Exhibit 3.1

 

THE COMPANIES ACT 2006

 

PUBLIC COMPANY LIMITED BY SHARES

 

NEW

 

ARTICLES OF ASSOCIATION

 

of

 

VACCITECH PLC

 

(Adopted by a special resolution passed on 1 April 2021)  

 

 

 

TABLE OF CONTENTS

 

Page

 

1.	Introduction	2
2.	Definitions	3
3.	Share capital	11
4.	Dividends	12
5.	Liquidation preference	13
6.	Exit provisions	14
7.	Votes in general meeting	14
8.	Consolidation of Shares	15
9.	Conversion of Series A Shares and Series B Shares	15
10.	Anti-Dilution protection	17
11.	Deferred Shares	19
12.	Variation of rights	20
13.	Allotment of new shares or other securities: pre-emption	20
14.	Transfers of Shares - general	21
15.	Permitted Transfers	23
16.	Transfers of Shares subject to pre-emption rights	25
17.	Valuation of Shares	28
18.	Compulsory transfers - general	29
19.	Departing employees	29
20.	Mandatory Offer on a Change of Control	30
21.	Co-Sale right	31
22.	Drag-along	33
23.	Holding Company Reorganisation	36
24.	General meetings	36
25.	Proxies	37
26.	Directors' borrowing powers	37
27.	Alternate Directors	38
28.	Number of Directors	39
29.	Appointment of Directors	39
30.	Disqualification of Directors	39
31.	Proceedings of Directors	40
32.	Directors' interests	40
33.	Notices	44
34.	Indemnities and insurance	45
35.	Data Protection	46
36.	Secretary	47
37.	Lien	47
38.	Call Notices	48
39.	Forfeiture of Shares	49
40.	Surrender of Shares	51
41.	Authority to capitalise and appropriation of capitalised sums	51
42.	Lock-Up	52
43.	Listing	52
44.	Put Option	53

 

 

THE COMPANIES ACT 2006

 

PUBLIC COMPANY LIMITED BY SHARES

 

NEW

 

ARTICLES OF ASSOCIATION

 

of VACCITECH PLC

 

(Adopted by a special resolution passed on 1 April 2021)

 

1.

Introduction

 

1.1

The model articles for public companies limited by shares contained or incorporated in Schedule 3 to the Companies (Model Articles) Regulations 2008 (SI 2008/3229) as amended prior to the date of adoption of these Articles (the "Model Articles") shall apply to the Company, save insofar as they are varied or excluded by, or are inconsistent with, the following Articles.

 

1.2

In these Articles and the Model Articles any reference to any statutory provision shall be deemed to include a reference to each and every statutory amendment, modification, re-enactment and extension thereof for the time being in force.

 

1.3

In these Articles:

 

(a)

Article headings are used for convenience only and shall not affect the construction or interpretation of these Articles;

 

(b)

words denoting the singular include the plural and vice versa and reference to one gender includes the other gender and neuter and vice versa;

 

(c)

articles 7(b), 8(6), 9(3), 10(2), 13(3), 14, 16, 21, 23, 26, 27, 37, 41, 50, 51, 63(5), 64, 65 to 68, 70(5) to 70(7), 76(2), 80, 84, 85 and 86 of the Model Articles shall not apply to the Company.

 

(d)

reference to "issued Shares" of any class shall exclude any Shares of that class held as Treasury Shares from time to time, unless stated otherwise; and

 

(e)

reference to the "holders" of Shares or a class of Share shall exclude the Company holding Treasury Shares from time to time, unless stated otherwise.

 

1.4

In respect of any actions or matters requiring or seeking the acceptance, approval, agreement, consent or words having similar effect of an Investor Director under these Articles, if at any time an Investor Director has not been appointed by a person entitled to make such an appointment (each such person, an "Appointer"), or an Investor Director declares in writing to the Company and his Appointer that he considers that providing such consent gives rise or may give rise to a conflict of interest to his duties as a Director, such action or matter shall require the consent of the relevant Appointer.

 

1.5

Where there is reference to Series A Shares or Series B Shares under these Articles, this reference shall be treated, where appropriate in the context, on an as converted basis if the Conversion Ratio has been adjusted.

 

1.6

Where there is reference under these Articles to a proportion or percentage of the Shares or Equity Shares or any class of classes of Shares, this reference shall (unless the context otherwise requires) be treated as a reference to a proportion or percentage by number and not by nominal value.

 

 

2.

Definitions

 

In these Articles the following words and expressions shall have the following meanings:

 

"Act” means the Companies Act 2006 (as amended from time to time);

 

"Acting in Concert" has the meaning given to it in The City Code on Takeovers and Mergers published by the Panel on Takeovers and Mergers (as amended from time to time);

 

"Actions" shall have the meaning given in Article 6.3;

 

“Admission Date” means the date upon which an IPO becomes effective;

 

"Anti-Dilution Shares" means the Series A Anti-Dilution Shares and/or the Series B Anti-Dilution Shares;

 

"Arrears" means in relation to any Share, all arrears of any dividend or other sums payable in respect of that Share, whether or not earned or declared and irrespective of whether or not the Company has had at any time sufficient Available Profits to pay such dividend or sums, together with all interest and other amounts payable on that Share;

 

"Asset Sale" means the disposal by the Company (in one transaction or a series of related transactions) of all or substantially all of its undertaking and assets (where disposal may include, without limitation, the grant by the Company of an exclusive licence of intellectual property not entered into in the ordinary course of business) except where such disposal is to a wholly owned subsidiary of the Company;

 

"Associate" in relation to any person means:

 

(a)

any person who is an associate of that person and the question of whether a person is an associate of another is to be determined in accordance with section 435 of the Insolvency Act 1986 and (whether or not an associate as so determined);

 

(b)

any Member of the same Group;

 

(c)

any Member of the same Fund Group;

 

“Associated Government Entities” means:

 

(a)

any UK Government departments, including their executive agencies, other subsidiary bodies and other parts of UK Government;

 

(b)

companies wholly or partly owned by UK Government departments and their subsidiaries;

 

(c)

non-departmental public bodies, other public bodies, public corporations and their subsidiary bodies sponsored by UK Government departments; and/or

 

(d)

any successors to any of the entities set out in (a), (b) and (c) above or any new bodies which fall within the same criteria;

 

"Auditors" means the auditors of the Company from time to time, or, if the Company has not appointed auditors, its accountants for the lime being;

 

"Available Profits" means profits available for distribution within the meaning of part 23 of the Act;

 

"Bad Leaver" means a person who ceases to be an Employee as a consequence of:

 

 

(a)

such person's dismissal as an Employee for cause, where "cause" shall mean:

 

(i)

his fraud or dishonesty;

 

(ii)

his having committed any crime punishable by imprisonment;

 

(b)

such person's resignation as an Employee in circumstances where a Group Company would have been entitled to dismiss such person for cause (as defined in paragraph (a) above,

 

provided that, in each case, the Board (acting with Investor Director Consent) may decide that a person is not a Bad Leaver.

 

"Board" means the board of Directors and any committee of the board constituted for the purpose of taking any action or decision contemplated by these Articles;

 

"Bonus Issue" or "Reorganisation" means any return of capital, bonus issue of shares or other securities of the Company by way of capitalisation of profits or reserves (other than a capitalisation issue in substitution for or as an alternative to a cash dividend which is made available to the Series A Shareholders and/or Series B Shareholders) or any issue of Anti-Dilution Shares pursuant to Article 10.3(a) or any consolidation or sub-division or redenomination or any repurchase or redemption of shares (other than Series A Shares and/or Series B Shares) or any variation in the subscription price or conversion rate applicable to any other outstanding shares of the Company, in each case other than in respect of the grant of options under any Share Option Plan(s);

 

"Business Day" means a day on which English clearing banks are ordinarily open for the transaction of normal banking business in the City of London (other than a Saturday or Sunday);

 

"Civil Partner" means in relation to a Shareholder, a civil partner (as defined in the Civil Partnership Act 2004) of the Shareholder;

 

"Commencement Date" means, in the case of any Employee other than a Founder, the date on which the employment or consultancy of the relevant Employee with the Company or any member of the Group commences;

 

"Company" means Vaccitech plc;

 

"Company's Lien" has the meaning given in Article 37.1;

 

"Conditions" has the meaning given in Article 9.1;

 

"Controlling Interest" means an interest in shares giving to the holder or holders control of the Company within the meaning of section 1124 of the CTA 2010;

 

"Conversion Date" has the meanings given in Article 9.1 and Article 9.3 (as applicable);

 

"Conversion Ratio" means one Ordinary Share and nine Deferred B Shares for each Series A Share or Series B Share (as applicable), subject to adjustment from time to time in accordance with Article 9.10;

 

"CTA 2010" means the Corporation Tax Act 2010;

 

"Date of Adoption" means the date on which these Articles were adopted;

 

“Deferred A Shares” means deferred A shares of £1.00 each in the capital of the Company from time to time;

 

 

“Deferred B Shares” means deferred B shares of £0.01 each in the capital of the Company from time to time;

 

"Deferred Shares" means the Deferred A Shares and the Deferred B Shares from time to time;

 

"Director(s)" means a director or directors of the Company from time to time;

 

"Effective Termination Date" means the date on which the Employee's employment or consultancy terminates;

 

"electronic address" has the same meaning as in section 333 of the Act;

 

"electronic form" and "electronic means" have the same meaning as in section 1168 of the Act;

 

"Eligible Director" means a Director who would be entitled to vote on a matter had it been proposed as a resolution at a meeting of the Directors;

 

"Employee" means an individual who is employed by or who provides consultancy services to, the Company or any member of the Group;

 

"Employee Option Shares" means any Ordinary Shares that an Employee holds as result of exercising option(s) under any Share Option Plan(s);

 

"Employee Shares" in relation to an Employee means all Ordinary Shares held by:

 

(a)

the Employee in question; and

 

(b)

any Permitted Transferee of that Employee other than those Ordinary Shares held by those persons that an Investor Majority declares itself satisfied were not acquired directly or indirectly from the Employee or by reason of that person's relationship with the Employee;

 

"Encumbrance" means any mortgage, charge, security, interest, lien, pledge, assignment by way of security, equity, claim, right of pre-emption, option, covenant, restriction, reservation, lease, trust, order, decree, judgment, title defect (including without limitation any retention of title claim), conflicting claim of ownership or any other encumbrance of any nature whatsoever (whether or not perfected other than liens arising by operation of law);

 

"Equity Securities" has the meaning given in sections 560(1) to (3) inclusive of the Act and for the avoidance of doubt an allotment of Equity Securities includes a transfer of shares which immediately before such transfer were held by the Company as Treasury Shares;

 

"Equity Shares" means the Shares other than the Deferred Shares;

 

"Exercising Investor" means a Series A Exercising Investor and/or Series B Exercising Investor;

 

"Exit" means a Share Sale, an Asset Sale or an IPO;

 

"Expert Valuer" is as determined in accordance with Article 17.2;

 

"Fair Value" is as determined in accordance with Article 17;

 

"Family Trusts" means as regards any particular individual member or deceased or former individual member, trusts (whether arising under a settlement, declaration of trust or other instrument by whomsoever or wheresoever made or under a testamentary disposition or on an intestacy) under which no immediate beneficial interest in any of the shares in question is for the time being vested in any person other than the individual and/or Privileged Relations of that individual; and so that for this purpose a person shall be considered to be beneficially interested in a share if such share or the income thereof is liable to be transferred or paid or applied or appointed to or for the benefit of such person or any voting or other rights attaching thereto are exercisable by or as directed by such person pursuant to the terms of the relevant trusts or in consequence of an exercise of a power or discretion conferred thereby on any person or persons;

 

 

"Financial Year" has the meaning set out in section 390 of the Act;

 

"Founders" means Adrian Hill and Sarah Gilbert;

 

"Fractional Holders" has the meaning given in Article 9.11;

 

"Fund Manager" means a person whose principal business is to make, manage or advise upon investments in securities;

 

“Future Fund” means UK FF Nominees Limited and its Permitted Transferees;

 

"Good Leaver" means a person who ceases to be an Employee and who is not a Bad Leaver and shall include, without limitation, when the Board (including Investor Director Consent) determines that a person is not a Bad Leaver;

 

"Group" means the Company and its Subsidiary Undertaking(s) (if any) from time to time and "Group Company" shall be construed accordingly;

 

"GV" means GV Europe 2014, L.P. and GV 2017, L.P. and their respective Permitted Transferees;

 

"hard copy form" has the same meaning as in section 1168 of the Act;

 

"Holding Company" means a newly formed holding company, incorporated in any jurisdiction, which has no previous trading history and has resulted from a Holding Company Reorganisation;

 

“Holding Company Reorganisation” means any transaction involving the issue of shares in the capital of a Holding Company to the Shareholders, the object or intent of which is to interpose the Holding Company as the sole owner of the Company such that immediately subsequent to such transaction:

 

(a)

the membership, pro rata shareholdings and classes of shares comprised in the Holding Company is substantially the same as that of the Company (excluding Treasury Shares) immediately prior to such transaction (save for the fact that such shares are issued by a different company);

 

(b)

the rights attaching to each class of share comprised in the Holding Company are substantially the same as those rights attaching to the like class of share comprised in the share capital of the Company immediately prior to such transaction (save for the fact that such shares are issued by a different company and/or in a different jurisdiction with attendant differences in company law); and

 

(c)

the constitutional documents of the Holding Company are the same in substantive effect as the articles of association of the Company immediately prior to such acquisition (save for the fact that they apply in respect of a different company, and as to matters and modifications to reflect that the Holding Company may be incorporated in a jurisdiction other than England and Wales);

 

“Institutional Investor” means any fund, partnership, body corporate, trust or other person or entity whose principal business is to make investments or a person whose business is to make, manage or advise upon investments for any of the foregoing, other than an Institutional Investor who the Board determines in its reasonable discretion is a competitor with the business of the Company;

 

 

"Investment Fund" means GV, OSI, the Lead Series B Investor and any other fund, partnership, company, syndicate or other entity whose business is managed by a Fund Manager;

 

"Investor Directors" means the OSI Director and the Lead Series B Investor Director;

 

"Investor Director Consent" means the prior written consent of any one Investor Director;

 

"Investor Majority" means (i) a Series A Majority; and (ii) a Series B Majority;

 

"Investor Majority Consent" means the prior written consent of the Investor Majority;

 

"Investors" has the meaning given in the Shareholders' Agreement;

 

"IPO" means the admission of all or any of the Shares or securities representing those shares (including without limitation depositary interests, American depositary receipts, American depositary shares and/or other instruments) on NASDAQ or the New York Stock Exchange or the Official List of the United Kingdom Listing Authority or the AIM Market operated by the London Stock Exchange Pie or any other recognised investment exchange (as defined in section 285 of the Financial Services and Markets Act 2000);

 

"ITEPA" means Income Tax (Earnings and Pensions) Act 2003;

 

"Issue Price" means the price at which the relevant Share is issued, including any premium;

 

“Lead Series B Investor” means Prudential Credit Opportunities SCSp (an investment vehicle advised by M&G Alternatives Investment Management Ltd);

 

"Lead Series B Investor Director" means the director of the Company nominated by the Lead Series B Investor pursuant to Article 28.1(d);

 

"Leaver's Percentage" means, in relation to and for the purposes of determining the number of Employee Shares (other than Employee Option Shares) that are required (pursuant to Article 19) to be converted into Deferred B Shares or to be transferred as a result of an Employee (other than a Founder) ceasing to be an Employee within the Relevant Period, the percentage (rounded to the nearest two decimal places) as calculated using the formula below:

 

100 - ((1/48 x 100) x NM)

 

where NM = number of full calendar months from the Commencement Date to the Effective Termination Date such that the Leaver's Percentage shall be zero on the first day of the 49th month after the Commencement Date and thereafter;

 

"Lien Enforcement Notice" has the meaning given in Article 37.3;

 

"a Member of the same Fund Group" means if the Shareholder is an Investment Fund or is a nominee of an Investment Fund:

 

(a)

any participant or partner in or member of any such Investment Fund or the holders of any unit trust which is a participant or partner in or member of any Investment Fund (but only in connection with the dissolution of the Investment Fund or any distribution of assets of the Investment Fund pursuant to the operation of the Investment Fund in the ordinary course of business);

 

(b)

any Investment Fund managed or advised by that Fund Manager (or a Fund Manager in the same group);

 

 

(c)

any Parent Undertaking or Subsidiary Undertaking of that Fund Manager, or any Subsidiary Undertaking of any Parent Undertaking of that Fund Manager; or

 

(d)

any trustee, nominee or custodian of such Investment Fund and vice versa;

 

"a Member of the same Group" means as regards any company, a company which is from time to time a Parent Undertaking or a Subsidiary Undertaking of that company or a Subsidiary Undertaking of any such Parent Undertaking;

 

"Member of the University Group" means the University, its subsidiaries, any colleges of the University and any Investment Fund in respect of which the University or any of its subsidiaries or any of the colleges of the University acts as a partner, investor, shareholder, adviser, manager, trustee or unit holder and shall include but is not limited to Oxford University Hospitals NHS Foundation Trust and the Wellcome Trust (but excluding OSI);

 

"NASDAQ" means the NASDAQ Stock Market of the NASDAQ OMX Group Inc.;

 

"New Securities" means any shares or other securities convertible into, or carrying the right to subscribe for, those shares issued by the Company after the Date of Adoption (other than shares or securities issued as a result of the events set out in Article 13.7) excluding for the avoidance of doubt any Treasury Shares transferred by the Company after the Date of Adoption;

 

"Offer" has the meaning set out in Article 20.2;

 

"Offer By Way of Rights" has the meaning set out in Article 9.13;

 

"Offer Period" has the meaning set out in Article 20.3;

 

"Ordinary Shareholders" means the holders from time to time of the Ordinary Shares (but excludes the Company holding Treasury Shares);

 

"Ordinary Shares" means the ordinary shares of £0.01 each in the capital of the Company from time to time;

 

"Original Shareholder" has the meaning set out in Article 15.1;

 

"OSI" means Oxford Sciences Innovation pie and its Permitted Transferees;

 

"OSI Director" means the director of the Company nominated by OSI pursuant to Article 29.1(a);

 

"Permitted Transfer" means a transfer of Shares in accordance with Article 15;

 

"Permitted Transferee" means:

 

(a)

in relation to a Shareholder who is an individual, any of his Privileged Relations, Trustees or Qualifying Companies provided that the transfer is effected for good faith estate planning reasons;

 

(b)

in relation to a Shareholder which is an undertaking (as defined in section 1161(1) of the Act) means any Member of the same Group;

 

(c)

in relation to a Shareholder which is an Investment Fund means any Member of the same Fund Group; and

 

(d)

in relation to an Investor:

 

(i)

to any Member of the same Group;

 

 

(ii)

to any Member of the same Fund Group; or

 

(iii)

any nominee of that Investor;

 

(e)

in relation to the University, OSI; and

 

(f)

in relation to any Member of University Group, any other Member of the University Group or OSI; and

 

(g)

in relation to the Future Fund:

 

(i)

any transfer by the Future Fund to any Associated Government Entities;

 

(ii)

any transfer by the Future Fund of any shares in the capital of the Company that are held by the Future Fund in connection with any sale to an Institutional Investor that is acquiring the whole or part (being not fewer than 10 companies, including the Company) of the Future Fund’s interest in a portfolio of investments which comprise or result from the conversion of unsecured convertible loans substantially on the same terms as the convertible loan agreement relating to the Company and entered into by the Future Fund dated 6 July 2020, provided always that such transaction(s) is bona fide in all respects;

 

"Preference Amount" means a price per share equal to:

 

(a)

in respect of the Series A Shares, the amount that was paid up or credited as paid up on the underlying share in Vaccitech Limited which was exchanged for the relevant Series A Share in the Company; and

 

(b)

in respect of the Series B Shares, the amount that was paid up or credited as paid up on the underlying share in Vaccitech Limited which was exchanged for the relevant Series B Share in the Company;

 

"Priority Rights" means the rights of Shareholders to purchase Shares contained in a Transfer Notice in the priority stipulated in Article 16.6 or Article 19.4(b) (as the case may be);

 

"Privileged Relation" in relation to a Shareholder who is an individual member or deceased or former member means a spouse, Civil Partner, child or grandchild (including step or adopted or illegitimate child and their issue);

 

"Proceeds of Sale" means the consideration payable (including any deferred and/or contingent consideration and any other consideration which, having regard to the substance of the transaction as a whole, can be reasonably regarded as an addition to the price paid or payable for the Shares being sold) whether in cash or otherwise to those Shareholders selling Shares under a Share Sale less any fees, costs and expenses payable in respect of such Share Sale as approved by an Investor Majority;

 

"Proposed Exit" has the meaning given in Article 6.3;

 

"Proposed Purchaser" means a proposed purchaser who at the relevant time has made an offer on arm's length terms;

 

"Proposed Sale Date" has the meaning given in Article 20.3;

 

"Proposed Sale Notice" has the meaning given in Article 20.3;

 

"Proposed Sale Shares" has the meaning given in Article 20.3;

 

 

"Proposed Seller" means any person proposing to transfer any shares in the capital of the Company;

 

"Proposed Transfer" has the meaning given in Article 20.1;

 

"Qualifying Company" means a company in which a Shareholder or Trustee(s) holds the entire issued share capital and over which that Shareholder or Trustee(s) exercises control (within the meaning of section 1124 of the CTA 2010);

 

"Qualifying IPO" means an IPO in which the net aggregate subscription amount in respect of new Ordinary Shares issued at the time of the IPO is not less than US$100,000,000 at an issue price per Ordinary Share of at least $5,190 (being 1.2x the Issue Price of the Series B Shares subscribed by the Lead Series B Investor) (subject to appropriate adjustment following any Bonus Issue or Reorganisation);

 

"Qualifying Person" has the meaning given in section 318(3) of the Act;

 

“Relevant Drag Sale” means a Proposed Drag Sale within two years from the Date of Adoption in which the consideration to be paid to the Lead Series B Investor in respect of each Series B Share held by it is less than $6,487.50 (being 1.5x the Issue Price of the Series B Shares subscribed by the Lead Series B Investor) (subject to appropriate adjustment following any Bonus Issue or Reorganisation);

 

"Relevant Interest" has the meaning set out in Article 32.5;

 

"Relevant Period" means 48 months from the Commencement Date;

 

"Restricted Shares" has the meaning set out in Article 19.6; "Sale Shares" has the meaning set out in Article 16.2(a);

 

"Seller" has the meaning set out in Article 16.2;

 

"Series A Anti-Dilution Shares" shall have the meaning given in Article 10.1;

 

"Series A Exercising Investor" means any holder of Series A Shares who exercises its rights to acquire Series A Anti-Dilution Shares in accordance with Article 10.1;

 

"Series A Majority" means the holders of in excess of 50 per cent of Series A Shares from time to time;

 

"Series A Majority Consent" means the prior written consent of the Series A Majority;

 

"Series A Shareholders" means the holders of Series A Shares (but excludes the Company holding Treasury Shares);

 

"Series A Shares" means the series A shares of £0.10 each in the capital of the Company from time to time;

 

"Series A Starting Price" means £1,087.65 (if applicable, adjusted as referred to in Article 10.4);

 

"Series B Anti-Dilution Shares" shall have the meaning given in Article 10.2;

 

"Series B Exercising Investor" means any holder of Series B Shares who exercises its rights to acquire Series B Anti-Dilution Shares in accordance with Article 10.2;

 

"Series B Majority" means the holders of in excess of 50 per cent of Series B Shares from time to time;

 

 

 

"Series B Majority Consent" means the prior written consent of the Series B Majority;

 

"Series B Shareholders" means the holders of the Series B Shares (but excludes the Company holding Treasury Shares);

 

"Series B Shares" means the series B shares of £0.10 each in the capital of the Company from time to time;

 

"Series B Starting Price" means the price per share equal to the amount paid (including premium) for a Series B Share (if applicable, adjusted as referred to in Article 10.4);

 

"Shareholder" means any holder of any Shares (but excludes the Company holding Treasury Shares);

 

"Share Option Plan(s)" means the Company's existing share option plan, any other share option plan that may be adopted with Investor Majority Consent, and any share option agreement entered into between the Company and any Employee;

 

"Shares" means the Ordinary Shares, Deferred Shares, the Series A Shares and the Series B Shares from time to time;

 

"Share Sale" means the sale of (or the grant of a right to acquire or to dispose of) any of the shares in the capital of the Company (in one transaction or as a series of related transactions) which will result in the purchaser of those shares (or grantee of that right) and persons Acting in Concert with him together acquiring a Controlling Interest in the Company, except where following completion of the sale the shareholders and the proportion of shares held by each of them are the same as the shareholders and their shareholdings in the Company immediately prior to the sale;

 

"Shareholders' Agreement" means the shareholders' agreement dated [•] 2021 between, amongst others, the Company, the Founders, the University and the Investors;

 

"Subsidiary", "Subsidiary Undertaking" and "Parent Undertaking" have the respective meanings set out in sections 1159 and 1162 of the Act;

 

"Transfer Notice" shall have the meaning given in Article 16.2;

 

"Transfer Price" shall have the meaning given in Article 16.2(c);

 

"Treasury Shares" means shares in the capital of the Company held by the Company as treasury shares from time to time within the meaning set out in section 724(5) of the Act;

 

"Trustees" in relation to a Shareholder means the trustee or the trustees of a Family Trust;

 

"University" means The Chancellor, Masters and Scholars of the University of Oxford; and

 

"Unvested" means those Employee Shares which may be required to be transferred under Article 19.

 

3.

Share capital

 

3.1

In these Articles, unless the context requires otherwise, references to shares of a particular class shall include shares allotted and/or issued after the Date of Adoption and ranking pari passu in all respects (or in all respects except only as to the date from which those shares rank for dividend) with the shares of the relevant class then in issue.

 

 

 

3.2

Except as otherwise provided in these Articles, the Series A Shares, the Series B Shares and the Ordinary Shares shall rank pari passu in all respects but shall constitute separate classes of shares.

 

3.3

The words "and the directors may determine the terms, conditions and manner of redemption of any such shares" shall be deleted from Article 43(2) of the Model Articles.

 

3.4

In Article 49(2) of the Model Articles, the words "evidence, indemnity and the payment of a reasonable fee as the directors decide" in paragraph (b) shall be deleted and replaced with the words "evidence, indemnity and the payment of reasonable expenses".

 

3.5

For the avoidance of doubt, the Company shall not exercise any right in respect of any Treasury Shares, including without limitation any right to:

 

(a)

receive notice of or to attend or vote at any general meeting of the Company; and

 

(b)

receive a dividend or other distribution

 

save as otherwise permitted by section 726(4) of the Act.

 

3.6

The Company shall be entitled to retain any share certificate(s) relating to Employee Shares while any such Shares remain Unvested.

 

4.

Dividends

 

4.1

In respect of any Financial Year, the Company's Available Profits will be applied as set out in this Article 4.

 

4.2

Any Available Profits which the Company may determine, with Investor Majority Consent, to distribute in respect of any Financial Year; will be distributed among the holders of the Equity Shares (pari passu as if the Equity Shares constituted one class of share) pro rata to their respective holdings of Equity Shares (on an as converted basis in accordance with Article 1.5).

 

4.3

Subject to the Act and these Articles, the Board may, provided Investor Majority Consent is given, pay interim dividends if justified by the Available Profits in respect of the relevant period.

 

4.4

Every dividend shall accrue on a daily basis assuming a 365 day year. All dividends are expressed net and shall be paid in cash.

 

4.5

If there are nil paid or partly paid share(s), any holder of such share(s) shall only be entitled, in case of any dividend, to be paid an amount equal to the amount of the dividend multiplied by the percentage of the amount that is paid up (if any) on such share(s) during any portion or portions of the period in respect of which a dividend is paid.

 

4.6

A capitalised sum which was appropriated from profits available for distribution may be applied in or towards paying up any sums unpaid on existing Shares held by the persons entitled to such capitalised sum.

 

4.7

If:

 

(a)

a Share is subject to the Company's Lien; and

 

 

(b)

the Directors are entitled to issue a Lien Enforcement Notice in respect of it,

 

they may, instead of issuing a Lien Enforcement Notice, deduct from any dividend or other sum payable in respect of the Share any sum of money which is payable to the Company by the holder of that Share to the extent that they are entitled to require payment under a Lien Enforcement Notice. Money so deducted shall be used to pay any of the sums payable in respect of that Share and/or used to discharge any other indebtedness owing from the holder of that Share to the Company (as the Board may decide). The Company shall notify the distribution recipient in writing of:

 

(i)            the fact and sum of any such deduction;

 

(ii)           any non-payment of a dividend or other sum payable in respect of a Share resulting from any such deduction; and

 

(iii)          how the money deducted has been applied.

 

4.8

Article 72(1) of the Model Articles shall be amended by:

 

(a)

the replacement of the words "either in writing or as the directors may otherwise decide" at the end of paragraphs (a), (b) and (c) of that Article 72(1) with the words "in writing"; and

 

(b)

the replacement of the words "either in writing or by such other means as the directors decide" from the end of paragraph (d) of that Article 72(1) with the words "in writing".

 

5.

Liquidation preference

 

On a distribution of assets on a liquidation or a return of capital (other than a conversion, redemption or purchase of Shares) the surplus assets of the Company remaining after payment of its liabilities shall be applied (to the extent that the Company is lawfully permitted to do so):

 

(a)

first in paying to each of the Series B Shareholders, in priority to any other classes of Shares, the greater of:

 

(i)

an amount per Series B Share held equal to the Preference Amount (provided that if there are insufficient surplus assets to pay the amounts per share equal to the Preference Amount, the remaining surplus assets shall be distributed to the Series B Shareholders pro rata to the amounts paid up on the Series B Shares); or

 

(ii)

the amount such Series B Shareholder would receive pursuant to Article 5.1(d) if the Series B Shares held by such holder were converted into Ordinary Shares immediately prior to the distribution of assets;

 

(b)

second in paying to each of the Series A Shareholders the greater of:

 

(i)

an amount per Series A Share held equal to the Preference Amount (provided that if there are insufficient surplus assets to pay the amounts per share equal to the Preference Amount, the remaining surplus assets shall be distributed to the Series A Shareholders pro rata to the amounts paid up on the Series A Shares); or

 

(ii)

the amount such Series A Shareholder would receive pursuant to Article 5.1(d) if the Series A Shares held by such holder were converted into Ordinary Shares immediately prior to the distribution of assets;

 

(c)

third in paying to the holders of the Deferred Shares, if any, a total of £1.00 for each entire class of Deferred Shares (which payment shall be deemed satisfied by payment to any one holder of such class of Deferred Shares);

 

(d)

the balance of the surplus assets (if any) shall be distributed among the holders of Ordinary Shares pro rata to the number of Ordinary Shares held.

 

 

6.

Exit provisions

 

6.1

Unless the Board and an Investor Majority determines otherwise, on a Share Sale the Proceeds of Sale shall be distributed in the order of priority set out in Article 5 and the Directors shall not register any transfer of Shares if the Proceeds of Sale are not so distributed save in respect of any Shares not sold in connection with that Share Sale provided that if the Proceeds of Sale are not settled in their entirety upon completion of the Share Sale:

 

(a)

the Directors shall not be prohibited from registering the transfer of the relevant Shares so long as the Proceeds of Sale that are settled have been distributed in the order of priority set out in Article 5; and

 

(b)

the Shareholders shall take any action required by an Investor Majority to ensure that the Proceeds of Sale in their entirety are distributed in the order of priority set out in Article 5.

 

In the event that the Proceeds of Sale are distributed on more than one occasion (for any deferred or contingent consideration or otherwise), the consideration so distributed on any further occasion shall be paid by continuing the distribution from the previous distribution of consideration in the order of priority set out in Article 5.

 

6.2

Unless the Board and an Investor Majority determines otherwise, on an Asset Sale the surplus assets of the Company remaining after payment of its liabilities shall be distributed (to the extent that the Company is lawfully permitted to do so) in the order of priority set out in Article 5 provided always that if it is not lawful for the Company to distribute its surplus assets in accordance with the provisions of these Articles, the Shareholders shall take any action required by an Investor Majority (including, but without prejudice to the generality of this Article 6.2, actions that may be necessary to put the Company into voluntary liquidation) so that Article 5 applies.

 

6.3

In the event of an Exit approved by the Board and an Investor Majority in accordance with the terms of these Articles (the "Proposed Exit"), all Shareholders shall consent to, vote for, raise no objections to and waive any applicable rights in connection with the Proposed Exit ("Actions"). The Shareholders shall be required to take all Actions with respect to the Proposed Exit as are required by the Board to facilitate the Proposed Exit, provided that the principles in Article 22.6 shall apply mutatis mutandis. If any Shareholder fails to comply with the provisions of this Article, the Company shall be constituted the agent of each defaulting Shareholder for taking the Actions as are necessary to effect the Proposed Exit and the Directors may authorise an officer or member to execute and deliver on behalf of such defaulting Shareholder the necessary documents and the Company may receive any purchase money due to the defaulting Shareholder in trust for each of the defaulting Shareholders.

 

7.

Votes in general meeting

 

7.1

The Series A Shares shall confer on each holder of Series A Shares the right to receive notice of and to attend, speak and vote at all general meetings of the Company.

 

7.2

The Series B Shares shall confer on each holder of Series B Shares the right to receive notice of and to attend, speak and vote at all general meetings of the Company.

 

7.3

The Ordinary Shares shall confer on each holder of Ordinary Shares the right to receive notice of and to attend, speak and vote at all general meetings of the Company.

 

7.4

The Deferred Shares (if any) shall not entitle the holders of them to receive notice of, to attend, to speak or to vote at any general meeting of the Company.

 

7.5

Where Shares confer a right to vote, on a show of hands each holder of such shares who (being an individual) is present in person or by proxy or (being a corporation) is present by a duly authorised representative or by proxy shall have one vote and on a poll each such holder so present shall have one vote for each Share held by him (on an as converted basis in accordance with Article 1.5).

 

 

7.6

No voting rights attached to a share which is nil paid or partly paid may be exercised at any general meeting, at any adjournment of it or at any poll called at or in relation to it unless all of the amounts payable to the Company in respect of that share have been paid.

 

8.

Consolidation of Shares

 

8.1

Whenever as a result of a consolidation of Shares any Shareholders would become entitled to fractions of a Share, the Directors may, on behalf of those Shareholders, sell the Shares representing the fractions for the best price reasonably obtainable to any person (including, subject to the provisions of the Act, the Company) and distribute the net proceeds of sale in due proportion among those Shareholders, and the Directors may authorise any person to execute an instrument of transfer of the Shares to, or in accordance with the directions of, the purchaser. The transferee shall not be bound to see to the application of the purchase money nor shall his title to the Shares be affected by any irregularity in or invalidity of the proceedings in reference to the sale.

 

8.2

When the Company sub-divides or consolidates all or any of its Shares, the Company may, subject to the Act and to these Articles, by ordinary resolution determine that, as between the Shares resulting from the sub-division or consolidation, any of them may have any preference or advantage or be subject to any restriction as compared with the others.

 

9.

Conversion of Series A Shares and Series B Shares

 

9.1

Any holder of Series A Shares and/or Series B Shares shall be entitled, by notice in writing to the Company, to require conversion of all of the fully paid Series A Shares and/or Series B Shares held by them at any time into Ordinary Shares and Deferred B Shares and those Series A Shares and/or Series B Shares shall convert automatically on the date of such notice (the "Conversion Date"), provided that the holder may in such notice, state that conversion of its Series A Shares and/or Series B Shares is conditional upon the occurrence of one or more events (the "Conditions").

 

9.2

All of the fully paid Series A Shares and Series B Shares shall automatically convert into Ordinary Shares and Deferred B Shares immediately upon the occurrence of a Qualifying IPO.

 

9.3

All of the fully paid Series A Shares shall automatically convert into Ordinary Shares and Deferred B Shares on the date of a notice given by the Series A Majority (which date shall be treated as the Conversion Date).

 

9.4

All of the fully paid Series B Shares shall automatically convert into Ordinary Shares and Deferred B Shares on the date of a notice given by the Series B Majority (which date shall be treated as the Conversion Date).

 

9.5

In the case of (i) Articles 9.1, 9.3 and 9.4, not more than five Business Days after the Conversion Date or (ii) in the case of Article 9.2, at least five Business Days prior to the occurrence of the Qualifying IPO, each holder of the relevant Series A Shares and/or Series B Shares shall deliver the certificate (or an indemnity for lost certificate in a form acceptable to the Board) in respect of the Series A Shares and/or Series B Shares being converted to the Company at its registered office for the time being.

 

9.6

Where conversion is mandatory on the occurrence of a Qualifying IPO, that conversion will be effective only immediately prior to and conditional upon such Qualifying IPO (and "Conversion Date" shall be construed accordingly) and, if such Qualifying IPO does not become effective or does not take place, such conversion shall be deemed not to have occurred. In the event of a conversion under Article 9.1, if the Conditions have not been satisfied or waived by the relevant holder by the Conversion Date such conversion shall be deemed not to have occurred.

 

 

9.7

On the Conversion Date, the relevant Series A Shares and/or Series B Shares shall without further authority than is contained in these Articles stand converted into Ordinary Shares and Deferred B Shares on the basis of the Conversion Ratio, and the Ordinary Shares and Deferred B Shares resulting from that conversion shall in all other respects rank pari passu with the existing issued Ordinary Shares and Deferred B Shares (as the case may be).

 

9.8

The Company shall on the Conversion Date enter the holder of the converted Series A Shares and/or Series B Shares on the register of members of the Company as the holder of the appropriate number of Ordinary Shares and Deferred B Shares and, subject to the relevant holder delivering its certificate(s) (or an indemnity for lost certificate in a form acceptable to the Board) in respect of the Series A Shares and/or Series B Shares in accordance with this Article, the Company shall within 10 Business Days of the Conversion Date forward to such holder of Series A Shares and/or Series B Shares by post to his address shown in the register of members, free of charge, a definitive certificate for the appropriate number of fully paid Ordinary Shares and Deferred B Shares.

 

9.9

On the Conversion Date (or as soon afterwards as it is possible to calculate the amount payable), the Company will, if it has sufficient Available Profits, pay to holders of the Series A Shares and/or Series B Shares falling to be converted a dividend equal to all Arrears and accruals of dividends in relation to those Series A Shares and/or Series B Shares to be calculated on a daily basis down to and including the day immediately preceding the Conversion Date. If the Company has insufficient Available Profits to pay all such Arrears and accruals of dividends in full then it will pay the same to the extent that it is lawfully able to do so and any Arrears and accruals of dividends that remain outstanding shall continue to be at debt due from and immediately payable by the Company.

 

9.10

The Conversion Ratio shall from time to time be adjusted in accordance with the provisions of this Article:

 

(a)

if Series A Shares and/or Series B Shares remain capable of being converted into new Ordinary Shares and Deferred B Shares and there is a consolidation and/or sub-division of Ordinary Shares or Deferred B Shares, the Conversion Ratio shall be adjusted by an amount, which in the opinion of the Board (with Investor Director Consent) is fair and reasonable, to maintain the right to convert so as to ensure that each Series A Shareholder and Series B Shareholder is in no better or worse position as a result of such consolidation or sub-division, such adjustment to become effective immediately after such consolidation or sub-division;

 

(b)

if Series A Shares and/or Series B Shares remain capable of being converted into Ordinary Shares and Deferred B Shares, on an allotment of fully-paid Ordinary Shares or Deferred B Shares pursuant to a capitalisation of profits or reserves to holders of Ordinary Shares or Deferred B Shares (as applicable) the Conversion Ratio shall be adjusted by an amount, which in the opinion of the Board (with Investor Director Consent) is fair and reasonable, to maintain the right to convert so as to ensure that each Series A Shareholder and Series B Shareholder is in no better or worse position as a result of such capitalisation of profits or reserves, such adjustment to become effective as at the record date for such issue.

 

9.11

If any Series A Shareholder and/or Series B Shareholder becomes entitled to fractions of an Ordinary Share or Deferred B Share as a result of conversion ("Fractional Holders"), the Directors may (in their absolute discretion) deal with these fractions as they think fit on behalf of the Fractional Holders. In particular, the Directors may aggregate and sell the fractions to a person for the best price reasonably obtainable and distribute the net proceeds of sale in due proportions among the Fractional Holders or may ignore fractions or accrue the benefit of such fractions to the Company rather than the Fractional Holder. For the purposes of completing any such sale of fractions, the chairman of the Company or, failing him, the secretary will be deemed to have been appointed the Fractional Holder's agent for the purpose of the sale.

 

9.12

If a doubt or dispute arises concerning an adjustment of the Conversion Ratio in accordance with Article 9.10, or if so requested by an Investor Majority, the Board shall refer the matter to the Auditors for determination who shall make available to all Shareholders their report and whose certificate as to the amount of the adjustment is, in the absence of manifest error, conclusive and binding on all concerned and their costs shall be met by the Company.

 

 

9.13

If Series A Shares and/or Series B Shares remain capable of being converted into Ordinary Shares or Deferred B Shares and new Ordinary Shares or Deferred B Shares are offered by the Company by way of rights to holders of Ordinary Shares or Deferred B Shares (as applicable) (an "Offer By Way of Rights"), the Company shall on the making of each such offer, make a like offer to each Series A Shareholder and Series B Shareholder as if immediately before the record date for the Offer By Way Of Rights, his Series A Shares and Series B Shares had been converted into fully-paid Ordinary Shares and Deferred B Shares at the then applicable Conversion Ratio.

 

10.

Anti-Dilution protection

 

Series A Shares

 

10.1

If New Securities are issued by the Company at a price per New Security which equates to less than the Series A Starting Price (a "Series A Qualifying Issue") (which in the event that the New Security is not issued for cash shall be a price certified by the Auditors acting as experts and not as arbitrators as being in their opinion the current cash value of the new consideration for the allotment of the New Securities) then the Company shall, unless and to the extent that any of the holders of Series A Shares shall have specifically waived their rights under this Article in writing, issue to each holder of Series A Shares (the "Series A Exercising Investor") a number of new Series A Shares determined by applying the following formula (and rounding the product, N, down to the nearest whole share), subject to adjustment as certified in accordance with Article 10.4 (the "Series A Anti-Dilution Shares"):

 

 

Where:

 

N=

Number of Series A Anti-Dilution Shares to be issued to the Series A Exercising Investor

 

WA=

 

SIP =

Series A Starting Price

 

ESC =

the number of Equity Shares in issue plus the aggregate number of shares in respect of which options to subscribe have been granted, or which are subject to convertible securities (including but not limited to warrants) in each case immediately prior to the Series A Qualifying Issue (excluding, for the avoidance of doubt, any Anti-Dilution Shares issued or to be issued in connection with such Series A Qualifying Issue)

 

QISP =

the lowest per share price of the New Securities issued pursuant to the Series A Qualifying Issue (which in the event that that New Security is not issued for cash shall be the sum certified by the Auditors acting as experts and not arbitrators as being in their opinion the current cash value of the non cash consideration for the allotment of the New Security)

 

NS =

the number of New Securities issued pursuant to the Series A Qualifying Issue (excluding, for the avoidance of doubt, any Anti-Dilution Shares issued or to be issued in connection with such Series A Qualifying Issue)

 

 

Z =

the number of Series A Shares held by the Exercising Investor prior to the Series A Qualifying Issue.

 

Series B Shares

 

10.2

If New Securities are issued by the Company at a price per New Security which equates to less than the Series B Starting Price (a "Series B Qualifying Issue") (which in the event that the New Security is not issued for cash shall be a price certified by the Auditors acting as experts and not as arbitrators as being in their opinion the current cash value of the new consideration for the allotment of the New Securities) then the Company shall, unless and to the extent that Series B Majority shall have waived the rights of the holders of Series B Shares under this Article in writing, issue to each holder of Series B Shares (the "Series B Exercising Investor") a number of new Series B Shares determined by applying the following formula (and rounding the product, N, down to the nearest whole share), subject to adjustment as certified in accordance with Article 10.4 (the "Series B Anti-Dilution Shares"):

 

 

Where:

 

N=

Number of Series B Anti-Dilution Shares to be issued to the Series B Exercising Investor

 

WA=

 

SIP =

Series B Starting Price

 

ESC =

the number of Equity Shares in issue plus the aggregate number of shares in respect of which options to subscribe have been granted, or which are subject to convertible securities (including but not limited to warrants) in each case immediately prior to the Series B Qualifying Issue (excluding, for the avoidance of doubt, any Anti-Dilution Shares issued or to be issued in connection with such Series B Qualifying Issue)

 

QISP =

the lowest per share price of the New Securities issued pursuant to the Series B Qualifying Issue (which in the event that that New Security is not issued for cash shall be the sum certified by the Auditors acting as experts and not arbitrators as being in their opinion the current cash value of the non cash consideration for the allotment of the New Security)

 

NS =

the number of New Securities issued pursuant to the Series B Qualifying Issue (excluding, for the avoidance of doubt, any Anti-Dilution Shares issued or to be issued in connection with such Series B Qualifying Issue)

 

Z =

the number of Series B Shares held by the Exercising Investor prior to the Series B Qualifying Issue.

 

10.3

The Anti-Dilution Shares shall:

 

(a)

be paid up by the automatic capitalisation of available reserves of the Company, unless and to the extent that the same shall be impossible or unlawful or a majority of the Exercising Investors shall agree otherwise, in which event the Exercising Investors shall be entitled to subscribe for the Anti-Dilution Shares in cash at par (being the par value approved in advance by the Board with Investor Director Consent) and the entitlement of such Exercising Investors to Anti-Dilution Shares shall be increased by adjustment to the formula set out in Article 10.1 and/or Article 10.2 (as applicable) so that the Exercising Investors shall be in no worse position than if they had not so subscribed at par. In the event of any dispute between the Company and any Exercising Investor as to the effect of Article 10.1, Article 10.2 or this Article 10.3, the matter shall be referred (at the cost of the Company) to the Auditors for certification of the number of Anti-Dilution Shares to be issued. The Auditor's certification of the matter shall in the absence of manifest error be final and binding on the Company and the Exercising Investor; and

 

 

(b)

subject to the payment of any cash payable pursuant to Article 10.3(a) (if applicable), be issued, credited fully paid up in cash and shall rank pari passu in all respects with the existing Series A Shares and/or Series B Shares (as applicable), within five Business Days of the expiry of the offer being made by the Company to the Exercising Investor and pursuant to Article 10.3(a).

 

10.4

In the event of any Bonus Issue or Reorganisation (other than a Bonus Issue or Reorganisation in which shares are issued as a result of the events set out in Article 13.7(b) or 13.7(d)), the Series A Starting Price and the Series B Starting Price shall also be subject to adjustment on such basis as may be agreed by the Company with the Investor Majority within 10 Business Days after any Bonus Issue or Reorganisation. If the Company and the Investor Majority cannot agree such adjustment it shall be referred to the Auditors whose determination shall, in the absence of manifest error, be final and binding on the Company and each of the Shareholders. The costs of the Auditors shall be borne by the Company.

 

10.5

For the purposes of Articles 10.2 – 10.4, it is acknowledged that the Series B Starting Price may comprise of more than one value and that the calculations in Article 10.2 shall be applied separately for each such value as regards to those Series B Shares with such value.

 

10.6

For the purposes of this Article 10 any Shares held as Treasury Shares by the Company shall be disregarded when calculating the number of Anti-Dilution Shares to be issued.

 

11.

Deferred Shares

 

11.1

Subject to the Act, any Deferred Shares may be purchased or (if such shares are issued as redeemable shares) redeemed by the Company at any time at its option for one penny for all the Deferred Shares registered in the name of any holder(s) without obtaining the sanction of the holder(s).

 

11.2

The allotment or issue of Deferred Shares or the conversion or re-designation of shares into Deferred Shares shall be deemed to confer irrevocable authority on the Company at any time after their allotment, issue, conversion or re-designation, without obtaining the sanction of such holder(s), to:

 

(a)

appoint any person to execute any transfer (or any agreement to transfer) such Deferred Shares to such person(s) as the Company may determine (as nominee or custodian thereof or otherwise); and/or

 

(b)

give, on behalf of such holder, consent to the cancellation of such Deferred Shares; and/or

 

(c)

purchase such Deferred Shares in accordance with the Act,

 

in any such case (i) for a price being not more than an aggregate sum of one penny for all the Deferred Shares registered in the name of such holder(s) and (ii) with the Company having authority pending such transfer, cancellation and/or purchase to retain the certificates (if any) in respect thereof.

 

11.3

No Deferred Share may be transferred without the prior consent of the Board.

 

 

12.

Variation of rights

 

12.1

Whenever the share capital of the Company is divided into different classes of shares, the special rights attached to any such class may only be varied or abrogated (either whilst the Company is a going concern or during or in contemplation of a winding-up) with the consent in writing of the holders of more than 50 per cent. in nominal value of the issued shares of that class save that the special rights attaching to the Series A Shares may only be varied or abrogated with Series A Majority Consent and the special rights attaching to the Series B Shares may only be varied or abrogated with Series B Majority Consent.

 

12.2

The creation of a new class of shares which has preferential rights to one or more existing classes of shares shall not constitute a variation of the rights of those existing classes of shares.

 

13.

Allotment of new shares or other securities: pre-emption

 

13.1

Subject to the remaining provisions of this Article 13, the Directors are generally and unconditionally authorised for the purpose of section 551 of the Act to exercise any power of the Company to:

 

(a)

allot Shares; or

 

(b)

grant rights to subscribe for or convert any securities into Shares,

 

to any persons, at any times and subject to any terms and conditions as the Directors think proper, provided that:

 

(c)

this authority shall be limited to a maximum nominal amount of £82.76;

 

(d)

this authority shall only apply insofar as the Company has not by resolution waived or revoked it; and

 

(e)

(this authority may only be exercised for a period of five years commencing upon the Date of Adoption, save that the Directors may make an offer or agreement which would or might require Shares to be allotted or rights granted to subscribe for or convert any security into Shares after the expiry of such authority (and the Directors may allot Shares or grant such rights in pursuance of an offer or agreement as if such authority had not expired).

 

This authority is in substitution for all subsisting authorities to the extent unused.

 

13.2

Sections 561(1) and 562(1) to (5) (inclusive) of the Act do not apply to an allotment of Equity Securities made by the Company.

 

13.3

Unless otherwise agreed by special resolution, if the Company proposes to allot any New Securities prior to a Qualifying IPO, those New Securities shall not be allotted to any person unless the Company has in the first instance offered them to all holders of Equity Shares (the "Subscribers") on the same terms and at the same price as those New Securities are being offered to other persons on a pari passu and pro rata basis to the number of Equity Shares (as if the Equity Shares constituted one and the same class) held by those holders (as nearly as may be without involving fractions). The offer:

 

(a)

shall be in writing, be open for acceptance from the date of the offer to the date 10 Business Days after the date of the offer (inclusive) (the "Subscription Period") and give details of the number and subscription price of the New Securities; and

 

(b)

may stipulate that any Subscriber who wishes to subscribe for a number of New Securities in excess of the proportion to which each is entitled shall in their acceptance state the number of excess New Securities for which they wish to subscribe.

 

 

13.4

If, at the end of the Subscription Period, the number of New Securities applied for is equal to or exceeds the number of New Securities, the New Securities shall be allotted to the Subscribers who have applied for New Securities on a pro rata basis to the number of Equity Shares held by such Subscribers which procedure shall be repeated until all New Securities have been allotted (as nearly as may be without involving fractions or increasing the number allotted to any Subscriber beyond that applied for by him).

 

13.5

If, at the end of the Subscription Period, the number of New Securities applied for is less than the number of New Securities, the New Securities shall be allotted to the Subscribers in accordance with their applications and any remaining New Securities shall be offered to any other person as the Directors may determine at the same price and on the same terms as the offer to the Subscribers.

 

13.6

Subject to the requirements of Articles 13.3 to 13.5 (inclusive) and to the provisions of section 551 of the Act, any New Securities shall be at the disposal of the Board who may allot, grant options over or otherwise dispose of them to any persons at those times and generally on the terms and conditions they think proper, provided that the allotment or grant to that person must be approved in writing by an Investor Majority.

 

13.7

The provisions of Articles 13.3 to 13.6 (inclusive) shall not apply to:

 

(a)

options to subscribe for Ordinary Shares under the Share Option Plans;

 

(b)

New Securities issued or granted in order for the Company to comply with its obligations under these Articles including, but not limited to, the Anti-Dilution Shares;

 

(c)

New Securities issued in consideration of the acquisition by the Company of any company or business which has been approved in writing by an Investor Majority;

 

(d)

New Securities which the Board and an Investor Majority have agreed in writing should be issued without complying with the procedure set out in this Article 13; and

 

(e)

New Securities issued as a result of a Bonus Issue or Reorganisation which has been approved in writing by an Investor Majority.

 

13.8

Any New Securities offered under this Article 13 to an Investor may be accepted in full or part only by a Member of the same Fund Group as that Investor or a Member of the same Group as that Investor in accordance with the terms of this Article 13.

 

13.9

No Shares shall be allotted (nor any Treasury Shares be transferred) to any Employee, Director, prospective Employee or prospective director of the Company, who in the opinion of the Board is subject to taxation in the United Kingdom, unless such person has entered into a joint section 431 ITEPA election with the Company if so required by the Company.

 

14.

Transfers of Shares - general

 

14.1

In Articles 14 to 22 inclusive, reference to the transfer of a Share includes the transfer or assignment of a beneficial or other interest in that Share or the creation of a trust or Encumbrance over that Share and reference to a Share includes a beneficial or other interest in a Share.

 

14.2

No Share may be transferred unless the transfer is made in accordance with these Articles.

 

14.3

If a Shareholder transfers or purports to transfer a Share otherwise than in accordance with these Articles he will be deemed immediately to have served a Transfer Notice in respect of all Shares held by him.

 

14.4

Any transfer of a Share by way of sale which is required to be made under Articles 16 to 22 (inclusive) will be deemed to include a warranty that the transferor sells with full title guarantee.

 

 

14.5

The Directors may refuse to register a transfer if:

 

(a)

it is a transfer of a Share to a bankrupt, a minor or a person of unsound mind;

 

(b)

the transfer is to an Employee, Director or prospective Employee or prospective director of the Company, who in the opinion of the Board is subject to taxation in the United Kingdom, and such person has not entered into a joint section 431 ITEPA election with the Company;

 

(c)

it is a transfer of a Share which is not fully paid:

 

(i)            to a person of whom the Directors do not approve; or

 

(ii)           on which Share the Company has a lien;

 

(d)

the transfer is not lodged at the registered office or at such other place as the Directors may appoint;

 

(e)

the transfer is not accompanied by the certificate for the Shares to which it relates (or an indemnity for lost certificate in a form acceptable to the Board) and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer;

 

(f)

the transfer is in respect of more than one class of Shares;

 

(g)

the transfer is in favour of more than four transferees; or

 

(h)

these Articles otherwise provide that such transfer shall not be registered.

 

If the Directors refuse to register a transfer, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent.

 

14.6

The Directors may, as a condition to the registration of any transfer of shares in the Company (whether pursuant to a Permitted Transfer or otherwise), require the transferee to execute and deliver to the Company a deed agreeing to be bound by the terms of any shareholders' agreement or similar document in force between some or all of the Shareholders and the Company in any form as the Directors may reasonably require (but not so as to oblige the transferee to have any obligations or liabilities greater than those of the proposed transferor under any such agreement or other document) and if any condition is imposed in accordance with this Article 14.6 the transfer may not be registered unless that deed has been executed and delivered to the Company's registered office by the transferee.

 

14.7

To enable the Directors to determine whether or not there has been any disposal of shares in the capital of the Company (or any interest in shares in the capital of the Company) in breach of these Articles the Directors may, with Investor Director Consent, require any holder or the legal personal representatives of any deceased holder or any person named as transferee in any transfer lodged for registration or any other person who the Directors or the Investor Directors may reasonably believe to have information relevant to that purpose, to furnish to the Company that information and evidence the Directors may request regarding any matter which they deem relevant to that purpose, including (but not limited to) the names, addresses and interests of all persons respectively having interests in the shares in the capital of the Company from time to time registered in the holder's name. If the information or evidence is not provided to enable the Directors to determine to their reasonable satisfaction that no breach has occurred, or where as a result of the information and evidence the Directors are reasonably satisfied that a breach has occurred, the Directors shall immediately notify the holder of such shares in the capital of the Company in writing of that fact and the following shall occur:

 

(a)

the relevant shares shall cease to confer upon the holder of them (including any proxy appointed by the holder) any rights to vote (whether on a show of hands or on a poll and exercisable at a general meeting or at any separate meeting of the class in question) provided that, at the election of the relevant Investor, such rights shall not cease if as a result of such cessation the Company shall become a Subsidiary of an Investor; or

 

 

(b)

the withholding of payment of all dividends or other distributions otherwise attaching to the relevant shares or to any further shares issued in respect of those shares; and

 

(c)

the holder may be required at any time following receipt of the notice to transfer some or all of its Shares to any person(s) at the price that the Directors may require by notice in writing to that holder.

 

The rights referred to in (a) and (b) above may be reinstated by the Board subject to Investor Director Consent and shall in any event be reinstated upon the completion of any transfer referred to in (c) above.

 

14.8

In any case where the Board requires a Transfer Notice to be given in respect of any Shares, if a Transfer Notice is not duly given within a period of 10 Business Days of demand being made, a Transfer Notice shall be deemed to have been given at the expiration of that period.

 

14.9

If a Transfer Notice is required to be given by the Board or is deemed to have been given under these Articles, the Transfer Notice, unless otherwise specified in the Articles, will be treated as having specified that:

 

(a)

the Transfer Price for the Sale Shares will be as agreed between the Board (including Investor Director Consent) (any director who is a Seller or with whom the Seller is connected (within the meaning of section 252 of the Act) not voting) and the Seller, or, failing agreement within five Business Days after the date on which the Board becomes aware that a Transfer Notice has been deemed to have been given, will be the Fair Value of the Sale Shares;

 

(b)

it does not include a Minimum Transfer Condition (as defined in Article 16.2(d)); and

 

(c)

the Seller wishes to transfer all of the Shares held by it.

 

14.10

Shares may be transferred by means of an instrument of transfer in any usual form or any other form approved by the directors, which is executed by or on behalf of:

 

(a)

the transferor; and

 

(b)

(if any of the shares is partly or nil paid) the transferee.

 

15.

Permitted Transfers

 

15.1

A Shareholder (who is not a Permitted Transferee) (the "Original Shareholder") may transfer all or any of his or its Shares to a Permitted Transferee without restriction as to price or otherwise.

 

15.2

Shares previously transferred as permitted by Article 15.1 may be transferred by the transferee to any other Permitted Transferee of the Original Shareholder without restriction as to price or otherwise.

 

15.3

Where under the provision of a deceased Shareholder's will or laws as to intestacy, the persons legally or beneficially entitled to any Shares, whether immediately or contingently, are Permitted Transferees of the deceased Shareholder, the legal representative of the deceased Shareholder may transfer any Share to those Permitted Transferees, in each case without restriction as to price or otherwise.

 

 

15.4

If a Permitted Transferee who was a Member of the same Group as the Original Shareholder ceases to be a Member of the same Group as the Original Shareholder, the Permitted Transferee must not later than five Business Days after the date on which the Permitted Transferee so ceases, transfer the Shares held by it to the Original Shareholder or a Member of the same Group as the Original Shareholder (which in either case is not in liquidation) without restriction as to price or otherwise failing which it will be deemed to have given a Transfer Notice in respect of those Shares.

 

15.5

If a Permitted Transferee who was a Member of the same Fund Group as the Original Shareholder ceases to be a Member of the same Fund Group, the Permitted Transferee must not later than five Business Days after the date on which the Permitted Transferee so ceases, transfer the Shares held by it to the Original Shareholder or a Member of the same Fund Group as the Original Shareholder (which in either case is not in liquidation) without restriction as to price or otherwise failing which it will be deemed to give a Transfer Notice in respect of such Shares.

 

15.6

If a Permitted Transferee who was a Member of the University Group ceases to be a Member of the University Group, the Permitted Transferee must not later than five Business Days after the date on which the Permitted Transferee so ceases, transfer the Shares held by it to the Original Shareholder or another Member of the University Group (which in either case is not in liquidation) without restriction as to price or otherwise failing which it will be deemed to have given a Transfer Notice in respect of those Shares.

 

15.7

Trustees may (i) transfer Shares to a Qualifying Company or (ii) transfer Shares to the Original Shareholder or to another Permitted Transferee of the Original Shareholder or (iii) transfer Shares to the new or remaining trustees upon a change of Trustees without restrictions as to price or otherwise.

 

15.8

No transfer of Shares may be made to Trustees unless the Board is satisfied:

 

(a)

with the terms of the trust instrument and in particular with the powers of the trustees;

 

(b)

with the identity of the proposed trustees;

 

(c)

the proposed transfer will not result in 50 per cent or more of the aggregate of the Company's equity share capital being held by trustees of that and any other trusts; and

 

(d)

that no costs incurred in connection with the setting up or administration of the Family Trust in question are to be paid by the Company.

 

15.8

If a Permitted Transferee who is a Qualifying Company of the Original Shareholder ceases to be a Qualifying Company of the Original Shareholder, it must within five Business Days of so ceasing, transfer the Shares held by it to the Original Shareholder (or, to any Permitted Transferee of the Original Shareholder) (and may do so without restriction as to price or otherwise) failing which it will be deemed (unless it obtains the approval of the Board (to include Investor Director Consent) to have given a Transfer Notice in respect of such Shares.

 

15.9

If a Permitted Transferee who is a spouse or Civil Partner of the Original Shareholder ceases to be a spouse or Civil Partner of the Original Shareholder whether by reason of divorce or otherwise he must, within 15 Business Days of so ceasing either:

 

(a)

execute and deliver to the Company a transfer of the Shares held by him to the Original Shareholder (or, to any Permitted Transferee of the Original Shareholder) for such consideration as may be agreed between them; or

 

(b)

give a Transfer Notice to the Company in accordance with Article 16.2, failing which he shall be deemed to have given a Transfer Notice.

 

15.10

On the death (subject to Article 15.3), bankruptcy, liquidation, administration or administrative receivership of a Permitted Transferee (other than a joint holder) his personal representatives or trustee in bankruptcy, or its liquidator, administrator or administrative receiver must within five Business Days after the date of the grant of probate, the making of the bankruptcy order or the appointment of the liquidator, administrator or the administrative receiver execute and deliver to the Company a transfer of the Shares held by the Permitted Transferee without restriction as to price or otherwise. The transfer shall be to the Original Shareholder if still living (and not bankrupt or in liquidation) or, if so directed by the Original Shareholder, to any Permitted Transferee of the Original Shareholder. If the transfer is not executed and delivered within five Business Days of such period or if the Original Shareholder has died or is bankrupt or is in liquidation, administration or administrative receivership, the personal representative or trustee in bankruptcy or liquidator, administrator or administrative receiver will be deemed to have given a Transfer Notice.

 

 

15.11

A transfer of any Shares approved by the Board and the Investor Majority may be made without restriction as to price or otherwise and with any such conditions as may be imposed and each such transfer shall be registered by the Directors. For the avoidance of doubt, the restrictions imposed by Article 16 shall not apply in relation to any such transfer.

 

15.12

Any Shares may at any time be transferred where there is a sale of the entire issued share capital of the Company to a Holding Company, which has been approved by the Board and an Investor Majority.

 

15.13

The Company shall only be permitted to sell or transfer any Shares held as Treasury Shares to any person with Investor Majority Consent.

 

16.

Transfers of Shares subject to pre-emption rights

 

16.1

Save where the provisions of Articles 15, 20, 21 and 22 apply, any transfer of Shares by a Shareholder prior to a Qualifying IPO shall be subject to the pre-emption rights contained in this Article 16.

 

16.2

A Shareholder who wishes to transfer Shares (a "Seller") shall, except as otherwise provided in these Articles, before transferring or agreeing to transfer any Shares give notice in writing (a "Transfer Notice") to the Company specifying:

 

(a)

the number of Shares which he wishes to transfer (the "Sale Shares");

 

(b)

if he wishes to sell the Sale Shares to a third party, the name of the proposed transferee;

 

(c)

the price at which he wishes to transfer the Sale Shares; and

 

(d)

whether the Transfer Notice is conditional on all or a specific number of the Sale Shares being sold to Shareholders ( a "Minimum Transfer Condition").

 

If no cash price is specified by the Seller, the price at which the Sale Shares are to be transferred (the "Transfer Price") must be agreed by the Board (including Investor Director Consent). In addition, if the price is not specified in cash, an equivalent cash value price must be agreed between the Seller and the Board (including Investor Director Consent). In both cases, the price will be deemed to be the Fair Value of the Sale Shares if no price is agreed within 5 Business Days of the Company receiving the Transfer Notice.

 

16.3

Unless otherwise determined by the Board (with Investor Director Consent), no Transfer Notice once given or deemed to have been given under these Articles may be withdrawn.

 

16.4

A Transfer Notice constitutes the Company the agent of the Seller for the sale of the Sale Shares at the Transfer Price.

 

16.5

As soon as practicable following the later of:

 

(a)

receipt of a Transfer Notice; and

 

 

 

(b)

in the case where the Transfer Price has not been agreed, the determination of the Transfer Price under Article 17,

 

the Board shall offer the Sale Shares for sale to the Shareholders in the manner set out in Articles 16.6 and 16.7. Each offer must be in writing and give details of the number and Transfer Price of the Sale Shares offered.

 

16.6

Priority for offer of Sale Shares

 

(a)

If the Sale Shares are Series A Shares or Series B Shares, the Company shall offer them to the Series A Shareholders and Series B Shareholders (as if the Series A Shares and Series B Shares constituted one and the class); and

 

(b)

Save as set out in Article 19.4(b), if the Sale Shares are Ordinary Shares, the Sale Shares shall be offered to the holders of Equity Shares (as if the Equity Shares constituted one and the same class),

 

in each case on the basis set out in Article 16.7.

 

16.7

Transfers: Offer

 

(a)

The Board shall offer the Sale Shares pursuant to the Priority Rights to all shareholders specified in the offer other than the Seller (the "Continuing Shareholders") inviting them to apply in writing within the period from the date of the offer to the date 10 Business Days after the offer (inclusive) (the "Offer Period") for the maximum number of Sale Shares they wish to buy.

 

(b)

If the Sale Shares are subject to a Minimum Transfer Condition then any allocation made under this Article 16.7 will be conditional on the fulfilment of the Minimum Transfer Condition.

 

(c)

If, at the end of the Offer Period, the number of Sale Shares applied for is equal to or exceeds the number of Sale Shares, the Board shall allocate the Sale Shares to each Continuing Shareholder who have applied for Sale Shares in the proportion (fractional entitlements being rounded to the nearest whole number) which his existing holding of the relevant class(es) of Shares bears to the total number of the relevant class(es) of Shares held by those Continuing Shareholders who have applied for Sale Shares which procedure shall be repeated until all Sale Shares have been allocated but no allocation shall be made to a Shareholder of more than the maximum number of Sale Shares which he has stated he is willing to buy.

 

16.8

If, at the end of the Offer Period, the number of Sale Shares applied for is less than the number of Sale Shares, the Board shall allocate the Sale Shares to the Continuing Shareholders in accordance with their applications and the balance will be dealt with in accordance with Article 16.9(e).

 

16.9

Completion of transfer of Sale Shares

 

(a)

If the Transfer Notice includes a Minimum Transfer Condition and the total number of Shares applied for does not meet the Minimum Transfer Condition the Board shall notify the Seller and all those to whom Sale Shares have been conditionally allocated under Article 16.7 stating the condition has not been met and that the relevant Transfer Notice has lapsed with immediate effect.

 

(b)

If:

 

(i)

the Transfer Notice does not include a Minimum Transfer Condition; or

 

 

(ii)

the Transfer Notice does include a Minimum Transfer Condition and allocations have been made in respect of all or the minimum required number of the Sale Shares,

 

the Board shall, when no further offers are required to be made under Article 16.7 and once the requirements of Articles 20 and/or 21 have been fulfilled to the extent required, give written notice of allocation (an "Allocation Notice") to the Seller and each Shareholder to whom Sale Shares have been allocated (an "Applicant") specifying the number of Sale Shares allocated to each Applicant and the place and time (being not less than 5 Business Days nor more than 10 Business Days after the date of the Allocation Notice) for completion of the transfer of the Sale Shares.

 

(c)

Upon service of an Allocation Notice, the Seller must, against payment of the Transfer Price, transfer the Sale Shares in accordance with the requirements specified in it.

 

(d)

If the Seller fails to comply with the provisions of Article 16.9(c):

 

(i)

the chairman of the Company or, failing him, one of the directors, or some other person nominated by a resolution of the Board, may on behalf of the Seller:

 

(A)          complete, execute and deliver in his name all documents necessary to give effect to the transfer of the relevant Sale Shares to the Applicants;

 

(B)          receive the Transfer Price and give a good discharge for it; and

 

(C)          (subject to the transfer being duly stamped) enter the Applicants in the register of Shareholders as the holders of the Shares purchased by them; and

 

(ii)

the Company shall pay the Transfer Price into a separate bank account in the Company's name on trust (but without interest) or otherwise hold the Transfer Price on trust for the Seller until he has delivered to the Company his certificate or certificates for the relevant Shares (or an indemnity for lost certificate in a form acceptable to the Board).

 

(e)

If an Allocation Notice does not relate to all the Sale Shares then, subject to Article 16.9(f), the Seller may, within eight weeks after service of the Allocation Notice, transfer the unallocated Sale Shares to any person at a price at least equal to the Transfer Price.

 

(f)

The right of the Seller to transfer Shares under Article 16.9(e) does not apply if the Board is of the opinion on reasonable grounds that:

 

(i)

the transferee is a person (or a nominee for a person) who the Board (with Investor Director Consent) determine in their absolute discretion is a competitor with (or an Associate of a competitor with) the business of the Company or with a Subsidiary Undertaking of the Company;

 

(ii)

the sale of the Sale Shares is not bona fide or the price is subject to a deduction, rebate or allowance to the transferee; or

 

(iii)

the Seller has failed or refused to provide promptly information available to it or him and reasonably requested by the Board for the purpose of enabling it to form the opinion mentioned above.

 

16.10

Any Sale Shares offered under this Article 16 to an Investor may be accepted in full or part only by a Member of the same Fund Group as that Investor or a Member of the same Group as that Investor in accordance with the terms of this Article 16.

 

 

17.

Valuation of Shares

 

17.1

If no Transfer Price can be agreed between the Seller and the Board in accordance with the provisions of Articles 14.9, 16.2 or 19.4(a) or otherwise then, on the date of failing agreement, the Board shall either:

 

(a)

appoint an expert valuer in accordance with Article 17.2 (the "Expert Valuer" to certify the Fair Value of the Sale Shares; or

 

(b)

(if the Fair Value has been certified by an Expert Valuer within the preceding 12 weeks) specify that the Fair Value of the Sale Shares will be calculated by dividing any Fair Value so certified by the number of Sale Shares to which it related and multiplying such Fair Value by the number of Sale Shares the subject of the Transfer Notice.

 

17.2

The Expert Valuer will be either:

 

(a)

the Auditors; or

 

(b)

(if otherwise agreed by the Board and the Seller) an independent firm of Chartered Accountants to be agreed between the Board and the Seller or failing agreement not later than the date 10 Business Days after the date of service of the Transfer Notice to be nominated by the then President of the Institute of Chartered Accountants in England and Wales on the application of either party and approved by the Company.

 

17.3

The "Fair Value" of the Sale Shares shall be determined by the Expert Valuer on the following assumptions and bases:

 

(a)

valuing the Sale Shares as on an arm's-length sale between a willing seller and a willing buyer;

 

(b)

if the Company is then carrying on business as a going concern, on the assumption that it will continue to do so;

 

(c)

that the Sale Shares are capable of being transferred without restriction;

 

(d)

valuing the Sale Shares as a rateable proportion of the total value of all the issued Shares (excluding any Shares held as Treasury Shares) without any premium or discount being attributable to the percentage of the issued share capital of the Company which they represent but taking account of the rights attaching to the Sale Shares; and

 

(e)

reflect any other factors which the Expert Valuer reasonably believes should be taken into account.

 

17.4

If any difficulty arises in applying any of these assumptions or bases then the Expert Valuer shall resolve that difficulty in whatever manner they shall in their absolute discretion think fit.

 

17.5

The Expert Valuer shall be requested to determine the Fair Value within 20 Business Days of their appointment and to notify the Board of their determination.

 

17.6

The Expert Valuer shall act as experts and not as arbitrators and their determination shall be final and binding on the parties (in the absence of fraud or manifest error).

 

17.7

The Board will give the Expert Valuer access to all accounting records or other relevant documents of the Company subject to them agreeing to such confidentiality provisions as the Board may reasonably impose.

 

17.8

The Expert Valuer shall deliver their certificate to the Company. As soon as the Company receives the certificate it shall deliver a copy of it to the Seller. Unless the Sale Shares are to be sold under a Transfer Notice, which is deemed to have been served, the Seller may by notice in writing to the Company within five Business Days of the service on him of the copy certificate, cancel the Company's authority to sell the Sale Shares.

 

 

17.9

The cost of obtaining the certificate shall be paid by the Company unless:

 

(a)

the Seller cancels the Company's authority to sell; or

 

(b)

the Sale Price certified by the Expert Valuer is less than the price (if any) offered by the directors to the Seller for the Sale Share before Expert Valuer was instructed,

 

in which case the Seller shall bear the cost.

 

18.

Compulsory transfers - general

 

18.1

A person entitled to a Share in consequence of the bankruptcy of a Shareholder shall be deemed to have given a Transfer Notice in respect of that Share at a time determined by the Directors.

 

18.2

If a Share remains registered in the name of a deceased Shareholder for longer than one year after the date of his death the Directors may require the legal personal representatives of that deceased Shareholder either:

 

(a)

to effect a Permitted Transfer of such Shares (including for this purpose an election to be registered in respect of the Permitted Transfer); or

 

(b)

to show to the satisfaction of the Directors that a Permitted Transfer will be effected before or promptly upon the completion of the administration of the estate of the deceased Shareholder.

 

If either requirement in this Article 18.2 shall not be fulfilled to the satisfaction of the Directors a Transfer Notice shall be deemed to have been given in respect of each such Share save to the extent that, the Directors may otherwise determine.

 

18.3

If a Shareholder which is a company, either suffers or resolves for the appointment of a liquidator, administrator or administrative receiver over it or any material part of its assets (other than as part of a bona fide restructuring or reorganisation), the relevant Shareholder (and all its Permitted Transferees) shall be deemed to have given a Transfer Notice in respect of all the shares held by the relevant Shareholder and its Permitted Transferees save to the extent that, and at a time, the Directors may determine.

 

18.4

If there is a change in control (as control is defined in section 1124 of the CTA 2010) of any Shareholder which is a company, it shall be bound at any time, if and when required in writing by the Directors to do so, to give (or procure the giving in the case of a nominee) a Transfer Notice in respect of all the Shares registered in its and their names and their respective nominees' names save that, in the case of the Permitted Transferee, it shall first be permitted to transfer those Shares back to the Original Shareholder from whom it received its Shares or to any other Permitted Transferee before being required to serve a Transfer Notice. This Article 18.4 shall not apply to a member that is an Investor.

 

19.

Departing employees

 

Bad Leavers

 

19.1

Unless and to the extent that the Board and the Investor Majority determine that this Article 19.1 shall not apply, if an Employee ceases to be an Employee by reason of being a Bad Leaver, all of the Employee Shares relating to such Employee shall automatically convert into Deferred B Shares (on the basis of one Deferred B Share for each Ordinary Share held) on the Effective Termination Date (rounded down to the nearest whole share).

 

 

19.2

Upon such conversion into Deferred B Shares, the Company shall be entitled to enter the holder of the Deferred B Shares on the register of members of the Company as the holder of the appropriate number of Deferred B Shares as from the Deferred Conversion Date. Upon the Deferred Conversion Date, the Employee (and his Permitted Transferee(s)) shall deliver to the Company at its registered office the share certificate(s) (to the extent not already in the possession of the Company) (or an indemnity for lost certificate in a form acceptable to the Board) for the Employee Shares so converting and upon such delivery there shall be issued to him (or his Permitted Transferee(s)) share certificate(s) for the number of Deferred B Shares resulting from the relevant conversion.

 

Good Leavers

 

19.3

Unless and to the extent that the Board and the Investor Majority determine that this Article 19.3 shall not apply, if an Employee (other than a Founder) ceases to be an Employee during the Relevant Period by reason of being a Good Leaver, the relevant Employee shall be deemed to have given a Transfer Notice in respect of the Leaver's Percentage of the Employee Shares (other than Employee Option Shares) on the Effective Termination Date save that if such Employee ceases to be an Employee within 12 months from the Commencement Date a Transfer Notice shall be deemed to have been given in respect of all the Employee Shares.

 

19.4

In such circumstances:

 

(a)

the Transfer Price shall be the Fair Value as agreed between the Board (including Investor Director Consent) and the relevant Employee, or failing agreement within five Business Days of seeking to agree such price, shall be as determined in accordance with Article 17; and

 

(b)

the Priority Rights shall be such that the Employee Shares are offered in the following order of priority:

 

(i)            to any person(s) approved by the Board (other than the departing Employee) and an Investor Majority; and/or

 

(ii)           to the Company (subject always to the provisions of the Act).

 

Suspension of voting rights

 

19.5

All voting rights attached to Employee Shares held by an Employee or by any Permitted Transferee of that Employee (the "Restricted Member"), if any, shall at the time he ceases to be an Employee be suspended unless the Board and the Investor Majority notify him otherwise.

 

19.6

Any Employee Shares whose voting rights are suspended pursuant to Article 19.5 ("Restricted Shares") shall confer on the holders of Restricted Shares the right to receive a notice of and attend all general meetings of the Company but shall have no right to vote either in person or by proxy. Voting rights suspended pursuant to Article 19.5 shall be automatically restored immediately prior to an IPO. If a Restricted Member transfers any Restricted Shares in accordance with these Articles all voting rights attached to the Restricted Shares so transferred shall upon completion of the transfer (as evidenced by the transferee's name being entered in the Company's register of members) automatically be restored.

 

20.

Mandatory Offer on a Change of Control

 

20.1

Subject to Article 20.8 and except in the case of Permitted Transfers and transfers pursuant to Articles 18, 19 and 22, after going through the pre-emption procedure in Article 16, the provisions of Article 20.2 will apply if one or more Proposed Sellers propose to transfer in one or a series of related transactions prior to a Qualifying IPO any Equity Shares (the "Proposed Transfer") which would, if put into effect, result in any Proposed Purchaser (and Associates of his or persons Acting in Concert with him) acquiring a Controlling Interest in the Company.

 

 

20.2

A Proposed Seller must, before making a Proposed Transfer procure the making by the Proposed Purchaser of an offer (the "Offer") to any Shareholders who have not taken up their pre-emptive rights under Article 16 to acquire all of the Equity Shares for a consideration per share the value of which is at least equal to the Specified Price (as defined in Article 20.7).

 

20.3

The Offer must be given by written notice (a "Proposed Sale Notice") at least 10 Business Days (the "Offer Period") prior to the proposed sale date ("Proposed Sale Date"). The Proposed Sale Notice must set out, to the extent not described in any accompanying documents, the identity of the Proposed Purchaser, the purchase price and other terms and conditions of payment, the Proposed Sale Date and the number of Shares proposed to be purchased by the Proposed Purchaser (the "Proposed Sale Shares").

 

20.4

If any other holder of Equity Shares is not given the rights accorded him by this Article, the Proposed Sellers will not be entitled to complete their sale and the Company will not register any transfer intended to carry that sale into effect.

 

20.5

If the Offer is accepted by any Shareholder (an "Accepting Shareholder") within the Offer Period, the completion of the Proposed Transfer will be conditional upon the completion of the purchase of all the Shares held by Accepting Shareholders.

 

20.6

The Proposed Transfer is subject to the pre-emption provisions of Article 16 but the purchase of the Accepting Shareholders' shares shall not be subject to Article 16.

 

20.7

For the purpose of this Article:

 

(a)

the expression "Specified Price" shall mean in respect of each Share a sum in cash equal to the highest price per Share offered or paid by the Proposed Purchaser:

 

(i)

in the Proposed Transfer; or

 

(ii)

in any related or previous transaction by the Proposed Purchaser or any person Acting in Concert with the Proposed Purchaser in the 12 months preceding the date of the Proposed Transfer,

 

plus an amount equal to the Relevant Sum, as defined in Article 20.7(b), of any other consideration (in cash or otherwise) paid or payable by the Proposed Purchaser or any other person Acting in Concert with the Proposed Purchaser, which having regard to the substance of the transaction as a whole, can reasonably be regarded as an addition to the price paid or payable for the Shares (the "Supplemental Consideration") provided that the total consideration paid by the Proposed Purchaser in respect of the Proposed Transfer is distributed to the Proposed Seller and the Accepting Shareholders in accordance with the provisions of Articles 5 and 6; and

 

(b)           Relevant Sum = C ÷ A

 

where:

A = number of Equity Shares being sold in connection with the relevant Proposed Transfer;

 

C = the Supplemental Consideration.

 

20.8

The provisions of this Article 20.1 shall not apply in the case of a Proposed Transfer to OSI unless such Proposed Transfer would result in OSI (and Associates of OSI or persons Acting in Concert with OSI) holding in excess of 60% of the Equity Shares in issue from time to time.

 

21.

Co-Sale right

 

21.1

No transfer (other than a Permitted Transfer) of any of the Employee Shares relating to an Employee may be made or validly registered prior to a Qualifying IPO unless the relevant Employee and any Permitted Transferee of that Employee (each a "Selling Employee") shall have observed the following procedures of this Article unless the Investor Majority has determined that this Article 21 shall not apply to such transfer.

 

 

21.2

After the Selling Employee has gone through the pre-emption process set out in Article 16, the Selling Employee shall give to each holder of Series A Shares and Series B Shares who has not taken up their pre-emptive rights under Article 16 (an "Equity Holder") not less than 15 Business Days' notice in advance of the proposed sale (a "Co-Sale Notice"). The Co-Sale Notice shall specify:

 

(a)

the identity of the proposed purchaser (the "Buyer");

 

(b)

the price per share which the Buyer is proposing to pay;

 

(c)

the manner in which the consideration is to be paid;

 

(d)

the number of Equity Shares which the Selling Employee proposes to sell; and

 

(e)

the address where the counter-notice should be sent.

 

For the purposes of this Article 21, it is acknowledged that Shares of different classes will be transferable at different prices, such price per class of Share being a sum equal to that to which they would be entitled if the consideration payable by the Buyer to the Selling Employee were used to determine the valuation of the entire issued share capital of the Company and such valuation was then allocated as between the Shares in accordance with Articles 5 and 6.

 

21.3

Each Equity Holder shall be entitled within five Business Days after receipt of the Co- Sale Notice, to notify the Selling Employee that they wish to sell a certain number of Equity Shares held by them at the proposed sale price, by sending a counter-notice which shall specify the number of Equity Shares which such Equity Holder wishes to sell. The maximum number of shares which an Equity Holder can sell under this procedure shall be:

 

 

where:

 

X       is the number of Series A Shares and Series B Shares held by the Equity Holder;

 

Y       is the total number of Equity Shares;

 

Z       is the number of Equity Shares the Selling Employee proposes to sell.

 

Any Equity Holder who does not send a counter-notice within such five Business Day period shall be deemed to have specified that they wish to sell no shares.

 

21.4

Following the expiry of five Business Days from the date the Equity Holders receive the Co-Sale Notice, the Selling Employee shall be entitled to sell to the Buyer on the terms notified to the Equity Holders a number of shares not exceeding the number specified in the Co-Sale Notice less any shares which Equity Holders have indicated they wish to sell, provided that at the same time the Buyer (or another person) purchases from the Equity Holders the number of shares they have respectively indicated they wish to sell on terms no less favourable than those obtained by the Selling Employee from the Buyer.

 

21.5

No sale by the Selling Employee shall be made pursuant to any Co-Sale Notice more than three months after service of that Co-Sale Notice.

 

21.6

Sales made in accordance with this Article 21 shall not be subject to Article 16.

 

 

22.

Drag-along

 

22.1

If (i) the holders of seventy five (75) per cent of the Equity Shares (excluding any Treasury Shares) (the "Selling Shareholders") and (ii) in the event of a Relevant Drag Sale, the Series B Majority (including the Lead Series B Investor), wish to transfer all their interest in Shares prior to a Qualifying IPO (the "Sellers' Shares") to a Proposed Purchaser (the “Proposed Drag Sale”), the Selling Shareholders shall have the option (the "Drag Along Option") to compel each other holder of Shares (each a "Called Shareholder" and together the "Called Shareholders") to sell and transfer all their Shares to the Proposed Purchaser or as the Proposed Purchaser shall direct (the "Drag Purchaser") in accordance with the provisions of this Article.

 

22.2

The Selling Shareholders may exercise the Drag Along Option by giving a written notice to that effect (a "Drag Along Notice") to the Company which the Company shall as soon as reasonably practicable copy to the Called Shareholders at any time before the transfer of the Sellers' Shares to the Drag Purchaser. A Drag Along Notice shall specify that:

 

(a)

the Called Shareholders are required to transfer all their Shares (the "Called Shares") under this Article;

 

(b)

the person to whom they are to be transferred;

 

(c)

the consideration for which the Called Shares are to be transferred (which may be cash or non-cash consideration or a combination of both and which shall be calculated or determined in accordance with this Article);

 

(d)

the proposed date of transfer, and

 

(e)

the form of any sale agreement or form of acceptance or any other document of similar effect that the Called Shareholders are required to sign in connection with such sale (the "Sale Agreement"),

 

(and, in the case of paragraphs (b) to (d) above, whether actually specified or to be determined in accordance with a mechanism described in the Drag Along Notice). No Drag Along Notice or Sale Agreement may require a Called Shareholder to agree to any terms unless such terms are (a) specifically provided for or referred to in this Article; or (b) apply equally (or on a substantially equivalent basis) to each Selling Shareholder that holds the same class of Shares.

 

22.3

Drag Along Notices shall be irrevocable but will lapse if for any reason there is not a sale of the Sellers' Shares by the Selling Shareholders to the Drag Purchaser within 60 Business Days after the date of service of the Drag Along Notice. The Selling Shareholders shall be entitled to serve further Drag Along Notices following the lapse of any particular Drag Along Notice.

 

22.4

The consideration (in cash or otherwise) for which the Called Shareholders shall be obliged to sell each of the Called Shares shall be that to which they would be entitled if the total consideration proposed to be paid by the Drag Purchaser were distributed to the holders of the Called Shares and the Sellers' Shares in accordance with the provisions of Articles 5 and 6 (the "Drag Consideration"). Where the consideration (or any part thereof) is non-cash consideration, any valuation of such consideration applicable to the consideration payable to the Selling Shareholders shall also be applicable to the consideration payable to the Called Shareholders. The Drag Consideration may be subject to adjustment (on the basis of completion accounts or another similar mechanisms) on the same terms as the consideration payable to the Selling Shareholders.

 

22.5

If any Investors are given an option as to the form of consideration to be received for any of their Shares, all Investors will be given the same option.

 

22.6

In respect of a transaction that is the subject of a Drag-Along Notice and with respect to any Drag Document, a Called Shareholder shall be obliged to undertake to transfer his Shares with full title guarantee (and provide an indemnity for lost certificate in a form acceptable to the Board if so necessary) on receipt of the Drag Consideration when due and:

 

 

(a)

may be required to accept that some or all of the Drag Consideration will be paid as deferred consideration, provided that the Called Shareholders shall receive any Drag Consideration due to them no later than the Selling Shareholders;

 

(b)

may be required to make a contribution towards any escrow, retention of consideration or similar arrangement on the same basis as the Selling Shareholders, on a pro-rata basis to their respective entitlement to the Drag Consideration;

 

(c)

shall be required to provide representations and warranties related to capacity, authority, ownership and the ability to convey title to the Called Shares, including, but not limited to, representations and warranties that the Called Shareholder holds all right, title and interest in and to the Called Shares such Called Shareholder purports to hold, free and clear of all encumbrances, on a several and not joint basis with any other person;

 

(d)

shall not be required to give any other warranties or indemnities;

 

(e)

no Called Shareholder shall be liable for the inaccuracy of any representation or warranty made by any other person in connection with the Drag Along Sale, other than the Company, except to the extent that funds may be paid out of an escrow established to cover, or a holdback of the purchase monies in respect of, breach of representations, warranties and covenants of the Company;

 

(f)

shall not be required to agree to (i) any covenant to not compete or not solicit customers, employees or suppliers of the Company or any other party to the Drag-Along Sale or which otherwise limits or restricts such Called Shareholder's or its Associates' business activities or (ii) to any release or waive of claims other than those arising solely in such Called Shareholder's capacity as a shareholder of the Company or (iii) any amendment to any collaboration agreement, licence or similar commercial agreement which may have been entered into between such Called Shareholder and the Company.

 

Notwithstanding the foregoing, the liability, if any, of a Called Shareholder for indemnification or for the inaccuracy of any representations and warranties made by the Company in connection with the Drag Along Sale, shall be several and not joint with any other person and shall be pro rata in proportion to the amount of consideration to be paid to the Called Shareholder in connection with the Drag Along Sale and any liability shall be limited to the Called Shareholder's applicable share of any negotiated aggregate indemnification amount that applies equally to all Shareholders but that in no event exceeds the amount of consideration otherwise payable to such Called Shareholder in connection with such Drag Along Sale.

 

22.7

Within three Business Days of the Company copying the Drag Along Notice to the Called Shareholders (or such later date as may be specified in the Drag Along Notice) (the "Drag Completion Date"), each Called Shareholder shall deliver:

 

(a)

duly executed stock transfer form(s) for its Shares in favour of the Drag Purchaser;

 

(b)

the relevant share certificate(s) (or a duly executed indemnity for lost certificate in a form acceptable to the Board) to the Company; and

 

(c)

duly executed Sale Agreement, if applicable, in the form specified in the Drag Along Notice or as otherwise specified by the Company,

 

(together the "Drag Documents").

 

22.8

On the Drag Completion Date, the Drag Purchaser (or, to the extent the Drag Purchaser has paid such consideration to the Company, the Company on behalf of the Drag Purchaser) shall:

 

 

(a)

pay or otherwise deliver or make available to each Called Shareholder the Drag Consideration that is due (less any amount to be deducted or retained pursuant to this Article or pursuant to any Sale Agreement, including in respect of transaction fees and expenses); and/or

 

(b)

if the consideration (or any part thereof) is non-cash consideration, the Drag Purchaser shall satisfy the consideration due to the Called Shareholders through the issue of shares or securities or the payment or transfer or other settlement of any other non-cash consideration which forms the non-cash consideration due to be issued, paid, transferred or otherwise settled to the Called Shareholders.

 

The Company's receipt of the Drag Consideration shall be a good discharge to the Drag Purchaser. The Company shall hold the Drag Consideration in trust for each of the Called Shareholders without any obligation to pay interest.

 

22.9

To the extent that the Drag Purchaser has not, on the Drag Completion Date, paid the Drag Consideration that is due to the Called Shareholders (or to the Company on their behalf) or, in the case of any non-cash consideration, to the extent the Drag Purchaser has not made available or settled such non-cash consideration or satisfied the Board that the Drag Purchaser is in a position to issue, pay, transfer or otherwise settle such non-cash consideration, the Called Shareholders shall be entitled to the immediate return of the Drag Documents for the relevant Shares and the Called Shareholders shall have no further rights or obligations under this Article 22 in respect of the relevant Drag Along Notice (without prejudice to any party's right to serve a further Drag Along Notice at any time thereafter).

 

22.10

If a Called Shareholder fails to deliver the Drag Documents for its Shares to the Company by the Drag Completion Date, the Company and each Director shall be constituted the agent of such defaulting Called Shareholder to take such actions and enter into any Drag Document or such other agreements or documents as are necessary to effect the transfer of the Called Shareholder's Shares pursuant to this Article 22 and the Directors shall, if requested by the Drag Purchaser, authorise any Director to transfer the Called Shareholder's Shares on the Called Shareholder's behalf to the Drag Purchaser to the extent the Drag Purchaser has, by the Drag Completion Date:

 

(a)

paid the Drag Consideration to the Company for the Called Shareholder's Shares offered to him; and/or

 

(b)

in the case of any non-cash consideration, has otherwise made available or settled such non-cash consideration or has satisfied the Board that the Drag Purchaser is in a position to issue, pay, transfer or otherwise settle such non-cash consideration,

 

The Board shall then authorise registration of the transfer once appropriate stamp duty has been paid. The defaulting Called Shareholder shall surrender his share certificate for his Shares (or suitable executed indemnity) to the Company. On surrender, he shall be entitled to the Drag Consideration due to him.

 

22.11

Any transfer of Shares to a Drag Purchaser pursuant to a sale in respect of which a Drag Along Notice has been duly served shall not be subject to the provisions of Article 16.

 

22.12

On any person, following the issue of a Drag Along Notice, becoming a Shareholder pursuant to the exercise of a pre-existing option or warrant to acquire shares in the Company or pursuant to the conversion of any convertible security of the Company (a "New Shareholder"), a Drag Along Notice shall be deemed to have been served on the New Shareholder on the same terms as the previous Drag Along Notice who shall then be bound to sell and transfer all Shares so acquired to the Drag Purchaser and the provisions of this Article shall apply with the necessary changes to the New Shareholder except that completion of the sale of the Shares shall take place immediately on the Drag Along Notice being deemed served on the New Shareholder.

 

 

Asset Sale

 

22.13

In the event that an Asset Sale is approved by the Board and the holders of seventy- five (75) per cent of the Equity Shares (excluding any Treasury Shares), such consenting Shareholders shall have the right, by notice in writing to all other Shareholders, to require such Shareholders to take any and all such actions as it may be necessary for Shareholders to take in order to give effect to or otherwise implement such Asset Sale, subject always to the proceeds from such Asset Sale being distributed to Shareholders in accordance with the provisions of Articles 5 and 6 and provided that the principles in Article 22.6 shall apply mutatis mutandis.

 

23.

Holding Company Reorganisation

 

23.1

In the event of a Holding Company Reorganisation approved by the Board and Investor Majority Consent (a "Proposed Reorganisation"), each of the Shareholders shall (i) consent to, vote for, raise no objections to and waive any applicable rights in connection with the Proposed Reorganisation and (ii) take all such actions to tender their Shares as required pursuant to the Proposed Reorganisation (the "Reorganisation Actions"). The Shareholders shall be required to take all Reorganisation Actions with respect to the Proposed Reorganisation as are required by the Board to facilitate the Proposed Reorganisation. If any Shareholder fails to comply with the provisions of this Article 23.1, the Company shall be constituted the agent of each defaulting Shareholder for taking the Reorganisation Actions as are necessary to effect the Proposed Reorganisation and the Directors may authorise an officer or member to execute and deliver on behalf of such defaulting Shareholder the necessary documents to effect the Proposed Reorganisation, including, without limitation, any share exchange agreement and/or stock transfer form.

 

23.2

The Company shall procure that the shares issued by the Holding Company to the Shareholders (or any subsequent holder, as the case may be) pursuant to the Holding Company Reorganisation will be credited as fully paid. Such Holding Company shares shall be subject to the constitutional documents of the Holding Company and otherwise (subject to the express provisions of such constitutional documents) shall have the same rights and obligations as all other Holding Company shares of the same class in issue at the time.

 

23.3

On any person, following the date of completion of a Holding Company Reorganisation, becoming a Shareholder pursuant to the exercise of a pre-existing option or warrant to acquire shares in the Company or pursuant to the conversion of any convertible security of the Company or otherwise (a "Post-Reorganisation Shareholder"), the Post-Reorganisation Shareholder shall then be bound to do all such acts and things necessary in order to transfer to the Holding Company all such resulting shares held by the Post-Reorganisation Shareholder, and the provisions of this Article 23 shall apply with the necessary changes to the Post-Reorganisation Shareholder.

 

24.

General meetings

 

24.1        If the Directors are required by the Shareholders under section 303 of the Act to call a general meeting, the Directors shall convene the meeting for a date not later than 28 days after the date on which the Directors became subject to the requirement under section 303 of the Act.

 

24.2

The provisions of section 318 of the Act shall apply to the Company, save that if a quorum is not present at any meeting adjourned for the reason referred to in Article 33 of the Model Articles, then, provided that the Qualifying Person present holds or represents the holder of at least 25 per cent both in nominal value and in number of the Equity Shares (excluding Treasury Shares), any resolution agreed to by such Qualifying Person shall be as valid and effectual as if it had been passed unanimously at a general meeting of the Company duly convened and held.

 

24.3

If any two or more Shareholders (or Qualifying Persons representing two or more Shareholders) attend the meeting in different locations, the meeting shall be treated as being held at the location specified in the notice of the meeting, save that if no one is present at that location so specified, the meeting shall be deemed to take place where the largest number of Qualifying Persons is assembled or, if no such group can be identified, at the location of the chairman.

 

24.4

If a demand for a poll is withdrawn under Article 36(3) of the Model Articles, the demand shall not be taken to have invalidated the result of a show of hands declared before the demand was made and the meeting shall continue as if the demand had not been made.

 

24.5

Polls must be taken in such manner as the chairman directs. A poll demanded on the election of a chairman or on a question of adjournment must be held immediately. A poll demanded on any other question must be held either immediately or at such time and place as the chairman directs not being more than 14 days after the poll is demanded. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll was demanded.

 

 

24.6

No notice need be given of a poll not held immediately if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case at least seven clear days' notice shall be given specifying the time and place at which the poll is to be taken.

 

24.7

If the poll is to be held more than 48 hours after it was demanded the Shareholders shall be entitled to deliver Proxy Notices in respect of the poll at any time up to 24 hours before the time appointed for taking that poll. In calculating that period, no account shall be taken of any part of a day that is not a working day.

 

25.

Proxies

 

25.1

Paragraph (c) of Article 38(1) of the Model Articles shall be deleted and replaced by the words: "is signed by or on behalf of the shareholder appointing the proxy and accompanied by any the authority under which it is signed (or a certified copy of such authority or a copy of such authority in some other way approved by the directors)".

 

25.2

The instrument appointing a proxy and any authority under which it is signed or a certified copy of such authority or a copy in some other way approved by the Directors may:

 

(a)

be sent or supplied in hard copy form, or (subject to any conditions and limitations which the Board may specify) in electronic form, to the registered office of the Company or to such other address (including electronic address) as may be specified for this purpose in the notice convening the meeting or in any instrument of proxy or any invitation to appoint a proxy sent or supplied by the Company in relation to the meeting at any time before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote;

 

(b)

be delivered at the meeting or adjourned meeting at which the person named in the instrument proposes to vote to the chairman or to the company secretary or to any Director; or

 

(c)

in the case of a poll, be delivered at the meeting at which the poll was demanded to the chairman or to the company secretary or to any Director, or at the time and place at which the poll is held to the Chainman or to the company secretary or to any Director or scrutineer, and an instrument of proxy which is not deposited or delivered in a manner so permitted shall be invalid.

 

26.

Directors' borrowing powers

 

The Directors may, with Investor Director Consent or Investor Majority Consent where required, exercise all the powers of the Company to borrow or raise money and to mortgage or charge its undertaking, property and uncalled capital and to issue debentures, debenture stock and other securities as security for any debt, liability of obligation of the Company or of any third party.

 

 

27.

Alternate Directors

 

27.1

Notwithstanding any provision of these Articles to the contrary, any person appointed as a Director (the "Appointer") may appoint any director or any other person as he thinks fit to be his alternate Director to:

 

(a)

exercise that Director’s powers; and

 

(b)

carry out that Director's responsibilities in relation to the taking of decisions by the Directors in the absence of the alternate's Appointer.

 

The appointment of an alternate Director shall not require approval by a resolution of the Directors.

 

27.2

Any appointment or removal of an alternate must be effected by notice in writing to the Company signed by the Appointer, or in any other manner approved by the Directors.

 

27.3

The notice must:

 

(a)

identify the proposed alternate; and

 

(b)

in the case of a notice of appointment, contain a statement signed by the proposed alternate that the proposed alternate is willing to act as the alternate of the Director giving the notice.

 

27.4

An alternate Director may act as an alternate to more than one Director and has the same rights, in relation to any Directors' meeting (including as to notice) or Directors' written resolution, as the alternate's Appointer.

 

27.5

Except as these Articles specify otherwise, alternate directors:

 

(a)

are deemed for all purposes to be Directors;

 

(b)

are liable for their own acts and omissions;

 

(c)

are subject to the same restrictions as their Appointers; and

 

(d)

are not deemed to be agents of or for their Appointers,

 

and, in particular (without limitation), each alternate director shall be entitled to receive notice of all meetings of Directors and of all meetings of committees of Directors of which his Appointer is a member.

 

27.6

A person who is an alternate Director but not a Director:

 

(a)

may be counted as participating for the purposes of determining whether a quorum is participating (but only if that person's Appointer is not participating); and

 

(b)

may sign a Directors' written resolution (but only if his Appointer is an Eligible Director in relation to that decision, but does not participate).

 

No alternate may be counted as more than one Director for such purposes.

 

27.7

A Director who is also an alternate Director is entitled, in the absence of his Appointer, to a separate vote on behalf of each Appointer, in addition to his own vote on any decision of the Directors (provided that his Appointer is an Eligible Director in relation to that decision).

 

 

27.8

An alternate Director is not entitled to receive any remuneration from the company for serving as an alternate Director, except such part of the alternate's Appointer's remuneration as the Appointer may direct by notice in writing made to the Company.

 

27.9

An alternate Director's appointment as an alternate shall terminate:

 

(a)

when the alternate's Appointer revokes the appointment by notice to the Company in writing specifying when it is to terminate;

 

(b)

on the occurrence in relation to the alternate of any event which, if it occurred in relation to the alternate's Appointer, would result in the termination of the Appointer's appointment as a Director;

 

(c)

on the death of the alternate's Appointer; or

 

(d)

when the alternate's Appointer's appointment as a Director terminates.

 

28.

Number of Directors

 

Unless and until the Company shall otherwise determine by ordinary resolution, the number of Directors shall be not less than two and not more than eight.

 

29.

Appointment of Directors

 

29.1

In addition to the powers of appointment under Article 20(1) of the Model Articles:

 

(a)

OSI, for so long as it and its Permitted Transferees holds not less than 10 per cent of the Equity Shares in issue (excluding Treasury Shares), shall be entitled to nominate one person to act as a Director;

 

(b)

the Lead Series B Investor, for so long as it and its Permitted Transferees holds not less than 10 per cent of the Equity Shares in issue (excluding Treasury Shares), shall be entitled to nominate one person to act as a Director;

 

in each case by notice in writing addressed to the Company from time to time and the holders of Shares other than the appointing holder(s) shall not vote their Shares so as to remove a Director from office. A person entitled to nominate a Director under this Article 29.1 shall be entitled to remove their nominated Director so appointed at any time by notice in writing to the Company served at its registered office and appoint another person to act in his place.

 

29.2

An appointment or removal of a Director under Article 29.1 will take effect at and from the time when the notice is received at the registered office of the Company or produced to a meeting of the directors of the Company.

 

29.3

Each Investor Director shall be entitled at his request to be appointed to any committee of the Board established from time to time and to the board of directors of any Subsidiary Undertaking.

 

30.

Disqualification of Directors

 

In addition to that provided in Article 22 of the Model Articles, the office of a Director shall also be vacated if:

 

(a)

he is convicted of a criminal offence (other than a minor motoring offence) and the Directors resolve that his office be vacated; or

 

(b)

in the case of Directors other than an Investor Director, if a majority of his co-Directors (including Investor Director Consent) serve notice on him in writing, removing him from office.

 

 

31.

Proceedings of Directors

 

31.1

The quorum for Directors' meetings shall be a majority of the Directors appointed from time to time who must include at least one Investor Director (if appointed) (save that where a Relevant Interest of an Investor Director is being authorised by other Directors in accordance with section 175(5)(a) of the Act, the relevant Investor Director and any other interested Director shall not be included in the quorum required for the purpose of such authorisation but shall otherwise be included for the purpose of forming the quorum at the meeting). If such a quorum is not present within half an hour from the time appointed for the meeting, or if during a meeting such quorum ceases to be present, the meeting shall stand adjourned to the same day in the next week at the same time and place or at such time and place as determined by the Directors present at such meeting. If a quorum is not present at any such adjourned meeting within half an hour from the time appointed, then the meeting shall proceed.

 

31.2

In the event that a meeting of the Directors is attended by a Director who is acting as alternate for one or more other Directors, the Director or Directors for whom he is the alternate shall be counted in the quorum despite their absence, and if on that basis there is a quorum the meeting may be held despite the fact (if it is the case) that only one Director is physically present.

 

31.3

If all the Directors participating in a meeting of the Directors are not physically in the same place, the meeting shall be deemed to take place where the largest group of participators in number is assembled. In the absence of a majority the location of the chairman shall be deemed to be the place of the meeting.

 

31.4

Notice of a Directors' meeting need not be given to Directors who waive their entitlement to notice of that meeting, by giving notice to that effect to the Company at any time before or after the date on which the meeting is held. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it.

 

31.5

Provided (if these Articles so require) that he has declared to the Directors, in accordance with the provisions of these Articles, the nature and extent of his interest (and subject to any restrictions on voting or counting in a quorum imposed by the Directors in authorising a Relevant Interest), a Director may vote at a meeting of the Directors or of a committee of the Directors on any resolution concerning a matter in which he has an interest, whether a direct or an indirect interest, or in relation to which he has a duty and shall also be counted in reckoning whether a quorum is present at such a meeting.

 

31.6

Questions arising at any meeting of the Directors shall be decided by a majority of votes. In the case of any equality of votes, the chairman shall not have a second or casting vote.

 

31.7

A decision of the Directors may take the form of a resolution in writing, where each Eligible Director has signed one or more copies of it, or to which each Eligible Director has otherwise indicated agreement in writing (including confirmation given by electronic means).

 

32.

Directors' interests

 

Specific interests of a Director

 

32.1

Subject to the provisions of the Act and provided (if these Articles so require) that he has declared to the Directors in accordance with the provisions of these Articles, the nature and extent of his interest, a Director may (save as to the extent not permitted by law from time to time), notwithstanding his office, have an interest of the following kind:

 

(a)

where a Director (or a person connected with him) is party to or in any way directly or indirectly interested in, or has any duty in respect of, any existing or proposed contract, arrangement or transaction with the Company or any other undertaking in which the Company is in any way interested;

 

(b)

where a Director (or a person connected with him) is a director, employee or other officer of, or a party to any contract, arrangement or transaction with, or in any way interested in, any body corporate promoted by the Company or in which the Company is in any way interested;

 

 

 

(c)           where a Director (or a person connected with him) is a shareholder in the Company or a shareholder in, employee, director, member or other officer of, or consultant to, a Parent Undertaking of, or a Subsidiary Undertaking of a Parent Undertaking of, the Company;

 

(d)           where a Director (or a person connected with him) holds and is remunerated in respect of any office or place of profit (other than the office of auditor) in respect of the Company or body corporate in which the Company is in any way interested;

 

(e)           where a Director is given a guarantee, or is to be given a guarantee, in respect of an obligation incurred by or on behalf of the Company or any body corporate in which the Company is in any way interested;

 

(f)            where a Director (or a person connected with him or of which he is a member or employee) acts (or any body corporate promoted by the Company or in which the Company is in any way interested of which he is a director, employee or other officer may act) in a professional capacity for the Company or any body corporate promoted by the Company or in which the Company is in any way interested (other than as auditor) whether or not he or it is remunerated for this;

 

(g)           an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; or

 

(h)           any other interest authorised by ordinary resolution.

 

Interests of an Investor Director

 

32.2        In addition to the provisions of Article 32.1, subject to the provisions of the Act and provided (if these Articles so require) that he has declared to the Directors in accordance with the provisions of these Articles, the nature and extent of his interest, where a Director is an Investor Director he may (save as to the extent not permitted by law from time to time), notwithstanding his office, have an interest arising from any duty he may owe to, or interest he may have as an employee, director, trustee, member, partner, officer or representative of, or a consultant to, or direct or indirect investor (including without limitation by virtue of a carried interest, remuneration or incentive arrangements or the holding of securities) in:

 

(a)           an Investor;

 

(b)           a Fund Manager which advises or manages an Investor;

 

(c)           any of the funds advised or managed by a Fund Manager who advises or manages an Investor from time to time; or

 

(d)           another body corporate or firm in which a Fund Manager who advises or manages an Investor or any fund advised or managed by such Fund Manager has directly or indirectly invested, including without limitation any portfolio companies.

 

Interests of which a Director is not aware

 

32.3        For the purposes of this Article 32, an interest of which a Director is not aware and of which it is unreasonable to expect him to be aware shall not be treated as an interest of his.

 

Accountability of any benefit and validity of a contract

 

32.4        In any situation permitted by this Article 32 (save as otherwise agreed by him) a Director shall not by reason of his office be accountable to the Company for any benefit which he derives from that situation and no such contract, arrangement or transaction shall be avoided on the grounds of any such interest or benefit.

 

 

Terms and conditions of Board authorisation

 

32.5        Subject to Article 32.6, any authority given in accordance with section 175(5)(a) of the Act in respect of a Director ("Interested Director") who has proposed that the Directors authorise his interest ("Relevant Interest") pursuant to that section may, for the avoidance of doubt:

 

(a)           be given on such terms and subject to such conditions or limitations as may be imposed by the authorising Directors as they see fit from time to time, including, without limitation:

 

(i)            restricting the Interested Director from voting on any resolution put to a meeting of the Directors or of a committee of the Directors in relation to the Relevant Interest;

 

(ii)           restricting the Interested Director from being counted in the quorum at a meeting of the Directors or of a committee of the Directors where such Relevant Interest is to be discussed; or

 

(iii)          restricting the application of the provisions in Articles 32.7 and 32.8, so far as is permitted by law, in respect of such Interested Director;

 

(b)           be withdrawn, or varied at any time by the Directors entitled to authorise the Relevant Interest as they see fit from time to time; and

 

(c)           subject to Article 32.6, an Interested Director must act in accordance with any such terms, conditions or limitations imposed by the authorising Directors pursuant to section 175(5)(a) of the Act and this Article 32.

 

Terms and conditions of Board authorisation for an Investor Director

 

32.6        Notwithstanding the other provisions of this Article 32, it shall not (save with the consent in writing of the relevant Investor Director) be made a condition of any authorisation of a matter in relation to that Investor Director in accordance with section 175(5)(a) of the Act, that he shall be restricted from voting or counting in the quorum at any meeting of, or of any committee of the Directors or that he shall be required to disclose, use or apply confidential information as contemplated in Article 32.8.

 

Director's duty of confidentiality to a person other than the Company

 

32.7        Subject to Article 32.8 (and without prejudice to any equitable principle or rule of law which may excuse or release the Director from disclosing information, in circumstances where disclosure may otherwise be required under this Article 32), if a Director, otherwise than by virtue of his position as director, receives information in respect of which he owes a duty of confidentiality to a person other than the Company, he shall not be required:

 

(a)           to disclose such information to the Company or to any Director, or to any officer or employee of the Company; or

 

(b)           otherwise to use or apply such confidential information for the purpose of or in connection with the performance of his duties as a Director.

 

32.8        Where such duty of confidentiality arises out of a situation in which a Director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company, Article 32.7 shall apply only if the conflict arises out of a matter which falls within Article 32.1 or Article 32.2 or has been authorised under section 175(5)(a) of the Act.

 

 

Additional steps to be taken by a Director to manage a conflict of interest

 

32.9        Where a Director has an interest which can reasonably be regarded as likely to give rise to a conflict of interest, the Director shall take such additional steps as may be necessary or desirable for the purpose of managing such conflict of interest, including compliance with any procedures laid down from time to time by the Directors for the purpose of managing conflicts of interest generally and/or any specific procedures approved by the Directors for the purpose of or in connection with the situation or matter in question, including without limitation:

 

(a)           absenting himself from any discussions, whether in meetings of the Directors or otherwise, at which the relevant situation or matter falls to be considered; and

 

(b)           excluding himself from documents or information made available to the Directors generally in relation to such situation or matter and/or arranging for such documents or information to be reviewed by a professional adviser to ascertain the extent to which it might be appropriate for him to have access to such documents or information.

 

Requirement of a Director is to declare an interest

 

32.10     Subject to section 182 of the Act, a Director shall declare the nature and extent of any interest permitted by Article 32.1 or Article 32.2 at a meeting of the Directors, or by general notice in accordance with section 184 (notice in writing) or section 185 (general notice) of the Act or in such other manner as the Directors may determine, except that no declaration of interest shall be required by a Director in relation to an interest:

 

(a)           falling under Article 32.1(g);

 

(b)           if, or to the extent that, the other Directors are already aware of such interest (and for this purpose the other Directors are treated as aware of anything of which they ought reasonably to be aware); or

 

(c)           if, or to the extent that, it concerns the terms of his service contract (as defined by section 227 of the Act) that have been or are to be considered by a meeting of the Directors, or by a committee of Directors appointed for the purpose under these Articles.

 

Shareholder approval

 

32.11     Subject to section 239 of the Act, the Company may by ordinary resolution ratify any contract, transaction or arrangement, or other proposal, not properly authorised by reason of a contravention of any provisions of this Article 32.

 

32.12     For the purposes of this Article 32:

 

(a)           a conflict of interest includes a conflict of interest and duty and a conflict of duties;

 

(b)           the provisions of section 252 of the Act shall determine whether a person is connected with a Director; and

 

(c)           a general notice to the Directors that a Director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the Director has an interest in any such transaction of the nature and extent so specified.

 

 

33.

Notices

 

33.1        Subject to the requirements set out in the Act, any notice given or document sent or supplied to or by any person under these Articles, or otherwise sent by the Company under the Act, may be given, sent or supplied:

 

(a)           in hard copy form; or

 

(b)           in electronic form,

 

or partly by one of these means and partly by another of these means, save that any notice or document which is to be given, sent or supplied to Gilead Sciences, Inc., must be given, sent or supplied in hard copy form.

 

Notices shall be given and documents supplied in accordance with the procedures set out in the Act, except to the extent that a contrary provision is set out in this Article 33.

 

Notices in hard copy form

 

33.2        Any notice or other document in hard copy form given or supplied under these Articles may be delivered or sent by first class post (airmail if overseas):

 

(a)           to the Company or any other company at its registered office; or

 

(b)           to the address notified to or by the Company for that purpose; or

 

(c)           in the case of an intended recipient who is a member or his legal personal representative or trustee in bankruptcy, to such member's address as shown in the Company's register of members; or

 

(d)           in the case of an intended recipient who is a Director or alternate, to his address as shown in the register of Directors; or

 

(e)           to any other address to which any provision of the Companies Acts (as defined in the Act) authorises the document or information to be sent or supplied; or

 

(f)            where the Company is the sender, if the Company is unable to obtain an address falling within one of the addresses referred to in (a) to (e) above, to the intended recipient's last address known to the Company.

 

33.3        Any notice or other document in hard copy form given or supplied under these Articles shall be deemed to have been served and be effective:

 

(a)           if delivered, at the time of delivery;

 

(b)           if posted, on receipt or 48 hours after the time it was posted, whichever occurs first.

 

Notices in electronic form

 

33.4        Subject to the provisions of the Act, any notice or other document in electronic form given or supplied under these Articles may:

 

(a)           if sent by fax or email (provided that a fax number or an address for email has been notified to or by the Company for that purpose), be sent by the relevant form of communication to that address;

 

(b)           if delivered or sent by first class post (airmail if overseas) in an electronic form (such as sending a disk by post), be so delivered or sent as if in hard copy form under Article 33.2; or

 

 

(c)           be sent by such other electronic means (as defined in section 1168 of the Act) and to such address(es) as the Company may specify:

 

(i)            on its website from time to time; or

 

(ii)           by notice (in hard copy or electronic form) to all members of the Company from time to time.

 

33.5        Any notice or other document in electronic form given or supplied under these Articles shall be deemed to have been served and be effective:

 

(a)           if sent by fax or email (where a fax number or an address for email has been notified to or by the Company for that purpose), on receipt or 48 hours after the time it was sent, whichever occurs first;

 

(b)           if posted in an electronic form, on receipt or 48 hours after the time it was posted, whichever occurs first;

 

(c)           if delivered in an electronic form, at the time of delivery; and

 

(d)           if sent by any other electronic means as referred to in Article 33.4(c), at the time such delivery is deemed to occur under the Act.

 

33.6        Where the Company is able to show that any notice or other document given or sent under these Articles by electronic means was properly addressed with the electronic address supplied by the intended recipient, the giving or sending of that notice or other document shall be effective notwithstanding any receipt by the Company at any time of notice either that such method of communication has failed or of the intended recipient's non-receipt.

 

General

 

33.7        In the case of joint holders of a share all notices shall be given to the joint holder whose name stands first in the register of members of the Company in respect of the joint holding (the "Primary Holder"). Notice so given shall constitute notice to all the joint holders.

 

33.8        Anything agreed or specified by the Primary Holder in relation to the service, sending or supply of notices, documents or other information shall be treated as the agreement or specification of all the joint holders in their capacity as such (whether for the purposes of the Act or otherwise).

 

34.

Indemnities and insurance

 

34.1        Subject to the provisions of and so far as may be permitted by, the Act:

 

(a)           every Director or other officer of the Company (excluding the Company's auditors) shall be entitled to be indemnified by the Company (and the Company shall also be able to indemnify directors of any associated company (as defined in section 256 of the Act)) out of the Company's assets against all liabilities incurred by him in the actual or purported execution or discharge of his duties or the exercise or purported exercise of his powers or otherwise in relation to or in connection with his duties, powers or office, provided that no Director or any associated company is indemnified by the Company against:

 

(i)            any liability incurred by the director to the Company or any associated company; or

 

(ii)           any liability incurred by the director to pay a fine imposed in criminal proceedings or a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirements of a regulatory nature; or

 

 

(iii)          any liability incurred by the director:

 

(A)          in defending any criminal proceedings in which he is convicted;

 

(B)          in defending civil proceedings brought by the Company or any associated company in which final judgment (within the meaning set out in section 234 of the Act) is given against him; or

 

(C)          in connection with any application under sections 661(3) or 661(4) or 1157 of the Act (as the case may be) for which the court refuses to grant him relief,

 

save that, in respect of a provision indemnifying a director of a company (whether or not the Company) that is a trustee of an occupational pension scheme (as that term is used in section 235 of the Act) against liability incurred in connection with that company's activities as trustee of the scheme, the Company shall also be able to indemnify any such director without the restrictions in Articles 34.1(a)(i), 34.1(a)(iii)(B) and 33.1(a)(C) applying; and

 

(b)           the Directors may exercise all the powers of the Company to purchase and maintain insurance for any such Director or other officer against any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the Company, or any associated company including (if he is a director of a company which is a trustee of an occupational pension scheme) in connection with that company's activities as trustee of an occupational pension scheme.

 

34.2        The Company shall (at the cost of the Company) effect and maintain for each Director policies of insurance insuring each Director against risks in relation to his office as each director may reasonably specify including without limitation, any liability which by virtue of any rule of law may attach to him in respect of any negligence, default of duty or breach of trust of which he may be guilty in relation to the Company.

 

35.

Data Protection

 

The Company may process the following categories of personal data in respect of the Shareholders and the Directors: (i) identifying information, such as names, addresses and contact details; (ii) details of participation in the Company’s affairs, including without limitation attendance at and contribution to Company meetings and voting records; (iii) in the case of Shareholders, details of their respective shareholdings in the Company; and (iv) any other information which is required to be recorded by law or may have a bearing on the prudence or commercial merits of investing, or disposing of any shares (or other investment or security), in the Company (together, "Personal Data"). The Company will only use the Personal Data where it has a valid legal basis to do so. The Company has a legitimate interest in processing Personal Data where it is necessary for the purposes of the proper administration of the Company and its affairs, the undertaking of due diligence exercises and compliance with applicable laws, regulations and procedures. The Company will use appropriate technical and organisational measures to safeguard Personal Data. The Company will retain Personal Data for no longer than is reasonably required. The Company may disclose Personal Data to: (i) other Shareholders and Directors (each a "Recipient"); (ii) a Member of the same Group or Member of the same Fund Group as a Recipient ("Recipient Group Companies"); (iii) employees, directors and professional advisers of that Recipient or the Recipient Group Companies; (iv) funds managed by any of the Recipient Group Companies; and (v) current or potential investors in the Company or purchasers of any Equity Shares, provided always that the Company takes reasonable steps to ensure that Personal Data is treated in accordance with relevant data protection laws. The Personal Data will only be processed and stored within the European Economic Area, except to the extent permitted by applicable law.

 

 

36.

Secretary

 

Subject to the provisions of the Act, the Directors may appoint a secretary for such term, at such remuneration and upon such conditions as they may think fit; and any secretary so appointed may be removed by them.

 

37.

Lien

 

37.1

The Company shall have a first and paramount lien (the "Company's Lien") over every Share (not being a fully paid share) for all moneys (whether presently payable or not) payable at a fixed time or called in respect of that Share.

 

37.2        The Company's Lien over a Share:

 

(a)           shall take priority over any third party's interest in that Share; and

 

(b)           extends to any dividend or other money payable by the Company in respect of that Share and (if the lien is enforced and the Share is sold by the Company) the proceeds of sale of that Share.

 

The Directors may at any time decide that a Share which is, or would otherwise be, subject to the Company's Lien shall not be subject to it, either wholly or in part.

 

37.3

Subject to the provisions of this Article 37, if:

 

(a)           a notice complying with Article 37.4 (a "Lien Enforcement Notice") has been given by the Company in respect of a Share; and

 

(b)           the person to whom the notice was given has failed to comply with it,

 

the Company shall be entitled to sell that Share in such manner as the Directors decide.

 

37.4        A Lien Enforcement Notice:

 

(a)           may only be given by the Company in respect of a Share which is subject to the Company's Lien, in respect of which a sum is payable and the due date for payment of that sum has passed;

 

(b)           must specify the Share concerned;

 

must require payment of the sum payable within 14 days of the notice;

 

(c)           must be addressed either to the holder of the Share or to a person entitled to it by reason of the holder's death, bankruptcy or otherwise; and

 

(d)           must state the Company's intention to sell the Share if the notice is not complied with.

 

37.5        Where any Share is sold pursuant to this Article 37:

 

(a)           the Directors may authorise any person to execute an instrument of transfer of the Share to the purchaser or a person nominated by the purchaser; and

 

(b)           the transferee shall not be bound to see to the application of the consideration, and the transferee's title shall not be affected by any irregularity in or invalidity of the process leading to the sale.

 

 

37.6        The net proceeds of any such sale (after payment of the costs of sale and any other costs of enforcing the lien) must be applied:

 

(a)           first, in payment of so much of the sum for which the lien exists as was payable at the date of the Lien Enforcement Notice; and

 

(b)           secondly, to the person entitled to the Share at the date of the sale, but only after the certificate for the Share sold has been surrendered to the Company for cancellation or an indemnity for lost certificate in a form acceptable to the Board has been given for any lost certificate, and subject to a lien equivalent to the Company's Lien for any money payable (whether or not it is presently payable) as existing upon the Share before the sale in respect of all Shares registered in the name of that person (whether as the sole registered holder or as one of several joint holders) after the date of the Lien Enforcement Notice.

 

37.7        A statutory declaration by a Director or the company secretary that the declarant is a Director or the company secretary and that a Share has been sold to satisfy the Company's Lien on a specified date:

 

(a)           shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share; and

 

(b)           subject to compliance with any other formalities of transfer required by these Articles or by law, shall constitute a good title to the Share.

 

38.

Call Notices

 

38.1        Subject to these Articles and the terms on which Shares are allotted, the Directors may send a notice (a "Call Notice") to a Shareholder who has not fully paid for that Shareholder's Share(s) requiring the Shareholder to pay the Company a specified sum of money (a "call") which is payable to the Company by that Shareholder when the Directors decide to send the Call Notice.

 

38.2        A Call Notice:

 

(a)           may not require a Shareholder to pay a call which exceeds the total sum unpaid on that Shareholder's Shares (whether as to the Share's nominal value or any sum payable to the Company by way of premium);

 

(b)           shall state when and how any call to which it relates it is to be paid; and

 

(c)           may permit or require the call to be paid by instalments.

 

38.3        A Shareholder shall comply with the requirements of a Call Notice, but no Shareholder shall be obliged to pay any call before 14 days have passed since the notice was sent.

 

38.4        Before the Company has received any call due under a Call Notice the Directors may:

 

(a)           revoke it wholly or in part; or

 

(b)           specify a later time for payment than is specified in the Call Notice, by a further notice in writing to the Shareholder in respect of whose Shares the call is made.

 

38.5        liability to pay a call shall not be extinguished or transferred by transferring the Shares in respect of which it is required to be paid. Joint holders of a Share shall be jointly and severally liable to pay all calls in respect of that Share.

 

38.6        Subject to the terms on which Shares are allotted, the Directors may, when issuing Shares, provide that Call Notices sent to the holders of those Shares may require them to:

 

(a)           pay calls which are not the same; or

 

(b)           pay calls at different times.

 

 

38.7        A Call Notice need not be issued in respect of sums which are specified, in the terms on which a Share is issued, as being payable to the Company in respect of that Share (whether in respect of nominal value or premium):

 

(a)           on allotment;

 

(b)           on the occurrence of a particular event; or

 

(c)           on a date fixed by or in accordance with the terms of issue.

 

38.8        If the due date for payment of such a sum as referred to in Article 38.7 has passed and it has not been paid, the holder of the Share concerned shall be treated in all respects as having failed to comply with a Call Notice in respect of that sum, and shall be liable to the same consequences as regards the payment of interest and forfeiture.

 

38.9        If a person is liable to pay a call and fails to do so by the Call Payment Date (as defined below):

 

(a)           the Directors may issue a notice of intended forfeiture to that person; and

 

(b)           until the call is paid, that person shall be required to pay the Company interest on the call from the Call Payment Date at the Relevant Rate (as defined below).

 

38.10     For the purposes of Article 38.9:

 

(a)           the "Call Payment Date" shall be the time when the call notice states that a call is payable, unless the Directors give a notice specifying a later date, in which case the "Call Payment Date" is that later date; and

 

(b)           the "Relevant Rate" shall be:

 

(i)            the rate fixed by the terms on which the Share in respect of which the call is due was allotted;

 

(ii)           such other rate as was fixed in the Call Notice which required payment of the call, or has otherwise been determined by the Directors; or

 

(iii)          if no rate is fixed in either of these ways, five per cent. a year,

 

provided that the Relevant Rate shall not exceed by more than five percentage points the base lending rate most recently set by the Monetary Policy Committee of the Bank of England in connection with its responsibilities under Part 2 of the Bank of England Act 1998(a).

 

38.11     The Directors may waive any obligation to pay interest on a call wholly or in part.

 

38.12     The Directors may accept full payment of any unpaid sum in respect of a Share despite payment not being called under a Call Notice.

 

39.

Forfeiture of Shares

 

39.1        A notice of intended forfeiture:

 

(a)           may be sent in respect of any Share for which there is an unpaid sum in respect of which a call has not been paid as required by a Call Notice;

 

(b)           shall be sent to the holder of that Share or to a person entitled to it by reason of the holder's death, bankruptcy or otherwise;

 

 

(c)           shall require payment of the call and any accrued interest and all expenses that may have been incurred by the Company by reason of such non-payment by a date which is not fewer than 14 days after the date of the notice;

 

(d)           shall state how the payment is to be made; and

 

(e)           shall state that if the notice is not complied with, the Shares in respect of which the call is payable will be liable to be forfeited.

 

39.2        If a notice of intended forfeiture is not complied with before the date by which payment of the call is required in the notice of intended forfeiture, then the Directors may decide that any Share in respect of which it was given is forfeited, and the forfeiture is to include all dividends or other moneys payable in respect of the forfeited Shares and not paid before the forfeiture

 

39.3        Subject to these Articles, the forfeiture of a Share extinguishes:

 

(a)           all interests in that Share, and all claims and demands against the Company in respect of it; and

 

(b)           all other rights and liabilities incidental to the Share as between the person whose Share it was prior to the forfeiture and the Company.

 

39.4        Any Share which is forfeited in accordance with these Articles:

 

(a)           shall be deemed to have been forfeited when the Directors decide that it is forfeited;

 

(b)           shall be deemed to be the property of the Company; and

 

(c)           may be sold, re-allotted or otherwise disposed of as the Directors think fit.

 

39.5        If a person's Shares have been forfeited then:

 

(a)           the Company shall send that person notice that forfeiture has occurred and record it in the register of members;

 

(b)           that person shall cease to be a Shareholder in respect of those Shares;

 

(c)           that person shall surrender the certificate for the Shares forfeited to the Company for cancellation;

 

(d)           that person shall remain liable to the Company for all sums payable by that person under the Articles at the date of forfeiture in respect of those Shares, including any interest (whether accrued before or after the date of forfeiture); and

 

(e)           the Directors shall be entitled to waive payment of such sums wholly or in part or enforce payment without any allowance for the value of the Shares at the time of forfeiture or for any consideration received on their disposal.

 

39.6        At any time before the Company disposes of a forfeited Share, the Directors shall be entitled to decide to cancel the forfeiture on payment of all calls and interest and expenses due in respect of it and on such other terms as they think fit.

 

39.7        If a forfeited Share is to be disposed of by being transferred, the Company shall be entitled to receive the consideration for the transfer and the Directors shall be entitled to authorise any person to execute the instrument of transfer.

 

 

39.8        A statutory declaration by a Director or the company secretary that the declarant is a Director or the company secretary and that a Share has been forfeited on a specified date:

 

(a)           shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the Share; and

 

(b)           subject to compliance with any other formalities of transfer required by the Articles or by law, constitutes a good title to the Share.

 

39.9        A person to whom a forfeited Share is transferred shall not be bound to see to the application of the consideration (if any) nor shall that person's title to the Share be affected by any irregularity in or invalidity of the process leading to the forfeiture or transfer of the Share.

 

39.10     If the Company sells a forfeited Share, the person who held it prior to its forfeiture shall be entitled to receive the proceeds of such sale from the Company, net of any commission, and excluding any sum which:

 

(a)           was, or would have become, payable; and

 

(b)           had not, when that Share was forfeited, been paid by that person in respect of that Share,

 

but no interest shall be payable to such a person in respect of such proceeds and the Company shall not be required to account for any money earned on such proceeds.

 

40.

Surrender of Shares

 

40.1        A Shareholder shall be entitled to surrender any Share:

 

(a)           in respect of which the Directors issue a notice of intended forfeiture;

 

(b)           which the Directors forfeit; or

 

(c)           which has been forfeited.

 

The Directors shall be entitled to accept the surrender of any such Share.

 

40.2        The effect of surrender on a Share shall be the same as the effect of forfeiture on that Share.

 

40.3        The Company shall be entitled to deal with a Share which has been surrendered in the same way as a Share which has been forfeited.

 

41.

Authority to capitalise and appropriation of capitalised sums

 

41.1        The Board may, if authorised to do so by an ordinary resolution (with Investor Majority Consent):

 

(a)           decide to capitalise any profits of the Company (whether or not they are available for distribution) which are not required for paying a preferential dividend, or any sum standing to the credit of the Company's share premium account or capital redemption reserve; and

 

(b)           appropriate any sum which they so decide to capitalise (a "Capitalised Sum") to such Shareholders and in such proportions as the Board may in their absolute discretion deem appropriate (the "Shareholders Entitled").

 

Article 78 of the Model Articles shall not apply to the Company.

 

41.2        Capitalised Sums may be applied on behalf of such Shareholders and in such proportions as the Board may (in its absolute discretion) deem appropriate.

 

 

41.3        Any Capitalised Sum may be applied in paying up new Shares up to the nominal amount (or such amount as is unpaid) equal to the Capitalised Sum, which are then allotted credited as fully paid to the Shareholders Entitled or as they may direct.

 

41.4        A Capitalised Sum which was appropriated from profits available for distribution may be applied in paying up new debentures of the Company which are allotted credited as fully paid to the Shareholders Entitled or as they may direct.

 

41.5        Subject to the Articles the Board may:

 

(a)           apply Capitalised Sums in accordance with Articles 41.3 and 41.4 partly in one way and partly another;

 

(b)           make such arrangements as they think fit to deal with Shares or debentures becoming distributable in fractions under this Article 41; and

 

(c)           authorise any person to enter into an agreement with the Company on behalf of all of the Shareholders Entitled which is binding on them in respect of the allotment of Shares or debentures under this Article 41.

 

42.

Lock-Up

 

42.1        Other than the sale of any Shares to an underwriter pursuant to an underwriting agreement, no Shareholder shall, without the prior written consent of the Company’s underwriters, during the period commencing on the date of the final offering document relating to an IPO and ending on the date specified by the Board (not to exceed 180 days):

 

(a)           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 held immediately prior to the effectiveness of the registration statement for the IPO; or

 

(b)           enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares,

 

(c)           whether or not any such transaction is to be settled by delivery of Shares or other securities, in cash or otherwise.

 

42.2        In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Shares (and transferees and assignees thereof) until the end of such restricted period.

 

42.3        Each Shareholder shall enter into a separate lock-up agreement in respect of the IPO if and to the extent required by the Company’s underwriters in order to facilitate the IPO, on terms consistent with the foregoing and which shall supersede the terms in Article 42.1. If any Shareholder fails to comply with the provisions of this Article, the Company shall be constituted the agent of each defaulting Shareholder for taking such actions as are necessary to effect the lock-up and the Directors may authorise an officer or member to execute and deliver on behalf of such defaulting Shareholder the necessary documents to effect the lock-up, including, without limitation, a lock-up agreement, in a form approved by the Board.

 

43.

Listing

 

43.1        In the event the Board (with Investor Majority Consent) has resolved to pursue an IPO, each Shareholder shall take all steps necessary or desirable to implement such IPO on such terms as are approved by the Board, including (without limitation):

 

(a)           consenting to, voting for, raising no objections to and waiving any applicable rights as are necessary or desirable (in the opinion of the Board) to:

 

 

(i)            give effect to a Holding Company Reorganisation in accordance with Article 23;

 

(ii)           undertake a capital reduction of the Company (or any Holding Company) which is necessary or desirable as part of the Holding Company Reorganisation, the re-registration as a public listed company referred to in Article 43.1(a)(iii) below or as otherwise approved by the Board, provided that such capital reduction applies proportionately to all Shares (or shares in such Holding Company);

 

(iii)          re-register the Company (or any Holding Company) as a public listed company (if applicable);

 

(iv)          undertake any: (A) consolidation; (B) consolidation and sub-division; (C) sub-division; and/or (D) redesignation of any or all of the share capital of the Company (or any Holding Company);

 

(v)           adopt with effect from the Admission Date new articles of association of the Company (or any Holding Company), depending on which entity is the subject of the IPO in a form appropriate for a listed public company (in each case in such form as determined by the Board; and

 

(vi)          make all applications needed to a relevant investment exchange to apply for the listing or registration of any shares in the Company (or any Holding Company); and

 

(vii)         giving effect to any general meeting (including any annual general meeting) of the Company (or any Holding Company) to be held in connection with the Holding Company Reorganisation and/or the IPO being held on short notice provided that each Investor has been given at least five (5) Business Days’ notice of the meeting or attends in person or proxy; and

 

(b)           the entry into an underwriting agreement by the Company, any Shareholder who is selling in the IPO and the underwriters on terms approved by the Board and any such Shareholder, it being agreed that no Shareholder shall be required to sell any securities in an IPO unless it wishes to do so.

 

43.2        The Board shall not require any Investor (and no Investor shall be required) to take any action pursuant to this Article 43 which would:

 

(a)           have an adverse effect on any Investor’s rights save where each other Investor suffers the same or substantially the same adverse effect;

 

(b)           have a positive effect on any Investor’s rights which is not also experienced by the other Investors; or

 

(c)           cause an Investor to be in violation of any applicable laws or regulations.

 

44.

Put Option

 

In the event that it is determined by the Future Fund (in its absolute discretion) that it would be prejudicial to the reputation of the Future Fund and/or the UK Government to continue holding any shares in the capital of the Company, the Future Fund shall have the option to require the Company to purchase all of the shares in the capital of the Company held by the Future Fund (subject to and in accordance with the Act), for an aggregate price of £1.00 at any time (the “Put Option”), provided that: (i) the Put Option shall be exercisable by notice in writing from the Future Fund to the Company, such notice being revocable only with the consent of the Board (acting in its absolute discretion) (the “Put Option Notice”); (ii) the terms of the completion of the Put Option have been authorised by a resolution of the Company; and (iii) completion of the Put Option shall take place as soon as reasonably practicable and in any event no later than 20 Business Days following the Company’s receipt of the Put Option Notice; and (iv) each of the Shareholders and the Company shall execute, and the Company shall procure so far as it lies within its power to do so the execution of, all such documents and deeds and do all such acts and things as may be reasonably required from time to time to implement the Put Option and transfer the legal and beneficial ownership of the relevant shares being sold to the Company under this Article 44, including waiving any pre-emption rights relating to such transfer.

 

 

 

Exhibit 3.2

 

THE COMPANIES ACT 2006

 

PUBLIC COMPANY LIMITED BY SHARES

 

 

 

 

 

 

 

ARTICLES OF ASSOCIATION

 

of

 

VACCITECH PLC

 

(REGISTERED NUMBER: 13282620)

 

(Adopted by a special resolution passed on                      2021)

 

 

 

 

TABLE OF CONTENTS

 

1.	Applicability of the Model Articles	1
2.	Definitions and Interpretation	1
3.	Form of Resolution	4
4.	Capital	4
5.	Limited Liability	4
6.	Change of Name	4
7.	Power to Attach Rights to Shares	4
8.	Allotment of Shares and Pre-Emption	4
9.	Redeemable Shares	5
10.	Shareholder Rights	6
11.	Pari Passu Issues	7
12.	Variation of Rights	8
13.	Payment of Commission	8
14.	Trusts Not Recognised	8
15.	Uncertificated Shares	8
16.	Share Certificates	10
17.	Replacement Certificates	10
18.	Lien on Shares not Fully Paid	11
19.	Enforcement of Lien by Sale	11
20.	Application of Proceeds of Sale	11
21.	Calls	12
22.	Liability of Joint Holders	12
23.	Interest on Calls	12
24.	Power to Differentiate	12
25.	Payment of Calls in Advance	12
26.	Notice if Call or Instalment Not Paid	13
27.	Forfeiture for Non-Compliance	13
28.	Notice After Forfeiture	13
29.	Forfeiture May Be Annulled	13
30.	Surrender	13
31.	Sale of Forfeited Shares	13
32.	Effect of Forfeiture	14
33.	Evidence of Forfeiture	14
34.	Form of Transfer	14

 

 

 

 

35.	Right to Refuse Registration of Transfer	14
36.	Notice of Refusal to Register a Transfer	15
37.	No Fees on Registration	15
38.	Other Powers in Relation to Transfers	15
39.	Transmission of Shares on Death	16
40.	Election of Person Entitled By Transmission	16
41.	Rights on Transmission	16
42.	Destruction of Documents	16
43.	Sub-Division	18
44.	Fractions	18
45.	Annual General Meetings	18
46.	Convening of General Meetings	18
47.	Notice of General Meetings	18
48.	Contents of Notice of Meetings	18
49.	Omission to Give Notice and Non-Receipt of Notice	19
50.	Postponement of General Meeting	19
51.	Quorum at General Meeting	20
52.	Procedure if Quorum Not Present	20
53.	Chairman of General Meeting	20
54.	Entitlement to Attend and Speak	21
55.	Adjournments	21
56.	Notice of Adjournment	21
57.	Business of Adjourned Meeting	21
58.	Security Arrangements and Orderly Conduct	21
59.	Other Arrangements for Viewing and Hearing Proceedings at Physical General Meetings	22
60.	Satellite Meeting Places	22
61.	Electronic General Meetings	23
62.	Meaning of Participate	24
63.	Amendment to Resolutions	24
64.	Members' Resolutions	25
65.	Method of Voting	25
66.	Objection to Error in Voting	25
67.	Procedure on a Poll	26
68.	Votes of Members	26
69.	No Right to Vote Where Sums Overdue on Shares	27

 

 

 

 

 

70.	Voting by Proxy	27
71.	Receipt of Proxy	28
72.	Revocation of Proxy	30
73.	Corporate Representatives	30
74.	Failure to Disclose Interests in Shares	31
75.	Power of Sale of Shares of Untraced Members	32
76.	Application of Proceeds of Sale of Shares of Untraced Members	34
77.	Number of Directors	34
78.	Power of Company to Appoint Directors	34
79.	Power of Board to Appoint Directors	34
80.	Eligibility of New Directors	34
81.	Classes and Retirement of Directors	35
82.	Deemed Re-Appointment	35
83.	Procedure if Insufficient Directors Appointed	36
84.	Removal of Directors	36
85.	Vacation of Office by Director	36
86.	Resolution as to Vacancy Conclusive	37
87.	Appointment of Alternate Directors	37
88.	Alternate Directors' Participation in Board Meetings	37
89.	Alternate Directors Responsible for Own Acts	38
90.	Interests of Alternate Director	38
91.	Revocation of Alternate Director	38
92.	Arrangements with Non-Executive Directors	38
93.	Expenses	39
94.	Additional Remuneration	39
95.	Remuneration of Executive Directors	39
96.	Pensions and Other Benefits	39
97.	Powers of the Board	40
98.	Powers of Directors if Less Than Minimum Number	40
99.	Powers of Executive Directors	40
100.	Delegation to Committees	40
101.	Local Management	41
102.	Board Meetings	41
103.	Notice of Board Meetings	41
104.	Quorum	41
105.	Chairman	42

 

 

 

 

 

106.	Voting	42
107.	Participation by Telephone or Other Form of Communication	42
108.	Resolution in Writing	42
109.	Proceedings of Committees	43
110.	Minutes of Proceedings	43
111.	Validity of Proceedings	43
112.	Transactions or Other Arrangements With the Company	43
113.	Authorisation of Directors' Conflicts of Interest	44
114.	Directors' Permitted Interests	45
115.	General	47
116.	Power of Attorney	47
117.	Exercise of Voting Power	47
118.	Provision for Employees on Cessation of Business	47
119.	Overseas Registers	48
120.	Borrowing Powers	48
121.	Power to Authenticate Documents	48
122.	Use of Seals	48
123.	Declaration of Dividends	49
124.	Interim Dividends	49
125.	Calculation and Currency of Dividends	49
126.	Amounts Due on Shares can be Deducted from Dividends	49
127.	Dividends Not in Cash	50
128.	No Interest on Dividends	50
129.	Method of Payment	50
130.	Uncashed Dividends	51
131.	Unclaimed Dividends	51
132.	Scrip Dividends	51
133.	Capitalisation of Reserves	53
134.	Record Dates	54
135.	Inspection of Records	55
136.	Accounts to be Sent to Members	55
137.	Service of Notices	55
138.	Notice on Person Entitled By Transmission	57
139.	Record Date for Service	57
140.	Evidence of Service	57
141.	Notice When Post not Available	58

 

 

 

 

142.	Winding Up	58
143.	Indemnity and Insurance	58
144.	Exclusive Jurisdiction	59

 

 

 

 

Company number: 13282620

 

THE COMPANIES ACT 2006

 

PUBLIC COMPANY LIMITED BY SHARES

 

NEW

 

ARTICLES OF ASSOCIATION

 

of

 

VACCITECH PLC

 

(the "Company")

 

(Adopted by a special resolution passed on________________ 2021)

 

1.

Applicability of the Model Articles

 

1.1

No regulations or articles set out in any statute, or in any statutory instrument or other subordinate legislation made under any statute, concerning companies (including the regulations in the Companies (Model Articles) Regulations 2008 (SI 2008/3229)) shall apply as the articles of the Company. The following shall be the articles of association of the Company.

 

2.

Definitions and Interpretation

 

2.1

In these Articles, unless the context requires otherwise, the following words and expressions shall have the meanings set out below:

 

"Act" means the Companies Act 2006

 

"address" includes any number or address used for the purposes of sending or receiving documents or information by electronic means

 

"Articles" means these articles of association as altered from time to time and Article shall be construed accordingly

 

"Board" means the board of Directors for the time being of the Company or the Directors present or deemed to be present at a duly convened quorate meeting of the Directors

 

"certificated shares" a share which is not an uncertificated share and references in these Articles to a share being held in certificated form shall be construed accordingly

 

"clear days" in relation to a period of notice means that period excluding the day when the notice is served or deemed to be served and the day for which it is given or on which it is to take effect

 

"Companies Acts" means the Act, the Companies Act 1985 and, where the context requires, every other statute from time to time in force concerning companies and affecting the Company

 

"Deferred Shares" has the meaning given to it in Article 4

 

"Director" means a director for the time being of the Company

 

 

"FSMA" means the Financial Services and Markets Act 2000

 

"electronic form" has the meaning given to it in section 1168 of the Act

 

"electronic means" has the meaning given to it in section 1168 of the Act

 

"Exchange Act" means the U.S. Securities Exchange Act of 1934

 

"Listing" means the listing of the Company's Ordinary Shares (in the form of American depositary shares) on Nasdaq

 

"member" means a member of the Company, or where the context requires, a member of the Board or of any committee

 

"Nasdaq" means The Nasdaq Stock Market LLC

 

"Nasdaq Rules" means the rules of Nasdaq

 

"Office" means the registered office from time to time of the Company

 

"Operator" means Euroclear UK and Ireland Limited or such other person as may for the time being be approved by HM Treasury as Operator under the uncertificated securities rules

 

"Ordinary Shares" has the meaning given to it in Article 4

 

"paid up" means paid up or credited as paid up

 

"participating class" means a class of shares title to which is permitted by the Operator to be transferred by means of a relevant system

 

"present" means, for the purpose of physical general meetings, present in person or, for the purposes of electronic general meetings, present by electronic means

 

"Register" means the register of members of the Company to be maintained under the Act or as the case may be any overseas branch register maintained under Article 119

 

"relevant system" means a computer-based system which allows units of securities without written instruments to be transferred and endorsed pursuant to the uncertificated securities rules

 

"Seal" means the common seal of the Company or, where the context allows, any official seal kept by the Company under section 50 of the Act

 

"Secretary" means the secretary of the Company for the time being

 

"Securities Act" means the U.S. Securities Act of 1933

 

"Share Warrant" means a warrant to bearer issued by the Company in respect of its shares

 

 

 

 

"uncertificated securities rules" means any provision of the Companies Acts relating to the holding, evidencing of title to, or transfer of uncertificated shares and any legislation, rules or other arrangements made under or by virtue of such provision (including the Uncertificated Securities Regulations 2001 as amended or replaced from time to time and any subordinate legislation or rules made under them for the time being in force)

 

"uncertificated share" means a share of a class which is at the relevant time a participating class, title to which is recorded on the Register as being held in uncertificated form and references in these Articles to a share being held in uncertificated form shall be construed accordingly

 

2.2

Headings are used for convenience only and shall not affect the construction or interpretation of these Articles.

 

2.3

A person includes a corporate and an unincorporated body (whether or not having separate legal personality).

 

2.4

Words in the singular shall include the plural and vice versa.

 

2.5

A reference to one gender shall include a reference to all other genders.

 

2.6

A reference to a statute or statutory provision is a reference to it as it is in force for the time being, taking account of any amendment, extension, or re-enactment and includes any subordinate legislation for the time being in force made under it.

 

2.7

Any words or expressions defined in the Companies Acts in force when these Articles or any part of these Articles are adopted shall (if not inconsistent with the subject or context in which they appear) have the same meaning in these Articles or that part, save that the word company shall include any body corporate.

 

2.8

A reference to a document being signed or to signature includes references to its being executed under hand or under seal or by any other method and, in the case of a communication in electronic form, such references are to its being authenticated as specified by the Companies Acts.

 

2.9

A reference to writing or written includes references to any method of representing or reproducing words in a legible and non-transitory form whether sent or supplied in electronic form or otherwise.

 

2.10

A reference to documents or information being sent or supplied by or to a company (including the Company) shall be construed in accordance with section 1148(3) of the Act.

 

2.11

A reference to a meeting shall not be taken as requiring more than one person to be present if any quorum requirement can be satisfied by one person.

 

2.12

If any Article (or part thereof) is or becomes inconsistent with any laws or regulations of any country to which affairs of the Company are subject such laws or regulations shall prevail and the relevant Article (or part thereof) shall be construed accordingly.

 

2.13

A reference to an electronic platform or electronic platforms include, without limitation, website addresses and conference call systems, and references to persons attending meetings by electronic means means attendance at electronic general meetings via the electronic platform(s) stated in the notice of such meeting.

 

 

 

 

3.

Form of Resolution

 

Subject to the Companies Acts, where anything can be done by passing an ordinary resolution, this can also be done by passing a special resolution.

 

4.

Capital

 

4.1

The capital of the Company is divided into:

 

(a)

an unlimited number of ordinary shares of £[●] each ("Ordinary Shares");

 

(b)

an unlimited number of deferred shares of £1.00 each (the “Deferred A Shares”); and

 

(c)

an unlimited number of deferred shares of £0.01 each (the “Deferred B Shares” and together with the Deferred A Shares, the "Deferred Shares"),

 

in each case conferring on the holders the rights and being subject to the restrictions set out in Article 10.

 

5.

Limited Liability

 

The liability of the members of the Company is limited to the amount, if any, unpaid on the shares in the Company held by them.

 

6.

Change of Name

 

The Company may change its name by resolution of the Board.

 

7.

Power to Attach Rights to Shares

 

Subject to the Companies Acts and to any rights attached to existing shares, any share may be issued with or have attached to it such rights and restrictions as the Company may by ordinary resolution determine, or if no ordinary resolution has been passed or so far as the resolution does not make specific provision, as the Board may determine.

 

8.

Allotment of Shares and Pre-Emption

 

8.1

Subject to the Companies Acts, these Articles and to any relevant authority of the Company in general meeting required by the Act, the Board may offer, allot (with or without conferring rights of renunciation), grant options over or otherwise deal with or dispose of shares or grant rights to subscribe for or convert any security into shares to such persons, at such times and upon such terms as the Board may decide. No share may be issued at a discount to its nominal value.

 

8.2

The Board may, at any time after the allotment of any share but before any person has been entered in the Register, recognise a renunciation by the allottee in favour of some other person and accord to the allottee of a share a right to effect such renunciation and/or allow the rights to be represented by one or more participating securities, in each case upon and subject to such terms and conditions as the Board may think fit to impose.

 

 

 

 

8.3

Under and in accordance with section 551 of the Act, the Directors shall be generally and unconditionally authorised to exercise for each prescribed period all the powers of the Company to allot shares or to grant rights to subscribe for or to convert any security into shares up to an aggregate nominal amount equal to the Section 551 Amount (as defined below).

 

8.4

Under and within the terms of the said authority or otherwise in accordance with section 570 of the Act, the Directors shall be empowered during each prescribed period to allot equity securities (as defined by the Act) wholly for cash:

 

(a)

in connection with a rights issue; and

 

(b)

otherwise than in connection with a rights issue up to an aggregate nominal amount equal to the Section 561 Amount (as defined below).

 

8.5

During each prescribed period the Company and its Directors by such authority and power may make offers or agreements which would or might require equity securities or other securities to be allotted after the expiry of such period.

 

8.6

For the purposes of this Article 8:

 

(a)

"rights issue" means an offer of equity securities (as defined by the Act) open for acceptance for a period fixed by the Board to holders of equity securities on the Register on a fixed record date in proportion to their respective holdings of such securities or in accordance with the rights attached to them but subject to such exclusions or other arrangements as the Board may deem necessary or expedient with regard to treasury shares, fractional entitlements or legal or practical problems under the laws of any territory or under the requirements of any recognised regulatory body or stock exchange in any territory;

 

(b)

"prescribed period" means any period (not exceeding five years on any occasion) for which the authority, in the case of Article 8.3, is conferred or renewed by ordinary or special resolution stating the Section 551 Amount and in the case of Article 8.4 is conferred or renewed by special resolution stating the Section 561 Amount;

 

(c)

"Section 551 Amount" means for any prescribed period, the amount stated in the relevant ordinary or special resolution;

 

(d)

"Section 561 Amount" means for any prescribed period, the amount stated in the relevant special resolution; and

 

(e)

the nominal amount of any securities shall be taken to be, in the case of rights to subscribe for or to convert any securities into shares of the Company, the nominal amount of such shares which may be allotted pursuant to such rights.

 

9.

Redeemable Shares

 

Subject to the Companies Acts and to any rights attaching to existing shares, any share may be issued which can be redeemed or is liable to be redeemed at the option of the Company or the holder. The Board may determine the terms, conditions and manner of redemption of any redeemable shares which are issued. Such terms and conditions shall apply to the relevant shares as if the same were set out in these Articles.

 

 

 

 

10.

Shareholder Rights

 

10.1

The Ordinary Shares shall rank pari passu as a single class. The Deferred Shares shall rank pari passu as a single class.

 

10.2

In the event of the liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to members shall be distributed amongst all holders of the Ordinary Shares in proportion to the number of shares held irrespective of the amount paid or credited as paid on any share.

 

10.3

Any:

 

(a)

consolidation or merger of the Company with or into another entity or entities (whether or not the Company is the surviving entity) as a result of which the holders of the Company's outstanding shares possessing the voting power (under ordinary circumstances) to elect a majority of the Board immediately prior to such sale or issue cease to own the Company's outstanding shares possessing the voting power (under ordinary circumstances) to elect a majority of the Board;

 

(b)

sale or transfer by the Company of all or substantially all of its assets (determined either for the Company alone or together with its subsidiaries on a consolidated basis); or

 

(c)

sale, transfer or issuance or series of sales, transfers and/or issues of shares by the Company or the holders thereof, as a result of which the holders of the Company's outstanding shares possessing the voting power (under ordinary circumstances) to elect a majority of the Board immediately prior to such sale or issue cease to own the Company's outstanding shares possessing the voting power (under ordinary circumstances) to elect a majority of the Board,

 

shall be deemed to be a liquidation, dissolution and winding up of the Company for purposes of Article 10.2 (unless the Board determine otherwise), and the holders of the Ordinary Shares shall be entitled to receive from the Company the amounts payable with respect to the Ordinary Shares on a liquidation, dissolution or winding up of the Company under Article 10.2 in cancellation of their Ordinary Shares upon the completion of any such transaction.

 

10.4

At a general meeting of the Company and at any separate class meeting of the holders of Ordinary Shares, where a holder of Ordinary Shares is entitled to vote, such holder is entitled to one vote for each Ordinary Share held.

 

10.5

A holder of Ordinary Shares is entitled to receive notice of any general meeting of the Company (and notice of any separate class meeting of the holders of Ordinary Shares) and a copy of every report, accounts, circular or other document sent out by the Company to members.

 

10.6

Notwithstanding any other provision of these Articles, the special rights, privileges, restrictions and limitations attaching to the Deferred Shares are as follows:

 

(a)

the Deferred Shares shall not be entitled to any dividends or to any other right of participation in the profits of the Company;

 

 

 

 

(b)

on return of assets on liquidation, the Deferred Shares shall confer on the holders thereof an entitlement to receive out of the assets of the Company available for distribution amongst the members (subject to the rights of any new class of shares with preferred rights) the amount credited as paid up on the Deferred Shares held by them respectively after (but only after) payment shall have been made to the holders of the Ordinary Shares of the amounts paid up or credited as paid up on such shares and the sum of £1,000,000 in respect of each Ordinary Share held by them respectively. The Deferred Shares shall confer on the holders thereof no further right to participate in the assets of the Company;

 

(c)

the Deferred Shares do not entitle the holder thereof to vote on any resolution or to receive notice of, attend any general meeting, or be part of the quorum thereof as the holders of the Deferred Shares;

 

(d)

any reduction of capital involving the cancellation of the Deferred Shares for no consideration shall not be deemed to be a variation of the rights attaching to them nor a modification or abrogation of the rights or privileges attaching to the Deferred Shares and the Company shall be authorised at any time to reduce its capital (in accordance with the Act) without obtaining the consent of the holders of the Deferred Shares;

 

(e)

any special rights conferred upon the holders of the Deferred Shares shall be deemed to not be modified, varied or abrogated by the creation or issue of further shares ranking pari passu with or in priority to the Deferred Shares;

 

(f)

no transfer of any Deferred Shares shall be permitted save as provided in Article 10.6(g);

 

(g)

the Company shall have irrevocable authority at any time to appoint any person to execute on behalf of the holders of the Deferred Shares a transfer thereof and/or an agreement to transfer the same, without making any payment to the holders thereof, or to such person as the Company may determine as custodian thereof and/or to cancel the same without making any payment to the holders thereof and/or acquire the same (in accordance with the provisions of the Act) without making any payment to or obtaining the sanction of the holders thereof;

 

(h)

subject to the Act, the Company shall be entitled to purchase any Deferred Shares in issue at any time for no consideration; and

 

(i)

the Company shall be entitled to cancel all or any of the Deferred Shares so acquired by the Company in accordance with the Act.

 

11.

Pari Passu Issues

 

If new shares are created or issued which rank equally with any other existing shares, or the Company purchases any of its own shares, the rights of the existing shares will not be regarded as changed or abrogated unless the terms of the existing shares expressly say otherwise.

 

 

 

 

12.

Variation of Rights

 

12.1

Subject to the Companies Acts, the rights attached to any class of shares can be varied or abrogated either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of that class (excluding any shares of that class held as treasury shares) or with the authority of a special resolution passed at a separate meeting of the holders of the relevant class of shares known as a class meeting.

 

12.2

The provisions of this Article 12 will apply to any variation or abrogation of rights of shares forming part of a class. Each part of the class which is being treated differently is treated as a separate class in applying this Article 12.

 

12.3

All the provisions in these Articles as to general meetings shall apply, with any necessary modifications, to every class meeting except that the necessary quorum at every such meeting shall be not less than two persons present and between them holding or representing by proxy at least 33 ⅓ per cent in number of the issued shares of the relevant class (excluding any shares of that class held as treasury shares) provided that where a person is present by proxy or proxies, they are treated as holding only the shares in respect of those proxies which are authorised to exercise voting rights.

 

12.4

The Board may convene a class meeting whenever it thinks fit and whether or not the business to be transacted involves a variation or abrogation of class rights.

 

13.

Payment of Commission

 

The Company may in connection with the issue of any shares or the sale for cash of treasury shares exercise all powers of paying commission and brokerage conferred or permitted by the Companies Acts. Any such commission or brokerage may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or other securities or the grant of an option to call for an allotment of shares or any combination of such methods.

 

14.

Trusts Not Recognised

 

Except as otherwise expressly provided by these Articles, required by law or as ordered by a court of competent jurisdiction, the Company shall not recognise any person as holding any share on any trust, and the Company shall not be bound by or required in any way to recognise (even when having notice of it) any equitable, contingent, future, partial or other claim to or interest in any share other than an absolute right of the holder of the whole of the share.

 

15.

Uncertificated Shares

 

15.1

Under and subject to the uncertificated securities rules, the Board may permit title to shares of any class to be evidenced otherwise than by certificate and title to shares of such a class to be transferred by means of a relevant system and may make arrangements for a class of shares (if all shares of that class are in all respects identical) to become a participating class. Title to shares of a particular class may only be evidenced otherwise than by a certificate where that class of shares is at the relevant time a participating class. The Board may also, subject to compliance with the uncertificated securities rules, determine at any time that title to any class of shares may from a date specified by the Board no longer be evidenced otherwise than by a certificate or that title to such a class shall cease to be transferred by means of any particular relevant system.

 

 

 

 

15.2

In relation to a class of shares which is a participating class and for so long as it remains a participating class, no provision of these Articles shall apply or have effect to the extent that it is inconsistent in any respect with:

 

(a)

the holding of shares of that class in uncertificated form;

 

(b)

the transfer of title to shares of that class by means of a relevant system; or

 

(c)

any provision of the uncertificated securities rules,

 

and, without prejudice to the generality of this Article 15.2, no provision of these Articles shall apply or have effect to the extent that it is in any respect inconsistent with the maintenance, keeping or entering up by the Operator, so long as that is permitted or required by the uncertificated securities rules, of an Operator register of securities in respect of that class of shares in uncertificated form.

 

15.3

Ordinary Shares of a class which is at the relevant time a participating class may be changed from uncertificated to certificated form, and from certificated to uncertificated form, in accordance with and subject as provided in the uncertificated securities rules.

 

15.4

If, under these Articles or the Companies Acts, the Company is entitled to sell, transfer or otherwise dispose of, forfeit, re-allot, accept the surrender of or otherwise enforce a lien over an uncertificated share, then, subject to these Articles and the Companies Acts, such entitlement shall include the right of the Board to:

 

(a)

require the holder of the uncertificated share by notice in writing to change that share from uncertificated to certificated form within such period as may be specified in the notice and keep it as a certificated share for as long as the Board requires;

 

(b)

appoint any person to take such other steps, by instruction given by means of a relevant system or otherwise, in the name of the holder of such share as may be required to effect the transfer of such share and such steps shall be as effective as if they had been taken by the registered holder of that share; and

 

(c)

take such other action that the Board considers appropriate to achieve the sale, transfer, disposal, forfeiture, re-allotment or surrender of that share or otherwise to enforce a lien in respect of that share.

 

15.5

Unless the Board determines otherwise, shares which a member holds in uncertificated form shall be treated as separate holdings from any shares which that member holds in certificated form but a class of shares shall not be treated as two classes simply because some shares of that class are held in certificated form and others in uncertificated form.

 

15.6

Unless the Board determines otherwise or the uncertificated securities rules require otherwise, any shares issued or created out of or in respect of any uncertificated shares shall be uncertificated shares and any shares issued or created out of or in respect of any certificated shares shall be certificated shares.

 

15.7

The Company shall be entitled to assume that the entries on any record of securities maintained by it in accordance with the uncertificated securities rules and regularly reconciled with the relevant Operator register of securities are a complete and accurate reproduction of the particulars entered in the Operator register of securities and shall accordingly not be liable in respect of any act or thing done or omitted to be done by or on behalf of the Company in reliance on such assumption. Any provision of these Articles which requires or envisages that action will be taken in reliance on information contained in the Register shall be construed to permit that action to be taken in reliance on information contained in any relevant record of securities (as so maintained and reconciled).

 

 

 

 

16.

Share Certificates

 

16.1

Other than as provided in Article 16.6 below, every person (except a person to whom the Company is not by law required to issue a certificate) whose name is entered in the Register as a holder of any certificated shares shall be entitled, without charge, to receive within the time limits prescribed by the Companies Acts (unless the terms of issue prescribe otherwise) one certificate for all of the shares of that class registered in their name.

 

16.2

The Company shall not be bound to issue more than one certificate in respect of shares held jointly by two or more persons. Delivery of a certificate to the person first named in the Register shall be sufficient delivery to all joint holders.

 

16.3

Where a member has transferred part only of the shares comprised in a certificate, they shall be entitled without charge to a certificate for the balance of such shares to the extent that the balance is to be held in certificated form. Where a member receives more shares of any class, they shall be entitled without charge to a certificate for the extra shares of that class to the extent that the balance is to be held in certificated form.

 

16.4

A share certificate may be issued under Seal (by affixing the Seal to or printing (whether mechanically or electronically) the Seal or a representation of it on the certificate) or signed by at least two Directors or by at least one Director and the Secretary. Such certificate shall specify the number and class of the shares in respect of which it is issued and the amount or respective amounts paid up on it. The Board may by resolution decide, either generally or in any particular case or cases, that any signatures on any share certificates need not be autographic but may be applied to the certificates by some mechanical or other means or may be printed on them or that the certificates need not be signed by any person.

 

16.5

Every share certificate sent in accordance with these Articles will be sent at the risk of the member or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the course of delivery.

 

16.6

No share certificates shall be issued in respect of the Deferred Shares.

 

17.

Replacement Certificates

 

17.1

Any two or more certificates representing shares of any one class held by any member may at their request be cancelled and a single new certificate for such shares issued in lieu without charge on surrender of the original certificates for cancellation.

 

17.2

Any certificate representing shares of any one class held by any member may at their request be cancelled and two or more certificates for such shares may be issued instead.

 

17.3

If a share certificate is defaced, worn out or said to be stolen, lost or destroyed, it may be replaced on such terms as to evidence and indemnity in respect of such share certificate only as the Board may decide and, where it is defaced or worn out, after delivery of the old certificate to the Company.

 

 

 

 

17.4

The Board may require the payment of any exceptional out-of-pocket expenses of the Company incurred in connection with the issue of any certificates under this Article. In the case of shares held jointly by several persons, any such request as is mentioned in this Article 17 may be made by any one of the joint holders.

 

18.

Lien on Shares not Fully Paid

 

The Company shall have a first and paramount lien on every share, not being a fully paid share, for all amounts payable to the Company (whether presently or not) in respect of that share. The Company's lien over a share takes priority over any third party's interest in that share, and extends to any dividend or other money payable by the Company in respect of that share (and, if the lien is enforced and the share is sold by the Company, the proceeds of sale of that share). The Board may at any time, either generally or in any particular case, waive any lien that has arisen or declare any share to be wholly or in part exempt from the provisions of this Article 18.

 

19.

Enforcement of Lien by Sale

 

The Company may sell, in such manner as the Board may decide, any share over which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 clear days after a notice has been served on the holder of the share or the person who is entitled by transmission to the share, demanding payment and stating that if the notice is not complied with the share may be sold. For giving effect to the sale, in the case of a certificated share, the Board may authorise some person to sign an instrument of transfer of the share sold to, or in accordance with the directions, of the buyer. In the case of an uncertificated share, the Board may require the Operator to convert the share into certificated form and after such conversion, authorise any person to sign the instrument of transfer of the share to effect the sale of the share. The buyer shall not be bound to see to the application of the purchase money, nor shall their title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.

 

20.

Application of Proceeds of Sale

 

The net proceeds of any sale of shares subject to any lien, after payment of the costs, shall be applied:

 

(a)

first, in or towards satisfaction of so much of the amount due to the Company or of the liability or engagement (as the case may be) as is presently payable or is liable to be presently fulfilled or discharged; and

 

(b)

second, any residue shall be paid to the person who was entitled to the share at the time of the sale but only after the certificate for the shares sold has been surrendered to the company for cancellation, or an indemnity in a form reasonably satisfactory to the Directors has been given for any lost certificates, and subject to a like lien for debts or liabilities not presently payable as existed on the share prior to the sale.

 

 

 

 

21.

Calls

 

21.1

Subject to these Articles and the terms on which the shares are allotted, the Board may from time to time make calls on the members in respect of any monies unpaid on their shares (whether in respect of nominal value or premium) and not payable on a date fixed by or in accordance with the terms of issue.

 

21.2

Each member shall (subject to the Company serving upon them at least 14 clear days' notice specifying when and where payment is to be made and whether or not by instalments) pay to the Company as required by the notice the amount called on for their shares.

 

21.3

A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed.

 

21.4

A call may be revoked or postponed, in whole or in part, as the Board may decide.

 

21.5

Liability to pay a call is not extinguished or transferred by transferring the shares in respect of which the call is required to be paid.

 

22.

Liability of Joint Holders

 

The joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share.

 

23.

Interest on Calls

 

If a call remains unpaid after it has become due and payable, the person from whom it is due and payable shall pay all expenses that have been incurred by the Company by reason of such non-payment together with interest on the amount unpaid from the day it is due and payable to the time of actual payment at such rate (not exceeding the Bank of England base rate by more than five percentage points) as the Board may decide. The Board may waive payment of the interest or the expenses in whole or in part.

 

24.

Power to Differentiate

 

On or before the issue of shares, the Board may decide that allottees or holders of shares can be called on to pay different amounts or that they can be called on at different times.

 

25.

Payment of Calls in Advance

 

The Board may, if it thinks fit, receive from any member willing to advance the same, all or any part of the monies uncalled and unpaid on the shares held by them. Such payment in advance of calls shall, to the extent of the payment, extinguish the liability on the shares on which it is made. The Company may pay interest on the money paid in advance, or so much of it as exceeds the amount for the time being called upon the shares in respect of which such advance has been made, at such rate as the Board may decide. The Board may at any time repay the amount so advanced by giving at least three months' notice in writing to such member of its intention to do so, unless before the expiration of such notice the amount so advanced shall have been called up on the shares in respect of which it was advanced.

 

 

 

 

26.

Notice if Call or Instalment Not Paid

 

If any member fails to pay the whole of any call (or any instalment of any call) by the date when payment is due, the Board may at any time give notice in writing to such member (or to any person entitled to the shares by transmission), requiring payment of the amount unpaid (and any accrued interest and any expenses incurred by the Company by reason of such non-payment) by a date not less than 14 clear days from the date of the notice. The notice shall name the place where the payment is to be made and state that, if the notice is not complied with, the shares in respect of which such call was made will be liable to be forfeited.

 

27.

Forfeiture for Non-Compliance

 

If the notice referred to in Article 26 is not complied with, any share for which it was given may be forfeited, by resolution of the Board to that effect, at any time before the payment required by the notice has been made. Such forfeiture shall include all dividends declared or other monies payable in respect of the forfeited shares and not paid before the forfeiture.

 

28.

Notice After Forfeiture

 

When any share has been forfeited, notice of the forfeiture shall be served on the holder of the share or the person entitled to such share by transmission (as the case may be) before forfeiture. An entry of such notice having been given and of the forfeiture and the date of forfeiture shall immediately be made in the Register in respect of such share. However, no forfeiture shall be invalidated by any omission to give such notice or to make such entry in the Register.

 

29.

Forfeiture May Be Annulled

 

The Board may annul the forfeiture of a share, at any time before any forfeited share has been cancelled or sold, re-allotted or otherwise disposed of, on the terms that payment shall be made of all calls and interest due on it and all expenses incurred in respect of the share and on such further terms (if any) as the Board shall see fit.

 

30.

Surrender

 

The Board may accept the surrender of any share liable to be forfeited and, in any event, references in these Articles to forfeiture shall include surrender.

 

31.

Sale of Forfeited Shares

 

31.1

A forfeited share shall become the property of the Company.

 

31.2

Subject to the Companies Acts, any such share may be sold, re-allotted or otherwise disposed of, on such terms and in such manner as the Board thinks fit.

 

31.3

The Board may, for the purposes of the disposal, authorise some person to transfer the share in question and may enter the name of the transferee in respect of the transferred share in the Register even if no share certificate is lodged and may issue a new certificate to the transferee. An instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of or the person entitled by transmission to, the share. The Company may receive the consideration (if any) given for the share on its disposal.

 

 

 

 

32.

Effect of Forfeiture

 

A member whose shares have been forfeited shall cease to be a member in respect of such forfeited shares and shall surrender the certificate for such shares to the Company for cancellation. Such member shall remain liable to pay to the Company all sums which at the date of forfeiture were presently payable by them to the Company in respect of such shares with interest at a rate (not exceeding the Bank of England base rate by two percentage points) determined by the Board from the date of the forfeiture to the date of payment. The Directors may waive payment of interest wholly or in part and may enforce payment, without any reduction or allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal.

 

33.

Evidence of Forfeiture

 

A statutory declaration by a Director or the Secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share. The declaration shall (subject to the execution of an instrument of transfer if necessary) constitute a good title to the share. The person to whom the share is transferred or sold shall not be bound to see to the application of the purchase money or other consideration (if any), nor shall their title to the share be affected by any act, omission or irregularity relating to or connected with the proceedings in reference to the forfeiture or disposal of the share.

 

34.

Form of Transfer

 

34.1

Subject to these Articles:

 

(a)

each member may transfer all or any of their shares which are in certificated form by instrument of transfer in writing in any usual form or in any form approved by the Board. Such instrument shall be executed by or on behalf of the transferor and (in the case of a transfer of a share which is not fully paid up) by or on behalf of the transferee. All instruments of transfer, when registered, may be retained by the Company; and

 

(b)

each member may transfer all or any of their shares which are in uncertificated form by means of a relevant system in such manner provided for, and subject as provided in, the uncertificated securities rules. No provision of these Articles shall apply in respect of an uncertificated share to the extent that it requires or contemplates the effecting of a transfer by an instrument in writing or the production of a certificate for the share to be transferred.

 

34.2

The transferor of a share shall be deemed to remain the holder of the share concerned until the name of the transferee is entered in the Register in respect of it.

 

35.

Right to Refuse Registration of Transfer

 

35.1

The Board may, in its absolute discretion, refuse to register any transfer of a share in certificated form (or renunciation of a renounceable letter of allotment) unless:

 

(a)

it is for a share which is fully paid up;

 

(b)

it is for a share upon which the Company has no lien;

 

(c)

it is only for one class of share;

 

 

 

 

(d)

it is in favour of a single transferee or no more than four joint transferees;

 

(e)

it is duly stamped or is duly certificated or otherwise shown to the satisfaction of the Board to be exempt from stamp duty (in each case if this is required); and

 

(f)

is delivered for registration to the Office (or such other place as the Board may determine), accompanied (except in the case of a transfer by a person to whom the Company is not required by law to issue a certificate and to whom a certificate has not been issued or in the case of a renunciation) by the certificate for the shares to which it relates and such other evidence as the Board may reasonably require to prove the title of the transferor (or person renouncing) and the due execution of the transfer or renunciation by them or, if the transfer or renunciation is executed by some other person on their behalf, the authority of that person to do so.

 

35.2

The Board shall not refuse to register any transfer or renunciation of partly paid shares which are admitted to trading on Nasdaq, or for which certificated or uncertificated depositary instruments over such shares are admitted to trading on Nasdaq on the grounds that they are partly paid shares in circumstances where such refusal would prevent dealings in such shares from taking place on an open and proper basis.

 

35.3

Transfers of shares will not be registered in the circumstances referred to in Article 74.

 

35.4

The Board may refuse to register a transfer of uncertificated shares in any circumstances that are allowed or required by the uncertificated securities rules and the relevant system.

 

36.

Notice of Refusal to Register a Transfer

 

If the Board refuses to register a transfer of a share it shall notify the transferee of the refusal and the reasons for it within two months after the date on which the transfer was lodged with the Company or the instructions to the relevant system received. Any instrument of transfer which the Board refuses to register shall be returned to the person depositing it (except if there is suspected or actual fraud). All instruments of transfer which are registered may be retained by the Company.

 

37.

No Fees on Registration

 

No fee shall be charged for registration of a transfer or other document or instruction relating to or affecting the title to any share or for making any other entry in the Register.

 

38.

Other Powers in Relation to Transfers

 

Nothing in these Articles shall prevent the Board:

 

(a)

from recognising a renunciation of the allotment of any share by the allottee in favour of another person; or

 

(b)

(if empowered to do so by these Articles) from authorising any person to execute an instrument of transfer of a share and from authorising any person to transfer that share in accordance with any procedures implemented under Article 19.

 

 

 

 

39.

Transmission of Shares on Death

 

If a member dies, the survivors or survivor (where they were a joint holder), and their executors or administrators (where they were a sole or the only survivor of joint holders), shall be the only persons recognised by the Company as having any title to their shares. Nothing in these Articles shall release the estate of a deceased member from any liability for any share which has been solely or jointly held by them.

 

40.

Election of Person Entitled By Transmission

 

40.1

Any person becoming entitled to a share because of the death or bankruptcy of a member, or otherwise by operation of law, may (on such evidence as to their title being produced as the Board may require) elect either to become registered as a member or to have some person nominated by them registered as a member. If they elect to become registered themselves, they shall notify the Company to that effect. If they elect to have some other person registered, they shall execute an instrument of transfer of such share to that person. All the provisions of these Articles relating to the transfer of shares shall apply to the notice or instrument of transfer (as the case may be) as if it were an instrument of transfer executed by the member and their death, bankruptcy or other event had not occurred. Where the entitlement of a person to a share because of the death or bankruptcy of a member or otherwise by operation of law is proved to the satisfaction of the Board, the Board shall within 30 days after proof cause the entitlement of that person to be noted in the Register.

 

40.2

A person entitled by transmission to a share in uncertificated form who elects to have some other person registered shall either:

 

(a)

procure that instructions are given by means of the relevant system to effect transfer of such uncertificated share to that person; or

 

(b)

change the uncertificated share to certificated form and execute an instrument of transfer of that certificated share to that person.

 

41.

Rights on Transmission

 

Where a person becomes entitled to a share because of the death or bankruptcy of any member, or otherwise by operation of law, the rights of the holder in relation to such share shall cease. However, the person so entitled may give a good discharge for any dividends and other monies payable in respect of it and shall have the same rights to which they would be entitled if they were the holder of the share, except that they shall not be entitled to receive notice of, or to attend or vote at, any meeting of the Company or any separate meeting of the holders of any class of shares of the Company before they are registered as the holder of the share. The Board may at any time give notice requiring any such person to elect either to be registered themself or to transfer the share. If the notice is not complied with within 30 days, the Board may withhold payment of all dividends and any other monies payable in respect of such share until the requirements of the notice have been complied with.

 

42.

Destruction of Documents

 

42.1

The Company may destroy any:

 

(a)

instrument of transfer, after six years from the date on which it is registered;

 

 

 

 

(b)

dividend mandate or any variation or cancellation of a dividend mandate or any notification of change of name or address, after two years from the date on which it is recorded;

 

(c)

share certificate, after one year from the date on which it is cancelled;

 

(d)

instrument of proxy which has been used for the purpose of a poll at any time after one year has elapsed from the date of use;

 

(e)

instrument of proxy which has not been used for the purpose of a poll at any time after a period of one month has elapsed from the end of the meeting to which the instrument of proxy relates;

 

(f)

Share Warrant (including coupons or tokens detailed from it) which has been cancelled at any time after seven years from the date on which it was cancelled; or

 

(g)

other document for which any entry in the Register is made, after six years from the date on which an entry was first made in the Register in respect of it,

 

provided that the Company may destroy any such type of document at a date earlier than that authorised by this Article 42.1 if a copy of such document is made and retained (whether electronically, by microfilm, by digital imaging or by other similar means) until the expiration of the period applicable to the destruction of the original of such document.

 

42.2

It shall be conclusively presumed in favour of the Company that every:

 

(a)

entry in the Register purporting to have been made on the basis of a document so destroyed was duly and properly made;

 

(b)

instrument of transfer so destroyed was duly registered;

 

(c)

share certificate so destroyed was duly cancelled; and

 

(d)

other document so destroyed had been properly dealt with under its terms and was valid and effective according to the particulars in the records of the Company.

 

42.3

This Article 42 shall only apply to the destruction of a document in good faith and without notice of any claim (regardless of the parties to it) to which the document might be relevant. Nothing in this Article 42 shall be construed as imposing any liability on the Company in respect of the destruction of any such document other than as provided for in this Article 42 which would not attach to the Company in the absence of this Article 42. References in this Article 42 to the destruction of any document include references to the disposal of it in any manner.

 

42.4

References in this Article 42 to instruments of transfer shall include, in relation to uncertificated shares, instructions and/or notifications made in accordance with the relevant system relating to the transfer of such shares.

 

 

 

 

43.

Sub-Division

 

Any resolution authorising the Company to sub-divide its shares or any of them may determine that, as between the shares resulting from the sub-division, any of them may have any preference or advantage or be subject to any restriction as compared with the others.

 

44.

Fractions

 

If any shares are consolidated or consolidated and then divided, the Board has power to deal with any fractions of shares which result. If the Board decides to sell any shares representing fractions, it can do so for the best price reasonably obtainable and distribute the net proceeds of sale among members in proportion to their fractional entitlements. The Board can arrange for any shares representing fractions to be entered in the Register as certificated shares if they consider that this makes it easier to sell them. The Board can sell those shares to anyone, including the Company if the legislation allows, and may authorise any person to transfer or deliver the shares to the buyer or in accordance with the buyer's instructions. The buyer shall not be bound to see to the application of the purchase money, nor shall their title to the share(s) be affected by any irregularity or invalidity in the proceedings in reference to the sale.

 

45.

Annual General Meetings

 

An annual general meeting shall be held once a year, at such time and places (including electronic platforms) as may be determined by the Board in accordance with the requirements of the Companies Acts.

 

46.

Convening of General Meetings

 

All meetings other than annual general meetings shall be called general meetings. The Board may, whenever it thinks fit, and shall on requisition in accordance with the Companies Acts, proceed to convene a general meeting which may be held as a physical general meeting or an electronic general meeting.

 

47.

Notice of General Meetings

 

A general meeting shall be called by at least such minimum notice as is required or permitted by the Companies Acts. The period of notice shall in either case be exclusive of the day on which it is served or deemed to be served and of the day on which the meeting is to be held and shall be given to all members other than those who are not entitled to receive such notices from the Company. The Company may give such notice by any means or combination of means permitted by the Companies Acts.

 

48.

Contents of Notice of Meetings

 

48.1

Subject to the provisions of the Companies Acts, every notice calling a meeting shall include all information required to be included by the Act, applicable securities laws, including US securities laws, the Nasdaq Rules or the rules of any other stock exchange or quotation system on which any shares of the Company (and/or depositary instruments over such shares) are then listed or quoted and, further, shall specify:

 

(a)

whether the meeting shall be a physical and/or electronic general meeting;

 

 

 

 

(b)

for physical general meetings, the time, date and place of the meeting (including without limitation any satellite meeting place arranged for the purposes of Article 60, which shall be identified as such in the notice);

 

(c)

for electronic general meetings, the time, date and electronic platform for the meeting, which electronic platforms may vary from time to time and from meeting to meeting as the Board, in its sole discretion, sees fit; and

 

(d)

with reasonable prominence in every such notice a statement that a member entitled to attend and vote is entitled to a proxy or (if they have more than one share) proxies to exercise all or any of their rights to attend, speak and vote and that a proxy need not be a member of the Company. Such notice shall also include the address of the website on which the information required by the Act is published, state the procedures with which members must comply in order to be able to attend and vote at the meeting (including the date by which they must comply), provide details of any forms to be used for the appointment of a proxy and state that a member has the right to ask questions at the meeting in accordance with the Act.

 

48.2

The notice shall specify the general nature of the business to be transacted at the meeting and shall set out the text of all resolutions to be considered by the meeting and shall state in each case whether it is proposed as an ordinary resolution or as a special resolution.

 

48.3

In the case of an annual general meeting, the notice shall also specify the meeting as such.

 

48.4

For the purposes of determining which persons are entitled to attend or vote at a meeting and how many votes a person may cast, the Company may specify in the notice of meeting a time, not more than 48 hours before the time fixed for the meeting (not taking into account non-working days) by which a person must be entered in the Register in order to have the right to attend or vote at the meeting or appoint a proxy to do so.

 

49.

Omission to Give Notice and Non-Receipt of Notice

 

The accidental omission to give notice of any meeting or to send an instrument of proxy (where this is intended to be sent out with the notice) to or the non-receipt of either by, any person entitled to receive the same shall not invalidate the proceedings of that meeting.

 

50.

Postponement of General Meeting

 

If the Board considers that it is impracticable or unreasonable to hold the physical general meeting at the declared place (or any of the declared places, in the case of a meeting to which Article 60 applies) and/or the electronic general meeting on the electronic platform specified in the notice on the date or at the time stated in the notice calling the meeting, it may change the place (or any of the places, in the case of a meeting to which Article 60 applies) or electronic platform and/or postpone the time and/or date at which the meeting is to be held (or do both). The Board shall take reasonable steps to ensure that notice of the date, time and place of, or electronic platform for, the rearranged meeting is given to any member trying to attend the meeting at the original time and place or on the original electronic platform. Notice of the date, time and place of, or electronic platform for, the rearranged meeting shall, if practicable, also be placed in at least two national newspapers published in the United Kingdom. Notice of the business to be transacted at such rearranged meeting shall not be required. If a meeting is rearranged in accordance with this Article 50, appointments of proxy will be valid if they are received as required by these Articles not less than 48 hours before the time appointed for holding the rearranged meeting and for the purpose of calculating this period, the Board can decide in their absolute discretion, not to take account of any part of a day that is not a working day. The Board may also postpone or move the rearranged meeting (or do both) under this Article 50.

 

 

 

 

51.

Quorum at General Meeting

 

No business shall be transacted at any general meeting unless a quorum is present. If a quorum is not present a chairman of the meeting can still be chosen and this will not be treated as part of the business of the meeting. One or more qualifying persons present at a meeting and between them holding (or being the proxy or corporate representative of the holders of) at least 33 ⅓ per cent in number of the issued shares (excluding any shares held as treasury shares) entitled to attend and vote on the business to be transacted shall constitute a quorum.

 

For the purposes of this Article 51:

 

(a)                        a "qualifying person" is an individual who is a member, a person authorised to act as the representative of a member (being a corporation) in relation to the meeting or a person appointed as proxy of a member in relation to the meeting; and

 

(b)                       where a qualifying person is present as proxy of a member in relation to the meeting, they are treated as holding only the shares in respect of which they are authorised to exercise voting rights.

 

52.

Procedure if Quorum Not Present

 

If a quorum is not present within 15 minutes (or such longer interval as the chairman in their absolute discretion thinks fit) from the time appointed for holding a general meeting, or if a quorum ceases to be present during a meeting, the meeting shall be dissolved if convened on the requisition of members. In any other case, the meeting shall stand adjourned to another day, (not being less than ten clear days after the date of the original meeting), and at such time and place or electronic platform as the chairman (or, in default, the Board) may determine. If at such adjourned meeting a quorum is not present within 15 minutes from the time appointed for holding the meeting, the meeting shall be dissolved.

 

53.

Chairman of General Meeting

 

53.1

The chairman of the Board shall preside at every general meeting of the Company. If there is no such chairman or if at any meeting they shall not be present within five minutes after the time appointed for holding the meeting, or shall be unwilling to act as chairman, the deputy chairman (if any) of the Board shall, if present and willing to act, preside at such meeting. If more than one deputy chairman is present they shall agree amongst themselves who is to take the chair or, if they cannot agree, the deputy chairman who has been in office as a director the longest shall take the chair.

 

53.2

If no chairman or deputy chairman shall be so present and willing to act, the Directors present shall choose one of their number to act or, if there be only one Director present, they shall be chairman if willing to act. If there be no Director present and willing to act, the members present and entitled to vote shall choose one of their number to be chairman of the meeting. Nothing in these Articles shall restrict or exclude any of the powers or rights of a chairman of a meeting which are given by law.

 

 

 

 

54.

Entitlement to Attend and Speak

 

A Director (and any other person invited by the chairman to do so) may attend and speak at any general meeting and at any separate meeting of the holders of any class of shares of the Company, whether or not they are a member.

 

55.

Adjournments

 

The chairman may, with the consent of a meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn any meeting from time to time (or indefinitely) and from place to place (which place may include electronic platforms) as the meeting shall determine. However, without prejudice to any other power which they may have under these Articles or at common law, the chairman may, without the need for the consent of the meeting, interrupt or adjourn any meeting from time to time and from place to place (which place may include electronic platforms) for an indefinite period if they are of the opinion that it has become necessary to do so in order to secure the proper and orderly conduct of the meeting or to give all persons entitled to do so a reasonable opportunity of attending, speaking and voting at the meeting or to ensure that the business of the meeting is properly disposed of.

 

56.

Notice of Adjournment

 

If the meeting is adjourned indefinitely or for more than three months, notice of the adjourned meeting shall be given in the same manner as in the case of the original meeting. Except as provided in these Articles, there is no need to give notice of the adjourned meeting or of the business to be considered there.

 

57.

Business of Adjourned Meeting

 

No business shall be transacted at any adjourned meeting other than the business which might properly have been transacted at the meeting from which the adjournment took place.

 

58.

Security Arrangements and Orderly Conduct

 

58.1

The Board at any physical general meeting may direct that any person wishing to attend any meeting should provide such evidence of identity and submit to such searches or other security arrangements or restrictions as the Board shall consider appropriate in the circumstances and shall be entitled in its absolute discretion to refuse entry to any meeting to any person who fails to provide such evidence of identity or to submit to such searches or to otherwise comply with such security arrangements or restrictions.

 

58.2

The chairman at any physical general meeting shall take such action or give directions as they think fit to promote the orderly conduct of the business of the meeting as laid down in the notice of the meeting and to ensure the security of the meeting and the safety of the people attending the meeting. The chairman's decision on matters of procedure or arising incidentally from the business of the meeting shall be final as shall be their determination as to whether any matter is of such a nature.

 

 

 

 

58.3

The Board and, at any electronic general meeting, the chairman may make any arrangement and impose any requirement or restriction as is:

 

(a)           necessary to ensure the identification of those taking part and the security of the electronic communication; and

 

(b)           proportionate to those objectives.

 

In this respect, the Company is able to authorise any voting application, system or facility for electronic general meetings as it sees fit.

 

59.

Other Arrangements for Viewing and Hearing Proceedings at Physical General Meetings

 

59.1

The Board may, in accordance with this Article 59, make arrangements for members and proxies who are entitled to attend and participate in a general meeting, but who cannot be seated in the main meeting room where the chairman will be, to attend and take part in a general meeting in an overflow room or rooms. Any overflow room will have appropriate links to the main room and will enable audio-visual communication between the meeting rooms throughout the meeting. The Board will decide how to divide members and proxies between the main room and the overflow room. If an overflow room is used, the meeting will be treated as being held and taking place in the main meeting room and the meeting will consist of all the members and proxies who are attending both in the main meeting room and the overflow room.

 

59.2

Details of any arrangements for overflow rooms will be set out in the notice of the meeting but failure to do so will not invalidate the meeting.

 

59.3

The Board may make arrangements for members and proxies who are entitled to attend and participate in a general meeting or an adjourned general meeting, to be able to view and hear the proceedings of the general meeting or adjourned general meeting and to speak at the meeting (whether by use of microphones, loudspeakers, audio-visual communications equipment or otherwise) by attending at a venue anywhere in the world not being a satellite meeting place. If the general meeting is only held as a physical meeting and not also as an electronic meeting, those attending at any such venue shall not be regarded as present at the general meeting or adjourned general meeting and shall not be entitled to vote at the general meeting at or from that venue. The inability for any reason of any member present in person or by proxy at such a venue to view or hear all or any of the proceedings of the physical general meeting or to speak at the meeting shall not in any way affect the validity of the proceedings of the general meeting.

 

60.

Satellite Meeting Places

 

60.1

To facilitate the organisation and administration of any general meeting, the Board may decide that the meeting shall be held at two or more locations.

 

60.2

For the purposes of these Articles, any general meeting of the Company taking place at two or more locations shall be treated as taking place where the chairman of the meeting presides (the principal meeting place) and any other location where that meeting takes place is referred in these Articles as a satellite meeting.

 

 

 

 

60.3

A member present in person or by proxy at a satellite meeting may be counted in the quorum and may exercise all rights that they would have been able to exercise if they were present at the principal meeting place.

 

60.4

The Board may make and change from time to time such arrangements as they shall in their absolute discretion consider appropriate to:

 

(a)

ensure that all members and proxies for members wishing to attend the meeting can do so;

 

(b)

ensure that all persons attending the meeting are able to participate in the business of the meeting and to hear anyone else addressing the meeting (whether by the use of microphones, loudspeakers, audio-visual communications equipment or otherwise) in the principal meeting place and any satellite meeting place, and be heard by all other persons so present in the same way;

 

(c)

ensure the safety of persons attending the meeting and the orderly conduct of the meeting; and

 

(d)

restrict the numbers of members and proxies at any one location to such number as can safely and conveniently be accommodated there (including without limitation the issue of tickets or the imposition of some other means of selection).

 

60.5

The entitlement of any member or proxy to attend a satellite meeting shall be subject to any such arrangements then in force and stated by the notice of the meeting or adjourned meeting to apply to the meeting.

 

60.6

If there is a failure of communication equipment or any other failure in the arrangements for participation in the meeting at more than one place, the chairman may adjourn the meeting in accordance with Article 55. Such adjournment will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.

 

60.7

A person (satellite chairman) appointed by the Board shall preside at each satellite meeting. Every satellite chairman shall carry out all requests made of them by the chairman of the meeting, may take such action as they think necessary to maintain the proper and orderly conduct of the satellite meeting and shall have all powers necessary or desirable for such purposes.

 

61.

Electronic General Meetings

 

61.1

Without prejudice to Article 60, the Board may resolve to enable persons entitled to attend a general meeting hosted on an electronic platform (such meeting being an electronic general meeting) to do so by simultaneous attendance by electronic means with no member necessarily in physical attendance at the electronic general meeting. The members or their proxies present shall be counted in the quorum for, and entitled to vote at, the general meeting in question, and that meeting shall be duly constituted and its proceedings valid if the chairman of the meeting is satisfied that adequate facilities are available throughout the electronic general meeting to ensure that members attending the electronic general meeting who are not present together at the same place may, by electronic means, attend, speak and vote at it.

 

 

 

 

61.2

If there is a failure of communication equipment, electronic platform, facilities, security or any other failure in the arrangements for participation in the electronic general meeting, the chairman may, without the consent of the meeting, interrupt or adjourn the meeting in accordance with Article 55. Such adjournment will not affect the validity of such meeting, or any business conducted at such meeting up to the point of adjournment, or any action taken pursuant to such meeting.

 

61.3

If, at any electronic general meeting, any document is required to be on display or to be available for inspection at that meeting (whether prior to or for the duration of the meeting or both), the Company shall ensure that it is available in electronic form to persons entitled to inspect it for at least the required period of time, and this will be deemed to satisfy any such requirements.

 

61.4

Nothing in these Articles prevents a general meeting being held both physically and electronically.

 

62.

Meaning of Participate

 

62.1

For the purposes of Articles 50, 59 and 60 in relation to physical general meetings, the right of a member to participate in the business of any general meeting shall include without limitation the right to speak, vote on a show of hands, vote on a poll, be represented by a proxy and have access to all documents which are required by the Companies Acts or these Articles to be made available at the meeting.

 

62.2

For the purposes of Articles 50, 59, 61 in relation to electronic general meetings, the right of a member to participate in the business of any general meetings shall include without limitation the right to speak, vote on a poll, be represented by a proxy and have access (including electronic access) to all documents which are required by the Companies Acts or these Articles to be made available at the meeting.

 

63.

Amendment to Resolutions

 

63.1

If an amendment to any resolution under consideration is proposed but is ruled out of order by the chairman of the meeting in good faith, any error in such ruling shall not invalidate the proceedings on the original resolution.

 

63.2

In the case of a resolution duly proposed as a special resolution, no amendment to it (other than an amendment to correct a patent error) may in any event be considered or voted on. In the case of a resolution duly proposed as an ordinary resolution no amendment to it (other than an amendment to correct a patent error) may be considered or voted on unless either at least 48 hours prior to the time appointed for holding the meeting or adjourned meeting at which such ordinary resolution is to be proposed, notice in writing of the terms of the amendment and intention to move the same has been lodged at the Office or received in electronic form at the electronic address at which the Company has or is deemed to have agreed to receive it or the chairman of the meeting in their absolute discretion decides that it may be considered or voted on.

 

 

 

 

64.

Members' Resolutions

 

64.1

Members of the Company shall have the rights provided by the Companies Acts to have the Company circulate and give notice of a resolution which may be properly moved, and is intended to be moved, at the Company's next annual general meeting.

 

64.2

Expenses of complying with these rights shall be borne in accordance with the Companies Acts.

 

65.

Method of Voting

 

65.1

At any general meeting a resolution put to a vote of the meeting shall be decided on a show of hands, unless (before or on the declaration of the result of the show of hands) a poll is duly demanded. Subject to the Companies Acts, a poll may be demanded by:

 

(a)

the chairman of the meeting; or

 

(b)

at least two members present in person (or by proxy) and entitled to vote at the meeting; or

 

(c)

a member or members present in person (or by proxy) representing at least one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

 

(d)

a member or members present in person (or by proxy) holding shares conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to at least one-tenth of the total sum paid up on all the shares conferring that right.

 

65.2

If so determined by the chairman of the meeting, resolutions put to the members at electronic general meetings may be voted on by a poll, which poll votes may be cast by such electronic means as the board in its sole discretion deems appropriate for the purposes of the meeting.

 

65.3

The chairman of the meeting may also demand a poll before a resolution is put to the vote on a show of hands.

 

65.4

At general meetings, resolutions shall be put to the vote by the chairman of the meeting and there shall be no requirement for the resolution to be proposed or seconded by any person.

 

65.5

Unless a poll is duly demanded and the demand is not withdrawn, a declaration by the chairman of the meeting that a resolution has on a show of hands been carried, or carried unanimously or by a particular majority, or lost, or not carried by a particular majority, and an entry to that effect in the book containing the minutes of proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against such resolution.

 

66.

Objection to Error in Voting

 

No objection shall be raised to the qualification of any voter or to the counting of, or failure to count, any vote, except at the meeting or adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that the same is of sufficient magnitude to vitiate the resolution or may otherwise have affected the decision of the meeting. The decision of the chairman of the meeting on such matters shall be final and conclusive.

 

 

 

 

67.

Procedure on a Poll

 

67.1

Any poll duly demanded on the election of a chairman or on any question of adjournment shall be taken immediately. A poll duly demanded on any other matter shall be taken in such manner (including the use of ballot or voting papers or tickets) and at such time and place or electronic platform, not more than 30 days from the date of the meeting or adjourned meeting at which the poll was demanded, as the chairman shall direct. The chairman may appoint scrutineers who need not be members. It is not necessary to give notice of a poll not taken immediately if the time and place at, or electronic platform on, which it is to be taken are announced at the meeting at which it is demanded. In any other case, at least seven clear days' notice shall be given specifying the time, date and place at, or electronic platform on, which the poll shall be taken. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.

 

67.2

The demand for a poll (other than on the election of a chairman or any question of adjournment) shall not prevent the continuance of the meeting for the transaction of any business other than the question on which a poll has been demanded.

 

67.3

The demand for a poll may, before the poll is taken, be withdrawn, but only with the consent of the chairman of the meeting. A demand so withdrawn validates the result of a show of hands declared before the demand was made. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the meeting shall continue as if the demand had not been made.

 

67.4

On a poll votes may be given in person or by proxy. A member entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.

 

68.

Votes of Members

 

68.1

Subject to Article 68.2, the Companies Acts, to any special terms as to voting on which any shares may have been issued or may for the time being be held and to any suspension or abrogation of voting rights under these Articles, at any general meeting every member who is present in person (or by proxy) shall on a show of hands have one vote and every member present in person (or by proxy) shall on a poll have one vote for each share of which they are the holder.

 

68.2

On a show of hands, a duly appointed proxy has one vote for and one vote against a resolution if the proxy has been appointed by more than one member entitled to vote on the resolution and the proxy has been instructed:

 

(a)

by one or more of those members to vote for the resolution and by one or more other of those members to vote against it; or

 

(b)

by one or more of those members to vote either for or against the resolution and by one or more other of those members to use his/her discretion as to how to vote.

 

68.3

If two or more persons are joint holders of a share, then in voting on any question the vote of the most senior joint holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose seniority shall be determined by the order in which the names of the holders stand in the Register.

 

 

 

 

68.4

Where in England or elsewhere a receiver or other person (by whatever name called) has been appointed by any court claiming jurisdiction in that behalf to exercise powers with respect to the property or affairs of any member on the ground (however formulated) of mental disorder, the Board may in its absolute discretion, upon or subject to production of such evidence of the appointment as the Board may require, permit such receiver or other person on behalf of such member to vote in person, on a show of hands or on a poll, by proxy on behalf of such member at any general meeting or to exercise any other right conferred by membership in relation to meetings of the Company. Evidence to the satisfaction of the Board of the authority of the person claiming to exercise the right to vote shall be deposited at the Office, or at such other place as is specified in accordance with these Articles for the deposit of instruments of proxy, at least 48 hours before the time appointed for holding the meeting or adjourned meeting at which the right to vote is to be exercised and, in default, the right to vote shall not be exercisable.

 

68.5

In the case of equality of votes whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded shall not be entitled to a casting vote.

 

69.

No Right to Vote Where Sums Overdue on Shares

 

No member may vote at a general meeting (or any separate meeting of the holders of any class of shares), either in person or by proxy, or to exercise any other right or privilege as a member in respect of a share held by them unless:

 

(a)

all calls or other sums presently due and payable by them in respect of that share whether alone or jointly with any other person together with interest and expenses (if any) have been paid to the Company; or

 

(b)

the Board determines otherwise.

 

70.

Voting by Proxy

 

70.1

Subject to Article 70.2, an instrument appointing a proxy shall be in writing in any usual form (or in another form approved by the Board) executed under the hand of the appointer or their duly constituted attorney or, if the appointer is a corporation, under its seal or signed by a duly authorised officer or attorney or other person authorised to sign.

 

70.2

Subject to the Companies Acts, the Board may accept the appointment of a proxy received by electronic means on such terms and subject to such conditions as it considers fit. The appointment of a proxy received by electronic means shall not be subject to the requirements of Article 70.1.

 

70.3

For the purposes of Articles 70.1 and 70.2, the Board may require such reasonable evidence it considers necessary to determine:

 

(a)

the identity of the member and the proxy; and

 

(b)

where the proxy is appointed by a person acting on behalf of the member, the authority of that person to make the appointment.

 

 

 

 

70.4

A member may appoint another person as their proxy to exercise all or any of their rights to attend and to speak and to vote (both on a show of hands and on a poll) on a resolution or amendment of a resolution, or on other business arising, at a meeting or meetings of the Company. Unless the contrary is stated in it, the appointment of a proxy shall be deemed to confer authority to exercise all such rights, as the proxy thinks fit.

 

70.5

A proxy need not be a member.

 

70.6

A member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to different shares held by the member. When two or more valid but differing appointments of proxy are delivered or received for the same share for use at the same meeting, the one which is last validly delivered or received (regardless of its date or the date of its execution) shall be treated as replacing and revoking the other or others as regards that share. If the Company is unable to determine which appointment was last validly delivered or received, none of them shall be treated as valid in respect of that share.

 

70.7

Delivery or receipt of an appointment of proxy does not prevent a member attending and voting in person at the meeting or an adjournment of the meeting or on a poll.

 

70.8

The appointment of a proxy shall (unless the contrary is stated in it) be valid for an adjournment of the meeting as well as for the meeting or meetings to which it relates. The appointment of a proxy shall be valid for 12 months from the date of execution or, in the case of an appointment of proxy delivered by electronic means, for 12 months from the date of delivery unless otherwise specified by the Board.

 

70.9

Subject to the Companies Acts, the Company may send a form of appointment of proxy to all or none of the persons entitled to receive notice of and to vote at a meeting. If sent, the form shall provide for three-way voting on all resolutions (other than procedural resolutions) set out in the notice of meeting.

 

71.

Receipt of Proxy

 

71.1

An instrument appointing a proxy and any reasonable evidence required by the Board in accordance with Article 70.3 shall:

 

(a)

subject to Articles 71.1(c) and (d), in the case of an instrument of proxy in hard copy form, delivered to the Office, or another place in the United Kingdom specified in the notice convening the meeting or in the form of appointment of proxy or other accompanying document sent by the Company in relation to the meeting (a proxy notification address) not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the form of appointment of proxy proposes to vote or by such later time as is specified in the notice or instrument;

 

(b)

subject to Articles 71.1(c) and (d), in the case of an appointment of a proxy sent by electronic means, where the Company has given an electronic address (a proxy notification electronic address):

 

(i)

in the notice calling the meeting;

 

 

 

 

(ii)

in an instrument of proxy sent out by or on behalf of the Company in relation to the meeting;

 

(iii)

in an invitation to appoint a proxy issued by or on behalf of the Company in relation to the meeting; or

 

(iv)

on a website maintained by or on behalf of the Company on which any information relating to the meeting is required by the Act to be kept,

 

it shall be received at such proxy notification electronic address not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the form of appointment of proxy proposes to vote or by such later time as is specified in any of the methods of notice in Articles 71.1(b)(i) to 71.1(b)(iv) above;

 

(c)

in the case of a poll taken more than 48 hours after it is demanded, delivered or received at a proxy notification address or a proxy notification electronic address and not less than 24 hours before the time appointed for the holding of the adjourned meeting or the taking of the poll; or

 

(d)

in the case of a poll which is not taken at the meeting at which it is demanded but is taken 48 hours or less after it is demanded, or in the case of an adjourned meeting to be held 48 hours or less after the time fixed for holding the original meeting, received:

 

(i)

at a proxy notification address or a proxy notification electronic address in accordance with Articles 71.1(a) or (b);

 

(ii)

by the chairman of the meeting or the secretary or any director at the meeting at which the poll is demanded or, as the case may be, at the original meeting; or

 

(iii)

at a proxy notification address or a proxy notification electronic address by such time as the chairman of the meeting may direct at the meeting at which the poll is demanded.

 

In calculating the periods in this Article, no account shall be taken of any part of a day that is not a working day.

 

71.2

The Board may decide, either generally or in any particular case, to treat a proxy appointment as valid notwithstanding that the appointment or any of the information required under Article 70.3 has not been received in accordance with the requirements of this Article.

 

71.3

Subject to Article 71.2, if the proxy appointment and any of the information required under Article 70.3 is not received in the manner set out in Article 71.1, the appointee shall not be entitled to vote in respect of the shares in question.

 

71.4

Without limiting the foregoing, in relation to any uncertificated shares, the Board may from time to time:

 

(a)

permit appointments of a proxy by means of a communication sent in electronic form in the form of an uncertificated proxy instruction; and

 

(b)

permit supplements to, or amendments or revocations of, any such uncertificated proxy instruction by the same means.

 

 

 

 

The Board may in addition prescribe the method of determining the time at which any such uncertificated proxy instruction is to be treated as received by the Company or a participant acting on its behalf. The Board may treat any such uncertificated proxy instruction which purports to be or is expressed to be sent on behalf of a holder of a share as sufficient evidence of the authority of the person sending that instruction to send it on behalf of that holder.

 

72.

Revocation of Proxy

 

A vote given or poll demanded by a proxy shall be valid in the event of the death or mental disorder of the principal or the revocation of the instrument of proxy, or of the authority under which the instrument of proxy was executed, or the transfer of the share for which the instrument of proxy is given, unless notice in writing of such death, mental disorder, revocation or transfer shall have been received by the Company at the Office, or at such other place as has been appointed for the deposit of instruments of proxy, no later than the last time at which an appointment of a proxy should have been received in order for it to be valid for use at the meeting or on the holding of the poll at which the vote was given or the poll taken.

 

73.

Corporate Representatives

 

73.1

A corporation (whether or not a company within the meaning of the Act) which is a member may, by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative (or, as the case may be, representatives) at any meeting of the Company or at any separate meeting of the holders of any class of shares.

 

73.2

Any person so authorised shall be entitled to exercise the same powers on behalf of the corporation (in respect of that part of the corporation's holdings to which the authority relates) as the corporation could exercise if it were an individual member.

 

73.3

The corporation shall for the purposes of these Articles be deemed to be present in person and at any such meeting if a person so authorised is present at it, and all references to attendance and voting in person shall be construed accordingly.

 

73.4

A Director, the Secretary or some person authorised for the purpose by the Secretary may require the representative to produce a certified copy of the resolution so authorising them or such other evidence of their authority reasonably satisfactory to them before permitting them to exercise their powers.

 

73.5

A vote given or a poll demanded by a corporate representative shall be valid notwithstanding that they are no longer authorised to represent the member unless notice of the revocation of appointment was delivered in writing to the Company at such place or address and by such time as is specified in Article 72 for the revocation of the appointment of a proxy.

 

 

 

 

 

74.

Failure to Disclose Interests in Shares

 

74.1

If a member, or any other person appearing to be interested in shares held by that member, has been issued with a notice under section 793 of the Act (section 793 notice) and has failed in relation to any shares (default shares, which expression includes any shares issued after the date of such notice in right of those shares) to give the Company the information required by the section 793 notice within the prescribed period from the service of the notice, the following sanctions shall apply unless the Board determines otherwise:

 

(a)

the member shall not be entitled in respect of the default shares to be present or to vote (either in person or by representative or proxy) at any general meeting or at any separate meeting of the holders of any class of shares or on any poll or to exercise any other right conferred by membership in relation to any such meeting or poll; and

 

(b)

where the default shares represent at least 0.25% in nominal value of the issued shares of their class (calculated exclusive of any shares held as treasury shares):

 

(i)

any dividend or other money payable for such shares shall be withheld by the Company, which shall not have any obligation to pay interest on it, and the member shall not be entitled to elect, pursuant to Article 132, to receive shares instead of that dividend; and

 

(ii)

no transfer, other than an excepted transfer, of any shares held by the member shall be registered unless the member themself is not in default of supplying the required information and the member proves to the satisfaction of the Board that no person in default of supplying such information is interested in any of the shares that are the subject of the transfer.

 

For the purposes of ensuring Article 74.1(b)(ii) can apply to all shares held by the member, the Company may in accordance with the uncertificated securities rules, issue a written notification to the Operator requiring conversion into certificated form of any share held by the member in uncertificated form.

 

74.2

Where the sanctions under Article 74.1 apply in relation to any shares, they shall cease to have effect (and any dividends withheld under Article 74.1(b) shall become payable):

 

(a)

if the shares are transferred by means of an excepted transfer but only in respect of the shares transferred; or

 

(b)

at the end of the period of seven days (or such shorter period as the Board may determine) following receipt by the Company of the information required by the section 793 notice and the Board being fully satisfied that such information is full and complete.

 

74.3

Where, on the basis of information obtained from a member in respect of any share held by them, the Company issues a section 793 notice to any other person, it shall at the same time send a copy of the notice to the member, but the accidental omission to do so, or the non-receipt by the member of the copy, shall not invalidate or otherwise affect the application of Article 74.1.

 

 

 

 

74.4

For the purposes of this Article 74:

 

(a)

a person, other than the member holding a share, shall be treated as appearing to be interested in that share if the member has informed the Company that the person is, or may be, so interested, or if the Company (after taking account of any information obtained from the member or, pursuant to a section 793 notice, from anyone else) knows or has reasonable cause to believe that the person is, or may be, so interested;

 

(b)

interested shall be construed as it is for the purpose of section 793 of the Act;

 

(c)

reference to a person having failed to give the Company the information required by a notice, or being in default as regards supplying such information, includes reference:

 

(i)

to them having failed or refused to give all of any part of it; and

 

(ii)

to them having given information which they know to be false in a material particular or having recklessly given information which is false in a material particular;

 

(d)

prescribed period means 14 days;

 

(e)

excepted transfer means, in relation to any shares held by a member:

 

(i)

a transfer by way of or pursuant to acceptance of a takeover offer for the Company (within the meaning of section 974 of the Act); or

 

(ii)

a transfer in consequence of a sale made through a recognised investment exchange (as defined in section 285 of the FSMA) or any other stock exchange outside the United Kingdom on which the Company's shares or depositary instruments representing such shares are normally traded; or

 

(iii)

a transfer which is shown to the satisfaction of the Board to be made in consequence of a sale of the whole of the beneficial interest in the shares to a person who is unconnected with the member and with any other person appearing to be interested in the shares.

 

74.5

Nothing contained in this Article 74 shall be taken to limit the powers of the Company under section 794 of the Act.

 

75.

Power of Sale of Shares of Untraced Members

 

75.1

The Company shall be entitled to sell at the best price reasonably obtainable any share of a member, or any share to which a person is entitled by transmission, if and provided that:

 

 

 

 

(a)

during the period of 12 years before the date of sending of the notice referred to in Article 75.1(b) no cheque, order or warrant in respect of such share sent by the Company through the post in a pre-paid envelope addressed to the member or to the person entitled by transmission to the share, at their address on the Register or other last known address given by the member or person to which cheques, orders or warrants in respect of such share are to be sent has been cashed and the Company has received no communications in respect of such share from such member or person entitled, provided that during such period of 12 years the Company has paid at least three cash dividends (whether interim or final) and no such dividend has been claimed by the person entitled to it;

 

(b)

on or after expiry of the said period of 12 years, the Company has given notice of its intention to sell such share by sending a notice to the member or person entitled by transmission to the share at their address on the Register or other last known address given by the member or person entitled by transmission to the share and before sending such a notice to the member or other person entitled by transmission, the Company must have used reasonable efforts to trace the member or other person entitled, engaging, if considered appropriate, a professional asset reunification company or other tracing agent and/or giving notice of its intention to sell the share by advertisement in a national newspaper and in a newspaper circulating in the area of the address of the member or person entitled by transmission to the share shown in the Register;

 

(c)

during the further period of three months following the date of such notice and prior to the exercise of the power of sale the Company has not received any communication in respect of such share from the member or person entitled by transmission; and

 

(d)

the Company has given notice to Nasdaq of its intention to make such sale, if shares of the class concerned, or certificated or uncertificated depositary instruments over such shares, are listed on Nasdaq or dealt in on any other recognised stock exchange on which the shares are listed.

 

75.2

To give effect to any sale of shares under this Article 75, the Board may authorise some person to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the Register even if no share certificate has been lodged for such shares and may issue a new certificate to the transferee. An instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of or the person entitled by transmission to, the shares. The buyer shall not be bound to see to the application of the purchase monies, nor shall their title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. If the shares are in uncertificated form, in accordance with the uncertificated securities rules, the Board may issue a written notification to the Operator requiring the conversion of the share to certificated form.

 

75.3

If during the period of 12 years referred to in Article 75.1, or during any period ending on the date when all the requirements of Articles 75.1(a) to 75.1(d) have been satisfied, any additional shares have been issued in respect of those held at the beginning of, or previously so issued during, any such period and all the requirements of Articles 75.1(b) to 75.1(d) have been satisfied in regard to such additional shares, the Company shall also be entitled to sell the additional shares.

 

 

 

 

76.

Application of Proceeds of Sale of Shares of Untraced Members

 

The Company shall account to the member or other person entitled to the share for the net proceeds of a sale under Article 75 by carrying all monies relating to such sale to a separate account. The Company shall be deemed to be a debtor to, and not a trustee for, such member or other person in respect of such monies. Monies carried to such separate account may either be employed in the business of the Company or invested in such investments as the Board may think fit. No interest shall be payable to such member or other person in respect of such monies and the Company does not have to account for any money earned on them.

 

77.

Number of Directors

 

Unless otherwise determined by the Company by ordinary resolution, the number of Directors (other than any alternate Directors) shall be at least two but shall not be subject to any maximum number.

 

78.

Power of Company to Appoint Directors

 

Subject to these Articles and the Companies Acts, the Company may by ordinary resolution appoint a person who is willing to act to be a Director, either to fill a vacancy or as an addition to the existing Board but the total number of Directors shall not exceed any maximum number fixed in accordance with these Articles.

 

79.

Power of Board to Appoint Directors

 

79.1

Subject to these Articles, the Board shall have power at any time to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition to the existing Board but the total number of Directors shall not exceed any maximum number fixed in accordance with these Articles.

 

79.2

A Director so appointed shall hold office only until:

 

(a)

the next annual general meeting following their appointment, when they shall retire, but shall then be eligible for re-election and a Director so retiring shall not be taken into account in determining the number of Directors to retire by rotation at such meeting in accordance with Article 81; or

 

(b)

his earlier resignation or removal in accordance with these Articles.

 

80.

Eligibility of New Directors

 

80.1

No person, other than a retiring Director (by rotation or otherwise), shall be appointed or re-appointed a Director at any general meeting unless:

 

(a)

they are recommended by the Board; or

 

(b)

at least seven but not more than 42 clear days before the date appointed for the meeting the Company has received notice from a member (other than the person proposed) entitled to vote at the meeting of their intention to propose a resolution for the appointment or re-appointment of that person, stating the particulars which would, if they were so appointed or re-appointed, be required to be included in the Company's register of Directors and a notice executed by that person of their willingness to be appointed or re-appointed, is lodged at the Office.

 

 

 

 

80.2

A Director need not be a member of the Company.

 

81.

Classes and Retirement of Directors

 

81.1

Following the Listing, the Directors shall be divided into three classes designated as "Class I", "Class II" and "Class III", respectively. The Board is authorised to assign (i) members of the Board already in office such classes at the time the classification becomes effective and (ii) members of the Board who are appointed following the Listing, such classes at the time of such appointment.

 

81.2

At the first annual general meeting of the Company following the Listing, each Director in Class I shall retire from office but shall be eligible for re-appointment by ordinary resolution at such annual general meeting and, in each case, where such Director is so re-appointed, they shall be entitled to serve until the third anniversary of such annual general meeting of the Company, at which stage such Director shall retire from office but shall be eligible for further re-appointment.

 

81.3

At the second annual general meeting of the Company following the Listing, each Director in Class II shall retire from office but shall be eligible for re-appointment by ordinary resolution at such annual general meeting and, in each case, where such Director is so re-appointed, they shall be entitled to serve until the third anniversary of such annual general meeting of the Company, at which stage such Director shall retire from office but shall be eligible for further re-appointment.

 

81.4

At the third annual general meeting of the Company following the Listing, each Director in Class III shall retire from office but shall be eligible for re-appointment by ordinary resolution at such annual general meeting and, in each case, where such Director is so re-appointed, they shall be entitled to serve until the third anniversary of such annual general meeting of the Company, at which stage such Director shall retire from office but shall be eligible for further re-appointment.

 

81.5

At each succeeding annual general meeting of the Company following the third annual general meeting of the Company after the Listing, Directors shall be elected to serve for a term of three years to succeed the Directors of the class whose terms expire at such annual general meeting.

 

81.6

Notwithstanding the foregoing provisions, each Director shall serve until their successor is duly elected and qualified or until their earlier death, resignation or removal.

 

82.

Deemed Re-Appointment

 

82.1

A Director who retires at an annual general meeting shall (unless they are removed from office or their office is vacated in accordance with these Articles) retain office until the close of the meeting at which they retire or (if earlier) when a resolution is passed at that meeting not to fill the vacancy or to elect another person in their place or the resolution to re-appoint them is put to the meeting and lost.

 

82.2

If the Company, at any meeting at which a Director retires in accordance with these Articles does not fill the office vacated by such Director, the retiring Director, if willing to act, shall be deemed to be re-appointed unless at that meeting a resolution is passed not to fill the vacancy or elect another person in their place or unless the resolution to re-appoint them is put to the meeting and lost.

 

 

 

 

83.

Procedure if Insufficient Directors Appointed

 

83.1

If:

 

(a)

at the annual general meeting in any year any resolution or resolutions for the appointment or re-appointment of the persons eligible for appointment or re- appointment as Directors are put to the meeting and lost; and

 

(b)

at the end of that meeting the number of Directors is fewer than any minimum number of Directors required under Article 77,

 

all retiring Directors who stood for re-appointment at that meeting (Retiring Directors) shall be deemed to have been re-appointed as Directors and shall remain in office but the Retiring Directors may only act for the purpose of filling vacancies, convening general meetings of the Company and performing such duties as are essential to maintain the Company as a going concern, and not for any other purpose.

 

83.2

The Retiring Directors shall convene a general meeting as soon as reasonably practicable following the meeting referred to in Article 83.1 and they shall retire from office at that meeting. If at the end of any meeting convened under this Article the number of Directors is fewer than any minimum number of Directors required under Article 77, the provisions of this Article shall also apply to that meeting.

 

84.

Removal of Directors

 

In addition to any power of removal conferred by the Companies Acts, the Company may by special resolution, or by ordinary resolution of which special notice has been given in accordance with section 312 of the Act, remove a Director before the expiry of their period of office (without prejudice to a claim for damages for breach of contract or otherwise) and may (subject to these Articles) by ordinary resolution appoint another person who is willing to act to be a Director in their place.

 

85.

Vacation of Office by Director

 

85.1

Without prejudice to the provisions for retirement (by rotation or otherwise) contained in these Articles, the office of a Director shall be vacated if:

 

(a)

the Director resigns by notice in writing delivered to the Secretary at the Office or at an address specified by the Company for the purposes of communication by electronic means or tendered at a Board meeting;

 

(b)

the Director offers to resign by notice in writing delivered to the Secretary at the Office or at an address specified by the Company for the purposes of communication by electronic means or tendered at a Board meeting and the Board resolves to accept such offer;

 

(c)

the Director is requested to resign by all of the other Directors by notice in writing addressed to them at their address as shown in the register of Directors (without prejudice to any claim for damages which they may have for breach of any contract between themselves and the Company);

 

 

 

 

(d)

the Director ceases to be a Director by virtue of any provision of the Companies Acts, is removed from office pursuant to these Articles or the Act or becomes prohibited by law or by the rules of any applicable stock exchange from being a Director;

 

(e)

the Director becomes bankrupt or makes an arrangement or composition with their creditors generally;

 

(f)

a registered medical practitioner who is treating that Director gives a written opinion to the Company stating that that Director has become physically or mentally incapable of acting as a Director and may remain so for more than three months, or they are or have been suffering from mental or physical ill health and the Board resolves that their office be vacated; or

 

(g)

the Director is absent (whether or not their alternate Director appointed by them attends), without the permission of the Board, from Board meetings for six consecutive months and a notice is served on them personally, or at their residential address provided to the Company under section 165 of the Act signed by all the other Directors stating that they shall cease to be a Director with immediate effect (and such notice may consist of several copies each signed by one or more Directors).

 

85.2

If the office of a Director is vacated for any reason, they shall cease to be a member of any committee or sub-committee of the Board.

 

86.

Resolution as to Vacancy Conclusive

 

A resolution of the Board declaring a Director to have vacated office under the terms of Article 85 shall be conclusive as to the fact and ground of vacation stated in the resolution.

 

87.

Appointment of Alternate Directors

 

87.1

Each Director may appoint any person (including another Director) to be their alternate and may at their discretion remove an alternate Director so appointed. Any appointment or removal of an alternate Director must be by written notice delivered to the Office or at an address specified by the Company for the purposes of communication by electronic means or tendered at a Board meeting or in any other manner approved by the Board. The appointment requires the approval of the Board unless it has been previously approved or the appointee is another Director.

 

87.2

An alternate Director must provide the particulars, and sign any form for public filing required by the Companies Acts relating to their appointment.

 

88.

Alternate Directors' Participation in Board Meetings

 

88.1

Every alternate Director is (subject to them giving to the Company an address within the United Kingdom at which notices may be served on them (and, if applicable, an address in relation to which electronic communications may be received by them)) entitled to receive notice of all meetings of the Board and all committees of the Board of which their appointor is a member and, in their appointor's absence, to attend and vote at such meetings and to exercise all the powers, rights, duties and authorities of their appointor. Each person acting as an alternate Director shall have a separate vote at Board meetings for each Director for whom they act as alternate Director in addition to their own vote if they are also a Director, but they shall count as only one for the purpose of determining whether a quorum is present.

 

 

 

 

88.2

Signature by an alternate Director of any resolution in writing of the Board or a committee of the Board will, unless the notice of their appointment provides otherwise, be as effective as signature by their appointor.

 

89.

Alternate Directors Responsible for Own Acts

 

Each person acting as an alternate Director will be an officer of the Company, will alone be responsible to the Company for their own acts and defaults and will not be deemed to be the agent of the Director appointing them.

 

90.

Interests of Alternate Director

 

An alternate Director is entitled to contract and be interested in and benefit from contracts or arrangements with the Company, to be repaid expenses and to be indemnified to the same extent as if they were a Director. However, they are not entitled to receive from the Company any fees for their services as alternate, except such part (if any) of the fee payable to their appointor as such appointor may by written notice to the Company direct.

 

91.

Revocation of Alternate Director

 

An alternate Director will cease to be an alternate Director:

 

(a)

if their appointor revokes their appointment; or

 

(b)

if they resign their office by notice in writing to the Company; or

 

(c)

if their appointor ceases for any reason to be a Director, provided that if any Director retires but is re-appointed or deemed to be re-appointed at the same meeting, any valid appointment of an alternate Director which was in force immediately before their retirement shall remain in force; or

 

(d)

if any event happens in relation to them which, if they were a Director otherwise appointed, would cause them to vacate their office.

 

92.

Arrangements with Non-Executive Directors

 

Subject to the provisions of the Act, the Board may enter into, vary and terminate an agreement or arrangement with any Director who does not hold executive office for the provision of his services to the Company. Any such agreement or arrangement may be made on such terms as the Board determines (including as to fees), provided that the terms of any such agreement comply with the requirements of Nasdaq (including the Nasdaq Rules) and applicable law. Any fees payable under this Article 92 shall be distinct from any salary, remuneration or other amounts payable to a Director under any other provisions of these Articles and shall accrue from day to day.

 

 

 

 

93.

Expenses

 

Each Director may be paid their reasonable travelling, hotel and other expenses properly incurred by them in or about the performance of their duties as Director, including any expenses incurred in attending meetings of the Board or any committee of the Board or general meetings or separate meetings of the holders of any class of shares or debentures of the Company. Subject to the Act, the Directors shall have the power to make arrangements to provide a Director with funds to meet expenditure incurred or to be incurred by them for the purposes of the Company or for the purpose of enabling them to perform their duties as an officer of the Company or to enable them to avoid incurring any such expenditure.

 

94.

Additional Remuneration

 

If by arrangement with the Board any Director shall perform or render any special duties or services outside their ordinary duties as a Director and not in their capacity as a holder of employment or executive office, they may be paid such reasonable additional remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine.

 

95.

Remuneration of Executive Directors

 

The salary or remuneration of any Director appointed to hold any employment or executive office in accordance with these Articles may be either a fixed sum of money, or may altogether or in part be governed by business done or profits made or otherwise determined by the Board, and may be in addition to or instead of any fee payable to them for their services as Director under these Articles.

 

96.

Pensions and Other Benefits

 

96.1

The Board may exercise all the powers of the Company to provide pensions or other retirement or superannuation benefits and to provide death or disability benefits or other allowances or gratuities (whether by insurance or otherwise) for any person who is or has at any time been a Director or employee of:

 

(a)

the Company;

 

(b)

any company which is or was a holding company or a subsidiary undertaking of the Company;

 

(c)

any company which is or was allied to or associated with the Company or a subsidiary undertaking or holding company of the Company; or

 

(d)

a predecessor in business of the Company or of any holding company or subsidiary undertaking of the Company,

 

and, in each case, for any member of their family (including a spouse or former spouse) and any person who is or was dependent on them.

 

96.2

The Board may establish, maintain, subscribe and contribute to any scheme, institution, association, club, trust or fund and pay premiums and, subject to the Companies Acts, lend money or make payments to, guarantee or give an indemnity in respect of, or give any financial or other assistance in connection with any of the matters set out in Article 96.1 above. The Board may procure any of such matters to be done by the Company either alone or in conjunction with any other person. Any Director or former Director shall be entitled to receive and retain for their own benefit any pension or other benefit provided under this Article and shall not have to account for it to the Company. The receipt of any such benefit will not disqualify any person from being or becoming a Director of the Company.

 

 

 

 

97.

Powers of the Board

 

97.1

Subject to the Companies Acts, these Articles and to any directions given by special resolution of the Company, the business of the Company will be managed by the Board, which may exercise all the powers of the Company, whether relating to the management of the business or not.

 

97.2

No alteration of these Articles and no such direction given by the Company shall invalidate any prior act of the Board which would have been valid if such alteration had not been made or such direction had not been given. Provisions contained elsewhere in these Articles as to any specific power of the Board shall not be deemed to limit the general powers given by this Article 97.

 

98.

Powers of Directors if Less Than Minimum Number

 

If the number of Directors is less than the minimum prescribed in Article 77 or decided by the Company by ordinary resolution, the remaining Director or Directors may act only for the purposes of appointing an additional Director or Directors to make up that minimum or convening a general meeting of the Company for the purpose of making such appointment. If no Director or Directors is or are able or willing to act, a general meeting may be convened in accordance with these Articles for the purpose of appointing Directors. An additional Director appointed in this way holds office (subject to these Articles) only until the dissolution of the next annual general meeting after their appointment unless they are reappointed during the annual general meeting.

 

99.

Powers of Executive Directors

 

The Board or any committee authorised by the Board may:

 

(a)

delegate or entrust to and confer on any Director holding executive office (including a chief executive or managing director, if appointed) such of its powers, authorities and discretions (with power to sub-delegate) for such time, on such terms and subject to such conditions as it thinks fit; and

 

(b)

revoke, withdraw, alter or vary all or any of such powers.

 

100.

Delegation to Committees

 

100.1

The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) for such time on such terms and subject to such conditions as it thinks fit to any committee consisting of one or more Directors and (if thought fit) one or more other persons provided that:

 

(a)

a majority of the members of a committee shall be Directors; and

 

(b)

no resolution of a committee shall be effective unless a majority of those present when it is passed are Directors or alternate Directors.

 

 

 

 

100.2

The Board may confer such powers either collaterally with, or to the exclusion of and in substitution for, all or any of the powers of the Board in that respect and may revoke, withdraw, alter or vary any such powers and discharge any such committee in whole or in part. Insofar as any power, authority or discretion is so delegated, any reference in these Articles to the exercise by the Board of such power, authority or discretion shall be construed as if it were a reference to the exercise of such power, authority or discretion by such committee.

 

101.

Local Management

 

101.1

The Board may establish any local or divisional boards or agencies for managing any of the affairs of the Company in any specified locality, either in the United Kingdom or elsewhere, and appoint any persons to be members of such local or divisional board, or any managers or agents, and may fix their remuneration.

 

101.2

The Board may delegate to any local or divisional board, manager or agent so appointed any of its powers, authorities and discretions (with power to sub-delegate) and may authorise the members of any such local or divisional board, or any of them, to fill any vacancies and to act notwithstanding vacancies. Any such appointment or delegation under this Article 101 may be made, on such terms and conditions as the Board may think fit. The Board may confer such powers either collaterally with, or to the exclusion of and in substitution for, all or any of the powers of the Board in that respect and may revoke, withdraw, alter or vary all or any of such powers.

 

101.3

Subject to any terms and conditions expressly imposed by the Board, the proceedings of any local or divisional board or agency with two or more members shall be governed by such of these Articles as regulate the proceedings of the Board, so far as they are capable of applying.

 

102.

Board Meetings

 

102.1

The Board can decide when and where to have meetings and how they will be conducted. They may also adjourn meetings.

 

102.2

A Board meeting can be called by any Director. The Secretary must call a Board meeting if asked to do so by a Director.

 

103.

Notice of Board Meetings

 

103.1

Notice of a Board meeting shall be deemed to be duly given to a Director if it is given to them personally or by word of mouth or given in writing or by electronic means to them at their last known address or any other address given by them to the Company for that purpose.

 

103.2

A Director may waive the requirement that notice be given to them of any Board meeting, either prospectively or retrospectively and any retrospective waiver shall not affect the validity of the meeting or of any business conducted at the meeting.

 

104.

Quorum

 

104.1

The quorum necessary for the transaction of business may be determined by the Board (but shall be no less than two persons) and until otherwise determined shall be two persons, each being a Director or an alternate Director. A duly convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers, and discretions for the time being vested in or exercisable by the Board.

 

 

 

 

104.2

If a Director ceases to be a Director at a Board meeting, they can continue to be present and to act as a Director and be counted in the quorum until the end of the meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

 

105.

Chairman

 

105.1

The Board may appoint one or more of its body as chairman or joint chairman and one or more of its body as deputy chairman of its meetings and may determine the period for which they are to hold office and may at any time remove them from office.

 

105.2

If no such chairman or deputy chairman is elected, or if at any meeting neither a chairman nor a deputy chairman is present within ten minutes of the time appointed for holding the same, the Directors present shall choose one of their number to be chairman of such meeting. In the event two or more joint chairmen or, in the absence of a chairman, two or more deputy chairman being present, the joint chairman or deputy chairman to act as chairman of the meeting shall be decided by those Directors present.

 

106.

Voting

 

Questions arising at any Board meeting shall be determined by a majority of votes. In the case of an equality of votes the chairman of that meeting shall have a second or casting vote (unless they are not entitled to vote on the resolution in question).

 

107.

Participation by Telephone or Other Form of Communication

 

107.1

Any Director or their alternate may validly participate in a meeting of the Board or a committee of the Board through the medium of conference telephone or any other form of communications equipment (whether in use when these Articles are adopted or developed subsequently), provided that all persons participating in the meeting are able to hear and speak to each other throughout such meeting.

 

107.2

A person so participating by telephone or other communication shall be deemed to be present in person at the meeting and shall be counted in a quorum and entitled to vote. Such a meeting shall be deemed to take place where the largest group of those participating is assembled or, if there is no group which is larger than any other group, where the chairman of the meeting then is.

 

107.3

A resolution passed at any meeting held in the above manner, and signed by the chairman of the meeting, shall be as valid and effectual as if it had been passed at a meeting of the Board (or committee, as the case may be) duly convened and held.

 

108.

Resolution in Writing

 

108.1

A resolution in writing signed or confirmed electronically by all the Directors for the time being entitled to receive notice of a Board meeting and to vote on the resolution and not being less than a quorum (or by all the members of a committee of the Board for the time being entitled to receive notice of such committee meeting and to vote on the resolution and not being less than a quorum of that committee), shall be as valid and effective for all purposes as a resolution duly passed at a meeting of the Board (or committee, as the case may be).

 

 

 

 

108.2

Such a resolution may consist of several documents or electronic communications in the same form each signed or authenticated by one or more of the Directors or members of the relevant committee.

 

109.

Proceedings of Committees

 

All committees of the Board shall, in the exercise of the powers delegated to them and in the transaction of business, conform with any mode of proceedings and regulations which the Board may prescribe and subject to this shall be governed by such of these Articles as regulate the proceedings of the Board as are capable of applying.

 

110.

Minutes of Proceedings

 

110.1

The Board shall keep minutes of all shareholder meetings, all Board meetings and meetings of committees of the Board. The minutes must include the names of the Directors present.

 

110.2

Any such minutes, if purporting to be signed by the chairman of the meeting at which the proceedings were held or by the chairman of the next meeting or the Secretary, shall be evidence of the matters stated in such minutes without any further proof.

 

111.

Validity of Proceedings

 

All acts done by a meeting of the Board, or of a committee of the Board, or by any person acting as a Director, alternate Director or member of a committee shall be valid even if it is discovered afterwards that there was some defect in the appointment of any person or persons acting, or that they or any of them were or was disqualified from holding office or not entitled to vote, or had in any way vacated their office.

 

112.        Transactions or Other Arrangements With the Company

 

112.1

Subject to the Companies Acts and provided they have declared the nature and extent of their interest in accordance with the requirements of the Companies Acts, a Director who is in any way, whether directly or indirectly, interested in an existing or proposed transaction or arrangement with the Company may:

 

(a)

be a party to, or otherwise interested in, any transaction or arrangement with the Company or in which the Company is otherwise (directly or indirectly) interested;

 

(b)

act by themselves or through their firm in a professional capacity for the Company (otherwise than as auditor) and they shall be entitled to remuneration for professional services as if they were not a Director;

 

(c)

be or become a director or other officer of, or employed by, or a party to a transaction or arrangement with, or otherwise interested in, any body corporate in which the Company is otherwise (directly or indirectly) interested; and

 

(d)

hold any office or place of profit with the Company (except as auditor) in conjunction with their office of Director for such period and upon such terms, including as to remuneration as the Board may decide.

 

 

 

 

112.2

A Director shall not, save as they may otherwise agree, be accountable to the Company for any benefit which they derive from any such contract, transaction or arrangement or from any such office or employment or from any interest in any such body corporate and no such contract, transaction or arrangement shall be liable to be avoided on the grounds of any such interest or benefit nor shall the receipt of any such remuneration or other benefit constitute a breach of their duty under section 176 of the Act.

 

113.

Authorisation of Directors' Conflicts of Interest

 

113.1

The Board may, in accordance with the requirements set out in this Article 113, authorise any matter or situation proposed to them by any Director which would, if not authorised, involve a Director (an Interested Director) breaching their duty under the Act to avoid conflicts of interest.

 

113.2

A Director seeking authorisation in respect of a conflict of interest shall declare to the Board the nature and extent of their interest in a conflict of interest as soon as is reasonably practicable. The Director shall provide the Board with such details of the matter as are necessary for the Board to decide how to address the conflict of interest together with such additional information as may be requested by the Board.

 

113.3

Any authorisation under this Article 113 will be effective only if:

 

(a)

to the extent permitted by the Act, the matter in question shall have been proposed by any Director for consideration in the same way that any other matter may be proposed to the Directors under the provisions of these Articles;

 

(b)

any requirement as to the quorum for consideration of the relevant matter is met without counting the Interested Director and any other interested Director; and

 

(c)

the matter is agreed to without the Interested Director voting or would be agreed to if the Interested Director's and any other interested Director's vote is not counted.

 

113.4

Any authorisation of a conflict of interest under this Article 113 must be recorded in writing (but the authority shall be effective whether or not the terms are so recorded) and may (whether at the time of giving the authorisation or subsequently):

 

(a)

extend to any actual or potential conflict of interest which may reasonably be expected to arise out of the matter or situation so authorised;

 

(b)

provide that the Interested Director be excluded from the receipt of documents and information and the participation in discussions (whether at meetings of the Directors or otherwise) related to the conflict of interest;

 

(c)

impose upon the Interested Director such other terms for the purposes of dealing with the conflict of interest as the Directors think fit;

 

 

 

 

(d)

provide that, where the Interested Director obtains, or has obtained (through their involvement in the conflict of interest and otherwise than through their position as a Director) information that is confidential to a third party, they will not be obliged to disclose that information to the Company, or to use it in relation to the Company's affairs where to do so would amount to a breach of that confidence; and

 

(e)

permit the Interested Director to absent themselves from the discussion of matters relating to the conflict of interest at any meeting of the Directors and be excused from reviewing papers prepared by, or for, the Directors to the extent they relate to such matters.

 

113.5

Where the Directors authorise a conflict of interest, the Interested Director will be obliged to conduct themselves in accordance with any terms and conditions imposed by the Directors in relation to the conflict of interest.

 

113.6

The Directors may revoke or vary such authorisation at any time, but this will not affect anything done by the Interested Director, prior to such revocation or variation, in accordance with the terms of such authorisation.

 

113.7

A Director is not required, by reason of being a Director (or because of the fiduciary relationship established by reason of being a Director), to account to the Company for any remuneration, profit or other benefit which they derive from or in connection with a relationship involving a conflict of interest which has been authorised by the directors or by the Company in general meeting (subject in each case to any terms, limits or conditions attaching to that authorisation) and no contract shall be liable to be avoided on such grounds.

 

113.8

A Director’s receipt of any remuneration or other benefit referred to in Article 113.7 does not constitute an infringement of their duties under the Act.

 

113.9

A transaction or arrangement referred to in Article 113.7 is not liable to be avoided on the ground of any remuneration, benefit or interest referred to in that Article.

 

114.        Directors' Permitted Interests

 

114.1

A Director cannot vote or be counted in the quorum on any resolution relating to any transaction or arrangement with the Company in which they have an interest and which may reasonably be regarded as likely to give rise to a conflict of interest but can vote (and be counted in the quorum) on the following:

 

(a)

giving them any security, guarantee or indemnity for any money or any liability which they, or any other person, has lent or obligations they or any other person has undertaken at the request, or for the benefit, of the Company or any of its subsidiary undertakings;

 

(b)

giving any security, guarantee or indemnity to any other person for a debt or obligation which is owed by the Company or any of its subsidiary undertakings, to that other person if the Director has taken responsibility for some or all of that debt or obligation. The Director can take this responsibility by giving a guarantee, indemnity or security;

 

 

 

 

(c)

a proposal or contract relating to an offer of any shares or debentures or other securities for subscription or purchase by the Company or any of its subsidiary undertakings, if the Director takes part because they are a holder of shares, debentures or other securities, or if they take part in the underwriting or sub- underwriting of the offer;

 

(d)

any arrangement for the benefit of employees of the Company or any of its subsidiary undertakings which only gives them benefits which are also generally given to employees to whom the arrangement relates;

 

(e)

any arrangement involving any other company if the Director (together with any person connected with the Director) has an interest of any kind in that company (including an interest by holding any position in that company or by being a shareholder of that company). This does not apply if they know that they have a Relevant Interest;

 

(f)

a contract relating to insurance which the Company can buy or renew for the benefit of the Directors or a group of people which includes Directors; and

 

(g)

a contract relating to a pension, superannuation or similar scheme or a retirement, death, disability benefits scheme or employees' share scheme which gives the Director benefits which are also generally given to the employees to whom the scheme relates.

 

114.2

A Director cannot vote or be counted in the quorum on a resolution relating to their own appointment or the settlement or variation of the terms of their appointment to an office or place of profit with the Company or any other company in which the Company has an interest.

 

114.3

Where the Directors are considering proposals about the appointment, or the settlement or variation of the terms or the termination of the appointment of two or more Directors to other offices or places of profit with the Company or any company in which the Company has an interest, a separate resolution may be put in relation to each Director and in that case each of the Directors concerned shall be entitled to vote and be counted in the quorum in respect of each resolution unless it concerns their own appointment or the settlement or variation of the terms or the termination of their own appointment or the appointment of another director to an office or place of profit with a company in which the Company has an interest and the Director seeking to vote or be counted in the quorum has a Relevant Interest in it.

 

114.4

A company shall be deemed to be one in which the Director has a Relevant Interest if and so long as (but only if and so long as) they are to their knowledge (either directly or indirectly) the holder of or beneficially interested in one per cent or more of any class of the equity share capital of that company (calculated exclusive of any shares of that class in that company held as treasury shares) or of the voting rights available to members of that company. In relation to an alternate Director, an interest of their appointor shall be treated as an interest of the alternate Director without prejudice to any interest which the alternate Director has otherwise. Where a company in which a Director has a Relevant Interest is interested in a contract, they also shall be deemed interested in that contract.

 

114.5

If a question arises at a Board meeting about whether a Director (other than the chairman of the meeting) has an interest which is likely to give rise to a conflict of interest, or whether they can vote or be counted in the quorum, and the Director does not agree to abstain from voting on the issue or not to be counted in the quorum, the question must be referred to the chairman of the meeting. The chairman's ruling about the relevant Director is final and conclusive, unless the nature and extent of the Director's interests have not been fairly disclosed to the Directors. If the question arises about the chairman of the meeting, the question must be directed to the Directors. The chairman cannot vote on the question but can be counted in the quorum. The Directors' resolution about the chairman is final and conclusive, unless the nature and extent of the chairman's interests have not been fairly disclosed to the Directors.

 

 

 

 

115.

General

 

115.1

For the purposes of Articles 112 to 114 inclusive (which shall apply equally to alternate Directors):

 

(a)

An interest of a person who is connected (which word shall have the meaning given to it by section 252 of the Act) with a Director shall be treated as an interest of the Director.

 

(b)

A contract includes references to any proposed contract and to any transaction or arrangement or proposed transaction or arrangement whether or not constituting a contract.

 

(c)

A conflict of interest includes a conflict of interest and duty and a conflict of duties.

 

(d)

Subject to the Companies Acts, the Company may by ordinary resolution suspend or relax the provisions of Articles 112 to 114 to any extent or ratify any contract not properly authorised by reason of a contravention of any of the provisions of Articles 112 to 114.

 

116.

Power of Attorney

 

The Board may, by power of attorney or otherwise, appoint any person or persons to be the agent or attorney of the Company and may delegate to any such person or persons any of its powers, authorities and discretions (with power to sub-delegate), in each case for such purposes and for such time, on such terms (including as to remuneration) and conditions as it thinks fit. The Board may confer such powers either collaterally with, or to the exclusion of and in substitution for, all or any of the powers of the Board in that respect and may revoke, withdraw, alter or vary any of such powers.

 

117.

Exercise of Voting Power

 

The Board may exercise or cause to be exercised the voting power conferred by the shares in any other company held or owned by the Company, or any power of appointment to be exercised by the Company, in such manner as it thinks fit (including the exercise of the voting power or power of appointment in favour of the appointment of any Director as a director or other officer or employee of such company or in favour of the payment of remuneration to the directors, officers or employees of such company).

 

118.

Provision for Employees on Cessation of Business

 

The Board may, by resolution, sanction the exercise of the power to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiary undertakings, in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the Company or that subsidiary undertaking, but any such resolution shall not be sufficient for payments to or for the benefit of directors, former directors or shadow directors.

 

 

 

119.

Overseas Registers

 

Subject to the Companies Acts, the Company may keep an overseas, local or other register and the Board may make and vary such regulations as it thinks fit respecting the keeping of any such register.

 

120.

Borrowing Powers

 

Subject to these Articles and the Companies Acts, the Board may exercise all the powers of the Company to:

 

(a)

borrow money;

 

(b)

indemnify and guarantee;

 

(c)

mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company;

 

(d)

create and issue debentures and other securities; and

 

(e)

give security either outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

 

121.

Power to Authenticate Documents

 

121.1

Any Director, the Secretary or any person appointed by the Board for the purpose shall have power to authenticate any documents affecting the constitution of the Company and any resolution passed by the Company or the Board or any committee, and any books, records, documents and accounts relating to the business of the Company, and to certify copies or extracts as true copies or extracts. Where any books, records, documents or accounts are not at the Office, the local manager or other officer of the Company who has their custody shall be deemed to be a person appointed by the Board for this purpose. A document purporting to be a copy of a resolution, or an extract from the minutes of a meeting, of the Company or the Board or any committee which is so certified shall be conclusive evidence in favour of all persons dealing with the Company that such resolution has been duly passed or, as the case may be, that any minute so extracted is a true and accurate record of proceedings at a duly constituted meeting.

 

122.

Use of Seals

 

122.1

The Board shall provide for the safe custody of the Seal. A Seal shall not be used without the authority of the Board or of a committee of the Board so authorised.

 

122.2

Subject as otherwise provided in these Articles, every document which is sealed using the Seal must be signed by at least one authorised person in the presence of a witness who attests the signature. An authorised person for this purpose is any Director, the Secretary or any other person authorised by the Directors for the purpose of signing documents to which the Seal is applied.

 

 

 

 

122.3

The Seal shall be used only for sealing securities issued by the Company and documents creating or evidencing securities so issued. Any such securities or documents sealed with the Seal are not required to be signed unless the Board decides otherwise or the law otherwise requires.

 

122.4

The Board may decide who will sign an instrument to which a Seal is affixed (or in the case of a share certificate, on which the Seal may be printed or affixed by either mechanical or electronic means) either generally or in relation to a particular instrument or type of instrument and may also determine either generally or in a particular case that a signature may be dispensed with or affixed by mechanical means.

 

123.

Declaration of Dividends

 

Subject to the Act and these Articles, the Company may by ordinary resolution declare dividends to be paid to members according to their respective rights and interests in the profits of the Company. However, no dividend shall exceed the amount recommended by the Board.

 

124.

Interim Dividends

 

Subject to the Act, the Board may declare and pay such interim dividends (including any dividend at a fixed rate) as appears to the Board to be justified by the profits of the Company available for distribution. If the Board acts in good faith, it shall not incur any liability to the holders of shares for any loss that they may suffer by the lawful payment of any interim dividend on any other class of shares ranking with or after those shares.

 

125.

Calculation and Currency of Dividends

 

Except as provided otherwise by these Articles or the rights attached to shares, all dividends:

 

(a)

shall be declared and paid according to the amounts paid up (otherwise than in advance of calls) on the shares on which the dividend is paid;

 

(b)

shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms that it shall rank for dividend as from a particular date, it shall rank for dividend accordingly; and

 

(c)

may be declared or paid in any currency. The Board may decide the rate of exchange for any currency conversions that may be required and how any costs involved are to be met.

 

126.

Amounts Due on Shares can be Deducted from Dividends

 

The Board may deduct from any dividend or other money payable to any person on or in respect of a share all such sums as may be due from them to the Company on account of calls or otherwise in relation to the shares of the Company. Sums so deducted can be used to pay amounts owing to the Company in respect of the shares.

 

 

 

 

127.

Dividends Not in Cash

 

The Board may, by ordinary resolution of the Company direct, or in the case of an interim dividend may without the authority of an ordinary resolution direct, that payment of any dividend declared may be satisfied wholly or partly by the distribution of assets, and in particular of paid up shares or debentures of any other company, or in any one or more of such ways. Where any difficulty arises regarding such distribution, the Board may settle it as it thinks fit. In particular, the Board may:

 

(a)

issue fractional certificates (or ignore fractions);

 

(b)

fix the value for distribution of such assets or any part of them and determine that cash payments may be made to any members on the footing of the values so fixed, in order to adjust the rights of members; and

 

(c)

vest any such assets in trustees on trust for the person entitled to the dividend.

 

128.

No Interest on Dividends

 

Unless otherwise provided by the rights attached to the share, no dividend or other monies payable by the Company or in respect of a share shall bear interest as against the Company.

 

129.

Method of Payment

 

129.1

The Company may pay any dividend, interest or other sum payable in respect of a share in cash or by direct debit, bank transfer, cheque, dividend warrant, or money order or by any other method, including by electronic means, as the Board may consider appropriate. For uncertificated shares, any payment may be made by means of the relevant system (subject always to the facilities and requirements of the relevant system) and such payment may be made by the Company or any person on its behalf by sending an instruction to the operator of the relevant system to credit the cash memorandum account of the holder or joint holders of such shares or, if permitted by the Company, of such person as the holder or joint holders may in writing direct.

 

129.2

The Company may send such payment by post or other delivery service (or by such means offered by the Company as the member or person entitled to it may agree in writing) to the registered address of the member or person entitled to it (or, if two or more persons are holders of the share or are jointly entitled to it because of the death or bankruptcy of the member or otherwise by operation of law, to the registered address of such of those persons as is first named in the Register) or to such person and such address as such member or person may direct in writing.

 

129.3

Every cheque, warrant, order or other form of payment is sent at the risk of the person entitled to the money represented by it, shall be made payable to the person or persons entitled, or to such other person as the person or persons entitled may direct in writing. Payment of the cheque, warrant, order or other form of payment (including transmission of funds through a bank transfer or other funds transfer system or by such other electronic means as permitted by these Articles or in accordance with the facilities and requirements of the relevant system concerned) shall be good discharge to the Company. If any such cheque, warrant, order or other form of payment has or shall be alleged to have been lost, stolen or destroyed the Company shall not be responsible.

 

 

 

 

129.4

Any joint holder or other person jointly entitled to a share may give an effective receipt for any dividend or other monies payable in respect of such share.

 

129.5

The Board may, at its discretion, make provisions to enable any member as the Board shall determine to receive duly declared dividends in a currency or currencies other than sterling. For the purposes of the calculation of the amount receivable in respect of any dividend, the rate of exchange to be used to determine the foreign currency equivalent of any sum payable as a dividend shall be such rate or rates and the payment shall be on such terms and conditions as the Board may in its absolute discretion determine.

 

130.

Uncashed Dividends

 

If cheques, warrants or orders for dividends or other sums payable in respect of a share sent by the Company to the person entitled to them are returned to the Company or left uncashed on two consecutive occasions or, following one occasion, reasonable enquiries have failed to establish any new address to be used for the purpose, the Company does not have to send any dividends or other monies payable in respect of that share due to that person until they notify the Company of an address to be used for the purpose. If any such cheque, warrant or order has or is alleged to have been lost, stolen or destroyed, the Directors may, on request of the person entitled to it, issue a replacement cheque, warrant or order.

 

131.

Unclaimed Dividends

 

All dividends, interest or other sums payable and unclaimed for 12 months after having become payable may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. The Company shall not be a trustee in respect of such unclaimed dividends and will not be liable to pay interest on it. All dividends that remain unclaimed for 12 years after they were first declared or became due for payment shall (if the Board so resolves) be forfeited and shall cease to remain owing by the Company.

 

132.

Scrip Dividends

 

Subject to the Act, the Board may, by ordinary resolution of the Company and subject to such terms and conditions as the Board may determine, offer to any holders of Ordinary Shares (excluding any member holding shares as treasury shares) the right to elect to be (or direct that another person, including a nominee, be) issued with Ordinary Shares, credited as fully paid, instead of cash in respect of the whole (or some part, to be determined by the Board) of any dividend specified by the ordinary resolution. The following provisions shall apply:

 

(a)

the said resolution may specify a particular dividend, or may specify all or any dividends declared within a specified period or periods but such period may not end later than the fifth anniversary of the date of the meeting at which the ordinary resolution is passed;

 

(b)

the entitlement of each holder of Ordinary Shares to new Ordinary Shares shall be such that the relevant value of the entitlement shall be as nearly as possible equal to (but not greater than) the cash amount (disregarding any tax credit) of the dividend that such holder would have received by way of dividend. For this purpose relevant value shall be calculated by reference to the average of the middle market quotations for the Ordinary Shares, certificated or uncertificated depositary instruments in respect of such shares, on Nasdaq (or any other publication of a recognised investment exchange showing quotations for the Ordinary Shares), for the day on which the Ordinary Shares are first quoted "ex" the relevant dividend and the four subsequent dealing days, or in such other manner as the Board may determine on such basis as it considers to be fair and reasonable. A certificate or report by the Company's auditors as to the amount of the relevant value in respect of any dividend shall be conclusive evidence of that amount;

 

 

 

 

(c)

no fractions of a share shall be allotted. The Board may make such provisions as it thinks fit for any fractional entitlements including provisions where, in whole or in part, the benefit accrues to the Company and/or under which fractional entitlements are accrued and/or retained and in each case accumulated on behalf of any member and such accruals or retentions are applied to the allotment by way of bonus to or cash subscription on behalf of any member of fully paid Ordinary Shares and/or provisions where cash payments may be made to members in respect of their fractional entitlements;

 

(d)

the Board shall, after determining the basis of allotment, notify the holders of Ordinary Shares in writing of the right of election offered to them, and specify the procedure to be followed and place at which, and the latest time by which, elections must be lodged in order to be effective. No such notice need to be given to holders of Ordinary Shares who have previously given election mandates in accordance with this Article 132(d) and whose mandates have not been revoked. The accidental omission to give notice of any right of election to, or the non-receipt (even if the Company becomes aware of such non-receipt) of any such notice by, any holder of Ordinary Shares entitled to the same shall neither invalidate any offer of an election nor give rise to any claim, suit or action;

 

(e)

the Board shall not proceed with any election unless the company has sufficient reserves or funds that may be capitalised, and the Board has authority to allot sufficient shares, to give effect to it after the basis of the allotment is determined;

 

(f)

the Board may exclude from any offer or make other arrangements in relation to any holders of Ordinary Shares where the Board considers that the making of the offer to them or in respect of such shares would or might involve the contravention of the laws of any territory or that for any other reason the offer should not be made to them or in respect of such shares;

 

(g)

the Board may establish or vary a procedure for election mandates in respect of future rights of election and may determine that every duly effected election in respect of any Ordinary Shares shall be binding on every successor in title to the holder;

 

(h)

the dividend (or that part of the dividend in respect of which a right of election has been offered) shall not be payable on Ordinary Shares in respect of which an election has been duly made (Elected Ordinary Shares) and instead additional Ordinary Shares shall be allotted to the holders of the Elected Ordinary Shares (or such person as they may direct) on the basis of allotment determined as stated above. For such purpose the Board may capitalise, out of any amount for the time being standing to the credit of any reserve or fund (including any share premium account or capital redemption reserve) or of any of the profits which could otherwise have been applied in paying dividends in cash as the Board may determine, a sum equal to the aggregate nominal amount of the additional Ordinary Shares to be allotted on such basis and apply it in paying up in full the appropriate number of unissued Ordinary Shares for allotment and distribution to the holders of the Elected Ordinary Shares on such basis. The Board may do all acts and things considered necessary or expedient to give effect to any such capitalisation;

 

 

 

 

(i)

the Board may decide how any costs relating to the new shares available in place of a cash dividend will be met, including to deduct an amount from the entitlement of a holder of Ordinary Shares under this Article 132;

 

(j)

the additional Ordinary Shares so allotted shall rank pari passu in all respects with each other (save as otherwise provided for in these Articles) and with the fully paid Ordinary Shares in issue on the record date for the dividend in respect of which the right of election has been offered, except that they will not rank for any dividend or other distribution or other entitlement which has been declared, paid or made by reference to such record date; and

 

(k)

the Board may terminate, suspend, or amend any offer of the right to elect to be (or direct that another person, including a nominee, be) issued with Ordinary Shares in lieu of any cash dividend at any time and generally may implement any scrip dividend scheme on such terms and conditions as the Board may determine and take such other action as the Board may deem necessary or desirable in respect of any such scheme.

 

133.

Capitalisation of Reserves

 

133.1

The Board may, with the authority of an ordinary resolution of the Company:

 

(a)

subject as provided in this Article 133, resolve to capitalise any undivided profits of the Company not required for paying any preferential dividend (whether or not they are available for distribution) or any sum standing to the credit of any reserve or fund of the Company which is available for distribution or standing to the credit of the share premium account or capital redemption reserve or other undistributable reserve;

 

(b)

appropriate the sum resolved to be capitalised to the members in proportion to the nominal amounts of the shares (whether or not fully paid) held by them respectively which would entitle them to participate in a distribution of that sum if the shares were fully paid and the sum were then distributable and were distributed by way of dividend and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by them respectively, or in paying up in full unissued shares or debentures of the Company of a nominal amount equal to that sum, and allot the shares or debentures credited as fully paid to those members or as they may direct, in those proportions, or partly in one way and partly in the other, provided that:

 

(i)

the share premium account, the capital redemption reserve, any other undistributable reserve and any profits which are not available for distribution may, for the purposes of this Article 133, only be applied in paying up in full shares to be allotted to members credited as fully paid;

 

(ii)

the Company will also be entitled to participate in the relevant distribution in relation to any shares of the relevant class held by it as treasury shares and the proportionate entitlement of the relevant class of members to the distribution will be calculated accordingly; and

 

 

 

 

(iii)

in a case where any sum is applied in paying amounts for the time being unpaid on any shares of the Company or in paying up in full debentures of the Company, the amount of the net assets of the Company at that time is not less than the aggregate of the called up share capital of the Company and its undistributable reserves as shown in the latest audited accounts of the Company or such other accounts as may be relevant and would not be reduced below that aggregate by the payment of it;

 

(c)

resolve that any shares so allotted to any member in respect of a holding by them of any partly paid shares shall, so long as such shares remain partly paid, rank for dividends only to the extent that such partly paid shares rank for dividends;

 

(d)

make such provision by the issue of fractional certificates (or by ignoring fractions or by accruing the benefit of it to the Company rather than to the members concerned) or by payment in cash or otherwise as it thinks fit in the case of shares or debentures becoming distributable in fractions;

 

(e)

authorise any person to enter on behalf of such members concerned into an agreement with the Company providing for either:

 

(i)

the allotment to them respectively, credited as fully paid up, of any shares or debentures to which they may be entitled on such capitalisation; or

 

(ii)

the payment up by the Company on behalf of such members by the application of their respective proportions of the reserves or profits resolved to be capitalised, of the amounts or any part of the amounts remaining unpaid on their existing shares,

 

(any agreement made under such authority being effective and binding on all such members); and

 

(f)

generally do all acts and things required to give effect to such resolution.

 

134.

Record Dates

 

134.1

Notwithstanding any other provision of these Articles but without prejudice to the rights attached to any shares and subject always to the Act, the Company or the Board may by resolution specify any date (record date) as the date at the close of business (or such other time as the Board may determine) on which persons registered as the holders of shares or other securities shall be entitled to receipt of any dividend, distribution, interest, allotment, issue, notice, information, document or circular. Such record date may be before, on or after the date on which the dividend, distribution, interest, allotment, issue, notice, information, document or circular is declared, made, paid, given, or served.

 

134.2

In the absence of a record date being fixed, entitlement to any dividend, distribution, interest, allotment, issue, notice, information, document or circular shall be determined by reference to the date on which the dividend is declared, the distribution allotment or issue is made or the notice, information, document or circular made, given or served.

 

 

 

  

135.

Inspection of Records

 

No member (other than a Director) shall have any right to inspect any accounting record or other document of the Company unless they are authorised to do so by law, by order of a court of competent jurisdiction, by the Board or by ordinary resolution of the Company.

 

136.

Accounts to be Sent to Members

 

136.1

In respect of each financial year, a copy of the Company's annual accounts, the strategic report, the Directors' report, the Directors' remuneration report, the auditor's report on those accounts and on the auditable part of the Directors' remuneration report shall be sent or supplied to:

 

(a)

every member (whether or not entitled to receive notices of general meetings);

 

(b)

every holder of debentures (whether or not entitled to receive notice of general meetings); and

 

(c)

every other person who is entitled to receive notice of general meetings;

 

not less than 21 clear days before the date of the meeting at which copies of those documents are to be laid in accordance with the Act.

 

136.2

This Article 136 does not require copies of the documents to which it applies to be sent or supplied to:

 

(a)

a member or holder of debentures of whose address the Company is unaware; or

 

(b)

more than one of the joint holders of shares or debentures.

 

136.3

The Board may determine that persons entitled to receive a copy of the Company's annual accounts, the strategic report, the Directors' report, the Directors' remuneration report, the auditor's report on those accounts and on the auditable part of the Directors' remuneration report are those persons entered on the Register at the close of business on a day determined by the Board, provided that the day determined by the Board may not be more than 21 days before the day that the relevant copies are being sent.

 

136.4

Where permitted by the Act, a strategic report with supplementary material in the form and containing the information prescribed by the Act may be sent or supplied to a person so electing in place of the documents required to be sent or supplied by Article 136.1.

 

137.

Service of Notices

 

137.1

The Company can send, deliver or serve any notice or other document, including a share certificate, to or on a member:

 

(a)

personally;

 

(b)

by sending it through the postal system addressed to the member at their registered address or by leaving it at that address addressed to the member;

 

 

 

  

(c)

through a relevant system, where the notice or document relates to uncertificated shares;

 

(d)

where appropriate, by sending or supplying it in electronic form to an address notified by the member to the Company for that purpose;

 

(e)

where appropriate, by making it available on a website and notifying the member of its availability in accordance with this Article 137; or

 

(f)

by any other means authorised in writing by the member.

 

137.2

In the case of joint holders of a share:

 

(a)

service, sending or supply of any notice, document or other information on or to one of the joint holders shall for all purposes be deemed a sufficient service on, sending or supplying to all the joint holders; and

 

(b)

anything to be agreed or specified in relation to any notice, document or other information to be served on, sent or supplied to them may be agreed or specified by any one of the joint holders and the agreement or specification of the first named in the Register shall be accepted to the exclusion of that of the other joint holders.

 

137.3

Where a member (or, in the case of a joint holders, the person first named in the Register) has a registered address outside the United Kingdom but has (i) notified the Company of an address within the United Kingdom at which notices, documents or other information may be given to them or (ii) has given to the Company an address for the purposes of communications by electronic means at which notices, documents or other information may be served, sent or supplied to them, they shall be entitled to have notices served, sent or supplied to them at such address or, where applicable, the Company may make them available on a website and notify the holder of that address. Otherwise no such member shall be entitled to receive any notice, document or other information from the Company.

 

137.4

If on three consecutive occasions any notice, document or other information has been sent to any member at their registered address or their address for the service of notices (by electronic means or otherwise) but has been returned undelivered, such member shall not be entitled to receive notices, documents or other information from the Company until they have communicated with the Company and supplied in writing a new registered address or address within the United Kingdom for the service of notices or has informed the Company of an address for the service of notices and the sending or supply of documents and other information in electronic form. For these purposes, any notice, document or other information served, sent or supplied by post shall be treated as returned undelivered if the notice, document or other information is served, sent or supplied back to the Company (or its agents) and a notice, document or other information served, sent or supplied in electronic form shall be treated as returned undelivered if the Company (or its agents) receives notification that the notice, document or other information was not delivered to the address to which it was served, sent or supplied.

 

137.5

The Company may at any time and in its sole discretion choose to serve, send or supply notices, documents or other information in hard copy form alone to some or all of the members.

 

 

 

  

138.

Notice on Person Entitled By Transmission

 

The Company may give notice to the person entitled to a share because of the death or bankruptcy of a member or otherwise by operation of law, by sending or delivering it in any manner authorised by these Articles for the giving of notice to a member, addressed to that person by name, or by the title of representative of the deceased or trustee of the bankrupt or representative by operation of law or by any like description, at the address (if any) within the United Kingdom supplied for the purpose by the person claimed to be so entitled or to which notices may be sent in electronic form. Until such an address has been so supplied, a notice may be given in any manner in which it might have been given if the death or bankruptcy or operation of law had not occurred.

 

139.

Record Date for Service

 

Any notice, document or other information may be served, sent or supplied by the Company by reference to the register as it stands at any time not more than 15 days before the date of service, sending or supplying. No change in the register after that time shall invalidate that service, sending or supply. Where any notice, document or other information is served on, sent or supplied to any person in respect of a share in accordance with these Articles, no person deriving any title or interest in that share shall be entitled to any further service, sending or supplying of that notice, document or other information.

 

140.

Evidence of Service

 

140.1

Any notice, document or other information, addressed to a member at their registered address or address for service in the United Kingdom shall, if served, sent or supplied by first class post, be deemed to have been served or delivered on the day after the day when it was put in the post (or, where second class post is employed, on the second day after the day when it was put in the post). Proof that an envelope containing the notice, document or other information was properly addressed and put into the post as a prepaid letter shall be conclusive evidence that the notice was given.

 

140.2

Any notice, document or other information not served, sent or supplied by post but delivered or left at a registered address or address for service in the United Kingdom (other than an address for the purposes of communications by electronic means) shall be deemed to have been served or delivered on the day on which it was so delivered or left.

 

140.3

Any notice, document or other information, if served, sent or supplied by electronic means shall be deemed to have been received on the day on which the electronic communication was sent by or on behalf of the Company notwithstanding that the Company subsequently sends a hard copy of such notice, document or other information by post. Any notice, document or other information made available on a website shall be deemed to have been received on the day on which the notice, document or other information was first made available on the website or, if later, when a notice of availability is received or deemed to have been received pursuant to this Article. Proof that the notice, document or other information was properly addressed shall be conclusive evidence that the notice by electronic means was given.

 

140.4

Any notice, document or other information served, sent or supplied by the Company by means of a relevant system shall be deemed to have been received when the Company or any sponsoring system-participant acting on its behalf sends the issuer- instruction relating to the notice, document or other information.

 

 

 

 

140.5

Any notice, document or other information served, sent or supplied by the Company by any other means authorised in writing by the member concerned shall be deemed to have been received when the Company has carried out the action it has been authorised to take for that purpose.

 

141.

Notice When Post not Available

 

If at any time by reason of the suspension, interruption or curtailment of postal services within the United Kingdom the Company is unable effectively to convene a general meeting by notices sent through the post, the Company need only give notice of a general meeting to those members with whom the Company can communicate by electronic means and who have provided the Company with an address for this purpose. The Company shall also advertise the notice in at least one national newspaper published in the United Kingdom and make it available on its website from the date of such advertisement until the conclusion of the meeting or any adjournment of it. In any such case the Company shall send confirmatory copies of the notice by post to those members to whom notice cannot be given by electronic means if, at least seven days prior to the meeting, the posting of notices to addresses throughout the United Kingdom again becomes practicable.

 

142.

Winding Up

 

142.1

If the Company is wound up and subject to the rights and restrictions attached to any share or classes of shares, the liquidator may, with the sanction of a special resolution and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator may, with the like sanction(s), vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he, she or it may with the like sanction determine. Where the liquidator divides or transfers any assets in pursuance of the powers in this Article 142, no member shall be compelled to accept any assets upon which there is a liability.

 

143.

Indemnity and Insurance

 

143.1

In this Article:

 

(a)

companies are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate;

 

(b)

a relevant officer means any Director or other officer or former director or other officer of the Company or an associated company (including any company which is a trustee of an occupational pension scheme (as defined by section 235(6) of the Act), but excluding in each case any person engaged by the Company (or associated company) as auditor (whether or not they are also a director or other officer), to the extent they act in their capacity as auditor); and

 

(c)

relevant loss means any loss or liability which has been or may be incurred by a relevant officer in connection with that relevant officer's duties or powers in relation to the company, any associated company or any pension fund or employees' share scheme of the company or associated company.

 

 

 

 

143.2

Subject to Article 143.4, but without prejudice to any indemnity to which a relevant officer is otherwise entitled, so far as may be permitted by the Act:

 

(a)

each relevant officer shall be indemnified out of the Company's assets against all relevant loss and in relation to the Company's (or any associated company's) activities as trustee of an occupational pension scheme (as defined in section 235(6) of the Act), including any liability incurred by them in defending any civil or criminal proceedings, in which judgment is given in their favour or in which they are acquitted or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on their part or in connection with any application in which the court grants them, in their capacity as a relevant officer, relief from liability for negligence, default, breach of duty or breach of trust in relation to the Company's (or any associated company's) affairs; and

 

(b)

the Company may provide any relevant officer with funds to meet expenditure incurred or to be incurred by them in connection with any proceedings or application referred to in Article 143.2(a) and otherwise may take any action to enable any such relevant officer to avoid incurring such expenditure.

 

143.3

This Article 143 does not authorise any indemnity which would be prohibited or rendered void by any provision of the Companies Acts or by any other provision of law.

 

143.4

The Directors may decide to purchase and maintain insurance, at the expense of the Company, for the benefit of any relevant officer in respect of any relevant loss.

 

144.

Exclusive Jurisdiction

 

144.1     Save in respect of any cause of action arising under the Securities Act or the Exchange Act, unless the Company by ordinary resolution consents to the selection of an alternative forum, the courts of England and Wales shall be the exclusive forum for the resolution of:

 

(a)           any derivative action or proceeding brought on behalf of the Company;

 

(b)           any action or proceeding asserting a claim of breach of fiduciary duty owed by any director, officer or other employee to the Company;

 

(c)           any action or proceeding asserting a claim arising out of any provision of the Companies Acts or these Articles; or

 

(d)           any action or proceeding asserting a claim or otherwise related to the affairs of the Company.

 

144.2     Unless the Company by ordinary resolution consents to the selection of an alternative forum in the United States, the United States District Court for the Southern District of New York shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Exchange Act.

 

144.3     Any person or entity purchasing or otherwise acquiring any interest in the Company's shares shall be deemed to have notice of and consented to the provisions of this Article 144.

 

 

 

 

 

Exhibit 10.1

 

DATED

5 February 2018

 

 

RULES OF THE VACCITECH LIMITED
EMI SHARE OPTION SCHEME
(APPROVED BY THE BOARD OF DIRECTORS ON 5 February 2018)

 

 

5 New Street Square | London EC4A 3TW Tel +44 (0)20 7300 7000 Fax +44 (0)20 7300 7100 DX 41 London www.taylorwessing.com

 

 

INDEX

 

Clause No.

Page No.

 

1.	Interpretation and Construction	3
2.	Statement of Purpose	8
3.	Grant of Options	9
4.	Notice of Grant	10
5.	EMI Options: Limit for individual Eligible Employee	10
6.	Overall limits for Company on the Grant of Options	10
7.	Ordinary Share Capital	11
8.	Non-Transferable	11
9.	Rights to Exercise Options	11
10.	Exercise of Options	12
11.	Lapse of Options	14
12.	Takeover, Reconstruction, Liquidation and Sale of the Business	15
13.	Replacement Options	17
14.	Loss of Office or Employment	19
15.	Adjustments	20
16.	General	21
17.	Overseas Employees	23
18.	Supplementary Provisions	23
schedule 1		24
schedule 2		31
schedule 3		33

 

 

INDEX

 

Clause No.

Page No.

 

1.

Interpretation and Construction

 

1.1

Definitions

 

In the Rules, unless the context requires otherwise, the following words and expressions are defined or otherwise explained by the provisions indicated:

 

“Acquiring Company”	any company which has obtained Control of the Company in accordance with any of the provisions of Rule 12;
“Adoption Date”	the date on which the Rules are adopted by the Directors;
“Bad Leaver”	any director or employee of any Group Company who ceases to be a director or employee without becoming a director or employee of any other Group Company as a consequence of:
	(a)    Such director or employee’s dismissal for Cause; or
	(b)    Such director or employee’s resignation in circumstances where a Group Company would have been entitled to dismiss such director or employee for Cause, provided that, in each case, the Directors (acting with Investor Director Consent) may decide that that director or employee is not a Bad Leaver;
“Cause”	in relation to a director or employee, that director or employee’s fraud or dishonesty, or having committed any crime punishable by imprisonment;
“Committed Time”	the meaning given by paragraph 26 of Schedule 5;
“Companies Act”	the Companies Act 2006;
“Company”	Vaccitech Limited (registered number 09973585) whose registered office is at Magdalen Centre, 1 Robert Robinson Avenue, The Oxford Science Park, Oxford, Oxfordshire OX4 4GA;

 

 

“Compromise”	the meaning given by Rule 12.5;
“Control”	shall mean the ability of a person to secure that the affairs of a company are conducted in accordance with the person’s wishes by the holding of shares or voting power in that or any other company (or as a result of any powers in the articles of association or other document relating to that or any other company) (in accordance with section 995 Income Tax Act 2007);
“Date of Grant”	the date on which an Option is granted to an Employee;
“Directors”	the board of Directors of the Company or a duly authorised committee thereof;
“Disqualifying Event”	the meaning given by Sections 534 to 536 of ITEPA;
“Eligible Employee”	any person who is an employee of the Company or any Qualifying Subsidiary PROVIDED THAT where an Option is intended to be an EMI Option the employee is an individual;
	(a)    whose Committed Time amounts to at least 25 hours a week, or if less, 75% of his Working Time; and
	(b)    who does not have a Material Interest in any Group Company;
“EMI”	Enterprise Management Incentive;
“EMI Option”	any right to acquire Shares:
	(a)    In relation to which the requirements of Schedule 5 are met at the Date of Grant; and
	(b)  of which Notice of Grant is given to HM Revenue & Customs in accordance with paragraph 44 of Schedule 5;
	and, where the circumstances permit, a Replacement Option in relation to that EMI Option;
“Employee”	any individual who is an employee of a Group Company;

 

 

“Employer Company”	the company by reference to which the Option Holder is an Eligible Employee or Employee;
“Employer’s NICs”	secondary Class 1 national insurance contributions;
“Good Leaver”	any director or any employee of any Group Company who ceases to be a director or employee without becoming a director or employee of any other Group Company and is not a Bad Leaver;
“Group” and “Group Company”	“Group”, in relation to a Parent Company, means that company and its Subsidiaries and “Group Company” shall be construed accordingly;
“Independence Requirement”	the meaning given by paragraph 9 of Schedule 5;
“Investor Director Consent”	shall have the meaning in the Articles of Association of the Company;
“ITEPA”	the Income Tax (Earnings and Pensions) Act 2003;
“Market Value”	shall be determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992;
“Material Interest”	the meaning given by paragraph 29 of Schedule 5;
“Notice of Exercise”	a notice of exercise in accordance with the form set out in schedule 2 of the Rules or such other form as may be prescribed or required by the Directors from time to time;
“Notice of Grant”	the notice of grant of the EMI Option submitted by the Employer Company to HM Revenue & Customs in accordance with Rule 4.1;
“Option”	a right to acquire Shares which shall include an EMI Option or an Unapproved Option;

 

 

“Option Agreement ”	an agreement between the Company and an Eligible Employee (or the Company and an Employee) which shall evidence the grant of the Option, which shall be in accordance with the Rules of the Scheme and which shall be in such form as may be prescribed by the Directors;
“Option Holder”	an Eligible Employee who has been granted an EMI Option or an Employee who has been granted an Unapproved Option (or his legal personal representatives where the circumstances permit);
“Option Price”	the price per Share determined by the Directors which shall not be less than the Market Value of a Share on the Date of Grant (unless the Directors in their discretion decide otherwise) and, in the case of an Option which is a right to subscribe for Shares, not less than the nominal value of a Share;
“Ordinary Share Capital”	the meaning given by section 989 of the Income Tax Act 2007;
“Parent Company”	a company that has one or more Subsidiaries;
“Personal Representatives”	in relation to an Option Holder, the Option Holder’s legal personal representatives (being either the executors of his will to whom a valid grant of probate has been made or the duly appointed administrators of his estate) who in either case have provided the Directors with satisfactory evidence of their appointment;
“Qualifying Exchange”	an exchange of Shares in accordance with Rule 13.3;
“Qualifying Subsidiary”	the meaning given by paragraph 11 of Schedule 5 to ITEPA;
“Relevant Company”	the company (being either the Company or any Group Company) which incurs a Tax Liability as set out in Rule 10.4;
“Replacement Option”	an Option granted in accordance with Rule 13;
“Restrictions”	any condition attaching to the Shares which makes the interest in the Shares restricted within the meaning of Chapter 2 of Part VII of ITEPA;
“Rules”	these rules together with any schedules or appendices to these rules;

 

 

“Sale of the Business”	any transfer (whether through a single transaction or a series of transactions) of all or substantially all of the assets or undertaking of the Group (including goodwill) to any person (or persons connected with each other or act in concert with each other);
“Schedule 5”	Schedule 5 to ITEPA;
“Scheme”	this scheme as governed by the Rules;
“Section 431 Election”	means an election in accordance with Section 431 of ITEPA being in the form as set out in Schedule 3 to this Scheme or in such other form as HM Revenue & Customs may determine from time to time;
“Share”	Ordinary Shares in the capital of the Company (and in the context of an EMI Option, which satisfies the requirements of paragraph 35 of Schedule 5);
“Subsidiary”	means any body corporate which is a subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006;
“Tax Liability”	a liability to account for any employee’s tax, national insurance, social security or other levies in respect of the Option (whether by reason of grant, exercise, or otherwise or by reason of a Disqualifying Event in relation to EMI Options only), including for the avoidance of doubt and without limitation any liability arising after the termination of the Option Holder’s employment for whatever reason and which:
	(a)    may arise or be incurred in any jurisdiction whatsoever and,
	(b)   by the law of the same jurisdiction may or shall be recovered from the person entitled to the Option;
“Trading Activities Requirement”	the meaning given by paragraph 13 to 14 of Schedule 5;
“Unapproved Options”	any right to acquire Shares granted pursuant to this Scheme which does not satisfy the requirements of Schedule 5;

 

 

“Unvested”	such number or the proportion of the Shares subject to an Option that are not Vested;
“Vested”	such number or the proportion of the Shares subject to an Option that shall become vested according to the Vesting Schedule and “Vest” shall be construed accordingly;
“Vesting Schedule”	the schedule set out in any Option Holder’s Option Agreement;
“Working Time”	the meaning given by paragraph 27 of Schedule 5; and
“Working Time Declaration”	means a written declaration made and signed by the Option Holder within the Option Agreement in accordance with paragraph 44(6) of Schedule 5 that he satisfies the Committed Time requirement.

 

1.2

Construction

 

Words or expressions used herein shall where appropriate:

 

(a)          when denoting the masculine gender include the feminine and vice-versa;

 

(b)          when denoting the singular include the plural and vice versa;

 

(c)        when referring to any enactment be construed as a reference to that enactment as for the time being consolidated, amended, re-enacted or replaced and shall include any regulations made thereunder;

 

(d)         when a period of time is specified and starts from a given day or the day of an act or event, be calculated exclusive of that day; and

 

(e)          be construed such that the headings and sub-headings are for ease of reference only, and do not affect the interpretation of any Rule;

 

(f)           be construed where not otherwise defined in the Rules to have the same meanings as in Schedule 5.

 

2.

Statement of Purpose

 

EMI Options granted at any time pursuant to the Rules are granted for commercial reasons in order to recruit or retain an Eligible Employee and not as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax.

 

 

3.

Grant of Options

 

3.1

General

 

(a)          Subject to the Rules, the Company may, at any time, grant

 

(i)            any Eligible Employee an EMI Option; or

 

(ii)           any Employee an Unapproved Option

 

over such number of Shares at such Option Price and with such conditions of exercise as the Company may determine.

 

(b)         An EMI Option shall be granted in accordance with the provisions of Schedule

 

(c)          EMI Options shall only be granted to individuals who are Eligible Employees.

 

(d)         Unapproved Options shall only be granted to individuals who are Employees.

 

(e)          An Option shall not be granted by any person other than the Company without the prior approval of the Directors.

 

3.2

Contents of Option Agreement

 

The Option shall be agreed in writing between the Company and the Option Holder, and shall state:

 

(a)          the Date of Grant;

 

(b)          that the EMI Option is granted under the provisions of Schedule 5;

 

(c)           the number or maximum number of Shares over which the Option is granted;

 

(d)          the Option Price, or the method by which the Option Price is to be determined;

 

(e)          the Vesting Schedule, which shall provide that the Option shall Vest in four equal annual instalments from the Vesting Commencement Date;

 

(f)           the Vesting Commencement Date, which shall be either:

 

(i)            the date on which the Option Holder became an Employee; or

 

(ii)           the Date of Grant;

 

(g)          details of any Restrictions attaching to the Shares and, if so, shall contain details of such Restrictions; and

 

(h)          shall include the Working Time Declaration.

 

3.3

The Option Agreement for an Unapproved Option shall be in the same form as Rule apart from Rule 3.2(b), (g) and (h) which shall not apply.

 

 

4.

Notice of Grant

 

4.1

On the grant of an EMI Option, a Notice of Grant shall be given by the Employer Company to HM Revenue & Customs within 92 days of the Date of Grant (or such further or other period as HM Revenue & Customs or statute may allow, permit or require) and shall:

 

(a)          be in such form and using such method as required by HM Revenue & Customs from time to time;

 

(b)          contain a declaration by a director or the secretary of the Employer Company that:

 

(i)            in his opinion the requirements of Schedule 5 are met;

 

(ii)           the information provided is to the best of his knowledge correct and complete; and

 

(iii)          the Option Holder has made and signed a Working Time Declaration and that the Working Time Declaration is held by the Employer Company;

 

(c)          contain any other information that HMRC may require from time to time.

 

4.2

On the grant of an Unapproved Option a Notice of Grant shall not be required.

 

5.

EMI Options: Limit for individual Eligible Employee

 

5.1

The number of Shares over which an EMI Option may be granted to any one Eligible Employee shall be limited and take effect so that the total value of Shares (as determined by paragraphs 5(6) to (8) of Schedule 5) subject to unexercised EMI Options granted to that Eligible Employee by the Company or any other Group Company does not exceed £250,000 (or such other limit as may apply from time to time in paragraph 5 of Schedule 5), SAVE WHERE an EMI Option is granted under the provisions of Part 6 (Company Reorganisation) of Schedule 5.

 

5.2

Provided that if an EMI Option exceeds the limit in Rule 5.1 the Option shall be treated as two Options, one shall be an EMI Option as to the number of Shares within the limit in Rule 5.1 and the other Option shall be an Unapproved Option.

 

6.

Overall limits for Company on the Grant of Options

 

6.1

Subject to such adjustments as may be made in accordance with Rule 15, no Option shall be granted on any Date of Grant if as a result the total value of Shares of the Company (as determined by paragraphs 5(6) to (8) of Schedule 5) in respect of which unexercised EMI Options exist would exceed £3 million or such other limit as may apply from time to time in paragraph 7 of Schedule 5.

 

6.2

For the purpose of the limit contained in Rule 6.1 above, any Option or right which has been released, cancelled or lapsed without being exercised shall be ignored.

 

6.3

If following the purported grant of an EMI Option the limit in Rule 6.1 would be exceeded such an Option shall not be an EMI Option insofar as it relates to the excess and the excess shall be treated as an Unapproved Option.

 

 

 

7.	Ordinary Share Capital

 

7.1

Availability of Shares

 

The Company shall at all times keep available Shares to satisfy the exercise to the full extent still possible of all Options which have neither lapsed nor been fully exercised taking account of any other obligations of the Company to provide shares of the same class of Shares.

 

8.	Non-Transferable

 

Save as provided in Rule 9.4, no Option nor any right thereunder shall be capable of being transferred, assigned or charged in any manner whatsoever. Upon any such purported transfer, assignment, or charge the Option shall immediately lapse and cease to be exercisable.

 

9.	Rights to Exercise Options

 

9.1

General

 

Subject to Rules 9.2, 9.3, 9.4 and 9.5 below an Option:

 

(a)

shall not be exercisable before it has Vested in accordance with the Vesting Schedule set out in the relevant Option Holder’s Option Agreement; and

 

(b)

shall only be exercisable in accordance with Rule 12; and

 

(c)

shall not be exercised later than the day before the tenth anniversary of the Date of Grant.

 

9.2	Termination of Employment - Bad Leaver

 

If the Option Holder is a Bad Leaver, the Option, whether Vested and unexercised or Unvested shall lapse immediately on the date upon which the Option Holder ceases to hold employment or office within the Group, or in the case of termination for Cause, on the date of occurrence of such Cause.

 

9.3	Termination of Employment - Good Leaver

 

If the Option Holder is a Good Leaver:

 

(a)          the Option shall be exercisable to the extent Vested as at the date of ceasing employment:

 

(i)            within 90 days of ceasing employment (or within any longer time period as referred to in section 532(1)(b) ITEPA); or

 

(ii)           in accordance with Rule 12.

 

(b)         the Option to the extent Unvested shall lapse immediately on the date upon which the Option Holder ceases employment unless otherwise decided by the Directors (acting with Investor Director Consent) before the date of cessation at their discretion. If the Directors (acting with Investor Director Consent) use their discretion to permit exercise of the Unvested Option, it may be in relation to part or all of the Unvested Option, but may only be exercisable within the time periods set out in Rule 9.3(a)(i) and Rule 9.3(a)(ii).

 

 

9.4	Death of the Option Holder

 

If an Option Holder dies,

 

(a)

the Option shall be exercisable to the extent Vested as at the date of the Option Holder’s death by the Option Holder’s Personal Representatives within 12 months of the date of the Option Holder’s death; and

 

(b)

the Option to the extent Unvested as at the date of the Option Holder’s death shall lapse on the expiry of 12 months from the date of the Option Holder’s death and the Directors (acting with Investor Director Consent) may use their discretion to permit exercise of part or all of the Unvested Option within such 12 months period.

 

9.5	Special exercise ten years from Date of Grant

 

Where there is no event as provided for in Rule 12 which will occur within 10 years of the Date of Grant, an Option, to the extent Vested, may be exercised within the period of 60 days ending on the day before the tenth anniversary of the Date of Grant of the Option. For the avoidance of doubt, nothing in these Rules shall require the Company to facilitate the disposal in any manner whatsoever of any Shares acquired on any such exercise pursuant to this Rule 9.5.

 

10.	Exercise of Options

 

10.1	Procedure on exercise

 

An Option shall be exercisable, in whole or in part, by the delivery to the secretary of the Company of the following:

 

(a)          an Option Agreement covering all of the Shares over which the Option is then to be exercised;

 

(b)          the Notice of Exercise in the prescribed form duly completed and signed by the Option Holder (or by his duly authorised agent);

 

(c)           a Section 431 Election (or a similar election should the Directors so require);

 

(d)          payment (or such arrangements for the making of such a payment as the Directors shall permit) of a sum equal to the aggregate Option Price for the number of Shares over which the Option is to be exercised;

 

(e)          payment (or such arrangements for the making of such a payment as the Directors shall permit) of any Tax Liability and Employer’s NICs in accordance with Rule 10.4; and

 

 

(f)           if and to the extent that existing shareholders in the Company are subject to Restrictions on the exercise of any rights attaching to their Shares in the Company as embodied in any shareholders’ agreement or other such document, is accompanied by a deed of adherence in a form acceptable to the Company and executed by the Option Holder whereby the Option Holder agrees to be bound by the terms of such shareholders’ agreement or other such document.

 

10.2	Issue or transfer of Shares

 

The Company shall issue or procure the transfer of Shares to be allotted or transferred pursuant to the exercise of an Option to the Option Holder such number of Shares within 30 days following the effective date of exercise of the Option.

 

10.3

Shares issued pursuant to the Scheme will rank pari passu in all respects with the Shares then already in issue except that they and any Shares transferred pursuant to the Scheme will not rank for any dividend or other distribution of the Company paid or made by reference to a record date falling prior to the date of receipt of the Notice of Exercise of the Option pursuant to Rule 10.1.

 

10.4	Deductions

 

(a)         Where in relation to Options, the Company or any Group Company (the “Relevant Company”) is liable, or is in accordance with current practice believed to be liable under any statute or regulation or otherwise, to account to any revenue or other authority for sums in respect of a Tax Liability in relation to the Option, the Option Holder shall indemnify and shall keep indemnified the Relevant Company for the Tax Liability and the Option Holder shall pay the Relevant Company a sum equal to the Tax Liability immediately upon written notice of the quantum of the said liability.

 

(b)         Notwithstanding the above, the Company may impose such conditions upon the exercise of the Options as are necessary to ensure that the Relevant Company is able to meet any or all of such liabilities, including, without limitation, a condition that no exercise may take place unless the Option Holder has provided the Relevant Company with cash funds sufficient to meet such Tax Liability, or has entered into arrangements acceptable to the Relevant Company to secure that such cash funds are available, or to allow the Relevant Company to deduct the amount of such Tax Liability from any cash amounts (including salary and bonuses) which may become payable to the Option Holder by any Group Company.

 

(c)           The Company may require the Option Holder as a condition of the exercise of any Option that the Option Holder shall:

 

(i)            agree to reimburse the Relevant Company for any Employer’s NICs arising on the exercise of an Option; or

 

(ii)           enter into an election with the Relevant Company to assume the liability for any Employer’s NICs, payable on the exercise of the Option, including an election under paragraph 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992; OR

 

 

(iii)          agree to pay the employer’s social security contributions, to the extent permitted by law, in any other jurisdiction.

 

(d)          If the Option Holder shall fail to:

 

(i)            make payment to the Relevant Company immediately upon receipt of a written notice in accordance with Rule 10.4(a); or

 

(ii)           reimburse the Relevant Company in accordance with an agreement or election in whole or in part for any liability to Employer’s NIC or employer’s social security contributions pursuant to Rule 10.4(a);

 

then the Company shall be authorised by the Option Holder to reduce the number of Shares otherwise deliverable to the Option Holder upon the exercise of an Option as may be sufficient to produce a sum which (after allowance for the costs and expenses of such a sale) may discharge (and shall be applied in discharge of) the Option Holder’s liability to the Relevant Company under Rule 10.4(a) or any agreement or election pursuant to Rule 10.4(a) and the Company may exercise all such powers and may appoint any of its officers to sign all such documents in the name of the Option Holder and as his act and deed as may be necessary for this purpose.

 

(e)          If the Option Holder shall fail to make payment to the Relevant Company immediately upon receipt of a written notice in accordance with Rule 10.4(a) then the Option Holder shall be liable to make good any amount outstanding on demand.

 

11.	Lapse of Options

 

11.1

General

 

An Option shall immediately cease to be exercisable and shall lapse on the earliest of:

 

(a)          the tenth anniversary of the Date of Grant;

 

(b)          the date upon which the Option Holder ceases to hold employment or office within the Group if the Option Holder is a Bad Leaver, or in the case of termination for Cause, on the date of occurrence of such Cause;

 

(c)          the expiry of the periods in Rule 9.3, except that if the Option Holder dies during the exercise period specified in Rule 9.3 or before exercise in accordance with Rule 12 an Option shall not lapse by reason of this Rule 11.1 until the first anniversary of the Option Holder’s death, if later;

 

(d)          the first anniversary of the Option Holder’s death;

 

(e)          subject to Rule 13.1, the expiry of any of the periods referred to in Rule 12;

 

(f)           the date on which it is purported to be transferred or assigned (other than by reason of death in accordance with Rule 9.4), mortgaged, charged or otherwise disposed of by the Option Holder;

 

 

(g)          the successful presentation of any petition to any court of competent jurisdiction by which an order is sought for the bankruptcy of the Option Holder;

 

(h)          upon the Option Holder making an application for an interim order or any proposal for a voluntary arrangement within Part VIII of the Insolvency Act 1986;

 

(i)           upon the Option Holder proposing any form of compromise with his creditors or any class of creditors; and

 

(j)           the date on which the Option Holder is deprived (otherwise than on death) of the legal or beneficial ownership of the Option by operation of law or by the Option Holder doing or omitting to do anything which causes him to be so deprived.

 

12.	Takeover, Reconstruction, Liquidation and Sale of the Business

 

12.1

Offer

 

If any person obtains Control of the Company as a result of:

 

(a)           making an offer to acquire the whole of the issued share capital of the Company which is made on a condition such that, if it is satisfied, the person making the offer will have Control of the Company; or

 

(b)          making a general offer to acquire all the shares in the Company which are of the same class as those to which the Option relates;

 

(c)          negotiating a share sale and purchase agreement with the shareholders of the Company which contemplates that the person will acquire the whole of the issued share capital of the Company on completion;

 

(an “Offer”), an Option may be exercised to the extent set out in Rule 12.2, in accordance with the provisions of Rule 12.3.

 

12.2

An Option may be exercised under Rule 12.1 (and, for the avoidance of doubt) under Rules 12.5, 12.6, 12.7 and 12.9) to the extent Vested as at the date of such Offer or other event under this Rule 12, and the Directors (acting with Investor Director Consent) may, at their discretion, allow an Option Holder to exercise any Unvested Option(s).

 

12.3	Notification of Offer

 

(a)          If the Directors (acting on behalf of the Company) notify the Option Holder in writing as soon as practicable of the fact that such person has made an Offer under Rule 12.1 (the “Notification”) which may result in that person obtaining Control of the Company (and for the purposes of this Rule 12.3 the time that Control is obtained shall be referred to as the “Unconditional Time”), the Option Holder may deliver his Notice of Exercise and the aggregate Option Price (under the procedure in Rule 10.1) at any time in the period commencing on the Option Holder’s receipt of the Notification and ending immediately before the Unconditional Time. Any Notice of Exercise delivered in accordance with this Rule 12.3 shall be exercised immediately before the Unconditional Time. The Option shall not be exercisable following the Unconditional Time but may still be released under Rule 13 within the period of six months following the change of Control of the Company and on the expiry of the said six month period the Option shall lapse; or

 

 

(b)          In the event that no Notification is made (as permitted by Rule 12.3(a), the Option may be exercised within 90 days (or within any longer time period as referred to in section 532(1)(b) ITEPA) of such change of Control. The Option shall not be exercisable after 90 days (or within any longer time period as referred to in section 532(1)(b) ITEPA) from the date of the change of Control but may still be released under Rule 13 within the period of six months following the change of Control of the Company and on the expiry of the said six month period the Option shall lapse.

 

(c)           For the avoidance of doubt, where a Notification is made in Rule 12.3(a) and the Directors become aware that the proposed Offer will not proceed, the Directors shall return the Notice of Exercise and the aggregate Option Price to the Option Holder, and no exercise of the Option shall be treated as having occurred in relation to such offer under Rule 12.1.

 

12.4

Control

 

For the purposes of Rule 12.1 a person shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it.

 

12.5	Scheme of arrangement

 

If any person obtains Control of the Company in pursuance of a compromise or arrangement sanctioned by the court under section 899 of the Companies Act (a “Compromise”), an Option may be exercised to the extent set out in Rule 12.2 within 90 days (or within any longer time period as referred to in section 532(1)(b) ITEPA) of the court sanctioning the Compromise. An Option shall not be exercisable after the said 90 days (or longer time period as referred to in section 532(1)(b) ITEPA) but may still be released under Rule 13 within the period of six months following the court sanction of the Compromise and, on the expiry of the said six month period, the Option shall lapse.

 

12.6	Chapter 3, Part 28 of the Companies Act - Squeeze out provisions

 

If any person becomes bound or entitled to acquire shares under Chapter 3, Part 28 of the Companies Act, an Option may be exercised to the extent set out in Rule 12.2 at any time when that person remains so bound or entitled.

 

12.7	Liquidation

 

If a general meeting of the Company is called at which it is proposed to pass a resolution for the members’ voluntary winding up of the Company, the Company shall notify the Option Holder as soon as practicable of this fact. An Option may be exercised to the extent set out in Rule 12.2 during the period of such notice (such exercise being conditional on such resolution being passed and taking effect immediately thereafter) and such portion of the Option not otherwise exercised before such resolution has been passed shall thereupon lapse. Where the Option Holder has exercised the Option pursuant to this Rule 12.7 and the resolution referred to above has been passed then (subject to the consent of the Company’s liquidator where such is required by section 88 of the Insolvency Act 1986) the exercise of the Option shall take effect immediately and the Option Holder shall be entitled to share in the assets of the Company with the existing shareholders in the same manner as the Option Holder would have been entitled had the Option Holder been the registered owner of the relevant Shares before the resolution was passed. For the avoidance of doubt, this Rule 12.7 will not apply to a creditors’ voluntary winding up.

 

 

12.8	Reorganisation

 

An Option may not be exercised under Rule 12.1 if the Offer is part of a reorganisation so that the shareholders of the Acquiring Company hold their shares in the Acquiring Company in the same proportions as they held their shares in the Company.

 

12.9	Sale of Business

 

An Option may be exercised to the extent set out in Rule 12.2 within 90 days (or within any longer time period as referred to in section 532(1)(b) ITEPA) of a Sale of the Business and the Company shall notify the Option Holder as soon as practicable of this fact. The Directors (acting with the Investor Director Consent) may permit exercise of an Option at their discretion in the event of a sale of a material part of the business (which does not constitute a Sale of the Business).

 

12.10

Admission to Listing

 

If the Company’s shares are admitted to listing on the Main Market of the London Stock Exchange, AIM or to or any other securities exchange, an Option may be exercised to the extent Vested during such periods as the Directors shall determine in their discretion, and the Directors (acting with Investor Director Consent) may, at their discretion, allow an Option Holder to exercise any Unvested part of an Option during such periods.

 

13.	Replacement Options

 

13.1	Grant of Replacement Options

 

If any company (the “Acquiring Company”):

 

(a)          obtains Control of the Company as a result of making an Offer in accordance with Rule 12.1(a) or 12.1(b); or

 

(b)          obtains Control of the Company as a result of a Compromise in accordance with Rule 12.5; or

 

(c)           becomes bound or entitled to acquire the Shares under Chapter 3, Part 28 of the Companies Act in accordance with Rule 12.6, or

 

(d)          obtains all the Shares as a result of a Qualifying Exchange within Rule 13.3,

 

an Option Holder may at any time within the period set out in Rule 13.2, by agreement with the Acquiring Company, release any Option which has not lapsed (the “Old Option”) in consideration of the grant to him of an Option (the “New Option”) which is equivalent to the Old Option but relates to shares in the Acquiring Company and qualifies as a Replacement Option as set out in Rules 13.4 and 13.5.

 

 

13.2	Period within which Replacement Option to be granted

 

The New Option must be granted within the following periods:

 

(a)          if the change of Control is by reason of a general offer in accordance with Rule 12.1, the period of six months beginning with the time when the person making the offer has obtained control of the Company and any condition subject to which the offer is made is satisfied;

 

(b)          if the change of Control is by reason of a Compromise (in accordance with Rule 12.5) or a Qualifying Exchange the period of six months beginning with the time when the Acquiring Company obtains Control of the Company whose shares are subject to the Old Option;

 

(c)           if the change of Control occurs under Chapter 3, Part 28 of the Companies Act, the period during which the Acquiring Company remains bound or entitled in accordance with those procedures.

 

13.3	Exchange of Shares

 

(a)          An exchange of shares will be treated as a Qualifying Exchange where arrangements are made in accordance with which a company (the “New Company”) acquires all the shares (the “Old Shares”) in another company (the “Old Company”) and the following conditions are met:

 

(i)            that the consideration for the Old Shares consists wholly of the issue of shares (the “New Shares”) in the New Company;

 

(ii)           that New Shares are issued in consideration of Old Shares only at times when there are no issued shares in the New Company other than:

 

(A)

subscriber shares, and

 

(B)

New Shares previously issued in consideration of Old Shares;

 

(iii)          that the consideration for New Shares of each description consists wholly of Old Shares of the corresponding description;

 

(iv)          that New Shares of each description are issued to the holders of Old Shares of the corresponding description in respect of, and in proportion to, their holdings; and

 

(v)           that by virtue of section 127 of the Taxation of Chargeable Gains Act 1992 as applied by section 135(3) of that Act, the exchange of shares is not treated as involving a disposal of the Old Shares or an acquisition of the New Shares.

 

(b)          For the purposes of this Rule Old Shares and New Shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights, and references to “shares”, except in the expression “subscriber shares”, includes securities.

 

 

13.4	Qualifying requirements for Replacement Option

 

Subject to Rule 13.5, a New Option qualifies as a Replacement Option only if:

 

(a)          the New Option is granted to the Option Holder by reason of his employment:

 

(i)            with the Acquiring Company, or

 

(ii)           if that company is a Parent Company, with that company or another Group Company;

 

(b)          at the time of the release of rights under the Old Option, the purpose for granting the New Option is for commercial reasons in order to recruit or retain an Eligible Employee, and not as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax;

 

(c)           at that time,

 

(i)            the Independence Requirement and the Trading Activities Requirement are met in relation to the Acquiring Company;

 

(ii)           the individual to whom the New Option is granted is an Eligible Employee in relation to the Acquiring Company; and

 

(iii)          the New Option would satisfy the requirements of being an EMI Option set out in Part V of Schedule 5;

 

(d)          the total Market Value, immediately before the release, of the Shares which were subject to the Old Option is equal to the total Market Value, immediately after the grant, of the Shares in respect of which the New Option is granted; and

 

(e)          the total amount payable by the employee for the acquisition of shares in pursuance of the New Option is equal to the total amount that would have been payable for the acquisition of shares in pursuance of the Old Option.

 

13.5	Provided that a Replacement Option for an Unapproved Option shall not have to satisfy the requirements in Rule 13.4(b) and Rule 13.4(c).

 

13.6	Where, in accordance with this Rule 13, an Option is released and a New Option granted, the New Option shall not be exercisable in accordance with Rule 12 by virtue of the event which gave rise to the New Option being granted.

 

14.	Loss of Office or Employment

 

14.1

The grant of an Option does not form part of the Option Holder’s entitlement to remuneration or benefits pursuant to his contract of employment nor does the existence of a contract of employment between an Eligible Employee and any company give such Eligible Employee any right or entitlement to have an Option granted to him in respect of any number of Shares or any expectation that an Option might be granted to him whether subject to any conditions or at all and the grant of an Option shall not give him any entitlement or expectation that further Options will be granted.

 

 

14.2	The rights and obligations of an Option Holder under the terms and conditions of his office or employment shall not be affected by his participation under the Rules or any right he may have to participate.

 

14.3

An individual who participates under the Rules waives all and any rights to compensation or damages in consequence of the termination of his office or employment with any company for any reason whatsoever, whether lawful or not, in so far as those rights arise, or may arise, from his ceasing to have rights under or be entitled to exercise any Option under the Rules as a result of such termination or from the loss or diminution of value of such rights or entitlements. If necessary, the Option Holder’s terms of employment shall be varied accordingly.

 

15.	Adjustments

 

15.1	General rule

 

The number of Shares over which an Option is granted and the Option Price thereof shall be adjusted in such manner as the Directors shall reasonably determine following any capitalisation issue, rights issue, subdivision, consolidation or reduction of share capital of the Company or any other variation of share capital to the intent that (as nearly as may be) the total Option Price multiplied by the number of Shares that is payable in respect of an Option shall remain unchanged.

 

15.2	Reduction of Option Price to below nominal value

 

Subject to Rule 15.3 below, an adjustment may be made under Rule 15.1 above which would have the effect of reducing the Option Price of unissued shares to less than the nominal value of a Share, but only if, and to the extent that, the Directors shall be authorised to capitalise from the reserves of the Company a sum equal to the amount by which the aggregate nominal value of the Shares in respect of which the Option is exercisable exceeds the aggregate adjusted Option Price, so that on exercise of any Option in respect of which the Option Price has been reduced, the Directors shall capitalise and apply such sum (if any) as is necessary to pay up the amount by which the aggregate nominal value of the Shares in respect of which the Option is exercised exceeds the aggregate Option Price for such Shares.

 

15.3	Option over issued and unissued Shares

 

Where an Option subsists over both issued and unissued Shares, an adjustment permitted by Rule 15.2 above, may only be made if the reduction of the Option Price of both issued and unissued Shares can be made to the same extent.

 

15.4	Administrative steps

 

The Directors shall notify Option Holders of any adjustment made under this Rule 15 as soon as reasonably practicable and may take such steps and the Company shall execute such documents as it considers necessary to give effect to such adjustment. Furthermore, and without limitation to the generality of the foregoing, the Directors may call in, cancel, endorse, issue or reissue any Option Agreement subsequent upon such adjustment.

 

 

 

16.

General

 

16.1

Amendments

 

(a)

Subject to Rules 16.1(b) to 16.1(d), the Directors shall have the discretion to:

 

(i)            amend or add to the Rules; and

 

(ii)           impose additional conditions or requirements on the Options or on the terms on which Shares are acquired.

 

(b)

No amendments may be made to the Rules which would have the effect of causing EMI Options to cease to be EMI Options.

 

(c)

The Directors may at any time make such alterations (including additions) to the Rules as are necessary to secure that the Rules as applicable to EMI Options are in accordance with Schedule 5 and continue to be in accordance with Schedule 5.

 

(d)

No amendment or addition shall be made to the Rules which would abrogate or adversely affect the subsisting rights of Option Holders unless:

 

(i)           where the rights are enjoyed by a single Option Holder and are not enjoyed by any other Option Holder or class of Option Holders, it is made with the written consent of that Option Holder; or

 

(ii)           where the rights are enjoyed by all Option Holders or any class of Option Holders then:

 

(A)

with the consent in writing of such number of Option Holders or class of Option Holders (as the case may be) as hold Options under the Scheme to acquire 75 per cent (75%) of the Shares which would be issued or transferred if all Options granted and subsisting under the Scheme were exercised; or

 

(B)

by a resolution at a meeting of Option Holders or class of Option Holders passed by not less than 75 per cent (75%) of the Option Holders who attend and vote either in person or by proxy; and for the purpose of this Rule 16.1(d) the Option Holders or any class of Option Holders shall be treated as the holders of a separate class of share capital and the provisions of the Articles of Association of the Company relating to class meetings shall apply mutatis mutandis.

 

16.2

Termination

 

The Scheme shall terminate upon the tenth anniversary of the Adoption Date or at any earlier time by the passing of a resolution by the Directors. Termination shall be without prejudice to the subsisting rights of Option Holders.

 

 

16.3

Conflict with Schedule 5

 

If there is any conflict between the provisions of the Rules as they apply to EMI Options and Schedule 5, Schedule 5 shall take precedence in respect of EMI Options.

 

16.4

Notices and documents

 

(a)

Option Holders not otherwise entitled thereto may at the discretion of the Company be sent copies of notices and other documents sent by the Company to its ordinary shareholders generally.

 

(b)

Written notice of any amendment made in accordance with this Rule 16 shall be given to those Option Holders affected by such amendment.

 

(c)

Any notice or other document required to be given hereunder to any Option Holder shall be delivered to him by one of the following methods:

 

(i)

by hand to his home address according to the records of the Company or such other address as may appear to the Directors to be appropriate. Such notices shall be deemed to have been given on the date of delivery;

 

(ii)

by first class pre-paid post to him at his home address according to the records of the Company or such other address as may appear to the Directors to be appropriate. Such notices shall be deemed to have been given on the second business day following the date of posting;

 

(iii)

by email to the Option Holder’s work email address (or personal email address, if known to the Company). Such notices shall be deemed to have been given on the date the email is sent; or

 

(iv)

by fax, to a fax number given to the Company by the Option Holder. Such notices shall be deemed to have been given on the date the email is sent.

 

(d)

Any notice or other document required to be given to the Directors shall be delivered to the Directors or sent by first class pre-paid post to the Directors at the Company’s registered office or such other address as may be determined by the Directors to be appropriate. Such notices shall be deemed to have been given on the second business day following the date of posting.

 

16.5

Disputes

 

The decision of the Directors in any dispute or question relating to any Option shall be final and conclusive subject to the terms of this Scheme.

 

16.6

Governing Law

 

The Rules shall be governed by and construed in accordance with English law.

 

16.7

Contracts (Rights of Third Parties) Act 1999

 

Except as expressly provided by the Company, a person who is not the Option Holder or a company who is not a member of the Group has no right under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any provisions of this Scheme, but this does not affect any right or remedy of a third party which exists or is available apart from that Act. The Option Holder may not declare himself a trustee of his rights under this Scheme for the benefit of any third parties.

 

 

16.8

Data Protection

 

The Company and the Employer Company (if different) from time to time will collect, hold and process the Option Holder’s personal information for the purposes of the administration of this Option. The Company will not use such personal information for any purpose other than the administration of the Option, unless the Option Holder’s consent to that use is obtained.

 

17.

Overseas Employees

 

Notwithstanding any other provision of the Scheme the Directors may amend or add to the provisions of the Scheme and the terms of Option Agreements they consider necessary or desirable to take account of, or to mitigate, or to comply with relevant overseas taxation, securities or exchange control laws, provided that the terms of Options granted to such Employees are not more favourable overall than the terms of Awards granted to other Employees.

 

18.

Supplementary Provisions

 

The Group shall not be liable to the Option Holder for any tax or additional tax or national insurance payable by the Option Holder upon the exercise of an Option or upon the subsequent disposal of any Shares acquired upon exercise of the Option being tax or national insurance payable because of a failure to qualify for relief under sections 529 to 532 of ITEPA in consequence of anything done by the Group.

 

 

SCHEDULE 1

 

OPTION AGREEMENT

 

THIS DOCUMENT IS IMPORTANT AND SHOULD BE KEPT IN A SAFE PLACE

 

THIS OPTION AGREEMENT is made the [•] day of [•] 20

 

BETWEEN

 

(1)

VACCITECH LIMITED (registered no 09973585) whose registered office is at Magdalen Centre, 1 Robert Robinson Avenue, The Oxford Science Park, Oxford, Oxfordshire OX4 4GA (the “Company”); and

 

(2)

[Name] of [Address] (the “Option Holder”)

 

SUPPLEMENTAL to the rules of the Vaccitech Limited EMI Share Option Scheme (the “Scheme”). Any words or expressions used in this option agreement and defined by the Scheme shall bear the same meaning in this agreement.

 

INTRODUCTION:

 

(A)       The Company intends to grant an Option to the Option Holder.

 

(B)       The Option is intended to be an [EMI option/unapproved option].

 

(C)       [The Option is granted under Schedule 5 ITEPA 2003.]

 

AGREED TERMS

 

1

Grant

 

The Company GRANTS an [EMI option/unapproved option] to the Option Holder and the Option Holder AGREES to be bound in all respects by the provisions of the Scheme and ACCEPTS the grant on the terms set out in their agreement.

 

2

Terms of the Scheme

 

2.1

Under the terms of the Scheme the Option Holder may acquire the number of ordinary shares (the “Shares”) in the Company stated in 7.1(a) at the Option price per Share set out in 7.1(b).

 

2.2

The Option is granted and exercisable subject to the terms and conditions set out in the Scheme and in this Option Agreement.

 

3

Articles

 

Any Shares allotted or transferred pursuant to the exercise of the Option are subject to the articles of association of the Company (as amended from time to time) and to any necessary consents of any governmental or other authorities under any enactments from time to time in force.

 

 

4

Restrictions

 

The Shares allotted or transferred pursuant to the exercise of the Option are subject to restrictions in the Articles of the Company and in the subscription and shareholders’ agreement which are summarised at Appendix 2 to this Option Agreement.

 

5

Non transferable

 

The Option is personal to the Option Holder and is not transferable, assignable or chargeable.

 

6

Exercise

 

The Option shall not be exercisable on or after the 10th Anniversary of the Date of Grant.

 

7

Grant

 

7.1

The details of the grant are as follows; namely

 

(a)

Number of Shares subject to the Option

[•].

 

(b)

Option Price per Share

[•].

 

(c)

Date of Grant

[•].

 

(d)

Vesting Commencement Date

[•].

 

7.2

The Option Holder irrevocably agrees to reimburse the Relevant Company for any Employer’s NICs arising on the exercise of an Option; or agrees to enter into an election with the Relevant Company to assume the liability for any Employer’s NICs, payable on the exercise of the Option, including an election under paragraph 3B of Schedule 1 to the Social Security Contributions and Benefits Act 1992.

 

7.3

The exercise of the Option shall be conditional upon the Option Holder making good any Tax Liability in relation to the Option, or entering into arrangements acceptable to the Company in respect of such Tax Liability, in accordance with rule 10.4 of the Scheme.

 

7.4

The Option shall Vest in accordance with the Vesting Schedule at Appendix 1 to this Option Agreement.

 

8

Working Time Declaration

 

The Option Holder hereby declares, pursuant to the requirement set out in paragraph 44(5)(c) of Schedule 5, that he works for the Company or for a subsidiary of the Company for at least 25 hours a week or, if less, at least 75% of his working time, and therefore satisfies the Committed Time requirement in paragraph 26 of Schedule 5.

 

 

This option agreement has been executed as a deed and unconditionally delivered on the date first above written.

 

SIGNED as a DEED	)
by VACCITECH LIMITED	)
acting by a director	)
		Director
Signature of Witness:
Name of Witness:
Address:
Occupation:
SIGNED as a DEED	)
by [Option Holder]	)
Signature of Witness:
Name of Witness:
Address:
Occupation:

 

NOTE: The Company shall retain the original signed and dated option agreement and give a copy to the Option Holder within 7 days to satisfy paragraph 44(5A) of Schedule 5 or two copies of the option agreement shall be signed, one for the Company and one for the Option Holder.

 

 

APPENDIX 1

 

Vesting Schedule

 

The Vesting Schedule is as follows that the Shares shall Vest in four equal annual instalments from the Vesting Commencement Date, so that the Option shall be fully Vested on the fourth anniversary of the Vesting Commencement Date. The number of Shares that Vest shall be rounded up to the nearest whole number of Shares.

 

 

APPENDIX 2

 

Restrictions Summary

 

The following is a summary of the restrictions on the Shares, so that the Option Holder has an understanding of the restrictions prevailing at the time of the grant of the Option.

 

Restrictions in Articles of Association

 

The references are to the articles of association of the Company adopted on 10 November 2017 (the “Articles”), which can be obtained from [Graham Griffiths], and any defined terms are defined in the Articles. For full details, the Option Holder should refer to the Articles.

 

Liquidation preference (Articles 5 and 6)

 

On a distribution of assets, distributions will only be made to holders of Ordinary Shares, pro rata to the number of Ordinary Shares held, of the surplus of assets (if any) after an amount per share held equal to the Preference Amount has been distributed to Series A Shareholders, and a total of £1.00 has been distributed to the holders of any Deferred Shares. On a Share Sale, the proceeds of sale are dealt with in a similar way.

 

Down round protection (Article 10)

 

The Series A shares have anti-dilution protection which is not available to the Ordinary Shares.

 

Pre-emption (Article 13)

 

The Ordinary Shares are subject to pre-emption rights, but these do not apply to Ordinary Shares acquired on the exercise of options.

 

Restrictions on transfers of Shares (Article 14)

 

A Transfer Notice will be deemed to be served in respect of all a Shareholder’s Shares if that Shareholder transfers or purports to transfer a Share other than in accordance with the Articles.

 

Transfers to the following may be refused by the Directors:

 

·

Bankrupts, minors, persons of unsound mind;

 

·

Employees who have not entered into a joint s.431 ITEPA election;

 

·

More than four transferees

 

The Directors may refuse a transfer:

 

·

of a Share which is not fully paid to a person of whom the Directors do not approve, or on which Share the Company has a Lien;

 

·

which is not lodged at the registered office;

 

·

which is not accompanied by a certificate or acceptable indemnity;

 

 

·

in respect of more than one class of Shares; and

 

·

In certain other circumstances provided by the articles.

 

The Directors may require the transferee to agree to be bound by the Shareholders’ Agreement as a condition of transfer.

 

If a disposal of Shares is made in breach of the Articles, or interested parties fail to provide information to enable the Directors to determine whether this is the case, the relevant shares will cease to carry voting rights or entitlement to dividends or other distributions, and the holder may be required to transfer some or all of their Shares at a price required by the Directors.

 

Restrictions on Permitted Transfers (Article 15)

 

No transfer of Shares may be made to Trustees unless the Board is satisfied as to certain conditions.

 

The following must transfer their Shares to the Original Shareholder or a Permitted Transferee of the Original Shareholder, or give a Transfer Notice to the Company:

 

·

Permitted Transferees by virtue of marriage or Civil Partnership who cease to be a spouse or Civil Partner of the Original Shareholder;

 

·

The personal representatives of a deceased Permitted Transferee.

 

Pre-emption rights on transfer of Shares (Article 16)

 

A Seller must give other Shareholders the opportunity to purchase Sale Shares before they are offered to a proposed third party transferee. The purchase price will be the Fair Value, determined by an expert as per Article 17, if a value cannot be agreed. Only those Sale Shares not purchased under this pre-emption process may be sold to a third party, which must not be a competitor - and this sale must be bona fide and is subject to adequate information being provided to the Board to determine this.

 

Compulsory transfers (Article 18)

 

A Transfer Notice will be deemed to be given by:

 

·

Persons entitled to a Share in consequence of a Shareholder’s bankruptcy; and

 

·

Personal representatives of a deceased Shareholder, following the first anniversary of that Shareholder’s death.

 

Departing employees - Bad Leaver provision (Article 19)

 

All Employee Shares held by a Bad Leaver will convert into worthless Deferred Shares on their Effective Termination Date. There are provisions for Good Leavers, but these do not apply to Ordinary Shares acquired on the exercise of an option.

 

 

Mandatory Offer on a Change of Control (Article 20)

 

A Proposed Seller may only make a Proposed Transfer (to a Proposed Purchaser who would acquire a Controlling Interest in the Company) if the Proposed Purchaser makes an offer to the other Shareholders to acquire all of the Equity Shares at at least the Specified Price.

 

Co-Sale right (Article 21)

 

Any Selling Employee must give to each Equity Holder notice of a proposed sale which will give Equity Holders an opportunity to tag along on a proposed sale (subject to certain conditions).

 

Drag-along provisions (Article 22)

 

If the holders of at least 75% of the Equity Shares wish to transfer all their interest in Shares to a Proposed Purchaser, they have the option to compel the remaining shareholders to sell their shares to the Drag Purchaser, with the consideration being distributed pro rata in accordance with Articles 5 and 6.

 

Restrictions in Subscription and Shareholders’ Agreement

 

The references are to the Subscription and Shareholders’ Agreement between the Investors, the Founders, the Manager, the University, Oxford University Innovation Limited and the Company dated 10 November 2017, as varied by the Variation, Subscription and Adherence Agreement between the Investors, the Founders, the Manager, the University, OUI, the Company and SCC Venture VI Holdco, Ltd dated 10 January 2018 (the “Subscription and Shareholders’ Agreement”), which can be obtained from Graham Griffiths, and any defined terms are defined in the Subscription and Shareholders’ Agreement.

 

Restrictions on further issue and transfer

 

No transfer of Shares may take place without the transferee becoming bound by a Deed of Adherence, unless the Board (with Investor Majority Consent) approve otherwise.

 

 

 

SCHEDULE 2

 

NOTICE OF EXERCISE

 

TO:         The Secretary, Vaccitech Limited

 

I/We, being the holder or the Personal Representative(s) of the holder,* of an option granted over Vaccitech Limited shares (the “Option”):

 

1.1

hereby exercise the Option to acquire              ordinary shares in Vaccitech Limited (the “Shares”) at a price of £[•] per ordinary share, subject to the provisions contained in an Option Agreement dated [•] (the “Agreement”) made pursuant to the Vaccitech Limited EMI Share Option Scheme and made between Vaccitech Limited and [•];

 

1.2	enclose a cheque for the total price of the Shares (£           ) in favour of Vaccitech Limited (the “Company”) and crossed “a/c payee”, or such other documentation in respect of bridging finance or undertaking to procure payment as may be agreed by the Directors;

 

1.3	authorise and request you to enter my/our name(s) in the Company’s Register of Members as the holder(s) of the Shares, subject to the Company’s articles of association;

 

1.4	hereby covenant to pay the Company the amount of any Tax Liability** which may arise as a consequence of or in connection with this exercise of the Option (and, for the purposes of this Notice of Exercise, the expression “Tax Liability” has the same meaning as it has in the Agreement;

 

1.5	in order to give effect to this covenant, I/we hereby authorise and appoint the Company as my/our attorney in my/our name(s) and on my/our behalf:

 

(a)

to sell such number (but no more) of the Shares registered in my/our name(s) as will enable the Company (after payment of all necessary selling expenses and commissions) to recover and retain for itself from the sale proceeds an amount equal to such Tax Liability and then account to me/us for any cash balance remaining, provided that the Company may sell that number of shares at such price or prices as it shall, in its absolute discretion, consider fair and reasonable, and

 

(b)

generally to sign any stock transfer form or other document or documents which may be required and to do any other thing which the Company shall consider necessary or expedient for carrying out the acts hereby authorised in the same manner and as fully in all respects as I/we could have done personally and I/we hereby undertake to ratify everything which the Company shall do or purport to do by virtue of this power of attorney; and

 

1.6	request you to send a share certificate in respect of the Shares not sold pursuant to the authority given above (and, if appropriate, a balance option certificate) to me/us at the address given below.

 

 

SIGNED and DELIVERED as a DEED BY

 

Name				Address
Signature
Date

 

In the presence of:

 

Witness’ Name				Address
Witness’ Signature

 

* Personal Representatives should enclose an Office Copy of the relevant Grant of Probate or Letters of Administration.

 

** Persons exercising the option should consult with the Company as to whether any Tax Liability is anticipated, however the Company does not undertake to advise you on the tax consequences of exercising your Option. If you are unsure of the tax liabilities which may arise you should take appropriate professional advice before exercising your Option.

 

 

SCHEDULE 3

 

S.431 ELECTION

 

Joint Election under s.431 ITEPA 2003 for full or partial disapplication of Chapter 2
Income Tax (Earnings and Pensions) Act 2003

 

Employment-related securities acquired on exercise of qualifying options exercised
before the tenth anniversary of the date of grant.

 

One Part Election

 

BETWEEN the Employee	[•]
whose National Insurance Number is	[•]
and
the Company (which is the Employee’s employer) Vaccitech Limited
of Company Registration Number	09973585

 

Purpose of Election

 

This joint election is made pursuant to section 431(1) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.

 

The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply.

 

Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner.

 

Application

 

This joint election is made not later than 14 days after the date of acquisition of the securities by the employee and applies to:

 

Number of securities
Description of securities	Ordinary shares in the capital of Vaccitech Limited
Name of issuer of securities	Vaccitech Limited
Acquired by the Employee on

 

 

Extent of Application

 

This election disapplies s.431(1) ITEPA: All restrictions attaching to the securities.

 

Declaration

 

This election will become irrevocable upon the later of its signing or the acquisition of employment-related securities to which this election applies.

 

In signing this joint election, we agree to be bound by its terms as stated above.

 

		/     /
Signature (Employee)		Date
		/     /
Signature (for and on behalf of the Company)		Date
Position in Company

 

 

 

Exhibit 10.3

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

DATED                                4 March 2016  

 

(1)       ISIS INNOVATION LIMITED

 

and

 

(2)       VACCITECH LIMITED

 

LICENCE OF TECHNOLOGY
(ISIS PROJECT Nos. [***])

 

 

THIS AGREEMENT is made on                                                              4 March 2016

 

BETWEEN:

 

(1)

ISIS INNOVATION LIMITED (Company No. 2199542) whose registered office is at University Offices, Wellington Square, Oxford OX1 2JD, England ("Isis"); and

 

(2)

VACCITECH LIMITED (Company No. 9973585) whose registered office is at The Weston Library, Broad Street, Oxford, Oxfordshire, OX1 3BG (the "Licensee").

 

BACKGROUND:

 

(A)

The Licensed Technology is connected with Isis Projects [***] 'Adenovirus long promoter', [***] 'Universal influenza vaccine', [***] 'Poxvirus expression system', [***] 'Adenovirus vaccine vectors' ('ChAdOx1' & 'ChAdOx2') and Isis clinical data projects [***] 'Phase I MVA NP+M1', [***] 'MVA-NP+M1 Phase Ila challenge study', [***] 'MVA-NP+M1 Phase I in adults over 50', [***] 'MVA NP+M1 plus TIV Phase I', [***] 'ChAdOx1-NP+Ml Phase I' & [***] 'Phase I ChAdOx1 NP+M1 and MVA NP+M1 in heterologous prime-boost'.

 

(B)

The Licensee wishes to acquire a licence to the Licensed Technology in order to develop products in the area of influenza vaccines, cancer vaccines, varicella zoster vaccines and Middle East Respiratory Syndrome ("MERS") vaccines and Isis is willing to license the Licensed Technology to the Licensee, on the terms of this agreement.

 

AGREEMENT:

 

1.

Interpretation

 

In this agreement (including its Schedules), any reference to a "clause" or "Schedule" is a reference to a clause of this agreement or a schedule to this agreement, as the case may be. Words and expressions used in this agreement have the meaning set out in Schedule 1.

 

2.

Grant of Licence

 

2.1

In consideration of the payments required to be made under this agreement by the Licensee, Isis grants to the Licensee a licence in the Territory in respect of the Licensed Technology to develop, make, have made, use and have used and Market the Licensed Product subject to the terms and conditions of this agreement. Subject to clause 5, the Licence in respect of:

 

2.1.1

the Licensed Intellectual Property is :

 

(a)

in relation to Applications 1 and 2 (i) exclusive in the Field and (ii) non-exclusive in all other fields excluding veterinary applications (apart from MERS);

 

(b)

in relation to Application 3 exclusive in all fields excluding veterinary applications;

 

(c)

in relation to use of ChAdOx1 vector under Application 4 (i) exclusive in the Field and (ii) non-exclusive in all other fields excluding veterinary applications (apart from MERS) and the ChAdOx1 Excluded Fields provided that in the event that the Licensee fails to meet its diligence obligations under clause 10, as determined in accordance with this agreement, with regard to:

 

(i)

vaccines for MERS, including but not limited to the initiation of manufacture of GMP grade vaccine for MERS by 31 December 2016, the licence in respect of vaccine for MERS only will automatically become non-exclusive in all fields excluding the ChAdOx1 Excluded Fields; and

 

(ii)

vaccines for varicella zoster, including but not limited to the initiation of manufacture of GMP grade vaccine for varicella zoster by 1 September 2017 (or 1 March 2017 where grant funding has been raised for the Licensee to manufacture GMP grade vaccine for MERS), the licence in respect of vaccines for varicella zoster only will automatically become non-exclusive in all fields excluding the ChAdOx1 Excluded Fields and further, if by 1 September 2018, the Licensee has not initiated manufacture of GMP grade vaccine for varicella zoster that non-exclusive licence in respect of vaccines for varicella zoster will terminate;

 

 

(d)

in relation to use of the ChAdOx2 vector under Application 4 non-exclusive in all fields with the exclusion of all veterinary applications (apart from MERS) and the ChAdOx2 Excluded Fields.

 

2.1.2

the Clinical Data is exclusive in the Field; and

 

2.1.3

the Licensed Know-how is exclusive in the Field except in respect of Licensed Know-how relating to the ChAdOx2 Vector which is non-exclusive.

 

2.2

Except in respect of the ChAdOx2 Vector and in respect of the ChAdOx1 Vector with regard to vaccines for MERS and varicella zoster where the Licensee fails to meet its diligence obligations under clause 10, as determined in accordance with this agreement (including, without limitation, clause 2.1.1(c)), Isis will not grant a licence in the Field to any third parties with respect to the Licensed Know-how.

 

2.3

The Licensee may grant sub-licences with the prior written consent of Isis, such consent not to be unreasonably withheld, conditioned or delayed, provided that:

 

(a)

the sub-licensee has obligations to the Licensee commensurate with those which the Licensee has to Isis under this agreement, except the financial terms hereof or where it is not legally possible to include such obligations in the sub-licence;

 

(b)

the nature of the proposed sub-licensee is not likely in Isis's reasonable opinion to have any detrimental impact on the reputation of either Isis or of the University;

 

(c)

the sub-licensee has sufficient financial resources to develop and Market the Licensed Product (it being acknowledged and agreed that if the sub-licensee is a publicly-listed company with a market capitalisation equal to or in excess of [***] it will be considered to have sufficient financial resources to develop and Market the Licensed Product);

 

(d)

as soon as reasonably practicable following the grant of each sub-licence, the Licensee provides a certified copy of that sub-licence to Isis;

 

(e)

the sub-licensee enters into a Deed of Covenant with the Licensor in the form set out in Schedule 4;

 

(f)

Isis will be deemed to have consented to a sub-licence within [***]of receipt of such written request by the Licensee to grant a sub-licence, provided it has not refused consent or requested reasonable further time or information to consider the request within such [***] period; and

 

(g)

no sub-licence will carry any right to sub-sub-license.

 

2.4

Notwithstanding clause 2.3, no prior written consent from Isis will be required for sub-licences if:

 

(a)

the sub-licensee or an Affiliate of the sub-licensee, at the time of entering into a new sub-licence, is already a licensee or a sub-licensee of the Licensee in respect of all or part of the Licensed Technology; or

 

(b)

the sub-licensee is a subsidiary or an Affiliate of the Licensee;

 

 

provided always that the sub-licence complies with provisions (a), (d) and (e) of clause 2.3.

 

2.5

A decision by Isis not to give prior written consent under clause 2.3(b) or (c) shall be accompanied by a written description of the reasons for such disapproval, and the parties shall promptly (within [***]) discuss the reasons Isis has given and the Licensee may challenge such reasons.

 

3.

Materials and Clinical Data

 

3.1

Subject to clause 2.1 and the remainder of this clause 3, as between Isis and the Licensee the Materials and Clinical Data will remain the legal property of Isis and as at the date of this agreement the Materials and Clinical Data are held by the University.

 

3.2

During the term of this agreement, the Licensee will have the right to access and use the Materials at the University, upon giving Isis [***] written notice, in the quantities set out in Schedule 2 to develop, make, have made, use and have used and Market the Licensed Product in accordance with the Licence. Upon the Licensee's prior written instruction, Isis will, at the Licensee's cost, deliver the Materials in the quantities set out in Schedule 2 to such address as notified by the Licensee within [***] of the Licensee's prior written instruction for the Licensee to use for the aforementioned purposes. Subject to the rights retained by the University to use the Materials for Non-Commercial Use, the Licensee's right to use the Materials will be exclusive in the Field save:

 

3.2.1

in respect of the ChAdOx2 Vector the rights will be non-exclusive and subject to the terms of the ATCC MTA;

 

3.2.2

in respect of the ChAdOx1 5T4 master seed bank and the MVA 5T4 non-GMP stock the rights will be subject to any access rights to which consortium members may be entitled under the terms of the FP7 Consortium and Funding Agreements; and Isis will not grant access to or allow a third party to use any of the Materials in the Field except in relation to the ChAdOx2 Vector.

 

3.3

With regard to clause 3.2.1 and the ATCC MTA, Isis will use all reasonable endeavours to promptly agree a licence with ATCC to ensure that Isis can supply to the Licensee the ChAdOx2 non-GMP stock (Isis ref: [***]) under the ATCC MTA for commercial use and in order to Market Licensed Products.

 

3.4

The Licensee will have the right to access, use and reproduce the Clinical Data in accordance with the Licence. The Licensee will give Isis at least [***] notice to access the Clinical Data. Upon the Licensee's prior written instruction, Isis will, at the Licensee's cost, deliver copies of the Clinical Data to such address as notified by the Licensee within [***] of the Licensee's prior written instruction for the Licensee to use to develop, make, have made, use and have used and Market the Licensed Product in accordance with the Licence.

 

4.

Improvements

 

4.1

The Licensed Technology covered by the Licence in clause 2 includes Inventor Improvements. Isis will communicate in writing to the Licensee within a reasonable time, and in any event [***] of becoming aware of the same, all Inventor Improvements.

 

4.2

The Licensee acknowledges and agrees that all Intellectual Property Rights in Inventor Improvements belong to Isis.

 

4.3

The Licensee will communicate in writing to Isis within [***] of intended publication all Licensee Improvements.

 

4.4

Isis acknowledges and agrees that all Intellectual Property Rights in the Licensee Improvements belong to the Licensee.

 

 

5.

Rights re Non-Commercial Use

 

5.1

The Licensee grants Isis an irrevocable, perpetual, royalty-free licence to grant the University and those persons who at any time work or have worked on the Licensed Technology the licence set out in clause 5.2.

 

5.2

Isis has granted and, in respect of Licensee Improvements, will grant, to the University and those persons who at any time work or have worked on the Licensed Technology a non- transferable, irrevocable, perpetual, royalty-free licence to use and publish the Licensed Technology and the Licensee Improvements for Non-Commercial Use.

 

5.3

Where the University wishes to submit a publication including Licensee Improvements, Isis shall procure that the University will use all reasonable endeavours to submit such draft publication to the Licensee in writing not less than [***] in advance of the submission for publication. The Licensee may make a written request to the University to delay submission for publication if, in the Licensee's reasonable opinion, such delay is necessary in order to seek patent or similar protection for the Licensee Improvements. A delay imposed on submission for publication as a result of a written request made by the Licensee shall not last longer than is necessary to seek required protection; and therefore shall not exceed [***] from the date of receipt of the written request to delay submission for publication by the Licensee, although Isis will procure that the University will not unreasonably refuse a request from the Licensee for additional delay in the event that Intellectual Property Rights would otherwise be lost. Notification of the requirement for delay in submission for publication must be received by the University within [***] after the receipt of the notice of intention to publish by the Licensee, failing which the University shall be free to assume that the Licensee has no objection to the proposed publication.

 

5.4

Isis reserves the right to grant Academic and Research licences to encourage basic research for Non-Commercial Use, whether conducted at an academic facility or subcontracted to a corporate facility, but not for the purposes of permitting commercialisation of the Licensed Technology licensed exclusively in the Field, or to authorise the development or marketing of products or services that are produced or supplied entirely or partially using the Licensed Technology.

 

6.

Filing and Maintenance

 

6.1

The Licensee will pay Isis the Past Patent Costs representing the Licensee's sole contribution to the patent costs incurred by Isis prior to the parties entering into this agreement, within [***] of receiving an invoice from Isis following execution of this agreement.

 

6.2

Isis will, in consultation with the Licensee and at the Licensee's cost, prosecute, use all reasonable endeavours to maintain, and renew the Applications throughout the duration of this agreement and in relation to Application 4 will use all reasonable endeavours to file and maintain any further patent application to the extent it is required in order to provide patent coverage for the ChAdOx2 Vector. Isis will give all reasonable consideration to the views of the Licensee and will not unreasonably refuse to prosecute, maintain or renew Applications provided always that the Licensee agrees to bear the costs of such action according to this Clause 6.2. The Licensee will reimburse Isis for all costs, filing fees, lawyers' and patent agents' fees, expenses and outgoings of whatever nature incurred by Isis in the prosecution, maintenance and renewal of the Applications (including those incurred in opposition proceedings before the European Patent Office or in ex parte re-examination or inter partes review proceedings in the United States Patent and Trademark Office ("USPTO") or any similar proceedings before any patent office challenging the grant or validity of the Applications) within [***] of receiving an invoice from Isis. Isis shall be entitled to make it a condition of any action of Isis under this clause 6.2 that the Licensee provides Isis with sufficient money in advance to cover the costs likely to be incurred in the action.

 

6.3

Where the Application is prosecuted in the USPTO and the Licensee is a small business concern as defined under the US Small Business Act (15USC632) Isis intends to pay reduced USPTO patent fees under US patent law 35 USC 41(h)(1). The Licensee will notify Isis as soon as reasonably possible if it or a sub-licensee ceases to be a small business concern as defined under the US Small Business Act (15USC632) or becomes aware of any other reason why it would not qualify for reduced USPTO patent fees under US patent law 35 USC 41(h)(1).

 

 

6.4

The Licensee shall inform Isis not less than [***] in advance of the National Phase filing deadline (noted in Schedule 2) of the territories within the scope of the PCT that it wishes to be covered in the National Phase of the Applications. In the event that the Licensee does not give the required minimum of [***] advance notice Isis shall then be entitled to proceed with filing the Applications at the Licensee's cost in whichever territories as it may in its sole discretion decide.

 

6.5

The Licensee shall be entitled to remove any one or more of the countries from the Territory at any time by giving not less than [***] notice to Isis. If the Applications are proceeding under the PCT then such notice may not be given any earlier than the date for commencement of the National Phase filing. For the avoidance of doubt the Licensee shall remain liable for the costs mentioned in clause 6.2 that arise or are incurred by Isis during the said notice period in respect of the countries being removed.

 

6.6

In the event that Isis elects to discontinue the prosecution and/or maintenance of any of the Applications, the Licensee shall have the right but not the obligation to take over prosecution and maintenance of the Applications Isis has elected to discontinue.

 

7.

Infringement

 

7.1

Each party will notify the other in writing of any misappropriation or infringement of any rights in the Licensed Technology of which the party becomes aware.

 

7.2

The Licensee has the first right (but is not obliged) to take Legal Action at its own cost in relation to any misappropriation or infringement of any rights included in the Licensed Technology in the Field. The Licensee must discuss any proposed Legal Action with Isis prior to the Legal Action being commenced, and take due account of the legitimate interests of Isis in the Legal Action it takes provided always that the Licensee may act without further consultation if rights in the Licensed Technology would otherwise be prejudiced or lost.

 

7.3

If the Licensee takes Legal Action under clause 7.2, the Licensee will:

 

(a)

except where any Legal Action arises directly as a result of a breach by Isis of the warranties in Clause 13.2, indemnify and hold Isis and the University harmless against all costs (including lawyers' and patent agents' fees and expenses), claims, demands and liabilities arising out of or consequent upon a Legal Action and will settle any invoice received from Isis in respect of such costs, claims, demands and liabilities within [***] of receipt; and

 

(b)

treat any account of profits or damages (including, without limitation, punitive damages) awarded in or paid to the Licensee under any settlement of the Legal Action for any misappropriation or infringement of any rights included in the Licensed Technology as Net Sales for the purposes of clause 9, having first for these purposes deducted from the award or settlement an amount equal to any legal costs incurred by the Licensee in the Legal Action that are not covered by an award of legal costs; and

 

(c)

keep Isis regularly informed of the progress of the Legal Action, including, without limitation, any claims affecting the scope of the Licensed Technology.

 

7.4

Isis may take Legal Action at its own cost in relation to any misappropriation or infringement of any rights included in the Licensed Intellectual Property in the Field where:

 

(a)

the Licensee has notified Isis in writing that it does not intend to take any Legal Action in relation to any misappropriation or infringement of any rights included in the Licensed Technology in the Field;

 

(b)

if having received professional advice with regard to any Legal Action within [***] of the notification under clause 7.1, and consulted with Isis, the Licensee does not take reasonable steps to act upon an agreed process for dealing with such misappropriation or infringement (which may include, for the avoidance of doubt, seeking a second opinion in respect of such professional advice) within any timescale agreed between Isis and the Licensee and in any event within [***] of notification under clause 7.1. Isis may take such Legal Action at its own cost provided it shall not settle any action without first consulting with the Licensee and taking account of the reasonable observations and requests of the Licensee.

 

 

8.

Confidentiality

 

8.1

Subject to clauses 8.2, 8.3 and 8.4, each party (being a receiving or disclosing party as the case may be) will keep confidential the Confidential Information of the other party and will not disclose or supply the Confidential Information to any third party or use it for any purpose, except in accordance with the terms and objectives of this agreement.

 

8.2

The Licensee may disclose to sub-licensees of the Licensed Technology such of the Confidential Information as is necessary for the exercise of any rights sub-licensed, provided that the Licensee shall ensure that such sub-licensees accept a continuing obligation of confidentiality on the same terms as this clause, and giving third party enforcement rights to Isis, before the Licensee makes any disclosure of the Confidential Information. The Licensee may also disclose the Licensed Technology to the extent reasonably required in connection with the conduct of its business including to potential investors, other business associates and professional advisors provided that such persons have agreed in writing to be bound by non-use and non-disclosure obligations that are no less strict than those set forth in this agreement or are subject to professional codes of conduct that prevent disclosure of client confidential information and the Licensee will take action in respect of any breach of such obligations.

 

8.3

Confidential Information may be exchanged freely between Isis and the University and communications between those two parties shall not be regarded as disclosures, dissemination or publication for the purpose of this agreement. Isis may also disclose the terms of this agreement and royalty reports and payments made by the Licensee to any third parties that have rights to a revenue share for providing funding in the development of the Licensed Technology provided that such persons have agreed in writing to be bound by non-use and non-disclosure obligations that are no less strict than those set forth in this agreement or are subject to professional codes of conduct that prevent disclosure of client confidential information and Isis will take action in respect of any breach of such obligations.

 

8.4

Clause 8.1 will not apply to any Confidential Information which:

 

(a)

is known to the receiving party before disclosure, and not subject to any obligation of confidentiality owed to the disclosing party;

 

(b)

is or becomes publicly known without the fault of the receiving party;

 

(c)

is obtained by the receiving party from a third party in circumstances where the receiving party has no reason to believe that it is subject to an obligation of confidentiality owed to the disclosing party;

 

(d)

the receiving party can establish by reasonable proof was substantially and independently developed by officers or employees of the receiving party who had no knowledge of the disclosing party's Confidential Information; or

 

(e)

is approved for release in writing by an authorised representative of the disclosing party.

 

8.5

Nothing in this agreement will prevent a party from disclosing Confidential Information where it is required to do so by law or regulation, stock exchange rules, or by order of a court or competent authority, provided that, in the case of a disclosure under the Freedom of Information Act 2000 ("FOIA"), none of the exemptions in the FOIA applies to the relevant Confidential Information and provided always that, to the extent permitted by law or regulation, the receiving party will give such notice as is reasonably practicable in the circumstances to the disclosing party about the timing and content of such a disclosure.

 

 

8.6

If either party to this agreement receives a request under the FOIA to disclose any information that, under this agreement, is the other party's Confidential Information, it will notify and consult with the other party. The other party will respond within [***] after receiving notice if that notice requests the other party to provide information to assist in determining whether or not an exemption under the FOIA applies to the information requested under the FOIA.

 

9.

Royalties and Other Payments

 

9.1

Isis will invoice the Licensee for the Signing Fee shortly after signature of this agreement and the Licensee must settle the invoice within [***] of receipt.

 

9.2

Subject to clause 9.3, the Licensee will pay to Isis a royalty equal to the applicable Royalty Rate on all Net Sales of Licensed Products for the duration of the agreement on the terms set out in clause 11.

 

9.3

Following expiration or revocation of the last Valid Claim covering a Licensed Product in a country in which the Licensed Product is Marketed and where there is being Marketed and sold by a third party in the normal course of business a product that, directly or indirectly, competes with the Licensed Product, the Step Down Rate (as defined below) shall apply on a country-by-country basis to the applicable Royalty Rate of such Licensed Products. For the purposes of this clause 9.3, the "Step Down Rate" shall be the percentage decrease of (a) [***] compared against (b) [***].

 

9.4

In the event that the royalties paid to Isis under clauses 9.2 or 9.6 do not amount to at least the Minimum Sum, the Licensee must make up the difference between the royalties paid under clauses 9.2 and 9.6 and the Minimum Sum in each Licence Year where a Minimum Sum applies.

 

9.5

The Licensee will pay to Isis a royalty equal to the Fee Income Royalty Rate on any sublicensing fees that the Licensee receives for sublicensing the Licensed Technology with a third party. For the purposes of this clause 9.5, Sublicensing fees shall include upfront fees, milestone payments and other consideration received by the Licensee from such third party but shall exclude:

 

(a)

milestones payable by a sub-licensee to the Licensee on a Milestone event (as detailed in Schedule 2) where a Milestone Triggering Event has been met; and

 

(b)

royalties paid to the Licensee by a sub-licensee based on net sales of Licensed Products; and

 

(c)

any sums received that are to be used to fund research and/or development.

 

9.6

Subject to clause 9.3, the Licensee will pay to Isis a royalty equal to the Sublicensing Royalty Rate on any royalties paid to the Licensee by a sub-licensee based on net sales of Licensed Products by a sub-licensee.

 

9.7

If the Licensee has to pay royalties to a third party (other than an Affiliate), for the right to make, have made, use or Market a Licensed Product, under a licence of Intellectual Property Rights without which the Licensed Technology cannot lawfully be exploited, then the Licensee will be entitled to deduct from all royalty payments due to Isis in respect of Net Sales of the Licensed Product under clause 9.2 an amount equal to [***] of the royalties actually paid to that third party, up to a maximum amount of [***] of the royalties due to Isis under clause 9.2.

 

9.8

Where a Licensed Product is sold as part of a combination product or co-packaged product, the Net Sales from the combination product or the co-packaged product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the combination product or the co-packaged product, during the applicable royalty reporting period, by the fraction:

 

[***]

 

Where A is the average sale price of the Licensed Product when sold separately in finished form, or if not sold separately, the market price of the Licensed Product if it were sold separately and B is the average sale price of the other product(s) included in the combination product or co-packaged product when sold separately in finished form, or if not sold separately, the aggregate market price of the other product(s) if it were sold separately in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product(s) did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for the Licensed Product and any other product(s) included in the combination product or co-packaged product, then the Net Sales for the purposes of determining royalty payments for a combination product or a co-packaged product shall be referred to an independent expert for determination.

 

 

9.9

Once a Milestone Triggering Event has occurred the Licensee will notify Isis as soon as possible after it or any sub-licensee achieves any Milestone, and, subject to receiving an invoice from Isis, pay to Isis the Milestone Fee, less any and all fees already paid or payable by the Licensee to Isis pursuant to Clause 9.5(a) in instances where a Milestone Triggering Event had not yet been met, in respect of each Milestone within [***] of the date on which each Milestone is achieved by the Licensee or a sub-licensee. In respect of an Investment Event, an Acquisition Event, a Partnering Event or Multiple Partnering Event, Milestone Fees payable against any Milestone that occurs prior to any of the Milestone Triggering Events being met will accrue and become payable once any one of the Investment Event, Acquisition Event or Partnering Event or Multiple Partnering Event is met. However, in respect of a Multiple Partnering Event, Milestone Fees will only accrue and become payable in respect of the applicable Field to which the Multiple Partnering Event relates.

 

9.10

The Signing Fee and the Milestone Fee are non-refundable and will not be considered as an advance payment on royalties payable under clause 9.2. No part of the Minimum Sum will be refundable or applicable to succeeding Licence Years.

 

9.11

Licensed Products supplied for use in any clinical trial carried out by or on behalf of the Licensee or any of its sub-licensees shall not be deemed to be sales and shall not be included within any Net Sales calculation.

 

9.12

The Licensee or any of its sub-licensees may supply a commercially reasonable quantity of Licensed Products for promotional sampling provided that the number of Licensed Products supplied for promotional sampling shall not be greater than [***] of the total number of units of each Licensed Product sold leased or licensed by the Licensee in any Quarter following the Licensee receiving Marketing Authorization for the Licensed Product in any territory. Except as set out in this clause, the Licensee must not accept any non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology without the prior written consent of Isis, such consent not to be unreasonably withheld, conditioned or delayed. The Licensee may accept non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology provided either (a) [***] of such non-monetary consideration is able to be converted into cash within [***] of receipt from the Licensee to enable the Fee Income Royalty Rate to be paid to Isis in cash or (b) the Licensee covenants in writing to pay to Isis in cash, within [***] of receipt of the non-monetary consideration, the Fee Income Royalty Rate due to Isis.

 

9.13

The Licensee will make all payments in pounds sterling or any currency replacing pounds sterling in its entirety.

 

9.14

For the purposes of calculating any amount payable by the Licensee to Isis in a currency other than pounds sterling (or replacement currency), the Licensee shall apply an exchange rate equivalent to:

 

(a)

the average of the applicable closing mid rates quoted by the Financial Times as published in London on the first Business Day of each month during the Quarter just closed; or

 

(b)

for payments under clause 9.5 only, the first Business Day of the month in which the payment was received by the Licensee.

 

9.15

Where the Licensee has to withhold tax by law, the Licensee will deduct the tax, pay it to the relevant taxing authority, and supply Isis with a Certificate of Tax Deduction at the time of payment to Isis. Where such an issue arises, the Licensee will not be liable for any costs or penalties associated with late payment to Isis provided that the Licensee takes reasonable steps to ensure that any such matters are dealt with as expeditiously as reasonably possible.

 

 

 

9.16

In the event that full payment of any amount due from the Licensee to Isis under this agreement is not made by any of the dates stipulated, the Licensee shall be liable to pay interest on the amount unpaid at the rate of [***] per annum over the base rate for the time being of Barclays Bank plc. Such interest shall accrue on a daily basis from the date when payment was due until the date of actual payment of the overdue amount, whether before or after judgment, and shall be compounded quarterly.

 

9.17

If the Licensed Product is of a description covered by the Medicines Access Policy, the Licensee shall adhere to the requirements of the Medicines Access Policy. In particular in the event the Licensed Products can be used to ease the burden of illness in the developing world, the Marketing of Licensed Products will be managed in a manner that enables availability and accessibility at reasonable cost to the people most in need in the developing world.

 

10.

Commercially Reasonable Endeavours

 

10.1

Subject to clause 10.3, the Licensee must use Commercially Reasonable Endeavours to develop, exploit and Market the Licensed Technology to maximize the financial return for both parties.

 

10.2

Subject to clause 10.3, the Licensee must use Commercially Reasonable Endeavours to develop, exploit and Market the Licensed Technology in accordance with the Development Plan as set out separately in respect of each Indication. The Licensee will:

 

10.2.1

within [***] of the date of this agreement provide Isis with a detailed development plan covering the intended development of a Licensed Product for each Indication and that development plan will replace the summary development plan in Schedule 3 as the Development Plan. The Licensee will consult with Isis over the detailed development plan and will consider in good faith any comments that Isis may put forward. Following approval of the revised detailed development plan by Isis, the revised detailed development plan shall become the Development Plan; and

 

10.2.2

deliver to Isis at least [***] prior to the commencement of each subsequent Licence Year a revised development plan for the intended development of a Licensed Product for each Indication together with any background supporting information necessary for Isis to evaluate the draft plan. The Licensee will consult with Isis over the draft plan and will consider in good faith any comments that Isis may put forward. Following approval of the revised development plan by Isis, the revised development plan shall become the Development Plan.

 

10.3

The Licensee may give written notice to Isis that it no longer intends to develop, exploit and Market a Licensed Product in an Indication and following that notice:

 

10.3.1

the Licensee will no longer have obligations to use Commercially Reasonable Endeavours to develop, exploit and Market a Licensed Product in that Indication; and

 

10.3.2

the Indication will be removed from the Field and, without prejudice to any and all of its existing rights under this agreement, the Licensee will no longer have any exclusive rights to use the Licensed Technology in relation to that Indication.

 

11.

Royalty Reports and Audit

 

11.1

The Licensee will provide Isis with a report at least once in every [***] detailing the activities and achievements in its development of the Licensed Technology in order to facilitate its commercial exploitation, and in the development of potential Licensed Products.

 

 

11.2

The Licensee will provide Isis with a royalty report within [***] after the close of each Quarter for each Licensed Product Marketed by the Licensee and its sub-licensees. Each Royalty Report will:

 

(a)

set out the Net Sales of each Licensed Product Marketed by the Licensee, including the total gross selling price of each Licensed Product Marketed by the Licensee and the quantity or total number of units of each Licensed Product Marketed by the Licensee;

 

(b)

set out details of deductions made in the calculation of Net Sales from the invoiced price of each Licensed Product in the form in which it is Marketed by the Licensee;

 

(c)

set out details of the quantity of Licensed Products used for promotional sampling by the Licensee or any sub licensees;

 

(d)

provide a calculation of the royalties due from the Licensee to be paid at the Royalty Rate;

 

(e)

set out details of payments received by the Licensee to which the Fee Income Royalty Rate applies and provide a calculation of the royalties due from the Licensee to be paid under the Fee Income Royalty Rate;

 

(f)

provide a calculation of the royalties on sub-licensees' net sales received by the Licensee to which the Sub-Licensing Royalty Rate applies and provide a calculation of the royalties due from the Licensee to be paid at the Sub-licensing Royalty Rate including the quantity or total number of units of each Licensed Product Marketed by each sub-licensee;

 

(g)

provide a statement showing whether or not royalties due exceed the Minimum Sum and, if so, by how much;

 

(h)

set out details of Milestones achieved by the Licensee or any sub-licensees; and

 

(i)

set out the steps taken during the Licence Year to promote and Market Licensed Products.

 

The Licensee must pay Isis the royalties due in respect of the Quarter just closed at the same time as the Licensee delivers the Royalty Report provided that, if requested, Isis will issue an invoice for the relevant payment prior to payment.

 

11.3

The Licensee will deliver to Isis a periodic report at the close of each Licence Year providing sufficient data (in outline form) to give a reasonable indication or estimate of the actual or expected market share of the Licensee and its sub-licensees and will notify Isis in the event that its market share does or is expected to breach the limits set out in the 2014 Commission Regulation 316/2014 Technology Transfer Block Exemption Regulation and Guidelines in Commission Communication 2014/C 89/03 and any successor regulation. This obligation is not intended to place a significant additional financial burden on the Licensee.

 

11.4

If a Licensed Product Marketed by the Licensee is re-Marketed by an Affiliate or an entity over which the Licensee exercises Control, the royalty on each such Licensed Product will be calculated on the highest of the prices at which it is Marketed or re-Marketed. For the avoidance of doubt, when a Licensed Product is sold to an arm's length distributor then Net Sales is calculated on the transfer price paid by the distributor to the Licensee.

 

11.5

The Licensee must keep complete and proper records and accurate accounts of all Licensed Products used and Marketed by the Licensee and any sub-licensee in each Licence Year for at least [***]. Isis may, through an independent certified accountant appointed by Isis ("the Auditor"), audit all such accounts on at least [***] written notice no more than once each Licence Year for the purpose of determining the accuracy of the Royalty Reports and payments. The Auditor shall be:

 

11.5.1

permitted by the Licensee to enter the Licensee's principal place of business upon reasonable notice to inspect such records and accounts;

 

 

11.5.2

entitled to take copies of or extracts from such records and accounts as are strictly necessary for the Auditor to properly conduct the audit;

 

11.5.3

given all other information by the Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

11.5.4

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Licensee in order to verify the accuracy of the records and accounts and the accuracy of any statements provided to Isis under clause 11.2.

 

If on any such audit a shortfall in payments of greater than [***] is discovered by the Auditor in respect of the audit period, the Licensee shall pay Isis's audit costs.

 

11.6

The Licensee will ensure that equivalent obligations and access rights, as set out in clause 11.5, allowing Isis auditing rights to the sub-licensee are included in each sub licence agreement.

 

12.

Duration and Termination

 

12.1

This agreement will take effect on the date of signature. Subject to the possibility of earlier termination under the following provisions of this clause 12, and subject to the possibility of an extension to the term by mutual agreement, this agreement shall continue in force:

 

(a)

until the expiry of the last Valid Claim anywhere in the world; and

 

(b)

in any event for twenty (20) years from the date of this agreement.

 

12.2

If either party commits a material breach of this agreement, and the breach is not remediable or (being remediable) is not remedied within the period allowed by notice given by the other party in writing calling on the party in breach to effect such remedy (such period being not less than [***], the other party may terminate this agreement by written notice having immediate effect.

 

12.3

The Licensee may terminate this agreement for any reason at any time provided it gives Isis three (3) months' written notice to terminate expiring after the third anniversary of this agreement whereupon the Licensee shall bring all sub-licences to an end on the same date. Any such termination shall not absolve the Licensee of its obligation to accrue and pay royalties and other payments under the provisions of clause 9 in respect of the period prior to termination.

 

12.4

Isis may terminate this agreement:

 

(a)

immediately, if the Licensee has a petition presented for its winding-up (but excluding for this purpose any winding up petition presented against the Licensee in relation to any debt disputed by the Licensee), or passes a resolution for voluntary winding-up otherwise than for the purposes of a bona fide amalgamation or reconstruction, or compounds with its creditors, or has a receiver administrator or administrative receiver appointed of all or any part of its assets, or enters into any arrangements with creditors, or takes or suffers any similar action in consequence of debts;

 

(b)

on [***] written notice if:

 

(i)

the Licensee opposes or challenges the validity of any of the Applications or raises the claim that the Licensed Know-how is not necessary to develop and Market Licensed Products, provided always that nothing in this clause 12.4(b) will prevent the Licensee from seeking to determine whether a product of the Licensee is a Licensed Product for the purposes of this agreement; or

 

 

(ii)

the Licensee is in breach of clause 10.1 and the Licensee does not take any remedial action reasonably requested by Isis and notified to the Licensee by written notice pursuant to clause 12.2.

 

12.5

On termination or expiration of this agreement, for whatever reason, the Licensee:

 

(a)

must bring all sub-licences to an end on the same date;

 

(b)

shall pay to Isis all outstanding royalties and other sums due under this agreement;

 

(c)

shall provide Isis with details of the stocks of Licensed Products held at the point of termination;

 

(d)

must cease to use or exploit the Licensed Technology, provided that this restriction does not apply to Licensed Know-How or Confidential Information which has entered the public domain through no fault of the Licensee, and that the Licensee may continue to use the Licensed Technology in order to meet any specific existing binding commitments already made by the Licensee at the date of termination and requiring delivery of Licensed Products within the next [***];

 

(e)

must, at the option of Isis and at the Licensee's cost, destroy all other Licensed Products or send all other Licensed Products to a location nominated by Isis to the Licensee in writing;

 

(f)

must cease to use the Materials and return to Isis any of the Materials in its possession or control; and

 

(g)

grants Isis an irrevocable, transferable, non-exclusive licence to develop, make, have made, use and Market the Licensee's Improvements and products that incorporate, embody or otherwise exploit the same. Isis shall pay a reasonable royalty for use of this licence unless the termination arises under clause 12.4, or is by Isis under clause 12.2, in which case it shall be royalty-free.

 

12.6

Termination of this agreement, whether for breach of this agreement or otherwise, shall not absolve the Licensee of its obligation to accrue and pay royalties under the provisions of clause 9 for the duration of any notice period and in respect of any dealings in Licensed Products permitted by clause 12.5.

 

12.7

Clauses 1, 5.2, 7.3, 12.5, 12.7, 12.8, 13, 14.4 and 14.14 will survive the termination or expiration of this agreement, for whatever reason, indefinitely.

 

12.8

Clauses 8 and 11.5 will survive the termination or expiration of this agreement, for whatever reason, for a period of [***].

 

13.

Liability

 

13.1

Subject to Clause 13.2 and to the fullest extent permissible by law, Isis does not make any warranties of any kind including, without limitation, warranties with respect to:

 

(a)

the quality of the Licensed Technology;

 

(b)

the suitability of the Licensed Technology for any particular use;

 

(c)

whether use of the Licensed Technology will infringe third-party rights; or

 

(d)

whether the Applications will be granted or the validity of any patent that issues in response to the Applications.

 

 

13.2

Isis warrants that as at the date of this agreement and subject to the terms of this agreement:

 

(a)

it has full corporate power and authority to enter into the licences and license the Licensed Technology;

 

(b)

the University has assigned all of its right, title and interest in the Licensed Technology subject to the licence back to the University for Non-Commercial Use set out in clause 5;

 

(c)

it has the exclusive right to obtain the Materials pursuant to a material sales agreement with the University and has the full contractual right, power and authority to provide the Materials to the Licensee with such rights to use the Materials as set out in clause 3 of this agreement subject to the rights retained by the University to use the Materials for Non-Commercial Use;

 

(d)

it has not created any licence, charge or mortgage over the Licensed Technology (excluding the ChAdOx2 Vector) in the Field;

 

(e)

so far as Isis is aware (not having made any specific enquiries) there is no actual or threatened infringement of the Licensed Technology by any third party; and

 

(f)

so far as Isis is aware, the Clinical Data and Materials have been created, procured or obtained in compliance with all applicable laws and regulations relating thereto.

 

13.3

Except in relation to any claims, damages and liabilities arising directly from (i) a breach of this agreement by Isis, and/or (ii) the fraud, negligence or wilful misconduct of Isis or the University, the Licensee agrees to indemnify Isis and the University and hold Isis and the University harmless from and against any and all claims, damages and liabilities:

 

(a)

asserted by third parties (including claims for negligence) which arise from the use of the Licensed Technology or the Marketing of Licensed Products by the Licensee and/or its sub-licensees; and/or

 

(b)

arising directly from any breach by the Licensee of this agreement provided however that this indemnity for breach by the Licensee is subject to clause 13.6.

 

13.4

Isis will use reasonable endeavours to defend any Indemnified Claim and to mitigate its losses, claims, liabilities, costs, charges and expenses or (at Isis's option) allow the Licensee to do so on its behalf (subject to the University retaining the right to be kept informed of progress in the action and to have reasonable input into its conduct). Isis will not (except as required by law) make any admission, compromise, settlement or discharge of any Indemnified Claim without the consent of the Licensee (which will not be unreasonably withheld or delayed).

 

13.5

The Licensee undertakes to make no claim against any employee, student, agent or appointee of Isis or of the University, being a claim which seeks to enforce against any of them an liability whatsoever in connection with this agreement or its subject-matter.

 

13.6

Subject to clause 13.8 and except in relation to the indemnities in clause 7.3 and 13.3(a), the liability of either party for any breach of this agreement in negligence or arising in any other way out of the subject-matter of this agreement, will not extend to incidental, indirect or consequential damages or loss of profits.

 

13.7

Subject to clause 13.8, the liability of Isis to the Licensee accruing in any Licence Year under or otherwise in connection with this agreement or its subject-matter, including without limitation liability for negligence, shall in no event exceed:

 

(a)

in respect of liability accruing in the first Licence Year, the amount of the Signing Fee paid to Isis; and

 

(b)

in respect of liability accruing in any subsequent Licence Year, the total royalties paid in the previous Licence Year to Isis under clauses 9.2 and 9.6.

 

 

13.8

Nothing in this agreement shall limit or exclude any liability for fraud or fraudulent misrepresentation or death, or personal injury or any other liability which may not, by law, be excluded.

 

13.9

Notwithstanding any other clause in this agreement, Isis shall not be entitled to profit from any grant of a licence to any third party in respect of the Licensed Technology that breaches the exclusive rights granted to the Licensee under clause 2 of this agreement ("a Licence to the Exclusive Rights"). In the event that the Licensee (acting in good faith) believes that Isis has granted a Licence to the Exclusive Rights, then the Licensee shall provide written notice to Isis with full particulars and all evidence supporting the Licensee's basis for such belief. Within [***] of receipt of written notice from the Licensee, Isis will notify the Licensee in writing whether it admits or disputes that it has granted a Licence to the Exclusive Rights. If Isis serves notice that it disputes that it has granted a Licence to the Exclusive Rights Isis and the Licensee shall enter into good faith negotiations in order to reach mutual agreement to resolve the dispute and if such mutual agreement is not reached within [***] after Isis's receipt of the Licensee's written notice, then the parties will refer the dispute to an independent expert ("Independent Expert") for determination on the following basis:

 

13.9.1

the Independent Expert shall be agreed on by the parties, or, if agreement is not reached within [***] of either party giving notice to the other that it wishes to refer a matter to an Independent Expert, the Independent Expert may be nominated by the President of the Law Society of England and Wales on the request of either party;

 

13.9.2

the Independent Expert shall be asked to determine:

 

(a)

whether Isis has granted a Licence to the Exclusive Rights; and

 

(b)

any dispute between the parties over the amount of consideration paid to Isis under any Licence to the Exclusive Rights.

 

13.9.3

the Independent Expert shall act as an expert and not as an arbitrator;

 

13.9.4

the Independent Expert's decision shall be final and binding on the parties in the absence of fraud or manifest error; and

 

13.9.5

each party shall bear its own costs in relation to the reference to the Independent Expert. The Independent Expert's fees and any costs it properly incurs in arriving at its determination (including any fees and costs of any advisers appointed by the Independent Expert) shall be borne by the parties in equal shares or in such proportions as the Independent Expert may direct.

 

In the event that Isis has admitted or the Independent Expert has determined that Isis has granted a Licence to the Exclusive Rights then Isis will pay to the Licensee a sum equal to all consideration paid to Isis under the Licence to the Exclusive Rights (including consideration that is not in the form of cash payments where it is possible to put a cash value on such a payment). Isis will pay that sum to the Licensee as soon as possible and in any event no later than [***] following the date of admission by Isis or the Independent Expert's determination and will continue to pay a sum equal to all further consideration received by Isis under any such Licence to the Exclusive Rights no later than [***] after receipt. The parties agree that the payment of such sums to the Licensee represent the full amount of compensation to which the Licensee is entitled and the extent of Isis's liability to the Licensee for any grant by Isis of a Licence to the Exclusive Rights.

 

14.

General

 

14.1

Registration - The Licensee must register its interest in the Licensed Technology with any relevant authorities in the Territory as soon as legally possible. The Licensee must not, however, register an entire copy of this agreement in any part of the Territory or disclose its financial terms without the prior written consent of Isis (such consent not to be unreasonably withheld or delayed).

 

14.2

Advertising - The Licensee must not use the name of Isis, the University or the Inventors (except those Inventors who are, or have at any time been, shareholders of the Licensee) in any advertising, promotional or sales literature, without Isis's prior written approval (such consent not to be unreasonably withheld or delayed).

 

 

14.3

Packaging - The Licensee will ensure that the Licensed Products and the packaging associated with them are marked suitably with any relevant patent or patent application numbers to satisfy the laws of each of the countries in which the Licensed Products are sold or supplied and in which they are covered by the claims of any patent or patent application, to the intent that Isis shall not suffer any loss or any loss of damages in an infringement action.

 

14.4

Thesis - This agreement shall not prevent or hinder registered students of the University from submitting for degrees of the University theses based on the Licensed Technology; or from following the University's procedures for examinations and for admission to postgraduate degree status.

 

14.5

Taxes - Where the Licensee has to make a payment to Isis under this agreement which attracts value-added, sales, use, excise or other similar taxes or duties, the Licensee will be responsible for paying those taxes and duties.

 

14.6

Notices - All notices to be sent to Isis under this agreement must indicate the Isis Project N° and should be sent, by post and fax unless agreed otherwise in writing, until further notice to: The Managing Director, Isis Innovation Ltd, Buxton Court, 3 West Way, Oxford OX2 OSZ, Fax: +44 (0)1865 280831. All notices to be sent to the Licensee under this agreement should be sent, until further notice, to the Licensee's Contact and Address indicating the Isis Project N°.

 

14.7

Force Majeure - If performance by either party of any of its obligations under this agreement (not including an obligation to make payment) is prevented by circumstances beyond its reasonable control, that party will be excused from performance of that obligation for the duration of the relevant event.

 

14.8

Assignment - The Licensee may assign any of its rights or obligations under this agreement in whole or in part to an Affiliate but only for so long as it remains an Affiliate and Isis shall at the request of the Licensee execute a deed of novation to bring about that assignment. Except as provided in this clause, the Licensee may not assign any of its rights or obligations under this agreement without the prior written consent of Isis (such consent not to be unreasonably withheld, delayed or conditioned except solely on the grounds that primarily relate to avoiding any detrimental reputational impact on the University or the assignee having insufficient funds to fulfil the obligations of this agreement, it being acknowledged and agreed that if the assignee is a publicly-listed company with a market capitalisation equal to or in excess of [***] it will be considered to have sufficient financial resources to develop and Market the Licensed Product). If Isis assigns its rights in the Licensed Technology to any person it shall do so expressly subject to the Licensee's rights under this agreement.

 

14.9

Severability - If any of the provisions of this agreement is or becomes invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions will not in any way be affected or impaired. The parties will, however, negotiate to agree the terms of a mutually satisfactory provision, achieving as nearly as possible the same commercial effect, to be substituted for the provision found to be void or unenforceable.

 

14.10

No Partnership etc - Nothing in this agreement creates, implies or evidences any partnership or joint venture between Isis and the Licensee or the relationship between them of principal and agent.

 

14.11

Entire Agreement - This agreement constitutes the entire agreement between the parties in relation to the Licence to the exclusion of all other terms and conditions (including any terms or conditions which the Licensee purports to apply under any purchase order, confirmation order, specification or other document). The Licensee has not relied on any other statements or representations in agreeing to enter this agreement and waives all claims for breach of any warranty and all claims for any misrepresentation (negligent or of any other kind, unless made by Isis fraudulently) in relation to any representation which is not specifically set out in this agreement. Specifically, but without limitation, this agreement does not impose or imply any obligation on Isis or the University to conduct development work. Any arrangements for such work must be the subject of a separate agreement between the University and the Licensee.

 

 

14.12

Variation - Any variation of this agreement must be in writing and signed by authorised signatories for both parties. For the avoidance of doubt, the parties to this agreement may rescind or vary this agreement without the consent of any party that has the benefit of clause 14.14.

 

14.13

Waiver - No failure or delay by either party in enforcing its rights under this agreement, or at law or in equity will prejudice or restrict those rights. No waiver of any right will operate as a waiver of any other or later right or breach. Except as stated to the contrary in this agreement, no right, power or remedy conferred on, or reserved to, either party is exclusive of any other right, power or remedy available to it, and each of those rights, powers, and remedies is cumulative.

 

14.14

Rights of Third Parties - The parties to this agreement intend that by virtue of the Contracts (Rights of Third Parties) Act 1999 the University and the people referred to in clause 13.5 will be able to enforce the terms of this agreement intended by the parties to be for their benefit as if the University and the people referred to in clause 13.5 were party to this agreement.

 

14.15

Governing Law - This agreement is governed by English Law, and the parties submit to the exclusive jurisdiction of the English Courts for the resolution of any dispute which may arise out of or in connection with this agreement except in relation to any action in relation to Intellectual Property Rights or Confidential Information which may be brought in any court of competent jurisdiction.

 

 

Schedule 1

 

DEFINITIONS
(Clause 1)

 

Academic and Research Purposes means research, teaching or other scholarly use which is undertaken for the purposes of education and research.

 

Affiliate means any company or legal entity in any country Controlling or Controlled by the Licensee (or any legal entity in a country Controlling or Controlled by the sub-licensee).

 

Applications means:

 

(a)

the patent applications set out as Applications 1, 2, 3 and 4 in Schedule 2;

 

(b)

any patents granted in response to those applications;

 

(c)

any corresponding foreign patents and applications which may be granted to Isis in the Territory based on and deriving priority from those applications; and

 

(d)

any addition, continuation, continuation-in-part, division, reissue, renewal or extension based on the applications.

 

Acquisition Event means the Licensee being acquired by a third party and the purchase price is greater than or equal to [***].

 

ATCC MTA means the purchase order between the University and American Type Culture Collection (ATCC), a District of Columbia not-for-profit corporation, having its offices at 10801 University Boulevard, Manassas, Virginia 20110-2209, USA dated 24 February 2006 subject to the terms of ATCC's standard MTA dated 8 September 2003.

 

Business Day means a day, other than a Saturday or Sunday, on which clearing banks are permitted to open in London.

 

ChAdOx1 Vector means the DNA sequence of the AdY25 simian adenovirus with the El and E3 regions both deleted, and E4 Orf 4, 6, 6/7 replaced with the corresponding regions from AdHu5.

 

ChAdOx2 Vector means the DNA sequence of the C68 simian adenovirus with the following modifications so that the El region and the E3 region have both been deleted and the E4 region has been deleted and replaced with E4 Orf 1,2,3 from Y25 and E4 Orf 4, 6, 6/7 from AdHu5.

 

Clinical Data means the clinical data contained in the Isis clinical data projects set out in Schedule 2.

 

Clinical Patient Care means diagnosing, treating and/or managing the health of persons under the care of an individual having the right to use the Licensed Technology for Academic and Research Purposes in the event that such Licensed Technology is capable of application in a healthcare setting without further development.

 

Commercially Reasonable Endeavours means, in respect of each Indication to be developed in the Field separately, the effort a prudent and determined company of comparable size and sector to the Licensee would take to pursue the goal of developing and Marketing Licensed Products to maximize the financial return and in any event do no less than is required to fulfil the steps laid out in the Development Plan.

 

Confidential Information means in relation to each party any materials, trade secrets or other information disclosed by that party to the other, including, without limitation:

 

(a)

the Licensed Technology, to the extent that it is not disclosed by the Application when published; and

 

 

(b)

this agreement.

 

Control means:

 

(a)

ownership of more than fifty percent (50%) of the voting share capital of the relevant entity; or

 

(b)

the ability to direct the casting of more than fifty percent (50%) of the votes exercisable at a general meeting of the relevant entity on all, or substantially all, matters.

 

Development Plan means the plan set out in Schedule 3 as revised in accordance with clause 10.2.

 

Fee Income Royalty Rate means the fee income royalty rate set out in Schedule 2.

 

Field means the field set out in Schedule 2.

 

FP7 Consortium and Funding Agreements means the Improving Prostate Cancer with Vectored Vaccines (IMPROVE) EU grant agreement signed by the University on 12 July 2013 and the IMPROVE Consortium Agreement dated 10 June 2013.

 

Improvement means any development of the Licensed Technology which would, if commercially practised, infringe and/or be covered by a claim subsisting or being prosecuted in the Application.

 

Indemnified Claim means any claim under which Isis and the University are entitled to be indemnified under clause 13.3.

 

Indication means each indication for which a vaccine is to be developed by the Licensee in the Field including influenza, cancer, varicella zoster and MERS.

 

Initial Public Offering means an initial public offering of the Licensee's shares on a stock exchange on any market where such shares are offered to private and/or institutional investors.

 

Intellectual Property Rights means patents, trade marks, copyrights, database rights, rights in designs, and all or any other intellectual or industrial property rights, whether or not registered or capable of registration.

 

Inventor means the inventor or inventors named in the Applications and identified in Schedule 2.

 

Inventor Improvements means any Improvements made prior to the second anniversary of the date of this agreement solely by the Inventor within the Field, and the Intellectual Property Rights pertaining to them, of which Isis has been made aware and is legally able to license but shall not include, for the avoidance of doubt, any Improvements and Intellectual Property Rights developed pursuant to any employment or consultancy arrangements with Licensee or its Affiliates.

 

Investment Event means the Licensee achieving a company valuation greater than or equal to [***] determined by private fund raising or an Initial Public Offering.

 

Legal Action means commencing or defending any proceedings before a court or tribunal in any jurisdiction in relation to any rights included in the Licensed Technology including all claims and counterclaims for infringement and for declarations of non-infringement or invalidity.

 

Licence means the licence granted by Isis to the Licensee under clause 2.1.

 

Licensed Intellectual Property Rights means the Applications and (to the extent they constitute Intellectual Property Rights) the Inventor's Improvements.

 

Licensed Know-how means all confidential information relating to the Applications, the Materials and/or the Clinical Data that has been communicated to the Licensee by Isis in writing before the date of this agreement or is communicated in writing to the Licensee by Isis under this agreement and within [***] after the date of this agreement including but not limited to the construction and design of viral vectors.

 

 

 

Licensed Product means any product, process, service or composition which is entirely or partially produced by means of or with the use of, or within the scope of, the Licensed Technology, or any of it.

 

Licensed Technology means the Licensed Intellectual Property Rights, the Clinical Data and the Licensed Know-How, and such (if any) other Intellectual Property Rights owned by or licensed to Isis as may be specifically identified in Schedule 2 (to the extent, in the case of licensed rights, that Isis is legally able to grant a sub-licence of the same).

 

Licensee's Contact and Address means the address for the Licensee set out in Schedule 2 of this agreement.

 

Licensee Improvements means any Improvements made prior to the second anniversary of the date of this agreement by the Licensee, and the Intellectual Property Rights pertaining to them, which shall include, for the avoidance of doubt, any Improvements and Intellectual Property Rights developed by an Inventor pursuant to an employment or consultancy arrangement with the Licensee.

 

Licence Year means each twelve (12) month period beginning on the date of this agreement and each anniversary of the date of this agreement.

 

Market means, in relation to a Licensed Product, offering to sell, lease, licence or otherwise commercially exploit the Licensed Product or the sale, lease, licence or other commercial exploitation of the Licensed Product.

 

Materials means the materials set out in Schedule 2.

 

Medicines Access Policy means the policy of the University to promote access to pharmaceutical and other products and services, the current version of which is available at www.admin.ox.ac.uk/researchsupport/integrity/access.

 

Milestone and Milestone Fee means the milestones, and the amounts payable on achievement of each of the milestones, set out in Schedule 2.

 

Minimum Sum means the minimum sum or sums set out in Schedule 2.

 

Net Sales means the gross amount invoiced for sales or other dispositions of Licensed Products by Licensee or its Affiliates in bona fide arms-length transactions with third parties, less the following deductions:

 

(a)

trade, and/or quality discounts, returns, allowances, in amounts customary in the trade and actually given;

 

(b)

import, export, excise, sales or use taxes, value added taxes and other taxes, tariffs or duties to the extent such items are included in the gross invoice price and actually paid;

 

(c)

freight, handling, transportation and insurance prepaid or allowed if separately identified in such invoice and actually paid; and

 

(d)

amounts allowed or credited or retroactive price reductions or rebates and actually given/paid.

 

Any refund of any of the foregoing amounts (including any reversal of bad debt allowances) previously deducted from Net Sales shall be appropriately credited upon receipt.

 

The Licensee may, at its option, allocate the above deductions from sales of Licensed Products based upon accruals estimated reasonably and consistent with the Licensee's standard business practices. If the Licensee elects to utilise such accruals, actual deductions will be calculated and, if applicable, a "true-up" made, on an annual basis.

 

A transfer of a Licensed Product from Licensee to an Affiliate shall not be deemed to be a sale hereunder provided that if a sale of a Licensed Product is to an Affiliate of the Licensee and such Affiliate is the end user of the Licensed Product, then the "amount invoiced" with respect to such sale shall, for the purposes of calculating "Net Sales", be the greater of (a) the actual amount invoiced and (b) the amount which the invoiced amount would have been had such sale of the Licensed Product been to a person at arm's length with the Licensee.

 

 

Non-Commercial Use means Academic and Research Purposes and the purposes of Clinical Patient Care. This includes the right for the University to license the Licensed Technology to any of its collaborators in connection with and solely for the University's Academic and Research Purposes; but it does not include the right to commercially exploit the Licensed Technology or grant any license to commercially exploit the Licensed Technology.

 

Marketing Authorisation means a marketing authorization granted by a regulatory authority such as the Food and Drug Administration or European Medicines Agency necessary to Market a Licensed Product in a given country

 

Milestone Triggering Event means any one of an Investment Event, an Acquisition Event, a Partnering Event, or a Multiple Partnering Event.

 

Multiple Partnering Event means in respect of each Field separately, the Licensee receiving income totalling [***] or more from third party partnering arrangements relating to the Licensed Technology.

 

Partnering Event means the Licensee enters into a partnering arrangement with a third party and the company valuation at that time, as assessed by a third party valuation expert, is greater than or equal to [***].

 

Past Patent Costs means the past patent costs set out in Schedule 2.

 

Project means the projects referred to in BACKGROUND.

 

Quarter means each period of three calendar months during a Licence Year with the first Quarter commencing on the first day of each Licence Year.

 

Royalty Rate means the royalty rate or rates set out in Schedule 2 on Net Sales of Licensed Products for, as applicable, influenza, cancer, varicella zoster and MERS.

 

Royalty Report means the report to be prepared by the Licensee under clause 11.2.

 

Signing Fee means the signing fee set out in Schedule 2.

 

Sub-licensing Royalty Rate means the sub-licensing royalty rate set out in Schedule 2.

 

Territory means the territory or territories set out in Schedule 2, excluding any territory or territories removed through the operation of clause 6.5.

 

University means the Chancellor, Masters and Scholars of the University of Oxford whose administrative offices are at the University Offices, Wellington Square, Oxford OX1 2JD.

 

Valid Claim means a granted or currently pending claim included in the Applications that has not expired nor been held permanently revoked, unpatentable, invalid or unenforceable by a court or tribunal of competent jurisdiction in a final and non-appealable judgment; nor been rendered unenforceable through disclaimer or otherwise abandoned.

 

 

Schedule 2

 

Application 1:	[***]
Application 2:	[***]
Application 3:	[***]
Application 4:	[***]
Clinical Data:	[***]
Materials:	[***]

 

Master Seedbank	Volume
[***]	[***]
[***]	[***]
[***]	[***]
Non-GMP stocks	Volume
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]
[***]	[***]

 

Inventor:
	Application 1: [***]   Application 2: [***]   Application 3: [***]   Application 4: [***]
Territory (clause 2.1):	Worldwide
Field (clause 2.1):	Influenza vaccines for humans, cancer vaccines for humans including therapeutic and prophylactic applications, Varicella zoster vaccines for humans, MERS vaccines
ChAdOx1 Excluded Fields (clause 2.1):	Malaria, tuberculosis, HIV, Neisseria meningitidis, human papilloma virus, hepatitis C virus, hepatitis B virus, Rift Valley Fever, dengue virus, Staphylococcus aureus, Ebola virus, Chagas disease, Chikungunya virus, pneumococcal disease, Marburg virus disease, Lassa fever, respiratory syncytial virus, Crimean-Congo haemorrhagic fever, severe acute respiratory syndrome (SARS), Hendra virus, Nipah virus, West Nile virus, Venezuelan equine encephalitis virus, Hanta Virus.
ChAdOx2 Excluded Fields (clause 2.1):	Therapeutic vaccines for Crohn's disease and vaccines against rabies virus.

 

 

Past Patent Costs (clause 6.1):	[***]
Signing Fee (clause 9.1):	£100,000
Royalty Rate (clause 9.2):	[***]
Minimum Sum (clause 9.4):	Licence Year	Minimum Sum
	5	[***]
	6	[***]
	7 and each year thereafter	[***]
Fee Income Royalty Rate (clause 9.5):	[***]       where the sublicensing or partnering arrangement takes place during the first three Licence Years.   [***]       where the sublicensing or partnering arrangement takes place after the third Licence Year.
Sub-Licensing Royalty Rate (clause 9.6):	[***]       where the Licensee enters into the sublicensing agreement during the first three Licence Years.   [***]       where the Licensee enters into the sublicensing agreement after the third Licence Year.

 

Milestone and Milestone Fee (clause 9.9):

 

1)       first Licensed Product for influenza:

 

Milestone	Milestone Fee
Successful completion of Phase lib trial	[***]
Initiation of phase III clinical trial	[***]
Marketing Authorisation and pricing and reimbursement approval first major territory	[***]
Marketing Authorisation and pricing and reimbursement approval second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

2)       second Licensed Product for influenza:

 

Milestone	Milestone Fee
Successful completion of Phase lib trial	[***]
Initiation of phase III clinical trial	[***]
Marketing Authorisation and pricing and reimbursement approval first major territory	[***]
Marketing Authorisation and pricing and reimbursement approval second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

3)       first Licensed Product for cancer:

 

Milestone	Milestone Fee
Successful completion of Phase lib trial	[***]
Initiation of phase III clinical trial	[***]
Marketing Authorisation and pricing and reimbursement approval first major territory	[***]
Marketing Authorisation and pricing and reimbursement approval second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

4)       second Licensed Product for cancer:

 

Milestone	Milestone Fee
Successful completion of Phase II trial	[***]
Initiation of phase III clinical trial	[***]
Marketing Authorisation and pricing and reimbursement approval first major territory	[***]
Marketing Authorisation and pricing and reimbursement approval second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

5)       first Licensed Product for varicella zoster:

 

Milestone	Milestone Fee
Successful completion of Phase II trial	[***]
Initiation of phase III clinical trial	[***]
Marketing Authorisation and pricing and reimbursement approval first major territory	[***]
Marketing Authorisation and pricing and reimbursement approval second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

6)       first Licensed Product for MERS:

 

Milestone	Milestone Fee
Successful completion of first efficacy trial in camels	[***]
Successful completion of Phase II trial	[***]
Initiation of phase III clinical trial	[***]
First Marketing Authorisation for camels	[***]
First Marketing Authorisation and pricing and reimbursement approval for humans	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

For the purposes of these Milestones:

 

"Successful completion" of trials means the trial meets it primary endpoints and that the results justify commercial and scientific progression to the next stage of trial.

 

"Initiation" of new trials means the first administration of the trial drug in the first study subject recruited in accordance with the approved study protocol.

 

Licensee's Contact and Address (clause 14.6):

 

Contact	Dr Andrew Mclean
Address	Oxford Sciences Innovation The Weston Library Broad Street Oxford OX1 3BG
Email	[***]

 

 

Schedule 3

 

Vaccitech Outline Clinical Development Plan

 

[***]

 

Schedule 4

 

DEED OF COVENANT

 

Isis Innovation Limited
University Offices,
Wellington Square,
Oxford OX1 2JD,
England

 

Date: [insert date]

 

Dear Sirs,

 

Sub-Licence between Vaccitech Limited ("Vaccitech") and [insert details of Sub-Licensee] dated [insert date] (the "Sub-Licence")

 

As part consideration for the grant of a sub-licence from Vaccitech to use [insert details of licensed technology] (the "Licensed Technology"), the Sub-Licensee hereby covenant to Isis Innovation Limited (Isis) and Isis covenant with the Sub-Licensee that:

 

1.

should the head licence between Vaccitech and Isis be terminated for whatever reason, Isis and the Sub-Licensee shall enter into a direct licence containing the same obligations and liabilities as set forth in the Sub-Licence and the Sub-Licensee will pay all due and payable under the Sub-Licence to Isis;

 

2.

should the Sub-Licensee wish to further sub-licence the Licensed Technology where Isis has consented to the Sub-Licence including the right to do so, it shall procure that any sub-sub-licensee enters into a Deed of Covenant with Isis in a form substantially similar to this Deed of Covenant;

 

3.

Isis shall have the right, during the term of the Sub-Licence, through an independent certified accountant appointed by Isis (the "Auditor"), to audit all accounts on at least [***] written notice no more than once each calendar year for the purpose of determining the accuracy of the royalty reports and payments. The Auditor shall be:

 

a.

permitted to enter the principal place of business of the Sub-Licensee upon reasonable notice to inspect such records and accounts;

 

b.

entitled to take copies of or extracts from such records and accounts;

 

c.

given all other information by the Sub-Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

d.

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Sub-Licensee in order to verify the accuracy of the records and accounts and the accuracy of any royalty statements provided to Vaccitech.

 

If on any such audit a shortfall in payments of greater than five percent (5%) is discovered by the Auditor in respect of the audit period, the Sub-Licensee shall pay the audit costs of Isis.

 

SIGNED AS A DEED by
[Insert details of Sub-Licensee] in the presence of:-

 

 

Signature of Witness:

 

Name of Witness:
Address:

 

SIGNED AS A DEED by
ISIS INNOVATION LIMITED in the presence of:-

 

Signature of Witness:

 

Name of Witness:
Address:

 

 

AS WITNESS this agreement has been signed by the duly authorised representatives of the parties.

 

SIGNED for and on behalf of ISIS INNOVATION LIMITED:		SIGNED for and on behalf of VACCITECH LIMITED
Name:	Linda Naylor	Name:	Andrew McLean
Position:	Managing Director, Isis Innovation Ltd	Position:	Director
Signature:	/s/ Linda Naylor	Signature:	/s/ Andrew McLean
Date:		Date:

 

 

Letter of Variation

 

 

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

Bill Enright
Vaccitech Limited
The Schrodinger Building
Heatley Road
The Oxford Science Park
Oxford
0X4 4GE

 

14^th January 2019

 

Dear Bill,

 

OUI project numbers [***]

 

Amendment to the Licence of Technology between Oxford University Innovation Limited (previously registered as Isis Innovation Limited) (“OUI”) and Vaccitech Limited (“the Licensee”) dated 4^th March 2016 (“the Licence Agreement”).

 

This letter (“Letter”) records an amendment to the Licence Agreement that OUI and the Licensee wish to extend the permitted field of use for the ChAdOx2 vector, make clarifications to the Field and to add the details of more recently filed patent applications to which the Licensee has rights under the Licence Agreement.

 

Defined terms used in this letter (unless stated to the contrary) have the same meaning as given to them in the Licence Agreement.

 

Amendment to the Licence Agreement

 

Accordingly, it is agreed as follows:

 

1.     Clause 2.1.1(d) shall be replaced in its entirety with the following:

 

(d)

In relation to the use of the ChAdOx2 vector under Application 5, exclusive in the fields of i) vaccines encoding peptide sequences derived from the 5T4 oncofetal antigen, ii) personalised cancer vaccines, iii) vaccines for human papillomavirus (HPV) associated diseases including cancer, iv) vaccines encoding peptide sequences derived from the melanoma-associated antigen (MAGE-3) and/or New York oesophageal squamous cell carcinoma 1 (NYESO-1) cancer-testis antigen and nonexclusive in all other fields with the exclusion of all veterinary applications (apart from MERS) and the ChAdOx2 Excluded Fields.

 

2.     The definition of Field in Schedule 2 shall be replaced in its entirety with the following:

 

Field (clause 2.1):

Influenza vaccines for humans, therapeutic and prophylactic cancer vaccines for humans including those associated with or resulting from viral infections, Varicella zoster vaccines for humans, MERS vaccines.

 

 

Letter of Variation

 

 

 

3.

The definition of ChAdOx1 Excluded Fields shall be amended such that it reads:

 

ChAdOx1 Excluded Fields (clause 2.1):    Malaria, tuberculosis, HIV, Neisseria meningitidis, human papilloma virus infections other than those that cause or otherwise involve cancer, hepatitis C virus, hepatitis B virus, Rift Valley Fever, dengue virus, Staphylococcus aureus, Ebola virus, Chagas disease, Chikungunya virus, pneumococcal disease, Marburg virus disease, Lassa fever, respiratory syncytial virus, Crimean-Congo haemorrhagic fever, severe acute respiratory syndrome (SARS), Hendra virus, Nipah virus, West Nile virus, Venezuelan equine encephalitis virus, Hanta Virus.

 

4.

The definition of ChAdOx2 Excluded Fields shall be amended such that it reads:

 

ChAdOx2 Excluded Fields (clause 2.1):     Therapeutic vaccines for Crohn’s disease, vaccines against rabies virus, and vaccines containing antigenic sequences derived from Mycobacterium avium subspecies paratuberculosis (MAP) for use in humans and animals for the treatment and prevention of diseases associated with MAP infection including but not limited to Crohn’s Disease, Psoriasis, Multiple Sclerosis, Parkinson’s Disease, Alzheimer’s Disease, Amyotrophic Lateral Sclerosis and Idiopathic Pulmonary Fibrosis.

 

5.

The definition of Application 4 in Schedule 2 shall be replaced in its entirety with the following:

 

Application 4:                                                [***].

 

6.

The following new definition for Applications 5:

 

Application 5:                                                [***].

 

7.

Our respective rights and liabilities under the Licence Agreement which have accrued up to the effective date of this Letter will remain unaffected other than as may be expressly stated in this letter.

 

8.

This Letter is supplemental to the Licence Agreement except as specifically amended by this letter the Licence Agreement shall continue in full force and effect in accordance with its terms.

 

9.

This letter is governed by English Law and the parties submit to the exclusive jurisdiction of the English Courts for the resolution of dispute which may arise out of or in connection with this agreement except in relation to any action in relation to Intellectual Property Rights or Confidential Information which may be sought in any court of competent jurisdiction.

 

 

Letter of Variation

 

 

 

Please countersign and date a copy of this letter and return to me to Indicate agreement to the variations to the License Agreement as set out in this letter. If we have not yet signed the letter, we will do so and return a fully executed copy to you after receiving your signed copy.

 

Signed for and on behalf of Oxford University Innovation Limited

 

/s/ Paul Ashley

 

Position:

Head of Technology Transfer

Dated:

23 January 2020

 

I, PRINT NAME: acting for and on behalf of

 

Vaccitech Limited hereby agree to the contents of this letter.

 

Signed:

/s/ William Enright

Dated:

28 January 2020

 

Position:

CEO

 

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

Confidential

 

DATED	29 April 2020
(1)          Oxford University Innovation Limited
- and -
(2)          Vaccitech Limited
Amendment, Assignment and Revenue Share Agreement   Concerning SARS-CoV2
Bristows LLP 100 Victoria Embankment London EC4Y ODH

 

 

Confidential

 

THIS AGREEMENT is made the 29^th day of April 2020

 

BETWEEN:-

 

(1)

Oxford University Innovation Limited, a company incorporated under the laws of England and Wales under company registration number 02199542, whose registered office is at University Offices, Wellington Square, Oxford, 0X1 2JD (“OUI”); and

 

(2)

Vaccitech Limited, a company incorporated under the laws of England and Wales under company registration number 09973585, whose registered office is at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, 0X4 4GE (“Vaccitech”).

 

BACKGROUND:

 

(A)

OUI and Vaccitech entered into a Licence of Technology dated 4 March 2016, as amended by a letter variation dated 14 January 2019 (the “Licence Agreement”).

 

(B)

Under the Licence Agreement, OUI granted Vaccitech a licence to certain vaccine technology, which was exclusive in certain fields and non-exclusive in other fields. Vaccitech’s non-exclusive licence includes a licence under certain OUI patent rights to use the ChAdOx1 and ChAdOx2 vectors and the adenovirus long promoter’ in the field of SARS-CoV2.

 

(C)

In response to the global COVID-19 pandemic, Oxford University is currently conducting a Phase I clinical trial of a vaccine based on the ChAdOx1 vector.

 

(D)

The vaccine is the subject of the Patent Application (as defined below). Vaccitech and OUI jointly own me rights io the Patent Application.

 

(E)

In order to enable the vaccine to be quickly manufactured at scale and distributed to meet global demand, the resources and expertise of one or more global pharmaceutical companies will be required

 

(F)

In order to vest all intellectual property rights in the vaccine in OUI, the Parties have agreed to: (a) amend the Licence Agreement; and (b) assign all of Vaccitech’s rights in the Patent Application and the Other Vaccine IPRs to OUI, in each case in accordance with the provisions of this Agreement. In return, the Parties have agreed to provide Vaccitech with a share of revenue that OUI receives in connection with the commercialisation of the Vaccine in accordance with the provisions of this Agreement

 

THE PARTIES AGREE AS FOLLOWS:

 

1.	DEFINITIONS

 

In this Agreement, the following words and expressions shall have the following meanings -

 

1.1	“Adenovirus Long Promoter”	the promoter that is claimed in international patent application number [***];
1.2	“Affiliate*	in relation to Vaccitech (the “subject”), any other entity that at the date of this Agreement (i) directly or indirectly controls, is controlled by, or is under common control with the subject.  In the case of entities having stocks, shares or a similar ownership designation “control” and ‘‘controlled” means beneficial ownership of more than fifty percent of the voting stock, shares or similar ownership designation.  In the case of any other entity, “control’ and “controlled’’ shall exist through the ability to directly or indirectly control the management and/or business of the other entity.  In this provision “entity” means any individual, firm, company, corporation or other corporate body or legal entity, or any joint venture, association or partnership (whether or not having a separate legal personality);

 

 

Confidential

 

1.3	“ChAdOx1 Vector”	the DNA sequence of the AdY25 simian adenovirus with the E1 and E3 regions both deleted, and E4 Orf 4, 6, 6/7 replaced with the corresponding regions from AdHu5, or any other vector that is claimed in international patent application number [***];
1.4	“ChAdOx2 Vector”	[***], or any other vector that is claimed in international patent application number [***];
1.5	“Intellectual Property Rights”	patents, petty patents, utility models, any extensions of the exclusivity granted in connection with the foregoing, registered, designs, trademarks, service marks, applications for any of the foregoing (including continuations, continuations-in-part and divisional applications), the right to claim priority from, the right to apply for and be granted any of the foregoing, rights in inventions, trade names, business names, brand names, get-up, logos, domain names, URLs, copyrights, design rights, database rights, publication rights, performance rights, rights in know-how, trade secrets and confidential information and all other forms of intellectual property right which may exist anywhere in the world;
1.6	“Other Vaccine IPRs”	all Intellectual Property Rights owned solely (or jointly with OUI) by Vaccitech or Vaccitech’s Affiliates:   (a)   that exist as at the date of this Agreement and that relate solely to the Vaccine and/or solely to manufacture of the Vaccine, (including those Intellectual Property Rights that were developed or generated by [***] in the course of her work on the Vaccine, to the extent that the same relate solely to the Vaccine and/or solely to manufacture of the Vaccine);   (b)   that arise after the date of this Agreement and that relate solely to the Vaccine or solely to manufacture of the Vaccine; or   (c)   that relate solely to any variations, improvements, enhancements or modifications to the Vaccine;   in each case, provided that such Intellectual Property Rights do not relate to any other product or the manufacture of any other product; and excluding the Patent Application and the inventions disclosed in the Patent Application;
1.7	“Patent Application”	patent application number [***]; and
1.8	“Vaccine”	any ChAdOx1 Vector-based or ChAdOx2 Vector-based vaccine that is described and/or covered by a claim of the Patent Application document as filed on 13 March 2020.

 

 

Confidential

 

2.	AMENDMENT OF LICENCE AGREEMENT
2.1	The Licence Agreement shall be amended as follows with effect from the date of this Agreement

 

2.1.1

The definition of ChAdOx1 Excluded Fields shall be amended by adding “and SARS-CoV2” to the end of the definition, so that it reads:

 

ChAdOx1 Excluded Fields (clause 2.1)

Malaria, tuberculosis, HIV, Neisseria meningitidis, human papilloma virus infections other than those that cause or otherwise involve cancer, hepatitis C virus, hepatitis B virus, Rift Valley Fever, dengue virus, Staphylococcus aureus, Ebola virus, Chagas disease, Chikungunya virus, pneumococcal disease, Marburg virus disease, Lassa fever, respiratory syncytial virus, Crimean-Congo haemorrhagic fever, severe acute respiratory syndrome (SARS), Hendra virus, Nipah virus, West Nile virus, Venezuelan equine encephalitis virus, Hanta Virus, and SARS-CoV2

 

2.1.2

The definition of ChAdOx2 Excluded Fields shall be amended by adding “vaccines against SARS-CoV2,” into the definition after the words “rabies virus,”, so that it reads:

 

ChAdOx2 Excluded Fields (clause 2.1)

Therapeutic vaccines for Crohn’s disease, vaccines against rabies virus, vaccines against SARS-CoV2, and vaccines containing antigenic sequences derived from Mycobacterium avium subspecies paratuberculosis (MAP) for use in humans and animals for the treatment and prevention of diseases associated with MAP infection including but- not limited to Crohn’s Disease, Psoriasis, Multiple Sclerosis, Parkinson’s Disease, Alzheimer’s Disease, Amyotrophic Lateral Sclerosis and Idiopathic Pulmonary Fibrosis.

 

2.1.3

Clause 2.1.1(a) of the Licence Agreement shall be amended by adding the word “both” just after the word ‘excluding’ and also adding the words “and SARS-CoV2” to the end of the definition, so that it reads:

 

(a)

in relation to Applications 1 and 2 (i) exclusive in the Field and (ii) non-exclusive in all other fields excluding both veterinary applications (apart from MERS) and SARS- CoV2;

 

2.2

For the avoidance of doubt, from the date of this Agreement, Vaccitech shall (i) no longer be entitled to use the ChAdOx1 Vector, the ChAdOx2 Vector or the Adenovirus Long Promoter in the SARS-CoV2 field, and (ii) cease (or procure the cessation, as the case may be) immediately of any work that may be ongoing using the ChAdOx1 Vector, the ChAdOx2 Vector and/or the Adenovirus Long Promoter in the SARS-CoV2 field; pursuant to the Licence Agreement (in any such case, whether by itself, its Affiliates or in conjunction with any third party)

 

 

Confidential

 

3.	ASSIGNMENT
3.1	Vaccitech and OUI, as joint owners, hereby irrevocably, unconditionally and absolutely assign to OUI as sole owner, all right, title and interest it may have in and to the Patent Application, and in and to any and all inventions disclosed in the Patent Application, including

 

	3.1.1	the right to claim priority from the Patent Application and to prosecute and obtain the grant of a patent;
	3.1.2	the right to file divisional applications based on the Patent Application and to prosecute and obtain the grant of patent on each and any such divisional application;
	3.1.3	in respect of each and any invention disclosed in the Patent Application, the right to file applications, claim priority from such applications, and prosecute and obtain the grant of patent or similar protection in or in respect of any country or territory in the world;
	3.1.4	the absolute entitlement to any patents granted pursuant to the Patent Applications or any of the applications set out in Clause 3.1, 33.1.3; and
	3.1.5	the right to bring, make, oppose, defend, and appeal proceedings, claims or actions and obtain relief (and to retain any damages recovered) in respect of any infringement, or any other cause of action arising from ownership, of the Patent Application or any of the applications set out in Clause 3.1.3 or any patents granted on the foregoing, whether occurring before on or after the date of this Agreement.

 

3.2

Vaccitech hereby irrevocably, unconditionally and absolutely assigns into the sole name of OUI all its right, title and interest in and to the Other Vaccine IPRs that exist as at the date of this Agreement, with the right to sue for damages and other relief for past infringement of any of the Other Vaccine IPRs that exist as at the date of this Agreement. To the extent that it is not legally possible to assign Other Vaccine IPRs which have not yet been created, Vaccitech shall hold such Other Vaccine IPRs on trust for the sole benefit of OUI and, to the extent not restricted by law or any agreement with any third party, assign them to OUI as and when requested by OUI pursuant to Clause 4, provided that to the extent that any third party has any right or interest in the same upon their creation, such holding on trust and assignment shall be subject to such right or interest of such third party.

 

4.	FURTHER ASSURANCE

 

At OUI’s expense, Vaccitech shall, and shall procure its employees, its Affiliates, and the employees of its Affiliates shall, promptly execute such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this Agreement and its subject matter. Without limiting the foregoing, this includes Vaccitech assisting OUI (at OUI’s expense) in obtaining, defending and enforcing any rights arising out of or comprised within the Patent Application and/or the Other Vaccine IPRs, and assisting with any other proceedings which may be brought by or against OUI, against or by any third party relating to the rights assigned by this Agreement.

 

5.	WARRANTIES

 

5.1	Each Party hereby warrants to the other that it has the full capacity and authority to enter into and perform this Agreement, and that doing so will not put it in breach of any contract or other arrangement with any third party.
5.2	Vaccitech hereby warrants to OUI as at the date of this Agreement that

 

	5.2.1	it has the right to make the assignments set out in Clause 3, free from all third party rights (other than potential third party rights in Other Vaccine IPRs arising after the date of this Agreement):
	5.2.2	2 2 it has not assigned or licensed, or agreed to assign or license, any of its rights in the Patent Application or the Other Vaccine IPRs existing as at the date of this Agreement to any third party, or otherwise created any encumbrance over the same:
	5.2.3	[***] was its employee at the time of her work on the Vaccine, carrying out her duties in the course of her employment with Vaccitech: and
	5.2.4	so far as it is aware, no third party has any right, title or interest in or to the Patent Application or the Other Vaccine IPRs existing as at the date of this Agreement.

 

 

Confidential

 

6.	REVENUE SHARE

 

6.1	In consideration for the amendments to the Licence Agreement set out in Clause 2 and the assignment in Clause 3, the Parties agree the revenue sharing arrangements set out in Schedule 1.

 

7.

GENERAL

 

Interpretation

 

7.1	In this Agreement the headings are for convenience only and shall not affect the interpretation of this Agreement. Unless otherwise stated, all references to Clauses or Schedules are references to Clauses or schedules of this Agreement.
7.2	The Schedules attached to this Agreement shall form part of this Agreement.
7.3	References to Clauses and Schedules are to the clauses and schedules of this Agreement.
7.4	Any words following the terms “including”, “include”, “in particular”, “for example” or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, phrase or term preceding those terms Severability.
7.5	If any provision of this Agreement is declared by any judicial or other competent authority to be void, voidable, illegal or otherwise unenforceable then the remaining provisions of this Agreement shall continue in full force and effect The judicial or other competent authority making such determination shall have the power to limit, construe or reduce the duration, scope, activity and/or area of such provision, and/or delete specific words or phrases as necessary to render such provision enforceable.

 

Waiver

 

7.6	Failure or delay by a Party to exercise any right or remedy under this Agreement shall not be deemed to be a waiver of that right or remedy, or prevent that Party from exercising that or any other right or remedy on that occasion or on any other occasion.

 

Entire Agreement and Amendments

 

7.7	This Agreement constitutes the entire agreement and understanding of the Parties relating to the subject matter of this Agreement and supersedes all prior oral or written agreements, representations, understandings or arrangements between the Parties relating to the subject matter of this Agreement.
7.8	The Parties acknowledge that in entering into this Agreement they do not rely on any statement, representation (including any negligent misrepresentation but excluding any fraudulent misrepresentation), warranty, course of dealing, custom or understanding except for the warranties expressly set out in this Agreement.
7.9	No change shall be made to this Agreement except in writing signed by the duly authorised representatives of all Parties.

 

Confidentiality and Publicity

 

7.10

OUI and Vaccitech shall agree wording for a press release that refers to Vaccitech and its role in the development of the Vaccine, and OUI shall include such agreed wording in each press release that it issues in relation to the grant of any of its rights in the Vaccine to any third party and in any subsequent press release relating or referring to development of the Vaccine.

 

 

Confidential

 

7.11	No Party shall disclose any information concerning this Agreement (including its existence, its provisions, or disputes relating to it) to any third party provided that a Party may disclose:-

 

7.11.1      any press releases agreed by the Parties and the information contained therein, and

 

7.11.2      information concerning this Agreement:

 

(a)           to its legal advisers, auditors and/or regulators,

 

(b)           to the extent required by law;

 

(c)           as necessary to enforce this Agreement; *

 

(d)           in the case of OUI, to Oxford University;

 

(e)           in the case of OUI, to licensees and potential licensees of OUI’s rights to the Vaccine, save that OUI shall not disclose any information in Schedule 1 to such licensees or potential licensees; and/or

 

(f)            in the case of OUI, as necessary or desirable for the purposes of registering its rights with applicable patent offices and other governmental authorities.

 

Third Party Rights

 

7.12	The Contracts (Rights of Third Parties) Act 1999 shall not apply in relation to this Agreement and nothing in this Agreement shall confer on any third party the right to enforce any provision of this Agreement.

 

Law and Jurisdiction

 

7.13	English law shall govern this Agreement including the formation, validity, interpretation, performance and any non-contractual causes of action arising out of or in connection with this Agreement.
7.14	The Parties submit irrevocably to the exclusive jurisdiction of the English courts in relation to any dispute arising out of or in connection with this Agreement.

 

Counterparts

 

7.15

This Agreement may be executed by exchange of signed counterparts (including those signed by way of electronic signature) as attachments to emails. Each counterpart that has been executed and delivered by a Party shall constitute an original of this Agreement, but all the counterparts shall together constitute the same agreement. If this Agreement is executed in counterparts, it shall not be effective unless and until each Party has executed and delivered a counterpart to the other Party.

 

Assignment

 

7.16

OUI may not assign or otherwise transfer any or its rights or obligations under this Agreement and may not assign its rights in respect of the Other Vaccine IPRs, the Patent Application or any inventions disclosed in the Patent Application, in each case without the prior written consent of Vaccitech, which may only be withheld where Vaccitech (acting reasonably) is not satisfied that its rights and entitlement under this Agreement is secured. Vaccitech may assign or transfer to any third party its rights to receive payments under this Agreement.

 

 

Confidential

 

Schedule 1

 

Revenue Sharing Arrangements

 

In addition to the definitions set out elsewhere in this Agreement, in this Schedule the following words and expressions shall have the following meanings:-

 

“Applicable Receipts”	means Net Receipts less OUI’s administrative fee of [***]
“Net Receipts”	means any and all payments and the value of all non-monetary consideration actually received by OUI with respect to any Relevant Vaccine IP under all Vaccine Licensing Agreements, excluding:   (a)       value added tax or other taxes paid to OUI; and   (b)       any payments received by OUI for reimbursement of GUI’s actual costs or expenses in connection with the drafting, filing, prosecution and maintenance of the Patent Application;
“Relevant Vaccine IP”	means:   (a)       the Patent Application or any other patent application claiming any invention described or claimed in the Patent Application;   (b)       the Other Vaccine IPRs; and/or   (c)       any right under the Licensed Technology (as defined in the Licence Agreement) to use the ChAdOx1 Vector, ChAdOx2 Vector and/or the Adenovirus Long Promoter in the SARS-COV2 field;
“Reporting Period”	means each three (3) month period ending on the last day March, June, September and December; and
“Vaccine Licensing Agreement”	means any agreement between OUI and a third party under which OUI grants such third party any rights under the Relevant Vaccine IP (including any option) to research, develop, make, have made, use, offer for sale, sell, have sold, import or export a Vaccine

 

1.

OUI shall not grant to any third party any rights in respect of the Relevant Vaccine IP in consideration for any non-monetary consideration, without the prior written consent of Vaccitech, which consent shall be subject to the Parties reaching agreement as to the monetary value of such non-monetary consideration for the purposes of calculation and payment to Vaccitech of the royalty under this Agreement

 

Payment Obligation

 

2.

OUI shall pay to Vaccitech twenty four per cent (24%) of all Applicable Receipts in each Reporting Period

 

3.

Within [***] after the end of each Reporting Period, OUI shall provide to Vaccitech a report setting out the Net Receipts received by OUI under all Vaccine Licensing Agreements upon which OUI is required to make payments to Vaccitech pursuant to paragraph 1 above (a “Revenue Report”).

 

 

Confidential

 

4.

Within [***] after the date OUl issues a Revenue Report and, provided Vaccitech issues OUl with a valid invoice (if requested at the time of the delivery of the Revenue Report by OUl), OUl shall pay the applicable payments due under paragraph-1- above on the Net Receipts which are the subject of such Revenue Report.

 

Payment Terms

 

5.

All sums due to Vaccitech under this Agreement shall be paid in British pounds sterling, or such other currency as may be agreed in writing by the Parties from time to time, to such bank account as specified by Vaccitech from time to time Where Net Receipts are received in a currency other than British pounds sterling OUl shall convert the same to British pounds sterling in accordance with its standard procedures and provide to Vaccitech details of the currency conversion used.

 

6.

If any payment is not paid by the due date, Vaccitech may charge interest on any outstanding amount of such payment on a daily basis at a rate equivalent to [***] per annum above the base rate of the Bank of England then in force in London.

 

7.

OUl shall make all payments to Vaccitech under this Agreement without deduction or withholding for taxes except to the extent that any such deduction or withholding is required by law. Any tax required to be withheld on amounts payable under this Agreement will be paid by OUl to the appropriate governmental authority, and OUl will furnish Vaccitech with proof of payment of such tax.

 

8.

Vaccitech may, upon written notice to OUl, appoint an independent accountant for the purpose of verifying the accuracy of the Revenue Report OUl shall make all relevant records available for inspection by such independent accountant during regular business hours upon reasonable advance notice from Vaccitech. Before beginning their audit, the independent accountant shall execute an undertaking to OUl to keep confidential all information reviewed during such audit provided that the conclusions of the audit and any payments owed may be disclosed to Vaccitech. If the audit reveals an underpayment by OUl, the underpaid amount along with any interest thereon shall be settled within [***] of the issue of the final report. If the audit reveals an underpayment by OUl of more than [***] in aggregate in respect of any period of 4 consecutive Reporting Periods, OUl shall pay the accountant’s fees in respect of that audit.

 

 

Confidential

 

AGREED by the Parties through their duly authorised representatives on the date written at the start of this Agreement-

 

For and on behalf of Oxford University Innovation Limited:-

For and on behalf of Vaccitech Limited:-

 

Signed	/s/ Matthew Perkins		Signed	/s/ William Enright
Full Name	Matthew Perkins		Full Name	William Enright
Title	CEO		Title	CEO

 

 

 

Exhibit 10.4

 

DATED 8 September 2017

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

(1)        OXFORD UNIVERSITY INNOVATION LIMITED

and

(2)         VACCITECH LIMITED

 

LICENCE OF TECHNOLOGY
(OUI PROJECT Nos. [***])

 

 

THIS AGREEMENT is made on

8 September 2017

 

BETWEEN:

 

(1)

OXFORD UNIVERSITY INNOVATION LIMITED (Company No. 2199542) whose registered office is at University Offices, Wellington Square, Oxford OX1 2JD, England (“OUI”); and

 

(2)

VACCITECH LIMITED (Company No. 9973585) whose registered office is at King Charles House, Park End Street, Oxford, Oxfordshire, OX1 1JD (the “Licensee”).

 

BACKGROUND:

 

(A)

The Licensed Technology is connected with OUI Projects [***] “Hepatitis B vaccine”, [***] “Human Papilloma Virus vaccine”, [***] “CD74 as Molecular Adjuvant”, [***] “Adenovirus vaccine vector (‘ChAdOx1’)” and [***] “ChAdOx2 - simian adenovirus vector”.

 

(B)

The Licensee wishes to acquire a licence to the Licensed Technology in order to develop products in the area of therapeutic vaccines and OUI is willing to license the Licensed Technology to the Licensee, on the terms of this agreement.

 

AGREEMENT:

 

1.

Interpretation

 

In this agreement (including its Schedules), any reference to a “clause” or “Schedule” is a reference to a clause of this agreement or a schedule to this agreement, as the case may be. Words and expressions used in this agreement have the meaning set out in Schedule 1.

 

2.

Grant of Licence

 

2.1

In consideration of the payments required to be made under this agreement by the Licensee, OUI grants to the Licensee a licence in the Territory in respect of the Licensed Technology to develop, make, have made, import, use and have used and Market the Licensed Product subject to the terms and conditions of this agreement. Subject to clause 4, the Licence in respect of:

 

2.1.1

the Licensed Intellectual Property is :

 

(a)

in relation to Applications 1 and 2 exclusive in all fields;

 

(b)

in relation to Application 3 non-exclusive in the field of Hepatitis B therapy;

 

(c)

in relation to Application 4 exclusive in the fields of Human Papilloma Virus associated diseases and Hepatitis B therapy;

 

(d)

in relation to Application 5 exclusive in the field of Hepatitis B therapy; and

 

2.1.2

the Licensed Know-how is non-exclusive in all fields.

 

2.2

As soon as is reasonably possible after the date of this agreement (and in any event within [***] of the date of this agreement), OUI will, at OUI’s cost, supply the Licensee with the Documents. OUI shall, for a period of [***] from the date of this agreement, continue to provide the Licensee with such documents and materials as embody the Licensed Know-How generated during that period.

 

2.3

The Licensee may grant sub-licences with the prior written consent of OUI, such consent not to be unreasonably withheld, conditioned or delayed, provided that:

 

 

(a)

the sub-licensee has obligations to the Licensee commensurate with those which the Licensee has to OUI under this agreement, except the financial terms hereof or where it is not legally possible to include such obligations in the sub-licence;

 

(b)

the nature of the proposed sub-licensee is not likely in OUI’s reasonable opinion to have any detrimental impact on the reputation of either OUI or of the University;

 

(c)

the sub-licensee has sufficient financial resources to develop and Market the Licensed Product (it being acknowledged and agreed that if the sub-licensee is a publicly-listed company with a market capitalisation equal to or in excess of [***] it will be considered to have sufficient financial resources to develop and Market the Licensed Product);

 

(d)

as soon as reasonably practicable following the grant of each sub-licence, the Licensee provides a certified copy of that sub-licence to OUI, such copy to be Confidential Information of the Licensee which may be redacted to the extent any information in such sub-licence does not relate to the Licensed Technology, OUI and/or this agreement;

 

(e)

the sub-licensee enters into a Deed of Covenant with the Licensor in the form set out in Schedule 5;

 

(f)

OUI will be deemed to have consented to a sub-licence within [***] of receipt of such written request by the Licensee to grant a sub-licence, provided it has not refused consent or requested reasonable further time or information to consider the request within such [***] period; and

 

(g)

no sub-licence will carry any right to sub-sub-license.

 

2.4

Notwithstanding clause 2.3, no prior written consent from OUI will be required for sublicences if:

 

(a)

the sub-licensee or an Affiliate of the sub-licensee, at the time of entering into a new sub-licence, is already a licensee or a sub-licensee of the Licensee in respect of all or part of the Licensed Technology; or

 

(b)

the sub-licensee Is a subsidiary or an Affiliate of the Licensee;

 

provided always that the sub-licence complies with provisions (a), (d) and (e) of clause 2.3.

 

2.5

A decision by OUI not to give prior written consent under clause 2.3(b) or (c) shall be accompanied by a written description of the reasons for such disapproval, and the parties shall promptly (within [***]) discuss the reasons OUI has given and the Licensee may challenge such reasons.

 

3.

Improvements

 

3.1

The Licensed Technology covered by the Licence in clause 2 includes Inventor Improvements. OUI will communicate in writing to the Licensee within a reasonable time, and in any event within [***] of becoming aware of the same, all Inventor Improvements.

 

3.2

The Licensee acknowledges and agrees that all Intellectual Property Rights in Inventor Improvements belong to OUI.

 

3.3

The Licensee will communicate in writing to OUI within [***] of intended publication all Licensee Improvements.

 

3.4

OUI acknowledges and agrees that all Intellectual Property Rights in the Licensee Improvements belong to the Licensee.

 

 

4.

Rights re Non-Commercial Use

 

4.1

The Licensee grants OUI an irrevocable, perpetual, royalty-free licence to grant the University and those persons who at any time work or have worked on the Licensed Technology the licence set out in clause 4.2.

 

4.2

OUI has granted and, in respect of Licensee Improvements, will grant, to the University and those persons who at any time work or have worked on the Licensed Technology a non- transferable, irrevocable, perpetual, royalty-free licence to use and publish the Licensed Technology and the Licensee Improvements for Non-Commercial Use.

 

4.3

Where the University wishes to submit a publication including Licensee Improvements, OUI shall procure that the University will use all reasonable endeavours to submit such draft publication to the Licensee in writing not less than [***] in advance of the submission for publication. The Licensee may make a written request to the University to delay submission for publication if, in the Licensee’s reasonable opinion, such delay is necessary in order to seek patent or similar protection for the Licensee Improvements. A delay imposed on submission for publication as a result of a written request made by the Licensee shall not last longer than is necessary to seek required protection; and therefore shall not exceed [***] from the date of receipt of the written request to delay submission for publication by the Licensee, although OUI will procure that the University will not unreasonably refuse a request from the Licensee for additional delay in the event that Intellectual Property Rights would otherwise be lost. Notification of the requirement for delay in submission for publication must be received by the University within [***] after the receipt of the notice of intention to publish by the Licensee, failing which the University shall be free to assume that the Licensee has no objection to the proposed publication.

 

4.4

OUI reserves the right to grant licences for Academic and Research Purposes to encourage basic research for Non-Commercial Use, whether conducted at an academic facility or subcontracted to a corporate facility, but not for the purposes of permitting commercialisation of the Licensed Technology licensed exclusively, or to authorise the development or marketing of products or services that are produced or supplied entirely or partially using the Licensed Technology.

 

5.

Filing and Maintenance

 

5.1

The Licensee will pay OUI the Past Patent Costs representing the Licensee’s sole contribution to the patent costs incurred by OUI prior to the parties entering into this agreement, within [***] of receiving an invoice from OUI following execution of this agreement.

 

5.2

OUI will, in consultation with the Licensee and at the Licensee’s cost, prosecute, use all reasonable endeavours to maintain, and renew the Applications throughout the duration of this agreement. OUI will give all reasonable consideration to the views of the Licensee and will not unreasonably refuse to prosecute, maintain or renew Applications provided always that the Licensee agrees to bear the costs of such action according to this Clause 5.2. The Licensee will reimburse OUI for all costs, filing fees, lawyers’ and patent agents’ fees, expenses and outgoings of whatever nature incurred by OUI in the prosecution, maintenance and renewal of the Applications (including those incurred in opposition proceedings before the European Patent Office or in ex parte re-examination or inter partes review proceedings in the United States Patent and Trademark Office (“USPTO”) or any similar proceedings before any patent office challenging the grant or validity of the Applications) within [***] of receiving an invoice from OUI. OUI shall be entitled to make it a condition of any action of OUI under this clause 5.2 that the Licensee provides OUI with sufficient money in advance to cover the costs likely to be incurred in the action.

 

5.3

Where any of the Applications are prosecuted in the USPTO and the Licensee is a small business concern as defined under the US Small Business Act (15USC632) OUI intends to pay reduced USPTO patent fees under US patent law 35USC 41(h)(1). The Licensee will notify OUI as soon as reasonably possible if it or a sub-licensee ceases to be a small business concern as defined under the US Small Business Act (15USC632) or becomes aware of any other reason why it would not qualify for reduced USPTO patent fees under US patent law 35 USC 41(h)(1).

 

  

5.4

The Licensee shall inform OUI not less than [***] in advance of the National Phase filing deadline (noted in Schedule 2) of the territories within the scope of the PCT that it wishes to be covered in the National Phase of the Applications. In the event that the Licensee does not give the required minimum of [***] advance notice OUI shall then be entitled to proceed with filing the Applications at the Licensee’s cost in whichever territories as it may in its sole discretion decide.

 

5.5

The Licensee shall be entitled to remove any one or more of the countries from the Territory at any time by giving not less than [***] notice to OUI. If the Applications are proceeding under the PCT then such notice may not be given any earlier than the date for commencement of the National Phase filing. For the avoidance of doubt the Licensee shall remain liable for the costs mentioned in clause 5.2 that arise or are incurred by OUI during the said notice period in respect of the countries being removed.

 

5.6

In the event that OUI elects to discontinue the prosecution and/or maintenance of any of the Applications, the Licensee shall have the right but not the obligation to take over prosecution and maintenance of the Applications OUI has elected to discontinue.

 

6.

Infringement

 

6.1

Each party will notify the other in writing of any misappropriation or infringement of any rights in the Licensed Technology of which the party becomes aware.

 

6.2

The Licensee has the first right (but is not obliged) to take Legal Action at its own cost in relation to any misappropriation or infringement of any Licensed Technology that OUI has licensed exclusively to Licensee under this Agreement subject to any field restriction included in the rights granted in Clause 2.1. The Licensee must discuss any proposed Legal Action with OUI prior to the Legal Action being commenced, and take due account of the legitimate interests of OUI in the Legal Action it takes provided always that the Licensee may act without further consultation if rights in the Licensed Technology would otherwise be prejudiced or lost.

 

6.3

If the Licensee takes Legal Action under clause 6.2, the Licensee will:

 

(a)

except where any Legal Action arises directly as a result of a breach by OUI of the warranties in Clause 12.2, indemnify and hold OUI and the University harmless against all costs (including lawyers’ and patent agents’ fees and expenses), claims, demands and liabilities arising out of or consequent upon a Legal Action and will settle any invoice received from OUI in respect of such costs, claims, demands and liabilities within [***] of receipt; and

 

(b)

treat any account of profits or damages (including, without limitation, punitive damages) awarded in or paid to the Licensee under any settlement of the Legal Action for any misappropriation or infringement of any rights included in the Licensed Technology as Net Sales for the purposes of clause 8, having first for these purposes deducted from the award or settlement an amount equal to any legal costs incurred by the Licensee in the Legal Action that are not covered by an award of legal costs; and

 

(c)

keep OUI regularly informed of the progress of the Legal Action, including, without limitation, any claims affecting the scope of the Licensed Technology.

 

6.4

OUI may take Legal Action at its own cost in relation to any misappropriation or infringement of any rights included in the Licensed Intellectual Property where:

 

(a)

the Licensee has notified OUI in writing that it does not intend to take any Legal Action in relation to any misappropriation or infringement of any rights included in the Licensed Technology under clause 6.2;

 

 

(b)

if having received professional advice with regard to any Legal Action within [***] of the notification under clause 6.1, and consulted with OUI, the Licensee does not take reasonable steps to act upon an agreed process for dealing with such misappropriation or infringement (which may include, for the avoidance of doubt, seeking a second opinion in respect of such professional advice) within any timescale agreed between OUI and the Licensee and in any event within [***] of notification under clause 6.1, OUI may take such Legal Action at its own cost provided it shall not settle any action without first consulting with the Licensee and taking account of the reasonable observations and requests of the Licensee.

 

7.

Confidentiality

 

7.1

Subject to clauses 7.2, 7.3 and 7.4, each party (being a receiving or disclosing party as the case may be) will keep confidential the Confidential Information of the other party and will not disclose or supply the Confidential Information to any third party or use it for any purpose, except in accordance with the terms and objectives of this agreement.

 

7.2

The Licensee may disclose to sub-licensees of the Licensed Technology such of the Confidential Information as is necessary for the exercise of any rights sub-licensed, provided that the Licensee shall ensure that such sub-licensees accept a continuing obligation of confidentiality on the same terms as this clause, and giving third party enforcement rights to OUI, before the Licensee makes any disclosure of the Confidential Information. The Licensee may also disclose the Licensed Technology to the extent reasonably required in connection with the conduct of its business including to potential investors, other business associates and professional advisors provided that such persons have agreed in writing to be bound by non-use and non-disclosure obligations that are no less strict than those set forth in this agreement or are subject to professional codes of conduct that prevent disclosure of client confidential information and the Licensee will take action in respect of any breach of such obligations.

 

7.3

Confidential Information may be exchanged freely between OUI and the University and communications between those two parties shall not be regarded as disclosures, dissemination or publication for the purpose of this agreement. OUI may also disclose the terms of this agreement and royalty reports and payments made by the Licensee to any third parties that have rights to a revenue share for providing funding in the development of the Licensed Technology provided that such persons have agreed in writing to be bound by nonuse and non-disclosure obligations that are no less strict than those set forth in this agreement or are subject to professional codes of conduct that prevent disclosure of client confidential information and OUI will take action in respect of any breach of such obligations.

 

7.4

Clause 7.1 will not apply to any Confidential Information which:

 

(a)

is known to the receiving party before disclosure, and not subject to any obligation of confidentiality owed to the disclosing party;

 

(b)

is or becomes publicly known without the fault of the receiving party;

 

(c)

is obtained by the receiving party from a third party in circumstances where the receiving party has no reason to believe that it is subject to an obligation of confidentiality owed to the disclosing party;

 

(d)

the receiving party can establish by reasonable proof was substantially and independently developed by officers or employees of the receiving party who had no knowledge of the disclosing party’s Confidential Information; or

 

(e)

is approved for release in writing by an authorised representative of the disclosing party.

 

7.5

Nothing in this agreement will prevent a party from disclosing Confidential Information where it is required to do so by law or regulation, stock exchange rules, or by order of a court or competent authority, provided that, in the case of a disclosure under the Freedom of Information Act 2000 (“FOIA”), none of the exemptions in the FOIA applies to the relevant Confidential Information and provided always that, to the extent permitted by law or regulation, the receiving party will give such notice as is reasonably practicable in the circumstances to the disclosing party about the timing and content of such a disclosure.

 

 

7.6

If either party to this agreement receives a request under the FOIA to disclose any information that, under this agreement, is the other party’s Confidential Information, it will notify and consult with the other party. The other party will respond within [***] after receiving notice if that notice requests the other party to provide information to assist in determining whether or not an exemption under the FOIA applies to the information requested under the FOIA.

 

8.

Royalties and Other Payments

 

8.1

OUI will invoice the Licensee for the Signing Fee shortly after signature of this agreement and the Licensee must settle the invoice within [***] of receipt.

 

8.2

Subject to clause 8.3, the Licensee will pay to OUI a royalty equal to the applicable Royalty Rate on all Net Sales of Licensed Products for the duration of the agreement on the terms set out in clause 10.

 

8.3

Following expiration or revocation of the last Valid Claim covering a Licensed Product in a country in which the Licensed Product is Marketed and where there is being Marketed and sold by a third party in the normal course of business a product that, directly or indirectly, competes with the Licensed Product, the Step Down Rate (as defined below) shall apply on a country-by-country basis to the applicable Royalty Rate of such Licensed Products. For the purposes of this clause 8.3, the “Step Down Rate” shall be the percentage decrease of (a) [***] compared against (b) [***].

 

8.4

In the event that the royalties paid to OUI under clause 8.2 does not amount to at least the Minimum Sum, the Licensee must make up the difference between the royalties paid under clauses 8.2 and the Minimum Sum in each Licence Year where a Minimum Sum applies.

 

8.5

The Licensee will notify OUI as soon as possible after it or any sub-licensee achieves any Milestone, and pay to OUI the Milestone Fee in respect of each Milestone within [***] of the date on which each Milestone is achieved by the Licensee or a sub-licensee.

 

8.6

The Licensee will pay to OUI a royalty equal to the Fee Income Royalty Rate on any sublicensing fees that the Licensee receives for sublicensing the Licensed Technology with a third party. For the purposes of this clause 8.6, Sublicensing fees shall include upfront fees, milestone payments and other consideration received by the Licensee from such third party but shall exclude:

 

(a)

royalties paid to the Licensee by a sub-licensee based on net sales of Licensed Products;

 

(b)

milestone payments paid to the Licensee by a sub-licensee on a Milestone event; and

 

(c)

any sums received that are to be used to fund research and/or development.

 

8.7

If the Licensee has to pay royalties to a third party (other than an Affiliate), for the right to make, have made, use or Market a Licensed Product, under a licence of Intellectual Property Rights without which the Licensed Technology cannot lawfully be exploited, then the Licensee will be entitled to deduct from all royalty payments due to OUI in respect of Net Sales of the Licensed Product under clause 8.2 an amount equal to [***] of the royalties actually paid to that third party, up to a maximum amount of [***] of the royalties due to OUI under clause 8.2.

 

8.8

Where a Licensed Product is sold as part of a combination product or co-packaged product, the Net Sales from the combination product or the co-packaged product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the combination product or the co-packaged product, during the applicable royalty reporting period, by the fraction:

 

 

[***]

 

Where A is the average sale price of the Licensed Product when sold separately in finished form, or if not sold separately, the market price of the Licensed Product if it were sold separately and B is the average sale price of the other product(s) included in the combination product or co-packaged product when sold separately in finished form, or if not sold separately, the aggregate market price of the other product(s) if it were sold separately in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product(s) did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for the Licensed Product and any other product(s) included in the combination product or co-packaged product, then the Net Sales for the purposes of determining royalty payments for a combination product or a co-packaged product shall be referred to an independent expert for determination.

 

8.9

The Signing Fee and the Milestone Fee are non-refundable and will not be considered as an advance payment on royalties payable under clause 8.2. No part of the Minimum Sum will be refundable or applicable to succeeding Licence Years.

 

8.10

Licensed Products supplied for use in any clinical trial carried out by or on behalf of the Licensee or any of its sub-licensees shall not be deemed to be sales and shall not be included within any Net Sales calculation.

 

8.11

The Licensee or any of its sub-licensees may supply a commercially reasonable quantity of Licensed Products for promotional sampling provided that after Licensee commences commercial supply of Licensed Product, the number of Licensed Products supplied for promotional sampling shall not be greater than [***] of the total number of units of each Licensed Product sold leased or licensed by the Licensee in any Quarter following the Licensee receiving Marketing Authorization for the Licensed Product in any territory. Except as set out in this clause, the Licensee must not accept any non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology without the prior written consent of OUI, such consent not to be unreasonably withheld, conditioned or delayed. The Licensee may accept non-monetary consideration when Marketing the Licensed Products or when issuing sub-licences of the Licensed Technology provided either (a) [***] of such non-monetary consideration is able to be converted into cash within [***] of receipt from the Licensee to enable the Fee Income Royalty Rate to be paid to OUI in cash or (b) the Licensee covenants in writing to pay to OUI in cash, within [***] of receipt of the non-monetary consideration, the Fee Income Royalty Rate due to OUI.

 

8.12

The Licensee will make all payments in pounds sterling or any currency replacing pounds sterling in its entirety.

 

8.13

For the purposes of calculating any amount payable by the Licensee to OUI in a currency other than pounds sterling (or replacement currency), the Licensee shall apply an exchange rate equivalent to:

 

(a)

the average of the applicable closing mid rates quoted by the Financial Times as published in London on the first Business Day of each month during the Quarter just closed; or

 

(b)

for payments under clause 8.6 only, the first Business Day of the month in which the payment was received by the Licensee.

 

8.14

Where the Licensee has to withhold tax by law, the Licensee will deduct the tax, pay it to the relevant taxing authority, and supply OUI with a Certificate of Tax Deduction at the time of payment to OUI. Where such an issue arises, the Licensee will not be liable for any costs or penalties associated with late payment to OUI provided that the Licensee takes reasonable steps to ensure that any such matters are dealt with as expeditiously as reasonably possible.

 

8.15

In the event that full payment of any amount due from the Licensee to OUI under this agreement is not made by any of the dates stipulated, the Licensee shall be liable to pay interest on the amount unpaid at the rate of [***] per annum over the base rate for the time being of Barclays Bank plc. Such interest shall accrue on a daily basis from the date when payment was due until the date of actual payment of the overdue amount, whether before or after judgment, and shall be compounded quarterly.

 

 

8.16

If the Licensed Product is of a description covered by the Medicines Access Policy, the Licensee shall adhere to the requirements of the Medicines Access Policy. In particular in the event the Licensed Products can be used to ease the burden of illness in the developing world, the Marketing of Licensed Products will be managed in a manner that enables availability and accessibility at reasonable cost to the people most In need in the developing world.

 

9.

Commercially Reasonable Endeavours

 

9.1

Subject to clause 9.3, the Licensee must use Commercially Reasonable Endeavours to develop, exploit and Market the Licensed Technology to maximize the financial return for both parties.

 

9.2

Subject to clause 9.3, the Licensee must use Commercially Reasonable Endeavours to develop, exploit and Market the Licensed Technology in accordance with the Development Plan as set out separately In respect of each Indication.

 

9.3

The Licensee will deliver to OUI at least [***] prior to the commencement of each subsequent Licence Year a revised development plan for the intended development of a Licensed Product for each Indication together with any background supporting information necessary for OUI to evaluate the draft plan. The Licensee will consult with OUI over the draft plan and will consider in good faith any comments that OUI may put forward. Following approval of the revised development plan by OUI, the revised development plan shall become the Development Plan.

 

9.4

The Licensee may give written notice to OUI that it no longer intends to develop, exploit and Market a Licensed Product in an Indication and following that notice:

 

9.4.1

the Licensee will no longer have obligations to use Commercially Reasonable Endeavours to develop, exploit and Market a Licensed Product in that Indication; and

 

9.4.2

without prejudice to any and all of its existing rights under this agreement, the Licensee will no longer have any rights to use the Licensed Technology in relation to that Indication.

 

10.

Royalty Reports and Audit

 

10.1

The Licensee will provide OUI with a report at least once in every [***] detailing the activities and achievements in its development of the Licensed Technology in order to facilitate its commercial exploitation, and in the development of potential Licensed Products.

 

10.2

The Licensee will provide OUI with a royalty report within [***] after the close of each Quarter for each Licensed Product Marketed by the Licensee and its sub-licensees. Each Royalty Report will:

 

(a)

set out the Net Sales of each Licensed Product Marketed by the Licensee, and any sub-licensees including the total gross selling price of each Licensed Product Marketed by the Licensee and any sub-licensees and the quantity or total number of units of each Licensed Product Marketed by the Licensee and any sub-licensees;

 

(b)

set out details of deductions made in the calculation of Net Sales from the invoiced price of each Licensed Product in the form in which it is Marketed by the Licensee or any sub-licensees;

 

(c)

set out details of the quantity of Licensed Products used for promotional sampling by the Licensee or any sub-licensees;

 

(d)

provide a calculation of the royalties due;

 

 

(e)

set out details of payments received by the Licensee to which the Fee Income Royalty Rate applies and provide a calculation of the royalties due from the Licensee to be paid under the Fee Income Royalty Rate;

 

(f)

provide a statement showing whether or not royalties due exceed the Minimum Sum and, if so, by how much;

 

(g)

set out details of Milestones achieved by the Licensee or any sub-licensees; and

 

(h)

set out the steps taken during the Licence Year to promote and Market Licensed Products.

 

The Licensee must pay OUI the royalties due in respect of the Quarter just closed at the same time as the Licensee delivers the Royalty Report provided that, if requested, OUI will issue an invoice for the relevant payment prior to payment.

 

10.3

The Licensee will deliver to OUI a periodic report at the close of each Licence Year providing sufficient data (in outline form) to give a reasonable indication or estimate of the actual or expected market share of the Licensee and its sub-licensees and will notify OUI in the event that its market share does or is expected to breach the limits set out in the 2014 Commission Regulation 316/2014 Technology Transfer Block Exemption Regulation and Guidelines in Commission Communication 2014/C 89/03 and any successor regulation. This obligation is not intended to place a significant additional financial burden on the Licensee.

 

10.4

If a Licensed Product Marketed by the Licensee is re-Marketed by an Affiliate or an entity over which the Licensee exercises Control, the royalty on each such Licensed Product will be calculated on the highest of the prices at which it is Marketed or re-Marketed. For the avoidance of doubt, when a Licensed Product is sold to an arm’s length distributor then Net Sales is calculated on the transfer price paid by the distributor to the Licensee.

 

10.5

The Licensee must keep complete and proper records and accurate accounts of all Licensed Products used and Marketed by the Licensee and any sub-licensee in each Licence Year for at least [***]. OUI may, through an independent certified accountant appointed by OUI (“the Auditor”), audit all such accounts on at least [***] written notice no more than once each Licence Year for the purpose of determining the accuracy of the Royalty Reports and payments. The Auditor shall be:

 

10.5.1

permitted by the Licensee to enter the Licensee’s principal place of business upon reasonable notice to inspect such records and accounts;

 

10.5.2

entitled to take copies of or extracts from such records and accounts as are strictly necessary for the Auditor to properly conduct the audit;

 

10.5.3

given all other information by the Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

10.5.4

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Licensee in order to verify the accuracy of the records and accounts and the accuracy of any statements provided to OUI under clause 10.2.

 

If on any such audit a shortfall in payments of greater than [***] is discovered by the Auditor in respect of the audit period, the Licensee shall pay OUI’s audit costs.

 

10.6

The Licensee will ensure that equivalent obligations and access rights, as set out in clause 10.5, allowing OUI auditing rights to the sub-licensee are included in each sub-licence agreement.

 

 

11.

Duration and Termination

 

11.1

This agreement will take effect on the date of signature. Subject to the possibility of earlier termination under the following provisions of this clause 11, and subject to the possibility of an extension to the term by mutual agreement, this agreement shall continue in force:

 

(a)

until the expiry of the last Valid Claim anywhere in the world; and

 

(b)

in any event for twenty (20) years from the date of this agreement.

 

11.2

If either party commits a material breach of this agreement, and the breach is not remediable or (being remediable) is not remedied within the period allowed by notice given by the other party in writing calling on the party in breach to effect such remedy (such period being not less than [***]), the other party may terminate this agreement by written notice having immediate effect.

 

11.3

The Licensee may terminate this agreement for any reason at any time provided it gives OUI [***] written notice to terminate expiring after the third anniversary of this agreement whereupon the Licensee shall bring all sub-licences to an end on the same date. Any such termination shall not absolve the Licensee of its obligation to accrue and pay royalties and other payments under the provisions of clause 8 in respect of the period prior to termination.

 

11.4

OUI may terminate this agreement:

 

(a)

immediately, if the Licensee has a petition presented for its winding-up (but excluding for this purpose any winding up petition presented against the Licensee in relation to any debt disputed by the Licensee), or passes a resolution for voluntary winding-up otherwise than for the purposes of a bona fide amalgamation or reconstruction, or compounds with its creditors, or has a receiver administrator or administrative receiver appointed of all or any part of its assets, or enters into any arrangements with creditors, or takes or suffers any similar action in consequence of debts;

 

(b)

on [***] written notice if:

 

(i)

the Licensee opposes or challenges the validity of any of the Applications or raises the claim that the Licensed Know-how is not necessary to develop and Market Licensed Products, provided always that nothing in this clause 11.4(b) will prevent the Licensee from seeking to determine whether a product of the Licensee is a Licensed Product for the purposes of this agreement; or

 

(ii)

the Licensee is in breach of clause 9.1 and the Licensee does not take any remedial action reasonably requested by OUI and notified to the Licensee by written notice pursuant to clause 11.2.

 

11.5

On termination or expiration of this agreement, for whatever reason, the Licensee:

 

(a)

must bring all sub-licences to an end on the same date;

 

(b)

shall pay to OUI all outstanding royalties and other sums due under this agreement;

 

(c)

shall provide OUI with details of the stocks of Licensed Products held at the point of termination;

 

(d)

must cease to use or exploit the Licensed Technology, provided that this restriction does not apply to Licensed Know-How or Confidential Information which has entered the public domain through no fault of the Licensee, and that the Licensee may continue to use the Licensed Technology in order to meet any specific existing binding commitments already made by the Licensee at the date of termination and requiring delivery of Licensed Products within the next [***];

 

 

(e)

must, at the option of OUI and at the Licensee’s cost, destroy all other Licensed Products or send all other Licensed Products to a location nominated by OUI to the Licensee in writing;

 

(f)

grants OUI an irrevocable, transferable, non-exclusive licence to develop, make, have made, use and Market the Licensee’s Improvements and products that incorporate, embody or otherwise exploit the same. OUI shall pay a reasonable royalty for use of this licence unless the termination arises under clause 11.4, or is terminated by OUI under clause 11.2, in which case it shall be royalty-free.

 

11.6

Termination of this agreement, whether for breach of this agreement or otherwise, shall not absolve the Licensee of its obligation to accrue and pay royalties under the provisions of clause 8 for the duration of any notice period and in respect of any dealings in Licensed Products permitted by clause 11.5.

 

11.7

Clauses 1, 4.2, 6.3, 11.5, 11.7, 11.8, 12, 13.4 and 13.14 will survive the termination or expiration of this agreement, for whatever reason, [***].

 

11.8

Clauses 7 and 10.5 will survive the termination or expiration of this agreement, for whatever reason, [***].

 

12.

Liability

 

12.1

Subject to Clause 12.2 and to the fullest extent permissible by law, OUI does not make any warranties of any kind including, without limitation, warranties with respect to:

 

(a)

the quality of the Licensed Technology;

 

(b)

the suitability of the Licensed Technology for any particular use;

 

(c)

whether use of the Licensed Technology will infringe third-party rights; or

 

(d)

whether the Applications will be granted or the validity of any patent that issues in response to the Applications.

 

12.2

OUI warrants to the Licensee that so far as OUI is aware (not having made any specific enquiries) as at the date of this agreement:

 

12.2.1

OUI has the necessary corporate power and authority to enter into this agreement and to grant the licences set out in this agreement to the Licensee;

 

12.2.2

with the exception of the licence back to the University for Non-Commercial Use, the University has assigned all of its right, title and interest in the Licensed Technology to OUI;

 

12.2.3

it has not created any charge or mortgage over the Licensed Technology;

 

12.2.4

it has not created any licence over Application 1 or Application 2; and

 

12.2.5

there is no actual or threatened infringement of the Licensed Technology by any third party.

 

 

12.3

Except in relation to any claims, damages and liabilities arising directly from (i) a breach of this agreement by OUI, and/or (ii) the fraud, negligence or wilful misconduct of OUI or the University, the Licensee agrees to indemnify OUI and the University and hold OUI and the University harmless from and against any and all claims, damages and liabilities:

 

(a)

asserted by third parties (including claims for negligence) which arise from the use of the Licensed Technology or the Marketing of Licensed Products by the Licensee and/or its sub-licensees; and/or

 

(b)

arising directly from any breach by the Licensee of this agreement provided however that this indemnity for breach by the Licensee is subject to clause 12.6.

 

12.4

OUI will use reasonable endeavours to defend any Indemnified Claim and to mitigate its losses, claims, liabilities, costs, charges and expenses or (at OUI’s option) allow the Licensee to do so on its behalf (subject to the University retaining the right to be kept informed of progress in the action and to have reasonable input into its conduct). OUI will not (except as required by law) make any admission, compromise, settlement or discharge of any Indemnified Claim without the consent of the Licensee (which will not be unreasonably withheld or delayed).

 

12.5

The Licensee undertakes to make no claim against any employee, student, agent or appointee of OUI or of the University, being a claim which seeks to enforce against any of them any liability whatsoever in connection with this agreement or its subject-matter.

 

12.6

Subject to clause 12.8 and except in relation to the indemnities in clause 6.3 and 12.3(a), the liability of either party for any breach of this agreement, in negligence or arising in any other way out of the subject-matter of this agreement, will not extend to incidental, indirect or consequential damages or loss of profits.

 

12.7

Subject to clause 12.8 the liability of OUI to the Licensee accruing in any Licence Year under or otherwise in connection with this agreement or its subject-matter, including without limitation liability for negligence, shall in no event exceed:

 

(a)

in respect of liability accruing in the first Licence Year, the amount of the Signing Fee paid to OUI; and

 

(b)

in respect of liability accruing in any subsequent Licence Year, the total royalties paid in the previous Licence Year to OUI under clause 8.2.

 

12.8

Nothing in this agreement shall limit or exclude any liability for fraud or fraudulent misrepresentation or death, or personal injury or any other liability which may not, by law, be excluded.

 

12.9

Notwithstanding any other clause in this agreement, OUI shall not be entitled to profit from any grant of a licence to any third party in respect of the Licensed Technology that breaches the exclusive rights granted to the Licensee under clause 2.1.1(a) of this agreement (“a Licence to the Exclusive Rights”). In the event that the Licensee (acting in good faith) believes that OUI has granted a Licence to the Exclusive Rights, then the Licensee shall provide written notice to OUI with full particulars and all evidence supporting the Licensee’s basis for such belief. Within [***] of receipt of written notice from the Licensee, OUI will notify the Licensee in writing whether it admits or disputes that It has granted a Licence to the Exclusive Rights. If OUI serves notice that it disputes that it has granted a Licence to the Exclusive Rights OUI and the Licensee shall enter into good faith negotiations in order to reach mutual agreement to resolve the dispute and if such mutual agreement is not reached within [***] after OUI’s receipt of the Licensee’s written notice, then the parties will refer the dispute to an independent expert (“Independent Expert”) for determination on the following basis:

 

12.9.1

the Independent Expert shall be agreed on by the parties, or, if agreement is not reached within [***] of either party giving notice to the other that it wishes to refer a matter to an Independent Expert, the Independent Expert may be nominated by the President of the Law Society of England and Wales on the request of either party;

 

12.9.2

the Independent Expert shall be asked to determine:

 

12.9.2.1

whether OUI has granted a Licence to the Exclusive Rights; and

 

12.9.2.2

any dispute between the parties over the amount of consideration paid to OUI under any Licence to the Exclusive Rights;

 

 

12.9.3

the Independent Expert shall act as an expert and not as an arbitrator;

 

12.9.4

the Independent Expert’s decision shall be final and binding on the parties in the absence of fraud or manifest error; and

 

12.9.5

each party shall bear its own costs in relation to the reference to the Independent Expert. The Independent Expert’s fees and any costs it properly incurs in arriving at its determination (including any fees and costs of any advisers appointed by the Independent Expert) shall be borne by the parties in equal shares or in such proportions as the Independent Expert may direct.

 

12.10

In the event that OUI has admitted or the Independent Expert has determined that OUI has granted a Licence to the Exclusive Rights then OUI will pay to the Licensee a sum equal to all consideration paid to OUI under the Licence to the Exclusive Rights (including consideration that is not in the form of cash payments where it is possible to put a cash value on such a payment). OUI will pay that sum to the Licensee as soon as possible and in any event no later than [***] following the date of admission by OUI or the Independent Expert’s determination and will continue to pay a sum equal to all further consideration received by OUI under any such Licence to the Exclusive Rights no later than [***] after receipt. The parties agree that the payment of such sums to the Licensee represent the full amount of compensation to which the Licensee is entitled and the extent of OUI’s liability to the Licensee for any grant by OUI of a Licence to the Exclusive Rights.

 

13.

General

 

13.1

Registration - The Licensee must register its interest in the Licensed Technology with any relevant authorities in the Territory as soon as legally possible. The Licensee must not, however, register an entire copy of this agreement in any part of the Territory or disclose its financial terms without the prior written consent of OUI (such consent not to be unreasonably withheld or delayed).

 

13.2

Advertising - The Licensee must not use the name of OUI, the University or the Inventors (except those Inventors who are, or have at any time been, shareholders of the Licensee) in any advertising, promotional or sales literature, without OUI’s prior written approval (such consent not to be unreasonably withheld or delayed).

 

13.3

Packaging - The Licensee will ensure that the Licensed Products and the packaging associated with them are marked suitably with any relevant patent or patent application numbers to satisfy the laws of each of the countries in which the Licensed Products are sold or supplied and in which they are covered by the claims of any patent or patent application, to the intent that OUI shall not suffer any loss or any loss of damages in an infringement action.

 

13.4

Thesis - This agreement shall not prevent or hinder registered students of the University from submitting for degrees of the University theses based on the Licensed Technology; or from following the University’s procedures for examinations and for admission to postgraduate degree status.

 

13.5

Taxes - Where the Licensee has to make a payment to OUI under this agreement which attracts value-added, sales, use, excise or other similar taxes or duties, the Licensee will be responsible for paying those taxes and duties.

 

13.6

Notices - All notices to be sent to OUI under this agreement must indicate the OUI Project N° and should be sent, by post and fax unless agreed otherwise in writing, until further notice to: The Chief Operating Officer, OUI Innovation Ltd, Buxton Court, 3 West Way, Oxford OX2 OSZ, Fax: +44 (0)1865 280831. All notices to be sent to the Licensee under this agreement should be sent, until further notice, to the Licensee’s Contact and Address indicating the OUI Project No.

 

 

13.7

Force Majeure - If performance by either party of any of its obligations under this agreement (not including an obligation to make payment) is prevented by circumstances beyond its reasonable control, that party will be excused from performance of that obligation for the duration of the relevant event.

 

13.8

Assignment - The Licensee may assign any of its rights or obligations under this agreement in whole or in part to an Affiliate but only for so long as it remains an Affiliate and OUI shall at the request of the Licensee execute a deed of novation to bring about that assignment. Except as provided in this clause, the Licensee may not assign any of its rights or obligations under this agreement without the prior written consent of OUI (such consent not to be unreasonably withheld, delayed or conditioned except solely on the grounds that primarily relate to avoiding any detrimental reputational impact on the University or the assignee having insufficient funds to fulfil the obligations of this agreement, it being acknowledged and agreed that if the assignee is a publicly-listed company with a market capitalisation equal to or in excess of [***] it will be considered to have sufficient financial resources to develop and Market the Licensed Product). If OUI assigns Its rights in the Licensed Technology to any person it shall do so expressly subject to the Licensee’s rights under this agreement.

 

13.9

Severability - If any of the provisions of this agreement is or becomes invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions will not in any way be affected or impaired. The parties will, however, negotiate to agree the terms of a mutually satisfactory provision, achieving as nearly as possible the same commercial effect, to be substituted for the provision found to be void or unenforceable.

 

13.10

No Partnership etc - Nothing in this agreement creates, implies or evidences any partnership or joint venture between OUI and the Licensee or the relationship between them of principal and agent.

 

13.11

Entire Agreement - This agreement constitutes the entire agreement between the parties in relation to the Licence to the exclusion of all other terms and conditions (including any terms or conditions which the Licensee purports to apply under any purchase order, confirmation order, specification or other document). The Licensee has not relied on any other statements or representations in agreeing to enter this agreement and waives all claims for breach of any warranty and all claims for any misrepresentation (negligent or of any other kind, unless made by OUI fraudulently) in relation to any representation which is not specifically set out in this agreement. Specifically, but without limitation, this agreement does not impose or imply any obligation on OUI or the University to conduct development work. Any arrangements for such work must be the subject of a separate agreement between the University and the Licensee.

 

13.12

Variation - Any variation of this agreement must be in writing and signed by authorised signatories for both parties. For the avoidance of doubt, the parties to this agreement may rescind or vary this agreement without the consent of any party that has the benefit of clause 13.14.

 

13.13

Waiver - No failure or delay by either party in enforcing its rights under this agreement, or at law or in equity will prejudice or restrict those rights. No waiver of any right will operate as a waiver of any other or later right or breach. Except as stated to the contrary in this agreement, no right, power or remedy conferred on, or reserved to, either party is exclusive of any other right, power or remedy available to it, and each of those rights, powers, and remedies is cumulative.

 

13.14

Rights of Third Parties - The parties to this agreement intend that by virtue of the Contracts (Rights of Third Parties) Act 1999 the University and the people referred to in clause 12.5 will be able to enforce the terms of this agreement intended by the parties to be for their benefit as if the University and the people referred to in clause 12.5 were party to this agreement.

 

13.15

Governing Law - This agreement is governed by English Law, and the parties submit to the exclusive jurisdiction of the English Courts for the resolution of any dispute which may arise out of or in connection with this agreement except in relation to any action in relation to Intellectual Property Rights or Confidential Information which may be brought in any court of competent jurisdiction.

 

 

Schedule 1

 

DEFINITIONS
(Clause 1)

 

Academic and Research Purposes means research, teaching or other scholarly use which is undertaken for the purposes of education and research.

 

Affiliate means any company or legal entity in any country Controlling or Controlled by the Licensee (or any legal entity in a country Controlling or Controlled by the sub-licensee).

 

AIN means anal intraepithelial neoplasia.

 

Applications means:

 

	(a)	the patent applications set out as Applications 1, 2, 3,4 and 5 in Schedule 2;
	(b)	any patents granted in response to those applications;
	(c)	any corresponding foreign patents and applications which may be granted to OUI in the Territory based on and deriving priority from those applications; and
	(d)	any addition, continuation, continuation-in-part, division, reissue, renewal or extension based on the applications.

 

Business Day means a day, other than a Saturday or Sunday, on which clearing banks are permitted to open in London.

 

CIN means cervical intraepithelial neoplasia.

 

Clinical Patient Care means diagnosing, treating and/or managing the health of persons under the care of an individual having the right to use the Licensed Technology for Academic and Research Purposes in the event that such Licensed Technology is capable of application in a healthcare setting without further development.

 

Commercially Reasonable Endeavours means, in respect of each Indication to be developed separately, the effort a prudent and determined company of comparable size and sector to the Licensee would take to pursue the goal of developing and Marketing Licensed Products to maximize the financial return and in any event do no less than is required to fulfil the steps laid out in the Development Plan.

 

Confidential Information means in relation to each party any materials, trade secrets or other information disclosed by that party to the other, including, without limitation:

 

(a)

the Licensed Technology, to the extent that it Is not disclosed by the Application when published; and

 

(b)

this agreement.

 

Control means:

 

(a)

ownership of more than fifty percent (50%) of the voting share capital of the relevant entity; or

 

(b)

the ability to direct the casting of more than fifty percent (50%) of the votes exercisable at a general meeting of the relevant entity on all, or substantially all, matters.

 

Development Plan means the plan set out in Schedule 3 as revised in accordance with clause 9.3.

 

Documents means the documents and materials set out in Schedule 4.

 

Fee Income Royalty Rate means the fee income royalty rate set out in Schedule 2.

 

 

HBV means hepatitis B virus.

 

HPV means human papilloma virus.

 

Improvement means any development of the Licensed Technology which would, if commercially practised, infringe and/or be covered by a claim subsisting or being prosecuted in an Application.

 

Indication means Hepatitis B Virus therapy and Human Papilloma Virus associated diseases.

 

Indemnified Claim means any claim under which OUI and the University are entitled to be indemnified under clause 12.3.

 

Intellectual Property Rights means patents, trade marks, copyrights, database rights, rights in designs, and all or any other intellectual or industrial property rights, whether or not registered or capable of registration.

 

Inventor means the inventor or inventors named in the Applications and identified in Schedule 2.

 

Inventor Improvements means any Improvements to Application 1 or Application 2 made prior to [***] solely by the Inventor, and the Intellectual Property Rights pertaining to them, of which OUI has been made aware and is legally able to license but shall not include, for the avoidance of doubt, any Improvements and Intellectual Property Rights developed pursuant to any employment or consultancy arrangements with Licensee or its Affiliates.

 

Legal Action means commencing or defending any proceedings before a court or tribunal in any jurisdiction in relation to any rights included in the Licensed Technology including all claims and counterclaims for infringement and for declarations of non-infringement or invalidity.

 

Licence means the licence granted by OUI to the Licensee under clause 2.1.

 

Licensed Intellectual Property Rights means the Applications and (to the extent they constitute Intellectual Property Rights) the Inventor’s Improvements.

 

Licensed Know-how means all confidential information relating to an Application that has been communicated to the Licensee by OUI in writing before the date of this agreement or is communicated in writing to the Licensee by OUI under this agreement and within [***] after the date of this agreement and (to the extent they constitute confidential information) OUI’s Improvements.

 

Licensed Product means any product, process, service or composition which is entirely or partially produced by means of or with the use of, or within the scope of, the Licensed Technology, or any of it.

 

Licensed Technology means the Licensed Intellectual Property Rights and the Licensed Know-How, and such (if any) other Intellectual Property Rights owned by or licensed to OUI as may be specifically identified in Schedule 2 (to the extent, in the case of licensed rights, that OUI is legally able to grant a sub-licence of the same).

 

Licensee’s Contact and Address means the address for the Licensee set out in Schedule 2 of this agreement.

 

Licensee Improvements means any Improvements made prior to the second anniversary of the date of this agreement by the Licensee, and the Intellectual Property Rights pertaining to them, which shall include, for the avoidance of doubt, any Improvements and Intellectual Property Rights developed by an Inventor pursuant to research collaboration arrangement with the Licensee.

 

Licence Year means each [***] period beginning on the date of this agreement and each anniversary of the date of this agreement.

 

Market means, in relation to a Licensed Product, offering to sell, lease, licence or otherwise commercially exploit the Licensed Product or the sale, lease, licence or other commercial exploitation of the Licensed Product.

 

 

Medicines Access Policy means the policy of the University to promote access to pharmaceutical and other products and services, the current version of which is available at www.admin.ox.ac.uk/researchsupport/integrity/access.

 

Milestone and Milestone Fee means the milestones, and the amounts payable on achievement of each of the milestones, set out in Schedule 2.

 

Minimum Sum means the minimum sum or sums set out in Schedule 2.

 

Net Sales means the gross selling price of the Licensed Product in the form in which it is Marketed by the Licensee or any sub-licensee, less:

 

	(a)	trade, and/or quantity discounts, returns, allowances, in amounts customary in the trade and actually given; and
	(b)	import, export, excise, sales or use taxes, value added taxes and other taxes, tariffs or duties to the extent such items are included in the gross invoice price and actually paid; and
	(c)	freight, handling, transportation and insurance prepaid or allowed if separately identified in such invoice and actually paid; and
	(d)	amounts allowed or credited or retroactive price reductions or rebates and actually given/paid.

 

Any refund of any of the foregoing amounts previously deducted from Net Sales shall be appropriately credited upon receipt.

 

The Licensee may, at its option, allocate the above deductions from sales of Licensed Products based upon accruals estimated reasonably and consistently with the Licensee’s standard business practices. If the Licensee elects to utilise such accruals, actual deductions will be calculated and, if applicable, a “true-up” made, on an annual basis.

 

A transfer of a Licensed Product from Licensee to an Affiliate or from a sub-licensee to an Affiliate of a sub-licensee shall not be deemed to be a sale hereunder, provided that If a sale of a Licensed Product is to an Affiliate of the Licensee or of the sub-licensee and such Affiliate is the end user of the Licensed Product, then the “gross selling price” with respect to such sale shall, for the purposes of calculating “Net Sales” be the greater of (a) the actual amount invoiced and (b) the amount which the invoiced amount would have been had such sale of the Licensed Product been to a person at arm’s length of the Licensee or sub-licensee.

 

Non-Commercial Use means Academic and Research Purposes and the purposes of Clinical Patient Care. This includes the right for the University to license the Licensed Technology to any of its collaborators in connection with and solely for the University’s Academic and Research Purposes; but it does not include the right to commercially exploit the Licensed Technology or grant any license to commercially exploit the Licensed Technology.

 

Marketing Authorisation means a marketing authorization granted by a regulatory authority such as the Food and Drug Administration or European Medicines Agency necessary to Market a Licensed Product in a given country.

 

Past Patent Costs means the past patent costs set out in Schedule 2.

 

Project means the projects referred to in BACKGROUND.

 

Quarter means each period of three calendar months during a Licence Year with the first Quarter commencing on the first day of each Licence Year.

 

Royalty Rate means the royalty rate or rates set out in Schedule 2 on Net Sales of Licensed Products for, as applicable, Hepatitis B therapy and/or Human Papilloma Virus associated diseases.

 

Royalty Report means the report to be prepared by the Licensee under clause 10.2.

 

 

Signing Fee means the signing fee set out in Schedule 2.

 

Territory means the territory or territories set out in Schedule 2, excluding any territory or territories removed through the operation of clause 5.5.

 

University means the Chancellor, Masters and Scholars of the University of Oxford whose administrative offices are at the University Offices, Wellington Square, Oxford OX1 2JD.

 

Valid Claim means a granted or currently pending patent claim included in the Licensed Intellectual Property Rights that has not expired nor been held permanently revoked, unpatentable, invalid or unenforceable by a court or tribunal of competent jurisdiction in a final and non-appealable judgment; nor been rendered unenforceable through disclaimer or otherwise abandoned.

 

Schedule 2

 

Application 1:		UK Patent Application number [***];
Application 2:		UK Patent Application number [***];
Application 3:		European patent application number [***]; and
Application 4:		International patent application number [***].
Application 5:		International patent application number [***]

 

Inventor:		Application 1:   [***]
		Application 2:   [***]
		Application 3:   [***]
		Application 4:   [***]
		Application 5:   [***]

 

Territory (clause 2.1):		Worldwide
Past Patent Costs (clause 5.1):		[***]
Signing Fee (clause 8.1):		[***]
Royalty Rate (clause 8.2):
		[***] Net Sales on Licensed Products for Hepatitis B therapy
		[***] Net Sales on any Licensed Products for CIN1/2+ (CIN1, CIN2 & CIN3), AIN & HPV pre-cancerous neoplasias
		[***] Net Sales on any Licensed Products for HPV-related cancers

Minimum Sum (clause 8.4):

 

		Licence Year	Minimum Sum
		4	[***]
		5	[***]
		6 and each year thereafter	[***]

 

Fee Income Royalty Rate (clause 8.6):

 

[***] where the sublicensing or partnering arrangement takes place during the first three Licence Years

 

[***] where the sublicensing or partnering arrangement takes place after the third Licence Year

 

Milestone and Milestone Fee (clause):

 

Licensed Product for Hepatitis B therapy:

 

Milestone	Milestone Fee
Successful completion of phase II trial	[***]
Initiation of phase III trial	[***]
Marketing authorisation & pricing & reimbursement approval in first major territory	[***]
Marketing authorisation & pricing & reimbursement approval in second major territory	[***]
First calendar year in which annual Net Sales of Licensed Product exceed [***]	[***]

 

 

Licensed Product for Human Papilloma Virus associated diseases:

 

Milestone	Milestone Fee
Successful completion of first phase II trial for CIN	[***]
Initiation of first phase III trial for CIN	[***]
Initiation of first phase III trial for cancer	[***]
First marketing authorisation & pricing & reimbursement approval for CIN	[***]
First marketing authorisation & pricing & reimbursement approval for cancer	[***]
First calendar year in which annual Net Sales of Licensed Product for any HPV associated diseases exceed [***]	[***]

 

For the purposes of these Milestones:

 

“Successful completion” of trials means the trial meets its primary endpoints and that the results justify commercial and scientific progression to the next stage of trial.

 

“Initiation” of new trials means the first administration of the trial drug in the first study subject recruited in accordance with the approved study protocol.

 

Licensee’s Contact and Address (clause 13.6):

 

		Contact	Dr Tom Evans
		Address	Oxford Sciences Innovation King Charles House, Park End Street, Oxford, 0X11JD
		Email	[***]

 

 

Schedule 3

 

DEVELOPMENT PLAN

 

[***]

 

[***]

 

 

Schedule 4

 

DOCUMENTS

 

[***]

 

[***]

 

 

Schedule 5

 

DEED OF COVENANT

 

Oxford University Innovation Limited
University Offices,
Wellington Square,
Oxford 0X1 2JD,
England

 

Date: [insert date]

 

Dear Sirs,

 

Sub-Licence between Vaccitech Limited (“Vaccitech”) and [insert details of Sub-Licensee] dated [insert date] (the “Sub-Licence”)

 

As part consideration for the grant of a sub-licence from Vaccitech to use [insert details of licensed technology] (the “Licensed Technology”), the Sub-Licensee hereby covenant to Oxford University Innovation Limited (OUI) and OUI covenant with the Sub-Licensee that:

 

1.

should the head licence between Vaccitech and OUI be terminated for whatever reason, OUI and the Sub-Licensee shall enter into a direct licence containing the same obligations and liabilities as set forth in the Sub-Licence and the Sub-Licensee will pay all due and payable under the Sub-Licence to OUI;

 

2.

should the Sub-Licensee wish to further sub-licence the Licensed Technology where OUI has consented to the Sub-Licence including the right to do so, it shall procure that any sub-sub-licensee enters into a Deed of Covenant with OUI in a form substantially similar to this Deed of Covenant;

 

3.

OUI shall have the right, during the term of the Sub-Licence, through an independent certified accountant appointed by OUI (the “Auditor”), to audit all accounts on at least [***] written notice no more than once each calendar year for the purpose of determining the accuracy of the royalty reports and payments. The Auditor shall be:

 

a.

permitted to enter the principal place of business of the Sub-Licensee upon reasonable notice to inspect such records and accounts;

 

b.

entitled to take copies of or extracts from such records and accounts;

 

c.

given all other information by the Sub-Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

d.

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Sub-Licensee in order to verify the accuracy of the records and accounts and the accuracy of any royalty statements provided to Vaccitech.

 

If on any such audit a shortfall in payments of greater than [***] is discovered by the Auditor in respect of the audit period, the Sub-Licensee shall pay the audit costs of OUI.

 

 

SIGNED AS A DEED by
[Insert details of Sub-Licensee] in the presence of:-

 

Signature of Witness:

 

Name of Witness:
Address:

 

SIGNED AS A DEED by
OXFORD UNIVERSITY INNOVATION LIMITED in the presence of:-

 

Signature of Witness:

 

Name of Witness:
Address:

 

 

AS WITNESS this agreement has been signed by the duly authorised representatives of the parties.

 

SIGNED for and on behalf of OXFORD UNIVERSITY INNOVATION LIMITED:			SIGNED for and on behalf of VACCITECH LIMITED
Name:	DR. PAUL ASHLEY HEAD OF TECHNOLOGY TRANSFER LIFE SCIENCES		Name: Tom Evans, MD
Position:	oxford university innovation LTD		Position: CEO
Signature:	/s/ Paul Ashley		Signature:	/s/ Tom Evans
Date: 9 August 2017			Date: 7 September 2017

 

 

Exhibit 10.5

 

EXECUTION VERSION

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

Master Collaboration
Agreement

 

Dated 4 September 2018

 

Vaccitech Limited (“Vaccitech")
CanSino Biologies Inc. ("CanSino")

 

King & Wood Mallesons
Octagon Point, 4^th Floor
St. Martins Court
5 Cheapside
London EC2V 6AA
UK
T +44 20 3823 2405
www.kwm.com

 

 

Master Collaboration Agreement
Contents

 

Details		1
General terms		2
1	Definitions and interpretation	2
1.1	Definitions	2
1.2	General interpretation	4
2	Commencement and term	5
2.1	Master Collaboration Agreement	5
2.2	Project Agreements	5
3	Projects	5
3.1	Project Agreements	5
3.2	Conditions precedent	5
3.3	Conflict	6
4	Governance Framework	6
4.1	Party's commitments	6
4.2	No obligation	6
4.3	Relationship of parties	6
4.4	No restriction on other business	7
5	Performance of Projects	7
5.1	Performance of Projects	7
5.2	Data sharing	8
5.3	Risk to Product development	8
5.4	Research misconduct	8
5.5	Outcomes	8
5.6	Exclusivity	8
6	Materials	9
6.1	Materials	9
6.2	CanSino Material	9
7	Project Managers and Project Committees	10
7.1	Project Manager	10
7.2	Function of Project Manager	10
7.3	Project Committee	10
7.4	Function of Project Committee	10
7.5	Project Committee Voting and decisions	11
8	Project meetings	11
8.1	Project meetings	11
8.2	Project meeting requirements	11
8.3	Decisions of the Project Committee outside of Project meetings	12
9	Project reports	12
9.1	Progress reports	12
9.2	Final and milestone completion reports	12

 

 

10	Joint Steering Committee	12
10.1	Establishment	12
10.2	Function	13
10.3	Composition	13
10.4	Voting and decisions	13
10.5	Chairperson	13
10.6	JSC meeting requirements	14
10.7	Decisions of the JSC outside of JSC meetings	14
11	Personnel	15
11.1	Personnel	15
11.2	Subcontractors	15
12	Records and inspection	15
12.1	Records	15
12.2	Record retention	16
12.3	Inspection	16
13	Access to premises	17
13.1	Access to a Partner's premises	17
13.2	Comply with a party's policies	17
13.3	Minimal disruption	17
14	Intellectual Property Rights	17
14.1	Product Intellectual Property Rights	17
14.2	Background IPR	17
14.3	Improvements	18
14.4	New IPR	18
14.5	Third party Intellectual Property Rights	18
14.6	Registration	18
14.7	Infringement	19
14.8	Further efforts	19
15	Exploitation	19
15.1	Background IPR	19
15.2	New IPR and Products	19
15.3	Pursue exploitation	20
15.4	Regulatory authorities	20
15.5	Patent markings	20
16	Financial obligations	20
16.1	Milestone payments	20
16.2	Royalties	20
16.3	Royalty reports	21
16.4	Invoices	21
16.5	Payment	21
16.6	Currency	21
16.7	Taxes	21
16.8	Interest	22
16.9	Additional information	22

 

 

17	Termination	22
17.1	Termination	22
17.2	Automatic termination	23
17.3	Consequences of termination	23
18	Confidentiality	24
18.1	Treatment of Confidential Information	24
18.2	Use of Confidential Information	24
18.3	Disclosure of Confidential Information	24
18.4	Disclosure by Recipient	25
18.5	Protecting Confidential Information	25
18.6	Return or destruction of Confidential Information	25
18.7	Exceptions	25
18.8	Publicity	25
18.9	OUI	26
19	Data protection	26
19.1	Definitions	26
19.2	Shared Personal Data	26
19.3	Compliance with Data Protection Legislation	26
19.4	Obligations	27
19.5	Mutual assistance	27
20	Publication	28
21	Representations and warranties	28
21.1	Representations and warranties	28
21.2	Exclusions	29
22	Liability	29
22.1	Indirect and consequential damages	29
22.2	Limitation of liability	29
22.3	Exclusions from limitation of liability	29
22.4	Insurance	30
22.5	Severability	30
23	Indemnity	30
23.1	Indemnity	30
23.2	Terms of indemnification	30
24	Anti-bribery	31
25	Disputes	31
25.1	Compliance with this clause	31
25.2	Dispute resolution process	32
25.3	Arbitration	32

 

 

26	Notices and other communications	32
26.1	Form	32
26.2	When effective	33
26.3	When taken to be received	33
26.4	Receipt outside business hours	33
27	Force majeure	33
27.1	Force majeure event	33
27.2	Termination	33
28	General	34
28.1	Entire agreement	34
28.2	Costs	34
28.3	Variation and waiver	34
28.4	Severability	34
28.5	Further steps	34
28.6	Assignment	34
28.7	Discretion in exercising rights	34
28.8	Partial exercise of rights	35
28.9	Approvals and consents	35
28.10	Remedies cumulative	35
28.11	Third party rights	35
28.12	Counterparts	35
28.13	Governing law and jurisdiction	35

 

Schedule 1	Project Agreement	36
Schedule 2	Deed of Covenant	9
Signing page		10

 

 

 

Master Collaboration Agreement

 

Details

 

Parties
Vaccitech	Name	Vaccitech Limited
	Company number	09973585
	Formed in	England
	Address	Magdalen Centre, 1 Robert Robinson Avenue, The Oxford Science Park, Oxford OX4 4GA England
	Telephone	[***]
	Email	[***]
	Attention	[***]
CanSino	Name	CanSino Biologics Inc.
	Company number	91120116681888972M
	Formed in	China
	Address	185 South Avenue, TEDA West District, Tianjin 300457 China
	Telephone	[***]
	Email	[***]
	Attention	[***]
Recitals	A	Vaccitech is an Oxford-based biopharmaceutical company which holds certain intellectual property rights relating to a platform technology, which it is developing for several therapeutic and prophylactic indications in humans and animals.
	B	CanSino is a Tianjin-based biotechnology company dedicated to the R&D manufacturing and commercialisation of vaccine products for human use.
	C	Vaccitech and CanSino may wish from time to time to undertake projects to collaborate on the research, development, manufacture and sale of certain products.
	D	Vaccitech and CanSino intend to each contribute expertise, intellectual property, know-how and resources with respect to any such projects subject to, and on, the terms and conditions of this Agreement.
	E	Vaccitech and CanSino intend that where CanSino is acting purely as a manufacturer for a product that is not being developed or commercialised as a project pursuant to this Agreement, this manufacturing will be arranged under a separate manufacturing agreement between the parties

 

 

Master Collaboration Agreement

 

General terms

 

1

Definitions and interpretation

 

1.1

Definitions

 

In this agreement, unless the contrary intention appears, the following words and phrases have the following meanings

 

Affiliate means in relation to a party, a subsidiary or holding company of that party, and any subsidiary of a holding company of that party.

 

Background IPR means any Intellectual Property Rights (other than New IPR) owned by, licensed to or otherwise controlled by a party:

 

(a)

before the start date of a Project Agreement, or

 

(b)

created after the start date of a Project Agreement solely by such party without any use of the other party's Background IPR, New IPR or other Confidential Information.

 

which is used in connection with a Project.

 

Business Day means a day on which banks are open for general banking business in England and China (not being a Saturday Sunday, or public holiday in that country or in the city in which the relevant party is located as set out in the Details).

 

CanSino Territory means China (including Taiwan, Hong Kong and Macao), Malaysia, Thailand Myanmar, Indonesia, Lao, Vietnam, and the Philippines.

 

Confidential Information means the existence and nature of this agreement, and all information (regardless of how the information is stored or delivered):

 

(a)

designated by a party, either orally or in writing, as confidential to that party or to a third party to whom that party owes an obligation of confidentiality;

 

(b)

disclosed or made available by a party which relates to that party's business, financial affairs, systems, products developments, trade secrets, know-how, Personnel, customers, clients and suppliers;

 

(c)

which given the circumstances of disclosure, would reasonably be regarded as confidential information of the party disclosing it or imparting a duty of confidence on the part of the recipient; and

 

(d)

derived or produced partly or wholly from information set out in paragraphs (a) to (c) above,

 

whether that information is

 

(d)

directly or indirectly disclosed or made available by or on behalf of a party to the other party, or

 

(e)

obtained or discovered by that other party in the course of performing their obligations under this agreement, before, on <x after the date of this agreement,

 

 

Good Industry Practice means in relation to any activity and under any circumstance, exercising the same skill, expertise and judgement and using facilities and resources of a similar or superior quality as would be expected from a person who is highly skilled and experienced in providing the services in question, seeking in good faith to comply with their regulatory and contractual obligations and seeking to avoid liability arising under any duty of care that might reasonably apply.

 

Improvements has the meaning set out in clause 14 3.

 

Intellectual Property Rights means any patents, trade marks, designs or applications for them, inventions, copyright, circuit layout rights, rights in and to trade or business names, trade secrets, know-how or confidential information, including any similar or analogous rights or forms of protection in any part of the world.

 

Joint Steering Committee and JSC have the meaning set out in clause 10.1 (Joint Steering Committee).

 

Materials means all compounds, fragments, proteins, viruses, DNA, RNA, biologic reagents, substances solutions and any other chemical or biological substance and any fragments, derivatives and progeny thereof, and any know- how associated with any such items

 

New IPR has the meaning set out in clause 14.4.

 

Net Sales means arm's length bona fide commercial Sales of Products and related services invoiced less the following deductions.

 

(a)

trade, and quality discounts returns, and allowances, in amounts customary in the trade and actually given;

 

(b)

import, export, excise, sales or use taxes, value added taxes and other taxes, tariffs or duties, to the extent these items are included in the gross invoice price and actually paid;

 

(c)

freight, handling, transportation and insurance costs prepaid or allowed if separately identified in an invoice and actually paid; and

 

(d)

amounts allowed or credited, or retroactive price reductions or rebates, and actually given or paid.

 

in the relevant country in which the Sale takes place. In relation to Sales which are not made in an arm's length, bona fide commercial manner, Net Sales shall be calculated by reference to the fair market price (if higher) of the relevant Product in the country in which the Sale takes place.

 

OUI means Oxford University Innovation Limited (formerly Isis Innovation Limited).

 

OUI Licence of Technology means the relevant Vaccitech Licence of Technology with OUI dated either 4 March 2016 or 8^th September 2017.

 

Personnel means the employees, agents, officers, directors, auditors, advisors, authorised representatives or subcontractors of a party.

 

Product means a product developed pursuant to a Project Agreement using New IPR and potentially also incorporating Background IPR

 

Project means a project for the research, development manufacture and sale of Products as set out in a Project Agreement.

 

 

Project Agreement means the written agreement between Vaccitech and CanSino in substantially the same format as set out in Schedule 1 (Project Agreement).

 

Project Committee has the meaning set out in clause 7.3 (Project Committee).

 

Regulatory Requirements means in relation to any undertaking and any circumstance, all laws, statutes and statutory instruments regulations, by-laws, guidelines codes of practice and standards determined by any governmental or regulatory authority, or judgements of a competent court of law or applicable rules of stock exchange which apply or may apply to that undertaking or to that circumstance from time to time.

 

Royalty Period [***]

 

Sale or Sell or Sold means, in relation to Products, to sell, distribute, license, supply commercially or otherwise dispose of or provide Products. Sales are deemed to have occurred at the earlier of the time when Products are delivered, title passes, or the recipient is invoiced or pays.

 

Term means 10 years from the date of this agreement.

 

Territory means in relation to a party either CanSino Territory or Vaccitech Territory, as relevant.

 

Vaccitech Territory means the rest of the world other than the CanSino Territory.

 

1.2

General interpretation

 

Headings are for convenience only and do not affect interpretation. Unless the contrary intention appears in this agreement:

 

(a)

labels used for definitions are for convenience only and do not affect interpretation;

 

(b)

the singular includes the plural and vice versa;

 

(c)

a reference to a document includes any agreement or other legally enforceable arrangement created by it (whether the document is in the form of an agreement, deed or otherwise);

 

(d)

a reference to a document also includes any variation, replacement or novation of it;

 

(e)

the meaning of general words is not limited by specific examples introduced by "including", "for example", "such as" or similar expressions;

 

(f)

a reference to "person" includes an individual, a body corporate, a partnership, a joint venture, an unincorporated association and an authority or any other entity or organisation;

 

(g)

a reference to a particular person includes the person's executors, administrators, successors, substitutes (including persons taking by novation) and assigns;

 

(h)

a reference to "law" includes common law, principles of equity and legislation (including regulations);

 

(i)

a reference to any legislation includes regulations under it and any consolidations, amendments, re-enactments or replacements of any of them;

 

(j)

a reference to "regulations" includes instruments of a legislative character under legislation (such as regulations, rules by-laws, ordinances and proclamations);

 

 

(k)

a reference to any thing (including an amount) is a reference to the whole and each part of it;

 

(l)

if a party must do something under this document on or by a given day and It is done after 5.00pm local time on that day, it is taken to be done on the next day; and

 

(m)

if the day on which a party must do something under this document is not a Business Day, the party must do it on the next Business Day unless the timing of the obligation is specified by Regulatory Requirements in which case the party must do it on the preceding Business Day.

 

2

Commencement and term

 

2.1

Master Collaboration Agreement

 

(a)

Subject to clause 2.1(b) and clause 17 (Termination), this agreement commences on the date this agreement is signed by both parties and continues until the expiry of the Term.

 

(b)

At least [***] before the expiry of the Term, either party may give written notice to the other party expressing the desire to extend the Term and the parties may agree to extend the Term as a written variation to this agreement signed by both parties.

 

2.2

Project Agreements

 

Subject to clause 17 (Termination), each Project Agreement commences on the start date set out in that Project Agreement and terminates upon the expiry of that Project Agreement.

 

3

Projects

 

3.1

Project Agreements

 

From time to time during the Term, the parties may discuss the potential for collaboration relating to one or more programs If the parties wish to undertake a Project, the parties shall use reasonable endeavours to complete and execute an agreement in the form of a Project Agreement. The parties shall use reasonable endeavours to agree and execute a Project Agreement for each proposed Project. Each Project Agreement incorporates the terms of this agreement by reference.

 

3.2

Conditions precedent

 

The obligations of the parties to undertake and complete each Project are conditional upon the satisfaction of the following conditions as soon as possible after the execution by the parties of a Project Agreement for that Project:

 

(a)

Vaccitech having obtained from OUI all consents required under the relevant OUI Licence of Technology for Vaccitech to undertake the Project with CanSino, and

 

(b)

CanSino entering into a Deed of Covenant with OUI in relation to the Project in substantially the same format as set out in Schedule 2 (Deed of Covenant).

 

(together, Conditions). Each party shall use reasonable endeavours to obtain and maintain the satisfaction of the Conditions. If the Conditions have not been satisfied within [***] of the date of execution by the parties of a Project Agreement for that Project, the Project Agreement shall be terminated automatically and Vaccitech shall confirm the termination by notice in writing to CanSino.

 

 

3.3

Conflict

 

In the event of a conflict between the terms of

 

(a)

this agreement;

 

(b)

a Schedule to this agreement; and

 

(c)

a Project Agreement;

 

the terms of the document lower in the list prevail unless specified in a writing by both parties.

 

4

Governance Framework

 

4.1

Party's commitments

 

Each party agrees and undertakes:

 

(a)

to cooperate with the other party to undertake each Project;

 

(b)

to the extent permitted by law, to promptly notify the other party;

 

(i)

of any material legal, governance, policy, quality, regulatory or reputational issue arising in respect of this agreement or a Project Agreement (including any Product);

 

(ii)

of any legal or regulatory issues (including any correspondence or interaction with a relevant regulator) that would have a material adverse impact on this agreement or a Project Agreement (including any Product);

 

(c)

not to delay unreasonably any action, approval, direction, determination or decision required of it under this agreement or a Project Agreement; and

 

(d)

to act reasonably and in good faith in the performance of its obligations and the exercise of its rights under this agreement or a Project Agreement.

 

4.2

No obligation

 

Despite any other provision in this agreement or a Project Agreement to the contrary, a party is not obliged to do or omit to do anything if it would, or might in its absolute opinion, constitute a breach of any law.

 

4.3

Relationship of parties

 

(a)

Nothing contained or implied in this agreement or a Project Agreement constitutes a party the partner, agent or legal representative of another party for any purpose or creates any partnership, agency or trust.

 

(b)

A party has no authority to bind the other party, or to act for, or to incur any obligation or assume any responsibility on behalf of, the other party.

 

(c)

Each party is responsible for its own obligations arising under this Agreement and any Project Agreement and is not liable for any other party's obligations.

 

(d)

Each party's liability under this agreement or a Project Agreement is several and not joint and several.

 

 

4.4

No restriction on other business

 

Except as provided for under this agreement (including clause 5.6 (Exclusivity)) or in any Project Agreement, nothing contained or implied in this agreement or in any Project Agreement restricts m any way the freedom of a party to conduct as it sees fit any other business or activities (including any arrangements with any third party), which may be undertaken without any accountability to the other party.

 

5

Performance of Projects

 

5.1

Performance of Projects

 

In respect of each Project, each party agrees that it shall:

 

(a)

use its reasonable endeavours to complete all activities designated to it for a Project in accordance with the relevant Project Agreement;

 

(b)

perform the Project in accordance with Good Industry Practice, in a good scientific manner, and in accordance with all Regulatory Requirements If the parties cannot agree on the appropriate regulatory requirements and standards, they shall seek advice from the appropriate regulator;

 

(c)

perform the Project in accordance with all applicable ICH GxP standards, regulatory authorisations and approvals, and ethics approvals, and all generally accepted professional, clinical and research standards of care;

 

(d)

subject to the compliance with applicable laws, perform the Project in a manner as to enable the transfer between and submission of data and information to the regulatory jurisdictions of the United Kingdom, the European Union, China and the United States of America;

 

(e)

perform the Project in a manner which will not damage the name, business, reputation or goodwill of the other party;

 

(f)

at its own cost (except where expressly provided otherwise in this agreement or a Project Agreement), apply all time, attention, resources, trained personnel and skill as may be reasonably necessary for the due and proper performance of the Project. Without limitation to the foregoing, each party shall provide all laboratories, computers and other equipment and resources reasonably required to perform the Project;

 

(g)

hold and maintain all necessary licences, permits and consents necessary for it to perform the Project; and

 

(h)

ensure that any animals involved in any part of the Project shall be provided with humane care and treatment in accordance with generally accepted veterinary practice and research ethics.

 

 

5.2

Data sharing

 

Unless specified in a Project Agreement or otherwise agreed by the parties, and subject to compliance with applicable laws, each party shall disclose promptly to the other party all data (including pharmacovigilance and the reporting of any serious adverse events) produced by or on its behalf pursuant to a Project Agreement in a prompt and timely manner. Both parties may use that data for submissions for regulatory approval within their respective Territories. For the avoidance of doubt, if:

 

(a)

a party assigns or licenses its rights in relation to a Product to an unrelated third party in accordance with this agreement or the applicable Project Agreement and that third party is not acting on behalf of that party; or

 

(b)

a party undergoes a change of control,

 

the scope of obligations regarding data sharing under this clause 5.2 shall be limited to the sharing of only that data as is reasonably necessary for development and commercialisation of a Product which shall be negotiated and agreed by the parties at the time acting in good faith and shall be subject to the approval of:

 

(c)

m relation to the circumstances set out in paragraph (a), the unrelated third party, or

 

(d)

in relation to the circumstances set out in paragraph (b), the third party that acquires control of that party.

 

5.3

Risk to Product development

 

Either party shall have the right to terminate any Project activity that it is undertaking, directly or indirectly, in its Territory that it might reasonably deem to risk damage to the development of any Products or the safety of any person If a party terminates any Project activity, it shall immediately give written notice to the other party of the termination and grounds therefore and if after receipt of that notice, the other party continues that activity in that other party's Territory:

 

(a)

the notifying Party is excluded from all liability for any claims related to the other Party's continued activity; and

 

(b)

the other Party indemnifies the notifying Party in respect of claims related to the other Party's continued activity.

 

The limitations set out in clauses 22.1 and 22.2 (Liability) do not apply to this clause 5.3.

 

5.4

Research misconduct

 

Each party will make and maintain arrangements for investigating and resolving allegations of research misconduct and inform the other party of any investigation undertaken or intended to be undertaken in connection with a Project Each part/ shall provide reasonable assistance with any investigation conducted by the other party into any alleged research misconduct.

 

5.5

Outcomes

 

Although the parties shall carry out each Project in accordance with their respective obligations under this agreement and the relevant Project Agreement and using all reasonable endeavours to achieve the objectives of the relevant Project, the parties acknowledge and agree that neither party undertakes, represents or warrants that a Project will lead to any particular conclusion and nor does it guarantee a successful outcome to a Project.

 

5.6

Exclusivity

 

During the term of a Project Agreement and for three months following the expiry or earlier termination of that Project Agreement, a party shall not enter into discussions, collaboration or similar arrangement with any third party regarding matters or products which are materially the same as those set out in that Project Agreement or related to the Project which is the subject of that Project Agreement (Arrangement) unless the party reasonably believes that the Arrangement is unlikely to prejudice or detrimentally affect the relevant Project or Project Agreement.

 

 

6

Materials

 

6.1

Materials

 

(a)

Subject to clause 6.1(b), each party shall provide to the other party all Materials specified m a Project Agreement and shall grant to the other party a non-exclusive, non-transferable, non-sub-licensable royalty-free licence to use the Materials solely for the purposes of the Project for the duration of the term of the Project Agreement for that Project.

 

(b)

The parties acknowledge that Materials are made available for investigational use only for the purposes of a Project. Unless specified in a Project Agreement or otherwise agreed by the parties, a party shall not without the prior written consent of the other party use the other party's Materials:

 

(i)

for the production or sale of any products or for commercial purposes;

 

(ii)

for testing or evaluation on or in human beings;

 

(iii)

to fulfil commercial licensing or contracted research obligations for another organization; or

 

(iv)

in any way which is inconsistent with or which is expressly prohibited in a Project Agreement.

 

(c)

Each party shall comply with any Regulator/ Requirements and any written instructions issued by the other party with respect to the storage, handling, transportation, use and disposal of the other party's Materials. The other party shall keep the Materials in a secure environment, protected against theft, damage, loss misuse and unauthorised access and in compliance with any security or storage requirements specified in the relevant Project Agreement.

 

(d)

Each party shall promptly provide to the other party complete copies of any and all communications with any regulatory or other governmental authority relating to the Materials provided to it by the other party.

 

(e)

Unless otherwise agreed by the parties, at the end of the term of the relevant Project Agreement, each party shall return to the other party, or at the other party's direction destroy, all remaining Materials of the other party and shall certify in writing that the same has been done.

 

(f)

Each party acknowledges that the other party's Materials are supplied on an "as is" basis. To the maximum extent permitted at law, all representations, undertakings, warranties, terms and conditions that might but for this clause 6.1(f) have been implied or incorporated into this agreement with respect to the Materials, whether by statute, common law or otherwise, are expressly excluded (including any implied terms that the Materials are of satisfactory quality or fit for purpose).

 

6.2

CanSino Material

 

(a)

Unless specified in a Project Agreement or otherwise agreed by the parties, CanSino shall have the exclusive and sub-licensable right and responsibility (subject to terms and conditions mutually acceptable to the parties) to manufacture and supply all Master Virus Seed (MVS) and Good Manufacturing Practice (GMP) adenoviral material necessary for the development and Sale of any Products (CanSino Material) by either party in any part of either party's Territory to non-GMP and/or GMP standards (as required for the specified use of the CanSino Material at the time).

 

 

 

(b)

If reasonably requested by Vaccitech, CanSino shall enter into appropriate agreements to supply the CanSino Material to third parties (including sublicensees of Vaccitech) on the same terms of supply that CanSino shall supply the CanSino Materials to Vaccitech as set out in clause 6.2(c)

 

(c)

CanSino shall supply any CanSino Material to be used by Vaccitech for the manufacture of Products to be Sold by Vaccitech (or its sublicensees) in the Vaccitech Territory at pricing of [***] over Cost of Goods Sold (COGS) where COGS is equal to reasonable COGS for equivalent material to the CanSino Material manufactured by CanSino or its subcontractors for Sale by CanSino (or its sublicensees) in the CanSino Territory.

 

7

Project Managers and Project Committees

 

7.1

Project Manager

 

Each party shall appoint one Project manager for each Project (Project Manager) to assume responsibility as set forth in clause 7.2 for that party's roles and obligations under the Project Agreement for that Project Each party:

 

(a)

shall notify the other party in writing of the identity of the Project Manager it has appointed;

 

(b)

may change its Project Manager from time to time, and shall notify the other party of that change in writing; and

 

(c)

shall ensure that any Project Manager is adequately qualified for the role and informed about this agreement and the applicable Project Agreement.

 

7.2

Function of Project Manager

 

In relation to each Project, each party's Project Manager for that Project shall

 

(a)

co-ordinate all of that party's development work and other activities on that Project including facilitating and reporting the performance of that work;

 

(b)

arrange and attend, at each party's own cost, Project meetings as described in clause 8 (Project meetings) and other meetings, at intervals and locations as agreed between the parties from time to time, to discuss developments and resolve any issues. The Project Managers shall use all reasonable endeavours to resolve issues arising under the relevant Project Agreement but shall refer all problems which are outside their ordinary authority to appropriate members of the parties' senior management to resolve, and

 

(c)

prepare and agree regular reports in English.

 

7.3

Project Committee

 

The parties shall establish a committee for the purposes of implementing each Project Agreement (Project Committee) which shall be composed of each party's Project Manager for that Project Each party shall ensure that its Project Manager has sufficient authority to make the decisions required of the Project Committee to implement the function set out in clause 7.4.

 

7.4

Function of Project Committee

 

Without limiting clause 4.1 (Party's commitments), the implementation of each Project Agreement will be under the direction of the Project Committee for that Project The Project Committee shall consider and decide all things reasonably required in relation to its Project including:

 

 

(a)

having general oversight of for all activities performed under the Project Agreement including discussing the progress and status of the Project;

 

(b)

considering, preparing and finalising detailed development and action plans;

 

(c)

preparing and submitting comprehensive progress reports to the JSC under clause 9 (Project reports); and

 

(d)

determining any other matter required to be determined by the Project Committee under this agreement.

 

For the avoidance of doubt, the Project Committee shall have no authority to amend this agreement or any Project Agreement.

 

7.5

Project Committee Voting and decisions

 

(a)

Each party has one vote for each decision made by the Project Committee.

 

(b)

All decisions of the Project Committee require unanimous approval of both parties. If the matters cannot be approved by unanimous vote, it shall be dealt with in accordance with clause 25.2 (Dispute resolution process).

 

(c)

The Project Committee shall jointly record the details of all decisions made.

 

(d)

Each party agrees to give effect to decisions made by the Project Committee.

 

8

Project meetings

 

8.1

Project meetings

 

The parties shall arrange (and attend at their own cost) meetings to discuss and review the progress and status of any Project, and consider proposals and agree actions in relation to that Project with a view to ensuring the due and proper completion of all Projects in accordance with the Project Agreement for that Project.

 

8.2

Project meeting requirements

 

(a)

Attendees and frequency: The Project Committee together with any other representatives of each party shall meet as per the Project Agreement, or as otherwise agreed by the Project Committee.

 

(b)

Location: Project meetings shall be held in a location as determined by the Project Committee, or by teleconference

 

(c)

Technology: A Project meeting may be held at two or more venues using any technology that gives the Project Committee and other duly authorised representatives of each party a reasonable opportunity to participate.

 

(d)

Notice: Unless otherwise agreed by the Project Committee, each Project Manager shall receive at least 5 Business Days' notice of each Project meeting. The notice shall include a draft agenda for comment, and shall be sent to other Project Manager by the coordinating Project Manager selected at the previous meeting

 

(e)

Coordinating Project Manager: Each Project meeting shall be led by a coordinating Project Manager appointed as agreed by the Project Committee.

 

 

(f)

Papers: Unless otherwise agreed by the Project Committee papers for each Project meeting shall be circulated by the coordinating Project Manager selected at the previous meeting at least 5 Business Days prior to a Project meeting

 

(g)

Minutes: The coordinating Project Manager shall arrange preparation of minutes and for a copy of the minutes of each Project meeting (Including decisions made) to be given to each Project Manager as soon as practicable, but no later than 5 Business Days after each Project meeting. The minutes are to be approved by both parties within 10 Business Days after receipt.

 

8.3

Decisions of the Project Committee outside of Project meetings

 

Each party agrees that the Project Committee may make decisions outside Project meetings in accordance with the following requirements:

 

(a)

Email: Project Committee decisions that are made outside of Project meetings may only be made via email correspondence;

 

(b)

Correspondence: Each Project Manager shall be copied on emails that seek a decision of the Project Committee, and

 

(c)

Voting: Clause 7.5 applies in respect of any decision out of session.

 

(d)

Records: The coordinating Project Manager selected at the previous meeting shall prepare and file a copy of the decisions and circulate to each Project Manager.

 

9

Project reports

 

9.1

Progress reports

 

Each Project Committee shall:

 

(a)

prepare regular comprehensive written reports (in English) as determined by the JSC in relation to the progress of each Project and as otherwise set out in the relevant Project Agreement; and

 

(b)

submit its reports to the JSC on a pre-determined basis so they may be circulated to both parties as part of the papers poor to each JSC meeting.

 

9.2

Final and milestone completion reports

 

Within a reasonable time of completion of each Project (or any major phase of a Project as agreed by the Project Committee), the Project Committee shall:

 

(a)

prepare and agree a written report (in English) for that Project which sets out the work performed, and all Improvements and New IPR developed in sufficient detail to allow the parties to evaluate the commercial and scientific value of the results for that Project; and

 

(b)

submit that written report to the JSC.

 

10

Joint Steering Committee

 

10.1

Establishment

 

The parties shall establish a committee for the purposes of implementing this agreement and the Project Agreements (Joint Steering Committee or JSC).

 

 

10.2

Function

 

Without limiting clause 4.1 (Party's commitments), the implementation of this agreement and all Project Agreements will be under the direction of the JSC. The JSC will consider and decide all things reasonably required in relation to this agreement and any Project Agreement including:

 

(a)

having general oversight of for all activities performed under this agreement or any Project Agreement;

 

(b)

establishing budgets and financial decision-making;

 

(c)

approving any Product, and its Project Agreement (and any changes to a Project Agreement), provided that the execution of the Project Agreement and any changes to a Project Agreement will be subject to each party's internal approval;

 

(d)

approving the strategy for communication about this agreement, a Product and any Project Agreement, including any public announcements and interactions with third parties, and

 

(e)

determining any other matter required to be determined by the JSC under this agreement.

 

10.3

Composition

 

Each party:

 

(a)

shall appoint 3 JSC representatives each to represent It on the JSC;

 

(b)

shall notify the other party in writing of the representative it has appointed;

 

(c)

shall, as far as practicable, seek to ensure longevity of each person's tenure as that party's JSC representative; and

 

(d)

may change its JSC representatives from time to time, and shall notify the other party of that change in writing.

 

10.4

Voting and decisions

 

(a)

Each party has one vote for each decision made by the JSC and each party shall direct its JSC representatives to exercise that vote together.

 

(b)

All decisions of the JSC require unanimous approval of both parties. If the matters cannot be approved by unanimous vote, it shall be dealt with in accordance with clause 25.2 (Dispute resolution process).

 

(c)

Each party agrees to give effect to decisions made by the JSC.

 

10.5

Chairperson

 

(a)

Each JSC meeting shall be led by a chairperson appointed m accordance with this clause 10.5 (Chairperson).

 

(b)

Unless otherwise agreed by the JSC

 

(i)

each Chairperson shall be appointed on an annual basis;

 

(ii)

each time a new Chairperson is required:

 

 

(A)

one of the parties may nominate one of their JSC representatives to be the Chairperson in accordance with clause 10.5(b)(iii) on a rotating basis; and

 

(B)

the parties shall agree on, and appoint, the Chairperson from those nominees; and

 

(iii)

a party may only have a JSC representative as Chairperson for a maximum of one period each 12 months (such that each party will nominate a Chairperson on a revolving basis).

 

(c)

For the avoidance of doubt, the Chairperson retains the right to vote (without a superior voting right) on all matters before the JSC in accordance with clause 10.4.

 

(d)

The Chairperson is responsible for coordinating and providing leadership for the activities involved under the agreement and the Project Agreements, including circulating the agenda and the papers for any JSC meeting in accordance with the requirements of clause 10.6.

 

10.6

JSC meeting requirements

 

(a)

Frequency: The JSC shall meet every [***], or as otherwise agreed by the JSC.

 

(b)

Location: JSC meetings shall be held in a location as determined by the JSC.

 

(c)

Technology: A JSC meeting may be held at 2 or more venues using any technology that gives the JSC representatives a reasonable opportunity to participate.

 

(d)

Notice: Unless otherwise agreed by the JSC, each JSC representative shall receive at least [***]notice of each meeting of the JSC, from the Chairperson The notice shall include an agenda, and shall be sent to all JSC representatives.

 

(e)

Papers: Unless otherwise agreed by the JSC, papers for each JSC meeting shall be circulated at least [***] prior to a JSC meeting.

 

(f)

Minutes: The Chairperson shall arrange for a copy of the minutes of each JSC meeting to be given to each JSC representative and each party as soon as practicable, but no later than 10 Business Days after each JSC meeting The minutes may be approved by each party's JSC representatives by giving notice to the other JSC representatives and are taken to be approved if no notice is given within 10 Business Days after receiving the minutes. If approved or taken to be approved by each party's JSC's representatives, the minutes shall be signed by the Chairperson of the relevant meeting and are then conclusive evidence of the proceedings and decisions of the JSC meeting to which they relate.

 

10.7

Decisions of the JSC outside of JSC meetings

 

Each party agrees that the JSC may make decisions outside JSC meetings in accordance with the following requirements:

 

(a)

Email: JSC decisions that are made outside of JSC meetings may only be made via email correspondence;

 

(b)

Correspondence: Each JSC representative shall be copied on emails that seek a decision of the JSC; and

 

(c)

Voting: Clause 10.4 applies in respect of any decision out of session.

 

(d)

Records: The Chairperson shall prepare and file a copy of the decisions and circulate in accordance with clause 10.6(f).

 

 

11

Personnel

 

11.1

Personnel

 

(a)

Where the parties agree that the Project shall be performed by certain key Personnel of either party, those Personnel shall be named in the Project Agreement for that Project and shall perform the Project unless agreed otherwise by the Project Committee for that Project.

 

(b)

Each party shall use only Personnel who have adequate training, and sufficient qualifications and experience to perform the Project Each party shall ensure its Personnel comply with all the obligations imposed on that party under this agreement and the applicable Project Agreement.

 

(c)

A party's Personnel are not employees, representatives or agents of the other party. Each party will be entirely responsible for and pay all fees, wages, salaries withholding taxes, unemployment taxes, workers' compensation insurance premiums and other sums required by law to be paid m connection with its Personnel.

 

11.2

Subcontractors

 

(a)

Unless otherwise specified in this agreement, the applicable Project Agreement or separately agreed by the parties in writing, a party shall not use subcontractors to perform any of its obligations under a Project Agreement without the prior written consent of the other party (which consent shall not be unreasonable withheld or delayed). If a party has not responded to a notice from the other party requesting consent within [***] of receipt of the notice, consent is deemed to have been given by the party.

 

(b)

Where a party uses subcontractors to perform any of its obligations under a Project Agreement, that party:

 

(i)

shall ensure those subcontractors have agreed to:

 

(A)

confidentiality obligations at least as restrictive as those set out in this agreement; and

 

(B)

obligations regarding the rights to use any Intellectual Property Rights, and assignment of any Improvements and New I PR developed by those subcontractors (other than Background IPR of those subcontractors) consistent with and at least as restrictive as those set out in this agreement or the relevant Project Agreement; and

 

(ii)

remains primarily liable to the other party for all acts of the subcontractors as if they were employees of the first party acting within the scope of their authority.

 

12

Records and inspection

 

12.1

Records

 

Each party shall keep clear, full, accurate and up to date records together with any relevant supporting material of all:

 

 

(a)

details of Sales of Products, the deductions used to calculate the Net Sales value and any other information necessary to enable the other party to verify the calculation of royalties payable;

 

(b)

its activities performed in connection with this agreement and all Project Agreements (Activities);

 

(c)

materials including laboratory notebooks, worksheets, records reports and data obtained or generated in the course of undertaking its Activities;

 

(d)

time, costs and expenses incurred in undertaking its Activities, and

 

(e)

all Personnel, materials, products, parts and equipment used m connection with undertaking its Activities,

 

(together, Records).

 

12.2

Record retention

 

Each party shall retain all Records during the term and for the longer of

 

(a)

the period of time required by any Regulatory Requirements; or

 

(b)

[***] after the date of termination or expiry of the relevant Project Agreement; or

 

(c)

[***] after the period during which sales continue and Royalties are payable to either party.

 

12.3

Inspection

 

(a)

Until the expiry of the retention period set out in clause 12.2, upon reasonable prior written notice from a party, the other party shall, during normal business hours and with minimum interference with the other party's business operation:

 

(i)

make available its Records, and relevant Personnel;

 

(ii)

allow reasonable access to its premises and procure access to the premises, records and relevant personnel of its subcontractors where relevant; and

 

(iii)

provide all reasonable information and assistance,

 

to the notifying party and its Personnel (including an independent auditor selected by the first party), and any other relevant competent government or regulatory authority for the purposes of monitoring and carrying out an audit of that other party's compliance with this agreement and any Project Agreement including all activities and the calculation of any royalties and charges as may be reasonably appropriate having regard to the nature and progress of the relevant Project at any time or as may be required to comply with Regulatory Requirements (Audit) The first party may take copies of or extracts from that other party's Records for the purposes of carrying out the Audit. Before performing an Audit, any auditor shall agree to maintain the confidentiality at least as restrictive as those set out in this agreement of a party's Records and not disclose to third parties the contents of any Records.

 

(b)

In the event that an Audit reveals a discrepancy in the royalties or other amounts paid from those payable under this agreement or a Project Agreement, a party shall refund any overpayment and a party shall pay any underpayment immediately. Where an Audit undertaken by one party reveals an underpayment the other party which exceeds [***] of the total royalties payable for the Royalty Period under audit, the other party shall pay for the cost of the Audit otherwise the first party shall pay for the cost of the Audit

 

 

13

Access to premises

 

13.1

Access to a Partner's premises

 

(a)

Subject to clauses 13.2 and 13.3 and clause 18 (Confidentiality), a party may allow certain pre-approved and nominated Personnel of the other party access (during business hours, on reasonable notice) to designated areas within the first party's premises to the extent reasonably required to enable the other party to participate in a Project in accordance with the terms of this agreement and the applicable Project Agreement for that Project.

 

(b)

A party may at any time (acting reasonably) deny access to another party or remove its Personnel from the list of approved Personnel of that party (whether temporarily or permanently) where that party breaches any of the provisions of clauses 13.2 or 13.3 or clause 18 (Confidentiality).

 

13.2

Comply with a party's policies

 

A party shall comply, and shall ensure that its Personnel comply, with all reasonable security, privacy, confidentiality, health and safety, and office conduct policies and procedures notified to that party and reasonable directions of the other party whilst on that other party's premises.

 

13.3

Minimal disruption

 

A party shall ensure that its Personnel will cause no more than minimal disruption to the other party while accessing that other party's premises in accordance with this agreement and the applicable Project Agreement.

 

14

Intellectual Property Rights

 

14.1

Product Intellectual Property Rights

 

Prior to commencing the implementation of a Project Agreement for a Product each party shall undertake searches to determine and confirm the status (significant or otherwise) of Intellectual Property Rights for that Product in strategic countries in that party's Territory. The JSC and the Project Committee for the relevant Project shall take into account the results of each party's searches and agree an appropriate Intellectual Property Rights strategy for the implementation of that Project.

 

14.2

Background IPR

 

(a)

Each party shall give full disclosure to the other party of all Background IPR owned or licensed by it which is relevant to a Project.

 

(b)

All Background IPR is and shall remain the exclusive property of the party owning it (or, where applicable, the third party from whom its right to use the Background IPR has derived) and nothing in this agreement or any Project Agreement shall operate to transfer any Background IPR of one party to the other party.

 

(c)

Each party grants to the other party a royalty-free, non-exclusive licence to use the first party's Background IPR to the extent necessary to perform the Project in the other party's Territory together with a right to sub-license to any subcontractor performing services for and on behalf of the other party in accordance with clause 11.2 (Subcontractors).

 

 

14.3

Improvements

 

Except as agreed otherwise in a Project Agreement, any modifications, enhancements or improvements of a party's Background IPR and all associated Intellectual Property Rights (Improvements) will be owned by that party regardless of who created the Improvements but they will be treated as Background IPR for the purposes of the licence granted to the other party under clause 14.2(c). Each party assigns to the other party any rights, title and interest the first party may have in the Improvements so as to perfect the other party's ownership in the Improvements.

 

14.4

New IPR

 

Any new Intellectual Property Right created, generated, developed, derived conceived or first reduced to practice in the course of activities performed by a party in relation to a Project or otherwise under this agreement or a Project Agreement, which is not derived from either party's Background IPR or Improvements and all associated Intellectual Property Rights (New IPR), will be owned by the parties in shares to reflect the respective inventive contribution of each party to that New IPR as determined by the principles of United Kingdom patent law unless specified otherwise m the relevant Project Agreement. The parties may assign or license their rights to any New IPR to each other in relation to a Project as specified in the relevant Project Agreement or as otherwise agreed between the parties at any time.

 

14.5

Third party Intellectual Property Rights

 

If a party licenses any Intellectual Property Rights from a third party in relation to a Project, that party shall make reasonable efforts to ensure that the other party receives a licence from that third party for those Intellectual Property Rights upon equal terms for use in the other party's Territory.

 

14.6

Registration

 

(a)

Except where otherwise agreed by the parties or expressly provided otherwise in a Project Agreement, if any New IPR for a Product is.

 

(i)

wholly owned by one party, that party shall use all reasonable endeavours to carry out, at its own expense the drafting, filing and prosecution of all patent applications and the maintenance and extension, of all patent registrations comprised in the New IP in those parts of the world to the extent required to provide reasonable patent protection for that Product for the term of the relevant Project Agreement; and

 

(ii)

jointly owned by the parties, Vaccitech shall use all reasonable endeavours to carry out the drafting, filing and prosecution of all patent applications and the maintenance and extension, of all patent registrations comprised in the New IP in those parts of the world to the extent required to provide reasonable patent protection for that Product for the term of this agreement in consultation with CanSino (Joint Project Patents) The parties shall share all costs in relation to these patent applications and registrations as agreed at the time or set out in the relevant Project Agreement.

 

(b)

Before abandoning any Joint Project Patents in any country or withholding payment of any fee necessary for procuring or keeping in force a Project Patent in any country upon the expiry of earlier termination of a Project Agreement relevant to that Joint Project Patent, Vaccitech shall give CanSino at least [***] prior written notice of Vaccitech s intended course of action. Before the expiry of the notice period, CanSino may re-quest the assignment of Vaccitech's rights to the Joint Project Patent from Vaccitech to CanSino on terms to be agreed by the parties at the time.

 

 

14.7

Infringement

 

A party shall notify the other party m writing immediately, giving full particulars, if it becomes aware of any of the following:

 

(a)

any actual suspected or threatened infringement or any actual, suspected or threatened unauthorised disclosure, misappropriation or misuse of any New IPR by a third party;

 

(b)

any actual or threatened claim that any patent application or registered patent m relation to any New IPR or related Background IPR is invalid;

 

(c)

any actual or threatened opposition to any patent application or registered patent in relation to any New IPR or related Background IPR;

 

(d)

any claim made or threatened that any New IPR or related Background IPR infringes the rights of any third party;

 

(e)

any person applies for, or is granted, a patent by reason of which that person may be or has been, granted rights that conflict with any New IPR or related Background IPR;

 

(f)

any other form of attack, charge or claim to which the New IPR or related Background IPR may be subject; and

 

(g)

if the notifying party proposes to issue proceedings for the revocation of or opposition to any patent or patent application of any third party for the purpose of more effectively implementing the notifying party's rights of exploitation of any New IPR or related Background IPR, and

 

the parties shall discuss appropriate steps to take in the circumstances to properly protect the New IPR or related Background IPR including bringing legal proceedings. Neither these discussions nor any delay in an agreement between the parties regarding appropriate steps to take shall prevent either party taking whatever steps it believes appropriate to properly protect the New IPR and related Background IPR in its Territory.

 

14.8

Further efforts

 

Each party agrees to execute (and, to the extent necessary, procure that any of its Personnel involved in a Project execute) all documents and assignments and do (and, to the extent necessary, procure that any of its Personnel involved in a Project do) all things as may be reasonably necessary to perfect the other party's Wie to Intellectual Property Rights or to register the other party as owner of registrable rights in accordance with this agreement and the relevant Project Agreement.

 

15

Exploitation

 

15.1

Background IPR

 

Each party grants to the other party a non-exclusive licence to use the first party's Background IPR to the extent necessary to commercialise and exploit New IPR and Products in the other party's Territory together with a right to sub-license (each sublicence to have no further right to sublicense) subject to the payment of milestone payments and royalties in accordance with the Project Agreement for those Products.

 

15.2

New IPR and Products

 

Each party grants to the other party an exclusive licence to use the first party's New IPR to the extent necessary to commercialise and exploit Products developed using that New IPR in the other party's Territory together with a right to sub-license (each sublicence to have no further right to sublicense) subject to the payment of milestone payments and royalties in accordance with the Project Agreement for those Products.

 

 

 

15.3

Pursue exploitation

 

Each party agrees to use commercially reasonable endeavours to exploit the New IPR licensed to it by the other party under a Project Agreement and maximise Net Sales of Products developed using that New IPR m the first party's Territory during the term of the Project Agreement including:

 

(a)

obtaining all necessary regulatory approvals in countries throughout its Territory for the exploitation of the Products;

 

(b)

using its best endeavours to sell and market the Products in all countries in the Territory;

 

(c)

seeking to maximise the royalties and milestone payments paid to the other party;

 

(d)

not engaging in any exploitation of the New IPR and Products in competition with the purpose contemplated by this agreement and the Project Agreement;

 

(e)

not engaging In any exploitation of the New IPR and Products other than in accordance with this agreement and the Project Agreement; and

 

(f)

comply with all Regulatory Requirements relating to the importation distribution, testing sale, supply or manufacture of the Products,

 

15.4

Regulatory authorities

 

(a)

The parties shall review and agree any regulatory documents and correspondence related to a Product prior to submission to a regulatory authority in any country. A party shall provide copies and where appropriate summary translations into English of all minutes of meetings with regulatory authorities and correspondence in relation to a Product to the other party

 

(b)

Each party shall provide to the other party any information and assistance reasonably requested by the other party for any regulatory filing or compliance activities relating to a Product in its Territory.

 

15.5

Patent markings

 

Each party shall include, and shall ensure that its sublicensees include, relevant patent or patent application numbers on all packaging and promotional material for any Products in compliance with the Regulatory Requirements of each country in that party s Territory where the Products are supplied, sold or distributed

 

16

Financial obligations

 

16.1

Milestone payments

 

Each party shall pay to the other party any milestone payments in accordance with the Project Agreement for that Product.

 

16.2

Royalties

 

Each party shall pay to the other party ongoing royalties on Net Sales in its Territory in relation to each Product Sold at the rate set out in the Project Agreement for that Product.

 

 

16.3

Royalty reports

 

At the same time as payment of the royalties falls due under clause 16 2 each party shall supply a written report for the relevant Royalty Period to the other party showing:

 

(a)

identification by quantity and description of Products Sold or transferred by the first party or any sub-licensees of the first party;

 

(b)

the total royalties payable for that Royalty Period;

 

(c)

the deductions used to calculate the Net Sales value and any other information necessary to enable the other party to verify the calculation of royalties payable for that Royalty Period; and

 

(d)

details of payments and royalties received from sublicensees including the deductions used to calculate the Net Sales value and any other information necessary to enable the other party to verify the calculation of royalties payable by a party's sublicensee to that party for that Royalty Period.

 

16.4

Invoices

 

If a Project Agreement provides that a party shall pay the other party any amount, the other party shall deliver to the first party an invoice for payment of amounts payable in accordance with the Project Agreement Subject to clause 16.7, all amounts payable are stated exclusive of value added tax, or any other taxes or duties (if any) payable.

 

16.5

Payment

 

(a)

Within [***] of the date of the end of each Royalty Period, each party shall pay the other party the royalties payable for that Royalty Period.

 

(b)

Within [***] of the due date for any milestone payment as set out in the relevant Project Agreement, each party shall pay the other party that milestone payments.

 

(c)

Each party shall pay all other amounts properly due and undisputed in respect of any validly presented invoice within [***] of the date of receipt by that party of the invoice for those amounts.

 

(d)

Within [***] of the date of receipt by a party of an invoice from the other party, the first party shall notify the other party of any genuinely disputed amount and the reasons for the dispute. If no dispute is raised by the first party to the other party in relation to an invoice, the invoice is deemed to be undisputed.

 

(e)

A party shall pay all disputed amounts in respect of any invoice within [***] of the dispute being resolved by the parties.

 

(f)

Subject to clause 16 7, each party shall pay all amounts properly due and undisputed under this agreement or a Project Agreement in full without any set-off, counterclaim or deduction.

 

16.6

Currency

 

All payments shall be made in pounds sterling. Where CanSino calculates the royalties in RMB, CanSino shall convert those royalties into pounds sterling [***].

 

16.7

Taxes

 

If the royalties, milestone payments and any other amounts payable by a party under this agreement or a Project Agreement are subject to withholding tax, charge, deduction or other like withholding, that party may withhold monies and pay any tax upon its payments to the other party where that income tax is due and payable by the other party provided that the first party uses all reasonable efforts to obtain any available exemption from the payment of that income tax and gives the other party a tax certificate or similar official record for any payment of income tax.

 

 

16.8

Interest

 

Each party shall pay interest on any overdue payments from the date the payment is due until the day of payment (both dates inclusive) at [***] per annum calculated on a daily basis from the due date until payment of the overdue amount payable is received by the other party in cleared funds. The parties agree that this constitutes a substantial remedy in terms of the Late Payments of Commercial Debts (Interest) Act 1998 (UK). Each party shall pay the interest together with the overdue amount.

 

16.9

Additional information

 

Where reasonably requested by a party, the other party shall supply additional information regarding any invoice or royalty report as necessary for the first party to confirm that the correct amounts have been paid by the other party under this agreement or any Project Agreement.

 

17

Termination

 

17.1

Termination

 

This agreement or a Project Agreement may be terminated'

 

(a)

by mutual agreement of the parties;

 

(b)

by either party immediately by written notice to the other party if the other party commits a material breach of this agreement or a Project Agreement and either:

 

(i)

the breach is not capable of being cured; or

 

(ii)

the breach is capable of being cured and the other party fails to cure the breach within [***] of being notified m writing of the breach by the party giving the notice;

 

(c)

by either party immediately by written notice to the other party if the other party commits persistent breaches of this agreement;

 

(d)

by either party immediately by written notice to the other party if the other party uses or permits a third party to use the first party's Background IPR or New IPR outside the scope of licences granted to it under this agreement or a Project Agreement without the first party's prior written consent, or otherwise infringes the first party's Background IPR or New IPR;

 

 

(e)

by either party immediately by written notice to the other party if the other party:

 

(i)

fails to pay any amount due under this agreement on the due date for payment and remains in default not less than a further [***] after being notified in writing that it is in default and to make such payment;

 

(ii)

suspends, or threatens to suspend, payment of its debts (unless those debts are the subject of a genuine dispute) or is unable to pay its debts as they fall due or admits inability to pay its debts;

 

(iii)

takes any step or action for or in connection with its entering administration, provisional liquidation or any composition or arrangement with its creditors (other than in relation to a solvent amalgamation or restructuring), being wound up (whether voluntarily or by order of the court, unless for the purpose of a solvent amalgamation or restructuring), having a receiver appointed to any of its assets or ceasing to carry on business or, if the step or action is taken in another jurisdiction, in connection with any analogous procedure in the relevant jurisdiction; or

 

(iv)

suspends or ceases, or threatens to suspend or cease, carrying on all or a substantial part of its business; and

 

(f)

by either party in accordance with clause 27.2 (Force majeure).

 

17.2

Automatic termination

 

(a)

A Project Agreement shall terminate automatically if OUI does not consent or withdraws any consents granted under clause 3.2(a) relevant to that Project Agreement and Vaccitech, acting reasonably, does not contest such withdrawal of consent.

 

(b)

If:

 

(i)

any Background IPR necessary for a Project is licensed from OUI to Vaccitech under the OUI Licence of Technology and the OUI Licence of Technology expires or is terminated earlier; and

 

(ii)

using all reasonable endeavours, the parties cannot agree upon a modification to the Project (or relevant Product) in order to continue without using that Background IPR,

 

that Project Agreement shall terminate automatically.

 

17.3

Consequences of termination

 

(a)

The expiry or termination of one Project Agreement does not terminate another Project Agreement or this agreement. The early termination of this agreement terminates all Project Agreements. Despite the expiry of the Term of this agreement, the agreement is deemed to continue and apply to any outstanding Project Agreement until the expiry or earlier termination of that Project Agreement, unless otherwise agreed by the parties.

 

(b)

Subject to clause 17 3(c) and unless otherwise agreed by the parties, on expiry or earlier termination of a Project Agreement, whether for breach or otherwise, each party shall:

 

(i)

bring all relevant sub-licences from that party to third parties to an end on the same date;

 

(ii)

pay all outstanding royalties, milestone payments and other sums due or that have become due to the other party under the Project Agreement;

 

(iii)

provide the other party with details of the stocks of Products relevant to that Project Agreement held at the point of termination;

 

(iv)

cease to use or exploit any jointly-owned New IPR, provided that this restriction does not apply to know-how or Confidential Information which has entered the public domain through no fault of that party, and that that party may continue to use the jointly-owned New IPR in order to meet any specific existing binding commitments already made by that party at the date of termination and requiring delivery of Products within the next [***]; and

 

(v)

subject to clause 17.3(b)(iv), destroy all other Products relevant to that Project Agreement and confirm m writing the destruction thereof if those Products use any jointly-owned New IPR, or any Intellectual Property Rights owned or licensed from the other party.

 

 

(c)

Except in the event of termination of a Project Agreement by CanSino for breach by Vaccitech, upon expiry or earlier termination of a Project Agreement, CanSino grants Vaccitech a non-exclusive, royalty-free, worldwide, perpetual, irrevocable licence to use any CanSino Background IPR, CanSino New IPR or jointly-owned New IPR used to develop, incorporated in, or referenced in any Product which is the subject of that Project Agreement to the extent necessary for Vaccitech to undertake research, development, manufacture, Sell or otherwise commercialise any Product which is the subject of that Project Agreement together with a right to sub-license to third parties for those purposes.

 

(d)

Expiry or termination of this agreement or a Project Agreement, whether for breach or otherwise shall not relieve a party of its obligation to accrue and pay royalties to the other party under the provisions of clause 16 (Financial obligations) for the duration of any notice period and in respect of any dealings in Products permitted by clause 17.3(b).

 

(e)

Despite clauses 17.1 and 17.2, any rights of the parties accrued prior to expiry or termination of this agreement, or prior to expiry or termination of a Project Agreement, and clauses 5.3 (Risk to Product development), 6.1(e) (Materials), 12 2 and 12.3 (Records and inspection), 14 (Intellectual Property Rights), 16 (Financial obligations), 17.3 (Consequences of termination), 18 (Confidentiality), 18.9 (Data Protection), 20 (Publication), 21 (Representations and warranties), 22 (Liability), 25 (Disputes), 26 (Notices and other communications) and 28 (General) survive expiry or termination of this agreement for any reason.

 

18

Confidentiality

 

18.1

Treatment of Confidential Information

 

Each party acknowledges that the Confidential Information of the other party is valuable to the other party. Each party undertakes to keep the Confidential Information of the other party secret and to protect and preserve the confidential nature and secrecy of that Confidential Information.

 

18.2

Use of Confidential Information

 

A party receiving Confidential Information (Recipient) may only use the Confidential Information of the party disclosing Confidential Information (Discloser) for the purposes of performing the Recipient's obligations or exercising the Recipient's rights under this agreement.

 

18.3

Disclosure of Confidential Information

 

A Recipient may not disclose Confidential Information of the Discloser to any person except:

 

(a)

Personnel of the Recipient who require it for the purposes of this agreement;

 

(b)

with the prior written consent of the Discloser;

 

(c)

if the Recipient is required to do so by law or a stock exchange; or

 

(d)

if the Recipient is required to do so in connection with legal proceedings relating to this agreement.

 

 

18.4

Disclosure by Recipient

 

A Recipient disclosing Confidential Information under clauses 13.3(a), 18.3(b) or 18.3(d) shall use all reasonable endeavours to ensure that persons receiving the Confidential Information from it do not disclose the information except in accordance with this agreement and the Recipient will be responsible for any act or omission of that person in relation to the Confidential Information as if it was the Recipient's own act or omission.

 

18.5

Protecting Confidential Information

 

(a)

The Recipient shall take reasonable steps to protect the Confidential Information of the Discloser and keep it secure from any unauthorised use or disclosure.

 

(b)

The Recipient shall promptly notify the Discloser on becoming aware of any use or disclosure of its Confidential Information in breach of this agreement, and shall cooperate with the Discloser to Investigate that breach and mitigate any adverse impact on the Discloser.

 

18.6

Return or destruction of Confidential Information

 

Subject to clause 18.7, on the Discloser's request, the Recipient shall immediately destroy or deliver to the Discloser all documents or other materials containing or referring to the Discloser's Confidential Information which are:

 

(a)

in the Recipient's possession, power or control; or

 

(b)

in the possession, power or control of persons who have received Confidential Information from the Recipient under clauses 18 3(a) or 18.3(b).

 

18.7

Exceptions

 

The obligation in clause 18 6 does not apply to Confidential Information of the Discloser that the Recipient requires in order to perform its obligations under this agreement or is otherwise entitled to retain to comply with Regulatory Requirements, including the rules of the relevant stock exchange.

 

18.8

Publicity

 

(a)

Neither party may make any statement, press release or other announcement relating to this agreement a Project Agreement, a Product, or the other party (Publicity) without the other party's prior written consent as to form, timing and content.

 

(b)

If any Regulatory Requirements including the rules of the relevant stock exchange require a party to release any Publicity:

 

(i)

that party shall submit to the other party a copy of the proposed Publicity as early as possible prior to its required release; and

 

(ii)

the other party shall use all reasonable efforts to notify the first party of its consent to the proposed Publicity or any objections by the date required by the first party.

 

 

18.9

OUI

 

(a)

Neither party may use the name of OUI, the University, or any inventor of the Intellectual Property Rights licensed to Vaccitech under the OUI Licence of Technology, in any Publicity without the prior written consent of OUI. Each party acknowledges that OUI may enforce its rights under this clause 18.9(a) despite not being a party to this agreement.

 

(b)

If Vaccitech's Confidential Information contains any confidential information of OUI, the parties acknowledge that OUI may enforce this clause 18 despite not being a party to this agreement.

 

(c)

For the purposes of this clause 18.9, the "University" means the Chancellor, Masters and Scholars of the University of Oxford whose administrative offices are at the University Offices, Wellington Square, Oxford 0X1 2JD, England.

 

19

Data protection

 

19.1

Definitions

 

For the purposes of this clause 19, unless the contrary intention appears, the following words and phrases have the following meanings:

 

Data Protection Legislation means the General Data Protection Regulation ((EU) 2016/679) and any other directly applicable European Union regulation relating to privacy, any data protection legislation from time to time in force in the United Kingdom and China, and any other data protection or privacy legislation applicable in the relevant jurisdiction.

 

Data controller, data subject, personal data, processing, and appropriate technical and organisational measures have the meanings as set out in the Data Protection Legislation in force at the time.

 

Permitted Recipients means the parties, the Personnel of each party, sublicensees of a party, and any third parties engaged to perform obligations in connection with this agreement including regulatory authorities.

 

Shared Personal Data means any personal data to be shared between the parties under this agreement or a Project Agreement.

 

19.2

Shared Personal Data

 

This clause 19 sets out the framework for the sharing of personal data between the parties as data controllers. Each party acknowledges that one party (Data Discloser) will regularly disclose to the other party (Data Recipient) Shared Personal Data collected by the Data Discloser for the purposes of this agreement and any Project Agreement.

 

19.3

Compliance with Data Protection Legislation

 

(a)

Each party shall comply with all applicable requirements of the Data Protection Legislation in relation to the Shared Personal Data and any activities undertaken in relation to this agreement and any Project Agreement.

 

(b)

Any material breach of the Data Protection Legislation by one party in relation to the Shared Personal Data, or any activities undertaken by that party in relation to this agreement or any Project Agreement, shall be considered to be a material breach of this agreement and give grounds to the other party to terminate this agreement under clause 17.1(b) (Termination).

 

 

19.4

Obligations

 

In relation to the Shared Personal Data and any activities undertaken in relation to this agreement and any Project Agreement, each party shall:

 

(a)

ensure that it has all necessary notices and consents in place to enable lawful transfer of the Shared Personal Data to the Permitted Recipients for the purposes of this agreement and any Project Agreement;

 

(b)

give full information to any data subject whose personal data may be processed under this agreement of the nature such processing. This includes giving notice that, on the termination of the relevant Project Agreement, personal data relating to them may be retained by or, as the case may be, transferred to one or more of the Permitted Recipients, their successors and assignees;

 

(c)

process the Shared Personal Data only for the purposes of this agreement and any Project Agreement;

 

(d)

not disclose or allow access to the Shared Personal Data to anyone other than the Permitted Recipients;

 

(e)

ensure that all Permitted Recipients are subject to written contractual obligations concerning the Shared Personal Data (including obligations of confidentiality) which are no less onerous than those imposed by this agreement;

 

(f)

ensure that it has m place appropriate technical and organisational measures to protect against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data; and

 

(g)

unless absolutely necessary or required to comply with Regulatory Requirements, only disclose or share data relating to individuals in a de- identified or anonymised format.

 

19.5

Mutual assistance

 

Each party shall assist the other in complying with all requirements of the Data Protection Legislation applicable to the other party's obligations under this agreement or any Project Agreement. In particular, each party shall:

 

(a)

consult with the other party about any notices given to data subjects in relation to the Shared Personal Data;

 

(b)

promptly notify the other party about the receipt of any data subject access request;

 

(c)

provide the other party with reasonable assistance in complying with any data subject access request;

 

(d)

not disclose or release any Shared Personal Data in response to a data subject access request without first consulting the other party wherever possible,

 

(e)

provide reasonable assistance the other party, at the cost of the other party, in responding to any request from a data subject and in ensuring compliance with its obligations under the Data Protection Legislation with respect to security, breach notifications, impact assessments and consultations with supervisory authorities or regulators;

 

(f)

notify the other party without undue delay on becoming aware of any breach by it of the Data Protection Legislation;

 

(g)

at the written direction of the Data Discloser, delete or return Shared Personal Data and copies thereof to the Data Discloser on expiry or earlier termination of the relevant Project Agreement unless required to retain the personal data by any Regulatory Requirements;

 

 

(h)

use compatible technology for the processing of Shared Personal Data to ensure that there is no lack of accuracy resulting from personal data transfers;

 

(i)

maintain complete and accurate records and information to demonstrate its compliance with this clause 19; and

 

(j)

provide the other party with contact details of at least one employee as point of contact and responsible manager for all issues arising out of the Data Protection Legislation, including the joint training of relevant staff, the procedures to be followed in the event of a data security breach, and the regular review of the parties' compliance with the Data Protection Legislation.

 

20

Publication

 

(a)

Subject to clause 20(d), each party shall submit to the other party a copy of any proposed manuscript, abstract, paper, journal article, oral presentation or poster presentation relating to New IP, a Project or a Product (Publication) at least 30 days prior to its proposed publication or submission to any organisation for publication.

 

(b)

Subject to clause 20(d), within 30 days of receipt of a proposed Publication, the other party shall notify the first party if the other party objects to the Publication on the basis that it contains any of the other party's Confidential Information or if the other party wishes to defer publication for up to 120 days to enable it to seek patent protection for any New IP owned by it.

 

(c)

A party may proceed with the Publication if no objections are received from the other party within the 30 day period, or if the Publication is amended to remove any reference to the other party's Confidential Information or New IP.

 

(d)

If any Regulatory Requirements including the rules of the relevant stock exchange require a party to publish a Publication or submit a Publication to an organisation for publication:

 

(i)

that party shall submit to the other party a copy of the proposed Publication as early as possible prior to its required publication or submission; and

 

(ii)

the other party shall use all reasonable efforts to notify the first party of its consent to the Publication or any objections under clause 20(b) by the date required by the first party.

 

(e)

If a proposed Publication submitted by CanSino to Vaccitech for review includes any confidential information of OUI, CanSino acknowledges that Vaccitech is required to submit the proposed Publication to OUI for review and approval for release under the terms of the OUI Licence of Technology Each party acknowledges that OUI may enforce its rights under this clause 18 despite not being a party to this agreement.

 

21

Representations and warranties

 

21.1

Representations and warranties

 

Each party represents and warrants to the other party that:

 

(a)

it has been incorporated or formed in accordance with the laws of its place of incorporation or formation, is validly existing under those laws and has power and authority to own its assets and carry on its business as it is now being conducted;

 

(b)

it has power to enter into this agreement and each Project Agreement, to comply with its obligations under them and exercise its rights under them;

 

 

(c)

subject to clause 3.2 (Conditions precedent), it is the owner or has the right to license its Background IPR in accordance with this agreement and each Project Agreement;

 

(d)

the entry by it into, its compliance with its obligations and the exercise of its rights under, this agreement and each Project Agreement do not and (to the best of its knowledge) will not infringe the rights of any third party (including Intellectual Property Rights) or conflict with any other obligation which it may have during the term of this agreement or any Project Agreement; and

 

(e)

use of its Background IPR in a Project will not, so far as it is aware, infringe the rights of any third party It will use all reasonable endeavours (including, by conducting searches of all relevant public registers) to ensure that its use of the New IP shall not infringe the rights of any third party. No third party has threatened or, so far as it is aware, is currently threatening proceedings in respect of such infringement, and none of its Background IPR is the subject of any actual or, so far as it is aware, threatened challenge, opposition or revocation proceedings

 

The representations and warranties given under this clause 21.1 are continuing obligations for the duration of the Term and the term of each Project Agreement.

 

21.2

Exclusions

 

To the extent permitted by law, each party excludes all implied terms, representations and warranties whether statutory or otherwise relating to the subject matter of this agreement or any Project Agreement other than as expressly set out in this agreement or any Project Agreement.

 

22

Liability

 

22.1

Indirect and consequential damages

 

Subject to clause 22.3, a party shall not be liable to the other party m connection with this agreement or a Project Agreement for any indirect, incidental, special, punitive, or consequential damages, or for loss of use, loss of business information, loss of revenue, or interruption of business, whether in contract, tort, negligence, breach of statutory duty or otherwise whatsoever or howsoever arising out of or in connection with this agreement a Project Agreement or a Product.

 

22.2

Limitation of liability

 

Subject to clause 22.3, the maximum aggregate liability (whether actual, contingent or prospective), including for any damage, loss, cost and expense (including legal costs and expenses of whatsoever nature or description) irrespective of when the acts, events or things giving rise to the liability occurred of a party {and any of its related bodies corporate) under or in relation to this agreement, a Project Agreement or a Product whether in contract, tort (including negligence), under law or otherwise will be limited to the amount of [***].

 

22.3

Exclusions from limitation of liability

 

Nothing in this agreement or a Project Agreement limits or excludes the liability of a party (and its related bodies corporate) for;

 

(a)

liability for fraud or criminal conduct;

 

(b)

liability which cannot be excluded or limited by law; or

 

 

 

(c)

liability for:

 

(i)

personal injury or death (including illness) of any person;

 

(ii)

product liability;

 

(iii)

infringement of any third party's Intellectual Property Rights, and

 

(iv)

breach of its obligations under clauses 14 (Intellectual Property Rights), 18 (Confidentiality), 19 (Data protection) or 24 (Anti-bribery),

 

in each case caused by or arising out of or in any way in connection with any act or omission (including negligence) of a party, its Personnel or its related bodies corporate.

 

22.4

Insurance

 

Each party shall maintain, at its own expense, appropriate insurance cover with reputable insurers including professional indemnity, clinical trials, workers compensation, errors and omissions, fidelity and public liability insurance for the Term and the term of any Project Agreement (whichever is the later) and for at least [***] following in respect of its potential liability under this agreement and any Project Agreement however arising.

 

22.5

Severability

 

The parties expressly agree that should any limitation or provision contained in this clause 22 be held invalid under any applicable law, it will to that extent be deemed omitted or amended.

 

23

Indemnity

 

23.1

Indemnity

 

Subject to clause 23.2, each party indemnifies the other against any and all losses, liabilities, claims, actions, damages, proceedings, demands, costs, charges and expenses (Losses) incurred by the other party resulting from or in connection with, directly or indirectly

 

(a)

infringement by the first party of any third party's Intellectual Property Rights; and

 

(b)

breach by the first party of its representations and warranties under clause 21 1 (Representations and warranties), and obligations including without limitation under clauses 14 (Intellectual Property Rights), 18 (Confidentiality), 19 (Data protection) or 24 (Anti-bribery), except to the extent that the Losses arose from any act, default or omission by the first party, including without limitation, any act, default or omission which is in breach of this agreement or a Project Agreement

 

23.2

Terms of indemnification

 

(a)

If any claim is mace by a third party against a party indemnified under clause 23 1 (Indemnitee), the Indemnitee shall be defended by the party that is obliged to indemnify the Indemnitee under clause 23.1 (Indemnifying Party) at the Indemnifying Party's sole expense by counsel selected by Indemnifying Party and reasonably acceptable to the Indemnitee provided that the Indemnitee may, at its own expense, also be represented by counsel of its own choosing. The Indemnifying Party shall have the sole right to control the defence of any such claim or action, subject to the terms of this clause 23.

 

(b)

The Indemnifying Party may settle any claim, demand, action or other proceeding or otherwise consent to an adverse judgment:

 

(i)

with prior written notice to the Indemnitee but without the consent of the Indemnitee if the only Liability to the Indemnitee is the payment of money and the Indemnifying Party makes such payment; or

 

(ii)

in all other cases, only with the prior written consent of the Indemnitee, such consent not to be unreasonably withheld delayed or conditioned.

 

 

(c)

The Indemnitee shall notify the Indemnifying Party promptly of any claim, demand, action or other proceeding for which it seeks indemnification hereunder. Indemnitee shall not settle or otherwise consent to an adverse judgment in any such claim, demand action or other proceeding or make any admission as to liability or fault without the express written permission of the Indemnifying Party, unless Indemnitee first releases the Indemnifying Party from its obligations under this clause 23.

 

24

Anti-bribery

 

(a)

In relation to any activities undertaken m relation to this agreement, any Project Agreement or any Product each party shall:

 

(i)

comply with all Regulatory Requirements which apply to it or its activities and which relate to anti-bribery or anti-corruption (or both), including the Bribery Act 2010 (UK) and the anti-bribery laws and regulations applicable in China;

 

(ii)

not do anything which would constitute an offence under sections 1, 2 or 6 of the Bribery Act 2010 (UK) if It had been carried out in the United Kingdom;

 

(iii)

have policies and procedures (including adequate procedures as determined in accordance with section 7(2) of the Bribery Act 2010 (UK) and any guidance issued under section 9 of the Bribery Act 2010 (UK)) to ensure compliance with paragraphs (i) and (ii) above;

 

(iv)

follow and enforce the policies and procedures referred to in paragraph (iii) above;

 

(v)

promptly report to the other party any request or demand for any undue financial or other advantage of any kind received by it.

 

(vi)

provide evidence of compliance with this clause 24 as the other party may reasonably request from time to time and

 

(vii)

keep accurate and up to date records and becks of account showing all payments made by it in connection with this agreement, any Project Agreement, and any Product which records and books of account shall be sufficient to allow the other party to verify compliance with this clause 24.

 

(b)

Each party shall ensure that its Personnel and any other person associated with it (as determined in accordance with section 8 of the Bribery Act 2010 (UK)) who is involved in a Project is involved in the Project only on the basis of a written contract which imposes on that person terms equivalent to those imposed on that party in this clause 24 and that party shall be liable to the other party for any breach of those terms by the first party's Personnel or any other person associated with it.

 

25

Disputes

 

25.1

Compliance with this clause

 

The parties agree not to commence any legal proceedings in respect of any dispute arising under this agreement which cannot be resolved by informal discussion, until the procedure provided by this clause 25 has been used.

 

 

25.2

Dispute resolution process

 

The parties agree that any dispute arising under this agreement is dealt with as follows:

 

(a)

the party claiming that there is a dispute will send the other party a written notice stating that:

 

(i)

it is a notice under this clause 25.2(a); and

 

(ii)

specifying in reasonable detail

 

(A)

the nature of the dispute; and

 

(B)

the matters on which the parties are unable to agree at the date of the notice of the dispute;

 

(b)

the parties shall try to resolve the dispute through direct negotiation and shall use all reasonable endeavours acting in good faith to resolve the dispute by joint discussions in accordance with the following escalation procedure:

 

(i)

if the dispute is not resolved within [***] from the date of the notice in clause 25.2(a) (Notice Date) by persons whom they have given authority to resolve the dispute, the dispute shall be referred by either party for further resolution to the Joint Steering Committee which shall meet to resolve and settle the dispute;

 

(ii)

if the dispute is not resolved within [***] from the Notice Date by the Joint Steering Committee, the dispute shall be referred by the Joint Steering Committee to the senior executives of each party who shall meet to resolve and settle the dispute; and

 

(iii)

if the dispute is not resolved within [***] from the Notice Date or the senior executives of each party fail to meet to resolve and settle the dispute within [***] of the Notice Date the dispute shall be submitted to arbitration under clause 25.3; and

 

(c)

the representatives of each party may participate in meetings to resolve a dispute, adjourn and otherwise regulate those meetings as they think fit and the parties may agree to conduct meetings in any format (in person, by telephone, by videoconference or otherwise) regardless of where a representative is located or how they communicate with each other.

 

25.3

Arbitration

 

Any dispute arising out of or in connection with this agreement or a Project Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration's (LCIA) Arbitration's Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be one. The seat, or legal place, of arbitration shall be London The language to be used in the arbitral proceedings shall be English.

 

26

Notices and other communications

 

26.1

Form

 

Notices and other communications in connection with this document will be in writing. They will be sent to the address or email address referred to in the Details or elsewhere in this agreement and (except in the case of email) marked for the attention of the person referred to in the Details or elsewhere in this agreement. If the intended recipient has notified changed contact details, then communications will be sent to the changed contact details.

 

 

26.2

When effective

 

Communications take effect from the time they are received or taken to be received under clause 26.3 (whichever happens first) unless a later time is specified in the communication.

 

26.3

When taken to be received

 

Communications are taken to be received:

 

(a)

if sent by post, [***] after posting (or [***] after posting if sent from one country to another);

 

(b)

if sent by fax, at the time shown in the transmission report as the time that the whole fax was sent; or

 

(c)

If sent by email, when the sender receives an automated message confirming delivery, or [***] after the time sent (as recorded on the device from which the sender sent the email) unless the sender receives an automated message that delivery failed, whichever happens first.

 

26.4

Receipt outside business hours

 

Despite anything else m this clause 26, if communications are received or taken to be received under clause 26.3 after 5.00pm on a Business Day or on a non-Business Day, they are taken to be received at 9.00am on the next Business Day.

 

27

Force majeure

 

27.1

Force majeure event

 

Despite any other provision of this agreement, if a party is unable to perform or is delayed in performing an obligation under this agreement or a Project Agreement which is caused by or which arises or results from any cause outside the reasonable control of the affected party ("Force Majeure Event"):

 

(a)

the affected party shall provide written notice as soon as practicable to the other party of the Force Majeure Event with details regarding the effects of the Force Majeure Event on the affected party and anticipated duration of the delay in the performance of the obligation;

 

(b)

as soon as practicable following notification, the parties shall consult with each other in good faith and use all reasonable efforts to agree appropriate terms to mitigate the effects of the Force Majeure Event and facilitate continued performance of the agreement;

 

(c)

that obligation is suspended but only so far and for so long as the affected party is affected by the Force Majeure Event; and

 

(d)

the affected party will not be responsible for any loss or expense suffered or incurred by any other party as a result of, and to the extent that, the affected party is unable to perform or is delayed m performing its obligations because of the Force Majeure Event provided that the affected party shall have taken appropriate actions (if possible) to mitigate the effects of the Force Majeure Event.

 

27.2

Termination

 

If a Force Majeure Event occurs and its effect continues for a period of [***], this agreement may be terminated at any time provided that the Force Majeure Event continues to apply or have effect, by a party giving written notice to the other party. The termination notice will take effect from the date specified in the termination notice (which date may not be earlier than the date on which the notice is given).

 

 

28

General

 

28.1

Entire agreement

 

This agreement and each Project Agreement constitutes the entire agreement of the parties about its subject matter and supersedes all previous agreements, understandings and negotiations on that subject matter.

 

28.2

Costs

 

Each party agrees to pay its own costs in connection with the preparation, negotiation, execution and completion of this agreement, any Project Agreement, and any other documents referred to in any of those documents.

 

28.3

Variation and waiver

 

A provision of this agreement and any Project Agreement, or right, power or remedy created under them may not be varied or waived except in writing signed by the party to be bound.

 

28.4

Severability

 

If the whole or any part of a provision of this agreement or any Project Agreement is void, unenforceable or illegal in a jurisdiction rt is severed for that jurisdiction. The remainder of the document has full force and effect and the validity or enforceability of that provision in any other jurisdiction is not affected. This clause has no effect if the severance alters the basic nature of the document or is contrary to public policy.

 

28.5

Further steps

 

Each party agrees to do anything (such as obtaining consents, signing and producing documents, producing receipts and getting documents completed and signed), which the other party asks and considers necessary to

 

(a)

bind the first party and any other person intended to be bound under this agreement or any Project Agreement; and

 

(b)

show whether the first party is complying with this agreement or any Project Agreement.

 

28.6

Assignment

 

(a)

Subject to clause 28.6(b), a party may not assign or otherwise deal with any of Its rights or obligations under this agreement or a Project Agreement without the other party's prior written consent which consent shall not be unreasonably withheld or delayed

 

(b)

A party may assign its rights or obligations under this agreement or a Project Agreement to an Affiliate of that party upon written notice to the other party. The assigning party shall pay for and prepare all required documentation and pay all reasonable costs incurred by the other party in relation to the assignment

 

28.7

Discretion in exercising rights

 

A party may exercise a right or remedy or give or refuse its consent in any way it considers appropriate (including by imposing conditions), unless this agreement or a Project Agreement expressly states otherwise

 

 

28.8

Partial exercise of rights

 

If a party does not exercise a right or remedy fully or at a given time, the party may still exercise it later.

 

28.9

Approvals and consents

 

By giving its approval or consent, a party does not make or give any warranty or representation as to any circumstance relating to the subject matter of the consent or approval.

 

28.10

Remedies cumulative

 

The rights and remedies provided in this agreement are in addition to other rights and remedies given by law independently of this agreement.

 

28.11

Third party rights

 

Except as expressly specified otherwise, no one other than a party to this agreement, their successors and permitted assignees, shall have any right to enforce any of the terms of this agreement or a Project Agreement.

 

28.12

Counterparts

 

This agreement and each Project Agreement may consist of a number of copies, each signed by one or more parties to it. If so, the signed copies are treated as making up a single document and the date on which the last counterpart is executed is the date of the document.

 

28.13

Governing law and jurisdiction

 

This agreement and each Project Agreement shall be governed by and construed in accordance with the law of England and Wales. The parties submit to the exclusive jurisdiction of the courts in England.

 

EXECUTED as an agreement

 

 

Master Collaboration Agreement

 

Schedule 1      Project Agreement

 

 

 

 

Project Agreement

 

Dated _____________

 

Vaccitech Limited ('Vaccitech")
CanSino Biologics Inc. ("CanSino")

 

King & Wood Mallesons
Octagon Point, 4^th Floor
St. Martins Court
5 Cheapside
London EC2V 6AA
UK
T +44 20 3823 2405
www.kwm.com

 

 

Project Agreement

 

Contents

 

Details		1
General terms		2
1	Definitions	2
2	Structure	2
3	Term	2
4	Project performance	2
4.1	Project phases, responsibilities and timing	2
4.2	Additional obligations	2
5	Project Managers	3
6	Project meetings	3
7	Personnel	3
8	Intellectual Property Rights	3
8.1	Background IPR	3
8.2	Anticipated New IPR	3
9	Product development and manufacture	3
10	Exploitation	4
11	Financial obligations	4
12	Termination	4
12.1	Termination for delay	4
12.2	Consequences of termination	4
13	Additional terms and conditions	4
14	General	4
14.1	Variation and waiver	4
14.2	Assignment	4
14.3	Counterparts	4
14.4	Governing law and jurisdiction	4
Schedule 1	Project details	5
Schedule 2	Financial obligations	7
Signing page		8

 

 

Project Agreement

 

Details

 

Parties
Vaccitech	Name	Vaccitech Limited
	Company number	09973585
	Formed in	England
	Address	Magdalen Centre Robert Robinson Avenue, The Oxford Science Park Oxford 0X4 4GA England
	Telephone	[***]
	Email	[***]
	Attention	[***]
CanSino	Name	CanSino Biologics Inc.
	Company number	91120116681888972M
	Formed in	China
	Address	185 South Avenue, TEDA West District, Tianjin 300457 China
	Telephone	[***]
	Email	[***]
	Attention	[***]
Start Date	[insert date]
Project	(insert Project title and scope]

Recitals	A	The parties entered into a Master Collaboration Agreement [date] (Master Collaboration Agreement or MCA) under which the parties agreed to undertake projects to collaborate on the research, development, manufacture and sale of certain products.
	B	The parties have identified the Project as an opportunity they wish to develop together
	C	Under clause 3 1 (Projects) of the Master Collaboration Agreement, this Project Agreement sets out the further details of obligations of the parties in relation to the Project.

 

 

 

Project Agreement

 

General terms

 

1

Definitions

 

(a)

All defined terms in the Master Collaboration Agreement have the same meaning in this Project Agreement unless stated otherwise or set out in the Details for this Project Agreement.

 

(b)

Any additional terms or expressions starting with a capital letter used m this Project Agreement have the meaning given to them set out m this Project Agreement.

 

2

Structure

 

(a)

This Project Agreement incorporates the terms of the Master Collaboration Agreement by reference.

 

(b)

In the event of a conflict between the terms of this Project Agreement and the Master Collaboration Agreement, the terms of this Project Agreement prevail unless specified otherwise.

 

(c)

In the event of a conflict between the terms of this Project Agreement and any Schedule to this Project Agreement, the terms of this Project Agreement prevail unless specified otherwise in the Schedule.

 

3

Term

 

This Project Agreement shall commence on the Start Date of this Project Agreement and shall expire upon the later of the following dates:

 

(a)

the expiry or earlier invalidation of all registered patents of New IP developed under this Project Agreement; or

 

(b)

[***] from the first commercial sale of any Products developed under this Project Agreement,

 

(Term) unless terminated earlier in accordance with the Master Collaboration Agreement. If no registered patents of New IP or Products are developed under this Project Agreement, this Project Agreement shall expire on [insert date/period).

 

4

Project performance

 

4.1

Project phases, responsibilities and timing

 

The details of the Project phases including responsibilities of the parties and timing are set out in the matrix table in clause 2.1 of Schedule 1 (Project phases responsibilities and timing matrix).

 

4.2

Additional obligations

 

The details of any additional obligations of each party in the performance of the Project are set out in clause 2.2 of Schedule 1 (Additional obligations) including:

 

(a)

any additional tasks to be performed by each party;

 

(b)

any additional responsibilities of each party;

  

 

(c)

facilities to be provided by each party;

 

(d)

equipment to be provided by each party;

 

(e)

location of performance of a party's obligations if other than where that party is located;

 

(f)

any additional costs; and

 

(g)

any other details specific to the Project.

 

5

Project Managers

 

The Project Manager for each party is set out in clause 3 of Schedule 1 (Project Managers)

 

6

Project meetings

 

The Project Committee shall meet [insert period]. The Project team shall meet every [insert period]. The Project Managers shall alternate responsibility for circulating and preparing an agenda in advance

 

7

Personnel

 

The key Personnel for each party are set out in clause 4 of Schedule 1 (Personnel).

 

8

Intellectual Property Rights

 

8.1

Background IPR

 

The parties shall contribute the key Background IPR specified in clause 5.1 of Schedule 1 (Background IPR)

 

8.2

Anticipated New IPR

 

The parties anticipate that the performance of the Project will provide the Project results and New IPR specified in clause 5.2 of Schedule 1 (Anticipated New IPR).

 

9

Product development and manufacture

 

(a)

Subject to clause 9(b), the parties shall use all reasonable endeavours to enter into a separate written supply agreement (Supply Agreement) under which CanSino shall manufacture and supply all Products necessary for this Project and the exploitation of the Products by the parties in accordance with the Master Collaboration Agreement and this Project Agreement. If the parties cannot agree upon this Supply Agreement, they must comply with the dispute resolution process set out in clause 25 (Disputes) of the Master Collaboration Agreement.

 

(b)

For all Products manufactured by CanSino under a Supply Agreement for Vaccitech to Sell in the Vaccitech Territory, Vaccitech shall pay charges to CanSino calculated at the equivalent of the costs incurred by CanSino to manufacture those Products increased by [insert %].

 

(c)

The parties shall discuss and agree a clinical development plan for any Product before any clinical trial application for that Product.

 

 

10

Exploitation

 

After completion of phase 1 clinical trials of a Product, the parties shall discuss:

 

(a)

if either party is considering further development towards exploiting or commercialising the Product; and

 

(b)

all associated development and business plans for that exploitation or commercialization.

 

11

Financial obligations

 

The parties shall pay all milestone payments, royalties and other payments as set out m Schedule 2 (Financial obligations).

 

12

Termination

 

12.1

Termination for delay

 

A party may terminate this Project Agreement by written notice to the other party if the other party unreasonably delays the performance of its obligations under this Project Agreement unless the parties have agreed otherwise in relation to the timing of the performance of those obligations. A party's unreasonably delay in the performance of its obligations under this Project Agreement is deemed to be a breach of this Project Agreement.

 

12.2

Consequences of termination

 

Clauses 12 2 (Consequences of termination) and ___ (General) survive expiry or termination of this agreement for any reason.

 

13

Additional terms and conditions

 

The parties shall perform additional tasks and provide additional items for the performance of the Project as follows:

 

(a)

(insert); and

 

(b)

[insert]

 

14

General

 

14.1

Variation and waiver

 

A provision of this Project Agreement, or right, power or remedy created under this Project Agreement, may not be varied or waived except in writing signed by the party to be bound.

 

14.2

Assignment

 

A party may not assign or otherwise deal with any of its rights or obligations under this Project Agreement without the other party's prior written consent.

 

14.3

Counterparts

 

This Project Agreement may consist of a number of copies, each signed by one or more parties to it. If so, the signed copies are treated as making up a single document and the date on which the last counterpart is executed is the date of the document.

 

14.4

Governing law and jurisdiction

 

This Project Agreement shall be governed by and construed in accordance with the law of England Wales. The parties submit to the exclusive jurisdiction of the courts in England

 

EXECUTED as an agreement

 

 

Project Agreement

 

Schedule 1              Project details

 

1

Project summary

 

Scope of Project:	[insert]
Target Product profile:	[insert]
Anticipated Project Outputs:	[insert]
Project Objectives:	[insert]

 

2

Project performance

 

2.1

Project phases, responsibilities and timing matrix

 

Project Phase	Funded and undertaken by:		Target Completion Date
	CanSino	Vaccitech

 

2.2

Additional obligations

 

[None] / (insert obligations]

 

[Note: insert any additional obligations of each party to undertake tasks, supply equipment or other goods, provide facilities, pay particular costs, and any other specific obligations of a party not set out in the MCA or elsewhere in this Project Agreement. Each obligation must be specified in detail (eg amounts, timings, description of MVS, materials, services, goods and equipment).]

 

3

Project Managers

 

Project Manager (Vaccitech):	[insert]
Project Manager (CanSino):	[insert]

 

4

Personnel

 

Key Personnel (Vaccitech):	[insert]   Key subcontractors: [insert]
Key Personnel (CanSino):	[insert)   Key subcontractors: [insert]

 

 

5

Intellectual Property Rights

 

5.1

Background IPR

 

Key Background IPR (Vaccitech):	[insert]
Key Background IPR (CanSino):	[insert]

 

5.2

Anticipated New IPR

 

Anticipated New IPR:

[insert any additional anticipated key Project results and New IPR]

 

 

Project Agreement

 

Schedule 2              Financial obligations

 

Upfront payment:	[insert amount] payable Dy CanSino upon execution of this Project Agreement
Annual payments:	[insert amounts]
Milestone payments (payable by CanSino to Vaccitech):	Milestone	Payment Amount
	[insert]	[insert]
	[insert]	[insert]
	[insert]	[insert]
	[insert]	[insert]
Royalties:	Royalty rate payable by Vaccitech:	[insert %]
	Royalty rate payable by CanSino:	[insert %]
Royalties Anti-Stacking Provisions:	[None] / [If a party requires a licence {or freedom to operate (FTO)) from a third party in order for that party (or its sublicensees) to Sell Products in part of that party's Territory, the royalties payable by that party for Sales of those Products in that part of its Territory shall be calculated using the royalty rate set out in this Project Agreement reduced by [insert %].]
Sublicence and Transaction Income Sharing:	[None] / [If CanSino sublicenses or sells any of its rights under this Project Agreement to a third party (not including CanSino's affiliate companies), CanSino shall pay [insert %] of the total transaction value (including upfront payment and milestone payments, but less any payments of royalties on Net Sales to CanSino) is payable to Vaccitech   For the avoidance of doubt:   (a)          clause 28.6 (Assignment) of the MCA applies to any sale or transfer of rights under this Project Agreement and (b)          Net Sales made by any sublicensee of a party are considered to be Net Sales made by that party for the purposes of the payment of royalties under the MCA]
Acknowledgments:	[None] / [insert]

 

 

Project Agreement

 

Signing page

 

DATED:_______________

 

SIGNED by ________________ as authorised representative for VACCITECH LIMITED in the presence of:	)
	)
	)
	)
	)
	)
Signature of witness	)	By executing this document the signatory warrants that the signatory is duly authorised to execute this document on behalf of VACCITECH LIMITED
	)
	)
	)
Name of witness (block letters)	)

 

SIGNED by ________________ as authorised representative for CANSINO BIOLOGICS INC, in the presence of:	)
	)
	)
	)
	)
	)
Signature of witness	)	By executing this document the signatory warrants that the signatory is duly authorised to execute this document on behalf of CANSINO BIOLOGICS INC,
	)
	)
	)
Name of witness (block letters)	)
	)

 

 

Master Collaboration Agreement

 

Schedule 2    Deed of Covenant

 

DEED OF COVENANT

 

Oxford University Innovation Limited
University Offices,
Wellington Square,
Oxford 0X1 2JD,
England

 

Date [insert date]

 

Dear Sirs,

 

Sub-Licence between Vaccitech Limited ("Vaccitech'') and [insert details of Sub-Licensee] dated [insert date] (the "Sub-Licence")

 

As part consideration for the grant of a sub-licence from Vaccitech to use [insert details of licensed technology] (the "Licensed Technology"), the Sub-Licensee hereby covenant to Oxford University Innovation Limited (OUI) and OUI covenant with the Sub-Licensee that:

 

1.

should the head licence between Vaccitech and OUI be terminated for whatever reason, OUI and the Sub-Licensee shall enter into a direct licence containing the same obligations and liabilities as set forth in the Sub-Licence and the Sub-Licensee will pay all due and payable under the Sub-Licence to OUI;

 

2.

should the Sub-Licensee wish to further sub-licence the Licensed Technology where OUI has consented to the Sub-Licence including the right to do so, it shall procure that any sub-sub-licensee enters into a Deed of Covenant with OUI in a form substantially similar to this Deed of Covenant:

 

3.

OUI shall have the right, during the term of the Sub-Licence, through an independent certified accountant appointed by OUI (the “Auditor”), to audit all accounts on at least [***] written notice no more than once each calendar year for the purpose of determining the accuracy of the royalty reports and payments The Auditor shall be:

 

a.

permitted to enter the principal place of business of the Sub-Licensee upon reasonable notice to inspect such records and accounts.

 

b.

entitled to take copies of or extracts from such records and accounts;

 

c.

given all other information by the Sub-Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

d.

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Sub-Licensee in order to verify the accuracy of the records and accounts and the accuracy of any royalty statements provided to Vaccitech.

 

If on any such audit a shortfall in payments of greater than [***] is discovered by the Auditor in respect of the audit period, the Sub-Licensee shall pay the audit costs of OUI.

 

SIGNED AS A DEED by
[Insert details of Sub-Licensee] in the presence of:-

 

 

Signature of Witness:

 

Name of Witness:
Address:

 

SIGNED AS A DEED by
OXFORD UNIVERSITY INNOVATION LIMITED in the presence of-

 

Signature of Witness:

 

Name of Witness:
Address:

 

 

Master Collaboration Agreement

 

Signing page

 

DATED: 4 September 2018

 

 

SIGNED by /s/ Tom Evans as authorised representative for VACCITECH LIMITED in the presence of:	)
	)
	)
	)
	)
/s/ Shou Bai Chao	)
Signature of witness	)	By executing this document the signatory warrants that the signatory is duly authorised to execute this document on behalf of VACCITECH LIMITED
	)
	)
Shou Bai Chao	)
Name of witness (block letters)	)

 

SIGNED by Illegible as authorised representative for CANSINO BIOLOGICS INC, in the presence of:	)
	)
	)
	)
	)
/s/ Graham Griffiths	)
Signature of witness	)	By executing this document the signatory warrants that the signatory is duly authorised to execute this document on behalf of CANSINO BIOLOGICS INC,
	)
	)
Graham Griffiths	)
Name of witness (block letters)	)
	)

 

 

Exhibit 10.6

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

LICENCE AGREEMENT

 

THIS AGREEMENT is made on 27 September 2018 (“Effective Date”)

 

BETWEEN

 

(1)

VACCITECH LIMITED, a company registered in England and Wales under number 09973585, the registered office of which is at Magdalen Centre 1 Robert Robinson Avenue, The Oxford Science Park, Oxford, Oxfordshire, 0X4 4GA, United Kingdom (“Vaccitech”);

 

(2)

THE CHANCELLOR, MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD, with offices at University of Oxford, University Offices, Wellington Square, Oxford, 0X1 2JD (“Oxford”); and

 

(3)

OXFORD UNIVERSITY INNOVATION LIMITED (previously known as Isis Innovation Limited), a company registered in England and Wales under number 02199542, the registered office of which is at University Offices, Wellington Square, Oxford, 0X1 2JD (“OUI”).

 

Each of Vaccitech, Oxford and OUI is referred to as a “Party” and together as the “Parties”; save that OUI shall only be a Party to this Agreement for the purposes of clause 3.

 

INTRODUCTION

 

(A)

Vaccitech has a licence under the Licensed Technology pursuant to the Head Licence (both as defined below).

 

(B)

Pursuant to the Head Licence, Oxford has a licence for Non-Commercial Use (as defined in the Head Licence) under the Licensed Technology (as defined in the Head Licence) and Licensee Improvements (as defined in the Head Licence).

 

(C)

To the extent such rights are not already retained pursuant to the Head Licence, Oxford wishes to acquire a sub-licence under the Licensed Technology and Vaccitech is willing to grant such rights, all in accordance with the provisions of this Agreement.

 

(D)

OUI wishes to waive certain provisions of the Head Licence with respect to such sub-licence, in accordance with the provisions of this Agreement.

 

AGREED TERMS

 

1.

Definitions and interpretation

 

1.1

In this Agreement, including the introduction:

 

(a)

“Affiliate” means any corporation or other business entity that directly or indirectly controls or is controlled by or is under common control with the relevant Party. For the purposes of this definition only, “control”, or “controlled” shall mean: (i) direct or indirect beneficial ownership of fifty percent (50%) or more of the voting interest in an entity; or (ii) possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of that entity (whether through ownership of securities or other ownership interests, by contract or otherwise);

 

 

(b)

“CEPI” means Coalition for Epidemic Preparedness Innovations, a not-for-profit international association existing under Norwegian law;

 

(c)

“CEPI Agreement” means the framework agreement between Oxford, CEPI and Janssen Vaccines & Prevention B.V., entered into on or about the same date as the present Agreement;

 

(d)

“CEPI Licence” has the meaning given in Schedule 1 of this Agreement;

 

(e)

“Control” and with correlative meaning, “Controlled by” means the possession of the right (directly or indirectly, and by ownership, licence or otherwise) to grant a licence, sub-licence or other right as required in this Agreement, to or under any know how or intellectual property right, without violating the terms of any agreement or other arrangement with any third party;

 

(f)

“Field” means the diagnosis, prevention or treatment of Middle Eastern Respiratory Syndrome (“MERS”) in humans;

 

(g)

“Head Licence” means the licence agreement between OUI and Vaccitech dated 4 March 2016 set out, in redacted form, in Schedule 2;

 

(h)

“Licensed Product” means any product, process, service or composition for use in the Field which is entirely or partially produced by means of or with the use of, or within the scope of, the Licensed Technology, or any part of it;

 

(i)

“Licensed Technology” means the Licensed Technology (as defined in in the Head Licence) and all developments and improvements to the Licensed Technology that are Controlled by Vaccitech during the term of the Head Licence;

 

(j)

“Public Sector Agency” means a public government or government department or agency or a recognised not-for-profit organisation or entity, such as registered charities or registered faith-based organisations, including:

 

(A)

government or department or agency thereof, including ministries of health;

 

(B)

intergovernmental organisations such as the United Nations, its specialised agencies including the World Health Organisation and its programmes or funds such as the United Nations Children’s Fund;

 

(C)

not-for-profit organisations or entities organised under the laws of a government or department or agency thereof, such as Medecins Sans Frontieres and faith-based organisations; and

 

(D)

not -for-profit organisations or foundations that are funded by governments or other non-profit organisations such as the World Bank, UNITAID or the US Agency for International Development or the GAVI Alliance, but specifically excluding hospitals and clinics who wish to purchase the Licensed Product directly for their own use;

 

The term “Public Sector Agency” excludes any military organisations except for: (a) any military organisation operating in the area affected or likely to be affected by the Outbreak or Increased Outbreak Preparation Need (each as defined in Schedule 1) at the date the Affected Territory (as defined in Schedule 1) is declared; and (b) any military personnel providing healthcare or healthcare related services to the population affected by or at risk of the Outbreak or Increased Outbreak Preparation Need;

 

(k)

“Representatives” in relation to a Party, means the directors, officers, employees, consultants and advisers of that Party or its Affiliates, and with respect to Oxford means its sub-licensees under a sub-licence granted pursuant to clause 2.2; and

 

 

(l)

“Sell”, “Sale” and or “Selling” means sale to Public Sector Agencies on a “cost plus” basis (where “cost plus” means the cost of manufacturing and supply plus a reasonable margin of [***] on such cost reflecting the limited volume of manufacture and episodic demand), and for the purposes of this definition, the pre-margin “cost” element shall be determined in accordance with the formula for calculating the production economics cost of goods set by the Bill and Melinda Gates Foundation but specifically excluding from such formula any funding provided to the manufacturer or supplier by any charitable or other public sources, including CEPI and its own funders.

 

1.2

In this Agreement:

 

(a)

the singular includes the plural and vice versa, any gender includes other genders, and a “person” includes a natural person, corporate or unincorporated body (whether or not having separate legal personality);

 

(b)

“this Agreement” includes this Agreement as amended or supplemented from time to time;

 

(c)

the headings to clauses and schedules are to be ignored in construing this Agreement; and

 

(d)

the schedules form part of this Agreement as if set out in full in this Agreement and a reference to “this Agreement” includes a reference to the schedules.

 

2.

Grant of rights

 

2.1

Subject to the provisions of this Agreement, in addition to and to the extent such rights are not already retained under the Licensed Technology pursuant to the Head Licence, Vaccitech hereby grants to Oxford a perpetual, worldwide, fully-paid up non-exclusive licence, under the Licensed Technology in the Field of the same scope as the CEPI License, for the sole purpose of:

 

(a)

enabling Oxford to grant a sublicense to CEPI of the scope of the CEPI Licence, ; and

 

(b)

enabling Oxford to Develop the Licensed Product (including generation of investigational stockpiles but excluding any commercial use or Sale of the same). This license shall be sublicensible by Oxford solely to Oxford’s collaborators under the CEPI Agreement.

 

2.2

Notwithstanding clause 2.1, Oxford shall only grant CEPI a sub-licence of the rights granted under clause 2.1(a) if:

 

(a)

such sub-licence contains legally binding provisions that require that CEPI shall promptly communicate to Oxford in writing: (A) any safety information requested by a regulatory authority in respect of a Licensed Product; and (B) any clinical data relating to a Licensed Product of which it becomes aware and which has a material implication for the safety of the Licensed Product or which may otherwise materially affect the regulatory treatment or pathway of any product candidate utilising the Licensed Technology;

 

(b)

such sub-licence contains legally binding provisions that (A) require that CEPI and its sublicensees shall only sell the Licensed Product in accordance with the definition of Sell, (B) require CEPI to keep proper records and books of account showing the description and price of Licensed Products supplied or put into use by CEPI, the cost of manufacturing and supply of such Licensed Products and any margin obtained by CEPI on sales of such Licensed Products; and (C) permit Vaccitech by itself or through a third party (provided that such third party has entered into legally binding confidentiality obligations to CEPI), upon reasonable prior written notice to CEPI, during normal business hours and not more than once per calendar year, to audit such records and books of account of CEPI to verify CEPI’s compliance with clause 2.2(b)(A); and

 

 

(c)

such sub-licence shall automatically terminate upon termination of this Agreement and, provided that CEPI is not in breach of the terms of its sub-licence, Vaccitech shall, if requested by CEPI, grant CEPI, with effect from the date of termination of this Agreement, a sub-licence under the Licensed Technology in the Field solely of the scope of the CEPI Licence and on materially the same terms (including as to scope of rights under such intellectual property and financial terms) to those contained in such sub-licence, to the extent that Vaccitech is able to grant such a sub-licence.

 

(d)

no sub-licence granted pursuant to this clause 2.2 shall relieve Oxford of its obligations to Vaccitech under this Agreement.

 

2.3

Oxford shall remain fully liable to Vaccitech in respect of any acts or omissions of CEPI, that would, if effected by Oxford, constitute a breach of this Agreement.

 

3.

Head Licence

 

3.1

OUI hereby acknowledges and agrees that, notwithstanding any other provision of the Head Licence:

 

(a)

clauses 2.3, 2.4, 2.5, 8.2, 9, 11, 12.3 (with respect to the termination of sublicenses), 12.5(a) and 13.3 of the Head Licence shall not apply with respect to the licence granted under clause 2.1 or to any sublicense granted pursuant to clause 2.2; and

 

(b)

Vaccitech shall be permitted to disclose the Licensed Technology to Oxford, and Oxford shall be permitted to disclose the Licensed Technology to its sub-licensees, subject to the provisions of this Agreement;

 

(c)

Vaccitech shall not be required to make any payment (whether in royalties, milestone payments or otherwise) to OUI in respect to any amounts received by Vaccitech from Oxford pursuant to this Agreement or in connection with the exercise by Oxford or its sub-licensees of rights granted pursuant to this Agreement; and

 

(d)

Vaccitech is released from and shall not be required to provide any indemnity to OUI or any other party in relation to the use of the Licensed Technology or the commercialisation of Licensed Products by Oxford or its sub-licensees.

 

3.2

OUI hereby acknowledges and agrees that Vaccitech has complied with the requirements of clause 2.1.1 (c)(i) of the Head Licence.

 

3.3

Nothing in this agreement shall affect the intellectual property management provisions as set out in the Head Licence.

 

3.4

Vaccitech hereby acknowledges and agrees that:

 

(a)

nothing in this Agreement shall limit the rights retained by OUI in respect of Non-commercial Use under the Head Licence;

 

(b)

the rights retained by OUI in respect of Non-Commercial Use under the Head License allows Oxford to carry out research activities (including in collaboration with other parties) up to and including the performance of Phase l/ll clinical trials and related activities, and the generation of Licensed Product for research use (but excluding any commercial use or Sale of such Licensed Product)

 

4.

Adverse event information

 

4.1

Oxford shall promptly communicate to Vaccitech in writing: (i) any safety information requested by a regulatory authority in respect of a Licensed Product; and (ii) any clinical data relating to a Licensed Product of which it becomes aware which has a material implication for the safety of the Licensed Technology or which may otherwise materially affect the regulatory treatment or pathway of any product candidate utilising the Licensed Technology.

 

 

4.2

Vaccitech’s sole right under this Agreement to all information provided to it in accordance with clause 4.1 shall be to utilise such information in its regulatory submissions and correspondence with regulatory authorities.

 

5.

Confidentiality

 

5.1

“Confidential Information” shall mean all information of a confidential or proprietary nature disclosed by a Party or its Representatives to the other Party under or in connection with this Agreement, and any information (whether or not technical) disclosed under or in connection with this Agreement that would be regarded as confidential by a reasonable business person.

 

5.2

Each Party undertakes that it shall keep the other Party’s Confidential Information confidential and shall not:

 

(a)

use such Confidential Information except for the purpose of exercising or performing its rights and obligations under this Agreement; or

 

(b)

disclose such Confidential Information in whole or in part to any third party, except as expressly permitted by this clause 5 (or in the case of Vaccitech, as expressly permitted under clause 4.2).

 

5.3

The provisions of this clause shall not apply to any Confidential Information that:

 

(a)

is or becomes generally available to the public (other than as a result of its disclosure by the receiving Party or its Representatives in breach of this clause);

 

(b)

was available to the receiving Party on a non-confidential basis before disclosure by the disclosing Party;

 

(c)

was, is or becomes available to the receiving Party on a non-confidential basis from a person who, to the receiving Party’s knowledge, is not bound by a confidentiality agreement with the disclosing Party or otherwise prohibited from disclosing the information to the receiving Party; or

 

(d)

the Parties agree in writing is not confidential or may be disclosed.

 

5.4

A Party may disclose the other Party’s Confidential Information:

 

(a)

to those of its Representatives who need to know such information for the purpose of exercising or performing its rights and obligations under this Agreement provided that it shall ensure that they comply with this clause 5; and

 

(b)

as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority, provided that, to the extent it is legally permitted to do so, it gives the other Party as much notice of such disclosure as possible.

 

5.5

The provisions of this clause shall continue to apply after the expiry or earlier termination of this Agreement.

 

6.

Warranties and liability

 

6.1

Each Party acknowledges that, in entering into this Agreement, it does not do so in reliance on any representation, warranty, or other provision except as expressly provided in this Agreement, and any conditions, warranties or other terms implied by statute or common law are excluded from this Agreement to the fullest extent permitted by law.

 

6.2

Except in relation to any claims, damages and liabilities arising directly from a breach of this Agreement by Vaccitech and/or the fraud, negligence or wilful misconduct of Vaccitech, Oxford agrees to indemnify Vaccitech from and against any and all claims (including claims for negligence) actions, damages and liabilities asserted by any third- party (each such claim a “Third Party Claim”), which arise from: (a) CEPI’s or its Affiliates’ or sublicensees’, use of the Licensed Technology or Licensed Product (including without limitation any investigational stockpile of the Licensed Product); and (b) Oxford or its sublicensees’ use of the Licensed Technology or Licensed Product pursuant to the rights granted in 2.1 (b) This indemnity will extend to activities carried out by any third parties on behalf of CEPI or CEPI’s Affiliates or sublicensees, or pursuant to any downstream grant of rights or transfer of Licensed Technology or Licensed Product originating from CEPI or its Affiliates or sublicensees.

 

 

6.3

Vaccitech shall provide prompt written notice to Oxford of the assertion or commencement of any Third Party Claim in respect of which it seeks indemnification pursuant to clause 6.2. Oxford (or its appointee) shall have the right to assume the defence and/or settlement of the same and shall not be liable for any settlement made by Vaccitech without Oxford’s consent, provided that Oxford (or its appointee) may not use any defence or agree to any settlement that would materially prejudice Vaccitech. Vaccitech shall:

 

(a)

notify Oxford as soon as possible after becoming aware of the relevant Third Party Claim (or the likelihood of such a claim arising);

 

(b)

promptly provide all assistance and information (including access to documents and personnel) reasonably required by Oxford for the purposes of assessing and handling the Third Party Claim; and

 

(c)

not make any admission of liability, conclude any agreement or make any compromise with any person in relation to such Third Party Claim without the prior written consent of Oxford.

 

6.4

Subject to clause 6.5, the liability of either Party for any breach of this Agreement, in negligence or arising in any other way out of the subject-matter of this Agreement, will not extend to incidental, indirect or consequential damages or loss of profits.

 

6.5

Notwithstanding any other provision of this Agreement, neither Party’s liability under or in connection with this Agreement shall be excluded or reduced to the extent that it arises in respect of the following matters:

 

(a)

for death or personal injury caused by negligence;

 

(b)

for fraud or fraudulent misrepresentation; or

 

(c)

any other liability which may not lawfully be excluded or reduced.

 

7.

Term and termination

 

7.1

This Agreement shall come into force on the Effective Date and, unless terminated earlier in accordance with clause 7.2, shall remain in force until the expiry or termination of the Head Licence.

 

7.2

Vaccitech may terminate this Agreement immediately by giving notice to Oxford if Oxford is in material breach of this Agreement and such breach has not been remedied within a period of [***] from the receipt by Oxford of a notice specifying the breach and requiring its remedy.

 

7.3

On expiry or termination of this Agreement for any reason, all rights and licences granted pursuant to this Agreement shall cease.

 

7.4

The termination or expiry of this Agreement shall be without prejudice to any obligations, rights or liabilities of any of the Parties which have accrued before such termination or expiry.

 

 

8.

General

 

8.1

Amendment. This Agreement may only be amended in writing signed by duly authorized representatives of Oxford, OUI and Vaccitech.

 

8.2

Assignment. Vaccitech shall not assign, transfer, novate, encumber or otherwise deal with the Licensed Technology if such assignment, transfer, novation, encumbrance or dealing would conflict with the rights granted to Oxford under this Agreement, save with Oxford’s prior written consent.

 

8.3

Waiver. No failure or delay on the part of a Party to exercise any right or remedy under this Agreement shall be construed or operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy.

 

8.4

Invalid clauses. If any provision or part of this Agreement is held to be invalid, amendments to this Agreement may be made by the addition or deletion of wording as appropriate to remove the invalid part or provision but otherwise retain the provision and the other provisions of this Agreement to the maximum extent permissible under applicable law.

 

8.5

No agency. Neither Party shall act or describe itself as the agent of the other, nor shall it make or represent that it has authority to make any commitments on the other’s behalf.

 

8.6

Notices. Any notice to be given under this Agreement must be in writing, and be delivered to the other Party by hand or courier. Any notice shall be deemed to have been received on the day of delivery. Until changed by notice given in accordance with this clause, all notices should be addressed as follows:

 

	For Vaccitech:		For Oxford:
	Name:  Dr Thomas Evans		Name:  The Director, Research Services
	Address: Vaccitech Limited, The Schrodinger Building, 2nd Floor, Science Park, Heatley Road, Oxford 0X4 4GE		Address: University Offices, Wellington Square, Oxford 0X1 2JD

 

8.7

Further action. Each Party agrees to execute, acknowledge and deliver such further instruments, and do all reasonable further similar acts, as may be necessary or appropriate to carry out the purposes and intent of this Agreement

 

8.8

Entire Agreement. This Agreement constitutes the entire agreement between the Parties about the subject matter of this Agreement and (in relation to such subject matter) supersedes and extinguishes all earlier understandings and agreements between any of the parties and all earlier representations by any Party.

 

8.9

Third parties. A person who is not a Party has no right to enforce any term of this Agreement.

 

8.10

Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original but all of which together will constitute one document. The Parties may execute this Agreement and any amendment thereto by exchanging signed electronic copies thereof (PDF) and the Parties agree that for the purposes of executing this Agreement copies of signatures will constitute valid signatures,

 

8.11

Law and jurisdiction. This Agreement (and any claim relating to it, its subject matter, its enforceability or its termination, including non-contractual claims) is governed by and construed in accordance with English law and the courts of England and Wales shall have non-exclusive jurisdiction to resolve any such claim.

 

This Agreement has been entered into on the Effective Date.

 

 

SIGNED by for and on behalf of VACCITECH LIMITED		) )	/s/ Tom Evans Tom Evans Director
SIGNED by for and on behalf of THE CHANCELLOR, MASTERS AND SCHOLARS OF THE UNIVERSITY OF OXFORD		) ) ) )	/s/ Dennis Murphy 27 September 2018 Authorised signatory
SIGNED by for and on behalf of OXFORD UNIVERSITY INNOVATION LIMITED		) ) )	/s/ Matthew Perkins Matthew Perkins Director

 

 

SCHEDULE 1 - CEPI LICENCE

 

“CEPI Licence” means:

 

(i)

A non-exclusive, irrevocable (other than as set out in clause 2.2(c) of this Agreement), perpetual, worldwide, fully paid-up licence for the purpose of addressing Increased Outbreak Preparation Needs and/or Outbreaks under the Licensed Technology with the right to grant sub-licences to Develop, Manufacture and Market (where selling and commercial exploitation are limited to Selling) the Licensed Product in the Field for use in the Affected Territory or to treat Healthcare Workers.

 

For clarity, such license:

 

a.

shall include the right to Develop, Manufacture and Sell the Licensed Product in the Field anywhere in the world, provided that all end users of any Licensed Products are in the Affected Territory or are Healthcare Workers.

 

b.

shall exclude the right to sell or otherwise commercially exploit the Licensed Product other than in accordance with the definition for Sell; and

 

c.

shall exclude the right to apply for or obtain any Marketing Approval or any post marketing activities.

 

The licence shall only be sub-licensible to CEPI’s Affiliates and/or to Public Sector Agencies and their appointees and designees for the purpose of accelerating epidemic preparedness for public health applications and for no other purpose.

 

(ii)

The right to Sell, replenish, export or import the investigational stockpile of the Licensed Product, or have any of the foregoing done for it, provided such use is for the purpose of addressing Increased Outbreak Preparation needs and/or Outbreaks and in strict accordance with CEPI’s Mission.

 

In the interpretation of the “CEPI License” (and this Agreement) the following additional definitions apply:

 

“Affected Territory” means a geographic area: (i) where there is an Outbreak; (ii) for which there is an Increased Outbreak Preparation Need; or (iii) any other area CEPI and the parties to the CEPI Agreement agree in writing will be treated as an Affected Territory;

 

“Approved Regulatory Authority” means the EU European Medicines Agency, the US Food and Drug Administration, SwissMedic, Japanese PMDA, Australian Therapeutic Goods Agency, South Korean Ministry of Drug Safety, Health Canada or Singapore Health Sciences Authority and in each case any successor authority, including, if applicable, the UK Medicines & Healthcare products Regulatory Agency;

 

“CEPI’s Mission” is defined with reference to the following activities:

 

(i)

fund, co-fund, co-ordinate and support the development of new vaccines with chosen partners to prevent and contain infectious disease epidemics;

 

(ii)

work with its partners and relevant agencies to ensure the vaccines developed are provided to all populations who need them on an equitable basis; and

 

(iii)

work with its partners and relevant agencies to ensure adequate stockpiles and manufacturing capacity of vaccines developed for epidemic situations;

 

“Develop” or “Development” means, with respect to the Licensed Product, those pre-clinical and clinical vaccine development activities that are necessary or useful to obtain Marketing Approval from at least one Approved Regulatory Authority and in applicable regulatory jurisdictions including stability testing, toxicology, formulation and process development, Manufacturing activities, statistical analysis, pre-clinical and clinical studies, regulatory filing submissions and approval, pharmacovigilance and post-marketing activities, but in all cases excluding the actual application for or obtaining of any Marketing Approval;

 

 

“Healthcare Workers” means any healthcare worker going to an Affected Territory under the direction of one or more Public Sector Agencies in order to help address a public healthcare issue regardless of the fact that they may, from time to time, be located outside of the geographic area of the Affected Territory or may not yet have arrived in the Affected Territory;

 

“Increased Outbreak Preparation Need” means, when having considered all reasonably accessible and relevant information including epidemiological data, travel and migration patterns and the likely availability of other products or product candidates in the Field and following consultation with the CEPI scientific advisory board and/or CEPI’s Board of Directors, CEPI determines that there is a heightened need for the Licensed Product, and that steps should be taken to prepare for such need;

 

“Manufacturing” or “Manufacture” means the production, subject to GMP, of Licensed Product or constituents thereof, including active ingredients, excipients, adjuvants, preservatives or other additives, for use in clinical trials or finished dosage form of the Licensed Product as well as the fill and finish or packaging;

 

“Marketing Approval” means a marketing authorisation granted by the European Commission in accordance with the procedure for the authorisation and supervision of medicinal products for human use set forth in Regulation (EC) No. 726/2004, or any Approved Regulatory Authority and any corresponding regulatory approval necessary to manufacture, use, sell or store a Licensed Product in any other country or jurisdiction, but not including pricing and reimbursement approvals;

 

“Marketing” or “Market” means, in relation to the Licensed Product, importing, exporting, marketing, selling, promoting, distributing or otherwise utilising or commercially exploiting the Licensed Product, but in all cases excluding applying for or obtaining any Marketing Approval.

 

“Outbreak” means where there has been a material increase in the number of cases of people infected in the Field in a particular locality, region or territory that has: (i) been declared a Public Health Emergency of International Concern by WHO; (ii) been declared a public health emergency on a national or regional scale by one or more national governments; or (iii) been declared a public health emergency by CEPI following consultation with the CEPI scientific advisory board and/or CEPI’s Board of Directors;

 

“Public Sector Agency” means a public government or a government department or agency or a recognised not-for-profit organisation or entity, such as registered charities or registered faith-based organisations, including:

 

(a)

government or department or agency thereof, including ministries of health;

 

(b)

intergovernmental organisations such as the United Nations, its specialised agencies including the World Health Organisation and its programmes or funds such as the United Nations Children’s Fund;

 

(c)

not-for-profit organisations or entities organised under the laws of a government or department or agency thereof, such as Medecins Sans Frontieres and faith-based organisations; and

 

(d)

not-for-profit organisations or foundations that are funded by governments or other not-for-profit organisations such as the World Bank, UNITAID or the US Agency for International Development or the GAVI Alliance, but specifically excluding hospitals and clinics who wish to purchase the Product directly for their own use.

 

The term “Public Sector Agency” excludes any military organisations except for: (a) any military organisation operating in the area affected or likely to be affected by the Outbreak or Increased Outbreak Preparation Need at the date the Affected Territory is declared; and (b) any military personnel providing healthcare or healthcare related services to the population affected by or at risk of the Outbreak or Increased Outbreak Preparation Need;

 

“Sell”, “Sale” and or “Selling” means sale to Public Sector Agencies on a “cost plus” basis (where “cost plus” means the cost of manufacturing and supply plus a reasonable margin of [***] on such cost reflecting the limited volume of manufacture and episodic demand), and for the purposes of this definition, the pre-margin “cost” element shall be determined in accordance with the formula for calculating the production economics cost of goods set by the Bill and Melinda Gates Foundation but specifically excluding from such formula any funding provided to the manufacturer or supplier by any charitable or other public sources, including CEPI and its own funders.

 

 

SCHEDULE 2 - THE HEAD LICENCE

 

[Redacted copy of the Head Licence to be attached]

 

 

 

Exhibit 10.7

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

VACCITECH LIMITED   and   VACCITECH ONCOLOGY LIMITED 14 November 2018

LICENCE AGREEMENT

 

 

Index

 

Clause No.        Page No.

 

THIS LICENCE AGREEMENT (the “Agreement”) is made on 14 November 2018 (the “Effective Date”)

 

BETWEEN:

 

(1)

VACCITECH LIMITED incorporated and registered in England with company number 9973585 whose registered office is at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, 0X4 4GE (the “Licensor”); and

 

(2)

VACCITECH ONCOLOGY LIMITED incorporated and registered in England with company number 11655405 whose registered office is at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, 0X4 4GE (the “Licensee”).

 

BACKGROUND

 

(A)

The Licensor has agreed to grant, and the Licensee has agreed to take, a licence of certain patent rights and know-how on the terms set out in this agreement.

 

AGREED TERMS

 

1.

Definitions and Interpretation

 

1.1

In this agreement, the following words and expressions have the following meanings:

 

(a)

“Business Day” means a day other than a Saturday, Sunday or public holiday in England;

 

(b)

“Confidential Information” means all information in whatever form (including in written, oral, visual or electronic form or on any magnetic or optical disk or memory and wherever located) relating to the research, development, data and/or results, pharmaceutical or biologic candidates and product information, inventions, works of authorship, processes, methodologies, the business, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, and advertising and other promotional materials, future projects, business development or planning, commercial relationships and negotiations, customers, products, affairs and finances and employees of a Party or its Affiliates for the time being confidential to such Party and/or its Affiliates and trade secrets including, technology, technical data and Know-How relating to the business of such Party or its Affiliates or any of their suppliers, customers, agents, distributors, shareholders, management or business contacts, whether or not such information is marked or identified as confidential, including information relating to the terms of this agreement;

 

(c)

“Improvement” means any improvement, enhancement or modification to the Licensed Technology;

 

(d)

“Intellectual Property Rights” means patents (including rights of priority), copyright and related rights, trademarks, trade names and rights in domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, rights in designs, rights in computer software, database rights, topography rights, rights in confidential information, rights in Know-How and any other intellectual property rights, in each case whether registered or unregistered and including all applications (or rights to apply) for the same;

 

(e)

“OUI” means Oxford University Innovation Limited;

 

 

(f)

“Know-How” means any information or material, whether proprietary or not and whether patentable or not, which is not in the public domain including inventions, discoveries, data, formulae, processes, cell-lines and other biological materials, methodology, specifications, procedures for experiments and tests, procedures for manufacturing, results of experiments, research and development, laboratory records, clinical trial data, case reports, data analysis and summaries;

 

(g)

“Licensed Know-How” means the Know-How identified at schedule 2, and all other Know-How provided by the Licensor to the Licensee from time-to-time.

 

(h)

“Licensed Materials” means the Original Materials and any and all materials that Licensor provides to Licensee under or in connection with this agreement, and

 

(i)

all constructs, strains, portions, progeny or unmodified derivatives directly or indirectly obtained from or as a result of the use of the Original Materials;

 

(i)            all improvements and modifications to any of the foregoing; and

 

(ii)           all materials containing or incorporating any of the foregoing;

 

(j)

“Licensed Patents” means the patents and patent applications, short particulars of which are set out in schedule 1, and all:

 

(i)            divisionals, continuations, and continuations-in-part that claim priority to any of the foregoing;

 

(ii)           reissues, renewals, extensions, or additions to any of the foregoing; and

 

(iii)          granted patents issuing from any of the foregoing;

 

(k)

“Licensed Products” means any product which:

 

(i)            falls within the scope of any of the claims of any of the Licensed Patents; or

 

(ii)           is made, developed or used in accordance with, embodies, incorporates or utilises, any of the Licensed Technology;

 

(l)

“Licensed Technology” means the technology embodied in the Licensed Patents, the Licensed Know-How and/or the Licensed Materials;

 

(m)

“Original Materials” means the materials described in schedule 3;

 

(n)

“Representatives” means, in relation to a party, its employees, officers, representatives and advisers; and

 

(o)

“Territory” means worldwide.

 

1.2

In this agreement:

 

(a)

references to parties and clauses are to the parties and clauses of this agreement;

 

(b)

references to persons include all forms of legal entity including an individual, company, body corporate, unincorporated association and partnership and any reference to any party who is an individual is also deemed to include their respective legal personal representative(s);

 

(c)

the words “include”, “including” and “in particular” are to be construed as being by way of illustration or emphasis only and are not to be construed so as to limit the generality of any words preceding them;

 

 

(d)

the words “other” and “otherwise” are not to be construed as being limited by any words preceding them;

 

(e)

headings are used for convenience only and do not affect its interpretation; and

 

(f)

a reference to the singular includes a reference to the plural and vice versa and a reference to any gender includes a reference to all other genders.

 

2.

Grant of Licence

 

2.1

In consideration of the sum of £1 (receipt of which the Licensor expressly acknowledges) and the execution by the Licensee of the deed of covenant with OUI as provided in schedule 4, the Licensor hereby grants to the Licensee a non-exclusive licence (together with the right to grant sub-licences through multiple tiers of sub-licensees, except that Licensee shall not have the right to grant any sub-licences in respect of any of the Licensed Technology that is licensed to the Licensor by OUI without OUI’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed) to use the Licensed Technology (and all Intellectual Property Rights therein) solely to the extent necessary or useful for the manufacture, use, sale or other commercialisation of Licensed Products in the Territory.

 

3.

Provision of further Know-How

 

3.1

The Licensor shall make available to the Licensee such further Know-How relating to the manufacture of the Licensed Products as the Licensor is at liberty to disclose and, in the opinion of the Licensor, is reasonably necessary or useful for such manufacture.

 

3.2

The Know-How supplied by the Licensor pursuant to clause 3.1 shall be used by the Licensee only for the purpose of the manufacture of Licensed Products in the Territory and shall be subject to the provisions of clause 5 (Confidentiality).

 

3.3

The Know-How supplied by the Licensor under clause 3.1 shall, where it has been identified by describing and recording it when provided to the Licensee, be deemed to be part of the Licensed Technology.

 

3.4

Nothing in this agreement shall constitute any representation or warranty that any Know- How supplied to the Licensee pursuant to clause 3.1 is accurate, up to date, complete, or relevant to the manufacture of the Licensed Products.

 

4.

Improvements

 

4.1

If the Licensor makes, devises, discovers, or otherwise acquires rights in, any Improvement, the Licensor shall, to the extent that it is not prohibited by law or by any obligation to any other person, promptly notify the Licensee in writing giving details of the Improvement, and shall, if the Licensee so requests, provide such further information as is reasonably required to be able to evaluate the Improvement effectively.

 

4.2

Information provided by the Licensor to the Licensee under clause 4.1 shall be subject to the provisions of clause 5 (Confidentiality) and all such Improvements shall be deemed to be part of the Licensed Technology.

 

5.

Confidentiality

 

5.1

The provisions of this clause shall not apply to any Confidential Information that:

 

(a)

is or becomes generally available to the public (other than as a result of its disclosure by the Licensee or its Representatives in breach of this clause);

 

 

(b)

becomes available to the Licensee on a non-confidential basis from a person who, to the Licensee’s knowledge, is not bound by a confidentiality agreement with the Licensor or otherwise prohibited from disclosing the information to the Licensee;

 

(c)

the parties agree in writing is not confidential or may be disclosed;

 

(d)

is developed by or for the Licensee independently of the Licensor’s Confidential Information.

 

5.2

The Licensee shall keep the Licensor’s Confidential Information confidential and shall not:

 

(a)

use such Confidential Information except for the purpose of exercising or performing its rights and obligations under or in connection with this agreement (Permitted Purpose); or

 

(b)

disclose such Confidential Information in whole or in part to any third party, except as expressly permitted by clause 5 (Confidentiality).

 

5.3

The Licensee may disclose the Licensor’s Confidential Information to those of its Representatives who need to know such Confidential Information for the Permitted Purpose, provided that:

 

(a)

it informs such Representatives of the confidential nature of the Confidential Information before disclosure; and

 

(b)

it procures that its Representatives shall, in relation to any Confidential Information disclosed to them, comply with the obligations set out in this clause as if they were a party to this agreement, and at all times, it is liable for the failure of any Representatives to comply with the obligations set out in this clause.

 

5.4

The Licensee may disclose the Licensor’s Confidential Information to the extent such Confidential Information is required to be disclosed by law, by any governmental or other regulatory authority or by a court or other authority of competent jurisdiction provided that, to the extent it is legally permitted to do so, it gives the Licensor as much notice of such disclosure as possible and, where notice of disclosure is not prohibited and is given in accordance with this clause 5.4, it takes into account the reasonable requests of the Licensor in relation to the content of such disclosure.

 

5.5

The Licensor reserves all rights in its Confidential Information. No rights or obligations in respect of such Confidential Information other than those expressly stated in this agreement are granted to the Licensee, or to be implied from this agreement.

 

5.6

On termination of this agreement, the Licensee shall:

 

(a)

destroy or return to the Licensor all documents and materials (including the Licensed Materials and any copies) containing, reflecting, incorporating or based on the Licensor’s Confidential Information and/or Licensed Materials and make no further use of any such information or materials;

 

(b)

erase all the Licensor’s Confidential Information from its computer and communications systems and devices used by it, including such systems and data storage services provided by third parties (to the extent technically and legally practicable); and

 

(c)

certify in writing to the Licensor that it has complied with the requirements of this clause, provided that it may retain documents and materials containing, reflecting, incorporating or based on the Licensor’s Confidential Information to the extent required by law or any applicable governmental or regulatory authority.

 

5.7

The Licensee acknowledges that the Licensor must provide a copy of this Agreement to OUI and consents to such disclosure.

 

 

5.8

The provisions of this clause 5 (Confidentiality) shall continue to apply after the expiry or earlier termination of this agreement.

 

6.

Duration and termination

 

6.1

This agreement shall commence on the Effective Date and, unless terminated earlier in accordance with clause 6.2, shall remain in force until the later of: a) expiry of all the Licensed Patents; and b) the Licensed Know-How ceasing to be secret and substantial.

 

6.2

Either Party may terminate this agreement at any time by written notice to the other Party (“Other Party”), such notice to take effect as specified in the notice:

 

(a)

if the Other Party is in material breach of a material provision of this agreement and, in the case of a breach capable of remedy within [***], the breach is not remedied within [***] of the Other Party receiving notice specifying the breach and requiring its remedy; or

 

(b)

if: (A) the Other Party becomes insolvent or unable to pay its debts as and when they become due; or (B) an order is made or a resolution is passed for the winding up of the Other Party (other than voluntarily for the purpose of solvent amalgamation or reconstruction); or (C) a liquidator, administrator, administrative receiver, receiver, or trustee is appointed in respect of the whole or any part of the Other Party’s assets or business; or (D) the Other Party makes any composition with its creditors; or (E) the Other Party ceases to continue its business; or (F) as a result of debt and/or maladministration the Other Party takes or suffers any similar or analogous action in any jurisdiction.

 

6.3

The Licensee acknowledges that certain of the Licensed Technology is licensed to the Licensor by OUI and further acknowledges and agrees in the event that the Licensor’s licence from OUI is terminated that the Licensor shall terminate this agreement in respect of any of the Licensed Technology that is licensed to the Licensor by OUI.

 

6.4

On termination of this agreement for any reason and subject to any express provisions set out elsewhere in this agreement:

 

(a)

all rights and licences granted pursuant to this agreement shall cease;

 

(b)

the Licensee shall cease all exploitation of the Licensed Technology, except insofar as any of the Licensed Know-How has become publicly available, unless this is or was as a consequence of the default of the Licensee;

 

6.5

Any provision of this agreement that expressly or by implication is intended to come into or continue in force on or after termination or expiry of this agreement shall remain in full force and effect.

 

6.6

Termination or expiry of this agreement shall not affect any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination or expiry, including the right to claim damages in respect of any breach of the agreement which existed at or before the date of termination or expiry.

 

7.

Notices

 

7.1

Any notice or written communication given under or in relation to this agreement shall be given in writing in English and shall be delivered by hand or sent by special delivery post in permanent form to the other Party at its address set out above or to such other address as it has previously notified to the sending Party in writing. Any such notice or written communication shall be deemed to have been served when actually received except that if that time is after 5.30 p.m. on a Business Day and before 9.00 a.m. on the next Business Day it shall be deemed to have been served at 9.00 a.m. on the second of such Business Days.

 

 

8.

Miscellaneous

 

8.1

Amendment. This agreement may only be amended in writing signed by duly authorized representatives of the Licensee and the Licensor.

 

8.2

Assignment.

 

(a)

Subject to clause 8.2(b), neither party may assign, mortgage, charge, or otherwise transfer any rights or obligations under this agreement without the prior written consent of the other party.

 

(b)

With written notice to the other party, either party may without consent assign and transfer all its rights and obligations under this agreement to any person to whom it transfers all or substantially all of its assets or business to which this agreement relates, provided that the assignee undertakes to the other party to be bound by and perform the obligations of the assigning party under this agreement.

 

8.3

Waiver. No failure or delay on the part of either party to exercise any right or remedy under this agreement shall be construed or operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy preclude the further exercise of such right or remedy.

 

8.4

Invalid clauses. If any provision or part of this agreement is held to be invalid, amendments to this agreement may be made by the addition or deletion of wording as appropriate to remove the invalid part or provision but otherwise retain the provision and the other provisions of this agreement to the maximum extent permissible under applicable law.

 

8.5

No agency. Neither party shall act or describe itself as the agent of the other, nor shall it make or represent that it has authority to make any commitments on the other’s behalf.

 

8.6

Further assurance. Each party agrees to execute, acknowledge and deliver such further instruments, and do all reasonable further similar acts, as may be necessary or appropriate to carry out the purposes and intent of this agreement.

 

8.7

Entire agreement. This agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. Each party agrees that it shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation based on any statement in this agreement.

 

8.8

Third parties. No one other than a party to this agreement, their successors and permitted assignees, shall have any right to enforce any of its terms. Notwithstanding the foregoing, OUI may enforce the provisions of clause 2.1 of this Agreement as a third party beneficiary.

 

8.9

Counterparts. This agreement may be executed in any number of counterparts, each of which is an original but all of which together will constitute one document.

 

9.

Governing law and jurisdiction

 

9.1

This agreement (and any dispute, claim or issue arising out of or in connection with it, its subject matter, its enforceability or its termination (including non-contractual claims)) is to be governed by and construed in accordance with English law.

 

9.2

Each of the parties hereby submits to the non-exclusive jurisdiction of the English Courts.

 

This agreement has been entered into on the date stated at the beginning of it.

 

 

Signed by for and on behalf of VACCITECH LIMITED	) ) )	Tom Evans /s/ Tom Evans
Signed by for and on behalf of VACCITECH ONCOLOGY LIMITED	) ) )	Andrew McLean /s/ Andrew McLean

 

 

SCHEDULE 1

 

Licensed Patents

 

Application 1 - [***] (ChAdOxl)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Application 2 - [***] (ChAdOx2)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
Application 3 - [***] (Long promoter)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]
Application 4 - [***] (MVA expression system)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]

 

 

SCHEDULE 2

 

Licensed Know-how

 

[***].

 

 

SCHEDULE 3

 

Original Materials

 

 

SCHEDULE 4

 

DEED OF COVENANT

 

Oxford University Innovation Limited
University Offices,
Wellington Square,
Oxford 0X1 2JD,
England

 

Date: 6 December 2018

 

Dear Sirs,

 

Sub-Licence between Vaccitech Limited (“Vaccitech”) and Vaccitech Oncology Limited dated 14 November 2018 (the “Sub-Licence”)

 

As part consideration for the grant of a sub-licence from Vaccitech to use the Licensed Patents provided in Appendix 1, the Sub-Licensee hereby covenants to Oxford University Innovation Limited (OUI) and OUI covenants with the Sub-Licensee that:

 

1.

should the head licence between Vaccitech and OUI be terminated for whatever reason, OUI and the Sub-Licensee shall enter into a direct licence containing the same obligations and liabilities as set forth in the Sub-Licence and the Sub-Licensee will pay all amounts due and payable under the Sub-Licence to OUI;

 

2.

should the Sub-Licensee wish to further sub-licence the Licensed Technology where OUI has consented to the Sub-Licence including the right to do so, it shall procure that any sub-sub-licensee enters into a Deed of Covenant with OUI in a form substantially similar to this Deed of Covenant;

 

3.

OUI shall have the right, during the term of the Sub-Licence, through an independent certified accountant appointed by OUI (the “Auditor”), to audit all accounts on at least [***] written notice no more than once each calendar year for the purpose of determining the accuracy of the royalty reports and payments. The Auditor shall be:

 

a.

permitted to enter the principal place of business of the Sub-Licensee upon reasonable notice to inspect such records and accounts;

 

b.

entitled to take copies of or extracts from such records and accounts;

 

c.

given all other information by the Sub-Licensee as may be necessary or appropriate to enable the amount of royalties payable to be ascertained including the provision of relevant records; and

 

d.

shall be allowed access to and permitted to conduct interviews of any sales, engineering or other staff of the Sub-Licensee in order to verify the accuracy of the records and accounts and the accuracy of any royalty statements provided to Vaccitech.

 

If on any such audit a shortfall in payments of greater than [***] is discovered by the Auditor in respect of the audit period, the Sub-Licensee shall pay the audit costs of OUI.

 

 

SIGNED AS A DEED by	Andrew McLean /s/ Andrew McLean
Vaccitech Oncology Limited in the presence of:-
Signature of Witness:	/s/ Graham Griffiths
Name of Witness:	Graham Griffiths
Address:
SIGNED AS A DEED by	/s/ Matthew Perkins
OXFORD UNIVERSITY INNOVATION LIMITED in the presence of:-
Signature of Witness:	/s/ Steven Bayliss
Name of Witness:	Steven Bayliss
Address:

 

Appendix 1

 

Licensed Patents

 

Application 1 - [***] (ChAdOxl)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Application 2 - [***] (ChAdOx2)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
Application 3 - [***] (Long promoter)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]
Application 4 - [***] (MVA expression system)
Application serial No.	Status	Patent/Publication No.
[***]
[***]
[***]
[***]

 

 

 

Exhibit 10.8

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT H\AVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) THE REGISTRANT CUSTOMARILY AND ACTUALLY TREATS THAT INFORMATION AS PRIVATE OR CONFIDENTIAL.

 

Private & Confidential

 

	Cancer Research UK
	Clinical Development Partnerships
	Clinical Trial and Option Agreement
	Vaccitech Oncology Limited
	and
	Cancer Research Technology Limited
	and
	Cancer Research UK

 

Private & Confidential

 

Cover Sheet

 

 

The Company, the Agent and the Clinical Trial

 

Start Date	16 December 2019
Company	VACCITECH ONCOLOGY LIMITED (“VOLT”), a company registered in England and Wales under number 11655405 with registered office at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, OX4 4GE
Agent	ChAdOx-MVA cancer vaccine to induce CD8+ T cells against MAGE-type antigens known as VTP-600 and comprising:   ·     Chimpanzee Adenovirus Oxford 1 (ChAdOx1) encoding full length MAGE-A3 and NY-ESO-1 antigens as a fusion protein,   ·     Modified Vaccinia Ankara (MVA) encoding full length MAGE-A3, and   ·     MVA encoding full length NY-ESO-1.
Summary of Proposed Protocol	A first in human phase l/lla trial to investigate the therapeutic effect of ChAdOxI and MVA vaccines against MAGE-A3 and NY-ESO-1 in combination with standard of care chemotherapy and anti-PD1 checkpoint inhibitor in stage 3 and 4 non-small cell lung carcinoma (NSCLC) patients. Patients with advanced NSCLC naïve to anti-PD1 therapy will be recruited to receive standard of care (SoC) therapy, consisting of a PD1 inhibitor and chemotherapy. After 2 cycles of SoC, patients will be randomised (non-blinded) with 40 to receive the prime/boost vaccine regimen and 40 to receive no vaccine. Patients in the vaccine arm who are still receiving SoC therapy may receive a second prime/boost.   Also, please see Schedule 4
Project Leaders	Company Project Leader	[***]
	Charity Project Leader	[***]

 

Know how, materials and other intellectual property

 

Agent Know How	·         [***]  ·         [***]  ·         [***]  ·         [***]  ·         [***]  ·         [***]  ·         [***]
Agent Materials	GMP Agent Materials   ChAdOxI :MAGE-A3-NY-ESO-1 fusion protein   MVA:MAGE-A3   MVA:NY-ESO-1

 

Private & Confidential

 

Agent Patents	[***]
	[***]	[***]	[***]	[***]
	[***]
	[***]
	[***]
	[***]
	[***]	[***]	[***]	[***]
	[***]
	[***]
	[***]
	[***]
	[***]	[***]	[***]	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]
	[***]	[***]	[***]	[***]
	PCT/EP2019/070555	[***]	[***]	[***]
Back-Ups	There are no other agents in development by the Company directed to the same target molecule as the Agent at the Start Date

 

Private & Confidential

 

Third Party IP	Description of IP licensed to Company related to the Agent	Details of Third Party Agreement title; parties; date of agreement
	[***]	Licence Agreements:   1.    Head licence from [***] to Vaccitech Limited (“Vaccitech”) dated and effective [***]; and   2.    Sub-licence from Vaccitech to [***] dated [***]and effective [***].
	[***]	Licence Agreement:   1.    Licence from [***] dated and effective [***].
	HEK293 TetR Cell Line	1.    Head licence from [***]to Vaccitech Limited dated [***] and effective [***], as amended and restated on[***]; and   2.    Sub-licence from Vaccitech to [***] dated [***] and effective [***].

 

Payments

 

Box
1	Licence Fee	[***]
2	Milestone Event	Milestone Payment
	Clinical Milestone Events
	[***]	[***]
	Regulatory Milestone Events
	[***]	[***]
	Commercial Milestone Events
	[***]	[***]
3	Pre Ph II Sub-Licence Revenue Share*	twenty percent (20%)
4	Post Ph II Sub-Licence Revenue Share *	[***]
5	Post Ph III Sub-Licence Revenue Share *	five percent (5%)
6	Royalty ** (on Net Sales of Licensed Products)	[***]

 

*       in the case VOLT is still a single-asset company at the time of a sale or merger, the Sub-Licence Revenue Share also applies to the revenue of a sale or merger. If VOLT at the time of the sale has more than one project, which is unrelated to the Agent and the Clinical Trial data, the share to CRT will be reduced by a reasonable amount, taking into account the number of other assets and their stage of development.

 

**       [***].

 

Private & Confidential

 

Signature Page

 

Upon signature of this Cover Sheet by all Parties, an agreement will be formed with effect from the Start Date on the terms and conditions of this Cover Sheet and Cancer Research UK’s Clinical Trial and Option Agreement Terms and Conditions (including Schedules 1, 2, 3, 4 and 5 of those terms and conditions) (this “Agreement”).

 

This Cover Sheet is signed below by a representative of each Party authorised to enter into this Agreement:

 

SIGNED and validly executed on behalf of

 

Vaccitech Oncology Limited

/s/ William Enright

Signature

William Enright

Name

CEO, Director

Position (authorised signatory)

Cancer Research UK

/s/ Nigel Blackburn

Signature

Nigel Blackburn

Name

Director

Position (authorised signatory)

Cancer Research Technology Limited

/s/ Tony Hickson

Signature

Tony Hickson

Name

Chief Business Officer

Position (authorised signatory)

 

Private & Confidential

 

Cancer Research UK
Clinical Trial and Option Agreement
Terms and Conditions

 

 

Table of Contents

 

Part A : Performance of the Clinical Trial		2
1	Clinical Trial	2
2	Information sharing	3
3	Company support for the Clinical Trial	5
4	Responsibilities for the Clinical Trial	7
Part B : Rights to Results, IP and information		7
5	Rights to perform the Clinical Trial	7
6	The Results of the Clinical Trial	7
7	The Company’s Option to the Results	8
8	Agent Patents	9
9	Rights to Agent IP	9
10	Use of information	10
11	Publications	12
Part C : Allocation of risk; Term; and General		13
12	Liability	13
13	Indemnification	13
14	Term and termination	15
15	Consequences of termination	15
16	General	18
Schedule 1		22
Schedule 2		29
Schedule 3		37
Schedule 4		44
Schedule 5		45
Glossary		46

 

Private & Confidential

 

Cancer Research UK
Clinical Trial and Option Agreement
Terms and Conditions

 

Between

 

 

(1)

Vaccitech Oncology Limited, a company registered in England and Wales under number 11655405 with registered office at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, OX4 4GE (the “Company”);

 

(2)

Cancer Research UK, a company registered under number 4325234, and charity registered under number 1089464, in England and Wales with registered office at 2 Redman Place, London, E20 1JQ, England (the “Charity”); and

 

(3)

Cancer Research Technology Limited, a company incorporated in England with number 1626049 with registered office at 2 Redman Place, London, E20 1JQ, England (“CRT”)

 

each a “Party” and, together, the “Parties”.

 

Background

 

 

(A)

The Company is a biopharmaceutical development company. It has been licensed exclusively and non- exclusively and acquired certain materials and know how, and controls certain intellectual property rights, relating to the Agent.

 

(B)

The Charity’s charitable objects are to protect and promote the health of the public in particular by research into the nature, causes, diagnosis, prevention, treatment and cure of cancer. CRT is an oncology focused research and development company that is wholly-owned by the Charity.

 

(C)

The Charity runs a ‘Clinical Development Partnership’ (CDP) scheme under which companies may apply to have the Charity fund and sponsor a clinical trial to investigate the use of an agent as an oncology therapeutic.

 

(D)

The Parties believe the Agent may be useful in the treatment of cancer. The Company has successfully applied under the CDP scheme to have the Charity fund and sponsor a clinical trial of the Agent.

 

(E)

To support the Company’s efforts to develop and commercialise the Agent, the Company will have an option to take a licence to the results of the Charity’s clinical trial. If the Company does not exercise that option, the Company will, as applicable, assign or license to CRT its rights in and to the Agent and grant to CRT an exclusive and a non-exclusive licence under certain other related rights of the Company, so that CRT may develop and commercialise the Agent further, on a revenue sharing basis, for the benefit of cancer patients.

 

(F)

The Parties wish to collaborate with one another on the terms and conditions set out in this Agreement to enable those research, development and commercialisation activities to take place.

 

Private & Confidential

 

Note:

Capitalised terms used in this Agreement have the meaning given to them in the Glossary, and the interpretation provisions in the Glossary apply, unless the context requires otherwise.

 

Agreed Terms

 

 

Part A: Performance of the Clinical Trial

 

1

Clinical Trial

 

1.1

The Charity will use reasonable endeavours to design, prepare, carry out and sponsor a clinical trial to investigate the clinical effect of the Agent (the “Clinical Trial”), and to do so in accordance with any applicable Clinical Trial Legislation provided that the Side Letters are executed within [***] of the Start Date. The term, “Clinical Trial”, includes any pre-clinical studies the Charity performs in support of that clinical trial.

 

1.2

Scope and Protocol

 

1.2.1

The Charity will prepare and draft the protocol that will apply to clinical activities to be performed under this Agreement based on the summary set out in the Cover Sheet (the “Protocol”). The Charity will consult with the Company on the content and scope of the Protocol and amendments to it, and consider in good faith any comments the Company provides on drafts of the Protocol. Should the Charity decide at its sole discretion not to introduce any changes recommended by the Company, the Charity will provide an explanation for that decision to the Company as soon as practicable.

 

1.2.2

The Charity will provide the Company with a copy of the Protocol, and any amendments [***].

 

1.2.3

If the Charity determines reasonably that the Protocol should be amended on an expedited basis for ethical, safety or data integrity reasons, it may amend the Protocol without consulting the Company but afterwards will notify the Company of the amendments made as soon as is practicable. Should the Charity make any such amendments without consulting the Company it will provide a comprehensive explanation for those amendments at the time it notifies the Company.

 

1.3

The Charity will prepare an operational plan detailing the intended actions and timelines for delivery and execution of the clinical activities to be performed under this Agreement (the “Project Plan”). The proposed Project Plan, which shall be consistent with the Summary of Proposed Protocol detailed on the Cover Sheet, shall be an initial Project Plan subject to change under the Charity’s obligations as a sponsor of a Clinical Trial. The Project Plan will be sent to the Joint Project Team (defined more fully at clause 2.2) for its review and approval in accordance with clause 2.2.9 within [***] of the Start Date.

 

1.4

The Charity relies on a network of academic research institutes, hospitals and Third Party Service Providers to perform clinical trials, and may subcontract performance of all or part of the Clinical Trial on terms consistent with those set out in this Agreement.

 

1.5

In certain circumstances, the Parties may agree that the Company will carry out additional activities at its own cost to support the Clinical Trial. If that is the case, the Parties will record in writing a detailed description of those activities and resulting Materials and Know How to be provided to the Charity, together with any deadlines by which those activities are to be performed or Materials or Know How provided.

 

Private & Confidential

 

2

Information sharing

 

2.1

Project Leaders

 

2.1.1

The Project Leaders will be members of the joint project team (“JPT”) set up under clause 2.2 and will be the primary points of contact between the Parties for all matters related to the Clinical Trial.

 

2.1.2

The Project Leaders will share information reciprocally between the Parties including updates concerning among other things, progress of the Clinical Trial and issues arising from it, timing and content of publications, and the status of the Agent Patents. The Project Leaders are expected to meet with one another in person and/or by telephone or videoconference at least every [***] during the Clinical Trial in accordance with the procedures of the JPT set out under clause 2.2 below.

 

2.2

Joint Project Team

 

2.2.1

With effect from the Start Date, a JPT will be formed within [***] of signature to oversee and discuss the activities regarding the Clinical Trial. In particular, the JPT will discuss high level risks and agree mitigation strategies to avoid issues where possible. Should issues arise, the JPT will resolve those potential and actual issues and disputes relating to the performance of the Clinical Trial. The JPT will also discuss and agree on the form and content of safety data transfers under the Clinical Safety Information Exchange Template set out under Schedule 3, a strategy for the publication of Results (including, where appropriate, for the joint publication of Results) and review of Data Packages.

 

2.2.2

The JPT will comprise six (6) members (“JPT Members”) in total, including the Project Leaders of each Party, with three (3) appointees from each of the Charity and the Company. Each of the Charity and the Company will be entitled to remove any JPT Member appointed by it and to appoint any person to fill a vacancy arising from the removal or retirement of such JPT Member. The removing Party will give the other Party prior written notice of any proposed changes in the identity of any of their JPT Members.

 

2.2.3

The JPT will meet as soon as reasonably practicable following its establishment pursuant to clause 2.2.1 and thereafter will hold regular meetings at intervals of approximately eight (8) weeks throughout the Clinical Trial, in each case at dates and times to be mutually agreed. It is understood and agreed by the Parties that in order to ensure that the Clinical Trial is undertaken optimally that the JPT will need to operate on a highly proactive and responsive basis and consider and make decisions on an ad-hoc basis as required from time to time and as appropriate the Parties will use their reasonable endeavours to ensure that JPT Members can meet at short notice where necessary.

 

2.2.4

Each of the Charity and the Company may invite observers (including its employees and third parties) to meetings of a JPT. A Party inviting any such observer will ensure that the other Party is advised at least [***] prior to the relevant meeting of the identity of the observer and that such observers are bound by obligations of confidentiality no less onerous than those imposed by this Agreement. Such observers will not be counted towards any assessment of quorum for the purpose of clause 2.2.6 and will not be entitled to participate in any decision making or voting.

 

Private & Confidential

 

2.2.5

Meetings of the JPT may be held (at the request of either the Charity or the Company) by teleconference or other electronic means. In the case of meetings at which JPT Members are physically present the venue for all meetings will, unless otherwise agreed by the Project Leaders, alternate between the hosting Party in Oxford or London. Each Party will bear all travel and subsistence costs incurred by their JPT Members in connection with their attendance at meetings of the JPT.

 

2.2.6

The quorum for meetings of each JPT will be at least one (1) JPT Member appointed by each of the Charity and the Company provided however that each meeting must be formally called and notified to all JPT Members together with an agenda that accurately identifies all items (including any other business “AOB”) to be discussed or decided at that meeting.

 

2.2.7

Decisions of the JPT will be made by unanimous agreement of the Members present (in person or via dial in). Should it prove impossible to obtain such agreement, it will be referred for resolution to the Director of the Centre for Drug Development for the Charity and a Director of the Company. For the avoidance of doubt, any decision relating to the safe conduct of the Clinical Trial will be solely the Charity’s.

 

2.2.8

The draft minutes of each meeting of the JPT will be prepared by the Project Leader of the host Party and be sent to each of the JPT Members for review and finalisation within [***] after each meeting.

 

2.2.9

The Charity will use reasonable endeavours to take reasonable actions proposed by the Company through the JPT provided that (i) any such actions can be implemented without an increase in the Charity’s budget for the Clinical Trial and (ii) the Charity retains the final decision making authority over all matters necessary for the safe, proper and/or lawful conduct of the Clinical Trial or the health or safety of any Clinical Trial Subject, and subject to (i) and (ii) above the Charity shall not unreasonably refuse to complete any action agreed by the JPT or otherwise resolved according to the process provided in clause 2.2.7.

 

2.2.10

The JPT will not have authority to vary or amend the terms of this Agreement or to require any Party to incur any expenditure additional to that contemplated expressly by this Agreement.

 

2.3

Progress Reports

 

2.3.1

The Charity will prepare and provide to the Company a report relating to the progress of the Clinical Trial that includes updates on progress against planned timelines, changes in the Project Plan, notices of clinical site agreements signed, first Clinical Trial Subject enrolled, last Clinical Trial Subject enrolled and data base lock (“Progress Reports”) every [***]. Progress Reports may contain, among other things, information on projected and actual recruitment, projected and achieved key dates in the Clinical Trial and the then current status of the Clinical Trial.

 

2.3.2

The Company acknowledges that the contents of Progress Reports may not be ‘clean’ or validated, and should not be relied upon, and that their contents are Confidential Information of CRT. Unless and until the Company exercises the Option and is granted the Licence, the Company may use the contents of Progress Reports for internal reporting purposes only, and may only disclose the contents of any Progress Report to any third party with CRT’s written consent or as permitted under clause 10.

 

Private & Confidential 

 

2.4

Database lock. The Charity will clean and validate the Clinical Trial Results and lock the clinical research database relating to the Clinical Trial as soon as is practicable after the last course of treatment under the Clinical Trial is complete, and will notify the Company promptly after the database is locked.

 

2.5

IMPD and IB. The Charity will prepare the Investigational Medicinal Product Dossier (“IMPD”) and the Investigator’s Brochure (“IB”) in respect of the clinical aspects of the Clinical Trial, and submit the IMPD and IB to the relevant Regulatory Authority. If the Company is supplying GMP Agent Material then, at the Charity’s request, the Company will prepare and provide to the Charity a first draft of the IMPD within [***] by the Charity. The Charity may amend any draft IMPD prepared by the Company before it is submitted to the relevant Regulatory Authority provided that where the Charity amends the section of the draft IMPD dealing with GMP Agent Material, the Company shall have the opportunity to review and comment on any such amendment and the Parties shall use reasonable endeavours to agree a mutually acceptable draft IMPD in good faith before it is submitted to the relevant Regulatory Authority. For clarity, it is understood by the Parties that the Charity shall have final approval for the draft IMPD before submission to the relevant Regulatory Authority.

 

2.6

Clinical study report. The Charity will prepare a clinical study report in respect of the Clinical Trial that meets the standards of ICH Topic E3 of the ICH Guidelines for Structure and Content of Clinical Study Reports dated July 1996.

 

2.7

Documents. The Charity will provide to the Company copies of the IMPD and IB within [***] of their finalisation. The Charity will use reasonable endeavours to provide the Company with a copy of the clinical study report, and use reasonable efforts to provide it within [***] after the Charity has notified the Company (and copied to the JPT) that the clinical research database relating to the Clinical Trial has been locked.

 

2.8

Form and content. The Charity will prepare the Progress Reports, IMPD, IB and clinical study report in accordance with, and in a form set by, the Charity’s then current practices.

 

3

Company support for the Clinical Trial

 

3.1

Subject to the remainder of this clause 3, the Company will transfer the Agent Materials in sufficient quantities for the Charity to conduct the Clinical Trial and provide all Agent Know How in its possession at the Start Date to the Charity within [***] after the Start Date or, if different, as required under any Technical Agreement that the Parties enter into.

 

3.2

Materials

 

3.2.1

If the Company is to perform development or manufacture activities to support the Clinical Trial, the Parties will discuss in good faith, and agree in writing, the arrangements and timetable for those activities and the delivery of any relevant Materials to the Charity.

 

3.2.2

If the Company is supplying GMP Agent Materials to the Charity, it will only do so from within the European Union (and/or the United Kingdom if/when the United Kingdom is no longer a member of the European Union) and will supply the GMP Agent Materials, at its own cost, to a site in the United Kingdom requested by the Charity. The Company will be responsible for importing GMP Agent Materials into the European Union and United Kingdom, and delivery to the requested site.

 

3.2.3

The Company warrants and represents that all GMP Agent Materials it supplies under this Agreement meet any specification agreed with the Charity, and have been manufactured, handled, stored, imported and shipped in accordance with GMP and all applicable laws.

 

Private & Confidential

 

3.3

Know How

 

3.3.1

The Company will ensure that all Know How disclosed by it under this Agreement (including in the Cover Sheet) is, to the best of its knowledge, true, accurate and complete.

 

3.3.2

The Company will promptly provide to the Charity any Agent Know How not available at the Start Date that comes to the Company’s attention during the Clinical Trial if that Agent Know How is likely to impact on the safe, proper or lawful conduct of the Clinical Trial or on any Clinical Trial Subject. The Company will notify the Charity of any such Agent Know How immediately and provide the Charity with all such Agent Know How (under the procedure set out at Schedule 3), and any support or co-operation reasonably required or requested by the Charity to understand that Agent Know How and its implications, within any timelines reasonably requested by the Charity in the circumstances.

 

3.3.3

During the course of the Clinical Trial and until delivery of the clinical study report to the Company under clause 2.7, the Company will provide the Charity with a summary of the scope arid purpose of any preclinical activities relating specifically to the Agent, or other Materials which are reasonably relevant to the Clinical Trial that are Covered by the Agent Patents and that the Company, or any third party to whom the Company has licensed Agent IP, wishes to carry out before those preclinical activities begin. The Company will provide to the Charity copies of the results of those preclinical studies as soon as is practicable after the Company receives them, and the results of those preclinical studies will be Agent Know How.

 

3.4

Other clinical activities. Under its CDP scheme, the Charity wishes to fund oncology research that would not otherwise take place. It also wishes to ensure that all information relevant to the safe and proper performance of the Clinical Trial is made available. In this connection:

 

3.4.1

the Company will notify the Charity of any clinical research that it wishes to carry out or to permit a third party to carry out, any time before the Company exercises the Option, in respect of the Agent that may be relevant to the safe and proper performance of the Clinical Trial;

 

3.4.2

if the Charity gives its approval, the Company and the Charity will promptly discuss, in good faith, whether safety data arising from that clinical research should be shared with the Charity;

 

3.4.3

if the Company and the Charity agree that safety data should be exchanged between them, they will agree and record in writing the processes and timeframes under which the safety data will be exchanged. The Company will not begin, or permit any third party to begin, clinical research described in this clause 3.4 until those safety data exchange arrangements have been agreed; and

 

3.4.4

the Company shall, during the term of this agreement, take reasonable steps to:

 

(a)

obtain from its licensor, Vaccitech Limited (company number 0973585) (“Vaccitech”), prompt and regular updates regarding any SAEs, SUSARs, DSURs or USMs reported to Vaccitech during the course of clinical research conducted by or on behalf of Vaccitech in respect of Agent Patents 1-3; and

 

(b)

promptly relay to the Charity any SAEs, SUSARs, DSURs or USMs disclosed to the Company pursuant to (a) above that, in the reasonable opinion of the Company, may be relevant to the safe and proper performance of the Clinical Trial.

 

Private & Confidential 

 

4

Responsibilities for the Clinical Trial

 

4.1

Sponsor. The Charity will be the sole sponsor of clinical aspects of the Clinical Trial, and it will be the Charity’s responsibility to apply for Regulatory Authorisations relating to performance of the Clinical Trial. The Charity will ensure that all relevant aspects of the Clinical Trial are carried out in accordance with GCP, and subject to the other terms of this Agreement, it will use its reasonable efforts to ensure that timelines agreed with the Company are met and the Clinical Trial is completed in a timely manner.

 

4.2

Technical Agreement. At the Charity’s request, the Company and the Charity will promptly negotiate in good faith, complete and enter into, a ‘technical’ or ‘quality’ agreement that allocates GMP responsibilities between the Parties (“Technical Agreement”) before the Company supplies any GMP Agent Material to the Charity. The terms of any Technical Agreement will be consistent with any requirements and guidelines for technical agreements set out in the Clinical Trial Legislation. The Company and the Charity will comply with the terms of any Technical Agreement they enter into.

 

4.3

Guidance. The Company will provide the Charity or any Contributor with technical and scientific guidance, co-operation, data or information reasonably requested by the Charity to help the Charity to perform the Clinical Trial in a timely, safe and proper manner. The guidance to be provided by the Company may include, among other things, assistance with the preparation, drafting or submission of any application for Regulatory Authorisation (such as a clinical trial application) or communication with any Regulatory Authority in connection with the Clinical Trial.

 

4.4

Other than as expressly set out in this Agreement, each Party will bear the costs it incurs in performing its obligations under this Agreement.

 

Part B: Rights to Results, IP and information

 

5

Rights to perform the Clinical Trial

 

With effect from the Start Date, the Company grants to the Charity a worldwide, royalty-free, fully paid-up, sub-licensable licence under the Agent IP solely for the purposes of fulfilling its obligations under this Agreement including designing, preparing for, sponsoring and carrying out the Clinical Trial. The Charity and Contributors may, among other things, develop, manufacture, use, import or dispose of IMP solely for the purpose of carrying out the Clinical Trial.

 

6

The Results of the Clinical Trial

 

6.1

Know How Controlled by the Charity or CRT and generated in performing the Clinical Trial, and the IP therein, is referred to in this Agreement as the “Results”. Results include, among other things, the contents of the IMPD, IB, Progress Reports, the clinical study report and other documentation including an electronic sponsor Trial Master File which is redacted to exclude Confidential Information for example, internal minutes and communications not relevant to the running of the Clinical Trial generated in respect of the Clinical Trial.

 

The Charity wishes to make outputs of the Clinical Trial with a general application available to others to help deliver cancer patient benefit. For this reason, this Agreement refers to two categories of Results:

 

“Exclusive Results”, which are those Results that relate to, and only to, the Agent. Exclusive Results exclude any Result that may have a generic application or use in respect of any agent, biologic, drug, treatment or active ingredient other than the Agent (including those used in combination with the Agent in the course of the Clinical Trial), or that is or relates to any formulation, methodology or biomarker; and

 

Private & Confidential

 

“Non-Exclusive Results”, which are the Results that are not Exclusive Results.

 

6.2

The Charity hereby assigns its rights, title and interest in or to the Results to CRT. CRT hereby grants a non-exclusive, fully paid-up, sub-licensable licence to the Charity under the Results to perform the Clinical Trial and fulfil the Charity’s obligations under this Agreement.

 

6.3

Unless and until the Company exercises the Option and the Licence is granted, it will not use the Results other than as permitted in clause 10.

 

7

The Company’s Option to the Results

 

7.1

CRT hereby grants the Company an option (the “Option”) to take the following:

 

7.1.1

an exclusive licence under the Exclusive Results; and

 

7.1.2

a non-exclusive licence under the Non-Exclusive Results,

 

to research, develop, make, have made, import, use and sell Licensed Products in the Field in the Territory and apply for Regulatory Authorisations for Licensed Products in the Territory (the “Licence”), subject to the remainder of this Agreement including the Licence Terms set out in Schedule 1.

 

7.2

Unless and until the Option is exercised, the Licence will not be granted to the Company and the Licence Terms will not come into effect.

 

7.3

To exercise the Option, the Company must:

 

7.3.1

give written notice to CRT; and

 

7.3.2

pay the Licence Fee (cf: Box 1 of the Cover Sheet) to CRT,

 

in the [***] after the date the Charity provides the clinical study report pursuant to clause 2.7 (the “Option Period”). The Option will be deemed exercised on the later of (i) the date the Company gives written notice it wishes to exercise the Option; and (ii) the date CRT receives the Licence Fee.

 

7.4

If the Company exercises the Option during the Option Period, then upon its exercise the Licence and the Licence Terms will come into full force and effect.

 

7.5

If the Company does not exercise the Option within the Option Period, with effect upon the expiry of the Option Period:

 

7.5.1

the Option will lapse;

 

7.5.2

the Company will have no right to use the Results under this Agreement; and

 

7.5.3

the Company assigns and/or licenses to CRT the rights as described in the Step-In Agreement. The Company will execute and provide to CRT an executed original of the Step-In Agreement within [***] after expiry of the Option Period to evidence the assignment made and/or licence granted, and give effect to the other terms of the Step-In Agreement.

 

8

Agent Patents

 

8.1

Subject to the remainder of this clause 8, the Company will continue working with its licensor(s) of Third Party IP to prosecute and maintain the Agent Patents throughout the Term at its own cost.

 

8.2

If the Company intends to substantially narrow the scope of any Agent Patent that is not Third Party IP in any Major Market or it discovers that its licensor(s) of Third Party IP intend(s) to substantially narrow the scope of any Agent Patent which is Third Party IP in any Major Market, it will first consult with CRT and consider, in good faith, any comments provided by CRT.

 

Private & Confidential

 

8.3

Step-In. If the Company elects not to prosecute or maintain any Agent Patent that is not Third Party IP in any Major Market or it discovers that its licensors) of Third Party IP intend(s) to elect not to prosecute or maintain any Agent Patent which is Third Party IP in any Major Market, it will notify CRT in writing no less than [***] before the expiry of any applicable time bars, or notify CRT promptly after it discovers its licensor(s) of such Third Party IP intend(s) to elect not to prosecute or maintain any Agent Patent in any Major Market if no less than [***] written notification is not possible and consider, in good faith, any comments provided by CRT. At CRT’s request in that notice period, the Company will:

 

8.3.1

assign to CRT the Agent Patents that are not Third Party IP in that Major Market and identified in that notice for consideration of one pound (£1);

 

8.3.2

transfer promptly to CRT, or any person nominated by CRT, copies of all documents and Know How in the Company’s Control that relate to the filing, prosecution, maintenance, enforcement and defence of those Agent Patents previously owned by the Company in that Major Market assigned to CRT according to clause 8.3.1; and

 

8.3.3

in respect of Agent Patent 4 only, use commercially reasonable efforts to enable CRT (if it so wishes and where the Company and its licensor of Third Party IP do not wish to maintain the said patent itself) to take an assignment of Agent Patent 4 notified to CRT together with copies of all documents and Know How relating to the filing, prosecution, maintenance, enforcement and defence of such Agent Patent for consideration of one pound (£1) and CRT may prosecute, maintain, enforce and defend those Agent Patents assigned to it according to clause 8.3.1 and/or clause 8.3.3 at its discretion and with no further obligation to the Company.

 

8.4

The Company will provide to the Charity, at the Charity’s expense, all cooperation and assistance reasonably required and requested in relation to such filing, prosecution, maintenance, enforcement and defence of those Agent Patents that were previously owned by the Company (or its licensor) in that Major Market and have been assigned to CRT according to clause 8.3.1 and/or clause 8.3.3.

 

8.5

The Company may not assign or encumber any Agent Patent which is not Third Party IP without CRT’s prior written consent, such consent not be unreasonably withheld.

 

9

Rights to Agent IP

 

The Company warrants and represents to the Charity and CRT that:

 

9.1

it is the legal and beneficial owner, of the Agent IP, other than Third Party IP, free of any third party rights or encumbrances;

 

9.2

it has not entered, and will not enter, into any arrangement with any third party that prevents it from fulfilling its obligations, or that encumbers the rights granted or assigned, under this Agreement or that it may be obliged to grant or assign under the Step-In Agreement; and

 

9.3

in respect of Third Party IP:

 

9.3.1

the Third Party Agreements identified in the Cover Sheet are the only third party licences to the Company relating to the manufacture, possession and use of the Agent;

 

Private & Confidential

 

9.3.2

all Third Party Agreements are and, subject to the remainder of this clause 9.3, will remain in full force and effect during the Term of this Agreement, and the Company will comply with all of its obligations under the Third Party Agreements;

 

9.3.3

to the best of its knowledge and belief there are no outstanding breaches of any Third Party Agreement by any person party to them and there are no acts or circumstances that may give any person the right to terminate any Third Party Agreement;

 

9.3.4

it will notify the Charity in writing immediately upon becoming aware of any act or circumstance described in clause 9.3.3, and will not enter into, not amend or terminate any Third Party Agreement without the Charity’s prior written consent.

 

10

Use of information

 

Confidentiality

 

10.1

Subject to clause 10.3, each Party (the “Receiving Party”) may disclose to its officers, employees, appointed experts, professional advisors or potential or actual Contributors who need to know any Confidential Information of another Party (the “Disclosing Party”) disclosed to or obtained by it under this Agreement. The Receiving Party will inform those officers, employees, experts, advisors and potential or actual Contributors of the confidential nature of the information disclosed and bind them to obligations of confidence consistent with those imposed on the Receiving Party. Subject to the remainder of clause 10, the Receiving Party will keep confidential and not disclose to any other person any Confidential Information of the Disclosing Party disclosed to or obtained by it under this Agreement.

 

10.2

Clause 10.1 does not apply to Confidential Information to the extent that:

 

10.2.1

it is or was already known to the Receiving Party at the time of disclosure, as shown by the Receiving Party’s written records, without any obligation to keep it confidential;

 

10.2.2

at the time of being disclosed or obtained by the Receiving Party or at any time afterwards, it is published or generally available to the public other than due to a breach of the Receiving Party’s obligations under this Agreement; or

 

10.2.3

it is required by a competent Court or Regulatory Authority or under applicable law (including securities law or rules of a securities exchange) to be disclosed by any Party or Contributor, so long as the Receiving Party:

 

(a)

gives notice to the Disclosing Party of the disclosure as soon as reasonably practicable;

 

(b)

gives the Disclosing Party a reasonable opportunity to limit the scope of the disclosure or obtain a protective order requiring Confidential Information to be held in confidence by the relevant Court or Regulatory Authority; and

 

(c)

discloses only Confidential Information that it is legally required to disclose.

 

10.3

Permitted disclosures

 

10.3.1

CRT and the Charity may disclose Confidential Information of the Company where necessary to exercise or enforce its rights or perform its obligations under this Agreement, including to potential or actual Contributors in connection with the Clinical Trial;

 

10.3.2

the Charity and Contributors may publish Results in accordance with clause 11;

 

Private & Confidential

 

10.3.3

the Company may disclose Progress Reports to persons holding investments in the Company for the sole purpose of providing an update on the status of the Clinical Trial;

 

10.3.4

the Charity may disclose Confidential Information of the Company to independent persons nominated by the Charity to monitor and review the work it funds or provide scientific advice, provided that such independent persons are made aware of the confidential nature of the information disclosed and are bound to obligations of confidence consistent with those imposed on the Receiving Party; and

 

10.3.5

where the Option has been exercised, the Company may disclose Confidential Information of the Charity and CRT relating to the approval, marketing or sale of Licensed Products to potential and actual Sub-Licensees and, as necessary, to Regulatory Authorities in the Territory, provided that in the case of such disclosure to a potential Sub-Licensee: (a) the Company will notify CRT in writing of the identity of the potential Sub-Licensee and obtain CRT’s prior approval of the disclosure of the Confidential Information to that potential Sub-Licensee (such approval (I) not to be unreasonably withheld, conditioned or delayed, and (ii) to be deemed given if CRT has not responded substantively to the Company within [***] after being so notified in writing); and (b) the Company will bind each proposed recipient in writing to confidentiality undertakings consistent with clause 10.1. in each case, under written confidentiality provisions equivalent to those set out in this clause 10.

 

10.4

Each Receiving Party acknowledges that a breach of this clause 10 may result in irreparable injury to the Disclosing Party that may not be adequately compensated by monetary damages.

 

10.5

The obligations under clauses 10.1 to 10.4 (inclusive) survive the expiry, or termination for any reason, of this Agreement until the tenth (10th) anniversary of the Start Date, or any shorter period described in clause 16.11.2 under an Existing CDA.

 

Investor Information

 

10.6

The Charity and CRT acknowledge that the Company may wish to seek additional investment in the Company through new share issues and share sales during the Term.

 

10.7

At the Company’s request, the Parties will discuss in good faith and agree a bundle of anonymised Results according to the Data Protection Requirements that the Company may disclose to bona fide potential investors in the Company (with each such bundle being referred to in this Agreement as a “Data Package”). The Parties acknowledge that the aim of each Data Package is to provide an illustrative overview of the status of the Clinical Trial, and each will contain information including:

 

10.7.1

summaries of the Protocol and commercial terms of the Company’s arrangements with CRT;

 

10.7.2

details of then current recruitment numbers and the expected completion date of the Clinical Trial; and

 

10.7.3

efficacy data where such data is available.

 

10.8

The Company acknowledges that the contents of each Data Package may not be ‘cleaned’ or validated, and should not be relied upon.

 

10.9

Before each disclosure of a Data Package, the Company will:

 

Private & Confidential

 

10.9.1

notify CRT in writing of the identity of the potential investor and obtain CRT’s prior approval of the disclosure of the Data Package to that potential investor (such approval (i) not to be unreasonably withheld, conditioned or delayed, and (ii) to be deemed given if CRT has not responded substantively to the Company within [***] after being so notified in writing); and

 

10.9.2

bind each proposed recipient in writing to confidentiality undertakings consistent with clause 10.1 and obtain an acknowledgement from each proposed recipient identical to that in clause 10.8.

 

11

Publications

 

11.1

The Charity and Contributors may publish the Results in academic or scientific publications or presentations by following the process set out in this clause 11.

 

11.2

The Charity will notify the Company and CRT if either a Contributor informs the Charity that they wish to publish Results or the Charity wishes to itself publish Results. If a Contributor or Charity wishes to publish the Results, the Charity will use reasonable endeavours to provide a copy of the proposed disclosure within [***], but no shorter than [***], before submission for publication, or as soon as possible if a Contributor informs the Charity on shorter notice and the Charity will inform the Company and CRT of the date on which the proposed disclosure is intended to be submitted for publication. However, where a copy of the proposed disclosure by a Contributor is provided by the Charity to the Company fewer than [***] before the date on which the proposed disclosure is intended to be submitted for publication, the Charity will on the request of the Company ensure the delay of such submission for publication by [***] to allow for proper review of the proposed disclosure and for the Parties to reach agreement on publishable content.

 

11.3

The Charity will comply with the following written requests made by the Company or CRT to the Charity at least [***] before the intended submission date as informed according to clause 11.2:

 

11.3.1

that its Confidential Information (other than the Results) be removed from the proposed publication or presentation;

 

11.3.2

that CRT considers requesting that submission of the publication is delayed so that a Patent may be filed in respect of any Results disclosed; or

 

11.3.3

that, in CRT’s case, submission of the publication is delayed so that a Patent may be filed in respect of any Results disclosed.

 

11.4

The Charity will use reasonable endeavours to notify the Company of any material amendments other than changes requested under clause 11.3.1 that are made to the proposed disclosure after it is submitted for publication.

 

11.5

The Charity and CRT may publish on public clinical trial registers typically used by clinical trial sponsors (such as clinicaltrials.gov) information relating to the Clinical Trial customarily made available on those registers as required under local legislation. The Charity may also publish the following on its own websites: that a trial is being or will be conducted by the Charity’s Clinical Development Partnerships initiative, the patient recruitment criteria and a brief description of the Clinical Trial, including the Company’s name, the reference number and class of IMP, locations at which the trial will take place and biographical information about the lead investigator.

 

Private & Confidential

 

Part C : Allocation of risk; Term; and General

 

12

Liability

 

12.1

Subject to clause 12.2, each Party’s maximum aggregate liability to any other Party for Losses arising from acts, omissions, claims and proceedings relating to this Agreement regardless of form of action (in contract or tort, including negligence, strict liability or otherwise) is [***].

 

12.2

The limit on liability set out in clause 12.1 does not apply to:

 

12.2.1

any indemnity given by the Company under this Agreement;

 

12.2.2

the Company’s obligation to reimburse costs and expenses under clause 15.2.2; or

 

12.2.3

any liability arising from the Company’s obligations under any of the Licence Terms,

 

and nothing in this Agreement excludes or limits the liability of any Party for death or personal injury resulting from its negligence or the negligence of its employees while acting in the course of their employment or excludes or limits the liability of any Party for fraud.

 

12.3

Other than under any indemnity given under this Agreement (including under the Licence Terms), no Party will be liable to another for: (i) loss of revenue, profits, or anticipated savings or profits (in each case, other than costs and expenses described in clause 15,2.2, Milestone Payments, Sub-Licence Revenue and royalties payable under this Agreement); (ii) loss of business; (iii) loss of contracts; (iv) indirect loss; or (v) consequential loss, in each case, however arising, whether negligence, breach of contract or otherwise.

 

12.4

Other than those expressly given by the Company in this Agreement, each Party excludes all warranties, representations and conditions regarding the performance of its obligations under this Agreement (including those implied by law), in each case to the extent permitted by law.

 

13

Indemnification

 

13.1

Indemnity from the Charity. The Charity indemnifies the Company, and its officers, employees, sub-contractors and agents (the “Company Indemnitees”) for all Losses arising from claims and proceedings (whether threatened or brought, and whether successful or otherwise) by or on behalf of Clinical Trial Subjects for personal injury or death arising out of the Clinical Trial, save to the extent that those Losses arise as a consequence of:

 

13.1.1

any wrongful act or omission or negligence of any Company Indemnitee;

 

13.1.2

a breach of this Agreement by the Company; or

 

13.1.3

a misrepresentation by the Company.

 

The Charity’s maximum aggregate liability under the indemnity given in this clause, and otherwise under this Agreement, is limited to the amount set out in clause 12.1.

 

13.2

Indemnity from the Company. The Company indemnifies the Charity, CRT, the Contributors, and their respective officers, employees, sub-contractors and agents (the “Charity Indemnitees”) for all Losses arising from all claims and proceedings (whether threatened or brought, and whether successful or not):

 

13.2.1

by or on behalf of Clinical Trial Subjects for personal injury or death arising out of any:

 

Private & Confidential

 

(a)

failure or delay to provide Agent Know-How or other information relating to the storage, use and safety of any Agent Material, the Agent or IMP in accordance with this Agreement; or

 

(b)

wrongful act, omission or negligence of the Company (or third party acting on its behalf) in importing, storing, shipping, supplying, manufacturing or using Material; or

 

13.2.2

that allege infringement of any third party’s rights (including IP) in performing the Clinical Trial or by importation, storage, shipment, supply, manufacture or use of any of the Agent Materials or IMP for or in connection with the Clinical Trial; or

 

13.2.3

that relate to the disclosure of Data Packages to, or use of Data Packages by, any third party, save to the extent those Losses arise as a consequence of (i) any wrongful act or omission or negligence of any Charity Indemnitee; (ii) a breach of this Agreement by the Charity; or (iii) a misrepresentation by the Charity. Following the Licence Grant Date, the indemnity set out in section 7.3 of the Licence Terms will also apply in relation to activities carried out under the Licence Terms.

 

13.3

Claims made under an indemnity

 

13.3.1

Any Charity Indemnitee or Company Indemnitee wishing to claim under any indemnity given under this Agreement (the “Indemnified Person”) will promptly notify the indemnifying Party after it receives notice of any claim or alleged claim or notice of the commencement of any action, administrative or legal proceeding, or investigation to which the indemnity may apply (a “Claim”). The indemnifying Party may elect to defend any Claim by giving written notice within [***] of receiving notice of the Claim (the “Election Period”).

 

13.3.2

If the indemnifying Party elects, within the Election Period, to defend the Claim:

 

(a)

the Indemnified Person may retain separate legal advisers, at its sole cost and expense;

 

(b)

the Indemnified Person will not admit liability in respect of, or settle, the Claim without the prior written consent of the indemnifying Party (who may not unreasonably withhold, condition or delay that consent); and

 

(c)

the indemnifying Party will not consent to the entry of any judgment or enter into any settlement of the Claim without the written consent of the Indemnified Person (who may not unreasonably withhold, condition or delay that consent).

 

13.3.3

If the indemnifying Party does not elect, within the Election Period, to defend the Claim, the Indemnified Person may assume the defence of the Claim, and the Indemnifying Party will be liable for the legal and other expenses consequently incurred in connection with that defence (subject, where the Charity is the indemnifying Party, to clause 12.1).

 

13.3.4

The Parties will co-operate in good faith in the conduct of the defence of any Claim and will provide any assistance reasonably required for the Claim to be defended properly, and the Party with conduct of the Claim will provide promptly to the other Parties copies of all correspondence and documents, and written summaries of oral communications, material to the Claim.

 

13.4

Insurance. The Company will have insurance coverage for its potential liabilities under this Agreement, and maintain such insurance throughout the Term. At the Charity’s request, the Company will promptly provide written evidence of its insurance.

 

Private & Confidential

 

14

Term and termination

 

14.1

This Agreement comes into force on the Start Date.

 

14.2

Expiry. If the Company:

 

14.2.1

exercises the Option within the Option Period, this Agreement will continue in force until it is terminated;

 

14.2.2

does not exercise the Option within the Option Period, this Agreement will expire when the Company provides to CRT an original executed Step-In Agreement under clause 7.5.

 

14.3

Termination. Without limiting any other right of a Party, this Agreement may be terminated on written notice to the other Parties:

 

14.3.1

by the Company if the Charity or CRT:

 

(a)

commits a material breach, and in the case of a material breach that is capable of remedy, that is not remedied within [***] of notice being given of the breach;

 

(b)

is the subject of any Insolvency Event or gives notice under clause 16.1; or

 

(c)

undergoes a change of Control, and the new Controlling person is a Tobacco Party;

 

14.3.2

by the Charity:

 

(a)

if the Company commits a material breach, and in the case of a material breach that is capable of remedy by the Company, that is not remedied within [***] of notice being given of the breach;

 

(b)

if the Company is the subject of any Insolvency Event or gives notice under clause 16.1;

 

(c)

if the Company undergoes a change of Control, and the new Controlling person is a Tobacco Party; or

 

(d)

at any time before the last cycle of treatment under the Clinical Trial has been completed;

 

(e)

if the Company or its licensors of Third Party IP under Third Party Agreements do not execute the Side Letters by 31 March 2020;

 

14.3.3

if the Company has exercised the Option within the Option Period, by CRT under section 8.2 of the Licence Terms.

 

15

Consequences of termination

 

15.1

General

 

Upon expiry or termination of this Agreement for any reason:

 

15.1.1

the Receiving Party will cease to use Confidential Information of the Disclosing Party and, at the request of the Disclosing Party, will return or destroy the Disclosing Party’s Confidential Information; provided that the Charity and CRT may hold and use Confidential Information of the Company to the extent necessary to perform and complete activities under clause 15.1.3 and to exercise any rights granted under the Step-In Agreement. If Confidential Information is destroyed, the Receiving Party will confirm the destruction in writing to the Disclosing Party;

 

Private & Confidential

 

15.1.2

the Charity, as sponsor of the clinical aspects of the Clinical Trial, and Contributors, may retain Confidential Information in accordance with ICH GCP (the ICH Harmonised Tripartite Guideline for Good Clinical Practice; CPMP/ICH/135/95) and as required by any applicable law;

 

15.1.3

if the Clinical Trial is not complete at the date of termination, the Charity may begin or continue to administer IMP to Clinical Trial Subjects as required by the Regulatory Authority, Ethics Committee or Clinical Trial Legislation for the duration of their proposed course of treatment. The Charity’s use of IMP will continue to be subject to the terms of this Agreement. If the Company is supplying IMP for use in the Clinical Trial, the Company will continue to supply IMP in quantities sufficient to complete those courses of treatment. If the Company is not supplying IMP for use in the Clinical Trial, the Charity may manufacture IMP in quantities sufficient to complete those courses of treatment and, at the Charity’s request, the Company will provide to the Charity and its designees any Know How that is necessary or desirable to manufacture, or have manufactured, a sufficient quantity of IMP and complete those courses of treatment; and

 

15.1.4

Clauses 15.2, 15.3 and 15.4 apply in the circumstances described in those clauses.

 

15.2

Option Not Exercised

 

Upon termination of this Agreement for any reason before the Company has exercised the Option then in addition to the provisions of clause 15.1 and, if applicable, clause 15.4:

 

15.2.1

the Option will not apply and will not, at any time, be exercisable. However, if this Agreement has been terminated by the Charity under clause 14.3.2(d) or 14.3.2(e), then the Charity and CRT will, upon a written request of the Company in the [***] following termination, grant the Licence to the Company under the Licence Terms (subject to an appropriate reduction in the payments due to CRT under the Licence Terms, which will be agreed to reflect the stage of the Clinical Trial on the date of termination); and

 

15.2.2

where this Agreement is terminated by the Charity under any of clause 14.3.2(a) to 14.3.2(c) (inclusive) or 14.3.2(e) at any time before the Company has exercised the Option, the Company will reimburse the Charity for all actual paid, prepaid and committed costs (including personnel costs) and expenses incurred by the Charity and the Contributors in connection with the Clinical Trial.

 

15.3

Licence Granted

 

Upon termination of this Agreement for any reason after the Company has exercised the Option then in addition to the provisions of clause 15.1 and, if applicable, clause 15.4:

 

15.3.1

subject to all of the Licence Terms (including payment of royalties), the Company may, for a period of no more [***] following termination:

 

(a)

manufacture Licensed Products to the extent necessary to satisfy orders for Licensed Products accepted before termination; and

 

(b)

sell, use or otherwise dispose of any unsold stocks of the Licensed Products;

 

15.3.2

subject to clause 15.3.1, the Licence will terminate upon termination of this Agreement and the Company will, and will procure that all Sub-Licensees, cease to exploit Results in any way, directly or indirectly. If, within [***] after the date of termination, CRT receives a written request from any Sub-Licensee to exercise its step-in rights under this clause 15.3.2, then, provided that Sub-Licensee is not in breach of its obligations under its agreement with the Company (under which the Sub-Licence was granted) at the time of such request, to the extent of its legal right to do so, CRT will enter into a direct agreement with that Sub-Licensee unless there are reasonable grounds for it to refuse to do so. CRT agrees that:

 

Private & Confidential

 

(a)

the direct agreement shall grant a licence under the same Results previously licensed to that Sub-Licensee by the Company under terms and conditions substantially similar to those under this Agreement, to the extent that such terms and conditions apply to the grant of the Sub-Licensee’s pre-termination sub-licence agreement;

 

(b)

the direct agreement shall contain terms no less favourable and no more onerous for CRT than the applicable terms of this Agreement, such agreement to include the exclusivity or non-exclusivity (as the case may be) and field of use within the Field as were granted by the Company to the Sub-Licensee prior to the termination, but will not require CRT to grant to the Sub-Licensee rights to intellectual property other than the Results actually licensed by CRT to the Company except where the Sub-Licensee requires rights from CRT to Agent Patents as a result as a result of the Company having assigned those Agent Patents to CRT under the Step-In Agreement executed by the Company at the request of CRT in accordance with clause 15.4;

 

(c)

it will receive from such Sub-Licensee the payments due under this Agreement to be determined in the same manner as applied to the activities of that Sub-Licensee; provided that:

 

(i)            CRT will not under any circumstance be obliged to perform any action, assume any liability or give any covenant, warranty or indemnity, that is personal to the Company or that CRT is not obliged to perform, assume or give under this Agreement;

 

(ii)           the Company or the Sub-Licensee pays all the reasonable legal costs incurred by CRT in connection with any direct arrangement between CRT and the relevant Sub-Licensee, including without limitation all costs that arise in connection with the negotiation of any agreements with the Sub-Licensee; and

 

(iii)          the Sub-Licensee indemnifies the Charity Indemnitees against any and all Losses arising from or in connection with any sub-licence agreement between the Company and that Sub-Licensee in respect of rights granted under this Agreement. Clause 13.3 of the Agreement will apply to claims made under the indemnity given in this clause 15.3.2.

 

At the request of the Company, CRT will acknowledge in writing to a Sub-Licensee, CRT’s obligations under this clause 15.3.2. Any acknowledgement given by CRT is Confidential Information of CRT.

 

15.3.3

payment of royalties and all other sums then due to CRT under the Licence Terms will become immediately due and payable to CRT upon notice of termination; and

 

15.3.4

the Company will, within [***] of notice of termination of this Agreement, provide CRT with a final written statement that details, in respect of the time elapsed since the last statement under section 6.1 of the Licence Terms, the matters set out in that section.

 

Private & Confidential

 

15.4

By the Charity or CRT for cause. If this Agreement is terminated by the Charity or CRT under clause 14.3.2(a) to 14.3.2(c) (inclusive) or by CRT under section 8.2 of the Licence Terms, at the Charity’s request the Company will execute the Step-In Agreement, and provide to CRT an executed original of the Step-In Agreement, within [***] of the date of termination. This clause applies in addition to the provisions of clause 15.1 and either clause 15.2 or 15.3.

 

15.5

The following provisions survive expiration or termination of this Agreement for any reason; clause 4 (responsibilities); 5 (rights) (but only for so long as and to the extent necessary to perform activities under clause 15.1.3; 8 (patents); 9 (rights); 10 (confidentiality), 11 (publication), 12 (liability, warranties); 13 (indemnity); 15 (consequences of termination), 16 (general) and the following sections of the Licence Terms: 2.2 (reserved rights), 6 (statements) and 7 (insurance, liability, indemnity). Termination of this Agreement for any reason does not affect any rights of the Parties accrued before termination.

 

15.6

Obligations to destroy or return Confidential Information exclude Confidential information maintained on routine computer system backup storage devices, so long as backup Confidential Information is not used, disclosed or recovered intentionally from storage devices, and continues to be Confidential Information.

 

16

General

 

16.1

Insolvency. Each Party will notify the other Parties immediately upon becoming aware that an Insolvency Event has or is likely to take place in relation to it.

 

16.2

Standing. The Company will keep the Charity generally informed of the progress of the Company’s business and affairs on at least an annual basis and will promptly notify the Charity, with written details, of circumstances that will or may cause any actual or prospective material adverse change in the Company’s financial position, prospects or business.

 

16.3

Relationship. Nothing in this Agreement gives or will give rise to any partnership or the relationship of principal and agent between any of the Parties. The Charity’s and CRT’s respective liability under this Agreement is several, and not joint or joint and several.

 

16.4

Public Announcements. Subject to the other terms of this Agreement, no Party may make any press or other public announcement concerning the execution or other aspect of this Agreement without the prior agreement of the other Parties (who may not unreasonably withhold, condition or delay their consent).

 

16.5

Payments

 

16.5.1

The Company will make all payments due to CRT or the Charity under this Agreement in cleared funds in pounds sterling to the bank accounts nominated by CRT or the Charity respectively.

 

16.5.2

The Company will bear all costs of transmission and currency conversion.

 

16.5.3

All payments under this Agreement are expressed exclusive of value added tax however arising. If CRT or the Charity is liable to pay value added tax in relation to any supply made or deemed to be made for tax purposes pursuant to this Agreement, the Company will pay that value added tax to CRT or the Charity at the same time as, and in addition to, the payment to which the tax relates or, if earlier, on receipt of a tax invoice from CRT or the Charity.

 

16.5.4

The Company will pay all amounts due under this Agreement in full without any deduction or withholding other than as required by law, and the Company will not assert any credit, set-off or counterclaim against CRT or the Charity to justify withholding payment of any amount due. Interest will accrue on the sum due and owing by the Company at an annual rate equal to an annual rate of [***] over the then current base rate of Natwest Bank, calculated on a daily basis, until the full amount is paid. CRT’s or the Charity’s right to receive interest is without prejudice to their right to receive payment on the date due.

 

Private & Confidential

 

16.5.5

If the Company is required by law to make any tax deduction or withholding, the Company will give reasonable assistance to CRT or the Charity to claim exemption from or (if that is not possible) a credit for the deduction or withholding under any applicable double taxation or similar agreement from time to time in force. The Company will promptly give CRT or the Charity proper evidence as to the deduction or withholding and payment over of the tax deducted or withheld.

 

16.6

Data Protection

 

16.6.1

Each Party’s attention is drawn to the Data Protection Act 2018, Directive 95/46/EC of the European Parliament, the General Data Protection Regulation (EU) 2016/679, and any national or European legislation or regulations implementing or made in pursuance of them (the “Data Protection Requirements”).

 

16.6.2

Each Party will observe its obligations under the Data Protection Requirements that arise in the performance of this Agreement, and will process and use personal data fairly and lawfully.

 

16.6.3

At the Charity’s request, the Company will enter into an agreement with the Charity in respect of the transfer of personal data (as defined in the Data Protection Act 2018) based on the standard contractual clauses governing data transfers recommended or approved by the UK’s Information Commissioner’s Office (or any successor) from time to time. Irrespective of any other provision of this Agreement, the Charity will have no obligation to transfer any personal data to the Company unless and until the Company enters into that data transfer agreement.

 

16.7

Force Majeure

 

16.7.1

If a Party is delayed in performing or fails to perform its obligations (other than payment obligations) under this Agreement because of strike, riot, civil commotion, fire, acts of God or other circumstances beyond its reasonable control (“Force Majeure”), it will give prompt notice of the cause of the Force Majeure and its effects on its obligations including the clinical trial timelines to the other Parties.

 

16.7.2

The Party giving notice of a Force Majeure will be excused from the performance of the relevant obligations for as long as it continues to be affected by the Force Majeure, and will perform its obligations as soon as the Force Majeure circumstances cease to affect its operations.

 

16.7.3

If the Force Majeure continues for a period of: (a) [***] or more for obligations arising under clause 3 or 4.3 or any Technical Agreement; and (b) [***] or more for obligations arising under all other provisions, the Parties will meet to discuss in good faith what actions to take or what modification should be made to this Agreement as a consequence of such Force Majeure in order to alleviate its consequences on the affected Party.

 

16.8

No Assignment. The Company may not assign, transfer, charge, encumber, sub-contract or otherwise deal with any of its rights (or obligations) under this Agreement.

 

16.9

Notices

 

16.9.1

Notices must be sent to the recipient Party’s address set out on the front of this document, sent by a method described in clause 16.9.2 and be marked for the attention of the Executive Officer of the recipient Party (with a copy, in the case of Charity and the Company, to their respective Project Leaders), or to any other address notified to the other Parties under this Agreement.

 

Private & Confidential

 

16.9.2

Notices will be deemed served: (i)upon delivery, if given in person; (ii) [***] after posting, if sent domestically by first class ‘signed for’ post; and (iii) [***] after posting, if sent by ‘signed for’ airmail.

 

16.10

Amendments. No variation, modification, amendment, extension or release from any provision of this Agreement will be effective unless it is in writing and signed by all Parties.

 

16.11

Entire Agreement

 

16.11.1

This Agreement (together with any Technical Agreement entered into by the Company and the Charity) represents the entire understanding, and constitutes the whole agreement, in connection with its subject matter and supersedes all previous agreements, understandings or arrangements between the Parties in connection with its subject matter.

 

16.11.2

Upon signature of this Agreement, the Confidential Disclosure Agreement between the Parties dated 2 July 2019 (the “Existing CDA”) will terminate automatically. This Agreement will prevail if there is any inconsistency between the terms of this Agreement and those of the Existing CDA, save that any confidentiality period imposed under the Existing CDA will apply to, and only to, Confidential Information disclosed before the Start Date under the Existing CDA if that confidentiality period is shorter than that imposed under clause 10.5.

 

16.11.3

If there is any inconsistency between the Cover Sheet, the terms and conditions of this Agreement and any Technical Agreement entered into by the Company and the Charity, the following order of priority will apply (with the first being given the greatest priority): (a) the Cover Sheet; (b) the terms and conditions of this Agreement; and (c) the Technical Agreement.

 

16.11.4

Nothing in this Agreement excludes a Party’s liability to the other for fraudulent misrepresentation or fraudulent misstatement.

 

16.12

Waiver. A Party does not waive a right, power or remedy if it fails to exercise or delays in exercising that right, power or remedy. A single or partial exercise of a right, power or remedy does not prevent another or further exercise of that right, power or remedy. Any waiver must be in writing and signed by the Party giving the waiver.

 

16.13

Severability. A term or part of a term of this Agreement that is illegal or unenforceable may be severed from this Agreement, and the remaining terms or part of the terms of this Agreement will continue in force.

 

16.14

Law and Jurisdiction. This Agreement (and any non-contractual dispute or claim related to it or its subject matter) is governed by the laws of England and Wales. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of the English courts in respect of disputes arising out of or in connection with it (except in respect of disputes under clause 10, where jurisdiction is non-exclusive).

 

16.15

Counterparts. This Agreement may be executed in counterparts. All executed counterparts constitute one document. The Parties may exchange executed originals of this Agreement by pdf, which will effect binding and valid delivery of this Agreement.

 

16.16

Third Parties. The third parties identified in clauses 5 (rights), 11 (publication), 12.1 (liability), 13.1 and 13.2 (indemnities) and section 7.3 of the Licence Terms, (the “Third Party Beneficiaries”) have the benefit of those respective provisions. Other than the Third Party Beneficiaries, this Agreement does not create any rights enforceable by anyone other than the Parties. The Parties may amend, suspend, cancel or terminate this Agreement without consent of any third party, including the Third Party Beneficiaries.

 

Private & Confidential

 

16.17

Disputes

 

16.17.1

No Party may refer any dispute to an expert, or issue or bring any action in court or other tribunal (other than an interim injunction) in connection with this Agreement or the Clinical Trial unless the Parties have sought to resolve the dispute through their respective Executive Officers.

 

16.17.2

If the Parties are unable to resolve a dispute within [***] of referring that dispute to the Executive Officers, a Party will have any of the disputes described below determined by an expert:

 

(a)

arising under section 6.4.2 of the Licence Terms in respect of a disputed certificate or in respect of Sub-Licence Revenue; and

 

(b)

arising under section 8.2 of the Licence Terms in respect of whether or not the Company is in breach of its obligations under the Licence Terms,

 

and may have other disputes settled by any remedy available to it in law or equity.

 

16.17.3

If a dispute is to be determined by an expert:

 

(a)

The Parties will try to agree, in good faith, a suitably qualified independent expert. If the Parties do not agree on the identity of the expert within [***] of either Party seeking in writing to the other to appoint an expert, each Party will submit two (2) names to the President (or equivalent) for the time being of: (i) the Institute of Chartered Accountants of England and Wales where the dispute relates to section 6.4.2 of the Licence Terms or Sub-Licence Revenue; and (ii) the Association of the British Pharmaceutical Industry, where the dispute relates to section 8.2 of the Licence Terms; (or, in either case, any successor body), who will select an individual from those submitted;

 

(b)

the expert will act as an expert and not as an arbitrator, and will be so instructed;

 

(c)

each Party will make written submissions to the expert and to the other Parties within [***] of the expert’s appointment and each Party will have [***] to respond to the other Parties’ submissions;

 

(d)

the expert will be asked to make and deliver his or her determination within a further [***] and the expert’s opinion will be final and binding on the Parties; and

 

(e)

the costs of any expert will be borne in proportions determined as fair and reasonable, in the circumstances, by the expert or, if he or she does not make a determination, the Company will bear one half of the costs of the expert, and the Charity and CRT will bear the other half.

 

[Schedules 1, 2, 3, 4, 5 and the Glossary follow]

 

Private & Confidential

 

Schedule 1

 

Licence Terms

 

 

1

Commencement

 

These Licence Terms, and rights granted under them, are effective upon and only upon the Company’s exercise of the Option under clause 7.3 of the Agreement (the “Licence Grant Date”). The Company wishes to take, and CRT wishes to grant to the Company, a licence under the Results upon, and subject to, the terms and conditions set out in these Licence Terms.

 

2

The Licence

 

Grant

 

2.1

Effective upon the Licence Grant Date and not before, and in consideration of the Company’s performance of its obligations under these Licence Terms, CRT grants the Licence to the Company. The Licence is granted subject to the other Licence Terms and provisions of the Agreement.

 

Rights reserved

 

2.2

In this section 2.2, “Non-Commercial Research” means non-commercial scientific or clinical research carried out by or for or under the direction of a person in accordance with their respective charitable or academic status, whether alone or in collaboration with one or more third party and whether sponsored or funded, in whole or in part, by any third party including any commercial entity.

 

CRT excludes from the exclusive grant made under the Licence the worldwide, perpetual and irrevocable right for Contributors, the Charity and scientists funded or employed by the Charity to:

 

2.2.1

use Exclusive Results for Non-Commercial Research; and

 

2.2.2

publish Exclusive Results (by following the process set out in clause 11 of the Agreement) and the results of Non-Commercial Research performed using Exclusive Results.

 

The Charity may also use, and permit its service providers to use, Exclusive Results to benchmark the performance of the Clinical Trial and other clinical trials against one another. Nothing in this section 2.2 grants any right under Agent Patents or Third Party IP, or right to use IMP, or right to use Company Confidential Information, in Non-Commercial Research.

 

Sub-Licensing

 

2.3

The Company may sub-license the rights granted under the Licence so long as:

 

2.3.1

each sub-licence:

 

(a)

is, subject to clause 15.3.2 of the Agreement, expressed to terminate, and terminates, automatically on termination of the Agreement or the Licence for any reason;

 

(b)

shall not permit further sub-licensing under the Licence without CRT’s prior written consent (which CRT may not unreasonably withhold);

 

(c)

imposes like obligations on the Sub-Licensee as are imposed on the Company under the Agreement, including under sections 3 (performance), 6.1 (reporting) and 7 (insurance, liability, indemnity) of these Licence Terms and clauses 10 (confidentiality) and 13 (indemnity) of the Agreement The Company must ensure that all terms of each sub-licence are consistent with the terms of the Agreement, and will procure all Sub-Licensees comply with the same; and

 

Private & Confidential

 

(d)

is entered into on an arms-length terms reflecting the market value of the rights granted.

 

2.3.2

no sub-licence is granted to a Tobacco Party; and

 

2.3.3

each sub-licence is recorded in writing, and the Company provides CRT with a copy of each sub-licence within [***] of entering into that sub-licence.

 

2.4

Sections 2.3.1(c) and 2.3.1(d) of these Licence Terms do not apply to any contract the Company or its Sub-Licensee enters into with any Third Party Service Provider:

 

2.4.1

under which research, development or manufacturing services are provided to the Company or Sub-Licensee; and

 

2.4.2

that does not grant any right to the Third Party Service Provider to either research, develop or manufacture its own products, or sell Licensed Products.

 

2.5

The grant of any sub-licence is without prejudice to the Company’s obligations under these Licence Terms. Any act or omission of any such Sub-Licensee that would be a breach of these Licence Terms if performed by the Company will be a breach by the Company.

 

3

Performance

 

3.1

The Company will use Commercially Reasonable Efforts at all times to:

 

3.1.1

achieve Phase II Clinical Trial Commencement in respect of an Oncology Indication before the second (2nd) anniversary of the Licence Grant Date;

 

3.1.2

actively develop at least one (1) Licensed Product to treat at least one (1) Oncology Indication;

 

3.1.3

pursue Regulatory Authorisations for Licensed Products in each Major Market;

 

3.1.4

introduce each Licensed Product for use in Oncology Indications in each Major Market as soon as reasonably practical following the grant of any necessary Regulatory Authorisations, and pursue maximum market penetration throughout the Major Markets for that Licensed Product;

 

3.1.5

offer for sale and sell each Licensed Product in the United Kingdom as soon as practicable and, in any event, within [***] after the first Regulatory Authorisation is granted for that Licensed Product anywhere in the Territory (including by the European Medicines Agency); and

 

3.1.6

procure that, from launch, each Licensed Product offered for sale in the United Kingdom is Available On The NHS throughout the United Kingdom.

 

3.2

The Company will actively consider, investigate and report to CRT on:

 

3.2.1

the use of EAMS to expedite patient access to Licensed Products for Oncology Indications; and

 

3.2.2

for each clinical trial of a Licensed Product in an indication that affects paediatric cancer patients, the possibility of including a PIP for that clinical trial;

 

and, in each case, use Commercially Reasonable Efforts to use EAMS to expedite patient access to Licensed Products, and include PIPs in relevant clinical trials of Licensed Products. The Company will provide written reasons to CRT if, following its investigation, it elects not to pursue an EAMS available to it or (where applicable) to submit a PIP, and will provide those reasons within [***] of such decision being made.

 

Private & Confidential

 

4

Planning and Reporting

 

4.1

The Company will provide CRT with a Development Plan within [***] of the Licence Grant Date, and will comply with the then current Development Plan at all times. The Company will notify CRT in writing of amendments to the Development Plan within [***] of the amendments being made.

 

4.2

The Company will provide CRT with written progress reports, each in a form and with the detail reasonably requested by CRT, which describes the activities performed by or on behalf of the Company:

 

4.2.1

under the then current Development Plan;

 

4.2.2

to develop each Licensed Product; and

 

4.2.3

where pending, to obtain Regulatory Authorisations and Price Approvals.

 

The Company will provide the first written progress report before the [***] anniversary of the Licence Grant Date, and at least every [***] afterwards, or at least every [***] throughout any period in which section 4.4.2 of these Licence Terms applies.

 

4.3

The Company will notify CRT in writing of the occurrence of each Milestone Event within [***] after its occurrence.

 

4.4

If, before the First Commercial Sale in the United Kingdom, the Company undergoes a change of Control, or begins (whether alone or with a third party) or acquires a Competing Programme, the Company will:

 

4.4.1

notify CRT in writing within [***] of the change of Control or its commencement or acquisition of the Competing Programme; and

 

4.4.2

for [***] after the change of Control or commencement or acquisition of the Competing Programme, provide a written progress report as required under section 4.2 at least every [***].

 

5

Consideration

 

5.1

The Company will pay the Licence Fee under clause 7.3 of the Agreement and make the payments set out in this section 5 in consideration for the rights granted under the Licence and the Charity’s contribution to the development of Licensed Products through its funding and sponsorship of the Clinical Trial.

 

Milestone Payments

 

5.2

The Company will pay to CRT each amount stated to be a “Milestone Payment” in the Cover Sheet (cf: Box 2 of the Cover Sheet) within [***] after the occurrence of the corresponding Milestone Event to which that Milestone Payment relates.

 

5.3

Upon the occurrence of each Milestone Event, any Milestone Event listed before or above it in Box 2 of the Cover Sheet that has not occurred will be deemed to have occurred.

 

5.4

A Milestone Event may be triggered by the actions of the Company or any Sub-Licensee or third party acting on behalf of the Company or any Sub-Licensee.

 

5.5

A Milestone Event may be triggered by the first Licensed Product or any subsequent Licensed Product (even where one or more preceding Milestone Events were triggered by a different Licensed Product), whichever is the first Licensed Product to trigger such Milestone Event and no further Milestone Payment will be due on any subsequent Licensed Product.

 

Private & Confidential

 

Sub-Licence Revenue

 

5.6

The Company will pay to CRT:

 

5.6.1

the percentage stated as the “Pre Ph II Sub-Licence Revenue Share” in the Cover Sheet (cf: Box 3 of the Cover Sheet) of all Sub-Licence Revenue receivable by the Company under any agreement or arrangement the Company enters into before the first Phase II Clinical Trial Commencement;

 

5.6.2

the percentage stated as the “Post Ph II Sub-Licence Revenue Share” in the Cover Sheet (cf: Box 4 of the Cover Sheet) of all Sub-Licence Revenue receivable by the Company under any agreement or arrangement the Company enters into on or after the first Phase II Clinical Trial Commencement but before the first Phase III Clinical Commencement Trial; and

 

5.6.3

the percentage stated as the “Post Ph III Sub-Licence Revenue Share” in the Cover Sheet (cf: Box 5 of the Cover Sheet) of all Sub-Licence Revenue receivable by the Company under any agreement or arrangement the Company enters into on or after the first Phase III Clinical Trial Commencement.

 

5.7

The Company will pay CRT’s share of Sub-Licence Revenue Quarterly, and within [***] after the end of the Quarter that the consideration upon which Sub-Licence Revenue is based is due to be invoiced by the Company.

 

Royalties

 

5.8

The Company will pay royalties to CRT on a Licensed Product by Licensed Product, and country by country basis at the percentage rate of Net Sales stated in the Cover Sheet to be the “Royalty” (cf: Box 6 of the Cover Sheet) until the later of:

 

5.8.1

the expiry of any Data Exclusivity Period in respect of the data submitted for the NDA for that Licensed Product in that country;

 

5.8.2

the expiry of [***] from the First Commercial Sale of that Licensed Product; and

 

5.8.3

the date when that Licensed Product ceases to be Covered by the last to expire Agent Patent in the country of sale or manufacture,

 

following which the royalty will reduce for the relevant Licensed Product in the relevant country to [***] of the royalty stated in the Cover Sheet (cf: Box 6 of the Cover Sheet).

 

5.9

The Company will pay to CRT royalties due under section 5.8 of these Licence Terms Quarterly, within [***] after the end of each Quarter in which relevant Net Sales are invoiced by the Company or a Sub-Licensee.

 

Proviso

 

5.10

If any Milestone Event is triggered by any Sub-Licensee, the Company will pay to CRT the greater of:

 

5.10.1

the Milestone Payment under section 5.2 of these Licence Terms; and

 

5.10.2

the share of Sub-Licence Revenue payable to CRT that is triggered by, and only by, that Milestone Event under section 5.6 of these Licence Terms (if any),

 

Private & Confidential

 

but not both. Sections 5.2 and 5.6 of these Licence terms are subject to this section 5.10. This section 5.10 has no effect on Sub-Licence Revenue triggered or payable in respect of any event that is not a Milestone Event.

 

General

 

5.11

Other than as expressly permitted in section 5.10 of these Licence Terms, payments made by the Company to CRT under these Licence Terms are non-creditable and non-refundable. Each payment due to CRT under these Licence Terms is fully-earned upon becoming payable.

 

5.12

If Licensed Products are sold, or Sub-Licence Revenue received, in a currency other than pounds, the rate of exchange to be used for converting that other currency into pounds is the relevant mid-spot rate for the currency quoted by the Financial Times on the last day of the Quarter to which they relate.

 

6

Statements and Audits

 

6.1

Within [***] after the end of each Quarter, the Company will send to CRT a written statement detailing in respect of that Quarter:

 

6.1.1

any Milestone Payments that became due to CRT;

 

6.1.2

for each sub-licence, details of each item of Sub-Licence Revenue received by the Company during that Quarter and the Sub-Licence Revenue payable to CRT thereon;

 

6.1.3

the quantity of each type of Licensed Product sold or otherwise disposed of by the Company or any Sub-Licensees in each country in the Territory;

 

6.1.4

the Net Sales of each type of Licensed Product in each country of the Territory, and the aggregate Net Sales in respect of that Quarter for Licensed Product;

 

6.1.5

the type and value of deductions made in calculating Net Sales (by Licensed Product type and country);

 

6.1.6

the amount of the royalties due to CRT in respect of that Quarter; and

 

6.1.7

any further information needed to calculate Sub-Licence Revenue and Net Sales of Licensed Products or royalties due to CRT (including any currency conversions and the rates used).

 

The Company will send to CRT a ‘nil’ report if no sums were payable in that Quarter.

 

6.2

The Company will provide information or documents requested by CRT necessary to verify amounts due under these Licence Terms. The Company may redact confidential information of its Sub-Licensees from that information or documents so long as the redaction does not impair CRT’s ability to determine or assess the Company’s performance of its obligations, and the sums due, under these Licence Terms.

 

6.3

The Company will:

 

6.3.1

keep and, irrespective of the termination of these Licence Terms, maintain (and procure that each Sub-Licensee keeps and maintains) for at least [***], true and accurate accounts and records (including underlying documents supporting those accounts and records) in sufficient detail for all sums payable under these Licence Terms to be determined; and

 

6.3.2

at CRT’s reasonable request and, subject to section 6.4 of these Licence Terms, expense, permit or procure permission for a qualified accountant nominated by CRT to inspect and audit those accounts and records and, to the extent they relate to the calculation of those sums, take copies of them. CRT may exercise its rights under this section at any time while the Licence Terms are in effect and until the [***] described in section 6.3.1 of these Licence Terms has expired, but may not perform more than one (1) audit per [***]. At CRT’s request, which it must give at least [***] in advance, the Company will assemble in one location all relevant accounts and records of the Company and its Sub-Licensees.

 

Private & Confidential

 

6.4

If, following an inspection under section 6.3.2 of these Licence terms, CRT’s nominated accountant certifies to CRT that payments in respect of any period are less than the amount properly payable in respect of that period under these Licence Terms, CRT will send a copy of the certificate to the Company. Within [***] of its receipt of the certificate, the Company will either:

 

6.4.1

pay the shortfall to CRT and, if the shortfall is more than [***] of the sum properly payable, the reasonable costs and expenses (including accountant fees) CRT incurred in making the inspection; or

 

6.4.2

notify CRT in writing that the Company disputes the certificate, in which case the dispute will be referred for resolution by an expert in accordance with clause 16.17.1 of the Agreement.

 

7

Insurance, liability and indemnity

 

7.1

Insurance. At its own cost, the Company will maintain comprehensive product liability insurance (including insurance to cover any clinical trials undertaken by it) and general commercial liability insurance with a reputable insurance company to adequately cover all its liabilities howsoever arising under this Agreement. At CRT’s request, the Company will add CRT’s interest on face of the policy or policies, and provide CRT with certification of the coverage and amount of insurance obtained and a summary of the coverage. The Company will maintain the insurance for at least [***] after the last sale of a Licensed Product or, if the coverage is of the ‘claims made’ type, for [***] after the last sale of a Licensed Product.

 

7.2

No Warranty. The Company acknowledges it has not relied on any warranty or other provision in exercising its Option or accepting the grant of the Licence, except as expressly provided in this Licence. Any conditions, warranties or other terms implied by statute or common law are excluded to the fullest extent permitted by law. Among other things, CRT gives no warranty, representation or undertaking:

 

7.2.1

as to the efficacy or usefulness or accuracy of any Result; or

 

7.2.2

that the exercise of rights granted under the Licence will not infringe the IP or other rights of any other person.

 

7.3

Indemnity. With effect from the Licence Grant Date, the Company hereby indemnifies the Charity Indemnitees from and against any and all Losses arising from or in connection with the exercise by the Company or any Sub-Licensee of any right granted under the Licence or these Licence Terms, or any act or omission of the Company or any Sub-Licensee in relation to any Licensed Product. Clause 13.3 of the Agreement will apply to claims made under the indemnity given in this section 7.3.

 

8

Term of the Licence, and its termination

 

8.1

These Licence Terms become effective on the Licence Grant Date and will remain in effect until terminated under section 8.2 of these Licence Terms or under clause 14.3 of the Agreement.

 

8.2

In addition to its termination rights Under clause 14 of the Agreement (including to terminate for material breach of any Licence Term), on written notice CRT may terminate the Agreement:

 

Private & Confidential

 

8.2.1

in its entirety if, at any time while the Licence Terms are in effect, the Company is not actively developing or commercialising at least one (1) Licensed Product;

 

8.2.2

on a Licensed Product-by-Licensed Product basis on written notice if the Company:

 

(a)

stops actively developing a Licensed Product that has been the subject of a Phase I Clinical Trial in one or more Oncology Indication, and termination will be effective for that Licensed Product only; or

 

(b)

after obtaining Regulatory Authorisation for a Licensed Product in a Major Market, fails to begin within a time expected for a similar product at a similar stage or stops actively marketing and selling that Licensed Product in that Major Market, and termination will be effective only for that Licensed Product in that Major Market.

 

If the Company disputes whether or not CRT is entitled to terminate under this section 8.2, the Company and CRT will obtain an expert determination in accordance with clause 16.17 of the Agreement.

 

Private & Confidential

 

Schedule 2

 

Step-In Agreement

 

 

This Step-In Agreement is made on __________________ 20[——] (the “Step-In Date”)

 

Between

 

(1)

Vaccitech Oncology Limited, a company registered in England and Wales under number 11655405 with registered office at The Schrodinger Building 2nd Floor, Heatley Road, Oxford Science Park, Oxford, Oxfordshire, England, OX4 4GE (the “Company”); and

 

(2)

Cancer Research Technology Limited, a company incorporated in England with number 1626049 with registered office at 2 Redman Place, London, E20 1JQ, England (“CRT”).

 

Background

 

(A)

CRT, the Company and the Charity entered into a Clinical Trial and Option Agreement on [——] (the “CTOA”) relating to the Agent.

 

(B)

Under the terms of the CTOA, the Company agreed to assign the Agent IP that is not Third Party IP (the “Company Agent IP”) and sub-license the Third Party IP to CRT in certain circumstances in return for a share of revenue generated by CRT from the commercial exploitation of the Agent IP.

 

(C)

Those circumstances have arisen and the Company wishes to assign the Company Agent IP, and sub-license the Third Party IP to CRT, and CRT wishes to accept that assignment and/or licence and sub-licence, on the terms and conditions set out below.

 

Note:

Capitalised words used in this Step-In Agreement have the meaning given to them in this Step-In Agreement or, if not defined in this Step-In Agreement, in the Glossary to the CTOA. The interpretation provisions set out in the Glossary to the CTOA also apply to this Step-In Agreement.

 

Agreed Terms

 

 

1

Assignment, Licence and exploitation

 

1.1

The Company hereby assigns to CRT with full title guarantee:

 

1.1.1

all its right, title and interest in and to the Company Agent IP and the full and exclusive benefit of it and all rights, privileges and advantages associated with such Company Agent IP;

 

1.1.2

the full right to apply for and obtain Patents or other similar forms of protection in respect of any part or parts of the subject-matter of the Company Agent IP, and the inventions disclosed in the Agent Patents that are Company Agent IP, throughout the world, including the right to claim priority from those Agent Patents; and

 

1.1.3

the right to bring proceedings for any previous or future infringement of the rights assigned.

 

1.2

The Company hereby grants to CRT:

 

Private & Confidential

 

1.2.1

a non-exclusive, irrevocable, worldwide, sub-licensable licence under all Third Party IP relating to and including Agent Patents 1-3 for a term continuing until none of the Agent Patents 1-3 remain valid and in force to research, develop, make, have made, import, use and sell Licensed Product;

 

1.2.2

a non-exclusive, irrevocable, worldwide, sub-licensable licence to use the HEK293 TetR Cell Line (the “Cell Line”) for an indefinite term to research, develop, make, have made, import, use and sell Licensed Product excluding any right to:

 

(a)

use the Cell Line for any other product or purpose;

 

(b)

to modify the Cell Line in any way or create any derivatives thereof;

 

(c)

transfer the Cell Line to any third party under this Step-In Agreement except where (i) it has notified the Company prior to any such transfer, (ii) which transfer is made for the purposes of research, developing, making, having made, importing, using or selling of the Licensed Product and (iii) where said third party is bound by the exclusions under this clause 1.2.2; and

 

1.2.3

an exclusive, irrevocable, worldwide, sub-licensable licence under all Third Party IP relating to and including Agent Patent 4 for a term continuing until Agent Patent 4 is no longer valid and in force to:

 

(a)

research, develop, make, have made, import, use and sell Licensed Product;

 

(b)

subject to the consent the Company’s licensor of Third Party IP, apply for and obtain Patents or other similar forms of protection in respect of any part or parts of the subject-matter of, and the inventions disclosed in, Agent Patent 4 throughout the world, including the right to claim priority from Agent Patent 4;

 

(c)

the right to bring proceedings for any previous or future infringement of the rights exclusively licensed under this clause 1.2.3; and

 

(d)

to the extent that the Company has rights under the Third Party Agreement for Agent Patent 4 to Control Patent(s) that are Third Party IP, the Company will transfer to CRT any control of filing, prosecution, maintenance, enforcement and defence of any of those Patent(s) to CRT.

 

Provided that the right to grant sub-licences under clauses 1.2.1, 1.2.2 and 1.2.3, is subject to CRT procuring an indemnity from the sub-licensee for the Company and its licensors of Third Party IP and their officers and employees from and against Losses arising from, or in connection with, the exercise by CRT or its sub-licensees of any rights granted under this Step-In Agreement in relation to a Licensed Product on terms reasonably acceptable to the Company (such acceptance not to be unreasonably withheld, conditioned or delayed) or on terms CRT in its reasonable discretion consider appropriate and in any event on terms no less favourable to the Company and its licensors of Third Party IP than any indemnity CRT obtains from any sub-licensee for itself.

 

1.3

Without prejudice to clause 1.1 and clause 1.2.3 above, the Company hereby grants CRT a non-exclusive, irrevocable, sub-licensable, worldwide licence under any and all Patents Controlled by the Company during the term of this Step-In Agreement that Cover the use of the Agent in combination with any other anti-cancer agent to research, develop, make, have made, import, use and sell Licensed Product.

 

Private & Confidential

 

1.4

CRT may protect (including by, among other things, filing, prosecuting and maintaining Patents), enforce and defend the Company Agent IP assigned to it under clause 1.1.1 above and the Agent Patent 4 exclusively licensed to it under clause 1.2.3 and their development and commercial exploitation at its sole discretion.

 

1.5

At CRT’s request, the Company will negotiate with CRT, in good faith, reasonable commercial terms under which CRT would be granted a sub-licensable licence under any IP Controlled by the Company that is not already assigned or licensed under this Step-In Agreement and may be necessary for the development or commercial exploitation of Agent IP.

 

1.6

Notwithstanding the rights granted under this clause 1, with effect from the Step-In Date, CRT (and any sub-licensees) shall not be permitted to undertake any research or other activities involving use of the Licensed Product in human subjects until such time as CRT indemnifies (or procures that its sub-licensees indemnify) the Company and its licensors of Third Party IP and their officers and employees from and against Losses arising from, or in connection with, the exercise by CRT or its sub-licensees of any rights granted under this Step-In Agreement in relation to a Licensed Product on terms reasonably acceptable to the Company (such acceptance not to be unreasonably withheld, conditioned or delayed). Provided that where CRT procures such indemnity from a sub-licensee, such indemnity shall be (i) on terms CRT in its reasonable discretion considers appropriate such that the Company shall not unreasonably withhold, delay or condition its acceptance of the terms of indemnification secured by CRT from any sub-licensee and access to the Agent; and (ii) in any event on terms no less favourable to the Company and its licensors of Third Party IP than any indemnity CRT obtains from any sub-licensee for itself.

 

2

Assistance and further assurance

 

2.1

Agent Know How

 

2.1.1

Within [***] after the Step-In Date, the Company will disclose to CRT any Agent Know How that has not been disclosed to CRT or the Charity under the CTOA.

 

2.1.2

CRT and its sub-licensees may use Agent Know How under the terms of this Step-In Agreement.

 

2.1.3

The Company may not disclose the Agent Know How to any third party or use it in any internal research programme.

 

2.2

Agent Materials

 

2.2.1

The Company will notify CRT within [***] after the Step-In Date of any remaining inventory or stocks of the Agent Materials or the IMP in the Company’s possession and the Cell Line (the “Surplus Material”). At CRT’s request within [***] of that notice, the Company will make the Surplus Material available for collection by CRT, and co-operate with CRT to enable CRT to collect and transport (including, if relevant, import) the Surplus Material to CRT’s premises. Ownership of and risk in the Surplus Material will transfer to CRT upon its collection by CRT except for the Cell Line, which remains the property of Oxford Genetics Limited and used by CRT under licence pursuant to clause 1.2.2(b). CRT will pay shipment and transportation costs incurred in transporting Surplus Material to its premises.

 

2.2.2

CRT and its sub-licensees may use the Surplus Material to research, develop, make, have made, import, use, offer for sale and sell Licensed Product, but not for any other purpose and provided that no rights are granted to CRT or its sub-licensees under this Step-In Agreement to modify the Cell Line or create any derivatives thereof.

 

Private & Confidential

 

2.3

The Company will:

 

2.3.1

to the extent that such documents are within its Control, or are reasonably available to the Company through databases, promptly provide to CRT, or its nominated patent agent, all documents relating to the filing, prosecution and maintenance of the Agent Patents;

 

2.3.2

execute, sign and do all instruments, applications, documents, acts and things reasonably required by CRT to enable CRT and its sub-licensees to enjoy the full benefit of the rights assigned under this Step-In Agreement;

 

2.3.3

provide any assistance reasonably required or requested by CRT to help CRT understand the Agent Know How and the Agent Materials, and their use, including to prepare any related regulatory application (including by providing information in the Company’s Control related to the origin and development of the Agent, and any distributions of them to third parties);

 

2.3.4

provide any assistance reasonably required or requested by CRT with respect to any Materials required for the manufacture of GMP Agent Materials and/or transfer of such Materials to CRT and/or CRT’s sub-licensees; and

 

2.3.5

disclose to CRT information that comes to the attention of the Company after the Step-In Date that is relevant to the manufacture, storage, handling or safety of the Agent.

 

3

Revenue share and Reporting

 

3.1

In this clause 3, “Net Revenue” means:

 

[***].

 

3.2

In the following scenarios, CRT and the Company will share Net Revenue in the following proportions:

 

3.2.1

where the Company does not exercise the Option within the Option Period and with effect from the expiry of the Option Period, pursuant to clause 7.5 of the Agreement, CRT exercises its step- in rights under this Step-In Agreement before the Commencement of a Phase II trial:

 

CRT                        [***];

 

the Company          fifty-five percent (55%).

 

3.2.2

where the Company exercises its Option within the Option Period pursuant to clause 7.3 but CRT subsequently exercises step-in rights under this Step-In Agreement before the Commencement of a Phase II trial:

 

CRT                        [***];

 

the Company          [***].

 

3.2.3

where the Company exercises its Option within the Option Period pursuant to clause 7.3 but CRT subsequently exercises step-in rights under this Step-In Agreement following the Commencement of a Phase II trial:

 

CRT                        [***];

 

the Company          [***].

 

Private & Confidential

 

3.2.4

where the Company exercises its Option within the Option Period pursuant to clause 7.3 but CRT subsequently exercises step-in rights under this Step-In Agreement following the Commencement of a Phase III trial:

 

CRT                        [***];

 

the Company          eighty percent (80%).

 

3.3

If CRT receives Gross Revenue as consideration for a grant of rights that includes both Agent IP and IP that is not Agent IP, CRT will apportion in a fair and reasonable manner the consideration for Agent IP, on the one hand, and the IP that is not Agent IP, on the other.

 

3.4

If CRT receives non-monetary consideration, such as shares, from the commercial exploitation of Agent IP, that non-monetary consideration will not form Gross Revenue until CRT receives cash proceeds from its disposal or other monetary realisation. CRT may determine the timing of and price for that monetary realisation at its discretion, however it is understood and accepted by the Parties that should sublicensee be publicly-traded or there be an initial public offering of any sub-licensee on a regulated stock exchange, any non-monetary consideration received from such sub-licensee as securities by CRT shall be payable (or transferable) to Company, and Company shall be entitled to sell its share of such non-monetary consideration without consent or permission of CRT. Dividends or similar monetary consideration received in respect of non-monetary consideration are Gross Revenue.

 

3.5

Within [***] after the end of each year, the CRT will send to Company a written statement detailing in respect of that year:

 

3.5.1

All Gross Revenue received by CRT in that year

 

3.5.2

the type and value of deductions made in calculating Net Revenue;

 

3.5.3

the share of Net Revenue due to the Company in respect of that year; and

 

3.5.4

any further information needed to calculate Net Revenue or the share due to the Company (including any currency conversions and the rates used).

 

3.6

CRT will send to the Company a ‘nil’ report if no sums were payable as Net Revenue share in that year.

 

3.7

CRT will provide information or documents requested by the Company necessary to verify amounts due under this Step-In Agreement. CRT may redact confidential information of its Sub-Licensees from that information or documents so long as the redaction does not impair the Company’s ability to determine or assess the sums due, under this Step-In Agreement.

 

3.8

CRT will:

 

3.8.1

keep and maintain (and procure that each Sub-Licensee keeps and maintains) for at least [***], true and accurate accounts and records (including underlying documents supporting those accounts and records) in sufficient detail for all sums payable under this Step-In Agreement to be determined; and

 

3.8.2

at the Company’s reasonable request and, subject to section 3.9 of this Step-In Agreement, expense, permit or procure permission for a qualified accountant nominated by the Company to inspect and audit those accounts and records and, to the extent they relate to the calculation of those sums, take copies of them. The Company may exercise its rights under this section at any time with reasonable notice, while this Step-In Agreement is in effect and until the [***] described in section 3.8.1 of this Step-In Agreement has expired, but may not perform more than one (1) audit per [***]. At the Company’s request, which it must give at least [***] in advance, CRT will assemble in one location all relevant accounts and records of CRT and its Sub-Licensees.

 

Private & Confidential

 

3.9

If, following an inspection under section 3.8.2 of this Step-In Agreement, the Company’s nominated accountant certifies to the Company that payments in respect of any period are less than the amount properly payable in respect of that period under this Step-In Agreement, the Company will send a copy of the certificate to CRT. Within [***] of its receipt of the certificate, CRT will either:

 

3.9.1

pay the shortfall to the Company and, if the shortfall is more than five per cent (5%) of the sum properly payable, the reasonable costs and expenses (including accountant fees) the Company incurred in making the inspection; or

 

3.9.2

notify the Company in writing that CRT disputes the certificate, in which case the dispute will be referred for resolution by an expert in accordance with clause 16.17.1 of the Agreement.

 

4

Confidentiality

 

4.1

During and after expiry of this Step-In Agreement, each party will keep confidential and not disclose to any person other than to its officers, employees, appointed experts or professional advisors whose province it is to know, any proprietary information of the other party obtained by it under this Step-In Agreement. Agent Know How or proprietary information of the Charity is confidential information of CRT. The Company will keep Agent Know How confidential under clause 2.1.3.

 

4.2

Clause 4.1 does not apply to other information that:

 

4.2.1

is or was known to the receiving party at the time of disclosure under this Step-In Agreement, as shown by the receiving party’s written records, without any obligation to keep it confidential;

 

4.2.2

at the time disclosed to or obtained by the receiving party, is generally available to the public other than due to a breach of the receiving party’s obligations under this Step-In Agreement;

 

4.2.3

is required by applicable law to be disclosed, so long as the receiving party gives the disclosing party notice of the proposed disclosure as soon as reasonably practicable; or

 

4.2.4

a party uses or discloses in exercising or enforcing its rights under this Step-In Agreement.

 

4.3

Each party will inform all personnel and third parties to whom it discloses confidential information of the other party of the provisions of this clause 4.

 

4.4

With effect from the Step-In Date, as between CRT and the Company only, clause 10 of the CTOA will cease to apply and this clause 4 will replace and supersede the obligations and rights of CRT and the Company, but not the Charity, under clause 10 of the CTOA.

 

5

Warranties

 

5.1

As at the date of the CTOA, and subject to clause 5.4, repeated at the date of execution of the Step-In Agreement, the Company warrants and represents to CRT that:

 

Private & Confidential

 

5.1.1

to the best of its knowledge and belief:

 

(a)

immediately before the assignment made under clause 1.1, the Company was the legal and beneficial owner of the assigned Company Agent IP free of any third party rights or encumbrances;

 

(b)

the possession and use of the Agent by CRT or its sub-licensees will not infringe the IP or other rights of any third party (including inventor) that exist on the Step-In Date;

 

(c)

all Surplus Material to be supplied under clause 2.2.1 has been manufactured, handled and stored at all times in accordance with GMP and in compliance with the applicable Clinical Trial Legislation and will be made available for collection from within the European Union; and

 

(d)

it has not done or failed to do anything that may materially prejudice the further development of the Agent, or adversely affect any application that may be made to any Regulatory Authority concerned with the approval of Licensed Products and their sale;

 

5.1.2

all Third Party Agreements are and, subject to the remainder of this clause 5.1, will remain in full force and effect while the relevant Third Party IP to which Third Party Agreement relates remains valid, and the Company will comply with its obligations under the Third Party Agreements;

 

5.1.3

to the best of its knowledge and belief, there are no outstanding breaches of any Third Party Agreement by any person party to them and there are no acts or circumstances that may give any person the right to terminate any Third Party Agreement;

 

5.1.4

it will notify the Charity in writing immediately upon becoming aware of any act or circumstance described in clause 5.1.3, and will not enter into, amend, terminate or assign any Third Party Agreement without CRT’s prior written consent;

 

5.1.5

it will not at any time during the term of this Step-In Agreement grant to any third party any right including a licence, which right will, or may, compete with the exclusive rights granted by the Company to CRT under Agent Patent 4 or permit the use of the same combination of MAGE and NYESO antigens as used in the Licensed Product;

 

5.1.6

it will procure that its parent company, Vaccitech Limited (company number 0973585) (“Vaccitech”) shall not at any time during the term of this Step-In Agreement grant to any third party any right including a licence, which right will, or may, conflict with the exclusive rights granted by the Company to CRT under Agent Patent 4 or permit the use of the same combination of MAGE and NYESO antigens as used in the Licensed Product; and

 

5.1.7

it will not (and shall procure that Vaccitech shall not) enable a third party to research, develop, make, have made, import, use or sell the Licensed Product developed by CRT or its sub-licensees during the term of the Step-In Agreement.

 

5.2

The Company will give CRT as much notice as is practicable if any threat is made to terminate any Third Party Agreement or if any Third Party Agreement is terminated by any person other than the Company and, at CRT’s request and direction, the Company will use its commercially reasonable efforts to enable CRT to take a licence of the Third Party IP licensed under that Third Party Agreement or an assignment of the relevant Third Party Agreement.

 

5.3

Nothing in this Step-In Agreement imposes, or will be deemed to impose, on CRT any liability in relation to the further development and commercial exploitation of the Agent or the Agent IP.

 

5.4

On or before the Step-In Date, the Company shall provide a notice to CRT of any disclosures which result in exceptions to the representations and warranties under clause 5.1 of this Agreement and in good faith work with CRT to mitigate the effect of any such exceptions. Subject to the contents of such notice, the representations and warranties of the Company contained in clause 5.1 of this Agreement will be true and correct at and as of the Step-In Date with the same effect as though made by the Company at and as of the Step-In Date.

 

Private & Confidential

 

6

General

 

6.1

This Step-In Agreement comes into force on the Step-In Date and will remain in force until CRT no longer has the potential to receive Gross Revenue. The surviving terms and conditions of the CTOA will, in accordance with its terms, continue in full force and effect.

 

6.2

This Step-In Agreement (and any non-contractual dispute or claim related to it or its subject matter) is governed by the laws of England and Wales. Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the English courts (except disputes under clause 4, where jurisdiction is non-exclusive).

 

This Step-In Agreement is entered into by an authorised representative of each party on the Step-In Date:

 

SIGNED and validly executed on behalf of

the Company

Signature

Name

Position (authorised signatory)

Cancer Research Technology Limited

Signature

Name

Position (authorised signatory)

 

Private & Confidential

 

Schedule 3

 

Clinical Safety Information Exchange Template

 

 

For the purposes of this Clinical Safety Information Exchange Template only, “IMP” (investigational medicinal product) shall include any investigational medicinal product that contains the chimpanzee adenovirus (ChAdOx-1 and ChAdOx-2) or Modified Vaccinia Ankara (MVA) platform technology.

 

Either party may request reasonable changes to the safety exchange mechanism set out in this Schedule 3 to take into account any parallel study proposed by the Company and the Parties shall respond to any such request diligently, reasonably and in good faith.

 

For the purposes of this Clinical Safety Information Exchange Template, the Parties agree the following:

 

1.

DEFINITIONS

 

“Adverse Event” (or “AE”) is any untoward, undesired or unplanned medical occurrence in a patient administered an IMP, a comparator product or an approved drug.

 

An AE can be a sign, symptom, disease, and/or laboratory or physiological observation that may not be related to the IMP or comparator.

 

An AE includes but is not limited to those in the following list:

 

·

a clinically significant worsening of a pre-existing condition. This includes conditions which may resolve completely and then become abnormal again;

 

·

an AE occurring from an overdose of an IMP, whether accidental or intentional; and

 

AEs occurring from lack of efficacy of an IMP, for example, if the Investigator suspects that a drug batch is not efficacious or if the Investigator suspects that the IMP, for example, if the Investigator suspects that a drug batch is not efficacious or if the Investigator suspects that the IMP has contributed to disease progression. Other reportable events which must be treated as AEs include:

 

·

pregnancy exposure to an IMP. Any pregnancy occurring in a patient or a patient’s partner during treatment with an IMP or occurring within [***] of the last dose of study drug administration, must be reported within the same timelines as a Serious Adverse Event (as defined below), even if the patient has been withdrawn from the clinical trial. The outcome of the pregnancy should be reported, including live birth (full term or preterm birth), stillbirth, spontaneous abortion, and induced abortion;

 

·

overdose (any dose above that specified in the protocol, not necessarily intentional), with or without an AE;

 

·

inadvertent or accidental exposure to an IMP with or without an AE; including for example, spillage of the IMP that contaminates staff and

 

·

any AE that could be related to the protocol procedures including those which could modify the conduct of the clinical trial.

 

“Development International Birth Date” (or “DIBD”) means the first date that clinical trial authorisation is given by a Regulatory Authority for an interventional clinical trial using the IMP anywhere in the world.

 

Private & Confidential

 

“Development Safety Update Report” (or “DSUR”) means a periodic safety report in relation to use of the IMP in the Clinical Trial which: (i) is written by the Charity in accordance with the Charity’s standard operating procedures or by the Company; (ii) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (iii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within [***] of the anniversary of the date of the DIBD.

 

“Global Development Safety Update Report” (or “GDSUR”) means a periodic safety report in relation to use of the IMP in two or more clinical trials which: (i) meets the standards of the ICH Guidelines for Development Safety Update Reports as per ICH Topic E2F; and (ii) is required to be submitted annually to the Regulatory Authority in each ICH member state in which the clinical trial is conducted (and to the applicable Ethics Committee) within [***] of the anniversary of the date of the DIBD.

 

“Investigator’s Brochure” (or “IB”) means a compilation of the clinical and non-clinical data on the Investigational Medicinal Product or products which are relevant to the clinical trial of the product or products in human subjects.

 

“Medically Important Event” (or “MIE”) means any event that may jeopardise the patient’s safety or may require intervention to prevent one of the outcomes listed below. The Parties may identify certain additional events which must be treated as medically important by both Parties, and subject to expedited reporting.

 

“Serious Adverse Event” (or “SAE”) means any untoward medical occurrence or effect (an adverse event) that at any dose, regardless of causality or expectedness, results in:

 

·

death;

 

·

is life-threatening;

 

·

requires in-patient hospitalisation or prolongs existing in-patient hospitalisation;

 

·

results in persistent or significant incapacity or disability;

 

·

is a congenital anomaly or birth defect; or

 

·

is any other Medically Important Event (as defined above).

 

These characteristics/consequences have to be considered at the time of the event. For example, regarding a life-threatening event, this refers to an event in which the subject was at risk of death at the time of the event; it does not refer to an event which hypothetically might have caused death if it were more severe.

 

“Suspected Unexpected Serious Adverse Reaction” (or “SUSAR”) means all serious adverse events that are suspected to be related to an investigational medicinal product and that are unexpected. The expected adverse reactions are those previously observed and documented for the IMP. Their nature and intensity are listed in the reference safety information included in the investigator brochure.

 

“Sponsor” means an individual, company, institution or organisation which takes responsibility for the initiation, management and/or financing of a clinical trial.

 

“Urgent Safety Measure” (or “USM”) means a procedure which is not defined by the Protocol that can be put in place with immediate effect without needing to gain prior authorisation by the Ethics Committee (or Regulatory Authority where applicable), in order to protect clinical trial participants from any immediate hazard to their health and safety.

 

Private & Confidential

 

2.

PROCEDURE

 

2.1

Reporting of SAEs

 

2.1.1

Reporting of SAEs by the investigational sites to the Company (or any of its licensees or sub-licensees) or the Charity, as the case may be

 

The Company or the Charity (as appropriate) shall, if it (or any of its licensees or sub-licensees) is carrying out clinical trials on IMP, use its reasonable endeavours to:

 

·

monitor, and ensure that it receives from the investigational site within twenty-four (24) hours of the investigator or any member of the study team becoming aware of the event) initial reports on SAEs from clinical trials of the IMP other than the Clinical Trial; and

 

·

actively seek follow-up information from the investigational site on SAEs from clinical trials of the IMP other than the Clinical Trial until full details (including diagnosis if available, causality, outcome and cause of death if fatal) are reported.

 

·

Ensure that all its regulatory obligations as Sponsor of the clinical trials are met.

 

The Charity shall use its reasonable endeavours to:

 

·

monitor, and ensure that it receives from the investigational site within twenty-four (24) hours of the Investigator or any member of the study team becoming aware of the event) reports on SAEs from the Clinical Trial; and

 

·

actively seek follow-up up information from the investigational site on SAEs from the Clinical Trial until full details (including diagnosis if available, causality, outcome, and cause of death if fatal) are reported.

 

·

Ensure that all its regulatory obligations as Sponsor of the Clinical Trial are met.

 

2.1.2

Reporting of SAEs to the other Party

 

Within [***] of receipt by the Company or its licensees for fatal and life-threatening SUSARs (where day 0 is the day the Company became aware of the event) and within [***] of receipt by the Company for all other SUSARs, the Company shall report to the Charity all initial and follow-up information on all SUSARs from clinical trials with the IMP for which the Company or its licensees is the sponsor.

 

The reports shall be in the form of a CIOMS form.

 

The Company shall send reports preferably as e-mail attachments to:

 

Pharmacovigilance Group

Centre for Drug Development, Cancer Research UK

E-mail: [***]

 

Within [***] of receipt by the Charity for fatal and life-threatening SUSARs (where day 0 is the day the Charity became aware of the event) and within [***] of receipt by the Charity for all other SUSARs, the Charity shall report to the Company all initial and follow-up information on all SUSARs from clinical trials with the IMP for which the Charity is the Sponsor. Provided that the Charity will use reasonable endeavours to report such SAEs and SUSARs to the Company at least [***] day before reporting them to MHRA.

 

Private & Confidential

 

The reports shall be in the form of a CIOMS form.

 

The Charity shall send reports as e-mail attachments to:

 

[***]

 

2.1.3

Late Reports

 

If either Party fails to provide reports to the other Party within the timelines described above, they must provide to the other Party a legitimate reason for lateness and immediately provide evidence of corrective action taken.

 

2.1.4

Non-sponsored safety data

 

In the event that the Company (or designee) receives SAE information originating from the Charity Clinical Trial from other than the Charity itself, the Company is responsible for redirecting the information to the Charity within [***] of receipt. The Company must not contact the Investigational site for information and should not be involved in the review of the safety data collection relating to the Charity Clinical Trial. The Company’s view and opinions on the Charity Clinical Trial will not be taken into account during reviews and decision making.

 

In the event that the Charity receives SAE information originating from the Company sponsored trial from other than the Company itself, the Charity is responsible for redirecting the information to the Company (or designee) within [***] of receipt. The Charity must not contact the Investigational site for information and should not be involved in the review of the safety data collection on the Company sponsored clinical trial. The Charity’s view and opinions on the Company sponsored trial(s) will not be taken into account during reviews and decision making.

 

2.2

Expedited Reporting to Regulatory Authorities and Ethics Committee(s)

 

Each Party shall fulfil its local regulatory obligations in relation to the clinical trials it sponsors.

 

The Company or its licensees will report to the Eudra Vigilance Clinical Trials Module (EVCTM) all SUSARs originating from clinical trials with the IMP for which it is the Sponsor.

 

The Charity will, notwithstanding the provisions of section 2.1.2 above, report to the Regulatory Authorities all SUSARs originating from clinical trials with the IMP for which it is the Sponsor in accordance with GCP and Clinical Trial Legislation.

 

2.3

Quarterly Exchange of Line Listings

 

During the currency of the clinical trials, with a view to reconciling SAEs between the Parties, a line listing of all SAEs received during the previous quarter originating from clinical trials with the IMP for which the Party is the Sponsor shall be exchanged between the Parties on a quarterly basis.

 

Each line listing shall include sufficient information to identify the patient the event, the causality assessment and the outcome. The following information will be included at the minimum but not limited to, case reference ID, study ID, patient ID, (Number, age and gender) SAE (verbatim term and preferred term), date event(s) became serious, investigator causality to IMP, maximum grade using NCI CTCAE criteria or severity grading, stop date of the event and the outcome of event.

 

Private & Confidential

 

Each Party shall send line listings preferably as e-mail attachments to the contact details specified in 2.1.2.

 

2.4

Other Trials of the Investigational Medicinal Product(s)

 

The Company shall keep the Charity informed about clinical trials in which IMP is being used. The Company shall do this by i) providing to the Charity for each clinical trial a summary protocol; ii) a summary of all protocol amendments relating to safety on an ongoing basis; and iii) provide a [***] summary of the status of each such clinical trial based on an agreed template as part of the Progress Report provided under clause 2.3.1 of the Clinical Trial and Option Agreement between the Parties. The Company will be open to questions on safety issues arising from these documents.

 

2.5

Development Safety Update Report

 

2.5.1

The Charity will be responsible for the preparation and submission of the DSUR for their own sponsored clinical trial(s).

 

2.5.2

In the event that there are other clinical trials of the IMP being conducted other than the Clinical Trial, the Charity shall be responsible for the preparation and submission of the GDSUR in accordance with its SOP and template.

 

The Development International Birth Date (DIBD) used by the Company is [—].

 

The Charity will be responsible for the preparation of the GDSUR and will responsible for requesting data listings, reports and information required to fulfil the GDSUR obligations from the Company. The Charity shall provide the Company with a draft for review. The reviewing Party shall have [***] to comment on the draft. The Charity shall give due consideration to any comments that the reviewing Company might make. The Charity will hold the overriding decisions on the wording. The Charity responsible for preparation of the GDSUR will provide the reviewing Company with a copy of the final report by regulatory [***].

 

2.6

Investigator’s Brochure (“IB”) and Investigational Medicinal Product Dossier (“IMPD”)

 

The Charity will produce the IB. The Party producing the IB will provide an update to the IB annually or more frequently as appropriate where new relevant information becomes available, or provide confirmation that an annual review of safety data has been carried out and no update is required.

 

The Party responsible for producing and updating the IB shall provide the other Party with a draft for review. The reviewing Party shall have [***] to comment on the draft. The responsible Party shall give due consideration to any comments that the reviewing Party might make and must promptly provide the other Party with a copy of each version of the IB within [***] of the IB version being finalised.

 

The Charity will produce the Investigational Medicinal Product Dossiers. The Company shall provide the Quality sections for these documents within agreed timelines to meet an agreed CTA submission date.

 

The Party responsible for producing and updating the IMPD shall provide the other Party with a draft for review. The reviewing Party shall have [***] to comment on the draft. The responsible Party shall give due consideration to any comments that the reviewing Party might make and must promptly provide the other Party with a copy of each version of the IMPD within [***] of the IMPD version being finalised.

 

2.7

Safety Information from Other Sources

 

Each Party shall promptly review all information concerning safety of the IMP(s) that is obtained or otherwise received from any source, foreign or domestic, including data derived from clinical trials, epidemiological studies, animal experiments, commercial marketing experience, reports as part of scientific literature and unpublished scientific papers.

 

Private & Confidential

 

Any such information that is deemed important, i.e. could result in changes to protocols, patient information sheets or IB, shall be communicated within [***] from the date that it is deemed important to the other Party using the same means as for expedited SAE reports.

 

For safety data that has a regulatory impact such as urgent safety measures and dear investigator letters, these should be communicated within [***] of being confirmed.

 

2.8

Reconciliation

 

2.8.1

During this Agreement, the Company shall diligently cooperate with the Charity in carrying out data reconciliations in accordance with the procedure set out in this clause 2.8.

 

2.8.1.1

the databases within the scope of this clause shall be those that hold any safety data relating to the Clinical Trial, other than those that the Parties agree should be excluded. As at the date of this Agreement, the databases listed in Table 1 below are deemed to be within scope.

 

Table 1

 

Name of Controlled   Database (#1)	Name of Controlled   Database (#2)
Medidata RAVE (clinical database) (Charity)	TARA (safety database) (Charity)

 

The Parties will cooperate to identify any databases that should be brought within scope. Each such database is referred to as a “Controlled Database”.

 

2.8.1.2

the data fields within each Controlled Database that shall be reconciled shall be those that the Charity may specify from time to time and as acting reasonably, the Company agrees. As at the date of this Agreement, the data fields listed in each column of the table in Table 1 are specified and agreed for the purposes of this clause 2.8.

 

2.8.1.3

the data specified in the table shall be sent by the Company to the Charity at such intervals and in such format as the Charity may from time to time acting reasonably specify, but in any event no less frequently then every three months.

 

2.8.1.4

the data shall be sent electronically to the following email address: [***] and/or such other email address as the Charity may in writing specify for this purpose. The Charity shall promptly acknowledge receipt and if the Company does not receive the acknowledgement within 3 hours of sending the email, then it shall query the matter with the Charity at the following email address [***] or telephone number: [***] until the matter is resolved.

 

2.8.1.5

the Charity shall then carry out the reconciliation against the data it holds and inform the Company of any discrepancies as soon as practicable but in any event within [***] of receipt of the relevant email from the Company. The Company shall respond to the Charity within [***] either confirming the discrepancy or querying it. If confirmed, the Company shall make the necessary entries in its relevant Controlled Database. If not confirmed, then the Company shall cooperate with the Charity in resolving the discrepancy urgently and then making the necessary entries in its relevant Controlled Databases. In any event, if the Company fails to respond to the Charity within [***] it shall promptly provide the Charity with its rationale for failing to do so.

 

Private & Confidential

 

2.8.1.6

the Company shall cooperate in developing and using templates that the Charity may suggest to use for reconciliation purposes.

 

2.8.2

The Parties shall cooperate in good faith in investigating and making improvements to the procedure above that either Party wishes to initiate from time to time.

 

2.8.3

The Charity shall in good faith and diligently cooperate with the Company in carrying out data reconciliations for any Parallel Study in accordance with a procedure to be confirmed by the Company and Charity in writing not less than [***] prior to commencing the Parallel Study.

 

2.9

Regulatory Inspections

 

Each Party promptly shall notify the other upon becoming aware of any impending inspection that concerns the Clinical Trial or the IMP and ensure that the other has reasonable notice to prepare for that inspection.

 

Each Party shall provide the other Party with such assistance as that Party may reasonably request to enable such Party to respond to and comply with such inspection. A Party shall inform the other Party promptly in writing of any critical inspection findings made by a Regulatory Authority that might impact the reliability, completeness or reporting of the safety data and other information that the Parties are obliged to exchange pursuant to this Schedule.

 

2.10

Developments and Enquiries

 

Each Party shall advise the other Party as soon as possible, within [***] at the latest, of any regulatory or other developments affecting the safety of the IMP, e.g., proposed recalls, labelling and other registration dossier change, any proposed changes to manufacturing, IMP quality complaints or quality issues.

 

Each Party shall advise the other Party as soon as possible, within [***] at the latest, of any enquires from Regulatory Authorities and Ethics Committees concerning the safety of the IMP(s). The Parties shall collaborate fully, and in a timely manner, in providing a response to such enquiry.

 

2.11

Language

 

The Parties agree to communicate with each other and prepare documents on the Investigational Medicinal Products in English.

 

Private & Confidential

 

Schedule 4

 

Clinical Trial Outline

 

 

[***] 

 

Private & Confidential

 

Schedule 5

 

Agreed Consents of Licences and Deeds of Covenant

 

 

[***]

 

Private & Confidential

 

Glossary

 

 

Definitions

 

The words and phrases in this Agreement have the meaning set out below, unless the context requires otherwise. Words and phrases in this Agreement not defined below, but which are defined in the Clinical Trial Legislation have the meaning given to them in the Clinical Trial Legislation.

 

“Affiliate”	means an entity that, whether now or in the future, Controls, is Controlled by or is under common Control with a Party, and “Control” means in respect of any corporate relationship, the possession (directly or indirectly) of fifty per cent (50%) or more of the voting stock or equity interest of an entity with the power to vote or control management decisions of that entity through the ownership of securities or by contract or otherwise. When used in respect of an entity, “Control” and “Controlled by” have a corresponding meaning;
“Agent”	means the Material identified as the “Agent” on the Cover Sheet;
“Agent IP”	means:   a)       the Agent Know How;   b)       the Agent Materials; and   c)       the Agent Patents;
“Agent Know How”	means [***];
“Agent Materials”	means the Materials identified in the Cover Sheet as ‘Agent Materials’;
“Agent Patents”	means:   a)       the Patents identified in the Cover Sheet as ‘Agent Patents’;   b)       all Patents Controlled by the Company at any time during the Term that Cover the Agent; and   c)       all Patents that derive priority from or share the same priority as the Patents identified in (a) or (b);
“Agreement”	means this agreement, including the Cover Sheet, Schedules 1, 2, 3, 4 and 5, and Glossary;
“Available On The NHS”	means in relation to a Licensed Product:   a)       [***]; or   b)       [***];
“Box”	means the corresponding box in the Payments section of the Cover Sheet;
“Charity Indemnitees”	has the meaning given in clause 13.2;
“Claim”	has the meaning given in clause 13.3.1;

 

Private & Confidential

 

“Clinical Trial”	has the meaning given in clause 1.1;
“Clinical Trial Legislation”	means the European Community Directives 2001/20/EC, 2003/94/EC and 2005/28/EC, any national legislation that implements them or is otherwise applicable, and any relevant guidance to that legislation;
“Clinical Trial Subject”	means a subject, whether healthy volunteer or patient, in the Clinical Trial;
“Commencement”	means, in respect of a Clinical Trial, the first dosing of a human subject in that Clinical Trial;
“Commercially Reasonable Efforts”	means, in respect of the Company or a Sub-Licensee, the efforts and resources commonly used by a company of a similar size and with similar resources for a product at a similar stage in its life cycle, with the aim of developing that product in a diligent and timely manner, taking into account safety, efficacy and patent or other proprietary positions;
“Company”	means the entity identified in the Cover Sheet as the ‘Company’;
“Company Indemnitees”	has the meaning given in clause 13.1;
“Competing Programme”	means a research and development programme under which [***];
“Confidential Information”	means all information designated as confidential by any Party in writing together with all other information relating to the business, affairs, technology, products, developments, trade secrets, Know-How, personnel, customers, agents, distributors and suppliers of a Party or of a proprietary nature disclosed by the Disclosing Party, that is not in the public domain and is acquired by another Party under this Agreement. Results are the Confidential Information of the Charity and CRT;
“Contributors”	means third parties that perform activities under, in support of or for the Clinical Trial, and include, among others:   a)       the chief and principal investigators that manage or supervise the Clinical Trial and all other investigators;   b)      experts (including members of the Charity’s expert committees or any other person not an employee of the Charity whom the Charity engages to advise the Charity on the Clinical Trial);   c)       NHS Trusts; and   d)       sub-contractors;
“Control”	means, with respect to any Material, Know How or IP, the possession (whether by ownership, licence or other right, other than pursuant to this Agreement) by a Party of the ability to grant to another Party access or a licence (or sub-licence) as provided herein under such item or right without violating .the terms of an agreement or other arrangement with any third party. When used in respect of Material, Know or IP, “Control”, “Controlling” and “Controlled by” have a corresponding meaning;

 

Private & Confidential

 

“Cover”	means, with respect to a Patent, that the making, having made, using, selling, offering for sale or importing of a material or practice of a claimed method would infringe a claim (or, if not yet issued, would infringe if the claim were to issue) of that Patent in the country in which the activity occurs, and “Covered” has a corresponding meaning;
“Cover Sheet”	means the cover sheet to this Agreement;
“Charity Indemnitees”	the Charity, CRT, the Contributors and their respective officers, employees, subcontractors and agents;
“Data Exclusivity Period”	means any period of clinical trial data or other regulatory exclusivity, or other periods under national implementations in the European Union of Article 10.1 of Directive 2001/EC/83 and all equivalents elsewhere in the Territory;
“Data Package”	has the meaning given in clause 10.7;
“Data Protection Requirements”	has the meaning given in clause 16.6;
“Development Plan”	means a development plan that describes:   a)      the steps to be taken, in accordance with best practice in the pharmaceutical industry, to develop Licensed Products in the Field and the Territory;   b)       the relevant timescales within which such steps will be taken; and   c)       the estimated costs associated with each step;
“Early Access to Medicines Schemes” (or “EAMS”)	means schemes (whether statutory or not) offered by Regulatory Authorities directed towards making available, on an expedited basis, medicines that offer potential benefit to patients with no treatment options or a major therapeutic advantage over existing treatments. EAMs include Medicines and Healthcare Products Regulatory Agency’s “Promising Innovative Medicines” (or “PIM”) designations and EMA’s proposed “PRIME” (Priority Medicines) scheme, and successor or similar schemes;
“Start Date”	means the date identified in the Cover Sheet as the “Start Date”;
“Election Period”	has the meaning given in clause 13.3.1;
“Exclusive Results”	has the meaning given in clause 6.1;
“Executive Officers”	means: Chief Executive Officer of the Company, the Chief Executive Officer of CRT and the Director of the Charity’s Centre for Drug Development;
“Field”	means [***];
“First Commercial Sale”	[***];
“Force Majeure”	has the meaning given in clause 16.7.1;

 

Private & Confidential

 

“GMP”	means the principles of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use required by the laws of the European Union, including Clinical Trial Legislation, Eudralex Volume 4, ICHQ7a Good Manufacturing Practice Guidance and ‘EU Guidelines to Good Manufacturing Practice Medicinal Agents for Human and Veterinary Use, Annex 1 ‘Manufacture of Sterile Medicinal Products’ and Annex 2 ‘Manufacture of Biological active substances and Medicinal Products for Human Use’, Annex 13: Investigational Medicinal Agents’;
“GMP Agent Materials	means Materials identified in the Cover Sheet as “GMP Agent Materials”;
“IB”	has the meaning given in clause 2.5;
“IMP”	means the preparation of the Agent that is the subject of the Clinical Trial and for the purposes of the Clinical Safety Information Exchange Template only, has the meaning given in Schedule 3;
“IMPD”	has the meaning given in clause 2.5;
“Indemnified Person”	has the meaning given in clause 13.3.1;
“Indication”	means [***];
“Insolvency Event”	means any of the following occurring in respect of a Party:   a)       a voluntary arrangement is proposed or approved or administration order made;   b)       a receiver or administrative receiver is appointed over any of that Party’s assets;   c)      if circumstances arise that entitle the Court or a creditor to appoint a receiver, administrator or administrative receiver or make a winding-up order or similar;   d)    undertakings or a winding-up resolution or petition is passed (otherwise than for the purpose of solvent reconstruction or amalgamation); or   e)       equivalent action is taken against or by the applicable Party due to its insolvency or in consequence of debt;
“IP”	means all Patents, Know How, copyright, database rights, design rights, moral rights, rights in trade names, logos and trade and service marks, domain names, rights in Materials and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of them which may subsist anywhere in the world, whether or not any of them are registered, including any application for registration of any of them;
“JPT”	has the meaning given in clause 2.1.1;
“Know How”	means [***];
“Licence”	has the meaning given in clause 7.1;
“Licence Grant Date”	has the meaning given in section 1 of the Licence Terms;
“Licence Terms”	means the terms and conditions set out in Schedule 1, which come into effect upon exercise of the Option;

 

Private & Confidential

 

“Licensed Product”	means any product:   a)       whose application for any Regulatory Authorisation includes any Result; or   b)       that contains the [***]; or   c)       is Covered by [***];
“Losses”	means losses, damages, costs and expenses (including legal costs and expenses);
“Major Markets”	means [***];
“Materials”	means any chemical or biological substance including any: organic or inorganic element or compound; gene; vector or construct including plasmids, phages, bacterial vectors, bacteriophages and viruses; host organism including bacteria, fungi, algae, protozoa and hybridomas; eukaryotic or prokaryotic cell line or expression system or any development strain or product of that cell line or expression systems; protein including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any fragment of a protein or a peptide enzyme or antibody; assay or reagent; any plasma or tissue; or any other genetic or biological material or micro-organism or any transgenic animal;
“Milestone Event”	means the milestones described in the Cover Sheet as “Milestone Events”;
“Milestone Payments”	has the meaning given in section 5.2 of the Licence Terms;
“NDA”	means, in relation to any Licensed Product, a biologies license application, new drug application, supplementary new drug application, abbreviated new drug application or any of their equivalents filed with the United States Food and Drugs Administration (FDA) or any successor to it, a marketing authorisation application or its equivalent filed with the European Medicines Agency (EMEA) or any successor to it, or a marketing authorisation application or a product licence application or equivalent filed with the relevant Regulatory Authority in any country or region in the Territory;
“Net Sales”	means, [***];
“Non-Exclusive Results”	has the meaning given in clause 6.1;
“Oncology Indication”	means [***];
“Option”	has the meaning given in clause 7.1;
“Option Period”	has the meaning given in clause 7.3;
“Patent”	means any patent application or granted patent or similar or equivalent form of protection anywhere in the world, including utility model and design patents and certificates of invention and all divisional, continuations, continuations-in-part, reissues, renewals, extensions, additions, supplementary protection certificates;

 

Private & Confidential

 

“Phase 1 Clinical Trial	means a clinical trial in which a Licensed Product is administered to human subjects at multiple dose levels with the primary purpose of determining safety, metabolism, and pharmacokinetic and pharmacodynamic properties of the Licensed Product, and consistent with 21 CFR § 312.21(a) and any microdosing clinical trial conducted pursuant to the FDA’s 2006 Guidance on Exploratory Investigational New Drugs or any equivalent arrangements;
“Phase II Clinical Trial”	means [***];
“Phase III Clinical Trial”	means [***];
“PIP”	means [***].
“pound” and “£”	means British pound sterling;
“Price Approval”	means any approval or determination of pricing or pricing reimbursement in those countries in the Territory where Regulatory Authorities approve or determine pricing or pricing reimbursement for pharmaceutical products;
“Progress Report”	has the meaning given in clause 2.3.1;
“Project Plan”	has the meaning given in clause 1.3;
“Project Leader”	means the individual identified in the Cover Sheet by each Party as its ‘Project Leader’, or any replacement notified to the other Parties;
“Quarter”	means any of the three-monthly periods beginning on the first day of any of January, April, July, and October in any year and “Quarterly” has a corresponding meaning;
“Regulatory Authorisations”	means all authorisations, approvals and clearances that may be required by a Regulatory Authority in any country or region in the Territory before Commencement of any Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial or commercial sale of the Licensed Product. Price Approvals are not Regulatory Authorisations;
“Regulatory Authority”	means any local or national agency, court, authority, department, inspectorate, minister, ministry official or public or statutory person with jurisdiction over this Agreement or the Parties or the development or marketing of medicinal products;
“Results”	has the meaning given in clause 6.1;
“Side Letters”	means the “Consent to Licences” and “Deed of Covenant” in the agreed form for each of the licensors of Third Party IP substantially in the form attached at Schedule 5;
“Step-In Agreement”	means an agreement in the form set out in Schedule 2;
“Sub-Licence Revenue”	means [***];
“Sub-Licensee”	means any person who is granted:   a)      a sub-licence in accordance with section 2.3 of the Licence Terms and any further tiers of sub-licence granted under it (including Third Party Service Providers); or   b)       a sub-licence by the Company under the Agent IP or to sell Licensed Products anywhere in the Territory;

 

Private & Confidential

 

“Technical Agreement”	has the meaning given in clause 4.2;
“Term”	means the term of this Agreement as determined under clause 14;
“Territory”	means worldwide;
“Third Party Agreements”	means all agreements or other arrangements under which the Company has been granted Third Party IP;
“Third Party Beneficiary”	has the meaning given in clause 16.16;
“Third Party IP”	means all Agent IP licensed to the Company by a third party, including the IP described in the Cover Sheet as “Third Party IP”;
“Third Party Service Provider”	means a third party who provides research, development, distribution, sales or manufacturing services to the Company on an arms’ length basis in connection with the Company’s products, including contract research organisations, universities and hospitals. A Tobacco Party may not act as a Third Party Service Provider.
“Tobacco Party”	means any entity that:   a)       develops, sells or manufactures tobacco products;   b)       makes the majority of its profits from the importation, marketing, sale or disposal of tobacco products; or   c)       is an Affiliate of an entity referred to in (a) or (b); and
“UK Pricing Authority”	means any supra-national, national or regional government department, authority, agency or entity (including a non-departmental public body or similar entity) with responsibility for evaluating the cost effectiveness of medicinal products in the United Kingdom (or one or more constituent countries thereof) or otherwise determining whether the NHS (or constituent parts thereof) should purchase medicinal products.

 

Interpretation

 

Except where a contrary intention is expressed:

 

·

The meaning of general words is not limited by specific examples introduced by “including”, “for example” or similar expressions.

 

·

A reference to a statute or other law includes regulations and other instruments under it and amendments, re-enactments or replacements of any of them.

 

·

A reference to a specific guideline, guidance document, set of principles or other document or publication includes such amended, updated or relevant replacement version from time to time in force.

 

·

Each reference to a clause in this Agreement is to the corresponding provision in the Clinical Trial and Option Agreement Terms and Conditions, and each reference to a section in this Agreement is a reference to the corresponding provision in the Licence Terms in Schedule 1.

 

·

Words denoting persons will include any individual, partnership, company, corporation, joint venture, trust, association, organisation or other entity, in each case whether or not having separate legal personality.

 

·

References to the “best of its knowledge and belief” in clauses 3.3.1 and 9.3 of this Agreement and clause 5.1 of the Step-In Agreement include knowledge of the Company or its Affiliates after due and proper enquiry.

 

·

The term “or” is to be interpreted, where appropriate, in the inclusive sense commonly associated with the term “and/or”.

 

 

 

Exhibit 10.9

 

DEED OF INDEMNITY FOR LOST SHARE CERTIFICATE(S)

 

To:

The Directors Vaccitech Limited (the "Company") The Schrodinger Building 2nd Floor

Heatley Road

Oxford Science Park

Oxford, Oxfordshire

England, OX4 4GE

 

                         2021

 

Dear Sirs

 

Indemnity for Lost Share Certificate(s)

 

1.

I/We confirm that:

 

a.

the original certificate(s) of title relating to the shares listed below (the "Shares") are not in my/our possession;

 

b.

neither the Shares, nor the certificate(s) of title to them, have been transferred, charged, lent or deposited or dealt with in any manner that would affect my/our title to the Shares; and

 

c.

I/we am/are the person[s] entitled to be on the register of the Company in respect of such Shares.

 

2.

I/We request you to register the transfer of the Shares in accordance with the accompanying stock transfer form without the production of the original certificates for such Shares, and, subject to stamping (if any) of the relevant stock transfer form, to enter the name of the transferee in the register of members as the legal owner of the Shares.

 

3.

I/We agree to indemnify the Company and its directors and officers (each of whom may enforce this indemnity pursuant to the Contract (Rights of Third Parties) Act 1999) from and against all actions, proceedings, claims (including stamp duty, but for the avoidance of doubt, not stamp duty arising as a result of the acquisition of the Shares by Vaccitech Rx Limited (company number 13282620) on or around the date of this indemnity) and demands which may be brought against the Company and its directors and officers and all losses, charges, costs, damages, liabilities and expenses which the Company and its directors and officers may incur as a result of permitting any transfer of all or part of the Shares without the production of the original certificate(s).

 

4.

I/We undertake to return the original certificate(s) to the Company for cancellation if I/we find them or they are otherwise delivered to me/us. This indemnity will continue in force even if the original certificate(s) are returned to you.

 

This indemnity applies although the number and date of the original certificate(s) are not known.

 

This indemnity and any disputes or claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) are governed by and construed in accordance with the laws of England. The courts of England shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this indemnity or its subject matter or formation.

 

 

This indemnity has been entered into as a deed on the date stated at the beginning of it.

 

Amount and Class of Shares		In favour of
[AMOUNT AND CLASS OF SHARES]		Vaccitech Rx Limited (company number 13282620)

 

IN WITNESS whereof this deed has been duly executed and delivered as a deed on the date and year first above written.

 

EXECUTED as a DEED by [NAME] in the presence of:	)
	)
	)

 

Witness:		Signature:
		Name:
		Address:
		Occupation:

 

 

Exhibit 10.10

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made by and between Vaccitech Limited (which is anticipated to be reorganized into Vaccitech plc, “Parent”), Vaccitech USA, Inc., a Delaware corporation (the “U.S. Subsidiary”), and William Enright (the “Executive”) and is effective as of the closing of the Company’s first underwritten public offering of its equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Effective Date”). Parent, the U.S. Subsidiary, and their respective subsidiaries and other affiliates are collectively referred to herein as the “Company,” and the duties of the Company set forth in this Agreement may be discharged by any entity within that definition. In the interest of clarity, any intercompany transfer shall not be deemed a termination of the employment relationship unless otherwise specified at the time of the transfer.

 

Except with respect to the Equity Documents (as defined below) and subject to Section 10, this Agreement supersedes in all respects all prior agreements between the parties regarding the subject matter herein, including without limitation (i) the Vaccitech Limited Terms and Conditions of Employment Agreement between the Executive and Parent dated August 20, 2019, provided that Sections 15, 16, 17, 18 and 19 of such agreement shall be preserved (the “Preserved Provisions”) and are supplemental to this Agreement and the Restrictive Covenants Agreement (as defined below), and (ii) any other offer letter, employment agreement or severance agreement between the Executive and any of the parties or their affiliated entities.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Employment.

 

(a)            Term. The Company shall employ the Executive and the Executive shall be employed by the Company pursuant to this Agreement commencing as of the Effective Date and continuing until such employment is terminated in accordance with the provisions hereof (the “Term”). The U.S. Subsidiary will maintain and distribute employment-related records. The Executive’s employment with the Company will be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.

 

(b)            Position and Duties. The Executive shall serve as the Chief Executive Officer of the Company and shall have such powers and duties as may from time to time be prescribed by Parent’s Board of Directors (the “Board”). In addition, the Company shall cause the Executive to be nominated for election to the Board and to be recommended to the stockholders for election to the Board as long as the Executive remains the Chief Executive Officer of the Company (the “CEO”), provided that the Executive shall be deemed to have resigned from the Board and from any related positions upon ceasing to serve as CEO for any reason. The Executive shall devote the Executive’s full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on other boards of directors, with the approval of the Board, or engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of the Executive’s duties to the Company.

 

 

2.            Compensation and Related Matters.

 

(a)            Base Salary. The Executive’s initial base salary shall be paid at the rate of $536,500 per year. The Executive’s base salary shall be subject to periodic review, but no less than annually, by the Board or the Compensation Committee of the Board (the “Compensation Committee”) provided that in no event shall the base salary be reduced while this Agreement is in effect. The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for its U.S. executive officers.

 

(b)            Incentive Compensation. The Executive shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time. The Executive’s initial target annual incentive compensation shall be 55 percent of the Executive’s Base Salary. The target annual incentive compensation in effect at any given time is referred to herein as “Target Bonus.” The actual amount of the Executive’s annual incentive compensation, if any, shall be determined in the sole discretion of the Board or the Compensation Committee. Except as otherwise provided herein or as may be provided by the Board or the Compensation Committee, the Executive must be employed by the Company on the date such incentive compensation is paid in order to earn or receive any annual incentive compensation.

 

(c)            Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its U.S. executive officers. Notwithstanding anything herein to the contrary or otherwise, except to the extent any expense or reimbursement described in the Agreement does not constitute a “deferral of compensation” within the meaning of Section 409A of the Code and the Treasury regulations and other guidance issued thereunder, any expense or reimbursement described in this Agreement shall meet the following requirements: (i) the amount of expenses eligible for reimbursement provided to the Executive in any other calendar year will not affect the amount of expenses eligible for reimbursement to the Executive in any other calendar year (ii) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred; (iii) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit; and (iv) the reimbursements shall be made pursuant to objectively determinable and nondiscretionary company policies and procedures regarding such reimbursement of expenses.

 

(d)            Location. The Executive shall be permitted to work from his home office in Maryland; provided, however, that the Executive shall be required to regularly travel to Parent’s offices in the United Kingdom and will also be required to travel nationally and internationally on business as is necessary from time to time.

 

 

(e)            Other Benefits. The Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time for its U.S. employees, subject to the terms of such plans. Subject to the Executive’s insurability and subject to what is normal, appropriate and reasonable for a U.S. executive, the Company shall provide the Executive with renewable short-term and long-term disability plans that provide for (i) the annual payment of not less than 60% of the Executive’s Base Salary for so long as any short-term and/or long-term disability of the Executive continues and (ii) a death in service benefit equal to three times the Executive’s Base Salary, subject in each case (i) and (ii) to applicable caps and the other terms and conditions of the applicable plan or policy. The Executive shall be consulted on the selection of such policies, subject to their reasonable affordability for the Company. For the avoidance of doubt, the Company shall not be obligated to contribute to any U.K. pension on behalf of the Executive, nor shall the Executive be eligible for any other U.K.-specific employment benefits.

 

(f)            Paid Time Off. The Executive shall initially be eligible to ratably accrue up to 25 days of vacation each calendar year, which may be used in accordance with the Company’s applicable paid time off policy for its U.S. executive officers, as may be in effect from time to time.

 

(g)            Equity. The equity awards held by the Executive shall continue to be governed by the terms and conditions of the Company’s applicable equity incentive plan(s) and the applicable award agreement(s) (collectively, the “Equity Documents”); provided, however, and notwithstanding anything to the contrary in the Equity Documents, in the event of a termination by the Company without Cause or by the Executive for Good Reason, in either event within the Change in Control Period (as such terms are defined below), all stock options and other stock-based awards held by the Executive that are subject solely to time-based vesting shall immediately accelerate and become fully vested and exercisable or nonforfeitable as of the Date of Termination (as defined below).

 

3.            Termination. The Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

 

(a)            Death. The Executive’s employment hereunder shall terminate upon death.

 

(b)            Disability. The Company may terminate the Executive’s employment if the Executive is disabled and unable to perform or expected to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any twelve (12)-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

 

(c)            Termination by the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean any of the following:

 

(i)            conduct by the Executive constituting a material act of misconduct in connection with the performance of the Executive’s duties, including, without limitation, (A) continued and willful failure or refusal to perform material responsibilities that have been requested by the Board (other than refusal resulting from incapacity due to physical or mental illness), after being given written notice of such breach and a failure to cure within sixty (60) days of such notice; (B) dishonesty to the Board with respect to any material matter; or (C) misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes;

 

(ii)            the conviction of, or plea of guilty or nolo contendere of by the Executive of acts satisfying the elements of (A) any felony or (B) a misdemeanor involving moral turpitude, deceit, dishonesty or fraud;

 

(iii)            any misconduct by the Executive, regardless of whether or not in the course of the Executive’s employment, that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates if the Executive were to continue to be employed in the same position;

 

(iv)            continued unsatisfactory performance or non-performance by the Executive of the Executive’s duties hereunder (other than by reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such unsatisfactory performance or non-performance from the Board;

 

(v)            a breach by the Executive of any of the provisions contained in Section 8 of this Agreement or the Restrictive Covenants Agreement (as defined below) after being given written notice of such breach and a failure to cure within thirty (30) days of such notice;

 

(vi)            a material violation by the Executive of any of the Company’s written employment policies after being given written notice of such breach and a failure to cure within thirty (30) days of such notice; or

 

(vii)            the Executive’s 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, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

 

(d)            Termination by the Company without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

 

(e)            Termination by the Executive. The Executive may terminate employment hereunder at any time for any reason, including but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has completed all steps of the Good Reason Process (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent (each, a “Good Reason Condition”):

 

(i)            a material diminution in the Executive’s responsibilities, authority or duties;

 

(ii)            a material diminution in the Executive’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company;

 

(iii)            a material change in the geographic location at which the Executive primarily provides services to the Company, such that the Executive is required to relocate the Executive’s principal residence as a result of such change; or

 

(iv)            a material breach of this Agreement by the Company.

 

The “Good Reason Process” consists of the following steps:

 

(i)            the Executive reasonably determines in good faith that a Good Reason Condition has occurred;

 

(ii)            the Executive notifies the Company in writing of the first occurrence of the Good Reason Condition within 90 days of the first occurrence of such condition;

 

(iii)            the Executive cooperates in good faith with the Company’s efforts, for a period of not less than 30 days following such notice (the “Cure Period”), to remedy the Good Reason Condition;

 

(iv)            notwithstanding such efforts, the Good Reason Condition continues to exist at the end of the Cure Period; and

 

(v)            the Executive terminates employment within 120 days after the end of the Cure Period.

 

 

If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

4.            Matters related to Termination.

 

(a)            Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(b)            Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by death, the date of death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company without Cause under Section 3(d), the date on which a Notice of Termination is given or the date otherwise specified by the Company in the Notice of Termination; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) other than for Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

(c)            Accrued Obligations. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination and, if applicable, any accrued but unused vacation through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Obligations”).

 

(d)            Resignation of All Other Positions. To the extent applicable, the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason. The Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

 

 

5.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason Outside the Change in Control Period. If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates employment for Good Reason as provided in Section 3(e), in each case outside of the Change in Control Period (as defined below), then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of the Executive’s Continuing Obligations (as defined below), and shall provide that if the Executive breaches any of the Continuing Obligations, all payments of the Severance Amount shall immediately cease (the “Separation Agreement”), (ii) the Separation Agreement becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement), which shall include a seven (7) day revocation period and (iii) if so requested by the Company, the Executive signing a U.K. settlement agreement:

 

(a)            the Company shall pay the Executive an amount equal to twelve (12) months of the Executive’s Base Salary (the “Severance Amount”); and

 

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

 

(c)            if the Date of Termination occurs after the completion of a calendar year but prior to the payment of annual bonuses for such year, the Company shall pay the Executive the bonus amount that the Executive otherwise would have received if the Executive remained employed on the date of payment, as determined in the sole discretion of the Company (the “Prior Year Bonus”), payable to the Executive at the same time annual bonuses in respect of the prior year are generally paid to senior executives of the Company.

 

Except for the Prior Year Bonus (which shall be paid as described in Section 5(c)), the amounts payable under Section 5, to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over twelve (12) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments, to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

 

6.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 if (i) the Executive’s employment is terminated either (a) by the Company without Cause as provided in Section 3(d), or (b) by the Executive for Good Reason as provided in Section 3(e), and (ii) the Date of Termination is on or within twelve (12) months after the occurrence of the first event constituting a Change in Control of Parent (such period, the “Change in Control Period”). These provisions shall terminate and be of no further force or effect after the Change in Control Period.

 

(a)            If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates employment for Good Reason as provided in Section 3(e) and in each case the Date of Termination occurs during the Change in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of the Separation Agreement by the Executive and the Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement but in no event more than 60 days after the Date of Termination:

 

(i)            the Company shall pay the Executive a lump sum in cash in an amount equal to 1.5 times the sum of (A) the Executive’s then-current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control of Parent, if higher) plus (B) the Executive’s Target Bonus for the then-current year (or the Executive’s Target Bonus in effect immediately prior to the Change in Control of Parent, if higher); and

 

(ii)            subject to the Executive’s copayment of premium amounts at the applicable active employees’ rate and the Executive’s proper election to receive benefits under COBRA, the Company shall pay to the group health plan provider or the COBRA provider a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earliest of (A) the eighteen (18) month anniversary of the Date of Termination; (B) the date that the Executive becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of the Executive’s health continuation rights under COBRA; provided, however, that if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to the Executive for the time period specified above. Such payments to the Executive shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

The amounts payable under this Section 6(a), to the extent taxable, shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

 

 

(b)            Additional Limitation.

 

(i)            Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(ii)            For purposes of this Section 6(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

(iii)            The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

 

(c)            Definitions. For purposes of this Agreement, the term “Change in Control of Parent” shall mean a “change in Control” under Sections 10.1 or 10.2 in Parent’s Share Award Plan 2021 (as the same may be amended from time to time), but only to the extent such Change in Control of Parent is also a “change in control event” within the meaning of Section 409A of the Code and the regulations promulgated thereunder

 

7.            Section 409A.

 

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

 

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

 

(c)            To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

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

 

 

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

 

8.            Continuing Obligations.

 

(a)            Restrictive Covenants Agreement. As a condition of employment, the Executive is required to enter into the Employee Confidentiality, Assignment, Nonsolicitation and Noncompetition Agreement, attached hereto as Exhibit A (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 8 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the “Continuing Obligations.” For the avoidance of doubt, the Restrictive Covenants Agreement is supplemental to, and not in lieu of, and shall not limit or reduce any rights, restrictions or obligations under, any other agreement between the Executive and the Company relating to noncompetition, nonsolicitation, confidential information or any other similar restrictive covenant, including without limitation under the Preserved Provisions. In the event of any conflict between the Restrictive Covenants Agreement and any other such restrictive covenant, the most restrictive provision that is enforceable shall govern.

 

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

 

(c)            Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes the Executive may have knowledge or information. The Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 8(c).

 

 

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

 

9.            Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the state and federal courts of the State of Delaware. Accordingly, with respect to any such court action, the Executive (a) submits to the exclusive personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

10.            Integration. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, provided that the Equity Documents remain in full force and effect. Notwithstanding the foregoing, any prior obligations that the Executive had with respect to confidential information, invention assignment and other restrictive covenants, including without limitation the Preserved Provisions, shall remain in full force and effect and are supplemental to this Agreement and the Restrictive Covenants Agreement.

 

11.            Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

 

12.            Directors’ and Officers’ Insurance. The Executive shall be entitled to be covered by a policy of directors’ and officers’ liability insurance on terms no less favorable than those in place from time to time for other members of the Board.

 

 

13.            Assignment; Successors and Assigns. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executive’s consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization or consolidation, into which the Company merges or to whom it transfers all or substantially all of its properties or assets; provided further that if the Executive remains employed or becomes employed by the Company, the purchaser or any of their affiliates in connection with any such transaction, then the Executive shall not be entitled to any payments, benefits or vesting pursuant to Sections 2(g), 5 or 6 of this Agreement solely as a result of such transaction. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executive’s and the Company’s respective successors, executors, administrators, heirs and permitted assigns. In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such designation).

 

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

 

15.            Survival. For the avoidance of doubt, this Agreement shall survive the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

 

16.            Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

17.            Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

 

18.            Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

 

19.            Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company's benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 8 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such plan or agreement and under this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to both Section 5 and Section 6 of this Agreement.

 

20.            Governing Law. This is a Delaware contract and shall be construed under and be governed in all respects by the laws of State of Delaware, without giving effect to the conflict of laws principles thereof. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Third Circuit.

 

21.            Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.

 

	PARENT
	VACCITECH LIMITED
	By:
	Its:
	U.S. SUBSIDIARY
	VACCITECH USA, INC.
	By:
	Its:
	EXECUTIVE
	William Enright

 

 

Exhibit A

 

Restrictive Covenants Agreement

 

Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made by and between Vaccitech Limited (which is anticipated to be reorganized into Vaccitech plc, “Parent”), Vaccitech USA, Inc., a Delaware corporation (the “U.S. Subsidiary”), and Thomas G. Evans, MD (the “Executive”) and is effective as of the closing of the Company’s first underwritten public offering of its equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Effective Date”). Parent, the U.S. Subsidiary, and their respective subsidiaries and other affiliates are collectively referred to herein as the “Company,” and the duties of the Company set forth in this Agreement may be discharged by any entity within that definition. In the interest of clarity, any intercompany transfer shall not be deemed a termination of the employment relationship unless otherwise specified at the time of the transfer.

 

Except with respect to the Equity Documents (as defined below) and subject to Section 10, this Agreement supersedes in all respects all prior agreements between the parties regarding the subject matter herein, including without limitation (i) the 2017 Service Agreement between the Executive and Parent, provided that Sections 14, 15, 16, 17 and 18 of such agreement shall be preserved (the “Preserved Provisions”) and are supplemental to this Agreement and the Restrictive Covenants Agreement (as defined below), and (ii) any other offer letter, employment agreement or severance agreement between the Executive and any of the parties or their affiliated entities.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Employment.

 

(a)            Term. The Company shall employ the Executive and the Executive shall be employed by the Company pursuant to this Agreement commencing as of the Effective Date and continuing until such employment is terminated in accordance with the provisions hereof (the “Term”). The U.S. Subsidiary will maintain and distribute employment-related records. The Executive’s employment with the Company will be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.

 

(b)            Position and Duties. The Executive shall serve as the Chief Scientific Officer of the Company and shall have such powers and duties as may from time to time be prescribed by the Chief Executive Officer (the “CEO”) or other duly authorized executive. The Executive shall devote the Executive’s full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on other boards of directors, with the approval of Parent’s Board of Directors (the “Board”), or engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of the Executive’s duties to the Company.

 

 

2.            Compensation and Related Matters.

 

(a)            Base Salary. The Executive’s initial base salary shall be paid at the rate of $431,400 per year. The Executive’s base salary shall be subject to periodic review by the Board or the Compensation Committee of the Board (the “Compensation Committee”). The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for its U.S. executive officers.

 

(b)            Incentive Compensation. The Executive shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time. The Executive’s initial target annual incentive compensation shall be 50 percent of the Executive’s Base Salary. The target annual incentive compensation in effect at any given time is referred to herein as “Target Bonus.” The actual amount of the Executive’s annual incentive compensation, if any, shall be determined in the sole discretion of the Board or the Compensation Committee. Except as otherwise provided herein or as may be provided by the Board or the Compensation Committee, the Executive must be employed by the Company on the date such incentive compensation is paid in order to earn or receive any annual incentive compensation.

 

(c)            Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its U.S. executive officers.

 

(d)            Location. The Executive shall be permitted to work from his home office in Massachusetts; provided, however, that the Executive shall be required to regularly travel to Parent’s offices in the United Kingdom and will also be required to travel nationally and internationally on business as is necessary from time to time.

 

(e)            Other Benefits. The Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time for its U.S. employees, subject to the terms of such plans. For the avoidance of doubt, the Company shall not be obligated to contribute to any U.K. pension on behalf of the Executive, nor shall the Executive be eligible for any other U.K.-specific employment benefits.

 

(f)            Paid Time Off. The Executive shall initially be eligible to ratably accrue up to 25 days of vacation each calendar year, which may be used in accordance with the Company’s applicable paid time off policy for its U.S. executive officers, as may be in effect from time to time.

 

(g)            Equity. The equity awards held by the Executive shall continue to be governed by the terms and conditions of the Company’s applicable equity incentive plan(s) and the applicable award agreement(s) (collectively, the “Equity Documents”); provided, however, and notwithstanding anything to the contrary in the Equity Documents, in the event of a termination by the Company without Cause or by the Executive for Good Reason, in either event within the Change in Control Period (as such terms are defined below), all stock options and other stock-based awards held by the Executive that are subject solely to time-based vesting shall immediately accelerate and become fully vested and exercisable or nonforfeitable as of the Date of Termination (as defined below).

 

 

3.            Termination. The Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

 

(a)            Death. The Executive’s employment hereunder shall terminate upon death.

 

(b)            Disability. The Company may terminate the Executive’s employment if the Executive is disabled and unable to perform or expected to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any twelve (12)-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(c)            Termination by the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean any of the following:

 

(i)        conduct by the Executive constituting a material act of misconduct in connection with the performance of the Executive’s duties, including, without limitation, (A) willful failure or refusal to perform material responsibilities that have been requested by the Board or the CEO; (B) dishonesty to the Board or the CEO with respect to any material matter; or (C) misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes;

 

(ii)       the commission by the Executive of acts satisfying the elements of (A) any felony or (B) a misdemeanor involving moral turpitude, deceit, dishonesty or fraud;

 

(iii)      any misconduct by the Executive, regardless of whether or not in the course of the Executive’s employment, that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates if the Executive were to continue to be employed in the same position;

 

 

(iv)      continued unsatisfactory performance or non-performance by the Executive of the Executive’s duties hereunder (other than by reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such unsatisfactory performance or non-performance from the Board or the CEO;

 

(v)       a breach by the Executive of any of the provisions contained in Section 8 of this Agreement or the Restrictive Covenants Agreement (as defined below);

 

(vi)      a material violation by the Executive of any of the Company’s written employment policies; or

 

(vii)     the Executive’s 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, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

(d)            Termination by the Company without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

 

(e)            Termination by the Executive. The Executive may terminate employment hereunder at any time for any reason, including but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has completed all steps of the Good Reason Process (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent (each, a “Good Reason Condition”):

 

(i)        a material diminution in the Executive’s responsibilities, authority or duties;

 

(ii)       a material diminution in the Executive’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company;

 

(iii)      a material change in the geographic location at which the Executive primarily provides services to the Company, such that the Executive is required to relocate the Executive’s principal residence as a result of such change; or

 

(iv)      a material breach of this Agreement by the Company.

 

 

The “Good Reason Process” consists of the following steps:

 

(i)        the Executive reasonably determines in good faith that a Good Reason Condition has occurred;

 

(ii)       the Executive notifies the Company in writing of the first occurrence of the Good Reason Condition within 60 days of the first occurrence of such condition;

 

(iii)      the Executive cooperates in good faith with the Company’s efforts, for a period of not less than 30 days following such notice (the “Cure Period”), to remedy the Good Reason Condition;

 

(iv)      notwithstanding such efforts, the Good Reason Condition continues to exist at the end of the Cure Period; and

 

(v)       the Executive terminates employment within 60 days after the end of the Cure Period.

 

If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

4.            Matters related to Termination.

 

(a)            Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(b)            Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by death, the date of death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company without Cause under Section 3(d), the date on which a Notice of Termination is given or the date otherwise specified by the Company in the Notice of Termination; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) other than for Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

(c)            Accrued Obligations. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination and, if applicable, any accrued but unused vacation through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Obligations”).

 

 

(d)            Resignation of All Other Positions. To the extent applicable, the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason. The Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

 

5.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason Outside the Change in Control Period. If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates employment for Good Reason as provided in Section 3(e), in each case outside of the Change in Control Period (as defined below), then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities, a reaffirmation of all of the Executive’s Continuing Obligations (as defined below), and, in the Company’s sole discretion, a one-year post-employment noncompetition agreement, and shall provide that if the Executive breaches any of the Continuing Obligations, all payments of the Severance Amount shall immediately cease (the “Separation Agreement”), (ii) the Separation Agreement becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement), which shall include a seven (7) business day revocation period and (iii) if so requested by the Company, the Executive signing a U.K. settlement agreement:

 

(a)            the Company shall pay the Executive an amount equal to nine (9) months of the Executive’s Base Salary (the “Severance Amount”); provided that in the event the Executive is entitled to any payments pursuant to the Restrictive Covenants Agreement, the Severance Amount received in any calendar year will be reduced by the amount the Executive is paid in the same such calendar year pursuant to the Restrictive Covenants Agreement (the “Restrictive Covenants Agreement Setoff”); and

 

(b)            subject to the Executive’s copayment of premium amounts at the applicable active employees’ rate and the Executive’s proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider or the COBRA provider a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the Date of Termination; (B) the date that the Executive becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of the Executive’s health continuation rights under COBRA; provided, however, that if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to the Executive for the time period specified above. Such payments to the Executive shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

 

The amounts payable under Section 5, to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments, to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

6.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 if (i) the Executive’s employment is terminated either (a) by the Company without Cause as provided in Section 3(d), or (b) by the Executive for Good Reason as provided in Section 3(e), and (ii) the Date of Termination is on or within twelve (12) months after the occurrence of the first event constituting a Change in Control of Parent (such period, the “Change in Control Period”). These provisions shall terminate and be of no further force or effect after the Change in Control Period.

 

(a)            If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates employment for Good Reason as provided in Section 3(e) and in each case the Date of Termination occurs during the Change in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of the Separation Agreement by the Executive and the Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement but in no event more than 60 days after the Date of Termination:

 

(i)        the Company shall pay the Executive a lump sum in cash in an amount equal to one (1) times the sum of (A) the Executive’s then-current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control of Parent, if higher) plus (B) the Executive’s Target Bonus for the then-current year (or the Executive’s Target Bonus in effect immediately prior to the Change in Control of Parent, if higher) (the “Change in Control Payment”); provided that the Change in Control Payment shall be reduced by the amount of the Restrictive Covenants Agreement Setoff, if applicable; and

 

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

 

 

The amounts payable under this Section 6(a), to the extent taxable, shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

 

(b)            Additional Limitation.

 

(i)        Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(ii)       For purposes of this Section 6(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

 

(iii)      The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

(c)            Definitions. For purposes of this Agreement, the term “Change in Control of Parent” shall mean a “change in Control” under Sections 10.1 or 10.2 in Parent’s Share Award Plan 2021 (as the same may be amended from time to time), but only to the extent such Change in Control of Parent is also a “change in control event” within the meaning of Section 409A of the Code and the regulations promulgated thereunder.

 

7.            Section 409A.

 

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

 

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

 

 

(c)            To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

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

 

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

 

8.            Continuing Obligations.

 

(a)            Restrictive Covenants Agreement. As a condition of employment, the Executive is required to enter into the Employee Confidentiality, Assignment, Nonsolicitation and Noncompetition Agreement, attached hereto as Exhibit A (the “Restrictive Covenants Agreement”). For purposes of this Agreement, the obligations in this Section 8 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the “Continuing Obligations.” For the avoidance of doubt, the Restrictive Covenants Agreement is supplemental to, and not in lieu of, and shall not limit or reduce any rights, restrictions or obligations under, any other agreement between the Executive and the Company relating to noncompetition, nonsolicitation, confidential information or any other similar restrictive covenant, including without limitation under the Preserved Provisions. In the event of any conflict between the Restrictive Covenants Agreement and any other such restrictive covenant, the most restrictive provision that is enforceable shall govern.

 

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

 

 

(c)            Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes the Executive may have knowledge or information. The Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 8(c).

 

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

 

9.            Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the state and federal courts of the State of Delaware. Accordingly, with respect to any such court action, the Executive (a) submits to the exclusive personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

10.            Integration. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, provided that the Equity Documents remain in full force and effect. Notwithstanding the foregoing, any prior obligations that the Executive had with respect to confidential information, invention assignment and other restrictive covenants, including without limitation the Preserved Provisions, shall remain in full force and effect and are supplemental to this Agreement and the Restrictive Covenants Agreement.

 

11.            Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

 

 

12.            Directors’ and Officers’ Insurance. The Executive shall be entitled to be covered by a policy of directors’ and officers’ liability insurance on terms no less favorable than those in place from time to time for other officers.

 

13.            Assignment; Successors and Assigns. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executive’s consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization or consolidation, into which the Company merges or to whom it transfers all or substantially all of its properties or assets; provided further that if the Executive remains employed or becomes employed by the Company, the purchaser or any of their affiliates in connection with any such transaction, then the Executive shall not be entitled to any payments, benefits or vesting pursuant to Sections 2(g), 5 or 6 of this Agreement solely as a result of such transaction. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executive’s and the Company’s respective successors, executors, administrators, heirs and permitted assigns. In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such designation).

 

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

 

15.            Survival. For the avoidance of doubt, this Agreement shall survive the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

 

16.            Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

 

17.            Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

 

18.            Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

19.            Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company's benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 8 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. Except for the Restrictive Covenants Agreement, in the event that the Executive is party to an agreement with the Company providing for payments or benefits under such plan or agreement and under this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to both Section 5 and Section 6 of this Agreement.

 

20.            Governing Law. This is a Delaware contract and shall be construed under and be governed in all respects by the laws of State of Delaware, without giving effect to the conflict of laws principles thereof. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Third Circuit.

 

21.            Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.

 

	PARENT
	VACCITECH LIMITED
	By:
	Its:
	U.S. SUBSIDIARY
	VACCITECH USA, INC.
	By:
	Its:
	EXECUTIVE
	Thomas G. Evans, MD

 

 

Exhibit A

 

Restrictive Covenants Agreement

 

 

Exhibit 10.13

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made by and between Vaccitech Limited (which is anticipated to be reorganized into Vaccitech plc, “Parent”), Vaccitech USA, Inc., a Delaware corporation (the “U.S. Subsidiary”), and Margaret Marshall, M.D. (the “Executive”) and is effective as of the closing of the Company’s first underwritten public offering of its equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Effective Date”). Parent, the U.S. Subsidiary, and their respective subsidiaries and other affiliates are collectively referred to herein as the “Company,” and the duties of the Company set forth in this Agreement may be discharged by any entity within that definition. In the interest of clarity, any intercompany transfer shall not be deemed a termination of the employment relationship unless otherwise specified at the time of the transfer.

 

Except with respect to the Equity Documents and the Restrictive Covenants Agreement (each as defined below) and subject to Section 10, this Agreement supersedes in all respects all prior agreements between the parties regarding the subject matter herein, including without limitation (i) the Employment Agreement between you and the Company dated November 1, 2020 (the “Prior Agreement”), (ii) the Research Activities Agreement between Parent and the Executive dated as of July 7, 2020 and the Statement of Work incorporated therein, provided that Sections 4, 5, 6 and 7 of such agreement shall be preserved (the “Preserved Provisions”) and are supplemental to this Agreement and the Restrictive Covenants Agreement (as defined below); and (iii) any other offer letter, employment agreement or severance agreement between the Executive and any of the parties or their affiliated entities.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.            Employment.

 

(a)       Term. The Company shall employ the Executive and the Executive shall be employed by the Company pursuant to this Agreement commencing as of the Effective Date and continuing until such employment is terminated in accordance with the provisions hereof (the “Term”). The U.S. Subsidiary will maintain and distribute employment-related records. The Executive’s employment with the Company will be “at will,” meaning that the Executive’s employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.

 

(b)       Position and Duties. The Executive shall serve as the Chief Medical Officer of the Company and shall have such powers and duties as may from time to time be prescribed by the Chief Executive Officer (the “CEO”) or other duly authorized executive. The Executive shall devote the Executive’s full working time and efforts to the business and affairs of the Company. Notwithstanding the foregoing, the Executive may serve on other boards of directors, with the approval of Parent’s Board of Directors (the “Board”), or engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of the Executive’s duties to the Company.

 

 

2.            Compensation and Related Matters.

 

(a)       Base Salary. The Executive’s initial base salary shall be paid at the rate of $436,100 per year. The Executive’s base salary shall be subject to periodic review by the Board or the Compensation Committee of the Board (the “Compensation Committee”). The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices for its U.S. executive officers.

 

(b)       Incentive Compensation. The Executive shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time. The Executive’s initial target annual incentive compensation shall be 40 percent of the Executive’s Base Salary. The target annual incentive compensation in effect at any given time is referred to herein as “Target Bonus.” The actual amount of the Executive’s annual incentive compensation, if any, shall be determined in the sole discretion of the Board or the Compensation Committee. Except as otherwise provided herein or as may be provided by the Board or the Compensation Committee, the Executive must be employed by the Company on the date such incentive compensation is paid in order to earn or receive any annual incentive compensation.

 

(c)        Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company for its U.S. executive officers.

 

(d)       Location. The Executive shall be permitted to work from her home office in New Jersey; provided, however, that the Executive shall be required to regularly travel to Parent’s offices in the United Kingdom and will also be required to travel nationally and internationally on business as is necessary from time to time.

 

(e)        Other Benefits. The Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time for its U.S. employees, subject to the terms of such plans. For the avoidance of doubt, the Company shall not be obligated to contribute to any U.K. pension on behalf of the Executive, nor shall the Executive be eligible for any other U.K.-specific employment benefits.

 

(f)        Paid Time Off. The Executive shall initially be eligible to ratably accrue up to 25 days of vacation each calendar year, which may be used in accordance with the Company’s applicable paid time off policy for its U.S. executive officers, as may be in effect from time to time.

 

(g)        Equity. The equity awards held by the Executive shall continue to be governed by the terms and conditions of the Company’s applicable equity incentive plan(s) and the applicable award agreement(s) (collectively, the “Equity Documents”); provided, however, and notwithstanding anything to the contrary in the Equity Documents, in the event of a termination by the Company without Cause or by the Executive for Good Reason, in either event within the Change in Control Period (as such terms are defined below), all stock options and other stock-based awards held by the Executive that are subject solely to time-based vesting shall immediately accelerate and become fully vested and exercisable or nonforfeitable as of the Date of Termination (as defined below).

 

 

3.            Termination. The Executive’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

 

(a)       Death. The Executive’s employment hereunder shall terminate upon death.

 

(b)       Disability. The Company may terminate the Executive’s employment if the Executive is disabled and unable to perform or expected to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any twelve (12)-month period. If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(c)       Termination by the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause. For purposes of this Agreement, “Cause” shall mean any of the following:

 

(i)         conduct by the Executive constituting a material act of misconduct in connection with the performance of the Executive’s duties, including, without limitation, (A) willful failure or refusal to perform material responsibilities that have been requested by the Board or the CEO; (B) dishonesty to the Board or the CEO with respect to any material matter; or (C) misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes;

 

(ii)        the commission by the Executive of acts satisfying the elements of (A) any felony or (B) a misdemeanor involving moral turpitude, deceit, dishonesty or fraud;

 

(iii)       any misconduct by the Executive, regardless of whether or not in the course of the Executive’s employment, that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates if the Executive were to continue to be employed in the same position;

 

 

(iv)      continued unsatisfactory performance or non-performance by the Executive of the Executive’s duties hereunder (other than by reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such unsatisfactory performance or non-performance from the Board or the CEO;

 

(v)       a breach by the Executive of any of the provisions contained in Section 8 of this Agreement or the Restrictive Covenants Agreement (as defined below);

 

(vi)      a material violation by the Executive of any of the Company’s written employment policies; or

 

(vii)     the Executive’s 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, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

(d)       Termination by the Company without Cause. The Company may terminate the Executive’s employment hereunder at any time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall be deemed a termination without Cause.

 

(e)       Termination by the Executive. The Executive may terminate employment hereunder at any time for any reason, including but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has completed all steps of the Good Reason Process (hereinafter defined) following the occurrence of any of the following events without the Executive’s consent (each, a “Good Reason Condition”):

 

(i)        a material diminution in the Executive’s responsibilities, authority or duties;

 

(ii)       a material diminution in the Executive’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company;

 

(iii)      a material change in the geographic location at which the Executive primarily provides services to the Company, such that the Executive is required to relocate the Executive’s principal residence as a result of such change; or

 

(iv)      a material breach of this Agreement by the Company.

 

 

The “Good Reason Process” consists of the following steps:

 

(i)        the Executive reasonably determines in good faith that a Good Reason Condition has occurred;

 

(ii)       the Executive notifies the Company in writing of the first occurrence of the Good Reason Condition within 60 days of the first occurrence of such condition;

 

(iii)      the Executive cooperates in good faith with the Company’s efforts, for a period of not less than 30 days following such notice (the “Cure Period”), to remedy the Good Reason Condition;

 

(iv)      notwithstanding such efforts, the Good Reason Condition continues to exist at the end of the Cure Period; and

 

(v)       the Executive terminates employment within 60 days after the end of the Cure Period.

 

If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

4.            Matters related to Termination.

 

(a)       Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

 

(b)       Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by death, the date of death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company without Cause under Section 3(d), the date on which a Notice of Termination is given or the date otherwise specified by the Company in the Notice of Termination; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) other than for Good Reason, 30 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.

 

(c)       Accrued Obligations. If the Executive’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of Termination and, if applicable, any accrued but unused vacation through the Date of Termination; (ii) unpaid expense reimbursements (subject to, and in accordance with, Section 2(c) of this Agreement); and (iii) any vested benefits the Executive may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Obligations”).

 

 

(d)       Resignation of All Other Positions. To the extent applicable, the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason. The Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.

 

5.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason Outside the Change in Control Period. If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Executive terminates employment for Good Reason as provided in Section 3(e), in each case outside of the Change in Control Period (as defined below), then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a separation agreement and release in a form and manner satisfactory to the Company, which shall include, without limitation, a general release of claims against the Company and all related persons and entities and a reaffirmation of all of the Executive’s Continuing Obligations (as defined below), and shall provide that if the Executive breaches any of the Continuing Obligations, all payments of the Severance Amount shall immediately cease (the “Separation Agreement”), (ii) the Separation Agreement becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement), which shall include a seven (7) day revocation period and (iii) if so requested by the Company, the Executive signing a U.K. settlement agreement:

 

(a)        the Company shall pay the Executive an amount equal to nine (9) months of the Executive’s Base Salary (the “Severance Amount”); and

 

(b)       subject to the Executive’s copayment of premium amounts at the applicable active employees’ rate and the Executive’s proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay to the group health plan provider or the COBRA provider a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earliest of (A) the nine (9) month anniversary of the Date of Termination; (B) the date that the Executive becomes eligible for group medical plan benefits under any other employer’s group medical plan; or (C) the cessation of the Executive’s health continuation rights under COBRA; provided, however, that if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to the Executive for the time period specified above. Such payments to the Executive shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.

 

 

The amounts payable under Section 5, to the extent taxable, shall be paid out in substantially equal installments in accordance with the Company’s payroll practice over nine (9) months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments, to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

 

6.            Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of Section 5 if (i) the Executive’s employment is terminated either (a) by the Company without Cause as provided in Section 3(d), or (b) by the Executive for Good Reason as provided in Section 3(e), and (ii) the Date of Termination is on or within twelve (12) months after the occurrence of the first event constituting a Change in Control of Parent (such period, the “Change in Control Period”). These provisions shall terminate and be of no further force or effect after the Change in Control Period.

 

(a)       If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive terminates employment for Good Reason as provided in Section 3(e) and in each case the Date of Termination occurs during the Change in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of the Separation Agreement by the Executive and the Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement but in no event more than 60 days after the Date of Termination:

 

(i)        the Company shall pay the Executive a lump sum in cash in an amount equal to one (1) times the sum of (A) the Executive’s then-current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in Control of Parent, if higher) plus (B) the Executive’s Target Bonus for the then-current year (or the Executive’s Target Bonus in effect immediately prior to the Change in Control of Parent, if higher); and

 

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

 

 

The amounts payable under this Section 6(a), to the extent taxable, shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

 

(b)       Additional Limitation.

 

(i)        Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

 

(ii)       For purposes of this Section 6(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executive’s receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

 

 

(iii)      The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 6(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

 

(c)        Definitions. For purposes of this Agreement, the term “Change in Control of Parent” shall mean a “change in Control” under Sections 10.1 or 10.2 in Parent’s Share Award Plan 2021 (as the same may be amended from time to time), but only to the extent such Change in Control of Parent is also a “change in control event” within the meaning of Section 409A of the Code and the regulations promulgated thereunder.

 

7.            Section 409A.

 

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

 

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

 

(c)        To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

 

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

 

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

 

8.            Continuing Obligations.

 

(a)        Restrictive Covenants Agreement. The Executive’s Employee Confidentiality, Assignment, Nonsolicitation and Noncompetition Agreement dated November 13, 2020 and attached hereto as Exhibit A (the “Restrictive Covenants Agreement”), remains in full force and effect and is incorporated by reference herein. For purposes of this Agreement, the obligations in this Section 8 and those that arise in the Restrictive Covenants Agreement and any other agreement relating to confidentiality, assignment of inventions, or other restrictive covenants shall collectively be referred to as the “Continuing Obligations.” For the avoidance of doubt, the Restrictive Covenants Agreement is supplemental to, and not in lieu of, and shall not limit or reduce any rights, restrictions or obligations under, any other agreement between the Executive and the Company relating to noncompetition, nonsolicitation, confidential information or any other similar restrictive covenant, including without limitation under the Preserved Provisions. In the event of any conflict between the Restrictive Covenants Agreement and any other such restrictive covenant, the most restrictive provision that is enforceable shall govern.

 

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

 

 

(c)        Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes the Executive may have knowledge or information. The Executive’s full cooperation in connection with such claims, actions or investigations shall include, but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 8(c).

 

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

 

9.            Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the state and federal courts of the State of Delaware. Accordingly, with respect to any such court action, the Executive (a) submits to the exclusive personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

 

10.          Integration. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, including, without limitation, the Prior Agreement; provided that the Equity Documents and the Restrictive Covenants Agreement remain in full force and effect. Notwithstanding the foregoing, any prior obligations that the Executive had with respect to confidential information, invention assignment and other restrictive covenants, including without limitation the Preserved Provisions, shall remain in full force and effect and are supplemental to this Agreement and the Restrictive Covenants Agreement.

 

11.          Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

 

 

12.          Directors’ and Officers’ Insurance. The Executive shall be entitled to be covered by a policy of directors’ and officers’ liability insurance on terms no less favorable than those in place from time to time for other officers.

 

13.          Assignment; Successors and Assigns. Neither the Executive nor the Company may make any assignment of this Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the Executive’s consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization or consolidation, into which the Company merges or to whom it transfers all or substantially all of its properties or assets; provided further that if the Executive remains employed or becomes employed by the Company, the purchaser or any of their affiliates in connection with any such transaction, then the Executive shall not be entitled to any payments, benefits or vesting pursuant to Sections 2(g), 5 or 6 of this Agreement solely as a result of such transaction. This Agreement shall inure to the benefit of and be binding upon the Executive and the Company, and each of the Executive’s and the Company’s respective successors, executors, administrators, heirs and permitted assigns. In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such designation).

 

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

 

15.          Survival. For the avoidance of doubt, this Agreement shall survive the termination of the Executive’s employment to the extent necessary to effectuate the terms contained herein.

 

16.          Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

 

17.          Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

 

 

18.          Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

 

19.          Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the Company's benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 8 hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. In the event that the Executive is party to an agreement with the Company providing for payments or benefits under such plan or agreement and under this Agreement, the terms of this Agreement shall govern and the Executive may receive payment under this Agreement only and not both. Further, Section 5 and Section 6 of this Agreement are mutually exclusive and in no event shall the Executive be entitled to payments or benefits pursuant to both Section 5 and Section 6 of this Agreement.

 

20.          Governing Law. This is a Delaware contract and shall be construed under and be governed in all respects by the laws of State of Delaware, without giving effect to the conflict of laws principles thereof. With respect to any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States Court of Appeals for the Third Circuit.

 

21.          Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.

 

	PARENT
	VACCITECH LIMITED
	By:
	Its:
	U.S. SUBSIDIARY
	VACCITECH USA, INC.
	By:
	Its:
	EXECUTIVE
	Margaret Marshall, M.D.

 

 

Exhibit A

 

Restrictive Covenants Agreement

 

 

 

Exhibit 10.16

 

DATED

March 27,

2019

 

OXFORD SCIENCES INNOVATION PLC

 

- and -

 

VACCITECH LIMITED

 

 

LEASE
Part of Second Floor, The Schrödinger Building
The Oxford Science Park
Sandford-on-Thames
Oxford

 

 

 

 

71 Queen Victoria Street
London
EC4V 4AY

 

Direct Dial +44 (0)20 7395 3047
Direct Fax +44 (0)20 7406 1602
Direct Email sgill@wedlakebell.com

 

 

TABLE OF CONTENTS

 

Page 

 

1.   DEFINITIONS AND INTERPRETATION	1
2.   DEMISE	7
3.   TENANT’S COVENANTS	8
4.   LANDLORD’S COVENANTS	23
5.   ENERGY PERFORMANCE CERTIFICATES	24
6.   MISCELLANEOUS PROVISIONS	25
7.   NEW LEASE	31
SCHEDULE 1	32
SCHEDULE 2	36
SCHEDULE 3	38
SCHEDULE 4	41

 

 

LAND REGISTRY PRESCRIBED CLAUSES

 

LR1.  Date of lease
LR2.  Title Number(s)	LR2.1 Landlord’s title number(s)   Title number(s) out of which this lease is granted. Leave blank if not registered.   LR2.2 Other title numbers   Existing title number(s) against which entries of matters referred to in LR9, LR10, LR11 and LR13 are to be made.
LR3. Parties to this lease   Give full names, addresses and company’s registered number, if any, of each of the parties. For Scottish companies use a SC prefix and for limited liability partnerships use an OC prefix. For foreign companies give territory in which incorporated.	Landlord   OXFORD SCIENCES INNOVATION PLC company registration number 09093331 whose registered office is at King Charles House, Park End Street, Oxford, OX1 1JD (Landlord).   Tenant   VACCITECH LIMITED company registration number 9973585 whose registered office is at The Schrödinger Building, Heatley Road, Oxford Science Park, Oxford OX4 4GE (Tenant)   Other Parties   None   Specify capacity of each party, for example “management company”, “guarantor”, etc.

 

 

LR4. Property   Insert a full description of the land being leased or   Refer to the clause, schedule or paragraph of a schedule in this lease in which the land being leased is more fully described.   Where there is a letting of part of a registered title, a plan must be attached to this lease and any floor levels must be specified.	In the case of a conflict between this clause and the remainder of this lease then, for the purposes of registration, this clause shall prevail.   The land demised by this Lease is known as part Second Floor, The Schrödinger Building, The Oxford Science Park, Sandford-on- Thames, Oxford defined as the Demised Premises in clause 1.1.
LR5. Prescribed statements etc.   If this lease includes a statement falling within LR5.1, insert under that sub-clause the relevant statement or refer to the clause, schedule or paragraph of a schedule in this lease which contains the statement.   In LR5.2, omit or delete those Acts which do not apply to this Lease.	LR5.1 Statements prescribed under rules 179 (dispositions in favour of a charity), 180 (dispositions by a charity) or 196 (leases under the Leasehold Reform, Housing and Urban Development Act 1993) of the Land Registration Rules 2003.   None   LR5.2 This lease is made under, or by reference to, provisions of:   None
LR6. Term for which the Property is leased   Include only the appropriate statement (duly completed) from the three options.   NOTE: The information you provide, or refer to, here will be used as part of the particulars to identify the lease under rule 6 of the Land Registration Rules 2003.	The term as specified in this lease at clause 2
LR7. Premium   Specify the total premium, inclusive of any VAT where Payable	None

 

 

LR8. Prohibitions or restrictions on disposing this lease   Include whichever of the two statements is appropriate.   Do not set out here the wording of the provision.	This lease contains a provision that prohibits or restricts dispositions.
LR9. Rights of acquisition etc.   Insert the relevant provisions in the sub-clauses or refer to the clause, schedule or paragraph of a schedule in this lease which contains the provisions.	LR9.1 Tenant’s contractual rights to renew this lease, to acquire the reversion or another lease of the Property, or to acquire an interest in other land   None   LR9.2 Tenant’s covenant to (or offer to) surrender this lease   Clause 3.22   LR9.3 Landlord’s contractual rights to acquire this lease   None
LR10. Restrictive covenants given in this lease by the Landlord in respect of land other than the Property   Insert the relevant provisions in the sub-clauses or refer to the clause, schedule or paragraph of a schedule in this lease which contains the provisions.	None
LR11. Easements   Refer here only to the clause, schedule or paragraph of a schedule in this lease which sets out the easements.	LR11.1 Easements granted by this lease for the benefit of the Property   See Schedule 1 Part 2   LR11.2 Easements granted or reserved by this lease over the Property for the benefit of other property   See Schedule 1 Part 3

 

 

LR12. Estate rentcharge burdening the Property   Refer here only to the clause, schedule or paragraph of a schedule in this lease which sets out the rentcharge.	N/A
LR13. Application for standard form of restriction   Set out the full text of the standard form of restriction and the title against which it is to be entered. If you wish to apply for more than one standard form of restriction use this clause to apply for each of them, tell us who is applying against which title and set out the full text of the restriction you are applying for.   Standard forms of restrictions are set out in Schedule 4 to the Land Registration Rules 2003.	None
LR14. Declaration of trust where there is more than one person comprising the Tenant   If the Tenant is one person, omit or delete all the alternative statements.   If the Tenant is more than one person, complete this clause by omitting or deleting all inapplicable alternative statements.	Not applicable

 

 

THIS LEASE is made on  March 27, 2019

 

BETWEEN:

 

1.

OXFORD SCIENCES INNOVATION PLC (company number 09093331) whose registered office is at King Charles House, Park End Street, Oxford, OX1 1JD (Landlord); and

 

2.

VACCITECH LIMITED (company number 9973585) whose registered office is at The Schrödinger Building, Heatley Road, Oxford Science Park, Oxford OX4 4GE (Tenant).

 

NOW THIS DEED WITNESSETH as follows:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Throughout this Lease including the Schedules the following words, and expressions have the following meanings:

 

“Adjoining Property” any adjoining or neighbouring property belonging to the Landlord from time to time.

 

“Agreement for Lease” the Agreement for Lease relating to the Demised Premises and other parts of the Building dated 6 April 2018 and made between The Oxford Science Park Limited (1) and Oxford Sciences Innovation plc (2).

 

“Base Rate” either the base rate of National Westminster Bank Plc for the time being in force (or such other Bank being a member of the Committee of London Clearing Banks as the Landlord may from time to time nominate) or if no such base rate can be ascertained then such alternative rate at the relevant time which the Landlord may reasonably specify in writing in substitution therefor.

 

“Building” the building known as The Schrödinger Building shown edged green on plan C annexed to the Superior Lease.

 

“Building Services” the services specified in Part II of Schedule 3 of the Superior Lease.

 

“Car Park” the car parking areas within the Plot.

 

“Commercial Rent Arrears Recovery” the procedure by which a landlord can recover rent arrears due under a commercial lease from a tenant pursuant to the Tribunals, Courts and Enforcement Act 2007.

 

“Common Parts” the footpaths, entrance ways, lift, lift shaft, staircases, courtyard, walkways and landscaped areas and other areas which are from time to time during the Term provided by the Landlord or the Superior Landlord for the common use and enjoyment of the occupants of the Building or the Second Floor.

 

 

“Conduits” pipes, sewers, drains, soakaways, channels, culverts, gullies, watercourses, sumps, ducts, shafts, flues, wires, cables or any other conducting media whatsoever.

 

“Demised Premises” the land described in Part 1 of Schedule 1 hereto and each and every part thereof together with all additions alterations and improvements thereto (other than tenant’s fixtures and fittings) and all Landlord’s fixtures and fittings from time to time therein.

 

“Environmental Performance” all or any of the following:

 

(a)       the consumption of energy and associated generation of greenhouse gas emissions;

 

(b)       the consumption of water;

 

(c)       waste generation and management; and

 

 

 

 

any other environmental impact arising from the use or operation of the Demised Premises or the Science Park.

 

“EPC” an energy performance certificate and recommendation report as defined in the Energy Performance of Buildings (England and Wales) Regulations 2012 as amended or updated from time to time.

 

“Event of Insolvency” in respect of a company any one or more of the following:

 

(a)

it shall be unable to pay its debts within the meaning of Section 123 of the Insolvency Act 1986;

 

(b)

a voluntary arrangement is made under Part I of the Insolvency Act 1986;

 

(c)

a receiver or manager (including an administrative receiver) or trustee or similar officer is appointed over all or any of its assets;

 

(d)

an administration order is made;

 

(e)

a provisional liquidator is appointed;

 

(f)

it goes into liquidation either voluntary or compulsory (other than a voluntary liquidation entered into solely for the purpose of amalgamation or reconstruction while solvent in respect of which a statutory declaration of solvency has been filed with the Registrar of Companies);

 

In respect of an individual any one or more of the following:

 

(h)

he shall appear to be unable to pay his debts or any of them or appear to have no reasonable prospect of being able to pay a debt within the meaning of Section 268 of the Insolvency Act 1986;

 

(i)

an application is made for an interim order or a proposal is made for a voluntary arrangement under Part VIII of the Insolvency Act 1986;

 

(j)

a petition is presented under Part IX of the Insolvency Act 1986;

 

(k)

he enters into any deed of arrangement or composition with his creditors;

 

(l)

a receiver is appointed under the Mental Health Act 1983.

 

“Existing EPC” a copy of the EPC for the Demised Premises reference number 0970-1974-0388-5630-9024.

 

“Insured Risks” loss or damage by fire, lightning, explosion (including that of boilers and heating apparatus), aircraft and other aerial devices (other than hostile aircraft or aerial devices) or articles dropped therefrom, earthquake, riot and civil commotion, malicious damage, storm or tempest, bursting or overflowing of water tanks, apparatus or pipes, flood, impact by road vehicles, subsidence, slip or heave, and against third party claims and of property owners liability and against the risks of breakdown and third party claims in respect of the lifts (if any) and of the plate glass (if any) against breakage through impact or otherwise and in addition such other insurance in respect of the Building as the Superior Landlord may from time to time reasonably require to be effected hereunder subject in all cases to any excesses exclusions or limitations as may be imposed by the insurers or underwriters and without prejudice to the generality of the foregoing in the case of terrorism insofar as cover is available on reasonable terms in the London insurance market.

 

 

“Landlord” the party of the first part including the estate owner for the time being of the reversion immediately expectant upon the determination of the Term.

 

“Landlord’s Surveyor” any suitably qualified person or firm appointed by or acting for the Landlord (including an appropriately qualified employee of the Landlord) to perform the function of a surveyor for any purpose of this Lease.

 

“Latent Defect” a defect in the Demised Premises or the Building which appears within the twelve years from the Practical Completion Date (as defined in the Agreement for Lease) and which is due to a defect in design, materials, workmanship or supervision of contractors or site preparation works which existed but not was apparent on completion of the works to construct the Building.

 

“this Lease” this Lease any licence or consent granted pursuant hereto and any variation hereof and any deed or instrument supplemental hereto.

 

“Lettable Area” the accommodation on the Science Park available for letting.

 

“Main Access Road” the road shown coloured brown on plan A annexed to the Superior Lease.

 

“Permitted User” within Class B1 (a) - (c) of the Town and Country Planning (Use Classes) Order 1987.

 

“Planning Acts” the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990 the Planning (Consequential Provisions) Act 1990 and the Planning and Compensation Act 1991 and any other statues for the time being in force of a similar nature.

 

“Plot” has the meaning ascribed by the Superior Lease.

 

“Prescribed Rate” the rate of interest which is from time to time three per centum per annum above the Base Rate.

 

“Reinstatement Value” the cost for the time being at the start of the year of insurance cover in question of reinstating and replacing the Building of which the Demised Premises form part plus a provision to cover the effect of inflation on building costs during the year of insurance and until the Demised Premises have been reinstated together with architects’ surveyors’ and other professional fees and incidental expenses and the costs of demolition and site clearance.

 

 

 

“Rent Commencement Date” 1 October 2018.

 

“Science Park” the land comprised in title numbers ON323918 and ON324755 shown for identification purposes only edged red on plan B annexed to the Superior Lease or such larger area as the Superior Landlord may designate from time to time Provided that designation of such larger area does not materially increase the amounts payable by the Tenant pursuant to clause 3.2 of this Lease.

 

“Science Park Services” the services specified in Part 1 of 3 of the Superior Lease.

 

“Second Floor” the premises demised by the Superior Lease.

 

“Second Floor Services” the services specified in Schedule 3.

 

“Superior Landlord” the landlord for the time being of the Superior Lease and any other party with title paramount.

 

“Superior Lease” the lease dated 13 April 2018 made between (1) The Oxford Science Park Limited (2) Oxford Sciences Innovation Plc.

 

“Superior Rent” the annual rent payable by the Landlord under clause 2 of the Superior Lease.

 

“Tenant” the party of the second part including its successors in title and in the case of an individual his personal representatives.

 

“Term” the term of years hereby created.

 

“Term Commencement Date” 1 May 2018

 

“Value Added Tax” value added tax under the Value Added Tax Act 1994 and any similar replacement tax and any similar additional tax.

 

“1927 Act” the Landlord and Tenant Act 1927.

 

“1954 Act” the Landlord and Tenant Act 1954.

 

“1995 Act” the Landlord and Tenant (Covenants) Act 1995.

 

1.2	Throughout this Lease:

 

1.2.1

words importing the singular number only shall include the plural number and vice versa;

 

1.2.2

where a party comprises more than one person covenants and obligations of that party are to be construed as having been made by such persons jointly and severally;

 

1.2.3

any reference to any statute shall include any re-enactment consolidation and/or renewal thereof for the time being in force and any references to any statute or statutes in general shall include any order instrument plan regulation permission and direction made or issued thereunder or deriving validity therefrom.

 

 

1.3	Any covenant on the part of the Tenant not to do any act or thing includes a covenant not to suffer or permit the doing of that act or thing.

 

1.4

Any rights excepted or reserved to the Landlord shall be construed as also being excepted or reserved to any mortgagee of the Landlord all persons authorised by the Landlord and the Superior Landlord and any covenant by the Tenant to permit entry by the Landlord for any purpose shall be construed as permitting entry by such persons.

 

1.5

Whenever the consent or approval of the Landlord is required under this Lease the giving of such consent or approval shall be conditional upon the prior consent or approval of the Superior Landlord from time to time and any mortgagee of the Landlord which consent or approval the Landlord shall use all reasonable endeavours to obtain except that nothing in this lease shall be construed as imposing on the Superior Landlord any obligation (or indicating that such an obligation is imposed on the Superior Landlord by the terms of the Superior Lease) not unreasonably to refuse such consent.

 

1.6

Whenever a matter or issue is referred to a third party for resolution or determination under this Lease and the same or substantially the same matter or issue is referred to a third party under the Superior Lease, the same third party shall be appointed to act in relation to this Lease wherever possible.

 

1.7	Any consent approval authorisation or notice required or given under this Lease shall only take effect if given in writing.

 

1.8	All Schedules to this Lease shall be deemed to form part of this Lease.

 

1.9	The headings in this Lease are inserted for convenience only and shall not affect its construction or interpretation and references to a clause Schedule or paragraph are (unless otherwise stated) to a clause in and a Schedule to this Lease and to a paragraph of the relevant Schedule.

 

1.10	Any reference to the “end of the Term” shall mean the expiration or earlier determination of the Term and any reference to “the last year of the Term” shall mean the twelve months ending on the expiration or earlier determination of the Term (in each case howsoever the Term may be determined).

 

2.

DEMISE

 

In consideration of the rents and covenants on the part of the Tenant hereinafter reserved and contained the Landlord HEREBY DEMISES with full title guarantee to the Tenant the Demised Premises TOGETHER with the rights as mentioned in Part 2 of Schedule 1 EXCEPTING AND RESERVING as mentioned in Part 3 of Schedule 1 TO HOLD the same to the Tenant SUBJECT to all rights easements quasi-easements and privileges to which the Demised Premises are or may be subject and to the rights covenants and other matters contained or referred to in the documents details of which are set out in Part 4 of Schedule 1 for a term of years from and including the Term Commencement Date and expiring on 1 April 2028 YIELDING AND PAYING therefor during the Term and so in proportion for any less time than a year:

 

 

2.1

the yearly rent at the rate of a peppercorn (if demanded) for the period until the Rent Commencement Date and then from and including the Rent Commencement Date at the rate of £210,000 per annum (subject to review as provided for in Schedule 2) to be paid in advance (by Banker’s Order if the Landlord so requires) by equal quarterly payments on the usual quarter days in every year the first of such payments in respect of the period from the Rent Commencement Date to the day immediately before the next quarter day (both dates inclusive) to be made on the Rent Commencement Date;

 

2.2	within 7 days of demand an amount equal to a fair proportion of the full cost of every premium payable including any tax which may be payable thereon and other payment properly paid by the Landlord from time to time during the Term pursuant to clause 2.2 of the Superior Lease;

 

2.3	the amounts payable to the Landlord pursuant to clause 3.2;

 

2.4	interest which may be payable pursuant to clause 3.3;

 

2.5	any Value Added Tax which may be payable pursuant to clause 3.5;

 

2.6	all other sums payable by the Tenant under this Lease.

 

3.	TENANT’S COVENANTS

 

The Tenant HEREBY COVENANTS with the Landlord throughout the Term as follows:

 

3.1

Rent

 

To pay the rents hereinbefore reserved at the times and in the manner aforesaid without any deduction whatsoever (whether by way of set-off, counterclaim or otherwise).

 

3.2	Service Charge

 

To pay to the Landlord by way of service charge without any deduction whatsoever a fair and reasonable proportion of:

 

3.2.1

the costs expenses and outgoings paid or incurred by the Landlord in supplying and providing the services in accordance with the provisions of Schedule 3 and

 

3.2.2

payable by way of Service Charge under the Superior Lease.

 

3.3

Interest

 

If the rents or any other sum of money payable to the Landlord by the Tenant under this Lease shall have become due but remain unpaid for fourteen days after the same became due or if the Landlord shall refuse to accept the tender of rents by reason of a breach of covenant on the part of the Tenant to pay on demand to the Landlord interest thereon at the Prescribed Rate from the date when the same became due and until they are paid to and accepted by the Landlord (as well after as before any judgment).

 

 

3.4

Outgoings

 

To bear pay and discharge all existing and future rates taxes duties charges assessments impositions and outgoings whatsoever (whether or not of a capital or non-recurring nature), which now are or may at any time hereafter during the Term be charged levied assessed or imposed upon the Demised Premises or upon the owner or occupier in respect thereof save any on receipts of rent (other than Value Added Tax) or on a disposal of the Landlord’s interest in the Demised Premises.

 

3.5	Value Added Tax

 

3.5.1

Supplies made by the Landlord to the Tenant pursuant to this Lease are exclusive of Value Added Tax and if any such supplies are (or become) liable to Value Added Tax (whether or not as a result of an election by the Landlord) then notwithstanding anything contained in this Lease such Value Added Tax shall be payable by the Tenant in addition to the consideration payable for such supplies under the terms of this Lease.

 

3.5.2

Where under the terms of this Lease the Tenant is obliged to pay any sum which is not consideration for a supply to him but such sum is wholly or partly attributable (directly or indirectly) to a supply which is for the time being subject to Value Added Tax then notwithstanding anything contained in this Lease such sum payable by the Tenant shall be deemed for all purposes to be increased by the amount of such Value Added Tax save to the extent that the Landlord is able to obtain credit for such Value Added Tax as input tax.

 

3.5.3

The Landlord (or its managing agents) shall render a receipted tax invoice in respect of taxable supplies made pursuant to this Lease promptly upon receipt of payment for the same.

 

3.5.4

For the purposes of this clause 3.5 the expressions “supply” “taxable supply” “input tax” and “tax invoice” shall bear the same meanings as they do in the Value Added Tax Act 1994.

 

3.6	Landlord’s Costs

 

To pay to the Landlord (and where appropriate, the Superior Landlord) on demand all reasonable and proper costs and expenses including solicitors’ surveyors’ and other professional fees) of and incidental to:

 

3.6.1

the preparation and service of any notice under Section 146 of the Law of Property Act 1925 and/or incurred in or in proper contemplation of proceedings under Section 146 and/or 147 of that Act notwithstanding in any such case that forfeiture may be avoided otherwise than by relief granted by the Court unless the Court otherwise directs;

 

 

3.6.2

the preparation and service of any notice relating to a schedule of dilapidations and of any such schedule itself by the Landlord and whether or not the same is served during or within three (3) months after the end of the Term but relating in all cases only to dilapidations which accrued prior to the end of the Term;

 

3.6.3

all applications by the Tenant for any consent or approval of the Landlord or the Landlord’s Surveyor or the Superior Landlord required by this Lease or the Superior Lease including such fees and expenses actually incurred in cases where consent is refused or the application is withdrawn except when a court determines that consent was unreasonably withheld;

 

3.6.4

subject to clause 3.6.5 the recovery of rent or other monies due and payable hereunder or to the remedying of any breach of covenant on the part of the Tenant herein contained;

 

3.6.5

any action for the recovery of rent arrears under Commercial Rent Arrears Recovery;

 

3.6.6

making good any damage to any Adjoining Property caused by the Tenant or any employee or licensee of the Tenant;

 

3.6.7

carrying out works to the Demised Premises to improve the Environmental Performance where the Tenant in its absolute discretion has consented to the Landlord doing so.

 

3.7

Repair

 

To repair and keep the Demised Premises in good and substantial repair and condition and shall rebuild and renew as necessary (damage by any of the Insured Risks always excepted save where the payment of any of the insurance monies shall be withheld or refused by reason of any act or default of the Tenant any undertenant or their respective servants agents or licensees).

 

3.8	Decoration and Maintenance

 

As often as may be necessary to paint with at least two coats of paint of a colour which if different from the colour previously used shall first be approved by the Landlord (such approval not to be unreasonably withheld or delayed) and to varnish, paper, plaster or otherwise treat all the parts of the Demised Premises as are usually or ought to be varnished papered plastered or treated (as appropriate) and generally to carry out all such work with good quality materials of their several kinds available and in accordance with good standards of workmanship.

 

 

3.9	Cleaning of Demised Premises etc.

 

3.9.1

As often as shall be necessary to clean treat and/or wash in an appropriate manner to the reasonable satisfaction of the Landlord’s Surveyor all glass and other surfaces and finishes of the Demised Premises which ought normally to be so cleaned treated and/or washed.

 

3.9.2

Not to store or stack any goods crates boxes or other things outside the Building save in areas designated for such purpose.

 

3.9.3

Not to obstruct or interfere with the free use of any roads or highways giving access to the Building whether by the parking of vehicles or the deposit of materials thereon.

 

3.9.4

To clean regularly and insofar as practicable preserve in good condition all carpets (if any) belonging to the Landlord and replace the same as often as may be necessary and in any event in the last year of the Term replace with carpet of no less a quality and of similar appearance.

 

3.10	Entry to View

 

To permit the Landlord during normal business hours with or without workmen and all necessary tools and appliances on prior appointment after giving not less than two days’ prior notice (except in emergency) to the Tenant to enter and remain (for such reasonable period of time as may be necessary) upon the Demised Premises:

 

3.10.1

to view the state of repair and condition thereof and to take a schedule of the Landlord’s fixtures and fittings and of any dilapidations;

 

3.10.2

(where such works are not reasonably practicable without entry onto the Demised Premises) for the purpose of rebuilding or executing repairs and alterations to any adjoining or neighbouring premises belonging to the Landlord and to clean empty repair or replace any of the Conduits belonging to the same;

 

3.10.3

to ascertain whether anything has been done which constitutes a breach or non-performance of any of the covenants contained in this Lease;

 

3.10.4

to exercise the rights excepted and reserved to the Landlord by this Lease;

 

3.10.5

to inspect and measure the Demised Premises for all purposes connected with the operation or implementation of the provisions of Schedule 2 or for any intended or pending step under the provisions of Part II of the Landlord and Tenant Act 1954;

 

3.10.6

to comply with its obligations under the Superior Leases;

 

3.10.7

for any other reasonable purpose properly connected with the interest of the Landlord in the Demised Premises subject to the person exercising such rights making good any damage caused to the Demised Premises thereby as soon as is reasonably practicable to the Tenant’s reasonable satisfaction and complying with the Tenant’s reasonable requirements relating to security, privacy, hygiene and safety which have been notified to the Landlord.

 

 

3.11	Compliance with Notice

 

To comply with any notice given by the Landlord requesting the Tenant to remedy any breach of the Tenant’s covenants within two calendar months after the giving of such notice or sooner if requisite and if the Tenant fails to comply with any such notice it shall be lawful (but not obligatory) for the Landlord (without prejudice to the right of re-entry hereinafter contained) to enter and remain upon the Demised Premises with or without workmen and with all necessary tools and appliances to make good the Demised Premises at the cost of the Tenant which proper cost shall be repaid by the Tenant to the Landlord within 14 days of demand together with all solicitors’ surveyors’ and other professional fees and other expenses which may be incurred by the Landlord in connection therewith together with interest thereon at the Prescribed Rate from the date on which the said expenditure is demanded by the Landlord until the date of actual payment.

 

3.12	Overloading of Demised Premises

 

Not to suspend any heavy load from the ceilings or main structure of the Demised Premises or the Building nor to load or to use the floors of the Demised Premises or the structure or curtilage of the Building in any manner which will in any way impose a weight or strain in excess of that which the same are constructed to bear with due margin for safety.

 

3.13	User Prohibited

 

3.13.1

Not to bring into the Demised Premises or to place or store in the Demised Premises any article or thing which is or may become dangerous, offensive, combustible, inflammable, radioactive or explosive other than such normal substances as may be employed in non-hazardous quantities in connection with the Permitted User but where any such normal substances are or may become dangerous, offensive, combustible, inflammable, radioactive or explosive then the Tenant will comply with all the requirements of the insurers of the Building and all statutes in relation to their supply use storage and/or disposal.

 

3.13.2

Not to use the Demised Premises for any noisy offensive or dangerous trade manufacture business or occupation nor for any illegal or immoral purpose nor permit any person to reside or sleep upon the Demised Premises nor do on the Demised Premises any act matter or thing whatsoever which in the reasonable opinion of the Landlord or the Superior Landlord may be or tend to become a nuisance damage or disturbance to the prejudice of the Landlord the Superior Landlord or to the owners or occupiers of any adjoining or neighbouring property or any of them Provided That the foregoing shall not prevent the use of the Demised Premises permitted by and in accordance with this Lease.

 

3.13.3

Not to discharge anything into the Conduits which will or may be corrosive or harmful or which may cause any obstruction or deposit therein.

 

3.13.4

Not to use the Demised Premises for any public meeting exhibition or entertainment or as a club.

 

 

3.13.5

Not to hold any sale by auction thereon or to play or use thereon any musical instrument gramophone wireless loudspeaker or similar apparatus so as to be audible outside the Demised Premises.

 

3.13.6

Not to use the Demised Premises for the purpose of any betting transactions within the meaning of the Gambling Act 2005 or for gaming within the meaning of the Gambling Act 2005 with or between persons resorting to the Demised Premises.

 

3.13.7

Not to make any application for a betting office licence or a licence or registration under the Gambling Act 2005 in respect of the Demised Premises.

 

3.13.8

Not to overload any structural part of the Building.

 

3.14

User

 

3.14.1

Not to leave the Demised Premises continuously unoccupied for more than twenty- one days without notifying the Landlord and providing such caretaking or security arrangements as the Superior Landlord and/or its insurers shall require (in the case of the Landlord acting reasonably) in order to protect the Demised Premises from vandalism theft damage or unlawful occupation.

 

3.14.2

Not to use or permit the use of any part of the Demised Premises for any purpose other than the Permitted User.

 

3.15	Alterations and Additions

 

3.15.1

Not to make any alteration or addition to any part of the structure of the Building or the external elevations thereof nor to merge the Demised Premises with any adjoining premises and not to alter or change any of the architectural features (whether external or internal) of the Demised Premises.

 

3.15.2

Not without the consent of the Landlord nor otherwise than in accordance with plans approved by the Landlord (such consent and approval not to be unreasonably withheld) and under the supervision and to the reasonable satisfaction of the Landlord’s Surveyor to make any other alteration or addition in or to the Demised Premises or any part thereof including in particular any Conduits electrical equipment and installations of any description Provided that:

 

(a)

the Landlord may in its proper discretion seek such advice as the Landlord shall require from surveyors and other professional advisers in connection with any such application for consent;

 

 

(b)

the Landlord may as a condition of giving any such consent and approval require the Tenant to enter into such covenants with the Landlord as the Landlord may reasonably require in regard to the execution of any such works or otherwise;

 

(c)

the Tenant shall if so requested by the Landlord on reasonable prior notice reinstate the Demised Premises at the end or sooner determination of the Term;

 

(d)

the Tenant shall not make any addition or alteration to the Demised Premises which might weaken the structure of the Building;

 

(e)

in the case of any works of a substantial nature if the Landlord shall so require prior to the commencement of such works the Tenant shall provide adequate security on terms reasonably required by the Landlord in the form of a deposit of money or the provision of a bond to ensure that any alterations which may from time to time be permitted by the Landlord shall be fully completed;

 

(f)

the Landlord may in its absolute discretion refuse its consent to any alteration addition or amendment to the Demised Premises which may be visible from the exterior of the Building;

 

(g)

the Landlord will not unreasonably withhold or delay consent to non- structural internal alterations;

 

(h)

all proposals for any alterations or additions to the Demised Premises shall first be submitted by the Tenant to the Landlord accompanied by all relevant detailed plans, drawings, elevations, sections and specifications and such other information as may be reasonably required.

 

3.15.3

All alterations or additions to the electrical equipment and installations of the Demised Premises shall be carried out in accordance with the terms conditions and recommendations from time to time laid down by the Institution of Electrical Engineers and the regulations of the electricity supply authority.

 

3.15.4

Notwithstanding the foregoing not at any time to commence any development within the meaning of the Planning Acts in relation to the Demised Premises without the Landlord’s prior consent which shall not be unreasonably withheld provided that it shall in any event be reasonable for the Landlord to withhold its consent unless the Landlord shall first be satisfied that the proposed development is properly authorised by law and that the Tenant will indemnify and keep the Landlord fully and effectually indemnified from and against any tax charge or levy for which the Landlord may become liable as a result of any such proposed development being carried out by the Tenant.

 

3.15.5

Not without the consent of the Landlord to change or make any application to change the name of the Building from The Schrodinger Building.

  

3.15.6

Not to install blinds at the Demised Premises other than blinds which are Shade Tech Beta Screen 70, colour BS702 charcoal/grey, without the Landlord’s consent.

 

 

3.16	Advertisements

 

Not to affix or exhibit in or upon any part of the exterior of the Demised Premises any bill placard advertisement flashlight or other sign except such as shall previously have been approved (as to design, size and positioning) by the Landlord.

 

3.17	Encroachments etc.

 

Not in any way to stop up or darken any window or opening in the Demised Premises nor to stop up or obstruct any access of light enjoyed by the Demised Premises nor to permit any wayleave easement privilege or encroachment to be made or acquired over against or upon the Demised Premises and forthwith upon the Tenant becoming aware of any of the same or circumstances which may give rise to the same to give notice thereof to the Landlord and to permit the Landlord to enter and remain upon the Demised Premises for the purpose of ascertaining the nature of any such wayleave easement privilege or encroachment and at the joint cost of the Landlord and the Tenant to adopt such means as the Landlord may properly require for preventing any encroachment and the acquisition or continued enjoyment of any wayleave easement or privilege.

 

3.18	Rights of Light

 

Not to give to any third party any acknowledgement that the Tenant enjoys the access of light to any window or opening in the Demised Premises by the consent of such third party nor to pay to such third party any sum of money nor to enter into any agreement with such third party for the purpose of inducing or binding such third party to abstain from obstructing the access of light to any such window or opening and in the event of any third party doing or threatening to do anything which obstructs the access of light to any such window or opening to give immediate written notice thereof to the Landlord and to permit the Landlord to bring such proceedings as it may think fit in the name of the Tenant and at the joint cost of the Landlord and the Tenant against any such third party in respect thereof.

 

3.19	Claims for Destruction of Light

 

Not to bring any action or make any claim or demand on account of any diminution of light or air to the Demised Premises or any window or opening therein in consequence of the erection or alteration of any building on any land adjoining neighbouring or opposite to the Demised Premises for which the Landlord may give its consent pursuant to any power reserved by this Lease or in respect of any easement right or privilege granted or to be granted by the Landlord for the benefit of any building erected or to be erected on any land adjoining neighbouring or opposite to the Demised Premises and (if reasonably required) to concur with the Landlord at the Landlord’s expense in any consent which the Landlord may give or any grant which the Landlord may make.

 

 

3.20

Insurance

 

3.20.1

Forthwith on becoming aware of the same to give written notice to the Landlord of any damage or destruction to the Demised Premises or any matter in respect of which a claim may be made under any policy of insurance effected hereunder.

 

3.20.2

If the Demised Premises or the Building shall be destroyed or damaged by any of the Insured Risks and the payment of any of the insurance monies under any insurance against the same shall be withheld or refused by reason solely or in part of any act or default of the Tenant or any undertenant or their respective servants agents or licensees then and in every such ease the Tenant will forthwith pay to the Landlord the whole or (as the case may require) the withheld or refused portion of such insurance monies.

 

3.20.3

Not to do any act or thing whereby any insurance effected in respect of the Demised Premises, the Building or any adjoining or neighbouring property would or might be vitiated or prejudiced and not without the written consent of the Landlord to do or omit to do anything whereby an increased or additional premium in respect of any such insurance (which shall in any event be borne by the Tenant) may become payable.

 

3.20.4

If the Tenant shall become entitled to the benefit of any insurance on the Demised Premises then the Tenant shall hold all monies received by virtue of such insurance upon trust for the Landlord for making good the loss or damage in respect of which the same shall have been received.

 

3.21

Alienation Prohibited

 

3.21.1

Not to charge assign or transfer part only of the Demised Premises.

 

3.21.2

Not to part with possession or share the occupation of the Demised Premises or any part thereof other than by way of an assignment permitted under clause 3.22 provided that the Tenant may share the occupation of the Demised Premises with any company which is within the same group as the Tenant within the meaning of Section 42 of the 1954 Act so long as the Tenant previously gives prior written notice to the Landlord of the company occupying the Demised Premises, no tenancy is thereby created and such company vacates upon it ceasing to be a member of such group.

 

3.21.3

Not to hold or occupy the Demised Premises or any part thereof as trustee or agent or otherwise for the benefit of any other person.

 

3.22

Assignment Permitted

 

3.22.1

Not to assign or transfer the whole of the Demised Premises without the prior written consent of the Landlord such consent not to be unreasonably withheld subject to the terms contained in clauses 3.22.2 to 3.22.9 (inclusive),

 

 

3.22.2

Before any proposed assignment of the Demised Premises, to give the Landlord written notice of its intention to assign together with full and accurate particulars of the proposed assignee and the proposed terms and supplying reasonable evidence of the offer and simultaneously shall make a written offer to the Landlord to make an absolute surrender of this Lease with vacant possession and such offer shall remain open for acceptance within 14 days.

 

3.22.3

If the Landlord does not within 14 days after receiving written notice under clause 3.23 give the Tenant written acceptance of such offer and then complete a surrender of this Lease on the terms of this clause 3.22 then the Tenant shall (subject to the terms contained in clauses 3.22.5 to 3.22.9) be free to assign this Lease to the proposed assignee referred to in clause 3.22.2 on terms no less beneficial to the Tenant than the terms of such offer to the Landlord.

 

3.22.4

If the Landlord accepts the offer to surrender the following conditions of sale shall apply:

 

(a)

The estate and interest of the Tenant in the Demised Premises and the Tenant’s and trade fixtures and fittings shall be sold subject to the edition of the Standard Conditions of Sale current at the date when the contract is concluded so far as they are applicable to and not inconsistent with or varied by this Lease;

 

(b)

the surrender shall be completed on the first working day after the expiration of 4 weeks (or such other period as may be agreed) from the date of service by the Landlord of the written acceptance of the offer;

 

(c)

the surrender shall be made with full title guarantee free from all mortgages and charges;

 

(d)

the sale shall be on the footing that the Tenant knows of no overriding interest affecting the Tenant’s estate and interest in the Demised Premises other than those disclosed in the offer and those apparent on inspection;

 

(e)

completion of the surrender shall not prejudice the rights of either party in respect of any antecedent breach of covenant or default by the other.

 

3.22.5

The Landlord may withhold its consent to a proposed assignment or transfer if any one or more of the following circumstances (which are specified for the purpose of Section 19(1 A) of the 1927 Act) exist:

 

(a)

any sum properly due from the Tenant under this Lease remains unpaid;

 

(b)

in the Landlord’s reasonable opinion there is at the date of the application for consent to assign any material outstanding breach of any of the Tenant’s covenants or other terms of this Lease;

 

 

(c)

the proposed assignee or transferee (or any guarantor required under clause (b)) has or will have immunity from suit or legal process in relation to any breach of any covenants or conditions contained in this Lease;

 

(d)

the proposed assignee or transferee (or any guarantor required under clause (b)) is a corporation registered in a jurisdiction in which there is no reciprocity of treatment for the enforcement of judgments obtained in England and Wales;

 

(e)

the proposed assignee or transferee is a company which is in the same group (within the meaning of Section 42 of the 1954 Act) as the Tenant;

 

(f)

that in the reasonable opinion of the Landlord the proposed assignee is not of sufficient financial standing to enable it to comply with the tenant’s covenants under this Lease.

 

3.22.6

Clause 3.22.5 shall operate without prejudice to the right of the Landlord to refuse such consent on any other ground or grounds where such refusal would be reasonable.

 

3.22.7

The Landlord may impose any one or more of the following conditions (which are specified for the purpose of Section 19(1 A) of the 1927 Act):

 

(a)

a requirement that the assigning Tenant and in the event of a previous unauthorised assignment a former tenant (as defined in Section 16(6) of the 1995 Act) each separately execute as a deed and deliver to the Landlord prior to the assignment in question an authorised guarantee agreement in a form reasonably required by the Landlord;

 

(b)

a requirement that (to the extent permitted by law) any surety for the assigning tenant is made party to any authorised guarantee agreement entered into by the assigning tenant in order to guarantee the obligations of the assigning tenant contained in the authorised guarantee agreement;

 

(c)

if the Landlord reasonably so requires a requirement that third party guarantors reasonably acceptable to the Landlord are provided who execute in favour of the Landlord and deliver to the Landlord prior to the assignment in question a deed of covenant in the terms of the covenants for a surety in a form reasonably required by the Landlord;

 

(d)

if the Landlord reasonably so requires the assignee enters Into a rent deposit deed in the form reasonably required by the Landlord with the Landlord prior to the assignment providing for a deposit of not less than three months’ yearly rent (plus VAT) (calculated as at the date of the assignment but after the end of any rent free period) as security for the assignee’s performance of the tenant’s obligations in this lease.

 

 

3.22.8

Clause 3.22.7 shall operate without prejudice to the right of the Landlord to impose further conditions upon a grant of consent where such imposition would be reasonable.

 

3.22.9

The Tenant shall give notice to the Landlord in writing within fifteen working days of the Tenant becoming aware of the death of any individual who has covenanted with the Landlord as surety or of an Event of Insolvency arising in respect of a surety. If so required by the Landlord at the expense of the Tenant the Tenant shall within two (2) months of such event procure that some other individual or company acceptable to the Landlord acting reasonably shall covenant with the Landlord as surety in the terms of clause (c) in place of such individual or company.

 

3.23

Underletting Prohibited

 

3.23.1

Not to underlet the whole or any part of the Demised Premises.

 

3.24

Disclosure of Information

 

Upon making an application for any consent or approval which is required under this Lease the Tenant shall disclose to the Landlord such information as the Landlord may reasonably require.

 

3.25

Registration

 

3.25.1

Within twenty-one days after any assignment transfer underlease mortgage charge or other devolution of this Lease or any derivative interest to give notice thereof in duplicate to the Landlord’s solicitor for registration together with a certified copy of the deed document or instrument effecting such assignment transfer underlease mortgage charge or other devolution and to pay or cause to be paid to the Landlord’s Solicitors or as the Landlord may from time to time direct a fee of Fifty Pounds (£50.00) or such higher fee as the Landlord may reasonably require for the registration thereof together with any fee payable for registration of the same under the Superior Lease.

 

3.25.2

Where a deed of transfer or deed of assignment of the Demised Premises or an underlease is registerable at the Land Registry the Tenant shall procure the registration of such deed of transfer or deed of assignment or underlease as soon as reasonably practicable after the date of the same and within one month of completion of the registration give notice in writing to the Landlord.

 

3.26

Schedule of Underlettings etc.

 

If and when called upon by the Landlord so to do to supply to the Landlord from time to time a schedule containing full details (including for the avoidance of doubt particulars of rent and any review dates) of all subsisting underlettings and occupiers of the Demised Premises.

 

 

3.27

Compliance with Statutes

 

3.27.1

To comply with the provisions of all statutes now or hereafter to be passed which affect the Demised Premises or the Tenant’s user thereof including the execution of all works required to be done or executed pursuant thereto whether by the owner and/or the landlord and/or the tenant thereof and to comply with any notices which may be served by any competent authority and not to do on the Demised Premises any act or thing whereby the Landlord may become liable to pay any penalty imposed by or to bear the whole or any part of any expenses incurred under any such statute.

 

3.27.2

To comply with all requirements from time to time of the appropriate authority in relation to fire precautions and means of escape from the Demised Premises in case of fire or other emergency insofar as such escape route is located within the Demised Premises and at the expense of the Tenant to keep the Demised Premises sufficiently supplied and equipped with fire-fighting and extinguishing apparatus and appliances of a type to be approved from time to time by the appropriate authority and by the Landlord’s insurers and suitable in all respects to the type of user or business or trade carried on upon the Demised Premises.

 

3.28

Planning Acts

 

3.28.1

To obtain so often as occasion shall require all planning permissions licences consents and approvals as may be required under the Planning Acts for the carrying out by the Tenant of any development on the Demised Premises within the meaning of the Planning Acts or for the continuance thereof by the Tenant but so that the Tenant shall not make any application for planning permission or give any notice to any authority of an intention to commence or to carry out any development without the previous consent of the Landlord (such consent not to be unreasonably withheld) and so that the Tenant shall (if and insofar as it is lawful for the parties hereto to make such an arrangement) indemnify the Landlord against all charges payable in respect of any such application.

 

3.28.2

Forthwith after the grant of any planning permission or refusal of any application therefor made by the Tenant to give to the Landlord full particulars in writing thereof and supply a copy thereof for the retention of the Landlord and in the case of a refusal of such an application or a grant subject to conditions which the Landlord considers unreasonable forthwith if the Landlord reasonably so requires at the Landlord’s expense to give notice of appeal thereof to the competent authority and to proceed diligently with such appeal and to keep the Landlord informed of the progress thereof.

 

3.28.3

Without prejudice to the provisions of any other covenant by the Tenant under this Lease not to implement any planning permission until a copy of the same has been submitted to the Landlord and acknowledged by it as satisfactory (such acknowledgement not to be unreasonably withheld) Provided That the Landlord may refuse so to express its satisfaction with any such planning permission on the ground that any provision or condition would in the reasonable opinion of the Landlord be or be likely to be (whether during the Term or following its determination) prejudicial to the Landlord’s interest in the Demised Premises or the Building or any adjoining or neighbouring property belonging to the Landlord.

 

 

3.28.4

To comply with all conditions imposed by any planning permission implemented by the Tenant during the Term and if the Landlord reasonably so requires where a planning permission is granted subject to conditions to provide adequate security for the compliance with such conditions on terms reasonably required by the Landlord in the form of a deposit of money or the provision of a bond prior to the implementation by the Tenant of such planning permission.

 

3.28.5

Unless the Landlord shall otherwise direct to carry out before the end or sooner determination of the Term (howsoever the same may be determined) any works stipulated to be carried out to the Demised Premises by a date subsequent to such end or sooner determination as a condition of any planning permission which may have been granted to and been implemented by the Tenant or any person deriving title under the Tenant.

 

3.28.6

If called upon so to do to produce to the Landlord all plans documents and other evidence as the Landlord may reasonably require in order to satisfy itself that the provisions of this covenant have been complied with.

 

3.28.7

Not without the consent of the Landlord to enter into any agreement under the Planning Acts.

 

3.28.8

Not without the consent of the Landlord to serve any notice under Planning Acts requiring any authority to purchase the interest of the Tenant in the Demised Premises.

 

3.29

Statutory Notices

 

3.29.1

Within seven days of the receipt of any notice order permission refusal requisition or direction or proposal for the same made given or issued to the Tenant by any competent authority under or by virtue of any statutory powers or forthwith upon the happening of any occurrence which may be capable of materially adversely affecting the Landlord’s interest in the Demised Premises the Tenant shall deliver full particulars thereof to the Landlord and if so required by the Landlord thereafter to produce a copy of the same to the Landlord and without delay to take all reasonable and necessary steps to comply with the same.

 

3.29.2

To make or join with the Landlord at the joint cost of the Landlord and the Tenant in making such objections or representations against or in respect of any such notice order permission refusal requisition or direction or proposal for the same as the Landlord shall deem expedient unless contrary to the Tenant’s own business interests.

 

 

3.30

Reletting Arrangements

 

To permit the Landlord or its agents to fix and retain in a conspicuous position on the Demised Premises a notice-board during the last six months of the Term in respect of the reletting of the same and at any time during the Term in respect of the sale of the interest of the Landlord in the same (but not so as to restrict or interfere unreasonably with access to or the access of light and air to the Demised Premises) and not to take down or obscure the said notice-board and to permit all persons accompanied by the Landlord or its agents to view the Demised Premises during normal business hours after the giving of not less than twenty-four hours’ prior notice subject to compliance with the Tenant’s reasonable requirements relating to security privacy hygiene and safety where such requirements have been notified to the Landlord.

 

3.31

Defects

 

To notify the Landlord promptly upon becoming aware of any defect in the Demised Premises which might give rise to a duty imposed by common law or statute on the Landlord in favour of the Tenant or any other person.

 

3.32

Indemnity

 

3.32.1

To indemnify and keep indemnified the Landlord against all losses costs damage and expenses (including professional fees properly incurred by the Landlord) incurred or sustained by the Landlord as a consequence of any breach of the covenants by the Tenant set out herein or implied Provided That such indemnity shall extend to all costs and expenses properly incurred by the Landlord in connection with any steps which the Landlord may (at its absolute discretion but without being in any way obliged so to do) take to remedy any such breach and shall be without prejudice to any other rights or remedies of the Landlord in respect of any such breach.

 

3.32.2

To indemnify and keep indemnified the Landlord against liability in respect of any injury to or the death of any person or damage to any property movable or immovable or the infringement disturbance or destruction of any right easement or privilege or otherwise by reason of or arising directly or indirectly out of the repair or condition of the Demised Premises or any alteration thereto by the Tenant or any person deriving title under the Tenant or the Permitted User and against all actions proceedings costs expenses claims and demands of whatsoever nature in respect of any such liability or alleged liability.

 

3.33

Yield Up

 

At the end or sooner determination of the Term quietly to yield up to the Landlord the Demised Premises free from any third party rights of occupation and having removed the Tenant’s chattels and effects.

 

 

3.34

Regulations

 

To observe duly and perform the stipulations and regulations set out in Schedule 4 and such reasonable and proper regulations and instructions as the Superior Landlord may from time to time make or give in connection with the management or administration of the Building and/or the Science Park.

 

3.35

Covenants in Documents

 

To observe and perform the agreements covenants and stipulations contained or referred to in the documents referred to in Part 4 of Schedule 1 and to indemnify the Landlord in relation to any breach thereto attributable to the Tenant so far as they concern any act matter or thing to be done on the Demised Premises.

 

3.36

Superior Leases

 

To perform and observe the covenants (other than the payment of rent) on the part of the tenant contained in the Superior Lease so far as they relate to the Demised Premises and not to do anything to put the Landlord in breach of the covenants on the part of the tenant contained in the Superior Lease so far as they relate to the Demised Premises.

 

3.37

Second Floor Common Parts

 

To light cleanse repair maintain and replace (as often as occasion shall reasonably require) on the furniture meeting rooms corridors or other structures facilities and amenities forming part of the Second Floor and intended for the common use or benefit of the occupiers of the Second Floor (the “Second Floor Common Parts”).

 

3.38

Regulations

 

To observe and duly perform the Landlord’s reasonable and proper regulations from time to time relating to the use of and to security over the Second Floor Common Parts.

 

4.

LANDLORD’S COVENANTS

 

The Landlord HEREBY COVENANTS with the Tenant as follows:

 

4.1

Quiet Enjoyment

 

That the Tenant paying the rents hereby reserved and observing and performing the covenants conditions and stipulations herein contained and on the part of the Tenant to be observed and performed shall and may peaceably hold and enjoy the Demised Premises during the Term without any interruption by the Landlord or any person rightfully claiming under or in trust for the Landlord.

 

 

4.2

Insurance

 

4.2.1

Use all reasonable endeavours to procure that the Superior Landlord complies with its obligations relating to insurance in the Superior Lease provided that if the Superior Landlord has not fully reinstated the Demised Premises or the accesses thereto within a period of three years from the date of damage or destruction either the Landlord or the Tenant shall be entitled to terminate this Lease by giving notice to the other and on giving of such notice the Term shall cease and determine but without prejudice to the rights of either party hereto in respect of any antecedent breach of covenant.

 

4.3

Services

 

Subject as otherwise herein provided to perform the Second Floor Services and to use reasonable endeavours to procure that the Superior Landlord performs the Building Services and the Science Park Services in both cases as from time to time necessary under the principles of good estate management provided that:

 

4.3.1

the Landlord shall not be liable to the Tenant in respect of any interruption in any of the services which the Landlord does provide or supply by reason of any necessary inspection repair or maintenance of any plant or equipment or any damage thereto or by reason of mechanical or other defect or breakdown or inclement weather conditions or shortage of fuel materials water or labour or by reason of any circumstances whatever beyond the control of the Landlord provided that the Landlord shall procure that the services will be restored as soon as reasonably practicable;

 

4.3.2

the Tenant shall have no claim against the Landlord in respect of any defect or want of maintenance repair amendment renewal or cleansing unless the Landlord has had notice thereof and has failed to remedy the same within a reasonable period thereafter.

 

4.4

Superior Lease

 

To pay the rent reserved by the Superior Lease and to observe and perform the tenant’s covenants in the Superior Lease (insofar as the Tenant is not liable for such observance and performance) under its covenants herein contained.

 

5.

ENERGY PERFORMANCE CERTIFICATES

 

5.1

Tenant covenants

 

5.1.1

The Tenant shall permit the Landlord at reasonable times after reasonable notice (except in emergency) to enter the Demised Premises in order to take the measurements and carry out the calculations required for the production of an EPC in respect of the Demised Premises or any part of them, subject to the person exercising such rights making good any damage thereby caused to the Demised Premises.

 

 

5.1.2

On demand the Tenant shall supply the Landlord with the information required for the production of an EPC in respect of the Demised Premises, including without limitation information regarding energy consumption and equipment.

 

5.1.3

The Tenant shall not obtain an EPC in respect of the Demised Premises or any part of them without the prior written consent of the Landlord and if the Landlord grants such consent then:

 

(a)

the EPC shall be obtained by the Tenant from a reputable and appropriately qualified energy assessor at the Tenant’s own cost; and

 

(b)

the Tenant shall notify the Landlord in writing when an EPC has been obtained in respect of the Demised Premises or any part of them and its notice shall include a copy of the EPC and the reference number for the EPC.

 

5.2

Landlord covenants

 

5.2.1

On demand the Landlord shall supply the Tenant with the information required for the production of an EPC in respect of the Demised Premises, including without limitation information regarding energy consumption and equipment.

 

5.2.2

The Landlord shall notify the Tenant whenever an EPC has been obtained in respect of the Demised Premises and its notice shall include a copy of the EPC and the reference number for the EPC;

 

5.2.3

If and to the extent the Existing EPC is no longer valid (as the result of the Tenant’s alterations or any default by the Tenant) to notify the Landlord and to obtain any EPC required to be provided from a reputable and appropriately qualified energy assessor.

 

6.

MISCELLANEOUS PROVISIONS

 

PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED as follows

 

6.1

Power of Re-entry

 

6.1.1

If the rents hereby reserved or any part thereof shall at any time be in arrear and unpaid for twenty one days after the same shall have become due (whether legally demanded or not); or

 

6.1.2

If there shall be any breach of any of the covenants on the part of the Tenant contained in this Lease; or

 

6.1.3

An Event of Insolvency arises in relation to the Tenant or in relation to any surety who at any time guarantees the obligations of the Tenant under this Lease; or

 

 

 

6.1.4

If the Tenant suffers any distress or execution or any modern equivalent of these remedies to be levied on any goods including any action taken for the recovery of rent arrears from the Tenant under Commercial Rent Arrears Recovery for the time being on the Demised Premises which is not removed within fourteen days;

 

then and in any such case it shall be lawful for the Landlord at any time thereafter to re-enter the Demised Premises or any part thereof in the name of the whole and thereupon the Term shall absolutely cease and determine but without prejudice to any right of action of the Landlord in respect of any antecedent breach of any of the covenants by the Tenant herein contained.

 

6.2

Cesser of Rent

 

If the Building and/or the Demised Premises or any part thereof or the means of access thereto are destroyed or damaged by any of the Insured Risks so far as to render the Demised Premises or any part thereof or access to them unfit for occupation and use then and so often as it happens (if at the date thereof the payment of any of the insurance monies has not been withheld or refused by reason of any act or default of the Tenant any person deriving title under the Tenant or their respective servants agents or licensees) the rent reserved under clause 2.1 and clause 2.2 and the service charge or a fair and just proportion thereof according to the nature and extent of the damage shall be suspended for so long as the Demised Premises or the access to them or the destroyed or damaged part thereof remain unfit for occupation and use by reason of such destruction or damage or for three years whichever shall be the shorter and if any dispute arises between the Landlord and the Tenant in regard to the amount or the period of the suspension of the said rent or otherwise in relation thereto it shall be referred to arbitration under the provisions of the Arbitration Act 1996.

 

6.3

No Implied Rights

 

Nothing herein contained shall (except as otherwise expressly provided) by implication of law or otherwise operate or be deemed to confer upon the Tenant any easement right or privilege whatsoever.

 

6.4

Development of Adjoining Property

 

The Landlord shall have the right at any time to make any alterations to or to pull down rebuild redevelop or otherwise deal with or use any Adjoining Property as it may deem fit without obtaining any consent from or making any compensation to the Tenant and the Tenant will not object to any planning application made by or on behalf of the Landlord in respect of the development or redevelopment of any Adjoining Property provided that the Landlord shall not materially interfere with the rights granted to the Tenant.

 

6.5

Restrictions affecting Adjoining Property

 

Nothing herein contained or implied shall give the Tenant the benefit of or the right to enforce or to have enforced or to prevent the release or modification of any covenant agreement or condition entered into by any purchaser from or by any lessee or occupier of the Landlord in respect of property not comprised in this Lease or areas over which rights are granted by this Lease for the benefit of the Tenant.

 

 

6.6

No Warranty as to Use

 

Notwithstanding the provisions as to the Permitted User contained in this Lease the Landlord does not hereby or in any other way give or make nor has given or made at any other time any representation or warranty that the Permitted User is or will be or will remain a permitted use within the provisions of the Planning Acts and notwithstanding that the Permitted User is not a permitted use as aforesaid the Tenant shall remain fully bound and liable to the Landlord in respect of the obligations undertaken by the Tenant by virtue of this Lease without any compensation recompense or relief of any kind whatsoever.

 

6.7

Exclusion of Representations

 

The Tenant acknowledges that this Lease has not been entered in reliance wholly or partly upon any statement or representation made by or on behalf of the Landlord save insofar as any such statement or representation is expressly set out in this Lease or has been made in writing by the Landlord’s solicitors to the Tenant’s solicitors before the date of entry into this Lease.

 

6.8

Disputes

 

Any dispute arising as between the Tenant and the tenants or occupiers of any property adjoining neighbouring or opposite to the Demised Premises belonging to the Landlord as to any easement right or privilege in connection with the user of the Demised Premises and such property adjoining neighbouring or opposite to the Demised Premises or as to the party or other walls separating the Demised Premises from the adjoining property or as to the amount of any contribution towards the expenses of works to services used in common with any other property shall be decided by the Landlord’s Surveyor whose decision shall be binding upon all parties to the dispute (save in the case of manifest error).

 

6.9

Removal of Tenant’s Property

 

6.9.1

If at such time as the Tenant has vacated the Demised Premises at the end of the Term any property of the Tenant shall remain in or on the Demised Premises and the Tenant shall fail to remove the same within fourteen days after being requested in writing by the Landlord so to do then the Landlord may as the agent of the Tenant sell such property and shall then hold the proceeds of sale after deducting the costs and expenses of removal storage and sale properly incurred by it to the order of the Tenant.

 

6.9.2

The Tenant shall indemnify the Landlord against any liability incurred by it to any third party whose property shall have been sold by the Landlord in the mistaken belief held in good faith (which shall be presumed unless the contrary be proved) that such property belonged to the Tenant.

 

 

6.10

Surrender of Easements

 

At any time during the Term the Tenant will at the request of the Landlord enter into a deed of variation of this Lease to give up or alter rights of access and easements granted hereunder which are not reasonably necessary for the use and/or enjoyment of the Demised Premises or which the Superior Landlord reasonably requires to be varied as part of the redevelopment of the whole or part of the Science Park so long as the alternative rights of access or other easements are no less convenient than those hereby granted and provided that the Superior Landlord indemnifies the Tenant in respect of any cost and expense reasonably incurred by the Tenant either relating to any such deed of variation or with regard to the cost of any works required to the Demised Premises or the Science Park which are the result of such request from the Superior Landlord and which are approved by the Superior Landlord (such approval not to be unreasonably withheld).

 

6.11

Notices

 

The provisions of Section 196 of the Law of Property Act 1925 as amended by the Recorded Delivery Service Act 1962 shall apply to all notices required to be served hereunder provided that while the Tenant is a company incorporated in England and Wales all notices shall be served on its registered office for the time being.

 

6.12

Jurisdiction

 

Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Lease or its subject matter or formation (including non-contractual disputes or claims).

 

6.13

Contracts (Rights of Third Parties) Act 1999

 

A person who is not a party to this Lease shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Lease. This does not affect any right or remedy of a third party which exists, or is available, apart from that Act.

 

6.14

Break Clause

 

6.14.1

In this clause the following definitions apply:

 

Landlord Break Date: 24 March 2024.

 

Break Notice: written notice to terminate this Lease.

 

6.14.2

The Landlord may terminate this Lease by serving a Break Notice on the Tenant at least nine months before the Landlord Break Date.

 

6.14.3

The Tenant may terminate this Lease by serving a Break Notice on the Landlord at any time giving at least six months’ notice of the intended date of termination (“Tenant Break Date”).

 

 

6.14.4

The Break Notice shall be in writing and, for the purposes of this clause, writing does not include facsimile transmission or email.

 

6.14.5

Following service of a Break Notice pursuant to clause 6.14.2 this Lease shall terminate on the Landlord Break Date.

 

6.14.6

Following service of a Break Notice pursuant to clause 6.14.3 this Lease shall terminate on the date specified in such Break Notice provided that the Tenant yields up the Demised Premises free from third party rights of occupation.

 

6.14.7

Time shall be of the essence in respect of all time periods and limits in this clause.

 

6.14.8

Termination of this Lease pursuant to this clause shall be without prejudice to any right or remedy of either party in respect of any antecedent breach of the covenants or conditions on the part of the other in this Lease, including any covenants expressed to be complied with before the end of the Term.

 

6.14.9

If this Lease terminates in accordance with this clause 6.14 within 14 days after the relevant break date the Landlord shall refund to the Tenant the proportion of the rents and any Value Added Tax payable in respect of them paid in advance by the Tenant for the period from and excluding the relevant break date up to and excluding the next quarter day calculated on a daily basis.

 

6.15

Uninsured risks

 

6.15.1

In this Clause 6.15 (Uninsured Risks), an “Uninsured Risk” means any risk, or some aspect of any risk, which would be covered by the risks itemised in the definition of “Insured Risks” but which:

 

(a)

is excluded from being so by reason of withdrawal of cover by the insurer and which is not otherwise available to be insured in the London insurance market; or

 

(b)

is withdrawn from cover by the Superior Landlord on the grounds that in the Superior Landlord’s reasonable opinion cover cannot be placed in the London insurance market at reasonable commercial rates or on reasonable commercial conditions.

 

6.15.2

An Insured Risk does not become an Uninsured Risk for the purposes of clause 6.15(a) by reason only of:

 

(a)

being excluded, or partially excluded, from cover due to standard exclusion provisions on the policy;

 

(b)

rejection by the insurer of liability, or some part of it, due to vitiation by the Tenant; or

 

(c)

infringement by the Landlord of policy conditions for the maintenance of cover.

 

 

6.15.3

The obligations of the Tenant to repair and to decorate, and to yield up in repair and decorated, the Demised Premises do not apply to damage or destruction caused by an Uninsured Risk.

 

6.15.4

The provisions of this clause 6.15 (Uninsured Risks) apply if the Building (whether or not directly affecting the Demised Premises) is damaged or destroyed by an Uninsured Risk so as to make the Demised Premises unfit for occupation, use or enjoyment.

 

6.15.5

If the damage or destruction referred to in clause 6.15.4 occurs, the Superior Landlord may within 12 months after the date of the damage or destruction elect to rebuild or reinstate the Demised Premises by giving notice to the Tenant to that effect and if the Superior Landlord so elects the Landlord shall use its reasonable endeavours to procure that the Superior Landlord rebuilds or reinstates the Building.

 

6.15.6

The Superior Landlord may at any time before it has made an election under clause 6.15.5 decide not to rebuild or reinstate the Building and if the Superior Landlord does so the Landlord may terminate this Lease by giving notice to the Tenant to that effect to expire immediately.

 

6.15.7

If the Superior Landlord has not made an election under clause 6.15.5 within 12 months after the date of damage or destruction of the Building, the Tenant may terminate this Lease by giving to the Landlord notice to that effect at any time thereafter to expire immediately unless the Superior Landlord has made such an election in the meantime.

 

6.15.8

During the period before the Superior Landlord makes an election under clause 6.15.5 or terminates this Lease under clause 6.15.6, the rent and service charge and insurance premiums reserved by this Lease, or a fair proportion of them according to the nature and extent of the damage or destruction sustained, are to be suspended and cease to be payable and in case of dispute the matter shall be referred to arbitration under the provisions of the Arbitration Act 1996.

 

6.15.9

If the Superior Landlord has not commenced rebuilding or reinstating the Building within twelve months after making the election under clause 6.15(e), the Tenant may terminate this Lease by giving to the Landlord notice to that effect at any time thereafter to expire immediately, unless the Superior Landlord has commenced rebuilding or reinstating the Building before the expiry of the notice.

 

6.15.10

If the Superior Landlord has not practically completed the works of rebuilding or reinstating the Building (as evidenced by the issue of the certificate or statement of practical completion under the building contract for the works) within the period of three years after making the election under Clause 6.15.5, then either the Landlord or the Tenant may terminate this Lease by giving to the other not less than six months’ notice to that effect to expire at the end of that period, unless practical completion has taken place before the expiry of the notice.

 

 

6.15.11

On the expiry of any notice of termination given under this Clause 6.15 (Uninsured Risks), this Lease will terminate unless provided otherwise, but without affecting any liability arising from a breach of covenant or condition which has occurred before then.

 

6.16

Retention of Insurance Proceeds

 

On the termination of this Lease under clause 6.15 (Uninsured Risks) or if this Lease is terminated by the operation of the doctrine of frustration or otherwise, the Tenant is not to be entitled to any of the proceeds of insurance for its exclusive benefit.

 

6.17

Landlord and Tenant Act 1954

 

6.17.1

The Landlord and the Tenant confirm that.

 

(a)

On the 7 day of March 2018 the Landlord served on the Tenant the notice referred to in Section 35(A)(3) of the Landlord and Tenant Act 1954 (as amended) applying to the tenancy created by this lease before the Tenant entered into this lease or became contractually bound to do so;

 

(b)

The Tenant or a person duly authorised by the Tenant to do so made a simple declaration dated [1] day of [March] 2018 in accordance with the requirements of Section 38(A)(3)(b) of the Landlord and Tenant Act 1954 (as amended).

 

6.17.2

Where the Statutory Declaration was made by a person other than the Tenant the Tenant confirms that such person was duly authorised by the Tenant to make the Statutory Declaration on its behalf.

 

6.17.3

The Landlord and the Tenant agree that the provisions of Sections 24 to 28 of the Landlord and Tenant Act 1954 (as amended) are excluded in relation to the tenancy created by this Lease.

 

6.18

Agreement for Lease

 

There is no agreement for lease to which this Lease gives effect.

 

7.             NEW LEASE

 

This Lease is a new tenancy for the purposes of the 1995 Act.

 

IN WITNESS whereof the parties to this Lease have executed and delivered this Lease as a deed the day and year first above written.

 

 

SCHEDULE 1

 

Part 1- Particulars of the Demised Premises

 

All those premises situate on the part of the Second Floor of the Building shown edged in red on plan D annexed to this Lease including:

 

1

the internal plaster or other finishes of all boundary and structural walls but excluding any integral part of the external wall cladding;

 

2

all non-structural walls situate wholly within the Demised Premises;

 

3

all internal windows and window frames including the glass in the windows;

 

4

all floor coverings the floor ducting and floor screed but excluding the concrete floor slabs;

 

5

the ceiling finishes including any suspended ceilings and the cavity above any suspended ceilings but excluding the concrete floor slabs;

 

6

the toilets and cloakrooms within the Demised Premises;

 

7

all plant, machinery and Conduits solely serving the Demised Premises and located therein; and

 

8

all improvements and additions made to the Demised Premises, but excluding:

 

9

the exterior and main structure of the Building including foundations, roofs, load-bearing wall, load bearing columns;

 

10

the airspace within any service risers that run through the Demised Premises; and

 

11

any plant machinery and Conduits serving the Demised Premises in common with other parts of the Building.

 

Part 2- Easements and Rights Granted

 

1

A right of way at all times for the Tenant and all others authorised by it (in common with the Superior Landlord and all others authorised by it or otherwise having the like right) to pass to and from the Science Park from and to the public highway with or without vehicles and for all proper purposes connected with the use and enjoyment of the Demised Premises over and along the Main Access Road Provided That so long as adequate access is maintained the Superior Landlord may obstruct parts of the Main Access Road where and for as long as is necessary for the purpose of carrying out repairs to the Main Access Road subject to the Superior Landlord using reasonable endeavours to keep such obstruction or interruption to a minimum insofar as it is reasonably practicable to do so.

 

2

A right of way at all times for the Tenant and all others authorised by it (in common with the Superior Landlord and all others authorised by it or otherwise having the like right) to pass to and from the Demised Premises and the Car Park with or without vehicles and for all proper purposes connected with the use and enjoyment of the Demised Premises over and along the common service roads and cycle paths and accessways and on foot only over the common footpaths from time to time within the Science Park Provided That so long as adequate access is maintained the Superior Landlord may temporarily obstruct parts of the common service roads and cycle paths and accessways and footpaths where and for as long as reasonably necessary for the purpose of carrying out repairs to the common service roads accessways and footpaths.

 

 

3

Subject as otherwise provided in this Lease full and free right of running of gas, electricity water soil drainage air smoke and other effluvia telecommunications services and data from and to the Demised Premises through the Conduits now or at any time during the Term running through under or over the remainder of the Building and/or Science Park and the land between the Science Park and the mains services and serving the Science Park or the Demised Premises.

 

4

The right for the Tenant and all persons authorised by it (in common with the Landlord and all other persons having the like right) to use the Common Parts for all proper purposes in connection with the use and enjoyment of the Demised Premises.

 

5

The right of support as now or hereafter enjoyed by the Demised Premises from any other parts of the Building.

 

6

The right for the Tenant and all persons authorised by it to park a maximum of 17 private motor vehicles in the car parking spaces within the Car Park nominated by the Superior Landlord from time to time.

 

7

The right for the Tenant and all persons authorised by it (in common with the Landlord and all other persons having the like right) to:

 

7.1

park private motor vehicles in the disabled car parking spaces in the Car Park subject to such vehicles correctly displaying a valid Blue Badge;

 

7.2

park private motor vehicles belonging to visitors to the Tenant in the visitor car parking spaces in the Car Park;

 

7.3

use the electric car charging spaces provided from time to time by the Landlord in the Car Park;

 

7.4

to use the cycle storage areas in the Car Park edged orange on plan C annexed to the Superior Lease for the parking of bicycles.

 

8

The right of access and egress for the Tenant and all persons authorised by it to the boilers and plant forming part of the Demised Premises and exclusively serving the Demised Premises which are located in another part of the Building (if any) on reasonable prior notice to the occupier of such other part of the Building (save in emergency when as much notice as practicable shall be given).

 

 

9

The right for the Tenant of the Demised Premises to have its name displayed on any tenants’ directory board erected by the Superior Landlord at the Building to a maximum of one name.

 

10

A right for the Tenant and all others authorised by it (in common with the Landlord and all others authorised by it or otherwise having the like right) to use the atrium/reception area within the ground floor of the Building for all proper purposes connected with the Permitted User.

 

Part 3- Exceptions and Reservations

 

The following rights to the Landlord and its tenants of the Science Park and every part thereof and all other persons at any time authorised by the Landlord or otherwise having the like right:

 

1

the right of running water soil gas electricity the flow of air and the passage of smoke or other effluvia from and to any other part or parts of the Science Park and the buildings which now are or may hereafter during the Term be erected thereon through the Conduits which now are or may hereafter at any time during the Term be in upon over or under the Demised Premises;

 

2

the right during the Term to build additional or relay any Conduits over through or under the Demised Premises in connection with any adjoining or neighbouring property now or hereafter during the Term belonging to the Landlord and whether or not forming part of the Science Park and to enter upon the Demised Premises for that purpose the persons exercising such rights doing as little damage as practicable to the Demised Premises and making good all damage to the Demised Premises caused thereby as soon as is reasonably practicable;

 

3

the right to make (and to retain) connections with any Conduits which now are or may hereafter during the Term upon in the Demised Premises and to enter upon the Demised Premises for that purpose (where such work cannot reasonably be carried out without access to the Demised Premises) the person or persons exercising such right doing as little damage as practicable to the Demised Premises and making good all damage done thereto as soon as is reasonably practicable;

 

4

the right at any time or times to divert (or substitute new Conduits for) any Conduits now or at any time during the Term serving the Demised Premises or any part thereof and the right to enter upon the Demised Premises for that purpose (where such work cannot reasonably be carried out without access to the Demised Premises) subject to the person exercising such right doing as little damage and causing as little inconvenience and as little interference with the Tenant’s use and enjoyment of the Demised Premises as reasonably possible in the exercise of such right and making good any damage caused to the Demised Premises as soon as is reasonably practicable;

 

5

full right and liberty to enter upon the Demised Premises for the purposes specified in clause 3 of this Lease;

 

 

6

where the Tenant (in its absolute discretion) consents, the right to enter the Demised Premises to carry outworks to the Demised Premises to improve their Environmental Performance;

 

7

all rights of support and other easements and rights over the Demised Premises now or hereafter enjoyed by the remainder of the Building and any nearby premises or any other premises now or during the Term belonging to the Landlord or by any tenants of the Landlord on the Science Park;

 

8

the right to the unimpeded access of light and air over the Demised Premises to the windows and openings of nearby premises as existing and belonging to the Landlord at the date hereof;

 

9

the right at any time and for any purposes to erect a new building or to alter any building for the time being on any nearby premises or any other premises now or during the term belonging to the Landlord in any manner whatsoever and to use or let the same for any purpose or otherwise deal therewith and the right to grant consent to any person so erecting or altering notwithstanding that such erection or alteration may diminish the access of light and air enjoyed by the Demised Premises.

 

Part 4 - Documents Affecting Title

 

The covenants conditions restrictions and stipulations contained or referred to in official copies for title number ON324755 dated 20th December 2017 and timed at 16:54:48 and in official copies for title number ON323918 dated 20th December 2017 and timed at 16:54:48 in so far as these are capable of affecting the Demised Premises.

 

 

 

SCHEDULE 2

 

Provisions for the review of the principal rent

 

1

The yearly rent will increase in the same proportion as the yearly rent reserved by the Superior Lease on the Review Date under the Superior Lease.

 

2

The yearly rent may also be adjusted from time to time to reflect changes in the price paid by the Landlord for electricity, water and other services to the Second Floor.

 

3

The Landlord will notify the Tenant of any communication received by the Landlord from the Superior Landlord in relation to the review of the rent under the Superior Lease. The Landlord will allow the Tenant to comment on the rent review proposed for the Superior Lease and will pass on or incorporate any reasonable comments or representations made by the Tenant.

 

4

The Landlord will notify the Tenant of changes to the yearly rent in writing. If there is any dispute as to the level of the yearly rent, either the Landlord or the Tenant may at any time apply to the President to appoint a Surveyor to determine the yearly rent. The yearly rent will not be finally ascertained until it has been approved by the Superior Landlord.

 

5

MANNER OF DETERMINATION

 

5.1

The Surveyor will act as an arbitrator in accordance with the Arbitration Act 1996 or (if the Landlord so elects by notice in writing) an expert.

 

5.2

The Surveyor shall not start acting until his appointment has been approved by the Superior Landlord.

 

5.3

The Surveyor shall be a partner or director in a practice of Chartered Surveyors and he shall have experience in valuing properties similar to the Demised Premises.

 

5.4

If the Surveyor acts as an arbitrator, the decision of the Surveyor shall be final and binding on the parties.

 

5.5

If the Surveyor acts as an expert, the Surveyor shall afford each of the parties an opportunity to make written representations and cross-representations to him.

 

5.6

The costs of the reference shall be in the award of the Surveyor whose decision shall be final and binding on the Landlord and the Tenant and, failing such award, the costs shall be borne by the Landlord and the Tenant in equal shares.

 

5.7

If one party upon publication of the award of the Surveyor shall pay all the Surveyor’s fees and expenses, such party shall be entitled to recover on demand such proportion as the Surveyor shall award against the other party.

 

 

6

APPOINTMENT OF SUBSTITUTE SURVEYOR

 

If the Surveyor refuses to act or is incapable of acting or dies, either the Landlord or the Tenant may apply to the President for the appointment of a further Surveyor to act in the same capacity.

 

7

ASCERTAINMENT AFTER REVIEW DATE

 

If by a Review Date the yearly rent payable from that Review Date has not been ascertained the Tenant shall continue to pay the yearly rent at the rate payable immediately preceding that Review Date and within fourteen days after such ascertainment the Tenant shall pay to the Landlord:

 

7.1

the amount of the difference between the yearly rent so paid and the yearly rent ascertained for the period commencing on such Review Date and ending on the quarter day following such ascertainment; and

 

7.2

interest at the Base Rate prevailing on the date of ascertainment in respect of each instalment of the yearly rent due on or after such Review Date on the amount by which each instalment of the yearly rent so ascertained which would have been paid on such Review Date or a subsequent quarter day exceeds the amount so paid on account and such interest shall be payable for the period from the date upon which the relevant instalment was due up to the date of payment which sums shall be recoverable as arrears of rent.

 

8

STATUTORY RESTRICTIONS

 

If at any time there is by virtue of any statute a restriction upon the Landlord’s right to review the yearly rent or upon the right of the Landlord to recover the yearly rent otherwise payable following a Review Date, then upon the ending, removal or modification of any such restriction the Landlord may at any time thereafter give to the Tenant notice requiring an additional rent review as at a date specified in the notice which date shall not be earlier than one month after the giving of the notice and shall for the purpose of this Schedule be a Review Date.

 

9

EXECUTION OF MEMORANDUM

 

9.1

Within one month of the amount of any increased yearly rent being ascertained in accordance with this Schedule the parties to the Lease will execute a memorandum recording the amount of the yearly rent and each party shall bear their own costs in this regard.

 

9.2

Failure to complete a memorandum of the increased yearly rent shall not prevent the yearly rent from being payable by the Tenant and recoverable by the Landlord in accordance with this Lease.

 

 

SCHEDULE 3

 

Part 1 - Provisions relating to the Service Charge

 

1

Such proportion of the rents and other costs payable by the Landlord pursuant to the Superior Lease as is reasonably attributable to meeting rooms, corridors and other premises used or intended for use by the occupiers of the Second Floor.

 

2

Maintaining repairing operating and (as often as occasion shall reasonably require) replacing the boilers heating apparatus comfort cooling ventilation plant and all plant generators and other equipment from time to time serving the whole of the Second Floor.

 

3

Maintaining repairing testing and (as often as occasion shall reasonably require) replacing sprinklers and other fire-fighting equipment serving the Second Floor.

 

4

Providing and maintaining such security systems and employing such security personnel as the Landlord may consider necessary in respect of the Second Floor.

 

5

Effecting insurance against third party employers and public liability in respect of the Second Floor.

 

6

Effecting insurance in respect of lifts boilers and electrical or mechanical equipment and apparatus serving the Second Floor.

 

7

The wages (which shall include pensions national insurance contributions and other expenses properly incurred by the Landlord in connection with their employment) and business accommodation (including the rental value (as reasonably assessed by the Landlord) of accommodation provided) for such staff as shall be employed in connection with the matters mentioned in this part of this Schedule.

 

8

Professional fees reasonably incidental to any of the matters mentioned in this part of this Schedule and the reasonable costs to the Landlord of managing the Second Floor which if the Landlord manages them may include a reasonable management charge (not exceeding 10%) in respect of its services including the cost of computing and collecting the service charges and other payments payable hereunder (but not pursuing arrears) and the auditing of the annual certificate in respect of the service charge.

 

9

The provision maintenance or replacement of any plant equipment machinery vehicle chattel or thing used by the Landlord or such agents staff or servants for any of the above mentioned purposes which the Landlord may in its reasonable discretion from time to time consider desirable including the costs of renting or hiring such plant machinery or equipment.

 

10

All outgoings (including rates and the cost of public services) in connection with any Common Parts or the Demised Premises.

 

 

11

All bank and other charges in relation to the setting up and maintaining of any bank account by the Landlord or its managing agents in respect of the Building service charges and all interest properly incurred by the Landlord in relation thereto.

 

12

The supply of electricity and gas to the Demised Premises and the Common Parts.

 

13

The amount of any Value Added Tax or any other similar tax charge or duty payable in respect of the provision of services by the Landlord which is not recoverable by the Landlord.

 

14

Such other works and services as the Landlord shall reasonably consider ought to be carried out and provided for the benefit of the Second Floor or for the proper maintenance and servicing of the Second Floor or any part of them.

 

Part 2 - Calculation of Tenant’s Proportion

 

1

The annual amount of the service charge payable by the Tenant for the Second Floor Services shall be a fair and reasonable proportion of the costs, expense and outgoings expended and incurred in supplying the Second Floor Services incurred by the Landlord in the year to which the same relates and the said service charge shall be apportioned on a day to day basis in respect of the first and last years of the Term Provided Always that if the Landlord shall hereafter so reasonably determine the Tenant’s Proportion may be altered in such manner as the Landlord shall from time to time consider to be fair and equitable.

 

2

The Landlord shall at all times keep an account of all such costs expenses and outgoings as aforesaid expended or incurred in supplying the Second Floor Services during each year down to the thirty-first day of July (every reference to a year made in this Schedule shall unless the Landlord shall otherwise determine mean a reference to a year down to the thirty-first day of July) and such account with all necessary supporting receipts and other documentation shall be open to inspection by the Tenant at all reasonable times for a period of two months from the account being supplied to the Tenant and every entry in such account shall (in the absence of manifest error) be sufficient evidence of the expenditure recorded therein.

 

3

As soon as may be before or after the beginning of every year, the Landlord or its managing agents shall make a reasonable estimate of the anticipated amount of the said costs expenses and outgoings to be incurred in the ensuing year and shall notify the Tenant accordingly.

 

4

During each year in respect of which such estimate shall have been made, the Tenant shall pay to the Landlord on account of the Tenant’s liability hereunder an amount equal to the Tenant’s Proportions of such estimate and one twelfth thereof shall be paid in advance on the first day of each calendar month in respect of every calendar month of such year comprised in the Term Provided Always that if the Tenant shall not be notified of such estimate until after the commencement of any year the Tenant shall within seven days of the receipt of such notification pay to the Landlord such monthly payments as would otherwise have become payable by the Tenant in respect of the period from the commencement of the relevant year to the date of such notification had the Tenant been notified of such estimate prior to the commencement of the relevant year.

 

 

5

As soon as possible after the end of every year, the Landlord or its managing agents shall issue a certificate which shall be audited by an independent and duly qualified auditor certifying the total amount of the said costs expenses and outgoings for the preceding year and such certificate shall (in the absence of manifest error) be conclusive and binding upon the Tenant and the Landlord shall supply the Tenant with a summary of the said costs expenses and outgoings in addition to the certificate.

 

6

Within fourteen days after the delivery to the Tenant of a copy of the certificate as aforesaid such payment shall be made to the Tenant or the Tenant shall make such payment to the Landlord as shall be requisite for ensuring that the Tenant has paid the Tenant’s Proportion of all the costs expenses and outgoings as aforesaid in respect of the preceding service charge year Provided Always that the provisions of this paragraph shall continue to apply notwithstanding the expiration or sooner determination of the Term but only in respect of the period down to such expiration or sooner determination as aforesaid.

 

7

Notwithstanding any other provision of this Schedule 3 or this Lease the Tenant shall not be liable to contribute towards the cost of any redevelopment of any part of the Science Park.

 

8

The Landlord shall not be entitled to recover from the Tenant by way of the Tenant’s Proportion:

 

8.1

Costs attributable to other accommodation within the Science Park designated and intended for letting but which are currently vacant;

 

8.2

The initial provision of any items that are part of the original design and construction of the Building, its plant, fabric or equipment, together with the initial setting up that is part of the development of the Building as per the plans and specifications annexed to the Agreement for Lease;

 

8.3

The cost of remedying any Latent Defects in any part of the Building other than the Demised Premises.

 

 

SCHEDULE 4

 

Science Park Regulations and Stipulations

 

1

No rubbish or waste materials shall be burnt on the Science Park.

 

2

There shall be no open storage of materials or goods or refuse on the Science Park.

 

3

The Main Access Road and the common service roads accessways and footpaths from time to time upon the Science Park shall not at any time be obstructed and no motor or other vehicle shall be parked or left on any of the common service roads accessways or footpaths.

 

4

Compliance with all speed parking or other reasonable regulations and traffic directions which the Landlord may from time to time make (in the interests of the owners and occupiers of the Science Park or any part thereof or of road safety) in respect of the common roads footpaths and ways on the Science Park.

 

5

Facilities for the keeping of refuse in proper receptacles readily accessible for collection shall be provided by the Tenant within buildings on the Science Park or in an external compound for rubbish suitably screened and located.

 

6

Compliance with all reasonable security arrangements for the Science Park or any part thereof from time to time required by the Landlord.

 

7

No sign or advertisement shall be erected or affixed to the exterior of any building on the Science Park or within the curtilage of any building except such as shall be approved in writing by the Landlord and all signs erected shall conform with signs erected throughout the Science Park.

 

8

No explosive or inflammable oils petrol or substances shall be stored or used on the Demised Premises or any part thereof (other than fuel in the tanks of vehicles parked in any parking spaces or bays) without due compliance with the requirements of the insurers of the Demised Premises and all statutory requirements.

 

9

No aerials satellite dishes chimneys vents or flues shall be erected which shall be visible from any other part of the Science Park.

 

10

No electronic equipment shall be used or signals emitted which may interfere with any electronic equipment used on any other part of the Science Park.

 

11

Such further or other reasonable regulations or stipulations as the Landlord may from time to time deem reasonably necessary for the orderly safe or convenient management of the Science Park.

 

 

EXECUTED as a DEED by		)
OXFORD SCIENCES		)
INNOVATION PLC acting by:-		)
Director			/s/ Jim Wilkinson
in the presence of:-		)
Signature of Witness: /s/ Kate O'Brien
Name of Witness: Kate O'Brien
Address:	1 Aston St.
	Oxford
	OX4 1EW
Occupation:	Lawyer
EXECUTED as a DEED by		)
VACCITECH LIMITED		)
acting by:-		)
Director			/s/ Thomas G. Evans
in the presence of:-		)
Signature of Witness: /s/ Pippa Rathbone
Name of Witness: Pippa Rathbone
Address:	4 Weavers Branch
	Thame, OX4 4GE
Occupation:	Administrator

 

Exhibit 21.1

 

SUBSIDIARIES

 

Subsidiary		Jurisdiction of Incorporation
Vaccitech Australia Pty Limited		Australia
Vaccitech Oncology Limited		England and Wales
Vaccitech (UK) Limited (formerly Vaccitech Limited)		England and Wales
Vaccitech USA Inc.		Delaware
Vaccitech Italia S.R.L.		Italy

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

Vaccitech PLC

Oxford, United Kingdom

 

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 22, 2021 relating to the consolidated financial statements of Vaccitech (UK) Limited (formerly Vaccitech Limited), which is contained in that Prospectus.

 

We also consent to the reference to us under the caption “Experts” in the Prospectus.

 

/s/ BDO LLP

 

BDO LLP

London, United Kingdom

 

April 9, 2021