficially own, directly or indirectly, at least fifty percent (50%) of the shares of voting capital stock of the acquiring Third Party or the surviving corporation in such acquisition, merger or consolidation, as the case may be, immediately after such acquisition, merger or consolidation, and in each case of (a) or (b), whether through a single transaction or a series of related transactions, but excluding any and all bona fide financing transactions or internal reorganizations for tax purposes (including the change of place of incorporation or domicile of such entity).

 

1.22            “Claim” has the meaning set forth in Section 10.3.

 

1.23            “Commercialize” or “Commercializing” shall mean to market, promote, distribute, offer for sale, sell, have sold, import, have imported, export, have exported or otherwise commercialize an Antibody, including any Licensed Antibody or Derived Antibody, or Product, as applicable. When used as a noun, “Commercialization” means any and all activities involved in Commercializing.

 

1.24            “Commercially Reasonable Efforts” means the level of efforts, expertise, and resources commonly applied by such Party to carry out a particular task or obligation, consistent with the general practice followed by such Party relating to other pharmaceutical compounds, products or therapies owned by it, or to which it has exclusive rights, which are of similar market potential at a similar stage in their development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of other products in development and in the marketplace, supply chain management considerations, the proprietary position of the compound, product or therapy (including with respect to patent or regulatory exclusivity), the regulatory structure involved, the profitability of the applicable compound, product or therapy (including pricing and reimbursement status achieved), and other relevant technical, legal, scientific or medical factors. For clarity, the “Commercially Reasonable Efforts” of a Party under this Agreement will be determined on a product-by-product and country-by-country basis within the Territory, and it is anticipated that the level of effort for different indications and countries may differ and may change over time, reflecting changes in the status of the compound, product or therapy and the indications and the country or countries involved.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.25            “Confidential Information” of a Party shall mean any and all non-public scientific, business, regulatory or technical information that is disclosed or made available by or on behalf of one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement, whether in writing, orally, visually or otherwise. Notwithstanding any provision of this Agreement to the contrary, all Licensed Antibody Inventions and Licensed Antibody Technology shall be the Confidential Information of Apogee; provided that in the event of any termination of this Agreement (other than by Apogee for Paragon’s uncured material breach) and that Apogee assigns the Licensed Antibody Patents to Paragon in accordance with Section 9.6(c), then the Licensed Antibody Inventions and Licensed Antibody Technology shall thereafter be the Confidential Information of Paragon.

 

1.26            “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any technology (including Know-How) or Intellectual Property Rights, possession by a Party and the ability (whether by ownership, license or otherwise) to grant a license or a sublicense of or under such technology or Intellectual Property Rights without violating the terms of any agreement or other arrangement with any Third Party. Notwithstanding the foregoing, a Party and its Affiliates shall not be deemed to “Control” any technology or Intellectual Property Rights that (a) prior to the consummation of a Change of Control of such Party is owned or in-licensed, or (b) after the consummation of a Change of Control of such Party, becomes owned or in-licensed (to the extent such technology or Intellectual Property is developed outside of the scope of the activities conducted hereunder and without use of or reference to any technology or Intellectual Property rights such Party or any of Affiliate of such Party immediately before such Change of Control, or any Confidential Information of the other Party), in each case ((a) or (b)), by a Third Party that becomes an Affiliate of such Party after the Effective Date as a result of such Change of Control or an assignee of such Party after the Effective Date as the result of an assignment of this Agreement in connection with a Change of Control unless prior to the consummation of such Change of Control or assignment, such Party or any of its Affiliates also Controlled such technology or Intellectual Property Rights.

 

1.27            “Cover” or “Covering” means, with respect to a particular product, any Patent, that, in the absence of a license granted under, or ownership of, such Patent, the making, using, selling, importation, or exportation of such product would infringe a valid and unexpired claim of such Patent.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.28            “CREATE Act” has the meaning set forth in Section 6.3(f).

 

1.29            “Derived Antibody” shall mean any Antibody that is created by or on behalf of Apogee, its Affiliates or its or their licensees and: (a) is derived from or constitutes a modification of a Licensed Antibody, including [***], and (b) is [***]. For avoidance of doubt, any Antibody that [***] will be deemed a Derived Antibody, irrespective of origin. Notwithstanding the foregoing, a Derived Antibody shall not include (i) [***], or (ii) [***].

 

1.30            “Develop” or “Developing” shall mean to discover, evaluate, test, research or otherwise develop an Antibody, including a Licensed Antibody or Derived Antibody, or Product. When used as a noun, “Development” means any and all activities involved in Developing.

 

1.31            “Development Candidate” means a Licensed Antibody or Derived Antibody that has been nominated by Apogee’s Board of Directors as a “Development Candidate”.

 

1.32            “Directed To” means, with regard to an Antibody or Product, that such Antibody or Product is developed or designed to (a) [***], and (b) [***].

 

1.33            “Disclosing Party” has the meaning set forth in Section 1.25.

 

1.34            “Dispute” has the meaning set forth in Section 11.7.

 

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

 

1.36            “Effective Date” has the meaning set forth in the preamble.

 

1.37            “Field” shall mean the prophylaxis, palliation, treatment and diagnosis of human disease and disorders in all therapeutic areas.

 

1.38            “First Commercial Sale” means the first sale of a Product by Apogee, or one of its Affiliates or its or their Sublicensees, to an unaffiliated third party after receipt of all Regulatory Approvals required to market and sell the Product have been obtained in the country in which such Product is sold. Sales for purposes of testing the Product and sample purposes shall not be deemed a First Commercial Sale. Furthermore, for purposes of clarity, the term “First Commercial Sale” as used in this Agreement shall not include: (i) [***]; (ii) [***]; nor (iii) [***].

 

1.39            “Force Majeure” has the meaning set forth in Section 11.2.

 

1.40            “Indemnified Party” shall have the meaning provided in Section 10.3.

 

1.41            “Indemnifying Party” shall have the meaning provided in Section 10.3.

 

1.42            “Intellectual Property Rights” shall mean any and all proprietary rights provided under (a) patent law, including any Patents; (b) copyright law; or (c) any other applicable statutory provision or common law principle, including trade secret law, that may provide a right in Know-How, or the expression or use thereof.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.43            “Know-How” shall mean all technical information and know-how in any tangible or intangible form, including (a) inventions, discoveries, trade secrets, data, specifications, instructions, processes, formulae, materials (including cell lines, vectors, plasmids, nucleic acids and the like), methods, protocols, expertise and any other technology, including the applicability of any of the foregoing to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them or processes for their manufacture, formulations containing them or compositions incorporating or comprising them, and (b) all data, instructions, processes, formulae, strategies, and expertise, whether biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical, analytical, or otherwise and whether related to safety, quality control, manufacturing or other disciplines. Notwithstanding the foregoing, Know-How excludes Patent claims.

 

1.44            “Licensed Antibody Invention” shall mean (a) any invention or discovery, whether or not patentable, that constitutes the composition of matter of, or any method of specifically making or using, any Licensed Antibody or a Derived Antibody; and (b) all Intellectual Property Rights therein, that in each case is Controlled by Paragon or its Affiliates as of the Effective Date or during the Term.

 

1.45            “Licensed Antibody Patents” shall mean all Patents that Cover the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody.

 

1.46            “Licensed Antibody” shall mean any and all Antibodies that are Directed To the Licensed Target and that are discovered, generated, identified or characterized by Paragon in the course of performing the Research Program.

 

1.47            “Licensed Antibody Technology” shall mean (a) the Licensed Antibody Inventions; (b) the Licensed Antibody Patents; (c) the Sequence Information and Results; and (d) all Intellectual Property Rights therein.

 

1.48            “Licensed Target” means OX-40L.

 

1.49            “Losses” has the meaning provided in Section 10.1.

 

1.50            “MAA” means (a) a New Drug Application in the United States, as defined in the United States Federal Food, Drug and Cosmetics Act, and applicable regulations promulgated thereunder by the FDA; (b) a Biologics License Application in the United States, as defined in the United States Public Health Service Act; or (c) any application filed with any Regulatory Authority in a country other than the United States that is equivalent to either of the foregoing.

 

1.51            “Major Market Country” means any of the following: the [***], and the [***].

 

1.52            “Manufacture” or “Manufacturing” shall mean to make, produce, manufacture, process, fill, finish, package, label, perform quality assurance testing, release, ship or store an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof. When used as a noun, “Manufacture” or “Manufacturing” means any and all activities involved in Manufacturing an Antibody, including any a Licensed Antibody or Derived Antibody, or Product or any component thereof.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.53            “Milestone” has the meaning set forth in Section 5.2.

 

1.54            “Milestone Payment” has the meaning set forth in Section 5.2.

 

1.55            “Multispecific Antibody” shall mean any Antibody that is comprised of (a) [***], and (b) [***].

 

1.56            “Multispecific Patents” has the meaning set forth in Section 6.3(a).

 

1.57            “Net Sales” means the gross amounts received for Product by Apogee, its Affiliates and Sublicensees for sales or other commercial disposition of such Product in the Territory to unrelated Third Parties, less the following, in each case related specifically to the Product and actually incurred, paid or accrued by Apogee, its Affiliates or Sublicensees and not otherwise recovered by or reimbursed to Apogee, its Affiliates, or Sublicensees;

 

(a)             [***];

 

(b)             [***];

 

(c)             [***];

 

(d)             [***];

 

(e)             [***]; and

 

(f)              [***].

 

Net Sales will include [***]. Net Sales will be calculated only once for the first bona fide arm’s length sale of the Product by Apogee, its Affiliates or its Sublicensees to a Third Party, and will not include sales between or among [***]. Net Sales shall not include any amounts invoiced for [***] (i) [***], (ii) [***], or (iii) [***].

 

Net Sales shall be determined from the books and records of Apogee, Affiliates of Apogee or any Sublicensee maintained in accordance with generally accepted accounting principles consistently applied. Apogee further agrees in determining Net Sales, it (or its applicable Affiliate or Sublicensee) will use Apogee’s (or such Affiliate’s or Sublicensee’s) then current standard procedures and methodology.

 

If a Product is sold as a Combination Product (as defined below), the Net Sales of such Combination Product for the purpose of calculating royalties and sales-based milestones owed under this Agreement for sales of such Combination Product, shall be determined as follows: [***]. If any Other Component in the Combination Product is not sold separately, Net Sales shall be calculated by [***]. If both the Licensed Component and any of the Other Components are not sold separately, the adjustment to Net Sales shall be determined by the Parties [***] to reasonably reflect the [***] of the contribution of such Licensed Component in the Combination Product to the [***] of such Combination Product.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

For purposes of this definition, “Combination Product” means any pharmaceutical product that contains two (2) or more active ingredients, including both (A) a Licensed Antibody or Derivative Antibody (the “Licensed Component”); and (B) one (1) or more active pharmaceutical or biological ingredients that are not a Licensed Antibody or Derivative Antibody (“Other Component(s)”), either as a [***], [***], or [***], and [***].

 

1.58            “Notice of Dispute” has the meaning set forth in Section 11.7(a).

 

1.59            “Option Agreement” has the meaning set forth in the recitals.

 

1.60            “Paragon” has the meaning set forth in the preamble.

 

1.61            “Paragon Indemnitee” shall have the meaning provided in Section 10.1.

 

1.62            “Paragon Know-How” means all Know-How in the Licensed Antibody Technology.

 

1.63            “Party(ies)” means has the meaning set forth in the Preamble.

 

1.64            “Patent Challenge” means has the meaning set forth in Section 6.4(a).

 

1.65            “Patent Infringement” means has the meaning set forth in Section 6.4(a).

 

1.66            “Patents” shall mean (a) unexpired patents and patent applications, (b) any and all divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates and the like of any such patents and patent applications, and (c) any and all foreign equivalents of the foregoing.

 

1.67            “Phase I Trial” means a human clinical trial in any country of the type described in 21 C.F.R. §312.21(a), or the foreign equivalent thereof, regardless of where such clinical trial is conducted.

 

1.68            “Product” shall mean any product that comprises or contains any Licensed Antibody or Derived Antibody (whether alone or as part of a Multispecific Antibody).

 

1.69            “Prosecute” or “Prosecution” has the meaning set forth in Section 6.3(a).

 

1.70            “Receiving Party” has the meaning set forth in Section 1.25.

 

1.71            “Regulatory Approval” means all clearances, approvals (including approval of an MAA as well as any applicable pricing and/or reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell and market a pharmaceutical product in a country or territory under this Agreement.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.72            “Regulatory Authority” means any supranational, multinational, federal, national, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the clinical development, manufacture, marketing or sale of a Product in a country or region, including the FDA in the United States and the EMA in Europe.

 

1.73            “Remaining Recovery” has the meaning set forth in Section 6.4(e).

 

1.74            “Representatives” of a Party shall mean such Party’s officers, directors, employees, contractors, subcontractors, agents and consultants.

 

1.75            “Research Program” means the research program conducted by the Parties pursuant to the Option Agreement with respect to the Licensed Target.

 

1.76            “Results” means the data, results, analysis, conclusions, outcomes, information, documentation and reports (in each case, excluding Licensed Antibody Inventions, Licensed Antibody Patents, and the Sequence Information) that are generated by or on behalf of Paragon in performance of the Research Program, excluding Licensed Antibodies.

 

1.77            “Reversion Products” has the meaning set forth in Section 9.6(c).

 

1.78            “ROFN Negotiation Period” has the meaning set forth in Section 2.5(b).

 

1.79            “ROFN Period” has the meaning set forth in Section 2.5(b).

 

1.80            “Royalty Payments” has the meaning set forth in Section 5.3.

 

1.81            “Royalty Term” means, on a Product-by-Product and country-by-country basis, the period commencing on First Commercial Sale of the applicable Product in the applicable country in the Territory and ending, with respect to the particular Product and country at issue on the latest of the following dates: (a) the twelfth (12th) anniversary of the date of first commercial sale of such Product in such country; or (b) the expiration of the last-to-expire Valid Claim of a Licensed Antibody Patent owned or controlled by Paragon or Apogee (or a Patent Controlled by Paragon and licensed to Apogee pursuant to Section 2.1(b)) Covering the Manufacture, use or sale of such Product in the country at issue.

 

1.82            “Sequence Information” means electronic files of Paragon containing all Project Antibody sequences generated under the Research Program.

 

1.83            “Sublicensee” means any Third Party with respect to Apogee, to whom Apogee grants a sublicense of, or other authorization or permission granted under, the rights granted to Apogee in Section 2.1.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.84            “Target” means a protein molecule that (a) is chemically distinct from other molecules, and (b) wherein a binding entity derives recognized therapeutic value from binding to such molecule.

 

1.85            “Term” has the meaning set forth in Section 9.1.

 

1.86            “Territory” shall mean worldwide.

 

1.87            “Third Party Claim” shall have the meaning provided in Section 10.1.

 

1.88            “Third Party” shall mean any person or entity other than Paragon or Apogee or an Affiliate of either Paragon or Apogee.

 

1.89            “US” or “United States” means the United States of America and its possessions and territories, including Puerto Rico.

 

1.90            “Valid Claim” means, with respect to a particular country, a claim (including a process, use, or composition of matter claim) of an issued and unexpired patent (or a supplementary protection certificate thereof) that has not (a) irretrievably lapsed or been abandoned, permanently revoked, dedicated to the public or disclaimed, or (b) been held invalid, unenforceable or not patentable by a court, governmental agency, national or regional patent office or other appropriate body that has competent jurisdiction, which holding, finding or decision is final and unappealable or unappealed within the time allowed for appeal.

 

Article II

 

LICENSES; TECHNOLOGY TRANSFER; MULTISPECIFIC ANTIBODIES

 

2.1            License Grant from Paragon.

 

(a)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee, a worldwide, royalty-bearing, exclusive (even as to Paragon) right and license, including the right to sublicense through multiple tiers (subject to Section 2.2), under Paragon’s interest in and to the Licensed Antibody Technology to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies, Derived Antibodies and/or Products in the Field in the Territory.

 

(b)            Subject to the terms of this Agreement, Paragon hereby grants to Apogee a worldwide, royalty-bearing, nonexclusive right and license, including the right to sublicense through multiple tiers (subject to Section 2.2), under Paragon’s interest in and to any other Patents Controlled by Paragon that are necessary to make, use, sell, offer for sale, have sold, import, export and otherwise exploit Licensed Antibodies or Derived Antibodies in the Field in the Territory. For clarity, the foregoing license rights do not include any rights to that portion of [***] unless the Parties otherwise agree in writing.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

2.2            Sublicenses.

 

(a)            Any sublicense granted by Apogee under the license granted in Section 2.1 shall be consistent with all relevant terms, conditions and restrictions of this Agreement. Apogee shall remain responsible for all of its payments and other performance obligations due under this Agreement, notwithstanding any license or sublicense that it may grant.

 

(b)            If any sublicense granted by Apogee under the license granted in Section 2.1 includes a further sublicense by Apogee of the license granted by [***] to Paragon under Section 2.1(a)(ii) of the [***] License Agreement, then the following terms and conditions shall apply:

 

(i)            each sublicense shall be subject and subordinate to the [***] License Agreement and shall contain provisions consistent with the terms and conditions of the [***] License Agreement;

 

(ii)           except as to sublicenses to Affiliates, subcontractors and service providers, Apogee shall [***] provide Paragon (or, [***]) with a copy of any executed sublicense agreement (which copy may be redacted to remove financial and other provisions that are not necessary to monitor compliance with this Section 2.2(b)) so that Paragon is able to meet its obligation under Section 3.4 of the [***] License Agreement to provide a copy of such sublicense agreement to [***]; and

 

(iii)           each such sublicense agreement shall contain the following provisions: (x) [***]; and (y) [***].

 

2.3            No Implied Licenses; Reservation of Rights. Except as expressly set forth herein, no right or license under any Patents, Know-How or Intellectual Property Right of either Party is granted or shall be granted by implication hereunder. All such rights or licenses are or shall be granted only as expressly provided in this Agreement, and each Party reserves to itself all rights not expressly granted under this Agreement.

 

2.4            Initial Information Transfer to Apogee. Within [***] days after the Effective Date, Paragon shall provide Apogee with the Paragon Know-How and Results in existence as of the Effective Date. Additionally, on a continuing basis during the term of the Research Program, within [***] days after additional Paragon Know-How or Results come into existence or are identified by Paragon, Paragon shall disclose and transfer such additional Paragon Know-How and Results to Apogee. Each Party shall bear all costs and expenses incurred by such Party in connection with the disclosure and transfer of any Paragon Know-How and/or Results as set forth above. During the first [***] days after the delivery of the Paragon Know-How and Results transferred to Apogee following completion of the Research Program, in the event Apogee makes any reasonable request for further information or assistance specific to any particular Paragon Know-How or Results, Paragon shall disclose and transfer such Paragon Know-How and/or Results and provide reasonable assistance to Apogee in connection therewith at [***] cost and expense at [***] then-current FTE rates.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

2.5            Multispecific Antibodies.

 

(a)            License to Paragon. Apogee hereby grants to Paragon, a worldwide, royalty-bearing (in accordance with Article V, mutatis mutandis), nonexclusive right and license, including the right to sublicense through multiple tiers, under (i) the Licensed Antibody Patents assigned to Apogee in accordance with Section 6.2, and (ii) the other Licensed Antibody Technology, in each case to use, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products containing or comprising Multispecific Antibodies (i.e., [***]) in the Field and in the Territory.

 

(b)            Right of First Negotiation.

 

(i)            Commencing on the Effective Date and continuing until the [***] anniversary thereof (“ROFN Period”), Paragon will promptly notify Apogee in writing if Paragon has developed a descriptive research plan with respect to the Development of a Multispecific Antibody or a plan to license or grant rights in a Multispecific Antibody to a Third Party, or enters into good faith negotiations pursuant to an offer to or from any Third Party relating to the foregoing. Together with such notice, Paragon will provide to Apogee all material information and research plans developed by Paragon with respect to such Multispecific Antibody. Apogee will have [***] days from receipt of this notice to deliver a written notice to Paragon of Apogee’s desire to engage in negotiations for an agreement concerning the Development, license or grant of rights to such Multispecific Antibody.

 

(ii)            If Apogee does not provide such written notice to Paragon of its interest to engage in such negotiations within such [***] day period, Paragon shall be free to enter into an agreement with respect to the Development, license or grant of rights to such Multispecific Antibody with a Third Party without further obligation under this Section 2.5(b). If Apogee does provide Paragon such written notice within such period, the Parties will negotiate [***] on a non-exclusive basis for a period of up to [***] months from the date of Apogee’s notice (“ROFN Negotiation Period”), an agreement for the Development, license or grant of rights to such Multispecific Antibody. Prior to and during the ROFN Negotiation Period, Paragon shall not enter into an agreement with respect to such Multispecific Antibody with any Third Party. Unless and until the Parties have entered into an agreement with respect to such Multispecific Antibody, Apogee shall have no rights with respect to such Multispecific Antibody. In the event that the Parties have not entered into an agreement with respect to Development, license or grant of rights to such Multispecific Antibody prior to the expiration of the ROFN Negotiation Period, Paragon will be free to enter into any agreement with a Third Party with respect to such Multispecific Antibody.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article III

 

[***] LICENSE AGREEMENT

 

3.1            Generally.

 

(a)            Applicability of [***] License Agreement. The Parties acknowledge and agree that:

 

(i)            the [***] IP is licensed by [***] to Paragon under the [***] License Agreement and sublicensed by Paragon to Apogee under Section 2.1 of this Agreement;

 

(ii)            the sublicense granted by Paragon to Apogee under the [***] IP pursuant to Section 2.1 of this Agreement is subject to and limited in all respects by the terms of the [***] License Agreement;

 

(iii)           the continued maintenance of the [***] License Agreement during the Term to the extent relating to the Apogee Program is beneficial to both Parties;

 

(iv)          Apogee agrees to be bound by the terms and conditions of the [***] License Agreement applicable to sublicensees to the extent of the sublicenses granted hereunder; and

 

(v)           in the event of any conflict between the terms of this Agreement and the terms of the [***] License Agreement that are applicable to Apogee, the terms of the [***] License Agreement shall control to the extent necessary to maintain compliance with the terms of the [***] License Agreement.

 

(b)            Required Disclosures under the [***] License Agreement. Notwithstanding anything else herein to the contrary, Apogee hereby consents to Paragon: (i) providing a copy of this Agreement to [***] (which copy shall be redacted to remove financial and other provisions that are not necessary to monitor compliance with Section 3.4 of the [***] License Agreement); and (ii) disclosing to [***] any Confidential Information of Apogee that is required to be disclosed to [***] under the terms of the [***] License Agreement, provided that [***] agrees to be bound by written obligations of confidentiality and non-use at least as restrictive as those set forth in Article VII of this Agreement.

 

3.2            Payments Under [***] License Agreement. As between the Parties, Apogee shall be solely responsible for the following payments due to [***] under the [***] License Agreement:

 

(a)             [***];

 

(b)             [***]; and

 

(c)             [***].

 

Unless directed otherwise by Paragon, (i) Apogee shall make all such payments directly to [***] in accordance with the terms of the [***] License Agreement and shall [***] provide written confirmation of such payments to Paragon, (ii) Apogee shall deliver directly to [***] all notices, reports and other information required in connection with the foregoing payment provisions in accordance with the terms of the [***] License Agreement and shall [***] provide a copy of such notices and reports to Paragon, and (iii) Apogee shall comply with Sections 5.1 and 5.2 of the [***] License Agreement to the extent applicable to the payments for which Apogee is responsible. Paragon shall [***] provide to Apogee a copy of any invoice received from [***] under Section 4.10 of the [***] License Agreement that is relevant to the payments for which Apogee is responsible (or direct [***] to provide such invoices directly to Apogee). [***].

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

3.3            Covenants.

 

(a)            By Apogee. Apogee hereby covenants and agrees that:

 

(i)            On or before [***] of each year during the Term, Apogee shall deliver to Paragon a written report for the Apogee Program meeting the reporting requirements set forth in Section 5.3 of the [***] License Agreement;

 

(ii)           Apogee shall [***] take any action or refrain from taking any action reasonably requested by Paragon in order to maintain compliance with the [***] License Agreement to the extent applicable to the licenses and rights granted by Paragon to Apogee hereunder;

 

(iii)          Apogee shall cure any breach of the [***] License Agreement caused by any action or omission of Apogee (or cause any Affiliate or Sublicensee of Apogee’s rights to cure any breach of the Apogee License Agreement caused by any action or omission of such Affiliate or Sublicensee) within [***] days of written notice thereof, and shall provide Paragon with written notice of such cure upon completion thereof; and

 

(iv)           Except as expressly required under this Agreement, Apogee shall not communicate directly with [***] with respect to the [***] License Agreement or the [***] IP without Paragon’s [***] consent, which consent may be withheld in Paragon’s sole discretion.

 

(b)            By Paragon.

 

(i)            Paragon shall maintain (to the extent within Paragon’s control) in full force and effect the [***] License Agreement for so long as the rights sublicensed to Apogee under the [***] License Agreement are necessary or reasonably useful to the extent relating to the Apogee Program, including the Development, Manufacture, Commercialization or exploitation of the Products in the Field in the Territory, including by faithfully, fully and timely performing its obligations pursuant to the [***] License Agreement (provided, that Paragon shall not be responsible for any breach or termination of the [***] License Agreement caused by any action or inaction of Apogee, including a breach of this Agreement or the [***] License Agreement), and shall not terminate, in whole or in part, the [***] License Agreement to the extent relating to the Apogee Program without the prior written consent of Apogee;

 

(ii)           Paragon shall, and in any event, within the relevant time period required under the [***] License Agreement, cure (or shall use [***] to cause any sublicensee of Paragon under the [***] License Agreement other than Apogee to promptly cure) any breach of the [***] License Agreement caused by any action or omission of Paragon or its Affiliates or other sublicensees;

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(iii)          Paragon shall not modify or amend the [***] License Agreement in a manner that adversely and materially effects Apogee’s rights and obligations under this Agreement, including Apogee’s Development, Manufacture, Commercialization or exploitation of the Products in the Field in the Territory under this Agreement or increases the costs and payments of any kind arising under the [***] License Agreement for which Apogee is responsible (whether to Paragon or [***]) without the [***] consent of Apogee, which consent may not be unreasonably withheld, conditioned or delayed;

 

(iv)          Paragon shall provide to Apogee a copy of any amendment to or restatement of the [***] License Agreement [***] following execution thereof; and

 

(v)           Paragon shall provide to Apogee a copy of any written notice of alleged breach or termination delivered by [***] under the [***] License Agreement.

 

Article IV

 

DEVELOPMENT, MANUFACTURING & COMMERCIALIZATION

 

4.1            Apogee Responsibilities.

 

(a)            As between the Parties, Apogee shall be solely responsible for all aspects of the Development, Manufacturing, and Commercialization of the Products in the Territory in the Field during the Term, including distribution, product positioning, product strategy, product branding, core messaging, marketing, promotion, detailing activities and all decisions relating to the setting of Product prices in the Territory; invoicing and booking sales, and establishing all terms of sale, and all regulatory activities with respect to Products in the Territory.

 

(b)            As between the Parties, Apogee shall be solely responsible for selection, registration and maintenance of all trademarks associated with the Products in the Field in the Territory. As between the Parties, Apogee shall solely own such trademarks in the Territory and pay all relevant costs thereof.

 

4.2            Regulatory. As between the Parties, Apogee shall control the regulatory strategy, regulatory filings, regulatory activities (including clinical trials for Products) and communication with each Regulatory Authority for the Products in the Field in the Territory. Apogee shall have the right to reference any relevant data generated by Paragon with respect to Licensed Antibodies, Derivative Antibodies, or Products for the purposes of regulatory filings and safety reporting, including all nonclinical data, pre-approval and post-approval clinical use data, and regulatory data with respect thereto. Apogee or its designee shall be the party to file an application to each applicable Regulatory Authority in the Territory for, and to obtain and maintain, in its own name, the Regulatory Approval of the Products in each country in the Territory.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

4.3            Diligence; Reporting. Apogee shall use Commercially Reasonable Efforts (i) to Develop and seek Regulatory Approval for at least one Product in the Field in the United States and at least one other Major Market Country and (ii) upon receipt of Regulatory Approval for a given Product in a given country, to commercialize such Product in such country, in each case ((i) or (ii)) either by itself or through its Affiliates or Sublicensees or its or their respective contractors. Additionally, on or before [***] of each year during the Term, Apogee shall deliver to Paragon a report summarizing its material development efforts with respect to any Licensed Antibodies, Derived Antibodies and Products, including preclinical and clinical activities, and achievement of any Milestones, during the preceding [***]. For the avoidance of doubt, if Apogee determines, in its sole discretion, that it is commercially unreasonable to pursue Commercialization of a Product in any country (other than the United States), it will not be considered a material breach of this Agreement to cease Development or Commercialization of such Product with respect to such country.

 

Article V

 

FINANCIAL TERMS

 

5.1            Upfront Payment. In order to reimburse Paragon for amounts paid under Sections 4.4 and 4.7 of the [***] License Agreement in connection with the execution of this Agreement, Apogee shall pay to Paragon an initial upfront payment in the amount of [***] within [***] Business Days of the Effective Date.

 

5.2            Milestone Payments. Apogee shall make the following one-time payments to Paragon (each, a “Milestone Payment”), based on the achievement of the corresponding milestone (each, a “Milestone”) by Apogee, its Affiliates, or its Sublicensees with respect to the first Product, Licensed Antibody, or Derived Antibody to achieve such Milestone. Apogee shall, within [***] days after it or its Affiliates achieve such Milestone or within [***] days after it learns that its Sublicensee has achieved such Milestone, make the corresponding Milestone Payment to Paragon. Each Milestone Payment shall be paid no more than once, and Apogee’s total Milestone Payments hereunder shall not exceed Three Million Dollars ($3,000,000).

 

	Milestone	Milestone Payment
#1	Achievement of Development Candidate	One Million Dollars ($1,000,000)
#2	First dosing of a human patient in a Phase I Trial	Two Million Dollars ($2,000,000)

 

5.3            Royalties. During the applicable Royalty Term (which shall be measured on a country-by-country and Product-by-Product basis), Apogee shall pay royalties to Paragon equal to [***] percent ([***]%) of Net Sales of all Product sold by Apogee, its Affiliates or its Sublicensees (“Royalty Payments”). For clarity, any Net Sales of Product made in a given country after the expiration of the Royalty Term for such Product in such country will not be royalty-bearing.

 

 

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5.4            Payment Reports. Within [***] days after the end of the [***], Apogee shall provide to Paragon a written report, on a [***] basis, stating the [***]; [***]; and [***]. [***].

 

5.5            Payment Method. All payments due under this Agreement to Paragon shall be made in US Dollars by bank wire transfer in funds to an account designated by Paragon from time to time reasonably in advance of any payment due date.

 

5.6            Taxes. The Parties agree to cooperate with one another and use reasonable efforts to minimize obligations for any and all income or other taxes required by Applicable Law to be withheld or deducted from any Royalty Payments, Milestone Payments or other payments made by Apogee to Paragon under this Agreement, including by completing all procedural steps, and taking all reasonable measures, to ensure that any withholding tax is reduced or eliminated to the extent permitted under Applicable Law, including income tax treaty provisions and related procedures for claiming treaty relief. To the extent that Apogee is required to deduct and withhold taxes on any payment to Paragon, Apogee shall: (i) deduct such taxes from such payment to Paragon, (ii) pay the amounts of such taxes to the proper government authority in a timely manner, and (iii) promptly submit to Paragon an official tax certificate or other available evidence of such withholding sufficient to enable Paragon to claim such payment of taxes. For the avoidance of doubt, Apogee’s remittance of such withheld amounts to the appropriate governmental authority, together with payment to Paragon of the remaining amount owed, shall constitute full satisfaction of the applicable payment due to Paragon. Apogee shall provide Paragon with reasonable assistance in order to allow Paragon to recover, as permitted by Applicable Law, withholding taxes, value added taxes or similar obligations resulting from payments made hereunder or to obtain the benefit of any present or future treaty against double taxation which may apply to such payments. Paragon shall promptly provide Apogee with any requested tax forms that may be reasonably necessary in order for Apogee to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral tax income treaty.

 

5.7            Foreign Exchange. If any currency conversion shall be required in connection with the calculation of amounts payable hereunder, such conversion shall be made using the exchange rates reported on the [***] Business Day prior the payment due date for the purchase and sale of Dollars, as reported by the Wall Street Journal (East Coast Edition).

 

5.8            Late Payments. Any amount owed by Apogee to Paragon under this Agreement that is not paid within the applicable time period set forth herein will accrue interest at the per annum rate of [***] percentage point above the then-applicable United States prime rate as quoted in the Wall Street Journal (East Coast Edition) (or if it no longer exists, a similarly authoritative source), calculated on a [***] basis, or, if lower, the highest rate permitted under Applicable Law.

 

5.9            Blocked Currency. If by Applicable Law of a country in which Net Sales occurred, conversion of funds into Dollars or transfer of funds from such country to the United States is restricted, forbidden or delayed for more than [***] days, then Apogee can elect, at its sole discretion, that the amounts accrued in such country and owed by Apogee to Paragon under this Agreement shall be paid to Paragon in such country in local currency by deposit in a local bank designated by Paragon, unless the Parties otherwise agree in writing.

 

 

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5.10            Records; Inspection.

 

(a)            Apogee shall, and shall cause its applicable Affiliates to, create and keep complete and accurate records of its sales and other dispositions of all Products, including all records that are reasonably necessary for the purposes of calculating all payments due under this Agreement.

 

(b)            Upon reasonable advance written notice to Apogee, Paragon shall have the right to retain a nationally recognized (in the US) independent certified public accounting firm to perform on behalf of Paragon an audit, conducted in accordance with U.S. generally accepted accounting principles (GAAP), of such books and records of Apogee or its applicable Affiliates as may be reasonably necessary to verify the accuracy of any reports provided pursuant to Section 5.4 hereunder for any Calendar Quarter ending not more than [***] calendar months prior to the date of such request. Such audits shall not occur more frequently than [***] in each Calendar Year and shall not be conducted more than [***] with respect to any reporting period, in each case other than for cause. All information disclosed or observed during any audit pursuant to this Section 5.10 shall be the Confidential Information of Apogee, and Paragon shall cause the accounting firm to retain all such information as Confidential Information, including, if requested by Apogee, by requiring such accounting firm to enter into a customary confidentiality agreement with Apogee prior to the initiation of any such audit.

 

(c)            Upon completion of any audit hereunder, the accounting firm shall provide both Apogee and Paragon a written report disclosing whether the reports submitted by Apogee are correct or incorrect, whether the amounts paid are correct or incorrect, and in each case, the specific details concerning any discrepancies. No other information regarding Apogee’s records shall be provided to Paragon.

 

(d)            Paragon shall bear its internal expenses and the out-of-pocket costs for engaging such accounting firm in connection with performing such audits; provided, however, that if any such audit uncovers an underpayment by Apogee that exceeds [***] percent ([***]%) of the total owed for such payment or payment period, as applicable, then Apogee shall reimburse Paragon for the amounts actually paid to such accounting firm for performing such audit.

 

(e)            If such accounting firm concludes that Apogee has in aggregate underpaid amounts owed to Paragon during the audited period, Apogee shall pay Paragon the amount of the discrepancy within [***] days of the date Paragon delivers to Apogee such accounting firm’s written report and an invoice for such amounts. If such accounting firm concludes that Apogee has in aggregate overpaid amounts owed to Paragon during the audited period, then Apogee may, at its election, either credit such overpaid amount against any future payment obligation to Paragon or require Paragon to refund such amounts within [***] days.

 

 

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Article VI

 

Intellectual Property

 

6.1            Ownership. Other than rights granted to Apogee under the Agreement with respect to the Licensed Antibody Technology, nothing in this Agreement shall affect Paragon’s rights in any Patents, Know-How, or other intellectual property owned or controlled by Paragon, now or in the future. Other than rights granted to Paragon under the Agreement with respect to the Apogee Intellectual Property, nothing in the Agreement shall affect Apogee’s rights in any Patents, Know-How, or other intellectual property owned or controlled by Apogee, now or in the future.

 

6.2            Assignment of Licensed Antibody Patents.

 

(a)            Effective as of Apogee’s payment of the Milestone Payment #1, Paragon hereby assigns to Apogee all of its right, title, and interest in the Licensed Antibody Patents owned by Paragon, in each case to the extent arising from the Research Program. Within [***] days of Paragon’s receipt of Milestone Payment #1, as requested by Apogee, Paragon will assist and take any actions necessary to assign and effectuate the assignment of the Licensed Antibody Patents owned by Paragon to Apogee.

 

6.3            Patent Prosecution.

 

(a)            Prosecution Generally. For the purpose of this Article VI, (i) “prosecute” and “prosecution” shall include any patent interference, opposition, pre-issuance Third Party submission, ex parte re-examination, post-grant review, inter partes review or other similar proceeding, appeals or petitions to any board of appeals in a patent office, appeals to any court for any patent office decisions, reissue proceedings, and applications for patent term extensions and the like, and (ii) “Multispecific Patents” means those Patents owned or Controlled by a Party that claim the composition of matter of, or any method of specifically making or using, a Multispecific Antibody.

 

(b)            Prosecution by Apogee. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining (i) any Patents that it owns or controls (the “Apogee Patents”), and (ii) the Licensed Antibody Patents other than the [***] Licensed Patents (the “Apogee Prosecutable Patents”), in each case, at Apogee’s sole expense.

 

(i)            Consultation with Paragon. Apogee shall provide Paragon with copies of all material correspondence from and to any patent office relating to the Apogee Prosecutable Patents, and Apogee shall provide Paragon with drafts of all proposed filings to any patent office with respect to such Apogee Prosecutable Patents in reasonably adequate time before submission of such filings for Paragon’s review and comment. Apogee will take into consideration Paragon’s reasonable comments prior to submitting such filings. Additionally, Apogee will reasonably consider and coordinate with Paragon with respect to the filing of any Multispecific Patents that Apogee owns or otherwise Controls.

 

 

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(ii)            Paragon’s Backup Right to Prosecute. Apogee shall notify Paragon of any decision not to prepare or file, or to abandon, cease prosecution or not maintain any Apogee Prosecutable Patent anywhere in the Territory. Apogee shall provide such notice at least [***] days prior to any filing or payment due date, or any other due date that requires action, in connection with such Apogee Prosecutable Patent. In such event, Paragon shall have a backup right, but not the obligation, to prepare, file, or continue prosecution or maintenance of, such Apogee Prosecutable Patent in Apogee’s name, at Paragon’s expense.

 

(iii)           Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Apogee Prosecutable Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

(c)            Prosecution by Paragon. Except with respect to Apogee Prosecutable Patents, Paragon shall be solely responsible for, and have sole discretion over, preparing, filing, prosecuting and maintaining any Patents (including Multispecific Patents) that it owns or otherwise Controls. Paragon’s prosecution of such Patents shall be at Paragon’s sole expense. Notwithstanding the foregoing, in prosecuting any Multispecific Patents, Paragon hereby agrees that during the Term, neither Paragon nor any of its Affiliates or licensees will file, or assist any Third Party in filing, any Patent claiming the composition of matter of, or any method of specifically making or using, any Licensed Antibody or Derived Antibody, other than as part of a Multispecific Antibody.

 

(i)            Consultation with Apogee. During the ROFN Period, Paragon shall provide Apogee with copies of all material correspondence from and to any patent office relating to the Multispecific Patents, and Paragon shall provide Apogee with drafts of all proposed filings to any patent office with respect to such Multispecific Patents in reasonably adequate time before submission of such filings for Apogee’s review and comment. Paragon will take into consideration Apogee’s reasonable comments prior to submitting such filings.

 

(ii)            Cooperation in Patent Prosecution. Each Party shall cooperate with the other Party in the preparation, filing, prosecution and maintenance of Multispecific Patents, including in each case by providing the prosecuting Party with data and other information as appropriate and executing all necessary affidavits, assignments and other paperwork.

 

(d)            [***] Licensed Patents. The Parties acknowledge and agree that Paragon has no right under the [***] License Agreement to file, prosecute or maintain the [***] Licensed Patents, and Apogee has no right under this Agreement to file, prosecute or maintain the [***] Licensed Patents.

 

(e)            Patent Prosecution Costs Prior to Assignment. No later than [***] days after the Effective Date, Apogee shall reimburse Paragon for any actual costs and expenses incurred by Paragon that are related to the Prosecution of any Apogee Prosecutable Patents prior to the Effective Date. Apogee will [***] reimburse Paragon for any future Prosecution costs and expenses incurred by Paragon prior to assignment of the Licensed Antibody Patents pursuant to Section 6.2.

 

 

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(f)            CREATE Act. Notwithstanding anything to the contrary in this Agreement, each Party will have the right to invoke the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3) (the “CREATE Act”) when exercising its rights under Article VI of this Agreement, without the prior written consent of the other Party. Where such Party intends to invoke the CREATE Act, it will notify the other Party and the other Party will cooperate and coordinate its activities with such Party with respect to any submissions, filings or other activities in support thereof. The Parties acknowledge and agree that this Agreement is a joint research agreement (JRA) as defined in the CREATE Act.

 

6.4            Patent Enforcement and Defense.

 

(a)            Notice of Patent Infringement and Patent Challenge. Each Party shall give the other Party notice of any known or suspected infringement by a Third Party of any Licensed Antibody Patent (“Patent Infringement”) and any known or suspected challenge by a Third Party against the validity or enforceability of any Licensed Antibody Patent (“Patent Challenge”) within [***] days after such Patent Infringement or Patent Challenge comes to such Party’s attention.

 

(b)            Apogee’s First Right to Enforce or Defend. Apogee shall have the first right, but not the obligation, to bring and control any legal action, including by declaratory judgment action, patent litigation or similar proceeding, in connection with any Patent Infringement or Patent Challenge with respect to the Apogee Prosecutable Patents in the Territory at its own expense and discretion as it reasonably determines appropriate. Apogee shall keep Paragon informed and reasonably consult with Paragon in the course of such legal action. Paragon shall have the right to be represented in any such legal action by counsel of its choice at its own expense.

 

(c)            Settlement. In connection with any such legal action or proceeding, Apogee shall not enter into any settlement admitting the invalidity or unenforceability of Apogee Prosecutable Patents without the prior written consent of Paragon (such consent not to be unreasonably conditioned, withheld, or delayed).

 

(d)            Paragon’s Backup Right to Enforce or Defend. If Apogee does not initiate a legal action for Patent Infringement or Patent Challenge within [***] days after a notice from Paragon under Section 6.4(a), then Paragon shall have a backup right, but not the obligation, to initiate such legal action at its own expense.

 

(e)            Allocation of Recoveries. Any recoveries resulting from such legal action initiated by Apogee or Paragon hereunder relating to Patent Infringement or Patent Challenge, including pursuant to a settlement, shall be applied as follows: (i) first to reimburse [***] of each of the Parties in such action; and (ii) second, any amounts remaining after paying the amounts due each Party under clause (i) (the “Remaining Recovery”) shall be allocated to [***] in an amount equal to [***], with the remaining portion of the Remaining Recovery being allocated to as follows: [***] percent ([***]%) to the Party initiating the action, and [***] percent ([***]%) to the other Party.

 

 

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(f)            Apogee Patents. As between the Parties, Apogee shall be solely responsible for, and have sole discretion over, enforcement and defense of any Apogee Patents. Any recoveries resulting from any legal action with respect to the Apogee Patents shall be retained solely by Apogee.

 

(g)            [***] Licensed Patents. The Parties acknowledge and agree that Paragon has no right under the [***] License Agreement to enforce the [***] Licensed Patents, and Apogee has no right under this Agreement to enforce the [***] Licensed Patents.

 

(h)            Cooperation with Patent Enforcement. At the request of the enforcing Party (and at the requesting Party’s expense), the other Party shall reasonably cooperate and provide any information or assistance in connection with any legal action under this Section 6.4, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the legal action at its own expense.

 

6.5            Third Party Patent Proceedings.

 

(a)            Apogee’s First Right to Challenge Third Party Patents. Apogee shall have the sole and exclusive right, but not the obligation, to bring and control any legal action to challenge any Patents controlled by a Third Party, including by declaratory judgment action, patent interference, opposition, pre-issuance submission, ex parte re-examination, post-grant review, inter partes review, patent litigation or similar proceeding, in each case that are necessary or reasonably useful to make, use, offer for sale, sell, import, export, research, develop, manufacture or commercialize any Licensed Antibody, Derived Antibody or Product.

 

(b)            Cooperation by Paragon. At the request of Apogee, Paragon shall cooperate and provide any information or assistance in connection with any legal action under this Section 6.5, including executing reasonably appropriate documents, cooperating in discovery and, if required by Applicable Law, joining as a party to the action at Apogee’s cost and expense.

 

6.6            Common Interest Agreement. At the request of either Party to conduct the activities under this Article VI, the Parties shall cooperate in good faith to enter into a customary common-interest agreement intended to preserve attorney-client privilege with respect to disclosures and communications by or on behalf of either Party or its Affiliates in connection with such activities.

 

 

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Article VII

 

PROTECTION OF CONFIDENTIAL INFORMATION

 

7.1            Confidentiality. Except to the extent expressly authorized by this Agreement, the Receiving Party agrees that, during the Term and for [***] years thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose other than as expressly provided for in this Agreement, any Confidential Information of the Disclosing Party. The Receiving Party may disclose Confidential Information of the Disclosing Party to those of the Receiving Party’s Representatives who have a need for such information, provided that the Receiving Party shall advise such Representatives of the confidential nature thereof, shall ensure that each such Representative is bound in writing by obligations of confidentiality and non-use at least as stringent as those contained in this Agreement, and shall be responsible for the compliance of its Representatives with the terms of this Agreement. The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its Representatives do not disclose or make any unauthorized use of the Confidential Information of the Disclosing Party. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Confidential Information of the Disclosing Party.

 

7.2            Exceptions. The Receiving Party’s obligations under Section 7.1 shall not apply to any Confidential Information of the Disclosing Party that the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party in breach of this Agreement, generally known or available; (b) is known by the Receiving Party at the time of receiving such information from the Disclosing Party; (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party, without the aid, use or application of any Confidential Information of the Disclosing Party.

 

7.3            Authorized Disclosure. Notwithstanding the provisions of this Article VII, the Receiving Party may disclose Confidential Information, without violating its obligations under this Agreement, to the extent the disclosure is:

 

(a)            required by a valid order of a court or other governmental body of competent jurisdiction or as otherwise required by Applicable Law, rule, regulation (including securities laws and regulations), government requirement, or as may be required in connection with any filings made with, or by the disclosure policies of, a stock exchange, provided that the Receiving Party shall give reasonable prior written notice to the Disclosing Party of such required disclosure and, at [***] request and expense, shall cooperate with the Disclosing Party’s efforts to contest such requirement, to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued or the law, rule or regulation required, or to obtain other confidential treatment of such Confidential Information; or

 

 

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(b)            reasonably necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, in each case, in accordance with this Agreement; or

 

(c)            under appropriate confidentiality provisions substantially equivalent to those in this Agreement (but of shorter duration if customary in the case of subclause (ii)) (i) 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, or (ii) to actual or bona fide potential Sublicensees, acquirers, merger partners, assignees, collaborators, investment bankers, investors or lenders.

 

7.4            Use of Names. Neither Party shall use the other Party’s name or trademarks in any advertising, sales, or promotional material or in any publication without the prior written consent of the other Party.

 

7.5            Confidentiality of this Agreement. This Agreement and its terms are considered Confidential Information of both Parties, and each Party shall keep confidential and shall not publish or otherwise disclose the terms of this Agreement without the prior written consent of the other Party, except as expressly permitted by Section 7.3, and except that both Parties may disclose this Agreement and its terms to its legal, financial and investment banking advisors; bona fide potential and actual investors, acquirers, merger partners, assignees, collaborators, investment bankers, lenders, licensees, sublicensees, or strategic partners in connection with license or partnering transactions, due diligence or similar investigations by such Third Parties or in confidential financing documents; and counsel or other advisors for the foregoing; provided, in each case, that any such Third Party agrees to be bound by obligations of confidentiality and non-use at least as restrictive as those set forth in this Article VII (provided that the confidentiality term applicable to such Third Party may be shorter so long as it is commercially reasonable).

 

7.6            Publicity. Neither Party will generate or allow any publicity regarding this Agreement or the transaction contemplated hereunder without the other Party first approving such press release or publication in writing, except for any public disclosure by or on behalf of a Party that is, in the opinion of such Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of such Party are listed (or to which an application for listing has been submitted) and except that a Party may, once a press release or other public written statement is approved in writing by both Parties, make subsequent public disclosure of the information contained in such press release or other public written statement without the further approval of the other Party.

 

7.7            Return of Confidential Information. Promptly after the termination or expiration of this Agreement for any reason, each Party will return to the other Party or destroy, as such other Party will direct, all tangible manifestations of such other Party’s Confidential Information at that time in the possession of the receiving Party, subject to the receiving Party’s right to maintain one copy of such tangible manifestations of such other Party’s Confidential Information solely for purposes of monitoring its compliance with this Agreement.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Article VIII

 

REPRESENTATIONS AND WARRANTIES

 

8.1            Mutual Representations. Each Party represents and warrants to the other Party that: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not and will not conflict with any agreement, instrument, or understanding, oral or written, to which it is or may become a party or by which it may be or become bound.

 

8.2            Representations of Paragon. Paragon hereby represents, warrants and covenants to Apogee as of the Effective Date that:

 

(a)            Paragon has set forth, in Exhibit A, a complete and accurate list of all the Licensed Antibody Patents it owns or Controls as of the Effective Date (including title, all inventors, owners, assignees, filing date, grant date, expiration date, and status);

 

(b)            Paragon has properly filed, prosecuted and maintained such Licensed Antibody Patents;

 

(c)            Paragon has complied with all duties of disclosure and has not engaged in any inequitable conduct with respect to all such Licensed Antibody Patents;

 

(d)            all Licensed Antibody Patents listed in Exhibit A that have been issued as of the Effective Date are in full force and effect and are, to Paragon’s knowledge, valid and enforceable;

 

(e)            other than the Patents listed in Exhibit A, as of the Effective Date neither Paragon nor any of its Affiliates own or have any rights in, to or under any Patents Covering any Licensed Antibody or Derivative Antibody, or their composition, or any method of specifically manufacturing such Antibody;

 

(f)            There are no judgments against or awards or settlements against Paragon or any of its Affiliates, and there are no claims, actions, or proceedings pending or, to Paragon’s knowledge, threatened, nor to Paragon’s knowledge are there any formal inquiries initiated or written notices received that are reasonably likely to lead to the institution of any such legal proceedings, in each case (i) relating to any Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology or alleging that any Third Party has any right to or under any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology that would conflict with the rights granted in this Agreement; or (ii) alleging that any Licensed Antibody Patent is unpatentable, invalid, unenforceable, or not infringed;

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(g)            All of Paragon’s and its Affiliates’ employees, officers, subcontractors and consultants: (i) have assigned, or are under contractual obligations to assign, to Paragon all inventions conceived, reduced to practice or otherwise related to Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology; (ii) to Paragon’s knowledge, have no obligations under agreements or Applicable Law to assign any interest in any such inventions to any Third Party; and (iii) have existing obligations under agreements or Applicable Law to maintain as confidential Paragon’s Confidential Information as well as confidential information of other parties (including of Apogee and its Affiliates);

 

(h)            none of Paragon, its Representatives, or any other person used by Paragon in the performance of the Agreement has been or is (i) debarred, convicted, or is subject to a pending debarment or conviction, pursuant to section 306 of the United States Food Drug and Cosmetic Act, 21 U.S.C. § 335a, (ii) listed by any government or regulatory agencies as ineligible to participate in any government healthcare programs or government procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)), or excluded, debarred, suspended or otherwise made ineligible to participate in any such program, or (iii) convicted of a criminal offense related to the provision of healthcare items or services, or is subject to any such pending action. Paragon agrees to inform Apogee in writing promptly if Paragon or any person who is performing activities on its behalf under the Agreement is subject to the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending or threatened;

 

(i)            No funding, facilities, or personnel of any governmental authority or any public or private educational or research institutions were used to develop or create any Licensed Antibody Technology, and neither Paragon nor any of its Affiliates has entered into a government funding relationship that would result in rights to any Products, Licensed Antibodies, Derivative Antibodies, or Licensed Antibody Technology residing in the U.S. Government, the National Institutes of Health, or other agency, and the licenses granted hereunder are not subject to overriding obligations to the U.S. Government as set forth in Public Law 96-517 (35 U.S.C. §§ 200-204), or any similar obligations under the laws of any other country in the Territory;

 

(j)            Subject to Article VI, and Section 11.6, during the Term, Paragon will not grant a Third Party any license or other right in the Licensed Antibody Technology that would conflict with the rights and licenses granted to Apogee hereunder with respect to such Licensed Antibody Technology; and

 

(k)            (i) the version of the [***] License Agreement attached to this Agreement as Exhibit B is a true, correct and complete copy of the [***] License Agreement; and (ii) Paragon has not received a notice of breach or termination from [***] under the [***] License Agreement, nor has Paragon delivered a notice of breach or termination to [***] under the [***] License Agreement, and the [***] License Agreement is in full force and effect.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

8.3            DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, DURABILITY, MERCHANTABLE QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

Article IX

 

TERM; TERMINATION

 

9.1            Term. The term of this Agreement shall commence on the Effective Date and shall expire on a country-by-country and Product-by-Product basis on the expiration of the Royalty Term for such Product in such country, in each case, unless earlier terminated by a Party as set forth below in this Article IX (the “Term”). Upon expiration (but not termination) of the Agreement, the license granted in Section 2.1 shall survive and become royalty-free, fully paid-up, perpetual and irrevocable with respect to the applicable Product in the applicable country.

 

9.2            Termination by Apogee. Apogee shall have the right to terminate this Agreement in its entirety or on country-by-country or Product-by-Product basis for any or no reason upon sixty (60) days’ prior written notice to Paragon.

 

9.3            Material Breach. Either Party may terminate this Agreement in its entirety for the material breach of this Agreement by the other Party, if such material breach remains uncured ninety (90) days (or thirty (30) days with respect to (a) any failure to make any payments owing to a Party hereunder, or (b) any material breach of this Agreement by Apogee that also constitutes a breach of a material obligation by Paragon under the [***] License Agreement) following notice from the non-breaching Party to the breaching Party specifying such breach, provided that, in the event of a dispute regarding the existence or cure of a material breach, no termination shall become effective until such dispute is finally resolved pursuant to Section 11.7 in favor of the non-breaching Party and the breaching Party fails to cure such material breach within ninety (90) days thereafter.

 

9.4            Insolvency. Each Party will have the right to terminate this Agreement in the event of a Bankruptcy Event with respect to the other Party. “Bankruptcy Event” means the occurrence of any of the following: (a) the institution of any bankruptcy, receivership, insolvency, reorganization or other similar proceedings by or against a Party under any bankruptcy, insolvency, or other similar law now or hereinafter in effect, including any section or chapter of the United States Bankruptcy Code, as amended or under any similar laws or statutes of the United States or any state thereof (the “Bankruptcy Code”), where in the case of involuntary proceedings such proceedings have not been dismissed or discharged within [***] days after they are instituted, (b) the insolvency or making of an assignment for the benefit of creditors or the admittance by a Party of any involuntary debts as they mature, (c) the institution of any reorganization, arrangement or other readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment of a receiver for all or substantially all of a Party’s assets, or (e) any corporate action taken by the board of directors of a Party in furtherance of any of the foregoing actions.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

9.5            Termination of [***] License Agreement. In the event the [***] License Agreement is terminated in its entirety, this Agreement shall remain in full force and effect, provided that Apogee is not in material breach of the terms of this Agreement, and agrees to be bound to [***] as a licensor under the terms and conditions of this Agreement and the [***] License Agreement. Apogee shall [***] enter into an appropriate agreement with [***] and an amendment to this Agreement with Paragon to effectuate the foregoing.

 

9.6            Effect of Termination of this Agreement. If this Agreement terminates for any reason (excluding expiration under Section 9.1), whether with respect to a particular Product, particular country, or in its entirety, then the following shall apply:

 

(a)            All licenses granted pursuant to Section 2.1 with respect to the terminated Product(s) and terminated country(ies) shall terminate, except as required for Apogee, its Affiliates, and/or its Sublicensees to continue to complete or wind down any ongoing clinical trials for any Product, as may be required by Applicable Law or ethical principles.

 

(b)            No later than [***] days after the effective date of such termination, each Party shall return or cause to be returned to the other Party, or destroy, all Confidential Information received from the other Party and all copies thereof related to the terminated Product(s) in the terminated country(ies); provided, however, that each Party may retain any Confidential Information reasonably necessary for such Party’s ongoing obligations and rights under this Agreement which do not terminate, and each Party may keep one (1) copy of Confidential Information received from the other Party in its confidential files for record purposes and such copy shall remain subject to Article VII of this Agreement.

 

(c)            If this Agreement is terminated in its entirety, then, upon [***], (which must be provided to [***] within [***] days after the effective date of termination), (i) Apogee shall assign to Paragon all right, title, and interest in the Licensed Antibody Patents previously assigned to Apogee pursuant to Section 6.2, and (ii) Paragon and Apogee shall [***] discuss in good faith, for a period of up to [***] days following such written request, terms and conditions under which Apogee may be willing to grant to Paragon a [***], [***] license under the Apogee Intellectual Property to, make, have made, sell, offer for sale, have sold, import, export and otherwise exploit Products in the Field in the Territory that were the subject of any research, Development or Commercialization by Apogee or its Affiliates prior to such termination, (“Reversion Products”), as well as the potential transfer of materials, ongoing clinical trials, and applicable regulatory filings and relevant data generated by Apogee with respect to the Reversion Products and necessary for the development and commercialization of such Reversion Product, such agreement to include commercially reasonable financial and other terms, which terms shall take into consideration Apogee’s contributions made in the Development, Commercialization and other exploitation of the Reversion Products.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

9.7            Survival of Sublicenses. Upon termination of this Agreement, at the written request of any Sublicensee who is not then in breach of its sublicense agreement, such sublicense agreement will survive such termination of this Agreement, and Paragon will negotiate in good faith the terms and conditions of a direct license with such Sublicensee that is consistent with the terms of this Agreement (as adjusted for the scope of license, products, field of use, and other provisions of the original sublicense).

 

9.8            Accrued Rights; Survival. The expiration or termination of this Agreement for any reason shall not release either Party from any liability or obligation that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination, nor will expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement. In the event of expiration or any termination of this Agreement, the following provisions of this Agreement shall survive such expiration or termination in accordance with their respective terms and conditions: Article I (Definitions); Section 2.2 (Sublicenses) (with respect to any payments or other performance obligations prior to conversion (if any) to a direct license pursuant to Section 9.7); Section 2.3 (No Implied Licenses; Reservation of Rights); Article III (with respect to any payments or other performance obligations accrued prior to the date of termination or expiration); Section 5.2 (Milestone Payments) (with respect to any outstanding payment obligations incurred prior to the date of termination or expiration); Section 5.3 (Royalties) (with respect to any outstanding payments accrued prior to the effective date of termination); Section 5.4 (Payment Reports) (with respect to the last Calendar Quarter of the Term to the extent not already reported and any outstanding payment obligation with respect to any royalty payments accrued prior to the date of termination or expiration); Section 5.5 (Payment Method) to 5.9 (Blocked Currency) (for the duration of any outstanding payment obligations under this Agreement); Section 5.10 (Records; Inspection) (for the duration set forth therein); Section 6.1 (Ownership); Article VII (Protection of Confidential Information) (for the duration set forth therein); Section 8.3 (Disclaimer of Warranties); Section 9.5 (Effect of Termination of this Agreement); Section 9.7 (Survival of Sublicenses); Section 9.8 (Accrued Rights; Survival); Article X (Indemnification); and Article XI (Miscellaneous).

 

Article X

 

INDEMNIFICATION

 

10.1          By Apogee. Apogee hereby agrees to defend, indemnify, and hold harmless Paragon, its Affiliates and its or their Representatives (each, a “Paragon Indemnitee”) from and against any and all losses, damages, liabilities, expenses, and costs, including reasonable legal expense and attorneys’ fees (collectively, “Losses”), to which any Paragon Indemnitee may become subject as a result of any claim, demand, action, or other proceeding by any Third Party (“Third Party Claim”) to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Apogee Indemnitee in the performance of this Agreement; (b) Apogee’s breach of any of its representations, warranties or covenants under this Agreement; (c) Apogee’s research, testing, development, manufacture, use, sale, distribution, licensing and/or commercialization of Licensed Antibodies, Derived Antibodies and/or Products (but, for clarity, excluding any activities conducted by Paragon under this Agreement or the Option Agreement); or (d) any breach of the [***] License Agreement that is caused by the actions or omissions of Apogee or its Affiliates and Sublicensees, in each case ((a) to (d)), except in each case to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Paragon Indemnitee.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.2            By Paragon. Paragon hereby agrees to defend, indemnify, and hold harmless Apogee, its Affiliates, and its or their Representatives (each, an “Apogee Indemnitee”) from and against any and all Losses to which any Apogee Indemnitee may become subject as a result of any Third Party Claim to the extent such Losses result from: (a) the gross negligence, recklessness or willful misconduct of any Paragon Indemnitee in the performance of this Agreement; or (b) Paragon’s breach of any of its representations, warranties or covenants under this Agreement; in each case ((a) to (c)), except to the extent that any Losses are attributable to the breach of this Agreement by, or the negligence, recklessness or willful misconduct of, any Apogee Indemnitee.

 

10.3            Indemnification Procedures. The Party claiming indemnity under this Article X (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 10.1 or Section 10.2, as applicable, will be reduced to the extent the Indemnified Party’s delay in providing notification pursuant to the previous sentence results in material 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 10.3 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, provided that (a) it agrees to indemnify the Indemnified Party from and against all Losses the Indemnified Party may suffer arising out of the Claim; (b) the Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Party; and (c) the Indemnifying Party conducts the defense of the Claim diligently. 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, unless the settlement involves only the payment of money. The Indemnified Party will not settle any such Claim without the prior written consent of the Indemnifying Party. If the Indemnifying Party does not assume and conduct the defense of the Claim as provided above, (i) 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 (ii) the Indemnified Party reserves any right it may have under this Article X to obtain indemnification from the Indemnifying Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.4            Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF Article VII OR FOR INDEMNIFICATION CLAIMS UNDER THIS Article X, IN NO EVENT SHALL EITHER PARTY BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE OTHER PARTY HAD NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

Article XI

 

MISCELLANEOUS

 

11.1            Independent Contractor Relationship. Paragon’s relationship with Apogee is that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Neither Party is an agent of the other Party or authorized to make any representation, contract, or commitment on behalf of the other Party.

 

11.2            Force Majeure. Neither Party will be charged with any liability for delay or failure in performance of an obligation under this Agreement (other than any obligation to pay monies when due) to the extent such delay or failure is due to a cause beyond the reasonable control of the affected Party, such as war, riots, labor disturbances, epidemic, pandemic, fire, explosion, and compliance in good faith with any Applicable Law (in each case, a “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 to the extent such effects otherwise qualify as a Force Majeure event, even though the pandemic is ongoing and those effects may be foreseeable. In addition, a Force Majeure event may include reasonable measures affirmatively taken by a Party or its Affiliates to respond to the COVID-19 pandemic or any other pandemic (or other Force Majeure event), such as requiring employees to stay home, closures of facilities, delays of clinical trials, or cessation of activities in response to the pandemic. The Party affected by a Force Majeure will give prompt written notice to the other Party of the nature of the cause of any material delay or failure to perform, its anticipated duration and any action being taken to avoid or minimize the effect. The Party affected will use its diligent efforts to avoid or remove such causes of delay or failure to perform and to mitigate the effect of such occurrence, and will continue performance in accordance with the terms of this Agreement whenever such causes are removed. The Party affected will give prompt written notice to the other Party of such resumed performance. If any such failure or delay in a Party’s performance hereunder continues for more than [***] days, the other Party may terminate this Agreement upon written notice to the affected Party.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

11.3            Entire Agreement; Amendment. This Agreement, together with all Exhibits attached hereto, constitutes the final, complete, and exclusive agreement of the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, relating to its subject matter. This Agreement (including its Exhibits) may not be changed, modified, amended, or supplemented except by a written instrument signed by both Parties.

 

11.4            Non-Waiver. The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

 

11.5            Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable Law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

 

11.6            Assignment. Neither this Agreement nor any rights or obligations hereunder may be assigned by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent to its successor to all or substantially all of the business of such Party to which this Agreement relates, whether by merger, sale of stock, sale of assets or otherwise. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement shall be void.

 

11.7            Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may arise from time to time during the Term relating to either Party’s rights or obligations hereunder or otherwise relating to the validity, enforceability or performance of this Agreement, including disputes relating to alleged breach or termination of this Agreement but excluding any disputes relating to Article VII or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights (hereinafter, a “Dispute”). In the event of the occurrence of any Dispute, the Parties will follow the following procedures in an attempt to resolve the dispute or disagreement:

 

(a)            The Party claiming that such a Dispute exists will give notice in writing (a “Notice of Dispute”) to the other Party of the nature of the Dispute.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)            The Dispute will be referred to the then Chief Executive Officer of Paragon and the then Chief Executive Officer of Apogee who will meet no later than [***] days following the initial receipt of the Notice of Dispute and use reasonable endeavors to resolve the Dispute.

 

(c)            If, within [***] days of initial receipt of the Notice of Dispute, the Dispute has not been resolved, or if, for any reason, the meeting described in Section 11.7(b) hereof has not been held within [***] days of initial receipt of the Notice of Dispute, then the Parties agree that such Dispute will be finally resolved through binding arbitration to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules, as specifically modified by the provisions of this Section 11.7(c). The arbitration will be conducted by a panel of three arbitrators. Within [***] days after the initiation of the arbitration, each Party will nominate one person to act as arbitrator, and the two arbitrators so named will then jointly appoint the third arbitrator within [***] days of their appointment, who will serve as chairman of the panel. All three arbitrators must be independent Third Parties having at least [***] years of dispute resolution experience (which may include judicial experience) or legal or business experience in the biotech or pharmaceutical industry. If either Party fails to nominate its arbitrator, or if the arbitrators selected by the Parties cannot agree on a person to be named as chairman within such [***]-day period, JAMS will make the necessary appointments for such arbitrator(s) or the chairman. Once appointed by a Party, such Party will have no ex parte communication with its appointed arbitrator. The place of arbitration will be in Boston, Massachusetts or such other venue as the Parties may mutually agree. The arbitration proceedings and all communications with respect thereto will be in English. Any written evidence originally in another language will be submitted in English translation accompanied by the original or a true copy thereof. The arbitrators have the power to decide all matters in Dispute, including any questions of whether or not such matters are subject to arbitration hereunder. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., and judgment upon the award rendered by the arbitrators may be entered in any court having competent jurisdiction thereof. The existence, content and results of any arbitration proceedings pursuant to this Section 11.7 will be deemed the Confidential Information of both Parties.

 

(d)            Notwithstanding any provision of this Agreement to the contrary, either Party may immediately initiate litigation in any court of competent jurisdiction seeking any remedy at law or in equity, including the issuance of a preliminary, temporary or permanent injunction, to preserve or enforce its rights under this Agreement.

 

(e)            The Parties agree that any disputes relating to Article VII or disputes relating to the determination of the validity, scope, infringement, enforceability, inventorship or ownership of the Parties’ respective Intellectual Property Rights shall be subject to the exclusive jurisdiction of the state and federal courts in Boston, Massachusetts and each Party hereby submits to such jurisdiction.

 

11.8            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without reference to conflicts of laws principles.

 

 

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11.9            Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by internationally recognized express courier, by email, or by facsimile, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if delivered by express courier, the next Business Day the express courier regularly makes deliveries; or (c) if delivered by email, upon the date upon which the receipt of such email is confirmed by return email. Together with any notice provided by a Party to the other Party in accordance with this Section 11.9, the Party shall send a copy of such notice by email to the other Party.

 

If to Paragon:	Paragon Therapeutics, Inc.
	221 Crescent Street
	Building 17, Suite 102B
	Waltham, MA 02453
	Attn: President
If to Apogee:	Apogee Biologics, Inc.
	2001 Market St.
	Suite 2500
	Philadelphia, PA 19103
	Attn: President

 

11.10            Interpretation. Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (c) the word “will” shall 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 shall 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 shall be construed to include such person’s or entity’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections or Exhibits shall be construed to refer to Sections or Exhibits of this Agreement, and references to this Agreement include all Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall 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 shall 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, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “or.” The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement or have any effect on its interpretation or construction. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language, and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral, or other communications between the Parties regarding this Agreement shall be in the English language. To the extent there is any inconsistency or conflict between the terms and conditions of this Agreement and any exhibit, the terms and conditions of this Agreement will prevail.

 

 

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11.11            No Third-Party Rights. The provisions of this Agreement are for the exclusive benefit of the Parties and their successors and permitted assigns, and no other person shall have any right or claim against any Party by reason of these provisions or be entitled to enforce any of these provisions against any Party.

 

11.12            Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

11.13            Expenses. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.

 

11.14            Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns.

 

11.15            Construction. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties hereto and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

 

11.16            Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

 

 

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11.17            Performance by Affiliates. A Party may perform some or all of its obligations under this Agreement through Affiliate(s) or may exercise some or all of its rights under this Agreement through Affiliates. However, each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance as if such Party were performing such obligations itself, and references to a Party in this Agreement shall be deemed to also reference such Affiliate. In particular and without limitation, all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in Article VII, and shall be subject to the intellectual property assignment and other intellectual property provisions of Article VI as if they were the original Party to this Agreement (and be deemed included in the actual Party to this Agreement for purposes of all intellectual property-related definitions). A Party and its Affiliates shall be jointly and severally liable for their performance under this Agreement.

 

[Remainder of Page Left Intentionally Blank; Signature Page Follows]

 

 

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

 

Paragon Therapeutics, Inc.			Apogee Biologics, Inc.
By:	/s/ Evan Thompson		By:	/s/ Michael Henderson
Name:	Evan Thompson		Name:	Michael Henderson
Title:	COO		Title:	CEO
Date:	4/28/2023		Date:	4/28/2023

 

[Signature Page to License Agreement]

 

 

 

Exhibit 10.11

 

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BIOLOGICS MASTER SERVICES AGREEMENT

 

This Biologics Master Services Agreement (this “Agreement”) is dated as of June 20, 2022 (the “Effective Date”) and is between Paragon Therapeutics, Inc., a Delaware corporation, with an office at 34 Cypress Rd., Arlington, MA 02474 (“Client”) and WuXi Biologics (Hong Kong) Limited, with its registered address at Flat/RM826, 8/F Ocean Centre Harbour City, 5 Canton Road TST, Hong Kong (“Provider”), each of Client and Provider being a “Party,” and collectively the “Parties.”

 

A.        Client discovers and develops biologics.

 

B.        Provider coordinates the biologics development and manufacturing services, including those provided by certain affiliated operating companies.

 

C.        The Parties desire that Provider or its Affiliates provide services to Client on a project-by-project basis. The services for each project (the “Services”) will be provided pursuant to a separate and distinct contract (a “Work Order”) that incorporates certain terms of this Agreement.

 

The Parties therefore agree as follows:

 

1.	DEFINITIONS

 

1.1	“Affiliate” of a Person means any other Person that directly or indirectly Controls, is controlled by, or is under common Control with, the Person.

 

1.2	“Applicable Law” means all applicable laws, regulations and current Good Manufacturing Practice (cGMP) and other official guidelines and directives of any Authority relevant to the Services performed under this Agreement, and the supply, use, marketing or sale of the Product.

 

1.3	“Authority” means any government regulatory authority responsible for granting approvals for the performance of Services under this Agreement or for issuing regulations pertaining to the Manufacture and/or use of Product in the intended country of use, including the FDA.

 

1.4	“Cell Line” means the cell line that has been developed to produce a Product.

 

1.5	“Certificate of Analysis” means a certificate of analysis for testing of Specifications of a Product in a form agreed to by the Parties.

 

1.6	“Certificate of Compliance” means a document issued by WuXi Biologics attesting that a Product Batch has been manufactured in compliance with cGMP (as applicable) and that Manufacturing Batch records have been reviewed and approved by WuXi Biologics’ Quality Assurance.

 

 

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1.7	“Certificate of Testing” means a certificate for testing of selected Specifications of a Product in a form agreed by both Parties, for the selected testing performed by WuXi Biologics.

 

1.8

“Confidential Information” of a Party (the “Disclosing Party”) means all information and materials disclosed by or on behalf of the Party to the other Party (the “Receiving Party”) or its Related Persons (as defined below) in connection with this Agreement that is reasonably considered to be confidential and is not generally available to the public, and permits the Disclosing Party to obtain a business advantage over any third party(ies) that do not know or use such information. The Confidential Information of both Parties includes the existence, terms and objectives of this Agreement, and the nature of any dispute and the outcome of any arbitration proceedings arising out of or in connection with this Agreement. All data and information developed by either party relating specifically to the Products, including Cell Line validation data generated by Provider under Work Orders, constitutes Client’s Confidential Information. Confidential Information excludes:

 

(a)

information that at the time of disclosure to Receiving Party is in the public domain (through no act or omission of Receiving Party);

 

(b)

information that was known by Receiving Party prior to receipt from Disclosing Party (as proven by Receiving Party’s written records);

 

(c)

information that is disclosed to Receiving Party by a third party without an obligation of confidentiality and having the legal right to do so (as proven by Receiving Party’s written records); and

 

(d)

information that is independently developed by Receiving Party without any benefit of, and not being derived or arising from, Confidential Information.

 

1.9	“Control” over a Person means (a) owning 50% or more of the voting securities or other ownership interests of the Person or (b) having the power to direct the management or policies of the Person.

 

1.10	“Facility” means the facility(ies) of Provider identified in the applicable Work Order.

 

1.11	“FDA” means the United States Food and Drug Administration, and any successor agency having substantially the same functions.

 

1.12

“Intellectual Property” means patents and patent applications, trademarks and applications, trade names, service marks, domain names, copyrights and copyright applications and registrations, schematics, industrial models, inventions, know-how, trade secrets, computer software programs and other intangible proprietary information including Confidential Information.

 

 

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1.13	“Person” means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency thereof.

 

1.14	“Product” means the drug substance, drug product, or a part or derivative of the drug substance or drug product, that is manufactured through the Services or to be produced by a Cell Line.

 

1.15

“Specifications” means the list of tests, references to any analytical procedures and appropriate acceptance criteria which are numerical limits, ranges or other criteria for tests described in order to establish a set of criteria to which Product at any stage of Manufacture should conform to be considered acceptable for its intended use that are provided by or approved by Client, as such specifications are amended or supplemented from time to time by Client in writing.

 

2.

SERVICES

 

2.1

Work Orders. Provider shall provide the Services to Client pursuant to each Work Order that is entered into during the term of this Agreement. The preferred form of Work Order is provided in Exhibit A. Each Work Order will automatically incorporate the terms of this Agreement and be a separate and distinct agreement. If there is a contradiction between a provision of this Agreement and a Work Order, then the provision in this Agreement will take precedence unless the Work Order specifically states that it takes precedence over such named provision, in which case such precedence shall be limited in application to the Services under such Work Order.

 

2.2	Manufacturing. Both Parties will comply with the manufacturing terms in Exhibit B.

 

2.3	Affiliates

 

(a)

Provider may delegate or subcontract the Services, or any part thereof, to an Affiliate of Provider listed on Exhibit C for the provision of Services described. If the Services are provided by an Affiliate, then references to Provider in this Agreement will be deemed to be references to the Affiliate with the necessary modifications. Provider shall be liable for the performance of the Affiliate to the same extent as if the performance was that of Provider.

 

(b)

An Affiliate of a Party may enter into a Work Order instead of the Party. If a Work Order is entered into by an Affiliate, then references to the Party in this Agreement will be deemed to be references to the Affiliate with the necessary modifications. The Party shall be liable for the performance of the Affiliate to the same extent as if the performance was that of the Party.

 

 

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3.	CONTRACT PRICE; PAYMENT

 

3.1

Contract Price: Client shall pay Provider the undisputed fees in the amount and manner provided in the applicable Work Order (the “Contract Price”). The Contract Price may be charged in accordance with a lump-sum or other pricing structure as agreed by the Parties. The Contract Price will include [***].

 

3.2

Expenses. Client shall reimburse Provider for reasonable and documented expenses that are (a) authorized by Client, (b) described in the applicable Work Order, or (c) described in this Agreement, including Sections 4.4, 4.5, 5.1, 5.2, 5.3, 6.3, 7.1(b), 9.4, 12 and 13 and paragraphs 1.3 and 2.2 of Exhibit B.

 

3.3

Milestones. If a Work Order includes a payment for completion of a project stage or other milestone, then Provider shall notify Client [***] after the milestone is achieved. Client will be deemed to have agreed that the milestone was achieved unless it notifies Provider otherwise within [***] of receiving such notice. Each milestone payment is designed to reflect the fair value of the corresponding Services, and is not dependent on any other milestone unless otherwise specified in the Work Order.

 

3.4

Payment. Client shall pay undisputed amounts in each of Provider’s invoices within [***] of receipt by wire transfer to the account designated by Provider. All payments made under this Agreement and any Work Order will be made [***]. The Contract Price is exclusive of, and Client shall pay, any applicable taxes (other than taxes on Provider’s income) and other fees of any nature imposed by or under the authority of any government authority. Client may withhold any payment that the Client disputes [***] provided that Client informs Provider of such dispute within the original time for payment, in which case the Parties will meet to resolve the dispute [***].

 

3.5

No Clawbacks. Other than as agreed by the parties, under this Agreement or an applicable Work Order, the Contract Price and other payments under this Agreement and any applicable Work Order are non-cancelable and non-refundable, provided that Provider shall refund any pre-payments made for Services not performed.

 

3.6

Payment Default. In the event of an overdue undisputed amount (a “Payment Default”), interest of [***]% will accrue [***] on the overdue payment as of the date of the Payment Default. If the Payment Default is not rectified within [***] after Client’s receipt of notice of such Payment Default, then it will be deemed an incurable material breach of the applicable Work Order, and Provider may terminate the Work Order pursuant to Section 11.3(b).

 

 

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3.7

Annual Review. At [***], each Party to a Work Order may propose a prospective adjustment of the Contract Price to reflect documented changes in pricing factors including foreign exchange fluctuation, cost reductions and efficiency increases, inflation or deflation and changes in the price of raw materials. The Parties shall negotiate [***] with the aim of identifying a mutually acceptable amendment of the Work Order.

 

4.	PROVISION OF SERVICES

 

4.1	Specifications. Provider shall provide all the Services at the Facility or other facilities agreed by both parties and in accordance with the Specifications of the applicable Work Order.

 

4.2	Qualifications. Provider shall ensure that the persons that provide the Services (the “Personnel”) (a) have the appropriate skills, training and experience and (b) are bound by confidentiality obligations consistent with the terms of this Agreement.

 

4.3	Compliance. Provider shall provide the Services in compliance with Applicable Law and applicable Good Practice (“GxP”) guidelines in all material respects.

 

4.4

On-Site Monitoring. Representatives of Client may, [***], visit the facilities where the Services are provided and consult informally during such visits with appropriate Personnel in order to monitor the Services. The representatives will be bound by rules applicable to the facilities and may, [***], be prohibited from entering or only given limited access to certain areas within the facilities. Provider may require that Client or the representatives execute an agreement that regulates the representatives’ conduct during its visit. Client shall be responsible for all expenses incurred in connection with such visits (other than with respect to “for cause” audits), and all its personnel must be subject to the same level of confidentiality as in this Agreement.

 

4.5

Regulatory Inspections. Provider will permit visits and/or inspections by regulatory Authorities of any country as required by Applicable Law, and will permit Client or its agents to be present and participate in any visit or inspection by such regulatory Authority of the Facility (to the extent it relates in any way to any Product) or the manufacturing process. Provider will give as much advance notice as possible to Client of any such visit or inspection. Provider will provide Client with a redacted (only to protect confidential information of Provider’s other customers and remove the contents not related to the Client’s project ) copy of any report or other written communication received from such Authority in connection with such visit or inspection, and any written communication received from any regulatory Authority relating to the Product, the Facility (if it relates to or affects the development and/or manufacture of Product) or the manufacturing process, within [***] after receipt, and will consult with, and unless legally prohibited by regulatory Authorities, seek approval from, Client before responding to each such communication if time permits. Provider will provide Client with a copy of its final responses within [***] after submission. [***].

 

 

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4.6

Facility. Provider will not change the location of such Facility or use any additional facility for the performance of manufacturing Services under this Agreement without at least [***] prior written notice to, and prior written consent from, Client, which consent will not be unreasonably withheld or delayed (it being understood and agreed that Client may withhold consent pending satisfactory completion of a quality assurance audit and/or regulatory impact assessment of the new location or additional facility, as the case may be). Provider will maintain, [***], the Facility and all Equipment required for the Manufacture of Product in a state of repair and operating efficiency consistent with the requirements of cGMP (if applicable) and all Applicable Law. Provider will be responsible for performing all validation of the Facility, Equipment and cleaning and maintenance processes employed in the Manufacturing Process in accordance with cGMP (if applicable), Provider’s SOPs, the applicable Quality Agreement (if any), and Applicable Law. Provider will be responsible for obtaining, [***], any Facility or other licenses or permits, and any regulatory and government approvals necessary for the performance of Services by Provider under this Agreement. [***], Provider will provide Client with copies of all such approvals, and Client will have the right to use any and all information contained in such approvals in connection with regulatory approval and/or commercial development of Product.

 

5.	SOURCING OF MATERIAL

 

5.1

Materials. Provider shall, [***], purchase all materials necessary for the Services (the “Materials”). If a Material is not commercially available, then Client may elect to (a) supply, [***], the Material to Provider; or (b) amend the applicable Work Order to permit the use of a commercially available substitute. Provider shall perform the market research and propose a list of vendors in compliance with Applicable Law and applicable GxP in all material respects, [***]. Provider shall take the inventory risk of the selected materials, such as the damages to pass through materials caused by improper storage or pollutions, [***].

 

5.2

Client Materials. If a Material is to be supplied by Client (a “Client Material”), then Client shall provide the Client Material [***] and provide such information as may be required by Provider or Applicable Law concerning the stability, storage and safety requirements of the Client Material. Provider shall ensure that the Client Material will be (a) used solely for the purpose of providing the Services, (b) only distributed to Personnel on a need-to-know basis for the provision of the Services and (c) preserved and protected in a manner consistent with the specifications of the applicable Work Order and any relevant standard operating procedures or other instructions provided by Client. Client will at all times retain title to and ownership of the Client Materials, Product, any intermediates and components of Client Materials or Product, and any work in process at each and every stage of the Manufacturing Process. Provider will provide within the Facility an area or areas where the Client Materials, Product, any intermediates and components of Client Materials or Product, and any work in process are segregated and stored in accordance with the Specifications and cGMP (if applicable), and in such a way as to be able at all times during the period of the Agreement or applicable Work Order to clearly distinguish such materials from products and materials belonging to Provider, or held by it for a third party’s account. Provider will ensure that Client Materials (which are under Provider’s control), Product, any intermediates and components of Product, and any work in process are free and clear of any liens or encumbrances arising from disputes with any third party. Provider will at all times during the period of the Agreement or applicable Work Order take such measures as are required to protect the Client Materials, Product, any intermediates and components of any Client Materials or Product, and any work in process from loss, damage and theft at all stages of the Manufacturing Process. Client agrees that it is responsible to insure such items against theft, damage or loss and under no circumstances shall Provider be liable for loss or damage to any such items. The foregoing agreement does not limit the Provider’s liability for Client Materials (for clarity, such Client Materials should be specified in the applicable Work Orders) loss or damage solely resulting from Provider’s gross negligence or willful misconduct while the Services are being performed or while such Client Materials are in the Provider’s care. Provider will [***] notify Client if at any time it believes any Product or Client Materials, or any intermediates and components of any Client Materials or Product, or any work in process have been damaged, lost or stolen.

 

 

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5.3

Unused Client Materials and Other Materials. Provider shall, [***], return, destroy or otherwise dispose of unused Client Materials [***] after the earlier of (a) completion of the Services for which the Client Materials were provided, (b) termination of the applicable Work Order, or (c) receipt of written instructions from Client pertaining to its disposition. Provider may dispose of other unused Materials at its sole discretion upon [***] prior written notice to Client, and Client may elect during the [***] period to have the Client Materials transferred to Client.

 

6.

RECORDS

 

6.1

Storage for Records. All materials, data and documentation obtained or generated by Provider in the course of providing the Services, including all computerized records and files (“Records”), will be maintained in a secure area in accordance with industry standards and Applicable Law, [***]. While it is the Parties’ intent that Provider shall retain ownership of any Provider IP or Provider Confidential Information contained in the Records, the Records with exclusion of the Provider IP and Provider Confidential Information are the sole and exclusive property of Client and Client shall be able to use the Records, unencumbered, for purposes related to the Product.

 

6.2

Retention of Records. Upon termination of the applicable Work Order, Provider shall, at Client’s option, (a) destroy the Records, (b) deliver the Records to Client, or (c) retain the Records for [***] and then destroy the Records. If the Records are to be destroyed, then Provider shall give [***] notice to Client, and Client may elect during the [***] period to have the Records transferred to Client. Notwithstanding the foregoing, the Records may be retained solely to the extent as required by Applicable Law or as otherwise necessary for regulatory or insurance purposes.

 

 

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6.3

Storage for Product. All the Products shall be stored in Provider’s facilities for [***] after Provider’s issuance of a Certificate of Compliance with 1) a Certificate of Analysis (if full lot release testing is performed by Provider) or 2) a Certificate of Testing (if Client requests only selected lot release testing to be performed by Provider), as applicable, and a monthly storage fee for Products shall be charged after the [***] period. Client agrees that the commercial value and/or cost of replacement or remanufacture of any Products provided to Provider for storage is a matter that, as between Client and Provider, is within the sole and exclusive knowledge of Client. Client agrees that it is responsible to insure such items against damage or loss and shall purchase appropriate insurance to cover its Products stored in Provider’s facilities. [***]. Transportation of Product by Provider on behalf of Client shall be made at the sole risk and expense of Client, notwithstanding the use of any INCOTERMS delivery term on any waybill or other documentation relating to the transportation. Provider shall not be liable for the actions or omission of any delivery services or carriers or freight forwarders.

 

7.	INTELLECTUAL PROPERTY

 

7.1

Ownership

 

(a)

Except as otherwise provided in this Agreement, (i) Provider has no ownership rights in any Intellectual Property that is owned by Client, or licensed by any third party to Client, or any of its Affiliates, including Product, (“Client IP”) and (ii) Client has no ownership rights in any Intellectual Property that is owned by Provider, or licensed by any third party to Provider, or any of its Affiliates (“Provider IP”).

 

(b)

Provider shall ensure that each of the Personnel vests in Provider, or its applicable Affiliate, any and all rights that such person(s) might otherwise have in the Intellectual Property created or developed in connection with the provision of the Services, and all Intellectual Property relating to such inventions (excluding moral rights) (“Project IP”). Improvements, modifications, and derivatives of Client IP constitute Project IP. Provider hereby assigns and shall assign (and require its Affiliates to assign) all right, title and interest in Project IP to Client. Client will, [***], have sole control of filing and prosecuting applications for, and maintenance and enforcement of, patents for Project IP. Provider shall, [***], use [***] to assist Client to obtain, maintain and enforce the Project IP. Client shall use [***] to [***] notify Provider of any patents granted for Project IP. Provider will be responsible for all payments to be made to Personnel of Provider and its Affiliates in accordance with any Applicable Law requiring remuneration for inventions. For the avoidance of doubt, Provider has no right to file, prosecute, maintain, protect, defend, or enforce Intellectual Property claiming that covers any Product.

 

 

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(c)

Notwithstanding the foregoing, Intellectual Property created or developed in connection with the provision of the Services (i) that relates solely to Provider IP, (ii) that relates to experimental methods independent of Client IP and Project IP, or (iii) that relates to manufacturing processes generally, in each case without reliance or reference to Client IP or Project IP (collectively, “Manufacturing Improvements”) is Provider IP and not Project IP.

 

7.2	General Licenses

 

(a)

Provider acknowledges and agrees that it does not acquire a license or any other right to Client IP except for the limited purpose of carrying out its duties and obligations under this Agreement and that such limited, non-exclusive, license will expire upon the completion of such duties and obligations or the termination or expiration of this Agreement, whichever is the first to occur.

 

(b)

Provider hereby grants and shall ensure that each applicable Affiliate will grant and hereby does grant, to Client and its applicable Affiliates a non-exclusive, perpetual, irrevocable, royalty-free, non-transferable (except in the case of Section 14.2) and sublicensable (through multiple tiers) license to Client and its Affiliates to use Provider IP solely to develop, Manufacture, have Manufactured, distribute, offer for sale, sell, and otherwise dispose of Product. Provider may, at its discretion, grant to Client the right to use Manufacturing Improvements under mutually satisfactory terms to be negotiated.

 

7.3	Additional Licenses

 

In the provision of Services under this Agreement, Provider may recommend to incorporate into the process or deliverables some specific Provider IP that needs an additional license. Prior to incorporation of such IP into the process and deliverables, Provider shall submit to Client a written list of such IP, describing it in reasonable detail. Within [***] of Client’s receipt of the information noted in the preceding sentence, Client will notify Provider of its decision as to whether to incorporate such IP into the process or deliverables. Provider shall not incorporate such IP into the process or deliverables without Client’s express written consent. For any specific Provider IP included in the process or deliverables for which Provider has failed to notify Client and/or for which Client has not expressly consented to the inclusion thereof, Client’s rights to such IP shall be the same as Client’s rights in the process or deliverables. If Client agrees that some specific Provider IP may be incorporated in the process or deliverables or may be necessary for Client’s full utilization of the deliverables, both parties shall discuss in good faith regarding such license required.

 

 

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7.4

[***] License. If Client agrees to use Provider’s [***] for the manufacture of Product, then Client shall purchase from Provider a worldwide, fully paid-up, sublicensable (through multiple tiers), non-exclusive license to research, develop, make, have made, and commercialize the Product (the “License”). The terms of the License to Provider’s [***], including license fees and potential royalties, will be separately negotiated as a separate definitive agreement (“License Agreement”).

 

8.	REPRESENTATIONS AND WARRANTIES

 

8.1

Mutual. Each Party represents and warrants that (a) it validly exists under the laws of the jurisdiction in which it was organized, (b) it has the full power, right and authority to execute and deliver this Agreement and to perform its obligations under this Agreement, (c) this Agreement once executed will constitute a legal, valid and binding agreement enforceable against it and (d) its performance of this Agreement will not conflict with any obligations it may have to any other person.

 

8.2	Infringement. Client represents and warrants that, to the best of its knowledge, the use of Client Intellectual Property and Client Materials in the performance of Services in accordance with this Agreement will not infringe the Intellectual Property rights of any third party.

 

8.3

Provider Representations and Warranties. Provider represents and warrants to Client that (i) neither it nor any of the Personnel involved in the Services has been debarred, or, to the best of its knowledge, is under consideration for debarment, by the United States Food and Drug Administration from working in or providing services to any pharmaceutical or biotechnology company pursuant to the Generic Drug Enforcement Act of 1992 or any other governmental authority pursuant to analogous laws; (ii) to the best of its knowledge, the Provider IP will not violate the intellectual property rights of any third party and it will [***] notify Client in writing should it become aware of any claims asserting such violation; and (iii) at the time of delivery to Client, the Product Manufactured under this Agreement will have been Manufactured in accordance with cGMP (if applicable) and all other Applicable Law, the Manufacturing Process, the applicable Quality Agreement, and Specifications.

 

8.4

Compliance with Law. Each Party represents and warrants that it shall, and shall ensure that each of its Affiliate will, comply with all Applicable Law in connection with performance of this Agreement and any Work Orders. Each Party shall [***] notify the other Party upon becoming aware of a breach of this Section. Breach of this Section with respect to the U.S. Foreign Corrupt Practices Act or any other applicable anti-bribery law will be deemed an incurable material breach for purposes of Section 11.3(b).

 

 

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9.	INDEMNIFICATION; LIMITATION ON LIABILITY; INSURANCE

 

9.1

Third Party Claims Against Client. Provider shall defend, indemnify and hold Client and its Affiliates and its directors, officers, employees, agents and consultants and legal, financial, accounting and other advisors (“Related Persons”) harmless from and against any and all liabilities and damages (including reasonable attorneys’ fees) (“Losses”) resulting from any third party claims, demands, suits or proceedings (“Claims”) to the extent arising out of or relating to (a) its performance of the Services, (b) a material breach of this Agreement by Provider, (c) a material violation of Applicable Law by Provider or any of its Related Persons, or (d) the gross negligence, recklessness or willful misconduct of Provider or any of its Related Persons during the course of activities carried out in connection with this Agreement (except to the extent that such Losses are within the scope of the indemnification obligation of Client under Section 9.2). The indemnification obligations set forth in this Section 9.1 do not apply to the extent that the Loss arises in whole or in part from the gross negligence, recklessness or willful misconduct of Client or any of its Related Persons or Client’s material breach of this Agreement.

 

9.2

Third Party Claims Against Provider. Client shall defend, indemnify and hold Provider and its Related Persons harmless from and against any and all Losses resulting from any Claims to the extent arising out of or relating to (a) Client’s use of Project IP or deliverables produced in accordance with this Agreement and the written instructions of Client that were provided or produced under a Work Order (including use of any license under Provider IP), or Provider’s appropriate or proper use of Client Materials or Client IP provided by Client for use in the Services or due to compliance to any written instructions provided by Client for use in the Services; (b) a material breach of this Agreement by Client, (c) a material violation of Applicable Law by Client or any of its Related Persons, (d) the gross negligence, recklessness or willful misconduct of Client or any of its Related Persons during the course of activities carried out in connection with this Agreement, or (e) development or manufacture, use, handling, storage, or other disposition of Products by or on behalf of Client or any of its Affiliates, sublicensees, agents or contractors (except by Provider), including Claims and threatened Claims based on product liability, bodily injury, risk of bodily injury, death or property damage or the failure to comply with any Applicable Law; except to the extent that such Losses are within the scope of the indemnification obligation of Provider under Section 9.1. The indemnification obligations set forth in this Section 9.2 do not apply to the extent that the Loss arises in whole or in part from the negligence, recklessness or willful misconduct of Provider or any of its Related Persons, or Provider’s material breach of this Agreement.

 

9.3

Intellectual Property Claims. Client shall defend, indemnify and hold Provider and its Related Persons harmless from and against Losses resulting from Claims to the extent arising out of or related to infringement of any third party Intellectual Property rights in connection with the Services or the Product and where the infringement would not have occurred but for Provider’s reliance upon Client’s written requirements, specifications and Client IP. To the extent Claims that are based on Provider IP independent of the Services or Product under this Agreement or Provider’s breach of this Agreement, Client shall not be required to defend, indemnify, and hold Provider and its Related Persons harmless from those Losses. Provider shall defend, indemnify and hold Client and its Related Persons harmless from and against Losses resulting from Claims to the extent arising out of or related to infringement of any Intellectual Property rights related to the Services and that are based on Provider IP.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

9.4

Defense. Each Party shall notify the other Party within [***] upon learning of a Claim that is subject to indemnification pursuant to Sections 9.1, 9.2, or 9.3 (but failure to notify shall not relieve the indemnifying Party of its indemnification obligations unless such failure materially prejudices its ability to defend the claim). The indemnifying Party shall control, [***], the defense of the Claim [***] with counsel of its choice. The indemnified Party shall use [***] to cooperate in the defense at the indemnifying Party’s request and expense, and may participate in the Claim [***]. No compromise or settlement of any Claim may be made by the indemnifying Party without the indemnified Party’s written consent; provided that, if a settlement contains an absolute waiver of liability for the indemnified party, and each party has acted in compliance with the requirements of this Section 9.4, then the indemnified party’s consent will be deemed given.

 

9.5	Limitations on Liability

 

(a)

NEITHER PARTY WILL BE LIABLE UNDER ANY LEGAL THEORY (WHETHER TORT, CONTRACT OR OTHERWISE) FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, HOWEVER CAUSED, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT AS A RESULT OF A BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS, OR FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NOTHING IN THIS SECTION IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.

 

(b)

[***].

 

9.6

Insurance. Each Party shall ensure that insurance coverage is carried and maintained with a financially sound and reputable insurer against loss from such risks and in such amounts as is sufficient to support its obligations under this Agreement. Each Party shall provide a copy of the applicable insurance policy if requested by the other Party.

 

10.	CONFIDENTIALITY AND PUBLICITY

 

10.1

Confidentiality. During the term of this Agreement and for [***] thereafter (other than with respect to trade secrets, which shall remain confidential for so long as they are protected under Applicable Law), the Receiving Party shall, and shall ensure that it, its Affiliates, and its Related Persons will, (a) maintain the Confidential Information of the Disclosing Party in confidence, (b) not use the Confidential Information of the Disclosing Party other than solely in connection with this Agreement and (c) not disclose the Confidential Information of the Disclosing Party to any third party other than (i) those of its Related Persons that have a need to know the Confidential Information in connection with the Services and are obligated to maintain the Confidential Information in confidence on terms at least as strict as those contained herein, and (ii) notify the Disclosing Party of any unauthorized disclosure of its Confidential Information [***] upon becoming aware of such disclosure. Notwithstanding the foregoing, Client may disclose the existence of this Agreement and Confidential Information of Provider confidentially in connection with a potential financing or acquisition or collaboration, provided, however, Client shall be liable for the acts and consequences of such disclosure.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

10.2

Return of Confidential Information. Upon termination of this Agreement, and if requested in writing by the Disclosing Party within [***] thereafter, the Receiving Party shall cause all Confidential Information of the Disclosing Party to be [***] destroyed or returned to the Disclosing Party; provided, however, that the Receiving Party may, subject to its obligations of confidentiality hereunder, retain (a) a single secure copy of any Confidential Information for legal archival purposes, and (b) electronic back-up files that have been created by routine archiving and back-up procedures need not be deleted.

 

10.3

Publicity. Each Party shall not, and shall ensure that its Related Persons will not, use the name, symbols or marks of the other Party or any of its Affiliates in any advertising or publicity material or make any form of representation or statement that would constitute an express or implied endorsement by the other Party or any of its Affiliates of any commercial product or service, without the other Party’s or Affiliate’s prior written consent.

 

10.4

Audits. Provider and its Affiliates may have in the past provided, and may currently or in the future provide, services to other customers that are similar to the Services. Provider is absolutely committed to protecting Client’s Confidential Information and Intellectual Property, and shall not use such Confidential Information or Intellectual Property for the benefit of any person other than Client. In order to protect the Confidential Information of Client and the confidential information of other customers, Provider shall use [***] to ensure that other customers do not seek the disclosure of Confidential Information of Client, and Client hereby agrees it shall not seek the disclosure of confidential information of other customers of Provider. Notwithstanding the foregoing, if Client wishes to conduct an audit that relates to services provided to another customer for purposes of confirming that Client’s Intellectual Property is adequately protected, then Provider shall use [***] to seek the other customer’s approval to waive confidentiality obligations to the extent necessary to allow Client to conduct the audit in a manner that does not involve disclosure of the other customer’s confidential information to Client. If another customer wishes to conduct an audit that relates to the Services for purposes of confirming that the other customer’s Intellectual Property is adequately protected, then Client shall discuss whether to waive Provider’s confidentiality obligations to Client to the extent necessary to allow the other customer to conduct the audit in a manner that does not involve disclosure of Client’s Confidential Information to the other customer. Such audits may involve an independent auditor designated by Provider and paid for by the person seeking the audit.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

11.	TERM AND TERMINATION

 

11.1

Agreement. The term of this Agreement commences on the Effective Date and, unless earlier terminated pursuant to this Section 11, will expire on the later of (a) five (5) years from the Effective Date; or (b) the completion of Services under all Work Orders executed by the parties prior to the fifth anniversary of the Effective Date. The term of this Agreement may be extended by Client continuously for additional [***] periods upon written notice to Provider at least [***] prior to the expiration of the then-current term.

 

11.2

Client will have the right, in its sole discretion, to terminate this Agreement or Work Order (a) upon thirty (30) days’ prior written notice to Provider; or (b) immediately upon written notice if Provider fails to obtain or maintain any material governmental licenses or approvals required in connection with the Services. Client shall pay off Provider for the Services rendered and the non-cancellable obligations occurred prior to the termination date; provided that Provider will use good faith efforts to mitigate such non-cancellable obligations if applicable.

 

11.3

Work Orders. Work Orders are subject to the terms of this Agreement and are not affected by the termination of this Agreement unless such Work Order is terminated together with the Agreement. The term of each Work Order commences on the date indicated in the Work Order and will, unless terminated earlier in accordance with this Agreement, terminate upon completion of the Services. Notwithstanding the foregoing, either Party may terminate a Work Order:

 

(a)

at any time with six (6) months’ advance notice to the other Party, provided, however, Provider shall provide sufficient evidence to prove that there is reasonable cause to terminate the Work Order and discuss with Client in good faith prior to the termination; provided further, if Provider terminates a Work Order pursuant to this clause 11.3(a), then no termination or cancellation fees shall be paid by Client, Provider shall continue to provide Services for the irrelative Work Orders; or

 

(b)

immediately upon notice to the other Party if

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(i)

a material breach of the Work Order by the other Party remains uncured thirty (30) days after notice of the material breach was received by such other Party; or

 

(ii)

the other party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or becomes subject to involuntary proceedings under any bankruptcy or insolvency law (which proceedings remain undismissed for sixty (60) days); or

 

(iii)

a Force Majeure Event occurs that will, or continues to, prevent performance (in whole or substantial part) of this Agreement or any pending Work Order by the other party for a period of at least ninety (90) days. In the case of a Force Majeure Event relating solely to a pending Work Order, the right to terminate will be limited to such Work Order.

 

11.4

Survival. Upon termination of this Agreement or a Work Order, all outstanding rights and obligations between the Parties arising out of or in connection with this Agreement or the Work Order, as the case may be, will [***] terminate, other than any obligations that (a) matured prior to the effective date of the termination or (b) by its nature are intended to survive, including Sections 2.1, 4.2, 4.3, 4.6, 6.1, 6.2, 11.4, 11.5 and Articles 1, 7-10, 12 and 14. Provider will, upon receipt of a termination notice from Client, [***] cease performance of the applicable Services and will take all reasonable steps to mitigate the out-of-pocket expenses incurred in connection therewith. Within [***] after the close-out of a Work Order, Provider will provide to Client a written itemized statement of all work performed by it in connection with the terminated Work Order, an itemized breakdown of the payments associated with that work, and a final invoice for that Work Order. If Client has pre-paid to Provider more than the amount in a final invoice then Provider agrees to [***] refund that money to Client, or to credit the excess payment toward another existing or future Work Order, at the election of Client.

 

11.5	Termination Fee.

 

If a Work Order is terminated early by Client under Section 11. 2 or 11.3, then Client shall pay Provider for the Services rendered in accordance with the terms of this Agreement and all non-cancelable obligations in connection with the Services to the extent specified in the applicable Work Order; provided that Provider will use good faith efforts to mitigate such non-cancellable obligations.

 

(a)

If non-manufacturing Services, as specified in the applicable Work Order, are terminated by Provider due to Client’s material breach pursuant to Section 11.3(b), then Provider may charge Client a termination fee equal to [***] of the remaining value of such non-manufacturing Services within the Work Order as liquidated damages in connection with the redeployment of reserved Personnel and administrative overhead and costs.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

(b)

If manufacturing Services are terminated by Provider due to Client’s material uncured breach or at Client’s request, Client may be charged cancellation fees as specified in Section 12; If manufacturing Services (manufacturing run(s) including non-GMP manufacturing, GMP manufacturing, and engineering run) are terminated by Provider due to a Client request to cancel or due to a termination of the applicable Work Order by Provider because of Client’s uncured material breach pursuant to Section 11.3(b), Client shall be charged cancellation fees as specified in Section 12 below. If Client requests to 1) postpone or reschedule, or 2) materially change the production scale or batch size of, a manufacturing run originally scheduled under an executed Work Order or Change Order and/or this Agreement, the same cancellation terms in Section 12 will apply, provided that no cancellation fees will be charged in where such termination results from Provider’s breach of this Agreement, or its negligence or willful misconduct.

 

12.	CANCELLATION TERMS FOR MANUFACTURING SERVICES

 

12.1

Cancellation of non-GMP Drug Substance Manufacturing. If a notice to cancel a non-GMP drug substance manufacturing batch in an executed Work Order and/or this Agreement is received, Provider will make [***] to find an alternative customer or project to fill the manufacturing slot. In the case where no alternative customer or project can be identified to fill the slot(s), charges for cancelling the related work under this Agreement (“Cancellation Charge(s)”) will be applied based on the following:

 

a)

[***] except the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***] before the scheduled vial thaw;

 

b)

[***] of a non-GMP manufacturing batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***] before the scheduled vial thaw;

 

c)

[***] of a non-GMP manufacturing batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***] before the scheduled vial thaw;

 

d)

[***] of a non-GMP manufacturing batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***] prior to the scheduled vial thaw.

 

e)

[***] of a non-GMP manufacturing batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***]; and

 

f)

[***] of a non-GMP batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for such non-GMP batch, if the cancellation notice is received [***].

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

12.2

Cancellations for Drug Substance cGMP Manufacturing Run or Engineering Run. If a notice to cancel a drug substance cGMP manufacturing run or an engineering run in an executed Work Order and/or this Agreement (as the case may be) is received, Provider will use [***] to find an alternative customer or project (but excluding any project under existing contract with Provider) for the manufacturing slot. In the case where no alterative customer or project can be identified to fill the slot(s), Cancellation Charge(s) will be applied based on the following:

 

a)

[***] except the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received [***] before the scheduled vial thaw;

 

b)

[***] of the cGMP manufacturing run or engineering run batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received [***] before the scheduled vial thaw;

 

c)

[***] of the cGMP manufacturing run or engineering run batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received [***] before the scheduled vial thaw or anytime thereafter.

 

12.3

Cancellation for Drug Product cGMP Manufacturing Run or Engineering Run. If a notice to cancel a cGMP drug product manufacturing run or an engineering run in an executed Work Order and/or this Agreement (as the case may be) is received, Provider will use [***] to find an alternative customer or project but excluding any project under existing contract with Provider) to fill the manufacturing slot(s). In the case where no alternative customer or project can be identified to fill the slot(s), Cancellation Charge(s) will be applied based on the following:

 

a)

[***], except the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received [***] before the scheduled manufacturing run;

 

b)

[***] of the cGMP manufacturing run or engineering run batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received between one [***] before the scheduled manufacturing run;

 

c)

[***] of the cGMP manufacturing run or engineering run batch fee plus the cost of raw materials purchased by Provider under the applicable Work Order for purposes of such cGMP manufacturing run or engineering run, if the cancellation notice is received [***] before the scheduled manufacturing run or anytime thereafter.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

13.

SHIPPING

 

13.1

All materials to be provided by Provider to Client will be delivered FCA (carrier named by Client) (Incoterms 2020), including Product and other deliverables produced under a Work Order, returned Client Materials, returned Records and returned Confidential Information. For the avoidance of doubt, FCA (carrier named by Client) means Provider is responsible for handing over the materials, cleared for export, to a carrier named by Client. Client assumes risk at hand over and pays all costs as specified in Incoterms 2020.

 

13.2

All materials to be provided by Client to Provider will be delivered DDP (site designated by Provider) (Incoterms 2020), including Client Materials. For the avoidance of doubt, DDP (site designated by Provider) means Client is responsible for delivery to and unloading at the site designated by Provider and pays all costs including import duties and taxes.

 

14.	MISCELLANEOUS

 

14.1

Force Majeure. “Force Majeure” means and includes such circumstances or occurrences which are beyond the reasonable control of the Party that materially prevent such Party from performing any of such Party’s obligations under this Agreement (other than the payment of money), and that are not caused by the Party’s negligence, which may include, but not limited to, acts of God; pandemic(such as Covid-19), strikes and labour problems affecting an entire industry or region; lightning, fire, flood, washout, storm, or other actions of the elements; government actions, including embargos, sanctions, prohibitions; and war, civil disturbances or other imposition of sanctions by a governmental authority with jurisdiction over a Party. Neither Party shall be liable for non-fulfilment of its obligations or in breach under this Agreement if such non-fulfilment is due to Force Majeure for the duration of such Force Majeure. Each Party shall use [***] to mitigate adverse consequences in the event of such Force Majeure. A Party that is prevented from performing any of its obligations due to Force Majeure will [***] give notice to the other Party of the event and the obligations as to which performance is prevented or delayed. If a Force Majeure situation continues for more than [***], the unaffected Party may terminate any affected Work Order upon notice to the affected Party, without penalty or liability (including without limitation penalties described in Section 12).

 

14.2

Assignment; Novation. This Agreement may not be assigned by a Party without the prior written consent of the other Party; provided, however, that (i) a Party may assign this Agreement to any of its Affiliates with net worth or insurance commensurate with such Party’s obligations and sufficient capacity and personnel, without such consent, but with notice to the other Party; and (ii) Client may, without Provider’s consent, assign this Agreement (a) to a third party in connection with the transfer or sale of all or substantially all of its assets or the line of business or Product to which this Agreement relates; (b) to a successor entity or acquirer in the event of a merger, consolidation or change of control. Any purported assignment in violation of this Section is void. This Agreement binds the Parties’ successors and assigns. Notwithstanding anything to the contrary in this Agreement, upon written notice from Client that Client has executed an exclusive license as to all or substantially all of the Client’s assets or Product to which one or more Work Orders relates, Provider shall, and hereby does (and Client, by providing such notice, also shall, and hereby does): (i) novate this Agreement and the applicable Work Orders to the Client’s exclusive licensee, on a form of novation agreement provided by Client and reasonably accepted by Provider (which acceptance shall not be unreasonably withheld, conditioned, or delayed) at the time of such novation; and (ii) enter into a new agreement that is an exact copy of this Agreement and includes only those Work Orders that are not subject to the novation in clause (i).

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

14.3	Notices. All notices, requests, demands and other formal or legal communications required under this Agreement must be in writing and will be deemed to have been given or made and sufficient in all respects when delivered by reputable international courier to the following addresses:

 

To Client:

Paragon Therapeutics, Inc. 34 Cypress Rd., Arlington, MA 02474 Attn:  [***] Tel.:  [***] Email:  [***]

To Provider:

WuXi Biologics (Shanghai) Co., Ltd. Area 301-A, Building No.2, 299 Fute Zhong Road China (Shanghai) Pilot Free Trade Zone Shanghai, China 200131 Attn:  [***] Email:  [***]

 

14.4	Independent Contractor. The Parties are independent contractors, and nothing contained in this Agreement may be deemed or construed to create a partnership, joint venture, employment, franchise, agency, fiduciary or other relationship between the Parties.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

14.5

Non-Solicitation. During the term of this Agreement and for [***] thereafter, Client shall not directly or indirectly induce or solicit (or authorize or assist in the taking of any such actions by any third party) any employee or consultant of Provider or any of its Affiliates that have provided Services under this Agreement to leave his or her employment or business association. Hiring advertisements and efforts not directed at a particular individual do not constitute a solicitation in violation of this Section 14.5.

 

14.6

Governing Law. The laws of the State of New York, USA, without regard to any choice of law principle that would require the application of the law of another jurisdiction, govern all matters relating to this Agreement and the enforcement thereof. The parties expressly reject any application to this Agreement of (a) the United Nations Convention on Contracts for the International Sale of Goods; and (b) the 1974 Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April 11, 1980.

 

14.7

Arbitration. The Parties shall engage in [***] consultation to resolve any dispute arising out of or in connection with this Agreement. Such consultation will begin [***] after one Party has delivered to the other Party a request for consultation. If the dispute cannot be resolved within [***] following the date on which the request for consultation is delivered, then either Party may submit the dispute to the JAMS International Arbitration Rules (“Arbitration”). The Arbitration tribunal will consist of three arbitrators. Within [***] after the commencement of the Arbitration, each Party shall select one person to act as arbitrator, each of whom must be a practicing or retired attorney or judge having at least [***] of litigation experience within the biopharmaceutical industry. The two arbitrators so selected shall select the chair within [***] of the commencement of the Arbitration, whom must a practicing or retired attorney or judge having at least [***] of litigation experience within the biopharmaceutical industry. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator within the allotted time, the third arbitrator shall be appointed by JAMS in accordance with the JAMS International Arbitration Rules. All arbitrators shall serve as neutral, independent and impartial arbitrators. The Arbitration shall be conducted in accordance with the expedited procedures set forth in the JAMS International Arbitration Rules. The place of arbitration will be New York City. The official language of the arbitration will be English. The arbitration proceedings will be confidential, and the arbitrator may issue appropriate protective orders to safeguard each Party’s Confidential Information. During the course of arbitration, the Parties shall continue to implement the terms of this Agreement including all Work Orders then in effect. The arbitral award will be final and binding upon the Parties, and the Party to the award may apply to a court of competent jurisdiction for enforcement of the award. Notwithstanding the foregoing, each Party has the right to institute an action in a court of proper jurisdiction for injunctive or other equitable relief pending a final decision by the arbitrator.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

14.8

Entire Agreement; Non-Reliance. This Agreement, together with each Work Order, contains the entire agreement between the Parties with respect to the subject matter of this Agreement. Prior agreements are hereby superseded. For the avoidance of doubt, prior confidentiality obligations are superseded to the extent that they cover Confidential Information. Each Party disclaims that it is relying on any representations or warranties other than those set forth in this Agreement.

 

14.9	Amendment. No modification or waiver of any term of this Agreement or any other form of amendment to this Agreement will be binding unless made expressly in writing and signed by both Parties.

 

14.10

No Third Party Beneficiaries. The provisions of this Agreement are for the sole benefit of the Parties.

 

14.11

Waiver. The waiver by either Party of any breach of any term of this Agreement will not constitute a waiver of any other breach of the same or any other term. Failure or delay on the part of either Party to fully exercise any right under this Agreement will not constitute a waiver or otherwise affect in any way the same or any other right.

 

14.12

Severability. If any provision in this Agreement is held to be invalid, illegal or unenforceable in any respect, then (a) the provision will be replaced by a valid and enforceable provision that achieves as far as possible the intention of the Parties and (b) all other provisions of this Agreement will remain in full force and effect as if the original agreement had been executed without the invalidated, illegal or unenforceable provision.

 

14.13

Independent Counsel. Each Party has had the opportunity to consult independent counsel, and as such, this Agreement will not be construed to have been drafted by one Party or the other but will be construed as having been jointly drafted when interpreting its provisions.

 

14.14

Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together constitute one and the same instrument. Executed counterparts may be exchanged by facsimile or e-mail in PDF or similar electronic format.

 

[Signature page follows]

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Thus, this Agreement was executed on the date stated in the introductory clause.

 

WuXi Biologics (Hong Kong) Limited			Paragon Therapeutics, Inc.
By:	/s/ Zhislieng Chen		By:	/s/ Kenneth Evan Thompson
Name:	Zhislieng Chen		Name:	Kenneth Evan Thompson
Title:	CEO		Title:	COO

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Exhibit A—Form of Work Order

 

WORK ORDER (NUMBER [•])

 

This work order is dated [.] and is between Paragon Therapeutics, Inc. (“Client”) and [WuXi Biologics (Hong Kong) Limited](“Provider”).

 

The terms of the Biologics Master Services Agreement between Paragon Therapeutics, Inc. and WuXi Biologics (Hong Kong) Limited, dated [.] (the “Master Services Agreement”), are hereby incorporated by reference into this Work Order. Any modifications to the Master Services Agreement will be deemed to be references to this Work Order automatically. Each capitalized term used but not defined in this Work Order has the meaning given in the Master Services Agreement.

 

1.	SERVICES INFORMATION

 

1.1

Title

 

[Project title]

 

1.2	Description

 

[Description of the Services including deliverables and specifications]

 

1.3	Tasks and Timeframe. Provider shall complete the Services in accordance with the following schedule:

 

	Task	Completion Date
1
2
3
4

 

1.4	Client Materials

 

[Description of the Client Materials to be provided by Client to Provider that are necessary to perform the Services]

 

1.5	Reporting and Transfer of Data and Results

 

[Description of how data and results should be reported and transferred to Client, including electronic protocols for secure transmission of data and instructions for physical handling and shipping of materials if chemicals are being synthesized or other materials are to be transferred to Client]

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

1.6	Additional Requirements

 

[Any additional requirements such as additional obligations of the parties that do not appropriately fit into the task list and special handling of materials]

 

2.	FEES; PAYMENT SCHEDULE

 

2.1	General Terms. Expenses, milestones, payment and default and other general terms are provided in Section 3 of the Master Services Agreement.

 

2.2	Contract Price and Upfront Payment. The Contract Price will be USD [.1. On signing of this Work Order, Client shall pay Provider [.] % of the Contract Price as a non-refundable upfront payment.

 

2.3	Milestones. The table below lists milestones and related information.

 

	Milestone	Deliverable	Milestone Payment
1	[Description including work required, criteria for achievement and timeline]	[•]	[•]
2	[•]	[•]	[•]

 

2.4	Payment Instructions. Unless an invoice provides otherwise, Client shall pay the invoice in USD by wire transfer to the account listed below (as may be amended from time to time):

 

[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]		[***]			[***]
[***]	[***]	[***]	[***]	[***]	[***]

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

3.	COMMUNICATIONS

 

3.1	Technical Communications. All technical communications required under this Work Order are to be sent via reputable international courier or email and addressed as follows:

 

If to Client:	If to Provider:
[•]	[•]
[•]	[•]
[•]	[•]
Attn:  [•]	Attn:  [•]
Tel.:  [•]	Tel.:[•]
Email:  [•]	Email:  [•]

 

Thus, this Work Order is executed on the date stated in the introductory clause.

 

Paragon Therapeutics, Inc.			WuXi Biologics (Hong Kong) Limited
By:			By:
Name:			Name:
Title:			Title:

 

 

Exhibit 10.12

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

CELL LINE LICENSE AGREEMENT

 

This Cell Line License Agreement (“Agreement”), effective as of June 20, 2022 (“Effective Date”), is entered and made by and between WuXi Biologics (Hong Kong) Limited, having an address at Flat/RM826, 8/F Ocean Centre Harbour City, 5 Canton Road TST, Hong Kong (“WuXi Biologics”) and Paragon Therapeutics, Inc., a Delaware corporation, with an office at 34 Cypress Rd., Arlington, MA 02474 (“Licensee”). WuXi Biologics and Licensee may be referred to herein individually as a “Party” and collectively as the “Parties.”

 

The Parties agree as follows:

 

1.

Definitions

 

1.1

“Affiliate” of a person means any other person that directly or indirectly Controls, is Controlled by, or is under common Control with, the person.

 

1.2

“Client Product” means the [***] of interest to Licensee, which is designated by the Licensee to be produced by the Licensed Cell Line. Each different Client Product covered under this Agreement shall be specified in Appendix I. An amendment to this Agreement is required for each new Client Product produced by the Licensed Cell Line.

 

1.3

“Confidential Information” of a Party (the “Disclosing Party”) means all nonpublic scientific, technical, financial regulatory or business information and materials disclosed by or on behalf of the Disclosing Party to the other Party (the “Receiving Party”) or its Related Persons (defined below) in connection with this Agreement. Confidential information shall be identified as confidential in writing or, if disclosed verbally or by observation, summarized in writing and submitted to the Receiving Party within [***] of the oral or visual disclosure thereof; provided, however, information need not be labeled or marked “confidential” to be deemed Confidential Information hereunder, if under the circumstances it is, or should be, understood to be confidential. The Confidential Information of both Parties includes the existence, terms and objectives of this Agreement, and the nature of any dispute and the outcome of any arbitration proceedings arising out of or in connection with this Agreement.

 

 

1.4

“Construct” means a [***] developed by WuXi Biologics that is used for delivering genetic code and for transfecting and/or transforming the Host Cell Line for purposes of creating the Licensed Cell Line.

 

1.5

“Control” over an entity means (a) owning 50% or more of the voting securities or other ownership interests of such entity or (b) having the power to direct the management or policies of such entity.

 

1.6

“Drug Product” means the final dosage form which contains Client Product, in association with other active or inactive ingredients.

 

1.7

“Drug Substance” means bulk Client Product, which has not yet been packaged into its final dosage form.

 

1.8

“Host Cell Line” means the proprietary host cell line developed by WuXi Biologics, and designated by WuXi Biologics as the [***], that is used to make the Licensed Cell Line.

 

1.9

“Licensed Cell Line” means a transformed or transfected (using WuXi Biologics’ Construct(s)) version of the Host Cell Line that produces the Client Product.

 

1.10

“Licensed Know-How” means any know-how and non-public information owned or controlled by WuXi Biologics that is used or incorporated in the Process, and that is necessary or useful to operate the Process as further described in the Technology Transfer Package. The word “control” when used in connection with Licensed Know-How includes both exclusively and non-exclusively licensed know-how and non-public information, as well a right of WuXi Biologics to transfer such know-how and non-public information to Licensee. As used in this definition “know-how” means all confidential and proprietary commercial, technical, scientific and other know-how and information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, preclinical, clinical, safety, manufacturing and quality control data and know-how, and including study designs and protocols).

 

 

1.11

“Marketing Authorization Approval” means, with respect to a country or extra-national territory, any and all approvals (including a New Drug Application or Biologics License Application approved by the FDA), licenses, registrations or authorizations of any Regulatory Authority necessary in order to commercially distribute, sell or market a product in such country or some or all of such extranational territory, including any pricing or reimbursement approvals.

 

1.12

“Materials” means the biological materials, including the Licensed Cell Line, provided to Licensee pursuant to the license granted under this Agreement.

 

1.13

“Media and Feeds” means any proprietary media and feeds used in the Process.

 

1.14

“Net Sales” means the amount earned and recognized as revenue by Licensee and its Affiliates or sublicensees for bona fide sales of Client Product to a third-party ([***] ), less:

 

·

[***];

 

·

[***];

 

·

[***];

 

·

[***];

 

·

[***];

 

·

[***]; and

 

·

[***].

 

Net Sales will not include [***]. Such amounts will be determined from the books and records of [***], maintained in accordance with GAAP consistently applied.

 

 

1.15

“Process” means a process for manufacture of Client Product utilizing Licensed Know-How, Materials and Media and Feeds as described in the Technology Transfer Package.

 

1.16

“Regulatory Authority” means any applicable supranational, national, regional, state or local regulatory agency, department, bureau, commission, council, or other government entity involved in regulating development of and granting regulatory approval for a pharmaceutical product, including the FDA and EMA.

 

1.17

“Related Persons” means a Party’s Affiliates and their respective directors, officers, employees and agents.

 

1.18

“Research Cell Bank” is a [***].

 

1.19

“Technology Transfer Package” means all information and data describing the Process, together with all Licensed Know-How, Materials and Media and Feeds necessary or useful for the development and manufacture of Client Product using the Licensed Cell Line and/or the Process.

 

1.20

“Third Party” means any person other than the Parties to this Agreement.

 

1.21

“Third Party Manufacturer” means (i) a Third Party whose primary business is contract manufacturing, or (ii) a Third Party who has a contractual arrangement with Licensee or with a sublicensee of Licensee that includes manufacturing of Client Product and/or Drug Product by such Third Party for Licensee or such sublicensee.

 

 

2.

License

 

2.1

WuXi Biologics hereby grants to Licensee and its Affiliates a non-exclusive, worldwide license, with the right to grant sublicenses as provided in Section 2.3, to the Licensed Know-How and the Licensed Cell Line, Materials, and Media and Feeds, for the purpose of conducting the Process, including the following licensed activities:

 

i.

to make, have made, import, sell and otherwise use Client Product; and

 

ii.

to make, have made, use, sell, have sold, offer for sale, import, keep and otherwise deal in and further commercialize Drug Substance and Drug Product for any and all purposes.

 

2.2

The Licensee or its Affiliates may contract with a Third Party Manufacturer for the limited purpose of developing and manufacturing Client Product on behalf of the Licensee or its Affiliates, provided that, such Third Party Manufacturers are bound by the contract to comply with the confidentiality and use terms of this Agreement, and that the Licensee or its Affiliates will remain liable for any Third Party Manufacturers’ breach of this Agreement.

 

2.2.1

For the benefit of doubt, a Third Party Manufacturer cannot manufacture Client Product, Drug Substance or Drug Product utilizing the Licensed Cell Line and Licensed Know-How without first being contracted with a Licensee, its Affiliates or sublicensee.

 

2.2.2

A Third Party Manufacturer that has been granted a sublicense cannot grant, issue or transfer a sublicense to another Third Party.

 

2.3

Subject to the terms and conditions of this Agreement, Licensee shall have the right to grant sublicenses to a Third Party for the rights granted to Licensee under this Agreement. Each sublicense agreement shall be in writing and provided that the applicable sublicensee is bound by all applicable terms and conditions of this Agreement, and Licensee or its Affiliates shall remain liable for any sublicensee’s breach of this Agreement. Licensee shall inform WuXi Biologics in writing any and all such sublicenses. [***]. Licensee will notify WuXi Biologics in writing of any sublicense agreement with a sublicensee within [***] of the execution of such agreement. Any sublicense granted by Licensee to any rights licensed to it hereunder will terminate [***] upon the termination of the license by WuXi Biologics under the terms of this Agreement; provided, that such sublicensed rights will not terminate if, as of the effective date of such termination, a sublicensee is not in material default of its obligations under its sublicense agreement, and within [***] of such termination, the sublicensee agrees in writing to be bound directly to WuXi Biologics under a license agreement substantially similar to this Agreement with respect to the rights sublicensed hereunder.

 

 

2.4

Except as expressly provided in this Agreement, nothing in this Agreement shall be deemed to have granted Licensee (by implication, estoppel or otherwise) any right, title, license or other interest in or with respect to any intellectual property, Know-How or information owned or controlled by WuXi Biologics.

 

2.5

Invoicing of License fees will commence from [***].

 

3.

Transfer of Materials and Licensed Know-How

 

WuXi Biologics shall notify Licensee in writing within [***] following the date on which WuXi Biologics completes transfection of the Host Cell Line to generate the Licensed Cell Line. Thereafter, [***] upon written request and the completion of due payment by Licensee (and in any event within [***] following designation of a Third Party Manufacturer), WuXi Biologics shall disclose, make available, and conduct a full transfer, and shall cause its Affiliates to disclose, make available, and conduct a full transfer to Licensee, its Affiliates, or any one or more of its Third Party Manufacturers designated by Licensee, all Materials and Licensed Know-How, that is necessary or reasonably useful for Licensee and Third Party Manufacturers to solely develop and manufacture the Client Product. The Parties shall agree to a schedule for such transfer of the Materials and Licensed Know-How. WuXi Biologics will provide [***] assistance to enable such Third Party Manufacturer to manufacture Client Product, provided, however, it is the Third Party Manufacturer’s full responsibility to manufacture such Client Product after the transfer, WuXi Biologics will not be responsible for the Third Party Manufacturer’s success or failure to manufacture any Client Products. Initiation of such technology transfer will be determined by Licensee. WuXi Biologics will be reimbursed for such activities by Licensee on [***] rate. WuXi Biologics will provide [***] requested ongoing technical support if requested by Licensee with such support reimbursed on a [***] rate basis.

 

 

4.

License Fee

 

As consideration for the license granted in Section 2 of this Agreement, and the representation and warranty set forth in Section 10 of this Agreement, Licensee agrees to pay WuXi Biologics a fixed non-creditable, non-refundable license fee of USD 150,000 for the Licensed Cell Line used in Client Product.

 

5.

Cell Line Royalties.

 

If Licensee manufactures all of its commercial supplies of the applicable Drug Substance using manufacturing facilities other than WuXi Biologics’ or its Affiliates’ manufacturing facilities, Licensee shall pay to WuXi Biologics a Royalty of [***] on the applicable Drug Product’s global Net Sales sold by Licensee, its Affiliates, or sublicensees, paid to WuXi Biologics [***]. If Licensee manufactures part of its commercial supplies of the applicable Drug Substance using WuXi Biologics’ or its Affiliates’ manufacturing facilities, the Royalty shall be reduced accordingly on [***] basis, depending on [***]. If Licensee manufactures all of its commercial supplies of the applicable Drug Substance by WuXi Biologics or its Affiliates, no Royalty is applicable and no Royalty payment shall be due hereunder.

 

 

6.

Payment Terms

 

Licensee shall pay WuXi Biologics’ undisputed invoice(s) within [***] days of receipt by Licensee. Such payments will be made by wire transfer to the account designated by WuXi Biologics. Invoices must be submitted, and payment must be made, [***].

 

7.

Bank Account Details

 

Unless the Parties otherwise mutually agree in writing, and such mutual agreement is set forth in a particular invoice, Licensee shall pay each invoice by wire transfer to the account designated by WuXi Biologics. With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the amounts due hereunder will be expressed in U.S. dollars. With respect to Net Sales invoiced in a currency other than U.S. dollars, payments will be calculated based on standard methodologies employed by Licensee or its Affiliates or sublicensees for consolidation purposes for the [***] for which remittance is made for Royalties.

 

8.

Restriction

 

Licensee agrees that no attempt will be made by or on behalf of Licensee to modify or reverse engineer the Licensed Cell Line or attempt to reverse engineer, recreate or assemble the Construct(s). Licensee shall only use the Licensed Cell Line in the way as permitted by this Agreement and shall not use or have used the Licensed Cell Line for any purpose other than as provided hereunder, including operating the Process, the manufacture of Client Product, Drug Substance and Drug Product, and for other purposes reasonably related to securing Marketing Authorization Approval for the Client Product and/or Drug Product. Licensee shall not transfer the Licensed Cell Line to any Third Party except to a permitted sublicensee, as described in Section 2.2 above, permitted Third Party Manufacturer, or an assignee.

 

 

9.

Indemnity

 

9.1

Licensee agrees to indemnify, hold harmless and defend WuXi Biologics, its Affiliates, and their respective directors, officers, employees and agents harmless (collectively, “WuXi Indemnitees”) from and against any and all liabilities and damages (including reasonable attorneys’ fees) resulting from any and all claims from any Third Party (“Claims”) to the extent arising from the use of the Licensed Cell Line, Client Product, Drug Substance or Drug Product by Licensee; except to the extent WuXi Biologics is obligated to indemnify Licensee in accordance with Section 9.2 of this Agreement, and provided further that Licensee shall have no obligation to indemnify any such Claims that arise from WuXi Biologics’ (i) negligence or intentional misconduct in connection with the Licensed Cell Line (ii) material breach of this Agreement (including the representations and warranties set forth in Section 10); or (iii) Host Cell Line components of the Licensed Cell Line or any Media and Feeds.

 

9.2

WuXi Biologics will indemnify Licensee, its Affiliates, its sublicensees and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, “Licensee Indemnitees”), and defend and hold each of them harmless, from and against any and all Losses in connection with any and all Third-Party Claims against Licensee Indemnitees to the extent arising from or occurring as a result of: (i) the breach by WuXi Biologics of any provision of this Agreement; or (ii) any negligence or willful misconduct on the part of any WuXi Indemnitee in connection with the Host Cell Line components of the Licensed Cell Line, except in each case to the extent Licensee is obligated to indemnify WuXi Biologics in accordance with Section 9.1 of this Agreement.

 

 

9.3

Each party must notify the other party within [***] of receipt of any claims made for which the other party might be liable hereunder. The indemnifying party will have the sole right to defend, negotiate, and settle such claims. The indemnified party will be entitled to participate in the defense of such matter and to employ counsel at its expense to assist in such defense. No compromise or settlement of any Claim may be made by the indemnifying Party without the indemnified Party’s written consent; provided, however, that the indemnifying party will have final decision-making authority regarding all aspects of the defense of any claim. The party seeking indemnification will provide the indemnifying party with such information and assistance as the indemnifying party may reasonably request, at the expense of the indemnifying party.

 

9.4

Limitation of Liability. NEITHER PARTY WILL BE LIABLE UNDER ANY LEGAL THEORY (WHETHER TORT, CONTRACT OR OTHERWISE) FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, HOWEVER CAUSED, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT AS A RESULT OF A BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN SECTION 11. NOTHING IN THIS SECTION 9.4 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY.

 

 

10.

Representations and Warranties

 

10.1

WuXi Biologics represents and warrants that: (i) it is a corporation duly organized validly existing and in good standing under the laws of Hong Kong; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of WuXi Biologics; (iii) the performance of WuXi Biologics’ obligations under this Agreement will not conflict with its charter documents or result in a material breach of any agreements, contracts or other arrangements to which it is a party; (iv) WuXi Biologics will not before the termination of this Agreement enter into any agreements, contracts or other arrangements that would be materially inconsistent with its obligations under this Agreement; (v) WuXi Biologics has sufficient facilities, experienced personnel and other capabilities reasonably suited to enable it to perform its obligations under this Agreement; (vi) WuXi Biologics has the right to grant the licenses or sublicenses, as the case may be, therefor granted under this Agreement; (vii) WuXi Biologics is the sole and exclusive owner of the Licensed Know-how and Licensed Cell Line, or otherwise has the right to license the Licensed Know-how and Licensed Cell Line and grant rights to Licensee as set forth in this Agreement and during the Term of the Agreement, (viii) to the best of its knowledge, WuXi Biologics is and will remain entitled to grant to Licensee the licenses and rights specified or contemplated by this Agreement, and to the Licensed Know-How, (ix) as of the Effective Date, neither WuXi Biologics nor any of its Affiliates has received any notice challenging WuXi Biologics’ ownership or right to use the Licensed Know-How in relation to the Licensed Cell Line and, Host Cell Line component of the Licensed Cell Line, (x) to the best of WuXi Biologics’s knowledge, there are no valid grounds for any claim against WuXi Biologics or any of its Affiliates except for any claims caused by Licensee’s DNA sequence related to the Client Product incorporated into the Licensed Cell Line.

 

10.2

Licensee represents and warrants that: (i) it is a corporation duly organized validly existing and in good standing under the laws of the Commonwealth of Massachusetts; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Licensee; (iii) the performance of Licensee’s obligations under this Agreement will not conflict with its charter documents or result in a material breach of any agreements, contracts or other arrangements to which it is a party; (iv) Licensee has sufficient facilities, experienced personnel and other capabilities reasonably suited to enable it to perform its obligations under this Agreement; and (v) Licensee will not before the termination of this Agreement enter into any agreements, contracts or other arrangements that would be materially inconsistent with its obligations under this Agreement.

 

 

10.3

Disclaimer of Warranties. OTHER THAN AS PROVIDED IN THIS AGREEMENT, THE LICENSED KNOW-HOW, AND LICENSED CELL LINES ARE PROVIDED AND LICENSED TO LICENSEE “AS IS”, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT THERETO OR TO THE PRODUCTS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF THE RIGHTS LICENSED HEREUNDER, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

11.

Confidentiality

 

11.1

Subject to the exceptions listed below, during the term of this Agreement and for [***] thereafter, the Receiving Party shall, and shall ensure that its Related Persons will, (a) maintain the Disclosing Party’s Confidential Information in confidence, (b) not use such Confidential Information other than in connection with this Agreement, and (c) not disclose such Confidential Information to any Third Party other than (i) those of its Related Persons that have a need to know such Confidential Information in connection with the Activities conducted pursuant to the Agreement and are obligated to maintain such Confidential Information in confidence and (ii) to the extent required by applicable law or judicial order, or to the extent reasonably necessary to prosecute or defend litigation or arbitration in relation to this Agreement, and, in either case, only after the Receiving Party gives the Disclosing Party [***] advance written notice of such requirement and [***] with the Disclosing Party’s efforts to limit or avoid such disclosure, to seek a protective order or secure confidential treatment of the Confidential Information, and/or to seek any other remedies available to the Disclosing Party at law or in equity. Notwithstanding the foregoing, the existence of this Agreement and its non-technical terms may be disclosed confidentially in connection with a potential financing, collaboration or acquisition or in discussion with a potential acquirer of Client Product.

 

 

11.2

The Receiving Party’s obligations set forth in Section 11.1 do not apply to Confidential Information if (a) the information is public knowledge or becomes public knowledge after disclosure through no act or omission of the Receiving Party or any of its Related Persons, (b) the information can be shown by the Receiving Party to have been lawfully in its possession prior to disclosure, (c) the information was rightfully received on a non-confidential basis from a Third Party that was not obligated to maintain the information in confidence, or (d) the Receiving Party can show that equivalent information was developed independently by the Receiving Party without reference to the Disclosing Party’ Confidential Information.

 

11.3

Licensee may disclose the Confidential Information of WuXi Biologics to a Third Party for the purpose of exercising Licensee’s license rights hereunder (including disclosure to potential Third Party sublicensees), provided that Licensee shall, prior to such disclosure, ensure that each Third Party to which disclosure is to be made is made aware of the obligations contained in this Agreement and agrees to be subject to obligations of confidentiality and non-use no less onerous than those contained in this Agreement. Any breaches of the obligations of confidentiality and non-use contained in this Agreement by such Third Party shall be treated as a breach of such obligations by Licensee.

 

11.4

Notwithstanding anything to the contrary in this Agreement, a Party may disclose this Agreement and its terms, and material developments or material information generated under this Agreement, in securities filings with the U.S. Securities and Exchange Commission (or equivalent foreign agency) and any rules of stock exchanges where the Parties may be listed to the extent required by applicable law after complying with the procedure set forth in this Section 11.4. In such event, unless otherwise required to comply with applicable law, the Party seeking such disclosure will prepare a draft confidential treatment request and proposed redacted version of this Agreement to request confidential treatment for this Agreement, and the other Party will [***] give its input in a [***] in order to allow the Party seeking disclosure to file its request within the timelines proscribed by applicable laws and regulations. The Party seeking such disclosure shall exercise [***] to obtain confidential treatment of this Agreement from the U.S. Securities and Exchange Commission (or equivalent foreign agency) as represented by the redacted version reviewed by the other Party.

 

11.5

The provisions of this Section 11 shall survive termination or expiry of this Agreement.

 

 

12.

Termination

 

12.1

Voluntary Termination by Licensee.

 

Licensee shall have the right to terminate this Agreement upon at least six (6) months prior written notice to WuXi Biologics, and upon payment of all undisputed amounts due to WuXi Biologics through such termination effective date.

 

12.2

Termination for Default

 

(a)            Nonpayment. In the event Licensee fails to pay any undisputed amounts due and payable to WuXi Biologics hereunder, and fails to make such payments within thirty (30) days after receiving written notice of such failure, WuXi Biologics may terminate this Agreement [***] upon written notice to Licensee.

 

(b)            Material Breach. In the event Licensee commits a material breach of its obligation under this Agreement and fails to cure that breach within sixty (60) days after receiving written notice thereof, WuXi Biologics may terminate this Agreement [***] upon written notice to Licensee.

 

 

12.3

Termination Upon Bankruptcy. If either Party makes an assignment for the benefit of creditors, appoints or suffers appointment of a receiver or trustee over all or substantially all of its property, files a petition or commences a proceeding under any bankruptcy or insolvency act in any state or country or has any such petition or application filed against it which is not discharged within [***] of the filing thereof, then the other Party may thereafter terminate this Agreement effective [***] upon written notice to such Party. All rights and licenses granted under or pursuant to this Agreement by WuXi Biologics are, and will otherwise be deemed to be, for purposes of the relevant provisions of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), including Sections 65.11(7), 65.13(9), 72.1 and 246.1 of the BIA; and the relevant provisions of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (“CCAA”), including Sections 32(6) and 36(8) of the CCAA (the BIA and CCAA being referred to collectively as the “Insolvency Legislation”), a grant of a “right to use” “intellectual property” as used in the Insolvency Legislation. The Parties agree that Licensee and its Affiliates and sublicensees, as licensees of such rights under this Agreement, will retain and may fully exercise all of their rights and elections under the Insolvency Legislation subject to the payment of amounts provided for herein. Without limiting Licensee’s rights under the Insolvency Legislation, if WuXi Biologics becomes insolvent or makes an assignment for the benefit of its creditors or there is filed by or against it any bankruptcy, receivership, reorganization or similar proceeding pursuant to or under the Insolvency Legislation or otherwise, Licensee will be entitled to a copy of any and all information specified in the Technology Transfer Package unless WuXi Biologics, or its trustee or receiver, elects within [***] to continue to perform all of its obligations under this Agreement.

 

12.4

Expiration or termination of this Agreement for any reason will not relieve either party of any obligation accruing prior to such expiration or termination, including section 5 (Cell Line Royalties), shall survive termination or expiry of this Agreement.

 

 

13.

Miscellaneous.

 

13.1

Assignment. This Agreement may not be assigned or otherwise transferred by either Party (subject to Licensee’s right to sublicense its rights hereunder) without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that a Party may, without such consent, assign this Agreement in its entirety (a) to an Affiliate, or (b) to a Third Party in connection with a merger, acquisition, consolidation or a sale involving all or substantially all of the assets or business of such Party. Any attempted assignment or transfer in violation of this Section 13.1 shall be void.

 

13.2

Regulatory Assistance. WuXi Biologics will provide assistance to Licensee, and any sublicensee, in respect of Licensee’s or such sublicensee’s regulatory filing activities for the Client Product and/or Drug Product, at Licensee’s or such sublicensee’s reasonable cost and expense on [***] rate.

 

13.3

Governing Law. The laws of the State of New York, USA, without regard to any choice of law principle that would require the application of the law of another jurisdiction, govern all matters relating to this Agreement and the enforcement thereof. The parties expressly reject any application to this Agreement of (a) the United Nations Convention on Contracts for the International Sale of Goods; and (b) the 1974 Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April 11, 1980.

 

 

13.4

Arbitration. The parties shall engage in good faith consultation to resolve any dispute arising out of or in connection with this agreement. Such consultation will begin [***] after one party has delivered to the other party a request for consultation. If the dispute cannot be resolved [***] following the date on which the request for consultation is delivered, then either party may submit the dispute to JAMS International Arbitration Rules (“Arbitration”). The Arbitration tribunal will consist of three arbitrators. Within [***] after the commencement of the Arbitration, each Party shall select one person to act as arbitrator, each of whom must be a practicing or retired attorney or judge have at least [***] of litigation experience within the biopharmaceutical industry. The two arbitrators so selected shall select the chair within [***] of the commencement of the Arbitration, whom must a practicing or retired attorney or judge have at least [***] of litigation experience within the biopharmaceutical industry. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator within the allotted time, the third arbitrator shall be appointed by JAMS in accordance with the JAMS International Arbitration Rules. All arbitrators shall serve as neutral, independent and impartial arbitrators. (ii) The Arbitration shall be conducted in accordance with the expedited procedures set forth in the JAMS International Arbitration Rules. The place of arbitration will be Manhattan, New York. The official language of the arbitration will be English. The arbitration proceedings will be confidential, and the arbitrator may issue appropriate protective orders to safeguard each party’s Confidential Information. During the course of arbitration, the parties shall continue to implement the terms of this agreement. The arbitral award will be final and binding upon the parties, and the party to the award may apply to a court of competent jurisdiction for enforcement of the award. Notwithstanding the foregoing, each party has the right to institute an action in a court of proper jurisdiction for injunctive or other equitable relief pending a final decision by the arbitrator.

 

 

13.5

Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile, .pdf or other electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were the original signatures.

  

IN WITNESS WHEREOF, the Parties hereto have caused this AGREEMENT to be duly executed as of the Effective Date set forth above.

 

WuXi Biologics (Hong Kong) Limited			Paragon Therapeutics, Inc.
By:	/s/ Zhisheng Chen		By:	/s/ Kenneth Evan Thompson
Print Name:   Zhisheng Chen			Name:  Kenneth Evan Thompson
Title:    CEO			Title:    COO

 

 

 

 

Exhibit 10.13

 

NOVATION AGREEMENT

 

This Novation Agreement (this “Novation Agreement”) dated as of April 1, 2023 (the “Effective Date”), is entered into by and among (i) Paragon Therapeutics, Inc., a Delaware corporation with an office at 34 Cypress Rd., Arlington, MA 02474 (the “Transferor”), (ii) Apogee Therapeutics, Inc., a Delaware corporation with an office at 221 Crescent St., Building 17, Suite 102b, Waltham, MA (“Apogee”), and (iii) WuXi Biologics (Hong Kong) Limited，a Hong Kong corporation with its address at Unit 417, 4th Floor, Lippo Centre, Tower Two, No. 89 Queensway, Admiralty, Hong Kong (the “Counterparty”). All capitalized but undefined terms herein shall have the meanings ascribed to them in the Original Contract (as defined below).

 

RECITALS

 

WHEREAS, Transferor and Counterparty entered into the Original Contracts; and

 

WHEREAS, the parties desire to novate the Original Contracts to replace the Transferor with Apogee, and Counterparty wishes to consent to such novation, in each case on the terms and conditions set forth in this Novation Agreement and each party hereby consents to such novation.

 

NOW, THEREFORE, in consideration of the foregoing premises and the respective agreements, covenants and conditions herein contained, and other good and valuable consideration, Transferor, Apogee and Counterparty agree as follows:

 

1.            Contract Subject to This Novation Agreement. This Novation Agreement is entered into with reference to the contracts by and between Counterparty and the Transferor referred to in Exhibit A (the “Original Contracts”).

 

2.            Novation. As of the Effective Date, Transferor hereby assigns to Apogee all Transferor’s rights, liabilities and obligations under the Original Contracts whether arising prior to, on or subsequent to the Effective Date, and Apogee hereby accepts and assumes the assignment of all such Transferor’s rights, liabilities and obligations under the Original Contracts, and Apogee shall be bound by all of the terms of the Original Contracts in every way as if Apogee were a party to the Original Contracts. Apogee shall be and hereby is substituted for the Transferor in the Original Contract and shall acquire all the rights and become obligated to perform all the duties of the Transferor that are hereby fully assigned and delegated to Apogee.

 

3.            Release. Transferor and Counterparty hereby mutually release each other from all obligations contained in the Original Contracts and from all claims and demands whatsoever in respect of the Original Contracts whether arising prior to, on or subsequent to the Effective Date. In consideration of this novation, the Transferor shall be relieved of all obligations to perform under the Original Contracts, and shall be, and hereby is, fully relieved of any and all liability arising out of the Original Contracts. Each of Apogee and the Counterparty may enforce the Original Contracts and pursue any claims and demands under or in connection with the Original Contracts against the other with respect to matters arising before, on or after the Effective Date as though Apogee were the original party to the Original Contracts instead of the Transferor. Apogee agrees to perform any and all obligations including payment obligations of Transferor under the Original Contracts in the place of the Transferor. The obligations under the Original Contracts that Transferor has performed to the Counterparty in accordance with the Original Contracts need not be performed by Apogee to the Counterparty again. The obligations under the Original Contracts that Counterparty has performed to the Transferor in accordance with the Original Contracts need not be performed by the Counterparty to Apogee again.

 

 

4.            Governing Law. This Novation Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to its conflicts of law principles.

 

5.            Counterparts. This Novation Agreement may be executed and delivered in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be executed and delivered via facsimile, electronic signature, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.            Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Novation Agreement as of the Effective Date.

 

	Transferor:
	PARAGON THERAPEUTICS, INC.
	By:	/s/ Evan Thompson
	Print Name: Evan Thompson
	Title: COO
	Apogee:
	APOGEE THERAPEUTICS, INC.
	By:	/s/ Michael Henderson
	Print Name: Michael Henderson
	Title: CEO
	Counterparty:
	WuXi Biologics (Hong Kong) Limited
	By:	/s/ Chris Chen
	Print Name: Chris Chen
	Title: Director

   

 

EXHIBIT A

 

Original Contracts

 

A.	Biologics Master Services Agreement dated June 20, 2022

B.	Cell Line License Agreement dated June 20, 2022

C.	Work Order: PARAG-20220404 dated June 20, 2022

D.	Change Order 02: CO-02.PARAG-20220404 dated September 15, 2022

E.	Change Order 03: CO-03.PARAG-20220404 dated December 2, 2022

F.	Change Order 04: CO-04.PARAG-20220404 dated February 23, 2022

G.	Quality Agreement dated December 5, 2022

 

 

 

 

 

Exhibit 21.1

 

SUBSIDIARIES OF THE REGISTRANT

 

Name	Jurisdiction of Organization
Apogee Biologics, Inc.	Delaware

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated April 28, 2023, with respect to the consolidated financial statements of Apogee Therapeutics, LLC included in the Registration Statement (Form S-1) and related Prospectus of Apogee Therapeutics, Inc. for the registration of shares of its common stock.

 

/s/ Ernst & Young LLP

 

Boston, Massachusetts

June 22, 2023

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form S-1

(Form Type)

 

Apogee Therapeutics, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Table 1: Newly Registered Securities

 

		Security Type		Security Class Title		Fee Calculation or Carry Forward Rule				Amount Registered				Proposed Maximum Offering price Per Unit				Maximum Aggregate Offering Price(1)(2)				Fee Rate				Amount of Registration Fee
Fees to be Paid		Equity		Common Stock, par value $0.00001			457(o)				—				—			$	100,000,000				0.00011020			$	11,020.00
		Total Offering Amounts																$	100,000,000				0.00011020			$	11,020.00
		Total Fees Previously Paid																	—				—			$	0
		Total Fee Offsets																	—				—			$	0
		Net Fee Due																	—				—			$	11,020.00

 

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes shares subject to the underwriters’ option to purchase additional shares, if any.