Contract analysis

Section 1.1 Definitions As used in this Agreement, the following capitalized terms shall have the meanings set forth below: "Affiliate" means, with respect to a Party, any Person that directly or indirectly controls, is controlled by, or is under common control with such Party. For purposes of this definition, "control" means (a) the direct or indirect ownership of fifty percent (50%) or more of the outstanding votin

Section 1.2 Interpretation In this Agreement, unless the context otherwise requires: (a) the singular includes the plural and vice versa, and reference to any gender includes the other gender and the neuter; (b) "including" and "includes" mean "including without limitation" and "includes without limitation," respectively; (c) headings and captions are for convenience of reference only and shall not be used in interpr

Section 2.1 Exclusive License Subject to the terms and conditions of this Agreement, Penterra hereby grants to Meridian an exclusive (even as to Penterra and its Affiliates), royalty-bearing license, with the right to sublicense in accordance with Section 2.2, under the Licensed Patents, the Licensed Know-How, and the Licensed Trademarks, to develop, manufacture, have manufactured, use, import, export (solely within

Section 2.2 Sublicensing Rights (a) Meridian shall have the right to grant sublicenses under the license granted in Section 2.1 to Affiliates and Third Parties in the Territory, subject in each case to the prior written consent of Penterra, which consent shall not be unreasonably withheld, conditioned, or delayed. Any request for consent shall be made in writing and shall include the identity of the proposed sublicen

Section 2.3 Retention of Rights by Penterra (a) Penterra retains all rights to develop, manufacture, use, import, offer for sale, sell, distribute, and otherwise commercialize Licensed Products outside the Territory (i.e., in the Retained Territory) for any indication, either independently or through its Affiliates, licensees, or sublicensees. (b) Penterra retains the right to use the Licensed IP for internal researc

Section 2.4 Non-Compete During the Term, (a) Meridian shall not, and shall cause its Affiliates not to, directly or indirectly develop, manufacture, use, import, offer for sale, sell, distribute, or otherwise commercialize any other selective JAK1 inhibitor for the treatment of atopic dermatitis in the Territory that would be competitive with Licensed Products, and (b) Penterra shall not, and shall cause its Affiliat

Section 2.5 No Diversion Meridian shall not, and shall cause its Affiliates and sublicensees not to, directly or indirectly sell, distribute, market, export, or otherwise transfer or divert Licensed Products outside the Territory. Without limiting the generality of the foregoing, Meridian shall implement and maintain commercially reasonable measures, including contractual restrictions with its distributors and sublic

Section 3.1 General The Parties shall establish and maintain joint committees as described in this Article III to oversee and coordinate the development, regulatory, intellectual property, and commercialization activities contemplated by this Agreement. Each committee shall operate in accordance with the provisions of this Article III and shall serve in an advisory and oversight capacity, except to the extent that sp

Section 3.2 Joint Steering Committee (JSC) (a) Establishment and Composition. Within thirty (30) days of the Effective Date, the Parties shall establish a Joint Steering Committee comprised of six (6) members, with three (3) representatives designated by Penterra and three (3) representatives designated by Meridian. Each Party's representatives shall have sufficient seniority and decision-making authority to enable t

Section 3.3 Joint Patent Committee (JPC) (a) Establishment and Composition. Within thirty (30) days of the Effective Date, the Parties shall establish a Joint Patent Committee comprised of four (4) members, with two (2) representatives designated by Penterra and two (2) representatives designated by Meridian. Each Party's JPC representatives shall have appropriate expertise in patent law, intellectual property manage

Section 3.4 Committee Reports (a) Each committee established pursuant to this Article III shall prepare written minutes of each meeting, which shall be circulated to all members of the applicable committee for review and approval within ten (10) Business Days of such meeting. In the event of any dispute regarding the accuracy of the minutes, the co-chairs of the applicable committee shall meet and confer to resolve s

Section 3.5 Dispute Escalation Within Committees (a) In the event that the JSC or the JPC is unable to reach consensus on a matter within its purview, such matter shall be escalated to the Chief Executive Officer of each Party (Dr. Raymond K. Ostrowski for Penterra and Angela C.Y. Fong for Meridian, or their respective successors or designees) for attempted resolution through good faith discussion within thirty (30)

ARTICLE IV — DEVELOPMENT AND REGULATORY

Section 4.1 Development Plan Meridian shall use Commercially Reasonable Efforts to develop Licensed Products in the Territory in accordance with the Development Plan set forth in Schedule E, as such plan may be amended from time to time by the JSC in accordance with the provisions of this Agreement. The Development Plan shall include, among other things, the Phase III trial design (including the primary and secondary

Section 4.2 Development Diligence (a) Meridian shall initiate at least one (1) Phase III Trial of a Licensed Product in the Territory within eighteen (18) months of the Effective Date (i.e., by no later than April 9, 2025, assuming an Effective Date of October 9, 2023). For purposes of this Section 4.2(a), "initiation" means the dosing of the first patient in such Phase III Trial. (b) Meridian shall use Commercially

Section 4.3 Regulatory Responsibilities (a) Meridian shall be solely responsible for all regulatory submissions, filings, and interactions with Regulatory Authorities in the Territory with respect to Licensed Products, including all applications for Regulatory Approval, at Meridian's sole cost and expense. Meridian shall conduct all regulatory activities in compliance with applicable laws, regulations, and guidelines

Section 4.4 Clinical Supply Penterra shall supply API and reference standard to Meridian for use in clinical trials of Licensed Products in the Territory, in accordance with the terms and conditions of the Supply Agreement executed concurrently herewith, as further described in Article IX. The pricing, forecasting, ordering, delivery, and quality specifications for such clinical supply shall be governed exclusively b

Section 4.5 Data Sharing (a) Each Party shall share with the other Party all safety, efficacy, and CMC data relevant to the global development of Licensed Products, in a timely manner and in a format reasonably requested by the receiving Party. Such data sharing shall be subject to the confidentiality provisions of Article VII. (b) Within thirty (30) days of the Effective Date, Penterra shall provide Meridian with a

Section 4.6 Regulatory Approvals — Territory Subsidiaries Meridian may hold Regulatory Approvals in the Territory through its duly organized and validly existing Affiliates, including without limitation: (a) Meridian Pharma (Shanghai) Co., Ltd., a limited liability company organized under the laws of the People's Republic of China, for Regulatory Approvals in the PRC; (b) Meridian Japan K.K., a kabushiki kaisha organ

Section 5.1 Upfront Payment In consideration of the license granted under Section 2.1, Meridian shall pay to Penterra a non-refundable, non-creditable upfront payment of Eighteen Million United States Dollars (US$18,000,000) at Closing. Such payment shall be made via the escrow arrangement established under the Escrow Agreement entered into among Penterra, Meridian, and Velthorn National Bank, N.A. (the "Escrow Agent

Section 5.2 Development Milestone Payments Subject to the terms and conditions of this Agreement, Meridian shall pay to Penterra the following one-time, non-refundable, non-creditable development milestone payments upon the first achievement of each of the following Development Milestones, for a total aggregate amount of Thirty-Two Million United States Dollars (US$32,000,000): Each Development Milestone payment shal

Section 5.3 Regulatory Milestone Payments Subject to the terms and conditions of this Agreement, Meridian shall pay to Penterra the following one-time, non-refundable, non-creditable regulatory milestone payments upon the first achievement of each of the following Regulatory Milestones in the corresponding country, for a total aggregate amount of Twenty-Five Million United States Dollars (US$25,000,000): Each Regulat

Section 5.4 Commercial / Sales Milestone Payments Subject to the terms and conditions of this Agreement, Meridian shall pay to Penterra the following one-time, non-refundable, non-creditable commercial milestone payments upon the first achievement of each of the following Annual Net Sales thresholds, for a total aggregate amount of Forty-Five Million United States Dollars (US$45,000,000): Each commercial milestone pa

Section 5.5 Total Deal Value The aggregate potential consideration payable by Meridian to Penterra under Sections 5.1 through 5.4, exclusive of royalties, Sublicense Income pass-through payments, and MFN Adjustment Payments, is One Hundred Twenty Million United States Dollars (US$120,000,000), comprising Eighteen Million Dollars (US$18,000,000) in upfront payments, Thirty-Two Million Dollars (US$32,000,000) in develo

Section 5.6 Royalties (a) Tiered Royalties on Annual Net Sales in Territory Subject to the terms and conditions of this Agreement, during the Royalty Term, Meridian shall pay to Penterra tiered royalties on Annual Net Sales of Licensed Products in the Territory, calculated on a Calendar Year basis across all countries in the Territory, at the following rates: For the avoidance of doubt, the royalty rates set forth ab

Section 5.7 Royalty Reports and Records (a) Quarterly Royalty Reports. Within sixty (60) days of the end of each Calendar Quarter during the Royalty Term, Meridian shall deliver to Penterra a written royalty report setting forth in reasonable detail, for each country in the Territory: (i) the gross invoiced sales and Net Sales of each Licensed Product during such Calendar Quarter, including a breakdown of each deduct

Section 5.8 Most Favored Nation Pricing (a) MFN Obligation Meridian shall not offer, and shall cause its Affiliates and sublicensees not to offer, PPC-4187 (under any trade name, including PENTECLAR, or any other brand name, or as an unbranded product) in any country in the Territory at a net price (measured on a per-unit basis for the same dosage strength and comparable pack size) that is more than fifteen percent (

Section 5.9 Payment Terms (a) All payments under this Agreement shall be made in United States Dollars (US$) by wire transfer of immediately available funds to such bank account(s) as Penterra may designate in writing from time to time. (b) Any payment not received by Penterra on or before the applicable due date shall bear interest from the due date until the date of actual payment at a rate equal to the lesser of (

Section 5.10 Taxes (a) Withholding Taxes. All royalty, milestone, and other payments under this Agreement shall be subject to applicable withholding taxes, if any, imposed by the laws of the jurisdiction from which such payment is made. For payments made by Meridian (as a Hong Kong entity) to Penterra (as a U.S. entity), the Parties note that under the current U.S.–Hong Kong tax arrangements, no withholding tax is im

ARTICLE VI — INTELLECTUAL PROPERTY

Section 6.1 Ownership of Licensed IP (a) Penterra retains full and exclusive ownership of all Licensed Patents, Licensed Know-How, and Licensed Trademarks, and nothing in this Agreement shall be construed to transfer or convey ownership of any Licensed IP from Penterra to Meridian or any other Person. (b) As between the Parties, inventions, discoveries, improvements, and know-how arising from development activities c