Exhibit 3.1

 

SECOND AMENDED AND RESTATED 

CERTIFICATE OF INCORPORATION 

OF 

ARRIVENT BIOPHARMA, INC.

 

(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)

 

ArriVent BioPharma, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),

 

DOES HEREBY CERTIFY:

 

1.             That the name of this corporation is ArriVent BioPharma, Inc. and that this corporation was originally incorporated pursuant to the General Corporation Law on April 14, 2021 under the name ArriVent BioPharma, Inc.

 

2.             That the Board of Directors duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:

 

RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:

 

FIRST: The name of this corporation is ArriVent BioPharma, Inc. (the “Corporation”).

 

SECOND: The address of the registered office of the Corporation in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808; and the name of the registered agent of the Corporation in the State of Delaware is Corporation Service Company.

 

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

 

FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 368,600,500 shares of Common Stock, $0.0001 par value per share (“Common Stock”) and (ii) 288,095,239 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).

 

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

 

 

A.

COMMON STOCK

 

1.             General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

 

2.             Voting. The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Second Amended and Restated Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Amended and Restated Certificate of Incorporation or pursuant to the General Corporation Law. There shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of this Second Amended and Restated Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law.

 

B.

PREFERRED STOCK

 

150,000,000 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A Preferred Stock;” and 138,095,239 shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated “Series B Preferred Stock.” The Series A Preferred Stock and the Series B Preferred Stock shall together be referred to as the “Preferred Stock.” The Preferred Stock (and each series thereof) shall have the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. Unless otherwise indicated, references to “sections” or “subsections” in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth.

 

1.             Dividends.

 

The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in this Second Amended and Restated Certificate of Incorporation) the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock in an amount at least equal to (i) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Preferred Stock as would equal the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (B) the number of shares of Common Stock issuable upon conversion of a share of Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend, or (ii) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Preferred Stock determined by (A) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (B) multiplying such fraction by an amount equal to the Applicable Original Issue Price (as defined below); provided that, if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one (1) class or series of capital stock of the Corporation, the dividend payable to the holders of Preferred Stock pursuant to this Section 1 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Preferred Stock dividend.

 

 

The “Series A Original Issue Price” shall mean, with respect to the Series A Preferred Stock, $1.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock; and the “Series B Original Issue Price” shall mean, with respect to the Series B Preferred Stock, $1.05 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred Stock. The “Applicable Original Issue Price” shall mean the Series A Original Issue Price, in the case of the Series A Preferred Stock and the Series B Original Issue Price, in the case of the Series B Preferred Stock.

 

2.             Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

 

2.1           Preferential Payments to Holders of Series B Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and in the event of any Deemed Liquidation Event, the holders of shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to its stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, in each case before any payment shall be made to the holders of Series A Preferred Stock and Common Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the Series B Original Issue Price, plus any dividends declared but unpaid thereon, or (ii)  such amount per share as would have been payable had all shares of Series B Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Series B Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B Preferred Stock the full amount to which they shall be entitled under this Section 2.1, the holders of shares of Series B Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

 

2.2           Preferential Payments to Holders of Series A Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and in the event of any Deemed Liquidation Event, after the payment in full of the Series B Liquidation Amount, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to its stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, in each case before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the Series A Original Issue Price, plus any dividends declared but unpaid thereon, or (ii)  such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable pursuant to this sentence is hereinafter referred to as the “Series A Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series A Preferred Stock the full amount to which they shall be entitled under this Section 2.2, the holders of shares of Series A Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

 

2.3           Payments to Holders of Common Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and in the event of any Deemed Liquidation Event, after the payment in full of the Series B Liquidation Amount and the Series A Liquidation Amount, the remaining assets of the Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, the consideration not payable to the holders of shares of Preferred Stock pursuant to Section 2.1 and Section 2.2 or the remaining Available Proceeds, as the case may be, shall be distributed among the holders of shares of Common Stock, pro rata based on the number of shares held by each such holder.

 

2.4           Deemed Liquidation Events.

 

2.4.1         Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless: (i) the holders of at least fifty-five percent (55%) of the outstanding shares of Series A Preferred Stock (voting as a single series on an as-converted to Common Stock basis); and (ii) the holders of at least sixty percent (60%) of the outstanding shares of Series B Preferred Stock (voting as a single series on an as-converted to Common Stock basis) (the “Requisite Holders”) elect otherwise by written notice sent to the Corporation at least ten (10) business days prior to the effective date of any such event:

 

(a)           a merger or consolidation in which

 

(i)

the Corporation is a constituent party or

 

 

 

(ii)

a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation,

 

except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation; or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or

 

(b)           the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all of the business or assets of the Corporation and its subsidiaries taken as a whole or 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 Corporation if substantially all of the business or assets of the Corporation 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 Corporation.

 

2.4.2       Effecting a Deemed Liquidation Event.

 

(a)           The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation in such Deemed Liquidation Event shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3.

 

 

(b)           In the event of a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(ii) or 2.4.1(b), if the Corporation does not effect a dissolution of the Corporation under the General Corporation Law within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Preferred Stock no later than the ninetieth (90^th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the immediately following subclause (ii) to require the redemption of such shares of Preferred Stock, and (ii) if the Requisite Holders so request in a written instrument delivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors (as defined below) and at least one (1) of the Series B Directors (as defined below)), together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth (150^th) day after such Deemed Liquidation Event (the “Redemption Date”), to redeem all outstanding shares of Preferred Stock at a price per share equal to the Series B Liquidation Amount with respect to shares of Series B Preferred Stock, and at a price per share equal to the Series A Liquidation Amount with respect to shares of Series A Preferred Stock, in accordance with the priority established in Subsections 2.1 and 2.2 above. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds (i) are not sufficient to redeem all outstanding shares of Series B Preferred Stock, the Corporation shall redeem a pro rata portion of each holder’s shares of Series B Preferred Stock to the fullest extent of such Available Proceeds before redeeming any shares of Series A Preferred Stock, based on the respective amounts which would otherwise be payable in respect of the shares of Series B Preferred Stock to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares of Series B Preferred Stock and the shares of Series A Preferred Stock as soon as it may lawfully do so under Delaware law governing distributions to stockholders; (ii) are sufficient to redeem all outstanding shares of Series B Preferred Stock but not sufficient to redeem all outstanding shares of Series A Preferred Stock, the Corporation shall redeem a pro rata portion of each holder’s shares of Series A Preferred Stock to the fullest extent of such Available Proceeds based on the respective amounts which would otherwise be payable in respect of the shares of Series A Preferred Stock to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares of Series A Preferred Stock as soon as it may lawfully do so under Delaware law governing distributions to stockholders. The Corporation shall send written notice of the redemption (the “Redemption Notice”) pursuant to this Subsection 2.4.2(b) to each holder of Preferred Stock not less than forty (40) days prior to the Redemption Date, which notice shall state (I) the number of shares of Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice, (II) the Redemption Date and redemption price, (III) the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Subsection 4.1) and (IV) that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Preferred Stock to be redeemed. On or before the Redemption Date, each holder of shares of Preferred Stock shall surrender the certificate or certificates representing such shares (or, if such certificate has been lost, stolen or destroyed, a lost certificate affidavit) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the redemption price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. Prior to the distribution or redemption provided for in this Subsection 2.4.2(b), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event or in the ordinary course of business.

 

2.4.3        Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities to be paid or distributed to such holders pursuant to such Deemed Liquidation Event. The value of such property, rights or securities shall be determined in good faith by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors.

 

 

2.4.4        Allocation of Escrow and Contingent Consideration. In the event of a Deemed Liquidation Event pursuant to Subsection 2.4.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the “Additional Consideration”), the Merger Agreement shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2.1 through 2.3 after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Subsection 2.4.4, consideration placed into escrow or retained as holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.

 

3.             Voting.

 

3.1           General; Classes and Voting. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of this Second Amended and Restated Certificate of Incorporation, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class and on an as-converted to Common Stock basis.

 

3.2           Election of Directors. The holders of record of the shares of Series B Preferred Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation (each a “Series B Director” and, collectively, the “Series B Directors”); provided, however, for administrative convenience, the initial Series B Directors may also be appointed by the Board of Directors in connection with the approval of the initial issuance of Series B Preferred Stock without a separate action by the holders of Series B Preferred Stock. The holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation (each a “Series A Director” and, collectively, the “Series A Directors”). The holders of record of the shares of Common Stock, exclusively and as a separate class, shall be entitled to elect two (2) directors of the Corporation. Any director elected as provided in the preceding sentence may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Preferred Stock or Common Stock, as the case may be, fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Subsection 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the Preferred Stock or Common Stock, as the case may be, elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), exclusively and voting together as a single class, shall be entitled to elect the balance of the total number of directors of the Corporation. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Subsection 3.2, a vacancy in any directorship filled by the holders of any class or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or series or by any remaining director(s) elected by the holders of such class or series pursuant to this Subsection 3.2.

 

 

3.3           Preferred Stock Protective Provisions. At any time when shares of Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization, reclassification, or otherwise, do any of the following without (in addition to any other vote required by law or this Second Amended and Restated Certificate of Incorporation) the written consent or affirmative vote of the Requisite Holders, given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a single class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect:

 

3.3.1         liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger or consolidation (whether or not constituting a Deemed Liquidation Event) or any other Deemed Liquidation Event, or consent to any of the foregoing;

 

3.3.2        amend, alter or repeal any provision of this Second Amended and Restated Certificate of Incorporation or Bylaws of the Corporation in a manner that adversely affects the powers, preferences or rights of any series of the Preferred Stock;

 

3.3.3        (i) create, or authorize the creation of, or issue or obligate itself to issue shares of, or reclassify, any capital stock unless the same ranks junior to the Preferred Stock with respect to its rights, preferences and privileges, or (ii) increase the authorized number of shares of Preferred Stock or any additional class or series of capital stock of the Corporation unless the same ranks junior to the Preferred Stock with respect to its rights, preferences and privileges;

 

3.3.4        purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) redemptions of or dividends or distributions on the Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock and (iii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at no greater than the original purchase price thereof;

 

 

3.3.5        create, or authorize the creation of, or issue, or authorize the issuance of any debt security or instrument or otherwise incur new indebtedness, or create any lien or security interest (except for purchase money liens or statutory liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary course of business), or permit any subsidiary of the Corporation to take any such action, in each case, if the aggregate indebtedness of the Corporation and its subsidiaries following such action would exceed $5,000,000 in the aggregate (other than pursuant to a budget that has been approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors);

 

3.3.6        create, or hold equity interests in, any subsidiary that is not wholly-owned (either directly or through one or more other subsidiaries) by the Corporation or permit any subsidiary to create, or authorize the creation of, or issue or obligate itself to issue, any shares of any class or series of capital stock, or sell, transfer or otherwise dispose of any equity interests of any direct or indirect subsidiary of the Corporation, or 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 business or assets of such subsidiary;

 

3.3.7        increase or decrease the authorized number of directors constituting the Board of Directors or change the number of votes entitled to be cast by any director or directors on any matter;

 

3.3.8        create, adopt, amend, terminate or repeal any equity (or equity-linked) compensation plan or amend or waive any of the terms of any option or other grant pursuant to any such plan;

 

3.3.9        undertake, or authorize any action in regard to, an initial public offering of the capital stock of the Corporation or admitting the capital stock to trade on any stock exchange (whether through an underwritten initial public offering, direct listing, transaction with a “special purpose acquisition company” or otherwise), other than a Qualified IPO (as defined below), unless approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors;

 

3.3.10       enter into any transaction with any stockholder, director, officer or employee of the Corporation or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person, except for transactions resulting in payments to or by the Corporation in an aggregate amount less than $60,000 per year; or transactions made in the ordinary course of business and pursuant to reasonable requirements of the Corporation’s business and upon fair and reasonable terms that are approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors; or

 

3.3.11     enter into any agreement to do any of the foregoing.

 

 

4.             Optional Conversion.

 

The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

 

4.1           Right to Convert.

 

4.1.1        Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Applicable Original Issue Price by the Applicable Conversion Price (as defined below) in effect at the time of conversion. The “Series A Conversion Price” applicable to the Series A Preferred Stock shall initially be equal to $1.00; and the “Series B Conversion Price” applicable to the Series B Preferred Stock shall initially be equal to $1.05. The “Applicable Conversion Price” shall be equal to the Series A Conversion Price, in the case of the Series A Preferred Stock, and the Series B Conversion Price, in the case of the Series B Preferred Stock. The Applicable Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided below with respect to the Series A Preferred Stock and Series B Preferred Stock, calculated separately.

 

4.1.2        Termination of Conversion Rights. In the event of a notice of redemption of any shares of Preferred Stock pursuant to Subsection 2.4.2(b), the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the last full day preceding the date fixed for redemption, unless the redemption price is not fully paid on such redemption date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock, provided that the foregoing termination of Conversion Rights shall not affect the amount(s) otherwise paid or payable in accordance with Sections 2.1 and 2.2 to holders of Preferred Stock pursuant to such liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event.

 

4.2           Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the number of shares of Common Stock to be issued upon conversion of the Preferred Stock shall be rounded to the nearest whole share.

 

4.3           Mechanics of Conversion.

 

4.3.1       Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any number of such holder’s shares of Preferred Stock and, if applicable, any event on which such conversion is contingent and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time (i) issue and deliver to such holder of Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (iii) pay all declared but unpaid dividends on the shares of Preferred Stock converted.

 

  

4.3.2       Reservation of Shares. The Corporation shall at all times when shares of Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Second Amended and Restated Certificate of Incorporation. Before taking any action which would cause an adjustment reducing the Applicable Conversion Price below the then-applicable par value of the shares of Common Stock issuable upon conversion of the Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common Stock at such adjusted Applicable Conversion Price.

 

4.3.3       Effect of Conversion. All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

  

 

4.3.4       No Further Adjustment. Upon any such conversion, no adjustment to the Applicable Conversion Price shall be made for any declared but unpaid dividends on the Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion.

 

4.3.5       Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

 

4.4           Adjustments to Applicable Conversion Price for Diluting Issues.

 

4.4.1        Special Definitions. For purposes of this Article Fourth, the following definitions shall apply:

 

(a)           “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

 

(b)           “Series B Original Issue Date” shall mean the date on which the first share of Series B Preferred Stock was issued.

 

(c)           “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

 

(d)           “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to be issued) by the Corporation after the Series B Original Issue Date, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”):

 

(i)

as to any series of Preferred Stock, shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on such series;

 

(ii)

shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 4.5, 4.6, 4.7 or 4.8;

 

 

(iii)

shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors;

 

(iv)

shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;

 

(v)

shares of Common Stock, Options or Convertible Securities 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 Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors;

 

(vi)

shares of Common Stock, Options or Convertible Securities 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 Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors;

 

 

(vii)

shares of Common Stock, Options or Convertible Securities issued as acquisition consideration pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the business or assets or other reorganization or to a joint venture agreement, provided that such issuances are approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors; or

 

(viii)

shares of Common Stock, Options or Convertible Securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors.

 

4.4.2       No Adjustment of Applicable Conversion Price. No adjustment in the Applicable Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from the Requisite Holders agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.

 

4.4.3        Deemed Issue of Additional Shares of Common Stock.

 

(a)           If the Corporation at any time or from time to time after the Series B Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (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 Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

 

 

(b)           If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Applicable Conversion Price pursuant to the terms of Subsection 4.4.4, 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 shares of Common Stock 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 Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Applicable Conversion 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 Applicable Conversion 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 (b) shall have the effect of increasing the Applicable Conversion Price to an amount which exceeds the lower of (i) the Applicable Conversion Price in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (ii) the Applicable Conversion Price that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

 

(c)           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 Applicable Conversion Price pursuant to the terms of Subsection 4.4.4 (either because the consideration per share (determined pursuant to Subsection 4.4.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Applicable Conversion Price then in effect, or because such Option or Convertible Security was issued before the Series B Original Issue Date), are revised after the Series B Original Issue Date 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 shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Subsection 4.4.3(a)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

 

(d)           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 Applicable Conversion Price pursuant to the terms of Subsection 4.4.4, the Applicable Conversion Price shall be readjusted to such Applicable Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

 

 

(e)           If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation 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 Applicable Conversion Price provided for in this Subsection 4.4.3 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Subsection 4.4.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation 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 Applicable Conversion Price that would result under the terms of this Subsection 4.4.3 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Applicable Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

 

4.4.4       Adjustment of Applicable Conversion Price Upon Issuance of Additional Shares of Common Stock. In the event the Corporation shall at any time after the Series B Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 4.4.3), without consideration or for a consideration per share less than the Applicable Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Applicable Conversion 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 Applicable Conversion Price in effect immediately after such issuance or deemed issuance of Additional Shares of Common Stock

 

14

 

(b)           “CP₁” shall mean the Applicable Conversion Price in effect immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock;

 

(c)           “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or deemed issuance or upon conversion or exchange of Convertible Securities (including the Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);

 

 

(d)           “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued or deemed issued at a price per share equal to CP₁ (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP₁); and

 

(e)           “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.

 

4.4.5        Determination of Consideration. For purposes of this Subsection 4.4, the consideration received by the Corporation for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:

 

(a)           Cash and Property: Such consideration shall:

 

(i)

insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

 

(ii)

insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors; and

 

(iii)

in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors.

 

 

(b)           Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 4.4.3, relating to Options and Convertible Securities, shall be determined by dividing:

 

(i)

the total amount, if any, received or receivable by the Corporation 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 Corporation 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

 

(ii)

the maximum number of shares of Common Stock (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.

 

4.4.6       Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to an Applicable Conversion Price pursuant to the terms of Subsection 4.4.4, and such issuance dates occur within a period of no more than ninety (90) days from the first such issuance to the final such issuance, then, upon the final such issuance, the Applicable Conversion Price 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).

 

 

4.5           Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Series B Original Issue Date effect a subdivision of the outstanding Common Stock, the Applicable Conversion Price in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Series B Original Issue Date combine the outstanding shares of Common Stock, the Applicable Conversion Price in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

4.6           Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series B Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Applicable Conversion Price in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Applicable Conversion Price then in effect by a fraction:

 

(1)           the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

 

(2)           the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

 

Notwithstanding the foregoing (a) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Applicable Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Applicable Conversion Price shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (b) that no such adjustment shall be made if the holders of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.

 

 

4.7           Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series B Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other 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 if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.

 

4.8           Adjustment for Merger or Reorganization, etc. Subject to the provisions of Subsection 2.4, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 4.5, 4.6 or 4.7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Preferred Stock shall thereafter be convertible in lieu of the Common Stock 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 shares of Common Stock of the Corporation issuable upon conversion of one share of Preferred Stock 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 Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of the Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the Applicable Conversion 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 Stock. For the avoidance of doubt, nothing in this Subsection 4.8 shall be construed as preventing the holders of Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the Delaware General Corporation Law in connection with a merger triggering an adjustment hereunder, nor shall this Subsection 4.8 be deemed conclusive evidence of the fair value of the shares of Preferred Stock in any such appraisal proceeding.

 

4.9           Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Applicable Conversion Price pursuant to this Section 4, the Corporation 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 holder of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which the Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (1) the Applicable Conversion Price then in effect, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of Preferred Stock.

 

 

4.10         Notice of Record Date. In the event:

 

(a)           the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(b)           of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event or

 

(c)           of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

 

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up or other Deemed Liquidation Event is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation, winding-up or other Deemed Liquidation Event, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice.

 

5.             Mandatory Conversion.

 

5.1           Trigger Events. Upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least $2.10 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock), in a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $75,000,000 of gross proceeds to the Corporation and in connection with such offering the Common Stock is listed for trading on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another exchange or marketplace approved by the Board of Directors of the Corporation, including the approval of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors (a “Qualified IPO”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the Requisite Holders (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”), then (A) all outstanding shares of Preferred Stock shall automatically be converted into shares of Common Stock, at the then effective conversion ratio as calculated pursuant to Subsection 4.1.1 and (B) such shares may not be reissued by the Corporation.

 

 

5.2           Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to this Section 5. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Preferred Stock in certificated form shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Subsection 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender any certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Subsection 5.2. As soon as practicable after the Mandatory Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and (b) pay cash as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.

 

6.             Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed, converted or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of such shares of Preferred Stock following redemption, conversion or acquisition.

 

7.             Waiver. Except as otherwise set forth herein, (a) any of the rights, powers, preferences and other terms of the Series A Preferred Stock set forth herein may be waived on behalf of all holders of Series A Preferred Stock by the affirmative written consent or vote of the holders of at least 55% of the outstanding shares of Series A Preferred Stock (voting as a single series on an as-converted to Common Stock basis), and (b) any of the rights, powers, preferences and other terms of the Series B Preferred Stock set forth herein may be waived on behalf of all holders of Series A Preferred Stock by the affirmative written consent or vote of the holders of at least 60% of the outstanding shares of Series B Preferred Stock (voting as a single series on an as-converted to Common Stock basis).

 

 

8.             Notices. Any notice required or permitted by the provisions of this Article Fourth to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.

 

FIFTH: Subject to any additional vote required by this Second Amended and Restated Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

 

SIXTH: Subject to any additional vote required by this Second Amended and Restated Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation. Except as otherwise provided in the bylaws, each director shall be entitled to one (1) vote on each matter presented to the Board of Directors; provided, however, that, so long as the holders of Preferred Stock are entitled to elect a Series A Director and a Series B Director, the affirmative vote of at least one (1) of the Series A Directors and at least one (1) of the Series B Directors shall be required for the authorization by the Board of Directors of any of the matters set forth in Section 5.4 of the Investors’ Rights Agreement, dated as of December 16, 2022, by and among the Corporation and the other parties thereto, as such agreement may be amended from time to time.

 

SEVENTH: Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

 

EIGHTH: Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

 

NINTH: No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended.

 

Any amendment, repeal or modification of the foregoing provisions of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such amendment, repeal or modification.

 

 

TENTH: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.

 

Any amendment, repeal or modification of the foregoing provisions of this Article Tenth shall not (a) adversely affect any right or protection of any director, officer or agent of the Corporation existing at the time of such amended, repeal or modification, or (b) increase the liability of any director, officer, agent or person with respect to any acts or omissions of such director, officer, agent or person occurring prior to, such amendment, repeal or modification.

 

ELEVENTH: The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is 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 director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any partner, member, director, stockholder, employee, affiliate or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, the persons referred to in clauses (i) and (ii) are “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 director of the Corporation while such Covered Person is performing services in such capacity. Any repeal or modification of this Article Eleventh will only be prospective and will not affect the rights under this Article Eleventh in effect at the time of the occurrence of any actions or omissions to act giving rise to liability. Notwithstanding anything to the contrary contained elsewhere in this Second Amended and Restated Certificate of Incorporation, the affirmative vote of the Requisite Holders will be required to amend or repeal, or to adopt any provisions inconsistent with this Article Eleventh.

 

 

TWELFTH: Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or the Corporation’s certificate of incorporation or bylaws or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten (10) days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article Twelfth 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 provisions in any other circumstance and of the remaining provisions of this Article Twelfth (including, without limitation, each portion of any sentence of this Article Twelfth 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 and circumstances shall not in any way be affected or impaired thereby.

 

* * *

 

3.             That the foregoing amendment and restatement was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

 

4.             That this Second Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this Corporation’s Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.

 

 

 

IN WITNESS WHEREOF, this Second Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 16th day of December, 2022.

 

	By:	/s/Zhengbin (Bing) Yao
	Name: Zhengbin (Bing) Yao
	Title: President

 

[Signature Page to the Second Amended and Restated Certificate of Incorporation]

 

 

CERTIFICATE OF AMENDMENT OF
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ARRIVENT BIOPHARMA, INC.

 

ArriVent BioPharma, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows:

 

FIRST:          That, the name of the Corporation is ArriVent BioPharma, Inc. and its Certificate of Incorporation was initially filed in the office of the Secretary of State on April 14, 2021, and amended on May 13, 2021, and thereafter amended and restated on June 9, 2021, and further amended on July 22, 2021, and thereafter amended and restated on December 16, 2022.

 

SECOND:      That, this Amendment to the Certificate of Incorporation has been duly adopted by the directors and the stockholders of the Corporation in accordance with the provisions of Sections 228 and 242 of the DGCL.

 

THIRD:          That the Certificate of Incorporation is hereby amended by deleting the first sentence of Article FOURTH in its entirety and replacing it with the following:

 

“FOURTH:    The total number of shares of all classes of stock which the Corporation shall have the authority to issue is (i) 378,920,327 shares of Common Stock, $0.0001 par value per share (“Common Stock”); and (ii) 297,619,034 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”).”

 

That the Certificate of Incorporation is hereby further amended by deleting the first sentence of Article FOURTH Paragraph B in its entirety and replacing it with the following:

 

“B.          PREFERRED STOCK

 

150,000,000 shares of the authorized Preferred Stock of the Corporation are hereby designated "Series A Preferred Stock;" and 147,619,034 shares of the authorized and unissued Preferred Stock of the Corporation are hereby designated "Series B Preferred Stock.”

 

[Remainder of page intentionally left blank.]

 

 

The undersigned is signing this certificate as of the 22nd day of March, 2023.

 

	ARRIVENT BIOPHARMA, INC.
	By:	/s/Zhengbin (Bing) Yao
	Name: Zhengbin (Bing) Yao
	Title: President

 

 

Exhibit 3.2

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

 

OF

 

ARRIVENT BIOPHARMA, INC.

 

(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)

 

ArriVent BioPharma, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

 

The Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 14, 2021 under the name ArriVent BioPharma, Inc. and was subsequently amended on May 13, 2021. An Amended and Restated Certificate of Incorporation was filed on June 9, 2021 with the Secretary of State of the State of Delaware, which was subsequently amended on July 22, 2021. A Second Amended and Restated Certificate of Incorporation was filed on December 16, 2022 with the Secretary of State of the State of Delaware, which was subsequently amended on March 22, 2023. This Amended and Restated Certificate of Incorporation restates, integrates and further amends the Corporation’s Second Amended and Restated Certificate of Incorporation, as amended.

 

This Amended and Restated Certificate of Incorporation was duly adopted by written consent of the directors and stockholders of the Corporation in accordance with the applicable provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware.

 

The text of the Corporation’s Second Amended and Restated Certificate of Incorporation, as amended, is hereby further amended and restated to read in full as follows:

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

ARRIVENT BIOPHARMA, INC.

 

First: The name of the corporation is ArriVent BioPharma, Inc. (the “Corporation”).

 

Second: The address of the registered office of the Corporation in the State of Delaware is 251 Little Falls Drive in the City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Service Company.

 

Third: The purpose of the Corporation is to engage in any lawful act or activity or carry on any business for which corporations may be organized under the Delaware General Corporation Law or any successor statute.

 

 

Fourth:

 

A.            Designation and Number of Shares.

 

The total number of shares of all classes of stock which the Corporation shall have the authority to issue is 210,000,000 shares, consisting of 200,000,000 shares of common stock, par value $0.0001 per share (the “Common Stock”), and 10,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”).

 

The number of authorized shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock designation.

 

B.             Preferred Stock.

 

1.            Shares of Preferred Stock may be issued in one or more series at such time or times and for such consideration as the Board of Directors of the Corporation (the “Board of Directors”) may determine.

 

2.            Authority is hereby expressly granted to the Board of Directors to fix from time to time, by resolution or resolutions providing for the establishment and/or issuance of any series of Preferred Stock, the designation and number of the shares of such series and the powers, preferences and rights of such series, and the qualifications, limitations or restrictions thereof, to the fullest extent such authority may be conferred upon the Board of Directors under the Delaware General Corporation Law. Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to the Preferred Stock of any other series to the extent permitted by law.

 

C.             Common Stock.

 

1.            Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor if, as and when determined by the Board of Directors in their sole discretion, subject to provisions of law, any provision of this Restated Certificate of Incorporation, as amended from time to time, and subject to the relative rights and preferences of any shares of Preferred Stock authorized, issued and outstanding hereunder. The term “Restated Certificate of Incorporation” as used herein shall mean the Amended and Restated Certificate of Incorporation of the Corporation as amended from time to time.

 

2.            Voting. The holders of the Common Stock are entitled to one vote for each share held; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Restated Certificate of Incorporation (including any certificate of designation relating to Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Restated Certificate of Incorporation (including any certificate of designation relating to Preferred Stock).

 

 

Fifth: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

 

A.            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 authority expressly conferred upon them by statute or by this Restated Certificate of Incorporation or the Bylaws of the Corporation as in effect from time to time, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

 

B.             The directors of the Corporation need not be elected by written ballot unless the Bylaws of the Corporation so provide.

 

C.             Subject to the rights of the holders of shares of any series of Preferred Stock then outstanding, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and not by written consent.

 

D.            Special meetings of the stockholders of the Corporation may be called only by the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board. For the purposes of this Restated Certificate of Incorporation, the term “Whole Board” shall mean the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

 

Sixth:

 

A.            Subject to the rights of the holders of shares of any series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Whole Board.

 

 

B.             Subject to the rights of the holders of shares of any series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the Board of Directors of the Corporation shall be divided into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders following the initial classification of directors, the term of office of the second class to expire at the second annual meeting of stockholders following the initial classification of directors, and the term of office of the third class to expire at the third annual meeting of stockholders following the initial classification of directors. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire, other than directors elected by the holders of shares of any series of Preferred Stock under specified circumstances, shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election and until their successors are duly elected and qualified. The Board of Directors is authorized to assign members of the Board already in office to such classes as it may determine at the time the classification of the Board of Directors pursuant to this Restated Certificate of Incorporation becomes effective. Subject to the rights of the holders of shares of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law or by resolution of the Board of Directors, be filled only by a majority vote of the directors then in office even though less than a quorum, or by a sole remaining director, and not by stockholders, and directors so chosen shall serve for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been chosen expires or until such director’s successor shall have been duly elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director.

 

C.             Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

 

D.            Subject to the rights of the holders of shares of any series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time only for cause and only by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote at an election of directors, voting together as a single class.

 

Seventh: The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of a majority of the Whole Board. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation; provided, that in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by this Restated Certificate of Incorporation, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend or repeal any provision of the Bylaws of the Corporation; provided, however, that if the Board of Directors recommends that stockholders approve such adoption, amendment or repeal, such adoption, amendment or repeal shall only require, in addition to any vote of the holders of any class or series of the capital stock of the Corporation required by law or by the Restated Certificate of Incorporation, the affirmative vote of the holders of the majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

 

 

Eighth:

 

A.            Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, 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”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Paragraph C of this Article EIGHTH with respect to proceedings to enforce rights to indemnification or an advancement of expenses or as otherwise required by law, the Corporation shall not be required to indemnify or advance expenses to any such Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

 

B.             In addition to the right to indemnification conferred in Paragraph A of this Article EIGHTH, an Indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of 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 from which there is no further right to appeal that such Indemnitee is not entitled to be indemnified for such expenses under this Paragraph B or otherwise.

 

C.             If a claim under Paragraph A or B of this Article EIGHTH is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. To the fullest extent permitted by law, 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 also be entitled to be paid the expenses of prosecuting or defending such suit. In (i) 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, and (ii) 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 for indemnification set forth in the Delaware General Corporation Law. 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 the applicable standard of conduct set forth in the Delaware General Corporation Law, 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 this Article EIGHTH or otherwise shall be on the Corporation.

 

 

D.            The rights to indemnification and to the advancement of expenses conferred in this Article EIGHTH shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Corporation’s Restated Certificate of Incorporation as amended from time to time, the Corporation’s Bylaws, any agreement, any vote of stockholders or disinterested directors or otherwise.

 

E.             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 Delaware General Corporation Law.

 

F.             The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article EIGHTH with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

G.             The rights conferred upon Indemnitees in this Article EIGHTH shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee, agent or trustee and shall inure to the benefit of the Indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article EIGHTH that adversely affects any right of an Indemnitee or its successors shall be prospective only and shall not limit, eliminate or impair 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 any such amendment, alteration or repeal.

 

H.            If any word, clause, provision or provisions of this Article EIGHTH shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Article EIGHTH (including, without limitation, each portion of any section of this Article EIGHTH containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Article EIGHTH (including, without limitation, each such portion of any section of this Article EIGHTH containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

 

Ninth: No director or officer shall be personally liable to the Corporation or its stockholders for any monetary damages for breaches of fiduciary duty as a director or officer; provided that this provision shall not eliminate or limit the liability of a director or officer, to the extent that such liability is imposed by applicable law, (i) for any breach of the director’s or officer’s duty of loyalty to the Corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) with respect to a director, under Section 174 or successor provisions of the Delaware General Corporation Law; or (iv) for any transaction from which the director or officer derived an improper personal benefit. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director or officer for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. If the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. All references in this Article NINTH to a director shall also be deemed to refer to any such director acting in his or her capacity as a Continuing Director (as defined in Article ELEVENTH).

 

Tenth: The Corporation reserves the right to amend or repeal any provision contained in this Restated Certificate of Incorporation in the manner prescribed by the Delaware General Corporation Law and all rights conferred upon stockholders are granted subject to this reservation; provided that in addition to the vote of the holders of any class or series of stock of the Corporation required by law or by this Restated Certificate of Incorporation, the affirmative vote of the holders of shares of voting stock of the Corporation representing at least seventy-five percent (75%) of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to amend, alter or repeal, or adopt any provision inconsistent with, Articles FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, this Article TENTH and Articles ELEVENTH and TWELFTH of this Restated Certificate of Incorporation.

 

Eleventh: The Board of Directors is expressly authorized to cause the Corporation to issue rights pursuant to Section 157 of the Delaware General Corporation Law and, in that connection, to enter into any agreements necessary or convenient for such issuance, and to enter into other agreements necessary and convenient to the conduct of the business of the Corporation. Any such agreement may include provisions limiting, in certain circumstances, the ability of the Board of Directors of the Corporation to redeem the securities issued pursuant thereto or to take other action thereunder or in connection therewith unless there is a specified number or percentage of Continuing Directors then in office. Pursuant to Section 141(a) of the Delaware General Corporation Law, the Continuing Directors shall have the power and authority to make all decisions and determinations, and exercise or perform such other acts that any such agreement provides that such Continuing Directors shall make, exercise or perform. For purposes of this Article ELEVENTH and any such agreement, the term “Continuing Directors” shall mean (1) those directors who were members of the Board of Directors of the Corporation at the time the Corporation entered into such agreement and any director who subsequently becomes a member of the Board of Directors, if such director’s nomination for election to the Board of Directors is recommended or approved by the majority vote of the Continuing Directors then in office or (2) such members of the Board of Directors designated in, or in the manner provided in, such agreement as Continuing Directors.

 

 

Twelfth:

 

A.            Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware does not have subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the Corporation, to the Corporation or the Corporation’s stockholders, (iii) any action or proceeding asserting a claim against the Corporation or any current or former director, officer or other employee of the Corporation arising out of or pursuant to any provision of the Delaware General Corporation Law or this Restated Certificate of Incorporation or the Bylaws of the Corporation (in each case, as they may be amended from time to time), (iv) any action or proceeding to interpret, apply, enforce or determine the validity of this Restated Certificate of Incorporation or the Bylaws (including any right, obligation, or remedy thereunder); (v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; or (vi) any action asserting a claim governed by the internal affairs doctrine against the Corporation or any director, officer or other employee of the Corporation, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. This Section A of Article TWELFTH shall not apply to actions brought to enforce a duty or liability created by the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any claim for which the federal courts have exclusive jurisdiction.

 

B.             Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.

 

Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article TWELFTH.

 

[Remainder of page intentionally left blank.]

 

 

IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of the Certificate of Incorporation of this Corporation, and which has been duly adopted in accordance with Sections 242 and 245 of the Delaware General Corporation Law, has been duly executed by its duly authorized President and Chief Executive Officer this day of [●].

 

	ARRIVENT BIOPHARMA, INC.
	By:
	Name:	Zhengbin (Bing) Yao
	Title:	President and Chief Executive Officer

 

 

Exhibit 3.3 

 

ARRIVENT BIOPHARMA, INC.

 

SECOND AMENDED AND RESTATED BYLAWS

 

Adopted as of December 16, 2022

 

Table of Contents

 

		Page(s)
ARTICLE I	STOCKHOLDERS	1
Section 1.	Annual Meeting	1
Section 2.	Special Meetings	1
Section 3.	Notice of Meetings	1
Section 4.	Quorum	2
Section 5.	Organization	2
Section 6.	Conduct of Business	2
Section 7.	Proxies and Voting	2
Section 8.	Action without Meeting	3
Section 9.	Stock List	3
ARTICLE II	BOARD OF DIRECTORS	3
Section 1.	Number, Election, Tenure and Qualification	3
Section 2.	Vacancies and Newly Created Directorships	3
Section 3.	Resignation and Removal	3
Section 4.	Regular Meetings	4
Section 5.	Special Meetings	4
Section 6.	Quorum	4
Section 7.	Action by Consent	4
Section 8.	Participation in Meetings by Electronic Communications Equipment	4
Section 9.	Conduct of Business	5
Section 10.	Powers	5
Section 11.	Compensation of Directors	5
ARTICLE III	COMMITTEES	6
Section 1.	Committees of the Board of Directors	6
Section 2.	Conduct of Business	6
ARTICLE IV	OFFICERS	6
Section 1.	Enumeration	6
Section 2.	Election	6
Section 3.	Qualification	7
Section 4.	Tenure and Removal	7
Section 5.	Chairman of the Board	7
Section 6.	President and Chief Executive Officer	7
Section 7.	Vice Presidents	7
Section 8.	Treasurer and Assistant Treasurers	7
Section 9.	Secretary and Assistant Secretaries	8
Section 10.	Bond	8
Section 11.	Action with Respect to Securities of Other Corporations	8
ARTICLE V	STOCK	8
Section 1.	Certificates of Stock	8
Section 2.	Transfers of Stock	8
Section 3.	Record Date	9
Section 4.	Lost, Stolen or Destroyed Certificates	9
Section 5.	Regulations	9
Section 6.	Interpretation	9

 

 

ARTICLE VI	NOTICES	10
Section 1.	Notices	10
Section 2.	Waiver of Notice	10
ARTICLE VII	INDEMNIFICATION	10
Section 1.	Actions other than by or in the Right of the Corporation	10
Section 2.	Actions by or in the Right of the Corporation	11
Section 3.	Success on the Merits	11
Section 4.	Specific Authorization	11
Section 5.	Advance Payment	11
Section 6.	Non-Exclusivity	11
Section 7.	Insurance	12
Section 8.	Continuation of Indemnification and Advancement of Expenses	12
Section 9.	Severability	12
Section 10.	Intent of Article	12
ARTICLE VIII	CERTAIN TRANSACTIONS	12
Section 1.	Transactions with Interested Parties	12
Section 2.	Quorum	13
ARTICLE IX	MISCELLANEOUS	13
Section 1.	Facsimile and Electronic Signatures	13
Section 2.	Reliance upon Books, Reports and Records	13
Section 3.	Fiscal Year	13
Section 4.	Time Periods	13
ARTICLE X	AMENDMENTS	13

 

 

ARTICLE I

STOCKHOLDERS

 

Section 1.      Annual Meeting.

 

An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held each year at ten o’clock a.m. or such other time as is determined by the Board of Directors, on such date (other than a Saturday, Sunday or legal holiday) as is determined by the Board of Directors and at such place as the Board of Directors shall each year fix. If no date for the annual meeting is fixed or said meeting is not held on the date determined as provided above, there may be action by written consent of the stockholders on matters to be voted on at the annual meeting, and such written consent shall have for the purposes of these Second Amended and Restated Bylaws (as the same may be amended from time to time, the “Bylaws”) or otherwise all the force and effect of an annual meeting.

 

Section 2.      Special Meetings.

 

Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors authorized. Special meetings of the stockholders may be held at such place within or without the State of Delaware as may be stated in such resolution. Only the purposes specified in the notice of special meeting shall be considered or dealt with at such special meeting.

 

Section 3.      Notice of Meetings.

 

Written notice of the place (unless such meeting is to be held solely by means of remote communication), date, and time of all meetings of the stockholders, the record date for determining the stockholders entitled to vote at such meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and the means of remote communication, if any, shall be given in conformity with Article VI of these Bylaws, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation (as amended from time to time, the “Certificate of Incorporation”)).

 

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place or means of remote communication, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place (unless such meeting is to be held solely by means of remote communication), date, means of remote communication, if any, and time of the adjourned meeting shall be given in conformity with Article VI of these Bylaws. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

 

 

Section 4.      Quorum.

 

At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required, a majority of the shares of such class or classes present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.

 

If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.

 

Section 5.      Organization.

 

The Chairman of the Board of Directors or, in their absence, such person as the Board of Directors may have designated or, in their absence, the chief executive officer of the Corporation or, in their absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman of the meeting appoints.

 

Section 6.      Conduct of Business.

 

The Chairman of the Board of Directors or their designee or, if neither the Chairman of the Board nor their designee is present at the meeting, then a person appointed by a majority of the Board of Directors, shall preside at, and act as chairman of, any meeting of the stockholders. The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting and the conduct of discussion as they deem to be appropriate.

 

Section 7.      Proxies and Voting.

 

At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting or by a transmission permitted by Section 212(c) of the Delaware General Corporation Law provided that no proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period or is irrevocable and coupled with an interest.

 

Each stockholder shall have one vote for every share of stock entitled to vote which is registered in their name on the record date for the meeting, except as otherwise provided in the Certificate of Incorporation, herein or as required by law.

 

All voting, including on the election of directors but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote their proxy, a vote by ballot shall be taken.

 

Except as otherwise provided in the terms of any class or series of preferred stock of the Corporation, all elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast.

 

 

Section 8.      Action without Meeting.

 

Any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be (i) signed and dated by the holders of 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 and (ii) delivered to the Corporation within sixty (60) days of the earliest dated consent by delivery to its registered office in the State of Delaware (in which case delivery shall be by hand or by certified or registered mail, return receipt requested), its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

 

Section 9.      Stock List.

 

A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in their name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting during ordinary business hours for a period of at least ten (10) days prior to the meeting, (i) at the principal place of business of the corporation or (ii) on a reasonably accessible electronic network, provided that the information required to gain access to such list is specified in the notice of the meeting.

 

The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder throughout the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. In the event that the list is made available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

 

ARTICLE II
BOARD OF DIRECTORS

 

Section 1.      Number, Election, Tenure and Qualification.

 

Except as otherwise specified in the Certificate of Incorporation, the number of directors which shall constitute the whole board shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting or at any special meeting of stockholders. The directors shall be elected at the annual meeting or at any special meeting of the stockholders, except as provided in Section 2 of this Article, and each director elected shall hold office until their successor is elected and qualified, unless sooner displaced. Directors need not be stockholders. Directors shall have one vote on all matters to be voted upon by the Board of Directors.

 

Section 2.      Chairman of the Board.

 

The Board of Directors may appoint from its members a Chairman of the Board, who need not be an employee or officer of the Corporation.  If the Board of Directors appoints a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors.  The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and stockholders at which they are present.

 

Section 3.      Vacancies and Newly Created Directorships.

 

Subject to the rights of the holders of any class or series of preferred stock of the Corporation to elect directors, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the directors then in office, though less than a quorum, or the sole remaining director. No decrease in the number of authorized directors constituting the Board of Directors shall shorten the term of any incumbent director.

 

 

Section 4.      Resignation and Removal.

 

Any director may resign at any time upon notice in writing or by electronic transmission to the Corporation at its principal place of business or to the chief executive officer or secretary. 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 director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, unless otherwise specified by law or the Certificate of Incorporation.

 

Section 5.      Regular Meetings.

 

Regular meetings of the Board of Directors shall be held at such place or places, 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 written notice of each regular meeting shall not be required.

 

Section 6.      Special Meetings.

 

Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors, if any, the President, the Treasurer, the Secretary or one or more of the directors then in office and shall be held at such place, on such date, and at such time as they shall fix. Notice of the place (unless such meeting is to be held solely by means of remote communication), date, time of each such special meeting and means of remote communication, if any, shall be given each director by whom it is not waived by mailing written notice not less than three (3) days before the meeting or by notice given orally or by electronic transmission, given not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

 

Section 7.      Quorum.

 

At any meeting of the Board of Directors, a majority of the total number of members of the Board of Directors shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.

 

Section 8.      Action by Consent.

 

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 of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or, in the case of electronic transmission, copies thereof, are filed with the minutes of proceedings of the Board or committee thereof.

 

Section 9.      Participation in Meetings by Electronic Communications Equipment.

 

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of telephone or video conference or similar 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 10.      Conduct of Business.

 

At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law.

 

Section 11.      Powers.

 

The Board of Directors may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power:

 

(1)

To declare dividends from time to time in accordance with law;

 

(2)

To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

 

(3)

To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, to borrow funds and guarantee obligations, and to do all things necessary in connection therewith;

 

(4)

To remove any officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being;

 

(5)

To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents;

 

(6)

To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine;

 

(7)

To adopt from time to time such insurance, retirement, and other benefit plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; and,

 

(8)

To adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation’s business and affairs.

 

Section 12.      Compensation of Directors.

 

Directors, as such, may receive, pursuant to a resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board of Directors.

 

 

ARTICLE III

COMMITTEES

 

Section 1.      Committees of the Board of Directors.

 

The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, 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 amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation’s property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these Bylaws. Any committee so designated may exercise the power and authority of the Board of Directors to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide. In the absence or disqualification of any member of any committee and any alternate member in their place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at such meeting in the place of the absent or disqualified member.

 

Section 2.      Conduct of Business.

 

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the committee members shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. Members of any such committee may participate in any committee meeting by means of conference telephone or similar communication 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.

 

ARTICLE IV
OFFICERS

 

Section 1.      Enumeration.

 

The officers of the Corporation shall be the President and Chief Executive Officer, the Treasurer, the Secretary and such other officers as the Board of Directors or the Chairman of the Board may determine, including, but not limited to, the Chairman of the Board of Directors, one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries.

 

Section 2.      Election.

 

The Chairman of the Board, if any, the President and Chief Executive Officer, the Treasurer and the Secretary shall be elected annually by the Board of Directors at their first meeting following the annual meeting of the stockholders. The Board of Directors or such officer of the Corporation as it may designate, if any, may, from time to time, elect or appoint such other officers as they may determine, including, but not limited to, one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries.

 

 

Section 3.      Qualification.

 

No officer need be a stockholder. The Chairman of the Board, if any, and any Vice Chairman appointed to act in the absence of the Chairman, if any, shall be elected by and from the Board of Directors, but no other officer need be a director. Two or more offices may be held by any one person. If required by vote of the Board of Directors, an officer shall give bond to the Corporation for the faithful performance of their duties, in such form and amount and with such sureties as the Board of Directors may determine. The premiums for such bonds shall be paid by the Corporation.

 

Section 4.      Tenure and Removal.

 

Each officer elected or appointed by the Board of Directors shall hold office until the first meeting of the Board of Directors following the next annual meeting of the stockholders and until their successor is elected or appointed and qualified, or until they die, resign, are removed or become disqualified, unless a shorter term is specified in the vote electing or appointing said officer. Each officer appointed by an officer designated by the Board of Directors to elect or appoint such officer, if any, shall hold office until their successor is elected or appointed and qualified, or until they die, resign, are removed or become disqualified, unless a shorter term is specified by any agreement or other instrument appointing such officer. Any officer may resign by giving written notice in conformity with Article VI of these Bylaws of their resignation to the Chairman of the Board, if any, the President and Chief Executive Officer, or the Secretary, or to the Board of Directors at a meeting of the Board, and such resignation shall become effective at the time specified therein. Any officer may be removed from office with or without cause by vote of a majority of the directors. Any officer appointed by an officer or committee designated by the Board of Directors to elect or appoint such officer, if any, may be removed with or without cause by such officer or committee, as applicable.

 

Section 5.      President and Chief Executive Officer.

 

The President and Chief Executive Officer shall, subject to the control and direction of the Board of Directors, have and perform such powers and duties as may be prescribed by these Bylaws or from time to time be determined by the Board of Directors.

 

Section 6.      Vice Presidents.

 

The Vice Presidents, if any, in the order of their election, or in such other order as the Board of Directors may determine, shall have and perform the powers and duties of the President (or such of the powers and duties as the Board of Directors may determine) whenever the President is absent or unable to act. The Vice Presidents, if any, shall also have such other powers and duties as may from time to time be determined by the Board of Directors.

 

Section 7.      Treasurer and Assistant Treasurers.

 

The Treasurer shall, subject to the control and direction of the Board of Directors, have and perform such powers and duties as may be prescribed in these Bylaws or be determined from time to time by the Board of Directors. All property of the Corporation in the custody of the Treasurer shall be subject at all times to the inspection and control of the Board of Directors. Unless otherwise voted by the Board of Directors, each Assistant Treasurer, if any, shall have and perform the powers and duties of the Treasurer whenever the Treasurer is absent or unable to act, and may at any time exercise such of the powers of the Treasurer, and such other powers and duties, as may from time to time be determined by the Board of Directors.

 

 

Section 8.      Secretary and Assistant Secretaries.

 

The Board of Directors shall appoint a Secretary and, in their absence, an Assistant Secretary. The Secretary or, in their absence, any Assistant Secretary, shall attend all meetings of the directors and shall record all votes of the Board of Directors and minutes of the proceedings at such meetings. The Secretary or, in their absence, any Assistant Secretary, shall notify the directors of their meetings, and shall have and perform such other powers and duties as may from time to time be determined by the Board of Directors. If the Secretary or an Assistant Secretary is elected but is absent from any meeting of directors, a temporary secretary may be appointed by the directors at the meeting.

 

Section 9.      Bond.

 

If required by the Board of Directors, any officer shall give the Corporation a bond in such sum and with such surety or sureties and upon such terms and conditions as shall be satisfactory to the Board of Directors, including without limitation a bond for the faithful performance of the duties of his office and for the restoration to the Corporation of all books, papers, vouchers, money and other property of whatever kind in their possession or under his control and belonging to the Corporation.

 

Section 10.      Action with Respect to Securities of Other Corporations.

 

Unless otherwise directed by the Board of Directors, the President and Chief Executive Officer, the Treasurer or any officer of the Corporation authorized by the President and Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

 

ARTICLE V

STOCK

 

Section 1.      Certificates of Stock.

 

Each stockholder shall be entitled to a certificate of the capital stock of the Corporation in such form as may from time to time be prescribed by resolution of the Board of Directors. Each holder of stock represented by certificates shall be entitled to have such certificate signed by, or in the name of the Corporation by any two authorized officers of the Corporation. Such signatures may be by facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have 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 2.      Transfers of Stock.

 

Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of this Article of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor.

 

 

Section 3.      Record Date.

 

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, to consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights or 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 on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, more than ten (10) days after the date on which the record date for any stockholder consent without a meeting is established, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, (i) the record date for determining stockholders entitled to notice of or 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, (ii) the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in Delaware, to its principal place of business, or to an officer or agent of the Corporation having custody of the Corporation’s minute books, and (iii) the record date for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

 

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

Section 4.      Lost, Stolen or Destroyed Certificates.

 

In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

 

Section 5.      Regulations.

 

The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

 

Section 6.      Interpretation.

 

The Board of Directors shall have the power to interpret all of the terms and provisions of these Bylaws, which interpretation shall be conclusive.

 

 

ARTICLE VI

NOTICES

 

Section 1.      Notices.

 

Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder or director shall be in writing and shall in every instance be effectively given, if delivered (i) by hand, when delivered to the recipient (ii) by courier service or when deposited in the mail, postage paid, when delivered to the recipient’s address as it appears on the records of the Corporation, (iii) by facsimile transmission, when sent to the recipient’s number, and in the case of notice to any stockholder, to a number at which such stockholder has consented to receive notice, and (iv) by electronic mail, when sent to the recipient’s electronic mail address unless, in the case of notice to any stockholder, such stockholder has notified the Corporation in writing or by electronic transmission of an objection to receiving notice by electronic mail. Any notice to any stockholder by electronic mail shall include a prominent legend that the communication is an important notice regarding the Corporation.

 

Notwithstanding the foregoing, a notice may not be given by an electronic transmission from and after the time that (i) the Corporation is unable to deliver by such electronic transmission two consecutive notices and (ii) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to discover such inability shall not invalidate any meeting or other action.

 

Section 2.      Waiver of Notice.

 

Whenever notice is required to be given under any provision of 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 of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such waiver. Attendance of a director or stockholder at a meeting without protesting prior thereto or at its commencement the lack of notice shall also constitute a waiver of notice by such director or stockholder.

 

ARTICLE VII

INDEMNIFICATION

 

Section 1.      Actions other than by or in the Right of the Corporation.

 

The Corporation (i) shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that they are or were a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise and (ii) may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that they are or were an employee or agent of the Corporation, in either case, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with such action, suit or proceeding if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceedings, had no reasonable cause to believe their conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which they reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that their conduct was unlawful.

 

 

Section 2.      Actions by or in the Right of the Corporation.

 

The Corporation (i) shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that they are or were a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust, or other enterprise and (ii) may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that they are or were an employee or agent of the Corporation, in either case, against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Delaware or such other court shall deem proper.

 

Section 3.      Success on the Merits.

 

To the extent that any person described in Section 1 or Section 2 of this Article has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in said Sections, or in defense of any claim, issue or matter therein, they shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by them in connection therewith.

 

Section 4.      Specific Authorization.

 

Any indemnification under Section 1 or Section 2 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of any person described in said Sections is proper in the circumstances because they have met the applicable standard of conduct set forth in said Sections. Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders of the Corporation.

 

Section 5.      Advance Payment.

 

Expenses (including attorneys’ fees) incurred in defending any civil, criminal, administrative, or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of any person described in said Section to repay such amount if it shall ultimately be determined that they are not entitled to indemnification by the Corporation as authorized in this Article.

 

Section 6.      Non-Exclusivity.

 

The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article shall not be deemed exclusive of any other rights to which those provided indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

 

 

Section 7.      Insurance.

 

The Board of Directors may authorize, by a vote of the majority of the full board, the Corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against them and incurred by them in any such capacity, or arising out of their status as such, whether or not the corporation would have the power to indemnify them against such liability under the provisions of this Article.

 

Section 8.      Continuation of Indemnification and Advancement of Expenses.

 

The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

 

Section 9.      Severability.

 

If any word, clause or provision of this Article or any award made hereunder shall for any reason be determined to be invalid, the provisions hereof shall not otherwise be affected thereby but shall remain in full force an effect.

 

Section 10.      Intent of Article.

 

The intent of this Article is to provide for indemnification and advancement of expenses to officers and directors of the Corporation the fullest extent permitted by Section 145 of the General Corporation Law of Delaware. To the extent that such Section or any successor section may be amended or supplemented from time to time, this Article shall be amended automatically and construed so as to permit indemnification and advancement of expenses of directors and officers of the Corporation to the fullest extent from time to time permitted by law.

 

ARTICLE VIII

CERTAIN TRANSACTIONS

 

Section 1.      Transactions with Interested Parties.

 

No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction or solely because the votes of such director or officer are counted for such purpose, if:

 

(a)            The material facts as to their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

 

 

(b)           The material facts as to their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

 

(c)            The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders.

 

Section 2.      Quorum.

 

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

 

ARTICLE IX

MISCELLANEOUS

 

Section 1.      Facsimile and Electronic Signatures.

 

In addition to the provisions for use of facsimile or electronic signatures elsewhere specifically authorized in these Bylaws, facsimile and electronic signatures of any officer or officers of the Corporation may be used to the maximum extent permitted by applicable law.

 

Section 2.      Reliance upon Books, Reports and Records.

 

Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of their 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 3.      Fiscal Year.

 

Except as otherwise determined by the Board of Directors from time to time, the fiscal year of the Corporation shall end on the last day of December of each year.

 

Section 4.      Time Periods.

 

In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

 

ARTICLE X
AMENDMENTS

 

These Bylaws may be amended, rescinded or repealed by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the Certificate of Incorporation, at any meeting of the stockholders or of the Board of Directors, provided notice of the proposed change was given in the notice of the meeting or, in the case of a meeting of the Board of Directors, in a notice given not less than two (2) days prior to the meeting.

 

 

 

Exhibit 3.4

 

ARRIVENT BIOPHARMA, INC.

 

AMENDED AND RESTATED BYLAWS

 

(Effective as of [●])

 

ARTICLE I - STOCKHOLDERS

 

Section 1.       Annual Meeting.

 

An annual meeting of the stockholders of ArriVent BioPharma, Inc. (the “Corporation”), for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, 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, in its sole discretion, determine that the meeting shall be postponed, rescheduled or canceled and, if held, shall not be held at any place but instead shall be held solely by means of remote communication as provided under the General Corporation Law of the State of Delaware (as hereafter amended from time to time, the “Delaware General Corporation Law”).

 

Section 2.       Special Meetings.

 

Special meetings of the stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the Authorized Board or by the Chair of the Board of the Corporation (the “Chair of the Board”). For the purposes of these Restated Bylaws (hereinafter referred to herein as these “Bylaws”), the term “Authorized Board” shall mean the total number of authorized directors whether or not there exist any vacancies on the Board of Directors. Special meetings of the stockholders may be held at such place within or without the State of Delaware as may be stated in such resolution. The Board of Directors or the Chair of the Board calling the meeting pursuant to such resolution may, in its, his or her sole discretion, determine that the meeting shall not be held at any place, but instead shall be held solely by means of remote communication as provided under the Delaware General Corporation Law.

 

Section 3.       Notice of Meetings.

 

Notice of the place, if any, date, and time of all meetings of the stockholders, 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, shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning hereinafter as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation, as amended and restated from time to time).

 

 

When a meeting is adjourned to another place, if any, date or time, 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 announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date originally designated for the meeting in the notice, or if a new record date is fixed for the adjourned meeting, notice of the place, if any, date, and time of the adjourned 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 adjourned meeting, shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

 

Section 4.       Quorum.

 

At any meeting of the stockholders, the holders of a majority of the voting power of all of the shares of the stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law or by rules of any stock exchange upon which the Corporation’s securities are listed. Where a separate vote by a class or classes is required, a majority of the voting power of the shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.

 

If a quorum shall fail to attend any meeting, the chair of the meeting may adjourn the meeting to another place, if any, date, or time.

 

Section 5.       Organization and Conduct of Business.

 

The Chair of the Board of Directors or, in his or her absence, the Vice Chair of the Board, if any, or in the absence of the Chair of the Board and the Vice Chair of the Board, if any, the Chief Executive Officer of the Corporation or, in his or her absence, the President of the Corporation or, in his or her absence, such person as the Board of Directors may have designated, shall call to order any meeting of the stockholders and shall preside at and act as chair of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chair of the meeting appoints. The Board of Directors may adopt, by resolution, such rules, regulations and procedures for the conduct of business at any meeting of the stockholders, as the Board of Directors determines appropriate. Subject to such rules, regulations and procedures, the chair of any meeting of the stockholders is empowered to adopt rules, regulations and procedures and to do all acts the chair of the meeting determines appropriate for the proper conduct of the meeting. Such rules, regulations and procedures, whether adopted by the Board of Directors or the chair of the meeting, may include, without limitation, (a) the establishment of an agenda and the order of business to be conducted at the meeting (b) rules, regulations and procedures for maintaining order at the meeting, (c) limitations on the attendance at and participation in any meeting of the stockholders by any person other than stockholders and their properly appointed proxyholders, (d) restriction on entry to the meeting after its scheduled commencement, and (e) limitations on the allotment of time for comments and questions at the meeting. The chair of any meeting of the stockholders shall be empowered to interpret any such rules, regulations and procedures and their applicability at such meeting, which interpretations shall be conclusive. Subject to any such rules, regulations and procedures, the chair of any meeting of the stockholders shall determine the order of business and the procedures at the meeting. Unless and only to the extent determined by the Board of Directors or the chair of the meeting, rules of parliamentary procedure shall not be required for any meeting of the stockholders. The chair of any meeting of the stockholders shall have the power to adjourn the meeting to another place, if any, date and time, whether or not there is a quorum. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be determined by the chair of the meeting and announced at the meeting prior to the opening of the polls.

 

 

Section 6.       Nominations and Stockholders Business.

 

A.            Annual Meetings of Stockholders.

 

Nominations of persons for election to the Board of Directors and the proposal of business to be considered and acted upon by the stockholders may be made at an annual meeting of the stockholders (1) pursuant to the Corporation’s notice of meeting or proxy materials with respect to such meeting, (2) by or at the direction of the Board of Directors or (3) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 6 and on the record date for determination of stockholders entitled to vote at such meeting, who is entitled to vote at the meeting and who complies timely with the notice procedures set forth in this Section 6.

 

B.             Special Meetings of Stockholders.

 

Only such business shall be conducted at a special meeting of the stockholders as shall have been included in the notice of meeting given pursuant to Section 2 above. The notice of such special meeting shall include the purpose for which the meeting is called. Nominations of persons for election to the Board of Directors may be made at a special meeting of the stockholders at which directors are to be elected (1) by or at the direction of the Board of Directors or, (2) provided that the Board of Directors has determined that directors will be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this Section 6, who shall be entitled to vote at the meeting and who complies timely with the notice procedures set forth in this Section 6.

 

C.             Certain Matters Pertaining to Nominations and Stockholders Business.

 

(1)                For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (3) of paragraph A of this Section 6 or a special meeting pursuant to paragraph B of this Section 6, (1) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (2) such other business must otherwise be a proper matter for stockholder action under the Delaware General Corporation Law, (3) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice, as that term is defined in subclause (v) of clause (c) of subparagraph 1 of this paragraph C, such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any such proposal or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder or beneficial owner, and must, in either case, have included in such materials the Solicitation Notice and, (4) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section 6, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 6.

 

 

To be timely, a stockholder’s notice pertaining to an annual meeting shall be received by the Secretary of the Corporation at the principal executive offices of the Corporation not less than ninety (90) or more than one-hundred and twenty (120) days prior to the first anniversary of the date of the preceding year’s annual meeting of stockholders (the “Anniversary”); provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after the Anniversary, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one-hundred and twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholder’s notice for an annual meeting or a special meeting shall set forth and include:

 

(a)            as to each person whom the stockholder proposes to nominate for election or reelection as a director:

 

(i)               the name, age, business address and, if known to the stockholder, residential address;

 

(ii)              the principal occupation or employment;

 

(iii)             all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected);

 

(iv)            a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three (3) years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the Securities Act of 1933, as amended, if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant;

 

 

(v)              to the extent known by the stockholder or the beneficial owner, the name and address of any other securityholder of the Corporation who owns, beneficially or of record, any securities of the Corporation and who supports any nominee proposed by such stockholder or beneficial owner; and

 

(vi)             with respect to each nominee for election or reelection to the Board of Directors, a completed and signed questionnaire, representation and agreement required by paragraph D of this Section 6.

 

(b)            as to any business (other than a proposed nomination for election as a director) that the stockholder or beneficial owner proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, including the text of any resolution or resolutions proposed for consideration and action, the reasons for conducting such business at the meeting, any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and, to the extent known by the stockholder, the name and business address and residential address of any other securityholder of the Corporation who owns, beneficially or of record, any securities of the Corporation and who supports any matter such stockholder or beneficial owner intends to propose; and

 

(c)            as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:

 

(i)               the name and address of such stockholder, as they appear on the Corporation’s books, and the business address and, if known by the stockholder, the residential address of such beneficial owner;

 

(ii)              (A) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (B) any option, warrant, convertible security, restricted stock unit, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder and such beneficial owner, if any, and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder and beneficial owner, if any, has a right to vote any shares of any security of the Corporation, (D) any short interest in any security of the Corporation (for purposes of these Bylaws, a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (E) any rights to dividends on the shares of the Corporation owned beneficially and of record by such stockholder that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, or held, directly or indirectly, by a limited liability company in which such stockholder is a member or manager or directly or indirectly owns in interest in such member or manager, and (G) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than ten (10) days after the record date for the meeting to disclose such ownership as of the record date; provided, however, that if such date is after the date of the meeting, not later than the day prior to the meeting);

 

 

(iii)             any other information relating to such stockholder and beneficial owner, if any, which would be required to be disclosed in a proxy statement or any other filing required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Regulation 14A under the Exchange Act and the rules and regulations promulgated thereunder;

 

(iv)            a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and beneficial owner, if any; and

 

(v)             a statement whether or not either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of a proposal, at least the percentage of the Corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a percentage of the Corporation’s voting shares that such stockholder or beneficial owner reasonably believes to be sufficient to elect such nominee or nominees, a majority of the Corporation’s outstanding voting shares being conclusively reasonably sufficient (an affirmative statement of such intent being referred to herein as a “Solicitation Notice”).

 

 

(2)                Notwithstanding anything in the second sentence of subparagraph C(1) of this Section 6 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least fifty-five (55) days prior to the Anniversary (or, if the annual meeting is held more than thirty (30) days before or thirty (30) days after the Anniversary, at least fifty-five (55) days prior to such annual meeting), a stockholder’s notice required by this Section 6 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary at the principal executive office of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

 

(3)                In the event the Corporation calls a special meeting of the stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by subparagraph C(1) of this Section 6 shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the one hundred twentieth (120th) day prior to such special meeting nor later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

 

D.             General.

 

(1)                Only such persons who are nominated in accordance with the procedures set forth in this Section 6 shall be eligible to serve as directors and only such business shall be conducted at a meeting of the stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 6. Except as otherwise provided by law or these Bylaws, the chair of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance herewith, to declare that such defective proposed nomination or business shall be disregarded.

 

(2)                For purposes of this Section 6, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or successor entity or comparable national news service or in a document publicly filed by the Corporation with the U.S. Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

 

(3)                Notwithstanding the foregoing provisions of this Section 6, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 6 shall be deemed to affect any rights (i) of the stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred stock of the Corporation to elect directors under specified circumstances.

 

 

(4)                In addition to the requirements set forth elsewhere in these Bylaws, to be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver, in accordance with the time periods prescribed for delivery of notice under subparagraph (C)(1) of this Section 6, to the Secretary of the Corporation at the principal executive offices of the Corporation a completed and signed questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (B) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (iii) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with, applicable law and all applicable publicly disclosed corporate governance, code of conduct and ethics, conflict of interest, corporate opportunities, trading and any other policies and guidelines of the Corporation applicable to its directors.

 

(5)                Notwithstanding the foregoing provisions of this Section 6, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of the stockholders of the Corporation to make his, her or its nomination or propose any other matter, such nomination shall be disregarded and such other proposed matter shall not be transacted, even if proxies in respect of such vote have been received by the Corporation. For purposes of this Section 6, to be considered a “qualified representative” of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of the stockholders, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the commencement of the meeting of the stockholders.

 

 

Section 7.       Proxies and Voting.

 

At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 7 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

 

All voting, including on the election of directors but excepting where otherwise required by law, may be by voice vote. Any vote not taken by voice shall be taken by ballots, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. The Corporation may, and to the extent required by law, shall, in advance of any meeting of the stockholders, appoint one or more inspectors of election to act in such capacity at the meeting and make a written report thereof. The chair of the meeting may designate one or more persons as alternate inspectors to replace any inspector of election who is unavailable or fails to act in such capacity. Each inspector of election, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector of election with strict impartiality and according to the best of his or her ability. A director, officer or employee of the Corporation may serve as an inspector of election or an alternate. Every vote taken by ballots shall be counted by the duly appointed inspector or inspectors of election.

 

Except as otherwise provided in the terms of any class or series of preferred stock of the Corporation, all elections at any meeting of the stockholders shall be determined by a plurality of the votes cast, and except as otherwise required by law, these Bylaws or the rules of any stock exchange upon which the Corporation’s securities are listed, all other matters determined by stockholders at a meeting shall be determined by a majority of the votes cast affirmatively or negatively.

 

Section 8.       Action Without Meeting.

 

Any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by written consent.

 

 

Section 9.       Stock List.

 

A complete list of the stockholders entitled to vote at any meeting of the stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder for a period of at least ten (10) days prior to the meeting in the manner provided by law.

 

The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. Such list shall presumptively determine the identity of the stockholders entitled to examine such stock list and to vote at the meeting and the number of shares held by each of them.

 

ARTICLE II - BOARD OF DIRECTORS

 

Section 1.       General Powers, Number, Election, Tenure, Qualification and Chair.

 

A.            The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors.

 

B.             Subject to the rights of the holders of shares of any series of preferred stock of the Corporation then outstanding to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the Authorized Board.

 

 

C.             The Chair of the Board and any Vice Chair of the Board appointed to act in the absence of the Chair of the Board, if any, shall be elected by and from the Board of Directors. The Chair of the Board shall preside at all meetings of the Board of Directors and stockholders at which he or she is present and shall have such authority and perform such duties as may be prescribed by these Bylaws or from time to time be determined by the Board of Directors.

 

Section 2.       Vacancies and Newly Created Directorships.

 

Subject to the rights of the holders of shares of any series of preferred stock of the Corporation then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise required by law or by resolution of the Board of Directors, be filled only by a resolution of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director and not by the stockholders, and directors so chosen shall serve for a term expiring at the next annual meeting of the stockholders or until such director’s successor shall have been duly elected and qualified. No decrease in the authorized number of directors shall shorten the term of any incumbent director. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law, may exercise the powers of the full Board of Directors until the vacancy is filled.

 

Section 3.       Resignation and Removal.

 

Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation at its principal place of business or to the Chair of the Board, Chief Executive Officer, President or Secretary of the Corporation. 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. Subject to the rights of the holders of shares of any series of preferred stock of the Corporation then outstanding, any director, or the entire Board of Directors, may be removed from office at any time only for cause and only by the affirmative vote of the holders of at least seventy five percent (75%) of the voting power of all of the then outstanding shares of the Corporation then entitled to vote at an election of directors, voting together as a single class.

 

Section 4.       Regular Meetings.

 

Regular meetings of the Board of Directors shall be held at such place or places, 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 5.       Special Meetings.

 

Special meetings of the Board of Directors may be called by the Chair of the Board of Directors or, in his or her absence, by the Vice Chair of the Board, if any, and shall be called by the Secretary if requested by a majority of the Authorized Board, and shall be held at such place, on such date, and at such time as he or she or they shall fix. Notice of the place, date, and time of each such special meeting shall be given to each director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or orally, by telegraph, telex, cable, telecopy or electronic transmission given not less than twenty four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business of the Board of Directors may be transacted at a special meeting of the Board of Directors.

 

Section 6.       Quorum.

 

At any meeting of the Board of Directors, a majority of the total number of the Authorized Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, the Chair of the Board, if present, or a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.

 

Section 7.       Action by Consent.

 

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 may be taken without notice and without a meeting, if all members of the Board consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

Section 8.       Participation in Meetings by Conference Telephone.

 

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of the Board of Directors of such a committee, as the case may be, 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 9.       Conduct of Business.

 

At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Chair of the Board or, in his or her absence, the Vice Chair of the Board, if any, or as the Board of Directors in the absence of both of them may from time to time determine, and all matters shall be determined by a resolution of a majority of the directors present, except as otherwise provided herein or required by law.

 

 

Section 10.       Powers.

 

The Board of Directors may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power:

 

(1)                to declare dividends from time to time in accordance with law;

 

(2)                to purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

 

(3)                to authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non negotiable, secured or unsecured, to borrow funds and guarantee obligations, and to do all things necessary in connection therewith;

 

(4)                to remove any officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being;

 

(5)                to confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents;

 

(6)                to adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers, employees, consultants and agents of the Corporation and its direct or indirect subsidiaries as it may determine;

 

(7)                to adopt from time to time such insurance, retirement, and other benefit plans for directors, officers, employees and agents of the Corporation and its direct or indirect subsidiaries as it may determine; and,

 

(8)                to adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation’s business and affairs.

 

Section 11.     Compensation of Directors.

 

Unless otherwise restricted by the Certificate of Incorporation, the Board of Directors shall have the authority to fix the compensation of the directors. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or paid a stated salary or paid other compensation as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed compensation for attending committee meetings.

 

ARTICLE III - COMMITTEES

 

Section 1.       Committees of the Board of Directors.

 

The Board of Directors, by a resolution of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board of Directors and shall, for those committees and any others provided for herein, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in a resolution of the Board of Directors, 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 to the fullest extent authorized by law. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by resolution unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

 

 

Section 2.       Conduct of Business.

 

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; a majority of the members of any committee shall constitute a quorum unless the committee shall consist of one member, in which event one member shall constitute a quorum or unless the committee consists of two members, in which case both members shall constitute a quorum; and all matters shall be determined by a resolution of a majority of the members present. Action may be taken by any committee without notice and without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of the proceedings of such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

 

ARTICLE IV - OFFICERS

 

Section 1.       Enumeration.

 

The officers of the Corporation shall consist of a Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary and such other officers as the Board of Directors may determine, including but not limited to one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries. The salaries of officers elected by the Board of Directors shall be fixed from time to time by the Board of Directors or by such officer or officers as may be designated by resolution of the Board of Directors.

 

Section 2.       Election.

 

The Chief Executive Officer, President, Chief Financial Officer, Treasurer and the Secretary shall be elected annually by the Board of Directors at their first meeting following the annual meeting of the stockholders. The Board of Directors may, from time to time, elect or appoint such other officers as the Board of Directors may determine, including but not limited to one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries.

 

 

Section 3.       Qualification.

 

No officer need be a director. Two or more offices may be held by any one person. If required by a resolution of the Board of Directors, an officer shall give bond to the Corporation for the faithful performance of his or her duties, in such form and amount and with such sureties as the Board of Directors may determine. The premiums for such bonds shall be paid by the Corporation.

 

Section 4.       Tenure and Removal.

 

Each officer of the Corporation shall hold office until the first meeting of the Board of Directors following the next annual meeting of the stockholders and until his or her successor is elected or appointed and qualified, or until he or she dies, resigns, is removed or becomes disqualified, unless a shorter term is specified in the resolution electing or appointing said officer. Any officer may resign by notice given in writing or by electronic transmission of his or her resignation to the Chair of the Board, the Chief Executive Officer, the President, or the Secretary, of the Corporation or to the Board of Directors at a meeting of the Board. 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 officer may be removed from office with or without cause only by a resolution of a majority of the directors then in office.

 

Section 5.       Chief Executive Officer.

 

The Chief Executive Officer shall be the chief executive officer of the Corporation and shall, subject to the direction of the Board of Directors, have the responsibility for the general management and control of the day-to-day business and affairs of the Corporation. Unless otherwise provided by resolution of the Board of Directors, in the absence of the Chair of the Board and any Vice Chair of the Board, the Chief Executive Officer shall preside at all meetings of the stockholders and, if a director, meetings of the Board of Directors. The Chief Executive Officer shall have general supervision and direction of all of the other officers (other than the Chair of the Board or any Vice Chair of the Board), employees and agents of the Corporation. Subject to the Certificate of Incorporation, the other provisions of these Bylaws and any resolution of the Board of Directors, the Chief Executive Officer shall also have the power and authority to determine the duties of all officers, employees and agents of the Corporation, shall determine the compensation of any officers whose compensation is not established by the Board of Directors and shall have the power and authority to sign all contracts and other instruments of the Corporation which are authorized.

 

 

Section 6.       President.

 

Except for meetings at which the Chair of the Board, any Vice Chair of the Board or the Chief Executive Officer presides, the President shall, if present, preside at all meetings of the stockholders and, if a director, at all meetings of the Board of Directors. The President shall, subject to the control and direction of the Chief Executive Officer and the Board of Directors, have and perform such powers and duties as may be prescribed by these Bylaws or from time to time be determined by the Chief Executive Officer, subject to any determination thereof by the Board of Directors. The President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized. In the absence of a Chief Executive Officer, the President shall be the chief executive officer of the Corporation and shall, subject to the direction of the Board of Directors, have responsibility for the general management and control of the day-to-day business and affairs of the Corporation and shall have general supervision and direction of all of the officers (other than the Chair of the Board, any Vice Chair of the Board and the Chief Executive Officer of the Corporation), employees and agents of the Corporation.

 

Section 7.       Vice Presidents.

 

The Vice Presidents, if any, in the order of their election, or in such other order as the Board of Directors or the Chief Executive Officer may determine, shall have and perform the powers and duties of the President (or such of the powers and duties as the Board of Directors or the Chief Executive Officer may determine) whenever the President is absent or unable to act, including the power to sign contracts and other instruments of the Corporation. The Vice Presidents, if any, shall also have such other powers and duties as may from time to time be determined by the Board of Directors or the Chief Executive Officer and shall have the power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized.

 

Section 8.       Chief Financial Officer, Treasurer and Assistant Treasurers.

 

The Chief Financial Officer shall, subject to the control and direction of the Board of Directors and the Chief Executive Officer, be the chief financial officer of the Corporation and shall have and perform such powers and duties as may be prescribed in these Bylaws or be determined from time to time by the Board of Directors or the Chief Executive Officer, including the power to sign all contracts and other instruments of the Corporation which are authorized. All property of the Corporation in the custody of the Chief Financial Officer shall be subject at all times to the inspection and control of the Board of Directors and the Chief Executive Officer. The Chief Financial Officer shall have the responsibility for maintaining the financial records of the Corporation. The Chief Financial Officer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. Unless the Board of Directors has designated another person as the Corporation’s Treasurer, the Chief Financial Officer shall also be the Treasurer. Unless otherwise determined by the Board of Directors, the Treasurer (if different than the Chief Financial Officer) and each Assistant Treasurer, if any, shall have and perform the powers and duties of the Chief Financial Officer whenever the Chief Financial Officer is absent or unable to act, and may at any time exercise such of the powers of the Chief Financial Officer, and such other powers and duties, as may from time to time be determined by the Board of Directors, the Chief Executive Officer or the Chief Financial Officer and shall have the power to sign all stock certificates, contracts and instruments of the Corporation which are authorized.

 

 

Section 9.       Secretary and Assistant Secretaries.

 

The Board of Directors shall appoint a Secretary and, in his or her absence, one or more Assistant Secretaries. Unless otherwise directed by the Board of Directors or the Chair of the Board, the Secretary or, in his or her absence, any Assistant Secretary shall attend all meetings of the directors and the stockholders and shall record all resolutions of the Board of Directors and votes of the stockholders and minutes of the proceedings at such meetings. The Secretary or, in his or her absence, any Assistant Secretary, shall notify the directors of their meetings, and shall have and perform such other powers and duties as may be prescribed in these Bylaws or as may from time to time be determined by the Board of Directors, including the power to sign contracts and other instruments of the Corporation. If the Secretary or an Assistant Secretary is elected but is not present at any meeting of the Board of Directors or the stockholders, a temporary Secretary may be appointed by the Board of Directors or the chair of the meeting. The Secretary and each Assistant Secretary shall have the power to sign all stock certificates, contracts and instruments of the Corporation which are authorized.

 

Section 10.       Bond.

 

If required by the Board of Directors, any officer shall give the Corporation a bond in such sum and with such surety or sureties and upon such terms and conditions as shall be satisfactory to the Board of Directors, including but not limited to a bond for the faithful performance of the duties of his office and for the restoration to the Corporation of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control and belonging to the Corporation.

 

Section 11.       Action with Respect to Securities of Other Corporations.

 

Unless otherwise directed by the Board of Directors or the Chief Executive Officer, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of the stockholders of or with respect to any action of the stockholders of any other corporation in which the Corporation may hold securities and otherwise to exercise any and all rights and powers which the Corporation may possess by reason of its ownership of securities in such other corporation.

 

 

ARTICLE V - STOCK

 

Section 1.       Certificated and Uncertificated Stock.

 

Shares of the Corporation’s stock may be certificated or uncertificated, as provided under the Delaware General Corporation Law, and shall be entered in the books of the Corporation and registered as they are issued. Any certificates representing shares of stock shall be in such form as the Board of Directors shall prescribe, certifying the number and class of shares of stock owned by the stockholder. Any certificates issued to a stockholder of the Corporation shall bear the name of the Corporation and shall be signed by the Chair of the Board or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Any or all of the signatures on the certificate may be by facsimile.

 

Section 2.       Transfers of Stock.

 

Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of this Article V or, in the case of uncertificated shares, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor.

 

Section 3.       Record Date.

 

In order that the Corporation may determine the stockholders entitled to notice of any meeting of the stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or 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 on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of the stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described. 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 the stockholders shall be at the close of business on the day immediately preceding the day on which notice is given or, if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment of rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

 

A determination of the stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of the 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 the stockholders entitled to vote in accordance with the foregoing provisions of this Section 3 at the adjourned meeting.

 

 

Section 4.       Lost, Stolen or Destroyed Certificates.

 

In the event of the loss, theft or destruction of any certificate of stock, the Corporation may issue a replacement certificate of stock or uncertificated shares in place of any certificate previously issued by the Corporation pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

 

Section 5.       Regulations.

 

The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

 

Section 6.       Interpretation.

 

The Board of Directors shall have the power to interpret all of the terms and provisions of these Bylaws, which interpretation shall be conclusive.

 

ARTICLE VI - NOTICES

 

Section 1.       Notices.

 

If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law.

 

Section 2.       Waiver of Notice.

 

A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice, except attendance for the express purpose of objecting at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened.

 

 

ARTICLE VII - INDEMNIFICATION OF DIRECTORS AND OFFICERS

 

Section 1.       Right to Indemnification.

 

Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or an officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, trustee, member or manager of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter referred to as an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, manager, member, partner or trustee or in any other capacity while serving as a director, officer or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights to such Indemnitee than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such Indemnitee in connection therewith; provided, however, that, except as provided in Section 3 of this Article with respect to proceedings to enforce rights to indemnification or as otherwise required by law, the Corporation shall not be required to indemnify or advance expenses to any such Indemnitee in connection with a proceeding (or part thereof) initiated by such Indemnitee unless such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

 

Section 2.       Right to Advancement of Expenses.

 

In addition to the right to indemnification conferred in Section 1 of this Article VII, an Indemnitee shall also have the right to be paid by the Corporation the expenses (including attorney’s fees) incurred in defending any such proceeding in advance of its final disposition; provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an Indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of 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 from which there is no further right to appeal that such Indemnitee is not entitled to be indemnified for such expenses under this Section 2 or otherwise.

 

 

Section 3.       Right of Indemnitees to Bring Suit.

 

If a claim under Section 1 or 2 of this Article VII is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the Indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. To the fullest extent permitted by law, 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 also be entitled to be paid the expenses of prosecuting or defending such suit. In (i) 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, and (ii) 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 for indemnification set forth in the Delaware General Corporation Law. 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 the applicable standard of conduct set forth in the Delaware General Corporation Law, 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 this Article or otherwise shall be on the Corporation.

 

Section 4.       Non-Exclusivity of Rights.

 

The rights to indemnification and to the advancement of expenses conferred in this Article VII shall not be exclusive of any other right which any person may have or hereafter acquire under any law, statute, the Corporation’s Certificate of Incorporation as amended from time to time, these Bylaws, any agreement, any vote of the stockholders or resolution of disinterested directors or otherwise.

 

Section 5.       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, limited liability company, 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 Delaware General Corporation Law.

 

Section 6.       Indemnity Agreements.

 

The Corporation may enter into indemnity agreements with the persons who are members of its Board of Directors from time to time, and with such officers, employees and agents of the Corporation and with such officers, directors, members, managers, partners, employees and agents of any direct or indirect subsidiaries of the Corporation as the Board of Directors may designate, such indemnity agreements to provide in substance that the Corporation will indemnify such persons as contemplated by this Article VII, and to include any other substantive or procedural provisions regarding indemnification as are not inconsistent with Delaware law. The provisions of such indemnity agreements shall prevail to the extent that they limit or condition or differ from the provisions of this Article.

 

 

Section 7.       Indemnification of Employees and Agents of the Corporation.

 

The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article VII with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

Section 8.       Nature of Rights.

 

The rights conferred upon Indemnitees in this Article VII shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, member, manager, employee, agent or trustee and shall inure to the benefit of such Indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article that adversely affects any right of an Indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair 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 any such amendment, alteration or repeal.

 

Section 9.       Severability.

 

If any word, clause, provision or provisions of this Article VII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Article VII (including, without limitation, each portion of any Section of this Article VII containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (ii) to the fullest extent possible, the provisions of this Article VII (including, without limitation, each such portion of any Section of this Article containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

 

ARTICLE VIII - CERTAIN TRANSACTIONS

 

Section 1.       Transactions with Interested Parties.

 

No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, limited liability company, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction or solely because the votes of such director or officer are counted for such purpose, if:

 

(a)        The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by a resolution of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or

 

(b)        The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

 

(c)        The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders.

 

Section 2.       Quorum.

 

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee thereof which authorizes the contract or transaction.

 

ARTICLE IX - MISCELLANEOUS

 

Section 1.       Facsimile Signatures.

 

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

 

Section 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 3.       Reliance upon Books, Reports and Records.

 

Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation 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 4.       Fiscal Year.

 

Except as otherwise determined by the Board of Directors from time to time, the fiscal year of the Corporation shall end on the last day of December of each year.

 

Section 5.       Time Periods.

 

In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

 

Section 6.       Pronouns.

 

Whenever the context may require, any pronouns used in these Bylaws shall include the corresponding masculine, feminine or neuter forms.

 

ARTICLE X - AMENDMENTS

 

In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to adopt, amend and repeal these Bylaws subject to the power of the holders of stock of the Corporation to adopt, amend or repeal these Bylaws.

 

 

Exhibit 4.1

 

 

Exhibit 4.2

 

Execution Version

 

AMENDED AND RESTATED 

INVESTORS’ RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”), is made as of December 16, 2022, by and among ArriVent BioPharma, Inc., a Delaware corporation (the “Company”), and each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an “Investor”.

 

RECITALS

 

WHEREAS, certain of the Investors (the “Existing Investors”) hold shares of Series A Preferred Stock and/or shares of Common Stock issued upon conversion thereof and possess registration rights, information rights, rights of first offer, and other rights pursuant to that certain Investors’ Rights Agreement dated as of June 9, 2021, by and among the Company and such Existing Investors (the “Prior Agreement”); and

 

WHEREAS, the Existing Investors are holders of at least fifty-five percent (55%) of the Registrable Securities (as defined in the Prior Agreement), and desire to amend and restate the Prior Agreement in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted to them under the Prior Agreement; and

 

WHEREAS, certain of the Investors are parties to that certain Series B Preferred Stock Purchase Agreement of even date herewith by and among the Company and such Investors (the “Purchase Agreement”) providing for the sale of shares of the Company’s Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), under which certain of the Company’s and such Investors’ obligations are conditioned upon the execution and delivery of this Agreement by such Investors, Existing Investors holding at least fifty-five percent (55%) of the Registrable Securities, Major Investors holding at least 66.667% of the shares of Series A Preferred Stock currently held by the Major Investors, VSUM (as defined below), LAV USD Fund (as defined below), OrbiMed (as defined below), Octagon (as defined below), and Zoo (as defined below), and the Company;

 

NOW, THEREFORE, the Company and the Existing Investors hereby agree that the Prior Agreement is hereby amended and restated in its entirety by this Agreement, and the parties to this Agreement further agree as follows:

 

1.

Definitions. For purposes of this Agreement:

 

1.1            “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including, without limitation, any general partner, managing member, officer, director or trustee of such Person, or any venture capital fund, registered investment company, or other investment fund now or hereafter existing that is controlled by one (1) or more general partners, managing members or investment advisers of, or shares the same management company or investment adviser with, such Person.

 

1.2            “Board of Directors” means the board of directors of the Company.

 

1.3            “Certificate of Incorporation” means the Company’s Second Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time.

  

 

1.4            “Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.

 

1.5            “Competitor” means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint venture or similar arrangement (whether now existing or formed hereafter)), in the business of drug discovery, but shall not include any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than twenty percent (20)% of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate any members of the board of directors of any Competitor, provided that (i) Sofinnova Venture Partners XI, L.P. (together with its Affiliates, “Sofinnova”), (ii) General Catalyst Group XI – Ignition, L.P. (together with its Affiliates, “General Catalyst”), (iii) VSUM VI Holdings Limited, VSUM VIII Holdings Limited, and ARVT Holdings Limited (collectively, and together with their Affiliates, “VSUM”), (iv) Citrus Limited (together with its Affiliates, “LAV RMB Fund”), (v) LAV Fund VI, L.P. (together with its Affiliates, “LAV USD Fund”), (vi) Shanghai Healthcare Capital (Limited Partnership) (together with its Affiliates “SHC”), (vii) the RMB SPV (as such term is defined in the Purchase Agreement), and (vii) OrbiMed Private Investments VIII, LP and OrbiMed Asia Partners IV, L.P. (collectively, and together with their Affiliates, “OrbiMed”) shall not be deemed to be a Competitor.

 

1.6            “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.7            “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

 

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

 

1.9            “Excluded Registration” means (i) a registration relating to the sale or grant of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, equity incentive or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

 

1.10          “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

1.11          “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits forward incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.12          “Founder” means each of Zhengbin Yao, Stuart Lutzker and Robin LaChapelle.

 

1.13          “GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

 

1.14          “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.15          “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, life partner or similar statutorily-recognized domestic partner, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships of a natural person referred to herein.

 

1.16          “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.17          “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.

 

1.18          “Key Employee” means any executive-level employee as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement).

 

1.19          “Major Investor” means any Investor that, (i) individually or together with such Investor’s Affiliates, or, (ii) in the case of Citrus Limited and LAV Fund VI, L.P., individually or together with Affiliates and each other, or (iii) in the case of SHC and the RMB SPV, individually or together with its Affiliates and each other, holds at least 5,714,284 shares of Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof).

 

1.20          “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

 

1.21          “Octagon” means, collectively, and together with their Affiliates, Octagon Investments Master Fund LP, Octagon Private Opportunities Fund LP and Octagon Special Opportunities Fund LP.

 

1.22          “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.23          “Preferred Director” means any director of the Company that the holders of record of Preferred Stock are entitled to elect, exclusively and as a separate class, pursuant to the Certificate of Incorporation.

 

1.24          “Preferred Stock” means, collectively, the Series A Preferred Stock and Series B Preferred Stock.

 

1.25          “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors after the date hereof; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Section 6.1, and excluding for purposes of Section 2 any shares for which registration rights have terminated pursuant to Section 2.13 of this Agreement.

 

1.26          “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.27          “Requisite Preferred Director Vote” means the affirmative vote of at least one (1) Preferred Director designated by the holders of Series A Preferred Stock and at least one (1) Preferred Director designated by the holders of the Series B Preferred Stock pursuant to the Certificate of Incorporation and the Transaction Agreements (as defined in the Purchase Agreement).

 

1.28          “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Section 2.12(b) hereof.

 

1.29          “SEC” means the Securities and Exchange Commission.

 

1.30          “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.31           “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

1.32           “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

 

1.33          “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Section 2.6.

 

1.34          “Series A Preferred Stock” means shares of the Company’s Series A Preferred Stock, par value $0.0001 per share.

 

1.35          “Zoo” means, together with its Affiliates, Zoo Capital (Cayman) Limited I.

 

2.

Registration Rights. The Company covenants and agrees as follows:

 

2.1            Demand Registration.

 

(a)            Form S-1 Demand. If at any time one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from Holders of a majority of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with anticipated aggregate offering price, net of Selling Expenses, that would exceed $20,000,000, then the Company shall: (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

(b)            Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from any Holder(s) of at least ten percent (10%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holder(s) having an anticipated aggregate offering price, net of Selling Expenses, of at least $5,000,000, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within forty-five (45) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Sections 2.1(c) and 2.3.

 

(c)            Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Section 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than sixty (60) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for its own account or that of any other stockholder during such sixty (60) day period other than an Excluded Registration.

 

 

(d)            The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(a), (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two (2) registrations pursuant to Section 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1(b), during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective. A registration shall not be counted as “effected” for purposes of this Section 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Section 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Section 2.1(d); provided, that if such withdrawal is during a period the Company has deferred taking action pursuant to Section 2.1(c), then the Initiating Holders may withdraw their request for registration and such registration will not be counted as “effected” for purposes of this Section 2.1(d).

 

2.2            Company Registration. If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration or the IPO), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Section 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

 

 

2.3            Underwriting Requirements.

 

(a)            If, pursuant to Section 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Board of Directors and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting; provided, however, that no Holder (or any of their assignees) shall be required to make any representations, warranties or indemnities, or provide any information or documentation, except as such representations, warranties, indemnities, information or documentation that relate to such Holder’s ownership of shares and authority to enter into the underwriting agreement and to such Holder’s intended method of distribution, and the liability of such Holder shall be several and not joint, and limited to an amount equal to the net proceeds from the offering received by such Holder. Notwithstanding any other provision of this Section 2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)            In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below twenty-five percent (25%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering. For purposes of the provision in this Section 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

 

(c)            For purposes of Section 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Section 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4            Obligations of the Company. Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)            prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) additional days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)            prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

 

(c)            furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

(d)            use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e)            in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)            use its commercially reasonable efforts to cause to be furnished to each underwriter, if any, (i) a written legal opinion of the Company’s outside legal counsel in form and substance as is customarily given in opinions of the Company’s counsel to underwriters in underwritten public offerings and (ii) on the date of the applicable prospectus, on the effective date of any post-effective amendment to the applicable registration statement and at the closing of the offering, dated the respective dates of delivery thereof, a “comfort” letter signed by the Company’s independent certified public accountants in form and substance as is customarily given in accountants’ letters to underwriters in underwritten registered offerings;

 

(g)            use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(h)            provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(i)            promptly make available for inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(j)            notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

 

(k)            after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.

 

2.5            Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

2.6            Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000 of one counsel for the selling Holders selected by Holders of a majority of the Registrable Securities to be registered (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one registration pursuant to Sections 2.1(a) or 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2 (other than fees and disbursements of counsel to any Holder, other than the Selling Holder Counsel, which shall be borne solely by the Holder engaging such counsel) shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7            Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8            Indemnification. If any Registrable Securities are included in a registration statement under this Section 2:

 

(a)            To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration except to the extent such information has been corrected in a subsequent writing prior to or concurrently with the sale of Registrable Securities to the Person asserting the claim.

 

 

(b)            To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration and has not been corrected in a subsequent writing prior to or concurrently with the sale of Registrable Securities to the Person asserting the claim; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Section 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)            Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8, only to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.

 

 

(d)            To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

(e)            Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control; provided, however, that any matter expressly provided for or addressed by the foregoing provisions that is not expressly provided for or addressed by the underwriting agreement shall be controlled by the foregoing provisions.

 

(f)            Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Section 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2, and otherwise shall survive the termination of this Agreement or any provision(s) of this Agreement.

 

 

2.9            Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a)            make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;

 

(b)            use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and

 

(c)            furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.10           Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would (i) allow such holder or prospective holder to include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included; or (ii) allow such holder or prospective holder to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall not apply to Registrable Securities acquired by any additional Investor that becomes a party to this Agreement in accordance with Section 6.9.

 

2.11          “Market Stand-off” Agreement. Each Holder 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, and ending on the date specified by the Company 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 shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock 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 securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Section 2.11 shall apply only to the IPO, shall not apply to (a) the sale of any shares of Common Stock (x) purchased by a Holder in connection with the IPO, or (y) acquired at any time after the IPO in the open market, (b) the sale of any shares to an underwriter pursuant to an underwriting agreement, or (c) the transfer of any shares to the Affiliates of the Holder, provided that such Affiliate agrees to be bound in writing by the restrictions set forth herein, or (d) the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period, or (e) the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Section 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders that are subject to such agreements, based on the number of shares subject to such agreements.

 

 

2.12          Restrictions on Transfer.

 

(a)            The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. Other than in connection with a transfer pursuant to an effective registration statement or, following the IPO, SEC Rule 144, a transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement. Notwithstanding the foregoing, the Company shall not require any transferee of shares pursuant to an effective registration statement or, following the IPO, SEC Rule 144, in each case, to be bound by the terms of this Agreement.

 

(b)            Each certificate, instrument, or book entry representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Section 2.12(c)) be notated with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, as amended. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Section 2.12.

 

(c)            The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction or following the IPO, the transfer is made pursuant to SEC Rule 144, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer; provided that no such notice shall be required if the intended sale, pledge, or transfer complies with SEC Rule 144. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a notice, legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144; or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Section 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Section 2.12(b), except that such certificate instrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act. Upon the request of any Holder, the Company agrees to reasonably cooperate with Holder to remove the Securities Act portion of the legend set forth above from the certificate or certificates for such Restricted Securities; provided, that such Restricted Securities are eligible (as reasonably determined by counsel for such Holder and the Company) for sale at the time such request is made pursuant to Rule 144 (or any similar rule or rules then in effect) under the Securities Act.

 

 

2.13          Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Sections 2.1 or 2.2 shall terminate upon the earliest to occur of:

 

(a)            the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation; and

 

(b)            such time after consummation of the IPO as SEC Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares without limitation, during a three (3)-month period without registration.

 

3.

Information and Observer Rights.

 

3.1            Delivery of Financial Statements. The Company shall deliver to each Major Investor, provided that the Board of Directors has not reasonably determined that such Major Investor is a Competitor of the Company:

 

(a)            as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and a comparison between (x) the actual amounts as of and for such fiscal year and (y) the comparable amounts for the prior year and as included in the Budget (as defined in Section 3.1(d)) for such year, with an explanation of any material differences between such amounts and a schedule as to the sources and applications of funds for such year, and (iii) a statement of stockholders’ equity as of the end of such year, in each case, prepared in accordance with GAAP; provided that all such financial statements shall be audited and certified by independent public accountants approved by the Board of Directors of the Company;

 

(b)            as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’ equity 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);

 

(c)            promptly, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company;

 

 

(d)            as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly 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 (such budget and business plan that is approved by the Board of Directors is collectively referred to herein as the “Budget”); and

 

(e)            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 3.1 to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (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 sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information set forth in this Section 3.1 during the period starting with the date sixty (60) 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 SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section 3.1 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.

 

3.2            Inspection. The Company shall permit each Major Investor (provided that the Board of Directors has not reasonably determined that such Major Investor is 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 its officers, during normal business hours of the Company with reasonable advance notice as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.3            Observer Rights. As long as each of General Catalyst, Sofinnova, LAV RMB Fund and LAV USD Fund (collectively), SHC and the RMB SPV (collectively), OrbiMed, Octagon and Zoo owns not less than 6,000,000 shares of Preferred Stock (or an equivalent amount of Common Stock issued upon conversion thereof), the Company shall invite a representative of each of Sofinnova, LAV RMB Fund and LAV USD Fund (jointly), SHC and the RMB SPV (collectively), OrbiMed, Octagon and Zoo to attend all meetings of the Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a Competitor of the Company.

 

 

3.4            Termination of Information Rights and Observer Rights. The covenants set forth in Section 3.1, Section 3.2 and Section 3.3 shall terminate and be of no further force or effect (i) immediately before the consummation of the 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 the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation, whichever event occurs first.

 

3.5            Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor or make decisions with respect to its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), 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 3.5 by such Investor), (b) is or has been independently developed or conceived by such Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to such Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its or its Affiliates’ respective attorneys, accountants, consultants, and other professionals to the extent reasonably necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Section 3.5; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, regulation, rule, court order or subpoena, provided that such Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.

 

4.

Rights to Future Stock Issuances.

 

4.1            Right of First Offer. Subject to the terms and conditions of this Section 4.1 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 in such proportions as it deems appropriate, among itself and its Affiliates; provided that each such Affiliate is not a Competitor and each such Affiliate agrees to enter into this Agreement and the Amended and Restated Voting Agreement of even date herewith among the Company, the Investors and the other parties named therein, as an “Investor” under each such agreement (provided that any Competitor shall not be entitled to any rights as a Major Investor under this Agreement).

 

 

(a)            The Company shall give notice (the “Offer Notice”) to each 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.

 

(b)            By notification to the Company within twenty (20) days after the Offer Notice is given, each 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 Common Stock then held by such Major Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by such Major Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then outstanding). At the expiration of such twenty (20) day period, the Company shall promptly notify each Major Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Major Investor’s failure to do likewise. During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Major Investors were entitled to subscribe but that were not subscribed for by the Major Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Section 4.1(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 4.1(c).

 

(c)            If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Section 4.1(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 4.1.

 

(d)            The right of first offer in this Section 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Certificate of Incorporation); (ii) shares of Common Stock issued in the IPO; and (iii) the issuance of Additional Shares (as defined in the Purchase Agreement).

 

 

4.2            Termination. The covenants set forth in Section 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) upon the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation.

 

5.

Additional Covenants.

 

5.1            Insurance. For so long as a Preferred Director is serving on the Board of Directors, the Company shall not cease to maintain a Directors and Officers liability insurance policy in an amount of at least $3.0 million unless approved by the Board of Directors, including the Requisite Preferred Director Vote.

 

5.2            Employee Agreements. Except as to the extent that any non-solicitation or non-competition covenants are unlawful in the jurisdiction in which a Key Employee resides, the Company will cause (i) each Key Employee now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) to enter into a nondisclosure, proprietary rights assignment and non-solicitation agreement; and (ii) each Key Employee to enter into a noncompetition agreement designed with the advice of counsel, as permitted under applicable law and as approved by the Board of Directors including the Requisite Preferred Director Vote. 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 restricted stock agreement between the Company and any employee, without the consent of the Board of Directors.

 

5.3            Employee Stock. Unless otherwise approved by the Board of Directors including the Requisite Preferred Director Vote, all future employees, directors, consultants and other service providers of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, and (ii) a market stand-off provision substantially similar to that in Section 2.11. Without the prior approval by the Board of Directors including the Requisite Preferred Director Vote, the Company shall not amend, modify, terminate, waive or otherwise alter, in whole or in part, any stock purchase, stock restriction or option agreement with any existing employee or service provider if such amendment would cause it to be inconsistent with this Section 5.3. In addition, unless otherwise approved by the Board of Directors, including the Requisite Preferred Director Vote, the Company shall retain (and not waive) a “right of first refusal” on employee transfers until the Company’s IPO and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock.

 

5.4            Matters Requiring Requisite Preferred Director Vote. During such time or times as the holders of Preferred Stock are entitled to elect a Preferred Director and such seat is filled, the Company hereby covenants and agrees with each of the Investors that it shall not, without approval of the Board of Directors, which approval must include the Requisite Preferred Director Vote:

 

(a)            make, or permit any subsidiary to 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 by the Company;

 

 

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

 

(c)            guarantee, directly or indirectly, or permit any subsidiary to 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 Directors;

 

(e)            adopt or amend the Company’s Budget;

 

(f)            create, or authorize the creation of, or issue, or authorize the issuance of any debt security or instrument or otherwise incur new indebtedness for borrowed money, or create any lien or security interest (except for purchase money liens or statutory liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary course of business), or permit any subsidiary to take any such action, in each case, if the aggregate indebtedness of the Company and its subsidiaries for borrowed money following such action would exceed $5,000,000 in the aggregate that is not already included in the Budget (as defined in Section 3.1(d)), other than trade credit incurred in the ordinary course of business;

 

(g)            enter into or be a party to any transaction with any director, officer, employee or stockholder of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person or entity;

 

(h)            hire, terminate, or change the compensation of the Founders or the Company’s Chief Executive Officer (the “CEO”), including approving any option grants or stock awards to the Founders or the CEO;

 

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

 

(j)            sell, assign, license, pledge, or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business; 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 twenty million dollars ($20,000,000).

 

5.5            Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule. The Company shall reimburse the non-employee directors for all reasonable out-of-pocket and travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors (or meetings of committees thereof, if applicable) and other functions on behalf of the Company. Each non-employee director shall be entitled in such person’s discretion to be a member of all committees of the Board of Directors. As of the date hereof, the Company will have appointed one (1) Preferred Director designated by the holders of the Series B Preferred Stock pursuant to the Certificate of Incorporation and the Transaction Agreements to the Option Committee of the Board of Directors who shall be the director designated by Sofinnova Venture Partners XI, L.P. pursuant to Section 1.2(c) of the Voting Agreement (as defined in the Purchase Agreement), absent the mutual agreement of each of the two Preferred Directors designated by the holders of the Series B Preferred Stock pursuant to the Certificate of Incorporation and the Transaction Agreements. Any options to be granted by the Option Committee pursuant to such Committee’s delegation of authority from the Board of Directors shall be approved unanimously by the Option Committee and such approval shall be evidenced by either a unanimous written consent executed by each member of the Option Committee or by minutes of a meeting wherein each of the members of the Option Committee were present and consented to the approval of any option grants presented for approval at such meeting. Any option grants to be made by the Company to any member of the Option Committee shall be approved by the full Board of Directors and not the Option Committee.

 

 

5.6            Successor Indemnification. 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 members of the Board of Directors as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Certificate of Incorporation, or elsewhere, as the case may be.

 

5.7            Right to Conduct Activities. The Company hereby agrees and acknowledges that each of Sofinnova, General Catalyst, VSUM, LAV RMB Fund, LAV USD Fund, SHC, the RMB SPV, OrbiMed, Octagon and Zoo is a professional investment organization, and as such reviews the business plans and related proprietary information of many enterprises, some of which may compete directly or indirectly with the Company’s business (as currently conducted or as currently propose to be conducted). Nothing in this Agreement shall preclude or in any way restrict Sofinnova, General Catalyst, VSUM, LAV RMB Fund, LAV USD Fund, SHC, the RMB SPV, OrbiMed, Octagon and Zoo 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, each of Sofinnova, General Catalyst, VSUM, LAV RMB Fund, LAV USD Fund, SHC, the RMB SPV, OrbiMed, Octagon and Zoo shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by Sofinnova, General Catalyst, VSUM, LAV RMB Fund, LAV USD Fund, SHC, the RMB SPV, OrbiMed, Octagon and Zoo in any entity competitive with the Company, or (ii) actions taken by any partner, officer, employee or other representative of Sofinnova, General Catalyst, VSUM, LAV RMB Fund, LAV USD Fund, SHC, the RMB SPV, OrbiMed, Octagon and Zoo to assist any such competitive company, whether or not such action was taken as a member of the board of directors 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 Investors from liability associated with the unauthorized disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

 

5.8            Side Letters. In the event the Company enters into a side letter or other agreement with any Investor after the date hereof in connection with the equity financing contemplated by the Purchase Agreement (other than any Management Rights Letters (as defined in the Purchase Agreement)), the Company shall promptly provide each Major Investor with a copy of such side letter or other agreement.

 

5.9            Indemnification Matters. The Company hereby acknowledges that one (1) or more of the Preferred Directors nominated to serve on the Board of Directors by one (1) or more Investors may have certain rights to indemnification, advancement of expenses and/or insurance provided by one (1) or more of the Investors and certain of their Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Preferred Director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Preferred Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Preferred Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Preferred Director to the extent legally permitted and as required by the Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Preferred Director), without regard to any rights such Preferred Director may have against the Investor Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Investor Indemnitors on behalf of any such Preferred Director with respect to any claim for which such Preferred Director has sought indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Preferred Director against the Company. The Preferred Directors and the Investor Indemnitors are intended third-party beneficiaries of this Section 5.9 and shall have the right, power and authority to enforce the provisions of this Section 5.9 as though they were a party to this Agreement.

 

5.10          Anti-Harassment Policy. The Company shall maintain in effect (i) a Code of Conduct governing appropriate workplace behavior and (ii) an Anti-Harassment and Discrimination Policy prohibiting discrimination and harassment at the Company.

 

5.11          Cybersecurity. The Company shall use its commercially reasonable efforts to (a) identify and restrict access (including through physical and/or technical controls) to the Company’s confidential business information and trade secrets and any information about identified or identifiable natural persons maintained by or on behalf of the Company (collectively, “Protected Data”) to those individuals who have a need to access it and (b) maintain reasonable physical, technical and administrative safeguards (“Cybersecurity Solutions”) designed to protect the confidentiality, integrity and availability of its technology and systems (including servers, laptops, desktops, cloud, containers, virtual environments and data centers) and all Protected Data. The Company shall evaluate on a periodic basis at least annually whether such safeguards should be updated to maintain a level of security appropriate to the risk posed to Company systems and Protected Data. The Company shall educate its employees about the proper use and storage of Protected Data, including periodic training as determined reasonably necessary by the Company or the Board of Directors.

 

 

5.12          Real Property Holding Corporation. Promptly following (and in any event within ten (10) days after receipt of) written request by an Investor, the Company shall provide such Investor with a written statement informing such Investor whether such Investor’s interest in the Company constitutes a United States real property interest. The Company’s determination shall comply with the requirements of Treasury Regulation Section 1.897-2(h)(1) or any successor regulation, and the Company shall provide timely notice to the Internal Revenue Service, in accordance with and to the extent required by Treasury Regulation Section 1.897-2(h)(2) or any successor regulation, that such statement has been made. The Company’s obligation to furnish such written statement shall continue notwithstanding the fact that a class of the Company’s stock may be regularly traded on an established securities market or the fact that there is no Preferred Stock then outstanding.

 

5.13          Termination of Covenants. The covenants set forth in this Section 5, except for Sections 5.6 and 5.9, shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) upon a Deemed Liquidation Event, whichever event occurs first.

 

6.

Miscellaneous.

 

6.1            Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one (1) or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least 1,000,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Section 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or equityholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall, as a condition to the applicable transfer, establish a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

 

6.2            Governing Law. This Agreement shall be governed by the internal law of the State of Delaware, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.

 

6.3            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. Counterparts may be delivered via facsimile, 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.

 

6.4            Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

6.5            Notices.

 

(a)            All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A or Schedule B (as applicable) hereto, or (as to the Company) to the principal office of the Company and to the attention of the Chief Executive Officer, or in any case to such email address or address as subsequently modified by written notice given in accordance with this Section 6.5. If notice is given to the Company, a copy (which copy shall not constitute notice) shall also be sent to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center Boston, M.A. 02111, Attn: Edwin C. Pease, Esq., ecpease@mintz.com.

 

(b)            Each Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232 of the DGCL (or any successor thereto) at the electronic mail address set forth below such Investor’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of electronic transmission is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected electronic mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each Investor agrees to promptly notify the Company of any change in such stockholder’s electronic mail address, and that failure to do so shall not affect the foregoing.

 

6.6            Amendments and Waivers. Any term of this Agreement may be amended, modified or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of (i) the Company, (ii) the holders of at least 55% of the shares of Series A Preferred Stock or shares of Common Stock issued upon conversion of shares of Series A Preferred Stock that, in each case constitute Registrable Securities then outstanding, and (iii) the holders of at least 60% of the shares of Series B Preferred Stock or shares of Common Stock issued upon conversion of shares of Series B Preferred Stock that, in each case constitute Registrable Securities then outstanding; provided that the Company may in its sole discretion waive compliance with Section 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Section 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing:

 

 

(a)            the rights of the Major Investors under Sections 3.1 and 3.2, Section 4 and any other section of this Agreement applicable to the Major Investors (including this clause (a) of this Section 6.6) may be amended, modified, terminated or waived with only the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding and held by the Major Investors;

 

(b)            this Agreement may not be amended, modified or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, modification, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, provided that to the extent any Major Investor thereafter, by agreement with the Company, purchases securities in such transaction, then each other Major Investor shall be provided with the opportunity to purchase securities in such transaction on similar terms and in amounts that are proportionally similar to those of the first Major Investor; this proviso of clause (b) of this Section 6.6 shall not be amended without the consent of the Major Investors holding at least 66.667% of the shares of the Preferred Stock then held by the Major Investors);

 

(c)            the provisions in Sections 5.4 and 5.7 and clauses (b) and (c) of this Section 6.6, the terms “Major Investor” and “Competitor” and any other provisions of this Agreement that specifically references “Sofinnova” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to Sofinnova in a manner that would adversely impact the rights of Sofinnova without the prior written consent of Sofinnova;

 

(d)            the provisions in Sections 5.4 and 5.7 and clauses (b) and (d) of this Section 6.6, the terms “Major Investor” and “Competitor” and any other provisions of this Agreement that specifically references “General Catalyst” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to General Catalyst in a manner that would adversely impact the rights of General Catalyst without the prior written consent of General Catalyst;

 

(e)            the provisions in Sections 5.4 and 5.7 and clause (e) of this Section 6.6, the terms “Major Investor” and “Competitor” and any other provisions of this Agreement that specifically references “VSUM” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to VSUM in a manner that would adversely impact the rights of VSUM without the prior written consent of VSUM;

 

 

(f)            the provisions in Section 5.4 and 5.7 and clauses (b) and (f) of this Section 6.6, the terms “Major Investor” and “Competitor” and any other provisions of this Agreement that specifically references “LAV RMB Fund” or “LAV USD Fund” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to LAV RMB Fund and/or LAV USD Fund (as applicable) in a manner that would adversely impact the rights of LAV RMB Fund and/or LAV USD Fund (as applicable) without the prior written consent of LAV RMB Fund and LAV USD Fund;

 

(g)            the provisions in Section 5.7, clause (g) of this Section 6.6, the terms “Major Investor” and “Competitor” and any other provisions of this Agreement that specifically references “OrbiMed” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to OrbiMed in a manner that would adversely impact the rights of OrbiMed without the prior written consent of OrbiMed;

 

(h)            the provisions in Section 5.7, clause (h) of this Section 6.6, the term “Major Investor” and any other provisions of this Agreement that specifically references “Octagon” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to Octagon in a manner that would adversely impact the rights of Octagon without the prior written consent of Octagon;

 

(i)            the provisions in Section 5.7, clauses (b) and (i) of this Section 6.6, the term “Major Investor” and any other provisions of this Agreement that specifically references “Zoo” shall not be amended, waived or terminated (either generally or in a particular instance and either retroactively or prospectively) with respect to Zoo in a manner that would adversely impact the rights of Zoo without the prior written consent of Zoo;

 

(j)            the provisions in Section 5.7, clause (j) of this Section 6.6, the term “Major Investor” and any other provisions of this Agreement that specifically references “SHC” or the RMB SPV, shall not be amended, waived or terminated (either general or in a particular instance and either retroactively or prospectively) with respect to SHC or the RMB SPV in a manner that would adversely impact the rights of SHC or the RMB SPV without the prior written consent of SHC or the RMB SPV; and

 

(k)            Schedule A hereto may be amended by the Company from time to time to add transferees of any Registrable Securities in compliance with the terms of this Agreement without the consent of the other parties; and Schedule A hereto may also be amended by the Company after the date of this Agreement without the consent of the other parties to add information regarding any additional Investor who becomes a party to this Agreement in accordance with Section 6.9. The Company shall give prompt notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination, or waiver. Any amendment, modification, termination, or waiver effected in accordance with this Section 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one (1) or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

 

6.7            Severability. In case any one (1) or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

6.8            Aggregation of Stock; Apportionment. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated Persons may apportion such rights as among themselves in any manner they deem appropriate. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock dividend, split, combination or other recapitalization affecting the capital stock occurring after the date of this Agreement.

 

6.9            Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

6.10          Entire Agreement. This Agreement (including any Schedules hereto), together with the other Transaction Agreements, constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. Upon the effectiveness of this Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.

 

6.11          Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

 

6.12          Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or non-defaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.

 

	ARRIVENT BIOPHARMA, INC.
	By:	/s/ Zhengbin (Bing) Yao
	Name:	Zhengbin (Bing) Yao
	Title:	President and CEO

 

 

[Signature Page to Amended and Restated Investors; Rights Agreement]

 

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Investors’ Rights Agreement as of the date first written above.

  

	INVESTOR:
	By:
	Name:
	Title:

 

 

[Signature Page to Amended and Restated Investors; Rights Agreement]

 

 

ARRIVENT BIOPHARMA, INC.

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

COUNTERPART SIGNATURE PAGE

 

By execution and delivery of this signature page, the undersigned hereby agrees to become an Investor, as defined in that certain Amended and Restated Investors’ Rights Agreement, by and among ArriVent BioPharma, Inc., a Delaware corporation, and the Investors (as defined herein), dated as of December 16, 2022 (the “Investors’ Rights Agreement”). The undersigned hereby further agrees to be bound by the terms and conditions of the Investors’ Rights Agreement as an “Investor” thereunder and authorizes this signature page to be attached to the Investors’ Rights Agreement or counterparts thereof.

 

Executed, in counterpart, effective as of                   , 2023.

 

	INVESTOR:
	By:
	Name:
	Title:
	Address:

 

[Signature Page to Amended and Restated Investors; Rights Agreement]

 

 

Exhibit 10.1

 

Indemnification Agreement

 

This Indemnification Agreement (this “Agreement”) is made and entered into this [__]th day of [____], 202[ ], by and between ArriVent BioPharma, Inc., a Delaware corporation (the “Company”), and [___________] (“Indemnitee”).

 

Recitals

 

Whereas, qualified persons are reluctant to serve corporations as directors or otherwise unless they are provided with broad indemnification and insurance against claims arising out of their service to and activities on behalf of the corporations; and

 

Whereas, the Company has determined that attracting and retaining such persons is in the best interests of the Company’s stockholders and that it is reasonable, prudent and necessary for the Company to indemnify such persons to the fullest extent permitted by applicable law and to provide reasonable assurance regarding insurance;

 

Now, therefore, the Company and Indemnitee hereby agree as follows:

 

1.             Defined Terms; Construction.

 

(a)           Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

 

“Board” means the board of directors of the Company.

 

“Change in Control” means, and shall be deemed to have occurred if, on or after the date of this Agreement,

 

(i)            any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries acting in such capacity, or (B) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than 20% of the total voting power represented by the Company’s then outstanding Voting Securities,

 

(ii)           during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof,

 

 

(iii)          the stockholders of the Company approve a merger or consolidation of the Company with any other corporation other than a merger or consolidation that would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 75% of the total voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation,

 

(iv)          the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of related transactions) all or substantially all of its assets; or

 

(v)           the Company files or have filed against it, and such filing shall not be dismissed, any bankruptcy, insolvency or dissolution proceedings, or a trustee, administrator or creditors committee shall be appointed to manage or supervise the affairs of the Company.

 

“Corporate Status” means the status of a person who is or was a director (or a member of any committee of the Board), officer, employee or agent (including without limitation a manager of a limited liability company) of the Company or any of its subsidiaries, or of any predecessor thereof, or is or was serving at the request of the Company as a director (or a member of any committee of a board of directors), officer, employee or agent (including without limitation a manager of a limited liability company) of another entity, or of any predecessor thereof, including service with respect to an employee benefit plan.

 

“Determination” means a determination that either (x) there is a reasonable basis for the conclusion that indemnification of Indemnitee is proper in the circumstances because Indemnitee met a particular standard of conduct (a “Favorable Determination”), or (y) there is no reasonable basis for the conclusion that indemnification of Indemnitee is proper in the circumstances because Indemnitee met a particular standard of conduct (an “Adverse Determination”). An Adverse Determination shall include the decision that a Determination was required in connection with indemnification and the decision as to whether Indemnitee met the applicable standard of conduct.

 

“DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time.

 

“Expenses” means all (i) attorneys’ fees and expenses, retainers, court, arbitration and mediation costs, transcript costs, fees and expenses of experts, witness and public relations consultants bonds and fees, costs of collecting and producing documents, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, appealing or otherwise participating in a Proceeding or responding to, or objecting to, a request to provide discovery in any Proceeding, (ii) damages, judgments, penalties, fines and amounts paid in settlement and any other amounts that Indemnitee becomes legally obligated to pay (including any federal, state or local taxes imposed on Indemnitee as a result of receipt of reimbursements or advances of expenses under this Agreement) and (iii) the premium, security for, and other costs relating to any costs bond, supersedes bond or other appeal bond or its equivalent, whether civil, criminal, arbitrational, administrative or investigative with respect to any Proceeding actually and reasonably incurred by Indemnitee, or on Indemnitee’s behalf, because of any claim or claims made against or by Indemnitee in connection with any Proceeding, whether formal or informal (including an action by or in the right of the Company), to which Indemnitee is, was or at any time becomes a party or a witness, or is threatened to be made a party to, participant in or a witness with respect to, or by reason of Indemnitee’ Corporate Status.

 

 

“Independent Legal Counsel” means an attorney or firm of attorneys competent to render an opinion under the applicable law, selected in accordance with the provisions of Section 5(e) hereof, who has not performed any services (other than services similar to those contemplated to be performed by Independent Legal Counsel under this Agreement) for the Company or any of its subsidiaries or for Indemnitee within the last three years.

 

“Proceeding” means a threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including without limitation a claim, counterclaim, demand, discovery request, formal or informal investigation, inquiry, administrative hearing, arbitration or other form of alternative dispute resolution, including an appeal from any of the foregoing.

 

“Voting Securities” means any securities of the Company that vote generally in the election of directors.

 

(b)           Construction. For purposes of this Agreement,

 

(i)            References to the Company and any of its “subsidiaries” shall include any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise that before or after the date of this Agreement is party to a merger or consolidation with the Company or any such subsidiary or that is a successor to the Company as contemplated by Section 9(e) hereof (whether or not such successor has executed and delivered the written agreement contemplated by Section 9(e) hereof).

 

(ii)           References to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan.

 

(iii)          References to a “witness” in connection with a Proceeding shall include any interviewee or person called upon to produce documents in connection with such Proceeding.

 

2.             Agreement to Serve.

 

Indemnitee agrees to serve as a director or officer of the Company or one or more of its subsidiaries and in such other capacities as Indemnitee may serve at the request of the Company from time to time, and by its execution of this Agreement the Company confirms its request that Indemnitee serve as a director or officer and in such other capacities. Indemnitee shall be entitled to resign or otherwise terminate such service with immediate effect at any time, and neither such resignation or termination nor the length of such service shall affect Indemnitee’s rights under this Agreement. This Agreement shall not constitute an employment agreement, supersede any employment agreement to which Indemnitee is a party or create any right of Indemnitee to continued employment or appointment.

 

 

3.             Indemnification.

 

(a)           General Indemnification. The Company agrees to indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law in effect on the date hereof or as amended to increase the scope of permitted indemnification, against all Expenses, losses, and liabilities (including all interest, taxes, assessments and other charges in connection therewith) incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding or part thereof in any way connected with, resulting from or relating to Indemnitee’s Corporate Status.

 

(b)           Additional Indemnification Rights Regarding Enforcement Expenses. Without limiting the foregoing, in the event any Proceeding is initiated by Indemnitee, the Company, or any other person to enforce or interpret this Agreement or any rights of Indemnitee to indemnification or advancement of Expenses (or related obligations of Indemnitee) under the Company’s or any such subsidiary’s certificate of incorporation, bylaws, or other organizational agreement or instrument, any other agreement to which Indemnitee and the Company or any of its subsidiaries are party, any vote of stockholders or directors of the Company or any of its subsidiaries, the DGCL, any other applicable law, or any liability insurance policy, the Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding in proportion to the success achieved by Indemnitee in such Proceeding and the efforts required to obtain such success, as determined by the court presiding over such Proceeding.

 

(c)           Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Expenses, losses and liabilities incurred by Indemnitee, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion.

 

(d)           Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the certificate of incorporation, bylaws or other organizational agreement or instrument of the Company or any of its subsidiaries, any other agreement, any vote of stockholders or directors, the DGCL, any other applicable law or any liability insurance policy.

 

(e)           Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated under this Agreement to indemnify Indemnitee:

 

(i)            For Expenses incurred in connection with Proceedings initiated or brought voluntarily by the Indemnitee and not by way of defense, counterclaim or crossclaim, except (x) as contemplated by Section 3(b), (y) in specific cases if the Board has approved the initiation or bringing of such Proceeding, and (z) as may be required by law.

 

 

(ii)           For an accounting or disgorgement of profits arising from the purchase and sale by Indemnitee of securities within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar provisions of any federal, state or local law if the final, non-appealable judgment of a court of competent jurisdiction finds Indemnitee to be liable for disgorgement under such Section 16(b).

 

(iii)          For any compensation disgorged by a director or officer pursuant to an enforcement action under Section 304 of the Sarbanes-Oxley Act or for violations of Regulation BTR.

 

(iv)          On account of Indemnitee’s conduct that is established by a final, non-appealable judgment of a court of competent jurisdiction as knowingly fraudulent, deliberately dishonest or constituting willful misconduct.

 

(v)           For which payment is actually made to Indemnitee under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment actually received by Indemnitee under such insurance, clause, bylaw or agreement.

 

(vi)          if and to the extent indemnification is prohibited by applicable law.

 

(f)            Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute such documents and do such acts as the Company may reasonably request to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

 

4.             Advancement of Expenses.

 

The Company shall pay all Expenses incurred by Indemnitee in connection with any Proceeding in any way connected with, resulting from or relating to Indemnitee’s Corporate Status, other than a Proceeding initiated by Indemnitee for which the Company would not be obligated to indemnify Indemnitee pursuant to Section 3(e)(i), in advance of the final disposition (in accordance with Section 5(c) hereof) of such Proceeding and without regard to whether Indemnitee will ultimately be entitled to be indemnified for such Expenses and without regard to whether an Adverse Determination has been made, except as contemplated by the last sentence of Section 5(f) hereof. The right to advances under this Section 4 shall in all events continue until final disposition of any Proceeding, including any appeal therein. Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, and Indemnitee shall repay such amounts advanced only if and to the extent that it shall ultimately be determined in a decision by a court of competent jurisdiction from which no appeal can be taken that Indemnitee is not entitled to be indemnified by the Company for such Expenses. The right to advancement described in this Section 4 is vested. Such repayment obligation shall be unsecured and shall not bear interest. The Company shall not impose on Indemnitee additional conditions to advancement or require from Indemnitee additional undertakings regarding repayment.

 

 

5.             Indemnification Procedure.

 

(a)           Notice of Proceeding; Cooperation. Indemnitee shall give the Company notice in writing as soon as practicable, and in any event, no later than 30 days after Indemnitee becomes aware, of any Proceeding for which indemnification will or could be sought under this Agreement, provided that any failure or delay in giving such notice shall not relieve the Company of its obligations under this Agreement unless and to the extent that (i) none of the Company and its subsidiaries are party to or aware of such Proceedings and (ii) the Company is materially prejudiced by such failure.

 

(b)           Settlement. The Company shall not, without the prior written consent of Indemnitee, which consent may be withheld in Indemnitee’s sole discretion, effect any settlement of any Proceeding against Indemnitee or which could have been brought against Indemnitee unless such settlement solely involves the payment of money by persons other than Indemnitee and includes an unconditional release of Indemnitee from all liability on any matters that are the subject of such Proceeding and an acknowledgment that Indemnitee denies all wrongdoing in connection with such matters. The Company shall not be obligated to indemnify Indemnitee against amounts paid in settlement of a Proceeding against Indemnitee if such settlement is effected by Indemnitee without the Company’s prior written consent, which consent shall not be unreasonably withheld.

 

(c)           Request for Payment; Timing of Payment. To obtain indemnification payments or advances under this Agreement, Indemnitee shall submit to the Company a written request therefor, together with such invoices or other supporting information as may be reasonably requested by the Company and reasonably available to Indemnitee. The Company shall make any indemnification payments to Indemnitee required hereunder no later than 30 days, and any advances to Indemnitee no later than 20 days, after receipt of the written request of Indemnitee.

 

(d)           Determination. The Company intends that Indemnitee shall be indemnified to the fullest extent permitted by law as provided in Section 3 hereof and that no Determination shall be required in connection with such indemnification. In no event shall a Determination be required either in connection with advancement of Expenses pursuant to Section 4 hereof or in connection with indemnification for Expenses incurred as a witness or incurred in connection with any Proceeding or portion thereof with respect to which Indemnitee has been successful on the merits or otherwise. Any decision that a Determination is required by law in connection with any other claim for indemnification by Indemnitee, and any such Determination, shall be made within 30 days after receipt of Indemnitee’s written request for indemnification, as follows:

 

(i)            If no Change in Control has occurred, (w) by a majority vote of the directors of the Company who are not parties to such Proceeding, even though less than a quorum, with the advice of Independent Legal Counsel, or (x) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, with the advice of Independent Legal Counsel, or (y) if there are no such directors, or if such directors so direct, by Independent Legal Counsel in a written opinion to the Company and Indemnitee, or (z) by the stockholders of the Company.

 

 

(ii)           If a Change in Control has occurred, by Independent Legal Counsel in a written opinion to the Company and Indemnitee.

 

The Company shall pay all Expenses incurred by Indemnitee in connection with a Determination.

 

(e)           Independent Legal Counsel. If no Change in Control has occurred, Independent Legal Counsel shall be selected by the Board and approved by Indemnitee, which approval shall not be unreasonably withheld or delayed. If a Change in Control has occurred, Independent Legal Counsel shall be selected by Indemnitee and approved by the Company, which approval shall not be unreasonably withheld or delayed. The Company shall pay the fees and expenses of Independent Legal Counsel and indemnify Independent Legal Counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to its engagement pursuant to this Agreement.

 

(f)            Consequences of Determination; Remedies of Indemnitee. The Company shall be bound by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is made, or if for any other reason the Company does not make timely indemnification payments or advances of Expenses, Indemnitee shall have the right to commence a Proceeding before a court of competent jurisdiction to challenge such Adverse Determination and/or to require the Company to make such payments or advances. Indemnitee shall be entitled to be indemnified for all Expenses incurred in connection with such a Proceeding in accordance with Section 3(b) hereof and to have such Expenses advanced by the Company in accordance with Section 4 hereof. If Indemnitee fails to timely challenge an Adverse Determination, or if Indemnitee challenges an Adverse Determination and such Adverse Determination has been upheld by a final judgment of a court of competent jurisdiction from which no appeal can be taken, then, to the extent and only to the extent required by such Adverse Determination or final judgment, the Company shall not be obligated to indemnify or advance Expenses to Indemnitee under this Agreement.

 

(g)           Presumptions; Burden and Standard of Proof. In connection with any Determination, or any review of any Determination, by any person, including a court:

 

(i)            It shall be a presumption that a Determination is not required.

 

(ii)           It shall be a presumption that Indemnitee has met the applicable standard of conduct and that indemnification of Indemnitee is proper in the circumstances.

 

(iii)          The burden of proof shall be on the Company to overcome the presumptions set forth in the preceding clauses (i) and (ii), and each such presumption shall only be overcome if the Company establishes that there is no reasonable basis to support it.

 

 

(iv)          The termination of any Proceeding by judgment, order, finding, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that indemnification is not proper or that Indemnitee did not meet the applicable standard of conduct, that the Proceeding was not successful on the merits or otherwise or that a court has determined that indemnification is not permitted by this Agreement or otherwise.

 

(v)           Neither the failure of any person or persons to have made a Determination nor an Adverse Determination by any person or persons shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee did not meet the applicable standard of conduct, and any Proceeding commenced by Indemnitee pursuant to Section 5(f) shall be de novo with respect to all determinations of fact and law.

 

6.             Directors and Officers Liability Insurance.

 

(a)           Maintenance of Insurance. So long as the Company or any of its subsidiaries maintains liability insurance for any directors, officers, employees or agents of any such person, the Company shall ensure that Indemnitee is covered by such insurance in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s and its subsidiaries’ then current directors and officers. If at any date (i) such insurance ceases to cover acts and omissions occurring during all or any part of the period of Indemnitee’s Corporate Status or (ii) neither the Company nor any of its subsidiaries maintains any such insurance, the Company shall ensure that Indemnitee is covered, with respect to acts and omissions prior to such date, for at least six years (or such shorter period as is available on commercially reasonable terms) from such date, by other directors and officers liability insurance, in amounts and on terms (including the portion of the period of Indemnitee’s Corporate Status covered) no less favorable to Indemnitee than the amounts and terms of the liability insurance maintained by the Company on the date hereof.

 

(b)           Notice to Insurers. Upon receipt of notice of a Proceeding pursuant to Section 5(a) hereof, the Company shall give or cause to be given prompt notice of such Proceeding to all insurers providing liability insurance in accordance with the procedures set forth in all applicable or potentially applicable policies. The Company shall thereafter take all necessary action to cause such insurers to pay all amounts payable in accordance with the terms of such policies.

 

7.            [Priority of Payment. The Company hereby acknowledges that Indemnitee has or may have in the future certain rights to indemnification, advancement of expenses and/or insurance provided by [Name of Fund] and certain of its affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the certificate of incorporation or bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the Fund Indemnitors, and, (iii)  that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 7.]¹

 

^1/        Use Section 7 if Indemnitee is an investment fund’s representative on the board of directors.

 

 

8.             [Reserved]

 

9.             Miscellaneous.

 

(a)           Non-Circumvention. The Company shall not seek or agree to any order of any court or other governmental authority that would prohibit or otherwise interfere, and shall not take or fail to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting or otherwise interfering, with the performance of the Company’s indemnification, advancement or other obligations under this Agreement.

 

(b)           Severability. If any section or part of this Agreement shall be adjudged invalid by a court of competent jurisdiction, the remainder of the Agreement shall not be affected thereby and shall remain in full force and effect.

 

(c)           Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered personally, or by electronic mail or facsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by a recognized next-day courier service or (iii) on the third business day following the date of mailing if delivered by domestic registered or certified mail, properly addressed, or on the fifth business day following the date of mailing if sent by airmail from a country outside of the United States of America, to Indemnitee at the address shown on the signature page of this Agreement, to the Company at the address shown on the signature page of this Agreement, or in either case as subsequently modified by written notice.

 

(d)           Amendment and Termination; Waivers. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by all the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

 

(e)           Successors and Assigns. This Agreement shall be binding upon the Company and its respective successors and assigns, including without limitation any acquiror of all or substantially all of the Company’s assets or business, any person (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) that acquires beneficial ownership of securities of the Company representing more than 20% of the total voting power represented by the Company’s then outstanding Voting Securities and any survivor of any merger or consolidation to which the Company is party, and shall inure to the benefit of and be enforceable by Indemnitee and Indemnitee’s estate, spouses, heirs, executors, personal or legal representatives, administrators and assigns. The Company shall require and cause any such successor, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement as if it were named as the Company herein, and the Company shall not permit any such purchase of assets or business, acquisition of securities or merger or consolidation to occur until such written agreement has been executed and delivered. No such assumption and agreement shall relieve the Company of any of its obligations hereunder, and this Agreement shall not otherwise be assignable by the Company. This Agreement is personal in nature and neither of the parties hereto shall, without the consent of the other, assign or delegate this Agreement or any rights or obligations. Without limiting the generality or effect of the foregoing, Indemnitee’s right to receive payments hereunder shall not be assignable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by Indemnitee’s will or by estate law, and, in the event of any attempted assignment or transfer contrary to this Section 9(e), the Company shall have no liability to pay any amount so attempted to be assigned or transferred.

 

(f)            Choice of Law; Consent to Jurisdiction. This Agreement shall be governed by and its provisions construed in accordance with the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware, without regard to the conflict of law principles thereof. The Company and Indemnitee each hereby irrevocably consents to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement and agrees that any action instituted under this Agreement shall be brought only in the state courts of the State of Delaware.

 

(g)           Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, provided that the provisions hereof shall not supersede the provisions of the Company’s certificate of incorporation, bylaws or other organizational agreement or instrument, any other agreement, any vote of stockholders or directors, the DGCL or other applicable law, to the extent any such provisions shall be more favorable to Indemnitee than the provisions hereof.

 

(h)           Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

 

[Remainder of this page intentionally left blank]

 

 

In Witness Whereof, the parties hereto have executed this Agreement as of the date first above written.

 

	COMPANY
	ArriVent BioPharma, Inc.
	By:
	Name:
	Title:

 

	Address:

 

	INDEMNITEE
	By:
	Name:
	Title:

 

	Address:

 

 

 

Exhibit 10.2

 

ARRIVENT BIOPHARMA, INC.

 

2021 EMPLOYEE, DIRECTOR AND CONSULTANT EQUITY INCENTIVE PLAN

 

1.

DEFINITIONS.

 

Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this ArriVent Biopharma, Inc. 2021 Employee, Director and Consultant Equity Incentive Plan, have the following meanings:

 

Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the term “Administrator” means the Committee.

 

Affiliate means a corporation or other entity which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.

 

Agreement means an agreement between the Company and a Participant pertaining to a Stock Right delivered pursuant to the Plan, in such form as the Administrator shall approve.

 

Board of Directors means the Board of Directors of the Company.

 

Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance or non-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.

 

Code means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto.

 

Committee means the committee of the Board of Directors, if any, to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.

 

Common Stock means shares of the Company’s common stock, $0.0001 par value per share.

 

Company means ArriVent Biopharma, Inc., a Delaware corporation.

 

Consultant means any natural person who is an advisor or consultant who provides bona fide services to the Company or its Affiliates, provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.

 

 

Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.

 

Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.

 

Fair Market Value of a Share of Common Stock means:

 

(1)            If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;

 

(2)            If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for the most recent trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and

 

(3)            If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good faith, shall determine in compliance with applicable laws.

 

ISO means a stock option intended to qualify as an incentive stock option under Section 422 of the Code.

 

Non-Qualified Option means a stock option which is not intended to qualify as an ISO.

 

Option means an ISO or Non-Qualified Option granted under the Plan.

 

Participant means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.

 

Plan means this ArriVent Biopharma, Inc. 2021 Employee, Director and Consultant Equity Incentive Plan.

 

Securities Act means the Securities Act of 1933, as amended.

 

Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.

 

 

Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.

 

Stock Grant means a grant by the Company of Shares under the Plan.

 

Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.

 

Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.

 

2.

PURPOSES OF THE PLAN.

 

The Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options, Stock Grants and Stock-Based Awards.

 

3.

SHARES SUBJECT TO THE PLAN.

 

(a)           The number of Shares which may be issued from time to time pursuant to this Plan shall initially be equal to 12,222,222 shares of Common Stock, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan, and shall as of the Second Closing (as such term is defined in that certain Series A Preferred Stock Purchase Agreement dated on or about June 9, 2021 by and among the Company and the Purchasers named therein), be increased to such number of Shares as shall be equal to 15% of the total number of shares of outstanding Common Stock (on an as converted, fully-diluted basis) as of immediately following the consummation of the Second Closing, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.

 

(b)           The maximum number of Shares that may be issued as ISOs under the Plan shall be 30,000,000.

 

4.

ADMINISTRATION OF THE PLAN.

 

The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:

 

(a)           Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;

 

(b)           Amend any term or condition of any outstanding Stock Right, including, without limitation, other than reducing the exercise price or purchase price, accelerate the vesting schedule or extend the expiration date, provided that (i) such term or condition as amended is permitted by the Plan; any such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including, but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below with respect to ISOs and pursuant to Section 409A of the Code; and

 

 

(c)           Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right;

 

provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of potential tax consequences under Section 409A of the Code and preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.

 

To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time.

 

5.

ELIGIBILITY FOR PARTICIPATION.

 

The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees who are deemed to be residents of the United States for tax purposes. Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.

 

6.

TERMS AND CONDITIONS OF OPTIONS.

 

Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:

 

(a)            Non-Qualified Options: Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non-Qualified Option:

 

(i)

Exercise Price: Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which exercise price shall be determined by the Administrator and shall be at least equal to the Fair Market Value per share of the Common Stock on the date of grant of the Option.

 

 

 

(ii)

Number of Shares: Each Option Agreement shall state the number of Shares to which it pertains.

 

(iii)

Vesting Periods: Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain performance conditions or the attainment of stated goals or events.

 

(iv)

Additional Conditions: Exercise of any Option may be conditioned upon the Participant’s execution of a stockholders agreement in a form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including requirements that:

 

A.

The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and

 

B.

The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.

 

(b)            ISOs: Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident of the United States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:

 

(i)

Minimum standards: The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(a) above, except subsection (i) thereunder.

 

(ii)

Exercise Price: Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the Code:

 

A.

Ten percent (10%) or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than one hundred percent (100%) of the Fair Market Value per share of the Common Stock on the date of grant of the Option; or

 

B.

More than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of the Common Stock on the date of grant of the Option.

 

 

(iii)

Term of Option: For Participants who own:

 

A.

Ten percent (10%) or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or

 

B.

More than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five (5) years from the date of the grant or at such earlier time as the Option Agreement may provide.

 

(iv)

Limitation on Yearly Exercise: The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed one hundred thousand dollars ($100,000).

 

7.

TERMS AND CONDITIONS OF STOCK GRANTS.

 

Each Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:

 

(a)           Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by the Delaware General Corporation Law, if any, on the date of the grant of the Stock Grant;

 

(b)           Each Agreement shall state the number of Shares to which the Stock Grant pertains; and

 

(c)           Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time and events upon which such rights shall accrue and the purchase price therefor, if any.

 

8.

TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.

 

The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company. Each Agreement shall include the terms of any right of the Company including the right to terminate the Stock-Based Award without the issuance of Shares, the terms of any vesting conditions or events upon which Shares shall be issued. Under no circumstances may the Agreement covering stock appreciation rights (a) have a base price (per share) that is less than the Fair Market Value per share of Common Stock on the date of grant or (b) expire more than ten years following the date of grant.

 

 

The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8.

 

9.

EXERCISE OF OPTIONS AND ISSUE OF SHARES.

 

An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise price for the number of Shares as to which the Option is being exercised, or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being exercised, or (d) at the discretion of the Administrator (after consideration of applicable securities, tax and accounting implications), by delivery of the grantee’s personal recourse note bearing interest payable not less than annually at no less than one hundred (100%) of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (e) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator, or (f) at the discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above or (g) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

 

The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.

 

 

10.

PAYMENT IN CONNECTION WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

 

Any Stock Grant or Stock-Based Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being granted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of payment to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the discretion of the Administrator (after consideration of applicable securities, tax and accounting implications), by delivery of the grantee’s personal recourse note bearing interest payable not less than annually at no less than one hundred percent (100%) of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (d) at the discretion of the Administrator, by any combination of (a), (b) and (c) above; or (e) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine.

 

The Company shall when required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance.

 

11.

RIGHTS AS A SHAREHOLDER.

 

No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right except after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate exercise or purchase price, if any, for the Shares being purchased and registration of the Shares in the Company’s share register in the name of the Participant.

 

12.

ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.

 

By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement, provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above during the Participant’s lifetime a Stock Right shall only be exercisable by or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.

 

13.

EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:

 

(a)           A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.

 

 

(b)           Except as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.

 

(c)           The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the Participant’s Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.

 

(d)           Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then such Participant shall forthwith cease to have any right to exercise any Option.

 

(e)           A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than three months, unless pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option on the date that is six months following the commencement of such leave of absence.

 

(f)            Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.

 

14.

EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.

 

Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all of his or her outstanding Options have been exercised:

 

(a)           All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will immediately be forfeited.

 

(b)           Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.

 

 

15.

EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement,

 

(a)           A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant:

 

(i)

To the extent that the Option has become exercisable but has not been exercised on the date of the Participant’s termination of service due to Disability; and

 

(ii)

In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.

 

(b)           A Disabled Participant may exercise the Option only within the period ending one year after the date of the Participant’s termination of service due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had not been terminated due to Disability and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.

 

(c)           The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

 

16.

EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except as otherwise provided in a Participant’s Option Agreement,

 

(a)           In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors:

 

(i)

To the extent that the Option has become exercisable but has not been exercised on the date of death; and

 

(ii)

In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.

 

(b)            If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.

 

 

17.

EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS AND STOCK-BASED AWARDS.

 

In the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required at the time, such grant shall terminate.

 

For purposes of this Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant or a Stock-Based Award has been issued under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

 

In addition, for purposes of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.

 

18.

EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE, DEATH OR DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service (whether as an Employee, director or Consultant), other than termination for Cause, death or Disability for which events there are special rules in Paragraphs 19, 20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant or Stock-Based Award as to which the Company’s forfeiture or repurchase rights have not lapsed.

 

19.

EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR CAUSE.

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:

 

(a)           All Shares subject to any Stock Grant or Stock-Based Award whether or not then subject to forfeiture or repurchase shall be immediately subject to repurchase by the Company at the per share price of par value.

 

(b)           Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant or Stock-Based Award that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.

 

 

20.

EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of Disability as would have lapsed had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.

 

The Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

 

21.

EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT .

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of death as would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s date of death.

 

22.

PURCHASE FOR INVESTMENT.

 

Unless the offering and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue Shares under the Plan unless and until the following conditions have been fulfilled:

 

(a)           The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the following legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such exercise or such grant:

 

“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”

 

 

(b)           At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued in compliance with the Securities Act without registration thereunder.

 

23.

DISSOLUTION OR LIQUIDATION OF THE COMPANY.

 

Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.

 

24.

ADJUSTMENTS.

 

Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement:

 

(a)           Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, to the exercise, base or purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraphs 3 and 4 shall also be proportionately adjusted upon the occurrence of such events.

 

(b)           Corporate Transactions. If the Company is to be consolidated with or acquired by another entity in a merger, consolidation, sale of all or substantially all of the Company’s assets or the acquisition of all of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a single entity other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.

 

 

With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived upon such Corporate Transaction). For purposes of determining such payments, in the case of a Corporate Transaction the consideration for which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.

 

In taking any of the actions permitted under this Paragraph 24(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.

 

(c)           Recapitalization or Reorganization. In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.

 

(d)           Adjustments to Stock-Based Awards. Upon the happening of any of the events described in Subparagraphs (a), (b) or (c) above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 24, including, but not limited to the effect of any Corporate Transaction and, subject to Paragraph 4, its determination shall be conclusive.

 

(e)           Modification of Options. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a), (b) or (c) above with respect to Options shall be made only after the Administrator determines whether such adjustments would (i) constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or (ii) cause any adverse tax consequences for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines that such adjustments made with respect to Options would constitute a modification or other adverse tax consequence, it may in its discretion refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).

 

 

25.

ISSUANCES OF SECURITIES.

 

Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.

 

26.

FRACTIONAL SHARES.

 

No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.

 

27.

WITHHOLDING.

 

In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer.

 

28.

NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

 

Each Employee who receives an ISO shall notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

 

29.

TERMINATION OF THE PLAN.

 

The Plan will terminate on the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.

 

 

30.

AMENDMENT OF THE PLAN AND AGREEMENTS.

 

The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment as may be afforded ISOs under Section 422 of the Code (including deferral of taxation upon exercise), and to the extent necessary to qualify the Shares issuable under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her, unless such amendment is required by applicable law or necessary to preserve the economic value of such Stock Right. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant. Nothing in this Paragraph 30 shall limit the Administrator’s authority to take any action permitted pursuant to Paragraph 24 .

 

31.

EMPLOYMENT OR OTHER RELATIONSHIP.

 

Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.

 

32.

GOVERNING LAW.

 

This Plan shall be construed and enforced in accordance with the law of the State of Delaware.

 

 

Amendment No. 1 to

 

2021 Employee, Director and Consultant Equity Incentive Plan

 

of

 

Arrivent Biopharma, Inc.

 

The ArriVent BioPharma, Inc. 2021 Employee, Director and Consultant Equity Incentive Plan (as amended, the “Plan”) is hereby amended by deleting Section 3(a) and 3(b) and replacing it in its entirety with:

 

“              (a)         The number of Shares which may be issued from time to time pursuant to this Plan shall initially be equal to 40,133,334 shares of Common Stock, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.

 

(b)        The maximum number of Shares that may be issued as ISOs under the Plan shall be 40,133,334.”

 

Except as expressly amended herein, the Plan and all of the provisions contained therein shall remain in full force and effect.

 

Date approved by the Board of Directors of ArriVent BioPharma, Inc.: December 14, 2022

 

Date approved = by the stockholders ArriVent BioPharma, Inc.: December 16, 2022

 

 

Amendment No. 2 to

 

2021 Employee, Director and Consultant Equity Incentive Plan

 

of

 

Arrivent Biopharma, Inc.

 

The ArriVent BioPharma, Inc. 2021 Employee, Director and Consultant Equity Incentive Plan (as amended, the “Plan”) is hereby amended by deleting Section 3(a) and 3(b) and replacing each such section in its entirety with:

 

“              (a)         The number of Shares which may be issued from time to time pursuant to this Plan shall initially be equal to 41,789,524 shares of Common Stock, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.

 

(b)           The maximum number of Shares that may be issued as ISOs under the Plan shall be 41,789,524.”

 

Except as expressly amended herein, the Plan and all of the provisions contained therein shall remain in full force and effect.

 

Date approved by the Board of Directors of ArriVent BioPharma, Inc.: March 14, 2023

 

Date approved by the stockholders of ArriVent BioPharma, Inc.: March 22, 2023

 

 

ARRIVENT BIOPHARMA, INC.

 

Stock Option Grant Notice

 

Stock Option Grant under the Company’s

 

2021 Employee, Director and Consultant Equity Incentive Plan

 

This Grant Notice sets forth the terms and conditions of the option grant/equity award made by the Company to the Participant named below, which option grant/equity award is being tracked and managed by the Company through the online system maintained by eShares, Inc., DBA Carta, Inc. (“Carta”). Carta is currently serving as the Company’s transfer agent. By the Participant’s entry of his/her/its full name within the approval process of Carta’s online platform (the “Carta Platform”), the Participant’s signature shall be deemed applied to this Grant Notice, and this Grant Notice shall constitute one of the “Documents” referred to by Carta in the Participant’s approval on the Carta System.

 

1.	Name and Email Address of Participant:	As provided in the corresponding entry for this Grant on the Carta Platform (the “Grant Entry”)
2.	Date of Option Grant:	See the Grant Entry
3.	Type of Grant:	See the Grant Entry
4.	Maximum Number of Shares for which this Option is exercisable :	See the Grant Entry
5.	Exercise (purchase) price per share:	See the Grant Entry
6.	Option Expiration Date:	See the Grant Entry
7.	Vesting Start Date:	See the Grant Entry
8.	Vesting Schedule:	See the Grant Entry

 

The foregoing rights are cumulative and are subject to the other terms and conditions of this Agreement and the Company’s 2021 Employee, Director and Consultant Equity Incentive Plan.

 

The Company and the Participant acknowledge receipt of this Stock Option Grant Notice and agree to the terms of the Stock Option Agreement attached hereto and incorporated by reference herein, the Company’s 2021 Employee, Director and Consultant Equity Incentive Plan and the terms of this Option Grant as set forth above.

 

 

ARRIVENT BIOPHARMA, INC.

 

STOCK OPTION AGREEMENT- INCORPORATED TERMS AND CONDITIONS

 

AGREEMENT made as of the date of grant set forth in the Stock Option Grant Notice by and between ArriVent Biopharma, Inc. (the “Company”), a Delaware corporation, and the individual whose name appears on the Stock Option Grant Notice (the “Participant”).

 

WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its common stock, $0.0001 par value per share (the “Shares”), under and for the purposes set forth in the Company’s 2021 Employee, Director and Consultant Equity Incentive Plan (the “Plan”);

 

WHEREAS, the Company and the Participant understand and agree that any terms used and not defined herein have the same meanings as in the Plan; and

 

WHEREAS, the Company and the Participant each intend that the Option granted herein shall be of the type set forth in the Stock Option Grant Notice.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

 

1.             GRANT OF OPTION.

 

The Company hereby grants to the Participant the right and option to purchase all or any part of an aggregate of the number of Shares set forth in the Stock Option Grant Notice, on the terms and conditions and subject to all the limitations set forth herein, under United States securities and tax laws, and in the Plan, which is incorporated herein by reference. The Participant acknowledges receipt of a copy of the Plan.

 

2.             EXERCISE PRICE.

 

The exercise price of the Shares covered by the Option shall be the amount per Share set forth in the Stock Option Grant Notice, subject to adjustment, as provided in the Plan, in the event of a stock split, reverse stock split or other events affecting the holders of Shares after the date hereof (the “Exercise Price”). Payment shall be made in accordance with Paragraph 9 of the Plan.

 

3.             EXERCISABILITY OF OPTION.

 

Subject to the terms and conditions set forth in this Agreement and the Plan, the Option granted hereby shall become vested and exercisable as set forth in the Stock Option Grant Notice and is subject to the other terms and conditions of this Agreement and the Plan.

 

 

4.             TERM OF OPTION.

 

This Option shall terminate on the Option Expiration Date as specified in the Stock Option Grant Notice and, if this Option is designated in the Stock Option Grant Notice as an ISO and the Participant owns as of the date hereof more than 10% of the total combined voting power of all classes of capital stock of the Company or an Affiliate, such date may not be more than five years from the date of this Agreement, but shall be subject to earlier termination as provided herein or in the Plan.

 

If the Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate for any reason other than the death or Disability of the Participant, or termination of the Participant for Cause (the “Termination Date”), the Option to the extent then vested and exercisable pursuant to Section 3 hereof as of the Termination Date, and not previously terminated in accordance with this Agreement, may be exercised within three (3) months after the Termination Date, or on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice, whichever is earlier, but may not be exercised thereafter except as set forth below. In such event, the unvested portion of the Option shall not be exercisable and shall expire and be cancelled on the Termination Date.

 

If this Option is designated in the Stock Option Grant Notice as an ISO and the Participant ceases to be an Employee of the Company or of an Affiliate but continues after termination of employment to provide service to the Company or an Affiliate as a director or Consultant, this Option shall continue to vest in accordance with Section 3 above as if this Option had not terminated until the Participant is no longer providing services to the Company. In such case, this Option shall automatically convert and be deemed a Non-Qualified Option as of the date that is three (3) months from termination of the Participant's employment and this Option shall continue on the same terms and conditions set forth herein until such Participant is no longer providing service to the Company or an Affiliate.

 

Notwithstanding the foregoing, in the event of the Participant’s death within three (3) months after the Termination Date, the Participant’s Survivors may exercise the Option within one (1) year after the Termination Date, but in no event after the Option Expiration Date as specified in the Stock Option Grant Notice, and this Option shall thereupon terminate.

 

In the event the Participant’s service is terminated by the Company or an Affiliate for Cause, the Participant’s right to exercise any unexercised portion of this Option even if vested shall cease immediately as of the time the Participant is notified his or her service is terminated for Cause, and this Option shall thereupon terminate. Notwithstanding anything herein to the contrary, if subsequent to the Participant’s termination, but prior to the exercise of the Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then the Participant shall immediately cease to have any right to exercise the Option and this Option shall thereupon terminate.

 

 

In the event of the Disability of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, as determined in accordance with the Plan, the Option shall be exercisable within one (1) year after the Participant’s termination of service due to Disability or, if earlier, on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice. In such event, the Option shall be exercisable:

 

(a)

to the extent that the Option has become exercisable but has not been exercised as of the date of the Participant’s termination of service due to Disability; and

 

(b)

in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.

 

In the event of the death of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors within one year after the date of death of the Participant or, if earlier, on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice. In such event, the Option shall be exercisable:

 

(x)

to the extent that the Option has become exercisable but has not been exercised as of the date of death; and

 

(y)

in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.

 

5.             METHOD OF EXERCISING OPTION.

 

Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Company or its designee, in substantially the form of Exhibit A attached hereto (or in such other form acceptable to the Company, which may include electronic notice). Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Company). Payment of the Exercise Price for such Shares shall be made in accordance with Paragraph 9 of the Plan. The Company shall deliver such Shares as soon as practicable after the notice shall be received, provided, however, that the Company may delay issuance of such Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including, without limitation, state securities or “blue sky” laws). The Shares as to which the Option shall have been so exercised shall be registered in the Company’s share register in the name of the person so exercising the Option (or, if the Option shall be exercised by the Participant and if the Participant shall so request in the notice exercising the Option, shall be registered in the Company’s share register in the name of the Participant and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person exercising the Option. In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person other than the Participant, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Option. All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

 

 

6.             PARTIAL EXERCISE.

 

Exercise of this Option to the extent above stated may be made in part at any time and from time to time within the above limits, except that no fractional share shall be issued pursuant to this Option.

 

7.             NON-ASSIGNABILITY.

 

The Option shall not be transferable by the Participant otherwise than by will or by the laws of descent and distribution. If this Option is a Non-Qualified Option then it may also be transferred pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder. Except as provided above in this paragraph, the Option shall be exercisable, during the Participant’s lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant’s guardian or representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon the Option shall be null and void.

 

8.             NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

 

The Participant shall have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company’s share register in the name of the Participant. Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date of such registration.

 

9.             ADJUSTMENTS.

 

The Plan contains provisions covering the treatment of Options in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment with respect to stock subject to Options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference.

 

 

10.           TAXES.

 

The Participant acknowledges and agrees that (i) any income or other taxes due from the Participant with respect to this Option or the Shares issuable upon exercise of this Option shall be the Participant’s responsibility; (ii) the Participant was free to use professional advisors of his or her choice in connection with this Agreement, has received advice from his or her professional advisors in connection with this Agreement, understands its meaning and import, and is entering into this Agreement freely and without coercion or duress; (iii) the Participant has not received and is not relying upon any advice, representations or assurances made by or on behalf of the Company or any Affiliate or any Employee of or counsel to the Company or any Affiliate regarding any tax or other effects or implications of the Option, the Shares or other matters contemplated by this Agreement and (iv) neither the Administrator, the Company, its Affiliates, nor any of its officers or directors, shall be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the Internal Revenue Service were to determine that the Option constitutes deferred compensation under Section 409A of the Code.

 

If this Option is designated in the Stock Option Grant Notice as a Non-Qualified Option or if the Option is an ISO and is converted into a Non-Qualified Option and such Non-Qualified Option is exercised, the Participant agrees that the Company may withhold from the Participant’s remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes attributable to such amount that is considered compensation includable in such person’s gross income. At the Company’s discretion, the amount required to be withheld may be withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the Participant on exercise of the Option. The Participant further agrees that, if the Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the Company’s income tax withholding obligation, the Participant will reimburse the Company on demand, in cash, for the amount under-withheld.

 

11.           PURCHASE FOR INVESTMENT.

 

Unless the offering and sale of the Shares to be issued upon the particular exercise of the Option shall have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise unless the Company has determined that such exercise and issuance would be exempt from the registration requirements of the 1933 Act and until the following conditions have been fulfilled:

 

(a)

The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon any certificate(s) evidencing the Shares issued pursuant to such exercise:

 

“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws;” and

 

 

(b)

If the Company so requires, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder. Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws).

 

12.            RESTRICTIONS ON TRANSFER OF SHARES.

 

12.1          The Shares acquired by the Participant pursuant to the exercise of the Option granted hereby shall not be transferred by the Participant except as permitted herein.

 

12.2          Intentionally omitted.

 

12.3          It shall be a condition precedent to the validity of any sale or other transfer of any Shares by the Participant that the following restrictions be complied with (except as otherwise provided in this Section 12):

 

(i)

No Shares owned by the Participant may be sold, pledged or otherwise transferred (including by gift or devise) to any person or entity, voluntarily, or by operation of law, except in accordance with the terms and conditions hereinafter set forth.

 

 

(ii)

Before selling or otherwise transferring all or part of the Shares, the Participant shall give written notice of such intention to the Company, which notice shall include the name of the proposed transferee, the proposed purchase price per share, the terms of payment of such purchase price and all other matters relating to such sale or transfer and shall be accompanied by a copy of the binding written agreement of the proposed transferee to purchase the Shares of the Participant. Such notice shall constitute a binding offer by the Participant to sell to the Company such number of the Shares then held by the Participant as are proposed to be sold in the notice at the monetary price per share designated in such notice, payable on the terms offered to the Participant by the proposed transferee (provided, however, that the Company shall not be required to meet any non-monetary terms of the proposed transfer, including, without limitation, delivery of other securities in exchange for the Shares proposed to be sold). The Company shall give written notice to the Participant as to whether such offer has been accepted in whole by the Company within sixty (60) days after its receipt of written notice from the Participant. The Company may only accept such offer in whole and may not accept such offer in part. Such acceptance notice shall fix a time, location and date for the Closing on such purchase (“Closing Date”) which shall not be less than ten (10) nor more than sixty (60) days after the giving of the acceptance notice, provided, however, if any of the Shares to be sold pursuant to this Section 12.3 have been held by the Participant for less than six (6) months, then the Closing Date may be extended by the Company until no more than ten (10) days after such Shares have been held by the Participant for six (6) months if required under applicable accounting rules in effect at the time. The place for such Closing shall be at the Company’s principal office. At such Closing, the Participant shall accept payment as set forth herein and shall deliver to the Company in exchange therefor certificates for the number of Shares stated in the notice accompanied by duly executed instruments of transfer.

 

(iii)

If the Company shall fail to accept any such offer, the Participant shall be free to sell all, but not less than all, of the Shares set forth in his or her notice to the designated transferee at the price and terms designated in the Participant’s notice, provided that (i) such sale is consummated within six (6) months after the giving of notice by the Participant to the Company as aforesaid, and (ii) the transferee first agrees in writing to be bound by the provisions of this Section 12 so that such transferee (and all subsequent transferees) shall thereafter only be permitted to sell or transfer the Shares in accordance with the terms hereof, and the Company’s right of repurchase set forth in Section 12.2 above shall continue in accordance with its terms. After the expiration of such six (6) months, the provisions of this Section 12.3 shall again apply with respect to any proposed voluntary transfer of the Participant’s Shares.

 

(iv)

The restrictions on transfer contained in this Section 12.3 shall not apply to (a) transfers by the Participant to his or her spouse or children or to a trust for the benefit of his or her spouse or children, (b) transfers by the Participant to his or her guardian or conservator, and (c) transfers by the Participant, in the event of his or her death, to his or her executor(s) or administrator(s) or to trustee(s) under his or her will (collectively, “Permitted Transferees”); provided however, that in any such event the Shares so transferred in the hands of each such Permitted Transferee shall remain subject to this Agreement, and each such Permitted Transferee shall so acknowledge in writing as a condition precedent to the effectiveness of such transfer.

 

(v)

The provisions of this Section 12.3 may be waived by the Company. Any such waiver may be unconditional or based upon such conditions as the Company may impose.

 

 

12.4         In the event that the Participant or his or her successor in interest fails to deliver the Shares to be repurchased by the Company under this Agreement, the Company may elect (a) to establish a segregated account in the amount of the repurchase price, such account to be turned over to the Participant or his or her successor in interest upon delivery of such Shares, and (b) immediately to take such action as is appropriate to transfer record title of such Shares from the Participant to the Company and to treat the Participant and such Shares in all respects as if delivery of such Shares had been made as required by this Agreement. The Participant hereby irrevocably grants the Company a power of attorney which shall be coupled with an interest for the purpose of effectuating the preceding sentence.

 

12.5         In the event that (i) the Board of Directors and (ii) the holders of a majority of the then outstanding shares of Common Stock approve a Sale of the Company (as defined below), specifying that this Section 12.5 shall apply then the Participant hereby agrees as follows with respect to the Shares and any other equity securities of the Company which the Participant holds or otherwise exercises dispositive power (the “Drag Along Shares”):

 

(i)

in the event such Sale of the Company requires the approval of stockholders, (1) if the matter is to be brought to a vote at a stockholder meeting, after receiving proper notice of any meeting of stockholders of the Company to vote on the approval of a Sale of the Company, to be present, in person or by proxy, as a holder of Shares, at all such meetings and be counted for the purposes of determining the presence of a quorum at such meetings; and (2) to vote (in person, by proxy or by action by written consent, as applicable) all Shares in favor of such Sale of the Company and in opposition of 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)

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; and

 

(iii)

to sell to such third party on the terms offered by such third party the Drag Along Shares, or if the Approved Sale involves less than all of the outstanding capital stock of the Company, the Participant’s pro rata share of the Drag Along Shares, and 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.

 

As used herein, the following terms shall have the following respective meanings:

 

“Fully Diluted Common Shares” means, as of any calculation date, all shares of the Common Stock of the Company then outstanding, determined on an as-converted basis (and including, for this purpose, any and all shares of Common Stock issued or issuable upon conversion of the Company’s convertible preferred stock, but specifically excluding, for this purpose, any then outstanding options and warrants).

 

 

“Sale of the Company” 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 shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that, for the purpose of this clause (i) all shares of Common Stock issuable upon exercise of options or warrants outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of Common Stock are converted or exchanged);

 

(ii)

the sale, lease, transfer, exclusive license (other than an exclusive license that is approved by the Board of Directors, 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 of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise) 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 (other than an exclusive license that is approved by the Board of Directors or other disposition is to a wholly owned subsidiary of the Company; or

 

(iii)

any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred such that the stockholders of the Company immediately prior to the transaction or series of related transactions do not own a majority of the voting power of the surviving or acquiring entity following such transaction or series of transactions; other than any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof.

 

12.6         If the Company shall pay a stock dividend or declare a stock split on or with respect to any of its Common Stock, or otherwise distribute securities of the Company to the holders of its Common Stock, the number of shares of stock or other securities of the Company issued with respect to the shares then subject to the restrictions contained in this Agreement shall be added to the Shares subject to the Company’s rights to repurchase pursuant to this Agreement. If the Company shall distribute to its stockholders shares of stock of another corporation or equity in another entity, the shares of stock of such other corporation or equity in such other entity, distributed with respect to the Shares then subject to the restrictions contained in this Agreement, shall be added to the Shares subject to the Company’s rights to repurchase pursuant to this Agreement.

 

 

12.7         If the outstanding shares of Common Stock of the Company shall be subdivided into a greater number of shares or combined into a smaller number of shares, or in the event of a reclassification of the outstanding shares of Common Stock of the Company, or if the Company shall be a party to a merger, consolidation or capital reorganization, there shall be substituted for the Shares then subject to the restrictions contained in this Agreement such amount and kind of securities as are issued in such subdivision, combination, reclassification, merger, consolidation or capital reorganization in respect of the Shares subject immediately prior thereto to the Company’s rights to repurchase pursuant to this Agreement.

 

12.8         The Company shall not be required to transfer any Shares on its books which shall have been sold, assigned or otherwise transferred in violation of this Agreement, or to treat as owner of such Shares, or to accord the right to vote as such owner or to pay dividends to, any person or organization to which any such Shares shall have been so sold, assigned or otherwise transferred, in violation of this Agreement.

 

12.9         The provisions of Sections 12.1, 12.2 and 12.3 shall terminate upon the effective date of the registration of the Shares pursuant to the Securities Exchange Act of 1934.

 

12.10       The Participant agrees that in the event the Company proposes to offer for sale to the public any of its equity securities and such Participant is requested by the Company and any underwriter engaged by the Company in connection with such offering to sign an agreement restricting the sale or other transfer of Shares, then it will promptly sign such agreement and will not transfer, whether in privately negotiated transactions or to the public in open market transactions or otherwise, any Shares or other securities of the Company held by him or her during such period as is determined by the Company and the underwriters, not to exceed 180 days following the closing of the offering, plus such additional period of time as may be required to comply with FINRA Rules or similar rules promulgated by another regulatory authority (such period, the “Lock-Up Period”). Such agreement shall be in writing and in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to customary and prevailing terms and conditions. Notwithstanding whether the Participant has signed such an agreement, the Company may impose stop-transfer instructions with respect to the Shares or other securities of the Company subject to the foregoing restrictions until the end of the Lock-Up Period.

 

12.11        The Participant acknowledges and agrees that neither the Company, its shareholders nor its directors and officers, has any duty or obligation to disclose to the Participant any material information regarding the business of the Company or affecting the value of the Shares before, at the time of, or following a termination of the service of the Participant by the Company, including, without limitation, any information concerning plans for the Company to make a public offering of its securities or to be acquired by or merged with or into another firm or entity.

 

12.12       All certificates representing the Shares to be issued to the Participant pursuant to this Agreement shall have endorsed thereon a legend substantially as follows: “The shares represented by this certificate are subject to restrictions set forth in a Stock Option Agreement dated [Date] with this Company, a copy of which Agreement is available for inspection at the offices of the Company or will be made available upon request.”

 

 

13.            NO OBLIGATION TO MAINTAIN RELATIONSHIP.

 

The Participant acknowledges that: (i) the Company is not by the Plan or this Option Agreement obligated to continue the Participant as an Employee, director or Consultant of the Company or an Affiliate; (ii) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (iii) the grant of the Option is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (iv) all determinations with respect to any such future grants, including, but not limited to, the times when options shall be granted, the number of shares subject to each option, the option price, and the time or times when each option shall be exercisable, will be at the sole discretion of the Company; (v) the Participant’s participation in the Plan is voluntary; (vi) the value of the Option is an extraordinary item of compensation which is outside the scope of the Participant’s employment or consulting contract, if any; and (vii) the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

 

14.            IF OPTION IS INTENDED TO BE AN ISO.

 

If this Option is designated in the Stock Option Grant Notice as an ISO so that the Participant (or the Participant’s Survivors) may qualify for the favorable tax treatment provided to holders of Options that meet the standards of Section 422 of the Code then any provision of this Agreement or the Plan which conflicts with the Code so that this Option would not be deemed an ISO is null and void and any ambiguities shall be resolved so that the Option qualifies as an ISO. The Participant should consult with the Participant’s own tax advisors regarding the tax effects of the Option and the requirements necessary to obtain favorable tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.

 

Notwithstanding the foregoing, to the extent that the Option is designated in the Stock Option Grant Notice as an ISO and is not deemed to be an ISO pursuant to Section 422(d) of the Code because the aggregate Fair Market Value (determined as of the Date of Option Grant) of any of the Shares with respect to which this ISO is granted becomes exercisable for the first time during any calendar year in excess of $100,000, the portion of the Option representing such excess value shall be treated as a Non-Qualified Option and the Participant shall be deemed to have taxable income measured by the difference between the then Fair Market Value of the Shares received upon exercise and the price paid for such Shares pursuant to this Agreement.

 

Neither the Company nor any Affiliate shall have any liability to the Participant, or any other party, if the Option (or any part thereof) that is intended to be an ISO is not an ISO or for any action taken by the Administrator, including without limitation the conversion of an ISO to a Non-Qualified Option.

 

 

15.            NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION OF AN ISO.

 

If this Option is designated in the Stock Option Grant Notice as an ISO then the Participant agrees to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any of the Shares acquired pursuant to the exercise of the ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale) of such Shares before the later of (a) two years after the date the Participant was granted the ISO or (b) one year after the date the Participant acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Participant has died before the Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

 

16.            NOTICES.

 

Any notices required or permitted by the terms of this Agreement or the Plan shall be given by recognized courier service, facsimile, registered or certified mail, return receipt requested, or by email addressed as follows:

 

If to the Company:

 

ArriVent Biopharma, Inc.

 

2002 Stanwich Drive

 

Berwyn, PA 19312

 

Attention: Corporate Secretary

 

Email:

 

If to the Participant at the address set forth on the Stock Option Grant Notice or such address as the Company may then have in its records for the Participant

 

or to such other address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have been given upon the earlier of receipt, one business day following delivery to a recognized courier service or three business days following mailing by registered or certified mail.

 

17.            GOVERNING LAW.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its internal principles governing the conflict of law. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in Delaware and agree that such litigation shall be conducted in the state courts of New Castle, Delaware or the federal courts of the United States for the District of Delaware.

 

 

18.            BENEFIT OF AGREEMENT.

 

Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

 

19.            ENTIRE AGREEMENT.

 

This Agreement, together with the Plan, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict, the express terms and provisions of this Agreement, provided, however, in any event, this Agreement shall be subject to and governed by the Plan.

 

20.            MODIFICATIONS AND AMENDMENTS.

 

The terms and provisions of this Agreement may be modified or amended as provided in the Plan.

 

21.            WAIVERS AND CONSENTS.

 

Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

22.            DATA PRIVACY.

 

By entering into this Agreement, the Participant: (i) authorizes the Company and each Affiliate, and any agent of the Company or any Affiliate administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its Affiliates such information and data as the Company or any such Affiliate shall request in order to facilitate the grant of options and the administration of the Plan; and (ii) to the extent permitted by law waives any data privacy rights he or she may have with respect to such information; and (iii) authorizes the Company and each Affiliate to store and transmit such information in electronic form for the purposes set forth in this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

Exhibit A

 

NOTICE OF EXERCISE OF STOCK OPTION

 

[Form for Unregistered Shares]

 

To:         ArriVent Therapeutics, Inc.

 

Ladies and Gentlemen:

 

I hereby exercise my Stock Option to purchase [#] shares (the “Shares”) of the common stock, $0.0001 par value, of ArriVent Biopharma, Inc. (the “Company”), at the exercise price of $[_____] per share, pursuant to and subject to the terms of that certain Stock Option Agreement between the undersigned and the Company dated [Date].

 

I am aware that the Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws. I understand that the reliance by the Company on exemptions under the 1933 Act is predicated in part upon the truth and accuracy of the statements by me in this Notice of Exercise.

 

I hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Shares; (2) I have had the opportunity to ask questions concerning the Shares and the Company and all questions posed have been answered to my satisfaction; (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Shares and the Company; and (4) I have such knowledge and experience in financial and business matters that I am able to evaluate the merits and risks of purchasing the Shares and to make an informed investment decision relating thereto.

 

I hereby represent and warrant that I am purchasing the Shares for my own personal account for investment and not with a view to the sale or distribution of all or any part of the Shares.

 

I understand that because the Shares have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Shares cannot be sold unless the Shares are subsequently registered under applicable federal and state securities laws or an exemption from such registration requirements is available.

 

I agree that I will in no event sell or distribute or otherwise dispose of all or any part of the Shares unless (1) there is an effective registration statement under the 1933 Act and applicable state securities laws covering any such transaction involving the Shares or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

 

 

I consent to the placing of a legend on my certificate for the Shares stating that the Shares have not been registered and setting forth the restrictions on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Shares until the Shares may be legally resold or distributed without restriction.

 

I understand that at the present time Rule 144 of the Securities and Exchange Commission (the “SEC”) may not be relied on for the resale or distribution of the Shares by me. I understand that the Company has no obligation to me to register the sale of the Shares with the SEC and has not represented to me that it will register the sale of the Shares.

 

I understand the terms and restrictions on the right to dispose of the Shares set forth in the 2021 Employee, Director and Consultant Equity Incentive Plan and the Stock Option Agreement, both of which I have carefully reviewed. I consent to the placing of a legend on my certificate for the Shares referring to such restriction and the placing of stop transfer orders until the Shares may be transferred in accordance with the terms of such restrictions.

 

I have considered the Federal, state and local income tax implications of the exercise of my Option and the purchase and subsequent sale of the Shares.

 

I am paying the option exercise price for the Shares as follows:

 

 

 

Please issue the Shares (check one):

 

¨ to me; or

 

¨ to me and ________________, as joint tenants with right of survivorship

 

and mail the certificate to me at the following address:

 

  

Exhibit A

 

 

My mailing address for shareholder communications, if different from the address listed above is:

 

 

	Very truly yours,
	Participant (signature)
	Print Name
	Date
	Social Security Number

 

Exhibit A

 

 

Exhibit B

 

NOTICE OF EXERCISE OF STOCK OPTION

 

[Form for Shares Registered in the United States]

 

To:         ArriVent Biopharma, Inc.

 

IMPORTANT NOTICE: This form of Notice of Exercise may only be used at such time as the Company has filed a Registration Statement with the Securities and Exchange Commission under which the issuance of the Shares for which this exercise is being made is registered and such Registration Statement remains effective.

 

Ladies and Gentlemen:

 

I hereby exercise my Stock Option to purchase _________ shares (the “Shares”) of the common stock, $0.0001 par value, of ArriVent Biopharma, Inc. (the “Company”), at the exercise price of $________ per share, pursuant to and subject to the terms of that Stock Option Grant Notice dated _______________, 202_.

 

I understand the nature of the investment I am making and the financial risks thereof. I am aware that it is my responsibility to have consulted with competent tax and legal advisors about the relevant national, state and local income tax and securities laws affecting the exercise of the Option and the purchase and subsequent sale of the Shares.

 

I am paying the option exercise price for the Shares as follows:

 

 

 

Please issue the Shares (check one):

 

¨ to me; or

 

¨ to me and ____________________________, as joint tenants with right of survivorship,

 

at the following address:

 

 

Exhibit B-1

 

 

 

My mailing address for shareholder communications, if different from the address listed above, is:

 

 

	Very truly yours,
	Participant (signature)
	Print Name
	Date
	Social Security Number

 

Exhibit B-2

 

 

 

Exhibit 10.4

 

ARRIVENT BIOPHARMA, Inc.

EXECUTIVE SEVERANCE PLAN

 

1.            Establishment; Purpose. ArriVent, Inc. (the “Company”) hereby establishes as of [●], 2023 an unfunded severance benefit plan (this “Plan”) for its Eligible Employees in order to establish the conditions under which the Eligible Employees will receive the severance payments and benefits described herein if their employment with the Company (or its successor in a Change in Control (as defined below)) terminates under the circumstances specified herein. The severance payments and benefits paid under this Plan are intended to assist Eligible Employees in making a transition to new employment and are not intended to be a reward for prior service with the Company.

 

2.            Definitions. For purposes of this Plan:

 

(a)            “Base Salary” means, for any Participant, such Participant’s base salary as in effect immediately before a Participant’s termination of employment (or immediately prior to the effective date of a Change in Control, if greater) and exclusive of any bonuses, “adders,” any other form of premium pay, or other forms of compensation.

 

(b)            “Board” means the Board of Directors of the Company.

 

(c)            “Cause” means a Participant’s: (i) act of gross negligence or insubordination or a material breach of the Company’s policies and procedures (other than such policies set forth in (ii) below), which act or breach is not cured within fifteen (15) days after a written demand for cure is received by Participant from the Company which specifically identifies the act or breach on which the Company predicates the Participant’s termination of employment for Cause; (ii) material breach of the Company’s code of conduct, equal opportunity and anti-harassment policies, or compliance policies (which may include, but not be limited to, a code of business conduct, an anti-bribery policy, a competition policy, and a policy on healthcare business ethics); (iii) commission, indictment, conviction, or entry of a plea of guilty or nolo contendere to, a felony or any other crime involving fraud, dishonesty, theft, breach of trust or moral turpitude; (iv) engagement in misconduct which results in, or could reasonably be expected to result in, material injury to the Company’s financial condition, reputation, or ability to do business; (v) material breach of a written agreement with the Company, including any confidentiality, invention assignment or other employee restrictions agreement; (vi) violation of state or federal securities laws or regulations; or (vii) willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, willful destruction or failure to preserve documents or other materials relevant to such investigation, or willful inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

(d)            “Change in Control” means a transaction or a series of related transactions in which: (i) all or substantially all of the assets of the Company are transferred to any “person” or “group” (as such terms are defined in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); (ii) any person or group, other than a person or group who prior to such acquisition is a “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of any of the Company’s equity, becomes the “beneficial owner”, directly or indirectly, of the Company’s outstanding equity representing more than 50% of the total voting power of the Company’s then-outstanding equity; (iii) the Company undergoes a merger, reorganization or other consolidation in which the holders of the outstanding equity of the Company immediately prior to such merger, reorganization or consolidation directly or indirectly own less than 50% of the surviving entity’s voting power immediately after the transaction; or (iv) if within any rolling twelve (12) month period, the persons who were directors of the Company (or its successor) at the beginning of such twelve (12) month period (the “Incumbent Directors”) cease to constitute at least a majority of such Board of Directors; provided that any director who was not a director at the beginning of such twelve (12) month period will be deemed to be an Incumbent Director if that director was elected to the board of directors by, or on the recommendation of or with the approval of, a majority of the directors who then qualified as Incumbent Directors. Any of (i) through (iv) above may constitute a Change in Control, provided that the Change in Control meets all of the requirements of a “change in the ownership of a corporation” within the meaning of Treasury Regulation §1.409A-3(i)(5)(v), a “change in the effective ownership of a corporation” within the meaning of Treasury Regulation §1.409A-3(i)(5)(vi), or “a change in the ownership of a substantial portion of the corporation’s assets” within in the meaning of Treasury Regulation §1.409A-3(i)(5)(vii).

 

 

(e)            “Change in Control Period” means: (i) the twenty (24) month period beginning on the date of a Change in Control; (ii) any such time prior to a Change in Control where the successor or acquiring entity in the Change in Control requests for the termination of Participant’s employment without Cause; or (iii) any such time prior to a Change in Control where the Company terminates Participant’s employment without Cause in connection with or in anticipation of a Change in Control.

 

(f)             “COBRA” means the Consolidated Omnibus Budget Reconciliation Act.

 

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

 

(h)            “Eligible Employee” means the Company’s Chief Executive Officer, Chief Operating Officer, President, Research and Development, and such additional C-level executives made eligible to participate in the Plan by resolution of the Board or the Compensation Committee of the Board (and if the Board makes additional C-level executive eligible, the Company will update Exhibit A).

 

(i)             “Good Reason” means the occurrence of any of the following without Participant’s prior consent: (i) a material decrease in Participant’s Base Salary or bonus opportunity; (ii) a material diminution in Participant’s title, reporting relationship, duties or responsibilities; (iii) a material diminution in the aggregate employee benefits and material perquisites provided to Participant; (iv) a relocation of Participant’s primary office by more than thirty-five (35) miles from Participant’s then-current location (unless the new location is closer to the Participant’s primary residence); and (v) the failure by any successor to the Company or any acquiring corporation to explicitly assume this Plan and the Company’s obligations hereunder and maintain this Plan in effect for a period of at least twenty-four (24) months. Notwithstanding the foregoing, “Good Reason” will not be deemed to have occurred unless (x) Participant provides the Company with written notice that Participant intends to terminate employment for one of the grounds set forth above within ninety (90) days of such ground(s) arising, (y) if such ground is capable of being cured, the Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (z) Participant terminates employment within six (6) months from the date that Good Reason first occurs.

 

(j)             “Participant” means the Eligible Employees employed by the Company from time to time.

 

3.            Severance Not in Connection with a Change in Control. If the Company terminates a Participant’s employment without Cause at any time other than during a Change in Control Period, subject to the provisions of Section 5, Participant will be eligible to receive the following payments and benefits (collectively, the “Severance Package”):

 

(a)            Participant will be entitled to receive an amount equal to the product of: (i) the Normal Multiplier, as determined under Exhibit A based on Participant’s tile or role with the Company; and (ii) the sum of Participant’s then-current Base Salary and then-current target annual bonus opportunity (the “Normal Severance”). The Company will pay the Normal Severance in the form of salary continuation in accordance with the Company’s regular payroll schedule over the Severance Period, commencing on such date determined in accordance with Section 5. The “Severance Period” will equal the period of months equal to the product of (A) Participant’s Normal Multiplier and (B) 12.

 

 

(b)            In addition, the Participant will be entitled to receive a Pro-Rated Bonus for the year in which the Participant’s employment terminates. The “Pro-Rated Bonus” will equal the product of the target annual bonus for the year in which Participant’s employment terminates and a fraction, the numerator of which is the number of days Participant remained employed in the calendar year and the denominator of which is 365. The Pro-Rated Bonus will be paid at the time the Company normally would pay annual bonuses for the year in which the termination of employment occurred.

 

(c)            Participant and the Participant’s eligible dependents will be entitled to continue participating in the Company’s medical, dental and vision benefits for the Severance Period (the “Severance Benefits”), as follows: (i) such continued benefits will be subject to Participant’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”); (ii) the Company will pay on the Participant’s behalf or reimburse the Participant the full monthly cost of the Severance Benefits; (iii) Participant’s right to receive further Severance Benefits will terminate if and when Participant secures alternative health benefits from a new employer, of which Participant will promptly notify the Company, or if and when Participant otherwise becomes ineligible for further coverage under COBRA; and (iv) the Company will be required to provide the Severance Benefits only to the extent that the Company continues offering an employee health benefits plan and to extent that the Company is not required to provide and pay for such post-termination coverage to other employees to avoid a violation of applicable nondiscrimination requirements.

 

(d)            The Company will provide Participant with professional outplacement services; provided, however, that the cost of such outplacement services will not exceed $5,000.00.

 

(e)            The payments and benefits described in this Section 3 will be in lieu of any other benefits or payments under any severance or similar plan, policy or arrangement of the Company.

 

4.            Severance in Connection with a Change in Control. If during the Change in Control Period, the Company terminates Participant’s employment without Cause or Participant resigns Participant’s employment with Good Reason, subject to the provisions of Section 5, Participant will be eligible to receive the following payments and benefits (collectively, the “CIC Severance Package”):

 

(a)            Participant will be entitled to receive an amount equal to the product of: (A) the CIC Multiplier, as determined under Exhibit A based on Participant’s title or role with the Company; and (B) the sum of Participant’s then-current Base Salary and then-current target annual bonus opportunity (the “CIC Severance”). The Company will pay the CIC Severance in a single lump sum, on such date determined in accordance with Section 5.

 

(b)            In addition, the Participant will be entitled to receive an annual bonus equal to the Participant’s then-current target annual bonus opportunity for the year in which the Participant’s employment terminates. The target bonus will be paid at the time the Company pays the CIC Severance.

 

(c)            Participant and the Participant’s eligible dependents will be entitled to continue participating in the Company’s medical, dental and vision benefits for the CIC Severance Period (the “CIC Severance Benefits”), as follows: (i) such continued benefits will be subject to Participant’s timely election of continuation coverage under COBRA; (ii) the Company will pay on the Participant’s behalf or reimburse the Participant the full monthly cost of the Severance Benefits; (iii) Participant’s right to receive further CIC Severance Benefits will terminate if and when Participant secures alternative health benefits from a new employer, of which Participant will promptly notify the Company, or if and when Participant otherwise becomes ineligible for further coverage under COBRA; and (iv) the Company will be required to provide the CIC Severance Benefits only to the extent that the Company continues offering an employee health benefits plan and to extent that the Company is not required to provide and pay for such post-termination coverage to other employees to avoid a violation of applicable nondiscrimination requirements. The “CIC Severance Period” will equal 18 months.

 

 

(d)            Any outstanding unvested equity awards held by Participant under the Company’s then-current outstanding equity incentive plan(s) will become fully vested on the date the termination of Participant’s employment becomes effective and the period in which to exercise any outstanding stock options will be extended to the first anniversary of the date the termination of the Participant’s employment became effective.

 

(e)            The Company will provide Participant with professional outplacement services; provided, however, that the cost of such outplacement services will not exceed $15,000.00.

 

(f)             The payments and benefits described in this Section 5 will be in lieu of any other benefits or payments under any severance or similar plan, policy or arrangement of the Company, and will be in lieu of any benefits set forth in Section 4 of this Agreement.

 

5.            Release. A Participant’s rights to the Severance Package or the CIC Severance Package, as applicable, is conditioned upon Participant executing and not revoking a valid separation and general release agreement in a form provided by the Company (the “Release”), and provided such release becomes effective and irrevocable within sixty (60) days following termination or such shorter time period set forth therein, releasing the Company, its subsidiaries, other affiliates and shareholders from any and all liability. Any payments or benefits due for the period after termination and before the Release becomes effective will be paid with the first payment after the Release becomes effective. Notwithstanding any other provision herein, if the period during which Participant has discretion to execute or revoke the Release straddles two calendar years, the Company will make payments conditioned on the Release no earlier than January 1st of the second calendar year, regardless of which year the Release becomes effective.

 

6.            Accrued Obligations. Notwithstanding anything to the contrary contained herein, a Participant will be entitled to all Accrued Obligations as of his or her termination of employment, regardless of whether he or she is eligible for severance payments or benefits under this Plan. “Accrued Obligations” means, for any Participant: (i) the portion of such Participant’s Base Salary that has accrued prior to any termination of such Participant’s employment with the Company and has not yet been paid; (ii) the portion of such Participant’s prior-year annual bonus that has been earned prior to any termination of such Participant’s employment with the Company and has not yet been paid; (iii) the amount of any expenses properly incurred by such Participant on behalf of the Company in accordance with Company policy prior to any such termination and not yet reimbursed; and (iv) the amount of such Participant’s vacation time that has accrued prior to any such termination that has not yet been used. A Participant’s entitlement to any other compensation or benefit under any plan of Company will be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Plan.

 

7.            Non-Duplication of Benefits. Nothing in this Plan will entitle any Participant to receive duplicate benefits in connection with any voluntary or involuntary termination of employment. A Participant’s right to receive any payments under this Plan will be expressly conditioned upon such Participant not receiving severance payments or benefits under any other agreement, program or arrangement.

 

 

8.            Death. If a Participant dies after the date Participant commences receiving benefits and payments under the Severance Package or the CIC Severance Package, as applicable, but before all such payments or benefits have been paid or provided, payments will be made to any beneficiary designated by Participant prior to or in connection with such Participant’s termination or, if no such beneficiary has been designated, to Participant’s estate.

 

9.            Withholding. The Company may withhold from any payment or benefit under this Plan: (a) any federal, state, or local income or payroll taxes required by law to be withheld with respect to such payment; (b) such sum as the Company may reasonably estimate is necessary to cover any taxes for which the Company may be liable and which may be assessed with regard to such payment; and (c) such other amounts as appropriately may be withheld under the Company’s payroll policies and procedures from time to time in effect.

 

10.          Section 409A. It is expected that the payments and benefits provided under this Plan will be exempt from the application of Section 409A of the Code, and the guidance issued thereunder (“Section 409A”). This Plan is to be interpreted consistent with this intent to the maximum extent permitted and generally, with the provisions of Section 409A. A termination of employment will not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits upon or following a termination of employment (which amounts or benefits constitute nonqualified deferred compensation within the meaning of Section 409A) unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms means “separation from service”. Neither Participant nor the Company will have the right to accelerate or defer the delivery of any payment or benefit except to the extent specifically permitted or required by Section 409A. Notwithstanding the foregoing, to the extent the severance payments or benefits under this Plan are subject to Section 409A, the following rules will apply with respect to distribution of the payments and benefits, if any, to be provided to Participants under this Plan:

 

(a)            Each installment of the payments and benefits provided under this Plan will be treated as a separate “payment” for purposes of Section 409A. Whenever a payment under this Plan specifies a payment period with reference to a number of days (e.g., “payment will be made within 10 days following the date of termination”), the actual date of payment within the specified period will be in the Company’s sole discretion. Notwithstanding any other provision of this Plan to the contrary, in no event will any payment under this Plan that constitutes “non-qualified deferred compensation” for purposes of Section 409A be subject to transfer, offset, counterclaim or recoupment by any other amount unless otherwise permitted by Section 409A.

 

(b)            Notwithstanding any other payment provision herein to the contrary, if the Company or appropriately-related affiliates is publicly-traded and a Participant is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) with respect to such entity, then each of the following rules apply:

 

 (i)            With regard to any payment that is considered “non-qualified deferred compensation” under Section 409A payable on account of a “separation from service,” such payment will be made on the date which is the earlier of (A) the day following the expiration of the six month period measured from the date of such “separation from service” of Participant, and (B) the date of Participant’s death (the “Delay Period”) to the extent required under Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this provision (whether otherwise payable in a single sum or in installments in the absence of such delay) will be paid to or for Participant in a lump sum, and all remaining payments due under this Plan will be paid or provided for in accordance with the normal payment dates specified herein; and

 

 

 (ii)           To the extent that any benefits to be provided during the Delay Period are considered “non-qualified deferred compensation” under Section 409A payable on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, Participant will pay the cost of such benefits during the Delay Period, and the Company will reimburse Participant, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to Participant, the Company’s share of the cost of such benefits upon expiration of the Delay Period. Any remaining benefits will be reimbursed or provided by the Company in accordance with the procedures specified in this Plan.

 

(c)            The Company makes no representations or warranties and will have no liability to any Participant or any other person, other than with respect to payments made by the Company in violation of the provisions of this Plan, if any provisions of or payments under this Plan are determined to constitute deferred compensation subject to Section 409A of the Code but not to satisfy the conditions of that section.

 

11.          Modified 280G Cutback.

 

(a)            To the extent that any payment, benefit or distribution of any type to or for a Participant’s benefit by the Company or any of its affiliates, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Plan or otherwise (including, without limitation, any accelerated vesting of stock options or other equity-based awards) (collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Code, then the Total Payments will be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) will be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code, but only if the Total Payments so reduced result in Participant receiving a net after tax amount that exceeds the net after tax amount Participant would receive if the Total Payments were not reduced and were instead subject to the excise tax imposed on excess parachute payments by Section 4999 of the Code. If a reduction in the Total Payments must be made, reduction will occur in the following order: first, from cash payments which are included in full as parachute payments; second, from equity awards which are included in full as parachute payments; third, from cash payments which are partially included as parachute payments; fourth, from equity awards that are partially included as parachute payments, in each instance provided that Section 409A is complied with and the payments to be made later in time are to be reduced before payments to be made sooner in time, fifth, from reduction of employee benefits, which will occur in reverse chronological order such that the benefit owed on the latest date following the occurrence of the event triggering such excise tax will be the first benefit to be reduced. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis. In no event will a Participant have any discretion with respect to the ordering of payment reductions. The preceding provisions of this Section will take precedence over the provisions of any other plan, arrangement or agreement governing Participant’s rights and entitlements to any benefits or compensation.

 

(b)            Unless the Company and an effected Participant otherwise agree in writing, any determination required under this Section will be made in writing by a nationally recognized certified professional services firm selected by the Company, the Company’s legal counsel or such other person or entity to which the parties mutually agree (the “Firm”), whose determination will be conclusive and binding upon Participant and the Company for all purposes. For purposes of making the calculations required by this Section, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Participant will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 11. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 11.

 

 

(c)            If the Total Payments to a Participant are reduced in accordance with Section 14(a), as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial reduction under Section 14(a), it is possible that Total Payments to a Participant which will not have been made by the Company should have been made (“Underpayment”) or that Total Payments to a Participant which were made should not have been made (“Overpayment”). If an Underpayment has occurred, the amount of any such Underpayment will be promptly paid by the Company to or for the benefit of such Participant. In the event of an Overpayment, then Participant will promptly repay to the Company the amount of any such Overpayment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereto), from the date the reimbursable payment was received by such Participant to the date the same is repaid to the Company.

 

12.          Plan Not an Employment Contract. This Plan is not a contract between the Company and any Eligible Employee, nor is it a condition of employment of any employee. Nothing contained in this Plan gives, or is intended to give, any Eligible Employee the right to be retained in the service of the Company, or to interfere with the right of the Company to discharge or terminate the employment of any Eligible Employee at any time and for any reason. No Eligible Employee has the right or claim to benefits beyond those expressly provided in this Plan, if any. All rights and claims are limited as set forth in this Plan.

 

13.          Severability. In case any one or more of the provisions of this Plan (or part thereof) will be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect the other provisions hereof, and this Plan is to be construed as if such invalid, illegal or unenforceable provisions (or part thereof) never had been contained herein.

 

14.          Non Assignability. No right or interest of any Participant in this Plan will be assignable or transferable in whole or in part either directly or by operation of law or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge or bankruptcy.

 

15.          Integration With Other Pay or Benefits Requirements. The severance payments and benefits provided for in this Plan are the maximum benefits that the Company will pay to Participants on a termination of employment, except to the extent otherwise required by applicable law. To the extent that any federal, state or local law, including, without limitation, so called “plant closing” laws, requires the Company to give advance notice or make a payment of any kind to an Eligible Employee because of that Eligible Employee’s involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, or similar event, the benefits provided under this Plan or the other arrangement will either be reduced or eliminated to avoid any duplication of payment. The Company intends for the benefits provided under this Plan to partially or fully satisfy any and all statutory obligations that may arise out of an Eligible Employee’s involuntary termination for the foregoing reasons and the Company will so construe and implement the terms of this Plan.

 

 

16.          Amendment or Termination. The Board may amend, modify, or terminate this Plan at any time in its sole discretion; provided, however, that: (a) any such amendment, modification or termination made prior to a Change in Control that adversely affects the rights of any Participant must be approved by the Company’s Board of Directors; (b) no such amendment, modification or termination may adversely affect the rights of a Participant then receiving payments or benefits under this Plan without the consent of such person; and (c) no such amendment, modification or termination made after a Change in Control will be effective until after the later to occur of the second (2^nd) anniversary of the Change in Control or the final payment of benefits under this Plan to any Participant. The Board intends to review this Plan at least annually.

 

17.          Source of Benefit. The Company will pay benefits under the Plan from its general assets to the extent available. The benefits is not funded through a trust fund or insurance contracts. No Eligible Employee has any right to, or interest in, any assets of the Company upon termination of employment or otherwise.

 

18.          Governing Law. This Plan and the rights of all persons under this Plan is to be construed in accordance with the laws of the State of Delaware (without regard to conflict of law provisions).

 

 

EXHIBIT A

MULTIPLIERS

 

Title/Role of Participant		Normal Multiplier				CIC Multiplier
Chief Executive Officer			1.5				2
Chief Operating Officer			1.25				1.5
President, Research and Development and Chief Medical Officer			1.25				1.5

 

 

 

Exhibit 10.5

 

ARRIVENT BIOPHARMA, INC.

 

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

(_____, 2023)

 

The Board of Directors of ArriVent BioPharma, Inc. (the “Company”) has approved the following Non-Employee Director Compensation Policy (this “Policy”), which establishes compensation to be paid to non-employee directors of the Company, effective upon the completion of the Company’s initial public offering (“Effective Date”), to provide an inducement to obtain and retain the services of qualified persons to serve as members of the Company’s Board of Directors.

 

Applicable Persons

 

This Policy shall apply to each director of the Company who is not an employee of the Company or any Affiliate, provided, however, that this Policy shall not apply to, and no compensation shall be payable to, any director that is affiliated with an institutional investor that held shares of the Company’s Series A or Series B preferred stock prior to the consummation of the Company’s initial public offering (each, a “Non-Employee Director”). “Affiliate” shall mean an entity which is a direct or indirect parent or subsidiary of the Company, as determined pursuant to Section 424 of the Internal Revenue Code of 1986, as amended.

 

Stock Option Grants

 

All stock option amounts set forth herein shall be subject to automatic adjustment in the event of any stock split or other recapitalization affecting the Company’s common stock.

 

Annual Stock Option Grants to Non-Employee Directors

 

Annually, each Non-Employee Director who will continue as a member of the Board of Directors in the coming year shall be granted, automatically and without any action on the part of the Board of Directors, under the Company’s 2023 Employee, Director and Consultant Equity Incentive Plan or a successor plan (the “Equity Plan”), a non-qualified stock option to purchase the number of shares of the Company’s common stock as is equal to the Black-Scholes value of $235,000 as of the grant date (rounded down to the nearest whole share), on the first business day after the Company’s annual meeting of stockholders in each year commencing in 2024 (each, an “Annual Grant”).

 

Initial Stock Option Grant for Newly Appointed or Elected Directors

 

Each new Non-Employee Director after the Effective Date shall be granted, in lieu of the Annual Grant for the calendar year during which the Non-Employee Director joined the Board of Directors, automatically and without any action on the part of the Board of Directors, under the Equity Plan, a non-qualified stock option to purchase the number of shares of the Company’s common stock as is equal to the Black-Scholes value of $235,000 as of the grant date (rounded down to the nearest whole share), on the first business day after the date that the Non-Employee Director is first appointed or elected to the Board of Directors (each, an “Initial Grant” and, together with the Annual Grants, the “Non-Employee Director Grants”).

 

 

Terms for Non-Employee Director Grants

 

Unless otherwise specified by the Board of Directors or the Compensation Committee at the time of grant, each Non-Employee Director Grant shall (i) have an exercise price equal to the fair market value of the Company’s common stock as determined in accordance with the Equity Plan on the date of grant; (ii) terminate on the tenth anniversary of the date of grant, and (iii) contain such other terms and conditions as set forth in the form of option agreement approved by the Board of Directors or the Compensation Committee. Unless otherwise specified by the Board of Directors or the Compensation Committee at the time of grant, each Non-Employee Director Grant shall vest, in the case of (A) an Annual Grant, at the end of the “Directors’ Compensation Year,” which shall be defined as the period beginning on the date of each regular annual meeting of stockholders and ending on the date of the next regular annual meeting of stockholders, subject to the Non-Employee Director’s continued service on the Board of Directors through the applicable Directors’ Compensation Year, and (B) an Initial Grant, on the first anniversary of the date of grant subject to the Non-Employee Director’s continued service on the Board of Directors through the applicable vesting date.

 

Annual Fees

 

Each Non-Employee Director serving on the Board of Directors and the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, as applicable, shall be entitled to the following annual amounts (the “Annual Fees”):

 

Board of Directors or Committee of Board of Directors		Annual Retainer Amount for Member				Annual Retainer Amount for Chair
Board Member		$	45,000				--
Audit Committee			--			$	20,000
Compensation Committee			--			$	15,000
Nominating and Corporate Governance Committee			--			$	10,000

 

Payments

 

Payments payable to Non-Employee Directors shall be paid quarterly in arrears promptly following the end of each fiscal quarter, provided that (i) the amount of such payment shall be prorated for any portion of such quarter that such Non-Employee Director was not serving on the Board of Directors or a committee and (ii) no fee shall be payable in respect of any period prior to the date such Non-Employee Director was elected to the Board of Directors or a committee.

 

 

Except as otherwise set forth in this Policy, all Annual Fees shall be paid for the period from January 1 through December 31 of each year. Such Annual Fees shall be paid in cash, except to the extent that an election is made pursuant to the following provision: Prior to the beginning of each calendar year, a Non-Employee Director may elect to receive all or a portion of such Non-Employee Director’s base Annual Fee for service as a member of the Board of Directors (i.e., $45,000) in the form of a non-qualified stock option to purchase the number of shares of the Company’s common stock (rounded down to the nearest whole share) as is equal to the Black-Scholes value of such Annual Fee (or portion thereof), which option will be granted on the first business day of the calendar year. Any election made with respect to less than all of a Non-Employee Director’s base Annual Fee must be expressed in a 50% increment, i.e., a Non-Employee Director may elect to receive either 50% or 100% of the base Annual Fee in the form of an option. Such option shall vest in four quarterly installments on the last day of each calendar quarter during the calendar year subject to the continued service of the Non-Employee Director through the applicable vesting date. Such option shall (i) be issued under the Equity Plan, (ii) contain such other terms and conditions as set forth in the form of option agreement approved by the Board of Directors or the Compensation Committee, and (iii) have an exercise price equal to the fair market value of the Company’s common stock on the date of grant, as determined in accordance with the Equity Plan. Each Non-Employee Director who is newly elected or appointed to the Board of Directors after the Effective Date may make an election to be paid in the form of an option within 30 days of such Non-Employee Director’s election or appointment (the “Option Election”) and any such option shall be granted on the last business day of the month following such Non-Employee Director’s Option Election for the prorated portion of the cash for the initial calendar year and otherwise in accordance with this paragraph. If no election has been made prior to the first day of the calendar year, then the Non-Employee Director shall receive such Non-Employee Director’s Annual Fees in the form in which they were paid during the prior calendar year.

 

Expenses

 

Upon presentation of documentation of such expenses reasonably satisfactory to the Company, each Non-Employee Director shall be reimbursed for such Non-Employee Director’s reasonable out-of-pocket business expenses incurred in connection with attending meetings of the Board of Directors and committees thereof or in connection with other business related to the Board of Directors. Each Non-Employee Director shall abide by the Company’s travel and other expense policies applicable to Company personnel.

 

Amendments

 

The Compensation Committee shall review this Policy from time to time to assess whether any amendments in the type and amount of compensation provided herein should be made in order to fulfill the objectives of this Policy and shall make recommendations to the Board of Directors for its approval of any amendments to this Policy.

 

 

 

Exhibit 10.6

 

ARRIVENT BIOPHARMA, INC.

 

CLAWBACK POLICY

 

I.             Introduction

 

The Board of Directors (the “Board”) of ArriVent BioPharma, Inc. (the “Company”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company’s pay-for-performance compensation philosophy. The Board has therefore adopted this policy which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and final rules and amendments adopted by the Securities and Exchange Commission (the “SEC”) to implement the aforementioned legislation.

 

II.            Administration

 

This Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee of the Board, in which case references herein to the Board shall be deemed references to the Compensation Committee. Any determinations made by the Board shall be final and binding on all affected individuals.

 

III.           Covered Executives

 

This Policy applies to the Company’s current and former executive officers, as determined by the Board in accordance with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the SEC and any national securities exchange on which the Company’s securities are listed, and such other employees who may from time to time be deemed subject to the Policy by the Board (“Covered Executives”).

 

IV.          Incentive-Based Compensation

 

For purposes of this Policy, incentive-based compensation (“Incentive-Based Compensation”) includes any compensation that is granted, earned, or vested based wholly or in part upon the attainment of any financial reporting measures that are determined and presented in accordance with the accounting principles (“GAAP Measures”) used in preparing the Company’s financial statements and any measures derived wholly or in part from such measures, as well as non-GAAP Measures, stock price, and total shareholder return (collectively, “Financial Reporting Measures”); however, it does not include: (i) base salaries; (ii) discretionary cash bonuses; (iii) awards (either cash or equity) that are solely based upon subjective, strategic or operational standards or standards unrelated to Financial Reporting Measures, and (iv) equity awards that vest solely on completion of a specified employment period or without any performance condition. Incentive-Based Compensation is considered received in the fiscal period during which the applicable reporting measure is attained, even if the payment or grant of such award occurs after the end of that period. If an award is subject to both time-based and performance-based vesting conditions, the award is considered received upon satisfaction of the performance-based conditions, even if such an award continues to be subject to the time-based vesting conditions.

 

For the purposes of this Policy, Incentive-Based Compensation may include, among other things, any of the following:

 

·

Annual bonuses and other short- and long-term cash incentives.

·

Stock options.

·

Stock appreciation rights.

·

Restricted stock or restricted stock units.

·

Performance shares or performance units.

 

For purposes of this Policy, Financial Reporting Measures may include, among other things, any of the following:

 

·

Company stock price.

·

Total shareholder return.

·

Revenues.

·

Net income.

 

 

·

Earnings before interest, taxes, depreciation, and amortization (EBITDA).

·

Funds from operations.

·

Liquidity measures such as working capital or operating cash flow.

·

Return measures such as return on invested capital or return on assets.

·

Earnings measures such as earnings per share.

 

V.            Recoupment; Accounting Restatement

 

In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under U.S. securities laws, including any required accounting restatement to correct an error in previously issued financial statements that (i) is material to the previously issued financial statements or (ii) is not material to previously issued financial statements, but that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Board will require reimbursement or forfeiture of any excess Incentive-Based Compensation received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare the accounting restatement (the “Look-Back Period”). For the purposes of this Policy, the date on which the Company is required to prepare an accounting restatement is the earlier of (i) the date the Board concludes or reasonably should have concluded that the Company is required to prepare a restatement to correct a material error, and (ii) the date a court, regulator, or other legally authorized body directs the Company to restate its previously issued financial statements to correct a material error. The Company’s obligation to recover erroneously awarded compensation is not dependent on if or when the restated financial statements are filed.

 

Recovery of the Incentive-Based Compensation is only required when the excess award is received by a Covered Executive (i) after the beginning of their service as a Covered Executive, (ii) who served as an executive officer at any time during the performance period for that Incentive-Based Compensation, (iii) while the Company has a class of securities listed on a national securities exchange or a national securities association, and (iv) during the Look-Back Period immediately preceding the date on which the Company is required to prepare an accounting restatement.

 

VI.           Excess Incentive Compensation: Amount Subject to Recovery

 

The amount of Incentive-Based Compensation subject to recovery is the amount the Covered Executive received in excess of the amount of Incentive-Based Compensation that would have been paid to the Covered Executive had it been based on the restated financial statements, as determined by the Board. The amount subject to recovery will be calculated on a pre-tax basis.

 

For Incentive-Based Compensation received as cash awards, the erroneously awarded compensation is the difference between the amount of the cash award that was received (whether payable in a lump sum or over time) and the amount that should have been received applying the restated Financial Reporting Measure. For cash awards paid from bonus pools, the erroneously awarded Incentive-Based Compensation is the pro rata portion of any deficiency that results from the aggregate bonus pool that is reduced based on applying the restated Financial Reporting Measure.

 

For Incentive-Based Compensation received as equity awards that are still held at the time of recovery, the amount subject to recovery is the number of shares or other equity awards received or vested in excess of the number that should have been received or vested applying the restated Financial Reporting Measure. If the equity award has been exercised, but the underlying shares have not been sold, the erroneously awarded compensation is the number of shares underlying the award.

 

In instances where the Company is not able to determine the amount of erroneously awarded Incentive-Based Compensation directly from the information in the accounting restatement, the amount will be based on the Company’s reasonable estimate of the effect of the accounting restatement on the applicable measure. In such instances, the Company will maintain documentation of the determination of that reasonable estimate.

 

VII.         Method of Recoupment

 

The Board will determine, in its sole discretion, subject to applicable law, the method for recouping Incentive-Based Compensation hereunder, which may include, without limitation:

 

·

requiring reimbursement of cash Incentive-Based Compensation previously paid;

 

 

·

seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

·

offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;

·

cancelling outstanding vested or unvested equity awards; and/or

·

taking any other remedial and recovery action permitted by law, as determined by the Board.

 

VIII.        No Indemnification; Successors

 

The Company shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive-Based Compensation. This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.

 

IX.           Exception to Enforcement

 

The Board shall recover any excess Incentive-Based Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and any applicable rules or standards adopted by the SEC and the listing standards of any national securities exchange on which the Company’s securities are listed.

 

X.            Interpretation

 

The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the SEC and any national securities exchange on which the Company’s securities are listed.

 

XI.          Effective Date

 

This Policy shall be effective as of the date it is adopted by the Board (the “Effective Date”) and shall apply to Incentive-Based Compensation that is received by a Covered Executive on or after that date, as determined by the Board in accordance with applicable rules or standards adopted by the SEC and the listing standards of any national securities exchange on which the Company’s securities are listed.

 

XII.         Amendment; Termination

 

The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to comply with any rules or standards adopted by the SEC and the listing standards of any national securities exchange on which the Company’s securities are listed. The Board may terminate this Policy at any time.

 

XIII.        Other Recoupment Rights

 

Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.

 

 

 

Exhibit 10.7

 

May 5, 2021

 

Bing Yao

 

Dear Bing

 

I am pleased to confirm our offer of employment to you with ArriVent Biopharma, Inc. (“the Company”). This offer of employment is conditioned on, and will not become effective unless and until, the Company closes a financing round with third party investors of at least $90 million (the “Employment Conditions”).

 

If the Employment Conditions are met and you accept this offer, you will serve in the position of Chief Executive Officer and Founder. You are tentatively scheduled for a start date of June 1, 2021; with exact date to be determined based on above contingency.

 

Based upon your part-time schedule, you will receive a base salary of $20,833 on a semi-monthly basis, which annualized is $500,000. All base salary payments, as well as other payments and benefits, will be less applicable withholdings.

 

In addition, you will be eligible to participate in the Company’s Incentive Plan, as in effect from time to time. Your annual incentive target bonus is 45%. The Company will, in its sole discretion, determine the amount of the bonus payable, and any bonus awarded will be payable by March 15th of the year following the applicable bonus year, contingent on your continued employment through the end of the applicable bonus year. Your actual incentive award will be based on your individual performance and the overall performance of the Company.

 

Prior to the satisfaction of the Employment Conditions, you will be eligible to receive a grant of Founder’s shares representing 10% of the Company’s outstanding equity securities. As a condition to this grant, you will subscribe for the Founder’s shares for a nominal amount and enter into a Founder Share Restriction Agreement.

 

In addition, following satisfaction of the Employment Conditions, the Company will sponsor an Equity Incentive Plan (the “Equity Plan”), under which the Company can grant compensation in the form of equity awards. Following the satisfaction of the Employment Conditions, subject to the approval of the Board and your entering into a Stock Option Award Agreement, you will be eligible to receive an option award (the “Option”) to purchase a number of shares of the Company’s Common Stock at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Any actual grants will be determined at a future time. To the extent permissible by law, the Option will be awarded in the form of an Incentive Stock Option. The terms, conditions, and limitations of awards under the Equity Plan, and your rights and obligations with respect to Option, will be governed by the applicable Award Agreement and the Equity Plan. Please note that as the Company reviews its compensation plans and policies from time to time for competitiveness and other factors, it may make changes to the Equity Plan in the future.

 

As a Company employee, you also will be eligible to participate in certain employee benefit programs as in effect from time to time and subject to the terms of such benefit programs, an overview of which will be available shortly. Some benefit plans will require you to make elections and choose levels of coverage to meet your personal needs.

 

 

This offer letter is not intended to be, and should not be construed as, a contract of employment for any specific period of time. Employment is at-will, which means that either you or the Company may terminate your employment at any time. The Company may also change the terms and conditions of employment, including the provisions of compensation and benefits programs, at any time.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. By signing below, you agree to honor your contractual and/or common-law obligations not to disclose any proprietary or trade secret information (such as patents, formulas, marketing plans, or confidential client information) you acquired while employed by your current or former employer. Furthermore, to the extent you have post-employment contractual obligations to another employer, by signing this letter below you certify to the Company that you will be able to fully perform the duties and responsibilities of your position with the Company without violating any binding post-employment obligations to any former employer. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

 

As a Company employee, you will be expected to abide by the Company’s rules and standards. This offer of employment is conditioned on your signing on or before your first date of employment the Company’s Restrictive Covenant Agreement, a copy will be provided to you prior to your start date.

 

The Company may 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.

 

We look forward to you joining the Company. This letter sets forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews or pre-employment negotiations, whether written or oral. This letter, including, but not limited to, its at-will employment provision, may not be modified or amended except by a written agreement signed by the CAO of the Company and you.

 

 

Please indicate your acceptance of our offer by signing a copy of the offer letter t and emailing scanned copy back to me. If you have any questions, please call me at                     .

 

Best regards,

 

Robin LaChapelle

Chief Administrative Officer

 

I accept this offer as described above.

/s/ Zhengbin (Bing) Yao      5/5/21
(Signature) Date
cc: manager

 

 

Exhibit 10.8

 

May 1, 2021

 

Stuart Lutzker

 

Dear Stuart,

 

I am pleased to confirm our offer of employment to you with ArriVent Biopharma, Inc. (“the Company”). This offer of employment is conditioned on, and will not become effective unless and until, the Company closes a financing round with third party investors of at least $90 million (the “Employment Conditions”).

 

If the Employment Conditions are met and you accept this offer, you will serve in the position of Chief Medical Officer and Co-Founder, reporting to Bing Yao. You are tentatively scheduled for a start date of June 1, 2021; with exact date to be determined based on above contingency.

 

You will receive a base salary of $17,500 on a semi-monthly basis, which annualized is $420,000. All base salary payments, as well as other payments and benefits, will be less applicable withholdings.

 

In addition, you will be eligible to participate in the Company’s Incentive Plan, as in effect from time to time. Your annual incentive target bonus is 30%. The Company will, in its sole discretion, determine the amount of the bonus payable, and any bonus awarded will be payable by March 15th of the year following the applicable bonus year, contingent on your continued employment through the end of the applicable bonus year. Your actual incentive award will be based on your individual performance and the overall performance of the Company.

 

Prior to the satisfaction of the Employment Conditions, you will be eligible to receive a grant of Founder’s shares representing 1% of the Company’s outstanding equity securities. As a condition to this grant, you will subscribe for the Founder’s shares for a nominal amount and enter into a Founder Share Restriction Agreement.

 

In addition, following satisfaction of the Employment Conditions, the Company will sponsor an Equity Incentive Plan (the “Equity Plan”), under which the Company can grant compensation in the form of equity awards. Following the satisfaction of the Employment Conditions, subject to the approval of the Board and your entering into a Stock Option Award Agreement, you will be eligible to receive an option award (the “Option”) to purchase a number of shares of the Company’s Common Stock equal to 1% of the Company’s outstanding equity securities at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. To the extent permissible by law, the Option will be awarded in the form of an Incentive Stock Option. The terms, conditions, and limitations of awards under the Equity Plan, and your rights and obligations with respect to Option, will be governed by the applicable Award Agreement and the Equity Plan. Please note that as the Company reviews its compensation plans and policies from time to time for competitiveness and other factors, it may make changes to the Equity Plan in the future.

 

 

As a Company employee, you also will be eligible to participate in certain employee benefit programs as in effect from time to time and subject to the terms of such benefit programs, an overview of which will be available shortly. Some benefit plans will require you to make elections and choose levels of coverage to meet your personal needs.

 

This offer letter is not intended to be, and should not be construed as, a contract of employment for any specific period of time. Employment is at-will, which means that either you or the Company may terminate your employment at any time. The Company may also change the terms and conditions of employment, including the provisions of compensation and benefits programs, at any time.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. By signing below, you agree to honor your contractual and/or common-law obligations not to disclose any proprietary or trade secret information (such as patents, formulas, marketing plans, or confidential client information) you acquired while employed by your current or former employer. Furthermore, to the extent you have post-employment contractual obligations to another employer, by signing this letter below you certify to the Company that you will be able to fully perform the duties and responsibilities of your position with the Company without violating any binding post-employment obligations to any former employer. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

 

As a Company employee, you will be expected to abide by the Company’s rules and standards. This offer of employment is conditioned on your signing on or before your first date of employment the Company’s Restrictive Covenant Agreement, a copy will be provided to you prior to your start date.

 

The Company may 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.

 

We look forward to you joining the Company. This letter sets forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews or pre-employment negotiations, whether written or oral. This letter, including, but not limited to, its at-will employment provision, may not be modified or amended except by a written agreement signed by the CEO of the Company and you.

 

 

Please indicate your acceptance of our offer by signing a copy of the offer letter t and emailing scanned copy back to me. If you have any questions, please call me at

 

Best regards,

 

Robin LaChapelle

Human Resources

 

I accept this offer as described above.

 

/s/ Stuart Lutzker       5/7/21
(Signature) Date
Cc: manager

 

 

Exhibit 10.9

May 21, 2021

 

Robin LaChapelle

 

Dear Robin,

 

I am pleased to confirm our offer of employment to you with ArriVent Biopharma, Inc. (“the Company”). This offer of employment is conditioned on, and will not become effective unless and until, the Company closes a financing round with third party investors of at least $90 million (the “Employment Conditions”).

 

If the Employment Conditions are met and you accept this offer, you will serve in the position of Chief Admistrative Officer and Co-Founder, reporting to Bing Yao. You are tentatively scheduled for a start date of June 1, 2021; with exact date to be determined based on above contingency.

 

Based upon your reduced hour schedule, you will receive a base salary of $10,937 on a semi-monthly basis, which annualized is $262,500. All base salary payments, as well as other payments and benefits, will be less applicable withholdings.

 

In addition, you will be eligible to participate in the Company’s Incentive Plan, as in effect from time to time. Your annual incentive target bonus is 30%. The Company will, in its sole discretion, determine the amount of the bonus payable, and any bonus awarded will be payable by March 15th of the year following the applicable bonus year, contingent on your continued employment through the end of the applicable bonus year. Your actual incentive award will be based on your individual performance and the overall performance of the Company.

 

Prior to the satisfaction of the Employment Conditions, you will be eligible to receive a grant of Founder’s shares representing 1% of the Company’s outstanding equity securities. As a condition to this grant, you will subscribe for the Founder’s shares for a nominal amount and enter into a Founder Share Restriction Agreement.

 

In addition, following satisfaction of the Employment Conditions, the Company will sponsor an Equity Incentive Plan (the “Equity Plan”), under which the Company can grant compensation in the form of equity awards. Following the satisfaction of the Employment Conditions, subject to the approval of the Board and your entering into a Stock Option Award Agreement, you will be eligible to receive an option award (the “Option”) to purchase a number of shares of the Company’s Common Stock at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Any actual grants will be determined at a future time. To the extent permissible by law, the Option will be awarded in the form of an Incentive Stock Option. The terms, conditions, and limitations of awards under the Equity Plan, and your rights and obligations with respect to Option, will be governed by the applicable Award Agreement and the Equity Plan. Please note that as the Company reviews its compensation plans and policies from time to time for competitiveness and other factors, it may make changes to the Equity Plan in the future.

 

As a Company employee, you also will be eligible to participate in certain employee benefit programs as in effect from time to time and subject to the terms of such benefit programs, an overview of which will be available shortly. Some benefit plans will require you to make elections and choose levels of coverage to meet your personal needs.

 

 

This offer letter is not intended to be, and should not be construed as, a contract of employment for any specific period of time. Employment is at-will, which means that either you or the Company may terminate your employment at any time. The Company may also change the terms and conditions of employment, including the provisions of compensation and benefits programs, at any time.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. By signing below, you agree to honor your contractual and/or common-law obligations not to disclose any proprietary or trade secret information (such as patents, formulas, marketing plans, or confidential client information) you acquired while employed by your current or former employer. Furthermore, to the extent you have post-employment contractual obligations to another employer, by signing this letter below you certify to the Company that you will be able to fully perform the duties and responsibilities of your position with the Company without violating any binding post-employment obligations to any former employer. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

 

As a Company employee, you will be expected to abide by the Company’s rules and standards. This offer of employment is conditioned on your signing on or before your first date of employment the Company’s Restrictive Covenant Agreement, a copy will be provided to you prior to your start date.

 

The Company may 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.

 

We look forward to you joining the Company. This letter sets forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews or pre-employment negotiations, whether written or oral. This letter, including, but not limited to, its at-will employment provision, may not be modified or amended except by a written agreement signed by the CEO of the Company and you.

 

 

Please indicate your acceptance of our offer by signing a copy of the offer letter t and emailing scanned copy back to me. If you have any questions, please call me at                     .

 

Best regards, 

 

Bing Yao

Chief Executive Officer

 

I accept this offer as described above. 

/s/Robin LaChapelle           5/21/21
(Signature) Date
cc: manager

 

 

Exhibit 10.10

 

 

 

August 11, 2023

 

Jim Kastenmayer

 

Dear Jim,

 

I am pleased to confirm our offer of employment to you with ArriVent Biopharma, Inc. (“the Company”). You will serve in the position of General Counsel, reporting to Zhengbin Yao, CEO. You are tentatively scheduled for a start date of Tuesday September 5, 2023; with exact date to be determined.

 

You will receive a base salary of $16,666.67 on a semi-monthly basis, which annualized is $400,000. All base salary payments, as well as other payments and benefits, will be less applicable withholdings. You may be eligible to receive a salary increase after completion of the 2023 performance year. Any salary increase will be based on the Company’s and your individual performance, and no salary increases are required.

 

In addition, you will be eligible to participate in the Company’s Incentive Plan, as in effect from time to time. Your annual incentive target bonus is 40%. The Company will, in its sole discretion, determine the amount of the bonus payable, and any bonus awarded will be payable by March 15th of the year following the applicable bonus year, contingent on your continued employment through the payout date of the bonus. Your actual incentive award will be based on your individual performance and the overall performance of the Company.

 

Following the satisfaction of the Employment Conditions, subject to the approval of the Board and your entering into a Stock Option Award Agreement, you will be eligible to receive an option award (the “Option”) to purchase 1,000,000 options of the Company’s outstanding equity securities at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. To the extent permissible by law, the Option will be awarded in the form of an Incentive Stock Option. The terms, conditions, and limitations of awards under the Equity Plan, and your rights and obligations with respect to Option, will be governed by the applicable Award Agreement and the Equity Plan. Please note that as the Company reviews its compensation plans and policies from time to time for competitiveness and other factors, it may make changes to the Equity Plan in the future.

 

As a Company employee, you also will be eligible to participate in certain employee benefit programs as in effect from time to time and subject to the terms of such benefit programs. Some benefit plans will require you to make elections and choose levels of coverage to meet your personal needs.

 

This offer letter is not intended to be, and should not be construed as, a contract of employment for any specific period of time. Employment is at-will, which means that either you or the Company may terminate your employment at any time. The Company may also change the terms and conditions of employment, including the provisions of compensation and benefits programs, at any time.

 

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. By signing below, you agree to honor your contractual and/or common-law obligations not to disclose any proprietary or trade secret information (such as patents, formulas, marketing plans, or confidential client information) you acquired while employed by your current or former employer. Furthermore, to the extent you have post-employment contractual obligations to another employer, by signing this letter below you certify to the Company that you will be able to fully perform the duties and responsibilities of your position with the Company without violating any binding post-employment obligations to any former employer. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third-party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

 

As a Company employee, you will be expected to abide by the Company’s rules and standards. This offer of employment is conditioned on your signing on or before your first date of employment the Company’s Restrictive Covenant Agreement, a copy of which will be provided to you prior to your start date.

 

The Company may 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.

 

We look forward to you joining the Company. This letter sets forth the terms of your employment with the Company and supersedes any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews, or pre-employment negotiations, whether written or oral. This letter, including, but not limited to, it’s at-will employment provision, may not be modified or amended except by a written agreement signed by the CEO of the Company and you.

 

 

Please indicate your acceptance of our offer by signing a copy of the offer letter. If you have any questions, please call me at.

 

Best regards,

 

/s/ Robin LaChapelle
Robin LaChapelle
Chief Administrative Officer

 

I accept this offer as described above.

 

/s/ Jim Kastenmayer	8/13/2023
Jim Kastenmayer	Date

 

 

 

Exhibit 10.11

 

 

January 3, 2024

 

Winston Kung

 

Dear Winston,

 

I am pleased to confirm our offer of employment to you with ArriVent Biopharma, Inc. (“the Company”). You will initially serve in the position of Chief Financial Officer & Treasurer, reporting to Bing Yao, CEO; with review for title expansion by or before June 2024. You are tentatively scheduled for a start date of January 4, 2024; with exact date to be determined.

 

You will receive a base salary of $19,791.67 on a semi-monthly basis, which annualized is $475,000. All base salary payments, as well as other payments and benefits, will be less applicable withholdings. You may be eligible to receive a salary increase after completion of the 2024 perforamnce year. Any salary increase will be based on the Company’s and your individual performance, and no salary increases are required.

 

In addition, you will be eligible to participate in the Company’s Incentive Plan, as in effect from time to time. Your annual incentive target bonus is 40%. The Company will, in its sole discretion, determine the amount of the bonus payable, and any bonus awarded will be payable by March 15th of the year following the applicable bonus year, contingent on your continued employment through the the payout date of the bonus. Your actual incentive award will be based on your individual performance and the overall performance of the Company.

 

Following the satisfaction of the Employment Conditions, subject to the approval of the Board and your entering into a Stock Option Award Agreement, you will be eligible to receive an option award (the “Option”) to purchase 3,000,000 options of the Company’s outstanding equity securities at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. To the extent permissible by law, the Option will be awarded in the form of an Incentive Stock Option. The terms, conditions, and limitations of awards under the Equity Plan, and your rights and obligations with respect to Option, will be governed by the applicable Award Agreement and the Equity Plan. Please note that as the Company reviews its compensation plans and policies from time to time for competitiveness and other factors, it may make changes to the Equity Plan in the future.

 

As a Company employee, you also will be eligible to participate in certain employee benefit programs as in effect from time to time and subject to the terms of such benefit programs. Some benefit plans will require you to make elections and choose levels of coverage to meet your personal needs.

 

 

This offer letter is not intended to be, and should not be construed as, a contract of employment for any specific period of time. Employment is at-will, which means that either you or the Company may terminate your employment at any time. The Company may also change the terms and conditions of employment, including the provisions of compensation and benefits programs, at any time.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. By signing below, you agree to honor your contractual and/or common-law obligations not to disclose any proprietary or trade secret information (such as patents, formulas, marketing plans, or confidential client information) you acquired while employed by your current or former employer. Furthermore, to the extent you have post-employment contractual obligations to another employer, by signing this letter below you certify to the Company that you will be able to fully perform the duties and responsibilities of your position with the Company without violating any binding post-employment obligations to any former employer. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third-party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.

 

As a Company employee, you will be expected to abide by the Company’s rules and standards. This offer of employment is conditioned on your signing on or before your first date of employment the Company’s Invention and Non-Disclosure Agreement, a copy will be provided to you prior to your start date.

 

The Company may 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.

 

We look forward to you joining the Company. This letter sets forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews, or pre-employment negotiations, whether written or oral. This letter,

 

 

including, but not limited to, it’s at-will employment provision, may not be modified or amended except by a written agreement signed by the CEO of the Company and you.

 

Please indicate your acceptance of our offer by signing a copy of the offer letter. If you have any questions, please call me at [                    ].

 

Best regards,

 

/s/ Robin LaChapelle

 

Robin LaChapelle

Chief Operating Officer

 

 

I accept this offer as described above.

 

 

/s/ Winston Kung	January 4, 2024
Winston Kung	Date

 

 

 

Exhibit 10.12

 

GLOBAL TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

 

between

 

ArriVent Biopharma, Inc.

 

and

 

Shanghai Allist Pharmaceuticals Co., Ltd.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Table of Contents

 

Page

 

1.

DEFINITIONS AND INTERPRETATIONS

1

 

2.

LICENSING

10

 

3.

COLLABORATION COMMITTEE

12

 

4.

DEVELOPMENT

14

 

5.

COMMERCIALIZATION; MANUFACTURE AND SUPPLY

16

 

6.

FINANCIALS AND REPORTS

19

 

7.

INTELLECTUAL PROPERTY

25

 

8.

INFRINGEMENT AND ENFORCEMENT Third Party Infringement Actions

27

 

9.

CONFIDENTIALITY

29

 

10.

INDEMNIFICATION, REPRESENTATIONS AND WARRANTIES

31

 

11.

TERM AND TERMINATION

35

 

12.

DISPUTE RESOLUTION

38

 

13.

MISCELLANEOUS

39

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

This GLOBAL TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (this “Agreement”) is effective from the Effective Date by and between:

 

Shanghai Allist Pharmaceuticals Co., Ltd., (“Allist”) a limited liability Company incorporated under the laws of China, having its principal place of business at No. 1118 Halei Road, Pudong New District, Shanghai, China;

 

and

 

ArriVent BioPharma, Inc. (“ArriVent”), a Delaware corporation, registered at 251 Little Falls Drive, City of Wilmington, Delaware 19808 (each a Party; collectively, Parties.)

 

RECITAL

 

A.            WHEREAS, Allist owns the Allist IP in and relating to Licensed Compounds (as defined below);

 

B.            WHEREAS, Allist desires to collaborate with ArriVent to grant an exclusive license to ArriVent to Exploit the Products in the Field in the Licensed Territory (as defined below), subject to the terms and conditions set forth herein;

 

C.            WHEREAS, ArriVent wishes to obtain an exclusive license to Exploit the Products in the Licensed Territory; and

 

D.            WHEREAS, Allist will retain its right to Exploit Products in the Retained Territory (as defined below).

 

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

 

1.            DEFINITIONS AND INTERPRETATIONS

 

1.1           Interpretation. In this Agreement, a reference to:

 

1.1.1            a paragraph, section, exhibit or schedule is a reference to a paragraph, section, exhibit or schedule to this Agreement;

 

1.1.2            any document includes a reference to that document (and, where applicable, any of its provisions) as amended, novated, supplemented or replaced from time to time;

 

1.1.3            a statute or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;

 

1.1.4            the headings contained in this Agreement are for convenience of reference only and shall not be considered in construing this Agreement.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.1.5            the singular includes the plural and vice versa, except as it regards the definitions of Party and Parties;

 

1.1.6            a party, person or entity includes:

 

(a)               an individual, firm, company, corporation, association, trust, estate, state or agency of a state, government or government department or agency, municipal or local authority and any other entity, whether or not incorporated and whether or not having a separate legal personality; and

 

(b)               an employee, agent, successor, permitted assign, executor, administrator and other representative of such party, person or entity;

 

1.1.7            one gender includes the other;

 

1.1.8            “written” and “in writing” include any means of reproducing words, figures or symbols in a tangible and visible form;

 

1.1.9            a day, month or year is a reference to a calendar day, calendar month or calendar year, as the case may be;

 

1.1.10          individuals or persons include companies and other corporations and vice versa;

 

1.1.11          the words “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to.”

 

1.2           Definitions. In this Agreement (including the Exhibits and Schedules), the capitalized terms shall have the following meanings:

 

“Accounting Standards” means (a) United States Generally Accepted Accounting Principles (“GAAP”); or (b) International Financial Reporting Standards (“IFRS”), in each case, as generally and consistently applied by the applicable Selling Party (as defined below).

 

“Affiliate” means any corporation or other entity that controls, is controlled by, or is under common control with a Party. A corporation or other entity will be regarded as in control of another corporation or entity if such corporation or entity owns or directly or indirectly controls fifty percent (50%) or more of the voting stock or other ownership interest of the corporation or other entity, or if such corporation or entity possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the corporation or other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the corporation or other entity.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Agreement” means this Global Technology Transfer and License Agreement, including its Exhibits and Schedules, which the Parties may amend or supplement from time to time.

 

“Active Ingredient” means any chemical component that determines the function of a product. An Active Ingredient can be, without limitation, antigens, enzymes, and chemical compounds, including any respective salt, hydrate, solvate or oxide anhydrides, esters, amides, metabolic precursors or prodrugs, isomers, active metabolites, complexes, conjugates, polymorph or physical forms thereof.

 

“Allist Know-How” means all Know-How (excluding any Allist Patent Rights) that is Controlled as of the Effective Date or thereafter during the Term by Allist and is reasonably necessary or reasonably useful to Exploit Product(s) in the Field, including any such Know-How made by or on behalf of Allist in the course of performing Allist’s obligations or exercising Allist’s rights under this Agreement and any Allist Results. For the avoidance of doubt, Allist Know-How includes, but is not limited to, any and all technical data, reports, information, procedures, techniques and other know-how or any trade secrets owned or Controlled by Allist, including any Know-How that is an Improvement and any Joint Inventions.

 

“Allist Patent Rights” means all Patent Rights that are Controlled by Allist as of the Effective Date and during the Term of the Agreement that claim a composition of matter or any composition or formulation of, claim a method of making or using, or would otherwise be infringed by Exploiting a Product in the Licensed Territory. For the avoidance of doubt, Allist Patent Rights includes any Patent Rights that cover an Improvement and any Joint Patents.

 

“Allist IP” means the Allist Patent Rights, Allist Improvements and the Allist Know-How.

 

“Allist Results” means any information, data and result which Allist generates or collects in the conduct of any Global Study in the Retained Territory.

 

“Allist Trademarks” means the trademarks owned or Controlled by Allist and listed on Schedule 1 attached hereto.

 

“ArriVent Improvement” means any improvement or enhancement to the Allist Know-How that is: (a) made or discovered by ArriVent (either solely or jointly) in the practice of the licenses granted under this Agreement during the Term; and (b) Controlled by ArriVent or its Affiliates during the Term.

 

“ArriVent Results” means any information, data and result that relates solely and exclusively to the Products, which ArriVent generates or collects in the conduct of clinical trials (including any Global Study) or preclinical activities with the Products in the Licensed Territory.

 

“Business Day” means a day other than a Saturday, Sunday, or a bank or other public holiday in New York, NY, USA.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“CDA” means that certain Confidential Disclosure Agreement dated as of [***], by and between the Parties.

 

“Commercially Reasonable Efforts” means with respect to ArriVent, an obligation under this Agreement, the effort, expertise and resources normally used by ArriVent in the development and/or Commercialization of a compound or product owned or controlled by ArriVent which is of similar market potential at a similar stage in its development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable products, and other relevant factors.

 

“Confidential Information” means, with respect to a Party (a “Disclosing Party”), all data, results, and information of any type whatsoever, in any tangible or intangible form, including know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports, customer information, business or financial information, expertise, technology, test data including pharmacological, biological, chemical, biochemical, toxicological, and clinical test data, analytical and quality control data, stability data, studies and procedures, that is disclosed to the other Party (the “Receiving Party”) under this Agreement. For clarity, (a) the existence and terms of this Agreement are the Confidential Information of both Parties; (b) all information disclosed by a Disclosing Party to the other Party under the CDA is deemed the Confidential Information of such Disclosing Party under this Agreement; (c) all information disclosed by ArriVent under the Confidentiality Agreement that relates to the transaction under this Agreement is deemed the Confidential Information of ArriVent under this Agreement; (d) all Allist IP will be deemed to be the Confidential Know-How of Allist, to which ArriVent shall have a license in accordance with this Agreement; (e) all Inventions of the owning Party as set forth in Article 7 shall be deemed the Confidential Information of such Party; (f) any scientific, technical, manufacturing or financial information and information disclosed through an audit report, Commercialization report, development report or other report, shall constitute Confidential Information of the Disclosing Party; and (g) all Confidential Information which has been disclosed by either Party to the other Party pursuant to the Existing Confidentiality Agreement shall be deemed to be such Party’s Confidential Information hereunder.

 

“Control” means, with respect to any material, information, or intellectual property right, that a Party owns or has a license to such material, information, or intellectual property right and has the ability to grant to the other Party access, a license, or a sublicense (as applicable) to such material, information, or intellectual property right on the terms and conditions set forth herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be first required hereunder to grant to the other Party such access, license, or sublicense.

 

“Collaboration Committee” or “CC” is defined in Article 3.1.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Commercialize” or “Commercialization “means any and all activities directed to marketing, promoting, manufacturing, packaging and distributing a Licensed Product, offering for sale and selling of a Licensed Product, and exporting or importing a Licensed Product for sale. When used as a verb, “Commercialize” means to engage in Commercialization.

 

“Development Program” means the development activities with respect to the Licensed Product performed by ArriVent, and/or its Affiliate(s) in the Licensed Territory in accordance with the Product Development Plan as revised from time to time as provided in this Agreement.

 

“Dollar” or “$” means the lawful currency of the United States of America.

 

“Effective Date” means the date (1) when both Parties have duly executed this Agreement and (2) both Parties have approved the execution of this Agreement and the transaction under this Agreement according to their respective company governance, whichever occurs later. For clarity, this Agreement does not bind either Party unless and until the board of directors and the general assembly of the shareholders of Allist approve this Agreement.

 

“Exploit” or “Exploitation” means to make, have made, import, export, use, sell, or offer for sale, including to research, develop, Commercialize, register, hold, or keep (whether for disposal or otherwise), have used, transport, distribute, promote, market, or have sold or otherwise dispose of. When used as a verb, “Exploit” means to conduct Exploitation.

 

“Field” means [***].

 

“First Commercial Sale” of any Product means the first sale for use by an end-user customer of such Product, as applicable, in a country (following receipt of all Regulatory Approvals that are required in order to sell such Product in such country); provided, that the following shall not constitute a First Commercial Sale: (a) any sale to an Affiliate or sublicensee, unless such Affiliate or sublicensee is the last person or entity in the distribution chain of the Licensed Product; or (b) any use of such Product in clinical trials or non-clinical development activities with respect to such Product by or on behalf of a Party, or disposal or transfer of such Product for a bona fide charitable purpose, compassionate use, or samples if no monetary consideration is received for such use or transfer.

 

“First Indication” is defined in Article 6.3.2

 

“Force Majeure” is defined in Article 13.4.

 

“Global Development Plan” means the global development plan for any Global Study that the Parties agree to undertake pursuant to this Agreement, which shall include a budget, to be prepared by the Parties and reviewed by the CC, as such plan may be amended from time to time in accordance 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) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Global Study” means any global clinical trial to be conducted with any Product that the Parties mutually agree to conduct. For clarity, (a) any clinical study to be performed in the Retained Territory only is not a Global Study even if the data generated from such study will be shared for use in the Licensed Territory and (b) any clinical study to be performed in the Licensed Territory only is not a Global Study even if the data generated from such study will be shared for use in the Retained Territory.

 

“Allist Improvement” means any improvement or enhancement to the Allist Know-How that is: (a) made or discovered by Allist (either solely or jointly) during the Term; and (b) Controlled by Allist or its Affiliates during the Term.

 

“Initial Payment” means the upfront payment as set out in Article 6.2.

 

“Invention” means any Know-how, process, method, composition of matter, article of manufacture, polymorph, discovery, or finding that is conceived or reduced to practice, constructively or actually, by either Party or jointly by the Parties in connection with the development of a Product under this Agreement. For clarity, the term “Invention” shall exclude any ArriVent Results and any Allist Results.

 

“Joint Invention(s)” is defined in Article 7.3.

 

“Know-How” means any and all formulae, processes, trade secrets, technologies, know-how, inventions, improvements, discoveries and claims (including confidential data and Confidential Information), whether patentable or unpatentable, including, without limitation, synthesis, preparation, recovery and purification processes and techniques, control methods and assays, chemical data, toxicological and pharmacological data and techniques, clinical data, medical uses, product forms and product formulations and specifications.

 

“Licensed Compound” means (a) the chemical compound of Furmonertinib, coded by [***], (b) [***] (collectively “Furmonertinib”) and (c) any other compound that is claimed in the Allist Patent Rights, in each case regardless of its finished form, formulation or dosage.

 

“License Grant” means the license granted under Article 2.

 

“Licensed Territory” means all countries and territories, excluding the Retained Territory.

 

“Major Market Countries” means [***].

 

“Materials” shall have the meaning given to it under Article 2.4.

 

“Milestone Event” means each of the milestone events set out in Article 6.3.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Milestone Payment” means the corresponding payment made by Allist to ArriVent after achievement of a Milestone Event with a Licensed Product set out in Article 6.3

 

“Net Sales” mean, with respect to a Product, the gross amount invoiced by ArriVent (including any ArriVent Affiliate) or any sublicensee) thereof (a “Selling Party”) to unrelated Third Parties (excluding any sublicensee) for Product sales in the Licensed Territory, less the following:

 

(a)               customary trade, quantity and cash discounts allowed, cash and non-cash coupons, and charge-back payments and rebates granted to any Third Party (including to Regulatory Agencies, purchasers, reimbursers, customers, distributors, wholesalers, and group purchasing and managed care organizations or entities (and other similar entities and institutions)) that are not otherwise attributable to other products of the Selling Party;

 

(b)               discounts, refunds, rebates, chargebacks, retroactive price adjustments and similar allowances, limited to reasonable adjustments and allowances which effectively reduce the net selling price;

 

(c)               actual Product returns or allowances (accounting allowances for returns or disposal of returned Product) and any other credits or allowances, if any, on account of price adjustments, recalls, claims, damaged goods, rejections, or returns of items previously sold (including Licensed Product returned in connection with recalls or withdrawals);

 

(d)               insurance, customs charges, freight, postage, shipping, handling, and other transportation costs incurred by a Selling Party in shipping Licensed Product to a Third Party, to the extent actually incurred and itemized; and

 

(e)               any tax imposed on the sales of Products which is typically deducted before calculating the amount of Net Sales according to applicable Accounting Standards, including, for instance, to the extent applicable, import taxes, export taxes, excise taxes (including annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48) and other comparable applicable law), sales tax, value-added taxes, consumption taxes, duties, or other taxes levied on, absorbed, determined, or imposed with respect to such sales), excluding income or net profit taxes or franchise taxes of any kind.

 

Such amounts will be determined from the books and records of the Selling Party, maintained in accordance with the Accounting Standards, consistently applied. ArriVent further agrees in determining such amounts, it will use ArriVent’s then-current standard procedures and methodology, including ArriVent’s then-current standard exchange rate methodology for the translation of foreign currency sales into U.S. Dollars or, in the case of sublicensees, such similar methodology, consistently applied.

 

In the event the Product is sold together with one or more other product(s) at a single price (such combination is hereinafter referred to as a “Combination Product”), [***].

 

In the event that the weighted average sale price of the Product can be determined but the weighted average sale price of the other product(s) cannot be determined, [***].

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

In the event that the weighted average sale price of the other product(s) can be determined but the weighted average sale price of the Product cannot be determined, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the following formula: [***].

 

In the event that the weighted average sales price of both the Product and the other product(s) in the Combination Product cannot be determined, Net Sales with respect to such Combination Product shall be commercially reasonable and determined by good faith negotiation between Allist and ArriVent consistent with the ratios referenced above.

 

“Notice” is defined in Article 13.6.

 

“Patent Rights” means all patents and patent applications, including: (i) all substitutions, divisions, continuations, continuations-in-part thereof and requests for continued examination of any of the foregoing, (ii) all patents issued from any of the foregoing patent applications, (iii) all reissues, renewals, registrations, confirmations, re-examinations, extensions, and supplementary protection certificates of any of the foregoing, and (iv) all foreign equivalents of any of the foregoing.

 

“PRC” means, for the purpose of this Agreement, the People’s Republic of China, excluding Hong Kong, Macau and Taiwan.

 

“Primary Contact Person” means the respective individuals designated by Allist and ArriVent, as noted in Exhibit B, who will be responsible for the day-to-day interactions between the Parties related to the Development Program and the management of the day-to-day operations of the Development Program. Each Party may change its Primary Contact Person upon Notice to the other Party.

 

“Product” or “Licensed Product” means any product containing a Licensed Compound as the sole Active Ingredient or in combination with one or more other Active Ingredients in all forms, presentations, and formulations (including manner of delivery and dosage). For clarity, a Product is not considered a separate Product because of use of a different trade name or trademark or because of variations in formulation in which the Active Ingredient is the same or substantially equivalent.

 

“Product Development Plan” means the written Product development plan for each Product selected by ArriVent for development (including a corresponding budget), as amended from time to time by ArriVent and reviewed by CC. ArriVent shall prepare a draft Product Development Plan for each Product.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Program Year” means each twelve (12) calendar month period starting from January 1 through December 31 during the term of the Development Program, except (i) in the first Program Year in which case the Program Year will be the period from the Effective Date through December 31 of that calendar year; and (ii) in the last Program Year in which case the Program Year will not be the period from January 1 of that calendar year through the date that the Development Program ends.

 

“Regulatory Agency” means, any governmental authority that regulates pharmaceutical products, including but not limited to the Drug Enforcement Administration (“DEA”), including the Controlled Substance Section (“CSS”); the Environmental Protection Agency (“EPA”); the Food and Drug Administration (“FDA”), including the Center for Veterinary Medicine (“CVM”) and the Center for Drug Evaluation and Research (“CDER”); the Food Safety and Inspection Service (“FSIS”); the U.S. Department of Agriculture (“USDA”); or any counterparts thereof in jurisdictions outside of the United States.

 

“Regulatory Approval” means all official approvals by applicable Regulatory Agencies in a country (or supra-national organizations, such as the EMA) which are required for the first use or sale, including, importation, manufacture (where manufacture is required), and if required, approvals for pricing or reimbursement of, a Licensed Product in such country.

 

“Regulatory Filing” means any filing, application, or submission with any Regulatory Agency, including authorizations, approvals or clearances arising from the foregoing, including Regulatory Approvals, and all correspondence or communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case, with respect to a Product.

 

“Reporting Period” is defined in Article 6.11.

 

“Retained Territory” means the People’s Republic of China, including Hong Kong, Macau and Taiwan.

 

“Royalty” and “Royalty Rate shall have the meaning as set out under Article 6.5.

 

“Second Indication” is defined in Article 6.3.3.

 

“Sole Invention(s)” is defined in Article 7.3.

 

“Term” is defined in Article 11.1.

 

“Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including any interest thereon).

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

“Third Party” means any entity, including any natural person, other than Allist or ArriVent and their respective Affiliates.

 

“Third Party IP” means any patent or other intellectual property rights belonging to a Third Party in any jurisdiction in the Licensed Territory that is necessary or useful to Exploit the Licensed Compounds or the Products.

 

“Third-Party Payment” means any payments that will be paid to any Third-Party Licensor for Third Party IP.

 

“Valid Claim” means a claim of any patent within the Allist Patent Rights that: (a) has issued and has not expired, lapsed, been cancelled, or abandoned, or been dedicated to the public, disclaimed, or held unenforceable, invalid, unpatentable, revoked, or cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including through opposition, reexamination, reissue, disclaimer, inter parties review, post grant review, post grant procedures, or similar proceedings; or (b) is a pending claim of an unissued, pending patent application, which application has not been pending for more than the greater of [***] ([***]) years since (i) its earliest claimed priority date or (ii) the date of the first response on the merits received from the relevant patent office regarding such application.

 

2.            LICENSING

 

2.1           License Grant.

 

(a)               Subject to the terms and conditions of this Agreement, Allist hereby grants to ArriVent an exclusive, even as to Allist and its Affiliates, license (with the right to grant sublicenses through multiple tiers) under the Allist IP to Exploit the Licensed Compounds and Products in the Field and in the Licensed Territory.

 

(b)               Subject to the terms and conditions of this Agreement, Allist hereby grants to ArriVent a license, with the right to grant sublicenses, through multiple tiers, to use the Allist Trademarks solely in connection with the Commercialization of the Licensed Product in the Field in the Licensed Territory (the “Trademark License”). The Trademark License is exclusive only in relation to the Commercialization of the Licensed Product in the Field in the Licensed Territory and Allist retains the right to use by itself or license to Third Parties the right to use the Allist Trademark in relation to pharmaceutical products other than the Products or in any field other than the Field in the Licensed Territory. ArriVent agrees that the nature and quality of the Licensed Products Commercialized by it under the Allist Trademarks, together with all related advertising, promotional and other related uses of the Allist Trademarks by ArriVent shall conform in all respects with the trademark guidelines ArriVent follows in respect of its own proprietary trademarks. ArriVent shall follow Allist’s brand guidance (which Allist may provide ArriVent from time to time) in using Allist Trademarks. Allist will have the right to monitor ArriVent’s use of the Allist Trademarks and to request that ArriVent correct any failure to comply with this Section 2.1(b) which Allist reasonably determines is likely to adversely affect the strength or value of such trademark, such request not to be unreasonably refused.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

2.2           Rights Retained. Allist retains its rights for any and all purposes in the Retained Territory to Exploit any Allist IP, including to research, develop, make, have made, use, sell, have sold, offer for sale, import, export and license products and processes in the Retained Territory.

 

2.3           Sublicenses. Subject to the other provisions of this Agreement, ArriVent may grant sublicenses of the licenses granted in Section 2.1 through multiple tiers, to any Affiliates or Third Parties, on the condition that:

 

(a)               such sublicense occurs pursuant to a written agreement that (i) is subject to the terms and conditions of this Agreement (ii) contains confidentiality and non-compete terms which are consistent with the terms and conditions of this Agreement, and (iii) does not in any way diminish, reduce or eliminate any of ArriVent’s obligations under this Agreement; and

 

(b)               ArriVent provides Allist with a copy of such sublicensing agreement and if any further sublicenses are granted, procures the provision to Allist with a copy of such further sublicensing agreement, subject to ArriVent’s right to redact any confidential or proprietary information contained therein that is not necessary for Allist to determine compliance with this Agreement.

 

(c)               ArriVent shall procure that each sublicensee (and further sublicensees) enter into an undertaking with ArriVent, committing such party to comply with the confidentiality, and non-compete terms of this Agreement as if they were parties to this Agreement.

 

ArriVent shall ensure that all sublicensees and further sublicensees (in case multi-tier sublicenses are granted) shall comply with this clause and shall enforce any failure to comply against such sublicensee and further sublicensee. ArriVent shall be jointly and severally responsible with its sublicensees and any further sublicensees for failure by its sublicensees (and further sublicensees) to comply with all such applicable restrictions and limitations in accordance with the terms and conditions of this Agreement. For purposes of clarity, any reference to sublicensees under this Agreement shall include the concept of further sublicensees in case of multi-tier sublicenses.

 

2.4           Grant-Back License. Subject to the terms and conditions of this Agreement, ArriVent hereby grants to Allist a non-exclusive license (with the right to grant sublicenses through multiple tiers) to use the ArriVent Results and ArriVent Improvements to Exploit the Licensed Compounds and Products in the Field and in the Retained Territory.

 

2.5           Transfer of Documents and Information; Support.

 

(a)               Within [***] ([***]) days following the Effective Date of this Agreement, and in accordance with a plan to be agreed upon by Allist and ArriVent, which shall be subject to any approval or filing requirements under the PRC law (which approvals or filings will be initiated by Allist promptly after the Effective Date of this Agreement and diligently pursued), Allist shall transfer all records and data (including but not limited to the Know-How, preclinical and clinical data, preclinical development, formulation, and manufacturing/CMC data discussed above), information, and materials and Regulatory Filings, or copies thereof, related to the Licensed Compounds Controlled by Allist (collectively “Materials”) on an “as is” basis. Except as provided below, Allist makes no warranties of any kind, either express or implied, with respect to such Materials and expressly disclaims all implied warranties, including, without limitation, those of merchantability and fitness for a particular use.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

(b)               If within [***] ([***]) days of the Effective Date, either or both Parties become aware of Materials but were not transferred to ArriVent under this Section 2.5, then such Party shall provide written notice to the other Party and Allist shall promptly disclose and transfer such Materials to ArriVent. Allist shall provide reasonable technical assistance and support, by making appropriate employees available to ArriVent at reasonable times, places, and frequency, and upon reasonable prior notice for the purpose of assisting ArriVent to understand and use such Materials in connection with ArriVent’s development, manufacture and Commercialization of Licensed Products. In addition, to the extent requested by ArriVent, Allist shall provide ArriVent with the translation into English of any of the foregoing Materials to the extent not in English.

 

2.6           Trademarks. ArriVent shall have right, but not the obligation, to brand the Licensed Products using trademarks and trade names it determines appropriate in its sole discretion for the Licensed Products, which may vary within the Licensed Territory (the “Licensed Product Marks”) without violating the conditions under Section 2.1(b). As between the Parties, ArriVent shall own all rights in the Licensed Product Marks (except with respect to the Allist Trademarks) and shall register and maintain the Licensed Product Marks to the extent it determines reasonably necessary.

 

2.7           No Implied Licenses. Each Party acknowledges that the licenses granted under this Article 2 are limited to the scope expressly granted. Any rights of Allist not expressly granted to ArriVent under this Agreement will be retained by Allist. Further, no rights are granted to ArriVent under any other intellectual property Controlled by Allist other than Allist IP.

 

3.            COLLABORATION COMMITTEE

 

3.1           Collaboration Committee Formation and Composition. A joint committee comprised of [***] ([***]) members, consisting of [***] ([***]) named representatives of each, ArriVent and Allist (the “CC”), will be appointed within [***] ([***]) Business Days of the Effective Date.

 

3.2           Collaboration Committee Functions and Powers. The CC will be responsible for overseeing the Parties’ development activities related to the Licensed Compounds in each of the Retained Territory and the Licensed Territory. Notwithstanding anything to the contrary, the CC will have no decision-making authority and will have no right, power or authority to amend this Agreement. The principal functions of the Collaboration Committee will include:

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

3.2.1            discussing with ArriVent its Development Plan for developing the Products in the Licensed Territory by taking into account in good faith the development activities of Allist in the Retained Territory;

 

3.2.2            reviewing any Global Development Plan and monitoring the progress and results achieved under each Global Study;

 

3.2.3            providing input into (a) the design of each Global Study to be performed, (b) the responses to be made to the Regulatory Agencies with respect to such Global Study; and (c) the responses to be made to any requests for scientific advice from the applicable Regulatory Agencies with respect to such Global Study;

 

3.2.4            keeping each Party informed of all material development activities related to the Licensed Compound and Products to ensure overall alignment of development of the Licensed Compound and Products in the Licensed Territory and the Retained Territory;

 

3.2.5            monitoring the progress and results achieved under the Product Development Program;

 

3.2.6            providing input into (a) the design of the clinical trials to be performed to obtain the applicable Regulatory Approvals for the Products in the Licensed Territory, (b) the responses to be made to the Regulatory Agencies with respect to the Products; and (c) the responses to be made to any requests for scientific advice from the applicable Regulatory Agencies; and

 

3.2.7            discussing proposals for further development and support of the Products post-Marketing Authorization.

 

3.3           Governance. Unless otherwise agreed by the Parties, the CC will meet at least every [***] ([***]) months. Each Party shall procure that its representatives on the CC duly exercise their authorities under this Article. A Party may change one or more of its representatives to the CC at any time, provided, however, such Party shall duly inform the other Party of such change in writing within a reasonable time prior to the next meeting of the CC. Members of the CC may be represented at any meeting by another member of the CC, or by a proxy. Either Party may permit additional employees and consultants to attend and participate (on a non-voting basis) in the CC meetings, subject to such Party providing prior written notice to the other Party and to the compliance by such additional employees and consultants with the confidentiality provisions of this Agreement.

 

3.4           Chair. The CC will be chaired by one ArriVent representative appointed by ArriVent.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

3.5           Minutes and Reports. The CC will be responsible for keeping accurate minutes of its deliberations that record all decisions and all actions recommended or taken. Within [***] ([***]) Business Days of each meeting, the chair will provide the Parties with draft minutes of such meeting and any issues requiring resolution and any decision and action recommended or taken to all members of the CC. All records of the CC will be considered Confidential Information and will be available to both Parties.

 

4.            DEVELOPMENT

 

4.1           Performance of Development Program. Subject to the terms and conditions of this Agreement, ArriVent shall use Commercially Reasonable Efforts to develop Products in the Licensed Territory.

 

4.2           Development Program. The development of Products will be conducted in accordance with the Product Development Plan. Except for the first Program Year, the Product Development Plan will be reviewed by the CC no later than [***] ([***]) days prior to the start of each Program Year. A Product Development Plan for the first Program Year shall be presented to CC by ArriVent within reasonable time after the Effective Date. CC shall review the first Program Year’s Product Development Plan within a reasonable time after initial presentation to CC. The Product Development Plan in effect at any time may not be amended except as reviewed by the CC. If at any time during the Program Year, ArriVent determines that a change to the Product Development Plan is necessary, ArriVent will prepare and submit to the CC a written proposal detailing its proposed changes to the Product Development Plan.

 

4.3           Conduct of Global Studies. If the Parties mutually agree to conduct a Global Study, one or both Parties shall prepare and submit the proposed strategy, protocol design, budget and internal process timeline for such Global Study in reasonable detail to the CC for its review at least [***] ([***]) days (or any other period of time the Parties agree to) in advance of its anticipated date of initiation. Subject to the foregoing, (a) Licensee shall have the sole responsibility, at its sole cost and expense, for the conduct of the Global Study in the Licensed Territory and (b) Allist shall have the sole responsibility, at its sole cost and expense, for the conduct of the Global Study outside of the Licensed Territory. Each Party will provide written updates to the CC not less than once each calendar quarter with respect to the conduct of such Global Study. Each Party shall maintain and shall cause its Affiliates and licensees and sublicensees to maintain reasonably complete and accurate records regarding their conduct of the Global Study in the Licensed Territory (with respect to ArriVent) or the Retained Territory (with respect to Allist), as applicable. Upon the other Party’s reasonable request not more frequently than once each calendar quarter during which a Party or its Affiliates are performing any Global Study, such Party will provide the other Party such copies of or access to such records as such Party may reasonably request. Each Party shall conduct, and shall ensure that its Affiliates conduct, each Global Study in compliance with the requirements of applicable law and regulations.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

4.4           Product Development by ArriVent. Notwithstanding anything to the contrary in this Agreement, ArriVent shall be responsible for performing all related Product development activities in the Field in the Licensed Territory at its expense from the Effective Date, including the preparation and submission of the appropriate regulatory documents required for Commercialization of the Product within the Field in the Licensed Territory, unless otherwise agreed to by the Parties in the Development Program Plan.

 

4.5           Responsibility for Regulatory Approvals. ArriVent shall have sole responsibility for, and shall bear the cost of preparing, all regulatory filings and related submissions, including Regulatory Approval applications, with respect to Licensed Products in the Licensed Territory. ArriVent shall use Commercially Reasonable Efforts in preparing and submitting all such regulatory filings and in seeking Regulatory Approvals in all Major Market Countries in the Licensed Territory. ArriVent shall own all Regulatory Approvals for the Licensed Product in each of the jurisdictions in the Licensed Territory.

 

4.6           Reporting of Progress. ArriVent shall provide CC with complete and accurate semi-annual periodic reports detailing progress made on the Development of Licensed Compounds and Licensed Products. Such reports shall include at minimum a semi-annual summary report of all clinical trial results and other Development activities.

 

4.7           Data Sharing. ArriVent shall provide to Allist any and all ArriVent Results with respect to preclinical studies and clinical trials relating to the Licensed Compounds undertaken by ArriVent or on its behalf with no extra cost to Allist. In any agreement ArriVent enters with a Third-Party partner for the collaborative development of the Licensed Product for the Licensed Territory, ArriVent use commercially reasonable efforts to procure that such Third Party will agree to provide to Allist all data resulting from research and development undertaken by ArriVent and/or such partner(s). Without limiting the foregoing, each Party shall provide to the other Party any data and results generated by such Party in the conduct of any Global Study with no extra cost to the other Party. In any agreement that either Party enters into with a Third-Party for the conduct of any Global Study, such Party will use commercially reasonable efforts to procure that such Third Party will agree to provide to the other Party all data and results resulting from the conduct of the Global Study by such Third Party.

 

4.8           Right of ArriVent to Cross-Reference. Allist hereby grants ArriVent the right to cross-reference Allist’s or its Affiliate’s Regulatory Filings made, and Regulatory Approvals received for Products anywhere within the Retained Territory, including any Allist Results generated in the conduct of any Global Study conducted by Allist in the Retained Territory. In furtherance of the foregoing, Allist shall (or shall cause an applicable Affiliate to) provide a signed statement to this effect, if requested by ArriVent, in accordance with 21 C.F.R. § 314.50(g)(3) or the equivalent as required in any country or region of the Licensed Territory, or otherwise provide appropriate notification of such right of ArriVent to the applicable Regulatory Agency.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

4.9           Right of Allist to Cross-Reference. ArriVent hereby grants Allist the right to cross-reference ArriVent’s or its Affiliate’s Regulatory Filings made, and Regulatory Approvals received for Products anywhere within the Licensed Territory including any ArriVent Results generated in the conduct of any Global Study conducted by ArriVent in the Licensed Territory. In furtherance of the foregoing, ArriVent shall (or shall cause an applicable Affiliate to) provide a signed statement to this effect, if requested by Allist, in accordance with 21 C.F.R. § 314.50(g)(3) or the equivalent as required in any country or region in the Retained Territory, or otherwise provide appropriate notification of such right of Allist to the applicable Regulatory Agency.

 

4.10         Safety Data. Notwithstanding the foregoing, each Party shall supply to the other all safety data and any other data or summaries thereof Controlled by such Party and necessary for such Party to comply with its obligations to the relevant Regulatory Agency in its territory, at no additional cost to the receiving Party, including in particular any data and information about adverse effects. As soon as reasonably practicable following the Effective Date, the Parties shall enter into a safety data exchange agreement defining pharmacovigilance responsibilities of the Parties including the collection, investigation, reporting and exchange of information concerning any adverse experiences or product quality related to Licensed Compounds and Products.

 

5.            COMMERCIALIZATION; MANUFACTURE AND SUPPLY

 

5.1           Responsibility for Manufacturing. Subject to the terms and conditions of this Agreement, ArriVent shall be responsible for manufacturing and supplying Licensed Products in the Licensed Territory by itself or through a Third-Party manufacturer for Commercialization of Licensed Product following receipt of Regulatory Approval on a country-by-country basis in the Licensed Territory. ArriVent shall be responsible for supplying Licensed Products for clinical trials and related programs required for Regulatory Approvals in the Licensed Territory. All such supplies shall be manufactured in accordance with current applicable laws, regulations, and good industrial practice in the relevant territory.

 

5.2           Manufacturing Technology Transfer. As soon as reasonably practicable following the Effective Date, Allist shall (a) transfer, and thereafter continue, during the Term as may be reasonably requested by ArriVent from time to time, the transfer (from Allist, its Affiliates, or its Third Party contract manufacturers) to ArriVent and its designees copies in English (in an electronic format) of all Know-How Controlled by Allist or its Affiliates (or any of its Third Party contract manufacturers, to the extent Allist has the right to do so under its agreements with such Third Party contract manufacturers, in order to enable ArriVent and its designees to manufacture the Licensed Products, including, if desired by ArriVent, to replicate the process employed by or on behalf of Allist prior to the Effective Date to manufacture the Licensed Compound and (b) to the extent that Allist does not have the right to so transfer under its agreements with such Third Party contract manufacturers, use good faith efforts to obtain such right. Such transfers shall include all process, analytical, and formulation development data, all technical memoranda, all process evolution data, and all batch records. In addition, at the reasonable request of ArriVent from time to time, Allist shall make its employees and consultants (including personnel of its Affiliates and Third-Party contract manufacturers) available to ArriVent and its designees to provide reasonable consultation and technical assistance in order to ensure an orderly transition of the manufacturing technology and operations to ArriVent and its designees and to assist ArriVent and its designees in its manufacture of Licensed Products.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

5.3           Commercial Responsibility. ArriVent, itself and/or through its Affiliates or sublicensees, will be solely responsible for performing and will use Commercially Reasonable Efforts to perform, all Commercialization activities including, but not limited to, the marketing, strategy, pricing, promotion, reimbursement, branding, distribution and sale of Products in the Licensed Territory. Without limiting the generality of the foregoing, upon Regulatory Approval of a Licensed Product in a country, ArriVent shall use Commercially Reasonable Efforts to Commercialize such Licensed Product in such country.

 

5.4            Supply Arrangement. ArriVent shall have the right to source its supply of the Product from Allist or Allist’s contract manufacturer or any Third Party in the quantities necessary to conduct any clinical trials or otherwise for Commercialization as set forth below:

 

5.4.1         Source from Third Party in the Licensed Territory. ArriVent shall have the right to source the Licensed Compounds or the Products from a Third Party in the Licensed Territory; provided, that, ArriVent shall use reasonable measures to procure that such Third Party will comply with all applicable obligations under this Agreement, including the confidentiality and restricted use, reporting, audit and inspection provisions hereunder.

 

5.4.2         Source from Allist or Allist’s existing contractor manufacturer. ArriVent shall also have the right to source Licensed Compounds or the Products from Allist or Allist’s existing contractor manufacturer subject to the negotiation and execution of a supply agreement which ArriVent and Allist and/or such Third Party contractor will negotiate in good faith promptly following the execution of the Agreement, in which case the transfer price for such Licensed Compounds or Products shall be set at (a) in case of the supply of the Licensed Compounds by Allist, [***] percent ([***]%) of Allist’s actual manufacture cost (to be further defined in a supply agreement) or (b) in case of the supply of the Licensed Compounds or Products by Allist’s contract manufacturer, the transfer price to be agreed between ArriVent and Allist’s contract manufacture, which price shall not be higher than the transfer price paid by Allist to buy the Licensed Compounds or Products from Allist’s existing contractor manufacturer, as the case may be. ArriVent shall issue Product orders [***] ([***]) days before the requested delivery date. Allist shall sell Products to ArriVent on a non-returnable basis, except for returns due to nonconforming Products.

 

5.4.3          Source from Third Party in Retained Territory. Should ArriVent choose to source Licensed Compounds or the Products from a Third Party contract manufacturer in the Retained Territory (other than Allist’s existing contract manufacturer), the procedures below shall be followed:

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

(a)            ArriVent shall have the right to negotiate the commercial terms (including price, quantity, delivery term, quality standard, etc.) with such Third Party in the Retained Territory applicable to the Products;

 

(b)            Allist shall take no responsibility for the Licensed Compound or the Products manufactured by such Third Party; and

 

(c)            ArriVent shall take all proper measures to ensure that such Third Party complies with all applicable obligations under the terms of this Agreement, including the confidentiality and restricted use, reporting, audit and inspection provisions hereunder. To the extent requested by Allist, ArriVent shall reasonably assist Allist in negotiating the terms of supply of the Licensed Compound or Products by such Third Party in the Retained Territory to Allist for use in the Retained Territory.

 

5.5            Site Visits.

 

5.5.1        ArriVent shall allow Allist’s agents reasonably acceptable to ArriVent to have timely and reasonable access to audit financial records, trial protocols, manufacturing sites, pilot scale manufacturing documents, procedures manuals, and patent documents in each case relating solely to the license to Products granted by Allist pursuant to this Agreement to verify compliance with this Agreement. Any such audit shall be conducted no more frequently than [***] per year unless reasonably required more frequently to timely address regulatory issue(s). Any such audit shall be at Allist’s sole cost and expense, and shall be subject to reasonable advance notice.

 

5.5.2         Allist agrees that, to the extent Allist supplies Licensed Compound and Products to ArriVent under Section 5.4, ArriVent and its agents shall have the right, not more than [***] per calendar year and upon reasonable prior notice to Allist, to inspect and audit the Facility and all records relating to such activities at such Facility generally to the extent related to any Product during the periods in which Products and/or Licensed Compounds are being manufactured by Allist. Following such inspection and audit, ArriVent shall discuss its observations and conclusions with Allist and, if any corrective actions are necessary for Allist to comply with the terms of this Agreement, then promptly following any such discussion, the Parties shall in good faith prepare a schedule that sets forth the required corrective actions and the required deadlines for the performance thereof.

 

5.6           Product Quality. The Parties will negotiate in good faith one or more definitive agreements with regard to quality matters relating to clinical (GCP), non-clinical (GLP) and manufacturing (GMP) matters (including with respect to the Product) (collectively, the “Quality Agreement”) within [***] ([***]) days after the Effective Date. In the event of a discrepancy between this Agreement and the Quality Agreement, the Quality Agreement shall govern with respect to quality matters and this Agreement shall govern with respect to all other matters.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

5.7           Product Recall. ArriVent shall comply with all applicable laws in developing and Commercializing the Products. If by law or voluntarily, ArriVent commences a recall of any Product, it shall notify Allist of the same and provide Allist with sufficient details.

 

6.            FINANCIALS AND REPORTS

 

6.1           Equity Interest in ArriVent. In consideration of the licenses and rights granted to ArriVent hereunder, ArriVent will issue and grant to Allist, 19,411,765 shares of common stock, $0.0001 par value per share, of the Company (the “Shares”) at a purchase price of $0.0001 per share and an aggregate purchase price of $1,941.18, pursuant to the terms of that certain Subscription Agreement, to be executed and delivered by the Parties simultaneously with this Agreement (the “Subscription Agreement”). The Shares would be subject to the same customary rights, preferences and privileges granted to the other holders of ArriVent common stock.

 

6.2           Initial Payment. In partial consideration for the license rights granted to ArriVent, hereunder, ArriVent shall make a forty-million dollars ($40,000,000) cash payment to Allist as an upfront payment on the Effective Date (“Initial Payment”). This payment shall be non-creditable and non-refundable.

 

6.3           Milestone Payments. In partial consideration for the license rights granted to ArriVent hereunder, upon achievement of each of the following events (each a “Milestone Event”) (regardless of whether the achievement is made by ArriVent or any of its sublicensees or further sublicensees), with respect to the first occurrence of such Milestone Event with a Licensed Product, ArriVent shall pay to Allist the corresponding payment (each a “Milestone Payment”) as set out in the table below.

 

Milestone Event	Milestone Payment (US$)
1. [***]	US$[***]
2. [***]	US$[***]
3. [***]	US$[***]
4. [***]	US$[***]
5. [***]	US$[***]
6. [***]	US$[***]
7. [***]	US$[***]

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Milestone Event	Milestone Payment (US$)
8. [***]	US$[***]
9. [***]	US$[***]
10. [***]	US$[***]
11. [***]	US$[***]
12. [***]	US$[***]
13. [***]	US$[***]
14. [***]	US$[***]
15. [***]	US$[***]
16. [***]	US$[***]
17. [***]	US$[***]
18. [***]	US$[***]

 

6.3.1        For clarity, each Milestone Payment is payable only once, no Milestone Payment would be payable for subsequent or repeated achievements of the corresponding Milestone Events with respect to one or more of the same or different Licensed Products, and in no event would the total amount of Milestone Payments exceed $765 million in the aggregate.

 

6.3.2         The term “First Indication” in the table above refers to the first Indication of the Licensed Product. The Parties expect that the First Indication would be [***] but acknowledge that the First Indication could be any other Indication.

 

6.3.3         The term “Second Indication” in the table above refers to second Indication of the Licensed Product. The Parties expect that the second indication would be [***] but acknowledge that the First Indication could be any other Indication. For greater clarity, the term “first indication” / “second indication” / “third indication” used in each milestone above shall not be restricted to be the same indication, and the order of “first”, “second” and “third” shall be counted on a milestone by milestone basis. Additionally, a label expansion that adds additional clinical data showing overall survival will not constitute a second or third indication.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.4           Equity Allocation in lieu of Milestone Payment. Upon the mutual agreement of the Parties, ArriVent may pay to Allist for achievement of any Milestone Events in the form of shares of common stock of ArriVent (subject to applicable laws and corporate governance of ArriVent), at a per share purchase price equal to: (i), if ArriVent is publicly listed at the time such Milestone Payment is due to be paid, the then fair market value of the common stock, which fair market value of the stock shall be calculated according to the average closing price during the last [***] days before the relevant Milestone Event is achieved and (ii) if ArriVent is not publicly listed at the time such Milestone Event is achieved, based on the value reasonably determined by its Board of Directors at the time such Milestone Payment is due to be paid.

 

6.5           Royalty Payments to Allist. In consideration for the license rights granted to ArriVent hereunder, during the royalty terms, ArriVent shall pay the following tiered royalties (“Royalties”) on incremental basis to Allist equal to a percentage (“Royalty Rate,” as set out below) of Net Sales of all Products in the Licensed Territory. All payments of Royalties shall be non-creditable and non-refundable, without any deduction.

 

Net Sales in the Licensed Territory (in millions US$)	Royalty Rate
[***]	[***]%
>[***]	[***]%
>[***]	[***]%
>[***]	[***]%
>[***]	[***]%

 

For purposes of determining the Royalty Rate, the “Net Sales in the Licensed Territory” shall be calculated throughout the Licensed Territory regardless of whether any sales are made by ArriVent’ s sublicensees (and further sublicensees, if applicable) and ArriVent’ s sales agents. For clarity, the reduction of Royalty Rate under Section 6.6 and/or the termination of the Royalty Term under Section 6.7 in any country or with respect to any Licensed Product shall not affect the calculation of Net Sales in such countries of the Licensed Territory or with respect to such Licensed Product.

 

6.6           Royalty Rate Reduction. The amount of Royalties in relation to the Net Sales in Section 6.5 in a particular country with respect to a particular Product would be:

 

6.6.1         reduced by [***] percent ([***]%) starting from the [***] day of the first full Calendar Quarter following the date on which no Valid Claim of the Allist Patent Rights covers the Product in that country of sale or a generic product of the Product enters into such country; and

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.6.2        reduced by the amount of Third-Party Payments actually paid to any Third Party Licensor according to Article 7.9 to secure licenses to Exploit the Product.

 

For clarity, if, with respect to a particular Product and in a particular country, both Articles 6.6.1 and 6.6.2 apply, the amount of royalty payable to Allist shall be calculated by having royalty amount calculated according to Article 6.5 be first deducted by the Third-Party Payments and then reduced by [***] percent ([***]%).

 

In no event shall the amount of Royalty become negative.

 

6.7           Royalty Term. The payment of Royalty set forth above shall be payable for each Licensed Product on a product-by-product and country-by-country basis from the date of First Commercial Sale of such Licensed Product in such country until the later of:

 

6.7.1         the expiration of the last Valid Claim of the Allist Patent Rights covering the composition or all approved indications of the Product in such country;

 

6.7.2         the expiration of the applicable period of regulatory-based exclusivity in such country; or

 

6.7.3          [***] ([***]) years after First Commercial Sale of such Product in such country.

 

Upon the expiration of the royalty term set out in Article 6.7 with respect to each Product in each country, ArriVent would have an irrevocable, fully-paid, royalty-free license with respect to such Product in such country with no obligation to continue paying Royalties. For clarity, the obligation to make Milestone Payments will terminate upon the expiration of the Royalty Term.

 

6.8           Payment Schedule. ArriVent shall pay Allist according to the schedules set forth in Section 6.9 through 6.11.

 

6.9           Initial Payment. Allist shall issue an invoice reflecting the Initial Payment under Article 6.2 after the Effective Date. ArriVent shall settle the Initial Payment with [***] ([***]) days of its receipt of such invoice.

 

6.10         Milestone Payments. ArriVent shall provide to Allist, within [***] ([***]) days of the achievement of any Milestone Event, a written notice stating (i) the specific Milestone which has been achieved, with sufficient details; and (ii) the date when such Milestone Event was achieved. Allist shall issue an invoice reflecting the corresponding Milestone Payment upon being notified or otherwise aware of the achievement of the Milestone Event. ArriVent shall settle the invoice with [***] ([***]) days from the date of its receipt of such invoice.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.11         Royalty Payments. During the Term of this Agreement commencing with the First Commercial Sale of each Licensed Product, ArriVent shall furnish or cause to be furnished to Allist on an annual basis, a written report or reports covering each Program Year (each such Program Year being sometimes referred to herein as a (“Reporting Period”) showing:

 

(a)            gross invoiced sales and the deductions (with a breakdown showing the types of deductions) used to calculate Net Sales of each Product sold by ArriVent, its Affiliate and its sublicensees during the Reporting Period on a country-by-country basis;

 

(b)            the Royalties, payable in Dollars, which shall have accrued hereunder in respect of such Net Sales;

 

(c)            the exchange rates used, if any, in converting into Dollars, from the currencies in which sales were made;

 

(d)            dispositions of such Product other than those sold for cash; and

 

(e)            any withholding taxes required to be paid from such Royalties.

 

ArriVent shall (and shall procure its Affiliates and sublicensees to) keep complete and accurate records of the sale of Products hereunder with respect to which a Royalty is payable according to this Agreement in accordance with Accounting Standards in the market where the Products are sold. Allist shall issue an invoice upon the receipt of ArriVent’s written report. ArriVent shall settle such invoice within [***] ([***]) days from the date of such invoice.

 

6.12         Responsibility for Payment. ArriVent shall be responsible for all payments that are due to Allist under this Agreement whether or not ArriVent has been paid by ArriVent’s sublicensees. ArriVent shall use Commercially Reasonable Efforts to ensure that its sublicensees and other partner adhere to their payments obligations so as to enable ArriVent to comply with its payment obligations hereunder

 

6.13         Mode of Payment. All payments to Allist hereunder shall be made by wire transfer of Dollars in the requisite amount to the following Allist designated account or any other account with Allist notifies ArriVent in writing:

 

BANK ACCOUNT NUMBER: [***]

 

BIC CODE: [***]

 

BANK NAME: [***]

 

BANK ADDRESS: [***]

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.14         Currency Exchange. With respect to sales of Product invoiced in a currency other than Dollars, such amounts and the amounts payable hereunder shall be expressed in their Dollar equivalent calculated using the following method. The rate of currency conversion shall be calculated using the average month end “spot rates” during the relevant Reporting Period as published by Bloomberg (or, if not available, those published by Reuters).

 

6.15         Audit. Upon the prior written request of Allist, upon not less than [***] ([***]) days’ prior written notice, but not more often than once each calendar year, at Allist’s expense, ArriVent shall (and procure its Affiliates, sublicensees, agents, or other partners to) permit an independent public accounting firm of national prominence selected by Allist and reasonably acceptable to ArriVent to have access during normal business hours to those records of ArriVent, its Affiliates and sublicensees as may be reasonably necessary for the sole purpose of verifying the accuracy of the Net Sales report and royalty calculation conducted by ArriVent pursuant to this Agreement, subject in any event to such independent public accounting firm having executed a reasonably acceptable confidentiality agreement with ArriVent. The foregoing audit right shall not apply to records beyond [***] ([***]) years from the end of the Program Year to which they pertain. The accountant shall report to Allist only whether the particular amount being audited was accurate, and if not, the amount of any discrepancy, and the accountant shall not report any other information to Allist. Allist shall treat the results of any such accountant’s review of ArriVent’s records as Confidential Information of ArriVent subject to the terms of Article 9. If such independent public accounting firm’s report shows any underpayment, ArriVent shall remit to Allist within [***] ([***]) days after ArriVent’s receipt of such report, (1) the amount of such underpayment and (ii) if such underpayment exceeds [***] percent ([***]%) of the total amount owed for a Program Year then being audited, the reasonable and necessary fees and expenses of such independent public accountant performing the audit.

 

6.16         Interest Due. In case of any delay in payment by ArriVent to Allist, interest on the overdue payment shall accrue an annual interest rate, compounded annually, at [***] percent ([***]%) above the prime rate as reported by Bloomberg (or if not available, that reported by Reuters), as determined for each month on the last business day of that month, assessed from the day payment was initially due. The foregoing interest shall be due from ArriVent subject to a special notice in this respect being sent to ArriVent.

 

6.17        Tax Withholding. Notwithstanding anything else in this Agreement, each Party shall solely bear and pay all taxes imposed on such Party’s net income or gain (in each case, however denominated) arising directly or indirectly from the activities of the Parties under this Agreement. The Parties shall use reasonable efforts to cooperate with one another and shall use reasonable efforts to avoid or reduce, to the extent permitted by applicable laws, tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by ArriVent to Allist under this Agreement. If withholding taxes are imposed on any such payment, ArriVent shall: (i) deduct or withhold such taxes from the payment made to Allist, (ii) timely pay such taxes to the proper taxing authority, and (iii) send proof of payment to Allist within [***] ([***]) days following such payment. To the extent that amounts are so withheld and paid to the proper taxing authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the persons with respect to whom such amounts were withheld. Each Party shall comply with (or provide the other Party with) any certification, identification or other reporting requirements that may be reasonably necessary in order for ArriVent to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty. Each Party shall provide the other with commercially reasonable assistance to enable the recovery, as permitted by applicable laws, of withholding taxes or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of Allist as the Party bearing the cost of such withholding Tax under this Section 6.13.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.            INTELLECTUAL PROPERTY

 

7.1           Ownership.

 

7.2           Results. All ArriVent Results generated in connection with the Exploitation of any Licensed Product conducted by or on behalf of ArriVent and/or in connection with the conduct of any Global Study conducted by or on behalf of ArriVent shall be the sole and exclusive property of ArriVent. All Allist Results generated in connection with the conduct of any Global Study conducted by or on behalf of Allist shall be the sole and exclusive property of Allist.

 

7.3           Ownership of Inventions. Inventorship of Inventions shall be determined by application of US patent laws pertaining to inventorship. Ownership of all Inventions shall be based on inventorship, as determined in accordance with the rules of inventorship under United States patent laws. Each Party shall solely own any Inventions made solely by its or its Affiliates’ employees, agents or independent contractors (“Sole Inventions”). Allist shall solely own any Inventions that are made jointly by employees, agents or independent contractors of one Party or its Affiliates together with employees, agents or independent contractors of the other Party or its Affiliates (“Joint Inventions”), including as part of the technology transfer under Section 2.3 and all Patents claiming Joint Inventions shall be referred to herein as “Joint Patents”

 

7.4           Disclosure of Improvements and Sole Inventions Claimed by Allist Patent Rights. Allist shall promptly disclose to ArriVent all Improvements (along with Patents claiming such Improvements) and shall promptly respond to reasonable requests from ArriVent for additional information relating to such Improvements. Allist shall also promptly disclose to ArriVent all Sole and Joint Inventions that are claimed by the Allist Patent Rights, including any invention disclosures or other similar documents submitted to Allist by its employees, agents or independent contractors describing such Sole Invention (along with Patents claiming such Sole Invention), and permit ArriVent right to Exploit such disclosure, and shall promptly respond to reasonable requests from ArriVent for additional information relating to such Sole Inventions.

 

7.5           Disclosure of ArriVent Results. ArriVent shall promptly disclose to Allist all ArriVent Improvements and all ArriVent Results, including any ArriVent Results generated by its employees, agents or independent contractors and shall promptly respond to reasonable requests from Allist for additional information relating to such ArriVent Results.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.6           Background IP. Any and all Know-How and Patent Rights which are developed or acquired before or independent from the performance of this Agreement shall remain with the Party which develops or acquires such Know-How and Patent Rights. Without prejudice to the generality of the foregoing, all right, title and interest in all Allist IP shall be retained by Allist throughout this Agreement and afterwards, subject to the license grant in Section 2.1.

 

7.7           Cooperation in Patent Prosecution. Each Party shall provide the other Party with all reasonable assistance and cooperation in the prosecution of patent rights covering Inventions in the name of such Party, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.

 

7.8           Allist Patent Rights; Joint Patents. Except as otherwise provided in this Section 7.8, [***] shall have the first right to direct the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the [***] Patent Rights and Joint Patents worldwide at its sole cost and expense. [***] shall reasonably consult with [***] and keep [***] reasonably informed of the status of such [***] Patent Rights and Joint Patents, and shall provide [***], at [***] reasonable request, with (A) all material correspondence received from any patent authority in connection therewith and (B) copies of all files (including without limitation the complete texts of all patents and patent applications and copies of all office actions, office action responses and other official communications received from, or filed with, all relevant patent offices) that relate to the [***] Patent Rights or Joint Patents. [***] shall confer with [***] and consider in good faith [***] comments prior to submitting such filings and correspondence, provided that [***] provides such comments within [***] ([***]) days (or a shorter period reasonably designated by [***] if [***] ([***]) days is not practicable given the filing deadline) of receiving the draft filings and correspondence from [***]. To aid [***] in prosecution of such [***] Patent Rights and Joint Patents, [***] will provide information, execute and deliver documents, and cooperate with [***] and do other acts as [***] may reasonably request. If [***] determines in its sole discretion to abandon or not maintain any [***] Patent Rights or Joint Patents anywhere in the Licensed Territory, then [***] shall provide reasonable prior written notice to [***] of such intention (which notice shall, to the extent possible, be given no later than [***] ([***]) days prior to the last deadline for any action that must be taken with respect to any such Patent in the relevant patent office). In such case, upon [***] written election provided no later than [***] ([***]) days after such notice from [***], [***] may prosecute and maintain such [***] Patent Rights or Joint Patents, by counsel selected by [***] reasonably acceptable to [***] and shall bear the costs of such prosecution and maintenance. If [***] does not provide such election within [***] ([***]) days after such notice from [***], [***] may, in its sole discretion discontinue to prosecute and maintain such [***] Patent Rights or Joint Patents without further obligation to [***].

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.9           Third-Party Payments. The Parties acknowledge that Allist has not performed or is not able to perform any assessment as to whether any patent or other intellectual property rights belonging to a Third Party (“Third Party IP”) in any jurisdiction in the Licensed Territory may be infringed by the Exploitation of the Allist IP or Commercialization of the Licensed Products. ArriVent may perform a freedom-to-operate analysis at its own cost. Should ArriVent become aware of any of such Third-Party IP, after consulting with Allist in good faith, it may seek a license from the Third Party to enable it to Exploit Allist IP and to Commercialize the Licensed Products. Any Third-Party Payment actually paid to a Third Party shall be deducted from royalties payable to Allist under Article 6.6.

 

7.10         Patent Term Extensions. ArriVent will be solely responsible for making all decisions regarding patent term extensions in the Licensed Territory that are applicable to Allist Patent Rights or Joint Patent Rights licensed hereunder; provided, that, ArriVent will reasonably consult with Allist with respect to such decisions and implement the reasonable comments and concerns of Allist and Allist shall reasonably cooperate with ArriVent in connection with any ArriVent seeking any such patent terms extensions.

 

7.11         Patent Linkage. ArriVent will be solely responsible for making all decisions required or allowed in the United States, in the FDA’s Orange Book, the FDA’s Purple Book, in the European Union, under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 and in any other country in the Licensed Territory under the equivalent Regulatory Agencies in such country that are applicable to Allist Patent Rights or Joint Patent Rights licensed hereunder; provided, that, ArriVent will reasonably consult with Allist with respect to such decisions and implement the reasonable comments and concerns of Allist and Allist shall reasonably cooperate with ArriVent in connection with such actions.

 

8.            INFRINGEMENT AND ENFORCEMENT Third Party Infringement Actions.

 

8.1.1        If either the manufacture, sale or use of a Product pursuant to this Agreement results in, or may result in, any claim, suit or proceeding by a Third Party alleging patent infringement by Allist or ArriVent (or its sublicensees), or by an Affiliate of Allist or ArriVent (“Infringement”), such Party shall promptly notify the other Party hereto via Notice.

 

8.1.2         ArriVent shall have the first right, but not the obligation, to defend, and take other actions (including to settle) with respect to, any such claim of Infringement in the Licensed Territory (without prejudice to ArriVent’s obligations under Section 2.3), at ArriVent’s sole discretion, cost, and expense; provided, that, (a) ArriVent will discuss in good faith and coordinate with Allist in connection therewith and ArriVent will consider in good faith and reasonably address Allist’s input and comments with respect thereto and (b) ArriVent will not, without the consent of Allist, enter into any such settlement, consent judgment or other disposition of any action or proceeding that would (i) impose any liability or obligation on Allist, (ii) include the grant of any license, covenant or other rights to any Third Party that would conflict with or reduce the scope of the subject matter included under the rights and licenses granted to Allist under this Agreement, or (iii) otherwise adversely affect the licenses or other rights granted to Allist hereunder in any respect. Allist shall have the right to be represented in any such action by counsel of its own choice at Allist’s sole cost and expense.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

8.1.3         If ArriVent determines not to institute an action or proceeding with respect to a given Infringement or if ArriVent or its designee fails to defend such Infringement in the Licensed Territory or to file an action to defend such Infringement in the Licensed Territory within [***] ([***]) days after a written request from Allist to do so, or if ArriVent discontinues the defense of any such action after filing without abating such Infringement, then Allist shall have the right to right, but not the obligation, to defend, and take other actions (including to settle) with respect to, any such claim of Infringement, at Allist’s sole discretion, cost, and expense and shall keep ArriVent reasonably informed with respect to any such enforcement action; provided, that, Allist shall not enter into any settlement admitting the invalidity of, or otherwise impairing, any Allist Patent Rights without the prior written consent of ArriVent, which consent shall not be unreasonably withheld, delayed or conditioned

 

8.1.4        The Party defending the Third-Party claim will keep the other Party hereto reasonably informed of all material developments in connection with any such claim, suit or proceeding.

 

8.2           Enforcement Actions.

 

8.2.1         If either Allist or ArriVent becomes aware of any infringement or threatened infringement by a Third Party of any Allist Patent or Joint Patent, it will notify the other Party in writing to that effect. Any such notice shall include evidence to support an allegation of infringement or threatened infringement, or declaratory judgment or equivalent action, by such Third Party

 

8.2.2         ArriVent shall have the first right, as between Allist and ArriVent, but not the obligation, to bring an appropriate suit or take other action against any person or entity engaged in, or to defend against, an infringement of any Allist Patent or Joint Patent in the Licensed Territory (each, an “Infringement Response”), at its sole cost and expense and entirely under its own direction and control, including the right to select counsel of its own choice and the right to settle such action; provided, that: (A) ArriVent (shall keep Allist reasonably informed about such Infringement Response, and Allist shall reasonably cooperate with ArriVent in connection with such Infringement Response; and (B) ArriVent shall not take any position with respect to, or compromise or settle, any such infringement in any way that would be reasonably likely to adversely affect the scope, validity or enforceability of any Allist Patent Rights or Joint Patents in the Licensed Territory without the prior consent of Allist, which consent shall not be unreasonably withheld, delayed or conditioned. Allist may, at its own expense, be represented in any such action, and ArriVent and its counsel will reasonably cooperate with Allist and its counsel in strategizing, preparing, and prosecuting any such action or proceeding. If ArriVent fails to bring an Infringement Response respect to such ArriVent Patent within: (X) [***] ([***]) days following the notice of alleged infringement or declaratory judgment or (Y) [***] ([***]) days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such actions, whichever comes first, Allist all have the right, but not the obligation, to bring and control any such action at its own expense and by counsel of its own choice, and ArriVent may, at its own expense, be represented in any such action by counsel of its own choice.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

8.2.3         In any action undertaken by Allist or ArriVent under Section 8.2.2 any damages or other recovery, including compensatory and other non-compensatory damages or recovery actually received from a Third Party, shall first be used to reimburse the Parties for their respective costs and expenses incurred in connection with such action. To the extent that such damages relate to loss suffered by ArriVent or Allist as a result of such Third-Party infringement, said remaining damages or other recovery shall be treated as Net Sales and ArriVent shall pay Allist the applicable royalty on such Net Sales and retain the balance.

 

9.            CONFIDENTIALITY

 

9.1           Non-disclosure and Exceptions. Each Receiving Party which receives the Confidential Information of the Disclosing Party pursuant to this Agreement shall: (a) maintain in confidence such Confidential Information using not less than the efforts that such Receiving Party uses to maintain in confidence its own proprietary information of similar kind and value, but in no event less than a reasonable degree of efforts; (b) not disclose such Confidential Information to any Third Party without first obtaining the prior written consent of the Disclosing Party, except for disclosures expressly permitted pursuant to this Article 9; and (c) not use such Confidential Information for any purpose except those permitted under this Agreement, including, in the case of each Party, the exercise of the rights and licenses granted to such Party hereunder. Neither Receiving Party shall publish or disclose to any Third Party, including its independent contractors, any Confidential Information of the Disclosing Party without the advance execution of a binding confidentiality agreement between the Third Party and the disclosing Party. Neither Receiving Party shall disclose to any Third Party or use for any purpose other than pursuant to this Agreement any Confidential Information of the Disclosing Party, unless such Party can demonstrate that such information:

 

9.1.1         was known to the Receiving Party or to the public prior to disclosure by the disclosing Party under this Agreement, as shown by written records;

 

9.1.2         becomes known to the public from a source other than the Receiving Party, without any breach by the Receiving Party of its obligations hereunder;

 

9.1.3         is disclosed to the Receiving Party on a non-confidential basis by a Third Party having a legal right to make such disclosure;

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

9.1.4         is independently developed by the receiving Party not having access to the disclosing Party’s information as evidenced by written records, without reference to or reliance upon the Disclosing Party’s Confidential Information.

 

9.2           Survival. Such obligations of confidentiality and non-use shall survive expiration or termination of this Agreement for a period of [***] ([***]) years from the Effective Date of such termination or expiration.

 

9.3           Authorized Disclosure. Each Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the following instances:

 

9.3.1         filings submitted to a Regulatory Agency to the extent necessary for obtaining marketing approvals in the Field;

 

9.3.2         prosecuting or defending litigation;

 

9.3.3         complying with applicable governmental regulations;

 

9.3.4         as necessary in order for each Party to exercise its rights (including subcontracting) under this Agreement;

 

9.3.5         conducting pre-clinical or clinical trials of the Products;

 

9.3.6         disclosure on a “need to know” basis to Affiliates, sublicensees, employees, consultants or agents who agree to be bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Article 9;

 

9.3.7         to actual or potential investors, investment bankers, lenders, other financing sources or acquirors (and attorneys and independent accountants thereof) in connection with potential investment, acquisition, collaboration, merger, public offering, due diligence or similar investigations by such Third Parties or in confidential financing documents, except that, in each case, that any such Third Party agrees to be bound by terms of confidentiality and non-use (or, in the case of the Receiving Party’s attorneys and independent accountants, such Third Party is obligated by applicable professional or ethical obligations) that are no less stringent than those contained in this Agreement (except to the extent that a shorter confidentiality period is customary in the industry); and

 

9.3.8         such disclosure is required by court order, judicial or administrative process, applicable law, or an order from the exchange where the Party is listed, except that, in such event, the Receiving Party shall promptly inform the Disclosing Party of such required disclosure and provide the Disclosing Party an opportunity to challenge or limit the disclosure obligations. Confidential Information that is disclosed as required by court order, judicial or administrative process or applicable law shall remain otherwise subject to the confidentiality and non-use provisions of this Article 9 and the Receiving Party shall take all steps reasonably necessary, including seeking of confidential treatment or a protective order, to ensure the continued confidential treatment of such Confidential Information.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

 

 

9.3.9 A Party may disclose this Agreement and its terms, and material developments or material information generated under this Agreement, in securities filings with the US Securities and Exchange Commission (“SEC”) (or equivalent foreign agency) to the extent required by applicable law after complying with the procedure set forth in this Section 9.3.9. To the extent applicable, the Party seeking to make such disclosure will (i) prepare a draft confidential treatment request and a redacted version of this Agreement to request confidential treatment for this Agreement, which redacted version will be provided to the other Party reasonably in advance of such filing or other disclosure; (ii) give the other Party a reasonable time under the circumstances to comment upon such disclosure; and (iii) in good faith consider incorporating any such comments of the other Party. The Party seeking such disclosure shall exercise commercially reasonable efforts to obtain confidential treatment of this Agreement from the SEC as represented by such redacted version provided to the other Party. Further, each Party acknowledges that the other Party may be legally required, or may be required by the listing rules of any exchange on which the other Party’s or its Affiliate’s securities are traded, to make public disclosures (including in filings with the SEC or other agency) of certain material developments or material information generated under this Agreement and agrees that each Party may make such disclosures as required by law or such listing rules, except that the Party seeking such disclosure shall provide the other Party with a copy of the proposed text of such disclosure sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment thereon.

 

10.            INDEMNIFICATION, REPRESENTATIONS AND WARRANTIES

 

10.1            Liabilities; Indemnification by ArriVent. Except to the extent such liability is caused by the negligence or willful misconduct of Allist, ArriVent will defend, indemnify and hold Allist and its directors, officers, employees and contractors harmless from and against any and all losses, claims, suits, proceedings, expenses, recoveries and damages, including reasonable legal expenses and costs including attorneys’ fees, arising out of any claim by any Third Party, including Regulatory Agencies, relating to the Product(s) in the Field in the Licensed Territory or any aspect of ArriVent’s performance in connection with this Agreement, to the extent such liability results or arises from:

 

10.1.1            ArriVent’s breach of its obligations under this Agreement;

 

10.1.2            the gross negligence or willful misconduct of ArriVent or its Affiliates, sublicensees, directors, officers, employees or contractors in their performance hereunder;

 

10.1.3            any material breach by ArriVent of any of its covenants, representations or warranties set forth in this Agreement;

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

10.1.4            the conduct by or on behalf of ArriVent of any Global Studies in the Licensed Territory;

 

10.1.5            any use of Allist IP outside the scope of License Grant; or

 

10.1.6            the supply of Licensed Compound or the Products by such Third Party to ArriVent, its Affiliate, or licensees.

 

10.2            Indemnification by Allist. Except to the extent such liability is caused by the negligence or willful misconduct of ArriVent, Allist shall at all times during the Term a indemnify, defend and hold ArriVent and its directors, officers, employees and contractors harmless from and against any and all losses, claims, suits, proceedings, expenses, recoveries and damages, including attorneys’ fees, arising out of any claim by any Third Party, including Regulatory Agencies, in connection with this Agreement to the extent such liability results or arises from:

 

10.2.1            Allist’s breach of its obligations under this Agreement;

 

10.2.2            the gross negligence or willful misconduct of Allist or its Affiliates, directors, officers, employees or contractors in their performance hereunder;

 

10.2.3            any material breach by Allist of any of its covenants, representations or warranties set forth in this Agreement; or

 

10.2.4            the conduct by or on behalf of Allist of any Global Studies in the Retained Territory.

 

10.3            If either Party is seeking to enforce its rights under Sections 10.1 or 10.2 (“Indemnified Party”), such Indemnified Party shall inform the other Party (“Indemnifying Party”) of the claim giving rise to the obligation to indemnify pursuant to such Section as soon as reasonably practicable after receiving notice of the claim, but not later than [***] ([***]) days after receiving notice of the claim. The Indemnifying Party may assume the defense of any such claim for which it is obligated to indemnify the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party and the Indemnifying Party’s insurer as the Indemnifying Party may reasonably request, and at the Indemnifying Party’s cost and expense. The Indemnified Party may participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the Indemnifying Party. Neither Party shall have the obligation to indemnify the other Party in connection with any settlement made without such Party’s written consent, which consent shall not be unreasonably conditioned, withheld, or delayed; provided, however, that the Indemnifying Party shall not be required to obtain such consent if the settlement: (a) involves only the payment of money and shall not result in the Indemnified Party becoming subject to injunctive or other similar type of relief; (b) does not require an admission by the Indemnified Party; and (c) does not adversely affect the rights or licenses granted to the Indemnified Party under this Agreement. If the Parties do not agree as to the application of Section 10.1 or Section 10.2 as to any claim, the Parties may conduct separate defenses of such claim, with each Party retaining the right to Claim indemnification from the other Party in accordance with Section 10.1 or Section 10.2 upon resolution of the underlying claim.

 

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

10.4            Allist Representations and Warranties to ArriVent. Allist represents, warrants and covenants, as applicable, to ArriVent that, as of the Effective Date:

 

(a)            Allist is the sole and exclusive owner or licensee of the Allist Patent Rights and Allist Know How, and Allist has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in such Allist Patent Rights or Allist Know How in a manner that would prevent Allist from granting ArriVent an exclusive license under such Allist Patent Rights and Allist Know How to Exploit Licensed Products in the Licensed Territory;

 

(b)            Allist does not own (either solely or jointly) or Control any Patents that contain any claims that cover Licensed Products and that are not included as part of the Allist Patent Rights;

 

(c)            to Allist’s knowledge, Allist does not own (either solely or jointly) or Control any Know-How that is necessary or reasonably useful to Exploit Licensed Products in the Licensed Territory other than the Allist Know-How;

 

(d)            to Allist’s knowledge, there are no Third Parties that are practicing any Patents in the Licensed Territory that contain any claims that cover or claim Licensed Products; provided, that, both Parties acknowledge that the representations made above are based on Allist’s actual knowledge without performing any freedom-to-operate analysis;

 

(e)            to Allist’s knowledge, all Patents listed on Exhibit A (i) are: (A) subsisting and are not invalid or unenforceable, in whole or in part; and (B) free of any encumbrance, lien or claim of ownership by any Third Party; and (ii) have been prosecuted, filed and maintained in accordance with applicable law and all applicable fees have been paid on or before the due date for payment;

 

(f)            to Allist’s knowledge, each person who has or has had any rights in or to any Patents listed on Exhibit A has assigned and has executed an agreement assigning its entire right, title, and interest in and to such Patents listed on Exhibit A and Licensed Technology to Allist;

 

(g)            Allist has not received any written notice from a Third Party that any product: (i) that is claimed by the Allist Patent Rights has infringed any Patents of any Third Party; or (ii) was derived from any Allist IP that was misappropriated from any Third Party, and Allist has no knowledge of any imminent threat from a Third Party of such infringement or misappropriation;

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

(h)            Allist has not received any written notice from a Third Party challenging the inventorship or ownership of any Allist IP; no claim or action has been brought or, to Allist’s Knowledge, threatened in writing by any Third Party alleging that the Allist Patent Rights are invalid or unenforceable, and no Allist Patent is, as of the Effective Date, the subject of any interference, derivation, opposition, cancellation or other protest proceeding;

 

(i)            to Allist’s actual knowledge, no Third Party is infringing or misappropriating any of the Allist IP; and

 

(j)            to Allist’s knowledge, it has provided ArriVent with or made available to ArriVent true, accurate and complete information, reports and data Controlled by Allist concerning all scientific studies and human clinical trials relating to any compound covered by the Allist Patent Rights.

 

10.5            Representations and Warranties of the Parties to Each Other. Each Party represents and warrants to the other that, as of the Effective Date: (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 the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or other action; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, or similar laws affecting the rights of creditors generally and equitable principles, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

 

10.6            Warranty and Disclaimer Concerning Intellectual Property.

 

(a)            As of the Effective Date of this Agreement, neither Party has received any written notice from any Third Party prior to the Effective Date asserting or alleging that any manufacture, research, or development by the relevant Party of any Product or use of Allist IP licensed to ArriVent by Allist as of the Effective Date infringed or misappropriated the intellectual property rights of such Third Party.

 

(b)            As of the Effective Date of the Agreement, Allist has not received any written notice from any Third Party prior to the Effective Date asserting or alleging that the manufacturing, research or development of any Product licensed to ArriVent by Allist as of the Effective Date infringed, is subject to a royalty or payment, or misappropriated the intellectual property rights of such Third Party.

 

(c)            As of the Effective Date of the Agreement, Allist does not pay royalties or other payments for access to Third Party intellectual property rights for the research, development, manufacture, importation or exportation of any Product by Allist.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

(d)            As of the Effective Date of the Agreement, to Allist’s knowledge, there is no pending or threatened actions, suits or proceedings against Allist involving the Allist IP.

 

(e)            Without limiting the generality of the foregoing, each Party expressly does not warrant (i) the success of any research or development activities commenced under the Product Development Plan or (ii) the safety or usefulness for any purpose of the technology it provides hereunder.

 

(f)            Each Party hereby disclaim any implied or express warranties except as expressly stated herein.

 

10.7            Limitations on Liabilities. Notwithstanding anything to the contrary in this Agreement, except for the breach of Articles 2.1, 2.2, 2.3(a), 2.3(b), 2.3(c) and 9, in no event shall one Party be liable to the other Party for any incidental, indirect, exemplary, special or consequential damages whatsoever (including, but not limited to, lost profits, loss of goodwill, or interruption of business) that may be suffered or incurred by such other Party. For the sake of clarity, lost profits do not encompass payments accrued or payable by one Party to the other.

 

10.8            Insurance. Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self-insure) in an amount consistent with sound business practice in the Licensed Territory and Retained Territory respectively, and reasonable in light of its obligations under this Agreement during the Term. Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request.

 

11.            TERM AND TERMINATION

 

11.1            Term. This Agreement shall commence on the Effective Date and, unless otherwise earlier terminated according to Articles 11.1, and 11.4, shall remain in effect until the expiration of ArriVent’s obligation to pay royalties according to Article 6.7 for all Licensed Products, subject to the surviving provisions as set forth herein. Upon the expiration (but not early termination) of the Term for such Licensed Product, the licenses granted to ArriVent shall continue in effect, as non-exclusive, fully paid-up, royalty-free, transferable, perpetual and irrevocable, with the right to grant Sublicenses through multiple tiers, with respect to such Licensed Product in the Licensed Territory.

 

11.2            Termination by ArriVent for Convenience. At any time, ArriVent may terminate this Agreement, at its sole discretion and at-will, in its entirety or on a Licensed Product-by-Licensed Product and country by country basis, by providing written notice of termination to Allist, which notice includes an effective date of termination at least sixty (60) days after the date of the notice.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

11.3            Termination for Cause. If either Party believes that the other is in material breach of its obligations hereunder, then the non-breaching Party may deliver notice of such breach to the other Party. The allegedly breaching Party shall have [***] ([***]) days to cure such breach from the receipt of the notice, except that, if such breach is capable of being cured but is not cured within such [***]-day period, the breaching Party may cure such breach during an additional period as is reasonable in the circumstances not to exceed [***] ([***]) days by initiating actions to cure such breach during such initial [***]-day period and using Commercially Reasonable Efforts to pursue such actions. If the allegedly breaching Party fails to cure that breach within the applicable period set forth above, then the Party originally delivering the notice of breach may terminate this Agreement on written notice of termination. Any right to terminate this Agreement under this Section 11.3 shall be stayed and the applicable cure period tolled if, during such cure period, the Party alleged to have been in material breach shall have initiated dispute resolution in accordance with Article 12 with respect to the alleged breach, which stay and tolling shall continue until such dispute has been resolved in accordance with Article 12. If a Party is determined to be in material breach of this Agreement, the other Party may terminate this Agreement if the breaching Party fails to cure the breach within the balance of the [***] ([***]) day cure period after the conclusion of the dispute resolution procedure.

 

11.4            Termination for Bankruptcy.

 

(a)            Either Party hereto shall have the right to terminate this Agreement forthwith by written notice to the other Party (i) if the other Party is declared insolvent or bankrupt by a court of competent jurisdiction, (ii) if a voluntary or involuntary petition in bankruptcy is filed in any court of competent jurisdiction against the other Party and such petition is not dismissed within [***] ([***]) days after filing, or (iii) if the other Party shall make or execute an assignment of substantially all of its assets for the benefit of creditors (each, an “Insolvency Event”).

 

(b)            Section 365(n) of the Bankruptcy Code. The licenses granted pursuant to Sections 2.1 are, for all purposes of Section 365(n) of Title 11 of the United States Code, as amended (“Bankruptcy Code”), licenses of rights to “intellectual property” as defined in the Bankruptcy Code. Upon the occurrence of any Insolvency Event with respect to Allist, the Parties agree that ArriVent, as licensee of such licenses under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code with respect to such licenses. Without limiting the generality of the foregoing, Allist and ArriVent intend and agree that any sale of Allist’s assets under Section 363 of the Bankruptcy Code shall be subject to ArriVent’s rights under Section 365(n) of the Bankruptcy Code, that ArriVent cannot be compelled to accept a money satisfaction of its interests in the intellectual property licensed pursuant to this Agreement, and that any such sale therefore may not be made to a purchaser “free and clear” of ArriVent’s rights under this Agreement and Section 365(n) of the Bankruptcy Code without the express, contemporaneous consent of ArriVent. Allist and ArriVent acknowledge and agree that “embodiments” of intellectual property within the meaning of Section 365(n) include laboratory notebooks, cell lines, vectors, reagents, assays, product samples and inventory, research studies and data, Regulatory Filings and Regulatory Approvals. If a case under the Bankruptcy Code is commenced by or against Allist, this Agreement is rejected as provided in the Bankruptcy Code, and ArriVent elects to retain its rights hereunder as provided in Section 365(n) of the Bankruptcy Code, Allist (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall: provide to the ArriVent all such intellectual property (including all embodiments thereof) held by Allist and such successors and assigns, or otherwise available to them, upon the ArriVent’s written request.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

11.5            Effect of Termination by Allist. Subject always to the provisions of Article 11.10, in the event of termination this Agreement by Allist under Section 11.3 or 11.4 or by ArriVent under Section 11.4, (i) ArriVent may, at its discretion, continue to distribute and sell Licensed Products in the Licensed Territory, in accordance with the terms and conditions of this Agreement, for a period reasonably sufficient for it to sell off all amounts of Licensed Product in its inventory not to exceed [***] ([***]) months from the effective date of such termination (the “Wind-Down Period”); provided, that, during the Wind-Down Period, ArriVent shall continue to make any and all applicable payments to Allist for the Licensed Product sold or disposed by ArriVent; (ii) all rights to Allist IP licensed herein shall revert to Allist, and all licenses granted herein by Allist to ArriVent shall terminate; and (iii) ArriVent shall, at its own expense, promptly provide Allist with all ArriVent Results, including data and results that are reasonably necessary for the development, manufacture and Commercialization of Licensed Products or Licensed Compounds; (iii) ArriVent will, at its own expense, promptly assign or transfer to Allist or its designee, at Allist’s request, all Regulatory Filings with Regulatory Agencies concerning Licensed Products, including, without limitation, Regulatory Approvals and applications therefor; (iv) at no expense to Allist or any of its Affiliates, ArriVent shall assign and promptly transfer to Allist or its Affiliates, as requested by Allist, any trademarks and product domain names associated with any Product.

 

11.6            Effect of Termination by ArriVent. Subject always to the provisions of Article 11.10, in the event of termination by ArriVent under Section 11.3, ArriVent may, at its discretion, select either (a) terminate this Agreement and to discontinue using the Licensed Products and Licensed Compounds; or (b) have this Agreement continue in full force and effect, subject to ArriVent’s continued compliance with all of the terms and conditions of this Agreement, including, for clarity, the payment of all consideration (including all milestone payments and royalties) due and payable to Allist under and in accordance with Article 6; provided, that, all such consideration shall be reduced by [***] percent ([***]%).

 

11.7            Prior Payment. The expiration or earlier termination of this Agreement does not affect any payment which ArriVent has already made under this Agreement.

 

11.8            No Waiver. The right of a Party to terminate this Agreement, as provided in this Article 11, shall not be affected in any way by its waiver or failure to take action with respect to any prior default.

 

11.9            Return of Confidential Information. Except as otherwise provided herein, upon termination of this Agreement, all remaining records and materials in its possession or control containing the other Party’s Confidential Information and to which the former Party does not retain rights hereunder, shall promptly be returned or destroyed, at the election of the Party owning the Confidential Information. Notwithstanding the foregoing, one copy of such records may be retained by legal counsel for the former Party.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

11.10            Survival of Obligations. The termination or expiration of this Agreement shall not relieve the Parties of any obligations accruing prior to such termination, and any such termination shall be without prejudice to the rights of either Party against the other Party. Articles 7.1, 7.2, 7.5, 7.7, 9, 10.1, 10.2, 10.3, 10.4, 10.7, 11.5, 11.6, 11.7, 11.8, 11.9, 11.10, 11.11, 12.1, 12.2 and 13.6 shall survive any termination of this Agreement.

 

11.11            Termination Not Sole Remedy. Termination is not the sole remedy under this Agreement and, whether or not termination is effected all other remedies will remain available except as agreed to otherwise herein.

 

12.            DISPUTE RESOLUTION

 

12.1            Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, USA without referring to the rules of conflict in laws.

 

12.2            Amicable Negotiations and Arbitrations. The Parties agree that the procedures set forth in this Section 12.2 shall be the exclusive mechanism for resolving any dispute (whether in contract, tort or otherwise), controversy, or claim between the Parties arising out of or in connection with this Agreement, any Party’s rights or obligations under this Agreement, breach of this Agreement, or the transactions contemplated by this Agreement (each, a “Dispute”). Any Dispute shall be resolved by final and binding arbitration before a panel of three (3) arbitrators in accordance with the rules of rules of Conciliation and Arbitration of the International Chamber of Commerce (the “ICC”). Such arbitration shall be held in the English language in London, England. In any such arbitration, (a) the panel will be comprised of one arbitrator chosen by ArriVent, one by Allist and the third, who shall act as the chairman of the panel, by the two co-arbitrators; and (b) if either Party fails or both Parties fail to choose an arbitrator or arbitrators within [***] ([***]) days after receiving notice of commencement of arbitration or if the two arbitrators fail to choose a third arbitrator within [***] ([***]) days after their appointment, then either or both Parties shall immediately request that the ICC select the remaining number of arbitrators to be selected, which arbitrator(s) shall have the requisite scientific background, experience and expertise. The language of the arbitration shall be English. Either Party may apply to the arbitrators for interim injunctive relief until the arbitration decision is rendered or the Dispute is otherwise resolved. Either Party also may, without waiving any right or remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending resolution of the Dispute pursuant to this Section 12.2. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. The award of the arbitrators shall be final and binding on the Parties (except for those remedies expressly set forth in this Agreement). The award rendered by the arbitrators may be entered and enforced in any court having jurisdiction thereof. Notwithstanding anything in this Section 12.2 to the contrary, each Party shall have the right to institute judicial proceedings against the other Party or anyone acting by, through or under such other Party, in order to enforce the instituting Party’s rights hereunder through specific performance, injunction or similar equitable relief. Each Party shall bear its own costs and expenses and attorneys’ fees in connection with any such arbitration; provided, that, the arbitrators shall be authorized to determine whether a Party is the prevailing Party, and if so, to award to the prevailing Party reimbursement for its reasonable attorneys’ fees, costs and expenses (including, for example, expert witness fees and expenses, photocopy charges and travel expenses). Unless otherwise agreed by the Parties, Disputes relating to Patents and non-disclosure, non-use and maintenance of Confidential Information shall not be subject to arbitration and shall be submitted to a court of competent jurisdiction. The arbitration shall be confidential. Except as may be required by applicable law or as necessary to pursue a legal right, neither Party nor any arbitrator may disclose the existence, content or results of any arbitration without the prior written consent of both Parties. Notwithstanding the provisions of this Section 12.2, either Party may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any equitable relief, including any injunctive or provisional relief and specific performance to protect the rights or property of that Party. Such remedies shall not be deemed to be the exclusive remedies for a breach of this Agreement but shall be in addition to all other remedies available at law or in equity. In addition, notwithstanding the provisions of this Section `12.2, either Party may bring an action in any court having jurisdiction to enforce an award rendered pursuant to this Section 12.2. Until final resolution of the dispute through judicial determination: (i) this Agreement shall remain in full force and effect; and (ii) the time periods for cure as to any termination shall be tolled. The Parties further agree that any payments made pursuant to this Agreement pending resolution of the Dispute shall be refunded if a court determines that such payments are not due.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

13.            MISCELLANEOUS

 

13.1            Separate Entities / Disclaimer of Agency. Allist and ArriVent are and will remain separate independent entities. This Agreement will not constitute, create or otherwise imply a joint venture, partnership or formal business organization of any kind. Each Party to this Agreement will act as an independent contractor and not as an agent or legal representative of the other. Neither Party will have the right or authority to assume, create or incur any Third-Party liability or obligation of any kind, express or implied, against or in the name of or on behalf of the other Party except as expressly set forth in this Agreement.

 

13.2            Press Releases and Disclosures. Neither Party will submit for written or oral publication any document, data, or other information generated and provided by the other Party during the Term without first obtaining the prior written consent of the other Party, which consent will not be unreasonably withheld or delayed, especially as it relates to releases required for local fiscal reporting laws, filing regulations or stock rules relating to the Party or any Affiliate of the Party. The contributions of each Party will be noted in all publications, presentations, and press releases.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

13.3            Publicity. Until the later of First Commercial Sale by ArriVent of the first Product, or public announcement by a Regulatory Agency of its approval of such Product for commercial sale, neither Party will disclose to the public, any information about this Agreement, including its existence, without the prior written consent of the other Party, which decision regarding consent will be communicated no later than [***] ([***]) Business Days from the date of receipt of the request, except where required for local fiscal reporting laws, filing regulations or stock exchange rules relating to the Party or any Affiliate of the Party. Furthermore, neither Party shall use in advertising, publicity nor otherwise the name or any trademark of the other Party without prior written consent.

  

13.4            Force Majeure. If either Party is affected by any extraordinary, unexpected and unavoidable event, including, without limitation, acts of God, floods, fires, riots, terrorism, war, accidents, labor disturbances, breakdown of plant or equipment, lack or failure of transportation facilities, unavailability of equipment, sources of supply or labor, raw materials, power or supplies, infectious diseases of animals, or by the reason of any law, order, proclamation, regulation, ordinance, demand or requirement of the relevant government or any sub-division, authority or representative thereof (provided that in all such cases the Party claiming relief on account of such event can demonstrate that such event was extraordinary, unexpected and unavoidable by the exercise of reasonable care) (“Force Majeure”), it will as soon as reasonably practicable serve notice on the other Party of the nature and extent thereof and take all reasonable steps to overcome the Force Majeure and to minimize the loss occasioned to that other Party. Neither Party will be deemed to be in breach of this Agreement or otherwise be liable to the other Party by reason of any delay in performance or nonperformance of any of its obligations hereunder to the extent that such delay and nonperformance is due to any Force Majeure of which it has notified the other Party and the time for performance of that obligation will be extended accordingly. Notwithstanding the foregoing sentence, should the Force Majeure continue for more than [***] ([***]) months, then the other Party shall have the right to terminate this Agreement immediately upon notice of termination delivered to the affected Party.

 

13.5            Assignment. This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided, however, that each of the Parties may, without such consent, assign its rights and obligations hereunder to any of its Affiliates or in connection with the transfer or sale of all or substantially all of the portion of its business to which this Agreement relates, or in the event of its merger or consolidation or change in control or similar transaction. Any permitted assignee will assume all obligations of its assignor under this Agreement in writing prior to the assignment. Any purported assignment in violation of the preceding sentences will be void.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

13.6            Notices. Any consent, notice or report required or permitted to be given or made under this Agreement by one of the Parties hereto to the other Party (a “Notice”) will be delivered in writing by one of the following means: delivered personally; sent via e-mail with express confirmation from the addressee of its receipt; by facsimile (and promptly confirmed by personal delivery or courier); by a reputable, commercial courier; and addressed to such other Party at its address indicated below, or to such other address as the addressee will have last furnished in writing to the addressor and will be effective upon receipt by the addressee. Such Notices will be effective within [***] ([***]) Business Days of the postmark or transmittal date or when delivered to the addressee, whichever is earlier.

 

If to Allist:

 

Shanghai Allist Pharmaceuticals Co., Ltd.
5^th Floor, Tower 1,
1227 Zhangheng Road,
Zhangjiang Hi-Tech Park, Shanghai PR China, 201203

 

Attention: Jie Hu, Executive Board Director / Executive Vice President
E-mail:  [***] 

Copy to: Legal Department

 

If to ArriVent:

 

ArriVent BioPharma Inc.,
18 Campus Blvd.,
Suite 100
Newtown Square, PA 19073-3269

 

Attention: Zhengbin Yao, CEO
E-mail:  [***] 

Copy to: Legal Department

 

13.7            Execution of Agreement. This Agreement may be executed by original or facsimile signature in several counterparts, all of which shall be deemed to be originals, and all of which shall constitute one and the same Agreement. Notwithstanding the foregoing, the Parties shall deliver original execution copies of this Agreement to one another as soon as reasonably practicable following execution thereof.

 

13.8            Waiver. The waiver by a Party of a breach or a default of any provision of this Agreement by the other Party shall not be construed as a waiver of any succeeding breach of the same or any other provision, nor shall any delay or omission on the part of a Party to exercise or avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilege by such Party.

 

13.9            Entire Agreement. This Agreement and the Exhibits and Schedule hereto (which Exhibits, and Schedule are deemed to be a part of this Agreement for all purposes) contain the full understanding of the Parties with respect to the subject matter hereof and supersede all prior understandings and writings relating thereto. No waiver, alteration or modification of any of the provisions hereof shall be binding unless made in writing and signed by the Parties.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

13.10            Severability. In the event that any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable because it is invalid or in conflict with any law of any relevant jurisdiction, the validity of the remaining provisions shall not be affected, and the Parties shall negotiate a substitute provision that, to the extent possible, accomplishes the original business purpose. During the period of such negotiation, and thereafter if no substituted provision is agreed upon, any such provision which is enforceable in part but not in whole shall be enforced to the maximum extent permitted by law.

 

13.11            Successors and Assigns. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and permitted assigns under the Assignment provisions of this Agreement.

 

13.12            No Third-Party Beneficiaries. No person or entity other than Allist and ArriVent shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives, on the date written below.

 

	Shanghai Allist Pharmaceuticals Co., Ltd
	Signature:	/s/ Jinhao Du

	Name: Jinhao Du
	Title: Chairman

Date:

June 30, 2021

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives, on the date written below.

 

	ArriVent Biopharma, Inc.
	Signature:	/s/ Zhengbin Yao

	Name: Zhengbin Yao
	Title: Chief Executive Officer

Date:

June 29, 2021

 

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EXHIBIT A

 

ALLIST PATENT RIGHTS

 

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EXHIBIT B

 

CC MEMBERS AND PRIMARY CONTACT PERSONS

 

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SCHEDULE 1

 

ALLIST TRADEMARKS

 

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AMENDMENT NO. 1

 

TO

 

GLOBAL TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

 

This Amendment No. 1 to Global Technology Transfer and License Agreement (“Amendment”) is made effective as of November 6, 2023 (the “Amendment Effective Date”) by and between Shanghai Allist Pharmaceuticals Co., Ltd, a limited liability company organized under the laws of China, having its principal place of business at No. 268, Lingxiaohua Road, Zhoupu Town, Pudong New Area, Shanghai, China 201318 (“Allist”) and ArriVent Biopharma, Inc., a Delaware corporation having a principal place of business at 18 Campus Blvd., Suite 100, Newtown Square, PA 19073 (“ArriVent”) (each a “Party”; collectively, the “Parties”).

 

RECITALS

 

WHEREAS, Allist and ArriVent previously entered into that certain Global Technology Transfer and License Agreement dated as of June 30, 2021 (the “License Agreement”); and

 

WHEREAS, the Parties desire to amend the License Agreement as set forth in this Amendment.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.              Interpretation. Capitalized terms used but not defined in this Amendment have the meanings set forth in the License Agreement.

 

2.              Section 1.2, Definitions.

 

(a)            The definition of “ArriVent Results” is hereby deleted in its entirety and replaced with the following:

 

“ArriVent Results” means any information, data and result that relates solely and exclusively to the Products, which ArriVent generates or collects in the conduct of any clinical trials or preclinical activities related to the Products in the Licensed Territory, including any Global Study, provided that, “ArriVent Results” shall not include any information, data and results that relate to the conduct of clinical trials or preclinical activities with any Third Party Combination, except for safety data that ArriVent is required to supply to Allist pursuant to Section 4.10 of the License Agreement.

 

(b)            The definition of “Allist Results” is hereby deleted in its entirety and replaced with the following:

 

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“Allist Results” means any information, data and result which Allist generates or collects in the conduct of any clinical trials or preclinical activities related to the Licensed Compound, including any Global Study, provided that, “Allist Results” shall not include any information, data and results that relate to the conduct of clinical trials or preclinical activities with any Third Party Combination, except for safety data that Allist is required to supply to ArriVent pursuant to Section 4.10 of the License Agreement.

 

(c)            The following definition is added to Section 1.2 in alphabetical order:

 

“Allist External Results” means any information, data and results that relate to Allist’s conduct of clinical trials or preclinical activities with any Third Party Combination, except for safety data that Allist is required to supply to ArriVent pursuant to Section 4.10 of the License Agreement.

 

(d)            The following definition is added to Section 1.2 in alphabetical order:

 

“ArriVent External Results” means any information, data and result that relates to ArriVent’s conduct of clinical trials or preclinical activities with any Third Party Combination, except for safety data that ArriVent is required to supply to Allist pursuant to Section 4.10 of the License Agreement.

 

(e)            The following definition is added to Section 1.2 in alphabetical order:

 

“Third Party Product” means a product incorporating an Active Ingredient Controlled by a Third Party.

 

(f)             The following definition is added to Section 1.2 in alphabetical order:

 

“Third Party Combination ” means the use of a Licensed Product with one or more Third Party Products for the treatment of a disease or condition in humans.

 

(g)            The following definition is added to Section 1.2 in alphabetical order:

 

“Opposite Territory” means, with respect to Allist, the Licensed Territory; and with respect to ArriVent, the Retained Territory.

 

3.              Section 4, Development. A new Section 4.4 is hereby added as follows (and original Sections 4.4 through 4.10 shall be renumbered accordingly):

 

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4.4 Development Activities in the Opposite Territory. The Parties acknowledge that nothing in this Section 4 shall be interpreted as a permission for ArriVent or Allist to perform any clinical trials, preclinical studies, or other research involving any Licensed Product in the Opposite Territory, either alone or partnering with any Third Party. The performance by a Party of any clinical trials, preclinical studies, or other research involving any Licensed Product in the Opposite Territory shall be subject to the other Party’s consent, which consent may be granted or rejected at such other Party’s full discretion. Such other Party may request for details about such clinical trials, preclinical studies, or other research to be conducted in the Opposite Territory involving any Licensed Product (including objectives, timeframe, potential partners, and key terms with such potential partners) in order to assess and determine whether the consent shall be granted.

 

4.              Section 4.7, Data Sharing. Section 4.7 is hereby deleted in its entirety and replaced with the following:

 

4.7            Data Sharing.

 

4.7.1 In any agreement ArriVent enters with a Third-Party partner for the collaborative development of any Third Party Combination, ArriVent shall use commercially reasonable efforts to procure that such Third Party will agree to provide to Allist all ArriVent External Results.

 

4.7.2 In any agreement Allist enters with a Third-Party partner for the collaborative development of any Third Party Combination, Allist shall use commercially reasonable efforts to procure that such Third Party will agree to provide to ArriVent all Allist External Results.

 

4.7.3 Without limiting the foregoing, Allist shall provide all Allist Results to ArriVent, and ArriVent shall provide all ArriVent Results to Allist, in each case with no extra cost to the other Party.

 

4.7.4 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, neither Party shall be required to disclose or license to each other any information, data, or technology it does not Control.

 

5.              Section 7.8, Allist Patent Rights, Joint Patents. Section 7.8 is hereby deleted in its entirety and replaced with the following:

 

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7.8           Allist Patent Rights; Joint Patents.

 

7.8.1

Retained Territory. [***] shall have the first right to direct the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the [***] Patent Rights and the Joint Patents in the Retained Territory at its sole cost and expense. [***] shall reasonably consult with [***] and keep [***] reasonably informed of the status of such [***] Patent Rights and Joint Patents, and shall provide [***], at [***] reasonable request, with (A) all material correspondence received from any patent authority in connection therewith and (B) copies of all files (including without limitation the complete texts of all patents and patent applications and copies of all office actions, office action responses and other official communications received from, or filed with, all relevant patent offices) that relate to the [***] Patent Rights or Joint Patents in the Retained Territory. [***] shall confer with [***] and consider in good faith [***] comments prior to submitting such filings and correspondence, provided that [***] provides such comments within [***] ([***]) days (or a shorter period reasonably designated by [***] if [***] ([***]) days is not practicable given the filing deadline) of receiving the draft filings and correspondence from [***]. To aid [***] in prosecution of such [***] Patent Rights and Joint Patents, [***] will provide information, execute and deliver documents, and cooperate with [***] and do other acts as [***] may reasonably request.

 

7.8.2

Licensed Territory. [***] shall have the first right to direct the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the [***] Patent Rights and Joint Patents in the Licensed Territory at its sole cost and expense. [***] shall reasonably consult with [***] and keep [***] reasonably informed of the status of such [***] Patent Rights and Joint Patents, and shall provide [***], at [***] reasonable request, with (A) all material correspondence received from any patent authority in connection therewith and (B) copies of all files (including without limitation the complete texts of all patents and patent applications and copies of all office actions, office action responses and other official communications received from, or filed with, all relevant patent offices) that relate to the [***] Patent Rights or Joint Patents in the Licensed Territory. [***] shall confer with [***] and consider in good faith [***] comments prior to submitting such filings and correspondence, provided that [***] provides such comments within [***] ([***]) days (or a shorter period reasonably designated by [***] if [***] ([***]) days is not practicable given the filing deadline) of receiving the draft filings and correspondence from [***]. To aid [***] in prosecution of such [***] Patent Rights and Joint Patents, [***] will provide information, execute and deliver documents, and cooperate with [***] and do other acts as [***] may reasonably request. If [***] determines in its sole discretion to abandon or not maintain any [***] Patent Rights or Joint Patents anywhere in the Licensed Territory, then [***] shall provide reasonable prior written notice to [***] of such intention (which notice shall, to the extent possible, be given no later than [***] ([***]) days prior to the last deadline for any action that must be taken with respect to any such Patent in the relevant patent office). In such case, upon [***] written election provided no later than [***] ([***]) days after such notice from [***], [***] may prosecute and maintain such [***] Patent Rights or Joint Patents, by counsel selected by [***] reasonably acceptable to [***] and shall bear the costs of such prosecution and maintenance. If [***] does not provide such election within [***] ([***]) days after such notice from [***], [***] may, in its sole discretion discontinue to prosecute and maintain such [***] Patent Rights or Joint Patents without further obligation to [***].

 

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6.              Section 8.2.4. The following is hereby added as new Section 8.2.4:

 

8.2.4         Allist will have the sole right, but not the obligation, to enforce and defend the Joint Patents in the Retained Territory. To facilitate a coordinated strategy with respect to the Joint Patents, Allist will discuss in good faith and coordinate with ArriVent in connection therewith and Allist will consider in good faith and reasonably address ArriVent’s input and comments with respect thereto.

 

7.              General. Except as set forth in this Amendment, all other terms of the License Agreement remain in full force and effect. This Amendment may be signed in two or more counterparts, including by emailing signed pdf copies with confirmation of receipt, all of which together shall constitute one and the same Amendment, binding on the Parties as if each had signed the same document.

 

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IN WITNESS WHEREOF, Allist and ArriVent, through their duly authorized representatives, have executed this Amendment and have caused it to be effective as of the Amendment Effective Date set forth above.

 

ArriVent Biopharma, Inc.			Shanghai Allist Pharmaceuticals Co., Ltd
By:	/s/ Bing Yao		By:	/s/ Jie Hu
Name:	Bing Yao		Name:	Jie Hu
Title:	CEO		Title:	Vice Chairman

 

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Exhibit 10.13

 

JOINT CLINICAL COLLABORATION AGREEMENT

 

This Joint Clinical Collaboration Agreement (the “Collaboration Agreement”), dated and effective as of [DATE] (the “Effective Date”), is by and between Shanghai Allist Pharmaceuticals Co., Ltd., (“Allist”) a limited liability company incorporated under the laws of China, having its principal place of business at No. 1118 Halei Road, Pudong New District, Shanghai, China; and ArriVent BioPharma, Inc. (“ArriVent”), a Delaware corporation, at 18 Campus Blvd. Suite 100, Newport P.A. (each a Party; collectively, Parties.)

 

RECITALS

 

WHEREAS, ArriVent and Allist are parties to a Global Technology Transfer and License Agreement dated as of June 30, 2021, (the “License Agreement”), pursuant to which Allist granted ArriVent an exclusive license under certain intellectual property controlled by Allist, to develop, manufacture and commercialize the Licensed Product in the Field in the Licensed Territory (as defined in the License Agreement);

 

WHEREAS, the License Agreement contemplates that the development of the Licensed Products may be conducted in the form of Global Study(s) involving enrollment of patients both in the Licensed Territory and in the Retained Territory, and certain such Global Study(s) may be jointly conducted by ArriVent and Allist;

 

WHEREAS, ArriVent and Allist now desire to conduct each Joint Global Study, under the terms and conditions set forth in this Collaboration Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.

DEFINITIONS

 

The terms in this Collaboration Agreement (including the Exhibits and Schedules) with initial letters capitalized, whether used in the singular or the plural, shall have the meaning set forth below. Capitalized terms used but not defined in this Collaboration Agreement shall have the same meaning given to them in the License Agreement. In the event of any conflict or inconsistency between the terms and provisions of this Collaboration Agreement and the terms and provisions of the License Agreement or other agreement between the Parties, unless this Collaboration Agreement otherwise provides for, so far as the subject matter herein is concerned, the terms and provisions of this Collaboration Agreement shall control.

 

1.1           “Collaborative Cost Model” means the cost (Sharing, Specialization, Allocation or Hybrid) model utilized to either share and/or allocate the expenses of each Joint Global Study in the Joint Global Development Plan.

 

1.2           “FTE” means a full-time employee of a Party having the appropriate skill and experience to conduct the specified activity and who is dedicated to the conduct of the specified activity. For the avoidance of doubt, a “consultant” which a Party hires under a consultancy agreement, a service agreement, or the like for performing general tasks or specific assignments for such Party during a period of time on a full-time or primarily full-time basis that is not a vendor specifically hired under a Joint Development Plan.

 

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1.3           “Global Study” means any global clinical studies conducted with the Licensed Compound and Licensed Product to be performed in at least one jurisdiction in the Licensed Territory and one in the Retained Territory but may not be part of the Joint Global Development Plan. For clarity, (a) any clinical study to be performed in the Retained Territory only is not a Joint Global Study even if the data generated from such study will be shared for use in the Licensed Territory and (b) any clinical study to be performed in the Licensed Territory only is not a Joint Global Study even if the data generated from such study will be shared for use in the Retained Territory.

 

1.4           “Investigator” means a person responsible for the conduct of the clinical trial at the trial site. If a trial is conducted by a team of individuals at a trial site, the investigator is the responsible leader of the team and may be called the Principal Investigator (PI).

 

1.5           “Joint Global Development Plan” means the joint global development plan for any Joint Global Study mutually agreed by the Parties to be conducted jointly pursuant to the terms and conditions of this Collaboration Agreement. The Joint Global Development Plan should also include a budget and timeline, to be prepared by the Parties and reviewed and approved by the Collaboration Committee, as such plan may be amended from time to time in accordance with this Collaboration Agreement.

 

1.6           “Joint Global Study” means any Global Study that has been agreed by the Parties to be included into the Joint Global Development Plan and jointly conducted by the Parties. Each Joint Global Study objectives, designs, study execution plan shall be agreed to by the Parties and studies may be conducted in both the Retained and Licensed Territory.

 

1.7           “Joint Global Study Budget” means the budget required for conducting each Joint Global Study, as set forth in the Joint Global Development Plan.

 

1.8           “Joint Global Study Costs” means all external costs and expenses of any^- kind incurred by either Party in performing its obligations under the Joint Global Development Plan and Collaboration Agreement, excluding any internal FTE costs of such Party but including external costs for, to the extent paid by such Party to its Subcontractors, suppliers, clinical trial sites and principal investigators: (a) in vitro and in vivo, toxicological, pharmacokinetic, and clinical aspects of Licensed Compound or Licensed Product; (b) preparing, submitting, reviewing or developing data or information for the purpose of a submission to a health authority to obtain and or maintain approval of the product; (c) the conduct of clinical trials; (d) the costs for developing, manufacturing and administering any company diagnostic tests; (e) the costs for procuring supply of Licensed Product, placebos and comparator drugs; (f) costs associated with technology service or transfer; and (g) any costs associated with English and Chinese translation of documents to support applications for Regulatory Approvals in either the Licensed Territory or in the Retained Territory.

 

1.9           “Joint Global Study Project Team”, composed of experienced representatives of Allist and ArriVent, and must be highly experienced with respect to the matters for which the parties are responsible to initiate and conduct the study.

 

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1.10         “Sponsor Party” means, the Party primarily responsible for the conduct of a Joint Global Study, the Party that is the Sponsor to the applicable Regulatory Agency and is responsible for the initiation, management and financing of such clinical trial (such Party, with respect to such Joint Global Study the “Sponsor Party”).

 

1.11         “Sponsored Territory” as defined in Section 2.1.

 

1.12         “Investigator Initiated Study” (IIS) or “Investigator Sponsor Trial” (IST) refers to studies with Licensed Product and are initiated and conducted by the Investigator in the Retained Territory and/or Licensed Territory, which may be included into the Joint Global Development Plan only upon agreement by the Parties. Collaboration Committee shall provide oversight on the objectives, designs, study execution plan, and the cost. IIS or IST may be conducted in both the Retained and Licensed Territory. The proposed IIS/IST cannot have any negative impact on the Joint Global Development Plan.

 

1.13         “IIS/IST Budget” The costs may or may not be shared by Parties depending on whether both Parties participate in such ISS/IST Study.

 

1.14         “Trial Master File (TMF)” refers to a repository of documents that collectively can be used by monitors, auditors, assessors, and sponsors to demonstrate that a clinical trial has been conducted in compliance with Good Clinical Practice (GCP) and the approved protocol.

 

2.

JOINT GLOBAL STUDY SCOPE

 

2.1           Joint Global Study. If either Party or both Parties wish to jointly conduct a Global Study, one or both Parties (as the case may be) shall prepare and submit the proposed strategy, protocol design, budget, proposal for budget sharing and internal process timeline for such proposed Global Study in reasonable detail to the CC for its review at least ninety (90) days (or any other period of time the Parties agree to) in advance of protocol filing with any healthy authorities. If CC agrees on a written development plan for such proposed Global Study, such proposed Global Study shall become a “Joint Global Study” and such plan a Joint Global Development Plan. The Joint Global Development Plan shall include the allocation of Sponsorship and all items (i) through (iii) as set out in Section 2.3 below, all of which the Parties shall agree on.

 

2.2           Allocation of Sponsorship. Each Joint Global Study that is mutually agreed upon and incorporated into the Joint Global Development Plan will have the following Sponsor designations: (i) ArriVent will be the named Sponsor in the Licensed Territory (as defined in the License Agreement), (ii) Allist will be named Sponsor for PRC (as defined in the License Agreement), (iii) determined by the Collaboration Committee (“CC”) on a clinical trial-by-clinical trial basis, the Party that will be the Sponsor for each of the following territories, Hong Kong, Macau, and Taiwan participating in such Joint Global Study (such Party, the “Sponsor Party” and Sponsor Party’s “Sponsored Territory”). The Parties may amend the Joint Global Development Plan by adding, removing, or modifying each Joint Global Study only by approval of the CC. The allocation of sponsorship to ArriVent in Hong Kong, Macau, and Taiwan does not affect Allist’s exclusive right to Exploit Allist IP in the Retained Territory according to Section 2.2 of the License Agreement. For greater clarity, shall ArriVent be named as a Sponsor of a Joint Global Study in Hong Kong, Macau, and Taiwan, it shall be considered an agent in fact for and on behalf of Allist and shall not Exploit or attempt to Exploit the Allist IP in any way unless otherwise authorized by Allist. Allist shall always have the right to apply for Regulatory Approvals in Hong Kong, Macau, and Taiwan in its own name.

 

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2.3           Conduct of Joint Global Study. The Parties intend, pursuant to this Collaboration Agreement, to discuss, coordinate, review and approve the conduct of each Joint Global Study Including, but not limited to, (i) establishing a Joint Global Study Project Team and assign highly qualified team members (“Joint Project Team”), (ii) to define study objectives, study designs and execution plans, (iii) to write up a clinical study protocol (including a clinical protocol synopsis, informed consent form “ICF”, amendments) for each Joint Global Study (each, a “Protocol”), ArriVent will lead the effort for drafting the protocols, ICF, amendments and allow sufficient time for Allist to review, such Protocols, ICFs, amendments won’t be finalized until both Parties mutually agree, (iv) to agree on details and estimated timelines of activities, (v) to determine Joint Global Study Budget and the mechanism to allocate the Joint Global Study Budget, (vi) study execution, subject to review and approval of the CC before each Joint Global Study can be initiated. Notwithstanding, the Sponsor Party shall implement the Joint Global Development Plan to the extent necessary for the implementation, have decision-making authority with respect to matters not included in 2.3.1(the “Non-Operational Matters”) which does not affect the allocation of Sponsorship as noted in (i) through (vi) herein, in the conduct of each Joint Global Study.

 

2.3.1        The Joint Project Team will include representatives from both Parties to jointly execute the Protocol and objectives of each Joint Global Study, subject to the oversight and determinations of the CC as provided in Sections 3 (Governance), be responsible for and will use Commercially Reasonable Efforts to conduct, but not limited to the following activities: (1) developing plan for each Joint Global Study, (2) the selection and management of clinical study sites (including the negotiation and execution of clinical site study agreements and related budgets, timelines and contingency planning) unless otherwise mutually agreed upon by both Parties, (3) conducting clinical study start-up activities, communicating with and obtaining approval from institutional review boards and/or ethics committees, as applicable, and drafting the informed consent form (“ICF”) or other relevant documents for such Joint Global Study (for review and, if applicable, approval as provided in this Agreement), (4) subject recruitment and retention activities, (5) ongoing site monitoring and quality assurance audits, (6) subject to the terms of the Pharmacovigilance Agreement, management of safety reporting by contract research organizations and clinical study sites, (7) ongoing medical monitoring, (8) management, monitoring and audits of Contract Research Organization (“CRO”) in connection with each CRO (if any) involved in the conduct of such Joint Global Study, (9) inquiries from clinical study subjects, (10), regulatory filings, (11) packaging, labeling and distributing the Licensed Compound for use in such Joint Global Study, and (12) manage health authority inspections at clinical trial sites ((1)-(12), collectively, the “Operational Matters”).

 

2.3.2        Joint Global Study Management Plan. The Project Team shall set up a mechanism for the Parties to be informed and updated on a timely periodic basis regarding Operational Matters, so that if either Party has any significant concerns or material disagreements regarding same, the matter can be escalated to the CC for review (the “Joint Management Plan”) and shall ensure adherence to such plan in its Sponsored Territory. In addition, the Parties will, by itself or through an approved vendor, review the monitoring reports generated in each Joint Global Study in all Sponsored Territories in a timely manner. All such monitoring reports shall be in English. Notwithstanding anything to the contrary in this Collaboration Agreement, in the event that the Sponsor Party receives communication from a Regulatory Authority requesting an immediate response or otherwise as stipulated by laws and regulations that the Sponsor Party reasonably determines must be immediately given to protect patient safety or to prevent undue and significant disruption in the conduct of a Joint Global Study, the Sponsor Party will be entitled to provide such response as it deems advisable (and that is otherwise consistent with the terms of this Agreement); provided, that it immediately notifies the Project Team of same.

 

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2.4           Subcontractors. Each Party shall have the right to engage subcontractors (including consultants, agents, vendors, and the like) to conduct activities assigned to it under such Joint Global Development Plan (collectively, “Subcontractors”) so long as such Party remain primarily responsible for the performance of such Subcontractors it engages and the compliance of such Subcontractors with the terms and conditions of this Collaboration Agreement. For each Joint Global Study, the Parties shall jointly agree on the selection of the CROs and other key vendors therefor, will jointly contract with such CROs and vendors unless they are specific to operations in a particular Sponsored Territory. The CROs and vendors list should be jointly agreed to at the Project Team Meeting for each Joint Global Study. In the event that additional vendors need to be added after the initial list is approved, a new list will be created that includes the new vendors and such list will be provided to the Project Team for its approval. The Parties shall jointly oversee the activities of the vendors contracted by the Parties, so long as the contracting Party remain primarily responsible for the performance of such CROs, or vendors it engages and the compliance of such Subcontractors with the terms and conditions of this Collaboration Agreement. Notwithstanding, each Party shall oversee and be responsible for the activities of the Subcontractors contracted by such Party for a Joint Global Study(s).

 

2.5           Sites and Investigators Monitoring. The Sponsor party will select the sites and investigators pertain to its Sponsored Territory and inform the other Party and the Project Team of the selected sites and investigators. In the event that additional sites, or investigators need to be added after the initial list is approved, a new list will be created that includes the new sites, or investigators and the Project Team will be informed with the list. The Sponsor Party shall be responsible for selecting, engaging, management, monitoring, data entry, query responses, cleaning and ensuring compliance with GCP (“Good Clinical Practice”) of, the clinical trial sites and principal investigators in its Sponsored Territory.

 

2.6           Trial Master File (“TMF”). For each Joint Global Study, as between the Parties, the Sponsor Party shall be responsible for the set up and maintenance of the Trial Master File and collection of documents for Regulatory Filings from its Sponsored Territory. The TMF shall contain all documentations related to the Joint Global Study. It must be set up in compliance with Good Clinical Practice (GCP) standards and applicable local regulatory requirements.

 

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2.7           Biometrics. The Parties are jointly responsible for developing global strategies needed to manage data, statistical programming, and biostatistics for each Joint Global Study. The Parties agree that each Joint Global Study shall have one clinical database, one Statistical Analysis Plan (“SAP”) and one Clinical Study Report (“CSR”). The SAP shall define all the statistical methods and outputs which will be included in the CSR, in the IIS/IST, and submitted to Regulatory Authorities as part of the submission package. A detailed SAP review is of fundamental importance to clarify any misunderstandings as early as possible and to produce high-quality programming deliverables. SAPs must be carefully reviewed by highly qualified staff for clarity, comprehension and to ensure sufficient detail is present to unambiguously construct analysis data sets and prepare planned tables, figures, and listings (“TFLs”). Notwithstanding, ArriVent will initiate and coordinate all efforts for statistical programing, data management and biostatistics, in each Joint Global Study, specifically for the following deliverable(s) or as mutually agreed by the Joint Project Team. The deliverables are not considered finalized until the Joint Project Team has reviewed and approved:

 

(i)            Case Report Form (“CRF”) used by the sponsor of the clinical trial to collect data from each participating patient;

 

(ii)           Electronic Data Capture (“EDC”) database;

 

(iii)          Statistical Analysis Plan (“SAP”);

 

(iv)          Clinical Study Report (“CSR”);

 

(v)           Tables, Figures, and Listings (“TLFs”) for the CSR and ISS/ISE Integrated summary of safety and integrated summary of efficacy, respectively. These documents comprise of integrated analyses of the safety and effectiveness of the study drug from all clinical trials performed as a whole, producing integrated statistical results;

 

(vi)          Clinical Data Interchange Standards Consortium (“CDISC”) data sets which standards support transparency in the process of medical research from the protocol phase to the reporting of data and results; and

 

(vii)         SAS programs.

 

2.8           Other Provisions. The obligations under Articles 4.7 (Data Sharing), 4.8 (Rights of ArriVent Cross-Reference), 4.9 (Rights of Allist Cross-Reference) and 4.10 (Safety Data) of the License Agreement shall apply to both Parties with respect to each Joint Global Study, mutatis mutandis. ArriVent’s activities with respect to each Joint Global Study shall be deemed part of the Joint Global Development Program carried out by ArriVent under the License Agreement for the purpose of fulfilling Arri Vent’s diligence obligation under the License Agreement. For clarity, nothing in this Section 2.8 is a waiver of ArriVent’s obligations under the License Agreement for each Global Study.

 

2.9           No Other Effect. For clarity, nothing in this Collaboration Agreement will be construed as limiting either Party’s right to develop Licensed Product as set forth in the License Agreement outside the scope of the Joint Global Development Plan and this Collaboration Agreement, or as requiring either Party to participate in any Joint Global Study under the Joint Global Development Plan.

 

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2.10         Delegation of Sponsorship. If a Party does not participate in a Global Study it shall delegate Sponsorship as follows: (i) Allist shall delegate the sponsorship to ArriVent for any global clinical study that Allist does not participate in, including the following territories: PRC, Hong Kong, Taiwan, Macau, (ii) furthermore, ArriVent shall delegate the sponsorship to Allist for any global study that ArriVent does not participate in, including the following territories: [***].

 

3.

GOVERNANCE.

 

3.1           Article 3 of the License Agreement shall apply to all decisions made under this Collaboration Agreement, applied to both Parties, mutatis mutandis. Under Section 3.2, the CC will have no decision-making authority and will have no right, power, or authority to amend the License Agreement. However, the CC shall have decision-making authority and will have the right, power, and authority under this Collaboration Agreement to approve the Joint Global Development Plan. Furthermore, Section 3.4 of the License Agreement, is superseded by this Section 3.1, clarifying that the CC will be Co-Chaired by ArriVent and Allist. The Joint Global Development Plan and each Joint Global Study shall be approved by the CC. In the event of a disagreement as to this Collaboration Agreement or responsibility by either Party under the Joint Global Development Plan, for any Joint Global Study, including but not limited to, content, timing, decision making, publication, Cost Allocation Model, budget overrun, reimbursement, such disputes (“Dispute”) shall be referred to decision making consensus to the CC; provided that, in the absence of agreement after such good faith discussions, within [***] ([***]) days of referral, such Dispute shall be differed to each Party’s respective Chief Executive Officer (or their respective designees) for a final decision.

 

4.

REGULATORY MATTERS & COMMUNICATION

 

4.1           General. The Parties will mutually agree on the global regulatory strategy for each Joint Global Study. As between the Parties in connection with any Joint Global Study, the Sponsor Party will be responsible for developing strategies for and preparing and submitting all Regulatory Filings and application for Regulatory Approval for the Licensed Product in its Sponsored Territory. In Hong Kong, Macau, and Taiwan, Allist shall be responsible for developing strategies for and preparing and submitting application for Regulatory Approval for the Licensed Product regardless if the Sponsor Party in these areas is ArriVent; developing submission strategies will be done in consultation with ArriVent. For the purpose of this Section 4 in relation to regulatory matters, a “Sponsor Party” in a given jurisdiction refers to the Party which is appointed as a Sponsor of the Joint Global Study in that jurisdiction per Section 2.2 or, in case of a Joint Global Study to be performed in Hong Kong, Macau, or Taiwan.

 

4.2           Regulatory Filings and Regulatory Approvals. Before making any submission to any Regulatory Authority, the Sponsor Party shall consult with and provide the other Party the opportunity to review draft Regulatory Filings with respect to a Joint Global Study (e.g., Type B meeting packages, key documents in INDs, NDAs, fast track, breakthrough designation and orphan drug application) to be submitted to the Regulatory Agency in its Sponsored Territory in advance of submission. Such other Party shall provide any comments within [***] ([***]) Business Days after receipt, but such Sponsor Party shall not be required to delay any planned submissions if it does not receive timely comments from such other Party. As between the Parties, ArriVent shall prepare the first draft of the global submission dossier for the Parties’ review and comments.

 

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4.3           Regulatory Meetings and Correspondence. Any key meetings with a Regulatory Agency regarding a Regulatory Filing with respect to a Joint Global Study shall be conducted by the Sponsor Party for its Sponsored Territory, with prior written notification to the other Party when practicable such that the other Party will have the opportunity to be present with one (1) representative as an observer. Unless required to comply with Applicable Laws, the Party that is not the Sponsor Party shall not, without the prior written approval of the Sponsor Party, correspond or communicate with any Regulatory Agency in the applicable Sponsored Territory.

 

4.4           No Other Effect. The designation of Sponsor Party and Sponsored Territory shall not alter the allocation of the right to Commercialize the Licensed Product under the License Agreement between the Parties. For clarity, ArriVent shall have the sole right to Commercialize the License Product in the Licensed Territory regardless of whether the entirety of Licensed Territory is ArriVent’s Sponsored Territory for a particular Joint Global Study, and Allist shall have the sole right to Commercialize the Licensed Product only in the Retained Territory regardless of whether the entirety of Licensed Territory is Allist’s Sponsored Territory for a particular Joint Global Study.

 

4.5           Safety Data. The safety data handling and exchange between the Parties with respect to each Joint Global Study shall be governed by the Pharmacovigilance Agreement (“PVA”) entered into between the Parties. The PVA sets forth the Parties’ responsibilities and obligations with respect to the procedures and timeframes for compliance with Applicable Laws and Regulations pertaining to safety data collection, assessment and reporting of the Licensed Product and related activities. The PVA will ensure that adverse event and other safety information is exchanged according to a schedule that will permit each Party to comply with Applicable Laws, including any local regulatory requirements. Each Sponsor Party shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Licensed Product received from its Sponsored Territory and for reporting adverse events to the applicable Regulatory Agencies in its Sponsored Territory, in accordance with Applicable Law, including the USA Code of Federal Regulations, Title 21, and the Chinese “Standards for Quality Control of Drug Clinical Trials” (No. 57 of 2020).

 

5.

COST ALLOCATION; COST SHARING

 

5.1           Joint Global Study Budget. The Project Team will be responsible for the preparation of the budget, actuals required to conduct each Joint Global Study under the Joint Global Development Plan. Each Joint Global Study Budget, actuals must be reviewed and approved by the CC. For clarity, no study shall be included in the Joint Global Development Plan as a Joint Global Study unless and until the Joint Global Study estimated Budget has been agreed by CC unanimously.

 

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5.2           Joint Global Study Expenses. For each Joint Global Study under the Joint Development Plan, Arrivent and Allist will review the expense categories in the budget, and actuals, (“Shared Costs”) which means the costs directly attributable or reasonably allocable by each Party for the conduct of each Joint Global Study (including but not limited to CRO, investigators, clinical trial sites, subcontractors) and agree on the Collaborative Cost Model to calculate such Shared Costs. The Shared Costs for each Joint Global Study will be based on the final Protocol for such Joint Global Study. The Collaborative Cost Model will be based on the Shared Costs and the Collaborative Model shall be reviewed and approved by CC and appended to the Joint Global Development Plan. Nothing in this Collaboration Agreement suggests that any Shared Cost shall be split between the Parties on a [***]% to [***]% basis, unless mutually agreed upon. The Parties acknowledge that the amount of estimated expenses incurred in the Sponsored Territory and the benefit which may be brought to the other Party shall be considered in discussing the Collaborative Cost Model and the actual ratio by which the Parties will share the Shared Cost. In the event that changes to each Joint Global Study affect the Joint Global Study Budget, the Parties may mutually agree through written consent of the Parties to amend the Collaborative Cost Model. The Parties shall share all Shared Costs except as follows: [***]. For the avoidance of doubt, nothing in this Collaboration Agreement herein shall be considered to establish an employment relationship between a Party and the FTEs of the other Party funded by such Party pursuant to this Collaboration Agreement, thus, each Party shall each bear its own internal FTE costs in connection with each Joint Global Study. Notwithstanding anything herein, if any cost is incurred (i) for a Global Study that is conducted by Allist and not part of the Joint Global Development Plan, Allist shall be solely responsible for such cost; (ii) if any cost is incurred for a Global Study that is conducted by ArriVent and not part of the Joint Global Development Plan, then ArriVent shall be solely responsible for such cost.

 

5.3           Budget overrun. In each Contract Year, if a Party determines that the budgeted cost for such Joint Global Study set out in the Joint Global Development Budget for which it is responsible is likely to be exceeded or is exceeded by more than [***] percent ([***]%), it shall: (i) promptly inform the Project Team of the expected or actual cost overrun; and (ii) provide the Project Team with a detailed, written explanation for the cost overrun for that activity, and complete and accurate records substantiating the expected or actual cost overrun. At its next regularly scheduled meeting, the CC shall determine by consensus as to whether, and to what extent, any cost overrun shall be absorbed by that Party, reimbursed by the other Party, or shared in some proportion between the Parties. If the CC determines that any aspect of the cost overrun should be reimbursed by the other Party, it shall prepare and approve an amended Joint Global Study Budget for that Contract Year accordingly. No reimbursement of any cost overrun shall be made if the Party seeking the reimbursement does not notify the other Party and first obtain approval in advance of such cost overrun as set forth above. If the reason for the expenses exceeding the approved budget by more than [***]% is attributable to the breach of this Collaboration Agreement, then the costs incurred that are more than the CC approved budget and not in accordance with this Section 5.3, the overrun expenses should be paid by the breaching Party. For avoidance of doubt, any Global Study conducted by ArriVent or Allist that are not part of the Joint Development Plan, Allist or ArriVent can opt-in to the study but will need to reimburse the Party that conducted the study with [***]% external costs (e.g., CRO, investigator costs, etc.)

 

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5.4           Invoicing; Payment.

 

5.4.1            Reporting and Invoicing. Each Party shall report to the other Party, within [***] ([***]) business days after the end of each Quarter with regard to Shared Costs (as applicable) actually incurred during such Quarter by such Party (a “Quarterly Report”). Such report shall specify in reasonable detail about the cost descriptions, Vendors/CROs, cost amount during each quarter. The Parties shall seek to resolve any questions related to such reports within [***] ([***]) business days following receipt by each Party of the other Party’s report hereunder.

 

5.4.2        Reimbursement. Within [***] ([***]) days after the end of each Calendar Quarter during which the Parties are conducting at least one (1) Joint Global Study, each Party will submit to the other Party a full and complete report of its accounting of each Joint Global Study Expenses incurred by such Party during such Calendar Quarter, and specify whether any such Joint Global Study Expense shall be borne by the other Party submitting such report, or the Parties jointly will be determined by the Collaborative Cost Plan. Within [***] ([***]) Business Days after receiving such report, both Parties shall issue a reconciliation notification to the other Party owing any reimbursement payment for such Calendar Quarter as set forth in such reconciliation notice and the other Party shall submit such reimbursement within [***] ([***]) days after the date of such reconciliation notice.

 

5.4.3        Audit. At the request (and expense) of a Party, the other Party shall permit an independent certified public accountant appointed by the requesting Party and reasonably acceptable to such other Party, at reasonable times and upon reasonable notice, to examine only those records as may be reasonably necessary to determine, with respect to any calendar year ending not more than [***] ([***]) days prior to such Party’s request, the correctness or completeness of any invoice submitted to the such other Party or other payment made to the such other Party pursuant to this Collaboration Agreement and the Joint Global Development Budget. The foregoing right of review may be exercised only [***] per year and only [***] with respect to each such periodic report and payment. Results of any such examination shall be (a) made available to both Parties and (b) subject to Article 9 (Confidentiality). The Party requesting the audit shall bear the full cost of the performance of any such audit, unless such audit discloses a variance to the detriment of the auditing Party of more than [***]% from the amount of the original report, royalty, or clinical study payment calculation, in which case, the Party being audited shall bear the full cost of the performance of such audit.

 

5.4.4        Reporting Obligation. The Sponsor Party (i) will provide (to the extent in the possession of the Sponsor Party), or will utilize Commercially Reasonable Efforts to obligate and ensure that each vendor and other applicable Third Party contractors for a Joint Global Study provides, the other Party with any information requested as the Party may reasonably determine to comply with its reporting obligations under Sunshine Laws ( and (ii) will reasonably cooperate with, and will utilize Commercially Reasonable Efforts to obligate and ensure that each vendor and other applicable Third Party contractors for a Joint Global Study reasonably cooperates with, the other Party in connection with its compliance with such Sunshine Laws. The form in which the Sponsor Party provides any such information shall be mutually agreed but sufficient to enable the other Party to comply with its reporting obligations and the other Party may disclose any information that it believes is necessary to comply with Sunshine Laws. These obligations shall survive the expiration and termination of the agreement to the extent necessary for the Parties to comply with Sunshine Laws.

 

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5.5           Article 6.14 (Currency Exchange), 6.15 (Audit), 6.16 (Interest Due) and 6.17 (Tax Withholding) of the License Collaboration Agreement shall apply to all payments made under this Collaboration Agreement, applied to both Parties, mutatis mutandis.

 

6.

Press Releases and Publications.

 

6.1           The Parties shall jointly agree to the content and timing of all external communications with respect to this Collaboration Agreement (including, without limitation, press releases, Q&As, and the content and wording for of any listing of any Joint Global Study required to be listed on a public database or other public registry such as www.clinicaltrials.gov). For clarity, if either Party terminates this Collaboration Agreement pursuant to Section 11 of the License Agreement, the Parties shall mutually agree upon any external communication related to such termination, which shall not include the rationale for such termination unless (and to the extent) mutually agreed by the Parties; provided that either Party shall be permitted to publicly disclose information that such Party determines in good faith is necessary to be disclosed to comply with Applicable Law or the rules or regulations of any securities exchange on which such Party’s stock may be listed, or pursuant to an order of a court or governmental entity.

 

6.2           Allist and ArriVent agree to collaborate to publicly disclose, publish or present; (1) top-line result from each Joint Global Study, limited if possible to avoid jeopardizing the future publication of the Study Data at a scientific conference or in a scientific journal, solely for the purpose of disclosing, as soon as reasonably practicable, the safety or efficacy results and conclusions that are material to any Party under applicable securities laws, and (2) the conclusions and outcomes (the “Results”) of each Joint Global Study at a scientific conference as soon as reasonably practicable following the completion of such Joint Global Study, subject in the case of (2) to the following terms and conditions. The Party proposing to disclose, publish or present the Results shall deliver to each other Party a copy of the proposed disclosure, publication, or presentation at least [***] ([***]) business days before submission to a Third Party.

 

7.

Miscellaneous.

 

7.1           Review and Approval. The Party given the opportunity to review or approve a relevant matter that has a deadline set forth by a third-party, health authorities in the Licensed or Retained Territory or required by law or regulation, shall not unreasonably withhold, condition, or delay its review or approval. The Party requesting such review or consent to the relevant matter shall give no less than [***] ([***]) business days before the requested deadline of review or approval. If the reviewing party is unable to review or approve within such timeframe, the reviewing party shall notify the requesting party within [***] hours. The requesting party should take reasonable steps to provide an extension of such deadline unless such deadline is set forth directly by a third party, or health authorities, or it’s required by law or regulation. The failure to respond in writing within the specified time periods required by the requesting party shall be deemed unconditioned review of or approval to the relevant matter.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.2           Inventions and Confidentiality. Ownership of Inventions and confidentiality and non-use obligations in connection with each Joint Global Study shall be subject to the terms and conditions of the License Agreement.

 

7.3           License Agreement Reference. Sections 8 (Infringement and Enforcement third-party Infringement Action), 9 (Confidentiality), 11 (Term and Termination), 12 (Dispute and Resolution), 13 (Miscellaneous) (other than Section 13.2, 13.3 and 13.9 as applied to each Joint Global Study), and Sections 10.5 (Representation and Warranties from the Parties to Each Other), 10.7 (Limitations of Liabilities) and 10.8 (Insurance) of the License Agreement shall apply to this Collaboration Agreement, mutatis mutandis, and shall be deemed incorporated by reference.

 

7.4           Termination for Cause. The obligations under Section 11.3 of the License Agreement shall apply to both Parties, mutatis mutandis with respect to this Collaboration Agreement, or on each Joint Global Study basis by providing written notice of such breach to either Party in accordance with Section 11.3. The Parties shall share the Joint Global Study Shared Costs in accordance with the Collaborative Cost Model, incurred until the date of notice of termination.

 

7.5           No Other Effect. This Collaboration Agreement shall apply solely to each Joint Global Study set forth in the Joint Global Development Plan and shall not waiver, alter, modify, or otherwise affect the rights and obligations of the Parties under the License Agreement, except as expressly set forth in this Collaboration Agreement. This Collaboration Agreement does not apply to any IIS/IST, Global Study and the Development Program that is not a Joint Global Study.

 

7.6           Entire Collaboration Agreement. The Parties acknowledge that this Collaboration Agreement shall govern all activities of the Parties with respect to each Joint Global Study from the Effective Date forward. This Collaboration Agreement, including the Exhibits hereto and together with the Joint Global Development Plan, License Agreement, the Quality Agreement, and Pharmacovigilance Agreement, sets forth the complete, final, and exclusive agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements and understandings between the Parties with respect to such subject matter. There are no covenants, promises, agreements, warranties, representations, conditions, or understandings, either oral or written, between the Parties with respect to such subject matter other than as are set forth in this Collaboration Agreement. All Exhibits attached hereto are incorporated herein as part of this Collaboration Agreement.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.7           Counterparts. This Collaboration Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same Collaboration Agreement. A signed copy of this Collaboration Agreement delivered by facsimile, e-mail, or other means of electronic transmission (to which a PDF copy is attached) shall be deemed to have the same legal effect as delivery of an original signed copy of this Collaboration Agreement.

 

[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) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Collaboration Agreement effective as of the Effective Date.

 

	ArriVent Biopharma, Inc.
	By:	/s/ Stuart Lutzker, MD, Ph.D.
		Name:  Stuart Lutzker, MD, Ph.D.
		Title:  EVP & CMO
	Shanghai Allist Pharmaceuticals Co., Ltd.
	By:	/s/ Jinhao DU
		Name:  Jinhao DU
		Title:  Chairman

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

 

Exhibit 10.14

 

RESEARCH COLLABORATION AGREEMENT

 

This RESEARCH COLLABORATION AGREEMENT (the “Agreement”) is effective as of December 21, 2021 (the “Effective Date”) by and between Aarvik Therapeutics, Inc., a company incorporated in Delaware, having a place of business at 31363 Medallion Drive, Hayward, CA 94544 (“Aarvik”), and ArriVent Biopharma, Inc., a company incorporated in Delaware, with offices located at 18 Campus Blvd. Suite 100, Newtown Square, PA 19073-3269 (“ArriVent”). ArriVent and Aarvik are referred to herein individually, as a “Party” or, collectively, as “Parties.”

 

BACKGROUND

 

WHEREAS, Aarvik has expertise in, and platforms for, the discovery of novel molecules for oncology targets;

 

WHEREAS, ArriVent has expertise in the research, development and commercialization of pharmaceutical products;

 

WHEREAS, the Parties wish to collaborate to use the Aarvik IP to discover novel bispecific ADCs in the Field, from which Compound(s) may be selected and further developed; and

 

WHEREAS, Aarvik desires to grant and ArriVent desires to obtain an option to acquire exclusive rights to Research, Develop, use, Manufacture, Commercialize the Compounds and Products in the Field in the Territory.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration the receipt and sufficiency of which is hereby acknowledged, ArriVent and Aarvik hereby agree as follows:

 

ARTICLE 1
DEFINITIONS

 

The following capitalized terms shall have the meanings given in this Article 1 when used in this Agreement:

 

1.1            “Aarvik Indemnitees” has the meaning set forth in Section 10.2.

 

1.2            “Aarvik IP” shall mean Aarvik Know-How and Aarvik Patents.

 

1.3            “Aarvik Know-How” shall mean all Know-How owned or Controlled by Aarvik or any of its Affiliates as of the Effective Date or during the Term that is necessary or useful for the Research, Development, Manufacture, or Commercialization of any Compound or Product in the Field. For clarity, Aarvik Know-How shall include all Know-How licensed to Aarvik or any of its Affiliates under the Existing In-License Agreements.

 

1.4            “Aarvik Patents” shall mean all Patents owned or Controlled by Aarvik or any of its Affiliates as of the Effective Date or during the Term that are necessary or useful for the Research, Development, Manufacture, use or Commercialization of any Compound or Product in the Field. For clarity, Aarvik Patents shall include all Patents, if any, licensed to Aarvik or any of its Affiliates under the Existing In-License Agreements.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.5            “Accounting Standards” shall mean with respect to a Person, as applicable (a) generally accepted accounting principles as practiced in the United States, (b) the International Financial Reporting Standards issued by the International Financial Reporting Standards Foundation and the International Accounting Standards Board, or (c) applicable accounting standards followed by such Person, in each case, consistently applied.

 

1.6            “ADCs” means an antibody drug conjugate comprising one or more antibody(ies) (or fragment(s) thereof) that binds to one or more Target(s) and is conjugated to a [***]. “[***]” means [***]: (a) [***]; (b) [***]; or (c) [***].

 

1.7            “Affiliate” shall mean, with respect to either Party, any Person controlling, controlled by or under common control with such Party, for so long as such control exists. For purposes of this definition only, “control” shall mean (a) direct or indirect ownership of fifty percent (50%) or more (or, if less than fifty percent (50%), the maximum ownership interest permitted by Applicable Law) of the stock or shares having the right to vote for the election of directors of such corporate entity or (b) the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise.

 

1.8            “Alliance Manager” has the meaning set forth in Section 2.2.

 

1.9            “Applicable Laws” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Marketing Approvals) of or from any court, arbitrator, mediator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item including all anti-corruption laws.

 

1.10            “ArriVent Indemnitees” has the meaning set forth in Section 10.1.

 

1.11            “Biologics Act” has the meaning set forth in Section 7.5.

 

1.12            “Biosimilar Product” shall mean [***].

 

1.13            “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which commercial banks in either Pennsylvania or California, the United States or the Cayman Islands are required by law to remain closed.

 

1.14            “Calendar Quarter” shall mean each successive period of three calendar months ending on March 31, June 30, September 30 and December 31, provided that the first Calendar Quarter of the Term shall begin on the Effective Date and end on the first to occur of March 31, June 30, September 30 or December 31 thereafter.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.15            “Calendar Year” shall mean the respective periods of twelve (12) months commencing on January 1 and ending on December 31.

 

1.16            “Collaboration” shall mean the Research collaboration between the Parties in accordance with the applicable SOWs during the Research Term. When used as a verb, “Collaborate” shall mean to engage in Collaboration.

 

1.17            “Collaboration Compound” shall mean any ADC that is generated within the Collaboration Program, as well as the antibodies incorporated in the ADC.

 

1.18            “Collaboration IP” shall mean, [***].

 

1.19            “Collaboration Patents” has the meaning set forth in Section 7.2.2.

 

1.20            “Collaboration Program” shall mean the Collaboration with respect to a pair of Targets, subject to the applicable SOWs, with the goal to identify at least one ADC showing meaningful binding activities against such pair of Targets that is suitable for further development by ArriVent beyond the Collaboration.

 

1.21            “Commercialization” shall mean, with respect to a particular Product, any and all processes and activities conducted to establish and maintain sales for such Product (including with respect to reimbursement and patient access), including offering for sale, detailing, selling (including launch), marketing (including education and advertising activities), promoting, storing, transporting, distributing, and importing such Product, but shall exclude Development and Manufacturing of such Product. “Commercialize” and “Commercializing” shall have their correlative meanings.

 

1.22            “Commercially Reasonable Efforts” shall mean, with respect to a Party, the level of efforts and resources (measured as of the time that such efforts and resources are required to be used under this Agreement) that are commonly used by a company in the industry of a similar size and similar profile as such Party to research, Develop, Manufacture or Commercialize, as the case may be, a product owned by such company or to which it has rights, which product is at a similar stage in its development or product life and is of a similar market and profitability potential to the Product and taking into account all relevant factors, including the intellectual property protection of the product, product labeling or anticipated labeling, market potential, financial return, medical and clinical considerations, regulatory environments and competitive market conditions, market exclusivity, and other technical legal, scientific, medical or commercial factors that such a company would reasonably deem to be relevant. With respect to a particular Product, Commercially Reasonable Efforts shall be determined on a country-by-country basis for such Product, and it is anticipated that the level of effort will be different for different markets, and will change over time, reflecting changes in the status of the Product and the market(s) involved.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.23            “Compound” shall mean [***].

 

1.24            “Confidential Information” has the meaning set forth in Section 8.1.

 

1.25            “Control” shall mean, with respect to particular Know-How or a particular Patent, possession by the Party granting the applicable right, license or sublicense to the other Party as provided herein of the power and authority, whether arising by ownership, license, or other authorization, to disclose and deliver the particular Know-How to the other Party, and to grant and authorize under such Know-How or Patent the right, license or sublicense, as applicable, of the scope granted to such other Party in this Agreement without giving rise to a violation of the terms of any agreement or other arrangement with any Third Party. “Controlled” shall have its correlative meanings.

 

1.26            “Cover” shall mean, with respect to any subject matter, the make or have made, manufacture or have manufactured, use, sale, offer for sale, importation, exportation or other Exploitation of such subject matter would infringe a claim of a Patent at the relevant time. “Covered” or “Covering” shall have their correlative meanings.

 

1.27            “Data Package” shall mean the data package containing such data and other contents as required in the applicable SOW.

 

1.28            “Development” or “Develop” shall mean, any preclinical, clinical, non-clinical activity directed to obtaining or maintaining Regulatory Approval of a Compound or Product, including all preclinical studies, toxicology testing, chemistry, manufacturing and control (CMC), clinical trials, statistical analysis and report writing, all related regulatory activities, the preparation and submission of such regulatory filings (including INDs and MAAs), regulatory affairs with respect to the foregoing and all other activities reasonably necessary or useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining a Regulatory Approval for a Compound or Product. When used as a verb, “Develop” shall mean to engage in Development. For clarity, “Development” shall include Phase IV studies or any other clinical trial commenced after Regulatory Approval.

 

1.29            “Executive Officers” means the Chief Executive Officer of ArriVent and Chief Executive Officer of Aarvik or their respective designees.

 

1.30            “Exploit” or “Exploitation” shall mean to make, have made, import, export, use, have used, sell, have sold, offer for sale, have offered for sale, or otherwise exploit, including to Research, Develop, Commercialize, register, modify, enhance, improve, manufacture, have manufactured, hold, keep (whether for disposal or otherwise), or otherwise dispose of “Existing In-License Agreements” shall mean any and all agreements between Aarvik or any of its Affiliates, on the one hand, and any Third Party, on the other hand, existing as of the Effective Date or during the Term pursuant to which Aarvik in-licenses any Patents or Know-How that are included as part of the Aarvik Patents or Aarvik Know-How.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.31            “Existing In-License Agreements” shall mean any and all agreements between Aarvik or any of its Affiliates, on the one hand, and any Third Party, on the other hand, existing as of the Effective Date or during the Term pursuant to which Aarvik in-licenses any Patents or Know-How that are included as part of the Aarvik Patents or Aarvik Know-How.

 

1.32            “FDA” shall mean the United States Food and Drug Administration, or any successor agency thereto.

 

1.33            “Field” shall mean [***].

 

1.34            “First Commercial Sale” shall mean, with respect to a Product, post-Regulatory Approval, the first sale, transfer or disposition for value of such Product in the Territory.

 

1.35            “Full Report” has the meaning set forth in Section 3.7.6.

 

1.36            “Governmental Authority” means any court, tribunal, arbitrator, Regulatory Authority, agency, commission, department, ministry, official or other instrumentality of the United States or other country, or any supra-national organization, or any foreign or domestic, state, county, city or other political subdivision.

 

1.37            “IND” shall mean an investigational new drug application, investigational medicinal product dossier, clinical study application, clinical trial application, clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

 

1.38            “Indemnify” has the meaning set forth in Section 10.1.

 

1.39            “Initial Transfer” has the meaning set forth in Section 5.3.

 

1.40            “Intellectual Property Rights” shall mean rights in Patents and Know-How and other intellectual property.

 

1.41            “JRC” has the meaning set forth in Section 2.2.

 

1.42            “Know-How” shall mean any and all know how, information comprising or embodied by (a) ideas, discoveries, inventions (including data or descriptions contained in unpublished patent applications), improvements or trade secrets, (b) research and development data, such as medicinal chemistry data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability data), toxicology data, clinical data (including investigator reports (both preliminary and final), statistical analyses, expert opinions and reports, safety and other electronic databases), quality control data and stability data, dosage regimens, product specifications, study designs and protocols, assays and biological methodology, (c) databases, practices, techniques, specifications, formulations, formulae, knowledge, (d) techniques, methods, processes, manufacturing information, (e) materials, cell lines, reagents and compositions of matter, including chemical or biological materials, in each case, whether patentable or not. Know-How shall not include any of the foregoing to the extent it is described or claimed in any published Patent.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.43            “Losses” has the meaning set forth in Section 10.1.

 

1.44            “MAA” (Marketing Approval Application) shall mean a Biologics License Application or similar application or submission filed with or submitted to any Regulatory Authority to obtain permission to initiate marketing and sales of a Product in the Field.

 

1.45            “Major Market Country” shall mean any of the following: the United States, mainland China, Japan, Germany, France, the United Kingdom, Italy and Spain.

 

1.46            “Manufacture” or “Manufacturing” shall mean all operations involved in the pre-clinical, clinical, and commercial manufacturing, quality control testing (including in-process, release and stability testing, if applicable), storage, releasing and packaging the Compound(s) and Product(s), including vector construction, cell line development, master cell bank generation, test method development and stability testing, toxicology, formulation and delivery system development, process development and optimization, clinical Compound and Product supply, manufacturing scale-up, development-stage manufacturing, quality assurance/quality control procedure development and performance with respect to clinical materials.

 

1.47            “Marketing Approval” shall mean, with respect to a Product in a particular jurisdiction, all approvals, licenses, registrations or authorizations necessary for the Commercialization of such Product in such jurisdiction, including only where mandatory for Commercialization of such Product, approval of labeling, price, reimbursement and manufacturing.

 

1.48            “Net Sales” shall mean gross sales of a Product as received by ArriVent, its Affiliates or its Sublicensees from a Third Party within the Territory under the applicable Accounting Standards, and less (a) all allowances for discounts, rebates and charge-backs, (b) credits or allowances granted upon claims, rejections, exchanges or returns of Products, (c) distribution, warehousing, transportation, importation, freight, postage, special packaging, shipping and insurance charges paid for delivery of Products, (d) the portion of any management or administrative fees paid during the relevant time period to government payor health care programs or pharmaceutical benefit managers for such government payor health care programs that relate specifically to sales of such Product, (e) taxes, duties or other governmental charges levied on or measured by the billing amount when included in billing, as adjusted for rebates and refunds, and (f) other reductions or specifically identifiable amounts deducted for reasons similar to those listed above, in each case, in accordance with the applicable Accounting Standards, as consistently applied. Adjustments may be made to the calculation of net sales as required by changes in the Accounting Standards as necessary in the future, or as appropriate to reflect changes to the accounting rules brought about by merger, take-over or law. Without limiting the generality of the foregoing, sales, transfers, or dispositions of Product for charitable, named-patient, promotional (including samples), non-clinical, clinical, or regulatory purposes shall be excluded from Net Sales, as shall sales or transfers of Product among ArriVent and its Affiliates or licensees or sublicensees.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

In the event that a Product is sold in any country in the form of a Combination Product, Net Sales of such Combination Product shall be adjusted by multiplying actual Net Sales of such Combination Product in such country (calculated pursuant to the foregoing definition of “Net Sales”) [***]. “Combination Product” means a Product that is comprised of or contains a Compound as an active ingredient together with one (1) or more other active ingredients or delivery systems and is sold together.

 

1.49            [***].

 

1.50            [***].

 

1.51            [***].

 

1.52            “NMPA” shall mean the National Medical Product Administration of the People’s Republic of China, or any successor agency thereto.

 

1.53            “Option” has the meaning set forth in Section 3.9.

 

1.54            “Option Period” has the meaning set forth in Section 3.9.

 

1.55            “Patentability and FTO Analysis” has the meaning set forth in Section 3.2.3.

 

1.56            “Patents” shall mean all patents and patent applications in any country in the world, including any continuations, continuations-in-part, divisionals, provisionals or any substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal or extension (including any patent term extension in the United States or supplemental protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all non-United States counterparts of any of the foregoing.

 

1.57            “Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof

 

1.58            “Phase 1 Clinical Trial” shall mean a clinical development program in any country that generally provides for the first introduction into humans of a pharmaceutical product candidate with the primary purpose of which is preliminary determination of safety, metabolism and pharmacokinetic properties and clinical pharmacology of such pharmaceutical product candidate in healthy patients, or otherwise generally consistent with U.S. 21 C.F.R. §312.21(a).

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.59            “Phase 2 Clinical Trial” shall mean a clinical study of an investigational product in subjects with the primary objective of characterizing its activity in a specific disease state as well as generating more detailed safety, tolerability, pharmacokinetics, pharmacodynamics, and dose finding information as described in 21 C.F.R. 312.21(b), or a comparable clinical study prescribed by the relevant Regulatory Authority in a country other than the United States, including a clinical study that is also designed to satisfy the requirements of 21 C.F.R. 312.21(a) or corresponding foreign regulations and is subsequently optimized or expanded to satisfy the requirements of 21 C.F.R. 312.21(b) (or corresponding foreign regulations) or otherwise to enable a Phase 3 Clinical Trial.

 

1.60            “Phase 3 Clinical Trial” shall mean a clinical study of an investigational product in subjects that incorporates accepted endpoints for confirmation of statistical significance of efficacy and safety with the aim to generate data and results that can be submitted to obtain Regulatory Approval as described in 21 C.F.R. 312.21(c), or a comparable clinical study prescribed by the relevant Regulatory Authority in a country other than the United States.

 

1.61            “Product” shall mean any formulation containing a Compound as an active ingredient, including all methods, forms, presentations, dosage strengths, dosage forms and formulations thereof, for administration by any method of delivery.

 

1.62            “Publications” has the meaning set forth in Section 8.5.1.

 

1.63            “Registration Trial” means a human clinical trial anywhere in the world that is a clinical trial or study that intends to provide the ultimate evidence and data that a Regulatory Authority uses to decide whether or not to approve a potential new medicine. For clarity, a Phase 2 or 2(b) Clinical Trial that satisfies the requirements of 21 CFR §312.21 (c) or its equivalent prescribed by the Regulatory Authority in the applicable country or regulatory jurisdiction other than the United States where the clinical trial takes place shall be considered a Registration Trial.

 

1.64            “Regulatory Approval” shall mean all approvals (including any applicable mandatory governmental price and reimbursement approvals and other Marketing Approvals), licenses, registrations, and authorizations of any federal, national, multinational, state, provincial or local Regulatory Authority, department, bureau and other governmental entity that are necessary for the marketing and sale of a product in a country or group of countries.

 

1.65            “Regulatory Authority” shall mean any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the discovery, Development, Manufacturing, Commercialization or other use or exploitation (including the granting of Marketing Approvals) of any Product in any jurisdiction, including the FDA, Pharmaceuticals and Medical Devices Agency (PMDA), Medicines and Healthcare Products Regulatory Agency (MHRA), European Medicines Agency (EMA), and the NMPA.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.66            “Representatives” means, with respect to any Person, such Person’s directors, officers, managers, employees, counsel, accountants, financial advisors, lenders and other agents and representatives.

 

1.67            “Research” means activities related to the design, discovery, identification, synthesis and characterization of Compounds within the Collaboration Program. “Researching” shall have a correlative meaning.

 

1.68            “Research Term” has the meaning set forth in Section 3.1.

 

1.69            “Royalty Term” has the meaning set forth in Section 6.5.2.

 

1.70            “SOWs” has the meaning set forth in Section 3.1. An agreed form of SOW is appended hereto as Exhibit D.

 

1.71            “Sublicensee” of a Party shall mean any Third Party to whom such Party has directly or indirectly granted a sublicense under all or any portion of the license granted to such Party under this Agreement.

 

1.72            “Target” shall mean the biological target of a pharmacologically active drug compound or epitopes of such biological target.

 

1.73            “Target Pair” shall mean, with respect to compounds being developed under the Collaboration Program, the two (2) Targets that such compound binds. The Target Pair mutually agreed upon by the Parties as of the Effective Date is set forth on Exhibit A.

 

1.74            “Term” has the meaning set forth in Section 11.1.

 

1.75            “Territory” shall mean [***].

 

1.76            “Third Party” shall mean any Person other than Aarvik, ArriVent or their respective Affiliates.

 

1.77            “Third-Party Claim” has the meaning set forth in Section 10.1.

 

1.78            “US Dollars” or “US$” or “$” shall mean United States dollars, the lawful currency of the United States.

 

1.79            “Valid Claim” shall mean a claim contained in (a) an issued and unexpired Patent, which claim has not been found to be unpatentable, invalid, revocable or unenforceable by a decision of a court or other authority of competent jurisdiction in the subject country, which decision is unappealable or unappealed within the time allowed for appeal, and has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer or otherwise; or (b) a pending patent application that has been filed in good faith and that has not been cancelled, withdrawn, or abandoned and has not been pending for more than [***] ([***]) years from the earliest priority date.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.80            “Work Item” shall mean each of the [***] ([***]) components of the Collaboration Program as set forth in Exhibit B.

 

ARTICLE 2
OVERVIEW; GOVERNANCE

 

2.1            Overview. Pursuant to the terms of this Agreement and subject to conditions herein, the Parties will collaborate on the discovery and characterization of novel bispecific ADCs against the Targets in the Field during the Research Term with a goal to identify ADCs that may be suitable for further development by ArriVent. Specifically, with respect to the Collaboration Program, Aarvik will apply the Aarvik IP, in accordance with the applicable SOW, to identify the lead drug candidates that are suitable for further preclinical development.

 

2.2            Establishment of Joint Research Committee. Promptly and in any event within [***] ([***]) days after the Effective Date, Aarvik and ArriVent shall establish and convene a joint steering committee (“JRC”) to oversee and coordinate the Collaboration activities of the Parties during the Research Term in accordance with this Agreement. The JRC shall initially consist of two (2) representatives designated by each Party, whose names and contact details are set forth in Exhibit C. Each party will also designate an alliance manager who will be a non-voting representative but will oversee the functioning of the JRC (the “Alliance Manager”). The Parties may agree to increase or decrease the number of representatives that each Party may appoint on the JRC, provided that each Party has the same number of representatives. The JRC may invite non-members (including other employees of the Party and/or scientific consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JRC, provided that such participants shall have no voting authority at the JRC. The chairperson of the JRC shall be ArriVent’s representative. The chairperson, together with the Alliance Manager, shall be accountable for: (a) calling meetings of the JRC; (b) preparing and issuing minutes of each such meeting within [***] ([***]) days thereafter, and (c) preparing and circulating an agenda for the upcoming meeting, but shall have no additional rights or authority over other JRC members. Each Party shall be free to change its representatives on written notice to the other or to send a substitute representative to any JRC meeting; provided that each Party shall ensure that, at all times during the existence of the JRC, its representatives on the JRC are appropriate in terms of expertise and seniority (including at least one member of senior management) for the then-current stage of the Collaboration.

 

2.3            JRC Responsibilities. The JRC shall provide general oversight on the Collaboration activities during the Research Term and serve to facilitate communications between the Parties, and shall have specific responsibilities for:

 

2.3.1            monitoring activities under each SOW;

 

2.3.2            forming any subcommittee as it or the Parties deem appropriate or necessary, deciding the scope of responsibilities of any subcommittee, supervising the subcommittees and resolving issues and disputes submitted by any subcommittee;

 

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2.3.3            reviewing and recommending any amendments to any SOW (including the proposed research activities and budgets);

 

2.3.4            periodic review of the overall goals and strategy of the Collaboration;

 

2.3.5            providing strategic direction to Aarvik’s activities under the Collaboration to ensure the delivery of Compounds suitable for further preclinical development;

 

2.3.6            reviewing the relevant Data Package(s);

 

2.3.7            discussing the suitability of any Compounds for Development;

 

2.3.8            reviewing and implementing patenting and Intellectual Property Right protection strategies on Compounds and other Collaboration IP;

 

2.3.9            discussing any patentability or freedom-to-operate issue about the Compound(s);

 

2.3.10            facilitating access to and the exchange of information between the Parties related to the Collaboration activities, including monitoring and approving the exchange of relevant information and data between the Parties as required for the performance of any SOW;

 

2.3.11            discussing certain payments described in Section 6.2.2 and 6.2.3 below; and

 

2.3.12            such other responsibilities as may be assigned to the JRC pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

 

2.4            JRC Decision Making.

 

2.4.1            Each Party’s representatives of the JRC shall have collectively one (1) vote. All decisions of the JRC shall be made whenever possible by unanimous vote.

 

2.4.2            Notwithstanding the foregoing, ArriVent shall have the final decision-making authority with respect any “go/no-go” decision pertaining to the Collaboration Program.

 

2.5            JRC Meetings. During the Term, the JRC shall hold at least one (1) meeting per Calendar Quarter at such times during such Calendar Quarter as chairperson elects. Except where a Party fails to appoint a member or members to the JRC, or fails to participate in meetings of the committee, meetings of the JRC shall be effective only if at least one (1) representative of each Party is present or participating. The JRC may meet either (a) in person at either Party’s facilities or at such locations as the Parties may otherwise agree or (b) by audio or video teleconference. Other representatives of each Party involved with the Product may attend meetings as non-voting participants, subject to the confidentiality provisions set forth in Article 8. Additional meetings of the JRC may also be held with the consent of each Party, or as required under this Agreement, and neither Party shall unreasonably withhold its consent to hold such additional meetings. Each Party shall be responsible for all of its own expenses incurred in connection with participating in all such meetings.

 

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2.6            JRC Authority. The JRC shall have only the powers assigned expressly to it in this Article 2 and elsewhere in this Agreement, and shall not have any power to (i) resolve any disputes involving the breach or alleged breach of this Agreement, (ii) amend any allocation of costs between the Parties, or require either Party to expend additional resources, whether internal or external, except as stated under this Agreement, or (iii) amend, modify or waive compliance with or the terms of this Agreement. In furtherance thereof, each Party shall retain the rights, powers and discretion granted to it under this Agreement and no such rights, powers or discretion shall be delegated or vested in the JRC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.

 

2.7            Termination of JRC. Upon the earlier occurrence of (i) the expiration of the Option Period with respect to the Collaboration Program, or (ii) ArriVent’s exercise of the Option with respect to the Collaboration Program, the JRC shall terminate.

 

ARTICLE 3
RESEARCH COLLABORATION

 

3.1            Overview. Aarvik shall conduct Collaboration activities in accordance with the applicable statements of work approved by ArriVent (the “SOWs”), each of which shall set forth the research activities for each Work Item in details. Subject to terms and conditions contained in this Agreement, the Collaboration with respect to the Target Pair shall commence on the Effective Date and end upon the completion of all activities in accordance with the applicable SOWs (the “Research Term”). During the Research Term, Aarvik shall use Commercially Reasonable Efforts to carry out its responsibilities as assigned to it under this Agreement and each SOW and to perform such other obligations as the JRC may assign to it from time to time consistent with this Agreement or the applicable SOW’s. Aarvik shall perform, and/or shall cause its Affiliates and Third Party contractors to perform, its activities under each SOW in compliance with all Applicable Laws and in accordance with good scientific and business practices at all times.

 

3.2            Target Designation.

 

3.2.1            Targets. As of the Effective Date, the Parties have jointly selected the pair of Targets as set forth in Exhibit A for the Collaboration Program.

 

3.2.2            Commencement of Research Activities. Following ArriVent’s approval of an applicable SOW with respect to the Collaboration Program, Aarvik shall commence the research activities set forth in such SOW and the Agreement.

 

3.2.3            Patentability and Freedom-To-Operate. [***] (the “Patentability and FTO Analysis”). Aarvik shall discuss with ArriVent when and how Patentability and FTO Analysis will be conducted prior to the commencement thereof and reasonably consider in good faith all comments provided by ArriVent with respect thereto. Upon completion of the Patentability and FTO Analysis by an outside law firm approved by ArriVent, Aarvik shall cause such law firm to promptly provide ArriVent with the results thereof in writing, including a copy of all search reports related thereto.

 

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3.3            Intentionally Omitted.

 

3.4            SOWs.

 

3.4.1            Aarvik shall (i) prepare a draft SOW for each of the [***] ([***]) Work Items consistent with the terms set forth on Exhibit B and Exhibit D hereto; (ii) submit the [***] to ArriVent for approval no later than [***] ([***]) days before the anticipated commencement date of the [***]; (iii) submit the [***] to ArriVent for approval no later than [***] ([***]) days before the anticipated commencement date of the [***]; and (iv) submit the [***] to ArriVent for approval no later than [***] ([***]) days before the anticipated commencement date of the [***]. Each SOW shall set forth, with respect to the Collaboration Program, (a) agreed activities to be performed by or on behalf of Aarvik; (b) the content of the applicable Data Package, materials and other deliverables to be delivered to ArriVent; (c) timeline for completion of each activity set forth in the SOW; and (d) such other information and/or materials that may be reasonably required by ArriVent.

 

3.4.2            During the Research Term, any updates or amendments to a SOW must be mutually agreed upon in writing by ArriVent and Aarvik. Any such updated and amended SOW will reflect any changes to, re-prioritization of studies within, reallocation of resources with respect to, or additions to, respectively, the then-current SOW. Once approved by the Parties, the amended SOW will become effective for the applicable period on the date approved by the Parties (or such other date as the Parties will specify). Any amended SOW approved by the Parties will supersede, respectively, the previous SOW for the applicable period.

 

3.4.3            During the Research Term, Aarvik shall provide prompt written notice to ArriVent if at any time it believes that it may or is actually running more than [***] ([***]) days ahead or behind the timeline approved by JRC.

 

3.5            Subcontractor; Research Staffing.

 

3.5.1            Aarvik may contract or delegate any portion of its obligations hereunder to its Affiliates or subcontractors; provided that Aarvik shall keep ArriVent informed through the JRC of each subcontract entered into therewith, specifying the name of the contract service provider. Aarvik is responsible for the compliance of its Affiliates and subcontractors with the terms and conditions of this Agreement, and any act or omission of an Affiliate or subcontractor that would be a material breach of this Agreement if performed by Aarvik will be deemed to be a material breach by Aarvik under this Agreement. For clarity, the performance of any obligations of Aarvik by its Affiliates or subcontractors will not diminish, reduce or eliminate any obligation of Aarvik under this Agreement.

 

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3.5.2            Throughout the Research Term, for the Collaboration Program, Aarvik shall assign, and shall cause its Affiliates and subcontractors involved to assign, reasonably sufficient qualified scientist and other resources to perform the work set forth in the SOWs, with the mixture of skills and levels of such scientists to be appropriate to accomplish the scientific objectives of the Collaboration Program. Aarvik shall be solely responsible for managing the performance of its subcontractors. Aarvik shall cooperate with ArriVent in periodically reviewing the performance of the personnel and shall promptly remedy any concerns to ArriVent’s reasonable satisfaction. Aarvik shall promptly select a qualified replacement should any personnel resign or become otherwise unavailable. Before commencing work under this Agreement and any SOW, all Aarvik, its Affiliates and subcontractors personnel must be subject to binding written agreements that are consistent with the terms of this Agreement, including research records (Section 3.6), confidentiality (Article 8) and inventor assignment obligation (Section 7.1.3).

 

3.6            Research Records. Aarvik shall, and shall procure its Affiliates and subcontractors to, maintain complete, current and accurate records of all activities conducted by it under the SOWs, and all data and other information resulting from such activities. Such records shall fully and properly reflect all work done and results achieved in the performance of the Collaboration in good scientific manner. Such records will be maintained in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes and in accordance with Applicable Laws.

 

3.7            Research Collaboration.

 

3.7.1            Aarvik shall carry out the activities of each Work Item and deliver the required Data Package and/or deliverables in accordance with the applicable SOW. Without limiting the generality of the foregoing, Aarvik shall, in accordance with the applicable SOWs and the timeline approved by JRC, apply the Aarvik IP to (i) design and synthesize Collaboration Compounds, and (ii) by itself or through subcontractor(s), [***]. During the Research Term, if any Party identifies any Third Party Patent or Know-How that is necessary or reasonably useful for any activity under the SOWs but has not been included in the Aarvik IP, then such Party shall immediately inform the other Party and the Parties shall discuss in good faith the need of obtaining a license from such Third Party.

 

3.7.2            No later than [***] ([***]) days after completion of the [***], Aarvik shall, to the extent not already provided to ArriVent, deliver the Data Packages and all other deliverables required under the [***], as well as the results of the Patentability and FTO Analysis as described in Section 3.2.3, to ArriVent. ArriVent shall have the sole discretion to decide whether or not to advance any Collaboration Compound and which Collaboration Compound(s) will be advanced for further studies beyond the [***]. ArriVent shall inform Aarvik of its decision in writing. If ArriVent decides to advance the Collaboration Program to [***], ArriVent shall make the payment for the [***] pursuant to Section 6.2.1.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

3.7.3            If, upon completion of the [***] for the Collaboration Program, ArriVent decides not to advance the Collaboration Program to [***], ArriVent may terminate the Collaboration Program. If ArriVent decides to advance the Collaboration Program to [***], ArriVent shall make the payment for the [***] pursuant to Section 6.2.1.

 

3.7.4            No later than [***] ([***]) days after completion of the [***], Aarvik shall, to the extent not already provided to ArriVent, deliver all Data Packages and deliverables required under the [***] to ArriVent. ArriVent shall have the sole discretion to decide whether or not to advance any Collaboration Compound and which Collaboration Compound(s) will be advanced for further studies beyond the [***]. ArriVent shall inform Aarvik of its decision in writing.

 

3.7.5            No later than [***] ([***]) days after completion of the [***], Aarvik shall, to the extent not already provided to ArriVent, deliver all Data Packages and deliverables required under the [***] to ArriVent.

 

3.7.6            Within [***] ([***]) days after completion of the [***], Aarvik shall deliver to ArriVent a full report on all key results and findings of the Collaboration Program, and such other data, results and information as ArriVent may deem necessary for it to determine whether or not to exercise the Option (the “Full Report”).

 

3.8            Selection of Candidates for Further Development. The Parties shall discuss at the JRC whether any Compound is suitable for progression to further development beyond the Collaboration. Notwithstanding the foregoing, ArriVent shall have the sole discretion to decide whether or not to advance any Compound and which Compound(s) it will advance for further development beyond the Collaboration.

 

3.9            Option; Exclusive License for Development and Commercialization. Aarvik hereby grants ArriVent an exclusive option to obtain the exclusive license described in Section 5.1 and acquire the right to the applicable Collaboration IP (the “Option”). With respect to the Collaboration Program, ArriVent may exercise such Option by serving a written notice to Aarvik at any time within [***] ([***]) days after ArriVent’s receipt of the Full Report for the Collaboration Program (or such longer period as the Parties may agree) (the “Option Period”). Upon ArriVent’s exercise of the Option, (a) [***]; (b) the license granted by Aarvik to ArriVent under Section 5.1 shall become effective; and (c) ArriVent will have the exclusive right and sole responsibility, at its sole cost and expense, to Develop, Manufacture ([***]) and Commercialize any Compound and Product against the applicable Targets in the Field in the Territory in accordance with Article 4.

 

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ARTICLE 4
DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION

 

4.1            Overview. If ArriVent exercises the Option for the Collaboration Program, ArriVent will have the exclusive right and sole responsibility and decision-making authority, at its sole cost and expense, to Research, Develop, Manufacture and Commercialize any applicable Compound and Product in the Field in the Territory, in each case, by itself or through one or more Affiliates, Sublicensees or other Third Parties.

 

4.2            Development Key Milestones.

 

4.2.1            Subject to terms and conditions hereof, ArriVent will use Commercially Reasonable Efforts to (a) file an IND with respect to a Product within twenty-four (24) months after completion of the Initial Transfer; and (b) initiate a Phase 2 Clinical Trial within (24) months after completion of a Phase 1 Clinical Trial or a Phase 2b Clinical Trial within twenty-four (24) months after completion of a combined Phase 1/2 a Clinical Trial (the “Key Milestones”). Subject to Aarvik’s prior written consent (not to be unreasonably withheld, conditioned or delayed), any of the foregoing timelines may be extended for scientific, technical or regulatory reason, force majeure event as set forth in Section 13.6, reason not attributable to ArriVent or any other relevant reason (whether or not the same kind of reason as or similar to those aforementioned). The Parties hereby agree that ArriVent will not be deemed to be in breach of its obligations under this Section 4.2 to the extent it is prevented from or delayed in using Commercially Reasonable Efforts to perform an activity as a result of the acts or omissions of Aarvik, including Aarvik’s breach of any of its obligations under this Agreement or failure to timely perform its obligations under this Agreement. If ArriVent fails to timely achieve a Development Key Milestone as a result of Aarvik’s failure to timely perform any of its obligations under this Agreement, then the deadlines for the applicable Key Milestones will be extended to commensurate with the delay caused by Aarvik. For the purposes of this Agreement, a clinical trial is deemed to be completed upon generation of a clinical study report (CSR) for such clinical trial.

 

4.2.2            If ArriVent fails to use Commercially Reasonable Efforts to achieve the Key Milestones for the Target Pair in accordance with the timeline, as may be extended, ArriVent will assign back to Aarvik the right to the Collaboration IP related to the Target Pair that Aarvik assigned to ArriVent pursuant to Section 7.1.2(b), following which Aarvik will solely own such Collaboration IP related to the Target Pair. Notwithstanding anything to the contrary contained in this Agreement, such assignment will be Aarvik’s sole and exclusive remedy for any failure of ArriVent to use Commercially Reasonable Efforts to achieve the Key Milestones.

 

4.3            Regulatory Responsibilities. As between the Parties, ArriVent shall have the exclusive right and sole responsibility and decision-making authority, to prepare, file, seek and maintain all regulatory materials necessary for the Development and Commercialization of any Compound or Product in the Field in the Territory, and to interact with Regulatory Authorities in connection therewith. Without limiting the foregoing, ArriVent will, as between the Parties, be solely responsible for all regulatory matters relating to any Compound or Product, including (a) overseeing, monitoring and coordinating all regulatory actions, communications and filings with, and submissions to, each Regulatory Authority with respect to any Compound or Product; and (b) interfacing, corresponding and meeting with each Regulatory Authority with respect to any Compound or Product. Aarvik shall, at ArriVent’s cost, provide reasonable assistance to ArriVent in connection with the regulatory matters related to any Compound or Product upon ArriVent’s request.

 

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ARTICLE 5
LICENSES AND EXCLUSIVITY

 

5.1            Licenses from Aarvik to ArriVent. Aarvik hereby grants to ArriVent, effective as of the date on which ArriVent exercises the Option, an exclusive (even as to Aarvik), sub-licensable license under the Aarvik IP for the Research, Development, Manufacture, use, Commercialization or other Exploitation of the ADCs related to the Target Pair in the Field in the Territory. Such license shall apply to no other use or purpose by ArriVent or its Sublicensees. Notwithstanding anything in this Agreement to the contrary, but subject to the restrictions set forth in Section 5.4 below, Aarvik shall be entitled to freely use all payloads and linker-payloads utilized in connection with the Products for any and all other purposes.

 

5.2            Sublicense Rights. ArriVent will have the right to grant sublicenses (through multiple tiers) to its Affiliates and to Third Parties, in each case, of any and all rights granted to ArriVent by Aarvik pursuant to Section 5.1 without consent or approval of Aarvik. ArriVent will inform Aarvik of any sublicense arrangement with any Third Party in writing within [***] ([***]) days after the grant of the sublicense.

 

5.3            Transfer of Documentation. Within [***] ([***]) days after ArriVent exercises the applicable Option, Aarvik shall provide ArriVent with a copy of all then existing documentation and other materials within (i) Aarvik Know-How for ArriVent or its sublicensees to exercise the rights and license granted to ArriVent under this Agreement, and (ii) Collaboration IP, in each case of (i) and (ii), to the extent that they have not been previously provided to ArriVent (the “Initial Transfer”). During the Term, Aarvik shall promptly provide ArriVent with a copy of all documentation and other materials within (I) Aarvik Know-How for ArriVent or its sublicensees to exercise the rights and license granted to ArriVent under this Agreement, and (II) Collaboration IP which, in each case of (I) and (II), comes into existence following the Initial Transfer.

 

5.4            Exclusivity. Notwithstanding anything to the contrary in this Agreement, unless otherwise agreed in writing by ArriVent:

 

(a)            before the end of the Option Period or ArriVent’s exercise of the Option for the Collaboration Program (whichever the earlier), Aarvik shall not, and shall cause its Affiliates not to, directly or indirectly, by itself or with, through or in collaboration with any Third Party, whether through license, assignment, joint venture, investment or otherwise (including via any arrangement or series of arrangements with a Third Party), Research, Develop, use, Manufacture or Commercialize (i) any ADC against the Target Pair of the Collaboration Program, or any product containing such ADC, or (ii)  [***], or any product containing such ADC, in each case of (i) and (ii), other than pursuant to this Agreement; and

 

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(b)            in the event that ArriVent exercises the Option with respect to the Collaboration Program pursuant to Section 3.9, before the end of the Term, Aarvik shall not, and shall cause its Affiliates not to, directly or indirectly, by itself or with, through or in collaboration with any Third Party, whether through license, assignment, joint venture, investment or otherwise (including via any arrangement or series of arrangements with a Third Party), Research, Develop, use, Manufacture or Commercialize (i) any ADC against the Target Pair of the Collaboration Program, or any product containing such ADC, or (ii) [***], or any product containing such ADC.

 

5.5            Preservation of Existing In-License Agreements. Aarvik shall, and shall ensure that its Affiliates shall, maintain, if any, the Existing In-License Agreements in full force and effect in accordance with their terms and conditions and keep ArriVent reasonably informed in this regard. Without limiting the foregoing, Aarvik shall not, without ArriVent’s prior written consent, (a) commit any acts or permit the occurrence of any omissions that would cause breach or termination of the Existing In-License Agreements or would adversely affect, or otherwise conflict with or limit the scope of, any of the rights of or licenses granted to ArriVent under this Agreement, or (b) amend or otherwise modify, waive, or terminate, or permit to be amended, modified, waived or terminated, any provision of the Existing In-License Agreements that would adversely affect, or otherwise conflict with or limit the scope of, any of the rights of or licenses granted to ArriVent under this Agreement. In the event that any Existing In-License Agreement terminates for whatever reason or Aarvik becomes aware that any Existing In-License Agreement will terminate, Aarvik shall promptly use commercially reasonable efforts to facilitate ArriVent or any of its Affiliates entering into an agreement with the licensor under such Existing In-License Agreement to enable ArriVent to continue practicing the rights granted hereunder on the same terms and conditions without interruption. Except as set forth in Section 5.6.1 below, the Parties acknowledge and agree that Aarvik shall be solely responsible for, and shall promptly discharge, any and all payments payable pursuant to the Existing In-License Agreements.

 

5.6            [***].

 

5.6.1            Payments to [***]. After ArriVent exercises the Option with respect to the Collaboration Program pursuant to Section 3.9, in addition to the costs for the manufacture and supply of the applicable materials (if any) to be paid to [***], ArriVent shall be solely responsible to [***] for, and shall promptly discharge, the royalty of [***]% of the annual net sales of the Products under section 2.2(c) of the [***] (if applicable).

 

5.6.2            [***]. Aarvik hereby represents, warrants and covenants that Aarvik is entitled to exercise the [***] with respect to the Collaboration Program. Aarvik hereby assigns the [***] with respect to the Collaboration Program to ArriVent (it being understood that Aarvik shall no longer have the right to exercise the [***] with respect to the Collaboration Program and ArriVent may exercise the [***] with respect to the Collaboration Program by serving a written notice to [***] directly at any time). For clarity, such option shall not apply to any program other than the Collaboration Program hereunder, and any exercise of such option shall not preclude Aarvik from exercising any option with [***] for any program other than the Collaboration Program or utilizing payload and linkers used in the Collaboration Program for any program other than the Collaboration Program. ArriVent hereby covenants that it will not exercise the [***] with respect to the Collaboration Program unless and until it exercises the Option with respect to the Collaboration Program in accordance with Section 3.9 of this Agreement. Upon ArriVent’s exercise of the [***] with respect to the Collaboration Program pursuant to section 2.2(c) of the [***], Aarvik shall (and/or cause [***] to, as the case may be) (a) immediately transfer all Manufacturing Know-How related to the Collaboration Program directly to ArriVent or its designee(s), and (b) enter into a manufacturing technology transfer agreement with ArriVent, pursuant to which Aarvik and/or [***] (as the case may be) shall provide, at ArriVent’s cost, such support and assistance as ArriVent may request, in each of (a) and (b) above, in order for ArriVent or its designee(s) to Manufacture the relevant Compounds and Products in substantially the same manner as [***] Manufactures such Compounds and Products.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

5.6.3            Supply for Registration Trial or Commercial Use. Aarvik shall ensure that if ArriVent exercises the [***] with respect to the Collaboration Program, ArriVent shall have the right to Manufacture, or have Manufactured by any of its Affiliate or any Third Party, any and all Compounds (including any component thereof) and Products within the Collaboration Program for commercial use or for use in any Phase 3 Clinical Trial or Registration Trial (whether or not denominated a “Phase 3” clinical trial under applicable regulations).

 

5.6.4            Manufacturing Criteria. Aarvik represents, warrants and covenants that if [***] fails to demonstrate that it has met all the Manufacturing Criteria (as defined in the [***] Agreement) and such other terms to be defined in a Quality agreement between ArriVent and [***] in advance with respect to any of the Compounds or Products within the Collaboration Program no later than [***] ([***]) months prior to the date on which ArriVent intends to file the first IND with respect to the Collaboration Program to any Regulatory Authority: (a) the license granted to ArriVent under Section 5.1 of this Agreement shall automatically include all Manufacturing rights with respect to the ADCs (including any component thereof) related to the Target Pair of the Collaboration Program; (b) following ArriVent’s exercise of the Option for the Collaboration Program pursuant to Section 3.9 of this Agreement, ArriVent shall have the right to Manufacture, or have Manufactured by any of its Affiliate or any Third Party, any and all Compounds (including any component thereof), Products and other materials within the Collaboration Program for any purpose; and (c) ArriVent shall not be required to pay [***] the royalty of [***]% of the annual net sales of the Products under section 2.2(c) of the [***]. In addition, if [***] fails to demonstrate that it has met all the Manufacturing Criteria as described above, then following ArriVent’s exercise of the Option for the Collaboration Program pursuant to Section 3.9 of this Agreement, Aarvik shall (and/or shall cause [***] to, as the case may be) immediately transfer all Manufacturing Know-How related to the Collaboration Program and enter into a manufacturing technology transfer agreement in accordance with the last sentence of Section 5.6.2 of this Agreement. Aarvik further agrees and covenants that it will share fully and timely with ArriVent all information related to whether [***] has satisfied the Manufacturing Criteria. In the event ArriVent does not agree that [***] has satisfied the Manufacturing Criteria, Aarvik shall cause [***] to agree to select a third party arbitrator that is approved by ArriVent to decide on whether [***] has satisfied the Manufacturing Criteria. If [***] has satisfied the Manufacturing Criteria with respect to the Compounds and Products within the Collaboration Program before [***] ([***]) months prior to the date on which ArriVent intends to file the first IND with respect to the Collaboration Program to any Regulatory Authority, ArriVent will purchase such Compounds or Products manufactured by [***] for use in any Phase 1 Clinical Trial or Phase 2 Clinical Trial (as long as such Phase 2 Clinical Trial is not a Registration Trial).

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

5.6.5            Materials Supplied by [***]. Aarvik hereby agrees that ArriVent may enter into agreement(s) with [***] directly in connection with the Manufacture and supply, quality and other matters of any materials to be Manufactured by or on behalf of [***] and supplied to ArriVent.

 

5.7            Limitation on Modification. ArriVent shall not conduct, nor shall it assist others in conducting, without Aarvik’s prior written consent, any form of (a) reverse engineering or component breakdown for the purpose of evaluating or utilizing the Aarvik IP or the Collaboration IP for any purpose other than as contemplated in this Agreement, or (b) modification of the antibody sequence other than modifications necessary for linker conjugation (which, for the avoidance of doubt, shall be considered a Compound hereunder).

 

ARTICLE 6
PAYMENTS

 

6.1            Collaboration Program Execution Fee. With respect to the Collaboration Program, ArriVent shall pay a one-time payment of [***] US Dollars (US$[***]) upon completion of [***] and delivery of all Data Packages and deliverables required under the [***] to ArriVent.

 

6.2            Research Fee. Except for the [***], ArriVent shall pay Aarvik the research fee for each Work Item prior to the commencement of the applicable SOW. For clarity, ArriVent shall not be required to make payment for any SOW to which it has decided not to proceed pursuant to Section 3.7. For each payment, Aarvik shall issue an invoice to ArriVent and ArriVent shall pay the applicable amount within [***] ([***]) days after Aarvik providing ArriVent with such invoice. Notwithstanding the foregoing, with respect to the Collaboration Program, and provided that no changes are made to the terms applicable to the Collaboration Program as set forth in this Agreement, the Parties hereby agree that:

 

6.2.1            Aarvik may not invoice ArriVent and ArriVent will not be required to pay the research fee for the [***] (US$[***] x [***]% = US$[***]) for the Collaboration Program until ArriVent informs Aarvik in writing that it decides to proceed to the [***] in accordance with Section 3.7.2 or 3.7.3;

 

6.2.2            Subject to the rest of this Agreement (including Section 3.7.3), the total amount of research fees for [***] shall not exceed the amounts listed in Exhibit B (which assumes two lead antibodies are required to be used to generate the tetravalent antibody), plus [***]% overhead. If more than two lead antibodies are required to be used to generate the tetravalent antibody, then ArriVent will further pay to Aarvik the additional expenses actually incurred by Aarvik (plus [***]% overhead) to obtain such additional antibody(ies), provided that Aarvik shall submit to the JRC details regarding such additional costs for discussion in the JRC and for ArriVent’s approval. Subject to the rest of this Agreement (including Section 3.7.3), for each [***], ArriVent will pay to Aarvik the expenses (other than the costs as set forth in Section 6.2.3) actually incurred for such SOW, plus [***]% overhead, which shall not exceed the amount pre-approved by ArriVent prior to the commencement of such SOW pursuant to this Section 6.2.2. The research fee for each [***], as set forth in Exhibit B hereto is the estimated research fee calculated based on expected expenses for such SOW, plus [***]% overhead. In the event the actual expenses for a [***] are anticipated to exceed the applicable amount set forth on Exhibit B hereto, then Aarvik shall (when submitting the applicable SOW to ArriVent pursuant to Section 3.4.1 above) submit to the JRC details regarding such additional costs for discussion in the JRC and for ArriVent’s approval prior and as a condition to commencement of work under such SOW. No later than [***] ([***]) days after completion of each [***], Aarvik will provide ArriVent with a report setting forth in reasonable detail all expenses actually incurred by Aarvik for such SOW, and all documented evidence (including Third Party invoices related thereto). In the event that the sum of all expenses actually incurred by Aarvik for such [***] plus [***]% overhead is less than the amount of research fee ArriVent paid for such SOW prior to the commencement thereof, then such overpayment will be credited against future research fees payable by ArriVent to Aarvik for the subsequent SOWs, or, if no further research fees are to be paid to Aarvik under this Agreement, Aarvik shall promptly repay such overpayment; provided that, if Aarvik completes [***] and delivers all Data Packages and deliverables required thereunder in accordance with Section 3.7, the sum of all research fees payable by ArriVent under this Agreement will not be less than the sum of all estimated research fees as set forth in Exhibit B as of the Effective Date (i.e., US$[***]).

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.2.3            In addition to the research fees set forth in Section 6.2.2, ArriVent shall reimburse Aarvik for any costs actually incurred by Aarvik to procure such amount of [***] (as defined in the [***]) (e.g., materials, shipping and handling, etc.) as Aarvik will actually use in performing the activities under the applicable SOWs; provided that Aarvik shall provide ArriVent with an estimate of such costs for ArriVent’s approval prior to procuring such materials from [***], and the total reimbursement amount under this Section 6.2.3 shall not exceed the amount pre-approved by ArriVent.

 

6.3            Option Exercise Fee. In the event that ArriVent exercises the Option with respect to the Collaboration Program, ArriVent shall pay Aarvik a one-time payment of [***] US Dollars (US$[***]) within [***] ([***]) days after the date on which ArriVent exercises such Option.

 

6.4            Milestone Payments by ArriVent.

 

6.4.1            Development Milestones. Upon achievement of any of the milestone events set forth in the following table, ArriVent shall notify Aarvik of the same and pay to Aarvik a onetime payment of the corresponding milestone payment within [***] ([***]) days after the achievement of the applicable milestone. For clarity, each milestone payment shall be payable only one time for the Target Pair, no Milestone Payment would be payable for subsequent or repeated achievements of the corresponding Milestone Events with respect to the Target Pair and, therefore, the total amount of all milestones for the Target Pair under this Section 6.4.1 will not exceed US$[***].

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Milestone Events	Milestone Payments  (in US Dollars)
1.       [***]	$[***]
2.       [***]	$[***]
3.       [***]	$[***]
Total milestone payments for the Target Pair	$[***]

 

6.4.2            Sales Milestones. After the end of the Calendar Year in which aggregate amount of annual Net Sales of a Product in the Field worldwide first reaches any threshold indicated in the sales milestone events set forth in the following table, ArriVent shall notify Aarvik of the same and pay to Aarvik a one-time payment of the corresponding milestone payment within [***] ([***]) days after the achievement of the applicable milestone. For clarity, each milestone payment shall be payable only one time for a specific Product.

 

Milestone Events	Milestone Payments  (in US Dollars)
1.     The aggregate amount of annual Net Sales of a Product in the Field worldwide first exceeds [***] US Dollars (US$[***])	$[***]
2.     The aggregate amount of annual Net Sales of a Product in the Field worldwide first exceeds [***] US Dollars (US$[***])	$[***]
3.     The aggregate amount of annual Net Sales of a Product in the Field worldwide first exceeds [***] US Dollars (US$[***])	$[***]
Total milestone payment per Product	$[***]

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.5            Royalty Payments by ArriVent.

 

6.5.1            Royalty Rate. Subject to the terms and conditions of this Section 6.5, on a Product-by-Product basis, within [***] ([***]) days after the end of each Calendar Quarter during the Royalty Term, ArriVent shall pay to Aarvik royalties on annual Net Sales of such Product in the Field worldwide during such Calendar Quarter, as calculated by multiplying the applicable royalty rate by the corresponding amount of incremental Net Sales in the Field worldwide, as follows:

 

Net Sales of Product	Royalty Rate
1.     The portion of annual Net Sales of a Product equal to or greater than US$[***] but less than US$[***]	[***]%
2.     The portion of annual Net Sales of a Product equal to or greater than US$[***] but less than         US$[***]	[***]%
3.     The portion of annual Net Sales of a Product equal to or greater than US$[***]	[***]%

 

6.5.2            Royalty Term. Royalties payable under Section 6.5.1 shall be paid by ArriVent, on a Product-by-Product and jurisdiction-by-jurisdiction basis, beginning on the date of the First Commercial Sale of each Product in a jurisdiction and continuing until the earliest of (a) the [***] approval of a Biosimilar Product with respect to such Product in such jurisdiction, (b) the [***] ([***]) anniversary of the date of the First Commercial Sale of such Product in such jurisdiction, and (c) the expiration of the [***] Valid Claim of a Patent contained in the Collaboration IP Covering the Compound contained in such Product in such jurisdiction (the “Royalty Term”).

 

6.5.3            Royalty Reduction. If ArriVent and/or its Affiliates or Sublicensees obtain from a Third Party a license under any Patent right that, absent a license thereunder, would be infringed by the Research, Development, Manufacture, or Commercialization of any Compound or Product in a jurisdiction (i.e., a “blocking patent”), to the extent such infringement arises from or relates to the antibody sequences, linker and/or payloads of such Compound or Product, ArriVent shall (i) notify Aarvik of such license at least [***] ([***]) days prior to the execution of such license and allow Aarvik to provide feedback regarding same within such period prior to execution of such license, and (ii) have the right to deduct [***] percent ([***]%) of any royalty or other payment due under such license with the Third Party from the royalty owing to Aarvik for the applicable Product in such jurisdiction under Section 6.5. Notwithstanding the foregoing, in no event shall the reduction permitted in this Section 6.5.3 reduce the payment due to Aarvik with respect to the sale of the applicable Product in such jurisdiction for any Calendar Quarter by more than [***] percent ([***]%) of the total payment that would have been payable prior to such reduction; provided that any credits earned under this Section 6.5.3 by reason of payments to Third Party licensors that may not be used to offset the royalty payment due to Aarvik as a result of the foregoing limitation may be carried to and applied to reduce royalty payments in future Calendar Quarters.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.6            Financial Records and Audit Rights.

 

6.6.1            Financial Records. Each Party shall, and shall cause its Affiliates and Sublicensees to, keep complete and accurate books and records in sufficient detail for the purpose of determining all amounts payable hereunder and verifying compliance with its payment obligations under this Agreement. Such books and records shall be retained for [***] ([***]) full Calendar Years after the end of the Calendar Year to which such books and records pertain.

 

6.6.2            Audit Rights. Upon [***] ([***]) days prior notice from one party (referred to as the “Requesting Party” in this Section 6.6.2), the other Party will permit, and will cause its Affiliates and Sublicensees to permit, an independent certified public accounting firm of nationally recognized standing selected by the Requesting Party and reasonably acceptable to the other Party, to examine, at the Requesting Party’s sole expense, the relevant books and records of the other Party, its Affiliates and Sublicensees for the sole purpose of verifying the amounts reported by the other Party and payments made by any Party in accordance with Article 6. An audit by the Requesting Party under this Section 6.6.2 will occur not more than once in any Calendar Year and will be limited to the pertinent books and records for any Calendar Year ending not more than [***] ([***]) years before the date of the request. The accounting firm will be provided access to such books and records at the facility(ies) of the other Party, its Affiliates or Sublicensees, as applicable, where such books and records are normally kept and such examination will be conducted during normal business hours. The other Party or the applicable Sublicensee may require the accounting firm to sign a reasonably acceptable non-disclosure agreement before providing the accounting firm with access to facilities or records. Upon completion of the audit, the accounting firm will provide both Parties a written report disclosing any discrepancies with the specific details concerning any such discrepancies. Such accounting firm shall not disclose the other Party’s Confidential Information to the Requesting Party, except to the extent such disclosure is necessary to verify the accuracy of the reports furnished by the other Party in accordance with Section 6.6.1 or the amount of payments by any Party under this Agreement, in which case the Requesting Party’s obligations with respect to such Confidential Information shall be subject to Article 8. If such accounting firm concludes that additional payments were due to the Requesting Party, then the other Party will pay to the Requesting Party such additional payments within [***] ([***]) days of the date the other Party receives such accountant’s written report. Further, if the amount of such underpayments exceeds more than [***] percent ([***]%) of the amount that was properly payable to the Requesting Party, then the other Party will reimburse the Requesting Party for the Requesting Party’s reasonable documented out-of-pocket costs in connection with the audit. If such accounting firm concludes that the other Party overpaid any payments to the Requesting Party, then such overpayments will be credited against future amounts payable by the other Party to the Requesting Party, or, if no further payments are to be made to the other Party under this Agreement, the Requesting Party shall promptly repay such overpayment. Notwithstanding any provision of this Agreement to the contrary, all reports and financial information of the other Party or its Affiliates’ or Sublicensees which are provided to or subject to review by the Requesting Party under this Section 6.6.2 will be deemed to be the other Party’s Confidential Information and subject to the provisions of Article 8.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

 

ARTICLE 7
INTELLECTUAL PROPERTY

 

7.1            Inventorship; Ownership; Collaboration Compounds.

 

7.1.1            Background and Foreground IP. As between the Parties, each Party shall remain the owner and shall retain control of the Intellectual Property Rights that it or any its Affiliates owns or Controls prior to the Effective Date of this Agreement or outside the Collaboration pursuant to this Agreement. Unless otherwise specified in this Agreement, as between the Parties, any and all inventions, discoveries, improvements and other technology that are discovered, made, generated, conceived or reduced to practice in the course of the performance of the activities pursuant to the SOWs under this Agreement shall be owned in accordance with inventorship as determined under United States patent laws.

 

7.1.2            Collaboration IP.

 

(a)            Ownership. As between the Parties, prior to ArriVent’s exercise of the Option with respect to the Collaboration Program, Aarvik shall solely own all right, interest and title in and to the Collaboration IP with respect to the Collaboration Program.

 

(b)            Assignment of Collaboration IP to ArriVent. Effective as of the date on which ArriVent exercises the Option for the Collaboration Program, Aarvik shall assign, for itself and on behalf of its Affiliates, and hereby assigns to ArriVent all their right, title and interest in and to the Collaboration IP with respect to the Collaboration Program.

 

(c)            If ArriVent fails to exercise the Option for the Collaboration Program before the expiration of the Option Period, then Aarvik may grant any Third Party a license under the applicable Collaboration IP for the development and/or commercialization of any compound or product.

 

(d)            If ArriVent fails to use Commercially Reasonable Efforts to achieve the applicable Key Milestones after its exercise of the Option for the Collaboration Program and, as a result, Aarvik regains its ownership interest in such Collaboration IP in accordance with Section 4.2.2, then Aarvik may grant any Third Party a license under such Collaboration IP for the development and/or commercialization of any compound or product.

 

7.1.3            Inventor Assignment Obligation. Aarvik shall cause all of its employees, independent contractors, consultants, Sublicensees and others who perform activities under this Agreement to be under an obligation to assign their rights in any and all Collaboration IP to Aarvik. Aarvik shall promptly disclose to the ArriVent in writing the conception, discovery, development, making, or reduction to practice of any Collaboration IP. Aarvik represents and covenants that all personnel performing any part of the activities under this Agreement are obligated to assign to Aarvik all the inventions, discoveries, improvements, other technology and Intellectual Property Rights that are necessary to enable Aarvik to assign or grant all rights Aarvik purports to assign or grant under this Agreement. Aarvik agrees to provide ArriVent the right to inspect Aarvik’s assignment forms used with its personnel for conformance with Applicable Laws. Aarvik shall cause its independent contractors or consultants to execute and record assignments and other necessary documents consistent with such ownership. Aarvik shall adopt and implement a service invention remuneration and reward policy and pay inventors of inventions generated under this Agreement reasonable remuneration and rewards required under Applicable Law and obtain their acknowledgement of the receipt thereof

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.1.4            Collaboration Compounds. Aarvik shall solely own all right, title and interest in and to any and all Collaboration Compounds until and unless ArriVent exercises the Option for the Collaboration Program, in which case ArriVent shall thereafter solely own all right, title and interest in and to any and all Collaboration Compounds of the Collaboration Program.

 

7.2            Patent Prosecution and Maintenance.

 

7.2.1            Solely-Owned Patents. Subject to Section 7.2.2, as between the Parties, each Party shall have the sole right and responsibility for the filing, prosecution and maintenance of Patents it owns at its sole cost and expense.

 

7.2.2            Prior to Option Exercise. Prior to ArriVent’s exercise of the Option, Aarvik shall have the obligation, through the use of outside counsel approved by ArriVent, to prepare, file, prosecute, and maintain any Patents contained in the Collaboration IP (the “Collaboration Patents”). Aarvik shall keep ArriVent informed of developments with respect to such Collaboration Patents and shall furnish ArriVent with copies of applications for such Collaboration Patents, amendments thereto and other related correspondence to and from patent offices, permit ArriVent a reasonable opportunity to review and offer comments. ArriVent shall reasonably assist and cooperate in prosecuting and maintaining the Collaboration Patents.

 

7.3            Defense.

 

7.3.1            Notice; Solely-Owned Patents. Each Party shall promptly notify the other if it becomes aware of any claim, suit, proceeding or allegation by a Third Party regarding the invalidity or unenforceability of any Collaboration Patent and/or alleging the infringement, violation or misappropriation of any Third Party’s Intellectual Property Rights based on either Party’s activities under this Agreement. Subject to the provisions of this Section 7.3, each Party shall have the sole right, but not the obligation, to defend and control the defense of any such Third Party claim, suit, or proceeding concerning Patents it owns at its own cost and expense, using counsel of its own choice brought against such Party.

 

7.3.2            Prior to the Option Exercise. Prior to ArriVent’s exercise of the Option, Aarvik shall have the first right, but not the obligation, to defend and control the defense of any such Third Party claim, suit, or proceeding concerning any Collaboration Patent at its own cost and expense, using counsel of its own choice; provided, that, if Aarvik decides not to defend any such claim, then Aarvik shall provide reasonable prior written notice to ArriVent of such intention (which notice shall, where reasonably practical, be given no later than [***] ([***]) days prior to the next deadline for any action that may be taken with respect to such suit), and ArriVent shall thereupon have the option to assume the control and direction of the defense, at its sole cost and expense; provided that, in deciding whether to defend such claim, suit, proceeding or allegation, ArriVent shall take into consideration Aarvik’s business reasons for deciding not to defend such claim, suit, proceeding or allegation.

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.3.3            Cooperation. In the event the Party controlling the defense in accordance with this Section 7.3 (the “Controlling Party”) finds it necessary or desirable for the other Party (the “Non-Controlling Party”) to join the Controlling Party as a party to any such action, the Parties shall cooperate to execute all papers and perform such acts as shall be reasonably required for the Non-Controlling Party to join such action, all at the Controlling Party’s sole cost and expense; provided that the Non-Controlling Party may be represented by its own counsel at the Non-Controlling Party’s discretion and sole cost and expense. Each Party shall keep the other Party reasonably informed of all material developments in connection with any such claim, suit, or proceeding set forth in this Section 7.3. Regardless of whether the Non-Controlling Party is joined as a party to an action under this Section 7.3, the Non-Controlling Party agrees to provide reasonable cooperation and assistance of a technical nature which the Controlling Party may require in the defense of any such action.

 

7.3.4            Recovery. Except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described in this Section 7.3 (whether by way of settlement or otherwise) shall be first, allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses). Any remainder after such reimbursement is made shall be retained by the Party that has exercised its right to defend or control the defense of any such Third Party claim, suit or proceeding.

 

7.4            Enforcement.

 

7.4.1            Notice. During the Term, each Party shall promptly notify the other in writing of any alleged or threatened infringement of any Collaboration Patent (each, an “Infringement”).

 

7.4.2            Solely-Owned Patents. Subject to Section 7.4.3, each Party shall have the sole right, but not obligation, to enforce any of the Patents it owns with respect to any Infringement at its cost and sole discretion.

 

7.4.3            Prior to Option Exercise. Prior to ArriVent’s exercise of the Option with respect to the Collaboration Program, [***] shall have the first right, but not the obligation, to enforce any relevant Collaboration Patent, with respect to any such Infringement. In the event that [***] decides not to prosecute any such Infringement of a Collaboration Patent, [***] shall provide reasonable prior written notice to [***] of such intention (which notice shall, where reasonably practical, be given no later than [***] ([***]) days prior to the next deadline for any action that may be taken with respect to such suit), and [***] shall thereupon have the option to assume the control and direction of the prosecution of such Infringement, at its sole cost and expense; provided that, in deciding whether to exercise its option and in prosecuting such Infringement, [***] shall take into consideration [***] business reasons for deciding not to prosecute the infringement.

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7.4.4            Cooperation. In the event a Party prosecutes Infringement of a Patent pursuant to this Section 7.4 (the “Prosecuting Party”) and the Prosecuting Party finds it necessary or desirable for the other Party (the “Non-Prosecuting Party”) to join the Prosecuting Party as a party to any such action, the Non-Prosecuting Party shall, at the Prosecuting Party’s request, join as a party to such claim, suit or proceeding and participate at the Prosecuting Party’s cost and expense; provided that, (i) the Prosecuting Party shall retain control of the prosecution of such claim, suit or proceeding, and (ii) the Non-Prosecuting Party may be represented by its own counsel at the Non-Prosecuting Party’s discretion and sole cost and expense. During any such claim, suit, or proceeding in which the Non-Prosecuting Party has joined pursuant to this Section 7.4.4, the Prosecuting Party shall: (a) provide the Non-Prosecuting Party with drafts of all official papers and statements (whether written or oral) prior to their submission in such claim, suit, or proceeding, in sufficient time to allow the Non-Prosecuting Party to review, consider and substantively comment thereon; (b) reasonably consider taking action to incorporate the Non-Prosecuting Party’s comments on all such official papers and statements; and (c) not settle any such claim, suit, or proceeding that imposes any obligations on the Non-Prosecuting Party. Regardless of whether the Non-Prosecuting Party is joined as a party to an action under this Section 7.4.4, the Non-Prosecuting Party agrees to provide reasonable cooperation and assistance of a technical nature which the Prosecuting Party may require in the prosecution of any such action.

 

7.4.5            Recovery. Except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described in this Section 7.4 (whether by way of settlement or otherwise) shall be first allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses). Any remainder after such reimbursement is made shall be retained by the Party that has exercised its right to enforce the Infringement.

 

7.5            Patent Listing. After ArriVent exercises the Option, as between Parties, ArriVent shall have full decision-making power and responsibility for performing all patent listing acts and requirements with respect to any Patents that claim either: the active drug substance of the applicable Compound, the applicable Product itself (formulation and composition), or an approved method of use for the applicable Product that have become the subject of an MAA submitted to any applicable Regulatory Authority, all so-called “Patent Register” listings as required in Canada, all acts required of the Reference Product Sponsor under the US Biologicals Price Competition and Innovation Act of 2009 (42 U.S.C. § 262) (“Biologics Act”), or any foreign equivalents thereof. Aarvik shall cooperate with ArriVent, as required, to perform any of the above-referenced listing acts.

 

7.6            Trademarks. ArriVent shall have the sole right and be solely responsible for the selection of all trademarks which it employs in connection with a Product worldwide and shall own and control such trademarks. ArriVent shall be responsible for registration and maintenance of all such trademarks. Nothing in this Agreement shall be construed as a grant of rights, by license or otherwise, to Aarvik to use such trademarks or any other trademarks owned by ArriVent for any purpose. ArriVent shall own such trademarks and shall retain such ownership upon termination or expiration of this Agreement.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

ARTICLE 8
CONFIDENTIALITY

 

8.1            Confidentiality Obligation. At all times during the Term and for a period of [***] ([***]) years following the expiration or termination of this Agreement in its entirety, each Party shall, and shall cause its Representatives and Affiliates to, keep confidential and not publish or otherwise disclose to a Third Party and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is reasonably necessary or useful for the performance of, or the exercise of such Party’s rights under, this Agreement. “Confidential Information” means any technical, business, or other information provided by or on behalf of one Party to the other Party in connection with this Agreement, whether prior to, on, or after the Effective Date, including information relating to the terms of this Agreement, any research and development contemplated under this Agreement, any Know-How with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of either Party. The Parties hereby agree that any Know-How generated under the SOWs for the Collaboration Program shall be considered Confidential Information of both Parties unless and until ArriVent exercises the Option for the Collaboration Program under which such Know-How was generated, in which case such Know-How shall be deemed Confidential Information of ArriVent only (it being understood that Aarvik shall keep such Know-How confidential in accordance with this Article 8 before and after ArriVent exercises the applicable Option, whereas ArriVent shall keep such Know-How confidential in accordance with this Article 8 only before ArriVent exercises the applicable Option). The confidentiality and non-use obligations under this Section 8.1 with respect to any Confidential Information shall not include any information that:

 

8.1.1            is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the receiving Party;

 

8.1.2            can be demonstrated by documentation or other competent proof to have been in the receiving Party’s possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information;

 

8.1.3            is subsequently received by the receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

 

8.1.4            has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party in breach of this Agreement; or

 

8.1.5            has been independently developed or acquired by the receiving Party or any of its Affiliates without the aid, application or use of the disclosing Party’s Confidential Information.

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

 

8.2            Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is:

 

8.2.1            made by or on behalf of the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for an approval or authorization of a Product; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information to the extent practicable and consistent with Applicable Law;

 

8.2.2            made by or on behalf of the receiving Party in response to a valid order of a Governmental Authority of competent jurisdiction or, if in the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by Applicable Law (including, for clarity, any disclosure required by Applicable Law on clinicaltrials.gov or disclosure required by reason of filing with securities regulators); provided, however, that the receiving Party shall first have given notice to the disclosing Party and given the disclosing Party (a) a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject of any such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued and (b) a right to review and comment upon such disclosure, which comments shall be considered in good faith by the receiving Party; and provided further that the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

 

8.2.3            made by or on behalf of the receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining, enforcing or defending a Patent pursuant to the terms of this Agreement in a manner not inconsistent with Article 7; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available;

 

8.2.4            made by the receiving Party or its Affiliates, Sublicensees or subcontractors to its or their attorneys, auditors, advisors, consultants or contractors; provided, however, that such persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 8 (with a duration of confidentiality and non-use obligations as appropriate that is no less than [***] ([***]) years from the date of disclosure);

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

8.2.5            made by or on behalf of the receiving Party where such disclosure is required by a Regulatory Authority (including in filings with the Securities and Exchange Commission or other agency) of certain material developments or material information generated under this Agreement, or the terms of this Agreement, and agrees that each Party may make such disclosures as required by Applicable Law; provided that, to the extent permitted, the Party seeking such disclosure first provides the other Party a copy of the proposed disclosure; and provided, further, that the receiving Party shall afford to the other Party an opportunity to review and comment, which period shall be no less than [***] ([***]) Business Days, including to propose redactions to the terms of this Agreement, and the receiving Party shall accept any reasonable comments so provided; or

 

8.2.6            made by the receiving Party to potential or actual investors, acquirors, collaborators, business partners, licensees/Sublicensees, legal or financial advisors; provided, however, that such persons shall be subject to obligations of confidentiality and non-use with respect to such Confidential Information substantially similar to the obligations of confidentiality and non-use of the receiving Party pursuant to this Article 8 (with a duration of confidentiality and non-use obligations as appropriate that is no less than [***] ([***]) years from the date of disclosure).

 

8.3            Use of Name. Except as expressly provided herein, neither Party shall mention or otherwise use the name, logo, or trademark of the other Party or any of its Affiliates (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material, or other form of publicity without the prior written approval of such other Party in each instance. The restrictions imposed by this Section 8.3 shall not prohibit either Party from making any disclosure identifying the other Party that is required by Applicable Law.

 

8.4            Public Announcements. The Parties shall agree on the timing and content of any press release and shall coordinate in order to accomplish such release at a mutually agreed time following execution of this Agreement. Neither Party shall issue any other public announcement, press release, or other public disclosure regarding this Agreement or its or their subject matter without the other Party’s prior written consent, except for any such disclosure that is, in the opinion of the disclosing Party’s counsel, required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted).

 

8.5            Publications.

 

8.5.1            Aarvik shall not, without the prior written consent of ArriVent, publish any papers or make any oral presentations or otherwise disclose publicly or to any collaborator (such papers, oral presentations and disclosures, including abstracts of any of the foregoing, “Publications”): (a) any Confidential Information of ArriVent, (b) any information related to any Target, Compound or Product of the Collaboration Program before the expiration of the Option Period therefor, or (c) the results of or any other information regarding activities pursuant to the Collaboration of the Collaboration Program before the expiration of the Option Period therefor, in each case, except as required by Applicable Law, in which case Section 8.2.2 shall apply.

  

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

8.5.2            Subject to Section 8.5.3, (a) Aarvik may make Publications relating specifically and exclusively to the Aarvik’s proprietary ADC drug discovery platform (excluding the information set forth in Section 8.5.1); (b) ArriVent may, in its discretion, make Publications regarding any Target, Compound, Product or any activities pursuant to the Collaboration after ArriVent exercises the Option for the Collaboration Program (excluding information specifically and exclusively to Aarvik’s proprietary ADC drug discovery platform), provided that Aarvik’s advance review and written approval shall be required with respect to publications of any data generated within the Collaboration (i.e., data generated prior to ArriVent’s exercise of the Option for the Collaboration Program); and (c) if ArriVent elects not to exercise the Option, Aarvik may, in its discretion, make Publications regarding any Target, Compound or any activities pursuant to the Collaboration of the Collaboration Program after the expiration of the Option Period.

 

8.5.3            At least [***] ([***]) days prior to publishing any Publication, the publishing Party shall provide the other Party with a draft copy thereof for its review. The publishing Party shall consider in good faith any comments provided by the other Party during such [***] ([***])-day period. In addition, the publishing Party shall, at the other Party’s reasonable request, remove therefrom any Confidential Information of the other Party. The contribution of each Party shall be noted in all publications or presentations by acknowledgment or co-authorship, whichever is appropriate.

 

8.6            Return of Confidential Information. Upon the effective date of the termination of this Agreement, the receiving Party shall, at the disclosing Party’s election, either, with respect to Confidential Information to which the receiving Party does not retain rights under the surviving provisions of this Agreement: (a) promptly destroy all copies of such Confidential Information in the possession of the other Party and confirm such destruction in writing to the requesting Party; or (b) promptly deliver to the requesting Party, at the other Party’s cost and expense, all copies of such Confidential Information in the possession of the other Party; provided, however, the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations hereunder or for archival purposes. Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party’s standard archiving and back-up procedures, but not for any other use or purpose. All Confidential Information shall continue to be subject to the terms of this Agreement for the period set forth in Section 8.1 by which time, unless otherwise expressly permitted in this Section 8.6, the receiving Party shall have returned or destroyed any Confidential Information remaining in its possession and shall have no right to use or disclose such Confidential Information.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

ARTICLE 9
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

9.1            General Representations and Warranties. Each Party represents and warrants to the other that, as of the Effective Date, and covenants, that:

 

9.1.1            it is duly organized and validly existing under the Applicable Laws of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

 

9.1.2            it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;

 

9.1.3            this Agreement is legally binding upon it and enforceable in accordance with its terms. To the Party’s knowledge, the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Applicable Law;

 

9.1.4            it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or threatens the validity of this Agreement; and

 

9.1.5            in the performance of its obligations under this Agreement, it shall comply and shall cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws, rules and regulations, including all export control, anti-corruption and anti-bribery laws and regulations, and shall not cause such other Party’s Indemnitees to be in violation of any Applicable Laws or otherwise cause any reputational harm to such other Party.

 

9.2            Aarvik’s Additional Representations, Warranties and Covenants. Aarvik represents and warrants to ArriVent as of the Effective Date and as of the date on which ArriVent exercises any Option, and covenants, that:

 

9.2.1            Aarvik Controls the Aarvik IP, and no Third Party has any right, interest or claim in or to such rights that would limit the rights granted to ArriVent under this Agreement;

 

9.2.2            Aarvik IP includes all Patents and Know-How licensed to Aarvik or any of its Affiliates under the Existing In-License Agreements;

 

9.2.3            except Aarvik IP, Aarvik or its Affiliates do not own or Control any further Patents or Know-How that is necessary or useful for the research, Development, Manufacture, use or Commercialization of any Compound or Product in the Field;

 

9.2.4            Aarvik is the sole and exclusive owner or licensee of the entire right, title and interest in the Aarvik IP and such Aarvik IP are free of any encumbrance, lien, or claim of ownership by any Third Party;

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

9.2.5            Aarvik is entitled to grant the licenses pursuant to Section 5.1 and assign to ArriVent the right, title and interest in the Collaboration IP pursuant to Section 7.1.2(b) and it has not granted, and shall not grant during the Term, any Third Party rights and has not taken, and shall not take during the Term, any other action which would be inconsistent or interfere with ArriVent’s rights hereunder;

 

9.2.6            to the extent any Aarvik IP are in-licensed, Aarvik has not received any notice alleging that it is in material breach of any term of such in-license agreement, and covenants, during the Term, that it (a) shall use Commercially Reasonable Efforts not to commit any acts or permit the occurrence of any omissions that would cause a material breach or the termination of any in-license agreement, and (b) shall not amend or otherwise modify or permit to be amended or modified any in-license agreement in such a manner as could materially adversely affect ArriVent’s rights hereunder;

 

9.2.7            there is no legal action by any Third Party (and Aarvik is not aware of any grounds therefor), and Aarvik and its Affiliates have not received any written claim or demand, alleging that (a) any Intellectual Property Rights of a Third Party would be infringed by the Compounds, the Products, or the use of Aarvik IP under this Agreement; or (b) any Intellectual Property Rights licensed by Aarvik to ArriVent under this Agreement are not valid or subsisting;

 

9.2.8            to the best of Aarvik’s knowledge and its Affiliates, no Third Party is infringing or misappropriating any Aarvik IP;

 

9.2.9            there are no settled, pending or threatened Third Party opposition or interference proceedings, nor any litigation or claim with respect to the Aarvik Patents;

 

9.2.10            Aarvik and its Affiliates have, to the extent any of them have disclosed Aarvik Know-How to a Third Party, done so pursuant to non-disclosure or confidentiality agreements and have otherwise taken commercially reasonable measures consistent with industry practices to protect the secrecy, confidentiality and value of Aarvik Know-How, and to Aarvik’s knowledge, there has not been any misappropriation of Aarvik Know-How by any Third Party;

 

9.2.11            it has obtained or shall obtain written agreements from each of its employees, consultants and contractors who perform Collaboration and other activities pursuant to this Agreement, which agreements shall obligate such persons to obligations of confidentiality and non-use and to assign Inventions in a manner consistent with the provisions of this Agreement;

 

9.2.12            neither it nor any of its or its Affiliates’ employees or agents performing under this Agreement has ever been, or is currently: (a) debarred under 21 U.S.C. § 335a or by any Regulatory Authority; (b) excluded, debarred, suspended, or otherwise ineligible to participate in federal health care programs or in federal procurement or non-procurement programs; (c) listed on the FDA’s Disqualified and Restricted Lists for clinical investigators; or (d) convicted of a criminal offense that falls within the scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or otherwise declared ineligible. Aarvik further covenants that if, during the Term of this Agreement, it becomes aware that it or any of its or its Affiliates’ employees or agents performing under this Agreement is the subject of any investigation or proceeding that could lead to it becoming a debarred entity or individual, an excluded entity or individual or a convicted entity or individual, it will promptly notify ArriVent. This provision will survive termination or expiration of this Agreement; and

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

9.2.13            (a) except for [***], neither Aarvik nor any of its Affiliates, on the one hand, is party to an agreement with any Third Party, on the other hand, pursuant to which Aarvik or its Affiliate has (i) in-licensed any Patents or Know-How that are included as part of the Aarvik IP or (ii) agreed to provisions that would require ArriVent to undertake or observe any restrictions or obligations with respect to the Research, Development, Manufacture, use, Commercialization or other Exploitation of the ADCs related to any Target Pair in the Field in the Territory; (b) the [***] is in full force and effect and has not been amended, modified or waived; and (c) a redacted copy of the fully executed [***] has been provided to ArriVent prior to the Effective Date and the redacted provisions thereunder are irrelevant to and unnecessary for ArriVent to ascertain ArriVent’s rights and obligations under this Agreement or the [***] as a sublicensee thereunder. Aarvik hereby covenants not to enter into any amendment to the [***] that might affect ArriVent’s rights or obligations under this Agreement or the [***] in any respect and it will provide ArriVent with a copy of any amendment to the [***] within [***] ([***]) days after execution thereof; provided that Aarvik may redact the provisions in the amendment that are irrelevant to or unnecessary for ArriVent to ascertain its rights and obligations under this Agreement or the [***].

 

9.3             No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY. ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

 

ARTICLE 10
INDEMNIFICATION

 

10.1            Indemnification by Aarvik. Aarvik hereby agrees to defend, hold harmless and indemnify (collectively, “Indemnify”) ArriVent and its Affiliates, and its and their agents, directors, officers and employees (the “ArriVent Indemnitees”) from and against any liability or expense (including reasonable legal expenses and attorneys’ fees) (collectively, “Losses”) resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a “Third-Party Claim”) arising out of: (a) any activity conducted by or on behalf of Aarvik in breach of this Agreement or of any Applicable Laws, (b) the breach or violation of any covenant or Aarvik’s obligations under this Agreement, including Aarvik’s representations, warranties or covenants set forth herein, (c) the willful misconduct or negligent acts of or violation of Applicable Law by any Aarvik Indemnitee, or (d) any circumstances or activities for which [***] is obligated to indemnify Aarvik and its related Persons under the [***]. Aarvik’s obligation to Indemnify the ArriVent Indemnitees pursuant to this Section 10.1 shall not apply to the extent that any such Losses are Losses for which ArriVent is obligated to Indemnify the Aarvik Indemnitees pursuant to Section 10.2.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

10.2            Indemnification by ArriVent. ArriVent hereby agrees to Indemnify Aarvik and its Affiliates, and its and their agents, directors, officers and employees (the “Aarvik Indemnitees”) from and against any and all Losses resulting from Third-Party Claims arising out of: (a) any activity conducted by or on behalf of ArriVent in breach of this Agreement or of any Applicable Laws, (b) the breach or violation of any covenant or ArriVent’s obligations under this Agreement, including ArriVent’s representations, warranties or covenants set forth herein, or (c) the willful misconduct or negligent acts of or violation of Applicable Law by any ArriVent Indemnitee. ArriVent’s obligation to Indemnify the Aarvik Indemnitees pursuant to this Section 10.2 shall not apply to the extent that any such Losses are Losses for which Aarvik is obligated to Indemnify the ArriVent Indemnitees pursuant to Section 10.1.

 

10.3            Procedure. To be eligible to be indemnified hereunder, the indemnified Party shall provide the indemnifying Party with prompt notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to Section 10.1 or 10.2 and the exclusive ability to defend (with the reasonable cooperation of the indemnified Party) or settle any such claim; provided, however, that the indemnifying Party shall not enter into any settlement that makes any admission on behalf of the indemnified Party without the indemnified Party’s written consent, such consent not to be unreasonably withheld or delayed. The indemnifying Party shall not be liable to indemnify the indemnified Party in respect of any settlement entered into without the prior written consent of the indemnifying Party. The indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the indemnifying Party.

 

10.4            LIMITATION OF CONSEQUENTIAL DAMAGES. EXCEPT FOR BREACH OF SECTION 5.4, ARTICLE 8 OR CLAIMS OF A THIRD PARTY WHICH ARE SUBJECT TO INDEMNIFICATION UNDER THIS ARTICLE 10 OR AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER AARVIK NOR ARRIVENT, NOR ANY OF THEIR AFFILIATES OR SUBLICENSEES SHALL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR ITS AFFILIATES OR ANY OF THEIR SUBLICENSEES FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR OTHER INDIRECT DAMAGES OR LOST OR IMPUTED PROFITS OR ROYALTIES, LOST DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), INDEMNITY OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

ARTICLE 11
TERM AND TERMINATION

 

11.1            Term. This Agreement shall become effective as of the Effective Date. Unless this Agreement is earlier terminated pursuant to the other provisions of this Article 11 or ArriVent elects not to exercise the Option with respect to the Collaboration Program (in which case this Agreement shall expire upon the expiration of the Option Period), this Agreement shall continue in full force and effect, until the expiration of all Royalty Terms for all Products under this Agreement (the “Term”). On a jurisdiction-by-jurisdiction and Product-by-Product basis, following the expiration of the Royalty Term, the license granted to ArriVent under Section 5.1 shall become non-exclusive, perpetual, irrevocable, fully-paid and royalty-free.

 

11.2            Termination by ArriVent for Convenience. At any time after ArriVent exercises the Option, ArriVent shall have the right to terminate this Agreement with respect to the Collaboration Program (a) in its entirety or (b) on a jurisdiction-by-jurisdiction basis, in each case, without cause upon [***] ([***]) days’ prior notice to Aarvik.

 

11.3            Termination for Breach. A Party may terminate this Agreement in the event the other Party materially breaches this Agreement, and such breach shall have continued for [***] ([***]) days after notice thereof was provided to the breaching Party by the non-breaching Party. Any such termination shall become effective at the end of such [***] ([***])-day period unless the breaching Party has cured any such breach prior to the expiration of the [***] ([***])-day period (or, if such breach is capable of being cured but such cure cannot be reasonably effected within such [***] ([***])-day period, the breaching Party delivers to the non-breaching Party a plan for curing such material breach that is sufficient to effect a cure and is reasonably acceptable to the non-breaching Party and the breaching Party thereafter uses commercially reasonable efforts thereafter to carry out the plan and cure the material breach); provided that, if either Party disputes (a) whether such material breach has occurred, or (b) whether the defaulting Party has cured such material breach, the Parties agree to resolve the dispute as expeditiously as possible under Article 12. During the pendency of such a dispute, all of the terms and conditions of this Agreement shall remain in effect and the Parties shall continue to perform all of their respective obligations hereunder.

 

11.4            Termination for Insolvency. Either Party may terminate this Agreement if, at any time, the other Party files in any court or agency pursuant to any statute or regulation of any state or country a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets; or if the other Party proposes a written agreement of composition or extension of substantially all of its debts; or if the other Party will be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition will not be dismissed within [***] ([***]) days after the filing thereof; or if the other Party will propose or be a party to any dissolution or liquidation; or if the other Party will make an assignment of substantially all of its assets for the benefit of creditors.

 

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11.5            Effects of Termination.

 

11.5.1            Wind-Down. Upon termination of this Agreement with respect to the Target Pair, Compound or Product, ArriVent shall use its Commercially Reasonable Efforts to wind down all research, Development, Manufacture and Commercialization (if any) activities with respect to such terminated Target Pair, Compound or Product.

 

11.5.2            General Effects of Termination. Upon any termination of this Agreement with respect to a Target Pair, Compound or Product, subject to the rest of this Article 11, (a) all rights and licenses granted by Aarvik pursuant to Section 5.1 and all obligations of the Parties shall immediately terminate with respect to the applicable terminated Target Pair, Compound or Product and/or jurisdiction, as the case may be, and (b) all Collaboration IP with respect to the applicable terminated Target Pair, Compound or Product shall be transferred and assigned by ArriVent to Aarvik, or, in the event this Agreement is terminated only with respect to a particular jurisdiction (but not all jurisdictions) and a Target Pair, Compound or Product, ArriVent shall grant to Aarvik an exclusive, irrevocable, sublicensable, transferrable and fully paid-up right and license to use the Collaboration IP with respect to the applicable terminated Target Pair, Compound or Product in such jurisdiction for any and all purposes. Notwithstanding the foregoing, subsection (b) of this Section 11.5.2 shall not apply in the event ArriVent terminates this Agreement, whether in whole or in part, pursuant to Section 11.3 or Section 11.4.

 

11.6            Limitations on Termination Remedy.

 

11.6.1            Notwithstanding anything herein to the contrary, in the event that this Agreement is terminated with respect to a Target Pair, Compound or Product pursuant to (a) Section 11.2 for a jurisdiction or (b) Section 11.3 to the extent the material breach affects only a specific jurisdiction, then this Agreement may only be terminated for such Target Pair, Compound or Product in such jurisdiction.

 

11.6.2            For avoidance of doubt, any termination under this Article 11 with respect to a particular Target Pair, Compound or Product or jurisdiction shall have no effect on and shall not in any way limit the licenses granted under this Agreement for any other Target Pair, Compound or Product or any other jurisdiction.

 

11.7            Rights in Bankruptcy.

 

11.7.1            The Parties intend to take advantage of the protections of Section 365(n) (or any successor provision) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction to the maximum extent permitted by Applicable Law. All rights and licenses granted under or pursuant to this Agreement, but only to the extent they constitute licenses of a right to “intellectual property” as defined in Section 101 of the U.S. Bankruptcy Code or in any analogous provisions in any other country or jurisdiction (as the case may be) shall be deemed to be “intellectual property” for the purposes of Section 365(n) or any analogous provisions in any other country or jurisdiction (as the case may be). The Parties shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, including the right to obtain the intellectual property from another entity.

 

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11.7.2            In the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party that is not subject to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) all such intellectual property (including all embodiments of such intellectual property), which, if not already in the non-subject Party’s possession, shall be promptly delivered to it upon the non-subject Party’s written request (i) upon commencement of a bankruptcy proceeding, unless the Party subject to such proceeding continues to perform all of its obligations under this Agreement, or (ii) if not delivered pursuant to clause (i) above because the subject Party continues to perform, upon the rejection of this Agreement by or on behalf of the subject Party.

 

11.7.3            Unless and until the subject Party rejects this Agreement, the subject Party shall perform this Agreement or provide the intellectual property (including all embodiments of such intellectual property) to the non-subject Party, and shall not interfere with the rights of the non-subject Party to such intellectual property, including the right to obtain the intellectual property from another entity.

 

11.7.4            The Parties acknowledge and agree that payments made under Section 6.2, 6.3 or 6.4 are not intended to be and shall not (i) constitute royalties within the meaning of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction or (ii) relate to licenses of intellectual property hereunder.

 

11.8            Accrued Obligations. Expiration or termination of this Agreement for any reason shall not release either Party from any obligation or liability which, at the time of such expiration or termination, has already accrued to the other Party or which is attributable to a period prior to such expiration or termination.

 

11.9            Non-Exclusive Remedy. Unless otherwise specified herein, termination of this Agreement by a Party shall be without prejudice to other remedies such Party may have at law or equity.

 

11.10            General Survival. Section 7.1 (Inventorship; Ownership; Collaboration Compounds), Section 7.6 (Trademarks), Article 8 (Confidentiality), Section 9.3 (No Other Representations or Warranties), Article 10 (Indemnification), Article 11 (Term and Termination), Article 12 (Dispute Resolution), Article 13 (Miscellaneous) shall survive expiration or termination of this Agreement for any reason. Unless expressly provided for as a surviving right or obligation elsewhere in the Agreement, all rights and obligations of the Parties under this Agreement (including the right to receive payments and the obligation to make payments) shall terminate upon expiration or termination of this Agreement for any reason.

 

11.11            Return of Materials. Upon termination or expiration of this Agreement or termination of the Collaboration Program or Target Pair, subject to Section 8.6, each Party shall destroy all tangible items comprising, bearing or containing any Confidential Information of the other Party that are in its or its Affiliates’ possession or control that relate to the applicable terminated Collaboration Program or Target Pair, and provide written certification of such destruction, or prepare such tangible items of Confidential Information for shipment to the other Party, as the other Party may direct, at the other Party’s expense; provided that such Party may retain one copy of such Confidential Information for its legal archives. For clarity, the foregoing obligation to return shall not be applicable to jointly-owned Confidential Information (including materials).

 

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ARTICLE 12
DISPUTE RESOLUTION

 

12.1            Disputes. Matters before the JRC shall be governed by the process specified in Article 2. Any controversy, claim or dispute arising out of or relating to this Agreement that is not subject to Article 2 shall be settled, if possible, through good faith negotiations between the Parties. If the Parties are unable to resolve any dispute or other matter arising out of or in connection with this Agreement, either Party may, by written notice to the other, have such dispute referred to the Executive Officers of the Parties for attempted resolution by good faith negotiations within [***] ([***]) days after such notice is received. In such event, each Party shall cause its Executive Officer to meet (face-to-face or by teleconference) and be available to attempt to resolve such issue. If the Parties should resolve such dispute or claim, a memorandum setting forth their agreement shall be prepared and signed by both Parties if requested by either Party. The Parties shall cooperate in an effort to limit the issues for consideration in such manner as narrowly as reasonably practicable in order to resolve the dispute.

 

12.2            Exceptions. For clarity, Article 12 shall not apply to any matters with respect to the validity, enforceability or infringement of a patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory.

 

12.3            Arbitration. Any dispute, controversy or claim arising under, out of or relating to this contract and any subsequent amendments of this contract, including, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual claims, shall be referred to and finally determined by arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce. The arbitral tribunal shall consist of three arbitrators. The place of arbitration shall be New York, the United States. The language to be used in the arbitral proceedings shall be English.

 

12.4            Injunctive Relief Notwithstanding anything to the contrary in this Article 12, any Party may seek immediate injunctive or other interim relief from any court of competent jurisdiction as necessary to enforce the provisions of this Article 12 and to enforce and prevent infringement or misappropriation of the Patents, Know-How or Confidential Information Controlled by such Party.

 

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ARTICLE 13
MISCELLANEOUS

 

13.1            Governing Law. This Agreement (and any claims or disputes arising out of or related thereto or to the transactions contemplated thereby or to the inducement of any party to enter therein, whether for breach of contract, tortious conduct, or otherwise, and whether predicated on common law, statute, or otherwise) shall in all respects be governed by and construed in accordance with the laws of the State of New York, including all matters of construction, validity and performance, in each case without reference to any conflict of law rules that might lead to the application of the laws of any other jurisdiction.

 

13.2            Assignment. This Agreement shall not be assignable by either Party to any Third Party without the written consent of the other Party. Notwithstanding the foregoing, either Party may assign this Agreement, without the written consent of the other Party, to: (a) an Affiliate; or (b) an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale or otherwise), and in each case that agrees in writing to be bound by the terms and conditions of this Agreement. No assignment or transfer of this Agreement shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions of this Agreement shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties. Except as expressly provided in this Section 13.2, any attempted assignment or transfer of this Agreement shall be null and void.

 

13.3            Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, via email for which receipt has been confirmed by the recipient within [***] ([***]) hours, transmitted by facsimile (receipt verified) or by express courier service (signature required) or [***] ([***]) days after it was sent by registered letter, return receipt requested (or its equivalent), provided that no postal strike or other disruption is then in effect or comes into effect within [***] ([***]) days after such mailing, to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party shall have last given by notice to the other Party.

 

If to Aarvik, addressed to:

Aarvik Therapeutics, Inc. Attention:  Jagath Reddy Junutula, CEO Address:     31363 Medallion Drive                      Hayward, CA 94544 Facsimile:

 

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	With a copy to:	Fox Rothschild LLP Attention:  Terrence Kerwin, Esq. 747 Constitution Drive, Suite 100 Exton, PA 19341-0673 Telephone: [***] Facsimile: [***]
	If to ArriVent, addressed to	ArriVent Biopharma, Inc. Attention:  Zhengbin Yao Address:  18 Campus Blvd                    Suite 100                    Newtown Square, PA 19073-3269 Telephone:   Facsimile:
	With copies to:	ArriVent Biopharma, Inc. Attention: Legal Department   Goodwin Procter (Hong Kong) LLP Attention: Wendy Pan Address: 38th Floor, Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong Telephone: [***] Facsimile: [***]

 

13.4            Waiver. Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

 

13.5            Entire Agreement/Modification. This Agreement, including its Exhibits (and any amendments properly made pursuant to the terms of this Agreement), sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties and supersedes and terminates all prior agreements and understandings between the Parties. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties. In the event of inconsistencies between this Agreement and any Exhibits or attachments hereto, the terms of this Agreement shall control.

 

13.6            Force Majeure. Neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by earthquake, riot, civil commotion, war, terrorist acts, strike, flood, or governmental acts or restriction, or other cause that is beyond the reasonable control of the respective Party. The Parties agree the effects of the COVID-19 pandemic that is ongoing as of the Effective Date may be invoked as a force majeure event for the purposes of this Agreement solely to the extent those effects are not reasonably foreseeable by the Parties as of the Effective Date. The Party affected by such force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and shall use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable. If the performance of any such obligation under this Agreement is delayed owing to such a force majeure for any continuous period of more than [***] ([***]) days, the Parties shall consult with respect to an equitable solution, including the possibility of the mutual termination of this Agreement.

 

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13.7            Independent Contractors. It is understood and agreed that the relationship between the Parties is that of independent contractors and that nothing in this Agreement shall be construed to create a joint venture or any relationship of employment, agency or partnership between the Parties to this Agreement. Neither Party is authorized to make any representations, commitments, or statements of any kind on behalf of the other Party or to take any action that would bind the other Party except as explicitly provided in this Agreement. Furthermore, none of the transactions contemplated by this Agreement shall be construed as a partnership for any tax purposes.

 

13.8            No Implied Waivers; Rights Cumulative. No failure or delay on the part of either Party to exercise any right under this Agreement shall constitute a waiver of such right by such Party, or be construed as a waiver of any breach of this Agreement, nor shall any single or partial exercise of any such right by a Party preclude any other or further exercise of such right or the exercise of any other right. Any waiver by a Party of a particular provision or right must be in writing, be specific to and reference a particular matter, and be signed by such Party.

 

13.9            Severability. If, under Applicable Laws, any provision of this Agreement is adjudicated invalid or unenforceable by a court of competent jurisdiction, or otherwise directly or indirectly affects the validity of any other material provision(s) of this Agreement (such invalid or unenforceable provision, a “severed clause”), such adjudication shall not affect or impair the remaining provisions of this Agreement, which shall continue in full force and effect. Promptly following such adjudication, the Parties shall negotiate in good faith to agree upon a valid and enforceable provision that is a reasonable substitute for the severed clause in view of the intent of this Agreement.

 

13.10            Cumulative Remedies. Unless otherwise specified herein, no remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under Applicable Laws.

 

13.11            Further Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement

 

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13.12            No Third Party Beneficiaries. No Person other than Aarvik and ArriVent (and their respective permitted assignees) shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement; provided, however, that [***] shall be an intended third party beneficiary for purposes of enforcing (i) the scope of the license granted hereunder that is subject to the terms and conditions of the [***] and (ii) any restrictions on the use of any materials or confidential information of [***] as set forth herein.

 

13.13            Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (b) the word “day” or “year” shall mean a calendar day or year unless otherwise specified; (c) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (d) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (e) the word “or” shall be construed as the inclusive meaning identified with the phrase “and/or;” (f) provisions that require that a Party, the Parties or a 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; (g) words of any gender include the other gender; (h) words using the singular or plural number also include the plural or singular number, respectively; and (i) 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 law, rule or regulation thereof. 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.

 

13.14            Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by electronic transmission shall be effective as delivery of a manually executed original counterpart of this Agreement.

 

[The remainder of this page intentionally left blank; the signature page follows.]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the Effective Date.

 

AARVIK THERAPEUTICS, INC.				ARRIVENT BIOPHARMA, INC.
By:	/s/Jagath Reddy Junutula, Ph.D.			By:	/s/ Zhengbin Yao, Ph.D.
	Name:	Jagath Reddy Junutula, Ph.D.			Name:	Zhengbin Yao, Ph.D.
	Title:	Co-founder, President & CEO			Title:	CEO and Chairman

  

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EXHIBIT A 

TARGET PAIR

 

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EXHIBIT B 

SUMMARY OF WORK ITEMS AND RESEARCH EXPENSES

 

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EXHIBIT C 

JOINT RESEARCH COMMITTEE MEMBERS

 

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EXHIBIT D 

STATEMENT OF WORK (SOW)

 

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1.

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2.

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3.

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4.

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5.

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6.

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7.

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8.

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

AMENDMENT NO. 1 TO RESEARCH COLLABORATION AGREEMENT

 

THIS AMENDMENT NO. 1 TO RESEARCH COLLABORATION AGREEMENT (this “Amendment”) is effective as of June 30, 2023 (the “Effective Date”) by and between Aarvik Therapeutics, Inc., a company incorporated in Delaware, having a place of business at 31363 Medallion Drive, Hayward, CA 94544 (“Aarvik”), and ArriVent Biopharma, Inc., a company incorporated in Delaware, with offices located at 18 Campus Blvd., Suite 100, Newtown Square, PA 19073-3269 (“ArriVent”). ArriVent and Aarvik are referred to herein individually as a “Party” or, collectively, as the “Parties.”

 

Background

 

WHEREAS, Aarvik and ArriVent are parties to that certain Research Collaboration Agreement dated December 21, 2021 (the “Agreement”); and

 

WHEREAS, the Parties now wish to amend certain terms of the Agreement as set forth in this Amendment;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration the receipt and sufficiency of which is hereby acknowledged, ArriVent and Aarvik hereby agree as follows:

 

1.            Incorporation of Background; Capitalized Terms. The “Background” provisions set forth above, together with the defined terms therein, are incorporated herein by reference. Capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Agreement.

 

2.            Amendment. Exhibit B to the Agreement is hereby amended and restated in its entirety as set forth on Exhibit B attached hereto.

 

3.            Amendments to Section 6.2. The amounts of the research fees set forth in Sections 6.2.1, 6.2.2 and 6.2.3 of the Agreement are hereby amended to be consistent with the applicable amounts as set forth in Exhibit B attached hereto. For purposes of clarity, all other terms and conditions set forth in Sections 6.2.1, 6.2.2 and 6.2.3 of the Agreement shall remain unchanged and in full force and effect.

 

4.            No Other Amendments. All provisions of the Agreement not expressly amended by this Amendment shall remain in full force and effect, and are ratified and confirmed.

 

5.            Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. An electronic or faxed signed copy of this Amendment shall have the same force and effect as an original signed copy.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.            Governing Law. This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to principles of conflicts of law.

 

[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) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the Effective Date.

 

AARVIK THERAPEUTICS, INC.			ARRIVENT BIOPHARMA, INC.
By:	/s/ Jagath Reddy Janutula		By:	/s/ Stuart Lutzker
Name:	Jagath Reddy Janutula		Name:	Stuart Lutzker
Title:	President & CEO		Title:	CMO and President

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

EXHIBIT B

 

SUMMARY OF WORK ITEMS AND RESEARCH EXPENSES

 

·

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

Exhibit 10.15

 

CLINICAL COLLABORATION AGREEMENT

 

This CLINICAL COLLABORATION AGREEMENT (this “Agreement”) is entered into as of June 23, 2023 (the “Effective Date”), by and between ArriVent BioPharma Inc., having an address at 18 Campus Blvd., Suite 100, Newtown Square, PA 19073-3269 (“ArriVent”), and Beijing InnoCare Pharma Tech Co., Ltd., having an address at Building 8, No. 8 Life Science Park Road, ZGC Life Science Park, Changping District, Beijing, China 102206 (“InnoCare”). ArriVent and InnoCare are each referred to herein individually as “Party” and collectively as “Parties”.

 

RECITALS

 

A.            InnoCare is developing the InnoCare Compound.

 

B.            ArriVent is developing the ArriVent Compound.

 

C.            ArriVent and InnoCare, consistent with the terms of this Agreement, desire to collaborate as more fully described herein, including ArriVent providing the ArriVent Compound to InnoCare for use in the Clinical Study, and InnoCare agreeing to sponsor the Clinical Study.

 

NOW, THEREFORE, in consideration of the premises and of the following mutual promises, covenants and conditions, the Parties, intending to be legally bound, mutually agree as follows:

 

1

Definitions.

 

For all purposes of this Agreement, the capitalized terms defined in this Article 1 and throughout this Agreement shall have the meanings herein specified.

 

1.1            “Affiliate” means, with respect to either Party, a person, firm, corporation, partnership or other entity that, now or hereafter, directly or indirectly owns or controls said Party, is owned or controlled by said Party, or is under common ownership or control with said Party, for so long as such control exists. The word “control,” as used in this definition, means (a) the direct or indirect ownership of fifty percent (50%) or more of the outstanding voting securities of a legal entity or (b) possession, directly or indirectly, of the power to direct the management or policies of a legal entity, whether through the ownership of voting securities, contract rights, voting rights, corporate governance or otherwise.

 

1.2            “Alliance Manager” has the meaning set forth in Section 3.9.

 

1.3            “Allist” means Shanghai Allist Pharmaceuticals Co., Ltd.

 

1.4            “Applicable Law” or “Applicable Laws” means all federal, state, local, national and regional statutes, laws, rules, regulations and directives applicable to a particular activity hereunder, including performance of clinical trials, medical treatment and the processing and protection of personal and medical data, that may be in effect from time to time, including those promulgated by the NMPA or any agency or authority performing some or all of the functions of the NMPA in any applicable jurisdiction outside People’s Republic of China (each a “Regulatory Authority” and collectively, “Regulatory Authorities”), and including GMP and GCP (each as defined below); all data protection requirements; export control and economic sanctions regulations; anti-bribery and anti-corruption laws pertaining to interactions with government agents, officials and representatives; laws and regulations governing payments to healthcare providers; and any successor or replacement statutes, laws, rules, regulations and directives relating to the foregoing.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.5            “ArriVent Compound” means Furmonertinib, [***].

 

1.6            “ArriVent Inventions” has the meaning set forth in Section 9.2.

 

1.7            “Background IP” means, with respect to a Party, any Intellectual Property: (a) Controlled by such Party and its Affiliates prior to the Effective Date; or (b) acquired, conceived, discovered, generated, made or reduced to practice by or on behalf of such Party separate and apart from performance under this Agreement.

 

1.8            “Business Day” means any day other than a Saturday, Sunday or bank or other public holiday in Beijing, People’s Republic of China or San Francisco, California, U.S.

 

1.9            “Claim” has the meaning set forth in Section 14.1.1.

 

1.10            “Clinical Quality Agreement” has the meaning set forth in Section 8.3.

 

1.11            “Clinical Study” means the Phase 1/2 clinical trial of the Combination, entitled “A Non-Randomized, Open-Label, Multicenter, Phase I Study to Evaluate the Safety, Tolerability, Pharmacokinetic Characteristics, and Efficacy of ICP-189 as Monotherapy or Combination Therapy in Patients with Advanced Solid Tumors”, conducted in mainland China and designed to evaluate the safety and efficacy of the Combination in accordance with the Protocol.

 

1.12            “Clinical Study Budget” has the meaning set forth in Section 6.

 

1.13            “Clinical Study Costs” has the meaning set forth in Section 6.

 

1.14            “Clinical Study Report” has the meaning set forth in Section 3.8.1.

 

1.15            “Clinical Study Results” means all data and results generated in the performance of the Clinical Study.

 

1.16            “Collaboration” means the Parties’ collaboration pursuant to this Agreement to explore the potential of developing the InnoCare Compound and ArriVent Compound in combination. For clarity, the Collaboration includes the Clinical Study.

 

1.17            “Collaboration Inventions” has the meaning set forth in Section 9.2.

 

1.18            “Collaboration Report” has the meaning set forth in Section 3.6.

 

1.19            “Combination” means the use of the InnoCare Compound and the ArriVent Compound in combination, including pursuant to concomitant or sequential administration.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.20            “Confidential Information” means any know-how, information or materials which one Party or any of its Affiliates or contractors (“Disclosing Party”) provides or otherwise makes available to the other Party or any of its Affiliates or contractors (“Receiving Party”) hereunder, whether made available orally, in writing, or in electronic form.

 

1.21            “Control” or “Controlled” means, with respect to particular information or Intellectual Property, that the applicable Party owns or has a license to such information or Intellectual Property and has the ability to grant a right, license or sublicense to the other Party as provided for herein without violating the terms of any agreement or other arrangement with any Third Party or resulting in any payment obligations on such Party.

 

1.22            “Defending Party” has the meaning set forth in Section 14.2.

 

1.23            “Disclosing Party” has the meaning set forth in the definition of Confidential Information.

 

1.24            “Executive Officer” means Chief Executive Officers (or their designees with appropriate decision-making authority) of InnoCare and ArriVent.

 

1.25            “Force Majeure” has the meaning set forth in Section 16.2.

 

1.26            “FTE” means equivalent of a full-time individual’s work time for a [***] month period, based on an expected [***] hours per year.

 

1.27            “FTE Costs” means the FTE Rate multiplied by the applicable number of FTEs of a Party performing the relevant activities during such period.

 

1.28            “FTE Rate” means (a) $[***] per FTE for InnoCare personnel, and (b) $[***] per FTE for ArriVent personnel.

 

1.29            “GCP” means the applicable then-current ethical and scientific quality standards for designing, conducting, recording, and reporting clinical trials as are required by applicable Regulatory Authorities or Applicable Law in the People’s Republic of China, including Good Clinical Practices established through the NMPA.

 

1.30            “GMP” means all applicable then-current good manufacturing practice standards relating to fine chemicals, intermediates, bulk products, or finished pharmaceutical or biological products, as are required by applicable Regulatory Authorities or Applicable Law in the People’s Republic of China, including all applicable requirements detailed in the NMPA’s Good Manufacturing Practice for Drugs.

 

1.31            “IND” means any clinical trial application filed or to be filed with the NMPA for authorization to commence the Clinical Study.

 

1.32            “InnoCare Compound” means ICP-189, an SHP2 inhibitor.

 

1.33            “InnoCare Inventions” has the meaning set forth in Section 9.2.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.34            “Intellectual Property” means all Patent Rights, rights to Know-How, copyrights, design rights, trademarks, and all other intellectual property rights (whether registered or unregistered) and all registrations, applications and rights to apply for any of the foregoing, anywhere in the world however denominated.

 

1.35            “Inventions” means all inventions and discoveries, whether or not patentable, that are made, conceived, or reduced to practice by or on behalf of a Party, or by or on behalf of the Parties together, in the performance of the Collaboration. For clarity, the Inventions shall exclude any and all Background IP.

 

1.36            “NMPA” means the National Medical Products Administration of the People’s Republic of China, and local counterparts thereto, and any successor agency or authority thereto, having substantially the same function.

 

1.37            “Other Party” has the meaning set forth in Section 14.2.

 

1.38            “Party” has the meaning set forth in the preamble.

 

1.39            “Patent Rights” means any and all [***].

 

1.40            “Permitted Overage” has the meaning set forth in Section 6.4.1.

 

1.41            “Person” means any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity or governmental entity.

 

1.42            “Protocol” means the protocol for the Clinical Study, as further defined in, and as may be amended pursuant to, Section 4.1.

 

1.43            “Receiving Party” has the meaning set forth in the definition of Confidential Information.

 

1.44            “Regulatory Approvals” means any and all permissions (other than the manufacturing approvals for the ArriVent Compound) required to be obtained from Regulatory Authorities for the conduct of the Clinical Study.

 

1.45            “Regulatory Authorities” has the meaning set forth in the definition of Applicable Law.

 

1.46            “Related Agreements” means the Pharmacovigilance Agreement and the Clinical Quality Agreement.

 

1.47            “SDEA” has the meaning set forth in Section 5.1.

 

1.48            “SEC” has the meaning set forth in Section 11.5.

 

1.49            “Securities Regulators” has the meaning set forth in Section 11.5.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

1.50            “Specifications” means, with respect to the ArriVent Compound or InnoCare Compound, as applicable, the set of requirements with respect to the structure, strength, dose, dosage form and manufacture thereof as set forth in the label therefor or the Clinical Quality Agreement.

 

1.51            “Study Completion” means [***], as applicable.

 

1.52            “Subcontractors” means any and all Third Parties to whom a Party delegates any of its obligations hereunder.

 

1.53            “Synopsis” has the meaning set forth in Section 4.1.

 

1.54            “Term” has the meaning set forth in Section 15.1.

 

1.55            “Third Party” means any Person or entity other than InnoCare, ArriVent or their respective Affiliates.

 

1.56            Interpretation. Except where the context otherwise requires, wherever used, the singular will include the plural, the plural the singular, the use of any gender will be applicable to all genders, and the word “or” is used in the inclusive sense (and/or). Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term “including” as used herein shall be deemed to be followed by the phrase “without limitation” or like expression. The term “will” as used herein means shall. References to “Article,” “Section,” “Appendix” or “Schedule” are references to the numbered sections of this Agreement and the appendices or schedules attached to this Agreement, unless expressly stated otherwise.

 

2

Scope of the Agreement.

 

2.1            Generally. Each Party shall: (a) contribute to the Clinical Study such resources as are reasonably necessary to fulfill its obligations set forth in this Agreement; and (b) act in good faith in performing its obligations under this Agreement and each Related Agreement to which it is a Party. The Clinical Study shall be conducted solely in the People’s Republic of China (“PRC”) (not including Hong Kong, Macau or Taiwan, for the purposes of this Agreement).

 

2.2            Study Sponsorship. InnoCare shall have the right to use the ArriVent Compound supplied hereunder solely for the Clinical Study and shall be the regulatory sponsor for the Clinical Study in PRC. InnoCare shall ensure that the Study is performed in accordance with this Agreement, the Protocol and Applicable Law.

 

2.3            Delegation of Obligations. Each Party may subcontract the performance of its activities hereunder to its Affiliates or Third Party contractors in the ordinary course of business without prior written notice to the other Party. Each Party shall [***] under this Agreement. Each Party shall ensure that [***] in accordance with the terms of this Agreement and Applicable Law.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

2.4            Relationship; Non-Exclusivity. Except as expressly set forth in this Agreement, nothing in this Agreement shall: (a) prohibit (i) ArriVent (or Allist) from performing clinical or preclinical studies of the ArriVent Compound in any therapeutic area, either individually or in combination with any other product, (ii) InnoCare from performing clinical or preclinical studies of the InnoCare Compound in any therapeutic area, either individually or in combination with any other product, or (iii) either Party from performing clinical or preclinical studies with any other product; or (b) create an exclusive relationship between the Parties with respect to the ArriVent Compound, the InnoCare Compound or any other product. Each Party acknowledges and agrees that nothing in this Agreement shall be construed as a representation or inference that either Party shall not develop for itself, or enter into business relationships with other Third Parties regarding, any products, programs, studies (including combination studies), technologies or processes that are similar to or that may compete with the Combination, the ArriVent Compound (with respect to InnoCare), the InnoCare Compound (with respect to ArriVent) or any other product, program, technology or process, provided that neither Party shall use or disclose Clinical Study Results, Confidential Information of the other Party, or Collaboration Inventions in a manner that is prohibited under this Agreement. In addition, neither Party would be under any obligation to participate in, or otherwise support, any other future activities or arrangements involving the Combination, including without limitation, any manufacturing, regulatory, or commercialization activities involving the Combination. If the Parties were to decide to jointly conduct any such future activity involving the Combination, the Parties shall do so pursuant to a separate agreement, to be negotiated in good faith by the Parties at a later time, upon request by either Party.

 

3

Conduct of the Study.

 

3.1            Sponsor Regulatory Filings. InnoCare shall have the sole right and responsibility to conduct the Clinical Study and to communicate with Regulatory Authorities with respect thereto. Prior to initiating the Clinical Study, InnoCare shall be responsible for preparing and submitting all regulatory filings for the Clinical Study, which shall include the Protocol and the IND for the Combination and shall obtain all Regulatory Approvals from all Regulatory Authorities, ethics committees and/or institutional review boards that have jurisdiction over the Clinical Study and which are necessary to conduct the Clinical Study. Prior to IND submission, InnoCare shall provide the Protocol in English to allow ArriVent to review, comment and approve. Upon ArriVent’s request, InnoCare shall provide a copy of regulatory filings (including the IND) in Chinese language that are filed with and accepted by NMPA. ArriVent shall reasonably cooperate with InnoCare in submitting regulatory filings and obtaining Regulatory Approvals as set forth in this Agreement, or as otherwise reasonably requested by InnoCare with respect to the Clinical Study.

 

3.2            Regulatory Meetings and Other Regulatory Matters. To the extent legally permissible, ArriVent shall have the right (but not the obligation) to attend InnoCare’s meetings with a Regulatory Authority regarding the Clinical Study. InnoCare shall timely notify ArriVent of any scheduled meeting with a Regulatory Authority to the extent such meeting may include a material discussion of ArriVent Compound. InnoCare will also provide copies of all communications with any Regulatory Authority regarding the Clinical Study and provide ArriVent with an English summary of any such material communications. Upon ArriVent’s request, and to the extent practicable in light of required response times, InnoCare will also provide ArriVent with an English translation of a specified communication and a draft of InnoCare’s response to any such correspondence from Regulatory Authorities in English. For clarity, the costs for translating any documents or information to English as required by this Agreements shall be part of Clinical Study Costs. Upon InnoCare’s request, ArriVent shall timely collaborate with InnoCare in responding to questions posed by Regulatory Authorities relating to the design and conduct of the Clinical Study.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

3.3            Documentation. InnoCare shall maintain all reports and documentation related to the Clinical Study in good scientific manner and in compliance with Applicable Law. InnoCare shall provide all information and documentation reasonably requested by ArriVent related to the Clinical Study and the ArriVent Compound.

 

3.4            Debarred Personnel. Notwithstanding anything to the contrary contained herein, neither Party shall employ or subcontract with any Person that is excluded, debarred, suspended, proposed for suspension or debarment by any Regulatory Authority for the performance of the Clinical Study, manufacture of ArriVent Compound or the InnoCare Compound, as applicable, or any other activities under this Agreement or the Related Agreements. Each Party hereby certifies that it has not employed or otherwise used in any capacity and shall not employ or otherwise use in any capacity, the services of any Person suspended, proposed for debarment, or debarred by any Regulatory Authority in performing any portion of the Clinical Study, manufacture of ArriVent Compound or the InnoCare Compound, as applicable, or other activities under this Agreement or the Related Agreements. Each Party shall notify the other Party in writing immediately if any such suspension, proposed debarment, or debarment occurs or comes to its attention, and shall, with respect to any Person so suspended, proposed for debarment, or debarred, promptly remove such Person from performing in any capacity related to the Clinical Study, manufacture of ArriVent Compound or the InnoCare Compound, as applicable, or otherwise related to activities under this Agreement or the Related Agreements.

 

3.5            Updates and Results Provided to ArriVent. During the conduct of the Clinical Study, InnoCare shall provide to ArriVent (a) [***] (or at such other cadence as agreed by the Parties) updates in writing with respect to the progress of the Clinical Study and ad hoc meeting if deemed necessary by both parties, (b) joint internal Safety Monitoring Committee (“SMC”) review meeting for each dose cohort on a regular basis, normally once upon the completion of Dose Limiting Toxicity (“DLT”) evaluation for each dose cohort, and (c) the Clinical Study Results in the form of tables, listings and graphs, on an ongoing basis as such Clinical Study Results become available. The Parties shall discuss the Clinical Study Results, as they are provided to ArriVent pursuant to such updates and results, if requested by either Party within [***] after provision of the applicable update or results. The Clinical Study Results shall be provided to ArriVent in English.

 

3.6            Final Reports. Upon Study Completion, InnoCare shall lead the analysis of the Clinical Study Results and shall keep ArriVent fully informed of such analysis. ArriVent will cooperate with InnoCare in connection with such analysis. Within [***] after Study Completion, InnoCare shall provide ArriVent with: (i) an electronic draft of the final study report (“Clinical Study Report”) for the Clinical Study and (ii) the final version of the Clinical Study Report, and the Clinical Study Results in the form of tables, listings and graphs (the Clinical Study Report and such tables, listing and graphs are, collectively, the “Collaboration Report”), via electronic transfer. ArriVent shall provide comments, if any, to the Clinical Study Report within [***] of its receipt, which comments InnoCare shall consider in good faith. The Collaboration Report shall be provided to ArriVent in English.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

3.7            Raw Data. InnoCare shall provide any raw data generated from the Clinical Study, except as provided for in Section 6.4.2, if requested by ArriVent; provided that (a) InnoCare shall use commercially reasonable efforts to obtain permission under Applicable Laws for such transfer of raw data and is not obligated to provide such raw data until such permission is obtained, (b) if requested by ArriVent or required by Applicable Law, InnoCare shall remove any personally identifiable data from such raw data, and (c) if such personally identifiable data is not removed from the raw data, such raw data shall be disclosed to ArriVent only pursuant to procedures established to comply with Applicable Laws pertaining to data protection and privacy and any applicable informed consents pursuant to which such data was collected. Both Parties understand and agree that all data sharing and use shall comply with all Applicable Laws, including but not limited to PRC laws and regulations regarding data transfer, as promulgated and updated from time to time, by the Human Genetics Resources Administration and the Cyberspace Administration of China. ArriVent will cooperate with InnoCare, including by providing any required information, as necessary for InnoCare to apply for and obtain permission to provide raw data to ArriVent under Applicable Law.

 

3.8            Ownership and Use of Data and Reports. All Clinical Study Results (including raw data) shall be jointly owned by InnoCare and ArriVent, except as provided for in Section 6.4.2. ArriVent shall not, without InnoCare’s prior written consent, use the Clinical Study Results for purposes of developing, except for the purpose of conducting the Clinical Study as permitted under the Agreement, or commercializing the InnoCare Compound alone or in combination with the ArriVent Compound. InnoCare shall not, without ArriVent’s prior written consent, use the Clinical Study Results for purposes of developing, except for the purpose of conducting the Clinical Study as permitted under the Agreement, or commercializing the ArriVent Compound alone or in combination with the InnoCare Compound.

 

3.8.2            The Clinical Study Results shall be the Parties’ joint Confidential Information and shall be subject to Section 11, provided that either Party may disclose the Clinical Study Results to existing or potential acquirers, merger partners, collaborators, (sub)contractors, licensees, sublicensees, and sources of financing or to professional advisors (e.g., attorneys, accountants and prospective investment bankers) involved in such activities, only if they are under obligations of confidentiality and non-use at least as stringent as those set forth in Section 11 or customary for the type of disclosure. For clarity, ArriVent shall have the right to disclose the Clinical Study Results to Allist.

 

3.9            Alliance Managers. Promptly after the Effective Date, each Party shall appoint a person who shall serve as the point of contact and oversee communications between the Parties for all matters related to this Agreement, and shall have such other responsibilities as the Parties may agree in writing (each, an “Alliance Manager”). Each Alliance Manager shall be permitted to attend meetings between the Parties under this Agreement. Each Party may replace its Alliance Manager at any time by notice in writing to the other Party. Each Party shall bear the costs of its Alliance Manager.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

4

Protocols and Informed Consent; Certain Covenants.

 

4.1            Protocols. As between the Parties, InnoCare shall solely own the Protocol. A synopsis of the protocol for the Clinical Study (the “Synopsis”) is attached hereto as Schedule 4.1. The Parties shall amend Schedule 4.1 to replace such synopsis with the full protocol for the Clinical Study (such protocol attached as Schedule 4.1, the “Protocol”) once it is finalized by InnoCare. The Protocol shall be based on the Synopsis. ArriVent shall have the right to review, comment upon, and approve, the Protocol, including patient enrollment criteria and dosing regimen, for the Clinical Study. Thereafter, InnoCare shall (a) provide any proposed amendments to the Protocol to ArriVent for ArriVent’s review and comment, (b) consider in good faith any comments to the amended-Protocol proposed by ArriVent, and (c) obtain ArriVent’s consent for any amendments to the Protocol.

 

4.2            Informed Consent. In compliance with Applicable Law of PRC, InnoCare shall prepare the patient informed consent form for the Clinical Study, in consultation with ArriVent (it being understood and agreed that InnoCare shall provide to ArriVent the informed consent form and any updates thereto during the Term). InnoCare shall ensure informed consent of all subjects in the Clinical Study is obtained in accordance with Applicable Law. InnoCare will ensure that such consent provides any legally required consent for the collection and use of data for research and development of the ArriVent Compound, the InnoCare Compound, and the combination thereof. Further, such consent shall not represent that ArriVent or any of its Affiliates or Allist is the sponsor of the Clinical Study.

 

5

Adverse Event Reporting.

 

5.1            Safety Data Exchange Agreement (SDEA). InnoCare shall be solely responsible for compliance with all Applicable Laws pertaining to safety reporting for the Clinical Study; provided that ArriVent shall retain, and comply with, its safety reporting obligations for the ArriVent Compound in accordance with Applicable Laws. The Parties (or their respective Affiliates) shall execute a safety data exchange agreement (the “SDEA”) prior to the initiation of clinical activities under the Clinical Study, but in any event within [***] after the Effective Date of this Agreement, to ensure the exchange of relevant safety data, including provision by InnoCare of all defined safety data related to the ArriVent Compound arising from the performance of the Clinical Study, within appropriate timeframes and in an appropriate format to enable each Party to fulfill its local and international regulatory reporting obligations and to facilitate appropriate safety reviews. The SDEA shall include safety data exchange procedures governing the collection, monitoring, reporting, and exchange of adverse event information, pregnancy reports, and other safety information arising from or related to the use of the ArriVent Compound, consistent with Applicable Laws. In the event of any inconsistency between the terms of this Agreement and the SDEA, the terms of this Agreement shall supersede, except for issues related to safety data exchange procedures.

 

6

Costs of Collaboration.

 

6.1            Cost Sharing. The Parties shall equally share costs (both internal FTE Costs and out-of-pocket expenses) incurred associated with the Clinical Study (the “Clinical Study Costs”) in accordance with the budget for the Clinical Study (the “Clinical Study Budget”) as attached hereto in Schedule 6.1, provided that ArriVent shall supply the ArriVent Compound to InnoCare for use in the Collaboration [***] and InnoCare shall supply the InnoCare Compound for use in the Collaboration [***]. The Clinical Study Budget shall be agreed upon by the Parties before conducting the Clinical Study.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

6.2            Reports. With respect to Clinical Study Costs incurred by the Parties in connection with the conduct of the Clinical Study, within [***] following the end of each [***] during which any such Clinical Study Costs are incurred, each Party shall submit to the other Party a written report (format to be determined by both Parties) setting forth in reasonable detail all Clinical Study Costs incurred by each such Party over such [***] which report shall include a reasonable itemized breakdown of all Clinical Study Costs accompanied by relevant supporting documentation, including documentation for out-of-pocket expenses and accounting of its FTE Costs. For clarity, any activities related to alliance management, contractual legal discussions, as well as joint clinical discussions that require participation and contributions of both Parties, shall be excluded from Clinical Study Costs and therefore shall not be charged to the other Party.

 

6.3            Reconciliation Payments. Within [***] following the receipt by each Party of such written reports setting forth the actual amounts of Clinical Study Costs incurred by the other Party, the Parties shall discuss and determine the calculation of the net amount owed by one Party to the other Party in order to ensure the appropriate equal sharing of such Clinical Study Costs. The Party that is due for reimbursement of Clinical Study Costs shall invoice the other Party within [***] of such determination. PRC local exchange rate will be applied at the time of invoice. Such payments by one Party to reimburse the other Party’s expenditures for Clinical Study Costs shall be payable [***] following receipt of the invoice. Any Clinical Study Costs incurred in excess of the agreed upon Clinical Study Budget shall be subject to Section 4 below.

 

6.4            Overruns. Each Party shall notify the other Party promptly upon becoming aware that the anticipated Clinical Study Costs to be incurred by such Party shall be in excess of the Clinical Study Budget. Thereafter the Parties shall discuss the causes of any such increase and evaluate potential mitigation measures to prevent a further increase of Clinical Study Costs.

 

6.4.1            To the extent, based on this discussion, that the Parties conclude that the anticipated amount of the Clinical Study Costs is likely not to exceed [***] percent ([***]%) of the Clinical Study Budget (the “Permitted Overage”), such anticipated or actual Clinical Study Costs shall be included for the purposes of determining the amounts to be paid from one Party to the other Party in order for the Parties to equally share the Clinical Study Costs , provided that such costs are not incurred as a result of any breach of this Agreement by a Party.

 

6.4.2            If either Party foresees that the anticipated amount of the applicable Clinical Study Costs is likely to exceed the Permitted Overage, both Parties shall review, discuss and determine in good faith whether to approve the excess costs. If the Parties fail to reach a consensus decision to jointly undertake the excess costs or are unable to reach an agreement on mitigation measures to prevent the excess costs, [***], InnoCare shall have the sole right to make the final decision on the matters relating to the overruns of the Clinical Study Costs. If ArriVent does not agree with InnoCare’s final decision, ArriVent may opt out of participation in the Clinical Study past the Permitted Overage, provided that ArriVent shall not have rights (including rights to receive and any ownership rights) to Clinical Study Results generated after the date of ArriVent’s opt-out, including Raw Data and Clinical Study Report. InnoCare will submit to ArriVent on or after the opt-out date an invoice of Clinical Study Costs accrued prior to the opt-out date and not already reimbursed by ArriVent. ArriVent will pay to InnoCare [***]% of all undisputed amounts set forth in such invoice no later than [***] following receipt of the invoice. InnoCare will not be required to return any ArriVent Compound and ArriVent will cooperate with InnoCare to facilitate InnoCare’s purchase of any additional ArriVent Compound directly from Allist. For clarity, nothing in this Section 6.4.2 will serve to modify Section 9.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

7

Taxes

 

Without limiting such provisions, for all transactions and reimbursements pursuant to this Agreement, each Party will be the withholding and reporting entity of all local Value-Added Tax (VAT) and bear the related VAT cost. Neither InnoCare nor ArriVent shall be responsible for Corporate Income Tax (CIT) imposed by the other Party’s local government authority. If either Party’s local government authority determines any reimbursements due to the other Party are subject to CIT, the local Party shall make reasonable efforts to engage in discussions with its local government authority to avoid the imposition of such CIT on the other Party. All amounts due pursuant to this Agreement shall be paid without reduction for any taxes.

 

8

Supply and Use of the Compound.

 

8.1            Supply Overview. Subject to the terms and conditions of this Agreement, ArriVent shall be responsible for supplying an agreed upon reasonable quantities of the ArriVent Compound that are necessary to complete the Clinical Study, in accordance with the Specifications for the ArriVent Compound; and InnoCare shall be responsible for supplying an agreed upon reasonable quantities of the InnoCare Compound that are necessary to complete the Clinical Study, in accordance with the Specifications for the InnoCare Compound. If the Protocol is modified in accordance with Article 4 in such a manner that may affect the quantities of ArriVent Compound or InnoCare Compound to be provided or the timing for providing such quantities, the Parties shall amend the Agreement to reflect any changes required to be consistent with the Protocol by mutual agreement. Schedule 8.1 sets forth the estimated amount of ArriVent Compound required for the Clinical Study.

 

8.2            Supply Terms. InnoCare acknowledges and agrees that ArriVent may have Allist supply InnoCare the ArriVent Compound pursuant to the supply agreement between ArriVent and Allist (“Allist Supply Agreement”). The Allist Supply Agreement is attached hereto as Schedule 8.2. [***].

 

8.3            Clinical Quality Agreement. Within [***] after the Effective Date of this Agreement, but in any event before any supply of ArriVent Compound and InnoCare Compound hereunder, the Parties (or their respective Affiliates or CMOs) shall enter into a quality agreement that shall address and govern issues related to the quality of the ArriVent Compound and InnoCare Compound for use in the Clinical Study (the “Clinical Quality Agreement”). In the event of any inconsistency between the terms of this Agreement and the Clinical Quality Agreement, the terms of this Agreement shall control, except for issues related to quality control and procedures.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

8.4            Use, Handling and Storage of ArriVent Compounds. [***] shall be responsible for delivering [***] sites for use in the Clinical Study. To the extent required by Applicable Laws, for [***] any additional packaging and labelling of the ArriVent Compound. [***] shall be responsible for storage and maintenance [***] shall: (a) use the ArriVent Compound [***] (b) not use such ArriVent Compound [***] (c) use, store, transport, handle and dispose of such ArriVent Compound in compliance with Applicable Law and the Clinical Quality Agreement, as well as any written instructions provided to InnoCare in writing by ArriVent; (d) [***].

 

8.5            Records; Audit Rights. [***] shall keep complete and accurate records pertaining to its use and disposition of the ArriVent Compound [***]. During the Term of this Agreement, [***] shall provide or make such records accessible to review by [***] or its designee [***], to the extent legally permissible, [***].

 

9

Intellectual Property.

 

9.1            Ownership of Background IP. As between the Parties, each Party shall own and retain all right, title and interest in and to its Background IP, and neither Party shall receive any rights under the other Party’s Background IP, except as expressly set forth in the Agreement.

 

9.2            Ownership of Inventions. As between the Parties, (a) InnoCare shall exclusively own any and all Inventions related solely to the InnoCare Compound, and all Intellectual Property rights therein (“InnoCare Inventions”), (b) ArriVent shall exclusively own any Inventions related solely to the ArriVent Compound, and all Intellectual Property rights therein (“ArriVent Inventions”), and (c) the Parties shall jointly own any Inventions that are not ArriVent Inventions or InnoCare Inventions, and all Intellectual Property rights therein, including Inventions relating to or covering the [***] (collectively, “Collaboration Inventions”), with each Party owning undivided half interest in and to the Collaboration Inventions, with the right to exploit, practice and license the Collaboration Inventions without the consent of, or any obligation to account to, the other Party, provided that such right shall be subject to other terms of this Agreement, including the restrictions on the use and disclosure of Clinical Study Results as set forth in Section 3.8.2.

 

9.3            Assignment; Further Assurances.

 

9.3.1            ArriVent Inventions. InnoCare shall promptly disclose to ArriVent all ArriVent Inventions made by or on behalf of InnoCare. InnoCare shall assign, and hereby assigns, to ArriVent all of InnoCare’s rights, title and interest in and to the ArriVent Inventions. InnoCare agrees to sign, execute and acknowledge or cause to be signed, executed and acknowledged, at ArriVent’s expense, any and all documents and to perform such acts as may be reasonably requested by ArriVent for the purposes of perfecting the foregoing assignments. For clarity, the aforementioned acts do not include the undertaking of additional scientific experiments or studies or actions that could reasonably be performed by ArriVent.

 

9.3.2            InnoCare Inventions. ArriVent shall promptly disclose to InnoCare all InnoCare Inventions, made by or on behalf of ArriVent. ArriVent shall assign, and hereby assigns, to InnoCare all of ArriVent’s rights, title and interest in and to the InnoCare Inventions. ArriVent agrees to sign, execute and acknowledge or cause to be signed, executed and acknowledged, at InnoCare’s expense, any and all documents and to perform such acts as may be reasonably requested by InnoCare for the purposes of perfecting the foregoing assignments. For clarity, the aforementioned acts do not include the undertaking of additional scientific experiments or studies or actions that could reasonably be performed by InnoCare.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

9.3.3            Collaboration Inventions. Each Party shall promptly disclose to the other Party all Collaboration Inventions made by or on behalf of the disclosing Party. Each Party shall assign, and hereby assigns, to the other Party half of its rights, title and interest in and to the Collaboration Inventions. Each Party agrees to sign, execute and acknowledge or cause to be signed, executed and acknowledged, at the other Party’s expense, any and all documents and to perform such acts as may be reasonably requested by such other Party for the purposes of perfecting the foregoing assignments. For clarity, the aforementioned acts do not include the undertaking of additional scientific experiments or studies or actions that could reasonably be performed by the requesting Party.

 

9.4            IP Management.

 

9.4.1            Definitions. As used in this Section 9.4, “prosecution” includes (a) all communication and other interaction with any patent office or patent authority having jurisdiction over a patent application in connection with pre-grant proceedings and (b) interferences, reexaminations, reissues, oppositions, and the like.

 

9.4.2            ArriVent Patent Rights. ArriVent shall have the sole right to file Patent applications claiming ArriVent Inventions and to prosecute, maintain, enforce and defend such Patent applications and the resulting Patents.

 

9.4.3            InnoCare Patent Rights. InnoCare shall have the sole right to file Patent applications claiming InnoCare Inventions and to prosecute, maintain, enforce and defend such Patent applications and the resulting Patents.

 

9.4.4            Collaboration Invention. Neither Party shall [***] without the Parties’ mutual agreement, provided that if [***]; provided further that, for clarity, such resulting [***]. In the event a Party [***] without the written agreement of the other Party in accordance with this Section 9.4.4, [***]. Unless specified above, all decisions and actions regarding filing a Collaboration Invention, and the prosecution and maintenance of any patent application filed (or maintained) by the Parties, and the maintenance, defense and enforcement of any patent issuing thereon, [***] unless otherwise agreed in writing [***].

 

10

License Grants.

 

10.1            Each Party hereby grants to the other Party a non-exclusive, worldwide, royalty-free, fully paid-up, transferrable and sublicensable license to the granting Party’s Background IP solely for the purpose of conducting the Clinical Study.

 

10.2            Each Party hereby grants the other Party a perpetual, non-exclusive, worldwide, royalty-free, fully paid-up, transferrable and sublicensable license under its interest in the Collaboration Inventions solely for such other Party to exploit and practice all rights under the Collaboration Inventions, provided that such right shall be subject to the restrictions on the use and disclosure of Clinical Study Results as set forth in Section 3.8.2.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

10.3            Except as expressly set forth in this Agreement, neither Party, by virtue of this Agreement, shall acquire any license or other interest, by implication or otherwise, in any Intellectual Property rights or materials owned or controlled by the other Party or its Affiliates.

 

11

Confidentiality.

 

11.1            Confidential Information. Each of InnoCare and ArriVent, as the Receiving Party agrees to hold in confidence any Confidential Information provided by or on behalf of the other Party, and neither Party shall use, disclose, or otherwise provide access to Confidential Information of the other Party except as reasonably necessary to fulfill such Party’s obligations or exercise its rights under this Agreement. Each Party agrees to take reasonable steps to protect the other Party’s Confidential Information from unauthorized use or disclosure. The foregoing confidentiality, non-use, and non-disclosure obligations of the Parties shall not apply to that portion of Disclosing Party’s Confidential Information which the Receiving Party can establish by competent proof was: (a) known to it at the time of disclosure hereunder, (b) is or becomes publicly known other than through any fault of the Receiving Party, (c) was in its possession at the time of disclosure hereunder, (d) was lawfully received by it on a non-confidential basis from a Third Party who did not obtain such information either directly or indirectly from the Disclosing Party, or (e) was subsequently and independently developed by or on behalf of the Receiving Party without use of or reference to Disclosing Party’s Confidential Information. Without limiting the foregoing, the Receiving Party may not, without the prior written permission of the Disclosing Party, disclose any Confidential Information of the Disclosing Party to any Third Party except to the extent disclosure (i) is required by Applicable Law (including as permitted by Section 11.5); (ii) is made in accordance with the terms of this Agreement to exercise the Receiving Party’s rights or fulfill its obligations hereunder; or (iii) is necessary for the conduct of the Clinical Study; provided that before making any such disclosure pursuant to clause (i), the Receiving Party shall provide reasonable advance notice to the Disclosing Party sufficient to allow the Disclosing Party the opportunity to seek a protective order or other appropriate remedy and/or waive compliance, in whole or in part, with the terms of this Agreement. Each Party shall have the right to disclose this Agreement to actual or potential investors, lenders, advisors, collaborators, acquirers and licensees as it reasonably necessary for due diligence purposes, provided that each such recipient is subject to obligations of confidentiality, non-use and non-disclosure at least as protective of such information as this Article 11.

 

11.2            Specific Items of Confidential Information. Without limiting the foregoing: (a) all Inventions that are solely owned by a Party shall constitute the Confidential Information of such Party; and (b) all Clinical Study Results and the existence and material terms of this Agreement constitute the Confidential Information of both of the Parties.

 

11.3            Personally Identifiable Data. All Confidential Information containing personally identifiable data shall be handled in accordance with all Applicable Laws pertaining to data protection and privacy and any applicable informed consents pursuant to which such data was collected.

 

11.4            Return or Destruction of Confidential Information. Upon termination or expiration of this Agreement, each Party and its Affiliates shall promptly return to the Disclosing Party or destroy, at the Disclosing Party’s direction, any Confidential Information belonging to the Disclosing Party; provided, however that the Receiving Party may retain one copy of such Confidential Information, solely for purposes of exercising the Receiving Party’s surviving rights hereunder, satisfying its obligations hereunder or complying with any legal proceeding or requirement with respect thereto, and provided further that the Receiving Party shall not be required to erase electronic files created in the ordinary course of business during automatic system back-up procedures pursuant to its electronic record retention and destruction practices that apply to its own general electronic files and information so long as such electronic files are (a) maintained only on centralized storage servers (and not on personal computers or devices), (b) not accessible by any of its personnel (other than its information technology specialists), and (c) are not otherwise accessed subsequently except with the written consent of the Disclosing Party or as required by law or legal process. Such retained copies of Confidential Information shall remain subject to the confidentiality and non-use obligations herein.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

11.5            Securities Laws Disclosures. The Parties hereby acknowledge and agree that either Party may be required by Applicable Laws to submit a copy of, or description of, this Agreement to the U.S. Securities and Exchange Commission (the “SEC”) or any national or sub-national securities regulatory body in any jurisdiction (collectively, the “Securities Regulators”). If a Party is required by Applicable Laws to submit a description of the terms of this Agreement to and/or file a copy of this Agreement with any Securities Regulator, such Party agrees to consult and coordinate with the other Party with respect to such disclosure and/or the preparation and submission of a confidential treatment request for this Agreement.  Notwithstanding the foregoing, if a Party is required by Applicable Laws to submit a description of the terms of this Agreement to and/or file a copy of this Agreement with any Securities Regulator and such Party has (a) promptly notified the other Party in writing of such requirement and any respective timing constraints, (b) provided copies of the proposed disclosure or filing to the other Party reasonably in advance of such filing or other disclosure and (c) given the other Party a reasonable time under the circumstances to comment upon and request confidential treatment for such disclosure, then such Party shall have the right to make such disclosure or filing at the time and in the manner reasonably determined by its counsel to be required by Applicable Laws or the applicable Securities Regulator.  If a Party seeks to make a disclosure or filing as set forth in this Section 11.5 and the other Party provides comments within the respective time periods or constraints specified herein, the Party seeking to make such disclosure or filing shall in good faith consider incorporating such comments.

 

11.6            Survival of Confidentiality Obligations. The confidentiality, non-use and non-disclosure obligations of the Parties set forth in this Article 11 shall survive for [***] after the expiration or termination of this Agreement.

 

12

Publications; Press Releases.

 

12.1            Clinical Trial Registry. InnoCare may register the Clinical Study with the Clinical Trials Registry located at www.clinicaltrials.gov and www.cde.org.cn in accordance with Applicable Law.

 

12.2            Publication. Neither Party shall publish the Clinical Study Results without the other Party’s prior written consent, subject to a Party’s right to file a patent application for a Collaboration Invention as provided under Section 9.4.4.  InnoCare shall require that each investigator and site participating in the Clinical Study refrain from any publication of the Clinical Study Results without InnoCare’s prior written consent, which will not be provided without ArriVent’s prior written consent pursuant to this Section 12.2.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

12.3            Press Releases. The Parties may mutually agree on the content and timing of a press release within a reasonable time following the Effective Date of this Agreement. Thereafter, unless otherwise required by Applicable Law (including as permitted by Section 11.5) or as expressly permitted hereunder, neither Party shall make any public announcement concerning this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld, conditioned or delayed. To the extent a Party desires to make such public announcement, such Party shall provide the other Party with a draft thereof at least [***] prior to the date on which such Party would like to make the public announcement.

 

13

Representations and Warranties.

 

13.1            Due Authorization. Each of InnoCare and ArriVent represents and warrants to the other that: (a) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (b) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder; and (c) this Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with its terms.

 

13.2            ArriVent Compound. ArriVent hereby represents and warrants to InnoCare that as of the Effective Date: ArriVent has the full right, power and authority to (a) grant all of the licenses granted to InnoCare under this Agreement and (b) to supply the ArriVent Compound to InnoCare for the uses contemplated herein.

 

13.3            InnoCare Compound. InnoCare hereby represents and warrants to ArriVent that as of the Effective Date: InnoCare has the full right, power and authority to (a) grant all of the licenses granted to ArriVent under this Agreement and (b) use the InnoCare Compound for the uses contemplated herein.

 

13.4            Results. Neither Party makes any representations or warranties that the Clinical Study shall lead to any particular results, nor is the success of the Clinical Study guaranteed.

 

13.5            Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, EITHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

14

Indemnification; Limitation of Liability.

 

14.1            Indemnification.

 

14.1.1            Indemnification by ArriVent. ArriVent agrees to defend, indemnify and hold harmless InnoCare, its Affiliates, and its and their employees, directors, contractors and agents (each, an “InnoCare Indemnitee”) from and against any loss, damage, reasonable costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with any claim, proceeding, or investigation by a Third Party (each, a “Claim”) against such InnoCare Indemnitee, to the extent such Claim was caused by or resulting from (a) negligence or willful misconduct by ArriVent; (b) a breach by ArriVent of this Agreement; (c) a breach of Applicable Law by ArriVent in connection with this Agreement; or (d) ArriVent’s use of the Clinical Study Results, Clinical Study Reports, or Inventions; provided in each case that ArriVent shall not be obligated to indemnify InnoCare pursuant to this Section 14.1.1 to the extent that any such Claim is caused by (x) the negligence or willful misconduct by InnoCare, (y) a breach of Applicable Law by InnoCare in connection with this Agreement; or (z) breach of this Agreement by InnoCare.

 

14.1.2            Indemnification by InnoCare. InnoCare agrees to defend, indemnify and hold harmless ArriVent, its Affiliates, and its and their employees and directors (each, a “ArriVent Indemnitee” and, together with the InnoCare Indemnitees, the “Indemnitees”) from and against any from and against any Claim against such ArriVent Indemnitee to the extent that such Claim was caused by or resulting from (a) negligence or willful misconduct by InnoCare; (b) a breach by InnoCare of this Agreement; (c) a breach of Applicable Law by InnoCare in connection with this Agreement; or (d) InnoCare’s use of the Clinical Study Results, Clinical Study Reports, or Inventions; provided in each case that InnoCare shall not be obligated to indemnify ArriVent pursuant to this Section 14.1.2 to the extent that any such Claim is caused by (x) the negligence or willful misconduct by ArriVent, (y) a breach of Applicable Law by ArriVent in connection with this Agreement; or (z) breach of this Agreement by ArriVent.

 

14.2            Procedure. The obligations of ArriVent and InnoCare under Section 14.1 are conditioned upon the delivery of written notice from the Indemnitee to the indemnifying Party of any potential Claim within a reasonable time after a Party becomes aware of such potential Claim. The indemnifying Party shall have the right to assume the defense of such Claim; provided that the indemnified Party may assume control of such defense to the extent the indemnifying Party does not do so in a timely manner, at the indemnifying Party’s cost and expense. If the indemnifying Party controls the defense of the Claim, the indemnified Party may participate in the defense thereof, with its own counsel, at its sole cost and expense. The Party controlling such defense (the “Defending Party”) shall keep the other Party (the “Other Party”) advised of the status of such Claim and the defense thereof and shall consider recommendations made by the Other Party with respect thereto. The Defending Party shall not agree to any settlement of such Claim without the prior written consent of the Other Party, which shall not be unreasonably withheld, conditioned or delayed. The Defending Party, but solely to the extent the Defending Party is also the indemnifying Party, shall not agree to any settlement of such Claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Other Party from all liability with respect thereto or that imposes any liability or obligation on the Other Party without the prior written consent 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) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

14.3            Subject Injury. As between the Parties, [***] shall not be liable to any Clinical Study subject for any injury, illness or side effect experienced or alleged to be experienced by such subject due to the subject’s participation in the Clinical Study, including any injury, illness or side effect caused by (a) any negligence or misconduct of [***], (b) [***], or (c) [***].

 

14.4            Insurance. [***] shall maintain, during the Term and for a commercially reasonable period thereafter, insurance that is of a type and in an amount sufficient to cover its liabilities and obligations hereunder, including its indemnification obligations. Each Party shall provide to the other Party certificates of such insurance upon request. [***].

 

14.5            LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY (OR ANY OF ITS AFFILIATES OR SUBCONTRACTORS) BE LIABLE TO THE OTHER PARTY UNDER ANY THEORY FOR, NOR SHALL ANY INDEMNIFIED PARTY HAVE THE RIGHT TO RECOVER, ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR OTHER SIMILAR DAMAGES IN CONNECTION WITH THIS AGREEMENT, EXCEPT THAT SUCH LIMITATION SHALL NOT APPLY TO DAMAGES PAID OR PAYABLE TO A THIRD PARTY BY AN INDEMNIFIED PARTY FOR WHICH THE INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION HEREUNDER OR WITH RESPECT TO DAMAGES ARISING OUT OF OR RELATED TO A PARTY’S BREACH OF ARTICLE 11.

 

15

Term and Termination.

 

15.1            Term. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect until delivery of the Collaboration Report, unless terminated earlier by either Party pursuant to this Article 15 (the “Term”).

 

15.2            Termination for Material Breach. Either Party may terminate this Agreement if the other Party commits a material breach of this Agreement, and such material breach continues for [***] after receipt of written notice thereof from the non-breaching Party.

 

15.3            Other Termination. In the event that a Party in good faith believes that there is a material safety issue in the conduct of the Clinical Study and notifies the other Party in writing of the grounds for such belief, the Parties shall promptly negotiate changes to the Protocol requested by the first party to address such safety issue reasonably and in good faith. If the Parties fail to agree on and incorporate any such changes to the reasonable satisfaction of each Party, either Party may terminate this Agreement immediately upon written notice to the other Party. Further, ArriVent may terminate this Agreement as of the date of its opt-out pursuant to Section 6.4.2.

 

15.4            Return of ArriVent Compound. In the event that this Agreement is terminated, or in the event InnoCare remains in possession (including through any Affiliate or Subcontractor) of ArriVent Compound at the time this Agreement expires, except as set forth in Section 6.4.2, InnoCare shall, at ArriVent’s sole discretion, promptly either return or destroy all unused ArriVent Compound provided to InnoCare hereunder, pursuant to ArriVent’s instructions.

 

15.5            No Prejudice. Termination of this Agreement shall be without prejudice to any claim or right of action of either Party against the other Party for any prior breach of this Agreement.

 

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15.6           Effects of Termination. The following provisions shall survive the expiration or termination of this Agreement: Sections 3.8, 5, 6, 7, 9, 10.2, 11, 12, 14, 15.6 and 16. Except as expressly set forth herein, all rights and obligations of the Parties shall terminate on the expiration or termination of this Agreement.

 

16

Miscellaneous.

 

16.1            Use of Name. Except as otherwise provided herein or as required by Applicable Law or for the performance of the Clinical Study, neither Party shall have any right, express or implied, to use in any manner the name or other designation of the other Party or any other trade name, trademark or logo of the other Party for any purpose in connection with the performance of this Agreement without the other Party’s prior written consent.

 

16.2            Force Majeure. If, in the performance of this Agreement, one of the Parties is prevented, hindered or delayed by reason of any cause beyond such Party’s reasonable control (e.g., war, riots, fire, strike, acts of terror, governmental laws), such Party shall be excused from performance to the extent that it is so prevented, hindered or delayed (“Force Majeure”). The non-performing Party shall notify the other Party of such Force Majeure within [***] after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform.

 

16.3            Entire Agreement; Amendment; Waiver. This Agreement, together with the Appendices and Schedules hereto and the Related Agreements, constitutes the sole, full and complete agreement by and between the Parties with respect to the subject matter of this Agreement, and all prior agreements, understandings, promises and representations, whether written or oral, with respect thereto are superseded by this Agreement. In the event of a conflict between a Related Agreement and this Agreement, the terms of this Agreement shall control. No amendments, changes, additions, deletions or modifications to or of this Agreement shall be valid unless reduced to writing and signed by the Parties hereto. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise.

 

16.4            Assignment and Affiliates. Neither Party shall assign or transfer this Agreement without the prior written consent of the other Party, not to be unreasonably withheld, conditioned or delayed; provided, however, that either Party may assign or transfer all or any part of this Agreement to one or more of its Affiliates or to a successor in interest to or acquirer of all or substantially all of its business or assets related to this Agreement without the prior written consent of the other Party. Each assignee shall agree in writing to assume all obligations of the assigning Party under this Agreement. Any purported assignment in violation of this Section 16.4 shall be null and void.

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

16.5            Invalid Provision. If any provision of this Agreement is held to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision. In lieu of the illegal, invalid or unenforceable provision, the Parties shall negotiate in good faith to agree upon a reasonable provision that is legal, valid and enforceable to carry out as nearly as practicable the original intention of the entire Agreement.

 

16.6            Governing Law; Dispute Resolution.

 

16.6.1            This Agreement shall be governed by and construed in accordance with the substantive laws of the State of New York, without giving effect to its choice of law principles. The Parties shall attempt in good faith to settle all disputes arising out of or in connection with this Agreement in an amicable manner. Any claim, dispute or controversy arising out of or relating to this Agreement, including the breach, termination or validity hereof or thereof, shall be resolved in the state and federal courts located in San Francisco, California.

 

16.6.2            Nothing contained in this Agreement shall deny either Party the right to seek injunctive or other equitable relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed or maintained notwithstanding any ongoing discussions between the Parties.

 

16.7            Notices. All notices or other communications that are required or permitted hereunder shall be in writing and delivered personally, sent by email (deemed delivered upon receipt of a confirmatory email by the receiving Party), or sent by internationally-recognized overnight courier addressed as follows:

 

If to InnoCare, to:

 

Building 8, No. 8 Life Science Park Road

ZGC Life Science Park, Changping District

Beijing 102206 PR China

Attention: [***]

Email: [***]

 

With copies to:

 

Beijing InnoCare Pharma Tech Co., Ltd.

Attention: Legal Department

Email: [***]

 

If to ArriVent, to:

 

ArriVent BioPharma Inc.

18 Campus Blvd.,

Suite 100 

Newtown Square, PA 19073-3269

Attention:     [***]

Email:            [***]

 

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With copies to:

 

ArriVent BioPharma Inc.

Attn: Legal

Email: [***]

 

16.8            Relationship of the Parties. The relationship between the Parties is and shall be that of independent contractors, and does not and shall not constitute a partnership, joint venture, agency or fiduciary relationship. Neither Party shall have the authority to make any statements, representations or commitments of any kind, or take any actions, that are binding on the other Party, except with the prior written consent of the other Party to do so. All Persons employed by a Party shall be the employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

 

16.9            Counterparts and Due Execution. This Agreement and any amendment may be executed in any number of counterparts (including by way of facsimile or electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, notwithstanding any electronic transmission, storage and printing of copies of this Agreement from computers or printers. When executed by the Parties, this Agreement shall constitute an original instrument, notwithstanding any electronic transmission, storage and printing of copies of this Agreement from computers or printers. For clarity, facsimile signatures and signatures transmitted via PDF shall be treated as original signatures.

 

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IN WITNESS WHEREOF, the respective representatives of the Parties have executed this Agreement as of the Effective Date.

 

ArriVent BioPharma Inc.

 

By:

/s/ Zhengbin (Bing Yao)

 

Zhengbin (Bing Yao)
Name
CEO
Title
7/13/2023
Date

 

Beijing InnoCare Pharma Tech Co., Ltd.

 

By:

/s/ Jisong Cui

 

Jisong Cui
Name
CEO
Title
Date

 

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Schedule 4.1 Protocol Synopsis

 

1

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1.1

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[***]   [***]

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1.2

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[***]

 

[***]

 

[***].

 

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1.3

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Schedule 6.1 Clinical Study Budget

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Schedule 8.1 Estimated Amount of Clinical Supply

 

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[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Schedule 8.2 Allist Supply Agreement

 

[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

 

Exhibit 21.1

 

Subsidiaries of the Registrant

 

None.

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the use of our report dated August 25, 2023, except for Notes 3(a) and 7, as to which the date is October 31, 2023, with respect to the financial statements of ArriVent BioPharma, Inc. included herein and to the reference to our firm under the heading “Experts” in the prospectus.

 

/s/ KPMG LLP

 

Philadelphia, Pennsylvania

January 5, 2024

 

 

 

 

Exhibit 107

 

Calculation of Filing Fee Tables

 

Form S-1

 

ArriVent BioPharma, Inc.

 

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(3)
Fees to Be Paid	Equity	Common Stock, par value $0.0001 per share	457(o)	—	—	$100,000,000	0.00014760	$14,760.00
	Total Offering Amounts					$100,000,000	—	$14,760.00
	Net Fee Due					—	—	$14,760.00

 

(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (Securities Act).

 

(2)	Includes the aggregate offering price of additional shares that the underwriters have the option to purchase, if any.

 

(3)	Calculated pursuant to Rule 457(o) under the Securities Act based on an estimate of the proposed maximum aggregate offering price.