CONFIDENTIAL TREATMENT REQUEST RESEARCH COLLABORATION AND LICENSE AGREEMENT by and between ASTRAZENECA AB and PALATIN TECHNOLOGIES, INC. INFORMATION MARKED " *** " IS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER RULE...

ASTRAZENECA AB, a company incorporated in Sweden under no. 556011-7482 with offices at ▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (“AstraZeneca”); and

PALATIN TECHNOLOGIES, INC., a Delaware corporation with its principal place of business at ▇-▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (“Palatin”).

WHEREAS, Palatin is engaged in research regarding modulation of the activity of the MC4 receptor, including regulation of appetite for treatment of obesity, diabetes and related metabolic syndrome; and

WHEREAS, AstraZeneca and its Affiliates (as defined below) have specialised experience in, among other things, the research, development, manufacturing and commercialisation of pharmaceutical compounds worldwide; and

WHEREAS, the Parties wish to engage in a research collaboration utilising the Parties’ respective knowledge, skills and proprietary technology to develop the Agreement Compounds (as defined below) *** (as specified below and in the Research Plan) and up to selection of Candidate Drug (as defined below) for ***; and

WHEREAS, the Parties wish AstraZeneca to be responsible, as a general matter, for all other aspects of the development and commercialisation of the Agreement Compounds and Licensed Products (as defined below); and

WHEREAS, the Parties wish to collaborate as set forth above and Palatin desires to grant a licence to AstraZeneca, and AstraZeneca desires to take a licence, to develop and commercialise the above-mentioned Agreement Compounds and Licensed Products in accordance with the terms and conditions set forth below.

“AAALAC” means the Association for the Assessment and Accreditation of Laboratory Animal Care.

“Additional Indication” means an indication other than such ***.

“Affiliate” means, with respect to a Person, any Person that Controls, is Controlled by or is under common Control with such first Person. For purposes of this definition only, “Control” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or other ownership interest of such Person.

“Agreement” has the meaning set forth in the preamble of this agreement.

“Agreement Compounds” means the Compound and the Collaboration Compound.

“Annual Net Sales” means the Net Sales made during a given Calendar Year.

“Applicable Law” means the applicable laws, rules and regulations, including any rules, regulations, guidelines or other requirements of the Health Authorities, that may be in effect from time to time in the Territory.

“AstraZeneca Background Technologies” means any (a) Information, discovery, invention, products, cultures, biological materials and other materials and compositions (including Collaboration Materials provided by AstraZeneca to Palatin hereunder), owned or Controlled independent of this Agreement by AstraZeneca or its Affiliates at the Effective Date or during the Collaboration Term and introduced at its sole discretion to Palatin under the Research Collaboration by AstraZeneca or its Affiliates and (b) IP Protection Rights pertaining to any of the foregoing.

“AstraZeneca Improvements” means all Results that constitute Improvements to the AstraZeneca Background Technologies.

“AstraZeneca Information” has the meaning set forth in Section 13.1.2.

“AstraZeneca Patents” means Patents with respect to AstraZeneca Improvements.

“AstraZeneca Principal Scientists” means the principal scientists designated by AstraZeneca to be responsible for all Research Collaboration activities undertaken by AstraZeneca and serving as the primary contacts for Palatin on all matters related to the Research Collaboration. The AstraZeneca Principal Scientists are listed in Schedule 1.12 hereto.

“AstraZeneca Product Data” has the meaning set forth in Section 20.7.1.

“Calendar Quarter” means each successive period of three (3) calendar months commencing on 1st January, 1st April, 1st July and 1st October.

“Calendar Year” means each successive period of twelve (12) calendar months commencing on 1st January

“Candidate Drug” or “CD” means an Agreement Compound selected by AstraZeneca in its sole discretion as a candidate for clinical development.

“Change of Corporate Control” means the occurrence of any of the following:

“Collaboration Compound” means any compound, other than a Compound, and any of its metabolites, salts, crystalline forms, esters, free acid forms, free base forms, pro-drug forms, racemates and all optically active forms thereof that are selected by means of ***.

“Collaboration Management Committee” or “CMC” means the joint committee established by the Parties pursuant to Article 4.1.1.

“Collaboration Materials” means any compounds, cells, cell lines, DNA and RNA molecules, plasmids, proteins, crystals, coordinates, antibodies, antibody coding DNA sequences, antibody coding expression vectors and antibody expressing transfected cell lines and other materials and any replications of any of the foregoing, that one Party provides to the other Party to enable such Party to perform work under the Research Collaboration; provided, however, that “Collaboration Materials” shall exclude all Collaboration Results.

“Collaboration Patent” means Patents with respect to Collaboration Results.

“Collaboration Results” means Results that are discovered, conceived, reduced to practice or otherwise generated through work performed, jointly or by either Party, under the Research Collaboration, provided, however, that Collaboration Results shall exclude all AstraZeneca Improvements other than as provided in the last sentence of Section 1.18.

“Collaboration Term” has the meaning specified in Section 20.2.

“Collaboration Year” means the twelve-month period starting on the Effective Date and any immediately subsequent twelve-month period.

“Combination Product” means a Product that contains an Agreement Compound together with one or more other active ingredient(s) that are sold either as a fixed dose or as separate doses in a single package.

“Commercially Reasonable Efforts” means, with respect to the research, development, Manufacture or commercialisation of an Agreement Compound or Licensed Product, as the case may be, efforts and resources used by AstraZeneca for its own compounds or products with similar commercial and scientific potential at a similar stage in their lifecycle, taking into consideration their safety and efficacy, their cost to develop, the competitiveness of alternative products and the nature and extent of their market exclusivity (including Patent coverage and regulatory exclusivity), the likelihood of regulatory approval, their estimated overall profitability, including the amounts of marketing and promotional expenditures with respect to the Licensed Products and Competing Products and all other relevant factors. Commercially Reasonable Efforts shall be determined on a market-by-market basis for each Agreement Compound and each Licensed Product, as applicable; provided, however, that should what would otherwise constitute Commercially Reasonable Efforts with respect to an individual market conflict with, or otherwise not constitute, Commercially Reasonable Efforts with respect to a group of markets out of which such individual market is a part then Commercially Reasonable Efforts shall be determined for such group of markets as a whole.

“Competing Product” has the meaning set forth in Section 11.5.1.

“Compound” means compounds covered or claimed by the Licensed Patents.

“Confidential Information” has the meaning set forth in Section 13.1.1.

“Control” means, with respect to any item of Information, Patent or other IP Protection Right, possession of the right, whether directly or indirectly, and whether by ownership, license or otherwise, to assign, or grant a license, sublicense or other right to or under, such information, Patent or other IP Protection Right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

“Defending Party” has the meaning set forth in Section 17.4.

“Development Project” means any activities under this Agreement by or on behalf of AstraZeneca or its Affiliates outside of the Research Collaboration with the aim of developing one or more Licensed Products.

“Development Report” has the meaning set forth in Section 6.3.

“Development Results” means any and all Results not constituting Collaboration Results or AstraZeneca Improvements.

“Disclosing Party” has the meaning set forth in Section 13.1.1.

“Distributor” has the meaning set forth in Section 7.8.

“Effective Date” means the date as set forth in the preamble to this Agreement.

“Europe” means the European Economic Area as it may be constituted from time to time.

“Exploit” means to make, have made, import, use, sell, or offer for sale, including to research, develop, register, modify, enhance, improve, Manufacture, have Manufactured, hold/keep (whether for disposal or otherwise), formulate, optimise, have used, export, transport, distribute, promote, market or have sold or otherwise dispose or offer to dispose of, a product or process.

“Exploitation” means the act of Exploiting a product or process.

“FDA” means the United States Food and Drug Administration and any successor agency thereto.

“First Commercial Sale” means the first sale for monetary value for use or consumption by the general public of a Licensed Product in any country in the Territory after Health Registration Approval for the sale of such Licensed Product has been obtained in such country. For the avoidance of doubt, sales prior to receipt of all Health Registration Approvals necessary to commence regular commercial sales, such as so-called “treatment IND sales,” “named patient sales” and “compassionate use sales,” shall not be construed as a First Commercial Sale.

“Force Majeure” has the meaning set forth in Section 21.1.

“Force Majeure Party” means a Party prevented or delayed in its performance under this Agreement by an event of Force Majeure.

“FTE” means the equivalent of one (1) researcher being at least a graduate or a similarly qualified employee of Palatin having the requisite skills to fulfill Palatin’s obligations under this Agreement and devoting the equivalent hours of a full time employee. For purposes of this Agreement, “full time” shall *** per Calendar Year as determined in accordance with Palatin’s regular project hour reporting system. An FTE shall be an employee of Palatin or a permitted subcontractor pursuant to Section 3.3.

“FTE Rate” means the price of one (1) FTE per single Calendar Year. The FTE Rate shall be ***. The FTE Rate reflects the fully burdened costs for an FTE. AstraZeneca shall not be responsible for any Palatin ***, incurred in pursuit of the Research Collaboration and the consultation services rendered by Palatin under this Agreement, above and beyond the FTE Rate, or for ***.

“Grant-Back Patents” has the meaning set forth in Section 20.7.2.

“Health Authority” means any applicable supra-national, federal, national, regional, state, provincial or local regulatory agency, department, bureau, commission, council or other government entity regulating or otherwise exercising authority with respect to the Exploitation of Agreement Compounds or Licensed Products in the Territory

“Health Registration Approval” means, with respect to a country in the Territory, any and all approvals, licenses, registrations or authorisations of any Health Authority necessary to commercially distribute, sell or market a Licensed Product in such country, including, where applicable, (a) pricing and reimbursement approval in such country, (b) pre- and post-approval marketing authorisations (including any prerequisite Manufacturing approval or authorisation related thereto), (c) labelling approval and (d) technical, medical and scientific licenses.

“Improvements” means any improvements, adaptations, modifications or upgrading, and any IP Protection Rights related thereto.

“ICC” has the meaning set forth in Section 24.2.

“Information Forum” or “IF” has the meaning set forth in Section 4.3.2.

***.

“IND” means an investigational new drug application filed with the FDA for authorisation to commence human clinical trials in the U.S., and its equivalent in other countries or regulatory jurisdictions in the Territory.

“Indemnification Claim Notice” has the meaning set forth in Section 19.3.

“Indemnified Party” means a Party, its Affiliates or its or their respective directors, officers, employees and agents designated under Section 19.1 or 19.2, as applicable, seeking to recover a Loss under such applicable Section.

“Indemnifying Party” means a Party from whom recovery of a Loss is sought under Section 19.1 or 19.2.

“Indemnitee” has the meaning set forth in Section 19.3.

“Indirect Taxes” means value added taxes, sales taxes, consumption taxes and other similar taxes.

“Information” means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including: the process and results of high-throughput screening, gene expression, genomics, proteomics and other drug discovery and development technology; biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols; assays and biological methodology; Manufacturing and quality control procedures and data, including test procedures; and synthesis, purification and isolation techniques, (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed, but excluding the Regulatory Documentation.

“Infringement Suit” has the meaning set forth in Section 17.4.

“IP” has the meaning set forth in Section 20.10.

“IP Protection Rights” means any and all legal means of establishing rights in and to ideas, inventions, discoveries, know-how, data, databases, documentation, reports, materials, writings, designs, computer software, processes, principles, methods, techniques and other information, including Patents, trade marks, service marks, trade names, registered designs, design rights, copyrights (including rights in computer software and database rights) and any rights or property similar to any of the foregoing in any part of the world, whether registered or not, together with the right to apply for the registration of any such rights.

“Joint Executive Committee” or “JEC” means the joint committee established by the Parties pursuant to Section 4.2.1.

“Key Personnel” has the meaning set forth in Section 3.2.

“Knowledge” means a Party’s and its Affiliates’ understanding in good faith of the relevant facts and information resulting from the reasonable conduct of its business affairs, but without the requirement of performing an investigation with respect to any such facts and information.

“License” has the meaning set forth in Section 7.5.

“*** Patents” means (a) all patents and patent applications set forth in Schedule 1.68 and (b) any Patents with respect to such patents and patent applications.

“Licensed Field” means the palliative, prophylactic or therapeutic treatment of mammalian, including human, obesity, diabetes and related metabolic syndrome by use of (a) a Compound, other than such Compound mentioned under (b), which binds to the melanocortin-4 receptor or the melanocortin-3 receptor; or (b) a Compound which binds to the melanocortin-4 receptor and is effective for palliative, prophylactic or therapeutic treatment of any mammalian, including human, disease, syndrome or condition as a result of such binding to the melanocortin-4 receptor, but specifically excluding from either of the foregoing ***.

“Licensed Improvement” means any Improvement with respect to an Agreement Compound or Licensed Product or relating to the Exploitation thereof Controlled by Palatin or its Affiliates, not constituting a Development Result, whether or not patentable, that is conceived, reduced to practice, developed or discovered or otherwise made outside the Research Collaboration during the term of this Agreement by or on behalf of Palatin or its Affiliates or by the Parties or their respective Affiliates jointly, or their respective employees and agents (whether alone or jointly with others), or otherwise Controlled by Palatin or its Affiliates at any time prior to and at the Effective Date or during any period in which AstraZeneca owes royalties to Palatin pursuant to Section 11.7, and which AstraZeneca has not rejected pursuant to Section 7.4.1.

“Licensed Know-How” means the Information set out and described in Schedule 1.71 and ***, but excluding any Information to the extent covered or claimed by the Licensed Patents.

***.

“Licensed Patents” means the *** Patents and *** and any Patents claiming or covering any Licensed Improvement.

“Licensed Products” means the Products and the Combination Products.

“Losses” means any and all direct or indirect liability, damage, loss or expense, including interest, penalties and reasonable lawyers’ fees and disbursements. In calculating Losses, the duty to mitigate on the part of the Party suffering the Loss shall be taken into account.

“Major Markets” means (a) ***, (b) ***, or (c) ***.

“Manufacture” and “Manufacturing” means, with respect to a product or compound, the synthesis, manufacturing, processing, formulating, packaging, labelling, holding and quality control testing of such product or compound.

“Net Sales” means the gross invoiced amount on sales of the Licensed Products by AstraZeneca and its Affiliates to Third Parties (including Distributors) after deduction of:

“Non-Defending Party” has the meaning set forth in Section 17.4.

“Palatin Principal Scientists” has the meaning set forth in Section 3.2.

“Parties” means AstraZeneca and Palatin and “Party” means either of AstraZeneca or Palatin.

“Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, ▇▇▇▇▇ patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any such foregoing patent applications and patents.

“Payments” has the meaning set forth in Section 12.1.

“Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government.

“Phase I Clinical Trial” means a clinical study performed in healthy subjects or patients starting with first single dose to man to study the safety and tolerability and/or pharmacokinetic and/or pharmacodynamic properties of a Candidate Drug.

“Phase II Clinical Trial” means a clinical study performed in patients in order to define the optimal dose range for a Phase III Clinical Trial.

“Phase III Clinical Trial” means a large scale, multicenter, human clinical trial (excluding dose ranging studies) to be conducted in a number of patients estimated to be sufficient to primarily establish efficacy of a Licensed Product in the claim of e.g. obesity or diabetes or any other claimed major medical indication and at a standard suitable to obtain a Health Registration Approval in a Major Market.

“Product” means any product in a form suitable for applications for human, veterinary or agricultural use that contains an Agreement Compound as the sole active ingredient.

“Receiving Party” has the meaning set forth in Section 13.1.1.

“Regulatory Documentation” means all applications, registrations, licenses, authorisations and approvals (including all Health Registration Approvals), all correspondence submitted to or received from Health Authorities (including minutes and official contact reports relating to any communications with any Health Authority) and all supporting documents and all clinical studies and tests, relating to any Agreement Compounds or Licensed Products, and all data contained in any of the foregoing, including all IND applications, Health Registration Approvals, regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.

“Research Collaboration” means the research collaboration described in the Research Plans. For the avoidance of doubt, any research or development concerning the Agreement Compounds or the Licensed Products beyond the Research Collaboration will be part of the Development Project.

“Research Plan” means the Discovery Research Plan, attached hereto as Schedule 1.92, outlining the Research Collaboration and each Party’s undertakings and obligations, including ***, in relation thereto as they may be amended from time to time in accordance with Section 4.1.2.

“Results” means ideas, inventions, discoveries, know-how, data, documentation, reports, materials, writings, designs, computer software, processes, principles, methods, techniques and other information, recorded in any form, that are discovered, conceived, reduced to practice or otherwise generated through work performed under or in connection with this Agreement by either Party or by the Parties jointly, and any IP Protection Rights pertaining to any of the foregoing.

***.

“Sublicensee” has the meaning set forth in Section 7.7.

“Term” means the period beginning on the Effective Date and continuing until the earlier of the date upon which this Agreement expires by its terms or is terminated in accordance with Article 20.

***.

“Third Party” means any Person not including the Parties, the Parties’ respective Affiliates or the Sublicensees.

“Third Party Claim” has the meaning set forth in Section 19.1.

“Trademark” means any word, name, symbol, colour, designation or device or any combination thereof for use in the course of trade, including any trademark, trade dress, brand ▇▇▇▇, trade name, brand name, logo or business symbol used by AstraZeneca in connection with the Licensed Products.

“Triggering Event” has the meaning set forth in Section 17.1.

“United States” or “U.S.” means the United States of America, including its territories, possessions and Puerto Rico.

“Valid Claim” shall mean, with respect to a Licensed Product in a particular country, any claim of a Licensed Patent or Collaboration Patent that claims the Agreement Compound included in such Licensed Product as a composition of matter and either:

Subcontracting. Palatin shall be solely responsible for successfully completing its activities set forth in the Research Plan. Palatin shall conduct and carry out all activities provided for under the Research Collaboration through its employees at the site identified under Section 3.2 unless and only to the extent AstraZeneca consents in writing to Palatin engaging a subcontractor to carry out a portion of such activities. Any such permitted subcontract shall be subject to the applicable terms and conditions of this Agreement, including Articles 7 and 13, and, upon AstraZeneca’s request, Palatin shall require each such subcontractor to enter into an undertaking, pursuant to which the terms and conditions of this Agreement shall apply directly between such subcontractor and AstraZeneca, prior to disclosing to such subcontractor any of AstraZeneca’s Confidential Information; provided, however, that Palatin shall remain ultimately responsible for the performance of its obligations under this Agreement. Any fees or costs due any such subcontractor shall be at the sole expense of Palatin, unless otherwise agreed upon in writing.

Collaboration Materials and Information Transfer

Palatin shall, and shall cause its Affiliates, without additional compensation and at Palatin’s sole expense, to provide to AstraZeneca copies of any Licensed Know-How which could be reasonably considered material to the Research Collaboration, not previously provided to AstraZeneca, promptly after the Effective Date. Upon AstraZeneca’s request to Palatin, Palatin shall promptly provide to AstraZeneca any copies of additional Licensed Know-How and originals of Licensed Know-How in those cases where AstraZeneca has a need for the same in connection with the filing and prosecution of patents.

Upon the identification of hits through screening of ***, Palatin shall promptly take all steps reasonably necessary to ensure that information with regard to such compound is not made available or accessible to any Third Party, including by ***.

During the Research Collaboration each Party shall, and shall cause its Affiliates, in accordance with the criteria and mechanisms established by the CMC, disclose and make available to the other Party, in whatever form such Party may reasonably request, all Collaboration Results promptly upon the earlier of the conception or reduction to practice, discovery, development or making of such Collaboration Results.

Each Party shall, and shall cause its Affiliates to, in accordance with the criteria and mechanisms established by the CMC, disclose and make available to the other Party, in whatever form such Party may reasonably request, all Collaboration Material promptly upon the Effective Date or upon the earlier of the conception or reduction to practice, discovery, development or making of such Collaboration Material; provided, however, that notwithstanding the foregoing, AstraZeneca shall only be required to provide or disclose to Palatin such Collaboration Materials and other information as it determines, in its sole discretion, is reasonably necessary for Palatin to perform its activities under the Research Collaboration and AstraZeneca retains the right, in its reasonable discretion, to withdraw any such Collaboration Material information from the Research Collaboration upon written notice to Palatin.

Cooperation. Each Party shall cooperate with any and all reasonable requests for assistance from the other Party with respect to the activities under the Research Collaboration, including by making its employees, consultants and other scientific staff available upon reasonable notice during normal business hours at their respective places of employment to consult with such other Party on issues arising in connection with the Research Collaboration.

Regulatory Records. Palatin and AstraZeneca each shall maintain, or cause to be maintained, records of its respective activities under the Research Collaboration in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of its respective activities under the Research Collaboration, and which shall be retained by such Party for at least *** years after the termination of the Research Collaboration, or for such longer period as may be required by Applicable Law; provided always that before destroying any such record upon expiration of such period Palatin shall offer AstraZeneca in writing to transfer such record to AstraZeneca and shall, should AstraZeneca declare in writing that it wishes to have such record transferred, transfer it to AstraZeneca, at AstraZeneca’s cost, without unreasonable delay. Each Party shall have the right, during normal business hours and upon reasonable notice, to inspect and copy any such records.

Additional Undertakings of Palatin.

During the Collaboration Term and for a period of *** year thereafter, Palatin covenants that it and its Affiliates shall not (a) conduct any research or activity for or on behalf of any Third Party that is aimed at or has as its goal or intent discovering, identifying, Exploiting or otherwise commercialising products for the treatment of ***, or (b) grant any license or other rights to any Person to utilise any intellectual property Controlled by Palatin or its Affiliates for the purpose of discovering, identifying, Exploiting or otherwise commercialising products for the treatment of ***.

For the avoidance of doubt, during the Term of this Agreement Palatin covenants that it and its Affiliates shall not (a) subject to the retained right pursuant to Section 7.5 for Palatin to carry out its obligations under the Research Collaboration, conduct any research or activity that is aimed at or has as its goal or intent discovering, identifying, Exploiting or otherwise commercialising Licensed Products for use in the Licensed Field or (b) grant any license or other rights to any Person, other than AstraZeneca and its Affiliates hereunder, to utilise any intellectual property Controlled by Palatin or its Affiliates for the purpose of discovering, identifying, Exploiting or otherwise commercialising Licensed Products for use in the Licensed Field.

The Parties acknowledge that all restrictions contained in this Section 3.7 are reasonable, valid and necessary for the adequate protection of the Licensed Product business and that AstraZeneca would not have entered in this Agreement without the protection afforded it by this Section 3.7.

Selection of Candidate Drug. For the avoidance of doubt, the Parties acknowledge and agree that AstraZeneca shall have the right in its sole discretion at any time during or after the Collaboration Term, irrespective of whether any compound has already been selected for further optimisation or as a CD and whether or not any such compound or CD has failed in research, clinical development or on the market, to select any Agreement Compound for optimisation or clinical development. AstraZeneca shall without delay notify the CMC of any such selections or, if such selections are made after the Collaboration Term, AstraZeneca shall similarly notify Palatin.

Reports

Research Collaboration Progress Reports. No later than *** prior to each quarterly meeting of the CMC, each Party shall provide the CMC with a detailed written progress report containing specifications and other information on all Collaboration Results generated and not previously reported to the CMC. The CMC may provide further instructions on the timing and content of these reports.

Copyrights. Copyrights to reports provided for hereunder are part of the Results. Neither Party shall, without the prior written approval of the other Party, attribute to the other Party any abstract or interpretation of any such report for sales or promotion purposes.

Development Project

Diligence Obligations.

AstraZeneca undertakes to use Commercially Reasonable Efforts at its own cost and expense to develop a Licensed Product and to conduct all development necessary to obtain Health Registration Approvals for a Licensed Product for use in humans in each country listed in the definition of the Major Markets and throughout the Territory.

AstraZeneca undertakes to use Commercially Reasonable Efforts to commercialise a Licensed Product for use in humans in each of the Major Markets and throughout the Territory; provided, however, that such obligations are expressly conditioned upon Palatin and its Affiliates performing their respective obligations hereunder, including the completion of the activities under the Research Collaboration and the information disclosure requirements pursuant to Section 3.4, and such obligations of AstraZeneca shall be delayed or suspended to the extent any such condition causes a delay; and provided further, for the avoidance of doubt, that AstraZeneca shall not be obligated to obtain Health Registration Approval for, or commercialise, more than one Licensed Product in any Major Market and throughout the Territory. In the event that AstraZeneca decides to discontinue the development or commercialisation of a Licensed Product in favour of another Licensed Product, its obligations under this Section 6.1.2. shall cease with respect to such initial Licensed Product in favour of such other Licensed Product. AstraZeneca shall perform its obligation under this Section 6.1.2 in good scientific manner and in compliance in all material respects with all Applicable Law.

Should the use by AstraZeneca of its Commercially Reasonable Efforts have as a consequence that AstraZeneca would be obligated to carry out some or all of the activities provided for in Section 6.1.1 or 6.1.2 in a country *** then AstraZeneca shall, notwithstanding what is stated in Sections 6.1.1 and 6.1.2 and following consultation with Palatin, be allowed to ***.

Upon satisfaction of its obligations under Sections 6.1.1 and 6.1.2, AstraZeneca shall be deemed to have satisfied all diligence obligations owed to Palatin hereunder, with respect to the Exploitation of the Agreement Compounds, Licensed Products or Collaboration Results, and shall have no other obligation, express or implied, to Exploit the Agreement Compounds, Licensed Products or Collaboration Results.

Breach of Diligence Obligations.

Notification and Meeting. If AstraZeneca is in material breach of its obligations under Section 6.1, then Palatin shall so notify AstraZeneca and the Parties shall meet within *** after such notice to discuss in good faith AstraZeneca’s development and commercialisation plans with respect to the Agreement Compound and Licensed Product.

Right of Termination. If, after such good faith discussions mentioned in Section 6.2.1, (a) AstraZeneca is in breach of its obligations under Section 6.1, and (b) AstraZeneca does not take reasonable steps designed to rectify such breach within *** of meeting with Palatin pursuant to Section 6.2.1 (or, if such failure cannot be rectified within such *** period, if AstraZeneca does not commence actions to rectify such breach within such period and thereafter diligently pursues such actions), Palatin may exercise its right of termination provided under Section 20.5.

Reporting. Following termination or expiration of the Research Collaboration AstraZeneca shall provide Palatin in reasonable connection with the meetings in the IF with a semi-annual report on the development of Licensed Products in the Territory (the “Development Report”) in order to keep Palatin informed of its progress. Such report shall cover, in relation to Agreement Compounds and Licensed Products, general information on AstraZeneca’s development activities in the previous ***, a summary of the activities planned in the next *** and a timetable of planned submissions for Health Registration Approvals. If and when a Health Registration Approval is obtained in any country of the Territory, AstraZeneca shall promptly inform Palatin thereof.

Ownership and Grant of Rights

Ownership of Collaboration Results and Development Results. AstraZeneca shall exclusively own all Collaboration Results and Development Results, for the avoidance of doubt including any Collaboration Compounds. Palatin shall promptly disclose to AstraZeneca in writing the development, making, conception or reduction to practice of any Collaboration Results and Development Results and shall, and does hereby, assign, and shall cause its Affiliates and its and their employees and agents, as applicable, to so assign, to AstraZeneca, without additional compensation, such right, title and interest in and to any such results. Assignment and transfer of all Collaboration Results and Development Results shall occur instantly and automatically upon the development, making, conception or reduction to practice of such results and technologies, as the case may be, and shall not require any further deeds or documents to be exchanged between the Parties.

AstraZeneca Improvements. AstraZeneca shall exclusively own all AstraZeneca Improvements and AstraZeneca Patents. Palatin shall promptly disclose to AstraZeneca in writing the development, making, conception or reduction to practice of any Results that constitute AstraZeneca Improvements, and shall, and does hereby, assign, and shall cause its Affiliates and its and their employees and agents, as applicable, to so assign, to AstraZeneca, without additional compensation, such right, title and interest in and to any such Results. Assignment and transfer of all such Results shall occur instantly and automatically upon the development, making, conception or reduction to practice of such Results, as the case may be, and shall not require any further deeds or documents to be exchanged between the Parties.

Ownership of Collaboration Patents.

For the avoidance of doubt, AstraZeneca shall exclusively own all Collaboration Patents, provided that, in the sole discretion of AstraZeneca title to any Collaboration Patents developed, made, conceived, reduced to practice or otherwise generated through work performed under the Research Collaboration or in connection with this Agreement by Palatin or by the Parties jointly may be partially or wholly in Palatin, in which event Palatin shall, and does hereby, grant to AstraZeneca a perpetual, exclusive (including with regard to Palatin and its Affiliates), right and license in the Territory, with the right to grant sublicenses, under Palatin’s right, title and interest in and to the Collaboration Patents and Collaboration Compounds and Improvements thereto. Palatin shall, and does hereby, assign, and shall cause its Affiliates and its and their employees and agents, as applicable, to so assign to AstraZeneca (or its designee), without additional compensation, such right, title and interest in and to any such Collaboration Patents.

***.

Improvements outside the Research Collaboration.

Palatin shall without delay disclose to AstraZeneca any Licensed Improvements Controlled by Palatin or its Affiliates during any period in which AstraZeneca owes royalties to Palatin pursuant to Section 11.1 and provide AstraZeneca with all relevant Information and materials with respect to such Licensed Improvements. AstraZeneca shall have the right, at any time, to reject any such Licensed Improvement on written notice to Palatin, in which event, this Agreement shall cease to apply to such Licensed Improvement.

All Licensed Improvements shall automatically be included within the scope of this Agreement, subject to AstraZeneca’s right to reject any such Licensed Improvement pursuant to Section 7.4.1. Any Information with respect to such Licensed Improvements that is not covered or claimed by a Patent and *** shall be considered Licensed Know-How. Any Patents to the extent covering Licensed Improvements shall be considered Licensed Patents.

License Grants by Palatin to AstraZeneca.

Palatin hereby grants to AstraZeneca a perpetual, exclusive (including with regard to Palatin and its Affiliates), subject to a retained right thereto for the sole purpose of Palatin carrying out its obligations under the Research Collaboration, right and license in the Territory, with the right to grant sublicenses, under Palatin’s right, title and interest in and to the Compounds, the Licensed Products, the Licensed Patents, the Licensed Know-How and the Licensed Improvements to use and otherwise Exploit the Compounds, the Licensed Products, the Licensed Patents, the Licensed Know-How and the Licensed Improvements for use within the Licensed Field (the “License”).

Prior to initiation of any research or development program outside the Licensed Field by Palatin ***, will be utilized, Palatin will ***.

Notwithstanding any other provision herein, Palatin may not, directly or through any Third Party, use or otherwise Exploit any Compound or Licensed Product used or useful in the Licensed Field, other than in carrying out its obligations under the Research Collaboration.

License Grants to Palatin. AstraZeneca hereby grants to Palatin a non-exclusive right and license, without the right to grant sublicenses, under AstraZeneca’s rights, titles, and interests in and to the AstraZeneca Background Technologies, the AstraZeneca Improvements, the AstraZeneca Patents, the Collaboration Patents and the Collaboration Results that are disclosed or otherwise provided by AstraZeneca to, or discovered by, Palatin during the Collaboration Term (a) for the purpose of Palatin performing the Research Collaboration during the Collaboration Term solely to the extent required for such purpose, and (b) to use and otherwise Exploit such AstraZeneca Background Technologies and AstraZeneca Improvements as necessary or useful to exercise Palatin’s rights under the grant under (a).

Sublicenses. AstraZeneca shall have the right to grant licenses or sublicenses, through multiple tiers of licensees, under the licenses granted, or under AstraZeneca’s rights pursuant to Section 7.3, to its Affiliates and to any other Persons in the Territory or in any country of the Territory. Where AstraZeneca grants such a license or sublicense to a Person other than to an Affiliate of AstraZeneca, and such Person is not a Distributor, such Person shall be a “Sublicensee” for purposes of this Agreement. AstraZeneca shall ensure that all Persons to which it grants licenses or sublicenses will comply with all terms and conditions of this Agreement and AstraZeneca shall remain liable for any breach of this Agreement by a Sublicensee. AstraZeneca shall provide notice of the granting of any license or sublicense hereunder promptly following the making of such grant. Such notice shall identify the Sublicensee, the territory of the license or sublicense and a copy of those provisions of the license or sublicense that relate to performance of this Agreement.

Distributorships. AstraZeneca shall have the right, in its sole discretion, to appoint its Affiliates, and AstraZeneca and its Affiliates shall have the right, in their sole discretion, to appoint any other Persons, in the Territory or in any country of the Territory, to distribute, market and sell the Licensed Products (with or without packaging rights), in circumstances where the Person purchases its requirements of Licensed Products from AstraZeneca or its Affiliates but does not otherwise make any royalty or other payment to AstraZeneca with respect to its IP Protection Rights. Where AstraZeneca or its Affiliates appoints such a Person that is not an Affiliate of AstraZeneca, that Person shall be a “Distributor” for purposes of this Agreement. The term “packaging rights” in this Section 7.8 shall mean the right for the Distributor to package Licensed Products supplied in unpackaged bulk form into individual ready-for-sale packs.

Co-Promotion Rights. For the avoidance of doubt, AstraZeneca and its Affiliates shall have the right, in their sole discretion, to co-promote the Licensed Products with any other Person, or to appoint one or more Third Parties to promote the Licensed Products without AstraZeneca carrying out any promotion in all or any part of the Territory.

Covenant Not to ▇▇▇. Neither Palatin nor any of its Affiliates shall ever, anywhere in the world, institute or prosecute (or in any way aid any Third Party in instituting or prosecuting), at law or in equity, any claim, demand, action or cause of action for damages, costs, expenses or compensation, or for an enjoinment, injunction, or any other equitable remedy, against AstraZeneca, its Affiliates, Sublicensees, suppliers, Distributors, vendors or customers alleging the infringement by AstraZeneca in its Exploitation of the Compounds, the Licensed Patents, the Licensed Know-How, the Licensed Improvements, the Collaboration Compounds, the Collaboration Patents or the Licensed Products or of any Patent that claims an invention that is based on, derived from or otherwise relates to the Results and is Controlled by Palatin or its Affiliates, so long as such Exploitation is in accordance with this Agreement. In Palatin’s or its Affiliates’ agreements with any licensees, assignees or transferees of such Patent, Palatin or its Affiliate, as applicable, shall ***. Palatin and its Affiliates will take all reasonable action (including signing required documents) and offer full cooperation to allow AstraZeneca to ***, to the extent permitted by Applicable Law.

No Conflicts. Within the scope of the Research Collaboration, and to the extent Applicable Law permits Palatin to conduct research and development activities with respect to Agreement Compounds or Licensed Products notwithstanding the exclusive license grants to AstraZeneca under Section 7.5, Palatin agrees that neither it nor its Affiliates will publish or present any material or file any Patent applications with respect to such activities without the consent of AstraZeneca.

Exclusivity Term. AstraZeneca’s exclusive position granted by Section 7.5 shall expire with respect to each separate Licensed Product, on a country-by-country basis, on the date when AstraZeneca’s obligation to pay royalties with respect to such Licensed Product pursuant to this Agreement expires. Upon expiration of the royalty term set forth in Section 11.7 with respect to a Licensed Product in a country, AstraZeneca’s license with respect to such Licensed Product in such country shall become non-exclusive, fully paid-up, perpetual and irrevocable and the Net Sales of such Licensed Product in such country shall be excluded from the royalty calculations in Section 11.1 (including the thresholds and ceilings) or 11.4, as applicable. AstraZeneca and its Affiliates and Sublicensees following such expiration shall be allowed to continue Exploiting such Licensed Product and using all Licensed Know How, Licensed Patents in the Licensed Field, Licensed Improvements and Collaboration Results in connection therewith on a non-exclusive basis in such country with no further consideration to Palatin.

Collaboration Materials. The Parties agree that: (a) all Collaboration Materials provided by one Party to the other (including compounds) shall be used by the receiving Party (i) solely for the activities under the Research Collaboration as provided in the Research Plan, or (ii) in the case of AstraZeneca as the receiving Party, in the Exploitation of the Agreement Compounds and Licensed Products, and (iii) in either case, in material compliance with all Applicable Law; (b) subject to what is stated in Article 18, all such Collaboration Materials shall be provided without any warranties, express or implied; (c) the Party providing such Collaboration Materials shall obtain (or cause its Third Party collaborators to obtain or certify that they have obtained) all appropriate and required consents from the source of such Collaboration Materials; (d) Collaboration Materials provided by one Party to the other Party shall not be made available by such other Party to any Third Party except as expressly provided in the Research Plan or as necessary or useful for the Exploitation of the Agreement Compounds or Licensed Products by AstraZeneca, unless the prior written consent of the Party providing such Collaboration Materials is first obtained; and (e) subject to the license grants and assignments in the other provisions of this Article 7 and other provisions in this Agreement, as between the Parties, all right, title and interest in and to the Collaboration Materials shall be, and remain, vested in the Party that provided such Collaboration Materials.

Regulatory Documentation. All INDs and regulatory filings shall be ***. Furthermore, in the event that in response to the submission of an IND, the Regulatory Authority poses questions to *** or otherwise requires additional data, *** shall cooperate to meet and confer as required to formulate an action plan in response to such request. *** may from time to time during the Term of this Agreement reasonably request *** to make, at ***, applications for an IND or other regulatory approvals whether in *** or in *** or any of its *** name and *** undertakes to comply with any such reasonable request. Without exception, *** will, as between *** and ***, be the owner of any Regulatory Documentation relating to any applications for an IND or regulatory approvals (including IND applications and approvals). *** shall upon the request by *** promptly transfer any IND and Regulatory Documentation to ***.

Confirmatory Patent Licenses

Research Funding

Funding. Each Party shall assume responsibility for *** for the Research Collaboration, except that AstraZeneca shall provide ***.

Invoices. Within *** after the end of each Calendar Quarter, Palatin shall invoice AstraZeneca for amounts due to Palatin from AstraZeneca pursuant to Section 9.1 based on the ***, approved by AstraZeneca, for the ensuing Calendar Quarter. Each invoice shall be sent to AstraZeneca AB, AstraZeneca R&D Mölndal, Finance / Accounting, ▇▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ with the attention of *** or such other individual that AstraZeneca may designate by providing Palatin written notice (provided, however, that the attention of *** or such other individual designated by AstraZeneca should not be included in the address section of the invoice) and shall be accompanied by a forecast *** to be provided by Palatin in the Research Collaboration during such ensuing Calendar Quarter and a report from *** costs spent in relation to the Research Collaboration during the immediately preceding Calendar Quarter, if any. No later than thirty (30) days after the end of each Collaboration Year Palatin shall send a report relating to the FTEs provided by Palatin and budgeted and approved Third Party costs paid by Palatin to the Research Collaboration during such Collaboration Year. Without prejudice to any other remedy available to AstraZeneca, any amount paid by AstraZeneca for which Palatin has not provided the corresponding number of FTEs or paid budgeted and approved Third Party Costs during such Collaboration Year may be deducted by AstraZeneca from subsequent payments to be made by AstraZeneca to Palatin for FTE funding hereunder and, if necessary to recover the amount, from milestone payments and royalty payments.

Records Retention; Audit.

Palatin shall keep or cause to be kept accurate records or books of account in accordance with applicable generally accepted accounting principles that, in reasonable detail, fairly reflect the reimbursable FTEs. Such books and records shall include attendance records (specifically including name and hours for each attendee), records of the allocation of FTEs to the Research Collaboration, and the accomplishment of activities measured against the Research Plan, and shall be maintained by Palatin for *** following the end of the Calendar Year to which they pertain or such longer period of time required by Applicable Law.

Upon the written request *** shall permit a certified public accountant or a person possessing similar professional status and associated with an independent accounting firm reasonably acceptable to the Parties to inspect during regular business hours and no more than once a year and going back *** after receipt of the respective invoice and report pursuant to Section 9.2, all or any part of *** necessary to verify such invoices and reports. The accounting firm shall enter into appropriate obligations with *** to treat all information it receives during its inspection in confidence. The accounting firm shall disclose to *** only whether such invoices and reports are correct and details concerning any discrepancies, but no other information shall be disclosed to ***. The charges of the accounting firm shall be paid by ***, except that if the FTEs allocated were less than *** of what was required from Palatin during the period under review or if otherwise the reimbursable Research Collaboration expenses have been overstated by more than ***, the charges shall be ***. Any failure by AstraZeneca to exercise its right under this Section 9.3.2 *** shall constitute a waiver by AstraZeneca of its right to later object to any invoice submitted by Palatin under this Agreement during such Calendar Year.

Consideration

Total Obligation. The milestone payments and royalty payments payable by AstraZeneca to Palatin pursuant to this Article 10 and Article 11, together with the funding to be provided by AstraZeneca to Palatin pursuant to Article 9, represent all of AstraZeneca’s financial obligations to Palatin hereunder and Palatin shall not be entitled to any additional compensation or remuneration from AstraZeneca under this Agreement. In consideration of the licenses and other rights granted by Palatin to AstraZeneca herein and subject to the terms and conditions of this Agreement, AstraZeneca shall make the following payments to Palatin:

Initial Investment Fee. AstraZeneca shall pay to Palatin ten million U.S. Dollars ($10,000,000) within *** of the Effective Date.

Development Milestones. Within *** days of achievement of each respective milestone as described in this Section 10.1.2 for the first Agreement Compound or Licensed Product, whichever is applicable, to meet such milestone, AstraZeneca shall, after receipt of an invoice, in each case, make the corresponding payment to Palatin.

Commercial Milestones on Aggregate Net Sales. At the end of the Calendar Quarter in which the cumulative Net Sales of a Licensed Product under a Health Registration Approval exceeds for the first time each respective milestone set forth below, AstraZeneca shall make the corresponding payment to Palatin, as follows.

Milestone Payments.

If a milestone payment set forth under Section 10.1.2.1 (A) or (B), i.e. for *** Agreement Compounds or Licensed Products, has been made or is due by AstraZeneca, the corresponding milestone payment set forth under Section 10.1.2.2, i.e. for *** Agreement Compounds or Licensed Products, shall be reduced with the sum already paid or due to be paid for such *** Agreement Compound or Licensed Product, whichever is applicable. For example and the sake of clarity, if AstraZeneca has paid *** as a development milestone for *** Agreement Compounds regarding *** shall be deducted from the development milestone regarding the *** Agreement Compound and AstraZeneca shall pay *** under Section 10.1.2.2 A) ii). Further, if a milestone payment set forth under ***, has been made or is due by AstraZeneca, the milestone payments set forth under Section 10.1.2.2, i.e. for *** Agreement Compounds or Licensed Products, shall be reduced with the sum already paid or due to be paid for such *** Agreement Compound or Licensed Product.

Each of the payments set forth in Sections 10.1.2 and 10.1.3 shall be made by AstraZeneca no more than once under this Agreement, collectively amounting to an aggregate maximum amount of U.S. $300,000,000 for an *** Agreement Compound or Licensed Product, or, in case the payment under Section 10.1.2.1(A)(ii) becomes payable, *** less, or U.S.$ 300,000,000 for an *** Agreement Compound or Licensed Product, irrespective of the number of CDs, Agreement Compounds and Licensed Compounds that have achieved the milestone events set forth in Section 10.1, or the number of countries or Major Markets in which such milestone events have been achieved.

Diagnostic or Veterinary Products. AstraZeneca shall not be required to make milestone payments in respect of products that have applications only as diagnostic tools (with no associated medical therapy or prophylaxis use) or for veterinary or agricultural use, other than as provided in Section 11.2.

Royalty Payments and Other Payment-Related Provisions

Royalties. AstraZeneca shall pay Palatin, with respect to each Licensed Product, the following running royalties on the Annual Net Sales of Licensed Products (provided that calculations for the Combination Products are to be made in accordance with the formula set out in Section 11.3 and provided further that calculations for Sublicensee income are to be made in accordance with Section 11.4):

Diagnostic or Veterinary Products. The royalties in Section 11.1 shall not apply to Net Sales for diagnostic, veterinary or agricultural use. Further, Net Sales shall not include Licensed Products that are used (a) in animals or (b) solely for screening patients who have been diagnosed with a disease, state or condition for eligibility to be treated for such disease, state or condition with a Licensed Product or for monitoring patients who are or have been treated with a Licensed Product. In the event that AstraZeneca develops a Licensed Product for commercial diagnostic or veterinary or agricultural purposes, the Parties shall negotiate *** adjustment to such milestones and royalties for the sale of such Licensed Product that reflects the commercial potential of such Licensed Product and standard commercial terms in the industry for diagnostic, veterinary or agricultural products, as applicable.

Combination Products. With respect to Combination Products, the Net Sales used for the calculation of the milestones under Sections 10.1.2.1 C) and 10.1.3, and the royalties under this Section 11.1 shall be determined as follows:

Sublicensees. In the event that AstraZeneca receives royalties from Sublicensees with respect to sales of Licensed Product by Sublicensees to Third Parties for ***, AstraZeneca shall nonetheless pay royalties to Palatin based on the Net Sales of each such Sublicensee as if such Net Sales were made by AstraZeneca. For all other countries, such royalty income of AstraZeneca shall be *** of any upfront payment, license fees or milestone payments or other similar revenue or payments made to AstraZeneca or its Affiliates in connection with each sublicense with respect to the Licensed Product for ***, shall be included in the Net Sales and royalties shall be paid thereon, without regard to whether any First Commercial Sale of a Licensed Product has yet occurred, and without triggering the royalty term set forth in Section 11.7, unless, for the avoidance of doubt, such royalty term would have become triggered anyway pursuant to the terms of this Agreement.

Reduction of Royalty.

Royalty Stacking.

Royalty Term. AstraZeneca’s obligation to pay royalties on each Licensed Product shall commence, on a country-by-country basis, with respect to each separate Licensed Product, on the date of First Commercial Sale of such Licensed Product in such country. The obligation shall expire, on a country-by-country basis, with respect to each separate Licensed Product:

Sales Subject to Royalties. Sales between AstraZeneca, its Affiliates and Sublicensees shall not be subject to royalties hereunder. Royalties shall be calculated on AstraZeneca’s, its Affiliates’ and Sublicensees’ sale of the Licensed Products to a Third Party (including Distributors). Royalty shall be payable only once for a given Licensed Product. For purposes of determining Net Sales, the Licensed Product shall be deemed to be sold when *** and a “sale” shall not include, and no royalties shall be payable on, transfers by AstraZeneca, its Affiliates or Sublicensees of free samples of Licensed Products or *** containing Agreement Compounds or other transfers or dispositions for *** where AstraZeneca receives no compensation or identifiable benefit therefrom.

Royalty Payments. The royalties shall be calculated quarterly as of the last day of March, June, September and December respectively, for the Calendar Quarter ending on that date. AstraZeneca shall pay the royalties in conjunction with the delivery of a written report to Palatin within *** days after the end of each Calendar Quarter that shows, with respect to each country and each Product, the sales volume and Net Sales during such Calendar Quarter. Preliminary reports of Net Sales for each calendar month shall be forwarded to Palatin within *** days of the end of each calendar month.

Currency. All payments required under this Agreement shall be made in U.S. Dollars. For the purpose of computing the Net Sales of Products sold in a currency other than U.S. Dollars, such currency shall be converted from local currency to U.S. Dollars by AstraZeneca in accordance with the rates of exchange for the relevant month for converting such other currency into U.S. Dollars used by AstraZeneca’s internal accounting systems, which are independently audited on an annual basis.

Records Retention; Audit.

Mode of Payment. All payments set forth in Articles 10 and 11 shall be remitted by wire transfer to the following bank account of Palatin or such other account as Palatin may designate in writing, pursuant to Article 26, to AstraZeneca:

Palatin Technologies Inc.

***

General. The royalties, milestones and other amounts payable by AstraZeneca to Palatin pursuant to this Agreement (“Payments”) shall not be reduced on account of any taxes unless required by Applicable Law. Palatin, when receiving such Payments, shall pay any and all taxes required by Applicable Law that are levied on account of such Payments. If Applicable Laws require that taxes be withheld, AstraZeneca will (a) deduct those taxes from the remittable Payment, (b) pay the taxes to the proper taxing authority, and (c) send evidence of the obligation together with proof of payment to Palatin within sixty (60) days following that payment.

Indirect Taxes. Notwithstanding anything contained in Section 12.1, this Section 12.2 shall apply with respect to Indirect Taxes. Each of the Parties shall be responsible for the payment of Indirect Taxes assessed against it by law.

Imports. For the avoidance of doubt, the Parties acknowledge and agree that none of the milestones or royalties payable under this Agreement are related to the license (or right) to import or any import of Licensed Products. The receiving Party shall be responsible for any import clearance, including payment of any import duties and similar charges, in connection with any Licensed Products transferred to such Party under this Agreement. The Parties shall co-operate in accordance with Applicable Law to ensure where permissible no duties are paid on imported clinical products. Where duties are payable, the Parties shall co-operate to ensure that the Party responsible for shipping values the clinical product in accordance with Applicable Laws and minimises where permissible any such duties and related import taxes that are not reclaimable from the relevant authorities.

General Obligations.

Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is:

Exclusions. Notwithstanding the foregoing, Confidential Information shall not include any information that:

Publications and Presentations. The Parties acknowledge that scientific publications must be strictly monitored to prevent any adverse effect from premature publication of Results. Accordingly, Palatin shall not publish, present or otherwise disclose any material related to the Research Collaboration or the Results or the Exploitation of the Agreement Compounds or the Licensed Products or Improvements without the prior written consent of AstraZeneca.

Use of Name/Publicity

Press Release. The Parties have agreed upon the content of a press release which shall be issued substantially in the form attached hereto as Schedule 13.6, the release of which the Parties will coordinate in order to accomplish the same promptly upon execution and delivery of this Agreement. Except to the extent already disclosed in a press release or other public communication, no public announcement concerning this Agreement, its subject matter or the transactions described herein shall be made, either directly or indirectly, by Palatin or AstraZeneca or their respective Affiliates, except as may be legally required by applicable laws, regulations, judicial order, or required by stock exchange or quotation system rule without first obtaining the approval of the other Party and agreement upon the nature, text and timing of such announcement, which approval and agreement shall not be unreasonably withheld or delayed. The Party desiring to make any such voluntary public announcement shall provide the other Party with a written copy of the proposed announcement in reasonably sufficient time prior to public release to allow such other Party to comment upon such announcement, prior to public release. In the case of press releases or other public communications legally required, or required by stock exchange or quotation system rule, to be made, the Party making such press release or public announcement shall provide to the other Party a copy of the proposed press release or public announcement in written or electronic form upon such advance notice as is practicable under the circumstances for the purpose of allowing the notified Party to review and comment upon such press release or public announcement. Under such circumstances, the releasing Party shall not be obligated to delay making any such press release or public communication beyond the time when the same is required to be made in order to facilitate review and comment by the receiving Party.

AstraZeneca shall have the sole right to select Trademarks for the marketing and sale of the Licensed Products in the Territory. AstraZeneca shall own such Trademarks and all rights and goodwill with respect thereto. Palatin shall not, and shall cause its Affiliates not to use any trademark that is the same as or confusingly similar to, misleading or deceptive with respect to or that dilutes the Trademarks.

Prosecution of the Licensed Patents. Subject to Section 15.2, ***, using legal counsel at its sole discretion, diligently file, prosecute (including any interferences, reissue proceedings and re-examinations) and maintain the Licensed Patents in the Territory, all such filing, prosecution and maintaining within *** reasonable discretion, and *** shall bear all costs and expenses of such activities, including fees and expenses paid to outside legal counsel and experts, direct costs of in-house counsel and filing, prosecution and maintenance expenses associated therewith. Without prejudice to the foregoing, *** shall (a) file and prosecute Patent applications to secure Patent rights for the Licensed Patents and such other patentable Licensed Know-How as *** may from time to time reasonably designate in writing, in each case in the United States and all other PCT member countries and in such non-PCT member countries as *** may from time to time reasonably designate in writing; provided, however that, in each such case, such *** reasonable designation shall not be decisive, and *** shall not have the obligation to file or prosecute such *** designated Patent application, if *** has a reasonable belief that the filing or prosecution of such Patent application mentioned in this sub-clause (a) might adversely impact on *** patent strategies regarding the Agreement Compounds or the Licensed Products or on the utilisation of the Agreement Compounds, the Licensed Products or the Licensed Patents hereunder, including the filing or prosecution of a claim which conflicts with or would otherwise undermine or erode a claim under the Licensed Patents in the Licensed Field, or would otherwise in *** reasonable judgement have a negative commercial impact on the Licensed Patents in the Licensed Field; and (b) upon issuance, maintain such Patents described under (a) in full force in such countries.

Election not to Prosecute the Licensed Patents. If *** elects not (a) to pursue or continue the filing, prosecution (including any interferences, reissue proceedings and re-examinations) or maintenance of a Licensed Patent in a particular country, or (b) to take any other action with respect to a Licensed Patent in a particular country that is necessary or useful to establish, preserve or extend rights thereto, including by seeking any Patent term extension, restoration or the like that may be available now or in the future, then in each such case *** shall so notify *** in writing not less than two (2) months before any deadlines by which an action must be taken to establish or preserve any such rights in such Licensed Patent in such country. Upon receipt of each such notice by *** or if, at any time, *** fails to initiate any such action within *** days after a request by *** that it do so (or, if after initiating any requested action, *** at any time thereafter fails to diligently pursue such action), *** shall have the right, but not the obligation, through counsel of its choosing, to pursue the filing or registration, or support the continued prosecution (including any interferences, reissue proceedings and re-examinations) or maintenance, of such Licensed Patent at its expense in such country. If *** elects to pursue such filing or registration, as the case may be, or continue such support, then *** shall notify *** of such election.

Prosecution of the Collaboration Patents. *** shall have the sole right, but not the obligation, at its sole cost and expense, through counsel of its choosing, to prepare, file, obtain, prosecute (including any interferences, reissue proceedings and re-examinations) and maintain all Collaboration Patents in the Territory. *** shall have the sole right to determine in which countries to file, obtain, prosecute and maintain the Collaboration Patents. To the extent that *** is filing, obtaining, prosecuting or maintaining a Collaboration Patent or otherwise exercising its rights under this Article 15, neither *** nor any of its employees, agents or representatives shall be liable to *** in respect of any act, omission, default or neglect on the part of any such employee, agent or representative in connection with such activities. *** shall regularly confer with *** regarding strategies and tactics for the conduct of the foregoing activities. *** shall give due regard to *** views in the conduct of the foregoing activities; and in particular to material suggestions, which may be reasonably implemented provided that such suggestions are consistent with *** direction and strategy in filing, prosecuting or maintaining the Collaboration Patents or the Licensed Patents.

Cooperation regarding the Collaboration Patents. *** shall keep *** advised as to material developments with respect to Collaboration Patents. *** shall, and shall cause its Affiliates to, assist and cooperate with *** in filing, obtaining, prosecuting and maintaining Collaboration Patents.

Additional Patent Protection. At *** request and at its cost and expense, *** shall seek additional Patent protection for the Compounds in any part of the Territory, for example, by way of Patent registration, Patent of importation or revalidation or the like. Any Patents granted pursuant to this Section 15.6 shall be deemed to be Licensed Patents for the purposes of this Agreement.

AstraZeneca Background Technologies and AstraZeneca Patents. For the avoidance of doubt, AstraZeneca shall have the exclusive worldwide right, at its own expense and sole discretion, to prepare, file, and prosecute in its own name any Patents or other IP Protection Rights in relation to AstraZeneca Background Technologies and AstraZeneca Patents.

Rights and Procedures. In the event that either Party supposes that a Third Party or Sublicensee may be infringing any of the Collaboration Patents, Licensed Patents or AstraZeneca Patents, such Party shall promptly notify the other Party in writing, identifying the alleged infringer and the alleged infringement complained of and furnishing the information upon which such determination is based.

Infringement of the Licensed Patents.

Infringement of the Collaboration Patents. *** shall have the sole right, but after notifying *** (if time permits), through counsel of its choosing and at its sole cost and expense, to take any measures it deems appropriate to stop infringement of the Collaboration Patents by Third Party or Sublicensee in the Territory or to grant to the infringing Third Party or Sublicensee adequate rights and licenses necessary for continuing such activities. Upon reasonable request by *** shall give *** all reasonable information and assistance, including allowing *** access to *** files and documents and to *** personnel, including the inventors, who may have possession of relevant information and, if necessary for *** to prosecute any legal action, joining in the legal action as a party at its own cost and expense. In the event *** fails within *** following notice of an infringement of the Collaboration Patents to take, or earlier notifies *** in writing of its intent not to take, commercially appropriate steps to remove any infringement of any of the Collaboration Patents that is likely to have a material adverse effect on the sale of the Licensed Products, and *** has not granted the infringing Third Party or Sublicensee rights and licenses to continue its otherwise infringing activities, *** shall have the right to do so at *** cost and expense; provided, however, that if *** has commenced negotiations with an alleged infringer for discontinuance of such infringement within such ***, *** to conclude its negotiations before *** may bring suit for such infringement. Upon reasonable request by *** and at *** cost and expense, *** shall give *** all reasonable information and assistance in connection with such suit for infringement.

Recovery. Any amounts recovered by either Party pursuant to Section 16.2 and 16.3, whether by settlement or judgment, shall be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses), with any remainder being retained by or paid to *** unless and to the extent ***, in which event any remainder shall be retained by or paid to ***, and shall be deemed “Net Sales” for which *** shall pay *** any royalties that may be owed with respect to such Net Sales under Sections 11.1 and 11.2, without regard to whether any First Commercial Sale of a Licensed Product has yet occurred, and without triggering the royalty term set forth in Section 11.7. The Party pursuing any action under Section 16.2 and 16.3 will bear all payments awarded against or agreed to be paid by such Party pursuant to such action, including any costs or expenses incurred that exceed the amounts recovered by such Party.

Potential Third Party Rights

Third Party Licenses. If, in the opinion of ***, the Exploitation of the Agreement Compounds or Licensed Products *** infringes or misappropriates any Patent or any Intellectual Property Right of a Third Party in any country, such that *** cannot Exploit the Agreement Compounds or the Licensed Products in such country without infringing the Patent or Intellectual Property Right of such Third Party (a “Triggering Event”), then, *** shall have the first right, but not the obligation, through counsel of its choosing and at its sole cost and expense, to negotiate and obtain a license from such Third Party as necessary for *** to Exploit the Agreement Compounds and Licensed Products in such country. Nothing contained in this Section 17.1 shall be construed to limit *** right to terminate this Agreement pursuant to Section 20.4.

Invalidity or Unenforceability Defences or Actions.

Notwithstanding what is stated in Section 17.2, *** shall not have the right to, and shall not ***, enter into any settlement or consent to any claim to the effect that any claim under, or the patent protection otherwise offered under, any part of the Licensed Patents ***, without the prior written consent of ***, such consent not to be unreasonably withheld.

Third Party Litigation. In the event of any actual or threatened suit against ***, AstraZeneca or its Affiliates, Sublicensees, Distributors or customers alleging that the Exploitation of Agreement Compounds or Licensed Products, or that the Exploitation of the Licensed Patents or the Collaboration Patents, AstraZeneca Patent or AstraZeneca Background Technologies by or on behalf of AstraZeneca under this Agreement, infringes the Patent or other intellectual property rights of any Person (an “Infringement Suit”), the Party first becoming aware of such Infringement Suit shall promptly give written notice to the other Party. *** shall have the first right, but not the obligation, through counsel of its choosing and at its cost and expense subject to the credit provisions of Section 17.5, to assume direction and control of the defence of claims arising therefrom (including, subject to what is stated below in this Section 17.4, the right to settle such claims at its sole discretion). *** shall, if reasonably requested by ***, allow *** to join in such legal action as a party at its own expense. *** shall remain in full control handling such legal action. Notwithstanding the foregoing, *** shall not have the right to, and shall ***, enter into any settlement or consent to any claim to the effect that any claim under, or the patent protection otherwise offered under, ***, without the prior written consent of ***, such consent not to be unreasonably withheld. If *** notifies *** in writing that it does not wish to assume such direction and control, ***, shall have the right, but not the obligation to, at its sole cost and expense, defend against such claims; provided, however, that *** may contribute to or join such legal action voluntarily, at its own cost and expense, and shall have the right to be heard and *** shall, and shall procure *** to, give due regard to ***, (i) shall not have the right to, and shall not permit any of its other licensees and shall procure such licensees not to, enter into any settlement or consent to any claim to the effect that any claim under, or the patent protection otherwise offered under, any part of the Licensed Patents within the Licensed Field would be materially negatively affected, without the prior written consent of ***, such consent not to be unreasonably withheld; and (ii) shall obtain the written consent of *** prior to ceasing to defend, settling or otherwise.

Cooperation. The Party other than the Party defending an action or claim pursuant to Section 17.2 or 17.4 (the “Non-Defending Party”) will provide to the other Party (the “Defending Party”) all reasonable assistance requested by the Defending Party in connection with any action, claim or suit under Section 17.2 or 17.4, including allowing the Defending Party access to the Non-Defending Party’s files and documents and to the Non-Defending Party’s personnel, including the inventors, who may have possession of relevant information. In particular the Non-Defending Party will promptly make available to the Defending Party, free of charge, all information in its possession or control that it is aware will assist the Defending Party in responding to any such action, claim or suit under Section 17.2 or 17.4.

Costs and Expenses. *** shall have the right to credit all (a) ***; (b) ***; and (c) ***; in each instance in order to secure the right to continue the Exploitation of the Licensed Patents and the Collaboration Patents (which royalties shall be subject to Section 11.6), against the *** to be paid by *** to *** with respect to the sale of the Licensed Product under Articles 10 and 11. Credits not exhausted in any Calendar Quarter may *** Calendar Quarters. Any amounts recovered by *** in connection with any action, claim or suit under Section 17.2 or 17.4 shall be allocated between the Parties as provided in Section 16.4.

Representations and Warranties

Palatin represents, warrants and covenants to AstraZeneca as of the Effective Date that:

AstraZeneca represents, warrants and covenants to Palatin as of the Effective Date that:

Each Party shall comply with all laws, rules and regulations that govern the Party’s performance under this Agreement, including all United States and multilateral export laws and regulations.

Nothing in this Agreement shall be construed as a warranty or representation by either Party of the success of the Research Plan.

DISCLAIMER. OTHER THAN AS PROVIDED IN SECTION 7.13 AND THIS ARTICLE 18, THE PARTIES DISCLAIM ANY AND ALL WARRANTIES OF ANY KIND WITH REGARD TO THE LICENSED KNOW-HOW, LICENSED PATENTS, COMPOUNDS, COLLABORATION MATERIALS, THE ASTRAZENECA BACKGROUND TECHNOLOGIES AND THE RESULTS, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.

Indemnification and Insurance

Indemnification of Palatin. In addition to any other remedy available to Palatin, AstraZeneca shall indemnify, defend and hold harmless Palatin, its Affiliates and its and their respective directors, officers and employees in full and on demand, from and against any and all Losses incurred by them to the extent resulting from or arising out or in connection with any claims made or suits brought by a Third Party (collectively, “Third Party Claims”) against Palatin, its Affiliates or their respective directors, officers or employees (a) that arise or result from any intentional misconduct or negligence on the part of AstraZeneca or its Affiliates or Sublicensees in performing any activity contemplated by this Agreement, including any Third Party Claim resulting from or arising out of or in connection with AstraZeneca’s or its Affiliates’ or Sublicensees’ development, manufacture, use, sale, storage or handling of an Agreement Compound or Licensed Product or the breach of any material provision of this Agreement by AstraZeneca or (b) that allege that the concerned Third Party has suffered personal injury or death as a result of a Product; provided that the foregoing indemnification shall not apply to any Loss to the extent such Loss is caused by the breach of this Agreement by Palatin or the negligence or wilful misconduct of Palatin or its Affiliates and their current or former employees, officers and directors.

Indemnification of AstraZeneca. In addition to any other remedy available to AstraZeneca, Palatin shall indemnify, defend and hold harmless AstraZeneca, its Affiliates, Distributors, Sublicensees and its and their respective directors, officers and employees in full and on demand, from and against any and all Losses incurred by them to the extent resulting from or arising out of or in connection with any Third Party Claims against AstraZeneca, its Affiliates or their respective directors, officers or employees that arise or result from any intentional misconduct or negligence on the part of Palatin or its Affiliates in performing any activity contemplated by this Agreement, or the breach of any material provision of this Agreement by Palatin; provided that the foregoing indemnification shall not apply to any Loss to the extent such Loss is caused by the breach of this Agreement by AstraZeneca or the negligence or wilful misconduct of AstraZeneca or its Affiliates and their current or former employees, officers and directors.

Notice of Claim. An Indemnified Party shall give the Indemnifying Party prompt written notice of any Loss or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under Section 19.1 or 19.2 (an “Indemnification Claim Notice”). In no event shall the Indemnifying Party be liable for any Loss that results from any delay in providing the Indemnification Claim Notice. Each Indemnification Claim Notice shall contain a description of the claim and the nature and amount of the Loss claimed (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the Indemnifying Party copies of all papers and official documents received in respect of any such Loss. For the avoidance of doubt, all indemnification claims in respect of a Party, its Affiliates or their respective directors, officers, employees and agents (each, an “Indemnitee”) shall be made solely by such Party to this Agreement.

Indemnification Procedures. The obligations of an Indemnifying Party under this Article 19 shall be governed by and contingent upon the following:

Insurance. Each Party shall have and maintain such type and amounts of liability insurance as is normal and customary in the pharmaceutical industry generally for Persons similarly situated, and shall upon request provide the other Party with a copy of its policies of insurance in that regard, along with any amendments and revisions thereto.

Term and Termination

Term. This Agreement shall become effective on the Effective Date and shall continue in full force and effect, unless earlier terminated in accordance with this Article 20 or Section 21.4, during the Collaboration Term and thereafter for as long as AstraZeneca is pursuing pre-clinical research or other activities or clinical development of one or more Collaboration Compounds or commercialising Products for which royalties are owed to Palatin pursuant to Article 11.

Collaboration Term. The Collaboration Term shall commence on the Effective Date and, unless the Agreement is terminated pursuant to Sections 20.3, 20.4, 20.5, 20.6 or 20.9 or the Research Collaboration is terminated by AstraZeneca pursuant to this Section 20.2, continue until expiration of *** Collaboration Year.

Termination by AstraZeneca. AstraZeneca shall have the right, in its sole discretion to terminate this Agreement in its entirety or with respect to one or more countries in the Territory upon *** prior written notice; provided, however, that during the Collaboration Term such termination shall not take effect until *** of the date of such notice or upon the date when the Collaboration Term expires (provided always that such termination does never take effect prior to the expiration of the thirty days notice period), whichever is the earlier.

Termination for Infringement of Third Party Rights.

Termination by Either Party. In addition to any other provision of this Agreement expressly providing for termination of this Agreement, this Agreement may be terminated immediately by either Party upon notice to the other Party in the event of a material breach of this Agreement, and such termination may relate to this Agreement in its entirety, if the breach is material to the Agreement as a whole, or to the country or countries to which such material default applies, by such other Party where such breach is capable of cure and such breach remains uncured for *** after notice of such breach (provided that if such breach is capable of cure but cannot be cured within such *** period, and the breaching Party commences actions to cure such breach within such period and thereafter diligently continues such actions, the breaching Party shall have an additional *** to cure such breach (though this additional cure period shall not apply to nonpayment)); provided, however, that in the event that AstraZeneca is the Party in material default and the default is with respect to AstraZeneca’s failure to comply with its obligation to use Commercially Reasonable Efforts as required under Section 6.1 with respect to the Licensed Products in a particular Major Market, Palatin shall have the right to terminate this Agreement only after it complies with Section 6.2 and only with respect to such Major Market and not in its entirety; provided, however, further, that if AstraZeneca fails to comply with its obligations under Section 6.1 with respect to the Licensed Product in all Major Markets, Palatin shall have the right to terminate this Agreement in its entirety for the material breach of AstraZeneca.

Change of Corporate Control. Upon a Change of Corporate Control of Palatin at any time during the Research Collaboration, AstraZeneca shall have the right to (a) terminate this Agreement in its entirety by delivering written notice of termination to Palatin *** after the date of such Change of Corporate Control; or (b) terminate only the Parties’ collaboration under the Research Collaboration with immediate effect thereby ending the Collaboration Term; or (c) terminate Sections 4.3.2 and 6.3 and have the IF, if established, dissolved. In the event AstraZeneca exercises the option under (b), AstraZeneca shall be under no obligation to provide Palatin with any further compensation pursuant to Article 9.

Accrued Rights and Surviving Obligations. The termination of this Agreement shall not relieve the Parties from performing any obligations accrued prior to the date this Agreement terminates. Each Party’s obligations under Sections 3.6, 3.7.1 (to the extent that AstraZeneca terminates the Agreement during the Collaboration Term and provided that such provision shall survive for a period of one (1) year after such termination), 6.3, 7.1, 7.2, 7.3, 12.1, 12.2, 20.7, 20.10 and this Section 20.8 and Articles 1, 13, 19, 24, 25, 26, 29, 31, 32, 33 and 35 and Articles 10 and 11 (but only to the extent set forth in Section 20.7) shall survive the termination or expiration of this Agreement.

Termination Upon Insolvency. Either Party may terminate this Agreement and AstraZeneca may, at its option, terminate only the Research Collaboration, thereby ending the Collaboration Term, if, at any time, the other Party (i) shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of that Party or of its assets, or (ii) proposes a written agreement of composition or extension of its debts, or (iii) shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, or (iv) shall propose or be a party to any dissolution or liquidation, or (v) shall make an assignment for the benefit of its creditors. In case AstraZeneca elects to terminate the Research Collaboration only AstraZeneca shall be under no obligation to provide Palatin with any further compensation pursuant to Article 9 and what is stated in Section 20.6, second paragraph, shall apply.

Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by Palatin are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or analogous provisions of Applicable Law outside the United States, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code or analogous provisions of Applicable Law outside the United States (hereinafter “IP”). The Parties agree that AstraZeneca, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code or any other provisions of Applicable Law outside the United States that provide similar protection for IP. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Palatin under the U.S. Bankruptcy Code or analogous provisions of Applicable Law outside the United States, AstraZeneca shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such IP and all embodiments of such IP, which, if not already in AstraZeneca’s possession, shall be promptly delivered to it upon AstraZeneca’s written request therefore.

Force Majeure

In this Agreement, “Force Majeure” means an event which is beyond a non-performing Party’s reasonable control, including an act of God, act of the other Party, strike, lock-out or other industrial/labour dispute (whether involving the workforce of the Party so prevented or of any other Person), war, riot, civil commotion, terrorist act, malicious damage, epidemic, quarantine, fire, flood, storm, natural disaster or compliance with any law or governmental order, rule, regulation or direction (including changes in the requirements of the Health Authorities), whether or not it is later held to be invalid.

The Force Majeure Party shall, within *** of the occurrence of a Force Majeure event, give notice in writing to the other Party specifying the nature and extent of the event of Force Majeure, its anticipated duration and any action being taken to avoid or minimize its effect. Subject to providing such notice and to Section 21.1, the Force Majeure Party shall not be liable for delay in performance or for non-performance of its obligations under this Agreement, in whole or in part, nor shall the other Party have the right to terminate this Agreement, except as otherwise provided in this Agreement, where non-performance or delay in performance has resulted from an event of Force Majeure. The suspension of performance allowed hereunder shall be of no greater scope and no longer duration than is reasonably required.

The Force Majeure Party shall use reasonable endeavours, without being obligated to incur any expenditure or cost, to bring the Force Majeure event to a close or to find a solution by which this Agreement may be performed despite the continuation of the event of Force Majeure.

If the Force Majeure Party is prevented from performing its obligations due to a Force Majeure event for a continuous period in excess of **** after the date of the occurrence of the Force Majeure event, and such failure to perform would constitute a material breach of this Agreement in the absence of such Force Majeure event, the Parties shall meet and discuss in good faith any amendments to this Agreement to permit the other Party to exercise its rights under this Agreement. If the Parties are not able to agree on such amendments within *** and if the suspension of performance continues, final resolution shall be determined by binding arbitration pursuant to Section 24.2.

Assignment

Severability

Governing Law and Dispute Resolution

Governing Law. The interpretation and construction of this Agreement shall be governed by the laws of the State of New York, U.S., excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

Arbitration. In the event of any controversy or claim arising out of or relating to any provision of this Agreement, the Parties shall try to settle their differences amicably between themselves. Any unresolved disputes arising between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either Party of its obligations hereunder, whether during the term or after termination of this Agreement, shall be resolved by final and binding arbitration. Whenever a Party shall decide to institute arbitration proceedings, it shall give written notice to that effect to the other Party. Arbitration shall be held in New York, New York, U.S., according to the rules of the International Chamber of Commerce (the “ICC”). The arbitration will be conducted by a panel of three (3) arbitrators appointed in accordance with ICC rules; provided that each Party shall within thirty (30) calendar days after the institution of the arbitration proceedings appoint one arbitrator each, and such arbitrators shall select, if they shall agree, a third arbitrator within thirty (30) calendar days thereafter. If the two first arbitrators are unable to select a third arbitrator within such period, the third arbitrator shall be appointed in accordance with ICC rules. All arbitrators eligible to conduct the arbitration must agree to render their opinion(s) within thirty (30) calendar days of the final arbitration hearing. No arbitrator (nor the panel of arbitrators) shall have the power to award punitive damages under this Agreement and such award is expressly prohibited. Decisions of the arbitrators shall be confidential, final and binding on all of the Parties. Judgment on the award so rendered may be entered in a court having jurisdiction thereof. The losing Party to the arbitration (if any) as determined by the arbitrators shall pay the costs of arbitration. The proceedings, including any outcome, shall be confidential. Nothing in this Section 24.2 will preclude either Party from seeking equitable relief in accordance with Article 33 or interim or provisional relief from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a dispute either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding.

Interpretation of Certain Evidence

Notices

Notice Requirements. Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally-recognised overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 26.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Article 26. Such notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally-recognised overnight delivery service. Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Article 26 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

Address for Notice

In pursuance of the Main Agreement and for the consideration referred to in the Main Agreement the Licensor hereby confirms the grant to the Licensee of the exclusive licence from the Effective Date for the term specified in the Main Agreement to manufacture, market, sell and otherwise dispose of Licensed Products (as defined in the Main Agreement) for the life of the Patent and subject to the provisions of the Main Agreement.

Subject as provided in the Main Agreement this Licence shall terminate without notice in the event of the termination for any reason of the Main Agreement.