License, Development and Commercialization Agreement between Aridis Pharmaceuticals, Inc. and Serum AMR Products, entered into as of September 27, 2019

Exhibit 10.1

[*] Certain information in this document has been omitted from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the “Agreement”) is entered into as of September 27th, 2019 (the “Effective Date”) by and between ARIDIS PHARMACEUTICALS, INC., a corporation organized and existing under the laws of Delaware, U.S.A., and having a principal place of business at 5941 Optical Court, San Jose, CA  95138, U.S.A. (“Aridis”), and SERUM AMR PRODUCTS , a Netherlands based company having a place of business at  Antonie van Leeuwenhoeklaan 9-13, 3721 AL Bilthoven, PO Box 457, The Netherlands (“SAMR”).  Aridis and SAMR are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Aridis has developed the Limited License Products and MabIgX Platform (as defined below) and is seeking regulatory approval of the Limited License Products; and

WHEREAS, SAMR desires to obtain from Aridis a license to the Limited License Products in the Limited Territory defined below, and to use the MabIgX Platform to develop SAMR Products as defined below, and Aridis is willing to grant such license to SAMR, all under the terms and conditions hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:

ARTICLE 1
DEFINITIONS

1.1                               “Act” shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§262 et seq., as such may be amended from time to time.

1.2                               “Affiliate” means, with respect to a particular Party, a Person that controls, is controlled by or is under common control with such Party.  For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of fifty percent (50%) or more of the voting stock of such entity, or by contract or otherwise and includes Cyrus Poonawalla Group Entity. For clarity, once a Person ceases to be an Affiliate of a Party, then, without any further action, such Person shall cease to have any rights, including license and sublicense rights, under this Agreement by reason of being an Affiliate of such Party.

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1.3                               “Anti-Corruption Laws” means laws, regulations, or orders prohibiting the provision of a financial or other advantage for a corrupt purpose or otherwise in connection with the improper performance of a relevant function, including without limitation, the US Foreign Corrupt Practices Act (FCPA) and similar laws governing corruption and bribery, whether public, commercial or both, to the extent applicable.

1.4                               “Aridis IP” means the Aridis Licensed Know-How and Aridis Licensed Patents.

1.5                               “Aridis Licensed Know-How” means all Information (including Data and Regulatory Materials) that (a) (i) is Controlled by Aridis or its Affiliates as of the Effective Date or (ii) becomes Controlled by Aridis or its Affiliates during the Term, and (b) is necessary or useful for the Development or Commercialization of Licensed Products in the Applicable Territory.  With respect to Worldwide License Products described in section 1.60(b), Aridis Licensed Know-how includes all knowhow covering MabIgX Technology.

1.6                               “Aridis Licensed Patents” means all Aridis Patents that (a)(i) are pending as of the Effective Date or (ii) are filed during the Term, or (b)(i) are issued as of the Effective Date or (ii) issue during the Term, in each case in the Applicable Territory.  Aridis Licensed Patents existing as of the Effective Date are set forth in Exhibit D.

1.7                               “Aridis Patents” means all Patents that (a)(i) are Controlled by Aridis or its Affiliates as of the Effective Date or (ii) become Controlled by Aridis or its Affiliates during the Term, and (b) that relate to the Licensed Product or any improvement to the Licensed Product or are otherwise necessary or useful for the Development or Commercialization of Licensed Products in the Applicable Territory.  With respect to SAMR development of Worldwide License Products described in section 1.60(b), Aridis Patents includes all patents Covering MabIgX Technology.

1.8                               “Aridis Product Mark” means Aridis’s (or its Affiliates) trademarks for the (a) the AR-201 Product, and (b) the Limited License Products, and related trade dress.

1.9                               “Applicable Territory” shall mean, with respect to Limited License Products and MablgX Technology, the Limited Territory, and with respect to SAMR Products, the Worldwide Territory.

1.10                        “AR-201 Product” shall mean Aridis product currently in development known as “AR-201”, as further described in Exhibit C to this Agreement.  AR-201 Product is included in the definition of “Worldwide License Product” in section 1.60(a) below.

1.11                        “Business Day” means a day other than Saturday, Sunday or any day that banks in the Netherlands are required or permitted to be closed.

1.12                        “Change of Control” means with respect to either Party: (a) the sale of all or substantially all of such Party’s assets or business relating to this Agreement (other than to an Affiliate of such Party); (b) a merger, reorganization or consolidation involving such Party in which the voting securities of such Party outstanding immediately prior thereto cease to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization or consolidation; or (c) a Person, or group of Persons, acting in concert

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acquire more than fifty percent (50%) of the voting equity securities or management control of such Party.

1.13                        “CMC Information” means Information related to the chemistry, manufacturing and controls of the Licensed Products, as specified by the FDA and other applicable Regulatory Authorities.

1.14                        “Commercialization,” with a correlative meaning for “Commercialize” and “Commercializing,” means all activities undertaken before and after obtaining Regulatory Approvals relating specifically to the pre-launch, launch, promotion, detailing, medical education and medical liaison activities, marketing, pricing, reimbursement, sale, and distribution of Licensed Products, including strategic marketing, sales force detailing, advertising, market Licensed Product support, all customer support, Licensed Product distribution and invoicing and sales activities; provided, however, “Commercialization” shall exclude any activities relating to the manufacture of Licensed Product.

1.15                        “Commercially Reasonable Efforts” means, with respect to either Party’s obligations under this Agreement, the carrying out of such obligations with a level of efforts and resources consistent with the commercially reasonable practices of a similarly situated company in the pharmaceutical industry in a similar situation in a similar territory.

1.16                        “Common Technical Document” or “CTD” (including eCTD) means a set of specifications for application dossier adopted by applicable Regulatory Authority for organizing applications of pharmaceuticals for human use.

1.17                        “Confidential Information” of a Party means any and all Information of such Party or its Affiliates that is disclosed to the other Party or its Affiliates under this Agreement, whether in oral, written, graphic, or electronic form.  For clarity, Aridis Licensed Know-How shall be deemed Confidential Information of Aridis.

1.18                        “Control” means, with respect to any material, Information, or intellectual property right, that a Party (a) owns or (b) has a license (other than a license granted to such Party under this Agreement) to such material, Information, or intellectual property right and, in each case, has the ability to grant to the other Party access, a license, or a sublicense (as applicable) to the foregoing on the terms and conditions set forth in this Agreement without violating the terms of any existing agreement or other arrangement with any Third Party or, with respect to any material, Information or intellectual property right obtained by a Party after the Effective Date from a Third Party without being obligated to pay any royalties or other consideration therefor unless the other Party agrees in advance of any grant of rights thereto to pay such royalties or other consideration.

1.19                        “Cover,” “Covering” or “Covered” means, with respect to any Licensed Product, that the manufacture, use, offer for sale, sale or import of such Licensed Product in the Applicable Territory by an unlicensed Third Party would infringe a Valid Claim of an Aridis Licensed Patent.

1.20                        “Cyrus Poonawalla Group” or “CPGC” means any entity controlled directly or indirectly by Dr. Cyrus Poonawalla, Mr. Adar Cyrus Poonawalla and their family members.

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1.21                        “Data” means all data, including chemistry, manufacturing and control (CMC) data, non-clinical data and clinical data, generated by or on behalf of a Party or its Affiliates or their respective sublicensees pursuant to activities conducted under this Agreement.  For clarity, Data does not include any patentable inventions.

1.22                        “Competitive Product” shall have the definition as established in section 2.4.

1.23                        “Developing World” means those countries listed by the United Nations as “Least Developed Countries.”

1.24                        “SAMR  Products” means five products to be developed by SAMR through use of the MabIgX Technology, each comprising one Indication, in each case such Indication to be a target to an infectious disease predominantly of economic impact in the Developing World.  The five Indications licensed for which SAMR Products may be Developed hereunder shall be as specifically described in Exhibit E to this Agreement.

1.25                        “Development,” with a correlative meaning for “Develop” and “Developing,” means all activities conducted after the Effective Date relating to (a) preclinical and clinical trials, toxicology testing, statistical analysis and publication and presentation of study results with respect to Licensed Products (collectively, “Development Activities”) and (b) the reporting, preparation and submission of applications (including any CMC Information) for obtaining, registering and maintaining Regulatory Approval of Licensed Products (collectively, “Regulatory Activities”).

1.26                        “FDA” means the U.S. Food and Drug Administration or any successor entity.

1.27                        “First Commercial Sale” means the first sale of a Licensed Product in the Applicable Territory to a Third Party after Regulatory Approval has been obtained in the Applicable Territory.

1.28                        “Fiscal Year” means Aridis’s fiscal year that starts on January 1 and ends on December 31.

1.29                        “GCP” or “Good Clinical Practices” means the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in the guidelines entitled “Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance,” including related regulatory requirements imposed by the FDA and comparable regulatory standards, practices and procedures promulgated by other Regulatory Authority applicable to the Applicable Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH.

1.30                        “GLP” or “Good Laboratory Practices” means the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and comparable regulatory standards promulgated by other Regulatory Authority applicable to the Applicable Territory, as they may be updated from time to time, including applicable quality guidelines promulgated under the ICH.

1.31                        “Governmental Authority” means any multi-national, national, federal, state, local, municipal, provincial or other governmental authority of any nature (including any

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governmental division, prefecture, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.32                        “Government Official” means (a) any official or employee of any Governmental Authority, or any department, agency, or instrumentality thereof (including without limitation commercial entities owned or controlled, directly or indirectly, by a Governmental Authority), (b) any political party or official thereof, or any candidate for political office, in the Applicable Territory or any other country, or (c) any official or employee of any public international organization.

1.33                        “ICH” means International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.

1.34                        “IND” means an Investigational New Drug application filed with the FDA, or an equivalent filing outside of the U.S.

1.35                        “Indication” means a separately defined, well-categorized class of human disease or condition for which a separate MAA (including any extensions or supplements) may be filed with a Regulatory Authority.  For clarity, if an MAA is approved for a Licensed Product in a particular Indication and patient population, a label expansion for such Licensed Product to include such Indication in a different patient population shall not be considered a separate Indication.

1.36                        “Information” means any data, results, technology, business or financial information or information of any type whatsoever, in any tangible or intangible form, including know-how, copyrights, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulae, software, algorithms, marketing reports, expertise, technology, test data (including pharmacological, biological, chemical, biochemical, clinical test data and data resulting from non-clinical studies), stability data and other study data and  procedures.

1.37                        “Inventions” means any inventions and/or discoveries, including Information, processes, methods, assays, designs, protocols, and formulas, and improvements or modifications thereof, patentable or otherwise, that are generated, developed, conceived or reduced to practice by or on behalf of a Party or its Affiliates or their respective sublicensees pursuant to activities conducted under this Agreement, in each case including all rights, title and interest in and to the intellectual property rights therein and thereto; provided, however, that Inventions shall exclude Data.

1.38                        “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, domestic or foreign.

1.39                        “Licensed Product” shall mean (a) the Worldwide License Products, and (b) the Limited License Products.

1.40                        “Limited License Products” shall mean certain of Aridis’ products currently in development, comprising the products known as “AR-301”, “AR-105”, “AR-101”, all as further described in Exhibit B to this Agreement.

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1.41                        “Limited Territory” means: (a) for the Limited License Product known as AR-301,  (i) the country of India, and (ii) all other countries of the world except the United States, Canada, the United Kingdom, the countries of the European Economic Union, China (including PRC, Hong Kong, Macau and Taiwan), Australia, New Zealand, South Korea, Brazil, and Japan (excluding any countries embargoed by the U.S.A. as of the Effective Date); and (b) for all other Limited License Products, (i) the country of India, and (ii) all other countries of the world except the United States, Canada, the United Kingdom, the countries of the European Economic Union, China (including PRC, Hong Kong, Macau and Taiwan), Australia, New Zealand, and Japan (excluding any countries embargoed  by the U.S.A. as of the Effective Date).

1.42                        “MabIgX Technology” means the Aridis technology for the identification of antibody producing B-cells, as further described in Exhibit A to this Agreement.

1.43                        “Marketing Authorization Application” or “MAA” means a New Drug Submission (“NDS”) or any other application to the appropriate Regulatory Authority for approval to market a Licensed Product, but excluding pricing approvals.

1.44                        “Net Sales” means the gross amounts billed or invoiced by SAMR, its Affiliates and their respective sub-licensees for sales of Licensed Products to Third Parties, less the following deductions to the extent reasonable and customary, provided to unaffiliated entities and actually allowed and taken with respect to such sales:

(a)                                 trade, cash or quantity discounts not already reflected in the amount invoiced, to the extent related to the gross amount billed or invoiced;

(b)                                 price reductions, rebates and administrative fees (including those paid or credited to pharmacy benefit managers, governmental authorities or otherwise);

(c)                                  shipping costs, including freight, insurance and other transportation charges or costs incurred in shipping of Licensed Products to Third Parties (provided that, such shipping costs shall not be in excess of two percent (2%) of Net Sales with respect to any given calendar quarter);

(d)                                 sales, use, excise, value-added or similar taxes, customs duties and other governmental fees, charges and surcharges imposed on the sale of Licensed Products;

(e)                                  amounts repaid or credited by reason of rejections, defects, recalls or returns;

(f)                                   amounts paid or credited for wholesaler charge backs; and

(g)                                 any receivables that have been included in gross sales and are deemed to be uncollectible according to U.S. GAAP (any such bad debt deductions shall be applied to Net Sales in the period in which such receivables are written off) (provided that, the amount of such receivables shall not be in excess of two percent (2%) of Net Sales with respect to any given calendar quarter).

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Notwithstanding the foregoing, amounts received or invoiced by SAMR, its Affiliates, or their respective sub-licensees for the sale of Licensed Product among SAMR, its Affiliates or their respective sub-licensees shall not be included in the computation of Net Sales hereunder unless the purchasing entity is the end-user.  For purposes of determining Net Sales, the Licensed Product shall be deemed to be sold when billed or invoiced.  Net Sales shall be accounted for in accordance with standard SAMR practices for operation by SAMR, its Affiliates or their respective sub-licensees, as practiced in the Applicable Territory, but in any event in accordance with U.S. GAAP, consistently applied in the Applicable Territory.  For clarity, a particular item may only be deducted once in the calculation of Net Sales. Notwithstanding anything to the contrary in the foregoing, to the extent any amounts deducted pursuant to subsections (d) or (g) above are subsequently recovered by SAMR, its Affiliates, or their respective sub-licensees during the Term, such recovered amounts shall be deemed “Net Sales” for the subsequent calendar quarter.

With respect to any transfer of any Licensed Product in the Applicable Territory for any substantive consideration other than monetary consideration on arm’s length terms, for the purposes of calculating the Net Sales under this Agreement, such Licensed Product shall be deemed to be sold exclusively for money at the average Net Sales price charged to Third Parties for cash sales in the respective country during the applicable reporting period (or if there were only de minimus cash sales in the respective country, at the fair market value as determined by comparable markets).

SAMR, its Affiliates, and their respective sublicensees shall sell each Licensed Product as a standalone product and will not sell the Licensed Product as a part of a bundle with other products or offer packaged arrangements to customers that include the Licensed Products, except with Aridis’s prior written consent, not to be unreasonably withheld.

1.45                        “Patents” means (a) pending patent applications, issued patents, utility models and designs; (b) reissues, substitutions, confirmations, registrations, validations, re-examinations, additions, continuations, continued prosecution applications, continuations-in-part, or divisions of or to any of the foregoing; and (c) extensions, renewals or restorations of any of the foregoing by existing or future extension, renewal or restoration mechanisms, including supplementary protection certificate or the equivalent thereof.

1.46                        “Person” means an individual, corporation, partnership, limited liability company, limited partnership, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, Governmental Authority or any other form of entity not specifically listed herein.

1.47                        “Proper Conduct Practices” means, SAMR and each of its Representatives not, directly or indirectly, (a) making, offering, authorizing, providing or paying anything of value in any form, whether in money, property, services or otherwise to any Government Official, or other Person charged with similar public or quasi-public duties, or to any customer, supplier, or any other Person, or to any employee thereof, or failing to disclose fully any such payments in violation of the laws of any relevant jurisdiction to (i) obtain favorable treatment in obtaining or retaining business for it or any of its Affiliates, (ii) pay for favorable treatment for business secured, (iii) obtain special concessions or for special concessions already obtained, for or in respect of it or any of its Affiliates, in each case which would have been in violation of any applicable Law, (iv)

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influence an act or decision of the recipient (including a decision not to act) in connection with the Person’s or its Affiliate’s business, (v) induce the recipient to use his or her influence to affect any government act or decision in connection with the Person’s or its Affiliate’s business or (vi) induce the recipient to violate his or her duty of loyalty to his or her organization, or as a reward for having done so; (b) engaging in any transactions, establishing or maintaining any fund or assets in which it or any of its Affiliates shall have proprietary rights that have not been recorded in the books and records of it or any of its Affiliates; (c) making any unlawful payment to any agent, employee, officer or director of any Person with which it or any of its Affiliates does business for the purpose of influencing such agent, employee, officer or director to do business with it or any of its Affiliates; (d) violating any provision of applicable Anti-Corruption Laws; (e) making any payment in the nature of bribery, fraud, or any other unlawful payment under the applicable Laws of any jurisdiction where it or any of its Affiliates conducts business or is registered; or, (f) if such Person or any of its Representatives is a Government Official, improperly using his or her position as a Government Official to influence the award of business or regulatory approvals to or for the benefit of such Person, its Representatives or any of their business operations, or failing to recuse himself or herself from any participation as a Government Official in decisions relating to such Person, its Representatives or any of their business operations.

1.48                        “Regulatory Approval” means all approvals necessary (non-clinical, pre-clinical, clinical, manufacturing, commercialization or otherwise) for the commercial sale of a Licensed Product in a given country or regulatory jurisdiction.

1.49                        “Regulatory Authority” means, in a particular country or jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval in such country or jurisdiction.

1.50                        “Regulatory Exclusivity” means, with respect to a Licensed Product, the rights conferred by any Regulatory Authority in the Applicable Territory with respect to such Licensed Product other than Patents, which confer an exclusive commercialization period during which SAMR, its Affiliates or their respective sub-licensees have the exclusive right to market and sell such Licensed Product in the Applicable Territory, including the rights conferred in the U.S. under 42 U.S.C. §262 or comparable rights outside of the U.S.

1.51                        “Regulatory Materials” means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority in order to develop, manufacture, market, sell or otherwise commercialize Licensed Products in a particular country or jurisdiction.

1.52                        “Representatives” means, as to any Person, such Person’s Affiliates and its and their successors, controlling Persons, directors, officers and employees.

1.53                        “SAMR Development Inventions” means any Inventions generated by or on behalf of SAMR, its Affiliates and their respective sub-licensees, including their employees, agents and contractors, which relate to or comprise any Worldwide License Products. SAMR Development Inventions excludes any inventions which are required to be assigned by SAMR to Aridis pursuant to Section 9.1(b) below.

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1.54                        “SAMR Development Patents” means any Patents that claim SAMR Development Inventions.

1.55                        “Third Party” means any entity other than Aridis or SAMR or an Affiliate of either of them.

1.56                        “Transaction Agreements” means, collectively, (a) this Agreement, (b) the Supply Agreement, (c) the Quality Agreement(s), the Trademark Agreement and (d) any other agreement executed between the Parties in connection with any of the foregoing.

1.57                        “U.S. Dollar” means a U.S. dollar, and “US$” shall be interpreted accordingly.

1.58                        “U.S.” or “USA” means the United States of America, including all possessions and territories thereof.

1.59                        “U.S. GAAP” means the generally accepted accounting principles as applied to the U.S.

1.60                        “Valid Claim” means a claim (including a process, use, or composition of matter claim) of (a) an issued and unexpired patent that has not (i) irretrievably lapsed or been abandoned, revoked, dedicated to the public or disclaimed or (ii) been held invalid, unenforceable or not patentable by a court, governmental agency, national or regional patent office or other appropriate body that has competent jurisdiction, which holding, finding or decision is final and unappealable or unappealed within the time allowed for appeal or (b) a pending patent application, which claim has not been abandoned or finally disallowed without the possibility of appeal.

1.61                        “Worldwide License Products” shall mean (a) the AR-201 Product, and (b) the SAMR Products.

1.62                        “Worldwide Territory” means all countries of the world excluding PRC, Hong Kong, Macau and Taiwan (and excluding any countries embargoed by the U.S.A. as of the Effective Date).

1.63                        Additional Definitions: The following table identifies the location of definitions set forth in various Sections of the Agreement:

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ARTICLE 2
LICENSE

2.1                               License to SAMR.

(a)                                 License Grant.  Subject to the terms and conditions of this Agreement, Aridis hereby grants SAMR an exclusive (even as to Aridis except as provided in Section 2.1(b) below) license, with the right to sublicense solely as provided in Section 2.1(c), under the Aridis IP, to:

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(i)                                    Develop (subject to Section 4.1), manufacture, make, have made, distribute, market, promote, sell, have sold, offer for sale, import and otherwise Commercialize Worldwide License Products in the Worldwide Territory. As consideration for the foregoing license and access to and transfers of know-how under this Agreement, SAMR will make certain payments to Aridis as set out in, and subject to the terms and conditions of, Article 8;

(ii)                                Develop (subject to Section 4.1), distribute, market, promote, sell, have sold, offer for sale, import and otherwise Commercialize Limited License Products in the Limited Territory.  For clarity, the foregoing license does not include a right for SAMR to label, package, manufacture or have manufactured any Limited License Product, except as provided in section 6 and in Exhibit G and Exhibit H.  As consideration for the foregoing license and access to and transfers of know-how under this Agreement, SAMR will make certain payments to Aridis as set out in, and subject to the terms and conditions of, Article 8;

(b)                                 Aridis Retained Rights.  Notwithstanding the exclusive rights granted to SAMR in Section 2.1(a), Aridis and its Affiliates retain the following:  (i) the right to practice the Aridis IP within the scope of the license granted to SAMR under Section 2.1(a) in order to perform, or have performed by a Third Party contractor, Aridis’s obligations under this Agreement or any other Transaction Agreement;  (ii) the right to use and Develop a Limited License Product in the Limited Territory for the purpose of obtaining or maintaining Regulatory Approval of Licensed Products; (iii) the right to manufacture or have manufactured Licensed Products anywhere in the world for sale and use in territories retained by Aridis (subject to the exclusive manufacturing option as described in Exhibit G); and (iv) all rights to practice Aridis IP and all rights to Limited License Products except for those rights specifically exclusively granted to SAMR in Section 2.1(a).

(c)                                  Sublicense Rights.  SAMR shall have the right to grant sublicenses of the license granted in Section 2.1(a) only with Aridis’s express prior written consent, not to be unreasonably denied or delayed (for clarity, the execution of customary agreements during conduct of clinical trial with sites by SAMR, with customary controls regarding confidential information, assignment of inventions and data to sponsor, and control and return of product, are authorized under this Agreement and do not require advance approval of Aridis).  Following receipt of Aridis’s consent, SAMR shall, within thirty (30) days after granting any sublicense under Section 2.1(a), notify Aridis of the grant of such sublicense and provide Aridis with a true and complete copy of the sublicense agreement (each, a “SAMR Sublicense Agreement”).  Each SAMR Sublicense Agreement shall be consistent with the terms and conditions of this Agreement, and SAMR shall be solely responsible for all of its sub-licensees’ activities and any and all failures by its sub-licensees to comply with the terms of this Agreement.  Without limiting the foregoing, each SAMR Sublicense Agreement shall include the following additional terms and conditions:

(i)                                    the sub-licensee shall be bound by non-use and non-disclosure obligations no less stringent than those set forth in this Agreement;

(ii)                                the sub-licensee shall not have any right to grant further sublicenses to the Aridis IP or to engage subcontractors to perform its obligations to SAMR;

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(iii)                            the sub-licensee shall not have any right to prosecute or maintain or enforce any Aridis Licensed Patents;

(iv)                             the sub-licensee shall assign to Aridis all Data and Inventions related to Aridis IP or to Limited License Products generated by such sub-licensee;

(v)                                 the sub-licensee shall have the right to submit or control Regulatory Materials for Licensed Products only if SAMR retains for itself and for Aridis all rights of ownership and use of all such Regulatory Materials; and

(vi)                             if this Agreement terminates, Aridis shall have the option, at its sole discretion, to (A) assume SAMR’s rights and obligations under the SAMR Sublicense Agreement, or (B) terminate the SAMR Sublicense Agreement in its entirety without any penalty or other obligation to the sublicensee.

2.2                               Negative Covenant.  SAMR covenants that it will not, and will not permit any of its Affiliates or sublicensees to, use or practice any Aridis IP outside the scope of the license granted to it under Section 2.1(a).

2.3                               No Implied Licenses.  Except as explicitly set forth in this Agreement, neither Party shall be deemed by estoppel or implication to have granted the other Party any license or other right to any intellectual property of such Party.

2.4                               Restrictions.  During the Term, SAMR (and its Affiliates) shall not Develop, manufacture or Commercialize, or authorize (by license or otherwise) any Third Party to Develop, manufacture or Commercialize, any product in the Applicable Territory which would be competitive with a Licensed Product (a “Competitive Product”).

2.5                               Good Faith Negotiation of EU Territory Grant (Subject to EU Finance Program).  In certain circumstances, SAMR and Aridis agree to discuss in good faith the possibility of extending the rights granted in this Agreement to include an exclusive license under Aridis IP to make, have made, import, use and have used, and sell and have sold, one or more Limited License Products in the countries of the European Economic Union; such agreement to discuss in good faith shall be as described in Exhibit F, Good Faith Negotiation of EU Territory Grant (Subject to EU Finance Program).

2.6                               Reversal of Licensed Territory.  If Aridis seeks return of the license granted pursuant to Section 2.1 for any Limited License Product with respect to any part of the Limited Territory (expressly excluding the country of India and countries eligible for GAVI funding as of the Effective Date as described at https://www.gavi.org/support/sustainability/eligibility/; hereinafter “GAVI Countries”), then the Parties agree to execute an amendment of this License Agreement returning such license grant to Aridis, thereafter allowing Aridis to sublicense such rights as it may so elect, provided that such amendment reasonably provides SAMR with (i) reimbursement of all costs incurred by SAMR relating to that portion of the Limited Territory, and (ii) payment of *% of the net amounts received and receivable by Aridis from a sublicensee relating

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to a sublicense of such rights.  In such a case, SAMR shall retain such manufacturing rights as are set out in Exhibit G, subject to the terms specified therein.

ARTICLE 3
GOVERNANCE

3.1                               Alliance Managers.  Within thirty (30) days after the Effective Date, each Party shall appoint and notify the other Party of the identity of a representative having the appropriate qualifications, including a general understanding of pharmaceutical development and commercialization issues, to act as its alliance manager under this Agreement (the “Alliance Manager”). The Alliance Managers shall serve as the primary contact points between the Parties for the purpose of providing each Party with information on the progress and results of SAMR’s Development and Commercialization of Licensed Products.  The Alliance Managers shall also be primarily responsible for facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties with respect to Licensed Products.  Each Party may replace its Alliance Manager at any time upon written notice to the other Party.

3.2                               Joint Committees.

(a)                                 JSC Formation and Role.  Within thirty (30) days after the Effective Date, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”) for the overall coordination and oversight of the Parties’ activities under this Agreement.  The role of the JSC shall be:

(i)                                    to review, discuss and coordinate the overall strategy for the Development and Commercialization of Licensed Products in the Applicable Territory, including related regulatory activities;

(ii)                                to review, discuss and approve any proposed amendments or revisions to the Development Plan and to review, discuss and approve the conduct of any Development Activities by SAMR;

(iii)                            to review and discuss the Commercialization Plan and any proposed amendments or revisions to such plan, and review and discuss the Commercialization of Licensed Products in the Applicable Territory;

(iv)                             to coordinate the Commercialization of Licensed Products in the Applicable Territory to ensure consistent global marketing of Licensed Products;

(v)                                 to oversee the activities of the Subcommittees and attempt to resolve issues presented to it by and disputes within the Subcommittees; and

(vi)                             to perform such other functions as appropriate to further the purposes of this Agreement, as expressly set forth in this Agreement or as determined by the Parties in writing.

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(b)                                 Subcommittee(s).  From time to time, the JSC may establish joint subcommittees to oversee particular projects or activities (such as Licensed Product supply, Development and Commercialization), as it deems necessary or advisable (each, a “Subcommittee”, and together with the JSC, the “Committees”).

(c)                                  Members.  Each Committee shall be comprised of an equal number of representatives from each Party.  Each Party’s representatives shall be an officer or employee of such Party or its Affiliate having sufficient authority within the applicable Party to make decisions arising within the scope of the applicable Committee’s responsibilities.  Each Party shall initially appoint two (2) representatives to the JSC.  Each Committee may change its size from time to time by mutual consent of its representatives, and each Party may replace its representatives at any time upon written notice to the other Party.  Each Party shall appoint one (1) of its representatives on each Committee to act as the co-chairperson of such Committee.  The role of the co-chairpersons shall be to convene and preside at the Committee meetings and to ensure the circulation of meeting agendas at least five (5) days in advance of Committee meetings and the preparation of meeting minutes in accordance with Section 3.2(d), but the co-chairpersons shall have no additional powers or rights beyond those held by other Committee representatives.

(d)                                 Meetings.  The JSC shall meet at least twice per calendar year during the Term, unless the Parties mutually agree in writing to a different frequency for such meetings.  Either Party may also call a special meeting of any Committee (by videoconference or teleconference) by at least ten (10) Business Days prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting, and such Party shall provide the applicable Committee no later than ten (10) Business Days prior to the special meeting with materials reasonably adequate to enable an informed decision.  Each Committee may meet in person, by videoconference or by teleconference (provided, however, that, unless the Parties otherwise mutually agree, at least one such JSC meeting per calendar year shall be in person (alternating between the headquarters of Aridis (or one of its Affiliates) and SAMR).  All Committee meetings shall be conducted in English and all communications under this Agreement shall be in English.  The co-chairpersons shall be responsible for preparing reasonably detailed written minutes of the Committee meetings that reflect, without limitation, all material decisions made at such meetings.  The co-chairpersons shall send draft meeting minutes to each representative of the applicable Committee for review and approval within ten (10) Business Days after the Committee meeting.  Such minutes shall be deemed approved unless one or more Committee representatives object to the accuracy of such minutes within ten (10) Business Days of receipt.

3.3                               Decision Making.  Each Committee shall strive to seek consensus in its actions and decision making process and all decisions by the Committees shall be made by consensus, with each Party having collectively one (1) vote in all decisions.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before any Subcommittee, the representatives of the Parties cannot reach an agreement as to such matter within ten (10) Business Days after such matter was brought to such Subcommittee for resolution (to the extent such matter requires the agreement of the Parties hereunder), such disagreement shall be referred to the JSC for resolution.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JSC, the representatives of the Parties cannot reach an agreement as to such matter (to the extent that such matter requires the agreement of the Parties hereunder)

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within ten (10) Business Days after such matter was brought to the JSC for resolution or after such matter has been referred to the JSC, such disagreement shall be referred to the Executive Officers for resolution.  If the Executive Officers cannot resolve such matter within thirty (30) days after such matter has been referred to them, then SAMR’s Executive Officer shall have the final decision making authority with respect to such matter if it is within the JSC’s authority and relates to Worldwide License Products, and Aridis’s Executive Officer shall have the final decision making authority with respect to such matter if it is within the JSC’s authority and relates to Limited License Products; in each case provided, however, that Aridis’s Executive Officer shall have the right to veto any decision by SAMR relating to any of the following matters (any such determination by Aridis shall be in writing and provided to SAMR):

(a)                                 any amendments or updates to the Development Plan or any Development work or product manufacture work that, in Aridis’s reasonable judgment, is likely to have a material adverse effect upon the procurement or maintenance of Regulatory Approval or Commercialization of Licensed Products (including in the Applicable Territory);

(b)                                 with respect to Worldwide License Products, global key product messages in promotional materials, key product messages and content of scientific communications at conferences and events, and communication to advisory boards; and

3.4                               Limitation of Committee Authority.  Each Committee shall only have the powers expressly assigned to it in this Article 3 and elsewhere in this Agreement and shall not have the authority to: (a) modify or amend the terms and conditions of this Agreement; (b) waive or determine either Party’s compliance with the terms and conditions of under this Agreement; or (c) decide any issue in a manner that would conflict with the express terms and conditions of this Agreement.

3.5                               Discontinuation of Committees.  The activities to be performed by each Committee shall solely relate to governance under this Agreement, and are not intended to be or involve the delivery of services.  Each Committee shall continue to exist until the Parties mutually agreeing to disband such Committee.  Once the Parties mutually agree, such Committee shall have no further obligations under this Agreement and, thereafter, each Party shall designate a contact person for the exchange of information relevant to such Committee under this Agreement and decisions of such Committee shall be decisions as between the Parties, subject to the other terms and conditions of this Agreement.

ARTICLE 4
DEVELOPMENT

4.1                               Overview. Subject to the terms and conditions of this Agreement (including the diligence obligations set forth below), SAMR will be responsible for all Development of Worldwide License Products in the Worldwide Territory as is agreed by the JSC and noted in the Development Plans included in Exhibit H, Development Plans, at its own cost and expense, including all non-clinical and clinical studies and all collection of CMC Information necessary to

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obtain Regulatory Approval for Worldwide License Products in the Worldwide Territory (if and to the extent required by any Regulatory Authority in the Worldwide Territory and subject to SAMR’s Commercially Reasonable Efforts).

4.2                               Option for Services Agreement(s) for SAMR Products.  Upon request by SAMR as appropriate during the Term, Aridis and SAMR agree to negotiate to create Services Agreement(s) under which Aridis shall provide research services to SAMR for the identification of up to five (5) candidates for SAMR Products (“Services Agreement(s)”).  Such services shall be negotiated by the Parties when requested by SAMR, and SAMR shall reimburse Aridis for reasonable fees for such services, including its internal and out-of-pocket costs.  If such Services Agreement(s) are entered into by the Parties, they shall be attached hereto and made part of Exhibit J, Option for Services Agreement(s) for SAMR Products.

4.3                               Development Plan.  All Development of Worldwide License Products under this Agreement shall be conducted pursuant to a comprehensive written development plan which sets forth the timeline and details of all non-clinical and clinical studies, CMC Information collection activities and regulatory activities to be conducted by or on behalf of SAMR or its Affiliates or their respective sub-licensees to obtain Regulatory Approval of Licensed Products in the Applicable Territory (the “Development Plan”).  The Parties shall agree on initial Development Plans for all Worldwide License Products, within a reasonable period after the Effective Date, not to exceed one (1) year from the Effective Date, to be attached hereto as Exhibit H.  From time to time during the Term (at least on an annual basis), SAMR shall prepare amendments and updates, as appropriate, to the then-current Development Plan, and shall submit such amendments and updates to the JSC for review and approval.  If, as a condition for MAA approval for Worldwide License Products in the Applicable Territory for any Indication, a Regulatory Authority requires additional clinical trials and/or other testing that, in either case, are not stipulated in the initial Development Plan (or any Development Plan previously approved in accordance with this Agreement), then SAMR shall promptly prepare a revised Development Plan for such additional clinical trials and/or other testing.  Notwithstanding the provisions of Section 3.3, approval of any such amendment to the Development Plan shall require the approval of both Parties, not to be unreasonably withheld.  If the terms of the Development Plan contradict, or create inconsistencies or ambiguities with, the terms of this Agreement, then the terms of this Agreement shall govern.

4.4                               Diligence.  SAMR shall use Commercially Reasonable Efforts to Develop and obtain Regulatory Approval of Licensed Products in the Applicable Territory.  Without limiting the foregoing, SAMR shall file Marketing Authorization Applications and achieve First Commercial Sale of Limited License Products and AR-201 Product, in India, according to the schedules as may be agreed by the Parties in Exhibit H.

4.5                               Development Records.  SAMR shall maintain complete, current and accurate records of all activities conducted pursuant to the Development Plan by SAMR, its Affiliates and their respective sub-licensees, and all Data and other Information resulting from such activities.  Such records shall fully and properly reflect all work done and results achieved in the performance of the Development activities in good scientific manner appropriate for regulatory and patent purposes.  SAMR shall document all non-clinical studies and clinical trials in formal written study records according to applicable Laws, including applicable national and international guidelines such as ICH, GCP and GLP.  Aridis shall have the right to access such records at reasonable times

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and to obtain access to the original to the extent necessary or useful for regulatory or patent purposes as set out in Section 4.7.

4.6                               Development Reports.  SAMR shall keep Aridis reasonably informed as to the progress and results of its and its Affiliates’ and their respective sublicensees’ work under the Development Plan.  Without limiting the foregoing, at each regularly scheduled JSC meeting, SAMR shall provide Aridis with a written report summarizing the Development activities performed since the last JSC meeting and the results thereof, and comparing such activities with the Development Plan for such time period.  Such reports shall be at a level of detail reasonably requested sufficient to determine compliance with diligence obligations under this Agreement.  At such JSC meeting, the Parties shall discuss the status, progress and results of SAMR’s Development activities.  SAMR shall promptly respond to Aridis’s reasonable questions or requests for additional information relating to such Development activities.  In addition, within thirty (30) days after the end of each Fiscal Year, SAMR shall provide Aridis with a detailed written annual report regarding the progress under the Development Plan and results thereof.

4.7                               Data Exchange.  In addition to its adverse event and safety data reporting obligations pursuant to Section 5, SAMR shall promptly provide Aridis with copies of relevant Data and Information related to Licensed Products generated by or on behalf of such Party or its Affiliates or sub-licensees; the JSC shall establish reasonable policies to effectuate such exchange of Data and Information as is reasonable necessary between the Parties.  Aridis shall be obligated to share Data and Information related to regulatory matters as set out in section 5 below.

4.8                               Subcontractors.  SAMR shall have the right to engage subcontractors to conduct any activities necessary for Development of Licensed Products, including but not limited to non-clinical studies, clinical studies, CMC activities, and regulatory services for Licensed Products, under this Agreement, provided that such subcontractors are bound by written obligations of confidentiality and non-use consistent with this Agreement and have agreed in writing to assign to SAMR all data, Information, inventions or other intellectual property generated by such subcontractor in the course of performing such subcontracted work.  SAMR shall remain responsible for any obligations that have been delegated or subcontracted to any subcontractor, and shall be responsible for the performance of its subcontractors.

ARTICLE 5
REGULATORY MATTERS

5.1                               Regulatory Responsibilities.

(a)                                 Subject to the terms and conditions of this Agreement, SAMR will be responsible, at its sole cost and expense, for the conduct of all regulatory activities required to obtain and maintain Regulatory Approval of Licensed Products in the Applicable Territory, including the preparation of all Regulatory Materials and all communications and interactions with Regulatory Authorities in the Applicable Territory with respect to Licensed Products.  SAMR shall be responsible for filing each MAA in the Applicable Territory for each Licensed Product and will be the holder of (or its distributing sub-licensee shall be the holder of, on behalf of SAMR) the

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Regulatory Approval for each Licensed Product in the Applicable Territory. The Development Plan shall include the regulatory strategy for obtaining Regulatory Approval of Licensed Products in the Applicable Territory.  SAMR shall use Commercially Reasonable Efforts to carry out its regulatory obligations for Licensed Products pursuant to such strategy.

(b)                                 With respect to AR-201 Product and Limited License Products, the following terms shall apply:  Aridis shall provide such assistance and cooperation to SAMR as SAMR may reasonably request (subject to SAMR’s reimbursement of Aridis’s external costs and expenses related thereto), with respect to the satisfaction of its obligations under Section 5.1(a), including in connection with the preparation of Regulatory Materials.  Aridis shall provide such sections of any Common Technical Document or other Regulatory Materials as are in its possession as are reasonably necessary for SAMR’s satisfaction of its obligations hereunder and as agreed by the JSC.  Any transfer of CMC Information, Regulatory Materials or other Aridis Data or Aridis IP as set forth in this Section is conditioned on SAMR establishing appropriate firewalls or equivalent means to ensure that such Information is protected from unauthorized disclosure and is used only for legal and regulatory compliance purposes and not for any other purpose.  SAMR shall ensure that any information provided by or on behalf of Aridis pursuant to this Section 5.1 shall only be disclosed to those identified personnel of SAMR (or a designated agreed Third Party) who (a) have a need to know the same to comply with the above obligations, and (b) have been fully informed of and acknowledge the highly sensitive and proprietary nature of such information and the need to maintain its secrecy and avoid inappropriate usage or disclosure, by using the firewall or equivalent means.

5.2                               Pricing.  SAMR shall be solely responsible and liable for, and shall indemnify Aridis in connection with, any Losses (as defined below) arising from Claims (as defined below) brought by Third Parties (including Regulatory Authorities) alleging excessive pricing, or other pricing-related issues, with respect to Licensed Product in the Applicable Territory.  With respect to the obligations noted above in this section 5.2, SAMR shall keep Aridis reasonably informed of, and promptly provide Aridis for its review and comment, with (a) drafts of any material filings or responses to be made to the a Regulatory Authority and (b) copies of all material communications from any Regulatory Authority in the Applicable Territory, in each case, in a reasonable amount of time in advance of submitting such applications, filings or responses. SAMR shall reasonably consider in good faith comments provided by Aridis with respect to all of the foregoing (a) and (b).

5.3                               Regulatory Information Sharing.  SAMR shall (a) provide Aridis with Regulatory Materials used by it in the Applicable Territory according to such procedures as are agreed by the JSC (the JSC shall reasonable accommodate Aridis’ request for advance submission of relevant Regulatory Materials related to Limited License Products); and (b) shall keep Aridis informed of any material verbal or written communication or question relating to Limited License Products and AR-201 Product received by SAMR from a Regulatory Authority in the Applicable Territory.  Except as required by applicable Law, SAMR, its Affiliates and sublicensees shall not submit any Regulatory Materials to, or communicate with, any Regulatory Authority except in an Applicable Territory regarding any Licensed Products.  If such submission or communication is required by applicable Law, SAMR shall immediately notify Aridis in writing of such requirement and the content of such submission or communication.

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5.4                               Meetings with Regulatory Authorities.  SAMR shall lead all interactions with Regulatory Authorities in the Applicable Territory with respect to Licensed Products.  SAMR shall keep Aridis reasonably informed of any material regulatory developments related to Licensed Products in the Applicable Territory.  At each regularly scheduled JSC meeting, SAMR shall provide Aridis with a list and schedule of any in-person meeting or teleconference with the applicable Regulatory Authorities (or related advisory committees) in the Applicable Territory planned for the next calendar quarter that relates to any Licensed Product.  In addition, SAMR shall notify Aridis as soon as reasonably possible (but in no event later than two (2) Business Days) after SAMR becomes aware of any additional such meetings or teleconferences that become scheduled for such calendar quarter.  Aridis shall provide all reasonable assistance requested by SAMR to prepare for any such meeting or teleconference relating to Limited License Products. To the extent permitted by applicable Laws, Aridis shall have the right to participate (whether directly or through a representative) in all such meetings and teleconferences.

5.5                               Regulatory Costs.  Unless otherwise provided in this Agreement, SAMR shall be responsible for the costs and expenses incurred in connection with the preparation and filing of any and all Regulatory Materials and the maintenance of any and all Regulatory Approvals (including MAA approvals) for Licensed Products in the Applicable Territory.

5.6                               Right of Reference to Regulatory Materials (including relevant portions of Drug Master Files).  Each Party hereby grants to the other Party the right of reference to all Regulatory Materials pertaining to Licensed Products submitted by or on behalf of such Party.  The receiving Party may use such right of reference solely for the purpose of seeking, obtaining and maintaining Regulatory Approval of Licensed Products in its respective territory.  Each Party shall support the other Party, as reasonably requested by such other Party and at such other Party’s expense, in obtaining Regulatory Approvals in such other Party’s territory, including providing necessary documents or other materials required by applicable Laws to obtain Regulatory Approval in such territory, all in accordance with the terms and conditions of this Agreement.

5.7                               No Harmful Actions.  If either Party believes that a Party is taking or intends to take any action with respect to any Licensed Product that could reasonably be expected to have a material adverse impact upon the development, manufacture, commercialization or regulatory status of any Licensed Product, that Party may bring the matter to the attention of the JSC and the Parties shall discuss in good faith to promptly resolve such concern.

5.8                               Notification of Threatened Action.  Each Party shall immediately notify the other Party of any information it receives regarding any threatened or pending action, inspection or communication by or from any Third Party, including without limitation a Regulatory Authority, which may adversely affect the development, manufacture, commercialization or regulatory status of any Licensed Product.  Upon receipt of such information, the Parties shall consult with each other in an effort to arrive at a mutually acceptable procedure for taking appropriate action.

5.9                               Adverse Event Reporting and Safety Data Exchange.  No later than ninety (90) days before the commencement of a clinical study with respect to Development of any Limited License Product by SAMR in the Applicable Territory, the Parties shall define and finalize the actions that the Parties shall employ with respect to such Licensed Product to protect patients and promote their well-being in a written pharmacovigilance agreement (the “Pharmacovigilance

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Agreement”) for the Development of the Licensed Product.  Further, no later than one hundred and eighty (180) days before the anticipated launch date of any Limited License Product in the Applicable Territory, the Parties shall enter into a separate Pharmacovigilance Agreement for the Commercialization of the Licensed Product.

5.10                        Remedial Actions.  Each Party will notify the other Party immediately, and promptly confirm such notice in writing, if it obtains information indicating that any Licensed Product may be subject to any recall, corrective action or other regulatory action taken by virtue of applicable Laws (a “Remedial Action”).  The Parties will assist each other in gathering and evaluating such information as is necessary to determine the necessity of conducting a Remedial Action.  SAMR shall, and shall ensure that its Affiliates and sublicensees will, maintain adequate records to permit the Parties to trace the distribution, sale and use (to the extent possible) of Licensed Products in the Applicable Territory.  If SAMR or any of its Affiliates determines that any Remedial Action with respect to any Licensed Product in an Applicable Territory should be commenced or is required by applicable Laws or Regulatory Authority,  then such Remedial Action shall be at the expense of SAMR. Remedial Actions that are not required by Law, but are deemed necessary by Aridis in the exercise of reasonable discretion, may be required by Aridis, the expenses of which shall be borne by Aridis unless agreed by the JSC.  Otherwise, each Party shall provide the other Party, at the other Party’s expense, with such assistance in connection with a Remedial Action as may be reasonably requested by such other Party.  Notwithstanding the foregoing, any Remedial Action that relates to the manufacture and supply of Licensed Products by one Party to another shall be governed by the terms and conditions of the relevant Supply Agreement.

ARTICLE 6
COMMERCIALIZATION

6.1                               Overview.  Subject to the terms and conditions of this Agreement (including the diligence obligations set forth below), SAMR will be responsible for and have operational control over all aspects of the Commercialization of Licensed Products in the Applicable Territory, including:  (a) developing and executing a commercial launch and pre-launch plan, (b) negotiating with applicable Governmental Authorities regarding the price and reimbursement status of Licensed Products (subject to Section 5.2); (c) marketing, advertising and promotion; (d) booking sales and distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection, inventory and receivables; (f) providing customer support, including handling medical queries, and performing other related functions; and (g) conforming its practices and procedures to applicable Laws relating to the marketing, detailing and promotion of Licensed Products in the Applicable Territory.  SAMR shall bear all of the costs and expenses incurred in connection with such Commercialization activities. Aridis shall provide and/or disclose to SAMR upon SAMR’s request, and no more than once each calendar quarter, at SAMR’s cost, copies of any Licensed Product-related materials that are necessary or useful in connection with SAMR’s Commercialization of Licensed Products in the Applicable Territory (including relevant training materials, global brand and global market research, in each case, with respect to Licensed Products).

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6.2                               Commercialization Plan.

(a)                                 General.  SAMR shall Commercialize Licensed Products in the Applicable Territory pursuant to a commercialization plan (the “Commercialization Plan”).  The Commercialization Plan shall include (i) a detailed description of all key strategic decisions (including messaging, branding, marketing, advertising, sales force positioning, number of representatives and details, pricing strategy, etc.), implementation tactics and pre-launch and post-launch activities; (ii) a reasonably detailed description and timeline of SAMR’s, its Affiliates’ and their respective sublicensees’ Commercialization activities for Licensed Products in the Applicable Territory for the next Fiscal Year, including medical marketing activities, sales forecasts and projections, pricing, reimbursement, market research, sales training, distribution channels, customer service and sales force matters related to the launch and sale of Licensed Products in the Applicable Territory, and (iii) a strategic plan for Commercialization of Licensed Products in the Applicable Territory for the following two (2) Fiscal Years.

(b)                                 Initial Plan and Amendments.  Within a reasonable time (but no later than six (6) months) prior to the anticipated Regulatory Approval of each Licensed Product in the Applicable Territory, SAMR shall prepare and present to the JSC (or a Subcommittee established by JSC to oversee Commercialization of Licensed Products in the Applicable Territory) the initial Commercialization Plan for review and discussion by the JSC.  From time to time during the Term (at least on an annual basis), SAMR shall prepare updates and amendments, as appropriate, to the then-current Commercialization Plan, and shall submit all updates and amendments to the Commercialization Plan to the JSC for review and discussion.  Once reviewed by the JSC, the Commercialization Plan shall become effective and supersede the previous Commercialization Plan as of the date of such approval.

6.3                               Pricing.  Subject to any determination by applicable Regulatory Authorities, SAMR shall have the sole right to determine the pricing of the Licensed Products in the Applicable Territory. SAMR shall review its Commercialization Plans, only in the case for neighboring countries of Aridis territory with JSC, to minimize the potential that Aridis’ worldwide commercialization strategies, including pricing strategies, for Aridis’ commercialization of Limited License Products outside of the Limited Territory, will not be negatively impacted by the Commercialization Plan, including pricing strategy, developed by SAMR pursuant to this Section 6. Further, it is agreed between the Parties that SAMR is not under an obligation to review its Commercialization Plans for GAVI Countries.

6.4                               Commercialization Diligence.  SAMR shall use Commercially Reasonable Efforts to Commercialize the Licensed Products in the Applicable Territory. Subject to the foregoing, SAMR shall perform, in all material respects, the activities specified in the Commercialization Plan.

6.5                               Commercialization Reports.  SAMR shall keep Aridis reasonably informed of SAMR’s, its Affiliates’ and their respective sublicensees’ Commercialization activities with respect to the Licensed Products in the Applicable Territory.  Without limiting the foregoing, at each regularly scheduled JSC meeting, SAMR shall provide Aridis with a written report summarizing the significant Commercialization activities performed with respect to the Licensed Products since the last JSC meeting, and shall respond promptly to reasonable questions thereto.

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In addition, within sixty (60) days after the end of each Fiscal Year, SAMR shall provide Aridis with a reasonably detailed progress report describing SAMR’s progress under the Commercialization Plan and results thereof.

6.6                               Cross-Territorial Restrictions.  SAMR hereby covenants and agrees that it shall not, and shall ensure that its Affiliates and sublicensees will not, intentionally or knowingly, either directly or indirectly, promote, market, distribute, import, sell or have sold the Licensed Products, including via internet or mail order, into countries outside the Applicable Territory.  As to such countries outside the Applicable Territory (which are exclusively reserved for Aridis), SAMR shall not, and shall ensure that its Affiliates and their respective sublicensees will not: (a) establish or maintain any branch, warehouse or distribution facility for Licensed Products in such countries, (b) engage in any advertising or promotional activities relating to Licensed Products that are directed primarily to customers or other purchaser or users of Licensed Products located in such countries, (c) solicit orders for Licensed Products from any prospective purchaser located in such countries, or (d) sell or distribute Licensed Products to any person in the Applicable Territory who intends to sell or has in the past sold Licensed Products in such countries.  If SAMR receives any order for any Licensed Product from a prospective purchaser reasonably believed to be located in a country outside the Applicable Territory, SAMR shall immediately refer that order to Aridis and SAMR shall not accept any such orders.  SAMR shall not, intentionally or knowingly, deliver or tender (or cause to be delivered or tendered) Licensed Products into a country outside of the Applicable Territory. SAMR shall not, and shall ensure that its Affiliates and their respective sublicensees will not, knowingly restrict or impede in any manner Aridis’s exercise of its retained exclusive rights outside of the Applicable Territory.

6.7                               Labeling.  SAMR shall provide Aridis with proposed content for labeling and packaging (including with respect to any product inserts) of Licensed Products in the Applicable Territory, for Aridis’s review and approval prior to use; all such approval by Aridis shall be explicitly subject to SAMR’s requirements for compliance with Applicable Laws in applicable countries.  SAMR shall not materially deviate from Aridis’s approved label for the Product in the design or content of the label for any Licensed Product.

ARTICLE 7
MANUFACTURE AND SUPPLY

7.1                               Manufacture and Supply.  SAMR shall be responsible for all manufacture and Supply of all Worldwide License Products.  With respect to Limited License Products, manufacturing and supply shall be as set out in Exhibit G, Manufacturing Rights and Obligations  Prior to any manufacture of any Limited Licensed Product by or on behalf of SAMR, whether such manufacture is by SAMR or by Aridis or their respective Affiliates, sublicensees or contractees, the Parties shall enter into appropriate Quality Agreements (“Quality Agreement(s)”), which shall include such terms as are customary in the industry regarding the manufacture, supply, storage, transportation, recording and testing of all Licensed Products to be used in any way by SAMR (including clinical trial material) hereunder.  All such Quality Agreements shall be appended to this Agreement, upon execution.

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7.2                               Supply Option. SAMR shall also have an option to supply Limited License Products to Aridis for sale outside the Limited Territory, which option shall be solely as set out in Exhibit G, Manufacturing Rights and Obligations.

7.3                               Distribution.  SAMR will be solely responsible for the distribution of Licensed Products in the Applicable Territory.

7.4                               Brand Security and Anti-Counterfeiting.  The Parties will establish contacts for communication regarding brand security issues and will each reasonably cooperate with the other with respect thereto.

ARTICLE 8
COMPENSATION

8.1                               Upfront Payment.

8.1.1                     Upon the Effective Date, SAMR shall pay to Aridis a one-time, non-refundable, non-creditable upfront payment of fifteen million U.S. dollars, payable as follows:

(a)                         The Parties acknowledge that Affiliate of SAMR has made a payment of five million U.S. dollars ($5,000,000.00) to Aridis pursuant to the terms of the Option for Exclusive Product and Platform Technology License, executed by the Parties as of July 16, 2019.  That payment is required consideration under this License Agreement.

(b)                         Within five (5) days of the Effective Date, SAMR shall make a further payment of ten million U.S. dollars ($10,000,000).

8.1.2                     The payment of amount referred at 8.1.1 (a) has been made by Affiliate of SAMR. For the sake of good accounting practices and regulations, Aridis will refund the said amount to Affiliate (SIBV) immediately after payment by SAMR pursuant to section 8.1.1(b) and SAMR will immediately pay the said amount to Aridis.

8.2                               [This section intentionally left blank.]

8.3                               Development and Commercialization Costs.

(a)                                 SAMR shall bear all costs and expenses incurred in the Development of Licensed Products in the Applicable Territory in accordance with Article 4.

(b)                                 SAMR shall promptly reimburse Aridis for expenses incurred by Aridis to conduct activities to support the Development and Commercialization of Licensed Products in the Applicable Territory (to the extent as expressly provided for in this Agreement).

8.4                               SAMR payments for Aridis Milestones. Aridis shall promptly notify SAMR upon the achievement of each milestone event set forth below, and SAMR shall pay to Aridis the

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corresponding non-refundable and non-creditable development milestone payment set forth below within thirty (30) days after the receipt of notice from Aridis of its achievement of such milestone:

(a)                                 Successful Completion by Aridis of Phase III clinicals trial with demonstration that at least one primary or secondary endpoint is met in U.S. or Europe for the first Limited License Product:  * US dollars (US $*);

(b)                                 Successful completion  by Aridis of  Phase III clinical trials in USA for the second Aridis Product :  * US dollars (US $*); and

(c)                                  Receipt by Aridis of the first approval of an MAA in the US or Europe for a Limited License Product:  * US dollars (US $*).  (Note:  If approval of an MAA in the US or Europe occurs pursuant to this subsection (c) for one Limited License Product, and approval of an MMA for a separate Limited License Product occurs either in US or Europe or in the Limited Territory, the milestone under subsection (b) shall also be deemed to have been met and both milestones will be concurrently paid.)