The License Agreement will expire upon the expiration of the Royalty Term. The Royalty
Term means the period beginning on the date of the first commercial sale of the Product and ends on the latest of (i) the expiration of the last valid claim of the patents covering the Product, (ii) ten years after the first
commercial sale of the Product, (iii) the expiration of regulatory exclusivity for the Product and (iv) the Biosimilar Entry Date (as defined in the License Agreement). The License Agreement may be terminated by either party for material
breach, upon a partys insolvency or bankruptcy, or for a safety concern or clinical failure.
Vyera has the right to terminate the
License Agreement (i) on or after the second anniversary of the effective date of the License Agreement upon written notice to the Company in the event the approval (Regulatory Approval) by the U.S. Food and Drug Administration of
the Biologics License Application for the Product for the manufacture and sale of the Product in the Territory for the Initial Indication (as defined in the License Agreement) has not been received by such second anniversary, (ii) if Vyera
fails to achieve certain aggregate Net Sales (as defined in the License Agreement) of the Product during the period beginning on the date of first commercial sale and ending on the date that is two years from the date of the first commercial sale,
and (iii) at Vyeras convenience following the second anniversary of the first commercial sale of the Product with 180 days written notice.
The Company has the right to terminate the License Agreement (i) if Vyera challenges the validity of any patent controlled by the
Company, (ii) if Vyera fails to make a first commercial sale within 60 days following the later of Regulatory Approval of the Product and the date the Company supplies (or is ready to supply) Vyera with the Product for sale pursuant to the
Supply Agreement, (iii) upon Vyeras breach of certain obligations and covenants contained in the License Agreement, (iv) upon Vyeras failure to meet certain minimum requirements contained in the Commercialization Plan (as
defined in the License Agreement), subject to a cure period and (v) upon Vyeras failure to make the Equity Investment (as defined below) within seven days of the effective date of the License Agreement.
The License Agreement also contains customary representations, warranties and covenants by both parties, as well as customary provisions
relating to indemnification, confidentiality and other matters.
Supply Agreement
Pursuant to the Supply Agreement, the Company has agreed to supply to Vyera and Vyera has agreed to purchase from the Company its requirements
of Product for commercialization under the License Agreement. The price that Vyera will pay for purchases of Product is capped at an agreed upon amount that will rise over time in accordance with the Producer Price Index for Pharmaceutical
Preparation Manufacturing published by the United States Department of Labor, Bureau of Labor Statistics. Under the terms of the Supply Agreement, Vyera is obligated to make purchases of the Product from the Company pursuant to
Vyeras forecasted requirements, updated monthly, which will contain a binding period that will increase over the course of the first two years following receipt of Regulatory Approval of the Product for the Initial Indication. The Supply
Agreement contains customary representations, warranties and covenants, including representations and warranties relating to compliance of the Product with specifications and applicable governmental rules and covenants with respect to the
rejection of delivered Product and non-conforming Product, product recalls and regulatory communications.
The Supply Agreement will expire at the expiration of the Royalty Term, provided that Vyera shall have the right, in its sole discretion, to
extend the term of the Supply Agreement for so long as Vyera agrees to continue to pay the Company an agreed-upon royalty payment. The Supply Agreement will automatically terminate upon the termination of the License Agreement in the event that the
termination of the License Agreement occurs prior to the expiration of the Royalty Term. The Supply Agreement may be terminated by either party for material breach or upon a partys insolvency or bankruptcy.
Copies of the License Agreement and the Supply Agreement will be filed as exhibits in an amendment to this Current Report on Form 8-K or in a subsequent periodic report to be filed under the Securities Exchange Act of 1934.