0001493152-18-007237.txt : 20180516 0001493152-18-007237.hdr.sgml : 20180516 20180516102243 ACCESSION NUMBER: 0001493152-18-007237 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20180516 DATE AS OF CHANGE: 20180516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Provention Bio, Inc. CENTRAL INDEX KEY: 0001695357 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-224801 FILM NUMBER: 18839092 BUSINESS ADDRESS: STREET 1: 110 OLD DRIFTWAY LANE CITY: LEBANON STATE: NJ ZIP: 08833 BUSINESS PHONE: 908-428-9136 MAIL ADDRESS: STREET 1: 110 OLD DRIFTWAY LANE CITY: LEBANON STATE: NJ ZIP: 08833 FORMER COMPANY: FORMER CONFORMED NAME: Provention Inc. DATE OF NAME CHANGE: 20170120 S-1/A 1 forms-1a.htm

As filed with the Securities and Exchange Commission on May 16 , 2018.

Registration No. 333-224801

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1
to
Form S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

Provention Bio, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

2834

81-5245912

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

P.O. Box 666

Oldwick, New Jersey 08858

(908) 336-0360

(Address, including zip code, and telephone number,

including area code, of principal executive offices)

Ashleigh Palmer

Chief Executive Officer

Provention Bio, Inc.

P.O. Box 666

Oldwick, New Jersey 08858

(908) 336-0360

(Address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Michael J. Lerner, Esq.

Steven M. Skolnick, Esq.

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

Telephone: (973) 597-6394

Andrew Hudders, Esq.

Golenbock Eiseman Assor Bell & Peskoe LLP

711 Third Avenue – 17th Floor

New York, NY 10017

Telephone: (212) 907-7349

Approximate date of proposed sale to public: As soon as practicable on or after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. [X]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)

	Smaller reporting company [X]

	Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [X]

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

EXPLANATORY NOTE

Provention Bio, Inc. is filing this pre-effective Amendment No.1 (the “Amendment”) to the Registration Statement on Form S-1 (333-224801), as an exhibit-only filing to file exhibits 4.4, 10.17, 10.18, 10.19, and 24.1. Accordingly, this Amendment consists only of the facing page, this explanatory note, Part II of the Registration Statement, the signature page to the Registration Statement, the exhibit index and the exhibits being filed with this Amendment. The prospectus is unchanged and has been omitted.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses to be incurred in connection with the sale and distribution of our common stock being registered hereby, all of which will be borne by us (except any underwriting discounts and commissions and expenses incurred for brokerage, accounting, tax or legal services or any other expenses incurred in disposing of the shares). All amounts shown are estimates except the SEC registration fee.

SEC Filing Fee	$	7,004
FINRA Fee	$	8,937.50
Underwriter Legal Fees and Expenses.	$	*
Qualified Independent Underwriter Fees and Expenses	$	*
Nasdaq Fee	$	*
Printing Expenses	$	*
Accounting Fees and Expenses	$	*
Consulting Fees and Expenses	$	*
Legal Fees and Expenses	$	*
Transfer Agent and Registrar Expenses	$	*
Miscellaneous	$	*

Total	$	*

* To be filed by amendment

ITEM 14. INDEMNIFCATION OF DIRECTORS AND OFFICERS

As permitted by Section 102 of the Delaware General Corporation Law, we have adopted provisions in our amended and restated certificate of incorporation and bylaws that limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:

	●	any breach of the director’s duty of loyalty to us or our stockholders;
	●	any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
	●	any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or
	●	any transaction from which the director derived an improper personal benefit.

These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our amended and restated certificate of incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law.

As permitted by Section 145 of the Delaware General Corporation Law, our bylaws provide that:

	●	we may indemnify our directors, officers, and employees to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions;
	●	we may advance expenses to our directors, officers and employees in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions; and
	●	the rights provided in our bylaws are not exclusive.

Our amended and restated certificate of incorporation, to be attached as Exhibit 3.2 hereto, and our amended and restated bylaws, to be attached as Exhibit 3.4 hereto, provide for the indemnification provisions described above and elsewhere herein. We have entered into and intend to continue to enter into separate indemnification agreements with our directors and officers which may be broader than the specific indemnification provisions contained in the Delaware General Corporation Law. These indemnification agreements generally require us, among other things, to indemnify our officers and directors against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements also generally require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified. In addition, we have purchased a policy of directors’ and officers’ liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of our officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

The form of Underwriting Agreement, to be attached as Exhibit 1.1 hereto, under some circumstances provides for indemnification by the underwriter of us and our officers who sign this Registration Statement and directors for specified liabilities, including matters arising under the Securities Act.

Item 15. Recent Sales of Unregistered Securities.

The following list sets forth information as to all securities we have sold since October 4, 2016, which were not registered under the Securities Act.

1.	On April 25, 2017, we issued an aggregate of 11,381,999 shares of our Series A Preferred Stock at a price per share of $2.50 for aggregate proceeds to us of $28,455,000.

2.	On April 25, 2017, we issued a Series A Preferred Stock warrant convertible into an aggregate of 558,740 shares of common stock, upon consummation of this offering, with an exercise price of $2.50 per share.

3.	We granted stock options to employees and consultants under our 2017 Equity Incentive Plan, covering an aggregate of 2,656,435 shares of common stock, that have an exercise price of $2.50 per share.

4.	We sold an aggregate of 10,000,000 shares of common stock to our founders, a partner and the underwriter for cash consideration in the aggregate amount of $1,000.00.

5.	On May 7, 2018, we issued common stock warrants convertible into an aggregate of 2,432,688 shares of common stock, that have an exercise price of $2.50 per share.

We claimed exemption from registration under the Securities Act for the sale and issuance of securities in the transactions described in paragraph (1) by virtue of Section 4(a)(2) and/or Regulation D promulgated thereunder as transactions not involving any public offering. All of the purchasers of unregistered securities for which we relied on Section 4(a)(2) and/or Regulation D represented that they were accredited investors as defined under the Securities Act. We claimed such exemption on the basis that (a) the purchasers in each case represented that they intended to acquire the securities for investment only and not with a view to the distribution thereof and that they either received adequate information about the registrant or had access, through employment or other relationships, to such information and (b) appropriate legends were affixed to the stock certificates issued in such transactions.

We claimed exemption from registration under the Securities Act for the sales and issuances of securities in the transactions described in paragraphs (2) and (3) above under Section 4(a)(2) of the Securities Act in that such sales and issuances did not involve a public offering or under Rule 701 promulgated under the Securities Act, in that they were offered and sold either pursuant to written compensatory plans or pursuant to a written contract relating to compensation, as provided by Rule 701.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit No.		Description of Document

1.1		Form of Underwriting Agreement***
3.1		Amended and Restated Articles of Incorporation of Provention, as currently in effect*
3.2		Bylaws of the Registrant, as currently in effect*
3.3		Form of Amended and Restated Certificate of Incorporation of Provention, to be in effect upon completion of the offering***
3.4		Form of Amended and Restated Bylaws of Provention, to be in effect upon completion of the offering***
4.1		Specimen Certificate representing shares of common stock of Provention ***
4.2		Form of Underwriter’s Warrant***
4.3		Form of Warrant dated April 25, 2017, issued to MDB Capital Group, LLC*
4.4		Form of Warrant dated May 7, 2018, issued to MacroGenics, Inc.**
5.1		Opinion of Lowenstein Sandler LLP regarding the validity of the common stock being registered***
10.1		Engagement Agreement dated September 19, 2016, between Provention and MDB Capital Group, LLC*
10.2		Form of Indemnification Agreement entered into by Provention with its Officers and Directors*
10.3		2017 Provention Bio, Inc. Stock Incentive Plan*
10.4		Form of Stock Option Award under 2017 Provention Bio, Inc. Stock Incentive Plan†*
10.5		Form of Lock-Up Agreement with MDB Capital Group, LLC*
10.6		License Agreement by and between Provention and Vactech Ltd., dated April 25, 2017*‡
10.7		License, Development and Commercialization Agreement by and between Provention and Janssen Pharmaceutica NV (CSF-1R), dated April 25, 2017*‡
10.8		License, Development and Commercialization Agreement by and between Provention and Janssen Sciences Ireland UC (TLR3), dated April 25, 2017*‡
10.9		Form of Securities Purchase Agreement between Provention and investors for an offering completed on April 25, 2017*
10.10		Form of Registration Rights Agreement between Provention and investors for an offering completed on April 25, 2017*
10.11		Form of Voting Agreement between Provention and investors for an offering completed on April 25, 2017*
10.12		Form of Right of First Refusal and Co-Sale Agreement between Provention and investors for an offering completed on April 25, 2017*
10.13		Employment Agreement, dated April 25, 2017, between Provention and Ashleigh Palmer†*
10.14		Employment Agreement, dated April 25, 2017, between Provention and Francisco Leon†*
10.15		Employment Agreement, dated June 20, 2017, between Provention and Eleanor Ramos†*
10.16		Employment Agreement, dated September 21, 2017, between Provention and Andrew Drechsler†*
10.17		Development Services Agreement by and between Provention and Intravacc dated March 6, 2018 ‡**
10.18		License Agreement by and between Provention and MacroGenics, Inc. dated May 7, 2018 ‡**
10.19		Asset Purchase Agreement by and between Provention and MacroGenics, Inc. dated May 7, 2018 ‡**
10.20		Form of Escrow Deposit Agreement for the offering***
10.21		Form of Subscription Agreement for the offering***
23.1		Consent of EisnerAmper LLP, Independent Registered Public Accounting Firm for the financial statements of Provention Bio, Inc.*
23.2		Consent of Lowenstein Sandler LLP (included in Exhibit 5.1)***
24.1		Power of Attorney (included on the signature page)**

*		Previously filed.

**		Filed herewith.

***		To be filed by amendment.

†		Indicates management contract or compensatory plan.

‡		Confidential treatment has been requested with respect to certain portions of this exhibit.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oldwick, New Jersey on this 16^th day of May, 2018.

	PROVENTION BIO, INC.

	By:	/s/ Ashleigh Palmer
	Name:	Ashleigh Palmer,
	Title:	President, Chief Executive Officer and Director

Each person whose signature appears below constitutes and appoints Ashleigh Palmer and Andrew Drechsler his true and lawful attorney-in-fact and agent, each with full power of substitution and re-substitution, severally, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement on Form S-1, any subsequent registration statements pursuant to Rule 462 of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. This power of attorney may be executed in counterparts.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Ashleigh Palmer	President, Chief Executive Officer and Director	May 16 , 2018
Ashleigh Palmer	(Principal Executive Officer)

/s/ Andrew Drechsler	Chief Financial Officer	May 16 , 2018
Andrew Drechsler	(Principal Financial and Accounting Officer)

/s/ Francisco Leon	Chief Scientific Officer and Director	May 16 , 2018
Francisco Leon

/s/ Anthony DiGiandomenico	Director	May 16 , 2018
Anthony DiGiandomenico

/s/ Cameron Gray	Director	May 16 , 2018
Cameron Gray

/s/ Wayne Pisano	Director	May 16 , 2018
Wayne Pisano

EX-4.4 2 ex4-4.htm

FORM of WARRANT

Warrant Number ____

THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) SUCH TRANSACTION IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OR (2) THE COMPANY IS PROVIDED WITH AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, STATING THAT SUCH TRANSACTION IS IN COMPLIANCE WITH EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS. NO TRANSFER OF ANY INTEREST IN THIS WARRANT OR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE EFFECTED WITHOUT FIRST SURRENDERING THIS WARRANT OR SUCH SECURITIES, AS THE CASE MAY BE, TO THE COMPANY OR ITS TRANSFER AGENT, IF ANY.

Warrant to Purchase

Shares of

Common Stock

As Herein Described

May __, 2018

WARRANT TO PURCHASE COMMON STOCK OF

PROVENTION BIO, INC.

This is to certify that, for value received, MacroGenics, Inc., or a proper assignee (the “Holder”), is entitled to purchase up to 270,299 shares (“Warrant Shares”) of common stock, $0.0001 par value per share (the “Common Stock”), of Provention Bio, Inc., a Delaware corporation (the “Company”), subject to the provisions of this Warrant. This Warrant shall be exercisable at Two Dollars and Fifty Cents ($2.50) per share (the “Exercise Price”). This Warrant also is subject to the following terms and conditions:

1. Exercise and Payment; Exchange.

(a) This Warrant may be exercised in whole or in part at any time from and after the date hereof (the “Commencement Date”) through the close of business on May __, 2025 (the “Expiration Date”), at which time this Warrant shall expire and become void, but if such date is a day on which federal or state chartered banking institutions located in the State of New York are authorized to close, then on the next succeeding day which shall not be such a day. Exercise (“Exercise”) shall be by presentation and surrender to the Company, or at the office of any transfer agent designated by the Company (the “Transfer Agent”), of (i) this Warrant, (ii) the attached exercise form properly executed, and (iii) a certified or official bank check for the Exercise Price for the number of Warrant Shares specified in the exercise form. If this Warrant is exercised in part only, the Company or the Transfer Agent shall, upon surrender of the Warrant, execute and deliver a new Warrant evidencing the rights of the Holder to purchase the remaining number of Warrant Shares purchasable hereunder. Upon receipt by the Company of this Warrant, the properly executed exercise form, and payment as aforesaid, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. Under no circumstance shall the Company be required to make any cash payments or net cash settlement to the Holder in lieu of delivery of the Warrant Shares.

(b) In lieu of exercising this Warrant for cash pursuant to Section 2 (a), if the fair market value of one Warrant Share is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Warrant Shares equal to the value of this Warrant (or of any portion of this Warrant being canceled) by Exercise of this Warrant, in which event the Company shall issue to the Holder that number of Warrant Shares computed using the following formula:

X	=	Y (A – B)
		A

Where:

X = The number of Warrant Shares to be issued to the Holder

Y = The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

A = The fair market value of one Warrant Share (at the date of such calculation)

B = The Exercise Price (as adjusted to the date of such calculation)

For purposes of the calculation above, the fair market value of one Warrant Share shall be determined as set forth in Section 3(a) – (c) below.

(b) Conditions to Exercise or Exchange. The restrictions in Section 7 shall apply, to the extent applicable by their terms, to any exercise or exchange of this Warrant permitted by this Section 1.

2. Reservation of Shares. The Company shall, at all times until the expiration of this Warrant, reserve for issuance and delivery upon exercise of this Warrant the number of Warrant Shares which shall be required for issuance and delivery upon exercise of this Warrant. Upon issuance, all Warrant Shares will be validly issued and outstanding, fully paid and non-assessable, and free from all taxes, liens and charges with respect to the issuance thereof.

3. Fractional Interests. The Company shall not issue any fractional shares or scrip representing fractional shares upon the exercise or exchange of this Warrant. With respect to any fraction of a share resulting from the exercise or exchange hereof, the Company shall pay to the Holder an amount in cash equal to such fraction multiplied by the current fair market value per share of Common Stock, determined as follows:

(a) If the Common Stock is listed on a national securities exchange or admitted to unlisted trading privileges on such an exchange, the current fair market value shall be the last reported sale price of the Common Stock on such exchange on the last business day prior to the date of exercise of this Warrant or if no such sale is made on such day, the mean of the closing bid and asked prices for such day on such exchange;

(b) If the Common Stock is not so listed or admitted to unlisted trading privileges on a national securities exchange, the current fair market value shall be the mean of the last bid and asked prices reported on the last business day prior to the date of the exercise of this Warrant by the OTC Markets Group, Inc.; or

(c) If the Common Stock is not so listed or admitted to unlisted trading privileges on a national securities exchange and bid and asked prices are not so reported, the current fair market value shall be an amount, not less than book value, determined in such reasonable manner as may be prescribed by the Company in good faith.

4. No Rights as Shareholder. This Warrant shall not entitle the Holder to any rights as a shareholder of the Company, either at law or in equity. The rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

5. Adjustments in Number and Exercise Price of Warrant Shares.

5.1 The number of shares of Common Stock for which this Warrant may be exercised and the Exercise Price therefor shall be subject to adjustment as follows:

(a) If the Company is recapitalized through the subdivision or combination of its outstanding shares of Common Stock into a larger or smaller number of shares, the number of Warrant Shares shall be increased or reduced, as of the record date for such recapitalization, in the same proportion as the increase or decrease in the outstanding shares of Common Stock, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of all of the Warrant Shares issuable hereunder immediately after the record date for such recapitalization shall equal the aggregate amount so payable immediately before such record date.

(b) If the Company declares a dividend on Common Stock payable in Common Stock or securities convertible into Common Stock, the number of shares of Common Stock for which this Warrant may be exercised shall be increased as of the record date for determining which holders of Common Stock shall be entitled to receive such dividend, in proportion to the increase in the number of outstanding shares (and shares of Common Stock issuable upon conversion of all such securities convertible into Common Stock) of Common Stock as a result of such dividend, and the Exercise Price shall be adjusted so that the aggregate amount payable for the purchase of all the Warrant Shares issuable hereunder immediately after the record date for such dividend shall equal the aggregate amount so payable immediately before such record date.

(c) If the Company distributes to holders of its Common Stock, other than as part of its dissolution or liquidation or the winding up of its affairs, any evidence of indebtedness or any of its assets (other than cash, Common Stock or securities convertible into Common Stock), the Company shall give written notice to the Holder of any such distribution at least fifteen (15) days prior to the proposed record date in order to permit the Holder to exercise this Warrant on or before the record date. There shall be no adjustment in the number of shares of Common Stock for which this Warrant may be exercised, or in the Exercise Price, by virtue of any such distribution.

(d) If the Company offers rights or warrants to the holders of Common Stock which entitle them to subscribe to or purchase additional Common Stock or securities convertible into Common Stock, the Company shall give written notice of any such proposed offering to the Holder at least fifteen (15) days prior to the proposed record date in order to permit the Holder to exercise this Warrant on or before such record date. There shall be no adjustment in the number of shares of Common Stock for which this Warrant may be exercised, or in the Exercise Price, by virtue of any such distribution.

(e) If the event, as a result of which an adjustment is made under paragraph (a) or (b) above, does not occur, then any adjustments in the Exercise Price or number of shares issuable that were made in accordance with such paragraph (a) or (b) shall be adjusted to the Exercise Price and number of shares as were in effect immediately prior to the record date for such event.

5.2 In the event of any reorganization or reclassification of the outstanding shares of Common Stock (other than a change in par value or from no par value to par value, or from par value to no par value, or as a result of a subdivision or combination) or in the event of any consolidation or merger of the Company with another entity after which the Company is not the surviving entity, at any time prior to the expiration of this Warrant, upon subsequent exercise of this Warrant the Holder shall have the right to receive the same kind and number of shares of common stock and other securities, cash or other property as would have been distributed to the Holder upon such reorganization, reclassification, consolidation or merger had the Holder exercised this Warrant immediately prior to such reorganization, reclassification, consolidation or merger, appropriately adjusted for any subsequent event described in this Section 5. The Holder shall pay upon such exercise the Exercise Price that otherwise would have been payable pursuant to the terms of this Warrant. If any such reorganization, reclassification, consolidation or merger results in a cash distribution in excess of the then applicable Exercise Price, the Holder may, at the Holder’s option, exercise this Warrant without making payment of the Exercise Price, and in such case the Company shall, upon distribution to the Holder, consider the Exercise Price to have been paid in full, and in making settlement to the Holder, shall deduct an amount equal to the Exercise Price from the amount payable to the Holder.

5.3 If the Company shall, at any time before the expiration of this Warrant, dissolve, liquidate or wind up its affairs, the Holder shall have the right to receive upon exercise of this Warrant, in lieu of the shares of Common Stock of the Company that the Holder otherwise would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to the Holder upon any such dissolution, liquidation or winding up with respect to such Common Stock receivable upon exercise of this Warrant on the date for determining those entitled to receive any such distribution. If any such dissolution, liquidation or winding up results in any cash distribution in excess of the Exercise Price provided by this Warrant, the Holder may, at the Holder’s option, exercise this Warrant without making payment of the Exercise Price and, in such case, the Company shall, upon distribution to the Holder, consider the Exercise Price to have been paid in full and, in making settlement to the Holder, shall deduct an amount equal to the Exercise Price from the amount payable to the Holder.

6. Notices to Holder. So long as this Warrant shall be outstanding (a) if the Company shall pay any dividends or make any distribution upon the Common Stock otherwise than in cash or (b) if the Company shall offer generally to the holders of Common Stock the right to subscribe to or purchase any shares of any class of Common Stock or securities convertible into Common Stock or any similar rights or (c) if there shall be any capital reorganization of the Company in which the Company is not the surviving entity, recapitalization of the capital stock of the Company, consolidation or merger of the Company with or into another corporation, sale, lease or other transfer of all or substantially all of the property and assets of the Company, or voluntary or involuntary dissolution, liquidation or winding up of the Company, then in such event, the Company shall cause to be mailed to the Holder, at least thirty (30) days prior to the relevant date described below (or such shorter period as is reasonably possible if thirty (30) days is not reasonably possible), a notice containing a description of the proposed action and stating the date or expected date on which a record of the Company’s shareholders is to be taken for the purpose of any such dividend, distribution of rights, or such reclassification, reorganization, consolidation, merger, conveyance, lease or transfer, dissolution, liquidation or winding up is to take place and the date or expected date, if any is to be fixed, as of which the holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such event.

7. Transfer, Exercise, Exchange, Assignment or Loss of Warrant, Warrant Shares or Other Securities.

7.1 This Warrant may be transferred, exercised, exchanged or assigned (“transferred”), in whole or in part, subject to the following restrictions. This Warrant and the Warrant Shares or any other securities (“Other Securities”) received upon exercise of this Warrant shall be subject to restrictions on transferability until registered under the Securities Act of 1933, as amended (the “Securities Act”), unless an exemption from registration is available. Until this Warrant and the Warrant Shares or Other Securities are so registered or exempt from registration, this Warrant and any certificate for Warrant Shares or Other Securities issued or issuable upon exercise of this Warrant shall contain a legend on the face thereof, in form and substance satisfactory to counsel for the Company, stating that this Warrant, the Warrant Shares or Other Securities may not be sold, transferred or otherwise disposed of unless, in the opinion of counsel satisfactory to the Company, which may be counsel to the Company, that this Warrant, the Warrant Shares or Other Securities may be transferred without such registration. This Warrant and the Warrant Shares or Other Securities may also be subject to restrictions on transferability under applicable state securities or blue sky laws.

7.2 Any transfer permitted hereunder shall be made by surrender of this Warrant to the Company or to the Transfer Agent at its offices with a duly executed request to transfer the Warrant, which shall provide adequate information to effect such transfer and shall be accompanied by funds sufficient to pay any transfer taxes applicable. The Company or Transfer Agent shall, without charge, execute and deliver a new Warrant in the name of the transferee named in such transfer request, and this Warrant promptly shall be cancelled.

7.3 Upon receipt by the Company of evidence satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of reasonable satisfactory indemnification, or, in the case of mutilation, upon surrender of this Warrant, the Company will execute and deliver, or instruct the Transfer Agent to execute and deliver, a new Warrant of like tenor and date, any such lost, stolen or destroyed Warrant thereupon shall become void.

8. Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company with respect to the issuance of the Warrant as follows:

8.1 Legends. The Holder understands and acknowledges that the certificate(s) evidencing the securities issued by the Company will be imprinted with a restrictive legend as referenced in Section 7.1 above.

8.2 Access to Data. The Holder has had an opportunity to discuss the Company’s business, management, and financial affairs with the Company’s management and the opportunity to review the Company’s facilities and business plans. The Holder has also had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction.

8.3 Authorization. This Warrant and the agreements contemplated hereby, when executed and delivered by the Holder, will constitute a valid and legally binding obligation of the Holder, enforceable in accordance with their respective terms.

8.4 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by such Holder, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with this Warrant or any transaction contemplated hereby.

9. Notices. All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given, if delivered in person or mailed, certified, return-receipt requested, postage prepaid to the address previously provided to the other party, or sent by fax or email (to the extent stated below). Either party hereto may from time to time, by written notice to the other party, designate a different address. If any notice or other document is sent by certified or registered mail, return receipt requested, postage prepaid, properly addressed as aforementioned, the same shall be deemed delivered seventy-two (72) hours after mailing thereof. If any notice is sent by fax or email, it will be deemed to have been delivered on the date the fax or email thereof is actually received, provided the original thereof is sent by certified mail, in the manner set forth above, within twenty-four (24) hours after the fax or email is sent.

10. Amendment. Any provision of this Warrant may be amended or the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the mutual written consent of the Company and the Holder.

11. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York.

[Signature page follows.]

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	PROVENTION BIO, INC.



	By:

	Name:

	Title:

EX-10.17 3 ex10-17.htm

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk (“[*****]”) to denote where omissions have been made. The confidential material has been filed separately with the Securities and Exchange Commission.

DEVELOPMENT SERVICES AGREEMENT

BETWEEN

The Institute for Translational Vaccinology

(“Intravacc”)

AND

Provention Bio, Inc.

(“Provention”)

Initial Provention:

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Initial Intravacc:

This Development Services Agreement (“Agreement”) is made and entered into by and between:

The State of the Netherlands, represented by the Minister of Public Health, Welfare and Sports, on behalf of the Minister, Projectdirectie ALT, The Institute for Translational Vaccinology (Intravacc), having its offices at Antonie van Leeuwenhoeklaan 9, 3721 MA Bilthoven, The Netherlands, legally represented by its General Director [****], hereinafter referred to as “Intravacc”;

and

Provention Bio, Inc. a Delaware Corporation, having its offices at represented by Ashleigh Palmer, Chief Executive Officer referred to as “Provention”;

(Intravacc and Provention may each be referred to individually as a “Party”, and collectively as the “Parties”);

WHEREAS

A.	Intravacc is a knowledge and research institute established by the Ministry of Public Health, Welfare and Sport of the Netherlands;

B.	Intravacc discovers, develops and manufactures (at pilot scale) human vaccines and related products and technologies and is active in transferring vaccine technology;

C.	Provention is a is a clinical stage biopharmaceutical company which engages in research, development, production, marketing and distribution of pharmaceutical products and requires various services from time to time in support of various projects;

D.	Provention wishes to procure services of Intravacc with respect to the process development, and non-GMP and GMP manufacturing (for research and clinical trial purposes only) of a pentavalent Coxsackie Virus B vaccine;

E.	Intravacc has specific expertise within the field of vaccine development necessary for the development of the vaccine product and owns certain proprietary vaccine technology and a proprietary [****];

F.	Provention would like Intravacc to perform development services under the terms and conditions of this Agreement;

G.	Whereas, the parties have entered into that certain Letter of Intent effective as of January 12 (the “LOI”) under which Intravacc has agreed to provide certain preliminary services on the terms and conditions set forth therein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the Parties agree as follows:

1.	DEFINITIONS

1.1.	“Affiliate” means any legal entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, Controlled or held, directly or indirectly, by a Party, or any legal entity which, at the time such determination is being made, is Controlling or under common Control with, such Party. As used herein, the term “Control”, whether used as a noun or verb, refers to the possession, directly or indirectly, of the power to direct, or cause the direction of, the management or policies of a legal entity, whether through the ownership of voting securities, by contract or otherwise.

Initial Provention:

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Initial Intravacc:

1.2.	“Agreement” means this Development Services Agreement.

1.3.	“Applicable Laws” means all relevant laws, rules, regulations, treaties, statutes, guidances, principles, guidelines (including, to the extent applicable, cGMPs), requirements, judgments, directives, injunctions, orders and industry codes of practice or standards of or from any court, arbitrator, regulatory authority, governmental agency, industry sector group or any other authority, agency or group having jurisdiction over or otherwise applicable to services performed by Intravacc as set out in the Development Program as in force from time to time during the term of this Agreement.

1.4.	“Batch” means Vaccine Product that is intended to be of uniform character and quality and is produced during the same cycle of manufacture.

1.5.	“Certificate of Analysis” or “CoA” means the certificate containing the outcome of the disposition tests on the Vaccine Product as performed by Intravacc or on behalf of Intravacc according to the Quality Agreement.

1.6.	“cGMPs” means the following laws, guidelines or guidances relating to the manufacture of Vaccine Product:

	-	European Community Directive 2003/94/EC ;
	-	The ICH Harmonized Tripartite Guideline Q7, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients;
	-	‘The Rules Governing Medicinal Products in the European Union’, volume 4 – Good Manufacturing Practice (GMP) guidelines’ and its annexes ;
	-	Current Good Manufacturing Practice Regulations of the US code of Federal Regulations Title 21 CFR 210, and according to § 21 CFR 210.2(c) Guidance for Industry : CGMP for Phase 1 Investigational drugs (July 2008).

1.7.	“Collaboration Partner” means a person or party involved by Provention in the development of a Vaccine Product, excluding Intravacc.

1.8.	“Confidential Information” means all data, Results and (other) information, including business, scientific or technical information, such as business plans and strategies, information about business operations and systems and information concerning employees, customers and/or licensees, whether disclosed in any format or form (including orally and paper, digital and electronic form), under this Agreement by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”). For the avoidance of doubt, all information provided by Provention to Intravacc under the LOI, the Non-Disclosure Agreement between Provention, Intravacc and L2D Services S.A.R.L., or this Agreement is Confidential Information of Provention and not of Intravacc, For the avoidance of doubt: all Foreground Technology of a Party shall be Confidential Information of that Party.

	Confidential Information shall not be deemed to include information which the Receiving Party can demonstrate by written proof:

	a.	at the time of disclosure is available in the public domain;
	b.	after disclosure becomes available in the public domain, except by breach of this Agreement by a Party or breach by any Third Party under an agreement of confidentiality to the Disclosing Party;

Initial Provention:

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Initial Intravacc:

	c.	by written records was lawfully known to it at the time of disclosure by the Disclosing Party and was not acquired directly or indirectly from the Disclosing Party or from any Third Party under an agreement of confidentiality to the Disclosing Party;
	d.	was received from an independent source having a lawful right to disclose the Confidential Information; or
	e.	is permitted to be so disclosed by prior written approval of the Disclosing Party.

1.9.	“Development Program” means the program regarding the development and production of a Vaccine Product, as further set out in Annex A.

1.10.	“Development Program Term” means the term of the Development Program, which will run up to the completion of all Services as described under the Development Program.

1.11.	“Effective Date” means the date on which this Agreement has been signed on behalf of both Parties.

1.12.	“Field” means the prevention and treatment of diabetes type 1and/or prevention of Coxsackie B virus [****].

1.13.	“Intravacc Background Technology” means any and all Patent Rights and Know-How owned by, controlled by or held under license by Intravacc on the Effective Date, in as far as relevant for the development and production of Vaccine Product, including the Intravacc [****]. The Intravacc Background Technology is described in general terms in Annex B.

1.14.	“Intravacc Foreground Technology” means any and all Inventions, Patents Rights and Know-How resulting from the performance of the Development Program, other than the Provention Foreground Technology.

1.15.	“Intravacc Technology” means the Intravacc Background Technology and Intravacc Foreground Technology, jointly.

1.16.	‘Intravacc [**]’ means Intravacc’s proprietary [] ([] and [**] bank), as further detailed in Annex C.

1.17.	“Invention” means any invention, idea, innovation, enhancement, improvement or feature, whether or not patentable or registrable.

1.18.	“Know-How” means any and all information, results, data and knowledge (including, but not limited to, ideas, concepts, discoveries, methodologies, models, instructions, analyses, reports, processes, techniques, procedures, working methods, specifications, test results, regulatory support data, trade secrets and business information), however embodied (whatever its form or nature), held by a Party, in as far as such know-how is not disclosed to the public.

1.19.	“Patent Rights” means (a) granted patents, (b) pending patent applications, including, without limitation, all provisional applications, continuations, continuations-in-part, divisions, reissues, renewals, and (c) all patents-of-addition, reissue patents, reexaminations and extensions or restorations by existing or future extension or restoration mechanisms, including, without limitation, supplementary protection certificates or equivalents thereof.

1.20.	“Provention Background Technology” means any and all Patent Rights and Know-How owned by, controlled by or held under license by Provention, but excluding Provention Foreground IP, including, but not limited to those patents and the other intellectual property described in Annex D.

Initial Provention:

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Initial Intravacc:

1.21.	“Provention Foreground Technology” means any and all Inventions, Patents Rights and Know-How, conceived and/or reduced to practice as a result of or in connection with the Development Program or that otherwise relate to the Provention Background Technology, but, excluding (i) the Intravacc [**] and any improvements thereon or (ii) Inventions, Patent Rights and Know-How that [**] to the Intravacc Background Technology.

1.22.	“Provention Materials” means such of Provention’s materials as necessary for Intravacc to perform the Development Program, as set out in the Development Program. For the avoidance of doubt, vaccine samples provided by a Third Party at Provention’s direction are Provention Materials.

1.23.	“Provention Technology” means the Provention Background Technology and the Provention Foreground Technology, jointly.

1.24.	“Results” means all the research data and other data and information resulting from the Development Program.

1.25.	“Services” means the provision of development services as detailed in the Development Program.

1.26.	“Statement of Compliance” or “SoC” means the confirmation to be issued by Intravacc contained in the Certificate of Analysis stating that the Vaccine Product meets the specifications and was manufactured in accordance with cGMP;

1.27.	“Third Party” means any person or entity other than Intravacc, Provention and Affiliates of Provention;

1.28.	“Vaccine Product” means final product for clinical use within the Field, or, only in connection with a Technology Transfer as meant in Section 5.8, final product for clinical or commercial use within the Field.

2.	DEVELOPMENT PROGRAM

2.1.	Performance of the Development Program

	Commencing on the Effective Date, the Development Program will be carried out by Intravacc in accordance with this Agreement. The Development Program Term will be as set out in the Development Program, or so much longer as is reasonably needed for finalizing the services. The Parties acknowledge that the services of Intravacc are experimental in nature and that Intravacc will perform them to its best efforts without guaranteeing specific results other than compliance with the terms of this agreement and the production according to specifications as detailed in Article 7.

2.2.	Resources and standards

	Intravacc shall make available such qualified personnel and commit such other resources as are necessary or advisable to carry out the Development Program. Intravacc will carry out the Services according to Applicable Laws in the Netherlands and according to the cGMPs, and relevant professional standards, applicable (scientific) procedures and protocols. Intravacc will use reasonable efforts to carry out the Services within agreed timelines. Such timelines may be extended on reasonable request with prior written approval from Provention, which approval will not be withheld unreasonably; provided that Provention shall not be responsible for any increased costs incurred in connection with such extension unless agreed to in writing by Provention.

Initial Provention:

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Initial Intravacc:

2.3.	Use of Provention Materials

	Provention shall provide, or cause to be provided, to Intravacc the Provention Materials as specified in the Development Program. Intravacc will solely use the Provention Materials for the performance of the Development Program. Intravacc will not disclose, give access to or transfer any Provention Materials to any Third Parties without prior written approval of Provention. The Provention Material shall not be modified, altered, changed and/or reconstructed by or on behalf of Intravacc, except when explicitly stated in the Development Program or following written approval of Provention.

2.4.	Use of Intravacc [****]

	Intravacc will make use of the Intravacc [**] in the course of the Development Program. The Intravacc [] will be made available by Intravacc solely for the purpose of the manufacture of the Vaccine Product as set out in the Development Program, including manufacture for use in the Phase I clinical trial as detailed in the Development Program. Further (including commercial) use of the Intravacc [**] with a third party supplier will be subject to the license contemplated in clause 5.7.

2.5.	Results

	Provention shall have the full and free right to use any Results, with exception of the [**]. All Results with exception of [**] will be the property of Provention in all respects. Intravacc shall promptly (and at least within three (3) business days after such Results are generated) report such Results to Provention in a format agreed with and accepted by Provention.

2.6.	Change Request.

	It is understood that Provention may, at some point during the execution of the Development Program, desire to change the focus of the Development Program to a vaccine [****]. If so, it will inform Intravacc timely of such desire, specifying the desired Vaccine Product. The Parties will then discuss within reason what the impact of such a request for change would be, both on planning and costs, and can decide by mutual agreement on an adapted Development Program and adapted fee structure, which will be reflected in a signed amendment to this Agreement.

3.	GOVERNANCE

3.1.	Scientific Committee

	Within 30 days after the Effective Date, the Parties shall form a Scientific Committee composed of two Intravacc representatives and two Provention representatives, chaired by a Provention representative (the “Scientific Committee”). Its role will be to render non-binding recommendations to the Parties on the work to be performed under the Development Program. The Scientific Committee shall have no power to bind either Party.

3.2.	Meetings

	The Scientific Committee will meet monthly (in person or by telephone conference) to discuss progress of the Development Program. Additional meetings shall take place upon the request of either of the Parties. Quarterly, the Intravacc representatives will prepare and send to the Scientific Committee members written reports that include (i) progress updates, (ii) all data generated from the Development Program, and (iii) any deviations from the timelines anticipated plans. All of these written reports and deliverables will be owned by Provention and will be Confidential Information of Provention, with the exception of the (portions) of reports and deliverables that are to be qualified as Intravacc Technology and are therefore owned by Intravacc; such (portions) of reports and deliverables will be Confidential Information of Intravacc.

Initial Provention:

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Initial Intravacc:

3.3	Project Management

	The Parties have appointed the following persons to act as their respective primary contacts to facilitate the day-to-day communications:

	Intravacc
	[****]
	Adress: Antonie van Leeuwenhoeklaan 9, 3721 MA Bilthoven, The Netherlands
	Telephone: +[****]
	Email: [****]


	Copy to: [****]

	Provention Bio, Inc.
	Ashleigh Palmer, CEO
	Address:
	Telephone: 908-399-2954
	E-mail: APalmer@proventionbio.com

	Copy to: JDingerdissen@proventionbio.com

	Copy to:

	Leads to Development
	Julien Rossignol, Ph.D., Project Manager
	3-5 Impasse Reille - 75014 Paris - France
	Telephone: +33 1 82 28 53 78
	Email: jrossignol@LeadsToDevelopment.com

4.	PAYMENTS

4.1.	Intentionally Omitted.

4.2.	Fees

	In consideration for the Services, Provention will pay to Intravacc the fees listed in Annex E, in the order and timing set out in that Annex E (“Fees”). The Parties agree that the Fees represent fair market value for the Services and were negotiated in an arms-length transaction. Apart from the Fees, Provention will not be liable and not be billed, for any payment, cost, expense to Intravacc or to any third party for performance pursuant to this Agreement unless set forth expressly in the Development Program or otherwise agreed to by Provention in writing.

4.3.	Other Payments Terms

	4.3.1.	Unless stated otherwise in this Agreement, all payments due to Intravacc hereunder, shall be payable within thirty (30) days from receipt by Provention of the corresponding invoice.

Initial Provention:

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Initial Intravacc:

	4.3.2.	If Provention should dispute the nature or basis of any charges contained in any invoice submitted by Intravacc hereunder, Provention shall promptly provide written notice to Intravacc setting forth the reason for the dispute, which the Parties shall attempt to resolve in good faith. Payment of any disputed amount shall be suspended until the Parties resolve such dispute. Provention may set off any amount Intravacc owes Provention against undisputed amounts payable under this Agreement or any other agreement between the Parties. Payment by Provention shall not result in a waiver of any of its rights under this Agreement or otherwise.

	4.3.3.	Payments shall be made in Euro by wire transfer to such bank account as the party to receive the payment may from time to time designate by notice in writing to the other party.

	4.3.4.	Any payments made by Provention to Intravacc under the LOI will be credited against the amounts owed in connection with the Development Program, as set out in more detail in Annex E.

4.4.	Tax

	The Fees set forth in the Development Program shall include all taxes except such taxes which Intravacc is required by law to invoice and collect from Provention, including sales and use taxes, value added taxes, goods and service taxes, gross receipts taxes and excise taxes (“Transaction Taxes”). For avoidance of doubt, Transaction Taxes excludes any tax on income, real or personal property taxes or payroll taxes. Transaction Taxes, if any, will be separately stated on a valid Intravacc invoice and will be paid by Provention to Intravacc unless Provention provides an exemption certificate to Intravacc or the transaction is statutorily exempt from Transaction Taxes. Intravacc shall be solely responsible for the timely remittance of all Transaction Taxes to the applicable governmental authority, and Intravacc shall pay (without reimbursement by Provention), and shall hold Provention harmless against, any penalties, interest or additional taxes that may be levied or assessed as a result of the failure to invoice or delay of Intravacc to pay any such taxes.

4.5.	Late Payments

	In the event that any payment due under this Agreement is not made when due and Intravacc has provided notice of such overdue payment to Provention which Provention has failed to correct within five (5) business days of the subject notice, the payment shall accrue interest beginning on the first day following the due date calculated at the annual rate of [**] percent ([**]%), provided that in no event shall said annual rate exceed the maximum interest rate permitted by law in regard to such payments, and provided that a notice has been sent out stating that payment is overdue.

5.	INTELLECTUAL PROPERTY

5.1.	Ownership of Background Technology

	Each Party shall hold and retain its entire right and title in Patent Rights, other intellectual property rights and Know-How existing on the Effective Date, or which are thereafter developed independently of the performance of this Agreement. Except as expressly set forth otherwise herein, nothing in this Agreement grants either Party rights or a license to any Patent Rights, other intellectual property rights or Know-How, of the other Party.

Initial Provention:

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Initial Intravacc:

5.2.	Ownership of Foreground Technology

	Any and all Provention Foreground Technology shall be owned solely by Provention. Any and all Intravacc Foreground Technology shall be owned solely by Intravacc. Intravacc shall promptly notify Provention upon having knowledge of an Invention, or a potential Invention. Intravacc hereby assigns to Provention any and all of its rights, title and interest in the Provention Foreground Technology. If so requested by Provention, Intravacc shall execute and deliver all documents and take all reasonable actions to effect and/or perfect Provention’s rights to and in the Provention Foreground Technology. Intravacc represents that it has the necessary agreements in place or that it will timely implement the necessary agreements or measures with its employees or any other person performing Services under this Agreement to enable Intravacc to comply with this Section 5.2. In the event that there is an Invention that would qualify as Provention Foreground Technology prior to Intravacc’s having in place the agreements or measures contemplated by the previous sentence, Intravacc will use its best efforts to cause all right, title and interest in such Invention to vest in Provention and will indemnify Provention for any loss or liability that it incurs to the extent caused by Intravacc’s failure to have such agreements or measures in place.

5.3.	Development License to Intravacc

	Provention hereby grants to Intravacc, during the Development Program Term, a royalty-free, fully-paid, non-exclusive, non-sublicensable license under the Provention Background Technology solely to the extent necessary for Intravacc to perform its services under the Development Program.

5.4.	Development License to Provention

	Intravacc hereby grants to Provention, during the Development Program Term, a royalty-free, fully-paid, sub-licensable and assignable (to the extent this Agreement is assignable), non-exclusive license under the Intravacc Technology for use as set forth in the Development Program, including for clarity, in connection with a Phase I study of the Vaccine Product and stability testing. Any further (including commercial) use of Intravacc Technology within the Field will be subject of a separate license agreement, as set forth in Section 5.7. In case of assignment of the Agreement and/or development license, Provention warrants, within the meaning of article [****], that the assignee will fully comply with all obligations under this Agreement, and will be liable towards Intravacc in case of non-compliance or breach.

5.5.	Patent Prosecution and Maintenance of Foreground Patents

	Provention shall be responsible for the preparation, filing, prosecution and maintenance of Provention Foreground Technology at its own cost. Intravacc will reasonably assist Provention in such action at Provention’s expense and request. Intravacc shall be responsible for the preparation, filing, prosecution and maintenance of Intravacc Foreground Technology at its own cost. For the avoidance of doubt: neither Party has the obligation to seek patent protection for any of the Foreground Technology.

5.6.	Notification of Infringements

	The Parties shall promptly notify each other in the event they become aware of any Patent Rights of a Third Party that may conflict with, or any actual of threatened legal action brought against them in relation to, the performance of the Development Program.

5.7.	License

	At Provention’s request, Intravacc agrees that it will grant to Provention a [**] the license, for [].- and against reasonable license terms (but which terms will not include additional compensation for the use of the Intravacc Technology), such Intravacc Technology, including for clarity any Intravacc Background Technology, Intravacc Foreground Technology and the Intravacc [] or other information developed in connection with the Services to the extent that any right, title or interest therein rests with Intravacc, as is necessary for Provention or its successor, assign or sublicensee to continue to develop, to manufacture or to commercialize Vaccine Products. For the avoidance of doubt: such license does not include the supply of [] and costs thereof, which will be subject to separate supply agreement(s) to be negotiated in good faith by the parties [and in any event will not exceed the pricing set forth on Exhibit F, as adjusted for any rise in costs associated with the Intravacc [**] between the date hereof and the date of the supply agreement.] Intravacc will not grant any rights to any person that would conflict with the license contemplated by this Section 5.7.

Initial Provention:

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Initial Intravacc:

5.8	Technology Transfer

	Upon completion of the Development Program and following grant of the license contemplated under section 5.7, at Provention’s request Intravacc will provide further services to enable a smooth transfer of the production process of the Vaccine Product (‘Technology Transfer’), under reasonable conditions to be agreed between the Parties. To this purpose the Parties will conclude a separate Technology Transfer Services Agreement, setting out the services to be provided by Intravacc, the timing and personnel involved, and the fees to be paid by for such by Provention. [****].

6.	WARRANTIES, INDEMNIFICATION AND EXCLUSIONS OF LIABILITY

	Warranties and Assurances

6.1.	Provention represents and warrants that:

	(i)	it has all rights, title and interests in and to all Provention Background Technology made available by it to Intravacc under this Agreement;
	(ii)	to its knowledge, the Provention Background Technology made available by it to Intravacc and the use thereof by Intravacc under this Agreement do not infringe any rights of third parties;
	(iii)	the Provention Material shall be in conformity with the specifications as detailed in the Development Program

6.2.	Intravacc represents and warrants that:

	(i)	it has all rights, title and interests in and to all Intravacc Background Technology made available by it to Provention under this Agreement ;
	(ii)	to its knowledge, the Intravacc Background Technology made available by it to Provention and the use thereof by Provention under this Agreement currently do not, and will not during the Term, infringe any rights of third parties.
	(iii)	to its knowledge, the use of the Intravacc Background Technology by Provention as contemplated by the license terms in Section 5.7 do not infringe any rights of third parties.

6.3.	EXCEPT AS EXPRESSLY SET FORTH HEREIN, PROVENTION MAKES NO WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE PROVENTION MATERIALS, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

6.4.	EXCEPT AS EXPRESSLY SET FORTH HEREIN, INTRAVACC MAKES NO WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE INTRAVACC [****], RESULTS OF THE SERVICES (INCLUDING (VACCINE) PRODUCT), INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

6.5.	Intravacc has significant expertise and experience in providing Services of the type contemplated by this Agreement and is familiar with all relevant Applicable Laws with respect to providing such Services in the Netherlands and is familiar with the cGMPs. Intravacc is in compliance and shall continue to comply, and shall cause Intravacc’s personnel to comply, with all Applicable Laws in the Netherlands (which include, for the avoidance of doubt, EU laws applicable in the Netherlands) and the cGMPs, and Intravacc has and shall continue to have all professional licenses, consents, authorizations, permits and certificates, and shall have and shall cause Intravacc’s personnel to have completed all registrations or made such notifications as required by such Applicable Laws for its performance of the Services.

Initial Provention:

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Initial Intravacc:

6.6	Intravacc represents and warrants that all Vaccine Product manufactured by Intravacc under this Agreement shall be manufactured in accordance with the specifications which will be developed and agreed under the Development Program, with the Quality Agreement and with all Applicable Laws in effect during manufacturing and delivery and to the extent applicable, cGMPs.

6.7.	Provention shall use the Vaccine Product manufactured by Intravacc in preclinical studies and clinical trial(s) as contemplated by the Development Program. Provention is solely responsible for such studies and trials and warrants and represents that they will be conducted in accordance with all applicable laws, rules and best practices.

	Indemnifications

6.8.	Subject to the limitations set forth in articles 6.11 – 6.13 below, each Party (the Indemnifying Party) shall indemnify and hold harmless the other Party, its Affiliates and its/their officers, employees, subcontractors and representatives (the “Indemnified Parties”) against any and all liability, damages, penalties, fines, reasonable costs, expenses (including reasonable legal expenses) (“Losses”) suffered or incurred by the Indemnified Party resulting from or arising out of any claim against the Indemnified Party by any (third) person to the extent arising from or in connection with the Indemnifying party’s breach of this Agreement, negligence, or intentional misconduct , PROVIDED that there shall be no such obligation on the part of the Indemnifying Party to the extent such claim arises from the Indemnified Party’s own breach of this Agreement, negligence, or intentional misconduct.

6.9.	Provention shall indemnify and hold harmless Intravacc against any and all Losses resulting from or arising out of any claim against Intravacc by any (third) person to the extent arising from or out of or in connection with the use by Provention of the Intravacc Technology and/or the Provention Foreground and/or the Vaccine Product, either in preclinical studies, human clinical trials and/or other use by or under responsibility of Provention; provided that this Section 6.9 shall not apply to any Losses to the extent such Losses are a result of (a) Intravacc’s breach of the terms of this Agreement, (b) Intravacc’s negligence or intentional misconduct or (c) claims for which Intravacc is obligated to indemnify Provention under 6.8 above.

	Insurance

6.10.	Each Party shall obtain and maintain insurance, whether in the form of self-insurance or comprehensive general liability insurance, including product liability insurance with an amount which is in conformance with the industry standards in the pertinent industrial sector in relation with its activities under the Development Program, which shall include, for the avoidance of doubt, the preclinical trials and clinical studies to be performed by Provention as contemplated by the Development Program

	Limitations of liability

6.11	In no circumstances shall either party be liable to the other in contract, tort or otherwise howsoever arising or whatever the cause thereof, for any indirect or consequential damages of the other Party of any nature, such as but not limited to any loss of profit, business, contracts, revenues or anticipated goodwill, reputation, contracts, revenues or anticipated savings, except where the liability is a result of gross negligence, fraud or willful misconduct of that Party or cannot otherwise be limited under the law governing this Agreement. Notwithstanding anything to the contrary in this Agreement, the Parties further agree that the liability of auxiliary persons shall be excluded as allowed under article [****].

Initial Provention:

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Initial Intravacc:

6.12	Intravacc will not be liable for any loss or damage directly or indirectly resulting from:

	(i)	defects in material supplied to Intravacc by Provention (or in its name);
	(ii)	incorrect information provided by Provention.

6.13	To the extent Intravacc’s liability vis-à-vis Provention is not excluded pursuant to the previous clauses, it will in any case be limited to the fee it has received from Provention with respect to [****]; except where the liability would be indemnifiable under Section 5.2, or to the extent it results from Intravacc’s gross negligence, fraud or willful misconduct or breach of its confidentiality obligations or it is otherwise not allowed under the law governing this Agreement to limit the liability.

	US specific regulations on restricted parties

6.14	Provention will inform Intravacc about certain specific regulations in the US which may restrict parties from offering Services such as those under this Agreement. Based on that information, Intravacc will review its personnel list and, if such is the case, will separately declare to Provention, that to the best of its knowledge, neither Intravacc, as a research institute under the Ministry of Health, Welfare and Sports of the Netherlands, nor any personnel performing Services hereunder (i) has been convicted of an offense related to any Federal or State healthcare program, including, but not limited to those within the scope of 42 U.S.C. § 1320a 7(a); (ii) has been excluded, suspended or is otherwise ineligible for Federal or States healthcare program participation, including, but not limited to, persons identified on the General Services Administration’s List of Parties excluded from Federal Programs or the HHS/OIG List of Excluded Individuals/Entities; or (iii) has been debarred under Section 306 of the Federal Food Drug and Cosmetic Act (21 U.S.C. § 355a); (“Restricted Party”). Intravacc further agrees that if, at any time after execution of this Agreement, it becomes aware that it has or any personnel has become or is in the process of being charged, convicted, debarred excluded, proposed to be excluded, suspended or otherwise rendered ineligible, or is on an enforcement list, Intravacc will immediately notify Provention. Intravacc acknowledges that designation of itself as a Restricted Party shall be grounds for immediate termination of this Agreement and the Development Program by Provention for cause with no cure period.

7.	SPECIFIC TERMS REGARDING VACCINE PRODUCT

7.1.	A quality agreement (the “Quality Agreement”) shall be jointly developed by the Parties to incorporate all relevant quality assurance and quality control obligations and aspects for the Parties with respect to the Services, and as may be amended from time to time in accordance with its terms promptly after the execution of this Agreement. Each Party shall perform its respective obligations and responsibilities set forth in the Quality Agreement.

7.2.	Pursuant to the terms and conditions of this Agreement, Intravacc will, as part of the Services, make Vaccine Product available substantially in accordance with the Development Program. It is understood that the specifications for Vaccine Product will be developed under the Development Program.

7.3.	Prior to making the Vaccine Product available to Provention, Intravacc shall, subject to the Quality Agreement, test representative samples of the Vaccine Product for purposes of determining whether such Vaccine Product conforms to the specifications and shall include with delivery of Vaccine Product a Certificate of Compliance and a Certificate of Analysis (which shall include a statement that the Vaccine Product complies with the specifications). The Certificate of Analysis will be delivered to Provention for each Vaccine Product Batch along with all other documents on the basis of which a Batch of Vaccine Product is released by Intravacc, including, but not limited to, production records, analytical test data for release tests, Batch Records and deviation reports as agreed upon in the Quality Agreement, etc. (“Documents”).

Initial Provention:

Page 12 of 19

Initial Intravacc:

7.4.	All Vaccine Product shall be packaged and labeled in accordance with the specifications. Upon notification by Intravacc to Provention that the Vaccine Products are, at its facility, ready for shipment, Provention will arrange for transport of the Vaccine Product to Provention’s designated facility. Provention shall be responsible for all tariffs, customs, clearance and other similar charges. Provention shall be responsible for the risk of loss, delay or damage in transit of the Vaccine Product to Provention’s designated facility. Intravacc shall include with such shipment, the quantity of Vaccine Products included for the shipment, and all technical documentation as specified in the Quality Agreement.

7.5.	In the event that Provention has an additional need for Vaccine Product, not covered by the Development Program, it can request Intravacc to provide additional services in manufacturing such Vaccine Product. Intravacc shall make its best effort to meet such request. If such is possible, the services will be provided under a separate service agreement, for a reasonable fee to be negotiated between the Parties, which shall be determined consistent with the fees that have been negotiated for the Services provided hereunder.

8.	CONFIDENTIALITY and PUBLICATION

8.1.	Confidential Information.

	Each Party shall maintain the Confidential Information of the other Party in confidence under no less strict conditions than that such Party maintains and protects its own Confidential Information. Confidential Information received from the other Party shall only be disclosed to those Affiliates, Collaboration Partners, employees or agents of the receiving party with a need to know for the purpose or use it for any purpose other than to meet the objectives of this Agreement. In addition, where Provention is the receiving party, the Confidential Information may be disclosed, in confidence and on a strict need-to-know basis, by Provention for review by regulatory and governmental authorities, provided that Provention will seek to ensure the confidentiality of such information in that context.

8.2.	Required Disclosures.

	Section 8.1 shall not apply to any Confidential Information which is required to be disclosed to comply with applicable laws or regulations (including, but not limited to the rules and regulations of an exchange on which the shares of a party are publicly traded), but only to the extent required by such law or regulation and further provided that the Party intending to make such disclosure shall provide prior written notice of such disclosure to the other Party sufficiently in advance of such disclosure in order for such other Party to respond and to take reasonable and lawful action to avoid and/or mitigate such disclosure.

8.3.	Notwithstanding any other provision of this Agreement, Provention shall have the right to disclose a copy of this Agreement to any potential acquirer, or current or potential financier or investor of or in Provention, and to their respective agents and advisers, subject to customary confidentiality undertakings with respect thereto.

Initial Provention:

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Initial Intravacc:

8.4.	Publication

	Unless otherwise provided in the Development Program, Intravacc shall not make any announcement, oral presentation, or publication relating to any Services or Results without Provention’s express prior written approval, except as required by Law.

	Nothing in this Agreement is intended to limit or restrict in any way Provention’s right to publish independently any Results, provided that Provention will not publish any Results containing Intravacc Information without Intravacc’s prior written permission. Provention will give Intravacc sufficient time, but at least 30 days, in advance of the submission of a publication containing Intravacc Information to review, comment on and suggest amendments to the proposed publication. Intravacc has the right (i) to object to any part of the proposed publication to the extent that Intravacc Information would be disclosed by the proposed publication; and if such is the case, the proposed publication shall be amended by mutual agreement to adequately address such objection; or (ii) to request postponement of such proposed publication to the extent that a patent application with respect to Results disclosed in such proposed publication is sought; if such is the case, the proposed publication shall be postponed to allow reasonable time for submitting that patent application.

	In any publications, Provention will acknowledge the contribution of Intravacc as appropriate (being co-authorship or an acknowledgement), subject however to prior written permission of Intravacc for such acknowledgement (who may choose not to be mentioned).

	Following the Effective Date of this Agreement, the Parties shall issue a press release in a form that is mutually decided upon. Parties will in good mutual consultation decide on any other press releases in the future.

9.	TERM and TERMINATION

9.1.	Term

	This Agreement shall, subject to earlier termination, expire at the end of the Development Program Term (“Term”).

9.2.	The obligations and rights of the Parties which by the nature of their operation are intended to survive termination of this Agreement shall survive this Agreement, including, but not limited to, the following sections: Section 2.4 (Use of Intravacc [****]) and Articles 4 (Payments), 5 (Intellectual Property), 6 (Liabilities), 8 (Confidentiality and Publication), 9 (Term and Termination); and 14 (Miscellaneous).

9.3.	Termination by Provention for Convenience

	Provention may terminate this Agreement and/or the Development Program, without cause, at any time by giving ninety (90) days written notice to Intravacc, subject however to the following: any payments due to Intravacc under clause 4.2 for Services performed in accordance with the terms of the Agreement up to the termination date must still be made and shall not be refunded.

9.4.	Termination by Provention for Product Cessation

	Provention may terminate this Agreement at any time upon thirty (30) days’ notice in the event that it, or an applicable regulatory body, determines that continuation of a study poses a significant health risk to patients.

9.5.	Termination in case of Breach

	Each Party may terminate this Agreement effective upon at least 30 days written notice if the other Party breaches a material term of this Agreement, and such breach is not remedied within such 30 day period. A payment obligation shall be a material obligation in this respect, but the breach of a payment obligation shall be determined solely on the basis of the payment terms as set out in this Agreement (including determination of when a payment is overdue). Termination for breach shall not affect any (other) legal remedies or claims a Party may have against the other.

Initial Provention:

Page 14 of 19

Initial Intravacc:

9.6.	Termination for Bankruptcy

	Either Party may by written notice to the other terminate this agreement in the event that the other Party becomes insolvent or has a receiver or administrator appointed to the whole or any part of its assets, or if an order shall be made or a resolution passed for its winding-up.

9.7.	Accrued Rights

	Termination or expiration of this Agreement shall not affect any accrued rights of either Party nor shall it affect the coming into force or the continuance in force of any provision of this Agreement which is expressly or by implication intended to come into or continue in force on or after such termination.

9.8.	Payment for Services

	In the event of termination, Provention agrees to pay Intravacc for all Services performed in accordance with the terms of this Agreement, if completed, or pro rata, if partially completed prior to such termination and any non-refundable, non-cancellable payments and any non-cancellable, non-refundable expenses that would otherwise be payable under the terms of this Agreement.

9.9.	Destruction of Materials

	Upon termination or expiration of this Agreement, Intravacc shall, at Provention’s choice and upon Provention’s instruction, promptly destroy, or return to Provention all Provention Material, at Provention’s cost.

10.	SUBCONTRACTING

10.1.	Intravacc will not subcontract any of its obligations under this Agreement to any third party without Provention’s prior written approval.

10.2.	Intravacc ensures that each of its approved subcontractors shall adhere to the requirements of this Agreement.

11.	FORCE MAJEURE

11.1.	Each Party will be excused for any failure or delay in performing any of its obligations under this Agreement, if such failure or delay is caused by force majeure.

11.2.	As a case of force majeure is to be understood each unforeseen event, which is beyond the control of the Parties and cannot be reasonably avoided or counteracted by the Party affected. This includes, but is not limited to: acts of terrorism, fire, flood, earthquake, explosion, riot, strike, lack of sufficient qualified personnel to provide the Services (beyond the reasonable control of Intravacc), lockout, transport restrictions, failure or delay of delivery by any supplier, war, regulations, measures of any governmental or local authority or relevant advisory body and/or international organization, such as WHO or the Dutch health council (in Dutch: “Gezondheidsraad”) that requires either Party to focus production capacity on the prevention or treatment of diseases or epidemics and the refusal or suspension of any import/ export license or other necessary licenses or permits by a governmental or local authority.

11.3.	In the event that force majeure shall continue unabated for a period of six (6) months from the date the Party claiming relief gives the other Party notice of force majeure, either Party hereto shall have the right to terminate this Agreement by furnishing written notice to the other, with termination effective only upon the expiration date of such six (6) month period.

Initial Provention:

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Initial Intravacc:

12.	APPLICABLE LAW AND JURISDICTION

12.1.	This Agreement shall be governed by, and construed in accordance with, the laws of [**]. All disputes arising out of or in connection with this Agreement shall first be submitted to the management of both Parties who will attempt to find a mutually acceptable solution. Only if this fails, conflicts shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators. Each party will select one arbitrator and the third arbitrator will be selected by the arbitrators appointed by the parties. The language of arbitration will be English. The place of arbitration will be [**]. The Parties shall accept the arbitral award as final.

13.	AUDITS

13.1	Intravacc will maintain complete and accurate records, regardless of type or form, of all matters relating to the Intravacc’s performance of the Services and its other obligations under this Agreement and any Development Program that enable Intravacc to demonstrate compliance with its obligations under this Agreement and any Development Program (the “Records”). Intravacc shall provide copies of Records to Provention upon its reasonable request. Intravacc shall maintain all Records for a period of six (6) years after the expiration or termination of this Agreement or the Development Program in effect, or for such longer period as otherwise may be required by Applicable Laws, whichever occurs later. In accordance with the Quality Agreement, Provention may inspect those portions of Intravacc’s facility that are used for the performance of the Services at reasonable times during this Agreement, observing confidentiality obligations vis-à-vis third parties, for the purpose of determining compliance with the terms of this Agreement. Intravacc will provide full cooperation for these inspections. One yearly audit is included in Intravacc’s’ Proposal, but costs for additional audits will be borne by Provention.

13.2	Intravacc will notify Provention promptly in writing of any FDA or any other governmental inspection, audit, review, or inquiry relating to, impacting or concerning any Services provided hereunder. To the extent permitted by Applicable Laws and other acts of governmental authorities, with regard to any inspection, review, audit or other regulatory matter that may impact or relate to any Services, Provention will have the right to be present during any inspection, audit or review and to review and provide comment to any written response related to any inspection, audit, review, or inquiry.

14.	MISCELLANEOUS

14.1.	Notifications

	All notifications for the Agreement shall be sent by registered letter with acknowledgement of receipt to the Party for which the notice is intended at the following addresses: For Provention: Provention Provention Bio, Inc. Attn: Ashleigh Palmer, CEO Telephone: 908-399-2954 E-mail: APalmer@proventionbio.com

Initial Provention:

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Initial Intravacc:

	With a copy to: Lowenstein Sandler LLP One Lowenstein Drive Roseland, New Jersey 07068 Attn: Michael J. Lerner, Partner Telephone: 973-597-6394 Email: mlerner@lowenstein.com Fax: 973-597-6395 For Intravacc: Intravacc Antonie van Leeuwenhoeklaan 9 3721 MA Bilthoven, The Netherlands Attn. [**] Telephone: [] Email: [**]

14.2.	Headings

	Paragraph headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.

14.3.	Assignment

	This Agreement and the rights and obligations contained in it shall not be assigned or transferred to third parties, unless upon prior written approval of the other Party, except that either Party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of its business or the assets to which this Agreement pertains, whether by merger, reorganization, acquisition, sale, privatization or otherwise, or to an Affiliate.

14.4.	Entire Agreement

	This Agreement and the Annexes attached hereto or referenced herein contain the entire, final and complete agreement between the Parties with respect to the subject matter contained herein (including confidentiality obligations) and supersede any prior discussion, agreement or understanding relating to the subject matter of this Agreement (including confidentiality obligations).

14.5.	Independent Contractor

	In the performance of its obligations under this Agreement, Intravacc shall at all times act as and be deemed an independent contractor. Nothing in this Agreement shall be construed to render Intravacc or any of its employees, agents, or officers, an employee, joint venturer, agent, or partner of Provention. Intravacc is not authorized to assume or create any obligations or responsibilities, express or implied, on behalf of or in the name of Provention. It is understood that the employees, methods, facilities, and equipment of Intravacc shall at all times be under Intravacc’s exclusive direction and control.

14.6.	Modifications

	This Agreement may only be modified by a written document signed by both Parties.

14.7.	Invalid provisions

	Should one or more provisions of this Agreement be held invalid or unenforceable by law or regulation, or by a definitive decision of a competent court, all the other provisions shall remain in full effect and the Parties shall make the necessary modification without delay while respecting, as closely as possible, the spirit of the present Agreement at the moment of signature.

Initial Provention:

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Initial Intravacc:

14.8.	Annexes The following Annexes form an integral part of this Agreement: Annex A - Development Program Annex B - Intravacc Background Technology Annex C - Intravacc [**] Annex D - Provention Background Technology Annex E – Payment Schedule Annex F – [**] Costs In the event of any conflicts between this Agreement and the Annexes, this Agreement will prevail. The terms of this Agreement and the Annexes shall be controlling over any terms of any purchase order, sales acknowledgement, invoice or other such documents issued by either Party. For the avoidance of doubt, the Standard Intravacc Terms and Conditions, as attached to the Proposal, are superseded by this Agreement in all respects.

14.9.	Signing authority

	Each signatory to the Agreement has signature authority and is empowered on behalf of his or her respective Party to execute this Agreement.

14.10.	This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same agreement. All signatures of the Parties may be transmitted by facsimile or electronic delivery, and each such facsimile signature or electronic delivery signature (including a pdf signature) will, for all purposes, be deemed to be the original signature of the Party whose signature it reproduces and be binding upon such Party.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

Initial Provention:

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Initial Intravacc:

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the Effective Date.

The State of the Netherlands, represented by the Minister of Public Health, Welfare and Sports, on behalf of the Minister, Projectdirectie ALT, The Institute for Translational Vaccinology (Intravacc)		Provention Bio, Inc., represented by Ashleigh Palmer, Chief Executive Officer

/s/ [****]		/s/ Ashleigh Palmer
(authorized signature)		(authorized signature)

Name:	[****]	Name:	Ashleigh Palmer

Function:	General Director	Function:	Chief Executive Officer

Date:	March 6, 2018	Date:	March 6, 2018

Place:	Bilthoven	Place:	Bilthoven

Initial Provention:

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Initial Intravacc:

Annex A - Development Program

Annex B - Intravacc Background Technology

Annex C - Intravacc [****]

Annex D - Provention Background Technology

Annex E – Payment Schedule

Annex F – [****] Costs

Initial Provention:

Annexes

Initial Intravacc:

Annex A

Development Program

[****]

Initial Provention:

Annex A-1

Initial Intravacc:

Annex B

Description of Intravacc Background Technology relating to viral vaccine research, development, and production

[****]

Initial Provention:

Annex B-1

Initial Intravacc:

Annex C

Intravacc [****]

[****] and all related documentation and materials

Initial Provention:

Annex C-1

Initial Intravacc:

Annex D

Provention Background Technology

[****]

Initial Provention:

Annex D-1

Initial Intravacc:

Annex E

[****]

Additional Out-of-Pocket Expenses

In addition to the project budget (see payment schedule above), which also includes a directly available [****] Euro budget for unforeseen costs, Intravacc shall be entitled to reimbursement of maximally [****] Euro unforeseen out-of-pocket expenses directly related to performing the Services (“Out-of-Pocket Expenses”), provided that Provention approves such Out-of-Pocket Expenses in advance in writing. Therefore, this additional amount represents [****]% of the total unforeseen budget ([****] Euro), which will be used as contingency budget in consultation only. All such Out-of-Pocket Expenses shall be reimbursed at cost; no mark-up shall be permitted. Each invoice shall include copies of receipts for all Out-of-Pocket Expenses that are submitted for reimbursement.

Initial Provention:

Annex E-1

Initial Intravacc:

Annex F

[****] Costs

The price for [****] Bank vials is [****] euro per vial.

Initial Provention:

Annex F-1

Initial Intravacc:

EX-10.18 4 ex10-18.htm

LICENSE AGREEMENT

BY AND BETWEEN

MACROGENICS, INC.

AND

PROVENTION BIO, INC.

TABLE OF CONTENTS

ARTICLE 1	DEFINITIONS	1
ARTICLE 2	LICENSES	13
ARTICLE 3	DEVELOPMENT & REGULATORY MATTERS	15
ARTICLE 4	MANUFACTURING	17
ARTICLE 5	COMMERCIALIZATION	17
ARTICLE 6	PAYMENT OBLIGATIONS	18
ARTICLE 7	INTELLECTUAL PROPERTY RIGHTS	23
ARTICLE 8	CONFIDENTIALITY; PUBLICATION	29
ARTICLE 9	REPRESENTATIONS, WARRANTIES AND COVENANTS	32
ARTICLE 10	TERM AND TERMINATION	36
ARTICLE 11	DISPUTE RESOLUTION	39
ARTICLE 12	INDEMNIFICATION	40
ARTICLE 13	MISCELLANEOUS	42

LIST OF EXHIBITS

Exhibit A	‒	Compound
Exhibit B	‒	MacroGenics Patents
Exhibit C	‒	Development Plan
Exhibit D	‒	Third Party Licenses
Exhibit E	‒	Transferred Documentation and Materials
Exhibit F	‒	Press Release
Exhibit G	‒	Form of Warrant
Exhibit H	‒	Form of Lock-Up

LICENSE AGREEMENT

This LICENSE AGREEMENT (this “Agreement”) is entered into as of May 7, 2018 (the “Effective Date”), by and between PROVENTION BIO, INC., a Delaware corporation, having its principal place of business at (“Provention”) and MACROGENICS, INC., a Delaware corporation having its principal place of business at 9704 Medical Center Drive, Rockville, MD 20850 (hereinafter “MacroGenics”). Provention and MacroGenics are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, MacroGenics has discovered and is developing a proprietary program that includes the Compound (as defined below) using the DART® Platform (as defined below) for the treatment of autoimmune and inflammatory diseases, containing CD32B and CD79B specificities and coded by MacroGenics as MGD010, and possesses proprietary intellectual property rights relating thereto;

WHEREAS, Provention has expertise in the research, development, manufacture and commercialization of pharmaceutical and diagnostic products, and wishes to obtain certain license rights in respect of such Compound and Products (as defined below), all in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE 1
DEFINITIONS

1.1 “Affiliate” means any corporation or other legal entity controlled by, controlling, or under common control with a Party. For the purpose of this definition, the term “control” means direct or indirect beneficial ownership of at least fifty percent (50%) of the voting stock of a corporation or other legal entity, or to hold the effective power to appoint or dismiss members of the management.

1.2 “API” means an active pharmaceutical ingredient, whether produced from a living organism or through synthetic process, i.e., any substance intended to be used in the manufacture of a drug product and that is intended to furnish pharmacological activity in the cure, treatment or prevention of disease or to affect the structure or any function of the body of man or other animals, including peptides, antibodies, hybrid molecules, fusion proteins, cytokines or other cellular elements.

1.3 “Applicable Law” means all applicable statutes, ordinances, regulations, rules, or orders of any kind whatsoever of any Governmental Authority, including the U.S. Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq.) (the “FFDCA”), Prescription Drug Marketing Act of 1987 (21 U.S.C. §§331, 333, 353, 381), the Generic Drug Enforcement Act of 1992 (21 U.S.C. §335(a) et seq.), U.S. Patent Act (35 U.S.C. §1 et seq.), Federal False Claims Act (31 U.S.C. §3729 et seq.) (the “FCA”), the Anti-Kickback Statute (42 U.S.C. §1320a-7b et seq.) (the “AKA”), the U.S. Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.) (the “FCPA”), and the United Kingdom Bribery Act (the “UKBA”), current Good Manufacturing Practices (“cGMP”) and current Good Clinical Practices (“cGCP”), all as amended from time to time, together with any rules, regulations, and compliance guidance promulgated thereunder.

1.4 “Biosimilar Competition” means, with respect to a Product in any country in a given calendar quarter, that, during such calendar quarter, (a) one or more generic products are commercially available in such country, and (b) aggregate Net Sales of such Product in such country in such calendar quarter equal [****] percent ([****]%) of the average aggregate Net Sales of the Product over the four (4) calendar quarters immediately prior to the calendar quarter in which one or more Generic Products first became commercially available in such country.

1.5 “Biosimilar Product” means, with reference to a given Product in a country, a Product that (a) is not produced, licensed or owned by the Provention Group, (b) is, according to the relevant Regulatory Authority for the given country or jurisdiction, highly similar with respect to the given Product, notwithstanding minor differences in clinically inactive components, and with no meaningful differences between the Biosimilar Product and the given Product in terms of the efficacy, safety, purity and potency of the product and (c) receives Regulatory Approval in any jurisdiction in the Territory through an abbreviated regulatory pathway. For countries or jurisdictions where no explicit biosimilar regulations exist, a Biosimilar Product includes any Product that (x) has been deemed to be a biosimilar to the given Product by a Regulatory Authority in another country or jurisdiction or (y) is a biological therapeutic containing an amino acid sequence that has [****] to the Product.

1.6 “BLA” means (a) a Biologics License Application as defined in the Public Health Service Act and the regulations promulgated thereunder; (b) a Marketing Authorization Application in Europe, including a Marketing Authorization Application filed with the EMA pursuant to the Centralized Approval Procedure or with the applicable Regulatory Authority of a country in Europe with respect to the decentralized procedure, mutual recognition or any national approval procedure; or (c) any equivalent or comparable application, registration or certification in any other country or region.

1.7 “BRIC” means, collectively Brazil, Russia, India and China.

1.8 “Business Day” shall mean a day other than a Saturday, Sunday or a day that is a bank holiday in the U.S. or a day that a Party (excluding any Affiliates) is officially closed for business.

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

1.10 “Calendar Year” shall mean the period of time beginning on January 1 and ending December 31, except for the first year of the Agreement Term which shall begin on the Effective Date and end on December 31, 2018.

1.11 “Centralized Approval Procedure” means, to the extent compulsory or permitted for the Regulatory Approval of the Compound or Product in Iceland, Liechtenstein, Norway or any country in the European Union, the procedure administrated by the EMA which results in a single marketing authorization that is valid in Iceland, Liechtenstein, Norway and all countries in the European Union.

1.12 “Clinical Study” shall mean a Phase I Study, Phase II Study or Phase III Study, as applicable.

1.13 “Combination Product” shall mean a human therapeutic product that is developed or commercialized by Provention under this Agreement and that comprises, consists of, or incorporates two or more APIs, which includes the Compound as one of the active pharmaceutical ingredients together with any formulation ingredients, regardless of the formulation or mode of administration of such Combination Product. For the sake of clarity, a Combination Product is a Product.

1.14 “Commercialize” or “Commercialization” means the commercial manufacture, marketing, promotion, sale, offering for sale, distribution, and/or commercial importation and exportation of a Product.

1.15 “Commercially Reasonable Efforts” means, with respect to the efforts to be expended, or considerations to be undertaken, by a Party or its Affiliate with respect to any objective, activity or decision to be undertaken hereunder, reasonable, good faith efforts to accomplish such objective, activity or decision as such Party would normally use to accomplish a similar objective, activity or decision under similar circumstances, it being understood and agreed that with respect to the Development, Manufacture, seeking and obtaining Regulatory Approval, or Commercialization of the Compound or Product, such efforts and resources shall be consistent with the efforts that Provention or MacroGenics, as applicable, devotes at the same stage of Development, Manufacture, seeking and obtaining Regulatory Approval, or Commercialization, as applicable, for its own internally developed pharmaceutical products in a similar area with similar market potential, at a similar stage of their product life taking into account the existence of other competitive products in the market place or under development, the proprietary position of the product, the regulatory structure involved, the anticipated profitability of the product and other relevant factors.

1.16 “Completion” means, for a clinical trial, the date upon which all patients have completed protocol-defined drug administration and [****] has occurred.

1.17 “Compound” means the DART^® Molecule described in Exhibit A that is designated by MacroGenics as MGD010 and that co-ligates both CD32B and CD79B.

1.18 “Confidential Information” means any information of a confidential or proprietary nature disclosed by or on behalf of a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including each Party’s or its Affiliates’ invention disclosures, proprietary materials, data, including any Information, Know-How, technologies, trade secrets, and/or manufacturing, marketing, personnel and other business information and plans, whether in oral, written, graphic or electronic form. Confidential Information (as defined in the Prior Confidentiality Agreement) disclosed under the Prior Confidentiality Agreement shall be deemed Confidential Information hereunder and the terms of this Agreement shall be considered Confidential Information of the Parties, with each Party being considered the Disclosing Party and the Receiving Party with respect thereto. Information shall not be deemed “Confidential Information” hereunder, and the Receiving Party shall have no obligation with respect to any information if it is:

(a) known by the Receiving Party prior to disclosure by the Disclosing Party, as evidenced by internal records or documentation of the Receiving Party; or

(b) information which is in the public domain or subsequently enters the public domain through no fault of the Receiving Party; or

(c) information that is received by the Receiving Party from an independent Third Party with the lawful right to disclose it; or

(d) information that was independently developed by the Receiving Party (or its Affiliates’) employees or contractors without the use of or reference to Confidential Information of the Disclosing Party as evidenced by internal records or documentation of the Receiving Party.

(e) Notwithstanding the foregoing, any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the Receiving Party. In addition, Confidential Information included in the MacroGenics Know-How to the extent to the extent solely and specifically related to the Compound and the Products in the Field shall be deemed Confidential Information of Provention notwithstanding that MacroGenics was the Disclosing Party of such Confidential Information.

1.19 “Control” means (as an adjective or as a verb including conjugations and variations such as “Controls” “Controlled” or “Controlling”), with respect to any Know-How, Patent Right or other intellectual property right, possession by a Party, including its Affiliates, of the ability (without taking into account any rights granted by one Party to the other Party under the terms of this Agreement) to grant access, a license or a sublicense to such Know-How, Patent Right or other intellectual property right without violating the terms of any agreement or other arrangement with, or necessitating the consent of, any Third Party.

1.20 “Cover” means (as an adjective or as a verb including conjugations and variations such as “Covered,” “Coverage” or “Covering”) that the Exploitation of a given compound, formulation or product would infringe a Valid Claim (or, in the case of a Valid Claim that has not yet issued, would infringe such Valid Claim if it were to issue in substantially the same scope) in the absence of a license under or ownership in the Patent Rights to which such Valid Claim pertains. The determination of whether a compound, formulation, process or product is Covered by a particular Valid Claim shall be made on a country-by-country basis.

1.21 “DART^® Molecule” means a bispecific covalently-bonded diabody molecule derived from the DART Platform and consisting of two (2) binding arms, whereby the first arm has a binding specificity conferred by an antibody variable region and the second arm has a binding specificity conferred by a different antibody variable region.

1.22 “DART Platform” means MacroGenics’ proprietary platform for generating DART^® Molecules.

1.23 “Develop” or “Development” means to discover, research or otherwise develop a product, including conducting any pre-clinical, non-clinical or clinical research and any drug development activity, including discovery, research, toxicology, pharmacology and other similar activities, test method development and stability testing, manufacturing process development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies (including pre- and post-approval studies), diagnostic assays in connection with clinical studies, and all activities directed to obtaining any Regulatory Approval, including any marketing, pricing or reimbursement approval. For the sake of clarity, Development shall not include any activities related to Commercialization.

1.24 “Dispute” shall mean any controversy, claim or legal proceeding arising out of or relating to this Agreement, or the breach, termination or invalidity thereof. Notwithstanding the foregoing, Disputes shall not include any disagreements solely about decisions for which one Party has final decision-making authority under this Agreement.

1.25 “EMA” means the European Medicines Agency or any successor agency(ies) or authority having substantially the same function.

1.26 “EU5” means, collectively, France, Germany, Italy, Spain, and the United Kingdom.

1.27 “European Union” or “EU” means the European Union member states as then-currently constituted; provided, however, that the EU shall always be deemed to include the EU5. As of the Effective Date, the European Union member states are Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and United Kingdom.

1.28 “Event Payments” shall mean, collectively, Development Event Payments and Sales Event Payments.

1.29 “Executive Officers” shall mean (a) with respect to Provention, its Chief Executive Officer (or his or her designee) and (b) with respect to MacroGenics, its Chief Executive Officer (or his or her designee).

1.30 “Exploit” or “Exploitation” means to research, Develop, make, have made, use, have used, register, sell, have sold, offer for sale, import, export, Commercialize, Manufacture, have Manufactured, or otherwise exploit the Compound or Product.

1.31 “FDA” shall mean the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function.

1.32 “Field” shall mean all therapeutic and diagnostic uses in humans.

1.33 “First Commercial Sale” shall mean, on a Product-by-Product and country-by-country basis, the first invoiced sale of such Product to a Third Party by a member of the Provention Group in such country following the receipt of any Regulatory Approval in such country required for the sale of such Product; in furtherance, and not in limitation of the foregoing, First Commercial Sale shall exclude transfers or dispositions of without consideration: (i) in connection with patient assistance programs; (ii) for charitable or promotional purposes; (iii) for preclinical, clinical, regulatory or governmental purposes or under so-called “named patient”, “compassionate use” or other limited access programs; or (iv) for use in any tests or studies reasonably necessary to comply with Applicable Laws, regulation or request by a Governmental Authority. For clarity, First Commercial Sale shall be determined on a country-by-country basis.

1.34 “Force Majeure” means any event beyond the reasonable control of the affected Party, which may include embargoes; war or acts of war, including terrorism; insurrections, riots, or civil unrest; strikes, lockouts or other labor disturbances; epidemics, fire, floods, earthquakes or other acts of nature; acts, omissions or delays in acting by any Governmental Authority (other than delays incident to the course of drug development); and failure of plant or machinery.

1.35 “FTE” means a full time equivalent person by year consisting of [****] days per year of work, corresponding to [****] hours per year of work, that an employee in the full time employment of a Party or a Party’s full-time contractor or consultant shall be obliged to spend at work in any twelve (12)-month period of continuous employment.

1.36 “FTE Costs” means, with respect to any period and a Party or its Affiliate, the FTE Rate multiplied by the number of FTEs expended by such Party or its Affiliate during such period.

1.37 “FTE Rate” means a rate of [****] dollars ($[****]) per FTE per Calendar Year (pro-rated for the period beginning on the Effective Date and ending on the last day of the first Calendar Year).

1.38 “GAAP” shall mean generally accepted accounting principles in the U.S., consistently applied.

1.39 “Governmental Authority” shall mean any federal, state, national, provincial or local government, or political subdivision thereof, or any multinational organization or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, or any court or tribunal (or any department, bureau or division thereof, or any governmental arbitrator or arbitral body), including without limitation any regulatory authority involved in granting approval to initiate or conduct clinical testing in humans, for regulatory approval to market a pharmaceutical/biologic product and/or, to the extent required in such country or jurisdiction, for pricing or reimbursement approval for a pharmaceutical product in such country or jurisdiction, including (i) the FDA, (ii) the EMA, and (iii) the European Commission.

1.40 “IND” means (a) an Investigational New Drug application as defined in the FFDCA and applicable regulations promulgated thereunder by the FDA; (b) a clinical trial authorization application for a product filed with a Regulatory Authority in any other regulatory jurisdiction outside the U.S., the filing of which (in the case of (a) or (b)) is necessary to commence or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction; or (c) documentation issued by a Regulatory Authority that permits the conduct of clinical testing of a product in humans in such jurisdiction.

1.41 “Indication” means a discrete clinically recognized form of a disease. For the sake of clarity, the following shall be treated as separate Indications for purposes of this Agreement: [****].

1.42 “Information” means ideas, inventions, discoveries, concepts, formulas, practices, procedures, processes, methods, knowledge, know-how, trade secrets, technology, designs, drawings, computer programs, skill, experience, documents, results, clinical and regulatory strategies, data, including pharmacological, toxicological, non-clinical and clinical data, analytical and quality control data, manufacturing data and descriptions, Patent Rights and legal data, market data, financial data or descriptions, assay protocols, specifications, information and submissions pertaining to, or made in association with, filings with any Governmental Authority or patent office, and the like, in written, electronic or other form, now known or hereafter developed, whether or not patentable.

1.43 “Initiation” shall mean, with respect to a Clinical Study of a Product, the date that a [****] in a Clinical Study approved by the respective Regulatory Authority or otherwise permitted under Applicable Law.

1.44 “Invention” means any invention, discovery or development, whether or not patentable, made, conceived or reduced to practice in the course of performance of this Agreement, whether made, conceived or reduced to practice solely by, or on behalf of, MacroGenics, Provention, the Parties jointly, or any Affiliate of the same.

1.45 “Know-How” shall mean all Information and Inventions Controlled by a Party that are necessary or reasonably useful for the Exploitation of the Compound or Product, but excluding any Patent Rights.

1.46 “MAA” or “Marketing Authorization Application” means an application for Regulatory Approval in any particular jurisdiction other than the U.S.

1.47 “MacroGenics Inventions” means Inventions Controlled by MacroGenics during the Agreement Term that are necessary or useful to Exploit the Compound or Products in the Field in the Territory.

1.48 “MacroGenics Know-How” means all Know-How which (i) is Controlled by MacroGenics as of the Effective Date or during the Agreement Term, including all MacroGenics Inventions, (ii) was used for or created as a result of the Development or Commercialization of the Compound or the Products prior to the Effective Date; and (iii) [****] relates to the manufacture, use, Development or Commercialization of the Compound or the Products, whether patentable or not.

1.49 “MacroGenics Patents” means all Patent Rights Controlled by MacroGenics, as of the Effective Date or during the Agreement Term that claim the composition, Manufacture, use, sale, offer for sale and/or import of the Compound or the Products, or any portion or component thereof, including MacroGenics’ interest in any Patent claiming a Joint Invention. The MacroGenics Patents existing as of the Effective Date are listed in Exhibit B.

1.50 “MacroGenics Platform Patent” means a MacroGenics Patent that is a Platform Patent.

1.51 “MacroGenics Product Patent” means a MacroGenics Patent that is a Product Patent.

1.52 “MacroGenics Technology” means, collectively: (a) MacroGenics Patents, (b) MacroGenics Know-How and (c) [****].

1.53 “MacroGenics Trademarks” means the trademarks “MacroGenics”, DART^®, trademarks which incorporate “MacroGenics” or the acronym “DART”, and related logos.

1.54 “Major Markets” means the United States, the BRIC countries, the EU5 and Japan.

1.55 “Manufacture” means all activities and processes related to the manufacturing of the Compound or a Product, or any ingredient thereof, including manufacturing of finished Product for Development and Commercialization, labeling, packaging, in-process and finished Product testing, release of the Compound or Product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of Compound or Product and ongoing stability tests and regulatory activities related to any of the foregoing. Where the context so requires, Manufacture shall also include obtaining Compound or Product from contract manufacturers. When used as a verb, to “Manufacture” means to engage in Manufacturing activities.

1.56 “[****]” means (a) the [****] identified as [****] and (b) the [****].

1.57 “Net Sales” means the gross amount billed or invoiced for a Product by any member of the Provention Group, in each case, for the sale of a Product to Third Parties (excluding a sale of a Product to Affiliates or sublicensees for resale), subject to the following deductions, as allocable to such Product (if not previously deducted in calculating the amount invoiced and to the extent included in the gross invoice price):

(a) reasonable trade, quantity, prompt settlement and other cash discounts and rebates (including wholesale inventory management fees and fees or allowances to other distributors, buying groups, health care insurance carriers or other pharmacy benefit managers (or equivalents thereof), federal, state/provincial, local or other Governmental Authority or other institution, or their agencies or purchasers, reimbursers, or trade customers), chargebacks, and price reductions or allowances actually allowed or granted from the billed amount, and discounts to customers, including cash coupons, vouchers and loyalty cards (and their redemption) and co-pay assistance;

(b) credits or allowances actually granted upon claims, rejections or returns of such sales of Products, including recalls;

(c) taxes imposed on the production, sale, delivery, import, export, distribution or use of the Product (including sales, use, excise or value added taxes, but excluding income taxes), duties or other governmental charges levied on or measured by the billing amount when included in billing, as adjusted for tax refunds and tax rebates;

(d) any discounts, rebates or similar payments in respect of sales paid for by any Governmental Authority, including Federal or state Medicaid, Medicare or similar state program, or any other similar program, or any other government imposed rebates or discounts from invoiced prices (to the extent not covered under clause (a) above); and

(e) transport, freight, postage and insurance costs relating to the transportation or delivery of Products.

Such amounts shall be determined from the books and records of the Provention Group, maintained in accordance with GAAP with respect to Provention and, with respect to any other member of the Provention Group, in accordance with the accounting standards applicable to such Provention Group member.

Net Sales shall exclude transfers or dispositions of Product, without consideration: (1) in connection with patient assistance programs; (2) for charitable or promotional purposes; (3) for preclinical, clinical, regulatory or governmental purposes or under so-called “named patient”, “compassionate use” or other limited access programs; or (4) for use in any tests or studies reasonably necessary to comply with applicable Law, regulation or request by a Governmental Authority.

In the event that a Product is sold as a Combination Product, the Net Sales of the Product shall be determined by multiplying the Net Sales of the Combination Product by the fraction A/(A+B), where A is the weighted (by sales volume) average unit sale price of the Product in the applicable country, where net sales is calculated in the same manner as Net Sales, when sold separately in finished form and B is the weighted average unit sale price in that country (net sales being calculated in the same manner as Net Sales) of the other API which is included in the Combination Product when such API is sold separately in finished form at the same dosage levels, in each case during the applicable royalty reporting period, or, if sales of both the Product and the other API did not occur in the same country in such period, then in the most recent royalty reporting period in which sales of both occurred, provided that such “recent royalty reporting period” shall not have been more than twenty-four (24) months earlier.

In the event that such weighted average sale price of the Product cannot be determined, but the weighted average sale price of the other API can be determined, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product by the following formula: one (1) minus B / C where B is the weighted average sale price of the other API when sold separately in finished form and C is the weighted average selling price of the Combination Product.

In the event that the weighted average sale price of both the Product and the other API in the Combination Product cannot be determined, the Net Sales of the Product shall be calculated by multiplying the Net Sales of the Combination Product (determined as provided above for Products) by the fraction A / C where A is the predicted fair market value of the Product if such Product were sold as a stand-alone Product as determined in good faith by the Parties and C is the weighted average selling price of the Combination Product.

The weighted average sale price for a Product, any other API(s) used in a Combination Product, or any Combination Product shall be calculated once each calendar year, at the beginning of such calendar year, and such price shall be used during all applicable royalty reporting periods for such entire calendar year. When determining the weighted average sale price of a Product, other API(s), or Combination Product, the weighted average sale price shall be calculated by dividing the sales dollar (translated into U.S. dollars) by the units of active ingredient sold during the preceding calendar year (or the number of months sold in a partial calendar year) for the respective Product, other API(s), or Combination Product. In the initial calendar year, a forecasted weighted average sale price will be used for the Product, other API(s) or Combination Product.

1.58 “Patent(s)” or “Patent Right(s)” means (a) all issued patents (extensions, restorations by existing or future extension or registration mechanism, including patent term adjustments, patent term extension, supplemental protection certificates or the equivalent thereof, substitutions, confirmations, re-registrations, re-examinations, reissues, and patents of addition), (b) patent applications (including all provisional applications, substitutions, requests for continuation, continuations, continuations-in-part, divisionals and renewals), (c) inventor’s certificates, and (d) and all equivalents of the foregoing in any country of the world.

1.59 “Phase I Study” shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(a) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.60 “Phase Ib Study” means a human clinical trial of a product that (a) is for the purposes of establishing initial safety, tolerability, pharmacokinetic, pharmacodynamic and initial clinical effectiveness information of the product and (b) administers repeated doses of the product to subjects in the trial.

1.61 “Phase II Study” shall mean a human clinical trial, or relevant portion of such trial, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.62 “Phase III Study” shall mean a human clinical trial, or relevant portion of such trial, that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain Regulatory Approval to market such product in patients having the disease or condition being studied as described in 21 C.F.R. § 312.21(c) (FDCA), as amended from time to time, and the foreign equivalent thereof.

1.63 “Platform Claim” means a Patent claim that Covers an aspect of the general structure or a property of DART^®Molecules and/or the Manufacture of DART^® Molecules generally and [****] that (a) [****] of any Compound or Product that is [****] such Compound or Product; or (b) [****] to the Exploitation of any Compound or Product.

1.64 “Platform Patent” means a Patent that includes a Platform Claim.

1.65 “Product” means any pharmaceutical product containing the Compound alone or in combination with other therapeutically active ingredients, including Combination Products.

1.66 “Product Claim” means a Patent claim that [****] Covers a Compound or Product, and/or the Exploitation of the Compound or Product.

1.67 “Product Patent” means any Patent that [****] a Product Claim.

1.68 “Provention Group” shall mean, collectively, Provention, its Affiliates and its permitted sublicensees pursuant to Section 2.1.

1.69 “Provention Know-How” means all Know-How Controlled by Provention as of the Effective Date or during the Agreement Term.

1.70 “Provention Patents” means all Patent Rights owned or Controlled by Provention as of the Effective Date or during the Agreement Term that: (a) Cover the composition of matter of, the method of making or using, the sale or the importation of the Compound or the Product; or (b) are otherwise necessary or useful to Exploit the Compound or the Product in the Field in the Territory.

1.71 “Provention Technology” means, collectively, Provention Patents and Provention Know-How.

1.72 “Qualified Consideration” means any payments or other consideration that Provention or any of its Affiliates receives in connection with the (and, in a transaction in which rights to multiple products are transferred, to the extent allocable to a) grant of rights (including any assignment) under the Provention License and/or rights with respect Products in an agreement or arrangement with a Third Party (“Qualified Consideration Agreement”). In furtherance and not in limitation of the foregoing, Qualified Consideration shall not include (i) royalties based on Net Sales, (ii) amounts received to cover future reasonable, fully-burdened costs incurred or to be incurred by Provention or its Affiliates in the performance of research, development or manufacturing activities to be performed by Provention or its Affiliates after the Effective Date, (iii) amounts received as reimbursement for out-of-pocket costs incurred by Provention in the preparation, filing, prosecution and maintenance of the Patents under the Provention License, or (iv) consideration for the issuance of equity interests in Provention or its Affiliates to the extent there is no premium included in such issuance for rights granted with respect to the Product. If Provention or its Affiliate receives non-cash consideration that otherwise qualifies as Qualified Consideration, the Qualified Consideration will be calculated based on the fair market value of such consideration, at the time of the transaction, assuming an arm’s length transaction made in the ordinary course of business.

1.73 “Regulatory Approval” shall mean any approvals, registrations or authorizations by a Regulatory Authority, necessary for the manufacture and sale of a Product in the Field in a regulatory jurisdiction in the Territory.

1.74 “Regulatory Authority” shall mean any national, supranational (e.g., the European Commission, the Council of the European Union, the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, including the FDA, in each country involved in the granting of Regulatory Approval for the Product.

1.75 “Regulatory Documentation” means, with respect to any Compound or Product, all regulatory applications, filings, notifications and supporting documents created, for, submitted to or received from an applicable governmental agency or Regulatory Authority relating to such Compound or Product, and all data contained therein, including the contents of any minutes from meetings (whether in person or by audio conference or videoconference) with Regulatory Authorities, registrations and licenses, regulatory drug lists, advertising and promotion documents shared with Regulatory Authorities, adverse event files, complaint files and Manufacturing records. Regulatory Documentation includes INDs.

1.76 “Royalty Term” means, on a Product-by-Product, and country-by-country basis, the period commencing upon the first commercial sale of such Product in such country and expiring upon the later of: (i) the last-to-expire Valid Claim in a MacroGenics Patent in a given country, or (ii) [****] years after the date of first commercial sale of such Product in such country.

1.77 “Territory” means worldwide.

1.78 “Third Party” means a person or entity other than (a) MacroGenics or any of its Affiliates or (ii) Provention or any of its Affiliates.

1.79 “Third Party License” shall mean any license or other agreement from a Third Party under which the payment of any royalties, sublicense revenues, milestones or other payments become due with respect or related to the Exploitation of the Compound or a Product in the Field in the Territory. Third Party Licenses shall include the agreements identified in Exhibit D.

1.80 “Valid Claim” means: (a) a claim of an issued and unexpired patent that has not been (i) held permanently revoked, unenforceable, unpatentable or invalid by a decision of a court or governmental body of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, (ii) rendered unenforceable through disclaimer or otherwise, (iii) abandoned or (iv) permanently lost through an interference or opposition proceeding without any right of appeal or review; or (b) a claim of a pending patent application that (i) has been asserted and continues to be prosecuted in good faith and (ii) has not been abandoned or finally rejected without the possibility of appeal or refiling, and (iii) has not been pending longer than seven (7) years from the date of issuance of the first substantive patent office action considering patentability of such claim, or a claim having substantially the same scope in an earlier patent application to which the pending patent application claims priority, by the relevant patent office in the country or territory in which such claim is pending.

Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

Definition		Section
Acquired Party		13.3(b)
Acquirer		13.3(b)
Acquisition		13.3(b)
Administrator		11.3(a)
Agreement		Preamble
Agreement Term		10.1
AKA		1.3
Bankruptcy Laws		10.5(b)
Breaching Party		10.3
cGCP		1.3
cGMP		1.3
Claim		12.1
Commercialization Report		5.6
Cooperating Party		8.3(b)
Cure Period		10.3
Development Event		6.2(a)
Development Event Payment		6.2(a)

Development Plan		3.1
Development Report		3.5(b)
Development Transition Plan		3.6
Disclosing Party		1.18
Event		6.2
Effective Date		Preamble
FCA		1.3
FCPA		1.3
FFDCA		1.3
Inbound License		9.2(g)
Indemnifying Party		12.3(a)
Indemnitee		12.3(a)
Infringement Recovery		7.5(e)
Insolvency Event		10.5(a)
Joint Inventions		7.1
Joint Patents		7.3(c)
Losses		12.1
MacroGenics		Preamble
MacroGenics Indemnitee		12.1
MacroGenics Platform Inventions		7.1
Manufacturing Technology Transfer		4.1
Manufacturing Transition Plan		4.1
[****]		6.4(a)
[****] License		6.4(a)
Officials		9.4(b)
Package		5.3
Party		Preamble
Parties		Preamble
Patent Extension		7.4
Patent Extensions		7.4
Payment		9.4(b)
Platform Patent		7.5(d)
Platform Patent Extension		7.4
Prior CDA		8.5
Provention		Preamble
Provention Common Stock		9.3
Provention Indemnitee		12.2
Provention License		2.1
Provention Series A Preferred Stock		9.3

Publishing Party		8.7
Qualified Consideration Agreement		1.71
R&D Technology Transfer		3.6
Receiving Party		1.18
Requesting Party		8.3(b)
Reviewing Party		8.7
Rules		11.3(a)
Sales Event		6.2(b)
Sales Event Payment		6.2(b)
Securities Act		9.2(k)
Sole Inventions		7.1
Terminating Party		10.3
Third Party Obligation		6.4(a)
Third Party Patent Challenge		7.7(b)
Transferred Materials		4.1
Transition Period		3.6
UKBA		1.3
Voluntary Termination		10.2
Voting Debt		9.3
Warrant		6.1

ARTICLE 2
LICENSES

2.1 License Grant to Provention. Subject to the terms and conditions of this Agreement, MacroGenics hereby grants to Provention (i) an exclusive (even as to MacroGenics), royalty-bearing, non-transferable (except in accordance with Section 13.3) license, with the right to grant sublicenses in accordance with this Section 2.1, under the MacroGenics Patents and the [****]; and (ii) a non-exclusive, royalty-bearing, non-transferable (except in accordance with Section 13.3) license, with the right to grant sublicenses in accordance with this Section 2.1, under the MacroGenics Know-How, in each case to Exploit the Compound and Products in the Field in the Territory (the “Provention License”).

(a) Right to Sublicense to Affiliates. Subject to Section 2.1(c), Provention shall have the right to grant sublicenses to its Affiliates under the Provention License without prior approval of MacroGenics.

(b) Right to Sublicense to Third Parties. Subject to the conditions in this subsection (b) and Section 2.1(c), Provention shall have the right to grant sublicenses to Third Parties under the Provention License without MacroGenics’ consent. Provention shall identify each Third Party sublicensee to MacroGenics for which Provention has granted rights under the MacroGenics Technology to Exploit the Compound or a Product in a jurisdiction in the Territory and shall provide to MacroGenics copies of all such sublicenses within thirty (30) days of execution thereof.

(c) Sublicenses. Any sublicense granted under subsections (a) or (b) above shall refer to and be subordinate to this Agreement and, except to the extent the Parties may otherwise agree in writing, must be consistent in all material respects with the terms and conditions of this Agreement. Provention assumes full responsibility for the performance of all obligations by and observance of all terms imposed on any sublicensee. Provention shall be responsible for the payment of all amounts due hereunder, and for all other obligations of its sublicensees under this Agreement as if such obligations were those of Provention.

(d) Compliance. Provention, on behalf of itself and Provention Group, shall be responsible for complying with, and shall be bound by, all terms and conditions of any agreement entered into between MacroGenics and any Third Party that constitutes MacroGenics Technology under which Provention or Provention Group acts as a sublicensee, including any termination provisions in any such agreement.

2.2 License Grant to MacroGenics. Subject to the terms and conditions of this Agreement, Provention hereby grants back to MacroGenics a non-exclusive, fully-paid, royalty-free, non-transferable (except in accordance with Section 13.3), non-sublicensable sublicense, under the Provention License to use the Compound and Products in the Field in the Territory, solely to the extent necessary or useful for MacroGenics to exercise any of its rights and perform any of its obligations under this Agreement.

2.3 No Implied Rights or Licenses; Certain Covenants. Neither Party grants to the other Party any rights or licenses in or to any Patent Right, Know-How, trademarks or other intellectual property right Controlled by such Party, whether by implication, estoppel or otherwise, except to the extent expressly provided for under this Agreement. Each Party covenants and agrees that it shall not, and it shall cause its Affiliates and sublicensees not to, use or practice any Patent Rights or Know-How licensed to it by the other Party outside the scope of the license(s) granted to it under this Agreement.

2.4 Subcontracting. Provention may subcontract the performance of any Development, Regulatory, Manufacturing or Commercialization activities conducted in accordance with Article 3, Article 4, and Article 5, respectively, to any of its Affiliates or any Third Party, provided that: (a) such subcontractor has entered or shall enter into, prior to performing activities under this Agreement, an appropriate written agreement obligating such subcontractor to be bound by obligations of confidentiality that are no less restrictive than the obligations set forth in Article 8; (b) Provention shall retain or obtain ownership of any Inventions and all intellectual property rights therein made by such subcontractor in performing such services (other than Inventions which constitute developments or improvements to the processes, systems or base technology of such subcontractor); (c) Provention shall oversee the performance of any subcontracted activities in a manner that would be reasonably expected to result in their successful and timely completion; and (d) Provention shall at all times remain responsible for the performance of such subcontracted activities as if such activities were performed by Provention. Notwithstanding anything to the contrary in the foregoing, Provention shall obtain MacroGenics’ written consent prior to subcontracting the performance of all or substantially all of its Development, Regulatory, Manufacturing or Commercialization activities under this Agreement to any Third Party.

ARTICLE 3
DEVELOPMENT & REGULATORY MATTERS

3.1 Development Activities. Subject to the terms and conditions of this Agreement, commencing on the Effective Date, Provention shall be solely responsible for, at its own expense, all Development of the Compound and Products. Provention shall conduct the initial Development of the Compound and Products pursuant to a development plan (the “Development Plan”), attached as Exhibit C to this Agreement. The initial Development Plan shall include an obligation for Provention to conduct a Phase Ib Study of the Product in patients for one or more Indications.

3.2 Diligence. Provention shall use Commercially Reasonable Efforts to conduct the Development activities described in the Development Plan pursuant to such plan. Additionally, Provention shall use Commercially Reasonable Efforts to Develop, and to seek Regulatory Approval for, at least one Product throughout the Territory. Development activities conducted by Provention’s Affiliates and permitted sublicensees pursuant to Section 2.1 will be considered Provention activities under this Agreement for purposes of determining whether Provention has complied with its obligations under this Section 3.2. Without limiting the foregoing, [****], provided that, as long as Provention continues to use Commercially Reasonable Efforts with respect to the Development Plan, such outside date shall be deemed extended by such additional period as may result from delays caused by reasons beyond the control of Provention, including scientific, regulatory, safety, manufacturing, quality and similar issues pertaining to the Development Plan.

3.3 Compliance with Law. Provention shall conduct all Development activities related to Compound and Products in all material respects in good scientific manner and in compliance in with all Applicable Law, including applicable national and international (e.g., ICH, GCP, GLP, and GMP) guidelines.

3.4 Records. Provention shall prepare and maintain, and shall require its Affiliates and permitted sublicensees to prepare and maintain, complete and accurate written records, accounts, notes, reports and data with respect to all Development activities conducted pursuant to this Agreement in accordance with its internal practices and industry standards. Such records shall fully and properly reflect all work done and results achieved in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes.

3.5 Development Reports. Until Provention has fulfilled all of its diligence obligations under Section 3.2, no later than:

(a) prior to the First Commercial Sale of a Product, the last day of each six (6) month period beginning on the Effective Date; and

(b) after the First Commercial Sale of a Product, within ninety (90) days after the end of each calendar year;

Provention shall provide to MacroGenics in writing a report detailing Provention’s efforts and progress during the six (6) months prior to such date, as applicable, to Develop each Compound and Product (each, a “Development Report”). Each Development Report shall describe, among other matters: (a) material Development activities completed since the last report, including the object and parameters of the Development, when initiated, when completed and a summary of all material results; (b) material Development activities planned to be undertaken before the next report, including the type and object of any Clinical Studies to be conducted and their projected starting and completion dates; and (c) material changes in Provention’s Development or Commercialization plans. In addition, Provention shall reasonably respond to reasonable requests by MacroGenics from time to time for information regarding Provention’s Development and Commercialization activities for the Compound and Products.

3.6 R&D Technology Transfer. As soon as practicable, but in no case later than fifteen (15) Business Days after the Effective Date, the Parties shall meet in person at MacroGenics’ offices to discuss and agree upon a written transition plan, that will, at a minimum include the items set forth on Exhibit E. Beginning on the Effective Date and for a period of one hundred five (105) days after the Effective Date (the “Transition Period”), MacroGenics shall use Commercially Reasonable Efforts to transfer to Provention, or its designee, and Provention shall cooperate in good faith to support MacroGenics’ transfer of, such activities and responsibilities related to the Compound and the Products set forth in, and in accordance with, a transition plan (such plan, the “Development Transition Plan”; such transfer, the “R&D Technology Transfer”) to be agreed on a commercially reasonable basis and in good faith between the Parties. The Development Transition Plan shall be designed to effect an efficient transfer from MacroGenics to Provention, or its designee, of (a) all Compound and Product-related Development, Manufacturing and regulatory responsibilities and documentation (which, for clarity, shall include any Regulatory Documentation directed to, and solely related to, Products) and (b) any other Information Controlled by MacroGenics that is reasonably necessary or useful for Provention’s research, Development or Commercialization of the Compound and the Products in accordance with the terms of this Agreement. Provention shall fund (i) all of the reasonable FTE Costs incurred by MacroGenics in the performance of the Development Transition Plan after the Transition Period and (ii) all third-party out-of-pocket expenses incurred by MacroGenics in the performance of the Development Transition Plan, to the extent such third-party out-of-pocket expenses are approved in advance by Provention. Provention shall pay such FTE Costs and such approved third-party out-of-pocket expenses within thirty (30) days following receipt of an invoice therefor.

3.7 Preparation of Regulatory Documentation. Following completion of the R&D Technology Transfer, Provention shall be solely responsible, at its own cost and expense, for all regulatory affairs related to the Compound and Products in the Field in the Territory, including (i) developing and implementing the overall regulatory strategy with respect to obtaining Regulatory Approval of Products in the Field in the Territory (it being understood that the regulatory strategy for the Territory shall be consistent with the terms of this Agreement); (ii) preparing, submitting and maintaining all Regulatory Documentation related to the Compound or Products in the Territory; and (iii) conducting communications with the relevant Regulatory Authority in furtherance of subsection (ii) or otherwise related to the Exploitation of the Compound and Products in the Territory.

3.8 Regulatory and Inter-Party Reporting.

(a) Following completion of the R&D Technology Transfer, Provention shall be solely responsible, at its own cost and expense, for reporting to appropriate Regulatory Authorities in accordance with Applicable Law, including local requirements, all adverse events related to the use of the Compound or Products in the Territory.

(b) Each Party shall promptly notify the other of any information it receives regarding any threatened or pending action, inspection or communication by or from any Third Party, including a Regulatory Authority, which such Party reasonably believes may materially affect the Development of the Compound or Products.

ARTICLE 4
MANUFACTURING

4.1 Manufacturing Technology Transfer. As soon as practicable, but in no case later than fifteen (15) Business Days after the Effective Date, the Parties shall meet in person to agree upon a written transition plan that will, at a minimum, include the current inventory of MGD010 in MacroGenics’ Control, and the inventory, drug substance and materials set forth on Exhibit E (the “Transferred Materials”). Beginning on the Effective Date and for a period of one hundred five (105) days from the Effective Date, MacroGenics shall use Commercially Reasonable Efforts to transfer, or cause to be transferred, to Provention or its designee, and Provention shall cooperate in good faith to support MacroGenics’ transfer of, such Manufacturing-related Know-How and inventory related to the Compound and the Products set forth in, and in accordance with, a transition plan to be agreed by the Parties on a commercially reasonable basis and in good faith after the Effective Date (such plan, the “Manufacturing Transition Plan”; such transfer, the “Manufacturing Technology Transfer”). The Manufacturing Transition Plan shall be designed to effect an efficient transfer from MacroGenics to Provention, or its designee, of (a) all MacroGenics Know-How that is reasonably necessary or useful for Provention’s Manufacture of Compound and Products in accordance with the terms of this Agreement and (b) all Compound and Products in finished form or in process on the Effective Date in MacroGenics’ inventory, including master cell banks and working cell banks, on the Effective Date. Provention shall fund (i) all of the reasonable FTE Costs incurred by MacroGenics in the performance of the Manufacturing Transition Plan after the Transition Period and (ii) all of the third party out-of-pocket expenses incurred by MacroGenics in the performance of the Manufacturing Transition Plan, to the extent such third-party out-of-pocket expenses are approved in advance by Provention. The Parties shall enter into such quality agreements, supply transfer agreements or other agreements as are deemed as are necessary to effectively execute the Manufacturing Technology Transfer in accordance with all Applicable Laws. Provention shall pay such FTE Costs and approved third-party out-of-pocket expenses within thirty (30) days following receipt of an invoice therefor.

4.2 Manufacturing Responsibility. Except as provided in Section 4.1, Provention shall have sole responsibility for, at its sole cost and expense, all Manufacturing-related activities, including Manufacturing, or having Manufactured, clinical and commercial supplies of the Compound and the Products for Development and Commercialization in the Field in the Territory.

4.3 Compliance with Law. Provention shall Manufacture, or have Manufactured, Compound and Products in compliance in all material respects with all Applicable Law, including any specifications, FDA (or foreign equivalent) requirements and applicable national and international (e.g., ICH, GCP, GLP, and GMP) guidelines.

ARTICLE 5
COMMERCIALIZATION

5.1 General. Provention shall be responsible for all aspects of the Commercialization of Products in the Field in the Territory, and all costs and expenses associated therewith, including: (a) developing and executing a commercial launch and pre-launch plan; (b) marketing and promotion (including detailing); (c) booking sales and distribution and performance of related services; (d) handling all aspects of order processing, invoicing and collection, inventory and receivables; (e) publications; (f) providing customer support, including handling medical queries, and performing other related functions; (g) reviewing and approving all promotional materials for compliance with Applicable Law, including submitting, where appropriate, to the applicable Regulatory Authority and (h) conforming its practices and procedures in all material respects to Applicable Law relating to the marketing, detailing and promotion of the Products in the Field in the Territory.

5.2 Commercialization Efforts. Provention shall use Commercially Reasonable Efforts to Commercialize at least one Product for which Regulatory Approval is received in each of (a) U.S., (b) the EU5, (c) Japan and (d) the BRIC. Commercialization activities conducted by Provention’s Affiliates or permitted sublicensees pursuant to Section 2.1 will be considered Provention activities under this Agreement for purposes of determining whether Provention has complied with its obligations under this Section 5.2.

5.3 Discounted Sales. Provention shall not, and shall not permit any member of the Provention Group to, unreasonably discount the price of a Product included in a package of products offered for sale by Provention or any member of the Provention Group (a “Package”) compared to the price of the other products included in such Package.

5.4 Trademarks. Provention shall have sole responsibility, at its own expense, for all matters relating to the use of, and shall own, all trademarks used in the sale of Products in the Field in the Territory (but excluding all MacroGenics Trademarks and any trademark that is confusingly similar to a MacroGenics Trademark), including the selection, filing, prosecution, maintenance, defense and enforcement thereof.

5.5 Compliance with Law. Provention shall conduct all Commercialization activities related to Products in compliance in all material respects with all Applicable Law. Provention shall be responsible for tracking and reporting transfers of value initiated and controlled by it and its Affiliates, and its and their employees, contractors, and agents pursuant to the requirements of the marketing reporting laws or research expense reporting laws of any Governmental Authority in the Territory.

5.6 Commercialization Report. Commencing six (6) months prior to the anticipated filing of the first BLA for a Product in the Field in the Territory, at all times during the Agreement Term, and thereafter on a Calendar Year basis, Provention shall provide to MacroGenics in writing a report detailing Provention’s efforts and progress during the one (1) year prior to such date, to Commercialize each Product (each, a “Commercialization Report”). Each Commercialization Report shall describe, among other matters: (a) material Commercialization activities completed since the last report, including the object and parameters of the Commercialization, when initiated, when completed and a summary of all material results; (b) material Commercialization activities planned to be undertaken before the next report; and (c) material changes in Provention’s Commercialization plans. In addition, Provention shall reasonably respond to reasonable requests by MacroGenics from time to time for information regarding Provention’s Commercialization activities for such Products.

ARTICLE 6
PAYMENT OBLIGATIONS

6.1 Equity Interest. As partial consideration for the Provention License and other rights granted hereunder, Provention will issue to MacroGenics a warrant to purchase two hundred seventy thousand and two hundred ninety-nine (270,299) common shares, which is the number of common shares representing one percent (1%) of Provention’s fully diluted outstanding shares on the issue date. The warrant will be exercisable for a period beginning on the Effective Date and ending on the date that is seven (7) years from the Effective Date at a per share exercise price equal to two dollars and fifty cents ($2.50), the per share price at which the Series A Preferred Shares were issued pursuant to a separate warrant purchase agreement, substantially in the form attached to this Agreement as Exhibit G (the “Warrant”). MacroGenics shall execute a Lock-Up Agreement in substantially the form attached hereto as Exhibit H prior to or concurrently with the execution of this Agreement.

6.2 Event Payments. Provention will notify MacroGenics within thirty (30) days following the achievement by any member of the Provention Group of each Development Event and Sales Event (individually or collectively, the “Event(s)”). In the case of Sales Events, such thirty (30) day period shall run from the end of the Calendar Quarter during which the relevant Sales Event was achieved. Provention shall pay MacroGenics the corresponding Development Event Payment within ninety (90) days after achievement of each Development Event. Provention shall pay MacroGenics the corresponding Sales Event Payment within ninety (90) days after the end of the Calendar Year in which such Sales Event is achieved.

(a) Development Events. In consideration for the rights granted to Provention under this Agreement, Provention shall make the following one-time, non-refundable, non-creditable (i.e., to any other obligation of Provention hereunder) Development Event Payments (each, a “Development Event Payment”) to MacroGenics, upon the first achievement by a member of the Provention Group of the corresponding event (each, a “Development Event”). Each Development Event Payment listed in the table below shall be payable only once upon the first achievement of the corresponding Development Event.

	Development Event Payment
Development Event	For 1^st Indication	For 2^nd Indication
[****]	[**]United States dollars ($[**])	[****]
[****]	[**] United States dollars ($[**])	[**] United States dollars ($[**])
[****]	[**] United States dollars ($[**])	[**] United States dollars ($[**])
[****]	[**] United States dollars ($[**])	[**] United States dollars ($[**])

If for any reason the Phase III Study Development Event for any Indication does not occur prior to the occurrence of any BLA Approval Development Event for such Indication, then the Phase III Study Development Event shall be deemed to occur concurrently with the occurrence of the first BLA Approval Development Event.

(b) Sales Events. In consideration for the rights granted to Provention under this Agreement, Provention shall make the following one-time, non-refundable, non-creditable sales event payments (each, a “Sales Event Payment”) to MacroGenics, upon the first time during the Agreement Term that the total aggregate Net Sales of a Product by the Provention Group in the Territory for such Product exceed the amounts set forth in the following table (each, a “Sales Event”). For clarity, each Sales Event Payment below shall be paid only once regardless of the number of Products achieving the applicable Sales Event.

Aggregate Worldwide Sales Events
Sales Event		Sales Event Payment
(i) Upon the first occasion that aggregate worldwide Net Sales of a Product exceed [**] United States dollars ($[**])		[**] United States dollars ($[**])
(ii) Upon the first occasion that aggregate worldwide Net Sales of a Product exceed [**] United States dollars ($[**])		[**] United States dollars ($[**])
(iii) Upon the first occasion that aggregate worldwide Net Sales of a Product exceed [**] United States dollars ($[**])		[**] United States dollars ($[**])

6.3 Royalties.

(a) Royalty Payments. As further consideration for the rights granted to Provention hereunder, Provention shall pay to MacroGenics, on a Product-by-Product basis, with respect to the aggregate annual Net Sales of each Product in each country in the U.S. Territory during the applicable Royalty Term for such Product in such country, royalties at a rate of [****] percent ([****]%) of Net Sales of Product.

(b) Biosimilar Competition. The royalty rate under Sections 6.3(a) shall be reduced by [****] percent ([****]%), on a country-by-country basis and Product-by-Product basis, in each country in which Biosimilar Competition exists with respect to such Product in a country of the Territory.

6.4 Third Party Payments.

(a) As between the Parties, MacroGenics shall be solely responsible for payments becoming due for any royalties, sublicense revenues, milestones or other similar obligations arising with respect to any licenses entered into by MacroGenics or its predecessors in interest prior to the Effective Date that relate to the Exploitation of Products in the Field in the Territory (each, a “Third Party Obligation”) other than those that are [****] related to the Product under the license elected by MacroGenics for [****] on [****] under the [****] Agreement between [****] and MacroGenics, Inc. effective [****] as amended and restated [****] (the “[****] License”), for which responsibility shall be allocated as set forth in Section 6.4(c).

(b) Except for Third Party Obligations that MacroGenics is solely responsible for paying pursuant to Section 6.4(a), Provention shall be responsible for all other Third Party Obligations arising from any Third Party intellectual property rights Provention secures after the Effective Date; provided that for any Patent Rights that the Provention Group otherwise would reasonably have been likely to have infringed by selling the relevant Product in the relevant country, Provention shall have the right to deduct a maximum of [****] percent ([****]%) of the royalties actually paid by Provention to a Third Party with respect to such arrangement from royalties otherwise due and payable to MacroGenics for such Product in such country during any Calendar Quarter for which royalties are payable under Section 6.3(a); provided further, that Provention shall not have the right to deduct any amounts paid by a member of the Provention Group under this Section 6.4(b) to (i) any Third Party that is a member of the Provention Group or (ii) for any Patent Right that claims (A) any pharmaceutically-active compound other than the Compound, (B) any use claims (except those claiming one or more approved Indications for the Product in the given country) or (C) any manufacturing claims.

(c) Provention shall be responsible for [****] percent ([****]%) of the amounts due to [****] under the [****] License, provided that MacroGenics shall be responsible for making payments to [****] and complying with all its other obligations as required under the [****] License. Provention shall include its share of any royalties due under the [****] License in its payment of the amounts due to MacroGenics under Section 6.3(a). In addition, Provention shall provide MacroGenics with (i) notice of the achievement of any milestone attributable to the Product under the [****] License and (ii) the amount due in connection with such milestone sufficiently in advance of the deadlines provided for under the [****] License to allow MacroGenics to make the payments contemplated thereunder. For clarity, any Third Party Obligations that (i) [****] related to the Product, including those due under MacroGenics [****] Agreement with [****], or (ii) are the responsibility of Provention under Section 6.4(b), shall remain MacroGenics’ sole responsibility.

6.5 Royalty Floor. Notwithstanding anything to the contrary in the foregoing, in no event shall the reductions from Section 6.3(b) and Section 6.4, in the aggregate, reduce the royalties payable to MacroGenics for any Calendar Quarter by more than [****] percent ([****]%) of the payments that would otherwise be due for such Product pursuant to Section 6.3(a).

6.6 Qualified Consideration. Provention shall pay MacroGenics an amount equal to [****] percent ([****]%) of all Qualified Consideration received pursuant to any Qualified Consideration Agreement; provided that if Provention or its Affiliates enter into the Qualified Consideration Agreement [****], then all such amounts paid to MacroGenics shall be creditable against future milestones related to the applicable Product which are due to MacroGenics in accordance with Section 6.2. For the avoidance of doubt, in the event that a Qualified Consideration Agreement involves the grant of rights with respect to the Provention License and rights that relate to Teplizumab, any milestone payments that would constitute Qualified Consideration shall be allocated to the specific product (either a Product hereunder or a Teplizumab product) for which such milestone was achieved and any upfront payment or equity received that would constitute Qualified Consideration shall be allocated to the respective products based on the ratio of the comparative total milestone payment amounts for such products under such Qualified Consideration Agreement (e.g., if total milestone payments payable under the Qualified Consideration Agreement equals $100,000,000 and $40,000,000 is based on milestones achieved by a Product and $60,000,000 is based on milestones achieved by a Teplizumab product, the upfront payment or equity received will be allocated forty percent (40%) to Product and sixty percent (60%) to Teplizumab).

6.7 Reporting.

(a) Royalty Reports and Payment. Within forty-five (45) days (sixty (60) days in the event that a sublicensee has generated Net Sales) after the conclusion of each Calendar Quarter in which Net Sales are generated or Qualified Consideration is received, Provention shall deliver to MacroGenics a report containing the following information (in each instance, with a Product-by-Product and country-by-country breakdown): (i) the gross amount billed or invoiced for Products sold, leased or otherwise transferred by the Provention Group during the applicable Calendar Quarter; (ii) a calculation of Net Sales for the applicable Calendar Quarter, including an itemized listing of allowable deductions; (iii) a detailed accounting of all Qualified Consideration received during the applicable Calendar Quarter; and (iv) the total amount payable to MacroGenics in U.S. dollars on Net Sales and Qualified Consideration for the applicable Calendar Quarter, together with the exchange rates used for conversion

(b) Timing of Payments. Provention shall pay all amounts due to MacroGenics pursuant to Section 6.3(a) or Section 6.6, as applicable, with respect to Net Sales by the Provention Group or Qualified Consideration for any Calendar Quarter concurrent with the submission of the applicable quarterly report pursuant to Section 6.7(a).

(c) Currency Conversion. Conversion of foreign currency to U.S. Dollars will be made at the conversion rate existing in the United States (as reported in The Wall Street Journal, Eastern Edition) on the last working day of the applicable Calendar Quarter. Such payments will be without deduction of exchange, collection or other charges.

6.8 Late Payment. Any payment under this Agreement that is overdue shall bear interest, to the extent permitted by Applicable Laws, at the thirty-day United States Dollar London Interbank Offered Rate (LIBOR) effective for the date that payment was due (as published in The Wall Street Journal, Eastern Edition) plus three percentage points, on a per year basis.

6.9 Currency and Method of Payment. Royalties on Net Sales and all other amounts payable by Provention hereunder shall be paid by Provention in U.S. Dollars in immediately available funds to account(s) designated in writing by MacroGenics.

6.10 Taxes.

(a) Taxes on Income. Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this Agreement.

(b) General. Provention will make all payments to MacroGenics under this Agreement without deduction or withholding for taxes, except to the extent that any such deduction or withholding is required by Applicable Law in effect at the time of payment.

(c) Tax Cooperation. The Parties agree to cooperate with one another and use reasonable efforts to avoid or reduce tax withholding or similar obligations in respect of any royalties, License Fees, Event Payments, and other payments made by Provention to MacroGenics under this Agreement. To the extent Provention is required to deduct and withhold taxes on any payment to MacroGenics, Provention shall be entitled to make such deduction or withholding and shall pay the amounts of such taxes to the proper Governmental Authority in a timely manner, and, as soon as practicable after any payment of taxes by Provention to a Governmental Authority pursuant this Section 6.10(c), Provention shall transmit to MacroGenics an official tax certificate or other evidence of such payment sufficient to enable MacroGenics to claim such payment of taxes. MacroGenics shall provide Provention any tax forms that may be reasonably necessary in order for Provention, as permitted by Applicable Law, to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty, to the extent MacroGenics is legally able to do so. In addition, MacroGenics shall deliver such documentation prescribed by Applicable Law or reasonably requested by Provention as will enable Provention to determine whether or not MacroGenics is subject to backup withholding or information reporting requirements. MacroGenics shall deliver to Provention on or prior to the date of this Agreement (and from time to time thereafter upon the reasonable request of Provention) executed originals of IRS Form W-9 certifying that MacroGenics is exempt from U.S. federal backup withholding tax. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by Applicable Law, of withholding taxes or similar obligations resulting from payments made under this Agreement, such recovery to be for the benefit of MacroGenics as the Party bearing such withholding tax under this Section 6.10(c). In addition, the Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) in connection with this Agreement.

(d) Assignment. If Provention assigns its rights and obligations hereunder to an Affiliate or Third Party in compliance with Section 13.3 and if such Affiliate or Third Party shall be required by Applicable Law to withhold any additional taxes from or in respect of any amount payable to MacroGenics under this Agreement solely as a result of such assignment by Provention, then any such amount payable under this Agreement shall be increased to take into account the additional taxes withheld as may be necessary so that, after making all required withholdings, MacroGenics receives an amount equal to the sum it would have received had no such assignment been made. The foregoing sentence shall not apply to any additional taxes withheld for which MacroGenics may obtain a foreign tax credit.

6.11 Records and Audit Rights. Provention will maintain, and cause its Affiliates and Sublicensees to maintain, complete and accurate books and records in sufficient detail to enable verification of the correctness of the payments due hereunder. MacroGenics may audit Provention’s and its Affiliates’ and Sublicensees’ relevant books and records in order to verify the aforesaid matters. Upon reasonable prior notice and during normal business hours, MacroGenics’ independent public accountants, subject to confidentiality obligations consistent with Article 8, shall have access to such books and records in order to conduct such a review or audit. The Parties shall reconcile any underpayment within sixty (60) days after the accountant delivers the results of the audit. If any audit performed under this Section 6.11 reveals an underpayment in excess of [****] percent ([****]%) in any Calendar Year, Provention shall reimburse MacroGenics for all amounts incurred in connection with such audit. MacroGenics may exercise its rights under this Section 6.11 only once every year per audited entity and only with reasonable prior notice to the audited entity. This Section 6.11 shall survive expiration or termination for a period of one (1) year.

ARTICLE 7
INTELLECTUAL PROPERTY RIGHTS

7.1 Ownership of Inventions. Each Party shall own any Inventions made solely by its (or its Affiliates’) own employees, agents, or independent contractors in the course of conducting its activities under this Agreement, together with all intellectual property rights therein (“Sole Inventions”). The Parties shall jointly own any Inventions for which the inventors include at least one employee, agent, or independent contractor of each Party (or its respective Affiliates) in the course of performing activities under this Agreement, together with all intellectual property rights therein (“Joint Inventions”); provided that, any Inventions that are not Covered by a Product Claim and are improvements to the DART Platform or Platform Patents (such Inventions, “MacroGenics Platform Inventions”) shall be treated as MacroGenics’ Sole Inventions and shall not constitute “Joint Inventions” or Provention’s “Sole Inventions” for purposes of this Agreement but shall be deemed included in the license granted to Provention pursuant to Section 2.1(ii) and any Inventions that are Covered by a Product Claim shall be deemed included in the license granted to Provention pursuant to Section 2.1(i); provided further, Provention hereby assigns, and agrees to assign to MacroGenics, all of its and Provention Group’s right, title and interest in MacroGenics Platform Inventions, together with all intellectual property rights in the foregoing. Inventorship shall be determined in accordance with U.S. patent laws. Subject to any licenses granted under this Agreement, each Party will have the right to practice and Exploit any Joint Inventions without the duty of accounting to any other Party or seeking consent (for licensing, assigning or otherwise exploiting Joint Inventions) from the other Party by reason of the joint ownership thereof; and each Party hereby waives any right such Party may have under the laws of any jurisdiction to require any such approval or accounting and, to the extent there are any Applicable Laws that prohibit such a waiver, each Party will be deemed to have so consented. In furtherance thereof, at the reasonable written request of a Party, the other Party will in writing grant such consents and confirm that no such accounting is required to effect the foregoing regarding Joint Inventions.

7.2 Disclosure of Inventions. Provention shall promptly disclose to MacroGenics any Invention that relates to the Compound or Products or DART^® Molecules and/or the Manufacture of DART^® Molecules generally. With respect to any Joint Invention, each Party shall promptly disclose to the other Party any invention disclosures, or other similar documents, submitted to it by its employees, agents or independent contractors describing the Joint Invention, and all Information relating to such Invention to the extent necessary for the use of such Invention in the Development or Commercialization of the Compound or the Products in the Field and, to the extent patentable, for the preparation, filing and maintenance of any Patent with respect to such Invention.

7.3 Prosecution of Patents.

(a) MacroGenics Patents. As between the Parties, MacroGenics shall have the sole right and authority, to prepare, file, prosecute and maintain the MacroGenics Patents on a worldwide basis; provided that Provention shall have the right to direct MacroGenics to prepare, file, prosecute and maintain MacroGenics Patents in specified countries and/or regions at Provention’s expense, MacroGenics shall, during the Agreement Term, (i) keep Provention reasonably informed of the status of the MacroGenics Patents and provide Provention with copies of material communications from any patent authority in the Territory in connection therewith; (ii) provide Provention with drafts of all proposed material filings and correspondences to any patent authorities with respect to the MacroGenics Product Patents having at least one independent Product Claim for Provention’s review and comment prior to the submission of such proposed filings and correspondences. MacroGenics shall reasonably consider in good faith Provention’s comments prior to submitting such filings and correspondences and shall not unreasonably disregard any such comments. If MacroGenics determines in its discretion to abandon or not maintain any MacroGenics Patent(s) which Covers the Compound or Product in any country(ies) of the world, then MacroGenics shall provide Provention with written notice of such determination within such period of time reasonably necessary to allow Provention to request that MacroGenics continue to maintain and/or prosecute of such MacroGenics Patent (which notice from MacroGenics shall be given no later than thirty (30) days prior to any final deadline for any pending action or response that may be due with respect to such MacroGenics Patent(s) with the applicable patent authority). Upon receipt of any such request, MacroGenics shall continue to prosecute and maintain such MacroGenics Patent(s) in such country(ies) at Provention’s expense; provided, however, that MacroGenics shall not be required to continue to prosecute or maintain any such MacroGenics Patent(s) if, instead of prosecuting such patent application, MacroGenics instead files a divisional, continuation or continuation-in-part of such patent application to be prosecuted by MacroGenics, which divisional, continuation or continuation-in-part Covers the same or greater scope for the Compound or relevant Product as the MacroGenics Patent(s) proposed to be abandoned. Notwithstanding anything to the contrary in this Section 7.3(a), unless consented to by Provention in writing (such consent not to be unreasonably withheld, delayed or denied), MacroGenics shall prepare, file, prosecute and maintain the MacroGenics Patents that Cover the Compound or Product in the Major Markets at its sole expense throughout the Term.

(b) Provention Patents. Provention shall have the sole right and authority to prepare, file, prosecute and maintain the Provention Patents on a worldwide basis at its sole expense.

(c) Joint Patents. Except as otherwise provided in this Section 7.3(c), Provention shall have the primary right and authority to prepare, file, prosecute and maintain the Patent Rights included in the Joint Inventions (“Joint Patents”) on a worldwide basis at its own expense. Provention shall provide MacroGenics with a reasonable opportunity to review and comment on its efforts to prepare, file, prosecute and maintain Joint Patents, including by providing MacroGenics with a copy of material communications from any patent authority regarding any Joint Patent, and by providing drafts of any material filings or responses to be made in advance of submitting such filings or responses. Provention shall consider MacroGenics’ comments regarding such communications and drafts in good faith and shall not unreasonably disregard any such comments. If Provention determines in its discretion to abandon or not maintain any Joint Patent(s) in any country(ies) of the world, then Provention shall provide MacroGenics with written notice of such determination within such period of time reasonably necessary to allow MacroGenics to determine its interest in such Joint Patent(s) (which notice from Provention shall be given no later than sixty (60) days prior to any final deadline for any pending action or response that may be due with respect to such Joint Patent(s) with the applicable patent authority). If MacroGenics provides written notice expressing its interest in obtaining such Joint Patent(s), Provention shall, free of charge, assign and transfer to MacroGenics the ownership of, and interest in, such Joint Patent(s) in such country(ies), at MacroGenics’ own expense, and Provention shall cooperate with MacroGenics for assignment and transfer of such Joint Patent(s) in such country. Thereafter, all such assigned and transferred Patents will be deemed MacroGenics Platform Patents and MacroGenics shall have the sole right to prepare, file, prosecute and maintain such Patent Rights as set forth in Section 7.3(a).

(d) Cooperation in Prosecution. Each Party shall provide the other Party all reasonable assistance and cooperation in the Patent prosecution efforts provided above in this Section 7.3, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution, as well as further actions as set forth below. Such assistance and cooperation shall include making a Party’s inventors and other scientific advisors reasonably available to assist the other Party’s prosecution efforts.

(i) The Parties shall respectively prepare, file, maintain and prosecute the MacroGenics Patents, the Provention Patents and the Joint Patents as set forth in this Section 7.3. As used herein, “prosecution” of such Patents shall include all communication and other interaction with any patent office or patent authority having jurisdiction over a patent application in connection with pre-grant proceedings.

(ii) All communications between the Parties relating to the preparation, filing, prosecution or maintenance of the MacroGenics Patents, the Provention Patents and the Joint Patents, including copies of any draft or final documents or any communications received from or sent to patent offices or patenting authorities with respect to such Patents, shall be considered Confidential Information of the Party Controlling the relevant Patent and subject to the confidentiality provisions of Article 8.

7.4 Patent Term Extensions in the Territory. Provention, in consultation with MacroGenics, shall decide for which, if any, of MacroGenics Product Patents, Joint Patents and Provention Patents the Parties should seek patent term extensions, supplemental protection certificates or their equivalents (each, a “Patent Extension” and collectively, “Patent Extensions”) in the Territory. MacroGenics, in the case of a MacroGenics Product Patent, and Provention, in the case of a Provention Patent or Joint Patent, shall act with reasonable promptness in light of the developmental stage of the Products to apply for any such Patent Extension. In the event that the opportunity to seek a patent extension, supplemental protection certificate or an equivalent becomes available for a Product in the Territory based on a MacroGenics Platform Patent (“Platform Patent Extension”), MacroGenics shall have the sole right to seek such Platform Patent Extension if there are no other Patent Rights for which a Patent Extension could reasonably be sought. In the event that Provention does not intend to seek Patent Extensions for any MacroGenics Product Patent or Joint Patent, it shall so inform MacroGenics in writing in sufficient time to permit MacroGenics to seek a Patent Extension on any such MacroGenics Product Patent or Joint Patent. The Party that does not apply for a Patent Extension hereunder will cooperate fully with the other Party in making such filings or actions, including making available all required regulatory data and Information and executing any required authorizations, to enable the other Party to apply for such Patent Term Extension. All expenses incurred in connection with activities of each Party with respect to the Patent Right(s) for which such Party seeks Patent Extension pursuant to this Section 7.4 shall be entirely borne by such Party.

7.5 Infringement of Patents by Third Parties.

(a) Notification. Each Party shall promptly notify the other Party in writing of any existing, alleged or threatened infringement of any MacroGenics Patent, Joint Patent or Provention Patent of which it becomes aware, and shall provide all Information in such Party’s possession or control demonstrating such infringement.

(b) Infringement of MacroGenics Product Patents or Joint Patents.

(i) Provention, subject to Section 7.5(b)(ii) through Section 7.5(b)(vii) and the rights of any Third Party licensor of MacroGenics Product Patents, shall have the first right, but not the obligation, to bring an appropriate suit or other action against any Third Party engaged in any existing, alleged or threatened infringement of any MacroGenics Product Patent or Joint Patent that has claims that solely and specifically Cover the Exploitation of the Compound or Products.

(ii) Provention shall notify MacroGenics of its election to take any action in accordance with Section 7.5(b)(i) within the earlier of: (A) ninety (90) days after the first notice under Section 7.5(a); or (B) fifteen (15) days before any time limit set forth in Applicable Law or regulation, including the time limits set forth under the Hatch-Waxman Act. Notwithstanding the foregoing sentence, Provention shall not initiate any such suit or take such other action with respect to any MacroGenics Product Patent or Joint Patent without first consulting with MacroGenics and giving good faith consideration to any reasonable objection from MacroGenics regarding Provention’s proposed course of action and shall enforce the MacroGenics Product Patent Rights consistent with MacroGenics’ obligations and rights under any Third Party Licenses. MacroGenics shall cooperate in the prosecution of any suit under this Section 7.5 as may be reasonably requested by Provention. In the event that Provention elects not to initiate a lawsuit or take other reasonable action with respect to an infringement described in Section 7.5(b)(i), MacroGenics shall have the right, but not the obligation, to initiate such suit or take such other action, after providing thirty (30) days (or five (5) days in the event there is a time limit) notice to Provention and giving good faith consideration to Provention’s reason(s) for not initiating a suit or taking other action.

(iii) If one Party elects to bring suit or take action under this Section 7.5(b) against an infringement, then the other Party shall have the right, prior to commencement of the suit or action, to join any such suit or action.

(iv) Each Party shall provide to the Party enforcing any such rights under this Section 7.5(b) reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such action as a party plaintiff if required by Applicable Law to pursue such action. The enforcing Party shall keep the other Party regularly informed of the status and progress of such enforcement efforts, shall reasonably consider the other Party’s comments on any such efforts, and shall consult the other Party in any important aspects of such enforcement, including determination of material litigation strategy and filing of important papers to the competent court.

(v) Each Party shall bear all of its own internal costs incurred in connection with its activities under this Section 7.5(b).

(vi) The Party not bringing an action with respect to infringement in the Territory under this Section 7.5(b) shall be entitled to separate representation in such matter by counsel of its own choice and at its own expense, but such Party shall at all times cooperate fully with the Party bringing such action.

(vii) Neither Party shall settle any claim, suit or action that it brought under this Section 7.5 involving MacroGenics Product Patents or Joint Patents without the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or conditioned.

(c) Infringement of Provention Patents. For any and all infringement of any Provention Patent, Provention shall have the sole and exclusive right, but not the obligation, to bring, at Provention’s expense and in its sole control, an appropriate suit or other action against any person or entity engaged in such infringement of the Provention Patent.

(d) Infringement of Other MacroGenics Patents. For any and all infringement of any MacroGenics Patent other than a MacroGenics Product Patent (a “Platform Patent”), MacroGenics shall have the sole and exclusive right, but not the obligation, to bring, at MacroGenics’ expense and in its sole control, an appropriate suit or other action against any person or entity engaged in such infringement of such MacroGenics Patent; provided that if a Platform Patent is reasonably likely to have the effect of blocking Biosimilar Competition, MacroGenics shall have the obligation, at Provention’s reasonable request, to bring a claim or suit against any person or entity engaged or alleged to be engaged in infringement of the subject Platform Patent.

(e) Allocation of Proceeds. If either Party recovers monetary damages from any Third Party in a suit or action brought under Section 7.5(b) or Section 7.7(a) or any royalties, milestones or other payments from a license agreement with a Third Party related to any alleged infringement related to a Product, whether such damages or royalties result from the infringement of MacroGenics Product Patents or Joint Patents, such recovery (“Infringement Recovery”) shall be allocated first to the reimbursement of any expenses incurred by the Parties in such litigation, action or license negotiations, and any remaining amounts shall be allocated as follows:

(i) with respect to suits or actions brought by Provention, if the recovery award is based on reasonable royalty payments, such remaining amount shall be deemed Qualified Consideration if the award is based on lost profits, MacroGenics shall receive an amount equal to the royalty that would be payable, pursuant to Section 6.3 on the corresponding amount (as determined by the court) of Net Sales represented by such loss profits of the relevant Product(s); and

(ii) with respect to all suits or actions brought by MacroGenics, the recovery shall be retained by MacroGenics.

7.6 Infringement of Third Party Rights in the Territory.

(a) Notice. If any Product used or sold by either Party, its Affiliates, or sublicensees becomes the subject of a Third Party’s claim or assertion of infringement of a Patent Right granted by a jurisdiction within the Territory, the Party first having notice of the claim or assertion shall promptly notify the other Party.

(b) Defense. Provention shall have the first right, but not the obligation, to defend against any such Third Party claim or assertion of infringement of a Patent Right as described in Section 7.6(a) above, at Provention’s expense. If Provention does not commence actions to defend such claim within thirty (30) days after it receives notice thereof (or within thirty (30) days after it should have given notice thereof to MacroGenics as required by Section 7.6(a)), then to the extent allowed by Applicable Law, MacroGenics shall have the right, but not the obligation, to control the defense of such claim by counsel of its choice, at MacroGenics’ expense. The non-defending Party shall reasonably cooperate with the Party conducting the defense of the claim or assertion, including if required to conduct such defense, furnishing a power of attorney.

(c) Settlement; Licenses. Neither Party shall enter into any settlement of any claim described in this Section 7.6 that affects the other Party’s rights or interests without such other Party’s written consent, such consent not to be unreasonably withheld, delayed or conditioned. Each Party shall have the right to decline to defend or to tender defense of any claim described in this Section 7.6 upon reasonable notice to the other Party, including if the other Party fails to agree to a settlement that the declining Party proposes. In the event that it is determined by any court of competent jurisdiction that any Exploitation of a Product, conducted in accordance with the terms and conditions of this Agreement, infringes, or Provention determines reasonably and in good faith that such activities are likely to infringe, any Patent Right, copyright, trademark, data exclusivity right or trade secret right arising under Applicable Law of any Third Party, Provention shall use Commercially Reasonable Efforts to, at its expense: (i) procure a license from such Third Party authorizing Provention to continue to conduct such activity (in which case the royalties payable thereunder may be deducted from royalties otherwise due to MacroGenics hereunder to the extent permitted by Sections 6.4(b) and 6.5 hereof); or (ii) modify such activity so as to render it non-infringing. In the event that Provention decides that neither of the foregoing alternatives is reasonably available or commercially feasible, Provention may, at its discretion, terminate this Agreement in accordance with Section 10.2.

7.7 Patent Oppositions and Other Proceedings.

(a) Third-Party Patent Rights. If either Party desires to bring an opposition, action for declaratory judgment, nullity action, interference, declaration for non-infringement, reexamination or other attack upon the validity, title or enforceability of a Patent Right owned or controlled by a Third Party and having one or more claims that Cover the Compound or Product, or the use, sale, offer for sale or importation of the Compound or Product (except insofar as such action is a counterclaim to or defense of, or accompanies a defense of, a Third Party’s claim or assertion of infringement under Section 7.6, in which case the provisions of Section 7.6 shall govern), such Party shall so notify the other Party and the Parties shall promptly confer to determine whether to bring such action or the manner in which to settle such action. Provention shall have the exclusive right, but not the obligation, to bring, at its own expense and in its sole control, such action in the Territory. If Provention does not bring such an action in the Territory, within ninety (90) days of notification thereof pursuant to this Section 7.7(a) (or earlier, if required by the nature of the proceeding), MacroGenics shall have the right, but not the obligation, to bring, at MacroGenics’ own expense, such action. The Party not bringing an action under this Section 7.7(a) shall be entitled to separate representation in such proceeding by counsel of its own choice and at its own expense, and shall cooperate fully with the Party bringing such action. Any awards or amounts received in bringing any such action shall be first allocated to reimburse the initiating Party’s expenses in such action, and any remaining amounts shall be allocated between the Parties as provided in Section 7.5(e).

(b) Parties’ Patent Rights. If any MacroGenics Product Patent or Joint Patent becomes the subject of any proceeding commenced by a Third Party within the Territory in connection with an opposition, reexamination request, action for declaratory judgment, nullity action, interference or other attack upon the validity, title or enforceability thereof (a “Third Party Patent Challenge”) (except insofar as such action is a counterclaim to or defense of, or accompanies a defense of, an action for infringement against a Third Party under Section 7.6, in which case the provisions of Section 7.6 shall govern), then the Party responsible for filing, preparing, prosecuting and maintaining such Patent as set forth in Section 7.3 hereof, shall control such defense at its own expense. The controlling Party shall permit the non-controlling Party to participate in the proceeding to the extent permissible under Applicable Law, and to be represented by its own counsel in such proceeding, at the non-controlling Party’s expense. If either Party decides that it does not wish to defend against such action, then the other Party shall have a backup right to assume defense of such Third Party action at its own expense. Any awards or amounts received in defending any such Third Party action shall be allocated between the Parties as provided in Section 7.5(e). MacroGenics shall have the sole discretion whether to defend and shall solely control any defense of a Platform Patent which is the subject of a Third Party Patent Challenge; provided that MacroGenics shall keep Provention reasonably informed regarding such enforcement and shall consider Provention’s comments regarding such enforcement in good faith.

ARTICLE 8
CONFIDENTIALITY; PUBLICATION

8.1 Non-Use and Non-Disclosure. During the Agreement Term and for seven (7) years thereafter, a Receiving Party shall (and shall require its Affiliates to): (a) maintain in confidence all Confidential Information of the Disclosing Party using not less than the efforts such Receiving Party uses to maintain in confidence its own confidential or proprietary Information of similar kind and value, (b) take all reasonable precautions not to disclose such Confidential Information of the Disclosing Party to Third Parties, without the Disclosing Party’s prior written consent, except for disclosures expressly permitted below and (c) not use such Confidential Information of the Disclosing Party for any other purpose other than for fulfilling its obligations or exercising its rights under this Agreement. Notwithstanding anything to the contrary in the foregoing, the obligations of confidentiality and non-use with respect to any trade secret within such Confidential Information shall survive such seven (7) year period for so long as such Confidential Information remains protected as a trade secret under Applicable Law.

8.2 Permitted Disclosure. Notwithstanding the obligation of non-use and non-disclosure set forth in Section 8.1, the Receiving Party may disclose Confidential Information of the Disclosing Party only to the extent such disclosure is reasonably necessary in the following instances:

(a) filing, prosecuting, maintaining, enforcing or defending Patents as permitted by this Agreement;

(b) as reasonably required in generating Regulatory Documentation and obtaining Regulatory Approvals;

(c) prosecuting or defending litigation, including responding to a subpoena in a Third Party litigation;

(d) complying with Applicable Law or court or administrative orders;

(e) complying with any obligation under this Agreement;

(f) in communications with existing or bona fide prospective acquirers, merger partners, financing sources, investment bankers, lenders or investors, and consultants and advisors of the Receiving Party in connection with transactions or bona fide prospective transactions with the foregoing, in each case on a “need-to-know” basis and under appropriate confidentiality provisions substantially equivalent to those of this Agreement; provided however, that the Receiving Party shall remain responsible for any violation of such confidentiality provisions by any Third Party receiving such Confidential Information; or

(g) to its Affiliates, sublicensees or prospective sublicensees, subcontractors or prospective subcontractors, consultants, agents advisors and other Third Parties on a “need-to-know” basis in order for the Receiving Party to exercise its rights or fulfill its obligations under this Agreement, each of whom prior to disclosure must be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than those set forth in this Article 8; provided however, that, in each of the above situations, the Receiving Party shall remain responsible for any failure by any person or entity who receives Confidential Information pursuant to this Section 8.2(g) to treat such Confidential Information as required under this Article 8.

If and whenever any Confidential Information is disclosed in accordance with this Section 8.2, such disclosure shall not cause any such information to cease to be Confidential Information except to the extent that such disclosure results in a public disclosure of such information (other than by breach of this Agreement). Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to (i) Sections 8.2(b), 8.2(c) or 8.2(d), it will, except where impracticable or not legally permitted, give reasonable advance notice to the other Party of such disclosure and (ii) Sections 8.2(a) through 8.2(e), it will use not less than the same efforts to secure confidential treatment of such information as it would to protect its own confidential information from disclosure.

8.3 Publicity.

(a) Attached as Exhibit G is a copy of the press release to be issued by Provention in connection with this Agreement. Except as set forth in the previous sentence or as required to comply with Applicable Law or as set forth in Section 8.3(b), each Party agrees not to issue any other press release or other public statement disclosing other information relating to this Agreement or the transactions contemplated hereby without the prior written consent of the other Party, such consent not to be unreasonably withheld, delayed or conditioned.

(b) The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding the Compound and Products and other activities in connection with this Agreement that may include information that is not otherwise permitted to be disclosed under this Article 8, and that may be beyond what is required by Applicable Law, but in each case consistent with the need to keep investors informed regarding such Party’s business in accordance with customary investor relations, and each Party may request the right to make such disclosures from time to time. Such disclosures may include achievement of milestones, significant events in the Development and regulatory process, Commercialization activities and the like. Except for the initial press release(s) described in Section 8.3(a), whenever a Party (the “Requesting Party”) elects to make any such public disclosure, it shall first notify the other Party (the “Cooperating Party”) of such planned press release or public announcement and provide a draft for review at least three (3) Business Days in advance of issuing such press release or making such public announcement (or, with respect to press releases and public announcements that are required by Applicable Law, or by regulation or rule of any public stock exchange (including NASDAQ), with as much advance notice as reasonably practicable under the circumstances if it is not possible to provide notice at least three (3) Business Days in advance). The Requesting Party and Cooperating Party will discuss such proposed public disclosure in good faith. Unless otherwise permitted pursuant to Section 8.4 or required by Applicable Law, or by regulation or rule of any public stock exchange (including NASDAQ), the Requesting Party will not issue such press release or make such public announcement without the prior written consent of the Cooperating Party, not to be unreasonably withheld, conditioned or delayed, provided that a Party may issue such press release or make such public announcement if: (i) the contents of such press release or public announcement have previously been made public other than through a breach of this Agreement by the Requesting Party, (ii) such press release or public announcement does not materially differ from the previously issued press release or other publicly available information, and (iii) the Requesting Party notifies the Cooperating Party reasonably in advance of issuance. The principles to be observed in such disclosures shall include accuracy, compliance with Applicable Law and regulatory guidance documents, reasonable sensitivity to potential negative reactions of the FDA (and its foreign counterparts), the need to protect competitively sensitive information regarding the Compound and Products and the need to keep investors informed regarding the Requesting Party’s business.

8.4 Securities Filings. Notwithstanding anything to the contrary in this Article 8, in the event either Party seeks to file with the U.S. Securities and Exchange Commission or the securities regulators of any state or other jurisdiction a registration statement or any other disclosure document that describes or refers to the terms and conditions of this Agreement or any related agreements between the Parties, or requires the filing of this Agreement as an exhibit to such registration, statement or disclosure document, such Party shall, to the extent practicable, notify the other Party of such intention and shall provide the other Party with a copy of relevant portions of the proposed filing within a reasonable time prior to the filing thereof such that the other Party shall have the opportunity to comment on such filing (which comments the filing Party shall reasonably consider in good faith); provided that, no notice or comment period shall be required under this Section 8.4 if the description of or reference to this Agreement or any related agreement between the Parties contained in the proposed filing has been included in any previous filing made by either Party in accordance with this Section 8.4 or otherwise approved by the other Party. Each Party acknowledges that the other Party may be required by securities regulators, including the U.S. Securities and Exchange Commission, or advised by such other Party’s outside counsel that the financial terms, including the milestone amounts and/or royalty rates must be included in such filings.

8.5 Relationship to Confidentiality Agreement. This Agreement supersedes the Mutual Confidentiality Agreement between MacroGenics and Provention, effective as of August 8, 2017 (the “Prior CDA”); provided however, that all “Confidential Information” disclosed or received by the Parties and their Affiliates thereunder shall be deemed Confidential Information hereunder and shall be subject to the terms and conditions of this Agreement.

8.6 Equitable Relief. Given the nature of the Confidential Information and the competitive damage that could result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages may not be a sufficient remedy for any breach of this Article 8. In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 8.

8.7 Publications. Provention shall have the sole right to publish results of all Clinical Studies conducted with respect to the Compound or a Product; provided however, MacroGenics as the non-publishing Party (the “Reviewing Party”) shall have the right to review all proposed publications of Provention (the “Publishing Party”) prior to submission of each publication, for the purposes reviewing and commenting on the subject matter of such publication and of identifying any relevant intellectual property or Confidential Information of the Reviewing Party. Publishing Party shall provide Reviewing Party with a copy of the applicable proposed abstract, manuscript, or presentation no less than thirty (30) days (fifteen (15) days in the case of abstracts) prior to its intended submission for publication. Reviewing Party shall respond in writing promptly and in no event later than thirty (30) days (fifteen (15) days in the case of abstracts) after receipt of the proposed material with any comments or concerns regarding the scientific integrity or other aspects of the subject matter of the proposed publication and any concerns regarding patentability or protection of Reviewing Party’s Confidential Information. The Publishing Party will consider any comments and concerns expressed by the Reviewing Party regarding the subject matter of a proposed publication in good faith. In the event of concern over patent protection, Publishing Party agrees not to submit such publication or to make such presentation that contains such information until Reviewing Party is given a reasonable period of time, and in no event less than thirty (30) days, to seek patent protection for any material in such publication or presentation which it believes is patentable, unless Publishing Party reasonably determines that publication of such information is required by Applicable Law. Subject to Section 8.2, any Confidential Information of Reviewing Party shall, if requested by Reviewing Party, be removed by Publishing Party from such publication or presentation.

8.8 Attorney-Client Privilege. Neither Party is waiving, nor shall be deemed to have waived or diminished, any of its attorney work product protections, attorney-client privileges or similar protections and privileges or the like as a result of disclosing information pursuant to this Agreement, or any of its Confidential Information (including Confidential Information related to pending or threatened litigation) to the Receiving Party, regardless of whether the Disclosing Party has asserted, or is or may be entitled to assert, such privileges and protections. The Parties: (a) share a common legal and commercial interest in such disclosure that is subject to such privileges and protections; (b) are or may become joint defendants in proceedings to which the information covered by such protections and privileges relates; (c) intend that such privileges and protections remain intact should either Party become subject to any actual or threatened proceeding to which the Disclosing Party’s Confidential Information covered by such protections and privileges relates; and (d) intend that after the Effective Date both the Receiving Party and the Disclosing Party shall have the right to assert such protections and privileges.

ARTICLE 9
REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1 Mutual Representations, Warranties and Covenants. Each of the Parties hereby represents and warrants to the other Party as of the Effective Date and, as applicable, hereinafter covenants that:

(a) It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all requisite power, authority, and legal right, and is free, to enter into this Agreement;

(b) The execution, delivery, and performance of this Agreement by such Party have been duly authorized by all necessary corporate action and do not conflict with any agreement, obligation, instrument, or understanding, oral or written, to which it is a party or by which it is bound, nor violate any Applicable Law or any order, writ, judgment, injunction, decree, determination, or award of any Governmental Authority presently in effect applicable to such Party;

(c) It is not aware of any government authorization, consent, approval, license, exemption of or filing or registration with any Governmental Authority under any Applicable Law, currently in effect, necessary for, or in connection with, the transactions contemplated by this Agreement or any other agreement or instrument executed in connection herewith, or for the performance by it of its obligations under this Agreement or such other agreements (save for Regulatory Approvals and similar authorizations from Governmental Authorities necessary for the Exploitation of the Compound and Products as contemplated hereunder), except as may be required to obtain clearance of this Agreement under the HSR Act;

(d) It is not under any obligation, contractual or otherwise, to any party that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the diligent and complete fulfillment of its obligations hereunder;

(e) This Agreement constitutes a legal, valid, and binding obligation of such representing Party and is enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity;

(f) There are no claims or investigations, pending or, to the knowledge of the representing Party, threatened against the representing Party or any of its Affiliates, at law or in equity, or before or by any Governmental Authority relating to the matters contemplated under this Agreement or that would materially adversely affect such representing Party’s ability to perform its obligations hereunder;

(g) Neither such representing Party, nor any of its Affiliates, or its or their employees, officers, subcontractors or consultants who have rendered or shall render services relating to the Compound or Product (i) has ever been debarred or is subject to debarment or convicted of a crime for which an entity or person could be debarred under 21 U.S.C. Section 335a or (ii) has ever been under indictment for a crime for which a person or entity could be debarred under said Section 335a; and

(h) The representing Party shall inform the other Party in writing promptly if during the Agreement Term it or any of its Affiliates, or its or their employees, officers, subcontractors or consultants who is rendering services related to the Compound or Product under this Agreement is debarred or is the subject of a conviction described in Section 306 of the FFDCA, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the representing Party’s knowledge, is threatened, relating to the debarment or conviction of the representing Party, any of its Affiliates or its or their employees, officers, subcontractors or consultants performing services hereunder.

9.2 Additional Representations and Warranties of MacroGenics. MacroGenics represents and warrants as of the Effective Date that:

(a) MacroGenics is the exclusive owner of all right, title and interest in, or is a licensee of, the MacroGenics Technology.

(b) MacroGenics is entitled to grant the rights and licenses granted to Provention under this Agreement, and is not currently bound by any agreement with any Third Party, or by any outstanding order, judgment, or decree of any court or administrative agency, that restricts it from granting to Provention the rights and licenses as set forth in this Agreement.

(c) MacroGenics has complied in all respects with and is not in breach, violation or noncompliance of any Applicable Laws with respect to its ownership, use, or Manufacture of the Product.

(d) MacroGenics has made timely payment of any filing, registration, examination, maintenance and renewal fees due with respect to the MacroGenics Patents, except where the failure to do so does not have a material adverse effect with respect to the applicable MacroGenics Patents.

(e) To the knowledge of MacroGenics, the Exploitation of the Compound or the Products in the manner contemplated by this Agreement in the Field in the Territory as of the Effective Date does not infringe any Valid Claim of a Third Party. To the knowledge of MacroGenics, no Third Party is infringing any MacroGenics Patents in the Territory. MacroGenics has not received any written notice from any Third Party asserting that any of the MacroGenics Patents in the Territory are invalid, unenforceable, or not infringed. MacroGenics has not provided any Third Party written notice that such Third Party infringes or has infringed the MacroGenics Patents or misappropriated or used, without authorization, the MacroGenics Know-How. MacroGenics has not received any notice of infringement of any Patent Rights owned by any Third Party that would prevent Provention from Exploiting the Compound or the Products in the Field in the Territory.

(f) Each of the Third Party Licenses identified on Exhibit D remains in full force and effect and (i) MacroGenics and, (ii) to MacroGenics’ knowledge, each counterparty to such Third Party Licenses, are each in compliance in all material respects with the terms of the applicable Third Party Licenses (including any applicable diligence requirements), and all necessary consents, approvals, and authorizations under such Third Party Licenses required to be obtained by MacroGenics in order to enter into this Agreement have been obtained. MacroGenics shall comply in all material respects with its obligations under each Third Party License identified on Exhibit D, shall not terminate or waive any breach of any such Third Party License in a manner that would undermine Provention’s ability to perform its obligations or exercise its rights under this Agreement and, except as would not reasonably be expected to result in the termination, or material limitation, restriction or adverse change, in the rights granted to Provention by the terms of this Agreement, MacroGenics shall at all times enforce all of its rights under such Third Party Licenses.

(g) Schedule 9.2(g) lists all licenses, sublicenses and other agreements to which MacroGenics or any of its Affiliates is a party and pursuant to which any Third Party grants to MacroGenics or any of its Affiliates (i) any license or other right to Exploit the Compound or the Products, (ii) any covenant not to assert/sue or other immunity from suit under any intellectual property rights Covering the Compound or the Product, (iii) any ownership right or title, whether actual or contingent, to any intellectual property rights Covering the Compound or Product, or (iv) an option or right of first refusal relating to any intellectual property rights Covering the Exploitation of the Compound or Products, in each case, excluding any grant to MacroGenics or any of its Affiliates with respect to intellectual property rights Covering the DART Platform and not specifically Covering the Compound or Product (collectively, “Inbound Licenses”). Schedule 9.2(g) also identifies all Inbound Licenses requiring MacroGenics or any of its Affiliates to license, assign or otherwise grant rights to any Third Party for any additions, modifications or improvements made by or for MacroGenics or its Affiliates to any MacroGenics Product Patents Covering the Compound or Product. MacroGenics has delivered or otherwise made available to Provention copies of all Inbound Licenses, and MacroGenics or its Affiliate, as applicable, is in compliance with (and, to the knowledge of MacroGenics, each other party to such Inbound Licenses are in compliance with) all material terms and conditions of all Inbound Licenses. Except as set forth on Schedule 9.2(g), neither MacroGenics nor any of its Affiliates is a party to (A) any license, sublicense or other agreement to which and pursuant to which any Third Party is granted any license or other right to make, have made, use, sell, have sold, offer for sale, import or otherwise distribute or Exploit the Compound or the Products, (B) any covenant not to assert/sue or other immunity from suit under or any other rights to, any MacroGenics Product Patents, (C) any ownership right or title, whether actual or contingent, to any MacroGenics Product Patents, or (D) an option or right of first refusal relating to any MacroGenics Product Patents.

(h) MacroGenics has taken reasonable and customary measures and precautions necessary to protect and maintain the confidentiality of the MacroGenics Know-How. During the last three (3) years, neither MacroGenics nor its Affiliate has received any written communication alleging any violation of Applicable Laws pertaining to the privacy and security of protected health information within any clinical data or regulatory materials related to the Compound or the Products.

(i) MacroGenics has materially complied with all Applicable Laws in its Exploitation of the Compound and Product.

(j) The Transferred Materials have been manufactured in compliance with all Applicable Laws including cGMP and have met all applicable specifications, except as would not materially adversely affect Provention’s ability to Exploit the Product. Neither MacroGenics nor any Third Party has received any written notices or correspondence from the FDA or any other Government Authority regarding the Transferred Materials.

(k) MacroGenics is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933 (the “Securities Act”), as amended. MacroGenics has substantial experience in evaluating and investing in securities in companies similar to Provention so that MacroGenics is capable of evaluating the merits and risks of MacroGenics’s investment in Provention (pursuant to the Warrant) and has the capacity to protect MacroGenics’s own interests. MacroGenics is acquiring the Warrant (and the shares issuable upon exercise of this Warrant) for investment for MacroGenics’ own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. MacroGenics understands that the Warrant (and the shares issuable upon exercise of the Warrant) have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of MacroGenics’ representations as expressed herein and in the Warrant.

9.3 Provention Stock Representation and Warranty. Provention represents and warrants to MacroGenics that: The authorized capital stock of Provention consists of (i) 50,000,000 shares of common stock, par value $0.0001 per share (“Provention Common Stock”), 10,000,000 of which are issued and outstanding and (ii) 25,000,000 shares of preferred stock, $0.0001 par value, of which 13,000,000 shares have been designated as Series A Preferred Stock (“Provention Series A Preferred Stock”), of which 11,381,999 shares of Provention Series A Preferred Stock are issued and outstanding. Provention has reserved 3,869,424 shares of Provention Common Stock for issuance to officers, directors, employees and consultants of Provention pursuant to its 2017 Equity Incentive Plan duly adopted by the board of directors of Provention and approved by the stockholders of Provention, of which 2,656,435 have been issued to employees and consultants of Provention. Provention has reserved 558,740 shares of Provention Series A Preferred Stock for issuance pursuant to that certain Warrant, dated as of April 25, 2017, in favor of MDB Capital Group, LLC. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) (“Voting Debt”) of Provention issued and outstanding. Except as set forth above, there are no options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments of any kind relating to the issued or unissued capital stock of Provention, obligating Provention to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, Provention or securities convertible into or exchangeable for such shares or equity interests, or obligating Provention to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment.

9.4 Certain Compliance Matters.

(a) Each Party will materially comply with all Applicable Laws with respect to its obligations under this Agreement. Notwithstanding anything to the contrary in this Agreement, neither Party shall be required to undertake any activity or obligation under this Agreement which such Party has reason to believe may violate any Applicable Laws; provided however, that a Party which so believes shall promptly inform the other Party of such belief.

(b) Neither Party nor its Affiliates will make any payment, either directly or indirectly, of money or other assets, including the compensation such Party derives from this Agreement (collectively, a “Payment”), to government or political party officials, officials of International Public Organizations, candidates for public office, or representatives of other businesses or persons acting on behalf of any of the foregoing (collectively, “Officials”) or other individuals where such Payment would constitute violation of any Applicable Law, including the FCPA and the UKBA. In addition, regardless of legality, neither Party nor its Affiliates will make any Payment either directly or indirectly to Officials or other individuals if such Payment is for the purpose of improperly influencing decisions or actions to secure a business advantage, including with respect to the subject matter of this Agreement. Each Party shall have necessary procedures in place to prevent bribery and corrupt conduct by itself and each of its Affiliates and subcontractors. All activities will be conducted in compliance with the FCA and the AKA.

9.5 No Other Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 9, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, INCLUDING ANY EXPRESS OR IMPLIED WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-INFRINGEMENT OR AS TO THE VALIDITY OF ANY PATENT RIGHTS.

ARTICLE 10
TERM AND TERMINATION

10.1 Term. This Agreement shall become effective as of the Effective Date and, unless earlier terminated pursuant to this Article 10, shall continue in full force and effect until the date of expiration of all payment obligations under this Agreement (the “Agreement Term”).

10.2 Unilateral Termination by Provention. Provention shall have the right to terminate this Agreement at any time after the Effective Date, for any or no reason, as follows: (a) if such termination is effective prior to the First Commercial Sale of a Product anywhere in the Territory, upon providing ninety (90) days’ prior written notice to MacroGenics; and (b) if such termination is effective after the First Commercial Sale of a Product anywhere in the Territory, upon providing one hundred eighty (180) days’ prior written notice to MacroGenics (each, a “Voluntary Termination”). Notwithstanding the foregoing, in the event that Provention provides notice of termination pursuant to subsections (a) or (b), MacroGenics may, in its sole discretion, reduce the ninety (90) day or one hundred eighty (180) day notice period, respectively, by written notice to Provention.

10.3 Termination for Material Breach. Either Party (the “Terminating Party”) may terminate this Agreement in its entirety, or on a country-by-country and Product-by-Product basis, in the event the other Party (the “Breaching Party”) has materially breached this Agreement, and such material breach has not been cured within sixty (60) days after receipt of written notice of such breach by the Breaching Party from the Terminating Party (the “Cure Period”). The written notice describing the alleged material breach shall provide sufficient detail to put the Breaching Party on notice of such material breach. Any termination of this Agreement pursuant to this Section 10.3 shall become effective at the end of the Cure Period, unless the Breaching Party has cured any such material breach prior to the expiration of such Cure Period; provided that in the event a claim of material breach is being contested diligently and in good faith by appropriate proceedings hereunder, any termination pursuant to this Section shall not become effective unless and until such material breach has been established in such proceedings and, in the event that, following such establishment, a cure may then be accomplished by the payment of money or the taking of certain actions, such payment or actions are not paid or taken within sixty (60) days of the conclusion of such proceedings. The right of either Party to terminate this Agreement as provided in this Section 10.3 shall not be affected in any way by such Party’s waiver of or failure to take action with respect to any previous breach under this Agreement.

10.4 MacroGenics may terminate this Agreement with respect to the Compound or a Product (or this Agreement in its entirety if such Compound or Product is the only Compound or Product for which this Agreement is applicable), if Provention directly or indirectly disputes, or assists any Third Party to dispute, the validity of any granted Patent within the MacroGenics Patents in a litigation or other court proceeding with respect to such Compound or Product; provided however, MacroGenics acknowledges and agrees that nothing in this Section 10.4 prevents Provention from taking any of the actions referred to in this Section 10.4.

10.5 Termination for Bankruptcy.

(a) Either Party may terminate this Agreement in its entirety upon providing written notice to the other Party on or after the time that such other Party makes a general assignment for the benefit of creditors, files an insolvency petition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets, commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors, or becomes a party to any proceeding or action of the type described above (each, an “Insolvency Event”), and such proceeding or action remains un-dismissed or un-stayed for a period of more than ninety (90) days.

(b) All rights and licenses granted under or pursuant to this Agreement, including, for the avoidance of doubt, the licenses granted pursuant to Sections 2.1 and 2.2, are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the U.S. Code and other similar laws in any jurisdiction outside the U.S. (collectively, the “Bankruptcy Laws”), licenses of rights to “intellectual property” as defined under the Bankruptcy Laws. If a case is commenced during the Agreement Term by or against a Party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided pursuant to such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee) shall perform all of the obligations in this Agreement intended to be performed by such Party. If a case is commenced during the Agreement Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected as provided for under the Bankruptcy Laws, and the non-bankrupt Party elects to retain its rights hereunder as provided for under the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the non-bankrupt Party copies of all Patent Rights and Information necessary for the non-bankrupt Party to prosecute, maintain and enjoy its rights under the terms of this Agreement. All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws. In particular, it is the intention and understanding of the Parties to this Agreement that the rights granted to the Parties under this Section 10.5 are essential to the Parties’ respective businesses and the Parties acknowledge that damages are not an adequate remedy.

10.6 Effects of Termination. All of the following effects of termination are in addition to the other rights and remedies that may be available to either of the Parties under this Agreement and shall not be construed to limit any such rights or remedies. In the event this Agreement is terminated (which, for clarity, will not include an expiration), then:

(a) Without limiting the effect that such termination shall have on any provisions of this Agreement, other than those provisions that this Agreement expressly provides shall survive such termination, all rights and licenses granted herein to Provention shall terminate, and Provention shall cease any and all Development, Manufacturing, and Commercialization activities with respect to the Products as soon as is reasonably practicable under Applicable Law; provided that with respect to any Clinical Study being conducted by Provention or its Affiliates as of the date the Agreement termination notice is delivered, Provention shall, as directed by MacroGenics and at Provention’s cost and expense, either (i) wind-down such Clinical Study and, as required for patient safety or applicable Law, complete such Clinical Study only with respect to those study subjects enrolled at the date of termination and otherwise cease enrollment and all other activities with respect to such Clinical Study and for the purpose of such wind-down activities, and at MacroGenics’ option, the termination notice period may be extended by an additional ninety (90) days; or (ii) cooperate with MacroGenics to facilitate the orderly transfer of the conduct of such Clinical Trial to MacroGenics as soon as reasonably practicable after the effective date of termination;

(b) All payment obligations hereunder shall terminate, other than those that are accrued and unpaid as of the effective date of such termination or otherwise expressly set forth in this Section 10.6(a);

(c) MacroGenics shall thereafter have all rights and materials previously licensed to Provention hereunder to Develop, Manufacture and Commercialize the Products at MacroGenics’ discretion;

(d) Unless this Agreement is terminated by Provention pursuant to Section 10.3 or 10.5, Provention hereby grants to MacroGenics, effective as of the effective date of such termination, a limited, non-exclusive, transferable, fully paid-up, royalty-free, sublicensable license in the Field in the Territory, under the Provention Technology created or acquired during the Agreement Term and Provention’s interest in Joint Inventions and Joint Patents, solely to Exploit the Compound and Products;

(e) Unless this Agreement is terminated by Provention pursuant to Section 10.3 or 10.5, at MacroGenics’ written request, Provention shall grant to MacroGenics, effective as of the date of such request, a limited, exclusive, transferable royalty bearing license to use any trademarks owned or Controlled by Provention which are directly related to the Commercialization of Products in the Territory (excluding any Provention house marks);

(f) Unless this Agreement is terminated by Provention pursuant to Section 10.3 or 10.5, at MacroGenics’ written request, Provention shall transfer to MacroGenics, or at MacroGenics direction, destroy (and certify such destruction in writing) (i) all materials, documents and know-how licensed and/or provided to Provention by MacroGenics pursuant to this Agreement and (ii) any inventory of any Product on hand at the time of such termination or in the process of Manufacturing. Provention shall reimburse MacroGenics for any costs MacroGenics incurs in connection with any such transfer;

(g) Unless this Agreement is terminated by Provention pursuant to Section 10.3 or 10.5, at MacroGenics’ written request, Provention shall transfer to MacroGenics any and all Regulatory Documentation directly related to any Products and, upon MacroGenics’ request, shall make available to MacroGenics any other relevant Information reasonably related to such Regulatory Documentation and provide a right of reference to applicable Regulatory Documentation to the extent necessary for MacroGenics or its licensees to Develop and Commercialize Products; and

(h) The step-in rights granted to MacroGenics with respect to Joint Patents under Sections 7.3(d), 7.5(b) and 7.7(b) shall remain in effect, and MacroGenics shall have to the right to enforce the Provention Patents, solely to the extent a license is granted under this Section 10.6, against Third Party infringers.

10.7 Remedies. Except as otherwise explicitly set forth in this Agreement, termination or expiration of this Agreement shall not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration, nor prejudice either Party’s right to obtain performance of any obligation. Each Party shall be free, pursuant to Article 11, to seek, without restriction as to the number of times it may seek, damages, costs and remedies that may be available to it under Applicable Law or in equity and shall be entitled to offset the amount of any damages and costs obtained against the other Party in a final determination under Section 11.3, against any amounts otherwise due to such other Party under this Agreement.

10.8 Survival. In the event of termination or expiration of this Agreement, in addition to the provisions of this Agreement that continue in effect in accordance with their terms, the following provisions of this Agreement shall survive: 6.1, 6.7 – 6.10 (solely with respect to payment obligations that have accrued at the time of termination), 6.11, 7.1, 7.2, 8, 9.5, 10.6, 10.7, 10.8, 11, 12 and 13 and any other provisions of this Agreement that are necessary to interpret or effectuate the intent of the foregoing provisions. With respect to an expiration of the Agreement, all licenses granted to Provention hereunder shall continue in perpetuity.

ARTICLE 11
DISPUTE RESOLUTION

11.1 Exclusive Dispute Resolution Mechanism. The Parties agree that the procedures set forth in this Article 11 shall be the exclusive mechanism for resolving any Dispute between the Parties that may arise from time to time that is not resolved through good faith negotiation between the Parties.

11.2 Resolution by Executive Officers. Except as otherwise provided in this Article 11, in the event of any Dispute regarding the construction or interpretation of this Agreement or the rights, duties or liabilities of either Party hereunder, the Parties shall first attempt in good faith to resolve such Dispute by negotiation and consultation between themselves. In the event that such Dispute is not resolved on such basis within fifteen (15) Business Days (unless otherwise agreed by the Parties), either Party may, by written notice to the other Party, refer the Dispute to the Executive Officers for attempted resolution by good faith negotiation within thirty (30) Business Days after such notice is received (unless otherwise agreed by the Parties). Each Party may, in its discretion, seek resolution of any and all Disputes that are not resolved under this Section 11.2 in accordance with Section 11.3.

11.3 Disputes.

(a) JAMS. Any unresolved Dispute which was subject to Section 11.2 shall be resolved by arbitration administered by JAMS (the “Administrator”) in accordance with its then-effective International Arbitration Rules (the “Rules”), except to the extent any such Rule conflicts with the express provisions of this Section 11.3. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings provided in the Rules. The Arbitration shall be conducted by one neutral arbitrator selected in accordance with the Rules, provided that such individual shall not be a current or former employee or director, or a current stockholder, of either Party or any of their respective Affiliates (or any licensee or sublicensee of the rights granted to such Party under this Agreement). The arbitration and all associated discovery proceedings and communications shall be conducted in English, and the arbitration shall be held in New York, NY, USA. The Arbitrator shall render the Award within 30 days after the Arbitrator declares the Hearing closed, and the Award shall include a written statement describing the essential findings and conclusions on which the Award is based, including the calculation of any damages awarded. The Arbitrator will, in rendering his or her decision, apply the substantive law of the State of New York, excluding its conflicts of laws principles with the exception of Sections 5-1401 and 5-1402 of New York General Obligations Law. The Award rendered by the Arbitrator may be appealed by a Party pursuant to the JAMS Optional Arbitration Appeal Produced. Judgment may be entered upon an award by the Arbitrator in any court of competent jurisdiction. Each Party shall bear its own attorney’s fees, costs, and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrator.

(b) Court Actions. Nothing contained in this Agreement shall deny either Party the right to seek injunctive or other equitable relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing discussions between the Parties or any ongoing arbitration proceeding. In addition, either Party may bring an action in any court of competent jurisdiction to resolve disputes pertaining to the validity, construction, scope, enforceability, infringement or other violations of patent rights or other intellectual property rights, and no such claim shall be subject to arbitration pursuant to Section 11.3(a).

11.4 Confidentiality. Any and all activities conducted under this Article 11 shall be deemed Confidential Information of each of the Parties, and shall be subject to Article 8 above.

ARTICLE 12
INDEMNIFICATION

12.1 Indemnification by Provention. Provention hereby agrees to defend, indemnify and hold harmless MacroGenics and its Affiliates, and each of their respective directors, officers, employees, agents and representatives (each, a “MacroGenics Indemnitee”) from and against any and all claims, suits, actions, demands, liabilities, expenses and/or losses, including reasonable legal expenses and attorneys’ fees (collectively, the “Losses”), to which any MacroGenics Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party (each, a “Claim”), to the extent such Losses arise directly or indirectly out of: (a) the practice by Provention Group of any license granted to it under this Agreement; (b) the Exploitation of any Compound or Product by Provention Group; (c) the breach by Provention of this Agreement; or (d) the negligence, illegal conduct or willful act or omission of Provention Group, or any officer, director, employee, agent or representative thereof; except, with respect to each of clauses (a) through (d) above, to the extent such Losses arise directly or indirectly from the negligence, illegal conduct or willful act or omission of any MacroGenics Indemnitee or the breach by MacroGenics of this Agreement.

12.2 Indemnification by MacroGenics. MacroGenics hereby agrees to defend, indemnify and hold harmless Provention and its Affiliates and each of their respective directors, officers, employees, agents and representatives (each, a “Provention Indemnitee”) from and against any and all Losses to which any Provention Indemnitee may become subject as a result of any Claim to the extent such Losses arise directly or indirectly out of: (a) any Claims of misappropriation of any intellectual property rights based on the practice by the Provention Group of the Provention License to the extent arising out of the circumstances described in Schedule 12.2; (b) the Exploitation of any Compound or Product by MacroGenics or its Affiliate or its licensee (other than Provention Group); (c) the breach by MacroGenics of this Agreement; or (d) the negligence, illegal conduct, or willful act or omission of MacroGenics or its Affiliate or its licensee (other than Provention Group), or any officer, director, employee, agent or representative thereof; except, with respect to each of clauses (a) through (d) above, to the extent such Losses arise directly or indirectly from the negligence, illegal conduct or willful act or omission of any Provention Indemnitee or the breach by Provention of this Agreement.

12.3 Indemnification Procedures.

(a) Notice. Promptly after a MacroGenics Indemnitee or a Provention Indemnitee (each, an “Indemnitee”) receives notice of a pending or threatened Claim, such Indemnitee shall give written notice of the Claim to the Party from whom the Indemnitee is entitled to receive indemnification pursuant to Sections 12.1 or 12.2, as applicable (the “Indemnifying Party”). However, an Indemnitee’s delay in providing or failure to provide such notice shall not relieve the Indemnifying Party of its indemnification obligations under this Agreement, except to the extent it can demonstrate actual prejudice due to the delay or lack of notice.

(b) Defense. Upon receipt of notice under this Section 12.3 from the Indemnitee, the Indemnifying Party will have the duty to either compromise or defend against, at its own expense and by counsel (reasonably satisfactory to Indemnitee), such Claim. The Indemnifying Party will promptly (and in any event not more than twenty (20) days after receipt of the Indemnitee’s original notice) notify the Indemnitee in writing that it acknowledges its obligation (which acknowledgment shall not be deemed or construed as an admission of liability, either under this Article 12 or otherwise) to indemnify the Indemnitee with respect to the Claim pursuant to this Article 12 and of its intention to compromise or defend such Claim. Once the Indemnifying Party gives such notice to the Indemnitee, the Indemnifying Party is not liable to the Indemnitee for the fees of other counsel or any other expenses subsequently incurred by the Indemnitee in connection with such defense, other than the Indemnitee’s reasonable Third Party expenses related to its investigation and cooperation. As to all Claims as to which the Indemnifying Party has assumed control under this Section 12.3(b), the Indemnitee shall have the right to employ separate counsel and to participate in the defense of such Claim (as reasonably directed by the Indemnifying Party) at its own expense.

(c) Cooperation. The Indemnitee will cooperate fully with the Indemnifying Party and its legal representatives in the investigation and defense of any Claim. The Indemnifying Party shall keep the Indemnitee informed on a reasonable and timely basis as to the status of such Claim (to the extent the Indemnitee is not participating in the defense of such Claim) and conduct the defense of such Claim in a prudent manner.

(d) Settlement. If an Indemnifying Party assumes the defense of a Claim, no compromise or settlement of such Claim may be effected by the Indemnifying Party without the Indemnitee’s written consent (such consent not to be unreasonably withheld, delayed or conditioned), unless: (i) there is no finding or admission of any violation of law or any violation of the rights of any person or entity and no effect on any other claims that may be made against the Indemnitee; (ii) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party; and (iii) the Indemnitee’s rights under this Agreement are not adversely affected. If the Indemnifying Party fails to assume defense of a Claim within a reasonable time, the Indemnitee may settle such Claim on such terms as it deems appropriate with the consent of the Indemnifying Party (such consent not to be unreasonably withheld, delayed or conditioned), and the Indemnifying Party shall be obligated to indemnify the Indemnitee for such settlement as provided in this Article 12.

12.4 Insurance. Provention shall, at its own expense, procure and maintain, during the period commencing on the Effective Date through the period of Commercialization and for a period of five (5) years thereafter, insurance policies, including product liability insurance, adequate to cover its obligations hereunder and which are consistent with normal business practices of prudent companies similarly situated; provided however, that in no event shall such product liability insurance, from and after the commencement of the first Clinical Study of the Compound or Product by Provention, its Affiliates or sublicensees, be written in amounts less than Five Million Dollars ($5,000,000) per claim and annual aggregate. All such insurance shall include worldwide coverage. Prior to the initiation of any Clinical Study, Provention shall secure, and maintain in full force and effect, clinical trial insurance as required by Applicable Law in those territories where such Clinical Study shall be conducted. Upon request, Provention shall provide MacroGenics with a certificate of insurance evidencing the coverage required under this Section 12.4. Such insurance shall not be construed to create a limit of Provention’s liability with respect to its indemnification obligations under this Article 12. Provention shall provide MacroGenics with prompt written notice of any cancellation, non-renewal or material change in such insurance that could materially adversely affect the rights of MacroGenics hereunder, and shall provide such notice within thirty (30) days after any such cancellation, non-renewal or material change.

12.5 Limitation of Liability. EXCEPT TO THE EXTENT INCLUDED IN LOSSES RESULTING FROM A THIRD PARTY CLAIM FOR WHICH ONE PARTY IS OBLIGATED TO INDEMNIFY THE OTHER PARTY (OR AN INDEMNITEE OF SUCH OTHER PARTY) PURSUANT TO THIS ARTICLE 12 OR ANY BREACH OF ARTICLE 7 (INTELLECTUAL PROPERTY RIGHTS) OR ARTICLE 8 (CONFIDENTIALITY), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY (OR THE OTHER PARTY’S AFFILIATES OR SUBLICENSEES) IN CONNECTION WITH THIS AGREEMENT FOR LOST REVENUE, LOST PROFITS, LOST SAVINGS, LOSS OF USE, DAMAGE TO GOODWILL, OR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR INDIRECT DAMAGES UNDER ANY THEORY, INCLUDING CONTRACT, NEGLIGENCE, OR STRICT LIABILITY, EVEN IF THAT PARTY HAS BEEN PLACED ON NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 13
MISCELLANEOUS

13.1 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given on the date delivered, if delivered personally, or on the next Business Day after being sent by reputable overnight courier (with delivery tracking provided, signature required and delivery prepaid), in each case, to the Parties at the following addresses, or on the date sent and confirmed by e-mail to the address specified below (or at such other address for a Party as shall be specified by notice given in accordance with this Section 13.1).

(a)	If to Provention:

		Provention Bio, Inc.
		Email: apalmer@provention.com
		Attention: Ashleigh Palmer

	with copies to:

		Lowenstein Sandler LLP
		1251 Avenue of the Americas
		17^thFloor
		New York, NY 10020
		E-mail: mlerner@lowenstein.com; hweinstein@lowenstein.com
		Attention: Michael Lerner; Herschel Weinstein

(b)	If to MacroGenics:

		MacroGenics, Inc.
		9704 Medical Center Drive
		Rockville, MD 20850
		Attention: CEO

	with copies to:

		MacroGenics, Inc.
		9704 Medical Center Drive
		Rockville, MD 20850
		Attention: General Counsel

13.2 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware, without regard to conflict of law principles. The provisions of the United Nations Convention on Contracts for the International Sale of Goods the 1974 Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April 11, 1980 shall not apply to the Transaction Agreements or any subject matter hereof or thereof.

13.3 Assignment.

(a) Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other, except that a Party may make such an assignment without the other Party’s consent to an Affiliate or to a successor to substantially all of the business of such Party to which this Agreement relates, whether in a merger, sale of stock, sale of assets or other transaction. Any successor or assignee of rights and/or obligations permitted hereunder shall, in writing to the other Party, expressly assume performance of such rights and/or obligations. Any permitted assignment shall be binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 13.3 shall be null, void and of no legal effect.

(b) Notwithstanding the foregoing, each Party agrees that in the event that a Party (the “Acquired Party”) is acquired (whether by way of merger, acquisition, sale of all or substantially all of its business or assets to which this Agreement pertains, or otherwise) (an “Acquisition”) by a Third Party (the “Acquirer”), the non-Acquired Party shall not obtain any rights or access under this Agreement to any Know-How or Patent Rights Controlled by such Acquirer which were not already within MacroGenics Technology (if the Acquired Party is MacroGenics) or Provention Technology (if the Acquired Party is Provention) immediately prior to the consummation of such Acquisition.

13.4 Designation of Affiliates. Each Party may discharge any obligation and exercise any right hereunder through delegation of its obligations or rights to any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party’s obligations under this Agreement, and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.

13.5 Relationship of the Parties. It is expressly agreed that MacroGenics, on the one hand, and Provention, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither MacroGenics nor Provention shall have the authority to make any statements, representations or commitments of any kind, or to take any action which shall be binding on the other, without the prior written consent of the other Party to do so. All persons employed by a Party shall be employees of that Party and not of the other Party and all costs and obligations incurred by reason of such employment shall be for the account and expense of such Party.

13.6 Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by Force Majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting Force Majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of Force Majeure affecting such Party. If Force Majeure persists for more than ninety (90) days, then the Parties shall discuss in good faith the modification of the Parties’ obligations under this Agreement in order to mitigate the delays caused by such Force Majeure. In the event a Party is prevented from performing its obligations under this Agreement due to Force Majeure for more than one hundred eighty (180) days according to this Section 13.6, the other Party shall have the right to terminate this Agreement written notice. A termination under this Section 13.6 by either Party shall be treated as a termination under Section 10.3 and the corresponding provisions for termination under Section 10.3 shall apply except to the extent the affected Party is prevented from performing due to the Force Majeure.

13.7 Entire Agreement. This Agreement, including the Exhibits hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof; provided, that the Prior CDA shall be superseded and terminated hereby, with all Confidential Information disclosed thereunder being deemed Confidential Information under this Agreement. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. In the event of any inconsistency between the body of this Agreement and either any Exhibits to this Agreement or any subsequent agreements ancillary to this Agreement, unless otherwise express stated to the contrary in such Exhibit or ancillary agreement, the terms contained in this Agreement shall control.

13.8 Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

13.9 English Language. This Agreement shall be written in and executed in, and all other communications under or in connection with this Agreement, shall be in the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control.

13.10 Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein.

13.11 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof.

13.12 Headings. The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.

13.13 Construction. Whenever this Agreement refers to a number of days without using a term otherwise defined herein, such number refers to calendar days. Except where the context otherwise requires, (a) wherever used, the singular shall include the plural, the plural shall include the singular; (b) the use of any gender shall be applicable to all genders; (c) the terms “including,” “include,” “includes” or “for example” shall not limit the generality of any description preceding such term and, as used herein, shall have the same meaning as “including, but not limited to,” and/or “including, without limitation”; (d) the words “herein”, “hereof” and hereunder”, and words of similar import, refer to this Agreement in its entirety and not to any particular provision hereof; (e) the word “or” has the inclusive meaning that is typically associated with the phrase “and/or”; (f) the word “will” means “shall”; (g) if a period of time is specified and dates from a given day or Business Day, or the day or Business Day of an act or event, it is to be calculated exclusive of that day or Business Day; (h) “Dollar”, “USD” or “$” means U.S. dollars; (i) a capitalized term not defined herein but reflecting a different part of speech than a capitalized term which is defined herein shall be interpreted in a correlative manner; and (j) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein). The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.

13.14 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by .pdf or other electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were the original signatures.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date(s) set forth below.

Provention Bio, Inc.

By:	/s/ Ashleigh Palmer
Name:	Ashleigh Palmer
Title:	Chief Executive Officer
Date:	May 7, 2018

MacroGenics, Inc.

By:	/s/ Scott Koenig
Name:	Scott Koenig
Title:	Chief Executive Officer
Date:	May 7, 2018

Schedule 9.2(g)

[****]

Schedule 12.2(b)

[****]

EXHIBIT A

Compound

MGD010

Secretion Signal Sequences are double underlined in lowercase letters.

Chain1 [****]

Chain2 [****]

Chain3 [****]

EXHIBIT B

MACROGENICS PATENTS - MGD010

Country		Application No.		Publication No.		Patent No.
[****]		[****]		[****]		[****]

Country

Application No.

Publication No.

Patent No.

Country

Application No.

Publication No.

Patent No.

Country

Application No.

Publication No.

Patent No.

Country

Application No.

Publication No.

Patent No.

Country

Application No.

Publication No.

Patent No.

Country

Application No.

Publication No.

Patent No.

EXHIBIT C

Development Plan

[****]

EXHIBIT D

Third Party Licenses

[****]

EXHIBIT E

Transferred Documentation and Biological and Chemical Materials and Reagents

The items on this list are anticipated to be either transferred or otherwise made available by MacroGenics as soon as practicable using Commercially Reasonable Efforts during the Transition Period. Items that are not transferred during the Transition Period shall be transferred by MacroGenics during the remainder of the eighteen (18) months after the Effective Date using Commercially Reasonable Efforts to the extent available and feasible. Electronic documentation shall be transferred in formats to be mutually agreed upon by both Parties. Type of access for biological and chemical materials and reagents will be mutually agreed upon by the Parties during the Transition Period.

Documentation

●

[****]

EXHIBIT F

PRESS RELEASE

ExHIBIT G

WARRANT

Warrant Number ____

Warrant to Purchase

Shares of

Common Stock

As Herein Described

May __, 2018

WARRANT TO PURCHASE COMMON STOCK OF

PROVENTION BIO, INC.

1. Exercise and Payment; Exchange.

X	=	Y (A – B)
		A

Where:

X	=	The number of Warrant Shares to be issued to the Holder

Y	=	The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

A	=	The fair market value of one Warrant Share (at the date of such calculation)

B	=	The Exercise Price (as adjusted to the date of such calculation)

For purposes of the calculation above, the fair market value of one Warrant Share shall be determined as set forth in Section 3(a) – (c) below.

(b) Conditions to Exercise or Exchange. The restrictions in Section 7 shall apply, to the extent applicable by their terms, to any exercise or exchange of this Warrant permitted by this Section 1.

5. Adjustments in Number and Exercise Price of Warrant Shares.

5.1 The number of shares of Common Stock for which this Warrant may be exercised and the Exercise Price therefor shall be subject to adjustment as follows:

7. Transfer, Exercise, Exchange, Assignment or Loss of Warrant, Warrant Shares or Other Securities.

8. Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company with respect to the issuance of the Warrant as follows:

11. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York.

[Signature page follows.]

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

PROVENTION BIO, INC.

	By:
	Name:
	Title:

eXHIBIT h

lOCK-UP aGREEMENT

Provention Bio, Inc.

Lock-Up AGREEMENT

May __, 2018

MDB Capital Group, Inc.

2425 Cedar Springs Road

Dallas, Texas 75201

Re: Provention Bio, Inc. - Lock-Up Agreement

Ladies and Gentlemen:

This Lock-Up Agreement is being delivered to you in connection with the Warrants (the “Warrants”), each dated as of May __, 2018 between Provention Bio, Inc., a Delaware Corporation, (the “Company”) and MacroGenics, Inc., a Delaware corporation (the “Subscriber”), in which Subscriber desires to acquire warrants exercisable into an aggregate of 2,432,688 shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of the Company in consideration of the Company’s and Subscriber’s entry into an Asset Purchase Agreement and License Agreement, each dated as of May __, 2018.

In order to induce MDB Capital Group, LLC (“MDB”) to locate investors to participate in an initial public offering by the Company, the undersigned agrees that, commencing on the earlier of (a) the date of the final prospectus relating to the Company’s initial public offering of its Common Stock (the “IPO”) and (b) the listing of the Company’s Common Stock on an exchange or any tier of The NASDAQ Stock Market or New York Stock Exchange and ending on the date that is 12 months thereafter (the “Lock-Up Period”), the undersigned will not, and will cause all affiliates (as defined in Rule 144 promulgated under the Securities Act of 1933 Act, as amended) of the undersigned not to, (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock, or securities exercisable or convertible into shares of Common Stock, held as of the date hereof (the “Subscriber’s Shares”) or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Subscriber’s Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise.

The foregoing restriction is expressly agreed to preclude the undersigned, and any affiliate of the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Subscriber’s Shares even if the Subscriber’s Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Subscriber’s Shares or with respect to any security that includes, relates to, or derives any significant part of its value from the Subscriber’s Shares.

Notwithstanding the foregoing, the undersigned may transfer the Subscriber’s Shares, provided that in case of items (i) through (v) below, any such transfer shall not involve a disposition for value, and provided further that any transferee shall agree to be bound by the terms of this Lock-up Agreement:

(i) bona fide gift or gifts or by will or intestate succession upon the death of the undersigned; or

(ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned; or

(iii) if the undersigned is a trust, any distribution to a beneficiary of the trust or to the estate of a beneficiary of such trust and such transfer is not for value; or

(iv) as a distribution or transfer to stockholders, members, limited partners, or other securityholders of the undersigned or to regular employees of the undersigned whether or not for value; or

(v) to any corporation, partnership, limited liability company or other entity all of the beneficial ownership interests of which are held by the undersigned or to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by or under common control with the undersigned.

For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

Notwithstanding anything contrary in this Lock-Up Agreement, (i) the undersigned may exercise warrants to purchase shares of Common Stock, provided that the underlying shares of Common Stock shall continue to be subject to the restrictions on transfer set forth in this letter agreement, (ii) the undersigned can enter into a sales plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provided that no sales, dispositions or other transfers of the Subscriber’s Shares may be made under such plan during the Lock-Up Period and no public announcement or filing under the Exchange Act regarding the establishment of such plan shall be required of or voluntarily made by or on behalf of the undersigned or the Company; (iii) nothing in this Lock-Up Agreement shall prevent the transfer of securities of the Company pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of Common Stock, provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Subscriber’s Shares shall remain subject to the restrictions contained in this Lock-Up Agreement, and (iv) nothing in this Lock-Up Agreement shall prevent the transfer of the Subscriber’s Shares with the written consent of MDB and the agreement of the transferee that it will be subject to the restrictions contained herein.

In order to enforce this covenant, the Company shall impose stop-transfer instructions preventing the Company’s transfer agent (the “Transfer Agent”) from effecting any actions in violation of this Lock-Up Agreement. The undersigned agrees and consents to the entry of stop transfer instructions with the Company’s Transfer Agent and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions. The Company is a third party beneficiary of this provision.

The undersigned acknowledges that the execution, delivery and performance of this Lock-Up Agreement is a material inducement to MDB and the Company to complete the transactions contemplated by the Subscription Agreement and the Private Placement, and that MDB and the Company shall each be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Lock-Up Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Subscription Agreement entered into in connection with the Private Placement.

The undersigned understands and agrees that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.

At the discretion of MDB some or all of the Subscriber’s Shares may be released from the restrictions of this Lock-Up Agreement, and the Company will take the required action to permit the securities so released to be free of the restrictions of this Lock-Up Agreement.

This Lock-Up Agreement may be executed in two counterparts, each of which shall be deemed an original but both of which shall be considered one and the same instrument.

This Lock-Up Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicting provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the laws of any jurisdiction other than the State of Delaware to be applied. In furtherance of the foregoing, the internal laws of the State of Delaware will control the interpretation and construction of this Lock-Up Agreement, even if under such jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily apply.

[Remainder of page intentionally left blank. Signature Page to Follow.]

			Very truly yours,


			Exact Name of Shareholder

			Authorized Signature

			Title

Agreed to and Acknowledged:

MDB CAPITAL GROUP, LLC

By:
Name:
Title:

EX-10.19 5 ex10-19.htm

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is made and entered into as of the 7^th day of May 2018 (the “Closing Date”), by and between

PROVENTION BIO, INC., a Delaware corporation, the principal place of business of which is at United States of America (“Buyer”),

and

MACROGENICS, INC., a Delaware corporation, the principal place of business of which is at 9704 Medical Centre Drive, Rockville, MD 20850, United States of America (“Seller”);

RECITALS

WHEREAS, Buyer is a clinical stage biopharmaceutical company that possesses expertise in the research and development of pharmaceutical products which prevent and intercept immune-mediated diseases;

WHEREAS, Seller is a biopharmaceutical company that discovers and develops novel biologics for the treatment of cancer, autoimmune disorders and infectious diseases, and Seller has developed a novel cluster of differentiation 3 (“CD3”) partial agonist known as “Teplizumab”;

WHEREAS, Seller wishes to sell and transfer to Buyer all right, title and interest in and to certain assets related to “Teplizumab” pursuant to and in accordance with the terms and conditions of this Agreement;

WHEREAS, Buyer wishes to purchase from Seller such assets related to “Teplizumab”;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.	DEFINITIONS

1.1	As used in this Agreement, the following defined terms shall have the meanings provided below:

	“Accounting Standards”:		means the United States Generally Accepted Accounting Principles (U.S. GAAP) as consistently applied.

	“Accounts Receivable”:		means all trade accounts and notes receivable and other miscellaneous receivables, including those that are not evidenced by instruments or invoices, existing as of the Closing Date.

	“Action or Proceeding”:		means any claim, action, suit, litigation, proceeding, arbitration, order, inquiry, hearing, assessment, audit, contest, prosecution, enforcement action, examination or investigation (whether civil, criminal, administrative, investigative, appellate or informal) threatened, commenced, brought, conducted, pending or heard by or before, or otherwise involving, any Governmental Authority or any arbitrator or arbitration panel; provided that the foregoing shall exclude patent or trademark prosecution and examination before any relevant patent and/or trademark office in any applicable country or jurisdiction.

	“Affiliate”:		means any corporation or other legal entity controlled by, controlling, or under common control with Buyer or Seller. For the purpose of this definition, the term “control” means direct or indirect beneficial ownership of at least fifty percent (50%) of the voting stock of a corporation or other legal entity, or to hold the effective power to appoint or dismiss members of the management.

	“Agreement”:		means this Asset Purchase Agreement, including the Exhibits.

	“API”:		means an active pharmaceutical ingredient, whether produced from a living organism or through synthetic process, i.e., any substance intended to be used in the manufacture of a drug product and that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment or prevention of disease or to affect the structure or any function of the body of man or other animals, including peptides, antibodies, hybrid molecules, fusion proteins, cytokines or other cellular elements.

	“Applicable Laws”:		means any and all of the applicable federal, provincial, regional, state or local law, statute or ordinance, rules and regulations, including any rules, regulations, guidelines, administrative guidance, or other requirements of any Governmental Authorities that may be in effect from time to time in any country or jurisdiction, including, without limitation, the FFDCA, current Good Manufacturing Practices (“cGMP”) and current Good Clinical Practices (“cGCP”).

	“Assumed Contracts”:		means the agreements listed in Exhibit 3 under the heading “Assumed Contracts.” For the avoidance of doubt, “Assumed Contracts” shall not include any agreements or contracts of Seller that are not explicitly scheduled in Exhibit 3 hereto under the heading “Assumed Contracts.”

	“Assumed Liabilities”:		means, collectively, all of the following liabilities, in each case to the extent related to and solely accruing during the period beginning immediately after the Closing Date in connection with the ownership of the Purchased Assets or the manufacturing, Development or Commercialization of a Product by Buyer, its Affiliates or its Licensees, but in all cases excluding the Retained Liabilities and the other obligations retained by Seller pursuant to Section 2.8 or any other Transaction Documents: (i) subject to Section 3.11, all liabilities to the extent arising out of or relating to the Assumed Contracts; (ii) all liabilities in respect of any lawsuits, claims, actions or proceedings to the extent arising out of or relating to the manufacture, Development or Commercialization of Products or the ownership, sale, lease or use of any of the Purchased Assets; (iii) all liabilities for warranty claims and product liability or similar claims, including all suits, actions or proceedings relating to any such liabilities, to the extent arising out of or relating to any and all Products; (iv) all liabilities for taxes to the extent arising out of or relating to or in respect of any Product or any Purchased Asset after the Closing Date; and (v) all other liabilities and obligations of whatever kind and nature, primary, secondary, direct or indirect, absolute or contingent, known or unknown, whether or not accrued, to the extent arising out of or relating to the Product or Purchased Assets. For the avoidance of doubt, Assumed Liabilities shall not include Excluded Taxes.

	“Bill of Sale and General
	Assignment Agreement”:		has the meaning set forth in Section 4.2(i).

	“BLA Approval Milestone”		has the meaning set forth in Section 3.2.

	“Business Day”:		means any day other than (i) a Saturday, a Sunday, or (ii) a day on which commercial banks located in Lebanon, New Jersey, and/or Rockville, Maryland, are authorized or required under Applicable Laws to remain closed.

	“Buyer”:		has the meaning set forth at the beginning of this Agreement.

	“Closing”:		has the meaning set forth in Section 4.1.

	“Closing Date”:		means the effective date of this Agreement shown at the beginning of this Agreement.

	“Commercial Milestone”:		has the meaning set forth in Section 3.4.

	“Commercialization” or
	“Commercialize”:		means the commercial manufacture, marketing, promotion, sale, offering for sale, distribution, and/or commercial importation or exportation of a Product.

	“Combination Product”:		means a Product combining Teplizumab together with another API.

	“Completion”:		means, for a clinical trial, the date upon which all patients have completed protocol-defined drug administration and [****].

“Confidential Information”:

means any information of a confidential or proprietary nature disclosed by a Party or its Affiliates (the “Disclosing Party”) to the other Party or its Affiliates (the “Receiving Party”), including each Party’s or its Affiliates’ invention disclosures, proprietary materials, data, including any Data, know-how, including any Know-How, technologies, trade secrets, and/or manufacturing, marketing, personnel and other business information and plans, whether in oral, written, graphic or electronic form. Confidential Information (as defined in the Prior Confidentiality Agreement) disclosed under the Prior Confidentiality Agreement shall be deemed Confidential Information hereunder. Information shall not be deemed “Confidential Information” hereunder, and the Receiving Party shall have no obligation with respect to any information if it is:

	(i)	known by the Receiving Party prior to disclosure by the Disclosing Party, as evidenced by internal records or documentation of the Receiving Party; or

	(ii)	information which is in the public domain or subsequently enters the public domain through no fault of the Receiving Party; or

	(iii)	information that is received by the Receiving Party from an independent Third Party with the lawful right to disclose it; or

	(iv)	information that was independently developed by the Receiving Party (or its Affiliates’) employees or contractors without the use of or reference to Confidential Information of the Disclosing Party as evidenced by internal records or documentation of the Receiving Party.

Notwithstanding the foregoing, any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the Receiving Party. Confidential Information to the extent solely and specifically related to the Purchased Assets and/or the Product shall be deemed to be the Confidential Information of the Buyer, notwithstanding the fact that it was initially disclosed to the Buyer by the Seller.

	“Consents and Waivers”:		means the [**] Consent, [] Waiver, [] Novation and Consent and [**] Comfort Letter.

	“Control” or “Controlled”:		means, the possession by a Party of the ability to assign, transfer or license rights or assets as contemplated by this Agreement with respect to (i) the Purchased Assets; and (ii) other intellectual property and assets of any kind, unless, with respect to intellectual property and/or assets other than the Purchased Assets, such assignment transfer or license of rights or assets would violate the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be first required to assign, transfer or license such rights or assets; provided however that if such agreement or other arrangement with any Third Party later terminates, or would no longer be violated, then such intellectual property or other assets shall be deemed Controlled by such Party.

	“Core Representation”:		has the meaning set forth in Section 9.1(ii).

	“Damages”:		means any loss, damage, injury, liability, settlement, judgment, obligation, award, fine, penalty, tax, fee (including any reasonable legal fee, accounting fee, expert fee or advisory fee), charge, cost (including any reasonable cost of investigation) or expense.

	“Data”:		means any and all research data, technical data, test and development data, pre-clinical and clinical data, formulations, processes, protocols, regulatory files and the like which are developed by Seller, its Affiliates, licensees and/or Third Party providers of services, in each case including their respective predecessors in interest, and Controlled by Seller, prior to the Closing Date or generated in the performance of the Technology Transition Plan.

	“Data Room”:		means that certain electronic data room populated by the Seller on ShareVault.com relating to the Product and the Purchased Assets.

	“Development” or “Develop”:		means to discover, research or otherwise develop a product, including conducting any pre-clinical, non-clinical or clinical research and any drug development activity, including discovery, research, toxicology, pharmacology and other similar activities, test method development and stability testing, manufacturing process development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies (including pre- and post-approval studies), diagnostic assays in connection with clinical studies, and all activities directed to obtaining any Regulatory Approval, including any marketing, pricing or reimbursement approval. For the sake of clarity, Development shall not include any activities related to Commercialization.

	“Development and
	Regulatory Milestone”:		has the meaning set forth in Section 3.2.

	“Development Plan”:		means plans for the Development of the Product as outlined in Exhibit 4 and as may be modified by the Buyer from time to time during the Term.

	“Device”:		means any medical device, instrument, apparatus, implant, or similar or related device that is used to diagnose, prevent and/or treat a disease or other condition, such as a drug delivery system (including a single use disposable injection device), that is distributed, marketed and/or sold by Buyer, its Affiliates and/or Licensees to Third Parties, including hospitals, clinics, medical practitioners, pharmacists, and patients, either in the secondary packaging of the Product or separately, the use of which is related to the use of the Product.

	“Diagnostic Tool”:		means any companion and/or diagnostic assay developed and used to (i) identify patients who are most likely to benefit from a Product, (ii) identify patients likely to be at increased risk for serious adverse reactions as a result of treatment with a Product, and/or (iii) monitor a patient’s response to a Product for the purpose of adjusting treatment (e.g., schedule, dose, discontinuation) to achieve improved safety or effectiveness.

	“Disclosing Party”:		shall have the meaning provided in the definition of “Confidential Information.”

	“Disclosure Schedules”:		means the Disclosure Schedules set forth in Exhibit 5.

	“Earn-Out Term”:		means, on a Product-by-Product, and country-by-country basis, the period commencing upon the First Commercial Sale of such Product in such country and expiring upon the later of: (i) the last-to-expire Valid Claim in a Product Patent in a given country, or (ii) [****] years after the date of First Commercial Sale of such Product in such country.

	“[**] Agreement”**:		means the “[***] Agreement” entered into by and between Seller and [*], as subsequently amended on [] and [], which has [**].

	“[**] Consent”**:		means that certain [**] and Seller, dated as of [**].

	“Encumbrance”:		means any lien, pledge, charge, mortgage, security interest, lease, license, option, right of first refusal, preemptive right, put, call or other restriction on transfer (other than express provisions of Assumed Contracts), defect or imperfection of title, assessment, deed of trust, levy, or other encumbrance of any kind, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

	“Excluded Taxes”:		means (i) all Taxes of or relating to Seller, or for which Seller is liable, for any taxable period, including (A) all Taxes of any member of an affiliated group of which Seller (or any predecessor) is or was a member on a prior to the Closing Date, including pursuant to Treasury Regulation Section 1.1502-6 or any analogous or similar state, local or foreign law; (B) any and all Taxes of any person imposed on Buyer as a transferee or successor, by contract or pursuant to any Applicable Law, which Taxes relate to an event or transaction occurring before the Closing Date, and (C) payments under any Tax allocation, sharing or similar agreement (whether oral or written); (ii) all Taxes relating to the “Retained Rights” described in Section 2.3 or Retained Liabilities for any taxable period; (iii) all Taxes attributable to ownership or use of any Purchased Assets or the Assumed Liabilities for any taxable period ending on or prior to the Closing Date and, with respect to any taxable period beginning before and ending after the Closing Date, for the portion of such taxable period ending on the Closing Date; and (iv) Seller’s portion of transfer taxes (as provided in Section 3.9).

	“Exhibit”:		means any or all of the exhibits attached to this Agreement.

	“FFDCA”:		means the Federal Food, Drug, and Cosmetic Act.

	“First Commercial Sale”:		means, with respect to a Product in a given country, the first commercial sale or disposition for value of such Product to a Third Party (other than a Related Party) for end use or consumption of such Product in such country, excluding, however, transfers or dispositions of without consideration: (i) in connection with patient assistance programs; (ii) for charitable or promotional purposes; (iii) for preclinical, clinical, regulatory or governmental purposes or under so-called “named patient”, “compassionate use” or other limited access programs; or (iv) for use in any tests or studies reasonably necessary to comply with Applicable Laws, regulation or request by a Governmental Authority. For clarity, First Commercial Sale shall be determined on a country-by-country basis.

	“First Indication”:		means a first indication for which a Product receives approval.

	“FTE”:		means a full time equivalent person by year consisting of [**] days per year of work, corresponding to [**] hours per year of work.

	“FTE Rate”:		means [**] United States Dollars (US$[**]) per FTE.

	“Fundamental Representation”:		has the meaning set forth in Section 9.1(i).

	“Generic Competition”:		means, with respect to a Product in any country in a given calendar quarter, that, during such calendar quarter, (i) one or more Generic Products are commercially available in such country, and (ii) aggregate Net Sales of such Product in such country in such calendar quarter equal less than [**] percent ([**]%) of the average aggregate Net Sales of the Product over the four (4) calendar quarters immediately prior to the calendar quarter in which one or more Generic Products first became commercially available in such country.

	“Generic Product”:		for a given country means a pharmaceutical product that (i) is sold by a Person that is not a Related Party under a Regulatory Approval granted by a Government Authority to a Third Party, (ii) contains the same active ingredient(s) as are contained in a Product, and (iii) is approved by the Government Authority pursuant to an abbreviated approval process that relies in part on such Government Authority’s previous grant of marketing authorization to a Product.

	“Governmental Authority”:		means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the United States of America or other country, including without limitation any regulatory authority involved in granting approval to initiate or conduct clinical testing in humans, for regulatory approval to market a pharmaceutical/biologic product and/or, to the extent required in such country or jurisdiction, for pricing or reimbursement approval for a pharmaceutical product in such country or jurisdiction, including (i) the Food and Drug Administration of the United States of America (“FDA”), (ii) the European Medicines Agency of the European Union (“EMA”), and (iii) the European Commission.

	“Inbound Licenses”:		has the meaning set forth in Section 5.7(v).

	“Indemnitee”:		has the meaning set forth in Section 9.4.

	“Indemnitor”:		has the meaning set forth in Section 9.4.

	“INDs and CTAs”:		means any and all investigational new drug applications and clinical trial applications with respect to the Product as listed in Exhibit 8.

	“[**] Agreement”**:		means that certain [**] Agreement between Seller, [] and [], dated [**].

	“[**] Payment”**:		means any payment due pursuant to Section 7.1.1(b) of the [****] Agreement.

	“[**] Supply”**:		means supply of [****].

	“[**] Waiver”:**		means that certain [**] Agreement, between [],[] and Seller, dated as of [**].

	“[****]”		means [****].

	“[**] Agreement”**		means that certain [**] Agreement, effective as of [] between the [**] and Seller.

	“Know-How”:		means technical and other information, including trade secrets and information comprising or relating to concepts, discoveries, designs, formulae, ideas, inventions, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and testing (including results of Development), formulations, processes (including manufacturing processes, specifications and techniques), and any such information contained in the Data, including documents containing any of the above.

	“Knowledge”:		with respect to Seller, means the actual knowledge of the vice-president level or higher executive officers (or persons performing similar functions) of Seller after reasonable inquiry.
	“Licensee”:		means a Third Party licensee that has entered into a license agreement with Buyer for the Product.

	“Listed Patents”:		has the meaning set forth in Section 5.7(ii).
	“Lock-Up Agreement”		means that certain Lock-Up Agreement, substantially in the form attached hereto as Exhibit 12.

	“[**] Novation and**
	Consent”:		means that certain Novation Agreement, between [**], Buyer and Seller, dated as of [**].
	“Major European Country”:		means France, Germany, Italy, Spain or the United Kingdom.

	“[****]”		means any payments due to be [**] under the [**] or any other agreement entered into by Seller or any of its predecessors in interest prior the Closing Date.

	“Net Sales”:		means the gross amount billed or invoiced for a Product by (a) by Buyer; (b) by any Buyer’s assignee (including such assignee’s affiliates or licensees), (c) by Buyer’s Affiliates, or (d) by Licensees (each of the Persons referred to in (b), (c) and (d), a “Related Party”), in each case, for the sale of a Product to Third Parties (excluding a sale of a Product to Affiliates or licensees for resale), subject to the following deductions, as allocable to such Product (if not previously deducted in calculating the amount invoiced and to the extent included in the gross invoice price):

(i)

reasonable trade, quantity, prompt settlement and other cash discounts and rebates (including wholesale inventory management fees and fees or allowances to other distributors, buying groups, health care insurance carriers or other pharmacy benefit managers (or equivalents thereof), federal, state/provincial, local or other Governmental Authority or other institution, or their agencies or purchasers, reimbursers, or trade customers), chargebacks, and price reductions or allowances actually allowed or granted from the billed amount, and discounts to customers, including cash coupons, vouchers and loyalty cards (and their redemption) and co-pay assistance;

	(ii)	credits or allowances actually granted upon claims, rejections or returns of such sales of Products, including recalls;

	(iii)	taxes imposed on the production, sale, delivery, import, export, distribution or use of the Product (including sales, use, excise or value added taxes, but excluding income taxes), duties or other governmental charges levied on or measured by the billing amount when included in billing, as adjusted for tax refunds and tax rebates;

	(iv)	any discounts, rebates or similar payments in respect of sales paid for by any Governmental Authority, including Federal or state Medicaid, Medicare or similar state program, or any other similar program, or any other government imposed rebates or discounts from invoiced prices (to the extent not covered under clause (i) above); and

	(v)	transport, freight, postage and insurance costs relating to the transportation or delivery of Products.

	Such amounts shall be determined from the books and records of Buyer or its Related Party, maintained in accordance with Accounting Standards with regard to Buyer, and, with respect to a related Party, in accordance with the accounting standards applicable to such a Related Party.

	Net Sales shall exclude transfers or dispositions of Product, without consideration: (1) in connection with patient assistance programs; (2) for charitable or promotional purposes; (3) for preclinical, clinical, regulatory or governmental purposes or under so-called “named patient”, “compassionate use” or other limited access programs; or (4) for use in any tests or studies reasonably necessary to comply with applicable Law, regulation or request by a Governmental Authority.

	“Outbound Licenses”:		has the meaning set forth in Section 5.7(iv).

	“Party”:		means either Buyer or Seller, as the context requires, and, when used in plural, shall mean Buyer and Seller.

	“Patents”:		means (i) all issued patents (extensions, restorations by existing or future extension or registration mechanism, including patent term adjustments, patent term extension, supplemental protection certificates or the equivalent thereof, substitutions, confirmations, re-registrations, re-examinations, reissues and patents of addition), (ii) patent applications (including all provisional and non-provisional applications, substitutions, requests for continuation, continuations, continuations-in-part, divisionals and renewals), (iii) inventor’s certificates, (iv) design registrations, design registration applications, industrial designs, industrial design applications and industrial design registrations, (v) any and all divisions, continuations, continuations in part, extensions, substitutions, renewals, registrations, revalidations, reversions, reexaminations, reissues or additions, of or to any of the foregoing items, (vi) all equivalents of the foregoing in any country of the world, and (vii) all rights and priorities afforded under any Applicable Law with respect to each of the foregoing items.

	“Patent Assignment
	Agreement”:		means the “Patent Assignment Agreement” between Seller and Buyer to be executed on or prior to the Closing, in the form attached as Exhibit 7.

	“Permitted Encumbrance”:		means all (i) mechanics’, carriers’, workmen’s, repairmen’s or warehousemen’s Encumbrances arising under Applicable Law and incurred in the ordinary course of Seller’s business and Encumbrances for taxes and other governmental charges which are not yet due and payable; and (ii) other imperfections of title or encumbrances, if any, which have no more than de minimis impact on the continued use and operation or value of the assets to which they relate.

	“Person”:		means any natural person, corporation, general partnership, limited partnership, limited liability company, proprietorship, other business organization, trust, union, association or Governmental Authority.

	“Phase III Clinical Trial”:		means with regard to the United States of America a clinical trial consistent with the United States Code of Federal Regulations, Title 21, Section 312.21 (c) “Phase 3”, and means with regard to other countries a pivotal multi-center human clinical trial in a large number of patients to establish safety and efficacy in the particular claim and indication tested and required to obtain a Regulatory Approval.

	“Prior Confidentiality
	Agreement”:		means that certain Mutual Confidentiality Agreement entered into by and between Buyer and Seller, effective as of August 8, 2017.

	“Product”:		means a product which contains Teplizumab, whether or not as the sole API (i.e., including any Combination Product), in any dosage form, formulation (including lyophilizate or solution) and mode of administration and for all indications. For the sake of clarity, the term “Product” shall not be deemed to include any Device or Diagnostic Tool for purposes of determining if a First Commercial Sale has been made or for calculating Net Sales.

	“Product Intellectual
	Property”:		means, any and all of (i) the Product Patents; and (ii) Product Know-How; and (iii) any copyrights, trademarks, domain names or any other intellectual property rights that are (a) [****] the Product and (b) Controlled by Seller as of the Closing Date.

	“Product Know-How”:		means Know-How which (i) is Controlled by Seller as of the Closing Date; (ii) was used for or created as a result of the Development or Commercialization of the Product prior to the Closing Date; and (iii) [****] relates to the manufacture, use, Development or Commercialization of the Product, whether patentable or not. A listing of certain Product Know-How is set forth on Exhibit 8.

	“Product Patents”:		means those patents and patent applications set forth in Exhibit 2.

	“Program Contracts”		means the Assumed Contracts, the Inbound Licenses, the Outbound Licenses and the Service Contracts.

	“Program IP”:		has the meaning set forth in Section 5.7(i)

	“Purchased Assets”:		means all right, title and interest of Seller in:

	(i)	the Product;

	(ii)	the Assumed Contracts;

	(iii)	the Product Intellectual Property;

	(iv)	the Transferred Materials;

	(v)	the INDs and CTAs;

	(vi)	the Transferable Books and Records;

	(vii)	any prepaid amounts under the Assumed Contracts;

	(viii)	all compensation, interests and other rights and benefits due under the Assumed Contracts that accrue after the Closing Date, including under any Outbound Licenses, but excluding the [****] Payment; and

	(ix)	all goodwill related to the foregoing.

“Qualified Consideration”:

means any consideration that Buyer or any of its Affiliates receive in connection with the (and, in a transaction in which rights to multiple products are transferred, to the extent allocable to a) grant of rights under the Product Intellectual Property and/or rights with respect Products in an agreement or arrangement with a Third Party (“Qualified Consideration Agreement”). In furtherance and not in limitation of the foregoing, Qualified Consideration shall not include (i) royalties based on Net Sales, (ii) amounts received to cover future reasonable, fully-burdened costs incurred or to be incurred by Buyer or its Affiliates in the performance of research, development or manufacturing activities to be performed by Buyer or its Affiliates after the Effective Date, (iii) amounts received as reimbursement for out-of-pocket costs incurred by Buyer in the preparation, filing, prosecution and maintenance of the Product Patents, or (iv) consideration for the issuance of equity interests in Buyer or its Affiliates to the extent there is no premium included in such issuance for rights granted with respect to the Product. If Buyer or its Affiliate receives non-cash consideration that otherwise qualifies as Qualified Consideration, the Qualified Consideration will be calculated based on the fair market value of such consideration, at the time of the transaction, assuming an arm’s length transaction made in the ordinary course of business.

	“Reasonable Commercial
	Efforts”:		means those efforts and resources to Develop a Product and Commercialize a Product that are consistent with the usual practice of Buyer in pursuing the development or commercialization of other compounds and pharmaceutical products in its portfolio that are at a similar development stage as the Product or are of a similar market potential as the Product, taking into account all relevant factors, including present and future market potential, and Buyer’s own pharmaceutical products that are of similar market potential, financial return, medical and clinical considerations, present and future regulatory environment and competitive market conditions, all as measured by the facts and circumstances at the time such efforts are due.

	“Receiving Party”:		has the meaning provided in the definition of “Confidential Information.”

	“Regulatory Approval		means approval by a Governmental Authority of (i) a New Drug Approval Application or Biologics License Application (each, as defined in the FFDCA) in the U.S., or (ii) any corresponding application for regulatory approval in any country or jurisdiction outside the U.S., including, with respect to the European Union, a Marketing Authorization Application filed with the EMA pursuant to the Centralised Approval Procedure or with the applicable Regulatory Authority of a country in Europe with respect to the decentralised procedure, mutual recognition or any national approval procedure.

	“Related Party”:		has the meaning provided in the definition of “Net Sales” in this Section 1.1.

	“Related Technology”:		means all Know-How Controlled by Seller as of the Closing Date that is not Product Know-How and is necessary or useful for the Development, manufacture or Commercialization of Products; and (ii) all other Patents Controlled by Seller as of the Closing Date that (A) are not Product Patents; and (B) are necessary or useful for the Development, manufacture or Commercialization of Products.

	“Required Consents”:		has the meaning set forth in Section 7.1(i).

	“Retained Liabilities”:		means liabilities or obligations of any nature, whether known or unknown, fixed or contingent, accrued or unaccrued, to the extent arising in connection with the manufacture, Development or Commercialization of the Product, or the acts or omissions of Seller or its Affiliates prior to the Closing Date or in connection with the [****] Supply. For clarity, Retained Liabilities include but are not limited to (i) the obligations retained pursuant to Section 2.8, (ii) Excluded Taxes, (iii) any and all obligations in connection with the Related Technology and (iv) the JDRF Agreement.

	“Second Indication”:		means a new indication (i.e., a generally recognized distinct medical condition) and not an extension of the First Indication or a labeling change covering the First Indication.

	“Seller”:		has the meaning set forth at the beginning of this Agreement.

	“Service Contracts”:		has the meaning set forth in Section 5.7(vi).

	“Survival Period”:		has the meaning set forth in Section 9.1(iii).

	“Taxes”:		means all taxes of any kind including all U.S. federal, state, local or non-U.S. net income, capital gains, gross income, gross receipt, license, property, franchise, sales, use, excise, withholding, payroll, employment, social security, worker’s compensation, disability, severance, unemployment, health-care, stamp, occupation, capital stock, transfer, registration, value added, alternative, estimated, gains, windfall profits, net worth, asset, transaction and other taxes, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, and any interest, penalties or additions to tax with respect thereto, imposed upon any Person by any taxing authority or other Governmental Authority under Applicable Law, whether disputed or not.

	“Technology Transition
	Plan”:		means a plan developed and jointly agreed upon by the Parties in good faith after Closing as set forth in Section 2.7 for Seller to transfer the Product Intellectual Property to Buyer.

	“Teplizumab”:		means the compound “Teplizumab”, designated by Seller as MGA031, a novel cluster of differentiation 3 (“CD3”) partial agonist, as described in Exhibit 1.

	“Third Party”:		means any Person other than (i) Buyer or Seller, or (ii) an Affiliate of Buyer or Seller.

	“Third Party Claims”:		has the meaning set forth in Section 9.2.

	“Third Party
	Obligations”		means (i) the [**] Consideration; (ii) the [**] Royalty; and (iii) all royalties, milestones other consideration due to Third Parties in connection with sales of a Product or the assignment or other transfer of rights in connection with a Product or the Purchased Assets under agreements entered into by Seller or its predecessors in interest prior to the Closing Date.

	“[****]”:		means the [**] entered into by and between [] effective as of [] and [**].

	“[****]
	Consideration”:		means obligations to provide consideration to Tolerance under the [**], including such obligations under 2.5(c) of the []; provided that this definition shall not include any [**].

	“[**] Comfort Letter”**:		means that certain letter agreement between Buyer, Seller and [****].

	“Transaction Documents”:		means the Warrant, Bill of Sale and General Assignment Agreement, Patent Assignment Agreement and Lock-Up Agreement.

	“Transfer Letter”:		means the transfer letter to be submitted to each relevant Governmental Authority by Seller, in the form attached as Exhibit 9.

	“Transferable Books
	and Records”:		means all of the original (or if unavailable a copy) documents, Data, lists, files, records, research, studies, information and correspondence with Governmental Authorities, in whatever form kept, including electronic form, Controlled by Seller as of the Closing Date and relating solely and exclusively to the Assumed Contracts, the Product Intellectual Property or the Product, including all INDs and CTAs (including all amendments) and any other regulatory documentation to the extent solely and exclusively related to the Product, all clinical study reports, all data sets (SAS, ADaM, SDTM, etc.), copies of all Trial Master Files, all Financial Disclosure forms, the pharmacovigilance database and other similar books and records. Drafts, internal update reports, summaries of Data compiled for internal reporting, non-official communications and documents incidental to the Development and Commercialization of the Product conducted by Seller and which do not contain material Data or Product Know-How not otherwise subject to transfer to Buyer hereunder or under any Transaction Document are not deemed to be Transferrable Books and Records.

	“Transferred Materials”:		means any and all of the biological and chemical materials and components used for or created as a result of the Development, manufacturing or Commercialization of the Product Controlled by Seller and relating solely and exclusively to the Product, including any work in progress, API, work product, inventory (including clinical supplies), master cell banks and working cell banks, as set forth in Exhibit 8 or in the Technology Transition Plan.

	“Valid Claim”:		means: (i) a claim of an issued and unexpired patent in the Product Patents that has not been (A) held permanently revoked, unenforceable, unpatentable or invalid by a decision of a court or governmental body of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, (B) rendered unenforceable through disclaimer or otherwise, (C) abandoned or (D) permanently lost through an interference or opposition proceeding without any right of appeal or review; or (ii) a claim of a pending patent application in the Product Patents that (A) has been asserted and continues to be prosecuted in good faith and (B) has not been abandoned or finally rejected without the possibility of appeal or refiling, and (C) has not been pending longer than [****] years from the date of issuance of the first substantive patent office action considering patentability of such claim by the relevant patent office in the country or territory in which such claim is pending.

	“Warrant”:		has the meaning set forth in Section 3.1.

1.2

For purposes of this Agreement (i) words in the singular shall be held to include the plural and vice versa as the context requires, (ii) the words “including” and “include” shall mean “including, without limitation”, unless otherwise specified; (iii) the terms “hereof”, “herein”, “herewith”, and “hereunder”, and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement; (iv) all references to “Article” or “Section”, unless otherwise specified, are intended to refer to an Article or a Section of this Agreement; and (v) all references to “Exhibit” or “Schedule”, unless otherwise specified, are intended to refer to an Exhibit or Schedule of this Agreement.

2.	PURCHASE AND SALE OF ASSETS

2.1	Purchase and Sale of the Purchased Assets. Subject to the terms and conditions of this Agreement, on the Closing Date, Seller shall, or shall cause its relevant Affiliates to, sell, transfer, convey, assign and deliver to Buyer, free and clear from all Encumbrances (other than Permitted Encumbrances), and Buyer shall purchase, acquire and accept from Seller, and such Affiliates of Seller, all right, title and interest of Seller and such Affiliates in and to the Purchased Assets.

2.2	Assumption of Liabilities. On the Closing Date, Buyer shall assume and thereafter pay, perform and discharge when due, all Assumed Liabilities.

2.3

Retained Rights. Notwithstanding anything to the contrary contained in this Agreement, from and after the Closing Date, other than the Purchased Assets and the license to Related Technology provided hereby, Seller shall retain all of its right, title and interest in and to all of its assets, including:

(i)

all cash and cash equivalents of Seller and its Affiliates;

(ii)

all Accounts Receivable of Seller and its Affiliates;

(iii)

all Related Technology;

(iv)

all the trademarks and service marks, the corporate logos and trade names of Seller and its Affiliates, together with any variations and derivatives thereof and any other logos, symbols or trademarks, trade names or service marks of Seller and its Affiliates;

(v)

any refund or credit of taxes attributable to any tax period prior to the Closing Date;

(vi)

all books and records other than the Transferrable Books and Records;

(vii)

all tangible property owned by Seller and its Affiliates, other than such tangible property included in the Purchased Assets; and

(viii)

except as expressly included in the Purchased Assets, all other properties, assets, goodwill and rights of Seller and its Affiliates of whatever kind and nature, real, personal, mixed, tangible or intangible.

2.4	Retained Liabilities. Notwithstanding anything to the contrary contained in this Agreement, from and after the Closing Date, Buyer shall not assume any Retained Liability, each of which, as between the Parties, shall remain the sole and exclusive responsibility of Seller, irrespective of whether claims for such liabilities are brought on, before or after the Closing Date, and which Seller shall pay, perform and discharge when due.

2.5	Retention of Copies of Certain Assets. Notwithstanding anything to the contrary contained in this Agreement, Seller may retain, at its expense, and be able to use the information in, copies of any or all of the documentation that Seller or any of Seller’s Affiliates deliver to Buyer hereunder or that otherwise constitute Purchased Assets solely (i) for archival purposes, (ii) to fulfill or otherwise dispose of any of Seller’s rights or obligations under this Agreement, (iii) to comply with or fulfill its obligations under Applicable Law, including as necessary for any regulatory, tax or securities filing, (iv) for use in any pending or threatened legal or administrative claim, suit, demand or action, (v) subject to its confidentiality obligations under this Agreement, in connection with a financing, acquisition or similar transaction, or (vi) for such other purposes as Seller may reasonably request, subject to Buyer’s prior written consent, which shall be in Buyer’s sole discretion.

2.6	Related Technology License. Seller grants to Buyer, and Buyer accepts, a perpetual, worldwide, royalty-free, non-exclusive license, with right to grant sublicenses (including through multiple tiers), under the Related Technology solely in connection with the Development, manufacture and Commercialization of the Products. Buyer shall have the right to sublicense its rights under this Section 2.6 to (i) an Affiliate of Buyer or (ii) any Third Party in connection with a license, agreement or transaction under which Buyer grants such Third Party a right to Develop or Commercialize the Product; provided that in each case such sublicensee agrees in writing to be bound by Buyer’s obligations under this Section 2.6. Buyer shall provide Seller a copy of each executed sublicense entered into by Buyer under this agreement. Buyer shall (a) comply in all material respects with all Applicable Law relating to the Development, manufacture and Commercialization of Products; (b) not claim or represent through the use of the Related Technology that it has acquired any title in or ownership of the Related Technology; and (c) not register or permit any Related Party to register any industrial or intellectual property right embodying the Related Technology in any country without Seller’s prior written consent, which consent shall not be unreasonably withheld or delayed.

2.7	Technology Transfer Transition Plan. As soon as practicable after the Closing Date, but in no case later than fifteen (15) Business Days after Closing the Parties shall meet in person at Seller’s offices to discuss and agree upon a written Technology Transition Plan that will, at a minimum, include the items set forth on Exhibit 8. Beginning on the Closing Date and for a period of one hundred and five (105) days after the Closing Date (the “Transition Period”), Seller shall use commercially reasonable efforts to transfer to Buyer, the Product Know-How, Transferred Materials and Transferable Books and Records in accordance with the Technology Transition Plan. As part of such technology transfer, for the first eighteen (18) months following the Closing Date, Seller shall provide to Buyer or its designee, such Product Know-How and Related Technology as reasonably requested by Seller to enable Seller to Develop, manufacture and Commercialize Products; provided that such Product Know-How and/or Related Technology is in Seller’s possession and reasonably capable of being transferred. Seller shall provide information and necessary support in accordance with the Technology Transition Plan. During the Transition Period, Seller shall bear its own expenses related to the Technology Transition Plan and the Technology Transfer. Buyer shall fund (a) all of the reasonable FTE costs incurred by Seller in the performance of the Technology Transition Plan after the Transfer Period and any subsequent transfer by Seller of Product Know-How, Transferred Materials or Transferable Books and Records on the basis of the FTE Rate per FTE and (b) all third party out-of-pocket expenses incurred by Seller in the performance of the Technology Transition Plan, to the extent such third party out-of-pocket costs are approved in writing in advance by Buyer. Buyer shall pay such FTE costs and such approved third party out-of-pocket expenses within thirty (30) days following receipt of an invoice therefor. Without limiting the foregoing, the Seller shall continue to support the technology transition efforts during the first eighteen (18) months following the Closing Date until all Transferred Materials and Transferable Books and Records have been effectively transferred to Buyer.

2.8	[**] and Payment. The Parties acknowledge that (a) pursuant to the [], Seller agreed to [] with [] in the performance of a [] relating to the Product, including by [] of Product to []; and (b) the [] Payment is a portion of the compensation to be paid by [] for the rights granted to [] pursuant to the [] Agreement. In consideration of the foregoing, and notwithstanding anything to the contrary herein, the Parties agree that (i) Seller (or its designated vendor) shall retain [] (as defined in the [] Agreement) of the inventory of Product as required to [] the [] under the [] Agreement; (ii) Seller shall, directly or through its vendor, [] such quantities of Product as required to []; (iii) Seller shall have the right to directly request and receive the [] Payment; and (iv) Buyer shall not supply Product to [] until after the [] has been [] unless (A) Seller has breached the [] obligation and (B) the failure of Buyer to [] would result in a breach of the [] Agreement. All obligations to Third Parties related to the safety, efficacy or non-conformance of the [], including any obligation to replace Product or to engage independent laboratories for testing, shall be deemed Retained Liabilities and shall remain with the Seller and Seller shall discharge all such obligations as required under each applicable agreement or understanding related to the []. As reasonably requested by Seller, Buyer shall cooperate with Seller to support Seller’s efforts to fulfill the [**].

2.9	Grant Back. Buyer grants to Seller, and Seller accepts, a worldwide, royalty-free, non-exclusive license, with right to grant sublicenses, under the Purchased Assets solely to perform its obligations under this Agreement.

3.	CONSIDERATION AND PAYMENT

3.1	Equity Interest. As partial consideration for the Purchased Assets, on the Closing Date the Buyer will issue to Seller a warrant to purchase 2,162,389 common shares, which is the number of common shares representing eight percent (8%) of Buyer’s fully diluted outstanding shares on the issue date. The warrant will be exercisable for the period beginning on the Closing Date and ending on the date that is seven (7) years from the Closing Date at a per share exercise price equal to two dollars and fifty cents ($2.50), the per share price at which the Series A Preferred Shares were issued pursuant to a separate warrant purchase agreement substantially in the form attached hereto as Exhibit 10 (the “Warrant”).

3.2	Development and Regulatory Milestones. Buyer shall pay (which payments shall not be creditable against any other obligations of Buyer hereunder) a non-refundable payment for each of the milestone events set forth in this Section 3.2 (each a “Development and Regulatory Milestone”), whether the Development and Regulatory Milestone is achieved by Buyer, its Affiliates or Licensees, or any Third Party acting on behalf of Buyer, its Affiliates or Licensees. Payment for each of the Development and Regulatory Milestones shall be made only once regardless of how many times a Product achieves the corresponding Development and Regulatory Milestone, and no payment shall be due for any Development and Regulatory Milestone which is not achieved. The Development and Regulatory Milestones shall be as follows:

Development and Regulatory Milestone		Payment
[****]		[**] United States dollars ($[**])
[****]		[**] United States dollars ($[**])
[****]		[**] United States dollars ($[**])
[****]		[**] United States dollars ($[**])
[****]		[**] United States dollars ($[**])
[****]		[**] United States dollars ($[**])

Buyer shall provide Seller with written notice within thirty (30) days after the achievement of the corresponding Development and Regulatory Milestone and the payment pertaining to such Development and Regulatory Milestone shall be made by Buyer to Seller within ninety (90) days after the achievement of the corresponding Development and Regulatory Milestone.

3.3

Earn-Out.

	(a)	Subject to Sections 3.3(b), (c) and (d), Buyer shall pay to Seller [**] percent ([**]%) of aggregate worldwide annual Net Sales of Product by Buyer, its Affiliates or Licensees, or any Third Party acting on behalf of Buyer, its Affiliates or Licensees of all Products in a given calendar year during the Earn-Out Term.

	(b)	If, during a given calendar quarter when a Product is being Commercialized by or on behalf of Buyer, its Affiliates or Licensees in a particular country, there is Generic Competition in such country with respect to a Product, then the earn-out payment payable pursuant to Section 3.3(a) on the Net Sales of Product in such country shall thereafter be reduced to [**] percent ([**]%) of the amounts otherwise payable pursuant to Section 3.3(a) with respect to such Product in such country for such calendar quarter for so long as such Generic Competition remains.

	(c)	Beginning on the date of the First Commercial Sale of a Product, and thereafter until all payment obligations due in connection with the sale of Product under the [**] Agreement (as such obligations exist as of the Closing Date) are satisfied, the earn-out due to Seller set forth in Section 3.3(a) shall be reduced dollar-for-dollar by the amount payable by Buyer to [] (or its successor in interest) under the [**] Agreement for the corresponding calendar quarter.

	(d)	In the event that Buyer enters into a license with [**] in respect of the issue disclosed and further described on Schedule 5.7(vii), Buyer shall be entitled to credit [] percent ([]%) of the amount payable to [**] under such license in a given period in connection with such license against the amount payable to Seller under Section 3.3(a) for the corresponding period.

3.4

Commercial Milestones. Buyer shall pay a non-creditable, non-refundable milestone payment for each of the milestone events set forth in this Section 3.4 (each a “Commercial Milestone”), whether the Commercial Milestone is achieved by Buyer, its Affiliates or Licensees, or any Third Party acting on behalf of Buyer, its Affiliates or Licensees. Payment for each of the Commercial Milestones shall be made only once regardless of how many times a Product achieves the corresponding Commercial Milestone, and no payment shall be due for any Commercial Milestone which is not achieved. The Commercial Milestones shall be as follows:

Commercial Milestone		Payment
Aggregate worldwide Net Sales of Product that exceed [**] United States dollars ($[**]) based on the aggregate of all Net Sales of Product since the first commercial sale of Product		[**] United States dollars ($[**])
Aggregate worldwide Net Sales of Product that exceed [**] United States dollars ($[**]) based on the aggregate of all Net Sales of Product since the first commercial sale of Product		[**] United States dollars ($[**])
Aggregate worldwide Net Sales of Product that exceed [**] United States dollars ($[**]) based on the aggregate of all Net Sales of Product since the first commercial sale of Product		[**] United States dollars ($[**])

Buyer shall provide Seller with written notice within sixty (60) days of Buyer becoming aware of the occurrence of any of the Commercial Milestones (which awareness shall not be deemed to occur prior to twenty (20) days following the end of the fiscal quarter in which such milestone was achieved) and the payment pertaining to such Commercial Milestone shall be made by Buyer to Seller within ninety (90) days after the end of the calendar year in which such Commercial Milestone is achieved.

3.5

Qualified Consideration. Buyer shall pay Seller an amount equal to [****] percent ([****]%) of all Qualified Consideration received pursuant to any Qualified Consideration Agreement; provided that if Buyer or its Affiliates enter into the Qualified Consideration Agreement after the Completion of the first Phase III Clinical Trial for a Product, then all such amounts paid to Seller shall be creditable against future milestones related to the applicable Product which are due to Seller in accordance with Section 3.2 or Section 3.4.

3.6	Reports. Within forty-five (45) days (sixty (60) days in the event that a Licensee has generated Net Sales) after the conclusion of each calendar quarter in which Net Sales are generated or Qualified Consideration is received, Buyer shall deliver to Seller a report containing the following information (in each instance, with a Product-by-Product and country-by-country breakdown): (i) the gross amount billed or invoiced for Products sold, leased or otherwise transferred by Buyer, its Affiliates and Licensees during the applicable calendar quarter; (ii) a calculation of Net Sales for the applicable calendar quarter, including an itemized listing of deductions; (iii) a detailed accounting of all Qualified Consideration received during the applicable calendar quarter, if any; and (iv) the total amount payable to Seller in U.S. Dollars on Net Sales and Qualified Consideration for the applicable calendar quarter, together with the exchange rates used for conversion.

3.7	Payments. Within forty-five (45) days (sixty (60) days in the event that a Licensee has generated Net Sales) after the end of each calendar quarter, Buyer shall pay Seller all amounts due with respect to Net Sales and Qualified Consideration for the applicable calendar quarter. All payments due under this Agreement will be paid in U.S. Dollars. Conversion of foreign currency to U.S. Dollars will be made at the conversion rate existing in the United States (as reported in The Wall Street Journal, Eastern Edition) on the last working day of the applicable Calendar Quarter. Such payments will be without deduction of exchange, collection or other charges.

3.8	Interest. MacroGenics shall be entitled to charge interest on any payment under this Agreement that is overdue, to the extent permitted by Applicable Laws, at the thirty-day United States Dollar London Interbank Offered Rate (LIBOR) effective for the date that payment was due (as published in The Wall Street Journal, Eastern Edition) plus [**] percent ([**]%), on a per year basis.

3.9	Taxes. Buyer and Seller do not anticipate there being any sales taxes, value added tax, use taxes, transfer taxes, or similar taxes or withholding requirements that will become payable in connection with the transactions under this Agreement. In the event any such taxes are payable or withholding is required by Applicable Laws, the Parties shall discuss in good faith and agree on a fair allocation of such taxes or withholding requirements; provided that in the absence of such agreement, the Parties shall equally bear any such taxes or withholding requirements. Seller shall bear any such taxes payable in connection with the manufacture or Development of the Product prior to the Closing Date, Buyer shall bear any such taxes payable in connection with the manufacture, Development or Commercialization of the Product on or after the Closing Date, and the Parties will cooperate in the filing of all necessary tax returns and other documentation with respect to all such taxes. For clarity, Buyer shall be responsible for all fees charged by Governmental Authorities, including recording or filing fees or similar charges, for effecting or recording the transfer to Buyer of any Purchased Assets. For further clarity, Seller shall remain exclusively liable for all corporate income tax, capital tax, and other corporate taxes imposed on the Seller.

3.10	Books and Records. With respect to each quarter in which a payment was due hereunder, Buyer will maintain complete and accurate books and records in sufficient detail to enable verification of the correctness of the payments due hereunder for a period of five (5) years after such quarter. Seller may audit Buyer’s and its Affiliates’ and Licensees’ relevant books and records in order to verify the aforesaid matters within the subject five year period. Upon reasonable prior notice and during normal business hours, Seller’s independent public accountants, subject to confidentiality obligations consistent with Article 7, shall have access to such books and records in order to conduct such a review or audit. The Parties shall reconcile any underpayment within sixty (60) days after the accountant delivers the results of the audit. If any audit performed under this Section 3.10 reveals an underpayment in excess of [**] percent ([**]%) in any calendar year, Buyer shall reimburse Seller for all amounts incurred in connection with such audit. Seller may exercise its rights under this Section 3.10 only once every year per audited entity, each period shall only be subject to audit with reasonable prior notice to the audited entity.

3.11

MGNX Stock Consideration. Notwithstanding anything to the contrary in this Agreement or any other agreement related to the transactions contemplated herein, Seller shall be solely responsible for, and shall perform when required under the Assumed Contracts, all obligations related to the issuance of MGNX Stock Milestones.

4.	CLOSING DELIVERIES

4.1	Time and Place. The closing of the transactions contemplated by this Agreement, including the purchase and sale of the Purchased Assets (the “Closing”), shall take place simultaneously with the signing of this Agreement, by electronic exchange of documents or otherwise at the offices of Seller, on the Closing Date, unless another place shall be agreed to by the Parties.

4.2	Seller Closing Deliveries. At Closing, Seller shall deliver or cause to be delivered to Buyer:

	(i)	the Bill of Sale and General Assignment Agreement (the “Bill of Sale and General Assignment Agreement”) attached hereto as Exhibit 6, duly executed by Seller;

	(ii)	the Patent Assignment Agreement, duly executed by Seller;

	(iii)	copies in electronic form of the documents placed in the Data Room prior to the Closing Date;

	(iv)	a duly executed copy of the Transfer Letter for each IND and CTA;

	(v)	the Lock-Up Agreement, duly executed by Seller; and

	(vi)	a copy of all Consents and Waivers, duly executed by Seller and each consenting Third Party.

4.3	Buyer Closing Deliveries. At Closing, Buyer shall deliver or cause to be delivered to Seller:

(i)

the Warrant, duly executed by the Buyer;

(ii)

the Lock-Up Agreement, duly executed by MDB Capital;

(iii)

the Bill of Sale and General Assignment Agreement, duly executed by Buyer;

(iv)

the Patent Assignment Agreement, duly executed by Buyer; and

(v)

a copy of all Consents and Waivers to which Buyer is a party, duly executed by Buyer.

5.	REPRESENTATIONS AND WARRANTIES OF SELLER

5.1	Seller hereby makes to Buyer the following representations and warranties set forth in Section 5.2 through 5.21, as of the Closing Date.

5.2	Corporate Organization. Seller is a corporation duly organized, validly existing and in good standing under the Applicable Laws of the State of Delaware.

5.3	Authority of Seller. Seller has all necessary power and authority and has taken all actions necessary to enter into this Agreement and the other Transaction Documents and to carry out the transactions contemplated hereby and thereby. This Agreement and the other Transaction Documents have been duly and validly executed and delivered by Seller and, when executed and delivered by Buyer, will constitute legal, valid and binding obligations of Seller enforceable against it in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Applicable Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Applicable Laws relating to the availability of specific performance, injunctive relief or other equitable remedies. The execution, delivery and performance of this Agreement and all agreements, documents and instruments executed and delivered by Seller pursuant hereto, have been duly authorized by all necessary corporate or other action of Seller.

5.4	Non-Contravention. The execution and delivery by Seller of this Agreement and the other Transaction Documents to which it is a party, does not, and the performance by it or its relevant Affiliates of its or their obligations under this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby will not:

(i)

conflict with or result in a material violation or breach of any of the terms, conditions or provisions of the Certificate of Incorporation or Bylaws or other organizational documents of Seller or its relevant Affiliates or of any Program Contract;

(ii)

assuming the receipt of the Required Consents, conflict with or result in a material violation or breach of any term or provision of any Applicable Law that applies to Seller, the Product or the Purchased Assets;

(iii)

other than the Required Consents, the Transfer Letter and the transfer of any other regulatory documentation, require from Seller any notice to, declaration or filing with, or consent or approval of, any Governmental Authority in any country or other Third Party (other than any filing of Product Patents required to be made in accordance with the terms of this Agreement); or

(iv)

assuming the receipt of the Required Consents, accelerate any obligation under, or give rise to a right of termination of, any Program Contract.

5.5	Title; Encumbrances. Seller has exclusive, good, valid and marketable title to all of the Purchased Assets and full right and power to sell, convey, assign, transfer and deliver such title to Buyer, in each case free and clear from any and all Encumbrances, except with respect to any Permitted Encumbrance.

5.6	Contracts. Seller has made available to Buyer true, correct and complete copies of the Program Contracts. Except as set forth on Schedule 5.6 of the Disclosure Schedules, no cancellation of any Program Contract has occurred, Seller has not received any written notice of cancellation of any Program Contract by the other party thereto and, each Program Contract is legal, valid, binding and enforceable in all material respects in accordance with its terms with respect to Seller and, to the Knowledge of Seller, with respect to each other party to such Program Contract, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Applicable Laws affecting the enforcement of creditors’ rights in general and general principles of equity and the discretion of courts in granting equitable remedies. There does not exist under any Program Contract any material breach or material event of default, or event or condition that, after notice or lapse of time or both, would constitute a material breach or material event of default thereunder on the part of Seller or any of its Affiliates or, to Seller’s Knowledge, on the part of any other party thereto. The JDRF Agreement has been terminated and all obligations thereunder have been satisfied.

5.7	Intellectual Property.

(i)

As of the Closing Date each item of Product Intellectual Property is Controlled by Seller free and clear of any Encumbrances, other than the Permitted Encumbrances. The Product Intellectual Property, together with the Related Technology (the “Program IP”), constitutes all of the intellectual property Controlled by Seller and/or any of its Affiliates as of the Closing Date that is used or held for use in connection with, or otherwise necessary or useful for the manufacture, Development or Commercialization of the Product. Except as set forth on Schedule 5.7(i) of the Disclosure Schedules, neither Seller, nor any of its Affiliates, transferred ownership of, or granted any license of, or right to use, or authorized the retention of any rights to use or joint ownership of any Product Intellectual Property to any other Person.

(ii)

Exhibit 2 sets forth a true, correct and complete list of all Patents Controlled by Seller that are solely and exclusively related to the Product (the “Listed Patents”) including, in each case, the title, jurisdiction(s) in which each Patent was or is filed, and the respective application number, patent number (if any), filing date and issuance date (if any). Seller has taken all actions required to duly file and maintain the Listed Patents in a timely manner, including the timely submission of all necessary filings in accordance with the legal and administrative requirements of the appropriate Government Authority. Neither Seller nor any of its Affiliates has received any written notice of any inventorship challenge, ownership dispute, Third Party right, interference, patentability, validity or enforceability with respect to any Listed Patent. Seller has made timely payment of any filing, registration, examination, maintenance, annuity and renewal fees due with respect to the Listed Patents, and the Listed Patents are not subject to any unpaid fees or taxes for filings falling due within sixty (60) days after the Closing Date.

(iii)

Seller has not received any written communication from any Person (A) challenging, or threatening to challenge, the right of Seller or any of its Affiliates to use, exercise, sell, license, transfer or dispose of any Program IP or the Product, or (B) challenging the ownership, validity or enforceability of any Program IP. To Seller’s Knowledge, (A) all issued Patents included in the Listed Patents are valid, subsisting, and enforceable; and (B) all Patent applications included in the Listed Patents are subsisting and, to Seller’s Knowledge, valid and enforceable. Seller and its Affiliates have complied (and to Seller’s Knowledge, any other Person involved in filing, maintaining and prosecution of the Listed Patents, have complied) in all material respects with Applicable Law regarding the duty to disclose and duties of candor in the filing, maintaining and prosecution of the Listed Patents.

(iv)

Schedule 5.7(iv) lists all licenses, sublicenses and other agreements in effect as of the Closing Date to which Seller or any of its Affiliates is a party and pursuant to which any Third Party is granted (A) any license or other right to make, have made, use, sell, have sold, offer for sale, import or otherwise distribute or exploit any Product, including any materials transfer agreements and research agreements related to the Product, and any other material instrument by which the Product has been provided to any Third Party for research or any other purpose, (B) any covenant not to assert/sue or other immunity from suit under or any other rights to, any Product Intellectual Property, (C) any ownership right or title, whether actual or contingent, to any Product Intellectual Property, or (D) an option or right of first refusal relating to any Product Intellectual Property (collectively, “Outbound Licenses”). Seller has delivered or otherwise made available to Buyer accurate and complete copies of all Outbound Licenses, and Seller or its applicable Affiliate is in compliance with (and, to Seller’s Knowledge, each other party to such Outbound Licenses are in compliance with) all material terms and conditions of all Outbound Licenses. Except as set forth on Schedule 5.7(iv), neither Seller nor any of its Affiliates is party to any contract that provides for earn-outs, milestone payments, royalties or other contingent payments to be paid to Seller or its Affiliates related to the development, approval, manufacture, use, sale, offer for sale, or import or other exploitation of any Product.

(v)

Schedule 5.7(v) lists all licenses, sublicenses and other agreements in effect as of the Closing Date to which Seller or any of its Affiliates is a party and pursuant to which any Third Party grants to Seller or any of its Affiliates (A) any license or other right to make, have made, use, sell, have sold, offer for sale, import or otherwise distribute or exploit any Product, (B) any covenant not to assert/sue or other immunity from suit under or any other rights to, any intellectual property rights claiming or covering the development, approval, manufacture, use, sale, offer for sale, or import or other exploitation of any Product and/or otherwise related to the Product Intellectual Property, (C) any ownership right or title, whether actual or contingent, to any intellectual property rights claiming or covering the development, approval manufacture, use, sale, offer for sale, or import or other exploitation of any Product and/or otherwise related to the Product Intellectual Property, or (D) an option or right of first refusal relating to any intellectual property rights claiming or covering the development, approval, manufacture, use, sale, offer for sale, or import or other exploitation of any Product and/or otherwise related to the Product Intellectual Property (collectively, “Inbound Licenses”). Schedule 5.7(v) also identifies all Inbound Licenses requiring Seller or any of its Affiliates to license, assign or otherwise grant rights to any Third Party for any additions, modifications or improvements to any Product Intellectual Property made by or for Seller or its Affiliates. Seller has delivered or otherwise made available to Buyer copies of all Inbound Licenses, and Seller or its Affiliate, as applicable, is in compliance with (and, to Seller’s Knowledge, each other party to such Inbound Licenses are in compliance with) all material terms and conditions of all Inbound Licenses.

(vi)

Schedule 5.7(vi) lists agreements for Development (including pre-clinical and clinical) or other services currently being provided by any Third Party or under which Seller has outstanding obligations related to the Product and/or the Product Intellectual Property (“Service Contracts”). Seller has delivered or otherwise made available to Buyer copies of all Service Contracts, and Seller or its Affiliate, as applicable, is in compliance with (and, to Seller’s Knowledge, each other party to such Service Contracts are in compliance with) all material terms and conditions of all Service Contracts.

(vii)

Except as set forth in Schedule 5.7(vii) of the Disclosure Schedules, neither Seller, nor any of its Affiliates, has received any written communication, claim or demand from any Third Party concerning Third Party intellectual property rights in connection with the Product, or alleging that any material infringement, violation or misappropriation of any Third Party’s intellectual property rights has occurred with respect to the Program IP or as a result of the manufacture, Development or Commercialization of the Product. During the last three (3) years, neither Seller nor any of its Affiliates has received any written communication alleging that the conduct of the practice of any Program IP violates any right to privacy or publicity of any Person, violates any Applicable Laws or constitutes unfair competition or trade practices under Applicable Law. To the Knowledge of Seller as of the Closing Date, neither the past or current Development, manufacture (including use of certain cells to produce Teplizumab for the Product), Commercialization, use, sale or import of Teplizumab or the Product has or would infringe, misappropriate or otherwise violate the intellectual property rights of any Third Party as of the Closing Date.

(viii)

Seller has taken customary measures and precautions necessary to protect and maintain the confidentiality of the Product Know-How. During the last three (3) years, neither Seller nor any Seller Affiliate has received any written communication alleging any violation of Applicable Laws pertaining to the privacy and security of protected health information within any clinical data or regulatory materials related to the Product.

(ix)

Each current or former employee, consultant and independent contractor employed or engaged by Seller or any of its Affiliates in the manufacture, Development or Commercialization of Product has executed a valid and binding written agreement (A) expressly assigning to Seller all right, title and interest in any intellectual property rights which relate the Product and were invented, created, developed, conceived or reduced to practice during the term of such employee’s, consultant’s or and independent contractor’s employment or engagement; and (B) requiring each such employee, consultant or independent contractor to protect and preserve all applicable Program IP. Such assignments have been directly assigned to Seller or its Affiliates.

(x)

Except as set forth in Schedule 5.7(x) of the Disclosure Schedules, neither Seller nor any of its Affiliates has (A) sought, applied for or received any support, funding, resources, materials or assistance from any Government Authority, university, college or other educational or non-profit institution or research center in connection with the creation or development of the Product Intellectual Property or the Product, or (B) used any facilities of a university, college, or other educational institution or research center in the development of any Product or the creation or development of the Product Intellectual Property. To Seller’s Knowledge, no current or former employee, consultant or independent contractor who was in any way involved in (or has in any way contributed to) the creation or development of the Product Intellectual Property or the Product has performed services for any Government Authority, university, college or other educational or non-profit institution or research center during a period of time during which such employee, consultant or independent contractor was also performing services for Seller or Seller Affiliates that would result in any adverse claim or right relating to the Product Intellectual Property. Except as set forth in Schedule 5.7(x) of the Disclosure Schedules, no Government Authority, university, college or other educational or non-profit institution or research center has any claim of right to ownership of or other liens, claims or interests with respect to the Product Intellectual Property.

5.8

Compliance with Law. Seller has complied in all material respects with and is not in material breach, violation or noncompliance of any Applicable Laws with respect to the ownership, use, manufacture or Commercialization of the Product, except for such non-compliance as would not reasonably be expected to materially adversely affect Buyer’s interest in the Purchased Assets or Buyer’s ability to Develop, manufacture or Commercialize any Product.

5.9

Litigation. During the past five (5) years there have been no, and as of the Closing Date there are no Third Party Claims pending or, to the Knowledge of Seller, threatened against Seller, relating to, affecting or arising in connection with (i) a Product, (ii) the Purchased Assets, (iii) this Agreement, (iv) the Related Technology or (v) the transactions contemplated by this Agreement. To the Knowledge of Seller, no event has occurred, and no condition or circumstance exists, that can be reasonably expected to serve as a basis for the commencement of any such Third Party Claims against Seller with respect to the manufacture or Development of a Product until the Closing Date. Neither the Related Technology, nor the Purchased Assets are subject to any judgment, order, writ, injunction, decree or award of any court, arbitrator or governmental department, commission, board, bureau, agency or instrumentality against Seller that can reasonably be expected to materially and adversely affect, prevent, impair or delay the consummation of this Agreement.

5.10

Regulatory Compliance; Debarment. As of the Closing Date: (i) there is no pending or, to the Knowledge of Seller, threatened Action or Proceeding by a Governmental Authority against Seller relating to the Product, the Related Technology or the Purchased Assets, (ii) there is no pending or, to the Knowledge of Seller, threatened Action or Proceeding by a Governmental Authority against a Product Developed, manufactured or Commercialized by or on behalf of Seller or against any Purchased Assets, (iii) there is no act or omission by, or event or circumstance known to the Seller that, to the Knowledge of the Seller, would or reasonably would be expected to result in an Action or Proceeding by a Governmental Authority against Seller relating to the Product, the Related Technology or the Purchased Assets, (iv) all required submissions to the FDA related to Seller’s manufacture or Development of the Product have been made, (v) all submissions made by or on behalf of Seller to the FDA or any other Governmental Authority, if any, are accurate and complete in all material respects; (vi) there is no arrangement to which Seller is a party or authorized by Seller providing for any rebates, kickbacks or other forms of compensation that are unlawful to be paid to any Person in return for the referral of business or for the arrangement for recommendation of such referrals, (vii) neither Seller, nor any individual who is an officer or director of Seller as of the Closing Date, nor, to the Knowledge of Seller, any other employee, consultant, agent of Seller or any of Seller’s predecessors in interest or its collaborators, directly involved in the Development or manufacture of a Product (A) has been convicted of, charged with or, to the Knowledge of Seller, investigated for any offense related to healthcare, or (B) has been convicted of, charged with or, to the Knowledge of Seller, investigated for a violation of Applicable Laws related to fraud, theft, embezzlement, breach of fiduciary responsibility, financial misconduct, obstruction of an investigation or distribution of controlled substances, (C) has engaged in any conduct that has resulted, or would reasonably be expected to result, in debarments under 21 U.S.C. § 335a(a) or any similar Applicable Laws, or (D) committed an act, made a statement or failed to make a statement that would provide the basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991), (viii) there have been no recalls, field notifications or seizures or adverse regulatory actions taken (or, to the Knowledge of Seller after reasonable investigation, threatened) by any Governmental Authority with respect to the Product or, to the Knowledge of Seller, an ingredient of a Product, including any such actions materially and adversely affecting facilities where the Product or Product ingredients are manufactured, produced, processed, packaged or stored for Seller, and Seller has not, either voluntarily or at the request of any Governmental Authority, initiated or participated in a recall of a Product.

5.11

Disclosures. Seller has made available to Buyer true, correct and complete copies of (i) all Program Contracts; (ii) the INDs and CTAs and all material Product related information that Seller is required to maintain pursuant to the requirements of the FDA, including Product complaint files and labeling change files, (iii) all Patents Controlled by Seller, to the extent not publicly available, relating to the Product or its manufacture or Commercialization and to the extent included in the Product Patents, (iv) the Transferrable Books and Records, including the complete regulatory file for the Product. Neither Seller nor any Affiliate is a party to any unwritten agreement directly relating to the Development, manufacture or Commercialization of Product that would materially adversely affect the sale, use, manufacture or Commercialization of a Product. Except as set forth on Schedule 5.11 of the Disclosure Schedules, Seller has not granted to a Third Party any right, and no Third Party has any right under the INDs and CTAs or the Product Intellectual Property, to manufacture, Develop or Commercialize the Product. To the Knowledge of Seller, all information provided by Seller to Buyer relating to the manufacture, Development and Commercialization of the Product has not contained any untrue statement of a material fact or intentionally omitted to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances under which they were made.

5.12

Brokers. Seller has not retained any broker in connection with the transactions contemplated under this Agreement. Buyer will have no obligation to pay fees of any brokers, finders, investment bankers, or financial advisors engaged by Seller in connection with this Agreement or the transactions contemplated hereby.

5.13

Solvency. Seller has entered into this Agreement in good faith as a result of arms-length negotiations with Buyer. Seller is not entering into this Agreement or any transaction contemplated hereunder with the intent to hinder, delay or defraud any Person to which it is, or may become, indebted. As of the Closing Date, Seller has the capacity and financial capability to comply with and perform all of the covenants and obligations under this Agreement. Further, as of the Closing, giving effect to the consummation of all of the transactions contemplated by this Agreement, including, without limitation, the transfer and delivery of the Purchased Assets, will not cause Seller to be insolvent under any Applicable Law relating to fraudulent transfers or fraudulent conveyance.

5.14

[****] Agreement; Third Party Obligations. The [****] Agreement has been terminated and the [****] described in Amendment No. 2 to the [****] Agreement, dated as of [****], has been completed. There are no outstanding obligations or liabilities related to the Product or the Purchased Assets under the [****] Agreement. The total amount due under the [****]Agreement, as agreed between [****]Buyer and Seller in the [****] Consent is [****] U.S. dollars ($[****]) and is exclusively due as a royalty on sales of Product. Schedule 5.14(ii) sets forth a true, complete and correct list of the Third Party Obligations that would be payable on sales of Product.

5.15

Clinical Trials. Schedule 5.15 contains a complete listing of all clinical trials conducted using Product, including any investigator-Sponsored studies. The preclinical studies and clinical trials of the Product conducted by or on behalf of Seller were and, if still ongoing, are being conducted in all material respects in accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all Applicable Laws (including, to the extent applicable, cGLPs and cGCPs). All required IRB approvals have been obtained and are currently in place for any ongoing clinical trials of Product. Valid informed consents have been obtained and are in the Seller’s possession or control for all patients who have been in Seller’s clinical trials of Product. All adverse experiences occurring in clinical trials have been reported to FDA as required. All Product used in such clinical trials materially complied with all Applicable Laws (including, to the extent applicable, cGMPs), and there have not been any material deficiencies or defects in such Product. Neither Seller, nor any of its agents, or to its Knowledge and of its collaborators, have received any written notices or correspondence from the FDA or any other Government Authority requiring the termination, suspension, hold or material modification of any preclinical study or clinical trial of a Product conducted by or on behalf of Seller. Neither Seller nor any of its agents, or to its Knowledge any of its collaborators, have received any written communication from any Person threatening any claim or lawsuit against Seller, any of its agents or its collaborators, arising from the administration of a Product to any Person in the course of any clinical trial conducted by or on behalf of Seller. FDA has not issued any 483 or finding of deficiency or non-compliance in respect of the Product, any clinical trial of the Product, or any Third Party involved in the conduct of a clinical trial of the Product.

5.16

Undisclosed Liabilities. To Seller’s Knowledge, except for liabilities to Seller and any liabilities which are disclosed on Schedule 5.14(ii), there is no financial or economic liability that would be due in connection with the Development, manufacturing or Commercialization of the Product under agreements that were entered into by Seller, or to its Knowledge, its predecessors in interest prior to the Closing Date.

5.17

Transferred Materials; Suppliers. The Transferred Materials have been manufactured in compliance with all Applicable Laws including cGMP and have met all applicable specifications, except as would not materially adversely affect Buyer’s ability to manufacture, Develop or Commercialize the Product. Neither Seller nor any Third Party has received any written notices or correspondence from the FDA or any other Government Authority regarding the Transferred Materials.

5.18

Sufficiency; Development and Manufacturing Pre-Closing. The Transferable Notes and Books accurately describe and document the Development and manufacturing of the Product in the manner done by Seller prior to the Closing Date. The Purchased Assets, together with the Related Technology, constitute the intellectual property rights necessary for the Development or manufacturing of the Product in the manner done by Seller prior to the Closing Date. Except for intellectual property rights that constitute Related Technology or that are included in the Purchased Assets, there are no intellectual property rights that Seller has an interest in prior to the Closing Date that are necessary for the Commercialization of the Product.

5.19

Data Room. All information and documentation contained in the Data Room, to which Buyer has been provided access, is true and accurate in all material respects and reflects the subject matter to which it relates. The Data Room (i) contains all material information in order to give a true and documentation fair view of the Purchased Assets, the Assumed Liabilities and the Product, (ii) does not include any matter of material importance which is incorrect or misleading, and (iii) does not omit any information which is of material importance, which by omission would make the contents of the Data Room materially incorrect or misleading, except as would not materially adversely affect Buyer’s interest in the Purchased Buyer’s interest in the Purchased Assets or Buyer’s ability to Develop, manufacture or Commercialize any Product.

5.20

Insurance. All of the Purchased Assets which are of an insurable nature have at all material times been insured against all such risks as persons carrying on a similar business to the Seller would be expected to cover by insurance. Seller has at all relevant times maintained adequate product liability insurance and insurance covering clinical trials related to the Product performed by it or on its behalf.

5.21

Accredited Investor. Seller is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act of 1933 (the “Securities Act”), as amended. The Seller has substantial experience in evaluating and investing in securities in companies similar to the Buyer so that Seller is capable of evaluating the merits and risks of Seller’s investment in Buyer (pursuant to the Warrant) and has the capacity to protect Seller’s own interests. The Seller is acquiring the Warrant (and the shares issuable upon exercise of this Warrant) for investment for Seller’s own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Seller understands that the Warrant (and the shares issuable upon exercise of the Warrant) have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Seller’s representations as expressed herein and in the Warrant.

5.22

No Other Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 5 OR IN ANY OTHER TRANSACTION DOCUMENTS, SELLER DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING ANY INFORMATION FURNISHED BY SELLER WITH REGARD TO THE PRODUCT OR THE PURCHASED ASSETS, INCLUDING THE FUTURE PROFITABILITY OF ANY PRODUCT, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

6. REPRESENTATIONS AND WARRANTIES OF BUYER

6.1	Representations and Warranties. Buyer hereby makes to Seller the representations and warranties set forth in Sections 6.2 through 6.8, as of the Closing Date.

6.2	Corporate Organization. Buyer is a corporation duly organized, validly existing and in good standing under the Applicable Laws of Delaware.

6.3

Authority of Buyer. Buyer has all necessary power and authority and has taken all actions necessary to enter into this Agreement and the Transaction Documents and to carry out the transactions contemplated hereby and thereby. This Agreement and all Transaction Documents have been duly and validly executed and delivered by Buyer and, when executed and delivered by Seller, will constitute legal, valid and binding obligations of Buyer enforceable against it in accordance with their terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other Applicable Laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by Applicable Laws relating to the availability of specific performance, injunctive relief or other equitable remedies. The execution, delivery and performance of this Agreement and all agreements, documents and instruments executed and delivered by Buyer pursuant hereto, have been duly authorized by all necessary corporate or other action of Buyer.

6.4	Non-Contravention. The execution and delivery by Buyer of this Agreement does not, and the performance by it of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not:

	(i)	conflict with or result in a material violation or breach of any of the terms, conditions or provisions of the Articles of Incorporation, Bylaws or other organizational documents of Buyer;

	(ii)	assuming the receipt of the Required Consents, violate, conflict with or result in a violation of, or constitute a default (whether after the giving of notice, lapse of time or both) under, any provision of any Applicable Law, regulation or rule, or any order of, or any restriction imposed by, any court or governmental agency applicable to Buyer;

	(iii)	other than the Required Consents, require from Buyer any notice to, declaration or filing with, or consent or approval of any Governmental Authority in any country or other Third Party; or

	(iv)	assuming the receipt of the Required Consents, violate or result in a violation of, or conflict with or constitute or result in a violation of or default (whether after the giving of notice, lapse of time or both) under, accelerate any obligation under, or give rise to a right of termination of, any contract, agreement, permit, license, authorization or other obligation to which Buyer is a party or by which Buyer or any of its assets are bound.

6.5

Financial Capability. Buyer has entered into this Agreement in good faith as a result of arms-length negotiations with Seller. Buyer is not entering into this Agreement or any transaction contemplated hereunder with the intent to hinder, delay or defraud any Person to which it is, or may become, indebted. Buyer believes in good faith that it has or will have at the time required to perform the capacity and financial capability to comply with and perform all of the covenants and obligations under this Agreement.

6.6

Brokers. Buyer has not retained any broker in connection with the transactions contemplated hereunder. Seller will have no obligation to pay fees of any brokers, finders, investment bankers, or financial advisors engaged by Buyer in connection with this Agreement or the transactions contemplated hereby.

6.7

Diligence Investigation. Buyer has conducted its own independent investigation, review and analysis in connection with this Agreement and the transactions contemplated hereby, including regarding the Purchased Assets, the Assumed Contracts and the Product and the manufacture and Development thereof. Such investigation shall in no way limit any claims by Buyer resulting from any breach by Seller of any of its representations, warranties and covenants contained herein, including, without limitation, claims arising from or fraud or intentional misconduct.

6.8

Buyer Stock. The authorized capital stock of Buyer consists of (i) 50,000,000 shares of common stock, par value $0.0001 per share (“Buyer Common Stock”), 10,000,000 of which are issued and outstanding and (ii) 25,000,000 shares of preferred stock, $0.0001 par value, of which 13,000,000 shares have been designated as Series A Preferred Stock (“Buyer Series A Preferred Stock”), of which 11,381,999 shares of Buyer Series A Preferred Stock are issued and outstanding. Buyer has reserved 3,869,424 shares of Buyer Common Stock for issuance to officers, directors, employees and consultants of Buyer pursuant to its 2017 Equity Incentive Plan duly adopted by the board of directors of Buyer and approved by the stockholders of Buyer, of which 2,656,435 have been issued to employees and consultants of the Buyer. Buyer has reserved 558,740 shares of Buyer Series A Preferred Stock for issuance pursuant to that certain Warrant, dated as of April 25, 2017, in favor of MDB Capital Group, LLC. There are no bonds, debentures, notes or other indebtedness having general voting rights (or convertible into securities having such rights) (“Voting Debt”) of Buyer issued and outstanding. Except as set forth above, there are no options, warrants, calls, subscriptions or other rights, agreements, arrangements or commitments of any kind relating to the issued or unissued capital stock of Buyer, obligating Buyer to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock or Voting Debt of, or other equity interest in, Buyer or securities convertible into or exchangeable for such shares or equity interests, or obligating Buyer to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement, arrangement or commitment.

6.9

No Other Representations and Warranties. EXCEPT FOR THE REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 6 OF THIS AGREEMENT OR IN ANY OTHER TRANSACTION DOCUMENTS, BUYER DISCLAIMS ALL OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, RELATED TO THIS AGREEMENT.

7. COVENANTS OF THE PARTIES

7.1 Cooperation.

	(i)	Each Party shall cooperate fully with the other, as promptly as is reasonably practicable, in preparing and filing all notices, applications, submissions, reports and other instruments and documents that are necessary, proper or advisable under Applicable Law or required under Program Contracts or by Third Parties to consummate and make effective the transactions contemplated by this Agreement and obtaining any consent or approval of any Governmental Authority or other Third Party whose consent may be required to consummate and make effective the transactions contemplated by this Agreement, including the Consents and Waivers (the “Required Consents”).

	(ii)	Seller shall have no obligation to make any payments or provide other consideration to Buyer or any Third Party other than any amounts that are due and payable by Seller as of the Closing, if any, or are otherwise required by the terms of this Agreement or the other Transaction Documents. Seller’s obligation to transfer or assign any Assumed Contract shall be contingent upon Seller’s receipt of such Required Consent. Pending receipt of any Required Consent with respect to an Assumed Contract, the Parties shall use their commercially reasonable efforts to implement an alternative arrangement to permit Buyer to receive substantially similar rights and for Buyer to assume substantially similar obligations under such Assumed Contract as if such impediment to assignment or transfer did not exist; provided, however, that commercially reasonable efforts shall not include payment to Seller or Buyer, as applicable, or any Third Party other than payment of amounts due and payable by Seller and or Buyer, as applicable, as of the Closing.

7.2	Further Assurances. Seller shall from time to time, at the reasonable request of Buyer and at Buyer’s expense, (i) provide such further information in Seller’s possession, (ii) execute and deliver, or cause to be executed and delivered, such other instruments of conveyance and transfer, certificates, deeds or other documents, and (iii) take, or cause to be taken, all other actions and do, or cause to be done, such other acts and things, all as promptly as practicable as Buyer may reasonably request in order to more effectively consummate the transactions contemplated by this Agreement and to vest in Buyer good and marketable title to the Purchased Assets.

7.3	Confidentiality. Each Receiving Party shall maintain the confidentiality of any Confidential Information received from a Disclosing Party, and shall not disclose such information to any Third Party without the prior written consent of such Disclosing Party, except as otherwise provided in this Agreement (it being understood that any Confidential Information included in the Purchased Assets shall become Confidential Information of Buyer following Closing). As used herein, Confidential Information shall be deemed to include (i) all information that either Party provides in connection with this Agreement or the transactions contemplated hereby (including, without limitation, any claim or dispute arising out of or related to this Agreement or the transactions contemplated hereby, or the interpretation, making, performance, breach or termination thereof) identified to the other in writing as confidential or the nature of which or the circumstances of the disclosure of which would reasonably indicate that such information is confidential, this Agreement and all information concerning this Agreement (which shall be deemed the Confidential Information of both Parties); and (ii) the Purchased Assets that are not generally available to the public and including, without limitation, any information provided or made available following the Closing pursuant to this Agreement (including, without limitation, any information related to Net Sales any and all books and records, work papers, documents, schedules or other materials or information).

7.4	Legally Compelled Disclosure. In the event that a Receiving Party is required by Applicable Laws to disclose any Confidential Information of its Disclosing Party to any Governmental Authority in order to obtain regulatory approval for the Product, in connection with a bona fide legal process (including in connection with any bona fide disputes hereunder) or under the rules of the securities exchange upon which its securities are traded, the confidentiality requirements under Section 7.3 shall not apply, solely with respect to the Confidential Information required to be disclosed by Applicable Law, and so long as such Receiving Party (i) limits disclosure to such information required by Applicable Law while maintaining the confidentiality of all other Confidential Information of its Disclosing Party, and (ii) promptly gives such Disclosing Party advance notice of such disclosure and an opportunity to seek a protective order or confidential treatment. In the event of disclosure required by Applicable Laws under this Section 7.4, the Receiving Party shall cooperate in any such limitation on disclosure efforts at the Disclosing Party’s reasonable request and expense.

7.5	Press Releases and Other Permitted Disclosures.

(i)

Attached as Exhibit 11, is a copy of the press release to be issued by the Buyer on the Closing Date. Except as set forth in the previous sentence or otherwise in this Section 7.5, no press release, public statement or disclosure concerning the existence or terms of this Agreement shall be made, either directly or indirectly, by either Party, without first obtaining the written approval of the other Party, which such approval shall not be unreasonably withheld or delayed; provided that Seller may disclose the receipt of any milestone payment amount under this Agreement. Once any public statement or disclosure has been approved in accordance with this Section 7.5, then either Party may appropriately communicate information contained in such permitted statement or disclosure.

	(ii)	Each Party may disclose the existence and terms of this Agreement in confidence: (a) (1) to its attorneys, professional accountants, and auditors, and (2) bankers or other financial advisors in connection with an initial public offering, private financing or other strategic transaction, or corporate valuation for internal purposes; provided that any such disclosure to such professional accountants, auditors, bankers or other financial advisors is under an agreement to keep the terms of confidentiality and non-use no less rigorous than the terms contained in this Agreement and to use such information solely for the applicable purpose permitted pursuant to this Section 7.4(ii)(a); (b) to potential acquirers (and their respective attorneys and professional advisors), in connection with a potential merger, acquisition or reorganization; provided that such disclosure is under an agreement according to terms of confidentiality and non-use that are no less rigorous than the terms contained in this Agreement and require the use of such information solely for the purpose permitted pursuant to this Section 7.5(ii)(b); (c) to existing or potential investors, lenders or permitted assignees of such Party (and their respective attorneys and professional advisors); provided that such disclosure is under an agreement according to terms of confidentiality and non-use that are no less rigorous than the terms contained in this Agreement; and (d) to current and potential licensees or sublicensees or potential acquirors of such Party or of the Product (and their respective attorneys and professional advisors).

	(iii)	Notwithstanding the foregoing provisions of this Article 7, a Party may disclose the existence and terms of this Agreement or a Party’s or the Parties’ activities under this Agreement where required, as reasonably determined by the legal counsel of the disclosing Party, by Applicable Law, by applicable stock exchange regulation, as required in connection with filings under applicable securities laws or by order or other ruling of a competent court, although, to the extent practicable, the other Party shall be given prompt notice of any such legally required disclosure to comment and reasonably consider such comments provided by such Party on the proposed disclosure.

	(iv)	Nothing in this Section 7.5 shall be deemed to restrict Buyer from providing public updates on the Product or its Development, manufacturing or Commercialization as deemed necessary or advisable by the Buyer in its sole discretion; provided that Buyer does not use the name of Seller or its Affiliates (except to the extent referred to as the manufacturer of Product or licensor of certain Product-related rights, as may be necessary under applicable law or the Assumed Contracts) in any such public updates and does not otherwise disclose any Confidential Information of Seller.

7.6

Commercialization of Products. As of the Closing Date, Buyer shall be solely and exclusively responsible for the manufacture, Development and Commercialization of the Products, including all decisions pertaining to such manufacture, Development or Commercialization, including any recall of Products.

7.7	Regulatory Matters. A copy of each Transfer Letter authorizing the transfer of ownership of the INDs and CTAs as well as the orphan drug designation owned by Seller to Buyer shall be delivered on the Closing Date and within ten (10) Business Days after the Closing Date, (a) Seller shall submit the Transfer Letters to the relevant Governmental Authorities and shall notify Buyer of such submission on the date submitted (providing Buyer an electronic copy of the submission with such notification) and (b) shall provide to Buyer the full regulatory file for the INDs and CTAs held by the Seller, including all available electronic meta data. Upon notification of the Seller’s submission of the Transfer Letter to the relevant Governmental Authorities, Buyer shall execute and submit to the relevant Governmental Authorities letters acknowledging Buyer’s commitment to assume ownership of the INDs and CTAs and the orphan drug designation owned by Seller. As of the Closing Date, except as otherwise set forth in this Section 7.7, Buyer shall be solely responsible for taking any actions necessary to (i) obtain any documentation required to maintain the INDs and CTAs or the orphaned drug designation owned by Seller or obtain any further authorizations under any Applicable Law, and (ii) otherwise comply with any Applicable Law with respect to regulatory authorizations. During the period between the Closing Date and the date that is that is eighteen (18) months from the Closing Date, Seller shall provide reasonable assistance as requested by Buyer in connection with Buyer’s fulfilment of its obligations under this Section 7.7. Except as set forth in any further written agreement between the Parties, as of the Closing Date, Buyer shall be solely responsible for investigating and reporting adverse experiences for the Product to any Governmental Authorities and addressing any such Governmental Authorities’ inquiries related to the safety of the Product; provided, however, that Seller shall provide reasonable assistance and cooperation to Buyer to the extent any such investigations or inquiries related to the manufacture or development of the Product prior to the Closing Date by or on behalf of Seller. Except as set forth in any further written agreement between the Parties, as of the Closing Date, Buyer shall be solely responsible for addressing any Person’s medical inquiries or complaints relating to the Product; provided, however, that Seller shall provide reasonable assistance and cooperation to Buyer to the extent any such inquiries or complaints related to the manufacture or Development of the Product prior to the Closing Date by or on behalf of Seller.

7.8	Development and Commercialization of Products after Closing. Following the Closing Date Buyer agrees to (i) use Reasonable Commercial Efforts to commence a [****] in accordance with the Development Plan; and (ii) use Reasonable Commercial Efforts to manufacture, Develop and Commercialize at least one Product in the United States and Europe. Buyer shall provide to Seller, semi-annually, written reports on its completed and planned Development and Commercialization activities with respect to each Product. Each such report shall include an update regarding Development activities conducted by or on behalf of Buyer (including activities conducted under the Development Plan) and progress towards achieving the Development and Regulatory Milestones.

8. MANUFACTURING

8.1

Manufacturing and Quality Agreements. As part of the Technology Transition Plan described in Section 2.7, during the Transition Period, Buyer and Seller shall negotiate in good faith manufacturing transfer and quality agreements for the Product that will include provisions regarding the transfer of: (i) existing clinical material; (ii) all cGMP and non-cGMP bulk drug substance or partially finished drug Product, including API, along with the corresponding cell lines and any specialized and dedicated equipment (e.g., proprietary media, dedicated purification columns/filters, etc.) required for the production of Teplizumab; and (iii) the CMC and quality support and documentation necessary to label, package, release and ship the existing inventory of cGMP finished drug product vials to clinical trial sites and/or a corresponding storage and distribution subcontractor. After the Transition Period, Seller shall continue to provide support on the manufacturing transfer described in this Section 8.1 in accordance with the Technology Transition Plan and in accordance with the terms of Section 2.7 for a period of eighteen (18) months from the Effective Date. Costs incurred by Seller in connection with this Section 8.1 shall be subject to the cost allocation and reimbursement provisions of Section 2.7.

9 INDEMNIFICATION

9.1	Survival of Representations, and Warranties.

	(i)	The Fundamental Representations shall survive the Closing Date indefinitely and shall bind the successors and assigns of the relevant Party, whether so expressed or not, and all such representations and warranties shall inure to the benefit of the successors and assigns of the Parties hereto, whether expressed or not. The “Fundamental Representations” are Sections 5.1 (Corporate Organization), 5.3 (Authority of Seller); 5.4 (Non-Contravention); 5.5 (Title; Encumbrances); 5.14 (Eli Lilly Agreement; Third Party Obligations); 6.2 (Corporate Organization); 6.3 (Authority of Buyer); 6.4 (Non-Contravention) and 6.8 (Buyer Stock).

	(ii)	The Core Representations shall survive the Closing Date for a period of five (5) years, and during such period shall bind the successors and assigns of the relevant Party, whether so expressed or not, and all such representations and warranties shall inure to the benefit of the successors and assigns of the Parties hereto, whether expressed or not. The “Core Representations” are Sections 5.7 (Intellectual Property); 5.10 (Regulatory Compliance); and 5.15 (Clinical Trials).

	(iii)	Except as set forth in subsections (i) and (ii) of this Section 9.1, the representations and warranties of Seller or Buyer contained in Articles 5 and 6 or documents executed in connection herewith shall survive the Closing Date for a period of eighteen (18) months (the “Survival Period”) and during the Survival Period shall bind the successors and assigns of the relevant Party, whether so expressed or not, and all such representations and warranties shall inure to the benefit of the successors and assigns of the Parties hereto, whether expressed or not.

	(iv)	Any claim whether for indemnification or otherwise based upon a breach of any such representation or warranty and asserted prior to the termination of the Survival Period by written notice in accordance with Section 9.2 shall survive until final resolution of such claim.

9.2	Indemnification by Seller. From and after the Closing Date, Seller shall indemnify, defend and hold harmless Buyer, its Affiliates and their respective officers, directors, employees, agents, successors and assigns from and against any and all Damages incurred in connection with any claim, action, suit, litigation, proceeding, arbitration or investigation (whether civil, criminal, administrative, investigative, appellate or informal) by a Third Party, including a Governmental Authority (“Third Party Claims”) arising out of or relating to (i) any breach of any covenant, representation or warranty of Seller in this Agreement, (ii) any Retained Liability or (iii) Seller’s fraud, gross negligence or willful misconduct.

9.3	Indemnification by Buyer. From and after the Closing Date, Buyer shall indemnify, defend and hold harmless Seller, its Affiliates, and their respective officers, directors, employees, agents, successors and assigns from and against any and all Damages incurred in connection with any Third Party Claims arising out of or relating to: (i) any breach of any covenant, representation or warranty of Buyer in this Agreement, (ii) any Assumed Liability or (iii) Buyer’s fraud, gross negligence or willful misconduct.

9.4	Procedure. A Person intending to claim indemnification under this Article 9 (the “Indemnitee”) shall promptly provide written notice to the Party providing indemnification (the “Indemnitor”) of any Third Party Claim with respect to which the Indemnitee intends to claim such indemnification, which notice shall include a description of the Third Party Claim, the amount thereof (if known and quantifiable) and the basis for the Third Party Claim; provided that failure of the Indemnitee to give the Indemnitor notice as set forth herein shall not relieve the Indemnitor of its obligations hereunder, except to the extent that the Indemnitor is prejudiced thereby. The Indemnitor shall have the right, in its sole discretion and at its election by written notice to the Indemnitee within fifteen (15) days after delivering notice of the Third Party Claim to the Indemnitee, to conduct the defense against such Third Party Claim in its own name, provided that the Indemnitor (i) shall keep the Indemnitee reasonably informed regarding the status of such Third Party Claim, (ii) shall provide the Indemnitee the reasonable opportunity to consult with the Indemnitor regarding the defense of such claim, and (iii) may not settle or compromise any such Third Party Claim without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed) unless (A) such settlement or compromise involves no finding or admission of any breach by any Indemnitee of any obligation to any other Person or any violation by any Indemnitee of any Applicable Law, and (B) the sole relief provided in connection with such settlement or compromise is monetary damages that are paid in full by the Indemnitor. If the Indemnitee fails to timely give notice of such election to conduct the defense, it will be deemed to have elected not to conduct the defense of the subject Third Party Claim, and in such event the Indemnitor shall have the right, at its own cost and expense, to conduct the defense in good faith with counsel reasonably satisfactory to the Indemnitee; provided that the Indemnitor (x) shall keep the Indemnitee reasonably informed regarding the status of such Third Party Claim, (y) shall provide the Indemnitee the reasonable opportunity to consult with the Indemnitor regarding the defense of such claim and (z) may not settle or compromise any such Third Party Claim without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed). The Indemnitee, its employees and agents, shall cooperate fully with the Indemnitor and its legal representative(s) in the investigation and defense of any Third Party Claim covered by this Section 9.4.

9.5	Limitation of Damages. The indemnification obligations of a Party under Section 9.2 or Section 9.3 and the liability of a Party for all damages whatsoever arising out of or related to this Agreement and the instruments and agreements contemplated hereby and the transactions contemplated hereby and thereby shall be limited as follows:

	(i)	Insurance. A Party shall not be liable to the extent an Indemnitee or the other Party receives payment from any insurer or other Third Party, but only with respect to amounts actually received from such insurer or other Third Party. The Indemnitor shall remain liable for the balance of any Damages unpaid to the Indemnitee or the other Party.

	(ii)	Negligence, Illegal Act or Willful Misconduct. A Party shall not be liable to the extent that the other Party, its Affiliates or any of their respective officers, directors, employees, agents, successors and assigns caused, by the illegal conduct, gross negligence or willful misconduct, the Damages.

9.6	Insurance. Buyer and Seller shall each maintain a commercial general liability insurance policy or policies to protect against potential liabilities and risk arising out of this Agreement and are as are appropriate to cover the Parties’ respective indemnification obligations hereunder. Upon request, each Party shall provide certificates of insurance to the other evidencing the coverage specifies herein. Neither Party’s liability to the other is in any way limited to the extent of its insurance coverage.

9.7	Limitations on Indemnification. Notwithstanding anything to the contrary herein, (i) Seller shall not have any liability under Section 9.2 for any individual item (or series of related items) where the Damages relating thereto until the aggregate damages related thereto meet or exceed [**] United States dollars ($[]) provided that once the Damages equal or exceed [] United States dollars ($[]), the Seller shall be liable for all Damages from the first dollar and (ii) Seller’s aggregate liability under Section 9.2(i) (other than for breaches of Fundamental Representations or Core Representations, or for claims related to fraud, gross negligence or willful misconduct) shall in no event exceed, on a cumulative basis, [] percent ([]%) of the Aggregate Consideration (as determined from time to time). Notwithstanding anything to the contrary herein, (a) Buyer shall not have any liability under Section 9.3 for any individual item (or series of related items) where the Damages relating thereto until the aggregate damages related thereto meet or exceed [] United States dollars ($[]) provided that once the Damages equal or exceed [] United States dollars ($[]), the Buyer shall be liable for all Damages from the first dollar and (b) Buyer’s aggregate liability under Section 9.3(i) (other than for breaches of Fundamental Representations or Core Representations, or for claims related to fraud, gross negligence or willful misconduct) shall in no event exceed, on a cumulative basis, [] percent ([]%) of the Aggregate Consideration (as determined from time to time). For purposes of this Section 9.7, “Aggregate Consideration” means, as determined from time to time, the sum of each of the following amounts: (A) the [], (B) the []; (C) [] paid to Seller in accordance with Section []; (D) the []; (E) [] paid to Seller in accordance with Section []; (F) the aggregate amount of [], including consideration due to [**] in connection with the consummation of the transactions contemplated under this Agreement. Nothing in this Section 9.7 is intended to, nor shall it, limit Seller’s liability under Sections 9.2(ii) or 9.2(iii) or Buyer’s liability under Section 9.3(ii) or 9.3(iii).

9.8	Cap on Damages. Except for claims involving fraud, gross negligence or willful misconduct and for Seller’s indemnification obligations pursuant to Section 9.2 or Buyer’s indemnification obligations pursuant to Section 9.3, each Party’s aggregate liability under this Agreement (including negligence) shall not exceed the aggregate amounts actually paid (and, with respect to Buyer’s liability hereunder, payable) by Buyer to Seller pursuant to Sections 3.1 through 3.5.

9.9	Set-Off. To the extent that any amount would have been payable to Buyer under Section 9.2 but for the “Aggregate Consideration” limitations set forth in Section 9.7, Buyer shall be entitled to set off such unpaid amount against the BLA Approval Milestone payment subject to the following conditions:

	(a)	the amount set off shall have been (i) agreed to by Seller or (ii) determined by an arbitrator, a court of competent jurisdiction or a Third Party mediator appointed by the Parties to make such determination; and

	(b)	the amount set-off shall not exceed the cap on damages under Section 9.7 after calculating the “Aggregate Consideration” under Section 9.7 with the inclusion of the payment of the BLA Approval Milestone payment.

10. NOTICES

10.1

Save as otherwise provided in this Agreement, any notice, demand or other communication (“Notice”) to be given by either Party under, or in connection with, this Agreement shall be in writing and signed by, on behalf of, the Party giving it. Any Notice shall be served by sending it by email to the address set out in Section 10.2, and/or delivering it by registered mail or courier to the address set out in Section 10.2 and in each case marked for the attention of the relevant Party set out in Section 10.2 (or as otherwise notified from time to time in accordance with the provisions of Section 10.3). Any Notice so served by email and/or registered mail or courier shall be deemed to have been duly given or made as follows:

	(i)	if sent by email, upon acknowledgment of receipt; or

	(ii)	in the case of delivery by registered mail, within five (5) Business Days from the date of dispatch; or

	(iii)	in the case of delivery by nationally recognized overnight courier service, within one (1) Business Day from date of dispatch, provided that in each case where delivery by registered mail or courier occurs after 6pm on a Business Day or on a day which is not a Business Day, service shall be deemed to occur at 9am on the next following Business Day.

10.2	The addressees of the Parties for the purpose of Section 10.1 are as follows:

(i)	Buyer

	Address:	Provention Bio, Inc.
		Email: apalmer@provention.com
		Attention: Ashleigh Palmer

With a copy to counsel, provided that such copy shall not constitute notice to Buyer:

			Lowenstein Sandler LLP
			1251 Avenue of the Americas
			17^thFloor
			New York, NY 10020
			Email:
			mlerner@lowenstein.com; hweinstein@lowenstein.com
			Attention: Michael Lerner;
			Herschel Weinstein

(ii)	Seller

	Address:	MacroGenics, Inc.
		9704 Medical Centre Drive
		Rockville, MD 20850,
		Email:
		Attention: CEO

		with copies to:
			MacroGenics, Inc.
			9704 Medical Center Drive
			Rockville, MD 20850
			Attention: General Counsel

10.3	A Party may notify the other Party of a change to its name, relevant addressee, address or email address for the purposes of this Article 10, provided that such notice shall only be effective on:

	(i)	the date specified in the notification as the date on which the change is to take place; or

	(ii)	if no date is specified or the date is less than five (5) Business Days after the date on which notice is given, the date following five (5) Business Days after notice of any change has been given.

10.4	In providing service it shall be sufficient to prove that the envelope containing such Notice was properly addressed and delivered to the address shown thereon or that the facsimile transmission was made and a facsimile confirmation report was received, as the case may be.

11. MISCELLANEOUS

11.1

Entire Agreement. This Agreement, including all the Exhibits, sets forth the entire understanding of the Parties with respect to the subject matter hereof and cancels and supersedes all previous communications, representations or understandings, and agreements, whether oral or written, between the Parties relating to the subject matter hereof including the Prior Confidentiality Agreement. Information disclosed under the Prior Confidentiality Agreement shall be deemed to be Confidential Information disclosed under this Agreement and subject to the same obligations of confidentiality and use as other Confidential Information disclosed hereunder.

11.2	Amendment. No modification or amendment of any provision of this Agreement shall be valid or effective unless made in writing and signed by duly authorized officers of each Party.

11.3	Assignment. Neither Party may assign, transfer, charge or otherwise encumber this Agreement or any right, benefit or interest under it, nor transfer it without the prior written consent of the other Party provided that a Party may assign this Agreement to any Affiliate or to any successor in interest by way of merger, acquisition or sale of all or substantially all of its assets to which this Agreement relates, provided that such successor agrees in writing to be bound by the terms of this Agreement as if it were the assigning Party. Each Party agrees that, notwithstanding any provisions of this Agreement to the contrary, if this Agreement is assigned by a Party in connection with a merger, acquisition or sale of all or substantially all of its assets, such assignment shall not provide the non-assigning Party with rights or access to any intellectual property or technology of the acquirer of the assigning Party beyond that which is specifically contemplated in this Agreement. This Agreement shall be binding upon the successors and permitted assigns of the Parties. Any assignment not in accordance with this Section 11.3 shall be void.

11.4	Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware, without regard to conflict of law principles. The provisions of the United Nations Convention on Contracts for the International Sale of Goods the 1974 Convention on the Limitation Period in the International Sale of Goods, as amended by that certain Protocol, done at Vienna on April 11, 1980 shall not apply to the Transaction Agreements or any subject matter hereof or thereof.

11.5	Severability. If any of the provisions of this Agreement are held to be void or unenforceable by a court of competent jurisdiction, then such void or unenforceable provisions shall be replaced by valid and enforceable provisions which will achieve as far as possible the economic business intentions of the Parties. However, the remainder of this Agreement will remain in full force and effect, provided that the material interests of the Parties are not affected i.e., the Parties would presumably have concluded this Agreement without the unenforceable provisions.

11.6	Waiver. A waiver of any default, breach or non-compliance under this Agreement is not effective unless signed by the Party granting such waiver. No waiver will be inferred from or implied by any failure to act or delay in acting by a Party in respect of any default, breach, non-observance or by anything done or omitted to be done by the other Party. The waiver by a Party of any default, breach or non-compliance under this Agreement will not operate as a waiver of that Party’s rights under this Agreement in respect of any continuing or subsequent default, breach or non-compliance.

11.7	Damages Limitation. EXCEPT WITH RESPECT TO THEIR RESPECTIVE INDEMNIFICATION OBLIGATIONS UNDER SECTIONS 9.2 AND 9.3 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER OR WITH RESPECT TO THIS AGREEMENT, OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR BUSINESS INTERRUPTION, OR PUNITIVE DAMAGES.

11.8	Expenses. Except as otherwise provided in this Agreement, each Party hereto shall pay its own expenses and costs incidental to the preparation of this Agreement and to the consummation of the transactions contemplated hereby, including the fees for any business, legal or regulatory counsel.

11.9	Relationship of the Parties. Neither Party shall be deemed an agent or representative of the other Party for any purpose, and this Agreement shall not create or establish an agency. Except as may be specifically provided herein, neither Party shall have any right, power, or authority, nor shall they represent themselves as having authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other Party, or otherwise act as an agent for the other Party for any purpose. This Agreement does not, is not intended to, and shall not be construed to, establish or create an employment, agency, partnership, joint venture or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party.

11.10	No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any entity other than the Parties, and neither any Third Party nor any Affiliate shall have any claim against either Party on the basis of this Agreement.

11.11	Language. This Agreement has been drafted in the English language, and the English language shall control its interpretation. Any translation shall be for convenience purposes only and shall not be legally binding.

11.12	Interpretation. The Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favour of or against either Party by reason of the extent to which such a Party participated in the drafting of this Agreement.

11.13	Descriptive Headings. The descriptive headings of this Agreement are for convenience only and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement.

11.14	Counterparts. The Parties shall execute this Agreement in two (2) counterparts, either of which the Parties shall deem an original, but which together shall constitute one and the same instrument. Counterparts may be signed and delivered by facsimile or PDF file, each of which shall be binding when received by the applicable Party.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives as of the Closing Date.

PROVENTION BIO, INC.:		MACROGENICS, INC.:

	/s/ Ashleigh Palmer		/s/ Scott Koenig
Name:	Ashleigh Palmer	Name:	Scott Koenig, M.D. Ph.D.
Title:	President and Chief Executive Officer	Title:	President and Chief Executive Officer

Exhibits:

Exhibit 1:	Teplizumab
Exhibit 2:	Product Patents; Program IP
Exhibit 3:	Assumed Contracts
Exhibit 4:	Development Plan
Exhibit 5:	Disclosure Schedules
Exhibit 6:	Bill of Sale and General Assignment Agreement
Exhibit 7:	Patent Assignment Agreement
Exhibit 8:	Transferred Materials. Transferrable Books and Records and INDs and CTAs
Exhibit 9:	Form of Transfer Letter
Exhibit 10:	Form of Warrant
Exhibit 11:	Form of Press Release
Exhibit 12:	Form of Lock-Up Agreement

Exhibit 1

Teplizumab

Teplizumab (MGA031), a recombinant, humanized, FcR non-binding, anti-CD3 monoclonal antibody described in IND# [****]. Secretion Signal Sequence double underlined in lowercase letters.

Amino Acid Sequence:

Light Chain

[****]

Heavy Chain

[****]

Exhibit 2

Product Patents

Title	Country	Patent / Publication No.	Serial No.
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]
[****]	[****]	[****]	[****]

Exhibit 3

Assumed Contracts

[****]

Exhibit 4

Development Plan

Treatment for patients with recent-onset T1D to preserve beta-cell function and insulin secretion

[****]

Exhibit 5

Disclosure Schedules

[****]

Exhibit 6

Bill of Sale and General Assignment Agreement

BILL OF SALE AND GENERAL ASSIGNMENT AGREEMENT

This Bill of Sale and General Assignment Agreement (this “Agreement”) is made and entered into effective as of the ___ day of May, 2018 (the “Effective Date”) by and between PROVENTION BIO, INC., a Delaware corporation, having its principal place of business at (hereinafter “Provention”) and MACROGENICS, INC., a Delaware corporation having its principal place of business at 9704 Medical Center Drive, Rockville, MD 20850 (hereinafter “MacroGenics”).

WHEREAS, MacroGenics and Provention are parties to that certain Asset Purchase Agreement, dated as of May ____, 2018 (the “Asset Purchase Agreement”).

WHEREAS, in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement, (i) MacroGenics shall sell, transfer, convey and assign to Provention all of MacroGenics’ right, title, and interest in and to the Purchased Assets, and Provention shall purchase from MacroGenics all of MacroGenics’ right, title, and interest in and to the Purchased Assets, and (ii) MacroGenics shall assign to Provention and Provention has agreed to assume all of the Assumed Liabilities, each to be effective as of the Closing Date, subject to the terms and conditions of the Asset Purchase Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, MacroGenics and Provention (each a “Party” and collectively, the “Parties”) agree as follows:

1. Sale, Assignment, and Assumption. To be effective as of the Closing Date, and pursuant to the terms and subject to the conditions of the Asset Purchase Agreement, MacroGenics (i) sells, transfers, conveys and assigns to Provention all of MacroGenics’ right, title, and interest in and to the Purchased Assets and (ii) assigns the Assumed Liabilities to Provention. Provention (x) accepts such sale, transfer, conveyance and assignment of MacroGenics’ right, title, and interest in and to the Purchased Assets, and (y) assumes and agrees to pay, perform and discharge as and when due, as applicable, all of the Assumed Liabilities.

2. Terms of the Agreement. Nothing contained in this Agreement shall be deemed to modify, limit, expand, supersede, or amend any rights or obligations of MacroGenics or Provention under the Asset Purchase Agreement. This Agreement is intended only to effect the sale, assignment, transfer and conveyance of the Purchased Assets to Provention by MacroGenics and assumption of the Assumed Liabilities by Provention, all in accordance with the terms and conditions of the Asset Purchase Agreement. To the extent any conflict arises between any of the terms and provisions of this Agreement and any of the terms and provisions of the Asset Purchase Agreement, the terms and provisions of the Asset Purchase Agreement shall govern and control.

3. No Third Party Beneficiaries. Nothing herein expressed or implied is intended to confer upon any person, other than the Parties and their respective successors and assigns, any rights, remedies, obligations, or liabilities.

4. Entire Agreement. This Agreement, together with the Asset Purchase Agreement (and the schedules and exhibits thereto) and the other documents executed in connection therewith, sets forth the entire agreement between the Parties with respect to the subject matter hereof, and cancels or supersedes all previous communications, representations, understandings, agreements, and arrangements between the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

5. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

6. Governing Law. This Agreement shall be governed by and construed in accordance with the substantive law of the State of Delaware without regard to conflict of law principles.

7. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or email delivery of a “.pdf” or similar format data file, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party hereto shall raise the use of a facsimile machine or e-mail delivery of a “.pdf” or similar format data file to deliver a signature to this Agreement or any amendment hereto or the fact that such signature was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” or similar format data file as a defense to the formation or enforceability of a contract and each Party hereto forever waives any such defense.

9. Amendment and Modification. This Agreement may be amended by the Parties at any time only by a written instrument signed by each of the Parties.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the Parties is signing this Agreement as of the Effective Date.

	MACROGENICS:

	MacroGenics, Inc.

	By:
	Name:
	Title:

	PROVENTION:

	Provention Bio, Inc.

	By:
	Name:
	Title:

Exhibit 7

Patent Assignment Agreement

PATENT ASSIGNMENT AGREEMENT

This Patent Assignment Agreement (this “Agreement”) is made and entered into effective as of the ____ day of May, 2018 (the “Effective Date”) by and between PROVENTION BIO, INC., a Delaware Corporation, having its principal place of business at (hereinafter “Provention”) and MACROGENICS, INC., a Delaware corporation having its principal place of business at 9704 Medical Center Drive, Rockville, MD 20850 (hereinafter “MacroGenics”).

WHEREAS, MacroGenics and Provention are parties to that certain Asset Purchase Agreement, dated as of May ____, 2018 pursuant to which MacroGenics shall transfer, convey, assign and deliver to Provention all of MacroGenics’ rights, title and interests in all patent applications and issued patents that are identified on Schedule A attached hereto, or claim priority to any patent application listed on Schedule A (collectively, the “Assigned Patents”).

1. Patent Assignment. MacroGenics hereby conveys, transfers, and assigns to Provention, its successors and assigns, MacroGenics’ entire right, title and interest for the United States, its territories and possession, and all foreign countries in and to the Assigned Patents and all rights, claims and privileges pertaining thereto, including without limitation, all inventions and discoveries disclosed therein, certificates of invention and applications for certificates of invention, and any substitutions, reissues, reexaminations, divisions, renewals, extensions, provisionals, continuations, continuations-in-part, continued prosecution applications, and corresponding foreign patents and patent applications and foreign counterparts thereof, and any and all rights to sue and recover for claims and remedies against and collect damages and other recoveries for past, present and future infringements of any or all of the foregoing, and rights for priority and protection of interests therein under the laws of any jurisdiction and hereby grants to Provention the right to apply, obtain and hold in its own name for patents or inventor’s certificates and related rights heretofore or hereafter filed in any and all countries, including, without limitation, the right to prosecute and maintain the same and all rights to claim priority based thereon, all patents granted thereon and all reissues, extensions and renewals thereof.

2. Authorization. MacroGenics authorizes and requests the Commissioner of Patents and Trademarks of the United States, and any other official throughout the world whose duty is to register and record ownership in patent registrations and applications for registration of patents, to record Provention as the assignee and owner of any and all right in the Assigned Patents.

3. Miscellaneous. This Assignment will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, each of which such successors and permitted assigns will be deemed to be a Party hereto for all purposes hereof. This Assignment and any of the terms contained herein may be amended or modified by MacroGenics and Provention only in writing. This Assignment is executed by, and shall be binding upon, MacroGenics and Provention and their respective successors and assigns, for the uses and purposes set forth and referred to above, effective immediately upon its delivery to Provention. This Assignment shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of law principles. This Agreement may be executed in multiple counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement. This Agreement, any and all agreements and instruments executed and delivered in accordance herewith, along with any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or email delivery of a “.pdf” or similar format data file, shall be treated in all manner and respects and for all purposes as an original signature, agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party hereto shall raise the use of a facsimile machine or email delivery of a “.pdf” or similar format data file to deliver a signature to this Agreement or any amendment hereto or the fact that such signature was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” or similar format date file as a defense to the formation or enforceability of a contract and each Party hereto forever waives any such defense.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the Parties is signing this Agreement as of the Effective Date.

	MACROGENICS:

	MacroGenics, Inc.

	By:
	Name:
	Title:
	Date:

STATE OF ______________	}
	}	ss:
COUNTY OF __________	}

On the ________ day of _____________ in the year 20____, before me, the undersigned, personally appeared ______________________________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.


	Notary Public, State of _________________
	Printed Name:
	Commission #:

	PROVENTION:

	Provention Bio, Inc.

	By:
	Name:
	Title:
	Date:

STATE OF ______________	}
	}	ss:
COUNTY OF __________	}


	Notary Public, State of _________________
	Printed Name:
	Commission #:

Schedule A

Title		Country		Patent / Publication No.		Serial No.
[****]		[****]		[****]		[****]

Exhibit 8

Transferred Documentation and Biological and Chemical Materials and Reagents

The items on this list are anticipated to be transferred by the Seller as soon as practicable using Commercially Reasonable Efforts during the Transition Period. Items that are not transferred during the Transition Period shall be transferred by the Seller during the remainder of the eighteen (18) months after the Effective Date using Commercially Reasonable Efforts to the extent available and feasible. Electronic documentation shall be transferred in formats to be mutually agreed upon by both Parties.

Documentation

[****]

Exhibit 9

Form of Transfer Letter

[****]

ATTN: [****]

RE:	Transfer of IND Ownership and Notification of New Regulatory Contact
	IND No. [****] SEQ No.: XXXX
	Teplizumab (MGA031), Humanized Anti-Human CD3 Monoclonal Antibody

Dear Dr. [****] :

Reference is made to IND [****] and IND [****] for teplizumab, Humanized Anti-Human CD3 Monoclonal Antibody. IND [****] is active to evaluate teplizumab in the treatment of people with recent-onset Type 1 Diabetes Mellitus (T1DM). IND [****] is active to evaluate teplizumab in the prevention/delay of diagnosis of T1DM in people at risk for developing T1DM. A similar letter is being submitted to IND [****].

As of <insert date> , Provention Bio, <insert address> has acquired the worldwide development and commercialization rights to teplizumab from MacroGenics, Inc., 9640 Medical Center Drive, Rockville, MD 20850 USA.

On behalf of MacroGenics, I am authorizing the Food and Drug Administration to transfer ownership and responsibility for IND [****] effective as of <insert date> to:

Provention Bio

A complete copy of the IND, including all correspondence from the Agency, has been provided to Provention Bio and upon their acceptance of this IND, all future correspondence regarding this IND should be addressed to Provention Bio. The Regulatory contact for Provention Bio is:

Provention Bio will submit a letter of acknowledgement and acceptance of the IND transfer and regulatory responsibilities under a separate correspondence to the Division.

If you have any questions regarding this submission, please do not hesitate to contact me at [****], or you may contact [****]. Please contact [****] for electronic submission-related questions. Thank you.

Sincerely,

[See appended electronic signature page.]

[****]

Exhibit 10

Form of Warrant

Warrant Number ____

Warrant to Purchase

Shares of

Common Stock

As Herein Described

May __, 2018

WARRANT TO PURCHASE COMMON STOCK OF

PROVENTION BIO, INC.

This is to certify that, for value received, MacroGenics, Inc., or a proper assignee (the “Holder”), is entitled to purchase up to 2,162,389 shares (“Warrant Shares”) of common stock, $0.0001 par value per share (the “Common Stock”), of Provention Bio, Inc., a Delaware corporation (the “Company”), subject to the provisions of this Warrant. This Warrant shall be exercisable at Two Dollars and Fifty Cents ($2.50) per share (the “Exercise Price”). This Warrant also is subject to the following terms and conditions:

1. Exercise and Payment; Exchange.

(b) In lieu of exercising this Warrant for cash pursuant to Section 2(a), if the fair market value of one Warrant Share is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Warrant Shares equal to the value of this Warrant (or of any portion of this Warrant being canceled) by Exercise of this Warrant, in which event the Company shall issue to the Holder that number of Warrant Shares computed using the following formula:

X	=	Y (A – B)
		A

Where:

	X = The number of Warrant Shares to be issued to the Holder

		Y = The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation)

		A = The fair market value of one Warrant Share (at the date of such calculation)

		B = The Exercise Price (as adjusted to the date of such calculation)

For purposes of the calculation above, the fair market value of one Warrant Share shall be determined as set forth in Section 3(a) – (c) below.

(b) Conditions to Exercise or Exchange. The restrictions in Section 7 shall apply, to the extent applicable by their terms, to any exercise or exchange of this Warrant permitted by this Section 1.

5. Adjustments in Number and Exercise Price of Warrant Shares.

5.1 The number of shares of Common Stock for which this Warrant may be exercised and the Exercise Price therefor shall be subject to adjustment as follows:

7. Transfer, Exercise, Exchange, Assignment or Loss of Warrant, Warrant Shares or Other Securities.

8. Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company with respect to the issuance of the Warrant as follows:

11. Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York.

[Signature page follows.]

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

	PROVENTION BIO, INC.

	By:
	Name:
	Title:

FORM OF EXERCISE

To be executed upon exercise of Warrant
(please print)

The undersigned hereby irrevocably elects to exercise the right, represented by this Warrant Number _____certificate, to __________ shares of common stock, $0.0001 par value per share (“Common Stock”) of Provention Bio, Inc. (the “Company”) and herewith [tenders payment for such shares of Common Stock to the order of the Company the amount of $[●] per share in accordance with the terms hereof/elects to exercise this Warrant pursuant to Section 2(b) of the attached Warrant]. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of ___________________________ whose address is __________________________________________. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests that a new Warrant Certificate representing the remaining balance of the shares of Common Stock be registered in the name of _______________________________, whose address is ________________________________________, and that such Warrant Certificate be delivered to_______________, whose address is __________________________________.

Representations of the undersigned.

	a)	The undersigned acknowledges that the undersigned has received, read and understood the Warrant and agrees to abide by and be bound by its terms and conditions.

	b)	(i) The undersigned has such knowledge and experience in business and financial matters that the undersigned is capable of evaluating the Company and the proposed activities thereof, and the risks and merits of this prospective investment.

[ ] YES [ ] NO

(ii) If “No”, the undersigned is represented by a “purchaser representative,” as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”) and Regulation D thereunder.

[ ] YES [ ] NO

(i) The undersigned is an “accredited investor,” as that term is defined in the Securities Act and Rule 501 of Regulation D thereunder.

[ ] YES [ ] NO

(ii) If “Yes,” the undersigned comes within the following category of that definition (check one and complete the blanks as applicable):

[ ]

1. The undersigned is a natural person whose present net worth (or whose joint net worth with his or her spouse), excluding the value of the undersigned’s primary residence, exceeds $1,000,000. For purposes of calculating the undersigned’s present net worth, the undersigned has included the following as liabilities: (i) any indebtedness that is secured by the undersigned’s primary residence in excess of the estimated fair market value of the undersigned’s primary residence at the time of the sale of the shares, and (ii) any incremental debt secured by the undersigned’s primary residence that was incurred in the 60 days before the sale of the shares, other than as a result of the acquisition of the undersigned’s primary residence.

	[ ]	2. The undersigned is a natural person who had individual income in excess of $200,000 in each of the last two years or joint income with the undersigned’s spouse in excess of $300,000 during such two years, and the undersigned reasonably expects to have the same income level in the current year.

	[ ]	3. The undersigned is an officer or director of the Company.

	[ ]	4. The undersigned is a corporation or partnership not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.

	[ ]	5. The undersigned is a trust with total assets in excess of $5,000,000 whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment.

	[ ]	6. The undersigned is an entity, all of whose equity owners are accredited investors under paragraphs 1, 2, 3, 4 or 5, above.

The undersigned understands that the shares purchased hereunder have not been registered under the Securities Act, in reliance upon the exemption from the registration requirements under the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D thereunder; and, therefore, that the undersigned must bear the economic risk of the investment for an indefinite period of time since the securities cannot be sold, transferred or assigned to any person or entity without compliance with the provisions of the Securities Act.

Submitted by:			Accepted by Provention Bio, Inc.:

By:			By:
Date:			Date:
SS/Tax ID:			Tax ID:
Telephone:
Email:

(Signature must conform in all respects to name of holder as specified on the face of the Warrant Certificate.)

Exhibit 11

Press Release

Exhibit 12

Form of Lock-Up Agreement