More annual reports from Arcturus Therapeutics:
2023 ReportPeers and competitors of Arcturus Therapeutics:
CASI Pharmaceuticals Inc UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 20-F ☐☐REGISTRATION STATEMENT PURSUANT TO SECTIONS 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☑☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2017OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017Commission file number: 001-35932 ARCTURUS THERAPEUTICS LTD.(Exact name of Registrant as specified in its charter) State of Israel(Jurisdiction of incorporation or organization)10628 Science Center Drive, Suite 250San Diego, California(Address of principal executive offices)Mark R. HerbertInterim President Arcturus Therapeutics Ltd.10628 Science Center Drive, Suite 250San Diego, California 92121(858) 900-2660(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredOrdinary Shares, par value of NIS 0.07 Nasdaq Global Market Securities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneIndicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.10,699,271 Ordinary Shares, par value NIS 0.07 per shareIndicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐☐ Yes ☑☑ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of1934. ☐ ☐ Yes ☑☑ NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑☑ Yes ☐ ☐ NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). ☑☑ Yes ☐ ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer☐☐ Accelerated filer ☐☐Non-accelerated filer☑☑ Emerging growth company☑☑ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ☑☑ International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐☐ Other ☐☐ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐☐ Item 18 ☐☐If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐☐ Yes ☑☑ No TABLE OF CONTENTS Item Number Title Page PART ONE Item 1. Identity of directors, senior management and advisers 5Item 2. Offer statistics and expected timetable 5Item 3. Key information 5Item 4. Information on the company 33Item 4A. Unresolved staff comments 63Item 5. Operating and financial review and prospects 63Item 6. Directors, senior management and employees 73Item 7. Major shareholders and related party transactions 84Item 8. Financial Information 88Item 9. The offer and listing 90Item 10. Additional information 91Item 11. Quantitative and qualitative disclosures about market risk 104Item 12. Description of securities other than equity securities 104 PART TWO Item 13. Defaults, dividend arrearages and delinquencies 105Item 14. Material modifications to the rights of security holders and use of proceeds 105Item 15. Controls and procedures 105Item 16A. Audit committee financial expert 105Item 16B. Code of ethics 106Item 16C. Principal accountant fees and services 106Item 16D. Exemptions from the listing standards for audit committees 106Item 16E. Purchases of equity securities by the issuer and affiliated purchasers 106Item 16F. Change in registrant's certifying accountant 106Item 16G. Corporate governance 107Item 16H. Mine safety disclosure 108 PART THREE Item 17. Financial statements 109Item 18. Financial statements 109Item 19. Exhibits 110 2 INTRODUCTIONMerger of Alcobra Ltd. and Arcturus Therapeutics, Inc.On November 15, 2017, Alcobra Ltd. acquired Arcturus Therapeutics, Inc. pursuant to a merger between the companies (the “merger”). Prior to themerger, Alcobra Ltd.’s net assets consisted of cash, investments and nominal non-operating assets. Upon consummation of the merger, Alcobra Ltd. adoptedthe business plan of Arcturus Therapeutics, Inc. In connection with the merger, Alcobra Ltd. agreed to acquire all of the outstanding common stock ofArcturus Therapeutics, Inc. in exchange for the issuance of an aggregate 6,631,712 of Alcobra Ltd.’s Ordinary Shares, par value 0.07 NIS per share, aftergiving effect to a 1-for-7 reverse split effected immediately prior to the merger. As a result of the merger, Arcturus Therapeutics, Inc. became a wholly-ownedsubsidiary of Alcobra Ltd. While Alcobra Ltd. was the legal acquirer in the transaction, Arcturus Therapeutics, Inc. was deemed the accounting acquirer.Immediately after giving effect to the merger, on November 15, 2017, Alcobra Ltd. changed its name to Arcturus Therapeutics Ltd. Our current tradingsymbol is “ARCT.” Our principal executive offices are located in San Diego, California.Unless otherwise indicated herein, all references in this Annual Report on Form 20-F to the “Company,” the “registrant,” “our company,” “we,” “our”and “Arcturus” refer in each case collectively (on a consolidated basis) to Arcturus Therapeutics Ltd. (formerly known as Alcobra Ltd.), an Israeli company,and its subsidiaries, Alcobra, Inc. and Arcturus Therapeutics, Inc., which are Delaware corporations. References to “U.S. dollars” and “$” are to currency of theUnited States of America, and references to “NIS” are to New Israeli Shekels. References to “Ordinary Shares” are to our Ordinary Shares, par value NIS 0.07per share after the November 15, 2017 merger and $0.0001 prior to the merger.We do not endorse or adopt any third-party research or forecast firms’ statements or reports referred to in this annual report and assume noresponsibility for the contents or opinions represented in such statements or reports, nor for the updating of any information contained therein.SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 20-F, or this annual report, and the documents incorporated by reference herein may contain “forward-lookingstatements” within the meaning of the federal securities laws made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of1995. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those setforth below under Part I, Item 3.D, “Risk Factors” in this annual report. Except as required by law, we assume no obligation to update these forward-lookingstatements, whether as a result of new information, future events or otherwise. These statements, which represent our current expectations or beliefsconcerning various future events, may contain words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate” or other wordsindicating future results, though not all forward-looking statements necessarily contain these identifying words. Such statements may include, but are notlimited to, statements concerning the following: •the initiation, cost, timing, progress and results of, and our expected ability to undertake certain activities and accomplish certain goals withrespect to, our research and development activities, preclinical studies and clinical trials; •our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations, and/or warnings in thelabel of an approved product candidate; •our ability to obtain and deploy funding for our operations; •our plans to research, develop and commercialize our product candidates; •our strategic alliance partners’ election to pursue development and commercialization of any programs or product candidates that are subject to ourcollaboration and license agreements with such partners; •our ability to attract collaborators with relevant development, regulatory and commercialization expertise; •future activities to be undertaken by our strategic alliance partners, collaborators and other third parties; •our ability to avoid, settle or be victorious at costly litigation with shareholders, former executives or others; •our ability to obtain and maintain intellectual property protection for our product candidates;3 •the size and growth potential of the markets for our product candidates, and our ability to serve those markets; •our ability to successfully commercialize, and our expectations regarding future therapeutic and commercial potential with respect to, our productcandidates; •the rate and degree of market acceptance of our product candidates; •our ability to develop sales and marketing capabilities, whether alone or with potential future collaborators; •regulatory developments in the United States and foreign countries; •our ability to attract and retain experienced and seasoned scientific and management professionals to lead the Company; •the performance of our third-party suppliers and manufacturers; •the success of competing therapies that are or may become available; •our expectations regarding the time during which we will be a foreign private issuer; •our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012(the “JOBS Act”); and •the accuracy of our estimates regarding future expenses, future revenues, capital requirements and need for additional financing.Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or performance todiffer materially from those projected. These statements are only current predictions and are subject to known and unknown risks, uncertainties, and otherfactors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated bythe forward-looking statements. In addition, historic results of scientific research, preclinical and clinical trials do not guarantee that the conclusions of futureresearch or trials would not suggest different conclusions or that historic results referred to herein would not be interpreted differently in light of additionalresearch, preclinical and clinical trials results. The forward-looking statements contained in this annual report are subject to risks and uncertainties, includingthose discussed in our other filings with the Securities and Exchange Commission, or the SEC. Readers are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements arereasonable, we cannot guarantee future results, levels of activity, performance, or achievements.4 PART IITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3.KEY INFORMATION3.A.Selected financial dataAs noted in the “Introduction” to this annual report above, from a legal perspective, pursuant to the merger, our company (formerly known as AlcobraLtd.) acquired Arcturus Therapeutics, Inc. with Arcturus Therapeutics, Inc. surviving as our wholly-owned subsidiary. While Alcobra Ltd. was the legalacquirer in the transaction, Arcturus Therapeutics, Inc. was deemed the accounting acquirer. Prior to the merger, Alcobra Ltd.’s net assets consisted of cash,investments and nominal non-operating assets. Upon the closing of the merger, Alcobra Ltd. adopted the business plan of Arcturus Therapeutics, Inc. Ourhistorical consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States and are presentedin U.S. dollars. The selected historical consolidated financial information as of December 31, 2017, 2016 and 2015 and for the years ended December 31,2017, 2016 and 2015 has been derived from, and should be read in conjunction with, the consolidated financial statements of Arcturus Therapeutics Ltd. andnotes thereto appearing elsewhere in this annual report. The selected financial data as of December 31, 2014 and 2013 and for the year ended December 31,2014 and the period February 6, 2013 to December 31, 2013 have been derived from the unaudited financial statements of Arcturus Therapeutics, Inc. notincluded in this annual report.The information presented below is qualified by the more detailed historical consolidated financial statements set forth in this annual report, andshould be read in conjunction with those consolidated financial statements, the notes thereto and the discussion under Item 5 – “Operating and FinancialReview and Prospects” – included elsewhere in this annual report. Our historical results set forth herein are not necessarily indicative of our future results.5 Consolidated Statement of Operations Data(in thousands of U.S. dollars, except per share data) For the year ended December 31, For theperiodFebruary 6 toDecember 31, 2017 2016 2015 2014(Unaudited) 2013(Unaudited) Revenue in conjunction with strategic alliances and collaborations $12,998 $20,382 $6,138 $25 $- Research and development expenses, net 15,918 17,934 5,476 3,975 1,665 General and administrative expenses 7,572 3,448 2,574 2,027 892 Net loss from operations (10,492) (1,000) (1,912) (5,977) (2,557)Net loss (10,902) (1,571) (1,902) (6,018) (2,696)Net loss per share, basic and diluted $(3.53) $(0.77) $(0.94) $(2.99) $(2.50)Weighted average shares outstanding, basic and diluted 3,087 2,032 2,016 2,015 1,079 Consolidated Balance Sheet Data as of December 31,(in thousands of U.S. dollars) 2017 2016 2015 2014(Unaudited) 2013(Unaudited) Working capital $39,662 $3,597 $1,208 $1,416 $3,229 Total assets $52,024 $13,736 $14,947 $2,895 $3,522 Shareholders' equity (deficit) $33,794 $1,577 $(3,631) $(1,845) $3,329 3.B.Capitalization and indebtednessNot applicable.3.C.Reasons for the offer and use of proceedsNot applicable.3.D.Risk factorsIn conducting our business, we face many risks that may interfere with our business objectives. Some of these risks could materially and adverselyaffect our business, financial condition and results of operations. In particular, we are subject to various risks resulting from inherent unknowns anduncertainties in the drug development process, as well as changing economic, political, industry, regulatory, business and financial conditions. The risks anduncertainties described below are not the only ones we face.You should carefully consider the following factors and other information in this annual report before you decide to invest in our Ordinary Shares. Ifany of the negative events referred to below occur, our business, financial condition and results of operations could suffer. In any such case, the trading priceof our Ordinary Shares could decline, and you may lose all or part of your investment.6 RISKS RELATED TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL CAPITALWe have a limited operating history, have incurred significant losses since our inception and anticipate that we will continue to incur significant losses forthe foreseeable future.We are a preclinical nucleic acid medicines company with a limited operating history. Since inception, our operations have been primarily limited toacquiring and licensing intellectual property rights, developing our nucleic acid product platform, undertaking basic research around nucleic acid targets andconducting preclinical studies for our initial programs. We have not yet obtained regulatory approval for any product candidates. Consequently, anypredictions about our future success or viability, or any evaluation of our business and prospects, may not be accurate.We have incurred losses in each year since our inception. Our net losses were $10.9 million, $1.6 million and $1.9 million for the years endedDecember 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, we had an accumulated deficit of $23.1 million.We have devoted most of our financial resources to research and development, including our preclinical development activities. To date, we havefunded our operations primarily through upfront payments, research funding and milestones from strategic alliances and collaborations, and through the saleof equity and convertible securities. We expect to continue to incur substantial and increased expenses, losses and negative cash flows as we expand ourdevelopment activities and advance our preclinical programs. If our product candidates are not successfully developed or commercialized, including becauseof a lack of capital, or if we do not generate enough revenue following marketing approval, we will not achieve profitability and our business may fail. Evenif we or our strategic alliance partners successfully obtain regulatory approval to market a product candidate, our revenues will also depend upon the size ofany markets in which our product candidates have received market approval, and our ability to achieve sufficient market acceptance and adequate marketshare for our products.We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. The net losses we incur may fluctuatesignificantly from quarter to quarter. We anticipate that our expenses will increase substantially if and as we: •continue our research and preclinical development of our product candidates, both independently and under our strategic alliance agreements; •seek to identify additional targets and product candidates; •acquire or in-license other products and technologies; •advance product candidates into clinical trials; •seek marketing approvals for our product candidates that successfully complete clinical trials; •ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; •maintain, expand and protect our intellectual property portfolio; •hire additional clinical, regulatory, research, executive and administrative personnel; •create additional infrastructure to support our operations and our product development and planned future commercialization efforts; and •incur legal and other expenses in connection with legal proceedings, including our ongoing proxy contest.7 We have never generated any revenue from product sales, have generated only limited revenue since inception, and may never be profitable.Our ability to generate revenue and achieve profitability depends on our ability, alone or with strategic alliance partners, to successfully complete thedevelopment of, obtain the necessary regulatory approvals for and commercialize our product candidates. We do not anticipate generating revenues fromsales of our products for the foreseeable future, if ever. Our ability to generate future revenues from product sales depends heavily on our success in: •completing our research and preclinical development of product candidates; •initiating and completing clinical trials for product candidates; •seeking and obtaining marketing approvals for product candidates that successfully complete clinical trials; •establishing and maintaining supply and manufacturing relationships with third parties; •launching and commercializing product candidates for which we obtain marketing approval, with an alliance partner or, if launchedindependently, successfully establishing a sales force, marketing and distribution infrastructure; •maintaining, protecting and expanding our intellectual property portfolio; and •attracting, hiring and retaining qualified personnel.Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to predict the timing or amountof increased expenses and when we will be able to achieve or maintain profitability, if ever. In addition, our expenses could increase beyond expectations ifwe are required by the Food and Drug Administration, or FDA, or other foreign regulatory agencies to perform studies and trials in addition to those that wecurrently anticipate.Even if one or more of the product candidates that we independently develop is approved for commercial sale, we anticipate incurring significantcosts associated with commercializing any approved product. Even if we are able to generate revenues from the sale of any approved products, we may notbecome profitable and may need to obtain additional funding to continue operations.We may need to raise additional capital, which may not be available on acceptable terms, or at all.Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is expensive. We expect our research anddevelopment expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates towards orthrough clinical trials. We may need to raise additional capital to support our operations and such funding may not be available to us on acceptable terms, orat all. As of December 31, 2017, we had unrestricted cash and cash equivalents and short-term investments of $48.6 million. We believe that our existingcapital resources will be sufficient to fund our existing capital resources for at least twelve months from the filing of this Annual Report. We cannot provideassurances that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than wecurrently anticipate. For example, our preclinical trials may encounter technical or other difficulties. Additionally, our strategic alliance partners may notelect to pursue the development and commercialization of any of our product candidates that are subject to their respective strategic alliance agreements withus. Any of these events may increase our development costs more than we expect. In order to support our long term plans, we may need to raise additionalcapital or otherwise obtain funding through additional strategic alliances if we choose to initiate preclinical or clinical trials for new product candidates otherthan programs currently partnered. In any event, we will require additional capital to obtain regulatory approval for, and to commercialize, future productcandidates.8 Any additional fundraising efforts may divert our management from our day-to-day activities, which may adversely affect our ability to develop andcommercialize future product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on termsacceptable to us, if at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to: •significantly delay, scale back or discontinue the development or commercialization of any future product candidates; •seek strategic alliances for research and development programs at an earlier stage than otherwise would be desirable or on terms that are lessfavorable than might otherwise be available; or •relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop orcommercialize ourselves.If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we will be prevented from pursuing development andcommercialization efforts, which will have a material adverse effect on our business, operating results and prospects.RISKS RELATED TO THE DISCOVERY AND DEVELOPMENT OF PRODUCT CANDIDATESPreclinical and clinical studies of our product candidates may not be successful. If we are unable to generate successful results from preclinical andclinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed.We have no products on the market and all of our product candidates are in preclinical development. In particular, none of our product candidateshave ever been tested in a human subject. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals for and, if approved,successfully commercializing our product candidates, either alone or with third parties. Before obtaining regulatory approval for the commercial distributionof our product candidates, we or an existing or future collaborator must conduct extensive preclinical tests and clinical trials to demonstrate the safety, purityand potency of our product candidates.The success of our product candidates will depend on several factors, including the following: •successfully designing preclinical studies which may be predictive of clinical outcomes; •successful results from preclinical and clinical studies; •receipt of marketing approvals from applicable regulatory authorities; •obtaining and maintaining patent and trade secret protection for future product candidates; •establishing and maintaining manufacturing relationships with third parties or establishing our own manufacturing capability; and •successfully commercializing our products, if and when approved, whether alone or in collaboration with others.If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfullycomplete the development or commercialization of our product candidates, which would materially harm our business.The approach we are taking to discover and develop drugs is novel and may never lead to marketable products.We have concentrated our therapeutic product research and development efforts on nucleic acid technology, and our future success depends on thesuccessful development of this technology and products based on our nucleic acid product platform. Except for Kynamro (mipomersen) and Spinraza(nusinersen), which are marketed by Biogen Inc., neither we, nor any other company, has received regulatory approval to market nucleic acid therapeutics.The scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new. The scientific evidence to supportthe feasibility of developing product candidates based on these discoveries is both preliminary and limited. If we do not successfully develop andcommercialize product candidates based upon our technological approach, we may not become profitable and the value of our Ordinary Shares may decline.9 Further, our focus solely on nucleic acid technology for developing drugs as opposed to multiple, more proven technologies for drug developmentincreases the risks associated with the ownership of our Ordinary Shares. If we are not successful in developing any product candidates using nucleic acidtechnology, we may be required to change the scope and direction of our product development activities. In that case, we may not be able to identify andimplement successfully an alternative product development strategy.We may not be successful in our efforts to identify or discover potential product candidates.The success of our business depends primarily upon our ability to identify, develop and commercialize nucleic acid medicines. Our research programsmay initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for a number of reasons,including: •our research methodology or that of our strategic alliance partners may be unsuccessful in identifying potential product candidates; •potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the productsunmarketable or unlikely to receive marketing approval; or •our strategic alliance partners may change their development profiles for potential product candidates or abandon a therapeutic area.If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverseeffect on our business and could potentially cause us to cease operations. Research programs to identify new product candidates require substantial technical,financial and human resources. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful.If future clinical trials of our product candidates fail to demonstrate safety and efficacy to the satisfaction of regulatory authorities or do not otherwiseproduce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development andcommercialization of our product candidates.Before obtaining marketing approval from regulatory authorities for the sale of product candidates, we or our strategic alliance partners must conductextensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Clinical trials are expensive, difficult to design andimplement, can take many years to complete and are uncertain as to the outcome. A failure of one or more clinical trials can occur at any stage of testing. Theoutcome of preclinical studies and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do notnecessarily predict final results. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companiesthat have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketingapproval for their products.Events which may result in a delay or unsuccessful completion of clinical development include: •delays in reaching an agreement with the FDA or other regulatory authorities on final trial design; •imposition of a clinical hold of our clinical trial operations or trial sites by the FDA or other regulatory authorities; •delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites; •our inability to adhere to clinical trial requirements directly or with third parties such as CROs; •delays in obtaining required institutional review board approval at each clinical trial site; •delays in recruiting suitable patients to participate in a trial; •delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;10 •delays in having patients complete participation in a trial or return for post-treatment follow-up; •delays caused by patients dropping out of a trial due to protocol procedures or requirements, product side effects or disease progression; •clinical sites dropping out of a trial to the detriment of enrollment; •time required to add new clinical sites; or •delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.If we or our strategic alliance partners are required to conduct additional clinical trials or other testing of any product candidates beyond those that arecurrently contemplated, are unable to successfully complete clinical trials of any such product candidates or other testing, or if the results of these trials ortests are not positive or are only modestly positive or if there are safety concerns, we or our strategic alliance partners may: •be delayed in obtaining marketing approval for our future product candidates; •not obtain marketing approval at all; •obtain approval for indications or patient populations that are not as broad as originally intended or desired; •obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; •be subject to additional post-marketing testing requirements; or •have the product removed from the market after obtaining marketing approval.Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any clinicaltrials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten anyperiods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market beforewe do, which would impair our ability to successfully commercialize our product candidates and may harm our business and results of operations. Anyinability to successfully complete preclinical and clinical development, whether independently or with our strategic alliance partners, could result inadditional costs to us or impair our ability to generate revenues from product sales, regulatory and commercialization milestones and royalties.Any of our product candidates may cause undesirable side effects or have other properties impacting safely that could delay or prevent their regulatoryapproval or limit the scope of any approved label or market acceptance.Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and couldresult in a more restrictive label or the delay or denial of regulatory approval by the FDA or other regulatory authorities. While we have not yet initiatedclinical trials for any of our product candidates, it is likely that there may be side effects associated with their use. Results of our trials could reveal a high andunacceptable severity and prevalence of these or other side effects. In such an event, our trials could be suspended or terminated and the FDA or comparableforeign regulatory authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications.Such side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.Any of these occurrences may materially and adversely affect our business, financial condition, results of operations and prospects.Further, clinical trials by their nature test product candidates in only samples of the potential patient populations. With a limited number of patientsand limited duration of exposure in such trials, rare and severe side effects of our product candidates may not be uncovered until a significantly larger numberof patients are exposed to the product candidate.11 If any of our future products, if and when approved for commercial sale, cause serious or unexpected side effects, a number of potentially significantnegative consequences could result, including: •regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluationand mitigation strategy; •regulatory authorities may require the addition of labeling statements, such as warnings or contraindications; •we may be required to change the way the product is administered or conduct additional clinical trials; •we could be sued and held liable for harm caused to patients; or •our reputation may suffer.Any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantiallyincrease the costs of commercializing our future products and impair our ability to generate revenues from the commercialization of these products either byus or by our strategic alliance partners.Even if we complete the necessary preclinical studies and clinical trials, we cannot predict whether or when we will obtain regulatory approval tocommercialize a product candidate and we cannot, therefore, predict the timing of any revenue from a future product.Neither we nor our strategic alliance partners can commercialize a product until the appropriate regulatory authorities, such as the FDA, have reviewedand approved the product candidate. The regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtainregulatory approval. Additional delays may result if an FDA Advisory Committee recommends restrictions on approval or recommends non-approval. Inaddition, we or our strategic alliance partners may experience delays or rejections based upon additional government regulation from future legislation oradministrative action, or changes in regulatory agency policy during the period of product development, clinical trials and the review process.Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face futuredevelopment and regulatory difficulties.Even if we obtain regulatory approval in the United States, the FDA may still impose significant restrictions on the indicated uses or marketing of ourproduct candidates, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance. The holder of an approved NDAis obligated to monitor and report adverse events, or AEs, and any failure of a product to meet the specifications in the NDA. The holder of an approved NDAmust also submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturingprocess. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicablefederal and state laws.In addition, drug product manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by theFDA and other regulatory authorities for compliance with current good manufacturing practices, or cGMP, and adherence to commitments made in the NDA.If we or a regulatory agency discovers previously unknown problems with a product such as AEs of unanticipated severity or frequency, or problems with thefacility where the product is manufactured, a regulatory agency may impose restrictions relative to that product or the manufacturing facility, includingrequiring recall or withdrawal of the product from the market or suspension of manufacturing.If we or our partners fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agencymay: •issue a warning letter asserting that we are in violation of the law; •seek an injunction or impose civil or criminal penalties or monetary fines; •suspend or withdraw regulatory approval; •suspend any ongoing clinical trials;12 •refuse to approve a pending NDA or supplements to an NDA submitted by us; •seize product; or •refuse to allow us to enter into supply contracts, including government contracts.Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generatenegative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize our future products and generaterevenues.We may use our financial and human resources to pursue a particular research program or product candidate and fail to capitalize on programs orproduct candidates that may be more profitable or for which there is a greater likelihood of success.As a result of our limited financial and human resources, we will have to make strategic decisions as to which targets and product candidates to pursueand may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential.Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending onresearch and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accuratelyevaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate throughstrategic alliance, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development andcommercialization rights to such product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would havebeen more advantageous to enter into a partnering arrangement.If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that couldhave a material adverse effect on the success of our business.We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling,use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, includingchemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of thesematerials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from ouruse of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significantcosts associated with civil or criminal fines and penalties.Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resultingfrom the use of hazardous materials or other work-related injuries, this insurance may not provide adequate coverage against potential liabilities. In addition,we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future lawsand regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantialfines, penalties or other sanctions.RISKS RELATED TO OUR RELIANCE ON THIRD PARTIESWe depend upon our third-party alliances for the development, manufacture and eventual commercialization of certain nucleic acid product candidates. Ifthese third-party alliances are unsuccessful or are terminated, we may be unable to commercialize certain product candidates and we may be unable togenerate revenues from our development programs.We depend upon third party alliance partners for financial and scientific resources for the clinical development, manufacture and commercialization ofcertain of our nucleic acid product candidates. These alliances will likely provide us with limited control over the course of development of a nucleic acidproduct candidate, especially once a candidate has reached the stage of clinical development. For example, in our alliance with Ultragenyx, Ultragenyx hasthe option to obtain an exclusive worldwide license to develop, manufacture and commercialize product candidates upon the achievement of relevantendpoints in preclinical studies and clinical trials. However, Ultragenyx is not under any obligation to exercise these options to progress any of our nucleicacid product candidates. While Ultragenyx has development obligations with respect to programs that it may elect to pursue under our agreement, our abilityto ultimately recognize revenue from this and future relationships will depend upon the ability and willingness of our alliance partners to successfully meettheir respective responsibilities under our agreements with them. Our ability to recognize revenues from successful strategic alliances may be impaired byseveral factors including: •an alliance partner may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition,sale or downsizing of its company or business unit;13 •an alliance partner may cease development in therapeutic areas which are the subject of our strategic alliances; •an alliance partner may change the success criteria for a particular program or potential product candidate thereby delaying or ceasingdevelopment of such program or candidate; •a significant delay in initiation of certain development activities by an alliance partner will also delay payment of milestones tied to suchactivities, thereby impacting our ability to fund our own activities; •an alliance partner could develop a product that competes, either directly or indirectly, with an alliance product; •an alliance partner with commercialization obligations may not commit sufficient financial or human resources to the marketing, distribution orsale of a product; •an alliance partner with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demandrequirements; •an alliance partner may exercise its rights under the agreement to terminate a strategic alliance; •a dispute may arise between us and an alliance partner concerning the research, development or commercialization of a program or productcandidate resulting in a delay in milestones, royalty payments or termination of a program and possibly resulting in costly litigation or arbitrationwhich may divert management attention and resources; and •an alliance partner may use our proprietary information or intellectual property in such a way as to invite litigation from a third party or fail tomaintain or prosecute intellectual property rights such that our rights in such property are jeopardized.If any of our alliance partners do not elect to pursue the development and commercialization of our nucleic acid development candidates or if theyterminate the strategic alliance, then, depending on the event: •product candidates subject to our alliances may be terminated or significantly delayed; •our cash expenditures could increase significantly if it is necessary for us to hire additional employees and allocate scarce resources to thedevelopment and commercialization of product candidates that were previously funded, or expected to be funded, by our alliance partners; •we would bear all of the risks and costs related to the further development and commercialization of product candidates that were previously thesubject of our strategic alliance, including the reimbursement of third parties; and •in order to fund further development and commercialization, we may need to seek out and establish alternative strategic alliances with third-partypartners; this may not be possible, or we may not be able to do so on terms which are acceptable to us, in which case it may be necessary for us tolimit the size or scope of one or more of our programs or increase our expenditures and seek additional funding by other means.Any of these events would have a material adverse effect on our results of operations and financial condition.We rely on third parties to conduct some aspects of our compound formulation, research and preclinical studies, and those third parties may not performsatisfactorily, including failing to meet deadlines for the completion of such formulation, research or testing.We do not expect to independently conduct all aspects of our drug discovery activities, compound formulation research or preclinical studies ofproduct candidates. We currently rely and expect to continue to rely on third parties to conduct some aspects of our preclinical studies and formulationdevelopment.Any of these third parties may terminate their engagements with us at any time. If we need to enter into alternative arrangements, it would delay ourproduct development activities. Our reliance on these third parties for research and development activities will reduce our control over these activities butwill not relieve us of our responsibilities. For example, for product candidates that we develop and commercialize on our own, we will remain responsible forensuring that each of our IND-enabling studies and clinical trials are conducted in accordance with the study plan and protocols for the trial.14 If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance withregulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, the necessary preclinicalstudies to enable us or our strategic alliance partners to select viable product candidates for IND submissions and will not be able to, or may be delayed in ourefforts to, successfully develop and commercialize such product candidates.We rely on third-party manufacturers to produce our preclinical product candidates, and we intend to rely on third parties to produce future clinicalsupplies of product candidates that we advance into clinical trials and commercial supplies of any approved product candidates.Reliance on third-party manufacturers entails risks, including risks that we would not be subject to if we manufactured the product candidatesourselves, including: •the inability to meet any product specifications and quality requirements consistently; •a delay or inability to procure or expand sufficient manufacturing capacity; •manufacturing and product quality issues related to scale-up of manufacturing; •costs and validation of new equipment and facilities required for scale-up; •a failure to comply with cGMP and similar foreign standards; •the inability to negotiate manufacturing or supply agreements with third parties under commercially reasonable terms; •termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; •the reliance on a limited number of sources, and in some cases, single sources for raw materials, such that if we are unable to secure a sufficientsupply of these product components, we will be unable to manufacture and sell future product candidates in a timely fashion, in sufficientquantities or under acceptable terms; •the lack of qualified backup suppliers for any raw materials that are currently purchased from a single source supplier; •operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including thebankruptcy of the manufacturer or supplier; •carrier disruptions or increased costs that are beyond our control; and •the failure to deliver products under specified storage conditions and in a timely manner.Any of these events could lead to clinical study delays or failure to obtain regulatory approval, or impact our ability to successfully commercializefuture products. Some of these events could be the basis for FDA action, including injunction, recall, seizure or total or partial suspension of production.We rely on limited sources of supply for the drug substance of product candidates and any disruption in the chain of supply may cause a delay indeveloping and commercializing these product candidates.We have established manufacturing relationships with a limited number of suppliers to manufacture raw materials and the drug substance used tocreate our product candidates. The availability of such suppliers to manufacture raw materials for our product candidates may be limited. Further, eachsupplier may require licenses to manufacture such components if such processes are not owned by the supplier or in the public domain. As part of anymarketing approval, a manufacturer and its processes are required to be qualified by the FDA prior to commercialization. If supply from the approved vendoris interrupted, there could be a significant disruption in commercial supply. An alternative vendor would need to be qualified through an NDA supplementwhich could result in further delay. The FDA or other regulatory agencies outside of the United States may also require additional studies if a new supplier isrelied upon for commercial production. Switching vendors may involve substantial costs and is likely to result in a delay in our desired clinical andcommercial timelines.15 In addition, if our alliance partners elect to pursue the development and commercialization of certain programs, we will lose control over themanufacturing of the product candidate subject to the agreement. Also, we will not be able to ensure that the product candidates will be manufactured underthe correct conditions to permit the product candidates to be used in such clinical trials.These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates, causeus to incur higher costs and prevent us from commercializing our products successfully. Furthermore, if our suppliers fail to deliver the required commercialquantities of active pharmaceutical ingredients on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacementsuppliers capable of production in a timely manner at a substantially equivalent cost, our clinical trials may be delayed or we could lose potential revenue.Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization.As we scale-up manufacturing of product candidates and conduct required stability testing, product, packaging, equipment and process-related issuesmay require refinement or resolution in order to proceed with any clinical trials and obtain regulatory approval for commercial marketing. We may identifysignificant impurities, which could result in increased scrutiny by the regulatory agencies, delays in clinical programs and regulatory approval, increases inour operating expenses, or failure to obtain or maintain approval for product candidates or any approved products.We intend to rely on third parties to conduct, supervise and monitor our clinical trials, and if those third parties perform in an unsatisfactory manner, itmay harm our business.We or our strategic alliance partners intend to rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials. Whilewe will have agreements governing their activities, we and our strategic alliance partners have limited influence over their actual performance. We willcontrol only certain aspects of our CROs’ activities. Nevertheless, we or our strategic alliance partners will be responsible for ensuring that each of ourclinical trials are conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs will notrelieve us of our regulatory responsibilities.We, our alliance partners and our CROs will be required to comply with the FDA’s or other regulatory agency’s good clinical practices, or GCPs, forconducting, recording and reporting the results of IND-enabling studies and clinical trials to assure that data and reported results are credible and accurateand that the rights, integrity and confidentiality of future clinical trial participants are protected. The FDA and non-U.S. regulatory agencies enforce theseGCPs through periodic inspections of trial sponsors, principal investigators and clinical trial sites. If we or our future CROs fail to comply with applicableGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or applicable non-U.S. regulatory agency may require us toperform additional clinical trials before approving any marketing applications for the relevant jurisdiction. Upon inspection, the FDA or applicable non-U.S.regulatory agency may determine that our future clinical trials did not comply with GCPs. In addition, our future clinical trials will require a sufficiently largenumber of test subjects to evaluate the safety and effectiveness of a potential drug product. Accordingly, if our future CROs fail to comply with theseregulations or fail to recruit a sufficient number of patients, we may be required to repeat such clinical trials, which would delay the regulatory approvalprocess.Our future CROs will not be our employees, and we will not be able to control whether or not they devote sufficient time and resources to our futureclinical and nonclinical programs. These CROs may also have relationships with other commercial entities, including our competitors, for whom they mayalso be conducting clinical trials, or other drug development activities which could harm our competitive position. If our future CROs do not successfullycarry out their contractual duties or obligations, fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromiseddue to the failure to adhere to our clinical protocols or regulatory requirements, or for any other reasons, our clinical trials may be extended, delayed orterminated, and we may not be able to obtain regulatory approval for, or successfully commercialize our product candidates. As a result, our financial resultsand the commercial prospects for such products and any product candidates that we develop would be harmed, our costs could increase, and our ability togenerate revenues could be delayed.We intend to rely on other third parties to store and distribute drug products for any clinical trials that we may conduct. Any performance failure onthe part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, ifapproved, producing additional losses and depriving us of potential product revenue.16 RISKS RELATED TO OUR INTELLECTUAL PROPERTYIf we are unable to obtain or protect intellectual property rights related to our future products and product candidates, we may not be able to competeeffectively in our markets.Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses ofintellectual property rights of others, for our product candidates, methods used to develop and manufacture our product candidates and methods for treatingpatients using our product candidates, as well as our ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rightsand to operate without infringing upon the proprietary rights of others. As of April 1, 2018, we are the sole owner of 140 patents and pending patentapplications including 16 U.S. patents, 25 pending U.S. patent applications, 40 foreign patents and 59 pending foreign patent applications. The strength ofpatents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that weown or in-license may fail to result in patents with claims that cover the products in the United States or in other countries. There is no assurance that all ofthe potentially relevant prior art relating to our patents and patent applications has been found; such prior art can invalidate a patent or prevent a patent fromissuing based on a pending patent application. Even if patents do successfully issue, third parties may challenge their validity, enforceability or scope, whichmay result in such patents being narrowed or invalidated. Furthermore, even if they are unchallenged, our patents and patent applications may not adequatelyprotect our intellectual property or prevent others from designing around our claims.If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue or if their breadth or strength ofprotection is threatened, it could dissuade companies from collaborating with us to develop product candidates, and threaten our ability to commercialize,future products. We cannot offer any assurances about which, if any, patents will issue or whether any issued patents will be found invalid and unenforceableor will be threatened by third parties. A patent may be challenged through one or more of several administrative proceedings including post-grant challenges,re-examination or opposition before the U.S. PTO or foreign patent offices. For example, re-examination of, or oppositions to, patents owned by or licensed tous have previously been initiated, and while we believe these concluded proceedings did not result in a commercially relevant impact on the individualpatents, any successful challenge of patents or any other patents owned by or licensed to us could deprive us of rights necessary for the successfulcommercialization of any product candidates that we or our strategic alliance partners may develop.Since patent applications in the United States and most other countries are confidential for a period of time after filing, and some remain so untilissued, we cannot be certain that we were the first to file any patent application related to a product candidate. Furthermore, in certain situations, if we andone or more third parties have filed patent applications in the United States and claiming the same subject matter, an administrative proceeding, known as aninterference, can be initiated to determine which applicant is entitled to the patent on that subject matter. Such an interference proceeding provoked by thirdparties or brought by us may be necessary to determine the priority of inventions with respect to our patents or patent applications, or those of our alliancepartners or licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailingparty. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of a patent or patentapplication in such a proceeding may not be successful and, even if successful, may result in substantial costs and distract our management and otheremployees.In addition, patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Variousextensions may be available however the life of a patent, and the protection it affords, is limited. Once the patent life has expired for a product, we may beopen to competition from generic medications. Further, if we encounter delays in regulatory approvals, the period of time during which we could market aproduct candidate under patent protection could be reduced.In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-howthat is not patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery and development processes thatinvolve proprietary know-how, information or technology that is not covered by patents. Although each of our employees agrees to assign their inventions tous through an employee inventions agreement, and all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executedor that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our tradesecrets or independently develop substantially equivalent information and techniques. In addition, others may independently discover our trade secrets andproprietary information. For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional informationpublicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at thepresent time how the FDA’s disclosure policies may change in the future, if at all.17 Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we areunable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that wewill have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which couldmaterially adversely affect our business, results of operations and financial condition.Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantialamount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology andpharmaceutical industries, including patent infringement lawsuits. Numerous U.S. and foreign issued patents and pending patent applications, which areowned by third parties, exist in the fields in which we and our strategic alliance partners are pursuing development candidates. As the biotechnology andpharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of thepatent rights of third parties.Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patentapplications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our productcandidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in patentsthat our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes uponthese patents. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our product candidates,any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability tocommercialize such product candidate unless we obtained a license under the applicable patents, or until such patents expire. Similarly, if any third-partypatents were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, includingcombination therapy, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unlesswe obtained a license or until such patent expires. In either case, such a license may not be available on commercially reasonable terms or at all.Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop andcommercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense andwould be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to paysubstantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one ormore licenses from third parties, which may be impossible or require substantial time and monetary expenditure.If we fail to obtain licenses or comply with our obligations in these agreements under which we license intellectual property rights from third parties orotherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.We are a party to intellectual property license agreements that are important to our business and expect to enter into additional license agreements inthe future. Our existing license agreements impose, and we expect that future license agreements will impose, various obligations on us. See the descriptionof the Protiva agreement in Item 4.B. below under “Other Material Agreements.”We may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates, and we have done sofrom time to time. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to furtherdevelop and commercialize one or more of our product candidates, which could harm our business significantly. We cannot provide any assurances thatthird-party patents do not exist which might be enforced against our future products, resulting in either an injunction prohibiting our sales, or, with respect toour sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties.18 We may be involved in lawsuits to protect or enforce our patents or the patents of our licensees, which could be expensive, time consuming andunsuccessful.Competitors may infringe our patents or the patents of our licensees. To counter infringement or unauthorized use, we may be required to fileinfringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or ourlicensees is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not coverthe technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated orinterpreted narrowly and could put our patent applications at risk of not issuing.Our defense in a lawsuit may fail and, even if successful, may result in substantial costs and distract our management and other employees. We maynot be able to prevent, alone or with our licensees, misappropriation of our intellectual property rights, particularly in countries where the laws may notprotect those rights as fully as in the United States.Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some ofour confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results ofhearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have amaterial adverse effect on the price of our Ordinary Shares.We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information ofthird parties.We employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we orour employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ formeremployers or other third parties. We may also be subject to claims that former employers or other third parties have an ownership interest in our patents.Litigation may be necessary to defend against these claims. There is no guarantee of success in defending these claims, and if we are successful, litigationcould result in substantial cost and be a distraction to our management and other employees.RISKS RELATED TO COMMERCIALIZATION OF PRODUCT CANDIDATESThe commercial success of our programs that are part of our strategic alliance agreements will depend in large part on the development and marketingefforts of our alliance partners. If our alliance partners are unable or unwilling to perform in accordance with the terms of our agreements, our potentialto generate future revenue from these programs would be significantly reduced and our business would be materially and adversely harmed.If or when our strategic alliance partners elect to further pursue the development and commercialization of any of the product candidates that aresubject to its strategic alliance agreement with us, we will have limited influence and/or control over their approaches to development andcommercialization. If strategic alliance partners do not perform in the manner that we expect or fail to fulfill their responsibilities in a timely manner, or at all,the clinical development, regulatory approval and commercialization efforts related to product candidates we have licensed to such strategic alliance partnerscould be delayed or terminated. If we terminate any of our strategic alliances or any program thereunder, we may have the right to assume the responsibility atour own expense for the development of the applicable product candidates. Assuming sole responsibility for further development will increase ourexpenditures, and may mean we will need to limit the size and scope of one or more of our programs, seek additional funding and/or choose to stop workaltogether on one or more of the affected product candidates. This could result in a limited potential to generate future revenue from such product candidatesand our business could be materially and adversely affected.We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to competeeffectively.The biotechnology and pharmaceutical industries are intensely competitive. We have competitors both in the United States and internationally,including major multinational pharmaceutical companies, biotechnology companies and universities and other research institutions. Our competitors mayhave substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing andmanufacturing organizations. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resourcesbeing concentrated in our competitors. Competition may increase further as a result of advances in the commercial applicability of technologies and greateravailability of capital for investment in these industries. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, drugproducts that are more effective or less costly than any product candidate that we may develop.19 All of our programs are preclinical and targeted toward indications for which there are product candidates in clinical development. We will facecompetition from other drugs currently approved or that may be approved in the future for the same therapeutic indications. For example, both Synlogic andUltragenyx are currently conducting clinical trials with therapies to treat for ornithine transcarbamylase, or OTC, deficiency. Currently approved therapies forthese patients include the small molecule nitrogen scavengers sodium benzoate, sodium phenylacetate, and sodium phenylbutyrate, and glycerolphenylbutyrate (brand name Ravicti®). Our ability to compete successfully will depend largely on our ability to leverage our experience in drug discoveryand development to: •discover and develop therapeutics that are superior to other products in the market; •attract qualified scientific, product development and commercial personnel; •obtain patent and/or other proprietary protection for our nucleic acid product platform and future product candidates; •obtain required regulatory approvals; and •successfully collaborate with pharmaceutical companies in the discovery, development and commercialization of new therapeutics.The availability of our competitors’ products could limit the demand, and the price we are able to charge, for any products that we may develop andcommercialize. We will not achieve our business plan if the acceptance of any of these products is inhibited by price competition or the reluctance ofphysicians to switch from existing drug products to our products, or if physicians switch to other new drug products or choose to reserve our future productsfor use in limited circumstances. The inability to compete with existing or subsequently introduced drug products would have a material adverse impact onour business, financial condition and prospects.Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novelcompounds that could make our product candidates less competitive. In addition, any new product that competes with an approved product mustdemonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commerciallysuccessful. Accordingly, our competitors may succeed in obtaining patent protection, receiving FDA approval or discovering, developing andcommercializing product candidates before we do, which would have a material adverse impact on our business.The commercial success of our product candidates will depend upon the acceptance of these product candidates by the medical community, includingphysicians, patients and healthcare payors.The degree of market acceptance of any product candidates will depend on a number of factors, including: •demonstration of clinical safety and efficacy compared to other products; •the relative convenience, ease of administration and acceptance by physicians, patients and healthcare payors; •the prevalence and severity of any AEs; •limitations or warnings contained in the FDA-approved label for such products; •availability of alternative treatments; •pricing and cost-effectiveness; •the effectiveness of our or any collaborators’ sales and marketing strategies; •our ability to obtain hospital formulary approval; •our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement; and •the willingness of patients to pay out-of-pocket in the absence of third party coverage.20 Unless other formulations are developed in the future, we expect our compounds to be formulated in an injectable form. Injectable medications may bedisfavored by patients or their physicians in the event drugs which are easy to administer, such as oral medications, are available. If a product is approved, butdoes not achieve an adequate level of acceptance by physicians, patients and healthcare payors, we may not generate sufficient revenues from such productand we may not become or remain profitable. Such increased competition may decrease any future potential revenue for future product candidates due toincreasing pressure for lower pricing and higher discounts in the commercialization of our product.If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, wemay be unable to generate any revenues.We currently do not have an organization for the sales, marketing and distribution of pharmaceutical products and the cost of establishing andmaintaining such an organization may exceed the cost-effectiveness of doing so. In order to market any products that may be approved, we must build oursales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. With respect to certain ofour current programs as well as future programs, we may rely completely on an alliance partner for sales and marketing. In addition, we intend to enter intostrategic alliances with third parties to commercialize other product candidates, including in markets outside of the United States or for other large marketsthat are beyond our resources. Although we intend to establish a sales organization if we are able to obtain approval to market any product candidates forniche markets in the United States, we will also consider the option to enter into strategic alliances for future product candidates in the United States ifcommercialization requirements exceed our available resources. This will reduce the revenue generated from the sales of these products.Our current and any future strategic alliance partners may not dedicate sufficient resources to the commercialization of our product candidates or mayotherwise fail in their commercialization due to factors beyond our control. If we are unable to establish effective alliances to enable the sale of our productcandidates to healthcare professionals and in geographical regions, including the United States, that will not be covered by our own marketing and salesforce, or if our potential future strategic alliance partners do not successfully commercialize the product candidates, our ability to generate revenues fromproduct sales will be adversely affected.If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able togenerate sufficient product revenue and may not become profitable. We will be competing with many companies that currently have extensive and well-funded marketing and sales operations. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable tocompete successfully against these more established companies.If we obtain approval to commercialize any approved products outside of the United States, a variety of risks associated with international operationscould materially adversely affect our business.If we obtain approval to commercialize any approved products outside of the United States, we expect that we will be subject to additional risksrelated to entering into international business relationships, including: •different regulatory requirements for drug approvals in foreign countries; •differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; •reduced protection for intellectual property rights; •unexpected changes in tariffs, trade barriers and regulatory requirements; •economic weakness, including inflation, or political instability in particular foreign economies and markets; •compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; •foreign taxes, including withholding of payroll taxes; •foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doingbusiness in another country; •workforce uncertainty in countries where labor unrest is more common than in the United States;21 •production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and •business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floodsand fires.Coverage and adequate reimbursement may not be available for our product candidates, which could make it difficult for us to sell products profitably.Market acceptance and sales of any product candidates that we develop will depend on coverage and reimbursement policies and may be affected byfuture healthcare reform measures. Government authorities and third-party payors, such as private health insurers, government payors and health maintenanceorganizations, decide which drugs they will pay for and establish reimbursement levels. We cannot be sure that coverage and adequate reimbursement will beavailable for any future product candidates. Also, inadequate reimbursement amounts may reduce the demand for, or the price of, our future products. Further,one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage for the product. If reimbursement isnot available, or is available only at limited levels, we may not be able to successfully commercialize product candidates that we develop.In addition, we cannot be certain if and when we will obtain formulary approval to allow us to sell any products that we may develop andcommercialize into our target markets. Obtaining formulary approval from hospitals and from payors can be an expensive and time-consuming process.Failure to obtain timely formulary approval will limit our commercial success.There have been a number of legislative and regulatory proposals to change the healthcare system in the United States and in some foreignjurisdictions that could affect our ability to sell products profitably. These legislative and/or regulatory changes may negatively impact the reimbursementfor drug products, following approval. The availability of numerous generic treatments may also substantially reduce the likelihood of reimbursement for ourfuture products. The potential application of user fees to generic drug products may expedite the approval of additional generic drug treatments. We expectto experience pricing pressures in connection with the sale of any products that we develop, due to the trend toward managed healthcare, the increasinginfluence of health maintenance organizations and additional legislative changes. If we fail to successfully secure and maintain reimbursement coverage forour future products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our future products and our business willbe harmed.In addition, in some non-U.S. jurisdictions, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirementsgoverning drug pricing vary widely from country to country. For example, the EU provides options for its member states to restrict the range of medicinalproducts for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A memberstate may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the companyplacing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations forpharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the EU donot follow price structures of the U.S. and generally tend to be priced significantly lower.RISKS RELATED TO OUR BUSINESS OPERATIONS AND INDUSTRYOur future success depends on our ability to attract and retain key executives and to attract, retain and motivate qualified personnel.We are highly dependent on principal members of our executive team; the loss of whose services may adversely impact the achievement of ourobjectives. While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, asall of our employees are “at will” employees. Recruiting and retaining other qualified employees for our business, including scientific and technicalpersonnel, will also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As a result,competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms giventhe competition among numerous pharmaceutical companies for individuals with similar skill sets. In addition, failure to succeed in preclinical studies andclinical trials may make it more challenging to recruit and retain qualified personnel. The inability to recruit or loss of the services of any executive or keyemployee might impede the progress of our research, development and commercialization objectives.22 We may need to expand our organization and may experience difficulties in managing this growth, which could disrupt our operations.As of December 31, 2017 we had 60 employees. In the future we may expand our employee base to increase our managerial, scientific, operational,commercial, financial and other resources and to hire more consultants and contractors. Future growth would impose significant additional responsibilities onour management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, ourmanagement may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time tomanaging these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in ourinfrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Ourexpected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additionalproduct candidates. Moreover, if our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability togenerate and/or grow revenues could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our abilityto commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insidertrading.We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with theregulations of the FDA and non-U.S. regulators, provide accurate information to the FDA and non-U.S. regulators, comply with healthcare fraud and abuselaws and regulations in the United States and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular,sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct,kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing andpromotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use ofinformation obtained in the course of clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation. We have adopted acode of conduct, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity maynot be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuitsstemming from a failure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful in defendingourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrativepenalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, additional reporting requirements and/oroversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance, disgorgement,imprisonment, and contractual damages.We may reincorporate in the U.S. and such reincorporation may result in disruptions to our business or otherwise materially harm our results of operationsor financial condition. In addition, such reincorporation may result in taxes imposed on us or on our shareholders.Arcturus Therapeutics Ltd. is incorporated in Israel, while all of our offices, assets, management, board members and most of our business partners arelocated in the United States. Accordingly, we may seek to reincorporate in Delaware or another jurisdiction in the United States, while maintaining ourNasdaq listing. Such reincorporation may require a significant amount of time, cost and focus from management and other employees, which may divertattention from our research and commercial activities. If any reincorporation activities we undertake in the future fail to achieve some or all of the expectedbenefits therefrom, our business, results of operations and financial condition could be materially and adversely affected.In addition, a reincorporation of the company will be subject to all corporate approvals, which may include an approval of our shareholders, and, suchreincorporation may result in certain shareholders recognizing taxable income in the jurisdiction in which such shareholders are tax residents or in, in certaincases, in which their members or partners are resident. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of thecompany after the reincorporation. If a plan to reincorporate the company is adopted and executed, we do not intend to make any cash distributions toshareholders to pay such taxes. A reincorporation of the company may also result in income recognition by, and tax liability for, the company. Such a taxliability could reduce our ability to fund our research and development activities or otherwise fund our business.23 Certain current and future relationships with customers and third-party payors as well as certain of our business operations may be subject, directly orindirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws. If we are unable tocomply, or have not fully complied, with such laws, we could face criminal sanctions, civil penalties, contractual damages, reputational harm anddiminished profits and future earnings.If we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations may bedirectly, or indirectly through our customers, further subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act. These laws may impact, among other things, our proposed sales, marketing and education programs. Inaddition, we may be subject to patient privacy regulation by the federal government and by the U.S. states and foreign jurisdictions in which we conduct ourbusiness. The healthcare laws and regulations that may affect our ability to operate include: •the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving,offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual, or the purchase orrecommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaidprograms; •federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which prohibit, among otherthings, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, includingMedicare or Medicaid, that are false or fraudulent; •the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit,among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; •HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their implementingregulations, which imposes certain requirements on certain types of individuals and entities, such as healthcare providers, health plans andhealthcare clearing houses, known as “covered entities,” as well as their “business associates”, independent contractors or agents of coveredentities that receive or obtain individually identifiable health information in connection with providing a service on behalf of a covered entity,relating to the privacy, security and transmission of individually identifiable health information; •the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for whichpayment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to theCenters for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians, and furtherrequires applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interestsheld by physicians and their immediate family members; and •state and foreign law equivalents of each of the above federal laws, such as: anti-kickback and false claims laws which may apply to items orservices reimbursed by any third party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with thepharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; statelaws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcareproviders or marketing expenditures; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreignlaws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant waysand may not have the same effect, thus complicating compliance efforts.In addition, the European Union, or EU, has established its own data security and privacy legal framework, including but not limited to Directive95/46/EC, or the Data Protection Directive. The Data Protection Directive will be replaced starting in May 2018 with the recently adopted European GeneralData Protection Regulation, or GDPR, which contains new provisions specifically directed at the processing of health information, higher sanctions andextra-territoriality measures intended to bring non-EU companies under the regulation. We anticipate that over time we may expand our business operationsto include additional operations in the EU, including potentially conducting preclinical and clinical trials. With such expansion, we would be subject toincreased governmental regulation in the EU countries in which we might operate, including the GDPR. 24 If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may besubject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaidand other government healthcare programs, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement orsimilar agreement to resolve allegations of non-compliance, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits andfuture earnings, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results ofoperations.Recent and future healthcare legislation may further impact our business operations.The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change thehealthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payors in the United States and elsewhere,there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expandingaccess. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislativeinitiatives. For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of2010, or collectively the ACA, was enacted, which made a number of substantial changes in the way healthcare is financed by both governmental and privateinsurers. Since its passage, there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the Trumpadministration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signed two Executive Orders and other directivesdesigned to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated bythe ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passedcomprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law. On December 22, 2017,President Trump signed into law H.R. 1, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscalyear 2018,” informally titled the Tax Cuts and Jobs Act, which significantly revises the U.S. Internal Revenue Code of 1986, as amended (the Code). The TaxCuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA oncertain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.”Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation ofcertain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed oncertain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan BudgetAct of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discountthat is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonlyreferred to as the “donut hole.” As a result, there is significant uncertainty regarding future healthcare reform and its impact on our operations.Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost ofprescription drugs and biologics. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, andreform government program reimbursement methodologies for products. At the federal level, the Trump administration’s budget proposal for fiscal year 2019contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example,measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices underMedicaid, and to eliminate cost sharing for generic drugs for low-income patients. While any proposed measures will require authorization throughadditional legislation to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/oradministrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed tocontrol pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product accessand marketing cost disclosure and transparency measures, and, in some cases, to encourage importation from other countries and bulk purchasing.We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement,and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or othergovernment-funded programs may result in a similar reduction in payments from private payors.25 We cannot predict what healthcare reform initiatives may be adopted in the future. Further federal, state and foreign legislative and regulatorydevelopments are likely, and we expect ongoing initiatives to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipatedrevenues from product candidates that we may successfully develop and for which we may obtain regulatory approval and may affect our overall financialcondition and ability to develop product candidates.We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability and costs.The use of our product candidates in future clinical trials and the sale of any products for which we obtain marketing approval exposes us to the risk ofproduct liability claims. Product liability claims might be brought against us by consumers, healthcare providers, pharmaceutical companies or others sellingor otherwise coming into contact with our products. For example, unanticipated adverse effects could result from the use of our future products or productcandidates which may result in a potential product liability claim. If we cannot successfully defend against product liability claims, we could incursubstantial liability and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in: •impairment of our business reputation; •withdrawal of clinical trial participants; •costs due to related litigation; •distraction of management’s attention from our primary business; •substantial monetary awards to patients or other claimants; •the inability to commercialize our product candidates; and •decreased demand for our product candidates, if approved for commercial sale.We plan to obtain product liability insurance relating to the use of our therapeutics in future clinical trials. However, such insurance coverage may notbe sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive and in the future wemay not be able to obtain or maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and whenwe obtain marketing approval for product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, wemay be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. On occasion, large judgments have beenawarded in class action lawsuits based on drugs that had unanticipated adverse effects. A successful product liability claim or series of claims brought againstus could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business.Cyber security risks and the failure to maintain the confidentiality, integrity, and availability of our computer hardware, software, and Internetapplications and related tools and functions could result in damage to our reputation and/or subject us to costs, fines or lawsuits.Our business requires manipulating, analyzing and storing large amounts of data. In addition, we rely on a global enterprise software system to operateand manage our business. We also maintain personally identifiable information about our employees. Our business therefore depends on the continuous,effective, reliable, and secure operation of our computer hardware, software, networks, Internet servers, and related infrastructure. To the extent that ourhardware or software malfunctions or access to our data by internal research personnel is interrupted, our business could suffer. The integrity and protection ofour employee and company data is critical to our business and employees have a high expectation that we will adequately protect their personal information.The regulatory environment governing information, security and privacy laws is increasingly demanding and continues to evolve. Maintaining compliancewith applicable security and privacy regulations may increase our operating costs. Although our computer and communications hardware is protectedthrough physical and software safeguards, it is still vulnerable to fire, storm, flood, power loss, earthquakes, telecommunications failures, physical or softwarebreak-ins, software viruses, and similar events. These events could lead to the unauthorized access, disclosure and use of non-public information. Thetechniques used by criminal elements to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areasof the world. As a result, we may not be able to address these techniques proactively or implement adequate preventative measures. If our computer systemsare26 compromised, we could be subject to fines, damages, litigation and enforcement actions, and we could lose trade secrets, the occurrence of which could harmour business. In addition, any sustained disruption in internet access provided by other companies could harm our business.Business interruptions could delay us in the process of developing our future products.Our headquarters are located in San Diego County. We are vulnerable to natural disasters such as earthquakes and wild fires, as well as other eventsthat could disrupt our operations. We do not carry insurance for earthquakes or other natural disasters and we may not carry sufficient business interruptioninsurance to compensate us for losses that may occur. Any losses or damages we incur could have a material adverse effect on our business operations.RISKS RELATED TO OUR ORDINARY SHARESThe market price of our Ordinary Shares may be highly volatile.Since our merger on November 15, 2017 through May 9, 2018, our closing share price as reported on The Nasdaq Global Market (“Nasdaq”), hasranged from $4.91 to $10.22. The trading price of our Ordinary Shares is likely to continue to be volatile.Our share price could be subject to wide fluctuations in response to a variety of factors, including the following: •adverse results or delays in preclinical studies or clinical trials; •inability to obtain additional funding; •ongoing litigation or adverse rulings in relation to our proxy and shareholder litigation and litigation with our former chief executive officer andother former executives; •any delay in filing an IND or NDA for any of our product candidates and any adverse development or perceived adverse development with respectto the FDA’s review of that IND or NDA; •failure to maintain our existing strategic alliances or enter into new alliances; •failure of our strategic alliance partners to elect to develop and commercialize product candidates under our alliance agreements or the terminationof any programs under our alliance agreements; •failure by us or our licensors and strategic alliance partners to prosecute, maintain or enforce our intellectual property rights; •failure to successfully develop and commercialize our product candidates; •changes in laws or regulations applicable to our preclinical and clinical development activities, product candidates or future products; •inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; •adverse regulatory decisions; •introduction of new products, services or technologies by our competitors; •failure to meet or exceed financial projections we may provide to the public; •failure to meet or exceed the estimates and projections of the investment community; •the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;27 •announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic alliance partners or ourcompetitors; •disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection forour technologies; •additions or departures of key scientific or management personnel; •significant lawsuits, including patent or licensing matters; •changes in the market valuations of similar companies; •sales of our Ordinary Shares by us or our shareholders in the future; and •trading volume of our Ordinary Shares.In addition, companies trading in the stock market in general, and Nasdaq in particular, have experienced extreme price and volume fluctuations thathave often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect themarket price of our Ordinary Shares, regardless of our actual operating performance.We are an “emerging growth company,” and the reduced reporting requirements applicable to emerging growth companies could make our OrdinaryShares less attractive to investors.We are an “emerging growth company,” as defined in the JOBS Act. As an emerging growth company, we may take advantage of exemptions fromvarious reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required tocomply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and delaying adopting new orrevised accounting standards until such time as those standards apply to private companies. We expect that we will be an emerging growth company untilDecember 31, 2018, although circumstances could cause us to lose that status earlier. We cannot predict if investors will find our Ordinary Shares lessattractive because we may rely on these exemptions. If some investors find our Ordinary Shares less attractive as a result, there may be a less active tradingmarket for our Ordinary Shares and our share price may be more volatile.Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards that have different effective dates forpublic and private companies until those standards apply to private companies. We have elected to use this extended transition period. As a result of thiselection, our timeline to comply with these standards will in many cases be delayed as compared to other public companies that are not eligible to takeadvantage of this election or have not made this election. Therefore, our financial statements may not be comparable to those of companies that comply withthe public company effective dates for these standards.In addition, if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new orrevised accounting standards. As a result, changes in rules of U.S. generally accepted accounting principles or their interpretation, the adoption of newguidance or the application of existing guidance to changes in our business could significantly affect our financial position and results of operations.The requirements of being a publicly traded company may strain our resources and divert management’s attention.As a publicly traded company, we have incurred, and will continue to incur, significant legal, accounting and other expenses that we did not incur as aprivate company. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and Nasdaq have imposed various requirementson public companies. In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There aresignificant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules andregulations in these areas such as “say on pay” and proxy access. As an “emerging growth company” we are permitted to implement many of theserequirements over a longer period and up to five years from the pricing of our initial public offering. We have taken advantage of this new legislation butcannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses.Shareholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantialnew regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in28 which we operate our business in ways we cannot currently anticipate. Our management and other personnel will need to devote a substantial amount of timeto these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activitiesmore time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain directorand officer liability insurance and we may be required to incur substantial costs to maintain our current levels of such coverage. In addition, most of ourpersonnel consists of the Arcturus Therapeutics, Inc. employees prior to the merger, some of whom may not have previously managed and operated a publiccompany. These employees will need to devote substantial time to gaining expertise regarding operations as a public company and compliance withapplicable laws and regulations including the costs associated with the filing requirements under Section 16 of the Exchange Act.Changes or modifications in financial accounting standards, including those related to revenue recognition, may harm our results of operations.From time to time, the Financial Accounting Standards Board, or FASB, either alone or jointly with other organizations, promulgates new accountingprinciples that could have an adverse impact on our financial position, results of operations or reported cash flows. In May 2014, the FASB issuedAccounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount ofrevenue when promised goods or services to customers. The standard requires a company to recognize revenue to depict the transfer of goods or services tocustomers in the amount that reflects the consideration it expects to be entitled to receive in exchange for those goods or services. In August 2015, the FASBissued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of the newstandard from January 1, 2017 to January 1, 2018, and January 1, 2019 for private companies. The FASB also agreed to allow entities to choose to adopt thestandard as of the original effective date. In March 2016, the FASB issued additional ASUs which clarified certain aspects of the new guidance. Since we arean “emerging growth company" and opt to defer the adoption of new or revised accounting standards until such time as those standards apply to privatecompanies, we will adopt the new standard for the year beginning January 1, 2019. We have not yet finalized our assessment of the impact of the newstandard on our results of operations, internal controls and disclosures. Any difficulties in implementing this standard, or in adopting or implementing anyother new accounting standard, and to update or modify our internal controls as needed on a timely basis, could result in our failure to meet our financialreporting obligations, which could result in regulatory discipline and harm investors’ confidence in us. Finally, if we were to change our critical accountingestimates, including those related to the recognition of collaboration revenue, our operating results could be significantly affected.Sales of a substantial number of our Ordinary Shares in the public market by our existing shareholders could cause our share price to fall.If our existing shareholders sell, or indicate an intention to sell, substantial amounts of those Ordinary Shares in the public market, the trading price ofour Ordinary Shares could decline. In particular, the former shareholders, warrantholders and noteholders of Arcturus Therapeutics, Inc. received an aggregateof 6,631,712 of our Ordinary Shares pursuant to the merger in an unregistered transaction. Those shares remain restricted from resale under the Securities Actof 1933, as amended, or the Securities Act, for a six-month period following the closing of the merger pursuant to Rule 144 under the Securities Act. Oncethose restrictions lapse, those shareholders will be eligible to sell those shares in the public market without restriction, except for shareholders who aredeemed “affiliates” of the Company under Rule 144 under the Securities Act. In addition, Ordinary Shares that are either subject to outstanding options orreserved for future issuance under our employee benefit plans are or may become eligible for sale in the public market to the extent permitted by theprovisions of various vesting schedules and Rule 144 under the Securities Act. If these Ordinary Shares are sold, or if it is perceived that they will be sold, inthe public market, that could create downward pressure on the trading price of our Ordinary Shares and cause the trading price to decline.Future sales and issuances of our Ordinary Shares or rights to purchase Ordinary Shares, including pursuant to our equity incentive plans, could result inadditional dilution of the percentage ownership of our shareholders and could cause our share price to fall.We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capitalby issuing equity securities, our shareholders may experience substantial dilution. Pursuant to our 2010 Incentive Option Plan, or the 2010 Plan, ourmanagement is authorized to grant options and other equity-based awards to our employees, directors and consultants. We may sell Ordinary Shares,convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time, any of which may resultin material dilution to investors and/or our existing shareholders. New investors could also be issued securities with rights superior to those of our existingshareholders.29 We may be unable to comply with the applicable continued listing requirements of Nasdaq.Our Ordinary Shares are currently listed on Nasdaq. In order to maintain this listing, we must satisfy minimum financial and other continued listingrequirements and standards, including a minimum closing bid price requirement for our Ordinary Shares of $1.00 per share. There can be no assurance that wewill be able to comply with the applicable listing standards. For example, if we were to fail to meet the minimum bid price requirement for 30 consecutivebusiness days, we could become subject to delisting. Although Nasdaq may provide us with a compliance period in which to regain compliance with theminimum bid price requirement, we cannot assure you that we would be able to regain compliance within the period provided by Nasdaq. In order to regaincompliance with such requirement, the closing bid price of our Ordinary Shares would need to meet or exceed $1.00 per share for at least 10 consecutivebusiness days during the compliance period. If we were not able to regain compliance within the allotted compliance period for this requirement or any otherapplicable listing standard, including any extensions that may be granted by Nasdaq, our Ordinary Shares would be subject to delisting. In the event that ourOrdinary Shares are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our Ordinary Shares could beconducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTCBulletin Board. In such event, it could become more difficult to dispose of, or obtain accurate price quotations for our Ordinary Shares and there would likelyalso be a reduction in our coverage by securities analysts and the news media, which could cause the price of our Ordinary Shares to decline further.Our business and the market price of our ordinary shares could be negatively affected as a result of a proxy contest.On February 1, 2018, Mr. Payne, the Company’s former President and Chief Executive Officer, was terminated by the Company for cause. On February12, 2018, Mr. Payne wrote a letter to the Company’s board of directors demanding that the Company hold an extraordinary general meeting ofshareholders. On March 11, 2018, the Company announced that it would hold an extraordinary general meeting of shareholders on May 7, 2018 as a result ofMr. Payne’s demand. On April 8, 2018, upon the recommendation of the Executive Committee of the Company’s board of directors, the board of directorsapproved postponing the extraordinary general meeting.On May 13, 2018, the District Court at Tel Aviv ruled on a number of issues, including regarding the motion to extend the temporary restraining order,and ordered the Company to convene a Board meeting within seven days, and to summon an extraordinary general meeting within 35 days from that date.See Item 8.A. “Legal Proceedings” and Item 5.A. “Recent Developments” for additional information.The Company’s board of directors has recommended that shareholders vote against the removal of the current directors and against the election of Mr.Payne’s nominees, and the Company is soliciting proxies from shareholders on this basis. Our business, operating results or financial condition could beharmed by this proxy contest because, among other things: •responding to the proxy contest is costly and time-consuming, is a significant distraction for our board of directors, management and employees,and diverts the attention of our board of directors and senior management from the pursuit of our business strategy, which could adversely affectour results of operations and financial condition; •perceived uncertainties as to our future direction, our ability to execute on our strategy, or changes to the composition of our board of directors orsenior management team may lead to the perception of a change in the direction of our business, instability or lack of continuity which may beexploited by our competitors, and may result in the loss of current and prospective employees, customers, licensees, suppliers and otherconstituencies important to our success, which could adversely affect our results of operations and financial condition; and •the expenses for legal and advisory fees and administrative and associated costs incurred in connection with responding to the proxy contest andthe related litigation may be substantial.In addition, the market price of our ordinary shares could be subject to significant fluctuation or otherwise be adversely affected by the uncertaintiesdescribed above or the outcome of the proxy contest.We are treated as a U.S. corporation for U.S. federal tax purposes.Pursuant to Section 7874 of the Code, we are treated as a U.S. corporation for U.S. federal income tax purposes. As a result, we are subject to U.S.federal corporate income tax as if we were incorporated in the United States. Shareholders should consult their tax advisers regarding the tax consequences ofholding our Ordinary Shares based on their particular circumstances.30 The recently enacted U.S. federal income tax reform bill could adversely affect our business and financial condition.As noted above, on December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, which significantly revises the Code. The TaxCuts and Jobs Act, among other things, contains significant changes to U.S. federal corporate taxation, including reduction of the corporate tax rate from atop marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain smallbusinesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, onetime taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certainimportant exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying orrepealing many business deductions and credits. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the Tax Cuts and JobsAct is uncertain and our business and financial condition could be adversely affected. In addition, it is uncertain if and to what extent various states willconform to the newly enacted federal tax law. The impact of the Tax Cuts and Jobs Act on holders of our Ordinary Shares is also uncertain and could beadverse. We urge our shareholders to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investingin or holding our Ordinary Shares.As a foreign private issuer, we are permitted and actually do follow certain home country corporate governance practices instead of otherwise applicableSEC and Nasdaq requirements, which may result in less protection than is accorded to investors under rules applicable to domestic U.S. issuers.We expect that we will be a foreign private issuer until January 1, 2019. As a foreign private issuer, we are permitted, and actually do follow certainhome country corporate governance practices instead of those otherwise required under the Listing Rules of the Nasdaq Stock Market (the “Nasdaq ListingRules”) for domestic U.S. issuers. For instance, we follow home country practice in Israel with regard to, among other things, director nomination proceduresand approval of compensation of officers. In addition, we may follow our home country law instead of the Nasdaq Listing Rules that require that we obtainshareholder approval for certain dilutive events, such as the establishment or amendment of certain equity based compensation plans, an issuance that willresult in a change of control of the company, a public offering involving issuances of a 20% or greater interest in the company, and certain acquisitions of thestock or assets of another company. Following our home country governance practices as opposed to the requirements that would otherwise apply to a U.S.company listed on Nasdaq may provide less protection to you than what is accorded to investors under the Nasdaq Listing Rules applicable to domestic U.S.issuers.In addition, as a foreign private issuer, we are exempt from the rules and regulations under the Exchange Act related to the furnishing and content ofproxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained inSection 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statementswith the SEC as frequently or as promptly as domestic U.S. issuers whose securities are registered under the Exchange Act. Also, although the IsraeliCompanies Law regulations require us to disclose the annual compensation of our five most highly compensated senior officer holders on an individualbasis, this disclosure is not as extensive as that required of a U.S. domestic issuer. For example, this disclosure required under Israeli law is limited tocompensation paid in the immediately preceding year without any requirement to disclose option exercises and vested stock options, pension benefits orpotential payments upon termination or change of control. These exemptions and leniencies reduce the frequency and scope of information and protectionsto which you are entitled as an investor.Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.Under the Tax Cuts and Jobs Act, U.S. federal net operating losses, or NOLs, incurred in 2018 and in future years may be carried forward indefinitely,but the deductibility of such federal NOLs is limited. It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act. To theextent that we continue to generate taxable losses for United States federal income tax purposes, unused NOLs will carry forward to offset future taxableincome (subject to any applicable limitations), if any. Under Sections 382 and 383 of the Code, as amended, if a corporation undergoes an “ownershipchange,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. We believe we may havetriggered an “ownership change” limitation at the completion of our merger with Arcturus Therapeutics, Inc. in November 2017, however we have notcompleted a study in accordance with Sections 382 and 383 of the Code to determine whether this ownership change has occurred. We may also experienceownership changes in the future as a result of subsequent shifts in our share ownership. As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liabilityto us. Similar provisions of U.S. state tax law may also apply to limit our use of accumulated state tax attributes, including our state NOLs. In addition, at thestate level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxesowed. As a result, even if we attain profitability, we may be unable to use a material portion of our NOLs and other tax attributes, which could negativelyimpact our future cash flows.31 We do not intend to pay dividends on our Ordinary Shares so any returns will be limited to the value of our shares.We have never declared or paid any cash dividends on our Ordinary Shares. We currently anticipate that we will retain future earnings for thedevelopment, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Moreover, theIsraeli Companies Law 5759 – 1999, or the Israeli Companies Law, imposes certain restrictions on our ability to declare and pay dividends. See Item 10.B.“Memorandum and Articles of Association – Rights, Preferences and Restrictions of Shares – Dividend and Liquidation Rights” for additional information.Any return to shareholders will therefore be limited to the appreciation of their shares.RISKS RELATED TO ISRAELI LAW AND OUR OPERATIONS IN ISRAELProvisions of Israeli law may make it easy for our shareholders to demand that we convene a shareholders meeting, and/or allow shareholders to convenea shareholder meeting without the consent of our management, which may disrupt our management's ability to run our company.Section 63(b) of the Israeli Companies Law may allow any one or more of our shareholders holding at least 5% of our voting rights to demand that weconvene an extraordinary shareholders meeting. Also, in the event that we deny to convene an extraordinary shareholders meeting pursuant to such a request,Section 64 of the Israeli Companies Law provides that such shareholders may independently convene an extraordinary shareholders meeting and require usto cover the costs. If our shareholders decide to exercise these rights in a way inconsistent with our management's strategic plans, our management's ability torun our company may be disrupted, and this process may entail significant costs to us.Provisions of Israeli law and our amended and restated articles of association may delay, prevent or otherwise impede a merger with, or an acquisition of,our company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals fortransactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. Forexample, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging companywith the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approvedthe merger. In addition, a majority of each class of securities of the target company must approve a merger. Moreover, a tender offer for all of a company'sissued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at least 95% of the issued share capital.Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, followingconsummation of the tender offer, the acquirer would hold at least 98% of our outstanding shares. Furthermore, the shareholders, including those whoindicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, petition an Israeli court to alterthe consideration for the acquisition, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisalrights.Furthermore, Israeli tax considerations may make potential transactions unappealing to us or to our shareholders whose country of residence does nothave a tax treaty with Israel exempting such shareholders from Israeli tax. See Item 10.E. “Taxation – Israeli Taxation Considerations” for additionalinformation.Our amended and restated articles of association also contain provisions that could delay or prevent changes in control or changes in our managementwithout the consent of our Board of Directors. These provisions include the following: •no cumulative voting in the election of directors, which limits the ability of minority shareholders to elect director candidates; and •the right of our Board of Directors to appoint a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, deathor removal of a director, which may prevent shareholders from being able to fill vacancies on our Board of Directors.As a domiciliary of Israel, our results may be adversely affected by political, economic and military instability in Israel.As an Israeli company, political, economic and military conditions in Israel may directly affect our business. Since the establishment of the State ofIsrael in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries, the Hamas militant group and the Hezbollah. Anyhostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and resultsof operations.32 In addition, since 2010 political uprisings and conflicts have arisen in various countries in the Middle East. Such instability may lead to deteriorationin the political and trade relationships that exist between the State of Israel and certain other countries. Several countries, principally in the Middle East, stillrestrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companiesif hostilities in Israel or political instability in the region continues or increases. Similarly, Israeli companies are limited in conducting business with entitiesfrom countries that are considered to be in a state of war with Israel.Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with theState of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial conditions or theexpansion of our business.It may be difficult to enforce a judgment of a U.S. court against us and the Israeli experts named herein in Israel or the United States, to assert U.S.securities laws claims in Israel or to serve process on certain of our officers and directors and these experts.We were incorporated in Israel. Therefore, a judgment obtained against us, or any directors that reside outside of the United States, including ajudgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not necessarily beenforced by an Israeli court. It also may be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities lawclaims in original actions instituted in Israel. Additionally, it may be difficult for an investor, or any other person or entity, to initiate an action with respectto U.S. securities laws in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not themost appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and notU.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, whichcan be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel thataddresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collectany damages awarded by either a U.S. or foreign court.Your rights and responsibilities as a shareholder will be governed by Israeli law, which differs in some material respects from the rights andresponsibilities of shareholders of U.S. companies.The rights and responsibilities of the holders of our Ordinary Shares are governed by our amended and restated articles of association and by Israelilaw. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders in typical U.S.-based corporations. Inparticular, a shareholder of an Israeli company has certain duties to act in good faith and fairness towards the Company and other shareholders, and to refrainfrom abusing its power in the Company. See Item 10.B. “Memorandum and Articles of Association – Shareholder Duties” for additional information. There islimited case law available to assist us in understanding the nature of this duty or the implications of these provisions. These provisions may be interpreted toimpose additional obligations and liabilities on holders of our Ordinary Shares that are not typically imposed on stockholders of U.S. corporations.We are subject to anti-takeover provisions that could delay or prevent our acquisition by another entity.Provisions of Israeli corporate and tax law and of our amended and restated articles of association may have the effect of delaying, preventing ormaking more difficult any merger or acquisition of us. In addition, any merger or acquisition of us may require the prior consent of the Israel InnovationAuthority (formerly known as the Office of the Chief Scientist), as well as the Investment Center of the Israeli Ministry of Industry, Trade and Employment, orthe Investment Center. Israeli law regulates mergers, votes required to approve a merger, acquisition of shares through tender offers and transactionsinvolving significant shareholders. Any of these provisions may make it more difficult to acquire us. Accordingly, our acquisition by another entity could bedelayed or prevented even if it would be beneficial to our shareholders.ITEM 4.INFORMATION ON THE COMPANY4.A.History and developmentOur legal and commercial name is Arcturus Therapeutics Ltd., and we are the product of the 2017 merger of Arcturus Therapeutics, Inc. and AlcobraLtd. Arcturus Therapeutics, Inc. was incorporated in Delaware in 2013, and Alcobra Ltd. was incorporated in Israel in 2008. On November 15, 2017, the twocompanies completed a merger (the “merger”) pursuant to which Arcturus Therapeutics, Inc. became a wholly-owned subsidiary of Alcobra Ltd., and AlcobraLtd. changed its name to Arcturus Therapeutics Ltd. While Alcobra Ltd. was the legal acquirer in the transaction, Arcturus Therapeutics, Inc. was deemed theaccounting acquirer. Also, as part of the merger, the Ordinary Shares of Arcturus Therapeutics Ltd. were listed on Nasdaq under the trading symbol “ARCT,”in place of the previous listing of the Ordinary Shares of Alcobra Ltd, which had traded under the symbol “ADHD.” The business plan of the post-mergercompany is that of Arcturus Therapeutics, Inc. As an Israeli company, we are subject to the Israeli Companies Law, 5759-1999, or the Israeli Companies Law.33 Our principal place of business is located at 10628 Science Center Drive, Suite 250, San Diego, California, and our telephone number there is (858)900-2660. Our agent in the United States is Arcturus Therapeutics, Inc., whose address is that of our San Diego, California headquarters. Our World Wide Webaddress is www.arcturusrx.com. The information contained on that web site is not a part of this annual report.We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified by the JOBS Act. Assuch, we are eligible to, and intend to, take advantage of certain exemptions from various reporting requirements applicable to other public companies thatare not “emerging growth companies,” such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-OxleyAct of 2002. We could remain an “emerging growth company” for up to five years from our initial public offering in 2013, or, if earlier, until the earliest of(a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.07 billion, (b) the date that we become a “large accelerated filer” asdefined in Rule 12b-2 under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of ourOrdinary Shares that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, or(c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the preceding three-year period.For additional information relating to the development of our company, see Item 4.B. “Business Overview.” For additional information concerningour company’s capital expenditures over the course of the last three fiscal years, see Item 5 B. “Liquidity and Capital Resources – Capital Expenditures inLast Three Fiscal Years.” 4.B.Business overviewNucleic Acid Medicines and MarketsThe World Health Organization estimates there are 10,000 monogenic diseases. Monogenic diseases are caused by mutations in a single gene. Thesedisorders affect 1/100 people at birth, and between 250 and 350 million people worldwide live with a rare genetic disease. Many of these diseases causemoderate to severe symptoms and significantly decrease the quality of life and life expectancy for patients. There are no FDA-approved drugs for over 95% ofknown rare genetic diseases. This is a significant unmet medical need.Nucleic acid medicines have the potential to treat many diseases caused by genetic mutations including diseases that cannot be treated byconventional drugs such as small molecules and biologics. DNA carries the blueprint from which all proteins necessary for life are produced inside cells. Eachgene has the code needed to make one or more proteins. Various types of nucleic acids, including messenger RNA (“mRNA”), small interfering RNA(“siRNA”) and microRNA, work together to control how the genes contained in DNA are translated into proteins.mRNA or DNA has the potential to be used as protein replacement therapy to treat diseases caused by a lack of protein, or by defective proteins, suchas cystic fibrosis. If a gene has a mutation that stops it from producing protein or causes it to produce defective proteins, mRNA or DNA medicines may beused to ensure that a healthy version of the missing protein is produced. Nucleic acid vaccines are also being evaluated for their potential in infectiousdisease and oncology, using mRNA or DNA to express an antigen and trigger an immune response.siRNA medicines can treat viral infections like HBV and diseases like Huntington’s disease that are caused by malfunctioning proteins. Each siRNAbinds perfectly to one mRNA which produces a result whereby the resulting cell destroys the mRNA. This mechanism, called RNA interference (“RNAi”), canbe used to prevent mutated genes from being translated into defective proteins that cause disease. It can also stop viruses from replicating inside the body.Naked RNA and DNA are quickly degraded by enzymes in the bloodstream and can cause a strong immune response. Therefore, nucleic acidmedicines developed for systemic use must use a vector to deliver the nucleic acid to target cells. Viral delivery vectors and lipid-mediated delivery systemsare the two main delivery systems used in nucleic acid therapeutics development.Viral delivery vectors are very effective at delivering DNA to cells. However, they can cause liver damage and activate an immune response in humanpatients. Viral vectors may also cause accidental mutations in host DNA. Patients treated with viral vectors can also develop antibodies against these vectorsthat make the treatment less effective over time.Lipid-mediated delivery systems are the most common non-viral vectors because they are biocompatible and do not cause insertional mutagenesis.They can also be manipulated to target specific cells in the body. Despite these advantages, older lipid-mediated delivery systems also stimulate adverseimmune responses and cause liver damage in patients.34 Who We AreWe are a preclinical nucleic acid medicines company focused on developing therapeutics for rare, infectious, fibrotic, and respiratory diseases withsignificant unmet medical needs. We have two proprietary technologies with the potential to address the major hurdles in nucleic acid medicinedevelopment, namely the effective and safe delivery of nucleic acids to disease-relevant target tissues. We believe the versatility of our platform to targetmultiple tissues, its compatibility with various nucleic acid therapeutic modalities, and our expertise developing scalable manufacturing processes puts us ina good position to deliver on the next generation of nucleic medicines. •We have developed a novel lipid-mediated delivery system called Lipid-enabled and Unlocked Nucleomonomer Agent modified RNA(“LUNAR®”). Drawing from a library of over 150 proprietary lipids, LUNAR can be flexibly designed to deliver nucleic acids to many clinicallyimportant cells and tissues, including liver hepatocytes, liver stellate cells, myocytes and lung cells, resulting in knockdown or upregulation oftarget proteins. Our lipids are pH-sensitive and designed to be biodegradable, minimizing lipid accumulation in cells after multiple dosing andpotentially improving chronic safety. •Our proprietary Unlocked Nucleomonomer Agent (“UNA”) oligomer chemistry technology can be incorporated into multiple types of nucleic acidmedicines. UNA has the potential to improve the efficacy and/or safety profile of nucleic acid medicines.Our LUNAR and UNA technologies are wholly-owned by us and covered by our patent portfolio of 140 patents and patent applications, issued in theUnited States, China, Europe, Japan and other countries. We believe that we can use our technologies to develop medicines in multiple nucleic acid-basedtherapeutic modalities: (1) mRNA, DNA, and replicon – up-regulation of proteins for therapeutics or vaccines; (2) siRNA, microRNA, and antisenseoligonucleotides – knockdown of genes overexpressed in disease; and (3) CRISPR, TALEN, zinc finger proteins, and meganucleases – gene editing of errantgenes. We are using our proprietary technology to develop nucleic acid medicines to treat diseases with clear unmet medical needs, accelerated clinical pathsand commercial opportunities. Our preclinical pipeline currently has seven active preclinical drug discovery and development programs. This includesprograms which are wholly-owned, as well as programs in partnership with Ultragenyx Pharmaceutical, Inc. (“Ultragenyx”), Takeda Pharmaceutical CompanyLimited (“Takeda”), Janssen Pharmaceuticals, Inc, one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”), Synthetic Genomics, Inc.(“Synthetic Genomics” or “SGI”) and CureVac AG (“CureVac”). •The LUNAR-OTC program is developing mRNA compounds to treat ornithine transcarbamylase (“OTC”) deficiency, a life-threatening geneticdisease that affects approximately 1 in 60,000 people. This is a co-development program with CureVac, and we have achieved preclinical proof ofconcept for LUNAR-OTC in a mouse model of the disease. •The LUNAR-CF program is developing mRNA compounds to replace dysfunctional cystic fibrosis transmembrane conductance regulator(“CFTR”) protein in cystic fibrosis (“CF”) patients. CF is a common genetic disease in the United States, and approximately 1,000 patients arenewly diagnosed each year. This program is supported by CFFT. We have demonstrated proof of concept for LUNAR delivery to lung epithelialcells in vivo and shown activity of an optimized CFTR mRNA in cultured cells. •The LUNAR-RLD program is an internal research program focused on target validation of multiple pipeline LUNAR-mRNA program candidates. Arare liver disease will be selected as a future development program based on these efforts. •We have partnered with Ultragenyx to develop up to ten mRNA therapeutic candidates for certain rare disease targets. LUNAR-GSDIII is the firstprogram to be disclosed from the collaboration. Glycogen Storage Disease Type III (“GSD”) is caused by genetic mutations in the glycogendebranching enzyme AGL which leads to glycogen accumulation in liver and muscle. There are approximately 10,000 patients worldwide. •We have partnered with Takeda to develop nucleic acid-based therapeutic candidates for the treatment of nonalcoholic steatohepatitis (“NASH”)and other gastrointestinal (“GI”) disorders. •We have partnered with Janssen, a Johnson & Johnson company, to develop nucleic acid-based products for the treatment of hepatitis B virusinfection (“HBV”) and potentially other infectious and respiratory diseases. •We have a license and collaboration agreement with SGI focused on developing vaccines and therapeutics using their proprietary self-replicatingnucleic acid technology. We have demonstrated proof of concept in preclinical animal models for both vaccines and therapeutics.35 Our team has extensive experience in the discovery and development of nucleic acid medicines. We are led by Mark R. Herbert, Interim President. Mr.Herbert’s background includes over 15 years of experience in business and technical development of large and small molecules working across a number ofdifferent platforms and therapeutic areas, including serving as Head of U.S. Development and Sales at STA Pharmaceutical Co., Ltd. and Director ofPharmaceutical Sciences at Aragon Pharmaceuticals, Inc. He is an author or inventor on over 35 peer-reviewed manuscripts and patents and has led orcontributed to the submission of 13 investigational new drug (“IND”) applications and one new drug application (“NDA”). Also, Dr. Christine Esau serves asour Vice President of Research and Development and Dr. Priya Karmali serves as our Senior Director of Pharmaceutical Development. Dr. Esau has over 15years of experience in nucleic acid therapeutics drug discovery at Ionis Pharmaceuticals, Inc., Regulus Therapeutics, Inc. and as Chief Scientific Officer ofAptamiR Therapeutics, Inc. She performed pioneering work in microRNA biology and targeting technology development, resulting in landmark, highly citedpapers and early patent filings. Dr. Karmali has over 15 years of experience in lipid-based drug delivery systems at Nitto Denko and Regulus Therapeutics,Inc. where she led drug product development efforts for nucleic acid medicines currently in various stages of clinical trials. She is an author or inventor onover 35 scientific publications and patents. In addition, Stuart Collinson, Ph.D., serves as our Executive Chair. Dr. Collinson’s experience includes ChiefExecutive Officer of Aurora Biosciences and senior roles at GlaxoWellcome plc and Baxter International Inc.Our StrategyWe aim to leverage our proprietary and licensed intellectual property relating to LUNAR and UNA technologies to develop a pipeline of nucleic acidmedicines for rare, infectious, fibrotic and respiratory diseases. In addition to our collaborations noted above, we are focused on developing a balancedportfolio of proprietary and partnered programs to advance our preclinical candidates in a timely and cost-effective manner.Our internal programs are focused on significant unmet medical needs in rare diseases. These diseases affect between 250 and 350 million peoplearound the world. There are no drugs approved by the U.S. Food and Drug Administration (“FDA”) for over 95% of these conditions. Therefore, these diseasesrepresent both a significant unmet medical need and a large potential market. We believe the versatility of our nucleic acid development platformtechnologies gives us a distinct advantage in developing nucleic acid medicines to treat the genetic cause of rare diseases.Our novel UNA chemistry and LUNAR delivery technologies are covered by our extensive patent portfolio, and we believe that we can use ourtechnologies to enable multiple types of nucleic acid medicines. We are actively pursuing technology alliances and strategic therapeutic partnerships toaddress other targets.We continue to invest in further development of the LUNAR delivery, UNA oligomer chemistry, siRNA and mRNA technology platforms to improvetheir efficacy and safety profile and expand their applications. Our team is also exploring new nucleic acid chemistries and intellectual propertyopportunities, including locked nucleic acid (“LNA”), to expand our nucleic acid technology platform portfolio and facilitate our development of novelnucleic acid therapeutic candidates.Our business strategy includes: •Develop a portfolio of nucleic acid therapeutics to treat rare diseases and become a clinical stage company. Our initial focus is on OTCdeficiency and cystic fibrosis. We have achieved preclinical proof of concept in the LUNAR-OTC and LUNAR-CF programs, including robusttarget protein expression and functional activity in preclinical disease models. We aim to establish the infrastructure required to move theseprograms into the clinic. •Leverage our UNA and LUNAR technologies to develop therapeutics for a broad range of additional rare diseases. We believe that many otherrare diseases would be good candidates for mRNA replacement therapy or siRNA-mediated gene silencing. Given that the delivery system will besimilar across multiple programs, we anticipate that the costs and risks associated with developing new nucleic acid therapeutics for other orphandiseases will be greatly reduced. Efforts to prioritize rare liver diseases for progression to mRNA development programs are ongoing.36 •Drive existing collaborations and form new strategic collaborations that leverage our UNA and LUNAR technologies. We are in discussions withseveral biopharmaceutical firms to develop nucleic acid, gene editing and vaccine programs for various disease indications. We intend to pursuepartnerships in order to accelerate the development and maximize the market potential of our UNA and LUNAR technology platforms. Inparticular, we intend to partner with larger biopharmaceutical companies that possess market know-how and marketing capabilities to complete thedevelopment and commercialization of nucleic acid therapeutics. •Identify new chemistries and intellectual property opportunities to expand Arcturus’ nucleic acid technology platform portfolio. Our team isworking to discover and develop new nucleic acid chemistries that will complement its LUNAR and UNA technology platforms and strengthen ourability to develop novel nucleic acid therapeutic candidates for a range of unmet medical needs.Our Competitive StrengthsWe believe our proprietary UNA and LUNAR technologies, extensive intellectual property portfolio and experienced scientific team will enable us toadvance our drug candidates and existing partnerships, and further partner our technology platform to expand future development and commercialopportunities.Our competitive strengths include: •LUNAR delivery technology is not limited to a specific nucleic acid modality. Preclinical studies have shown that LUNAR delivery technology iscompatible with different types of nucleic acids, from short double-stranded siRNAs, to long single-stranded mRNAs, to double-stranded DNAmolecules. This means that we are not restricted in the types of nucleic acid medicines that we can develop. •LUNAR delivery technology is compatible with multiple routes of administration and can be targeted to diverse tissues and cell types. Preclinicalstudies in both rodents and non-human primates have shown that LUNAR can deliver nucleic acid compounds specifically to hepatocytes viaintravenous injection. Additionally, preclinical studies in rodents have shown that LUNAR can deliver nucleic acid compounds to liver stellatecells via intravenous injection, muscle cells via intramuscular injection, retinal cells via subretinal injection, and lung cells via nebulization. Thisis a clear advantage over the N-acetylgalactosamine (“GalNAc”) delivery system that can deliver a single small nucleic acid molecule tohepatocytes. GalNAc technology is utilized by companies such as Ionis Pharmaceuticals, Inc., Alnylam Pharmaceuticals, Inc., ArrowheadPharmaceuticals, Inc., Regulus Therapeutics Inc., Dicerna Pharmaceuticals, Inc. and Silence Therapeutics plc. This versatility in route ofadministration and cell type targeting, combined with the ability to use LUNAR delivery technology with many different types of nucleic acids,means that the platform can potentially be used to develop nucleic acid therapies for a range of different diseases. •LUNAR can deliver mixtures of different nucleic acids as one drug product. LUNAR can deliver mixtures containing multiple nucleic acids totarget cells in vivo, as we previously demonstrated for a combination of three HBV-targeting siRNAs which was efficacious in multiple mousemodels of HBV infection. •Ability to repeat dose. Multiple preclinical studies in rodents and non-human primates have shown no reduction in efficacy upon repeat dosing ofLUNAR formulated siRNA or mRNA. We believe this indicates that LUNAR-delivered nucleic acids may not elicit antibody or cell-mediatedimmunity that can reduce potency upon repeat dosing. •Experienced team. Our team has extensive experience in the discovery and development of nucleic acid medicines, as well as experience andknow-how in lipid-mediated delivery technology. This combination of in-house expertise uniquely positions us to develop novel nucleic aciddevelopment technologies and nucleic acid medicines. •Our intellectual property portfolio. The LUNAR and UNA technologies are wholly owned by us and covered by our patent portfolio of 140patents and patent applications, issued in the United States, China, Europe, Japan and other countries. These intellectual property assets allow us topursue nucleic acid therapeutic candidates and serve as a barrier-to-entry for competitors. •Ability to develop high barrier-to-entry products with rapid development of subsequent products with lower costs and risks. The properties of ourproprietary technologies, outlined above, allow us to develop high barrier-to-entry nucleic acid medicines. The versatility of our two developmentplatforms will allow us to develop subsequent products relatively quickly with less risk and lower costs.37 Our nucleic acid technology platformsTo address the challenges of nucleic acid medicine delivery and improve safety and tolerability in vivo, we have developed two nucleic acidtechnology platforms. We believe that our LUNAR delivery platform and UNA oligomer technology can be used together or separately to create the next-generation of safe, effective nucleic acid medicines. These technologies are wholly-owned by us and covered by our patent portfolio of 140 patents andpatent applications, issued in the United States, China, Europe, Japan and other countries.Our LUNAR approach can be paired with multiple classes of nucleic acid medicine-based therapeutics, including mRNA, self-amplifying mRNA (orreplicon), siRNA, microRNA, antisense oligonucleotides and other oligonucleotide therapeutic approaches. We can combine our technology with nucleicacids that encode for transmembrane proteins (such as transporters, GPCRs, and receptors), secreted proteins (such as hormones and antibodies), engineerednucleases (CRISPR and TALEN), engineered antigen receptors (CAR-T) and intracellular proteins (chaperones and enzymes). We are also evaluating thepotential for LUNAR to deliver DNA-based vaccines and therapeutics.Our nucleic acid delivery technology – LUNARWe have designed our LUNAR delivery platform to address major challenges with nucleic acid medicine delivery, including transfection efficiency,adverse immune reactions and liver damage. See below for a graphic representation of our LUNAR formulation, where blue spheres represent polyethyleneglycol (“PEG”) lipids and the orange, darker orange, and yellow spheres represent the proprietary Arcturus lipid excipient and other structural components(phospholipid and cholesterol). Graphic of LUNAR LUNAR formulations are a multi-component drug delivery system that utilizes a proprietary lipid, called ATX. The ATX lipid contains an ionizableamino head group and a biodegradable lipid backbone. The amino head group makes the ATX lipid pH-sensitive. At acidic pH, LUNAR lipids are positivelycharged, facilitating interaction with the negatively charged nucleic acid, enabling particle formation. At physiological pH (e.g., pH 7.4), LUNARformulations are neutrally charged. This pH-sensitivity avoids the toxicity often seen with permanently charged cationic lipid-mediated delivery vectors.Upon uptake into a cell by endocytosis, the amino head group again becomes protonated, disrupting the endosome and releasing the nucleic acid payloadinto the cytosol.38 To deliver a nucleic acid payload, the LUNAR particles associate with the cell membrane of target cells and quickly enter the cell via endocytosis,causing the cell membrane to invaginate and form an endosome. The LUNAR formulations then become entrapped in the endosomes and with increasedacidity as the endosome ages, a pH-mediated disruption enables release of the nucleic acid payload following rapid biodegradation of the LUNARcomponents. Once release of the RNA into the cytosol occurs, the translational machinery can interact with the nucleic acid and processing and/or traffickingcan then take place to make functional protein (schematic diagram below represents delivery of an mRNA payload).LUNAR-mediated delivery of RNA into cells The ATX lipid backbone is designed to be biodegradable. This prevents the lipids from accumulating inside the cell and causing toxicity. Estergroups in the ATX lipid backbone can be cleaved by esterases inside the cell once the nucleic acid payload has been released, and the resulting lipidfragments are quickly metabolized by the cell.We have generated a library of over 150 proprietary ATX lipids. ATX lipids are rationally designed to fit the application and vary depending on thetarget cell type and route of administration. Formulation screening and optimization is performed for each program to determine the optimal ATX lipid andLUNAR composition. High encapsulation efficiency was observed when LUNAR was formulated with nucleic acids of 20 to 12,000 nucleotides in length(figure below, left) and particle size was within the acceptable range to maximize targeting and efficacy (figure below, right).39 LUNAR compatibility with nucleic acids of various sizeLUNAR can be optimized to deliver nucleic acids preferentially to different cell types in the liver after intravenous delivery. When mice were treatedwith a single intravenous dose of two different LUNAR-siRNA formulations, significant target mRNA knockdown was observed in hepatocytes 72 hourspost-treatment (figure below, left). Shown in green, the composition of a different LUNAR-siRNA formulation was modified to also achieve significant targetmRNA knockdown in stellate cells, an important cell type for certain liver indications, such as NASH. The hepatocyte-targeting (formulation 1, red bars) wasalso used to formulate a green fluorescent protein (GFP) mRNA and mice were treated with a single intravenous dose (figure below, right). 24 hours later, GFPprotein was seen throughout the liver, particularly in hepatocytes.LUNAR formulations can be designed to target different cell types in the liver To demonstrate efficacy of LUNAR-mRNA in a repeat-dose setting, non-human primates were treated once weekly for four weeks with LUNAR-encapsulated EPO mRNA (figure below). EPO protein expression levels were determined 6 hours following each treatment, and elevated serum EPO levelswere maintained following each treatment.40 Repeat dose efficacy in non-human primates Proof-of concept studies were completed in mice to demonstrate LUNAR-mRNA use in oncology and infectious disease vaccine applications. Micewere treated at Day 0 (prime) and Day 21 (boost) via intramuscular delivery with 0.5 mg/kg LUNAR-encapsulated hemagglutinin mRNA (2 formulations;LUNAR 1 and LUNAR 2). At Day 35, serum titers were determined in a hemagglutination inhibition assay (figure below, left) and antigen-specific cytokineproduction was evaluated from CD8+ T-cells (figure below, right). With both formulations tested, titers between 103-104 were achieved and a significantincrease in % of TNFα and IFNα expressing cells was observed.Antigen-specific responses following IM delivery of LUNAR-mRNA in influenza vaccination mouse model41 The safety and efficacy profile of first generation LUNAR 1.0 has been most extensively characterized in rodent and non-human primates, and itsscalability for manufacturing has been demonstrated. Particle size and % RNA encapsulation were maintained in three separate 30 gram batches and in batchsizes from 50 milligrams to 30 grams (two figures below).LUNAR Scalability LUNAR Reproducibility 42 Our UNA oligomer chemistryUNAs are RNA analogues in which the C2'-C3' bond of the ribose ring is absent (figure below). UNA chemistry technology can potentially be appliedto multiple types of RNA medicines including mRNA, siRNA, microRNA and guide RNAs for gene editing. One or more UNAs can be positionedstrategically along a nucleic acid strand to manipulate the chemical properties of the molecule.RNA structure compared with UNA structure UNAs can potentially improve the efficiency and specificity of siRNA-mediated protein suppression. siRNAs are short double-stranded RNAmolecules. Once inside the cell, they become part of the RNA-induced silencing complex (“RISC”) and are split into two single siRNA strands. One of thesestrands stays with RISC and binds to any mRNA with a complementary sequence. If the wrong siRNA strand stays with RISC, it can bind to different mRNAsthan the target mRNA and therefore inhibit translation of other proteins. This is an undesired off-target effect and is one of the major barriers to developingeffective siRNA medicines. Incorporating a single UNA into siRNA molecules can make one of the strands preferentially bind to RISC improving specificity.Additionally, incorporation of UNA modifications can reduce susceptibility of the siRNA to nuclease degradation, improving the efficiency of siRNA-mediated protein suppression.We own a comprehensive suite of UNA technology patents for therapeutic and reagent use, enabling us to operate freely and to independently pursuenucleic acid therapeutic candidates. We are also actively pursuing other novel chemistry technologies with the aim of overcoming the development andtherapeutic challenges of nucleic acid medicines. Our goal is to expand our nucleic acid technology portfolio and strengthen our ability to develop safer andmore effective nucleic acid therapeutic candidates.INTERNAL DEVELOPMENT PROGRAMSWe are developing mRNA and siRNA therapeutic candidates to treat rare and global diseases through the following internal development programs.LUNAR-OTCOur most advanced research program addresses OTC deficiency, a life-threatening genetic disease that affects approximately 1 in 60,000 people. OTCdeficiency is the most common urea cycle disorder. A lack of the OTC enzyme in liver cells results in high blood ammonia levels, called hyperammonemia.This causes neurotoxicity and can lead to seizures, coma and death in untreated patients. There is no cure for OTC deficiency. Current standard of care aimsto manage symptoms and control blood ammonia levels.Together with our development partner CureVac, we are developing an mRNA replacement therapy that enables OTC patients to make healthyfunctional OTC enzyme in their liver cells. Preclinical studies have shown that our proprietary LUNAR technology safely and effectively delivers nucleicacid to liver cells in animal models.In preclinical proof of concept studies, we used our LUNAR platform to deliver target human OTC mRNA to the liver cells of a mouse model of OTCdeficiency. This treatment induced the production of human OTC enzyme at normal/physiological levels in the liver cells of treated mice and normalizedlevels of two key clinical biomarkers: blood ammonia and urinary orotic acid.43 Overview of OTC DeficiencyOTC deficiency is caused by mutations in the OTC gene which leads to a non-functional or deficient OTC enzyme. OTC is a critical enzyme in theurea cycle, which takes place in liver cells, and converts ammonia to urea. This conversion does not occur properly in patients with OTC deficiency andammonia accumulates in their blood, acting as a neurotoxin and liver toxin. This can cause severe symptoms including vomiting, headaches, coma anddeath. OTC deficiency is an inherited disease that can cause developmental problems, seizures and death in newborn babies. It is an X-linked disorder, so ismore common in boys. Patients with less severe symptoms may present later in life, as adults.There is no cure for OTC deficiency, apart from liver transplant. However, this treatment comes with significant risk of complications such as organrejection. Transplant recipients must take immunosuppressant drugs for the rest of their lives. Current standard of care for OTC patients is a low-protein dietand ammonia scavengers, such as Ravicti®, to try and prevent their bodies from accumulating ammonia. These treatments do not address the cause of thedisease.The LUNAR-OTC SolutionPatients with uncontrolled OTC deficiency have high levels of ammonia in their blood and orotic acid in their urine. Our preclinical proof of conceptstudies have shown that LUNAR-delivered human OTC mRNA can potentially reduce urinary orotic acid levels in a well-established mouse model of OTCdeficiency: OTC-spf ash mice. These mice have elevated urinary orotic acid. Because they have a small amount of residual OTC enzyme activity, they are nothyperammonemic unless challenged with a high protein diet through inhibition of the residual OTC enzyme activity. We treated OTC-spf ash mice with one intravenous dose of LUNAR-encapsulated human OTC mRNA (three lead candidate mRNA sequences tested ata low, middle, and high dose levels). As shown in the figure below, this single treatment significantly reduced urinary orotic acid levels for at least seven dayspost-treatment (n=4-6 animals per group).Urinary orotic acid levels following single administration Functional effects following repeat dosing of LUNAR-encapsulated human OTC mRNA in OTC-spf ash mice were then determined. OTC-spf ash micewere placed on a high-protein diet to induce hyperammonemia and treated with once weekly intravenous doses of LUNAR-encapsulated human OTC mRNAfor 5 weeks at 0.3 and 1.0 mg/kg with a 2-week washout period. As shown in the figure below, animals in the 1.0 mg/kg LUNAR-OTC treatment group werecompletely protected from lethality (n=10 animals per group).44 Survival of OTC-deficient mice on high protein diet following weekly LUNAR-OTC treatment LUNAR-CFThe LUNAR-CF program addresses cystic fibrosis, a progressive lung disease caused by mutations in the CFTR gene. We use our LUNAR platform todeliver normal CFTR mRNA into airway epithelial cells. This allows airway cells to produce functional CFTR protein using their native translationalmachinery and protein trafficking pathways.This approach has the potential to treat the underlying defect that causes CF (dysfunctional or absent CFTR protein) in all such patients, regardless ofmutation type.Overview of CFAccording to the National Institutes of Health, CF is the most common lethal genetic disease in the United States. Currently, more than 30,000 peopleare living with CF in the United States, 75,000 people worldwide, and approximately 1,000 people are newly diagnosed each year. There are 2,000 knownmutations in the CFTR gene. These mutations affect the function of the CFTR protein. CFTR is an ion channel that controls chloride and sodium movementin-and-out of cells. When this channel is absent or dysfunctional, thick mucus can accumulate in airways and pancreatic ducts, which can cause coughing,chronic bacterial infections, inflammation, tissue scarring, digestive problems and other serious complications. The median age of death for a person with CFin the United States is 37 years, and the cause of death is usually lung damage.There are currently no FDA-approved drugs that can treat all 2,000 CFTR mutations. The FDA has approved three CFTR modulator therapies,Kalydeco®, Orkambi® and Symdeko™, to treat fewer than 40 CF-causing mutations. These drugs do not treat the underlying genetic cause of CF, but insteadassist the mutant CFTR protein to reach the cell membrane and/or increase ion channel gating, thus increasing functional activity. For patients with othermutations, antibiotics and mucolytics are the primary standards of care. Many of these patients ultimately suffer from decreased lung function and requirelung transplant.Our LUNAR-CF SolutionWith the support of CFFT, we are developing an mRNA therapeutic to treat and prevent lung disease in CF patients. Our LUNAR-CF compoundcomprises normal CFTR mRNA encapsulated by LUNAR delivery technology. This approach is a form of protein replacement therapy as it enables lung cellsto produce normal CFTR protein.We have completed preclinical proof of concept studies, demonstrating that LUNAR is able to deliver a functional reporter mRNA efficiently intomouse lung epithelial cells and into primary lung epithelial cells in vivo (figure below). Six hours following intratracheal delivery of 0.1 mg/kg LUNAR-encapsulated green fluorescent protein (GFP) mRNA, GFP protein expression (shown in brown) is detected by immunohistochemistry in mouse lungepithelial cells of the primary bronchus and in bronchioles located in the upper and lower airways.45 In vivo targeting to lung epithelial cells following treatment with LUNAR-reporter mRNA Through optimization of the CFTR mRNA coding sequence and untranslated regions, we were also able to significantly improve CFTR expressionand demonstrate enhanced channel activity in an in vitro model system. In CFBE cells transfected with a lead candidate CFTR mRNA sequence, proteinexpression was significantly increased and the duration of activity prolonged compared to a reference CFTR mRNA which is the natural coding sequence(figure below, left). When the Arcturus lead candidate CFTR mRNA was then transfected in FRT cells, a significant increase in transepithelial conductancewas observed (figure below, right), indicating that the CFTR protein produced from the mRNA is functional. In this study, the same reference CFTR mRNAwas included and minimal functional activity was observed, indicating significant improvement of Arcturus’ mRNA design compared to the naturalsequence.CFTR protein expression (left) and functional activity (right) LUNAR-RLDWe aim to achieve functional correction of rare diseases using our proprietary LUNAR-delivered mRNA therapeutic candidates. The LUNAR-RLDprogram is an internal research program focused on target validation of multiple pipeline LUNAR-mRNA program candidates. To accomplish this goal, wehave prioritized a list of rare liver diseases. All have significant unmet medical needs and few treatment options are available to patients. Arcturus will use itsLUNAR delivery platform to deliver normal mRNA into target cells of interest, allowing these cells to produce functional protein using their nativetranslational machinery and protein trafficking pathways.COLLABORATION AGREEMENTSArcturus has a number of externally funded development partnerships. We are collaborating with Janssen to develop nucleic acid-based candidates forHBV and potentially other infectious or respiratory diseases, with SGI to enable their self-replicating RNA technology for animal and human vaccines andtherapeutics, with Takeda to develop nucleic acid therapeutic candidates for NASH and other gastrointestinal disorders, with Ultragenyx to develop mRNAtherapeutic candidates for rare disease targets and with CureVac to develop mRNA therapeutic and vaccine candidates for various indications. We have alsoreceived funding from CFFT to support our LUNAR-CF development program, which is described above.46 Janssen AgreementOn October 18, 2017, we entered into a new Research Collaboration and License Agreement (“Janssen Agreement”) with Janssen that took a differentapproach to treat HBV. Under the Janssen Agreement, we and Janssen will use commercially reasonable efforts to create therapeutics intended to treatHepatitis B, and at Janssen’s option, other infectious or respiratory disease viruses. The parties will jointly own all patent rights covering inventions that aremade jointly by employees, agents or subcontractors of both parties under the collaboration agreement.Both parties will carry out their respective research obligations pursuant to applicable joint research plan(s). Janssen may select certain therapeutics inthe field for further development by the parties under a joint research plan subject to the terms of the Janssen Agreement. Following the development efforts,if Janssen selects a development candidate, the compound comprising the candidate and the pharmaceutical product (if any) containing such compound aresubject to an exclusive license to Janssen from us (which exclusivity is even as to us). In addition, we will not engage in certain research, commercializationor licensing activities or solicit counterparties to engage in such activities that negatively impact the programs conducted pursuant to the Janssen agreement.The exclusivity restrictions and related limitations on subsequent activities impacting the program does not extend to certain of our activities andagreements, and, subject to certain conditions, pre-existing or subsequently acquired programs of an acquirer of Arcturus.The Janssen Agreement provides that Janssen will use commercially reasonable efforts to develop pharmaceutical products comprised of developmentcandidate-compounds, obtain certain regulatory approvals and commercialize such products. With respect to rights in infectious and respiratory diseases,Janssen also has an option to have developed and license therapeutics for such infectious and respiratory disease viruses, provided that we may collaboratewith third parties and license any rights in the option disease areas to third parties so long as Janssen has not exercised its option rights to products in thetherapeutic area. Under the collaboration agreement, both parties also grant each other certain non-exclusive, royalty-free licenses.Under the collaboration, Janssen paid us an up-front fee in the mid $5 million to $10 million range. On a development candidate-by-developmentcandidate basis, Janssen will pay us certain development milestone payments of up to $56.5 million for each of the first two products in HBV and in eachoption indication for which Janssen exercises an option. In addition, Janssen will pay us aggregate payments in the $20 million to $40 million range,depending on net sales volume, in annual net sales milestone payments on a research program-by-research-program basis for the first calendar year in whichsuch net sales milestone levels have been met. Janssen will also pay option exercise fees within the $1 to $5 million range, depending on timing of theelection to include either of the option fields. In addition, Janssen will pay royalties on annual net sales of licensed products in the low to mid-single digitsrange, subject to reduction on a country-by-country and licensed-product-by-licensed-product basis and subject to certain events, such as expiration ofprogram patents.The Janssen Agreement will terminate when no further royalty payments on any licensed products are payable. Janssen may terminate the JanssenAgreement at any time on a licensed product-by-licensed product and country-by-country basis, or in its entirety, in each case upon 60 days’ written notice.SGI AgreementOn October 24, 2017, we entered into a Research and Exclusive License Agreement with Synthetic Genomics, Inc. (the “Synthetic GenomicsAgreement”). Under the Synthetic Genomics Agreement, we will use commercially reasonable efforts to carry out research relating to lipid-mediated delivery(“LMD”) for specifically agreed research programs.We granted Synthetic Genomics an exclusive, worldwide license, under our intellectual property related to LMD, to research, develop, manufactureand commercialize (including, without limitation LUNAR products) for vaccine and human therapeutic self-amplifying RNA products but expresslyexcluding diagnosis, prophylaxis and treatment of respiratory disease viruses other than influenza.Each party retains ownership rights over intellectual property invented jointly by Synthetic Genomics and us (with inventorship determined by U.S.patent law). Under the Synthetic Genomics Agreement, we own all LUNAR product manufacturing process and process technology within any jointlyinvented program intellectual property (pursuant to an assignment by Synthetic Genomics of its interest in the joint intellectual property). SyntheticGenomics owns all other intellectual property conceived by or for us or jointly invented in performing any research plan that is not expressly assigned to us.Synthetic Genomics will pay us a percentage of all cash payments received from any sublicense for a LUNAR product, in the mid 10% to 20% range, lesspayments made to third parties to obtain the right to practice intellectual property used to develop or necessary to make, use, or sell all or part of licensedLUNAR product (which reduction may not exceed 50% of the aggregate amount paid to us with respect to a specific LUNAR product for any calendarquarter).47 If Synthetic Genomics enters into a LUNAR contemplated research agreement with a third party, does not develop a LUNAR product with such thirdparty, but subsequently licenses non-LUNAR products to and develops non-LUNAR products with such third party, then Synthetic Genomics will pay us apercentage of the consideration received for such non-LUNAR product in the 5% to 10% range. In the event that Synthetic Genomics desires to sell LUNARproducts for which it obtains marketing approval, the Synthetic Genomics Agreement provides that we and Synthetic Genomics will negotiate in good faithwith respect to that specific product opportunity.Under the Synthetic Genomics Agreement, in order to maintain exclusive rights, Synthetic Genomics must achieve certain specified milestones or payus annual exclusivity maintenance fees.Unless earlier terminated, the Synthetic Genomics Agreement continues in full force and effect until the expiration, abandonment, or termination ofthe last valid claim of a patent within the licensed intellectual property, provided that, the agreement will terminate on the seventh anniversary of theeffective date if the agreement becomes non-exclusive and neither Synthetic Genomics nor its sublicensee have achieved specified preclinical milestoneswithin designated time periods. In addition, Synthetic Genomics has the right to terminate the agreement for convenience on ninety (90) days’ written notice.Takeda AgreementOn December 6, 2016, we entered into a Research Agreement with Millennium Pharmaceuticals, Inc, a wholly-owned subsidiary of Takeda(collectively, “Takeda”), as amended December 21, 2017 (the “Takeda Agreement”). Under the Takeda Agreement, we and Takeda are conducting a researchprogram (“Research Program”) to discover siRNA medicine(s) for the treatment of Nonalcoholic Steatohepatitis (“NASH”). We will develop siRNAcompounds formulated in LUNAR lipid-mediated delivery technology for in vivo studies.The Takeda Agreement provides that for the (unless terminated or extended) research program term ending December 20, 2018 (“Research Term”),Takeda receives a non-exclusive and worldwide license, with a right to sub-license, our technology for the purpose of conducting the research program. Wehave further agreed, for a period of two years after the Research Term, not to engage in any research or development activities for which LUNAR and UNAoligomers are used against the same target as the Research Program. The Takeda Agreement further provides that if Takeda requests additional targets to beadded to the Research Program, the parties will negotiate in good faith to amend the Takeda Agreement with respect to such targets.During the Research Term, Takeda will fund our costs for the Research Program and pay milestone payments upon the achievement of specified events(which payments are in the low six-digit range). Further, pursuant to the Takeda Agreement amendment, Takeda agreed to additional fixed payments tosupport additional studies under the Research Program.Under the Takeda Agreement, Research Program results specifically related to improvements to LUNAR or UNA oligomers are owned by Arcturus,while all other Research Program results are owned by Takeda. Takeda has an option to negotiate with Arcturus to obtain a non-exclusive, sub-licensableworldwide license to use our background technology and our owned Research Program results for the purposes of exploiting the Takeda-owned ResearchProgram results.The Takeda Agreement remains in effect until Takeda no longer has payment obligations to us for research milestones. Takeda may terminate theTakeda Agreement upon sixty days written notice.Ultragenyx AgreementOn October 26, 2015, we and Ultragenyx Pharmaceutical Inc. entered into a Research Collaboration and License Agreement, as amended October 17,2017 and April 20, 2018 (the “Ultragenyx Agreement”). Ultragenyx initially selected two development targets, including Glycogen Storage Disease III, andthe parties agreed to a list of eight additional reserved targets related to rare diseases for which Ultragenyx has the exclusive right to evaluate forcollaborative development. During the reserved target exclusivity period Ultragenyx may substitute a reserved target for a selected target, and/or exercise anexpansion option by payment to us, whereby a reserved target will be deemed an additional target (and will preclude an additional reserved target in place ofthe converted reserved target). Further, during the reserved target exclusivity period, Ultragenyx may replace a reserved target with a proposed new target,subject to certain conditions including availability of such new target.Under the Ultragenyx Agreement, during the development target exclusivity period, we have agreed to exclusivity with respect to any productcontaining mRNA (including modified mRNA) or UNA oligomer with respect to each development target, including prohibitions on our activities with thirdparties with respect to any development target. The exclusivity period ends on the earlier of (i) the date such development target becomes a discontinuedtarget or (ii) termination of the Ultragenyx Agreement with respect to such48 development target. On a development-target-by-development-target basis, during the corresponding development target exclusivity period, Ultragenyxreceives an exclusive right of first negotiation to obtain an exclusive license to exploit RNA products that do not contain mRNA (including modified mRNA)or UNA oligomer. Following the development target right of first negotiation period, if the parties have not entered into an agreement during a specified timeperiod, the rights of Ultragenyx terminate and we may grant a license or enter into a third-party arrangement with respect to such development target.The Ultragenyx Agreement additionally provides for limitations on our activities with third parties utilizing LUNAR lipid-mediated deliverytechnology with respect to a development target for a specified period of time. During the reserved target exclusivity period, we have agreed to exclusivitywith respect to any product containing mRNA, including modified mRNA, or UNA oligomer with respect to such reserved target, and will first offerUltragenyx a right of first negotiation for any other RNA product or a product utilizing the LUNAR delivery technology with respect to such reserved target.The reserved target restrictions terminate upon expiration of the reserved target exclusivity period for each target, which may be extended on a reservedtarget-by-reserved target basis upon payment of an exclusivity extension fee.On a reserved target-by-reserved target basis, following the target exclusivity period, Ultragenyx receives an exclusive right of first negotiation toobtain an exclusive license to exploit RNA products with respect to such reserved target. Following the reserved target right of first negotiation period, if theparties have not entered into an agreement during a specified time period, the rights of Ultragenyx terminate and we may grant a license or enter into a third-party arrangement with respect to such reserved target.Under the Ultragenyx Agreement, Ultragenyx receives a co-exclusive, royalty-free, sublicenseable license under our technology and collaborationtechnology to conduct collaborative development of development targets, compounds and products. The license remains in effect for a specified optionperiod based upon development plan milestones being achieved with respect to development targets and reserved targets and compounds and products withrespect to such development targets and reserved targets. If Ultragenyx exercises its option with respect to a development target and the parties enter into alicense agreement, Ultragenyx receives an exclusive (even as to us), royalty bearing, sublicenseable (subject to certain limitations), license under ourtechnology and collaboration technology to exploit compound and products with respect to such development target.For development and reserved targets that revert to us, we will pay Ultragenyx royalties on net sales of discontinued target on a country-by-countrybasis, until the expiration of the last valid claim or the product-specific patents or patent rights licensed by Ultragenyx to us covering such discontinuedtargets. Such royalties depend on the state of development of the corresponding discontinued target, set in the low to mid-single digits range.Ultragenyx paid us an upfront fee of $10 million. We are entitled to certain additional payments upon exercise of the Ultragenyx expansion optionand/or exclusivity extension (if any), and for costs incurred by us in conducting the activities assigned to us under each collaboration development plan. Inaddition, on a development target-by-development target basis, Ultragenyx will pay us a one-time milestone payment after the first optimized leaddesignation for the first product with respect of such development target. For each development target for which Ultragenyx exercises its option, Ultragenyxwill pay us a one-time option exercise fee based upon on the total number of development targets for which option exercises have been made by Ultragenyx.The option exercise fee is subject to reduction if a development target does not, for example, utilize RNA delivery technology covered by our patent.Ultragenyx will also pay us certain milestone payments in the maximum amount of $49 million per development target with respect to clinical/regulatorydevelopment, and a maximum amount of $90 million per development target with respect to commercialization, in each case subject to reduction if suchproduct does not utilize RNA delivered technology covered by our patent. Ultragenyx will pay royalties as a percentage of net sales on a product-by-productand country-by-country basis during the applicable royalty term up to 10%.The Ultragenyx Agreement provides that each party owns their respective collaboration know-how and collaboration patents and jointly own all jointcollaboration know-how and joint collaboration patents, provided that Ultragenyx owns all right, title and interest in and to all collaboration technology thatspecifically relates to (a) the composition or formulation of a particular compound or product, or (b) any method of using, making or administering aparticular compound or product. Further, we will own all improvements to LUNAR lipid-mediated delivery technology and/or UNA oligomer chemistry.The Ultragenyx Agreement expires on the last-to-expire royalty term for the last product on a development target-by-development target basis, unlessearlier terminated. Upon expiration with respect to a particular development target, the licenses to Arcturus know-how granted to Ultragenyx to exploitproducts with respect to such development target will be fully paid-up, irrevocable and exclusive. On a target-by-target basis, Ultragenyx has the right toterminate for convenience with respect to such target upon 60 days written notice.49 CureVac AgreementsDevelopment and Option AgreementOn January 1, 2018, we entered into a Development and Option Agreement with CureVac, as amended May 3, 2018 (“CureVac,” and such agreement,the “Development Agreement”). Under the terms of the Development Agreement, the parties have agreed to conduct joint preclinical development programson the basis of which CureVac is granted an option for taking several licenses on pre-agreed license terms to develop and commercialize certain productsincorporating our patents and know-how related to delivery systems based on or incorporating lipid-mediated delivery systems (including the LUNAR®platform) (the “Arcturus LMD Technology”), and CureVac patents and know-how related to mRNA technology. Under the terms of the DevelopmentAgreement, we granted to CureVac a worldwide, non-exclusive license to use the our LMD Technology, including the right to grant sublicenses, for thepurpose of conducting research and preclinical development activities, subject to certain limitations. In addition, CureVac granted to us a worldwide, non-exclusive license under its mRNA technology, solely to the extent necessary to execute the activities contemplated by the agreement. Subject to certainrestrictions, the parties will have an undivided one-half interest in the patents and know-how developed jointly by the parties during the course of theagreement. Pursuant to the May 3, 2018 amendment, we granted CureVac a security interest in certain of our intellectual property.In consideration for the rights granted under the agreement, we received an upfront fee from CureVac. Each development program will be subject tothe terms of a work plan under which the parties will use diligent efforts to develop defined products. CureVac may designate certain targets as reservedtargets, subject to certain pre-existing restrictions. CureVac has options to obtain licenses from us for a pre-defined number of targets to use our LMDTechnology for the development and commercialization of products. To the extent a reserved target is only available on a nonexclusive basis, CureVac mayelect to enter into a non-exclusive license agreement. Such licenses shall be obtained under separate, pre-negotiated forms of license agreements to be enteredinto by the parties upon exercise of the option(s). If CureVac exercises its option under the agreement, it will be required to pay us an option exercise fee foran exclusive license – or non-exclusive license, as applicable – based on whether the target is a rare disease target or non-rare disease targets. Pursuant to theform of exclusive license agreement, if CureVac achieves all development and commercialization milestones with respect to the licensed product subject toan option, CureVac will be required to pay certain development and regulatory approval milestones depending on whether the target is a rare disease target ornon-rare disease target. CureVac will also be required to pay us low single-digit royalties on the net sales of each product falling under a license agreement ona country-by-country and product-by-product basis. Such royalties are subject to reduction for third party payments with respect to licensed products or ifthere is no valid claim under the licensed patents, but may not fall below a specified percentage if the licensed product during the royalty term is not coveredby a licensed claim. Further, if within 24 months after the license agreement effective date, CureVac grants a sublicense to a third party under the licenseagreement for the development and commercialization of licensed products, then CureVac will pay us a single-digit percentage of the total sublicenseincome actually received by CureVac to the extent the sublicense income exceeds the option exercise fee paid by CureVac under the DevelopmentAgreement to exercise the option for this license agreement and the milestone payments paid by CureVac under this license agreement. The fees, milestonesand royalty payments for a non-exclusive license are fifty percent (50%) of the corresponding payments for an exclusive license.The Development Agreement has an initial term of eight years unless earlier terminated or extended in accordance with its terms. Within 60 days priorto the expiration of the initial term, CureVac has the option to extend the initial term of the agreement on an annual basis for up to a total of three successiveyears upon payment to us of an annual non-refundable extension fee. CureVac has the right to terminate the agreement in full or on a program-by-programbasis (i) in the event of material breach by us that is not cured within the cure period specified in the agreement, (ii) in the event of a change in control ofArcturus or (iii) without cause upon 60 days’ notice to us. We have the right to terminate the agreement upon material breach by CureVac that is not curedwithin the period specified by the agreement. Upon termination, all licenses granted under the agreement will terminate, but any license agreement enteredinto pursuant to any option exercise will remain in effect.Co-Development and Co-Commercialization AgreementConcurrently with the Development Agreement, we entered into a Co-Development and Co-Commercialization Agreement with CureVac (the “Co-Development Agreement”). Under the terms of the agreement, the parties will collaborate to develop and commercialize mRNA-based products for treatingornithine transcarbamylase (“OTC”) deficiency, incorporating CureVac mRNA technology, our mRNA technology and our LMD Technology (“OTCProducts”). The overall collaboration will be managed by a joint steering committee. The parties also have the option to co-develop two mRNA programs forCureVac and one mRNA program for us, including targets for such programs selected from the reserved target list established under the DevelopmentAgreement.The Co-Development Agreement includes an OTC preclinical development plan specifying the activities of the respective parties. Followingselection as a development candidate by the steering committee, the steering committee will submit a clinical development plan to the parties outlining acomprehensive clinical development plan and budget and respective activities of the parties for each such OTC Product. In any event, we will have theprimary responsibility to conduct the development activities under the OTC clinical development plan.50 Under the Co-Development Agreement, CureVac has one option to co-develop and share operating profit and loss for a product using our mRNAtechnology and our LMD Technology (“Arcturus Product”). If CureVac exercises its option, CureVac will be responsible for 50% of our preclinical programcosts for development prior to option exercise, and thereafter the parties will share costs equally. The Co-Development Agreement further provides for twooptions to us to co-develop and share operating profit and loss for two products using CureVac mRNA technology and our LMD Technology (each, a“CureVac Product”). If we exercise our option, we will be responsible for 50% of CureVac’s preclinical program costs for development prior to optionexercise and thereafter the parties will share costs equally. For each CureVac Product and Arcturus Product, the steering committee is responsible forpreparing and submitting to the parties for approval a clinical development plan and budget for a co-developed product. For each OTC Product, ArcturusProduct or CureVac Product, a party may elect to not pay a continuing share of its further development costs at specified decision points and upon suchelection, the applicable product will result in royalties being paid to the non-participating party at rates in a range of 5% to 25% dependent on the time ofelection not to participate. The royalty rate has been agreed upon by the parties for the OTC Product, and the parties will agree in good faith on royalty ratesfor the other products.The Co-Development Agreement provides for respective licenses to applicable technology of a party to enable the other party (i) develop mRNAconstructs and products in accordance with the development plans on a non-exclusive, royalty-free basis; (ii) commercialize co-developed CureVac Productson an exclusive profit sharing or royalty bearing basis depending on the commercialization or opt-out as set forth in the agreement; and (iii) a non-exclusive,royalty-free right to manufacture mRNA constructs included in the products subject to the development plans. Subject to certain restrictions, each party alsohas the right to grant sublicenses of its rights with respect to each such OTC Product, Arcturus Product or CureVac Product. Under the terms of the agreement,we have the primary responsibility for all aspects of the commercialization of OTC Products and Arcturus Products, and CureVac has the primaryresponsibility for all aspects of the commercialization of co-developed CureVac Products, in each case subject to a plan of commercialization agreed upon bythe parties.The parties shall use diligent effort to conduct all manufacturing activities allocated to such party under the development plans and thecommercialization plans established under the agreement. The manufacture of the mRNA constructs and the products shall be overseen by the steeringcommittee. CureVac shall manufacture all mRNA constructs in the products for use in development activities under the development plans and forcommercial use, with the parties entering into preclinical and clinical supply agreements for the mRNA constructs. We shall manufacture and supply allproducts using mRNA constructs from CureVac for use in development activities under the development plans and for commercial use, with the partiesentering into preclinical and clinical supply agreements for the products.Unless earlier terminated, the Co-Development Agreement shall continue in full force and effect on a product-by-product and country-by-countrybasis until the commercialization party no longer sells product in such country, or with respect to opt-out products, the expiration of the royalty term for suchproduct in accordance with the terms of the agreement. The agreement may be earlier terminated (i) by either party for convenience upon 180 days writtennotice, (ii) by either party in the event of material breach, if the breaching party has not cured such breach in the applicable cure period, or (iii) by either partyin the event a party commences legal action against another challenging the scope of the non-challenging party’s patents.OTHER MATERIAL AGREEMENTSThe Company has certain other material agreements which includes the Protiva Agreement and CFFT Agreement which are discussed below.Protiva AgreementOn August 9, 2013, Marina Biotech, Inc. (“Marina”) assigned certain intellectual property, including patents, inventions and patent-relatedinformation related to UNA oligonucleotide therapeutics to us pursuant to a Patent Assignment and License Agreement, as well as Marina’s rights andobligations under a License Agreement with Protiva Biotherapeutics Inc. (“Protiva”), a wholly-owned subsidiary of Arbutus Biopharma Corporation, datedNovember 28, 2012 (the “Protiva Agreement”). The intellectual property licensed from Marina and Protiva is a significant component of our UNA oligomerchemistry platform. As partial consideration for the assignment from Marina, we granted Marina a royalty-free, fully-paid, irrevocable, worldwide, non-exclusive license to use the inventions, ideas and information embodied in the assigned patents to develop, make, use and sell chemical compounds intendedfor human and animal therapeutic uses (including certain rights to sublicense in connection with continuing research, development and/orcommercialization). We also paid an upfront fee to Marina, and agreed to maintain the assigned patents in certain countries.Under the assigned Protiva Agreement, we granted Protiva a non-exclusive, irrevocable, perpetual, worldwide license with certain rights to sublicense(in connection with continuing research, development and/or commercialization) to exploit our patents, know-how and inventions relating to our technologyfor purposes of the development of human therapeutics. Protiva will pay us milestone51 payments with an aggregate value of up to $3.25 million for each Protiva product directed to a specific gene target, upon achievement of certaindevelopment milestones with respect to each such product and target. If instead Protiva sublicenses the commercialization rights for a Protiva product, thenProtiva will pay us a percentage of sublicense revenues paid to Protiva by such sublicensee, depending on the development stage of such Protiva product atthe time of sublicense. In addition, Protiva will pay us royalties on net sales of Protiva products during the royalty term depending on the type of product, ona country-by-country basis. For licensed Protiva products, royalties will be paid in the low single digit range on net sales for such product, subject toreduction on net sales for such product in the event there is no patent coverage or generic products are introduced with respect to such Protiva product. Aroyalty reduction for a Protiva product will also apply if Protiva is required to license third party intellectual property to commercialize such product, subjectto a floor for such reductions.The Protiva Agreement term, for a particular Protiva product in a particular country, will expire (on a country-by-country basis) upon the earlier of (i)the expiration of the royalty term for such Protiva product in such country or (ii) the end of the calendar quarter in which sales in such country of genericproducts exceed a certain amount compared to sales of Protiva products in such country. The Protiva Agreement will expire in its entirety upon expiration ofthe last royalty term for any of our patents with respect to which Protiva has a license under the Protiva Agreement, unless earlier terminated. Protiva mayterminate the Protiva Agreement for convenience in its entirety, or for a particular country or countries, upon ninety days’ prior written notice to Arcturus.CFFT AgreementOn May 16, 2017, CFFT awarded us with funds for a development program to identify lead CFTR mRNA sequences and LUNAR formulations,demonstrate tolerability of LUNAR CFTR mRNA, and demonstrate translatability of aerosolized LUNAR (the “CFFT Agreement”). The award ofapproximately $3.1 million will be received according to a milestone schedule and unused funds will be retained by CFFT. We will use commerciallyreasonable efforts to conduct the development program, and after the completion of a development program, we will use commercially reasonable efforts tocontinue to develop the product. The award includes a grant of rights under CFFT know-how to assist us to research, develop, commercialize, make orotherwise exploit a product.If the award results in a successful product, we will pay CFFT a specified payment amount in installments following commercialization based on aformula that is a single-digit multiple of the total award amount, plus a payment equal to the awarded payments, after aggregate net sales of the productexceed certain thresholds. Further, in the event of a license, sale or other transfer of the product or our development program technology (including a changeof control transaction), we will pay CFFT a percentage of such transfer payments actually received by us or our shareholders (subject to a royalty cap).CFFT has an interruption license right under the CFFT Agreement so that if we fail to use commercially reasonable efforts to develop a product for acertain time period before the first commercial sale of the product, CFFT may, upon written notice of such interruption to us and our failure to effectivelydeny such interruption or cure such interruption as set forth in the CFFT Agreement, exercise certain rights pursuant to procedures set forth in the CFFTAgreement. CFFT’s interruption license rights include, in certain cases, payments from us to CFFT, or the grant of an exclusive (even as to us), worldwidelicense to CFFT under our development program technology solely to the extent necessary to manufacture, have manufactured, license, use, sell, offer to sell,and support the product in the field of treatment of cystic fibrosis and other pulmonary diseases.All inventions, data, know-how, information, results, analyses and other intellectual property rights resulting from the development program will beowned by us, and subject to certain exceptions, CFFT assigns and transfers to us all of CFFT’s right, title, and interest in and to all inventions and otherintellectual property resulting from the development program.Either party may terminate the CFFT Agreement for cause (e.g., material breach by the other party of its covenants or obligations).INTELLECTUAL PROPERTYOur business success depends in part on our ability to obtain and maintain intellectual property protection for our proprietary technologies,inventions and know-how, and on its ability to operate without infringing on the proprietary rights of others. We strive to protect our intellectual propertythrough a combination of patents, trademarks, trade secrets, licensing agreements and confidentiality agreements with employees, advisors, consultants andcontractors.We rely on continuing technological innovation to strengthen our proprietary position in the field of nucleic acid medicines. Therefore, we plan tocontinue to file patent applications in jurisdictions around the world as we discover and develops novel nucleic acid technology platforms and novel nucleicacid therapeutic candidates. We cannot guarantee that future applications will be issued.52 Our Patent PortfolioAs of April 1, 2018, we are the sole owner of 140 patents and pending patent applications including 16 U.S. patents, 25 pending U.S. patentapplications, 40 foreign patents and 59 pending foreign patent applications. The claims of these patents and pending applications include compositions ofmatter, methods of use and drug product formulations. These claims cover the use of our core platform technologies including the use of LUNAR and lipidcomponents to deliver nucleic acid, the use of UNA oligomers for therapeutics and reagents, and the use of LNA oligomers for therapeutics. Claims also coverthe composition of matter and use of our therapeutic candidates to treat target diseases including HBV and NASH. Our issued patents are expected to expirebetween 2028 and 2036, without taking into account any possible patent term extensions.Our patent portfolio includes the following patents and pending patent applications for LUNAR, UNA and LNA: •LUNAR – As of April 1, 2018, we own 8 U.S. patents, 12 U.S. pending patent applications and 25 foreign pending patent applications covering thecomposition of matter and use of our LUNAR technology for nucleic acid delivery and drug delivery. •UNA, mRNA and LNA – As of April 1, 2018, we own 8 U.S. patents, 13 U.S. pending patent applications, 40 foreign patents and 34 foreignpending patent applications covering methods and uses of LNA, UNA oligomer and mRNA therapeutics, and compositions of UNA oligomers ormRNA to treat specific target diseases.Patent TermsThe term of individual patents depends on the countries in which they are obtained. The patent term is 20 years from the earliest date of filing a non-provisional patent application in most of the countries in which we file.Under the Drug Price Competition and Patent Term Restoration Act (also known as the Hatch-Waxman Act), U.S. patent holders can apply for a patentterm extension to compensate for the patent term lost during the FDA regulatory review process. Patent extension is only available for patents covering FDA-approved drugs. The extension can be up to five years beyond the original expiration date of the patent and cannot extend a patent term for longer than 14years from the date of product approval. Only one patent extension is granted per approved drug. Similar provisions may be available in foreign jurisdictionsincluding Europe. Arcturus intends to apply for patent term extensions where possible.We also rely on trade secrets to protect our product candidates. Our commercial success also depends in part on our non-infringement of the patents orproprietary rights of third parties. For a more comprehensive discussion of the risks related to our intellectual property, please see Item 3.D. “Risk Factors” –“Risks Related to Our Intellectual Property.”The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companieshave encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. Our success depends in part on our ability to: •preserve trade secrets; •prevent third parties from infringing upon our proprietary rights; and •operate our business without infringing the patents and proprietary rights of third parties, both in the United States and internationally.We also protect our proprietary technology and processes, in part, by confidentiality and invention assignment agreements with our employees,consultants, scientific advisors and other contractors. These agreements may be breached, and we may not have adequate remedies for any breach. Inaddition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants,scientific advisors or other contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resultingknow-how and inventions.53 COMPETITIONWe believe that our scientific knowledge and expertise in nucleic acid-based therapies provide us with competitive advantages over the variouscompanies and other entities that are attempting to develop similar treatments. However, we face competition at the technology platform and therapeuticindication levels from both large and small biopharmaceutical companies, academic institutions, governmental agencies and public and private researchinstitutions. Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinicaltesting, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. These competitors also compete with us inrecruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well asin acquiring technologies complementary to, or necessary for, our programs.Our success will be based in part upon our ability to identify, develop and manage a portfolio of drugs that are safer and more effective thancompeting products in the treatment of our targeted patients. Our commercial opportunity could be reduced or eliminated if our competitors develop andcommercialize products that are safer, more effective, are more convenient or are less expensive than any products we may develop.We are aware of several other companies that are working to develop nucleic acid medicines, including gene therapy, gene editing, mRNA, siRNA,and antisense therapeutics. Many of these companies, such as the newly formed Genevant, are also developing nucleic acid delivery platforms whichcompete with LUNAR technology.Companies currently developing mRNA therapeutics for prophylactic vaccines, cancer vaccines, or mRNA replacement therapy for rare geneticdiseases include Moderna Therapeutics, Translate Bio, Ethris GmbH, CureVac GmbH, BioNTech, and eTheRNA. Translate Bio is developing mRNAreplacement therapies for cystic fibrosis and OTC deficiency which are in preclinical or early clinical development, and which directly compete with ourLUNAR-OTC and LUNAR-CF programs. Ethris is in preclinical development of ETH-CFTR, a mRNA replacement therapy for cystic fibrosis. A number ofcompanies are developing viral vector or DNA-based approaches to gene delivery for rare liver diseases, including Ultragenyx Pharmaceutical, REGENXBIO,Inc., uniQure, Vivet Therapeutics, LogicBio Therapeutics, Touchlight Genetics Ltd., Generation Bio, and Audentes Therapeutics. Ultragenyx is developing agene therapy product for OTC deficiency which is in early clinical trials.Companies developing siRNA therapeutics include Arbutus Biopharma, Arrowhead Pharmaceuticals, Inc, Quark Pharmaceuticals, Inc., SilenceTherapeutics plc, Nitto Denko, Dicerna Pharmaceuticals, Inc., and Alnylam Pharmaceuticals, Inc. Antisense therapeutics are also in development by IonisPharmaceuticals, Roche Pharma, WAVE Life Sciences, Celgene Corporation, Akcea Therapeutics, Inc., Antisense Therapeutics, Ltd., ProQR, and SareptaTherapeutics, Inc. Both Ionis Pharmaceuticals and ProQR are developing antisense therapies for cystic fibrosis which compete with our LUNAR-CF program.In addition, to the companies mentioned above, several companies are developing non-nucleic acid therapies for OTC deficiency which arecompetitors to our LUNAR-OTC program. For example, Synlogic’s SYNB1020 product is treating urea cycle disorders, including OTC deficiency, byintroducing engineered probiotic bacteria to the gut. Promethera’s Heparesc product involves infusion of their HepaStem, liver-derived stem cells into ureacycle disorder patients to restore normal enzyme function. For cystic fibrosis, many companies are pursuing small molecule therapies designed to increaseCFTR function, targeted to different patient populations, which could compete with our LUNAR-CF program. These include Vertex Pharmaceuticals,Proteostasis Therapeutics, Inc., Novartis and Galapagos.The competitive landscape continues to expand and we expect that additional companies will initiate programs focused on the development ofnucleic acid therapeutic products using the approaches described above as well as potentially new approaches that may result in the more rapid developmentof nucleic acid therapeutics or more effective technologies for nucleic acid drug development or delivery.MANUFACTURING AND SUPPLYTo date, we have manufactured only limited quantities of drug substance for use in research activities. We have contracted with several third-partycontract manufacturing organizations, or CMOs, for the supply of drug substance and finished product to meet our testing needs for preclinical toxicologyand clinical testing. We expect to continue to rely on third-party CMOs for the supply of drug substance and drug product for our product candidates for atleast the next several years, including to support the launch of our first commercial products.54 PRODUCT APPROVAL AND GOVERNMENT REGULATIONGovernment authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, theresearch, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution,post-approval monitoring and reporting, marketing and export and import of products such as those we are developing. Any product candidate that wedevelop must be approved by the FDA before it may be legally marketed in the United States and by the appropriate foreign regulatory agency before it maybe legally marketed in foreign countries.U.S. drug development processIn the United States, the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act, or FDCA, and implementing regulations. Drugs are alsosubject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance withappropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply withthe applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant toadministrative or judicial civil or criminal sanctions. FDA sanctions could include refusal to approve pending applications, withdrawal of an approval,clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals ofgovernment contracts, debarment, restitution, disgorgement or civil or criminal penalties. Any agency or judicial enforcement action could have a materialadverse effect on us. The process required by the FDA before a drug may be marketed in the United States generally involves the following: •completion of nonclinical laboratory tests, animal studies and formulation studies according to good laboratory practices, or GLP, or otherapplicable regulations; •submission to the FDA of an application for an IND, which must become effective before human clinical trials may begin; •performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as current goodclinical practices, or GCPs, to establish the safety and efficacy of the proposed drug for its intended use; •submission to the FDA of an NDA for a new drug; •satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with theFDA’s current good manufacturing practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve thedrug’s identity, strength, quality and purity; •potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA; and •FDA review and approval of the NDA.The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require theexpenditure of substantial resources and approvals are inherently uncertain.Before testing any compounds with potential therapeutic value in humans, the drug candidate enters the preclinical study stage. Preclinical tests, alsoreferred to as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess thepotential safety and activity of the drug candidate. The conduct of the preclinical tests must comply with federal regulations and requirements includingGLP. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data orliterature and a proposed clinical protocol, to the FDA as part of the IND. The IND automatically becomes effective 30 days after receipt by the FDA, unlessthe FDA imposes a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns beforethe clinical trial can begin. The FDA may also impose clinical holds on a drug candidate at any time before or during clinical trials due to safety concerns ornon-compliance. Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issueswill not arise that suspend or terminate such trial.Clinical trials involve the administration of the drug candidate to healthy volunteers or patients under the supervision of qualified investigators,generally physicians not employed by or under the trial sponsor’s direct control. Clinical trials are conducted under protocols detailing, among other things,the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. Eachprotocol must be submitted to the FDA as part of the IND. Clinical trials must be conducted in accordance with the FDA’s regulations comprising the goodclinical practices requirements. Further, each clinical55 trial must be reviewed and approved by an independent institutional review board, or IRB, at or servicing each institution at which the clinical trial will beconducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individualsparticipating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the form and content of theinformed consent that must be signed by each clinical trial subject or his or her legal representative and provide oversight for the clinical trial untilcompleted.Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: •Phase 1. The drug is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distributionand excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic toethically administer to healthy volunteers, the initial human testing may be conducted in patients. •Phase 2. The drug is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate theefficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule. •Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographicallydispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basisfor product labeling. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA. Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These clinical trials areused to gain additional experience from the treatment of patients in the intended therapeutic indication.Annual progress reports detailing the results of the clinical trials must be submitted to the FDA and written IND safety reports must be promptlysubmitted to the FDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests asignificant risk for human subjects. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. TheFDA or the sponsor or its data safety monitoring board may suspend a clinical trial at any time on various grounds, including a finding that the researchsubjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution ifthe clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm topatients.Concurrently with clinical trials, companies usually complete additional animal studies and must also develop additional information about thechemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance withcGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things,must develop methods for testing the identity, strength, quality and purity of the final drug. Additionally, appropriate packaging must be selected and testedand stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.U.S. review and approval processesThe results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical testsconducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval tomarket the product. The submission of an NDA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limitedcircumstances.In addition, under the Pediatric Research Equity Act, or PREA, an NDA or supplement to an NDA must contain data to assess the safety andeffectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatricsubpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwiserequired by regulation, PREA does not apply to any drug for an indication for which orphan designation has been granted.The FDA reviews all NDAs submitted to determine if they are substantially complete before it accepts them for filing. If the FDA determines that anNDA is incomplete or is found to be non-navigable, the filing may be refused and must be re-submitted for consideration. Once the submission is accepted forfiling, the FDA begins an in-depth review of the NDA. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, orPDUFA, the FDA has 10 months from acceptance of filing in which to complete its initial review of a standard NDA and respond to the applicant, and sixmonths from acceptance of filing for a priority56 NDA. The FDA does not always meet its PDUFA goal dates. The review process and the PDUFA goal date may be extended by three months or longer if theFDA requests or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission beforethe PDUFA goal date.After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe andeffective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength,quality and purity. The FDA may refer applications for novel drug or biological products or drug or biological products which present difficult questions ofsafety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as towhether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but itconsiders such recommendations carefully when making decisions. During the drug approval process, the FDA also will determine whether a risk evaluationand mitigation strategy, or REMS, is necessary to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA mustsubmit a proposed REMS; the FDA will not approve the NDA without a REMS, if required.Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured. The FDA will not approve the product unless itdetermines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of theproduct within required specifications. Additionally, before approving an NDA, the FDA will typically inspect the sponsor and one or more clinical sites toassure that the clinical trials were conducted in compliance with IND study requirements. If the FDA determines that the application, manufacturing processor manufacturing facilities are not acceptable it will outline the deficiencies in the submission and often will request additional testing or information.The NDA review and approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are notsatisfied or may require additional clinical data or other data and information. Even if such data and information is submitted, the FDA may ultimately decidethat the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differentlythan we interpret the same data. The FDA will issue a complete response letter if the agency decides not to approve the NDA. The complete response letterusually describes all of the specific deficiencies in the NDA identified by the FDA. The deficiencies identified may be minor, for example, requiring labelingchanges, or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions that theapplicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either submit newinformation, addressing all of the deficiencies identified in the letter, or withdraw the application.If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use mayotherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings orprecautions be included in the product labeling. In addition, the FDA may require post marketing clinical trials, sometimes referred to as Phase 4 clinicaltrials, which are designed to further assess a drug safety and effectiveness and may require testing and surveillance programs to monitor the safety ofapproved products that have been commercialized.Orphan drug designationUnder the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, whichis generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States andfor which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the United States for this typeof disease or condition will be recovered from sales of the product. Orphan product designation must be requested before submitting an NDA. After the FDAgrants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan productdesignation does not convey any advantage in or shorten the duration of the regulatory review and approval process.If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation,the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug orbiological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product withorphan exclusivity. Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity orobtain approval for the same product but for a different indication for which the orphan product has exclusivity. Orphan product exclusivity also could blockthe approval of one of our products for seven years if a competitor obtains approval of the same drug or biological product as defined by the FDA or if ourdrug candidate is determined to be contained within the competitor’s product for the same indication or disease. If a drug or biological product designated asan orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity.Orphan drug status has similar but not identical benefits in the European Union.57 Expedited development and review programsThe FDA has several regulatory pathways for expedited development and/or review of products intended to treat serious conditions. These pathwaysare Fast Track designation, Breakthrough Therapy designation, accelerated approval, and priority review. These programs do not change the standards forapproval but may expedite the development or approval process. Products may meet the standards for consideration under one or more of these pathways.The Fast Track program is intended to expedite development or facilitate the process for reviewing new drugs and biological products that meetcertain criteria. Specifically, new drugs and biological products are eligible for Fast Track designation if they are intended to treat a serious or life-threateningcondition and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the productand the specific indication for which it is being studied. In addition to more frequent meetings with the FDA to discuss the drug’s development plan andensure collection of appropriate data needed to support drug approval, the FDA will consider for review sections of the NDA on a rolling basis as sections arecompleted, based on an agreed schedule, and the sponsor pays any required user fees upon submission of the first section of the NDA.Breakthrough Therapy designation is a process designed to expedite the development and review of drugs that are intended to treat a seriouscondition and where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapy on or moreclinically significant endpoint(s). A drug that receives Breakthrough Therapy designation from the FDA is eligible for all Fast Track designation features,plus intensive guidance on an efficient drug development program beginning as early as Phase 1 and organizational commitment involving senior managers.Products may be eligible for accelerated approval. Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means that they maybe approved on the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonablylikely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity. As a condition of approval,the FDA may require that a sponsor of a drug or biological product receiving accelerated approval perform adequate and well-controlled post-marketingclinical trials. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adverselyimpact the timing of the commercial launch of the product. Accelerated Approval can be granted with restrictions to the marketing and distribution of theproduct, and the FDA can withdraw marketing approval if the required post-marketing studies fail to show a clinical benefit or if the sponsor fails to conductrequired post-marketing studies.Any product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists ora significant improvement in the treatment, diagnosis or prevention of a disease compared to marketed products. The FDA will attempt to direct additionalresources to the evaluation of an application for a new drug or biological product designated for priority review in an effort to facilitate the review.Post-approval requirementsAny drug products for which we or our strategic alliance partners receive FDA approvals are subject to continuing regulation by the FDA, including,among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacyinformation, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDApromotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, promoting drugs for uses or in patientpopulations that are not described in the drug’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities, andpromotional activities involving the internet. Failure to comply with FDA requirements can have negative consequences, including adverse publicity,enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. Although physicians mayprescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.Manufacturers of our products are required to comply with applicable FDA manufacturing requirements contained in the FDA’s cGMP regulations.cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation.Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with theFDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP andother laws. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMPcompliance. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved NDA,including withdrawal of the product from the market. In addition, changes to the manufacturing process generally require prior FDA approval before beingimplemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to furtherFDA review and approval.58 U.S. patent term restoration and marketing exclusivityDepending upon the timing, duration and specifics of the FDA approval of the use of our drug candidates, some of our United States patents may beeligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost duringproduct development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and thesubmission date of an NDA plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to anapproved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The United StatesPatent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future,we may intend to apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its current expiration date,depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA.Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications of other companies seeking toreference another company’s NDA. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicantto obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drugcontaining the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA maynot accept for review an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA submitted by another company for another version of such drugwhere the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after fouryears if it contains a certification of patent invalidity or non-infringement to one of the patents listed with the FDA by the innovator NDA holder. The FDCAalso provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA if new clinical investigations, other than bioavailabilitystudies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example newindications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigationsand does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay thesubmission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of thepreclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Pediatric exclusivity is another type ofregulatory market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. Thissix-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of apediatric trial in accordance with an FDA-issued “Written Request” for such a trial.U.S. Foreign Corrupt Practices ActThe U.S. Foreign Corrupt Practices Act, or FCPA, prohibits certain individuals and entities, including us, from promising, paying, offering to pay, orauthorizing the payment of anything of value to any foreign government official, directly or indirectly, to obtain or retain business or an improper advantage.The U.S. Department of Justice and the U.S. Securities and Exchange Commission, or SEC, have increased their enforcement efforts with respect to the FCPA.Violations of the FCPA may result in large civil and criminal penalties and could result in an adverse effect on a company’s reputation, operations, andfinancial condition. A company may also face collateral consequences such as debarment and the loss of export privileges.Federal and state healthcare laws and regulationsIn addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal healthcare laws and regulations havebeen applied to restrict certain business practices in the biopharmaceutical industry in recent years. These laws include the following:The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration toinduce or in return for purchasing, leasing, ordering, or arranging for the purchase, lease, or order of any healthcare item or service reimbursable underMedicare, Medicaid, or other federally financed healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value,including for example, gifts, discounts, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payment, ownershipinterests and providing anything at less than its fair market value. The Anti-Kickback Statute has been interpreted to apply to arrangements betweenpharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other. Although there are a number of statutoryexemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and ourpractices may not in all cases meet all of the criteria for statutory exemptions or safe harbor protection. Practices that involve remuneration that may bealleged to be intended to induce prescribing, purchases, or recommendations may be subject to scrutiny if they do not qualify for59 an exemption or safe harbor. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involvingremuneration is to induce referrals of federal healthcare covered business, the statute has been violated. The reach of the Anti-Kickback Statute was alsobroadened by the Patient Protection and Affordable Health Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively theACA, which, among other things, amended the intent requirement of the federal Anti-Kickback Statute. Pursuant to the statutory amendment, a person orentity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the ACAprovides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes afalse or fraudulent claim for purposes of the civil False Claims Act (discussed below) or the civil monetary penalties statute, which imposes penalties againstany person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for anitem or service that was not provided as claimed or is false or fraudulent.Federal false claims laws, including the federal civil False Claims Act, prohibit any person from knowingly presenting, or causing to be presented, afalse claim for payment to the federal government. Recently, several pharmaceutical and other healthcare companies have been prosecuted under these lawsfor allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies havebeen prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, and thus non-reimbursable,uses.Many states also have statutes or regulations similar to the federal Anti-Kickback Statute and civil False Claims Act, which state laws apply to itemsand services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. Also, the federal Health InsurancePortability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfullyexecuting a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing orcovering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcarebenefits, items or services.Because of the breadth of these laws and the narrowness of the federal Anti-Kickback Statute’s safe harbors, it is possible that some of our businessactivities could be subject to challenge under one or more of such laws. Such a challenge could have a material adverse effect on our business, financialcondition and results of operations.In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct ourbusiness. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations,impose on certain types of individuals and entities certain requirements relating to the privacy, security and transmission of individually identifiable healthinformation. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates” – independent contractors oragents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECHalso increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave stateattorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s feesand costs associated with pursuing federal civil actions. State laws also govern the privacy and security of health information in certain circumstances, manyof which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. In addition, the European Union,or EU, has established its own data security and privacy legal framework, including but not limited to Directive 95/46/EC, or the Data Protection Directive.The Data Protection Directive will be replaced starting in May 2018 with the recently adopted European General Data Protection Regulation, or GDPR,which contains new provisions specifically directed at the processing of health information, higher sanctions and extra-territoriality measures intended tobring non-EU companies under the regulation. We anticipate that over time we may expand our business operations to include additional operations in theEU, including potentially conducting preclinical and clinical trials. With such expansion, we would be subject to increased governmental regulation in theEU countries in which we might operate, including the GDPR.Further, the federal Physician Payments Sunshine Act, enacted as part of the ACA, requires certain manufacturers of drugs, devices, biologics andmedical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to reportannually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians andteaching hospitals. Applicable manufacturers and applicable group purchasing organizations must also report annually to CMS ownership and investmentinterests held by the physicians and their immediate family members.Other state laws and regulations may also apply, such as those that: require pharmaceutical companies to comply with the pharmaceutical industry’svoluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and/or state laws that require manufacturersto report information related to transfers of value to healthcare providers or marketing expenditures.60 If our operations are found to be in violation of any of the federal and state healthcare laws or regulations described above or any other governmentalregulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment,exclusion of products from reimbursement under government programs, disgorgement, additional reporting requirements and/or oversight if we becomesubject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputationalharm, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operateour business and our results of operations. To the extent that any of our product candidates are ultimately sold in a foreign country, we may be subject tosimilar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud andabuse laws, and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.In the United States and foreign jurisdictions, there have been a number of legislative and regulatory changes to the healthcare system that couldaffect our future results of operations. In particular, there have been and continue to be a number of initiatives at the United States federal and state levels thatseek to reduce healthcare costs.For example, the ACA includes measures to significantly change the way healthcare is financed by both governmental and private insurers. Amongthe provisions of the ACA of greatest importance to the pharmaceutical and biotechnology industry are the following: •an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportionedamong these entities according to their market share in certain government healthcare programs, that began in 2011; •an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer pricefor branded and generic drugs, respectively; •a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts to negotiated pricesof applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to becovered under Medicare Part D; •an extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed careorganizations; •an expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additionalindividuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the Federal PovertyLevel, thereby potentially increasing manufacturers’ Medicaid rebate liability; •an expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; •a requirement to annually report drug samples that manufacturers and distributors provide to physicians; •a licensure framework for follow-on biologic products; •a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research,along with funding for such research; and •establishment of a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare andMedicaid spending, potentially including prescription drug spending.Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of theACA, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signedtwo Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for healthinsurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. WhileCongress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law.The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by theACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.Additionally, on January 23, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation ofcertain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed oncertain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Congress may enact additionallegislation to real or replace certain elements of the ACA. As a result, there is significant uncertainty regarding future healthcare reform and its impact on ouroperations.61 Further, there has been heightened governmental scrutiny in the United States and abroad of pharmaceutical pricing practices in light of the rising costof prescription drugs and biologics. In the United States, such scrutiny has resulted in several recent Congressional inquiries and proposed federal legislationdesigned to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, andreform government program reimbursement methodologies for products. At the state level, legislatures are increasingly passing legislation and implementingregulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictionson certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from othercountries and bulk purchasing. Outside of the United States, particularly in the European Union, the pricing of prescription pharmaceuticals is subject togovernmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketingapproval for a product. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial thatcompares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope oramount, or if pricing is set at unsatisfactory levels, our business could be harmed.Pharmaceutical Coverage, Pricing, and ReimbursementSignificant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval. In theUnited States and markets in other countries, sales of any products for which we or our collaborators receive regulatory approval for commercial sale willdepend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.In the United States, third-party payors include federal and state healthcare programs, government authorities, private managed care providers, privatehealth insurers and other organizations. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical drug products and medical services, in addition to questioning their safety and efficacy. Moreover, the process for determiningwhether a third-party payor will provide coverage for a drug product may be separate from the process for setting the price of a drug product or forestablishing the reimbursement rate that such a payor will pay for the drug product. A payor’s decision to provide coverage for a drug product does not implythat an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that otherpayors will also provide coverage for the drug product. Adequate third-party reimbursement may not be available to enable us to maintain price levelssufficient to realize an appropriate return on our investment in product development.The marketability of any product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expectwill continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even iffavorable coverage and reimbursement status is attained for one or more products for which we or our collaborators receive regulatory approval, less favorablecoverage policies and reimbursement rates may be implemented in the future.Europe / rest of world government regulationIn addition to regulations in the United States, we and our strategic alliance partners are subject to a variety of regulations in other jurisdictionsgoverning, among other things, clinical trials and any commercial sales and distribution of our products.Whether or not we or our collaborators obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities inforeign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United Stateshave a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials. In theEuropean Union, for example, a clinical trial application, or CTA, must be submitted to each country’s national health authority and an independent ethicscommittee, much like the FDA and IRB, respectively. Once the CTA is approved in accordance with a country’s requirements, clinical trial development mayproceed.The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. Inall cases, the clinical trials are conducted in accordance with GCPs and the applicable regulatory requirements and the ethical principles that have theirorigin in the Declaration of Helsinki.To obtain regulatory approval of an investigational drug or biological product under European Union regulatory systems, we or our strategic alliancepartners must submit a marketing authorization application. The application in the United States is similar to that required in the European Union, with theexception of, among other things, country-specific document requirements.62 For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing theconduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials are conducted inaccordance with GCPs and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.If we or our strategic alliance partners fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines,suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.4.C.Organizational structureOur wholly-owned subsidiaries are Alcobra, Inc. and Arcturus Therapeutics, Inc. which are both Delaware corporations.4.D.Property, plants and equipmentOur San Diego, California headquarters consists of approximately 24,700 square feet of leased office and laboratory space under a lease that extendsthrough 2025. Our wholly owned subsidiary Alcobra Inc. also leases office space totaling approximately 3,500 square feet in the greater Philadelphia,Pennsylvania area under a lease that expires in 2018 which space is sublet through the remaining term of the lease. We believe that our existing facilities areadequate for our current needs and that suitable additional space will be available if and when needed.ITEM 4A.UNRESOLVED STAFF COMMENTSNone.ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS5.AOperating ResultsOverviewWe are an emerging biopharmaceutical company primarily focused on the development and commercialization of nucleic acid technologies andnovel nucleic acid therapeutics for rare, infectious, fibrotic, and respiratory diseases with significant unmet medical needs. We have two proprietarytechnologies with the potential to address the major hurdles in nucleic acid medicine development such as nucleic acid delivery challenges, limited potencyand narrow therapeutic index.Our activities since inception have consisted principally of performing research and development activities and raising capital to fund those efforts.Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenues andprofit from operations. As of December 31, 2017, we had an accumulated deficit of $23.1 million. Recent DevelopmentsMerger with Arcturus Therapeutics, Inc. and Related ActivitiesOn November 15, 2017, our company, Alcobra Ltd., acquired Arcturus Therapeutics, Inc. pursuant to a merger in which Arcturus Therapeutics, Inc.became our wholly owned subsidiary. In connection with and immediately preceding the merger, we effected a 1-for-7 reverse stock split of our OrdinaryShares and reduced our authorized number of Ordinary Shares to 30,000,000 shares. Also, we changed our name to “Arcturus Therapeutics Ltd.” and thebusiness conducted by our company became primarily the pre-merger business conducted by Arcturus Therapeutics, Inc., which is that of a preclinicalnucleic acid medicines company focused on developing nucleic acid technologies and novel nucleic acid therapeutics for rare, infectious, fibrotic, andrespiratory diseases with significant unmet medical needs. While Alcobra Ltd. was the legal acquirer in the transaction, Arcturus Therapeutics, Inc. wasdeemed the accounting acquirer. The Ordinary Shares of Alcobra Ltd. which had been listed on the Nasdaq Global Market, ceased trading at the close ofbusiness on November 15, 2017 under the ticker symbol “ADHD,” and once again commenced trading, as the post-merger company, on the Nasdaq GlobalMarket, under the ticker symbol “ARCT,” on November 16, 2017.In connection with and following the merger, our Board of Directors and management team have undergone significant changes in connection withthe appointment of Arcturus’ management team to similar roles with our company. After the merger, the combined company is headquartered in San Diego,California, and the members of the board of directors of the post-merger parent company (Arcturus Therapeutics Ltd.) are Stuart Collinson, PhD (ExecutiveChairman), Craig Willett, MACC, Daniel Geffken, MBA, David Shapiro, MD and Joseph Payne, MSc. Effective as of February 1, 2018, we are led by ourInterim President, Mark R. Herbert, who was part of the Arcturus pre-merger team.63 The annual consolidated financial statements of the Company reflect the operations of Arcturus Therapeutics, Inc. as the acquirer for accountingpurposes and acquired the assets and assumed the liabilities of Alcobra Ltd., and the stockholders and management of Arcturus Therapeutics, Inc. gainedcontrol of the combined company after the merger. The annual consolidated financial statements include the accounts of the Company since the effectivedate of the merger and the accounts of Arcturus Therapeutics, Inc. since inception.Mr. Payne’s and Dr. Chivukula’s Termination and Ongoing Proxy ContestOn February 1, 2018, Mr. Payne was terminated for cause as President and Chief Executive Officer of the Company. In connection with Mr. Payne’stermination, the Company exercised its right to repurchase 366,274 ordinary shares held by Mr. Payne that were not vested when he was terminated for anaggregate amount of $2,500. Under Israeli law, any repurchase of outstanding shares by a company must be made out of retained earnings. Since we do nothave retained earnings we have filed a motion for approval of distribution under Section 303(a) of the Companies Law in order to finalize the repurchase. OnFebruary 6, 2018, Mr. Payne filed a Schedule 13D to report his ownership of the Company’s ordinary shares, in which he included the shares subject torepurchase, which he disputes. The effectuation of this repurchase is contingent upon approval of an Israeli court, which approval the Company is seeking. Inthat filing, Mr. Payne disputed the efficacy of his termination.On February 11, 2018, Dr. Chivukula resigned as the Company’s Chief Scientific Officer and Chief Operating Officer from the Company’s board ofdirectors. In connection with his resignation, Dr. Chivukula entered into a separation agreement which provided him with severance benefits, a consultingagreement and the Company agreeing to waive its right of repurchase with respect to 183,137 ordinary shares held by Dr. Chivukula. In addition, theseparation agreement required that Dr. Chivukula place his 732,548 ordinary shares into a voting trust, to be voted as directed by the principal executiveofficer of the Company on all matters during the ensuing three years. Dr. Chivukula retained all financial benefit with regards to these shares.On February 12, 2018, Mr. Payne wrote a letter to the Company’s board of directors demanding that the Company hold an extraordinary generalmeeting of shareholders.On February 25, 2018, Mr. Payne challenged Dr. Chivukula’s voting trust in in the District Court at Tel Aviv – Yafo and, as interim relief, the courtplaced a temporary order on the Company, restricting the Company from implementing any action related to the voting of Dr. Chivukula’s shares.Because Mr. Payne’s and Dr. Chivukula’s affidavits filed in Israel claimed that the Company’s agreement with Dr. Chivukula was invalid, on March21, 2018, the Company filed a demand for arbitration with JAMS, because the Company’s agreements with Dr. Chivukula are governed by U.S. law andsubject to mandatory arbitration.On February 26, 2018, the Company held an extraordinary meeting of our shareholders for the purpose of ratifying the appointment of Ernst & YoungLLP, an affiliate of our prior auditor, as the Company’s independent auditors for the audit of the Company’s financial statements for the fiscal year endedDecember 31, 2017 and for such subsequent period prior to the Company’s 2018 annual general meeting of shareholders. At that meeting, the proposal toratify the appointment of Ernst & Young LLP failed to receive shareholder approval. Despite Mr. Payne’s previous vote in support of the proposal in hisfiduciary role as a member of the board of directors, the Company was informed that he had voted his shares against the shareholder proposal despite hisknowledge of the serious potential consequences of a failure of shareholders to approve the proposal.On March 11, 2018, the Company announced that it would hold an extraordinary general meeting of shareholders on May 7, 2018 as a result of Mr.Payne’s demand. On April 8, 2018, upon the recommendation of the Executive Committee of the Company’s board of directors in light of the uncertainty asto the agenda of the Extraordinary General Meeting created by Mr. Payne's March 28, 2018 motion challenging the meeting agenda as stated in theCompany's notice published on March 11, 2018, the board of directors approved postponing the extraordinary general meeting.On March 27, 2018, the Company filed an action against Mr. Payne in the Superior Court of the State of California, San Diego County. The lawsuitoutlines Mr. Payne’s misconduct, poor judgement and bad decisions during his tenure, details his self-dealing and inappropriate business conflicts ofinterests, and seeks damages and injunctive relief.On April 19, 2018, the Company filed an action against Mr. Payne and others in the United States District Court, Southern District of California. Thelawsuit alleges that the defendants violated and continue to violate Section 13(d) of the Exchange Act, 15 U.S.C. §, and Regulation 13D by failing todisclose in Schedule 13D filings the existence of group agreements to buy, sell, or vote shares of the Company and effect a change in the composition of theCompany’s board of directors. The lawsuit seeks injunctive relief.64 On May 13, 2018, the District Court of Tel Aviv ruled on a number of issues, including regarding the motion to extend the temporary restrainingorder, and ordered the Company to convene a Board meeting within seven days, and to summon an extraordinary general meeting within 35 days from thatdate. See Item 8.A. “Legal Proceedings” and Item 5.A. “Recent Developments” for additional information.The Company’s board of directors has recommended that shareholders vote against the removal of the current directors and against the election of Mr.Payne’s nominees, and the Company is soliciting proxies from shareholders on this basis.See Item 8.A. “Legal Proceedings” for additional information.5.A. Results of OperationsThe following discussion of our results of operations should be read together with the consolidated financial statements included in this annual report.Our historical results of operations and the year-to-year comparisons of our results of operations that follow are not necessarily indicative of future results. Asnoted in the “Introduction” to this annual report, from an accounting perspective, the merger which closed on November 15, 2017 has been reflected in ourfinancial statements as a recapitalization, whereby Arcturus Therapeutics, Inc. was the deemed accounting acquirer and our company was the deemedaccounting acquiree. Accordingly, our results of operations described below reflect Arcturus Therapeutics, Inc.’s results, not Alcobra Ltd.’s results, for allperiods preceding November 15, 2017.Revenues Year Ended December 31, 2016 to 2017 2015 to 2016(Dollars in thousands) 2017 2016 2015 $ change % change $ change % changeRevenue under strategic alliances and collaborations $12,998 $20,382 $6,138 $(7,384) -36.2% $14,244 * *Greater than 100%We enter into arrangements with pharmaceutical and biotechnology partners that may contain upfront payments, license fees for research anddevelopment arrangements, research and development funding, milestone payments, option exercise fees and royalties on future sales. The following tablesummarizes our total revenues for the periods indicated (in thousands): Year Ended December 31, 2016 to 2017 2015 to 2016 (Dollars in thousands) 2017 2016 2015 $ change % change $ change % change Collaboration Partner A $4,862 $12,008 $5,123 $(7,146) -59.5% $6,885 * Collaboration Partner B 5,639 7,395 979 (1,756) -23.7% 6,416 * Collaboration Partner C 1,403 28 - 1,375 * 28 100.0%Other 1,094 951 36 143 15.0% 915 * Total $12,998 $20,382 $6,138 $(7,384) -36.2% $14,244 * 65 *Greater than 100%Revenue under strategic alliances and collaborations decreased by $7.4 million during fiscal year 2017 as compared to the prior fiscal year 2016. Thedecrease in revenue was primarily the result of the decrease in revenue of $7.1 million due the cancellation of a collaboration agreement during 2017, lowerrevenue of $1.8 million as a result of lower revenue recognition on upfront payments during 2017, offset by higher revenue of $1.5 million from acollaboration agreement signed during 2016. Operating ExpensesOur operating expenses consist of research and development and general and administrative expenses. Year Ended December 31, 2016 to 2017 2015 to 2016 (Dollars in thousands) 2017 2016 2015 $ change % change $ change % change Operating expenses: Research and development, net $15,918 $17,934 $5,476 $(2,016) -11.2% $12,458 * General and administrative 7,572 3,448 2,574 4,124 * 874 34.0%Total $23,490 $21,382 $8,050 $2,108 9.9% $13,332 * *Greater than 100%Research and Development Expenses, netOur research and development expenses consist primarily of payments for salaries and related personnel expenses, third-party clinical consultants, andlaboratory supplies related to conducting research and development activities in conjunction with collaborative agreements and our internal research anddevelopment activities and are reflected net of any royalty bearing grants.The decrease of $2.0 million in research and development expenses for the year ended December 31, 2017 as compared to the year ended December31, 2016 resulted primarily from lower research and development expenses incurred of $3.7 million, $3.2 million which resulted from our termination of acollaboration agreement during 2017- a contract that was in place for the full year of 2016. The remaining decrease of $0.5 million was due to lessconsumption of materials for existing experiments. This decrease in expenses was offset by higher salary related costs of $1.3 million and general facilityexpenses and other costs of $0.4 million.The increase of $12.5 million in research and development expenses for the year ended December 31, 2016 as compared to the year ended December31, 2015 resulted from a $10.4 million increase in research and development expenses incurred primarily due to new collaboration agreements that wereentered into during 2015, and incurred development costs during all of 2016. Additionally, we had an increase in salary related costs of $1.6 million and $0.5million of other costs.General and Administrative ExpensesGeneral and administrative expenses consist primarily of salaries and related benefits for our executive, administrative and accounting functions andprofessional service fees for legal and accounting services as well as other general and administrative expenses.The increase in general and administrative expenses of $4.1 million for the year ended December 31, 2017 as compared to the year ended December31, 2016 was due to an increase in stock based compensation of $2.0 million as a result of charges resulting from the acceleration of a restricted stock grantand certain stock option grants, $1.2 million increase in professional fees related to increased legal and accounting services associated with being a publiccompany, $0.4 million increase in salary related costs for additional personnel costs related to the support of our publicly-traded company, and an increase of$0.5 million in other costs.The increase in general and administrative expenses of $0.9 million for the year ended December 31, 2016 as compared to the year ended December31, 2015 was due to increased personnel-related costs of $0.3 million, $0.2 million increase in professional fees related to legal and accounting services, andother costs of $0.4 million. 66 Finance (expense) income, net Year Ended December 31, 2016 to 2017 2015 to 2016 (Dollars in thousands) 2017 2016 2015 $ change % change $ change % change Finance (expense) income, net: Interest income $89 $9 $1 $80 * $8 * Interest expense (150) (295) (251) 145 -49.2% (44) 17.5%Other (expense) income, net (348) (250) 261 (98) 39.2% (511) * Total $(409) $(536) $11 $127 -23.7% $(547) * *Greater than 100%Interest income is generated on cash and cash equivalents and our short-term investments. For the year ended December 31, 2017, the increase ininterest income over prior years resulted from increased balances including cash and investments obtained in conjunction with our merger.Interest expense was incurred primarily in conjunction with our convertible notes which were converted to Ordinary Shares in November 2017 inconjunction with our merger.Other expense consisted of debt conversion expense of $348,000 related to the beneficial conversion feature of the convertible notes and $250,000related to conversion of promissory notes to Ordinary Shares for the year ended December 31, 2017 and to Series A Preferred Stock for the year endedDecember 31, 2016. Other income during 2015 consisted primarily of a milestone payment received related to a patent assignment and license agreement thatwas originally entered into during 2013. Income Tax Expense Year Ended December 31, 2016 to 2017 2015 to 2016(Dollars in thousands) 2017 2016 2015 $ change % change $ change % changeIncome tax expense $(1) $(35) $(1) $34 -97.1% $(34) * *Greater than 100%Our income tax expense represents minimum required tax liabilities for the jurisdictions in which we are domiciled.Unrealized loss on available-for-sale marketable securitiesWe recognized an immaterial unrealized loss on available-for-sale marketable securities for the year ended December 31, 2017 based upon changes inmarket prices for our marketable securities.Critical Accounting Policies and EstimatesWe prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, or U.S. GAAP. Assuch, we make certain estimates, judgements and assumptions that we believe are reasonable, based upon information available to us. These judgementsinvolve making estimates about the effect of matters that are inherently uncertain and may significantly impact our results of operations and financialcondition. We describe our significant accounting policies more fully in Note 2 to our consolidated financial statements for the year ended December 31,2017. In the following paragraphs, we describe the specific risks associated with these critical accounting policies and we caution that future events exactlyas one may expect, and that best estimates may require adjustment,The following are our significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reportedfinancial results.67 Revenue RecognitionWe enter into arrangements with pharmaceutical and biotechnology partners that may involve multiple deliverables. These arrangements may containupfront payments, license fees for research and development arrangements, research and development funding, milestone payments, option exercise fees androyalties on future sales. Each deliverable in the arrangement is evaluated at the inception of the arrangement to determine whether it meets the criteria to beaccounted for as a separate unit of accounting or whether it should be combined with other deliverables. When deliverables are separable, considerationreceived is allocated to the separate units of accounting based on the relative selling price method and the appropriate revenue recognition principles areapplied to each unit. Revenue is recognized separately for each unit of accounting when all four of the following criteria are met: (i) persuasive evidence thatan arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability isreasonably assured. Amounts received as compensation related to funded research and development efforts are recognized as revenue when the above criteriahave been met. When management determines we have a single unit of accounting under our collaborative arrangements, upfront fees received forcollaborative agreements are deferred and recognized on a straight-line basis, unless evidence suggests that the revenue is earned or obligations are fulfilledin a different pattern, over the expected performance period under each respective arrangement. As a result, we make our best estimate of the period overwhich we expect to fulfill its performance obligations under an arrangement. Any amounts received under the arrangement in advance of performance arerecorded as deferred revenue and recognized as revenue as we complete the performance obligations. We apply the milestone method of accounting torecognize revenue from milestone payments when earned.We describe our significant accounting policies more fully in Note 2 to our consolidated financial statements for the year ended December 31, 2017.We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations.We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, or U.S. GAAPwhich requires management to make estimates, judgments and assumptions. Our management believes that the estimates, judgments and assumptions usedare reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses duringthe reporting period. Actual results could differ materially from those estimates.Intangible Asset Held for SaleWe assess whether the carrying amount of our intangible assets are recoverable. In connection with the merger with Alcobra Ltd., we entered an AssetPurchase Agreement with Amiservice Development Ltd. (“Amiservice”), pursuant to which we agreed to transfer certain intellectual property related to theproprietary abuse-deterrent immediate release dextro-amphetamine drug called ADAIR that is intended for use to treat ADHD and narcolepsy (“ADAIR”). Inexchange for ADAIR, we will receive a minority equity stake in a company to be formed by Amiservice for the purpose of acquiring the ADAIR assets. Weutilized the market method with a high probability of success to value this transaction and recorded an intangible asset held for sale of $590,000. Thismethod requires significant management judgment to forecast the occurrence of future equity events. If the subsequent actual results and updated projectionsof the underlying business activity change compared with the assumptions and projections used to develop these values, we could experience impairmentcharges.Deferred TaxesIn accordance with ASC 740, Income Taxes, we recognize deferred tax assets and liabilities for the expected future tax consequences or events thathave been included in our financial statements and/or tax returns. Deferred tax assets and liabilities are based upon the differences between the financialstatement carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards using enacted tax rates expected to be ineffect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not thatsome portion or all of the deferred tax asset will not be realized.68 Ordinary Share ValuationsSince our inception date until May 2017, the estimated fair value of the ordinary shares underlying our share options was determined at the grant dateof each option by our board of directors with input from management and with the assistance of independent third-party valuations. For awards granted afterMay 2017 until the merger date, the fair value as determined by the merger agreement was used in the Ordinary Share valuation. The valuations of ourordinary shares for these dates were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants PracticeAid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the “Practice Aid”). The methodology used by the third-partyvaluation specialists to assist in determining the fair value of our Ordinary Shares included estimating the fair value of the equity and then allocating thisvalue to all of the equity interests using the option pricing method. The assumptions used in the valuation model to determine the estimated fair value of ourordinary shares as of the grant date of each option are based on numerous objective and subjective factors, combined with management judgment, includingthe following: •Our operating and financial performance, including our levels of available capital resources; •The valuation of publicly-traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitionsof peer companies; •Rights and preferences of our ordinary shares compared to the rights and preferences of its other outstanding equity securities; •Equity market conditions affecting comparable public companies, as reflected in comparable companies’ market multiples, initial public offeringvaluations and other metrics; •The achievement of enterprise milestones, including our development, intellectual property and regulatory progress; •The likelihood of achieving a liquidity event for our ordinary shares, such as an initial public offering or an acquisition of its company givenprevailing market and biotechnology sector conditions; •Sales of our preferred shares in arms-length transactions; •The illiquidity of our securities while we were a private company; •Business risks; and •The fair value determined by our merger agreement. Emerging Growth CompanySubject to certain conditions set forth in the JOBS Act, as an “emerging growth company,” we elected to rely on other exemptions, including withoutlimitation, (i) providing an auditor’s attestation report on our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act and(ii) complying with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s reportproviding additional information about the audit and the financial statements (auditor discussion and analysis). These exemptions will apply for a period offive years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.Under the JOBS Act, an emerging growth company can take advantage of an extended transition period for complying with new or revised accountingstandards. This provision allows an emerging growth company to delay the adoption of new or revised accounting standards that have different transitiondates for public and private companies until those standards would otherwise apply to private companies. We have elected to use this extended transitionperiod. As a result of this election, our timeline to comply with these standards will in many cases be delayed as compared to other public companies that arenot eligible to take advantage of this election or have not made this election. Therefore, our financial statements may not be comparable to those ofcompanies that comply with the public company effective dates for these standards.69 5. B. Liquidity and Capital ResourcesOverviewSince our inception, we have funded our operations principally with proceeds from the sale of capital stock, convertible notes and revenues earnedthrough collaborative agreements. During 2017, we obtained $36.4 million in cash and short-term investments from our merger with Alcobra Ltd. As ofDecember 31, 2017, we had $48.6 million in unrestricted cash, cash equivalents and short-term investments.If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adverselyaffected. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all. Additionally, equity or debtfinancings may have a dilutive effect on the holdings of the company’s existing shareholders. Our future capital requirements are difficult to forecast and willdepend on many factors, including: •the achievement of milestones under our strategic alliance agreements; •the terms and timing of any other strategic alliance, licensing and other arrangements that we may establish; •the initiation, progress, timing and completion of preclinical studies and clinical trials for our product candidates; •the number and characteristics of product candidates that we pursue; •the outcome, timing and cost of regulatory approvals; •delays that may be caused by changing regulatory requirements; •the cost and timing of hiring new employees to support our continued growth; •the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims; •the costs and timing of procuring clinical and commercial supplies of our product candidates; •the costs and timing of establishing sales, marketing and distribution capabilities; •the costs associated with legal proceedings, including our ongoing proxy contest; and •the extent to which we acquire or invest in businesses, products or technologies.The following table shows a summary of our cash flows for the years ended December 31, 2017, 2016 and 2015 (in thousands): Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Cash provided by (used in): Operating activities $(460) $(2,861) $8,290 Investing activities 10,355 (688) (220)Financing activities 6,998 - 1,902 Net increase (decrease) in cash and restricted cash $16,893 $(3,549) $9,972Operating ActivitiesOur primary use of cash is to fund operating expenses, which consist mainly of research and development expenditures. We have incurred significantlosses which have been partially offset by cash collected through our collaboration agreements and acquired through our recent merger. Cash collectionsunder the collaboration agreements can vary from year to year depending on the terms of agreement and work performed. These changes on cash flowsprimarily relate to the timing of cash receipts for upfront payments, reimbursable expenses and achievement of milestones under these collaborativeagreements.70 Net cash used in operating activities was $0.5 million on a net loss of $10.9 million for the year ended December 31, 2017, compared to net cash usedof $2.9 million on a net loss of $1.6 million for the year ended December 31, 2016. Net cash provided by operating activities was $8.3 million on a net loss of$1.9 million for the year ended December 31, 2015 . Adjustments for non-cash charges, including stock-based compensation and expense related to ourconvertible notes payable and asset acquisition costs were $3.1 million, $1.1 million and $0.5 million for the years ended December 31, 2017, 2016 and2015, respectively. Changes in working capital resulted in adjustments to operating net cash flows of $7.4 million, ($2.4) million and $9.7 million for theyears ended December 31, 2017, 2016 and 2015, respectively.Investing ActivitiesNet cash provided by investing activities of $10.4 million for the year ended December 31, 2017 reflected proceeds of the maturities of our short-terminvestments of $10.6 million, offset by the purchase of property and equipment of $0.3 million. Net cash was used in investing activities of $0.7 million and$0.2 million for the years ended December 31, 2016 and 2015, respectively, which primarily reflected the purchase of property and equipment for researchand development activities.Financing ActivitiesNet cash provided by financing activities of $7.0 million for the year ended December 31, 2017 consisted of net proceeds of the issuance ofconvertible notes of $5.7 million, as well as and cash acquired in conjunction with our merger of $0.5 million and the proceeds from the exercise of warrantsand stock options. There was no cash provided by (used in) financing activities for the year ended December 31, 2016. Net cash provided by financingactivities of $1.9 million for the year ended December 31, 2015 consisted primarily of net proceeds from the issuance of convertible notes.Capital Expenditures in Last Three Fiscal YearsIn 2017, 2016 and 2015, our capital expenditures amounted to $0.1 million, $0.8 million and $0.3 million, respectively, which related to the purchaseof property and equipment primarily for research and development activities, as described above under “Investing Activities.”Funding RequirementsWe anticipate that we will continue to generate annual net losses for the foreseeable future, and we expect the losses to increase as we continue thedevelopment of, and seek regulatory approvals for, our product candidates, and begin commercialization of our products. As a result, we will requireadditional capital to fund our operations, and funding may not be available to us on acceptable terms or at all. Our future funding requirements will depend on many factors, including the following: •the cost and timing of hiring new employees to support our continued growth; •the scope, rate of progress, results and cost of our future clinical studies, nonclinical testing, and other related activities; •the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates and any products that we maydevelop; •the costs associated with legal proceedings, including our ongoing proxy contest; •the cost, timing, and outcomes of regulatory approvals; •the cost and timing of establishing our commercial infrastructure, and distribution capabilities; •costs associated with filing requirements under Section 16 of the Exchange Act; and •the terms and timing of any collaborative, licensing, and other arrangements that we may establish, including any required upfront payments,license fees for research and development arrangements, research and development funding, milestone payments, and royalties on future salesupfront milestone and royalty payments thereunder.71 We expect to satisfy future cash needs through existing capital balances and through some combination of public or private equity offerings, debtfinancings, collaborations, strategic alliances, licensing arrangements, and other marketing and distribution arrangements.Our current investment policy has the following objectives: (i) preserve principal (capital); (ii) maintain liquidity in accordance with cash flowrequirements; and (iii) maximize the rate of return within the stated guidelines in the policy. To achieve these goals, we invest available cash in bankdeposits with banks that have a credit rating of at least Baa1/BBB+ and in tradable securities with high credit quality and trading liquidity, including U.S.Treasury bonds, money market funds, and corporate debt instruments that carry a rating of A2/A or better.Our cash management is monitored by the Audit Committee.Current Financing OutlookWe have financed our operations to date primarily through proceeds from sales of our Ordinary Shares and other equity and debt securities andpayments received in conjunction with our collaboration efforts. We have incurred losses and generated negative cash flows from operations since inception.To date, we have not generated any revenue from the sale of products and we do not expect to generate revenues from sale of our products in the near term.We believe that our existing capital resources will be sufficient to fund our operations for at least twelve months from the filing of this Form 20-F, however,we believe that we will need to raise additional funds before we have positive cash flow from operations.Recent Accounting PronouncementsSee footnote 2 to our consolidated financial statements.5.CResearch and Development, Patents and Licenses, etc.For a discussion of our research and development policies, see Item 5.A. “Research and Development” above. For a discussion of our patents, see Item4.B “Intellectual Property” above.5.DTrend InformationFor trend information, see Item 3.D. “Risk Factors” described above, Item 5 “Operating and Financial Review and Prospects – Overview” and “–Operating Results,” and Item 4 “Information on the Company” above. 5.EOff-Balance Sheet ArrangementsExcept for standard operating leases, we have not engaged in any off-balance sheet arrangements, such as the use of unconsolidated subsidiaries,structured finance, special purpose entities or variable interest entities.5.FContractual ObligationsThe following table summarizes our contractual obligations at December 31, 2017: (Dollars in thousands) Total Less than1 year 1-3 years 4-5 years More than5 years Operating leases $8,858 $556 $2,505 $2,659 $3,138 Purchase obligations 1,505 1,505 - - - Total $10,363 $2,061 $2,505 $2,659 $3,138 72 ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES6.A.Directors and senior managementExecutive Officers and DirectorsThe following table sets forth information regarding our executive officers and directors as of March 1, 2018: Name Age Position(s)Executive Officers Mark R. Herbert 39 Interim PresidentNon-Employee Directors Stuart Collinson, Ph.D. (4) 58 Director and Executive Chairman of the BoardJoseph E Payne 46 DirectorCraig Willett (1)(2)(3)(4)(5) 57 DirectorDavid Shapiro, M.D. (1)(2)(3) (4) 63 DirectorDaniel E. Geffken (1)(2)(3) (4)(5) 61 Director (1)Indicates independent director under Nasdaq rules. (2)Member of the Audit Committee. (3)Member of the Compensation Committee. (4)Member of the Executive Committee. (5)Member of the Nominating and Corporate Governance Committee. Executive OfficerMark Herbert has served as our Interim President since February 2018. Mr. Herbert joined Arcturus in 2015, and previously served as our VicePresident of Business Development and Alliance Management. He previously was Head of U.S. Business Development and Sales at STA Pharmaceutical Co.,Ltd., WuXi AppTec’s small molecule development and manufacturing division, from 2013 to 2015, where he was responsible for all North American businessdevelopment and marketing activities. Prior to WuXi AppTec, Mr. Herbert served as Director of Pharmaceutical Sciences at Aragon Pharmaceuticals, Inc. from2009 to 2013, which was acquired by Johnson & Johnson in 2013. Mr. Herbert’s background includes over 15 years of experience in business and technicaldevelopment of large and small molecules working across a number of different platforms and therapeutic areas. Mr. Herbert received a B.S. in Chemistryfrom Kent State University and a Master of Science in Synthetic Organic Chemistry from Indiana University.Non-Employee DirectorsStuart Collinson, Ph.D. has served on the board of directors and as Executive Chairman of the board of directors of Arcturus Therapeutics Ltd.(formerly Alcobra Ltd.) since November 2017. Prior to the merger, Dr. Collinson served on Arcturus Therapeutics, Inc.’s board of directors since May 2014and as Executive Chairman since January 2015, and also providing consulting services to Arcturus Therapeutics, Inc. Dr. Collinson is currently a partner atForward Ventures, a position he has held since 2002, the Executive Chairman of Tioga Pharmaceuticals, Inc., a private clinical stage pharmaceuticalcompany, a position he has held since 2005, a director of Soleno Therapeutics, Inc., a public pharmaceutical company, a position he has held since March2017, and an advisor to ZoBio, B.V., a position he has held since 2001. Previously he was Chairman, Chief Executive Officer and President of AuroraBiosciences Corp. (acquired by Vertex Pharmaceuticals Inc.), a public biotechnology company, from 1999 to 2001. Before Aurora, Dr. Collinson was ChiefExecutive Officer of Andaris Limited (acquired by Quadrant, now part of Perrigo), a private biotechnology company, in 1998. He held senior managementpositions at GlaxoWellcome plc (now GlaxoSmithKline plc) from 1994 until 1998 and Baxter International Inc. from 1989 to 1994, and was a consultantwith The Boston Consulting Group from 1985 to 1987. Dr. Collinson was previously a director of Essentialis Inc. (acquired by Capnia, Inc., now SolenoTherapeutics, Inc.) from 2005 to March 2017, Affinium Pharmaceuticals, Inc. (acquired by Debiopharma Group) from 2007 to February 2014, CabrellisPharmaceuticals Corp. (acquired by Pharmion Corp., now part of Celgene Corp.) in 2006, Conforma Therapeutics Corp. (acquired by BiogenIdec, Inc.) from2002 to 2006, GeneOhm Sciences, Inc. (acquired by Becton, Dickinson and Company) from 2001 to 2006, NovaCardia, Inc. (acquired by Merck & Co, Inc.)from 2003 to 2007, Proprius Pharmaceuticals, Inc. (acquired by Cypress Bioscience, Inc.) from 2007 to 2008, and Vertex Pharmaceuticals Inc. from 2002 to2011. Dr. Collinson received an M.B.A. from Harvard Business School and a D.Phil. (Ph.D.) in Physical Chemistry from the University of Oxford.Craig Willett served on Arcturus Therapeutics, Inc.’s board of directors since March 2013, and on the board of directors of Arcturus Therapeutics Ltd.(formerly Alcobra Ltd.) since November 2017. He is the President and CEO of Elizann, Inc., a company providing start-up coaching services to entrepreneursand financial restructuring and improvement services to growth stage businesses, a position which he has held since September 1999. He is the past Presidentand CEO of UTAZ Development Corporation, a real estate73 development company, a position which he held from August 1994 until December 2013. In September 1997, Mr. Willett founded Willett and Richards,CPA, LLC (formerly known as Craig Willett, CPA), an accounting firm specializing in business and real estate tax issues. Craig was also a founding directorof Capital Community Bank, where he served in that capacity from April 1995 until December 2002. Mr. Willett served as a delegate to the White HouseConference on Small Business in 1994. Mr. Willett also served as a member of the board of directors of Wing Enterprises, Inc., creators of the Little GiantLadder system, from January 1994 until January 2002. Mr. Willett is a real estate broker and CPA and holds bachelor's and master's degrees in accountingfrom Brigham Young University.David Shapiro, M.D. has served on the board of directors of Arcturus Therapeutics Ltd. (formerly Alcobra Ltd.) since November 2017, and currentlyserves as the chief medical officer of Intercept Pharmaceuticals, Inc., a public pharmaceutical company, a position he has held since 2008. He has over 30years of clinical development experience in the pharmaceutical industry. Dr. Shapiro founded a consulting company, Integrated Quality Resources, thatfocused on development stage biopharmaceutical companies and was active in this role from 2005 to 2008. From 2000 to 2005, Dr. Shapiro was executivevice president, medical affairs and chief medical officer of Idun Pharmaceuticals, Inc., prior to its acquisition by Pfizer Inc. From 1995 to 1998, he waspresident of the Scripps Medical Research Center at Scripps Clinic. He also served as vice president, clinical research at Gensia Pharmaceuticals, Inc. and asdirector and group leader, hypertension clinical research at Merck Research Laboratories from 1985 to 1990. Dr. Shapiro has authored more than 25 peer-reviewed publications and organized and chaired several conferences aimed at improving product development. Dr. Shapiro served on the board of directorsof Altair Therapeutics, Inc. from 2008 to 2010 and served for two terms on the Executive Committee of the Board of the American Academy ofPharmaceutical Physicians, from 1997 to 2000 and from 2004 to 2005. He is an elected Fellow of both the Royal College of Physicians of London and theFaculty of Pharmaceutical Physicians of the United Kingdom. He received his medical degree from Dundee University & Medical School, and undertook hispostgraduate medical training in the university affiliated hospitals in Oxford, United Kingdom and the University of Vermont.Daniel E. Geffken has served on Arcturus Therapeutics Ltd.’s (formerly Alcobra Ltd.’s board) since May 2013. Since October 2011, he has beenManaging Director of Danforth Advisors, LLC, a management consulting firm that provides financial and strategic support to emerging life sciencecompanies. Mr. Geffken has also been the chief financial officer or chief operating officer of eight companies, four of which were U.S. public reportingcompanies and six of which were life science companies. He has a B.S. in Economics from The Wharton School, University of Pennsylvania, and an M.B.A.from Harvard Business School.Joseph E. Payne previously served as President and Chief Executive Officer of Arcturus and on Arcturus Therapeutics, Inc.’s board of directors fromMarch 2013 to February 2018. He serves on the board of directors of Arcturus Therapeutics Ltd. (formerly Alcobra Ltd.) since November 2017. Prior tojoining Arcturus, Mr. Payne served as Senior Manager of Nitto Denko Corporation, a life sciences research company, from June 2009 until February 2013.Mr. Payne’s background includes over 20 years of drug discovery experience at Arcturus, Nitto Denko Corporation, Kalypsys Inc., Merck Research Labs,Bristol-Myers Squibb Co. and DuPont Pharmaceuticals Co. Mr. Payne received a Bachelor's Degree in Chemistry, magna cum laude from Brigham YoungUniversity, a Master of Science in Synthetic Organic Chemistry from the University of Calgary and an Executive Training Certificate from MIT Sloan Schoolof Management.74 6.B.CompensationThe table below reflects the compensation granted to the five most highly compensated officers assuming that the compensation that was paid duringthe period of January 1, 2017 through November 14, 2017 for the previous Alcobra Ltd. officers (not included in the Consolidated Statements of Operationsand Comprehensive Loss in this Form 20-F) is combined with the compensation for the post-merger Arcturus Therapeutics Ltd. for the period November 15,2017 through December 31, 2017. All amounts reported in the table reflect the cost based on this assumption, in U.S. Dollars. Amounts paid in NIS aretranslated into U.S. dollars at the rate of NIS 3.60 = U.S.$1.00, based on the average representative rate of exchange between the NIS and the U.S. dollar asreported by the Bank of Israel for the year ended December 31, 2017. Name and Position Salary BenefitCost (1) Share-BasedPayments(2) Bonus (3) Other (4) Total Irena Katsman, Former Vice President, Finance $121,677 $54,727 $33,806 $30,419 $51,670 (3)$292,299 Yaron Daniely, Former Chief Executive Officer, President andDirector $307,550 $50,198 $235,820 $- $- $593,568 Tomer Berkovitz, Former Chief Financial Officer and ChiefOperating Officer $300,803 $108,366 $164,193 $150,000 $300,000 (3)$1,023,362 David Baker, Former Interim Executive Officer, Former ChiefCommercial Officer $413,578 $89,107 $115,902 $- $348,504 (3)$967,091 Jonathan Rubin, Former Chief Medical Officer $222,142 $70,798 $99,724 $- $309,000 (3)$701,664 (1)Includes the social benefits paid by us on behalf of the employees, including convalescence pay, contributions made by the company to aninsurance policy or a pension fund, work disability insurance, life insurance, medical insurance, severance benefits required under Israeli law,educational fund and payments for social security. It also includes leased vehicle cost for some of the employees. (2)Represents the grant date fair value of options awarded in accordance with accounting guidance for equity-based compensation. All thefollowing option share numbers and exercise prices per share give effect to the 1-for-7 reverse split implemented in connection with the merger.Ms. Katzman received a stock option for 6,250 shares with an exercise price of $8.33 per share which expired on April 30, 2018. Mr. Danielyreceived a stock option for 45,624 shares with an exercise price of $8.33 per share which expired on November 15, 2017. Mr. Berkovitzreceived a stock option for 30,358 shares with an exercise price of $8.33 per share which expired on January 15, 2018. Mr. Baker received astock option for 21,429 shares with an exercise price of $8.33 per share which expired on November 15, 2017. (3)Ms. Katsman and Mr. Berkovitz each earned special success bonuses upon the closing of the merger which were earned and payable contingentupon Alcobra Ltd.’s net cash at the closing of the merger exceeding $33,250,000. (4)Represents compensation awarded in conjunction with separation agreements. The aggregate amount of compensation paid or accrued to the five most highly compensated officers assuming that the compensation that was paidduring the period of January 1, 2017 through November 14, 2017 for the previous Alcobra Ltd. officers (not included in the Consolidated Statements ofOperations and Comprehensive Loss in this Form 20-F), combined with the officers and directors for the post-merger Arcturus Therapeutics Ltd. for the periodNovember 15, 2017 through December 31, 2017 was approximately $3.2 million including bonuses of $0.2 million. In addition, share-based compensationin the amount of $0.6 million was awarded in 2017. This compensation includes salaries, consulting fees, directors' fees, car expenses and vacation, pension,severance, retirement or similar benefits or expenses, employer’s taxes and bonuses. The amount does not include business travel, relocation, professional andbusiness association due and expenses reimbursed to office holders, and other benefits commonly reimbursed or paid by companies in our industry. Theseamounts reflect amounts paid in NIS were translated into U.S. dollars at the rate of NIS 3.60 = U.S.$1.00, based on the average representative rate of exchangebetween the NIS and the U.S. dollar as reported by the Bank of Israel for the year ended December 31, 2017. 75 6.C.Board practicesBoard of Directors and Executives – Term and ContractsWe have entered into written employment agreements with all of our executive officers. Each of these agreements contains provisions regarding non-competition, confidentiality of information and ownership of inventions. The non-competition provision applies for a period that is generally 12 monthsfollowing termination of employment. The employment agreements also include severance for certain key employees subject to our compensation policy.The enforceability of covenants not to compete in Israel and the United States is subject to limitations. In addition, we are required to provide notice prior toterminating the employment of our executive officers, other than in the case of a termination for cause.Other than with respect to our directors that are also executive officers, we do not have written agreements with any director providing for benefitsupon the termination of his employment with our company.Board of Directors – Israeli LawUnder the Israeli Companies Law, our Board of Directors is vested with the power to set corporate policy and oversee our business. Our Board ofDirectors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to management. Our Board of Directorsserves as the primary corporate body responsible for risk management for our company, including cybersecurity risks, and periodically consults with themanagement of our company to obtain updates concerning, and internally discusses, the most material risks currently facing our company, and how those risksare being mitigated. Our executive officers are responsible for our day-to-day management and have individual responsibilities established by our Board ofDirectors. Our principal executive officer is appointed by, and serves at the discretion of, our Board of Directors, subject to the employment agreement thatwe have entered into with him. All other executive officers are appointed by our principal executive officer, and are subject to the terms of any applicableemployment agreements that we may enter into with them.Under our amended and restated articles of association, our Board of Directors must consist of at least five and not more than eleven directors. OurBoard of Directors currently consists of five directors. We have only one class of directors. In accordance with the Israeli Companies Law and our amendedand restated articles of association, our Board of Directors is required to appoint one of its members to serve as Chairman of the Board of Directors. Our Boardof Directors has appointed Dr. Collinson to serve as Chairman of the Board of Directors.External Directors – ExemptionIn June 2016, we elected to be governed by a newly-adopted exemption under the Israeli Companies Law regulations that exempts us from appointingexternal directors and from complying with the Israeli Companies Law requirements related to the composition of the audit committee and compensationcommittee of our Board of Directors. Our eligibility for that exemption is conditioned upon: (i) the continued listing of our Ordinary Shares on the NasdaqStock Market (or one of a few select other non-Israeli stock exchanges); (ii) there not being a controlling shareholder (generally understood to be a 25% orgreater shareholder) of our company under the Israeli Companies Law; and (iii) our compliance with the Nasdaq Listing Rules requirements as to thecomposition of (a) our Board of Directors—which requires that we maintain a majority of independent directors (as defined under the Nasdaq Listing Rules)on our Board of Directors (subject to applicable cure periods under the Nasdaq Listing Rules) and (b) the audit and compensation committees of our Board ofDirectors, which rules require that such committees consist solely of independent directors (at least three and two members, respectively). At the time that itwas determined to exempt our company from the external director requirement, our board affirmatively determined that we meet the conditions for exemptionfrom the external director requirement.As a result of our election to be exempt from the external director requirement under the Companies Law, each of our directors is elected annually, atour annual general meeting of shareholders. The vote required for the election of each director is a majority of the voting power represented at the meetingand voting on the election proposal.Board Nominations and RemovalOur directors are each elected at the annual general meeting of our shareholders and serve until the next annual general meeting. Such election issubject to the nomination, and recommendation for the Board of Directors’ nomination, by a majority of independent directors. Directors may nevertheless beremoved prior to the end of their term by the majority of our shareholders at a general meeting of our shareholders or upon the occurrence of certain events,all in accordance with the Israeli Companies Law and our amended and restated articles of association.76 In addition, our amended and restated articles of association allow our Board of Directors to appoint directors, to fill vacancies on our Board ofDirectors, for a term of office equal to the remaining period of the term of office of the directors whose offices have been vacated or appoint new additions toBoard of Directors up to the maximum number of directors.Under the Israeli Companies Law, nominations for directors may be made by any shareholder holding at least one percent (1%) of our outstandingvoting power. However, any such shareholder may make such a nomination only if a written notice of such shareholder's intent to make such nomination hasbeen given to our Board of Directors. Any such notice must include certain information which under the Israeli Companies Law requires to be provided to ourshareholders, the consent of the proposed director nominee(s) to serve as our director(s) if elected and a declaration signed by the nominee(s) declaring thatthere is no limitation under the Israeli Companies Law preventing their election and that all of the information that is required under the Israeli CompaniesLaw to be provided to us in connection with such election has been provided.Board Member QualificationsIn addition to its role in making director nominations, under the Israeli Companies Law, our Board of Directors must determine the minimum numberof directors who are required to have accounting and financial expertise. Under applicable regulations, a director with accounting and financial expertise is adirector who, by reason of his or her education, professional experience and skill, has a high level of proficiency in and understanding of business accountingmatters and financial statements, sufficient to be able to thoroughly comprehend the financial statements of the Company and initiate debate regarding themanner in which financial information is presented. In determining the number of directors required to have such expertise, our Board of Directors mustconsider, among other things, the type and size of our company and the scope and complexity of its operations. Our Board of Directors has determined thatour company requires one director with such expertise. Mr. Craig Willett has such accounting and financial expertise.Audit CommitteeIsraeli Law RequirementsUnder the Israeli Companies Law, the board of directors of a public company must appoint an audit committee.Our Audit Committee assists our Board of Directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing,financial reporting, internal control and legal compliance functions by pre-approving the services performed by our independent accountants and reviewingtheir reports regarding our accounting practices and systems of internal control over financial reporting. Our Audit Committee also oversees the audit effortsof our independent accountants and takes those actions that it deems necessary to satisfy itself that the accountants are independent of management.Under the Israeli Companies Law, our Audit Committee is responsible for: •determining whether there are deficiencies in the business management practices of our Company, and making recommendations to our Board ofDirectors to improve such practices; •determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest andwhether such transaction is extraordinary or material under the Companies Law) (see Item 16G. – “Corporate Governance – Approval of RelatedParty Transactions under Israeli Law”); •examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools todispose of its responsibilities; •examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our Board of Directors orshareholders, depending on which of them is considering the appointment of our auditor; •establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to suchemployees; •determining whether certain acts of an office holder not in accordance with his or her fiduciary duty owed to the Company are extraordinary ormaterial and to approve such acts and certain related party transactions (including transactions in which an office holder has a personal interest)and whether such transaction is extraordinary or material under the Companies Law (see Item 16G. – “Corporate Governance – Approval of RelatedParty Transactions under Israeli Law”);77 •deciding whether to approve and to establish the approval process (including by tender or other competitive proceedings) for certain transactionswith a controlling shareholder or in which a controlling shareholder has a personal interest; and •determining the process of approval of transactions that are not negligible, including determining the types of transactions that will be subject tothe approval of our Audit Committee.Nasdaq RequirementsUnder the Nasdaq Listing Rules, we are required to maintain an audit committee consisting of at least three independent directors, all of whom arefinancially literate and one of whom has accounting or related financial management expertise. Under the Nasdaq Listing Rules, the audit committee isresponsible for, among other things: the oversight of our independent registered public accounting firm; the receipt, retention, and treatment of complaintsreceived by our company regarding accounting, internal accounting controls, or auditing matters; and the confidential, anonymous submission by ouremployees of concerns regarding questionable accounting or auditing matters.Our Audit Committee consists of Mr. Willett, who serves as the chairperson of the Audit Committee, Mr. Geffken and Dr. Shapiro, all of whom areindependent under the listing standards of the Nasdaq Listing Rules. The existing Board of Directors has determined that Mr. Willett is an audit committeefinancial expert as defined by the SEC rules and has the requisite financial sophistication as defined by the Nasdaq Listing Rules. All of the members of ourAudit Committee meet the requirements for financial literacy under the applicable Nasdaq Listing Rules. Each member of the Audit Committee is required tobe (and each of the foregoing members of our Audit Committee actually is) “independent” as such term is defined in Rule 10A-3(b)(1) under the ExchangeAct.CharterOur Board of Directors has adopted an audit committee charter setting forth the responsibilities of our Audit Committee consistent with the rules of theSEC and the Nasdaq Listing Rules, as well as the requirements for such committee under the Israeli Companies Law. The audit committee charter is posted onour website.Compensation Committee and Compensation PolicyCompensation Committee – Israeli Law RequirementsUnder the Israeli Companies Law, the board of directors of a public company must appoint a compensation committee, which must be responsible for(i) approving, and proposing for approval by the board of directors and shareholders, a compensation policy, (ii) proposing necessary revisions to thecompensation policy and examining its implementation, (iii) determining whether to approve transactions with respect to the terms of office and employmentof office holders, and (iv) determining, in accordance with the compensation policy, whether to exempt an engagement with an unaffiliated nominee for theposition of principal executive officer from requiring shareholders’ approval. The term “office holder,” as defined in the Israeli Companies Law, includesdirectors, executive officers and any manager directly subordinate to the chief executive officer. Under the regulations promulgated under the IsraeliCompanies Law, certain exemptions and reliefs with respect to the compensation committee are granted to companies such as ours whose securities are tradedoutside of Israel.Compensation Policy RequirementsThe Companies Law provides that a compensation policy must serve as the basis for the decisions concerning the financial terms of employment orengagement of the office holders, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect ofemployment or engagement. The compensation policy must be approved (or reapproved) not less frequently than every three years, and relate to certainfactors, including advancement of the company’s objective, business plan and its long-term strategy and creation of appropriate incentives for office holders.It must also consider, among other things, the company’s risk management, size and nature of its operations. The compensation policy must furthermoreconsider the following additional factors: •the knowledge, skills, expertise and accomplishments of the relevant office holder; •the office holder’s roles and responsibilities and prior compensation agreements with him or her; •the relationship between the terms offered and the average compensation of the other employees of the company, including those employedthrough manpower companies; •the impact of disparities in salary upon work relationships in the company;78 •the possibility of reducing variable compensation at the discretion of the board of directors or the possibility of setting a limit on the exercisevalue of non-cash variable equity-based compensation; and •as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, thecompany’s performance during that period of service, the person’s contributions towards the company’s achievement of its goals and themaximization of its profits and the circumstances under which the person is leaving the company.The compensation policy must also include the following principles: •the link between variable compensation and long-term performance and measurable criteria; •the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation; •the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the dataupon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; •the minimum holding or vesting period for variable, equity-based compensation; and •maximum limits for severance compensation.The compensation policy must be approved by the board of directors, after considering the recommendations of the compensation committee. Thecompensation policy must also be approved by a majority of the company’s shareholders, provided that (i) such majority includes at least a majority of theshareholders who are not controlling shareholders and who do not have a personal interest in the matter, present and voting (abstentions are disregarded), or(ii) the non-controlling shareholders and shareholders who do not have a personal interest in the matter who were present and voted against the policy holdtwo percent or less of the outstanding voting power of the company. Other than for a newly public company, for which the regulations provide for a five-yearperiod, for all other public companies, the compensation policy must be approved by the board of directors and the shareholders every three years. If thecompensation policy is not approved by the shareholders, the compensation committee and the board of directors may nonetheless approve the policy,following further discussion of the matter and for specified reasons.Our shareholders approved a compensation policy that meets the above requirements in February 2014, which was subsequently amended in July2015 and again in July 2016.Israeli Law Office Holder Compensation ApprovalsUnder the Israeli Companies Law, the terms of office and employment of office holders require the approval of the compensation committee and theboard of directors. The terms of office and employment of directors and the principal executive officer must also be approved by shareholders. Changes toexisting terms of office and employment of office holders (other than directors) can be made with the approval of the compensation committee only, if thecommittee determines that the change is not substantially different from the existing terms.Under certain circumstances, the compensation committee and the board of directors may approve an arrangement that deviates from thecompensation policy, provided that such arrangement is approved by the special majority of the company’s shareholders mentioned above. Such shareholderapproval will also be required with respect to determining the terms of office and employment of a director or the principal executive officer during thetransition period until a company adopts a compensation policy (or during any period between the three-year anniversary (or in the case of a newly publiccompany, the initial five-year anniversary) of the last adoption of a compensation policy and the actual adoption of an updated compensation policy).Notwithstanding the foregoing, a company may be exempted from receiving shareholder approval with respect to the terms of office and employment of acandidate for principal executive officer if such candidate meets certain independence criteria, the terms are in line with the compensation policy and thecompensation committee has determined for specified reasons that shareholder approval would prevent the engagement.Compensation Committee – Nasdaq RequirementsUnder the Nasdaq Listing Rules, we are required to maintain a compensation committee, consisting entirely of independent directors, which isauthorized to determine the compensation of our executive officers (or, the determination of that compensation of our executive officers must be made solelyby the independent members of the board of directors).79 Our Compensation Committee consists of Mr. Geffken, who serves as the chairperson of the committee, Mr. Willett and Dr. Shapiro, all of whom areindependent under the listing standards of the Nasdaq Listing Rules.Compensation Committee – CharterOur Board of Directors has adopted a compensation committee charter setting forth the responsibilities of our Compensation Committee consistentwith the Nasdaq Listing Rules and the requirements under the Companies Law, as described above. The compensation committee charter requires that ourCompensation Committee be comprised of at least three members. The compensation committee charter is posted on our website.Nominating and Corporate Governance CommitteeOur Nominating and Corporate Governance Committee consists of Mr. Willett, who serves as the chairperson of the committee, and Mr. Geffken, eachof whom are independent under the listing standards of the Nasdaq Listing Rules. No committee member may be an employee of the Company and eachmember must be free from any relationship that would interfere with the exercise of his or her independent judgment, as determined by the Board of Directors,in accordance with the applicable independence requirements under the Nasdaq Listing Rules. The members of the committee and the committee chairpersonare appointed by the Board of Directors. To the extent that the Board of Directors is then required to include external directors under the Companies Law, atleast one such external director will serve on the Nominating and Corporate Governance Committee.The purpose of the Nominating and Corporate Governance Committee is to: (i) oversee all aspects of the Company’s corporate governance functionson behalf of the Board of Directors; (ii) make recommendations to the Board of Directors regarding corporate governance issues; (iii) identify, review andevaluate candidates to serve as directors of the Company and review and evaluate incumbent directors; (iv) serve as a focal point for communication betweensuch candidates, non-committee directors and the Company’s management; (v) recommend for nomination by the Board of Directors and election by theshareholders candidates to serve on the Board of Directors; and (vi) make other recommendations to the Board of Directors regarding affairs relating to thedirectors of the Company, including director compensation (subject to approval by the compensation committee of the Board of Directors to the extentrequired under Israeli law).The Nominating and Corporate Governance Committee has the following primary responsibilities: •Director Nominations – The committee has the responsibility of identifying, reviewing and evaluating candidates to serve on the Company’sBoard of Directors, including consideration of any potential conflicts of interest as well as applicable independence and experience requirements.The committee will also have the primary responsibility for reviewing, evaluating and considering the recommendation for nomination ofincumbent directors for re-election to the Board, as well as monitoring the size of the Board of Directors. The committee will also recommend to theBoard of Directors for selection candidates to the Board of Directors. The committee will also have the power and authority to considerrecommendations for Board of Directors nominees and proposals submitted by the Company’s shareholders and to establish any policies,requirements, criteria and procedures, including policies and procedures to facilitate shareholder communications with the Board of Directors, torecommend to the Board of Directors appropriate action on any such proposal or recommendation and to make any disclosures required byapplicable law in the course of exercising its authority. •Management and Board Assessment – The committee will periodically review, discuss and assess the performance of management and the Board ofDirectors, including Board of Directors committees, seeking input from senior management, the full Board of Directors and others. The assessmentwill include evaluation of the Board of Director’s contribution as a whole and effectiveness in serving the best interests of the Company and itsshareholders, specific areas in which the Board of Directors and/or management believe contributions could be improved, and overall Board ofDirectors composition and makeup, including the reelection of current board members. The factors to be considered will include whether thedirectors, both individually and collectively, can and do provide the integrity, experience, judgment, commitment, skills and expertise appropriatefor the Company. The committee will also consider and assess the independence of directors, including whether a majority of the Board ofDirectors continue to be independent from management in both fact and appearance, as well as within the meaning prescribed by the NasdaqListing Rules. The results of these reviews will be provided to the Board of Directors for further discussion as appropriate. •Board Committee Nominations – The committee, after due consideration of the interests, independence and experience of the individual directorsand the independence and experience requirements of the Nasdaq Listing Rules, the rules and regulations of the SEC and applicable law, willrecommend to the entire Board of Directors annually the chairmanship and membership of each committee. The committee will conduct an annualself-evaluation.80 •Continuing Education – The committee will consider instituting a plan or program for the continuing education of directors. •Corporate Governance Principles – The committee has the authority to develop a set of corporate governance principles to be applicable to theCompany, may periodically review and assess these principles and their application, and may recommend any changes deemed appropriate to theBoard of Directors for its consideration. Further, the committee will periodically review Company policy statements to determine their adherenceto the Company’s code of conduct. •Procedures for Information Dissemination – The committee will oversee and review the processes and procedures used by the Company to provideinformation to the Board of Directors and its committees. The committee should consider, among other factors, the reporting channels throughwhich the Board of Directors and its committees receive information and the level of access to outside advisors where necessary or appropriate, aswell as the procedures for providing accurate, relevant and appropriately detailed information to the Board of Directors and its committees on atimely basis. •Director Compensation – The committee will periodically review the compensation paid to non-employee directors for their service on the Boardof Directors and its committees and recommend any changes considered appropriate to the compensation committee, which in turn can recommendto the full Board of Directors for its approval. •Management Succession – The committee will periodically review with the Chief Executive Officer the plans for succession to the offices of theCompany’s executive officers and make recommendations to the Board of Directors with respect to the selection of appropriate individuals tosucceed to these positions. •Self-Assessment – The committee will review, discuss and assess its own performance at least annually. The committee will also periodically reviewand assess the adequacy of the committee charter, including the committee’s role and responsibilities as outlined in the committee charter, and willrecommend any proposed changes to the Board of Directors for its consideration. •Reporting to the Board – The committee, through the committee chairperson, will report all material activities of the committee to the Board ofDirectors from time to time or whenever so requested by the Board of Directors. Nominating and Corporate Governance Committee – Nasdaq RequirementsWe maintain a Nominating and Corporate Governance Committee, consisting entirely of independent directors, which is authorized to oversee ourcorporate governance functions on behalf of the Board of Directors and identify, review and evaluate candidates to serve as directors of the company(including coordinating communication between candidates, non-committee directors and the company’s management, making nominationrecommendations and other recommendations regarding director-related affairs).Our Nominating and Corporate Governance Committee consists of Mr. Willett, who serves as the chairperson of the committee, and Mr. Geffken, bothof whom are independent under the listing standards of the Nasdaq Listing Rules.81 Nominating and Corporate Governance Committee – CharterOur Board of Directors has adopted a Nominating and Corporate Governance Committee Charter setting forth the responsibilities of the Nominatingand Corporate Governance Committee consistent with the Nasdaq Listing Rules and the requirements under the Companies Law, as described above. TheNominating and Corporate Governance Committee Charter requires that our Nominating and Corporate Governance Committee be comprised of at least twomembers. The Nominating and Corporate Governance Committee Charter is posted on our website. The Nominating and Corporate Governance Committeeholds at least one regular meeting per year and additional meetings, as the committee deems appropriate.Executive CommitteeIn February 2018, our Board of Directors appointed an executive committee. The roles of this committee are (i) to assist in the implementation of thebusiness strategy of our company, subject to board approval for matters outside of the ordinary course of business (and for other matters for which boardapproval is required under the Israeli Companies Law), and (ii) to exercise such other duties as the board may resolve from time to time. The members of ourExecutive Committee consist of Dr. Collinson, who serves as chairman of the executive committee, Mr. Geffken, Mr. Willett and Dr. Shapiro.Internal auditorUnder the Israeli Companies Law, the board of directors of an Israeli public company must appoint an internal auditor recommended by the auditcommittee and nominated by the board of directors. An internal auditor may not be: •a person (or a relative of a person) who holds more than 5% of the company's outstanding shares or voting rights; •a person (or a relative of a person) who has the power to appoint a director or the general manager of the company; •an office holder (including a director) of the company (or a relative thereof); or •a member of the company's independent accounting firm, or anyone on his or her behalf.Guy Sapir, CPA, a partner at PWC Israel, was appointed as our internal auditor. The role of the internal auditor is to examine, among other things, ourcompliance with applicable law and orderly business procedures.6.D.EmployeesOur executive management consists of our Interim President. We further have service agreements with U.S.-based regulatory consultants as well asadditional U.S.-based clinical consultants who are members of our clinical advisory board. We believe that we maintain good relations with all of them. Notethat December 31, 2017 reflects post-merger Arcturus Therapeutics Ltd. while December 31, 2016 and 2015 reflect combined employees for both AlcobraLtd. and Arcturus Therapeutics, Inc.Over the past three years (as of the end of each such year), the number of our employees by function was as follows: As of December 31, Function 2017 2016 2015 Research, development and quality assurance 49 36 20 Administration, finance and operations 11 20 18 Total 60 56 38 As of the end of each of the past three years, the number of our employees by geographic area was as follows: As of December 31, Geographic area 2017 2016 2015 Israel 2 14 15 United States 58 42 23 Total 60 56 38 82 The significant shift in the geographic area in which our employees are situated as of December 31, 2017 relative to the prior year-ends resulted fromthe merger. Upon consummation of the merger, we essentially discontinued our pre-merger Israeli operations and shifted our operations to San Diego,California, where Arcturus’ operations have historically been based. 6.E.Share ownershipAs of March 1, 2018, for those officers and directors listed in the compensation table in Item 6.B., such executive officers and directors beneficiallyowned less than 1% of our issued and outstanding Ordinary Shares. 2010 Incentive Option PlanWe maintain one equity incentive plan - our 2010 Incentive Option Plan, or our 2010 Plan. As of March 1, 2018, a total of 465,558 shares werereserved for issuance under our 2010 Plan, of which options to purchase 21,448 Ordinary Shares were issued and outstanding thereunder. Of such outstandingoptions, all the options were vested as of March 1, 2018 with a weighted average exercise price of $3.99 per share.Our 2010 Plan, which was adopted by our Board of Directors in February 2010, and approved by our shareholders in July 2015, provides for the grantof options to our and our affiliates’ respective directors, employees, office holders, service providers and consultants. On December 16, 2014, our Board ofDirectors adopted an appendix to the 2010 Plan for U.S. residents, which was later approved by our shareholders. The initial reserved pool under our 2010plan has been increased by our Board of Directors a number of times, and most recently on March 13, 2017.The 2010 Plan is administered by our Board of Directors or by a committee thereof, which shall determine, subject to Israeli and U.S. law, the granteesof awards and various terms of the grant. The 2010 Plan provides for granting options in compliance with Section 102 of the Israeli Income Tax Ordinance,1961, or the Ordinance, and under the U.S. Revenue Code of 1986, as amended.Options granted under the 2010 Plan to Israeli employees have been granted under the capital gains track of Section 102 of the Ordinance.Section 102 of the Ordinance allows employees, directors and officers, who are not controlling shareholders and are considered Israeli residents, toreceive favorable tax treatment for compensation in the form of shares or options. Our Israeli non-employee service providers and controlling shareholdersmay only be granted options under Section 3(9) of the Ordinance, which does not provide for similar tax benefits. Section 102 of the Ordinance includes twoalternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternativefor the issuance of options or shares directly to the grantee. Section 102(b)(2) of the Ordinance, the most favorable tax treatment for grantees, permits theissuance to a trustee under the “capital gains track.” However, under this track we are not allowed to deduct an expense with respect to the issuance of theoptions or shares. In order to comply with the terms of the capital gains track, all options granted under the 2010 Plan pursuant and subject to the provisionsof Section 102 of the Ordinance, as well as the Ordinary Shares issued upon exercise of these options and other shares received subsequently following anyrealization of rights with respect to such options, such as share dividends and share splits, must be granted to a trustee for the benefit of the relevantemployee, director or officer and should be held by the trustee for at least two years after the date of the grant.Options granted under the 2010 Plan will generally vest over four years commencing on the date of grant such that 25% vest after one year and anadditional 6.25% vest at the end of each subsequent three-month period thereafter for 36 months, or pursuant to a vesting schedule that is determinedaccording to pre-specified performance milestones in accordance with company’s objectives. Options that are not exercised within the pre-specified optionterm (generally five or ten years from the grant date) expire, unless otherwise determined by the Board or its designated committee, as applicable. In case oftermination for reasons of disability or death, the grantee or his legal successor may exercise options that have vested prior to termination within a period ofsix months from the date of disability or death. If we terminate a grantee's employment or service for cause, all of the grantee's vested and unvested optionswill expire on the date of termination. If a grantee's employment or service is terminated for any other reason, the grantee may exercise his or her vestedoptions within 30 days of the date of termination. Any expired or unvested options return to the pool for reissuance.In the event of a merger or consolidation of our company subsequent to which we shall no longer exist as a legal entity, or a sale of all, or substantiallyall, of our shares or assets or other transaction having a similar effect on us, then outstanding options under the 2010 Plan shall be assumed, or an equivalentoption shall be substituted, by such successor corporation or an affiliate thereof or, in case the successor corporation refuses to assume or substitute theoption, our Board of Directors or its designated committee may (a) provide the grantee with the opportunity to exercise the option as to all or part of theshares, vested or otherwise, and (b) specify a period of time, no less than seven days, following which all outstanding options shall terminate.83 Arcturus Therapeutics Ltd. Incentive PlanThe Company assumed the 2013 Arcturus Therapeutics Inc. Equity Incentive Plan, or the 2013 Plan, in conjunction with the merger. Arcturus optionsoutstanding on the merger date were replaced with the Company’s options under the Company’s 2010 Incentive Option Plan (“2010 Plan”) with the sameterms and equivalent value. No future grants will be awarded from the 2013 Plan which has been extinguished. As of March 1, 2018, options to purchase232,513 Ordinary Shares were issued and outstanding under the 2013 Plan. Of such outstanding options, options to purchase 165,949 Ordinary Shares werevested as of March 1, 2018 with a weighted average exercise price of $2.89 per share.ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS7.A.Major shareholdersThe following table sets forth information with respect to the beneficial ownership of our Ordinary Shares as of March 1, 2018 by: •each person or entity known by us to own beneficially 5% or more of our outstanding shares; •each of our directors and executive officers individually; and •all of our executive officers and directors as a group.The beneficial ownership of Ordinary Shares is determined in accordance with the rules of the SEC and generally includes any Ordinary Shares overwhich a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership. For purposes of the tablebelow, we deem shares subject to options or warrants that are currently exercisable or exercisable within 60 days of March 1, 2018, to be outstanding and tobe beneficially owned by the person holding the options or warrants for the purposes of computing the percentage ownership of that person, but we do nottreat them as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of shares beneficially owned is basedon 10,324,435 Ordinary Shares outstanding as of March 1, 2018 (excluding the shares repurchased by the Company as set forth herein). Prior to March 1,2018, the Company has exercised its right to repurchase 366,274 Ordinary Shares (subject to Israeli court approval, which we are seeking) pursuant to aCommon Stock Purchase Agreement, dated March 4, 2013, as amended on September 27, 2017, by and between Mr. Payne and the Company. Mr. Paynecontests this repurchase. See Item 8.A. “Consolidated statements and other financial information – Legal Proceedings” for more information.The following table sets forth information regarding the beneficial ownership by each person or entity known to beneficially own more than 5% of ourOrdinary Shares as of March 1, 2018, or a different date, if so provided in the table below or footnotes thereof.According to our transfer agent, as of March 1, 2018, there were 82 record holders of our Ordinary Shares, one of which (Cede & Co., the nominee ofthe Depositary Trust Company) is a U.S. holder holding 39% of our outstanding Ordinary Shares. The number of record holders in the United States is notrepresentative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these Ordinary Shares areheld by beneficially brokers or other nominees on behalf of their clients. None of our shareholders has different voting rights from other shareholders.We are not owned or controlled, directly or indirectly, by another corporation or by any foreign government. We are not aware of any arrangement thatmay, at a subsequent date, result in a change of control of our company.84 Except as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respectto all shares shown to be beneficially owned by them, based on information provided to us by such shareholders. Unless otherwise noted below, eachbeneficial owner’s address is: c/o Arcturus Therapeutics Ltd., 10628 Science Center Drive, Suite 250, San Diego, California, 92121. Ordinary SharesBeneficially Owned 5% or Greater Shareholders Number Percentage Padmanabh Chivukula (1) 732,548 7.1%Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr., Franklin Advisers, Inc. (2) 639,642 6.2%Bradley Sorenson(3) 587,918 5.7%Directors and Executive Officers Joseph E. Payne(4) 1,098,823 10.6%Craig Willett(5) 866,342 8.4%Mark R. Herbert (6) 736,515 7.1%Stuart Collinson(7) 164,887 1.6%Daniel Geffen(8) 6,966 * David Shapiro - * All directors and executive officers as a group (6 persons) 2,873,533 27.8% * Represents beneficial ownership of less than 1% of our outstanding ordinary shares (1)Consists of 732,548 Ordinary Shares subject to a Voting Trust Agreement, dated as of February 11, 2018, by and among the Company,Padmanabh Chivukula, and Mark Herbert (the “Voting Trust Agreement”). Dr. Chivukula does not hold voting power over such shares, andsuch shares are subject to certain transfer restrictions pursuant to the Voting Trust Agreement. Mark Herbert is the trustee under the VotingTrust Agreement with sole voting power over the 732,548 Ordinary Shares subject to such Voting Trust Agreement. (2)Based solely on an Amendment 2 to Schedule 13G filed with the SEC on December 11, 2017, and which reflects holdings as of November 30,2017. The address of these shareholders is One Franklin Parkway, San Mateo, CA 94403-1906. (3)Based on a Schedule 13D filed with the SEC on January 19, 2018. Consists of: (i) 577,392 Ordinary Shares, (ii) presently-exercisable options topurchase 4,669 Ordinary Shares and (iii) call options to purchase an aggregate of an additional 5,857 Ordinary Shares. (4)Based on a Schedule 13D filed with the SEC on February 6, 2018, which reflected ownership of 1,465,097 Ordinary Shares by Mr. Payne, whichnumber has been reduced to 1,098,823 Ordinary Shares following the purchase from Mr. Payne by the Company of 366,274 of those OrdinaryShares (subject to Israeli court approval, which we are seeking), which were unvested and were available for repurchase by the Company pursuantto a Common Stock Purchase Agreement, dated March 4, 2013, as amended on September 27, 2017, by and between Mr. Payne and theCompany. Mr. Payne contests this repurchase. See Item 8.A “Consolidated statements and other financial information – Legal Proceedings” formore information. (5)Based on a Schedule 13D filed with the SEC on February 7, 2018. Consists of (i) 108,282 Ordinary Shares held directly by Mr. Willett, (ii)280,810 Ordinary Shares held by DUR Holdings, LC, (iii) 294,113 Ordinary Shares held by Phoenician Enterprises, Ltd., and (iv) 183,137Ordinary Shares held by 6-W Discretionary Trust. Mr. Willett is the president of Elizann, Inc., which is the manager of DUR Holdings, LC, andtherefore Mr. Willett may be deemed to have voting and investment power with respect to the securities held by DUR Holdings, LC. Mr. Willettis the general partner of Phoenician Enterprises, Ltd. and therefore may be deemed to have voting and investment power with respect to thesecurities held by Phoenician Enterprises, Ltd. Mr. Willett is the trustee of 6-W Discretionary Trust and therefore may be deemed to have votingand investment power with respect to the securities held by 6-W Discretionary Trust. (6)Based on a Schedule 13D filed with the SEC on February 22, 2018, which reflects ownership by Mr. Herbert of sole voting power of 732,548Ordinary Shares subject to the Voting Trust Agreement and presently-exercisable options to purchase 3,967 Ordinary Shares within 60 days ofMarch 1, 2018. Dr. Chivukula contests Mr. Herbert’s authority to vote such shares. See Item 8.A. “Consolidated statements and other financialinformation – Legal Proceedings” for more information.85 (7)Consists of (i) 154,001 Ordinary Shares and (ii) 10,886 Ordinary Shares issuable upon the exercise of an option within 60 days of March 1,2018. (8)Consists of Ordinary Shares issuable upon the exercise of an option within 60 days of March 1, 2018.7.B.Related party transactionsSee Item 10.B. “Memorandum and Articles of Association – Approval of Related Party Transactions” for a discussion of the requirements of Israeli lawregarding special approvals for transactions involving directors, officers or controlling shareholders.Providence AgreementDuring 2016, we entered into a Research Collaboration and License Agreement with a related party, Providence Therapeutics, Inc. (“Providence”)whose CEO and President is also one of our stockholders, to identify and optimize microRNA modulators and/or mimetics for the treatment of neoplasticdiseases. In April 2017, the Providence Agreement was amended to include mRNA for the treatment of neoplastic disease. As part of the agreement, wegranted Providence the exclusive rights to research, develop, manufacture and commercialize such products and Providence made an upfront payment of$500,000 which is being amortized over the research term. Each party is responsible for their own research costs under the agreement, and Providence isresponsible for all of the development costs through the completion of Phase 2 clinical trials. We are entitled to share in future product revenue of eachproduct provided that we share in the product’s post Phase 2 costs. Separately, Providence has agreed to pay a specified rate for the use of our employees. Forthe years ended December 31, 2017 and 2016, we have recognized $1.0 million and $0.5 million, respectively, in revenue related to the amortization of theupfront payment and revenue related to the use of our employees and expense reimbursements. As of December 31, 2017, amounts owed from Providence tous totaled to $0.1 million and were not recognized as revenues nor account receivable in our financial statements as it collectability is not reasonablyassured. Further, the December 31, 2017 amount outstanding and all future billable costs through the date of this 20-F filing have not been paid and certainamounts are now past due. During 2017, our stock issuance agreement with the President and CEO of Providence was modified to remove the vestingconditions of the original grant and we recognized $1.5 million in related stock compensation expense. As of December 31, 2017 and 2016, the President andCEO of Providence held a 5.7% and 10% ownership interest in our Company. In May 2018, we sent a letter to Providence requesting payment for past dueinvoices and requesting evidence that Providence had satisfied a funding requirement under the parties’ agreement.Employment AgreementsWe have entered into written employment agreements with each of our executive officers. These agreements provide for notice periods of varyingduration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer will continue to receive basesalary and benefits. We have also entered into customary non-competition, confidentiality of information and ownership of inventions arrangements with ourexecutive officers. However, the enforceability of the noncompetition provisions may be limited under applicable law.OptionsSince our inception we have granted options to purchase our Ordinary Shares to our officers and certain of our directors. Such option agreements maycontain acceleration provisions upon certain merger, acquisition, or change of control transactions. We describe our option plans under Item 6.E. “ShareOwnership” above. If the relationship between us and an executive officer or a director is terminated, except for cause (as defined in the various option planagreements), options that are vested will generally remain exercisable for ninety days after such termination.Indemnification Agreements and Insurance CoverageOur amended and restated articles of association permit us to exculpate, indemnify and insure each of our directors and office holders to the fullestextent permitted by the Israeli Companies Law. We have entered into indemnification agreements with each of our directors and other office holders,undertaking to indemnify them to the fullest extent permitted by Israeli law. We have also obtained Directors’ & Officers’ insurance for each of our officersand directors.86 Merger Agreement and Lock-Up AgreementsMerger AgreementAs described in the “Introduction” to this annual report, on November 15, 2017, our company, Arcturus Therapeutics Ltd. (formerly known as AlcobraLtd.), an Israeli company through its wholly-owned subsidiary, Aleph MergerSub, Inc., a Delaware corporation (or Merger Sub), completed the merger withArcturus Therapeutics, Inc., a Delaware corporation, in accordance with the terms of the merger agreement. Pursuant to the merger agreement, Merger Submerged with and into Arcturus Therapeutics, Inc., with Arcturus Therapeutics, Inc. surviving as our wholly-owned subsidiary. In connection with, and prior tothe completion of, the merger, we effected a 1-for-7 reverse stock split of our Ordinary Shares. The transactions contemplated by the merger agreement(including the merger and the reverse stock split) were approved by our shareholders at the extraordinary general meeting of shareholders held on November12, 2017.In connection with the merger, we changed our name to “Arcturus Therapeutics Ltd.” and our business became primarily the business conducted byArcturus Therapeutics, Inc., i.e., that of a preclinical nucleic acid medicines company focused on developing therapeutics for rare, infectious, fibrotic, andrespiratory diseases with significant unmet medical needs.Immediately prior to and in connection with the merger, each outstanding share of Arcturus Therapeutics, Inc.’s capital stock (other than commonstock), whether in the form of preferred stock, warrants and convertible notes, was converted into one share of Arcturus Therapeutics, Inc.’s common stock atratios determined in accordance with Arcturus Therapeutics, Inc.’s certificate of incorporation then in effect. Under the terms of the merger agreement, at theeffective time of the merger, we issued Ordinary Shares to Arcturus Therapeutics, Inc.’s stockholders, at an exchange ratio of 0.293 Ordinary Shares per shareof Arcturus Therapeutics, Inc.’s common stock outstanding immediately prior to the merger. The exchange ratio was determined through arms-lengthnegotiations between our company and Arcturus Therapeutics, Inc. An aggregate of approximately 6,631,712 Ordinary Shares were issued to the ArcturusTherapeutics, Inc.’s stockholders in the merger. Our company also assumed all of the stock options issued and outstanding under Arcturus Therapeutics, Inc.’s2013 Equity Incentive Plan with such stock options henceforth representing the right to purchase .293 Ordinary Shares for which they were entitled prior tothe merger.Immediately after the merger, there were approximately 10,568,901 Ordinary Shares outstanding with the former Arcturus Therapeutics, Inc.stockholders, warrantholders and noteholders owning approximately 62.5% of our Ordinary Shares, and our preexisting shareholders’ constitutingapproximately 37.5% of our Ordinary Shares.The Ordinary Shares of Alcobra Ltd, which had been listed on the Nasdaq Global Market prior to the merger, and were traded, through the close ofbusiness on November 15, 2017 under the ticker symbol “ADHD,” commenced trading on the Nasdaq Global Market, under the ticker symbol “ARCT” onNovember 16, 2017. The Ordinary Shares were given a new CUSIP number following the merger: M1492T 105.Lock-Up AgreementsIn connection with the Merger, David Shapiro, Padmanabh Chivukula, Stuart Collinson, Joseph Payne, Craig Willett, Orli Tori and Daniel Geffken(each, a “Shareholder”) entered into lock-up agreements. Each Shareholder agreed that the Shareholder will not, subject to the exceptions set forth in theapplicable lock-up agreement, for 180 days after November 15, 2017 (i.e., until May 14, 2018), directly or indirectly (a) offer, pledge, sell, contract to sell orotherwise transfer or dispose of any merger shares, or any securities convertible into or exercisable or exchangeable for merger shares, or (b) enter into anyswap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the merger shares. The foregoing restrictions aresubject to exceptions for transfers: as charitable gifts and donations, to a trust for the direct or indirect benefit of the Shareholder or immediate familymember, as testamentary dispositions, to certain affiliates of the Shareholder, by operation of law in connection with qualified domestic order or divorcesettlement, not involving a change in beneficial ownership, and if held in trust, from the trust to beneficiaries or their estates. Transferees who acquire mergershares pursuant to any of the foregoing exceptions must agree in writing to be bound by the terms and conditions of the applicable Shareholder’s lock-upagreement. Further, a Shareholder may (a) exercise an option to purchase merger shares and transfer such shares to Arcturus to cover tax withholdingobligations (but the underlying shares will continue to be subject to the lock-up restrictions and any applicable Exchange Act filing will contain a disclosureexplaining the exercise and reason for the sale); (b) establish a 10b5-1 trading plan under the Exchange Act provided such plan does not provide for anytransfers of merger shares during the lock-up period; and (c) transfer or dispose of merger shares acquired on the open market following close of the Merger.Any attempted transfers in violation of the lock-up agreements will be of no effect and null and void, regardless of whether the purported transferee has anyactual or constructive knowledge of the transfer restrictions in the applicable lock-up agreement, and will not be recorded on the stock transfer books of theCompany.87 7.C.Interests of experts and counselNot applicable.ITEM 8.FINANCIAL INFORMATION8.A.Consolidated statements and other financial informationOur financial statements are included in this annual report pursuant to Item 18. As described in Item 3.A. above, since November 15, 2017, the mergerhas been reflected in our financial statements as a recapitalization whereby Arcturus is the deemed accounting acquirer and Alcobra Ltd. is the deemedaccounting acquiree. Our financial statements reflect Arcturus’, not Alcobra Ltd.’s, results of operations and financial condition for all periods prior toNovember 15, 2017.Legal ProceedingsIsrael LitigationOn February 25, 2018, Joseph Payne, a current Director and former CEO of the Company, filed an action in the District Court at Tel Aviv – Yafoagainst the Company, its board of directors, Dr. Chivukula, and certain officers alleging that the separation agreement the Company entered into with aresigning officer, Dr. Chivukula, was unlawful and void, and seeking a restraining order and temporary remedies against the Company. Later that same day, inresponse to the plaintiff's ex parte request, the court issued a temporary restraining order, ordering the Company to preserve the status quo until the courtcould consider the matter further. On March 1, 2018, the Company filed a request for clarification of and partial relief from this order. On March 5, 2018, thecourt ruled on the Company’s request, clarifying its temporary restraining order was limited to the remedies sought in the February 25, 2018 motion. OnMarch 12, 2018, the Company filed an opposition to plaintiff's motion for a restraining order. On March 28, 2018, plaintiff filed a motion seeking to extendthe temporary restraining order and asking for various remedies related to a then-scheduled May 7, 2018 Extraordinary General Meeting of the Company’sshareholders that the Company noticed on March 11, 2018, including remedies that might affect the agenda of the Extraordinary General Meeting andtherefore the language of the proxy, and seeking to restrain certain conduct, including any changes in the Company’s share capital, until such ExtraordinaryGeneral Meeting. The court ordered the Company to file its answer to this motion by April 15, 2018. On April 8, 2018, the Company filed a notice with thecourt informing it that, inter alia, due to the fact that Mr. Payne chose to delay his submission of the motion to 'expand' the temporary remedies and toquestion the agenda of the Extraordinary General Meeting – on Friday, April 6, 2018, the Company's Board convened and approved the postponement of thedate of the Extraordinary General Meeting, until the court issues a decision on Mr. Payne's motion to ”expand” the temporary remedies. Later that day (April8, 2018), Mr. Payne moved for another temporary restraining order seeking to prevent the board from delaying the Extraordinary General Meeting. TheCompany responded to the motion to extend the temporary restraining order on April 15, 2018. On May 13, 2018, the court issued its ruling on the motion toexpand the temporary remedies. The court set the agenda of the Extraordinary General Meeting, and ordered the Company to convene a Board meetingwithin seven days, and to summon an Extraordinary General Meeting within 35 days from that date. In addition, the court ruled that the motion regardingchanges in the Company's share capital will be decided in a hearing scheduled for May 23, 2018. On April 18, 2018, the Company sent notice of a board meeting scheduled for April 20, 2018 to approve a private placement transaction. On April 20,2018, Mr. Payne obtained a temporary restraining order stating that any such approval by the board may be vacated by the court. On April 22, 2018, theCompany filed an opposition to the temporary restraining order, on April 25, 2018 the court held an emergency hearing on the temporary restraining order.On April 26, 2018 Mr. Payne and Dr. Chivukula filed a reply to the Company's opposition, and on April 27, 2018 certain other shareholders filed positionstatements with the court supporting Mr. Payne. On April 27, 2018, the Company filed a notice. On April 29, 2018, the court ruled that the temporaryrestraining order would stay in place. On May 2, 2018, the Company submitted a motion to amend the protocol of the hearing that took place on April 25,2018 and to reconsider the decision of April 29, 2018. The Company therefore asked the court to direct that cross- examinations will be held on the hearingscheduled for May 9, 2018, and afterwards the court will reconsider the decision of April 29, 2018. The court ordered Mr. Payne to answer the Company'smotions from May 2, 2018 by May 6, 2018. On May 6, 2018, the court ordered the Company to respond to Mr. Payne’s answer to the Company’s motionsfrom May 2, 2018 to May 8, 2018. Because of the proximity to the day set for hearing, the Company asked the court to schedule another hearing for thecross-examinations. On May 13, 2018, the court denied the Company's motion to amend the protocol of the hearing that took place on April 25, 2018, butgranted the Company's motion to reconsider the decision of April 29, 2018 and ordered that cross- examinations will be held on May 23, 2018.Chivukula ArbitrationOn March 21, 2018, the Company filed an arbitration demand before JAMS in San Diego, CA, seeking to arbitrate the validity of the separationagreement and related claims between the Company and Dr. Chivukula. On or about April 10, 2018, Dr. Chivukula filed an objection to the arbitration. On orabout April 12, 2018, the Company responded to his objection. On April 20, 2018 JAMS preliminarily rejected the basis for Dr. Chivukula’s objection to thearbitration and appointed Mr. Charles H. Dick, Jr. as the arbitrator. No arbitration date has been scheduled.88 California State Court LitigationOn March 27, 2018, the Company and Arcturus Therapeutics, Inc. filed an action in the Superior Court of the State of California, San Diego Countycaptioned Arcturus Therapeutics Ltd.; Arcturus Therapeutics, Inc. v. Joseph E. Payne, Case No. 37-2018-00015271-CU-BC-CTL alleging that Mr. Payne (1)breached his confidentiality and employment agreements, (2) breached his fiduciary duties to the plaintiffs during his service as President and CEO of theplaintiffs and as a director of the plaintiffs’ respective boards of directors, (3) interfered with contractual relations by encouraging Dr. Chivukula, a resigningofficer, to breach the consulting agreement entered into by and between Dr. Chivukula and Arcturus Therapeutics, Inc. and the voting trust agreement enteredinto by and between Dr. Chivukula and the Company, and (4) interfered with prospective business advantage by encouraging Company shareholders to voteagainst the ratification of the appointment of Ernst & Young LLP in the United States as the Company’s independent auditor. The lawsuit seeks injunctiveand monetary relief. Discovery requests have been served on Mr. Payne. The deadline for Mr. Payne to respond to the complaint and the discovery requests isMay 15, 2018. A civil case management conference has been set for August 31, 2018.California Federal Court LitigationOn April 19, 2018, the Company filed an action in the United States District Court, Southern District of California captioned Arcturus Therapeutics,Inc. v. Joseph E. Payne; Peter Farrell; Andrew Sassine; Bradley Sorenson; James Barlow; and Does 1 through 100, Case No. 18cv766-MMA(NLS) allegingthat the Defendants have violated and continue to violate Section 13(d) of the Exchange Act, 15 U.S.C. §78m(d), and Regulation 13D by failing to disclosein Schedule 13D filings the existence of group agreements to buy, sell, or vote shares of the Company and effect a change in the composition of theCompany’s board of directors. The lawsuit seeks injunctive relief. On April 24, 2018, the Company filed a motion seeking a Temporary Restraining Order,Preliminary Injunction, and Expedited Discovery. On April 25, 2018, the court denied the Company’s request for a Temporary Restraining Order butscheduled a hearing for the Company’s motion for a Preliminary Injunction and Expedited Discovery for May 21, 2018.DividendsWe have never declared or paid any cash dividends on our Ordinary Shares and do not anticipate paying any cash dividends in the foreseeable future.Payment of cash dividends, if any, in the future will be at the discretion of our Board of Directors and will depend on then-existing conditions, including ourfinancial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our Board of Directors may deemrelevant.The Israeli Companies Law imposes further restrictions on our ability to declare and pay dividends. See Item 10.B. “Articles of Association – Rights,Preferences and Restrictions of Shares” for additional information.Payment of dividends may be subject to Israeli and U.S. withholding taxes. See Item 10.E. “Taxation” for additional information.8.B.Significant changesThere have been no other significant changes from December 31, 2017 until the date of the filing of this annual report.89 ITEM 9.THE OFFER AND LISTING9.A.Offer and listing detailsOur Ordinary Shares were listed on the Nasdaq Capital Market from May 22, 2013 to March 28, 2014, and have been listed on the Nasdaq GlobalMarket since March 28, 2014. Prior to May 22, 2013 there was no public trading market for our Ordinary Shares. Our trading symbol on Nasdaq is “ARCT”(since November 16, 2017) and was previously “ADHD” (through the close of business on November 15, 2017). The following table sets forth for the periodsindicated the high and low sales prices per Ordinary Share as reported on the Nasdaq Global Market (and for periods prior to March 28, 2014, on the NasdaqCapital Market), as adjusted for our 1-for-7 reverse stock split effected on November 15, 2017: Annual Information: Low High 2017 $5.81 $18.04 2016 $12.39 $45.50 2015 $25.76 $66.50 2014 $21.84 $178.08 2013 $45.50 $188.72 Quarterly Information: First Quarter 2017 $5.81 $18.04 Second Quarter 2017 $7.07 $9.31 Third Quarter 2017 $6.52 $8.75 Fourth Quarter 2017 $6.72 $15.19 First Quarter 2016 $22.06 $45.50 Second Quarter 2016 $22.05 $40.25 Third Quarter 2016 $13.65 $37.52 Fourth Quarter 2016 $12.39 $20.30 Monthly Information: May 2018 (through May 9, 2018) $4.94 $5.97 April 2018 $4.90 $5.82 March 2018 $5.06 $6.54 February 2018 $4.78 $7.69 January 2018 $7.55 $10.45 December 2017 $7.94 $9.26 November 2017 $8.41 $11.48 9.B.Plan of distributionNot applicable.9.C.Market for Ordinary SharesOur Ordinary Shares are listed on the Nasdaq Global Market.9.D.Selling shareholdersNot applicable.9.E.DilutionNot applicable.90 9.F.Expenses of the issueNot applicable.ITEM 10.ADDITIONAL INFORMATION10.A.Share capitalNot applicable.10.B.Memorandum and Articles of AssociationSecurities RegisterWe are registered with the Israeli Registrar of Companies. Our registration number is 51-409899-5. Section 1.2 of our amended and restated articles ofassociation provides that we may engage in any type of lawful business.Authorized Share CapitalOn November 12, 2017, our shareholders approved amendments to our articles of association increasing our authorized share capital to NIS 2,100,000,divided into 30,000,000 Ordinary Shares of par value NIS 0.07 per share.Approval of Related Party Transactions Under Israeli LawThe Israeli Companies Law requires that certain transactions, actions and arrangements be approved as provided for in a company's articles ofassociation and in certain circumstances by the audit committee or the compensation committee, by the board of directors itself and/or by the shareholders.The vote required by the audit committee, compensation committee and the board of directors for approval of such matters, in each case, is a majority of thenon-conflicted (referred to under the Israeli Companies Law as “disinterested”) directors participating in a duly convened meeting. If, however, a majority ofthe members participating in any such committee or board meeting have a conflict of interest (a “personal interest,” under the Israeli Companies Law) in theapproval of such matter, then all directors may participate in the discussions and in the voting on such matter, and in such case the matter shall also besubject to shareholder approval.Approval of Transactions with Office HoldersThe Israeli Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that he or she may haveconcerning any existing or proposed transaction with the company, as well as any substantial information or document with respect thereof. An interestedoffice holder's disclosure must be made promptly and in any event no later than the first meeting of the board of directors at which the transaction isconsidered. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one's relative or of acorporate body in which such person or a relative of such person is a 5% or greater shareholder, director or chief executive officer or in which he or she hasthe right to appoint at least one director or the chief executive officer, but excluding a personal interest stemming from one's ownership of shares in thecompany. A personal interest furthermore includes the personal interest of a person for whom the office holder holds a voting proxy or the interest of theoffice holder with respect to his or her vote on behalf of the shareholder for whom he or she holds a proxy even if such shareholder itself has no personalinterest in the approval of the matter. An office holder is not, however, obliged to disclose a personal interest if it derives solely from the personal interest of arelative of such office holder in a transaction that is not considered an extraordinary transaction. Under the Israeli Companies Law, an extraordinarytransaction is defined as any of the following: •a transaction other than in the ordinary course of business; •a transaction that is not on market terms; or •a transaction that may have a material impact on a company's profitability, assets or liabilities.If it is determined that an office holder has a personal interest in a transaction, approval by the board of directors is required for the transaction, unlessthe company's articles of association provide for a different method of approval. Further, so long as an office holder has disclosed his or her personal interestin a transaction, the board of directors may approve an action by the office holder that would otherwise be deemed a breach of duty of loyalty. However, acompany may not approve a transaction or action that is adverse to the company's interest or that is not performed by the office holder in good faith.Approval first by the company's audit committee and subsequently by the board of directors is required for an extraordinary transaction in which an officeholder has a personal interest.91 Arrangements regarding the terms of engagement and compensation of directors generally require the approval of the compensation committee, the board ofdirectors and the shareholders. Arrangements concerning the terms of engagement and compensation of all other office holders generally require the approvalof the compensation committee and the board of directors, and, generally, in the case of the engagement and compensation of the chief executive officer, bythe shareholders as well pursuant to an ordinary majority that also constitutes a special, disinterested, majority, as described below under “Approval ofTransactions with Controlling Shareholders” (and which excludes controlling shareholders from being counted toward that special, disinterested, majority).Pursuant to the Israeli Companies Law, generally a director who has a personal interest in an extraordinary transaction which is brought for discussionbefore the board of directors or its committees shall neither vote in nor attend discussions concerning the approval of such transaction. If the director did voteor attend as aforesaid, the approval given to the aforesaid activity or arrangement will generally be invalid.Approval of Transactions with Controlling ShareholdersPursuant to Israeli law, the disclosure requirements regarding personal interests that apply to directors and executive officers also apply to acontrolling shareholder of a public company. In the context of a transaction involving a controlling shareholder or an officer who is a controlling shareholderof the Company, a controlling shareholder also includes any shareholder who holds 25% or more of the voting rights if no other shareholder holds more than50% of the voting rights. Two or more shareholders with a personal interest in the approval of the same transaction are deemed to be a single shareholder andmay be deemed a controlling shareholder for the purpose of approving such transaction. Extraordinary transactions, including private placement transactions,with a controlling shareholder or in which a controlling shareholder has a personal interest, and engagements with a controlling shareholder or his or herrelative, directly or indirectly, including through a corporation in his or her control, require the approval of the audit committee (or, in the case of acompensatory matter, by the compensation committee), the board of directors and the shareholders of the Company, in that order. Such shareholder approvalmust be by an ordinary majority that also fulfills one of the following, additional requirements (we refer to this below as a special, disinterested majority): •approval by a majority of the votes of shareholders who have no conflict of interest (referred to under the Israeli Companies Law as a personalinterest) in the approval of the proposal and who are present and voting, in person or by proxy, at the meeting; or •the votes of disinterested shareholders (as described in the previous bullet point) who vote against the proposal may not represent more than twopercent (2%) of the outstanding voting rights in the company.To the extent that any such transaction with a controlling shareholder is for a period extending beyond three years, approval is required once everythree years, unless the audit committee determines that the duration of the transaction is reasonable given the circumstances related thereto.Arrangements regarding the terms of engagement and compensation of a controlling shareholder who is an office holder, and the terms of employmentof a controlling shareholder who is an employee of the Company, require the approval of the compensation committee, board of directors and, generally, theshareholders, in that order.Shareholder DutiesPursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholdersand to refrain from abusing his or her power in the company, including, among other things, in voting at the general meeting of shareholders and at classshareholder meetings with respect to the following matters: •an amendment to the company’s articles of association; •an increase of the company’s authorized share capital; •a merger; or •the approval of interested party transactions and acts of office holders that require shareholder approval.A shareholder also has a general duty to refrain from discriminating against other shareholders.92 In addition, certain shareholders have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholderwho knows that it has the power to determine the outcome of a shareholder vote or a shareholder class vote and any shareholder who has the power to appointor to prevent the appointment of an office holder of the company or other power towards the company. The Israeli Companies Law does not define thesubstance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of theduty to act with fairness.Borrowing PowersPursuant to the Israeli Companies Law and our amended and restated articles of association, our Board of Directors may exercise all powers and takeall actions that are not required under law or under our amended and restated articles of association to be exercised or taken by our shareholders or othercorporate bodies, including the power to borrow money for company purposes.Rights, Preferences and Restrictions of Shares •General. Our share capital is NIS 2,100,000, divided into 30,000,000 Ordinary Shares, par value NIS 0.07 per share. The Ordinary Shares do nothave cumulative voting rights in the election of directors. As a result, the holders of Ordinary Shares that represent more than 50% of the votingpower have the power to elect all of the directors. •Dividend and liquidation rights. Our Board of Directors may declare a dividend to be paid to the holders of our Ordinary Shares according to theirrights and interests in our profits and may fix the record date for eligibility and the time for payment. The directors may from time to time pay tothe shareholders on account of the next forthcoming dividend such interim dividends as, in their judgment, our position justifies. All dividendsunclaimed for one year after having been declared may be invested or otherwise used by the directors for our benefit until claimed. No unpaiddividend or interest shall bear interest as against us. Our Board of Directors may determine that a dividend may be paid, wholly or partially, by thedistribution of certain of our assets or by a distribution of paid up shares, debentures or debenture stock or any of our securities or of any othercompanies or in any one or more of such ways in the manner and to the extent permitted by the Israeli Companies Law.Under Israeli law, dividends may only be paid out of our profits and other surplus funds, as defined in the Israeli Companies Law, as of the end ofthe most recent year or as accrued over a period of the most recent two years, whichever amount is greater, provided that there is no reasonableconcern that payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due •Transfer of shares; record dates. Fully paid up Ordinary Shares may be freely transferred pursuant to our amended and restated articles ofassociation unless such transfer is restricted or prohibited by another instrument or securities laws. Each shareholder who would be entitled toattend and vote at a general meeting of shareholders is entitled to receive notice of any such meeting. For purposes of determining the shareholdersentitled to notice and to vote at such meeting, the board of directors will fix a record date. •Voting; annual general and extraordinary meetings. Subject to any rights or restrictions for the time being attached to any class or classes of shares,each shareholder shall have one vote for each share of which he or she is the holder, whether on a show of hands or on a poll. Our amended andrestated articles of association do not permit cumulative voting and it is not mandated by Israeli law. Votes may be given either personally or byproxy. A proxy need not be a shareholder. If any shareholder is without legal capacity, he may vote by means of a trustee or a legal custodian, whomay vote either personally or by proxy. If two or more persons are jointly registered as owners of a share, the vote of the senior person who tendersa vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other registered holder(s) of the share and, for thispurpose seniority shall be determined by the order in which the names stand in the shareholder register. •Quorum for general meetings. The quorum required for our general meetings of shareholders consists of at least two shareholders present in person,by proxy or written ballot who hold or represent between them at least one-third of the total outstanding voting rights. A meeting adjourned forlack of a quorum is generally adjourned to the same day in the following week at the same time and place or to a later time/date if so specified inthe notice of the meeting. At the reconvened meeting, any two or more shareholders present in person or by proxy shall constitute a lawful quorum. •Notice of general meetings. Under the Israeli Companies Law, in certain cases at least 21 days’, and for other agenda items at least 35 days’, noticeof any general meeting, specifying the place, the day and the hour of the meeting and, in the case of special business, the nature of such business,shall be given in the manner hereinafter mentioned, to such shareholders as are under the provisions of our amended and restated articles ofassociation, entitled to receive notices from us. Only shareholders of record as reflected on our share register at the close of business on the datefixed by the board of directors as the record date determining the shareholders who will be entitled to vote, shall be entitled to vote, in person or byproxy, at a general meeting and any postponement or adjournment thereof.93 •Annual meeting; agenda; extraordinary meeting. Annual general meetings are held at least once in every calendar year at such time (within aperiod of 15 months after the holding of the last preceding General Meeting), and at such time and place as may be determined by the Board ofDirectors. At a general meeting, decisions shall be adopted only on matters that were specified on the agenda. Our Board of Directors is obligatedto call an extraordinary general meeting of the shareholders upon a written request in accordance with the Israeli Companies Law. The IsraeliCompanies Law provides that an extraordinary general meeting of shareholders shall be called based on (i) a decision of the board of directors, (ii)a request by two directors or 25% of the directors in office, or (iii) a request by shareholders holding at least 5% of the issued share capital of thecompany and at least 1% of the voting rights, or of shareholders holding at least 5% of the voting rights of the company. •Majority vote. Except as otherwise provided in our amended and restated articles of association or for matters requiring a special majority underthe Israeli Companies Law, any resolution at a general meeting shall be deemed adopted if approved by the holders of a majority of our votingrights represented at the meeting in person or by proxy and voting thereon. In the case of an equality of votes, the chairman of the meeting shallnot be entitled to a further vote. •Discrimination against shareholders. According to our amended and restated articles of association, there are no discriminating provisions againstany existing or prospective holders of our shares as a result of a shareholder holding a substantial number of shares.Modification of Class RightsIf, at any time, the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms ofissuance of the shares of that class) may be varied with the consent in writing of the holders of all the issued shares of that class, or with the sanction of amajority vote at a meeting of the shareholders passed at a separate meeting of the holders of the shares of the class. The provisions of our amended andrestated articles of association relating to general meetings shall apply, mutatis mutandis, to every such separate general meeting. Any holder of shares of theclass present in person or by proxy may demand a secret poll.Unless otherwise provided by the conditions of issuance, the enlargement of an existing class of shares, or the issuance of additional shares thereof,shall not be deemed to modify or abrogate the rights attached to the previously issued shares of such class or of any other class. These conditions provide forthe minimum shareholder approvals permitted by the Israeli Companies Law.Restrictions on Shareholders Rights to Own SecuritiesOur amended and restated articles of association and the laws of the State of Israel do not restrict in any way the ownership or voting or our shares bynon-residents of Israel, except with respect to subjects of countries that are in a state of war with Israel.Acquisitions under Israeli LawFull tender offerA person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company’s issued andoutstanding share capital or of a class of shares is required by the Israeli Companies Law to make a tender offer to all of the company’s shareholders for thepurchase of all of the issued and outstanding shares of the company or of the class (as applicable).If the shareholders who do not respond to or accept the offer hold less than 5% of the issued and outstanding share capital of the company or of theapplicable class of the shares, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, all of the shares that theacquirer offered to purchase will be transferred to the acquirer by operation of law. However, a tender offer will be accepted if the shareholders who do notaccept it hold less than 2% of the issued and outstanding share capital of the company or of the applicable class of the shares (regardless of the percentage ofshareholders who do not have a personal interest in the offer accept the offer).Upon a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder acceptedthe tender offer or not, may, within six months from the date of acceptance of the tender offer, petition the Israeli court to determine whether the tender offerwas for less than fair value and that the fair value should be paid as determined by the court. However, under certain conditions, the offeror may stipulate inthe terms of the tender offer that an offeree who accepted the offer will not be entitled to petition the Israeli court as described above.94 If the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of the company or of theapplicable class, the acquirer may not acquire from shareholders who accepted the tender offer shares of the company that will increase its holdings to morethan 90% of the company’s issued and outstanding share capital or of the applicable.Special tender offerThe Israeli Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as aresult of the acquisition the purchaser would become a holder of at least 25%, or more than 45%, of the voting rights in the company. This rule does notapply if there is already another holder of at least 25% or more than 45% (as applicable) of the voting rights in the company.These requirements do not apply if the acquisition (i) occurs in the context of a private offering, on the condition that the shareholders meetingapproved the acquisition as a private offering whose purpose is to give the acquirer at least 25% , or more than 45%, of the voting rights in the company ifthere is no person who holds at least 25%, or more than 45%, of the voting rights in the company, as applicable; or (ii) was from a shareholder holding at least25%, or more than 45%, of the voting rights in the company and resulted in the acquirer becoming a holder of at least 25%, or more than 45%, of the votingrights in the company.The special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company’s outstanding shares will be acquiredby the offeror and (ii) the special tender offer is accepted by a majority of the votes of those offerees who gave notice of their position in respect of the offer.In counting the votes of offerees, the votes of a holder of control in the offeror, a person who has personal interest in acceptance of the special tender offer, aholder of at least 25% of the voting rights in the company, or any person acting on their or on the offeror’s behalf, including their relatives or companiesunder their control, are not taken into account.In the event that a special tender offer is accepted, then the purchaser or any person or entity controlling it and any corporation controlled by themshall refrain from making a subsequent tender offer for the purchase of shares of the target company and may not execute a merger with the target company fora period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial specialtender offer.MergerThe Israeli Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain requirements described underthe Israeli Companies Law are met, a majority of each party’s shareholders, by a majority of each party’s shares that are voted on the proposed merger at ashareholders’ meeting.The board of directors of a merging company is required pursuant to the Israeli Companies Law to discuss and determine whether in its opinion thereexists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, takinginto account the financial condition of the merging companies. If the board of directors has determined that such a concern exists, it may not approve aproposed merger. Following the approval of the board of directors of each of the merging companies, the boards of directors must jointly prepare a mergerproposal for submission to the Israeli Registrar of Companies.For purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the shares voting at theshareholders meeting (excluding abstentions) that are held by parties other than the other party to the merger, any person who holds 25% or more of themeans of control of the other party to the merger or any one on their behalf (including their relatives or corporations controlled by any of them), vote againstthe merger.If the transaction would have been approved but for the separate approval of each class of shares or the exclusion of the votes of certain shareholdersas provided above, a court may still rule that the company has approved the merger upon the request of holders of at least 25% of the voting rights of acompany, if the court holds that the merger is fair and reasonable, taking into account the appraisal of the merging companies’ value and the considerationoffered to the shareholders.Under the Israeli Companies Law, each merging company must send a copy of the proposed merger plan to its secured creditors. Unsecured creditorsare entitled to receive notice of the merger, as provided by the regulations promulgated under the Israeli Companies Law. Upon the request of a creditor ofeither party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of themerger, the surviving company will be unable to satisfy the obligations of the target company. The court may also give instructions in order to secure therights of creditors.95 In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger was filed withthe Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies was obtained.Potential Issues that Could Delay a MergerCertain provisions of Israeli corporate and tax law may have the effect of delaying, preventing or making more difficult any merger or acquisition ofus. Any merger or acquisition of us may require the prior consent of the Israel Innovation Authority (formerly known as the Office of the Chief Scientist), aswell as the Investment Center See Item 3.D. “Risk Factors – Risks Related to Israeli Law and Our Operations in Israel.”Requirement of Disclosure of Shareholder OwnershipThere are no provisions of our amended and restated articles of association governing the ownership threshold above which shareholder ownershipmust be disclosed. We are subject, however, to U.S. securities rules that require beneficial owners of more than 5% of our Ordinary Shares to make certainfilings with the SEC.Changes in CapitalOur amended and restated articles of association do not impose any conditions governing changes in capital that are more stringent than required bythe Israeli Companies Law.10.C.Material contractsWe have not entered into any material contracts other than in the ordinary course of business and other than those described in Item 4 “Information onthe Company,” Item 5 “Operating and Financial Review and Prospects” or elsewhere in this annual report.10.D.Exchange controlsThere are currently no Israeli currency control restrictions on payments of dividends or other distributions with respect to our Ordinary Shares or theproceeds from the sale of shares, except for the obligation of Israeli residents to file reports with the Bank of Israel regarding certain transactions. However,legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.Non-residents of Israel who purchase our securities with non-Israeli currency will be able to repatriate dividends (if any), liquidation distributions andthe proceeds of any sale of such securities, into non-Israeli currencies at the rate of exchange prevailing at the time of repatriation, provided that anyapplicable Israeli taxes have been paid (or withheld) on such amounts.Neither our amended and restated articles of association nor the laws of the State of Israel restrict in any way the ownership or voting of OrdinaryShares by non-residents of Israel, except with respect to citizens of countries that are in a state of war with Israel.10.E.TaxationThe following is a summary of the current tax structure, which is applicable to companies in Israel, with special reference to its effect on us. Thefollowing also contains a discussion of material Israeli and U.S. tax consequences to persons purchasing our Ordinary Shares and government programs fromwhich we and some of our group companies benefit. To the extent that the discussion is based on new tax legislation, which has yet to be subject to judicialor administrative interpretation, there can be no assurance that the views expressed in the discussion will accord with any such interpretation in the future.The discussion is not intended and should not be construed as legal or professional tax advice and is not exhaustive of all possible tax considerations. AnIsraeli company that is subject to Israeli taxes on the income of its non-Israeli subsidiaries should receive a credit for income taxes paid/withheld or that willbe paid/withheld by the subsidiary in its country of residence, according to the terms and conditions determined in the Israeli Tax Ordinance.The following summary is included herein as general information only and is not intended as a substitute for careful tax planning. Accordingly, eachinvestor should consult his or her own tax advisor as to the particular tax consequences to such investor of the purchase, ownership or sale of an ordinaryshare, including the effect of applicable state, local, foreign or other tax laws and possible changes in tax laws.96 Israeli Taxation ConsiderationsThe following is a summary of the material Israeli income tax laws applicable to us. This section also contains a discussion of material Israeli incometax consequences concerning the ownership and disposition of our Ordinary Shares. This summary does not discuss all the aspects of Israeli income tax lawthat may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatmentunder Israeli law. Examples of this kind of investor include residents of Israel or traders in securities who are subject to special tax regimes not covered in thisdiscussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation, wecannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. This summary is based on laws andregulations in effect as of the date of this annual report and does not take into account possible future amendments which may be under consideration.General corporate tax structure in IsraelAs of January 1, 2018, Israeli resident companies, such as us, are generally subject to corporate tax at the rate of 23% on their taxable income. For theyears ended December 31, 2017 and 2016, the corporate tax rate was 24% and 25%, respectively.Capital gains derived by an Israeli resident company are generally subject to tax at the same rate as the corporate tax rate. Under Israeli tax legislation,a corporation will be considered as an “Israeli Resident” if it meets one of the following: (a) it was incorporated in Israel; or (b) its business is managed andcontrolled from Israel.Taxation of our Israeli shareholders on receipt of dividendsIsraeli residents who are individuals are generally subject to Israeli income tax for dividends paid on our Ordinary Shares (other than bonus shares orshare dividends) at a rate of 25%, or 30% if the recipient of such dividend is a “substantial shareholder” (as defined below) at the time of distribution or atany time during the preceding 12-month period.A “substantial shareholder” is generally a person who alone, or together with his relative or another person who collaborates with him on a regularbasis, holds, directly or indirectly, at least 10% of any of the “means of control” of the corporation. “Means of control” generally include the right to vote in ageneral meeting of shareholders, receive profits, nominate a director or an officer, receive assets upon liquidation, or instruct someone who holds any of theaforesaid rights regarding the manner in which he or she is to exercise such right(s), and whether by virtue of shares, rights to shares or other rights, or in anyother manner, including by means of voting or trusteeship agreements.The term “Israeli Resident” for individuals is generally defined under the Israeli Income Tax Ordinance [New Version], 1961, or the Israeli TaxOrdinance, as an individual whose center of life is in Israel. According to the Israeli Tax Ordinance, in order to determine the center of life of an individual,account will be taken of the individual’s family, economic and social connections, including: (a) the place of the individual’s permanent home; (b) the placeof residence of the individual and his family; (c) the place of the individual’s regular or permanent place of business or the place of his permanentemployment; (d) place of the individual’s active and substantial economic interests; (e) place of the individual’s activities in organizations, associations andother institutions. The center of life of an individual will be presumed to be in Israel if: (a) the individual was present in Israel for 183 days or more in the taxyear; or (b) the individual was present in Israel for 30 days or more in the tax year, and the total period of the individual’s presence in Israel in that tax yearand the two previous tax years is 425 days or more. The presumption in this paragraph may be rebutted either by the individual or by the assessing officer.Israeli resident corporations are generally exempt from Israeli corporate income tax with respect to dividends paid on our Ordinary Shares so long asthe profits out of which the dividends were paid, were derived in Israel.Capital Gains Taxes Applicable to Israeli Resident ShareholdersThe income tax rate applicable to Real Capital Gain derived by an Israeli individual from the sale of shares which had been purchased after January 1,2012, whether listed on a stock exchange or not, is 25%. However, if such shareholder is considered a “substantial shareholder” (as defined above) at the timeof sale or at any time during the preceding 12-month period and/or claims a deduction for interest and linkage differences expenses in connection with thepurchase and holding of such shares, such gain will be taxed at the rate of 30%.Moreover, capital gains derived by an individual shareholder who is a dealer or trader in securities, or to whom such income is otherwise taxable asordinary business income, are taxed in Israel at his/her marginal ordinary income tax rates (up to 50% in 2017, including excess tax as detailed below).97 Israeli resident corporations are generally subject to regular corporate tax rate (24% in 2017 and 23% as of 2018) with respect to capital gainsgenerated from the sale of our Ordinary Shares.Taxation of Non-Israeli Shareholders on Receipt of DividendsNon-Israeli residents are generally subject to Israeli income tax on the receipt of dividends paid on our Shares at the rate of 25% (or 30% forindividuals, if such individual is a “substantial shareholder” at the time receiving the dividend or on any date in the 12 months preceding such date), unless atax certificate is obtained in advance from the Israeli Tax Authority authorizing withholding-exempt remittances or a reduced rate of tax pursuant to anapplicable tax treaty between Israel and the shareholder’s country of residence.A non-Israeli resident who receives dividends from which tax was fully withheld is generally exempt from the duty to file tax returns in Israel inrespect of such income; provided that (i) such income was not derived from a business conducted in Israel by the taxpayer, (ii) the taxpayer has no othertaxable sources of income in Israel with respect to which a tax return is required to be filed and (iii) the taxpayer is not obliged to pay excess tax (as furtherexplained below).For example, under the Convention Between the Government of the United States of America and the Government of Israel with Respect to Taxes onIncome, as amended (the “U.S.-Israel Tax Treaty”), Israeli withholding tax on dividends paid to a U.S. resident for treaty purposes may not, in general, exceed25%, subject to certain conditions. Where the recipient is a U.S. corporation owning 10% or more of the outstanding shares of the voting stock of the payingcorporation during the part of the paying corporation’s taxable year which precedes the date of payment of the dividend and during the whole of its priortaxable year (if any) and not more than 25% of the gross income of the paying corporation for such prior taxable year (if any) consists certain interest ordividends, the Israeli tax withheld may not exceed 12.5%, subject to certain conditions.Payers of dividends on our Ordinary Shares, including the Israeli stockbroker effectuating the transaction, or the financial institution through whichthe securities are held, are generally required, subject to any of the foregoing exemptions, reduced tax rates and the demonstration of a shareholder regardinghis, her or its foreign residency, to withhold tax upon the distribution of dividend at the rate of 25% (whether the recipient is a substantial shareholder or not),so long as the shares are registered with a nominee company.Capital gains income taxes applicable to non-Israeli shareholders.Non-Israeli resident shareholders are generally exempt from Israeli capital gains tax on any gains derived from the sale, exchange or disposition of ourOrdinary Shares, provided that such shareholders did not acquire their shares prior to January 1, 2009 or acquired their shares after the Company was listed fortrading on a stock exchange and such gains were not derived from a permanent establishment or business activity of such shareholders in Israel. However,non-Israeli corporations' shareholders will not be entitled to the foregoing exemptions if an Israeli resident (i) has a controlling interest of more than 25% insuch non-Israeli corporation or (ii) is the beneficiary of or is entitled to 25% or more of the revenues or profits of such non-Israeli corporation, whetherdirectly or indirectly.In addition, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty.For example, under the U.S.-Israel Tax Treaty, the sale, exchange or disposition of our Ordinary Shares by a shareholder who is a U.S. resident (for purposes ofthe U.S.-Israel Tax Treaty) holding the Ordinary Shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S.-Israel TaxTreaty (such shareholder is referred to herein as a Treaty U.S. Resident), is generally exempt from Israeli capital gains tax unless: (i) such Treaty U.S. Residentis an individual and was present in Israel for 183 days or more in the aggregate during the relevant taxable year; (ii) such Treaty U.S. Resident holds, directlyor indirectly, shares representing 10% or more of our voting power of the Company during any part of the 12 month period preceding such sale, exchange ordisposition, subject to certain conditions; (iii) the capital gains arising from such sale, exchange or disposition are attributable to a permanent establishmentof the Treaty U.S. Resident located maintained in Israel, subject to certain conditions; (iv) the capital gains arising from such sale, exchange or disposition isattributed to real estate located in Israel; or (v) the capital gains arising from such sale, exchange or disposition is attributed to royalties. In any such case, thesale, exchange or disposition of our Ordinary Shares would be subject to Israeli tax, to the extent applicable. However, under the U.S.-Israel Tax Treaty, suchTreaty U.S. Resident would be permitted to claim a credit for such taxes against U.S. federal income tax imposed on any gain from such sale, exchange ordisposition, under the circumstances and subject to the limitations specified in the U.S.-Israel Income Tax Treaty.Regardless of whether shareholders may be liable for Israeli income tax on the sale of our Ordinary Shares, the payment of the consideration may besubject to withholding of Israeli tax at the source. Accordingly, shareholders may be required to demonstrate that they are exempt from tax on their capitalgains in order to avoid withholding at source at the time of sale. Specifically, in transactions involving a sale of all of the shares of an Israeli residentcompany, in the form of a merger or otherwise, the Israel Tax Authority may require from shareholders who are not liable for Israeli tax to sign declarations informs specified by this authority or obtain a specific exemption from the Israel Tax Authority to confirm their status as non-Israeli resident, and, in theabsence of such declarations or exemptions, may require the purchaser of the shares to withhold taxes at source.98 Excess TaxIndividuals who are subject to tax in Israel are also subject to an additional income tax at a rate of 2% (increased to 3% beginning in 2017 andthereafter) on annual taxable income or gain exceeding a certain threshold (NIS 803,520 for 2016 and NIS 640,000 for 2017 and thereafter, which amount islinked to the annual change in the Israeli consumer price index), including, but not limited to, dividends, interest and capital gain.Estate and gift taxCurrently, Israeli law does not impose estate or gift taxes.Material United States Federal Income Tax ConsiderationsThe following discussion is a summary of U.S. federal income tax considerations of the purchase, ownership and disposition of our Ordinary Shares.This discussion applies only to holders that hold our Ordinary Shares as capital assets (generally, property held for investment) for U.S. federal income taxpurposes. This discussion is based on current provisions of the Code, existing and proposed U.S. Treasury Regulations promulgated thereunder, and currentadministrative rulings and judicial decisions, all as in effect as of the date of this Annual Report on Form 20-F, and all of which are subject to change or todiffering interpretation, possibly with retroactive effect. Any change could alter the tax consequences to our shareholders described in this Annual Report onForm 20-F. There can be no assurance that the IRS will not challenge one or more of the tax consequences described in this Annual Report on Form 20-F.U.S. Federal Income TaxationThis discussion does not address all aspects of U.S. federal income taxation that may be relevant to a particular shareholder in light of thatshareholder's individual circumstances nor does it address any aspects of U.S. state, local or non-U.S. taxes, the alternative minimum tax, the estate or gifttaxes, or the Medicare tax on net investment income. This discussion also does not consider any specific facts or circumstances that may apply to ashareholder and does not address the special tax rules applicable to particular shareholders, such as: •financial institutions; •brokers or dealers in securities; •tax-exempt organizations; •pension plans; •owners that hold our Ordinary Shares as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment; •traders in securities that have elected the mark-to-market method of accounting for their securities holdings; •insurance companies; •controlled foreign corporations; •passive foreign investment companies; •persons that have a functional currency other than the U.S. dollar; •persons who have acquired our Ordinary Shares pursuant to the exercise of an option or otherwise in a compensatory transaction; •persons that own, or are deemed to own, more than five percent of our Ordinary Shares (except to the extent specifically set forth below); •accrual-method taxpayers subject to special tax accounting rules under Section 451(b) of the Code;99 •non-U.S. governments; and •certain U.S. expatriates.This discussion does not address the tax treatment of partnerships or other entities that are pass-through (or disregarded) entities for U.S. federalincome tax purposes or persons who hold their Ordinary Shares through partnerships or such other pass-through or disregarded entities. The tax treatment of apartner in an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes generally will depend upon the status of the partnerand the activities of the partnership. A partner in a partnership or other pass-through entity that will hold our Ordinary Shares should consult his, her or its own tax advisor regarding the tax consequences of acquiring, holding and disposing of our Ordinary Shares through a partnership or other pass-throughentity, as applicable.For purposes of this discussion, the term “Non-U.S. Holder” means an applicable beneficial owner of our Ordinary Shares that is not a U.S. Holder. Asused in this discussion, the term “U.S. Holder” means: •an individual who is a citizen or resident of the United States; •a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the UnitedStates or of any state thereof or the District of Columbia; •an estate the income of which is subject to U.S. federal income taxation regardless of its source; or •a trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority tocontrol all substantial decisions of the trust or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated asa U.S. person.THIS DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IS NOT, AND IS NOT INTENDED TO BE, LEGAL OR TAX ADVICE.SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S.INCOME AND OTHER TAX CONSIDERATIONS OF ACQUIRING, HOLDING AND DISPOSING OF OUR ORDINARY SHARES. IN ADDITION,SIGNIFICANT CHANGES IN U.S. FEDERAL INCOME TAX LAWS WERE RECENTLY ENACTED. SHAREHOLDERS SHOULD ALSO CONSULTWITH THEIR TAX ADVISORS WITH RESPECT TO SUCH CHANGES IN U.S. TAX LAW AS WELL AS POTENTIAL CONFORMING CHANGESIN STATE TAX LAWS.Treatment of the Company as a U.S. Corporation for U.S. Federal Income Tax PurposesWe believe that we are treated as a U.S. domestic corporation for U.S. federal income tax purposes under Section 7874 of the Code and therefore we aresubject to U.S. federal income tax. We have not sought or obtained an opinion of legal counsel or a ruling from the U.S. Internal Revenue Service, which werefer to as the IRS, regarding our treatment as a U.S. domestic corporation. Accordingly, there can be no assurance that the IRS will not challenge ourtreatment as a U.S. domestic corporation or that the U.S. courts will uphold our status as a U.S. domestic corporation in the event of an IRS challenge. Thissummary assumes that we will be treated as a U.S. domestic corporation for U.S. federal income tax purposes.U.S. HoldersDistributions on Our Ordinary Shares to U.S. HoldersAs discussed under “Dividends” in Item 8.A. above, we do not expect to make cash dividends to holders of our Ordinary Shares in the foreseeablefuture. Distributions, if any, on our Ordinary Shares generally will constitute dividends for U.S. federal income tax purposes to the extent paid from ourcurrent or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulatedearnings and profits, the excess will be treated as a tax-free return of the U.S. Holder’s investment, up to such shareholder’s tax basis in the Ordinary Shares.Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading “Sale, Exchange or Other TaxableDisposition of Our Ordinary Shares by U.S. Holders.” Subject to applicable limitations and requirements, dividends received on our Ordinary Sharesgenerally should be eligible for the “dividends received deduction” available to corporate shareholders. Dividends paid by us to a non-corporate U.S. Holdergenerally will be eligible for taxation at preferential rates if certain holding period requirements are met.100 Any dividends paid by us to U.S. Holders are expected to be treated as U.S.-source for U.S. federal income tax purposes. As described in Item 10.E.“Taxation—Israeli Taxation Considerations,” dividends paid with respect to our Ordinary Shares might be subject to Israeli withholding taxes. For U.S.federal income tax purposes, the amount of a dividend would include any amounts withheld by us in respect of Israeli taxes. U.S. Holders should consult theirtax advisers as to whether the rate of any such Israeli taxes may be reduced under the provisions of the U.S.-Israeli income tax treaty and the creditability ofsuch Israeli taxes in their particular circumstances.The US dollar value of any distribution made by us in foreign currency will be calculated by reference to the exchange rate in effect on the date of theU.S. Holder’s actual or constructive receipt of such distribution, regardless of whether the foreign currency is in fact converted into U.S. dollars. If the foreigncurrency is converted into U.S. dollars on such date of receipt, the U.S. Holder generally will not recognize foreign currency gain or loss on such conversion.If the foreign currency is not converted into U.S. dollars on the date of receipt, such U.S. Holder will have a basis in the foreign currency equal to its U.S.dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other taxable disposition of the foreign currency generally will be U.S.-source ordinary income or loss to such U.S. Holder.Sale, Exchange or Other Taxable Disposition of Our Ordinary Shares by U.S. HoldersA U.S. Holder will recognize gain or loss for U.S. federal income tax purposes upon a sale or other taxable disposition of our Ordinary Shares in anamount equal to the difference between the amount realized from such sale or disposition and the U.S. Holder's adjusted tax basis in such Ordinary Shares. A U.S. Holder's adjusted tax basis in our Ordinary Shares generally will be the U.S. Holder's cost for such Ordinary Shares. Any such gain or loss generally willbe U.S.-source capital gain or loss and will be long-term capital gain or loss if, on the date of sale or disposition, such U.S. Holder held such Ordinary Sharesfor more than one year. Long-term capital gains derived by non-corporate U.S. Holders are eligible for taxation at reduced rates. The deductibility of capitallosses is subject to significant limitations.Information Reporting and Backup Withholding for U.S. HoldersWe must report annually to the IRS and to each U.S. Holder the gross amount of the distributions on our Ordinary Shares paid to such holder and thetax withheld, if any, with respect to such distributions. Payments of dividends on or proceeds arising from the sale or other taxable disposition of our Ordinary Shares by U.S. Holders generally will be subject to information reporting and backup withholding if a U.S. Holder (i) fails to furnish such U.S.Holder's correct U.S. taxpayer identification number (generally on IRS Form W-9), (ii) furnishes an incorrect U.S. taxpayer identification number, (iii) isnotified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding, or (iv) fails to certify under penalty ofperjury that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subjectto backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules generally will be allowed asa credit against a U.S. Holder’s U.S. federal income tax liability or will be refunded, if the U.S. Holder furnishes the required information to the IRS in a timelymanner.Non-U.S. HoldersDistributions on Our Ordinary Shares to Non-U.S. HoldersAs discussed under “Dividends” in Item 8.A. above, we do not expect to make cash dividends to holders of our Ordinary Shares in the foreseeablefuture. Distributions, if any, on our Ordinary Shares generally will constitute dividends for U.S. federal income tax purposes to the extent paid from ourcurrent or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulatedearnings and profits, the excess will be treated as a tax-free return of the Non-U.S. Holder’s investment, up to such shareholder’s tax basis in the OrdinaryShares. Any remaining excess will be treated as capital gain, subject to the tax treatment described below under the heading “Sale, Exchange or OtherTaxable Disposition of Our Ordinary Shares by Non-U.S. Holders.” Any such distributions will also be subject to the discussion below under the headings“Information Reporting and Backup Withholding for Non-U.S. Holders” and “FATCA for Non-U.S. Holders.”Dividends paid to a Non-U.S. Holder generally will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may bespecified by an applicable income tax treaty between the United States and such holder’s country of residence.Dividends that are treated as effectively connected with a trade or business conducted by a Non-U.S. Holder within the United States, and, if anapplicable income tax treaty so provides, that are attributable to a permanent establishment or a fixed base maintained by the Non-U.S. Holder within theUnited States, are generally exempt from the 30% withholding tax if the Non-U.S. Holder satisfies applicable certification and disclosure requirements(generally including provision of a valid IRS Form W-8ECI (or applicable successor form) certifying that the dividends are effectively connected with theNon-U.S. Holder’s conduct of a trade or business within the United101 States). However, such U.S. effectively connected income, net of specified deductions and credits, is taxed in the hands of the Non-U.S. Holder at the samecorporate or graduated individual U.S. federal income tax rates applicable to United States persons (as defined in the Code). Any U.S. effectively connectedincome received by a Non-U.S. Holder that is classified as a corporation for U.S. federal income tax purposes may also be subject to an additional “branchprofits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country ofresidence.A Non-U.S. Holder of our Ordinary Shares who claims the benefit of an applicable income tax treaty between the United States and such holder’scountry of residence generally will be required to provide a properly executed IRS Form W-8BEN or W-8BEN-E (or successor form) and satisfy applicablecertification and other requirements. Non-U.S. Holders are urged to consult their own tax advisors regarding their entitlement to benefits under a relevantincome tax treaty and the specific methods available to them to satisfy these requirements.A Non-U.S. Holder that is eligible for a reduced rate of U.S. withholding tax under an income tax treaty may obtain a refund or credit of any excessamounts withheld by timely filing an appropriate claim for a refund with the IRS.Sale, Exchange or Other Taxable Disposition of Our Ordinary Shares by Non-U.S. HoldersSubject to the discussion below under the headings “Information Reporting and Backup Withholding for Non-U.S. Holders” and “FATCA for Non-U.S. Holders,” a Non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon such Non-U.S.Holder’s sale, exchange or other taxable disposition of our Ordinary Shares unless: •the gain is effectively connected with the Non-U.S. Holder’s conduct of a U.S. trade or business and, if an applicable income tax treaty so provides,the gain is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States, in which case the Non-U.S. Holder generally will be taxed on a net income basis at the corporate or graduated individual U.S. federal income tax rates applicable toUnited States persons (as defined in the Code) and, if the Non-U.S. Holder is a foreign corporation, the branch profits tax described above in“Distributions on Our Ordinary Shares to Non-U.S. Holders” also may apply; •the Non-U.S. Holder is a non-resident alien individual present in the United States for a period or periods aggregating 183 days or more in thetaxable year of the disposition and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax (or such lowerrate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence) on the net gainderived from the disposition, which may be offset by certain U.S.-source capital losses of the non- U.S. Holder recognized in the taxable year of thedisposition, if any; or •we are, or have been, at any time during the five-year period preceding such disposition (or the Non-U.S. Holder’s holding period, if shorter) a “U.S.real property holding corporation” unless our Ordinary Shares are regularly traded on an established securities market and the Non-U.S. Holderholds no more than 5% of our outstanding Ordinary Shares, directly or indirectly, at any time during the shorter of the five-year period ending onthe date of the disposition or the period that the Non-U.S. Holder held our Ordinary Shares. Generally, a corporation is a “U.S. real property holdingcorporation” if the fair market value of its “U.S. real property interests” (as defined in the Code and applicable Treasury Regulations) equals orexceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade orbusiness. Although there can be no assurance, we believe that we are not currently, and we do not anticipate becoming, a “U.S. real propertyholding corporation” for U.S. federal income tax purposes. If we are a U.S. real property holding corporation and either our Ordinary Shares are notregularly traded on an established securities market or a Non-U.S. Holder holds more than 5% of our outstanding Ordinary Shares, directly orindirectly, during the applicable testing period, such Non-U.S. Holder’s gain on the disposition of our Ordinary Shares generally will be taxed inthe same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally willnot apply. If we are a U.S. real property holding corporation and our Ordinary Shares are not regularly traded on an established securities market, aNon-U.S. Holder’s proceeds received on the disposition of Ordinary Shares will also generally be subject to withholding at a rate of 15%. Non-U.S.Holders are encouraged to consult their own tax advisors regarding the possible consequences to them if we are, or were to become, a U.S. realproperty holding corporation.Information Reporting and Backup Withholding for Non-U.S. HoldersWe must report annually to the IRS and to each Non-U.S. Holder the gross amount of the distributions on our Ordinary Shares paid to such holder andthe tax withheld, if any, with respect to such distributions. Non-U.S. Holders generally will have to comply with specific certification procedures to establishthat the holder is not a United States person (as defined in the Code) in order to avoid backup withholding at the applicable rate with respect to dividends onour Ordinary Shares. Generally, a Non-U.S. Holder will comply102 with such procedures if it provides a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable Form W-8), or otherwise meets the documentaryevidence requirements for establishing that it is a Non-U.S. Holder, or otherwise establishes an exemption (and the payor does not have actual knowledge orreason to know that such holder is a United States person). Dividends paid to Non-U.S. Holders subject to withholding of U.S. federal income tax, asdescribed above under “Distributions on Our Ordinary Shares,” will generally be exempt from U.S. backup withholding.Information reporting and backup withholding, currently at a rate of 24%, generally will apply to the proceeds of a disposition of our Ordinary Sharesby a Non-U.S. Holder effected by or through the U.S. office of any broker, whether U.S. or non-U.S., unless the holder certifies its status as a Non-U.S. Holderand satisfies certain other requirements, or otherwise establishes an exemption from backup withholding. Generally, information reporting and backupwithholding will not apply to a payment of disposition proceeds to a Non-U.S. Holder where the transaction is effected outside the United States through anon-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S.ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. Holders shouldconsult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.Copies of information returns may be made available to the tax authorities of the country in which the Non-U.S. Holder resides or is incorporatedunder the provisions of a specific treaty or agreement.Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder can berefunded or credited against the Non-U.S. Holder’s U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.FATCA for Non-U.S. HoldersThe Foreign Account Tax Compliance Act, or FATCA, generally imposes a 30% withholding tax on dividends on, and gross proceeds from the sale ordisposition of, our Ordinary Shares paid to a foreign entity unless (i) if the foreign entity is a “foreign financial institution,” the foreign entity undertakescertain due diligence, reporting, withholding, and certification obligations, (ii) if the foreign entity is not a “foreign financial institution,” the foreign entityidentifies certain of its U.S. investors, if any, or (iii) the foreign entity is otherwise exempt from FATCA.Withholding under FATCA generally applies (1) to payments of dividends on our Ordinary Shares, and (2) to payments of gross proceeds from a saleor other disposition of our Ordinary Shares made after December 31, 2018. An intergovernmental agreement between the United States and an applicableforeign country may modify the requirements described in this section. Under certain circumstances, a Non-U.S. Holder may be eligible for refunds or creditsof the tax. Non-U.S. Holders should consult their own tax advisors regarding the possible implications of FATCA on their investment in our Ordinary Sharesand the entities through which they hold our Ordinary Shares, including, without limitation, the process and deadlines for meeting the applicablerequirements to prevent the imposition of the 30% withholding tax under FATCA.THE PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY. IT ISNOT LEGAL OR TAX ADVICE. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR U.S.FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, HOLDING AND DISPOSING OF OUR ORDINARY SHARES,INCLUDING THE CONSEQUENCES OF ANY PROPOSED OR RECENTLY ENACTED CHANGES IN APPLICABLE LAWS.10.F.Dividends and paying agentsNot applicable.10.G.Statement by expertsNot applicable.103 10.H.Documents on displayWe are subject to certain of the information reporting requirements of the Exchange Act. As a foreign private issuer, we are exempt from the rules andregulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders areexempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and saleof our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whosesecurities are registered under the Exchange Act. However, we are required to file with the SEC, within four months after the end of each fiscal year, an annualreport on Form 20-F containing financial statements audited by an independent accounting firm. We publish unaudited interim financial information afterthe end of each quarter. We furnish this quarterly financial information to the SEC under cover of a Form 6-K. We expect that we will be an emerging growthcompany until January 1, 2019.You may read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, D.C. 20549. You mayalso obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington, D.C. 20549.The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronicallywith the SEC. The address of this website is http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the publicreference facilities.10.I.Subsidiary informationNot applicable.ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKIn the ordinary course of our operations, we are exposed to certain market risks, primarily changes interest rates.Quantitative and Qualitative Disclosure About Market RiskInterest RatesWe are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position dueto adverse changes in financial market prices and rates. Our current investment policy was drafted to: (i) preserve principal (capital); (ii) maintain liquidity inaccordance with cash flow requirements; and (iii) maximize the rate of return within the stated guidelines in the policy. Accordingly, a majority of our cashand cash equivalents is held in deposits that bear interest. Given the current low rates of interest we receive, we will not be adversely affected if such rates arereduced. Our investment policy is monitored by the Company’s Audit Committee.As of December 31, 2017, our unrestricted cash and cash equivalents and short-term investments totaled $48.6 million. Our current investment policyhas the following objectives: (i) preserve principal (capital); (ii) maintain liquidity in accordance with cash flow requirements; and (iii) maximize the rate ofreturn within the stated guidelines in the policy. To achieve these goals, we invest available cash in bank deposits with banks that have a credit rating of atleast Baa1/BBB+ and in tradable securities with high credit quality and trading liquidity, including U.S. Treasury bonds, money market funds, and corporatedebt instruments that carry a rating of A2/A or better. A portion of our investments may be subject to interest rate risk and could fall in value if market interestrates increase. Our interest rate exposure is mitigated by the short-term duration of our investments. If market interest rates were to decrease immediately anduniformly by 50 basis points, or one-half of a percentage point, from levels at December 31, 2017, the net fair value of our interest-sensitive financialinstruments would not have a significant effect on our results of operations. We do not enter into investments for trading or speculative purposes and havenot used any derivative financial instruments to manage our interest rate risk exposure. We have not been exposed nor do we anticipate being exposed tomaterial risks due to changes in interest rates.Foreign Currency Exchange RiskOur results of operations and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. The vast majority of our liquidassets is held in U.S. dollars, and a certain portion of our expenses is denominated in NIS. We do not hedge our foreign currency exchange risk. In the future,we may enter into formal currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of our principaloperating currencies. These measures, however, may not adequately protect us from the material adverse effects of such fluctuations.ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESThe Company does not have any outstanding American Depositary Shares or American Depositary Receipts.104 PART IIITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSNone.ITEM 15.CONTROLS AND PROCEDURES(a) Disclosure Controls and ProceduresOur management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of ourdisclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2017, or theEvaluation Date. Based on such evaluation, those officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures are effectivein recording, processing, summarizing and reporting, on a timely basis, information required to be included in periodic filings under the Exchange Act andthat such information is accumulated and communicated to management, including our principal executive and financial officer, as appropriate to allowtimely decisions regarding required disclosure.(b) Management's Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule13a-15(f) under the Exchange Act. Under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness ofour internal control over financial reporting based principally on the framework and criteria established in Internal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission as of the end of the period covered by this report. Based on thatevaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2017 at providing reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.(c) Attestation Report of the Registered Public Accounting FirmThis annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financialreporting due to an exemption for emerging growth companies provided in the JOBS Act.(d) Changes in Internal Control over Financial ReportingWe completed the merger on November 15, 2017. As part of our ongoing activities after the merger, we are continuing to integrate our financialreporting functions and our controls and procedures between our legacy Arcturus and Alcobra Ltd. businesses. We have also been augmenting our company-wide controls to reflect the risks inherent in a business combination of the magnitude and complexity of the merger.Other than as described in the foregoing paragraph, there were no other changes in our internal controls over financial reporting that occurred duringthe year ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.ITEM 16A.Audit Committee Financial ExpertOur Board of Directors has determined that Mr. Willett, a member of our audit committee, is an audit committee financial expert, as defined under therules under the Exchange Act, and is independent in accordance with applicable Exchange Act rules and Nasdaq rules.105 ITEM 16B.Code of EthicsWe have adopted a written code of ethics that applies to our executive officers and employees and persons performing similar functions as well as ourdirectors. Our Code of Business Conduct and Ethics is posted on our website at www.arcturusrx.com the content of which website is not incorporated herein.ITEM 16C.Principal Accountant Fees and ServicesThe following table sets forth the fees billed to us and our subsidiaries by our principal accountants Kost, Forer, Gabbay and Kasierer, a member ofErnst & Young Global, an independent registered public accounting firm, which served as our principal accountant for the year ended December 31, 2017and Ernst & Young LLP, an independent registered public accounting firm, which served as the principal accountant for Arcturus Therapeutics, Inc., theaccounting acquirer in the merger for the years ended December 31, 2016 and 2015. (US Dollars in thousands) 2017 2016 Audit fees (1) $326 $252 Audit-related fees (2) 171 - Tax fees (3) 210 - All other fees - - Total $707 $252 (1)Includes fees for professional services rendered by our principal accountant in connection with the audit of our consolidated annual financialstatements and services that would normally be provided by our principal accountant in connection with statutory and regulatory filings orengagements. (2)Audit-related fees are fees for assurance and related services rendered by our respective principal accountants that are reasonably related to theperformance of their audit of our financial statements and that are not reported under “Audit-fees” above. (3)Tax fees are fees for services rendered by our respective principal accountants in connection with tax compliance, tax planning and tax advice.Pre-Approval of Auditors' CompensationOur audit committee has a pre-approval policy for the engagement of our independent registered public accounting firm to perform certain audit andnon-audit services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the auditcommittee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit services, audit-related services and tax servicesthat may be performed by our independent registered public accounting firm. If a type of service, that is to be provided by our auditors, has not received suchgeneral pre-approval, it will require specific pre-approval by our audit committee. The policy prohibits retention of the independent registered publicaccounting firm to perform the prohibited non-audit functions defined in applicable SEC rules.ITEM 16D.Exemptions from the Listing Standards for Audit CommitteesNot applicable.ITEM 16E.Purchases of Equity Securities by the Issuer and Affiliated PurchasersNot applicable.ITEM 16F.Change in Registrant's Certifying Accountant(a)(1)(i) Ernst & Young LLP, which served prior to the merger as the principal accountant of Arcturus Therapeutics, Inc., the accounting acquirer in themerger, has been dismissed as the independent auditor of the registrant in regard to the audit of the December 31, 2017 financial statements. The client-auditor relationship between Arcturus Therapeutics Ltd. and Ernst & Young LLP has ceased upon the issuance of their audit report on the December 31, 2016and 2015 financial statements included in this Form 20-F.The existing auditor of the legal acquirer in the merger (Arcturus Therapeutics Ltd., formerly known as Alcobra Ltd.), Kost Forer Gabbay & Kasierer, amember of Ernst & Young Global (“Kost Forer Gabbay & Kasierer”) was asked to remain the principal accountant of our company following the merger.106 (ii) The reports of Ernst & Young LLP issued on May 14, 2018 on the financial statements of Arcturus Therapeutics, Inc. for each of the two fiscalyears ended December 31, 2016 and 2015 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty,audit scope, or accounting principles.(iii) Prior to consummation of the merger, we retained Kost Forer Gabbay & Kasierer as our principal accountant, and it continued to serve in that rolefollowing the merger. Consequently, we did not retain Ernst & Young LLP to serve as our principal accountant for the year ended December 31, 2017. Inaccordance with the requirements of the Israeli Companies Law, our decision to retain Kost Forer Gabbay & Kasierer was recommended and/or approved byeach of (a) the audit committee of our board of directors, (b) our board of directors and (c) our shareholders. Under the Israeli Companies Law, we were notdeemed to have changed our principal accountant after the merger, since our company as a legal entity continued to retain Kost Forer Gabbay & Kasierer toperform services as our principal accountant after the merger. Therefore, no affirmative action was required for our not retaining Kost Forer Gabbay &Kasierer. Our shareholders approved Kost Forer Gabbay & Kasierer as our principal accountant for fiscal year 2017 at our 2017 annual general meeting ofshareholders, which was held in October 2017.(iv) During each of the two fiscal years ended December 31, 2016 and 2015 and through the interim period preceding the non-continuation of Ernst &Young LLP’s services, there were no disagreements with Ernst & Young LLP on any matter of accounting principles or practices, financial statementdisclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Ernst & Young LLP, would have caused Ernst & Young LLP to makereference to the matter in connection with its reports on Arcturus Therapeutics, Inc.’s financial statements.(v) During each of the two fiscal years ended December 31, 2016 and 2015 and through the interim period preceding the non-continuation of Ernst &Young LLP’s services, none of the reportable events listed in paragraphs (a)(1)(v)(A) through (D) of Item 16F of the SEC’s Form 20-F occurred.(2) Based on the recommendation and/or approval by each of (a) the audit committee of our board of directors, (b) our board of directors and (c) ourshareholders (at our 2017 annual general meeting of shareholders held in October 2017), Kost Forer Gabbay & Kasierer was engaged as our principalaccountant for the fiscal year ending December 31, 2017. Prior to its engagement, we did not consult with Kost Forer Gabbay & Kasierer regarding matters orevents set forth in paragraphs (a)(2)(i) or (a)(2)(ii) of Item 16F of the SEC’s Form 20-F related to Arcturus Therapeutics, Inc.(3) We have provided Ernst &Young LLP with a copy of the disclosures that we have made in response to this Item 16F(a) and requested that Ernst&Young LLP furnish us with a letter addressed to the SEC stating whether it agrees with the above statements made by us in response to this Item 16F(a) and,if not, stating the respects in which it does not agree with such statements. Ernst &Young LLP’s response letter is filed as Exhibit 15.3 to this annual report onForm 20-F.ITEM 16G.Corporate GovernanceThe Sarbanes-Oxley Act, as well as related rules subsequently implemented by the SEC, requires foreign private issuers, such as us, to comply withvarious corporate governance practices. In addition, we are required to comply with the Nasdaq Listing Rules. Under those Nasdaq Listing Rules, we mayelect to follow certain corporate governance practices permitted under the Israeli Companies Law in lieu of compliance with corresponding corporategovernance requirements otherwise imposed by the Nasdaq Listing Rules for U.S. domestic issuers.In accordance with Israeli law and practice and subject to the exemption set forth in Rule 5615 of the Nasdaq Listing Rules, we have elected to followthe provisions of the Israeli Companies Law, rather than the Nasdaq Listing Rules, with respect to the following requirements: •Distribution of periodic reports to shareholders; proxy solicitation. As opposed to the Nasdaq Listing Rules, which require listed issuers to makesuch reports available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute periodic reports directlyto shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reportsavailable through a public website. In addition to making such reports available on a public website, we currently make our audited financialstatements available to our shareholders at our offices and will only mail such reports to shareholders upon request. As a foreign private issuer, weare generally exempt from the SEC's proxy solicitation rules.107 •Compensation of officers. Israeli law and our amended and restated articles of association do not require that the independent members of ourBoard of Directors (or a compensation committee composed solely of independent members of our Board of Directors) determine an executiveofficer’s compensation, as is generally required under the Nasdaq Listing Rules with respect to the Chief Executive Officer and all otherexecutive officers. Instead, compensation of executive officers is determined and approved by our Compensation Committee and our Board ofDirectors, and in certain circumstances by our shareholders, either consistently with our Compensation Policy or, in special circumstances indeviation therefrom, taking into account certain considerations stated in the Israeli Companies Law. •Shareholder approval. We will seek shareholder approval for all corporate actions requiring such approval under the requirements of the IsraeliCompanies Law, rather than seeking shareholder approval for certain corporate actions in accordance with Nasdaq Listing Rule 5635. Inparticular, under this Nasdaq rule, shareholder approval is generally required for: (i) an acquisition of shares/assets of another company thatinvolves the issuance of 20% or more of the acquirer's shares or voting rights or if a director, officer or 5% shareholder has greater than a 5%interest in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control;(iii) adoption/amendment of equity compensation arrangements; and (iv) issuances of 20% or more of the shares or voting rights (includingsecurities convertible into, or exercisable for, equity) of a listed company via a private placement (and/or via sales by directors/officers/5%shareholders) if such equity is issued (or sold) at below the greater of the book or market value of shares. By contrast, under the Israeli CompaniesLaw, shareholder approval is required for, among other things: (a) transactions with directors concerning the terms of their service orindemnification, exemption and insurance for their service (or for any other position that they may hold at a company), for which approvals ofthe compensation committee, board of directors and shareholders are all required; (b) extraordinary transactions with controlling shareholders ofpublicly held companies, which require approval by a special, disinterested majority of shareholders (as described above in this annual report)and (c) terms of employment or other engagement of the controlling shareholder of a company or such controlling shareholder's relative, whichalso require approval by a special, disinterested majority of shareholders. In addition, under the Israeli Companies Law, a merger requiresapproval of the shareholders of each of the merging companies.ITEM 16H.Mine Safety DisclosureNot applicable.108 PART IIIITEM 17.FINANCIAL STATEMENTSWe have elected to provide financial statements and related information pursuant to Item 18.ITEM 18.FINANCIAL STATEMENTSThe following consolidated financial statements, and the related notes thereto, and the Reports of Independent Public Accountants are filed as a partof this annual report. Reports of Independent Registered Public Accounting FirmsF-2 Consolidated Balance SheetsF-4 Consolidated Statements of Operations and Comprehensive LossF-5 Consolidated Statements of Changes in Shareholders' Equity (Deficit)F-6 Consolidated Statements of Cash FlowsF-7 Notes to Consolidated Financial StatementsF- 8 to F-29 109 ITEM 19.EXHIBITSEXHIBIT INDEX EXHIBITNUMBER DESCRIPTION OF DOCUMENT1.1 Amended and Restated Articles of Association of the Company, filed as Exhibit 4.1 to Form S-8 filed November 30, 2017 (File No. 333-221830)and incorporated herein by reference. 3.1 Voting Trust Agreement, dated February 11, 2018, by and among the Company, Padmanabh Chivukula, and Mark Herbert. 4.1 Form of Indemnification Agreement, filed as Exhibit 10.4 to Form F-1/A filed February 19, 2013 (File No. 333-186003) and incorporated hereinby reference. 4.2 Alcobra Ltd. Amended and Restated 2010 Incentive Option Plan, filed as Exhibit 4.3 to Form 20-F filed April 28, 2017 (File No. 001-35932) andincorporated herein by reference. 4.3 2013 Equity Incentive Plan of Arcturus Therapeutics, Inc., filed as Exhibit 5.1 to Form S-8 filed November 30, 2017 (File No. 333-221830) andincorporated herein by reference. 4.4 Amended and Restated Compensation Policy for Company Office Holders, as adopted on July 19, 2016, attached as Exhibit 99.2 to theCompany’s Report of Foreign Private Issuer on Form 6-K furnished to the SEC on June 8, 2016 (File No. 001-35932) and incorporated herein byreference. 4.5 Agreement and Plan of Merger and Reorganization among Alcobra Ltd., Aleph MergerSub, Inc. and Arcturus Therapeutics, Inc., dated as ofSeptember 27, 2017, annexed as Exhibit 99.2 to the Company’s Report of Foreign Private Issuer on Form 6-K furnished to the SEC on September28, 2017 (File No. 001-35932) and incorporated herein by reference. 4.6 Lease Agreement, by and between Arcturus Therapeutics, Inc. and ARE-SD Region No. 44, LLC, dated October 4, 2017. 4.7† Research Collaboration and License Agreement, by and between Arcturus Therapeutics, Inc. and Janssen Pharmaceuticals, Inc., dated October18, 2017. 4.8† Research and Exclusive License Agreement, by and between Arcturus Therapeutics, Inc. and Synthetic Genomics, Inc., effective October 24,2017. 4.9† Research Agreement, by and between Arcturus Therapeutics, Inc. and Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of TakedaPharmaceutical Company Limited, effective December 6, 2016, as amended December 21, 2017. 4.10† Research Collaboration and License Agreement, by and between Arcturus Therapeutics, Inc. and Ultragenyx Pharmaceutical Inc., entered into asof October 26, 2015, as amended October 17, 2017 and April 20, 2018. 4.11† Letter Agreement, by and between Arcturus Therapeutics, Inc. and Cystic Fibrosis Foundation Therapeutics, Inc., dated May 16, 2017. 4.12† Development and Option Agreement, by and between Arcturus Therapeutics, Inc. and CureVac AG, dated January 1, 2018, as amended May 3,2018. 4.13† Co-Development and Co-Commercialization Agreement, by and between Arcturus Therapeutics, Inc. and CureVac AG, dated January 1, 2018. 4.14† License Agreement, by and between Arcturus Therapeutics, Inc., as successor-in-interest to Marina Biotech, Inc., and Protiva BiotherapeuticsInc., dated as of November 28, 2012. 4.15† Patent Assignment and License Agreement, by and between Arcturus Therapeutics, Inc. and Marina Biotech, Inc., dated as of August 9, 2013. 8.1 List of Subsidiaries. 12.1 Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. 12.2 Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934. 110 13.1 Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350. 13.2 Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350. 15.1 Consent of Ernst & Young LLP. 15.2 Consent of Kost, Forer, Gabbay & Kasierer. 15.3 Letter dated May14, 2018 of Ernst & Young LLP, as required by Item 16F of Form 20-F. 101 The following materials from our Annual Report on Form 20-F for the year ended December 31, 2017 formatted in XBRL (eXtensible BusinessReporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Loss, (iii) theConsolidated Statements of Changes in Shareholders' Equity (Deficit), (iv) the Consolidated Statements of Cash Flows and (v) the Notes toConsolidated Financial Statements, tagged as blocks of text and in detail †Confidential treatment has been granted for certain information contained in this Exhibit. Such information has been omitted and filed separately withthe SEC. 111 SIGNATURESArcturus Therapeutics Ltd. hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized theundersigned to sign this annual report on its behalf. ARCTURUS THERAPEUTICS LTD. By: /s/ Mark R. Herbert Mark R. Herbert Interim President Date: May 14, 2018 112 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESCONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2017INDEX Page Reports of Independent Registered Public Accounting FirmsF-2 Consolidated Balance SheetsF-4 Consolidated Statements of Operations and Comprehensive LossF-5 Consolidated Statements of Changes in Shareholders' Equity (Deficit)F-6 Consolidated Statements of Cash FlowsF-7 Notes to Consolidated Financial StatementsF-8 to F-29 F-1 Kost Forer Gabbay & Kasierer144 Menachem Begin Road, Building ATel-Aviv 6492102, Israel Tel: +972-3-6232525Fax: +972-3-5622555ey.comReport of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of ARCTURUS THERAPEUTICS LTD. (FORMERLY ALCOBRA LTD.) Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Arcturus Therapeutics Ltd. (formerly Alcobra Ltd.) and its subsidiaries (the"Company") as of December 31, 2017 and the related consolidated statements of operations and comprehensive loss, shareholders' equity and cash flows forthe year ended December 31, 2017, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidatedfinancial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017, and the results of its operations andits cash flows for the year ended December 31, 2017, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’sfinancial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required tohave, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understandingof internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control overfinancial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures inthe financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ KOST FORER GABBAY & KASIERERA Member of Ernst & Young Global We have served as the Company‘s auditor since 2018Tel-Aviv, IsraelMay 14, 2018F-2 Report of Independent Registered Public Accounting Firm The Board of Directors and ShareholdersArcturus Therapeutics Ltd. We have audited the accompanying consolidated balance sheet of Arcturus Therapeutics Ltd. and its subsidiaries (formerly Arcturus Therapeutics,Inc.) as of December 31, 2016, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity (deficit) andcash flows for each of the two years in the period ended December 31, 2016. These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We werenot engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control overfinancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ArcturusTherapeutics Ltd. and its subsidiaries at December 31, 2016, and the consolidated results of their operations and their cash flows for each of the two years inthe period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles. /s/Ernst & Young LLPSan Diego, CaliforniaMay 14, 2018F-3 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In U.S. dollars in thousands, except par value information) As of December 31, 2017 2016 Assets Current assets: Cash and cash equivalents $24,965 $8,345 Restricted cash 166 — Short-term investments 23,608 — Accounts receivable 480 3,633 Prepaid expenses and other current assets 1,059 353 Intangible asset held for sale 590 — Total current assets 50,868 12,331 Property and equipment, net 1,049 1,335 Other assets 107 70 Total assets $52,024 $13,736 Liabilities and shareholders’ equity Current liabilities: Accounts payable $1,790 $3,357 Accrued liabilities 2,793 1,061 Deferred revenue 6,457 4,183 Convertible promissory notes and accrued interest — 133 Total current liabilities 11,040 8,734 Deferred revenue, net of current portion 7,190 3,410 Other liabilities — 15 Total liabilities 18,230 12,159 Commitments and contingencies (Note 13) Shareholders’ equity: Series seed preferred shares, $0.0001 par value, none authorized, issued or outstanding at December 31,2017, 1,284 shares authorized, issued, and outstanding at December 31, 2016 — — Series A preferred shares, $0.0001 par value, none authorized, issued or outstanding at December 31,2017, 2,564 authorized, 1,481 issued and outstanding at December 31, 2016 — — Ordinary shares: NIS 0.07 par value; 30,000 shares authorized, 10,699 issued, 10,656 outstanding and 43held in treasury at December 31, 2017; $0.0001 par value, 2,801 issued and outstanding at December 31,2016 212 — Additional paid-in capital 56,674 13,764 Accumulated other comprehensive loss (3) — Accumulated deficit (23,089) (12,187)Total shareholders’ equity 33,794 1,577 Total liabilities and shareholders’ equity $52,024 $13,736 See notes to the consolidated financial statements.F-4 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSU.S. dollars in thousands (except per share data) Year Ended December 31, 2017 2016 2015 Revenue in conjunction with strategic alliances and collaborations $12,998 $20,382 $6,138 Operating expenses: Research and development, net 15,918 17,934 5,476 General and administrative 7,572 3,448 2,574 Total operating expenses 23,490 21,382 8,050 Net loss from operations (10,492) (1,000) (1,912)Finance (expense) income, net (409) (536) 11 Net loss before taxes (10,901) (1,536) (1,901)Income tax expense (1) (35) (1)Net loss $(10,902) $(1,571) $(1,902) Net loss per share, basic and diluted $(3.53) $(0.77) $(0.94)Weighted-average shares outstanding, basic and diluted 3,087 2,032 2,016 Comprehensive loss: Net loss $(10,902) $(1,571) $(1,902)Unrealized loss on short-term investments (3) — — Comprehensive loss $(10,905) $(1,571) $(1,902) See notes to the consolidated financial statements. F-5 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)U.S. dollars in thousands Series Seed Series A Additional AccumulatedOther Total Preferred Stock Preferred Stock Ordinary Shares Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Shares Amount Shares Amount Capital Loss Deficit Equity (Deficit) BALANCE - December 31,2014 1,284 $- 960 $- 2,784 $- $6,869 $- $(8,714) $(1,845)Net loss — — — — — — — — (1,902) (1,902)Shares issued in conjunctionwith share option exercise — — — — 17 — 17 — — 17 Share-based compensation — — — — — — 99 — — 99 BALANCE - December 31,2015 1,284 $- 960 $- 2,801 $- $6,985 $- $(10,616) $(3,631)Net loss — — — — — — — — (1,571) (1,571)Share-based compensation — — — — — — 300 — — 300 Issuance of preferred sharesupon convertible promissorynote maturity including debtconversionexpense — — 521 — — — 6,479 — — 6,479 BALANCE - December 31,2016 1,284 $- 1,481 $- 2,801 $- $13,764 $- $(12,187) $1,577 Net loss — — — — — — — — (10,902) (10,902)Unrealized loss on short-terminvestments — — — — — — — (3) — (3)Share-based compensation — — — — — — 2,170 — — 2,170 Shares issued in conjunctionwith share option exercise — — — — 348 — 675 — — 675 Issuance of shares upon exerciseof warrants — — — — 189 — 160 — — 160 Issuance of shares uponconversion of notes — — — — 617 — 5,957 — — 5,957 Conversion of Preferred Sharesto Ordinary Shares (1,284) — (1,481) — 2,765 — — — — — Beneficial conversion expensefrom notes — — — — — — 348 — — 348 Issuance of shares in connectionwith merger, net — — — — 3,979 212 33,600 — — 33,812 BALANCE - December 31,2017 - $- - $- 10,699 $212 $56,674 $(3) $(23,089) $33,794 See notes to the consolidated financial statements.F-6 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSU.S. dollars in thousands Year Ended December 31, 2017 2016 2015 OPERATING ACTIVITIES: Net loss $(10,902) $(1,571) $(1,902)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 410 294 192 Share-based compensation expense 2,170 300 99 Gain on sale of equipment — — (11)Interest expense on convertible promissory notes 150 295 251 Beneficial conversion expense from notes 348 250 — Changes in operating assets and liabilities Accounts receivable 3,153 (1,556) (2,077)Prepaid expenses and other assets (202) (314) 23 Accounts payable (1,537) 2,536 240 Accrued liabilities (104) 303 484 Deferred revenue 6,054 (3,398) 10,991 Net cash (used in) provided by operating activities (460) (2,861) 8,290 INVESTING ACTIVITIES: Proceeds from maturities of short-term investments 10,577 — — Acquisition of property and equipment (251) (688) (247)Proceeds from sale of equipment 29 — 27 Net cash provided by (used in) investing activities 10,355 (688) (220)FINANCING ACTIVITIES: Proceeds from issuance of convertible promissory notes 5,650 — 1,885 Proceeds from exercise of share options 711 — 17 Proceeds from exercise of warrants 160 — — Net cash received in the issuance of shares for the net assets of Alcobra Ltd. 477 — — Net cash provided by financing activities 6,998 — 1,902 NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 16,893 (3,549) 9,972 Cash, cash equivalents and restricted cash at beginning of year 8,345 11,894 1,922 Cash, cash equivalents and restricted cash at end of year $25,238 $8,345 $11,894 Supplemental cash flow information Cash paid for taxes $35 $12 $1 Purchase of property and equipment included in accounts payable and accrued liabilities $— $127 $53 Issuance of Series A preferred shares upon note maturity $— $6,229 $— Convertible notes and accrued interest reclassified to accounts payable at maturity $— $151 $— Fair value of assets acquired, excluding cash, cash equivalents and restricted cash $35,241 $— $— Less liabilities assumed $(1,906) $— $— Net assets acquired, excluding cash, cash equivalents and restricted cash $33,335 $— $— Conversion of notes to Ordinary Shares $5,957 $— $— See notes to the consolidated financial statements.F-7 ARCTURUS THERAPEUTICS LTD. AND ITS SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1. OrganizationDescription of BusinessArcturus Therapeutics Ltd. and subsidiaries (referred to as the “Company”) is a nucleic acid medicines company with enabling technologies – UNAOligomer chemistry and LUNAR® lipid-mediated delivery. The company remains domiciled in Israel subsequent to the merger described herein.Reverse MergerOn November 15, 2017, Alcobra Ltd. acquired Arcturus Therapeutics, Inc. pursuant to a merger between the companies (the “merger”). Prior to themerger, Alcobra Ltd.’s net assets consisted of cash, investments and nominal non-operating assets. Upon consummation of the merger, Alcobra Ltd. adoptedthe business plan of Arcturus Therapeutics, Inc. In connection with the merger, Alcobra Ltd. agreed to acquire all of the outstanding common stock ofArcturus Therapeutics, Inc. in exchange for the issuance of an aggregate 6,631,712 of Alcobra Ltd.’s Ordinary Shares, par value 0.07 NIS per share (the“Ordinary Shares”), after giving effect to a 1-for-7 reverse split effected immediately prior to the merger. As a result of the merger, Arcturus Therapeutics, Inc.became a wholly-owned subsidiary of Alcobra Ltd. While Alcobra Ltd. was the legal acquirer in the transaction, Arcturus Therapeutics, Inc. was deemed theaccounting acquirer. Immediately after giving effect to the merger, on November 15, 2017, Alcobra Ltd. changed its name to Arcturus Therapeutics Ltd.(“Arcturus” or the “Company”). On November 16, 2017, the Company commenced trading under the symbol “ARCT.” The Company’s principal executiveoffices are located in San Diego, California.In accordance with the authoritative literature, a transaction where a private company merges into a public company with no operations and nominalnet assets should be accounted for as a capital transaction rather than a business combination. Consequently, the reverse merger was accounted for as anissuance of shares by the Company for the net assets of Alcobra Ltd., accompanied by a recapitalization. Excess of considerations paid over net assetsacquired and other merger-related costs were recorded as a charge to additional paid-in capital as discussed in Note 6. While Alcobra Ltd. was the legalacquirer in the merger, Arcturus was deemed the accounting acquirer. As a result, the financial statements of the Company prior to the merger date are thehistorical financial statements of Arcturus whereas the financial statements of the Company after the merger date reflect the results of the operations ofArcturus and Alcobra Ltd. on a combined basis. All historical information presented herein has been retroactively restated to reflect the effect of the mergershares exchange ratio, reverse stock split and change to the authorized number of Ordinary Shares in accordance with Accounting Standards CodificationTopic 260, “Earnings Per Share”.LiquidityThe Company’s activities since inception have consisted principally of performing research and development activities and raising capital. TheCompany’s activities are subject to significant risks and uncertainties, including failing to secure additional funding before the Company achievessustainable revenues and profit from operations.Historically, the Company’s primary source of financing has been through the sale of its securities, through issuance of convertible promissory notesand through collaboration agreements. Research and development activities have required significant capital investment since the Company’s inception. Weexpect our operations to continue to require cash investment to pursue the Company’s research and development activities, including preclinical studies,formulation development, clinical trials and related drug manufacturing. The Company has a limited operating history, and is preclinical with no revenuesfrom sales of its products, and the sales and income potential of the Company’s business and market are unproven. The Company has experienced net lossessince its inception and as of December 31, 2017 has an accumulated deficit of $23.1 million . The Company acquired $36.4 million in cash, cash equivalentsand short-term investments in conjunction with the merger, however, the Company expects to continue to incur additional losses for the next several years,and over that period the Company may need to raise additional debt or equity financing or enter into additional partnerships to fund its development. Theability of the Company to transition to profitability is dependent on developing products and product revenues to support the level of expenses. If theCompany is not able to achieve its planned revenue growth or incurs costs in excess of its forecasts, it may be required to reduce discretionary spending, maynot be able to continue the development of all of its products or may be required to delay part of its development programs, which could have a materialadverse effect on the Company’s ability to achieve its intended business objectives. There can be no assurances that additional financing will be secured or,if secured, will be on favorable terms. The Company's management and board of directors are of the opinion that its current financial resources will besufficient to continue the development of the Company's products for at least twelve months from the filing of this Annual Report.F-8 In order to support our long-term plans, we intend to seek additional capital through equity and/or debt financings, collaborative or other fundingarrangements with partners or through other sources of financing. Should we seek additional financing from outside sources, we may not be able to raise suchfinancing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scaleback or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with anotherentity, or cease operations. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will bematerially and adversely affected. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all.NOTE 2. Summary of Significant Accounting PoliciesBasis of Presentation and Principles of ConsolidationThe accompanying consolidated financial statements include the accounts of Arcturus Therapeutics Ltd. and its subsidiaries. All intercompanyaccounts and transactions have been eliminated in consolidation. These financial statements are prepared in conformity with accounting principles generallyaccepted in the United States (U.S. GAAP), which requires management to make estimates and assumptions regarding the valuation of certain debt and equityinstruments, the intangible asset, share-based compensation, accruals for liabilities, income taxes, revenue and deferred revenue, expense accruals, and othermatters that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments, consisting of normal recurringaccruals and other adjustments related to our merger, considered necessary for a fair presentation have been included. Actual results could materially differfrom those estimates.Segment InformationOperating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by thechief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company and its chief operating decision-maker view the Company’s operations and manage its business in one operating segment which is the research and development of medical applications forour nucleic acid-focused technology.Reclassification of Prior Year’s PresentationCertain prior year amounts have been reclassified for consistency with the current period presentation. This reclassification had no effect on thereported results of operations.Foreign Currency TranslationThe functional currency of the Company is the U.S. dollar. Monetary accounts maintained in currencies other than the dollar are remeasured into U.S.dollars in accordance with Accounting Standards Codification (“ASC”) Topic 830, “Foreign Currency Matters”. Translation gains or losses were immaterialfor the years ended December 31, 2017, 2016 and 2015.Cash and Cash EquivalentsCash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at thedate of purchase to be cash equivalents.Restricted cashRestricted cash represents cash required to be set aside as security for lease payments and to maintain a letter of credit for the benefit of the landlord forthe Company’s offices. At December 31, 2017, the Company had restricted cash of $166,000 and $107,000 in conjunction with property leases in Israel andSan Diego, California, respectively. The restricted cash related to the Israel facility is classified as current as it expected to be received by the Companywithin 12 months. The restricted cash related to the San Diego facility is included in the balance of other assets and classified as a non-current asset as it isexpected to be received at the end of the lease term in 2025. There was no restricted cash at December 31, 2016. F-9 Short-term Bank DepositsShort-term bank deposits are deposits with maturities of more than three months and up to one year when acquired. Short-term bank deposits arepresented at their cost, including accrued interest and are included in the balance of short-term investments in the consolidated balance sheet.Short-term InvestmentsThe Company accounts for short-term investments in accordance with ASC No. 320, Investments- Debt and Equity Securities. Management determinesthe appropriate classification of its investments at the time of purchase and reevaluates such determinations at each balance sheet date. The Company has classified all of its debt securities and certificates of deposit as available-for-sale securities. Available-for-sale securities are carriedat fair value, with the unrealized gains and losses reported in accumulated other comprehensive (gain)loss in shareholders' equity (deficit). Realized gains andlosses on sales of investments are included in interest income and are derived using the specific identification method for determining the cost of securities. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization together withinterest and dividends on securities are included in interest income. The Company recognizes an impairment charge when a decline in the fair value of its investments in securities below the amortized cost basis of suchsecurities is judged to be other-than-temporarily impaired. Factors considered in making such a determination include the duration and severity of theimpairment, the reason for the decline in value, the potential recovery period and if the entity has the intent to sell the security, or if it is more likely than notthat it will be required to sell the security before recovery of its amortized cost basis. The Company did not recognize any other-than-temporary impairmentcharges on its marketable securities during the years ended December 31, 2017, 2016 or 2015.Fair Value MeasurementsFair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use ofobservable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sourcesindependent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use invaluing the asset or liability developed based upon the best information available under the circumstances. The hierarchy is broken down into three levels.Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets orliabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) thatare observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. Categorization within thevaluation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.Accounts ReceivableAccounts receivable are recorded at the net invoice value and are non-interest bearing. The Company considers receivables past due based on thecontractual payment terms. The Company reserves specific receivables if collectability is no longer reasonably assured. Estimates for allowances for doubtfulaccounts are determined based on existing contractual obligations, historical payment patterns, and individual customer circumstances. The Companyreevaluates such reserves on a regular basis and adjusts its reserves as needed. Once a receivable is deemed to be uncollectible, such balance is chargedagainst the reserve. No reserves have been recorded as of December 31, 2017 or 2016. F-10 Concentration of Credit Risk and Significant Customers The Company is exposed to credit risk from cash and investment balances at banks in excess of amounts insured by the Federal Deposit InsuranceCorporation, including deposits held in two large banks located in Israel and by a U.S. based brokerage. The Company mitigates its exposure by investing incertificates of deposit in banks that have a credit rating of at least Baa1/BBB+ and corporate debentures that carry a rating of at least A2/A. The Company’sinvestment policy is approved by the Board of Directors and limits the amount that the Company may invest in any one type of investment or issuer, therebyreducing credit risk concentrations. The Company has not experienced any losses on deposits since inception.There was one customer that comprised the total accounts receivable balance at December 31, 2017. One customer individually represented 88% ofthe Company’s accounts receivable balance at December 31, 2016.For the year ended December 31, 2017, there were three customers that collectively represented 92% of the Company’s total revenue. For the yearsended December 31, 2016 and 2015, there were two customers that represented 95% and 99% of the Company’s total revenue, respectively. Intangible asset held for saleThe Company’s intangible asset represents capitalized in-process research and development (IPR&D) acquired in conjunction with the merger in 2017(see Note 6 to the consolidated financial statements). Property and Equipment, netProperty and equipment are stated at cost, net of accumulated depreciation and amortization. The cost of property and equipment is depreciated oramortized using the straight-line method over the respective useful lives of the assets, ranging from three to five years. Leasehold improvements areamortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Long-lived assets, including property andequipment are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Thedeterminants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flowin future periods, as well as the strategic significance of the assets to the Company’s business objectives. The Company did not recognize any impairmentlosses for the years ended December 31, 2017, 2016 or 2015.Comprehensive LossComprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources.Comprehensive loss represents unrealized losses on the Company’s marketable securities. The income tax effect related to unrealized losses was immaterialfor December 31, 2017. Revenue RecognitionThe Company enters into arrangements with pharmaceutical and biotechnology partners that may involve multiple deliverables. The Company’sarrangements may contain upfront payments, license fees for research and development arrangements, research and development funding or reimbursement,milestone payments, option fees, exclusivity fees and royalties on future sales of our products. Each deliverable in the arrangement is evaluated at theinception of the arrangement to determine whether it meets the criteria to be accounted for as a separate unit of accounting or whether it should be combinedwith other deliverables. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative sellingprice method and the appropriate revenue recognition principles are applied to each unit. Revenue is recognized separately for each unit of accounting whenall four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) theselling price is fixed or determinable; and (iv) collectability is reasonably assured. Deliverables in an arrangement that do not meet this separation criteria aretreated as a single unit of accounting, generally applying applicable revenue recognition guidance for the final deliverable to the combined unit ofaccounting. In the instances in which the Company has received payment from customers in advance of recognizing revenue, the Company records theamounts as deferred revenue on the consolidated balance sheet. Amounts not expected to be recognized within the next 12 months are classified as non-current deferred revenue. As discussed further under Note 3, Strategic Alliances and Collaboration Agreements, total deferred revenue for the year endedDecember 31, 2017 and 2016 was comprised of $7.6 million and $0.4 million for Collaboration Partner A, respectively; $5.8 million and $6.2 million forCollaboration Partner B, respectively; negligible amount and $0.2 million for Collaboration Partner C, respectively; and $0.2 million and $0.8 million forOther, respectively. Deferred revenue includes unamortized upfront fees under these collaboration agreements. F-11 Funded Research. Some of the Company’s research and development costs are funded or reimbursed by partners in accordance with collaborationagreements. Amounts received as compensation related to the Company’s research and development efforts are recognized as revenue when the above criteriahave been met.Upfront Fees. When the Company determines that deliverables in an arrangement do not meet the separation criteria discussed above, the deliverablesare treated as a single unit of accounting. In such cases, upfront fees received for collaborative agreements are recognized on a straight-line basis, unlessevidence suggests that the revenue is earned or obligations are fulfilled in a different pattern, over the expected performance period under each respectivearrangement. When the performance period is not specified, the Company makes its best estimate of the period over which the Company expects to fulfill itsperformance obligations under an arrangement. Any amounts received under the arrangement in advance of performance are recorded as deferred revenue andrecognized as revenue as the Company completes its performance obligations.Milestones. The Company applies the milestone method of accounting to recognize revenue from milestone payments when earned, as evidenced bywritten acknowledgement from the collaborator or other persuasive evidence that the milestone has been achieved and the payment is non-refundable,provided that the milestone event is substantive. A milestone event is defined as an event (i) that can only be achieved based in whole or in part on either ourperformance or on the occurrence of a specific outcome resulting from our performance; (ii) for which there is substantive uncertainty at the inception of thearrangement that the event will be achieved; and (iii) that would result in additional payments being due to the Company. Events for which the occurrence iseither contingent solely upon the passage of time or the result of a counterparty’s performance are not considered to be milestone events. A milestone event issubstantive if all of the following conditions are met: (i) the consideration is commensurate with either the Company’s performance to achieve the milestone,or the enhancement of the value to the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone;(ii) the consideration relates solely to past performance; and (iii) the consideration is reasonable relative to all the deliverables and payment terms (includingother potential milestone consideration) within the arrangement.The Company assesses whether a milestone is substantive at the inception of each arrangement. If a milestone is deemed non-substantive, theCompany will account for that milestone payment using a method consistent with the related units of accounting for the arrangement over the estimatedperformance period.Research and Development Costs, netResearch and development costs are expensed as incurred. Non-refundable advance payments are expensed when services are initiated. Theseexpenses result from the Company's independent research and development efforts as well as efforts associated with collaboration arrangements. Researchand development costs include salaries and personnel-related costs, consulting fees, fees paid for contract research and manufacturing services, the costs oflaboratory supplies, equipment and facilities and other external costs are shown net of any royalty bearing grants. Royalty Bearing Grant Royalty-bearing grants from Cystic Fibrosis Foundation Therapeutics, Inc. (CFFT) amounted to $0.3 million and $0.2 million during the years endedDecember 31, 2017 and 2016, respectively. Royalty-bearing grants from CFFT for certain research and development projects are recognized on the basis ofrelated costs incurred, and are included as a deduction from research and development expenses.Share-Based CompensationThe Company recognizes share-based compensation for equity awards granted to employees, officers, and directors as an expense on the statements ofoperations. Share-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period.Share options have a ten-year life and generally vest 25% on the first anniversary of the grant and in 1/48th equal installments on each monthly anniversarythereafter, such that options are fully vested on the four-year anniversary of the date of grant.F-12 The fair value of share options is estimated using a Black-Scholes valuation model on the date of grant. This method requires certain assumptions beused as inputs, such as the fair value of the underlying common shares, expected term of the option before exercise, expected volatility of the Company’sOrdinary Shares, expected dividend yield, and a risk-free interest rate. The Company has limited historical share option activity and therefore estimates theexpected term of share options granted using the simplified method, which represents the average of the contractual term of the share option and its weighted-average vesting period. The expected volatility of share options is based upon the historical volatility of a number of publicly traded companies in similarstages of clinical development. We have not declared or paid any dividends and do not currently expect to do so in the foreseeable future. The risk-freeinterest rates used are based on the implied yield currently available in United States Treasury securities at maturity with a term equivalent to the expectedterm of the share options. The effect of forfeited awards is recorded when the forfeiture occurs.Share-based awards to non-employees are remeasured at each reporting date and compensation costs are recognized as services are rendered, generallyon a straight-line basis. The Company believes that the fair value of these awards is more reliably measurable than the fair value of the services rendered. Ordinary Shares Valuation Prior to the merger and due to the absence of an active market for the Company’s ordinary shares, the Company utilized third-party valuations whichutilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation ofPrivately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its Ordinary Shares. Prior to 2017, the income and market approach and the Option-Pricing-Method, as appropriate, were used to value the Ordinary Shares of the Companyat the option grant dates. A discount for lack of marketability was also incorporated in determining the value of the Ordinary Shares.During 2017, the Company relied on the Guideline Transaction Method (Return on Invested Capital) to estimate the value the Ordinary Shares of theCompany at the option grant dates. The Company conducted a search for development stage and preclinical trials stage biotechnology therapeuticscompanies which initially received capital and later were acquired in merger and acquisitions transactions. Under this method, the Company estimated itsrange of business enterprise value (“BEV”). 1.Similar Transactions: The Company conducted a search for development stage and preclinical trials stage biotechnology therapeutics companiesusing the Dow Jones VentureSource™ database of private venture-backed companies and selected private target companies similar to theCompany. 2.Range of Multiple Observed: Using the total deal consideration and the total capital raised prior to the acquisition, the Company estimated thetotal deal consideration/capital raised multiple; 3.Multiples Selection: The Company selected multiples of 1.00x and 1.50x for the low and high estimates, respectively. The Company selectedmultiples between the minimum and lower (first) quartile of the dataset due to the Company's stage of product development and the inherentsurvivorship bias of the dataset. These multiplies were applied to the Company’s total productive invested capital as of the Valuation Date. 4.Discount for Lack of Control (“DLOC”): The BEV range estimated from the Guideline Transaction Method reflects a controlling interest. In orderto estimate a BEV on a minority interest basis, the Company applied a discount for lack of control to the indicated equity value after accountingfor any debt. After estimating a range of BEV, the Company added cash and cash equivalents to derive an estimated range of the Market Value of Invested Capital(“MVIC”). The Company than adjusted this value for debt and estimated the value of the Company’s equity.After estimating the Company’s equity value, the Company allocated the value to the various equity classes and debt comprising the Company’scapitalization table using the Option-Pricing Method. Under the OPM, each equity class was modeled as having a call option with a distinct claim on thetotal value of the Company. Each option’s exercise price was based on the Company’s total value available for each participating security holder. Thecharacteristics of each class of ownership determined the claim on the total value for that class of ownership. By constructing a series of options in which theexercise prices were set at incremental levels of value corresponding to the values necessary for each level of equity to participate, we determined theincremental option value of each series. When multiplied by the percentage of ownership of each equity class participating under that series, the result wasthe incremental value allocated to each class under that series. The Company used the Black Scholes option-pricing model within the equity allocation. F-13 In making the final determination, the Company determined a discount for lack of marketability.For awards issued near the merger date, a market approach was utilized based upon publicly available prices for Alcobra Ltd. Significant changes tothe key assumptions underlying the factors used could have resulted in different fair values of ordinary shares at each valuation date. Statement of cash flowsThe following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet to the total of thesame such amounts shown in the statement of cash flows: As of December 31, (in thousands) 2017 2016 2015 Cash and cash equivalents $24,965 $8,345 $11,894 Restricted cash 166 - - Restricted cash (included in other assets) 107 - - Total cash, cash equivalents and restricted cash shown in the statement of cash flows $25,238 $8,345 $11,894 Income Tax ExpenseThe Company records deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’sfinancial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates expected to be in effect in the years in which thedifferences are expected to reverse. A valuation allowance is provided to reduce the net deferred tax assets to the amount that will more likely than not berealized. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes theenactment date.The Company also assesses the probability that the positions taken or expected to be taken in its income tax returns will be sustained by taxingauthorities. A “more likely than not” (more than 50 percent) recognition threshold must be met before a tax benefit can be recognized. Tax positions that aremore likely than not to be sustained are reflected in the Company’s financial statements. Tax positions are measured as the largest amount of tax benefit thatis greater than 50 percent likely of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The differencebetween the benefit recognized for a position and the tax benefit claimed on a tax return is referred to as an unrecognized tax benefit. Potential interest andpenalties associated with such uncertain tax positions are recorded as a component of income tax expense. Net Loss per ShareBasic net loss per share is calculated by dividing the net loss by the weighted-average number of Ordinary Shares outstanding for the period, withoutconsideration for ordinary share equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of OrdinaryShares and dilutive ordinary share equivalents outstanding for the period determined using the treasury-stock method. Dilutive Ordinary Shares arecomprised of convertible preferred stock, convertible notes, share options and warrants. Dilutive securities that were not included in the calculation of dilutednet loss per share because they were anti-dilutive totaled 3,057,000, 2,800,000 and 3,843,000 potential shares at December 31, 2017, 2016 and 2015,respectively.The calculation of the weighted-average number of shares outstanding excludes shares which have been issued upon the early exercise of shareoptions and are subject to future vesting and unvested restricted stock totaling 702,000, 769,000 and 769,000 shares as of December 31, 2017, 2016 and2015, respectively, and shares held in treasury totaling 43,000 at December 31, 2017. There were no treasury shares at December 31, 2016 or 2015. The Company applies the two-class method as required by ASC Topic 260-10, “Earnings Per Share” (“ASC 260-10”), which requires the income orloss per share for each class of shares (ordinary and preferred shares) to be calculated assuming 100% of the Company’s earnings are distributed as dividendsto each class of shares based on their contractual rights. No dividends were declared or paid during the reported periods. According to the provisions of ASC 260-10, the Company’s preferred shares are notparticipating securities in losses and, therefore, are not included in the computation of net loss per share.F-14 Recently Issued Accounting PronouncementsIn May 2014, the Financial Accounting Standards Board (FASB) amended the existing Accounting Standards Update (ASU) for revenue recognitionNo. 2014-09, Revenue from Contracts with Customers, which outlines a comprehensive revenue recognition model and supersedes most current revenuerecognition guidance. ASU 2014-09 outlines a five-step process for revenue recognition that focuses on transfer of control, as opposed to transfer of risk andrewards, and also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts withcustomers. Major provisions include determining which goods and services are distinct and require separate accounting (performance obligations), howvariable consideration (which may include change orders and claims) is recognized, whether revenue should be recognized at a point in time or over time andensuring the time value of money is considered in the transaction price.The FASB subsequently issued amendments to ASU No. 2014-09 that have the same effective date and transition date. Due to the Company’semerging growth company status, these new standards will become effective for the Company on January 1, 2019. This ongoing evaluation is dependentupon the resolution of certain questions relating to the application of the new revenue recognition guidance for collaboration agreements which willultimately determine the impact, if any, the adoption of this standard may have on our financial statements.In February 2016, the FASB issued ASU 2016-02, Leases, which outlines a comprehensive lease accounting model and supersedes the current leaseguidance. The new accounting standard requires lessees to recognize lease liabilities and corresponding right-of-use assets for all leases with lease terms ofgreater than twelve months. It also changes the definition of a lease and expands the disclosure requirements of lease arrangements. The new accountingstandard must be adopted using the modified retrospective approach and is effective for entities for annual reporting periods beginning after December 15,2018, with early adoption permitted. Since the Company’s emerging growth company status will cease at December 31, 2018, this standard will becomeeffective for the Company on January 1, 2019. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on itsconsolidated financial statements and related disclosures.Recently Adopted Accounting PronouncementsEffective January 1, 2017, the Company adopted ASU No. 2017-09 Compensation – Stock Compensation (Topic 718): Scope of ModificationAccounting (ASU No. 2017-09). ASU No. 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award requirean entity to apply modification accounting. The Company’s adoption of ASU No. 2017-09 had no impact on the Company’s statements of financial positionor results of operations and comprehensive loss.In November 2016, the FASB issued ASU 2016-18, Restricted Cash, which requires entities to show the changes in the total of cash, cash equivalents,restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cashequivalents and restricted cash and restricted cash equivalents in the statement of cash flows. This update is effective for annual periods beginning afterDecember 15, 2017, and interim periods within those fiscal years with early adoption permitted. The Company adopted this pronouncement retrospectivelyeffective in the December 31, 2017 consolidated financial statements. There was no effect on previously reported balances as a result of adoption of thestandard.In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): “Clarifying the Definition of a Business” which clarifies thedefinition of a business and affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. Theamendments are intended to assist with the evaluation of whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.The guidance is effective for the Company for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years and should beapplied prospectively as of the beginning of the period of adoption. Early adoption is permitted under certain circumstances. The Company adopted ASU2017-01 as of January 1, 2017 and the adoption did not have an impact on the Company’s accounting and disclosures. NOTE 3. Strategic Alliances and Collaboration AgreementsThe Company has entered into license agreements and collaborative research and development arrangements with pharmaceutical and biotechnologycompanies. Under these arrangements, the Company is entitled to receive license fees, upfront payments, milestone payments when and if certain research ortechnology transfer milestones are achieved, development milestones and reimbursement for research and development activities. The Company's costs ofperforming these services are included within research and development expense. The Company’s milestone payments are typically defined by achievementof certain preclinical, clinical, and commercial success criteria. Preclinical milestones may include in vivo proof of concept in disease animal model(s), leadcandidate identification, and completion of IND-enabling studies. Clinical milestones may include successful enrollment of the first patient in or completionof Phase I, II, and III clinical trials, and commercial revenue is often tiered based on net or aggregate sale amounts. The Company cannotF-15 guarantee the achievement of these milestones due to risks associated with preclinical and clinical activities required for development of nucleic acidmedicine-based therapeutics.The following table summarizes our revenues under strategic alliances and collaborations for the periods indicated (in thousands): Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Collaboration Partner A $4,862 $12,008 $5,123 Collaboration Partner B 5,639 7,395 979 Collaboration Partner C 1,403 28 - Other 1,094 951 36 Total $12,998 $20,382 $6,138 The following paragraphs provide information on the nature and purpose of these collaboration arrangements. Collaboration Partner AIn 2015 the Company entered into two agreements with Collaboration Partner A. The Company analyzed the form and substance of both of theagreements and concluded they should be evaluated as a single arrangement for accounting purposes. The Company concluded that the license, research and development activities, exclusivity, and joint steering committed obligations under thiscollaboration should be considered a single unit of accounting in the arrangement and the up-front fee was deferred and was initially being recognized asrevenue ratably over the expected 23-month period of the research activities. In 2016, the parties agreed to extend the period of performance of the researchterm by an additional 6 weeks and the Company correspondingly updated the amortization period of the remaining deferred revenue. The Company alsoreached certain milestones in 2015 and in 2016 that were determined, as of the inception of the agreement, to be substantive and the revenue related to thesemilestones was recognized when they were achieved. As a result of the mid-2017 termination of the 2015 collaboration, the remaining deferred revenue associated with the upfront, non-refundablepayment was recognized as revenue since all performance obligations associated with the 2015 agreement had been completed by the Company. Further, theCompany recognized revenue of $4.9 million, $12.0 million, and $5.1 million during the years ended December 31, 2017, 2016 and 2015, respectively,primarily under the 2015 agreement. The revenue recognized included labor and expense reimbursements of $4.4 million, $9.5 million and $3.0 million,December 31, 2017, 2016 and 2015, respectively, with the remaining revenue representing the amortized portion of the upfront fee and milestone paymenton the arrangement.In late-2017, the Company and Collaboration Partner A entered into a new agreement. The Company reviewed the timing and nature of thearrangement upon the signing of the new agreement and determined that it was not linked to the prior agreements and should be considered as a standaloneagreement. The 2017 collaboration allocated discovery, development, funding obligations, and ownership of related intellectual property among the Companyand Collaboration Partner A, with Collaboration Partner A making an upfront payment, and potential milestone payments and royalty payments to theCompany. The Company received an upfront payment and may receive preclinical, development and sales milestone payments, as well as royalty paymentson any future licensed product sales. Collaboration Partner A will reimburse the Company for development costs at a future defined period upon theachievement of the first research and development milestone and all commercialization costs associated with the program upon selection of a drug target. The2017 collaboration agreement includes potential milestone payments from the Collaboration Partner A to the Company of $56.5 million. CollaborationPartner A may also pay option exercise fees within the $1.0 million to $5.0 million range per target. Collaboration Partner A will pay royalties on annual netsales of licensed products in the low to mid-single digits range, subject to reduction on a country-by-country and licensed-product-by-licensed-product basisand subject to certain events, such as expiration of program patents. In addition, the collaboration includes an exclusivity period. As the license component of the contract has no stand-alone value, the license and the research and development activities, exclusivity, and jointsteering committee obligations under this agreement should be considered as a single unit of accounting in the arrangement. The upfront fee will be deferredand recognized as revenue using the Proportional Performance Method as the Company determined that the performance obligations are fulfilled in a patternother than straight-line due to the structure and nature of theF-16 collaborative arrangement. During the year-end December 31, 2017 the Company recognized an negligible amount related to the 2017 agreement forCollaboration Partner A. Collaboration Partner BIn 2015 the Company entered into an agreement with Collaboration Partner B. During the initial phase of the collaboration, the Company will designand optimize therapeutics for certain rare disease targets. Collaboration Partner B has the option to add additional rare disease targets during thecollaborative development period. Additionally, during the collaborative development period, the Company will participate with Collaboration Partner B ina joint steering committee. In addition, the collaboration includes an initial exclusivity period and an option to extend this period.For each program, Collaboration Partner B will reimburse the Company for all internal and external development costs incurred and if CollaborationPartner B achieves certain, clinical, regulatory and sales milestones, then the Company is eligible to receive additional payments. As part of the agreement, Collaboration Partner B paid an upfront fee and agreed to certain research and development funding obligations. TheCompany is also entitled to certain additional payments upon exercise of the Collaboration Partner B expansion option and/or exclusivity extension (if any),and for costs incurred by us in conducting the activities assigned to us under each collaboration development plan. In addition, on a development target-by-development target basis during the two-year period from the effective date of contract, Collaboration B will pay the Company a one-time milestone paymentafter the first optimized lead designation for the first product with respect of such development target. For each development target for which theCollaboration Partner B exercises its option, Collaboration Partner B will pay the Company a one-time option exercise fee based upon on the total number ofdevelopment targets for which option exercises have been made by Collaboration Partner B. Subsequent to year end December 31, 2017, the Companysigned an amendment with Collaboration Partner B, that may reduce milestone payments dependent on whether the Company does not incorporate apredefined chemistry methodology. The agreement included total potential milestone payments for the initially selected targets from the Collaboration Partner B to the Company of $133.0 million. Collaboration Partner B will pay royalties as a percentage of net sales on a product-by-product and country-by-country basis during theapplicable royalty term up to 10%. As of December 31, 2017, the Company has not yet reached the clinical phase of the contract. The Company concluded that the license, research and development activities, exclusivity, and joint steering committed obligations under thisagreement should be considered a single unit of accounting in the arrangement, the up-front fee will be deferred and recognized as revenue over the sameperiod as the research activities. As a result, the upfront fee has been deferred and was initially being recognized as revenue ratably over the expected 29-month period of the research activities and was adjusted by an additional 11 months and 19 months during 2016 and 2017, respectively. As such, theCompany updated the amortization period of the remaining deferred revenue. The Company also determined that the milestone payments as defined in the agreement were not substantive as it will not have any outstandingperformance obligations under the agreement when such payments may become due, and, therefore, do not meet the requirements for application of theMilestone Method of revenue recognition. Instead, revenue from the contingent milestone payments will be recognized if and when such payments becomedue, subject to satisfaction of all of the criteria necessary to recognize revenue at that time.During 2017, the Company entered into an amendment with Collaboration Partner B to add one year to the exclusivity period for the two initialtargets, in consideration for a one-time payment of $2.0 million. The extension of the exclusivity period did not change the length of the research anddevelopment period. Further, the amendment added language to allow Collaboration Partner B the opportunity to review and comment on its filings andprosecution efforts of pending Company Patents that relate to Collaboration Partner B Chemistry. Since the Company's performance obligations under theagreement are considered a single unit of accounting, the payment consideration was added to the unamortized portion of the upfront signing fee andrecognized systematically, on a straight-line basis, over the remainder of the period that the research and development services are expected to occur. The Company recognized revenue for Collaboration Partner B of $5.6 million, $7.4 million, and $1.0 million during the years ended December 31,2017, 2016 and 2015, respectively. The revenue recognized included labor and expense reimbursements of $3.7F-17 million, $3.8 million and $0.3 million, December 31, 2017, 2016 and 2015, respectively, with the remaining revenue representing the amortized portion ofthe upfront fee on the arrangement. Collaboration Partner CIn 2016 the Company entered into a contract with Collaboration Partner C to perform certain discovery and development of RNA medicines fortreatment of a disease. The agreement provides a non-exclusive license of the Company’s technology to Collaboration Partner C for the 18 month researchprogram term, and the Company will not engage in similar research or development activities for two years after the end of the research term. In 2017 theCompany and Collaboration Partner C amended the agreement to extend the agreement research program scope and term of 18 months from the OriginalAgreement effective date to 12 months from the Amendment Date (through September 2018.) Under the Agreement, the results specifically related toimprovements to the Company products are owned by the Company, while all other Research Program results are owned by Collaboration Partner C.The Collaboration Partner C Agreement remains in effect until Collaboration Partner C no longer has payment obligations. Collaboration Partner Cmay terminate the Agreement upon sixty days written notice. As part of the agreement, Collaboration Partner C paid an upfront fee of $0.1 million uponcontract execution and agreed to provide the Company with funding for the discovery and development costs. The agreement included immaterial milestonepayments that were met during 2017. The agreement provides for $3.7 million in regularly scheduled research funding payments through 2018. In addition,Collaboration Partner C has an option to negotiate with the Company to obtain a non-exclusive, sub-licensable worldwide license to use the Company’sbackground technology and its owned collaboration results. The Option may be exercised by Collaboration Partner C with written notice to the Companyany time for a period commencing on the Effective Date and ending on one hundred and eighty (180) days after the date of Collaboration C receipt of theFinal Report. The terms and conditions of any such license shall be negotiated in good faith and agreed upon in writing between the parties within twelve 12months after the exercise of the option by Collaboration Partner C.The Company concluded that the research funding, exclusivity and license fees were to be accounted for as a single unit of accounting and the upfrontlicense fees were deferred and recognized as revenue over the same period as the research activities. The Company recognized revenue from CollaborationPartner C of $1.4 million and a negligible amount for the years ended December 31, 2017 and 2016, respectively. The revenue recognized includes expensereimbursements that are recognized as revenue when incurred as per the terms of the agreement and milestone payments. Other Collaboration AgreementsIn 2016 the Company entered into several other smaller agreements and recorded revenue and deferred revenue consistent with the revenuerecognition practices described in the significant accounting policies footnote. Additionally, see Note 14 Related Party for the related party collaborationagreement. NOTE 4. Short-term InvestmentsThe Company’s short-term investments consist of short-term bank deposits and marketable securities. Bank deposits with maturities of more than threemonths but less than one year are included in short-term bank deposits. Short-term deposits are stated at cost which approximates market values. As ofDecember 31, 2017, the Company's bank deposits totaled $15.0 million, are in U.S. dollars and bear interest at a weighted average annual interest rate of1.6%. There were no short-term bank deposits held by the Company at December 31, 2016.The following is a summary of short-term investments at December 31, 2017: December 31, 2017 (Dollars in thousands) Amortizedcost Grossunrealizedgains Grossunrealizedlosses Fairvalue Certificates of deposit $1,462 $- $- $1,462 Corporate debt securities 7,149 - (3) 7,146 Total $8,611 $- $(3) $8,608 All short-term investments are held as available-for-sale and mature within twelve months of December 31, 2017. Management reviews unrealizedlosses individually and in the aggregate at each reporting period and has determined that none the balances are otherF-18 than temporarily impaired based upon the brief duration of time that the investments have been at a loss position as of December 31, 2017. The Company hadno short-term investments at December 31, 2016.NOTE 5. Fair Value MeasurementsThe Company establishes the fair value of our assets and liabilities using the price that would be received to sell an asset or paid to transfer a liabilityin an orderly transaction between market participants at the measurement date. The Company established a fair value hierarchy based on the inputs used tomeasure fair value.The three levels of the fair value hierarchy are as follows:Level 1: Quoted prices in active markets for identical assets or liabilities.Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.Level 3: Unobservable inputs in which little or no market data exists, and are therefore determined using estimates and assumptions developed by theCompany, which reflect those that a market participant would use.The carrying value of cash, restricted cash, short-term bank deposits, accounts receivable, accounts payable, and accrued liabilities approximate theirrespective fair values due to their relative short maturities. The following table presents our fair value hierarchy for assets measured at fair value on a recurring basis as of December 31, 2017 (in thousands): December 31, 2017 Fair value measurements using input type Level 1 Level 2 Level 3 Total Cash equivalents $2,024 $- $- $2,024 Certificates of deposit - 1,462 - 1,462 Corporate debt securities - 7,146 - 7,146 Total financial assets $2,024 $8,608 $- $10,632 There were no assets measured at fair value on a recurring basis at December 31, 2016.The fair value of certain financial instruments was measured and classified within Level 1 of the fair value hierarchy based on quoted prices. Certainfinancial instruments classified within Level 2 of the fair value hierarchy include the types of instruments that trade in markets that are not considered to beactive, but are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.Certain non-financial assets are measured at fair value, usually with Level 3 inputs including the discounted cash flow method or cost method, on anonrecurring basis in accordance with authoritative guidance. These represent nonfinancial assets initially measured at fair value in connection with ourmerger. The Company utilized significant management judgment to forecast the occurrence of future equity events with a high probability of success usingthe market valuation method. In general, non-financial assets, including our intangible asset and property and equipment, are remeasured at fair value whenthere is an indication of impairment and are recorded at fair value only when any impairment is recognized. NOTE 6. Reverse Merger with Alcobra Ltd.As described in Note 1 “Organization”, the reverse merger completed between Arcturus and Alcobra Ltd. was accounted for as a issuance of shares bythe Company for the net assets of Alcobra Ltd., accompanied by a recapitalization. Arcturus was considered the acquirer for accounting and financialreporting purposes and acquired the assets and assumed the liabilities of Alcobra Ltd., and Arcturus gained control of the combined company after themerger. The annual consolidated financial statements of the Company reflect the operations of the acquirer for accounting purposes together with a deemedissuance of shares, equivalent to the shares held by the former stockholders of the legal acquirer and a recapitalization of the equity of the accountingacquirer. The annual consolidated financial statements include the accounts of the Company since the effective date of the reverse capitalization and theaccounts of Arcturus Therapeutics, Inc. since inception.F-19 The following summarizes the estimated fair value of the assets and liabilities acquired at the date of the merger: (in thousands) Cash and cash equivalents $2,032 Restricted cash 179 Short-term investments 34,188 Prepaid and other assets 434 Property, plant and equipment – held for sale 29 Intangible asset-held for sale 590 Total assets acquired 37,452 Accounts payable and accrued expenses (1,906)Net assets acquired $35,546 The estimated fair value of total considerations paid was $40,841,000 based on the shares and options of Alcobra Ltd. outstanding on the merger dateas adjusted per the merger agreement of 3,997,000 multiplied by the closing price of $10.22 on the date of the merger. The excess of the fair value of theconsideration paid over the fair value of the net assets acquired as detailed above was $5,295,000, which was recorded as a charge to additional paid incapital in the equity section of the balance sheet. The Company also incurred direct merger-related costs totaling $1,734,000, which offset proceeds receivedfrom the transaction and were recorded as a reduction to additional paid in capital in the Company’s consolidated balance sheet. Assets acquired in the merger included an intangible asset consisting of in-process research and development for proprietary drug technology calledADAIR. At the closing date of the reverse merger, we entered into an agreement with Amiservice to which we agreed to transfer certain intellectual propertyrelated to ADAIR in exchange for a minority equity stake in a company to be formed by Amiservice for the purpose of acquiring the ADAIR assets. Theagreement is subject to certain closing conditions that have not been met. The Company determined that the asset met the classification criteria as held forsale in accordance with related accounting guidance when acquired and remained held for sale at December 31, 2017. There was also property, plant andequipment acquired in the merger which has been sold as of December 31, 2017. To determine the fair value of the ADAIR asset, the Company utilized anindependent valuation consultant who valued the asset using a market approach valuation method. In conjunction with this valuation, managementjudgment was required to forecast the occurrence of future events that would trigger the closing of the ADAIR sale agreement. The asset will be evaluated ateach future reporting date to evaluate whether it continues to be held for sale and for any potential impairment of its carrying value. NOTE 7. Balance sheet detailsPrepaid expenses and other current assets consisted of the following as of December 31, 2017 and December 31, 2016: December 31, (in thousands) 2017 2016 Prepaid expenses $704 $242 Other current assets 355 111 Total $1,059 $353 Accrued liabilities consisted of the following as of December 31, 2017 and December 31, 2016: December 31, (in thousands) 2017 2016 Accrued compensation $1,812 $369 Other accrued liabilities 981 692 Total $2,793 $1,061 F-20 NOTE 8. Property and Equipment, NetProperty and equipment, net consisted of the following: December 31, (in thousands) 2017 2016 Research equipment $1,620 $1,495 Computers and software 97 98 Office equipment and furniture 255 255 Leasehold improvements 44 44 Total 2,016 1,892 Less accumulated depreciation and amortization (967) (557)Property and equipment, net $1,049 $1,335 Depreciation and amortization expense was $410,000, $294,000 and $192,000 for the years ended December 31, 2017, 2016 and 2015, respectively.NOTE 9. Convertible Promissory NotesIn 2014 and 2015, the Company sold unsecured convertible promissory notes to investors, including members of the Board of Directors and beneficialowners of more than 5% of our capital stock, in the aggregate principal amount of $5.9 million. The notes were amended to extend the maturity date toDecember 31, 2016 and gave the holders the option to elect repayment or conversion upon maturity. The notes carried interest at a rate of 5% per annum,with interest payments deferred until conversion or maturity. In December 2016, the Company and the holders of a majority of the outstanding principal amount of the notes, modified the conversion price uponmaturity of the notes which was deemed to represent an induced conversion for accounting purposes. On December 31, 2016, the notes matured and holdersof $5,670,000 in outstanding principal and $560,000 of accrued interest elected to convert their outstanding balance into 521,415 shares of Series APreferred Stock. Upon conversion of the notes, the Company recorded debt conversion expense of $250,000 within other expense in the consolidatedstatement of operations and comprehensive loss. The holders of $135,000 in outstanding principal elected repayment. The holders of $120,000 inoutstanding principal remained outstanding as of December 31, 2016. In March 2017, the maturity date of the notes that remained outstanding was extendedto December 31, 2017.During 2017, the Company sold unsecured convertible promissory notes in the aggregate principal amount of $5,675,000. The notes were scheduledto mature on February 28, 2019 and contained conversion provisions upon specified events. The notes carried interest at a rate of 5% per annum, with interestpayments deferred until conversion or maturity.In September 2017, the convertible note agreements were amended in order to include an automatic conversion and beneficial conversion featureupon the closing of the merger agreement. On November 15, 2017 and in connection with the merger, holders of all of the Company's convertible promissory notes converted $5,795,000 ofprincipal value and $162,000 of accrued interest of into 616,824 Ordinary Shares at an average conversion rate of $10.19 per share. Additionally, theCompany recognized additional expense of $348,000 as a result of the beneficial conversion feature received by the noteholders upon settlement per termsof the amended note agreements, which was charged to other expense included in the consolidated statements of operations and comprehensive loss.The Company recognized interest expense related to the notes of $150,000, $295,000 and $251,000 during the years ended December 31, 2017, 2016and 2015, respectively.F-21 NOTE 10. Shareholders’ Equity Preferred stockSeries Seed Preferred StockIn April 2013, the Company sold and issued in a private placement 1,284,402 shares of Series Seed Preferred (“SSP”) stock at $1.02 per share. Eachshare of SSP stock granted the investor 0.15 fully vested warrants to purchase shares of ordinary shares at a strike price of $1.02 per share over a term nolonger than ten years from the date of issue .Series A Preferred StockIn December 2013 and January 2014, the Company sold and issued 959,641 shares of Series A Preferred stock at $5.46 per share in a privateplacement. Upon the December 2016 maturity of the Notes, holders of $6,228,989 in outstanding principal and accrued interest elected conversion of theirNotes into 521,449 shares of Series A Preferred stock at prices per share ranging from $11.60 to $12.97. Conversion of Series Seed and Series A Preferred StockOn November 15, 2017, the 2,765,492 outstanding shares of Series Seed and Series A preferred stock converted into the same number of OrdinaryShares immediately prior to the closing of the merger.WarrantsWarrants were issued in connection with the issuance of the SSP stock. As of December 31, 2016, there were 192,647 warrants outstanding to purchaseshares of our Ordinary Shares at $1.02 per share. In 2017 and in conjunction with the merger, all outstanding warrants were exercised for 188,980 OrdinaryShares (after subtraction of shares for net exercise, when selected). The Company received proceeds of $160,000 in conjunction with the warrant exercises in2017.Ordinary SharesMerger and reverse stock splitThe Company completed the merger with Alcobra Ltd. on November 15, 2017 as described in footnote 6 to the consolidated financial statements. Inconnection with the merger, all outstanding shares of Arcturus Therapeutics, Inc. were exchanged for the Company’s Ordinary Shares at a rate of .293Ordinary Shares of the Company’s stock for each share of Arcturus Therapeutics, Inc. common stock.Also on November 15, 2017 and prior to and in connection with the merger, Alcobra Ltd. effected a 1-for-7 reverse stock split of Ordinary Shares andchanged Ordinary Shares authorized to 30,000,000 shares. All historical information presented herein has been retroactively restated to reflect the effect ofthe merger exchange ratio, reverse stock split and change to the authorized number of Ordinary Shares in accordance with Accounting Standards CodificationTopic 260, “Earnings Per Share”.Restricted Ordinary SharesIn March 2013, the founders of the Company purchased 2,783,686 Ordinary Shares of stock for $0.0068 per share. Of the shares purchased, 1,538,353were subject to a repurchase option whereby the Company has an option for two months after date of termination of service as to repurchase any or all of theunvested shares at the original purchase price per share. The repurchase option shall be deemed to be automatically exercised by the Company as of the endof the two-month period unless the Company notifies the purchaser that it does not intend to exercise its option. The shares will be vested (1) 25% afterobtaining suitable siRNA license; (2) 25% after in vivo proof-of-concept achieved; (3) 25% after a regulatory agency new drug application (such as anInvestigational New Drug application) is filed and accepted by the applicable regulatory agency; and (4) 25% after human biological proof-of-concept isachieved. The Company met the first two milestones during 2013 and 2014. In 2017, the ordinary shares purchase agreements were amended to clarifyvesting conditions resulting in a modification expense being recorded related to one of the awards totaling $1,495,000. As of December 31, 2017 and 2016there were 622,667 and 769,176 Ordinary Shares which unvested and were subject to the repurchase option, respectively.F-22 NOTE 11. Share-Based CompensationArcturus Therapeutics, Inc. had one stock compensation plan prior to the merger, the 2013 Equity Incentive Plan (the “2013” Plan) which provides forthe granting of options, warrants, restricted stock awards, restricted stock units, and other equity-based compensation to the Company’s directors, employeesand consultants. In connection with the merger and as required in the 2013 Plan, all outstanding options in the 2013 Plan converted into options to purchaseshares of Alcobra Ltd.’s Ordinary Shares, as renamed Arcturus Therapeutics Ltd., and the applicable share amounts and exercise prices were adjusted to reflectthe exchange ratio. The 2013 Plan has been extinguished and no additional grants shall be made from the 2013 Plan. Options granted under the 2013 Plangenerally expire ten years from the date of grant. There are no shares available for future issuance under the 2013 Plan at December 31, 2017.Prior to the merger, Alcobra Ltd. granted options to officers, directors, advisors, management and other key employees through the 2010 IncentiveOption Plan (the “2010 Plan"). Substantially all options that were outstanding under the 2010 Plan became fully vested upon the closing of the merger. Thevalue of these options was included as a component of the purchase price recorded in conjunction with the merger. The number of shares subject to and theexercise prices applicable to these outstanding options were adjusted in connection with the 1- for- 7 reverse stock-split. Options granted under the 2010 Plangenerally expire ten years from the date of grant. Upon merger, the 2013 Plan was assumed by the 2010 Plan and the Company intends for the 2010 Plan to beits primary stock compensation plan for future awards. The Company generally issues new shares upon option exercise. There are 465,558 shares available forfuture issuance under the 2010 Plan as of December 31, 2017. Share OptionsThe following table presents the weighted-average assumptions used in the Black-Scholes valuation model by the Company in calculating the fairvalue of share options granted: For the Year Ended December 31, 2017 2016 2015 Expected life (in years) 7.3 5.8 6.1 Expected volatility 76.4% 83.4% 76.1%Expected dividend yield —% —% —%Risk-free interest rate 1.87% 1.51% 1.64%Grant date weighted average fair value $7.94 $1.23 $3.65 The following table summarizes the Company’s share option activity for the year ended December 31, 2017: Number ofShares Weighted-AverageExercise Price Weighted-AverageRemainingContractualTerm(Years) AggregateIntrinsicValue (inthousands) Outstanding – December 31, 2016 413,752 $2.15 Granted 91,562 $1.02 Acquired in conjunction with merger with Alcobra Ltd. 418,667 $26.37 Exercised (378,343) $2.61 $504 Forfeited/cancelled (201,583) $39.90 Outstanding – December 31, 2017 344,055 $8.70 6.1 $1,181 Exercisable – December 31, 2017 268,888 $3.25 5.4 $709 Exercisable and expected to vest – December 31, 2017 344,055 $8.70 6.1 $1,181 At December 31, 2017, the total unrecognized compensation cost of $217,000 will be recognized over the weighted-average remaining service periodof approximately 2.8 years. The fair value of the options vested during the years ended December 31, 2017, 2016 and 2015 was $669,000, $171,000 and$177,000, respectively. F-23 During 2017, the Company granted options for 58,600 shares to two board of directors members at an exercise price below fair value at the grant date.The awards were subject to performance conditions based on closing the reverse merger with Alcobra Ltd. and execution of a facility lease. All of the optionsvested during 2017, and related expense of $568,000 is included in general and administrative expense for the year ended December 31, 2017 related to theawards. There were no options granted that were subject to performance conditions for the years ended December 31, 2016 and 2015.Options granted that were exercised prior to vesting are subject to repurchase by the Company at the lower of the original issue price or fair value andwill vest according to the respective option agreement. A portion of the Company’s share options have been exercised prior to vesting and are notoutstanding. As of December 31, 2017, exercisable and expected to vest included 35,595 options which were still subject to future vesting (and which maybe repurchased by the Company in the event the option holder ceases to provide services to the Company).Share-based compensation expenses included in the Company’s statements of operations and comprehensive loss for the years ended December 31,2017, 2016 and 2015 were: For the Year Ended December 31, (in thousands) 2017 2016 2015 Research and development $38 $217 $62 General and administrative 2,132 83 37 Total $2,170 $300 $99 Stock-based compensation expense for the year ended December 31, 2017 includes $1,495,000 of expense related to a modification of a restrictedOrdinary Shares agreement as discussed in Note 10. NOTE 12. Income TaxesA reconciliation of income (loss) before income taxes for domestic and foreign locations for the years ended December 31, 2017, 2016 and 2015 is asfollows: For the Year Ended December 31, (In thousands) 2017 2016 2015 United States $(10,820) $(1,536) $(1,901)Foreign (81) - - Total current tax expense $(10,901) $(1,536) $(1,901) The company accounts for income taxes in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. The impact of an uncertainincome tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevanttaxing authority. An uncertain tax position will not be recognized if it has less than 50% likelihood of being sustained. The following table summarizes our gross unrecognized tax benefits (in millions): December 31, 2017 2016 2015 Beginning balance of unrecognized tax benefits $0.4 $0.4 $0.4 Settlement of prior period tax positions — — — Increase for prior period tax positions — — — Increase for current period tax positions — — — Ending balance of unrecognized tax benefits $0.4 $0.4 $0.4 Included in the balance of unrecognized tax benefits at December 31, 2017, 2016 and 2015 is $0.4 million, $0.4 million and $0.4 million respectivelythat could impact our effective tax rate, if recognized. None of the unrecognized tax benefits currently impact our effective tax rate due to the full valuationallowance we have recorded against our deferred tax assets.F-24 The company is subject to taxation and files income tax returns in the United States, California and Israel. Currently, no historical years are underexamination. The Company's tax years from 2013 to date are subject to examination by the Israeli, U.S. and state taxing authorities due to the carryforward ofunutilized net operating losses and research and development credits. The Company's policy is to recognize interest expense and penalties related to incometax matters as income tax expense. As of December 31, 2017, there are unrecognized tax benefits of $0.2 million and $0.2 million for the United States andCalifornia. There was no tax related interest or penalties recognized for the years ended December 31, 2017, 2016 or 2015.We do not anticipate any material changes to our unrecognized tax benefits within the next twelve months.The significant components of deferred income taxes at December 31, 2017, 2016 and 2015 are as follows: December 31, (in thousands) 2017 2016 2015 Deferred tax assets: Net operating loss (1) $25,101 $1,752 $3,774 Tax credits 35 30 6 Accrued liabilities 227 187 98 Deferred revenue 1,162 2,430 — Depreciation and amortization — — 106 Share-based compensation 90 221 100 Total gross deferred tax assets 26,615 4,620 4,084 Deferred tax liabilities: Depreciation and amortization (96) (15) — Valuation allowance (26,519) (4,605) (4,084)Net deferred tax asset $— $— $— (1)Included in the deferred tax assets for net operating losses are pre-acquisition Alcobra, Inc. and Alcobra Ltd. federal, state and foreign losses of$0.2 million, $0.1 million and $20.8 million respectively, that the Company is uncertain that the net operating losses will be available for usein the future.The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. Dueprimarily to the acquisition of Alcobra Ltd. net operating losses, the valuation allowance has increased by $21.9 million between December 31, 2016 andDecember 31, 2017. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likelythan not that deferred tax assets will be realizable, the valuation allowance will be reduced.At December 31, 2017, the Company had federal and state net operating losses, or NOL, carryforwards of approximately $15.6 million and $15.4million, respectively. The federal NOL carryforwards begin to expire in 2034, and the state NOL carryforwards begin to expire in 2034. The Company hasforeign NOL carryforwards of approximately $90.2 million that do not expire and can be carried forward indefinitely.At December 31, 2017, the Company had federal and state research and development credit carryforwards of approximately $0.2 million and $0.2million, respectively. The federal credit carryforwards begin to expire in 2033, and the state credits carry forward indefinitely.The Company has also incurred research and development expenses of $15.9 million and $17.9 million for the years ended December 31, 2017 and2016, respectively. The Company believes that a portion of these expenditures will yield additional federal and California tax credits; however, the potentialcredits under the tax laws have not yet been calculated.Pursuant to Internal Revenue Code of 1986, as amended (the Code) Sections 382 and 383, annual use of the Company’s federal and California netoperating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurswithin a three-year period. The Company has not completed a Code Section 382 analysis regarding the limitation of net operating loss carryforwards andother tax attributes. There is a risk that changes in ownership have occurred since Company's formation. If a change in ownership were to have occurred, theNOL carryforwards and other tax attributes could be limited or restricted. If limited, the related asset would be removed from the deferred tax asset schedulewith a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes,if any, related to the Company’s operations in the U.S. will not impact the Company’s effective tax rate. F-25 A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2017 2016 2015 Federal statutory income tax rate 34.0% 34.0% 34.0%State income taxes, net of federal benefit 4.4% 3.1% 5.0%Tax credits —% 1.5% —%Tax Cuts and JOBS Act (22.0%) —% —%Change in tax rate (8.3%) —% —%Change in valuation allowance 1.8% (33.8%) (34.4%)Other (1.6%) —% —%Permanent differences (8.3%) (7.1%) (4.6%)Provision for income taxes —% (2.3%) —% On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the "Act"). The Act amends the Internal RevenueCode to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Act reduces the corporate tax ratefrom a maximum of 35% to a flat 21% rate. The rate reduction is effective on January 1, 2018. As a result of the rate reduction, the company has reduced thedeferred tax asset balance as of December 31, 2017 by $2.4 million. Due to the company's full valuation allowance position, the company has also reducedthe valuation allowance by the same amount.On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of US GAAP in situations when aregistrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accountingfor certain income tax effects of the Act. In accordance with SAB 118, the Company has recognized the provisional tax impacts of the revaluation of thedeferred tax assets and liabilities as of December 31, 2017. There was no deferred tax benefit of expense with respect to the remeasurement of certain deferredtax assets and liabilities due to the full valuation allowance against net deferred tax assets. Additional analysis of the law and the impact to the company willbe performed and any impact will be recorded in the respective quarter in 2018. NOTE 13. Commitments and ContingenciesCFFT Funding agreement The Company has received royalty bearing grants sponsored by CFFT. Should the awards result in a successful product, the Company will pay CFFT aspecified payment amount in installments following commercialization based on a formula that is six times the total award amount, plus a payment equal tothe awarded payments, within sixty days after aggregate net sales of the product exceed certain thresholds. Further, in the event of a license, sale or othertransfer of the product or the Company’s development program technology (including a change of control transaction), the Company will pay CFFT apercentage of such transfer payments actually received by the Company or the Company’s shareholders (subject to a royalty cap). As of December 31, 2017,the Company has received $0.5 million in grants and has not had a successful product utilizing CFFT grants. Operating LeasesThe Company leases approximately 10,335 square feet of office and lab space for its corporate headquarters in San Diego, California under a non-cancelable operating lease. The lease term was from November 2014 to February 2018 and included an option to extend for one additional term of threeyears. Monthly rental payments were due under the lease and there were escalating rent payments during the term of the lease. In October 2017, the lease wasamended in conjunction with the lease of an adjacent office space and extended the lease through five days after the date of occupancy of the adjacent officespace, which occurred in March 2018.F-26 In October 2017, the Company entered into a new lease for approximately 24,705 square feet in office space adjacent to its previously occupiedheadquarters, whose terms provide that the lease will begin on the “Commencement Date” commensurate with delivery of the premises by the landlord(which occurred in March 2018) and will extend for approximately 84 months from the commencement date. Monthly rental payments are due under thelease and there are escalating rent payments during the term of the lease. The Company is also responsible for its proportional share of operating expenses ofthe building and common areas. In conjunction with the new lease, the Company will receive free rent for four months and received a tenant improvementallowance of $74,000. The lease may be extended for one five year period at then current market rate with annual escalations. The Company entered into anirrevocable standby letter of credit with the landlord for the security deposit of $96,000 upon executing the lease which is included (along with additionalfunds required to secure the letter of credit) in the balance of other assets as of December 31, 2017.The Company also leases office space in Pennsylvania under a non-cancelable operating lease which expires in October 2018. This space wassubleased beginning in October 2017 through the remaining term of the lease. Sublease income was immaterial for the year ended December 31, 2017, andthere was no sublease income in 2016 or 2015.For operating leases, minimum lease payments, including minimum scheduled rent increases, are recognized as rent expense on a straight-line basisover the lease term. Leasehold improvement incentives paid to the Company by the landlord are recorded as a deferred rent and amortized as a reduction ofrent expense over the lease term. Rent expense totaled $334,000, $330,000 and $330,000 for the years ended December 31, 2017, 2016 and 2015,respectively.Future minimum payments under leases and lease commitments with initial terms greater than one year were as follows at December 31, 2017 (inthousands): 2018 $556 2019 1,234 2020 1,271 2021 1,310 2022 1,349 Thereafter 3,138 Total $8,858 The Company has purchase commitments of $1.5 million related to non-cancellable purchase orders at December 31, 2017.Note 14. Related Party TransactionsDuring 2016, the Company entered into a Research Collaboration and License Agreement with a related party, Providence Therapeutics, Inc.(“Providence”) whose CEO and President is also a stockholder of the Company, to identify and optimize microRNA modulators and/or mimetics for thetreatment of neoplastic diseases. In April 2017, the Providence Agreement was amended to include mRNA for the treatment of neoplastic disease. As part ofthe agreement, the Company granted Providence the exclusive rights to research, develop, manufacture and commercialize such products and Providencemade an upfront payment of $500,000 which is being amortized over the research term. Each party is responsible for their own research costs under theagreement, and Providence is responsible for all of the development costs through the completion of Phase 2 clinical trials. The Company is entitled to sharein future product revenue of each product provided the Company shares in the product’s post Phase 2 costs. Separately, Providence has agreed to pay aspecified rate for the use of the Company’s employees. For the years ended December 31, 2017 and 2016, the Company has recognized $1.0 million and $0.5million, respectively, in revenue related to the amortization of the upfront payment and revenue related to the use of Company employees and expensereimbursements. There were no outstanding accounts receivable related to this agreement as of December 31, 2017 and 2016. During 2017, the Companystock agreement for the President and CEO of Providence was modified to remove the vesting conditions of the original grant and the Company recognized$1.5 million in related stock compensation expense. As of December 31, 2017 and 2016, the President and CEO of Providence held a 5.7% and 10%ownership interest in the Company.Note 15. LitigationIsrael LitigationOn or about February 25, 2018, Joseph Payne, a current Director and former CEO of the Company, filed an action in the District Court at Tel Aviv –Yafo against the Company, its board of directors, Dr. Chivukula, and certain officers alleging that the separation agreement the Company entered into with aresigning officer, Dr. Chivukula, was unlawful and void, and seeking a restraining order and temporary remedies against the Company. Later that same day, inresponse to the plaintiff’s ex parte request, the court issued aF-27 temporary restraining order, ordering the Company to preserve the status quo until the court could consider the matter further. On March 1, 2018, theCompany filed a request for clarification of and partial relief from this order. On March 5, 2018, the court ruled on the Company’s request, clarifying itstemporary restraining order was limited to the remedies sought in the February 25, 2018 motion. On March 12, 2018, the Company filed an opposition toplaintiff's motion for a restraining order. On March 28, 2018, plaintiff filed a motion seeking to extend the temporary restraining order and asking for variousremedies related to a then-scheduled May 7, 2018 Extraordinary General Meeting of the Company’s shareholders that the Company noticed on March 11,2018, including remedies that might affect the agenda of the Extraordinary General Meeting and therefore the language of the proxy, and seeking to restraincertain conduct, including any changes in the Company's share capital, until such Extraordinary General Meeting. The court ordered the Company to file itsanswer to this motion by April 15, 2018. On April 8, 2018, the Company filed a notice with the court informing it that, inter alia, due to the fact that Mr.Payne chose to delay his submission of the motion to “expand” the temporary remedies and to question the agenda of the Extraordinary General Meeting –on Friday, April 6, 2018, the Company's Board convened and approved the postponement of the date of the Extraordinary General Meeting, until the courtissues a decision on Mr. Payne's motion to 'expand' the temporary remedies. Later that day (April 8, 2018), Mr. Payne moved for another temporary restrainingorder seeking to prevent the board from delaying the Extraordinary General Meeting. The Company responded to the motion to extend the temporaryrestraining on April 15, 2018. On May 13, 2018, the court issued its ruling in the motion to expand the temporary remedies. The court set the agenda of theExtraordinary General Meeting, and ordered the Company to convene a Board meeting within seven days, and to summon an Extraordinary General Meetingwithin 35 days from that date. In addition, the court ruled that the motion regarding the changes in the Company's share capital will be decided in a hearingscheduled for May 23, 2018. On April 18, 2018, the Company sent notice of a board meeting scheduled for April 20, 2018 to approve a private placement transaction. On April 20,2018, Mr. Payne obtained a temporary restraining order stating that any such approval by the board may be vacated by the court. On April 22, 2018, theCompany filed an opposition to the temporary restraining order, on April 25, 2018 the court held an emergency hearing on the temporary restraining order.On April 26, 2018 Mr. Payne and Dr. Chivukula filed a reply to the Company's opposition, and on April 27, 2018 certain other shareholders filed positionstatements with the court supporting Mr. Payne. On April 27, 2018, the Company filed a notice. On April 29, 2018, the court ruled that the temporaryrestraining order would stay in place. On May 2, 2018, the Company submitted a motion to amend the protocol of the hearing that took place on April 25,2018 and to reconsider the decision of April 29, 2018. The Company therefore asked the court to direct that cross- examinations will be held on the hearingscheduled for May 9, 2018, and afterwards the court will reconsider the decision of April 29, 2018. The court ordered Mr. Payne to answer the Company'smotions from May 2, 2018 by May 6, 2018. On May 6, 2018, the court ordered the Company to respond to Mr. Payne’s answer to the Company's motionsfrom May 2, 2018 by May 8, 2018. Because of the proximity to the day set for hearing, the Company asked the court to schedule another hearing for thecross- examinations. On May 13, 2018, the court denied the Company's motion to amend the protocol of the hearing that took place on April 25, 2018, butgranted the Company's motion to reconsider the decision of April 29, 2018 and ordered that cross- examinations will be held on May 23, 2018.Chivukula ArbitrationOn March 21, 2018, the Company filed an arbitration demand before JAMS in San Diego, CA, seeking to arbitrate the validity of the separationagreement and related claims between the Company and Dr. Chivukula. On or about April 10, 2018, Dr. Chivukula filed an objection to the arbitration. On orabout April 12, 2018, the Company responded to his objection. On April 20, 2018 JAMS preliminarily rejected the basis for Dr. Chivukula’s objection to thearbitration and appointed Mr. Charles H. Dick, Jr. as the arbitrator. No arbitration date has been scheduled.California State Court LitigationOn March 27, 2018, the Company and Arcturus Therapeutics, Inc. filed an action in the Superior Court of the State of California, San Diego Countycaptioned Arcturus Therapeutics Ltd.; Arcturus Therapeutics, Inc. v. Joseph E. Payne, Case No. 37-2018-00015271-CU-BC-CTL alleging that Mr. Payne (1)breached his confidentiality and employment agreements, (2) breached his fiduciary duties to the plaintiffs during his service as President and CEO of theplaintiffs and as a director of the plaintiffs’ respective boards of directors, (3) interfered with contractual relations by encouraging Dr. Chivukula, a resigningofficer, to breach the consulting agreement entered into by and between Dr. Chivukula and Arcturus Therapeutics, Inc. and the voting trust agreement enteredinto by and between Dr. Chivukula and the Company, and (4) interfered with prospective business advantage by encouraging Company shareholders to voteagainst the ratification of the appointment of Ernst & Young LLP in the United States as the Company’s independent auditor. The lawsuit seeks injunctiveand monetary relief. Discovery requests have been served on Mr. Payne. The deadline for Mr. Payne to respond to the complaint and the discovery requests isMay 15, 2018. A civil case management conference has been set for August 31, 2018.F-28 California Federal Court LitigationOn April 19, 2018, the Company filed an action in the United States District Court, Southern District of California captioned Arcturus Therapeutics,Inc. v. Joseph E. Payne; Peter Farrell; Andrew Sassine; Bradley Sorenson; James Barlow; and Does 1 through 100, Case No. 18cv766-MMA(NLS) allegingthat the Defendants have violated and continue to violate Section 13(d) of the Exchange Act, 15 U.S.C. §78m(d), and Regulation 13D by failing to disclosein Schedule 13D filings the existence of group agreements to buy, sell, or vote shares of the Company and effect a change in the composition of theCompany’s board of directors. The lawsuit seeks injunctive relief. On April 24, 2018, the Company filed a motion seeking a Temporary Restraining Order,Preliminary Injunction, and Expedited Discovery. On April 25, 2018, the court denied the Company’s request for a Temporary Restraining Order butscheduled a hearing for the Company’s motion for a Preliminary Injunction and Expedited Discovery for May 21, 2018. Note 16. Subsequent Events In preparing the financial statements as of December 31, 2016 and for the year then ended, the Company has evaluated subsequent events forrecognition and measurement purposes through June 26, 2017, the date the independent auditors' report was originally issued and the audited annualfinancial statements were available for issuance. After the original issuance of the financial statements and through May 14, 2018, the Company hasevaluated subsequent events or transactions that have occurred that may require disclosure in the accompanying financial statements. The Company hasconcluded that no events or transactions have occurred subsequent to December 31, 2016 that require disclosure.In January 2018, the Company entered into a collaboration agreement with CureVac AG, to jointly discover, develop and commercialize mRNAtherapeutics.In February 2018, the Company appointed Mark Herbert as Interim President upon the termination of Joseph E. Payne as President and ChiefExecutive Officer (See Note 15 Litigation). Additionally, the Company appointed Dr. Christine Esau as Vice President of Research and Development, whileannouncing the stepping down of Dr. Chivukula as Chief Scientific Officer and Chief Operating Officer and will serve as a Scientific Advisor of theCompany. In connection with Dr. Chivukula’s resignation, the Company entered into an agreement providing for cash payment of $335,000 and acceleratedvesting of 183,137 Ordinary Shares. The agreement also provided for an additional $100,000 payment to be made for scientific advisory services to beprovided for a period of six months following the separation date. F-29 Exhibit 3.1VOTING TRUST AGREEMENTThis Voting Trust Agreement (this “Agreement”) is made and entered into effective for all purposes and in all respects asof February 11, 2018 by and among (i) Arcturus Therapeutics Ltd., an Israeli company, or its successors and assigns (the “Company”),(ii) Padmanabh Chivukula (the “Shareholder”), and (iii) the then-acting Principal Executive Officer (defined below) of the Company(the “Trustee”), who shall initially be Mark Herbert.Whereas, Shareholder is the legal and beneficial owner of 732,548 ordinary shares of the Company (in each case inclusivewithout limitation of all shares held beneficially or of record by the Shareholder’s spouse) (collectively and inclusive of the definitionbelow, the “Shares”) as of the date hereof;Whereas, the Shareholder desires to transfer and assign to Trustee, and Trustee desires to accept such transfer andassignment of, the right to vote or otherwise act for the Shareholder in connection with all of his rights and responsibilities as ashareholder of the Company in respect of the Shares as set forth herein; andWhereas, the parties hereto desire to set forth in writing their understandings and agreements.Now, Therefore, in consideration of the foregoing, of the mutual promises hereinafter set forth and of other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending legally and equitably to bebound, hereby agree as follows:1.Creation of Voting Trust. The Shareholder hereby transfers and assigns to Trustee, and Trustee hereby acceptsthe transfer and assignment of, the right to vote or otherwise act for the Shareholder in connection with all of his rights andresponsibilities as a shareholder of the Company in respect of the Shares; and, in order to effectuate such transfer and assignment, theShareholder hereby transfers to Trustee the certificates evidencing his Shares (or competent evidence thereof in the case of book-entryshares) which certificate(s) (or competent evidence thereof) shall bear a legend that said Shares are subject to the terms and provisionsof this Agreement (or equivalent thereof in the case of book-entry shares). Any other shares of the Company’s share capital legally orbeneficially owned by the Shareholder as of the effective date of this Agreement, and any and all other shares of the Company’s sharecapital that may be issued to Shareholder after the effective date of this Agreement upon exercise of options or other rights of theShareholder to acquire the Company’s share capital existing as of the effective date of this Agreement, shall also be subject to the termsof this Agreement and upon receiving such shares, the Shareholder shall immediately deliver or cause to be delivered all such shares tothe Trustee (or competent evidence thereof in the case of book-entry shares). The term “Shares” as used in this Agreement shallinclude the Shares as first defined above as well as all such other shares issued or issuable upon exercise of options or other rights toacquire the Company’s share capital by the Shareholder existing as of the effective date of this Agreement. Trustee shall hold suchcertificates of the Shareholder, or competent evidence thereof in the case of book-entry Shares, as trustee, subject to the terms andconditions of this Agreement. 2.Restriction on Transfer.(a)Applicable Law; Preexisting Agreements. The Shareholder may sell, transfer, hypothecate, pledge orotherwise transfer the Shareholder’s Shares in each case subject to (i) the provisions of this Agreement; (ii) the requirements ofapplicable securities laws and regulations; (iii) any restrictions on transfer contained in the Articles of Association or Certificate ofIncorporation of the Company, as applicable, or other restrictions set forth in the organizational documents of the Company, as may beamended or restated from time to time (including policies and charters the Company applicable to the Shares as may be approved bythe Board of Directors of the Company from time to time (the “Board”)), and (iv) the applicable provisions of any other applicableagreement binding upon the Company and the Shareholder, all of which applicable agreements, laws and organizational documents areincorporated herein by reference.(b)Transferees. Subject to Section 2(c), any transferee, other than the Company, of the Shares shallbecome a party to this Agreement and be subject to all the obligations of the Shareholder herein, by executing a counterpart signaturepage hereto, and any purported transfer, other than to the Company, of the Shares to a person or entity that has not become a partyhereto shall be null and void. Any transferee, other than the Company, of the Shareholder’s Shares that are subject to this Agreementshall have all the rights and shall be subject to all obligations and limitations of the transferor Shareholder set forth in this Agreement.(c)Exempted Transferees. Notwithstanding the foregoing or anything to the contrary herein, theprovisions of Section 2(b) shall not apply to the sale by the Shareholder of up to 25,000 Shares per month in open market transactions,provided that the Shareholder shall deliver prior written notice to the Company of such sale(s); provided, however, that the exemptedsales pursuant to this Section 2(c) shall not exceed 250,000 Shares in any 12 month period.3.Trustee.(a)Rights and Powers of Trustee. So long as a Trustee shall be deemed to hold the Shares in trust inaccordance with the terms hereof, the Trustee shall possess, and in the Trustee’s discretion shall be entitled to exercise in person or bynominees, agents, attorneys-in-fact, or proxies, all rights and powers to vote, assent, or consent with respect to the Shares, and to takepart in and consent to any corporate or shareholder action of any kind whatsoever, as well as with respect to any other securities withvoting rights received in respect of the Shares by way of a stock dividend. The rights of the Trustee herein to vote, assent or consentshall include, without limitation, the right to vote at any election of the directors and in favor of or in opposition to any resolution for aproposed dissolution and liquidation, merger, or consolidation of the Company, or a sale of all or substantially all of its assets, or theissuance or creation of additional classes of its securities, or any action which may properly be presented at any shareholders’ meetingor which requires the consent of the shareholders of the Company. The Shareholder shall not have any voting rights in respect of theShares as long as this Agreement and the voting trust created hereby is in effect with respect to such Shares. Shareholder shall remainthe beneficial owner of the Shares, subject to the Trustee’s rights and interests hereunder. For clarity, Trustee shall have no authority to sell, pledge, hypothecate or otherwise dispose of the Shares or any interest therein. In theevent dividends are declared on the Shares, such funds shall be the exclusive property of Shareholder, and if received by the Trusteeshall be remitted to Shareholder. Trustee hereby accepts his or her appointment as Trustee pursuant to the terms and conditions of thisAgreement, and agrees to administer the voting trust created hereby in accordance with the terms and conditions of this Agreement,until his or her earlier resignation, removal, death or incapacitation as set forth herein.(b)Liability of Trustee. The Trustee, including any successor Trustee, shall not be liable by reason ofany matter or thing in any way arising out of or in relation to this Agreement, except for such loss or damage as the Shareholder maysuffer by reason of the Trustee’s gross negligence or willful misconduct. In no event shall the Trustee be liable for incidental, punitiveor consequential damages. The Trustee shall not be required to give any bond or other security for the discharge of his or herduties. The Trustee is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case theTrustee obeys or complies with any such order, judgment or decree, it shall not be liable to the Shareholder or to any other person, firmor corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed,modified, annulled, set aside, vacated or found to have been entered without jurisdiction. (c)Expenses. The Company shall pay all reasonable expenses of the Trustee, including attorney fees, andshall discharge all liabilities incurred by the Trustee in connection with the exercise of his or her powers and the performance of his orher duties under this Agreement. Any action or omission undertaken by a Trustee in good faith in accordance with the advice of legalcounsel and the Board shall be binding and conclusive on the Shareholder.(d)Resignation; Successor Trustee. The Trustee shall remain Trustee for so long as Trustee is the acting“Principal Executive Officer” of the Company, as such term is used in Item 402 of Regulation S-K or any successor provision thereof,and may only resign or shall cease to perform his or her duties hereunder as Trustee upon resignation from, or termination by theCompany of, his or her position as Principal Executive Officer of the Company, subject to the removal of a Trustee pursuant to Section3(e). Upon such resignation or termination, the Company shall nominate a successor Trustee who shall be the successive PrincipalExecutive Officer of the Company, who shall have all rights, powers and obligations of Trustee as set forth in this Agreement, and allrights, powers and obligations of the resigning Trustee hereunder shall immediately terminate upon such resignation and/or termination,evidenced by the execution and delivery of a counterpart signature page to this Agreement by the successor Trustee as “Trustee”hereunder. The fact that a Trustee has resigned such Trustee’s position as a Trustee shall not act, or be construed to act, as a release ofany Shares from the terms and provisions of this Agreement or the voting trust created hereby.(e)Removal. In case of the Trustee cannot perform his or her duties, obligations, covenants or agreementsunder this Agreement, the Board shall in good faith select, nominate, and appoint an interim Trustee as quickly as is reasonablypossible, who shall be an “executive officer” of the Company, as defined in as defined in Rule 3b-7 of the Exchange Act or anysuccessor provision thereof, and who shall serve in such capacity and in accordance with the terms of this Agreement, until a successorTrustee is nominated and appointed by the Company and duly executes a counterpart signature page to this Agreement as “Trustee” hereunder.4.Standstill. From the date hereof until termination of this Agreement, without the prior written consent of theCompany, Shareholder shall not directly or indirectly:(a)(A) nominate, give notice of an intent to nominate, or recommend for nomination a person for electionat any shareholder meeting at which members of the Board are to be elected; (B) initiate, encourage or participate in any solicitation ofproxies in respect of any election contest with respect to the Company’s directors; (C) submit any shareholder proposal forconsideration at, or bring any other business before, any shareholder meeting of the Company; (D) initiate, encourage or participate inany solicitation of proxies in respect of any shareholder proposal for consideration at, or bring any other business before, anyshareholder meeting of the Company; (E) initiate, encourage or participate in any “withhold” or similar campaign with respect to anyshareholder meeting or any solicitation of written consents of shareholders; or (F) request, or initiate, encourage or participate in anyrequest to call, a special meeting of the Company’s shareholders;(b)acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase,tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicateor other group (including any group of persons that would be treated as a single “person” under Section 13(d) of the Exchange Act),through swap or hedging transactions or otherwise, any voting securities of the Company or any voting rights decoupled from theunderlying voting securities of the Company;(c)form, join or in any way participate in any group with respect to any voting securities of the Companyin connection with any election or removal contest with respect to the Company’s directors or any shareholder proposal or otherbusiness brought before any shareholder meeting of the Company;(d)other than as expressly set forth herein with regards to the Shares, deposit any Company votingsecurities in any voting trust or subject any Company voting securities to any arrangement or agreement with respect to the votingthereof;(e)seek, alone or in concert with others, to amend any provision of the Company’s articles of association orcertificate of incorporation, as applicable, or other organizational documents;(f)demand an inspection of the Company’s books and records;(g)(A) make any offer or proposal (with or without conditions) with respect to any merger, acquisition,recapitalization, restructuring, disposition or other business combination involving the Shareholder and the Company, (B) solicit anyofficer or director of the Company or any other person who is not a party to this Agreement (a “Third Party”) to make an offer orproposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or otherbusiness combination involving the Company, or publicly encourage, initiate or support any Third Party in making such an offer orproposal, or (C) publicly comment on any Third Party proposal regarding any merger, acquisition, recapitalization, restructuring, disposition, or other business combination with respect to the Company by such Third Party prior tosuch proposal becoming public;(h)publicly disparage or criticize (or make any other public statement or communication that mightreasonably be construed to be derogatory or critical of, or negative toward) the Company, its business or any current or formerdirectors, officers or employees of the Company, or make any other public announcement or public statement regarding the Company,its business or any current or former director, officer or employee of the Company; provided that this provision shall not apply tocompelled testimony, either by legal process, subpoena or otherwise, or to communications that are required by an applicable legalobligation and are subject to contractual provisions providing for confidential disclosure;(i)encourage, pursue, or assist any Third Party to threaten, initiate or pursue, any lawsuit, claim orproceeding before any court against the Company or its Representatives, or otherwise make any claims for losses, damages, or costsagainst the Company or its Representatives, excluding, however, any such actions initiated solely to remedy a breach of thisAgreement or a breach by Company of the Resignation Agreement entered into on or about February 11, 2018; or(j)enter into any negotiations, agreements or understandings with any Third Party with respect to theforegoing, or encourage or seek to persuade any Third Party to take any action with respect to any of the foregoing, or otherwise takeor cause any action materially inconsistent with any of the foregoing.5.Dissolution. In the event of the dissolution or total or partial liquidation of the Company, whether voluntary orinvoluntary, Shareholder shall receive the money, securities, rights or property to which the Shareholder is entitled (including anycertificates deposited with the Trustee hereunder), and Trustee and the Company, as applicable, shall distribute such money, securities,rights or property directly to the Shareholder. Notwithstanding anything to the contrary herein, any transaction or series of transactionsthat are effected solely in connection with a reincorporation, redomestication, reorganization or recapitalization of the Company and itssubsidiaries (as now or hereafter may exist or cease to exist) shall not result be deemed a dissolution or total or partial liquidation of theCompany for purposes of this Section 5.6.Termination of Agreement.(a)This Agreement and the voting trust created hereby shall terminate with respect to the Shareholder’sShares upon the earliest to occur of (i) the effectiveness of a consolidation or merger of the Company with or into any other corporationor other entity, or any other corporate reorganization, in which the holders of the Company’s outstanding voting shares immediatelybefore such consolidation, merger or reorganization do not, immediately after such consolidation, merger or reorganization, retainshares representing a majority of the voting power of the surviving entity of such consolidation, merger or reorganization, (ii) a sale,lease or other disposition of all or substantially all of the assets of the Company, (iii) the date specified in a written notice of terminationfrom Trustee to the Shareholder, (iv) the date that is three (3) years from the date of this Agreement or (v) the date upon which thenumber of shares legally and/or beneficially owned (not taking into account the existence of this Agreement) by the Shareholder is less than 1.75% of the total outstanding shares of the Company. Notwithstanding anything to the contrary herein, any transaction orseries of transactions that are effected solely in connection with a reincorporation, redomestication, reorganization or recapitalization ofthe Company and its subsidiaries (as now or hereafter may exist or cease to exist) shall not result in a termination of this Agreement orthe voting trust created hereby.(b)Upon termination of this Agreement with respect to the Shareholder’s Shares, the voting trust createdpursuant to Section 1 hereof shall cease to have any effect with respect to such Shares, and the parties hereto shall have no furtherrights or obligations under this Agreement with respect to such Shares, except that Trustee shall, within sixty (60) days after thetermination of this Agreement with respect to such Shares, return the Shareholder’s certificate(s) evidencing such Shares (or otherevidence thereof in the case of book-entry shares if returnable) and any other property distributable under the terms hereof with respectto such Shares. 7.Trustee’s Compensation. Trustee shall serve as trustee without compensation; provided however, that suchservice as Trustee shall not affect the right of the Trustee to compensation from the Company for services performed by him or her inany other capacity (e.g., as an officer, director, employee or otherwise).8.Notice to Shareholder. Any notice required hereunder to be given to the Shareholder shall be deemed effectivelygiven: (a) upon personal delivery to the Shareholder, (b) when sent by confirmed electronic mail or facsimile, if sent during normalbusiness hours of the Company, if not, then on the next business day, (c) five (5) days after having been sent by registered or certifiedmail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,specifying next day delivery, with written verification of receipt. For purposes of such notice, the address for the Shareholder shall bethat which appears on the books of the Company at the time such notice is deemed to have been given. Any notice to be given to theTrustee shall be deemed effectively given: (a) upon personal delivery to the Trustee, (b) when sent by confirmed electronic mail orfacsimile if sent during normal business hours of the Company, if not, then on the next business day, (c) five (5) days after having beensent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationallyrecognized overnight courier, specifying next day delivery, with written verification of receipt. For purposes of such notice, theaddress for the Trustee shall be that of the Company at the time such notice is deemed to have been given.9.Modification; Waiver. No amendment or modification of this Agreement shall be effective unless in writing andsigned by each of the parties hereto. Neither the failure nor any delay by a party in exercising any right, power or privilege under thisAgreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercisethereof or the exercise of any right, power or privilege hereunder.10.Benefit and Burden. Except as otherwise provided in this Agreement, this Agreement shall inure to the benefitof, and shall be binding upon, the parties hereto and their legatees, distributees, estates, executors or administrators, personal and legalrepresentatives, successors and assigns. For the avoidance of doubt, this Agreement may be assigned by the Company in connectionwith any transaction or series of transactions that are effected solely in connection with a reincorporation, redomestication, reorganization or recapitalization of the Company and its subsidiaries (as now orhereafter may exist or cease to exist).11.Severability. The invalidity of any particular provision of this Agreement shall not affect the validity of theremainder hereof, and in the event any provision in this Agreement is found by a court of competent jurisdiction to be invalided, thisAgreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. If any one or more of theprovisions of this Agreement shall, for any reason, be held to be unenforceable as to duration, scope, activity or subject, such provisionshall be construed by limiting and reducing it so as to make such provision enforceable to the extent compatible with the then existingapplicable law. Without limiting the generality of the foregoing, it is the express intent of the parties to cause the Shares to be voted bythe Trustee as provided herein. Accordingly, in the event that this Agreement is rescinded or otherwise terminated other than pursuantto its terms for any reason, the parties agree promptly to negotiate a successor voting agreement to accomplish this objective and tootherwise replicate the provisions hereof to the extent possible.12.Applicable Law; Venue. This Agreement, and any disputes arising out of or related to this Agreement (whetherfor breach of contract, tortious conduct or otherwise), shall be governed by and construed and enforced in accordance with the laws ofthe State of Delaware without reference to the conflict of laws principles thereof that would result in the application of the law ofanother jurisdiction. Each party hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and therights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and therights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determinedexclusively in the Superior Court of the State of California, County of San Diego. Each party hereto hereby irrevocably submits withregard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personaljurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than theaforesaid courts. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANYLEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.13.Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall bedeemed to be an original, and all of which taken together shall be deemed to constitute one and the same instrument. Signatures to thisAgreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any otherelectronic means intended to preserve the original graphic and pictorial appearance of a document, shall have the same effect asphysical delivery of the paper document bearing the original signature.14.Remedies; Attorney Fees. Each of the parties hereto acknowledge that a breach or default by any party heretoof the terms and provisions hereof shall cause the non-defaulting party to suffer such damage as cannot be adequately remedied by anaward of monetary damages; and, in this regard, the parties hereto agree that, upon a breach or default of any of the terms or provisionshereof, the non-defaulting party shall be entitled to seek equitable remedies for such default including, without limitation, specificperformance. In the event any action or proceeding is brought as a result of any alleged breach, default or dispute under the terms or provisions hereof or for the purpose of enforcing or interpreting any of the terms or provisions hereof, the prevailing party in any suchaction or proceeding shall be entitled to recover from the other, in addition to such other relief as the prevailing party may be entitled,the prevailing party’s reasonable attorney’s fees and legal costs incurred in that action or proceeding.15.Shareholder Acknowledgement. Shareholder acknowledges that Shareholder has read and understands thisAgreement, that Shareholder is fully aware of its legal effect and that Shareholder has entered into this Agreement freely based onShareholder’s own judgment and not on any representations or promises other than those contained in this Agreement.16.Entire Agreement. This Agreement constitutes the final, complete and exclusive agreement between the partieswith respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, representations andunderstandings of the parties with respect to such subject matter other than as expressly set forth herein.In Witness Whereof, the Company, Shareholders and Trustee have executed this Agreement as of the date first set forthabove. Company: Shareholder: Arcturus Therapeutics Ltd. Padmanabh Chivukula By: /s/ Mark Herbert /s/ Padmanabh ChivukulaName: Mark Herbert Its: Interim President Acknowledged and agreed: Trustee: /s/ [Illegible] Spouse of Shareholder /s/ Mark Herbert Mark Herbert, Interim President Exhibit 4.6 LEASE AGREEMENTTHIS LEASE AGREEMENT (this “Lease”) is made this 4th day of October, 2017, between ARE-SD REGION NO. 44, LLC, a Delawarelimited liability company (“Landlord”), and ARCTURUS THERAPEUTICS, INC., a Delaware corporation (“Tenant”). Building: 10628 Science Center Drive, San Diego, California Premises: That portion of the Project, containing approximately 24,705 rentable square feet, as determined by Landlord, as shownon Exhibit A. Project: The real property on which the Building in which the Premises are located, together with all improvements thereon andappurtenances thereto as described on Exhibit B. Base Rent: $4.07 per rentable square foot of the Premises per month, subject to adjustment pursuant to Section 4 hereof. Rentable Area of Premises: 24,705 sq. ft.Rentable Area of Building: 90,469 sq. ft.Rentable Area of Project: 294,992 sq. ft.Tenant’s Share of Operating Expenses of Building: 27.31%Building’s Share of Project: 30.67%Security Deposit: $96,349.50Rent Adjustment Percentage: 3%Target Commencement Date: March 19, 2018 Base Term: Beginning on the Commencement Date and ending 84 months from the first day of the first full month after theCommencement Date (as defined in Section 2) hereof. For clarity, if the Commencement Date occurs on the first day ofa month, the Base Term shall be measured from that date. If the Commencement Date occurs on a day other than thefirst day of a month, the Base Term shall be measured from the first day of the following month. Permitted Use: Research and development laboratory, related office and other related uses consistent with the character of the Projectand otherwise in compliance with the provisions of Section 7 hereof. Address for Rent Payment: Landlord’s Notice Address:Alexandria Real Estate Equities, Inc. 385 E. Colorado Boulevard, Suite 299Dept. LA 23447 Pasadena, CA 91101Pasadena, CA 91185-3447 Attention: Corporate Secretary Tenant’s Notice Address:10628 Science Center DriveSan Diego, California 92121Attention: Lease AdministratorThe following Exhibits and Addenda are attached hereto and incorporated herein by this reference: Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 2 [X] EXHIBIT A - PREMISES DESCRIPTION[X] EXHIBIT B - DESCRIPTION OF PROJECT[X] EXHIBIT C - WORK LETTER[X] EXHIBIT D - COMMENCEMENT DATE[X] EXHIBIT E - RULES AND REGULATIONS[X] EXHIBIT F - TENANT’S PERSONAL PROPERTY[X] EXHIBIT G - LANDLORD’S FURNITURE[X] EXHIBIT H - TENANT MAINTENANCE OBLIGATIONS1.Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord hereby leases the Premises toTenant and Tenant hereby leases the Premises from Landlord. The portions of the Project which are for the non-exclusive use of tenants of theProject are collectively referred to herein as the “Common Areas.” Landlord reserves the right to modify Common Areas, provided that suchmodifications do not materially adversely affect Tenant’s use of the Premises for the Permitted Use. From and after the Commencement Datethrough the expiration of the Term, Tenant shall have access to the Building and the Premises 24 hours a day, 7 days a week, 365 days per year,except in the case of emergencies, as the result of Legal Requirements, the performance by Landlord of any installation, maintenance or repairs,or any other temporary interruptions, and otherwise subject to the terms of this Lease.2.Delivery; Acceptance of Premises; Commencement Date. Landlord shall use reasonable efforts to deliver the Premises toTenant on or before the Target Commencement Date, with Landlord’s Work Substantially Completed (“Delivery” or “Deliver”). If Landlord fails totimely Deliver the Premises, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and this Lease shall not be void orvoidable except as provided herein. If Landlord does not Deliver the Premises within 90 days of the Target Commencement Date for any reasonother than Force Majeure delays and Tenant Delays, this Lease may be terminated by Tenant by written notice to the Landlord, and if soterminated by Tenant: (a) the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitledunder the provisions of this Lease), shall be returned to Tenant, and (b) neither Landlord nor Tenant shall have any further rights, duties orobligations under this Lease, except with respect to provisions which expressly survive termination of this Lease. As used herein, the terms“Landlord’s Work,” “Tenant Delays” and “Substantially Completed” shall have the meanings set forth for such terms in the Work Letter. IfTenant does not elect to terminate this Lease within 10 business days of the lapse of such 90 day period, such right to void this Lease shall bewaived and this Lease shall remain in full force and effect.The “Commencement Date” shall be the earlier of: (i) the date Landlord Delivers the Premises to Tenant; or (ii) the date Landlord couldhave Delivered the Premises but for Tenant Delays. Upon request of Landlord, Tenant shall execute and deliver a written acknowledgment of theCommencement Date and the expiration date of the Term when such are established in the form of the “Acknowledgement of CommencementDate” attached to this Lease as Exhibit D; provided, however, Tenant’s failure to execute and deliver such acknowledgment shall neither affectLandlord’s rights hereunder nor constitute a default under this Lease by Tenant. The “Term” of this Lease shall be the Base Term, as definedabove on the first page of this Lease and the Extension Term which Tenant may elect pursuant to Section 40 hereof.Subject to the provisions of Section 6 of the Work Letter, Landlord shall permit Tenant access to the Premises for a period of 30 daysprior to the Commencement Date for Tenant’s installation and setup of cabling, furniture, fixtures and equipment (“FF&E Installation”), providedthat such FF&E Installation is coordinated with Landlord, and Tenant complies with the Lease and all other reasonable restrictions and conditionsLandlord may impose. All such access shall be during normal business hours. Any access to the Premises by Tenant before theCommencement Date shall be subject to all of the terms and conditions of this Lease, excluding the obligation to pay Base Rent or OperatingExpenses. During the Term, Tenant shall have the right to use the furniture, fixtures and equipment belonging to Landlord described on Exhibit Gattached to this Lease and located within the Premises on the Commencement Date ("Landlord's Furniture"). Notwithstanding the foregoing,Landlord and Tenant agree that Exhibit G may be amended prior to the Commencement Date if Landlord agrees, in its sole and absolutediscretion to provide any additional furniture, fixtures or equipment for Tenant’s use in the Premises or if Tenant elects, in its sole and absolutediscretion, not to use any of the items listed on Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 3 Exhibit G as of the date of this Lease. Tenant shall have no right to remove any of Landlord's Furniture from the Premises without Landlord’s priorwritten consent and Landlord’s Furniture shall be returned to Landlord at the expiration or earlier termination of the Term in substantially the samecondition as received by Tenant, except for ordinary wear and tear and casualty. Landlord represents to Tenant that Landlord owns the Landlord’sFurniture reflected on Exhibit G as of date of this Lease free and clear of any third party liens or claims.Except as set forth in the Work Letter: (i) Tenant shall accept the Premises and Landlord’s Furniture in their condition as of theCommencement Date, subject to applicable Legal Requirements (as defined in Section 7 hereof); (ii) Landlord shall have no obligation for anydefects in the Premises or Landlord’s Furniture; and (iii) Tenant’s taking possession of the Premises and Landlord’s Furniture shall be conclusiveevidence that Tenant accepts the Premises and Landlord’s Furniture and that the Premises and Landlord’s Furniture, respectively, were in goodcondition at the time possession was taken. Notwithstanding anything to the contrary contained herein, nothing in this paragraph shall limitLandlord’s maintenance obligations under Section 13.Except as otherwise expressly set forth in this Lease, Tenant agrees and acknowledges that neither Landlord nor any agent of Landlordhas made any representation or warranty with respect to the condition of all or any portion of the Premises or the Project, and/or the suitability ofthe Premises or the Project for the conduct of Tenant’s business, and Tenant waives any implied warranty that the Premises or the Project aresuitable for the Permitted Use. This Lease constitutes the complete agreement of Landlord and Tenant with respect to the subject matter hereofand supersedes any and all prior representations, inducements, promises, agreements, understandings and negotiations which are not containedherein. Landlord in executing this Lease does so in reliance upon Tenant’s representations, warranties, acknowledgments and agreementscontained herein.3.Rent.(a)Base Rent. The first month’s Base Rent shall be due and payable on the Commencment Date. The Security Deposit shallbe due on the date that is 10 business days after the mutual execution and delivery of this Lease by the parties. Tenant shall pay to Landlord inadvance, without demand, abatement, deduction or set-off, monthly installments of Base Rent on or before the first day of each calendar monthduring the Term hereof, in lawful money of the United States of America, at the office of Landlord for payment of Rent set forth above, or to suchother person or at such other place as Landlord may from time to time designate in writing. Payments of Base Rent for any fractional calendarmonth shall be prorated. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations of Landlord under this Leaseare independent obligations. Tenant shall have no right at any time to abate, reduce, or set-off any Rent (as defined in Section 5) due hereunderexcept for any abatement as may be expressly provided in this Lease.Notwithstanding anything to the contrary contained herein, so long as no Default (as defined in Section 20 below) has occurred and isoutstanding under this Lease, Tenant shall not be required to pay Base Rent for the period commencing on the first day of the 2nd month after theCommencement Date through the last day of the 6th month after the Commencement Date (the “Abatement Period”). Tenant shall commencepaying full Base Rent on the first day of the 7th month after the Commencement Date. Tenant shall be required to pay Operating Expenses andany and all other amounts payable under this Lease through the Abatement Period.(b)Additional Rent. In addition to Base Rent, Tenant agrees to pay to Landlord as additional rent (“Additional Rent”): (i)commencing on the Commencement Date, Tenant’s Share of “Operating Expenses” (as defined in Section 5), and (ii) any and all other amountsTenant assumes or agrees to pay under the provisions of this Lease, including, without limitation, any and all other sums that may become due byreason of any default of Tenant or failure to comply with the agreements, terms, covenants and conditions of this Lease to be performed byTenant, after any applicable notice and cure period. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 4 4.Base Rent Adjustments. (a)Annual Adjustments. Base Rent shall be increased on each annual anniversary of the Commencement Date during theBase Term (each an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by the Rent AdjustmentPercentage and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date. Base Rent, as so adjusted,shall thereafter be due as provided herein. Base Rent adjustments for any fractional calendar month shall be prorated. (b)Excess TI Costs Allowance. Landlord shall, subject to the terms of the Work Letter, make available to Tenant the ExcessTI Costs Allowance (as defined in the Work Letter). Commencing on the Commencement Date and continuing thereafter on the first day of eachmonth during the Base Term, Tenant shall pay the amount necessary to fully amortize the portion of the Excess TI Costs Allowance actuallyfunded by Landlord, if any, in equal monthly payments with interest at a rate of 8% per annum over the Base Term, which interest shall begin toaccrue on the date that Landlord first disburses such Excess TI Costs Allowance or any portion(s) thereof. Any of the Excess TI Costs Allowanceand applicable interest remaining unpaid as of the expiration or earlier termination of this Lease shall be paid to Landlord, except as otherwiseprovided in Section 41, in a lump sum at the expiration or earlier termination of this Lease.5.Operating Expense Payments. Landlord shall deliver to Tenant a written estimate of Operating Expenses for each calendaryear during the Term (the “Annual Estimate”), which may be revised by Landlord from time to time (but not more than twice) during such calendaryear. Commencing on the Commencement Date and continuing thereafter on the first day of each month during the Term, Tenant shall payLandlord an amount equal to 1/12th of Tenant’s Share of the Annual Estimate. Payments for any fractional calendar month shall be prorated.The term “Operating Expenses” means all costs and expenses of any kind or description whatsoever incurred or accrued eachcalendar year by Landlord with respect to the Building (including the Building’s Share of all costs and expenses of any kind or description incurredor accrued by Landlord with respect to the Project which are not specific to the Building or any other building located in the Project) (including,without duplication, Taxes (as defined in Section 9), capital repairs and improvements amortized over the useful life of such capital items (asreasonably determined by Landlord taking into account all relevant factors), the cost (including, without limitation, any subsidies which Landlordmay provide in connection with the Amenities) of the common area amenities (the “Amenities”) now or hereafter located at the Project whichAmenities may include, without limitation, the Common Area fitness center, cafe, conference center, bocce ball court, barbeque pits and pingpong, and the costs of Landlord’s third party property manager or, if there is no third party property manager, administration rent in the amount of3% of Base Rent (provided that during the Abatement Period, Tenant shall nonetheless be required to pay administration rent each month equal tothe amount of the administration rent that Tenant would have been required to pay in the absence of there being an Abatement Period)), excludingonly:(a)the original design and/or construction costs of the Project and renovation prior to the date of the Lease and costs ofcorrecting defects in such original construction or renovation;(b)capital expenditures for expansion of the Project;(c)interest, principal payments of Mortgage (as defined in Section 27) debts of Landlord, financing costs and amortization offunds borrowed by Landlord, whether secured or unsecured;(d)depreciation of the Project (except for capital improvements, the properly amortized portion of such cost of which isincludable in Operating Expenses); Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 5 (e)advertising, legal and space planning expenses and leasing commissions and other costs and expenses incurred inprocuring and leasing space to tenants for the Project, including any leasing office maintained in the Project, free rent, construction allowancesand signage costs for tenants;(f)legal and other expenses incurred in the negotiation or enforcement of leases;(g)completing, fixturing, improving, renovating, painting, redecorating or other work, which Landlord pays for or performs forother tenants within their premises, and costs of correcting defects in such work;(h)costs to be reimbursed by other tenants of the Project or Taxes to be paid directly by Tenant or other tenants of the Project,whether or not actually paid;(i)salaries, wages, benefits and other compensation paid to officers and employees of Landlord who are not assigned in wholeor in part to the operation, management, maintenance or repair of the Project;(j)general organizational, administrative and overhead costs relating to maintaining Landlord’s existence, either as acorporation, partnership, or other entity, including general corporate, legal and accounting expenses;(k)costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) incurred in connection withdisputes with tenants, other occupants, or prospective tenants, and costs and expenses, including legal fees, incurred in connection withnegotiations or disputes with employees, consultants, management agents, leasing agents, purchasers or mortgagees of the Building;(l)costs (including attorney’s fees and costs of settlement, judgments and payments in lieu thereof) incurred by Landlord due tothe violation by Landlord, its employees, agents or contractors or any tenant of the terms and conditions of any lease of space in the Project orany Legal Requirement (as defined in Section 7);(m)penalties, fines or interest incurred as a result of Landlord’s inability or failure to make payment of Taxes and/or to file anytax or informational returns when due, or from Landlord’s failure to make any payment of Taxes required to be made by Landlord hereunder beforedelinquency;(n)overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or tothe Project to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis;(o)costs of Landlord’s charitable or political contributions, or of fine art maintained at the Project;(p)costs in connection with services (including electricity), items or other benefits of a type which are not standard for theProject and which are not available to Tenant without specific charges therefor, but which are provided to another tenant or occupant of theProject, whether or not such other tenant or occupant is specifically charged therefor by Landlord;(q)costs incurred in the sale or refinancing of the Project;(r)net income taxes of Landlord or the owner of any interest in the Project, franchise, capital stock, gift, estate or inheritancetaxes or any federal, state or local documentary taxes imposed against the Project or any portion thereof or interest therein;(s)any costs incurred to remove, study, test or remediate Hazardous Materials in or about the Premises, the Building or theProject for which Tenant is not responsible under Section 30 hereof; Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 6 (t)any expenses otherwise includable as Operating Expenses to the extent actually reimbursed by insurance (or, if Landlordfails to maintain the insurance required to be carried by Landlord pursuant to Section 17, would have been reimbursed by insurance required to becarried by Landlord pursuant to Section 17); and(u)any expenses otherwise includable within Operating Expenses to the extent actually reimbursed by persons other thantenants of the Project under leases for space in the Project.Within 90 days after the end of each calendar year (or such longer period as may be reasonably required), Landlord shall furnish toTenant a statement (an “Annual Statement”) showing in reasonable detail: (a) the total and Tenant’s Share of actual Operating Expenses for theprevious calendar year, and (b) the total of Tenant’s payments in respect of Operating Expenses for such year. If Tenant’s Share of actualOperating Expenses for such year exceeds Tenant’s payments of Operating Expenses for such year, the excess shall be due and payable byTenant as Rent within 30 days after delivery of such Annual Statement to Tenant. If Tenant’s payments of Operating Expenses for such yearexceed Tenant’s Share of actual Operating Expenses for such year Landlord shall pay the excess to Tenant within 30 days after delivery of suchAnnual Statement, except that after the expiration, or earlier termination of the Term or if Tenant is delinquent in its obligation to pay Rent,Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. Landlord’s and Tenant’s obligations to pay anyoverpayments or deficiencies due pursuant to this paragraph shall survive the expiration or earlier termination of this Lease.The Annual Statement shall be final and binding upon Tenant unless Tenant, within 60 days after Tenant’s receipt thereof, shall contestany item therein by giving written notice to Landlord, specifying each item contested and the reason therefor. If, during such 60 day period, Tenantreasonably and in good faith questions or contests the accuracy of Landlord’s statement of Tenant’s Share of Operating Expenses, Landlord willprovide Tenant with access to Landlord’s books and records relating to the operation of the Project and such information as Landlord reasonablydetermines to be responsive to Tenant’s questions (the “Expense Information”). If after Tenant’s review of such Expense Information, Landlordand Tenant cannot agree upon the amount of Tenant’s Share of Operating Expenses, then Tenant shall have the right to have an independentpublic accounting firm selected by Tenant from among the 4 largest in the United States, working pursuant to a fee arrangement other than acontingent fee (at Tenant’s sole cost and expense) and approved by Landlord (which approval shall not be unreasonably withheld or delayed), auditand/or review the Expense Information for the year in question (the “Independent Review”). The results of any such Independent Review shall bebinding on Landlord and Tenant. If the Independent Review shows that the payments actually made by Tenant with respect to OperatingExpenses for the calendar year in question exceeded Tenant’s Share of Operating Expenses for such calendar year, Landlord shall at Landlord’soption either (i) credit the excess amount to the next succeeding installments of estimated Operating Expenses or (ii) pay the excess to Tenantwithin 30 days after delivery of such statement, except that after the expiration or earlier termination of this Lease or if Tenant is delinquent in itsobligation to pay Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord. If the Independent Review showsthat Tenant’s payments with respect to Operating Expenses for such calendar year were less than Tenant’s Share of Operating Expenses for thecalendar year, Tenant shall pay the deficiency to Landlord within 30 days after delivery of such statement. If the Independent Review shows thatTenant has overpaid with respect to Operating Expenses by more than 5% then Landlord shall reimburse Tenant for all costs incurred by Tenantfor the Independent Review. Operating Expenses for the calendar years in which Tenant’s obligation to share therein begins and ends shall beprorated. Notwithstanding anything set forth herein to the contrary, if the Building is not at least 95% occupied on average during any year of theTerm, Tenant’s Share of Operating Expenses for such year shall be computed as though the Building had been 95% occupied on average duringsuch year.“Tenant’s Share” shall be the percentage set forth on the first page of this Lease as Tenant’s Share as reasonably adjusted byLandlord for changes in the physical size of the Premises or the Project occurring thereafter. Landlord may equitably increase Tenant’s Share forany item of expense or cost reimbursable by Tenant that relates to a repair, replacement, or service that benefits only the Premises or Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 7 only a portion of the Project that includes the Premises or that varies with occupancy or use. Base Rent, Tenant’s Share of Operating Expensesand all other amounts payable by Tenant to Landlord hereunder are collectively referred to herein as “Rent.”6.Security Deposit. Tenant shall deposit with Landlord, within 10 business days after the mutual execution and delivery ofthis Lease by the parties, a security deposit (the “Security Deposit”) for the performance of all of Tenant’s obligations hereunder in the amount setforth on page 1 of this Lease, which Security Deposit shall be in the form of an unconditional and irrevocable letter of credit (the “Letter ofCredit”): (i) in form and substance reasonably satisfactory to Landlord, (ii) naming Landlord as beneficiary, (iii) expressly allowing Landlord to drawupon it at any time from time to time by delivering to the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by Silvergate Bank oranother FDIC-insured financial institution reasonably satisfactory to Landlord, and (v) redeemable by presentation of a sight draft in the state ofLandlord’s choice. If Tenant does not provide Landlord with a substitute Letter of Credit complying with all of the requirements hereof at least 10days before the stated expiration date of any then current Letter of Credit, Landlord shall have the right to draw the full amount of the current Letterof Credit and hold the funds drawn in cash without obligation for interest thereon as the Security Deposit. The Security Deposit shall be held byLandlord as security for the performance of Tenant’s obligations under this Lease. The Security Deposit is not an advance rental deposit or ameasure of Landlord’s damages in case of Tenant’s default. Upon each occurrence of a Default (as defined in Section 20), Landlord may use allor any part of the Security Deposit to pay delinquent payments due under this Lease, future rent damages under California Civil Code Section1951.2, and the cost of any damage, injury, expense or liability caused by such Default, without prejudice to any other remedy provided herein orprovided by law. Landlord’s right to use the Security Deposit under this Section 6 includes the right to use the Security Deposit to pay future rentdamages following the termination of this Lease pursuant to Section 21(c) below. Upon any use of all or any portion of the Security Deposit,Tenant shall pay Landlord within 5 business days of written demand from Landlord the amount that will restore the Security Deposit to the amountset forth on Page 1 of this Lease. Tenant hereby waives the provisions of any law, now or hereafter in force, including, without limitation,California Civil Code Section 1950.7, which provide that Landlord may claim from a security deposit only those sums reasonably necessary toremedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, inaddition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused bythe act or omission of Tenant or any officer, employee, agent or invitee of Tenant. Upon bankruptcy or other debtor-creditor proceedings againstTenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for periods prior to thefiling of such proceedings. If Tenant shall fully perform every provision of this Lease to be performed by Tenant, the Security Deposit, or anybalance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned toTenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within 60 days after the expiration or earlier termination of thisLease.If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a) transfer any Security Deposit then held by Landlordto a person or entity assuming Landlord’s obligations under this Section 6, or (b) return to Tenant any Security Deposit then held by Landlord andremaining after the deductions permitted herein. Upon such transfer to such transferee and the assumption of Landlord’s obligations thereafterarising under this Lease by the transferee, or the return of the Security Deposit to Tenant, Landlord shall have no further obligation with respect tothe Security Deposit, and Tenant’s right to the return of the Security Deposit shall apply solely against Landlord’s transferee. The Security Depositis not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Landlord’s obligation respecting the SecurityDeposit is that of a debtor, not a trustee, and no interest shall accrue thereon. 7.Use. The Premises shall be used solely for the Permitted Use set forth in the basic lease provisions on page 1 of thisLease, and in compliance with all laws, orders, judgments, ordinances, regulations, codes, directives, permits, licenses, covenants andrestrictions now or hereafter applicable to the Premises, and to the use and occupancy thereof, including, without limitation, the Americans With Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 8 Disabilities Act, 42 U.S.C. § 12101, et seq. (together with the regulations promulgated pursuant thereto, “ADA”) (collectively, “LegalRequirements” and each, a “Legal Requirement”). Tenant shall, upon 5 days’ written notice from Landlord, discontinue any use of the Premiseswhich is declared by any Governmental Authority (as defined in Section 9) having jurisdiction to be a violation of a Legal Requirement. Tenant willnot use or permit the Premises to be used for any purpose or in any manner that would void Tenant’s or Landlord’s insurance, increase theinsurance risk, or cause the disallowance of any sprinkler or other credits. Tenant shall not permit any part of the Premises to be used as a “placeof public accommodation”, as defined in the ADA or any similar legal requirement. Tenant shall reimburse Landlord upon 5 business days ofwritten demand from Landlord for any additional premium charged for any such insurance policy by reason of Tenant’s failure to comply with theprovisions of this Section or otherwise caused by Tenant’s use and/or occupancy of the Premises. Tenant will use the Premises in a careful, safeand proper manner and will not commit or permit waste, overload the floor or structure of the Premises, subject the Premises to use that woulddamage the Premises or obstruct or interfere with the rights of Landlord or other tenants or occupants of the Project, including conducting or givingnotice of any auction, liquidation, or going out of business sale on the Premises, or using or allowing the Premises to be used for any unlawfulpurpose. Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or vibrations fromthe Premises from extending into Common Areas, or other space in the Project. Tenant shall not place any machinery or equipment weighing 500pounds or more in or upon the Premises or transport or move such items through the Common Areas of the Project or in the Project elevatorswithout the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Except as may beprovided under the Work Letter, Tenant shall not, without the prior written consent of Landlord, use the Premises in any manner which will requireventilation, air exchange, heating, gas, steam, electricity or water beyond the existing capacity of the Project as proportionately allocated to thePremises based upon Tenant’s Share as usually furnished for the Permitted Use.Landlord shall be responsible for the compliance of the Premises with Legal Requirements as of the Commencement Date. Thereafter,Tenant, at its sole expense, shall make any alterations or modifications to the interior or the exterior of the Premises or the Project that arerequired by Legal Requirements (including, without limitation, compliance of the Premises with the ADA) to the extent related to Tenant’s particularuse or occupancy of the Premises or Tenant’s Alterations. Notwithstanding any other provision herein to the contrary, Tenant shall be responsiblefor any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or judgments, and all reasonableexpenses incurred in investigating or resisting the same (including, without limitation, reasonable attorneys’ fees, charges and disbursements andcosts of suit) (collectively, “Claims”) arising out of or in connection with Legal Requirements related to Tenant’s use or occupancy of the Premisesor Tenant’s Alterations, and Tenant shall indemnify, defend, hold and save Landlord harmless from and against any and all Claims arising out of orin connection with any failure of the Premises to comply with any Legal Requirement related to Tenant’s use or occupancy of the Premises orTenant’s Alterations. 8.Holding Over. If, with Landlord’s express written consent, Tenant retains possession of the Premises after the terminationof the Term, (i) unless otherwise agreed in such written consent, such possession shall be subject to termination by Landlord at any time upon 5days notice, (ii) all of the other terms and provisions of this Lease (including, without limitation, the adjustment of Base Rent pursuant to Section 4hereof) shall remain in full force and effect (excluding any expansion or renewal option or other similar right or option) during such holdover period,(iii) Tenant shall continue to pay Base Rent in the amount payable upon the date of the expiration or earlier termination of this Lease or such otheramount as Landlord may indicate, in Landlord’s sole and absolute discretion, in such written consent, and (iv) all other payments shall continueunder the terms of this Lease. If Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without theexpress written consent of Landlord, (A) Tenant shall become a tenant at sufferance upon the terms of this Lease except that the monthly BaseRent amount shall be equal to 150% of Base Rent in effect during the last 30 days of the Term, and (B) Tenant shall be responsible for alldamages suffered by Landlord resulting from or occasioned by Tenant’s holding over, including consequential damages. No holding over byTenant, whether with or without consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this Section 8shall not be construed as consent for Tenant to retain possession Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 9 of the Premises. Acceptance by Landlord of Rent after the expiration of the Term or earlier termination of this Lease shall not result in a renewalor reinstatement of this Lease.9.Taxes. Landlord shall pay, as part of Operating Expenses, all taxes, levies, fees, assessments and governmental chargesof any kind, existing as of the Commencement Date or thereafter enacted (collectively referred to as “Taxes”), imposed by any federal, state,regional, municipal, local or other governmental authority or agency, including, without limitation, quasi-public agencies (collectively,“Governmental Authority”) during the Term, including, without limitation, all Taxes: (i) imposed on or measured by or based, in whole or in part,on rent payable to (or gross receipts received by) Landlord under this Lease and/or from the rental by Landlord of the Project or any portion thereof,or (ii) based on the square footage, assessed value or other measure or evaluation of any kind of the Premises or the Project, or (iii) assessed orimposed by or on the operation or maintenance of any portion of the Premises or the Project, including parking, or (iv) assessed or imposed by, orat the direction of, or resulting from Legal Requirements, or interpretations thereof, promulgated by any Governmental Authority, or (v) imposed asa license or other fee, charge, tax, or assessment on Landlord’s business or occupation of leasing space in the Project. Landlord may contest byappropriate legal proceedings the amount, validity, or application of any Taxes or liens securing Taxes. Taxes shall not include any net incometaxes imposed on Landlord except to the extent such net income taxes are in substitution for any Taxes payable hereunder. If any such Tax islevied or assessed directly against Tenant, then Tenant shall be responsible for and shall pay the same at such times and in such manner as thetaxing authority shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied or assessed against any personal property or tradefixtures placed by Tenant in the Premises, whether levied or assessed against Landlord or Tenant. If any Taxes on Tenant’s personal property ortrade fixtures are levied against Landlord or Landlord’s property, or if the assessed valuation of the Project is increased by a value attributable toimprovements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as tobecome a part thereof, higher than the base valuation on which Landlord from time-to-time allocates Taxes to all tenants in the Project, Landlordshall have the right, but not the obligation, to pay such Taxes. Landlord’s reasonable determination of any excess assessed valuation shall bebinding and conclusive, absent manifest error. The amount of any such payment by Landlord shall constitute Additional Rent due from Tenant toLandlord within 10 business days after written demand from Landlord.10.Parking. Subject to all matters of record, Force Majeure, a Taking (as defined in Section 19 below) and the exercise byLandlord of its rights hereunder, Tenant shall have the right, to use 62 parking spaces in those areas of the subterranean parking facility and thesurface parking lot serving the Building designated for non-reserved parking, subject in each case to Landlord’s rules and regulations. Five (5) ofthe parking spaces allocated to Tenant pursuant to this Section 10 may be marked by Landlord, at Tenant’s cost, as designated spaces for Tenantand/or Tenant’s guests, which designated spaces shall be located near the main entrance of the Building and otherwise in a location reasonablyacceptable to Landlord and Tenant. Landlord shall not be responsible for enforcing Tenant’s parking rights against any third parties, including othertenants of the Project or for enforcing any such reservation of parking spaces.11.Utilities, Services. Landlord shall provide, subject to the terms of this Section 11, water, electricity, HVAC, light, power,sewer, and other utilities (including gas and fire sprinklers to the extent the Project is plumbed for such services), and, with respect to theCommon Areas, refuse and trash collection and janitorial services (collectively, “Utilities”). Landlord shall pay, as Operating Expenses or subjectto Tenant’s reimbursement obligation, for all Utilities used on the Premises, all maintenance charges for Utilities, and any storm sewer charges orother similar charges for Utilities imposed by any Governmental Authority or Utility provider, and any taxes, penalties, surcharges or similarcharges thereon. Landlord may cause, at Landlord’s expense, any Utilities to be separately metered or charged directly to Tenant by theprovider. Tenant shall pay directly to the Utility provider, prior to delinquency, any separately metered Utilities and services which may befurnished to Tenant or the Premises during the Term. Tenant shall pay, as part of Operating Expenses, its share of all charges for jointly meteredUtilities based upon consumption, as reasonably determined by Landlord. No interruption or failure of Utilities, from any cause whatsoever otherthan Landlord’s willful misconduct, shall result in eviction or constructive eviction Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 10 of Tenant, termination of this Lease or, except as otherwise provided in the immediately following paragraph, the abatement of Rent. Tenantagrees to limit use of water and sewer with respect to Common Areas to normal restroom use. Utilities shall be available to the Premises 24 hoursper day, 7 days per week, except in the case of emergencies, as the result of Legal Requirements, the failure of any Utility provider to providesuch Utilities, the performance by Landlord or any Utility provider of any installation, maintenance or repairs, or any other temporaryinterruptions. Tenant shall be responsible for obtaining (from vendors reasonably acceptable to Landlord) and paying for its own janitorial servicesfor the Premises.Notwithstanding anything to the contrary set forth herein, if (i) a stoppage of an Essential Service (as defined below) to the Premisesshall occur and such stoppage is due solely to the gross negligence or willful misconduct of Landlord and not due in any part to any act oromission on the part of Tenant or any Tenant Party or any matter beyond Landlord’s reasonable control (any such stoppage of an EssentialService being hereinafter referred to as a “Service Interruption”), and (ii) such Service Interruption continues for more than 5 consecutive daysafter Landlord shall have received written notice thereof from Tenant, and (iii) as a result of such Service Interruption, the conduct of Tenant’snormal operations in the Premises are materially and adversely affected, then, there shall be an abatement of one day’s Base Rent for each dayduring which such Service Interruption continues after such 5 day period; provided, however, that if any part of the Premises is reasonably useablefor Tenant’s normal business operations or if Tenant conducts all or any part of its operations in any portion of the Premises notwithstanding suchService Interruption, then the amount of each daily abatement of Base Rent shall only be proportionate to the nature and extent of the interruptionof Tenant’s normal operations or ability to use the Premises. The rights granted to Tenant under this paragraph shall be Tenant’s sole andexclusive remedy resulting from a failure of Landlord to provide services, and Landlord shall not otherwise be liable for any loss or damagesuffered or sustained by Tenant resulting from any failure or cessation of services. For purposes hereof, the term “Essential Services” shallmean the following services: HVAC service, water, sewer and electricity, but in each case only to the extent that Landlord has an obligation toprovide same to Tenant under this Lease. The provisions of this paragraph shall only apply as long as the original Tenant is the tenant occupyingthe Premises under this Lease and shall not apply to any assignee or sublessee.Landlord’s sole obligation for either providing emergency generators or providing emergency back-up power to Tenant shall be: (i) toprovide emergency generators with not less than the capacity of the emergency generators serving the Building as of the Commencement Date,and (ii) to contract with a third party to maintain the emergency generators as per the manufacturer’s standard maintenance guidelines. Landlordshall have no obligation to provide Tenant with operational emergency generators or back-up power or to supervise, oversee or confirm that thethird party maintaining the emergency generators is maintaining the generators as per the manufacturer’s standard guidelines or otherwise. Duringany period of replacement, repair or maintenance of the emergency generators when the emergency generators are not operational, including anydelays thereto due to the inability to obtain parts or replacement equipment, Landlord shall have no obligation to provide Tenant with an alternativeback-up generator or generators or alternative sources of back-up power. Tenant expressly acknowledges and agrees that Landlord does notguaranty that such emergency generators will be operational at all times or that emergency power will be available to the Premises when needed. 12.Alterations and Tenant’s Property. Any alterations, additions, or improvements made to the Premises by or on behalf ofTenant, including additional locks or bolts of any kind or nature upon any doors or windows in the Premises, but excluding installation, removal orrealignment of furniture systems (other than removal of furniture systems owned or paid for by Landlord) not involving any modifications to thestructure or connections (other than by ordinary plugs or jacks) to Building Systems (as defined in Section 13) (“Alterations”) shall be subject toLandlord’s prior written consent, which may be given or withheld in Landlord’s sole discretion if any such Alteration affects the structure or BuildingSystems and shall not be otherwise unreasonably withheld, conditioned or delayed. Tenant may construct nonstructural, cosmetic Alterations inthe Premises without Landlord’s prior approval if the aggregate cost of all such work in any 12 month period does not exceed $25,000 (a “Notice-Only Alteration”), provided Tenant notifies Landlord in writing of such intended Notice-Only Alteration, and such notice shall be accompanied byplans, specifications, work contracts and such other information concerning the Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 11 nature and cost of the Notice-Only Alteration as may be reasonably requested by Landlord, which notice and accompanying materials shall bedelivered to Landlord not less than 15 business days in advance of any proposed construction. If Landlord approves any Alterations, Landlordmay impose such conditions on Tenant in connection with the commencement, performance and completion of such Alterations as Landlord maydeem appropriate in Landlord’s reasonable discretion. Any request for approval shall be in writing, delivered not less than 15 business days inadvance of any proposed construction, and accompanied by plans, specifications, bid proposals, work contracts and such other informationconcerning the nature and cost of the alterations as may be reasonably requested by Landlord, including the identities and mailing addresses of allcontractors and first tier subcontractors performing work or supplying materials. Landlord’s right to review plans and specifications and to monitorconstruction shall be solely for its own benefit, and Landlord shall have no duty to ensure that such plans and specifications or constructioncomply with applicable Legal Requirements. Tenant shall cause, at its sole cost and expense, all Alterations to comply with insurancerequirements and with Legal Requirements and shall implement at its sole cost and expense any alteration or modification required by LegalRequirements as a result of any Alterations. Tenant shall pay to Landlord, as Additional Rent, on demand an amount equal to 3% of all chargesincurred by Tenant or its contractors or agents in connection with any Alteration to cover Landlord’s overhead and expenses for plan review,coordination, scheduling and supervision; provided, however, that no fee shall be charged by Landlord in connection with a Notice-Only Alterationand/or if Landlord’s involvement is limited to the review and approval of Tenant’s plans. Before Tenant begins any Alteration, Landlord may poston and about the Premises notices of non-responsibility pursuant to applicable law. Tenant shall reimburse Landlord for, and indemnify and holdLandlord harmless from, any expense incurred by Landlord by reason of faulty work done by Tenant or its contractors, delays caused by suchwork, or inadequate cleanup. Tenant shall furnish security or make other arrangements reasonably satisfactory to Landlord to assure payment for the completion ofall Alterations work free and clear of liens, and shall provide (and cause each contractor or subcontractor to provide) certificates of insurance forworkers’ compensation and other coverage in amounts and from an insurance company satisfactory to Landlord, in its reasonable discretion,protecting Landlord against liability for personal injury or property damage during construction. Upon completion of any Alterations, Tenant shalldeliver to Landlord: (i) sworn statements setting forth the names of all contractors and subcontractors who did the work and final lien waivers fromall such contractors and subcontractors; and (ii) “as built” plans for any such Alteration, if the nature of such Alteration required such plans.Except for Removable Installations (as hereinafter defined), all Installations (as hereinafter defined) shall be and shall remain theproperty of Landlord during the Term and following the expiration or earlier termination of the Term, shall not be removed by Tenant at any timeduring the Term, and shall remain upon and be surrendered with the Premises as a part thereof. Notwithstanding the foregoing, Landlord shall, ifrequested in writing by Tenant at the time Landlord’s approval of any such Installation is requested, or at the time it receives notice of a Notice-Only Alteration, notify Tenant whether Landlord requires that Tenant remove such Installation upon the expiration or earlier termination of the Term,in which event Tenant shall remove such Installation in accordance with the immediately succeeding sentence. Upon the expiration or earliertermination of the Term, Tenant shall remove (i) all wires, cables or similar equipment which Tenant has installed in the Premises or in the risers orplenums of the Building, (ii) any Installations for which Landlord has given Tenant notice of removal in accordance with the immediately precedingsentence, and (iii) all of Tenant’s Property (as hereinafter defined), and Tenant shall restore and repair any damage caused by or occasioned as aresult of such removal, including, without limitation, capping off all such connections behind the walls of the Premises and repairing anyholes. During any restoration period beyond the expiration or earlier termination of the Term, Tenant shall pay Rent to Landlord as provided hereinas if said space were otherwise occupied by Tenant. For purposes of this Lease, (x) “Removable Installations” means any items listed on Exhibit F attached hereto and any items agreedby Landlord in writing to be included on Exhibit F in the future, (y) ”Tenant’s Property” means Removable Installations and, other thanInstallations, any personal property or equipment of Tenant that may be removed without material damage to the Premises, and (z) ”Installations”means all property of any kind paid for as part of TI Costs or Excess TI Costs, all Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 12 Alterations, all fixtures, and all partitions, hardware, built-in machinery, built-in casework and cabinets and other similar additions, equipment,property and improvements built into the Premises so as to become an integral part of the Premises, including, without limitation, fume hoodswhich penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms, walk-in warm rooms, deionized watersystems, glass washing equipment, autoclaves, chillers, built-in plumbing, electrical and mechanical equipment and systems, and any powergenerator and transfer switch.13.Landlord’s Repairs. Landlord, as an Operating Expense, shall (except to the extent expressly excluded from OperatingExpenses pursuant to Section 5) maintain all of the structural, exterior, parking and other Common Areas of the Project, and all Building systemsserving the Premises and other portions of the Project including HVAC, electrical, mechanical, plumbing, elevators and life safety systemsincluding fire sprinklers (collectively, “Building Systems”), in good repair, reasonable wear and tear and uninsured losses and damages caused byTenant, or by any of Tenant’s agents, servants, employees, invitees and contractors (collectively, “Tenant Parties”) excluded. Losses anddamages caused by Tenant or any Tenant Party shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost andexpense. Landlord reserves the right to stop Building Systems services when necessary (i) by reason of accident or emergency, or (ii) for plannedrepairs, alterations or improvements, which are, in the reasonable judgment of Landlord, desirable or necessary to be made, until said repairs,alterations or improvements shall have been completed. Landlord shall have no responsibility or liability for failure to supply Building Systemsservices during any such period of interruption; provided, however, that Landlord shall, except in case of emergency, give Tenant 24 hoursadvance notice of any planned stoppage of Building Systems services for routine maintenance, repairs, alterations or improvements. Tenant shallpromptly give Landlord written notice of any repair of which Tenant becomes aware required by Landlord pursuant to this Section, after whichLandlord shall make a commercially reasonable effort to effect such repair within a reasonable period. Landlord shall not be liable for any failure tomake any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after Tenant’s written notice of the needfor such repairs or maintenance. Tenant waives its rights under any state or local law to terminate this Lease or to make such repairs atLandlord’s expense and agrees that the parties’ respective rights with respect to such matters shall be solely as set forth herein. Repairs requiredas the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Section 18.Notwithstanding anything to the contrary contained in this Lease, as of the Commencement Date, the maintenance and repairobligations for the Premises shall be allocated between Landlord and Tenant as set forth on Exhibit H attached hereto. The maintenanceobligations allocated to Tenant pursuant to Exhibit H (the “Tenant Maintenance Obligations”) shall be performed by Tenant at Tenant’s sole costand expense. The Tenant Maintenance Obligations shall include the procurement and maintenance of contracts, in form and substancereasonably satisfactory to Landlord, with copies to Landlord upon Landlord’s written request, for and with contractors reasonably acceptable toLandlord specializing and experienced in the respective Tenant Maintenance Obligations. Notwithstanding anything to the contrary containedherein, the scope of work of any such contracts entered into by Tenant pursuant to this paragraph shall, at a minimum, comply with manufacturer’srecommended maintenance procedures for the optimal performance of the applicable equipment. Landlord shall, notwithstanding anything to thecontrary contained in this Lease, have no obligation to perform any Tenant Maintenance Obligations. The Tenant Maintenance Obligations shallnot include the right or obligation on the part of Tenant to make any structural and/or capital repairs or improvements to the Premises, andLandlord shall, during any period that Tenant is responsible for the Tenant Maintenance Obligations, continue, as part of Operating Expenses, tobe responsible, as provided in the immediately preceding paragraph, for capital repairs and replacements required to be made to the Project. IfTenant fails to maintain any portion of the Premises for which Tenant is responsible as part of the Tenant Maintenance Obligations in a mannerreasonably acceptable to Landlord within the requirements of this Lease, Landlord shall have the right, but not the obligation, to provide Tenantwith written notice thereof and to assume the Tenant Maintenance Obligations if Tenant does not cure Tenant’s failure within 15 days after receiptof such notice.14.Tenant’s Repairs. Subject to Section 13 hereof, Tenant, at its expense, shall repair, replace and maintain in goodcondition all interior portions of the Premises, including, without limitation, Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 13 entries, doors, ceilings, interior windows, interior walls, and the interior side of demising walls. Should Tenant fail to make any such repair orreplacement or fail to maintain the interior of the Premises, Landlord shall give Tenant written notice of such failure. If Tenant fails to commencecure of such failure within 10 days of Landlord’s notice, and thereafter diligently prosecute such cure to completion, Landlord may perform suchwork and shall be reimbursed by Tenant within 10 days after demand therefor; provided, however, that if such failure by Tenant creates or couldcreate an emergency, Landlord may immediately commence cure of such failure and shall thereafter be entitled to recover the costs of such curefrom Tenant. Subject to Sections 17 and 18, Tenant shall bear the full uninsured cost of any repair or replacement to any part of the Project thatresults from damage caused by Tenant or any Tenant Party and any repair that benefits only the Premises.15.Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed against the Premises or againstthe Project for work claimed to have been done for, or materials claimed to have been furnished to, Tenant within 15 days after Tenant receivesnotice of the filing thereof, at Tenant’s sole cost and shall otherwise keep the Premises and the Project free from any liens arising out of workperformed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge any lien described herein within the time periodset forth above, Landlord shall have the right, but not the obligation, to pay such claim or post a bond or otherwise provide security to eliminate thelien as a claim against title to the Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If Tenant shall lease orfinance the acquisition of office equipment, furnishings, or other personal property of a removable nature utilized by Tenant in the operation ofTenant’s business, Tenant warrants that any Uniform Commercial Code Financing Statement filed as a matter of public record by any lessor orcreditor of Tenant will upon its face or by exhibit thereto indicate that such Financing Statement is applicable only to removable personal propertyof Tenant located within the Premises. In no event shall the address of the Project be furnished on the statement without qualifying language asto applicability of the lien only to removable personal property, located in an identified suite held by Tenant.16.Indemnification. Tenant hereby indemnifies and agrees to defend, save and hold Landlord, its officers, directors,employees, managers, agents, sub-agents, constituent entities and lease signators (collectively, “Landlord Indemnified Parties”) harmless fromand against any and all Claims for injury or death to persons or damage to property occurring within or about the Premises or the Project arisingdirectly or indirectly out of use or occupancy of the Premises or the Project (including, without limitation, any act, omission or neglect by Tenant orany Tenant’s Parties in or about the Premises or at the Project) or the a breach or default by Tenant in the performance of any of its obligationshereunder, except to the extent caused by the willful misconduct or gross negligence of Landlord Indemnified Parties. Landlord shall not be liableto Tenant for, and Tenant assumes all risk of damage to, personal property (including, without limitation, loss of records kept within thePremises). Tenant further waives any and all Claims for injury to Tenant’s business or loss of income relating to any such damage or destructionof personal property (including, without limitation, any loss of records). Landlord Indemnified Parties shall not be liable for any damages arisingfrom any act, omission or neglect of any tenant in the Project or of any other third party or Tenant Parties.17.Insurance. Landlord shall maintain all risk property and, if applicable, sprinkler damage insurance covering the fullreplacement cost of the Project. Landlord shall further procure and maintain commercial general liability insurance with a single loss limit of notless than $2,000,000 for bodily injury and property damage with respect to the Project. Landlord may, but is not obligated to, maintain such otherinsurance and additional coverages as it may deem necessary, including, but not limited to, flood, environmental hazard and earthquake, loss orfailure of building equipment, errors and omissions, rental loss during the period of repair or rebuilding, workers’ compensation insurance andfidelity bonds for employees employed to perform services and insurance for any improvements installed by Tenant or which are in addition to thestandard improvements customarily furnished by Landlord without regard to whether or not such are made a part of the Project. All such insuranceshall be included as part of the Operating Expenses. The Project may be included in a blanket policy (in which case the cost of such insuranceallocable to the Project will be determined by Landlord based upon the insurer’s cost calculations). Tenant shall also reimburse Landlord for anyincreased premiums or additional insurance which Landlord reasonably deems necessary as a result of Tenant’s use of the Premises. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 14 Tenant, at its sole cost and expense, shall maintain during the Term: all risk property insurance with business interruption and extraexpense coverage, covering the full replacement cost of all property and improvements installed or placed in the Premises by Tenant at Tenant’sexpense; workers’ compensation insurance with no less than the minimum limits required by law; employer’s liability insurance with employersliability limits of $1,000,000 bodily injury by accident – each accident, $1,000,000 bodily injury by disease – policy limit, and $1,000,000 bodilyinjury by disease – each employee; and commercial general liability insurance, with a minimum limit of not less than $2,000,000 per occurrence forbodily injury and property damage with respect to the Premises. The commercial general liability insurance maintained by Tenant shall nameAlexandria Real Estate Equities, Inc., and Landlord, its officers, directors, employees, managers, agents, sub-agents, constituent entities andlease signators (collectively, “Landlord Insured Parties”), as additional insureds; insure on an occurrence and not a claims-made basis; beissued by insurance companies which have a rating of not less than policyholder rating of A and financial category rating of at least Class X in“Best’s Insurance Guide”; shall not be cancelable for nonpayment of premium unless 30 days prior written notice shall have been given to Landlordfrom the insurer; not contain a hostile fire exclusion; contain a contractual liability endorsement; and provide primary coverage to Landlord InsuredParties (any policy issued to Landlord Insured Parties providing duplicate or similar coverage shall be deemed excess over Tenant’s policies,regardless of limits). Copies of such policies (if requested by Landlord), or certificates of insurance showing the limits of coverage requiredhereunder and showing Landlord as an additional insured, along with reasonable evidence of the payment of premiums for the applicable period,shall be delivered to Landlord by Tenant prior to (i) the earlier to occur of (x) the Commencement Date, or (y) the date that Tenant accesses thePremises under this Lease, and (ii) each renewal of said insurance. Tenant’s policy may be a “blanket policy” with an aggregate per locationendorsement which specifically provides that the amount of insurance shall not be prejudiced by other losses covered by the policy. Tenant shall,at least 5 days prior to the expiration of such policies, furnish Landlord with renewal certificates.In each instance where insurance is to name Landlord as an additional insured, Tenant shall upon written request of Landlord alsodesignate and furnish certificates so evidencing Landlord as additional insured to: (i) any lender of Landlord holding a security interest in theProject or any portion thereof, (ii) the landlord under any lease wherein Landlord is tenant of the real property on which the Project is located, if theinterest of Landlord is or shall become that of a tenant under a ground or other underlying lease rather than that of a fee owner, and/or (iii) anymanagement company retained by Landlord to manage the Project.The property insurance obtained by Landlord and Tenant shall include a waiver of subrogation by the insurers and all rights based uponan assignment from its insured, against Landlord or Tenant, and their respective officers, directors, employees, managers, agents, invitees andcontractors (“Related Parties”), in connection with any loss or damage thereby insured against. Neither party nor its respective Related Partiesshall be liable to the other for loss or damage caused by any risk insured against under property insurance required to be maintained hereunder,and each party waives any claims against the other party, and its respective Related Parties, for such loss or damage. The failure of a party toinsure its property shall not void this waiver. Landlord and its respective Related Parties shall not be liable for, and Tenant hereby waives allclaims against such parties for, business interruption and losses occasioned thereby sustained by Tenant or any person claiming through Tenantresulting from any accident or occurrence in or upon the Premises or the Project from any cause whatsoever. If the foregoing waivers shallcontravene any law with respect to exculpatory agreements, the liability of Landlord or Tenant shall be deemed not released but shall be secondaryto the other’s insurer.Landlord may require insurance policy limits to be raised to conform with requirements of Landlord’s lender and/or to bring coveragelimits to levels then being generally required of new tenants within the Project; provided, however, that the increased amount of coverage isconsistent with coverage amounts then being required by institutional owners of similar projects with tenants occupying similar size premises inthe geographical area in which the Project is located.18.Restoration. If, at any time during the Term, the Project or the Premises are damaged or destroyed by a fire or otherinsured casualty, Landlord shall notify Tenant within 60 days after Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 15 discovery of such damage as to the amount of time Landlord reasonably estimates it will take to restore the Project or the Premises, as applicable(the “Restoration Period”). If the Restoration Period is estimated to exceed 12 months (the “Maximum Restoration Period”), Landlord may, insuch notice, elect to terminate this Lease as of the date that is 75 days after the date of discovery of such damage or destruction; provided,however, that notwithstanding Landlord’s election to restore, Tenant may elect to terminate this Lease by written notice to Landlord delivered within5 business days of receipt of a notice from Landlord estimating a Restoration Period for the Premises longer than the Maximum RestorationPeriod. Unless either Landlord or Tenant so elects to terminate this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (withany deductible to be treated as a current Operating Expense), promptly restore the Premises (excluding the improvements installed by Tenant orby Landlord and paid for by Tenant), subject to delays arising from the collection of insurance proceeds, from Force Majeure events or as neededto obtain any license, clearance or other authorization of any kind required to enter into and restore the Premises issued by any GovernmentalAuthority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of HazardousMaterials (as defined in Section 30) in, on or about the Premises (collectively referred to herein as “Hazardous Materials Clearances”); provided,however, that if repair or restoration of the Premises is not substantially complete as of the end of the Maximum Restoration Period or, if longer,the Restoration Period, Landlord may, in its sole and absolute discretion, elect not to proceed with such repair and restoration, or Tenant may bywritten notice to Landlord delivered within 5 business days of the expiration of the Maximum Restoration Period or, if longer, the RestorationPeriod, elect to terminate this Lease, in which event Landlord shall be relieved of its obligation to make such repairs or restoration and this Leaseshall terminate as of the date that is 75 days after the later of: (i) discovery of such damage or destruction, or (ii) the date all required HazardousMaterials Clearances are obtained, but Landlord shall retain any Rent paid and the right to any Rent payable by Tenant prior to such election byLandlord or Tenant.Tenant, at its expense, shall promptly perform, subject to delays arising from the collection of insurance proceeds, from Force Majeure(as defined in Section 34) events or to obtain Hazardous Material Clearances, all repairs or restoration not required to be done byLandlord. Notwithstanding the foregoing, either Landlord or Tenant may terminate this Lease upon written notice to the other if the Premises aredamaged during the last year of the Term and Landlord reasonably estimates that it will take more than 2 months to repair such damage; provided,however, that such notice is delivered within 10 business days after the date that Landlord provides Tenant with written notice of the estimatedRestoration Period. Notwithstanding anything to the contrary contained herein, Landlord shall also have the right to terminate this Lease ifinsurance proceeds are not available for such restoration (for any reason other than Landlord’s failure to maintain the insurance required to bemaintained by Landlord pursuant to Section 17). Rent shall be abated from the date all required Hazardous Material Clearances are obtained untilthe Premises are repaired and restored, in the proportion which the area of the Premises, if any, which is not usable by Tenant bears to the totalarea of the Premises, unless Landlord provides Tenant with other space during the period of repair that is suitable, in Tenant’s reasonablediscretion, for the temporary conduct of Tenant’s business. Such abatement shall be the sole remedy of Tenant, and except as provided in thisSection 18, Tenant waives any right to terminate the Lease by reason of damage or casualty loss.The provisions of this Lease, including this Section 18, constitute an express agreement between Landlord and Tenant with respect toany and all damage to, or destruction of, all or any part of the Premises, or any other portion of the Project, and any statute or regulation which isnow or may hereafter be in effect shall have no application to this Lease or any damage or destruction to all or any part of the Premises or anyother portion of the Project, the parties hereto expressly agreeing that this Section 18 sets forth their entire understanding and agreement withrespect to such matters.19.Condemnation. If the whole or any material part of the Premises or the Project is taken for any public or quasi-public useunder governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking” or “Taken”), andthe Taking would in Landlord’s reasonable judgment, either prevent or materially interfere with Tenant’s use of the Premises or materially interferewith or impair Landlord’s ownership or operation of the Project, then upon written notice by Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 16 Landlord this Lease shall terminate and Rent shall be apportioned as of said date. If part of the Premises shall be Taken, and this Lease is notterminated as provided above, Landlord shall promptly restore the Premises and the Project as nearly as is commercially reasonable under thecircumstances to their condition prior to such partial Taking and the rentable square footage of the Building, the rentable square footage of thePremises, Tenant’s Share of Operating Expenses and the Rent payable hereunder during the unexpired Term shall be reduced to such extent asmay be fair and reasonable under the circumstances. Upon any such Taking, Landlord shall be entitled to receive the entire price or award fromany such Taking without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award. Tenant shallhave the right, to the extent that same shall not diminish Landlord’s award, to make a separate claim against the condemning authority (but notLandlord) for such compensation as may be separately awarded or recoverable by Tenant for moving expenses and damage to Tenant’s tradefixtures, if a separate award for such items is made to Tenant. Tenant hereby waives any and all rights it might otherwise have pursuant to anyprovision of state law to terminate this Lease upon a partial Taking of the Premises or the Project.20.Events of Default. Each of the following events shall be a default (“Default”) by Tenant under this Lease:(a)Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment hereunder when due; provided,however, that Landlord will give Tenant notice and an opportunity to cure any failure to pay Rent within 5 days of any such notice not more thanonce in any 12 month period and Tenant agrees that such notice shall be in lieu of and not in addition to, or shall be deemed to be, any noticerequired by law.(b)Insurance. Any insurance required to be maintained by Tenant pursuant to this Lease shall be canceled or terminated orshall expire or shall be reduced or materially changed, or Landlord shall receive a notice of nonrenewal of any such insurance and Tenant shall failto obtain replacement insurance at least 20 days before the expiration of the current coverage.(c)Abandonment. Tenant shall abandon the Premises. Tenant shall not be deemed to have abandoned the Premises if (i)Tenant provides Landlord with reasonable advance notice prior to vacating and, at the time of vacating the Premises, Tenant completes Tenant’sobligations with respect to the Surrender Plan in compliance with Section 28, (ii) Tenant has made reasonable arrangements with Landlord for thesecurity of the Premises for the balance of the Term, and (iii) Tenant continues during the balance of the Term to satisfy all of its obligations underthe Lease as they come due.(d)Improper Transfer. Tenant shall assign, sublease or otherwise transfer or attempt to transfer all or any portion of Tenant’sinterest in this Lease or the Premises except as expressly permitted herein, or Tenant’s interest in this Lease shall be attached, executed upon, orotherwise judicially seized and such action is not released within 90 days of the action.(e)Liens. Tenant shall fail to discharge or otherwise obtain the release of any lien placed upon the Premises in violation of thisLease within 10 days after any such lien is filed against the Premises.(f)Insolvency Events. Tenant or any guarantor or surety of Tenant’s obligations hereunder shall: (A) make a generalassignment for the benefit of creditors; (B) commence any case, proceeding or other action seeking to have an order for relief entered on its behalfas a debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition ofit or its debts or seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or of any substantial part of its property(collectively a “Proceeding for Relief”); (C) become the subject of any Proceeding for Relief which is not dismissed within 90 days of its filing orentry; or (D) die or suffer a legal disability (if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise fail to maintain its legalexistence (if Tenant, guarantor or surety is a corporation, partnership or other entity). Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 17 (g)Estoppel Certificate or Subordination Agreement. Tenant fails to execute any document required from Tenant underSections 23 or 27 within 5 days after a second notice requesting such document.(h)Other Defaults. Tenant shall fail to comply with any provision of this Lease other than those specifically referred to in thisSection 20, and, except as otherwise expressly provided herein, such failure shall continue for a period of 30 days after written notice thereof fromLandlord to Tenant.Any notice given under Section 20(h) hereof shall: (i) specify the alleged default, (ii) demand that Tenant cure such default, (iii) be in lieu of, andnot in addition to, or shall be deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a forfeiture or atermination of this Lease unless Landlord elects otherwise in such notice; provided that if the nature of Tenant’s default pursuant to Section 20(h)is such that it cannot be cured by the payment of money and reasonably requires more than 30 days to cure, then Tenant shall not be deemed tobe in default if Tenant commences such cure within said 30 day period and thereafter diligently prosecutes the same to completion; provided,however, that such cure shall be completed no later than 45 days from the date of Landlord’s notice.21.Landlord’s Remedies.(a)Payment By Landlord; Interest. Upon a Default by Tenant hereunder, Landlord may, without waiving or releasing anyobligation of Tenant hereunder, make such payment or perform such act. All sums so paid or incurred by Landlord, together with interest thereon,from the date such sums were paid or incurred, at the annual rate equal to 12% per annum or the highest rate permitted by law (the “DefaultRate”), whichever is less, shall be payable to Landlord on demand as Additional Rent. Nothing herein shall be construed to create or impose aduty on Landlord to mitigate any damages resulting from Tenant’s Default hereunder.(b)Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums due will cause Landlord to incur costs notcontemplated by this Lease, the exact amount of which will be extremely difficult and impracticable to ascertain. Such costs include, but are notlimited to, processing and accounting charges and late charges which may be imposed on Landlord under any Mortgage covering thePremises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within 5 days after the date such payment is due,Tenant shall pay to Landlord an additional sum equal to 6% of the overdue Rent as a late charge. Notwithstanding the foregoing, before assessinga late charge the first time in any calendar year, Landlord shall provide Tenant written notice of the delinquency and will waive the right if Tenantpays such delinquency within 5 days thereafter. Notwithstanding the foregoing, before assessing a late charge the first time in any calendar year,Landlord shall provide Tenant written notice of the delinquency and will waive the right if Tenant pays such delinquency within 5 days thereafter.The parties agree that this late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment byTenant. In addition to the late charge, Rent not paid when due shall bear interest at the Default Rate from the 5th day after the date due until paid.(c)Remedies. Upon the occurrence of a Default, Landlord, at its option, without further notice or demand to Tenant, shall havein addition to all other rights and remedies provided in this Lease, at law or in equity, the option to pursue any one or more of the followingremedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.(i)Terminate this Lease, or at Landlord’s option, Tenant’s right to possession only, in which event Tenant shallimmediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedywhich it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenantand any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim ordamages therefor;(ii)Upon any termination of this Lease, whether pursuant to the foregoing Section 21(c)(i) or otherwise, Landlord mayrecover from Tenant the following: Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 18 (A)The worth at the time of award of any unpaid rent which has been earned at the time of suchtermination; plus(B)The worth at the time of award of the amount by which the unpaid rent which would have been earnedafter termination until the time of award exceeds the amount of such rental loss that Tenant proves could have beenreasonably avoided; plus(C)The worth at the time of award of the amount by which the unpaid rent for the balance of the Termafter the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided;plus(D)Any other amount necessary to compensate Landlord for all the detriment proximately caused byTenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to resulttherefrom, specifically including, but not limited to, brokerage commissions and advertising expenses incurred, expenses ofremodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any specialconcessions made to obtain a new tenant; and(E)At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may bepermitted from time to time by applicable law.The term “rent” as used in this Section 21 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant tothe terms of this Lease, whether to Landlord or to others. As used in Sections 21(c)(ii)(A) and (B), above, the “worth at the time of award” shallbe computed by allowing interest at the Default Rate. As used in Section 21(c)(ii)(C) above, the “worth at the time of award” shall be computedby discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.(iii)Landlord may continue this Lease in effect after Tenant’s Default and recover rent as it becomes due (Landlordand Tenant hereby agreeing that Tenant has the right to sublet or assign hereunder, subject only to reasonablelimitations). Accordingly, if Landlord does not elect to terminate this Lease following a Default by Tenant, Landlord may, from time totime, without terminating this Lease, enforce all of its rights and remedies hereunder, including the right to recover all Rent as itbecomes due.(iv)Whether or not Landlord elects to terminate this Lease following a Default by Tenant, Landlord shall have theright to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into byTenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses,concessions or arrangements. Upon Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessionsor arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent orother consideration receivable thereunder.(v)Independent of the exercise of any other remedy of Landlord hereunder or under applicable law, Landlord mayconduct an environmental test of the Premises as generally described in Section 30(d) hereof, at Tenant’s expense.(d)Effect of Exercise. Exercise by Landlord of any remedies hereunder or otherwise available shall not be deemed to be anacceptance of surrender of the Premises and/or a termination of this Lease by Landlord, it being understood that such surrender and/or terminationcan be effected only by the express written agreement of Landlord and Tenant. Any law, usage, or custom to the contrary notwithstanding,Landlord shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure ofLandlord at any time to enforce its rights under this Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 19 Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms,provisions, and covenants of this Lease or as having modified the same and shall not be deemed a waiver of Landlord’s right to enforce one ormore of its rights in connection with any subsequent default. A receipt by Landlord of Rent or other payment with knowledge of the breach of anycovenant hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to havebeen made unless expressed in writing and signed by Landlord. To the greatest extent permitted by law, Tenant waives the service of notice ofLandlord’s intention to re-enter, re-take or otherwise obtain possession of the Premises as provided in any statute, or to institute legal proceedingsto that end, and also waives all right of redemption in case Tenant shall be dispossessed by a judgment or by warrant of any court or judge. Anyreletting of the Premises or any portion thereof shall be on such terms and conditions as Landlord in its sole discretion may determine. Landlordshall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises or collect rent duein respect of such reletting or otherwise to mitigate any damages arising by reason of Tenant’s Default.22.Assignment and Subletting.(a)General Prohibition. Without Landlord’s prior written consent subject to and on the conditions described in this Section 22,Tenant shall not, directly or indirectly, voluntarily or by operation of law, assign this Lease or sublease the Premises or any part thereof ormortgage, pledge, or hypothecate its leasehold interest or grant any concession or license within the Premises, and any attempt to do any of theforegoing shall be void and of no effect. If Tenant is a corporation, partnership or limited liability company, the shares or other ownership intereststhereof which are not actively traded upon a stock exchange or in the over-the-counter market, a transfer or series of transfers whereby 50% ormore of the issued and outstanding shares or other ownership interests of such corporation are, or voting control is, transferred (but exceptingtransfers upon deaths of individual owners) from a person or persons or entity or entities which were owners thereof at time of execution of thisLease to persons or entities who were not owners of shares or other ownership interests of the corporation, partnership or limited liability companyat time of execution of this Lease, shall be deemed an assignment of this Lease requiring the consent of Landlord as provided in this Section 22. (b)Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise transfer this Lease or sublet thePremises other than pursuant to a Permitted Assignment (as defined below), then at least 15 days, but not more than 45 days, before the dateTenant desires the assignment or sublease to be effective (the “Assignment Date”), Tenant shall give Landlord a notice (the “Assignment Notice”) containing such information about the proposed assignee or sublessee, including the proposed use of the Premises and any HazardousMaterials proposed to be used, stored handled, treated, generated in or released or disposed of from the Premises, the Assignment Date, anyrelationship between Tenant and the proposed assignee or sublessee, and all material terms and conditions of the proposed assignment orsublease, including a copy of any proposed assignment or sublease in its final form, and such other information as Landlord may deem reasonablynecessary or appropriate to its consideration whether to grant its consent. Landlord may, by giving written notice to Tenant within 15 businessdays after receipt of the Assignment Notice: (i) grant such consent (provided that Landlord shall further have the right to review and approve ordisapprove the proposed form of sublease prior to the effective date of any such subletting), (ii) refuse such consent, in its reasonable discretion;or (iii) if the proposed sublease or assignment is for the remainder of the Term, terminate this Lease with respect to the space described in theAssignment Notice as of the Assignment Date (an “Assignment Termination”). Among other reasons, it shall be reasonable for Landlord towithhold its consent in any of these instances: (1) the proposed assignee or subtenant is a governmental agency; (2) in Landlord’s reasonablejudgment, the use of the Premises by the proposed assignee or subtenant would entail any alterations that would lessen the value of the leaseholdimprovements in the Premises, or would require increased services by Landlord; (3) in Landlord’s reasonable judgment, the proposed assignee orsubtenant is engaged in areas of scientific research or other business concerns that are controversial; (4) in Landlord’s reasonable judgment, theproposed assignee or subtenant lacks the creditworthiness to support the financial obligations it will incur under the proposed assignment orsublease; (5) in Landlord’s reasonable judgment, the character, reputation, or business of the proposed Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 20 assignee or subtenant is inconsistent with the desired tenant-mix or the quality of other tenancies in the Project or is inconsistent with the type andquality of the nature of the Building; (6) Landlord has received from any prior landlord to the proposed assignee or subtenant a negative reportconcerning such prior landlord’s experience with the proposed assignee or subtenant; (7) Landlord has experienced previous defaults by or is inlitigation with the proposed assignee or subtenant; (8) the use of the Premises by the proposed assignee or subtenant will violate any applicableLegal Requirement; (9) the proposed assignee or subtenant, or any entity that, directly or indirectly, controls, is controlled by, or is under commoncontrol with the proposed assignee or subtenant, is then an occupant of the Project; (10) the proposed assignee or subtenant is an entity withwhom Landlord is negotiating to lease space in the Project; or (11) the assignment or sublease is prohibited by Landlord’s lender. If Landlorddelivers notice of its election to exercise an Assignment Termination, Tenant shall have the right to withdraw such Assignment Notice by writtennotice to Landlord of such election within 5 business days after Landlord’s notice electing to exercise the Assignment Termination. If Tenantwithdraws such Assignment Notice, this Lease shall continue in full force and effect. If Tenant does not withdraw such Assignment Notice, thisLease, and the term and estate herein granted, shall terminate as of the Assignment Date with respect to the space described in such AssignmentNotice. No failure of Landlord to exercise any such option to terminate this Lease, or to deliver a timely notice in response to the AssignmentNotice, shall be deemed to be Landlord’s consent to the proposed assignment, sublease or other transfer. Tenant shall pay to Landlord a feeequal to One Thousand Five Hundred Dollars ($1,500) in connection with its consideration of any Assignment Notice and/or its preparation orreview of any consent documents. Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease or a subletting of any portionof the Premises to any entity controlling, controlled by or under common control with Tenant (a “Control Permitted Assignment”) shall not berequired, provided that Landlord shall have the right to approve the form of any such sublease or assignment, which approval shall not beunreasonably withheld, conditioned or delayed. In addition, Tenant shall have the right to assign this Lease, upon 30 days prior written notice toLandlord but without obtaining Landlord’s prior written consent, to a corporation or other entity which is a successor-in-interest to Tenant, by way ofmerger, consolidation or corporate reorganization, or by the purchase of all or substantially all of the assets or the ownership interests of Tenantprovided that (i) such merger or consolidation, or such acquisition or assumption, as the case may be, is for a good business purpose and notprincipally for the purpose of transferring the Lease, and (ii) the net worth (as determined in accordance with generally accepted accountingprinciples (“GAAP”)) of the assignee is not less than the greater of the net worth (as determined in accordance with GAAP) of Tenant as of (A) theCommencement Date, or (B) as of the date of Tenant’s most current quarterly or annual financial statements, and (iii) such assignee shall agree inwriting to assume all of the terms, covenants and conditions of this Lease (a “Corporate Permitted Assignment”). Control PermittedAssignments and Corporate Permitted Assignments are hereinafter referred to as “Permitted Assignments.”(c)Additional Conditions. As a condition to any such assignment or subletting, whether or not Landlord’s consent is required,Landlord may require:(i)that any assignee or subtenant agree, in writing at the time of such assignment or subletting, that if Landlordgives such party notice that Tenant is in default under this Lease, such party shall thereafter make all payments otherwise due Tenantdirectly to Landlord, which payments will be received by Landlord without any liability except to credit such payment against those dueunder the Lease, and any such third party shall agree to attorn to Landlord or its successors and assigns should this Lease beterminated for any reason; provided, however, in no event shall Landlord or its successors or assigns be obligated to accept suchattornment; and(ii)A list of Hazardous Materials, certified by the proposed assignee or sublessee to be true and correct, which theproposed assignee or sublessee intends to use, store, handle, treat, generate in or release or dispose of from the Premises, togetherwith copies of all documents relating to such use, storage, handling, treatment, generation, release or disposal of Hazardous Materialsby the proposed assignee or subtenant in the Premises or on the Project, prior to the proposed assignment or subletting, including,without limitation: permits; approvals; reports and correspondence; storage and management plans; plans relating to the installation ofany storage tanks to be installed in or under the Project (provided, said installation of tanks shall Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 21 only be permitted after Landlord has given its written consent to do so, which consent may be withheld in Landlord’s sole and absolutediscretion); and all closure plans or any other documents required by any and all federal, state and local Governmental Authorities forany storage tanks installed in, on or under the Project for the closure of any such tanks. Neither Tenant nor any such proposedassignee or subtenant is required, however, to provide Landlord with any portion(s) of the such documents containing information of aproprietary nature which, in and of themselves, do not contain a reference to any Hazardous Materials or hazardous activities.(d)No Release of Tenant, Sharing of Excess Rents. Notwithstanding any assignment or subletting, Tenant and any guarantoror surety of Tenant’s obligations under this Lease shall at all times remain fully and primarily responsible and liable for the payment of Rent and forcompliance with all of Tenant’s other obligations under this Lease. If the Rent due and payable by a sublessee or assignee (or a combination ofthe rental payable under such sublease or assignment plus any bonus or other consideration therefor or incident thereto in any form) exceeds thesum of the rental payable under this Lease, (excluding however, any Rent payable under this Section) and actual and reasonable brokerage fees,legal costs and any design or construction fees directly related to and required pursuant to the terms of any such sublease (“Excess Rent”), thenTenant shall be bound and obligated to pay Landlord as Additional Rent hereunder 50% of such Excess Rent within 10 days following receiptthereof by Tenant. If Tenant shall sublet the Premises or any part thereof, Tenant hereby immediately and irrevocably assigns to Landlord, assecurity for Tenant’s obligations under this Lease, all rent from any such subletting, and Landlord as assignee and as attorney-in-fact for Tenant,or a receiver for Tenant appointed on Landlord’s application, may collect such rent and apply it toward Tenant’s obligations under this Lease;except that, until the occurrence of a Default, Tenant shall have the right to collect such rent.(e)No Waiver. The consent by Landlord to an assignment or subletting shall not relieve Tenant or any assignees of this Leaseor any sublessees of the Premises from obtaining the consent of Landlord to any further assignment or subletting nor shall it release Tenant or anyassignee or sublessee of Tenant from full and primary liability under the Lease. The acceptance of Rent hereunder, or the acceptance ofperformance of any other term, covenant, or condition thereof, from any other person or entity shall not be deemed to be a waiver of any of theprovisions of this Lease or a consent to any subletting, assignment or other transfer of the Premises.(f)Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this Section 22, if (i) the proposed assigneeor sublessee of Tenant has been required by any prior landlord, lender or Governmental Authority to take remedial action in connection withHazardous Materials contaminating a property, where the contamination resulted from such party’s action or use of the property in question, (ii) theproposed assignee or sublessee is subject to an enforcement order issued by any Governmental Authority in connection with the use, storage,handling, treatment, generation, release or disposal of Hazardous Materials (including, without limitation, any order related to the failure to make arequired reporting to any Governmental Authority), or (iii) because of the existence of a pre-existing environmental condition in the vicinity of orunderlying the Project, the risk that Landlord would be targeted as a responsible party in connection with the remediation of such pre-existingenvironmental condition would be materially increased or exacerbated by the proposed use of Hazardous Materials by such proposed assignee orsublessee, Landlord shall have the absolute right to refuse to consent to any assignment or subletting to any such party.23.Estoppel Certificate. Tenant shall, within 10 business days of written notice from Landlord, execute, acknowledge anddeliver a statement in writing in any form reasonably requested by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and infull force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect)and the dates to which the rental and other charges are paid in advance, if any, (ii) acknowledging that there are not any uncured defaults on thepart of Landlord hereunder, or specifying such defaults if any are claimed, and (iii) setting forth such further information with respect to the statusof this Lease or the Premises as may be reasonably requested thereon. Any such statement may be relied upon by any prospective purchaser orencumbrancer of all or any portion of the real property of which the Premises are a part. Tenant’s failure to deliver such statement within 5 daysafter Tenant’s receipt of a Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 22 second written request from Landlord delivered after the expiration of the initial 10 business day period shall, at the option of Landlord, constitute aDefault under this Lease, and, in any event, shall be conclusive upon Tenant that the Lease is in full force and effect and without modificationexcept as may be represented by Landlord in any certificate prepared by Landlord and delivered to Tenant for execution. 24.Quiet Enjoyment. So long as Tenant is not in Default under this Lease, Tenant shall, subject to the terms of this Lease, atall times during the Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord.25.Prorations. All prorations required or permitted to be made hereunder shall be made on the basis of a 360 day year and 30day months.26.Rules and Regulations. Tenant shall, at all times during the Term and any extension thereof, comply with all reasonablerules and regulations at any time or from time to time established by Landlord covering use of the Premises and the Project. The current rules andregulations are attached hereto as Exhibit E. If there is any conflict between said rules and regulations and other provisions of this Lease, theterms and provisions of this Lease shall control. Landlord shall not have any liability or obligation for the breach of any rules or regulations byother tenants in the Project and shall not enforce such rules and regulations in a discriminatory manner.27.Subordination. This Lease and Tenant’s interest and rights hereunder are hereby made and shall be subject andsubordinate at all times to the lien of any Mortgage now existing or hereafter created on or against the Project or the Premises, and allamendments, restatements, renewals, modifications, consolidations, refinancing, assignments and extensions thereof, without the necessity ofany further instrument or act on the part of Tenant; provided, however that so long as there is no Default hereunder, Tenant’s right to possession ofthe Premises shall not be disturbed by the Holder of any such Mortgage. Tenant agrees, within 10 business days’ written notice from Landlord, atthe election of the Holder of any such Mortgage, to attorn to any such Holder. Tenant agrees upon written demand to execute, acknowledge anddeliver such instruments, confirming such subordination, and such instruments of attornment as shall be requested by any such Holder, providedthat any such instruments contain appropriate non-disturbance provisions assuring Tenant’s quiet enjoyment of the Premises as set forth inSection 24 hereof. Notwithstanding the foregoing, any such Holder may at any time subordinate its Mortgage to this Lease, without Tenant’sconsent, by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective datesof execution, delivery or recording and in that event such Holder shall have the same rights with respect to this Lease as though this Lease hadbeen executed prior to the execution, delivery and recording of such Mortgage and had been assigned to such Holder. The term “Mortgage”whenever used in this Lease shall be deemed to include deeds of trust, security assignments and any other encumbrances, and any reference tothe “Holder” of a Mortgage shall be deemed to include the beneficiary under a deed of trust. 28.Surrender. Upon the expiration of the Term or earlier termination of Tenant’s right of possession, Tenant shall surrenderthe Premises to Landlord in substantially the same condition as received, subject to any Alterations or Installations permitted by Landlord toremain in the Premises, free of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or released or disposed offrom, the Premises by any person other than a Landlord Party (collectively, “Tenant HazMat Operations”) and released of all Hazardous MaterialsClearances, broom clean, ordinary wear and tear and casualty loss and condemnation covered by Sections 18 and 19 excepted. At least 3months prior to the surrender of the Premises, Tenant shall deliver to Landlord a narrative description of the actions proposed (or required by anyGovernmental Authority) to be taken by Tenant in order to surrender the Premises (including any Installations permitted by Landlord to remain inthe Premises) at the expiration or earlier termination of the Term, free from any residual impact from the Tenant HazMat Operations and otherwisereleased for unrestricted use and occupancy (the “Surrender Plan”). Such Surrender Plan shall be accompanied by a current listing of (i) allHazardous Materials licenses and permits held by or on behalf of any Tenant Party with respect to the Premises, and (ii) all Hazardous Materialsused, stored, handled, treated, generated, released or disposed of from the Premises during the Term and any holding over, and shall be subject tothe review and approval of Landlord’s environmental consultant, which Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 23 approval shall not be unreasonably withheld, conditioned or delayed. In connection with the review and approval of the Surrender Plan, upon therequest of Landlord, Tenant shall deliver to Landlord or its consultant such additional non-proprietary information concerning Tenant HazMatOperations as Landlord shall request. On or before such surrender, Tenant shall deliver to Landlord evidence that the approved Surrender Planshall have been satisfactorily completed and Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, tocause Landlord’s environmental consultant to inspect the Premises and perform such additional procedures as may be deemed reasonablynecessary to confirm that the Premises are, as of the effective date of such surrender or early termination of the Lease, free from any residualimpact from Tenant HazMat Operations. Tenant shall reimburse Landlord, as Additional Rent, for the actual out-of pocket expense incurred byLandlord for Landlord’s environmental consultant to review and approve the Surrender Plan and to visit the Premises and verify satisfactorycompletion of the same, which cost shall not exceed $2,500. Landlord shall have the unrestricted right to deliver such Surrender Plan and anyreport by Landlord’s environmental consultant with respect to the surrender of the Premises to third parties.If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord, or if Tenant shall fail to complete the approvedSurrender Plan, or if such Surrender Plan, whether or not approved by Landlord, shall fail to adequately address any residual effect of TenantHazMat Operations in, on or about the Premises, Landlord shall have the right to take such actions as Landlord may deem reasonable orappropriate to assure that the Premises and the Project are surrendered free from any residual impact from Tenant HazMat Operations, the cost ofwhich actions shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the first paragraph of this Section 28.Tenant shall immediately return to Landlord all keys and/or access cards to parking, the Project, restrooms or all or any portion of thePremises furnished to or otherwise procured by Tenant. If any such access card or key is lost, Tenant shall pay to Landlord, at Landlord’selection, either the reasonable cost of replacing such lost access card or key or the reasonable cost of reprogramming the access security systemin which such access card was used or changing the lock or locks opened by such lost key. Any Tenant’s Property, Alterations and property notso removed by Tenant as permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord atTenant’s expense, and Tenant waives all claims against Landlord for any damages resulting from Landlord’s retention and/or disposition of suchproperty. All obligations of Tenant hereunder not fully performed as of the termination of the Term, including the obligations of Tenant underSection 30 hereof, shall survive the expiration or earlier termination of the Term, including, without limitation, indemnity obligations, paymentobligations with respect to Rent and obligations concerning the condition and repair of the Premises.29.Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, TENANT AND LANDLORD WAIVE ANY RIGHT TOTRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OROTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, ORAGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.30.Environmental Requirements.(a)Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous Materials (as hereinafter defined) tobe brought upon, kept, used, stored, handled, treated, generated in or about, or released or disposed of from, the Premises or the Project inviolation of applicable Environmental Requirements (as hereinafter defined) by Tenant or any Tenant Party. If Tenant breaches the obligationstated in the preceding sentence, or if the presence of Hazardous Materials in the Premises during the Term, any holding over, or during any otherperiod of occupancy of the Premises by Tenant results in contamination of the Premises, the Project or any adjacent property or if contaminationof the Premises, the Project or any adjacent property by Hazardous Materials brought into, kept, used, stored, handled, treated, generated in orabout, or released or disposed of from, the Premises by anyone other than Landlord and Landlord’s employees, agents and contractors otherwiseoccurs during the Term, any Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 24 holding over, or during any other period of occupancy of the Premises by Tenant, Tenant hereby indemnifies and shall defend and hold Landlord,its officers, directors, employees, agents and contractors harmless from any and all actions (including, without limitation, remedial or enforcementactions of any kind, administrative or judicial proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages(including, without limitation, punitive damages and damages based upon diminution in value of the Premises or the Project, or the loss of, orrestriction on, use of the Premises or any portion of the Project), expenses (including, without limitation, attorneys’, consultants’ and experts’ fees,court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctiveor other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, watertables or natural resources), liabilities or losses (collectively, “Environmental Claims”) which arise during or after the Term as a result of suchcontamination. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of siteconditions or any cleanup, treatment, remedial, removal, or restoration work required by any federal, state or local Governmental Authority becauseof Hazardous Materials present in the air, soil or ground water above, on, or under the Premises. Without limiting the foregoing, if the presence ofany Hazardous Materials on the Premises, the Building, the Project or any adjacent property caused or permitted by Tenant or any Tenant Partyresults in any contamination of the Premises, the Building, the Project or any adjacent property, Tenant shall promptly take all actions at its soleexpense and in accordance with applicable Environmental Requirements as are necessary to return the Premises, the Building, the Project or anyadjacent property to the condition existing prior to the time of such contamination, provided that Landlord’s approval of such action shall first beobtained, which approval shall not unreasonably be withheld so long as such actions would not potentially have any material adverse long-term orshort-term effect on the Premises, the Building or the Project. Notwithstanding anything to the contrary contained in Section 28 or this Section 30,Tenant shall not be responsible for, and the indemnification and hold harmless obligation set forth in this paragraph shall not apply to (i)contamination in the Premises which Tenant can prove to Landlord’s reasonably satisfaction existed in the Premises immediately prior to Tenant’soccupancy of the Premises, or (ii) the presence of any Hazardous Materials in the Premises which Tenant can prove to Landlord’s reasonablysatisfaction migrated from outside of the Premises into the Premises, unless in either case, the presence of such Hazardous Materials (x) is theresult of a breach by Tenant of any of its obligations under this Lease, or (y) was caused, contributed to or exacerbated by Tenant or any TenantParty.(b)Business. Landlord acknowledges that it is not the intent of this Section 30 to prohibit Tenant from using the Premises forthe Permitted Use. Tenant may operate its business according to prudent industry practices so long as the use or presence of HazardousMaterials is strictly and properly monitored according to all then applicable Environmental Requirements. As a material inducement to Landlord toallow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord prior to the Commencement Date alist identifying each type of Hazardous Materials to be brought upon, kept, used, stored, handled, treated, generated on, or released or disposed offrom, the Premises and setting forth any and all governmental approvals or permits required in connection with the presence, use, storage,handling, treatment, generation, release or disposal of such Hazardous Materials on or from the Premises (“Hazardous Materials List”). Tenantshall deliver to Landlord an updated Hazardous Materials List at least once a year and shall also deliver an updated list before any new HazardousMaterial is brought onto, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Premises. Tenant shall deliver toLandlord true and correct copies of the following documents (the “Haz Mat Documents”) relating to the use, storage, handling, treatment,generation, release or disposal of Hazardous Materials prior to the Commencement Date, or if unavailable at that time, concurrent with the receiptfrom or submission to a Governmental Authority: permits; approvals; reports and correspondence; storage and management plans, notice ofviolations of any Legal Requirements; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, saidinstallation of tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent may be withheld inLandlord’s sole and absolute discretion); all closure plans or any other documents required by any and all federal, state and local GovernmentalAuthorities for any storage tanks installed in, on or under the Project for the closure of any such tanks; and a Surrender Plan (to the extentsurrender in accordance with Section 28 cannot be accomplished in 3 months). Tenant is not required, however, to provide Landlord with anyportion(s) of the Haz Mat Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 25 Documents containing information of a proprietary nature which, in and of themselves, do not contain a reference to any Hazardous Materials orhazardous activities. It is not the intent of this Section to provide Landlord with information which could be detrimental to Tenant’s businessshould such information become possessed by Tenant’s competitors.(c)Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord that (i) neither Tenant nor, to thebest of Tenant’s knowledge, any of its legal predecessors has been required by any prior landlord, lender or Governmental Authority at any time totake remedial action in connection with Hazardous Materials contaminating a property which contamination was permitted by Tenant of suchpredecessor or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii) Tenant is not subject to anyenforcement order issued by any Governmental Authority in connection with the use, storage, handling, treatment, generation, release or disposalof Hazardous Materials (including, without limitation, any order related to the failure to make a required reporting to any Governmental Authority). IfLandlord determines that this representation and warranty was not true as of the date of this lease, Landlord shall have the right to terminate thisLease in Landlord’s sole and absolute discretion.(d)Testing. Landlord shall have the right to conduct annual tests of the Premises to determine whether any contamination ofthe Premises or the Project has occurred as a result of Tenant’s use. Tenant shall be required to pay the cost of such annual test of the Premisesif there is violation of this Section 30 or if contamination for which Tenant is responsible under this Section 30 is identified; provided, however, thatif Tenant conducts its own tests of the Premises using third party contractors and test procedures acceptable to Landlord which tests are certifiedto Landlord, Landlord shall accept such tests in lieu of the annual tests to be paid for by Tenant. In addition, at any time, and from time to time,prior to the expiration or earlier termination of the Term, Landlord shall have the right to conduct appropriate tests of the Premises and the Projectto determine if contamination has occurred as a result of Tenant’s use of the Premises. In connection with such testing, upon the request ofLandlord, Tenant shall deliver to Landlord or its consultant such non-proprietary information concerning the use of Hazardous Materials in or aboutthe Premises by Tenant or any Tenant Party. If contamination has occurred for which Tenant is liable under this Section 30, Tenant shall pay allcosts to conduct such tests. If no such contamination is found, Landlord shall pay the costs of such tests (which shall not constitute anOperating Expense). Landlord shall provide Tenant with a copy of all third party, non-confidential reports and tests of the Premises made by or onbehalf of Landlord during the Term without representation or warranty and subject to a confidentiality agreement. Tenant shall, at its sole cost andexpense, promptly and satisfactorily remediate any environmental conditions identified by such testing for which Tenant is responsible under theterms of this Lease in accordance with all Environmental Requirements. Landlord’s receipt of or satisfaction with any environmental assessmentin no way waives any rights which Landlord may have against Tenant.(e)Control Areas. Tenant shall be allowed to utilize up to its pro rata share of the Hazardous Materials inventory within anycontrol area or zone (located within the Premises), as designated by the applicable building code, for chemical use or storage. As used in thepreceding sentence, Tenant’s pro rata share of any control areas or zones located within the Premises shall be determined based on the rentablesquare footage that Tenant leases within the applicable control area or zone. For purposes of example only, if a control area or zone contains10,000 rentable square feet and 2,000 rentable square feet of a tenant’s premises are located within such control area or zone (while suchpremises as a whole contains 5,000 rentable square feet), the applicable tenant’s pro rata share of such control area would be 20%.(f)Underground Tanks. Tenant shall have no right to use or install any underground or other storage tanks at the Project.(g)Tenant’s Obligations. Tenant’s obligations under this Section 30 shall survive the expiration or earlier termination of theLease. During any period of time after the expiration or earlier termination of this Lease required by Tenant or Landlord to complete the removalfrom the Premises of any Hazardous Materials for which Tenant is responsible under the terms of this Lease (including, without Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 26 limitation, the release and termination of any licenses or permits restricting the use of the Premises and the completion of the approved SurrenderPlan), Tenant shall continue to pay the full Rent in accordance with this Lease for any portion of the Premises not relet by Landlord in Landlord’ssole discretion, which Rent shall be prorated daily.(h)Definitions. As used herein, the term “Environmental Requirements” means all applicable present and future statutes,regulations, ordinances, rules, codes, judgments, orders or other similar enactments of any Governmental Authority regulating or relating to health,safety, or environmental conditions on, under, or about the Premises or the Project, or the environment, including without limitation, thefollowing: the Comprehensive Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act; and allstate and local counterparts thereto, and any regulations or policies promulgated or issued thereunder. As used herein, the term “HazardousMaterials” means and includes any substance, material, waste, pollutant, or contaminant listed or defined as hazardous or toxic, or regulated byreason of its impact or potential impact on humans, animals and/or the environment under any Environmental Requirements, asbestos andpetroleum, including crude oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures ofnatural gas and such synthetic gas). As defined in Environmental Requirements, Tenant is and shall be deemed to be the “operator” of Tenant’s“facility” and the “owner” of all Hazardous Materials brought on the Premises by Tenant or any Tenant Party, and the wastes, by-products, orresidues generated, resulting, or produced therefrom.31.Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default hereunder unless Landlord fails to perform anyof its obligations hereunder within 30 days after written notice from Tenant specifying such failure (unless such performance will, due to the natureof the obligation, require a period of time in excess of 30 days, then after such period of time as is reasonably necessary). Upon any default byLandlord, Tenant shall give notice by registered or certified mail to any Holder of a Mortgage covering the Premises and to any landlord of anylease of property in or on which the Premises are located and Tenant shall offer such Holder and/or landlord a reasonable opportunity to cure thedefault, including time to obtain possession of the Project by power of sale or a judicial action if such should prove necessary to effect a cure;provided Landlord shall have furnished to Tenant in writing the names and addresses of all such persons who are to receive such notices. Allobligations of Landlord hereunder shall be construed as covenants, not conditions; and, except as may be otherwise expressly provided in thisLease, Tenant may not terminate this Lease for breach of Landlord’s obligations hereunder.All obligations of Landlord under this Lease will be binding upon Landlord only during the period of its ownership of the Premises and notthereafter. The term “Landlord” in this Lease shall mean only the owner for the time being of the Premises. Upon the transfer by such owner ofits interest in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord thereafter accruing, but suchobligations shall be binding during the Term upon each new owner for the duration of such owner’s ownership.32.Inspection and Access. Subject to the terms of this Section 32, Landlord and its agents, representatives, and contractorsmay enter the Premises at any reasonable time (upon not less than 48 hours advance written notice, except in the case of emergencies in whichcase no such notice shall be required and such entry may be at any time), to inspect the Premises and to make such repairs as may be requiredor permitted pursuant to this Lease and for any other business purpose. Landlord and Landlord’s representatives may enter the Premises duringbusiness hours on not less than 48 hours advance written notice (except in the case of emergencies in which case no such notice shall berequired and such entry may be at any time) for the purpose of effecting any such repairs, inspecting the Premises, showing the Premises toprospective purchasers and, during the last year of the Term, to prospective tenants or for any other business purpose. Landlord shall usereasonable efforts to minimize interruption of Tenant’s operations in the Premises during any entry into the Premises pursuant to this Section32. Landlord may erect a suitable sign on the Premises stating the Premises are available to let or that the Project is available for sale. Landlordmay grant easements, make public dedications, designate Common Areas and create restrictions on or about the Premises, provided that no sucheasement, dedication, designation or restriction materially, adversely affects Tenant’s parking (other than Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 27 on a temporary basis) and Tenant’s use or occupancy of the Premises for the Permitted Use. At Landlord’s request, Tenant shall execute suchinstruments as may be necessary for such easements, dedications or restrictions, provided that such items do not materially increase Tenant’sobligations under this Lease. Tenant shall at all times, except in the case of emergencies, have the right to escort Landlord or its agents,representatives, contractors or guests while the same are in the Premises, provided such escort does not materially and adversely affectLandlord’s access rights hereunder. 33.Security. Tenant acknowledges and agrees that security devices and services, if any, while intended to deter crime maynot in given instances prevent theft or other criminal acts and that Landlord is not providing any security services with respect to thePremises. Tenant agrees that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any lossby theft or any other damage suffered or incurred by Tenant in connection with any unauthorized entry into the Premises or any other breach ofsecurity with respect to the Premises. Tenant shall be solely responsible for the personal safety of Tenant’s officers, employees, agents,contractors, guests and invitees while any such person is in, on or about the Premises and/or the Project. Tenant shall at Tenant’s cost obtaininsurance coverage to the extent Tenant desires protection against such criminal acts.34.Force Majeure. Landlord shall not be responsible or liable for delays in the performance of its obligations hereunder whencaused by, related to, or arising out of acts of God, sinkholes or subsidence, strikes, lockouts, or other labor disputes, embargoes, quarantines,weather, national, regional, or local disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes therefor)at reasonable costs or failure of, or inability to obtain, utilities necessary for performance, governmental restrictions, orders, limitations,regulations, or controls, national emergencies, delay in issuance or revocation of permits, enemy or hostile governmental action, terrorism,insurrection, riots, civil disturbance or commotion, fire or other casualty, and other causes or events beyond the reasonable control of Landlord(“Force Majeure”). 35.Brokers. Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person(collectively, “Broker”) in connection with this transaction and that no Broker brought about this transaction, other than Cushman &Wakefield. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, otherthan the broker, if any named in this Section 35, claiming a commission or other form of compensation by virtue of having dealt with Tenant orLandlord, as applicable, with regard to this leasing transaction. Landlord shall be responsible for all commissions due to Cushman & Wakefieldarising out of the execution of this Lease in accordance with the terms of a separate written agreement between Cushman & Wakefield andLandlord.36.Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY OTHERAGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANYOTHER PERSON FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR INJURY, WHETHERACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF EVERY KIND AND DESCRIPTION, INCLUDING, WITHOUTLIMITATION TRADE FIXTURES, EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORYANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING AND OTHER RECORDS OF EVERY KINDAND DESCRIPTION KEPT AT THE PREMISES AND ANY AND ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BENO PERSONAL RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN ANYWAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECTMATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD’S INTERESTIN THE PROJECT OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS PAYABLE INRESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANYPERSONAL LIABILITY BE ASSERTED AGAINST LANDLORD IN CONNECTION WITH THIS LEASE Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 28 NOR SHALL ANY RECOURSE BE HAD TO ANY OTHER PROPERTY OR ASSETS OF LANDLORD OR ANY OF LANDLORD’S OFFICERS,DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD’SOFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANYLOSS OF INCOME OR PROFIT THEREFROM.37.Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, thenand in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention ofthe parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part ofthis Lease, a clause or provision as similar in effect to such illegal, invalid or unenforceable clause or provision as shall be legal, valid andenforceable.38.Signs; Exterior Appearance. Tenant shall not, without the prior written consent of Landlord, which may be granted orwithheld in Landlord’s reasonable discretion: (i) attach any awnings, exterior lights, decorations, balloons, flags, pennants, banners, painting orother projection to any outside wall of the Project, (ii) use any curtains, blinds, shades or screens other than Landlord’s standard windowcoverings, (iii) coat or otherwise sunscreen the interior or exterior of any windows, (iv) place any bottles, parcels, or other articles on the windowsills, (v) place any equipment, furniture or other items of personal property on any exterior balcony, or (vi) paint, affix or exhibit on any part of thePremises or the Project any signs, notices, window or door lettering, placards, decorations, or advertising media of any type which can be viewedfrom the exterior of the Premises. Interior signs on doors and the directory tablet shall be inscribed, painted or affixed for Tenant by Landlord atthe sole cost and expense of Tenant, and shall be of a size, color and type acceptable to Landlord. Nothing may be placed on the exterior ofcorridor walls or corridor doors other than Landlord’s standard lettering. The directory tablet shall be provided exclusively for the display of thename and location of tenants.Tenant shall have the non-exclusive right to display, at Tenant’s cost and expense, Tenant’s name on the monument sign serving theBuilding (“Monument Sign”). Tenant acknowledges and agrees that Tenant’s signage on the Monument Sign including, without limitation, thelocation, size, color and type, shall be subject to Landlord’s prior written approval, which shall not be unreasonably withheld and shall be consistentwith Landlord’s signage program at the Project and applicable Legal Requirements. Tenant shall be entitled to Tenant’s pro rata share of theMonument Sign. Tenant shall be responsible, at Tenant’s sole cost and expense, for the maintenance of Tenant’s signage on the Monument Sign,for the removal of Tenant’s signage from the Monument Sign at the expiration or earlier termination of this Lease and for the repair of all damageresulting from such removal. For the avoidance of doubt, Landlord acknowledges that Tenant shall not be required to pay or reimburse Landlordany costs in connection with Tenant’s signage on the Monument Sign existing at the Project as of the date of this Lease and Landlord herebyapproves such existing Tenant Signage on the Monument Sign.Tenant shall have the non-exclusive right to display, at Tenant’s cost and expense, Tenant’s name on the top of the Building in alocation designated by Landlord and reasonably acceptable to Tenant (“Building Sign”). Tenant acknowledges and agrees that Tenant’s BuildingSign including, without limitation, the location, size, color and type, shall be subject to Landlord’s prior written approval, which shall not beunreasonably withheld and shall be consistent with Landlord’s signage program at the Project and applicable Legal Requirements. Tenant shall beresponsible, at Tenant’s sole cost and expense, for the maintenance of Tenant’s Building Sign, for the removal of Tenant’s Building Sign at theexpiration or earlier termination of this Lease and for the repair of all damage resulting from such removal.39.Right to Expand.(a)Right of First Refusal. So long as Tenant is occupying 100% of the Premises, then, subject to the provisions of thisSection 39, each time after the date of this Lease and prior to the expiration of the Term that Landlord intends to accept a written proposal (the“Pending Deal”) to lease all Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 29 or any portion the First Refusal Space (as hereinafter defined) to a third party, Landlord shall deliver to Tenant written notice (the “Pending DealNotice”) of the existence of such Pending Deal and the material terms of such Pending Deal. For purposes of this Section 39(a), “First RefusalSpace” shall mean that certain portion of the Building commonly known as Suite 200, containing approximately 9,890 rentable square feet, to theextent such space is not occupied by a tenant or which is occupied by a then existing tenant whose lease is expiring within 9 months or less andsuch tenant does not wish to renew (whether or not such tenant has a right to renew) its occupancy of such space. For the avoidance of doubt,Tenant shall be required to exercise its right under this Section 39(a) with respect to all of the space described in the Pending Deal Notice,including any space in addition to the First Refusal Space that is described in the Pending Deal Notice, which additional space shall be deemed tobe included as part of the First Refusal Space. Within 7 business days after Tenant’s receipt of the Pending Deal Notice, Tenant shall deliver toLandlord written notice (the “Space Acceptance Notice”) if Tenant elects to lease the First Refusal Space. Tenant’s right to receive the PendingDeal Notice and election to lease or not lease the First Refusal Space pursuant to this Section 39(a) is hereinafter referred to as the “Right of FirstRefusal.” If Tenant elects to lease the First Refusal Space described in the Pending Deal Notice by delivering the Space Acceptance Noticewithin the required 7 business day period, Tenant shall be deemed to agree to lease the First Refusal Space on the same general terms andconditions as this Lease except that the terms of this Lease shall be modified to reflect the terms of the Pending Deal Notice for the rental of theFirst Refusal Space. Tenant acknowledges that the term of the Lease with respect to the First Refusal Space and the Term of the Lease withrespect to the original Premises may not be co-terminous. Notwithstanding anything to the contrary contained herein, in no event shall the WorkLetter apply to the First Refusal Space. If Tenant fails to deliver a Space Acceptance Notice to Landlord within the required 7 business dayperiod, Landlord shall have the right to lease the First Refusal Space to the third party subject to the Pending Deal (or an affiliate of such thirdparty) (“Pending Deal Party”) on substantially the same business terms and conditions set forth in the Pending Deal Notice. Notwithstandinganything to the contrary contained in this Section 39(a), Tenant shall have no right to exercise the Right of First Refusal and the provisions of thisSection 39(a) shall no longer apply (x) after the date that is 9 months prior to the expiration date of the Base Term if Tenant has not exercised itsExtension Right pursuant to Section 40, or (y) after the date that is 9 months prior to the expiration of the Extension Term. Notwithstandinganything to the contrary contained in this Lease, if Tenant exercises its Right of First Refusal pursuant to this Section 39(a), Tenant shall bedeemed to have waived its Termination Right (as defined in Section 41 below), and Section 41 shall be null and void and of no further force oreffect.(b)Amended Lease. If: (i) Tenant fails to timely deliver a Space Acceptance Notice, or (ii) after the expiration of a period of 15days after Landlord’s delivery to Tenant of a lease amendment for Tenant’s lease of the First Refusal Space, no lease amendment for the FirstRefusal Space acceptable to both parties each in their sole and absolute discretion, has been executed, Tenant shall, notwithstanding anything tothe contrary contained herein, be deemed to have forever waived its right to lease such First Refusal Space.(c)Exceptions. Notwithstanding the above, the Right of First Refusal shall, at Landlord’s option, not be in effect and may notbe exercised by Tenant:(i)during any period of time that Tenant is in Default under any provision of the Lease; or(ii)if Tenant has been in Default under any provision of the Lease 3 or more times, whether or not the Defaults arecured, during the 12 month period prior to the date on which Tenant seeks to exercise the Right of First Refusal.(d)Termination. The Right of First Refusal shall, at Landlord’s option, terminate and be of no further force or effect even afterTenant’s due and timely exercise of the Right of First Refusal if, after such exercise, but prior to the commencement date of the lease of suchFirst Refusal Space, (i) Tenant fails to timely cure any default by Tenant under the Lease; or (ii) Tenant has Defaulted 3 or more times Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 30 during the period from the date of the exercise of the Right of First Refusal to the date of the commencement of the lease of the First RefusalSpace, whether or not such Defaults are cured.(e)Rights Personal. The Right of First Refusal is personal to Tenant and is not assignable without Landlord’s consent, whichmay be granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest inthe Lease, except that it may be assigned in connection with any Permitted Assignment of this Lease.(f)No Extensions. The period of time within which the Right of First Refusal may be exercised shall not be extended orenlarged by reason of Tenant’s inability to exercise the Right of First Refusal. 40.Right to Extend Term. Tenant shall have the right to extend the Term of the Lease upon the following terms andconditions:(a)Extension Rights. Tenant shall have 1 right (the “Extension Right”) to extend the term of this Lease for 5 years (the“Extension Term”) on the same terms and conditions as this Lease (other than with respect to Base Rent and the Work Letter) by giving Landlordwritten notice of its election to exercise each Extension Right at least 9 months prior to the expiration of the Base Term of the Lease.Upon the commencement of the Extension Term, Base Rent shall be payable at the Market Rate (as defined below). Base Rent shallthereafter be adjusted on each annual anniversary of the commencement of such Extension Term by a percentage as determined by Landlord andagreed to by Tenant at the time the Market Rate is determined. As used herein, “Market Rate” shall mean the rate that comparable landlords ofcomparable buildings have accepted in current transactions from non-equity (i.e., not being offered equity in the buildings) and nonaffiliated tenantsof similar financial strength for space of comparable size, quality (including all Tenant Improvements, Alterations and other improvements) andfloor height in comparable laboratory/office buildings in the Torrey Pines area of San Diego for a comparable term, with the determination of theMarket Rate to take into account all relevant factors, including tenant inducements, available amenities (including, without limitation, the Amenities(as defined in Section 42 below)), age of the Building, age of mechanical systems serving the Premises, parking costs, leasing commissions,allowances or concessions, if any. In addition, Landlord may impose a market rent for the parking rights provided hereunder.If, on or before the date which is 270 days prior to the expiration of the Base Term of this Lease, Tenant has not agreed with Landlord’sdetermination of the Market Rate and the rent escalations during the Extension Term after negotiating in good faith, Tenant shall be deemed tohave elected arbitration as described in Section 40(b). Tenant acknowledges and agrees that, if Tenant has elected to exercise the ExtensionRight by delivering notice to Landlord as required in this Section 40(a), Tenant shall have no right thereafter to rescind or elect not to extend theterm of the Lease for the Extension Term. (b)Arbitration. (i)Within 10 days of Tenant’s notice to Landlord of its election (or deemed election) to arbitrate Market Rate andescalations, each party shall deliver to the other a proposal containing the Market Rate and escalations that the submitting partybelieves to be correct (“Extension Proposal”). If either party fails to timely submit an Extension Proposal, the other party’s submittedproposal shall determine the Base Rent and escalations for the Extension Term. If both parties submit Extension Proposals, thenLandlord and Tenant shall meet within 7 days after delivery of the last Extension Proposal and make a good faith attempt to mutuallyappoint a single Arbitrator (and defined below) to determine the Market Rate and escalations. If Landlord and Tenant are unable toagree upon a single Arbitrator, then each shall, by written notice delivered to the other within 10 business days after the meeting, selectan Arbitrator. If either party fails to timely give notice of its selection for an Arbitrator, the other party’s submitted proposal shalldetermine the Base Rent for the Extension Term. The 2 Arbitrators so appointed shall, within 5 business days after their appointment,appoint a third Arbitrator. If the 2 Arbitrators Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 31 so selected cannot agree on the selection of the third Arbitrator within the time above specified, then either party, on behalf of bothparties, may request such appointment of such third Arbitrator by application to any state court of general jurisdiction in the jurisdictionin which the Premises are located, upon 10 business days prior written notice to the other party of such intent.(ii)The authority of the Arbitrator(s) shall be limited strictly to a selection of either Landlord’s Extension Proposal inits entirety or Tenant’s Extension Proposal in its entirety as the Extension Proposal which most closely approximates the Market Rateand escalations. The Arbitrator(s) shall have no authority to create an independent structure of the Market Rate and escalations,combine elements of both Extension Proposals to create a third, or compromise or alter in any way any of the components of theExtension Proposals submitted by the parties. The sole decision to be made shall be which of the parties’ Extension Proposals in itsentirety shall determine the Market Rate and escalations for the Extension Term. The decision of the Arbitrator(s) shall be made within30 days after the appointment of a single Arbitrator or the third Arbitrator, as applicable. The decision of the single Arbitrator shall befinal and binding upon the parties. Each party shall pay the fees and expenses of the Arbitrator appointed by or on behalf of such partyand the fees and expenses of the third Arbitrator shall be borne equally by both parties. If the Market Rate and escalations are notdetermined by the first day of the Extension Term, then Tenant shall pay Landlord Base Rent in an amount equal to the Base Rent ineffect immediately prior to the Extension Term and increased by the Rent Adjustment Percentage until such determination ismade. After the determination of the Market Rate and escalations, the parties shall make any necessary adjustments to suchpayments made by Tenant. Landlord and Tenant shall then execute an amendment recognizing the Market Rate and escalations forthe Extension Term.(iii)An “Arbitrator” shall be any person appointed by or on behalf of either party or appointed pursuant to theprovisions hereof and: (i) shall be (A) a member of the American Institute of Real Estate Appraisers with not less than 10 years ofexperience in the appraisal of improved office and high tech industrial real estate in the greater San Diego metropolitan area, or (B) alicensed commercial real estate broker with not less than 15 years experience representing landlords and/or tenants in the leasing ofhigh tech or life sciences space in the greater San Diego metropolitan area, (ii) devoting substantially all of their time to professionalappraisal or brokerage work, as applicable, at the time of appointment and (iii) be in all respects impartial and disinterested.(c)Rights Personal. The Extension Right is personal to Tenant and is not assignable without Landlord’s consent, which maybe granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest in theLease, except that it may be assigned in connection with any Permitted Assignment of this Lease.(d)Exceptions. Notwithstanding anything set forth above to the contrary, the Extension Right shall, at Landlord’s option, notbe in effect and Tenant may not exercise the Extension Right:(i)during any period of time that Tenant is in Default under any provision of this Lease; or(ii)if Tenant has been in Default under any provision of this Lease 3 or more times, whether or not the Defaults arecured, during the 12 month period immediately prior to the date that Tenant intends to exercise the Extension Right, whether or not theDefaults are cured.(e)No Extensions. The period of time within which the Extension Right may be exercised shall not be extended or enlarged byreason of Tenant’s inability to exercise the Extension Right.(f)Termination. The Extension Right shall, at Landlord’s option, terminate and be of no further force or effect even afterTenant’s due and timely exercise of the Extension Right, if, after such exercise, but prior to the commencement date of the Extension Term, (i)Tenant fails to timely cure any Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 32 default by Tenant under this Lease; or (ii) Tenant has Defaulted 3 or more times during the period from the date of the exercise of the ExtensionRight to the date of the commencement of the Extension Term, whether or not such Defaults are cured.41.Early Termination Right. Tenant shall have the right, subject to the provisions of this Section 41, to terminate this Lease(“Termination Right”) with respect to the entire Premises only on the last day of the 60th month after the Commencement Date (“EarlyTermination Date”), so long as Tenant delivers to Landlord (a) a written notice (“Termination Notice”), of its election to exercise its TerminationRight no less than 9 months in advance of the Early Termination Date, and (b) concurrent with Tenant’s delivery of the Termination Notice toLandlord, an early termination payment equal to (i) the Base Rent that would have been payable for the 6 month period immediately following theEarly Termination Date, plus (ii) the unamortized amount of the Excess TI Costs Allowance with interest as provided in Section 4(b) (collectively,the “Early Termination Payment”). If Tenant timely and properly exercises the Termination Right and delivers the Early Termination Payment,Tenant shall vacate the Premises and deliver possession thereof to Landlord in the condition required by the terms of this Lease on or before theEarly Termination Date and Tenant shall have no further obligations under this Lease after the Early Termination Date except for those accruingprior to the Early Termination Date and those which, pursuant to the terms of this Lease, survive the expiration or early termination of thisLease. If Tenant (i) exercises its Right of First Refusal pursuant to Section 39(a), or (ii) does not deliver to Landlord the Termination Notice andthe Early Termination Payment within the time period provided in this paragraph, Tenant shall be deemed to have waived its Termination Right andthe provisions of this Section 41 shall have no further force or effect.42.The Alexandria Amenities.(a)Generally. ARE-SD Region No. 17, LLC, a Delaware limited liability company (“The Alexandria Landlord”) has constructedcertain amenities at the property owned by The Alexandria Landlord located at 10996 Torreyana Road, San Diego, California (“The Alexandria”),which include, without limitation, shared conference facilities (“Shared Conference Facilities”), a fitness center and restaurant (collectively, the“Amenities”) for non-exclusive use by (a) Tenant, (b) other tenants of the Project, (c) Landlord, (d) the tenants of The Alexandria Landlord, (e) TheAlexandria Landlord, (f) other affiliates of Landlord, The Alexandria Landlord and Alexandria Real Estate Equities, Inc. (“ARE”), (g) the tenants ofsuch other affiliates of Landlord, The Alexandria Landlord and ARE, and (h) any other parties permitted by The Alexandria Landlord (collectively,“Users”). Landlord, The Alexandria Landlord, ARE, and all affiliates of Landlord, The Alexandria Landlord and ARE may be referred to collectivelyherein as the “ARE Parties.” The Alexandria Landlord shall have the sole right to determine all matters related to the Amenities including, withoutlimitation, relating to the reconfiguration, relocation, modification or removal of any of the Amenities at The Alexandria and/or to revise, expand ordiscontinue any of the services (if any) provided in connection with the Amenities. (b)License. Commencing on the Commencement Date, and so long as The Alexandria and the Project continue to be ownedby affiliates of ARE, Tenant shall have the non-exclusive right to the use of the available Amenities in common with other Users pursuant to theterms of this Section 42. Fitness center passes shall be issued to all employees of Tenant employed at the Premises. Commencing on theCommencement Date, Tenant shall commence paying Landlord a fixed fee during the Base Term equal to $0.18 per rentable square foot of thePremises per month (“Amenities Fee”), which Amenities Fee shall by payable on the first day of each month during the Term whether or notTenant elects to use any or all of the Amenities. The Amenities Fee shall be increased annually on each anniversary of the Commencement Dateby 3%, including during the Extension Term. If all of the Amenities at The Alexandria become materially unavailable for use by Tenant (for anyreason other than a Default by Tenant under this Lease or the default by Tenant of any agreement(s) relating to the use of the Amenities byTenant) for a period in excess of 90 consecutive days, then, commencing on the date that the Amenities in their entirety become materiallyunavailable for use by Tenant and continuing for the period that the Amenities in their entirety remain materially unavailable for use by Tenant, theAmenities Fee then-currently payable by Tenant shall be abated. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 33 (c)Shared Conference Facilities. Use by Tenant of the Shared Conference Facilities and restaurant at The Alexandria shallbe in common with other Users with scheduling procedures reasonably determined by The Alexandria Landlord. The Alexandria Landlord reservesthe right to exercise its reasonable discretion in the event of conflicting scheduling requests among Users. Tenant hereby acknowledges that (i)Biocom/San Diego, a California non-profit corporation (“Biocom”) has the right to reserve the Shared Conference Facilities and any reservabledining area(s) included within the Amenities for up to 50% of the time that such Shared Conference Facilities and reservable dining area(s) areavailable for use by Users each calendar month, and (ii) Illumina, Inc., a Delaware corporation, has the exclusive use of the main conference roomwithin the Shared Conference Facilities for up to 4 days per calendar month.Any vendors engaged by Tenant in connection with Tenant’s use of the Shared Conference Facilities shall be professional licensedvendors. The Alexandria Landlord shall have the right to reasonably approve any vendors utilized by Tenant in connection with Tenant’s use of theShared Conference Facilities. Prior to any entry by any such vendor onto The Alexandria, Tenant shall deliver to Landlord a copy of the contractbetween Tenant and such vendor and certificates of insurance from such vendor evidencing industry standard commercial general liability,automotive liability, and workers’ compensation insurance. Tenant shall cause all such vendors utilized by Tenant to provide a certificate ofinsurance naming Landlord, ARE, and The Alexandria Landlord as additional insureds under the vendor’s liability policies. Notwithstanding theforegoing, Tenant shall be required to use the food service operator used by The Alexandria Landlord at The Alexandria for any food service orcatered events held by Tenant in the Shared Conference Facilities.Tenant shall, at Tenant’s sole cost and expense, (i) be responsible for the set-up of the Shared Conference Facilities in connection withTenant’s use (including, without limitation ensuring that Tenant has a sufficient number of chairs and tables and the appropriate equipment), and (ii)surrender the Shared Conference Facilities after each time that Tenant uses the Shared Conference Facilities free of Tenant’s personal property, insubstantially the same set up and same condition as received, and free of any debris and trash. If Tenant fails to restore and surrender theShared Conference Facilities as required by sub-section (ii) of the immediately preceding sentence, such failure shall constitute a “SharedFacilities Default.” Each time that Landlord reasonably determines that Tenant has committed a Shared Facilities Default, Tenant shall berequired to pay Landlord a penalty within 5 days after notice from Landlord of such Shared Facilities Default. The penalty payable by Tenant inconnection with the first Shared Facilities Default shall be $200. The penalty payable shall increase by $50 for each subsequent Shared FacilitiesDefault (for the avoidance of doubt, the penalty shall be $250 for the second Shared Facilities Default, shall be $300 for the third Shared FacilitiesDefault, etc.). In addition to the foregoing, Tenant shall be responsible for reimbursing The Alexandria Landlord or Landlord, as applicable, for allreasonable out-of-pocket costs expended by The Alexandria Landlord or Landlord, as applicable, in repairing any damage to the SharedConference Facilities, the Amenities, or The Alexandria caused by Tenant or any Tenant Party. The provisions of this Section 42(c) shall survivethe expiration or earlier termination of this Lease.(d)Rules and Regulations. Tenant shall be solely responsible for paying for any and all ancillary services (e.g., audio visualequipment) provided to Tenant, all food services operators and any other third party vendors providing services to Tenant at TheAlexandria. Tenant shall use the Amenities (including, without limitation, the Shared Conference Facilities) in compliance with all applicable LegalRequirements and any rules and regulations imposed by The Alexandria Landlord or Landlord from time to time (which rules shall not be enforcedin a discriminatory manner) and in a manner that will not interfere with the rights of other Users. The use of Amenities other than the SharedConference Facilities by employees of Tenant shall be in accordance with the terms and conditions of the standard licenses, indemnification andwaiver agreement required by The Alexandria Landlord or the operator of the Amenities to be executed by all persons wishing to use suchAmenities. Neither The Alexandria Landlord nor Landlord (nor, if applicable, any other affiliate of Landlord) shall have any liability or obligation forthe breach of any rules or regulations by other Users with respect to the Amenities. Tenant shall not make any alterations, additions, orimprovements of any kind to the Shared Conference Facilities, the Amenities or The Alexandria. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 34 Tenant acknowledges and agrees that The Alexandria Landlord shall have the right at any time and from time to time to reconfigure,relocate, modify or remove any of the Amenities at The Alexandria and/or to revise, expand or discontinue any of the services (if any) provided inconnection with the Amenities.(e)Waiver of Liability and Indemnification. Tenant warrants that it will use reasonable care to prevent damage to propertyand injury to persons while on The Alexandria. To the extent permitted by applicable law, Tenant waives any claims it or any Tenant Parties mayhave against any ARE Parties relating to, arising out of or in connection with the Amenities and any entry by Tenant and/or any Tenant Partiesonto The Alexandria, and Tenant releases and exculpates all ARE Parties from any liability relating to, arising out of or in connection with theAmenities and any entry by Tenant and/or any Tenant Parties onto The Alexandria. Tenant hereby agrees to indemnify, defend, and holdharmless the ARE Parties from any claim of damage to property or injury to person relating to, arising out of or in connection with (i) the use of theAmenities by Tenant or any Tenant Parties, and (ii) any entry by Tenant and/or any Tenant Parties onto The Alexandria, except to the extentcaused by the willful misconduct or negligence of any ARE Party. The provisions of this Section 42 shall survive the expiration or earliertermination of this Lease.(f)Insurance. As of the Commencement Date, Tenant shall cause The Alexandria Landlord to be named as an additionalinsured under the commercial general liability policy of insurance that Tenant is required to maintain pursuant to Section 17 of this Lease.43.Landlord’s Right to Relocate Tenant. Landlord shall have no right to relocate Tenant to another premises during the Termof the Lease. 44.Miscellaneous.(a)Notices. All notices or other communications between the parties shall be in writing and shall be deemed duly given upondelivery or refusal to accept delivery by the addressee thereof if delivered in person, or upon actual receipt if delivered by reputable overnightguaranty courier, addressed and sent to the parties at their addresses set forth above. Landlord and Tenant may from time to time by writtennotice to the other designate another address for receipt of future notices.(b)Joint and Several Liability. If and when included within the term “Tenant,” as used in this instrument, there is more thanone person or entity, each shall be jointly and severally liable for the obligations of Tenant.(c)Financial Information. Upon Landlord’s reasonable request, Tenant shall furnish Landlord with true and complete copiesof (i) Tenant’s most recent audited annual financial statements within 90 days of the end of each of Tenant’s fiscal years during the Term, (ii)Tenant’s most recent unaudited quarterly financial statements within 45 days of the end of each of Tenant’s first three fiscal quarters of each ofTenant’s fiscal years during the Term, (iii) updated business plans, including cash flow projections and/or pro forma balance sheets and incomestatements, all of which shall be treated by Landlord as confidential information belonging to Tenant, (iv) corporate brochures prepared by Tenantfor prospective investors, and (v) any other financial information or summaries that Tenant typically provides to its lenders or shareholders.Notwithstanding the foregoing, in no event shall Tenant be required to provide any financial information to Landlord which Tenant does nototherwise prepare (or cause to be prepared) for its own purposes. So long as Tenant is a “public company” and its financial information is publiclyavailable, then the foregoing delivery requirements of this Section 44(c) shall not apply.(d)Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf of Tenant in any publicrecord. Landlord may prepare and file, and upon request by Landlord Tenant will execute, a memorandum of lease. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 35 (e)Interpretation. The normal rule of construction to the effect that any ambiguities are to be resolved against the draftingparty shall not be employed in the interpretation of this Lease or any exhibits or amendments hereto. Words of any gender used in this Lease shallbe held and construed to include any other gender, and words in the singular number shall be held to include the plural, unless the contextotherwise requires. The captions inserted in this Lease are for convenience only and in no way define, limit or otherwise describe the scope orintent of this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.(f)Not Binding Until Executed. The submission by Landlord to Tenant of this Lease shall have no binding force or effect,shall not constitute an option for the leasing of the Premises, nor confer any right or impose any obligations upon either party until execution of thisLease by both parties.(g)Limitations on Interest. It is expressly the intent of Landlord and Tenant at all times to comply with applicable lawgoverning the maximum rate or amount of any interest payable on or in connection with this Lease. If applicable law is ever judicially interpretedso as to render usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or received with respect to thisLease, then it is Landlord’s and Tenant’s express intent that all excess amounts theretofore collected by Landlord be credited on the applicableobligation (or, if the obligation has been or would thereby be paid in full, refunded to Tenant), and the provisions of this Lease immediately shall bedeemed reformed and the amounts thereafter collectible hereunder reduced, without the necessity of the execution of any new document, so as tocomply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder.(h)Choice of Law. Construction and interpretation of this Lease shall be governed by the internal laws of the state in which thePremises are located, excluding any principles of conflicts of laws.(i)Time. Time is of the essence as to the performance of Landlord’s and Tenant’s obligations under this Lease.(j)OFAC. Tenant and all beneficial owners of Tenant are currently (a) in compliance with and shall at all times during the Termof this Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury andany statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term of thisLease be listed on, the Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, or the Sectoral SanctionsIdentification List, which are all maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuantto any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conductingbusiness under the OFAC Rules.(k)Incorporation by Reference. All exhibits and addenda attached hereto are hereby incorporated into this Lease and made apart hereof. If there is any conflict between such exhibits or addenda and the terms of this Lease, such exhibits or addenda shall control.(l)Entire Agreement. This Lease, including the exhibits attached hereto, constitutes the entire agreement between Landlordand Tenant pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, letters of intent,negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements, express orimplied, made to either party by the other party in connection with the subject matter hereof except as specifically set forth herein.(m)No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the monthlyinstallment of Base Rent or any Additional Rent will be other than on account of the earliest stipulated Base Rent and Additional Rent, nor will anyendorsement or statement on any check or letter accompanying a check for payment of any Base Rent or Additional Rent be an accord andsatisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursueany other remedy provided in this Lease. Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 36 (n)Hazardous Activities. Notwithstanding any other provision of this Lease, Landlord, for itself and its employees, agents andcontractors, reserves the right to refuse to perform any repairs or services in any portion of the Premises which, pursuant to Tenant’s routinesafety guidelines, practices or custom or prudent industry practices, require any form of protective clothing or equipment other than safetyglasses. In any such case, Tenant shall contract with parties who are acceptable to Landlord, in Landlord’s reasonable discretion, for all suchrepairs and services, and Landlord shall, to the extent required, equitably adjust Tenant’s Share of Operating Expenses in respect of such repairsor services to reflect that Landlord is not providing such repairs or services to Tenant.(o)Redevelopment of Project. Tenant acknowledges that Landlord, in its sole discretion, may from time to time expand,renovate and/or reconfigure the Project as the same may exist from time to time and, in connection therewith or in addition thereto, as the casemay be, from time to time without limitation: (a) change the shape, size, location, number and/or extent of any improvements, buildings,structures, lobbies, hallways, entrances, exits, parking and/or parking areas relative to any portion of the Project; (b) modify, eliminate and/or addany buildings, improvements, and parking structure(s) either above or below grade, to the Project, the Common Areas and/or any other portion ofthe Project and/or make any other changes thereto affecting the same; and (c) make any other changes, additions and/or deletions in any wayaffecting the Project and/or any portion thereof as Landlord may elect from time to time, including without limitation, additions to and/or deletionsfrom the land comprising the Project, the Common Areas and/or any other portion of the Project. Notwithstanding anything to the contrarycontained in this Lease, Tenant shall have no right to seek damages (including abatement of Rent) or to cancel or terminate this Lease because ofany proposed changes, expansion, renovation or reconfiguration of the Project nor shall Tenant have the right to restrict, inhibit or prohibit anysuch changes, expansion, renovation or reconfiguration; provided, however, (i) Landlord shall not change the size, dimensions, location or Tenant’sPermitted Use of the Premises, (ii) Landlord shall not materially adversely impair Tenant’s use and access of the Premises (other than on atemporary basis), and (iii) Tenant’s financial obligations under this Lease shall not be materially increased as a result of such redevelopment.(p)Intentionally Omitted. (q)EV Charging Stations. Landlord shall not unreasonably withhold its consent to Tenant’s written request to install 1 or moreelectric vehicle car charging stations (“EV Stations”) in the parking area serving the Project; provided, however, that Tenant complies with allreasonable requirements, standards, rules and regulations which may be imposed by Landlord, at the time Landlord’s consent is granted, inconnection with Tenant’s installation, maintenance, repair and operation of such EV Stations, which may include, without limitation, the charge toTenant of a reasonable monthly rental amount for the parking spaces used by Tenant for such EV Stations, Landlord’s designation of the locationof Tenant’s EV Stations, and Tenant’s payment of all costs whether incurred by Landlord or Tenant in connection with the installation,maintenance, repair and operation of each Tenant’s EV Station(s). Nothing contained in this paragraph is intended to increase the number ofparking spaces which Tenant is otherwise entitled to use at the Project under Section 10 of this Lease nor impose any additional obligations onLandlord with respect to Tenant’s parking rights at the Project.(r)California Accessibility Disclosure. For purposes of Section 1938(a) of the California Civil Code, Landlord herebydiscloses to Tenant, and Tenant hereby acknowledges, that the Project has not undergone inspection by a Certified Access Specialist (CASp). Inaddition, the following notice is hereby provided pursuant to Section 1938(e) of the California Civil Code: "A Certified Access Specialist (CASp)can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibilitystandards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner orlessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy ofthe lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of theCASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations ofconstruction-related accessibility standards within the premises." In furtherance of and in connection with Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 37 such notice: (i) Tenant, having read such notice and understanding Tenant's right to request and obtain a CASp inspection, hereby elects not toobtain such CASp inspection and forever waives its rights to obtain a CASp inspection with respect to the Premises, Building and/or Project to theextent permitted by Legal Requirements; and (ii) if the waiver set forth in clause (i) hereinabove is not enforceable pursuant to Legal Requirements,then Landlord and Tenant hereby agree as follows (which constitute the mutual agreement of the parties as to the matters described in the lastsentence of the foregoing notice): (A) Tenant shall have the one-time right to request for and obtain a CASp inspection, which request must bemade, if at all, in a written notice delivered by Tenant to Landlord; (B) any CASp inspection timely requested by Tenant shall be conducted (1) at atime mutually agreed to by Landlord and Tenant, (2) in a professional manner by a CASp designated by Landlord and without any testing thatwould damage the Premises, Building or Project in any way, and (3) at Tenant's sole cost and expense, including, without limitation, Tenant'spayment of the fee for such CASp inspection, the fee for any reports prepared by the CASp in connection with such CASp inspection (collectively,the "CASp Reports") and all other costs and expenses in connection therewith; (C) the CASp Reports shall be delivered by the CASpsimultaneously to Landlord and Tenant; (D) Tenant, at its sole cost and expense, shall be responsible for making any improvements, alterations,modifications and/or repairs to or within the Premises to correct violations of construction-related accessibility standards including, withoutlimitation, any violations disclosed by such CASp inspection; and (E) if such CASp inspection identifies any improvements, alterations,modifications and/or repairs necessary to correct violations of construction-related accessibility standards relating to those items of the Buildingand Project located outside the Premises that are Landlord's obligation to repair as set forth in this Lease, then Landlord shall perform suchimprovements, alterations, modifications and/or repairs as and to the extent required by Legal Requirements to correct such violations, and Tenantshall reimburse Landlord for the cost of such improvements, alterations, modifications and/or repairs within 10 business days after Tenant's receiptof an invoice therefor from Landlord.[ Signatures on next page ] Net Multi-Tenant Laboratory10628 Science Center/Arcturus - Page 38 IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first above written. TENANT: ARCTURUS THERAPEUTICS, INC.,a Delaware corporation By: /s/ Joseph E. PayneIts: President & CEO LANDLORD:ARE-SD REGION NO. 44, LLC, a Delaware limited liability company By: ALEXANDRIA REAL ESTATE EQUITIES, L.P., a Delaware limited partnership, managing member By: ARE-QRS CORP., a Maryland corporation, general partner By: /s/ Gary DeanIts: Senior Vice President, RE Legal Affairs 10628 Science Center /Arcturus - Page 1 EXHIBIT A TO LEASEDESCRIPTION OF PREMISES 10628 Science Center /Arcturus - Page 1 EXHIBIT B TO LEASEDESCRIPTION OF PROJECTThe land is situated in the City of San Diego, County of San Diego, State of California, and is described as follows:TRACT I:PARCEL A:PARCEL 1 OF PARCEL MAP NO. 19142 IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THEOFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JANUARY 24, 2003.PARCEL B:EASEMENT SET FORTH IN EASEMENT AGREEMENT (ACCESS) FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGOCOUNTY ON DECEMBER 17, 2012, AS FILE NO. 2012- 0790636 OF OFFICIAL RECORDS.PARCEL C:EASEMENT SET FORTH IN EASEMENT AND ENCROACHMENT AGREEMENT (ACCESS AND UTILITY) FILED IN THE OFFICE OF THECOUNTY RECORDER OF SAN DIEGO COUNTY ON DECEMBER 17, 2012, AS FILE NO. 2012-0790637 OF OFFICIAL RECORDS.PARCEL D:EASEMENTS IN ARTICLE 8 OF DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR TORREY PINES SCIENCECENTER [UNIT 2], RECORDED JUNE 27, 1994 AS DOCUMENT NO. 1994-405385.TRACT II:PARCEL A:PARCEL 1 OF PARCEL MAP NO. 19102, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THEOFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 15, 2002 AS FILE NO. 2002-1027004.PARCEL B:AN EASEMENT FOR ACCESS, INGRESS AND EGRESS, AND UNDERGROUND UTILITIES, OVER, UNDER, ALONG AND ACROSS ANDTHROUGH THAT PORTION OF PARCEL 3 OF PARCEL MAP NO. 17448, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OFCALIFORNIA, AS GRANTED AND DESCRIBED IN THAT CERTAIN “GRANT OF EASEMENT” RECORDED DECEMBER 15, 1994 ASINSTRUMENT NO. 1994-0714126 OF OFFICIAL RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 3; THENCE ALONG THE BOUNDARY OF SAID PARCEL 3 SOUTH 09° 57’ 23”EAST 100.00.FEET; THENCE NORTH 52° 20’ 03” WEST 43.04 FEET; THENCE CONTINUING ALONG SAID BOUNDARY AND APROLONGATION THEREOF NORTH 85° 10’ 39” WEST 226.16 FEET; THENCE NORTH 04° 49’ 21” EAST 50.00 FEET TO THE NORTH LINEOF SAID PARCEL 3; THENCE ALONG SAID NORTH LINE SOUTH 85° 10’ 39” EAST 212.97 FEET TO AN ANGLE POINT THEREIN; THENCECONTINUING ALONG SAID NORTH LINE NORTH 50° 24’ 56” EAST 33.37 FEET TO THE POINT OF BEGINNING.PARCEL C:EASEMENTS IN ARTICLE 8 OF DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR TORREY PINES SCIENCECENTER [UNIT 2], RECORDED JUNE 27, 1994 AS DOCUMENT NO. 1994-405385. 10628 Science Center /Arcturus - Page 2 TRACT III:PARCEL A:PARCEL 2 OF PARCEL MAP NO. 19142 IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THEOFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JANUARY 24, 2003.PARCEL B:EASEMENT SET FORTH IN EASEMENT AGREEMENT (STORM DRAINAGE), RECORDED AUGUST 16, 2012, AS INSTRUMENT NO. 2012-0488328 OF OFFICIAL RECORDS.PARCEL C:EASEMENT SET FORTH IN EASEMENT AND ENCROACHMENT AGREEMENT, RECORDED AUGUST 16, 2012, AS INSTRUMENT NO. 2012-0488330 OF OFFICIAL RECORDS.PARCEL D:EASEMENT SET FORTH IN EASEMENT AND ENCROACHMENT AGREEMENT (ACCESS AND UTILITY), RECORDED DECEMBER 17, 2012,AS INSTRUMENT NO. 2012-0790637 OF OFFICIAL RECORDS.PARCEL E:EASEMENTS IN ARTICLE 8 OF DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR TORREY PINES SCIENCECENTER [UNIT 2], RECORDED JUNE 27, 1994 AS DOCUMENT NO. 1994-0405385.APN: 340-180-35-00 and 340-180-34-00 and 340-180-36-00 10628 Science Center /Arcturus - Page 1 EXHIBIT C TO LEASEWORK LETTERTHIS WORK LETTER dated October 4, 2017 (this “Work Letter”) is made and entered into by and between ARE-SD REGION NO. 44,LLC, a Delaware limited liability company (“Landlord”), and ARCTURUS THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and isattached to and made a part of the Lease Agreement dated October 4, 2017 (the “Lease”), by and between Landlord and Tenant. Any initiallycapitalized terms used but not defined herein shall have the meanings given them in the Lease.1.General Requirements.(a)Tenant’s Authorized Representative. Tenant designates Jennifer Perkins (“Tenant’s Representative”) as the only personauthorized to act for Tenant pursuant to this Work Letter. Landlord shall not be obligated to respond to or act upon any request, approval, inquiryor other communication (“Communication”) from or on behalf of Tenant in connection with this Work Letter unless such Communication is inwriting from Tenant’s Representative. Tenant may change Tenant’s Representative at any time upon not less than 5 business days advancewritten notice to Landlord. Neither Tenant nor Tenant’s Representative shall be authorized to direct Landlord’s contractors in the performance ofLandlord’s Work (as hereinafter defined).(b)Landlord designates Michael Harrison and John Kavanagh (either such individual acting alone, “Landlord’s Representative”)as the only persons authorized to act for Landlord pursuant to this Work Letter. Tenant shall not be obligated to respond to or act upon anyrequest, approval, inquiry or other Communication from or on behalf of Landlord in connection with this Work Letter unless such Communication isin writing from Landlord’s Representative. Landlord may change either Landlord’s Representative at any time upon not less than 5 business daysadvance written notice to Tenant. Landlord’s Representative shall be the sole persons authorized to direct Landlord’s contractors in theperformance of Landlord’s Work.(c)Architects, Consultants and Contractors. Landlord and Tenant hereby acknowledge and agree that: (i) the generalcontractor and any subcontractors for the Tenant Improvements shall be selected by Landlord, subject to Tenant’s approval, which approval shallnot be unreasonably withheld, conditioned or delayed, and (ii) Dowler Gruman Architects shall be the architect (the “TI Architect”) for the TenantImprovements. 2.Tenant Improvements.(a)Tenant Improvements Defined. As used herein, “Tenant Improvements” shall mean all improvements to the Premises ofa fixed and permanent nature as shown on the TI Construction Drawings, as defined in Section 2(c) below, which shall be constructed usingfinishes comparable to the finishes of the improvements in the premises occupied by Tenant at the Project as of the date of the Lease. Otherthan Landlord’s Work (as defined in Section 3(a) below), Landlord shall not have any obligation whatsoever with respect to the finishing of thePremises for Tenant’s use and occupancy.(b)Tenant’s Space Plans. Landlord and Tenant acknowledge and agree that the plan prepared by the TI Architect attachedhereto as Annex 1 (the “Space Plans”) and the scope of work attached hereto as Annex 2 (the “Scope of Work”) have been approved by bothLandlord and Tenant. Landlord and Tenant further acknowledge and agree that any changes to the Space Plans or the Scope of Work requestedby Tenant constitute a Change Request the cost of which changes shall be paid for by Tenant. Tenant shall be solely responsible for all costsincurred by Landlord to alter the Building (or Landlord’s plans for the Building) as a result of Tenant’s requested changes. 10628 Science Center /Arcturus - Page 2 (c)Working Drawings. Landlord shall cause the TI Architect to prepare and deliver to Tenant for review and commentconstruction plans, specifications and drawings for the Tenant Improvements (“TI Construction Drawings”), which TI Construction Drawings shallbe prepared substantially in accordance with the Space Plans. Tenant shall be solely responsible for ensuring that the TI Construction Drawingsreflect Tenant’s requirements for the Tenant Improvements. Tenant shall deliver its written comments on the TI Construction Drawings to Landlordnot later than 10 business days after Tenant’s receipt of the same; provided, however, that Tenant may not disapprove any matter that isconsistent with the Space Plans without submitting a Change Request. Landlord and the TI Architect shall consider all such comments in goodfaith and shall, within 10 business days after receipt, notify Tenant how Landlord proposes to respond to such comments, but Tenant’s reviewrights pursuant to the foregoing sentence shall not delay the design or construction schedule for the Tenant Improvements. Any disputes inconnection with such comments shall be resolved in accordance with Section 2(d) hereof. Provided that the design reflected in the TIConstruction Drawings is consistent with the Space Plans, Tenant shall approve the TI Construction Drawings submitted by Landlord, unlessTenant submits a Change Request. Once approved by Tenant, subject to the provisions of Section 4 below, Landlord shall not materially modifythe TI Construction Drawings except as may be reasonably required in connection with the issuance of the TI Permit (as defined in Section 3(b)below).(d)Approval and Completion. It is hereby acknowledged by Landlord and Tenant that the TI Construction Drawings must becompleted and approved not later than October 18, 2017, in order for the Landlord’s Work to be Substantially Complete by the TargetCommencement Date (as defined in the Lease). Upon any dispute regarding the design of the Tenant Improvements, which is not settled within 10business days after notice of such dispute is delivered by one party to the other, Tenant may make the final decision regarding the design of theTenant Improvements, provided (i) Tenant acts reasonably and such final decision is either consistent with or a compromise between Landlord’sand Tenant’s positions with respect to such dispute, (ii) that all costs and expenses resulting from any such decision by Tenant shall be payableby Tenant, and (iii) Tenant’s decision will not affect the base Building, structural components of the Building or any Building Systems. Anychanges to the TI Construction Drawings following Landlord’s and Tenant’s approval of same requested by Tenant shall be processed as providedin Section 4 hereof.3.Performance of Landlord’s Work.(a)Definition of Landlord’s Work. As used herein, “Landlord’s Work” shall mean the work of constructing the TenantImprovements.Tenant shall be solely responsible for ensuring that the design and specifications for Landlord’s Work are consistent with Tenant’srequirements. Landlord shall be responsible for obtaining all permits, approvals and entitlements necessary for Landlord’s Work, but shall have noobligation to, and shall not, secure any permits, approvals or entitlements related to Tenant’s specific use of the Premises or Tenant’s businessoperations therein.(b)Commencement and Permitting. Landlord shall commence construction of the Tenant Improvements upon obtaining abuilding permit (the “TI Permit”) authorizing the construction of the Tenant Improvements consistent with the TI Construction Drawings approvedby Tenant. The cost of obtaining the TI Permit shall be payable by Landlord. Tenant shall, at no additional cost to Tenant, cooperate withLandlord in obtaining the TI Permit. If any Governmental Authority having jurisdiction over the construction of Landlord’s Work or any portionthereof shall impose terms or conditions upon the construction thereof that: (i) are inconsistent with Landlord’s obligations hereunder, (ii) increasethe cost of constructing Landlord’s Work, or (iii) will materially delay the construction of Landlord’s Work, Landlord and Tenant shall reasonably andin good faith seek means by which to mitigate or eliminate any such adverse terms and conditions.(c)Completion of Landlord’s Work. Landlord shall substantially complete or cause to be substantially completed Landlord’sWork in a good and workmanlike manner, in accordance with the TI Permit subject, in each case, to Minor Variations and normal “punch list” itemsof a non-material nature 10628 Science Center /Arcturus - Page 3 that do not interfere with the use of the Premises (“Substantial Completion” or “Substantially Complete”). Upon Substantial Completion ofLandlord’s Work, Landlord shall require the TI Architect and the general contractor to execute and deliver, for the benefit of Tenant and Landlord, aCertificate of Substantial Completion in the form of the American Institute of Architects (“AIA”) document G704. For purposes of this Work Letter,“Minor Variations” shall mean any modifications reasonably required: (i) to comply with all applicable Legal Requirements and/or to obtain or tocomply with any required permit (including the TI Permit); (ii) to comply with any request by Tenant for modifications to Landlord’s Work; (iii) tocomport with good design, engineering, and construction practices that are not material; or (iv) to make reasonable adjustments for field deviationsor conditions encountered during the construction of Landlord’s Work. (d)Selection of Materials. Where more than one type of material or structure is indicated on the TI Construction Drawingsapproved by Landlord and Tenant, the option will be selected at Landlord’s reasonable discretion after reasonable consultation with Tenant. As toall building materials and equipment that Landlord is obligated to supply under this Work Letter, Landlord shall select the manufacturer thereof in itsreasonable discretion.(e)Delivery of the Premises. When Landlord’s Work is Substantially Complete, subject to the remaining terms and provisionsof this Section 3(e), Tenant shall accept the Premises. Tenant’s taking possession and acceptance of the Premises shall not constitute a waiverof: (i) any warranty with respect to workmanship (including installation of equipment) or material (exclusive of equipment provided directly bymanufacturers), (ii) any non-compliance of Landlord’s Work with applicable Legal Requirements, or (iii) any claim that Landlord’s Work was notcompleted substantially in accordance with the TI Construction Drawings (subject to Minor Variations and such other changes as are permittedhereunder) (collectively, a “Construction Defect”). Tenant shall have one year after Substantial Completion within which to notify Landlord of anysuch Construction Defect discovered by Tenant, and Landlord shall use reasonable efforts to remedy or cause the responsible contractor toremedy any such Construction Defect within 30 days thereafter. Notwithstanding the foregoing, Landlord shall not be in default under the Lease ifthe applicable contractor, despite Landlord’s reasonable efforts, fails to remedy such Construction Defect within such 30-day period. If thecontractor fails to remedy such Construction Defect within a reasonable time, Landlord shall use reasonable efforts to remedy the ConstructionDefect within 30 days unless such Construction Defect cannot reasonably be remedied in 30 days in which case Landlord shall thereafter continueto diligently pursue such remedy.Tenant shall be entitled to receive the benefit of all construction warranties and manufacturer’s equipment warranties relating to equipment installedin the Premises. If requested by Tenant, Landlord shall attempt to obtain extended warranties from manufacturers and suppliers of suchequipment, but the cost of any such extended warranties shall be borne solely by Tenant. Landlord shall promptly undertake and complete, orcause to be completed, all punch list items, which Landlord shall endeavor to complete within 30 days of Substantial Completion.(f)Commencement Date Delay. Except as otherwise provided in the Lease, Delivery of the Premises shall occur whenLandlord’s Work has been Substantially Completed, except to the extent that completion of Landlord’s Work shall have been actually delayed byany one or more of the following causes (“Tenant Delay”):(i)Tenant’s Representative was not available within 2 business days following Landlord’s written notice to give orreceive any Communication or to take any other action required to be taken by Tenant hereunder;(ii)Tenant’s request for Change Requests (as defined in Section 4(a) below) whether or not any such ChangeRequests are actually performed;(iii)Construction of any Change Requests; 10628 Science Center /Arcturus - Page 4 (iv)Tenant’s request for materials, finishes or installations requiring unusually long lead times, provided thatpromptly after Landlord learns of such long lead times, Landlord informs Tenant that the requested items will required unusually longlead times;(v)Tenant’s delay in reviewing, revising or approving plans and specifications beyond the periods set forth herein;(vi)Tenant’s delay in providing information critical to the normal progression of the Project. Tenant shall providesuch information as soon as reasonably possible, but in no event longer than one week after receipt of any request for such informationfrom Landlord;(vii)Tenant’s delay in making payments to Landlord for Excess TI Costs (as defined in Section 5(d) below); or(viii)Any other act or omission by Tenant or any Tenant Party (as defined in the Lease), or persons employed byany of such persons that continues for more than 1 business day after Landlord’s written notice thereof to Tenant.If Delivery is delayed for any of the foregoing reasons, then Landlord shall cause the TI Architect to certify the date on which the TenantImprovements would have been completed but for such Tenant Delay and such certified date shall be the date of Delivery.4.Changes. Any changes requested by Tenant to the Tenant Improvements after the approval by Landlord and Tenant of theSpace Plans and Scope of Work shall be requested and instituted in accordance with the provisions of this Section 4 and shall be subject to thewritten approval of Landlord and the TI Architect, such approval not to be unreasonably withheld, conditioned or delayed.(a)Tenant’s Request For Changes. If Tenant shall request changes to the Tenant Improvements (“Changes”), Tenant shallrequest such Changes by notifying Landlord in writing in substantially the same form as the AIA standard change order form (a “ChangeRequest”), which Change Request shall detail the nature and extent of any such Change. Such Change Request must be signed by Tenant’sRepresentative. Landlord shall, before proceeding with any Change, use commercially reasonable efforts to respond to Tenant as soon as isreasonably possible with an estimate of: (i) the time it will take, and (ii) the architectural and engineering fees and costs that will be incurred, toanalyze such Change Request (which costs shall be paid for by Tenant to the extent actually incurred, whether or not such change isimplemented). Landlord shall thereafter submit to Tenant in writing, within 5 business days of receipt of the Change Request (or such longer periodof time as is reasonably required depending on the extent of the Change Request), an analysis of the additional cost or savings involved,including, without limitation, architectural and engineering costs and the period of time, if any, that the Change will extend the date on whichLandlord’s Work will be Substantially Complete. Any such delay in the completion of Landlord’s Work caused by a Change, including anysuspension of Landlord’s Work while any such Change is being evaluated and/or designed, shall be Tenant Delay.(b)Implementation of Changes. If Tenant: (i) approves in writing the cost or savings and the estimated extension in the timefor completion of Landlord’s Work, if any, and (ii) deposits with Landlord any Excess TI Costs required in connection with such Change, Landlordshall cause the approved Change to be instituted. Notwithstanding any approval or disapproval by Tenant of any estimate of the delay caused bysuch proposed Change, the TI Architect’s determination of the amount of Tenant Delay in connection with such Change shall be final and bindingon Landlord and Tenant.5.Costs.(a)TI Costs. Landlord shall be responsible for the payment of design, permits and construction costs in connection with theconstruction of the Tenant Improvements, including, without limitation, the cost of preparing the TI Construction Drawings and the Space Plansand Landlord’s out-of- 10628 Science Center /Arcturus - Page 5 pocket expenses (collectively, “TI Costs”). Notwithstanding anything to the contrary contained herein, except as otherwise expressly provided inthe Lease, TI Costs shall not include (and Landlord shall not be responsible for the cost of) furniture, personal property or other non-Buildingsystem materials or equipment, including, but not limited to, Tenant’s voice or data cabling, non-ducted biological safety cabinets and otherscientific equipment not incorporated into the Tenant Improvements.(b)Excess TI Costs. Notwithstanding anything to the contrary contained herein, Tenant acknowledges and agrees thatLandlord shall have no responsibility for any costs arising from or related to Tenant’s changes to the Space Plans or TI Construction Drawings,Tenant Delays, the cost of Changes and Change Requests which would increase any of the costs anticipated by Landlord for Landlord’s Work(collectively, “Excess TI Costs”). Landlord shall provide Tenant with the line-item amount of any Excess TI Costs incurred along with reasonablesupporting evidence but, for the avoidance of any doubt, in no event shall Landlord be required to provide Tenant with its budget for Landlord’sWork. Tenant shall deposit with Landlord, as a condition precedent to Landlord’s obligation to complete the Tenant Improvements, 100% of theExcess TI Costs with respect to which Tenant has not elected to apply the Excess TI Costs Allowance or that exceed the Excess TI CostsAllowance. If Tenant fails to deposit such Excess TI Costs with Landlord, Landlord shall have all of the rights and remedies set forth in the Leasefor nonpayment of Rent (including, but not limited to, the right to interest at the Default Rate and the right to assess a late charge). For purposesof any litigation instituted with regard to such amounts, those amounts will be deemed Rent under the Lease.(c)Excess TI Costs Allowance. Landlord shall provide to Tenant an “Excess TI Costs Allowance” in the maximum amount of$20.00 per rentable square foot of the Premises, or $494,100 in the aggregate, which shall, to the extent used, result in Additional Rent as set forthin Section 4(b) of the Lease. The Excess Costs Allowance may be used only for the payment of Excess TI Costs.(d)Allowance. Landlord shall make available to Tenant an allowance of up to $3.00 per rentable square foot of the Premises,or $74,115.00 in the aggregate (the “Allowance”) for the costs of Tenant’s cabling, Tenant’s signage and the cost of other items reasonablyacceptable to Landlord (“Acceptable Items”). Landlord shall reimburse Tenant for the actual reasonable cost of Acceptable Items within 30 daysafter Tenant’s delivery to Landlord of invoices and other evidence reasonably requested by Landlord reflecting the actual reasonable costs incurredby Tenant for such Acceptable Items. The Allowance shall only be available for use by Tenant for costs incurred by Tenant for Acceptable Itemsduring the period commencing on the execution date of the Lease through the date that is 90 days after the Commencement Date (such period, the“Allowance Reimbursement Period”). Any portion of the Allowance with respect to which Landlord has not received an invoice (and/or otherevidence reasonably requested by Landlord) within 90 days after the Allowance Reimbursement Period for costs incurred during the AllowanceReimbursement Period shall be forfeited and shall not be available for use by Tenant.6.Tenant Access.(a)Tenant’s Access Rights. Landlord hereby agrees to permit Tenant access, at Tenant’s sole risk and expense, to theBuilding (i) 30 days prior to the Commencement Date to perform any work (“Tenant’s Work”) required by Tenant other than Landlord’s Work,provided that such Tenant’s Work is coordinated with the TI Architect and the general contractor, and complies with the Lease and all otherreasonable restrictions and conditions Landlord may impose, and (ii) prior to the completion of Landlord’s Work, to inspect and observe work inprocess; all such access shall be during normal business hours or at such other times as are reasonably designated by Landlord. Notwithstandingthe foregoing, Tenant shall have no right to enter onto the Premises or the Project unless and until Tenant shall deliver to Landlord evidencereasonably satisfactory to Landlord demonstrating that any insurance reasonably required by Landlord in connection with such pre-commencementaccess (including, but not limited to, any insurance that Landlord may require pursuant to the Lease) is in full force and effect. Any entry byTenant shall comply with all established safety practices of Landlord’s contractor and Landlord until completion of Landlord’s Work and acceptancethereof by Tenant. 10628 Science Center /Arcturus - Page 6 (b)No Interference. Neither Tenant nor any Tenant Party (as defined in the Lease) shall interfere with the performance ofLandlord’s Work, nor with any inspections or issuance of final approvals by applicable Governmental Authorities, and upon any such interference,Landlord shall have the right to exclude Tenant and any Tenant Party from the portions of the Premises in which the Tenant Improvements arebeing constructed until Substantial Completion of Landlord’s Work.(c)No Acceptance of Premises. The fact that Tenant may, with Landlord’s consent, enter into the Project prior to the dateLandlord’s Work is Substantially Complete for the purpose of performing Tenant’s Work shall not be deemed an acceptance by Tenant ofpossession of the Premises, but in such event Tenant shall defend with counsel reasonably acceptable by Landlord, indemnify and hold Landlordharmless from and against any loss of or damage to Tenant’s property, completed work, fixtures, equipment, materials or merchandise, and fromliability for death of, or injury to, any person, caused by the act or omission of Tenant or any Tenant Party.7.Miscellaneous.(a)Consents. Whenever consent or approval of either party is required under this Work Letter, that party shall notunreasonably withhold, condition or delay such consent or approval, unless expressly set forth herein to the contrary.(b)Modification. No modification, waiver or amendment of this Work Letter or of any of its conditions or provisions shall bebinding upon Landlord or Tenant unless in writing signed by Landlord and Tenant.(c)No Default Funding. In no event shall Landlord have any obligation perform any Landlord’s Work during any period thatTenant is in Default under the Lease. 10628 Science Center /Arcturus - Page 7 Annex 1Space Plans 10628 Science Center /Arcturus - Page 8 Annex 2Scope of WorkGENERAL BASE BUILDING INFORMATION 1)Project:24,705 square feet 2)Buildings / Stories:One (1) Building: 10628 Science Center Drive, San Diego CALevel 2 - 24,705 SF (Lab / Office)Multi-Tenant Building 3)Construction Type:Type II B, Fully Sprinklered 4)Parking:Surface Parking and Two (2) Story Underground Parking. 5)Applicable Codes:California Building Code (CBC) California Electrical Code (CEC) California Mechanical Code (CMC) California Plumbing Code (CPC) California Fire Code (CFC) California Energy Code (CEC) California Green Building Standards Code (GBC) Accessibility Regulations as Prescribed by the 2013 California Building Code Americans with Disabilities Act Guidelines (ADA) All Codes and Ordinances Adopted by the City of San Diego 6)Landlord shall be responsible for securing all applicable design, engineering, permits and approvals required for the tenant improvementscope of work. 7)LANDLORD WORK PLANS for BASE SPEC SUITESITE WORK / BUILDING EXTERIOR / GENERAL 1.Exterior building facade and or shaft work to support new elevator. 2.New restroom finishes and accessibility modifications. 3.Existing and New supply air and exhaust air distribution systems. 4.Laboratory air compressor and vacuum pump systems are provided as part of the house systems. 5.Electrical infrastructure and SDGE Meters to support multitenant lab/office/campus use 6.Standby generator and transfer switches to support tenant improvements as identified in electrical scope. 10628 Science Center /Arcturus - Page 9 STRUCTURAL SYSTEMS 1.All structural supports required for base building equipment.MOITURE AND THERMAL PROTECTION 1.Kraft faced batt insulation at all non-glass exterior walls and rigid insulation at spandrel glass conditions.STAIR / LOBBY / RESTROOMS / OTHER 1.Existing Level Two restrooms to be removed and new restroom fixtures, finishes and accessibility installed within tenant improvementarea. Toilet and urinal count per floor to meet TI intended occupancy requirements. 2.New interior lobby finishes, mechanical, LED lighting and reception desk per spec suite. Reception to have power and data. 3.New elevator lobby finishes on level two to match tenant improvement finishes. 4.Updated stairwell finishes to match building standards defined by landlord. 5.Security - (3) exterior suite openings prepared for security hardware for tenant’s security vendor to trim-out, cable and program intotenant's security system. 6.Code compliant interior signage, all other by tenant.FINISHESCeilings 1.Acoustical (ACT) lab grade ceilings in laboratory areas. 2.Drywall hard-lid paintable ceilings at break rooms. 3.Drywall hard-lid soffit/ceiling allowance for lobby area. 4.Acoustical office grade (ACT) ceilings at office and conference rooms. 5.Exposed ceilings to structural at work station and common areas.Walls Finish 1.General latex wall paint in lobby, offices, conference rooms and laboratory areas. 2.Vivarium area to included cleanable paint surfaces.Flooring 1.Laboratory areas have VCT tile with rubber base. 2.Lunchroom to have premium LVT. 3.Office and conference rooms to have carpet tile flooring. 4.Lobby flooring to be upgraded, flooring to be finalized with finishes. 5.Main circulation corridor to have polished exposed concrete.Glazing 1.Storefront glazing system at entry. 2.Re-Use of Building 1 glazing system between lab and office area or equal. 3.Glazed wall systems at office fronts.Millwork 1.Custom lobby desk. 10628 Science Center /Arcturus - Page 10 2.Plastic laminate cabinets and drawers at lobby and lunch room.Lab casework 1.Laboratory casework base cabinets, reagent shelving and trespa or equal tops relocated from Building 1. CONVEYING SYSTEMS 1.New 4,0001b lab service elevator (Machine Room and elevator), with door opening of 4’- 0” wide.Elevator cab finish to be brushed stainless steel walls and ceiling. 2.Elevator and structural systems to be permitted and delivered under separate permit from general tenant improvement permit. 3.Sound insulation at elevator hoistways. SPECIALTY EQUIPMENT 1.None HVAC SYSTEMSLaboratory 1.Exiting laboratory air handling unit, 100% outside air for laboratory only. 2.Re-use of existing duct risers and mains. 3.Option for Re-use of existing laboratory exhaust fan system and new supplemental exhaust fan systems. 4.Building Automation System connected to existing system. Office 1.Fan coils units to support office area. 2.Building Automation System connected to existing system. Other 1.Electrical and mechanical room ventilation as needed. 2.Lobby and general open collaborator areas to be conditioned with existing or new house system. PLUMBING 1.Water and sewer services of adequate size to support the building type. 2.Sanitary sewer, waste and vent lines associated with toilet rooms and house mechanical systems included. 3.Water systems (ICW, IHW, DCW, DHW,) distributed to associated equipment as needed. 4.Laboratory air compressor and laboratory vacuum distributed. 5.DI water system by tenant. 6.Gases not identified will be fed from point of use cylinders maintained by tenant. 7.Condensate drains for HVAC equipment and plumbing equipment runs to nearest indirect waste receptor. 10628 Science Center /Arcturus - Page 11 FIRE PROTECTION / FIRE PROOFING 1.Full building fire sprinkler system sized to meet building type and density. System includes vertical and horizontal distribution per TItest fit and to allow for final modifications. 2.Fully functional fire alarm system to support TI, elevator monitoring and fire protection flow switches. 3.Fireproofing and horizontal fire separations to include structural fire proofing if needed and firesafing as required to comply withBuilding Type. ELECTRICAL SYSTEMS 1.Primary service 4,000A for overall building. Distribution 1.Existing electrical room to be relocated with new or relocated panelboards and transformers to support 277/480Volt service asneeded for power devices, equipment and lighting. 2.Power devices for laboratory, office, lobby and conference rooms. 3.New elevator to be installed and fed from house metered panel boards (under separate permit). 4.New IDF riser room located on Level 2. Tenant to extend existing or new service from the building MPOE to IDF room. IDF/Serverroom build-out, structured cabling, security & CCTV cabling by tenant. 5.Tele/data ring and string for laboratory and office areas. Conduit pathway for Level Two and IDF access. 6.Single gang box for tenant card access control system. Lighting 7.New LED lighting at laboratory, office, restrooms and conferencing areas. Upgraded recessed LED lighting at lobby and conferenceroom. 8.New Title 24 compliant lighting control system. 8)LANDLORD WORK PLANS for ARCTURUS ADJUSTED TENANT IMPROVEMENTBUILDING INTERIOR / GENERAL WORK AREAS 1.Current Spec Suite has shell space with proposed Tenant Improvements to include Vivarium, receiving areas and laboratory supportrooms as further identified within this document. 2.Tenant Improvements include (1) boardroom. 3.Existing and New supply air and exhaust air distribution systems. 4.Laboratory air compressor and vacuum pump systems are provided as part of the house systems and included with (3) additionalfixed lab benches to be located within the laboratory. 5.Electrical infrastructure and SDGE Meters to support multitenant lab/office/campus use. 10628 Science Center /Arcturus - Page 12 STRUCTURAL SYSTEMS 1.All structural supports required for base building equipment.MOITURE AND THERMAL PROTECTION1.Kraft faced batt insulation at all non-glass exterior walls and rigid insulation at spandrel glass conditions. GENERAL / OTHER 1.Security - (3) interior doors and openings prepared for security hardware for tenant’s security vendor to trim-out, cable and program intotenant’s security system. 2.Code compliant interior signage, all other by tenant. FINISHESCeilings 1.Acoustical (ACT) lab grade ceilings in laboratory and lab support rooms.2.Drywall hard-lid paintable ceilings in Vivarium rooms only. Walls Finish 1.General latex wall paint in conference rooms and laboratory support areas.2.Vivarium area to included cleanable paint surfaces. Flooring 1.Laboratory and Laboratory Support areas have VCT tile with rubber base.2.Vivarium rooms have solid color epoxy coating with integral cove base. 3.Boardroom room to have carpet tile flooring. Glazing 1.Storefront glazing at partial boardroom. Millwork 1.None, See Spec Suite for areas included. Lab Casework 2.Laboratory casework base cabinets, reagent shelving and trespa or equal tops relocated from Building 1. 3.Stainless steel benches by tenant. CONVEYING SYSTEMS 1.None, See Spec Suite for areas included. SPECIALTY EQUIPMENT 1.Environmentally controlled cold room. 10628 Science Center /Arcturus - Page 13 HVAC SYSTEMSLaboratory 1.Exiting laboratory air handling unit, 100% outside air for laboratory only. 2.Re-use of existing duct risers and mains. 3.Option for re-use of existing laboratory exhaust fan system and new supplemental in-line exhaust fan systems. 4.Building Automation System connected to existing system. PLUMBING 1.Water and sewer services of adequate size to support the building type. 2.Sanitary sewer, waste and vent lines associated with toilet rooms and house mechanical systems included. 3.Water systems (ICW, IHW, DCW, DHW,) distributed to associated equipment as needed. 4.Laboratory air compressor and laboratory vacuum distributed at lab benches. 5.DI water system by tenant. (2) Point of use under counter water polishing units. 6.(1) N2 manifold and piping distribution to three lab benches. 7.O2 and other gases not identified will be fed from point of use cylinders maintained by tenant. 8.Condensate drains for HVAC equipment and plumbing equipment runs to nearest indirect waste receptor. FIRE PROTECTION / FIRE PROOFING 1.Full building fire sprinkler system sized to meet building type and density. System includes vertical and horizontal distribution per TItest fit and to allow for final modifications. 2.Fully functional fire alarm system to support TI, elevator monitoring and fire protection flow switches. 3.Fireproofing and horizontal fire separations to include structural fire proofing if needed and firesafing as required to comply with BuildingType. ELECTRICAL SYSTEMS 1.Primary service 4,000A for overall building. Distribution 1.Power devices for laboratory general and specified equipment, office, lobby and conference rooms. 2.Standby power to cold room, -20 & -80 Freezers, Incubators. 3.New IDF riser room located on Level 2. Tenant to extend existing or new service from the building MPOE to IDF room. IDF/Server roombuild-out, structured cabling, security & CCTV cabling by tenant. 4.Tele/data ring and string for laboratory and office areas. Conduit pathway for Level Two and IDF access. 5.Single gang box for tenant card access control system. Lighting 1.New LED lighting at laboratory, vivarium and conferencing areas. 2.New Title 24 compliant lighting control system. 10628 Science Center /Arcturus - Page 1 EXHIBIT D TO LEASEACKNOWLEDGMENT OF COMMENCEMENT DATEThis ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this _____ day of ______________, ____, between ARE-SDREGION NO. 44, LLC, a Delaware limited liability company (“Landlord”), and ARCTURUS THERAPEUTICS, INC., a Delaware corporation(“Tenant”), and is attached to and made a part of the Lease dated ______________, _____ (the “Lease”), by and between Landlord andTenant. Any initially capitalized terms used but not defined herein shall have the meanings given them in the Lease.Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the Commencement Date of the Base Term ofthe Lease is ______________, _____, and the termination date of the Base Term of the Lease shall be midnight on ______________, _____. Incase of a conflict between the terms of the Lease and the terms of this Acknowledgment of Commencement Date, this Acknowledgment ofCommencement Date shall control for all purposes.IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF COMMENCEMENT DATE to beeffective on the date first above written. TENANT: ARCTURUS THERAPEUTICS, INC.,a Delaware corporation By: Its: LANDLORD: ARE-SD REGION NO. 44, LLC,a Delaware limited liability company By: ALEXANDRIA REAL ESTATE EQUITIES, L.P., a Delaware limited partnership, managing member By: ARE-QRS CORP., a Maryland corporation,general partner By: Its: Rules and Regulations10628 Science Center /Arcturus - Page 1 EXHIBIT E TO LEASERules and Regulations1.The sidewalk, entries, and driveways of the Project shall not be obstructed by Tenant, or any Tenant Party, or used by themfor any purpose other than ingress and egress to and from the Premises.2.Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the parking areas, landscaped areas orother areas outside of its Premises, or on the roof of the Project.3.Except for animals assisting the disabled, no animals shall be allowed in the offices, halls, or corridors in the Project.4.Tenant shall not disturb the occupants of the Project or adjoining buildings by the use of any radio or musical instrument orby the making of loud or improper noises.5.If Tenant desires telegraphic, telephonic or other electric connections in the Premises, Landlord or its agent will direct theelectrician as to where and how the wires may be introduced; and, without such direction, no boring or cutting of wires will be permitted. Any suchinstallation or connection shall be made at Tenant’s expense.6.Tenant shall not install or operate any steam or gas engine or boiler, or other mechanical apparatus in the Premises, exceptas specifically approved in the Lease. The use of oil, gas or inflammable liquids for heating, lighting or any other purpose is expresslyprohibited. Explosives or other articles deemed extra hazardous shall not be brought into the Project.7.Parking any type of recreational vehicles is specifically prohibited on or about the Project. Except for the overnight parkingof operative vehicles, no vehicle of any type shall be stored in the parking areas at any time. In the event that a vehicle is disabled, it shall beremoved within 48 hours. There shall be no “For Sale” or other advertising signs on or about any parked vehicle. All vehicles shall be parked inthe designated parking areas in conformity with all signs and other markings. All parking will be open parking, and no reserved parking, numberingor lettering of individual spaces will be permitted except as specified by Landlord.8.Tenant shall maintain the Premises free from rodents, insects and other pests.9.Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated orunder the influence of liquor or drugs or who shall in any manner do any act in violation of the Rules and Regulations of the Project.10.Tenant shall not cause any unnecessary labor by reason of Tenant’s carelessness or indifference in the preservation ofgood order and cleanliness. Landlord shall not be responsible to Tenant for any loss of property on the Premises, however occurring, or for anydamage done to the effects of Tenant by the janitors or any other employee or person.11.Tenant shall give Landlord prompt notice of any defects in the water, lawn sprinkler, sewage, gas pipes, electrical lights andfixtures, heating apparatus, or any other service equipment affecting the Premises.12.Tenant shall not permit storage outside the Premises, including without limitation, outside storage of trucks and othervehicles, or dumping of waste or refuse or permit any harmful materials to be placed in any drainage system or sanitary system in or about thePremises. Rules and Regulations10628 Science Center /Arcturus - Page 2 13.All moveable trash receptacles provided by the trash disposal firm for the Premises must be kept in the trash enclosureareas, if any, provided for that purpose.14.No auction, public or private, will be permitted on the Premises or the Project.15.No awnings shall be placed over the windows in the Premises except with the prior written consent of Landlord.16.The Premises shall not be used for lodging, sleeping or cooking or for any immoral or illegal purposes or for any purposeother than that specified in the Lease. No gaming devices shall be operated in the Premises.17.Tenant shall ascertain from Landlord the maximum amount of electrical current which can safely be used in the Premises,taking into account the capacity of the electrical wiring in the Project and the Premises and the needs of other tenants, and shall not use morethan such safe capacity. Landlord’s consent to the installation of electric equipment shall not relieve Tenant from the obligation not to use moreelectricity than such safe capacity.18.Tenant assumes full responsibility for protecting the Premises from theft, robbery and pilferage.19.Tenant shall not install or operate on the Premises any machinery or mechanical devices of a nature not directly related toTenant’s ordinary use of the Premises and shall keep all such machinery free of vibration, noise and air waves which may be transmitted beyondthe Premises. 10628 Science Center /Arcturus - Page 1 EXHIBIT F TO LEASETENANT’S PERSONAL PROPERTYNone. 10628 Science Center /Arcturus - Page 1 EXHIBIT G TO LEASETENANT’S PERSONAL PROPERTY 10628 Science Center /Arcturus - Page 2 10628 Science Center /Arcturus - Page 3 10628 Science Center /Arcturus - Page 4 10628 Science Center /Arcturus - Page 1 EXHIBIT H TO LEASETENANT MAINTENANCE OBLIGATIONS Maintenance ResponsibilitiesARCTURUSARESharedRO/DI Lab Water✓ Air Compressors ✓ Vacuum Pumps ✓ Domestic backflow preventor certification - Industrial ✓ Domestic backflow preventor certification - Fire ✓ Elevators ✓ Elevator Phone Lines ✓ Fire Sprinkler System ✓ Fire Alarm System (and phone lines) ✓ Building HVAC1 ✓ Smoke Fire Dampers ✓ Security2✓ Access Controls✓ CCTV✓ Underground parking lot sweeping ✓ l/R Testing of electrical systems3 ✓Building Management System and Controls ✓ Monthly and Annual Generator Testing4 ✓ Type 2 Fuel Oil: Delivery ✓ Heating Hot Water ✓ Water Treatment ✓ External landscaping ✓ BMS for central plant, hot water and BTU Meters ✓ Pest Control - Exterior ✓ Pest Control - Interior✓ External Parking lot sweeping, painting, maintenance ✓ Eternal Project Security ✓ Parking & Garage Lot Lighting ✓ Outside lights and inverters ✓ Storm Drain Maintenance ✓ Roof: Annual Inspections ✓ Fire Extinguishers ✓ Emergency Showers✓ Parking Garage Roll-Up Doors ✓ Notes1Exhaust Fans, Chiller, Fan Coils, AHU2Arcturus responsible for interior premises3Coordinated4Coordinated Exhibit 4.7EXECUTION COPY ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2RESEARCH COLLABORATION AND LICENSE AGREEMENTBetweenArcturus Therapeutics, Inc.AndJanssen Pharmaceuticals, Inc. i EXECUTION COPY INDEX OF DEFINITIONS ADT35 FTE Rate39Affiliate34 GLP40After-Acquired Third Party IP35 Government Body40Agreement1 IND40Annual Budget5 Indemnifiable Losses31API35 Indemnitee31Arcturus1 Joint Know-How40Arcturus Delivery Technologies35 Joint Patent Right40Arcturus Indemnitee31 Joint Research Plan40Arcturus Know-How35 JPI1Arcturus Nonparty Claim29 JPI Indemnitee31Arcturus Patent Right35 JPI Licensed Technology40Arcturus Platform Technologies35 JPI Nonparty Claim29Arcturus Product-Specific Patent35 Know-How40Arcturus Technology36 Licensed Compound2Arcturus-Controlled Affiliate35 Licensed Product2Bankrupt Party34 Litigation Expense31Bankruptcy Event36 Loss31Bundled Product37 Materials41Business Day37 Milestone Amount12Calendar Quarter37 NA Therapeutic41Change of Control37 Net Sales41Combination Product38 Nonparty Claim31Commercially Reasonable Efforts38 Out-of-Pocket Expenses43Competitive Infringement38 Party(ies)1Confidential Information23 Patent Matters44Control38 Patent Right43Controlled Affiliate39 Person43Covering39 Phase 1 Study43Covers39 Phase 2 Study43Currency Hedge Rate39 Phase 3 Study43Demonstration of In Vivo Efficacy andSafety2 Proceeding31Prosecute and Maintain43Derived Information23 Prosecution and Maintenance43Development Candidates2 Publishing Party26Disclosing Party23 Recipient23Effective Date1 Regulatory Approval43Excluded Information23 Representative31Exploit39 Research Costs5FDA39 Research Program1Field39 Research Term44First Commercial Sale39 Selected NA Therapeutic44Force Majeure Event50 Selected NA Therapeutic List3FTE39 Tax(es)44ii Exhibit 4.7EXECUTION COPY ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2Third Party44 Total Budget5 Valid Claim44 iii EXECUTION COPY RESEARCH COLLABORATION AND LICENSE AGREEMENTThis research collaboration and license Agreement (this “Agreement”) is dated October 18, 2017 (the“Effective Date”), and is between Arcturus Therapeutics, Inc., a Delaware corporation (“Arcturus”), and JanssenPharmaceuticals, Inc., a Delaware corporation (“JPI”). Each of Arcturus and JPI may be referred to herein individually asa “Party” and collectively as the “Parties”.Arcturus is a biopharmaceutical company engaged in the business of identifying and developing NATherapeutics to prevent, treat, and diagnose diseases, including Hepatitis B, […***…]* and respiratory disease viruses.JPI is a pharmaceutical company engaged, in part, in the business of seeking regulatory approval of,manufacturing, and commercializing therapeutic agents around the world. As part of that business, it develops andcommercializes therapeutic agents to prevent, treat, and diagnose diseases, including Hepatitis B.Arcturus and JPI want to collaborate to identify and develop NA Therapeutics that prevent, treat or ameliorate(“treat”) certain specified infectious diseases, including in any event Hepatitis B, with discovery, development, fundingobligations, and ownership of related intellectual property being allocated among Arcturus and JPI, and JPI makingmilestone payments and royalty payments to Arcturus.The Parties therefore agree as follows:1RESEARCH1.1NA Therapeutics. During the Research Term, Arcturus shall use Commercially Reasonable Efforts (“CRE”) tocreate NA Therapeutics using Arcturus Technology that are intended to treat (a) Hepatitis B and, (b) at such timeas either of the options set forth in Section 4.2 is exercised by JPI, […***…] or the Respiratory Disease Viruses([…***…] and Respiratory Disease Viruses, each a “Option Disease Area” collectively the “Option DiseaseAreas”). Arcturus will further use CRE to develop NA Therapeutics that: (a) have In Vivo Efficacy and Safety;(b) target highly-conserved sequences of the known genomes of the target diseases; (c) have the least cross-reactivity with human genes (i.e., off-target effects); and (d) have the most potent potential therapeutic effect onthe target genome. 1.2Joint Research Plans. The research to be conducted during the Research Term (each, a “Research Program”)shall be conducted pursuant to the applicable Joint Research Plan. During the Research Term, the Parties shallcarry out the work assigned to them under the applicable Joint Research Plan.***Confidential Treatment Requested 1 EXECUTION COPY 1.3Amendments. The JRC may amend the Joint Research Plan in writing in accordance with this Agreement (orrecommend an amendment to the Parties), subject to Article 2. Any such amendments will be deemedincorporated in the Joint Research Plan Exhibit. The JRC must review the Joint Research Plan as necessary ateach meeting of the JRC and at any other time at the reasonable request of either Party and modify it asappropriate to reflect scientific and other developments. Each Party will promptly inform the other Party (via theJRC or the JRC chairpersons, including by email) upon becoming aware of any circumstances that such Partybelieves are likely to require an amendment to the Joint Research Plan or Annual Budget and the JRC will thenpromptly convene a meeting to decide the matter.1.4Demonstration of Efficacy. Arcturus shall promptly deliver to the JRC data and information it generatespursuant to a Research Program demonstrating that an applicable NA Therapeutic has demonstrated In VivoEfficacy and Safety (as defined in the applicable Joint Research Plan describing the Research Program relatedto such NA Therapeutic) (such demonstration a “Demonstration of In Vivo Efficacy and Safety”). The datapackage delivered by Arcturus shall include the nucleotide sequence and nucleobase structure of each NATherapeutic in the set of NA Therapeutics that have achieved a Demonstration of In Vivo Efficacy andSafety. Arcturus shall provide JPI any additional information reasonably requested by JPI regarding NATherapeutics created by Arcturus under a Research Program. Within […***…]* Business Days after receipt ofsuch data or information, JPI’s JRC chairperson will inform Arcturus’ JRC chairperson in writing (which may besatisfied by e-mail) whether it considers such data a Demonstration of In Vivo Efficacy. In the event JPI files anIND with respect to a NA Therapeutic provided by Arcturus, then the same shall be deemed a Demonstration of InVivo Efficacy and Safety.1.5Development Candidate Selection. JPI may select certain NA Therapeutics under a Joint Research Plan forfurther development (“Development Candidates”): (a) at a duly-convened JRC meeting; (b) by email from JPI’sJRC chairperson to Arcturus’ JRC chairperson; or (c) either during or after the Research Term by written notice toArcturus in accordance with this Agreement. Each compound that comprises a Development Candidate is a“Licensed Compound” and each pharmaceutical product containing a Licensed Compound is a “LicensedProduct”. Should JPI or its Affiliates conduct, or permit or cause to be conducted, any IND-enabling GLP studyof, or any GLP manufacturing activity with respect to, any NA Therapeutics during the Research Term or anySelected NA Therapeutic after the Research Term, it shall be deemed to have designated such NA Therapeuticas a Development Candidate. Arcturus shall not be obligated to perform, or have performed, any IND-enablingGLP study of, or any GLP manufacturing activity with respect to any NA Therapeutic unless such NA Therapeutichas been designated a Development Candidate. JPI shall only select as Development Candidates those NATherapeutics that JPI believes are potentially relevant to the treatment or diagnosis of the applicable infectiousdisease as set forth in the Joint Research Plan for the Research Program. ***Confidential Treatment Requested2 EXECUTION COPY 1.6Selected NA Therapeutic List. No later than […***…]* days after completion of the Research Program (otherthan as a result of termination of this Agreement), JPI shall deliver to Arcturus a list of the NA Therapeutics(including, but not limited to, previously-designated Development Candidates) that JPI determines to be ofpotential relevance to the treatment or diagnosis of the applicable infectious disease as set forth in the JointResearch Plan for the Research Program (the “Selected NA Therapeutics List”).1.7Exclusivity. Arcturus shall use all Licensed Compounds only in accordance with this Agreement, and, until the[…***…] anniversary of (i) the Effective Date, in the case of HBV based Research Program, and (ii) the respectiveOption Exercise Date, in the case of an […***…] or Respiratory Disease Viruses-based Research Program, asapplicable, Arcturus and Arcturus-Controlled Affiliates will not:1.7.1perform, participate in, or fund any work directed to the discovery, research or development of NA Therapeuticslicensed under this Agreement, other than in activities conducted pursuant to this Agreement;1.7.2grant any non-Party any license or other rights under Arcturus Technology to develop or commercialize NATherapeutics licensed under this Agreement, extend the duration or scope of any existing license underArcturus Technology to develop or commercialize NA Therapeutics licensed under this Agreement, or reducethe aggregate payment obligations to Arcturus under any such existing license with respect to NA Therapeuticslicensed under this Agreement to an extent that would be likely to have a material adverse effect on thecompetitiveness of one or more Licensed Products; or1.7.3propose to any non-Party or solicit any non-Party to enter into any contractual relationship for work (includingfee-for-service work) directed to the discovery, research or development of NA Therapeutics, other than foractivities conducted pursuant to this Agreement.The obligations of Sections 1.7.1 and 1.7.3 will not apply to, have no effect and exclusivity shall not apply withrespect to: (a) […***…] being conducted by Arcturus with respect to NA Therapeutics […***…], but Arcturus andits Affiliates shall not expand such activities beyond […***…]; or (b) any activities to be conducted by Arcturus forthe research, development, manufacturing, commercialization, use and sale of any […***…] agents (including NATherapeutics) for use in humans or farm or companion animals involving the use of […***…] as […***…] for the[…***…] of Hepatitis B, […***…] or […***…]; or (c) for pre‑existing or subsequently acquired or initiated programsof a non-Party acquirer of Arcturus, provided that Arcturus ensures that Arcturus Know-How is not accessible topersonnel of such non-Party acquirer who are engaged in the conduct of such program and such non‑Partyacquirer does not use Arcturus Technology in such programs. Arcturus shall not attempt to circumvent thisprovision through the use of non-Arcturus-Controlled Affiliates.***Confidential Treatment Requested3 EXECUTION COPY 1.8Transfer of Supplies and Data for NA Therapeutics. At JPI’s reasonable request, Arcturus shall promptlytransfer to JPI at no charge: (a) subject to availability, reasonable quantities of NA Therapeutics, LicensedCompounds or Licensed Products in Arcturus’ possession or control (Arcturus may retain such quantities of NATherapeutics, Licensed Compounds and Licensed Products as are necessary for Arcturus to perform itsResearch Program obligations); (b) all existing data for Licensed Compounds; and (c) any additional ArcturusKnow-How that is necessary or useful for JPI to research, develop, manufacture, commercialize or otherwiseExploit any Selected NA Therapeutics, Licensed Compound or Licensed Product.1.9Records. Each Party shall maintain, consistent with its internal policies, accurate records of its activities underthe Research Program that are suitable for all relevant scientific, patent, regulatory, and financial purposes.1.10Reports. During the first Calendar Year, Arcturus shall deliver to the JRC a quarterly written, detailed summaryof all research and development efforts with respect to the NA Therapeutics and Licensed Compoundsconducted by Arcturus since the previous such report and shall respond promptly to any reasonable JPI inquiriesregarding the NA Therapeutics and Licensed Compounds. Until the JRC is disbanded, and in addition to anyother reporting requirements under this Agreement, no later than […***…]* days after the end of each CalendarQuarter, each Party shall submit to the JRC a written report that: (a) describes that Party’s progress under theJoint Research Plan during that Calendar Quarter; and (b) includes a summary of the results and data generatedby that Party under the Joint Research Plan during that Calendar Quarter, in each case to the extent reasonablynecessary to advance the Joint Research Plan and the Research Program.1.11Materials. At the request of JPI, Arcturus shall, as necessary, provide JPI quantities of Materials in excess of thequantities provided under Section 1.8, or other Materials identified in the Joint Research Plan that are proprietaryto Arcturus or otherwise not commercially available, provided that JPI will reimburse Arcturus for the reasonableand documented costs associated with the purchase or provision of such Materials.1.12Performance by Others. Each Party may perform itself or through one or more Affiliates or permittedsubcontractors that Party’s obligations under the Joint Research Plan, on condition that each such Affiliate orsubcontractor enters into a confidentiality agreement with that Party that contains confidentiality obligationssubstantially the same as those set forth in this Agreement. Each Party will remain liable for performance of anysuch Affiliate or subcontractor. Arcturus shall obtain JPI’s prior written consent before engaging anysubcontractor to perform its obligations hereunder (except to the extent that such subcontractor and theobligations to be subcontracted are identified in the Joint Research Plan).1.13Budget. Arcturus shall fund those activities to be funded by Arcturus pursuant to the HBV Joint Research Planand associated Budget. Arcturus shall submit to the***Confidential Treatment Requested4 EXECUTION COPY JRC for approval, for those activities to be funded by Janssen pursuant to the HBV Joint Research Plan andassociated Budget, a detailed budget of planned FTE and Out-of-Pocket Expenses for the ensuing 12 months(the “Annual Budget”) every 6 months beginning with the Effective Date, provided that Arcturus shall not beobligated to commence a particular Joint Research Program activity unless the JRC has approved an AnnualBudget covering the budgeted costs for such activity. JPI shall reimburse Arcturus as set forth in Section 1.14 forthe actual costs incurred by Arcturus for conducting the Research Program up to $[…***…]* (the “TotalBudget”). JPI will not reimburse amounts above […***…]% of the Annual Budget except as approved by the JRCas provided in Section 2.4. The Annual Budget may be amended by unanimous written agreement of theJRC. Pursuant to Section 2.5, increase in the Total Budget will warrant an amendment to this Agreement.1.14Invoicing and Payment. Arcturus shall provide an invoice to Johnson & Johnson Accounts Payable (J&J AP)via the web portal www.ap.jnj.com within […***…] days of the end of each Calendar Month for all ResearchProgram payments due for that month with a copy to the JRC/JPI and to […***…], J&J Innovation, 99 El CaminoReal, Menlo Park, CA 94025. Arcturus may contact the Johnson & Johnson Accounts Payable Hotline at (877)557-4487 with any questions related to the status of payments on invoices. The invoice will specify the actualnumber of FTEs expended (including an FTE time report break down to substantiate FTE work performed), andthe applicable FTE Costs (the product of the actual total FTEs used by Arcturus to perform the Research Programand the FTE Rate) and Arcturus Out-of-Pocket Expenses (collectively “Research Costs”) incurred by Arcturusduring the Calendar Month. Within […***…] days of the date the invoice is submitted to the J&J AP portal, JPIshall pay Arcturus the Research Costs set forth in the invoice unless JPI disputes a portion of the invoice (inwhich event JPI shall pay the undisputed portion thereof). All invoices must reference a valid Purchase Order(“PO”) Number which JPI shall provide to Arcturus within […***…] days after the Effective Date and invoices shallinclude the nature and amount of research and development services rendered or deliverables provided. JPIreserves the right to return to Arcturus unprocessed and unpaid those invoices that do not reference theapplicable PO Number. Janssen Research & Development, L.L.C may act as a paying agent for JPI under thisAgreement. Invoiced amounts not paid when due will bear interest in accordance with Section 5.18.2GOVERNANCE2.1Joint Research Committee. Promptly after the Effective Date, the Parties shall establish a committee (the “JointResearch Committee” or “JRC”), as more fully described below. The JRC shall review and oversee theResearch Program. The JRC shall have no authority to amend this Agreement. The JRC’s responsibilities shallinclude:***Confidential Treatment Requested5 EXECUTION COPY 2.1.1The review of the progress of the Research Program, and discussion and approval of any appropriatemodifications to the Joint Research Plan in light of such progress, including applicable modifications to theAnnual Budget;2.1.2The formation of sub-committees as agreed to be appropriate, which sub-committees shall report their progressto the JRC at each regularly scheduled JRC meeting, with any dispute among the sub-committee membersreferred to the JRC for resolution; and2.1.3Any other responsibilities as may be assigned to the JRC pursuant to this Agreement or as may be mutuallyagreed upon by the Parties in writing from time to time.Where any decision of the JRC would alter or increase in a material manner Arcturus contractual obligations orResearch Program commitments, or JPI’s financial obligations, under this Agreement, including the JointResearch Plan, then the JRC’s role shall be limited to making recommendations to the Parties as to the proposeddecision. Any such decision shall not take effect unless and until agreed by the Parties in writing in anamendment to this Agreement.2.2Membership of the JRC. The JRC shall consist of an equal number of representatives from each of JPI andArcturus. The exact number of such representatives shall be up to […***…]* for each Party, or such other numberas the Parties may agree. Each Party shall provide the other with a list of its initial members of the JRC within […***…] days after the Effective Date. Each Party may replace any or all of its representatives and/or appoint aproxy at any time by giving prior written notification to the other. Each Party may, in its reasonable discretion,invite other employees of such Party to attend meetings of the JRC. Each Party will provide advance notice ofany additional attendees it will include at a meeting of the JRC. Each Party shall designate 1 of its JRC membersas co-chair.2.3Meetings. The JRC shall meet at least on a calendar quarterly basis in a manner, time and at a place as theParties shall agree. Meetings of the JRC that are held in person shall alternate between the offices of the Parties,or such other place as the Parties may agree. Each Party will be responsible for its members’ expenses incurredin attending all JRC meetings. The chairpersons of the JRC shall be responsible for calling each meeting,setting and distributing agenda items in advance of the meeting and issuing appropriate minutes of each meetingof the JRC within […***…] days of the date of such meeting and shall allocate such responsibilities betweenthemselves. The minutes of each JRC meeting will provide a description, in reasonable detail, of the discussionsat the meeting and document all actions and determinations approved by the JRC at such meeting, includingidentification of any NA Therapeutics, Demonstration of In Vivo Efficacy and Safety, and the identification of anyDevelopment Candidates. In addition, in the event of approval at any JRC meeting of any amendment to theJoint Research Plan or Annual Budget, such amendment will be attached to the minutes as an exhibit. Thechairperson responsible for drafting the minutes of a particular JRC meeting shall provide a draft of such minutes(including by email) to the other***Confidential Treatment Requested6 EXECUTION COPY Party’s chairperson within […***…]* Business Days after such meeting, and the chairpersons shall promptlydiscuss and address any comments the other Party’s chairperson may have on such minutes and finalize suchdraft minutes as promptly as practicable, whereupon the drafting chairperson shall provide such draft minutes toall JRC members (including by email). The minutes shall be considered as accepted if, within […***…] days fromreceipt, no recipient has objected in writing (including e-mail) to the chairpersons.2.4Quorum and Decision Making. A meeting of the JRC shall be considered to have a quorum provided that theco-chairperson from each Party is in attendance and a majority of the JRC is present at such meeting. A decisionby the JRC requires approval of each Party’s co-chairperson. In the event the JRC is unable to agree on adecision as to a particular matter within the JRC’s authority and requiring a decision, JPI shall have the finaldecision making authority on such matter, except as otherwise provided in Section 2.1 above. Any decisionrequired or permitted to be taken by the JRC may be taken in accordance with the above without a meeting takingplace, if a consent in writing including electronic mail, setting forth the decision so taken, is approved in writing byeach of the co-chairpersons. 2.5No Authority. The JRC shall not have the authority to increase the Total Budget.2.6Dissolution of JRC. The JRC shall be dissolved upon the completion of the Research Term.3DEVELOPMENT3.1Development of Licensed Products. JPI, directly or through one or more of its Affiliates or sublicensees, shalluse Commercially Reasonable Efforts to: (a) develop a Licensed Product; (b) obtain Regulatory Approval for aLicensed Product in […***…]; and (c) where approved, commercialize a Licensed Product in […***…]. In theevent that, after delivery of the Selected NA Therapeutics List, JPI determines that a specific NA Therapeutic thatwas not on the Selected NA Therapeutics List but has potential utility to treat or diagnose an infection caused byHBV (or, if the Option is exercised, the applicable Option Disease Area), JPI may provide notice to Arcturusidentifying the particular NA Therapeutic and requesting that it be deemed a “Selected NA Therapeutic.” Arcturusshall notify JPI within […***…] days of receipt of such request whether Arcturus accepts or denies such request,provided that Arcturus may deny such request only if, as of the date of such request: (i) such NA Therapeutic is[…***…] unless permitted pursuant to the provisions of Section 1.7) and has progressed to at least […***…]; or(ii) Arcturus has […***…]***Confidential Treatment Requested7 EXECUTION COPY […***…]*. Upon Arcturus’ acceptance of such request, or, except under the circumstances described in clause (ii)above, Arcturus’ failure to respond in accordance with this Section 3.1, such NA Therapeutic shall be deemed a“Selected NA Therapeutic.”3.2Arcturus Development Support. For up to […***…] after the end of the Research Term (the “DevelopmentSupport Period”), at JPI’s request, Arcturus shall provide reasonable technical assistance to JPI in the practiceof the Arcturus Know-How transferred to JPI to Develop, formulate and manufacture Development Candidatesand their constituent Licensed Compounds (the “Development Support”). The Development Support willinclude making qualified Arcturus personnel reasonably available to JPI for scientific and technical explanationsand advice reasonably requested by JPI; provided, however, that Arcturus will not be required to conduct anyadditional research, development or manufacturing activities, to generate or obtain new data or information, or tohire or engage additional personnel, or provide requested Development Support to the extent or at such afrequency that it would unduly impair the ability of Arcturus personnel to perform, or otherwise interferes withArcturus’ personnel’s performance of, their regular duties for Arcturus. JPI shall reimburse Arcturus for allreasonable and documented FTE Costs and Out-of-Pocket Expenses incurred by Arcturus in providing theDevelopment Support requested by JPI (which FTE Costs and Out-of-Pocket Expenses are in addition to anyResearch Costs that JPI is obligated to reimburse under Section 1.14 and are not subject to the Annual Budget orthe Total Budget). Arcturus shall invoice JPI on a […***…] basis for any such FTE Costs and Out-of-PocketExpenses, and JPI shall pay such invoiced amounts, in each case, in accordance with Section 1.14.3.3Development Costs and Decision Making. JPI will be responsible for all of the costs it incurs for developmentand commercialization of Licensed Products and will have decision-making authority for all developmentactivities.3.4Regulatory Filings. JPI, directly or through one or more of its Affiliates or sublicensees, shall make, in the nameof one or more of JPI, its Affiliates, and its sublicensees, all regulatory filings anywhere in the world it desires forLicensed Products. JPI will be responsible for communicating with Government Bodies regarding regulatoryfilings for Licensed Products and any Regulatory Approval for Licensed Products, once granted. Arcturus willown no interest in any application submitted or approval granted in connection with Regulatory Approval forLicensed Products. Arcturus shall cooperate with JPI as requested by JPI to support any regulatory filing for oneor more Licensed Products. JPI shall reimburse Arcturus all reasonable expenses (including employee time atthe FTE Rate) that Arcturus incurs in so cooperating.3.5Commercialization. JPI will be responsible for all matters relating to commercializing Licensed Products.***Confidential Treatment Requested8 EXECUTION COPY 3.6Manufacturing. JPI will have the exclusive right to manufacture Licensed Products itself or through Affiliates orThird Parties selected by JPI.3.7Reports; Updates. Commencing no later than […***…]* after the expiration of the Research Term, JPI shallonce per Calendar Year provide a written progress report to Arcturus summarizing Product […***…], […***…] and[…***…] activities during the previous 12-month period, the results of such activities, and a summary of theplanned Product […***…], […***…], and […***…] activities for the upcoming 12-month period. In addition, […***…] per year between delivery of such progress reports, upon Arcturus’ request, JPI shall make available toArcturus by teleconference or other means of telecommunication, for a reasonable period and at a reasonabletime, appropriately qualified and sufficiently senior personnel of JPI or its Affiliates having responsibility over andspecific knowledge of JPI’s and its Affiliates’ ongoing and planned Licensed Product […***…], […***…] and […***…] activities, to discuss, and respond to Arcturus’ reasonable questions regarding, the status and progress ofJPI’s and its Affiliates’ ongoing and planned Licensed Product […***…], […***…] and […***…] activities.4LICENSES4.1Compounds and Products. Subject to the terms and conditions of this Agreement, Arcturus hereby grants toJPI an exclusive license under the Arcturus Technology and Arcturus’ interest in the Joint Patent Rights to ExploitNA Therapeutics, Licensed Compounds and Licensed Products in the Field worldwide as identified and selectedand on the terms and conditions set forth in this Agreement. The license granted under this Section 4.1 isexclusive even as to Arcturus, except as necessary for Arcturus to exercise its rights and perform its obligationsunder the Joint Research Plan. The license granted under this Section 4.1 includes the right for JPI to sublicenseto its Affiliates and to Third Parties. This license includes the right to utilize NA Therapeutics, Licensed Productsand Licensed Compounds in Combination Products that incorporate other active pharmaceutical ingredients thatare not Licensed Compounds and in Bundled Products that incorporate other products that are neither LicensedCompounds nor Combination Products. For clarity, NA Therapeutics, Licensed Compounds and LicensedProducts in the Option Disease Areas are not licensed pursuant to this Section 4.1 unless and until such time asan Option in an Option Disease Area is exercised by JPI pursuant to Section 4.2. For clarity, no license or Optionrights are granted pursuant to this Article 4 with respect to NA Therapeutics that are not also subject to theExclusivity obligations pursuant to Section 1.7 (i.e., with respect to NA Therapeutics for which the obligationsunder Sections 1.7.1 and 1.7.3 do not apply, no license rights are granted to JPI and no restrictions on exclusivityshall apply pursuant to this Agreement).***Confidential Treatment Requested9 EXECUTION COPY 4.2Option. Arcturus grants to JPI an option, at JPI's sole election, to have developed and license (as set forth in Section 4.1)NA Therapeutics for each of […***…]* and Respiratory Disease Viruses (each, an “Option”). Each Option willremain in effect and expire […***…] months from the Effective Date (“Option Period”) and, if not previouslyexercised for either or both, shall terminate and be of no further force and effect upon the expiration of the OptionPeriod. JPI may exercise this option by delivering an irrevocable written notice to Arcturus (“Option ExerciseDate”) prior to the expiration of the Option Period and paying to Arcturus the Exercise Fee set forth in Section5.10 within […***…] business days of the Option Exercise Date. Upon each exercise of an Option, an additionalJoint Research Plan will be attached to this Agreement and made a part hereof, and the research specified to beconducted by the Parties under such Joint Research Plan will become a Research Program. During the OptionPeriod, but prior to any Option Exercise Date, Arcturus shall be free to collaborate with third parties and licenseany rights in the Option Disease Areas to third parties. If licenses under the Arcturus Technology with respect to[…***…] or Respiratory Disease Viruses have been granted to third parties prior to the respective Option ExerciseDate, then exercising of an Option by JPI would result in a non-exclusive license in the applicable OptionDisease Area subject to rights granted by Arcturus to the then-existing Third Party licensee(s), provided that tothe extent that the grant of rights to a Third Party licensee in the applicable Option Disease Area is less thanworldwide or narrower than the Field, then the JPI license shall be exclusive in such unlicensed portion andnonexclusive in the otherwise licensed portion of the Option Disease Area. 4.3Nonexclusive Licenses.4.3.1JPI hereby grants to Arcturus a nonexclusive, royalty-free license to use JPI Patent Rights, and Know-How thatJPI discloses to Arcturus during the Research Term, in performing Arcturus’s obligations under this Agreementduring the Research Term on the terms and conditions set forth in this Agreement; provided that no licenserights are granted in any Option Disease Area until such time as an exercise of by JPI of its Option in theapplicable Option Disease Area pursuant to Section 4.2.4.3.2Arcturus hereby grants to JPI a nonexclusive, royalty-free license under the Arcturus Technology to make, use,sell, and import, products using Arcturus Delivery Technology provided that such products are LicensedProducts licensed to JPI according to Section 4.1.4.3.3Arcturus hereby grants to JPI a nonexclusive, royalty-free license under the Arcturus Technology to use NATherapeutics, Licensed Compounds and Licensed Products for its own internal research purposes on the termsand conditions set forth in this Agreement.***Confidential Treatment Requested10 EXECUTION COPY 4.4No Other Licenses or Rights. This Agreement creates no license or other right by implication, estoppel, orotherwise. All licenses and rights are granted only under this Agreement.4.5Retained Rights. Subject to Section 1.7, none of the rights granted to JPI under this Article 4 affect the rights ofArcturus to practice and grant licenses under the Arcturus Technology and Arcturus Confidential Information thatare not expressly licensed to JPI pursuant to Section 4.1.4.6Further Licenses. 4.6.1If, during the Research Term, JPI identifies any Third Party-owned or -controlled intellectual property rights notControlled by Arcturus on the Effective Date that JPI believes may be necessary or useful for the ResearchProgram or the Exploitation of Selected NA Therapeutics, Licensed Compounds or Licensed Products, thenupon JPI’s written request, the Parties will confer regarding whether it is necessary or useful for Arcturus toobtain rights to such Third Party-owned or –controlled intellectual property rights. If the Parties agree that it isnecessary or useful for Arcturus to obtain such rights, Arcturus will use Commercially Reasonable Efforts toobtain such rights, provided that (i) […***…] and (ii) the Parties agree in writing to […***…]) and to the extent towhich Section 5.6.3 will apply to royalties that become due by Arcturus to the Third Party as a result of JPI’s useof such intellectual property. Notwithstanding clause (i) above, if any milestone payment becomes due byArcturus as a result of both (A) JPI’s and its Affiliates’ and sublicensees’ Exploitation of Selected NATherapeutics, Licensed Compounds or Licensed Products and (B) Arcturus’ and its Affiliates’ and licensees’Exploitation of products other than Selected NA Therapeutics, Licensed Compounds or Licensed Products(e.g., a commercial milestone payment that becomes due as a result of combined sales of Licensed Productsby JPI and sales by Arcturus of products other than Selected NA Therapeutics, Licensed Compounds orLicensed Products exceeding a specified amount), then responsibility for payment of such milestone paymentshall […***…]. JPI may obtain rights to independently pursue or obtain a license to any Third-Party rights, andJPI shall have no obligation to consult with Arcturus regarding the same. 4.6.2No After-Acquired Third-Party IP will be deemed to be within the Control of Arcturus unless, prior to using anysuch intellectual property in a Research Program activity: (a) Arcturus provides to JPI a true, complete andcorrect written description of Arcturus’ royalty or milestone payment obligations to the applicable intellectualproperty; (b) Arcturus obtains JPI’s written consent to use such intellectual property in the Research Program orthat such intellectual property be used by JPI; and (c) […***…]11 EXECUTION COPY […***…]*. Should Arcturus obtain rights to After-Acquired Third-Party IP during the Research Term thatArcturus determines to be relevant to, and useful for the performance of, the Research Program or theExploitation of Selected NA Therapeutics, Licensed Compounds and Licensed Products hereunder or that isrequested by JPI for utilization hereunder, Arcturus shall promptly provide JPI with notice thereof and, shouldsuch After-Acquired Third-Party IP have relevant payment obligations, the written description described insubsection (a) of the preceding sentence of this Section 4.6.2, provided that such After-Acquired Third-Party IPwill not be deemed to be within the Control of Arcturus until all of the conditions set forth in the precedingsentence (clauses (a)-(c)) are met.4.7Expiration of Royalty Payment Obligations. When JPI owes Arcturus no more royalty payments on a givenLicensed Product with respect to a given country under Article 5, all licenses that Arcturus has granted JPI underthis Article 4 with respect to that Licensed Product and that country will become fully paid, perpetual, andirrevocable. JPI shall continue to pay Arcturus any pass-through royalties or milestones (as applicable) due toany Third Party that JPI has agreed to pay with respect to any After-Acquired Third Party IP pursuant toSection 4.6.2, for so long as Arcturus continues to be obligated to make such payments to the Third Party.4.8Non-Circumvention. Arcturus shall not attempt to circumscribe or limit the licenses granted hereunder bysituating ownership or Control of intellectual property in an Arcturus Affiliate that is not an Arcturus-ControlledAffiliate.5PAYMENTS, MILESTONES AND ROYALTIES5.1Up Front Payment. Within 10 days after the execution of this Agreement JPI shall pay to Arcturus a non-refundable, non-creditable fee of […***…].5.2Milestones. When a Milestone Event as set forth in Section 5.3 or 5.4 occurs with respect to a Licensed ProductJPI will, within […***…] days, inform Arcturus of the achievement of the Milestone Event and Arcturus may thensubmit to JPI an invoice for the payment due for that Milestone Event (each, a “Milestone Amount”).5.3Milestone Events and Payments. On a Development Candidate-by-Development Candidate basis, JPI will payArcturus the following non-refundable, non-creditable milestone payments, upon first achievement of thespecified milestone by the first two Licensed Products for each of (i) HBV, (ii) […***…] and (iii) each of theRespiratory Disease Viruses-based Research Program added upon exercise of an Option pursuant to Section4.2 to achieve that milestone, regardless of how many Licensed Products achieve such milestone. Eachmilestone payment may be paid no more than twice for each of (i) HBV, (ii) […***…] and (iii) each of theRespiratory Disease Viruses-based Research Program added upon exercise of an Option pursuant to Section4.2, regardless of how many Licensed Products meet such milestone. If development or other efforts to obtain***Confidential Treatment Requested12 EXECUTION COPY Regulatory Approval of a Licensed Product are discontinued after JPI has paid the milestone payment(s) forachievement of one or more milestones (a “Dropped Licensed Product”), and JPI develops a Licensed Productcontaining a different Development Candidate (a “Replacement Licensed Product”) that is payable as areplacement for the Dropped Licensed Product, the milestone payment that would be payable for theachievement by such Replacement Licensed Product of any milestone previously achieved by the DroppedLicensed Product for which JPI paid a milestone payment to Arcturus would not be payable, but the milestonepayment that would be payable for the achievement by such Replacement Licensed Product of any milestonethat was not achieved by the Dropped Licensed Product would be payable at […***…]*% of the relevant amountset forth below. Milestone NumberMilestone EventMilestonePayment1[…***…]$[…***…]2[…***…]$[…***…]3[…***…]$[…***…]4[…***…]$[…***…]5[…***…]$[…***…]6a[…***…]$[…***…]6b[…***…]$[…***…]6c[…***…]$[…***…]Total Milestones for each of the first two Licensed Products in HBV and, if the Option is exercisedpursuant to Section 4.2, Milestones for each of the first two Licensed Products in each of theapplicable Option Disease Areas as provided in Section 5.3$56,500,000 ***Confidential Treatment Requested13 EXECUTION COPY 5.4Net Sales Payments. JPI shall pay Arcturus each of the following one-time, non-refundable, non-creditablemilestone payments upon the first achievement of the applicable milestone event. Each such milestone paymentshall be payable only one time for HBV and if the Option is exercised pursuant to Section 4.2, one time for eachof the Option Disease Areas (as applicable), regardless of how many times the relevant milestone event may beachieved.Milestone EventPaymentFirst Calendar Year in which annual aggregate Net Sales of all Licensed Products, on a ResearchProgram-by-Research Program basis, equal or exceed $[…***…]$[…***…]*First Calendar Year in which annual aggregate Net Sales of all Licensed Products, on a ResearchProgram-by-Research Program basis, equal or exceed $[…***…]$[…***…] 5.5Royalties. During the Royalty Term, JPI will pay royalties on a product-by-product and country-by-country basisto Arcturus on aggregate annual Net Sales of Licensed Products by JPI, JPI’s Affiliates and sublicensees in eachCalendar Year at the applicable rate(s) set forth below. Calendar Year Net Sales incrementRoyalty Rate (%)Portion of aggregate annual Net Sales of Licensed Products, on a Research Program-by-ResearchProgram basis, less than or equal to $[…***…][…***…]%Portion of aggregate annual Net Sales of Licensed Products, on a Research Program-by-ResearchProgram basis, greater than $[…***…] but less than or equal to $[…***…][…***…]%Portion of aggregate annual Net Sales of Licensed Products, on a Research Program-by-ResearchProgram basis, greater than $[…***…][…***…]% 5.6Royalty Reductions. On a country-by-country and Licensed Product by Licensed Product basis, the royaltyrates above shall be reduced during the royalty term as follows:5.6.1to […***…]% of the amount otherwise payable from and after expiration of the last-to-expire Valid Claim of theArcturus Patents covering the composition of the relevant Licensed Product in such country (if there iscontinued regulatory exclusivity for such Licensed Product in such country); and5.6.2to […***…]% of the amount otherwise payable from and after expiration of both: (a) the last-to-expire ValidClaim of the Arcturus Patents covering the***Confidential Treatment Requested14 EXECUTION COPY composition of such Licensed Product or all approved uses thereof in such country; and (b) expiration ofregulatory exclusivity for such Licensed Product in such country. For purposes of this Section 5.6, regulatoryexclusivity will be deemed to have expired in a country on the date a Third Party could reference data providedby a Party relating to the relevant Licensed Product to a regulatory agency in that country. 5.6.3in the event JPI, at any time during the period it is obligated to pay royalties to Arcturus hereunder, is obligatedto pay […***…]* to any Third Party in connection with the Exploitation of a Licensed Compound or LicensedProduct (including in connection with the settlement of a patent infringement claim) under patents, patentapplications or know-how of a Third Party (other than […***…] with respect to After-Acquired Third-Party IPunder Section 4.6.2), JPI may deduct […***…]% of the royalties actually paid by JPI to such Third Party withrespect to sales of such Licensed Product in the relevant country from the royalties due Arcturus with respect toNet Sales of such Product in such country; provided, however, that: (a) if such license does not contain rightsunder one or more patents or patent applications, only […***…]% of the royalties so paid would be deductible;and (b) in no event would the royalties payable to Arcturus with respect to Net Sales of such Licensed Productin such country be reduced by more than […***…]%.The reductions to the royalty rates in this Section 5.6 in the aggregate will not reduce the effective royalty ratebelow […***…]%.5.7Compulsory License. If a government grants or compels JPI to grant a compulsory license to a LicensedProduct to a Third Party, then, insofar as JPI is compensated on a royalty basis, JPI will pay to Arcturus […***…]% of the sum paid to it under the compulsory license instead of the royalties that would otherwise be dueunder this Agreement. Any sales under such compulsory license will not be used in the calculation of aggregateNet Sales for the purpose of attaining sales milestones under Section 5.4 or adjusting royalty rates underSection 5.6.5.8Royalty Term. Royalty payments will become payable upon the First Commercial Sale of a Licensed Product ina country and ending upon the latest of: (a) […***…] years following the first commercial sale of such LicensedProduct in such country; (b) expiration of regulatory exclusivity for such Licensed Product in such country; and(c) expiration of the last-to-expire Valid Claim of the Arcturus Patent Rights or Joint Patent Rights Covering thecomposition of such Licensed Product or all approved uses thereof in such country5.9Timing and Manner of Payment. Except if this Agreement provides otherwise, JPI shall pay each invoice thatArcturus issues to JPI under this Agreement no later than […***…] days after JPI receives it. For a payment byJPI under this Agreement to be valid, JPI must make that payment by wire transfer to a bank account that Arcturusdesignates.5.10Option Exercise Fees. The Exercise Fee payable for the exercise of each Option pursuant to Section 4.2 is (a)$[…***…] per Option exercise (i.e., for each of***Confidential Treatment Requested15 EXECUTION COPY […***…]* or Respiratory Disease Viruses) if such Option is exercised before the end of […***…] from the EffectiveDate, or (b) $[…***…] per per Option exercise (i.e., for each of […***…] or Respiratory Disease Viruses) if suchOption is exercised after […***…] from the Effective Date and before the end of […***…] from the Effective Date.5.11Reports. For as long as JPI owes royalties under this Article 5, no later than […***…] days after the end of eachCalendar Quarter, JPI shall provide Arcturus a written report showing as of that Calendar Quarter the Net Sales ofLicensed Product by country and the royalty owed for that Calendar Quarter. That written report must include atleast the following information for that Calendar Quarter, each listed by Licensed Product and by country of sale:(a) Net Sales; and (b) the royalty due on those Net Sales.5.12Records and Audits. 5.12.1Arcturus shall keep, and shall cause Arcturus-Controlled Affiliates to keep, such accounting records as arenecessary to permit JPI to verify Research Costs invoiced by Arcturus under Section 1.14. Such records shallbe retained at the respective places of business of Arcturus and Arcturus-Controlled Affiliates for at least the […***…] Calendar Years after the Calendar Year to which such records pertain. Until expiration of such retentionperiod, JPI shall have the right to cause an independent certified accountant selected by JPI and reasonablyacceptable to Arcturus to audit such records covering not more than the preceding […***…] full Calendar Years,subject to the terms of Section 5.13 below. If any such audit determines that JPI overpaid Arcturus, JPI will beentitled to a credit for that overpayment, plus interest calculated in accordance with Section 5.18 no later than[…***…] days after being notified of the results of such audit, or, should insufficient further payments be duehereunder, a refund.5.12.2JPI shall keep, and shall instruct its Affiliates and sublicensees to keep, such accounting records as arenecessary to permit Arcturus to verify determination of all royalties and other amounts paid or payable by JPIunder this Agreement. Such records shall be retained at the respective places of business of JPI, its Affiliatesand sublicensees for at least the […***…] Calendar Years after the Calendar Year to which such recordspertain. Until expiration of such retention period, Arcturus shall have the right to cause an independent certifiedaccountant selected by Arcturus and reasonably acceptable to JPI to audit such records covering not more thanthe preceding […***…] full Calendar Years, subject to the terms of Section 5.13 below. If any such auditdetermines that JPI underpaid Arcturus, JPI shall pay Arcturus an amount equal to that underpayment, plusinterest calculated in accordance with Section 5.18 no later than […***…] days after being notified of the resultsof such audit, as requested by Arcturus. If any such audit determines that JPI overpaid Arcturus, JPI will beentitled to a credit for that overpayment, or, should insufficient further payments be due hereunder, a refund.***Confidential Treatment Requested16 EXECUTION COPY 5.13Conduct of Audits. It is a condition to the conduct of any audit permitted by Section 5.12 that the accountantsign and deliver to the audited Party a confidentiality agreement as reasonably requested by the auditedParty. The Party engaging such accountant shall require such accountant to share the findings of any such auditwith both Parties, and those findings will be binding on the Parties. The auditing Party shall pay for any suchaudit under Section 5.12, unless: (a) in the case of an audit under Section 5.12.1, such audit determines that JPIoverpaid Arcturus by more than […***…]*% of the amount owed, in which case Arcturus shall reimburse JPI forthe reasonable and documented fees and expenses of the auditor paid by JPI for such audit; and (b) in the caseof an audit under Section 5.12.2, such audit determines that JPI underpaid Arcturus by more than […***…]% ofthe amount owed, in which case JPI shall reimburse Arcturus for the reasonable and documented fees andexpenses of the auditor paid by Arcturus for such audit. Each Party shall have the right to inspect all suchrecords no more frequently than once every […***…] months, during normal business hours with at least […***…] days prior written notice.5.14Royalty Payments. No later than […***…] days after the end of each Calendar Quarter in a given CalendarYear, JPI shall pay Arcturus royalties that JPI owes under Section 5.5 for that Calendar Quarter.5.15Currency Exchange. All payments under this Agreement must be in U.S. dollars. If Licensed Products are soldin a currency other than U.S. dollars, for purposes of calculating royalties, revenues from those sales must beexpressed in U.S. dollars using the Currency Hedge Rates. Not later than […***…] Business Days after theCurrency Hedge Rates for the next Calendar Year are available, JPI shall notify Arcturus of the Currency HedgeRates for the local currency of each country in the Territory and all relevant details. The Currency Hedge Ratesfor a Calendar Year will remain unchanged during that Calendar Year.5.16Indirect Taxes. Amounts payable under this Agreement do not include any sales, use, excise, value added orother applicable taxes, tariffs or duties with respect to work or services to be performed pursuant to thisAgreement. If any taxing authority imposes a VAT, GST, sales, use, service, consumption, business or similar taxwith respect to the work or services undertaken under this Agreement, then JPI agrees to pay that amount ifspecified in a valid invoice or supply exemption documentation. For avoidance of doubt, Arcturus will not beentitled to pass on to JPI, and JPI will not be obligated to pay or bear, any tax that is based on Arcturus’ real,personal or intangible property (whether owned or leased), corporate structure, franchise, continuing businessoperations, income, gross receipts, capital stock, net worth or imposed with respect to Arcturus’ engagement ofemployees or independent contractors or that Arcturus incurs upon subcontracting any work hereunder, in wholeor in part, to any affiliated or non-affiliated Third Party. Arcturus is solely responsible, to the extent required byapplicable law, for identifying, billing, and collecting the taxes payable by JPI in all relevant federal, state, county,municipal and other taxing jurisdictions and for filing all required tax returns in a timely manner. To the extent thatArcturus does not***Confidential Treatment Requested17 EXECUTION COPY provide JPI a valid invoice (i.e., an invoice compliant with this Agreement setting forth the applicable work orservices documentation required under the rules and regulations of the jurisdiction of both Arcturus and JPI,including separate identification of the tax where legally required), Arcturus shall be responsible for any penaltyresulting directly from such noncompliance. The Parties will cooperate in good faith to minimize taxes to theextent legally permissible.5.17Withholding Taxes. JPI shall make all payments to Arcturus under this Agreement without any deduction orwithholding for taxes except to the extent that any such deduction or withholding is required by law in effect at thetime of payment. Any Tax required to be withheld on amounts payable under this Agreement will be paid by JPIon behalf of Arcturus to the appropriate government authority and JPI will furnish Arcturus proof of payment ofsuch Tax. Any such tax required to be withheld will be an expense of and borne by Arcturus. If any such Taxproperly is assessed against and paid by JPI, then Arcturus will indemnify JPI from and against such Tax. JPIand Arcturus will cooperate with respect to all documentation required by any taxing authority or reasonablyrequested by JPI to secure a reduction in the rate of withholding taxes. On the date Arcturus signs thisAgreement it shall deliver to JPI an accurate and complete Internal Revenue Service Form W-9.5.18Late Payments. In the event that any payment due and undisputed under this Agreement is not made when due,the payment shall accrue interest at a rate per annum that is […***…]* basis points (i.e., four percentage points)above the then-current prime rate quoted by Citibank in New York City for the period from the due date forpayment until the date of actual payment; provided, however, that in no event shall such rate exceed themaximum legal annual interest rate.6OWNERSHIP OF INVENTIONS6.1Ownership of Inventions. Each Party will own all Patent Rights Covering inventions that are made solely by itsemployees, agents, or subcontractors and not jointly with employees, agents, or subcontractors of the otherParty. The Parties will jointly own all Patent Rights Covering inventions that are made jointly by employees,agents, or subcontractors of both Parties. Whether an invention is the sole invention of a Party or the jointinvention of the Parties for purposes of this Section 6.1 will be determined in accordance with United Statespatent laws, regardless of where the related activity took place.6.2Exploitation of Inventions. Except as expressly stated to the contrary in this Agreement (including in Section1.7) and licenses granted under this Agreement, each Party may exploit (including sublicense) any Joint PatentRights without obtaining the consent of, and without accounting to, the other Party.6.3Joint Research Agreement. This Agreement is a joint research agreement in accordance with 35 U.S.C.section 103(c)(3). Neither Party is required by this reference to have any Patent Right take advantage of orbecome subject to***Confidential Treatment Requested 18 EXECUTION COPY 35 U.S.C. section 103(c)(3) except in accordance with the provisions of Article 7 regarding Prosecution andMaintenance of Patent Rights.6.4Trademarks. JPI will be responsible for the trademarks and trade dress used in connection withcommercialization of any Licensed Products. JPI will own all those trademarks and that trade dress and allassociated goodwill. Arcturus shall not use or seek to register, anywhere in the world, any trademarks that areconfusingly similar to any trademarks, trade names, trade dress, or logos used by or on behalf of JPI, its Affiliates,or its sublicensees in connection with any Licensed Product. Nothing in this Section 6.4 prevents Arcturus fromenforcing its own trademark rights or house marks.7PATENT PROSECUTION AND MAINTENANCE7.1Generally. Except as otherwise expressly provided herein, as between the Parties, only the Party that Controls aPatent Right (including any Patent Right assigned to that Party under the terms of this Agreement) may at itsexpense Prosecute and Maintain that Patent Right, except: (a) as expressly provided in Sections 7.2 and 7.4below with respect to Arcturus Product-Specific Patents; and (b) that JPI shall Prosecute and Maintain JointPatent Rights, subject to Section 7.4. Arcturus will use counsel acceptable to JPI to Prosecute and MaintainArcturus Product-Specific Patents. JPI shall Prosecute and Maintain Joint Patent Rights using counselacceptable to Arcturus. 7.2Arcturus Responsibilities. Arcturus shall use reasonable efforts to obtain in commercially significant countries(as identified by JPI to Arcturus in writing) valid and enforceable Arcturus Product-Specific Patents, provided thatJPI shall reimburse the reasonable costs and expenses incurred by Arcturus in Prosecuting and MaintainingArcturus Product-Specific Patents in accordance with Section 5.9. Arcturus shall timely apprise JPI of all pendingprosecution and maintenance of Arcturus Product-Specific Patents and shall consider all of JPI’srecommendations regarding such prosecution and maintenance. Prior to filing (a) any patent application duringthe Research Term that includes in its claims or description an NA Therapeutic or a method of making or usingan NA Therapeutic, or (b) any patent application after the Research Term that includes in its claims or descriptiona Selected NA Therapeutic or Licensed Compound or a method of making or using a Selected NA Therapeutic orLicensed Compound, Arcturus will, in each case, provide a copy of the proposed application to JPI. The Partiesshall proceed with the filing and prosecution actions they agree so that, to the extent practicable, the applicationcan be appropriately characterized as an Arcturus Product-Specific Patent. 7.3JPI Responsibilities. JPI shall provide Arcturus timely advice and recommendations regarding prosecution andmaintenance issues of which it is made aware by Arcturus. JPI shall timely apprise Arcturus of all pendingprosecution and maintenance of Joint Patent Rights and shall consider all of Arcturus’ recommendationsregarding such prosecution and maintenance. 19 EXECUTION COPY 7.4Involvement in Prosecution and Maintenance. If Arcturus decides not to Prosecute and Maintain any claimwithin any Arcturus Product-Specific Patent or decides to cease doing so, then: (a) Arcturus shall notify JPIpromptly, but in any event not less than […***…]* days prior to the next deadline for any action that must be takenwith respect to such Arcturus Product-Specific Patent in the relevant patent office; and (b) Arcturus shall permitJPI, if it wishes, to continue Prosecution and Maintenance of that Arcturus Product-Specific Patent in thatcountry. If JPI decides not to Prosecute and Maintain any patent or patent application within any Joint PatentRight or decides to cease doing so, then (1) JPI shall notify Arcturus promptly, but in any event not less than […***…] days prior to the next deadline for any action that must be taken with respect to such Joint Patent Right inthe relevant patent office, and (2) JPI shall permit Arcturus, if it wishes, to continue Prosecution and Maintenanceof that Joint Patent Right in that country at Arcturus’s expense. 7.5Solely-Controlled Arcturus Patents. Arcturus will have the sole right, but not the obligation, to Prosecute andMaintain all Arcturus Patents that are not Arcturus Product-Specific Patents, at Arcturus sole cost and expenseusing counsel of its choice. Arcturus will use reasonable efforts to Prosecute and Maintain such Patents in amanner that will not damage the scope, validity, or enforceability of Arcturus Product-Specific Patents or JointPatents. 7.6Cooperation. Each Party shall cooperate with the other Party in Prosecution and Maintenance of ArcturusPatent Rights, Joint Patent Rights and JPI Patent Rights in accordance with this Agreement, including bypromptly signing any documents reasonably necessary for Prosecution and Maintenance of any such PatentRights in any country and by asking inventors, subcontractors, employees, former employees (to the extentreasonably available), consultants, and agents to sign any such documents.7.7Patent Marking. Consistent with it business practices, JPI may mark, and may instruct its Affiliates andsublicensees to mark, Licensed Products with applicable Arcturus Patent Rights. Consistent with it businesspractices, Arcturus may mark, and may instruct its Affiliates and sublicensees to mark, all Licensed Products withapplicable Patent Rights licensed by JPI to Arcturus under Section 12.5. Each Party will be responsible forremoving any patent markings from Licensed Products in accordance with applicable law and regulation after theapplicable Patent Right expires.8PATENT ENFORCEMENT8.1Generally. Except as otherwise provided in this Article 8, each Party will be responsible for enforcing itsrespective Patent Rights as it sees fit.8.2Notice. If either Party becomes aware of any infringement from the sale of a product, anywhere in the world, ofany Valid Claim included in Arcturus Patent Rights, Joint Patent Rights or JPI Patent Rights in HBV and, if anOption is exercised, the applicable Option Disease Area, then that Party shall notify the other Party within […***…] days of learning of such infringement.***Confidential Treatment Requested20 EXECUTION COPY 8.3Infringement of Arcturus Patent Rights. If any infringement by a non-Party of an Arcturus Product-SpecificPatent or Joint Patent Right arises from registration, development, manufacture, use, sale, or importation of acompound or product in HBV and, if an Option is exercised, the applicable Option Disease Area, JPI may no laterthan […***…]* months after JPI learns of that infringement take action to stop that infringement or commence aProceeding against a non‑Party infringer. If JPI does not do so, Arcturus may do so. If any infringement by anon‑Party of an Arcturus Patent that covers the composition or an approved use of a Licensed Compound orLicensed Product and is not an Arcturus Product-Specific Patent, arises from Competitive Infringement, theParties shall meet to discuss what action, if any, to take. Arcturus shall consider any request by JPI that Arcturuscommence a Proceeding against a Non‑Party infringer with respect to Competitive Infringement, but Arcturusshall have the final decision-making authority as to whether to commence any such Proceeding. JPI shall notprovide any communication or notice to any non‑Party claiming or alleging that the conduct of such non‑Partyinfringes, or may infringe, any Arcturus Patent Right that is not an Arcturus Product-Specific Patent. A Party thatcommences a Proceeding under this Section 8.3 shall pay all expenses of that Proceeding. The other Party shallcooperate with that Party in any such Proceeding, including by joining as a party plaintiff at that Party’s writtenrequest, and may consult with that Party and participate in and be represented by independent counsel in thatProceeding at its own expense. That Party shall not, without the other Party’s prior written consent, enter into anysettlement or consent decree that requires any payment by or admits or imparts any other liability to the otherParty or admits the invalidity or unenforceability of any such Arcturus Patent Right. 8.4Information Rights. A Party that commences a Proceeding shall keep the other Party reasonably informed of allmaterial developments in that Proceeding.8.5Recoveries in JPI Actions. If either Party recovers anything in a Proceeding commenced by JPI, then, to theextent such recovery is attributable to Competitive Infringement or to infringement of any Joint Patent Right, thatParty shall allocate such recovery as follows: first, to each Party for its out-of-pocket litigation expenses incurredin that Proceeding; then as follows:8.5.1if that recovery was based on lost sales of a Licensed Product, to Arcturus in an amount equal to the royalty thatit would have been paid for those sales in the one or more countries where the infringement occurred, with JPIreceiving any remaining portion of that recovery; and8.5.2in all other circumstances, […***…]% of any remaining portion to JPI and […***…]% to Arcturus.8.6Recoveries in Arcturus Actions. If either Party recovers anything in a Proceeding commenced by Arcturus,then, to the extent such recovery is attributable to Competitive Infringement or to infringement of any Joint PatentRight, that Party shall allocate such recovery as follows: first, to each Party for its out-of-pocket litigation expensesincurred in that Proceeding; then as follows:***Confidential Treatment Requested21 EXECUTION COPY 8.6.1to the extent the recovery is attributable to lost sales of a Licensed Product (or lost profits or a reasonableroyalty with respect thereto, as applicable), […***…]*% to Arcturus and […***…]% to JPI; and8.6.2[…***…]% of any remaining portion to Arcturus and […***…]% to JPI.8.7Infringement by a Party of Third Party Patent Rights. If a Party learns that a Third Party alleges that a Party’suse, development, manufacture, or commercialization of any Licensed Compound or Licensed Product infringesa Third Party’s Patent Right or other intellectual property rights, that Party shall promptly notify the otherParty. The Party that is alleged to infringe the Third Party’s Patent Right or intellectual property may takewhatever action it deems appropriate in response to that allegation and will be responsible for all damages,costs, and expenses arising from that action.8.8Patent Certifications. Each Party shall promptly notify the other if it becomes aware of any certification filed inaccordance with 21 U.S.C. section 355(b)(2)(A) or 21 U.S.C. section 355(j)(2)(A)(vii) or any successor orequivalent law regarding biologic products in the U.S. or any other country claiming that an Arcturus Patent RightCovering any Licensed Product, or a Joint Patent Right, is invalid or that use, development, manufacture, orcommercialization of a Licensed Product by a Non‑Party will not infringe any Arcturus Patent Right or JointPatent Right.8.9Patent Term Restoration. Arcturus shall obtain patent term restoration, supplemental protection certificates, orthe equivalent in all countries (including under 35 U.S.C. § 156 or any successor or equivalent law in the U.S. orany other country) with respect to Arcturus Product-Specific Patents identified by JPI that Cover the chemicalcomposition of matter and use of Licensed Products, provided that JPI shall have the first right to obtain patentterm restoration, supplemental protection certificates, or the equivalent in all countries (including under 35 U.S.C.§ 156 or any successor or equivalent law in the U.S. or any other country) if it decides to seek such restorationwith respect to a JPI Patent Right or Joint Patent Right. JPI shall cooperate with Arcturus in seeking such patentterm restoration, supplemental protection certificates, or the equivalent, including by providing information andsigning documents. JPI may assume this responsibility at its expense and Arcturus will cooperate with suchefforts. Arcturus shall have no obligation to seek or obtain, or to permit JPI to seek or obtain, patent termrestoration, supplemental protection certificates, or the equivalent in any country (including under 35 U.S.C. § 156or any successor or equivalent law in the U.S. or any other country) with respect to any Arcturus Patent Right thatis not an Arcturus Product-Specific Patent. 8.10Orange Book Information. JPI will be responsible for all submissions of patent information pertaining to eachLicensed Product in accordance with 21 U.S.C. § 355(b)(1)(G) (or any amendment or successor statute thereto),any similar statutory or regulatory requirement enacted in the future regarding biologic products, or any similarstatutory or regulatory requirement in any non-U.S. country or other regulatory jurisdiction. ***Confidential Treatment Requested22 EXECUTION COPY 8.11Non-Party Licensor Rights. If a non-Party licensor has retained any right to enforce or otherwise be involved inthe activities specified in this Article 8 for any Arcturus Patent Rights, Arcturus shall use reasonable efforts tocause that non‑Party licensor to take the actions specified in this Article 8 in a manner consistent with the one ormore agreements by which that non‑Party retains those rights, but Arcturus will not be deemed to be in breach ofits obligations under this Article 8 if despite using reasonable efforts it is unable to comply with those obligationsbecause of actions taken or not taken by that non‑Party licensor.9CONFIDENTIALITY9.1Maintaining Confidentiality. During the term of this Agreement and for […***…]* years thereafter, the Recipientshall not disclose Confidential Information except as contemplated in this Agreement or use ConfidentialInformation other than for purposes of contemplated by this Agreement.9.2“Confidential Information” means information disclosed by one Party to the other Party (and DerivedInformation) that is not, in each case, Excluded Information.9.3“Derived Information” means information (including notes, analyses, compilations, and summaries) that is inwriting or embodied in an electronic medium and that the Recipient or any of the Recipient’s Representativesderive, in whole or in part, from any information described in Section 9.2.9.4“Disclosing Party” means a Party that discloses Confidential Information to a Recipient.9.5“Excluded Information” means information that the Recipient can establish by competent evidence comeswithin any of the following categories:9.5.1information that is or becomes public other than as a result of the Recipient’s breach of any obligation underthis Agreement;9.5.2information that, when it is disclosed to the Recipient, is already in the possession of the Recipient or any of theRecipient’s Representatives as the result of disclosure by a Person that was not then under an obligation to theDisclosing Party to keep that information confidential;9.5.3information that, after it is disclosed to the Recipient under this Agreement, is disclosed to the Recipient or anyof the Recipient’s Representatives by a Person that was not then under an obligation to the Disclosing Party tokeep that information confidential; and9.5.4information that the Recipient develops independently, as evidenced by contemporaneous written records,without any use of or reliance on Confidential Information disclosed by the Disclosing Party to the Recipient,whether before or after the Disclosing Party discloses such equivalent information to the Recipient.9.6“Recipient” means a Party that receives Confidential Information.***Confidential Treatment Requested23 EXECUTION COPY 9.7Disclosure Procedures. For information to constitute Confidential Information, the following conditions must besatisfied: (a) if that information is contained in a printed document, computer disc or other electronic storagedevice, or is disclosed by transmitting it in an electronic file (including by email), or is otherwise in a recordedform, it must be marked “Confidential”; and (b) if that information is disclosed orally or visually, or is otherwise notdisclosed in recorded form, then no later than […***…]* days after it is disclosed the Disclosing Party mustconfirm, in a notice to the Recipient describing the information, that that information is confidential.9.8Disclosure to Representatives. Any individual to whom the Disclosing Party discloses Confidential Informationin accordance with this Agreement may disclose that Confidential Information only to Representatives of theRecipient who require that Confidential Information for purposes contemplated in this Agreement, on conditionthat before Confidential Information is disclosed to any individual in accordance with this Section 9.8, theRecipient notifies that individual of the confidential nature of the Confidential Information and that individual isparty to a written confidentiality agreement with the Recipient (and enforceable by the Disclosing Party) in whichthat individual promises not to disclose any Confidential Information or use any Confidential Information otherthan for purposes contemplated in this Agreement.9.9Precautions Against Unauthorized Disclosure or Use. The Recipient shall take precautions to preventdisclosure or use of Confidential Information other than as authorized in this Agreement. Those precautions mustbe at least as effective as those taken by the Recipient to protect its own Confidential Information or those thatwould be taken by a reasonable person in the position of the Recipient, whichever are greater. If a non-Partymisappropriates Confidential Information from the Recipient, the Recipient will be liable to the Disclosing Partyfor that misappropriation to the same extent that the Recipient would have been had the Recipient disclosed orused that Confidential Information other than as authorized in this Agreement.9.10Unauthorized Disclosure or Use by Representatives. If any one or more Representatives of the Recipientdisclose or use Confidential Information other than as authorized in this Agreement, the Recipient will be liable tothe Disclosing Party for that disclosure or use to the same extent that the Recipient would have been had theRecipient disclosed or used that Confidential Information.9.11Notification of Unauthorized Disclosure or Use. If the Recipient becomes aware of disclosure or use ofConfidential Information other than as authorized in this Agreement, the Recipient shall promptly notify theDisclosing Party of that disclosure or use and shall cooperate with the Disclosing Party in mitigating any adverseconsequences to the Disclosing Party of that disclosure or use.9.12Permitted Disclosure. It will not constitute breach of the Recipient’s obligations under this Agreement for theRecipient or any of its Representatives to disclose Confidential Information as follows:***Confidential Treatment Requested24 EXECUTION COPY 9.12.1as necessary for Prosecuting and Maintaining Patent Rights in accordance with this Agreement;9.12.2as necessary in connection with seeking Regulatory Approval of one or more Licensed Products in accordancewith this Agreement; and9.12.3to actual or prospective lenders, acquirers, merger counterparties, or investors in equity, and to advisors to anyof the foregoing, as necessary for evaluating a financing, acquisition, merger, or investment transactioninvolving one or more of the Recipient and any of its Affiliates, on condition that each such Person enters into awritten confidentiality agreement with the Recipient in which that Person promises not to disclose thatConfidential Information or use that Confidential Information other than as contemplated in this clause and thatotherwise contains terms that are reasonable in the circumstances.9.13Disclosure in Connection with Clinical Trials. It will not constitute breach of the Recipient’s obligations underthis Agreement for the Recipient or any of its Representatives to disclose Confidential Information in connectionwith clinical trials of a Licensed Product as required by a Government Body or other Person or in accordance withthe Recipient’s policies for transparency of clinical trial results with the public.9.14Disclosure Required by Law. It will not constitute breach of the Recipient’s obligations under this Agreementfor the Recipient or any of its Representatives to disclose Confidential Information as required by law providedthat if any proceeding is brought to compel the Recipient or any of its Representatives to disclose ConfidentialInformation or if the Recipient or any of its Representatives is otherwise required by law (including regulationspromulgated by the Securities and Exchange Commission and the rules of a securities exchange or electronicquotation system) to disclose any Confidential Information, the Recipient shall do the following:9.14.1unless by doing so the Recipient would violate any law or an order of a Government Body, notify the DisclosingParty of that proceeding or that requirement, as the case may be, promptly after learning of it, taking intoaccount for purposes of determining the Recipient’s promptness any time constraints that the Disclosing Partywould face in bringing a proceeding to prevent that disclosure or to protect the confidentiality of any informationthat is disclosed; and9.14.2at the Recipient’s expense cooperate with the Disclosing Party in any proceeding the Disclosing Party brings toprevent that disclosure or to protect the confidentiality of any information that is disclosed.9.15Nondisclosure of Restricted Information. The Disclosing Party shall not disclose to the Recipient or any of itsRepresentatives any information if doing so would cause the Disclosing Party to breach a duty to any otherPerson to keep that information confidential or would cause the Disclosing Party to violate any law or any order ofa Government Body.25 EXECUTION COPY 9.16No License. The Disclosing Party’s disclosure of Confidential Information will not constitute a grant to theRecipient or any of its Representatives of a license to, or any other interest in, any intellectual property of theDisclosing Party.9.17No Statement as to Accuracy. Neither Party is making in this Agreement any statement as to accuracy of anyConfidential Information. The Recipient acknowledges that because the Recipient has not relied on, and will notbe relying on, any statements made by the Disclosing Party to the Recipient as to accuracy of any ConfidentialInformation, the Recipient will have no basis for bringing any claim for fraud in connection with any suchstatements.9.18Publications. Either Party (that Party, the “Publishing Party”) may submit for publication in a journal or forpresentation at a conference results of the Research Program if the following conditions have been satisfied:9.18.1the JRC (if it has not been disbanded) has reviewed that analysis;9.18.2the other Party has approved that analysis, with unreasonable withholding of approval being deemed approval;9.18.3the Publishing Party has provided a copy of the proposed publication or presentation to the other Party;9.18.4the other Party has by notice to the Publishing Party approved the proposed publication or presentation, withunreasonable withholding of approval being deemed approval, or in the […***…]* days after receiving a copy ofthe proposed publication or presentation the other Party has not notified the Publishing Party of its approval ordisapproval;9.18.5at least […***…] days before submitting the proposed publication or presentation to a non-Party, the PublishingParty has submitted a copy to the other Party to allow the other Party to comment on the content and timing ofthe proposed publication or presentation;9.18.6the Publishing Party has complied with any request of the other Party to delay publication for […***…] days ormore to allow the other Party to take steps to protect its or its Affiliates’ Know-How;9.18.7the Publishing Party has at the request of the other Party deleted from the proposed publication or presentationany Confidential Information of the other Party; and9.18.8the Publishing Party has acknowledged in the proposed publication or presentation the other Party’scontributions, unless the other Party has instructed the Publishing Party in writing to omit any suchacknowledgment.After the conditions stated in this Section 9.18 have been approved with respect to a given analysis, thePublishing Party will not be required to satisfy those conditions again when resubmitting that analysis to ajournal or a conference.9.19Nondisclosure of Terms. During the term of this Agreement and for […***…] years thereafter, each Party shallnot disclose to any other Person the terms of***Confidential Treatment Requested26 EXECUTION COPY this Agreement, except to the extent expressly permitted in this Agreement, in which case that disclosure will notconstitute a breach of the Party in question’s obligations under this Section 9.19.9.20Press Releases. Except (a) with respect to the Arcturus Press Release attached hereto as the Arcturus PressRelease Exhibit the time for release of which shall be agreed by the Parties, without the prior approval of JPI,(b) as expressly permitted by Article 9, or (c) as required by applicable law or the listing rules of any stockexchange on which securities issued by a Party or its Affiliates are traded, neither Party shall make any publicstatements, by press release or otherwise, concerning this Agreement. The foregoing shall not prohibit or restrictJPI’s and its Affiliates’ and sublicensees’ Exploitation (and any communications regarding such Exploitation) ofLicensed Compounds or Licensed Products, including, without limitation, any launch, marketing, advertising,promotional or other commercialization activities with respect to Licensed Compounds or Licensed Products. If aParty is required by applicable law or the listing rules of any stock exchange on which securities issued by it or itsAffiliates are traded to make any public statement, public filing or other public disclosure concerning thisAgreement, it shall: (i) except where impracticable, give reasonable advance notice to the other Party of suchrequired disclosure; (ii) disclose only the information that such Party or its Affiliate determines on advice ofcounsel is required to be disclosed; and (iii) to the extent confidential treatment may be obtained for theinformation required to be disclosed, use reasonable efforts to secure such confidential treatment. Except asprovided above in this Section 9.20, if Arcturus wishes to make a public statement disclosing achievement of aMilestone Event or payment of a Milestone Amount, Arcturus shall provide JPI with a copy of the proposed publicstatement. Arcturus may issue the public statement once JPI has approved it in writing. If JPI does not provideArcturus with comments in the […***…]* days after the day JPI received the proposed public statement, JPI will bedeemed to have approved that public statement. If JPI provides Arcturus with comments during that period, theParties shall discuss them. Arcturus or JPI may subsequently publicly disclose any information previouslycontained in a public statement approved in accordance with this Article 9.10STATEMENT OF FACTS; DISCLAIMERS10.1By Each Party. Each Party states that the following facts are accurate as of the Effective Date:10.1.1it is an entity duly organized, validly existing, and in good standing under the laws of its jurisdiction oforganization, with all power and authority necessary to own or use its assets and conduct its business as it isnow being conducted;10.1.2it is qualified to do business in all jurisdictions in which the nature of the business that it conducts makesqualification necessary and where failure to so qualify would have a material adverse effect on its ability toperform its obligations under this Agreement;***Confidential Treatment Requested27 EXECUTION COPY 10.1.3it has full power and authority to enter into this Agreement and to perform its obligations under this Agreement;10.1.4its entry into this Agreement and performance by it of its obligations under this Agreement have been dulyauthorized by its governing body;10.1.5it has the consent or authorization of any Person, including any permit issued by any Government Body and theconsent of any counterparty to any contract to which it is party, that it requires in connection with its entry intothis Agreement and its performance of its obligations under this Agreement;10.1.6its entry into this Agreement and its performance of its obligations under this Agreement do not: (a) violate anyprovision of its organizational documents as currently in effect; (b) conflict with, result in a breach of, orconstitute a default under any contract to which it is a party or by which any of its properties or assets arebound; or (c) conflict with or violate any law or order to which it is subject;10.1.7no Proceeding is pending or, to its knowledge, threatened against it, except for any Proceeding that would notreasonably be expected to have, individually or in the aggregate, a material adverse effect on its ability toperform its obligations under this Agreement, and it is not aware of any facts that would be reasonably likely toresult in any such Proceeding; and10.1.8it is not currently in violation of any law or order, except for any law or order the violation of which would notreasonably be expected to have, individually or in the aggregate, a material adverse effect on its ability toperform its obligations under this Agreement.10.2By Arcturus. Arcturus states that the following facts are accurate as of the Effective Date:10.2.1the Arcturus Patent Rights listed in the Arcturus Patent Rights Exhibit are existing, and the issued Patent Rightsin the Arcturus Patent Rights Exhibit are not, to Arcturus’s knowledge, invalid or unenforceable, in whole or inpart;10.2.2Arcturus is the sole and exclusive owner of, or has valid and enforceable rights to, Arcturus Patent Rights listedin the Arcturus Patent Rights Exhibit, and Arcturus has the right to grant JPI the license set forth in Section 4.1,free and clear of all encumbrances, security interests, options and licenses;10.2.3except as set forth in the Granted Rights Exhibit, no license granted by Arcturus to any non-Party conflicts withthe license granted to JPI under this Agreement, and the Granted Rights Exhibit is a complete list of rightsunder Arcturus Technology granted to non‑Parties with respect to HBV NA Therapeutics, […***…]* NATherapeutics and Respiratory Disease Virus NA Therapeutics. During the term of this Agreement, Arcturusshall not grant any non‑Party any license that conflicts with the license granted to JPI herein;10.2.4to the knowledge of Arcturus, neither the practice of the Arcturus Technology by Arcturus as contemplated bythis Agreement, nor the development, manufacture and commercialization of any NA Therapeutics Controlledby Arcturus as of the***Confidential Treatment Requested28 EXECUTION COPY Effective Date, infringes any Patent Right or misappropriates any Know-How owned or possessed by any ThirdParty; and10.2.5no Proceeding is pending or, to its knowledge, threatened against it relating to the Arcturus Technology, and itis not aware of any facts that would be reasonably likely to result in any Proceeding.10.3Disclaimers. Each Party acknowledges:10.3.1that the Research Program and development and commercialization of products under this Agreement mightfail and that any such failure will not in itself constitute a breach of this Agreement;10.3.2neither Party is making any warranty of merchantability or any other warranty with respect to any ArcturusPatent Rights, Arcturus Know-How, JPI Patent Rights, JPI Know-How, Joint Patent Rights, Joint Know-How,Licensed Compounds, Materials, or Licensed Products, other than the warranties expressly set forth in thisAgreement; and10.3.3neither Party will be liable to the other for any indirect, punitive, special, or consequential damages, lost profitsor other non-direct damages in connection with this Agreement even if that Party has been informed or shouldhave known of the possibility of such damages, except that this Section 10.3.3 will not apply to either Party’sobligations under Article 11.11INDEMNIFICATION11.1Indemnification by JPI. With respect to any Proceeding brought by a Third Party (other than an ArcturusIndemnitee) against one or more Arcturus Indemnitees arising out of this Agreement or development orcommercialization by JPI or any of its Affiliates or sublicensees of the Licensed Compounds or LicensedProducts (each, an “Arcturus Nonparty Claim”), JPI shall indemnify those Arcturus Indemnitees against allIndemnifiable Losses arising out of that Proceeding, except to the extent that Arcturus or one of the ArcturusIndemnitees negligently or intentionally caused those Indemnifiable Losses.11.2Indemnification by Arcturus. With respect to any Proceeding brought by a Third Party (other than a JPIIndemnitee) against one or more JPI Indemnitees arising out of this Agreement or development orcommercialization by Arcturus or any of its Affiliates, JPIs, or sublicensees of the Terminated Compounds, Licensed Compounds, or Licensed Products (each, a “JPI Nonparty Claim”), Arcturus shall indemnify those JPIIndemnitees against all Indemnifiable Losses arising out of that Proceeding, except to the extent that JPI or one ofthe JPI Indemnitees negligently or intentionally caused those Indemnifiable Losses.11.3Procedures. To be entitled to indemnification under Section 11.1 or 11.2, an Indemnitee subject to any ThirdParty Claim must promptly (and in any event no later than […***…]* days after the Indemnitee first knew of thatProceeding) notify the Indemnifying Party of that Third Party Claim and deliver to the Indemnifying Party a copy ofall legal pleadings with respect to the Third Party Claim. If the***Confidential Treatment Requested29 EXECUTION COPY Indemnitee fails to timely notify the Indemnifying Party of a Third Party Claim, the Indemnifying Party will berelieved of its indemnification obligations with respect to that Third Party Claim to the extent that the IndemnifyingParty was prejudiced by that failure and the Indemnifying Party will not be required to reimburse the Indemniteefor any Litigation Expenses the Indemnitee incurred during the period in which the Indemnitee failed to notify theIndemnifying Party.11.3.1To assume the defense of a Third Party Claim, the Indemnifying Party must notify the Indemnitee that it is doingso. Promptly thereafter, the Indemnifying Party shall retain to represent it in the Third Party Claim independentlegal counsel that is reasonably acceptable to the Indemnitee.11.3.2An Indemnitee is entitled to participate in the defense of a Third Party Claim. An Indemnitee may defend aThird Party Claim with counsel of its own choosing and without the Indemnifying Party participating if: (a) theIndemnifying Party notifies the Indemnitee that it does not wish to defend the Third Party Claim; (b) by midnightat the end of the […***…]* day after the Indemnitee notifies the Indemnifying Party of the Third Party Claim theIndemnifying Party fails to notify the Indemnitee that it wishes to defend the Third Party Claim; or(c) representation of the Indemnifying Party and the Indemnitee by the same counsel would, in the opinion ofthat counsel, constitute a conflict of interest.11.3.3The Indemnifying Party shall pay any Litigation Expenses that an Indemnitee incurs in connection with defenseof the Third Party Claim before the Indemnifying Party assumes the defense of that Third Party Claim, exceptwith respect to any period during which the Indemnitee fails to timely notify the Indemnifying Party of that ThirdParty Claim. The Indemnifying Party will not be liable for any Litigation Expenses that a Indemnitee incurs inconnection with defense of a Third Party Claim after the Indemnifying Party assumes the defense of that ThirdParty Claim, other than Litigation Expenses that the Indemnitee incurs in employing counsel in accordance withSection 11.3.2 which Litigation Expenses the Indemnifying Party shall pay promptly as they are incurred.11.3.4After the Indemnifying Party assumes the defense of a Third Party Claim, the Indemnifying Party may contest,pay, or settle the Third Party Claim without the consent of the Indemnitee only if that settlement: (a) does notentail any admission on the part of the Indemnitee that it violated any law or infringed the rights of any Person;(b) has no effect on any other claim against the Indemnitee; (c) provides as the claimant’s sole relief monetarydamages that are paid in full by the Indemnifying Party; and (d) requires that the claimant release theIndemnitee from all liability alleged in the Third Party Claim. After the Indemnifying Party assumes the defenseof a Third Party Claim, the Indemnifying Party will have no further obligations under this Section 11.3 withrespect to the Third Party Claim if the Indemnitee contests, pays, or settles the Third Party Claim without theconsent of the Indemnifying Party.11.4Definitions. In this Agreement, the following definitions apply:***Confidential Treatment Requested30 EXECUTION COPY 11.4.1 “Arcturus Indemnitee” means Arcturus, any Affiliate of Arcturus, each Representative of any of the foregoing,and each of the heirs, executors, successors, and assignees of any of the foregoing.11.4.2“Indemnifiable Losses” means the aggregate of Losses and Litigation Expenses.11.4.3“Indemnitee” means an Arcturus Indemnitee or a JPI Indemnitee.11.4.4“JPI Indemnitee” means JPI, any Affiliate of JPI, each Representative of any of the foregoing, and each of theheirs, executors, successors, and assignees of any of the foregoing.11.4.5“Litigation Expense” means any reasonable out-of-pocket expense incurred in defending a Proceeding or inany related investigation or negotiation, including court filing fees, court costs, arbitration fees, witness fees,and attorneys’ and other professionals’ fees and disbursements.11.4.6“Loss” means any amount awarded in, or paid in settlement of, any Proceeding, including any interest butexcluding any Litigation Expenses.11.4.7“Proceeding” means any judicial, administrative, or arbitration action, suit, claim, investigation, or proceeding.11.4.8“Representative” means, with respect to an entity, any of that entity’s directors, officers, employees, agents,actual or potential consultants, actual or potential advisors, and other representatives.11.4.9“Nonparty Claim” means an Arcturus Nonparty Claim or a JPI Nonparty Claim.12TERM AND TERMINATION12.1Automatic Termination. This Agreement will terminate when JPI owes Arcturus no more royalty payments onany Licensed Product.12.2Termination by Arcturus. In the following circumstances, Arcturus may by notice to JPI terminate thisAgreement:12.2.1JPI breaches any obligation under this Agreement to make an undisputed payment and fails to make thatpayment no later than 60 days after Arcturus notifies it of that breach; or12.2.2JPI materially breaches this Agreement and fails to cure such breach within 60 days after Arcturus notifies it ofthat breach, except that allegations of JPI’s breach of its obligation to use Commercially Reasonable Efforts todevelop or commercialize Licensed Products will be solely subject to the conditions and procedures set out inSection 14.4.12.3Termination by JPI. In the following circumstances, JPI may by notice to Arcturus terminate this Agreement:12.3.1On a Licensed Product-by-Licensed Product and country-by-country basis, or in its entirety, in each case upon60 days’ written notice;31 EXECUTION COPY 12.3.2If Arcturus materially breaches this Agreement and fails to cure such breach within 60 days after JPI notifies it ofthat breach; or12.3.3There occurs a Change of Control of Arcturus.12.4Effects of Any Termination. In the event of any termination of this Agreement in its entirety (other thanautomatic termination in accordance with Section 12.1), then in each case all rights and obligations of each partyunder this Agreement will terminate, including all rights, licenses, and sublicenses granted by a party to the other,except (a) that the license granted to JPI under Section 4.3.2 shall survive solely with respect to Arcturus Know-How (and shall terminate with respect to Arcturus Patents) and (b) as provided in Sections 12.5 and 12.6. 12.5Effects of Certain Terminations. 12.5.1In the event that JPI terminates this Agreement in its entirety prior to completion of all Research Programs, JPI[…***…]* during the […***…]month period beginning on JPI’s delivery of notice of termination to Arcturus asspecified in the Joint Research Plan and […***…] (or, if less than […***…] months […***…], such […***…]obligation being subject to […***…]. Arcturus will use Commercially Reasonable Efforts to […***…]. Notwithstanding the foregoing, in the event that JPI delivers Arcturus a written notice of termination ofthis Agreement prior to […***…], JPI shall […***…] pursuant to this Section 12.5.1.12.5.2Solely in the event of any termination of this Agreement by JPI in its entirety or by Arcturus under Section 12.2,in each case prior to the First Commercial Sale of a Licensed Product:(a) JPI shall, and it hereby does, grant to Arcturus an exclusive, worldwide, royalty-free, perpetual license, withthe right to sublicense through multiple tiers, under JPI Licensed Patent Rights and any JPI formulation,delivery or manufacturing technology actively utilized in a Licensed Compound or Licensed Product underactive development by JPI, solely to Exploit Licensed Compounds and Licensed Products (other than anyCombination Product or Bundled Product) in the Field on the terms and conditions of this Agreement;(b) JPI shall promptly transfer to Arcturus all available data, information, and regulatory filings relating toLicensed Compounds and Licensed Products and shall thereafter provide additional such available data,information, and regulatory filings at the reasonable written request of Arcturus, and JPI shall transfer toArcturus all (or, as requested by Arcturus, a specified portion of)***Confidential Treatment Requested32 EXECUTION COPY available quantities of Licensed Compounds and Licensed Products at a price equal to JPI’s fully burdened cost of thosesupplies;(c) JPI shall for […***…]* days after the effective date of termination, at Arcturus’s written request, reasonablyassist at its own expense in the orderly and prompt transition of sponsorship and management of clinical trialsthen being conducted to Arcturus; and(d) if JPI was manufacturing, or having manufactured on its behalf, any Licensed Product, or the LicensedCompounds contained therein, prior to termination, then at Arcturus’s request and upon the pricing terms setforth below and other commercially reasonable terms, until the earlier of: (i) such time as Arcturus has securedanother source of Licensed Compound or Licensed Product that is able to meet Arcturus’s Licensed Productquality and quantity requirements; and (ii) […***…] months after such termination, JPI shall use commerciallyreasonable efforts to supply, or cause to be supplied, to Arcturus such quantities of Licensed Product (orLicensed Compound contained therein) as Arcturus may reasonably require for the Exploitation of LicensedProducts in the Field, subject to payment by Arcturus of […***…]% of JPI’s fully-burdened cost of such supplies;provided that Arcturus shall use commercially reasonable efforts to secure another source of supply as soon asreasonably practicable. In no event shall Arcturus as a result of this Section 12.5.2 have any right or license with respect to any activetherapeutic ingredient that is not a Licensed Compound nor will Arcturus have any right to Exploit CombinationProducts that contain any materials Covered by any Patent Right or other proprietary right of a non-Party. JPIreserves all rights under the JPI Licensed Patent Rights other than the rights exclusively granted to Arcturusunder subsection (a) of this Section 12.5.2. JPI will not be required to initiate or continue, any clinical trial as toany Licensed Compound or Licensed Product in the event of a termination of the Agreement. If the Partiesagree to transition any clinical trials to Arcturus, Arcturus shall reimburse JPI for any costs incurred by JPI intransitioning such clinical trials to Arcturus, and Arcturus shall be responsible for reimbursing JPI […***…]% ofthe costs incurred by JPI prior to such transition in connection with the conduct of such clinical trials. ShouldJPI be obligated to any Third Party to pay milestones or royalties with respect to any Licensed Compound orLicensed Product then, prior to JPI granting a license to the same to Arcturus hereunder, Arcturus shall agree inwriting to pay to JPI all royalties and milestone payments that become due by JPI to the Third Party on accountof use by Arcturus or its licensee.12.6Accrued Rights and Obligations; Survival. Termination of this Agreement will not relieve either Party of anyobligation or liability accruing prior to such termination, nor shall termination of this Agreement preclude eitherParty from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect tobreach of this Agreement. In addition, the Parties’ rights and obligations under Sections 4.3.2 (solely with respectto Arcturus Know-How), 4.7, 5.12, 5.13, 5.16, 5.18, 6.1, 6.4, 10.3, 12.4, 12.5, 12.6 and 12.7 and Articles 9***Confidential Treatment Requested33 EXECUTION COPY (excluding Section 9.18), 11, 14 and 15 of this Agreement shall survive termination of this Agreement.12.7Rights in Bankruptcy. The Parties intend that all rights and licenses granted under this Agreement by one Partyto the other are for all purposes of section 365(n) of Title 11 of the U.S. Bankruptcy Code licenses of rights to“intellectual property” as defined in section 101 of Title 11. During the term of this Agreement, each Party maycreate and maintain current copies to the extent practicable of all intellectual property licensed to it under thisAgreement. If there occurs a Bankruptcy Event with respect to either Party (that Party, the “Bankrupt Party”), thefollowing will apply: each Party will retain and may fully exercise all of its rights and elections under the U.S.Bankruptcy Code with respect to any intellectual property licensed to it under this Agreement, the other Party willhave all rights stated in section 365(n) of Title 11, if in its capacity as licensor of intellectually property under thisAgreement the Bankrupt Party rejects this Agreement in any proceeding under the U.S. Bankruptcy Code, theother Party will be entitled to a complete duplicate of (or complete access to, as appropriate) that intellectualproperty and all embodiments of that intellectual property and the Bankrupt Party shall deliver to the other Party acomplete duplicate of that intellectual property if one is not already in the other Party’s possession, the BankruptParty shall not interfere with the other Party’s rights to intellectual property and all embodiments of intellectualproperty and shall assist and not interfere with the other Party in obtaining intellectual property and allembodiments of intellectual property (including all tangible, intangible, electronic or other embodiments of rightsand licenses under this Agreement, including all compounds and products embodying intellectual property,Licensed Compounds, Licensed Products, regulatory filings and related rights and technology) from anyoneelse. All rights of the Parties under this Section 12.7 and under section 365(n) of Title 11 are in addition to andnot in substitution of any and all other rights, powers, and remedies that each Party might have under thisAgreement, Title 11, and any other law, the right of access to any intellectual property (including all embodimentsof that intellectual property, to the extent protected by non-bankruptcy law) of the Bankrupt Party under thisAgreement, and the right to contract directly with any non-Party to complete the work contracted to the BankruptParty. Any intellectual-property rights granted under this Section 12.7 are subject to the licenses grantedelsewhere in this Agreement and the payment obligations stated in Sections 5.3, 5.4, 5.5 and 5.7.13DEFINITIONSIn this Agreement, the following definitions apply:13.1“Affiliate” means, with respect to any given Person, any other Person at the time directly or indirectly controlling,controlled by or under common control with that Person. For purposes of this definition, “control” means thepossession, directly or indirectly, of the power to direct or cause the direction of the management and34 EXECUTION COPY policies of a Person, whether through ownership of voting securities, by contract or otherwise.13.2“After-Acquired Third-Party IP” means any Patent Right or Know-How of a Third Party with respect to which, ineach case, Arcturus first obtains a right to grant access, or a license or sublicense, from such Third Party after theEffective Date, under an agreement that would obligate Arcturus to pay royalties and/or milestone payments tosuch Third Party with respect to JPI’s Exploitation of such Patent Right or Know-How were it to be licensed to JPIhereunder.13.3“API” means, in the case of a Combination Product, any of the active pharmaceutical ingredients in suchCombination Agreement, including the Licensed Compound.13.4“Arcturus-Controlled Affiliate” means a Person controlled by Arcturus where “control” means the possession,directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,whether through ownership of voting securities, by contract or otherwise. 13.5“Arcturus Delivery Technologies” or “ADT” means any Arcturus proprietary technology that can be combinedwith NA Therapeutics to enable or improve delivery of such NA Therapeutics (including Arcturus’ proprietaryLUNAR™ lipid-enabled delivery system).13.6“Arcturus Know-How” means Know-How that Arcturus and Arcturus-Controlled Affiliates Control (other thanthrough grant of a license by an Affiliate of JPI) that is necessary or useful for the research, discovery,development, manufacture, commercialization or other Exploitation of a NA Therapeutic, Licensed Compound orLicensed Product but does not include Joint Know-How.13.7“Arcturus Patent Right” means any Patent Right (other than a Joint Patent Right) that Arcturus or any Arcturus-Controlled Affiliates Controls other than through the grant of a license by JPI and that is necessary or useful forthe research, discovery, development, manufacture, commercialization or other Exploitation of a NA Therapeutic,Licensed Compound or Licensed Product.13.8“Arcturus Platform Technologies” means: (a) any Arcturus proprietary technology that can be combined withNA Therapeutics to deliver or distribute the NA Therapeutics to enable or improve delivery of such NATherapeutics (including Arcturus’ proprietary LUNAR™ lipid-enabled delivery system); and (b) any Arcturusproprietary chemistry that may be used to modify NA Therapeutics for improved or enhanced potency, safety,stability or other physicochemical properties (including, without limitation, Arcturus’ proprietary Unlocked NucleicAcid (UNA) chemistry (“UNA Technology”)). NA Therapeutics are not Arcturus Platform Technologies.13.9“Arcturus Product-Specific Patent” means Arcturus Patent Rights that claim: the composition or formulation ofa Selected NA Therapeutic, Development Candidate, Licensed Compound or Licensed Product or, if filed duringthe35 EXECUTION COPY Research Term, an NA Therapeutic for the treatment of HBV (or Option Disease Area, as applicable); or anymethod of using or making a Selected NA Therapeutics for the treatment of HBV (or Option Disease Area, asapplicable), Development Candidate, Licensed Compound or Licensed Product or, if filed during the ResearchTerm, any method of using or making an NA Therapeutic for the treatment of HBV (or Option Disease Area, asapplicable). However, “Arcturus Product-Specific Patents” exclude any Arcturus Patent Right that does notclaim an NA Therapeutic, Development Candidate, Licensed Compound, or Licensed Product, the manufactureor use of a NA Therapeutic, Development Candidate, Licensed Compound, or Licensed Product, or the treatmentof HBV (or Option Disease Area, as applicable) and claims:13.9.1subject matter broadly applicable to therapeutics that are not NA Therapeutics, Selected NA Therapeutics,Development Candidates, Licensed Compounds or Licensed Products for the treatment of HBV (or OptionDisease Area, as applicable), provided that such Arcturus Patent Right does not specifically claim or describethe composition of matter or formulation of, or a method of making or using, an NA Therapeutic, Selected NATherapeutic, Development Candidate, Licensed Compound or Licensed Product for the treatment of HBV (orOption Disease Area, as applicable);13.9.2methods of use of therapeutics that are not NA Therapeutics, Selected NA Therapeutics, DevelopmentCandidates, Licensed Compounds or Licensed Products to treat or diagnose a disease, disorder or conditionother than for the treatment of HBV (or Option Disease Area, as applicable);13.9.3any therapeutic that is not an NA Therapeutic, Selected NA Therapeutics, Development Candidate, LicensedCompound or Licensed Product for the treatment of HBV (or Option Disease Area, as applicable), except that if:(i) such Arcturus Patent Right also claims the composition of matter or method of use of an NA Therapeutic (iffiled during the Research Term), Selected NA Therapeutic, Development Candidate or Licensed Compound forthe treatment of HBV (or Option Disease Area, as applicable); (ii) the earliest worldwide priority date to whichsuch Arcturus Patent Right is entitled is after […***…]*; and (iii) such Arcturus Patent Right does not claim anysubject matter described in subsection 13.9.1, 13.9.2 or 13.9.4 of this definition, then such Arcturus Patent Rightshall be deemed an “Arcturus Product-Specific Patent” for purposes of this Agreement; or13.9.4Arcturus Platform Technologies.13.10“Arcturus Technology” means Arcturus Patent Rights and Arcturus Know-How.13.11“Bankruptcy Event” refers, with respect to any Person, to occurrence of one or more of the following:13.11.1that Person commences a voluntary case under Title 11 of the United States Code or the correspondingprovisions of any successor laws;***Confidential Treatment Requested36 EXECUTION COPY 13.11.2anyone commences an involuntary case against that Person under Title 11 of the United States Code or thecorresponding provisions of any successor laws and either: (a) the case is not dismissed by midnight at the endof the […***…]* day after commencement; or (b) the court before which the case is pending issues an orderapproving the case; and13.11.3a court of competent jurisdiction appoints, or that Person makes an assignment of all or substantially all itsassets to, a custodian (as that term is defined in Title 11 of the United States Code or the correspondingprovisions of any successor laws) for that Person or all or substantially all its assets.13.12“Bundled Product” means a Licensed Product that is sold by JPI, its Affiliates or sublicensees “bundled” withone or more other products that are not Licensed Products, each in finished dosage form, and not a fixedcombination of a Licensed Product and one or more other products in a single finished product.13.13“Business Day” means any day that is not a Saturday, a Sunday, or a day on which banks are not open forbusiness in the place where an obligation has to be performed under this Agreement or, in case of obligations forwhich a place of performance is not specified (or cannot be reasonably inferred from the contents of thisAgreement), in San Diego, California.13.14“Calendar Month” means a financial month based on the Johnson & Johnson Universal Calendar (attachedhereto as the Johnson & Johnson Universal Calendar Exhibit) for that year, except that the first Calendar Monthfor the first Calendar Year extends from the date of this Agreement to the end of that Calendar Month and the lastCalendar Month extends from the first day of that Calendar Month until termination of this Agreement.13.15“Calendar Quarter” means a financial quarter based on the Johnson & Johnson Universal Calendar for that year,except that the first Calendar Quarter for the first Calendar Year extends from the date of this Agreement to theend of that Calendar Quarter and the last Calendar Quarter extends from the first day of that Calendar Quarteruntil termination of this Agreement.13.16“Calendar Year” means one year based on the Johnson & Johnson Universal Calendar for that year, except thatthe first Calendar Year extends from the date of this Agreement to the end of that Calendar Year and the lastCalendar Year extends from the first day of that Calendar Year until termination of this Agreement.13.17 “Change of Control” means, with respect to any Person other than an individual, occurrence of any of thefollowing:13.17.1a Person who is not a shareholder of that Person on the date of this Agreement (or a group of such Personsacting in concert) acquires, during a period of 12 consecutive entire months, shares of that Person representinga majority of the voting power of all shares of that Person having the right to vote for the election of directors;***Confidential Treatment Requested37 EXECUTION COPY 13.17.2a merger or consolidation of that Person with any other Person, other than the following: (a) a merger orconsolidation that would result in the voting securities of that Person outstanding immediately before thatmerger or consolidation continuing to represent (either by remaining outstanding or by being converted intovoting securities of the surviving entity) more than half of the combined voting power of the voting securities ofthat Person or the surviving entity, as applicable, outstanding immediately after that merger or consolidation;(b) a merger or consolidation effected to implement a recapitalization (other than a redomiciliation of thatPerson); or (c) sale or other disposition by that Person of all or substantially all of that Person’s assets or anytransaction having a similar effect.13.18“Combination Product” means a product that is sold by JPI, its Affiliates or sublicensees in a finished dosageform containing a Licensed Product in combination with one or more other APIs.13.19“Commercially Reasonable Efforts” means, with respect to the efforts to be expended by a Party or its Affiliatein conducting any activity or achieving any objective in connection with an activity or objective under theAgreement, reasonable, good-faith efforts to conduct such activity or achieve such objective as such Party wouldnormally devote to such activity or objective, based on all conditions then prevailing and taking into account allrelevant commercial, scientific and technical factors, including: (a) issues of efficacy, safety, and expected andactual approved labeling; (b) the competitiveness of products sold by Third Parties in the marketplace; (c) theexpected and actual product profile of a Licensed Product; (d) patent and other proprietary positions; (e) thelikelihood of regulatory approval of a Licensed Product given the regulatory structure involved, including thelikelihood of obtaining regulatory exclusivity; and (f) the expected and actual profitability and return oninvestment. To the extent that the performance of a Party hereunder is adversely affected by failure by the otherParty to perform its obligations hereunder, the impact of such performance failure will be taken into account indetermining whether Commercially Reasonable Efforts have been used.13.20“Competitive Infringement” means, with respect to an Arcturus Product-Specific Patent, another Arcturus PatentRight or a Joint Patent Right (as applicable), any infringement by a non-Party of such Patent Right that arisesfrom registration, development, manufacture, use, sale, or importation of a compound or product that is, or isreasonably likely to be, competitive with a Licensed Compound or Licensed Product.13.21“Control” means, with respect to any Know-How, Patent Right, or other intellectual property right, the possession(whether by ownership or by exclusive or non‑exclusive license) by a Party or any of its Controlled Affiliates of theability to grant to the other Party, in accordance with this Agreement, access, ownership, a license, or asublicense to that Know-How, Patent Right, or other intellectual property right without violating the terms of anyagreement with a Third Party. If a Party has rights to any Know-How, Patent Right, or other intellectual propertyright38 EXECUTION COPY by virtue of a non‑exclusive license granted to such Party that includes the right to grant sublicenses, and thisAgreement specifies that an exclusive license is granted to the other Party under such Know-How, Patent Right,or other intellectual property right, then such right shall be deemed “Controlled” hereunder, and the licensegranted by such Party to the other Party hereunder, while non-exclusive with respect to non-Parties, shall beexclusive as to such Party (i.e., such Party shall not have the right to practice such right for any purpose within thescope of the exclusive license granted by such Party to the other Party), subject to any rights expressly retainedor reserved by such Party in this Agreement.13.22“Controlled Affiliate” means, with respect to a Party, any corporation or other business entity that is controlled(as defined in Section 13.1) by such Party. 13.23“Covers” or “Covering” means, with respect to a Patent Right, that making, using, selling, offering for sale, orimporting a composition of matter or other material or practice of a claimed method would infringe a Valid Claim(or, if a Valid Claim has not issued, if a Valid Claim were to issue), within that Patent Right in the country in whichthat activity occurs.13.24“Currency Hedge Rate” means the weighted-average hedge rate of the outstanding external foreign-currencyforward hedge under arm’s-length contracts between Johnson & Johnson’s Global Treasury Services Center andits Affiliates and banks.13.25“Exploit” means manufacture, use, sell, offer for sale, import, or otherwise exploit including have manufactured,have used, have sold, and have imported.13.26“FDA” means the U.S. Food and Drug Administration and any successor agency.13.27“Field” means all uses.13.28“First Commercial Sale” means, with respect to a Licensed Product, first sale by JPI in an arms-lengthtransaction to a Third Party (other than a sublicensee) for use or consumption by the general public of thatLicensed Product in a country after all required Regulatory Approvals for commercial sale of that LicensedProduct have been obtained in that country. Licensed Product provided for: (a) clinical study purposes;(b) compassionate use; (c) similar uses by a limited number to support Licensed Product Regulatory Approvals(provided that the Licensed Product is not otherwise generally available for purchase in such country); and(d) early access programs; shall not constitute a First Commercial Sale. In addition, sales of a Licensed Productby and between JPI, its Affiliates and/or sublicensees, or between the Parties (or their respective Affiliates orSublicensees), shall not constitute a First Commercial Sale.13.29“FTE” means a full-time employee or consultant, or more than one employee or consultant working the equivalentof a full-time employee or consultant, with “full-time” meaning […***…]* hours per Calendar Year.13.30“FTE Rate” means $[…***…] per FTE.***Confidential Treatment Requested39 EXECUTION COPY 13.31 “GLP” means good laboratory practices in accordance with the then-current practices and procedures stated inTitle 21, United States Code of Federal Regulations, Part 58, or any successor statute, any other regulations orguidelines relating to good laboratory practices, and any foreign equivalents in the country in which the studies orclinical trials in question are conducted.13.32“Government Body” means: (a) the government of a country or of a political subdivision of a country orsupranational organization such as the EU; (b) an agency of any such government; (c) any other individual, entity,or organization authorized by law to perform any executive, legislative, judicial, regulatory, administrative,military, or police functions of any such government; or (d) an intergovernmental organization.13.33“HBV NA Therapeutic” means a NA Therapeutic targeting […***…]* of the Hepatitis B virus (HBV) genome.13.34“[…***…] NA Therapeutic” means a NA Therapeutic targeting […***…] of the […***…].13.35“IND” means: (a) an investigational new drug application filed with the FDA for authorization to commenceclinical studies; and (b) its equivalents in countries other than the United States.13.36“Joint Know-How” means Know-How that is conceived of or created jointly by employees, agents, orsubcontractors of both Parties.13.37“Joint Patent Right” means any Patent Right that is conceived of or created jointly by employees, agents, orsubcontractors of both Parties under this Agreement.13.38“Joint Research Plan” means the written plan specifying the research to be conducted during the ResearchTerm (a) for HBV, set forth on the HBV Joint Research Plan attached hereto; and (b) for any Option Disease Area,following agreement between the Parties on the Research Program work for such Option Disease Area.13.39“JPI Licensed Patent Rights” means: (a) all Patent Rights (other than Joint Patent Rights) that JPI or any of itsControlled Affiliates Controls, other than through the grant of a license by Arcturus, that Cover LicensedCompounds or Licensed Products; and (b) JPI’s interest in Joint Patent Rights.13.40 “Know How” means all information not generally known to the public including screens, models, inventions,practices, methods, knowledge, know-how, skill, experience, test data including pharmacological, toxicologicaland clinical test data, analytical and quality control data, marketing, pricing, distribution, costs, sales,manufacturing data, manufacturing secrets and procedures, secret processes, reports, plans, designs, prototypes,test results, working drawings, methods including testing methods, formulas, recipes, material and performancespecifications and current accumulated experience acquired as a result of***Confidential Treatment Requested40 EXECUTION COPY technical research or otherwise, and patent and legal data related to chemical, biological and other tangiblematerials.13.41“Materials” means any tangible chemical or biological materials, including any compounds, libraries, smallmolecules, DNA, RNA, clones, cells, and any expression product, progeny, derivative, or other improvement13.42“NA Therapeutic” or “NA Therapeutics” means therapeutic agents based on nucleic acids such as […***…]*. The term ‘[…***…]’ used in this definition means the use of […***…]. For clarity, references to NATherapeutics are references only to an HBV NA Therapeutic, provided that if an Option is exercised, shall alsomean an […***…] NA Therapeutic or a Respiratory Disease Virus NA Therapeutic, as applicable following suchOption exercise.13.43“Net Sales” means the gross amounts invoiced on sales of Licensed Products by JPI or any of its Affiliates orsublicensees to a Third Party purchaser in arm’s-length transaction, less the following deductions, determined inaccordance United States generally accepted accounting principles consistently applied (“U.S. GAAP”) and itsinternal policies, and procedures and accounting standards, to the extent allocable to such Licensed Productunder U.S. GAAP and actually taken, paid, accrued, allowed, included, or allocated based on estimates in thegross sales prices with respect to such sales: (a)normal and customary trade, cash and quantity discounts, allowances, deductions, fees and credits, inthe form of deductions actually allowed with respect to sales of such Licensed Product (to the extentnot already reflected in the amount invoiced), excluding commissions for commercialization; (b)excise taxes, use taxes, tariffs, sales taxes, and customs duties, and other governmental chargesimposed on the sale of such Licensed Product to the extent separately itemized on the invoice (butspecifically excluding, for clarity, any income taxes assessed against the income arising from suchsale); (c)outbound freight, shipment and insurance costs to the extent separately itemized on the invoice; (d)compulsory payments and cash rebates related to the sales of such Licensed Products paid to agovernmental authority (or agent thereof) pursuant to governmental regulations, including governmentlevied fees as a result of healthcare reform policies; (e)retroactive price reductions, credits or allowances for rejections or returns of such Licensed Productsincluding for recalls, damaged goods and billing errors; and***Confidential Treatment Requested41 EXECUTION COPY (f)rebates, chargebacks, and discounts (or the equivalent thereof) to managed health care organizations,pharmacy benefit managers (or the equivalent thereof), federal, state, provincial, local or othergovernments, or their agencies or purchasers, reimbursers, or trade customers.The foregoing deductions shall be based on the Johnson & Johnson group of companies’ sales reportingsystem to the extent the same complies with applicable law. All such discounts, allowances, credits, rebates,and other deductions shall be fairly and equitably allocated between such Licensed Product and other productsof JPI and its Affiliates and sublicensees such that such Product does not bear a disproportionate portion ofsuch deductions. Sales of a Licensed Product by and between JPI and its Affiliates and sublicensees are notsales to Third Parties and shall be excluded from Net Sales calculations for all purposes; provided that anyresale by the purchaser to a Third Party distributor or to a Third Party for end use, shall be included in NetSales. Compassionate use, “named patient sales”, sales made in connection with clinical trials, and productdonations shall be excluded from Net Sales calculations for all purposes.In the event a Licensed Product is sold in combination with other products by JPI, its Affiliates or sublicenseesand the […***…]*, the Net Sales of such Licensed Product, for the purposes of determining royalty and sales-based milestone payments, shall be determined on a country by country basis by […***…]. In the event that […***…], then, for purposes of determining the royalty payments due in respect of such Licensed Product, the […***…]. …***…For the purpose of determining royalty and sales-based milestone payments payable on aCombination Product, Net Sales for such Combination Product will be calculated by […***…]. For clarity, theterm “invoice price” on a unit basis refers to the Net Sales for a given Calendar Year divided by the totalnumber of units of the Licensed Compound sold in that country during that same Calendar Year. […***…]***Confidential Treatment Requested42 EXECUTION COPY […***…]*. 13.44 “Out-of-Pocket Expenses” means expenses actually paid (with no mark-up) to any Third Party that is either:(a) not an Affiliate of a Party claiming such expenses; or (b) is an Affiliate of that Party where such payment islimited to reimbursing such Affiliate for expenses actually paid by such Affiliate to a Third Party that is not anAffiliate of the Party claiming such expenses.13.45“Patent Right” means:(a) a patent; (b) a pending patent application (including a provisional application,substitution, continuation, continuation-in-part, division, and renewal); (c) a patent-of-addition, reissue,reexamination, and extension or restoration by existing or future extension or restoration mechanisms (includingsupplementary protection certificate or the equivalent); (d) any other form of government-issued right substantiallysimilar to any of the foregoing; and (e) all U.S. and foreign counterparts of any of the foregoing.13.46“Person” means an individual, an entity, and organization, or a Government Body.13.47“Phase 1 Study” means a human clinical trial which satisfies the requirements of 21 CFR §312.21(a).13.48“Phase 2 Study” means a human clinical trial which satisfies the requirements of 21 CFR §312.21(b).13.49“Phase 3 Study” means a human clinical trial which satisfies the requirements of 21 CFR §312.21(c).13.50“Prosecution and Maintenance” and “Prosecute and Maintain” refer to preparation, filing, prosecution, andmaintenance of a Patent Right, as well as re-examinations, reissues, and the like with respect to that PatentRight, together with conduct of interferences, defense of oppositions, and other similar proceedings with respectto that Patent Right.13.51“Regulatory Approval” refers, with respect to a country or extranational territory, to obtaining all approvals(however referred to) necessary to distribute, sell, or market a product in that country or some or all of thatextranational territory,***Confidential Treatment Requested43 EXECUTION COPY including all pricing and third-party reimbursement approvals, if any, required by one or more Government Bodiesto receive governmental reimbursement in such country.13.52 “Research Term” means the period in which Arcturus conducts the Research Program under this Agreement.13.53“Respiratory Disease Virus” means virus that causes one or more respiratory symptoms, including, withoutlimitation, orthomyxo and paramyxo viruses.13.54“Respiratory Disease Virus NA Therapeutic” means NA Therapeutic targeting any region of the virus genomethat causes one or more respiratory symptoms, including, without limitation, orthomyxo and paramyxo virusgenomes.13.55“Selected NA Therapeutic” means (a) an NA Therapeutic that is on the Selected NA Therapeutics List deliveredby JPI to Arcturus under Section 1.6 or (b) an NA Therapeutic that, after delivery of the Selected NA TherapeuticsList, is deemed to be a “Selected NA Therapeutics” in accordance with Section 3.1 or 4.5.13.56“Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of anynature (including any interest thereon).13.57“Third Party” means any entity other than the Parties and their respective Affiliates.13.58“Valid Claim” means the following with respect to a particular country:13.58.1a claim of an issued and unexpired patent in that country that: (a) has not been held permanently revoked,unenforceable, or invalid by a decision of a court or other Government Body of competent jurisdiction that isunappealable or has not been appealed within the time allowed for appeal; and (b) has not been abandoned,disclaimed, denied, or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise in thatcountry; and13.58.2a claim of a pending patent application that: (a) has been prosecuted and pending for […***…]* years or lessfrom the earliest worldwide priority date; or (b) after pending for more than […***…] years from the priority dateissues or grants as a patent within the scope of Section 13.58.1.14DISPUTE RESOLUTION14.1Governing Law. This Agreement, its interpretation, construction and performance, and the rights granted andobligations arising under it is governed by, and construed in accordance with, the laws of the state of New York,without giving effect to its principles of conflicts of law. The interpretation and construction of any Patent Rights orother intellectual property rights, and any disputes pertaining to the interpretation, construction, validity,enforceability or infringement of Patent Rights or other intellectual property rights (collectively, “Patent Matters”),is governed by the laws of the jurisdiction in which such Patent Rights***Confidential Treatment Requested44 EXECUTION COPY were filed or granted or such other intellectual property rights exist or are alleged to exist, as the case may be.14.2Discussion by Senior Executives. Either Party may submit to the President of Arcturus and the President ofJPI or a designee of one or both of them a written account of an ongoing disagreement (excluding a PatentMatter) between the Parties. Those individuals or their designees must promptly meet and attempt to resolve thedisagreement. As part of that process, those individuals may consult anyone they wish. If those individualscannot resolve the disagreement in […***…]* days either Party may refer the matter to arbitration as describedbelow.14.3Arbitration. Except as expressly provided in Section 14.6, in the event that resolution of a dispute (other than aPatent Matter) cannot be obtained through the process described in Section 14.2, as the exclusive means ofinitiating adversarial proceedings to resolve any dispute arising out of this Agreement, a party may demand thatthe dispute be resolved by arbitration administered by the International Institute for Conflict Prevention andResolution for Non-Administered Arbitration in accordance with its rules, and each party hereby consents to anysuch dispute being so resolved. Judgment on any award rendered in any such arbitration may be entered in anycourt having jurisdiction. If Arcturus believes that JPI is in material breach of its obligations to use CommerciallyReasonable Efforts, the matter will be exclusively resolved according to the procedure described in Section 14.4.14.3.1Any arbitration commenced in accordance with this Section 14.3 will be conducted by a single arbitrator agreedto by the Parties and selected within […***…] days after commencement of any arbitration in accordance withthis Section 14.3. If they fail to do so, the Parties shall instruct the International Institute for Conflict Preventionand Resolution for Non-Administered Arbitration to select the arbitrator.14.3.2Any arbitration commenced in accordance with this Section 14.3 must be conducted in New York, NewYork. The arbitrator will, in rendering his or her decision, apply the substantive law of the state of New York,excluding its conflicts of laws principles. 14.3.3The arbitrator’s authority to award damages shall be subject to the limitation set forth in Section 10.3.3.14.3.4The award rendered by the arbitrator shall be confidential (except as necessary to enforce such award in acourt of competent jurisdiction), final, binding and non-appealable.14.4Procedures for a Dispute Involving JPI’s CRE. If Arcturus believes that JPI is in material breach of itsobligations to use Commercially Reasonable Efforts to develop or commercialize a Licensed Product, it will senda written notice to JPI stating the same. Within […***…] days thereafter, Arcturus and JPI will meet and discussan appropriate solution. Should the Parties be unable to agree on an appropriate solution within […***…] daysafter Arcturus’ written notice to JPI, then, upon the written request of either Party, the matter will be referred to theChief***Confidential Treatment Requested 45 EXECUTION COPYExecutive Officer of Arcturus and the head of infectious disease research, development, and/or commercialization(as relevant) of JPI or its Affiliates for attempted resolution. If such executives are unable to resolve such matterwithin […***…]* days of such matter being referred to them, then Arcturus, upon written notice to JPI and CPRInstitute for Dispute Resolution (“CPR”), the matter shall be subject to binding arbitration conducted pursuant tothe CPR Global Rules for Accelerated Commercial Arbitration (“CPR Accelerated Rules”), except to the extentthe CPR Accelerated Rules conflict with this Section 14.4, in which case this Section 14.4 shall control. Thearbitration shall be conducted by a panel of three neutral, mutually agreed arbitrators with at least 10 years’experience in the life sciences industry and with appropriate expertise in the area in which the subject disputearose; provided that if the Parties are unable to agree as to appropriate arbitrators, such arbitrators shall beappointed by CPR from its Health Care & Life Sciences Panel of Distinguished Neutrals or other Panel providedsuch arbitrators have the credentials referenced above. The expert arbitrators shall be impartial and independentof the Parties and shall abide by the Code of Ethics for Arbitrators in Commercial Disputes (available athttp://www.adr.org/EthicsAndStandards). Each Party shall provide the arbitrators and the other Party with awritten report setting forth its position with respect to the substance of the dispute within […***…] days after theInitial Conference (as defined by the CPR Accelerated Rules). Each Party may submit a revised report andposition to the arbitrators within […***…] days of receiving the other Party’s report. If so requested by thearbitrators, each Party shall make oral and/or other written submissions to the arbitrators in accordance with theCPR Accelerated Rules; provided that the other Party shall have the right to be present during any oralsubmissions. In any arbitration under this Section 14.4 the arbitrators and the Parties shall use their diligentefforts to resolve such dispute within […***…] days after the selection of the arbitrators. The arbitrators’ rulingshall be final and binding upon the Parties. If the arbitrators determine that JPI has not met its CRE obligationsset forth in this Agreement, Arcturus may terminate this Agreement upon […***…] days’ written notice to JPI,unless JPI either: (a) has cured such breach prior to the end of such […***…]day period; or (b) prior to the end ofsuch […***…]day period, has presented a reasonable written plan setting forth the specific actions JPI commits toundertake to meet its obligations, in which case Arcturus shall notify JPI in writing within […***…] days of Arcturusacceptance or non‑acceptance of such plan. If Arcturus notifies JPI of its acceptance of such plan, JPI shallpromptly undertake and diligently perform such plan. If Arcturus notifies JPI that Arcturus does not accept theplan, the Parties will submit the plan to an independent Third Party expert in the field of drug development andcommercialization who is acceptable to both Parties (or, failing such mutual agreement, designated by theInternational Centre for Dispute Resolution located in New York City, NY). The sole authority of such expert willbe to determine whether or not such plan is reasonable or shall propose changes so as to render it reasonable(i.e., if performance of such plan would cause JPI to meet its CRE obligations), and such expert’s determinationshall be final and binding upon the Parties. The independent Third Party expert shall be required to make his orher***Confidential Treatment Requested46 EXECUTION COPY determination within […***…]* days after his or her selection as the independent Third Party expert. If theindependent Third Party expert determines that such plan is not reasonable and cannot be amended to bereasonable or JPI does not adopt the expert’s changes that would make the plan reasonable, Arcturus mayterminate this Agreement upon […***…] days’ written notice to JPI. In the case of any arbitration or expertdetermination pursuant to this Section 14.4, the Parties shall bear the fees and expenses of the arbitrators orindependent expert (as applicable) equally.Any arbitration commenced in accordance with this Section 14.4 must be conducted in New York, New York.14.5No Implied Diligence Obligations. Except as expressly provided in the Agreement, there shall be noobligations of diligence, either implied or construed, upon a Party.14.6Court Actions. Each Party has the right to seek injunctive or other equitable relief from a court of competentjurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such an action may befiled and maintained notwithstanding any ongoing discussions between the Parties or any ongoing arbitrationproceeding. In addition, either Party may bring an action in any court of competent jurisdiction to resolve PatentMatters, and no Patent Matter shall be subject to arbitration pursuant to Section 14.3.15MISCELLANEOUS15.1Notices. For a notice or other communication between the Parties under this Agreement to be valid, it must be inwriting and delivered by hand or by a national transportation company (with all fees prepaid). A valid notice orother communication under this Agreement will be effective when received by the Party to which it is addressed,with any such notice or other communication sent to any non-Party specified in Section 15.1 as a Party’s co-addressee constituting a courtesy copy that is not to be considered when determining when that Party receivedthat notice. It will be deemed to have been received as follows:15.1.1if it is delivered by hand or delivered by a national transportation company, with all fees prepaid, upon receiptas indicated by the date on the signed receipt;15.1.2if it is delivered by email, when the Party to which the email is addressed, by notice in accordance with thisSection 15.1 (but without any need for further acknowledgement), acknowledges having received that email,with an automatic “read receipt” not constituting acknowledgment of an email for purposes of thisSection 15.1.2; or15.1.3if the Party to which it is addressed rejects or otherwise refuses to accept it, or if it cannot be delivered becauseof a change in address for which no notice was given, then upon that rejection, refusal, or inability to deliver.***Confidential Treatment Requested47 EXECUTION COPY For a notice or other communication to a Party under this Agreement to be valid, it must be addressed using theinformation specified below for that Party or any other information specified by that Party in a notice inaccordance with this Section 15.1. To Arcturus: Arcturus Therapeutics, Inc.10628 Science Center Drive, Suite 200San Diego, CA 92121Attn: Chief Executive Officer To JPI: Janssen Pharmaceuticals, Inc.1125 Trenton-Harbourton RoadTitusville, NJ 08560 With copies to: Chief Intellectual Property CounselOffice of General CounselJohnson & JohnsonOne Johnson & Johnson PlazaNew Brunswick, New Jersey 08933United States of America HeadJohnson & Johnson Innovation Center, California99 El Camino RealMenlo Park, CA 94025 If a notice or other communication addressed to a Party is received after 5:00 p.m. on a business day at thelocation specified in the address for that Party, or on a day that is not a business day, then the notice will bedeemed received at 9:00 a.m. on the next business day.15.2Entire Agreement. This Agreement constitutes the entire understanding between the Parties as to the subjectmatter of this Agreement and supersedes all other agreements, whether written or oral, between the Parties. Forclarity, the Parties intend that the prior Research Collaboration and License Agreement dated May 29, 2015 beterminated in its entirety.15.3Amendments. No amendment to this Agreement will be effective unless it is in writing and signed by bothParties.15.4No Assignment. Neither Party may assign any of its rights or delegate any of its obligations under thisAgreement without the prior written consent of the other Party, other than: (a) to an Affiliate, provided that theassigning Party shall remain liable and responsible to the non‑assigning Party hereto for the performance andobservance of all such duties and obligations by such Affiliate; or (b) in connection with the transfer or sale of allor substantially all of the business of such Party to which this Agreement relates to a Third Party (“Third PartyAcquirer”), whether by merger, sale of stock, sale of assets or otherwise (each, a “Sale Transaction”), providedthat in the event of a Sale Transaction (whether this Agreement is48 EXECUTION COPY actually assigned or is assumed by the Third Party Acquirer or the surviving corporation resulting from such SaleTransaction by operation of law (e.g., in the context of a reverse triangular merger)): (i) intellectual property rightsof the Third Party Acquirer that existed prior to the Sale Transaction shall not be included in the technologylicensed hereunder or otherwise subject to this Agreement, and (ii) in the case of a Sale Transaction involvingArcturus in which the Third Party Acquirer has, later acquires or initiates a program with respect to HBV NATherapeutics (and to the extent that Janssen has exercised an Option pursuant to Section 4.2, […***…]* NATherapeutics or Respiratory Disease Virus NA Therapeutics, as applicable), the Third Party Acquiror (or thesurviving corporation, as applicable) establishes reasonable internal safeguards designed to ensure that ArcturusTechnology is not accessible to personnel of the Third Party Acquiror (or the surviving corporation, as applicable)who are engaged in the conduct of such program. The rights and obligations of the Parties under this Agreementshall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and thename of a Party appearing herein shall be deemed to include the name of such Party’s successors and permittedassigns to the extent necessary to carry out the intent of this Section 15.4. Any purported assignment not inaccordance with this Section 15.4 will be void.15.5Relationship of the Parties. Both Parties are acting as independent contractors under this Agreement. TheParties do not intend that anything in this Agreement creates an employment, agency, joint venture, orpartnership relationship between the Parties or any of their agents or employees. Neither Party has authority toenter into any contracts or incur liabilities on behalf of the other Party.15.6No Non-Party Beneficiaries. Except for the provisions of Article 11 with respect to Arcturus Indemnitees and JPIIndemnitees, and except as provided in Section 15.4 with respect to a Party’s successors and permitted assigns,no provision of this Agreement grant rights to any Person other than a Party to this Agreement.15.7Compliance with Laws. In performing under this Agreement, each Party shall comply with all laws andgenerally recognized standards for good scientific conduct.15.8No Presumption Against Drafting Party. Each Party has had the opportunity to consult with counsel inconnection with reviewing, drafting, and negotiating this Agreement. Accordingly, the Parties intend that theprinciple of construction that any ambiguity in a contract be construed against the drafting Party not apply.15.9Waiver. No waiver of any provision of this Agreement will be effective unless it is in writing and signed by theParty granting the waiver. No failure or delay in exercising any right or remedy under this Agreement operates asa waiver of that right or remedy. A waiver granted on one occasion will not operate as a waiver on futureoccasions.15.10Severability. The Parties intend as follows:***Confidential Treatment Requested49 EXECUTION COPY 15.10.1that if any provision of this Agreement is held to be unenforceable, then that provision will be modified to theminimum extent necessary to make it enforceable, unless that modification is not permitted by law, in whichcase that provision will be disregarded;15.10.2that if modifying or disregarding the unenforceable provision would result in failure of an essential purpose ofthis Agreement, either Party may terminate this Agreement upon written notice to the other Party; and15.10.3that if an unenforceable provision is modified or disregarded in accordance with this Section 15.10, then therest of the Agreement will remain in effect as written.15.10.4Force Majeure. If a Force Majeure Event prevents a Party from complying with any one or more obligationsunder this Agreement, that inability to comply will not constitute breach if (a) that Party uses reasonable effortsto perform those obligations; and (b) that Party’s inability to perform those obligations is not due to its failure to:(i) take reasonable measures to protect itself against events or circumstances of the same type as that ForceMajeure Event; or (ii) develop and maintain a reasonable contingency plan to respond to events orcircumstances of the same type as that Force Majeure Event. For purposes of this Agreement, “Force MajeureEvent” means, with respect to a Party, any event or circumstance, whether or not foreseeable, that was notcaused by that Party and any consequences of that event or circumstance. If a Force Majeure Event occurs, thenoncomplying Party shall promptly notify the other Party of occurrence of that Force Majeure Event, its effect onperformance, and how long the noncomplying Party expects it to last. Thereafter the noncomplying Party shallupdate that information as reasonably necessary. During a Force Majeure Event, the noncomplying Party shalluse reasonable efforts to limit damages to the other Party and to resume its performance under this Agreement.15.10.5Anti-Corruption Compliance. Neither Party shall perform any actions that are prohibited by local and otheranti-corruption laws (collectively “Anti-Corruption Laws”) that may be applicable to one or both Parties to thisAgreement. Without limiting the foregoing, neither Party shall make any payments, or offer or transfer anythingof value, to any government official or government employee, to any political party official or candidate forpolitical office or to any other third party related to the transaction in a manner that would violate Anti-CorruptionLaws.15.10.6Further Actions. Each Party shall take all actions reasonably necessary to carry out the intent of the Parties inentering into this Agreement.[SIGNATURE PAGE FOLLOWS]50 EXECUTION COPY The Parties are signing this Agreement on the Effective Date. ARCTURUS THERAPEUTICS, INC. By: /s/ Joseph E. Payne Name: Joseph E. Payne Title: President JANSSEN PHARMACEUTICALS, INC. By: /s/ Vanessa Broadhurst Name: Vanessa Broadhurst Title: President Exhibits:Johnson & Johnson Universal CalendarArcturus Patent RightsArcturus Press Release [NTD: ARCTURUS TO UPDATE]Granted RightsHBV Joint Research Plan 51 EXECUTION COPYExhibitJohnson & Johnson Universal Calendar […***…]****Confidential Treatment Requested52 EXECUTION COPY ExhibitArcturus Patent Rights […***…]****Confidential Treatment Requested53 EXECUTION COPY […***…]****Confidential Treatment Requested54 EXECUTION COPY […***…]****Confidential Treatment Requested55 EXECUTION COPY […***…]****Confidential Treatment Requested56 EXECUTION COPY […***…]****Confidential Treatment Requested57 EXECUTION COPY […***…]****Confidential Treatment Requested 58 EXECUTION COPY ExhibitArcturus Press Release [TBD]Arcturus Therapeutics Announces Strategic Collaboration with Johnson & Johnson Innovation to Discover and DevelopRNA MedicinesInitial Focus on Hepatitis B, With Option to Expand to Additional Disease AreasSan Diego, Calif., October 19, 2017 – Arcturus Therapeutics, Inc., a leading RNA medicines company, announced today that it hasentered into a research collaboration and worldwide license agreement with Janssen Pharmaceuticals, Inc. (Janssen), a Johnson &Johnson company. The two companies will work together to develop and commercialize nucleic acid-based drug products for thetreatment of Hepatitis B, using Arcturus’ UNA Oligomer chemistry and LUNARTM lipid-mediated delivery platform. The agreementalso includes an option to expand into other infectious and respiratory diseases. The deal was facilitated by the Johnson & JohnsonCalifornia Innovation Center.Under the agreement, facilitated by J&J Innovation, Arcturus will receive an upfront cash payment, R&D support, and pre-clinical,development, and sales milestone payments, as well as royalty payments on any future licensed product sales. Janssen will assumeresponsibility for development costs and all commercialization costs associated with the program.“This new partnership signifies an expanded relationship between Arcturus and Janssen,” said Joseph Payne, President and CEO ofArcturus. “Arcturus’ expertise and intellectual property in the field of RNA medicines is complemented by Janssen’s broad capabilitiesin clinical development, regulatory affairs, and marketing. Together we aim to bring new treatments to patients who are suffering fromHepatitis B and potentially other infectious diseases.”About Arcturus Therapeutics, Inc.Founded in 2013 and based in San Diego, Arcturus Therapeutics, Inc. is an RNA medicines company with enabling technologies —UNA Oligomer chemistry and LUNARTM lipid-mediated delivery. Arcturus's versatile RNA therapeutics platforms can be appliedtoward multiple types of RNA medicines including small interfering RNA, messenger RNA, antisense RNA, microRNA and geneediting therapeutics. The company owns LUNAR nanoparticle delivery and Unlocked Nucleomonomer Agent (UNA) technologyincluding UNA Oligomers, which are covered by its patent portfolio (>110 patents and patent applications, issued in the U.S., Europe,Japan, China and other countries). Arcturus' proprietary UNA technology can be used to target individual genes in the human genome,as well as viral genes, and other species for therapeutic purposes. The company's commitment to the development of novel RNAtherapeutics has led to partnerships with Ultragenyx Pharmaceutical, Inc., Takeda Pharmaceutical Inc., and Cystic Fibrosis FoundationTherapeutics Inc. For more information, visit www.ArcturusRx.com, the content of which is not incorporated herein by reference. OnSeptember 27, 2017, Arcturus and Alcobra Ltd. (Alcobra) (NASDAQ: ADHD) entered into an agreement and plan of merger andreorganization pursuant to which a wholly-owned subsidiary of Alcobra will merge with and into Arcturus, with Arcturus becoming awholly-owned subsidiary of Alcobra and the surviving corporation of the merger, and the holders of Arcturus59 EXECUTION COPY outstanding capital stock immediately prior to the merger will receive ordinary shares representing approximately 60% of theoutstanding shares of Alcobra. Upon consummation of the transaction, Alcobra’s name will be changed to Arcturus Therapeutics, Ltd.,and Alcobra will change its ticker symbol to ARCT on NASDAQ.Forward-looking StatementsThis press release contains “forward-looking statements” that involve substantial risks and uncertainties for purposes of the safe harborprovided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included inthis press release regarding strategy, future operations, prospects, plans and objectives of management are forward-looking statements.Examples of such statements include, but are not limited to, statements relating to whether the agreement will result in a successfulcollaboration or potential products; the structure, timing and completion of the proposed merger transaction; and the combinedcompany’s listing on NASDAQ after closing of the proposed merger. You should not place undue reliance on these forward-lookingstatements. Such statements are based on management’s current expectations and involve risks and uncertainties. Actual results andperformance could differ materially from those projected in the forward-looking statements as a result of many factors. Except asotherwise required by law, all parties disclaim any intention or obligation to update or revise any forward-looking statements, whichspeak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise.Additional Information about the Proposed Merger involving Alcobra and Arcturus and Where to Find ItIn connection with the previously disclosed proposed merger involving Alcobra and Arcturus, a proxy statement and a proxy card [willbe]1 furnished to the Securities and Exchange Commission (SEC) and [will be] mailed to Alcobra’s shareholders seeking any requiredshareholder approvals in connection with the proposed merger transactions. Before making any voting or investment decision,investors and shareholders are urged to read the proxy statement (including any amendments or supplements thereto) and any otherrelevant documents that Alcobra may furnish to or file with the SEC when they become available because they will contain importantinformation about the proposed merger transactions.This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy anysecurities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior toregistration or qualification under the securities laws of any such jurisdiction. 1 NTD: May change to past tense depending on timing of the proxy filing.60 EXECUTION COPY ContactArcturus Therapeutics858-900-2660info@arcturusRx.comAndrew McDonald Ph.D.LifeSci Advisors LLC646-597-6979 61 EXECUTION COPYExhibitGranted Rights[…***…]****Confidential Treatment Requested62 EXECUTION COPY ExhibitHBV Joint Research Plan (and associated budget)HBV – Joint Research Plan[…***…]****Confidential Treatment Requested63 EXECUTION COPY […***…]****Confidential Treatment Requested64 EXECUTION COPY […***…]****Confidential Treatment Requested 65 EXECUTION COPY[…***…]****Confidential Treatment Requested66 Exhibit 4.8 CONFIDENTIAL ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 RESEARCH AND EXCLUSIVE LICENSE AGREEMENTThis Research and Exclusive License Agreement (“Agreement”) is entered into by and between Arcturus Therapeutics, Inc., a Delawarecorporation (“Arcturus”), and Synthetic Genomics, Inc., a Delaware corporation (“SGI”) and effective October 24, 2017 (“EffectiveDate”). SGI and Arcturus may each be referred to herein individually as a “Party” and collectively as the “Parties.” In considerationof the mutual covenants and promises set forth in this Agreement, the Parties agree as follows:1.Certain Definitions.1.1“Acquisition” shall mean a transaction or series of related transactions pursuant to which an entity directly or indirectly(a) obtains ownership of more than fifty percent (50%) of the voting securities of Arcturus, or (b) succeeds to substantially all the assetsand business of Arcturus (whether via merger, sale of assets, or otherwise). “Acquiring Organization” shall mean the acquiring entityin an Acquisition, together with its controlled Affiliates (other than Arcturus and Arcturus’s controlled Affiliates).1.2“Arcturus Owned Program IP” has the meaning given in Section 3.2.1.3“Affiliate” means, with respect to an entity, any entity which controls, is controlled by, or is under common control withsuch first entity, as of the Effective Date or anytime thereafter (but only so long as such control exists). For purposes of this Section 1.3only, “control” and, with corresponding meanings, the terms “controlled by,” “controlling,” and “under common control with” means(a) the ownership, directly or indirectly, of fifty percent (50%) or more of the voting securities, participating profit interest, or otherownership interests of a legal entity, or (b) the possession, directly or indirectly, of the power to direct the management or policies of alegal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance.1.4“Confidential Information” has the meaning given in Section 7.1.1.5“control” means in relation to Intellectual Property, the ownership of such Intellectual Property or the ability to grant asublicense to such Intellectual Property without accounting to any Third Party.1.6“Expected Sublicense Milestone Fees” for a Sublicense Agreement shall mean the sum of all amounts that, if paid,would constitute Sublicense Milestone Fees for such Sublicense Agreement. 1.7“Expected Sublicense Royalties” for a Sublicense Agreement means the value of Sublicense Royalties that SGIreasonably and in good faith expects to receive under such Sublicense Agreement (assuming the LUNAR Product licensed thereunderis launched commercially in each of the U.S., Great Britain, France, Germany, Italy, Spain and Japan) after considering Intellectual Property protection, pricing and reimbursement, marketsize, and competition. 1.8“Field” means all uses other than the diagnosis, prophylaxis and treatment of any respiratory disease viruses other thaninfluenza (which is included in the Field).1.9“Initial Research Plan” means the first research plan for Arcturus to conduct research relating to LNP delivery asapproved through the JSC pursuant to Section 2.5(d)(i) or Section 2.5(d)(ii), and upon such approval is hereby incorporated byreference into this Agreement.1.10“Intellectual Property” means inventions (whether patentable or not), discoveries, data, results, know-how, tradesecrets and information of any type, and any and all intellectual property rights in and to any of the foregoing. 1.11“JSC” has the meaning given in Section 2.5.1.12“Licensed IP” means all Intellectual Property that is both (a) related to LNP delivery, and (b) owned or controlled byArcturus at any time during the Term; provided that Licensed IP shall not include any Intellectual Property of an AcquiringOrganization that is both (i) not Arcturus Owned Program IP, and (ii) not Licensed IP at any time prior to the correspondingAcquisition. For clarity, Licensed IP includes, without limitation, any Arcturus Owned Program IP and the patents and patentapplications listed in Exhibit A (and any divisionals, continuations, continuations-in-part, reissues, renewals, re-examinations,extensions, registrations, certificates of inventions thereof or foreign equivalents thereof or of any other patent application claimingpriority thereto or resulting from a provisional to which any of the foregoing claims priority and any patents resulting from any of theforegoing).1.13“LNP” means lipid nanoparticles in any form, format, shape, size or composition.1.14“LUNAR Contemplated Research Agreement” means a written agreement pursuant to which SGI or any of itsAffiliates conducts research for a Third Party under a research plan that expressly contemplates significant research of a LUNARProduct. Notwithstanding the foregoing, such an agreement shall not be deemed a LUNAR Contemplated Research Agreement if, priorto the execution of such agreement both: (a) SGI or its Affiliates previously entered into an agreement with such Third Party to ****Confidential Treatment RequestedPage 2 of 24 research, develop, or license a Product; and (b) such agreement does not grant such Third Party a sublicense under the Licensed IP. 1.15“LUNAR Product” means a Product that, absent the license granted in this Agreement, would infringe a Valid Claimof a patent or patent application within the Licensed IP when manufactured, used, or sold.1.16“Non-LUNAR Product” means a Product that is not a LUNAR Product.1.17“Officers” has the meaning given in Section 2.5(d)(ii).1.18“Product” means self-amplifying mRNA as part of a vaccine or therapeutic agent for use in humans or farm orcompanion animals.1.19“Program IP” means all Intellectual Property conceived or first reduced to practice by or for Arcturus in performanceof any Research Plan.1.20“Qualified Personnel” shall mean such personnel that […***…]*reasonably deems appropriately qualified in the fieldof LNP delivery.1.21“Quarterly FTE” means a full-time equivalent person-quarter of Qualified Personnel based upon a total of fourhundred fifty (450) working hours per calendar quarter.1.22“Quarterly Report” has the meaning given in Section 4.1.****Confidential Treatment Requested Page 3 of 24 1.23“Requested Quarterly FTE” for a calendar quarter means the amount designated by […***…]* pursuant to Section2.2. The initial Requested Quarterly FTE for the first calendar quarter shall be […***…] Quarterly FTE. 1.24“Research Data” has the meaning given in Section 4.2.1.25“Research Plan(s)” means (a) the Initial Research Plan, as amended by the JSC from time to time, or (b) such otherresearch plans for Arcturus to conduct research relating to LNP delivery and approved through the JSC pursuant to Section 2.5(d)(i) orSection 2.5(d)(ii).1.26“SGI Related IP” means Program IP that incorporates, is an improvement of or necessarily requires the use of any (a)patents and patent applications owned or, other than Licensed IP, licensed to SGI or its Affiliates (or any of the inventions claimedtherein), or (b) Confidential Information of SGI.1.27“Sublicense Agreement” means an agreement pursuant to which SGI or its Affiliates grant a Third Party a sublicenseunder the Licensed IP to make, have made, use, import and sell a LUNAR Product.1.28“Sublicense Income” means (a) Sublicense Milestone Fees, (b) Sublicense Royalties and (c) Sublicense Upfront Fees,collectively. 1.29“Sublicense Milestone Fees” shall mean all cash payments received by SGI or its Affiliates under a SublicenseAgreement for amounts due upon a LUNAR Product’s achievement of certain development, regulatory or sales milestones as specifiedin such Sublicense Agreement. For clarity, Sublicense Milestone Fees exclude, without limitation, payments for equity or debt to theextent at or below fair market value and payments allocated to (and actually used for) research or development (including, withoutlimitation, for advancements of research and development activities to be conducted by SGI’s personnel).1.30“Sublicense Royalties” means all cash payments received by SGI or its Affiliates pursuant to a Sublicense Agreementas earned royalties paid by a Third Party with respect to commercial sales of LUNAR Products.1.31“Sublicense Upfront Fees” shall mean all upfront cash payments received by SGI or its Affiliates due upon executionof a Sublicense Agreement for the grant of a commercial license to make, use, and sell LUNAR Product(s). Sublicense Upfront Feesexclude, without limitation, payments for equity or debt to the extent at or below fair market value and payments allocated to (andactually used for) research or development (including, without limitation, for advancements of research and development activities tobe conducted by SGI’s personnel).1.32“Sublicense Value” of a Sublicense Agreement means the sum of the following for such Sublicense Agreement: (a)Sublicense Upfront Fees; (b) Expected Sublicense Milestone Fees; and (c) Expected Sublicense Royalties.1.33 “Term” means the period commencing on the Effective Date and ending on termination of this Agreement.1.34“Third Party” means a person or entity other than Arcturus, SGI, or their Affiliates.****Confidential Treatment RequestedPage 4 of 24 1.35“Valid Claim” means a claim contained in: (a) an issued and unexpired patent which has not been held unenforceableor invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the timeallowed for appeal, and which has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer orotherwise; or (b) a patent application that has not been irretrievably cancelled, withdrawn or abandoned and that has been pending forless than […***…]* years from the date of priority claimed by such pending patent application.2.Research Plans.2.1Performance. All research and development under this Agreement shall be performed pursuant to Research Plans.Arcturus shall use commercially reasonable efforts to carry out each Research Plan. Without limiting the foregoing, for each calendarquarter, Arcturus shall dedicate the corresponding Requested Quarterly FTE to the extent necessary to perform each of the ResearchPlans. Arcturus shall have no obligations under this Section 2.1 for any calendar quarter in which the Requested Quarterly FTE is zero(0) Quarterly FTE.2.2Quarterly FTE Change. […***…] may designate the Requested Quarterly FTE for a calendar quarter by informing […***…] of such designation (a) in writing at least […***…] days prior to the commencement of such calendar quarter, or (b) at anymeeting of the JSC prior to the commencement of such calendar quarter; provided that if […***…]’s designation deviates by more thanplus/minus […***…] FTEs compared with the estimate set forth in the then current Research Plan, […***…] may reject thedesignation to the extent of the deviation. Unless so designated by […***…], the Requested Quarterly FTE for each calendar quartershall be the Requested Quarterly FTE for the previous calendar quarter. Notwithstanding the foregoing, the Requested Quarterly FTEfor a calendar quarter shall not exceed […***…] Quarterly FTE without […***…]’s written consent.2.3Qualified Personnel. (a)Initial Qualified Personnel. At least […***…] business days (but no earlier than […***…] business days) prior tothe commencement of each calendar quarter, […***…] shall provide […***…] with: (i) the qualifications of all Qualified Personneldesignated to perform work under each Research Plan in such calendar quarter; and (ii) the estimated time […***…] expects each ofsuch Qualified Personnel to dedicate to the performance of each Research Plan in such calendar quarter. […***…] shall as soon aspracticable, but in any event within […***…] business days, thereafter notify […***…] if any such Qualified Personnel are notreasonably acceptable and the reasons therefor, and […***…] shall designate an alternative Qualified Personnel replacementreasonably acceptable to […***…] prior to initiation of the applicable work.(b)Core Personnel. If a Research Plan designates certain personnel of […***…] as “Core Personnel” or the like, thensuch personnel must be assigned as Qualified Personnel for the applicable period of performance by such individuals of such ResearchPlan and, in each calendar quarter, to the extent not designated in the Research Plan, must dedicate a mutually agreed percent of time toperformance of such Research Plan (to the extent the Research Plan requires such work). […***…] may otherwise change QualifiedPersonnel assigned to each Research Plan from calendar quarter to calendar quarter provided that it uses commercially reasonableefforts to maintain consistency in the Qualified Personnel assigned to each Research Plan. To the extent that any Core Personnel are notreasonably necessary to perform the Research Plan for a calendar quarter, […***…] shall have the right to notify […***…] and theParties shall discuss in good faith the potential for reducing the available percentage of such Core Personnel availability for the ****Confidential Treatment RequestedPage 5 of 24 remainder of such calendar quarter, provided that any such reduction shall be subject to mutual agreement between the Parties.(c)Replacement. […***…]* may, at any time, request the replacement of any […***…] personnel assigned to aResearch Plan if such personnel are reasonably unacceptable to […***…], provided that […***…] shall specify in writing the reasonfor the replacement. […***…] shall as soon as practicable following the written request, remove such personnel from performance ofsuch Research Plan and use commercially reasonable efforts to replace them with someone with qualifications reasonably acceptable to[…***…] as soon as reasonably possible. For clarity, “commercially reasonable efforts” required in the foregoing sentence does notrequire that […***…] hire new personnel but does require that: (i) […***…] promptly identify potential alternatives from existingpersonnel with appropriate qualifications responsive to the concerns specified by […***…]; and (ii) in any event, […***…] continueto make progress on the Research Plan.(d)No Employment Requirement. For clarity, nothing in this Section 2.3 shall be deemed to require […***…] tokeep employing a certain individual or hire an individual with certain qualifications.2.4Costs and Expenses. Except as expressly set forth in Section 5.2, […***…] is responsible for all costs and expensesthat […***…] incurs under or in connection with performing its obligations under the Research Plans and participation on the JSC.2.5Joint Steering Committee.(a)Establishment. The Parties shall: (i) establish, within […***…] days of the Effective Date, a Joint SteeringCommittee (“JSC”) which shall consist of […***…] members; and (ii) determine and approve the Initial Research Plan within […***…] days of the Effective Date. SGI and Arcturus shall each designate […***…] members with appropriate expertise. Each of SGIand Arcturus may replace any or all of its representatives on the JSC at any time upon written notice to the other Party. A Party maydesignate a substitute to temporarily attend and perform the functions of such Party’s designee at any meeting of the JSC. (b)Responsibilities. The JSC shall perform the following functions:(i)determine and approve the Initial Research Plan;(ii)coordinate the Parties’ activities hereunder;(iii) review whether there is a need to amend any Research Plan to meet the goals set forth therein; and(iv) review and approve additional Research Plans.(c)Meetings. The JSC shall meet at such times and at such locations as the JSC agrees (but at least once during eachcalendar quarter if requested by SGI), whether in-person or by telephone or video conference. The Parties shall endeavor to have thefirst meeting of the JSC within […***…] days after the Effective Date. (d)Decision-Making. (i)The JSC may make decisions with respect to any subject matter that is subject to the JSC’s decisionmaking authority set forth in Section 2.5(b) or as otherwise delegated to the JSC as set forth in this Agreement or by the Parties. Exceptas specified in Section 2.5(d)(ii), all decisions of the JSC shall be made****Confidential Treatment RequestedPage 6 of 24 by consensus, with each Party having a single vote regardless of the number of the representatives of such Party.(ii)With respect to any issue, if the JSC cannot reach consensus within […***…]* business days after thematter has been brought to the JSC’s attention, then such issue shall be referred to the Chief Executive Officer of SGI and the ChiefExecutive Officer of Arcturus (collectively, the “Officers”) for resolution. If the Officers are unable to reach consensus within […***…] days after the matter has been referred to them, the final decision on such disputed issue will reside with SGI with respect to allmatters relating to a Research Plan or proposed Research Plan (including, without limitation, amending any Research Plan, approvingany proposed Research Plan or determining the Initial Research Plan).3.Licenses; Intellectual Property.3.1License. Arcturus hereby grants SGI and its Affiliates an exclusive, perpetual, irrevocable, worldwide, sublicensable(through multiple tiers) license, under the Licensed IP, solely to research, develop, make, have made, use, sell, offer for sale, distribute,promote, import or export Products (including, without limitation. LUNAR Products) in the Field.3.2Ownership of Program IP. Subject to the assignment of Program IP in accordance with this Section 3.2, ownership ofIntellectual Property conceived or first reduced to practice pursuant this Agreement shall follow U.S. patent laws. Subject to thefollowing sentence, Arcturus shall own all Program IP that both (a) is not SGI Related IP, and (b) would necessarily infringe at least oneValid Claim within the Licensed IP when made, used, or sold (“Arcturus Owned Program IP”). Each Party shall retain their ownershiprights of any Arcturus Owned Program IP that is invented jointly by SGI and Arcturus (as determined under U.S. patent law); provided,however, that Arcturus shall own (and SGI hereby assigns) to Arcturus all LUNAR Product manufacturing process and processtechnology inventions within any Arcturus Owned Program IP that is jointly invented by Arcturus and SGI. SGI shall own and beassigned (and Arcturus hereby assigns to SGI) all Program IP other than Arcturus Owned Program IP. Each Party shall assist the otherParty, at the expense of requiring assistance, in every reasonable way to evidence, record and perfect the ownership and assignmentsset forth in this Section 3.2 and to apply for, obtain recordation of, and enforce, maintain, and defend such assigned rights.3.3Reservation of Rights. Except for the licenses expressly granted pursuant this Agreement with respect to the ResearchPlan and Products, no right or license to use any of Arcturus Intellectual Property or Confidential Information is granted pursuant to thisAgreement. 4.Research Results; Reports. 4.1Research Reports. Within […***…] days after the close of each calendar quarter, Arcturus will provide SGI with awritten report (a “Quarterly Report”) that (a) summarizes in reasonable detail all significant accomplishments and research findings inperformance of the Research Plans, and (b) reports the number of hours Arcturus’s Qualified Personnel spent in performance of theResearch Plans in such calendar quarter. 4.2Access to Research Data. Arcturus shall maintain complete and accurate accounts, notes, reports and data relating tothe performance of the Research Plans (“Research Data”) in accordance with Arcturus’ practices and policies involving data of asimilar nature (but, in any event, no less stringent than practices and policies common in the biotechnology industry) and shall provideSGI with (and permit SGI to access during Arcturus’s regular business hours and upon at least […***…] business days’ notice)Research Data upon SGI’s request. For clarity, Arcturus shall not be required to provide any Third Party Confidential****Confidential Treatment RequestedPage 7 of 24 Information (as defined in Section 4.3) included in or as part of the records or preparation of such Research Data, provided thatforegoing does not limit the disclosure of the completed Research Data.4.3Regulatory Related Data. To the extent available to Arcturus and requested by SGI, Arcturus shall provide SGI all LNPrelated data and information reasonably necessary or useful for obtaining any approval for marketing or any clinical activity withrespect to any LUNAR Product. Notwithstanding the foregoing, this Section 4.3 does not require Arcturus to disclose any informationto SGI in violation of any of its confidentiality obligations to a Third Party (“Third Party Confidential Information”). Arcturus shallprovide the Third Party Confidential Information to any regulatory authority, institutional review board, or ethics committee to theextent requested by SGI and reasonably necessary or useful for obtaining any regulatory approval or clinical trial approval.5.Financial Terms.5.1Upfront Payment. SGI shall pay Arcturus […***…]*.5.2FTE Consideration. Together with (or within […***…] days after) delivery of each Quarterly Report pursuant toSection 4.1, Arcturus shall invoice SGI for an amount equal to the product of […***…] dollars ($[…***…]) multiplied by the lesser of(a) the amount of actual Quarterly FTE reported in the Quarterly Report for such calendar quarter, and (b) the Requested Quarterly FTEfor such calendar quarter. SGI shall pay such invoice within […***…] days after receipt.5.3Sublicensee Consideration. (a)Within […***…] days after the close of each calendar quarter, SGI shall: (i) provide Arcturus with a report of allSublicense Income received by SGI and its Affiliates during such calendar quarter; and (ii) pay Arcturus […***…] percent ([…***…]%) of such Sublicense Income. For clarity, this is the sole consideration payable to Arcturus with respect to a sublicensee’smanufacture, use, or sale of a Product.(b)On a LUNAR Product-by-LUNAR Product basis, SGI shall be entitled to deduct from the payments pursuant toSection 5.3(a) […***…] percent ([…***…]%) of all amounts paid to Third Parties to obtain the right to practice any IntellectualProperty used to develop or necessary to make, use, or sell all or a part of such LUNAR Product licensed by SGI or its Affiliates,provided, that such deductions shall not reduce the aggregate amount paid to Arcturus pursuant to Section 5.3(a) for any calendarquarter by more than fifty (50%) percent with respect to that specific LUNAR Product. For the purposes of this Section 5.3(b), the fullamount of each Sublicense Milestone Fee and Sublicense Upfront Fee under a Sublicense Agreement shall be deemed specific to eachLUNAR Product licensed under such Sublicense Agreement.5.4Consideration for LUNAR Contemplated Research Agreements. If SGI or any of its Affiliates enters into a LUNARContemplated Research Agreement with a Third Party, does not develop a LUNAR Product with such Third Party, and subsequentlylicenses Non-LUNAR Products to and develops Non-LUNAR Products with such Third Party, then SGI shall notify Arcturus upon entryinto such Third Party agreement, and pay Arcturus […***…] percent ([…***…]%) of all Sublicense Income received from such ThirdParty for such Non-LUNAR Product(s) as if such Non-LUNAR Product(s) were LUNAR Product(s) (subject to the deductions set forthin Section 5.3(b) as applied to such Non-LUNAR Product(s)). Notwithstanding the foregoing, SGI shall have no obligation to pay: (a)any amounts pursuant to this Section 5.4 with respect to Sublicense Upfront Fees of such LUNAR Contemplated Research Agreementfor which SGI makes payment pursuant to Section 5.3(a); or (b) more than […***…] dollars ($[…***…]) in the aggregate (inclusiveof all Third Party licensees/sublicensees and all Products)****Confidential Treatment RequestedPage 8 of 24 pursuant to this Section 5.4, prior to any offset pursuant to Section 5.1 or Section 6.4. For all purposes of clause (b) of the foregoingsentence, all Sublicense Upfront Fees paid to Arcturus pursuant to Section 5.3 for a LUNAR Contemplated Research Agreement shallbe deemed payments pursuant to this Section 5.4. SGI will use commercially reasonable efforts to obtain the right to provide Arcturuswith a copy of any LUNAR Contemplated Research Agreement it enters into with a Third Party. If SGI obtains such right, SGI shall useprovide Arcturus a copy of such LUNAR Contemplated Research solely for purposes of verification. Any copy provided by SGI shallbe deemed the Confidential Information of SGI.The Parties acknowledge that the exclusive license granted to SGI under this Agreement may enable SGI to induce Third Parties to enterinto self-amplifying mRNA related collaborations with SGI or its Affiliates that such Third Parties would not otherwise enter into,regardless of whether a LUNAR Product is eventually commercialized pursuant to such collaborations. The payments in this Section5.4 are intended to compensate Arcturus for the value this enablement provides. For clarity, to the extent a LUNAR Product issublicensed or commercialized, then the provisions of Section 5.3 shall apply. 5.5SGI Direct Commercialization of a LUNAR Product. To the extent SGI or its Affiliates desire to sell LUNAR Products forwhich SGI or its Affiliates obtaining Marketing Approval (as defined below), then, prior to the first commercial sale of such LUNAR Product,the Parties shall negotiate in good faith […***…]* within […***…] after SGI informs Arcturus of such intent to sell LUNARproducts. For clarity, “first commercial sale” of a LUNAR Product means SGI or its Affiliates first shipment of commercial quantities ofsuch LUNAR Product sold by SGI or its Affiliates to a Third Party for use in a country after receipt of final approval by the applicablegovernment authority to market such product for human or animal use in such country (e.g. NDA approval) (“Marketing Approval”).For clarity, Section 5.3 continues to apply (and this Section 5.5 does not apply) to a Future SGI Affiliate’s commercialization of anyLUNAR Product if such Future SGI Affiliate (as defined below) is sublicensed to commercialize such LUNAR Product under aSublicense Agreement entered into prior to the date such Future SGI Affiliate becomes an Affiliate of SGI. “Future SGI Affiliate”means an entity that becomes an Affiliate of SGI after the Effective Date. Notwithstanding any other provisions ofthis Agreement, this Section 5.5 shall terminate in the event of an Acquisition of SGI or any Affiliate of SGI with rights to the LicensedIP pursuant to this Agreement. 5.6Records. (a)Maintenance. SGI shall keep complete and accurate books and records pertaining to Sublicense Income it receivesfor a period of at least […***…] years after the relevant receipt thereof.(b)Records Examination. SGI shall permit its books and records relating to any amounts payable under thisAgreement to be examined by an independent accounting firm appointed by Arcturus on a non-contingency fee basis and reasonablyacceptable to SGI, upon reasonable notice during normal business hours, provided such examination is requested in writing at least […***…] days in advance. Such examination is to be made at the expense of Arcturus, except in the event that the results of theexamination reveal an underpayment by SGI of […***…] percent ([…***…]%) or more over the period being examined, in whichcase the costs and expenses of such examination shall be paid (or reimbursed to Arcturus, if such amounts have already been paid) bySGI. The results of any such examination shall be SGI’s Confidential Information. Arcturus may not conduct such audits more than[…***…] in any twelve (12) month period.5.7Method of Payment. All payments due to Arcturus under this Agreement shall be paid in United States Dollars by wiretransfer to a bank in the U.S. designated in writing by Arcturus. All references to****Confidential Treatment RequestedPage 9 of 24 “dollars” or “$” herein shall refer to United States Dollars. Any payment that is not paid on or before the date such payment is duehereunder shall bear interest at a rate equal to the Citibank, N.A. prime rate plus […***…]* percent ([…***…]%). 5.8Payment of Taxes. To the extent a Party is required by applicable laws to deduct and withhold taxes on any payment tothe other Party, the withholding Party shall promptly notify the other Party. The recipient Party shall provide the withholding Party anytax forms that may be reasonably necessary in order for the withholding Party not to withhold tax or to withhold tax at a reduced rateunder an applicable bilateral income tax treaty. The recipient Party shall use reasonable efforts to provide any such tax forms to theother Party in advance of the due date. After making reasonable effort to obtain the lowest tax rate, the withholding Party shall have theright to: (i) deduct those taxes from the payment; (ii) pay the taxes to the proper taxing authority in a timely manner; and (iii) sendevidence of the obligation together with proof of payment to the recipient Party within […***…] business days following thatpayment. Each Party shall also provide the other Party with reasonable assistance to enable the recovery, as permitted by applicablelaws, of withholding taxes or similar obligations resulting from payments made under this Agreement, such recovery to be for thebenefit of the recipient Party as the Party bearing such withholding tax under this Section 5.8. 5.9Invoice. Each invoice sent pursuant to this Section 5 shall be addressed to […***…] with a copy to […***…] (or suchother email addresses as requested by SGI from time to time). 6.Diligence. 6.124-Month Milestone. Prior to the second (2nd) anniversary of the Effective Date, SGI or any of its Affiliates shall enterinto a Sublicense Agreement with a Sublicense Value of at least […***…] dollars ($[…***…]).6.236-Month Milestone. Prior to the third (3rd) anniversary of the Effective Date, SGI or any of its Affiliates shall enterinto a Sublicense Agreement with a Sublicense Value of at least […***…] dollars ($[…***…]). Subject to Section 6.3, SGI shall haveno obligation under this Section 6.2 if it has failed to meet its obligations under Section 6.1. For clarity, a Sublicense Agreement thatsatisfies the milestone in this Section 6.2 will also be deemed to satisfy the milestone in Section 6.1 if entered into prior to the second(2nd) anniversary of the Effective Date.6.3Failure to Meet Milestones. SGI shall notify Arcturus promptly after failing to meet a milestone set forth in Section 6.1or 6.2 (“Milestone Failure”) and SGI shall thereupon irrevocably elect in writing within […***…] business days of the MilestoneFailure to either: (a) have SGI pay Arcturus the additional amounts set forth in Section 6.4 below to maintain exclusivity of the licensein Section 3.1; (b) convert the license in Section 3.1 to a non-exclusive license (a “Non-Exclusive Election”); or (c) terminate theAgreement effective as of […***…] days after such election. SGI’s failure to so notify Arcturus within […***…] business days afterMilestone Failure shall be deemed a Non-Exclusive Election.6.4Election to Maintain Exclusivity. If SGI makes the election set forth in Section 6.3(a) above, then SGI shall promptlypay Arcturus an annual exclusivity maintenance fee within […***…] days after: (a) the date of Milestone Failure; and (b) eachsubsequent anniversary of Milestone Failure prior to SGI entering into a Sublicense Agreement with a Sublicense Value of at least […***…] dollars ($[…***…]). The annual maintenance fee for the first payment pursuant to this Section 6.4 shall be […***…] dollars($[…***…]). Each subsequent annual maintenance fee shall be an amount equal to the previous annual maintenance fee plus […***…]% thereof (e.g. $[…***…] for the second maintenance fee, $[…***…] for the third maintenance fee, etc.). For clarity, SGIshall have no further payment****Confidential Treatment RequestedPage 10 of 24 obligations under this Section 6.4 (and the license in Section 3.1 shall remain exclusive) after SGI enters into a Sublicense Agreementwith a Sublicense Value of at least […***…]* dollars ($[…***…]). […***…].6.5Non-Exclusive Election. If SGI makes (or, pursuant to Section 6.3 or 6.4, is deemed to have made) a Non-ExclusiveElection, then the license in Section 3.1 shall become non-exclusive.6.6Exclusive Remedies. Section 6 sets forth Arcturus’s sole and exclusive remedies and SGI’s sole and exclusive liabilityfor any breach of this Section 6 (but not any breach by SGI of any other provisions of this Agreement). For clarity, Arcturus mayneither terminate this Agreement nor seek any damages against SGI for any breach of this Section 6. 7.Confidentiality.7.1Definition. “Confidential Information” means proprietary information, materials, and data of a financial, commercial ortechnical nature that the disclosing Party (the “Disclosing Party”) has supplied or otherwise made available to the other Party hereunder(the “Receiving Party”). Notwithstanding the foregoing: (a) all Research Data shall be deemed the Confidential Information of SGIonly; (b) all Arcturus Owned Program IP shall be deemed the Confidential Information of Arcturus only; and (c) all Program IP (otherthan Arcturus Owned Program IP) shall be deemed the Confidential Information of SGI only. For clarity, Confidential Informationincludes only the information shared by the Parties pursuant to this Agreement, which Confidential Information shall not be governedby that certain Mutual Nondisclosure Agreement between Arcturus and Synthetic Genomics Vaccines, Inc., effective October 13, 2016,which shall remain in full force and effect.7.2Obligations. The Receiving Party shall protect all Confidential Information against unauthorized disclosure to thirdparties with the same degree of care as the Receiving Party uses for its own similar information, but in no event less than a reasonabledegree of care. The Receiving Party shall not use the Confidential Information except as necessary to exercise its rights and fulfill itsobligations under this Agreement. The Receiving Party may disclose the Confidential Information only to its respective Affiliates, directors, officers, employees, subcontractors, licensees, consultants, attorneys, accountants, and banks (collectively, “Recipients”),who have a need-to-know such information in order for Receiving Party or its Affiliates to exercise their rights or fulfill their obligationsunder this Agreement, provided that such Recipients are bound by confidentiality and non-use obligations at least as protective of theConfidential Information as those set forth in this Agreement. Receiving Party shall be liable for any act or omission of any Recipientthat would be a breach of this Section 7 if committed or omitted by Receiving Party. The terms and conditions of this Agreement shallbe deemed the Confidential Information of each Party. 7.3Exceptions. The obligations under this Section 7 shall not apply to any information to the extent the Receiving Partycan demonstrate that such information:(a)is (at the time of disclosure) or becomes (after the time of disclosure) generally known to the public through nobreach of this Agreement by the Receiving Party or any Recipients to whom it disclosed such information; ****Confidential Treatment RequestedPage 11 of 24 (b)was rightfully known by, or was otherwise in the rightful possession of, the Receiving Party prior to the time ofdisclosure by the Disclosing Party;(c)is disclosed to the Receiving Party on a non‑confidential basis by a Third Party who is entitled to disclose it withoutbreaching any confidentiality obligation (directly or indirectly) to the Disclosing Party; or(d)is independently developed by or on behalf of the Receiving Party, as evidenced by its written records, without useof, reliance upon or access to the Confidential Information.7.4Permitted Disclosures and Use.(a)Sublicensee; Collaborators. SGI may disclose Arcturus’s Confidential Information: (i) to Third Parties inconnection with any sublicense (or potential sublicense) of the Licensed IP or a LUNAR Contemplated Research Agreement (orpotential agreement therefor), in each case, provided that such Third Party agrees to confidentiality terms substantially similar to thoseset forth herein with respect to such Confidential Information and such disclosure is solely to the extent reasonably necessary or usefulfor the purposes of any such sublicense; or (ii) regulatory authorities, institutional review boards, or ethics committees to the extentreasonably necessary or useful for obtaining any regulatory approval or clinical trial approval, provided that SGI will use reasonableefforts to request confidential treatment with respect thereto.(b)Research Data. Arcturus may use (but may not disclose) the Research Data for its own internal research purposes.(c)Disclosure of Terms. Each Party may disclose the terms of this Agreement to its potential investors and acquirerson a confidential basis in connection with a potential investment or acquisition (as applicable). In addition, either Party may disclosemay disclose the terms of this Agreement to its potential licensees or sublicensees on a confidential basis as reasonably necessary inconnection with a potential license; provided that SGI shall have a pre-approval right, not to be unreasonably withheld, with respect toany proposed disclosure of the terms of this Agreement by Arcturus to any potential licensees or sublicensees. SGI’s decision not toapprove such disclosure to an entity that SGI in good faith believes is, or reasonably may be, competitive with respect to the Productsshall not be deemed unreasonable.(d)Disclosure Pursuant to Law or Order. Receiving Party may disclose Confidential Information that it is required todisclose under applicable laws or a court order, provided that the Receiving Party: (i) provides the Disclosing Party with prompt noticeof such disclosure requirement if legally permitted; (ii) affords the Disclosing Party an opportunity to oppose or limit, or secureconfidential treatment for such required disclosure and reasonably cooperates with the Disclosing Party’s opposition or limitationefforts, as the case may be; and (iii) if the Disclosing Party is unsuccessful in its efforts pursuant to subsection (ii), Page 12 of 24 discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose.(e)Publicity. The Parties agree that they will mutually agree in good faith upon a press release announcing theexecution of this Agreement within […***…]* business days of the Effective Date.7.5Use of Name. Neither Party shall use the name of the other Party in relation to this Agreement in any publicannouncement, press release or other public document without the written consent of the ****Confidential Treatment RequestedPage 13 of 24 other Party; provided, however, that either Party may use the name of the other Party to the extent reasonably required in any documentfiled with the FDA or SEC (or similar authorities).8.Representations and Warranties; Disclaimer.8.1Mutual Representations and Warranties. Each Party represents and warrants to the other that:(a)it has the requisite corporate power and authority to enter into and to deliver this Agreement, to grant the rights andlicenses under this Agreement and to perform its obligations under this Agreement;(b)this Agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with itsterms;(c)entry into this Agreement does not conflict with or is inconsistent in any material respect with the terms of anyexisting agreement with a Third Party;(d)to the knowledge of such Party the research and development of a LUNAR Product as contemplated under thisAgreement does not infringe or misappropriate any Intellectual Property owned by any Third Party;(e)to the knowledge of such Party the Licensed IP does not misappropriate any Intellectual Property owned by anyThird Party;(f)there are no claims, judgments or settlements against or owed by such Party (or any of its Affiliates) and nopending claims or litigation, or the knowledge of such Party, threatened claims or litigation, with respect to any Intellectual Propertylicensed pursuant to this Agreement;(g)none of the employees or consultants that a Party assigns to any Research Plan has, at the time of such assignment,been debarred by the FDA (or similar action by any similar foreign authority), or subject to any FDA debarment investigation orproceeding (or similar proceeding by any similar foreign authority) for any reason; and(h)the execution, delivery and performance of this Agreement by it (i) has been duly authorized by all necessaryaction on its part and on the part of its board of directors, or board of managers as Page 14 of 24 applicable, and (ii) shall not conflict with, or result in a violation of, its certificate of incorporation, bylaws or other equivalentorganizational or institutional documents.8.2Representations and Warranties of Arcturus. Arcturus represents and warrants to SGI that:(a)Exhibit A sets forth a complete and accurate list of all patents and patent applications that are both (i) relevant toLNP delivery, and (ii) owned or controlled by Arcturus as of the Effective Date;(b)Arcturus has not assigned, transferred, conveyed or otherwise encumbered its right, title and interest in theLicensed IP in a manner that conflicts with any rights granted to SGI; and(c)Arcturus’s employees who are assigned to work on any Research Plan have signed Intellectual Propertyassignment agreements and non-disclosure agreements with obligations consistent with those contained in this Agreement.8.3Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 8, (A) NEITHER PARTY MAKES ANYREPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OROTHERWISE, AND THE LICENSED IP IS PROVIDED “AS IS,” AND (B) EACH PARTY DISCLAIMS ANY AND ALLWARRANTIES OF ANY KIND OR NATURE, WHETHER EXPRESS OR IMPLIED, RELATING TO THE SUBJECT MATTERHEREUNDER, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE,AND NON-INFRINGEMENT.9.Patents. 9.1Prosecution. Arcturus shall control the prosecution, filing and maintenance of all patents and patent applications withinthe Licensed IP (including, without limitation, the Arcturus Owned Program IP). Arcturus shall provide SGI with reasonably completedrafts of all material submissions to patent authorities relating to the Licensed IP, including, without limitation, patent applications andamendments, and to give SGI a reasonable opportunity (but no less than […***…]* days) to comment on such documents with respectto specific LUNAR Products prior to their filing. Arcturus shall not unreasonably refuse to accept SGI’s suggestions and advice withrespect to such documents. 9.2Standby Prosecution Rights. Arcturus shall promptly notify SGI if Arcturus determines (a) not to file a patentapplication on any material invention within the Arcturus Owned Program IP, or (b) to abandon any patent or patent application withinthe Licensed IP specific to LUNAR Products. In any event, Arcturus shall provide such notification at least […***…] days prior to thedeadline for filing or the date on which such abandonment, as the case may be, would become effective. Upon such notification, SGIshall have the right, at its option, to control the preparing, filing, prosecuting and maintenance of such patent or patent applications, aswell as re-examinations, reissues and requests for patent term extensions and the like with respect to such patent or patent application,together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to any such patent orpatent application. For clarity, to “abandon” a patent or patent application shall include deciding not to defend against an opposition,not to defend an interference or similar proceeding or not to pursue an appeal of an adverse decision, in each case, with respect to suchpatent or patent application.9.3Infringement.(a)SGI Right to Prosecute. So long as SGI remains the exclusive licensee of the Licensed IP with respect to anyLUNAR Products, SGI, to the extent permitted by law, shall have the right, under its own control and at its own expense, to prosecuteany Third Party infringement of the Licensed IP with respect****Confidential Treatment RequestedPage 15 of 24 to any LUNAR Products, provided that SGI shall consult with Arcturus and shall consider the views of Arcturus regarding theadvisability of the proposed action on the proposed strategy with respect prosecution of any Third Party infringement of the Licensed IPwith respect to LUNAR Products. If required by law, Arcturus shall permit any such action to be brought in its name, including beingjoined as a party-plaintiff at SGI’s cost and expense.(b)Arcturus Right to Prosecute. In the event that SGI is unsuccessful in persuading the alleged infringer to desist orfails to have initiated an infringement action within […***…]* days after SGI first becomes aware of the basis for such action, and inthe event Arcturus desires to prosecute such infringement, it shall so notify SGI. During the […***…] day period following receipt ofsuch notice by SGI, Arcturus shall consult with SGI and shall consider the views of SGI regarding the advisability of the proposedaction. Arcturus agrees that it shall not commence any such action if SGI either commits to initiating an infringement action within […***…] days or demonstrates a reasonable concern that bringing such action may adversely affect a LUNAR Product. If SGI fails toprosecute such infringement or make such commitment or demonstration within this […***…] day period, Arcturus shall have theright, at its sole discretion, to prosecute such infringement under its sole control and at its sole expense.(c)Declaratory Judgment Actions. If a declaratory judgment action is brought naming either Party as a defendant andalleging invalidity or unenforceability of any of any patent or patent application with the Licensed IP, the Party first having notice of theclaim or assertion shall promptly notify the other Party, and the Parties shall promptly confer to consider the claim or assertion and theappropriate course of action. Each Party shall have the right to defend itself against a suit that names it as a defendant. If Arcturus isnamed in such legal action but not SGI, then SGI shall have the right to join, at its own expense, any such legal action and to berepresented in such action by its own counsel. (d)Settlements. Neither Party shall enter into any settlement of any claim described in this Section 9.3 that admits tothe invalidity, narrowing of scope or unenforceability of any patent applications or patents within the Licensed IP or this Agreement,incurs any financial liability on the part of any other Party, or requires an admission of liability, wrongdoing or fault on the part of theother Party without such other Party’s prior written consent, not to be unreasonably withheld. (e)Recovery. Any recovery obtained in claims brought by either Party under Sections 9.3(a) or 9.3(b) shall bedistributed as follows: (a) each Party shall be reimbursed for any costs and expenses incurred in the action (including the amountdeducted from payment to Arcturus pursuant to Section 9.3(d)); (b) as to any remaining amounts attributable to ordinary damages, theParty bringing the action shall receive all such amounts, provided that any such damages that are not punitive or exemplary damagesreceived by SGI shall be deemed Sublicense Income and subject to payment to Arcturus pursuant to Section 5.3; and (c) as to anyremaining amounts attributable punitive or exemplary damages, the Party bringing the action shall ****Confidential Treatment RequestedPage 16 of 24 be entitled to seventy five percent (75%) of the award and the other Party shall be entitled to twenty five percent (25%) of the award.(f)Cooperation. Each Party agrees to cooperate in any action under this Section 9 that is controlled by the other Party,provided that the controlling Party reimburses the cooperating Party promptly for any costs and expenses incurred by the cooperatingParty in connection with providing such assistance.10.Term and Termination.10.1Term. (a)Unless earlier terminated pursuant to this Section 10.1, this Agreement shall continue in full force and effect untilthe expiration, abandonment, or termination of the last Valid Claim of a patent within the Licensed IP (the “Term”).(b)The Agreement shall terminate on the seventh (7th) anniversary of the Effective Date if both: (i) SGI makes (orpursuant to Section 6.3 or 6.4 is deemed to have made) a Non-Exclusive Election; and (ii) neither SGI nor any sublicensee of SGI hascommenced a GLP toxicology study for at least one (1) LUNAR Product (A) in rodents by the fifth (5th) anniversary of the EffectiveDate, or (B) in non-human primates by the sixth (6th) anniversary of the Effective Date. If the Term terminates pursuant to this Section10.1(b) then either Party may notify the other Party that it desires to extend the Term and, upon the other Party’s receipt of suchnotification, the Parties shall meet for a period not to exceed thirty (30) days to discuss the potential for a mutually agreed extension ofthe Term.(c)SGI Termination for Convenience. SGI may terminate this Agreement at any time upon ninety (90) days priorwritten notice to Arcturus.(d)Termination for Breach. Either Party may terminate this Agreement upon a material uncured breach of thisAgreement by the other Party by providing sixty (60) days prior written notice to the other Party. The termination shall becomeeffective at the end of the notice period unless the breaching Party cures such breach during such notice period. 10.2Effect of Termination. Upon termination or expiration of this Agreement, payment obligations that accrued prior totermination and the following provisions shall survive termination or expiration of this Agreement: Sections 1, 3.2, 4 (for a period ofninety (90) days following termination), 5.3 (but only with respect to sublicenses granted prior to such termination or expiration andthen only if the sublicensee is not required to make payments directly to Arcturus as provided in clause (a) of the next sentence of thisSection 10.2), 5.4 (with respect to LUNAR Contemplated Research Agreements entered into prior to termination), 5.6, 5.7, 5.8, 7, 8.3,10.2, 11 and 12. Notwithstanding the foregoing, each sublicense granted by SGI prior to the termination of this Agreement shall: (a) ifsuch termination is pursuant to Section 10.1(c) or 10.1(d) for SGI’s material breach, survive but be assumed by Arcturus as if Arcturusgranted the sublicensed rights directly to the sublicensee, provided that such sublicensee (i) agree to directly pay Arcturus the amountsArcturus would receive pursuant to Section 5.3 for Sublicense Income that becomes payable to SGI after the date of termination, ratherthan paying such portion of Sublicense Income to SGI, and (ii) agree to grant Arcturus the same audit rights that such sublicenseegrants to SGI; or (b) if such termination is for any other reason, such sublicense shall survive, provided that SGI or its designee makesthe corresponding payments pursuant to Section 5.3 when due. For clarity, neither the amounts paid or payable by a sublicensee toArcturus pursuant to clause 10.2(a)(i) nor the corresponding amounts paid or payable by a sublicensee to SGI shall be deemedSublicense Income. Additionally, Section 3.1 shall survive expiration (but not Page 17 of 24 termination) of this Agreement solely with respect to Licensed IP in existence as of the date of expiration of this Agreement.11.Limitation of Liability. Except for a breach of Section 3.1 or Section 7, neither Party nor its directors, officers, employees,consultants or agents, shall be responsible or liable for a breach of this Agreement for any indirect, special, punitive, incidental orconsequential damages regardless of legal theory. 12.General Provisions.12.1Relationship of the Parties. The Parties recognize and agree that each is operating as an independent contractor andnot as an agent of the other. This Agreement shall not constitute a partnership or joint venture, and neither Party shall be bound by theother to any contract, arrangement or understanding except as specifically stated herein.12.2Assignment. Neither Party may assign this Agreement without the other Party’s written consent. Notwithstanding theforegoing, each Party may, without the other Party’s written consent, assign its rights under this Agreement to: (a) an Affiliate; or (b) anentity that acquires all (or substantially all) of its stock, business, or assets to which this Agreement relates. Any assignment not inaccordance with the first sentence of this Section 12.2 shall be void and without effect. The assigning Party shall notify the other Partyof any permitted assignment pursuant to this Section 12.2, identifying the assignee and contact information within […***…]* businessdays after any such permitted assignment. For clarity, the assignment of rights pursuant to this Section 12.2 shall not be deemed asublicense.12.3Notices. Any notice, report, approval or consent required or permitted hereunder shall be in writing and shall bedeemed to have been duly given to a Party if delivered personally or mailed by first- ****Confidential Treatment RequestedPage 18 of 24 class, registered or certified mail, postage prepaid to the address of that Party as set forth below; or such other address as is provided bythat Party to the other upon ten (10) days written notice.Arcturus:Arcturus Therapeutics, Inc.10628 Science Center Drive, Suite 200San Diego, CA 92121Attn: Chief Executive OfficerWith a copy to:Cooley LLP3175 Hanover St.Palo Alto, CA 94303Attn: Glen SatoEmail: gsato@cooley.com SGI: Synthetic Genomics, Inc.Attn: CTO (with a copy to the General Counsel)11149 North Torrey Pines RoadLa Jolla, CA 9203712.4Waiver. No failure to exercise, and no delay in exercising, on the part of either Party, any privilege, power, or righthereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any privilege, right or power hereunder precludefurther exercise of any other privilege, right or power hereunder. Any waivers or amendments shall be effective only if made in writingand signed by authorized representatives of the Parties.12.5Severability. If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to beunenforceable or invalid, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shallotherwise remain in full force and effect and enforceable.12.6Governing Law; Arbitration. This Agreement shall be governed by and construed pursuant to the laws of the State ofCalifornia without regard to conflicts of laws provisions thereof and without regard to the United Nations Convention on Contracts forthe International Sale of Goods. For all purposes of this Agreement, the Parties hereby submit to the exclusive jurisdiction of the stateand federal courts located in San Diego County, California. In any action or proceeding to enforce rights under this Agreement, theprevailing Party shall be entitled to recover its reasonable costs and attorneys’ fees.12.7Entire Agreement. This Agreement is the complete and exclusive statement of the agreement and understanding of theParties and supersedes and cancels all previous written and oral agreements, understandings and communications relating to the subjectmatter of this Agreement. No amendment or change hereof or addition hereto shall be effective or binding on either of the Parties unlessreduced to writing and duly executed on behalf of both Parties. Page 19 of 24 12.8Construction. The headings to the sections in this Agreement are not a part of this Agreement, but are included merelyfor convenience of reference only and shall not affect its meaning or interpretation. Any use of the term “including” shall mean“including without limitation.” Unless the context clearly requires otherwise, whenever used in this Agreement the word “or” shallhave its inclusive meaning of “and/or” except when paired as “either/or” or as otherwise clearly indicated by the context. [SIGNATURE PAGE FOLLOWS] Page 20 of 24 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed so as to be effective on the date setforth above. SYNTHETIC GENOMICS, INC. ARCTURUS THERAPEUTICS, INC. By: /s/ Oliver Fetzer By: /s/ Joseph E. PayneName: Oliver Fetzer Name: Joseph E. PayneTitle: CEO Title: President & CEO Exhibit AArcturus Patents and Patent Applications[…***…]* ****Confidential Treatment Requested […***…]*****Confidential Treatment Requested […***…]* ****Confidential Treatment Requested Exhibit 4.9 ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 COVERSHEETRESEARCH AGREEMENT Arcturus Therapeutics, Inc., a corporation organized and existing under the laws of Delaware, USA and having its registered office at 10628 Science CenterDrive Suite 200, San Diego, California 92121, USA (“Arcturus”) and Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of TakedaPharmaceutical Company Limited, a corporation organized and existing under the laws of Delaware and having it registered office at 40 Landsdowne Street.Cambridge, MA 02139 (“Takeda”) agree as follows: PURPOSE AND DOCUMENTS COMPRISING THIS AGREEMENT Arcturus is an industry leader in the application of RNA technologies for the treatment of disease and possesses platform technologies enabling discoveryand development of RNA medicines. Takeda is a pharmaceutical company engaging in the research, development, manufacture and commercialization ofpharmaceutical products for the treatment of gastroenterological or gastrointestinal disease or disorders and interested in accessing Arcturus’s RNA platformtechnologies. Arcturus and Takeda agree to execute this Research Agreement (“Agreement”) and jointly conduct a research program to discover siRNAmedicines for the treatment of Nonalcoholic Steatohepatitis (“NASH”). This Agreement governs the performance of the research program and the rights,obligations and licenses granted to Arcturus and Takeda and includes the following documents and mutually agreed upon updates thereto: 1.Cover Sheet 2.Appendix A – Terms and Conditions 3.Appendix B – Research Program and Budget 4.Appendix C – Report Form 5.Appendix D – Funding 6.Appendix E – Patent ListKEY ADMINISTRATIVE INFORMATION ARCTURUS CONTACT INFORMATIONAddress: 10628 Science Center Drive, San Diego, California 92121, USATelephone: 858-900-2662Principal Investigator: Pad Chivukula, Ph.D.TAKEDA CONTACT INFORMATIONAddress: 26-1, Muraoka-Higashi 2-Chome, Fujisawa, Kanagawa 251-8555,Japan Telephone:[…***…]*Takeda Contact: […***…] Effective Date: December 6, 2016 Research Term: Eighteen (18) months from the Effective Date SIGNATURESArcturus and Takeda agree they have read and understand this entire Agreement, including without limitation their respective responsibilities andobligations, and agree to be bound by it. This Agreement will be effective as of the Effective Date set forth above and is executed by duly authorizedrepresentatives of Arcturus and Takeda. Arcturus Therapeutics, Inc., Millennium Pharmaceuticals, Inc. By:/s/ Pad Chivukula By:/s/ Nenad GrmusaPrint Name:Pad Chivukula Print Name:Nenad GrmusaTitle:Chief Scientific Officer Title:Head of Global R&D FinanceDate:12 06, 2016 Date:12 06, 2016 * ***Confidential Treatment Requested APPENDIX A – TERMS AND CONDITIONS 1.DEFINITIONS 1.1Defined Terms. Capitalized terms shall have the following definitions: 1.1.1“Access Fee” has the meaning set forth in Section 3.1. 1.1.2“Affiliate” means any corporation, company, partnership, joint venture and/or firm which controls, is controlled by or is undercommon control with Takeda, and “control” in this definition means direct or indirect ownership of the voting stock or othercomparable ownership interest of such corporation, company, partnership, joint venture or firm on no less than a fifty percent(50%) basis. 1.1.3“Applicable Law” means any law, regulation, directive, treaty, convention, statute, rule, ordinance, industrial code, anypronouncement, judgment, order or ruling of any legislative body, competent court, tribunal or other governmental orregulatory agency or authority that would apply to any and all activities contemplated hereunder. 1.1.4“Arcturus Background Technology” means any scientific knowhow, data, result, information, conclusion, technology,knowledge, experience, expertise, skill technique, method, process, practice, discovery, invention, trade secret, formula,pattern, compilation, program, device, material, compound, composition, formulation, product, preparation, usage informationand/or any material or source thereof, whether or not claimed by a Patent, that are necessary or useful for conducting theResearch Program or for Exploiting the Research Results and that (a) are owned or controlled by or on behalf of Arcturus priorto or as of the Effective Date or (b) thereafter come to be owned or controlled by or on behalf of Arcturus outside of activitiesconducted for the Research Program hereunder, including clinical expertise in siRNA therapeutics, LUNAR™ and UNAOligomer. 1.1.5“Arcturus Research Results” means the Research Results that are specifically related to improvements to LUNAR™ or UNAOligomer itself. 1.1.6“Bankruptcy Laws” has the meaning set forth in Section 6.4.3.1. 1.1.7“Claim” has the meaning set forth in Section 8.1. 1.1.8“Confidential Information” means any scientific, technical, trade or business information given by one party (as applicable,“Disclosing Party”) or its Affiliate to the other party (“Receiving Party”) or its Affiliate which is treated by the DisclosingParty as confidential or proprietary. Confidential Information does not include information that (a) is in the possession of theReceiving Party or its Affiliate at the time of disclosure hereunder, as reasonably demonstrated by competent records; (b) is orlater becomes generally available to the public through no fault of the Receiving Party or its Affiliate; (c) is received by theReceiving Party or its Affiliate from a third party having no confidentiality obligation to the Disclosing Party or its Affiliate;or (d) is developed or acquired independently by or on behalf of the Receiving Party or its Affiliate without reference of theConfidential Information, as reasonably demonstrated by competent records. 1.1.9“Cover Sheet” means the cover sheet to this Agreement, which contains, among other things, the signatures of the parties. 1.1.10“Criteria” has the meaning set forth in Section 2.4. 1.1.11“Disclosure Notice” has the meaning set forth in Section 4.1. 1.1.12“Exploit” means to research, develop, make, use, sell, offer to sell, import, export, and/or otherwise commercialize (e.g., todistribute, manufacture, introduce, market, detail, promote and/or advise), including to have made, used, sold, offered to sell imported, exported and/or otherwise commercialized. “Exploitation” or “Exploiting” has a corresponding meaning. 1.1.13“Final Report” means the report described in Section 2.4. 1.1.14“Force Majeure” means, with respect to a party, any contingency beyond its reasonable control that could not have beenavoided by due care being taken by such party which, in whole or in material part, prevents such party’s performance of itsobligations, except payment obligations, under this Agreement, including war, hostilities between nations, civil unrest, riots,strikes, lockouts, sabotage, energy shortages, fire, floods and acts of nature such as typhoons, hurricanes, earthquakes, ortsunamis. 1.1.15“Indemnitee” has the meaning set forth in Section 8.3. 1.1.16“Licensed Technology” means Arcturus Background Technology and Arcturus Research Results granted by Arcturus toTakeda in Section 4.3. 1.1.17“LUNAR™” means Arcturus’s proprietary lipid-enabled and unlocked nucleic acid modified RNA delivery technologyincluding, any invention claimed by a Patent listed in Appendix E. 1.1.18“Negotiation Period” has the meaning set forth in Section 4.3. 1.1.19“Option” has the meaning set forth in Section 4.3. 1.1.20“Option Period” has the meaning set forth in Section 4.3. 1.1.21“Patent” means, with respect to a particular invention, (a) any patent application, originally filed and pending anywhere in theworld, that includes any claim covering the invention, including any provisional or non-provisional application and anyrelated patent application, thereafter filed and pending anywhere in the world, that includes any claim covering suchinvention or any common priority right, including continuation, continuation-in-part, divisional or substitute applicationand/or (b) any patent, issued or granted from any such patent application and existing anywhere in the world, any reissue,renewal, re-examination or extension (including by virtue of any supplementary protection certificate) of any such patent, anyconfirmation, registration, substitution of such patent, or patent of addition based on any such patent, and/or any foreigncounterpart or equivalent in any country or jurisdiction in the world. 1.1.22“Research Funding” has the meaning set forth in Section 3.2. 1.1.23“Research Milestone” has the meaning set forth in Section 3.3. 1.1.24“Research Program” means the research whose plan (including, role and responsibility of each party hereto, timeline andschedule) is set forth in Appendix B. 1.1.25“Research Results” means any knowhow, data, information, conclusion, technology, knowledge, experience, expertise, skill,technique, method, idea, concept, experimental protocol, process, practice, discovery, invention, trade secret, principle,formula, pattern, compilation, program, device, material, compound, composition, formulation, product, preparation, usageinformation and/or any material or source thereof conceived or developed in the performance of the Research Program, or as aresult of performance of the Research Program. For purposes of this Agreement, Research Results include all patentapplications and patents that issue or have issued from any of those applications that disclose and/or claim that invention ordiscovery, including, U.S. and foreign applications, divisions, continuations, and continuations- in-part, patents, applicationsfor certificates of invention and priority rights, certificates of invention, reissues, re-examination certificates, extensions orother governmental acts that effectively extend the period of exclusivity by the patent holder, substitutions, renewals,supplementary protection certificates, confirmations, registrations, validations and additions. 1.1.26“Stage Report” has the meaning set forth in Section 2.4. 1.1.27“Subject Patent” means any Patent comprised within the Licensed Technology and Takeda Research Result. 1.1.28“Subject Product” mean any pharmaceutical preparation for any human use which contains siRNA generated based on UNAOligomer™ in the Research Program as its active ingredient and whose formulation is based on LUNAR™, and whosemanufacture, import, use, offer for sale or sale would, absence the license of Licensed Technology and the assignment ofTakeda Research Results to Takeda hereunder, constitute an infringement, induced of infringement or contributoryinfringement of any valid claim of a Subject Patent. 1.1.29“Takeda Collaborator” has the meaning set forth in Section 4.3. 1.1.30“Takeda Research Results” means any Research Results other than the Arcturus Research Results. 1.1.31“Term” has the meaning set forth in Section 6.1. 1.1.32“Third Party” means any person or entity other than either party hereto or its Affiliate. 1.1.33“UNA Oligomer” means Arcturus’s unlocked nucleomonomer agent (UNA) oligomer including any invention claimed by aPatent listed in Appendix E. 1.2Interpretation. In this Agreement, unless the context requires otherwise: 1.2.1References to an Article, Section or Appendix is a reference to an article or section of or appendix attached to, this Agreement,as the case may be; 1.2.2References to this “Agreement” include the Cover Sheet and Appendixes attached hereto, which form an integral part of thisAgreement for all purposes, as this Agreement may be amended from time to time in accordance with its terms and conditions;it being agreed that in case of discrepancy between this instrument and one or more of the Appendix(es) hereto, this instrumentshall prevail; 1.2.3Words using the singular or plural number also include the plural or singular number, respectively, and words denoting anygender shall include all genders; 1.2.4References to a document are to that document as varied, supplemented or replaced from time to time in accordance with itsterms; and 1.2.5The words “include” or “including” or “for example” or “e.g.,” shall be deemed to be without limitation whatsoever, except ifotherwise specified.2.RESEARCH PROGRAM. 2.1Research Program Performance. Arcturus and Takeda shall use commercially reasonable effort to conduct the Research Program in ascientifically proficient and professional manner and in accordance with its plan specified in Appendix B to maximize the results andoutput therefrom. The Research Program shall commence on the Effective Date and continue for the Research Term specified on the CoverSheet unless terminated or extended in accordance with Article 6. 2.2Grants of License for Research Program. During the Research Term, Arcturus hereby grants a non-exclusive and worldwide license toTakeda, with a right to sublicense to Takeda’s Affiliates and/or bone fide collaborators, to use Arcturus Background Technology for the purpose of conducting the Research Program. 2.3Primary Contacts for Scientific Matters / Scientific Communications. The Principal Investigator and the Takeda Contact who are namedin the Cover Sheet, or their respective designees, are the primary contacts for Arcturus and Takeda, respectively, on scientific matters whicharise under the Research Program. During the Research Term, Arcturus shall have the Principal Investigator or its designee meet orcommunicate Takeda Contact or its designees regularly (at least monthly) to discuss and monitor the status of Research Program and theResearch Results and to consider modifications, if necessary, to the Research Program based upon that status or then available ResearchResults. 2.4Reports. Upon the completion of each stage of Research Program, Arcturus shall submit to Takeda a written report (“Stage Report”) in aformat substantially similar to the format set forth in Appendix C, including, without limitation (a) summary in the stage, (b) any ResearchResults generated during the stage period and (c) Research Program funds expended during the stage period, so that Takeda may confirmwhether criteria specified in Appendix B (“Criteria”) are achieved before Arcturus commences the subsequent stage. Arcturus shall alsosubmit to Takeda a comprehensive final report (“Final Report”) within […***…] days after termination or expiration of the ResearchProgram detailing the performance of the Research Program and all Research Results made hereunder (including, raw data of anyexperiment and protocol and methods used in the Research Program) as well as expended Research Funding. 2.5Record Keeping. Arcturus and Takeda shall keep accurate scientific records relating to its responsible activities in the Research Programthat are sufficient to document any patentable Research Results. Those records kept by Arcturus shall be made available to Takeda duringnormal business hours upon reasonable advance notice for the Term and thereafter […***…] years. 2.6Contracting to Third Party. Unless explicitly permitted in the Appendix B, Arcturus shall not contract to any Third Party to conduct theResearch Program, in part or whole, without obtaining prior written approval of Takeda. Takeda may contract to any Third Party to conductthe Research Program, in part or whole, without obtaining approval of Arcturus. In the event that Arcturus or Takeda contracts to the ThirdParty to conduct the Research Program, in part or whole, the contracting party shall impose on the Third Party contractor the sameobligations that such party undertakes to the other party hereunder and the contracting party shall remain responsible to the other party forthe performance of such obligations by the Third Party contractor. 2.7Exclusivity. During the Research Term and two (2) years thereafter, Arcturus shall not engage in any research or development activities forwhich LUNAR™ and UNA Oligomer are used and whose target is the same as or substantially similar to the targets of the Research Program(i.e., […***…]). If Takeda requests to add additional targets in the Research Program, the parties hereto will negotiate in good faith anamendment to this Agreement, including the scope of exclusivity set forth in this Section 2.7 and Appendix B. Any amendments to theResearch Program and Budget must be approved in writing by both parties.3.ACCESS FEE, RESEARCH FUNDING AND RESEARCH MILESTONES. 3.1Access Fee. In consideration of the license to Arcturus Background Technology granted to Takeda under Section 2.2 and the exclusivitygranted to Takeda pursuant to Section 2.7, Takeda shall pay to Arcturus […***… US Dollar (US$ […***…]) ](“Access Fee”). The AccessFee shall be onetime upfront payment and become due and payable within sixty (60) days after Takeda receives an invoice from Arcturus. 3.2Research Funding. In support of the performance by Arcturus of the Research Program, Takeda shall pay to Arcturus […***…] US Dollar(US$ […***…]) (“Research Funding”). Research Funding shall be paid in accordance with the fixed payment schedule set forth inAppendix D. Unless otherwise agreed in writing with Takeda, the total amount of Research Funding payable by Takeda to Arcturus shallnot exceed […***…] US Dollar (US$ […***…]) and Arcturus shall bear any additional costs necessary for the performance of ResearchPrograms. Arcturus shall use the Research Funding solely for the performance of the Research Program (including, wages, supplies, operating expenses and otherexpenses as set forth in the budget in Section 2 of Appendix B), report to Takeda on expended Research Funds in the Stage Reports and theFinal Report and upon the completion of Research Program, reimburse to Takeda any part of the Research Funding which is paid byTakeda to Arcturus and remains unspent or uncommitted for expenditure at the time of completion. 3.3Research Milestones. In consideration of the rights to Takeda Research Results that Takeda comes to own hereunder, Takeda shall pay toArcturus the following research milestone (“Research Milestone”). Each Research Milestone shall be onetime payment and due andpayable within […***…]* days after Takeda receives the relevant invoice from Arcturus. Milestone EventAmount[…***…][…***…][…***…][…***…] 3.4Taxes. 3.4.1Payment of Tax. A party receiving a payment pursuant to this Agreement shall pay any and all taxes levied on such payment.A party making a payment pursuant to this Agreement shall make a reasonable effort to obtain the lowest tax rate underApplicable Law for taxes required to be deducted and withheld. If Applicable Law require that taxes be deducted and withheldfrom a payment made pursuant to this agreement, after a party making a payment makes a reasonable effort to obtain the lowesttax rate, the remitting party shall: (i) deduct those taxes from the payment; (ii) pay the taxes to the proper taxing authority; and(iii) send evidence of the obligation together with proof of payment to the other Party within […***…] days following thatpayment. 3.4.2Tax Residence Certificate. A party receiving a payment pursuant to this Agreement shall provide the remitting partyappropriate certification from relevant revenue authorities that such party is a tax resident of that jurisdiction, if such receivingparty wishes to claim the benefits of an income tax treaty to which that jurisdiction is a party. Upon the receipt thereof, anydeduction and withholding of taxes shall be made at the appropriate treaty tax rate. 3.4.3Assessment. Either party hereto may, at its own expense, protest any assessment, proposed assessment, or other claim by anygovernmental authority for any additional amount of taxes, interest or penalties or seek a refund of such amounts paid ifpermitted to do so by Applicable Law. The parties hereto shall cooperate with each other in any protest by providing recordsand such additional information as may reasonably be necessary for a party to pursue such protest.4.RESEARCH RESULTS. 4.1Disclosure of Patentable Research Results. Arcturus and Takeda shall promptly and fully disclose to the other party in writing anypatentable Research Results. Disclosure of the patentable Research Results by one party to the other party shall be sent to Takeda Contactor Arcturus Contact, by certified or registered mail, return receipt requested, by courier, return receipt requested or by prepaid recognizednext business day delivery service. For clarity, the submission of other documents contemplated herein (e.g., reports provided in Section2.4) do not fulfill the requirements of this Section 4.1. 4.2Research Results. 4.2.1Arcturus Research Results. Regardless of the inventorship, the Arcturus Research Results shall be vested solely in Arcturusand become sole property of Arcturus. Takeda shall assign and hereby assigns any right, title and interest in and to the* ***Confidential Treatment Requested Arcturus Research Result originally vested in it to Arcturus so that Arcturus solely owns Arcturus Research Results withoutseeking any consideration from Arcturus and shall take reasonable action, procedure or step, including executing valid andenforceable agreement, document, instruments or any other arrangements with Arcturus, necessary to effectuate the assignmentof the said interests pursuant to this Section 4.2.1. Subject to the license granted to Takeda under Sections 4.3 below, Arcturusmay be free to Exploit the Arcturus Research Results at its costs and responsibilities. Arcturus may control the prosecution ofthe patent comprised within Arcturus Research Results (including, preparation, filing, maintenance, defence and disposalthereof), and Takeda shall cooperate with Arcturus for such prosecution at Arcturus’s reasonable cost bearing and upon requestof Arcturus, including, to provide Arcturus with data, information, books and record regarding the relevant invention inArcturus Research Results or to execute documentations and interviews necessary therefor. 4.2.2Takeda Research Results. Regardless of the inventorship, the Takeda Research Results shall be vested solely in Takeda andbecome sole property of Takeda. Arcturus shall assign and hereby assigns any interest in and to the Takeda Research Resultoriginally vested in it to Takeda so that Takeda solely owns Takeda Research Results without seeking any consideration fromTakeda other than the consideration set forth in Section 3.3 and shall take reasonable action, procedure or step, includingexecuting valid and enforceable agreement, document, instruments or any other arrangements with Takeda, necessary toeffectuate the assignment of the said interests pursuant to this Section 4.2.2. Takeda may be free to Exploit any TakedaResearch Results. Takeda may control the prosecution of the patent comprised within Takeda Research Results (including,preparation, filing, maintenance, defence and disposal thereof), and Arcturus shall cooperate with Takeda for such prosecutionat Takeda’s reasonable cost bearing and upon request of Takeda, including, to provide Takeda with data, information, booksand record regarding the relevant invention in Takeda Research Results or to execute documentations and interviewsnecessary therefor. 4.3Grants of Negotiation Option for License. Arcturus hereby grants to Takeda an option to negotiate with Arcturus to obtain a non-exclusive and worldwide license to use Arcturus Background Technology and Arcturus Research Results for the purposes of Exploitationof Takeda Research Results, with a right to sublicense to any Affiliate and any Third Party who engage in any activities for or on behalf ofTakeda and/or its Affiliate including a contract research organization, contract manufacturing organization and any other contractor, andany collaborator in research, development and commercialization (“Takeda Collaborator”). The aforementioned negotiation option(“Option”) may be exercised by Takeda with a written notice to Arcturus at any time for a period commencing on the Effective Date andending on […***…]* days after the date of Takeda’s receipt of the Final Report (“Option Period”). The terms and conditions of any suchlicense shall be negotiated in good faith and agreed upon in writing between the parties within […***…] months after the exercise of theOption by Takeda (“Negotiation Period”). During the Option Period and the Negotiation Period if Takeda exercises the Option with in theOption Period, Takeda has a right to use, by itself or through its Affiliate and/or Takeda Collaborator, Arcturus Background Technologyand Arcturus Research Results solely for the purpose of evaluating Takeda Research Results and/or evaluating its interests in exercising anOption or entering into a license agreement with Arcturus and, in addition, during such period, upon Takeda’s request, Arcturus shallprovide Takeda with reasonable assistance, advice and consultation with respect to the Arcturus Background Technology and ArcturusResearch Results, so that Takeda may effectively perform the evaluation.The financial terms (e.g., the amount of milestone payment and royalty rate) shall be determined by taking (a) the value of the relevantpatent comprised within the Licensed Technology and Takeda Research Results, including the scope of valid claim, exclusivity andenforceability thereof, the Third Party’s intellectual properties relevant thereto, (b) profitability of the Subject Product, and (c) other factorsinvolving similar transactions within the pharmaceutical industry, into account. 4.4No Implied License. Except as explicitly set forth in this Agreement or unless otherwise agreed in writing between the parties hereto,neither party hereto shall acquire any license or* ***Confidential Treatment Requested other intellectual property right, by implication or otherwise, under or to any Research Results that are vested solely in the other partypursuant to Section 4.2 (or Arcturus Background Technology, in the case of Takeda).5.CONFIDENTIALITY. 5.1Confidential Information. During the Term and for a period of […***…]* years thereafter, except as otherwise provided in this Agreement,Receiving Party shall (a) not publish or disclose any Confidential Information of the other party to any Third Party other than a Third Partycontractor, collaborator or sub-license contemplated hereunder or (b) use any Confidential Information of the other party solely for thepurpose of this Agreement. 5.2Research Results. The Arcturus Research Result shall be treated as the Confidential Information of Arcturus and the Takeda ResearchResults shall be treated as the Confidential Information of Takeda. 5.3Authorized Disclosure. Notwithstanding the foregoing, the Receiving Party may disclose Confidential Information to the extent requiredto be disclosed by Applicable Laws, government agency, court order or valid discovery request in connection with a legal proceeding,provided that the Receiving Party provides the Disclosing Party as promptly as possible with prior written notice of any such disclosure(unless such notice is prohibited by such Applicable Law) so that application for an appropriate protective order can be made. TheReceiving Party shall fully cooperate (at the Disclosing Party’s expense) in connection with the Disclosing Party’s efforts to obtain anysuch order or other remedy. The Receiving Party shall disclose only that portion of the Confidential Information that it is legally requiredto disclose.6.TERM AND TERMINATION. 6.1Term. The term of this Agreement (“Term”) begins on the Effective Date and continues as long as Takeda’s payment obligation toArcturus set forth in Section 3.3 exists, unless terminated prior to that date in accordance with this Section 6. 6.2Termination for Causes by Either Party. Either party may terminate this Agreement upon providing written notice to the other party, (a) ifthe other party materially breaches any warranty, term or condition of this Agreement and fails to remedy that material breach within sixty(60) days after receipt of notice in writing of that material breach from the non-breaching party; provided, however, in case of breach by theother party of Section 9.2, the non-breaching party may terminate this Agreement by providing a written notice to the breaching party withimmediate effect; or (b) on or after the time that the other Party makes a general assignment for the benefit of creditors, files an insolvencypetition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve itsbusiness or any substantial part of its assets, commences under the Applicable Laws of any jurisdiction any proceeding involving itsinsolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release offinancially distressed debtors, or becomes a party to any proceeding or action of the type described above, and such proceeding or actionremains un-dismissed or un-stayed for a period of more than sixty (60) days. 6.3Termination for Specific Cause by Takeda. 6.3.1Discretionary Termination of Research Program. During the Research Term, Takeda may terminate this Agreement for anyreason or without any reason upon sixty (60) days’ prior written notice to Arcturus. 6.3.2Termination for Other Reasons. In case that Takeda in good faith determines that Takeda cannot continue pursuing furtherdevelopment and commercialization of Subject Product (including a case where Takeda detect any safety issue or concern onthe Subject Product), Takeda shall have the right to terminate this Agreement by providing sixty (60) days prior written noticeto Arcturus. 6.4Effect of Termination / Expiration. 6.4.1General. All of the effect of termination set forth in this Section 6.4 are in addition to other right and remedies that may beavailable to the parties under the Applicable* ***Confidential Treatment Requested Laws, and shall not construes to limit such right or remedies. Either party exercising its termination rights set forth in Section6.2 or 6.3 shall not be liable for any losses, damages, costs or expenses incurred by the other party, arising from or inconnection with such party’s exercise of the termination right. In the event this Agreement is not terminated or does not expirein its entirety, but rather is terminated or expires on a country by a country basis, the effect of termination or expiration setforth in this Section 6.4 shall only apply to the relevant country and this Agreement shall remain in full force and effect inaccordance with the terms and conditions with respect to all remaining countries. 6.4.2Termination during the Research Term. Promptly after the termination of this Agreement, but in any event within thirty (30)days thereafter, for any reason during the Research Term: 6.4.2.1The parties hereto shall cease conducting the Research Program and mutually determine and confirm thenavailable Research Results and such Research Results shall be treated in accordance with Section 4.2; and 6.4.2.2Arcturus shall submit the Final Report to Takeda and reimburse to Takeda any part of the Research Fundingwhich is paid by Takeda to Arcturus and remains unspent or uncommitted for expenditure at the time oftermination if any. 6.4.3Termination after the Research Term. Promptly after the termination of this Agreement, but in any event within thirty (30)days thereafter, for any reason after the Research Term: 6.4.3.1Any right and/or license granted under or pursuant to this Agreement is (or shall otherwise be deemed to be) forpurposes of Section 365(n) of Title 11 of the U.S. Code and other similar laws in any jurisdiction outside the U.S.(collectively, the “Bankruptcy Laws”), licenses of rights to “intellectual property” as defined under theBankruptcy Laws. If a case is commenced during the Term by or against a party under Bankruptcy Laws then,unless and until this Agreement is rejected as provided pursuant to such Bankruptcy Laws, such party (in anycapacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee) shallperform all of the obligations in this Agreement intended to be performed by such party. If a case is commencedduring the Term by or against a party under the Bankruptcy Laws, this Agreement is rejected as provided forunder the Bankruptcy Laws, and the non-bankrupt party elects to retain its rights hereunder as provided for underthe Bankruptcy Laws, then the party subject to such case under the Bankruptcy Laws (in any capacity, includingdebtor- in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the non-bankrupt party copies of all Licensed Technology and any associated information necessary for the non-bankruptparty to prosecute, maintain and enjoy its rights under the terms of this Agreement. All rights, powers andremedies of the non-bankrupt party as provided herein are in addition to and not in substitution for any and allother rights, powers and remedies now or hereafter existing at law or in equity (including the Bankruptcy Laws) inthe event of the commencement of a case by or against a party under the Bankruptcy Laws. In particular, it is theintention and understanding of the parties that the rights granted to Takeda under Section 4.3 are essential toTakeda’s businesses and the parties acknowledge that damages are not an adequate remedy. 6.4.3.2In case of termination by Takeda due to Section 6.2, the licenses granted to Takeda under Section 2.2 shallterminate as of the termination date 6.5Survival. The following Articles and Sections of this Agreement shall survive expiration or termination of this Agreement: Sections 2.5 and2.7, Articles 4 and 5, Sections 6.4 and 6.5, and Articles 7, 8, 9 and 10.7.REPRESENTATIONS, WARRANTIES AND COVENENTS. 7.1Representations and Warranties of Each Party. Each party hereby represents and warrants to the other party and agrees as follows. 7.1.1Due Organization and Due Execution. It is a corporation duly organized, validly existing and is in good standing under thelaws of the jurisdiction of its incorporation and is qualified to do transaction in each jurisdiction in each jurisdiction in whichthe conduct of its business or the ownership of its properties requires such qualification and a failure to have such wouldprevent it from performing its obligation hereunder. It is duly authorized to execute and deliver this Agreement and also has apower and capability to perform its obligations hereunder appropriately and proficiently. The person executing thisAgreement on its behalf had been duly authorized to do so by all requisite corporate action. 7.1.2Binding Agreement. This Agreement is a legal, valid and binding obligation upon the parties hereto and enforceable inaccordance of its terms and conditions. 7.1.3No Conflict Agreement. The execution, delivery and performance of this Agreement by it does not conflict with anyagreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound. 7.1.4No Violation. In the course of the Research Program, it does not conduct any activities in violation of Applicable Laws 7.1.5No Debarred Individuals. To the best of its knowledge as of the Effective Date and as far as related to the Research Program, ithas neither employed nor used a contractor or consultant that has employed, any individual or entity debarred by a regulatoryauthority in any other country or countries of the Territory, or, any individual who or entity which is the subject of adebarment investigation or proceeding (or similar proceeding) of a regulatory authority in any other country or countries ofthe Territory. 7.2Representations, Warranties and Covenants by Arcturus. Arcturus hereby represents warrants and covenants to Takeda and agrees asfollows. 7.2.1No Third Party Right. To the best of its knowledge as of the Effective Date, there are no Third Party rights that would beinfringed by the performance of the Research Program. 7.2.2No Third Party Right on the Research Results. There is no agreement, instrument, or understanding, oral or written, thatwould results in the creation of any right of Third Party or that would result in the Imposition of any restriction onExploitation of Research Results by or on behalf of Takeda permitted hereunder. 7.2.3Patent in Arcturus Background Technology. Appendix E provides a complete listing of Patents covering LUNAR™ andUNA Oligomer as of the Effective Date. Except as set forth on Appendix E, Arcturus does not own or control as of the EffectiveDate, any other Patents covering LUNAR™ and UNA Oligomer. 7.3Limitations on Representations and Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 7, NEITHER ARCTURUSNOR TAKEDA MAKES ANY WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, EQUITY OROTHERWISE.8.LIABILITY AND INDEMNIFICATION. 8.1Indemnification by Takeda. Except to the extent required to be indemnified by Arcturus pursuant to Section 8.2, Takeda shall defend,indemnify and hold harmless Arcturus and their officers, directors, shareholders, employees, agents, representatives, successors and assignsfrom and against all claims, complaints, or lawsuits for damages made by a Third Party (hereinafter collectively referred to as “Claims”)arising out of (a) any negligent act or omission, or willful wrongdoing by Takeda in the performance of this Agreement, (b) the failure byTakeda to comply with any Applicable Laws or other governmental requirement in any activities conducted by Takeda hereunder, (c) any breach of the terms of this Agreement, including any breach of representation or warranty ofTakeda as set forth in Section 7.1, and (d) the performance by Takeda of its roles and responsibilities in the Research Program, and (e)Exploitation of Subject Product by or on behalf of Takeda or its Affiliate. 8.2Indemnification by Arcturus. Except to the extent required to be indemnified by Takeda pursuant to Section 8.1, Arcturus shall defend,indemnify and hold harmless Takeda and its Affiliates and their officers, directors, shareholders, employees, agents, representatives,successors and assigns from and against all Claims arising out of (a) any negligent act or omission, or willful wrongdoing by Arcturus in theperformance of this Agreement, (b) the failure by Arcturus to comply with any Applicable Laws or other governmental requirement in anyactivities conducted by Enterome hereunder, (c) any breach of the terms of this Agreement, including any breach of representation, warrantyor covenants of Arcturus as set forth in Section 7.1 or 7.2, and (d) the performance by Arcturus of its roles and responsibilities in theResearch Program (including the use of the Arcturus Background Technology Arcturus provided by Arcturus for the Research Programhereunder). 8.3Limitations on Indemnification. The obligations to indemnify, defend, and hold harmless as set forth in Sections 8.1 and 8.2 in respect ofany Claim by a Third Party shall be contingent upon the party seeking indemnification (“Indemnitee”): (a) notifying the indemnifyingparty of a Claim within […***…]* days of receipt of the same; provided, however, that Indemnitees failure or delay in providing suchnotice shall not relieve the indemnifying party of its indemnification obligation except to the extent the indemnifying party is prejudicedthereby; (b) allowing the indemnifying party and/or its insurers the right to assume direction and control of the defense of any such Claim;(c) using its commercially reasonable efforts to cooperate with the indemnifying Party and/or its insurers in the defense of such Claim at theindemnifying party’s expense; and (d) agreeing not to settle or compromise any claim, demand or suit without prior written authorization ofthe indemnifying party. The Indemnitee shall have the right to participate in the defense of any such Claim referred to in this Article 8utilizing attorneys of its choice, at its own expense; provided, however, that the indemnifying party shall have full authority and control tohandle any such Claim. 8.4Disclaimer. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL ORINDIRECT DAMAGES OR LOST PROFIT ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESSOF ANY NOITICE OF THE POSSIBILITY OF SUCH DAMAGES.9.FORCE MAJEURE. 9.1Notice of Force Majeure. A party affected by an event of Force Majeure shall promptly provide the other party with written noticedescribing the event, its cause and foreseeable duration, and its possible consequences upon such party’s performance of its obligationsunder this Agreement. 9.2Suspension of Performance. After an affected party has given notice under Section 9.1, that party shall be relieved of any liability underthis Agreement (other than the obligations to make any payments or of confidentiality), but only to the extent and only for so long as theForce Majeure prevents performance; provided, however, that the party so affected shall use commercially reasonable efforts to resumeperformance of its obligations. The other party may likewise suspend the performance of all or part of its obligations (other than theobligations to make any payments or of confidentiality) to the extent that such suspension is commercially reasonable. In any event, ifeither party cannot fulfil any of its obligations pursuant to this Agreement due to the Force Majeure, then both parties shall discuss in goodfaith and without delay, proper measures so that the affected obligations will be fulfilled or any other proper alternative measures of similareffect will be taken, as soon as reasonably feasible. 9.3Amendment or Termination. If the period of the Force Majeure continues for more than […***…] days after the affected Party has givennotice under Section 9.1, the parties shall discuss and determine in good faith as to whether this Agreement shall be amended or terminated.10.GENERAL PROVISIONS.* ***Confidential Treatment Requested 10.1Compliance. In performing this Agreement, Arcturus and Takeda shall comply with the Applicable Laws. 10.2Anti-Bribery. In performing the Research Program, the parties hereto and their trustees, directors, officers, medical and professional staff,employees and agents (a) shall not offer to make, make, promise, authorize or accept any payment or giving anything of value, includingbut not limited to bribes, either directly or indirectly to any public official, regulatory authority or anyone else for the purpose ofinfluencing, inducing or rewarding any act, omission or decision which may secure an improper advantage including to obtain or retainbusiness and (b) shall comply with all applicable anti-corruption and anti-bribery laws and regulations. The parties and their trustees,directors, officers, medical and professional staff, employees and agents shall not make any payment or provide any gift to a third party inconnection with performance of this Agreement without first identifying the intended third-party recipient to the other party and obtainingthe other party’s prior written approval. Arcturus shall notify Takeda immediately upon becoming aware of any breach of Arcturus’sobligations under this Section 10.2. 10.3No Use of Name. No party shall, without the prior written consent of the other party, use in endorsement, advertising, publicity (including,without limitation, press releases), or otherwise, the name, trademark, logo, symbol, or other image of the party or that party’s employees oragents, provided, however, each party agrees that its name may be used whenever required by law or regulation, including, withoutlimitation, disclosure to the Securities and Exchanges Commission, and that Takeda may reference the existence and subject matter of thisAgreement in lists of its academic collaborators. 10.4Press Release. Each party agrees not to issue any press release or other public statement, whether oral or written, disclosing the existence ofthis Agreement, the terms hereof or any information relating to this Agreement without the prior written consent of the other party;provided, such consent shall not be unreasonably withheld, delayed, or conditioned. 10.5Governing Law; Dispute Resolution. This Agreement shall be governed by, construed, and interpreted in accordance with the laws of theState of New York, the U.S., without reference to principles of conflicts of laws. All disputes arising out of or in connection with thisAgreement which cannot be settled in an amicable way between the parties hereto shall be finally settled under the Rules of Arbitration ofthe International Chamber of Commerce by three (3) arbitrators, one appointed by each party and the third appointed by the first twoarbitrators. The award rendered shall be final and binding upon both parties hereto. Such arbitration shall be conducted in New York City,New York, the U.S. 10.6No Partnership or Employment Relationship. Arcturus and Takeda are independent contractors. This Agreement does not create a jointventure, partnership or employment relationship between Arcturus and Takeda. 10.7Assignment. This Agreement may not be assigned or transferred by any of the parties hereto without the prior written consent of the otherparty; provided, however, that Takeda may assign or transfer Takeda’s rights and obligations under this Agreement, in whole or in part, toan Affiliate of Takeda or to a successor to all or substantially all of its assets or business relating to this Agreement, whether by sale, merger,operation of law or otherwise upon written notice to Arcturus. 10.8Notices. With the exception of Disclosure Notices, any notice or other communication required or permitted under this Agreement shall besent to the address set forth on the Cover Sheet, shall be in writing and shall be (a) hand delivered, (b) mailed, postage prepaid, first class,certified mail, return receipt requested, (c) sent, shipping prepaid, receipt requested via a reputable courier service, or (d) dispatched byfacsimile, if promptly confirmed by one of the preceding notice mechanisms. Either party may change its address to which notices shall besent by giving notice to the other party in accordance with the terms of this Section 10.8. 10.9Modification. No modification to this Agreement shall be effective unless agreed to in writing by duly authorized representatives of theparties. 10.10Waiver. No waiver of any rights shall be effective unless assented to in writing by the party to be charged and the waiver of any breach ordefault shall not constitute a waiver of any other right hereunder or any subsequent breach or default. 10.11Entire Agreement. This Agreement constitutes the entire and only agreement between the parties relating to the subject matter hereof, andall prior negotiations, representations, agreements and understandings are superseded by this Agreement. This Agreement may be executedin counterparts, each of which shall be deemed an original, but all of which together shall constitute one agreement. The section headingsare intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of thisAgreement. The parties have participated equally in the formation of this Agreement; the language of this Agreement shall not bepresumptively construed against either party. 10.12Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal,unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no severability shall beeffective if the result of that action materially changes the economic benefit of this Agreement to Arcturus or to Takeda.- End of Document – APPENDIX B– RESEARCH PROGRAM AND BUDGET […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested * […***…]* ***Confidential Treatment Requested APPENDIX C – STAGE-X REPORT FORM (Attach additional pages if needed)Date:Takeda Contact:Name of Principal Investigator:Takeda Agreement No. : Phone Number:Fax Number:Name of Arcturus:Arcturus: Street Address:City, State, Zip Code:Summary in Stage XResearch Results Made in Stage X / Patent Applications:Publications / Patent Applications During Stage X (Title, Journal Name, Date):Details of Research Program Funds Expended in Stage X:Research Program Goals for Next Stage: Principal Investigator Signature Date Takeda Scientific Reviewer Date APPENDIX D – FUNDING 1.Research Funding. Total amount of […***…]* US Dollar (US$ […***…]) shall be paid by Takeda to Arcturus as follows:Payment ScheduleAmount DueDate Due[…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…] 2.Payment.2.1 Invoices for all payments due and payable from Takeda to Arcturus hereunder shall be provided by Arcturus to:[…***…]2.2 Payment to Arcturus hereunder shall be made by wire transfer to:[…***…]* ***Confidential Treatment Requested APPENDIX E – PATENT LIST […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 Amendment to Research AgreementThis Amendment, made as of December 21, 2017 (the “Amendment Date”) by and between Arcturus Therapeutics, Inc., a corporation organized and existingunder the laws of Delaware, USA and having its registered office at 10628 Science Center Drive Suite 200, San Diego, California 92121, USA (“Arcturus”)and Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited and a corporation organized and existingunder the laws of Delaware, USA and having its registered office at 40 Landsdowne Street, Cambridge, Massachusetts 02139, USA (“Takeda”),WITNESSETH THAT:WHEREAS, Arcturus and Takeda concluded the Research Agreement effective as of November December 6, 2016 (“Original Agreement”), pursuant towhich Arcturus and Takeda are jointly conducting the Research Program (as defined in the Original Agreement) to discover siRNA medicines for thetreatment of NASH;WHEREAS, after evaluating and discussing the Research Results available as of November 1, 2017, Arcturus and Takeda desire to conduct additionalresearch activities for achieving the purpose of the Research Program;NOW, THEREFORE, in consideration of mutual covenants and promises hereinafter set forth, Arcturus and Takeda agree to amend the Original Agreement asfollows:1.Defined Terms. All capitalized terms not defined herein shall have the meanings given to them in the Original Agreement.2.Extension of the Research Term. “Research Term” defined in the Cover Sheet of Original Agreement is hereby revised from “Eighteen (18) monthsfrom the Effective Date” to “Twelve (12) months from the Amendment Data”.3.Additional Research. Additional studies described in Appendix B attached hereto are hereby added to Appendix B attached to the OriginalAgreement and shall constitute the Research Program.4.Additional Funding. In addition to the Research Funding as set forth in Section 3.2 of the Original Agreement, in Support of the performance byArcturus of the additional studies described in Appendix B attached hereto, Takeda shall pay to Arcturus […***…]* US Dollars ([…***…]),which shall be paid to Arcturus in accordance with payment method provided in Appendix D of the Original Agreement and following schedule.Payment Schedule Amount Due (USD $)Date Due[…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…] * ***Confidential Treatment Requested 5.Miscellaneous. This Amendment shall be effective from the Amendment Date and in full force and effect until the expiration or termination ofOriginal Agreement, Except as expressly provided in this Amendment, the Original Agreement remain unmodified and in full force and effect.IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed in duplicate by their duly authorized representatives as of the datesbelow. One each official text of this Amendment shall be held by the parties hereto.Arcturus Therapeutics, Inc.By: /s/Joseph E. Payne Print Name: Joseph E. PayneTitle: President and CEODate:Millennium Pharmaceuticals, Inc.By: /s/Nenad Grmusa Print Name: Nenad GrmusaTitle: Head of Global R&D FinanceDate: APPENDIX B– RESEARCH PROGRAM AND BUDGET (only for additional studies)Research Plan[…***…]** ***Confidential Treatment Requested […***…]** ***Confidential Treatment Requested […***…]* ***Confidential Treatment Requested […***…]* ***Confidential Treatment Requested […***…]* ***Confidential Treatment Requested Timeline[…***…] * ***Confidential Treatment Requested Budget[…***…]* ***Confidential Treatment Requested Exhibit 4.10***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 ConfidentialRESEARCH COLLABORATION AND LICENSE AGREEMENTThis Research Collaboration and License Agreement (this “Agreement”) is entered into as of October 26, 2015 (the“Effective Date”) by and between Ultragenyx Pharmaceutical Inc., a Delaware corporation having an address at 60 Leveroni Court,Novato, CA 94949 (“Ultragenyx”), and Arcturus Therapeutics, Inc. a Delaware corporation having an address at 10628 ScienceCenter Drive, Suite 200, San Diego, CA 92121 (“Arcturus”). Arcturus and Ultragenyx are sometimes referred to herein individuallyas a “Party” and collectively as the “Parties”.RECITALSWhereas, Arcturus is a biotechnology company possessing expertise in RNA medicines;Whereas, Ultragenyx is a biotechnology company specializing in the research, development, manufacturing andcommercialization of products to treat rare and ultra-rare diseases; andWhereas, Ultragenyx and Arcturus desire to perform a collaboration to identify and optimize mRNA products with respectto targets relevant in rare […***…] diseases, and for Arcturus to grant Ultragenyx the exclusive rights to research, develop,manufacture and commercialize such products, pursuant to the terms and conditions of the Agreement.Now Therefore, in consideration of the premises and the mutual promises and covenants contained in this Agreement, andfor other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree asfollows:ARTICLE 1DEFINITIONSAll references to particular Exhibits, Articles or Sections shall mean the Exhibits to, and Articles and Sections of, thisAgreement, unless otherwise specified. For the purposes of this Agreement and the Exhibits hereto, the following words and phrasesshall have the following meanings:1.1“Acquired Party’s IP” shall have the meaning set forth in Section 13.4.1.2“Acquirer” shall have the meaning set forth in Section 13.4.1.3“Affiliate” means, with respect to any Person, any other Person which controls, is controlled by or is undercommon control with such Person, for as long as such control exists. For purposes of this Section, “control” shall mean the direct orindirect ownership of more than fifty percent (50%) of the voting or economic interest of a Person, or the power, whether pursuant tocontract, ownership of securities or otherwise, to direct the management and policies of a Person.***Confidential Treatment Requested 1. 1.4“Alliance Manager” shall have the meaning set forth in Section 2.1.2.1.5“Arcturus Indemnified Parties” shall have the meaning set forth in Section 10.1.1.1.6“Arcturus Know-How” means any Know-How Controlled by Arcturus and/or any of its Affiliates as of theEffective Date and/or during the Term that is actually used by Arcturus or its Affiliates in its Collaborative Development activitiesand/or is necessary or useful for the Exploitation of any Compound and/or Product. For the avoidance of doubt, Arcturus Know-Howdoes not include the Arcturus Patents. Subject to and to the extent as provided in Section 13.4, the use of “Affiliate” in this definitionshall exclude any Third Party that becomes an Affiliate due to such Third Party’s or such Third Party’s Affiliate acquisition of Arcturusin a Change of Control Transaction.1.7“Arcturus Materials” means Materials Controlled by Arcturus and used by Arcturus, or provided by Arcturus foruse in the conduct of the Collaborative Development, including Materials disclosed or claimed within the Arcturus Patents, andincluding progeny, expression products, mutants, replicates, derivatives and modifications of any of the foregoing.1.8“Arcturus Patents” means all Patent Rights Controlled by Arcturus and/or any of its Affiliates as of the EffectiveDate and/or during the Term that (a) Cover any Compound and/or Product (but not with respect to any active ingredient other than aCompound); (b) is necessary for the Exploitation of any Compound and/or Product (but not with respect to any active ingredient otherthan a Compound); and/or (c) is reasonably useful for the Exploitation of any Compound and/or Product (but not with respect to anyactive ingredient other than a Compound) other than Arcturus Platform Technology. The Arcturus Patents existing as of the EffectiveDate are listed on Exhibit A. Subject to and to the extent as provided in Section 13.4, the use of “Affiliate” in this definition shallexclude any Third Party that becomes an Affiliate due to such Third Party’s or such Third Party’s Affiliate acquisition of Arcturus in aChange of Control Transaction.1.9“Arcturus Platform Technology” means LUNAR Nanoparticle Delivery Technology and/or UNA OligomerChemistry.1.10“Arcturus Technology” means Arcturus Patents, Improvements to Arcturus Platform Technology, and ArcturusKnow-How.1.11“Audited Party” shall have the meaning set forth in Section 7.14.1.12“Auditing Party” shall have the meaning set forth in Section 7.14.1.13“Background Technology” means Patent Rights and Know-How (a) Controlled by a Party or any of itsAffiliates prior to the Effective Date or (b) Controlled by such Party or any of its Affiliates during the Term, but not generated throughexercising its rights and/or performing its obligations under this Agreement.2. 1.14“Budget” means, with respect to a Development Target, the budget for Collaborative Development activities tobe performed by Arcturus and Ultragenyx with respect to such Development Target, as defined by the JSC and approved inaccordance with Section 4.1.1.15“Challenge” shall have the meaning set forth in Section 12.4.1.16“Change of Control Transactions” means with respect to a Party: (l) a sale of all or substantially all of suchParty’s assets or business relating to this Agreement; (2) a merger, reorganization or consolidation involving a Party in which thestockholders of such Party immediately prior to such transaction cease to own collectively a majority of the voting equity securities of asuccessor entity; or (3) a person or group of persons acting in concert (other than current stockholders of such Party) acquire fiftypercent (50%) or more of the voting equity securities of such Party (other than through sales by the Party of equity in a venture fundingor other private or public financing transaction).1.17“Collaboration Know-How” means any and all Know-How generated by or on behalf of a Party or the Partiesjointly in performing their obligations under the Collaborative Development Plan.1.18“Collaboration Patents” means Patent Rights that claim an invention within Collaboration Know-How.1.19“Collaboration Technology” means the Collaboration Know-How and Collaboration Patents.1.20“Collaborative Development” shall mean, with respect to a particular Target, any Development activitiesrelating to such Target by or on behalf of a Party or the Parties jointly in performing their obligations in accordance with theCollaborative Development Plan.1.21“Collaborative Development Costs” shall have the meaning set forth in Section 7.4.1.22“Collaborative Development Plan” means, for each Development Target, the written plan executed by theParties hereunder containing the overall strategy and timelines, and any updates thereto, for the Collaborative Development ofCompounds and Products with respect to such Development Target, which includes Arcturus’ optimization of one (1) lead perDevelopment Target (or more if the Parties otherwise agree). The Collaborative Development Plan shall include a reasonably detaileddescription of the schedule of work activity, the responsibility between the Parties for the work activities and an associated Budget forsuch activities. As the circumstances may require, the JSC may propose from time to time and approve amendments to theCollaborative Development Plan in accordance with Section 2.1.3(b).1.23“Commercialize” means, with respect to a Product, all activities directed to (a) commercial manufacturing; (b)marketing, promoting, distributing, importing, offering for sale and/or selling such Product; and (c) post-First Commercial Saleregulatory affairs for such product. Cognates of the word “Commercialize” shall have correlative meanings.3. 1.24“Commercially Reasonable Efforts” means, with respect to a Party, the reasonable, diligent, good faith effortsthat a similarly situated biotechnology or pharmaceutical company would use to accomplish a similar objective under similarcircumstances exercising reasonable business judgment, including with respect to the development and commercialization of a Product,the utilization of efforts and resources commensurate with the efforts and resources commonly used by such Party (or a similarlysituated entity) in connection with the development or commercialization of biopharmaceutical products that are of similar status (withrespect to stage of development), including, with respect to commercial potential, the proprietary position of the product, the regulatorystatus and approval process, the probable profitability of the applicable product, and other relevant factors such as technical, legal,scientific or medical factors.1.25“Compound” means an mRNA or UNA Oligomer designed to express a Development Target, where suchmolecule has been discovered and/or optimized under the Collaborative Development Plan, and any and all derivatives of any suchmolecule.1.26“Confidential Information” shall have the meaning set forth in Section 11.1.1.1.27“Control” or “Controlled” means, with respect to Know-How or Patent Rights, that the applicable Party ownsor has a license to such Know-How or Patent Right and has the ability to grant to the other Party access to and a license or sublicense(as applicable) under such Know-How or Patent Right as provided for herein without violating the terms of any agreement or otherarrangement with any Third Party and either (a) without payment of consideration to any Third Party as a result of any grant of rightsto the other Party as contemplated under this Agreement or (b) pursuant to an agreement between the Parties if such payment is due.1.28“Cover” means, with respect to a Patent Right, a Valid Claim would (absent a license thereunder or ownershipthereof) be Infringed by the Exploitation of the applicable product; provided, however, that in determining whether a Valid Claim thatis a claim of a pending application would be Infringed, it shall be treated as if issued in the form then currently being prosecuted.Cognates of the word “Cover” shall have correlative meanings.1.29“Designated Executive Officers” means the Chief Executive Officer of Arcturus and the Chief ExecutiveOfficer of Ultragenyx, or their duly authorized respective designees with decision-making authority within the applicable Party withrespect to the relevant matters.1.30“Develop” means, with respect to a Compound or Target, all non-clinical and clinical activities that relate toobtaining, maintaining or expanding Regulatory Approval of a Product in accordance with this Agreement up to and including theobtaining of Regulatory Approval to Commercialize a Product, including regulatory toxicology studies, statistical analysis and reportwriting, clinical trial design and operations, preparing and filing Drug Approval Applications, and all regulatory affairs relating to theforegoing. Cognates of the word “Develop” shall have correlative meanings.1.31“Development Milestone Payments” shall have the meaning set forth in Section 7.7.1.1.32“Development Target” shall have the meaning set forth in Section 3.5.4. 1.33“Development Target Exclusivity Period” shall have the meaning set forth in Section3.3.l(a).1.34“Development Target ROFN” shall have the meaning set forth in Section 3.3.l(b).1.35“Development Target ROFN Negotiation Period” shall have the meaning set forth in Section 3.3.l(b).1.36“Development Target ROFN Notice” shall have the meaning set forth in Section 3.3.l(b).1.37“Disclosing Party” shall have the meaning set forth in Section 11.1.1.1.38“Discontinued Target” shall have the meaning set forth in Section 3.5.1.39“Dollars” means U.S. Dollars, and”$” shall be interpreted accordingly.1.40“EMA” means the European Medicines Agency or any successor entity thereto.1.41“Exclusivity Extension Fee” has the meaning set forth in Section 7.3.1.42“Expansion Option Payment” has the meaning set forth in Section 7.2.1.43“Exploit” means to Develop, Commercialize, discover, optimize, research, make, have made, use, offer for sale,sell, import, export or otherwise exploit a product. Cognates of the word “Exploit” shall have correlative meanings.1.44“FDA” means the United States Food and Drug Administration or any successor entity thereto.1.45“First Commercial Sale” means, with respect to any Product in any country, the first sale on a commercial basisto a Third Party of such Product in such country after Regulatory Approval for such Product has been granted in such country.1.46“FTE” means the equivalent of the work of one qualified employee or agent for the applicable activitiesdedicated to the Collaborative Development, full time, for one year (constituting 1,750 working hours). For clarity, no more than 1,750hours per year (or equivalent pro-rata portion thereof for a period less than 12 months) may be charged for an individual contributingwork factoring into any reimbursable FTE costs hereunder, regardless of how much additional work time is contributed by suchindividual during such period. An individual contributing work for less than 1,750 hours per year shall be deemed a fraction of an FTEon a pro-rata basis. FTE activities shall not include the work of general managers, clerical staff and/or administrative personnel.1.47“FTE Costs” means the FTE Rate times the number of FTEs expended during the applicable financial period.The FTE Costs shall be determined based on time (as calculated in5. pro-rated FTEs) actually spent performing the applicable development activities, unless another basis is expressly specified herein orotherwise agreed in advance by the Parties in writing.1.48“FTE Rate” means the monetary rate at which FTEs expended by Arcturus during the applicable financialreporting period will accrue toward Arcturus’s FTE Costs hereunder, which shall be $[…***…] per allocable FTE. Each such FTERate shall be adjusted annually, based on changes in the Consumer Price Index (as quoted by the U.S. Department of Labor, Bureauof Labor Statistics), with the first adjustment taking effect in the calendar year for 2017. Each Party acknowledges that the foregoingFTE Rate has been set to include all salary, employee benefits, routine supplies, and other expenses, including support staff andoverhead for or directly allocable to an FTE.1.49“GAAP” means United States generally accepted accounting principles applied on a consistent basis. Unlessotherwise defined or stated herein, financial calculations made hereunder shall be calculated under GAAP.1.50“Governmental Authority” means any court, agency, department, authority or other instrumentality of anynational, state, county, city or other political subdivision.1.51“Improvements to Arcturus Platform Technology” means any and all improvements to the Arcturus PlatformTechnology that are: (a) generally applicable to components of LUNAR Nanoparticle Delivery Technology (including new species oflipids used in such formulations and other improvements of such formulations, in each case as made and/or in-licensed by Arcturus, itsAffiliates or subcontractors after the Effective Date) and/or UNA Oligomer Chemistry that are proprietary to Arcturus (including anyextensions and/or additions to such chemistry that are generally applicable to RNA species incorporating UNA Oligomer Chemistrybut not specific to Compounds and/or Products) (and in each case, together with all intellectual property rights therein), and (b)conceived, discovered, invented, developed, created, made or reduced to practice or tangible medium solely or jointly by or on behalfof the Parties, but excluding Product-Specific Technology.1.52“IND” means an investigational new drug application filed with the applicable Regulatory Authority forauthorization to commence clinical studies.1.53“Infringe” or “Infringement” means any infringement as determined by Law, including direct infringement,contributory infringement or any inducement to infringe.1.54“Initiation” means, with respect to a clinical trial, the first dosing in the first human subject in such clinical trial.1.55“Issuing Party” shall have the meaning set forth in Section 11.3.1.56“Joint Collaboration Know-How” means Collaboration Know-How that is conceived, discovered, invented,created, made or reduced to practice or tangible medium jointly by or on behalf of both Parties, but excluding any Product-SpecificKnow-How and/or Improvements to Arcturus Platform Technology.***Confidential Treatment Requested6. 1.57“Joint Collaboration Patents” means any Collaboration Patents claiming Joint Collaboration Know-How.1.58“Joint Collaboration Technology” means Joint Collaboration Patents and Joint Collaboration Know-How.1.59“Joint Steering Committee” or “JSC” shall have the meaning set forth in Section 2.1.1.1.60“Know-How” means techniques, technology, trade secrets, inventions (whether patentable or not), methods,processes, formulae, know-how, data and results (including pharmacological, toxicological and clinical data and results), analytical andquality control data and results, regulatory documents, and other information. Know-How does not include Patent Rights in theforegoing.1.61“Law” means, individually and collectively, any and all laws, ordinances, rules, directives, administrativecirculars and regulations of any kind whatsoever of any Governmental Authority within the applicable jurisdiction.1.62“Licensed Field” means the diagnosis, prevention or treatment of human diseases.1.63“Losses” shall have the meaning set forth in Section 10.1.1.1.64“LUNAR Nanoparticle Delivery Technology” means Arcturus’ proprietary lipidbased formulation that containsan Arcturus’ proprietary lipid molecule.1.65“Materials” means any tangible chemical or biological material, including any compounds, DNA, RNA, clones,vectors, cells, and any expression product, progeny, derivative or other improvement thereto, along with any tangible chemical orbiological material embodying any Know-How.1.66“Modified mRNA” means an mRNA having one or more chemically-modified structures, or monomers, or non-natural nucleotide structures, or monomers, or a structurallyaltered mRNA, but excluding any UNA Oligomer.1.67“mRNA” means an active pharmaceutical ingredient that is a single stranded RNA molecule that conveysgenetic information, specifying the amino acid sequence for a protein of therapeutic interest , including Modified mRNA.1.68“Net Sales” means, with respect to any Product, the gross amounts invoiced for sales of such Product byUltragenyx, its Affiliates or Sublicensee(s) (the “Selling Party”) to Third Parties (excluding any Sublicensees) (in an arms’ lengthtransaction), less the following customary deductions to the extent actually taken, paid, accrued, allowed, included, or allocated basedon good faith estimate and in compliance with Laws, in the gross sales prices with respect to such sales (and consistently applied as setforth below):(a)non-recoverable sales taxes, excise taxes, use taxes, VAT and duties paid by the SellingParty in relation to Product(s) and any other equivalent governmental7. charges imposed upon the importation, use or sale of Product(s) (including the annual fees due under Section 9008 of the United StatesPatient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-48) (excluding taxes when assessed on income derived fromsales);(b)credits and allowances (actually allowed or paid) for defective or returned Product(s),including allowances for spoiled, damaged, outdated, rejected, returned, withdrawn or recalled Product(s);(c)governmental and other rebates and refunds (or equivalents thereof) granted to managedhealth care organizations, pharmacy benefit managers (or equivalents thereof), federal, state, provincial, local and other governments,their agencies and purchasers and reimbursers or to trade customers, in each case with respect to such Product;(d)reasonable price adjustments, allowances, credit, chargeback payments and rebates granted toand actually used by group purchasing organizations, Third Party payors, other contractees and managed care entities, in each casewith respect to such Product;(e)actual bad debt expense actually written off (but not exceeding […***…]% of Net Sales);(f)chargebacks and retroactive price reductions actually granted to the Third Party applicable tosales of such product; and(g)trade, cash, prompt payment and/or quantity discounts, actually allowed and taken directly bythe Third Party, and mandated discounts.All such deductions shall be allowable only to the extent they are commercially reasonable and shall be determined, on acountry-by-country basis, as incurred in the ordinary course of business in type and amount consistent with the Selling Party’s businesspractices consistently applied across its product lines and accounting standards and verifiable based on its sales reporting system. Allsuch discounts, allowances, credits, rebates, and other deductions shall be fairly and equitably allocated to Product and other productsof the Selling Party such that Product does not bear a disproportionate portion of such deductions. Net Sales will be determined frombooks and records maintained in accordance with GAAP, consistently applied throughout the organization and across all products ofthe entity whose sales of Products are giving rise to Net Sales.Where a Product is sold in combination with other pharmaceutical or biologics products, diagnostic products, or activeingredients (collectively, “Combination Product”) the Net Sales applicable to such transaction shall be calculated by multiplying thetotal Net Sales of such combined product by the fraction A/(A+B), where A is the sale price of the Product portion of suchCombination Product when sold separately and B is the sale price of the other active ingredient(s) in such Combination Product whensold separately; provided, however, that if the Product portion of such Combination Product or any of the other active ingredients insuch Combination Product is not then sold separately, then Net Sales for purposes of determining royalty payments shall be agreedupon by the Parties based on the relative value contributed by each component, such agreement not to be unreasonably withheld,conditioned or delayed.***Confidential Treatment Requested8. Sales of Product(s) between or among Ultragenyx and its Affiliates or Sublicensees for further resale shall be excluded fromthe computation of Net Sales and no payments shall be payable on such sales except where such Affiliates or Sublicensees are endusers. For the avoidance of doubt, sales of a Product for use in conducting clinical trials of such Product in a country in order to obtainthe Regulatory Approval of such Product in such country shall be excluded from Net Sales calculations for all purposes. Also,notwithstanding anything to the contrary above, sales or transfers of a Product at or below cost for any charitable purposes,compassionate use, named patient sales or free samples shall be excluded from Net Sales calculations.1.69“Non-Publishing Party” shall have the meaning set forth in Section 11.4.1.70“Opt-In Data Package” shall have the meaning set forth in Section 4.1.1.71“Optimized Lead Designation” means the formal designation of a Compound by the JSC as an optimized lead(as such term is defined in the applicable Development Target’s Collaborative Development Plan) in accordance with the applicableCollaborative Development Plan.1.72“Out-of-Pocket Costs” means amounts paid by Arcturus or its Affiliates: (a) for the procurement of any reagentsand/or materials as permitted in the Collaborative Development Plan and in accordance with the Budget contained therein; and/or (b) toany Third Party subcontractors, for services or materials provided by such subcontractors to directly support the CollaborativeDevelopment activities under a Collaborative Development Plan, as expressly provided in the Collaborative Development Plan. Forclarity, Out-of-Pocket Costs do not include payments for Arcturus’ or its Affiliates’ internal: salaries or benefits; facilities; utilities;general office, laboratory, or facility supplies; insurance; or information technology, capital expenditures or the like and Out-of-PocketCosts expressly exclude charges accounted for under the FTE Rate.1.73“Owned Patents” shall have the meaning set forth in Section 8.2.11.74“Owning Party” shall have the meaning set forth in Section 8.2.11.75“Patent Rights” means any provisional and non-provisional patents and patent applications, together with alladditions, divisions, continuations, continuations-in-part, substitutions, and reissues claiming priority thereto, as well as any re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates, renewals and the like with respectto any of the foregoing and all foreign counterparts thereof.1.76“Preclinical Candidate Designation” or “PCC Designation” means with respect to a Product candidate, thedesignation of the candidate by the JSC as a preclinical candidate (as such term is defined in the applicable Development Target’sCollaborative Development Plan).1.77“Person” means any corporation, limited or general partnership, limited liability company, joint venture, trust,unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.9. 1.78“Phase 1 Clinical Trial” means any human clinical trial of a Product conducted mainly to evaluate its safety thatwould satisfy the requirements of 21 C.F.R. § 312.21(a) or its non-United States equivalents.1.79“Pivotal Trial” means a pivotal clinical trial of a product in human patients in order to establish the safety andefficacy of the Product for a particular indication, which study is prospectively designed to demonstrate with statistical significance thatthe Product is sufficiently safe and effective for use in the indication to support the filing of an application for approval to market suchProduct for such indication in any jurisdiction without the need to conduct additional clinical trials, as more fully described in USfederal regulation 21 C.F.R. § 312.21(b) or 21 C.F.R. § 312.21(c) and equivalents in other jurisdictions.1.80“Plan Completion Date” shall have the meaning set forth in Section 5.2.2.1.81“Press Release” shall have the meaning set forth in Section 11.3.1.82“Product” means any product that contains a Compound as an active ingredient, in all forms, presentations,formulations, methods of administration and dosage forms.1.83“Product Infringement” shall have the meaning set forth in Section 8.5.1(a).1.84“Product-Specific Know-How” shall have the meaning set forth in Section 8.1.2(b).1.85“Product-Specific Patents” shall have the meaning set forth in Section 8.1.2(b).1.86“Product-Specific Technology” shall have the meaning set forth in Section 8.1.2(b).1.87“Publishing Party” shall have the meaning set forth in Section 11.4.1.88“Receiving Party” shall have the meaning set forth in Section 11.1.1.1.89“Regulatory Approval” means, with respect to any country, any and all approvals, licenses, registrations orauthorizations by a Governmental Authority in a country necessary for the marketing and full commercial sale of a product in suchcountry, including any necessary pricing and reimbursement approval.1.90“Regulatory Authority” means any Governmental Authority or other authority responsible for granting INDsand/or Regulatory Approvals for products, including the FDA, EMA and any corresponding national or regional regulatory authorities.1.91“Regulatory Filing” means any filing with any Regulatory Authority in a country with respect to the research,development, manufacture, distribution , pricing, reimbursement, marketing or sale of a product in such country, including any INDsand New Drug Applications.1.92“Replacement Target” shall have the meaning set forth in Section 3.1.2.10. 1.93“Reserved Target” shall have the meaning set forth in Section 3.2.1, subject to Sections 3.1.3 and 3.2.2.1.94“Reserved Target Exclusivity Period” shall have the meaning set forth in Section 3.3.3.1.95“Reserved Target ROFN” shall have the meaning set forth in Section 3.4.1.96“Reserved Target ROFN Negotiation Period” shall have the meaning set forth in Section 3.4.1.97“Reserved Target ROFN Notice” shall have the meaning set forth in Section 3.4.1.98“Results” means Arcturus’ final results of the Collaborative Development Plan.1.99“Reviewing Party” shall have the meaning set forth in Section 11.3.1.100“RNA Product” means a product designed to have its therapeutic effect through a nucleic acid, which shallinclude any product containing an mRNA, UNA Oligomer, and any other RNA species (e.g. siRNA), and/or any product designed toknockout or otherwise modulate the expression level, properties, half-life, distribution or activity of any nucleic acid.1.101“Royalty Term” shall have the meaning set forth in Section 7.8.3.1.102“Statutory Exclusivity” shall have the meaning set forth in Section 7.8.3.1.103“Sublicensee(s)” shall mean any Person other than an Affiliate of Ultragenyx to which Ultragenyx has granteda Sublicense under this Agreement.1.104“Target” means any single protein (i.e., a protein designated by a unique NCBI reference sequence butincluding all of its naturally-occurring mutations and variants) that could be used as a potential treatment for a rare or ultra rare diseaseand that is expressed in the liver.1.105“Term” shall have the meaning set forth in Section 12.1.1.106“Terminated Products” shall have the meaning set forth in Section 12.5.7.1.107“Territory” means the entire world.1.108“Third Party” means a Person other than (a) Ultragenyx or any of its Affiliates and (b) Arcturus or any of itsAffiliates.1.109“Third Party Challenge” shall have the meaning set forth in Section 8.4.2.1.110“Ultragenyx Expansion Notice” shall have the meaning set forth in Section 3.1.3.1.111“Ultragenyx Expansion Option” shall have the meaning set forth in Section 3.1.3.11. 1.112“Ultragenyx Indemnified Parties” shall have the meaning set forth in Section 11.1.2.1.113“UNA Oligomer” means a molecule that incorporates UNA Oligomer Chemistry, and can express aDevelopment Target or Reserved Target, as applicable, as part of its composition.1.114“UNA Oligomer Chemistry” means Arcturus’ proprietary unlocked nucleomonomer agents, monomers andoligomers and UNA structures, but excluding any sequence of a Compound.1.115“Valid Claim” means a claim of any issued and unexpired patent or patent application within the ArcturusPatents or Product-Specific Patents, as applicable, that has not been held invalid or unenforceable by a final decision of a court orgovernmental agency of competent jurisdiction, which decision can no longer be appealed or was not appealed within the timeallowed; provided, however, that if a claim of a pending patent application within the Arcturus Patents or Product-Specific Patents shallnot have issued within […***…] years after the earliest filing date from which such claim takes priority, such claim shall not constitutea Valid Claim for the purposes of this Agreement unless and until a Patent Right issues with such claim (from and after which time thesame would be deemed a Valid Claim).1.116“VAT’shall have the meaning set forth in Section 7.15.2.ARTICLE 2RESEARCH COLLABORATION 2.1Management.2.1.1Overview. Within […***…] days after the Effective Date, the Parties shall establish a joint steeringcommittee (the “Joint Steering Committee” or the “JSC”) which shall manage the collaboration between the Parties.2.1.2Alliance Managers. Each of Ultragenyx and Arcturus shall appoint one representative whopossesses a general understanding of development, regulatory, manufacturing and commercialization matters to act as its respectivealliance manager(s) for this relationship (an “Alliance Manager”). Each Party may replace its respective Alliance Manager at anytime upon written notice to the other in accordance with this Agreement. Each Alliance Manager shall be charged with creating andmaintaining a collaborative work environment between the Parties. Each Alliance Manager will also be responsible for:(a)providing a primary single point of communication responsible for the flow ofcommunication and for seeking consensus both within the respective Party’s organization and together with the other Party regardingkey strategy and plan issues;(b)ensuring awareness of the governance procedures and rules set forth herein and monitoringcompliance therewith;***Confidential Treatment Requested12. (c)identifying and raising disputes to the JSC for discussion in a timely manner; and(d)planning and coordinating internal and external communications in accordance with theterms of this Agreement.The Alliance Managers shall have the right to attend all subcommittee meetings, as a non-voting member. Consistent withSection 2.1.3(c), each Alliance Manager may bring any matter to the attention of the JSC where such Alliance Manager reasonablybelieves that such matter requires attention of the JSC.Within […***…] days after the Effective Date, each Party shall appoint and notify the other Party of the identity of theirrepresentative to act as its Alliance Manager under this Agreement.2.1.3Joint Steering Committee.(a)Composition. The Joint Steering Committee shall be comprised of […***…] namedrepresentatives for each Party (or such other number as the Parties may agree) in addition to each Party’s Alliance Manager (who arenot members of the JSC). The JSC will be led by […***…] co-chairs, one (1) appointed by each of the Parties. Each Party mayreplace one or more of its representatives, in its sole discretion, effective upon written notice to the other Party of such change.(b)Function and Powers of the JSC. The JSC shall, in accordance with the terms andconditions set forth in the Agreement:(i)prepare and approve each Collaborative Development Plan and associated Budgetfor each Development Target;(ii)prepare and approve amendments to the Collaborative Development Plan andassociated Budget for each Development Target, and review progress against the goals in such plans;(iii)oversee the implementation of the Collaborative Development Plan(s);(iv)establish, direct and oversee any subcommittees, as appropriate;(v)resolve disputed matters that may arise at the subcommittees;(vi)review and discuss potential Targets for consideration as potential replacementsfor Reserved Targets;(vii)review, discuss and decide if a Compound has achieved Optimized LeadDesignation;***Confidential Treatment Requested13. (viii)review and discuss and decide if a Product candidate has achieved PCCDesignation;(ix)keep minutes of JSC meetings that record all decisions and all actionsrecommended or taken in reasonable detail.(x)perform any and all tasks and responsibilities that are expressly attributed to theJSC under this Agreement.(c)Frequency of Meetings. The Joint Steering Committee shall meet at least once per quarter ormore or less often as otherwise agreed by the Parties, and such meetings may be conducted by telephone, videoconference or in personas determined by the cochairs; provided that no less than […***…] meetings during each calendar year shall be conducted in person.Each Party may also call for special meetings of the Joint Steering Committee with reasonable prior written notice (it being agreed thatat least […***…] business days shall constitute reasonable notice) to resolve particular matters requested by such Party and within thedecisionmaking responsibility of the Joint Steering Committee. Each co-chair shall ensure that its Joint Steering Committee membersreceive adequate notice of such meetings. Each Party shall be responsible for all of its own expenses incurred in connection withparticipating in all such meetings. Drafts of the minutes shall be prepared and circulated to the members of the JSC by the ArcturusAlliance Manager within […***…] days after the meeting. Each member of the JSC may circulate comments on the draft minutes.(d)Subcommittees. The JSC may establish and disband subcommittees as deemed necessary bythe JSC. Except as expressly provided in this Agreement, no subcommittee shall have the authority to bind the Parties hereunder andeach subcommittee shall report to the JSC. If a dispute arises which cannot be resolved by a subcommittee, such dispute shall bereferred to the Joint Steering Committee for resolution under Section 2.1.5. Each Party shall be responsible for all of its own expensesincurred in connection with participating in all such meetings.2.1.4Cooperation. Each Party shall provide the JSC such information as required under each of theCollaborative Development Plans, or as reasonably requested by the other Party and reasonably available, relating to the progress ofthe goals or performance of activities under each of the Collaborative Development Plans.2.1.5Decisions. Other than as set forth herein, in order to make any decision required of it hereunder, theJoint Steering Committee must have present (in person, by videoconference or telephonically) at least the co-chair of each Party (orhis/her designee for such meeting). Decisions of the JSC shall be by consensus, with each Party having one (1) vote. If the JSCcannot reach consensus or a dispute arises which cannot be resolved within the JSC within […***…]days, the co-chair of eitherParty may cause such dispute to be referred to the Designated Executive Officers for resolution within […***…] days. In the eventthat consensus cannot be reached with respect to a decision after a meeting of the Designated Executive Officers, then: (a) for adecision with respect to the technical application of LUNAR Nanoparticle Delivery Technology or UNA Oligomer Chemistry, thedecision will be made by the Designated Executive Officer appointed by Arcturus; and (b) for all other***Confidential Treatment Requested14. decisions, including decisions with respect to Product profile and formulation, decision as to whether to utilize the LUNARNanoparticle Delivery Technology (or any other deliver technology) in connection with the Product, and decisions with respect toadvancement of Compounds in research and development, the decision will be made by the Designated Executive Officerappointed by Ultragenyx, provided that neither Party’s Designated Executive Officer shall exercise its final decision makingauthority to increase in a material manner the other Party’s contractual obligations or Collaborative Development Plan commitments,including that: (A) Arcturus’s Designated Executive Officer shall not exercise such final decision making authority in a manner thatwould increase any Budget under any Collaborative Development Plan; and (B) Ultragenyx’s Designated Executive Officer shallnot exercise such final decision making authority to approve a Collaborative Development Plan or to amend a CollaborativeDevelopment Plan in a manner that would (1) require an increase in a Budget under such Collaborative Development Plan thatUltragenyx is not required to reimburse Arcturus for, or (2) requires Arcturus to hire additional FTEs that Ultragenyx has not agreedto reimburse Arcturus for.2.1.6Authority. The JSC and any subcommittee shall have only the powers assigned expressly to it in thisArticle 2 and elsewhere in this Agreement, and shall not have any power to amend, modify or waive compliance with thisAgreement. In furtherance thereof, each Party shall retain the rights, powers and discretion granted to it under this Agreement andno such rights, powers or discretion shall be delegated or vested in the JSC or subcommittee unless such delegation or vesting ofrights is expressly provided for in this Agreement or the Parties expressly so agree in writing.2.1.7Discontinuation of JSC. The JSC shall continue to exist until the Parties mutually agree to disbandthe JSC; provided, that once all Collaborative Development under the Collaborative Development Plans has been completed, theJSC shall meet only […***…] per year for discussion purposes and shall have no decision-making authority. Once allCollaborative Development under a Collaborative Development Plan has been completed for a Development Target, andUltragenyx has exercised the option in Section 5.2 for such Development Target, Ultragenyx shall have control over theDevelopment and Commercialization of Compounds and Products with respect to such Development Target, subject to the termsand conditions of this Agreement.ARTICLE 3TARGET SELECTION; EXCLUSIVITY 3.1Development Targets.3.1.1Development Target Selection. As of the Effective Date, Ultragenyx has elected to initiateCollaborative Development with respect to the two (2) Targets set forth on Exhibit B (each, a “Development Target”).3.1.2Replacement of Development Targets. During the Reserved Target Exclusivity Period for anyparticular Reserved Target(s) (as further set forth in Section 3.2), Ultragenyx shall have the right (so long as there are nooutstanding, overdue payments due to***Confidential Treatment Requested15. Arcturus under this Agreement), at […***…] to Ultragenyx …***…], to replace any of the Development Target(s) with aReserved Target (each, a “Replacement Target”) by written notification to Arcturus. Effective upon any such notification, (a) thelist of Development Targets set forth in Exhibit B shall automatically be amended by substituting the Replacement Target for theDevelopment Target (and such substitution shall be noted in Exhibit B), and (b) the list of Reserved Targets set forth on Exhibit Cshall automatically be amended by substituting the Discontinued Target for the Reserved Target (and such substitution shall benoted in Exhibit C). The Parties shall promptly generate a Collaborative Development Plan for such Replacement Target inaccordance with Section 4.1.3.1.3Ultragenyx Expansion Option. During the Reserved Target Exclusivity Period (so long as there areno outstanding, overdue payments due to Arcturus under this Agreement), on a Reserved Target-by-Reserved Target basis,Ultragenyx shall have the option to convert […***…] to an additional Development Target by providing Arcturus with writtennotification (such option, the “Ultragenyx Expansion Option” and such notification, the “Ultragenyx Expansion Notice” ) andconcurrently making the Expansion Option Payment under Section 7.2, whereupon (a) the list of Development Targets set forth onExhibit B shall automatically be amended by adding such Target; (b) the list of Reserved Targets set forth on Exhibit C shall beamended by deleting such Target. The Parties shall promptly generate a Collaborative Development Plan for such newDevelopment Target in accordance with Section 4.1. For avoidance of doubt, the conversion of a Reserved Target to an additionalDevelopment Target shall not permit Ultragenyx to add an additional Reserved Target in place of such converted Reserved Target. 3.2Reserved Targets.3.2.1Reserved Target Selection. As of the Effective Date, the Parties have agreed to a list of eight (8)Targets for which Ultragenyx will have the exclusive right to evaluate whether it desires to initiate Collaborative Development, suchlist set forth on Exhibit C (each, a “Reserved Target”). The Reserved Targets were chosen based on potential relevance to thetreatment of Rare […***…] Diseases. Ultragenyx shall only have the right to initiate Collaborative Development under thisAgreement with respect to a particular Reserved Target by converting such Reserved Target into a Replacement Target pursuant toSection 3.1.2 or by exercising its option to designate such Reserved Target as an Expansion Target pursuant to Section 3.1.3;provided, that Ultragenyx shall have the right to conduct preliminary non-clinical research with respect to Reserved Targets andrelated compounds to evaluate whether it wishes to convert such Reserved target into a Development Target and, at Ultragenyx’srequest and expense, Arcturus shall cooperate with Ultragenyx to conduct activities with respect to such Reserved Targets tofacilitate such evaluation.3.2.2New Targets.(a)During the Reserved Target Exclusivity Period, Ultragenyx shall have the right to replaceeach Reserved Target with a proposed new Target by providing Arcturus with written notice thereof; provided that as of the timeUltragenyx provides such notification, (i) Arcturus has not already granted an option or a license to any Third Party to***Confidential Treatment Requested16. develop and/or commercialize products with respect to such Target, or otherwise has entered into an agreement with a Third Party thatprevents Arcturus from accepting such Target as a Reserved Target, (ii) Arcturus has not commenced a bona fide internal research anddevelopment program directed to such Target, and (iii) such Target was not previously subject to Third Party rights or obligations toThird Parties under an agreement between Arcturus and a Third Party and returned to Arcturus, where the Target program has beenadvanced to demonstrate proof of concept activity in an animal model. Ultragenyx shall have the right to make no more than a total ofeight (8) such replacements pursuant to this Section 3.2.2.(b)Promptly upon the receipt of such notification and subject to the foregoing, the list ofReserved Targets set forth in Exhibit C shall automatically be amended accordingly. For the avoidance of doubt, the maximumnumber of Reserved Targets is eight (8). 3.3Development Target Exclusivity.3.3.1Arcturus Development Target Exclusivity.(a)mRNA and UNA Oligomer Exclusivity. With respect to a particular Development Target,during the corresponding Development Target Exclusivity Period, Arcturus shall not conduct or participate in, or advise, assist orintentionally enable any Third Party to conduct or participate in the preclinical or clinical development, manufacture orcommercialization of any product containing mRNA (including Modified mRNA) or UNA Oligomer with respect to suchDevelopment Target. The “Development Target Exclusivity Period” means the period beginning on the date that a Target becomes aDevelopment Target and ending on the earlier of (i) the date that such Development Target becomes a Discontinued Target or (ii)termination of the Agreement with respect to such Development Target.(b)Right of First Negotiation with Respect to RNA Products. On a Development Target-by-Development Target basis, during the corresponding Development Target Exclusivity Period, Arcturus hereby grants Ultragenyx anexclusive right of first negotiation to obtain an exclusive license to Exploit RNA Products other than a product described under Section3.3.l(a) with respect to each Development Target within the Territory (each, a “Development Target ROFN”) as further describedherein. Arcturus shall provide written notice to Ultragenyx promptly upon Arcturus’ decision to seek a partner for the research,development and/or commercialization of any such RNA Product with respect to a Development Target (“Development TargetROFN Notice”). Ultragenyx shall have […***…]days from its receipt of the Development Target ROFN Notice to notify Arcturus ifUltragenyx desires to exercise its Development Target ROFN with respect to such Development Target and upon such notice fromUltragenyx, Arcturus and Ultragenyx will negotiate such rights in good faith for a period of […***…] days (the “Development TargetROFN Negotiation Period”). If, at the end of the Development Target ROFN Negotiation Period, Arcturus and Ultragenyx areunable to reach agreement on such terms, or if Ultragenyx does not notify Arcturus of its interest in such Development Target duringsuch […***…] day period, Arcturus shall be free to grant a license or enter into any other arrangement with a Third Party to Exploitsuch RNA Products with respect to such Development Target; provided, for clarity, that this Section 3.3.1(b) shall not relieve Arcturusof its restrictions under Section 3.3.1(a) or (c).17. (c)LUNAR Exclusivity. Within the first […***…] years after the Effective Date, Arcturusshall not conduct or participate in, or advise, assist or intentionally enable any Third Party to conduct or participate in the preclinical orclinical development, manufacture or commercialization of any product utilizing LUNAR Nanoparticle Delivery Technology withrespect to a Development Target.3.3.2Ultragenyx Development Target Exclusivity. With respect to a particular Development Target,during the corresponding Development Target Exclusivity Period, Ultragenyx shall not conduct or participate in, or advise, assist orintentionally enable any Third Party to conduct or participate in the preclinical or clinical development, manufacture orcommercialization of any product containing any mRNA or UNA Oligomer with respect to such Development Target.3.3.3Reserved Target Exclusivity. With respect to each Reserved Target, during the Reserved TargetExclusivity Period, Arcturus shall not conduct or participate in, or advise, assist or intentionally enable any Third Party to conductor participate in the preclinical or clinical development, manufacture or commercialization of (a) any product containing mRNA,including Modified mRNA, or UNA Oligomer with respect to such Reserved Target, or (b) without offering Ultragenyx the right offirst negotiation comparable to that described in Section 3.3.1(b), any other RNA Product or a product utilizing the LUNARDelivery Technology with respect to such Reserved Target. The foregoing restriction shall expire on the […***…] anniversary ofthe Effective Date (such period for each Reserved Target, the “Reserved Target Exclusivity Period”), provided, that the ReservedTarget Exclusivity Period may be extended, upon written notice to Arcturus, on a Reserved Target-by-Reserved Target basis for upto […***…] additional […***…] year period(s) by paying the Exclusivity Extension Fee pursuant to Section 7.3. For clarity,Section 3.3.1 and not this Section 3.3.3 shall apply to any Reserved Target that becomes a Development Target pursuant to Section3.1.2 or Section 3.1.3.3.4Reserved Target Right of First Negotiation. On a Reserved Target-by-Reserved Target basis, after theReserved Target Exclusivity Period for such Reserved Target, Arcturus hereby grants Ultragenyx an exclusive right of first negotiationto obtain an exclusive license to Exploit RNA Products with respect to each Reserved Target within the Territory (each, a “ReservedTarget ROFN”) as further described herein. For avoidance of doubt, the Reserved Target ROFN shall not apply to any Target thathad been a Reserved Target and was replaced under Section 3.2.2 (New Targets). Arcturus shall provide written notice to Ultragenyxpromptly upon its decision to seek a partner for the research, development and/or commercialization of any RNA Product with respectto a Reserved Target (“Reserved Target ROFN Notice”). Ultragenyx shall have a period of […***…] days from its receipt of theReserved Target ROFN Notice to inform Arcturus if it desires to exercise its Reserved Target ROFN with respect to such ReservedTarget and upon such notice from Ultragenyx, Arcturus and Ultragenyx will negotiate such rights in good faith for a period of […***…] days (the “Reserved Target ROFN Negotiation Period”). If, at the end of the Reserved Target ROFN Negotiation Period,Arcturus and Ultragenyx are unable to reach agreement on such terms, or if Ultragenyx does not notify Arcturus of its interest in suchReserved Target during such […***…] day period, Arcturus shall be free to grant a license or enter into any other arrangement with aThird Party to***Confidential Treatment Requested18. Exploit RNA Products with respect to such Reserved Target; provided, for clarity, that this Section 3.4 shall not relieve Arcturus of itsrestrictions under Section 3.3.3.3.5Discontinued Targets. This Section 3.5 shall apply to (i) all Development Targets that are discontinued underSection 3.1.2 prior to Ultragenyx’s exercise of its option under Section 5.2.2 with respect to such Development Target and (ii) allDevelopment Targets for which Ultragenyx does not exercise the option set forth in Section 5.2.1 prior to the expiration of the optionperiod (each of such Development Targets under clause (i) or (ii) referred to herein as a “Discontinued Target”). For clarity, for anyDevelopment Target for which Ultragenyx has exercised its option under Section 5.2.2, the discontinuation of the Parties’collaboration with respect to such Development Target under this Agreement shall be governed by Article 12 and not by this Section3.5.3.5.1For each Discontinued Target: (i) all licenses granted to Ultragenyx under this Agreement withrespect to such Discontinued Target will terminate, (ii) Ultragenyx shall grant and hereby grants to Arcturus an exclusive, royalty-bearing (in accordance with Section 3.5.2) worldwide, perpetual (provided that Arcturus fulfills its payment obligations underSection 3.5.2, subject to breach/cure procedures comparable to that described in Section 12.2) license, with right of sublicense,under (a) all Product-Specific Technology, (b) Collaboration Technology (including Joint Collaboration Technology) and (c) otherPatent Rights and Know-How that as of the date of discontinuation of the Discontinued Target had been practiced or used byUltragenyx under this Agreement, in each case to the extent Controlled by Ultragenyx and/or its Affiliates, to Exploit Compoundsand Products with respect to such Discontinued Target (“Discontinued Products”), provided that such license shall not include theright for Arcturus to Exploit any type of RNA Product other than an mRNA, including Modified mRNA, or UNA Oligomer typeof RNA Product unless otherwise expressly agreed in writing by the Parties; (iii) Ultragenyx shall, within […***…] days of theapplicable Development Target becoming a Discontinued Target and at Arcturus’s expense, transfer to Arcturus available data andinformation relating to such Discontinued Products Controlled by Ultragenyx and in Ultragenyx’s possession at such time, (iv) ifmutually agreed by the Parties, Ultragenyx shall transfer to Arcturus the responsibility for the prosecution and maintenance of allProduct-Specific Patents that specifically pertain to Compounds and/or Products with respect to the Discontinued Target andArcturus shall perform such prosecution and maintenance activities in accordance with Section 8.2.2 and (v) Arcturus shall have thefirst right to enforce such Product-Specific Patents in a Product Infringement with respect to Compounds and/or Products withrespect to the Discontinued Target in the manner similar to Ultragenyx’s enforcement rights described in Section 8.3.5.2Arcturus shall pay Ultragenyx royalties on Net Sales of Discontinued Products, on a country-by-country basis, until the expiration of the last Valid Claim of the Product-Specific Patents or Patent Rights licensed by Ultragenyx toArcturus under Section 3.5.1 covering such Discontinued Product in such country at the following rates depending on the stage ofdevelopment for the corresponding Discontinued Target at the time of such discontinuation: (i) […***…] percent ([…***…]%) ifthe applicable Development Target becomes a Discontinued Target prior to the first Optimized Lead Designation for anyDiscontinued Product for such Discontinued Target; (ii) […***…] percent ([…***…]%) if the applicable Development Targetbecomes a Discontinued Target after the first Optimized Lead Designation for any***Confidential Treatment Requested19. Discontinued Product for such Discontinued Target and prior to the first PCC Designation of such Discontinued Target; and (iii) […***…] percent ([…***…]%) if the applicable Development Target becomes a Discontinued Target after the first PCC Designation ofany Discontinued Product for such Discontinued Target. For the purposes of this Section 3.5.2, the definition of “Net Sales” and “FirstCommercial Sale” shall apply mutatis mutandis to sales of any Discontinued Product sold by Arcturus, its Affiliates or sublicenseesand the definition of “Valid Claim” shall apply mutatis mutandis to claims of the Product-Specific Patents and Collaboration Patents(including Joint Collaboration Patents) and Patent Rights licensed by Ultragenyx to Arcturus under Section 3.5.1.3.6Right of First Negotiation with Respect to Ultragenyx Pipeline Targets. The Parties acknowledge thatUltragenyx is pursuing development of pharmaceutical products with respect to those targets set forth on Exhibit F. Within the first[…***…] years after the Effective Date, in the event Arcturus desires to pursue research and development work with respect to suchtargets, Arcturus shall first notify Ultragenyx in writing and the Parties shall discuss in good faith as to any potential collaboration withrespect to such targets for a period not to exceed […***…] days unless the Parties otherwise agree.3.7Acknowledgment. Ultragenyx acknowledges and agrees that (a) the designation of Targets is at Ultragenyx’ssole discretion (provided, for avoidance of doubt, that such Targets must meet the criteria set forth in the definition of “Targets”), and(b) Arcturus makes no representations or warranties as to whether any Target is appropriate for therapeutic intervention or whether asuccessful drug can be developed on the basis of Arcturus Technology.3.8Exclusivity with Respect to Acquirers. Sections 3.3, 3.4 and 3.5 shall have no effect with respect to pre-existing or subsequently acquired or initiated programs of an Acquirer of a Party, provided that such programs are carried outindependent of the activities of the Parties under this Agreement and without the reference, use or access to any CollaborationTechnology or the other Party’s Confidential Information.ARTICLE 4COLLABORATIVE DEVELOPMENT4.1Collaborative Development Plan. The JSC shall establish a Collaborative Development Plan with respect toeach Development Target (including the allocation of activities between the Parties), as well as the corresponding Budget and timelineof activities. The Collaborative Development Plans and Budgets for the Development Targets as of the Effective Date are attachedhereto as Exhibit D. The Budget for each Development Target shall include at least […***…] Dollars ($[…***…]) for CollaborativeDevelopment Costs to be incurred by Arcturus and reimbursed by Ultragenyx for the first […***…] years of the applicableCollaborative Development Plan combined. The Parties intend that the Collaborative Development Plan shall address activities prior tothe first PCC Designation of the first Product candidate with respect to such Target. Each Collaborative Development Plan shall setforth the Opt-In Data Package. “Opt-In Data Package” means the data and materials to be provided by Arcturus to Ultragenyx for thepurpose of enabling Ultragenyx to make an informed decision***Confidential Treatment Requested20. regarding its option, which data and materials shall be described in each Collaborative Development Plan, as may be updated fromtime to time by the JSC.4.2Collaborative Development of Products. Upon approval by the JSC of the applicable CollaborativeDevelopment Plan and associated Budget, each Party shall commence and conduct Collaborative Development activities assigned to itunder, and in accordance with, such Collaborative Development Plan in good scientific manner and in accordance with all applicableLaws. It is the Parties’ intent for Arcturus to be primarily responsible for identification and optimization of Compounds with respect toeach Development Target for potential Product candidates in accordance with the Collaborative Development Plan, and for Ultragenyxto be primarily responsible for carrying out the in vitro and in vivo efficacy and proof-of-concept studies, including in animal diseasemodels, with respect to each such Product candidate. For clarity, Ultragenyx shall have the right to generate modified products orderivatives incorporating the Compound identified by Arcturus under the Collaborative Development Plan, provided that (i)Ultragenyx shall promptly identify in writing all such modified products and derivatives to Arcturus and (ii) such modified productsand derivatives shall be deemed as Products under this Agreement. Ultragenyx shall be solely responsible, at its discretion, for thedevelopment, manufacture and, if successful, commercialization of any and all Products after their respective PCC Designation.4.3Budget Updates. In the event that Arcturus determines that the Budget is not likely to be sufficient to fundadequate resources to timely complete the objectives of the Collaborative Development Plan due to unforeseen events or results, theParties shall, through the JSC, meet and discuss in good faith an update to the Budget.4.4Subcontracting. Either Party may engage its Affiliates, or Third Party subcontractors (including contract researchorganizations and contract manufacturing organizations) to perform certain of its obligations under this Agreement; provided thatArcturus shall obtain the prior written consent of Ultragenyx for any such subcontractor of Arcturus to perform CollaborativeDevelopment under this Agreement, which consent shall not be unreasonably withheld, delayed or conditioned; provided further thatUltragenyx shall obtain the prior written consent of Arcturus for any such subcontractor of Ultragenyx to perform CollaborativeDevelopment under this Agreement that involves the application or modification of Arcturus Platform Technology. Any Third Partysubcontractor to be engaged by a Party to perform its obligations set forth in this Agreement will meet the qualifications typicallyrequired by such Party for the performance of work similar in scope and complexity to the subcontracted activity. The activities of anyof each Party’s Third Party subcontractors will be considered activities of such Party under this Agreement. Each Party will beresponsible for ensuring compliance by any of its Third Party subcontractors with the terms of this Agreement, as if such ThirdParty(ies) are such Party hereunder.4.5Records.4.5.1Research Records. Each Party shall maintain, and cause its employees, subcontractors andconsultants to maintain, records and laboratory notebooks of all data generated by or on behalf of such Party under eachCollaborative Development Plan in sufficient detail and in a good scientific manner appropriate for (i) regulatory purposes, and21. (ii) obtaining and maintaining intellectual property rights and protections, including Patent Rights. Such records and laboratorynotebooks shall be complete and accurate in all material respects and shall fully and properly reflect all work done, data anddevelopments made, and results achieved. Laboratory notebooks shall be signed, dated and witnessed on a regular basis.4.5.2JSC Reports. Each Party shall keep the JSC informed of the progress of its activities under eachCollaborative Development Plan, including a detailed written quarterly report of its progress under each Collaborative DevelopmentPlan.4.5.3Data Sharing. Arcturus shall, at Ultragenyx’s written request, promptly make available toUltragenyx all topline data generated by Arcturus and its Affiliates or on their behalf under each Collaborative Development Plan,and any other data and materials described in such Collaborative Development Plan for delivery by Arcturus to Ultragenyx or asotherwise reasonably requested by Ultragenyx, including all Know-How in the Opt-In Data Package, and allow Ultragenyx toinspect and, to the extent necessary or useful for regulatory or intellectual property protection purposes, copy such records.4.6Materials Transfer. If a Party provides Materials to the other Party for use by the other Party in performance ofthis Agreement, all such Materials shall be used by the receiving Party in accordance with the terms and conditions of this Agreementsolely for purposes of performing this Agreement, and the receiving Party shall not transfer such Materials to any Third Party unlessexpressly contemplated by this Agreement (including the Collaborative Development Plan). The transferring Party may require that thetransfer of the Materials be subject to a reasonable material transfer agreement consistent with the objectives of such transfer. All suchMaterials shall be retained and used solely to perform this Agreement, be returned to the providing Party (or destroyed as may berequested in writing) promptly following the end of the Term or earlier upon request by the providing Party.4.7Research Efforts. Each Party shall use Commercially Reasonable Efforts to perform the CollaborativeDevelopment, including its responsibilities under the Collaborative Development Plan.ARTICLE 5OPTION AND LICENSE GRANTS5.1Development License to Ultragenyx. Arcturus hereby grants to Ultragenyx a co-exclusive, royalty-free,sublicenseable (but only in accordance with Section 5.3) license under Arcturus Technology and under Collaboration Technology(including Arcturus’ interest in the Joint Collaboration Technology) to conduct Collaborative Development of Development Targets,Compounds and Products in the Licensed Field in the Territory and to evaluate whether to exercise its option under Section 5.2. Thislicense shall be in effect only during the Reserved Target Exclusivity Term with respect to Development Targets and ReservedTargets, and shall be in effect until the expiration of the option under Section 5.2.2 with respect to Compounds and Products that aredirectly related to Development Targets and Reserved Targets.5.2Development and Commercialization Option.22. 5.2.1Grant of Development and Commercialization Option. On a Development Target-by-Development Target basis, Arcturus hereby grants to Ultragenyx and its Affiliates the exclusive option, exercisable at Ultragenyx’ssole discretion in accordance with Section 5.2.2, to obtain an exclusive license with respect to such Development Target asdescribed in Section 5.2.3.5.2.2Option Exercise. Ultragenyx shall have the right, but not the obligation, to exercise the option setforth in Section 5.2.1 on a Development Target-byDevelopment Target basis, during the period of time commencing upon theEffective Date and ending upon the earlier of (i) […***…] days following the first PCC Designation for the first Product candidatewith respect to such Development Target or (ii) […***…] year after the Plan Completion Date for the applicable CollaborativeDevelopment Plan for such Development Target and Arcturus delivers to Ultragenyx the Opt-In Data Package, by notifyingArcturus and concurrently making the applicable PCC option exercise payment for such Development Target under Section 7.6,whereupon the license pursuant to Section 5.2.3 shall become effective with respect to such Development Target. “PlanCompletion Date” means the date that the activities set forth in the Collaborative Development Plan (as amended, if applicable) arecompleted; provided, however, that the Plan Completion Date shall not extend beyond the date that is […***…] years from theinitially scheduled completion date of the Collaborative Development Plan, unless Ultragenyx is funding bona fide Developmentactivities under such Collaborative Development Plan (i.e., expending no less than […***…] Dollars ($[…***…]) under suchCollaborative Development Plan (calculated to include internal and out-of-pocket expenses incurred by or on behalf of Ultragenyxand/or by or on behalf of Arcturus and reimbursed by Ultragenyx) for each […***…]-month period after such […***…] yearextension); provided further that the initially scheduled completion date may be extended to the extent the CollaborativeDevelopment Plan is delayed due to any failure by Arcturus in conducting its activities under the Collaborative Development Planwhere such failure has a material adverse impact on the Collaborative Development Plan.5.2.3Development and Commercialization License. Subject to the terms and conditions of thisAgreement, effective automatically upon and only in the event of Ultragenyx’s exercise of its option pursuant to Section 5.2.2, withrespect to each Development Target, Arcturus hereby grants to Ultragenyx and its Affiliates an exclusive (even as to Arcturus andits Affiliates), royalty bearing, sublicenseable (but only in accordance with Section 5.3), license under Arcturus Technology andunder Collaboration Technology (including Arcturus’ interest in the Joint Collaboration Technology) to Exploit the Compoundsand Products (including their components) with respect to such Development Target in the Licensed Field in the Territory. Foravoidance of doubt, the foregoing does not include the right for Ultragenyx to practice Arcturus Platform Technology to Exploitcompounds that are not Compounds.5.3Sublicenses. Ultragenyx and its Affiliates shall be entitled, without the prior consent of Arcturus, to grant one ormore sublicenses under the licenses granted to Ultragenyx under Section 5.2.3 in full or in part to Develop and/or Commercialize theProduct, by means of written agreement to one or more Third Parties (with the right to sublicense through multiple tiers), provided,however, that as a condition precedent to and requirement of any such sublicense: (a) any such permitted sublicense shall (i) beconsistent with and subject to the terms***Confidential Treatment Requested23. and conditions of this Agreement, (ii) require such Sublicense to comply with all applicable terms of this Agreement, including keepingbooks and records and permitting audit of such books and records as required in Section 7.14; and (b) Ultragenyx will continue to beresponsible for full performance of Ultragenyx’s obligations under the Agreement and will be responsible for all actions of suchSublicensee as if such Sublicensee were Ultragenyx hereunder. Ultragenyx and its Affiliates shall be entitled to grant one or moresublicenses under the license granted to Ultragenyx under Section 5.1 without the prior written consent of Arcturus, and such licenseshall be subject to the same terms as set forth above for sublicenses under the license granted under Section 5.2.3. Ultragenyx shall,within […***…] days of execution, provide Arcturus with a fully executed copy of each sublicense agreement, and all amendmentsthereto and all related side agreements, each of which may be redacted of confidential information not reasonably required for Arcturusto verify that such agreement complies with this Section 5.3. All such agreements and amendments shall be deemed Ultragenyx’sConfidential Information.5.4Delivery of Arcturus Know-How. From time to time during the Term, Arcturus shall deliver to Ultragenyxcopies or summaries of the Arcturus Know-How generated by Arcturus pursuant to the Collaborative Development that may containpatentable subject matter or is necessary or useful for the Exploitation of any Compound and/or Product.5.5No Other Rights. Each Party acknowledges that the rights and licenses granted to it under this Article 5 andelsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under thisAgreement, no right, title, or interest of any nature whatsoever is granted whether by implication, estoppel, reliance, or otherwise, bythe other Party to such Party. All rights that are not specifically granted herein are reserved to the possessing Party.ARTICLE 6DEVELOPMENT, REGULATORY AND COMMERCIAL MATTERS6.1Development. Following the Effective Date and at all times during the Term (except as expressly statedotherwise herein), Ultragenyx shall be responsible for, and shall bear all costs associated with, all preclinical, non-clinical and clinicaldevelopment and manufacture of Products (including Out-of-Pocket Costs of Arcturus incurred in connection with the activitiesassigned to Arcturus under the Collaborative Development Plan to the extent in accordance with the applicable Budget).6.2Regulatory.6.2.1Ultragenyx Right. Ultragenyx will be solely responsible for the preparation, submission andmaintenance of all Regulatory Filings and Regulatory Approvals. Ultragenyx will own all right, title and interest in and to any and allRegulatory Filings and Regulatory Approvals for Products and all such Regulatory Filings and Regulatory Approvals will be held inthe name of Ultragenyx. All decisions concerning the Regulatory Approval of Products including the clinical and regulatory strategy ofProducts covered under this Agreement shall be within the sole discretion of Ultragenyx. Ultragenyx shall have the sole responsibilityfor communicating with any Regulatory Authority regarding any application for***Confidential Treatment Requested24. a Regulatory Approval or any Regulatory Approval once granted, and for filing all reports required to be filed in order to maintain anyRegulatory Approvals granted for Products in the Territory.6.2.2Cooperation. At Ultragenyx’s request and expense, Arcturus will cooperate reasonably withUltragenyx and provide reasonable assistance to Ultragenyx in preparing, submitting and maintaining any Regulatory Filings and/orRegulatory Approvals for Products, including drafting specified sections as requested by Ultragenyx. Ultragenyx and its designeesshall have a right of reference to Arcturus’s and/or its Affiliate’s drug master file(s) to extent that such reference is reasonably requiredin order for Ultragenyx to obtain and maintain Regulatory Approvals in any country, if any, and any other Regulatory Filingsmaintained by or on behalf of Arcturus anywhere in the world related to any Products. Arcturus will not interface with any RegulatoryAuthority with respect to any Product at any stage of development without Ultragenyx’s prior written consent.6.3Commercialization. Ultragenyx shall be responsible for, and shall bear all costs associated with, thecommercialization of Products, including the distribution, marketing and sales activities with respect to Products.6.4Diligence. Ultragenyx shall (directly and/or through one or more Affiliates and/or Sublicensees) useCommercially Reasonable Efforts to Develop, obtain Regulatory Approvals for Commercialization of, and, Commercialize at least one(1) Product with respect to each Development Target for which Ultragenyx has exercised its option under Section 5.2. For theavoidance of doubt such Commercially Reasonable Efforts shall include efforts specifically directed to Regulatory Approvals withineach of the United States, EU and Japan.6.5Reports. On an Development Target-by- Development Target basis, until the First Commercial Sale of a Productrelating to such Development Target, Ultragenyx shall submit to Arcturus annual written reports providing a status of Ultragenyx’s andits Affiliates’ and Sublicensees’ activities related to the Exploitation of such Products during the preceding […***…] months. UponArcturus’ written request but not to exceed once annually, Ultragenyx shall provide written summaries of its and its Affiliates’ andSublicensees’ major marketing, promotional and sales activities and results. In performing its marketing and promotion activities inrespect of Products, Ultragenyx and its Affiliates and Sublicensees shall comply with all Law concerning such promotional activities.All such reports provided under this Section 6.5 shall be deemed Ultragenyx’s Confidential Information.ARTICLE 7FINANCIAL TERMS7.1Upfront Payment. As partial consideration for the rights granted to Ultragenyx by Arcturus under thisAgreement, Ultragenyx will pay to Arcturus a one-time payment of Ten Million Dollars (US$10,000,000.00) within fifteen (15) daysafter the Effective Date.7.2Expansion Option Payment. For […***…] Reserved Target for which Ultragenyx exercises the UltragenyxExpansion Option under Section 3.1.3, Ultragenyx will pay to Arcturus***Confidential Treatment Requested25. a one-time payment equal to […***…] Dollars (US$[…***…]), less all Exclusivity Extension Fee(s) paid for such Reserved Targetpaid under Section 7.3 (each, an “Expansion Option Payment”). For clarity, exercise of Ultragenyx’s right to replace a DevelopmentTarget with a Reserved Target pursuant to Section 3.1.2 shall be […***…] to Ultragenyx and […***…] pursuant to this Section 7.2.7.3Exclusivity Extension Fee. On a Reserved Target-by-Reserved Target basis, Ultragenyx shall have the right, inits sole discretion, to extend the Reserved Target Exclusivity Period for any particular Reserved Target by up to […***…] additional[…***…]year period(s) by paying to Arcturus a non-refundable payment of […***…] Dollars (US$[…***…]) for each such […***…] year period (each, an “Exclusivity Extension Fee”). All Exclusivity Extension Fees paid for a particular Reserved Target shallbe fully creditable against any Expansion Option Payment due for such Reserved Target pursuant to Section 7.2.7.4Collaborative Development Costs. Ultragenyx shall reimburse Arcturus for all FTE Costs and Out-of-PocketCosts incurred by Arcturus in carrying out the activities assigned to it under each Collaborative Development Plan (“CollaborativeDevelopment Costs”) in accordance with the applicable Budget. Arcturus shall invoice Ultragenyx on a […***…] basis in advancefor all Collaborative Development Costs forecasted by Arcturus to be incurred by Arcturus during the upcoming calendar quarter.Arcturus shall invoice Ultragenyx on a quarterly basis within […***…] days after the end of each calendar quarter for allCollaborative Development Costs actually incurred by Arcturus during such calendar quarter, minus the advance payment made byUltragenyx for such calendar quarter. For Collaborative Development Costs paid by Ultragenyx but not incurred by Arcturus duringany given calendar quarter, such payments will be credited against subsequent invoices and if no further Collaborative Development isbeing conducted under this Agreement by Arcturus, Arcturus shall promptly refund any such payment to Ultragenyx. Invoices shallinclude reasonable documentation for such Collaborative Development Costs, to the extent consistent with the amount set forth in theBudget for such activity. Ultragenyx shall pay good faith undisputed portions of each Arcturus invoice, and each other undisputedamount payable by Ultragenyx hereunder, within […***…] days of its receipt thereof. If Ultragenyx wishes to withhold a disputedamount under any invoice, it must notify Arcturus of such dispute within the original time for payment, and shall concurrently provideArcturus with a written explanation of such dispute. Arcturus may then inform the Alliance Managers of such dispute in which casethey shall work diligently and in good faith to resolve the dispute as quickly as possible. If the Alliance Managers cannot resolve thedispute, they shall refer it to the JSC. If Ultragenyx fails to make any undisputed payments when due, or if Ultragenyx withholds anamount equal to […***…] percent ([…***…]%) or more of the amount budgeted for the period subject to the disputed invoiced, thenArcturus may, upon […***…] days’ notice to Ultragenyx and without limiting Arcturus’ other rights or remedies, suspendperformance of the Collaborative Development Plan.7.5Optimized Lead Milestone. On a Development Target-by-Development Target basis, within […***…] daysafter the first Optimized Lead Designation for the first Product with respect to such Development Target, Ultragenyx shall payArcturus a one-time milestone payment of […***…] ($[…***…]).***Confidential Treatment Requested26. 7.6Option Exercise Fee. For each Development Target for which Ultragenyx exercises its option under Section 5.2,within […***…] days after such option exercise, Ultragenyx shall pay Arcturus a one-time, non-refundable, non-creditable optionexercise fee, in the amount of: (a) […***…] USD ($[…***…]) for each of the first […***…] Development Targets for whichUltragenyx exercises such option, if any; (b) […***…] USD ($[…***…]) for the […***…] Development Target for whichUltragenyx exercises such option, if any; (c) […***…] USD ($[…***…]) for the […***…] Development Target for whichUltragenyx exercises such option, if any; (d) […***…] USD ($[…***…]) for the […***…] through […***…] Development Targetfor which Ultragenyx exercises such option, if any. On a Development Target-by-Development Target basis, in the event that theExploitation of Products with respect to such Development Target does not utilize the LUNAR Nanoparticle Delivery TechnologyCovered by either an Arcturus Patent and/or a Product-Specific Patent or another RNA delivery technology Covered by an ArcturusPatent, then the option exercise fee with respect to such Development Target shall be reduced by […***…] percent ([…***…]%).7.7Development, Regulatory and Commercial Milestone Payments After Option Exercise.7.7.1Development and Regulatory Milestones. On a Development Targetby-Development Target basis,Ultragenyx shall notify Arcturus in writing within […***…] days of the first achievement of each of the corresponding milestoneevents set forth below by a Product with respect to such Development Target. Following receipt of such notice, Arcturus shall invoiceUltragenyx for, and Ultragenyx shall pay to Arcturus the following one-time milestone payments (each, a “Development MilestonePayment”) within […***…] days of its receipt of such invoice:Milestone EventMilestone Payment[…***…]$[…***…][…***…]$[…***…][…***…]$[…***…][…***…]$[…***…][…***…]$[…***…] ***Confidential Treatment Requested27. For clarity, each Development Milestone Payment is payable only once per Development Target and the maximum amountpayable under this Section 7.7.1 is Forty-Nine Million Dollars ($49,000,000) per Development Target.7.7.2Commercial Milestone Payments. On a Development Target-byDevelopment Target basis,Ultragenyx shall notify Arcturus in writing within […***…] days following the end of the calendar year during which thecorresponding commercial milestone events set forth below with respect to Products with respect to such Development Target isachieved. Following receipt of such notice, Arcturus shall invoice Ultragenyx for, and Ultragenyx shall pay the following one-time(per Development Target), non-refundable, noncreditable milestone payments within […***…] days of its receipt of such invoice:Milestone EventMilestone Payment[…***…]$[…***…][…***…]$[…***…][…***…]$[…***…]7.7.3No Use of Arcturus Delivery Technology. On a Product-by-Product basis, in the event that theExploitation of a Product in any given country within the Territory does not utilize the LUNAR Nanoparticle Delivery TechnologyCovered by either an Arcturus Patent and/or a Product-Specific Patent or another RNA delivery technology Covered by an ArcturusPatent, then the corresponding milestone payment(s) set forth in Section 7.7.1 and payable in such country with respect to such Productshall be reduced by […***…] percent ([…***…]%).7.8Royalties.7.8.1Royalty Rate. Ultragenyx shall pay to Arcturus with respect to all Products, royalties on Net Sales ofsuch Products during the Royalty Term for each such Product, on a Product-by-Product and country-by-country basis. Such Net Salesfor Products shall be aggregated for all Products with respect to the same Development Target in order to determine the royalty rateapplicable to the corresponding incremental portion of such aggregate annual Net Sales, as set forth in the table below.Aggregate Annual Net SalesRoyalty Rate[…***…][…***…]% ***Confidential Treatment Requested28. [*…***…][…***…]%[…***…][…***…]% 7.8.2Royalty Report and Payments. On a Product-by- Product and countryby-country basis, after the FirstCommercial Sale of the first Product and until expiration of the last applicable Royalty Term, Ultragenyx shall prepare and deliver toArcturus royalty reports of the sale of Products by each Selling Party for each calendar quarter within […***…] days of the end ofeach such calendar quarter specifying in the aggregate and on a Product-by-Product and country-by-country basis, the followinginformation with respect to such calendar quarter: (a) total gross amounts for Products sold or otherwise disposed of by such SellingParty; (b) amounts deducted in accordance with the definition of Net Sales from gross amounts to calculate Net Sales; (c) Net Sales;and (d) royalties payable. Royalties accrued during any given calendar quarter will be payable concurrently with submission of theroyalty report for such calendar quarter.7.8.3Royalty Term. Ultragenyx’s obligation to pay royalties with respect to a particular Product in aparticular country shall commence upon the First Commercial Sale of such Product in such country and shall expire on a country-by-country basis on the later of (a) the date on which the Exploitation of such Product is no longer Covered by a Valid Claim, (b) theexpiration of exclusivity provided by a supplementary protection certificate, orphan drug exclusivity, pediatric drug exclusivity or anyform of statutory data exclusivity to Ultragenyx, its Affiliate or Sublicensee that provides marketing exclusivity for the Product in suchcountry (“Statutory Exclusivity”), or (c) the […***…] anniversary of the First Commercial Sale of such Product in such country (the“Royalty Term”).7.8.4Royalty Reductions.(a)Reduction Post Patent Expiration. On a country-by-country and Product-by-Product basis,in the event that a Selling Party’s sale of a Product is not Covered by a Valid Claim in such country but there is still StatutoryExclusivity, then the royalty rates set forth in Section 7.8.1 with respect to Net Sales for such Product in such country shall be reducedby […***…] percent ([…***…]%) of what would otherwise have been due in the absence of such reduction.(b)Know-How Royalty. On a country-by-country and Product-by-Product basis, in the eventthat a Selling Party’s sale of a Product is not Covered by a Valid Claim and there is no Statutory Exclusivity for such Product in suchcountry, then the royalty 29. rates set forth in Section 7.8.1 with respect to Net Sales for such Product in such country shall be reduced by […***…] percent ([…***…]%) of what would otherwise have been due in the absence of such reduction and in the absence of the reduction set forth inSection 7.8.4(a) above.(c)No Use of Arcturus Delivery Technology. On a Product-by-Product basis, in the event thata Selling Party’s sale of Product does not utilize the LUNAR Nanoparticle Delivery Technology Covered by any Arcturus Patent orProduct-Specific Patent or another RNA delivery technology Covered by an Arcturus Patent, then the royalty rates set forth in Section7.8.1 with respect to Net Sales for such Product in such country shall be reduced by […***…] percent ([…***…]%) of what wouldotherwise have been due in the absence of such reduction.(d)Third-Party Intellectual Property. Except for intellectual property that Covers RNAdelivery technology utilized by Ultragenyx in the Exploitation of a Product in lieu of the LUNAR Nanoparticle Delivery Technology,in the event that Ultragenyx obtains a license from a Third Party under intellectual property that, in Ultragenyx’s reasonable judgment,is necessary for the Exploitation of a Product, then Ultragenyx shall have the right, upon prior notice to Arcturus, on a Product-by-Product and country-by-country basis, to credit from any royalties due in respect of Net Sales of such Product […***…] percent ([…***…]%) of the royalties that Ultragenyx actually pays to such Third Party for the Exploitation of such Product in such country duringa calendar quarter against royalties otherwise payable by Ultragenyx to Arcturus under Section 7.8 for such Product in such country insuch calendar quarter, provided, however, that under no circumstances shall any royalty payment to Arcturus be reduced as a result ofthis Section 7.8.4(c) to less than […***…] percent ([…***…]%) of what would otherwise have been due in the absence of suchreduction.(e)Minimum Royalty Rate. The maximum aggregate royalty reductions with respect to anygiven Product as a result of this Section 7.8.4 shall not exceed […***…] percent ([…***…]%) of the corresponding royalty rateidentified in Section 7.8.1.7.9Mutual Convenience of the Parties. The royalty and other payment obligations set forth hereunder have beenagreed to by the Parties for the purpose of reflecting and advancing their mutual convenience, including the ease of calculating andpaying royalties and other amounts required hereunder.7.10No Other Compensation. Neither Party will be obligated to pay any additional fees, milestone payments,royalties or other payments of any kind to the other hereunder. All payments made by Ultragenyx hereunder are nonrefundable and,unless expressly set forth otherwise, non-creditable.7.11Method of Payment. Unless otherwise agreed by the Parties, all payments due from Ultragenyx to Arcturusunder this Agreement shall be paid in U.S. Dollars in immediately available funds by wire transfer or electronic funds transfer ofimmediately available funds to the following accounts: […***…][…***…] ***Confidential Treatment Requested30. […***…][…***…] Arcturus may change the account listed above with […***…] days written notice to Ultragenyx.7.12Currency Conversion. In the case of sales outside the United States, payments received by a Selling Party willbe expressed in the U.S. Dollar equivalent calculated on a quarterly basis in the currency of the country of sale and converted to theirU.S. Dollar equivalent using the average rate of exchange over the applicable calendar quarter to which the sales relate, in accordancewith GAAP and the then current standard methods of the applicable Selling Party, to the extent reasonable and consistently applied;provided, however, that if, at such time, the Selling Party does not use a rate for converting into U.S. Dollar equivalents that ismaintained in accordance with GAAP, then it shall use a rate of exchange which corresponds to the rate of exchange for such currencyreported in The Wall Street Journal, Internet U.S. Edition at www.wsj.com, as of the last day of the applicable reporting period (or, ifunavailable on such date, the first date thereafter on which such rate is available). The relevant royalty report will identify the specificexchange rate translation methodology used for a particular country or countries.7.13Late Payments. In the event that any undisputed payment due hereunder (and any disputed payment where it isdetermined that that disputed portion was payable by Ultragenyx to Arcturus) is not made when due (subject to the payment disputeresolution procedure described in Section 7.4), the payment shall accrue interest beginning on the day following the due date thereof,calculated at an annual rate equal to […***…] percent ([…***…]%) per […***…]; provided, however, that in no event shall saidannual interest rate exceed the maximum rate permitted by Law. Each such payment when made shall be accompanied by all interestso accrued.7.14Records and Audits. The Selling Party will keep complete and accurate records of the underlying revenue datarelating to the calculations of Net Sales generated in the then current calendar year and during the preceding […***…] calendar years.Arcturus will keep complete and accurate records of the underlying expense data relating to any Collaborative Development Costspayable by Ultragenyx hereunder during the then current calendar year and during the preceding […***…] calendar years. Arcturus(or Ultragenyx with respect to any Collaborative Development Costs payable or incurred by Ultragenyx hereunder in accordance withthe Budget) (the “Auditing Party”) will have the right, […***…] at its own expense, to have a nationally recognized, independent,certified public accounting firm, selected by it and subject to the non-Auditing Party’s prior written consent (which shall not beunreasonably withheld), review any such records of the other Party (and for Ultragenyx, including its Affiliates and Sublicensees) (the“Audited Party”) in the location(s) where such records are maintained by the Audited Party upon reasonable written notice (whichshall be no less than […***…] days’ ***Confidential Treatment Requested31. prior written notice) and during regular business hours and under obligations of strict confidence, for the sole purpose of verifying thebasis and accuracy of the royalty payments made under Section 7.8 (or any Collaborative Development Costs paid or incurred) withinthe […***…] month period preceding the date of the request for review. No calendar year will be subject to audit under this Section7.14 more than […***…]. The Audited Party will receive a copy of each such report concurrently with receipt by the Auditing Party.Should such inspection lead to the discovery of a discrepancy to the Auditing Party’s detriment, the Audited Party will, within […***…] days after receipt of such report from the accounting firm, pay any undisputed amount of the discrepancy together with interestat the rate set forth in Section 7.13. The Auditing Party will pay the full cost of the review unless the underpayment of amounts due tothe Auditing Party is greater than […***…] percent ([…***…]%) of the amount due for the entire period being examined, in whichcase the Audited Party will pay the cost charged by such accounting firm for such review. Should the audit lead to the discovery of adiscrepancy to the Audited Party’s detriment, the Audited Party may credit the amount of the discrepancy, without interest, againstfuture payments payable to the Auditing Party under this Agreement, and if there are no such payments payable, then the AuditingParty shall pay to the Audited Party the amount of the discrepancy, without interest, within […***…] days of the Auditing Party’sreceipt of the report. 7.15Taxes.7.15.1Withholding. In the event that any Law requires Ultragenyx to withhold taxes with respect to anypayment to be made by Ultragenyx to Arcturus pursuant to this Agreement, Ultragenyx will notify Arcturus of such withholdingrequirement prior to making the payment to Arcturus and provide such assistance to Arcturus, including the provision of such standarddocumentation as may be required by a tax authority, as may be reasonably necessary in Arcturus’s efforts to claim an exemption fromor reduction of such taxes. Ultragenyx will, in accordance with such Law, withhold taxes from the amount due, remit such taxes to theappropriate tax authority, and furnish Arcturus with proof of payment of such taxes within […***…] days following the payment. Iftaxes are paid to a tax authority, Ultragenyx shall provide reasonable assistance to Arcturus to obtain a refund of taxes withheld, orobtain a credit with respect to taxes paid.7.15.2VAT. All payments due to Arcturus from Ultragenyx pursuant to this Agreement shall be paidexclusive of any value-added tax (“VAT”) (which, if applicable, shall be payable by Ultragenyx upon receipt of a valid VAT invoice).If Arcturus determines that it is required to report any such tax, Ultragenyx shall promptly provide Arcturus with applicable receiptsand other documentation necessary or appropriate for such report. For clarity, this Section 7.15.2 is not intended to limit Ultragenyx’sright to deduct value-added taxes in determining Net Sales.ARTICLE 8INTELLECTUAL PROPERTY AND PATENT RIGHTS 8.1Intellectual Property Ownership.***Confidential Treatment Requested 32. 8.1.1Background Technology. Each Party will own all right, title and interest in its BackgroundTechnology.8.1.2Collaboration Technology.(a)Inventions. Except as provided in Section 8.l.2(b) and Section 8.l.2(c), (i) each Party shallown all Collaboration Know-How conceived, discovered, invented, created, made or reduced to practice or tangible medium solely byemployees of such Party and all correlative Collaboration Patents, and (ii) the Parties shall jointly own all Joint CollaborationTechnology and Joint Collaboration Patents. Subject to the licenses granted under this Agreement, each Party shall have the right topractice and exploit Joint Collaboration Technology and Joint Collaboration Patents without the duty of accounting to or any duty toseek consent from the other Party, and upon the reasonable request of either Party, the other Party shall execute documents thatevidence or confirm the requesting Party’s right to engage in such activities. This Agreement will be understood to be a joint researchagreement under 35 U.S.C. 100(h) and 102(c), entered into for the performance of experimental, developmental, or research work inthe field of the invention, for the purpose of researching, identifying and developing Compounds and Products under the terms set forthherein.(b)Product-Specific Technology. Notwithstanding Section 8.l.2(a), Ultragenyx shall own allright, title and interest in and to all Collaboration Technology generated solely or jointly by the Parties that specifically relates to (i) thecomposition or formulation of a particular Compound or Product, or (ii) any method of using, making or administering a particularCompound or Product (the “Product-Specific Technology”). Know-How included in the Product-Specific Technology shall bedeemed “Product-Specific Know-How” and Patents included in the Product-Specific Technology shall be deemed “Product-SpecificPatents”. Arcturus hereby assigns to Ultragenyx all of its rights and interest in and to all Product-Specific Technology. For clarity, theownership of Product-Specific Patents by Ultragenyx pursuant to this Section 8.l.2(b) does not alter Ultragenyx’s royalty obligationswith respect to any ProductSpecific Patents as set forth in this Agreement. Ultragenyx may not license, assign, transfer or otherwiseencumber any Product-Specific Patent in a manner where such action would have a material adverse effect on Arcturus’ interests withrespect to such Product-Specific Patent, or would conflict with Ultragenyx’s obligations or Arcturus’ rights under this Agreement,including with respect to any future rights of Arcturus in connection with Discontinued Targets or Terminated Targets. Subject to theterms and conditions of this Agreement, Ultragenyx grants Arcturus a nonexclusive, non-sublicensable (except to subcontractors aspermitted herein) royalty-free license under the Product-Specific Patents solely to perform the Collaborative Development Plan.(c)Improvements to Arcturus Platform Technology. Notwithstanding Section 8.1.2(a) andSection 8.1.2(b), Arcturus shall own all Improvements to Arcturus Platform Technology. Ultragenyx hereby assigns and shall assign toArcturus any and all right, title and interest in and to any Improvement to the Arcturus Platform Technology, including any PatentRights on such Improvements to Arcturus Platform Technology. Ultragenyx shall execute, and cause its Affiliates and its and theiremployees, agents and Subcontractors to execute (directly or through assignment to Ultragenyx and assignment by Ultragenyx toArcturus), assignments to Arcturus of all right, title and interest in and to any such Improvement33. to Arcturns Platform Technology and Patent Rights on such Arcturns Platform Technology. Any such Improvement to ArcturnsPlatform Technology and Patent Rights filed on such Arcturus Platform Technology shall be the sole and exclusive property ofArcturns and shall constitute Confidential Information of Arcturus.8.1.3Inventorship. All determinations of inventorship under this Agreement shall follow inventorship asdetermined according to United States Patent Law. 8.2Patent Prosecution.8.2.1Ultragenyx Prosecuted Patents. Ultragenyx shall have the first right, authority and responsibility toprepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) andmaintain the Product-Specific Patents and all other Collaboration Patents owned by Ultragenyx, including the Joint CollaborationPatents (collectively, the “Ultragenyx Prosecuted Patents”) in any jurisdiction in the Territory using counsel of its own choice, andwill be solely responsible for all costs and expenses incurred by Ultragenyx in connection with such activities. Ultragenyx shall useCommercially Reasonable Efforts to prepare, file, prosecute and maintain the Ultragenyx Prosecuted Patents, and in any case shall takeinto account Arcturus’ interests hereunder (including payments rights under Article 7 and potential future rights of Arcturus inconnection with Discontinued Targets or Terminated Targets) in making decisions with respect to such Ultragenyx Prosecuted Patents.Ultragenyx shall provide Arcturus reasonable opportunity to review and comment on its filing and prosecution efforts relating to theUltragenyx Prosecuted Patents reasonably prior to any submissions with applicable patent authorities. Ultragenyx shall promptlyprovide Arcturus with a copy of material communications from any patent authority in the Territory regarding the UltragenyxProsecuted Patents, and shall provide drafts of any material filings or material responses to be made to such patent authoritiesreasonably in advance of submitting such filings or responses so that Arcturus may have an opportunity to review and commentthereon. If Ultragenyx disagrees with any of Arcturus’s comments, it shall consult with Arcturns in good faith to reach a mutuallyagreeable position. If Ultragenyx determines in its sole discretion to abandon, cease prosecution or not maintain any UltragenyxProsecuted Patents anywhere in the Territory, then Ultragenyx shall provide Arcturus written notice of such determination at least […***…] days before any deadline for taking action to avoid abandonment or other loss of rights (and shall clearly specify in such noticeany pending deadlines) and shall provide Arcturus with the opportunity to prepare, file, prosecute and maintain such UltragenyxProsecuted Patent in the Territory at its sole cost and expense.8.2.2Arcturus Prosecuted Patents. If Arcturus takes over the prosecution of any Product-SpecificPatents in accordance with Section 3.5.1 or Section 12.5.8, then Arcturus shall have the first right, authority and responsibility toprepare, file, prosecute (including any oppositions, interferences, reissue proceedings, reexaminations and post-grant proceedings) andmaintain such Product-Specific Patents (collectively, the “Arcturus Prosecuted Patents”) using counsel of its own choice, and will besolely responsible for all costs and expenses incurred by Arcturus in connection with such activities. Arcturus shall provide Ultragenyxreasonable opportunity to review and comment on its filing and prosecution efforts relating to the Arcturus Prosecuted Patentsreasonably prior to any submissions with applicable patent***Confidential Treatment Requested34. authorities. Arcturus shall promptly provide Ultragenyx with a copy of material communications from any patent authority in theTerritory regarding the Arcturus Prosecuted Patents, and shall provide drafts of any material filings or material responses to be madeto such patent authorities reasonably in advance of submitting such filings or responses so that Arcturus may have an opportunity toreview and comment thereon. If Arcturus disagrees with any of Ultragenyx’s comments, it shall consult with Ultragenyx in goodfaith to reach a mutually agreeable position. If Arcturus determines in its sole discretion to abandon, cease prosecution or notmaintain any Arcturus Prosecuted Patent anywhere in the Territory, then Arcturus shall provide Ultragenyx written notice of suchdetermination at least […***…] days before any deadline for taking action to avoid abandonment or other loss of rights (and shallclearly specify in such notice any pending deadlines) and shall provide Ultragenyx with the opportunity to prepare, file, prosecuteand maintain such the Arcturus Prosecuted Patent in the Territory at its sole cost and expense.8.2.3Arcturus Patents. Arcturus has the sole right, but not the obligation, to prosecute and maintain allArcturus Patents that are not Joint Collaboration Patents, at its sole cost and expense using counsel of its choice.8.2.4Joint Collaboration Patents. If the Parties make any Joint Collaboration Technology, the Partiesshall promptly meet to discuss and determine, based on the advice of patent counsel selected by agreement of the Parties, whether toseek Joint Collaboration Patents thereon. If Ultragenyx decides to seek any Joint Collaboration Patents, Ultragenyx shall have the firstright, but not the obligation, to prepare, file prosecute and maintain, at its expense, any Joint Collaboration Patents throughout theworld using such jointly selected patent counsel. Ultragenyx shall provide Arcturus reasonable opportunity to review and comment onits filing and prosecution efforts relating to such Joint Collaboration Patents reasonably prior to any submissions with applicable patentauthorities. Ultragenyx shall promptly provide Arcturus with a copy of material communications from any patent authority in theTerritory regarding such Joint Collaboration Patents, and shall provide drafts of any material filings or material responses to be made tosuch patent authorities reasonably in advance of submitting such filings or responses so that Arcturus may have an opportunity toreview and comment thereon. If Ultragenyx disagrees with any of Arcturus’s comments, it shall consult with Arcturus in good faith toreach a mutually agreeable position. If Ultragenyx determines in its sole discretion to abandon, cease prosecution or not maintain anysuch Joint Collaboration Patents anywhere in the Territory, then Ultragenyx shall provide Arcturus written notice of suchdetermination at least […***…] days before any deadline for taking action to avoid abandonment or other loss of rights (and shallclearly specify in such notice any pending deadlines) and shall provide Arcturus with the opportunity to prepare, file, prosecute andmaintain such Joint Collaboration Patent in the Territory at its sole cost and expense.8.3Patent Term Extensions. The Parties will cooperate with each other in gaining Patent Right term extensionwhere applicable to Products and in the case of any disagreement, Ultragenyx would have the final say as to term extension for anyPatent Right claiming the composition or method of use of a Product.8.4Defense and Settlement of Third Party Claims.***Confidential Treatment Requested35. 8.4.1Notice of Third Party Infringement Claim. During the Term, each Party shall bring to the attentionof the other Party all information regarding potential infringement or any claim of infringement of Third Party intellectual propertyrights in connection with the development, manufacture, production, use, importation, offer for sale, or sale of Products in theTerritory. The Parties shall discuss such information and decide how to handle such matter. Subject to Article 10, each Party shall besolely responsible for defending any claim, suit or action brought against it alleging infringement of Third Party intellectual propertyrights in connection with its activities under this Agreement. This Section 8.4.1 shall not be interpreted as placing on either Party a dutyof inquiry regarding Third Party intellectual property rights.8.4.2Notice of Third Party Challenge. If a declaratory judgment action is brought naming either Party asa defendant and alleging invalidity of any of the Patent Rights contained in the Product-Specific Patents (a “Third Party Challenge” ),the Party first having notice of the Third Party Challenge shall promptly notify the other Party, and the Parties shall promptly confer toconsider the claim or assertion and the appropriate course of action.8.4.3Responsibility for Defense. With respect to a Development Target, following Ultragenyx’s exerciseof its option pursuant to Section 5.2 and so long as such license has not been terminated, Ultragenyx shall have the right to defend suchThird Party Challenge. To the extent the Third Party Challenge relates to the Arcturus Patents and/or Product-Specific Patents that donot Cover the Exploitation of Products, then Arcturus shall have the right to defend such Third Party Challenge.8.4.4Settlement. Neither Party shall enter into any settlement of any Third Party Challenge that admits tothe invalidity or unenforceability of any Patent Right Controlled by the other Party, and neither Party shall enter into any settlement ofany Third Party Challenge that admits to the invalidity or unenforceability of any Patent Right within any Product-Specific Patent, or ineither case otherwise affects the scope, validity or enforceability of such Patent Right, or incurs any financial liability on the part of anyother Party or requires an admission of liability, wrongdoing or fault on the part of the other Party, in each case without such otherParty’s written consent. In any event, the other Party shall reasonably assist the defending Party and cooperate in any such litigation atthe defending Party’s request and expense. Additionally, if the defending Party is not the Party that Controls the Patent Right inquestion, then the other Party has the right to join any such action. 8.5Infringement by Third Parties.8.5.1Enforcement of Product-Specific Patents.(a)Notice of Infringement. Following Ultragenyx’s exercise of its option pursuant to Section5.2 with respect to a Development Target, if there is any infringement, threatened infringement, or alleged infringement of anyProduct-Specific Patent on account of a Third Party’s manufacture, use, offer for sale, or sale of a product anywhere in the Territory (ineach case, a “Product Infringement’), then each Party shall promptly notify the other Party in writing of any such Product Infringementof which it becomes aware, and shall provide evidence in such Party’s possession demonstrating such Product Infringement; provided,however, that36. this Section shall not require a Party to breach any contractual obligation of confidentiality owed to any Third Party.(b)Right to Enforce Product Infringement. Following Ultragenyx’s exercise of its optionpursuant to Section 5.2 with respect to a Development Target, Ultragenyx shall have the first right, but not the obligation, to bring anappropriate suit or other action against any person or entity allegedly engaged in any such Product Infringement of the ProductSpecificPatent in the Territory (and to defend any related counterclaim, subject to Section 8.4.3 and Section 8.4.4), at Ultragenyx’s expense.Ultragenyx shall keep Arcturus fully informed about such suit or action and shall not knowingly take any position with respect to, orcompromise or settle, any such Product Infringement in any way that is reasonably likely to adversely affect the scope, validity orenforceability of the Product-Specific Patent. Ultragenyx shall have a period of […***…] days after its receipt or delivery of noticeand evidence pursuant to Section 8.5.1(a), to elect to so enforce such Product-Specific Patent in the Territory (or to settle or otherwisesecure the abatement of such Product Infringement). In the event Ultragenyx does not so elect (or settle or otherwise secure theabatement of such Product Infringement), it shall so notify Arcturus in writing, or if Ultragenyx does not enforce such Product-SpecificPatent in the Territory during such […***…] day period, then in either case Arcturus shall have the right to commence a suit or takeaction to enforce any applicable Product-Specific Patent with respect to such Product Infiingement in the Territory, at Arcturus’sexpense.(c)Cooperation. Each Party shall provide to the Party enforcing any such rights under thisSection 8.5.1 reasonable assistance in such enforcement, at such enforcing Party’s request and expense, including joining such actionas a party plaintiff if required by applicable Laws to pursue such action and giving reasonable assistance and authority to control, fileand prosecute the suit as necessary. The non-enforcing Party shall have the right, at its own expense, to be represented in any suchaction by counsel of its own choice. The enforcing Party shall keep the other Party regularly informed of the status and progress ofsuch enforcement efforts, and shall reasonably consider the other Party’s comments on any such efforts.(d)Settlement. Without the prior written consent of the other Party, neither Party shall settle anyclaim, suit or action that it brought under this Section 8.5.1 that admits the invalidity or unenforceability of any Product-Specific Patent,requires abandonment or limits the scope of any such Product-Specific Patent or would limit or restrict the ability of either Party to sellProducts anywhere in the Territory or admits any liability of or imposes any other restrictions or obligations on the other Party, withoutthe written consent of such other Party.(e)Expenses and Recoveries. A Party bringing a claim, suit or action under Section 8.5.1against any person or entity engaged in a Product Infringement shall be solely responsible for any expenses incurred by such Party as aresult of such claim, suit or action. If such Party recovers monetary damages from such Third Party in such suit or action, suchrecovery shall be allocated first to the reimbursement of any expenses incurred by the Parties in such litigation (including, for thispurpose, a reasonable allocation of expenses of internal counsel), and any remaining amount shall be distributed as follows: (x) ifUltragenyx enforces, one hundred percent (100%) to Ultragenyx, provided such amount shall be included in***Confidential Treatment Requested37. Net Sales for the purposes of determining royalties due to Arcturus pursuant to Section 7.8, and (y) if Arcturus enforces a ProductInfringement, fifty percent (50%) to Arcturus and fifty percent (50%) to Ultragenyx.8.5.2Enforcement of Ultragenyx’s Background Technology and Ultragenyx’s CollaborationPatents. Ultragenyx shall have the sole right, but not the obligation, at its own expense and discretion to bring an appropriate suit orother action against any person or entity allegedly engaged in any infringement, threatened infringement or alleged infringement of allPatent Rights within Ultragenyx’s Background Technology and all Collaboration Patents solely owned by Ultragenyx. All monetarydamages recovered by Ultragenyx from such Third Party in such suit or action shall be retained by Ultragenyx.8.5.3Enforcement of Joint Collaboration Patents. If either Party becomes aware of any infringement,threatened infringement, or alleged infringement of any Joint Collaboration Patent by any Third Party, then that Party shall promptlynotify the other Party in writing regarding such infringement and shall provide evidence in such Party’s possession demonstrating suchinfringement. The Parties shall reasonably cooperate with each other regarding the enforcement of the Joint Collaboration Patents, andshall agree upon an allocation of recoveries received in any such enforcement action.8.5.4Enforcement of Arcturus Patents. If the Product corresponding to a Product Infringement is notcovered by a Product-Specific Patent and the Product Infringement infringes an Arcturus Patent that covers the composition or anapproved use of a Product, the Parties shall meet to discuss what action, if any, to take. Arcturus shall consider any request byUltragenyx that Arcturus commence an enforcement action against a Product Infringement with respect to such Arcturus Patent.ARTICLE 9REPRESENTATIONS AND WARRANTIES9.1Mutual Warranties. As of the Effective Date, each of Ultragenyx and Arcturus represent and warrant that:(a)it is duly organized and validly existing under the Law of the jurisdiction of its incorporation,and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;(b)it is duly authorized to execute and deliver this Agreement and to perfonn its obligationshereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action;and(c)this Agreement is legally binding upon it and enforceable in accordance with its terms. Theexecution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral orwritten, to which it is a party or by which it may be bound, nor violate any material applicable Law.38. 9.2Additional Arcturus Warranties. As of the Effective Date, Arcturus warrants to Ultragenyx that:(a)Arcturus has full legal or beneficial title and ownership of, or an exclusive license to,Arcturus Patents listed on Exhibit A, and Arcturus has not granted any rights to any Third Party to such Arcturus Patents with respectto any Development Targets and/or Reserved Targets;(b)Arcturus has not entered, and shall not enter, into any agreement with any Third Party that isin conflict with the rights granted to Ultragenyx under this Agreement, and has not taken and shall not take any action that would inany way prevent it from granting the rights granted to Ultragenyx under this Agreement;(c)Exhibit A is a complete and accurate list of all Arcturus Patents existing as of the EffectiveDate;(d)The Arcturus Patents are not subject to any liens or encumbrances. Except as expresslyidentified on Exhibit A, none of Arcturus Patents are in-licensed by Arcturus. No patent application or registration within ArcturusPatents is subject of any pending interference, opposition, cancellation or patent protest;(e)Table A of Exhibit A lists all Third Party licenses and agreements pursuant to whichArcturus or its Affiliates has obtained license rights to Arcturus Patents and Arcturus Know-How, and Arcturus has shared withUltragenyx complete and accurate copies of all such licenses and agreements;(f)No Third Party has made any claim or allegation to Arcturus or its Affiliates in writing that aThird Party has any right or interest in or to Arcturus Patents listed on Exhibit A;(g)To Arcturus’s knowledge, the practice of Arcturus Technology does not infringe any ThirdParty Patent Rights or misappropriate any proprietary rights of any Third Party;(h)To Arcturus’s knowledge, no Third Party is infringing the Arcturus Patent Rights and noThird Party has misappropriated any Arcturus Know-How;(i)There is no claim or litigation that has been brought or threatened by any Third Party allegingthat Arcturus Patents are invalid or unenforceable; and(j)Arcturus has not intentionally withheld any information in its control that is material toUltragenyx’s decision to enter into this Agreement. To Arcturus’s knowledge as of the Effective Date, all information disclosed at anytime prior to the Effective Date by Arcturus relating to the Arcturus Technology is true and accurate. Additionally, to Arcturus’sknowledge as of the Effective Date, Arcturus has not failed and will not fail to disclose to Ultragenyx any material information knownto Arcturus and in its possession and control that would be required to be disclosed in order to make the information relating to theArcturus Technology that have been disclosed not misleading.39. 9.3Additional Covenants. Each of Ultragenyx and Arcturus covenants to the other Party the following:(a)it will conduct, and will cause its contractors to conduct, all preclinical and clinical studies forProducts, and manufacturing of such products, in accordance with (i) all U.S. Laws and the Laws of the country in which such clinicalstudies are conducted, and (ii) the known or published standards of the FDA and the Regulatory Authority in such country.(b)it will not knowingly make an untrue statement of a material fact to any Regulatory Authoritywith respect to Products (whether in any submission to such Regulatory Authority or otherwise), and will not knowingly fail todisclose a material fact required to be disclosed to any Regulatory Authority with respect to Products;(c)in connection with its activities hereunder, it shall comply with all applicable (i) U.S. Lawsprohibiting the re-export, directly or indirectly, of certain controlled U.S.-origin items without a license to parties located in certaincountries or appearing on certain U.S. Government lists of restricted parties; (ii) U.S. Laws prohibiting participation in non-U.S.boycotts that the United States does not support; and (iii) U.S. Laws prohibiting the sale of products to parties from any country subjectto U.S. economic sanctions or who are identified on related U.S. Government lists of restricted parties; and(d)its owners, directors, officers, employees, and any agent, representative, subcontractor orother Third Party acting for or on such its behalf, shall not, directly or indirectly, offer, pay, promise to pay, or authorize such offer,promise or payment, of anything of value, to any Third Party for the purposes of obtaining or retaining business through any improperadvantage in connection with this Agreement, or that would otherwise violate any applicable Laws, rules and regulations concerningor relating to public or commercial bribery or corruption.9.4Ultragenyx Warranty. Ultragenyx has not entered, and shall not enter, into any agreement with any Third Partythat is in conflict with rights granted to Arcturus under this Agreement, and has not taken and shall not take any action that would inany way prevent it from granting the rights granted to Arcturus under this Agreement.9.5Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE 9, NEITHERPARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS ORIMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, QUALITY, FITNESS FOR A PARTICULARPURPOSE, NONINFRINGEMENT, OR VALIDITY OF PATENT CLAIMS. NOTHING IN THIS AGREEMENT SHALL BECONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY EITHER PARTY THAT EITHER PARTYWILL BE SUCCESSFUL IN OBTAINING ANY PATENT RIGHTS, OR THAT ANY PATENTS WILL ISSUE BASED ON APENDING APPLICATION. WITHOUT LIMITING THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIESEXPRESSLY SET FORTH HEREIN, EACH PARTY SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT THEPRODUCTS WILL BE SUCCESSFUL, IN WHOLE OR IN PART.40. ARTICLE 10INDEMNIFICATION 10.1Indemnity.10.1.1By Ultragenyx. Ultragenyx will indemnify, hold harmless and defend Arcturus, its Affiliates andtheir respective directors, officers, employees and agents (the “Arcturus Indemnified Parties”) against any and all losses, damages,liabilities, judgments, fines, amounts paid in settlement, expenses and costs of defense (including reasonable attorneys’ fees andwitness fees) (“Losses”) resulting from any claim, action or proceeding brought or initiated by a Third Party (“Third Party Claim”)against an Arcturus Indemnified Party to the extent that such Third Party Claim arises out of: (a) the gross negligence or willfulmisconduct of Ultragenyx or any Ultragenyx Indemnified Party in connection with its activities under this Agreement, (b) thematerial breach of the representations, warranties and covenants made under this Agreement by Ultragenyx, or (c) the Exploitationof any Product by or on behalf of Ultragenyx, its Affiliates, or their respective Sublicensees (including from product liability andintellectual property infringement claims); except, in each case, to the extent such Losses result from clause (a) or (b) of Section10.1.2.10.1.2By Arcturus. Arcturus will indemnify, hold harmless and defend Ultragenyx, its Affiliates and theirrespective directors, officers, employees and agents (the “Ultragenyx Indemnified Parties”) against any and all Losses resultingfrom any Third Party Claim against an Ultragenyx Indemnified Party to the extent that such Third Party Claim arises out of: (a) thegross negligence or willful misconduct of Arcturus or any Arcturus Indemnitee or their subcontractors in connection with itsactivities under this Agreement, (b) the material breach of the representations, warranties and covenants made under this Agreementby Arcturus, or (c) the Exploitation by Arcturus of Products to Discontinued Targets or Terminated Targets; except, in each case, tothe extent such Losses result from clause (a) or (b) of Section 10.1.1.10.1.3Procedure. Promptly after receipt by any of the Ultragenyx Indemnified Parties or the ArcturusIndemnified Parties (together or individually, an “Indemnified Party”) of notice of any pending or threatened Third Party Claim forwhich the Indemnified Party intends to seek indemnity hereunder (an “Indemnity Claim”), such Indemnified Party shall give writtennotice of the same to the other party (the “Indemnifying Party”) (provided, however, that any failure to promptly notify shall notexcuse any obligation of the Indemnifying Party except to the extent it is actually prejudiced thereby). The Indemnifying Party shallbe entitled to assume the defense thereof, with counsel selected by the Indemnifying Party and reasonably satisfactory to theIndemnified Party. The Indemnifying Party shall not be liable for any damages with respect to any Indemnity Claim that is settled orcompromised by the Indemnified Party without the Indemnifying Party’s prior written consent. No offer of settlement, compromiseor settlement by the Indemnifying Party shall be binding on an Indemnified Party without the Indemnified Party’s prior writtenconsent, unless such settlement or compromise (a) fully releases the Indemnified Party without any liability, loss, cost or obligation,and (b) admits no liability, wrongdoing or other admission against interest on the part of the Indemnified Party. In any suchproceeding, the Indemnified Party shall have41. the right to retain its own counsel at its own cost and expense. In the event that the Parties cannot agree as to the application ofSections 10.1.1 and 10.1.2 to any Loss or Third Party Claim, the Parties may conduct separate defenses of such Third Party Claim.In such case, each Party further reserves the right to claim indemnity from the other in accordance with Sections 10.1.1 and 10.1.2upon resolution of such underlying Third Party Claim.10.2LIMITATION OF DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE HEREUNDERTO THE OTHER PARTY FOR ANY PUNITIVE, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES(INCLUDING LOST REVENUE, LOST PROFITS, OR LOST SAVINGS) HOWEVER CAUSED AND UNDER ANYTHEORY, EVEN IF IT HAS NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. THE LIMITATIONS SET FORTH INTHIS SECTION 10.2 SHALL NOT APPLY WITH RESPECT TO (A) ANY BREACH OF ARTICLE 11 OR (B) THEINTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE OF A PARTY. NOTHING IN THIS SECTION 10.2 ISINTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDERTHIS ARTICLE 10 WITH RESPECT TO ANY DAMAGES PAID BY THE OTHER PARTY TO A THIRD PARTY INCONNECTION WITH A THIRD PARTY CLAIM.10.3Insurance. Each of the Parties will, at their own respective expense (and not subject to cost sharing hereunder)procure and maintain during the Term, insurance policies adequate to cover their obligations hereunder and consistent with the normalbusiness practices of prudent biopharmaceutical companies of similar size and scope (or reasonable self-insurance sufficient to providematerially the same level and type of protection). Such insurance will not create a limit to either Party’s liability hereunder. Each Partyshall provide the other with written notice at least […***…] days prior to the cancellation, non-renewal or material change in suchinsurance or self-insurance which materially adversely affects the rights of the other Party hereunder.ARTICLE 11CONFIDENTIALITY 11.1Confidential Information.11.1.1Confidential Information. Each Party (“ Disclosing Party”) may disclose to the other Party(“Receiving Party”), and Receiving Party may acquire during the course and conduct of activities under this Agreement, certainproprietary or confidential information of Disclosing Party in connection with this Agreement. The term “Confidential Information”will mean all ideas and information of any kind, whether in written, oral, graphical, machine-readable or other form, whether or notmarked as confidential or proprietary, which are transferred, disclosed or made available by Disclosing Party or at the request ofReceiving Party, including any of the foregoing of Third Parties. All Know-How and Patents Controlled by a Party shall be deemedsuch Party’s Confidential Information, and all Arcturus Materials shall be deemed Arcturus’ Confidential Information. Disclosure ofConfidential Information under this Agreement, including the transfer of material between the ***Confidential Treatment Requested 42. Parties or the sublicensees and contractors, shall be a private disclosure and not a commercial sale of the material.11.1.2Restrictions. During the Term and for […***…] years thereafter, Receiving Party will keep allDisclosing Party’s Confidential Information in confidence with the same degree of care with which Receiving Party holds its ownconfidential information (but in no event less than a commercially reasonable degree of care). Receiving Party will not useDisclosing Party’s Confidential Information except for in connection with the performance of its obligations and exercise of its rightsunder this Agreement. Receiving Party has the right to disclose Disclosing Party’s Confidential Information without DisclosingParty’s prior written consent, to the extent and only to the extent reasonably necessary, to Receiving Party’s Affiliates and its andtheir employees, subcontractors, consultants or agents who have a need to know such Confidential Information in order to performits obligations and exercise its rights under this Agreement and who are required to comply with the restrictions on use anddisclosure in this Section 11.1.2. Receiving Party will use diligent efforts to cause those entities and persons to comply with therestrictions on use and disclosure in this Section 11.1.2. Receiving Party assumes responsibility for those entities and personsmaintaining Disclosing Party’s Confidential Information in confidence and using same only for the purposes described herein.11.1.3Exceptions. Receiving Party’s obligation of nondisclosure and the limitations upon the right to usethe Disclosing Party’s Confidential Information will not apply to the extent that Receiving Party can demonstrate that the DisclosingParty’s Confidential Information: (a) was known to Receiving Party or any of its Affiliates prior to the time of disclosure; (b) is orbecomes public knowledge through no wrongful act of Receiving Party or any of its Affiliates; (c) is obtained by Receiving Party orany of its Affiliates from a Third Party under no obligation of confidentiality to Disclosing Party; or (d) has been independentlydeveloped by employees, subcontractors, consultants or agents of Receiving Party or any of its Affiliates without the use ofDisclosing Party’s Confidential Information, as evidenced by contemporaneous written records.11.1.4Permitted Disclosures. Receiving Party may disclose Disclosing Party’s Confidential Informationto the extent (and only to the extent) such disclosure is reasonably necessary in the following instances:(a)in order to comply with applicable Law (including any securities law or regulation or therules of a securities exchange) or with a legal or administrative proceeding;(b)in connection with prosecuting or defending litigation, Regulatory Approvals and otherregulatory filings and communications, and filing, prosecuting and enforcing Patent Rights in connection with Receiving Party’s rightsand obligations pursuant to this Agreement; and(c)in connection with exercising its rights hereunder, to its Affiliates; potential and futurecollaborators, licensees or sublicensees and vendors; potential and permitted acquirers or assignees; and potential investment bankers,investors and lenders;***Confidential Treatment Requested 43. provided, however, that (1) with respect to Sections 11.1.4(a) or 11.l.4(b), where reasonably possible, Receiving Party will notifyDisclosing Party of Receiving Party’s intent to make any disclosure pursuant thereto sufficiently prior to making such disclosure so asto allow Disclosing Party adequate time to take whatever action it may deem appropriate to protect the confidentiality of theinformation to be disclosed, and (2) with respect to Section 11.1.4(c), each of those named people and entities are required to complywith the restrictions on use and disclosure in Section 11.1.2 (other than investment bankers, investors and lenders, which must bebound prior to disclosure by commercially reasonable obligations of confidentiality).11.2Disclosure of Terms of Agreement. Neither Party may disclose the terms of this Agreement except (a) inconfidence to its legal and financial advisors to the extent such disclosure is reasonably necessary in connection with such Party’sactivities in connection with this Agreement, (b) to any bona fide potential or actual investor, acquirer, merger partner, licensee, orother financial or commercial partner for the sole purpose of evaluating an actual or potential investment, license, acquisition or otherbusiness relationship; provided that in each case, the disclosees are bound by written obligations of confidentiality; or (c) to the extentrequired pursuant to applicable securities laws or regulations, including those of the Securities and Exchange Commission, providedthat the Party filing this Agreement shall seek confidential treatment for the terms of the Agreement to the extent permitted by laws andregulations as determined by the filing Party. 11.3Press Releases.11.3.1In the event either Party (the “Issuing Party”) desires to issue a press release or other publicstatement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, the IssuingParty will provide the other Party (the “Reviewing Party”) with a copy of the proposed press release or public statement (the “PressRelease”). The Issuing Party will specify with each such Press Release, taking into account the urgency of the matter being disclosed,a reasonable period of time within which the Receiving Party may provide any comments on such Press Release (but in no event lessthan five (5) business days). If the Receiving Party provides any comments, the Parties will consult on such Press Release and work ingood faith to prepare a mutually acceptable Press Release. Either Party may subsequently publicly disclose any information previouslycontained in any Press Release. This Section shall not limit Ultragenyx, in its sole discretion, from making disclosures relating to thedevelopment or commercialization of a Product, including the results of research and any clinical trial conducted by Ultragenyx or anyhealth or safety matter related to a Product.11.3.2The Parties hereby agree that a joint press release or separate press releases shall be issued within ten(10) days of the signing of this Agreement that announce(s) this Agreement, with content to be mutually agreed upon by the Parties ingood faith.11.4Publications. Arcturus will have the sole right to publish and make scientific presentations with respect toArcturus Technology, and to issue press releases (except with respect to the terms of this Agreement, which is governed by Section11.2) and make other public disclosures regarding any such Arcturus Technology, and Ultragenyx will not do any of the foregoingwithout Arcturus’s prior written consent, except as required by Law; provided,44. however, that any publication or presentation to be made by Arcturus that names Ultragenyx or discloses any Compound and/orProduct (or any information specific to such Compound or Product) will require the prior consent of Ultragenyx, not to beunreasonably withheld. Ultragenyx will have the sole right to publish and make scientific presentations with respect to Products (butnot specifically referencing or discussing Arcturus Technology), and to issue press releases (except with respect to the terms of thisAgreement, which is governed by Section 11.2) or make other public disclosures regarding any such Products, and Arcturus will notdo any of the foregoing without Ultragenyx’s prior written consent, except as required by Law. The Party that is entitled hereunder tomake a publication or presentation (the “Publishing Party”) will deliver to the other Party (the “Non-Publishing Party”) a copy of anyproposed written publication or outline of presentation to be made by the Publishing Party in advance of submission for publication orpresentation at least […***…] days in advance of submission (or, where a copy of such publication or presentation is not available atsuch time, a draft or outline of such publication or a description of such presentation), and the Non-Publishing Party will have the right,upon notice to the Publishing Party to: (i) require a delay in submission of not more than […***…] days to enable patent applicationsprotecting any product; and (ii) prohibit disclosure of any of its Confidential Information in any such proposed publication orpresentation. If there is any dispute between the Parties with regard to a proposed publication, presentation or other communicationregarding this Agreement, such dispute shall be referred to the JSC for resolution.11.5Relationship to the Confidentiality Agreement. This Agreement supersedes that certain ConfidentialDisclosure Agreement between the Parties dated February 11, 2015; provided, however, that all “Confidential Information” disclosedor received by the Parties thereunder will be deemed “Confidential Information” hereunder and will be subject to the terms andconditions of this Agreement.11.6Attorney-Client Privilege. Neither Party is waiving, nor will be deemed to have waived or diminished, any ofits attorney work product protections, attorney-client privileges or similar protections and privileges recognized under the applicableLaw of any jurisdiction as a result of disclosing information pursuant to this Agreement, or any of its Confidential Information(including Confidential Information related to pending or threatened litigation) to the receiving Party, regardless of whether thedisclosing Party has asserted, or is or may be entitled to assert, such privileges and protections. The Parties may become jointdefendants in proceedings to which the information covered by such protections and privileges relates and may determine that theyshare a common legal interest in disclosure between them that is subject to such privileges and protections, and in such event, mayenter into a joint defense agreement setting forth, among other things, the foregoing principles but are not obligated to do so.ARTICLE 12TERM & TERMINATION12.1Term. The term of this Agreement (the “Term”) shall commence on the Effective Date, and unless terminatedearlier as provided in this Article 12, shall continue in full force and effect on a Development Target-by-Development Target basisuntil expiration of the last-to-expire Royalty Term for any Product with respect to such Development Target in the***Confidential Treatment Requested45. Territory. Upon expiration of this Agreement with respect to a particular Development Target, the licenses to Arcturus Know-Howgranted to Ultragenyx by Arcturus under this Agreement to Exploit Products with respect to such Development Target shall be fullypaid-up, irrevocable and exclusive.12.2Termination for Breach.12.2.1Subject to Section 12.2.2, if either Ultragenyx or Arcturus is in material breach or default of any ofits obligations hereunder, the non-breaching Party may give written notice to the breaching Party reasonably describing the eventsor circumstances related to the alleged breach or default, and in the event the breaching Party fails to cure such material breach ordefault within ninety (90) days after receipt of such notice, the non-breaching Party shall have the right to terminate this Agreementby giving written notice to the breaching Party to such effect. Notwithstanding the foregoing, a Party shall have the right toterminate this Agreement pursuant to this Section 12.2.1: (a) with respect to an individual Target only, if the other Party’s materialbreach pertains only to such Target, or (b) in its entirety only if such material breach fundamentally frustrates the objectives ortransactions contemplated by this Agreement taken as a whole.12.2.2If the alleged breaching Party disputes in good faith the existence or materiality of a breach specifiedin a notice provided by the other Party in accordance with Section 12.2.1, and such alleged breaching Party provides the other Partynotice of such dispute within such ninety (90) day period, then the non-breaching Party shall not have the right to terminate thisAgreement under Section 12.2.1 unless and until (i) the dispute resolution process in Section 13.1 has finally determined that thealleged breaching Party has materially breached the Agreement and (ii) such Party fails to cure such breach within sixty (60) daysfollowing such final decision; provided that with respect to a determination that a Party has failed to use Commercially ReasonableEfforts in accordance with this Agreement, such breaching Party shall not have such additional cure period under clause (ii). It isunderstood and agreed that during the pendency of such dispute, all of the terms and conditions of this Agreement shall remain ineffect and the Parties shall continue to perform all of their respective obligations hereunder.12.3Ultragenyx Termination. On a Target-by-Target basis, Ultragenyx will have the right to terminate thisAgreement with respect to such Target upon sixty (60) days written notice to Arcturus.12.4Termination for Patent Challenges. If Ultragenyx or its Affiliate or Sublicensee commences or otherwise,directly or indirectly, pursues (or assists Third Parties to do so) any Challenge of any Patent Right included in the Arcturus Patents,Arcturus shall have the right to terminate the licenses granted to Ultragenyx with respect to such Patent Right being Challenged uponsixty (60) days written notice to Ultragenyx. If Arcturus or its Affiliate or sublicensee commences or otherwise, directly or indirectly,pursues (or assists Third Parties to do so) any Challenge of any Product-Specific Patents or any Patent Rights controlled by Ultragenyxand licensed to Arcturus under this Agreement, Ultragenyx shall have the right to terminate the licenses granted to Arcturus withrespect to such Patent Right being Challenged upon sixty (60) days written notice to Arcturus. For the purpose of this Section,“Challenge”46. means any challenge to the validity or enforceability of the applicable Patent Right, including by (i) filing a declaratory judgment actionin which the applicable Patent Right is alleged to be invalid or unenforceable, (ii) citing prior art pursuant to 35 U.S.C. §301, filing arequest for reexamination of the applicable Patent Right, or provoking or becoming party to an interference with the applicable PatentRight pursuant to 35 U.S.C. §135 or (iii) filing or commencing any reexamination, opposition, cancellation, nullity or similarproceedings against the applicable Patent Right, or petitioning for any form of administrative or judicial (or arbitration) review of theapplicable Patent Right, including post-grant review, Inter Partes Review, or opposition proceedings.12.5 Effect of Termination With Respect to Targets. Upon any early termination (i.e., not upon expiration) of thisAgreement in its entirety, or with respect to one or more Targets (such Target(s), the “Terminated Targets”), in addition to any otherremedies available at law or in equity:12.5.1all licenses granted to Ultragenyx under this Agreement with respect to such Terminated Targetswill terminate;12.5.2at Ultragenyx’s expense, unless such termination is by Ultragenyx due to material breach byArcturus pursuant to Section 12.2, in which case at Arcturus’s request and at its expense, Ultragenyx shall promptly and diligentlywind down, according to good clinical practice, any clinical trials that are ongoing for Products with respect to the TerminatedTargets at the time of notice of such termination;12.5.3As promptly as practicable after receiving Arcturus’s written request leading up to a termination of aTerminated Target, Ultragenyx will use commercially reasonable efforts to prepare a list of all agreements that meet the descriptionsset forth in this Section 12.5.3 and in Section 12.5.4. Upon request of Arcturus, Ultragenyx will promptly assign to Arcturus all ofUltragenyx’s right, title and interest in and to any agreements between Ultragenyx and Third Parties that specifically pertain to theDevelopment or Commercialization of a Terminated Product and that are assignable by Ultragenyx, subject to assumption byArcturus of all liabilities and obligations accruing thereunder thereafter including any fees and costs under such agreements and/orrelating to such assignment;12.5.4For any other Third Party agreement that is necessary or reasonably useful for the Development,Manufacture and/or Commercialization of the Terminated Products, upon request of Arcturus, Ultragenyx will use commerciallyreasonable efforts to extend the benefits to Arcturus, until the sooner of: (a) the end of the nine (9)-month period after the effectivedate of such termination, and (b) the date when Arcturus enters into a direct agreement with such Third Party, subject to assumptionby Arcturus of all obligations thereunder after the effective date of such termination, including any fees and costs under suchagreements and/or relating to such extension of benefits to Arcturus;12.5.5Ultragenyx shall transfer to Arcturus all trademarks and logos, and all goodwill thereof, that arespecific to Terminated Products and Controlled by Ultragenyx, including as part of any registrations for such Product, all atArcturus’s cost and expense;47. 12.5.6In the event of termination with respect to a Terminated Target prior to completion of the applicableCollaborative Development, Arcturus shall wind down its activities under the applicable Collaborative Development Plan and shalluse commercially reasonable efforts to reallocate its resources to other Collaborative Development activities under this Agreementor to other internal programs or Third Party funded work. Ultragenyx shall pay to Arcturus (i) the FTE Costs for the number ofFTEs actually incurred by Arcturus in winding down its activities under the applicable Collaborative Development Plan during theninety (90) day period beginning on Arcturus’ receipt of notice of termination (or the six (6) month period beginning on Arcturus’receipt of notice of termination if […***…] or more Targets are terminated prior to completion of the applicable CollaborativeDevelopment Plans within a six (6) month period), and (ii) any committed Out-of-Pocket Costs under the applicable CollaborativeDevelopment Plan that cannot reasonably be cancelled, such payment obligation being subject to reduction to the extent Arcturus isable to reasonably reallocate any such FTEs and/or Out-of-Pocket Costs to other internal programs or Third Party-funded workprior to the end of such remaining period. Arcturus will use Commercially Reasonable Efforts to reallocate such FTEs;12.5.7Ultragenyx shall grant (and hereby agrees that such license shall automatically take effect upon suchtermination) to Arcturus an exclusive, worldwide, royaltybearing, perpetual license, with the right to sublicense through multipletiers, under all: (i) Product-Specific Technology; (ii) Collaboration Technology; and (iii) other Patent Rights and Know-How that asof the effective date of such termination had been practiced or used by Ultragenyx under this Agreement, in each case to the extentControlled by Ultragenyx and/or its Affiliates, in each case to Exploit Compounds and Products (where the original Compound orProduct exists as of the date of such termination with respect to the Terminated Target) (“Terminated Products”);12.5.8If mutually agreed by the Parties, (i) Ultragenyx shall transfer to Arcturus the responsibility for theprosecution and maintenance of all Product-Specific Patents that specifically pertain to Compounds and/or Products with respect tothe Terminated Target, and Arcturus shall perform such prosecution and maintenance activities in accordance with Section 8.2.2and (ii) Arcturus shall have the first right to enforce such Product-Specific Patents in a Product Infringement with respect to anyTerminated Products in the manner similar to Ultragenyx’s enforcement rights described in Section 8.12.5.9Arcturus shall pay Ultragenyx royalties on Net Sales of Terminated Products, on a country-by-country basis, until the expiration of the last Valid Claim of the Product-Specific Patents or Patent Rights licensed by Ultragenyx toArcturus under Section 12.5.8 covering such Terminated Product in such country at the following rates: (i) […***…] percent ([…***…]%) if the applicable Target becomes a Terminated Target prior to the first Optimized Lead Designation for such TerminatedProduct; (ii) […***…] percent ([…***…]%) if the applicable Development Target becomes a Terminated Target after the firstOptimized Lead Designation for such Terminated Product and prior to the first PCC Designation of such Terminated Product; (iii)[…***…] percent ([…***…]%) if the applicable Development Target becomes a Terminated Target after the first PCCDesignation of such Terminated Product and prior to completion of a Phase 1 Clinical Trial***Confidential Treatment Requested48. for such Terminated Product; (iv) […***…] percent ([…***…]%) if the applicable Development Target becomes a TerminatedTarget after completion of a Phase 1 Clinical Trial for such Terminated Product and prior to completion of a Pivotal Trial for suchTerminated Product; and (v) […***…] percent ([…***…]%) if the applicable Development Target becomes a Terminated Targetafter completion of a Pivotal Trial for such Terminated Product. For the purposes of this Section 12.5.8, the definition of “ Net Sales”and “First Commercial Sale” shall apply mutatis mutandis to sales of any Terminated Product sold by Arcturus, its Affiliates orsublicensees and the definition of “Valid Claim” shall apply mutatis mutandis to claims of the Patent Rights licensed to Arcturuspursuant to Section 7 and Sections 7.13, 7.14 and 7.15 shall apply to payments to Ultragenyx, applied mutatis mutandis;12.5.10Ultragenyx shall promptly transfer to Arcturus all available data (including material clinical andpreclinical data), information, and Regulatory Filings, INDs and Regulatory Approvals pertaining to Compounds and Productspertaining to the Terminated Target that were in active Development or had been Commercialized at or before the time oftermination and in the event of any failure to obtain assignment, Ultragenyx will consent and grant to Arcturus the right to accessand reference (without any further action required on the part of Ultragenyx, whose authorization to file this consent with anyRegulatory Authority is hereby granted) any such items and information), and Ultragenyx shall transfer to Arcturus all (or, asrequested by Arcturus, a specified portion of) available quantities of Compounds and Products pertaining to the Terminated Targetat a price equal to Ultragenyx’s fully burdened cost of those supplies. The Parties shall discuss and establish appropriatearrangements with respect to safety data exchange with respect to the Terminated Target;12.5.11 Ultragenyx shall, for […***…] days after the effective date of termination, at Arcturus’s writtenrequest, reasonably assist at its own expense in the orderly and prompt transition of sponsorship and management of clinical trialsthen being conducted to Arcturus with respect to Products pertaining to the Terminated Targets;12.5.12 If Ultragenyx was manufacturing, or having manufactured on its behalf, any Product, or theCompounds contained therein, pertaining to the Terminated Target prior to termination, then at Arcturus’s request and uponcommercially reasonable pricing terms, until the earlier of: (i) such time as Arcturus has secured another source of Compound orProduct pertaining to the Terminated Target that is able to meet Arcturus’s Product quality and quantity requirements; and (ii) […***…] months after such termination, Ultragenyx shall use commercially reasonable efforts to supply, or cause to be supplied, toArcturus such quantities of Product (or Compound contained therein) pertaining to the Terminated Target as Arcturus mayreasonably require for the Exploitation of such Products in the Licensed Field, subject to payment by Arcturus of the agreed uponpercentage above Ultragenyx’s fully-burdened cost of such supplies; provided that Arcturus shall use commercially reasonableefforts to secure another source of supply as soon as reasonably practicable;12.5.13 Upon Arcturus’ request and expense, if a validated manufacturing process for the TerminatedTarget is in effect and Controlled by Ultragenyx, transfer such manufacturing process for such Terminated Target to Arcturus or itsdesignee, and cooperate with Arcturus to effect the transition of such manufacturing process; and12.5.14 Ultragenyx will not be required to initiate or continue, any clinical trial as to any Compound orProduct pertaining to the Terminated Target in the event of a***Confidential Treatment Requested 49. termination of the Agreement. If the Parties agree to transition any clinical trials to Arcturus, Arcturus shall reimburse Ultragenyxfor any costs incurred by Ultragenyx in transitioning such clinical trials to Arcturus, and Arcturus shall be responsible forreimbursing Ultragenyx […***…]% of the costs incurred by Ultragenyx prior to such transition in connection with the conduct ofsuch clinical trials. Should Ultragenyx be obligated to any Third Party to pay milestones or royalties with respect to any Compoundor Product then, prior to Ultragenyx granting a license to the same to Arcturus hereunder, Arcturus shall agree in writing to pay toUltragenyx all royalties and milestone payments that become due by Ultragenyx to the Third Party on account of use by Arcturus orits licensee.12.6Accrued Rights and Obligations; Survival. Termination of this Agreement for any reason shall not releaseeither Party from any liability which, at the time of such termination, has already accrued to the other Party or which is attributable to aperiod prior to such termination, nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or inequity which accrued or are based upon any event occurring prior to such termination. The provisions of Articles 1 (to the extentdefined terms are contained in the following surviving Articles and Sections), 11 (Confidentiality) and 13 (Miscellaneous), and Section3.5 (Discontinued Targets), 7.8 (Royalties, solely to the extent accrued during the Term with respect to Ultragenyx’s paymentobligations, or as pertaining to Arcturus’s payment obligations under Section 12.5.9), 7.13 (Late Payments, solely to the extent accruedduring the Term with respect to Ultragenyx’s payment obligations, or as pertaining to Arcturus’s payment obligations under Section12.5.9, solely to the extent accrued during the Term with respect to Ultragenyx’s payment obligations, or as pertaining to Arcturus’spayment obligations under Section 12.5.9), 7.14 (Records and Audits, solely to the extent accrued during the Term with respect toUltragenyx’s payment obligations, or as pertaining to Arcturus’s payment obligations under Section 12.5.9), 7.15 *Taxes, solely to theextent accrued during the Term with respect to Ultragenyx’s payment obligations, or as pertaining to Arcturus’s payment obligationsunder Section 12.5.9), 8.1 (Intellectual Property Ownership), 9.5 (Disclaimer), 10.1 (Indemnity), 10.2 (Limitation of Damages), 12.5(Effect of Termination With Respect to Targets), and 12.6 (Accrued Rights and Obligations; Survival), shall survive expiration ortermination of this Agreement for any reason.ARTICLE 13MISCELLANEOUS13.1Dispute Resolution. It is the objective of the Parties to establish procedures to facilitate the resolution ofdisputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. In the event ofany disputes, controversies or differences which may arise between the Parties out of or in relation to or in connection with thisAgreement, including any alleged failure to perform, or breach, of this Agreement, or any issue relating to the interpretation,application, enforcement, termination or validity of this Agreement (each, a “Dispute”), then upon the request of either Party by writtennotice, the Parties agree to first meet and discuss in good faith a possible resolution thereof, which good faith efforts shall include atleast one in-person meeting between the Parties’ respective Designated Executive Officers. If the matter is not resolved within […***…] days following the written request for***Confidential Treatment Requested 50. discussions, either Party may then invoke the alternative dispute resolution provisions set forth in Exhibit E.13.2Governing Law. This Agreement and its effect are subject to and shall be construed and enforced in accordancewith the law of the State of California, without regard to its conflicts of laws, except as to any issue which depends upon the validity,scope or enforceability of any Patent, which issue shall be determined in accordance with the laws of the country in which such patentwas issued, and except with respect to any issue of inventorship of any Collaboration Technology, which shall be determined inaccordance with U.S. federal law.13.3Entire Agreement; Amendment. This Agreement and all Exhibits attached to this Agreement and eachCollaborative Development Plan, constitute the entire agreement between the Parties as to the subject matter hereof. All prior andcontemporaneous negotiations, representations, warranties, agreements, statements, promises and understandings with respect to thesubject matter of this Agreement are hereby superseded and merged into, extinguished by and completely expressed by thisAgreement. None of the Parties shall be bound by or charged with any written or oral agreements, representations, warranties,statements, promises or understandings not specifically set forth in this Agreement. No amendment, supplement or other modificationto any provision of this Agreement shall be binding unless in writing and signed by all Parties.13.4Successors and Assigns. Neither this Agreement nor any of the rights or obligations created herein may beassigned by either Party, in whole or in part, without the prior written consent of the other Party, not to be unreasonably withheld ordelayed except that either Party shall be free to assign this Agreement (a) to an Affiliate of such Party, provided that such Party shallremain liable and responsible to the other Party for the performance and observance of all such duties and obligations by such Affiliate,or (b) in connection with any merger, sale of such Party or sale of all or substantially all of the assets or stock of the Party that relate tothis Agreement, without the prior consent of the non-assigning Party. This Agreement shall bind and inure to the benefit of thesuccessors and permitted assigns of the Parties hereto. Any assignment of this Agreement in contravention of this Section 13.4 shall benull and void.In the event that either Arcturus or Ultragenyx is acquired in a Change of Control Transaction by a Third Party (such ThirdParty, hereinafter referred to as an “Acquirer”), then the intellectual property of such Acquirer held or developed by such Acquirerprior to or after such acquisition (other than intellectual property developed by such Acquirer in the course of conducting the acquiredParty’s activities under this Agreement) shall be excluded from the Arcturus Technology, and any technology licensed by Ultragenyxto Arcturus under this Agreement, as applicable (each, as applicable, the “Acquired Party’s IP”), and such Acquirer (and Affiliates ofsuch Acquirer which are not controlled by (as defined under the Affiliate definition in Article 1) the acquired Party) shall be excludedfrom the Affiliate definition solely for purposes of the Acquired Party’s IP. For clarity, any intellectual property developed by anAcquirer in the course of conducting the acquired Party’s activities under this Agreement shall be included within such AcquiredParty’s IP to the extent such intellectual property would have been so included had it been developed by such acquired Party. Forfurther clarity, the Acquirer has sole discretion as to whether it will contribute its intellectual property or know-how to the acquiredParty’s activities and such Acquired Party’s IP.51. 13.5Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section ofthis Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses ofrights to “intellectual property” as defined under Section 101(35A) of the U.S. Bankruptcy Code to the extent permitted thereunder.The Parties shall retain and may fully exercise all of their respective rights and elections under the U.S. Bankruptcy Code. Upon thebankruptcy of any Party, the nonbankrupt Party shall further be entitled to a complete duplicate of (or complete access to, asapprop1iate) any such intellectual property, and such, if not already in its possession, shall be promptly delivered to the non-bankruptParty, unless the bankrupt Party elects to continue, and continues, to perform all of its obligations under this Agreement.13.6Independent Contractors. The relationship between Arcturus and Ultragenyx created by this Agreement issolely that of independent contractors. This Agreement does not create any agency, distributorship, employee-employer, partnership,joint venture or similar business relationship between the Parties. Neither Party is a legal representative of the other Party, and neitherParty can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other Party forany purpose whatsoever. Each Party shall use its own discretion and shall have complete and authoritative control over its employeesand the details of performing its obligations under this Agreement.13.7Notice. All notices or communication required or permitted to be given by either Party hereunder shall bedeemed sufficiently given if delivered in person, mailed by registered mail or certified mail, return receipt requested, or sent byovernight courier, such as Federal Express, to the other Party at its respective address set forth below or to such other address as oneParty shall give notice of to the other from time to time hereunder. Mailed notices shall be deemed to be received on the third (3rd)business day following the date of mailing. Notices sent by overnight courier shall be deemed received the day delivered by the courier(provided it maintains a record tracking the date of delivery). Notices delivered in person shall be deemed received as of the date ofdelivery. If to Ultragenyx: Ultragenyx Pharmaceutical Inc.60 Leveroni CourtNovato, CA 94949Attn: Chief Business Officer If to Arcturus: Arcturus Therapeutics, Inc.10628 Science Center Drive, Suite 200San Diego, CA 92121Attn: Chief Executive Officer 13.8Compliance With Law; Severability. Nothing in this Agreement shall be construed to require the commissionof any act contrary to Law. If any one or more provisions of this Agreement is held to be invalid, illegal or unenforceable, the affectedprovisions of this Agreement shall be curtailed and limited only to the extent necessary to bring it within the applicable legalrequirements and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affectedor impaired thereby.52. 13.9Non-Use of Names. Ultragenyx shall not use the name, trademark, logo, or physical likeness of Arcturus or anyof its officers, directors or employees, or any adaptation of any of them, in any advertising, promotional or sales literature, withoutArcturus’s prior written consent. Ultragenyx shall require its Affiliates to comply with the foregoing. Arcturus shall not use the name,trademark, logo, or physical likeness of Ultragenyx or any of its officers, directors or employees, or any adaptation of any of them, inany advertising, promotional or sales literature, without Ultragenyx’s prior written consent.13.10Waivers. A Party’s consent to or waiver, express or implied, of any other Party’s breach of its obligationshereunder shall not be deemed to be or construed as a consent to or waiver of any other breach of the same or any other obligations ofsuch breaching Party. A Party’s failure to complain of any act, or failure to act, by the other Party, to declare the other Party in default,to insist upon the strict performance of any obligation or condition of this Agreement or to exercise any right or remedy consequentupon a breach thereof, no matter how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder, ofany such breach, or of any other obligation or condition. A Party’s consent in any one instance shall not limit or waive the necessity toobtain such Party’s consent in any future instance and in any event no consent or waiver shall be effective for any purpose hereunderunless such consent or waiver is in writing and signed by the Party granting such consent or waiver.13.11Headings; Exhibits. Article and Section headings used herein are for convenient reference only, and are not apart of this Agreement. All Exhibits are incorporated herein by this reference.13.12Interpretation. Except where the context otherwise requires, wherever used, the singular shall include theplural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense(and/or). The term “including” as used herein shall mean including, without limiting the generality of any description preceding suchterm. All references to a “business day” or “business days” in this Agreement means any day other than a day which is a Saturday, aSunday or any day banks are authorized or required to be closed in the United States. The language in all parts of this Agreement shallbe deemed to be the language mutually chosen by the Parties. The Parties and their counsel have cooperated in the drafting andpreparation of this Agreement, and this Agreement therefore shall not be construed against any Party by virtue of its role as the drafterthereof.13.13Counterparts. This Agreement may be executed in counterparts by a single Party, each of which when takentogether shall constitute one and the same agreement, and may be executed through the use of facsimiles or .pdf documents.[Signature page follows] 53. In Witness Whereof, the Parties have executed this Agreement as of the date first set forth above. Ultragenyx Pharmaceutical Inc. Arcturus Therapeutics, Inc. By: /s/ Emil Kakkis By: /s/ Joseph E. PayneName: Emil Kakkis Name: Joseph E. PayneTitle: CEO Title: President & CEO Exhibit ListExhibit A – Arcturus PatentsExhibit B – Development TargetsExhibit C – Reserved TargetsExhibit D – Collaborative Development PlansExhibit E – Dispute ResolutionExhibit F – Ultragenyx Pipeline Targets55. Exhibit AArcturus Patents[…***…]***Confidential Treatment Requested 56. Exhibit BDevelopment Targets[…***…]***Confidential Treatment Requested 57. Exhibit CReserved Targets[…***…]***Confidential Treatment Requested 58. Exhibit DCollaborative Development Plans[…***…]***Confidential Treatment Requested 59. Exhibit EDispute Resolution1.The alternative dispute resolution shall be conducted as binding arbitration by a panel of […***…] persons experienced inthe pharmaceutical business in accordance with the JAMS Rules. Within […***…] days after initiation of an arbitration, each Partyshall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator within […***…] days oftheir appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shallbe appointed by the JAMS. The place of arbitration shall be San Francisco, California, and all proceedings and communications shallbe in English.2.Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversyis otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court havingjurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award.The arbitrators shall have no authority to award any damages excluded by Section 10.2. Each Party shall bear its own costs andexpenses and attorneys’ fees and an equal share of the arbitrators’ fees and any administrative fees of arbitration.3.Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator maydisclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall anarbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claimwould be barred by the applicable statute of limitations under the laws of the State of California.4.The Parties agree that, in the event of a good faith dispute over the nature or quality of performance under this Agreement,neither Party may unilaterally terminate this Agreement until final resolution of the dispute through arbitration or other judicialdetermination. The Parties further agree that any payments made pursuant to this Agreement pending resolution of the dispute shall berefunded if an arbitrator or court determines that such payments are not due.5.During the pendency of any arbitration the Parties shall continue to perform their respective obligations under thisAgreement. To the extent that such performance involves any matter which is the subject of the dispute, claim or controversy beingarbitrated, the Parties shall continue performance of such matter under this Agreement in such a manner as to the fullest extent possiblemaintain the status quo of the Parties with respect to the disputed matter. ***Confidential Treatment Requested 60. Exhibit FUltragenyx Pipeline Targets[…***…] ***Confidential Treatment Requested 61. ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 FIRST AMENDMENTTORESEARCH COLLABORATION AND LICENSE AGREEMENT This First Amendment to Research Collaboration and License Agreement (this “First Amendment”) is effective as ofOctober 17, 2017 (“First Amendment Effective Date”), by and between Ultragenyx Pharmaceutical Inc., a Delaware corporationhaving an address at 60 Leveroni Court, Novato, CA, 94949 (“Ultragenyx”) and Arcturus Therapeutics, Inc., a Delaware corporationhaving an address at 10628 Science Center Drive, Suite 200, San Diego, CA 92121 (“Arcturus”), and amends that certain ResearchCollaboration and License Agreement between the Parties, dated October 26, 2015 (the “Original Agreement”).The Parties, for their mutual benefit, now wish to amend the Original Agreement. Capitalized terms herein used which arenot herein defined shall have the respective meanings ascribed to them in the Original Agreement. All references to the term“Agreement” in the Original Agreement shall be deemed to include all of the terms and conditions of this First Amendment.NOW, THEREFORE, in consideration of good and valuable consideration the receipt and sufficiency of which is herebyacknowledged and of the mutual agreements made herein, the Parties agree as follows: 1.Amendments. The Parties agree to amend the Original Agreement as follows:(a)Extension of Reserved Target Exclusivity Period. The Parties desire to extend the duration of theReserved Target Exclusivity Period by one (1) year. Accordingly, the words “second (2nd)” in the second sentence of Section 3.3.3 ofthe Original Agreement are hereby deleted and replaced with the words “third (3rd)”. In consideration for this extension of theReserved Target Exclusivity Period, Ultragenyx will pay to Arcturus a one-time payment of […***…]* within fifteen (15) days after theFirst Amendment Effective Date.(b)Arcturus Patents. The following is hereby inserted at the end of Section 8.2.3: “Arcturus shall provideUltragenyx reasonable opportunity to review and comment on its filing and prosecution efforts of pending Arcturus Patents that relateto UNA Oligomer Chemistry and that have disclosures and/or claims which Cover a Product. Arcturus shall consider Ultragenyx’scomments in good faith.”2.Counterparts. This First Amendment may be executed in counterparts, each of which will be considered anoriginal, but all of which together will constitute the same instrument. Once signed, any reproduction of this First Amendment made byreliable means (e.g., photocopy, portable document format (PDF) or facsimile) is considered an original.3.No Other Amendments. Except as herein set forth, the Original Agreement has not been modified and, asamended by this First Amendment, remains in full force and effect. [Signatures on Following Page]***Confidential Treatment Requested Page 1 of 2 In Witness Whereof, the duly authorized representatives of the Parties have executed this First Amendment effective as ofthe First Amendment Effective Date. Ultragenyx Pharmaceutical Inc. Arcturus Therapeutics, Inc. By: /s/ Emil Kakkis By: /s/ Joseph E. PayneName: Emil Kakkis Name: Joseph E. PayneTitle: CEO Title: President & CEO Page 2 of 2 ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 SECOND AMENDMENTTORESEARCH COLLABORATION AND LICENSE AGREEMENTThis Second Amendment To Research Collaboration And License Agreement (the “Second Amendment”) is effectiveas of April 20, 2018 (“Second Amendment Effective Date”), by and between Ultragenyx Pharmaceutical Inc., a Delawarecorporation having an address at 60 Leveroni Court, Novato, CA, 94949 (“Ultragenyx”) and Arcturus Therapeutics, Inc., aDelaware corporation having an address at 10628 Science Center Drive, Suite 250, San Diego, CA 92121 (“Arcturus”), and amendsthat certain Research Collaboration and License Agreement between the Parties, dated October 26, 2015, as amended on October 17,2017 (the “License Agreement”).The Parties, for their mutual benefit, now wish to amend the License Agreement. Capitalized terms used herein which arenot defined shall have the respective meanings ascribed to them in the License Agreement. All references to the term “Agreement” inthe License Agreement shall be deemed to include all of the terms and conditions of this Second Amendment.NOW, THEREFORE, in consideration of good and valuable consideration the receipt and sufficiency of which is herebyacknowledged and of the mutual agreements made herein, the Parties hereby agree as follows: 1.Reserve Target Exclusivity(a)Section 3.3.3 of the License Agreement is hereby deleted in its entirety and replaced with the following:“3.3.3Reserved Target Exclusivity. With respect to each Reserved Target, during the ReservedTarget Exclusivity Period, Arcturus shall not conduct or participate in, or advise, assist or intentionally enable anyThird Party to conduct or participate in the preclinical or clinical development, manufacture or commercializationof (a) any product containing mRNA, including Modified mRNA, or UNA Oligomer with respect to such ReservedTarget, or (b) without offering Ultragenyx the right of first negotiation described in Section 3.3.3(a), any otherRNA Product or a product utilizing the LUNAR Delivery Technology with respect to such Reserved Target. Theforegoing restriction shall expire on the earlier of (i) […***…], or (ii) […***…] (such period for each ReservedTarget, the “Reserved Target Exclusivity Period”), provided, that the Reserved Target Exclusivity Period may beextended, upon written notice to Arcturus, on a Reserved Target-by-Reserved Target basis for up to […***…]additional […***…] year period(s) by paying the Exclusivity Extension Fee pursuant to Section 7.3. For clarity,Section 3.3.1 and not this Section 3.3.3 shall apply to any Reserved Target that becomes a Development Targetpursuant to Section 3.1.2 or Section 3.1.3.(a)Right of First Negotiation. On a Reserved Target-by-Reserved Target basis, during thecorresponding Reserved Target Exclusivity Period, Arcturus hereby grants Ultragenyx an exclusive rightof first negotiation to obtain an exclusive license to Exploit RNA Products or a product utilizing theLUNAR Delivery Technology with respect to such Reserved Target within the Territory (each, a“Reserved Target ROFN”) as further described herein. Arcturus shall provide written notice toUltragenyx promptly upon Arcturus’ decision to seek a***Confidential Treatment Requested partner for the research, development and/or commercialization of any RNA Product or a productutilizing the LUNAR Delivery Technology with respect to such Reserved Target (“Reserved TargetROFN Notice”). Ultragenyx shall have […***…] days from its receipt of the Reserved Target ROFNNotice to notify Arcturus if Ultragenyx desires to exercise its Reserved Target ROFN with respect tosuch Reserved Target and upon such notice from Ultragenyx, Arcturus and Ultragenyx will negotiatesuch rights in good faith for a period of […***…] days (the “Reserved Target ROFN NegotiationPeriod”). If, at the end of the Reserved Target ROFN Negotiation Period, Arcturus and Ultragenyx areunable to reach agreement on such terms, or if Ultragenyx does not notify Arcturus of its interest in suchReserved Target during such […***…] day period, Arcturus shall be free to grant a license or enter intoany other arrangement with a Third Party to Exploit RNA Products or a product utilizing the LUNARDelivery Technology with respect to such Reserved Target.” 2.Collaborative Development(a)Section 4.1 of the License Agreement is hereby deleted in its entirety and replaced with the following:“4.1Collaborative Development Plan. The JSC shall establish a Collaborative Development Plan withrespect to each Development Target (including the allocation of activities between the Parties), as well as thecorresponding Budget and timeline of activities. The Collaborative Development Plans and Budgets for theDevelopment Targets as of the Effective Date are attached hereto as Exhibit D. The Parties intend that theCollaborative Development Plan shall address activities prior to the first PCC Designation of the first Productcandidate with respect to such Target. Each Collaborative Development Plan shall set forth the Opt-In DataPackage. “Opt-In Data Package” means the data and materials to be provided by Arcturus to Ultragenyx for thepurpose of enabling Ultragenyx to make an informed decision regarding its option, which data and materials shallbe described in each Collaborative Development Plan, as may be updated from time to time by the JSC.” 3.Financial Terms(a)Option Exercise Fee. Section 7.6 of the License Agreement is hereby deleted in its entirety andreplaced with the following:“7.6Option Exercise Fee. For each Development Target for which Ultragenyx exercises its optionunder Section 5.2, within […***…] days after such option exercise, Ultragenyx shall pay Arcturus a one-time,non-refundable, non-creditable option exercise fee, in the amount of: (a) […***…] USD ($[…***…]) for each ofthe first […***…] Development Targets for which Ultragenyx exercises such option, if any; (b) […***…] USD($[…***…]) for the […***…] Development Target for which Ultragenyx exercises such option, if any; (c) […***…] USD ($[…***…]) for the […***…] Development Target for which Ultragenyx exercises such option, ifany; (d) […***…] USD ($[…***…]) for the […***…] through […***…] Development Target for whichUltragenyx exercises such option, if any. On a Development Target-by-Development Target basis, in the eventthat the Exploitation of Products with respect to such Development Target does not utilize (x) the LUNARNanoparticle Delivery Technology Covered by either an Arcturus Patent and/or a Product-Specific Patent, (y)***Confidential Treatment Requested 2 another RNA delivery technology Covered by an Arcturus Patent, or (z) a Nucleic Acid Chemistry TechnologyCovered by an Arcturus Patent […***…], then in each case the option exercise fee with respect to suchDevelopment Target shall be reduced by […***…] percent ([…***…]%). “Nucleic Acid Chemistry Technology”means technologies related to the chemical and enzymatic modification of nucleobases and does not includeimprovements related to codon-optimization, modification of the 5’ cap structure, use of alternative 5’ or 3’sequences, modification of the 5’ untranslated region or 3’ untranslated region, or variations in polyA tail sequenceor length.”(b)Milestones. Section 7.7.3 of the License Agreement is hereby deleted in its entirety and replaced withthe following:“7.7.3No Use of Arcturus Delivery Technology or Nucleic Acid Chemistry Technology. On aProduct-by-Product basis, in the event that the Exploitation of a Product in any given country within the Territorydoes not utilize (a) the LUNAR Nanoparticle Delivery Technology Covered by either an Arcturus Patent and/or aProduct-Specific Patent, (b) another RNA delivery technology Covered by an Arcturus Patent, or (c) a NucleicAcid Chemistry Technology Covered by an Arcturus Patent […***…], then in each case the correspondingmilestone payment(s) set forth in Section 7.7.1 and 7.7.2 payable in such country with respect to such Productshall be reduced by […***…] percent ([…***…]%).”(c)Royalties. Section 7.8.4(c) of the License Agreement is hereby deleted in its entirety and replaced withthe following:“(c)No Use of Arcturus Delivery Technology or Nucleic Acid Chemistry Technology thatresults in an increase in mRNA half-life. On a Product-by-Product basis, in the event that a Selling Party’s sale ofProduct does not utilize (a) the LUNAR Nanoparticle Delivery Technology Covered by any Arcturus Patent orProduct-Specific Patent, (b) another RNA delivery technology Covered by an Arcturus Patent, or (c) a NucleicAcid Chemistry Technology Covered by an Arcturus Patent […***…], then in each case the royalty rates set forthin Section 7.8.1 with respect to Net Sales for such Product in such country shall be reduced by […***…] percent([…***…]%) of what would otherwise have been due in the absence of such reduction.” 4.Miscellaneous(a)No Other Amendments. Except as herein set forth, the License Agreement has not been modified and,as amended by this Second Amendment, remains in full force and effect.(b)Entire Agreement. The License Agreement as modified by this Second Amendment is both a finalexpression of the Parties’ agreement and a complete and exclusive statement with respect to its subject matter. They supersede all priorand contemporaneous agreements and communications, whether written or oral, of the Parties regarding this subject matter.(c)Severability. If any one or more provisions of this Second Amendment is held to be invalid, illegal, orunenforceable, the affected provisions of this Agreement shall be curtailed and limited only to the extent necessary to bring it within theapplicable legal requirements and the validity, legality, and enforceability of the remaining provisions of this Agreement shall not inany way be affected or impaired thereby. ***Confidential Treatment Requested 3 (d)Counterparts. This Second Amendment may be executed in counterparts, each of which will beconsidered an original, but all of which together will constitute the same instrument. Once signed, any reproduction of this SecondAmendment made by reliable means (e.g., photocopy, portable document format (PDF) or facsimile) is considered an original.{Signatures On Following Page}4 In Witness Whereof, the duly authorized representatives of the Parties have executed this Second Amendment effective as ofthe Second Amendment Effective Date. Ultragenyx Pharmaceutical Inc. Arcturus Therapeutics, Inc. By: /s/ Thomas Kassberg By: /s/ Mark HerbertName: Thomas Kassberg Name: Mark HerbertTitle: Chief Business Officer Title: Interim President 5 Exhibit 4.11 ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 CFFT FINAL 5/16/17 May 16, 2017 Padmanabh Chivukula, PhDArcturus Therapeutics, Inc.10628 Science Center Dr., Suite 200 San Diego, CA 92121 Development Program:Nebulized LUNAR-formulated CFTR mRNAAmount of Award:$3,177,983Name of Awardee:Arcturus Therapeutics, Inc. (“Arcturus”) Dear Dr. Chivukula:We are pleased to inform you that Cystic Fibrosis Foundation Therapeutics, Inc. (“CFFT”) is hereby issuing an award for theDevelopment Program described in Exhibit A and disbursed in accordance with Exhibit B up to the amount indicated above (the “Award”). Arcturusshall be responsible for the payment of all of the remaining costs required to complete the Development Program and for costs associated withcontinuing CRE necessary to further develop and commercialize the Product. Each party’s obligations hereunder will commence and apply upon theexecution of this Agreement. The Award is in furtherance of CFFT’s charitable mission to cure and mitigate the effects of Cystic Fibrosis. CFFThas determined that without the Award, the Development Program will likely not occur or be substantially delayed. The Award is subject to thefollowing terms, conditions and policies of this Letter Agreement (“Agreement”):1.Disbursement of Award; CFFT Know-How; Reports.(a) The Award will be disbursed by CFFT to Arcturus in accordance with the Milestone Payment Schedule set forth in ExhibitB. Any CFFT funds not expended on the Development Program must be returned to CFFT, and upon such return, the amounts of such returnedfunds will not be included as part of the “Award” for purposes of calculating any royalties or other amounts owed by Arcturus to CFP1 pursuant toParagraph 2(b).(b) To the extent CFFT provides or makes available any information, expertise, know-how or other intellectual property related tocystic fibrosis or the treatment, prevention, or cure thereof (“CFFT Know-How”) to Arcturus, CFFT hereby grants to Arcturus a non-exclusive,transferable, sublicensable (through multiple tiers), worldwide right and license under all of CFFT’s rights in such CFFT Know-How to assist Arcturus to research, develop, commercialize, make, have made, use, sell, have sold, offer for sale, import, export and otherwise exploit the Product.(c) During the Development Program, Arcturus agrees to provide CFFT and the Project Advisory Group (“PAG”) specified belowwith a reasonably detailed, written report every […***…]* months, summarizing progress toward achieving the goals of the DevelopmentProgram. In addition, Arcturus shall prepare and deliver to CFFT a closing report within […***…] days after the completion of the DevelopmentProgram. Arcturus shall continue to report to CFFT […***…] through the PAG (as hereafter provided for) on the progress of its developmentactivities regarding the Product until the earlier of first commercial sale of the Product or such research efforts are abandoned by Arcturus, itsAffiliates and its sublicensees, solely as a result of scientific failure. Arcturus shall also provide CFFT with prompt notice of the closing of aDisposition Transaction and of any material adverse event affecting Arcturus.2.Royalties. In consideration of CFFT’s Award under this Agreement and CFFT‘s license and transfer of intellectual property andCFFT Know-How pursuant to this Agreement, Arcturus agrees to pay to CFFT royalties as follows:(a) Arcturus shall pay a one-time royalty to CFFT in an amount equal to the Royalty Cap. Such amount shall be paid in […***…]installments: the first within […***…] of the first anniversary of the first commercial sale of the Product (the “Initial Payment Date”); and theremaining installments on or before the […***…] and […***…] anniversaries of the Initial Payment Date.(b) In addition to the royalty payable pursuant to subparagraph (a) above, Arcturus shall pay to CFFT a one-time royalty equal tothe Actual Award upon each of the following occurrences: (i) within […***…] days after which aggregate Net Sales of the Product exceed $[…***…], and (ii) within […***…] days after which aggregate Net Sales of the Product exceed $[…***…].(c) In the event of a license, sale or other transfer of the Product or Arcturus Development Program Technology in the Field(excluding Net Sales) or a Change of Control Transaction (collectively, a “Disposition Transaction”), Arcturus shall pay to CFFT a payment equal to[…***…] percent ([…***…]%) of any license or purchase price payments actually received by Arcturus or its shareholders up to the amount of theRoyalty Cap (the “Disposition Payment”). Such payment shall be made within […***…] days after any transactions giving rise to suchpayment. Notwithstanding the payment of the Disposition Payment, the obligation to pay CFFT royalties specified in subparagraphs (a) and (b) shallsurvive (“Surviving Royalties”), provided that the royalty specified in subparagraph (a) shall be reduced by the Disposition Payment. Arcturus andany third party transferee in such Disposition Transaction shall be jointly and severally liable for the Surviving Royalties, and any DispositionTransaction shall be null and void unless the third party transferee in such transaction expressly assumes the joint and several obligation for theSurviving Royalties. * *** Confidential Treatment Requested2 3.Commercially Reasonable Efforts. Arcturus shall use Commercially Reasonable Efforts to conduct the Development Programduring the term of this Agreement. After the Development Program is completed, Arcturus or its licensee, sublicensee, assignee or successor shallexercise Commercially Reasonable Efforts to continue to develop the Product.4.Program Advisory Group (“PAG”).(a) Arcturus and CFFT shall form a PAG. The PAG serves the function of allowing CFFT to oversee the use of the Award fundsand to ensure that such funds are used solely in furtherance of CFFT’s tax-exempt mission, which is to promote the cure and/or mitigation of cysticfibrosis. The PAG shall terminate and cease to exist on the earlier of the commercialization of the Product or the termination of thisAgreement. The PAG shall consist of two (2) individuals appointed by Arcturus and two (2) individuals appointed by CFFT. One of suchindividuals from Arcturus and CFFT, respectively, shall be the principal liaison to the Development Program. A party may replace the individualsappointed by such party and designate a different individual as the principal liaison upon written notice to the other party.(b) The role of the PAG shall be to determine, discuss and propose amendments to the Development Program and budget, todetermine whether payment milestones have been achieved, and provide recommendations on other issues raised by either party relating to theDevelopment Program, provided that no change to the Development Program shall be made without the written agreement of both parties. Aftercompletion of the Development Program, the role of the PAG shall be solely to review annual reports pursuant to Section 1(c).(c) Each party shall be responsible for its own expenses in connection with attending and participating in the PAG.5.Interruption License. Arcturus hereby grants the Interruption License to CFFT, which Interruption License shall be effective asprovided below. Upon written notice from CFFT following an Interruption (the “Interruption Notice”), Arcturus shall elect, within […***…]* daysof such Interruption Notice, one of the following options by notice to CFFT:(a) Arcturus shall reasonably demonstrate, in the form of a written progress report, that an Interruption has not occurred, or thatArcturus, an Affiliate thereof, or a licensee or sublicensee of either of the foregoing is exercising Commercially Reasonable Efforts to research,develop or commercialize the Product;(b) Arcturus shall provide CFFT with notice within such […***…] day-period that Arcturus, an Affiliate thereof, or a licensee orsublicensee of either of the foregoing, has plans to resume Commercially Reasonable Efforts to develop or commercialize the Product and resumessuch Commercially Reasonable Efforts within the […***…] day period following such notice; * *** Confidential Treatment Requested3 (c) The Interruption License shall become effective, as set forth below; or(d) Arcturus may elect in lieu of the Interruption License, within […***…]* days of the Interruption Notice (but only if and whenthe Interruption License would otherwise have become effective), to pay to CFFT the greater of (A) […***…] times the Actual Award, and (B) […***…] of the Actual Award […***…] up to the time of such election (the “Interruption Payment”); and in the event of such election and payment,this Paragraph 5 shall otherwise no longer be applicable.The failure of the drug due to safety issues or lack of sufficient efficacy in the Field or regulatory restrictions shall not be considered an Interruption.If Arcturus has elected (a) or (b) above within […***…] days of the Interruption Notice, the Interruption Notice shall be deemedsatisfied and be of no further force or effect unless CFFT notifies Arcturus within […***…] days after receipt of Arcturus’s progress report under(a) above or provides notice under (b) above that CFFT disputes such progress report or notice, as the case may be. If CFFT provides timely noticeof its dispute, the parties shall resolve such dispute in accordance with the dispute resolution provision of this Agreement.If Arcturus has elected (a) or (b) above, CFFT has disputed such election, the resolution of the dispute is concluded and the finaloutcome of such dispute resolution is that such election was defective, Arcturus shall be deemed to have made the election specified in (c) above. IfArcturus has made (or is deemed to have made) the election specified in (c) above, the Interruption License shall be effective upon such election (ordeemed election) (such date, the “Interruption License Effective Date”). The Interruption License shall be an exclusive (even as to Arcturus),worldwide license to CFFT under the Arcturus Development Program Technology solely to the extent necessary to manufacture, have manufactured,license, use, sell, offer to sell, and support the Product in the Field. Arcturus shall not grant a security interest in any Arcturus Development ProgramTechnology that is or will be covered by the Interruption License. Arcturus shall deliver to CFFT, within […***…] days after the InterruptionLicense Effective Date, a copy of all materials and data in its possession or control constituting Arcturus Development Program Technology, to theextent required by CFFT to make, use, or sell the Product in the Field. For the avoidance of doubt, Arcturus shall retain all rights to the ArcturusDevelopment Program Technology for use outside of the Field. In the event that Arcturus assigns all of or certain of its rights and obligations todevelop and commercialize the Product at any time to a third party, such third party shall be subject to the obligations of the InterruptionLicense. The Interruption License shall be deemed to constitute intellectual property as defined in Section 365(n) of the U.S. Bankruptcy Code;provided, however, that nothing in this Agreement shall be deemed to constitute a present exercise of such rights and elections. Arcturus agrees thatCFFT, as a licensee of such rights, shall retain and may exercise all of its rights and elections under the U.S. Bankruptcy Code.If Arcturus elects (d) above and subsequently resumes Commercially Reasonable Efforts with respect to a Product, the royaltiesspecified in Paragraph 2 shall survive, but shall be reduced by the Interruption Payment. * *** Confidential Treatment Requested 4 6.Indemnification.(a) Arcturus shall indemnify, defend and hold harmless CFFT, its Affiliates, and their respective directors, officers, employees,consultants, committee members, volunteers, agents and representatives and their respective successors, heirs and assigns (each, an “CFFTIndemnitee”), from and against any and all claims, suits and demands of third parties and losses, liabilities, damages for personal injury, propertydamage or otherwise, costs, penalties, fines and expenses (including court costs and the reasonable fees of attorneys and other professionals) payableto such third parties arising out of, and relating to any such third party claims resulting from:(i)the conduct of the Development Program by Arcturus or its Affiliates or their respective directors, officers,employees, consultants, agents, representatives, licensees, sublicensees, subcontractors and/or investigators (each, an “Arcturus Party”) under thisAgreement and/or pursuant to one or more agreements between Arcturus and any Arcturus Party, or any actual or alleged violation of law resultingtherefrom;(ii)Arcturus’s or its Affiliates’ development, manufacture, or commercialization of the Product developed in whole orin part as a result of the Development Program;(iii)any claim of infringement or misappropriation with respect to the conduct of the Development Program by or onbehalf of Arcturus or its Affiliates, or Arcturus’s or its Affiliates’ third party licensees’ or sublicensees’ manufacture, use, sale, or import of theProduct developed in whole or in part as a result of the Development Program; and(iv)any tort claims of personal injury (including death) relating to or arising out of any such injury sustained as theresult of, or in connection with, the conduct of the Development Program by or on behalf of Arcturus or its Affiliates, or Arcturus’s or its Affiliates’third party licensees’ or sublicensees’ (other than CFFT or any of CFFT’s licensees or sublicensees) development, manufacture, or commercializationof the Product developed in whole or in part as a result of the Development Program; in each case except to the extent the claim, suit, demand,liability, damage, or loss results from the negligence, willful misconduct or other fault of a CFFT Indemnitee.(b) CFFT will indemnify, defend and hold harmless Arcturus, its Affiliates and their respective directors, officers, employees,consultants, agents and representatives and their respective successors, heirs and assigns (“Arcturus Indemnitees”) from and against any and all claims,suits and demands of third parties and losses, liabilities, damages for personal injury, property damage or otherwise, costs, penalties, fines andexpenses (including court costs and the reasonable fees of attorneys and other professionals) payable to such third parties arising out of, resultingfrom, or relating to any exercise of any rights under the Interruption License by or on behalf of CFFT, any designee, assignee or successor in interestthereto, or any licensee or5 sublicensee of any of the foregoing, except to the extent the claim, suit, demand, liability, damage or loss results from the negligence or willfulmisconduct of an Arcturus Indemnitee after the Interruption License Effective Date.(c) A party entitled to indemnification under this Paragraph 6 (the “Indemnified Party”) will promptly notify the other party (the“Indemnifying Party”) of any claims, suits, demands, losses, liabilities, damages costs, penalties, fines, or expenses subject to indemnification underthis Paragraph 6 of which it is made aware. The Indemnified Party will cooperate, and exert efforts to cause other Indemnified Parties to cooperate,in assisting the Indemnifying Party in presenting a defense, if requested to do so. The Indemnifying Party shall have sole control to select defensecounsel, direct the defense of any such complaint or claim, and the right to settle claims at the Indemnifying Party’s sole expense, provided that anysuch settlement does not incur non-indemnified liability for or admit fault by any Indemnified Party. In the event a claim or action is or may beasserted, the Indemnified Party shall have the right to select and to obtain representation by separate legal counsel. If the Indemnified Party exercisessuch right, all costs and expenses incurred for such separate counsel shall be borne by the Indemnified Party. No Indemnified Party shall settle orenter into any voluntary disposition of any matter subject to indemnification under this Paragraph 6 without the prior written consent of theIndemnifying Party, such consent not to be unreasonably withheld.7.Insurance. Arcturus shall maintain at its own expense, with a reputable insurance carrier, coverage for Arcturus, its Affiliates, andtheir respective employees written on a per occurrence basis commensurate with a reasonable assessment of the risks associated with the developmentefforts being conducted by Arcturus, the following policies: Commercial general liability insurance, including contractual liability as respects thisAgreement for bodily injury and property damage and, no later than the first use administration of the Product to a human subject, the Productliability and clinical trials liability.Maintenance of such insurance coverage will not relieve Arcturus of any responsibility under this Agreement for damage in excessof insurance limits or otherwise. On or prior to the effective date of this Agreement (“Agreement Effective Date”), Arcturus shall provide CFFTwith an insurance certificate from the insurer(s), broker(s) or agent(s) (hereinafter collectively the “Insurance Providers”) evidencing the applicableinsurance coverage. At its request, CFFT may review Arcturus’ s insurance coverage with relevant Arcturus personnel no more than […***…]* peryear.8.Intellectual Property Rights. All inventions, data, know-how, information, results, analyses, and other intellectual property rights resulting fromthe Development Program shall, as between the parties, be owned by Arcturus and the preparation, filing and maintenance of all patents resultingfrom the Development Program shall, as between the parties, be the sole responsibility, and under the sole control, of Arcturus. Subject toParagraph 5, CFFT hereby assigns and transfers to Arcturus all of CFFT’s right, title, and interest in and to all inventions and other intellectualproperty resulting from the Development Program, CFFT’s access to, or* *** Confidential Treatment Requested 6 knowledge or use of, any Arcturus Development Program Technology, the Product, or confidential or proprietary information of Arcturus, and allintellectual property rights related to any of the foregoing, free and clear of all liens, claims, and encumbrances.9.Termination of Agreement.(a) Either party may terminate this Agreement for cause, without prejudice to any other remedies available to the terminated partywith respect thereto, by providing the other party with written notice of such cause and intent to terminate; provided, however, that the other partyshall have thirty (30) days following the receipt of written notice to cure such cause. For this Paragraph 9, “cause” shall mean (i) a party’s materialbreach of its covenants or obligations under this Agreement, (ii) a bankruptcy or similar filing by a party or a proceeding under the applicablebankruptcy laws or under any dissolution or liquidation law or statute now or hereafter in effect and filed against such party or all or substantially allof its assets if such filing is not dismissed within […***…]* days after the date of its filing, or (iii) Arcturus’s material failure to achieve anyMilestone within […***…] days of its anticipated achievement day.(b) The following provisions shall survive the termination of this Agreement: Paragraphs 2, 5, 6, 7, 8, 9, 10, 11, and 12.10.Audits. At the request of CFFT, from time to time, Arcturus shall permit CFFT, upon reasonable notice, to audit and examine suchbooks and records of Arcturus as may be necessary for verifying Arcturus’s expenditures of the Award and the payment of royalties, if any, but nomore frequently than […***…]. All non-public information made available by Arcturus as part of any such audit, as part of any other reports(whether written or non-written), or otherwise under this Agreement (including, but not limited to, in connection with the PAG) shall be regarded asArcturus’s confidential information and CFFT hereby covenants that, except to the extent required by law (provided that CFFT promptly notifiesArcturus of such requirement and permits Arcturus to seek, and reasonably cooperates with Arcturus at Arcturus’s expense in seeking, a protectiveorder therefor or other confidential treatment thereof), it shall not use any such information for any purpose other than determining whether Arcturushas complied with its obligations hereunder (provided that CFFT may also use information provided through the PAG to further the purposes of thePAG hereunder) or, in the event of the grant of the Interruption License, the exercise thereof, or disclose any such information to any third party.11. Miscellaneous.(a) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State ofMaryland.(b) Dispute Resolution.* *** Confidential Treatment Requested 7 (i)In the event of any dispute, claim or controversy arising out of, relating to or in any way connected to theinterpretation of any provision of this Agreement, the performance of either party under this Agreement or any other matter under this Agreement,including any action in tort, contract or otherwise, at equity or law (a “Dispute”), either party may at any time provide the other party written noticespecifying the terms of such Dispute in reasonable detail. As soon as practicable after receipt of such notice, an officer of each party shall meet at amutually agreed upon time and location to engage in good faith discussions for the purpose of resolving such Dispute. If the Dispute is not resolvedwithin […***…]* days of such notice, either party may institute arbitration in accordance with (ii) below.(ii)In the event any Dispute is not resolved in accordance with (i) above, such Dispute shall be resolved by final andbinding arbitration. Whenever a party decides to institute arbitration proceedings, it shall give written notice to that effect to the otherparty. Arbitration shall be held in Washington, D.C., according to the then-current commercial arbitration rules of the Center for Public Resources(“CPR”), except to the extent such rules are inconsistent with this subparagraph. The arbitration will be conducted by one (1) independent, neutralarbitrator who shall be mutually acceptable to both parties, such acceptance not to be unreasonably withheld, and who shall be appointed inaccordance with CPR rules. If the parties are unable to mutually agree on such an arbitrator, then the arbitrator shall be appointed in accordance withCPR rules. Any arbitrator chosen hereunder shall have educational training and industry experience sufficient to demonstrate a reasonable level ofrelevant scientific, financial, medical and industry knowledge. Within […***…] days of the selection of the arbitrator, each party shall submit to thearbitrator a proposed resolution of the Dispute that is the subject of the arbitration (the “Proposals”). The arbitrator shall thereafter select one of theProposals so submitted as the resolution of the Dispute, but may not alter the terms of either Proposal and may not resolve the Dispute in a mannerother than by selection of one of the submitted Proposals. If a party fails to submit a Proposal, the arbitrator shall select the Proposal of the otherparty as the resolution of the Dispute. The arbitrator shall agree to render its opinion within […***…] days of the final arbitration hearing. Noarbitrator shall have the power to award punitive damages regardless of whether any such damages are contained in a Proposal, and such award isexpressly prohibited. The proceedings and decisions of the arbitrator shall be confidential, final and binding on all of the parties. Judgment on theaward so rendered may be entered in any court having jurisdiction thereof. The parties shall share the costs of arbitration according to the decision ofthe arbitrator. Nothing in this subparagraph will preclude either party from seeking equitable or injunctive relief, or interim or provisional relief,from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction, or any other form of permanent or interimequitable or injunctive relief, concerning a dispute either prior to or during any arbitration.(c) This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed to be an original, but allof which together shall constitute one and the same Agreement. Facsimile and other electronically scanned signatures shall have the same effect astheir originals. * *** Confidential Treatment Requested 8 (d) All communications between the parties with respect to any of the provisions of this Agreement will be sent to theaddresses set out below, or to such other addresses as may be designated by one party to the other by notice pursuant hereto, by prepaid, certified airmail (which shall be deemed received by the other party on the seventh (r) business day following deposit in the mail), or other electronic means ofcommunication (each of which shall be deemed received when transmitted), with confirmation by first class letter, postage pre-paid, given by theclose of business on or before the next following business day:if to CFFT, at:Preston W. Campbell, III, M.D.6931 Arlington Rd.Suite 200Bethesda, Maryland 20814Phone: 301-907-2689Fax: 301-907-2699Email: pwc@cff.org with a copy to:Schaller & Lubitz, PLLC6931 Arlington Rd., Suite 200Bethesda, Maryland 20814Attn: Kenneth I. Schaner, Esq.Phone: 240-482-2848Fax: 202-470-2241E-mail: ken@schanerlaw.com if to Arcturus, at:Padmanabh Chivukula, PhDArcturus Therapeutics, Inc.10628 Science Center Dr., Suite 200San Diego, CA 92121Phone: 858-900-2662Email: pad@arcturusrx.com With a copy to:Mark HerbertArcturus Therapeutics, Inc.10628 Science Center Dr., Suite 200San Diego, CA 92121Phone: 858-900-2663Email: mark@arcturusrx.com(e) The paragraph headings are for convenience only and will not be deemed to affect in any way the language of the provisions towhich they refer.9 (f) Arcturus will not, by amendment of its organizational or governing documents, or through reorganization, recapitalization,consolidation, merger, dissolution, sale, transfer or assignment of assets, issuance of securities, or any other voluntary action, avoid or seek to avoidthe observance or performance of any of the terms, provisions, covenants or agreements of this Agreement.(g) This Agreement may not be assigned by any party without the consent of the other party, except that either party may assignthis Agreement without such consent to an Affiliate of such party or in connection with the transfer, whether by sale of assets, merger or otherwise,of all or substantially all of the assets or business of such party to which this Agreement relates. Any assignment that is not in accordance with thissubparagraph 11(g) will be null and void ab initio.(h) Nothing herein contained shall be deemed to create an agency, joint venture, amalgamation, partnership or similar relationshipbetween CFFT and Arcturus. Notwithstanding any of the provisions of this Agreement, neither party to this Agreement shall at any time enter into,incur, or hold itself out to third parties as having authority to enter into or incur, on behalf of the other party, any commitment, expense, or liabilitywhatsoever, and all contracts, expenses and liabilities in connection with or relating to the obligations of each party under this Agreement shall bemade, paid, and undertaken exclusively by such party on its own behalf and not as an agent or representative of the other.(i) Each party shall submit any proposed press release or other public announcement, other than an academic, scholarly, orscientific publication, concerning the terms of this Agreement or this Award to the other party prior to its public release, except to the extent any suchrelease or announcement is required by law, rule, or regulation or the rules of any securities exchange. CFFT’ s support for the DevelopmentProgram shall be acknowledged in any publications by Arcturus related to the Development Program.(j) The parties agree that they intend to advance the body of general scientific knowledge of cystic fibrosis and its potentialtherapies and cures and the parties acknowledge that Arcturus intends to, as commercially and scientifically reasonable based on the results of theDevelopment Program, publish the results of the Development Program in a scientific peer-reviewed publication on a timely basis and provide CFFTwith copies of at least one public forum presentation annually.(k) In accordance with the U.S. Department of the Treasury Anti-Terrorist Financing Guidelines. Arcturus shall take reasonablesteps to ensure that the payments received from CFFT are not distributed to terrorists or their support networks or used for activities that supportterrorism or terrorist organizations and Arcturus shall periodically apprise CFFT of the steps taken to meet this goal. Arcturus certifies that it is incompliance with all laws, statutes and regulations restricting U.S. persons from dealing with any individuals, entities, or groups subject to Office ofForeign Assets Control (OFAC) sanctions.(l) Arcturus shall provide CFFT on the Agreement Effective Date with a description of its other sources of support and update thatdescription from time to time during the Development Program.10 (m) Arcturus shall provide CFFT with a copy of its public filings, such as annual reports, with governmental units from time totime during the Development Program.12.Definitions.(a) Unless otherwise defined in this letter, the following shall apply:▪“Actual Award” means the total amount of the Award actually paid to Arcturus.▪“Affiliate” shall mean, with respect to a party, any entity, which directly or indirectly controls, is controlled by, or is undercommon control with, such party. For these purposes, “control” shall refer to (a) the ownership, directly or indirectly, of at least fifty percent (50%)of the voting securities or other ownership interest of an entity; or (b) the possession, directly or indirectly, of the power to direct the management orpolicies of an entity, whether through the ownership of voting securities, by contract or otherwise.▪“Arcturus Development Program Technology” shall mean all technology, in whole or in part, discovered, developed, orcontrolled, by Arcturus or its Affiliates, as a result of the Development Program under this Agreement in the Field (solely for purposes of theInterruption License), including, without limitation, technology owned or controlled by Arcturus prior to Arcturus’s performance of theDevelopment Program under this Agreement to the extent necessary in the performance of the Development Program under this Agreement. Withoutlimitation, Arcturus Development Program Technology shall include data, technical information, source codes, know-how, inventions (whether ornot patented), trade secrets, laboratory notebooks, and processes and methods.▪“Change of Control Transaction” shall mean the consummation of a transaction, whether in a single transaction or in a seriesof related and substantially contemporaneous transactions, constituting (i) a merger, share exchange or other reorganization, (ii) the sale by one ormore stockholders of a majority of the voting power of Arcturus, or (iii) a sale of all or substantially all of the assets of Arcturus (or that portion ofits assets related to the subject matter of this Agreement), in which the stockholders of Arcturus immediately prior to such transaction do not own amajority of the voting power of the acquiring, surviving or successor entity, as the case may be; provided that a Change of Control shall not include abona fide financing transaction for the benefit of Arcturus (i.e., in which Arcturus raises capital for general working or business purposes) in whichvoting control of Arcturus transfers to one or more persons or entities who acquire shares of Arcturus, and the existing Arcturus shareholders receiveno consideration directly or indirectly in connection with the transaction.▪“Commercially Reasonable Efforts” or “CRE” shall mean the level of effort, expertise and resources that is substantially andmaterially consistent with industry standards for companies of similar size and financial resources to research, develop and commercialize theProduct, provided such research, development and commercialization is technically feasible, devoting the degree of attention and diligence to 11 such efforts that is substantially and materially consistent with industry standards for a product at a comparable stage in development, with similarmarket potential, and taking into account, without limitation, issues of safety and efficacy, proprietary position, the competitive environment, theregulatory environment, and other relevant scientific, technical and commercial factors, and for companies of similar size and financial resources.▪“Disposition Payment” shall have the meaning set forth in Paragraph 2(c).▪“Disposition Transaction” shall have the meaning set forth in Paragraph 2(c).▪“Field” shall mean the treatment of cystic fibrosis and other pulmonary diseases.▪“Interest” shall mean the prime rate applicable during the relevant time period, as published in the Wall Street Journal, plus[…***…]* percentage points.▪“Interruption” shall mean the cessation of Commercially Reasonable Efforts to develop a Product for more than […***…]consecutive days at any time before the first commercial sale of the Product. For clarity, delays resulting from events outside of Arcturus’sreasonable control (e.g., technical difficulties, shortages of supplies or materials, delays in preclinical or clinical studies or regulatory processes, etc.)will not be deemed cessation of Commercially Reasonable Efforts.▪“Interruption Payment” shall have the meaning set forth in Paragraph 5(d).▪“Net Sales” shall mean, for any period, the gross amount received for sales of the Product in the Field by Arcturus or anyArcturus Affiliate, sublicensee or transferee as applicable (a “Selling Person”), to a non-Affiliate of the Selling Person, less the following deductions,in each case to the extent specifically related to the Product and taken by the Selling Person or otherwise paid for or accrued by the Selling Person(“Permitted Deductions”):trade, cash, promotional and quantity discounts and inventory management fees paid to wholesalers;tariffs, duties, excises and taxes on sales (including sales or use taxes or value added taxes) to the extent imposed upon and paiddirectly with respect to such sales (and excluding national, sales or local taxes based on income);freight, insurance, packing costs and other transportation charges allocated to the sale;invoiced amounts that are written off as uncollectible in accordance with Selling Person’s accounting policies, consistentlyapplied;amounts repaid or credits taken by reason of damaged goods, rejections, defects, expired dating, recalls or returns or because ofretroactive price reductions, billing errors, or trial prescriptions;charge back payments, rebates and discounts granted to (i) managed healthcare organizations, (ii) federal, state or provincial orlocal governments or other agencies, (iii) purchasers and* *** Confidential Treatment Requested12 reimbursers or (iv) trade customers, including wholesalers and chain and pharmacy buying groups;discounts paid under state legislated or seller-sponsored discount prescription drug programs or reductions for coupon andvoucher programs; anddocumented custom duties actually paid by the Selling Person.Sales of the Product between or among Arcturus and its Affiliates and sublicensees for resale, or for use in the production or manufacture of theProduct, shall not be included within Net Sales; provided, however, that any subsequent sale of the Product (or any Product produced ormanufactured using the Product) by Arcturus or its Affiliate or sublicensee or transferee to another non-Affiliate third party shall be included withinNet Sales. Net Sales shall exclude any sale or other distribution for use in a clinical trial or other development activity, for compassionate or named-patient use or for test marketing.▪“Product” shall mean native or chemically modified ribonucleotide sequence of cystic fibrosis transmembrane conductanceregulator in any form, dosage or preparation in finished form, and any derivative or combination product, or any successor product containingArcturus Development Program Technology for use in the Field.▪“Royalty Cap” shall mean six (6) times the Actual Award.▪“Surviving Royalties” shall have the meaning set forth in Paragraph 2(c). 13 CFFT FINAL 5/26/17 We are pleased to make the Award described in this Agreement. Please indicate your agreement to the terms set forth in thisAgreement by signing below.Sincerely, Cystic Fibrosis Foundation Therapeutics, Inc. By:/s/ Preston Campbell, IIIName:Preston Campbell, III, M.D.Title:President and CEODate:5/25/17 Agreed: Arcturus Pharmaceuticals, Inc. By:/s/ Pad ChivukulaName:Dr. Pad ChivukulaTitle:CSO and COODate:May 26, 2017 Exhibit ADevelopment Program Plan and Budget — see Attachment A15 Exhibit BPayment Schedule[…***…]*Payments to be made by CFFT are due […***…] days upon receipt from Arcturus of the corresponding invoice and supporting documentationverifying occurrence of such milestone and PAG verification. * *** Confidential Treatment Requested 16 P.I. Samantha Murphy Attachment ARESEARCH PLAN […***…]** *** Confidential Treatment Requested17 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 18 P.I. Samantha Murphy RESEARCH PLAN […***…]*/s/ S. Murphy 3/20/17/s/ CSO 3/20/17* *** Confidential Treatment Requested 19 P.I. Samantha Murphy Timeline[…***…]** *** Confidential Treatment Requested 20 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 21 P.I. Samantha Murphy Significance[…***…]** *** Confidential Treatment Requested22 P.I. Samantha Murphy Experimental Design, Methods, and Milestones[…***…]** *** Confidential Treatment Requested23 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested24 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested25 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested26 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested27 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested28 P.I. Samantha Murphy Consultant Arrangements and Collaborations[…***…]** *** Confidential Treatment Requested29 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 30 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 31 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 32 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested33 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 34 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 35 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 36 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 37 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 38 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 39 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested40 P.I. Samantha Murphy […***…]** *** Confidential Treatment Requested 41 Exhibit 4.12***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 EXECUTION COPY DEVELOPMENT AND OPTION AGREEMENTby and betweenCUREVAC AGandARCTURUS THERAPEUTICS INC.dated1 January 2018 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Table of Contents ARTICLE 1 DEFINITIONS 4 ARTICLE 2 FEE AND GOVERNANCE 12 ARTICLE 3 THE PROGRAM 15 ARTICLE 4 RESERVED TARGETS 19 ARTICLE 5 CUREVAC LICENSE OPTIONS 22 ARTICLE 6 BACKGROUND TECHNOLOGY; OWNERSHIP OF PROGRAM TECHNOLOGY 24 ARTICLE 7 CONFIDENTIALITY 31 ARTICLE 8 WARRANTIES; LIMITATIONS OF LIABILITY; INDEMNIFICATION 34 ARTICLE 9 TERM AND TERMINATION 39 ARTICLE 10 MISCELLANEOUS 42 2 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC List of ExhibitsExhibit 1.3Patents and Know-How in the Arcturus Background TechnologyExhibit 1.5Arcturus LMD TechnologyExhibit 1.34Exclusive License AgreementExhibit 1.61Non-Exclusive License AgreementExhibit 3.1(a)Work PlanExhibit 4.2Target Reservation Request Form 3 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Development and Option AgreementTHIS DEVELOPMENT AND OPTION AGREEMENT (THIS "Agreement"), DATED AS OF 1 JANUARY 2018 (THE "EFFECTIVE DATE"), IS MADEBY AND BETWEEN CUREVAC AG, A GERMAN STOCK CORPORATION WITH OFFICES AT PAUL-EHRLICH-STRASSE 15, 72076 TÜBINGEN, GERMANY("CureVac"), AND ARCTURUS THERAPEUTICS INC., A DELAWARE CORPORATION WITH OFFICES AT 10628 SCIENCE CENTER DRIVE # 200, SAN DIEGO,CA 92121, USA ("Arcturus"). Each of CureVac and Arcturus may be referred to herein as a "Party" or together as the "Parties".WHEREAS, ARCTURUS HAS EXPERTISE AND INTELLECTUAL PROPERTY RELATING TO THE DEVELOPMENT OF LMD TECHNOLOGIES thatEMBODY OR INCORPORATE DELIVERY SYSTEMS (AND COMPONENTS THEREOF) FOR MOLECULAR THERAPEUTICS BASED ON OR INCORPORATING LIPID-ENABLEDAND UNLOCKED NUCLEOMONOMER AGENTS FOR DELIVERY OF NUCLEIC ACIDS AS SPECIFIED IN EXHIBIT 1.5, THE ARCTURUS LMD TECHNOLOGY (ASdefined below); andWHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); andWHEREAS, THE PARTIES BELIEVE THAT CERTAIN PROPRIETARY ARCTURUS LMD TECHNOLOGY (AS DEFINED BELOW) COULD BE USEFUL FORthe formulation and delivery of CureVac’s proprietary mRNA Constructs; andWHEREAS, THE PARTIES ARE INTERESTED IN EVALUATING THE DEVELOPMENT OF PRODUCTS INCORPORATING ARCTURUS LMD TECHNOLOGYAND CUREVAC TECHNOLOGY (AS DEFINED BELOW), AND ARCTURUS WISHES TO GRANT TO CUREVAC, AND CUREVAC WISHES TO OBTAIN, AN OPTION TOOBTAIN A LICENSE UNDER THE ARCTURUS LMD TECHNOLOGY TO DEVELOP AND COMMERCIALIZE ONE OR MORE SPECIFIC PRODUCTS OF CUREVAC, ALL INaccordance with the terms and conditions set forth below.WHEREAS, THE PARTIES INTEND TO ALSO CO-DEVELOP AN ORNITHINE TRANSCARBAMYLASE ("OTC") DEFICIENCY PRODUCT AND POSSIBLYOTHER PRODUCTS UNDER A CONTEMPORANEOUSLY EXECUTED CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT ("Co-DevelopmentAgreement").NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, AND FOR OTHER GOOD AND VALUABLEconsideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:ARTICLE 1DefinitionsThe following terms and their correlatives will have the following meanings:1.1"Affiliate" OF A PERSON OR ENTITY MEANS ANY OTHER ENTITY WHICH (DIRECTLY OR INDIRECTLY) IS CONTROLLED BY, CONTROLS ORIS UNDER COMMON CONTROL WITH SUCH PERSON OR ENTITY. FOR THE PURPOSES OF THIS DEFINITION, THE TERM "CONTROL" (INCLUDING, WITH CORRELATIVEMEANINGS, THE TERMS "CONTROLLED BY" AND "UNDER COMMON CONTROL WITH") AS USED WITH RESPECT TO AN ENTITY WILL MEAN (I) IN THE CASE OF ACORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF VOTING SECURITIES ENTITLED TO CAST AT LEAST FIFTY PERCENT (50%) OF THE VOTES IN THE ELECTIONOF DIRECTORS OR (II) IN THE CASE OF A NON-CORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF AT LEAST FIFTY PERCENT (50%) OF THE EQUITY INTERESTSWITH THE POWER TO DIRECT THE MANAGEMENT AND POLICIES OF SUCH ENTITY, PROVIDED THAT IF LOCAL LAW RESTRICTS FOREIGN OWNERSHIP, CONTROL WILLbe established by direct or indirect4 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC ownership of the maximum ownership percentage that may, under such local Law, be owned by foreign interests. […***…].1.2"Agreement" has the meaning set forth in the Preamble.1.3"ARCTURUS BACKGROUND TECHNOLOGY" MEANS ANY AND ALL LMD TECHNOLOGY FOR DELIVERING RNA THERAPEUTICS THATIS CONTROLLED BY ARCTURUS OR ANY OF ITS AFFILIATES AS OF THE EFFECTIVE DATE OR DURING THE TERM, INCLUDING THE LUNAR™ PLATFORM, BUTEXCLUDING ANY ARCTURUS PROGRAM KNOW-HOW AND ARCTURUS PROGRAM PATENTS, AND NECESSARY OR USEFUL FOR THE RESEARCH, DEVELOPMENT,MANUFACTURING AND COMMERCIALIZATION OF LICENSED PRODUCTS. THE PATENTS AND KNOW-HOW COMPRISED IN THE ARCTURUS BACKGROUNDTechnology as of the Effective Date are listed in Exhibit 1.3 attached hereto.1.4"Arcturus Indemnitees" has the meaning set forth in Section 8.7(b).1.5“ARCTURUS LIPID-MEDIATED DELIVERY TECHNOLOGY” OR “ARCTURUS LMD TECHNOLOGY” MEANS ARCTURUS BACKGROUNDTechnology and Arcturus Program Technology.1.6"Arcturus Program Know-How" MEANS ANY AND ALL PROGRAM KNOW-HOW OWNED BY ARCTURUS IN ACCORDANCE WITHSection 6.2, including Arcturus’ right and interest in any Jointly-Owned Program Know-How (as defined in Section 6.2(c)).1.7"ARCTURUS PROGRAM PATENTS" MEANS ANY AND ALL PATENTS THAT CLAIM ANY OF THE ARCTURUS PROGRAM KNOW-HOW,including Arcturus’ right and interest in any Jointly-Owned Program Patents (as defined in Section 6.2(c)).1.8"Arcturus Program Technology" means the Arcturus Program Know-How and the Arcturus Program Patents. 1.9"Arcturus Work Plan Leader" has the meaning set forth in Section 2.2.1.10"BUSINESS DAY" MEANS A DAY OTHER THAN A SATURDAY, SUNDAY, OR BANK OR OTHER PUBLIC HOLIDAY IN SAN DIEGO,California, USA or Tübingen, Germany or Boston, Massachusetts, USA.1.11"Calendar Quarter" MEANS THE RESPECTIVE PERIODS OF THREE (3) CONSECUTIVE CALENDAR MONTHS ENDING ON MARCH 31,June 30, September 30 and December 31.1.12“Change of Control” SHALL BE DEEMED TO HAVE OCCURRED IF DURING THE TERM (I) ANY PERSON OR ENTITY IS OR BECOMESTHE "BENEFICIAL OWNER", DIRECTLY OR INDIRECTLY, OF SHARES OF CAPITAL STOCK OR OTHER INTERESTS (INCLUDING PARTNERSHIP INTERESTS) OF ARCTURUS’THEN OUTSTANDING AND NORMALLY ENTITLED (WITHOUT REGARD TO THE OCCURRENCE OF ANY CONTINGENCY) TO VOTE IN THE ELECTION OF THE DIRECTORS,MANAGERS OR SIMILAR SUPERVISORY POSITIONS OF ARCTURUS REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTAL VOTING POWER OF ALLOUTSTANDING CLASSES OF VOTING STOCK OF ARCTURUS OR HAS THE POWER, DIRECTLY OR INDIRECTLY, TO ELECT A MAJORITY OF THE MEMBERS OF ARCTURUS’BOARD OF DIRECTORS, OR SIMILAR GOVERNING BODY; OR (II) ARCTURUS ENTERS INTO A MERGER, CONSOLIDATION OR SIMILAR TRANSACTION WITH ANOTHERPERSON OR ENTITY; OR (III) ARCTURUS SELLS OR TRANSFERS TO ANY THIRD PARTY, IN ONE (1) OR MORE RELATED TRANSACTIONS, PROPERTIES OR ASSETSrepresenting all or substantially all of Arcturus’ consolidated total assets to which this***Confidential Treatment Requested5 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC AGREEMENT RELATES; OR (IV) THE HOLDERS OF CAPITAL STOCK OF ARCTURUS APPROVE A PLAN OR PROPOSAL FOR THE LIQUIDATION OR DISSOLUTION OFArcturus; provided, however, that(a)SUBSECTIONS (I) TO (III) SHALL ONLY APPLY IF THE PERSON OR ENTITY OR THIRD PARTY ACQUIRING CONTROL IS (I) APHARMACEUTICAL COMPANY WHICH HAS EXPERIENCE IN DEVELOPING AND/OR COMMERCIALIZING PHARMACEUTICAL PRODUCTS (i.e., IS A STRATEGIC, NOTFINANCIAL INVESTOR OR PARTNER) OR (II) A COMPETITOR, I.E., A COMPANY IN THE BUSINESS OF MRNA DEVELOPMENT, MANUFACTURING AND/ORcommercialization and(b)A BONA FIDE FINANCING TRANSACTION WITH THIRD PARTIES THAT DOES NOT OTHERWISE MEET THE REQUIREMENTS OFsubsection (a) shall not constitute a Change of Control.1.13"Co-Development Agreement" has the meaning set forth in the Preamble.1.14"Concurrent Reserved List Limits" has the meaning set forth in Section 4.2(d).1.15"CONFIDENTIAL INFORMATION" OF A PARTY MEANS ALL PROPRIETARY KNOW-HOW, UNPUBLISHED PATENT APPLICATIONS ANDOTHER NON-PUBLIC INFORMATION AND DATA OF A FINANCIAL, COMMERCIAL, BUSINESS, OPERATIONAL, SCIENTIFIC OR TECHNICAL NATURE OF SUCH PARTY THATIS DISCLOSED BY OR ON BEHALF OF SUCH PARTY OR ANY OF ITS AFFILIATES OR OTHERWISE MADE AVAILABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES,WHETHER MADE AVAILABLE ORALLY, IN WRITING OR IN ELECTRONIC FORM IN CONNECTION WITH THIS AGREEMENT, INCLUDING INFORMATION COMPRISING ORRELATING TO CONCEPTS, DISCOVERIES, INVENTIONS, DATA, DESIGNS OR FORMULAE IN CONNECTION WITH THIS AGREEMENT. IN ADDITION, ANY NON-PUBLICINFORMATION RELATED TO THIS AGREEMENT OR THE PRODUCTS HEREUNDER AND DISCLOSED BY A PARTY TO THE OTHER PARTY (OR THEIR RESPECTIVEAFFILIATES) UNDER THE CONFIDENTIALITY AGREEMENT WILL BE DEEMED SUCH PARTY’S CONFIDENTIAL INFORMATION HEREUNDER. PROGRAM KNOW-HOWWILL BE CONSIDERED THE CONFIDENTIAL INFORMATION OF THE PARTY (OR PARTIES) OWNING SUCH PROGRAM KNOW-HOW, AND JOINTLY-OWNEDProgram Know-How will be considered Confidential Information of both Parties.1.16“CONFIDENTIALITY AGREEMENT” MEANS THAT CERTAIN CONFIDENTIALITY AGREEMENT BETWEEN THE PARTIES DATED AS OF […***…].1.17"CONTRACT YEAR" WILL REFER TO THE TWELVE (12)-MONTH PERIOD BEGINNING WITH THE EFFECTIVE DATE AND ON EACHanniversary thereafter.1.18"Control" OR "Controlled" MEANS, WITH RESPECT TO TECHNOLOGY, THAT A PARTY OWNS OR HAS A LICENSE TO USE ANDpractice the respective Patent or Know-How without violating the terms of any agreement with any Third Party.1.19"CTA" means a clinical trial application.1.20"CUREVAC BACKGROUND TECHNOLOGY" MEANS ANY AND ALL MRNA TECHNOLOGY THAT IS CONTROLLED BY CUREVAC ORANY OF ITS AFFILIATES AS OF THE EFFECTIVE DATE OR DURING THE TERM, BUT EXCLUDING ANY CUREVAC PROGRAM KNOW-HOW AND CUREVACProgram Patents, and necessary or useful for the research, development, manufacturing and commercialization of a Licensed Product.1.21"CureVac Indemnitees" has the meaning set forth in Section 8.7(a). ***Confidential Treatment Requested6 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC 1.22"CUREVAC PROGRAM KNOW-HOW" MEANS ANY AND ALL PROGRAM KNOW-HOW OWNED BY CUREVAC IN ACCORDANCEwith Section 6.2, including CureVac’s right and interest in any Jointly-Owned Program Know-How.1.23"CUREVAC PROGRAM PATENTS" MEANS ANY AND ALL PATENTS THAT CLAIM ANY OF THE CUREVAC PROGRAM KNOW-HOW,including CureVac’s right and interest in any Jointly-Owned Program Patents (as defined in Section 6.2(c)).1.24"CureVac Program Technology" means the CureVac Program Know-How and the CureVac Program Patents. 1.25"CUREVAC TECHNOLOGY" MEANS, COLLECTIVELY, CUREVAC BACKGROUND TECHNOLOGY AND CUREVAC PROGRAMTechnology.1.26"CureVac Work Plan Leader" has the meaning set forth in Section 2.2.1.27“Diligent Efforts” means, with respect to the efforts to be expended by each Party with respect to any activity setFORTH IN THE WORK PLAN, ACTIVE AND SUSTAINED EFFORTS AS SUCH PARTY WOULD NORMALLY USE TO ACCOMPLISH A SIMILAR TASK OR OBLIGATION UNDERSIMILAR CIRCUMSTANCES TO CONDUCT THE APPLICABLE ACTIVITY, OR TO ATTEMPT TO ACHIEVE THE APPLICABLE REQUIREMENT OR GOAL, IN A REASONABLEMANNER THAT IS CONSISTENT WITH THE ACHIEVEMENT OF THE GOALS SET FORTH IN THE WORK PLAN (INCLUDING THE LEVEL OF FTE FUNDING AND BUDGETfor out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement.1.28"Disclosing Party" has the meaning set forth in Section 7.1.1.29"DNA SEQUENCE" MEANS ANY SEQUENCE OF DNA INTENDED TO BE INSERTED OR COPIED INTO A DNA TARGET AS SETforth on Exhibit 4.2.1.30"DNA TARGET" MEANS A DEFINED CODING AND/OR NON-CODING SEQUENCE (E.G., A GENE) WITHIN THE GENOME OF Ahuman or animal cell or virus and/or variants thereof.1.31"DNA EDITING PROTEIN" MEANS A TARGET ENCODED BY AN MRNA THAT UPON DELIVERY TO A CELL IS INTENDED TO GENEEdit a human, animal or virus coding or non-coding sequence within the genome of the human or animal cell or virus.1.32"DUAL IMPROVEMENT TECHNOLOGY" IS AN IMPROVEMENT TO BOTH THE ARCTURUS BACKGROUND TECHNOLOGY AND THECureVac Background Technology at the time such Improvement is discovered, created, conceived, developed or reduced to practice.1.33"Effective Date" has the meaning set forth in the Preamble.1.34"ESCROW AGENT" SHALL BE THE AGENT SELECTED BY ARCTURUS IN GOOD FAITH TO MAINTAIN IN CONFIDENCE THE RESTRICTEDTarget List and to respond to CureVac's Target Notices on behalf of Arcturus. 1.35"EXCLUSIVE LICENSE AGREEMENT" MEANS AN EXCLUSIVE LICENSE AGREEMENT IN THE FORM ATTACHED HERETO AS Exhibit1.34.1.36"Executive Officers" has the meaning set forth in Section 2.3(d). 7 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC 1.37"FORMULATED PRODUCT(S)" MEANS A PRODUCT (INCLUDING LICENSED PRODUCTS) MANUFACTURED BY OR ON BEHALF OFARCTURUS IN ACCORDANCE WITH THE WORK PLAN THAT INCORPORATE CUREVAC MRNA CONSTRUCTS FORMULATED WITH ARCTURUS LIPID-MEDIATEDDelivery Technology.1.38"FTE" MEANS A FULL-TIME PERSON, OR MORE THAN ONE PERSON WORKING THE EQUIVALENT OF A FULL-TIME PERSON, WHERE"full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel areWORKING, CONSISTING OF A TOTAL OF 1880 HOURS PER YEAR OF WORK DIRECTED TO THE WORK PLAN OR WORK PURSUANT TO THIS AGREEMENT. ANYPERSON WHO DEVOTES LESS THAN 1880 HOURS PER YEAR ON THE APPLICABLE ACTIVITIES SHALL BE TREATED AS AN FTE ON A PRO-RATED BASIS, BASEDUPON THE ACTUAL NUMBER OF HOURS WORKED BY SUCH PERSON ON SUCH ACTIVITIES, DIVIDED BY 1880. ANY PERSON WHO DEVOTES MORE THAN1880 HOURS PER YEAR ON THE APPLICABLE ACTIVITIES SHALL BE TREATED AS ONE (1) FTE, I.E., IN NO EVENT SHALL ONE PERSON BE COUNTED AS MORETHAN ONE FTE. FTE ACTIVITIES SHALL INCLUDE THE PERFORMANCE OF THE WORK AND SCIENTIFIC MANAGEMENT OVERSIGHT, AS REASONABLY REQUIRED,BUT, FOR CLARITY, EXCLUDE (I) THE WORK OF GENERAL CORPORATE OR ADMINISTRATIVE PERSONNEL, OVERHEAD (INCLUDING FACILITIES COSTS), INSURANCESand similar costs and (ii) the manufacture of Formulated Product for research and clinical activities as set forth in the Work Plan. 1.39"FTE COSTS" MEANS AN INITIAL RATE OF […***…] DOLLARS ($[…***…]) PER FTE PER YEAR, WHICH SHALL APPLYTHROUGH […***…]. THEREAFTER, THE FTE RATE SHALL BE CHANGED BI-ANNUALLY AT THE END OF EACH SECOND CALENDAR YEAR TO REFLECT ANYPERCENTAGE INCREASE OR DECREASE (AS THE CASE MAY BE) IN THE CONSUMER PRICE INDEX IN THE U.S. (INDEX FOR ALL ITEMS) (“CPI”) (BASED ONTHE CHANGE IN THE CPI FROM THE MOST RECENT INDEX AVAILABLE AS OF THE EFFECTIVE DATE TO THE MOST RECENT INDEX AVAILABLE AS OF THE DATE OFthe calculation of such revised FTE Cost rate).1.40"GENE EDIT" MEANS TO CORRECT, MODIFY, INSERT, DELETE, ACTIVATE, INACTIVATE OR REPAIR A CODING OR NON-CODINGsequence within the genome of a human or animal cell or virus and "Gene Editing" has the corresponding meaning.1.41"Guide RNA" MEANS A MODIFIED OR UNMODIFIED RNA SEQUENCE INTENDED TO DIRECT A DNA EDITING PROTEIN TO Aspecific DNA Target.1.42"Improvement" MEANS, WITH RESPECT TO THE ARCTURUS BACKGROUND TECHNOLOGY AND/OR THE CUREVAC BACKGROUNDTechnology any change, modification, variation or revision of such Technology, whether patentable, copyrightable or not.1.43"Initial Term" has the meaning set forth in Section 9.1(a).1.44"IND" means an investigational new drug.1.45"Indemnified Party" has the meaning set forth in Section 8.7(c).1.46"Indemnification Claim Notice" has the meaning set forth in Section 8.7(c).1.47“IP Subcommittee” has the meaning set forth in Section 6.4.1.48"JDC" has the meaning set forth in Section 2.3(a).1.49"JDC Deadlock" has the meaning set forth in Section 2.3(d).1.50"Jointly-Owned Program Patents" has the meaning set forth in Section 6.2(c).***Confidential Treatment Requested8 1.51"Know-How" MEANS ALL COMMERCIAL, TECHNICAL, SCIENTIFIC AND OTHER KNOW-HOW AND INFORMATION, TRADE SECRETS,KNOWLEDGE, TECHNOLOGY, METHODS, PROCESSES, PRACTICES, FORMULAE, INSTRUCTIONS, SKILLS, TECHNIQUES, PROCEDURES, EXPERIENCES, IDEAS,TECHNICAL ASSISTANCE, DESIGNS, DRAWINGS, ASSEMBLY PROCEDURES, COMPUTER PROGRAMS, SPECIFICATIONS, DATA AND RESULTS (INCLUDING BIOLOGICAL,CHEMICAL, PHARMACOLOGICAL, TOXICOLOGICAL, PHARMACEUTICAL, PHYSICAL AND ANALYTICAL, PRECLINICAL, CLINICAL, SAFETY, MANUFACTURING ANDQUALITY CONTROL DATA AND KNOW-HOW, INCLUDING STUDY DESIGNS AND PROTOCOLS), IN ALL CASES, PROVIDED IT IS CONFIDENTIAL AND PROPRIETARY, ANDregardless of whether patentable, in written, electronic or any other form now known or hereafter developed.1.52"Law" or "Laws" MEANS ALL LAWS, STATUTES, RULES, REGULATIONS, ORDERS, JUDGMENTS, OR ORDINANCES HAVING THE EFFECTof law of any federal, national, multinational, state, provincial, county, city or other political subdivision.1.53"License Agreement" means an Exclusive License Agreement or Non-Exclusive License Agreement.1.54"LICENSED PRODUCT" MEANS […***…] PRODUCT COMPRISED OF (I) LIPID-MEDIATED DELIVERY SYSTEMS, WHICH ARECOVERED BY ARCTURUS LIPID-MEDIATED DELIVERY TECHNOLOGY; AND CONTAINING (II) ONE OR MORE MRNA CONSTRUCTS AS THE ACTIVEPHARMACEUTICAL INGREDIENT(S) INTENDED TO EXPRESS A TARGET WHICH IS SUBJECT TO A LICENSE AGREEMENT. IN CASE OF TWO OR MORE MRNACONSTRUCTS THESE CONSTRUCTS MAY BE CONTAINED IN THE SAME OR SEPARATE LMDS. LICENSED PRODUCT INCLUDES MRNA-LMD PRODUCTS WHICHARE ADMINISTERED JOINTLY OR SEPARATELY, AND MRNA-LMD PRODUCTS WHICH ARE ADMINISTERED SIMULTANEOUSLY OR SEQUENTIALLY AS ACOMBINATION MEDICINAL PRODUCT OR TREATMENT. FOR GENE EDITING PURPOSES, A LICENSED PRODUCT MAY CONTAIN OTHER RNA(S) (I.E., GUIDERNA(S)) AND/OR DNA SEQUENCE(S) WHICH CAN BE DELIVERED TOGETHER OR SEPARATELY (COMBINED IN ONE LMD OR DELIVERED IN SEPARATELMDs), in addition to the one or more mRNA Constructs intended to express the DNA Editing Protein.1.55"LMD TECHNOLOGY" means TECHNOLOGY THAT CLAIMS, EMBODIES OR INCORPORATES DELIVERY SYSTEMS (ANDcomponents thereof) based on or incorporating lipid-mediated delivery (LMD) systems.1.56"Losses" has the meaning set forth in Section 8.7(a).1.57"Material Transfer Agreement" MEANS THE MATERIAL TRANSFER AGREEMENT DATED […***…], AS AMENDED FROM TIMEto time.1.58"Materials" MEANS ANY TANGIBLE CHEMICAL OR BIOLOGICAL MATERIAL, INCLUDING ANY COMPOUNDS, LMD, DNA, RNA(INCLUDING MRNA), CLONES, CELLS, AND ANY EXPRESSION PRODUCT, PROGENY, DERIVATIVE OR OTHER IMPROVEMENT THERETO, ALONG WITH ANYtangible chemical or biological material embodying any Know-How, Controlled by a Party.1.59"Maximum Target" has the meaning set forth in Section 4.2(d).1.60"mRNA Construct" MEANS ANY MRNA CONSTRUCT FOR THE EXPRESSION OF A PROTEIN, INCLUDING THE SEQUENCE OF SUCHCONSTRUCT (WHICH POTENTIALLY COMPRISES ONE (1) OR MORE OF A CAP, 5’ UTR, THE ASSOCIATED OPEN READING FRAME, 3’UTR AND A POLY A TAIL),the chemistry of natural and non-natural nucleic acids, and other chemical modifications associated with such construct.***Confidential Treatment Requested9 1.61"MRNA TECHNOLOGY" MEANS TECHNOLOGY THAT CLAIMS, EMBODIES OR INCORPORATES EXPRESSION SYSTEMS (ANDcomponents thereof), based on or incorporating mRNA.1.62"NON-EXCLUSIVE LICENSE AGREEMENT" MEANS A FORM NON-EXCLUSIVE LICENSE AGREEMENT TO BE NEGOTIATED BY THEPARTIES WITHIN […***…] DAYS FOLLOWING THE EXECUTION OF THIS AGREEMENT, ON THE BASIS OF THE TERMS AND CONDITIONS OF THE EXCLUSIVELICENSE AGREEMENT AND TAKING INTO ACCOUNT THE SPECIFIC CIRCUMSTANCES OF A NON-EXCLUSIVE LICENSING OPTION EXERCISE BY CUREVAC. SUCHform Non-Exclusive License Agreement shall be incorporated by reference into this Agreement as Exhibit 1.61.1.63"NON-RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSEDPRODUCT WITH AN INCIDENCE OF EQUAL TO OR MORE THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THEfirst IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.1.64"Option" has the meaning set forth in Section 5.11.65"Option Exercise Fee" has the meaning set forth in Section 5.3.1.66"Option Notice" has the meaning set forth in Section 5.1.1.67"Option Period" has the meaning set forth in Section 5.1.1.68"Patent(s)" MEANS AN (I) ISSUED PATENT, A PATENT APPLICATION, AND A FUTURE PATENT ISSUED FROM ANY SUCH PATENTAPPLICATION, (II) A FUTURE PATENT ISSUED FROM A PATENT APPLICATION FILED IN ANY COUNTRY WORLDWIDE WHICH CLAIMS PRIORITY FROM A PATENT ORPATENT APPLICATION OF (I), AND (III) ANY ADDITIONS, DIVISIONS, CONTINUATIONS, CONTINUATIONS-IN-PART, INVENTION CERTIFICATES, SUBSTITUTIONS,REISSUES, REEXAMINATIONS, EXTENSIONS, REGISTRATIONS, UTILITY MODELS, SUPPLEMENTARY PROTECTION CERTIFICATES AND RENEWALS BASED ON ANYPATENT OR PATENT APPLICATION UNDER (I) OR (II), BUT NOT INCLUDING ANY RIGHTS THAT GIVE RISE TO REGULATORY EXCLUSIVITY PERIODS (OTHER THANsupplementary protection certificates, which will be treated as "Patents" hereunder).1.69"PRE-EXISTING RESTRICTIONS" MEANS, WITH RESPECT TO A TARGET ON THE RESTRICTED TARGET LIST PURSUANT TO SECTION4.2(A), THAT ARCTURUS OR ITS AFFILIATES HAVE GRANTED TO A THIRD PARTY WITH RESPECT TO A TARGET A NON-EXCLUSIVE, CO-EXCLUSIVE OR ANEXCLUSIVE LICENSE OR OPTION PURSUANT TO A bona fide WRITTEN AGREEMENT THAT IS IN EFFECT AT THE TIME OF A REQUEST BY CUREVAC PURSUANT TOSection 4.2.1.70"Program" MEANS EACH PROGRAM OF ACTIVITIES USING ARCTURUS LMD TECHNOLOGY AND CUREVAC TECHNOLOGY FORTHE DEVELOPMENT OF A LICENSED PRODUCT INCORPORATING CUREVAC’S MRNA CONSTRUCTS THAT THE PARTIES ENGAGE IN UNDER THIS AGREEMENTpursuant to the Work Plan. "Programs" shall mean several or all of these programs, as the context admits.1.71"PROGRAM IMPROVEMENT TECHNOLOGY" MEANS PROGRAM TECHNOLOGY WHICH CONSTITUTES AN IMPROVEMENT TO EITHERPARTY'S OR BOTH PARTIES' TECHNOLOGY AT THE TIME SUCH IMPROVEMENT IS DISCOVERED, CREATED, CONCEIVED, DEVELOPED OR REDUCED TO PRACTICE.PROGRAM IMPROVEMENT TECHNOLOGY WILL BE EITHER SOLE IMPROVEMENT TECHNOLOGY OF A PARTY OR DUAL IMPROVEMENT TECHNOLOGY OF THEPARTIES. FOR THE AVOIDANCE OF DOUBT, PROGRAM IMPROVEMENT TECHNOLOGY WILL NOT INCLUDE ANY IMPROVEMENT ARISING OUT OF A PARTY'Sindependent research and development efforts or collaborations with Third Parties, in each case conducted outside***Confidential Treatment Requested10 of the Program; provided that such Improvement IS NOT DEVELOPED BASED UPON, USING OR WITH REFERENCE TO THE TECHNOLOGY, CONFIDENTIALInformation or Material of the other Party.1.72"PROGRAM KNOW-HOW" MEANS ALL KNOW-HOW, INCLUDING KNOW-HOW EMBODIED IN MATERIALS, CREATED,CONCEIVED, DEVELOPED OR REDUCED TO PRACTICE IN CONNECTION WITH ACTIVITIES PERFORMED PURSUANT TO THE WORK PLAN OR USING FORMULATEDPRODUCT AS SET FORTH IN THE WORK PLAN UNDER THIS AGREEMENT (WHETHER SOLELY BY OR ON BEHALF OF ONE PARTY OR JOINTLY BY OR ON BEHALF OFthe Parties).1.73"PROGRAM TECHNOLOGY" MEANS ALL PROGRAM KNOW-HOW AND ALL PATENTS DIRECTED TO OR DISCLOSING SUCH PROGRAMKnow-How.1.74"RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSED PRODUCTWITH AN INCIDENCE OF LESS THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THE FIRST IND OR CTAapplication will be filed will determine whether a Target is a Rare Disease Target.1.75"Receiving Party" has the meaning set forth in Section 7.1.1.76"Records" has the meaning set forth in Section 3.3(a).1.77"Reserved Target" MEANS A TARGET WITH RESPECT TO WHICH CUREVAC SHALL HAVE DELIVERED TO THE ESCROW AGENT ATARGET NOTICE AND IN RESPONSE THERETO THE ESCROW AGENT SHALL HAVE DELIVERED TO CUREVAC A TARGET RESPONSE NOTICE UNDER SECTION4.2(C)(I) FOR SUCH TARGET TO BECOME A RESERVED TARGET. A RESERVED TARGET THAT IS REPLACED PURSUANT TO SECTION 4.2 WILL NO LONGER BEdeemed a Reserved Target.1.78"Reserved Target List" means collectively, the list of all Reserved Targets.1.79"Restricted Target List" has the meaning set forth in Section 4.2(a).1.80"SOLE IMPROVEMENT TECHNOLOGY" MEANS, WITHOUT REGARD TO INVENTORSHIP, AN IMPROVEMENT TO ONE PARTY’STECHNOLOGY THAT IS NOT ALSO AN IMPROVEMENT TO THE OTHER PARTY’S TECHNOLOGY AT THE TIME SUCH IMPROVEMENT IS DISCOVERED, CREATED,CONCEIVED, DEVELOPED OR REDUCED TO PRACTICE. FOR CLARITY, SOLE IMPROVEMENT TECHNOLOGY OF A PARTY SHALL EXIST ONLY WITH RESPECT TOACTIVITIES OF THE PARTIES PURSUANT TO THIS AGREEMENT (I.E., NOT TO ANY IMPROVEMENT OR TECHNOLOGY INDEPENDENTLY DEVELOPED BY ONE PARTYwithout the use of Technology of the respective other Party).1.81"Solely-Owned Program Know-How" has the meaning set forth in Section 6.2(c).1.82"Solely-Owned Program Patents" has the meaning set forth in Section 6.2(c).1.83"Solely-Owned Program Technology" has the meaning set forth in Section 6.2(c).1.84"Target" means(a)UP TO N PROTEINS (N = […***…]), INCLUDING ALL POSSIBLE COMBINATIONS RESULTING FROM REMOVING ONE OFTHE N PROTEINS (N MINUS […***…] PROTEINS), TOGETHER WITH ALL VARIANTS OF SUCH PROTEINS, INCLUDING THE WILD TYPE, NATURALLY OCCURRINGVARIANTS, ENGINEERED VARIANTS WHEREIN MODIFICATIONS TO THE NATIVE AMINO ACID SEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATEDversions, derivatives or fragments), and species homologs, orthologs thereof; provided,***Confidential Treatment Requested11 HOWEVER, THAT ANY SUCH NATURALLY OCCURRING VARIANT, ENGINEERED VARIANT, OR SPECIES HOMOLOG OR ORTHOLOG POSSESSES SUBSTANTIALLY SIMILARbiological activity to the naturally occurring protein; and(b)[…***…] ANTIGENS OF A GIVEN PATHOGEN, INCLUDING […***…] ANTIGEN AND ANY COMBINATION OF SUCHANTIGENS, TOGETHER WITH ALL VARIANTS OF SUCH ANTIGENS, INCLUDING THE WILD TYPE, NATURALLY OCCURRING VARIANTS, ENGINEERED VARIANTS WHEREINMODIFICATIONS TO THE NATIVE AMINO ACID SEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATED VERSIONS, DERIVATIVES OR FRAGMENTS), ANDSPECIES HOMOLOGS, ORTHOLOGS THEREOF PROVIDED, HOWEVER, THAT ANY SUCH NATURALLY OCCURRING VARIANT, ENGINEERED VARIANT, OR SPECIEShomolog or ortholog possesses substantially similar biological activity to the naturally occurring antigen; and(c)A DNA TARGET, PROVIDED, HOWEVER, THAT THE FIRST DNA TARGET FOR EACH DNA EDITING PROTEIN WOULD NOTCOUNT AS A TARGET. EACH SUBSEQUENT DNA TARGET FOR THIS DNA EDITING PROTEIN WOULD COUNT AS A TARGET. FOR CLARITY, A DNA EDITINGProtein would be defined as a Target under (a) above and count as a single Target.IF A GIVEN PROTEIN, e.g., AN ANTIBODY OR ENZYME, COMPRISES SEPARATED AMINO ACID CHAINS WHICH MIGHT BE DELIVERED BYseparated mRNA Constructs, such protein would be defined as one Target.1.85"Target Notice" has the meaning set forth in Section 4.2(b).1.86"Target Reservation Request Form" has the meaning set forth in Section 4.2 (b).1.87"Target Response Notice" has the meaning set forth in Section 4.2(c).1.88"Technology" means collectively Patents and Know-How.1.89"Term" has the meaning set forth in Section 9.1.1.90"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.1.91"Third Party Claims" has the meaning set forth in Section 8.7(a).1.92"Work Plan" has the meaning set forth in Section 3.1(a).1.93"Work Plan Leaders" has the meaning set forth in Section 2.2.1.94"Work" means the activities to be performed by Arcturus pursuant to the Work Plan.ARTICLE 2Fee and Governance2.1One-Time Fee. IN CONSIDERATION FOR THE RIGHTS GRANTED BY ARCTURUS TO CUREVAC HEREUNDER, INCLUDING THE RIGHT TOreserve Targets in accordance with Section 4 below, within ***Confidential Treatment Requested12 thirty (30) days as of the Effective Date, CureVac shall pay to Arcturus a one-time non-refundable fee of […***…].2.2Management. MANAGEMENT OF THE PROGRAM ACTIVITIES WILL BE UNDER THE RESPONSIBILITY OF THE INDIVIDUALDESIGNATED IN WRITING WITHIN […***…] DAYS OF THE EFFECTIVE DATE FOR ARCTURUS (THE "ARCTURUS WORK PLAN LEADER") AND OF THEINDIVIDUAL DESIGNATED IN WRITING WITHIN […***…] DAYS OF THE EFFECTIVE DATE FOR CUREVAC (THE "CUREVAC WORK PLAN LEADER", ANDTOGETHER WITH THE ARCTURUS WORK PLAN LEADER, THE "Work Plan Leaders"). EACH WORK PLAN LEADER WILL BE THE PRIMARY POINT OF CONTACTfor the other Party on all matters relating to the Program activities.2.3Joint Development Committee.(a)Development Committee. AS SOON AS PRACTICABLE, THE PARTIES WILL ESTABLISH A JOINT DEVELOPMENTCOMMITTEE, COMPRISED OF UP TO […***…] REPRESENTATIVES OF CUREVAC AND UP TO […***…] REPRESENTATIVES OF ARCTURUS (THE"JDC"). ONE SUCH REPRESENTATIVE FROM EACH PARTY WILL BE SUCH PARTY’S WORK PLAN LEADER. EACH PARTY MAY REPLACE ITS WORKPLAN LEADER AND OTHER JDC REPRESENTATIVES AT ANY TIME UPON WRITTEN NOTICE TO THE OTHER PARTY, PROVIDED, HOWEVER, THAT EACHPARTY SHALL USE DILIGENT EFFORTS TO ENSURE CONTINUITY ON THE JDC. WITH THE CONSENT OF THE OTHER PARTY (WHICH WILL NOT BEUNREASONABLY WITHHELD, DELAYED OR CONDITIONED), EACH PARTY MAY INVITE NON-VOTING EMPLOYEES AND CONSULTANTS TO ATTENDMEETINGS OF THE JDC, SUBJECT TO THEIR AGREEMENT TO BE BOUND TO THE SAME EXTENT AS A PERMITTED SUBCONTRACTOR UNDER SECTION3.4.(b)Meetings. WHILE IN EXISTENCE, THE JDC WILL MEET EACH CALENDAR QUARTER BY TELECONFERENCE,VIDEOCONFERENCE OR IN PERSON AND, AT A MINIMUM, ONE OF SUCH MEETINGS EACH CALENDAR YEAR WILL BE IN PERSON (WHICH IN-PERSON MEETING WILL BE HELD ON AN ALTERNATING BASIS IN TUBINGEN, GERMANY AND IN SAN DIEGO, CA), UNLESS AGREED OTHERWISEBY THE JDC REPRESENTATIVES. THE JDC WILL HAVE A QUORUM IF AT LEAST ONE (1) REPRESENTATIVE OF EACH PARTY IS PRESENT ORPARTICIPATING. EACH PARTY WILL BE RESPONSIBLE FOR ALL OF ITS OWN EXPENSES OF PARTICIPATING IN THE COMMITTEE MEETINGS. THEPARTIES WILL ENDEAVOR TO SCHEDULE MEETINGS OF THE JDC AT LEAST […***…] MONTHS IN ADVANCE. THE PARTIES WILL ALTERNATE INPREPARING THE MEETING AGENDA, AND THE PARTY THAT WAS RESPONSIBLE FOR PREPARING THE MEETING AGENDA WILL PREPARE AND CIRCULATEFOR REVIEW AND APPROVAL BY THE OTHER PARTY WRITTEN MINUTES OF SUCH MEETING WITHIN […***…] DAYS AFTER SUCH MEETING. THEParties will agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JDC.(c)Responsibilities. THE JDC WILL OVERSEE AND SUPERVISE THE OVERALL PERFORMANCE OF THE WORK PLAN,PREPARE AND MAINTAIN MINUTES OF MEETINGS AND PROVIDE A FORUM FOR DISCUSSION OF THE PROGRAMS AND WORK PLANS, AND WITHINsuch scope will: (i)REVIEW THE EFFORTS OF THE PARTIES AND ALLOCATE THOSE RESOURCES UNDER THE WORK PLAN COMMITTED BY THEParties hereunder; (ii)REVISE AND APPROVE ANY REVISIONS TO THE WORK PLAN REGULARLY AND IN ANY EVENT AT LEAST […***…]days before the start of each Calendar Quarter during the Term; (iii)coordinate the activities of the Parties under the Work Plan and oversee the implementation thereof;***Confidential Treatment Requested13 (iv)FORM SUCH OTHER COMMITTEES AS THE JDC MAY DEEM APPROPRIATE, PROVIDED THAT SUCH COMMITTEES MAYmake recommendations to the JDC but may not be delegated JDC decision-making authority; (v)ADDRESS SUCH OTHER MATTERS RELATING TO THE ACTIVITIES OF THE PARTIES UNDER THIS AGREEMENT AS EITHERPARTY MAY BRING BEFORE THE JDC, INCLUDING ANY MATTERS THAT ARE DELEGATED TO THE JDC TO DECIDE ASprovided in this Agreement, such as CureVac's consent to subcontractors; and (vi)attempt to resolve any disputes on an informal basis.(d)Decision-making. THE JDC WILL MAKE DECISIONS ONLY BY UNANIMOUS CONSENT, WITH EACH PARTY HAVINGONLY ONE VOTE BY ITS REPRESENTATIVES (REGARDLESS OF THE NUMBER OF EACH SUCH REPRESENTATIVES PRESENT FROM A PARTY). IN THEEVENT THE JDC IS UNABLE TO REACH AGREEMENT AS TO A MATTER WITHIN THE JDC’S JURISDICTION (SUCH EVENT, A "JDC DEADLOCK"),UPON THE WRITTEN REQUEST OF A PARTY, SUCH MATTER WILL BE REFERRED TO A SENIOR EXECUTIVE OF EACH PARTY (THE "ExecutiveOfficers") (OR THEIR DESIGNEES, WHICH DESIGNEE IS REQUIRED TO HAVE DECISION-MAKING AUTHORITY ON BEHALF OF SUCH PARTY), WHOWILL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH JDC DEADLOCK BY NEGOTIATION AND CONSULTATION FOR A […***…]-DAY PERIODFOLLOWING RECEIPT OF SUCH WRITTEN NOTICE. IF, DESPITE SUCH EFFORTS, AGREEMENT ON A PARTICULAR MATTER CANNOT BE REACHED BY THEEXECUTIVE OFFICERS WITHIN SUCH […***…]-DAY PERIOD, THEN CUREVAC SHALL HAVE THE FINAL DECISION-MAKING AUTHORITY WITHrespect to such JDC Deadlock, provided, however, that (i)CUREVAC'S FINAL DECISION-MAKING AUTHORITY SHALL NOT APPLY IF CUREVAC PROPOSES (A) TO AMEND THEWORK PLAN TO MATERIALLY ACCELERATE, DECELERATE, INCREASE, ADD OR REMOVE PLANNED ACTIVITIES TO BEPERFORMED BY ARCTURUS THEREUNDER, INCLUDING SIGNIFICANTLY REDUCING OR ELIMINATING ARCTURUS’RESPONSIBILITIES FOR AN ACTIVITY THEREUNDER; (B) TO MATERIALLY CHANGE THE ARCTURUS RESOURCES REQUIRED TOPERFORM THE WORK PLAN ACTIVITIES, INCLUDING THE TIMING OF SUCH RESOURCES; OR (C) TO REQUIRE ALLOCATIONBY ARCTURUS OF FTES MATERIALLY GREATER THAN OR LESS THAN THOSE PROVIDED FOR IN THE WORK PLAN. FORPURPOSES OF THIS SECTION 2.3(D), THE TERM "MATERIALLY" SHALL MEAN, IN RELATION TO RESOURCES AND FTEAMOUNTS SET FORTH IN THE WORK PLAN, […***…] PERCENT ([…***…]%) OR MORE OF THE RELEVANTresource or FTE, and (ii)IN THE EVENT THAT CUREVAC DESIRES WORK WITH RESPECT TO WHICH IT DOES NOT HAVE FINAL DECISION-MAKING AUTHORITY PURSUANT TO SECTION 2.3(D)(I) OR IS OTHERWISE MATERIALLY OUTSIDE OF THE WORK PLANWITH RESPECT TO A PROGRAM, ARCTURUS SHALL CONSIDER ANY PROPOSAL FROM CUREVAC IN WRITING IN GOODfaith.(e)Limits on JDC Authority. EACH PARTY WILL RETAIN THE RIGHTS, POWERS AND DISCRETION GRANTED TO IT UNDERTHIS AGREEMENT AND NO SUCH RIGHTS, POWERS, OR DISCRETION WILL BE DELEGATED TO OR VESTED IN THE JDC UNLESS SUCH DELEGATION ORVESTING OF RIGHTS IS EXPRESSLY PROVIDED FOR IN THIS AGREEMENT OR THE PARTIES EXPRESSLY SO AGREE IN WRITING. THE JDC WILL NOTHAVE THE POWER TO AMEND, MODIFY OR WAIVE COMPLIANCE WITH THIS AGREEMENT (OTHER THAN AS EXPRESSLY PERMITTEDHEREUNDER). NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE JDC WILL NOT HAVE THE POWER TO REQUIRE ANY PARTY TOperform***Confidential Treatment Requested14 ANY ACTIVITIES THAT ARE MATERIALLY GREATER IN SCOPE OR MORE COSTLY THAN THOSE PROVIDED FOR IN THE WORK PLAN THEN IN EFFECT ORotherwise under this Agreement.ARTICLE 3The Program3.1PROGRAMS GENERALLY. THE PARTIES WILL JOINTLY CONDUCT EACH PROGRAM. IT IS INTENDED THAT ARCTURUS WILL BERESPONSIBLE FOR THE LIPID CHEMISTRY AND LMD FORMULATION USING THE ARCTURUS LMD TECHNOLOGY, AND FOR CHARACTERIZATION WORK,CUREVAC WILL BE RESPONSIBLE FOR MRNA CONSTRUCT DEVELOPMENT, AND ARCTURUS AND CUREVAC WILL EACH UNDERTAKE PRECLINICAL STUDIES ASallocated in each Work Plan.(a)Work Plan Preparation. THE DEVELOPMENT ACTIVITIES TO BE UNDERTAKEN BY THE PARTIES WITH RESPECT TO APROGRAM WILL BE DESCRIBED IN A DETAILED WRITTEN DEVELOPMENT PLAN (THE "WORK PLAN"). THE INITIAL WORK PLAN INCLUDES Adescription OF ACTIVITIES UNDERTAKEN BY THE PARTIES UNDER THE MATERIAL TRANSFER AGREEMENTS AND PRIOR TO THE EXECUTION OF THISAGREEMENT. THE INITIAL WORK PLAN, WHICH WILL COVER THE INITIAL TWELVE (12) MONTHS OF THE PROGRAM, IS ATTACHED HERETO ASExhibit 3.1(a).(b)Work Plan Contents. EACH WORK PLAN WILL INCLUDE (I) ALL ACTIVITIES TO BE UNDERTAKEN BY EACH PARTYWITH RESPECT TO A PROGRAM, INCLUDING ARCTURUS’ MANUFACTURE AND SUPPLY OF FORMULATED PRODUCT, (II) A DETAILED BUDGET OF theFTE ACTIVITIES, FTE COSTS AND OUT-OF-POCKET COSTS TO BE INCURRED BY ARCTURUS FOR WHICH CUREVAC WILL REIMBURSE ARCTURUS INCONNECTION WITH THE PERFORMANCE OF THE WORK, (III) THE MATERIALS TO BE PROVIDED BY ONE PARTY TO THE OTHER, (IV) FORECASTINGAND ORDERING PROCEDURES FOR THE FORMULATED PRODUCT, AND (V) THE PROJECTED TIMELINES FOR COMPLETION OF ALL ACTIVITIES SET FORTHTHEREIN. THE GOAL OF EACH WORK PLAN AND RELATED PROGRAM WILL BE TO EVALUATE AND PRODUCE TAILORED ARCTURUS LMDTECHNOLOGY FORMULATIONS THAT ARE SAFE AND EFFICACIOUS FOR DELIVERY OF CUREVAC’S MRNA CONSTRUCTS AND TO ADVANCE THEDEVELOPMENT OF SUCH MRNA-LMD FORMULATIONS AGAINST A TARGET. EACH PROGRAM WILL INCLUDE ACTIVITIES WITH RESPECT TORESERVED TARGETS BUT MAY ALSO INCLUDE ACTIVITIES WITH RESPECT TO TARGETS THAT ARE NOT ON THE CUREVAC RESERVED TARGET LIST.As definedIN THE WORK PLAN, CUREVAC WILL PERFORM UP TO […***…] PIVOTAL ANIMAL STUDIES TO MAKE A GO/ NO GO DECISION FOR A PARTICULARLMD composition for a given Target.(c)Amendments to the Work Plan. EACH WORK PLAN WILL BE REVIEWED AS NECESSARY AT EACH MEETING OF THEJDC, AND AT ANY OTHER TIME UPON THE REQUEST OF EITHER PARTY, AND WILL BE MODIFIED IN ACCORDANCE WITH THE OBJECTIVES DEFINEDIN SECTION 3.1(B) AND AS APPROPRIATE AT THE DIRECTION OF THE JDC TO REFLECT MATERIAL SCIENTIFIC (AND OTHER) DEVELOPMENTS. EACHCALENDAR QUARTER, THE JDC WILL UPDATE THE WORK PLANS TO COVER THE SUBSEQUENT SIX (6) MONTHS OF THE PROGRAM IN DETAIL. INALL EVENTS, THE WORK PLAN WILL BE CONSISTENT AND NOT CONFLICT WITH THE TERMS OF THIS AGREEMENT, AND IN THE EVENT OF ANYconflict between the Work Plan and this Agreement, the terms of this Agreement will control.(d)Obligations Under the Work Plans. DURING THE TERM, EACH PARTY WILL USE DILIGENT EFFORTS ANDPERFORM THE WORK IN A PROFESSIONAL MANNER AND IN ACCORDANCE WITH THE WORK PLAN, AND EACH PARTY WILL USE DILIGENT EFFORTSto meet the objectives and***Confidential Treatment Requested15 TIMELINES SET FORTH THEREIN. IT IS UNDERSTOOD THAT THE ACTIVITIES AND GOALS OF THE WORK PLAN ARE EXPERIMENTAL AND THAT SUCCESSFULRESULTS CANNOT BE GUARANTEED. THE PARTIES WILL OTHERWISE CONDUCT THE PROGRAM ON THE TERMS AND CONDITIONS SET FORTH IN THISAGREEMENT AND IN ACCORDANCE WITH THE WORK PLAN. EACH PARTY WILL COOPERATE WITH AND PROVIDE REASONABLY REQUESTED NON-FINANCIAL SUPPORT TO THE OTHER PARTY IN SUCH OTHER PARTY’S PERFORMANCE OF ITS RESPONSIBILITIES UNDER THE WORK PLAN. THE PARTIESWILL USE DILIGENT EFFORTS TO DEVELOP LMD FORMULATIONS WHICH DO NOT INFRINGE THIRD PARTY TECHNOLOGY. IN ADDITION TO THEREPORTING OBLIGATIONS SET FORTH IN SECTION 3.3(B), EACH PARTY WILL KEEP THE OTHER PARTY REASONABLY INFORMED OF SUCH PARTY’SACTIVITIES UNDER THE PROGRAM AND WILL REASONABLY CONSULT WITH SUCH OTHER PARTY AND CONSIDER SUCH OTHER PARTY’S COMMENTSand advice with respect to all material decisions relating to such activities in good faith.(e)Supply of Formulated Products. ARCTURUS WILL USE DILIGENT EFFORTS TO MANUFACTURE AND SUPPLYCureVac with Formulated Product as set forth in the Work Plan.(f)Technology Transfer to Contract Manufacturing Organization. FOLLOWING CUREVAC’S EXERCISE OF ANOPTION AND ENTRY INTO A LICENSE AGREEMENT, ARCTURUS WILL USE DILIGENT EFFORTS TO TRANSFER THE FORMULATION PROCESS FOR THELICENSED PRODUCTS THAT ARE INTENDED TO EXPRESS THE INTENDED TARGET TO A REPUTABLE AND COMPETENT GMP MANUFACTURER SELECTEDBY CUREVAC AND REASONABLY ACCEPTABLE TO ARCTURUS. ARCTURUS AND CUREVAC WILL AGREE ON A TECHNOLOGY TRANSFER OR OTHERMEANS TO SUPPORT AVAILABILITY OF LICENSED PRODUCTS AS PART OF THE LICENSE AGREEMENT. SPECIFICALLY, THE LICENSE AGREEMENTWILL PROVIDE THAT UPON WRITTEN REQUEST BY CUREVAC, ARCTURUS WILL CONDUCT A TECHNOLOGY TRANSFER TO CUREVAC AND/OR ITSDESIGNEE(S). SUCH DESIGNEE(S) MAY BE AN AFFILIATE, SUBLICENSEE OR THIRD PARTY MANUFACTURERS, AND WHICH THIRD PARTYMANUFACTURERS MAY ALSO BE A BACKUP MANUFACTURER OR A SECOND MANUFACTURER OF LICENSED PRODUCTS AS REQUIRED FOR THEapplicable transferee of the then-current process. 3.2FTEs.(a)Generally. ARCTURUS WILL PERFORM THE WORK UNDER THE WORK PLAN, AND AS PART OF THE PROGRAM CUREVACWILL FUND UP TO […***…] SCIENTISTS PER YEAR AT ARCTURUS TO PERFORM THE WORK AS DEFINED AND IN ACCORDANCE WITH THE WORKPLAN FOR A PERIOD OF UP TO […***…] MONTHS AT THE FTE COSTS. THE PARTIES MAY AGREE TO EXTEND THE PERFORMANCE OF WORK BYArcturus for an additional year.(b)FTEs. ARCTURUS SHALL ENSURE THAT THOSE INDIVIDUALS SELECTED BY ARCTURUS TO PERFORM THE WORK ANDSERVICES AND OTHERWISE SUPPORT THE ACTIVITIES TO BE UNDERTAKEN BY ARCTURUS PURSUANT TO THE WORK PLAN WILL HAVE SUFFICIENTSCIENTIFIC EXPERTISE, SKILL, TRAINING AND COMPETENCY TO PERFORM THE PROPOSED WORK AND HAVE SIMILAR SKILLS, TRAINING ANDCOMPETENCY AS THOSE FTES EMPLOYED BY ARCTURUS TO PERFORM WORK ON ARCTURUS’ INTERNAL PROGRAMS AND FOR THIRD PARTIES. INTHE EVENT THAT CUREVAC HAS CONCERNS REGARDING THE SELECTION OF AN INDIVIDUAL TO PERFORM THE WORK OR OTHER ACTIVITIES UNDERthis Agreement, the Parties will discuss such concerns in good faith.(c)Reimbursement. CUREVAC WILL REIMBURSE ARCTURUS ON A CALENDAR QUARTER-BY-CALENDAR QUARTER BASISfor FTE Costs incurred to conduct the Work Plan in accordance with the Work Plan or pre-agreed by the JDC. Arcturus willSEND A REASONABLY DETAILED INVOICE TO CUREVAC NO LATER THAN […***…] DAYS AFTER THE END OF EACH CALENDAR QUARTER, WHICHinvoice shall include a summary of all activities by the***Confidential Treatment Requested16 NAME OF EACH FTE, NUMBER OF HOURS DEVOTED BY EACH SUCH FTE, AND ACTIVITY PERFORMED BY EACH SUCH FTE DURING SUCHCALENDAR QUARTER. CUREVAC AGREES TO PAY UNDISPUTED AMOUNTS IN EACH SUCH INVOICE WITHIN […***…] DAYS OF CUREVAC’SRECEIPT THEREOF. ANY AMOUNTS SUBJECT TO DISPUTE SHALL BE REVIEWED BY THE JSC AND IF NOT RESOLVED WITHIN […***…] DAYS,shall be subject to Section 10.1.3.3Program Records, Reports; Materials and Formulated Product.(a)Records. EACH PARTY WILL MAINTAIN, OR CAUSE TO BE MAINTAINED, RECORDS OF ITS ACTIVITIES UNDER A PROGRAMIN SUFFICIENT DETAIL AND IN GOOD SCIENTIFIC MANNER APPROPRIATE FOR SCIENTIFIC, PATENT AND REGULATORY PURPOSES, WHICH WILLproperly reflect all work included in a Program ("Records") FOR A PERIOD OF AT LEAST […***…] YEARS AFTER THE CREATION OF SUCHRECORDS. CUREVAC WILL HAVE THE RIGHT TO RECEIVE A COPY OF ANY SUCH RECORDS MAINTAINED BY ARCTURUS WHICH SHALL BE USEDSUBJECT TO THE TERMS OF THIS AGREEMENT. ARCTURUS WILL HAVE THE RIGHT TO RECEIVE A COPY OF ANY SUCH RECORDS MAINTAINED BYCUREVAC TO THE EXTENT SUCH RECORDS ARE REQUIRED BY ARCTURUS TO EXERCISE ITS RIGHTS OR PERFORM ITS OBLIGATIONS UNDER THISAgreement.(b)Program Reports. DURING THE TERM, EACH PARTY WILL FURNISH TO THE JDC A SUMMARY WRITTEN REPORTWITHIN […***…] DAYS AFTER THE END OF EACH CALENDAR QUARTER DESCRIBING ITS PROGRESS UNDER THE WORK PLAN AS PART OF APROGRAM. WITHIN […***…] DAYS FOLLOWING EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT, EACH PARTY WILL FURNISH TO THEJDC A FINAL SUMMARY WRITTEN REPORT. ARCTURUS SHALL PROMPTLY PROVIDE ALL ADDITIONAL INFORMATION WITH RESPECT TO THE ARCTURUSLMD TECHNOLOGY THAT IS REASONABLY REQUESTED BY CUREVAC AND NECESSARY OR USEFUL FOR CUREVAC TO DETERMINE WHETHER TOexercise an Option with respect to any Target.(c)Materials and Formulated Product. (i)THE PARTIES WILL, DURING THE TERM, FURNISH TO EACH OTHER MATERIALS WHICH COMPRISE, EMBODY ORINCORPORATE CUREVAC TECHNOLOGY OR ARCTURUS LMD TECHNOLOGY ONLY AS EXPRESSLY SET FORTH IN THEWork Plan. (ii)ARCTURUS WILL FURNISH TO CUREVAC THE QUANTITIES OF FORMULATED PRODUCT AS SET FORTH IN THE WORK PLAN.IN THE EVENT REQUESTED IN WRITING BY CUREVAC, TO FURNISH ADDITIONAL FORMULATED PRODUCT OF UP TO […***…]% IN EXCESS OF THE TOTAL QUANTITIES SET FORTH IN THE WORK PLAN FOR A PROGRAM, ARCTURUS SHALLUSE DILIGENT EFFORTS TO SUPPLY SUCH QUANTITIES. ARCTURUS SHALL CONSIDER IN GOOD FAITH FURNISHINGADDITIONAL QUANTITIES WHICH MAY BE REQUIRED IN THE PERFORMANCE OF THE PROGRAM PURSUANT TO ANYseparate request by CureVac. (iii)IN ADDITION, EACH PARTY WILL, UPON THE OTHER PARTY’S REASONABLE WRITTEN REQUEST, FURNISH TO SUCH OTHERPARTY OTHER SAMPLES OF MATERIALS WHICH COMPRISE, EMBODY OR INCORPORATE CUREVAC TECHNOLOGY ORARCTURUS LMD TECHNOLOGY THAT ARE IN SUCH PARTY’S CONTROL AND ARE REASONABLE (BOTH IN QUANTITYAND IDENTITY) AND USEFUL FOR THE OTHER PARTY TO CARRY OUT ITS RESPONSIBILITIES UNDER THE WORK PLAN,PROVIDED (A) SUCH MATERIALS ARE REASONABLY AND READILY AVAILABLE IN EXCESS OF THE PROVIDING PARTY’SOWN REQUIREMENTS, AND (B) SUPPLY OF SUCH MATERIALS WILL NOT, IN THE PROVIDING PARTY’S REASONABLEjudgment, (1) conflict with the***Confidential Treatment Requested17 PROVIDING PARTY’S INTERNAL OR THIRD PARTY RESEARCH PROGRAMS, (2) CONFLICT WITH THE PROVIDING PARTY’SINTERNAL POLICIES REGARDING SUCH MATERIALS OR (3) VIOLATE ANY AGREEMENT TO WHICH THE PROVIDING PARTY ISa party. (iv)EACH PARTY WILL USE SUCH MATERIALS ONLY IN ACCORDANCE WITH THE WORK PLAN AND OTHERWISE INACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT, AND THE PROVISION OF MATERIALSHEREUNDER BY EITHER PARTY WILL NOT CONSTITUTE ANY GRANT, OPTION OR LICENSE UNDER ANY PATENTS ORKNOW-HOW, EXCEPT AS EXPRESSLY SET FORTH HEREIN. IN ANY EVENT, ALL MATERIALS DELIVERED TO THERECEIVING PARTY WILL REMAIN THE SOLE PROPERTY OF THE PROVIDING PARTY AND WILL BE USED IN COMPLIANCEWITH ALL APPLICABLE LAWS. THE MATERIALS SUPPLIED UNDER THIS AGREEMENT WILL BE USED WITH PRUDENCEAND APPROPRIATE CAUTION IN ANY EXPERIMENTAL WORK, BECAUSE NOT ALL OF THEIR CHARACTERISTICS MAY BEKNOWN. IN THE EVENT THAT THE PARTIES ENTER INTO A LICENSE AGREEMENT WITH RESPECT TO A PROGRAM, THEMaterials may be retained subject to such License Agreement. (v)EXCEPT WITH THE PRIOR WRITTEN CONSENT OF THE SUPPLYING PARTY, THE PARTY RECEIVING ANY MATERIALS WILLNOT DISTRIBUTE OR OTHERWISE ALLOW THE RELEASE OF MATERIALS TO ANY THIRD PARTY, EXCEPT, WITH RESPECT TOEITHER PARTY, TO ANY PERMITTED SUBCONTRACTORS UNDER SECTION 3.4 AND, WITH RESPECT TO CUREVAC, TO ANYTHIRD PARTY LICENSEE OR ASSIGNEE OR POTENTIAL LICENSEE OR ASSIGNEE OF CUREVAC TECHNOLOGY INaccordance with this Agreement. 3.4Permitted Subcontracting. EITHER PARTY MAY SUBCONTRACT ITS ACTIVITIES TO BE PERFORMED UNDER THE WORK PLAN TO ATHIRD PARTY, PROVIDED THAT (I) ARCTURUS SHALL OBTAIN, THROUGH THE JSC, CONSENT BY CUREVAC FOR SUCH SUBCONTRACTING, SUCH CONSENT NOT TOBE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED, AND (II) CUREVAC SHALL INFORM ARCTURUS ABOUT ANY SUBCONTRACTING (INCLUDING THEIDENTITY OF THE SUBCONTRACTING PARTY AND WORK TO BE PERFORMED) WITHOUT UNDUE DELAY, AND IN ANY EVENT WITHIN […***…] BUSINESS DAYSOF ENTRY INTO THE SUBCONTRACTING AGREEMENT. ANY SUCH SUBCONTRACTING PARTY WILL HAVE ENTERED INTO A WRITTEN AGREEMENT WITH THEsubcontractor that(a)INCLUDES TERMS AND CONDITIONS PROTECTING AND LIMITING USE AND DISCLOSURE OF CONFIDENTIAL INFORMATIONAND MATERIALS AND KNOW-HOW AT LEAST TO THE SAME EXTENT AS UNDER THIS AGREEMENT, AND THE SUBCONTRACTING PARTY SHALL USEDILIGENT EFFORTS TO ENSURE COMPLIANCE WITH THE OBLIGATIONS OF CONFIDENTIALITY (INCLUDING RETURN OR DESTRUCTION ON TERMINATION)as set forth in Article 7,(b)PROVIDES FOR REASONABLE AUDITING RIGHTS, WITH REGARD TO THE WORK PROVIDED BY THE THIRD PARTYsubcontractor, of the subcontracting Party and third parties authorized by the subcontracting Party, and(c)REQUIRES SUCH THIRD PARTY SUBCONTRACTOR AND ITS PERSONNEL TO ASSIGN TO THE SUBCONTRACTING PARTY ALL RIGHT,TITLE AND INTEREST IN AND TO ANY PATENTS AND KNOW-HOW AND MATERIALS CREATED, CONCEIVED, DEVELOPED OR REDUCED TO PRACTICE INCONNECTION WITH THE PERFORMANCE OF SUBCONTRACTED ACTIVITIES PURSUANT TO THIS AGREEMENT, CONSISTENT WITH THE REQUIREMENTS OFSECTION 6, PROVIDED, HOWEVER, THAT IN THE EVENT OF A SUBCONTRACTING OR SUBLICENSING TO A COLLABORATION PARTNER OF CUREVAC,CureVac shall obtain at least a customary non-blocking, back-license of Improvements to Arcturus Background IP***Confidential Treatment Requested18 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC GENERATED BY OR JOINTLY WITH SUCH COLLABORATORS OF CUREVAC, I.E., A NON-EXCLUSIVE, ROYALTY-FREE, AND SUBLICENSABLE LICENSEunder the applicable Know-How and Patents generated (if any).3.5Program Licenses.(a)By Arcturus. SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, ARCTURUS HEREBY GRANTS TOCUREVAC A WORLDWIDE, NON-EXCLUSIVE LICENSE UNDER THE ARCTURUS LMD TECHNOLOGY, INCLUDING THE RIGHT TO GRANT SUBLICENSES,LIMITED IN ACCORDANCE WITH THIS SECTION 3.5, TO RESEARCH AND PRE-CLINICALLY DEVELOP (INCLUDING THE RIGHT TO MANUFACTURE FORSUCH PURPOSES), BUT EXPRESSLY WITHOUT THE RIGHT TO CLINICALLY DEVELOP OR COMMERCIALIZE (INCLUDING THE RIGHT TO MANUFACTURE FORsuch purpose) except with the prior written consent of Arcturus) and in any event solely to the extent necessary: (i)TO ENABLE CUREVAC, AFFILIATES OF CUREVAC AND SUBCONTRACTORS SELECTED IN ACCORDANCE WITH SECTION3.4 to perform CureVac's activities set forth in the Work Plan, (ii)TO CONDUCT RESEARCH PROJECTS WITH ACADEMIC PARTNERS (ANY SUCH AGREEMENTS OF WHICH (I) SHALL INCLUDEBACK-LICENSES OR GRANTS OF RIGHTS BY THE ACADEMIC PARTNER TO PATENTS AND KNOW-HOW (OTHER THANDATA) TO MEET THE REQUIREMENTS OF SECTION 6 AND (II) WILL NOT REQUIRE ARCTURUS TO ENTER INTO A LICENSEAGREEMENT WITH OR MAKE PAYMENTS TO SUCH ACADEMIC PARTNER IN ORDER FOR ARCTURUS TO USE AND EXPLOITthe Arcturus Background Technology), and (iii)TO PERMIT, UNDER CONFIDENTIALITY AND NON-USE RESTRICTIONS IN ACCORDANCE WITH THIS AGREEMENT, TOTHIRD PARTY COLLABORATORS OF CUREVAC WHO LICENSE OR INTEND TO LICENSE CUREVAC TECHNOLOGY TOEXPLORE THE ARCTURUS LMD TECHNOLOGY (ANY SUCH AGREEMENTS OF WHICH SHALL INCLUDE BACK-LICENSESBY THE THIRD PARTY COLLABORATOR TO PATENTS AND KNOW-HOW (OTHER THAN DATA) CONSISTENT WITH THErequirements of Section 6).(b)By CureVac. SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, CUREVAC HEREBY GRANTS TOARCTURUS A WORLDWIDE, NON-EXCLUSIVE LICENSE UNDER CUREVAC TECHNOLOGY, SOLELY TO THE EXTENT NECESSARY TO ENABLE ARCTURUSTO PERFORM ITS ACTIVITIES SET FORTH IN THE WORK PLAN AND FOR NO OTHER PURPOSE. THE FOREGOING LICENSE SHALL NOT INCLUDE THE RIGHTto grant sublicenses, except to permitted subcontractors in accordance with Section 3.4.(c)No Other Licenses. NO LICENSE OR RIGHT IS OR WILL BE CREATED OR GRANTED HEREUNDER BY IMPLICATION,estoppel or otherwise. All licenses and rights are or will be granted only as expressly provided in this Agreement.ARTICLE 4Reserved Targets19 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC 4.1Generally. CUREVAC WILL SELECT THE TARGETS THAT WILL BE THE SUBJECT OF THE WORKS TO BE PERFORMED AS PART OF APROGRAM FROM THE RESERVED TARGET LIST. CUREVAC SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO RESERVE TARGETS (OR REPLACE A RESERVEDTarget with a new Target) in accordance with this Article 4.4.2Restricted Target List.(a)Pre-existing Restrictions. ARCTURUS SHALL MAINTAIN AT THE ESCROW AGENT AN UPDATED MONTHLY (AS OF THEFINAL DAY OF EACH MONTH) LIST OF TARGETS THAT ARE SUBJECT TO PRE-EXISTING RESTRICTIONS (THE "RESTRICTED TARGET LIST"). THERESTRICTED TARGET LIST WILL IDENTIFY WHETHER THE PRE-EXISTING RESTRICTIONS ARE EXCLUSIVE, NON-EXCLUSIVE OR CO-EXCLUSIVE.ARCTURUS REPRESENTS, WARRANTS AND COVENANTS TO CUREVAC THAT (I) THE RESTRICTED TARGET LIST IS AND WILL AT ALL TIMES BE ACCURATEIN ACCORDANCE WITH THIS SECTION 4.2(A); AND (II) ARCTURUS OR THE ESCROW AGENT WILL NOT ADD ANY RESERVED TARGETS TO THERESTRICTED TARGET LIST OR GRANT TO ANY THIRD PARTY ANY LICENSES OR OPTIONS UNDER THE ARCTURUS LMD TECHNOLOGY WITH RESPECTTO THE THEN CURRENT RESERVED TARGET LIST THAT WOULD PRECLUDE ARCTURUS FROM ENTERING INTO A LICENSE AGREEMENT WITH RESPECTto such Reserved Target as set forth herein.(b)Target Notices. (i)IF CUREVAC DESIRES TO INCLUDE A TARGET AS A RESERVED TARGET HEREUNDER, CUREVAC WILL NOTIFY THEESCROW AGENT IN WRITING (WITH CONTEMPORANEOUS INFORMATION IN WRITING TO ARCTURUS ABOUT THENOTIFICATION TO THE ESCROW AGENT) OF THE TARGETS FOR POTENTIAL INCLUSION ON THE RESERVED TARGET LIST,WHICH NOTICE WILL PROVIDE (I) THE INFORMATION ON THE TARGET RESERVATION REQUEST FORM ATTACHEDHERETO AS Exhibit 4.2; AND (II) THE IDENTITY OF EACH RESERVED TARGET (IF ANY) THAT CUREVAC DESIRES TOREMOVE AS A RESERVED TARGET (EACH SUCH NOTICE, A "Target Notice"). FOR CLARITY, THE TARGET NOTICESSHALL NOT INCLUDE MORE TARGETS THAN THE MAXIMUM TARGETS THEN AVAILABLE (TAKING INTO CONSIDERATIONANY REMOVED TARGETS PREVIOUSLY RESERVED) AND SHALL BE DEEMED TO BE A REQUEST FOR AN EXCLUSIVELICENSE AT THE OUTSET UNLESS THERE IS A PRE-EXISTING RESTRICTION. FOR CLARITY, CUREVAC’S RIGHTS TO ENTERINTO A NON-EXCLUSIVE LICENSE AGREEMENT SHALL APPLY ONLY IF THE PRE-EXISTING RESTRICTION PERMITS Anon-exclusive license right to such proposed Reserved Target. (ii)NOTWITHSTANDING THE FORMAL TARGET RESERVATION MECHANISM DESCRIBED HEREIN, ARCTURUS AND THEESCROW AGENT WILL IN GOOD FAITH RESPOND TO ANY INTERIM REQUESTS (NOT TO EXCEED […***…] PERMONTH) ON WHETHER CERTAIN TARGETS CAN BE RESERVED AS RESERVED TARGETS PRIOR TO THE MONTHLYCONSIDERATION DATE, IN ORDER TO ASSIST CUREVAC IN PLANNING OF DEVELOPMENT PROJECTS. FOR CLARITY, THEINTERIM REQUESTS SHALL NOT INCLUDE MORE TARGETS THAN THE MAXIMUM TARGETS THEN AVAILABLE (TAKINGINTO CONSIDERATION ANY REMOVED TARGETS PREVIOUSLY RESERVED). IN CASE OF AN INTERIM REQUEST, THEESCROW AGENT (I) WILL REQUEST FROM ARCTURUS AN UPDATE OF THE RESERVED TARGET LIST, SUCH UPDATE TOBE PROVIDED BY ARCTURUS TO THE ESCROW AGENT WITHIN […***…] BUSINESS DAYS OF THE REQUEST, AND(ii) provide CureVac with a Target Response Notice in accordance with subsection (c).***Confidential Treatment Requested20 (c)Target Response Notices. (i)THE ESCROW AGENT, ON BEHALF OF ARCTURUS, WILL REVIEW EACH TARGET NOTICE PROVIDED BY CUREVACHEREUNDER TO DETERMINE WHETHER OR NOT ANY SUCH PROPOSED TARGET IS ON THE RESTRICTED TARGET LIST ANDIF LISTED, THE APPLICABLE PRE-EXISTING RESTRICTION AS OF THE DATE OF SUCH TARGET NOTICE. WITHIN […***…] DAYS OF THE ESCROW AGENT’S RECEIPT OF A TARGET NOTICE, THE ESCROW AGENT WILL PROVIDECureVac with written notice that includes the information set forth in subsection (c)(ii) and (iii) (eachsuch notice, a "Target Response Notice"). (ii)IF, AS OF THE DATE OF CUREVAC’S TARGET NOTICE FOR A TARGET, SUCH TARGET IS ON THE RESTRICTED TARGETLIST AND IS LISTED AS BEING SUBJECT TO PRE-EXISTING RESTRICTIONS THAT RESTRICT ARCTURUS FROM GRANTING THEAPPLICABLE LICENSE (I.E., AN EXCLUSIVE OR NON-EXCLUSIVE LICENSE IN ACCORDANCE WITH A LICENSEAGREEMENT) TO CUREVAC UNDER THE ARCTURUS LMD TECHNOLOGY WITH RESPECT TO SUCH TARGET, THENSUCH TARGET SHALL NOT BE AVAILABLE TO BECOME A RESERVED TARGET. THE TARGET RESPONSE NOTICEISSUED FOR SUCH TARGET WILL CERTIFY TO CUREVAC THAT SUCH TARGET IS ON THE RESTRICTED TARGET LIST ANDIS LISTED AS BEING SUBJECT TO PRE-EXISTING RESTRICTIONS THAT RESTRICT ARCTURUS FROM GRANTING THEapplicable license.IF, AS OF THE DATE OF CUREVAC’S TARGET NOTICE FOR A TARGET, SUCH TARGET IS NOT LISTED ON THE RESTRICTEDTARGET LIST, THEN SUCH TARGET WILL BECOME A RESERVED TARGET AND WILL BE ADDED TO THE RESERVED TARGETLIST SUBJECT TO THE CONCURRENT RESERVED LIST LIMITS SET FORTH IN SUBSECTION (D) BELOW. TO THE EXTENT THATTHE PRE-EXISTING RESTRICTION IS NON-EXCLUSIVE, THEN SUCH TARGET MAY BE ADDED BY CUREVAC TO RESERVEDTarget List, but CureVac shall only have the option to enter into a Non-Exclusive License Agreement.(d)Concurrent Reserved List Limits and Removal of Targets. THE FOLLOWING CONCURRENT RESERVED LISTlimits will apply to all Reserved Targets ("Concurrent Reserved List Limits"). (i)RESERVED TARGETS AND REMOVAL THEREOF. CUREVAC MAY SELECT RESERVED TARGETS UP TO THE TOTALSALLOWED FOR IN SUBPARAGRAPH (II) BELOW, IN ACCORDANCE WITH THE PROCESS SPECIFIED IN SECTIONS 4.2(B)AND (C). CUREVAC SHALL HAVE THE RIGHT TO REMOVE A TARGET OR REPLACE A TARGET ON THE RESERVED TARGETLIST WITH ANOTHER TARGET, IN ACCORDANCE WITH THE PROCESS SPECIFIED IN SECTION 4.2(B), PROVIDED (A)THE TOTAL NUMBER OF TARGETS ON THE RESERVED TARGET LIST DOES NOT EXCEED THE MAXIMUM TARGETS ATANY ONE TIME; AND (B) A NEWLY NOMINATED TARGET IS NOT ON THE RESTRICTED TARGET LIST. ANYabandoned Target(s) revert(s) back to Arcturus. (ii)MAXIMUM NUMBER RESERVED TARGETS. CUREVAC WILL HAVE THE RIGHT TO SELECT UP TO […***…]TARGETS AT ANY ONE TIME TO BE PLACED ON THE RESERVED TARGET LIST AS EXCLUSIVE RESERVED TARGETS;PROVIDED THAT THE […***…] TOTAL SHALL BE REDUCED BY EACH EXERCISE OF AN OPTION (THE “MaximumTargets”) (e.g., […***…], with***Confidential Treatment Requested21 such reduction in the total Targets applying from and after the date of exercise of an Option. (iii)FOR CLARIFICATION, THE SELECTION OF ANY PROGRAM UNDER THE CO-DEVELOPMENT AGREEMENT SHALL NOTCONSTITUTE THE SELECTION OF A TARGET IN ACCORDANCE WITH THIS SECTION 4.2. IF ONE OF THE RESERVEDTARGETS IS SELECTED FOR CO-DEVELOPMENT UNDER THE CO-DEVELOPMENT AGREEMENT, SUCH RESERVEDTARGET SHALL BE REMOVED FROM THE RESERVED TARGET LIST WITH THE EFFECT THAT CUREVAC SHALL BEentitled to nominate a new Target in accordance with this Section 4.2.4.3EXPIRATION OF PRE-EXISTING RESTRICTIONS. IF ANY PRE-EXISTING RESTRICTIONS IDENTIFIED IN A TARGET RESPONSENOTICE THAT PRECLUDED ARCTURUS FROM GRANTING CUREVAC A LICENSE (WHETHER OR NOT CUREVAC HAS ELECTED TO DESIGNATE SUCH TARGET ON THERESERVED TARGET LIST ON A NON-EXCLUSIVE BASIS SUBJECT TO THE PRE-EXISTING RESTRICTION) UNDER THE ARCTURUS LMD TECHNOLOGY LATEREXPIRE OR OTHERWISE ARE MODIFIED OR TERMINATE SUCH THAT ARCTURUS IS NO LONGER PRECLUDED UNDER THE TERMS OF THE APPLICABLE THIRD PARTYAGREEMENT FROM GRANTING A LICENSE TO CUREVAC WITH RESPECT TO SUCH TARGET, THE ESCROW AGENT WILL NOTIFY CUREVAC OF SUCH EVENT ANDCUREVAC WILL HAVE AN EXCLUSIVE OPTION, FOR A PERIOD OF […***…] DAYS FOLLOWING DELIVERY OF NOTICE TO CUREVAC, TO ADD (OR EXTEND ITSRIGHTS AS IDENTIFIED BY THE ESCROW AGENT WITH RESPECT TO) SUCH TARGET TO THE RESERVED TARGET LIST AS A RESERVED TARGET IN ACCORDANCEWITH SECTION 4.2(C), SUBJECT TO THE CONCURRENT RESERVED LIST LIMITS. FOR CLARITY, CUREVAC WILL AT ALL TIMES THEREAFTER HAVE THE RIGHT TOPROVIDE A TARGET NOTICE FOR SUCH TARGET TO THE ESCROW AGENT PURSUANT TO SECTION 4.2(B) BUT SUCH TARGET NOTICE WILL BE SUBJECT TO ANYintervening Pre-Existing Restrictions.4.4ESCROW AGENT. ARCTURUS SHALL ENSURE THAT THE ESCROW AGENT MEETS THE REQUIREMENTS SET FORTH HEREIN. ALL COSTSand expenses incurred through the Escrow Agent will be borne by Arcturus.ARTICLE 5CureVac License Options5.1Option. (a)FROM THE PERIOD COMMENCING ON THE EFFECTIVE DATE AND ENDING ON THE EXPIRATION OF THE TERM (THE"Option Period"), CUREVAC WILL HAVE A TOTAL OF […***…] OPTIONS (EACH, AN "Option"), ON A RESERVED TARGET-BY-RESERVEDTARGET BASIS, TO ENTER INTO A MAXIMUM OF […***…] LICENSES UNDER THE ARCTURUS LMD TECHNOLOGY WITH RESPECT TO THEDEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF LICENSED PRODUCTS CONTAINING MRNA CONSTRUCTS INTENDED TO EXPRESSsuch Reserved Target in the form of the License Agreement, provided, however, that (i)TO THE EXTENT THE RESERVED TARGET IS ONLY AVAILABLE ON A NON-EXCLUSIVE BASIS, THE PARTIES SHALL ENTERinto a Non-Exclusive License Agreement, and (ii)THE APPENDICES TO THE LICENSE AGREEMENT ARE TO BE PREPARED OR UPDATED FOR EACH SPECIFIC TARGET, INaccordance with the terms of this Agreement.***Confidential Treatment Requested22 (b) CUREVAC MAY EXERCISE EACH SUCH OPTION BY PROVIDING TO ARCTURUS, PRIOR TO THE EXPIRATION OF THE TERM,IRREVOCABLE WRITTEN NOTICE OF OPTION EXERCISE, SETTING FORTH THE PARTICULAR RESERVED TARGET WHICH IS INTENDED TO BE EXPRESSEDby the Licensed Products (each such notice, an "Option Notice"). A separate Option Notice and Option Exercise Fee will beREQUIRED FOR EACH LICENSE AGREEMENT WITH RESPECT TO WHICH CUREVAC EXERCISES AN OPTION PURSUANT TO THIS SECTION 5.1, ANDCUREVAC WILL PAY TO ARCTURUS THE OPTION EXERCISE FEE FOR EACH SUCH LICENSE AGREEMENT AS SET FORTH IN SECTION 5.3. IF NOTEXERCISED PRIOR TO THE EXPIRATION OF THE TERM, THE OPTIONS GRANTED TO CUREVAC UNDER THIS ARTICLE 5 WILL TERMINATE IN FULL ANDWILL NO LONGER BE EXERCISABLE. IN THE EVENT THAT CUREVAC TERMINATES A LICENSE(S) DURING THE TERM, THE TARGET(S) SUBJECT TO theLICENSE(S) WILL BE REMOVED FROM THE RESERVED TARGET LIST AND THE NUMBER OF REMAINING OPTIONS AND/OR LICENSE AGREEMENTSSHALL BE REDUCED BY ONE (1) (I.E., THE EXERCISE OF AN OPTION REDUCES THE TOTAL NUMBER OF OPTIONS REMAINING BY ONE REGARDLESSof whether CureVac elects to continue such License Agreement in effect). (c)IN THE EVENT THAT CUREVAC TERMINATES A LICENSE AGREEMENT DURING THE TERM, NO ADDITIONAL ORreplacement Options shall be granted or reinstated and the Target(s) subject to such license(s) will no longer be available as aTarget pursuant to this Agreement.5.2CUREVAC’S EXERCISE OF OPTION. AS SOON AS PRACTICABLE FOLLOWING CUREVAC’S DELIVERY OF AN OPTION NOTICE TOARCTURUS BUT IN ANY EVENT WITHIN […***…] BUSINESS DAYS, CUREVAC AND ARCTURUS WILL ENTER INTO A LICENSE AGREEMENT WITH RESPECT TOTHE RESERVED TARGET FOR WHICH SUCH OPTION NOTICE IS PROVIDED, PROVIDED, HOWEVER, THAT IF THE PARTIES FAIL TO PREPARE THE APPENDICES TOTHE LICENSE AGREEMENT IN ACCORDANCE WITH SECTION 5.1(A)(II) WITHIN […***…] BUSINESS DAYS FOLLOWING CUREVAC’S DELIVERY OF ANOPTION NOTICE TO ARCTURUS, THE LICENSE AGREEMENT WITH RESPECT TO THE RESERVED TARGET SHALL NEVERTHELESS ENTER INTO FORCE (INCLUDINGPAYMENT OBLIGATIONS OF CUREVAC IN ACCORDANCE WITH THE TERMS OF THE LICENSE AGREEMENT) AND THE PARTIES SHALL COMPLETE THE APPENDICESas soon as practicable thereafter.5.3OPTION EXERCISE FEE. IF CUREVAC EXERCISES ITS OPTION FOR A RARE DISEASE TARGET PURSUANT TO SECTION 5.1,CUREVAC SHALL PAY AN OPTION EXERCISE FEE OF […***…]; AND IF CUREVAC EXERCISES ITS OPTION FOR A NON-RARE DISEASE TARGET PURSUANTto Section 5.1, CureVac shall pay an Option Exercise Fee of […***…], hereinafter both the "Option Exercise Fee". WITHIN […***…]BUSINESS DAYS AFTER EXERCISE OF THE OPTION FOR LICENSED PRODUCT(S), ARCTURUS WILL ISSUE AN INVOICE TO CUREVAC FOR THE OPTION EXERCISEFEE. EACH SUCH PAYMENT WILL BE SUBJECT TO ENTRY INTO THE LICENSE AGREEMENT AND DUE WITHIN […***…] DAYS AFTER CUREVAC'S RECEIPT OFsuch invoice from Arcturus.5.4CO-DEVELOPMENT AGREEMENT. FOR CLARIFICATION, THE SELECTION OF ANY PROGRAM UNDER THE CO-DEVELOPMENTAGREEMENT SHALL NOT CONSTITUTE THE EXERCISE OF AN OPTION IN ACCORDANCE WITH THIS SECTION 5, AND, ACCORDINGLY, NO OPTION EXERCISE FEEWILL BE PAYABLE AND ANY PAID OPTION EXERCISE FEE SHALL CREDITED AGAINST ANY OTHER PAYMENTS BY CUREVAC APPLIED FIRST TO ANYOUTSTANDING PAYMENT OBLIGATIONS TO ARCTURUS, AND TO THE EXTENT ANY REMAINING AMOUNTS REMAIN CREDITABLE, THEN TO THE NEXT DUE FUTUREpayment obligations.5.5Enablement. ARCTURUS WILL (A) WITH RESPECT TO ANY RESERVED TARGETS, DURING THE TERM REMAIN ENTITLED TO GRANT TOCUREVAC THE LICENSES TO THE PATENTS AND THE KNOW-HOW WITHIN THE ARCTURUS BACKGROUND TECHNOLOGY UNDER A LICENSE AGREEMENT, AND(b) subject to the unrestricted rights of Arcturus and its Affiliates to grant to a Third Party a non-exclusive, co-***Confidential Treatment Requested23 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC EXCLUSIVE OR AN EXCLUSIVE LICENSE OR OPTION WITH RESPECT TO A TARGET, USE REASONABLE EFFORTS TO ALLOW THE POTENTIAL FOR LICENSEAGREEMENTS TO BE AVAILABLE FOR TARGETS IDENTIFIED BY CUREVAC TO ARCTURUS FOR RESEARCH AND FOR ELECTION TO BECOME A RESERVED TARGETpursuant to this Agreement during the Term. ARTICLE 6Background Technology; Ownership of Program Technology6.1DISCLOSURE OF PROGRAM KNOW-HOW. EACH PARTY WILL PROMPTLY (AND AT LEAST ON A CALENDAR QUARTERLY BASIS)DISCLOSE TO THE OTHER PARTY ANY PROGRAM KNOW-HOW THAT IS CREATED, CONCEIVED OR REDUCED TO PRACTICE BY OR ON BEHALF OF SUCH PARTY ANDOWNED BY THE OTHER PARTY PURSUANT TO SECTION 6.2(C), AND WILL PROVIDE SUCH DOCUMENTATION REGARDING THE PROGRAM KNOW-HOW AS SUCHother Party may reasonably request.6.2Ownership.(a)CureVac Background Technology. AS BETWEEN THE PARTIES, CUREVAC WILL CONTINUE TO OWN ALL RIGHT,title and interest in and to the CureVac Background Technology.(b)Arcturus Background Technology. AS BETWEEN THE PARTIES, ARCTURUS WILL CONTINUE TO OWN ALL RIGHT,title and interest in and to the Arcturus Background Technology.(c)Program Technology. (i)EXCEPT AS SET FORTH IN SUBSECTIONS (III) AND (IV) BELOW, EACH PARTY WILL SOLELY OWN ALL RIGHT, TITLE ANDINTEREST IN AND TO ALL PROGRAM TECHNOLOGY THAT IS DISCOVERED, CREATED, CONCEIVED, DEVELOPED ORREDUCED TO PRACTICE SOLELY BY OR ON BEHALF OF SUCH PARTY ("SOLELY-OWNED PROGRAM KNOW-HOW"),AND ALL PATENTS ARISING THEREFROM THAT CLAIM SUCH SOLELY-OWNED PROGRAM KNOW-HOW ("Solely-OWNED PROGRAM PATENTS" AND TOGETHER WITH THE SOLELY-OWNED PROGRAM KNOW-HOW, THE "Solely-OWNED PROGRAM TECHNOLOGY") AND ALL RIGHT, TITLE AND INTEREST IN AND TO ALL SOLELY-OWNEDTECHNOLOGY WILL AUTOMATICALLY VEST SOLELY IN SUCH PARTY. FOR CLARITY, SOLELY-OWNED PROGRAMTECHNOLOGY SHALL NOT EXIST WITH RESPECT TO ANY DUAL IMPROVEMENT TECHNOLOGY AND IN THE EVENT OFany conflict, such Know-How and Patents shall be deemed Dual Improvement Technology. (ii)EXCEPT AS SET FORTH IN SUBSECTIONS (I) ABOVE AND (III) BELOW, THE PARTIES WILL JOINTLY OWN IN EQUALSHARE ANY AND ALL PROGRAM TECHNOLOGY THAT IS NOT SOLE IMPROVEMENT TECHNOLOGY OR THAT IS DUALIMPROVEMENT TECHNOLOGY ("JOINTLY-OWNED PROGRAM TECHNOLOGY"). ALL KNOW-HOW IN JOINTLY-OWNED PROGRAM TECHNOLOGY SHALL BE REFERRED TO AS "JOINTLY-OWNED PROGRAM KNOW-HOW" AND ALLPATENTS IN JOINTLY-OWNED PROGRAM TECHNOLOGY SHALL BE REFERRED TO AS "JOINTLY-OWNED PROGRAMPatents". EACH PARTY WILL HAVE AN UNDIVIDED ONE-HALF INTEREST IN AND TO SUCH JOINTLY-OWNEDProgram Technology.24 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC ARCTURUS WILL HAVE A RIGHT TO GRANT LICENSES (WITH THE RIGHT TO GRANT SUBLICENSES THROUGH MULTIPLE TIERS) TOCUREVAC'S SHARE IN SUCH JOINTLY-OWNED PROGRAM TECHNOLOGY TO EXERCISE AND EXPLOIT THE ARCTURUSLMD Technology, provided, however, that(A)ARCTURUS SHALL NOT HAVE THE RIGHT TO GRANT LICENSES TO JOINTLY-OWNED PROGRAMKNOW-HOW AND JOINTLY-OWNED PROGRAM PATENTS WITH RESPECT TO MRNA CONSTRUCTS ORDNA Targets to a Third Party(X) PRIOR TO AND WITHIN THE FIRST […***…] IMMEDIATELY FOLLOWING THE FILING OF THERESPECTIVE JOINTLY-OWNED PROGRAM PATENT WITHOUT CUREVAC'S PRIOR WRITTENconsent and(Y) DURING […***…] AFTER THE PERIOD SPECIFIED IN (A), WITHOUT OFFERING TOCUREVAC THE FIRST RIGHT TO OBTAIN SUCH LICENSE(S) ON SUBSTANTIALLY SIMILAR FINANCIALAND OTHER TERMS AND CONDITIONS AGREED WITH THE THIRD PARTY, SUCH RIGHT TO BEEXERCISED BY CUREVAC WITHIN […***…] DAYS FOLLOWING CUREVAC’S RECEIPT OF AWRITTEN NOTIFICATION FROM ARCTURUS ABOUT ITS INTENTION TO GRANT SUCH LICENSE(S) TO ATHIRD PARTY, SUCH NOTIFICATION TO INCLUDE THE MATERIAL FINANCIAL AND OTHER TERMSAND CONDITIONS OF SUCH LICENSE AND OTHER MATERIAL INFORMATION RELEVANT FOR SUCHlicense(s); and(B)CUREVAC WILL HAVE A RIGHT TO GRANT LICENSES (WITH THE RIGHT TO GRANT SUBLICENSESTHROUGH MULTIPLE TIERS) TO ARCTURUS' SHARE IN SUCH JOINTLY-OWNED PROGRAM TECHNOLOGY TOEXERCISE OR EXPLOIT THE CUREVAC TECHNOLOGY AND THE PROGRAM TECHNOLOGY, WHICH LICENSEGRANT MAY BE EXCLUSIVE WITH RESPECT TO A LICENSED PRODUCT ONLY PURSUANT TO A LICENSEAgreement,I.E., SUBJECT TO (A) AND (B) ABOVE, NEITHER PARTY IS TO BE BLOCKED OR LIMITED IN THE USE OF OR RIGHTS TOLICENSE AND SUBLICENSE ITS OWN TECHNOLOGY BY JOINTLY-OWNED PROGRAM TECHNOLOGY; THE PARTIES AGREETHAT THE LICENSES (AS BETWEEN THE PARTIES) TO THE RESPECTIVE OTHER PARTY'S SHARE IN SUCH JOINTLY-OWNEDPROGRAM TECHNOLOGY SHALL BE PERPETUAL, IRREVOCABLE, NON-EXCLUSIVE, COST-FREE LICENSE, SUBJECT TO THElicenses hereunder or under any License Agreement.THE JOINTLY-OWNED PROGRAM TECHNOLOGY SHALL BE ASSIGNABLE ONLY (A) WITH THE APPLICABLE, RIGHTS,RESTRICTIONS AND OBLIGATIONS IN THIS AGREEMENT AND (B) SUBJECT TO NOTIFICATION FROM THE ASSIGNING PartyTO THE OTHER PARTY ABOUT THE ASSIGNMENT AND A WRITTEN CONFIRMATION FROM THE ASSIGNEE TO BE BOUND BYTHE APPLICABLE, RIGHTS, RESTRICTIONS AND OBLIGATIONS IN THIS AGREEMENT WITH RESPECT TO THE ASSIGNEDJOINTLY-OWNED PROGRAM TECHNOLOGY. IN ANY EVENT, THE OWNERSHIP RIGHTS IN JOINTLY-OWNED PROGRAMTechnology remain subject to the licenses hereunder or under any License***Confidential Treatment Requested25 AGREEMENT, OTHER INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY AND THE OTHER TERMS AND CONDITIONS OFthis Agreement.To the extent any Jointly-Owned Program Technology is discovered, created, conceived, developed orREDUCED TO PRACTICE SOLELY OR PREDOMINANTLY BY OR ON BEHALF OF ONE PARTY, THEN SUCH PARTY, FOR ITSELF ANDON BEHALF OF ITS AND ITS AFFILIATES’ EMPLOYEES, SUBCONTRACTORS (SUBJECT TO SECTION 3.4), CONSULTANTS ANDAGENTS, HEREBY ASSIGNS, A SHARE OF ITS INTEREST IN AND TO SUCH JOINTLY-OWNED PROGRAM TECHNOLOGY TO THEother Party, so that each Party owns an undivided one-half interest. (iii)Notwithstanding subsections (i) and (ii) above,(A)ARCTURUS WILL SOLELY OWN ANY PROGRAM IMPROVEMENT TECHNOLOGY THAT IS SOLEIMPROVEMENT TECHNOLOGY TO ANY ARCTURUS BACKGROUND TECHNOLOGY, REGARDLESS OF THE PARTYOR PARTIES SUCH SOLE IMPROVEMENT TECHNOLOGY WAS DISCOVERED, CREATED, CONCEIVED,DEVELOPED OR REDUCED TO PRACTICE BY OR ON BEHALF OF, AND CUREVAC, FOR ITSELF AND ON BEHALFOF ITS AND ITS AFFILIATES’ EMPLOYEES, SUBCONTRACTORS (SUBJECT TO SECTION 3.4), CONSULTANTS ANDAGENTS, HEREBY ASSIGNS ALL OF ITS RIGHTS, TITLE AND INTEREST IN SUCH SOLE IMPROVEMENTTechnology to Arcturus. (B)CUREVAC WILL SOLELY OWN ANY PROGRAM IMPROVEMENT TECHNOLOGY THAT IS SOLEIMPROVEMENT TECHNOLOGY TO ANY CUREVAC BACKGROUND TECHNOLOGY, REGARDLESS OF THE PARTYOR PARTIES SUCH SOLE IMPROVEMENT TECHNOLOGY WAS DISCOVERED, CREATED, CONCEIVED,developed or reduced to practice by or on behalf of, and Arcturus, for itself and on behalf ofITS AND ITS AFFILIATES’ EMPLOYEES, SUBCONTRACTORS (SUBJECT TO SECTION 3.4), CONSULTANTS ANDAGENTS, HEREBY ASSIGNS, ALL OF ITS RIGHTS, TITLE AND INTEREST IN SUCH SOLE IMPROVEMENTTechnology to CureVac.(C)FOR CLARITY, NOTHING HEREIN SHALL PREVENT (1) ARCTURUS FROM INDEPENDENTLYDEVELOPING, OWNING AND USING OUTSIDE OF A PROGRAM ANY KNOW-HOW THAT IS SIMILAR ORRELATED TO ANY CUREVAC TECHNOLOGY, AND (2) CUREVAC FROM INDEPENDENTLY DEVELOPING,OWNING AND USING OUTSIDE OF A PROGRAM ANY KNOW-HOW THAT IS SIMILAR OR RELATED TO ANYARCTURUS LMD TECHNOLOGY, PROVIDED THAT IN EACH CASE SUCH KNOW-HOW IS NOT DEVELOPEDBASED UPON, USING OR WITH REFERENCE TO CUREVAC TECHNOLOGY OR ARCTURUS LMDTECHNOLOGY, RESPECTIVELY. ALL OF THE RESPECTIVE INDEPENDENTLY DEVELOPED INTELLECTUALPROPERTY PURSUANT TO THIS SECTION (III)(C) SHALL BE DEEMED ARCTURUS BACKGROUND TECHNOLOGYand CureVac Background Technology, respectively. (iv)Dual Improvements. TO THE EXTENT THAT A PARTICULAR ITEM OF PROGRAM TECHNOLOGY CONSTITUTES DUALIMPROVEMENT TECHNOLOGY, THE PARTIES SHALL DISCUSS IN GOOD FAITH WHETHER ANY SUCH DUALImprovement Technology can be divided, assigned and owned in accordance with26 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC SUBSECTION (III) (A) AND (B) ABOVE, OR MADE SUBJECT TO SEPARATE PATENT FILINGS TO BE ASSIGNEDACCORDINGLY; AND TO THE EXTENT NO SUCH DIVISION IS POSSIBLE, THE DUAL IMPROVEMENT TECHNOLOGY SHALL BEtreated as Jointly-Owned Program Technology in accordance with Section 6.2(c)(ii). (v)EACH PARTY HEREBY AGREES TO TAKE, UPON THE REQUEST OF THE OTHER PARTY, ANY REASONABLE ACTION TOIMPLEMENT AND GIVE EFFECT TO THE ASSIGNMENTS AND GRANTS THAT THE PARTIES INTENDED, OR A PARTY AGREEDTO MAKE, IN THIS SECTION 6.2(C), INCLUDING, WITHOUT LIMITATION, EXECUTING ANY ASSIGNMENT DOCUMENTand other documentation, provide any testimony, and provide any other assistance.6.3Inventorship. (a)INVENTORSHIP DETERMINATION FOR ALL PROGRAM TECHNOLOGY, INCLUDING PATENTS WORLDWIDE ARISING FROM ANYPROGRAM KNOW-HOW, WILL BE MADE IN ACCORDANCE WITH APPLICABLE PATENT LAWS. NOTWITHSTANDING THE PREVIOUS SENTENCE,OWNERSHIP DETERMINATIONS FOR ALL PROGRAM TECHNOLOGY, AS BETWEEN THE PARTIES, WILL BE MADE IN ACCORDANCE WITH SECTION6.2(c).(b)EACH PARTY WILL ENSURE THAT EACH EMPLOYEE, CONSULTANT AND EACH SUBCONTRACTOR CONDUCTING ANY ACTIVITIESUNDER THIS AGREEMENT ON BEHALF OF SUCH PARTY WILL BE SUBJECT TO WRITTEN AGREEMENTS TO ASSIGN TO SUCH PARTY ALL OF ITS RIGHT, TITLEAND INTEREST IN AND TO THE PROGRAM TECHNOLOGY SO THAT SUCH PARTY CAN COMPLY WITH ITS OBLIGATIONS WITH RESPECT TO THEOWNERSHIP ALLOCATION OF THE PROGRAM TECHNOLOGY AS SET FORTH ABOVE. IN ADDITION, EACH PARTY SHALL BE SOLELY RESPONSIBLE FORPAYMENTS THAT MAY BE REQUIRED TO ANY OF SUCH PARTY’S EMPLOYEES OR CONSULTANTS AND SUBCONTRACTORS IN CONNECTION WITH OR WITHrespect to such agreements, including moral rights payments.6.4Prosecution and Maintenance.(a)IP Subcommittee. THE JDC SHALL ESTABLISH A SUBCOMMITTEE REGARDING THE ARCTURUS BACKGROUNDTECHNOLOGY AND THE PROGRAM TECHNOLOGY (“IP SUBCOMMITTEE”). SECTIONS 2.3(A) AND (B) SHALL APPLY ACCORDINGLY TO THE IPSubcommittee. In particular, in the IP Subcommittee, each Party shall (i)PROMPTLY NOTIFY THE OTHER PARTY WITH RESPECT TO ALL DEVELOPMENTS REGARDING THE ARCTURUS BACKGROUNDTECHNOLOGY AND THE PROGRAM TECHNOLOGY SIGNIFICANT FOR THE DEVELOPMENT UNDER ANY WORK PLANAND/OR ALL DEVELOPMENTS THAT WOULD REASONABLY BE CONSIDERED TO NEGATIVELY IMPACT THE RIGHTS OFCureVac pursuant to this Agreement or any License Agreement, (ii)PROVIDE TO THE OTHER PARTY INFORMATION ABOUT THE STATUS OF AND THE GENERAL STRATEGY IN RELATION TOPATENTS WITH RESPECT TO PROGRAMS INCLUDED IN THE ARCTURUS BACKGROUND TECHNOLOGY, CUREVACBACKGROUND TECHNOLOGY AND PROGRAM TECHNOLOGY AS MAY BE APPLIED TO ANY PROGRAM OR POTENTIALLICENSED PRODUCT IN ORDER TO ENABLE THE OTHER PARTY TO PROVIDE INPUT REGARDING THE STRATEGY FOR THEprosecution of such Patents with a view to enabling potential Licensed Products and/or enhancing***Confidential Treatment Requested27 THE POTENTIAL STRENGTH OF THE ARCTURUS BACKGROUND TECHNOLOGY AND PROGRAM TECHNOLOGY GENERALLY,and (iii)TO DIRECTLY OR THROUGH APPROPRIATELY QUALIFIED DESIGNEES, CONSULT WITH THE PROSECUTING PARTY AND ITSCOUNSEL REGARDING PROSECUTION AND MAINTENANCE OF ANY SUCH PATENTS AS MAY BE APPLIED TO ANYPROGRAM OR POTENTIAL LICENSED PRODUCTS WITHOUT THE REQUIREMENT OF A MEETING OF THE IPSUBCOMMITTEE, IT BEING UNDERSTOOD THAT IN SUCH CONSULTATION THE PROSECUTING PARTY SHALL TAKE THEOTHER PARTY’S COMMENTS REASONABLY INTO ACCOUNT, provided, however, THAT THE PROSECUTING PARTY WILLHAVE THE RIGHT TO MAKE THE FINAL DETERMINATION IN THE EVENT OF ANY DISAGREEMENT BETWEEN THE PARTIESrelated to any decision in connection with the filing, prosecution and maintenance of such Patents.FOR CLARITY, THE DISCUSSIONS REGARDING THE GENERAL STRATEGY AND ANY PARTICULAR PATENTS SHALL NOT REQUIRE EITHER PARTY TO DISCLOSETHE CONFIDENTIAL INFORMATION OF ANY THIRD PARTY WHOSE RIGHTS, INFORMATION OR DATA MAY BE IMPLICATED IN ANY SUCH PATENTS OR KNOW-How.(b)CureVac Patents. AS BETWEEN THE PARTIES, CUREVAC SHALL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, TOFILE, PROSECUTE, AND MAINTAIN (AT ITS SOLE EXPENSE) PATENTS WITHIN CUREVAC BACKGROUND TECHNOLOGY AND SOLE IMPROVEMENTTechnology to any CureVac Background Technology (collectively “CureVac Sole Patents”) at its sole expense.(c)Arcturus Patents. (i)SUBJECT TO THE REMAINDER OF THIS SECTION 6.4 AND TO ANY LICENSE AGREEMENT, AS BETWEEN THE PARTIES,ARCTURUS SHALL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, TO FILE, PROSECUTE, AND MAINTAIN (AT ITS SOLEEXPENSE) PATENTS WITHIN ARCTURUS BACKGROUND TECHNOLOGY AND SOLE IMPROVEMENT TECHNOLOGY TOany Arcturus Background Technology (collectively “Arcturus Sole Patents”) at its sole expense. (ii)IN RELATION TO PATENTS WITHIN SOLE IMPROVEMENT TECHNOLOGY WITH RESPECT TO WHICH CUREVAC HASDELIVERED AN OPTION NOTICE, IF ARCTURUS INTENDS TO ABANDON SUCH PATENT, IT SHALL NOTIFY CUREVACSUFFICIENTLY IN ADVANCE, AND SUBJECT TO ANY LICENSE AGREEMENT, CUREVAC SHALL HAVE THE RIGHT TO TAKEOVER OWNERSHIP OF AND PROSECUTE, MAINTAIN SUCH PATENT AT ITS SOLE EXPENSE, WHICH PATENT SHALL THENbe considered a CureVac Program Patent. (iii)ARCTURUS SHALL, DURING THE TERM, BASED ON INFORMATION WITH RESPECT TO TARGETS AND RESERVEDTARGETS DISCLOSED BY CUREVAC TO ARCTURUS AND EXISTING PROGRAMS, USE DILIGENT EFFORTS TO ENABLE THERIGHTS TO THE OPTIONS (AND LICENSE AGREEMENTS) AVAILABLE TO CUREVAC PURSUANT TO THIS AGREEMENT;provided that nothing herein shall limit the rights of Arcturus and Affiliates to grant to a Third PartyA NON-EXCLUSIVE, CO-EXCLUSIVE OR AN EXCLUSIVE LICENSE OR OTHER OPTION WITH RESPECT TO ANY TARGET THATis not a Reserved Target or otherwise subject to a License Agreement.28 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC (d)Jointly-Owned Program Patents. SUBJECT TO THE REMAINDER OF THIS SECTION 6.4 AND TO ANY LICENSEAGREEMENT, CUREVAC WILL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION TO FILE, PROSECUTE, AND MAINTAIN JOINTLY-OWNED PROGRAMPATENTS, AND THE PARTIES SHALL SHARE EQUALLY ALL COSTS INCURRED BY CUREVAC IN CONNECTION WITH SUCH EFFORTS. CUREVAC shall,regarding the Jointly-Owned Program Patents, (i)promptly notify Arcturus in writing with respect to all significant developments, (ii)PROVIDE ARCTURUS WITH DRAFTS OF EACH MATERIAL FILING (INCLUDING WITHOUT LIMITATION DRAFT PATENTapplications and responses to office actions and similar filings) for all such Patents, (iii)PROVIDE TO ARCTURUS ALL OTHER MATERIAL SUBMISSIONS AND CORRESPONDENCE WITH ANY PATENT AUTHORITIESREGARDING SUCH PATENTS, IN SUFFICIENT TIME IN ADVANCE OF THE ANTICIPATED FILING DATE (NOT TO BE LESSthan […***…] days) to allow for review and comment by Arcturus (iv)PROVIDE ARCTURUS AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH CUREVAC AND ITS COUNSELREGARDING PROSECUTION AND MAINTENANCE OF ANY SUCH JOINTLY-OWNED PROGRAM PATENTS, AND SHALL,PRIOR TO FILING, REVISE SUCH DOCUMENTS TO REFLECT ARCTURUS’S REASONABLE COMMENTS, PROVIDED THATCUREVAC WILL HAVE THE RIGHT TO MAKE THE FINAL DETERMINATION IN THE EVENT OF ANY DISAGREEMENTbetween the PartiesRELATED TO ANY DECISION IN CONNECTION WITH THE FILING, PROSECUTION AND MAINTENANCE OF SUCH JOINTLY-Owned Program Patents. (v)IF CUREVAC INTENDS TO ABANDON SUCH JOINTLY-OWNED PROGRAM PATENT, IT SHALL NOTIFY ARCTURUSSUFFICIENTLY IN ADVANCE, AND SUBJECT TO ANY LICENSE AGREEMENT, ARCTURUS SHALL HAVE THE RIGHT TO TAKEOVER OWNERSHIP OF AND PROSECUTE, MAINTAIN SUCH PATENT AT ITS SOLE EXPENSE, WHICH PATENT SHALL THENbe considered an Arcturus Sole Patent.(e)Information Regarding Arcturus Patents. ARCTURUS WILL PROVIDE SEMI-ANNUAL UPDATES ON THE STATUS OFthe Arcturus Sole Patents with respect to any Programs and Reserved Targets during the Term.(f)Cooperation. EACH PARTY WILL REASONABLY COOPERATE WITH THE OTHER PARTY IN THE PROSECUTION ANDMAINTENANCE OF THE PATENTS WITHIN THE PROGRAM TECHNOLOGY. SUCH COOPERATION INCLUDES PROMPTLY EXECUTING ALL DOCUMENTS,OR REQUIRING INVENTORS, SUBCONTRACTORS, EMPLOYEES AND CONSULTANTS TO EXECUTE ALL DOCUMENTS, AS REASONABLE AND APPROPRIATE SOas to enable the prosecution and maintenance of any such Patents in any country.6.5Patent Enforcement and Defense.(a)Notice. To the extent not in breach of an obligation of confidentiality, (i)ARCTURUS WILL PROMPTLY NOTIFY, IN WRITING, CUREVAC UPON LEARNING OF ANY ACTUAL OR SUSPECTEDINFRINGEMENT OF ANY CUREVAC SOLE PATENTS AND JOINTLY-OWNED PROGRAM PATENTS BY A THIRD PARTY, ORof any claim of***Confidential Treatment Requested29 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC INVALIDITY, UNENFORCEABILITY, OR NON-INFRINGEMENT OF ANY SUCH PATENTS, AND WILL, ALONG WITH SUCH NOTICE,supply CureVac with any evidence in its possession pertaining thereto, and (ii)CUREVAC WILL PROMPTLY NOTIFY ARCTURUS, IN WRITING, UPON LEARNING OF ANY ACTUAL OR SUSPECTEDINFRINGEMENT OF ANY ARCTURUS SOLE PATENTS BY A THIRD PARTY, OR OF ANY CLAIM OF INVALIDITY,UNENFORCEABILITY, OR NON-INFRINGEMENT OF ANY SUCH PATENTS, AND WILL, ALONG WITH SUCH NOTICE, SUPPLYArcturus with any evidence in its possession pertaining thereto.(b)Enforcement. As between the Parties and subject to any License Agreement, (i)ARCTURUS WILL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, TO SEEK TO ABATE ANY INFRINGEMENT OF THEARCTURUS SOLE PATENTS BY A THIRD PARTY, OR TO FILE SUIT AGAINST ANY SUCH THIRD PARTY FOR SUCHINFRINGEMENT, provided THAT ARCTURUS SHALL BEAR ALL THE EXPENSE OF SUCH SUIT OR ABATEMENT OFinfringement, and (ii)CUREVAC WILL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, TO SEEK TO ABATE ANY INFRINGEMENT OF THECUREVAC SOLE PATENTS AND JOINTLY-OWNED PROGRAM PATENTS BY A THIRD PARTY, OR TO FILE SUIT AGAINSTANY SUCH THIRD PARTY FOR SUCH INFRINGEMENT; provided THAT CUREVAC SHALL BEAR ALL THE EXPENSE OFsuch suit or abatement of infringement. (c)Defense. AS BETWEEN THE PARTIES AND SUBJECT TO ANY LICENSE AGREEMENT, ARCTURUS WILL HAVE THE SOLERIGHT, BUT NOT THE OBLIGATION, TO DEFEND AGAINST A DECLARATORY JUDGMENT ACTION OR OTHER ACTION CHALLENGING ANY ARCTURUS SOLEPATENTS AND JOINTLY-OWNED PROGRAM PATENTS; provided THAT ARCTURUS SHALL BEAR ALL THE EXPENSE OF SUCH DEFENSE. AS BETWEENTHE PARTIES AND SUBJECT TO ANY LICENSE AGREEMENT, CUREVAC WILL HAVE THE SOLE RIGHT, BUT NOT THE OBLIGATION, TO DEFEND AGAINSTA DECLARATORY JUDGMENT ACTION OR OTHER ACTION CHALLENGING THE CUREVAC PATENTS; provided THAT CUREVAC SHALL BEAR ALL THEexpense of such defense. (d)Withdrawal, Cooperation and Participation. WITH RESPECT TO ANY INFRINGEMENT OR DEFENSIVE ACTIONIDENTIFIED ABOVE IN THIS SECTION 6.5 WHICH MAY BE CONTROLLED BY EITHER CUREVAC OR ARCTURUS, AND SUBJECT TO ANY LICENSEAgreement: (i)IF THE CONTROLLING PARTY CEASES TO PURSUE OR WITHDRAWS FROM SUCH ACTION, IT WILL PROMPTLY NOTIFY THEOTHER PARTY (IN GOOD TIME TO ENABLE THE OTHER PARTY TO MEET ANY DEADLINES BY WHICH ANY ACTION MUSTBE TAKEN TO PRESERVE ANY RIGHTS IN SUCH INFRINGEMENT OR DEFENSIVE ACTION) AND SUCH OTHER PARTY MAYSUBSTITUTE ITSELF FOR THE WITHDRAWING PARTY, SHALL BE GRANTED THE RIGHT AND STANDING TO SUE IN THE OTHERParty's name, and proceed under the terms and conditions of this Section 6.5. (ii)THE NON-CONTROLLING PARTY WILL COOPERATE WITH THE PARTY CONTROLLING ANY SUCH ACTION (AS MAY BEREASONABLY REQUESTED BY THE CONTROLLING PARTY), INCLUDING (A) PROVIDING ACCESS TO RELEVANTDOCUMENTS AND OTHER EVIDENCE, (B) MAKING ITS AND ITS AFFILIATES AND LICENSEES AND SUBLICENSEES ANDall of their respective employees, subcontractors,30 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC CONSULTANTS AND AGENTS AVAILABLE AT REASONABLE BUSINESS HOURS AND FOR REASONABLE PERIODS OF TIME, BUTONLY TO THE EXTENT RELEVANT TO SUCH ACTION, AND (C) IF NECESSARY, BY BEING JOINED AS A PARTY, SUBJECT FORTHIS CLAUSE (C) TO THE CONTROLLING PARTY AGREEING TO INDEMNIFY SUCH NON-CONTROLLING PARTY FOR ITSINVOLVEMENT AS A NAMED PARTY IN SUCH ACTION AND PAYING THOSE REASONABLE, DOCUMENTED, OUT-OF-POCKETCOSTS AND EXPENSES PAID TO OUTSIDE LEGAL COUNSEL, AND FILING AND MAINTENANCE EXPENSES, ACTUALLY ANDREASONABLY INCURRED BY A PARTY IN PROSECUTING AND MAINTAINING PATENTS AND ENFORCING AND DEFENDINGTHEM, INCURRED BY SUCH PARTY IN CONNECTION WITH SUCH JOINDER. THE PARTY CONTROLLING ANY SUCH ACTIONWILL KEEP THE OTHER PARTY UPDATED WITH RESPECT TO ANY SUCH ACTION, INCLUDING PROVIDING COPIES OF ALLdocuments received or filed in connection with any such action. (iii)EACH PARTY WILL HAVE THE RIGHT TO PARTICIPATE OR OTHERWISE BE INVOLVED IN ANY SUCH ACTION CONTROLLEDBY THE OTHER PARTY, IN EACH CASE AT THE PARTICIPATING (I.E., NON-CONTROLLING) PARTY’S SOLE COST ANDEXPENSE. IF A PARTY ELECTS TO SO PARTICIPATE OR BE INVOLVED, THE CONTROLLING PARTY WILL PROVIDE THEPARTICIPATING PARTY AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH THE CONTROLLING PARTY AND ITSCOUNSEL REGARDING THE PROSECUTION OF SUCH ACTION (INCLUDING REVIEWING THE CONTENTS OF ANYCORRESPONDENCE, LEGAL PAPERS OR OTHER DOCUMENTS RELATED THERETO), AND THE CONTROLLING PARTY WILLTAKE INTO ACCOUNT REASONABLE REQUESTS OF THE PARTICIPATING PARTY REGARDING SUCH ENFORCEMENT ORdefense.(e)Settlement. NEITHER PARTY WILL SETTLE OR CONSENT TO AN ADVERSE JUDGMENT IN ANY ACTION DESCRIBED IN THISSECTION 6.5 AND CONTROLLED BY SUCH PARTY, INCLUDING ANY JUDGMENT WHICH AFFECTS THE SCOPE, VALIDITY OR ENFORCEMENT OF ANYPATENTS OWNED BY THE OTHER PARTY, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY (SUCH CONSENT NOT TO BE UNREASONABLYwithheld, delayed or conditioned).(f)Damages. UNLESS OTHERWISE AGREED BY THE PARTIES, ALL MONIES RECOVERED UPON THE FINAL JUDGMENT ORSETTLEMENT OF ANY ACTION WHICH MAY BE CONTROLLED BY EITHER CUREVAC OR ARCTURUS AND DESCRIBED IN SECTION 6.5 IN EACH CASEWILL BE USED FIRST TO REIMBURSE THE CONTROLLING PARTY, THEN THE NON-CONTROLLING PARTY, FOR EACH OF THEIR OUT-OF-POCKET COSTS ANDexpenses relating to the action, with the balance of any such recovery to be retained by the controlling Party.6.6Updates. ARCTURUS SHALL INFORM CUREVAC WITHIN […***…] BUSINESS DAYS IN WRITING OF ANY SIGNIFICANTDEVELOPMENTS WITH RESPECT THE ARCTURUS PROGRAM TECHNOLOGY THAT WOULD REASONABLY BE CONSIDERED TO NEGATIVELY IMPACT THE RIGHTS OFCureVac pursuant to this Agreement or any License Agreement.ARTICLE 7Confidentiality7.1Confidential Information. Each Party ("Disclosing Party") MAY DISCLOSE TO THE OTHER PARTY ("RECEIVING PARTY"),AND RECEIVING PARTY MAY ACQUIRE DURING THE COURSE AND CONDUCT OF ACTIVITIES UNDER THE AGREEMENT, CERTAIN CONFIDENTIAL INFORMATION OFDisclosing Party***Confidential Treatment Requested31 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC IN CONNECTION WITH THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY USE AND DISCLOSE JOINTLY-OWNED PROGRAMTECHNOLOGY IN CONNECTION WITH SUCH PARTY'S PERMITTED EXPLOITATION OF SUCH TECHNOLOGY, PROVIDED THAT THE RECIPIENT IS BOUND BYconfidentiality obligations corresponding to the obligations under this Agreement with respect to the subject matter of this Agreement.7.2Restrictions. DURING THE TERM AND FOR […***…] YEARS THEREAFTER, RECEIVING PARTY WILL KEEP ALL DISCLOSINGPARTY’S CONFIDENTIAL INFORMATION IN CONFIDENCE WITH THE SAME DEGREE OF CARE WITH WHICH RECEIVING PARTY HOLDS ITS OWN CONFIDENTIALINFORMATION, BUT IN NO EVENT LESS THAN REASONABLE CARE. RECEIVING PARTY WILL NOT USE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION EXCEPTFOR IN CONNECTION WITH THE PERFORMANCE OF ITS OBLIGATIONS AND EXERCISE OF ITS RIGHTS UNDER THIS AGREEMENT OR ANY LICENSEAGREEMENT. RECEIVING PARTY HAS THE RIGHT TO DISCLOSE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION WITHOUT DISCLOSING PARTY’S PRIORWRITTEN CONSENT TO RECEIVING PARTY’S AFFILIATES, AND EACH OF THEIR EMPLOYEES, SUBCONTRACTORS (SUBJECT TO SECTION 3.4) AND CONSULTANTS ORAGENTS WHO HAVE A NEED TO KNOW SUCH CONFIDENTIAL INFORMATION IN ORDER TO PERFORM ITS OBLIGATIONS AND EXERCISE ITS RIGHTS UNDER THISAGREEMENT OR ANY LICENSE AGREEMENT AND WHO ARE UNDER WRITTEN OBLIGATION TO COMPLY WITH THE RESTRICTIONS ON USE AND DISCLOSURE THATARE NO LESS RESTRICTIVE THAN THOSE SET FORTH IN THIS ARTICLE 7. RECEIVING PARTY ASSUMES RESPONSIBILITY FOR SUCH ENTITIES AND PERSONSmaintaining Disclosing Party’s Confidential Information in confidence and using same only for the purposes described herein.7.3Exceptions. RECEIVING PARTY’S OBLIGATION OF NONDISCLOSURE AND THE LIMITATIONS UPON THE RIGHT TO USE THEDISCLOSING PARTY’S CONFIDENTIAL INFORMATION WILL NOT APPLY TO A SPECIFIC PORTION OF THE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION TOTHE EXTENT THAT RECEIVING PARTY CAN DEMONSTRATE THAT SUCH PORTION: (I) WAS KNOWN TO RECEIVING PARTY OR ANY OF ITS AFFILIATES PRIOR TO THETIME OF DISCLOSURE BY THE DISCLOSING PARTY WITHOUT OBLIGATION OF CONFIDENTIALITY; (II) IS OR BECOMES PUBLIC KNOWLEDGE THROUGH NO FAULT OROMISSION OF RECEIVING PARTY OR ANY OF ITS AFFILIATES; (III) IS OBTAINED ON A NON-CONFIDENTIAL BASIS BY RECEIVING PARTY OR ANY OF ITSAFFILIATES FROM A THIRD PARTY WHO TO RECEIVING PARTY’S KNOWLEDGE IS LAWFULLY IN POSSESSION THEREOF AND UNDER NO OBLIGATION OFCONFIDENTIALITY TO DISCLOSING PARTY; OR (IV) HAS BEEN INDEPENDENTLY DEVELOPED BY OR ON BEHALF OF RECEIVING PARTY OR ANY OF ITS AFFILIATESWITHOUT THE AID, APPLICATION OR USE OF DISCLOSING PARTY’S CONFIDENTIAL INFORMATION AS DOCUMENTED BY THE INTERNAL RECORDS OF THEReceiving Party.7.4Permitted Disclosures. THE RECEIVING PARTY MAY ONLY USE ANY SUCH CONFIDENTIAL INFORMATION FOR THE PURPOSESOF PERFORMING ITS OBLIGATIONS OR EXERCISING ITS RIGHTS UNDER THIS AGREEMENT. NOTWITHSTANDING THE OBLIGATIONS SET FORTH IN SECTIONS 7.1 AND7.2, A PARTY MAY DISCLOSE THE OTHER PARTY’S CONFIDENTIAL INFORMATION (INCLUDING THIS AGREEMENT AND THE TERMS HEREIN) IN THE FOLLOWINGinstances to the extent reasonably required:(a)IN ORDER TO COMPLY WITH APPLICABLE LAW (INCLUDING ANY SECURITIES LAW OR REGULATION OR THE RULES OF Asecurities exchange) or with a legal or administrative proceeding;(b)IN CONNECTION WITH PROSECUTING OR DEFENDING LITIGATION, AND FILING, PROSECUTING AND ENFORCING PATENTS INconnection with Receiving Party’s rights and obligations pursuant to this Agreement or a License Agreement;(c)to attorneys, accountants, auditors, acquirers, licensees, partners, permitted assignees, financial advisors,investors and lenders, including potential acquirers, licensees, partners, assignees, financial advisors, investors and lenders;***Confidential Treatment Requested32 PROVIDED THAT (1) WHERE REASONABLY POSSIBLE, RECEIVING PARTY WILL NOTIFY DISCLOSING PARTY OF RECEIVING PARTY’S INTENT TOmake any disclosure pursuant to subsections (a) and (b) sufficiently prior to making such disclosure so as to allow DisclosingPARTY REASONABLY ADEQUATE TIME TO TAKE WHATEVER ACTION IT MAY DEEM APPROPRIATE TO PROTECT THE CONFIDENTIALITY OF THEINFORMATION TO BE DISCLOSED, AND (2) WITH RESPECT TO SUBSECTION (C), EACH OF THOSE PERSONS OR ENTITIES ARE REQUIRED TO COMPLYWITH THE RESTRICTIONS ON USE AND DISCLOSURE IN SECTION 7.2 (OTHER THAN FINANCIAL ADVISORS, INVESTORS AND LENDERS, WHICH MUST BEbound prior to disclosure by commercially reasonable obligations of confidentiality).7.5Return of Confidential Information. UPON EXPIRY OR EARLIER TERMINATION OF THE AGREEMENT, UPON WRITTEN REQUESTOF A PARTY (SUCH REQUEST, IF MADE, TO BE MADE WITHIN […***…] MONTHS OF SUCH EXPIRY OR TERMINATION) THE OTHER PARTY WILL DESTROY ORRETURN (AS SHALL BE SPECIFIED IN SUCH REQUEST) TO THE REQUESTING PARTY ALL COPIES OF THE CONFIDENTIAL INFORMATION OF THE REQUESTING PARTY;PROVIDED THAT THE PARTY MAY RETAIN: (I) ONE COPY OF SUCH CONFIDENTIAL INFORMATION FOR RECORD-KEEPING PURPOSES, FOR THE SOLE PURPOSE OFENSURING COMPLIANCE WITH THIS AGREEMENT; (II) ANY COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS REQUIRED TO BE RETAINED UNDERapplicable Law; (iii) any COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS NECESSARY OR USEFUL FOR SUCH PARTY TO EXERCISE A RIGHT OR FULFILL ANOBLIGATION UNDER A LICENSE AGREEMENT, IF ANY, OR AS SET FORTH IN THIS AGREEMENT; AND (IV) ANY COPIES OF ANY COMPUTER RECORDS AND FILESCONTAINING CONFIDENTIAL INFORMATION THAT HAVE BEEN CREATED BY SUCH PARTY’S ROUTINE ARCHIVING/BACKUP PROCEDURES. UPON REQUEST OF THEREQUESTING PARTY, THE RECEIVING PARTY SHALL CONFIRM IN WRITING TO THE REQUESTING PARTY THE DESTRUCTION OR RETURN OF ALL COPIES OF THEConfidential Information of the requesting Party.7.6Publications. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, ARCTURUS SHALL BE PERMITTED TO PUBLISHTHE RESULTS OF A PROGRAM ONLY WITH THE PRIOR WRITTEN CONSENT OF CUREVAC. ARCTURUS SHALL SUBMIT ANY PROPOSED PUBLICATION OF THE RESULTSOF A PROGRAM TO CUREVAC. FOLLOWING RECEIPT OF THE PROPOSED PUBLICATION BY CUREVAC, CUREVAC WILL USE DILIGENT EFFORTS TO PROVIDEWRITTEN APPROVAL OR DISAPPROVAL, AT CUREVAC’S DISCRETION, WITHIN […***…] DAYS. EXPEDITED REVIEWS FOR ABSTRACTS OR POSTERPRESENTATIONS, OR FOR OTHER PUBLICATIONS THAT MAY RELATE TO POTENTIAL PATENT APPLICATIONS, MAY BE ARRANGED IF MUTUALLY AGREEABLE TO THEPARTIES. CUREVAC IS PERMITTED TO PUBLISH THE RESULTS OF A PROGRAM PROVIDED, HOWEVER, THAT IT WILL NOT DISCLOSE ARCTURUS CONFIDENTIALINFORMATION IN ANY PUBLICATION BY CUREVAC OF THE RESULTS OF A PROGRAM OR ANY LICENSED PRODUCT DEVELOPMENT BY CUREVAC WITHOUTARCTURUS’ PRIOR WRITTEN CONSENT, WHICH WILL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED IN THE EVENT SUCH ARCTURUSConfidential Information is reasonably required to support the results of a Program so published. 7.7TERMS OF THIS AGREEMENT; PRESS RELEASE. THE PARTIES AGREE THAT THE EXISTENCE AND TERMS OF THE PARTIES’relationship and this Agreement will be treated as Confidential Information of both Parties, and thus may be disclosed only as permittedBY SECTION 7.4. EXCEPT AS MUTUALLY AGREED OR OTHERWISE REQUIRED BY LAW OR SECURITIES EXCHANGE REGULATION, EACH PARTY AGREES NOT TOISSUE ANY PRESS RELEASE OR PUBLIC STATEMENT DISCLOSING INFORMATION RELATING TO THE EXISTENCE OF THIS AGREEMENT OR THE TRANSACTIONScontemplated hereby or the terms hereof without the prior written consent of the other Party.ARTICLE 8***Confidential Treatment Requested33 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Warranties; Limitations of Liability; Indemnification8.1Representations and Warranties. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER AS OF THE EFFECTIVE DATE THAT(A) IT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION IN WHICH IT ISINCORPORATED, (B) IT HAS THE LEGAL RIGHT AND POWER TO ENTER INTO THIS AGREEMENT, TO EXTEND THE RIGHTS AND LICENSES GRANTED OR TO BE GRANTEDTO THE OTHER IN THIS AGREEMENT, AND TO FULLY PERFORM ITS OBLIGATIONS HEREUNDER, (C) IT HAS TAKEN ALL NECESSARY CORPORATE ACTION ON ITS PARTREQUIRED TO AUTHORIZE THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER (D) THIS AGREEMENTHAS BEEN DULY EXECUTED AND DELIVERED ON BEHALF OF SUCH PARTY, AND CONSTITUTES A LEGAL, VALID, AND BINDING OBLIGATION OF SUCH PARTY THAT ISENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, AND (E) THE EXECUTION, DELIVERY AND PERFORMANCE BY A PARTY OF THIS AGREEMENT ANDTHE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT RESULT IN ANY VIOLATION OF, CONFLICT WITH, RESULT IN A BREACH OF ORconstitute a default under any understanding, contract or agreement to which such Party is a party or by which it is bound.8.2ADDITIONAL REPRESENTATIONS AND COVENANTS OF ARCTURUS. ARCTURUS HEREBY REPRESENTS AND WARRANTS TOCureVac as of the Effective Date as follows:(a)Impairment. NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS ENTERED INTO ANY AGREEMENT OR OTHERWISElicensed, granted, assigned, transferred, conveyed orOTHERWISE ENCUMBERED OR DISPOSED OF ANY RIGHT, TITLE OR INTEREST IN OR TO ANY OF ITS ASSETS, INCLUDING ANY INTELLECTUAL PROPERTYRIGHTS INCLUDING KNOW-HOW, THAT (I) CONFLICTS WITH OR IMPAIRS THE SCOPE OF ANY RIGHTS OR LICENSES GRANTED TO CUREVACHEREUNDER OR (II) TO THE KNOWLEDGE OF ARCTURUS, WOULD OTHERWISE CONFLICT WITH OR LIMIT RIGHTS THAT WOULD BE GRANTED TOCureVac under any License Agreement.(b)Patents. EXHIBIT 1.3 SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL PATENTS INCLUDED IN THE ARCTURUSBACKGROUND TECHNOLOGY, INDICATING ANY LICENSOR AND/OR CO-OWNER(S), IF APPLICABLE. ARCTURUS IS ENTITLED TO GRANT TO CUREVACTHE LICENSES TO THE PATENTS AND THE KNOW-HOW WITHIN THE ARCTURUS BACKGROUND TECHNOLOGY FOR THE PURPOSES OF THISAGREEMENT, INCLUDING TO ENTER INTO A LICENSE AGREEMENT, SUBJECT TO THE RIGHTS OF ARCTURUS AND ITS AFFILIATES TO GRANT TO ATHIRD PARTY A NON-EXCLUSIVE, CO-EXCLUSIVE OR AN EXCLUSIVE LICENSE OR OPTION WITH RESPECT TO A TARGET. TO ARCTURUS’KNOWLEDGE, THE PATENTS LISTED ON Exhibit 1.3 HAVE BEEN PROCURED OR ARE BEING PROCURED FROM THE RESPECTIVE PATENT OFFICES INACCORDANCE WITH APPLICABLE LAW. NONE OF THE PATENTS INCLUDED IN THE ARCTURUS BACKGROUND TECHNOLOGY LISTED ON Exhibit1.3 IS OR HAS BEEN INVOLVED IN ANY OPPOSITION, CANCELLATION, INTERFERENCE, REISSUE OR REEXAMINATION PROCEEDING, AND TOARCTURUS’ KNOWLEDGE AS OF THE EFFECTIVE DATE, NO ARCTURUS BACKGROUND TECHNOLOGY IS THE SUBJECT OF ANY JUDICIAL,ADMINISTRATIVE OR ARBITRAL ORDER, AWARD, DECREE, INJUNCTION, LAWSUIT, PROCEEDING OR STIPULATION. AS OF THE EFFECTIVE DATE,NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS RECEIVED ANY NOTICE ALLEGING THAT THE PATENTS IN THE ARCTURUS BACKGROUNDTECHNOLOGY LISTED ON EXHIBIT 1.3 ARE INVALID OR UNENFORCEABLE, OR CHALLENGING ARCTURUS’ OWNERSHIP OF OR RIGHT TO USE ANYsuch rights.(c)Arcturus LMD Technology. THE ARCTURUS LMD TECHNOLOGY LICENSED TO CUREVAC UNDER THISAGREEMENT COMPRISES ALL ARCTURUS LMD TECHNOLOGY CONTROLLED BY ARCTURUS (I) WHICH IS NECESSARY OR USEFUL FOR PURPOSES OFTHIS AGREEMENT AND (II) TO THE KNOWLEDGE OF ARCTURUS, WHICH WOULD BE NECESSARY OR USEFUL FOR PURPOSES OF A LICENSEAgreement.34 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC (d)Encumbrances. IT HAS THE RIGHT TO GRANT THE LICENSE AND RIGHTS HEREIN TO CUREVAC AND IT HAS NOT GRANTEDANY LIENS, SECURITY INTEREST, ENCUMBRANCE, LICENSE, RIGHT OR INTEREST IN, TO OR UNDER THE ARCTURUS BACKGROUND TECHNOLOGY TOany Third Party that is inconsistent with the license granted to CureVac under Section 3.1.(e)Litigation. THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OFARCTURUS, CURRENTLY THREATENED AGAINST OR AFFECTING ARCTURUS THAT QUESTIONS THE VALIDITY OF THIS AGREEMENT OR THE RIGHT OFARCTURUS TO ENTER INTO THIS AGREEMENT OR CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY OR THAT RELATES TO THE ARCTURUSLMD Technology.(f)Infringement. NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS RECEIVED ANY WRITTEN NOTICE OF ANY CLAIMTHAT, NOR DOES ARCTURUS OR ITS AFFILIATES HAVE ANY KNOWLEDGE OF ANY CLAIM, ANY PATENT, KNOW-HOW OR OTHER INTELLECTUALPROPERTY OWNED OR CONTROLLED BY A THIRD PARTY WOULD BE INFRINGED OR MISAPPROPRIATED BY THE PRACTICE OF ANY ARCTURUS LMDTECHNOLOGY (I) IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT AND (II) TO THE KNOWLEDGE OF ARCTURUS, WITH RESPECT TOany product under a License Agreement.(g)Third Party Infringement. TO ARCTURUS' KNOWLEDGE, NO THIRD PARTY IS INFRINGING OR HAS INFRINGED ANYPATENT WITHIN THE ARCTURUS LMD TECHNOLOGY OR IS MISAPPROPRIATING OR HAS MISAPPROPRIATED ANY KNOW-HOW WITHIN THEArcturus LMD Technology.8.3Mutual Covenants.(a)NO DEBARMENT. IN THE COURSE OF THE PERFORMANCE BY THE PARTIES, NEITHER PARTY NOR ITS AFFILIATES SHALLUSE ANY EMPLOYEE OR CONSULTANT WHO HAS BEEN DEBARRED BY ANY REGULATORY AUTHORITY OR, TO SUCH PARTY’S OR ITS AFFILIATES’ KNOWLEDGE, ISTHE SUBJECT OF DEBARMENT PROCEEDINGS BY A REGULATORY AUTHORITY. EACH PARTY SHALL NOTIFY THE OTHER PARTY PROMPTLY UPON BECOMING AWARETHAT ANY OF ITS OR ITS AFFILIATES’ EMPLOYEES OR CONSULTANTS HAS BEEN DEBARRED OR IS THE SUBJECT OF DEBARMENT PROCEEDINGS BY ANYregulatory authority.(b)Compliance. EACH PARTY AND ITS AFFILIATES SHALL COMPLY IN ALL MATERIAL RESPECTS WITH ALL APPLICABLELaws (including all anti-bribery laws) in the performance of its obligations under this Agreement.8.4NO OTHER WARRANTIES. EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 8, (A) NOREPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OFARCTURUS OR CUREVAC; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BYOPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONSAND WARRANTIES OF MERCHANTABILITY, POTENTIAL FOR SUCCESS OF A PROGRAM, FITNESS FOR APARTICULAR PURPOSE OR NON-INFRINGEMENT. 8.5NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR OTHERWISE, NEITHER PARTY WILL BELIABLE TO THE OTHER OR ANY THIRD PARTY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES,PROVIDED THAT THIS SECTION 8.5 WILL NOT APPLY TO BREACHES OF ARTICLE 6 OR 7 OR THE PARTIES’ INDEMNIFICATION RIGHTS OR OBLIGATIONS UNDERSection 8.7, or in the event of willful misconduct. 35 8.6PERFORMANCE BY Others. The Parties recognize that each Party may perform some or all of its obligations underthis Agreement through Affiliates, permitted subcontractors or other permitted Third Parties, provided, however, that each Party willremain fully responsible and liable for the performance by its Affiliates and/or permitted subcontractors and Third Parties and will causeits Affiliates, permitted subcontractors or other permitted Third Parties to comply with the provisions of this Agreement in connectiontherewith.8.7Indemnification.(a)Indemnification by Arcturus. Arcturus will indemnify CureVac, its Affiliates and their respectivedirectors, officers, employees, Third Party licensors and agents, and their respective successors, heirs and assigns(collectively, "CureVac Indemnitees"), and defend and hold each of them harmless, from and against any and all losses,damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, "Losses") inconnection with any and all suits, investigations, claims or demands of Third Parties (collectively, "Third Party Claims")against the CureVac Indemnitees to the extent arising from or occurring as a result of: (i) the breach of any representation or warranty by Arcturus under this Agreement; or (ii) any gross negligence orwillful misconduct on the part of any Arcturus Indemnitee; or (iii) any alleged infringement or misappropriation ofPatents or other intellectual property rights by CureVac in the conduct of the Work Plan based solely on CureVac’suse of Arcturus LMD Technology as permitted hereunder (excluding, for clarity, infringement of Patents, Know-How or Materials covering CureVac Technology used by CureVac in the performance of the Work Plan), except ineach of cases (i)-(iii) to the extent arising from or occurring as a result of the gross negligence or willful misconducton the part of a CureVac Indemnitee or CureVac’s breach of this Agreement.(b)Indemnification by CureVac. CureVac will indemnify Arcturus, its Affiliates and their respectivedirectors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, "ArcturusIndemnitees"), and defend and hold each of them harmless, from and against any and all Losses in connection with any andall Third Party Claims against Arcturus Indemnitees to the extent arising from or occurring as a result of: (i) the breach byCureVac of any representation or warranty under this Agreement; or (ii) any gross negligence or willful misconduct on thepart of any CureVac Indemnitee; or (iii) any alleged infringement or misappropriation of Patents or other intellectual propertyrights by Arcturus in the conduct of the Work Plan based solely on Arcturus’ use of CureVac Technology as permittedhereunder (excluding, for clarity, infringement of Arcturus LMD Technology used by Arcturus in the performance of theWork Plan), except in each of cases (i)-(iii) to the extent arising from or occurring as a result of the gross negligence orwillful misconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this Agreement.(c)Notice of Claim. All indemnification claims provided for in subsections (a) and (b) above will be madesolely by such Party to this Agreement (the "Indemnified Party"). The Indemnified Party will promptly notify theindemnifying Party (an "Indemnification Claim Notice") of any Losses or the discovery of any fact upon which theIndemnified Party intends to base a request for indemnification under subsections (a) or (b) above but in no event will theindemnifying Party bE LIABLE FOR ANY LOSSES THAT RESULT FROM ANY DELAY IN PROVIDING SUCH NOTICE. EACH INDEMNIFICATION CLAIMNotice 36 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC MUST CONTAIN A DESCRIPTION OF THE CLAIM AND THE NATURE AND AMOUNT OF SUCH LOSS (TO THE EXTENT THAT THE NATURE AND AMOUNT OFSUCH LOSS IS KNOWN AT SUCH TIME). THE INDEMNIFIED PARTY WILL FURNISH PROMPTLY TO THE INDEMNIFYING PARTY COPIES OF ALLpapers and official documents received in respect of any Losses and Third Party Claims.(d)Defense, Settlement, Cooperation and Expenses. (i)CONTROL OF DEFENSE. AT ITS OPTION, THE INDEMNIFYING PARTY MAY ASSUME THE DEFENSE OF ANY THIRDPARTY CLAIM BY GIVING WRITTEN NOTICE TO THE INDEMNIFIED PARTY WITHIN […***…] DAYS AFTER THEINDEMNIFYING PARTY’S RECEIPT OF AN INDEMNIFICATION CLAIM NOTICE. THE ASSUMPTION OF THE DEFENSE OFA THIRD PARTY CLAIM BY THE INDEMNIFYING PARTY WILL NOT BE CONSTRUED AS AN ACKNOWLEDGMENT THAT THEindemnifying Party is liable toINDEMNIFY THE INDEMNIFIED PARTY IN RESPECT OF THE THIRD PARTY CLAIM, NOR WILL IT CONSTITUTE A WAIVER BYTHE INDEMNIFYING PARTY OF ANY DEFENSES IT MAY ASSERT AGAINST THE INDEMNIFIED PARTY’S CLAIM FORINDEMNIFICATION. UPON ASSUMING THE DEFENSE OF A THIRD PARTY CLAIM, THE INDEMNIFYING PARTY MAYAPPOINT AS LEAD COUNSEL IN THE DEFENSE OF THE THIRD PARTY CLAIM ANY LEGAL COUNSEL SELECTED BY THEINDEMNIFYING PARTY (THE INDEMNIFYING PARTY WILL CONSULT WITH THE INDEMNIFIED PARTY WITH RESPECT TOSUCH LEGAL COUNSEL AND A POSSIBLE CONFLICT OF INTEREST OF SUCH COUNSEL RETAINED BY THE INDEMNIFYINGPARTY). IN THE EVENT THE INDEMNIFYING PARTY ASSUMES THE DEFENSE OF A THIRD PARTY CLAIM, THEINDEMNIFIED PARTY WILL AS SOON AS PRACTICABLE DELIVER TO THE INDEMNIFYING PARTY ALL ORIGINAL NOTICES ANDDOCUMENTS (INCLUDING COURT PAPERS) RECEIVED BY THE INDEMNIFIED PARTY IN CONNECTION WITH THE THIRDPARTY CLAIM. IN THE EVENT THAT IT IS ULTIMATELY DETERMINED THAT THE INDEMNIFYING PARTY IS NOT OBLIGATED TOINDEMNIFY, DEFEND OR HOLD HARMLESS THE INDEMNIFIED PARTY FROM AND AGAINST THE THIRD PARTY CLAIM, THEINDEMNIFIED PARTY WILL REIMBURSE THE INDEMNIFYING PARTY FOR ANY AND ALL COSTS AND EXPENSES (INCLUDINGREASONABLE ATTORNEYS’ FEES AND COSTS OF SUIT) AND ANY THIRD PARTY CLAIMS INCURRED BY THE INDEMNIFYINGParty in its defense of the Third Party Claim. (ii)RIGHT TO PARTICIPATE IN DEFENSE. WITHOUT LIMITING SUBSECTION (I) ABOVE, ANY INDEMNIFIED PARTY WILLBE ENTITLED TO PARTICIPATE IN, BUT NOT CONTROL, THE DEFENSE OF SUCH THIRD PARTY CLAIM AND TO ENGAGECOUNSEL OF ITS CHOICE FOR SUCH PURPOSE; PROVIDED, HOWEVER, THAT SUCH ENGAGEMENT WILL BE AT THEINDEMNIFIED PARTY’S OWN COST AND EXPENSE UNLESS (A) THE INDEMNIFYING PARTY HAS FAILED TO PROMPTLYASSUME THE DEFENSE AND ENGAGE COUNSEL IN ACCORDANCE WITH SUBSECTION (I) ABOVE (IN WHICH CASE THEINDEMNIFIED PARTY WILL CONTROL THE DEFENSE) OR (B) THE INTERESTS OF THE INDEMNIFIED PARTY AND THEINDEMNIFYING PARTY WITH RESPECT TO SUCH THIRD PARTY CLAIM ARE SUFFICIENTLY ADVERSE TO PROHIBIT THEREPRESENTATION BY THE SAME COUNSEL OF BOTH PARTIES UNDER APPLICABLE LAW, ETHICAL RULES OR EQUITABLEPRINCIPLES, IN WHICH CASE THE INDEMNIFYING PARTY WILL ASSUME ONE HUNDRED PERCENT (100%) OF ANYreasonable costs and expenses of counsel for the Indemnified Party. (iii)Settlement. WITH RESPECT TO ANY THIRD PARTY CLAIMS THAT RELATE SOLELY TO THE PAYMENT OF MONEYDAMAGES IN CONNECTION WITH A THIRD PARTY CLAIM AND THAT WILL NOT RESULT IN THE INDEMNIFIED PARTY’Sbecoming subject***Confidential Treatment Requested37 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC TO INJUNCTIVE OR OTHER RELIEF OR OTHERWISE ADVERSELY AFFECTING THE BUSINESS, PATENTS OR TECHNOLOGY OF THEINDEMNIFIED PARTY IN ANY MANNER, AND AS TO WHICH THE INDEMNIFYING PARTY WILL HAVE ACKNOWLEDGED INWRITING THE OBLIGATION TO INDEMNIFY THE INDEMNIFIED PARTY HEREUNDER, THE INDEMNIFYING PARTY WILL HAVETHE SOLE RIGHT TO CONSENT TO THE ENTRY OF ANY JUDGMENT, ENTER INTO ANY SETTLEMENT OR OTHERWISE DISPOSE OFSUCH LOSS, ON SUCH TERMS AS THE INDEMNIFYING PARTY, IN ITS SOLE DISCRETION, WILL DEEM APPROPRIATE. WITHRESPECT TO ALL OTHER LOSSES IN CONNECTION WITH THIRD PARTY CLAIMS, WHERE THE INDEMNIFYING PARTY HASASSUMED THE DEFENSE OF THE THIRD PARTY CLAIM IN ACCORDANCE WITH SUBSECTION (I) ABOVE, THEINDEMNIFYING PARTY WILL HAVE AUTHORITY TO CONSENT TO THE ENTRY OF ANY JUDGMENT, ENTER INTO ANYSETTLEMENT OR OTHERWISE DISPOSE OF SUCH LOSS PROVIDED IT OBTAINS THE PRIOR WRITTEN CONSENT OF THEINDEMNIFIED PARTY (WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD, CONDITIONED OR DELAYED). THEINDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY SETTLEMENT OR OTHER DISPOSITION OF A LOSS BY ANINDEMNIFIED PARTY THAT IS REACHED WITHOUT THE WRITTEN CONSENT OF THE INDEMNIFYING PARTY. REGARDLESS OFWHETHER THE INDEMNIFYING PARTY CHOOSES TO DEFEND OR PROSECUTE ANY THIRD PARTY CLAIM, NO INDEMNIFIEDPARTY WILL ADMIT ANY LIABILITY WITH RESPECT TO OR SETTLE, COMPROMISE OR DISCHARGE, ANY THIRD PARTY CLAIMwithout the prior written consent of the indemnifying Party. (iv)Cooperation. REGARDLESS OF WHETHER THE INDEMNIFYING PARTY CHOOSES TO DEFEND ANY THIRD PARTYCLAIM, THE INDEMNIFIED PARTY WILL, AND WILL USE DILIGENT EFFORTS TO CAUSE EACH OTHER INDEMNIFIEDPARTY TO, COOPERATE IN THE DEFENSE OR PROSECUTION THEREOF AND WILL FURNISH SUCH RECORDS, INFORMATIONAND TESTIMONY, PROVIDE SUCH WITNESSES AND ATTEND SUCH CONFERENCES, DISCOVERY PROCEEDINGS,HEARINGS, TRIALS AND APPEALS AS MAY BE REASONABLY REQUESTED IN CONNECTION THEREWITH AT THEINDEMNIFYING PARTY’S EXPENSE. SUCH COOPERATION WILL INCLUDE ACCESS DURING NORMAL BUSINESS HOURSafforded to the indemnifying Party to, and reasonable retention by the Indemnified Party of, recordsAND INFORMATION THAT ARE REASONABLY RELEVANT TO SUCH THIRD PARTY CLAIM, AND MAKING INDEMNIFIEDPARTIES AND OTHER EMPLOYEES AND AGENTS AVAILABLE ON A MUTUALLY CONVENIENT BASIS TO PROVIDEADDITIONAL INFORMATION AND EXPLANATION OF ANY MATERIAL PROVIDED HEREUNDER, AND THE INDEMNIFYINGParty will reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses inconnection therewith. (v)COSTS AND EXPENSES. EXCEPT AS PROVIDED ABOVE IN THIS SECTION 8.7, THE COSTS AND EXPENSES,INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES, INCURRED BY THE INDEMNIFIED PARTY IN CONNECTIONWITH ANY CLAIM WILL BE REIMBURSED ON A CALENDAR QUARTER BASIS BY THE INDEMNIFYING PARTY, WITHOUTPREJUDICE TO THE INDEMNIFYING PARTY’S RIGHT TO CONTEST THE INDEMNIFIED PARTY’S RIGHT TOindemnification and subject to refund in the event the indemnifying Party is ultimately held not to beobligated to indemnify the Indemnified Party.8.8Insurance. EACH PARTY WILL MAINTAIN AT ITS SOLE COST AND EXPENSE, AN ADEQUATE LIABILITY INSURANCE OR SELF-INSURANCEprogram to protect against potential liabilities and risk 38 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC ARISING OUT OF ACTIVITIES TO BE PERFORMED UNDER THIS AGREEMENT AND ANY AGREEMENT RELATED HERETO AND UPON SUCH TERMS (INCLUDINGCOVERAGES, DEDUCTIBLE LIMITS AND SELF-INSURED RETENTIONS) AS ARE CUSTOMARY IN THE RESPECTIVE INDUSTRY OF SUCH PARTY FOR THE ACTIVITIES TO BECONDUCTED BY SUCH PARTY UNDER THIS AGREEMENT. THE COVERAGE LIMITS SET FORTH IN ANY SUCH PROGRAMS OR POLICIES WILL NOT CREATE ANYlimitation on a Party’s liability to the other under this Agreement.ARTICLE 9Term and Termination9.1Term. (a)THIS AGREEMENT WILL COMMENCE AS OF THE EFFECTIVE DATE AND, UNLESS SOONER TERMINATED OR EXTENDED INACCORDANCE WITH THE TERMS HEREOF OR BY MUTUAL WRITTEN CONSENT, WILL CONTINUE FOR A PERIOD OF EIGHT (8) YEARS (THE "INITIAL TERM", as may be extended pursuant to Section 9.1(b), the “Term”). (b)Not later than sixty (60) days prior to the expiration of the Initial Term, CUREVAC SHALL HAVE THE OPTION TOEXTEND THE TERM ON AN ANNUAL BASIS FOR UP TO THREE (3) YEARS, BY PROVIDING WRITTEN NOTICE TO ARCTURUS, SUBJECT TO PAYMENT BYCUREVAC TO ARCTURUS OF A NON-REFUNDABLE ANNUAL EXTENSION FEE OF […***…], PAYABLE WITHIN […***…] BUSINESS DAYS AFTERexercise of such option.(c)THE PARTIES AGREE THAT THIS AGREEMENT AND THE CO-DEVELOPMENT AGREEMENT RELATE TO DIFFERENT PROJECTSAND, THEREFORE, THE VALIDITY, TERM AND TERMINATION OF THIS AGREEMENT SHALL BE INDEPENDENT FROM THE VALIDITY, TERM ANDtermination of the Co-Development Agreement.9.2Termination by CureVac.(a)Breach, Change of Control. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN FULL OR ON AProgram-by-Program basis upon delivery of written notice to Arcturus in the event of (i)any material breach by Arcturus(A)OF ANY TERMS AND CONDITIONS OF THIS AGREEMENT, PROVIDED THAT SUCH BREACH HASNOT BEEN CURED WITHIN SIXTY (60) DAYS AFTER WRITTEN NOTICE THEREOF IS GIVEN BY CUREVAC TOArcturus specifying in reasonable detail the nature of the alleged breach; or(B)IN PARTICULAR THE FAILURE OF THE ESCROW AGENT TO SEND THE TARGET RESPONSE NOTICEWITHIN THE PERIOD PROVIDED FOR IN SECTION 4.2(C)(I), PROVIDED THAT SUCH FAILURE HAS NOT BEENCURED NEITHER WITHIN A FIRST CURE PERIOD OF FIVE (5) BUSINESS DAYS AFTER WRITTEN NOTICE THEREOFIS GIVEN BY CUREVAC TO ARCTURUS NOR WITHIN A SECOND CURE PERIOD OF FIVE (5) BUSINESS DAYSafter written notice of the lapse of the first cure period is given by CureVac to Arcturus, or***Confidential Treatment Requested39 (ii)a Change of Control of Arcturus.IN THE EVENT OF A TERMINATION OF THIS AGREEMENT OR A PROGRAM UNDER THIS SUBSECTION, (I) THE JDC WILL BE DISBANDED OR, IFAPPLICABLE, CEASE TO BE RESPONSIBLE FOR THE TERMINATED PROGRAMS, (II) ARCTURUS WILL RECEIVE NO FURTHER ARCTURUS FTE FUNDING(IF APPLICABLE, FOR THE TERMINATED PROGRAMS), AND (III) ARCTURUS WILL CONDUCT A TECHNOLOGY TRANSFER OF ARCTURUS TECHNOLOGYEXISTING AT THE TIME OF SUCH TRANSFER AND PROVIDE NECESSARY LICENSES TO CUREVAC OR ITS THIRD PARTY DESIGNEE EACH ASREASONABLY NECESSARY FOR CUREVAC OR SUCH THIRD PARTY DESIGNEE TO COMPLETE THE CONDUCT OF A PROGRAM, AND (IV) THE OPTIONExercise Fee and the payments under the License Agreement(s) (ifAPPLICABLE, IN RELATION TO THE TERMINATED PROGRAMS) WILL BE REDUCED BY […***…]%. FOR AVOIDANCE OF DOUBT, TERMINATION OFTHE AGREEMENT OR A PROGRAM WILL NOT TERMINATE CUREVAC’S RESERVATION OF RESERVED TARGETS OR THE OPTIONS SUBJECT TO THEPAYMENTS ASSOCIATED THEREWITH. FOR CLARITY, EXCEPT IN CASES OF WILLFUL MISCONDUCT, THE REMEDY SET FORTH IN THIS SECTION 9.2(A)SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF CUREVAC UNDER THIS AGREEMENT (I.E., WITHOUT LIMITATION OF ANY REMEDIES THAT MAYBE SEPARATELY AVAILABLE UNDER ANY LICENSE AGREEMENT) IN THE EVENT THAT CUREVAC ELECTS TO TERMINATE A PROGRAM BUT OTHERWISEcontinue the Agreement in effect.IN THE EVENT OF A CHANGE OF CONTROL OF ARCTURUS, CUREVAC SHALL decide, no later THAN THE LATER OF: (I) TEN (10) BUSINESS DAYS’WRITTEN NOTICE FOLLOWING THE RECEIPT OF A WRITTEN NOTIFICATION THAT THE CLOSING DATE OF SUCH CHANGE OF CONTROL HAS OCCURRED OR(II) […***…] MONTHS WRITTEN NOTICE FOLLOWING THE RECEIPT OF A WRITTEN NOTIFICATION THAT THE SIGNING DATE OF SUCH CHANGE OFCONTROL HAS OCCURRED, TO (A) TERMINATE THIS AGREEMENT, (B) TO CONTINUE THIS AGREEMENT AND ELECT (AS SET FORTH IN SUCH WRITTENNOTICE) TO HAVE THE JDC DISBANDED AND ARCTURUS TO UNDERTAKE A TECHNOLOGY TRANSFER AND PROVIDE NECESSARY LICENSES TOCUREVAC OR ITS THIRD PARTY DESIGNEE EACH AS REASONABLY NECESSARY FOR CUREVAC OR SUCH THIRD PARTY DESIGNEE TO COMPLETE THECONDUCT OF ANY THEN ONGOING PROGRAMS IN ACCORDANCE WITH THE WORK PLAN; OR (C) CONTINUE THE AGREEMENT AND RECEIVEREASONABLE ASSURANCE IN WRITING FROM THE ACQUIRER THAT THE CUREVAC CONFIDENTIAL INFORMATION IS NOT SHARED WITH ANY OTHERENTITIES WITHIN THE ACQUIRER’S GROUP THAT ARE NOT REQUIRED TO MANAGE, PERFORM AND EXERCISE ARCTURUS’ RIGHTS AND OBLIGATIONSunder this Agreement.(b)Discretionary Termination. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN FULL AT ANYTIME WITHOUT CAUSE BY GIVING SIXTY (60) DAYS’ PRIOR WRITTEN NOTICE TO ARCTURUS. UPON TERMINATION BY CUREVAC PURSUANT TO THISSUBSECTION, CUREVAC WILL PAY TO ARCTURUS ANY AMOUNTS PAYABLE TO ARCTURUS FOR ANY WORK PERFORMED PURSUANT TO THE WORKPLAN UP THROUGH THE DATE OF SUCH TERMINATION, SUBJECT TO ARCTURUS’ TRANSFER OF ALL DELIVERABLES UNDER THE WORK PLAN TOCureVac.9.3TERMINATION BY ARCTURUS. ARCTURUS WILL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN FULL UPON DELIVERY OFWRITTEN NOTICE TO CUREVAC IN THE EVENT OF (I) ANY MATERIAL BREACH BY CUREVAC OF ANY TERMS AND CONDITIONS OF THIS AGREEMENT, PROVIDEDTHAT SUCH BREACH HAS NOT BEEN CURED WITHIN SIXTY (60) DAYS AFTER WRITTEN NOTICE THEREOF IS GIVEN BY ARCTURUS TO CUREVAC SPECIFYING INREASONABLE DETAIL THE NATURE OF THE ALLEGED BREACH. CUREVAC HEREBY AGREES THAT ARCTURUS IS ENTITLED TO RECEIVE PAYMENT OF ANY AMOUNTSPAYABLE TO ARCTURUS PURSUANT TO THIS AGREEMENT, INCLUDING AMOUNTS FOR ANY WORK PERFORMED PURSUANT TO THE WORK PLAN, UP THROUGH THEDATE OF SUCH TERMINATION. FOR CLARITY, A BREACH BY CUREVAC UNDER THIS AGREEMENT SHALL NOT CONSTITUTE A BREACH UNDER A LICENSEAgreement unless such breach is also separately a breach pursuant to such License Agreement.***Confidential Treatment Requested40 9.4TERMINATION UPON BANKRUPTCY. ALL RIGHTS AND LICENSES GRANTED UNDER OR PURSUANT TO THIS AGREEMENT BYARCTURUS OR CUREVAC OR THEIR AFFILIATES ARE, AND WILL OTHERWISE BE DEEMED TO BE, FOR PURPOSES OF SECTION 365(N) OF THE U.S. BANKRUPTCYCODE, LICENSES OF RIGHT TO "INTELLECTUAL PROPERTY" AS DEFINED UNDER SECTION 101 OF THE U.S. BANKRUPTCY CODE. THE PARTIES AGREE THAT THEPARTIES AND THEIR RESPECTIVE AFFILIATES AND PERMITTED THIRD PARTY SUBLICENSEES, AS LICENSEES OF SUCH RIGHTS UNDER THIS AGREEMENT, WILLRETAIN AND MAY FULLY EXERCISE ALL OF THEIR RIGHTS AND ELECTIONS UNDER THE U.S. BANKRUPTCY CODE AND ANY FOREIGN COUNTERPARTSTHERETO. WITHOUT LIMITING THE PARTIES’ RIGHTS UNDER SECTION 365(N) OF THE U.S BANKRUPTCY CODE, IF A CASE UNDER U.S. BANKRUPTCY CODEIS COMMENCED BY OR AGAINST A PARTY, THE OTHER PARTY SHALL BE ENTITLED TO A COPY OF ANY AND ALL SUCH INTELLECTUAL PROPERTY AND ALLEMBODIMENTS OF SUCH INTELLECTUAL PROPERTY, AND THE SAME, IF NOT IN THE POSSESSION OF SUCH OTHER PARTY, SHALL BE PROMPTLY DELIVERED TO IT(i) before this Agreement is rejected by or on behalf of the bankrupt Party, within thirty (30) days after the other Party’s written request,UNLESS THE BANKRUPT PARTY, OR ITS TRUSTEE OR RECEIVER, ELECTS WITHIN THIRTY (30) DAYS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS UNDER THISAGREEMENT, OR (II) AFTER ANY REJECTION OF THIS AGREEMENT BY OR ON BEHALF OF THE BANKRUPT PARTY, IF NOT PREVIOUSLY DELIVERED AS PROVIDEDUNDER CLAUSE (I) ABOVE. ALL RIGHTS OF THE PARTIES UNDER THIS SECTION 9.4 AND UNDER SECTION 365(N) OF THE U.S. BANKRUPTCY CODE ARE INADDITION TO AND NOT IN SUBSTITUTION OF ANY AND ALL OTHER RIGHTS, POWERS, AND REMEDIES THAT EACH PARTY MAY HAVE UNDER THIS AGREEMENT,UNDER THE U.S. BANKRUPTCY CODE, AND ANY OTHER APPLICABLE LAWS. THE NON-BANKRUPT PARTY SHALL HAVE THE RIGHT TO PERFORM THEOBLIGATIONS OF THE BANKRUPT PARTY HEREUNDER WITH RESPECT TO SUCH INTELLECTUAL PROPERTY, BUT NEITHER SUCH PROVISION NOR SUCH PERFORMANCEby the non-bankrupt Party shall release the bankrupt Party from any such obligation or liability for failing to perform it.9.5 Effects of Termination. Upon termination by:(a)CUREVAC UNDER SECTIONS 9.2 OR 9.4, (I) ARCTURUS WILL TERMINATE ALL WORK IN PROGRESS IN AN ORDERLY MANNERAS SOON AS PRACTICABLE AND TRANSFER ALL DELIVERABLES UNDER THE WORK PLAN TO CUREVAC IN ITS CONTROL IN THE STATE OF SUCHDELIVERABLE AS OF THE EFFECTIVE DATE OF TERMINATION; (II) EACH OF THE PARTIES WILL RETURN OR DESTROY ANY MATERIALS OF THE OTHER PARTYIN ITS CONTROL, BASED UPON WRITTEN INSTRUCTIONS FROM THE OTHER PARTY WITHIN […***…] DAYS OF THE EFFECTIVE DATE OF TERMINATION,UNLESS SUCH MATERIAL IS NECESSARY OR USEFUL FOR THE EXERCISE OF A PARTY'S RIGHTS OR OBLIGATIONS UNDER A LICENSE AGREEMENT INWHICH EVENT THE PARTY RETAINING THE MATERIAL WILL NOTIFY THE OTHER PARTY OF RETENTION PURSUANT TO THE REQUIREMENTS OF AND SUBJECTTO SUCH LICENSE AGREEMENT; AND (III) ALL RIGHTS AND LICENSES PURSUANT TO THIS AGREEMENT EXCEPT WITH RESPECT TO ANY THENEXISTING PROGRAMS (FOR WHICH LICENSES TO CUREVAC OR ITS THIRD PARTY DESIGNEE SHALL BE GRANTED TO COMPLETE THE PROGRAM ANDENTER INTO A LICENSE AGREEMENT UNDER THE TERMS OF SECTION 9.2(A)(II)) SHALL TERMINATE AND BE OF NO FURTHER FORCE AND EFFECT, ITbeing understood that termination hereunder shall not affect any then existing License Agreement;(b)ARCTURUS UNDER SECTION 9.3, (I) CUREVAC WILL PROMPTLY PAY ARCTURUS ANY MONIES DUE AND OWINGARCTURUS, AS OF THE DATE OF TERMINATION, FOR WORK AND SERVICES ACTUALLY PERFORMED AND ALL EXPENSES ACTUALLY INCURRED ASSPECIFIED IN THE WORK PLAN AS WELL AS ANY AMOUNTS INCURRED FOR ORDERLY WIND DOWN ANY THEN EXISTING THIRD PARTYCOMMITMENTS ENTERED INTO AS OF THE DATE OF NOTICE OF TERMINATION TO PERFORM THE WORK PLAN; (II) EACH OF THE PARTIES WILL RETURNOR DESTROY ANY MATERIALS OF THE OTHER PARTY IN ITS CONTROL, BASED UPON WRITTEN INSTRUCTIONS FROM THE OTHER PARTY WITHIN […***…] DAYS OF THE EFFECTIVE DATE OF TERMINATION, UNLESS SUCH MATERIAL IS NECESSARY OR USEFUL FOR THE EXERCISE OF A PARTY'S RIGHTSor obligations under a License Agreement in which event the***Confidential Treatment Requested41 PARTY RETAINING THE MATERIAL WILL NOTIFY THE OTHER PARTY OF RETENTION PURSUANT TO THE REQUIREMENTS OF AND SUBJECT TO SUCH LICENSEAGREEMENT; AND (III) ALL RIGHTS AND LICENSES PURSUANT TO THIS AGREEMENT SHALL TERMINATE AND BE OF NO FURTHER FORCE AND EFFECT, ITbeing understood that termination hereunder shall not affect any then existing License Agreement.9.6Survival. IN ADDITION TO THE TERMINATION CONSEQUENCES SET FORTH IN SECTION 9.5, THE FOLLOWING PROVISIONS WILLSURVIVE TERMINATION OR EXPIRATION OF THIS AGREEMENT, AS WELL AS ANY OTHER PROVISION WHICH BY ITS TERMS OR BY THE CONTEXT THEREOF, ISINTENDED TO SURVIVE SUCH TERMINATION: SECTIONS 1, 3.1(F) (TO THE EXTENT A LICENSE AGREEMENT IS EXECUTED PRIOR TO THE EFFECTIVE DATE OFTERMINATION), 3.3(A), 6.2, 6.3, 7, 8.5, 8.7, 9.2, 9.5 , 9.6 AND 10. TERMINATION OR EXPIRATION OF THIS AGREEMENT WILL NOT RELIEVE THE PARTIESOF ANY LIABILITY OR OBLIGATION WHICH ACCRUED HEREUNDER PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR EXPIRATION NOR PRECLUDE EITHERPARTY FROM PURSUING ALL RIGHTS AND REMEDIES IT MAY HAVE HEREUNDER OR AT LAW OR IN EQUITY WITH RESPECT TO ANY BREACH OF THIS AGREEMENTNOR PREJUDICE EITHER PARTY’S RIGHT TO OBTAIN PERFORMANCE OF ANY OBLIGATION. ALL OTHER RIGHTS AND OBLIGATIONS WILL TERMINATE UPONexpiration of this Agreement.ARTICLE 10Miscellaneous10.1Dispute Resolution.(a)Dispute Escalation. IN THE EVENT OF A DISPUTE BETWEEN THE PARTIES, THE PARTIES WILL FIRST ATTEMPT IN GOODFAITH TO RESOLVE SUCH DISPUTE BY NEGOTIATION AND CONSULTATION BETWEEN THEMSELVES OR THE PROGRAM DIRECTORS. IN THE EVENT THATSUCH DISPUTE IS NOT RESOLVED ON AN INFORMAL BASIS WITHIN […***…] DAYS, EITHER PARTY MAY, BY WRITTEN NOTICE TO THE OTHER,HAVE SUCH DISPUTE REFERRED TO EACH PARTY’S CHIEF EXECUTIVE OFFICER OR HIS OR HER DESIGNEE (WHO WILL BE A SENIOR EXECUTIVEWITH THE APPROPRIATE AUTHORITY TO DETERMINE THE MATTER FOR SUCH PARTY), WHO WILL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH DISPUTEby negotiation and consultation for a […***…] day period following receipt of such written notice(b)Dispute Resolution. (i)IN THE EVENT THE CHIEF EXECUTIVE OFFICERS OF THE PARTIES ARE NOT ABLE TO RESOLVE SUCH DISPUTE AS SETFORTH ABOVE, THE PARTIES AGREE TO TRY TO SOLVE SUCH DISPUTE AMICABLY BY MEDIATION. THE PARTIES SHALLCONDUCT A MEDIATION PROCEDURE ACCORDING TO THE MEDIATION RULES OF THE WORLD INTELLECTUAL PROPERTYORGANIZATION (WIPO) IN EFFECT ON THE DATE OF THE COMMENCEMENT OF THE MEDIATION PROCEEDINGS. THELOCATION OF THE MEDIATION PROCEEDINGS WILL BE NEW YORK CITY, NEW YORK, USA. THE NUMBER OFMEDIATORS WILL BE […***…]. THE LANGUAGE OF THE MEDIATION PROCEEDINGS WILL BE ENGLISH. IF THEDISPUTE HAS NOT BEEN SETTLED PURSUANT TO THE SAID RULES WITHIN […***…] DAYS FOLLOWING THE FILING OF AREQUEST FOR MEDIATION OR WITHIN SUCH OTHER PERIOD AS THE PARTIES MAY AGREE IN WRITING, EITHER PARTYmay submit the dispute to final and binding arbitration.***Confidential Treatment Requested42 (ii)ANY DISPUTE RELATING TO THE VALIDITY PERFORMANCE, CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT,WHICH CANNOT BE RESOLVED AMICABLY BETWEEN THE PARTIES AFTER FOLLOWING THE PROCEDURE SET FORTH INTHIS SECTION 10.1, SHALL BE SUBMITTED TO ARBITRATION IN ACCORDANCE WITH THE ARBITRATION RULES OFWIPO IN EFFECT ON THE DATE OF THE COMMENCEMENT OF THE ARBITRATION PROCEEDINGS. THE LOCATION OF THEARBITRATION PROCEEDINGS WILL BE NEW YORK CITY, NEW YORK, USA. THE NUMBER OF ARBITRATORS WILL BE[…***…]. THE LANGUAGE OF THE ARBITRATION PROCEEDING WILL BE ENGLISH. THE DECISION OF THEARBITRATORS SHALL BE FINAL AND BINDING UPON THE PARTIES (ABSENT MANIFEST ERROR ON THE PART OF THEarbitrator(s)) and enforceable in any court of competent jurisdiction.10.2RELATIONSHIP OF PARTIES. NOTHING IN THIS AGREEMENT IS INTENDED OR WILL BE DEEMED TO CONSTITUTE A PARTNERSHIP,AGENCY, EMPLOYER-EMPLOYEE OR JOINT VENTURE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL INCUR ANY DEBTS OR MAKE ANY COMMITMENTSFOR THE OTHER, EXCEPT TO THE EXTENT, IF AT ALL, SPECIFICALLY PROVIDED THEREIN. THERE ARE NO EXPRESS OR IMPLIED THIRD PARTY BENEFICIARIEShereunder.10.3COMPLIANCE WITH LAW. EACH PARTY WILL PERFORM OR CAUSE TO BE PERFORMED ANY AND ALL OF ITS OBLIGATIONS OR THEexercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.10.4Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OFNew York, USA, without respect to its conflict of Laws rules.10.5Counterparts; Facsimiles. THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICH WILLBE DEEMED AN ORIGINAL, AND ALL OF WHICH TOGETHER WILL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT. FACSIMILE OR PDF EXECUTION ANDDELIVERY OF THIS AGREEMENT BY EITHER PARTY WILL CONSTITUTE A LEGAL, VALID AND BINDING EXECUTION AND DELIVERY OF THIS AGREEMENT BY SUCHParty10.6Headings. ALL HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE ONLY AND WILL NOT AFFECT THE MEANING OF ANYprovision hereof.(a)Waiver of Rule of Construction. EACH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL INCONNECTION WITH THE REVIEW, DRAFTING AND NEGOTIATION OF THIS AGREEMENT. ACCORDINGLY, THE RULE OF CONSTRUCTION THAT ANYambiguity in this Agreement will be construed against the drafting party will not apply.(b)Interpretation. WHENEVER ANY PROVISION OF THIS AGREEMENT USES THE TERM "INCLUDING" (OR "INCLUDES"),SUCH TERM WILL BE DEEMED TO MEAN "INCLUDING WITHOUT LIMITATION" (OR "INCLUDES WITHOUT LIMITATIONS"). "HEREIN," "HEREBY,""HEREUNDER," "HEREOF" AND OTHER EQUIVALENT WORDS REFER TO THIS AGREEMENT AS AN ENTIRETY AND NOT SOLELY TO THE PARTICULARPORTION OF THIS AGREEMENT IN WHICH ANY SUCH WORD IS USED. ALL DEFINITIONS SET FORTH HEREIN WILL BE DEEMED APPLICABLEwhether the words defined are used herein in the singular or the plural. Unless otherwise provided, all references to SectionsAND EXHIBITS IN THIS AGREEMENT ARE TO SECTIONS AND EXHIBITS OF THIS AGREEMENT. REFERENCES TO ANY SECTIONS INCLUDE SECTIONSand subsections that are part of the related Section.***Confidential Treatment Requested43 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC 10.7Further Assurances. EACH PARTY SHALL TAKE ALL CUSTOMARY AND REASONABLE ACTIONS AND DO ALL THINGS REASONABLYNECESSARY OR PROPER, INCLUDING UNDER APPLICABLE LAW, TO MAKE EFFECTIVE AND FURTHER THE INTENTS AND PURPOSES OF THE TRANSACTIONScontemplated by this Agreement, including executing any further instruments reasonably requested by the other Party.10.8BINDING EFFECT. THIS AGREEMENT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON THE PARTIES, THEIR AFFILIATES,and their respective lawful successors and assigns.10.9Assignment. THIS AGREEMENT MAY NOT BE ASSIGNED BY EITHER PARTY, NOR MAY EITHER PARTY DELEGATE ITS OBLIGATIONSOR OTHERWISE TRANSFER LICENSES OR OTHER RIGHTS CREATED BY THIS AGREEMENT, EXCEPT AS EXPRESSLY PERMITTED HEREUNDER, WITHOUT THE PRIORWRITTEN CONSENT OF THE OTHER PARTY, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED; PROVIDED THAT EITHER PARTYMAY ASSIGN THIS AGREEMENT WITHOUT SUCH CONSENT TO AN AFFILIATE OR TO ITS SUCCESSOR IN CONNECTION WITH SALE OF ALL OR SUBSTANTIALLY ALL OFITS ASSETS OR BUSINESS OR THAT PORTION OF ITS BUSINESS PERTAINING TO THE SUBJECT MATTER OF THIS AGREEMENT (WHETHER BY MERGER, CONSOLIDATIONor otherwise).10.10Notices. ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED TO BE GIVEN PURSUANTTO THIS AGREEMENT WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY GIVEN UPON THE DATE OF RECEIPT IF DELIVERED BY HAND,RECOGNIZED INTERNATIONAL OVERNIGHT COURIER, OR REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID OR FACSIMILE (ANDPROMPTLY CONFIRMED BY PERSONAL DELIVERY, REGISTERED OR CERTIFIED MAIL OR OVERNIGHT COURIER) TO THE ADDRESSES SET FORTH BELOW (OR TO SUCHaddress as a Party may subsequently provide by written notice in accordance with this Section 10.10).If to CureVac:CureVac AGPaul-Ehrlich-Str. 1572076 TübingenGermanyAttention: CEO and General CounselFax: +49 7071 9883 - 1101 If to Arcturus:Arcturus Therapeutics, Inc.10628 Science Center DriveSuite 200San Diego, California 92121USAAttn:CEOFax: (858) 300-5028 with a copy to (which copy shall not constitute notice): Cooley LLP3175 Hanover St.Palo Alto, CA 94303Attn: Glen Y. SatoFax: (650) 849-740044 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC 10.11AMENDMENT AND WAIVER. THIS AGREEMENT MAY BE AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIED ONLY BYMEANS OF A WRITTEN INSTRUMENT SIGNED BY BOTH PARTIES; PROVIDED THAT ANY UNILATERAL UNDERTAKING OR WAIVER MADE BY ONE PARTY IN FAVOR OFTHE OTHER WILL BE ENFORCEABLE IF UNDERTAKEN IN A WRITING SIGNED BY THE PARTY TO BE CHARGED WITH THE UNDERTAKING OR WAIVER. ANY WAIVEROF ANY RIGHTS OR FAILURE TO ACT IN A SPECIFIC INSTANCE WILL RELATE ONLY TO SUCH INSTANCE AND WILL NOT BE CONSTRUED AS AN AGREEMENT TO WAIVEany rights or fail to act in any other instance, whether or not similar.10.12Severability. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT WILL, FOR ANY REASON, BE HELD TO BE INVALID ORUNENFORCEABLE IN ANY RESPECT, SUCH INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER PROVISION HEREOF, AND THE PARTIES WILLnegotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent.10.13ENTIRE AGREEMENT. THIS AGREEMENT TOGETHER WITH ANY LICENSE AGREEMENTS (INCLUDING ALL APPENDICES ANDEXHIBITS HERETO AND THERETO) ENTERED INTO DURING THE TERM AND THE MATERIAL TRANSFER AGREEMENTS AND THE CONFIDENTIALITY AGREEMENT ARETHE SOLE AGREEMENTS WITH RESPECT TO THE SUBJECT MATTER AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES WITHRESPECT TO SAME, PROVIDED, HOWEVER, THAT THE TERMS AND CONDITIONS UNDER THIS AGREEMENT APPLY WITH RESPECT TO THE ACTIVITIES WHICH HAVEBEEN PERFORMED BY THE PARTIES UNDER THE MATERIAL TRANSFER AGREEMENT BUT WHICH ARE ALSO SET FORTH UNDER THE WORK PLAN, AND TO SUCHEXTENT THIS AGREEMENT REPLACES THE MATERIAL TRANSFER AGREEMENTS. IN CASE OF CONFLICT BETWEEN THIS AGREEMENT AND THE CONFIDENTIALITYAgreement, this Agreement shall prevail. 10.14Force Majeure. NEITHER ARCTURUS NOR CUREVAC WILL BE LIABLE FOR FAILURE OF OR DELAY IN PERFORMING OBLIGATIONSSET FORTH IN THIS AGREEMENT (OTHER THAN ANY OBLIGATION TO PAY MONIES WHEN DUE), AND NEITHER WILL BE DEEMED IN BREACH OF SUCHOBLIGATIONS, IF SUCH FAILURE OR DELAY IS DUE TO NATURAL DISASTERS OR ANY CAUSES REASONABLY BEYOND THE CONTROL OF ARCTURUS OR CUREVAC;PROVIDED THAT THE PARTY AFFECTED WILL PROMPTLY NOTIFY THE OTHER OF THE FORCE MAJEURE CONDITION AND WILL EXERT REASONABLE EFFORTS TOeliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible.[Signature page to follow] 45 DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC IN WITNESS WHEREOF, the Parties have caused this Development and Option Agreement to be executed by theirrespective duly authorized officers as of the Effective Date.CUREVAC AG By: /s/ Franz-Werner Haas (Signature) Name: Franz-Werner HaasTitle: CCO By: /s/ Dan Menichella (Signature) Name: Dan MenichellaTitle: CBO Arcturus Therapeutics Inc. By: /s/ Joseph E. Payne (Signature) Name: Joseph E. PayneTitle: President & CEO Signature Page to Development and Option Agreement DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Exhibit 1.3Patents and Know-How in the Arcturus Background Technology[…***…] ***Confidential Treatment Requested DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Exhibit 1.5 ARCTURUS LMD TECHNOLOGY[…***…] ***Confidential Treatment Requested DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Exhibit 1.34Exclusive License Agreementsee separate document DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Exhibit 1.61Non-Exclusive License Agreement[The payments under the Non-Exclusive License Agreement will be reduced by 50% for such non-exclusive license and the other termsunder the Exclusive License Agreement will be adjusted to reflect the non-exclusivity of the license] DEVELOPMENT AND OPTION AGREEMENT BETWEEN CUREVAC AG AND ARCTURUS THERAPEUTICS INC Exhibit 3.1 (a)Work Plan […***…] ***Confidential Treatment Requested Exhibit 4.2Target Reservation Request Form[…***…] ***Confidential Treatment Requested ***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2 AMENDMENT TO DEVELOPMENT AND OPTION AGREEMENT THIS AMENDMENT TO DEVELOPMENT AND OPTION AGREEMENT (this “Amendment”), dated as of May 3,2018, is made by and between CureVac AG, a German stock corporation with offices at Paul-Ehrlich-Strasse 15, 72076 Tubingen,Germany (“CureVac”), and Arcturus Therapeutics Inc., a Delaware corporation with offices at 10628 Science Center Drive #200, SanDiego, CA 92121, USA (“Arcturus”). Each of CureVac and Arcturus may be referred to herein as a “Party” or together as the“Parties”.WHEREAS, the Parties are parties to that certain Development and Option Agreement, dated as of January 1, 2018 (the“Development and Option Agreement”);WHEREAS, pursuant to Section 3.2 of the Development and Option Agreement, CureVac is responsible for funding up to[…***…] scientists per year at Arcturus to perform the Work as defined and in accordance with the Work Plan for a period of up to[…***…] months at the FTE costs;WHEREAS, CureVac is now prepared to invest and commit to the full number of […***…] FTEs for the full period of […***…] months, provided Arcturus can provide security as to CureVac's access to the Technology generated in performance of theWork pursuant to the Development and Option Agreement; andWHEREAS, CureVac and Arcturus desire to amend the Development and Option Agreement as provided in thisAmendment in accordance with Section 10.11 of the Development and Option Agreement.NOW, THEREFORE, in consideration of the foregoing and the promises and mutual agreements contained in thisAmendment, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, andintending to be legally bound, the Parties agree as follows:SECTION 1. Irrevocable Offer. (a)The heading of Article 5 of the Development and Option Agreement is hereby amended and restated in its entiretyas follows: “Irrevocable Offer to Licenses” and the Table of Contents is updated accordingly. The heading of Section 5.1 ofthe Development and Option Agreement is amended and restated in its entirety as follows: “Irrevocable Offer.”(b)Section 5.1(a) of the Development and Option Agreement is hereby amended and restated in its entirety asfollows:“ (a) Arcturus hereby makes a final, binding irrevocable offer (the “Irrevocable Offer”) to CureVac to enter into, onthe terms of, and subject to the conditions set forth in, the Exclusive License Agreement or, if the Reserved Target is only available ona non-exclusive basis, the Non-Exclusive License Agreement, on a Reserved Target-by-Target basis, a maximum of […***…]licenses under the Arcturus LMD Technology with respect to the development, manufacture and commercialization of LicensedProducts containing mRNA Constructs intended to express such Reserved Target in the form of the License Agreement. Upon theexecution of this Amendment, the Irrevocable Offer shall remain valid and legally binding on Arcturus and in effect, and the ***Confidential Treatment Requested Irrevocable Offer from Arcturus shall be irrevocable and open for acceptance from CureVac for the period commencing on theEffective Date and ending on the expiration of the Term (the “Offer Period”).” (c)Section 5.1(b) of the Development and Option Agreement is hereby amended and restated in its entirety asfollows: “ (b) If, prior to the expiration of the Offer Period, CureVac delivers written notice to Arcturus of its intention toenter into a license for a Reserved Target, which such notice shall set forth the particular Reserved Target which is intended to beexpressed by the Licensed Products (each such notice, an “Acceptance Notice”), then upon delivery thereof, for the Reserved Targetset forth in such Acceptance Notice, the licenses and all other rights under the applicable License Agreement shall immediately be ineffect without the requirement of either Party to execute any further documentation and there shall exist a legal, valid and bindingobligation of Arcturus, enforceable against Arcturus in accordance with the terms of the Exclusive License Agreement or, if theReserved Target set forth in such Acceptance Notice is only available on a non-exclusive basis, the Non-Exclusive LicenseAgreement. A separate Acceptance Notice and Acceptance Fee will be required for each License Agreement with respect to whichCureVac accepts the Irrevocable Offer pursuant to this Section 5.1, and CureVac will pay to Arcturus the Acceptance Fee for eachsuch License Agreement as set forth in Section 5.3. In the event that CureVac terminations a license(s) during the Term, the Target(s)subject to the license(s) will be removed from the Reserved Target List and the number of License Agreements for which theIrrevocable Offer exists shall be reduced by one (1) (i.e. the delivery of an Acceptance Notice reduces the total number of LicenseAgreements for which CureVac may accept the Irrevocable Offer by one regardless of whether CureVac elects to continue suchLicense Agreement in effect).” (d)Section 5.1(c) of the Development and Option Agreement is hereby amended and restated in its entirety asfollows: “ (c) In the event that CureVac terminates a License Agreement during the Term, the Targets subject to suchlicense(s) will no longer be available as a Target pursuant to this Agreement.” (e)Section 5.2 of the Development and Option Agreement is hereby amended and restated in its entirety as follows: “5.2CureVac's Acceptance of Irrevocable Offer. As soon as practicable following CureVac's delivery of eachAcceptance Notice to Arcturus, CureVac and Arcturus will prepare the appendices to the corresponding License Agreement. TheLicense Agreement shall nevertheless enter into force (including payment obligations of CureVac in accordance with the terms of theLicense Agreement) upon delivery of the Acceptance Notice by CureVac.” (f)Section 5.3 of the Development and Option Agreement is hereby amended and restated in its entirety as follows: “5.3Acceptance Fee. If CureVac delivers an Acceptance Notice for a Rare Disease Target pursuant to Section 5.1,CureVac shall pay an Acceptance Fee of […***…] and if CureVac delivers an Acceptance Notice for a Non-Rare Disease Targetpursuant to Section 5.1, CureVac shall pay an Acceptance Fee of […***…], hereinafter both the “Acceptance Fee”. On the […***…] it delivers an ***Confidential Treatment Requested2 Acceptance Notice, CureVac shall pay the applicable Acceptance Fee by wire transfer in immediately available funds to the bankaccount of Arcturus set forth on Schedule 3 (or such other bank account notified in writing to CureVac prior to such date).” (g)Section 5.4 of the Development and Option Agreement is hereby amended and restated in its entirety as follows: “5.4Co-Development Agreement. For clarification, the selection of any program under the Co-DevelopmentAgreement shall not constitute the delivery of an Acceptance Notice in accordance with this Section 5, and, accordingly, noAcceptance Fee will be payable and any paid Acceptance Fee shall be credited against any other payments by CureVac applied first toany outstanding payment obligations to Arcturus, and to the extent any remaining amounts remain creditable, then to the next duefuture payment obligations.” (g)Definitions. Each of the following Sections of the Development and Option Agreement are hereby amended andrestated in their entirety as “Intentionally Omitted.” : Section 1.35, Section 1.62, Section 1.64, Section 1.65, Section 1.66 and Section1.67 The following Sections are inserted immediately following Section 1.94 of the Development and Option Agreement: “1.95“Irrevocable Offer” has the meaning set forth in Section 5.1(a). 1.96“Acceptance Notice” has the meaning set forth in Section 5.1(b). 1.97“Acceptance Fee” has the meaning set forth in Section 5.3.” (h)Additional Modifications. (i) In Section 3.1(f) of the Development and Option Agreement, the occurrence of “exercise of an Option andentry into a License Agreement” in the first sentence is hereby replaced with “delivery of an Acceptance Notice and theentering into force of a License Agreement”. (ii) In Section 3.3(c) of the Development and Option Agreement, the occurrence of “whether to exercise anOption” in the third sentence is hereby replaced with “whether to delivery an Acceptance Notice”. (iii) In Section 4.2(c)(iii) of the Development and Option Agreement, the occurrence of “option” in the secondsentence is hereby replaced with “right”. (iv) In Section 4.2(d)(ii) of the Development and Option Agreement, the occurrence of “shall be reduced by eachexercise of an Option” in the first sentence is hereby replaced with “shall be reduced by each delivery of an AcceptanceNotice” and the occurrence of “applying from and after the date of exercise of an Option.” in the first sentence is herebyreplaced with “applying from and after the date of an Acceptance Notice.”. (v) In Section 6.4(c)(ii) of the Development and Option Agreement, the occurrence of “an Option Notice” in thefirst sentence is hereby replaced with “an Acceptance Notice”. (vi) In Section 6.4(c)(iii) of the Development and Option Agreement, the occurrence of “to the Options” in thefirst sentence is hereby replaced with “pursuant to the Irrevocable Offer”. 3 (vii) In Section 9.2(a)(iv) of the Development and Option Agreement, the occurrence of “the Option ExerciseFee” is hereby replaced with “the Acceptance Fee”. (viii) In Section 9.2(a) of the Development and Option Agreement, in the sentence immediately followingsubsection (iv), the occurrence of “or the Options” is hereby replaced with “or the Irrevocable Offers”. SECTION 2. License Agreements. (a)“Non-Exclusive License Agreement” means the terms of the Non-Exclusive License Agreement agreed by theParties, incorporated by reference into the Development and Option Agreement and set forth on Schedule 1-A to this Amendment. (b)“Exclusive License Agreement” means the terms of the License Agreement agreed by the Parties, incorporated byreference into the Development and Option Agreement and set forth on Schedule 1-B to this Amendment. SECTION 3. Grant of Security Interest. (a)As collateral security for the prompt and complete payment and performance when due (whether at statedmaturity, by acceleration or otherwise) of all of its obligations under the Development and Option Agreement, and whether direct orindirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising andincluding interest and fees that accrue after the commencement by or against Arcturus of any proceeding under any bankruptcy orinsolvency Law naming Arcturus as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims insuch proceeding, Arcturus hereby mortgages, pledges, assigns and hypothecates to CureVac, and grants to CureVac a Lien on andcontinuing security interest in, all the right, title and interest of Arcturus, in, to, and under the following property, wherever located,whether now owned or in the future acquired by Arcturus and whether now existing or in the future coming into existence owned byArcturus (collectively, the “Collateral”): (i) the Patents and Know-How set forth on Exhibit 1.3 of the Development and Option Agreement;(ii)the LUNAR™ platform;(iii) all other Arcturus Background Technology;(iv)all other Arcturus Program Technology; and(v)to the extent not otherwise included, all books, records, writings, data bases, information and otherproperty relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of theforegoing, all claims and insurance proceeds arising out of the loss, nonconformity or any interference with the use of, orany defect or infringement of rights in, or damage to, any of the foregoing, and all proceeds, products, offspring, rents,issues, profits and returns of and from, and all distributions on and 4 rights arising out of, any of the foregoing;provided that the Collateral shall not exceed the property to which CureVac has or may have rights to pursuant tothe terms of the Development and Option Agreement.For purposes of this Amendment, “Lien” means a pledge, lien, charge or security interest of any kind or nature.(b) Notwithstanding anything herein to the contrary, in no event shall the Collateral include or the security interestgranted under Section 3(a) attach to (i) any Collateral if and to the extent that a security interest therein is prohibited by or in violationof any Law applicable to Arcturus or (ii) any "intent-to-use" application for registration of a trademark or service mark filed pursuant toSection 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a "Statement of Use" pursuant to Section 1(d) of the LanhamAct or an "Amendment to Allege Use" pursuant to Section 1(c) of the Lanham Act with respect thereto, solely to the extent, if any,that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability ofany registration that issues from such intent-to-use application under applicable Law and (ii) any Collateral if and to the extent that agrant of a security interest therein would violate or invalidate any lease, license or other agreement applicable thereto to which Arcturusis party as of the date of this Amendment or create a right of termination in favor of any other party thereto (after giving effect to theapplicable anti-assignment provisions of the UCC or other applicable Law).(c)Arcturus makes to CureVac each of the representations and warranties set forth on Part I of Schedule 2.(d)Arcturus agrees that it will comply with each of the covenants set forth on Part II of Schedule 2.(e)For the avoidance of doubt, Arcturus shall be permitted, subject to the security interest granted under Section 3(a),to license the Collateral and in connection therewith, CureVac shall acknowledge and respect such licenses in writing therights of such licensees as reasonably requested by any licensee of the Collateral.(f)CureVac may exercise from time to time any rights and remedies available to it under the UCC and under anyother applicable Law. SECTION 4. Additional Expenses. In consideration for the rights granted pursuant to Section 1 and Section 3 ofthis Amendment, CureVac agrees to perform the Work under the Work Plan as part of which CureVac will fund […***…] scientistsper year at Arcturus for a period of […***…] months at the FTE Costs. SECTION 5. Ratification of Agreement. Except as expressly provided in this Amendment, all of the terms,covenants, and other provisions of the Development and Option Agreement are hereby ratified and confirmed and shall continue to bein full force and effect in accordance with their respective terms. From and after the date hereof, all references to the Development andOption Agreement shall refer to the Development and Option Agreement as amended by this Amendment. Capitalized terms used butnot defined in this Amendment shall have the meanings assigned to them in the Development and Option Agreement. SECTION 6. Governing Law. This Amendment shall be governed by and construed in ***Confidential Treatment Requested5 accordance with the Laws of the State of New York, USA, without respect to its conflict of Laws rules. In the event of adispute arising out of or relating to this Amendment, the provisions of Section 10.1 of the Development and Option Agreement shallgovern the resolution of such dispute. SECTION 7. Counterparts. This Amendment may be executed and in one or more counterparts, each of which will bedeemed an original, and all of which together will be deemed to be one and the same instrument. Facsimile or PDF execution anddelivery of this Amendment by either Party will constitute a legal, valid and binding execution and delivery of this Amendment bysuch Party. [signature page follows] 6 IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective duly authorizedofficers as of the date hereof. CUREVAC AG By:/s/ Dr. Florian von der Mülbe Name:Dr. Florian von der Mülbe Title:Chief Operating Officer By:/s/ Dr. Mariola Fotin-Mleczek Name:Dr. Mariola Fotin-Mleczek Title:Chief Scientific Officer ARCTURUS THERAPEUTICS INC. By:/s/ Mark Herbert Name:Mark Herbert Title:Interim President Schedule 1-ANon-Exclusive License Agreement See attached 8 Schedule 1-B Exclusive License Agreement 9 Schedule 2 […***…] ***Confidential Treatment Requested10 […***…] ***Confidential Treatment Requested11 […***…]“Copyright Office” means the United States Copyright Office.“IP Filing Office” means, as applicable, the Copyright Office, the PTO or any similar office or agency in any other IPJurisdiction. “IP Jurisdiction” means any jurisdiction creating or recognizing rights in intellectual property, including the United States, anystate thereof, any foreign country or any subdivision thereof.“PTO” means the United States Patent and Trademark Office. ***Confidential Treatment Requested12 Schedule 3 […***…] ***Confidential Treatment Requested Schedule 1-A NON-EXCLUSIVE LICENSE AGREEMENTby and betweenCUREVAC AGandARCTURUS THERAPEUTICS INC.datedMay 3, 2018 Table of Contents 1.DEFINITIONS.42.LICENSE GRANTS; TECHNOLOGY TRANSFER.123.LICENSE LIMITATIONS.154.PAYMENTS AND ROYALTIES.155.OWNERSHIP AND INVENTORSHIP OF IP.206.PATENT PROSECUTION AND MAINTENANCE.217.PATENT ENFORCEMENT AND DEFENSE.228.CONFIDENTIALITY.269.WARRANTIES; LIMITATIONS OF LIABILITY; INDEMNIFICATION.2810.TERM AND TERMINATION.3311.GENERAL PROVISIONS.35 List of Appendices Appendix 1.3Description of the Arcturus LMD TechnologyAppendix 1.4Patents and Know-How within the Arcturus Technology as of the License Agreement Effective DateAppendix 1.28Joint Interest PatentsAppendix 1.51Pre-Existing Prosecution, Enforcement and Defense RestrictionsAppendix 1.60Description of the Target License AgreementThis License Agreement ("License Agreement"), effective as of delivery of an Acceptance Notice in accordance withSection 5.1(b) of the Development and Option Agreement (as defined below) (the "License Agreement Effective Date"), is made byand between Arcturus Therapeutics Inc., a Delaware corporation ("Arcturus"), and CureVac AG, a German stock corporation withoffices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany ("CureVac"). Each of Arcturus and CureVac may be referred to hereinas a "Party" or together as the "Parties."WHEREAS, Arcturus has expertise and intellectual property relating to the development of LMD Technologies (as definedbelow) that embody or incorporate delivery systems (and components thereof) for molecular therapeutics based on or incorporatinglipid-enabled and unlocked nucleomonomer platform for delivery of nucleic acids as specified in Appendix 1.3, the Arcturus LMDTechnology; andWHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); andWHEREAS, Arcturus and CureVac are parties to that certain Development and Option Agreement (dated January 1, 2018,and amended as of May 3, 2018) (the "Development and Option Agreement") pursuant to which CureVac has options to take licensesunder the Arcturus LMD Technology (as defined below) with respect to CureVac’s mRNA Constructs; andWHEREAS, pursuant to the terms of the Development and Option Agreement, CureVac has exercised an option to obtaina license pursuant to this Agreement with respect to the Target (as defined below) and the Parties are now entering into a licensingarrangement whereby CureVac will have a license under the Arcturus LMD Technology to develop and commercialize LicensedProducts (as defined below) with respect to such Target.WHEREAS, the Parties intend to also co-develop an ornithine transcarbamylase ("OTC") deficiency product and possiblyother products under a separate co-development and co-commercialization agreement ("Co-Development Agreement").NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuableconsideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:1.Definitions.The following terms and their correlatives will have the following meanings:1.1"Affiliate" OF A PERSON OR ENTITY MEANS ANY OTHER ENTITY WHICH (DIRECTLY OR INDIRECTLY) IS CONTROLLED BY, CONTROLS ORIS UNDER COMMON CONTROL WITH SUCH PERSON OR ENTITY. FOR THE PURPOSES OF THIS DEFINITION, THE TERM "CONTROL" (INCLUDING, WITH CORRELATIVEMEANINGS, THE TERMS "CONTROLLED BY" AND "UNDER COMMON CONTROL WITH") AS USED WITH RESPECT TO AN ENTITY WILL MEAN (I) IN THE CASE OF ACORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF VOTING SECURITIES ENTITLED TO CAST AT LEAST FIFTY PERCENT (50%) OF THE VOTES IN THE ELECTIONOF DIRECTORS OR (II) IN THE CASE OF A NON-CORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF AT LEAST FIFTY PERCENT (50%) OF THE EQUITY INTERESTSwith the power to direct the management and policies of such entity, PROVIDED THAT IF LOCAL LAW RESTRICTS FOREIGN OWNERSHIP, CONTROL WILL BE ESTABLISHED BY DIRECT OR INDIRECT OWNERSHIP OF THE MAXIMUMownership percentage that may, under such local Law, be owned by foreign interests. […***…].1.2"Arcturus Indemnitees" has the meaning set forth in Section 9.6(a).1.3"ARCTURUS LMD TECHNOLOGY" MEANS ANY AND ALL LMD TECHNOLOGY FOR DELIVERING RNA THERAPEUTICS THAT ISCONTROLLED BY ARCTURUS OR ANY OF ITS AFFILIATES AS OF THE EFFECTIVE DATE OR DURING THE TERM, INCLUDING THE LUNAR™ PLATFORM, Adescription of which technology, as in existence as of the License Agreement Effective Date, is set forth on Appendix 1.3. 1.4"ARCTURUS TECHNOLOGY" MEANS ANY PATENTS AND KNOW-HOW THAT ARE CONTROLLED BY ARCTURUS OR ANY OF ITSAFFILIATES AS OF THE LICENSE AGREEMENT EFFECTIVE DATE OR DURING THE TERM AND THAT ARE NECESSARY OR USEFUL FOR THE RESEARCH,DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION OF LICENSED PRODUCTS. THE PATENTS AND KNOW-HOW COMPRISED IN THE ARCTURUSTECHNOLOGY AS OF THE LICENSE AGREEMENT EFFECTIVE DATE ARE LISTED IN APPENDIX 1.4 HERETO. ARCTURUS TECHNOLOGY SHALL INCLUDE THEArcturus LMD Technology. Notwithstanding the foregoing, Arcturus Technology shall exclude(a)ANY PATENTS AND KNOW-HOW ACQUIRED BY ARCTURUS AFTER LICENSE AGREEMENT EFFECTIVE DATE IF ARCTURUSIS REQUIRED TO MAKE ANY PAYMENT TO A THIRD PARTY IN CONNECTION WITH THE GRANT, MAINTENANCE OR EXERCISE OF A SUBLICENSE TO CUREVAC,UNLESS CUREVAC AGREES IN WRITING TO REIMBURSE ARCTURUS FOR ALL SUCH PAYMENTS; provided, however, THAT SUCH PAYMENTS SHALL REDUCECureVac's royalty obligations in accordance with Section 4.3(b),(b)ANY PATENTS AND KNOW-HOW OF A THIRD PARTY (INCLUDING ITS AFFILIATES) THAT BECOMES ARCTURUS’ AFFILIATEAFTER THE LICENSE AGREEMENT EFFECTIVE DATE AS A RESULTS OF A CHANGE OF CONTROL, BUT ONLY IF AND TO THE EXTENT THAT IT IS NOT LMDTechnology, and(c)any Patents that CureVac elects to exclude pursuant to Section 2.3.1.5"ARCTURUS TECHNOLOGY PATENT(S)" MEANS ANY AND ALL PATENTS COMPRISED IN THE ARCTURUS TECHNOLOGY DURING THETERM, UNLESS OTHERWISE SET FORTH HEREIN. FOR CLARITY, ARCTURUS TECHNOLOGY PATENTS INCLUDE ARCTURUS’ INTEREST IN THE JOINT INTERESTPatents. 1.6"BUSINESS DAY" MEANS A DAY OTHER THAN A SATURDAY, SUNDAY, OR BANK OR OTHER PUBLIC HOLIDAY IN SAN DIEGO,California, USA or Tübingen, Germany or Boston, Massachusetts, USA.1.7"cGMP" MEANS CURRENT GOOD MANUFACTURING PRACTICES AS SPECIFIED IN THE U.S. C.F.R., ICH GUIDELINE Q7A, ORequivalent Laws of an applicable Regulatory Authority at the time of manufacture.1.8"Calendar Quarter" MEANS THE RESPECTIVE PERIODS OF THREE (3) CONSECUTIVE CALENDAR MONTHS ENDING ON MARCH 31,June 30, September 30 and December 31. ***Confidential Treatment Requested 1.9"Change of Control" with respect to Arcturus, shall be deemed to have occurred if during the Term (i) any personOR ENTITY IS OR BECOMES THE "BENEFICIAL OWNER", DIRECTLY OR INDIRECTLY, OF SHARES OF CAPITAL STOCK OR OTHER INTERESTS (INCLUDING PARTNERSHIPINTERESTS) OF ARCTURUS THEN OUTSTANDING AND NORMALLY ENTITLED (WITHOUT REGARD TO THE OCCURRENCE OF ANY CONTINGENCY) TO VOTE IN THEELECTION OF THE DIRECTORS, MANAGERS OR SIMILAR SUPERVISORY POSITIONS OF ARCTURUS REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTALVOTING POWER OF ALL OUTSTANDING CLASSES OF VOTING STOCK OF ARCTURUS OR HAS THE POWER, DIRECTLY OR INDIRECTLY, TO ELECT A MAJORITY OF THEMEMBERS OF ARCTURUS’ BOARD OF DIRECTORS, OR SIMILAR GOVERNING BODY; OR (II) ARCTURUS ENTERS INTO A MERGER, CONSOLIDATION OR SIMILARTRANSACTION WITH ANOTHER PERSON OR ENTITY; OR (III) ARCTURUS SELLS OR TRANSFERS TO ANY THIRD PARTY, IN ONE (1) OR MORE RELATED TRANSACTIONS,PROPERTIES OR ASSETS REPRESENTING ALL OR SUBSTANTIALLY ALL OF ARCTURUS’ CONSOLIDATED TOTAL ASSETS TO WHICH THIS LICENSE AGREEMENT RELATES,provided however, that:(a)SUBSECTIONS (I) TO (III) SHALL ONLY APPLY IF THE PERSON OR ENTITY OR THIRD PARTY ACQUIRING CONTROL IS (I) APHARMACEUTICAL COMPANY WHICH HAS EXPERIENCE IN DEVELOPING AND COMMERCIALIZING PHARMACEUTICAL PRODUCTS (i.e., IS A STRATEGIC, NOTFINANCIAL INVESTOR OR PARTNER) OR (II) A COMPETITOR, I.E., A COMPANY WHOSE BUSINESS CONSISTS PRINCIPALLY OF MRNA DEVELOPMENT,manufacturing and/or commercialization, and(b)A BONA FIDE FINANCING TRANSACTION WITH THIRD PARTIES THAT DOES NOT OTHERWISE MEET THE REQUIREMENTS OFsubsection (a) shall not constitute a Change of Control. 1.10"COMBINATION PRODUCT" MEANS A LICENSED PRODUCT THAT INCLUDES AT LEAST ONE ADDITIONAL ACTIVE PHARMACEUTICALINGREDIENT OTHER THAN LMDS, MRNA CONSTRUCTS, AND OTHER RNAS (I.E., GUIDE RNA(S)) OR DNA SEQUENCE(S). DRUG DELIVERY VEHICLES,ADJUVANTS, AND EXCIPIENTS SHALL NOT BE DEEMED TO BE "ACTIVE INGREDIENTS", EXCEPT IN THE CASE WHERE SUCH DELIVERY VEHICLE, ADJUVANT, OREXCIPIENT IS RECOGNIZED AS AN ACTIVE INGREDIENT IN ACCORDANCE WITH 21 C.F.R. 210.3(B)(7) OR EQUIVALENT LAWS IN OTHER JURISDICTIONS,provided however, SHOULD LMDS COMPRISED IN A LICENSED PRODUCT BE CHARACTERIZED AS "ACTIVE INGREDIENTS" AT ANY TIME DURING THETerm, such LMDs will not be considered an "active ingredient" for the purposes of this definition.1.11"CONFIDENTIAL INFORMATION" OF A PARTY MEANS ALL PROPRIETARY KNOW-HOW, UNPUBLISHED PATENT APPLICATIONS ANDOTHER NON-PUBLIC INFORMATION AND DATA OF A FINANCIAL, COMMERCIAL, BUSINESS, OPERATIONAL, SCIENTIFIC OR TECHNICAL NATURE OF SUCH PARTY THATIS DISCLOSED BY OR ON BEHALF OF SUCH PARTY OR ANY OF ITS AFFILIATES OR OTHERWISE MADE AVAILABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES,WHETHER MADE AVAILABLE ORALLY, IN WRITING OR IN ELECTRONIC FORM IN CONNECTION WITH THIS LICENSE AGREEMENT, INCLUDING INFORMATIONCOMPRISING OR RELATING TO CONCEPTS, DISCOVERIES, INVENTIONS, DATA, DESIGNS OR FORMULAE IN CONNECTION WITH THIS LICENSE AGREEMENT. INADDITION, ANY NON-PUBLIC INFORMATION RELATED TO THIS LICENSE AGREEMENT OR THE LICENSED PRODUCTS HEREUNDER AND DISCLOSED BY A PARTY TOTHE OTHER PARTY (OR THEIR RESPECTIVE AFFILIATES) UNDER THE DEVELOPMENT AND OPTION AGREEMENT WILL BE DEEMED SUCH PARTY’S CONFIDENTIALINFORMATION HEREUNDER. TECHNOLOGY WILL BE CONSIDERED THE CONFIDENTIAL INFORMATION OF THE PARTY (OR PARTIES) OWNING SUCH TECHNOLOGY,and jointly-owned Technology will be considered Confidential Information of both Parties.1.12"Control" OR "Controlled" MEANS WITH RESPECT TO TECHNOLOGY, A PARTY OWNS OR HAS A LICENSE TO USE AND PRACTICEthe respective Patent or Know-How without violating the terms of any agreement with any Third Party.1.13"CTA" means a clinical trial application. 1.14"CureVac Indemnitees" has the meaning set forth in Section 9.6(b).1.15"Development and Option Agreement" has the meaning set forth in the Preamble.1.16“Diligent Efforts” MEANS, WITH RESPECT TO THE EFFORTS TO BE EXPENDED BY EACH PARTY WITH RESPECT TO THE ACTIVITIESOF A PARTY PURSUANT TO THIS AGREEMENT, ACTIVE AND SUSTAINED EFFORTS TO CONDUCT THE APPLICABLE ACTIVITY, OR TO ATTEMPT TO ACHIEVE THEapplicable requirement or goal, in a prompt and expeditious manner, as is reasonably practicable under the circumstances (including thelevel of FTE funding and budget for out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement.1.17"Disclosing Party" has the meaning set forth in Section 8.11.18"Field of Use" means the treatment and diagnosis of all diseases and conditions.1.19"FIRST COMMERCIAL SALE" MEANS THE FIRST SALE FOR USE OR CONSUMPTION OF ANY LICENSED PRODUCT IN A COUNTRY AFTERall required Regulatory Approvals for commercial sale of such Licensed Product have been obtained in such country.1.20"FTE" MEANS A FULL-TIME PERSON, OR MORE THAN ONE PERSON WORKING THE EQUIVALENT OF A FULL-TIME PERSON, WHERE"full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel areWORKING, CONSISTING OF A TOTAL OF 1880 HOURS PER YEAR OF WORK ON THE APPLICABLE ACTIVITIES. ANY PERSON WHO DEVOTES LESS THAN 1880HOURS PER YEAR ON THE APPLICABLE ACTIVITIES SHALL BE TREATED AS AN FTE ON A PRO-RATED BASIS, BASED UPON THE ACTUAL NUMBER OF HOURSWORKED BY SUCH PERSON ON SUCH ACTIVITIES, DIVIDED BY 1880. ANY PERSON WHO DEVOTES MORE THAN 1880 HOURS PER YEAR ON THE APPLICABLEACTIVITIES SHALL BE TREATED AS ONE (1) FTE, I.E., IN NO EVENT SHALL ONE PERSON BE COUNTED AS MORE THAN ONE FTE. FTE ACTIVITIES SHALLINCLUDE THE PERFORMANCE OF THE APPLICABLE ACTIVITIES AND SCIENTIFIC MANAGEMENT OVERSIGHT, AS REASONABLY REQUIRED, BUT, FOR CLARITY,EXCLUDE (I) THE WORK OF GENERAL CORPORATE OR ADMINISTRATIVE PERSONNEL, OVERHEAD (INCLUDING FACILITIES COSTS), INSURANCES AND SIMILARcosts. 1.21"FTE COSTS" MEANS AN INITIAL RATE OF […***…] DOLLARS ($[…***…]) PER FTE PER YEAR, WHICH SHALL APPLYTHROUGH DECEMBER 31, 2019. THEREAFTER, THE FTE RATE SHALL BE CHANGED BI-ANNUALLY AT THE END OF EACH SECOND CALENDAR YEAR TO REFLECTANY PERCENTAGE INCREASE OR DECREASE (AS THE CASE MAY BE) IN THE CONSUMER PRICE INDEX IN THE U.S. (INDEX FOR ALL ITEMS) (“CPI”) (BASEDON THE CHANGE IN THE CPI FROM THE MOST RECENT INDEX AVAILABLE AS OF THE EFFECTIVE DATE TO THE MOST RECENT INDEX AVAILABLE AS OF THE DATEof the calculation of such revised FTE Cost rate).1.22 "IND" MEANS AN INVESTIGATIONAL NEW DRUG APPLICATION, OR EQUIVALENT APPLICATION OR SUBMISSION FOR APPROVAL TOconduct human clinical trials.1.23"Indemnification Claim Notice" has the meaning set forth in Section 9.6(c).1.24"Indemnified Party" has the meaning set forth in Section 9.6(c).1.25"Indication" MEANS AN INDIVIDUAL DISEASE OR CLINICAL CONDITION WITH RESPECT TO WHICH AT LEAST ONE ADEQUATE ANDwell controlled study is required to support inclusion of such ***Confidential Treatment Requested disease or condition in the indication statement of an FDA approved package insert for a Licensed Product.1.26"Initiation" MEANS IN CONNECTION WITH A CLINICAL TRIAL IN ANY OF ITS PHASES 1 THROUGH 3 THE FIRST DOSING OF THE FIFTHpatient or fifth healthy subject.1.27"Inventions" has the meaning set forth in Section 5.1.1.28"JOINT INTEREST PATENTS" MEANS THE PATENTS GENERATED UNDER THE DEVELOPMENT AND OPTION AGREEMENT AND JOINTLYowned by the Parties. Such Joint Interest Patents are listed in Appendix 1.28 hereto, as amended from time to time.1.29"Know-How" MEANS ALL COMMERCIAL, TECHNICAL, SCIENTIFIC AND OTHER KNOW-HOW AND INFORMATION, TRADE SECRETS,KNOWLEDGE, TECHNOLOGY, METHODS, PROCESSES, PRACTICES, FORMULAE, INSTRUCTIONS, SKILLS, TECHNIQUES, PROCEDURES, EXPERIENCES, IDEAS,TECHNICAL ASSISTANCE, DESIGNS, DRAWINGS, ASSEMBLY PROCEDURES, COMPUTER PROGRAMS, SPECIFICATIONS, DATA AND RESULTS (INCLUDING BIOLOGICAL,CHEMICAL, PHARMACOLOGICAL, TOXICOLOGICAL, PHARMACEUTICAL, PHYSICAL AND ANALYTICAL, PRECLINICAL, CLINICAL, SAFETY, MANUFACTURING ANDQUALITY CONTROL DATA AND KNOW-HOW, INCLUDING STUDY DESIGNS AND PROTOCOLS), IN ALL CASES, PROVIDED IT IS CONFIDENTIAL AND PROPRIETARY, ANDregardless of whether patentable, in written, electronic or any other form now known or hereafter developed.1.30"Late Stage Development" means Development after the Initiation of a Phase 3 Study.1.31"Law" or "Laws" MEANS ALL LAWS, STATUTES, RULES, REGULATIONS, ORDERS, JUDGMENTS, OR ORDINANCES HAVING THE EFFECTof law of any federal, national, multinational, state, provincial, county, city or other political subdivision.1.32"License Agreement" has the meaning set forth in the Preamble.1.33"License Agreement Effective Date" has the meaning set forth in the Preamble.1.34"LICENSED PRODUCT" MEANS […***…] PRODUCT COMPRISED OF (I) LMD SYSTEMS, WHICH ARE COVERED BY ARCTURUSLMD TECHNOLOGY; AND CONTAINING (II) ONE OR MORE MRNA CONSTRUCTS AS THE ACTIVE PHARMACEUTICAL INGREDIENT(S) INTENDED TO EXPRESSTHE TARGET. IN CASE OF TWO OR MORE MRNA CONSTRUCTS THESE CONSTRUCTS MAY BE CONTAINED IN THE SAME OR SEPARATE LMDS. LICENSEDPRODUCT INCLUDES MRNA-LMD PRODUCTS WHICH ARE ADMINISTERED JOINTLY OR SEPARATELY, AND MRNA-LMD PRODUCTS WHICH AREADMINISTERED SIMULTANEOUSLY OR SEQUENTIALLY AS A COMBINATION MEDICINAL PRODUCT OR TREATMENT. FOR GENE EDITING PURPOSES A LICENSEDPRODUCT MAY CONTAIN OTHER RNA(S) (I.E., GUIDE RNA(S)) AND/OR DNA SEQUENCE(S) WHICH CAN BE DELIVERED TOGETHER OR SEPARATELY(COMBINED IN ONE LMD OR DELIVERED IN SEPARATE LMDS), IN ADDITION TO THE ONE OR MORE MRNA CONSTRUCTS INTENDED TO EXPRESS THEDNA Editing Protein. 1.35"LMD TECHNOLOGY" MEANS TECHNOLOGY CONTROLLED BY ARCTURUS THAT CLAIMS, EMBODIES OR INCORPORATES DELIVERYsystems (and components thereof) based on or incorporating lipid-mediated delivery (LMD) systems.1.36"Losses" has the meaning set forth in Section 9.6(a). ***Confidential Treatment Requested 1.37"Materials" MEANS ANY TANGIBLE CHEMICAL OR BIOLOGICAL MATERIAL, INCLUDING ANY COMPOUNDS, LMD, DNA, RNA(INCLUDING MRNA), CLONES, CELLS, AND ANY EXPRESSION PRODUCT, PROGENY, DERIVATIVE OR OTHER IMPROVEMENT THERETO, ALONG WITH ANYtangible chemical or biological material embodying any Know-How, Controlled by Arcturus.1.38"mRNA Construct" means ANY MRNA CONSTRUCT FOR THE EXPRESSION OF A protein, INCLUDING THE SEQUENCE OF SUCHCONSTRUCT (WHICH POTENTIALLY COMPRISES ONE (1) OR MORE OF A CAP, 5’ UTR, THE ASSOCIATED OPEN READING FRAME, 3’UTR AND A POLY A TAIL),THE CHEMISTRY OF NATURAL AND NON-NATURAL NUCLEIC ACIDS, AND OTHER CHEMICAL MODIFICATIONS ASSOCIATED WITH SUCH CONSTRUCT, SUCH MRNAConstruct being covered by mRNA Technology.1.39"MRNA TECHNOLOGY" MEANS Technology CONTROLLED BY CUREVAC THAT CLAIMS, EMBODIES OR INCORPORATESexpression systems (and components thereof), based on or incorporating mRNA.1.40"Milestones" means the milestones payable pursuant to Section 4.1.1.41"Milestone Event" has the meaning set forth in Section 4.1.1.42"Milestone Payment" has the meaning set forth in Section 4.1.1.43"NET SALES" MEANS, WITH RESPECT TO ANY LICENSED PRODUCT, THE GROSS AMOUNT RECEIVED BY CUREVAC AND ITSAFFILIATES AND SUBLICENSEES FOR bona fide SALES OF SUCH LICENSED PRODUCT TO A THIRD PARTY (OTHER THAN AFFILIATES AND SUBLICENSEES BUTINCLUDING DISTRIBUTORS FOR RESALE), LESS DEDUCTIONS, IN EACH CASE TO THE EXTENT REASONABLE, CUSTOMARY, ACTUALLY ALLOWED AND TAKEN INconnection with the sale of such Licensed Product and not otherwise recovered or reimbursed:(a)DISCOUNTS (INCLUDING CASH, QUANTITY AND PATIENT PROGRAM DISCOUNTS), RETROACTIVE PRICE REDUCTIONS,COMMISSIONS, CHARGE-BACK PAYMENTS AND REBATES GRANTED TO MANAGED HEALTH CARE ORGANIZATIONS OR TO FEDERAL, STATE AND LOCALgovernments, their agencies, and purchasers and reimbursers or to trade customers;(b)CREDITS OR ALLOWANCES ACTUALLY GRANTED UPON CLAIMS, DAMAGED GOODS, REJECTIONS OR RETURNS OF, SUCHLICENSED PRODUCT AND NOT IN EXCESS OF THE SELLING PRICE OF SUCH PRODUCT, INCLUDING SUCH LICENSED PRODUCT RETURNED INconnection with recalls or withdrawals;(c)freight out, postage, shipping and insurance charges for delivery of such Licensed Product;(d)TAXES OR DUTIES LEVIED ON, ABSORBED OR OTHERWISE IMPOSED ON THE SALE OF SUCH LICENSED PRODUCT, INCLUDINGVALUE-ADDED TAXES, OR OTHER GOVERNMENTAL CHARGES OTHERWISE IMPOSED UPON THE BILLED AMOUNT, AS ADJUSTED FOR REBATES ANDrefunds; and(e)wholesaler and distributor administration fees(f)OTHER CUSTOMARY DEDUCTIONS TAKEN IN THE ORDINARY COURSE OF BUSINESS IN ACCORDANCE WITH IFRS(International Financial Reporting Standards) principles.If a single item falls into more than one of the above categories above, such items will not be deducted more than once. NET SALES SHALL NOT INCLUDE ANY PAYMENTS AMONG CUREVAC, ITS AFFILIATES AND SUBLICENSEES. NET SALES SHALL BE DETERMINED INACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED ACROSS ALL PRODUCTS. NET SALES FOR ANYCOMBINATION PRODUCT SHALL BE CALCULATED ON A COUNTRY-BY-COUNTRY BASIS BY MULTIPLYING ACTUAL NET SALES OF SUCH COMBINATIONPRODUCT BY THE FRACTION A/(A+B), WHERE A IS THE WEIGHTED AVERAGE PRICE PAID FOR THE LICENSED PRODUCT CONTAINED IN SUCHCOMBINATION PRODUCT SOLD SEPARATELY IN FINISHED FORM IN SUCH COUNTRY, AND B IS THE WEIGHTED AVERAGE INVOICE PRICE PAID FORTHE OTHER ACTIVE INGREDIENTS CONTAINED IN SUCH COMBINATION PRODUCT SOLD SEPARATELY IN FINISHED FORM IN SUCH COUNTRY, IF SUCHLicensed Product and such other active ingredients are each sold separately in such country.If such other active ingredients are not sold separately in such country, then Net Sales for such Combination Product shall becalculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/C,where C is the weighted average invoice price paid for such Combination Product in such country. If such LicensedProduct is not sold separately in finished form in such country, Net Sales for such Licensed Product will be determined byCureVac’s good faith estimate of the relative contribution of such Licensed Product and each such other active ingredients insuch Combination Product, and shall take into account in good faith any applicable allocations and calculations that mayhave been made for the same period in other countries.1.44"NON-RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSEDPRODUCT WITH AN INCIDENCE OF EQUAL TO OR MORE THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THEfirst IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.1.45"Patent(s)" MEANS (A) AN ISSUED PATENT, A PATENT APPLICATION, AND A FUTURE PATENT ISSUED FROM ANY SUCH PATENTAPPLICATION, (B) A FUTURE PATENT ISSUED FROM A PATENT APPLICATION FILED IN ANY COUNTRY WORLDWIDE WHICH CLAIMS PRIORITY FROM A PATENT ORPATENT APPLICATION OF (A), AND (C) ANY ADDITIONS, DIVISIONS, CONTINUATIONS, CONTINUATIONS-IN-PART, INVENTION CERTIFICATES, SUBSTITUTIONS,REISSUES, REEXAMINATIONS, EXTENSIONS, REGISTRATIONS, UTILITY MODELS, SUPPLEMENTARY PROTECTION CERTIFICATES AND RENEWALS BASED ON ANYPATENT OR PATENT APPLICATION UNDER (A) OR (B), BUT NOT INCLUDING ANY RIGHTS THAT GIVE RISE TO REGULATORY EXCLUSIVITY PERIODS (OTHER THANsupplementary protection certificates, which will be treated as "Patents" hereunder)1.46"PATENT COSTS" MEANS THE REASONABLE, DOCUMENTED, OUT-OF-POCKET COSTS AND EXPENSES PAID TO OUTSIDE LEGALCOUNSEL, AND FILING AND MAINTENANCE EXPENSES, ACTUALLY AND REASONABLY INCURRED BY A PARTY IN PROSECUTING AND MAINTAINING PATENTS WITHrespect to Licensed Products and enforcing and defending them.1.47"PHASE 1 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(a) or corresponding foreign regulations.1.48"PHASE 2 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(b) or corresponding foreign regulations. ***Confidential Treatment Requested 1.49"PHASE 3 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(c) or corresponding foreign regulations.1.50"PRE-EXISTING LICENSING RESTRICTIONS" MEANS, WITH RESPECT TO THE TARGET, THAT ARCTURUS OR ITS AFFILIATES HAVEGRANTED TO A THIRD PARTY WITH RESPECT TO THE TARGET A NON-EXCLUSIVE, CO-EXCLUSIVE OR AN EXCLUSIVE LICENSE OR OPTION PURSUANT TO A bonafide WRITTEN AGREEMENT THAT IS IN EFFECT AT THE TIME OF THE SUBMISSION OF THE ACCEPTANCE NOTICE BY CUREVAC PURSUANT TO SECTION 5.1(B) OFthe (amended) Development and Option Agreement.1.51"PRE-EXISTING PROSECUTION, ENFORCEMENT AND DEFENSE RESTRICTIONS" MEANS, WITH RESPECT TO THE TARGET, THOSECERTAIN PROSECUTION, ENFORCEMENT AND DEFENSE RIGHTS GRANTED BY ARCTURUS OR ITS AFFILIATES TO A THIRD PARTY(IES) WITH RESPECT TO THE PATENTSpursuant to the bona fide WRITTEN AGREEMENT(S) SET FORTH ON Exhibit 1.51 HERETO AS SUCH bona fide WRITTEN AGREEMENT(S) WERE IN EFFECT ASOF THE EFFECTIVE DATE OF THE DEVELOPMENT AND OPTION AGREEMENT. FOR CLARITY, THE EXERCISE OF SUCH FOREGOING RIGHTS BY A THIRD PARTYWITH RESPECT TO PATENTS THAT ARE NOT SPECIFIC TO THE TARGET OR LICENSED PRODUCTS SHALL BE DEEMED A PRE-EXISTING PROSECUTION,Enforcement and Defense Restriction.1.52"RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSED PRODUCTWITH AN INCIDENCE OF LESS THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THE FIRST IND OR CTAapplication will be filed will determine whether a Target is a Rare Disease Target.1.53"Receiving Party" has the meaning set forth in Section 8.1.1.54"REGULATORY APPROVAL" MEANS, WITH RESPECT TO A COUNTRY OR EXTRA-NATIONAL TERRITORY, ANY AND ALL APPROVALS(INCLUDING BLAS AND MAAS), LICENSES, REGISTRATIONS OR AUTHORIZATIONS OF ANY REGULATORY AUTHORITY NECESSARY IN ORDER TO COMMERCIALLYDISTRIBUTE, SELL OR MARKET A PRODUCT IN SUCH COUNTRY OR SOME OR ALL OF SUCH EXTRA-NATIONAL TERRITORY, INCLUDING SOLELY TO THE EXTENT REQUIREDas a condition to commercial sale to end users, any pricing or reimbursement approvals.1.55"REGULATORY AUTHORITY" MEANS ANY NATIONAL (E.G., THE FDA), SUPRA-NATIONAL (E.G., THE EMA), REGIONAL, STATE ORLOCAL REGULATORY AGENCY, DEPARTMENT, BUREAU, COMMISSION, COUNCIL OR OTHER GOVERNMENTAL AUTHORITY, IN ANY JURISDICTION IN THE WORLD,involved in the granting of Regulatory Approval.1.56"Royalty Reduction" has the meaning set forth in Section 4.3(b).1.57"Royalty Term" has the meaning set forth in Section 4.3(d).1.58"Sublicensee" MEANS ANY THIRD PARTY THAT IS GRANTED A SUBLICENSE AS PERMITTED BY SECTION 2.2, EITHER DIRECTLY BYCureVac or its Affiliates or indirectly by any other Sublicensee hereunder.1.59"SUBLICENSE INCOME" MEANS THE FEES AND OTHER PAYMENTS, INCLUDING UPFRONT PAYMENTS AS WELL AS DEVELOPMENT,REGULATORY MILESTONE PAYMENTS RECEIVED BY CUREVAC OR ITS AFFILIATES FROM A SUBLICENSEE, EXCLUDING: (A) ROYALTY PAYMENTS AND NET SALESmilestones; (b) reimbursement of costs and expenses, including for patent prosecution and enforcement and ***Confidential Treatment Requested (C) EQUITY OR PREMIUM ON EQUITY AND (D) LOANS OR LOANS FORGIVEN EITHER (I) AS A RESULT OF FINANCIAL DISTRESS OF THE BORROWER OR (II) THAT AREnot specific to the Licensed Product. 1.60"Target" means the Target identified in Appendix 1.60 hereto. The Target includes(A) UP TO N (N= […***…]) PROTEINS, INCLUDING ALL POSSIBLE COMBINATIONS RESULTING FROM REMOVING ONE OF THE NPROTEINS (N MINUS […***…] PROTEINS), TOGETHER WITH ALL VARIANTS OF SUCH PROTEINS, INCLUDING THE WILD TYPE, NATURALLY OCCURRING VARIANTS,ENGINEERED VARIANTS WHEREIN MODIFICATIONS TO THE NATIVE AMINO ACID SEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATED VERSIONS,DERIVATIVES OR FRAGMENTS), AND SPECIES HOMOLOGS, ORTHOLOGS THEREOF; provided, however, THAT ANY SUCH NATURALLY OCCURRING VARIANT,ENGINEERED VARIANT, OR SPECIES HOMOLOG OR ORTHOLOG POSSESSES SUBSTANTIALLY SIMILAR BIOLOGICAL ACTIVITY TO THE NATURALLY OCCURRING PROTEIN;and(B) […***…] ANTIGENS OF A GIVEN PATHOGEN, INCLUDING […***…] ANTIGEN AND ANY COMBINATION OF SUCH ANTIGENS, TOGETHERWITH ALL VARIANTS OF SUCH ANTIGENS, INCLUDING THE WILD TYPE, NATURALLY OCCURRING VARIANTS, ENGINEERED VARIANTS WHEREIN MODIFICATIONS TOTHE NATIVE AMINO ACID SEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATED VERSIONS, DERIVATIVES OR FRAGMENTS), AND SPECIES HOMOLOGS,ORTHOLOGS THEREOF, provided, however, THAT ANY SUCH NATURALLY OCCURRING VARIANT, ENGINEERED VARIANT, OR SPECIES HOMOLOG OR ORTHOLOGpossesses substantially similar biological activity to the naturally occurring antigen; and(C) A DNA TARGET, provided, however, THAT THE FIRST DNA TARGET FOR EACH DNA EDITING PROTEIN WOULD NOT COUNT AS ATARGET. EACH SUBSEQUENT DNA TARGET FOR THIS DNA EDITING PROTEIN WOULD COUNT AS A TARGET. FOR CLARITY, A DNA EDITING PROTEINwould be defined as a Target under (a) above and count as a single Target.IF A GIVEN PROTEIN, e.g., AN ANTIBODY OR ENZYME, COMPRISES SEPARATED AMINO ACID CHAINS WHICH MIGHT BE DELIVERED BYseparated mRNA Constructs, such proteins would be defined as one Target.1.61"Technology" means collectively Patents and Know-How.1.62"Term" has the meaning set forth in Section 10.1.1.63"Territory" means worldwide.1.64"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.1.65"Third Party Claims" has the meaning set forth in Section 9.6(a). 1.66“Valid Claim” means a claim of(a)AN ISSUED AND UNEXPIRED PATENT (AS MAY BE EXTENDED THROUGH SUPPLEMENTARY PROTECTION CERTIFICATE ORpatent term extension) or(b)A PENDING PATENT APPLICATION, provided, however, THAT ONCE THE PRIORITY DATE OR EARLIEST FILING DATE TOWHICH THE PENDING PATENT APPLICATION REFERS IS MORE THAN SEVEN YEARS OLD, SUCH CLAIM SHALL NOT CONSTITUTE A VALID CLAIM FOR PURPOSES OFthis License Agreement anymore, unless and until a patent issues with such claim ***Confidential Treatment Requested INCLUDED IN THE ARCTURUS TECHNOLOGY PATENTS, WHICH CLAIM HAS NOT BEEN REVOKED, HELD INVALID OR UNENFORCEABLE BY A PATENT OFFICE, COURTOR OTHER GOVERNMENTAL AGENCY OF COMPETENT JURISDICTION IN A FINAL AND NON-APPEALABLE DECISION (OR DECISION FROM WHICH NO APPEAL WASTAKEN WITHIN THE ALLOWABLE TIME PERIOD) AND HAS NOT BEEN DISCLAIMED, DENIED, ABANDONED OR ADMITTED TO BE INVALID OR UNENFORCEABLEthrough reissue, re-examination or disclaimer or otherwise. 2.License Grants; Technology Transfer.2.1LICENSES BY ARCTURUS. SUBJECT TO THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT, ARCTURUS HEREBY GRANTS TOCUREVAC A NON-EXCLUSIVE LICENSE, WITH THE RIGHT TO SUBLICENSE IN MULTIPLE TIERS UNDER THE ARCTURUS TECHNOLOGY PATENTS AND THE ARCTURUSKNOW-HOW, IN EACH CASE SOLELY TO DEVELOP, HAVE DEVELOPED, MAKE, HAVE MADE, USE AND HAVE USED, SELL, OFFER FOR SALE, HAVE SOLD ANDIMPORT AND HAVE IMPORTED LICENSED PRODUCTS IN THE FIELD OF USE IN THE TERRITORY. ARCTURUS COVENANTS THAT, EXCEPT AS REQUIRED BY THEPre-Existing Licensing Restriction, Arcturus will not grant to any Third Party any additional licenses under the Arcturus Technology toDEVELOP, HAVE DEVELOPED, MAKE, HAVE MADE, USE AND HAVE USED, SELL, OFFER FOR SALE, HAVE SOLD AND IMPORT AND HAVE IMPORTED LICENSEDProducts (or any LMD Product directed to the Target) in the Field of Use in the Territory.2.2Sublicensing Rights.(a)CureVac Sublicenses. THE LICENSES GRANTED IN SECTION 2.1 MAY BE SUBLICENSED (WITH THE RIGHT TOSUBLICENSE THROUGH MULTIPLE TIERS), IN FULL OR IN PART, BY CUREVAC, ITS AFFILIATES OR SUBLICENSEES TO CUREVAC'S AFFILIATES ANDThird Parties provided, that for any sublicense:(i)EACH SUBLICENSE WILL BE IN WRITING (provided, however, THAT NOT EACHSUBLICENSE TO AFFILIATES MUST BE IN WRITING) AND ON TERMS CONSISTENT WITH AND SUBJECT TO THE TERMS OF THISLICENSE AGREEMENT, INCLUDING BUT NOT LIMITED TO THE LIMITATIONS ON PATENT PROSECUTION, ENFORCEMENT ANDdefense rights of such Sublicensee as set forth in Sections 6.1(d) and 7.2(a);(ii)CUREVAC WILL BE RESPONSIBLE FOR ANY AND ALL OBLIGATIONS OF SUCHSublicensee (including Affiliates and Sublicensees) as if such Sublicensee were CureVac hereunder;(iii)CUREVAC PROVIDE TO ARCTURUS A COPY OF SUCH SUBLICENSE AGREEMENTWITHIN THIRTY (30) DAYS OF EXECUTION (WHICH COPY MAY BE REDACTED FOR TERMS THAT ARE NOT OTHERWISErequired to confirm conformance with the terms of this License Agreement); and(iv)ANY SUBLICENSE GRANTED BY CUREVAC (AND ANY FURTHER SUBLICENSES) TO ANYRIGHTS LICENSED TO IT HEREUNDER SHALL TERMINATE IMMEDIATELY UPON THE TERMINATION OF THIS LICENSEAGREEMENT, PROVIDED THAT FOR SUBLICENSE TO A THIRD PARTY, SUCH SUBLICENSED RIGHTS SHALL NOT TERMINATE IF, ASOF THE EFFECTIVE DATE OF SUCH TERMINATION PURSUANT TO SECTIONS 10.2, 10.3(A) OR 10.4, SUCH SUBLICENSEE ISNOT IN MATERIAL DEFAULT OF ITS OBLIGATIONS UNDER ITS SUBLICENSE AGREEMENT, AND WITHIN […***…] DAYS OFsuch termination and the disclosure of this License Agreement to ***Confidential Treatment Requested the Sublicensee, the Sublicensee agrees in writing to be bound directly to Arcturus under a licenseagreement substantially similar to this License Agreement with respect to the rights sublicensedhereunder, substituting such Sublicensee for CureVac.(b)Subcontractors. FOR CLARITY PURPOSES, CUREVAC IS ENTITLED TO ENGAGE CONTRACT RESEARCH ORGANIZATIONS ANDCONTRACT MANUFACTURING ORGANIZATIONS FOR THE DEVELOPMENT AND MANUFACTURE OF LICENSED PRODUCTS ON BEHALF OF CUREVAC. TOTHE EXTENT SUCH CONTRACT ORGANIZATIONS REQUIRE A LICENSE TO PERFORM SUCH SUBCONTRACTED ACTIVITIES UNDER APPLICABLE LAWS,CUREVAC IS ENTITLED TO GRANT A LIMITED LICENSE SOLELY TO PERFORM THE WORK FOR WHICH THE SUBCONTRACTOR IS ENGAGED, WITHOUT ANobligation to meet the conditions of Section 2.2 (a)(iii).(c)Technology Transfer. FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE, ARCTURUS WILL USE DILIGENTEFFORTS TO TRANSFER THE FORMULATION PROCESS FOR THE LICENSED PRODUCTS THAT ARE INTENDED TO EXPRESS THE TARGET TO CUREVAC OR AREPUTABLE AND COMPETENT GMP MANUFACTURER SELECTED BY CUREVAC AND REASONABLY ACCEPTABLE TO ARCTURUS. UPON WRITTENREQUEST BY CUREVAC, ARCTURUS WILL CONDUCT A TECHNOLOGY TRANSFER TO CUREVAC AND/OR ITS DESIGNEE(S). ARCTURUS WILL MAKE ITSPERSONNEL AVAILABLE WITHOUT CHARGE FOR A TOTAL OF […***…] HOURS DURING NORMAL WORKING HOURS FOR SUCH TRANSFER, AND FORADDITIONAL HOURS IN EXCESS OF […***…] UP TO A TOTAL OF […***…] HOURS TO BE INVOICED MONTHLY AT THE THEN CURRENT FTECOST. SUCH DESIGNEE(S) MAY BE AN AFFILIATE, SUBLICENSEE OR THIRD PARTY MANUFACTURERS SELECTED BY CUREVAC AND REASONABLYACCEPTABLE TO ARCTURUS, AND WHICH THIRD PARTY MANUFACTURERS MAY ALSO BE A BACKUP MANUFACTURER OR A SECOND MANUFACTUREROF LICENSED PRODUCTS AS REQUIRED FOR THE APPLICABLE TRANSFEREE OF THE THEN-CURRENT PROCESS. CUREVAC SHALL REIMBURSE ARCTURUSfor the reasonable cost (including internal FTE Cost) incurred to conduct such technology transfer as specified above. 2.3UPDATES TO APPENDIX 1.4; EXCLUSION OF CERTAIN PATENTS. ARCTURUS SHALL NOTIFY CUREVAC AT LEAST ONCE EVERY […***…] MONTHS OF PATENTS THAT ARE ADDED TO THE ARCTURUS TECHNOLOGY FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE OR ANY PATENTSTHAT HAVE BEEN ABANDONED OR DISCONTINUED IN ACCORDANCE WITH THE TERMS OF THIS LICENSE AGREEMENT. APPENDIX 1.4 SHALL BE DEEMEDAUTOMATICALLY UPDATED TO INCLUDE ANY SUCH ADDED PATENTS, PROVIDED THAT WITH WRITTEN NOTICE TO ARCTURUS, CUREVAC MAY ELECT UPON […***…] DAYS’ IRREVOCABLE WRITTEN NOTICE TO ARCTURUS TO EXCLUDE ANY PARTICULAR ARCTURUS TECHNOLOGY PATENTS. FOLLOWING ANY SUCHWRITTEN NOTICE BY CUREVAC, UPON THE EXPIRATION OF THE NOTICE PERIOD THE IDENTIFIED ARCTURUS TECHNOLOGY PATENTS THAT CUREVAC SPECIFIESFOR EXCLUSION FROM THIS LICENSE AGREEMENT WILL NO LONGER BE LICENSED TO CUREVAC HEREUNDER, AND CUREVAC SHALL NOT HAVE ANY RIGHTS(INCLUDING RIGHTS PURSUANT TO THIS AGREEMENT) UNDER SUCH ARCTURUS TECHNOLOGY PATENTS NOR OBLIGATIONS HEREUNDER WITH RESPECT TO SUCHARCTURUS TECHNOLOGY PATENTS. FOR CLARITY, IN THE EVENT THAT THE LICENSED PRODUCT IS SUBSEQUENTLY DETERMINED TO BE COVERED OR OTHERWISEINFRINGE A VALID CLAIM OF ANY EXCLUDED PATENT HEREUNDER, THEN SUCH INFRINGEMENT SHALL BE DEEMED TO BE A MATERIAL BREACH OF THISLicense Agreement by CureVac.2.4DOCUMENTS AND DECLARATIONS. AT CUREVAC’S REASONABLE REQUEST AND COST AND EXPENSE, ARCTURUS SHALL EXECUTE ALLDOCUMENTS, DELIVER DECLARATIONS REGARDING THE LICENSES GRANTED HEREUNDER, AND ARCTURUS SHALL REASONABLY COOPERATE WITH CUREVAC TO THEEXTENT SUCH DOCUMENTS, DECLARATIONS AND/OR COOPERATION ARE REQUIRED TO GIVE EFFECT TO THIS LICENSE AGREEMENT AND/OR FOR THE RECORDINGor registration of the licenses granted hereunder at the ***Confidential Treatment Requested various patent offices in the Territory for the benefit of CureVac, its Affiliates or their Sublicensees.2.5DILIGENCE; REPORTING. CUREVAC SHALL USE DILIGENT EFFORTS TO DEVELOP, MANUFACTURE AND COMMERCIALIZE LICENSEDPRODUCTS IN THE FIELD OF USE IN THE TERRITORY, AND SHALL KEEP ARCTURUS REASONABLY INFORMED AS TO THE PROGRESS AND RESULTS OF ITS AND ITSAFFILIATES’ AND SUBLICENSEES’ DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THE LICENSED PRODUCT. WITHOUT LIMITING THEFOREGOING, CUREVAC SHALL PROVIDE ARCTURUS WITH A WRITTEN REPORT OF THE DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THELICENSED PRODUCT WITHIN […***…] DAYS AFTER THE END OF EACH CALENDAR YEAR, AND SHALL PROMPTLY RESPOND TO ARCTURUS REASONABLEquestions or requests for additional information relating to such activities.2.6Compliance. CUREVAC SHALL AT ALL TIMES COMPLY WITH ALL APPLICABLE LAWS (INCLUDING ANTI-BRIBERY LAWS) IN THEDEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THE LICENSED PRODUCT AND THE PERFORMANCE OF ITS OTHER OBLIGATIONS UNDER THISLICENSE AGREEMENT, AND SHALL NOT USE ANY EMPLOYEE OR CONSULTANT WHO HAS BEEN DEBARRED BY ANY REGULATORY AUTHORITY OR, TOCureVac’s knowledge, is the subject of debarment proceedings by a regulatory authority. 2.7Updates. ARCTURUS SHALL INFORM CUREVAC WITHIN […***…] BUSINESS DAYS OF INTELLECTUAL PROPERTY MATTERSAFFECTING THE ARCTURUS TECHNOLOGY PATENTS AND THE ARCTURUS KNOW-HOW OF WHICH IT BECOMES AWARE THAT WOULD REASONABLY BEconsidered to negatively impact the rights of CureVac pursuant to this Agreement.2.8Material. CUREVAC SHALL HAVE THE RIGHT TO RETAIN MATERIAL PROVIDED BY ARCTURUS UNDER THE DEVELOPMENT ANDOPTION AGREEMENT, TO THE EXTENT SUCH MATERIAL IS NECESSARY OR USEFUL FOR THE EXERCISE OF A CUREVAC'S RIGHTS OR OBLIGATIONS UNDER THISLICENSE AGREEMENT. FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE, ONLY THE PROVISIONS OF THIS LICENSE AGREEMENT, BUT NOT OF THEDevelopment and Option Agreement, shall apply in relation to such Material.3.License Limitations. 3.1RESERVED RIGHTS. NO LICENSES OR OTHER RIGHTS ARE GRANTED BY ARCTURUS HEREUNDER TO USE ANYTRADEMARK, TRADE NAME, TRADE DRESS OR SERVICE MARK OWNED OR OTHERWISE CONTROLLED BY ARCTURUS OR ANY OF ITSAFFILIATES. ALL LICENSES AND OTHER RIGHTS ARE OR SHALL BE GRANTED ONLY AS EXPRESSLY PROVIDED IN THIS LICENSEAGREEMENT, AND NO OTHER LICENSES OR OTHER RIGHTS IS OR SHALL BE CREATED OR GRANTED BY EITHER PARTY HEREUNDER BYIMPLICATION, ESTOPPEL OR OTHERWISE. CUREVAC SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS AFFILIATES OR SUBLICENSEESTO, PRACTICE OR USE ANY ARCTURUS TECHNOLOGY OUTSIDE OF THE SCOPE OF THE LICENSE GRANTED TO IT UNDER SECTION 2.1 ORIN CONTRAVENTION OF SECTION 3.1. ARCTURUS RETAINS THE EXCLUSIVE RIGHT TO PRACTICE, LICENSE AND OTHERWISE EXPLOIT THEARCTURUS TECHNOLOGY OUTSIDE THE SCOPE OF THE LICENSES GRANTED TO CUREVAC UNDER SECTION 2.1 AND IN AN EVENT TOpractice any rights that are not exclusive pursuant to Section 2.1.3.2OTHER LICENSES. ARCTURUS ACKNOWLEDGES THE RIGHTS GRANTED TO CUREVAC PURSUANT TO THISAGREEMENT AND SHALL NOT GRANT LICENSES UNDER ARCTURUS TECHNOLOGY TO THIRD PARTIES THAT ARE IN CONFLICT WITH THISLicense Agreement it being understood that a license to enable or implement any Pre- ***Confidential Treatment Requested EXISTING LICENSING RESTRICTION WITH RESPECT TO THE TARGET SHALL NOT BE DEEMED A CONFLICT HEREUNDER. IN ADDITION,ARCTURUS SHALL USE DILIGENT EFFORTS TO UNDERTAKE THAT ANY LICENSES OBTAINED FROM THIRD PARTIES WILL BESUBLICENSABLE TO CUREVAC, TO THE EXTENT REQUIRED OR USEFUL FOR THE LICENSED PRODUCT, PROVIDED THAT CUREVAC SHALLBE RESPONSIBLE FOR AN ALLOCABLE PORTION OF THE PAYMENT AND OBLIGATIONS THAT MAY BE REQUIRED IN ORDER TO OBTAINrights with respect to the Licensed Product pursuant to such Third Party agreement. 4.Payments and Royalties.4.1MILESTONE PAYMENTS. CUREVAC WILL MAKE MILESTONE PAYMENTS (EACH, A "MILESTONE PAYMENT") TO ARCTURUS UPONTHE FIRST OCCURRENCE OF EACH OF THE MILESTONE EVENTS (EACH, A "Milestone Event") BY LICENSED PRODUCT AS SET FORTH BELOW IN THIS SECTION4.1. CUREVAC WILL NOTIFY ARCTURUS OF THE ACHIEVEMENT OF EACH MILESTONE EVENT (WHETHER ACHIEVED BY CUREVAC, ITS AFFILIATES ORSUBLICENSEES) WITHIN (I) […***…] BUSINESS DAYS OF SUCH ACHIEVEMENT, IF THE MILESTONE EVENT IS ACHIEVED BY CUREVAC OR ITSAFFILIATES, OR (II) […***…] BUSINESS DAYS OF THE RECEIPT BY CUREVAC OF A NOTIFICATION ABOUT THE ACHIEVEMENT, IF THE MILESTONE EVENT ISachieved by a Sublicensee. EACH MILESTONE PAYMENT WILL BE NON-REFUNDABLE, NON-CREDITABLE AND PAYABLE TO ARCTURUS BY CUREVAC WITHIN […***…] DAYS OFDELIVERY OF AN INVOICE FROM ARCTURUS FOLLOWING NOTIFICATION FROM CUREVAC PURSUANT TO THE PRECEDING PARAGRAPH, PROVIDED THAT IF NOSUCH NOTIFICATION IS TIMELY PROVIDED BY CUREVAC, THE MILESTONE PAYMENT SHALL BE DEEMED PAYABLE […***…] DAYS AFTER (A) THEACHIEVEMENT OF SUCH MILESTONE EVENT, IF THE MILESTONE EVENT IS ACHIEVED BY CUREVAC OR ITS AFFILIATES, OR (B) AFTER THE RECEIPT BYCUREVAC OF THE NOTIFICATION FROM CUREVAC PURSUANT TO SECTION 4.1(II). FOR CLARITY, THE TERM “NON-REFUNDABLE” IS NOT INTENDED TO LIMITeither Party’s rights to pursue damages arising from a breach of this Agreement.IF ONE OR MORE OF THE MILESTONE EVENTS SET FORTH BELOW ARE NOT ACHIEVED OR NOT REQUIRED FOR ANY REASON, THE PAYMENT FOR SUCH SKIPPEDMilestone Event will be due at the same time as the payment for the next achieved Milestone Event. For clarity: […***…].FOR CLARITY, TO THE EXTENT THAT A LICENSED PRODUCT IS INITIATED AGAINST A RARE DISEASE TARGET AND LATER EXPANDED TO A NON-RARE DISEASETARGET, THEN ANY AND ALL MILESTONE PAYMENTS NOT PREVIOUSLY MADE SHALL BE DUE AND PAYABLE UPON THE ACHIEVEMENT OF THE NEXT NON-RAREDisease Milestone (e.g., […***…]). ***Confidential Treatment Requested Milestone EventMilestone Payment Rare Disease Targets […***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…]Non-rare Disease Targets […***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…][…***…] 4.2SUBLICENSING REVENUES.IF WITHIN TWENTY-FOUR (24) MONTHS AFTER THE LICENSE AGREEMENT EFFECTIVE DATECUREVAC GRANTS A SUBLICENSE TO A THIRD PARTY UNDER THIS LICENSE AGREEMENT FOR THE DEVELOPMENT AND COMMERCIALIZATION OF LICENSEDPRODUCTS, THEN CUREVAC WILL PAY TO ARCTURUS […***…] OF ALL SUBLICENSE INCOME ACTUALLY RECEIVED BY CUREVAC, TO THE EXTENT THESUBLICENSE INCOME EXCEEDS THE OPTION EXERCISE FEE PAID BY CUREVAC UNDER THE DEVELOPMENT AND OPTION AGREEMENT TO EXERCISE THEOPTION FOR THIS LICENSE AGREEMENT AND THE MILESTONE PAYMENTS PAID BY CUREVAC UNDER THIS LICENSE AGREEMENT. THE PAYMENTS WILLBE MADE WITHIN […***…] DAYS AFTER RECEIPT BY CUREVAC FROM THE THIRD PARTY. FOR PURPOSES OF CLARITY, IF CUREVAC GRANTS A SUBLICENSETO THIRD PARTIES LATER THAN […***…] MONTHS AFTER THE LICENSE AGREEMENT EFFECTIVE DATE, CUREVAC WILL NOT OWE ANY SUBLICENSINGIncome to Arcturus.4.3Royalties.(a)Royalty. SUBJECT TO THE REMAINDER OF THIS SECTION 4.3, ON A COUNTRY-BY-COUNTRY BASIS AND A LICENSEDPRODUCT-BY-LICENSED PRODUCT BASIS, CUREVAC WILL PAY TO ARCTURUS (I) A ROYALTY OF […***…] OF NET SALES OF THE LICENSEDProduct (ii) ***Confidential Treatment Requested AS WELL AS OF ANY NET SALES MILESTONES (WITHOUT OFFSET FOR ANY REDUCTIONS PURSUANT TO SECTION 4.3(B)) FOR SUCH LICENSEDProduct received from the Sublicensee.(b)Third Party Payments and Royalty Reductions. IF CUREVAC OR ITS AFFILIATE OR SUBLICENSEE, IN ITSREASONABLE JUDGMENT, CONSIDERS IT NECESSARY OR USEFUL TO OBTAIN A LICENSE FROM ANY THIRD PARTY UNDER ANY LMD TECHNOLOGYTHAT COVERS A LICENSED PRODUCT IN ORDER TO DEVELOP, MANUFACTURE OR COMMERCIALIZE SUCH LICENSED PRODUCT, THE AMOUNT OFCUREVAC’S ROYALTY OBLIGATIONS UNDER SECTIONS 4.3(A) WILL BE REDUCED BY […***…] OF THE AMOUNT OF THE UPFRONT, MILESTONEAND ROYALTY PAYMENTS MADE TO SUCH THIRD PARTY ON ACCOUNT OF THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF SUCHLICENSED PRODUCT ("ROYALTY REDUCTIONS"), provided, however, THAT ANY ROYALTY REDUCTION SHALL NOT RESULT IN LESS THAN THEminimum royalty due to Arcturus under Section (c) below.(c)Minimum Royalty. IN NO EVENT WILL THE ROYALTY PAYABLE BY CUREVAC TO ARCTURUS FOR ANY LICENSEDPRODUCT BE LESS THAN (I) […***…] IF THE REDUCTION IN SUBSECTION (E) DOES NOT APPLY; OR (II) […***…] IF THE REDUCTION INsubsection (e) also applies.(d)Term. The royalty term ("Royalty Term") SHALL EXPIRE ON A COUNTRY-BY-COUNTRY AND LICENSED PRODUCT-BY-LICENSED PRODUCT BASIS, ON THE LAST TO OCCUR OF (I) EXPIRATION OF THE LAST TO EXPIRE VALID CLAIM IN THE ARCTURUS TECHNOLOGYTHAT, BUT FOR THE LICENSE DESCRIBED HEREIN FROM ARCTURUS TO CUREVAC FOR THE APPLICABLE LICENSED PRODUCT, IS INFRINGED BY THEMAKING, USING OR SALE OF SUCH LICENSED PRODUCT, (II) EXPIRATION OF ANY PERIOD OF DATA EXCLUSIVITY, MARKET EXCLUSIVITY ORSUPPLEMENTAL PROTECTION CERTIFICATES COVERING THE LICENSED PRODUCT IN SUCH COUNTRY; AND (III) […***…] YEARS AFTER FIRSTCOMMERCIAL SALE OF LICENSED PRODUCT IN SUCH COUNTRY. FOR THE AVOIDANCE OF DOUBT, UPON EXHAUSTION OF THE OBLIGATION TO PAYROYALTIES TO ARCTURUS AS SET FORTH ABOVE THE CONTINUED USE OF ARCTURUS KNOW-HOW COMPRISED IN THE ARCTURUS TECHNOLOGYFOR THE DEVELOPMENT, MANUFACTURE AND/OR SALE OF THe LICENSED PRODUCT SHALL NOT, IN AND OF ITSELF, OBLIGATE CUREVAC TO PAYFURTHER ROYALTIES TO ARCTURUS. THEREAFTER, CUREVAC'S LICENSE UNDER SECTION 2.1 WILL BECOME IRREVOCABLE, PERPETUAL, FULLY PAID-up and royalty-free on a country-by-country and Licensed Product-by-Licensed Product basis.(e)Know-How Royalty. On a country-by-country, and a Licensed -Product-by-Licensed Product basis, in theEVENT THAT DURING THE ROYALTY TERM A LICENSED PRODUCT IS NOT COVERED BY A VALID CLAIM, THE ROYALTY OTHERWISE PAYABLE FORsuch Licensed Product, after the Royalty Reductions above, will be reduced by […***…].4.4Payment Terms.(a)Manner of Payment. ALL PAYMENTS TO BE MADE BY CUREVAC HEREUNDER WILL BE MADE IN U.S. DOLLARS BYwire transfer to such bank account as Arcturus may designate.(b)Records and Audits. CUREVAC SHALL KEEP, AND SHALL CAUSE EACH OF ITS AFFILIATES AND SUBLICENSEES, ASAPPLICABLE, TO KEEP ADEQUATE BOOKS AND RECORDS OF ACCOUNTING FOR THE PURPOSE OF CALCULATING ALL ROYALTIES AND OTHER AMOUNTSpayable to Arcturus hereunder. For the […***…] years next following the end of the calendar ***Confidential Treatment Requested YEAR TO WHICH EACH SHALL PERTAIN, SUCH BOOKS AND RECORDS OF ACCOUNTING (INCLUDING THOSE OF CUREVAC’S AFFILIATES ANDSUBLICENSEES) SHALL BE KEPT AT EACH OF THEIR PRINCIPAL PLACES OF BUSINESS AND SHALL BE OPEN FOR INSPECTION AT REASONABLE TIMESAND UPON REASONABLE NOTICE BY AN INDEPENDENT CERTIFIED ACCOUNTANT SELECTED BY ARCTURUS, AND WHICH IS REASONABLY ACCEPTABLETO CUREVAC, FOR THE SOLE PURPOSE OF INSPECTING THE NET SALES CALCULATIONS AND SUPPORTING DETAILS TO THE EXTENT REASONABLYNECESSARY AND RESULTING ROYALTIES AND OTHER AMOUNTS DUE TO ARCTURUS UNDER THIS LICENSE AGREEMENT. IN NO EVENT SHALL SUCHINSPECTIONS BE CONDUCTED HEREUNDER MORE FREQUENTLY THAN ONCE EVERY […***…] MONTHS. SUCH ACCOUNTANT MUST HAVEEXECUTED AND DELIVERED TO CUREVAC AND ITS AFFILIATES, A CONFIDENTIALITY AGREEMENT AS REASONABLY REQUESTED BY CUREVAC,WHICH SHALL INCLUDE PROVISIONS LIMITING SUCH ACCOUNTANT’S DISCLOSURE TO ARCTURUS TO ONLY THE RESULTS AND BASIS FOR SUCH RESULTSOF SUCH INSPECTION. THE RESULTS OF SUCH INSPECTION, IF ANY, SHALL BE BINDING ON BOTH PARTIES. ANY UNDERPAYMENTS PLUS INTERESTFROM THE ORIGINAL DUE DATE SHALL BE PAID BY CUREVAC WITHIN […***…] DAYS OF NOTIFICATION OF THE RESULTS OF SUCHINSPECTION. ANY OVERPAYMENTS SHALL BE FULLY CREDITABLE AGAINST AMOUNTS PAYABLE IN SUBSEQUENT PAYMENT PERIODS. ARCTURUSSHALL PAY FOR SUCH INSPECTIONS, EXCEPT THAT IN THE EVENT THERE IS ANY UPWARD ADJUSTMENT IN AGGREGATE ROYALTIES AND OTHERAMOUNTS PAYABLE FOR ANY CALENDAR YEAR SHOWN BY SUCH INSPECTION OF MORE THAN […***…] OF THE AMOUNT PAID, CUREVACshall reimburse Arcturus for any reasonable out-of-pocket costs of such accountant.(c)Reports and Royalty Payments. FOR AS LONG AS ROYALTIES ARE DUE UNDER SECTION 4.3, CUREVAC SHALL FURNISHto Arcturus written reports.(i)REPORTS SHALL BE PROVIDED WITHIN […***…] DAYS OF (1) THE END OF THE CALENDARQUARTER IF NET SALES ARE GENERATED BY CUREVAC AND ITS AFFILIATES, AND (2) THE RECEIPT OF CORRESPONDING INFORMATION(WHICH MAY BE ESTIMATED) FROM SUBLICENSEES BUT IN ANY EVENT WITHIN […***…] DAYS OF THE END OF THE CALENDARQuarter with respect to Net Sales generated by such Sublicensees. (ii)ROYALTY PAYMENTS FOR EACH CALENDAR QUARTER SHALL BE DUE WITHIN […***…]BUSINESS DAYS OF DELIVERY OF AN INVOICE FROM ARCTURUS FOLLOWING SUBMISSION OF A ROYALTY REPORT FROM CUREVAC,BUT ONLY SUBJECT TO THE PRIOR RECEIPT BY CUREVAC OF THE CORRESPONDING ROYALTY PAYMENT FROM THE SUBLICENSEE, IFAPPLICABLE; HOWEVER SUCH ROYALTY PAYMENTS DUE TO ARCTURUS SHALL NOT BE REDUCED BY DEDUCTIONS WHICH EXCEEDthose covered by the Net Sales definition according to Section 1.43. (iii)THE REPORT SHALL INCLUDE, AT A MINIMUM, THE FOLLOWING INFORMATION FOR THEAPPLICABLE CALENDAR QUARTER FOR EACH LICENSED PRODUCT IF NET SALES ARE GENERATED BY CUREVAC AND ITS AFFILIATES:(I) THE GROSS SALES BY COUNTRY REASONABLY REQUIRED FOR THE CALCULATION OF ROYALTY PAYMENTS DUE ACCORDING TO THISAGREEMENT, (II) THE CALCULATION IN REASONABLE DETAIL OF THE NET SALES FROM SUCH GROSS SALES AMOUNTS, INCLUDING THEDEDUCTIONS PURSUANT TO THE DEFINITION OF NET SALES AND THE AMOUNTS OF ANY CREDITS OR REDUCTIONS PERMITTED BYSection 4.2; and (iii) the computations for any Arcturus currency conversions pursuant to subsection (d) below. (iv)CUREVAC WILL REQUIRE EACH SUBLICENSEE TO SHARE WITH ARCTURUS THE INFORMATIONlisted in the foregoing clauses as it relates to Net ***Confidential Treatment Requested Sales made by such Sublicensee, and to the extent practicable, will include such Sublicensee information in suchreport; provided that the level of detail with respect to the items subject to report pursuant to Section 4.4(c)(iii)shall be limited to the information that CureVac actually receives from any such Sublicensee. All such reportsshall be considered the Confidential Information of CureVac, subject to Section 4.4(b). (d)Currency Exchange. WITH RESPECT TO NET SALES INVOICED IN U.S. DOLLARS, THE NET SALES AND THE AMOUNTSDUE TO ARCTURUS HEREUNDER WILL BE EXPRESSED IN U.S. DOLLARS. WITH RESPECT TO NET SALES INVOICED IN A CURRENCY OTHER THANU.S. DOLLARS, PAYMENTS WILL BE CALCULATED BASED ON THE AVERAGE OF THE CLOSING EXCHANGE RATES REPORTED BY THE WALL STREETJOURNAL (http://quotes.wsj.com/fx/EURUSD), OR SUCH OTHER SOURCE AS THE PARTIES MAY AGREE IN WRITING, OF THE APPLICABLEreporting period for the payment due.(e)Taxes. CUREVAC MAY WITHHOLD FROM PAYMENTS DUE TO ARCTURUS AMOUNTS FOR PAYMENT OF ANY WITHHOLDINGTAX THAT IS REQUIRED BY LAW TO BE PAID TO ANY TAXING AUTHORITY WITH RESPECT TO SUCH PAYMENTS. CUREVAC WILL PROVIDE ARCTURUSALL RELEVANT DOCUMENTS AND CORRESPONDENCE, AND WILL ALSO PROVIDE TO ARCTURUS ANY OTHER COOPERATION OR ASSISTANCE ON AREASONABLE BASIS AS MAY BE NECESSARY TO ENABLE ARCTURUS TO CLAIM EXEMPTION FROM SUCH WITHHOLDING TAXES AND TO RECEIVE AREFUND OF SUCH WITHHOLDING TAX OR CLAIM A FOREIGN TAX CREDIT. CUREVAC WILL GIVE PROPER EVIDENCE FROM TIME TO TIME AS TO THEPAYMENT OF ANY SUCH TAX. THE PARTIES WILL COOPERATE WITH EACH OTHER IN SEEKING DEDUCTIONS UNDER ANY DOUBLE TAXATION OROTHER SIMILAR TREATY OR AGREEMENT FROM TIME TO TIME IN FORCE. CUREVAC SHALL USE DILIGENT EFFORTS TO MINIMIZE WITHHOLDINGTAXES. IN THE EVENT THAT ANY TAX DEDUCTION OR WITHHOLDING OBLIGATION ARISES OR INCREASES AS A DIRECT RESULT OF ANYREINCORPORATION, REDOMICILIATION, CHANGE IN SOURCE OF PAYMENTS UNDER THIS AGREEMENT OR OTHER SIMILAR CORPORATE STRUCTURINGACTIONS UNDERTAKEN BY CUREVAC FROM AND AFTER THE LICENSE AGREEMENT EFFECTIVE DATE, THEN CUREVAC SHALL INCREASE THEPAYMENT (IN RESPECT OF WHICH SUCH DEDUCTION OR WITHHOLDING OF TAX IS REQUIRED TO BE MADE) TO ENSURE THAT ARCTURUS RECEIVESAN AMOUNT EQUAL TO THE AMOUNT THAT IT WOULD HAVE RECEIVED HAD NO SUCH ACTION OCCURRED. APART FROM ANY SUCH PERMITTEDWITHHOLDING AND THOSE DEDUCTIONS EXPRESSLY INCLUDED IN THE DEFINITION OF NET SALES, THE AMOUNTS PAYABLE BY CUREVAC TOARCTURUS HEREUNDER WILL NOT BE REDUCED ON ACCOUNT OF ANY TAXES, CHARGES, DUTIES OR OTHER LEVIES. EACH PARTY SHALL BE SOLELYRESPONSIBLE FOR THE PAYMENT OF ALL TAXES IMPOSED ON ITS SHARE OF INCOME ARISING DIRECTLY OR INDIRECTLY FROM THE ACTIVITIES OF THEParties under this License Agreement.(f)Blocked Payments. In the event that, by reason of applicable law in any country, it becomes impossible orILLEGAL FOR CUREVAC OR ITS AFFILIATES OR SUBLICENSEES TO TRANSFER, OR HAVE TRANSFERRED ON ITS BEHALF, PAYMENTS OWED TO ARCTURUSHEREUNDER, CUREVAC WILL PROMPTLY NOTIFY ARCTURUS OF THE CONDITIONS PREVENTING SUCH TRANSFER AND SUCH PAYMENTS WILL BEDEPOSITED IN LOCAL CURRENCY IN THE RELEVANT COUNTRY TO THE CREDIT OF ARCTURUS IN A RECOGNIZED BANKING INSTITUTION PROPOSED BYARCTURUS AND REASONABLY ACCEPTABLE TO CUREVAC OR, IF NONE IS PROPOSED BY ARCTURUS WITHIN A PERIOD OF […***…] DAYS, IN ARECOGNIZED BANKING INSTITUTION SELECTED BY CUREVAC OR ITS AFFILIATE OR SUBLICENSEE, AS THE CASE MAY BE, AND IDENTIFIED IN Awritten notice given to Arcturus.(g)Interest Due. IF ANY PAYMENT DUE TO ARCTURUS UNDER THIS LICENSE AGREEMENT IS OVERDUE (AND IS NOTsubject to a good faith dispute), then CureVac will ***Confidential Treatment Requested PAY INTEREST THEREON (BEFORE AND AFTER ANY JUDGMENT) AT AN ANNUAL RATE OF THE LESSER OF […***…] ABOVE THE PRIME RATE ASREPORTED IN THE WALL STREET JOURNAL, EASTERN EDITION, AND THE MAXIMUM RATE PERMITTED BY APPLICABLE LAW, SUCH INTEREST TOrun from the date upon which payment of such sum became due until payment thereof in full together with such interest.(h)Mutual Convenience of the Parties. THE ROYALTY AND OTHER PAYMENT OBLIGATIONS SET FORTH HEREUNDER HAVEBEEN AGREED TO BY THE PARTIES FOR THE PURPOSE OF REFLECTING AND ADVANCING THEIR MUTUAL CONVENIENCE, INCLUDING THE EASE OFcalculating and paying royalties and other amounts to Arcturus.5.Ownership and Inventorship of IP.5.1Solely-Owned IP. As between the Parties and subject to Section 5.3, each Party will own and retain all right, titleAND INTEREST IN AND TO ANY AND ALL KNOW-HOW AND PATENTS ARISING THEREFROM THAT ARE DISCOVERED, CREATED, CONCEIVED, DEVELOPED ORREDUCED TO PRACTICE UNDER OR IN CONNECTION WITH THIS LICENSE AGREEMENT (THE “Inventions”) SOLELY BY OR ON BEHALF OF SUCHPARTY. SUBJECT TO THE LICENSES HEREUNDER AND THE OTHER TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT OR ANY OTHER AGREEMENT BETWEENTHE PARTIES, EACH PARTY WILL BE SOLELY RESPONSIBLE FOR THE PROSECUTION AND MAINTENANCE, AND THE ENFORCEMENT AND DEFENSE, OF ITS SOLELY-owned Patents.5.2Inventorship. INVENTORSHIP OF ALL INVENTIONS SHALL BE DETERMINED IN ACCORDANCE WITH APPLICABLE LAWS. EACH PARTYWILL ENSURE THAT EACH EMPLOYEE, CONSULTANT AND SUBCONTRACTOR CONDUCTING ANY ACTIVITIES UNDER THIS LICENSE AGREEMENT ON BEHALF OF SUCHPARTY WILL BE SUBJECT TO WRITTEN AGREEMENTS TO ASSIGN TO SUCH PARTY ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE INVENTIONS SO THAT SUCHPARTY CAN COMPLY WITH ITS OBLIGATIONS WITH RESPECT TO THE OWNERSHIP ALLOCATION OF THE INVENTIONS AS SET FORTH BELOW. IN ADDITION, EACHPARTY SHALL BE SOLELY RESPONSIBLE FOR PAYMENTS THAT MAY BE REQUIRED TO ANY OF SUCH PARTY’S EMPLOYEES OR CONSULTANTS AND SUBCONTRACTORSin connection with or with respect to such agreements, including moral rights payments.5.3Ownership. NOTWITHSTANDING INVENTORSHIP IN THE FIRST INSTANCE PURSUANT TO SECTION 5.2, OWNERSHIP OF ALLINVENTIONS, AS BETWEEN THE PARTIES, WILL BE ASSIGNED BY THE PARTIES AS FOLLOWS: (A) ARCTURUS WILL SOLELY OWN ALL INVENTIONS THAT AREIMPROVEMENTS SOLELY TO THE LMD TECHNOLOGY (“LMD INVENTIONS”), AND (B) CUREVAC WILL SOLELY OWN ALL INVENTIONS THAT AREIMPROVEMENTS SOLELY TO THE MRNA TECHNOLOGY (“MRNA INVENTIONS”). SPECIFICALLY, CUREVAC HEREBY ASSIGNS TO ARCTURUS ALL OF ITSRIGHT, TITLE AND INTEREST IN AND TO ANY AND ALL LMD INVENTIONS, AND AGREES TO TAKE SUCH ACTIONS REASONABLY REQUESTED BY ARCTURUS TOEVIDENCE SUCH ASSIGNMENT. ARCTURUS HEREBY ASSIGNS TO CUREVAC ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO ANY AND ALL MRNAINVENTIONS, AND AGREES TO TAKE SUCH ACTIONS REASONABLY REQUESTED BY CUREVAC TO EVIDENCE SUCH ASSIGNMENT. FOR CLARITY, THE ASSIGNMENTprovisions with respect to mRNA Inventions are restricted solely to improvements to the mRNA Technology.6.Patent Prosecution and Maintenance.6.1Generally. ***Confidential Treatment Requested (a)AS BETWEEN THE PARTIES AND SUBJECT TO SECTION 6.2 BELOW, ARCTURUS (OR ITS THIRD PARTY LICENSOR, IF ANY)will have the sole right, at its sole costs, to prosecute and maintain Arcturus Technology Patents, other than the Joint Interest Patents.(b)IN RELATION TO ANY ARCTURUS TECHNOLOGY PATENTS THAT SPECIFICALLY CLAIM THE LICENSED PRODUCT, PRIOR TOfiling, ARCTURUS WILL PROVIDE CUREVAC WITH COPIES OF ALL SPECIFIC CLAIMS RELEVANT TO THE LICENSED PRODUCT IN SUCH APPLICATIONS FOR ALLSUCH ARCTURUS TECHNOLOGY PATENTS, AND ALL OTHER MATERIAL SUBMISSIONS AND CORRESPONDENCE RELATING TO SUCH CLAIMS WITH ANY PATENTAUTHORITIES REGARDING SUCH ARCTURUS TECHNOLOGY PATENTS, IN SUFFICIENT TIME (NOT TO BE LESS THAN […***…] DAYS) TO ALLOW FOR REVIEW ANDCOMMENT BY CUREVAC. IN ADDITION, ARCTURUS WILL PROVIDE CUREVAC AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH ARCTURUS AND ITSCOUNSEL REGARDING PROSECUTION AND MAINTENANCE OF ANY SUCH ARCTURUS TECHNOLOGY PATENTS, AND ARCTURUS WILL NOT UNREASONABLY REFUSEto address all reasonable comments timely made by or on behalf of CureVac.(c)AS BETWEEN THE PARTIES, CUREVAC WILL HAVE THE FIRST RIGHT TO PROSECUTE AND MAINTAIN ANY AND ALL JOINTINTEREST PATENTS AND THE PARTIES WILL SHARE EQUALLY ALL COSTS INCURRED BY CUREVAC IN CONNECTION WITH SUCH EFFORTS. PRIOR TO FILING,CUREVAC WILL PROVIDE ARCTURUS WITH COPIES OF ALL APPLICATIONS FOR SUCH JOINT INTEREST PATENTS, AND ALL OTHER MATERIAL SUBMISSIONS ANDCORRESPONDENCE WITH ANY PATENT AUTHORITIES REGARDING SUCH JOINT INTEREST PATENTS, IN SUFFICIENT TIME (NOT TO BE LESS THAN […***…] DAYS)TO ALLOW FOR REVIEW AND COMMENT BY ARCTURUS. IN ADDITION, CUREVAC WILL PROVIDE ARCTURUS AND ITS COUNSEL WITH AN OPPORTUNITY TOCONSULT WITH CUREVAC AND ITS COUNSEL REGARDING PROSECUTION AND MAINTENANCE OF ANY SUCH JOINT INTEREST PATENTS, AND CUREVAC WILLconsider in good faith all reasonable comments timely made by or on behalf of Arcturus. (d)IN THE EVENT THAT CUREVAC OR ITS AFFILIATES GRANTS A SUBLICENSE PURSUANT TO SECTION 2.2, AS BETWEENCureVac and any such Sublicensee, (i)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT DOES NOT SPECIFICALLY CLAIM THELICENSED PRODUCT, CUREVAC SHALL RETAIN ITS RIGHTS TO PROSECUTE ANY SUCH SUBLICENSED ARCTURUS TECHNOLOGYPATENTS AND JOINT INTEREST PATENTS AS SET FORTH IN SECTIONS 6.1(B) AND 6.1(C); PROVIDED, HOWEVER, THAT SUCHSUBLICENSE MAY PROVIDE FOR INSTRUCTION BY THE SUBLICENSEE OF CUREVAC’S EXERCISE OF ITS RIGHTS TO PROSECUTE ANYsublicensed Arcturus Technology Patent or Joint Interest Patent; (ii)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT SPECIFICALLY CLAIMS THE LICENSEDPRODUCT (I.E., WITH RESPECT TO THE CLAIMS LIMITED TO THE LICENSED PRODUCT, BUT NOT THE BROADER CLAIMS THAT COVEROTHER PRODUCTS OR POTENTIAL PRODUCTS IN SUCH ARCTURUS TECHNOLOGY PATENTS OR JOINT INTEREST PATENTS), CUREVACSHALL HAVE THE RIGHT TO SUBLICENSE ITS RIGHTS TO PROSECUTE ANY SUCH SUBLICENSED ARCTURUS TECHNOLOGY PATENTS ANDJoint Interest Patents as set forth in Sections 6.1(b) and 6.1(c) to the Sublicensee.6.2Election Not to Prosecute or Maintain or Pay Patent Costs.(a)IF ARCTURUS ELECTS NOT TO PAY ITS SHARE OF THE PATENT COSTS ASSOCIATED WITH PROSECUTION OR MAINTENANCE OFANY JOINT INTEREST PATENTS, THEN IT SHALL ASSIGN ITS CO-OWNERSHIP SHARE IN SUCH PATENTS TO CUREVAC AND THE RESPECTIVE PATENTshall no longer be considered a Joint Interest Patent. ***Confidential Treatment Requested (b)By CureVac. IF CUREVAC ELECTS NOT (I) TO FILE, PROSECUTE OR MAINTAIN ANY JOINT INTEREST PATENTS FOR WHICH ITIS RESPONSIBLE UNDER SECTION 6.1 IN ANY PARTICULAR COUNTRY BEFORE THE APPLICABLE FILING DEADLINE OR CONTINUE SUCH ACTIVITIESONCE FILED IN A PARTICULAR COUNTRY, OR (II) TO PAY ITS SHARE OF THE PATENT COSTS associated WITH PROSECUTION OR MAINTENANCE OFANY JOINT INTEREST PATENTS THEN IN EACH SUCH CASE CUREVAC WILL SO NOTIFY ARCTURUS, PROMPTLY IN WRITING AND IN GOOD TIME TOENABLE ARCTURUS TO MEET ANY DEADLINES BY WHICH AN ACTION MUST BE TAKEN TO PRESERVE SUCH JOINT INTEREST PATENT IN SUCHCOUNTRY AT ARCTURUS' EXPENSE, IF ARCTURUS SO REQUESTS. UPON RECEIPT OF EACH SUCH NOTICE BY CUREVAC, ARCTURUS WILL HAVE THERIGHT, BUT NOT THE OBLIGATION, TO NOTIFY CUREVAC IN WRITING ON A TIMELY BASIS THAT CUREVAC SHOULD TRANSFER THE PROSECUTION ORMAINTENANCE OF SUCH JOINT INTEREST PATENT TO ARCTURUS AND AT ARCTURUS' SOLE EXPENSE. ARCTURUS IS ENTITLED TO DISCONTINUE THEPAYMENT OF PATENT COSTS FOR ANY JOINT INTEREST PATENTS AT ANY TIME, PROVIDED THAT IT WILL SO NOTIFY CUREVAC IN WRITING IN TIMEFOR SUCH DISCONTINUANCE. IN THE EVENT THAT ARCTURUS ASSUMES THE PROSECUTION AND MAINTENANCE OF ANY SUCH JOINT INTERESTPATENT, THEN CUREVAC WOULD MAKE AVAILABLE TO ARCTURUS ALL DOCUMENTATION AND CORRESPONDENCE WITH RESPECT TO SUCH JOINTINTEREST PATENT, SUCH JOINT INTEREST PATENT SHALL NO LONGER BE LICENSED UNDER THIS AGREEMENT WITH RESPECT TO THE LICENSEDProduct.6.3Cooperation. EACH PARTY WILL REASONABLY COOPERATE WITH THE OTHER PARTY IN THOSE ACTIVITIES INVOLVING THE ARCTURUSTECHNOLOGY PATENTS AND JOINT INTEREST PATENTS SET FORTH IN SECTIONS 6.1 AND 6.2. SUCH COOPERATION INCLUDES PROMPTLY executing ALLDOCUMENTS, OR REQUIRING INVENTORS, SUBCONTRACTORS, EMPLOYEES AND CONSULTANTS AND AGENTS OF CUREVAC AND ARCTURUS AND THEIR RESPECTIVEAFFILIATES AND SUBLICENSEES TO EXECUTE ALL DOCUMENTS, AS REASONABLE AND APPROPRIATE SO AS TO ENABLE SUCH ACTIVITIES IN RESPECT OF ANYsuch Arcturus Technology Patents in any country.7.Patent Enforcement and Defense. 7.1Notice. TO THE EXTENT NOT IN BREACH OF AN OBLIGATION OF CONFIDENTIALITY, EACH PARTY WILL PROMPTLY NOTIFY, IN WRITING,THE OTHER PARTY UPON LEARNING OF ANY ACTUAL OR SUSPECTED INFRINGEMENT OF ANY ARCTURUS Technology PATENTS BY A THIRD PARTY, OR OF ANYCLAIM OF INVALIDITY, UNENFORCEABILITY, OR NON-INFRINGEMENT OF ANY ARCTURUS TECHNOLOGY PATENTS, AND WILL, ALONG WITH SUCH NOTICE, SUPPLYthe other Party with any evidence in its possession pertaining thereto.7.2Enforcement and Defense.(a)Enforcement. (i)As between the Parties,(1)ARCTURUS AND ITS THIRDPARTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANY EXISTING BACK-UPENFORCEMENT RIGHTS), AT ITS COST, WILL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, TOSEEK TO ABATE ANY INFRINGEMENT OF THE ARCTURUS TECHNOLOGY PATENTS (OTHER THANTHOSE IN SUBSECTION (2)) BY A THIRD PARTY, OR TO FILE SUIT AGAINST ANY SUCH THIRDParty for such infringement, and(2)CUREVAC (OR ITSSUBLICENSEE, IF ANY) SHALL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTIONOR BRING SUIT AND BEAR ALL EXPENSES AGAINST SUCH THIRD PARTY INFRINGER WITH RESPECTto: (A) Joint Interest Patents; and/or (B) any other Arcturus TECHNOLOGY PATENTS THAT, ON THE DATE OF FIRST NOTICE OF SUCH INFRINGEMENT, SPECIFICALLY CLAIM THE LICENSED PRODUCT BUT ARE NOT NECESSARYOR USEFUL FOR THE RESEARCH, DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION OF ANY PRODUCT COMPRISING ARCTURUS TECHNOLOGY THAT ISEXCLUSIVELY LICENSED OR OPTIONED TO A THIRD PARTY OR IS IN LATE STAGE DEVELOPMENT OR BEING COMMERCIALIZED BY ARCTURUS OR ITSAffiliates.(b)IF THE PARTY FIRST RESPONSIBLE FOR SUCH ENFORCEMENT ELECTS NOT TO TAKE ACTION OR TO BRING SUIT TO PROSECUTESUCH INFRINGEMENT OR TO CONTINUE SUCH ACTION OR SUIT, IT SHALL NOTIFY THE OTHER PARTY OF SUCH ELECTION WITHIN […***…] DAYSAFTER BECOME AWARE OF OR RECEIPT OF THE NOTICE OF THE INFRINGEMENT OR AFTER THE ELECTION TO STOP ANY SUCH ACTION OR SUIT. IF AFTERTHE EXPIRATION OF THE […***…] DAYS PERIOD (OR, IF EARLIER, THE DATE UPON WHICH THE RESPONSIBLE PARTY PROVIDES WRITTEN NOTICETHAT IT DOES NOT PLAN TO BRING SUCH ACTION) THE RESPONSIBLE PARTY HAS NEITHER OBTAINED A DISCONTINUANCE OF INFRINGEMENT NORfiled suit against any such Third Party infringer of such Patent, then (i)IN THE CASE OF AN ELECTION BY ARCTURUS AND ITS THIRD PARTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANYEXISTING BACK-UP ENFORCEMENT RIGHTS) NOT TO PROSECUTE AN INFRINGEMENT OF AN ARCTURUS TECHNOLOGY PATENTSPECIFICALLY CLAIMING THE LICENSED PRODUCT, CUREVAC SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTIONOR BRING SUIT AGAINST SUCH THIRD PARTY INFRINGER OF SUCH PATENTS, PROVIDED THAT THE INFRINGEMENT IS WITH RESPECT TOA PRODUCT RELATED TO THE TARGET(S) UNDER THIS LICENSE AGREEMENT, AND FURTHER PROVIDED THAT CUREVAC SHALL BEARall the expenses of such suit and (ii)IN THE CASE OF A CUREVAC ELECTION NOT TO PROSECUTE AN INFRINGEMENT OF A JOINT INTEREST PATENTS OR ARCTURUSTECHNOLOGY PATENT WITH RESPECT TO WHICH CUREVAC HAS RIGHTS TO TAKE FIRST ACTION, (I) ARCTURUS SHALL HAVE THERIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTION OR BRING SUIT AGAINST SUCH THIRD PARTY INFRINGER OF SUCH PATENTS,PROVIDED THAT ARCTURUS SHALL BEAR ALL THE EXPENSES OF SUCH SUIT,AND CUREVAC SHALL JOIN ARCTURUS IN SUCH SUIT TOTHE EXTENT LEGALLY REQUIRED, UNLESS (II) CUREVAC DECIDES TO ASSIGN ITS INTEREST IN SUCH JOINT INTEREST PATENT – ON ACOUNTRY-BY-COUNTRY BASIS - TO ARCTURUS AND SUCH JOINT INTEREST PATENT SHALL BECOME AN ARCTURUS TECHNOLOGYPatent and no longer subject to license pursuant to this License Agreement.(c)Defense. (i)As between the Parties,(1)ARCTURUS AND ITS THIRDPARTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANY EXISTING BACK-UP DEFENSERIGHTS) WILL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE COSTS, TO DEFENDAGAINST A DECLARATORY JUDGMENT ACTION OR OTHER ACTION CHALLENGING ANY ARCTURUSTECHNOLOGY PATENTS, OTHER THAN: (I) JOINT INTEREST PATENTS; AND (II) ANY OTHERARCTURUS TECHNOLOGY PATENTS THAT, ON THE DATE OF FIRST NOTICE OF SUCH ACTION,SPECIFICALLY CLAIM THE LICENSED PRODUCT BUT ARE NOT NECESSARY OR USEFUL FOR THERESEARCH, DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION OF ANY PRODUCTCOMPRISING ARCTURUS TECHNOLOGY THAT IS EXCLUSIVELY LICENSED OR OPTIONED TO ATHIRD PARTY OR IS IN LATE STAGE DEVELOPMENT OR BEING COMMERCIALIZED BYArcturus or its Affiliates, and ***Confidential Treatment Requested (2)CureVac shall have the firstRIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE COSTS, TO DEFEND AGAINST A DECLARATORYJUDGMENT ACTION OR OTHER ACTION CHALLENGING JOINT INTEREST PATENTS AS WELL AS SUCHother Arcturus Technology Patents that specifically claim the Licensed Product. (ii)IF THE PARTY FIRST RESPONSIBLE FOR SUCH DEFENSE DOES NOT TAKE STEPS TO DEFEND WITHIN A COMMERCIALLY REASONABLYTIME, OR ELECTS NOT TO CONTINUE ANY SUCH DEFENSE (IN WHICH CASE IT WILL PROMPTLY PROVIDE NOTICE THEREOF TO THEOTHER PARTY), THEN (I) IN THE CASE OF AN ELECTION BY ARCTURUS AND ITS THIRD PARTY LICENSOR OR LICENSEE (SOLELY TO THEEXTENT OF ANY EXISTING BACK-UP DEFENSE RIGHTS) NOT TO DEFEND AN ARCTURUS TECHNOLOGY PATENT SPECIFICALLYCLAIMING THE LICENSED PRODUCT, CUREVAC SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO DEFEND ANY ARCTURUSTECHNOLOGY PATENTS THAT COVER LICENSED PRODUCT AND NO OTHER PRODUCT LICENSED OR OPTIONED BY ARCTURUS TO ATHIRD PARTY OR COMMERCIALIZED BY ARCTURUS, PROVIDED THAT CUREVAC SHALL BEAR ALL THE EXPENSES OF SUCH SUIT AND(II) IN THE CASE OF A CUREVAC ELECTION NOT TO DEFEND THE JOINT INTEREST PATENTS, ARCTURUS SHALL HAVE THE RIGHT, BUTNOT THE OBLIGATION, TO TAKE ACTION OR BRING SUIT TO DEFEND SUCH PATENTS, PROVIDED THAT ARCTURUS SHALL BEAR ALL THEEXPENSES OF SUCH SUIT. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT CUREVAC ELECTS NOT TO PROSECUTE ANINFRINGEMENT OF A JOINT INTEREST PATENT, THEN CUREVAC SHALL, AT ITS DISCRETION, EITHER (I) ASSIGN SUCH JOINT INTERESTPATENT TO ARCTURUS – ON A COUNTRY-BY-COUNTRY BASIS -, WHICH SHALL BECOME AN ARCTURUS TECHNOLOGY PATENT ANDNO LONGER SUBJECT TO LICENSE PURSUANT TO THIS LICENSE AGREEMENT OR (II) JOIN ARCTURUS IN SUCH SUIT TO THE EXTENTlegally required.(d)NOTWITHSTANDING THE FOREGOING, ANY RESPONSE TO A THIRD PARTY INFRINGER'S COUNTERCLAIM OF INVALIDITY ORUNENFORCEABILITY OF ANY ARCTURUS TECHNOLOGY PATENTS SHALL BE CONTROLLED BY THE PARTY WHO CONTROLS THE RELEVANT ENFORCEMENTproceeding pursuant to Section 7.2 (a) unless otherwise mutually agreed by the Parties. (e)IN THE EVENT THAT CUREVAC OR ITS AFFILIATES GRANTS A SUBLICENSE PURSUANT TO SECTION 2.2, AS BETWEENCureVac and any such Sublicensee, (i)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT DOES NOT SPECIFICALLY CLAIM THELICENSED PRODUCT, CUREVAC SHALL RETAIN ITS RIGHTS TO ENFORCE AND DEFEND ARCTURUS TECHNOLOGY PATENTS AND JOINTINTEREST PATENTS AS SET FORTH IN SECTIONS 7.2(A), 7.2(B), 7.2(C) AND 7.2(D); PROVIDED, HOWEVER, THAT CUREVAC’SEXERCISE OF ITS RIGHTS TO ENFORCE OR DEFEND SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT MAY BEinstructed by a Sublicensee; (ii)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT SPECIFICALLY CLAIMS THE LICENSEDPRODUCT, CUREVAC SHALL HAVE THE RIGHT TO SUBLICENSE ITS RIGHTS TO ENFORCE AND DEFEND ARCTURUS TECHNOLOGYPatents and Joint Interest Patents as set forth in Sections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) to the Sublicensee.(f)Withdrawal, Cooperation and Participation. WITH RESPECT TO ANY INFRINGEMENT OR DEFENSIVE ACTIONidentified above in this Section 7.2 which may be controlled by either CureVac or Arcturus: (i)IF THE CONTROLLING PARTY CEASES TO PURSUE OR WITHDRAWS FROM SUCH ACTION, IT WILL PROMPTLY NOTIFY THE OTHERPARTY (IN GOOD TIME TO ENABLE THE OTHER PARTY TO MEET ANY DEADLINES BY WHICH ANY ACTION MUST BE TAKENTO PRESERVE ANY RIGHTS IN SUCH INFRINGEMENT OR DEFENSIVE ACTION) AND SUCH OTHER PARTY MAY SUBSTITUTEITSELF FOR THE WITHDRAWING PARTY, SHALL BE GRANTED THE RIGHT AND STANDING TO SUE IN THE OTHER PARTY'S NAME,and proceed under the terms and conditions of this Section 7.2. (ii)THE NON-CONTROLLING PARTY WILL COOPERATE WITH THE PARTY CONTROLLING ANY SUCH ACTION (AS MAY BEREASONABLY REQUESTED BY THE CONTROLLING PARTY), INCLUDING (A) PROVIDING ACCESS TO RELEVANT DOCUMENTSAND OTHER EVIDENCE, (B) MAKING ITS AND ITS AFFILIATES AND LICENSEES AND SUBLICENSEES AND ALL OF THEIRRESPECTIVE EMPLOYEES, SUBCONTRACTORS, CONSULTANTS AND AGENTS AVAILABLE AT REASONABLE BUSINESS HOURSAND FOR REASONABLE PERIODS OF TIME, BUT ONLY TO THE EXTENT RELEVANT TO SUCH ACTION, AND (C) IF NECESSARY,BY BEING JOINED AS A PARTY, SUBJECT FOR THIS CLAUSE (C) TO THE CONTROLLING PARTY AGREEING TO INDEMNIFYSUCH NON-CONTROLLING PARTY FOR ITS INVOLVEMENT AS A NAMED PARTY IN SUCH ACTION AND PAYING THOSE PATENTCOSTS INCURRED BY SUCH PARTY IN CONNECTION WITH SUCH JOINDER. THE PARTY CONTROLLING ANY SUCH ACTIONWILL KEEP THE OTHER PARTY UPDATED WITH RESPECT TO ANY SUCH ACTION, INCLUDING PROVIDING COPIES OF ALLdocuments received or filed in connection with any such action. (iii)EACH PARTY WILL HAVE THE RIGHT TO PARTICIPATE OR OTHERWISE BE INVOLVED IN ANY SUCH ACTION CONTROLLED BYTHE OTHER PARTY, IN EACH CASE AT THE PARTICIPATING (I.E., NON-CONTROLLING) PARTY’S SOLE COST ANDEXPENSE. IF A PARTY ELECTS TO SO PARTICIPATE OR BE INVOLVED, THE CONTROLLING PARTY WILL PROVIDE THEPARTICIPATING PARTY AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH THE CONTROLLING PARTY AND ITSCOUNSEL REGARDING THE PROSECUTION OF SUCH ACTION (INCLUDING REVIEWING THE CONTENTS OF ANYCORRESPONDENCE, LEGAL PAPERS OR OTHER DOCUMENTS RELATED THERETO), AND THE CONTROLLING PARTY WILL TAKEinto account reasonable requests of the participating Party regarding such enforcement or defense.(g)Settlement. NEITHER PARTY WILL SETTLE OR CONSENT TO AN ADVERSE JUDGMENT IN ANY ACTION DESCRIBED IN THISSECTION 7.2 AND CONTROLLED BY SUCH PARTY, INCLUDING ANY JUDGMENT WHICH AFFECTS THE SCOPE, VALIDITY OR ENFORCEMENT OF ANYARCTURUS TECHNOLOGY PATENTS INVOLVED THEREWITH, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY (SUCH CONSENT NOT TO BEunreasonably withheld, delayed or conditioned).(h)Damages. UNLESS OTHERWISE AGREED BY THE PARTIES, ALL MONIES RECOVERED UPON THE FINAL JUDGMENT ORSETTLEMENT OF ANY ACTION WHICH MAY BE CONTROLLED BY EITHER CUREVAC OR ARCTURUS AND DESCRIBED IN SECTION 7.2(a) or 7.2(C) INEACH CASE WILL BE USED FIRST TO REIMBURSE THE CONTROLLING PARTY, AND THEREAFTER THE NON-CONTROLLING PARTY, FOR EACH OF THEIR OUT-of-pocket costs and expenses relating to the action, with the balance of any such recovery to be divided as follows: (i)TO THE EXTENT THE ACTION INVOLVES A THIRD PARTY’S RESEARCH, DEVELOPMENT, MANUFACTURE ORCOMMERCIALIZATION OF ANY PRODUCT OTHER THAN THE LICENSED PRODUCT (OR A LMD PRODUCT DIRECTED TO THEsame Target as the Licensed Product), Arcturus shall retain all such recovery; and (ii)TO THE EXTENT THE ACTION INVOLVES A THIRD PARTY’S RESEARCH, DEVELOPMENT, MANUFACTURE ORCOMMERCIALIZATION OF THE LICENSED PRODUCT (OR A LMD PRODUCT DIRECTED TO THE SAME TARGET AS THELicensed Product), CureVac will retain such recovery, less the amount of royalties payable to Arcturusby treating such recovery as "Net Sales" hereunder. (i)PATENT MARKING. CUREVAC SHALL MARK ALL LICENSED PRODUCT IF AND TO THE EXTENT REQUIRED BY THEapplicable patent marking laws, and shall require all of its Affiliates and sublicensees to do the same.8.Confidentiality.8.1CONFIDENTIAL INFORMATION. EACH PARTY ("DISCLOSING PARTY") MAY DISCLOSE TO THE OTHER PARTY ("RECEIVING PARTY"),AND RECEIVING PARTY MAY ACQUIRE DURING THE COURSE AND CONDUCT OF ACTIVITIES UNDER THIS LICENSE AGREEMENT, CERTAIN PROPRIETARY ORconfidential information of Disclosing Party in connection with this License Agreement. 8.2Restrictions. DURING THE TERM AND FOR […***…] YEARS THEREAFTER, RECEIVING PARTY WILL KEEP ALL DISCLOSINGPARTY’S CONFIDENTIAL INFORMATION IN CONFIDENCE WITH THE SAME DEGREE OF CARE WITH WHICH RECEIVING PARTY HOLDS ITS OWN CONFIDENTIALINFORMATION, BUT IN NO EVENT LESS THAN REASONABLE CARE. RECEIVING PARTY WILL NOT USE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION EXCEPTFOR IN CONNECTION WITH THE PERFORMANCE OF ITS OBLIGATIONS AND EXERCISE OF ITS RIGHTS UNDER THIS LICENSE AGREEMENT. RECEIVING PARTY HASTHE RIGHT TO DISCLOSE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION WITHOUT DISCLOSING PARTY’S PRIOR WRITTEN CONSENT TO RECEIVING PARTY’SAffiliates, and each of their employees, subcontractors, consultants and agents who have a need to know such Confidential InformationIN ORDER TO PERFORM THEIR OBLIGATIONS AND EXERCISE THEIR RIGHTS UNDER THIS LICENSE AGREEMENT AND WHO ARE UNDER WRITTEN OBLIGATION TOCOMPLY WITH THE RESTRICTIONS ON USE AND DISCLOSURE THAT ARE NO LESS RESTRICTIVE THAN THOSE SET FORTH IN THIS SECTION 8.2. RECEIVING PARTYASSUMES RESPONSIBILITY FOR SUCH ENTITIES AND PERSONS MAINTAINING DISCLOSING PARTY’S CONFIDENTIAL INFORMATION IN CONFIDENCE AND USINGsame only for the purposes described herein.8.3Exceptions. Receiving Party’s obligation of nondisclosure and the limitations upon the right to use the DisclosingParty’s Confidential Information will not apply to a specific portion of the Disclosing Party’s Confidential Information to the extent thatRECEIVING PARTY CAN DEMONSTRATE THAT SUCH PORTION: (I) WAS KNOWN TO RECEIVING PARTY OR ANY OF ITS AFFILIATES PRIOR TO THE TIME OFDISCLOSURE BY THE DISCLOSING PARTY WITHOUT OBLIGATION OF CONFIDENTIALITY; (II) IS OR BECOMES PUBLIC KNOWLEDGE THROUGH NO ACTION OROMISSION OF RECEIVING PARTY OR ANY OF ITS AFFILIATES; (III) IS OBTAINED ON A NON-CONFIDENTIAL BASIS BY RECEIVING PARTY OR ANY OF ITSAFFILIATES FROM A THIRD PARTY WHO TO RECEIVING PARTY’S KNOWLEDGE IS LAWFULLY IN POSSESSION THEREOF (OR IF POSSESSION IS OBVIOUSLYUNLAWFUL) AND UNDER NO OBLIGATION OF CONFIDENTIALITY TO DISCLOSING PARTY; OR (IV) HAS BEEN INDEPENDENTLY DEVELOPED BY OR ON BEHALF OFRECEIVING PARTY OR ANY OF ITS AFFILIATES WITHOUT THE AID, APPLICATION OR USE OF DISCLOSING PARTY’S CONFIDENTIAL INFORMATION ASdocumented by the internal records of the Receiving Party.8.4PERMITTED DISCLOSURES. NOTWITHSTANDING THE OBLIGATIONS SET FORTH IN SECTION 8.2, RECEIVING PARTY MAY DISCLOSEDisclosing Party’s Confidential Information (including this ***Confidential Treatment Requested LICENSE AGREEMENT AND THE TERMS HEREIN) TO THE EXTENT (AND ONLY TO THE EXTENT) SUCH DISCLOSURE IS REASONABLY NECESSARY IN THE FOLLOWINGinstances:(a)IN ORDER TO COMPLY WITH APPLICABLE LAW (INCLUDING ANY SECURITIES LAW OR REGULATION OR THE RULES OF Asecurities exchange) or with a legal or administrative proceeding;(b)IN CONNECTION WITH PROSECUTING OR DEFENDING LITIGATION, AND FILING, PROSECUTING AND ENFORCING ARCTURUSTechnology Patents in connection with Receiving Party’s rights and obligations pursuant to this License Agreement;(c)TO ATTORNEYS, ACCOUNTANTS, AUDITORS, ACQUIRERS, LICENSEES, PARTNERS OR PERMITTED ASSIGNEES; FINANCIALADVISORS, INVESTORS AND LENDERS, INCLUDING POTENTIAL ACQUIRERS, LICENSEES, PARTNERS, ASSIGNEES, FINANCIAL ADVISORS, INVESTORSand lenders; and(d)IN THE CASE OF CUREVAC, TO (I) SUBCONTRACTORS; OR (II) POTENTIAL LICENSEES OR COLLABORATION PARTNERS, BUTONLY SUCH INFORMATION THAT IS REASONABLY NECESSARY OR USEFUL FOR THE SUBCONTRACTOR TO PERFORM THE SUBCONTRACTED WORK OR FORTHE POTENTIAL LICENSEE OR PARTNER TO EVALUATE THE APPLICABLE LICENSED PRODUCT, AND LMD OR LICENSED PRODUCTmanufacturing processes;PROVIDED THAT (1) WHERE REASONABLY POSSIBLE, RECEIVING PARTY WILL NOTIFY DISCLOSING PARTY OF RECEIVING PARTY’S INTENT TOMAKE ANY DISCLOSURE PURSUANT TO SUBSECTIONS (A) AND (B) SUFFICIENTLY PRIOR TO MAKING SUCH DISCLOSURE SO AS TO ALLOWDISCLOSING PARTY REASONABLY ADEQUATE TIME TO TAKE WHATEVER ACTION IT MAY DEEM APPROPRIATE TO PROTECT THE CONFIDENTIALITY OFTHE INFORMATION TO BE DISCLOSED, AND (2) WITH RESPECT TO SUBSECTIONS (C), EACH OF THOSE PERSONS OR ENTITIES ARE REQUIRED TOCOMPLY WITH THE RESTRICTIONS ON USE AND DISCLOSURE IN SECTION 8.2 (OTHER THAN FINANCIAL ADVISORS, INVESTORS AND LENDERS, WHICHmust be bound prior to disclosure by commercially reasonable obligations of confidentiality).8.5RETURN OF CONFIDENTIAL INFORMATION. UPON EXPIRY OR EARLIER TERMINATION OF THIS LICENSE AGREEMENT, UPON WRITTENREQUEST OF A PARTY (SUCH REQUEST, IF MADE, TO BE MADE WITHIN THREE (3) MONTHS OF SUCH EXPIRY OR TERMINATION) THE OTHER PARTY WILL DESTROYOR RETURN (AS SHALL BE SPECIFIED IN SUCH REQUEST) TO THE REQUESTING PARTY ALL COPIES OF THE CONFIDENTIAL INFORMATION OF THE REQUESTING PARTY;PROVIDED THAT THE PARTY MAY RETAIN: (I) ONE COPY OF SUCH CONFIDENTIAL INFORMATION FOR RECORD-KEEPING PURPOSES, FOR THE SOLE PURPOSE OFensuring compliance WITH THIS LICENSE AGREEMENT; (II) ANY COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS REQUIRED TO BE RETAINED UNDERapplicable Law; (iii) any COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS NECESSARY OR USEFUL FOR SUCH PARTY TO EXERCISE A RIGHT OR FULFILL ANOBLIGATION UNDER ANOTHER LICENSE AGREEMENT, IF ANY, OR AS SET FORTH IN THIS LICENSE AGREEMENT; AND (IV) ANY COPIES OF ANY COMPUTERRECORDS AND FILES CONTAINING CONFIDENTIAL INFORMATION THAT HAVE BEEN CREATED BY SUCH PARTY’S ROUTINE ARCHIVING/BACKUP PROCEDURES.UPON REQUEST OF THE REQUESTING PARTY, THE RECEIVING PARTY SHALL CONFIRM IN WRITING TO THE REQUESTING PARTY THE DESTRUCTION OR RETURN OF ALLcopies of the Confidential Information of the requesting Party.8.6Publications. NOTWITHSTANDING ANYTHING IN THIS LICENSE AGREEMENT TO THE CONTRARY, CUREVAC IS PERMITTED TOPUBLISH THE RESULTS OF ITS DEVELOPMENT UNDER THIS LICENSE AGREEMENT, provided, however, THAT IT WILL NOT DISCLOSE ARCTURUS CONFIDENTIALInformation in any publication by CureVac of the results of any Licensed Product development by CureVac without Arcturus’ prior written consent, which will not be unreasonably withheld, conditioned or delayed. 8.7TERMS OF THIS LICENSE AGREEMENT; PRESS RELEASE. THE PARTIES AGREE THAT THE EXISTENCE AND TERMS OF THE PARTIES’RELATIONSHIP AND THIS LICENSE AGREEMENT WILL BE TREATED AS CONFIDENTIAL INFORMATION OF BOTH PARTIES, AND THUS MAY BE DISCLOSED ONLY ASPERMITTED BY SECTION 8.4. EXCEPT AS MUTUALLY AGREED OR OTHERWISE REQUIRED BY LAW OR SECURITIES EXCHANGE REGULATION, EACH PARTYAGREES NOT TO ISSUE ANY PRESS RELEASE OR PUBLIC STATEMENT DISCLOSING INFORMATION RELATING TO THE EXISTENCE OF THIS LICENSE AGREEMENT ORthe transactions contemplated hereby or the terms hereof without the prior written consent of the other Party.9.Warranties; Limitations of Liability; Indemnification.9.1REPRESENTATIONS AND WARRANTIES. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER AS OF THE LICENSE AGREEMENTEffective Date that:(a)IT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF THEjurisdiction in which it is incorporated,(b)IT HAS THE LEGAL RIGHT AND POWER TO ENTER INTO THIS LICENSE AGREEMENT, TO EXTEND THE RIGHTS AND LICENSESgranted or to be granted to the other in this License Agreement, and to fully perform its obligations hereunder,(c)IT HAS TAKEN ALL NECESSARY CORPORATE ACTION ON ITS PART REQUIRED TO AUTHORIZE THE EXECUTION AND DELIVERY OFthis License Agreement and the performance of its obligations hereunder,(d)THIS LICENSE AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED ON BEHALF OF SUCH PARTY, AND CONSTITUTES Alegal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms and(e)EXCEPT WITH RESPECT TO ANY PRE-EXISTING PROSECUTION, ENFORCEMENT AND DEFENSE RESTRICTIONS, THEEXECUTION, DELIVERY AND PERFORMANCE BY SUCH PARTY OF THIS LICENSE AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONSCONTEMPLATED HEREBY WILL NOT RESULT IN ANY VIOLATION OF, CONFLICT WITH, RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT UNDER ANYUNDERSTANDING, CONTRACT OR AGREEMENT TO WHICH SUCH PARTY IS A PARTY OR BY WHICH IT IS BOUND, INCLUDING, IN THE CASE OFARCTURUS, EACH OF THE AGREEMENTS WHICH ARCTURUS HAS IDENTIFIED TO CUREVAC PRIOR TO THE LICENSE AGREEMENT EFFECTIVE DATE,in each case as would reasonably be expected to have a material adverse effect on the rights of the other Party hereunder.9.2ADDITIONAL REPRESENTATIONS OF ARCTURUS. ARCTURUS HEREBY REPRESENTS AND WARRANTS TO CUREVAC AS OF THE LICENSEAgreement Effective Date as follows:(a)Impairment. EXCEPT WITH RESPECT TO ANY PRE-EXISTING PROSECUTION, ENFORCEMENT AND DEFENSE RESTRICTIONS,NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS ENTERED INTO ANY AGREEMENT OR OTHERWISE LICENSED, GRANTED, ASSIGNED, TRANSFERRED,CONVEYED OR OTHERWISE ENCUMBERED OR DISPOSED OF ANY RIGHT, TITLE OR INTEREST IN OR TO ANY OF ITS ASSETS, INCLUDING ANYINTELLECTUAL PROPERTY RIGHTS INCLUDING KNOW-HOW, THAT WOULD IN ANY WAY CONFLICT WITH OR IMPAIR THE SCOPE OF ANY RIGHTS ORlicenses granted to CureVac with respect to the Licensed Product hereunder. (b)Patents. APPENDIX 1.4 SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL ARCTURUS TECHNOLOGYPATENTS. ARCTURUS CONTROLS THE ARCTURUS TECHNOLOGY, AND IS ENTITLED TO GRANT THE LICENSES SPECIFIED HEREIN. TO ARCTURUS’KNOWLEDGE, THE ARCTURUS TECHNOLOGY PATENTS HAVE BEEN PROCURED OR ARE BEING PROCURED FROM THE RESPECTIVE PATENT OFFICES INACCORDANCE WITH APPLICABLE LAW. NONE OF THE ARCTURUS TECHNOLOGY PATENTS IS OR HAS BEEN INVOLVED IN ANY OPPOSITION,CANCELLATION, INTERFERENCE, REISSUE OR REEXAMINATION PROCEEDING, AND TO ARCTURUS’ KNOWLEDGE AS OF THE LICENSE AGREEMENTEFFECTIVE DATE, NO ARCTURUS TECHNOLOGY IS THE SUBJECT OF ANY JUDICIAL, ADMINISTRATIVE OR ARBITRAL ORDER, AWARD, DECREE,INJUNCTION, LAWSUIT, PROCEEDING OR STIPULATION. AS OF THE LICENSE AGREEMENT EFFECTIVE DATE, NEITHER ARCTURUS NOR ANY OF ITSAFFILIATES HAS RECEIVED ANY NOTICE ALLEGING THAT THE ARCTURUS TECHNOLOGY PATENTS ARE INVALID OR UNENFORCEABLE, OR CHALLENGINGArcturus’ ownership of or right to use any such rights.(c)Entire LMD Technology. THE ARCTURUS LMD TECHNOLOGY LICENSED TO CUREVAC UNDER THIS LICENSEAGREEMENT COMPRISES ALL LMD TECHNOLOGY CONTROLLED BY ARCTURUS WHICH IS NECESSARY OR USEFUL TO DEVELOP, MANUFACTUREand commercialize the Licensed Products for purposes of this License Agreement.(d)Encumbrances. AS OF THE LICENSE AGREEMENT EFFECTIVE DATE, ARCTURUS HAS THE RIGHT TO GRANT THE LICENSEHEREIN TO CUREVAC AND NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS GRANTED ANY LIENS OR SECURITY INTERESTS ON THE ARCTURUSTechnology to any Third Party that is inconsistent with the license granted to CureVac under Section 2.1. (e)Litigation. THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF ARCTURUS,CURRENTLY THREATENED AGAINST OR AFFECTING ARCTURUS THAT QUESTIONS THE VALIDITY OF THIS LICENSE AGREEMENT OR THE RIGHT OFARCTURUS TO ENTER INTO THIS LICENSE AGREEMENT OR CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY OR THAT RELATES TO THEArcturus Technology.(f)Infringement. NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS RECEIVED ANY WRITTEN NOTICE OF ANY CLAIM, NORDOES ARCTURUS OR ITS AFFILIATES HAVE ANY KNOWLEDGE OF ANY CLAIM, THAT ANY PATENT, KNOW-HOW OR OTHER INTELLECTUAL PROPERTYOWNED OR CONTROLLED BY A THIRD PARTY WOULD BE INFRINGED OR MISAPPROPRIATED BY THE PRACTICE OF ANY ARCTURUS LMDTECHNOLOGY IN CONNECTION WITH THE PRODUCTION, USE, RESEARCH, DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF ANYLicensed Product.(g)Third Party Infringement. TO ARCTURUS’ KNOWLEDGE, NO THIRD PARTY IS INFRINGING OR HAS INFRINGED ANYPATENT WITHIN THE ARCTURUS LMD TECHNOLOGY OR IS MISAPPROPRIATING OR HAS MISAPPROPRIATED ANY KNOW-HOW WITHIN THEArcturus LMD Technology, in each case relating to the Target.9.3Disclaimers. WITHOUT LIMITING THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES EXPRESSLY SET FORTH HEREIN, EACHPARTY SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT ANY LICENSED PRODUCT WILL BE SUCCESSFUL, IN WHOLE OR IN PART. EXCEPT AS OTHERWISEEXPRESSLY PROVIDED IN THIS LICENSE AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTY OF ANY KIND UNDER THISLicense Agreement, neither express nor implied.9.4NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING IN THIS LICENSE AGREEMENT OR OTHERWISE, NEITHER PARTYWILL BE LIABLE TO THE OTHER OR ANY THIRD PARTY WITH RESPECT TO ANY SUBJECT MATTER OF THIS LICENSE AGREEMENT FOR ANY INDIRECT ORconsequential DAMAGES, PROVIDED THAT THIS SECTION 9.4 WILL NOT APPLY TO BREACHES OF ARTICLE 8 OR THE PARTIES’ INDEMNIFICATION RIGHTS OR OBLIGATIONSunder Section 9.6, or in the event of willful misconduct.9.5PERFORMANCE BY OTHERS. THE PARTIES RECOGNIZE THAT EACH PARTY MAY PERFORM SOME OR ALL OF ITS OBLIGATIONS UNDERTHIS LICENSE AGREEMENT THROUGH AFFILIATES, SUBCONTRACTORS OR - IN THE EVENT OF CUREVAC - SUBLICENSEES, provided, however, THAT EACHPARTY WILL REMAIN FULLY RESPONSIBLE AND LIABLE FOR THE PERFORMANCE BY ITS AFFILIATES, SUBCONTRACTORS AND SUBLICENSEES, AND WILL CAUSE ITSAffiliates, subcontractors and Sublicensees to comply with the provisions of this License Agreement in connection therewith.9.6Indemnification.(a)Indemnification by CureVac. CUREVAC WILL INDEMNIFY ARCTURUS, ITS AFFILIATES AND THEIR RESPECTIVEDIRECTORS, OFFICERS, EMPLOYEES, THIRD PARTY LICENSORS AND AGENTS, AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS(COLLECTIVELY, "ARCTURUS INDEMNITEES"), AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM AND AGAINST ANY AND ALL LOSSES,DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) (COLLECTIVELY, "Losses") INCONNECTION WITH ANY AND ALL SUITS, INVESTIGATIONS, CLAIMS OR DEMANDS OF THIRD PARTIES (COLLECTIVELY, "THIRD PARTY CLAIMS")AGAINST THE ARCTURUS INDEMNITEES TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF: (I) THE BREACH BY CUREVAC OF ANYREPRESENTATION OR WARRANTY OF THIS LICENSE AGREEMENT; (II) ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF ANYCUREVAC INDEMNITEE; OR (III) THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION BY OR ON BEHALF OF CUREVAC OR ANY OF ITSAFFILIATES OR SUBLICENSEES OF LICENSED PRODUCT OTHER THAN IF RELATED TO AN LMD COMPONENT THEREOF SPECIFICALLY PROVIDED BYARCTURUS, EXCEPT IN EACH CASE (I)-(III) TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFULmisconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this License Agreement.(b)Indemnification by Arcturus. ARCTURUS WILL INDEMNIFY CUREVAC, ITS AFFILIATES AND THEIR RESPECTIVEDIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, "CureVacIndemnitees"), AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM AND AGAINST ANY AND ALL LOSSES IN CONNECTION WITH ANY ANDALL THIRD PARTY CLAIMS AGAINST CUREVAC INDEMNITEES TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF: (I) THE BREACH BYARCTURUS OF ANY REPRESENTATION OR WARRANTY OF THIS LICENSE AGREEMENT; OR (II) ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ONTHE PART OF ANY ARCTURUS INDEMNITEE, EXCEPT IN EACH CASE (I) AND (II) TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF THEGROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF A CUREVAC INDEMNITEE OR CUREVAC’S BREACH OF THIS LICENSEAgreement.(c)Notice of Claim. ALL INDEMNIFICATION CLAIMS PROVIDED FOR IN SECTIONS 9.6(A) AND 9.6(B) WILL BE MADESOLELY BY SUCH PARTY TO THIS LICENSE AGREEMENT (THE "INDEMNIFIED PARTY"). THE INDEMNIFIED PARTY WILL PROMPTLY NOTIFY THEINDEMNIFYING PARTY (AN "INDEMNIFICATION CLAIM NOTICE") OF ANY LOSSES OR THE DISCOVERY OF ANY FACT UPON WHICH THEINDEMNIFIED PARTY INTENDS TO BASE A REQUEST FOR INDEMNIFICATION UNDER SECTION 9.6(A) AND 9.6(B), BUT IN NO EVENT WILL THEINDEMNIFYING PARTY BE LIABLE FOR ANY LOSSES THAT RESULT FROM ANY DELAY IN PROVIDING SUCH NOTICE. EACH INDEMNIFICATION CLAIMNOTICE MUST CONTAIN A DESCRIPTION OF THE CLAIM AND THE NATURE AND ESTIMATED AMOUNT OF SUCH LOSS (TO THE EXTENT THAT THENATURE AND AMOUNT OF SUCH LOSS IS KNOWN AT SUCH TIME). THE INDEMNIFIED PARTY WILL FURNISH PROMPTLY TO THE INDEMNIFYINGParty copies of all papers and official documents received in respect of any Losses and Third Party Claims.(d)Defense, Settlement, Cooperation and Expenses.(i)Control of Defense. AT ITS OPTION, THE INDEMNIFYING PARTY MAY ASSUME THEdefense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) daysafter the indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defenseOF A THIRD PARTY CLAIM BY THE INDEMNIFYING PARTY WILL NOT BE CONSTRUED AS AN ACKNOWLEDGMENT THAT THEINDEMNIFYING PARTY IS LIABLE TO INDEMNIFY THE INDEMNIFIED PARTY IN RESPECT OF THE THIRD PARTY CLAIM, NORWILL IT CONSTITUTE A WAIVER BY THE INDEMNIFYING PARTY OF ANY DEFENSES IT MAY ASSERT AGAINST THE INDEMNIFIEDPARTY’S CLAIM FOR INDEMNIFICATION. UPON ASSUMING THE DEFENSE OF A THIRD PARTY CLAIM, THE INDEMNIFYINGPARTY MAY APPOINT AS LEAD COUNSEL IN THE DEFENSE OF THE THIRD PARTY CLAIM ANY LEGAL COUNSEL SELECTED BYTHE INDEMNIFYING PARTY (THE INDEMNIFYING PARTY WILL CONSULT WITH THE INDEMNIFIED PARTY WITH RESPECT TOSUCH COUNSEL AND A POSSIBLE CONFLICT OF INTEREST OF SUCH COUNSEL RETAINED BY THE INDEMNIFYING PARTY). INTHE EVENT THE INDEMNIFYING PARTY ASSUMES THE DEFENSE OF A THIRD PARTY CLAIM, THE INDEMNIFIED PARTY WILLAS SOON AS POSSIBLE DELIVER TO THE INDEMNIFYING PARTY ALL ORIGINAL NOTICES AND DOCUMENTS (INCLUDING COURTpapers) received by the Indemnified Party in connection with the Third Party Claim. In the event that it isULTIMATELY DETERMINED THAT THE INDEMNIFYING PARTY IS NOT OBLIGATED TO INDEMNIFY, DEFEND OR HOLD HARMLESSTHE INDEMNIFIED PARTY FROM AND AGAINST THE THIRD PARTY CLAIM, THE INDEMNIFIED PARTY WILL REIMBURSE THEINDEMNIFYING PARTY FOR ANY AND ALL COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS OFSUIT) AND ANY THIRD PARTY CLAIMS INCURRED BY THE INDEMNIFYING PARTY IN ITS DEFENSE OF THE THIRD PARTYClaim.(ii)Right to Participate in Defense. WITHOUT LIMITING SECTION 9.6(D)(I), ANYINDEMNIFIED PARTY WILL BE ENTITLED TO PARTICIPATE IN, BUT NOT CONTROL, THE DEFENSE OF SUCH THIRD PARTY CLAIMAND TO ENGAGE COUNSEL OF ITS CHOICE FOR SUCH PURPOSE; PROVIDED, HOWEVER, THAT SUCH ENGAGEMENT WILL BE ATTHE INDEMNIFIED PARTY’S OWN COST AND EXPENSE UNLESS (I) THE INDEMNIFYING PARTY HAS FAILED TO PROMPTLYASSUME THE DEFENSE AND ENGAGE COUNSEL IN ACCORDANCE WITH SECTION 9.6(D)(I) (IN WHICH CASE THEINDEMNIFIED PARTY WILL CONTROL THE DEFENSE) OR (II) THE INTERESTS OF THE INDEMNIFIED PARTY AND THEINDEMNIFYING PARTY WITH RESPECT TO SUCH THIRD PARTY CLAIM ARE SUFFICIENTLY ADVERSE TO PROHIBIT THEREPRESENTATION BY THE SAME COUNSEL OF BOTH PARTIES UNDER APPLICABLE LAW, ETHICAL RULES OR EQUITABLEPRINCIPLES, IN WHICH CASE THE INDEMNIFYING PARTY WILL ASSUME ONE HUNDRED PERCENT (100%) OF ANY SUCHcosts and expenses of counsel for the Indemnified Party.(iii)Settlement. WITH RESPECT TO ANY THIRD PARTY CLAIMS THAT RELATE SOLELY TOTHE PAYMENT OF MONEY DAMAGES IN CONNECTION WITH A THIRD PARTY CLAIM AND THAT WILL NOT RESULT IN THEIndemnified Party’s becoming subject to injunctive or other relief or 32 otherwise adversely affecting the business of the Indemnified Party in any manner, and as to which theindemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnified Partyhereunder, the indemnifying Party will have the sole right to agree to the entry of any judgment, enterinto any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its solediscretion, will deem appropriate. With respect to all other Losses in connection with Third Party Claims,where the indemnifying Party has assumed the defense of the Third Party Claim in accordance withSection 9.6(d)(i), the indemnifying Party will have authority to agree to the entry of any judgment, enterinto any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of theIndemnified Party (such consent not to be unreasonably withheld, delayed or conditioned). Theindemnifying Party will not be liable for any settlement or other disposition of a Loss by an IndemnifiedParty that is reached without the prior written consent of the indemnifying Party. Regardless of whetherthe indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party willadmit any liability with respect to or settle, compromise or discharge, any Third Party Claim without theprior written consent of the indemnifying Party, such consent not to be unreasonably withheld, delayed orconditioned.(iv)Cooperation. REGARDLESS OF WHETHER THE INDEMNIFYING PARTY CHOOSES TODEFEND OR PROSECUTE ANY THIRD PARTY CLAIM, THE INDEMNIFIED PARTY WILL, AND WILL USE DILIGENT EFFORTS TOCAUSE EACH OTHER INDEMNIFIED PARTY TO, COOPERATE IN THE DEFENSE OR PROSECUTION THEREOF AND WILL FURNISHSUCH RECORDS, INFORMATION AND TESTIMONY, PROVIDE SUCH WITNESSES AND ATTEND SUCH CONFERENCES, DISCOVERYPROCEEDINGS, HEARINGS, TRIALS AND APPEALS AS MAY BE REASONABLY REQUESTED IN CONNECTION THEREWITH, AT THEINDEMNIFYING PARTY’S EXPENSE. SUCH COOPERATION WILL INCLUDE ACCESS DURING NORMAL BUSINESS HOURSAFFORDED TO THE INDEMNIFYING PARTY TO, AND REASONABLE RETENTION BY THE INDEMNIFIED PARTY OF, RECORDS ANDINFORMATION THAT ARE REASONABLY RELEVANT TO SUCH THIRD PARTY CLAIM, AND MAKING INDEMNIFIED PARTIES ANDOTHER EMPLOYEES AND AGENTS AVAILABLE ON A MUTUALLY CONVENIENT BASIS TO PROVIDE ADDITIONAL INFORMATIONAND EXPLANATION OF ANY MATERIAL PROVIDED HEREUNDER, AND THE INDEMNIFYING PARTY WILL REIMBURSE THEIndemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.(v)Costs and Expenses. Except as provided above in this Section 9.6(d), theCOSTS AND EXPENSES, INCLUDING ATTORNEYS’ FEES AND EXPENSES, INCURRED BY THE INDEMNIFIED PARTY INCONNECTION WITH ANY CLAIM WILL BE REIMBURSED ON A CALENDAR QUARTER BASIS BY THE INDEMNIFYING PARTY,WITHOUT PREJUDICE TO THE INDEMNIFYING PARTY’S RIGHT TO CONTEST THE INDEMNIFIED PARTY’S RIGHT TOINDEMNIFICATION AND SUBJECT TO REFUND IN THE EVENT THE INDEMNIFYING PARTY IS ULTIMATELY HELD NOT TO BEobligated to indemnify the Indemnified Party.9.7Insurance. EACH PARTY WILL MAINTAIN AT ITS SOLE COST AND EXPENSE, AN ADEQUATE LIABILITY INSURANCE OR SELF-INSURANCEprogram (including product liability insurance) to protect33 AGAINST POTENTIAL LIABILITIES AND RISK ARISING OUT OF ACTIVITIES TO BE PERFORMED UNDER THIS LICENSE AGREEMENT, AND ANY AGREEMENT RELATEDHERETO AND UPON SUCH TERMS (INCLUDING COVERAGES, DEDUCTIBLE LIMITS AND SELF-INSURED RETENTIONS) AS ARE CUSTOMARY IN THE RESPECTIVEINDUSTRY OF SUCH PARTY FOR THE ACTIVITIES TO BE CONDUCTED BY SUCH PARTY UNDER THIS LICENSE AGREEMENT. SUBJECT TO THE PRECEDINGSENTENCE, SUCH LIABILITY INSURANCE OR SELF-INSURANCE PROGRAM WILL INSURE AGAINST ALL TYPES OF LIABILITY, INCLUDING PERSONAL INJURY, PHYSICALINJURY OR PROPERTY DAMAGE ARISING OUT OF THE MANUFACTURE, SALE, USE, DISTRIBUTION OR MARKETING OF LICENSED PRODUCT. THE COVERAGE LIMITSset forth herein will not create any limitation on a Party’s liability to the other under this License Agreement.10.Term and Termination.10.1Term. (a)THIS LICENSE AGREEMENT WILL COMMENCE AS OF THE LICENSE AGREEMENT EFFECTIVE DATE AND, UNLESSSOONER TERMINATED IN ACCORDANCE WITH THE TERMS HEREOF OR BY MUTUAL WRITTEN CONSENT, WILL CONTINUE ON A LICENSED PRODUCT-BY-LICENSEDPRODUCT AND A COUNTRY-BY-COUNTRY BASIS, UNTIL THERE ARE NO MORE PAYMENTS OWED TO ARCTURUS IN SUCH COUNTRY (THE LONGEST SUCH PERIOD OFTIME HEREUNDER, THE "Term"). UPON THERE BEING NO MORE SUCH PAYMENTS HEREUNDER IN SUCH COUNTRY, THE LICENSE CONTAINED IN SECTION2.1 WILL BECOME IRREVOCABLE, PERPETUAL AND FULLY PAID UP AND WILL REMAIN IN EFFECT WITH RESPECT TO SUCH LICENSED PRODUCT IN SUCHcountry.(b)IF THE TARGET TO WHICH THIS LICENSE AGREEMENT RELATES IS CHOSEN BY THE PARTIES FOR CO-DEVELOPMENTUNDER THE CO-DEVELOPMENT AGREEMENT, THIS LICENSE AGREEMENT WILL AUTOMATICALLY TERMINATE UPON THE WRITTEN AGREEMENT OF THE PARTIESTO INCLUDE SUCH PROGRAMS UNDER THE CO-DEVELOPMENT AGREEMENT, IN ACCORDANCE WITH SECTION 4.2(A) OF THE CO-DEVELOPMENTAgreement.(c)THE PARTIES AGREE THAT THIS AGREEMENT AND THE CO-DEVELOPMENT AGREEMENT RELATE TO DIFFERENT PROJECTSAND, THEREFORE, THE VALIDITY, TERM AND TERMINATION OF THIS AGREEMENT SHALL BE INDEPENDENT FROM THE VALIDITY, TERM AND TERMINATION OF THECo-Development Agreement.10.2Termination by Arcturus.(a)Breach. ARCTURUS WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL UPON DELIVERY OF WRITTENNOTICE TO CUREVAC IN THE EVENT OF ANY MATERIAL BREACH BY CUREVAC OF ANY TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT,PROVIDED THAT SUCH BREACH HAS NOT BEEN CURED […***…] AFTER WRITTEN NOTICE THEREOF IS GIVEN BY ARCTURUS TO CUREVACspecifying the nature of the alleged breach.(b)Disputed Breach. IF CUREVAC DISPUTES IN GOOD FAITH THE EXISTENCE OR MATERIALITY OF A BREACH SPECIFIED IN ANOTICE PROVIDED IN ACCORDANCE WITH SECTION 10.2(A), AND CUREVAC PROVIDES ARCTURUS NOTICE OF SUCH DISPUTE WITHIN SUCH […***…]PERIOD, THEN ARCTURUS SHALL NOT HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT UNDER SECTION 10.2(A) UNLESS ANDUNTIL IT IS FINALLY DETERMINED, IN ACCORDANCE WITH SECTION 11.1, THAT CUREVAC HAS MATERIALLY BREACHED THIS LICENSE AGREEMENTAND THAT CUREVAC FAILS TO CURE SUCH BREACH WITHIN […***…] FOLLOWING SUCH DECISION. IT IS UNDERSTOOD AND AGREED THATduring the pendency of such 34***Confidential Treatment Requested dispute, all of the terms and conditions of this License Agreement shall remain in effect and the Parties shall continue toperform all of their respective obligations hereunder. During the pendency of any such dispute, CureVac shall pay toArcturus all Milestone Payments and royalty payments set forth herein. (c)Patent Challenge. EXCEPT TO THE EXTENT THE FOLLOWING IS UNENFORCEABLE UNDER THE LAWS OF A PARTICULARJURISDICTION, ARCTURUS MAY TERMINATE THIS LICENSE AGREEMENT ON A PATENT-BY-PATENT BASIS UPON DELIVERY OF […***…] PRIORwritten notice to CureVac(i)IF CUREVAC OR ITS AFFILIATES, INDIVIDUALLY OR IN ASSOCIATION WITH ANY OTHER PERSON ORENTITY, COMMENCES A LEGAL ACTION CHALLENGING THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY ARCTURUS TECHNOLOGYPATENTS ANYWHERE IN THE WORLD AND DOES NOT WITHDRAW OR SETTLE SUCH CHALLENGE WITHIN THE […***…] CURE PERIOD;or(ii)IF A SUBLICENSEE OF CUREVAC, INDIVIDUALLY OR IN ASSOCIATION WITH ANY OTHER PERSONOR ENTITY, COMMENCES A LEGAL ACTION CHALLENGING THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY ARCTURUS TECHNOLOGYPATENTS ANYWHERE IN THE WORLD AND CUREVAC DOES NOT TERMINATE THE CORRESPONDING SUBLICENSE AGREEMENT OR SUCHchallenge is not withdrawn or settled (by such sublicensee or CureVac) within the […***…] cure period. 10.3Termination by CureVac; Certain Remedy for Breach.(a)Breach. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL UPON DELIVERY OF WRITTENNOTICE TO ARCTURUS IN THE EVENT OF ANY MATERIAL BREACH BY ARCTURUS OF ANY TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT,PROVIDED THAT SUCH BREACH HAS NOT BEEN CURED WITHIN […***…] AFTER WRITTEN NOTICE THEREOF IS GIVEN BY CUREVAC TO ARCTURUSspecifying the nature of the alleged breach.(b)Discretionary Termination. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL AT ITSDISCRETION FOR ANY REASON BY DELIVERING WRITTEN NOTICE TO ARCTURUS, SUCH TERMINATION TO BE EFFECTIVE […***…] FOLLOWING THEdate of such notice.(c)Maintenance of License. IN THE EVENT OF A MATERIAL BREACH BY ARCTURUS OF SECTIONS 2.2(C) OR 3.2, IF SUCHBREACH HAS NOT BEEN CURED WITHIN […***…] AFTER WRITTEN NOTICE THEREOF, CUREVAC MAY NOTIFY ARCTURUS IN WRITING THAT THELICENSE AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT, PROVIDED THAT ANY REMAINING PAYMENTS TO ARCTURUS PURSUANT TOSections 4.1, 4.2 and 4.3 following such notification shall be reduced by […***…].10.4RIGHTS UPON BANKRUPTCY. ALL RIGHTS AND LICENSES GRANTED UNDER OR PURSUANT TO THIS LICENSE AGREEMENT BYARCTURUS OR ITS AFFILIATES ARE, AND WILL OTHERWISE BE DEEMED TO BE, FOR PURPOSES OF SECTION 365(N) OF THE U.S. BANKRUPTCY CODE,LICENSES OF RIGHT TO "INTELLECTUAL PROPERTY" AS DEFINED UNDER SECTION 101 OF THE U.S. BANKRUPTCY CODE. THE PARTIES AGREE THAT CUREVACAND ITS AFFILIATES AND SUBLICENSEES, AS LICENSEES OF SUCH RIGHTS UNDER THIS LICENSE AGREEMENT, WILL RETAIN AND MAY FULLY EXERCISE ALL OFtheir rights and elections under the U.S.35***Confidential Treatment Requested BANKRUPTCY CODE AND ANY FOREIGN COUNTERPARTS THERETO. WITHOUT LIMITING THE PARTIES’ RIGHTS UNDER SECTION 365(N) OF THE U.S.BANKRUPTCY CODE, IF A CASE UNDER U.S. BANKRUPTCY CODE IS COMMENCED BY OR AGAINST A PARTY, THE OTHER PARTY SHALL BE ENTITLED TO ACOPY OF ANY AND ALL SUCH INTELLECTUAL PROPERTY AND ALL EMBODIMENTS OF SUCH INTELLECTUAL PROPERTY, AND THE SAME, IF NOT IN THE POSSESSIONOF SUCH OTHER PARTY, SHALL BE PROMPTLY DELIVERED TO IT (I) BEFORE THIS LICENSE AGREEMENT IS REJECTED BY OR ON BEHALF OF THE BANKRUPT PARTY,WITHIN THIRTY (30) DAYS AFTER THE OTHER PARTY’S WRITTEN REQUEST, UNLESS THE BANKRUPT PARTY, OR ITS TRUSTEE OR RECEIVER, ELECTS WITHIN THIRTY(30) DAYS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS UNDER THIS LICENSE AGREEMENT, OR (II) AFTER ANY REJECTION OF THIS LICENSEAGREEMENT BY OR ON BEHALF OF THE BANKRUPT PARTY, IF NOT PREVIOUSLY DELIVERED AS PROVIDED UNDER CLAUSE (I) ABOVE. ALL RIGHTS OF THEPARTIES UNDER THIS SECTION 10.4 AND UNDER SECTION 365(N) OF THE U.S. BANKRUPTCY CODE ARE IN ADDITION TO AND NOT IN SUBSTITUTION OF ANYAND ALL OTHER RIGHTS, POWERS, AND REMEDIES THAT EACH PARTY MAY HAVE UNDER THIS LICENSE AGREEMENT, UNDER THE U.S. BANKRUPTCY CODE,AND ANY OTHER APPLICABLE LAWS. THE NON-BANKRUPT PARTY SHALL HAVE THE RIGHT TO PERFORM THE OBLIGATIONS OF THE BANKRUPT PARTY HEREUNDERWITH RESPECT TO SUCH INTELLECTUAL PROPERTY, BUT NEITHER SUCH PROVISION NOR SUCH PERFORMANCE BY THE NON-BANKRUPT PARTY SHALL RELEASE THEbankrupt Party from any such obligation or liability for failing to perform it.10.5Effects of Termination. (a)UPON TERMINATION (BUT NOT EXPIRATION PURSUANT TO SECTION 10.1) OF THIS LICENSE AGREEMENT FOR ANYreason:(i)Cessation of Rights. EXCEPT AS EXPRESSLY PROVIDED HEREIN, INCLUDING SECTIONS 8.5,10.5(A) AND AS NECESSARY FOR CUREVAC TO SELL OFF EXISTING INVENTORY AS PERMITTED UNDER SECTION 10.5(III) BELOW, ALLRIGHTS AND LICENSES GRANTED BY ARCTURUS TO CUREVAC UNDER THIS LICENSE AGREEMENT WILL TERMINATE. CUREVAC SHALLWIND DOWN THE DEVELOPMENT (INCLUDING ANY CLINICAL TRIALS), MANUFACTURE AND COMMERCIALIZATION OF THE LICENSEDProduct in compliance with all applicable Laws and at its own cost and expense.(ii)Sell Off. NOTWITHSTANDING THE TERMINATION OF CUREVAC'S LICENSES AND OTHER RIGHTSUNDER THIS LICENSE AGREEMENT, CUREVAC SHALL RETAIN THE RIGHT TO DISTRIBUTE, SELL OR OTHERWISE DISPOSE OF ITS EXISTINGINVENTORY OF THE LICENSED PRODUCTS, IN EACH CASE THAT IS INTENDED FOR DISTRIBUTION, SALE OR DISPOSITION IN THETERRITORY, FOR A PERIOD OF NOT MORE THAN SIX (6) MONTHS FOLLOWING THE DATE OF THE EFFECTIVE TERMINATION, AS THOUGHTHIS LICENSE AGREEMENT HAD NOT BEEN TERMINATED, AND SUCH DISTRIBUTION, SALE OR OTHER DISPOSITION SHALL NOTCONSTITUTE INFRINGEMENT OF THE PATENTS OR OTHER INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS OF ARCTURUS OR ITSAFFILIATES. CUREVAC'S RIGHT TO DISTRIBUTE, SELL OR OTHERWISE DISPOSE OF ITS EXISTING INVENTORY OF THE LICENSEDPRODUCTS PURSUANT TO THIS SECTION 10.5(A)(II) SHALL BE SUBJECT TO CUREVAC'S CONTINUING OBLIGATION TO PAY ROYALTIESwith respect to the Net Sales.(b)UPON TERMINATION PURSUANT TO SECTION 10.1(B), ARCTURUS SHALL REFUND TO CUREVAC THE OPTION EXERCISE FEE (ASDEFINED IN THE DEVELOPMENT AND OPTION AGREEMENT), THE MILESTONE PAYMENTS ALREADY PAID BY CUREVAC AND ALL OTHER PAYMENTS MADEby CureVac in relation to this License Agreement.10.6Survival. IN ADDITION TO THE TERMINATION CONSEQUENCES SET FORTH IN SECTION 10.5, THE FOLLOWING PROVISIONS WILLsurvive termination or expiration of this License Agreement:36 SECTIONS 1, 4 (TO THE EXTENT OF ANY OUTSTANDING PAYMENTS ACCRUED AS OF THE EFFECTIVE DATE OF TERMINATION), 5, 8, 9.4, 9.6, 10.5, 10.6 AND11. TERMINATION OR EXPIRATION OF THIS LICENSE AGREEMENT WILL NOT RELIEVE THE PARTIES OF ANY LIABILITY OR OBLIGATION WHICH ACCRUEDHEREUNDER PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR EXPIRATION NOR PRECLUDE EITHER PARTY FROM PURSUING ALL RIGHTS AND REMEDIES ITMAY HAVE HEREUNDER OR AT LAW OR IN EQUITY WITH RESPECT TO ANY BREACH OF THIS LICENSE AGREEMENT NOR PREJUDICE EITHER PARTY’S RIGHT TOobtain performance of any obligation. All other rights and obligations will terminate upon expiration of this License Agreement.11.General Provisions.11.1Dispute Resolution.(a)Disputes. DISPUTES ARISING UNDER OR IN CONNECTION WITH THIS LICENSE AGREEMENT WILL BE RESOLVED PURSUANTTO THIS SECTION 11.1; provided, however, THAT IN THE EVENT A DISPUTE CANNOT BE RESOLVED WITHOUT AN ADJUDICATION OF THE RIGHTSOR OBLIGATIONS OF A THIRD PARTY (OTHER THAN ANY CUREVAC INDEMNITEES OR ARCTURUS INDEMNITEES IDENTIFIED IN SECTION 9.6), THEdispute procedures set forth Sections 11.1(c) and 11.1(c) will be inapplicable as to such dispute.(b)Dispute Escalation. IN THE EVENT OF A DISPUTE BETWEEN THE PARTIES, THE PARTIES WILL FIRST ATTEMPT IN GOODFAITH TO RESOLVE SUCH DISPUTE BY NEGOTIATION AND CONSULTATION BETWEEN THEMSELVES. IN THE EVENT THAT SUCH DISPUTE IS NOTRESOLVED ON AN INFORMAL BASIS WITHIN THIRTY (30) DAYS, EITHER PARTY MAY, BY WRITTEN NOTICE TO THE OTHER, HAVE SUCH DISPUTEREFERRED TO EACH PARTY’S CHIEF EXECUTIVE OFFICER OR HIS OR HER DESIGNEE (WHO WILL BE A SENIOR EXECUTIVE WITH THE APPROPRIATEAUTHORITY TO DETERMINE THE MATTER FOR SUCH PARTY), WHO WILL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH DISPUTE BY NEGOTIATION ANDconsultation for a thirty (30) day period following receipt of such written notice(c)Dispute Resolution. IN THE EVENT THE CHIEF EXECUTIVE OFFICERS OF THE PARTIES ARE NOT ABLE TO RESOLVE SUCHDISPUTE AS SET FORTH ABOVE, THE PARTIES AGREE TO TRY TO SOLVE SUCH DISPUTE AMICABLY BY MEDIATION. THE PARTIES SHALL CONDUCT AMEDIATION PROCEDURE ACCORDING TO THE MEDIATION RULES OF THE WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) IN EFFECT ONTHE DATE OF THE COMMENCEMENT OF THE MEDIATION PROCEEDINGS. THE LOCATION OF THE MEDIATION PROCEEDINGS WILL BE NEW YORKCITY, NEW YORK, U.S.. THE NUMBER OF MEDIATORS WILL BE ONE (1). THE LANGUAGE OF THE MEDIATION PROCEEDINGS WILL BEENGLISH. IF THE DISPUTE HAS NOT BEEN SETTLED PURSUANT TO THE SAID RULES WITHIN SIXTY (60) DAYS FOLLOWING THE FILING OF A REQUESTFOR MEDIATION OR WITHIN SUCH OTHER PERIOD AS THE PARTIES MAY AGREE IN WRITING, EITHER PARTY MAY SUBMIT THE DISPUTE TO FINAL ANDBINDING ARBITRATION. ANY DISPUTE RELATING TO THE VALIDITY PERFORMANCE, CONSTRUCTION OR INTERPRETATION OF THIS LICENSEAGREEMENT, WHICH CANNOT BE RESOLVED AMICABLY BETWEEN THE PARTIES AFTER FOLLOWING THE PROCEDURE SET FORTH IN THIS SECTION11.1, SHALL BE SUBMITTED TO ARBITRATION IN ACCORDANCE WITH THE ARBITRATION RULES OF WIPO IN EFFECT ON THE DATE OF THECOMMENCEMENT OF THE ARBITRATION PROCEEDINGS. THE LOCATION OF THE ARBITRATION PROCEEDINGS WILL BE NEW YORK CITY, NEWYORK, U.S.. THE NUMBER OF ARBITRATORS WILL BE THREE (3). THE LANGUAGE OF THE ARBITRATION PROCEEDING WILL BE ENGLISH. THEDECISION OF THE ARBITRATORS SHALL BE FINAL AND BINDING UPON THE PARTIES (ABSENT MANIFEST ERROR ON THE PART OF THE ARBITRATOR(S))and enforceable in any court of competent jurisdiction.37 11.2RELATIONSHIP OF PARTIES. NOTHING IN THIS LICENSE AGREEMENT IS INTENDED OR WILL BE DEEMED TO CONSTITUTE APARTNERSHIP, AGENCY, EMPLOYER-EMPLOYEE OR JOINT VENTURE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL INCUR ANY DEBTS OR MAKE ANYCOMMITMENTS FOR THE OTHER, EXCEPT TO THE EXTENT, IF AT ALL, SPECIFICALLY PROVIDED THEREIN. THERE ARE NO EXPRESS OR IMPLIED THIRD PARTYBENEFICIARIES HEREUNDER (EXCEPT FOR CUREVAC INDEMNITEES AND ARCTURUS INDEMNITEES FOR PURPOSES OF SECTION 9.6). FOR CLARITY, CUREVACDOES NOT GRANT TO ARCTURUS ANY RIGHTS OR LICENSES UNDER THIS LICENSE AGREEMENT TO ANY CUREVAC TECHNOLOGY OR INTELLECTUAL PROPERTYrights.11.3COMPLIANCE WITH LAW. EACH PARTY WILL PERFORM OR CAUSE TO BE PERFORMED ANY AND ALL OF ITS OBLIGATIONS OR THEexercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.11.4Governing Law. THIS LICENSE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OFthe State of New York, U.S., without respect to its conflict of Laws rules.11.5Counterparts; Facsimiles. THIS LICENSE AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICHWILL BE DEEMED AN ORIGINAL, AND ALL OF WHICH TOGETHER WILL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT. FACSIMILE OR PDF EXECUTIONAND DELIVERY OF THIS LICENSE AGREEMENT BY EITHER PARTY WILL CONSTITUTE A LEGAL, VALID AND BINDING EXECUTION AND DELIVERY OF THIS LICENSEAgreement by such Party.11.6Headings. ALL HEADINGS IN THIS LICENSE AGREEMENT ARE FOR CONVENIENCE ONLY AND WILL NOT AFFECT THE MEANING OFany provision hereof.11.7WAIVER OF RULE OF CONSTRUCTION. EACH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL IN CONNECTION WITHTHE REVIEW, DRAFTING AND NEGOTIATION OF THIS LICENSE AGREEMENT. ACCORDINGLY, THE RULE OF CONSTRUCTION THAT ANY AMBIGUITY IN THISLicense Agreement will be construed against the drafting party will not apply.11.8Interpretation. WHENEVER ANY PROVISION OF THIS LICENSE AGREEMENT USES THE TERM "INCLUDING" (OR "INCLUDES"),SUCH TERM WILL BE DEEMED TO MEAN "INCLUDING WITHOUT LIMITATION" (OR "INCLUDES WITHOUT LIMITATIONS"). "HEREIN," "HEREBY," "HEREUNDER,""HEREOF" AND OTHER EQUIVALENT WORDS REFER TO THIS LICENSE AGREEMENT AS AN ENTIRETY AND NOT SOLELY TO THE PARTICULAR PORTION OF THISLICENSE AGREEMENT IN WHICH ANY SUCH WORD IS USED. ALL DEFINITIONS SET FORTH HEREIN WILL BE DEEMED APPLICABLE WHETHER THE WORDSDEFINED ARE USED HEREIN IN THE SINGULAR OR THE PLURAL. UNLESS OTHERWISE PROVIDED, ALL REFERENCES TO SECTIONS AND APPENDICES IN THISLICENSE AGREEMENT ARE TO SECTIONS AND APPENDICES OF THIS LICENSE AGREEMENT. REFERENCES TO ANY SECTIONS INCLUDE SECTIONS ANDsubsections that are part of the related Section.11.9BINDING EFFECT. THIS LICENSE AGREEMENT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON THE PARTIES, THEIRAffiliates, and their respective lawful successors and assigns.11.10Assignment. THIS LICENSE AGREEMENT MAY NOT BE ASSIGNED BY EITHER PARTY, NOR MAY EITHER PARTY DELEGATE ITSOBLIGATIONS OR OTHERWISE TRANSFER LICENSES OR OTHER RIGHTS CREATED BY THIS LICENSE AGREEMENT, EXCEPT AS EXPRESSLY PERMITTED HEREUNDER OROTHERWISE WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD, DELAYED ORCONDITIONED; PROVIDED THAT EITHER PARTY MAY ASSIGN THIS LICENSE AGREEMENT WITHOUT SUCH CONSENT TO AN AFFILIATE OR TO ITS SUCCESSOR INconnection with sale of all or38 SUBSTANTIALLY ALL OF ITS ASSETS OR BUSINESS OR THAT PORTION OF ITS BUSINESS PERTAINING TO THE SUBJECT MATTER OF THIS LICENSE AGREEMENT(whether by merger, consolidation or otherwise).11.11Notices. ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED TO BE GIVEN PURSUANTTO THIS LICENSE AGREEMENT WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY GIVEN UPON THE DATE OF RECEIPT IF DELIVERED BY HAND,RECOGNIZED INTERNATIONAL OVERNIGHT COURIER, OR REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID OR FACSIMILE (ANDPROMPTLY CONFIRMED BY PERSONAL DELIVERY, REGISTERED OR CERTIFIED MAIL OR OVERNIGHT COURIER) TO THE FOLLOWING ADDRESSES (OR TO SUCHaddress as a Party may subsequently provide by written notice in accordance with this Section 11.11):If to CureVac:CureVac AGPaul-Ehrlich-Str. 1572076 TübingenGermanyAttention: CEO and General CounselFax: +49 7071 9883 - 1101 If to Arcturus:Arcturus Therapeutics Inc.10628 Science Center DriveSuite 200San Diego, California 92121USAAttn:Chief Executive OfficerCopy to: General CounselFax: (858) 300-5028 with a copy to (which copy shall not constitute notice):Cooley LLP3175 Hanover St.Palo Alto, CA 94303Attn: Glen Y. SatoFax: (650) 849-7400 11.12AMENDMENT AND WAIVER. THIS LICENSE AGREEMENT MAY BE AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIEDONLY BY MEANS OF A WRITTEN INSTRUMENT SIGNED BY BOTH PARTIES; PROVIDED THAT ANY UNILATERAL UNDERTAKING OR WAIVER MADE BY ONE PARTY INFAVOR OF THE OTHER WILL BE ENFORCEABLE IF UNDERTAKEN IN A WRITING SIGNED BY THE PARTY TO BE CHARGED WITH THE UNDERTAKING OR WAIVER. ANYWAIVER OF ANY RIGHTS OR FAILURE TO ACT IN A SPECIFIC INSTANCE WILL RELATE ONLY TO SUCH INSTANCE AND WILL NOT BE CONSTRUED AS AN AGREEMENT TOwaive any rights or fail to act in any other instance, whether or not similar.11.13Severability. IN THE EVENT THAT ANY PROVISION OF THIS LICENSE AGREEMENT WILL, FOR ANY REASON, BE HELD TO BEINVALID OR UNENFORCEABLE IN ANY RESPECT, SUCH INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER PROVISION HEREOF, AND THE PARTIESwill negotiate in good faith to modify the License Agreement to preserve (to the extent possible) their original intent.39 11.14ENTIRE AGREEMENT. THIS LICENSE AGREEMENT TOGETHER WITH THE DEVELOPMENT AND OPTION AGREEMENT AND ANYother license agreements entered into during the Term pursuant to the Development and Option Agreement are the sole agreement WITHrespect to the subject matter hereof and supersedes all other agreements and understandings between the Parties with respect to same.11.15FORCE MAJEURE. NEITHER ARCTURUS NOR CUREVAC WILL BE LIABLE FOR FAILURE OF OR DELAY IN PERFORMING OBLIGATIONSSET FORTH IN THIS LICENSE AGREEMENT (OTHER THAN ANY OBLIGATION TO PAY MONIES WHEN DUE), AND NEITHER WILL BE DEEMED IN BREACH OF SUCHOBLIGATIONS, IF SUCH FAILURE OR DELAY IS DUE TO NATURAL DISASTERS OR ANY CAUSES REASONABLY BEYOND THE CONTROL OF ARCTURUS OR CUREVAC;PROVIDED THAT THE PARTY AFFECTED WILL PROMPTLY NOTIFY THE OTHER OF THE FORCE MAJEURE CONDITION AND WILL EXERT REASONABLE EFFORTS TOeliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible. 40 Appendix 1.3Description of the Arcturus LMD Technology[To be completed in accordance with Section 5.2 of the Development and Option Agreement.] Appendix 1.4Patents and Know-How within the Arcturus Technologyas of the License Agreement Effective Date[To be updated in accordance with Section 5.2 of the Development and Option Agreement.]] (A)PatentsARCTURUS LMD TECHNOLOGY[…***…] ***Confidential Treatment Requested […***…] (B)Know-How[…***…]***Confidential Treatment Requested Appendix 1.28Joint Interest Patents[To be completed in accordance with Section 5.2 of the Development and Option Agreement and updated during the Term] Appendix 1.51Pre-Existing Restrictions •[…***…] ***Confidential Treatment Requested Appendix 1.60Description of the TargetThe description for a Target described in sub-clause (a) of the definition of Target shall include the following information:a.[…***…];b.[…***…]; andc.[…***…]; andd.[…***…]The description for a Target described in sub-clause (b) of the definition of Target shall include the following information: a.[…***…] ***Confidential Treatment Requested The description for a Target described in sub-clause (c) of the definition of Target shall include the following information:a.[…***…]; andb.[…***…] ***Confidential Treatment Requested Schedule 1-B EXCLUSIVE LICENSE AGREEMENTby and betweenCUREVAC AGandARCTURUS THERAPEUTICS INC.datedMay 3, 2018 Table of Contents 1. DEFINITIONS. 4 2. LICENSE GRANTS; TECHNOLOGY TRANSFER. 13 3. LICENSE LIMITATIONS. 15 4. PAYMENTS AND ROYALTIES. 15 5. OWNERSHIP AND INVENTORSHIP OF IP. 20 6. PATENT PROSECUTION AND MAINTENANCE. 21 7. PATENT ENFORCEMENT AND DEFENSE. 23 8. CONFIDENTIALITY. 27 9. WARRANTIES; LIMITATIONS OF LIABILITY; INDEMNIFICATION. 29 10. TERM AND TERMINATION. 34 11. GENERAL PROVISIONS. 37 2 List of Appendices Appendix 1.3Description of the Arcturus LMD TechnologyAppendix 1.4Patents and Know-How within the Arcturus Technology as of the License Agreement Effective DateAppendix 1.28Joint Interest PatentsAppendix 1.50Pre-Existing RestrictionsAppendix 1.59Description of the Target 3 License AgreementThis License Agreement ("License Agreement"), effective as of delivery of an Acceptance Notice in accordance withSection 5.1(b) of the Development and Option Agreement (as defined below) (the "License Agreement Effective Date"), is made byand between Arcturus Therapeutics Inc., a Delaware corporation ("Arcturus"), and CureVac AG, a German stock corporation withoffices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany ("CureVac"). Each of Arcturus and CureVac may be referred to hereinas a "Party" or together as the "Parties."WHEREAS, Arcturus has expertise and intellectual property relating to the development of LMD Technologies (as definedbelow) that embody or incorporate delivery systems (and components thereof) for molecular therapeutics based on or incorporatinglipid-enabled and unlocked nucleomonomer platform for delivery of nucleic acids as specified in Appendix 1.3, the Arcturus LMDTechnology; andWHEREAS, CureVac has expertise and intellectual property relating to mRNA Constructs (as defined below); andWHEREAS, Arcturus and CureVac are parties to that certain Development and Option Agreement (dated January 1, 2018,and amended as of May 3, 2018) (the "Development and Option Agreement") pursuant to which CureVac has options to take licensesunder the Arcturus LMD Technology (as defined below) with respect to CureVac’s mRNA Constructs; andWHEREAS, pursuant to the terms of the Development and Option Agreement, CureVac has exercised an option to obtaina license pursuant to this Agreement with respect to the Target (as defined below) and the Parties are now entering into a licensingarrangement whereby CureVac will have a license under the Arcturus LMD Technology to develop and commercialize LicensedProducts (as defined below) with respect to such Target.WHEREAS, the Parties intend to also co-develop an ornithine transcarbamylase ("OTC") deficiency product and possiblyother products under a separate co-development and co-commercialization agreement ("Co-Development Agreement").NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuableconsideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:1.Definitions.The following terms and their correlatives will have the following meanings:1.1"Affiliate" OF A PERSON OR ENTITY MEANS ANY OTHER ENTITY WHICH (DIRECTLY OR INDIRECTLY) IS CONTROLLED BY, CONTROLS ORIS UNDER COMMON CONTROL WITH SUCH PERSON OR ENTITY. FOR THE PURPOSES OF THIS DEFINITION, THE TERM "CONTROL" (INCLUDING, WITH CORRELATIVEMEANINGS, THE TERMS "CONTROLLED BY" AND "UNDER COMMON CONTROL WITH") AS USED WITH RESPECT TO AN ENTITY WILL MEAN (I) IN THE CASE OF ACORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF VOTING SECURITIES ENTITLED TO CAST AT LEAST FIFTY PERCENT (50%) OF THE VOTES IN THE ELECTIONOF DIRECTORS OR (II) IN THE CASE OF A NON-CORPORATE ENTITY, DIRECT OR INDIRECT OWNERSHIP OF AT LEAST FIFTY PERCENT (50%) OF THE EQUITY INTERESTSwith the power to direct the management and policies of such entity 4 PROVIDED THAT IF LOCAL LAW RESTRICTS FOREIGN OWNERSHIP, CONTROL WILL BE ESTABLISHED BY DIRECT OR INDIRECT OWNERSHIP OF THE MAXIMUMownership percentage that may, under such local Law, be owned by foreign interests. […***…].1.2"Arcturus Indemnitees" has the meaning set forth in Section 9.6(a).1.3"ARCTURUS LMD TECHNOLOGY" MEANS ANY AND ALL LMD TECHNOLOGY FOR DELIVERING RNA THERAPEUTICS THAT ISCONTROLLED BY ARCTURUS OR ANY OF ITS AFFILIATES AS OF THE EFFECTIVE DATE OR DURING THE TERM, INCLUDING THE LUNAR™ PLATFORM, Adescription of which technology, as in existence as of the License Agreement Effective Date, is set forth on Appendix 1.3.1.4"ARCTURUS TECHNOLOGY" MEANS ANY PATENTS AND KNOW-HOW THAT ARE CONTROLLED BY ARCTURUS OR ANY OF ITSAFFILIATES AS OF THE LICENSE AGREEMENT EFFECTIVE DATE OR DURING THE TERM AND THAT ARE NECESSARY OR USEFUL FOR THE RESEARCH,DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION OF LICENSED PRODUCTS. THE PATENTS AND KNOW-HOW COMPRISED IN THE ARCTURUSTECHNOLOGY AS OF THE LICENSE AGREEMENT EFFECTIVE DATE ARE LISTED IN APPENDIX 1.4. ARCTURUS TECHNOLOGY SHALL INCLUDE THE ARCTURUSLMD Technology. Notwithstanding the foregoing, Arcturus Technology shall exclude(a)ANY PATENTS AND KNOW-HOW ACQUIRED BY ARCTURUS AFTER LICENSE AGREEMENT EFFECTIVE DATE IF ARCTURUSIS REQUIRED TO MAKE ANY PAYMENT TO A THIRD PARTY IN CONNECTION WITH THE GRANT, MAINTENANCE OR EXERCISE OF A SUBLICENSE TO CUREVAC,UNLESS CUREVAC AGREES IN WRITING TO REIMBURSE ARCTURUS FOR ALL SUCH PAYMENTS; provided, however, THAT SUCH PAYMENTS SHALL REDUCECureVac's royalty obligations in accordance with Section 4.3(b),(b)ANY PATENTS AND KNOW-HOW OF A THIRD PARTY (INCLUDING ITS AFFILIATES) THAT BECOMES ARCTURUS’ AFFILIATEAFTER THE LICENSE AGREEMENT EFFECTIVE DATE AS A RESULTS OF A CHANGE OF CONTROL, BUT ONLY IF AND TO THE EXTENT THAT IT IS NOT LMDTechnology, and(c)any Patents that CureVac elects to exclude pursuant to Section 2.3.1.5"ARCTURUS TECHNOLOGY PATENT(S)" MEANS ANY AND ALL PATENTS COMPRISED IN THE ARCTURUS TECHNOLOGY DURING THETERM, UNLESS OTHERWISE SET FORTH HEREIN. FOR CLARITY, ARCTURUS TECHNOLOGY PATENTS INCLUDE ARCTURUS’ INTEREST IN THE JOINT INTERESTPatents. 1.6"BUSINESS DAY" MEANS A DAY OTHER THAN A SATURDAY, SUNDAY, OR BANK OR OTHER PUBLIC HOLIDAY IN SAN DIEGO,California, USA or Tübingen, Germany or Boston, Massachusetts, USA.1.7"cGMP" MEANS CURRENT GOOD MANUFACTURING PRACTICES AS SPECIFIED IN THE U.S. C.F.R., ICH GUIDELINE Q7A, ORequivalent Laws of an applicable Regulatory Authority at the time of manufacture.1.8"Calendar Quarter" MEANS THE RESPECTIVE PERIODS OF THREE (3) CONSECUTIVE CALENDAR MONTHS ENDING ON MARCH 31,June 30, September 30 and December 31. ***Confidential Treatment Requested5 1.9"Change of Control" with respect to Arcturus, shall be deemed to have occurred if during the Term (i) any personOR ENTITY IS OR BECOMES THE "BENEFICIAL OWNER", DIRECTLY OR INDIRECTLY, OF SHARES OF CAPITAL STOCK OR OTHER INTERESTS (INCLUDING PARTNERSHIPINTERESTS) OF ARCTURUS THEN OUTSTANDING AND NORMALLY ENTITLED (WITHOUT REGARD TO THE OCCURRENCE OF ANY CONTINGENCY) TO VOTE IN THEELECTION OF THE DIRECTORS, MANAGERS OR SIMILAR SUPERVISORY POSITIONS OF ARCTURUS REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTALVOTING POWER OF ALL OUTSTANDING CLASSES OF VOTING STOCK OF ARCTURUS OR HAS THE POWER, DIRECTLY OR INDIRECTLY, TO ELECT A MAJORITY OF THEMEMBERS OF ARCTURUS’ BOARD OF DIRECTORS, OR SIMILAR GOVERNING BODY; OR (II) ARCTURUS ENTERS INTO A MERGER, CONSOLIDATION OR SIMILARTRANSACTION WITH ANOTHER PERSON OR ENTITY; OR (III) ARCTURUS SELLS OR TRANSFERS TO ANY THIRD PARTY, IN ONE (1) OR MORE RELATED TRANSACTIONS,PROPERTIES OR ASSETS REPRESENTING ALL OR SUBSTANTIALLY ALL OF ARCTURUS’ CONSOLIDATED TOTAL ASSETS TO WHICH THIS LICENSE AGREEMENT RELATES,provided however, that:(a)SUBSECTIONS (I) TO (III) SHALL ONLY APPLY IF THE PERSON OR ENTITY OR THIRD PARTY ACQUIRING CONTROL IS (I) APHARMACEUTICAL COMPANY WHICH HAS EXPERIENCE IN DEVELOPING AND COMMERCIALIZING PHARMACEUTICAL PRODUCTS (i.e., IS A STRATEGIC, NOTFINANCIAL INVESTOR OR PARTNER) OR (II) A COMPETITOR, I.E., A COMPANY WHOSE BUSINESS CONSISTS PRINCIPALLY OF MRNA DEVELOPMENT,manufacturing and/or commercialization, and(b)A BONA FIDE FINANCING TRANSACTION WITH THIRD PARTIES THAT DOES NOT OTHERWISE MEET THE REQUIREMENTS OFsubsection (a) shall not constitute a Change of Control. 1.10"COMBINATION PRODUCT" MEANS A LICENSED PRODUCT THAT INCLUDES AT LEAST ONE ADDITIONAL ACTIVE PHARMACEUTICALINGREDIENT OTHER THAN LMDS, MRNA CONSTRUCTS, AND OTHER RNAS (I.E., GUIDE RNA(S)) OR DNA SEQUENCE(S). DRUG DELIVERY VEHICLES,ADJUVANTS, AND EXCIPIENTS SHALL NOT BE DEEMED TO BE "ACTIVE INGREDIENTS", EXCEPT IN THE CASE WHERE SUCH DELIVERY VEHICLE, ADJUVANT, OREXCIPIENT IS RECOGNIZED AS AN ACTIVE INGREDIENT IN ACCORDANCE WITH 21 C.F.R. 210.3(B)(7) OR EQUIVALENT LAWS IN OTHER JURISDICTIONS,provided however, SHOULD LMDS COMPRISED IN A LICENSED PRODUCT BE CHARACTERIZED AS "ACTIVE INGREDIENTS" AT ANY TIME DURING THETerm, such LMDs will not be considered an "active ingredient" for the purposes of this definition.1.11"CONFIDENTIAL INFORMATION" OF A PARTY MEANS ALL PROPRIETARY KNOW-HOW, UNPUBLISHED PATENT APPLICATIONS ANDOTHER NON-PUBLIC INFORMATION AND DATA OF A FINANCIAL, COMMERCIAL, BUSINESS, OPERATIONAL, SCIENTIFIC OR TECHNICAL NATURE OF SUCH PARTY THATIS DISCLOSED BY OR ON BEHALF OF SUCH PARTY OR ANY OF ITS AFFILIATES OR OTHERWISE MADE AVAILABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES,WHETHER MADE AVAILABLE ORALLY, IN WRITING OR IN ELECTRONIC FORM IN CONNECTION WITH THIS LICENSE AGREEMENT, INCLUDING INFORMATIONCOMPRISING OR RELATING TO CONCEPTS, DISCOVERIES, INVENTIONS, DATA, DESIGNS OR FORMULAE IN CONNECTION WITH THIS LICENSE AGREEMENT. INADDITION, ANY NON-PUBLIC INFORMATION RELATED TO THIS LICENSE AGREEMENT OR THE LICENSED PRODUCTS HEREUNDER AND DISCLOSED BY A PARTY TOTHE OTHER PARTY (OR THEIR RESPECTIVE AFFILIATES) UNDER THE DEVELOPMENT AND OPTION AGREEMENT WILL BE DEEMED SUCH PARTY’S CONFIDENTIALINFORMATION HEREUNDER. TECHNOLOGY WILL BE CONSIDERED THE CONFIDENTIAL INFORMATION OF THE PARTY (OR PARTIES) OWNING SUCH TECHNOLOGY,and jointly-owned Technology will be considered Confidential Information of both Parties.1.12"Control" OR "Controlled" MEANS WITH RESPECT TO TECHNOLOGY, A PARTY OWNS OR HAS A LICENSE TO USE AND PRACTICEthe respective Patent or Know-How without violating the terms of any agreement with any Third Party.1.13"CTA" means a clinical trial application.6 1.14"CureVac Indemnitees" has the meaning set forth in Section 9.6(b).1.15"Development and Option Agreement" has the meaning set forth in the Preamble.1.16“Diligent Efforts” MEANS, WITH RESPECT TO THE EFFORTS TO BE EXPENDED BY EACH PARTY WITH RESPECT TO THE ACTIVITIESOF A PARTY PURSUANT TO THIS AGREEMENT, ACTIVE AND SUSTAINED EFFORTS TO CONDUCT THE APPLICABLE ACTIVITY, OR TO ATTEMPT TO ACHIEVE THEapplicable requirement or goal, in a prompt and expeditious manner, as is reasonably practicable under the circumstances (including thelevel of FTE funding and budget for out-of-pocket and Third Party contractors set forth therein) and the terms of this Agreement.1.17"Disclosing Party" has the meaning set forth in Section 8.11.18"Field of Use" means the treatment and diagnosis of all diseases and conditions.1.19"FIRST COMMERCIAL SALE" MEANS THE FIRST SALE FOR USE OR CONSUMPTION OF ANY LICENSED PRODUCT IN A COUNTRY AFTERall required Regulatory Approvals for commercial sale of such Licensed Product have been obtained in such country.1.20"FTE" MEANS A FULL-TIME PERSON, OR MORE THAN ONE PERSON WORKING THE EQUIVALENT OF A FULL-TIME PERSON, WHERE"full-time" is determined by the standard practices in the biopharmaceutical industry in the geographic area in which such personnel areWORKING, CONSISTING OF A TOTAL OF 1880 HOURS PER YEAR OF WORK ON THE APPLICABLE ACTIVITIES. ANY PERSON WHO DEVOTES LESS THAN 1880HOURS PER YEAR ON THE APPLICABLE ACTIVITIES SHALL BE TREATED AS AN FTE ON A PRO-RATED BASIS, BASED UPON THE ACTUAL NUMBER OF HOURSWORKED BY SUCH PERSON ON SUCH ACTIVITIES, DIVIDED BY 1880. ANY PERSON WHO DEVOTES MORE THAN 1880 HOURS PER YEAR ON THE APPLICABLEACTIVITIES SHALL BE TREATED AS ONE (1) FTE, I.E., IN NO EVENT SHALL ONE PERSON BE COUNTED AS MORE THAN ONE FTE. FTE ACTIVITIES SHALLINCLUDE THE PERFORMANCE OF THE APPLICABLE ACTIVITIES AND SCIENTIFIC MANAGEMENT OVERSIGHT, AS REASONABLY REQUIRED, BUT, FOR CLARITY,EXCLUDE (I) THE WORK OF GENERAL CORPORATE OR ADMINISTRATIVE PERSONNEL, OVERHEAD (INCLUDING FACILITIES COSTS), INSURANCES AND SIMILARcosts. 1.21"FTE COSTS" MEANS AN INITIAL RATE OF […***…] DOLLARS ($[…***…]) PER FTE PER YEAR, WHICH SHALL APPLYTHROUGH DECEMBER 31, 2019. THEREAFTER, THE FTE RATE SHALL BE CHANGED BI-ANNUALLY AT THE END OF EACH SECOND CALENDAR YEAR TO REFLECTANY PERCENTAGE INCREASE OR DECREASE (AS THE CASE MAY BE) IN THE CONSUMER PRICE INDEX IN THE U.S. (INDEX FOR ALL ITEMS) (“CPI”) (BASEDON THE CHANGE IN THE CPI FROM THE MOST RECENT INDEX AVAILABLE AS OF THE EFFECTIVE DATE TO THE MOST RECENT INDEX AVAILABLE AS OF THE DATEof the calculation of such revised FTE Cost rate).1.22 "IND" MEANS AN INVESTIGATIONAL NEW DRUG APPLICATION, OR EQUIVALENT APPLICATION OR SUBMISSION FOR APPROVAL TOconduct human clinical trials.1.23"Indemnification Claim Notice" has the meaning set forth in Section 9.6(c).1.24"Indemnified Party" has the meaning set forth in Section 9.6(c).1.25"Indication" MEANS AN INDIVIDUAL DISEASE OR CLINICAL CONDITION WITH RESPECT TO WHICH AT LEAST ONE ADEQUATE ANDwell controlled study is required to support inclusion of such***Confidential Treatment Requested7 disease or condition in the indication statement of an FDA approved package insert for a Licensed Product.1.26"Initiation" MEANS IN CONNECTION WITH A CLINICAL TRIAL IN ANY OF ITS PHASES 1 THROUGH 3 THE FIRST DOSING OF THE FIFTHpatient or fifth healthy subject.1.27"Inventions" has the meaning set forth in Section 5.1.1.28"JOINT INTEREST PATENTS" MEANS THE PATENTS GENERATED UNDER THE DEVELOPMENT AND OPTION AGREEMENT AND JOINTLYowned by the Parties. Such Joint Interest Patents are listed in Appendix 1.28 hereto, as amended from time to time.1.29"Know-How" MEANS ALL COMMERCIAL, TECHNICAL, SCIENTIFIC AND OTHER KNOW-HOW AND INFORMATION, TRADE SECRETS,KNOWLEDGE, TECHNOLOGY, METHODS, PROCESSES, PRACTICES, FORMULAE, INSTRUCTIONS, SKILLS, TECHNIQUES, PROCEDURES, EXPERIENCES, IDEAS,TECHNICAL ASSISTANCE, DESIGNS, DRAWINGS, ASSEMBLY PROCEDURES, COMPUTER PROGRAMS, SPECIFICATIONS, DATA AND RESULTS (INCLUDING BIOLOGICAL,CHEMICAL, PHARMACOLOGICAL, TOXICOLOGICAL, PHARMACEUTICAL, PHYSICAL AND ANALYTICAL, PRECLINICAL, CLINICAL, SAFETY, MANUFACTURING ANDQUALITY CONTROL DATA AND KNOW-HOW, INCLUDING STUDY DESIGNS AND PROTOCOLS), IN ALL CASES, PROVIDED IT IS CONFIDENTIAL AND PROPRIETARY, ANDregardless of whether patentable, in written, electronic or any other form now known or hereafter developed.1.30"Late Stage Development" means Development after the Initiation of a Phase 3 Study.1.31"Law" or "Laws" MEANS ALL LAWS, STATUTES, RULES, REGULATIONS, ORDERS, JUDGMENTS, OR ORDINANCES HAVING THE EFFECTof law of any federal, national, multinational, state, provincial, county, city or other political subdivision.1.32"License Agreement" has the meaning set forth in the Preamble.1.33"License Agreement Effective Date" has the meaning set forth in the Preamble.1.34"LICENSED PRODUCT" MEANS […***…] PRODUCT COMPRISED OF (I) LMD SYSTEMS, WHICH ARE COVERED BY ARCTURUSLMD TECHNOLOGY; AND CONTAINING (II) ONE OR MORE MRNA CONSTRUCTS AS THE ACTIVE PHARMACEUTICAL INGREDIENT(S) INTENDED TO EXPRESSTHE TARGET. IN CASE OF TWO OR MORE MRNA CONSTRUCTS THESE CONSTRUCTS MAY BE CONTAINED IN THE SAME OR SEPARATE LMDS. LICENSEDPRODUCT INCLUDES MRNA-LMD PRODUCTS WHICH ARE ADMINISTERED JOINTLY OR SEPARATELY, AND MRNA-LMD PRODUCTS WHICH AREADMINISTERED SIMULTANEOUSLY OR SEQUENTIALLY AS A COMBINATION MEDICINAL PRODUCT OR TREATMENT. FOR GENE EDITING PURPOSES A LICENSEDPRODUCT MAY CONTAIN OTHER RNA(S) (I.E., GUIDE RNA(S)) AND/OR DNA SEQUENCE(S) WHICH CAN BE DELIVERED TOGETHER OR SEPARATELY(COMBINED IN ONE LMD OR DELIVERED IN SEPARATE LMDS), IN ADDITION TO THE ONE OR MORE MRNA CONSTRUCTS INTENDED TO EXPRESS THEDNA Editing Protein. 1.35"LMD TECHNOLOGY" MEANS TECHNOLOGY CONTROLLED BY ARCTURUS THAT CLAIMS, EMBODIES OR INCORPORATES DELIVERYsystems (and components thereof) based on or incorporating lipid-mediated delivery (LMD) systems.1.36"Losses" has the meaning set forth in Section 9.6(a).***Confidential Treatment Requested8 1.37"Materials" MEANS ANY TANGIBLE CHEMICAL OR BIOLOGICAL MATERIAL, INCLUDING ANY COMPOUNDS, LMD, DNA, RNA(INCLUDING MRNA), CLONES, CELLS, AND ANY EXPRESSION PRODUCT, PROGENY, DERIVATIVE OR OTHER IMPROVEMENT THERETO, ALONG WITH ANYtangible chemical or biological material embodying any Know-How, Controlled by Arcturus.1.38"mRNA Construct" means ANY MRNA CONSTRUCT FOR THE EXPRESSION OF A protein, INCLUDING THE SEQUENCE OF SUCHCONSTRUCT (WHICH POTENTIALLY COMPRISES ONE (1) OR MORE OF A CAP, 5’ UTR, THE ASSOCIATED OPEN READING FRAME, 3’UTR AND A POLY A TAIL),THE CHEMISTRY OF NATURAL AND NON-NATURAL NUCLEIC ACIDS, AND OTHER CHEMICAL MODIFICATIONS ASSOCIATED WITH SUCH CONSTRUCT, SUCH MRNAConstruct being covered by mRNA Technology.1.39"MRNA TECHNOLOGY" MEANS Technology CONTROLLED BY CUREVAC THAT CLAIMS, EMBODIES OR INCORPORATESexpression systems (and components thereof), based on or incorporating mRNA.1.40"Milestones" means the milestones payable pursuant to Section 4.1.1.41"Milestone Event" has the meaning set forth in Section 4.1.1.42"Milestone Payment" has the meaning set forth in Section 4.1.1.43"NET SALES" MEANS, WITH RESPECT TO ANY LICENSED PRODUCT, THE GROSS AMOUNT RECEIVED BY CUREVAC AND ITSAFFILIATES AND SUBLICENSEES FOR bona fide SALES OF SUCH LICENSED PRODUCT TO A THIRD PARTY (OTHER THAN AFFILIATES AND SUBLICENSEES BUTINCLUDING DISTRIBUTORS FOR RESALE), LESS DEDUCTIONS, IN EACH CASE TO THE EXTENT REASONABLE, CUSTOMARY, ACTUALLY ALLOWED AND TAKEN INconnection with the sale of such Licensed Product and not otherwise recovered or reimbursed:(a)DISCOUNTS (INCLUDING CASH, QUANTITY AND PATIENT PROGRAM DISCOUNTS), RETROACTIVE PRICE REDUCTIONS,COMMISSIONS, CHARGE-BACK PAYMENTS AND REBATES GRANTED TO MANAGED HEALTH CARE ORGANIZATIONS OR TO FEDERAL, STATE AND LOCALgovernments, their agencies, and purchasers and reimbursers or to trade customers;(b)CREDITS OR ALLOWANCES ACTUALLY GRANTED UPON CLAIMS, DAMAGED GOODS, REJECTIONS OR RETURNS OF, SUCHLICENSED PRODUCT AND NOT IN EXCESS OF THE SELLING PRICE OF SUCH PRODUCT, INCLUDING SUCH LICENSED PRODUCT RETURNED INconnection with recalls or withdrawals;(c)freight out, postage, shipping and insurance charges for delivery of such Licensed Product;(d)TAXES OR DUTIES LEVIED ON, ABSORBED OR OTHERWISE IMPOSED ON THE SALE OF SUCH LICENSED PRODUCT, INCLUDINGVALUE-ADDED TAXES, OR OTHER GOVERNMENTAL CHARGES OTHERWISE IMPOSED UPON THE BILLED AMOUNT, AS ADJUSTED FOR REBATES ANDrefunds; and(e)wholesaler and distributor administration fees(f)OTHER CUSTOMARY DEDUCTIONS TAKEN IN THE ORDINARY COURSE OF BUSINESS IN ACCORDANCE WITH IFRS(International Financial Reporting Standards) principles.If a single item falls into more than one of the above categories above, such items will not be deducted more than once.9 NET SALES SHALL NOT INCLUDE ANY PAYMENTS AMONG CUREVAC, ITS AFFILIATES AND SUBLICENSEES. NET SALES SHALL BE DETERMINED INACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED ACROSS ALL PRODUCTS. NET SALES FOR ANYCOMBINATION PRODUCT SHALL BE CALCULATED ON A COUNTRY-BY-COUNTRY BASIS BY MULTIPLYING ACTUAL NET SALES OF SUCH COMBINATIONPRODUCT BY THE FRACTION A/(A+B), WHERE A IS THE WEIGHTED AVERAGE PRICE PAID FOR THE LICENSED PRODUCT CONTAINED IN SUCHCOMBINATION PRODUCT SOLD SEPARATELY IN FINISHED FORM IN SUCH COUNTRY, AND B IS THE WEIGHTED AVERAGE INVOICE PRICE PAID FORTHE OTHER ACTIVE INGREDIENTS CONTAINED IN SUCH COMBINATION PRODUCT SOLD SEPARATELY IN FINISHED FORM IN SUCH COUNTRY, IF SUCHLicensed Product and such other active ingredients are each sold separately in such country.If such other active ingredients are not sold separately in such country, then Net Sales for such Combination Product shall becalculated on a country-by-country basis by multiplying actual Net Sales of such Combination Product by the fraction A/C,where C is the weighted average invoice price paid for such Combination Product in such country. If such LicensedProduct is not sold separately in finished form in such country, Net Sales for such Licensed Product will be determined byCureVac’s good faith estimate of the relative contribution of such Licensed Product and each such other active ingredients insuch Combination Product, and shall take into account in good faith any applicable allocations and calculations that mayhave been made for the same period in other countries.1.44"NON-RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSEDPRODUCT WITH AN INCIDENCE OF EQUAL TO OR MORE THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THEfirst IND or CTA application will be filed will determine whether a Target is a Non-Rare Disease Target.1.45"Patent(s)" MEANS (A) AN ISSUED PATENT, A PATENT APPLICATION, AND A FUTURE PATENT ISSUED FROM ANY SUCH PATENTAPPLICATION, (B) A FUTURE PATENT ISSUED FROM A PATENT APPLICATION FILED IN ANY COUNTRY WORLDWIDE WHICH CLAIMS PRIORITY FROM A PATENT ORPATENT APPLICATION OF (A), AND (C) ANY ADDITIONS, DIVISIONS, CONTINUATIONS, CONTINUATIONS-IN-PART, INVENTION CERTIFICATES, SUBSTITUTIONS,REISSUES, REEXAMINATIONS, EXTENSIONS, REGISTRATIONS, UTILITY MODELS, SUPPLEMENTARY PROTECTION CERTIFICATES AND RENEWALS BASED ON ANYPATENT OR PATENT APPLICATION UNDER (A) OR (B), BUT NOT INCLUDING ANY RIGHTS THAT GIVE RISE TO REGULATORY EXCLUSIVITY PERIODS (OTHER THANsupplementary protection certificates, which will be treated as "Patents" hereunder)1.46"PATENT COSTS" MEANS THE REASONABLE, DOCUMENTED, OUT-OF-POCKET COSTS AND EXPENSES PAID TO OUTSIDE LEGALCOUNSEL, AND FILING AND MAINTENANCE EXPENSES, ACTUALLY AND REASONABLY INCURRED BY A PARTY IN PROSECUTING AND MAINTAINING PATENTS WITHrespect to Licensed Products and enforcing and defending them.1.47"PHASE 1 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(a) or corresponding foreign regulations.1.48"PHASE 2 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(b) or corresponding foreign regulations.***Confidential Treatment Requested10 1.49"PHASE 3 STUDY" MEANS A HUMAN CLINICAL TRIAL OF A LICENSED PRODUCT IN ANY COUNTRY THAT WOULD SATISFY THErequirements of 21 CFR 312.21(c) or corresponding foreign regulations.1.50"PRE-EXISTING RESTRICTIONS" MEANS, WITH RESPECT TO THE TARGET, THOSE CERTAIN PROSECUTION, ENFORCEMENT ANDDEFENSE RIGHTS GRANTED BY ARCTURUS OR ITS AFFILIATES TO A THIRD PARTY(IES) WITH RESPECT TO THE PATENTS PURSUANT TO THE bona fide writtenAGREEMENT(S) SET FORTH ON EXHIBIT 1.50 HERETO AS SUCH bona fide WRITTEN AGREEMENT(S) WERE IN EFFECT AS OF THE EFFECTIVE DATE OF THEDEVELOPMENT AND OPTION AGREEMENT. FOR CLARITY, THE EXERCISE OF SUCH FOREGOING RIGHTS BY A THIRD PARTY WITH RESPECT TO PATENTS THAT AREnot specific to the Target or Licensed Products shall be deemed a Pre-Existing Restriction.1.51"RARE DISEASE TARGET" MEANS A TARGET THAT ADDRESSES AT A FIRST PLACE AN INDICATION RELATED TO A LICENSED PRODUCTWITH AN INCIDENCE OF LESS THAN […***…] IN […***…] PEOPLE IN THE U.S. OR EU. THE INDICATION FOR WHICH THE FIRST IND OR CTAapplication will be filed will determine whether a Target is a Rare Disease Target.1.52"Receiving Party" has the meaning set forth in Section 8.1.1.53"REGULATORY APPROVAL" MEANS, WITH RESPECT TO A COUNTRY OR EXTRA-NATIONAL TERRITORY, ANY AND ALL APPROVALS(INCLUDING BLAS AND MAAS), LICENSES, REGISTRATIONS OR AUTHORIZATIONS OF ANY REGULATORY AUTHORITY NECESSARY IN ORDER TO COMMERCIALLYDISTRIBUTE, SELL OR MARKET A PRODUCT IN SUCH COUNTRY OR SOME OR ALL OF SUCH EXTRA-NATIONAL TERRITORY, INCLUDING SOLELY TO THE EXTENT REQUIREDas a condition to commercial sale to end users, any pricing or reimbursement approvals.1.54"REGULATORY AUTHORITY" MEANS ANY NATIONAL (E.G., THE FDA), SUPRA-NATIONAL (E.G., THE EMA), REGIONAL, STATE ORLOCAL REGULATORY AGENCY, DEPARTMENT, BUREAU, COMMISSION, COUNCIL OR OTHER GOVERNMENTAL AUTHORITY, IN ANY JURISDICTION IN THE WORLD,involved in the granting of Regulatory Approval.1.55"Royalty Reduction" has the meaning set forth in Section 4.3(b).1.56"Royalty Term" has the meaning set forth in Section 4.3(d).1.57"Sublicensee" MEANS ANY THIRD PARTY THAT IS GRANTED A SUBLICENSE AS PERMITTED BY SECTION 2.2, EITHER DIRECTLY BYCureVac or its Affiliates or indirectly by any other Sublicensee hereunder.1.58"SUBLICENSE INCOME" MEANS THE FEES AND OTHER PAYMENTS, INCLUDING UPFRONT PAYMENTS AS WELL AS DEVELOPMENT,REGULATORY MILESTONE PAYMENTS RECEIVED BY CUREVAC OR ITS AFFILIATES FROM A SUBLICENSEE, EXCLUDING: (A) ROYALTY PAYMENTS AND NET SALESMILESTONES; (B) REIMBURSEMENT OF COSTS AND EXPENSES, INCLUDING FOR PATENT PROSECUTION AND ENFORCEMENT AND (C) EQUITY OR PREMIUM ONEQUITY AND (D) LOANS OR LOANS FORGIVEN EITHER (I) AS A RESULT OF FINANCIAL DISTRESS OF THE BORROWER OR (II) THAT ARE NOT SPECIFIC TO THELicensed Product. 1.59"Target" means the Target identified in Appendix 1.59 hereto. The Target includes(a)UP TO N (N= […***…]) PROTEINS, INCLUDING ALL POSSIBLE COMBINATIONS RESULTING FROMremoving one of the N proteins (N minus […***…] proteins), together with all variants of such***Confidential Treatment Requested11 PROTEINS, INCLUDING THE WILD TYPE, NATURALLY OCCURRING VARIANTS, ENGINEERED VARIANTS WHEREIN MODIFICATIONS TO THE NATIVE AMINO ACIDSEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATED VERSIONS, DERIVATIVES OR FRAGMENTS), AND SPECIES HOMOLOGS, ORTHOLOGS THEREOF;provided, however, THAT ANY SUCH NATURALLY OCCURRING VARIANT, ENGINEERED VARIANT, OR SPECIES HOMOLOG OR ORTHOLOG POSSESSESsubstantially similar biological activity to the naturally occurring protein; and(B) […***…] ANTIGENS OF A GIVEN PATHOGEN, INCLUDING […***…] ANTIGEN AND ANY COMBINATION OF SUCH ANTIGENS, TOGETHERWITH ALL VARIANTS OF SUCH ANTIGENS, INCLUDING THE WILD TYPE, NATURALLY OCCURRING VARIANTS, ENGINEERED VARIANTS WHEREIN MODIFICATIONS TOTHE NATIVE AMINO ACID SEQUENCE HAVE BEEN INTRODUCED (FOR EXAMPLE, MUTATED VERSIONS, DERIVATIVES OR FRAGMENTS), AND SPECIES HOMOLOGS,ORTHOLOGS THEREOF, provided, however, THAT ANY SUCH NATURALLY OCCURRING VARIANT, ENGINEERED VARIANT, OR SPECIES HOMOLOG OR ORTHOLOGpossesses substantially similar biological activity to the naturally occurring antigen; and(C) A DNA TARGET, provided, however, THAT THE FIRST DNA TARGET FOR EACH DNA EDITING PROTEIN WOULD NOT COUNT AS ATARGET. EACH SUBSEQUENT DNA TARGET FOR THIS DNA EDITING PROTEIN WOULD COUNT AS A TARGET. FOR CLARITY, A DNA EDITING PROTEINwould be defined as a Target under (a) above and count as a single Target.IF A GIVEN PROTEIN, e.g., AN ANTIBODY OR ENZYME, COMPRISES SEPARATED AMINO ACID CHAINS WHICH MIGHT BE DELIVERED BYseparated mRNA Constructs, such proteins would be defined as one Target.1.60"Technology" means collectively Patents and Know-How.1.61"Term" has the meaning set forth in Section 10.1.1.62"Territory" means worldwide.1.63"Third Party" means any person or entity other than CureVac, Arcturus and their respective Affiliates.1.64"Third Party Claims" has the meaning set forth in Section 9.6(a). 1.65“Valid Claim” means a claim of(a)AN ISSUED AND UNEXPIRED PATENT (AS MAY BE EXTENDED THROUGH SUPPLEMENTARY PROTECTION CERTIFICATE ORpatent term extension) or(b)A PENDING PATENT APPLICATION, provided, however, THAT ONCE THE PRIORITY DATE OR EARLIEST FILING DATE TOWHICH THE PENDING PATENT APPLICATION REFERS IS MORE THAN SEVEN YEARS OLD, SUCH CLAIM SHALL NOT CONSTITUTE A VALID CLAIM FOR PURPOSES OFthis License Agreement anymore, unless and until a patent issues with such claim INCLUDED IN THE ARCTURUS TECHNOLOGY PATENTS, WHICH CLAIM HAS NOT BEEN REVOKED, HELD INVALID OR UNENFORCEABLE BY A PATENT OFFICE, COURTOR OTHER GOVERNMENTAL AGENCY OF COMPETENT JURISDICTION IN A FINAL AND NON-APPEALABLE DECISION (OR DECISION FROM WHICH NO APPEAL WASTAKEN WITHIN THE ALLOWABLE TIME PERIOD) AND HAS NOT BEEN DISCLAIMED, DENIED, ABANDONED OR ADMITTED TO BE INVALID OR UNENFORCEABLEthrough reissue, re-examination or disclaimer or otherwise. ***Confidential Treatment Requested12 2.License Grants; Technology Transfer.2.1LICENSES BY ARCTURUS. SUBJECT TO THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT, ARCTURUS HEREBY GRANTS TOCUREVAC AN EXCLUSIVE LICENSE, WITH THE RIGHT TO SUBLICENSE IN MULTIPLE TIERS UNDER THE ARCTURUS TECHNOLOGY PATENTS AND THE ARCTURUSKNOW-HOW, IN EACH CASE SOLELY TO DEVELOP, HAVE DEVELOPED, MAKE, HAVE MADE, USE AND HAVE USED, SELL, OFFER FOR SALE, HAVE SOLD ANDimport and have imported Licensed Products in the Field of Use in the Territory. 2.2Sublicensing Rights.(a)CureVac Sublicenses. THE LICENSES GRANTED IN SECTION 2.1 MAY BE SUBLICENSED (WITH THE RIGHT TOSUBLICENSE THROUGH MULTIPLE TIERS), IN FULL OR IN PART, BY CUREVAC, ITS AFFILIATES OR SUBLICENSEES TO CUREVAC'S AFFILIATES ANDThird Parties provided, that for any sublicense: (i)EACH SUBLICENSE WILL BE IN WRITING (provided, however, THAT NOT EACH SUBLICENSE TO AFFILIATES MUST BE INWRITING) AND ON TERMS CONSISTENT WITH AND SUBJECT TO THE TERMS OF THIS LICENSE AGREEMENT, INCLUDING BUTNOT LIMITED TO THE LIMITATIONS ON PATENT PROSECUTION, ENFORCEMENT AND DEFENSE RIGHTS OF SUCH SUBLICENSEEas set forth in Sections 6.1(d) and 7.2(e); (ii)CUREVAC WILL BE RESPONSIBLE FOR ANY AND ALL OBLIGATIONS OF SUCH SUBLICENSEE (INCLUDING AFFILIATES ANDSublicensees) as if such Sublicensee were CureVac hereunder; (iii)CUREVAC PROVIDE TO ARCTURUS A COPY OF SUCH SUBLICENSE AGREEMENT WITHIN THIRTY (30) DAYS OFEXECUTION (WHICH COPY MAY BE REDACTED FOR TERMS THAT ARE NOT OTHERWISE REQUIRED TO CONFIRMconformance with the terms of this License Agreement); and (iv)ANY SUBLICENSE GRANTED BY CUREVAC (AND ANY FURTHER SUBLICENSES) TO ANY RIGHTS LICENSED TO ITHEREUNDER SHALL TERMINATE IMMEDIATELY UPON THE TERMINATION OF THIS LICENSE AGREEMENT, PROVIDED THATFOR SUBLICENSE TO A THIRD PARTY, SUCH SUBLICENSED RIGHTS SHALL NOT TERMINATE IF, AS OF THE EFFECTIVE DATE OFSUCH TERMINATION PURSUANT TO SECTIONS 10.2, 10.3(A) OR 10.4, SUCH SUBLICENSEE IS NOT IN MATERIAL DEFAULTOF ITS OBLIGATIONS UNDER ITS SUBLICENSE AGREEMENT, AND WITHIN […***…] DAYS OF SUCH TERMINATION andTHE DISCLOSURE OF THIS LICENSE AGREEMENT TO THE SUBLICENSEE, THE SUBLICENSEE AGREES IN WRITING TO BEBOUND DIRECTLY TO ARCTURUS UNDER A LICENSE AGREEMENT SUBSTANTIALLY SIMILAR TO THIS LICENSE AGREEMENTwith respect to the rights sublicensed hereunder, substituting such Sublicensee for CureVac.(b)Subcontractors. For clarity purposes, CureVac is entitled to engage contract research organizations andcontract manufacturing organizations for the development and manufacture of Licensed Products on behalf of CureVac. Tothe extent such contract organizations require a license to perform such subcontracted activities under applicable Laws,CureVac is entitled to grant a limited license solely***Confidential Treatment Requested13 TO PERFORM THE WORK FOR WHICH THE SUBCONTRACTOR IS ENGAGED, WITHOUT AN OBLIGATION TO MEET THE CONDITIONS OF SECTION 2.2 (A)(iii).(c)Technology Transfer. FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE, ARCTURUS WILL USE DILIGENTEFFORTS TO TRANSFER THE FORMULATION PROCESS FOR THE LICENSED PRODUCTS THAT ARE INTENDED TO EXPRESS THE TARGET TO CUREVAC OR AREPUTABLE AND COMPETENT GMP MANUFACTURER SELECTED BY CUREVAC AND REASONABLY ACCEPTABLE TO ARCTURUS. UPON WRITTENREQUEST BY CUREVAC, ARCTURUS WILL CONDUCT A TECHNOLOGY TRANSFER TO CUREVAC AND/OR ITS DESIGNEE(S). ARCTURUS WILL MAKE ITSPERSONNEL AVAILABLE WITHOUT CHARGE FOR A TOTAL OF […***…] HOURS DURING NORMAL WORKING HOURS FOR SUCH TRANSFER, AND FORADDITIONAL HOURS IN EXCESS OF […***…] UP TO A TOTAL OF […***…] HOURS TO BE INVOICED MONTHLY AT THE THEN CURRENT FTECOST. SUCH DESIGNEE(S) MAY BE AN AFFILIATE, SUBLICENSEE OR THIRD PARTY MANUFACTURERS SELECTED BY CUREVAC AND REASONABLYACCEPTABLE TO ARCTURUS, AND WHICH THIRD PARTY MANUFACTURERS MAY ALSO BE A BACKUP MANUFACTURER OR A SECOND MANUFACTUREROF LICENSED PRODUCTS AS REQUIRED FOR THE APPLICABLE TRANSFEREE OF THE THEN-CURRENT PROCESS. CUREVAC SHALL REIMBURSE ARCTURUSfor the reasonable cost (including internal FTE Cost) incurred to conduct such technology transfer as specified above. 2.3UPDATES TO APPENDIX 1.4; EXCLUSION OF CERTAIN PATENTS. ARCTURUS SHALL NOTIFY CUREVAC AT LEAST ONCE EVERY […***…] MONTHS OF PATENTS THAT ARE ADDED TO THE ARCTURUS TECHNOLOGY FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE OR ANY PATENTSTHAT HAVE BEEN ABANDONED OR DISCONTINUED IN ACCORDANCE WITH THE TERMS OF THIS LICENSE AGREEMENT. APPENDIX 1.4 SHALL BE DEEMEDAUTOMATICALLY UPDATED TO INCLUDE ANY SUCH ADDED PATENTS, PROVIDED THAT WITH WRITTEN NOTICE TO ARCTURUS, CUREVAC MAY ELECT UPON […***…] DAYS’ IRREVOCABLE WRITTEN NOTICE TO ARCTURUS TO EXCLUDE ANY PARTICULAR ARCTURUS TECHNOLOGY PATENTS. FOLLOWING ANY SUCHWRITTEN NOTICE BY CUREVAC, UPON THE EXPIRATION OF THE NOTICE PERIOD THE IDENTIFIED ARCTURUS TECHNOLOGY PATENTS THAT CUREVAC SPECIFIESFOR EXCLUSION FROM THIS LICENSE AGREEMENT WILL NO LONGER BE LICENSED TO CUREVAC HEREUNDER, AND CUREVAC SHALL NOT HAVE ANY RIGHTS(INCLUDING RIGHTS PURSUANT TO THIS AGREEMENT) UNDER SUCH ARCTURUS TECHNOLOGY PATENTS NOR OBLIGATIONS HEREUNDER WITH RESPECT TO SUCHARCTURUS TECHNOLOGY PATENTS. FOR CLARITY, IN THE EVENT THAT THE LICENSED PRODUCT IS SUBSEQUENTLY DETERMINED TO BE COVERED OR OTHERWISEINFRINGE A VALID CLAIM OF ANY EXCLUDED PATENT HEREUNDER, THEN SUCH INFRINGEMENT SHALL BE DEEMED TO BE A MATERIAL BREACH OF THISLicense Agreement by CureVac.2.4DOCUMENTS AND DECLARATIONS. AT CUREVAC’S REASONABLE REQUEST AND COST AND EXPENSE, ARCTURUS SHALL EXECUTE ALLDOCUMENTS, DELIVER DECLARATIONS REGARDING THE LICENSES GRANTED HEREUNDER, AND ARCTURUS SHALL REASONABLY COOPERATE WITH CUREVAC TO THEEXTENT SUCH DOCUMENTS, DECLARATIONS AND/OR COOPERATION ARE REQUIRED TO GIVE EFFECT TO THIS LICENSE AGREEMENT AND/OR FOR THE RECORDINGOR REGISTRATION OF THE LICENSES GRANTED HEREUNDER AT THE VARIOUS PATENT OFFICES IN THE TERRITORY FOR THE BENEFIT OF CUREVAC, ITS AFFILIATES ORtheir Sublicensees.2.5DILIGENCE; REPORTING. CUREVAC SHALL USE DILIGENT EFFORTS TO DEVELOP, MANUFACTURE AND COMMERCIALIZE LICENSEDPRODUCTS IN THE FIELD OF USE IN THE TERRITORY, AND SHALL KEEP ARCTURUS REASONABLY INFORMED AS TO THE PROGRESS AND RESULTS OF ITS AND ITSAFFILIATES’ AND SUBLICENSEES’ DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THE LICENSED PRODUCT. WITHOUT LIMITING THEFOREGOING, CUREVAC SHALL PROVIDE ARCTURUS WITH A WRITTEN REPORT OF THE DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THELICENSED PRODUCT WITHIN […***…] DAYS AFTER THE END OF EACH CALENDAR YEAR, AND SHALL PROMPTLY RESPOND TO ARCTURUS REASONABLEquestions or requests for additional information relating to such activities.***Confidential Treatment Requested14 2.6Compliance. CUREVAC SHALL AT ALL TIMES COMPLY WITH ALL APPLICABLE LAWS (INCLUDING ANTI-BRIBERY LAWS) IN THEDEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF THE LICENSED PRODUCT AND THE PERFORMANCE OF ITS OTHER OBLIGATIONS UNDER THISLICENSE AGREEMENT, AND SHALL NOT USE ANY EMPLOYEE OR CONSULTANT WHO HAS BEEN DEBARRED BY ANY REGULATORY AUTHORITY OR, TOCureVac’s knowledge, is the subject of debarment proceedings by a regulatory authority. 2.7Updates. ARCTURUS SHALL INFORM CUREVAC WITHIN […***…] BUSINESS DAYS OF INTELLECTUAL PROPERTY MATTERSAFFECTING THE ARCTURUS TECHNOLOGY PATENTS AND THE ARCTURUS KNOW-HOW OF WHICH IT BECOMES AWARE THAT WOULD REASONABLY BEconsidered to negatively impact the rights of CureVac pursuant to this Agreement.2.8Material. CUREVAC SHALL HAVE THE RIGHT TO RETAIN MATERIAL PROVIDED BY ARCTURUS UNDER THE DEVELOPMENT ANDOPTION AGREEMENT, TO THE EXTENT SUCH MATERIAL IS NECESSARY OR USEFUL FOR THE EXERCISE OF A CUREVAC'S RIGHTS OR OBLIGATIONS UNDER THISLICENSE AGREEMENT. FOLLOWING THE LICENSE AGREEMENT EFFECTIVE DATE, ONLY THE PROVISIONS OF THIS LICENSE AGREEMENT, BUT NOT OF THEDevelopment and Option Agreement, shall apply in relation to such Material.3.License Limitations. 3.1Reserved Rights. NO LICENSES OR OTHER RIGHTS ARE GRANTED BY ARCTURUS HEREUNDER TO USE ANY TRADEMARK, TRADE NAME,TRADE DRESS OR SERVICE MARK OWNED OR OTHERWISE CONTROLLED BY ARCTURUS OR ANY OF ITS AFFILIATES. ALL LICENSES AND OTHER RIGHTS ARE OR SHALLBE GRANTED ONLY AS EXPRESSLY PROVIDED IN THIS LICENSE AGREEMENT, AND NO OTHER LICENSES OR OTHER RIGHTS IS OR SHALL BE CREATED OR GRANTEDBY EITHER PARTY HEREUNDER BY IMPLICATION, ESTOPPEL OR OTHERWISE. CUREVAC SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS AFFILIATES ORSUBLICENSEES TO, PRACTICE OR USE ANY ARCTURUS TECHNOLOGY OUTSIDE OF THE SCOPE OF THE LICENSE GRANTED TO IT UNDER SECTION 2.1 OR INCONTRAVENTION OF SECTION 3.1. ARCTURUS RETAINS THE EXCLUSIVE RIGHT TO PRACTICE, LICENSE AND OTHERWISE EXPLOIT THE ARCTURUS TECHNOLOGYOUTSIDE THE SCOPE OF THE LICENSES GRANTED TO CUREVAC UNDER SECTION 2.1 NOTWITHSTANDING THE EXCLUSIVE LICENSE GRANTED TO CUREVACUNDER SECTION 2.1, ARCTURUS RETAINS THE RIGHT UNDER THE ARCTURUS TECHNOLOGY TO PERFORM, OR HAVE PERFORMED, ARCTURUS’ OBLIGATIONSunder this License Agreement3.2OTHER LICENSES. ARCTURUS ACKNOWLEDGES THE RIGHTS GRANTED TO CUREVAC PURSUANT TO THIS AGREEMENT AND SHALL NOTGRANT LICENSES UNDER ARCTURUS TECHNOLOGY TO THIRD PARTIES THAT ARE IN CONFLICT WITH THIS LICENSE AGREEMENT IT BEING UNDERSTOOD THAT ALICENSE TO ENABLE OR IMPLEMENT ANY PRE-EXISTING RESTRICTION WITH RESPECT TO THE TARGET SHALL NOT BE DEEMED A CONFLICT HEREUNDER. INADDITION, ARCTURUS SHALL USE DILIGENT EFFORTS TO UNDERTAKE THAT ANY LICENSES OBTAINED FROM THIRD PARTIES WILL BE SUBLICENSABLE TOCUREVAC, TO THE EXTENT REQUIRED OR USEFUL FOR THE LICENSED PRODUCT, PROVIDED THAT CUREVAC SHALL BE RESPONSIBLE FOR AN ALLOCABLE PORTIONOF THE PAYMENT AND OBLIGATIONS THAT MAY BE REQUIRED IN ORDER TO OBTAIN RIGHTS WITH RESPECT TO THE LICENSED PRODUCT PURSUANT TO SUCHThird Party agreement. 4.Payments and Royalties.4.1MILESTONE PAYMENTS. CUREVAC WILL MAKE MILESTONE PAYMENTS (EACH, A "MILESTONE PAYMENT") TO ARCTURUS UPONTHE FIRST OCCURRENCE OF EACH OF THE MILESTONE EVENTS (EACH, A "Milestone Event") BY LICENSED PRODUCT AS SET FORTH BELOW IN THIS SECTION4.1. CUREVAC WILL NOTIFY ARCTURUS OF THE ACHIEVEMENT OF EACH MILESTONE EVENT (WHETHER ACHIEVED BY CUREVAC, ITS AFFILIATES ORSublicensees) within (i) […***…] Business Days of such***Confidential Treatment Requested15 ACHIEVEMENT, IF THE MILESTONE EVENT IS ACHIEVED BY CUREVAC OR ITS AFFILIATES, OR (II) […***…] BUSINESS DAYS OF THE RECEIPT BYCureVac of a notification about the achievement, if the Milestone Event is achieved by a Sublicensee. EACH MILESTONE PAYMENT WILL BE NON-REFUNDABLE, NON-CREDITABLE AND PAYABLE TO ARCTURUS BY CUREVAC WITHIN […***…] DAYS OFDELIVERY OF AN INVOICE FROM ARCTURUS FOLLOWING NOTIFICATION FROM CUREVAC PURSUANT TO THE PRECEDING PARAGRAPH, PROVIDED THAT IF NOSUCH NOTIFICATION IS TIMELY PROVIDED BY CUREVAC, THE MILESTONE PAYMENT SHALL BE DEEMED PAYABLE […***…] DAYS AFTER (A) THEACHIEVEMENT OF SUCH MILESTONE EVENT, IF THE MILESTONE EVENT IS ACHIEVED BY CUREVAC OR ITS AFFILIATES, OR (B) AFTER THE RECEIPT BYCUREVAC OF THE NOTIFICATION FROM CUREVAC PURSUANT TO SECTION 4.1(II). FOR CLARITY, THE TERM “NON-REFUNDABLE” IS NOT INTENDED TO LIMITeither Party’s rights to pursue damages arising from a breach of this Agreement.IF ONE OR MORE OF THE MILESTONE EVENTS SET FORTH BELOW ARE NOT ACHIEVED OR NOT REQUIRED FOR ANY REASON, THE PAYMENT FOR SUCH SKIPPEDMilestone Event will be due at the same time as the payment for the next achieved Milestone Event. For clarity: […***…].FOR CLARITY, TO THE EXTENT THAT A LICENSED PRODUCT IS INITIATED AGAINST A RARE DISEASE TARGET AND LATER EXPANDED TO A NON-RARE DISEASETARGET, THEN ANY AND ALL MILESTONE PAYMENTS NOT PREVIOUSLY MADE SHALL BE DUE AND PAYABLE UPON THE ACHIEVEMENT OF THE NEXT NON-RAREDisease Milestone (e.g., […***……***…]).Milestone EventMilestone Payment Rare Disease Targets […***…][…***…][…***…][…***…][…***…][…***…][…***… ][…***…][…***…][…***…]***Confidential Treatment Requested16 Milestone EventMilestone Payment […***……***…][…***…]Non-rare Disease Targets […***… ][…***…][…***…][…***…][…***…][…***…][…***… ][…***…][…***…][…***…][…***…][…***…] 4.2SUBLICENSING REVENUES.IF WITHIN TWENTY-FOUR (24) MONTHS AFTER THE LICENSE AGREEMENT EFFECTIVE DATECUREVAC GRANTS A SUBLICENSE TO A THIRD PARTY UNDER THIS LICENSE AGREEMENT FOR THE DEVELOPMENT AND COMMERCIALIZATION OF LICENSEDPRODUCTS, THEN CUREVAC WILL PAY TO ARCTURUS […***…] OF ALL SUBLICENSE INCOME ACTUALLY RECEIVED BY CUREVAC, TO THE EXTENT THESUBLICENSE INCOME EXCEEDS THE OPTION EXERCISE FEE PAID BY CUREVAC UNDER THE DEVELOPMENT AND OPTION AGREEMENT TO EXERCISE THEOPTION FOR THIS LICENSE AGREEMENT AND THE MILESTONE PAYMENTS PAID BY CUREVAC UNDER THIS LICENSE AGREEMENT. THE PAYMENTS WILLBE MADE WITHIN […***…] DAYS AFTER RECEIPT BY CUREVAC FROM THE THIRD PARTY. FOR PURPOSES OF CLARITY, IF CUREVAC GRANTS A SUBLICENSETO THIRD PARTIES LATER THAN […***…] MONTHS AFTER THE LICENSE AGREEMENT EFFECTIVE DATE, CUREVAC WILL NOT OWE ANY SUBLICENSINGIncome to Arcturus.4.3Royalties.(a)Royalty. SUBJECT TO THE REMAINDER OF THIS SECTION 4.3, ON A COUNTRY-BY-COUNTRY BASIS AND A LICENSEDPRODUCT-BY-LICENSED PRODUCT BASIS, CUREVAC WILL PAY TO ARCTURUS (I) A ROYALTY OF […***…] OF NET SALES OF THE LICENSEDPRODUCT (II) AS WELL AS OF ANY NET SALES MILESTONES (WITHOUT OFFSET FOR ANY REDUCTIONS PURSUANT TO SECTION 4.3(B)) FOR SUCHLicensed Product received from the Sublicensee.(b)Third Party Payments and Royalty Reductions. IF CUREVAC OR ITS AFFILIATE OR SUBLICENSEE, IN ITSREASONABLE JUDGMENT, CONSIDERS IT NECESSARY OR USEFUL TO OBTAIN A LICENSE FROM ANY THIRD PARTY UNDER ANY LMD TECHNOLOGYTHAT COVERS A LICENSED PRODUCT IN ORDER TO DEVELOP, MANUFACTURE OR COMMERCIALIZE SUCH LICENSED PRODUCT, THE AMOUNT OFCUREVAC’S ROYALTY OBLIGATIONS UNDER SECTIONS 4.3(A) WILL BE REDUCED BY […***…] OF THE AMOUNT OF THE UPFRONT, MILESTONEAND ROYALTY PAYMENTS MADE TO SUCH THIRD PARTY ON ACCOUNT OF THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF SUCHLICENSED PRODUCT ("ROYALTY REDUCTIONS"), provided, however, THAT ANY ROYALTY REDUCTION SHALL NOT RESULT IN LESS THAN THEminimum royalty due to Arcturus under Section (c) below.***Confidential Treatment Requested17 (c)Minimum Royalty. IN NO EVENT WILL THE ROYALTY PAYABLE BY CUREVAC TO ARCTURUS FOR ANY LICENSEDPRODUCT BE LESS THAN (I) […***…] IF THE REDUCTION IN SUBSECTION (E) DOES NOT APPLY; OR (II) […***…] IF THE REDUCTION INsubsection (e) also applies.(d)Term. The royalty term ("Royalty Term") SHALL EXPIRE ON A COUNTRY-BY-COUNTRY AND LICENSED PRODUCT-BY-LICENSED PRODUCT BASIS, ON THE LAST TO OCCUR OF (I) EXPIRATION OF THE LAST TO EXPIRE VALID CLAIM IN THE ARCTURUS TECHNOLOGYTHAT, BUT FOR THE LICENSE DESCRIBED HEREIN FROM ARCTURUS TO CUREVAC FOR THE APPLICABLE LICENSED PRODUCT, IS INFRINGED BY THEMAKING, USING OR SALE OF SUCH LICENSED PRODUCT, (II) EXPIRATION OF ANY PERIOD OF DATA EXCLUSIVITY, MARKET EXCLUSIVITY ORSUPPLEMENTAL PROTECTION CERTIFICATES COVERING THE LICENSED PRODUCT IN SUCH COUNTRY; AND (III) […***…] YEARS AFTER FIRSTCOMMERCIAL SALE OF LICENSED PRODUCT IN SUCH COUNTRY. FOR THE AVOIDANCE OF DOUBT, UPON EXHAUSTION OF THE OBLIGATION TO PAYROYALTIES TO ARCTURUS AS SET FORTH ABOVE THE CONTINUED USE OF ARCTURUS KNOW-HOW COMPRISED IN THE ARCTURUS TECHNOLOGYFOR THE DEVELOPMENT, MANUFACTURE AND/OR SALE OF THe LICENSED PRODUCT SHALL NOT, IN AND OF ITSELF, OBLIGATE CUREVAC TO PAYFURTHER ROYALTIES TO ARCTURUS. THEREAFTER, CUREVAC'S LICENSE UNDER SECTION 2.1 WILL BECOME IRREVOCABLE, PERPETUAL, FULLY PAID-up and royalty-free on a country-by-country and Licensed Product-by-Licensed Product basis.(e)Know-How Royalty. On a country-by-country, and a Licensed -Product-by-Licensed Product basis, in theEVENT THAT DURING THE ROYALTY TERM A LICENSED PRODUCT IS NOT COVERED BY A VALID CLAIM, THE ROYALTY OTHERWISE PAYABLE FORsuch Licensed Product, after the Royalty Reductions above, will be reduced by […***…].4.4Payment Terms.(a)Manner of Payment. ALL PAYMENTS TO BE MADE BY CUREVAC HEREUNDER WILL BE MADE IN U.S. DOLLARS BYwire transfer to such bank account as Arcturus may designate.(b)Records and Audits. CUREVAC SHALL KEEP, AND SHALL CAUSE EACH OF ITS AFFILIATES AND SUBLICENSEES, ASAPPLICABLE, TO KEEP ADEQUATE BOOKS AND RECORDS OF ACCOUNTING FOR THE PURPOSE OF CALCULATING ALL ROYALTIES AND OTHER AMOUNTSPAYABLE TO ARCTURUS HEREUNDER. FOR THE […***…] YEARS NEXT FOLLOWING THE END OF THE CALENDAR YEAR TO WHICH EACH SHALLPERTAIN, SUCH BOOKS AND RECORDS OF ACCOUNTING (INCLUDING THOSE OF CUREVAC’S AFFILIATES AND SUBLICENSEES) SHALL BE KEPT ATEACH OF THEIR PRINCIPAL PLACES OF BUSINESS AND SHALL BE OPEN FOR INSPECTION AT REASONABLE TIMES AND UPON REASONABLE NOTICE BYAN INDEPENDENT CERTIFIED ACCOUNTANT SELECTED BY ARCTURUS, AND WHICH IS REASONABLY ACCEPTABLE TO CUREVAC, FOR THE SOLEPURPOSE OF INSPECTING THE NET SALES CALCULATIONS AND SUPPORTING DETAILS TO THE EXTENT REASONABLY NECESSARY AND RESULTINGROYALTIES AND OTHER AMOUNTS DUE TO ARCTURUS UNDER THIS LICENSE AGREEMENT. IN NO EVENT SHALL SUCH INSPECTIONS BE CONDUCTEDHEREUNDER MORE FREQUENTLY THAN ONCE EVERY […***…] MONTHS. SUCH ACCOUNTANT MUST HAVE EXECUTED AND DELIVERED TOCUREVAC AND ITS AFFILIATES, A CONFIDENTIALITY AGREEMENT AS REASONABLY REQUESTED BY CUREVAC, WHICH SHALL INCLUDE PROVISIONSLIMITING SUCH ACCOUNTANT’S DISCLOSURE TO ARCTURUS TO ONLY THE RESULTS AND BASIS FOR SUCH RESULTS OF SUCH INSPECTION. THE RESULTSOF SUCH INSPECTION, IF ANY, SHALL BE BINDING ON BOTH PARTIES. ANY UNDERPAYMENTS PLUS INTEREST FROM THE ORIGINAL DUE DATE SHALLbe paid by CureVac within […***…] days***Confidential Treatment Requested18 OF NOTIFICATION OF THE RESULTS OF SUCH INSPECTION. ANY OVERPAYMENTS SHALL BE FULLY CREDITABLE AGAINST AMOUNTS PAYABLE INSUBSEQUENT PAYMENT PERIODS. ARCTURUS SHALL PAY FOR SUCH INSPECTIONS, EXCEPT THAT IN THE EVENT THERE IS ANY UPWARDADJUSTMENT IN AGGREGATE ROYALTIES AND OTHER AMOUNTS PAYABLE FOR ANY CALENDAR YEAR SHOWN BY SUCH INSPECTION OF MORE THAN[…***…] of the amount paid, CureVac shall reimburse Arcturus for any reasonable out-of-pocket costs of such accountant.(c)Reports and Royalty Payments. FOR AS LONG AS ROYALTIES ARE DUE UNDER SECTION 4.3, CUREVAC SHALL FURNISHto Arcturus written reports. (i)REPORTS SHALL BE PROVIDED WITHIN […***…] DAYS OF (1) THE END OF THE CALENDAR QUARTER IF NET SALES AREGENERATED BY CUREVAC AND ITS AFFILIATES, AND (2) THE RECEIPT OF CORRESPONDING INFORMATION (WHICH MAY BEESTIMATED) FROM SUBLICENSEES BUT IN ANY EVENT WITHIN […***…] DAYS OF THE END OF THE CALENDAR QUARTER WITHrespect to Net Sales generated by such Sublicensees. (ii)ROYALTY PAYMENTS FOR EACH CALENDAR QUARTER SHALL BE DUE WITHIN […***…] BUSINESS DAYS OF DELIVERY OF ANINVOICE FROM ARCTURUS FOLLOWING SUBMISSION OF A ROYALTY REPORT FROM CUREVAC, BUT ONLY SUBJECT TO THE PRIORRECEIPT BY CUREVAC OF THE CORRESPONDING ROYALTY PAYMENT FROM THE SUBLICENSEE, IF APPLICABLE; HOWEVER SUCHROYALTY PAYMENTS DUE TO ARCTURUS SHALL NOT BE REDUCED BY DEDUCTIONS WHICH EXCEED THOSE COVERED BY THE NETSales definition according to Section 1.43. (iii)The report shall include, at a minimum, the following information for the applicable Calendar Quarter for eachLICENSED PRODUCT IF NET SALES ARE GENERATED BY CUREVAC AND ITS AFFILIATES: (I) THE GROSS SALES BY COUNTRYREASONABLY REQUIRED FOR THE CALCULATION OF ROYALTY PAYMENTS DUE ACCORDING TO THIS AGREEMENT, (II) THECALCULATION IN REASONABLE DETAIL OF THE NET SALES FROM SUCH GROSS SALES AMOUNTS, INCLUDING THE DEDUCTIONSPURSUANT TO THE DEFINITION OF NET SALES AND THE AMOUNTS OF ANY CREDITS OR REDUCTIONS PERMITTED BY SECTION 4.2;and (iii) the computations for any Arcturus currency conversions pursuant to subsection (d) below. (iv)CUREVAC WILL REQUIRE EACH SUBLICENSEE TO SHARE WITH ARCTURUS THE INFORMATION LISTED IN THE FOREGOING CLAUSESAS IT RELATES TO NET SALES MADE BY SUCH SUBLICENSEE, AND TO THE EXTENT PRACTICABLE, WILL INCLUDE SUCHSUBLICENSEE INFORMATION IN SUCH REPORT; PROVIDED THAT THE LEVEL OF DETAIL WITH RESPECT TO THE ITEMS SUBJECT TOREPORT PURSUANT TO SECTION 4.4(C)(III) SHALL BE LIMITED TO THE INFORMATION THAT CUREVAC ACTUALLY RECEIVES FROMANY SUCH SUBLICENSEE. ALL SUCH REPORTS SHALL BE CONSIDERED THE CONFIDENTIAL INFORMATION OF CUREVAC, SUBJECTto Section 4.4(b). (d)Currency Exchange. WITH RESPECT TO NET SALES INVOICED IN U.S. DOLLARS, THE NET SALES AND THE AMOUNTSDUE TO ARCTURUS HEREUNDER WILL BE EXPRESSED IN U.S. DOLLARS. WITH RESPECT TO NET SALES INVOICED IN A CURRENCY OTHER THANU.S. DOLLARS, PAYMENTS WILL BE CALCULATED BASED ON THE AVERAGE OF THE CLOSING EXCHANGE RATES REPORTED BY THE WALL STREETJOURNAL (http://quotes.wsj.com/fx/EURUSD), OR SUCH OTHER SOURCE AS THE PARTIES MAY AGREE IN WRITING, OF THE APPLICABLEreporting period for the payment due.***Confidential Treatment Requested19 (e)Taxes. CUREVAC MAY WITHHOLD FROM PAYMENTS DUE TO ARCTURUS AMOUNTS FOR PAYMENT OF ANY WITHHOLDINGTAX THAT IS REQUIRED BY LAW TO BE PAID TO ANY TAXING AUTHORITY WITH RESPECT TO SUCH PAYMENTS. CUREVAC WILL PROVIDE ARCTURUSALL RELEVANT DOCUMENTS AND CORRESPONDENCE, AND WILL ALSO PROVIDE TO ARCTURUS ANY OTHER COOPERATION OR ASSISTANCE ON AREASONABLE BASIS AS MAY BE NECESSARY TO ENABLE ARCTURUS TO CLAIM EXEMPTION FROM SUCH WITHHOLDING TAXES AND TO RECEIVE AREFUND OF SUCH WITHHOLDING TAX OR CLAIM A FOREIGN TAX CREDIT. CUREVAC WILL GIVE PROPER EVIDENCE FROM TIME TO TIME AS TO THEPAYMENT OF ANY SUCH TAX. THE PARTIES WILL COOPERATE WITH EACH OTHER IN SEEKING DEDUCTIONS UNDER ANY DOUBLE TAXATION OROTHER SIMILAR TREATY OR AGREEMENT FROM TIME TO TIME IN FORCE. CUREVAC SHALL USE DILIGENT EFFORTS TO MINIMIZE WITHHOLDINGTAXES. IN THE EVENT THAT ANY TAX DEDUCTION OR WITHHOLDING OBLIGATION ARISES OR INCREASES AS A DIRECT RESULT OF ANYREINCORPORATION, REDOMICILIATION, CHANGE IN SOURCE OF PAYMENTS UNDER THIS AGREEMENT OR OTHER SIMILAR CORPORATE STRUCTURINGACTIONS UNDERTAKEN BY CUREVAC FROM AND AFTER THE LICENSE AGREEMENT EFFECTIVE DATE, THEN CUREVAC SHALL INCREASE THEPAYMENT (IN RESPECT OF WHICH SUCH DEDUCTION OR WITHHOLDING OF TAX IS REQUIRED TO BE MADE) TO ENSURE THAT ARCTURUS RECEIVESAN AMOUNT EQUAL TO THE AMOUNT THAT IT WOULD HAVE RECEIVED HAD NO SUCH ACTION OCCURRED. APART FROM ANY SUCH PERMITTEDWITHHOLDING AND THOSE DEDUCTIONS EXPRESSLY INCLUDED IN THE DEFINITION OF NET SALES, THE AMOUNTS PAYABLE BY CUREVAC TOARCTURUS HEREUNDER WILL NOT BE REDUCED ON ACCOUNT OF ANY TAXES, CHARGES, DUTIES OR OTHER LEVIES. EACH PARTY SHALL BE SOLELYRESPONSIBLE FOR THE PAYMENT OF ALL TAXES IMPOSED ON ITS SHARE OF INCOME ARISING DIRECTLY OR INDIRECTLY FROM THE ACTIVITIES OF THEParties under this License Agreement.(f)Blocked Payments. In the event that, by reason of applicable law in any country, it becomes impossible orILLEGAL FOR CUREVAC OR ITS AFFILIATES OR SUBLICENSEES TO TRANSFER, OR HAVE TRANSFERRED ON ITS BEHALF, PAYMENTS OWED TO ARCTURUSHEREUNDER, CUREVAC WILL PROMPTLY NOTIFY ARCTURUS OF THE CONDITIONS PREVENTING SUCH TRANSFER AND SUCH PAYMENTS WILL BEDEPOSITED IN LOCAL CURRENCY IN THE RELEVANT COUNTRY TO THE CREDIT OF ARCTURUS IN A RECOGNIZED BANKING INSTITUTION PROPOSED BYARCTURUS AND REASONABLY ACCEPTABLE TO CUREVAC OR, IF NONE IS PROPOSED BY ARCTURUS WITHIN A PERIOD OF […***…] DAYS, IN ARECOGNIZED BANKING INSTITUTION SELECTED BY CUREVAC OR ITS AFFILIATE OR SUBLICENSEE, AS THE CASE MAY BE, AND IDENTIFIED IN Awritten notice given to Arcturus.(g)Interest Due. IF ANY PAYMENT DUE TO ARCTURUS UNDER THIS LICENSE AGREEMENT IS OVERDUE (AND IS NOTSUBJECT TO A GOOD FAITH DISPUTE), THEN CUREVAC WILL PAY INTEREST THEREON (BEFORE AND AFTER ANY JUDGMENT) AT AN ANNUAL RATE OFTHE LESSER OF […***…] ABOVE THE PRIME RATE AS REPORTED IN THE WALL STREET JOURNAL, EASTERN EDITION, AND THE MAXIMUM RATEPERMITTED BY APPLICABLE LAW, SUCH INTEREST TO RUN FROM THE DATE UPON WHICH PAYMENT OF SUCH SUM BECAME DUE UNTIL PAYMENTthereof in full together with such interest.(h)Mutual Convenience of the Parties. THE ROYALTY AND OTHER PAYMENT OBLIGATIONS SET FORTH HEREUNDER HAVEBEEN AGREED TO BY THE PARTIES FOR THE PURPOSE OF REFLECTING AND ADVANCING THEIR MUTUAL CONVENIENCE, INCLUDING THE EASE OFcalculating and paying royalties and other amounts to Arcturus.5.Ownership and Inventorship of IP.5.1Solely-Owned IP. As between the Parties and subject to Section 5.3, each Party will own and retain all right, titleand interest in and to any and all Know-How and Patents***Confidential Treatment Requested20 ARISING THEREFROM THAT ARE DISCOVERED, CREATED, CONCEIVED, DEVELOPED OR REDUCED TO PRACTICE UNDER OR IN CONNECTION WITH THIS LICENSEAGREEMENT (THE “Inventions”) SOLELY BY OR ON BEHALF OF SUCH PARTY. SUBJECT TO THE LICENSES HEREUNDER AND THE OTHER TERMS ANDCONDITIONS OF THIS LICENSE AGREEMENT OR ANY OTHER AGREEMENT BETWEEN THE PARTIES, EACH PARTY WILL BE SOLELY RESPONSIBLE FOR THEprosecution and maintenance, and the enforcement and defense, of its solely-owned Patents.5.2Inventorship. INVENTORSHIP OF ALL INVENTIONS SHALL BE DETERMINED IN ACCORDANCE WITH APPLICABLE LAWS. EACH PARTYWILL ENSURE THAT EACH EMPLOYEE, CONSULTANT AND SUBCONTRACTOR CONDUCTING ANY ACTIVITIES UNDER THIS LICENSE AGREEMENT ON BEHALF OF SUCHPARTY WILL BE SUBJECT TO WRITTEN AGREEMENTS TO ASSIGN TO SUCH PARTY ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE INVENTIONS SO THAT SUCHPARTY CAN COMPLY WITH ITS OBLIGATIONS WITH RESPECT TO THE OWNERSHIP ALLOCATION OF THE INVENTIONS AS SET FORTH BELOW. IN ADDITION, EACHPARTY SHALL BE SOLELY RESPONSIBLE FOR PAYMENTS THAT MAY BE REQUIRED TO ANY OF SUCH PARTY’S EMPLOYEES OR CONSULTANTS AND SUBCONTRACTORSin connection with or with respect to such agreements, including moral rights payments.5.3Ownership. NOTWITHSTANDING INVENTORSHIP IN THE FIRST INSTANCE PURSUANT TO SECTION 5.2, OWNERSHIP OF ALLINVENTIONS, AS BETWEEN THE PARTIES, WILL BE ASSIGNED BY THE PARTIES AS FOLLOWS: (A) ARCTURUS WILL SOLELY OWN ALL INVENTIONS THAT AREIMPROVEMENTS SOLELY TO THE LMD TECHNOLOGY (“LMD INVENTIONS”), AND (B) CUREVAC WILL SOLELY OWN ALL INVENTIONS THAT AREIMPROVEMENTS SOLELY TO THE MRNA TECHNOLOGY (“MRNA INVENTIONS”). SPECIFICALLY, CUREVAC HEREBY ASSIGNS TO ARCTURUS ALL OF ITSRIGHT, TITLE AND INTEREST IN AND TO ANY AND ALL LMD INVENTIONS, AND AGREES TO TAKE SUCH ACTIONS REASONABLY REQUESTED BY ARCTURUS TOEVIDENCE SUCH ASSIGNMENT. ARCTURUS HEREBY ASSIGNS TO CUREVAC ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO ANY AND ALL MRNAINVENTIONS, AND AGREES TO TAKE SUCH ACTIONS REASONABLY REQUESTED BY CUREVAC TO EVIDENCE SUCH ASSIGNMENT. FOR CLARITY, THE ASSIGNMENTprovisions with respect to mRNA Inventions are restricted solely to improvements to the mRNA Technology.6.Patent Prosecution and Maintenance.6.1Generally. (a)AS BETWEEN THE PARTIES AND SUBJECT TO SECTION 6.2 BELOW, ARCTURUS (OR ITS THIRD PARTY LICENSOR, IF ANY)will have the sole right, at its sole costs, to prosecute and maintain Arcturus Technology Patents, other than the Joint Interest Patents.(b)IN RELATION TO ANY ARCTURUS TECHNOLOGY PATENTS THAT SPECIFICALLY CLAIM THE LICENSED PRODUCT, PRIOR TOfiling, ARCTURUS WILL PROVIDE CUREVAC WITH COPIES OF ALL SPECIFIC CLAIMS RELEVANT TO THE LICENSED PRODUCT IN SUCH APPLICATIONS FOR ALLSUCH ARCTURUS TECHNOLOGY PATENTS, AND ALL OTHER MATERIAL SUBMISSIONS AND CORRESPONDENCE RELATING TO SUCH CLAIMS WITH ANY PATENTAUTHORITIES REGARDING SUCH ARCTURUS TECHNOLOGY PATENTS, IN SUFFICIENT TIME (NOT TO BE LESS THAN […***…] TO ALLOW FOR REVIEW ANDCOMMENT BY CUREVAC. IN ADDITION, ARCTURUS WILL PROVIDE CUREVAC AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH ARCTURUS AND ITSCOUNSEL REGARDING PROSECUTION AND MAINTENANCE OF ANY SUCH ARCTURUS TECHNOLOGY PATENTS, AND ARCTURUS WILL NOT UNREASONABLY REFUSEto address all reasonable comments timely made by or on behalf of CureVac.(c)AS BETWEEN THE PARTIES, CUREVAC WILL HAVE THE FIRST RIGHT TO PROSECUTE AND MAINTAIN ANY AND ALL JOINTInterest Patents and the Parties will share equally all costs***Confidential Treatment Requested21 INCURRED BY CureVac IN CONNECTION WITH SUCH EFFORTS. PRIOR TO FILING, CUREVAC WILL PROVIDE ARCTURUS WITH COPIES OF ALL APPLICATIONS FORSUCH JOINT INTEREST PATENTS, AND ALL OTHER MATERIAL SUBMISSIONS AND CORRESPONDENCE WITH ANY PATENT AUTHORITIES REGARDING SUCH JOINTINTEREST PATENTS, IN SUFFICIENT TIME (NOT TO BE LESS THAN […***…] DAYS) TO ALLOW FOR REVIEW AND COMMENT BY ARCTURUS. IN ADDITION,CUREVAC WILL PROVIDE ARCTURUS AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH CUREVAC AND ITS COUNSEL REGARDING PROSECUTION ANDMAINTENANCE OF ANY SUCH JOINT INTEREST PATENTS, AND CUREVAC WILL CONSIDER IN GOOD FAITH ALL REASONABLE COMMENTS TIMELY MADE BY OR ONbehalf of Arcturus. (d)IN THE EVENT THAT CUREVAC OR ITS AFFILIATES GRANTS A SUBLICENSE PURSUANT TO SECTION 2.2, AS BETWEENCureVac and any such Sublicensee, (i)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT DOES NOT SPECIFICALLY CLAIM THELICENSED PRODUCT, CUREVAC SHALL RETAIN ITS RIGHTS TO PROSECUTE ANY SUCH SUBLICENSED ARCTURUS TECHNOLOGYPATENTS AND JOINT INTEREST PATENTS AS SET FORTH IN SECTIONS 6.1(B) AND 6.1(C); PROVIDED, HOWEVER, THAT SUCHSUBLICENSE MAY PROVIDE FOR INSTRUCTION BY THE SUBLICENSEE OF CUREVAC’S EXERCISE OF ITS RIGHTS TO PROSECUTE ANYsublicensed Arcturus Technology Patent or Joint Interest Patent; (ii)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT SPECIFICALLY CLAIMS THE LICENSEDPRODUCT (I.E., WITH RESPECT TO THE CLAIMS LIMITED TO THE LICENSED PRODUCT, BUT NOT THE BROADER CLAIMS THAT COVEROTHER PRODUCTS OR POTENTIAL PRODUCTS IN SUCH ARCTURUS TECHNOLOGY PATENTS OR JOINT INTEREST PATENTS), CUREVACSHALL HAVE THE RIGHT TO SUBLICENSE ITS RIGHTS TO PROSECUTE ANY SUCH SUBLICENSED ARCTURUS TECHNOLOGY PATENTS ANDJoint Interest Patents as set forth in Sections 6.1(b) and 6.1(c) to the Sublicensee.6.2Election Not to Prosecute or Maintain or Pay Patent Costs.(a)IF ARCTURUS ELECTS NOT TO FILE, PROSECUTE OR MAINTAIN ANY ARCTURUS TECHNOLOGY PATENTS THAT SPECIFICALLYclaim the Licensed Product FOR WHICH IT IS RESPONSIBLE UNDER SECTION 6.1 IN ANY PARTICULAR COUNTRY BEFORE THE APPLICABLE FILINGDEADLINE OR CONTINUE SUCH ACTIVITIES ONCE FILED IN A PARTICULAR COUNTRY, THEN ARCTURUS WILL SO NOTIFY CUREVAC, PROMPTLY INWRITING WITH REASONABLE NOTICE TO ENABLE CUREVAC TO MEET ANY DEADLINES BY WHICH AN ACTION MUST BE TAKEN TO PRESERVE SUCHARCTURUS TECHNOLOGY PATENT THAT SPECIFICALLY CLAIM THE LICENSED PRODUCT IN SUCH COUNTRY, IF CUREVAC SO REQUESTS. UPONRECEIPT OF EACH SUCH NOTICE BY ARCTURUS, CUREVAC WILL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO NOTIFY ARCTURUS IN WRITING ONA TIMELY BASIS THAT ARCTURUS SHOULD TRANSFER THE PROSECUTION OR MAINTENANCE OF SUCH ARCTURUS TECHNOLOGY PATENTS THATSPECIFICALLY CLAIM THE LICENSED PRODUCT TO CUREVAC AND AT CUREVAC’S SOLE EXPENSE OR CONTINUE THE PROSECUTION AND/ORMAINTENANCE OF SUCH ARCTURUS TECHNOLOGY PATENT THAT SPECIFICALLY CLAIM THE LICENSED PRODUCT IN THE RESPECTIVE COUNTRY, ANDTHEREAFTER, ARCTURUS WOULD PROSECUTE AND MAINTAIN SUCH ARCTURUS TECHNOLOGY PATENT THAT SPECIFICALLY CLAIM THE LICENSEDPRODUCT IN SUCH COUNTRY AT THE SOLE DIRECTION AND EXPENSE OF CUREVAC, ARCTURUS WOULD MAKE AVAILABLE TO CUREVAC ALLDOCUMENTATION AND CORRESPONDENCE WITH RESPECT TO SUCH ARCTURUS TECHNOLOGY PATENT. CUREVAC’S LICENSE TO SUCH ARCTURUSTECHNOLOGY PATENT UNDER SECTION 2.1 WILL BE IRREVOCABLE AND ROYALTY-FREE, AND SUCH ARCTURUS TECHNOLOGY PATENT WILLTHEREAFTER NO LONGER BE PART OF THE ARCTURUS TECHNOLOGY FOR PURPOSES OF THIS LICENSE AGREEMENT. CUREVAC IS ENTITLED TOdiscontinue the payment of Patent Costs***Confidential Treatment Requested22 FOR ANY ARCTURUS TECHNOLOGY PATENTS THAT SPECIFICALLY CLAIM THE LICENSED PRODUCT AT ANY TIME, PROVIDED THAT IT WILL SO NOTIFYArcturus in writing in time for such discontinuance.(b)IF ARCTURUS ELECTS NOT TO PAY ITS SHARE OF THE PATENT COSTS ASSOCIATED WITH PROSECUTION OR MAINTENANCE OFANY JOINT INTEREST PATENTS, THEN IT SHALL ASSIGN ITS CO-OWNERSHIP SHARE IN SUCH PATENTS TO CUREVAC AND THE RESPECTIVE PATENTshall no longer be considered a Joint Interest Patent.(c)By CureVac. IF CUREVAC ELECTS NOT (I) TO FILE, PROSECUTE OR MAINTAIN ANY JOINT INTEREST PATENTS FOR WHICH ITIS RESPONSIBLE UNDER SECTION 6.1 IN ANY PARTICULAR COUNTRY BEFORE THE APPLICABLE FILING DEADLINE OR CONTINUE SUCH ACTIVITIESONCE FILED IN A PARTICULAR COUNTRY, OR (II) TO PAY ITS SHARE OF THE PATENT COSTS ASSOCIATED WITH PROSECUTION OR MAINTENANCE OFANY JOINT INTEREST PATENTS THEN IN EACH SUCH CASE CUREVAC WILL SO NOTIFY ARCTURUS, PROMPTLY IN WRITING AND IN GOOD TIME TOENABLE ARCTURUS TO MEET ANY DEADLINES BY WHICH AN ACTION MUST BE TAKEN TO PRESERVE SUCH JOINT INTEREST PATENT IN SUCHCOUNTRY AT ARCTURUS' EXPENSE, IF ARCTURUS SO REQUESTS. UPON RECEIPT OF EACH SUCH NOTICE BY CUREVAC, ARCTURUS WILL HAVE THERIGHT, BUT NOT THE OBLIGATION, TO NOTIFY CUREVAC IN WRITING ON A TIMELY BASIS THAT CUREVAC SHOULD TRANSFER THE PROSECUTION ORMAINTENANCE OF SUCH JOINT INTEREST PATENT TO ARCTURUS AND AT ARCTURUS' SOLE EXPENSE. ARCTURUS IS ENTITLED TO DISCONTINUE THEPAYMENT OF PATENT COSTS FOR ANY JOINT INTEREST PATENTS AT ANY TIME, PROVIDED THAT IT WILL SO NOTIFY CUREVAC IN WRITING IN TIMEFOR SUCH DISCONTINUANCE. IN THE EVENT THAT ARCTURUS ASSUMES THE PROSECUTION AND MAINTENANCE OF ANY SUCH JOINT INTERESTPATENT, THEN CUREVAC WOULD MAKE AVAILABLE TO ARCTURUS ALL DOCUMENTATION AND CORRESPONDENCE WITH RESPECT TO SUCH JOINTINTEREST PATENT, SUCH JOINT INTEREST PATENT SHALL NO LONGER BE LICENSED UNDER THIS AGREEMENT WITH RESPECT TO THE LICENSEDProduct.6.3Cooperation. EACH PARTY WILL REASONABLY COOPERATE WITH THE OTHER PARTY IN THOSE ACTIVITIES INVOLVING THE ARCTURUSTECHNOLOGY PATENTS AND JOINT INTEREST PATENTS SET FORTH IN SECTIONS 6.1 AND 6.2. SUCH COOPERATION INCLUDES PROMPTLY executing ALLDOCUMENTS, OR REQUIRING INVENTORS, SUBCONTRACTORS, EMPLOYEES AND CONSULTANTS AND AGENTS OF CUREVAC AND ARCTURUS AND THEIR RESPECTIVEAFFILIATES AND SUBLICENSEES TO EXECUTE ALL DOCUMENTS, AS REASONABLE AND APPROPRIATE SO AS TO ENABLE SUCH ACTIVITIES IN RESPECT OF ANYsuch Arcturus Technology Patents in any country.7.Patent Enforcement and Defense. 7.1Notice. TO THE EXTENT NOT IN BREACH OF AN OBLIGATION OF CONFIDENTIALITY, EACH PARTY WILL PROMPTLY NOTIFY, IN WRITING,THE OTHER PARTY UPON LEARNING OF ANY ACTUAL OR SUSPECTED INFRINGEMENT OF ANY ARCTURUS Technology PATENTS BY A THIRD PARTY, OR OF ANYCLAIM OF INVALIDITY, UNENFORCEABILITY, OR NON-INFRINGEMENT OF ANY ARCTURUS TECHNOLOGY PATENTS, AND WILL, ALONG WITH SUCH NOTICE, SUPPLYthe other Party with any evidence in its possession pertaining thereto.7.2Enforcement and Defense.(a)Enforcement. (i)As between the Parties,23 (1)ARCTURUS AND ITS THIRDParTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANY EXISTING BACK-UPENFORCEMENT RIGHTS), AT ITS COST, WILL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, TOSEEK TO ABATE ANY INFRINGEMENT OF THE ARCTURUS TECHNOLOGY PATENTS (OTHER THANTHOSE IN SUBSECTION (2)) BY A THIRD PARTY, OR TO FILE SUIT AGAINST ANY SUCH THIRDParty for such infringement, and(2) CUREVAC (OR ITSSUBLICENSEE, IF ANY) SHALL HAVE THE FIRST RIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTIONOR BRING SUIT AND BEAR ALL EXPENSES AGAINST SUCH THIRD PARTY INFRINGER WITH RESPECTTO: (A) JOINT INTEREST PATENTS; AND/OR (B) ANY OTHER ARCTURUS TECHNOLOGY PATENTSTHAT, ON THE DATE OF FIRST NOTICE OF SUCH INFRINGEMENT, SPECIFICALLY CLAIM THE LICENSED PRODUCT BUT ARE NOT NECESSARY OR USEFUL FOR THE RESEARCH, DEVELOPMENT,MANUFACTURING AND COMMERCIALIZATION OF ANY PRODUCT COMPRISING ARCTURUSTechnology THAT IS EXCLUSIVELY LICENSED OR OPTIONED TO A THIRD PARTY OR IS IN LATEStage Development or being commercialized by Arcturus or its Affiliates.(b)IF THE PARTY FIRST RESPONSIBLE FOR SUCH ENFORCEMENT ELECTS NOT TO TAKE ACTION OR TO BRING SUIT TO PROSECUTESUCH INFRINGEMENT OR TO CONTINUE SUCH ACTION OR SUIT, IT SHALL NOTIFY THE OTHER PARTY OF SUCH ELECTION WITHIN […***…] DAYSAFTER BECOME AWARE OF OR RECEIPT OF THE NOTICE OF THE INFRINGEMENT OR AFTER THE ELECTION TO STOP ANY SUCH ACTION OR SUIT. IF AFTERTHE EXPIRATION OF THE […***…] DAYS PERIOD (OR, IF EARLIER, THE DATE UPON WHICH THE RESPONSIBLE PARTY PROVIDES WRITTEN NOTICETHAT IT DOES NOT PLAN TO BRING SUCH ACTION) THE RESPONSIBLE PARTY HAS NEITHER OBTAINED A DISCONTINUANCE OF INFRINGEMENT NORfiled suit against any such Third Party infringer of such Patent, then (i)IN THE CASE OF AN ELECTION BY ARCTURUS AND ITS THIRD PARTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANYEXISTING BACK-UP ENFORCEMENT RIGHTS) NOT TO PROSECUTE AN INFRINGEMENT OF AN ARCTURUS TECHNOLOGY PATENTSPECIFICALLY CLAIMING THE LICENSED PRODUCT, CUREVAC SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTIONOR BRING SUIT AGAINST SUCH THIRD PARTY INFRINGER OF SUCH PATENTS, PROVIDED THAT THE INFRINGEMENT IS WITH RESPECT TOA PRODUCT RELATED TO THE TARGET(S) UNDER THIS LICENSE AGREEMENT, AND FURTHER PROVIDED THAT CUREVAC SHALL BEARall the expenses of such suit and (ii)IN THE CASE OF A CUREVAC ELECTION NOT TO PROSECUTE AN INFRINGEMENT OF A JOINT INTEREST PATENTS OR ARCTURUSTECHNOLOGY PATENT WITH RESPECT TO WHICH CUREVAC HAS RIGHTS TO TAKE FIRST ACTION, (I) ARCTURUS SHALL HAVE THERIGHT, BUT NOT THE OBLIGATION, TO TAKE ACTION OR BRING SUIT AGAINST SUCH THIRD PARTY INFRINGER OF SUCH PATENTS,PROVIDED THAT ARCTURUS SHALL BEAR ALL THE EXPENSES OF SUCH SUIT,AND CUREVAC SHALL JOIN ARCTURUS IN SUCH SUIT TOTHE EXTENT LEGALLY REQUIRED, UNLESS (II) CUREVAC DECIDES TO ASSIGN ITS INTEREST IN SUCH JOINT INTEREST PATENT – ON ACOUNTRY-BY-COUNTRY BASIS - TO ARCTURUS AND SUCH JOINT INTEREST PATENT SHALL BECOME AN ARCTURUS TECHNOLOGYPatent and no longer subject to license pursuant to this License Agreement.(c)Defense. (i)As between the Parties,(1)ARCTURUS AND ITS THIRDPARTY LICENSOR OR LICENSEE (SOLELY TO THE EXTENT OF ANY EXISTING BACK-UP DEFENSErights) will have the first right, but not the***Confidential Treatment Requested24 OBLIGATION, AT ITS SOLE COSTS, TO DEFEND AGAINST A DECLARATORY JUDGMENT ACTION OR OTHERACTION CHALLENGING ANY ARCTURUS TECHNOLOGY PATENTS, OTHER THAN: (I) JOINT INTERESTPATENTS; AND (II) ANY OTHER ARCTURUS TECHNOLOGY PATENTS THAT, ON THE DATE OF FIRSTNOTICE OF SUCH ACTION, SPECIFICALLY CLAIM THE LICENSED PRODUCT BUT ARE NOTNECESSARY OR USEFUL FOR THE RESEARCH, DEVELOPMENT, MANUFACTURING ANDCOMMERCIALIZATION OF ANY PRODUCT COMPRISING ARCTURUS TECHNOLOGY THAT ISexclusively licensed or optioned to a Third Party or is in Late Stage Developmentor being commercialized by Arcturus or its Affiliates, and(2)CureVac shall have the firstRIGHT, BUT NOT THE OBLIGATION, AT ITS SOLE COSTS, TO DEFEND AGAINST A DECLARATORYJUDGMENT ACTION OR OTHER ACTION CHALLENGING JOINT INTEREST PATENTS AS WELL AS suchother Arcturus Technology Patents that specifically claim the Licensed Product. (ii)IF THE PARTY FIRST RESPONSIBLE FOR SUCH DEFENSE DOES NOT TAKE STEPS TO DEFEND WITHIN A COMMERCIALLY REASONABLYTIME, OR ELECTS NOT TO CONTINUE ANY SUCH DEFENSE (IN WHICH CASE IT WILL PROMPTLY PROVIDE NOTICE THEREOF TO THEOTHER PARTY), THEN (I) IN THE CASE OF AN ELECTION BY ARCTURUS AND ITS THIRD PARTY LICENSOR OR LICENSEE (SOLELY TO THEEXTENT OF ANY EXISTING BACK-UP DEFENSE RIGHTS) NOT TO DEFEND AN ARCTURUS TECHNOLOGY PATENT SPECIFICALLYCLAIMING THE LICENSED PRODUCT, CUREVAC SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO DEFEND ANY ARCTURUSTECHNOLOGY PATENTS THAT COVER LICENSED PRODUCT AND NO OTHER PRODUCT LICENSED OR OPTIONED BY ARCTURUS TO ATHIRD PARTY OR COMMERCIALIZED BY ARCTURUS, PROVIDED THAT CUREVAC SHALL BEAR ALL THE EXPENSES OF SUCH SUIT AND(II) IN THE CASE OF A CUREVAC ELECTION NOT TO DEFEND THE JOINT INTEREST PATENTS, ARCTURUS SHALL HAVE THE RIGHT, BUTNOT THE OBLIGATION, TO TAKE ACTION OR BRING SUIT TO DEFEND SUCH PATENTS, PROVIDED THAT ARCTURUS SHALL BEAR ALL THEEXPENSES OF SUCH SUIT. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT CUREVAC ELECTS NOT TO PROSECUTE ANINFRINGEMENT OF A JOINT INTEREST PATENT, THEN CUREVAC SHALL, AT ITS DISCRETION, EITHER (I) ASSIGN SUCH JOINT INTERESTPATENT TO ARCTURUS – ON A COUNTRY-BY-COUNTRY BASIS -, WHICH SHALL BECOME AN ARCTURUS TECHNOLOGY PATENT ANDNO LONGER SUBJECT TO LICENSE PURSUANT TO THIS LICENSE AGREEMENT OR (II) JOIN ARCTURUS IN SUCH SUIT TO THE EXTENTlegally required.(d)NOTWITHSTANDING THE FOREGOING, ANY RESPONSE TO A THIRD PARTY INFRINGER'S COUNTERCLAIM OF INVALIDITY ORUNENFORCEABILITY OF ANY ARCTURUS TECHNOLOGY PATENTS SHALL BE CONTROLLED BY THE PARTY WHO CONTROLS THE RELEVANT ENFORCEMENTproceeding pursuant to Section 7.2 (a) unless otherwise mutually agreed by the Parties. (e)IN THE EVENT THAT CUREVAC OR ITS AFFILIATES GRANTS A SUBLICENSE PURSUANT TO SECTION 2.2, AS BETWEENCureVac and any such Sublicensee, (i)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT DOES NOT SPECIFICALLY CLAIM THELICENSED PRODUCT, CUREVAC SHALL RETAIN ITS RIGHTS TO ENFORCE AND DEFEND ARCTURUS TECHNOLOGY PATENTS AND JOINTINTEREST PATENTS AS SET FORTH IN SECTIONS 7.2(A), 7.2(B), 7.2(C) AND 7.2(D); PROVIDED, HOWEVER, THAT CUREVAC’SEXERCISE OF ITS RIGHTS TO ENFORCE OR DEFEND SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT MAY BEinstructed by a Sublicensee; (ii)TO THE EXTENT ANY SUCH ARCTURUS TECHNOLOGY PATENT OR JOINT INTEREST PATENT SPECIFICALLY CLAIMS THE LICENSEDProduct, CureVac shall have the right25 to sublicense its rights to enforce and defend Arcturus Technology Patents and Joint Interest Patents as set forth inSections 7.2(a), 7.2(b), 7.2(c) and 7.2(d) to the Sublicensee.(f)Withdrawal, Cooperation and Participation. WITH RESPECT TO ANY INFRINGEMENT OR DEFENSIVE ACTIONidentified above in this Section 7.2 which may be controlled by either CureVac or Arcturus: (i)IF THE CONTROLLING PARTY CEASES TO PURSUE OR WITHDRAWS FROM SUCH ACTION, IT WILL PROMPTLY NOTIFY THE OTHERPARTY (IN GOOD TIME TO ENABLE THE OTHER PARTY TO MEET ANY DEADLINES BY WHICH ANY ACTION MUST BE TAKENTO PRESERVE ANY RIGHTS IN SUCH INFRINGEMENT OR DEFENSIVE ACTION) AND SUCH OTHER PARTY MAY SUBSTITUTEITSELF FOR THE WITHDRAWING PARTY, SHALL BE GRANTED THE RIGHT AND STANDING TO SUE IN THE OTHER PARTY'S NAME,and proceed under the terms and conditions of this Section 7.2. (ii)THE NON-CONTROLLING PARTY WILL COOPERATE WITH THE PARTY CONTROLLING ANY SUCH ACTION (AS MAY BEREASONABLY REQUESTED BY THE CONTROLLING PARTY), INCLUDING (A) PROVIDING ACCESS TO RELEVANT DOCUMENTSAND OTHER EVIDENCE, (B) MAKING ITS AND ITS AFFILIATES AND LICENSEES AND SUBLICENSEES AND ALL OF THEIRRESPECTIVE EMPLOYEES, SUBCONTRACTORS, CONSULTANTS AND AGENTS AVAILABLE AT REASONABLE BUSINESS HOURSAND FOR REASONABLE PERIODS OF TIME, BUT ONLY TO THE EXTENT RELEVANT TO SUCH ACTION, AND (C) IF NECESSARY,BY BEING JOINED AS A PARTY, SUBJECT FOR THIS CLAUSE (C) TO THE CONTROLLING PARTY AGREEING TO INDEMNIFYSUCH NON-CONTROLLING PARTY FOR ITS INVOLVEMENT AS A NAMED PARTY IN SUCH ACTION AND PAYING THOSE PATENTCOSTS INCURRED BY SUCH PARTY IN CONNECTION WITH SUCH JOINDER. THE PARTY CONTROLLING ANY SUCH ACTIONWILL KEEP THE OTHER PARTY UPDATED WITH RESPECT TO ANY SUCH ACTION, INCLUDING PROVIDING COPIES OF ALLdocuments received or filed in connection with any such action. (iii)EACH PARTY WILL HAVE THE RIGHT TO PARTICIPATE OR OTHERWISE BE INVOLVED IN ANY SUCH ACTION CONTROLLED BYTHE OTHER PARTY, IN EACH CASE AT THE PARTICIPATING (I.E., NON-CONTROLLING) PARTY’S SOLE COST ANDEXPENSE. IF A PARTY ELECTS TO SO PARTICIPATE OR BE INVOLVED, THE CONTROLLING PARTY WILL PROVIDE THEPARTICIPATING PARTY AND ITS COUNSEL WITH AN OPPORTUNITY TO CONSULT WITH THE CONTROLLING PARTY AND ITSCOUNSEL REGARDING THE PROSECUTION OF SUCH ACTION (INCLUDING REVIEWING THE CONTENTS OF ANYCORRESPONDENCE, LEGAL PAPERS OR OTHER DOCUMENTS RELATED THERETO), AND THE CONTROLLING PARTY WILL TAKEinto account reasonable requests of the participating Party regarding such enforcement or defense.(g)Settlement. NEITHER PARTY WILL SETTLE OR CONSENT TO AN ADVERSE JUDGMENT IN ANY ACTION DESCRIBED IN THISSECTION 7.2 AND CONTROLLED BY SUCH PARTY, INCLUDING ANY JUDGMENT WHICH AFFECTS THE SCOPE, VALIDITY OR ENFORCEMENT OF ANYARCTURUS TECHNOLOGY PATENTS INVOLVED THEREWITH, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY (SUCH CONSENT NOT TO BEunreasonably withheld, delayed or conditioned).(h)Damages. UNLESS OTHERWISE AGREED BY THE PARTIES, ALL MONIES RECOVERED UPON THE FINAL JUDGMENT ORSETTLEMENT OF ANY ACTION WHICH MAY BE CONTROLLED BY EITHER CUREVAC OR ARCTURUS AND DESCRIBED IN SECTION 7.2(A) OR 7.2(C) INeach case will be26 USED FIRST TO REIMBURSE THE CONTROLLING PARTY, AND THEREAFTER THE NON-CONTROLLING PARTY, FOR EACH OF THEIR OUT-OF-POCKET COSTSand expenses relating to the action, with the balance of any such recovery to be divided as follows: (i)TO THE EXTENT THE ACTION INVOLVES A THIRD PARTY’S RESEARCH, DEVELOPMENT, MANUFACTURE ORCOMMERCIALIZATION OF ANY PRODUCT OTHER THAN THE LICENSED PRODUCT (OR A LMD PRODUCT DIRECTED TO THEsame Target as the Licensed Product), Arcturus shall retain all such recovery; and (ii)TO THE EXTENT THE ACTION INVOLVES A THIRD PARTY’S RESEARCH, DEVELOPMENT, MANUFACTURE ORCOMMERCIALIZATION OF THE LICENSED PRODUCT (OR A LMD PRODUCT DIRECTED TO THE SAME TARGET AS THELicensed Product), CureVac will retain such recovery, less the amount of royalties payable to Arcturusby treating such recovery as "Net Sales" hereunder. (i)PATENT MARKING. CUREVAC SHALL MARK ALL LICENSED PRODUCT IF AND TO THE EXTENT REQUIRED BY THEapplicable patent marking laws, and shall require all of its Affiliates and sublicensees to do the same.8.Confidentiality.8.1CONFIDENTIAL INFORMATION. EACH PARTY ("DISCLOSING PARTY") MAY DISCLOSE TO THE OTHER PARTY ("RECEIVING PARTY"),AND RECEIVING PARTY MAY ACQUIRE DURING THE COURSE AND CONDUCT OF ACTIVITIES UNDER THIS LICENSE AGREEMENT, CERTAIN PROPRIETARY ORconfidential information of Disclosing Party in connection with this License Agreement. 8.2Restrictions. DURING THE TERM AND FOR […***…] YEARS THEREAFTER, RECEIVING PARTY WILL KEEP ALL DISCLOSINGPARTY’S CONFIDENTIAL INFORMATION IN CONFIDENCE WITH THE SAME DEGREE OF CARE WITH WHICH RECEIVING PARTY HOLDS ITS OWN CONFIDENTIALINFORMATION, BUT IN NO EVENT LESS THAN REASONABLE CARE. RECEIVING PARTY WILL NOT USE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION EXCEPTFOR IN CONNECTION WITH THE PERFORMANCE OF ITS OBLIGATIONS AND EXERCISE OF ITS RIGHTS UNDER THIS LICENSE AGREEMENT. RECEIVING PARTY HASTHE RIGHT TO DISCLOSE DISCLOSING PARTY’S CONFIDENTIAL INFORMATION WITHOUT DISCLOSING PARTY’S PRIOR WRITTEN CONSENT TO RECEIVING PARTY’SAffiliates, and each of their employees, subcontractors, consultants and agents who have a need to know such Confidential InformationIN ORDER TO PERFORM THEIR OBLIGATIONS AND EXERCISE THEIR RIGHTS UNDER THIS LICENSE AGREEMENT AND WHO ARE UNDER WRITTEN OBLIGATION TOCOMPLY WITH THE RESTRICTIONS ON USE AND DISCLOSURE THAT ARE NO LESS RESTRICTIVE THAN THOSE SET FORTH IN THIS SECTION 8.2. RECEIVING PARTYASSUMES RESPONSIBILITY FOR SUCH ENTITIES AND PERSONS MAINTAINING DISCLOSING PARTY’S CONFIDENTIAL INFORMATION IN CONFIDENCE AND USINGsame only for the purposes described herein.8.3Exceptions. Receiving Party’s obligation of nondisclosure and the limitations upon the right to use the DisclosingParty’s Confidential Information will not apply to a specific portion of the Disclosing Party’s Confidential Information to the extent thatRECEIVING PARTY CAN DEMONSTRATE THAT SUCH PORTION: (I) WAS KNOWN TO RECEIVING PARTY OR ANY OF ITS AFFILIATES PRIOR TO THE TIME OFDISCLOSURE BY THE DISCLOSING PARTY WITHOUT OBLIGATION OF CONFIDENTIALITY; (II) IS OR BECOMES PUBLIC KNOWLEDGE THROUGH NO ACTION OROMISSION OF RECEIVING PARTY OR ANY OF ITS AFFILIATES; (III) IS OBTAINED ON A NON-CONFIDENTIAL BASIS BY RECEIVING PARTY OR ANY OF ITSAFFILIATES FROM A THIRD PARTY WHO TO RECEIVING PARTY’S KNOWLEDGE IS LAWFULLY IN POSSESSION THEREOF (OR IF POSSESSION IS OBVIOUSLYunlawful) and***Confidential Treatment Requested27 UNDER NO OBLIGATION OF CONFIDENTIALITY TO DISCLOSING PARTY; OR (IV) HAS BEEN INDEPENDENTLY DEVELOPED BY OR ON BEHALF OF RECEIVING PARTYOR ANY OF ITS AFFILIATES WITHOUT THE AID, APPLICATION OR USE OF DISCLOSING PARTY’S CONFIDENTIAL INFORMATION AS DOCUMENTED BY THE INTERNALrecords of the Receiving Party.8.4PERMITTED DISCLOSURES. NOTWITHSTANDING THE OBLIGATIONS SET FORTH IN SECTION 8.2, RECEIVING PARTY MAY DISCLOSEDISCLOSING PARTY’S CONFIDENTIAL INFORMATION (INCLUDING THIS LICENSE AGREEMENT AND THE TERMS HEREIN) TO THE EXTENT (AND ONLY TO THEextent) such disclosure is reasonably necessary in the following instances:(e)IN ORDER TO COMPLY WITH APPLICABLE LAW (INCLUDING ANY SECURITIES LAW OR REGULATION OR THE RULES OF Asecurities exchange) or with a legal or administrative proceeding;(f)IN CONNECTION WITH PROSECUTING OR DEFENDING LITIGATION, AND FILING, PROSECUTING AND ENFORCING ARCTURUSTechnology Patents in connection with Receiving Party’s rights and obligations pursuant to this License Agreement;(g)to attorneys, accountants, auditors, acquirers, licensees, partners or permitted assignees; financial advisors,INVESTORS AND LENDERS, INCLUDING POTENTIAL ACQUIRERS, LICENSEES, PARTNERS, ASSIGNEES, FINANCIAL ADVISORS, INVESTORS AND LENDERS;and(h)IN THE CASE OF CUREVAC, TO (I) SUBCONTRACTORS; OR (II) POTENTIAL LICENSEES OR COLLABORATION PARTNERS, BUT ONLYSUCH INFORMATION THAT IS REASONABLY NECESSARY OR USEFUL FOR THE SUBCONTRACTOR TO PERFORM THE SUBCONTRACTED WORK OR FOR THEPOTENTIAL LICENSEE OR PARTNER TO EVALUATE THE APPLICABLE LICENSED PRODUCT, AND LMD OR LICENSED PRODUCT MANUFACTURINGprocesses;PROVIDED THAT (1) WHERE REASONABLY POSSIBLE, RECEIVING PARTY WILL NOTIFY DISCLOSING PARTY OF RECEIVING PARTY’S INTENT TOMAKE ANY DISCLOSURE PURSUANT TO SUBSECTIONS (A) AND (B) SUFFICIENTLY PRIOR TO MAKING SUCH DISCLOSURE SO AS TO ALLOWDISCLOSING PARTY REASONABLY ADEQUATE TIME TO TAKE WHATEVER ACTION IT MAY DEEM APPROPRIATE TO PROTECT THE CONFIDENTIALITY OFTHE INFORMATION TO BE DISCLOSED, AND (2) WITH RESPECT TO SUBSECTIONS (C), EACH OF THOSE PERSONS OR ENTITIES ARE REQUIRED TOCOMPLY WITH THE RESTRICTIONS ON USE AND DISCLOSURE IN SECTION 8.2 (OTHER THAN FINANCIAL ADVISORS, INVESTORS AND LENDERS, WHICHmust be bound prior to disclosure by commercially reasonable obligations of confidentiality).8.5RETURN OF CONFIDENTIAL INFORMATION. UPON EXPIRY OR EARLIER TERMINATION OF THIS LICENSE AGREEMENT, UPON WRITTENREQUEST OF A PARTY (SUCH REQUEST, IF MADE, TO BE MADE WITHIN THREE (3) MONTHS OF SUCH EXPIRY OR TERMINATION) THE OTHER PARTY WILL DESTROYOR RETURN (AS SHALL BE SPECIFIED IN SUCH REQUEST) TO THE REQUESTING PARTY ALL COPIES OF THE CONFIDENTIAL INFORMATION OF THE REQUESTING PARTY;PROVIDED THAT THE PARTY MAY RETAIN: (I) ONE COPY OF SUCH CONFIDENTIAL INFORMATION FOR RECORD-KEEPING PURPOSES, FOR THE SOLE PURPOSE OFensuring compliance WITH THIS LICENSE AGREEMENT; (II) ANY COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS REQUIRED TO BE RETAINED UNDERapplicable Law; (iii) any COPIES OF SUCH CONFIDENTIAL INFORMATION AS IS NECESSARY OR USEFUL FOR SUCH PARTY TO EXERCISE A RIGHT OR FULFILL ANOBLIGATION UNDER ANOTHER LICENSE AGREEMENT, IF ANY, OR AS SET FORTH IN THIS LICENSE AGREEMENT; AND (IV) ANY COPIES OF ANY COMPUTERRECORDS AND FILES CONTAINING CONFIDENTIAL INFORMATION THAT HAVE BEEN CREATED BY SUCH PARTY’S ROUTINE ARCHIVING/BACKUP PROCEDURES.Upon request of the requesting Party, the28 RECEIVING PARTY SHALL CONFIRM IN WRITING TO THE REQUESTING PARTY THE DESTRUCTION OR RETURN OF ALL COPIES OF THE CONFIDENTIAL INFORMATION OFthe requesting Party.8.6Publications. NOTWITHSTANDING ANYTHING IN THIS LICENSE AGREEMENT TO THE CONTRARY, CUREVAC IS PERMITTED TOPUBLISH THE RESULTS OF ITS DEVELOPMENT UNDER THIS LICENSE AGREEMENT, provided, however, THAT IT WILL NOT DISCLOSE ARCTURUS CONFIDENTIALINFORMATION IN ANY PUBLICATION BY CUREVAC OF THE RESULTS OF ANY LICENSED PRODUCT DEVELOPMENT BY CUREVAC WITHOUT ARCTURUS’ PRIORwritten consent, which will not be unreasonably withheld, conditioned or delayed. 8.7TERMS OF THIS LICENSE AGREEMENT; PRESS RELEASE. THE PARTIES AGREE THAT THE EXISTENCE AND TERMS OF THE PARTIES’RELATIONSHIP AND THIS LICENSE AGREEMENT WILL BE TREATED AS CONFIDENTIAL INFORMATION OF BOTH PARTIES, AND THUS MAY BE DISCLOSED ONLY ASPERMITTED BY SECTION 8.4. EXCEPT AS MUTUALLY AGREED OR OTHERWISE REQUIRED BY LAW OR SECURITIES EXCHANGE REGULATION, EACH PARTYAGREES NOT TO ISSUE ANY PRESS RELEASE OR PUBLIC STATEMENT DISCLOSING INFORMATION RELATING TO THE EXISTENCE OF THIS LICENSE AGREEMENT ORthe transactions contemplated hereby or the terms hereof without the prior written consent of the other Party.9.Warranties; Limitations of Liability; Indemnification.9.1REPRESENTATIONS AND WARRANTIES. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER AS OF THE LICENSE AGREEMENTEffective Date that:(a)IT IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD STANDING UNDER THE LAWS OF THEjurisdiction in which it is incorporated,(b)IT HAS THE LEGAL RIGHT AND POWER TO ENTER INTO THIS LICENSE AGREEMENT, TO EXTEND THE RIGHTS AND LICENSESgranted or to be granted to the other in this License Agreement, and to fully perform its obligations hereunder,(c)IT HAS TAKEN ALL NECESSARY CORPORATE ACTION ON ITS PART REQUIRED TO AUTHORIZE THE EXECUTION AND DELIVERY OFthis License Agreement and the performance of its obligations hereunder,(d)THIS LICENSE AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED ON BEHALF OF SUCH PARTY, AND CONSTITUTES Alegal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms and(e)EXCEPT WITH RESPECT TO ANY PRE-EXISTING RESTRICTIONS, THE EXECUTION, DELIVERY AND PERFORMANCE BY SUCHPARTY OF THIS LICENSE AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT RESULT IN ANYVIOLATION OF, CONFLICT WITH, RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT UNDER ANY UNDERSTANDING, CONTRACT OR AGREEMENT TOWHICH SUCH PARTY IS A PARTY OR BY WHICH IT IS BOUND, INCLUDING, IN THE CASE OF ARCTURUS, EACH OF THE AGREEMENTS WHICHARCTURUS HAS IDENTIFIED TO CUREVAC PRIOR TO THE LICENSE AGREEMENT EFFECTIVE DATE, IN EACH CASE AS WOULD REASONABLY BEexpected to have a material adverse effect on the rights of the other Party hereunder.9.2ADDITIONAL REPRESENTATIONS OF ARCTURUS. ARCTURUS HEREBY REPRESENTS AND WARRANTS TO CUREVAC AS OF THE LICENSEAgreement Effective Date as follows: 29 (a)Impairment. EXCEPT WITH RESPECT TO ANY PRE-EXISTING RESTRICTIONS, NEITHER ARCTURUS NOR ANY OF ITS AFFILIATESHAS ENTERED INTO ANY AGREEMENT OR OTHERWISE LICENSED, GRANTED, ASSIGNED, TRANSFERRED, CONVEYED OR OTHERWISE ENCUMBERED ORDISPOSED OF ANY RIGHT, TITLE OR INTEREST IN OR TO ANY OF ITS ASSETS, INCLUDING ANY INTELLECTUAL PROPERTY RIGHTS INCLUDING KNOW-HOW, THAT would IN ANY WAY CONFLICT WITH OR IMPAIR THE SCOPE OF ANY RIGHTS OR LICENSES GRANTED TO CUREVAC WITH RESPECT TOthe Licensed Product hereunder.(b)Patents. APPENDIX 1.4 SETS FORTH A COMPLETE AND ACCURATE LIST OF ALL ARCTURUS TECHNOLOGYPATENTS. ARCTURUS CONTROLS THE ARCTURUS TECHNOLOGY, AND IS ENTITLED TO GRANT THE LICENSES SPECIFIED HEREIN. TO ARCTURUS’KNOWLEDGE, THE ARCTURUS TECHNOLOGY PATENTS HAVE BEEN PROCURED OR ARE BEING PROCURED FROM THE RESPECTIVE PATENT OFFICES INACCORDANCE WITH APPLICABLE LAW. NONE OF THE ARCTURUS TECHNOLOGY PATENTS IS OR HAS BEEN INVOLVED IN ANY OPPOSITION,CANCELLATION, INTERFERENCE, REISSUE OR REEXAMINATION PROCEEDING, AND TO ARCTURUS’ KNOWLEDGE AS OF THE LICENSE AGREEMENTEFFECTIVE DATE, NO ARCTURUS TECHNOLOGY IS THE SUBJECT OF ANY JUDICIAL, ADMINISTRATIVE OR ARBITRAL ORDER, AWARD, DECREE,INJUNCTION, LAWSUIT, PROCEEDING OR STIPULATION. AS OF THE LICENSE AGREEMENT EFFECTIVE DATE, NEITHER ARCTURUS NOR ANY OF ITSAFFILIATES HAS RECEIVED ANY NOTICE ALLEGING THAT THE ARCTURUS TECHNOLOGY PATENTS ARE INVALID OR UNENFORCEABLE, OR CHALLENGINGArcturus’ ownership of or right to use any such rights.(c)Entire LMD Technology. THE ARCTURUS LMD TECHNOLOGY LICENSED TO CUREVAC UNDER THIS LICENSEAGREEMENT COMPRISES ALL LMD TECHNOLOGY CONTROLLED BY ARCTURUS WHICH IS NECESSARY OR USEFUL TO DEVELOP, MANUFACTUREand commercialize the Licensed Products for purposes of this License Agreement.(d)Encumbrances. AS OF THE LICENSE AGREEMENT EFFECTIVE DATE, ARCTURUS HAS THE RIGHT TO GRANT THE LICENSEHEREIN TO CUREVAC AND NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS GRANTED ANY LIENS OR SECURITY INTERESTS ON THE ARCTURUSTechnology to any Third Party that is inconsistent with the license granted to CureVac under Section 2.1. (e)Litigation. THERE IS NO ACTION, SUIT, PROCEEDING OR INVESTIGATION PENDING OR, TO THE KNOWLEDGE OF ARCTURUS,CURRENTLY THREATENED AGAINST OR AFFECTING ARCTURUS THAT QUESTIONS THE VALIDITY OF THIS LICENSE AGREEMENT OR THE RIGHT OFARCTURUS TO ENTER INTO THIS LICENSE AGREEMENT OR CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY OR THAT RELATES TO THEArcturus Technology.(f)Infringement. NEITHER ARCTURUS NOR ANY OF ITS AFFILIATES HAS RECEIVED ANY WRITTEN NOTICE OF ANY CLAIM, NORDOES ARCTURUS OR ITS AFFILIATES HAVE ANY KNOWLEDGE OF ANY CLAIM, THAT ANY PATENT, KNOW-HOW OR OTHER INTELLECTUAL PROPERTYOWNED OR CONTROLLED BY A THIRD PARTY WOULD BE INFRINGED OR MISAPPROPRIATED BY THE PRACTICE OF ANY ARCTURUS LMDTECHNOLOGY IN CONNECTION WITH THE PRODUCTION, USE, RESEARCH, DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION OF ANYLicensed Product.(g)Third Party Infringement. TO ARCTURUS’ KNOWLEDGE, NO THIRD PARTY IS INFRINGING OR HAS INFRINGED ANYPATENT WITHIN THE ARCTURUS LMD TECHNOLOGY OR IS MISAPPROPRIATING OR HAS MISAPPROPRIATED ANY KNOW-HOW WITHIN THEArcturus LMD Technology, in each case relating to the Target.30 9.3Disclaimers. WITHOUT LIMITING THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES EXPRESSLY SET FORTH HEREIN, EACHPARTY SPECIFICALLY DISCLAIMS ANY GUARANTEE THAT ANY LICENSED PRODUCT WILL BE SUCCESSFUL, IN WHOLE OR IN PART. EXCEPT AS OTHERWISEEXPRESSLY PROVIDED IN THIS LICENSE AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTY OF ANY KIND UNDER THISLicense Agreement, neither express nor implied.9.4NO CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING IN THIS LICENSE AGREEMENT OR OTHERWISE, NEITHER PARTYWILL BE LIABLE TO THE OTHER OR ANY THIRD PARTY WITH RESPECT TO ANY SUBJECT MATTER OF THIS LICENSE AGREEMENT FOR ANY INDIRECT ORCONSEQUENTIAL DAMAGES, PROVIDED THAT THIS SECTION 9.4 WILL NOT APPLY TO BREACHES OF ARTICLE 8 OR THE PARTIES’ INDEMNIFICATION RIGHTS ORobligations under Section 9.6, or in the event of willful misconduct.9.5PERFORMANCE BY OTHERS. THE PARTIES RECOGNIZE THAT EACH PARTY MAY PERFORM SOME OR ALL OF ITS OBLIGATIONS UNDERTHIS LICENSE AGREEMENT THROUGH AFFILIATES, SUBCONTRACTORS OR - IN THE EVENT OF CUREVAC - SUBLICENSEES, provided, however, THAT EACHPARTY WILL REMAIN FULLY RESPONSIBLE AND LIABLE FOR THE PERFORMANCE BY ITS AFFILIATES, SUBCONTRACTORS AND SUBLICENSEES, AND WILL CAUSE ITSAffiliates, subcontractors and Sublicensees to comply with the provisions of this License Agreement in connection therewith.9.6Indemnification.(a)Indemnification by CureVac. CUREVAC WILL INDEMNIFY ARCTURUS, ITS AFFILIATES AND THEIR RESPECTIVEDIRECTORS, OFFICERS, EMPLOYEES, THIRD PARTY LICENSORS AND AGENTS, AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS(COLLECTIVELY, "ARCTURUS INDEMNITEES"), AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM AND AGAINST ANY AND ALL LOSSES,DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND EXPENSES) (COLLECTIVELY, "Losses") INCONNECTION WITH ANY AND ALL SUITS, INVESTIGATIONS, CLAIMS OR DEMANDS OF THIRD PARTIES (COLLECTIVELY, "THIRD PARTY CLAIMS")AGAINST THE ARCTURUS INDEMNITEES TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF: (I) THE BREACH BY CUREVAC OF ANYREPRESENTATION OR WARRANTY OF THIS LICENSE AGREEMENT; (II) ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF ANYCUREVAC INDEMNITEE; OR (III) THE DEVELOPMENT, MANUFACTURE OR COMMERCIALIZATION BY OR ON BEHALF OF CUREVAC OR ANY OF ITSAFFILIATES OR SUBLICENSEES OF LICENSED PRODUCT OTHER THAN IF RELATED TO AN LMD COMPONENT THEREOF SPECIFICALLY PROVIDED BYARCTURUS, EXCEPT IN EACH CASE (I)-(III) TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFULmisconduct on the part of an Arcturus Indemnitee or Arcturus’ breach of this License Agreement.(b)Indemnification by Arcturus. ARCTURUS WILL INDEMNIFY CUREVAC, ITS AFFILIATES AND THEIR RESPECTIVEDIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND THEIR RESPECTIVE SUCCESSORS, HEIRS AND ASSIGNS (COLLECTIVELY, "CureVacIndemnitees"), AND DEFEND AND HOLD EACH OF THEM HARMLESS, FROM AND AGAINST ANY AND ALL LOSSES IN CONNECTION WITH ANY ANDALL THIRD PARTY CLAIMS AGAINST CUREVAC INDEMNITEES TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF: (I) THE BREACH BYARCTURUS OF ANY REPRESENTATION OR WARRANTY OF THIS LICENSE AGREEMENT; OR (II) ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ONTHE PART OF ANY ARCTURUS INDEMNITEE, EXCEPT IN EACH CASE (I) AND (II) TO THE EXTENT ARISING FROM OR OCCURRING AS A RESULT OF THEGROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF A CUREVAC INDEMNITEE OR CUREVAC’S BREACH OF THIS LICENSEAgreement.31 (c)Notice of Claim. ALL INDEMNIFICATION CLAIMS PROVIDED FOR IN SECTIONS 9.6(A) AND 9.6(B) WILL BE MADESOLELY BY SUCH PARTY TO THIS LICENSE AGREEMENT (THE "INDEMNIFIED PARTY"). THE INDEMNIFIED PARTY WILL PROMPTLY NOTIFY THEINDEMNIFYING PARTY (AN "INDEMNIFICATION CLAIM NOTICE") OF ANY LOSSES OR THE DISCOVERY OF ANY FACT UPON WHICH THEINDEMNIFIED PARTY INTENDS TO BASE A REQUEST FOR INDEMNIFICATION UNDER SECTION 9.6(A) AND 9.6(B), BUT IN NO EVENT WILL THEINDEMNIFYING PARTY BE LIABLE FOR ANY LOSSES THAT RESULT FROM ANY DELAY IN PROVIDING SUCH NOTICE. EACH INDEMNIFICATION CLAIMNOTICE MUST CONTAIN A DESCRIPTION OF THE CLAIM AND THE NATURE AND ESTIMATED AMOUNT OF SUCH LOSS (TO THE EXTENT THAT THENATURE AND AMOUNT OF SUCH LOSS IS KNOWN AT SUCH TIME). THE INDEMNIFIED PARTY WILL FURNISH PROMPTLY TO THE INDEMNIFYINGParty copies of all papers and official documents received in respect of any Losses and Third Party Claims.(d)Defense, Settlement, Cooperation and Expenses. (i)Control of Defense. AT ITS OPTION, THE INDEMNIFYING PARTY MAY ASSUME THE DEFENSE OF ANY THIRD PARTYCLAIM BY GIVING WRITTEN NOTICE TO THE INDEMNIFIED PARTY WITHIN THIRTY (30) DAYS AFTER THE INDEMNIFYINGPARTY’S RECEIPT OF AN INDEMNIFICATION CLAIM NOTICE. THE ASSUMPTION OF THE DEFENSE OF A THIRD PARTYCLAIM BY THE INDEMNIFYING PARTY WILL NOT BE CONSTRUED AS AN ACKNOWLEDGMENT THAT THE INDEMNIFYINGPARTY IS LIABLE TO INDEMNIFY THE INDEMNIFIED PARTY IN RESPECT OF THE THIRD PARTY CLAIM, NOR WILL ITCONSTITUTE A WAIVER BY THE INDEMNIFYING PARTY OF ANY DEFENSES IT MAY ASSERT AGAINST THE INDEMNIFIEDPARTY’S CLAIM FOR INDEMNIFICATION. UPON ASSUMING THE DEFENSE OF A THIRD PARTY CLAIM, THEINDEMNIFYING PARTY MAY APPOINT AS LEAD COUNSEL IN THE DEFENSE OF THE THIRD PARTY CLAIM ANY LEGALCOUNSEL SELECTED BY THE INDEMNIFYING PARTY (THE INDEMNIFYING PARTY WILL CONSULT WITH THE INDEMNIFIEDPARTY WITH RESPECT TO SUCH COUNSEL AND A POSSIBLE CONFLICT OF INTEREST OF SUCH COUNSEL RETAINED BY THEINDEMNIFYING PARTY). IN THE EVENT THE INDEMNIFYING PARTY ASSUMES THE DEFENSE OF A THIRD PARTY CLAIM,THE INDEMNIFIED PARTY WILL AS SOON AS POSSIBLE DELIVER TO THE INDEMNIFYING PARTY ALL ORIGINAL NOTICES ANDDOCUMENTS (INCLUDING COURT PAPERS) RECEIVED BY THE INDEMNIFIED PARTY IN CONNECTION WITH THE THIRDPARTY CLAIM. IN THE EVENT THAT IT IS ULTIMATELY DETERMINED THAT THE INDEMNIFYING PARTY IS NOT OBLIGATED TOINDEMNIFY, DEFEND OR HOLD HARMLESS THE INDEMNIFIED PARTY FROM AND AGAINST THE THIRD PARTY CLAIM, THEINDEMNIFIED PARTY WILL REIMBURSE THE INDEMNIFYING PARTY FOR ANY AND ALL COSTS AND EXPENSES (INCLUDINGREASONABLE ATTORNEYS’ FEES AND COSTS OF SUIT) AND ANY THIRD PARTY CLAIMS INCURRED BY THE INDEMNIFYINGParty in its defense of the Third Party Claim. (ii)Right to Participate in Defense. WITHOUT LIMITING SECTION 9.6(D)(I), ANY INDEMNIFIED PARTY WILL BEENTITLED TO PARTICIPATE IN, BUT NOT CONTROL, THE DEFENSE OF SUCH THIRD PARTY CLAIM AND TO ENGAGE COUNSELOF ITS CHOICE FOR SUCH PURPOSE; PROVIDED, HOWEVER, THAT SUCH ENGAGEMENT WILL BE AT THE INDEMNIFIEDPARTY’S OWN COST AND EXPENSE UNLESS (I) THE INDEMNIFYING PARTY HAS FAILED TO PROMPTLY ASSUME THEDEFENSE AND ENGAGE COUNSEL IN ACCORDANCE WITH SECTION 9.6(D)(I) (IN WHICH CASE THE INDEMNIFIED PARTYwill control the defense) or (ii) the interests of the32 INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY WITH RESPECT TO SUCH THIRD PARTY CLAIM ARE SUFFICIENTLYADVERSE TO PROHIBIT THE REPRESENTATION BY THE SAME COUNSEL OF BOTH PARTIES UNDER APPLICABLE LAW, ETHICALRULES OR EQUITABLE PRINCIPLES, IN WHICH CASE THE INDEMNIFYING PARTY WILL ASSUME ONE HUNDRED PERCENT(100%) of any such costs and expenses of counsel for the Indemnified Party. (iii)Settlement. WITH RESPECT TO ANY THIRD PARTY CLAIMS THAT RELATE SOLELY TO THE PAYMENT OF MONEYDAMAGES IN CONNECTION WITH A THIRD PARTY CLAIM AND THAT WILL NOT RESULT IN THE INDEMNIFIED PARTY’SBECOMING SUBJECT TO INJUNCTIVE OR OTHER RELIEF OR OTHERWISE ADVERSELY AFFECTING THE BUSINESS OF THEINDEMNIFIED PARTY IN ANY MANNER, AND AS TO WHICH THE INDEMNIFYING PARTY WILL HAVE ACKNOWLEDGED INWRITING THE OBLIGATION TO INDEMNIFY THE INDEMNIFIED PARTY HEREUNDER, THE INDEMNIFYING PARTY WILL HAVETHE SOLE RIGHT TO AGREE TO THE ENTRY OF ANY JUDGMENT, ENTER INTO ANY SETTLEMENT OR OTHERWISE DISPOSE OFSUCH LOSS, ON SUCH TERMS AS THE INDEMNIFYING PARTY, IN ITS SOLE DISCRETION, WILL DEEMAPPROPRIATE. WITH RESPECT TO ALL OTHER LOSSES IN CONNECTION WITH THIRD PARTY CLAIMS, WHERE THEINDEMNIFYING PARTY HAS ASSUMED THE DEFENSE OF THE THIRD PARTY CLAIM IN ACCORDANCE WITH SECTION9.6(D)(I), THE INDEMNIFYING PARTY WILL HAVE AUTHORITY TO AGREE TO THE ENTRY OF ANY JUDGMENT, ENTER INTOANY SETTLEMENT OR OTHERWISE DISPOSE OF SUCH LOSS PROVIDED IT OBTAINS THE PRIOR WRITTEN CONSENT OF THEINDEMNIFIED PARTY (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD, DELAYED OR CONDITIONED). THEINDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY SETTLEMENT OR OTHER DISPOSITION OF A LOSS BY ANINDEMNIFIED PARTY THAT IS REACHED WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFYINGPARTY. REGARDLESS OF WHETHER THE INDEMNIFYING PARTY CHOOSES TO DEFEND OR PROSECUTE ANY THIRD PARTYCLAIM, NO INDEMNIFIED PARTY WILL ADMIT ANY LIABILITY WITH RESPECT TO OR SETTLE, COMPROMISE ORDISCHARGE, ANY THIRD PARTY CLAIM WITHOUT THE PRIOR WRITTEN CONSENT OF THE INDEMNIFYING PARTY, SUCHconsent not to be unreasonably withheld, delayed or conditioned. (iv)Cooperation. REGARDLESS OF WHETHER THE INDEMNIFYING PARTY CHOOSES TO DEFEND OR PROSECUTE ANYTHIRD PARTY CLAIM, THE INDEMNIFIED PARTY WILL, AND WILL USE DILIGENT EFFORTS TO CAUSE EACH OTHERINDEMNIFIED PARTY TO, COOPERATE IN THE DEFENSE OR PROSECUTION THEREOF AND WILL FURNISH SUCH RECORDS,INFORMATION AND TESTIMONY, PROVIDE SUCH WITNESSES AND ATTEND SUCH CONFERENCES, DISCOVERYPROCEEDINGS, HEARINGS, TRIALS AND APPEALS AS MAY BE REASONABLY REQUESTED IN CONNECTION THEREWITH, ATTHE INDEMNIFYING PARTY’S EXPENSE. SUCH COOPERATION WILL INCLUDE ACCESS DURING NORMAL BUSINESSHOURS AFFORDED TO THE INDEMNIFYING PARTY TO, AND REASONABLE RETENTION BY THE INDEMNIFIED PARTY OF,RECORDS AND INFORMATION THAT ARE REASONABLY RELEVANT TO SUCH THIRD PARTY CLAIM, AND MAKINGINDEMNIFIED PARTIES AND OTHER EMPLOYEES AND AGENTS AVAILABLE ON A MUTUALLY CONVENIENT BASIS TOPROVIDE ADDITIONAL INFORMATION AND EXPLANATION OF ANY MATERIAL PROVIDED HEREUNDER, AND THEINDEMNIFYING PARTY WILL REIMBURSE THE INDEMNIFIED PARTY FOR ALL ITS REASONABLE OUT-OF-POCKET COSTS ANDexpenses in connection therewith. 33 (v)Costs and Expenses. EXCEPT AS PROVIDED ABOVE IN THIS SECTION 9.6(D), THE COSTS AND EXPENSES,INCLUDING ATTORNEYS’ FEES AND EXPENSES, INCURRED BY THE INDEMNIFIED PARTY IN CONNECTION WITH ANYCLAIM WILL BE REIMBURSED ON A CALENDAR QUARTER BASIS BY THE INDEMNIFYING PARTY, WITHOUT PREJUDICE TOthe indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject toREFUND IN THE EVENT THE INDEMNIFYING PARTY IS ULTIMATELY HELD NOT TO BE OBLIGATED TO INDEMNIFY THEIndemnified Party.9.7Insurance. EACH PARTY WILL MAINTAIN AT ITS SOLE COST AND EXPENSE, AN ADEQUATE LIABILITY INSURANCE OR SELF-INSURANCEPROGRAM (INCLUDING PRODUCT LIABILITY INSURANCE) TO PROTECT AGAINST POTENTIAL LIABILITIES AND RISK ARISING OUT OF ACTIVITIES TO BE PERFORMEDUNDER THIS LICENSE AGREEMENT, AND ANY AGREEMENT RELATED HERETO AND UPON SUCH TERMS (INCLUDING COVERAGES, DEDUCTIBLE LIMITS AND SELF-INSURED RETENTIONS) AS ARE CUSTOMARY IN THE RESPECTIVE INDUSTRY OF SUCH PARTY FOR THE ACTIVITIES TO BE CONDUCTED BY SUCH PARTY UNDER THISLICENSE AGREEMENT. SUBJECT TO THE PRECEDING SENTENCE, SUCH LIABILITY INSURANCE OR SELF-INSURANCE PROGRAM WILL INSURE AGAINST ALL TYPESOF LIABILITY, INCLUDING PERSONAL INJURY, PHYSICAL INJURY OR PROPERTY DAMAGE ARISING OUT OF THE MANUFACTURE, SALE, USE, DISTRIBUTION ORMARKETING OF LICENSED PRODUCT. THE COVERAGE LIMITS SET FORTH HEREIN WILL NOT CREATE ANY LIMITATION ON A PARTY’S LIABILITY TO THE OTHERunder this License Agreement.10.Term and Termination.10.1Term. (a)THIS LICENSE AGREEMENT WILL COMMENCE AS OF THE LICENSE AGREEMENT EFFECTIVE DATE AND, UNLESSSOONER TERMINATED IN ACCORDANCE WITH THE TERMS HEREOF OR BY MUTUAL WRITTEN CONSENT, WILL CONTINUE ON A LICENSED PRODUCT-BY-LICENSEDPRODUCT AND A COUNTRY-BY-COUNTRY BASIS, UNTIL THERE ARE NO MORE PAYMENTS OWED TO ARCTURUS IN SUCH COUNTRY (THE LONGEST SUCH PERIOD OFTIME HEREUNDER, THE "Term"). UPON THERE BEING NO MORE SUCH PAYMENTS HEREUNDER IN SUCH COUNTRY, THE LICENSE CONTAINED IN SECTION2.1 WILL BECOME IRREVOCABLE, PERPETUAL AND FULLY PAID UP AND WILL REMAIN IN EFFECT WITH RESPECT TO SUCH LICENSED PRODUCT IN SUCHcountry.(b)IF THE TARGET TO WHICH THIS LICENSE AGREEMENT RELATES IS CHOSEN BY THE PARTIES FOR CO-DEVELOPMENTUNDER THE CO-DEVELOPMENT AGREEMENT, THIS LICENSE AGREEMENT WILL AUTOMATICALLY TERMINATE UPON THE WRITTEN AGREEMENT OF THE PARTIESTO INCLUDE SUCH PROGRAMS UNDER THE CO-DEVELOPMENT AGREEMENT, IN ACCORDANCE WITH SECTION 4.2(A) OF THE CO-DEVELOPMENTAgreement.(c)THE PARTIES AGREE THAT THIS AGREEMENT AND THE CO-DEVELOPMENT AGREEMENT RELATE TO DIFFERENT PROJECTSAND, THEREFORE, THE VALIDITY, TERM AND TERMINATION OF THIS AGREEMENT SHALL BE INDEPENDENT FROM THE VALIDITY, TERM AND TERMINATION OF THECo-Development Agreement.10.2Termination by Arcturus.(a)Breach. ARCTURUS WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL UPON DELIVERY OF WRITTENNOTICE TO CUREVAC IN THE EVENT OF ANY MATERIAL BREACH BY CUREVAC OF ANY TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT,provided that such breach has not been cured within […***…] after written ***Confidential Treatment Requested34 notice thereof is given by Arcturus to CureVac specifying the nature of the alleged breach.(b)Disputed Breach. IF CUREVAC DISPUTES IN GOOD FAITH THE EXISTENCE OR MATERIALITY OF A BREACH SPECIFIED IN ANOTICE PROVIDED IN ACCORDANCE WITH SECTION 10.2(A), AND CUREVAC PROVIDES ARCTURUS NOTICE OF SUCH DISPUTE WITHIN SUCH […***…] PERIOD, THEN ARCTURUS SHALL NOT HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT UNDER SECTION 10.2(A) UNLESS ANDUNTIL IT IS FINALLY DETERMINED, IN ACCORDANCE WITH SECTION 11.1, THAT CUREVAC HAS MATERIALLY BREACHED THIS LICENSE AGREEMENTAND THAT CUREVAC FAILS TO CURE SUCH BREACH WITHIN […***…] FOLLOWING SUCH DECISION. IT IS UNDERSTOOD AND AGREED THATDURING THE PENDENCY OF SUCH DISPUTE, ALL OF THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT SHALL REMAIN IN EFFECT AND THEPARTIES SHALL CONTINUE TO PERFORM ALL OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER. DURING THE PENDENCY OF ANY SUCH DISPUTE,CureVac shall pay to Arcturus all Milestone Payments and royalty payments set forth herein. (c)Patent Challenge. EXCEPT TO THE EXTENT THE FOLLOWING IS UNENFORCEABLE UNDER THE LAWS OF A PARTICULARJURISDICTION, ARCTURUS MAY TERMINATE THIS LICENSE AGREEMENT ON A PATENT-BY-PATENT BASIS UPON DELIVERY OF […***…] PRIORwritten notice to CureVac (i)IF CUREVAC OR ITS AFFILIATES, INDIVIDUALLY OR IN ASSOCIATION WITH ANY OTHER PERSON OR ENTITY, COMMENCES A LEGALACTION CHALLENGING THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY ARCTURUS TECHNOLOGY PATENTS ANYWHERE IN THEworld and does not withdraw or settle such challenge within the […***…] cure period; or (ii)IF A SUBLICENSEE OF CUREVAC, INDIVIDUALLY OR IN ASSOCIATION WITH ANY OTHER PERSON OR ENTITY, COMMENCES A LEGALACTION CHALLENGING THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY ARCTURUS TECHNOLOGY PATENTS ANYWHERE IN THEWORLD AND CUREVAC DOES NOT TERMINATE THE CORRESPONDING SUBLICENSE AGREEMENT OR SUCH CHALLENGE IS NOTwithdrawn or settled (by such sublicensee or CureVac) within the […***…] cure period. 10.3Termination by CureVac; Certain Remedy for Breach.(a)Breach. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL UPON DELIVERY OF WRITTENNOTICE TO ARCTURUS IN THE EVENT OF ANY MATERIAL BREACH BY ARCTURUS OF ANY TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT,PROVIDED THAT SUCH BREACH HAS NOT BEEN CURED WITHIN […***…] AFTER WRITTEN NOTICE THEREOF IS GIVEN BY CUREVAC TO ARCTURUSspecifying the nature of the alleged breach.(b)Discretionary Termination. CUREVAC WILL HAVE THE RIGHT TO TERMINATE THIS LICENSE AGREEMENT IN FULL AT ITSDISCRETION FOR ANY REASON BY DELIVERING WRITTEN NOTICE TO ARCTURUS, SUCH TERMINATION TO BE EFFECTIVE […***…] FOLLOWING THEdate of such notice.(c)Maintenance of License. IN THE EVENT OF A MATERIAL BREACH BY ARCTURUS OF SECTIONS 2.2(C) OR 3.2, IF SUCHBREACH HAS NOT BEEN CURED WITHIN […***…] AFTER WRITTEN NOTICE THEREOF, CUREVAC MAY NOTIFY ARCTURUS IN WRITING THAT THELicense***Confidential Treatment Requested35 AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT, PROVIDED THAT ANY REMAINING PAYMENTS TO ARCTURUS PURSUANT TO SECTIONS 4.1,4.2 and 4.3 following such notification shall be reduced by […***…].10.4RIGHTS UPON BANKRUPTCY. ALL RIGHTS AND LICENSES GRANTED UNDER OR PURSUANT TO THIS LICENSE AGREEMENT BYARCTURUS OR ITS AFFILIATES ARE, AND WILL OTHERWISE BE DEEMED TO BE, FOR PURPOSES OF SECTION 365(N) OF THE U.S. BANKRUPTCY CODE,LICENSES OF RIGHT TO "INTELLECTUAL PROPERTY" AS DEFINED UNDER SECTION 101 OF THE U.S. BANKRUPTCY CODE. THE PARTIES AGREE THAT CUREVACAND ITS AFFILIATES AND SUBLICENSEES, AS LICENSEES OF SUCH RIGHTS UNDER THIS LICENSE AGREEMENT, WILL RETAIN AND MAY FULLY EXERCISE ALL OFTHEIR RIGHTS AND ELECTIONS UNDER THE U.S. BANKRUPTCY CODE AND ANY FOREIGN COUNTERPARTS THERETO. WITHOUT LIMITING THE PARTIES’ RIGHTSUNDER SECTION 365(N) OF THE U.S. BANKRUPTCY CODE, IF A CASE UNDER U.S. BANKRUPTCY CODE IS COMMENCED BY OR AGAINST A PARTY, THEOTHER PARTY SHALL BE ENTITLED TO A COPY OF ANY AND ALL SUCH INTELLECTUAL PROPERTY AND ALL EMBODIMENTS OF SUCH INTELLECTUAL PROPERTY, ANDTHE SAME, IF NOT IN THE POSSESSION OF SUCH OTHER PARTY, SHALL BE PROMPTLY DELIVERED TO IT (I) BEFORE THIS LICENSE AGREEMENT IS REJECTED BYOR ON BEHALF OF THE BANKRUPT PARTY, WITHIN THIRTY (30) DAYS AFTER THE OTHER PARTY’S WRITTEN REQUEST, UNLESS THE BANKRUPT PARTY, OR ITS TRUSTEEOR RECEIVER, ELECTS WITHIN THIRTY (30) DAYS TO CONTINUE TO PERFORM ALL OF ITS OBLIGATIONS UNDER THIS LICENSE AGREEMENT, OR (II) AFTER ANYREJECTION OF THIS LICENSE AGREEMENT BY OR ON BEHALF OF THE BANKRUPT PARTY, IF NOT PREVIOUSLY DELIVERED AS PROVIDED UNDER CLAUSE (I)ABOVE. ALL RIGHTS OF THE PARTIES UNDER THIS SECTION 10.4 AND UNDER SECTION 365(N) OF THE U.S. BANKRUPTCY CODE ARE IN ADDITION TO ANDNOT IN SUBSTITUTION OF ANY AND ALL OTHER RIGHTS, POWERS, AND REMEDIES THAT EACH PARTY MAY HAVE UNDER THIS LICENSE AGREEMENT, UNDER THEU.S. BANKRUPTCY CODE, AND ANY OTHER APPLICABLE LAWS. THE NON-BANKRUPT PARTY SHALL HAVE THE RIGHT TO PERFORM THE OBLIGATIONS OF THEBANKRUPT PARTY HEREUNDER WITH RESPECT TO SUCH INTELLECTUAL PROPERTY, BUT NEITHER SUCH PROVISION NOR SUCH PERFORMANCE BY THE NON-bankrupt Party shall release the bankrupt Party from any such obligation or liability for failing to perform it.10.5Effects of Termination. (a)UPON TERMINATION (BUT NOT EXPIRATION PURSUANT TO SECTION 10.1) OF THIS LICENSE AGREEMENT FOR ANYreason: (i)Cessation of Rights. EXCEPT AS EXPRESSLY PROVIDED HEREIN, INCLUDING SECTIONS 8.5, 10.5(A) AND AS NECESSARY FORCUREVAC TO SELL OFF EXISTING INVENTORY AS PERMITTED UNDER SECTION 10.5(III) BELOW, ALL RIGHTS AND LICENSES GRANTEDBY ARCTURUS TO CUREVAC UNDER THIS LICENSE AGREEMENT WILL TERMINATE. CUREVAC SHALL WIND DOWN THEDEVELOPMENT (INCLUDING ANY CLINICAL TRIALS), MANUFACTURE AND COMMERCIALIZATION OF THE LICENSED PRODUCT INcompliance with all applicable Laws and at its own cost and expense. (ii)Sell Off. Notwithstanding the termination of CureVac's licenses and other rights under this License Agreement,CUREVAC SHALL RETAIN THE RIGHT TO DISTRIBUTE, SELL OR OTHERWISE DISPOSE OF ITS EXISTING INVENTORY OF THE LICENSEDPRODUCTS, IN EACH CASE THAT IS INTENDED FOR DISTRIBUTION, SALE OR DISPOSITION IN THE TERRITORY, FOR A PERIOD OF NOTmore than six (6) months following the date of the effective termination, as though this License Agreement hadNOT BEEN TERMINATED, AND SUCH DISTRIBUTION, SALE OR OTHER DISPOSITION SHALL NOT CONSTITUTE INFRINGEMENT OF THEPATENTS OR OTHER INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS OF ARCTURUS OR ITS AFFILIATES. CUREVAC'S RIGHT TOdistribute, sell or otherwise dispose of its existing inventory of the Licensed Products pursuant to this ***Confidential Treatment Requested36 Section 10.5(a)(ii) shall be subject to CureVac's continuing obligation to pay royalties with respect to the NetSales.(b)UPON TERMINATION PURSUANT TO SECTION 10.1(B), ARCTURUS SHALL REFUND TO CUREVAC THE OPTION EXERCISE FEE(AS DEFINED IN THE DEVELOPMENT AND OPTION AGREEMENT), THE MILESTONE PAYMENTS ALREADY PAID BY CUREVAC AND ALL OTHERpayments made by CureVac in relation to this License Agreement.10.6Survival. IN ADDITION TO THE TERMINATION CONSEQUENCES SET FORTH IN SECTION 10.5, THE FOLLOWING PROVISIONS WILLSURVIVE TERMINATION OR EXPIRATION OF THIS LICENSE AGREEMENT: SECTIONS 1, 4 (TO THE EXTENT OF ANY OUTSTANDING PAYMENTS ACCRUED AS OF THEEFFECTIVE DATE OF TERMINATION), 5, 8, 9.4, 9.6, 10.5, 10.6 AND 11. TERMINATION OR EXPIRATION OF THIS LICENSE AGREEMENT WILL NOT RELIEVETHE PARTIES OF ANY LIABILITY OR OBLIGATION WHICH ACCRUED HEREUNDER PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR EXPIRATION NORPRECLUDE EITHER PARTY FROM PURSUING ALL RIGHTS AND REMEDIES IT MAY HAVE HEREUNDER OR AT LAW OR IN EQUITY WITH RESPECT TO ANY BREACH OFTHIS LICENSE AGREEMENT NOR PREJUDICE EITHER PARTY’S RIGHT TO OBTAIN PERFORMANCE OF ANY OBLIGATION. ALL OTHER RIGHTS AND OBLIGATIONS WILLterminate upon expiration of this License Agreement.11.General Provisions.11.1Dispute Resolution.(a)Disputes. DISPUTES ARISING UNDER OR IN CONNECTION WITH THIS LICENSE AGREEMENT WILL BE RESOLVED PURSUANTTO THIS SECTION 11.1; provided, however, THAT IN THE EVENT A DISPUTE CANNOT BE RESOLVED WITHOUT AN ADJUDICATION OF THE RIGHTSOR OBLIGATIONS OF A THIRD PARTY (OTHER THAN ANY CUREVAC INDEMNITEES OR ARCTURUS INDEMNITEES IDENTIFIED IN SECTION 9.6), THEdispute procedures set forth Sections 11.1(c) and 11.1(c) will be inapplicable as to such dispute.(b)Dispute Escalation. IN THE EVENT OF A DISPUTE BETWEEN THE PARTIES, THE PARTIES WILL FIRST ATTEMPT IN GOODFAITH TO RESOLVE SUCH DISPUTE BY NEGOTIATION AND CONSULTATION BETWEEN THEMSELVES. IN THE EVENT THAT SUCH DISPUTE IS NOTRESOLVED ON AN INFORMAL BASIS WITHIN THIRTY (30) DAYS, EITHER PARTY MAY, BY WRITTEN NOTICE TO THE OTHER, HAVE SUCH DISPUTEREFERRED TO EACH PARTY’S CHIEF EXECUTIVE OFFICER OR HIS OR HER DESIGNEE (WHO WILL BE A SENIOR EXECUTIVE WITH THE APPROPRIATEAUTHORITY TO DETERMINE THE MATTER FOR SUCH PARTY), WHO WILL ATTEMPT IN GOOD FAITH TO RESOLVE SUCH DISPUTE BY NEGOTIATION ANDconsultation for a thirty (30) day period following receipt of such written notice(c)Dispute Resolution. IN THE EVENT THE CHIEF EXECUTIVE OFFICERS OF THE PARTIES ARE NOT ABLE TO RESOLVE SUCHDISPUTE AS SET FORTH ABOVE, THE PARTIES AGREE TO TRY TO SOLVE SUCH DISPUTE AMICABLY BY MEDIATION. THE PARTIES SHALL CONDUCT AMEDIATION PROCEDURE ACCORDING TO THE MEDIATION RULES OF THE WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO) IN EFFECT ONTHE DATE OF THE COMMENCEMENT OF THE MEDIATION PROCEEDINGS. THE LOCATION OF THE MEDIATION PROCEEDINGS WILL BE NEW YORKCITY, NEW YORK, U.S.. THE NUMBER OF MEDIATORS WILL BE ONE (1). THE LANGUAGE OF THE MEDIATION PROCEEDINGS WILL BEENGLISH. IF THE DISPUTE HAS NOT BEEN SETTLED PURSUANT TO THE SAID RULES WITHIN SIXTY (60) DAYS FOLLOWING THE FILING OF A REQUESTFOR MEDIATION OR WITHIN SUCH OTHER PERIOD AS THE PARTIES MAY AGREE IN WRITING, EITHER PARTY MAY SUBMIT THE DISPUTE TO FINAL ANDbinding arbitration. Any dispute relating to the validity37 PERFORMANCE, CONSTRUCTION OR INTERPRETATION OF THIS LICENSE AGREEMENT, WHICH CANNOT BE RESOLVED AMICABLY BETWEEN THEPARTIES AFTER FOLLOWING THE PROCEDURE SET FORTH IN THIS SECTION 11.1, SHALL BE SUBMITTED TO ARBITRATION IN ACCORDANCE WITH THEARBITRATION RULES OF WIPO IN EFFECT ON THE DATE OF THE COMMENCEMENT OF THE ARBITRATION PROCEEDINGS. THE LOCATION OF THEARBITRATION PROCEEDINGS WILL BE NEW YORK CITY, NEW YORK, U.S.. THE NUMBER OF ARBITRATORS WILL BE THREE (3). THE LANGUAGEOF THE ARBITRATION PROCEEDING WILL BE ENGLISH. THE DECISION OF THE ARBITRATORS SHALL BE FINAL AND BINDING UPON THE PARTIES(absent manifest error on the part of the arbitrator(s)) and enforceable in any court of competent jurisdiction.11.2RELATIONSHIP OF PARTIES. NOTHING IN THIS LICENSE AGREEMENT IS INTENDED OR WILL BE DEEMED TO CONSTITUTE APARTNERSHIP, AGENCY, EMPLOYER-EMPLOYEE OR JOINT VENTURE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY WILL INCUR ANY DEBTS OR MAKE ANYCOMMITMENTS FOR THE OTHER, EXCEPT TO THE EXTENT, IF AT ALL, SPECIFICALLY PROVIDED THEREIN. THERE ARE NO EXPRESS OR IMPLIED THIRD PARTYBENEFICIARIES HEREUNDER (EXCEPT FOR CUREVAC INDEMNITEES AND ARCTURUS INDEMNITEES FOR PURPOSES OF SECTION 9.6). FOR CLARITY, CUREVACDOES NOT GRANT TO ARCTURUS ANY RIGHTS OR LICENSES UNDER THIS LICENSE AGREEMENT TO ANY CUREVAC TECHNOLOGY OR INTELLECTUAL PROPERTYrights.11.3COMPLIANCE WITH LAW. EACH PARTY WILL PERFORM OR CAUSE TO BE PERFORMED ANY AND ALL OF ITS OBLIGATIONS OR THEexercise of any and all of its rights hereunder in good scientific manner and in compliance with all applicable Law.11.4Governing Law. THIS LICENSE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OFthe State of New York, U.S., without respect to its conflict of Laws rules.11.5Counterparts; Facsimiles. THIS LICENSE AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF WHICHWILL BE DEEMED AN ORIGINAL, AND ALL OF WHICH TOGETHER WILL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT. FACSIMILE OR PDF EXECUTIONAND DELIVERY OF THIS LICENSE AGREEMENT BY EITHER PARTY WILL CONSTITUTE A LEGAL, VALID AND BINDING EXECUTION AND DELIVERY OF THIS LICENSEAgreement by such Party.11.6Headings. ALL HEADINGS IN THIS LICENSE AGREEMENT ARE FOR CONVENIENCE ONLY AND WILL NOT AFFECT THE MEANING OFany provision hereof.11.7WAIVER OF RULE OF CONSTRUCTION. EACH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL IN CONNECTION WITHTHE REVIEW, DRAFTING AND NEGOTIATION OF THIS LICENSE AGREEMENT. ACCORDINGLY, THE RULE OF CONSTRUCTION THAT ANY AMBIGUITY IN THISLicense Agreement will be construed against the drafting party will not apply.11.8Interpretation. WHENEVER ANY PROVISION OF THIS LICENSE AGREEMENT USES THE TERM "INCLUDING" (OR "INCLUDES"),SUCH TERM WILL BE DEEMED TO MEAN "INCLUDING WITHOUT LIMITATION" (OR "INCLUDES WITHOUT LIMITATIONS"). "HEREIN," "HEREBY," "HEREUNDER,""HEREOF" AND OTHER EQUIVALENT WORDS REFER TO THIS LICENSE AGREEMENT AS AN ENTIRETY AND NOT SOLELY TO THE PARTICULAR PORTION OF THISLICENSE AGREEMENT IN WHICH ANY SUCH WORD IS USED. ALL DEFINITIONS SET FORTH HEREIN WILL BE DEEMED APPLICABLE WHETHER THE WORDSDEFINED ARE USED HEREIN IN THE SINGULAR OR THE PLURAL. UNLESS OTHERWISE PROVIDED, ALL REFERENCES TO SECTIONS AND APPENDICES IN THISLICENSE AGREEMENT ARE TO SECTIONS AND APPENDICES OF THIS LICENSE AGREEMENT. REFERENCES TO ANY SECTIONS INCLUDE SECTIONS ANDsubsections that are part of the related Section.38 11.9BINDING EFFECT. THIS LICENSE AGREEMENT WILL INURE TO THE BENEFIT OF AND BE BINDING UPON THE PARTIES, THEIRAffiliates, and their respective lawful successors and assigns.11.10Assignment. THIS LICENSE AGREEMENT MAY NOT BE ASSIGNED BY EITHER PARTY, NOR MAY EITHER PARTY DELEGATE ITSOBLIGATIONS OR OTHERWISE TRANSFER LICENSES OR OTHER RIGHTS CREATED BY THIS LICENSE AGREEMENT, EXCEPT AS EXPRESSLY PERMITTED HEREUNDER OROTHERWISE WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY, WHICH CONSENT WILL NOT BE UNREASONABLY WITHHELD, DELAYED ORCONDITIONED; PROVIDED THAT EITHER PARTY MAY ASSIGN THIS LICENSE AGREEMENT WITHOUT SUCH CONSENT TO AN AFFILIATE OR TO ITS SUCCESSOR INCONNECTION WITH SALE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS OR BUSINESS OR THAT PORTION OF ITS BUSINESS PERTAINING TO THE SUBJECT MATTER OFthis License Agreement (whether by merger, consolidation or otherwise).11.11Notices. ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED TO BE GIVEN PURSUANTTO THIS LICENSE AGREEMENT WILL BE IN WRITING AND WILL BE DEEMED TO HAVE BEEN DULY GIVEN UPON THE DATE OF RECEIPT IF DELIVERED BY HAND,RECOGNIZED INTERNATIONAL OVERNIGHT COURIER, OR REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID OR FACSIMILE (ANDPROMPTLY CONFIRMED BY PERSONAL DELIVERY, REGISTERED OR CERTIFIED MAIL OR OVERNIGHT COURIER) TO THE FOLLOWING ADDRESSES (OR TO SUCHaddress as a Party may subsequently provide by written notice in accordance with this Section 11.11):If to CureVac:CureVac AGPaul-Ehrlich-Str. 1572076 TübingenGermanyAttention: CEO and General CounselFax: +49 7071 9883 - 1101 If to Arcturus:Arcturus Therapeutics Inc.10628 Science Center DriveSuite 200San Diego, California 92121USAAttn:Chief Executive OfficerCopy to: General CounselFax: (858) 300-5028 with a copy to (which copy shall not constitute notice):Cooley LLP3175 Hanover St.Palo Alto, CA 94303Attn: Glen Y. SatoFax: (650) 849-7400 11.12AMENDMENT AND WAIVER. THIS LICENSE AGREEMENT MAY BE AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIEDONLY BY MEANS OF A WRITTEN INSTRUMENT SIGNED BY BOTH PARTIES; PROVIDED THAT ANY UNILATERAL UNDERTAKING OR WAIVER MADE BY ONE PARTY INfavor of the other will be enforceable if undertaken in a writing signed by the Party to be charged with the 39 UNDERTAKING OR WAIVER. ANY WAIVER OF ANY RIGHTS OR FAILURE TO ACT IN A SPECIFIC INSTANCE WILL RELATE ONLY TO SUCH INSTANCE AND WILL NOT BEconstrued as an agreement to waive any rights or fail to act in any other instance, whether or not similar.11.13Severability. IN THE EVENT THAT ANY PROVISION OF THIS LICENSE AGREEMENT WILL, FOR ANY REASON, BE HELD TO BEINVALID OR UNENFORCEABLE IN ANY RESPECT, SUCH INVALIDITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER PROVISION HEREOF, AND THE PARTIESwill negotiate in good faith to modify the License Agreement to preserve (to the extent possible) their original intent.11.14ENTIRE AGREEMENT. THIS LICENSE AGREEMENT TOGETHER WITH THE DEVELOPMENT AND OPTION AGREEMENT AND ANYOTHER LICENSE AGREEMENTS ENTERED INTO DURING THE TERM PURSUANT TO THE DEVELOPMENT AND OPTION AGREEMENT ARE THE SOLE AGREEMENT WITHrespect to the subject matter hereof and supersedes all other agreements and understandings between the Parties with respect to same.11.15FORCE MAJEURE. NEITHER ARCTURUS NOR CUREVAC WILL BE LIABLE FOR FAILURE OF OR DELAY IN PERFORMING OBLIGATIONSSET FORTH IN THIS LICENSE AGREEMENT (OTHER THAN ANY OBLIGATION TO PAY MONIES WHEN DUE), AND NEITHER WILL BE DEEMED IN BREACH OF SUCHOBLIGATIONS, IF SUCH FAILURE OR DELAY IS DUE TO NATURAL DISASTERS OR ANY CAUSES REASONABLY BEYOND THE CONTROL OF ARCTURUS OR CUREVAC;PROVIDED THAT THE PARTY AFFECTED WILL PROMPTLY NOTIFY THE OTHER OF THE FORCE MAJEURE CONDITION AND WILL EXERT REASONABLE EFFORTS TOeliminate, cure or overcome any such causes and to resume performance of its obligations as soon as possible. 40 Appendix 1.3Description of the Arcturus LMD Technology[To be completed in accordance with Section 5.2 of the Development and Option Agreement.] Appendix 1.4Patents and Know-How within the Arcturus Technologyas of the License Agreement Effective Date[To be updated in accordance with Section 5.2 of the Development and Option Agreement.] (C)Patents ARCTURUS LMD TECHNOLOGY[…***…]***Confidential Treatment Requested […***…] (D)Know-How[…***…] ***Confidential Treatment Requested Appendix 1.28Joint Interest Patents[To be completed in accordance with Section 5.2 of the Development and Option Agreement and updated during the Term] Appendix 1.50Pre-Existing Restrictions •[…***…] ***Confidential Treatment Requested Appendix 1.59Description of the TargetThe description for a Target described in sub-clause (a) of the definition of Target shall include the following information:a.[…***…];b.[…***…]; andc.[…***…]; andd.[…***…]The description for a Target described in sub-clause (b) of the definition of Target shall include the following information: b.[…***…] ***Confidential Treatment Requested The description for a Target described in sub-clause (c) of the definition of Target shall include the following information:a.[…***…]; andb.[…***…] ***Confidential Treatment Requested Exhibit 4.13***Text Omitted and Filed Separatelywith the Securities and Exchange Commission.Confidential Treatment RequestedUnder 17 C.F.R. Sections 200.80(b)(4) and Rule 24b-2CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTThis CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENT (this “Agreement”) is made as of 1January 2018 (the “Effective Date”), by and between Arcturus Therapeutics, Inc., a Delaware corporation with offices at 10628Science Center Drive, Suite 200, San Diego, California 92121, U.S. (“Arcturus”), and CureVac AG, a German stock corporationwith offices at Paul-Ehrlich-Strasse 15, 72076 Tuebingen, Germany (“CureVac”). CureVac and Arcturus are referred to in thisAgreement individually as a “Party” and collectively as the “Parties”. RECITALSWHEREAS, Arcturus has expertise and intellectual property relating to the targeted delivery of nucleic acid therapeutics,including its proprietary lipid-mediated delivery technology, and is developing an mRNA-based product for treating ornithinetranscarbamylase (“OTC”) deficiency, among other programs;WHEREAS, CureVac has expertise and intellectual property relating to mRNA therapeutics, in particular mRNAConstructs (as defined below);WHEREAS, Arcturus and CureVac desire to establish a collaboration for the co-development and, if successful,commercialization of such OTC product, incorporating CureVac’s or Arcturus’ mRNA technology in combination with Arcturus’slipid-mediated delivery system; andWHEREAS, Arcturus desires to grant CureVac an option to co-develop one additional mRNA therapeutics program ofArcturus, and CureVac desires to grant Arcturus an option to co-develop up to two of CureVac’s mRNA therapeutics programs,which co-development programs, if successful, would be commercialized by the Parties;WHEREAS, the Parties have entered in parallel into a Development and Option Agreement of even date herewith(“Development and Option Agreement”) from which Reserved Target List potential Products for Development in the Field may beselected for Development, Manufacture and Commercialization pursuant to this Agreement;NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receiptand sufficiency of which are hereby acknowledged, CureVac and Arcturus hereby agree as follows: CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy ARTICLE 1DEFINITIONSThe terms in this Agreement with initial letters capitalized shall have the meanings set forth below, or the meaning asdesignated in the indicated places throughout this Agreement.1.1 “Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under commoncontrol with that Party, as of the Effective Date or thereafter during the Term, but only for so long as such control exists. For thepurpose of this definition only, “control” (including, with correlative meaning, the terms “controlled by” and “under the commoncontrol”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of themanagement and policies of such Person, whether by the ownership of more than fifty percent (50%) of the voting stocking of suchPerson, by contract or otherwise. Regarding CureVac, Affiliate shall not include [*…***…].1.2“Alliance Manager” is defined in Section 2.7.1.3“Approved Third Party Payments” is defined in Section 3.5.1.4“Arcturus Clinical Development Plan” is defined in Section 4.5(c).1.5“Arcturus Know-How” means, subject to Section 14.2, all Know-How that is (a) Controlled byArcturus or its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture orCommercialization of any Product in the Field. Arcturus Know-How includes Arcturus’s interest in Joint Know-How. ArcturusKnow-How existing as of the Effective Date is listed in Exhibit 1.5. 1.6“Arcturus LMD Technology” means Arcturus’s proprietary lipid-mediated delivery technology fordelivering RNA therapeutics, including the LUNAR™ platform, a description of which technology, as in existence as of the EffectiveDate, is set forth on Exhibit 1.6.1.7“Arcturus mRNA Construct” means an mRNA Construct that embodies the Arcturus mRNATechnology.1.8“Arcturus mRNA Technology” means technology Controlled by Arcturus or its Affiliates related tomRNA Constructs, a description of which technology, as in existence as of the Effective Date, is set forth on Exhibit 1.8.1.9“Arcturus Option” is defined in Section 4.6(a).1.10“Arcturus Patents” means, subject to Section 14.2, all Patent Rights that are (a) Controlled by Arcturusor its Affiliates as of the Effective Date or during the Term, and (b) reasonably required for the Development, Manufacture orCommercialization of any Product in the Field. Arcturus Patents existing as of the Effective Date are listed in Exhibit 1.5. ArcturusPatents include Arcturus’s interest in Joint Patents. ***Confidential Treatment Requested2 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.11“Arcturus Product” means any product being developed in the Arcturus Program that contains an ArcturusmRNA Construct formulated with the Arcturus LMD Technology.1.12“Arcturus Product Marks” is defined in Section 9.9.1.13“Arcturus Program” means one of Arcturus’s proprietary drug development programs to developmRNA therapeutics, as determined pursuant to Section 4.2.1.14“Arcturus Technology” means the Arcturus Patents and Arcturus Know-How.1.15“Business Day” means a day other than a Saturday, Sunday, or bank or other public holiday in SanDiego, California, USA or Tübingen, Germany or Boston, Massachusetts, USA.1.16“Change of Control” with respect to a Party, shall be deemed to have occurred if during the Term (i)any person or entity is or becomes the "beneficial owner", directly or indirectly, of shares of capital stock or other interests (includingpartnership interests) of a Party’s then outstanding and normally entitled (without regard to the occurrence of any contingency) to votein the election of the directors, managers or similar supervisory positions of a Party’s representing fifty percent (50%) or more of thetotal voting power of all outstanding classes of voting stock of such Party or has the power, directly or indirectly, to elect a majority ofthe members of the Party’s board of directors, or similar governing body; or (ii) such Party enters into a merger, consolidation or similartransaction with another person or entity; or (iii) such Party sells or transfers to any Third Party, in one (1) or more related transactions,properties or assets representing all or substantially all of such Party’s consolidated total assets to which this Agreement relates;provided, however, that(a)subsections (i) to (iii) shall only apply if the person or entity or Third Party acquiringcontrol is a pharmaceutical company which has experience in developing and commercializing pharmaceutical products (i.e., is astrategic, not financial investor or partner) or a competitor, i.e., a company whose business consists principally of mRNA development,manufacturing and/or commercialization and(b)a bone fide financing transaction with Third Parties that does not otherwise meet therequirements of subsection (a) shall not constitute a Change of Control.1.17“Claims” means all liability, loss, damage, claim, injury, costs or expenses (including reasonableattorneys’ fees and expenses of litigation) of any kind arising from Third Party demands, claims, actions and proceedings (whethercriminal or civil, in contract, tort or otherwise).1.18“Clinical Development Costs” means, with respect to a Product, the costs and expenses for Developingsuch Product under a Clinical Development Plan, which shall include FTE Costs incurred (at the FTE Costs), and the direct ThirdParty costs, in each case without mark-up or administrative fee, recorded as an expense, by or on behalf of a Party or any of itsAffiliates that are specifically identifiable or reasonably and directly allocable to those activities conducted in accordance with theapplicable Clinical Development Plan. Except for costs in clause (d) below, Clinical Development Costs shall be limited to (i) those 3 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy activities that are specifically identified in the applicable Clinical Development Plan and (ii) those costs contained in the budget therein.Subject to the foregoing, Clinical Development Costs shall include such costs in connection with the following activities, as applicable:(a)clinical trials (including Required Phase 4 Studies) for a Product, including (i) thepreparation for and conduct of clinical trials; (ii) data collection and analysis and report writing; (iii) clinical laboratory work; (iv)regulatory activities in direct connection with such studies, including adverse event recordation and reporting, but not includingregulatory activities relating generally to a Product and not directly related to such studies, such as regulatory activities relating toMarketing Authorization Applications, other than as set forth in clause (b); and (v) advisory meetings in connection with a Product.(b)the preparation of a regulatory dossier to the extent necessary to obtain any RegulatoryApproval for a Product and filing fees in connection with the filing of applications for Regulatory Approvals;(c)(i) Manufacture or purchase of a Product for use in clinical trials or other activities forsuch Product; (ii) the manufacture, purchase or packaging of comparators or placebo for use in clinical trials for a Product (with themanufacturing costs for comparators or placebo to be determined in the same manner as manufacturing costs are determined for suchProduct); and (iii) costs and expenses of disposal of drugs and other supplies used in such clinical trials or other activities (in each case((i) through (iii)) determined based on the definition of Manufacturing Costs), but excluding the costs for scale-up, qualification andvalidation; and(d)Recall or withdrawal expenses to be treated as Clinical Development Costs pursuant toSection 5.5(b); and Damages from Third Party Claims to be treated as Clinical Development Costs pursuant to Section 13.4.1.19“Clinical Development Plan” is defined in Section 4.7.1.20“CMO” means any Third Party contract manufacturing organization.1.21“Co-Developed Arcturus Product” means any Arcturus Product for which CureVac exercises theCureVac Option.1.22“Co-Developed CureVac Product” means any CureVac Product for which Arcturus exercises anArcturus Option.1.23“Commercialization” means the commercial activities regarding a Product in the Field in the Territoryas provided in Section 7.1. “Commercialize” has a correlative meaning.1.24“Commercialization Costs” means all internal (at the FTE Costs) and Third Party costs and expensesincurred by or on behalf of either Party that are directly allocable to the Commercialization of Products in the Territory, including themanufacture of Products in support of such Commercialization.1.25“Commercialization Plan” is defined in Section 7.3. 4 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.26“Committee” means the JSC or any subcommittee established under Section 2.1(l), as applicable.1.27“Competing Product” means any product that contains or employs a nucleic acid construct that iscapable of expressing a functional version of (a) with respect to the OTC Product, ornithine transcarbamylase, (b) with respect to aProduct expressing an antibody, all antibodies directed at the same antigen and (c) with respect to all other Products, the protein that isthe target of such Product, as further agreed by the Parties at the time the applicable program is included under this Agreement; forexample if such protein referenced under (a) or (c) is part of an enzymatic pathway, then products directed to other components of thepathway may also be considered a Competing Product. 1.28“Confidential Information” of a Party means all proprietary Know-How, unpublished patentapplications and other non-public information and data of a financial, commercial, business, operational, scientific or technical natureof such Party that is disclosed by or on behalf of such Party or any of its Affiliates or otherwise made available to the other Party or anyof its Affiliates, whether made available orally, in writing or in electronic form in connection with this Agreement, includinginformation comprising or relating to concepts, discoveries, inventions, data, designs or formulae in connection with thisAgreement. In addition, any non-public information related to this Agreement or the Products hereunder and disclosed by a Party tothe other Party (or their respective Affiliates) under the Confidentiality Agreement will be deemed such Party’s ConfidentialInformation hereunder. Any Joint Know-How shall be deemed to be Confidential Information of both CureVac and Arcturus.1.29“Confidentiality Agreement” means that certain Confidentiality Agreement between the Parties datedas of [*…***…].1.30“Control” or “Controlled” means, with respect to any Know-How, Patent Rights or other intellectualproperty rights, a Party has the legal authority or right (whether by ownership, license or otherwise) to grant a license, sublicense,access or right to use (as applicable) under such Know-How, Patent Rights, or other intellectual property rights to the other Party onthe terms and conditions set forth herein at the time of such grant, in each case without breaching the terms of any agreement with aThird Party.1.31“CureVac Clinical Development Plan” is defined in Section 4.6(c).1.32“CureVac Know-How” means, subject to Section 14.2, all Know-How that is (a) Controlled byCureVac or its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture orCommercialization of any Product in the Field. CureVac Know-How includes CureVac’s interest in Joint Know-How. CureVacKnow-How existing as of the Effective Date is listed in Exhibit 1.32. 1.33“CureVac mRNA Construct” means an mRNA Construct that embodies the CureVac mRNATechnology.1.34“CureVac mRNA Technology” means technology Controlled by CureVac or its Affiliates related tomRNA Constructs, a description of which technology, as in existence as of the Effective Date, is set forth on Exhibit 1.32.1.35“CureVac Option” is defined in Section 4.5(b).***Confidential Treatment Requested5 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.36“CureVac Patents” means, subject to Section 14.2, all Patent Rights that are (a) Controlled by CureVacor its Affiliates as of the Effective Date or during the Term; and (b) reasonably required for the Development, Manufacture orCommercialization of any Product in the Field. CureVac Patents existing as of the Effective Date are listed in Exhibit 1.32. CureVacPatents include CureVac’s interest in Joint Patents.1.37“CureVac Product” means any product being developed in the CureVac Program that contains aCureVac mRNA Construct formulated with the Arcturus LMD Technology.1.38“CureVac Product Marks” is defined in Section 9.9.1.39“CureVac Program” means one of CureVac’s proprietary drug development programs to developmRNA therapeutics, as determined pursuant to Section 4.2.1.40“CureVac Technology” means the CureVac Know-How and CureVac Patents.1.41“Develop” or “Development” means all development activities for any Product that are directed toobtaining Regulatory Approval(s) of such Product, including: all non-clinical, preclinical and clinical activities conducted in support ofRegulatory Approval (including any Required Phase 4 Studies), testing and studies of such Product (including IND-enabling studies);manufacturing development, process and formulation development; toxicology, pharmacokinetic and pharmacological studies;manufacture and distribution of such Product for use in clinical trials (including placebos and comparators); statistical analyses; assaydevelopment; instrument design and development; protocol design and development; quality assurance and control; report writing; andthe preparation, filing and prosecution of any MAA for such Product; and all regulatory affairs related to any of the foregoing.1.42“Development and Option Agreement” is defined in the Recitals above.1.43“Development Plan” is defined in Section 4.7.1.44“Diligent Efforts” means: (a) where applied to carrying out specific tasks and obligations of a Partyunder this Agreement, expending reasonable, diligent, good faith efforts and resources to accomplish such task or obligation as suchParty would normally use to accomplish a similar task or obligation under similar circumstances; and (b) where applied to theDevelopment, Manufacture and/or Commercialization of a Product, the use of reasonable, diligent, good faith efforts and resources, inan active and ongoing program, as normally used by a biotechnology company for a priority product discovered or identified internallyby such Party, which product is at a similar stage in its development or product life and is of similar market potential and intellectualproperty protection. “Diligent Efforts” shall require that such Party (on its own and/or acting through any of its Affiliates, sublicenseesor subcontractors), at a minimum: (i) promptly assign responsibility for such obligations to qualified personnel, set annual goals andobjectives for carrying out such obligations, and monitor and hold personnel accountable for progress with respect to such goals andobjectives; (ii) set and seek to achieve specific and meaningful objectives for carrying out such obligations; and (iii) make andimplement decisions and allocate resources designed to diligently advance progress with respect to such objectives. 6 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.45“Disclosing Party” is defined in Section 10.1.1.46“Distribution Costs” means those Commercialization Costs incurred by a Party or for its account,during the Term and pursuant to this Agreement, that are directly and reasonably allocable to the distribution of a Product in theTerritory, including: (a) handling and transportation to fulfill orders with respect to a Product (but excluding such costs to the extentthey are treated as a deduction in the definition of Net Sales); (b) customer services, including order entry, billing and adjustments,inquiry and credit and collection with respect to a Product; (c) reasonable and customary fees and other amounts payable todistributors; and (d) costs of storage and distribution of Products.1.47“Divestiture” means the sale, exclusive license or transfer of rights to a Competing Product to a ThirdParty without receiving a continuing share of equity, profit, royalty payments, or other economic interest in the success of suchCompeting Product in the Territory. “Divest” has a correlative meaning.1.48“Dollar” means the U.S. dollar, and “$” shall be interpreted accordingly.1.49“EMA” means the European Medicines Agency or any successor entity thereto.1.50“Executive Officers” means the Chief Executive Officer of Arcturus and the Chief Executive Officer ofCureVac.1.51“FCPA” is defined in Section 14.8(a).1.52“FDA” means the United States Food and Drug Administration or any successor entity thereto.1.53“Field” means the treatment (except with vaccines) of all diseases and conditions in humans.1.54“Finance Officers” means one individual designated by each Party by written notice to the other Partyto manage the financial reconciliation of Clinical Development Costs, Joint Commercialization Costs and other costs shared by theParties under this Agreement.1.55“First Commercial Sale” means, with respect to any Product in any country or jurisdiction, the first saleof such Product to a Third Party for distribution, use or consumption in such country or jurisdiction after Regulatory Approval forcommercial sale has been obtained for such Product in such country or jurisdiction.1.56“First Program Addition Period” is defined in Section 4.2.1.57“Forced Opt-Out” is defined in Section 14.3.1.58“FTE” means the equivalent of a full time individual’s work for a twelve (12) month period (consistingof a total of [*…***…] hours (in relation to Arcturus) or […***…] hours (in relation to CureVac) per year of dedicated effort). Anyperson who devotes less than […***…] hours (in relation to Arcturus) or […***…] hours (in relation to CureVac) per year on theapplicable activities shall be treated as an FTE on a pro-rata basis, based upon the actual ***Confidential Treatment Requested7 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy number of hours worked by such person on such activities, divided by [*…***…] (in relation to Arcturus) or […***…] (in relation toCureVac). Any person who devotes more than […***…] hours (in relation to Arcturus) or […***…] hours (in relation to CureVac)per year on the applicable activities shall be treated as one (1) FTE. FTE activities shall not include the work of general corporate oradministrative personnel.1.59"FTE Costs" means an initial rate of […***…] Dollars ($[…***…]) per FTE per year, which shall applythrough […***…]. Thereafter, the FTE Costs shall be changed bi-annually at the end of each second calendar year to reflect anypercentage increase or decrease (as the case may be) in the Consumer Price Index in the U.S. or Germany (index for all items) (“CPI”)(based on the change in the CPI from the most recent index available as of the Effective Date to the most recent index available as ofthe date of the calculation of such revised FTE Cost rate).1.60“GAAP” means (a) for Arcturus, U.S. generally accepted accounting principles; and (b) for CureVac,German generally accepted accounting principles.1.61“Governmental Authority” means any federal, state, national, state, provincial or local government, orpolitical subdivision thereof, or any multinational organization or any authority, agency or commission entitled to exercise anyadministrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department,bureau or division thereof, or any governmental arbitrator or arbitral body).1.62“IND” means any investigational new drug application, clinical trial application, clinical trial exemptionor similar or equivalent application or submission for approval to conduct human clinical investigations filed with or submitted to aRegulatory Authority in conformance with the requirements of such Regulatory Authority.1.63“Initiation” means, with respect to a clinical trial of a Product, the first dosing of the first human subjectfor such clinical trial.1.64“Invention” means any process, composition, formulation, article of manufacture, method, discovery orfinding, patentable or otherwise, that is generated by or on behalf of a Party or both Parties (including their respective Affiliates,sublicensees and subcontractors), whether or not patentable, in connection with the Development, Manufacture or Commercializationof mRNA Constructs or Products under this Agreement, including all rights, title and interest in and to the intellectual property rightstherein.1.65“Joint Commercialization Costs” means, with respect to a Product in a given time period, the sum ofthe following:(a)Commercialization Costs incurred by a Party in performing its obligations under aCommercialization Plan and in accordance with the budget then in effect and that are directly and reasonably allocable toCommercialization of Products in the Territory under such Commercialization Plan, which consist of: (i) Manufacturing Costs; (ii)Sales and Marketing Costs; (iii) costs associated with medical education activities (to the extent not otherwise included in Sales andMarketing Costs); and (iv) Distribution Costs;(b)Approved Third Party Payments under Section 3.5; ***Confidential Treatment Requested8 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (c)recall and withdrawal expenses to be treated as Joint Commercialization Costs pursuantto Section 5.5(b);(d)patent enforcement costs to be treated as Joint Commercialization Costs pursuant toSection 9.5(f);(e)Trademark Costs;(f)regulatory costs for Commercialization activities; and(g)Damages from Third Party Claims to be treated as Joint Commercialization Costspursuant to Section 13.4. Joint Commercialization Costs shall include such Commercialization Costs that are incurred after the Effective Date and prior to theFirst Commercial Sale of a Product (i.e., pre-launch costs), including those Commercialization Costs set forth in the CommercializationPlan and related budget. Notwithstanding the foregoing, Joint Commercialization Costs shall exclude income tax liabilities andcorporate overhead costs of either Party.1.66“Joint Know-How” is defined in Section 9.1(d).1.67“Joint Patents” is defined in Section 9.1(d).1.68“Joint Steering Committee” or “JSC” is defined in Section 2.1.1.69“Know-How” means any information, including discoveries, improvements, modifications, processes,methods, assays, designs, protocols, formulas, data, know-how and trade secrets (in each case, patentable, copyrightable or otherwise),but excluding any Patent Rights.1.70“Law” means any federal, state, local, foreign or multinational law, statute, standard, ordinance, code,rule, regulation, resolution or promulgation, or any order by any Governmental Authority, or any license, franchise, permit or similarright granted under any of the foregoing, or any similar provision having the force or effect of law.1.71“MAA” or “Marketing Authorization Application” means an application to the appropriateRegulatory Authority for approval to market a Product (but excluding pricing approval) in the Field in any particular jurisdiction(including, without limitation, a New Drug Application in the U.S.) and all amendments and supplements thereto.1.72“Manufacture” and “Manufacturing” mean activities directed to manufacturing, including (i)preparation, e.g., process development, intermediate and validation, (ii) production, e.g., processing, filling, finishing, packaging,labeling, quality assurance testing, release and the conduct of stability studies and (iii) storing and transporting any Product, including.1.73“Manufacturing Costs” means costs of manufacturing an mRNA Construct or Product or anycomponent thereof, including the formulation of Product, which is either:(a)supplied to a Party by a Third Party, in which event Manufacturing Costs means: (i) theamount paid to such Third Party for the manufacturing and supply of 9 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy mRNA Construct or Product (excluding any payments to Third Parties for licenses to intellectual property); plus (ii) reasonable directand identifiable internal costs and Third Party costs incurred or accrued (including any prepayments) by the manufacturing Party inconnection with inventory write-offs, variances, manufacturing process improvements, storage, freight, manufacturing scale-up,manufacturing site qualification, materials, quality assurance and quality control (including testing), supply chain management, capitalequipment, similar activities composing the manufacturing Party’s oversight of the manufacturing process of the Third Party, and anyvalue-added tax or similar tax due for amounts paid to such Third Party, but excluding costs otherwise included within ClinicalDevelopment Costs; or(b)manufactured directly by a Party or its Affiliate, in which case Manufacturing Costsmeans the “standard cost” per unit (which for purposes of ongoing cost accounting purposes shall be calculated in accordance with theManufacturing Party’s then-current standard cost process in accordance with GAAP that is applied consistently to all pharmaceuticalproducts manufactured by such Party in the applicable facility). The Parties shall reconcile the standard cost charges, and appropriatecredits or payments from one Party to the other shall be made to effect such reconciliation not less than annually against the aboveManufacturing Cost definition, including variances to standard costs and inventory write-offs. This standard cost shall include(i)the cost of materials, direct labor, and other direct and identifiablevariable costs incurred or accrued by the manufacturing Party in connection with the manufacture of an mRNA Construct or Product,manufacturing process improvements, storage and freight specific to an mRNA Construct or Product, manufacturing scale-up, and(ii)an allocable portion consistently applied to all products and mRNAConstructs or Product manufactured in the applicable manufacturing facility for: manufacturing process improvements, manufacturingsite qualification, materials, quality assurance and quality control (including testing), supply chain management, and costs ofequipment, plant operations and plant support services necessary to produce an mRNA Construct or Product, but excluding costsotherwise not specific to the mRNA Construct or Product or otherwise included within Clinical Development Costs. For clarity, thecosts of plant operations and support services shall include utilities, maintenance, engineering, safety and other similar activities,including idle plant capacity reserved specifically for the mRNA Construct or Product based on anticipated volumes in the ensuing[*…***…] months and an allocable portion of human resources, finance, plant management. In any event, costs that cannot beidentified to a specific activity supporting manufacturing of an mRNA Construct or Product, such as charges for corporate overhead orexcess capacity not specifically reserved as described above, shall be excluded from the determination of Manufacturing Costs.(c)In each case ((a) and (b)), such costs shall be deemed Manufacturing Costs to the extentsuch costs are directly and reasonably allocable to the Development or Commercialization of a Product in the Territory, and inaccordance with GAAP. Manufacturing Costs shall be included in Clinical Development Costs as incurred. Manufacturing Costs shallbe included in Joint Commercialization Costs on a “cost of sales” basis as Product is sold, via standard costs and reconciliation forvariances to standard cost and inventory write-offs. In the event that a Party performs any of its manufacturing and supply obligationsthrough one or more Affiliates, any inter-company amounts or fees paid for any such services or Product or any intermediate usedtherein by such Party shall not be***Confidential Treatment Requested10 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy included in calculating Manufacturing Costs and only those costs directly incurred by such Affiliate shall be soincluded. Manufacturing Costs shall include costs of such activities that are undertaken at any time during the Term of this Agreement(including manufacturing activities relating to the Commercialization of a Product that are undertaken prior to the initial RegulatoryApproval of such Product). The JSC shall determine the Manufacturing Costs and allocate them to the Clinical Development Costs andthe Commercialization Costs, based on the rules stated in this Section 1.73.1.74“Materials” means any and all proprietary tangible materials (including biological, chemical,pharmacological, toxicological, pharmaceutical, physical and analytical materials), including reagents, research tools and compositionsof matter.1.75 “mRNA Construct” means any mRNA construct for the expression of a protein that is either (a)ornithine transcarbamylase or (b) a protein that is the subject of an Arcturus Program or CureVac Program, if the CureVac Option orArcturus Option, respectively, has been exercised for such program, in each case including the sequence of such construct (whichpotentially comprises one (1) or more of cap, 5’ UTR, the associated open reading frame, 3’UTR and a poly A tail), the chemistry ofnatural and non-natural nucleic acids, and other chemical modifications associated with such construct.1.76“Net Sales” means the gross amount billed or invoiced by or for the benefit of a Party, its Affiliates, andits sublicensees to independent, unrelated Third Parties (other than Affiliates and sublicensees but including distributors for resales) forthe bona fide sale or transfer of a Product, less the following deductions, in each case to the extent reasonable, customary, actuallyallowed and taken in connection with such Product and not otherwise recovered by or reimbursed:(a)sales, value-added and excise taxes or customs duties paid by the selling party and anyother governmental charges imposed upon the sale of such Product and actually paid, as adjusted for rebates and refunds;(b)discounts (including cash, quantity and patient program discounts), price reductions,commissions, rebates and chargebacks actually granted, allowed or incurred in connection with the sale of the such Product;(c)allowances or credits to customers actually given and not in excess of the selling priceof such Product, on account of claims, damaged goods, rejection, outdating, product withdraw, recalls or return of such Product; and(d)rebates, reimbursements, fees or similar payments to wholesalers and other distributors,pharmacies and other retailers, buying groups (including group purchasing organizations), health care insurance carriers, pharmacybenefit management companies, health maintenance organizations, Governmental Authorities, or other institutions or health careorganizations.If a single item falls into more than one of the categories set forth in clauses (a)-(d) above, such item may not be deductedmore than once.Sales between a Party and its Affiliates and sublicensees shall be disregarded for purposes of calculating Net Sales except ifsuch purchaser is an end user, but the subsequent sale from such entity to an unrelated Third Party shall be included in the Net Salesdefinition.11 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy With respect to any sale of any Product in a given country for any substantive consideration other than monetary consideration onarm’s length terms (which has the effect of reducing the invoiced amount below what it would have been in the absence of such non-monetary consideration), for purposes of calculating the Net Sales, such Product shall be deemed to be sold exclusively for cash at theaverage Net Sales price charged to Third Parties for cash sales of such Product in such country during the applicable reporting period(or if there were only de minimis cash sales in such country, at the fair market value as determined in good faith based on pricing incomparable markets). Notwithstanding the foregoing, Net Sales shall not include amounts (whether actually existing or deemed toexist for purposes of calculation) for Products distributed for use in clinical trials.Net Sales shall be calculated on an accrual basis, in a manner consistent with such Party’s accounting policies for externalreporting purposes, as consistently applied across all products, in accordance with U.S. GAAP or German GAAP, as applicable. Tothe extent any accrued amounts used in the calculation of Net Sales are estimates, such estimates shall be trued-up in accordance withsuch Party’s accounting policies for external reporting purposes, as consistently applied, and Net Sales and related payments under thisAgreement shall be reconciled as appropriate.1.77“Operating Profit (or Loss)” means, for a given Product and calendar quarter, (a) Net Sales of suchProduct by a Party and its Affiliates (but not sublicensees) in the Territory during such period, minus (b) Joint Commercialization Costsincurred during such time period, in each case with respect to such Product, plus (c) any payments received from any sublicensee of aParty with respect to such Product, whether in the form of upfront, milestone, or royalty payments. For clarity, Operating Profit (orLoss) shall be determined prior to application of any income taxes, and if such terms are used individually, “Operating Profit” shallmean a positive Operating Profit (or Loss), and “Operating Loss” shall mean a negative Operating Profit (or Loss).1.78“Opt-Out” is defined in Section 4.9(a).1.79“Opt-Out Product” is defined in Section 4.9(b).1.80“OTC” is defined in the Preamble.1.81“OTC Clinical Development Plan” is defined in Section 4.4(c).1.82“OTC Development Candidate” means an OTC Product that the JSC has approved for advancementinto IND-enabling studies.1.83“OTC mRNA Construct” means any mRNA Construct that encodes the enzyme ornithinetranscarbamylase.1.84“OTC Preclinical Development Plan” means the plan for preclinical Development of OTC Productsuntil IND filing for an OTC Product, as amended from time to time in accordance with the terms of this Agreement, and including abudget for all such activities.1.85“OTC Product” means any product containing an OTC mRNA Construct formulated with the ArcturusLMD Technology.12 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.86“Partnering” is defined in Section 7.6.1.87“Patent Rights” means all patents and patent applications (which for the purpose of this Agreementshall be deemed to include certificates of invention and applications for certificates of invention), including all divisionals,continuations, substitutions, continuations-in-part, re-examinations, reissues, additions, renewals, revalidations, extensions,registrations, and supplemental protection certificates and the like of any such patents and patent applications, and any and all foreignequivalents of the foregoing.1.88“Person” means any individual, partnership, limited liability company, firm, corporation, association,trust, unincorporated organization or other entity.1.89 “Phase 1 Clinical Trial” means a controlled human clinical trial of a Product that would satisfy therequirements of 21 CFR 312.21(a) or corresponding foreign regulations, regardless of whether such trial is referred to as a “phase 1clinical trial” in the applicable Development Plan.1.90“Phase 2 Clinical Trial” means a controlled human clinical trial of a Product that would satisfy therequirements of 21 CFR 312.21(b) or corresponding foreign regulations, regardless of whether such trial is referred to as a “phase 2clinical trial” in the applicable Development Plan.1.91“Phase 3 Clinical Trial” means a controlled or uncontrolled human clinical trial of a Product that wouldsatisfy the requirements of 21 CFR 312.21(c) or corresponding foreign regulations, regardless of whether such trial is referred to as a“phase 3 clinical trial” in the applicable Development Plan. 1.92“Phase 4 Study” means a study or data collection effort with respect to any Product that is commencedafter the receipt of Regulatory Approval in the country where such trial is conducted. 1.93“Product” means any: (a) OTC Product; (b) Co-Developed Arcturus Product; or (c) Co-DevelopedCureVac Product.1.94“Product Infringement” is defined in Section 9.5(a).1.95“Program Addition Period” is defined in Section 4.2.1.96“Receiving Party” is defined in Section 10.1.1.97“Regulatory Approval” means all approvals necessary for the commercial sale of a Product in the Fieldin a given country or regulatory jurisdiction, including any pricing and reimbursement approvals (but solely to the extent necessary forcommercial sale of the Product).1.98“Regulatory Authority” means any applicable Governmental Authority responsible for grantingRegulatory Approvals for the Products, including the FDA, the EMA and any corresponding national or regional regulatoryauthorities.1.99“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred byany Regulatory Authority with respect to a pharmaceutical product other than patents, including, without limitation, orphan drugexclusivity, new chemical entity exclusivity, biosimilar exclusivity, data exclusivity or pediatric exclusivity.13 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 1.100“Regulatory Materials” means any regulatory application, submission, notification, communication,correspondence, registration and other filings made to, received from or otherwise conducted with a Regulatory Authority in order toDevelop, Manufacture, or Commercialize a Product in the Field in a particular country or jurisdiction. “Regulatory Materials” includesany IND, MAA and Regulatory Approval.1.101“Required Phase 4 Study” means a Phase 4 Study that is conducted pursuant to a request orrequirement of a Regulatory Authority.1.102“Royalty Rate” is defined in Section 4.9(b)(iv).1.103“Sales and Marketing Costs” means the costs that are directly and reasonably allocable to the salesand marketing of a Product in the Territory and that are compliant with applicable Laws and applicable guidelines concerning theadvertising, sales and marketing of prescription drug products (e.g., PhRMA Code), including: (a) activities directed to the advertisingand marketing of a Product; (b) professional education in the Territory, including launch meetings; (c) costs of advertising, publicrelations and medical education agencies with respect to a Product; (d) speaker programs with respect to a Product, including thetraining of such speakers; (e) developing and providing training packages, promotional literature, samples, promotional materials andother selling materials with respect to a Product; (f) developing and performing market research with respect to a Product anddeveloping branding, communications and life cycle management plans; (g) conducting symposia and opinion leader developmentactivities with respect to a Product; (h) developing reimbursement programs with respect to a Product; and (i) sales force costs.1.104“Second Program Addition Period” is defined in Section 4.2.1.105“Term” is defined in Section 11.1.1.106“Territory” means all countries and territories of the world.1.107“Third Party” means any Person other than a Party or an Affiliate of a Party.1.108“Trademark Costs” mean those costs incurred for outside counsel and other Third Parties, and filingand maintenance expenses, in each case incurred in connection with the establishment and maintenance of rights under trademarksapplicable to a Product, including costs of trademark filing and registration fees, actions to enforce or maintain a trademark and othertrademark proceedings.1.109 “United States” or “U.S.” means the United States of America, including its territories andpossessions.1.110 “Valid Claim” means a claim of(a)an issued and unexpired patent (as may be extended through supplementary protectioncertificate or patent term extension) or 14 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (b)a pending patent application, provided, however, that once the priority date or earliestfiling date to which the pending patent application refers is more than [*…***…] years old, such claim shall not constitute a ValidClaim for purposes of this Agreement anymore, unless and until a patent issues with such claim included in the Arcturus Patents or CureVac Patents, which claim has not been revoked, held invalid or unenforceable by a patentoffice, court or other governmental agency of competent jurisdiction in a final and non-appealable decision (or decision from which noappeal was taken within the allowable time period) and has not been disclaimed, denied, abandoned or admitted to be invalid orunenforceable through reissue, re-examination or disclaimer or otherwise.1.111Interpretation. In this Agreement, unless otherwise specified:(a)The words “include”, “includes” and “including” shall be deemed to be followed by thephrase “without limitation”. (b)words denoting the singular shall include the plural and vice versa and words denotingany gender shall include all genders;(c)words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a wholeand not merely to the particular provision in which such words appear; and(d)the Exhibits and other attachments form part of the operative provision of thisAgreement and references to “this Agreement” shall include references to the Exhibits and attachments.ARTICLE 2GOVERNANCE2.1Joint Steering Committee. The Parties hereby establish a joint steering committee (the “Joint SteeringCommittee” or the “JSC”) consisting of an equal number, initially […***…] senior executives of each Party. The JSC shall managethe overall collaboration of the Parties under this Agreement, and shall in particular:(a)coordinate the activities of the Parties under this Agreement, including facilitatingcommunications between the Parties with respect to the Development, Manufacture and Commercialization of mRNA Constructs andProducts;(b)provide a forum for discussion of the Development, Manufacture andCommercialization of mRNA Constructs and Products;(c)discuss potential programs for inclusion as an Arcturus Program or CureVac Programs,in accordance with the procedure in Section 4.2;(d)coordinate the activities of the Parties under each Development Plan and oversee theimplementation of each Development Plan;***Confidential Treatment Requested 15 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (e)review the Parties’ nomination of OTC Product as OTC Development Candidate anddetermine whether to approve such nomination;(f)determine the final OTC mRNA Construct sequence as OTC Development Candidate;(g)review and approve each Development Plan, and prepare and approve annual orinterim amendments to the Development Plans;(h)review and approve the protocol and statistical analysis plan established by the sponsorfor each human clinical trial conducted under a Clinical Development Plan;(i)review the progress of the clinical trials on a regular basis including interim data;(j)monitor and coordinate all regulatory actions, communications and submissions forProducts under the Development Plans;(k)coordinate the activities of the Parties under the Commercialization Plans and overseethe implementation of the Commercialization Plans;(l)establish and implement a publication plan for Products;(m)establish joint subcommittees, as appropriate, to carry out its functions, and direct andoversee the operation of such joint subcommittees, including resolving any disputed matter of such joint subcommittees; and(n)perform such other duties as are expressly assigned to the JSC in this Agreement, andperform such other functions as appropriate to further the purposes of this Agreement as may be allocated to it by the Parties’ writtenagreement.2.2Limitation of Committee Authority. Each Committee shall only have the powers expressly assigned toin this Article 2 and elsewhere in this Agreement and shall not have the authority to: (a) modify or amend the terms and conditions ofthis Agreement; (b) waive either Party’s compliance with the terms and conditions of this Agreement; or (c) determine any such issuein a manner that would conflict with the express terms and conditions of this Agreement.2.3Committee Membership and Meetings.(a)Committee Members. The initial members of each Party on the JSC as of theEffective Date are designated in writing within [*…***…] days of the Effective Date and upon designation included in Exhibit2.3. Each Party may replace its representatives on any Committee by written notice to the other Party. Each Committee representativeshall have appropriate knowledge and expertise and sufficient seniority (including budgetary authority, as applicable) within theapplicable Party to make recommendations and decisions arising within the scope of the applicable Committee’s responsibilities. EachParty shall appoint one (1) of its representatives on each Committee to act as a co-chairperson of such Committee. The co-chairpersonsshall jointly prepare and circulate agendas […***…] Business Days prior to such meeting and reasonably detailed***Confidential Treatment Requested16 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy minutes for each Committee meeting within [*…***…] days after such meeting, but shall otherwise not have any additional functionor authority as compared to the other members of the applicable Committee. (b)Meetings. Each Committee shall hold meetings at such times as it elects to do so, butin no event shall such meetings be held less frequently than once every […***…] months for each Committee. Meetings of anyCommittee will be held teleconference, videoconference or in person and, unless the Parties otherwise agree, at least one JSC meetingin each calendar year will be in person held on an alternative basis in Tubingen, Germany and in San Diego, CA. Each Party shall beresponsible for all of its own expenses of participating in any Committee. No action taken at any meeting of a Committee shall beeffective unless a representative of each Party is participating. (c)Non-Member Attendance. With the consent of the other Party (which will not beunreasonably withheld, delayed or conditioned and which will not be required for the attendance of the Alliance Manager), each Partymay from time to time invite a reasonable number of participants, in addition to its representatives, to attend the Committee meetings ina non‑voting capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting,such Party shall provide prior written notice to the other Party and shall ensure that such Third Party is bound by confidentiality andnon-use obligations consistent with the terms of this Agreement. 2.4Continuity of Representation. Notwithstanding the Parties’ respective right to replace its AllianceManager and members of Committees by written notification to the other Party, each Party shall strive to maintain continuity in therepresentation of such Alliance Manager and Committee members.2.5Decision-Making. All decisions of each Committee shall be made by unanimous vote, with each Party’srepresentatives collectively having one (1) vote. If after reasonable discussion and good faith consideration of each Party’s view on aparticular matter before a Committee, the representatives of the Parties cannot reach an agreement as to such matter within […***…]Business Days after such matter was brought to such Committee for resolution or after such matter has been referred to suchCommittee, such disagreement shall, upon the written request of either Party, be referred to the JSC (in the case of disagreement of ajoint subcommittee) or to the Executive Officers (in the case of disagreement of the JSC) for resolution. The Executive Officers shallmeet in person within […***…] days after such referral to attempt in good faith to resolve such disagreement. If the ExecutiveOfficers cannot resolve such matter within […***…] days after such matter has been referred to them, then:(a)Arcturus shall have the right to decide on matters pertaining to(i)the Manufacture of Products using mRNA Constructs, but notthe Manufacture of mRNA Constructs, supplied by CureVac (including the formulation but excluding fill and finish);(ii)subject to Sections 2.5(b)(i) and 2.5(d), the clinical Development ofOTC Products and Co-Developed Arcturus Products, the regulatory strategy for OTC Products and Co-Developed Arcturus Products,the fill and finish of OTC Products***Confidential Treatment Requested17 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy and Co-Developed Arcturus Products and the Commercialization of OTC Products and Co-Developed Arcturus Products,(b)CureVac shall have the right to decide on matters pertaining to(i)the Manufacture of mRNA Constructs for the Products;(ii)subject to Sections 2.5(a)(i) and 2.5(d), the clinical Development ofCo-Developed CureVac Products, the regulatory strategy for Co-Developed CureVac Products, the fill and finish of Co-DevelopedCureVac Products and the Commercialization of Co-Developed CureVac Products,(c)with respect to all other matters, neither Party shall have the right to make the finaldecision, and the status quo will remain unless the Parties agree otherwise,(d)provided, however, that neither Party shall have(i)the right to require the other Party to conduct any activities or makeany investments without such other Party’s written consent, in particular, to determine certain amounts of supply of mRNA Constructsother than in accordance with the Development Plan or Commercialization Plan, as applicable, or Products or to establish a secondsource, other than as may be expressly agreed in a supply agreement,(ii)a casting vote regarding the approval of a Development Plan orCommercialization Plan or any amendment thereto leading to a cost-increase of more than [*…***…]% from the agreed budgetedamount.2.6 Discontinuation of Participation on a Committee. The activities to be performed by each Committeeshall solely relate to governance under this Agreement, and are not intended to be or involve the delivery of services. Each Committeeshall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the committee; or (b) a Party providingwritten notice to the other Party of its intention to disband and no longer participate in such Committee. Once the Parties mutuallyagree or a Party has provided written notice to disband such Committee to the other Party, such Committee shall have no furtherobligations under this Agreement and, thereafter, the Alliance Managers shall be the contact persons for the exchange of informationunder this Agreement and decisions of such Committee shall be decisions as between the Parties, subject to the other terms andconditions of this Agreement. 2.7Alliance Managers. Each Party hereby appoints the person listed on Exhibit 2.3 to act as its alliancemanager under this Agreement as of the Effective Date (the “Alliance Manager”). Each Party’s Alliance Manager shall: (a) serve asthe primary contact point between the Parties for the purpose of providing the other Party with information on the progress of suchParty’s activities under this Agreement; (b) be primarily responsible for facilitating the flow of information and otherwise promotingcommunication, coordination and collaboration between the Parties; (c) attempt to facilitate the prompt resolution of any disputes; (d)attend all JSC meetings, and have the right to attend all other Committee and subcommittee meetings, all as non-voting members. AnAlliance Manager may also bring any matter to the attention of any Committee if such Alliance Manager reasonably believes that suchmatter warrants such attention. Each Party may replace its Alliance Manager at any time upon written notice to the other Party.***Confidential Treatment Requested18 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 2.8Commercialization and Collaboration Decisions. The Parties shall mutually agree on any decisions forCommercialization by a licensee or strategic partner; provided that following the completion of Phase 1 Clinical Trials for eachProduct, the Parties shall determine which of the Parties shall be the lead in potential Commercialization efforts (subject to Section 7.5and 7.6), including identifying and reviewing with the other Party on not less than a [*…***…] basis, the Commercialization plansand efforts and the discussions with potential future licensees or strategic partners with respect to such Product. This Section 2.8 shall not apply with respect to any Opt-Out Product.ARTICLE 3LICENSES3.1License to CureVac. Subject to the terms and conditions of this Agreement, Arcturus hereby grants toCureVac the following licenses under the Arcturus Technology (sublicensable solely as provided in Section 3.3):(a)a non-exclusive, royalty-free license to Develop mRNA Constructs and Products in theField in accordance with the Development Plans, and(b)a sole (i. e., Arcturus will not grant respective licenses to any Third Party, however,Arcturus reserves for itself and its Affiliates the right to use the licensed rights), profit sharing (in case of Commercialization inaccordance with Article 7) or royalty-bearing (in case of an Opt-Out or Forced Opt-Out in accordance with Sections 4.9 or 14.3,respectively) license to Commercialize Co-Developed CureVac Products in the Field in the Territory; and(c)a non-exclusive, royalty-free license to Manufacture and have Manufactured the mRNAConstructs that are included in Products worldwide, provided that CureVac shall have the right to use such mRNA Constructs solelyfor supply to Arcturus to Manufacture Products for use by CureVac in connection with the exercising of its rights under Sections 3.1(a)and/or 3.1(b) or for use by Arcturus in connection with the exercising of its rights under Sections 3.2(a) and/or 3.2(b).For the avoidance of doubt, the licenses granted by Arcturus to CureVac under this Agreement do not include any rights forCureVac to develop, make, have made, sell, offer for sale or otherwise commercialize any proprietary product of Arcturus that is not aProduct.3.2License to Arcturus. Subject to the terms and conditions of this Agreement, CureVac hereby grants to Arcturusthe following licenses under the CureVac Technology (sublicensable solely as provided in Section 3.3):(a)a non-exclusive, royalty-free license to Develop mRNA Constructs and Products in the Field inaccordance with the Development Plans,(b)a sole (i. e., CureVac will not grant respective licenses to any Third Party, however, CureVac reservesfor itself and its Affiliates the right to use the licensed rights), profit sharing (in case of Commercialization in accordance with Section 7) or royalty-bearing (in case of an Opt-Out or Forced Opt-Out in accordance with Sections 4.9 or 14.3,***Confidential Treatment Requested19 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy respectively) license to Commercialize OTC Products and Co-Developed Arcturus Products in the Field in the Territory; and(c)a non-exclusive, royalty-free license to Manufacture and have Manufactured Productsworldwide from mRNA Constructs supplied by CureVac (i.e. no license granted for the Manufacture of mRNA Constructs), providedthat Arcturus shall have the right to use such Products solely in connection with the exercising of its rights under Sections 3.2(a) and/or3.2(b) or for supply to CureVac for use by CureVac in connection with the exercising of its rights under Sections 3.1(a) and/or 3.1(b).For the avoidance of doubt, the licenses granted by CureVac to Arcturus under this Agreement do not include any rights forArcturus to develop, make, have made, sell, offer for sale or otherwise commercialize any proprietary product of CureVac that is not aProduct. 3.3Sublicense Rights. Subject to the terms and conditions of this Agreement:(a)Subject to Section 3.4(c) below, each Party may exercise its rights and perform itsobligations under this Agreement by itself or through the engagement of any of its Affiliates without the other Party’s prior writtenconsent; provided, however, that(i)such Party shall provide written notice to the other Party informingthe other Party of such engagement within [*…***…] days after such engagement, and(ii)the Affiliate, in performing the obligations, shall use the standard ofcare applicable to the Party making the delegation.(b)Each Party may sublicense (through multiple tiers) the rights granted to it under Section3.1 (in the case of CureVac) or Section 3.2 (in the case of Arcturus) to one (1) or more Third Parties with the other Party’s prior writtenconsent, which consent shall not be unreasonably withheld, conditioned or delayed. Each Party will provide to the other Party a copyof any such sublicense agreement within […***…] days of execution thereof, which sublicense agreement may be redacted asnecessary to protect commercially sensitive information and shall be treated as Confidential Information of the Party providing thesublicense agreement.(c)Each Party shall remain directly responsible for all of its obligations under thisAgreement that have been delegated, subcontracted or sublicensed to any of its Affiliates, sublicensees or subcontractors and shallensure that such Affiliates, sublicensees and subcontractors comply with the terms and conditions of this Agreement. Without limitingthe foregoing, in the event that a Party engages a subcontractor to perform any activities assigned to it under this Agreement, suchParty shall ensure that such subcontractor is bound by written obligations of confidentiality and non-use consistent with this Agreementand has agreed to assign to the Party engaging such subcontractor (and/or grant a fully-paid, exclusive, royalty-free, worldwide licenseto such Party, with the right to sublicense through multiple tiers, under) all Inventions made by such subcontractor in the course ofperforming such subcontracted work that relate to any Products or their use, manufacture or sale. 3.4No Implied Licenses; Negative Covenant. Except as set forth herein, neither Party shall acquire anylicense or other intellectual property interest, by implication or otherwise, under or to any trademarks, Patent Rights, Know-How, orother intellectual***Confidential Treatment Requested20 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy property owned or Controlled by the other Party. For clarity, the license granted to each Party under any particular Patent Rights orKnow-How Controlled by the other Party shall confer exclusivity to the Party obtaining such license only to the extent the Partygranting such license Controls the exclusive rights to such Patent Rights or Know-How. Neither Party shall, nor shall permit any of itsAffiliates or sublicensees to, practice any Patent Rights or Know-How licensed to it by the other Party outside the scope of the licensegranted to it under this Agreement.3.5Third Party Licenses. The Parties acknowledge that during the Term, it may be beneficial to obtain alicense under intellectual property controlled by a Third Party. The Parties agree that (a)(a)with respect to any such Third Party intellectual property that is necessary (i.e., in theabsence of a license thereto a claim of infringement or misappropriation is likely) to make, have made, use, sell, offer for sale, importand export mRNA Constructs or Products in the Territory, the Parties shall discuss whether to obtain such license, with the Partyhaving the final say and responsibility for negotiating such license that has the lead regarding Commercialization of the respectiveProduct, after good faith consideration of the other Party’s input, and(b)with respect to Third Party intellectual property that is useful (but not necessary, e.g., itcovers a technology or feature desired to be incorporated into the Product or used in its manufacture) to make, have made, use, sell,offer for sale, import and export mRNA Constructs or Products in the Territory, the Parties shall determine whether to obtain a licenseto such Third Party intellectual property, provided, however, that the decision to obtain a license must be made unanimously and that,notwithstanding Section 2.5, neither Party has the final say in this decision, and if a determination is made to obtain such license, theParty that has the lead regarding Commercialization of the respective Product shall have responsibility for negotiating such license,after good faith consideration of the other Party’s input. The Party entering into any such Third Party license after the Effective Date pursuant to this Section 3.5 shall be responsible formaking all payments with respect to such licenses (“Approved Third Party Payments”), subject to inclusion of any and all suchpayments with respect to a Product in Joint Commercialization Costs.3.6Exclusivity.(a)Exclusivity Obligation. During the Term with respect to each Product, Arcturus shallnot, and shall ensure that its Affiliates do not, and CureVac shall not, and shall ensure that its Affiliates do not, directly or indirectly,alone or with or through any Third Party, clinically develop or commercialize any Competing Product to such Product in the Territory.(b)Acquired Rights of Arcturus. In the event that Arcturus or its Affiliate, eitherthrough its own efforts or by acquisition of such rights (whether through merger, acquisition or similar transaction), obtains the rights toa Competing Product that would cause Arcturus to breach Section 3.6(a), then Arcturus shall:21 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (i)if such Product is a Co-Developed CureVac Product, upon writtennotice to CureVac within [*…***…] days after such rights are first obtained, either(1)terminate this Agreement with respect to such Co-Developed CureVac Products pursuant to Section 11.2(a), in which case such notice will serve as notice of termination under Section11.2(a) with respect to such Products; or(2)Divest such Competing Product, in which caseArcturus or its Affiliate shall, or shall cause the applicable entity to, complete the Divestiture of such Competing Product within […***…] months from the date Arcturus or its Affiliate obtained any rights in such Competing Product, in which case the conduct ofactivities with respect to such Competing Product by Arcturus or its Affiliate during such […***…] month period shall not be deemeda breach of Arcturus’s exclusivity obligations under Section 3.6, provided that such activities with respect to such Competing Productduring such […***…] month period are conducted independently of the activities conducted under this Agreement and no ArcturusTechnology or CureVac Technology is used in the conduct of such activities; or(ii)if such Product is an OTC Product or Co-Developed ArcturusProduct, Divest such Competing Product in accordance with Section 3.6(b)(i)(2).(c)Acquired Rights of CureVac. In the event that CureVac or its Affiliate, eitherthrough its own efforts or by acquisition of such rights (whether through merger, acquisition or similar transaction), obtains the rights toa Competing Product that would cause CureVac to breach Section 3.6, then CureVac shall:(i)if such Product is an OTC Product or Co-Developed ArcturusProduct, upon written notice to Arcturus within […***…] days after such rights are first obtained, either(1)terminate this Agreement with respect to suchProducts pursuant to Section 11.2(a), in which case such notice will serve as notice of termination under Section 11.2(a) with respect tosuch Products; or(2)Divest such Competing Product, in which caseCureVac or its Affiliate shall, or shall cause the applicable entity to, complete the Divestiture of such Competing Product within […***…] months from the date CureVac or its Affiliate obtained any rights in such Competing Product, in which case the conduct ofactivities with respect to such Competing Product by CureVac or its Affiliate during such […***…] month period shall not be deemeda breach of CureVac’s exclusivity obligations under Section 3.6(a), provided that such activities with respect to such CompetingProduct during such […***…] month period are conducted independently of the activities conducted under this Agreement and noArcturus Technology or CureVac Technology is used in the conduct of such activities; or(ii)if such Product is a Co-Developed CureVac Product, Divest suchCompeting Product in accordance with Section 3.6(c)(i)(2).3.7Diligent Efforts. During the Term with respect to each Product and potential program subject to co-development hereunder, each Party shall act in good faith and use Diligent Efforts to undertake and complete its obligations withrespect to such program and Product hereunder.***Confidential Treatment Requested22 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy ARTICLE 4DEVELOPMENT4.1General. Subject to the terms and conditions of this Agreement, the Parties will collaborate on theDevelopment of Products in the Field for up to four (4) different co-development programs, under the direction of the JSC andpursuant to Development Plans, as described in more detail in this Article 4. As of the Effective Date, the Parties have agreed toDevelop an OTC Product. In addition, Arcturus will have an option to co-Develop with CureVac up to two (2) different CureVacPrograms, and CureVac will have an option to co-Develop with Arcturus one (1) Arcturus Program. For clarification, the Partiescontemplate that Targets for programs and potential Products in the Field will be selected, in case of CureVac, from the ReservedTarget List under the Development and Option Agreement; provided that the selection of any program under this Agreement shall notconstitute the selection of a Target as defined and in accordance with Section 4.2 of the Development and Option Agreement (i.e.,shall be subject to substitution rather than reduction of Targets then currently available to CureVac upon such selection hereunder).Accordingly, once one of the Reserved Targets as defined in the Development and Option Agreement is selected for co-Developmentunder this Agreement, such Reserved Target shall be removed from the Reserved Target List following the effectiveness of a licensehereunder, with the effect that CureVac shall be entitled to nominate a new Target in accordance with Section 4.2 of the Developmentand Option Agreement.4.2Additional Programs for Potential Co-Development.(a)During the first [*…***…] month period after the Effective Date (the “First ProgramAddition Period”), each Party will propose to the other Party in writing an available drug development program to develop mRNAtherapeutics, in case of CureVac from the Reserved Target List under the Development and Option Agreement, which is reasonablyacceptable to the other Party. In relation to the proposed program, each Party will reasonably inform the other Party about therespective development activities, answer questions and provide reasonable access to the results and data of such program, such resultsand data to include (i) the requirements for a data package consisting of up to […***…] pivotal animal studies and (ii) otherrequirements as set forth on Exhibit 4.2. The Parties will (i) determine by written agreement whether to include such programs underthis Agreement, and (ii) at such time will agree on the applicable exclusivity for such program according to Section 3.6 and the leadparty pursuant to Section 2.8, subject to Section 4.3, if included under this Agreement.(b)During […***…] months after the Effective Date (the “Second Program AdditionPeriod”, together with the “First Program Addition Period” the “Program Addition Period”), CureVac will propose to Arcturusin writing a second drug development program to develop mRNA therapeutics from the Reserved Target List under the Developmentand Option Agreement, which is reasonably acceptable to Arcturus. The procedure under Section 4.2(a) shall apply accordingly.4.3Overall Allocation of Responsibilities.***Confidential Treatment Requested23 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (a)OTC Product. The Parties have agreed to conduct preclinical development of OTCProduct pursuant to the OTC Preclinical Development Plan, which allocates responsibility for preclinical development activities forOTC Product between the Parties. Thereafter, Arcturus will be responsible for IND filing for an OTC Product and will be the sponsorof clinical trials of such OTC Product. (b)Co-Developed Arcturus Product. Arcturus will be responsible for all preclinicaldevelopment of Co-Developed Arcturus Product. Following CureVac’s exercise of its CureVac Option, Arcturus will be responsiblefor IND filing for a Co-Developed Arcturus Product and will be the sponsor of clinical trials of such Co-Developed Arcturus Product.(c)Co-Developed CureVac Products. CureVac will be responsible for all preclinicaldevelopment of Co-Developed CureVac Products, except that Arcturus will be responsible for the activities related to formulatingCureVac mRNA Constructs with Arcturus LMD Technology. Following Arcturus’s exercise of its Arcturus Option with respect to aCureVac Program, CureVac will be responsible for IND filing for a Co-Developed CureVac Product from such program and will bethe sponsor of clinical trials of such Co-Developed CureVac Product.4.4OTC Products. (a)OTC Preclinical Development Plan. As of the Effective Date, the Parties haveagreed on an initial OTC Preclinical Development Plan, attached to this Agreement as Exhibit 4.4. Either Party may proposeamendments to the OTC Preclinical Development Plan from time to time, and such amendments shall become effective upon theapproval of the JSC. The OTC Preclinical Development Plan shall set forth: (a) the activities to be conducted by each Party for thepreclinical Development of OTC Products, including IND enabling studies; (b) the estimated timelines for such activities; (c) theestimated internal and external costs to be incurred by or on account of each Party in connection with such activities; and (d) the criteriafor selecting OTC Development Candidates.(b)Designation of OTC Development Candidates. (i)Selection of Technology. The Parties agree that the OTC Productswill include OTC mRNA Constructs based on Arcturus mRNA Technology or CureVac mRNA Technology. In addition, during the[*…***…] period following the Effective Date, the JSC shall select the sequence for the OTC mRNA Construct.(ii)OTC Development Candidate Selection. From time to time duringthe conduct of the OTC Preclinical Development Plan (such timeline to be further specified in the OTC Preclinical Development Plan),either Party may nominate a particular OTC Product to the JSC for consideration as an OTC Development Candidate. Suchnomination shall be made prior to the Initiation of IND-enabling studies for such OTC Product, unless the Parties otherwiseagree. Promptly after such nomination, each Party shall present to the JSC the data and results it has obtained with respect to suchOTC Product, and the JSC shall determine, within […***…] Business Days after receiving such data and results, whether such OTCProduct will be approved as an OTC Development Candidate under this Agreement. If the JSC determines not to approve such OTCProduct as an OTC Development Candidate, then the JSC shall inform the Parties in writing of such decision,***Confidential Treatment Requested24 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy and may request that further activities be conducted with respect to such OTC Product prior to reconsideration for nomination as anOTC Development Candidate, subject to Section 2.5. If the JSC approves a particular OTC Product as a Development Candidate,then the Parties shall proceed to conduct IND-enabling studies in accordance with the OTC Preclinical Development Plan.(c)Clinical Development. At the time a particular OTC Product is designated as an OTCDevelopment Candidate by the JSC, the JSC shall prepare and submit to the Parties for approval a comprehensive clinicalDevelopment plan and budget for such OTC Development Candidate (the “OTC Clinical Development Plan”). The OTC ClinicalDevelopment Plan shall include a development and regulatory strategy for the OTC Product, including the Parties’ respective roles inthe Development of such OTC Product and the countries in which Development will occur, and in particular will set forth: (i) thetimeline and details of all additional preclinical and clinical Development activities to be conducted by the Parties that are designed togenerate data sufficient to file an MAA for the applicable OTC Product in the U.S., EU and Japan; (ii) the protocol synopsis for eachclinical trial included in such OTC Clinical Development Plan; (iii) a Manufacturing plan for the Manufacture of the OTC Product insupport of the OTC Clinical Development Plan; and (iv) the Clinical Development Costs expected to be incurred by or on behalf of theParties to carry out such clinical Development. Arcturus shall have the primary responsibility to conduct the Development activitiesunder the OTC Clinical Development Plan.4.5Arcturus Products. (a)Preclinical Development. Arcturus will be solely responsible, in its sole discretion, forall preclinical Development of Arcturus Products.(b)Option to CureVac to Co-Develop Arcturus Products. Arcturus hereby grants toCureVac an option during the Program Addition Period to one (1) Arcturus Program to co-Develop and share Operating Profit (orLoss) for Arcturus Products in accordance with the terms of this Agreement (the “CureVac Option”). (i)Arcturus shall propose a Program in accordance with Section 4.2.(ii)Upon request from CureVac, such request to be made within [*…***…] days following such proposal, Arcturus shall promptly provide to CureVac a data package containing (i) all data and resultsfrom its preclinical development of Arcturus Products and (ii) an itemized statement setting forth all costs and expenses incurred byArcturus to conduct the Arcturus Program to date, including Third Party expense and FTE Costs (at the FTE Costs) (the “ArcturusPreclinical Program Costs”). During an […***…]-day period following delivery of such data package, which period may beextended by mutual agreement not to be unreasonably withheld by either Party, Arcturus shall promptly respond to CureVac’sreasonable requests for more information and other inquiries with respect to the Arcturus Program. (iii)CureVac may exercise the CureVac Option, within […***…] daysfollowing the end of the […***…]-day period (extended if applicable) specified in subsection (ii), by (1) written notice to Arcturustogether with (2) payment of fifty percent (50%) of the Arcturus Preclinical Program Costs, and thereafter the Parties shall share all***Confidential Treatment Requested25 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy further co-Development costs equally. For clarity, to the extent that an option is not exercised following delivery of the information setforth in this Section 4.5(b), then the option to CureVac shall terminate.(c)Clinical Development. Promptly after CureVac’s exercise of the CureVac Option, theJSC shall prepare and submit to the Parties for approval a comprehensive clinical Development plan and budget for the applicable Co-Developed Arcturus Product (the “Arcturus Clinical Development Plan”). The Arcturus Clinical Development Plan shall include adevelopment and regulatory strategy for the Co-Developed Arcturus Product, including the Parties’ respective roles in theDevelopment of such Product and the countries in which Development will occur, and in particular will set forth the timeline anddetails of: (i) all additional preclinical and clinical Development activities to be conducted by the Parties that are designed to generatedata sufficient to file an MAA for the applicable Co-Developed Arcturus Product in the U.S., EU and Japan; (ii) the protocol synopsisfor each clinical trial included in such Arcturus Clinical Development Plan; (iii) a Manufacturing plan for the Manufacture of the Co-Developed Arcturus Product for such clinical trials; and (iv) the Clinical Development Costs expected to be incurred by or on behalf ofthe Parties to carry out such clinical Development. Arcturus shall have the primary responsibility to conduct the Developmentactivities under the Arcturus Clinical Development Plan. 4.6CureVac Products(a)Preclinical Development. CureVac will be solely responsible, in its sole discretion,for all preclinical Development of CureVac Products.(b)Option to Arcturus to Co-Develop CureVac Products. CureVac hereby grants toArcturus an option during the Program Addition Period for two (2) CureVac Programs to co-Develop and share Operating Profit (orLoss) for CureVac Products in accordance with the terms of this Agreement (the “Arcturus Option”). (i)CureVac shall propose a Program in accordance with Section 4.2.(ii)Upon request from Arcturus, such request to be made within [*…***…] days following such proposal, CureVac shall promptly provide to Arcturus a data package containing (i) all data and resultsfrom its preclinical development of CureVac Products and (ii) an itemized statement setting forth all costs and expenses incurred byCureVac to conduct the applicable CureVac Program to date, including Third Party expense and FTE Costs incurred by CureVac andArcturus under the Development and Option and, if applicable, the License Agreement (the “CureVac Preclinical Program Costs”for the applicable CureVac Program). During an […***…]-day period following delivery of such data package, which period may beextended by mutual agreement not to be unreasonably withheld by either Party, CureVac shall promptly respond to Arcturus’sreasonable requests for more information and other inquiries with respect to the applicable CureVac Program.(iii)The Option Exercise Fee and the Milestone Payments already paidby CureVac under the Development and Option Agreement and the License Agreement shall not be included in the CureVacPreclinical Program Costs. However, CureVac shall***Confidential Treatment Requested26 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy have the right to set off such payments against any payments due to Arcturus under this Agreement, the Development and OptionAgreement or any License Agreement.(iv)Arcturus may exercise the Arcturus Option for a CureVac Program,within [*…***…] days following the end of the […***…]-day period (extended if applicable) specified in subsection (ii), by (1)written notice to CureVac together with (2) payment of fifty percent (50%) of the CureVac Preclinical Program Costs for suchCureVac Program, and thereafter the Parties shall share all further co-Development costs equally. For clarity, to the extent that anoption is not exercised following delivery of the information set forth in this Section 4.6(b), then such one (1) Arcturus Option shallterminate.(c)Clinical Development. Promptly after Arcturus’s exercise of an Arcturus Option, theJSC shall prepare and submit to the Parties for approval a comprehensive clinical Development plan and budget for the applicable Co-Developed CureVac Product (the “CureVac Clinical Development Plan” for such Product). Each CureVac Clinical DevelopmentPlan shall include a development and regulatory strategy for the applicable Co-Developed CureVac Product, including the Parties’respective roles in the Development of such Product and the countries in which Development will occur, and in particular will set forththe timeline and details of: (i) all additional preclinical and clinical Development activities to be conducted by the Parties that aredesigned to generate data sufficient to file an MAA for the applicable Co-Developed CureVac Product in the U.S., EU and Japan; (ii)the protocol synopsis for each clinical trial included in such CureVac Clinical Development Plan; (iii) a Manufacturing plan for theManufacture of such Co-Developed CureVac Product for such clinical trials; and (iv) the Clinical Development Costs expected to beincurred by or on behalf of the Parties to carry out such clinical Development. CureVac shall have the primary responsibility toconduct the Development activities under each CureVac Clinical Development Plan. 4.7Development Plans; Amendment. (a)The OTC Preclinical Development Plan, OTC Clinical Development Plan, ArcturusClinical Development Plan and CureVac Clinical Development Plans shall each be referred to as a “Development Plan” for theapplicable Product, and each Development Plan for clinical Development will be referred to as a “Clinical Development Plan”. (b)From time to time during the Term, the JSC shall prepare and approve amendments, asappropriate, to the then-current Development Plans. Once approved by the JSC, a revised Development Plan shall replace thecorresponding prior Development Plan. If the terms of any Development Plan contradict, or create inconsistencies or ambiguities with,the terms of this Agreement, then the terms of this Agreement shall govern.4.8Development Costs.(a)Preclinical Development. The Parties shall share equally all internal costs (at the FTECosts) and Third Party costs incurred to conduct (i) preclinical Development under the OTC Preclinical Development Plan and (ii)preclinical Development of Co-Developed Arcturus Products and Co-Developed CureVac Products, provided, however, in each case,that the costs have been included in the respective Development Plan or have otherwise been approved by both Parties; provided,further, that the foregoing does***Confidential Treatment Requested27 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy not include any Manufacturing Costs, which are addressed in Section 6.3 and which shall be balanced in accordance with Section4.8(b). In addition, Arcturus will be solely responsible for all costs incurred for regulatory activities for the Co-Developed ArcturusProducts prior to the Initiation of clinical trials, and CureVac will be solely responsible for all costs incurred for regulatory activities forthe Co-Developed CureVac Products prior to the Initiation of clinical trials.(b)True-Up Prior to Clinical Development. The Parties agree that as soon aspracticable but in any event prior to Initiating a clinical trial for each Product, each Party should have invested approximately the sameamount in internal costs (including costs related to the Program incurred under the Development and Option Agreement and, ifapplicable, the respective License Agreement) and Third Party costs to conduct its activities with respect to such OTC Product, Co-Developed Arcturus Product and Co-Developed CureVac Product, including Manufacturing Costs. Within [*…***…] days after theJSC approves the applicable Clinical Development Plan, the Parties shall determine a mechanism for balancing such investments, andeach Party shall comply with the determined mechanism and the costs should be shared and balanced equally prior to the Initiation ofsuch clinical trial.(c)Clinical Development. (i)The Parties shall share equally all Clinical Development Costs,subject to the remainder of this Section 4.8(c) , provided, however, in each case, that the costs have been included in the respectiveDevelopment Plan or have otherwise been approved by both Parties; provided, further, that for any calendar year, neither Party will bepermitted to recover Clinical Development Costs in excess of the amount allocated to such Party’s Development activities for such yearunder the budget in the applicable Clinical Development Plan without the advance or retroactive, unanimous approval of the JSC. (ii)At each of the development stages for each Product, the Parties willupdate the Clinical Development Plan for such Product to include a detailed budget for the next phase of clinical Development andsubmit such updated plan and budget to the JSC for approval.(d)Payments of Costs. The Parties shall reconcile and pay costs described in this Section4.8 in accordance with Section 8.2.4.9Opt-Out(a)Within […***…] days after approval of the applicable budget in accordance withSection 4.8(c)(ii), Arcturus shall have the right to opt out of future sharing of Clinical Development Costs with respect to Co-Developed CureVac Products, and CureVac shall have the right to opt out of future sharing of Clinical Development Costs withrespect to OTC Products and Co-Developed Arcturus Products, in each case upon written notice to the other Party (an “Opt-Out”).(b)Consequences of an Opt-Out.(i)The Party that Opts-Out for a Product (the “Opt-Out Product”) willnot be obligated to pay any Clinical Development Costs for such Product incurred after delivery of such notice. ***Confidential Treatment Requested28 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (ii)From and after such Opt-Out, such Party shall no longer have licenserights pursuant to Article 3, but shall remain subject to the limitations and obligations set forth in Section 3.6. (iii)Section 11.3(a)(iv) shall apply accordingly, provided that the Partythat Opts-Out is considered the Terminating Party.(iv)From and after such Opt-Out, such Party shall no longer be eligibleto receive its share of Operating Profit or obligated to pay its share of Operating Loss for the applicable Product, and instead such Partyshall receive royalties on Net Sales in the Territory of the Product for which it has opted out (the “Royalty Rate” for the applicableProduct):(A)The Royalty Rate for the OTC product shall be as follows, provided that these rates shall be reviewed and if appropriate,adjusted in good faith by the Parties upon the earlier of (1) [*…***…] days following the Opt-Out notice and (2) the Initiation of aPhase 3 Clinical TrialTime of Opt-Out or Forced Opt-OutApplicable Royalty Rate[…***…][…***…]%[…***…][…***…]%[…***…][…***…]%[…***…][…***…]%[…***…][…***…]% (B)The Royalty Rate for other Products shall be agreed to in good faith by the Parties upon the earlier of (1) […***…] daysfollowing the Opt-Out notice and (2) […***…].4.10Diligence. Each Party shall use Diligent Efforts to conduct the Development activities (including relatedregulatory activities) assigned to it under the Development Plans, and shall conduct such activities in good scientific manner and incompliance with applicable Laws. Arcturus shall use Diligent Efforts to Develop and seek Regulatory Approval of an OTC Productand a Co-Developed Arcturus Product in the Field in the Territory, and CureVac shall use Diligent Efforts to Develop and seekRegulatory Approval of a Co-Developed CureVac Product from each CureVac Program in the Field in the Territory.***Confidential Treatment Requested29 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 4.11Development Records. Each Party shall maintain complete, current and accurate records of allDevelopment activities conducted by it hereunder, and all data and other Information resulting from such activities. Such records shallfully and properly reflect all work done and results achieved in the performance of the Development activities in good scientificmanner appropriate for regulatory and patent purposes. Each Party shall document all non-clinical studies and clinical trials in formalwritten study reports according to applicable Laws and national and international guidelines (e.g., ICH, GCP, GLP, and GMP). EachParty shall have the right to review and copy such records maintained by the other Party at reasonable times and to obtain access to theoriginal to the extent necessary for regulatory and patent purposes or for other legal proceedings.4.12Data Exchange and Development Reports. In addition to adverse event and safety data reportingobligations pursuant to Section 5.4, each Party shall promptly provide the other Party with copies of all data and results generated by oron behalf of such Party in the course of performing the Development activities hereunder. Each Party shall provide the JSC withregular reports detailing its Development activities for the Products, and the results of such activities at each regularly scheduled JSCmeeting. The Parties shall discuss the status, progress and results of each Party’s Development activities at such JSC meetings. Inaddition, each Party agrees to provide serious adverse events and suspected unexpected serious adverse reactions reports (redacted withrespect to any specific trials or collaborator or licensee confidential information) then in such Party’s Control with respect to theCureVac mRNA Technology and Arcturus LMD Technology then being evaluated by a Party for a program under Developmenthereunder, respectively.4.13Exchange of Materials. (a)If a Party provides any Materials to the other Party under this Agreement in connectionwith the Development of the Products, the Party receiving such Materials shall use such Materials solely to Develop the Products inaccordance with this Agreement. Without limiting the foregoing, except as necessary to Develop the Products in accordance with thisAgreement, neither Party shall attempt to reverse engineer, design around, deconstruct or in any way determine the structure orcomposition of the other Party’s Materials, shall not generate analogs of or derivatives based on such Materials, shall not sell, transfer,disclose or otherwise provide access to such Materials to any Third Party without the written consent of the other Party, except thateach Party may allow access to the other Party’s Materials to its employees, agents, and sub-contractors who require such access forthe Development of the Products under and in accordance with this Agreement; provided that such employees, agents and sub-contractors are apprised of the proprietary nature of the Materials and are bound by written agreement to retain and use the Materials ina manner that is consistent with the terms of this Agreement. (b)Upon the completion of the relevant Development work or the providing Party’srequest, any remaining Materials will be returned to the providing Party, or otherwise disposed of as mutually agreed by the Parties. ARTICLE 5REGULATORY30 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 5.1Regulatory Responsibilities. The Development Plans shall set forth the regulatory strategy for seekingRegulatory Approval for the Products in the Field by the FDA, EMA and Regulatory Authorities in Japan. All regulatory activitiesshall be conducted using Diligent Efforts and in accordance with the regulatory strategy set forth in the Development Plans.5.2Cooperation and Allocation of Responsibilities. (a)OTC Products and Arcturus Product. Arcturus shall be the regulatory sponsor andshall be solely responsible for all regulatory activities for the OTC Products and the Co-Developed Arcturus Products. Arcturus shallbe responsible for preparing and filing, and shall be the owner of, all MAAs for such Products in the Field in the Territory, and shall beresponsible for all regulatory activities necessary to obtain and maintain Regulatory Approval of such Products in the Field in theTerritory.(b)CureVac Products. CureVac shall be the regulatory sponsor and shall be solelyresponsible for all regulatory activities for the Co-Developed CureVac Products. CureVac shall be responsible for preparing andfiling, and shall be the owner of, all MAAs for such Products in the Field in the Territory, and shall be responsible for all regulatoryactivities necessary to obtain and maintain Regulatory Approval of such Products in the Field in the Territory.(c)Cooperation. For each Product, each Party shall cooperate reasonably with the otherParty with respect to all regulatory activities. Without limiting the foregoing, each Party:(i)shall consult with the other Party through the JSC regardingregulatory matters pertaining to all Regulatory Materials of the Products, including plans, strategies, filings, reports, updates andsupplements in connection therewith;(ii)shall provide the other Party with drafts of any Regulatory Materialsfor the Products to be submitted by such Party to any Regulatory Authority a reasonable time (but in no event less than [*…***…]days, unless impractical) prior to submission for review and comment, and shall consider in good faith any comments received from theother Party; (iii)shall provide the other Party with copies of any Regulatory Materialssubmitted to and any correspondence received from any Regulatory Authority pertaining to the Products promptly after its submissionor receipt by such Party; and(iv)shall provide the other Party written minutes or other records of anyoral discussions with any Regulatory Authority pertaining to the Products promptly after any such discussion.If any Regulatory Material to be provided under this Section 5.2 was originally created in a language other than the Englishlanguage, the providing Party shall provide an English translation along with the original document to the receiving Party at theproviding Party’s cost. 5.3Meetings with Regulatory Authorities.***Confidential Treatment Requested31 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (a)Arcturus shall lead and present at each meeting and teleconference with RegulatoryAuthorities for OTC Products and Co-Developed Arcturus Products. CureVac shall not initiate contact, or respond to any inquiryfrom, any Regulatory Authority with respect to such Products without first notifying Arcturus in writing and obtaining Arcturus’swritten consent for such contact or response. Arcturus shall provide CureVac with at least [*…***…] days (unless impractical)advance notification of any in-person meeting or teleconference with the Regulatory Authorities that relates to the Development ofsuch Products. CureVac shall have the right, but not the obligation, to have its representatives attend (but, unless otherwise requestedby Arcturus, not participate in) such meetings.(b)CureVac shall lead and present at each meeting and/or teleconference with RegulatoryAuthorities for Co-Developed CureVac Products. Arcturus shall not initiate contact, or respond to any inquiry from, any RegulatoryAuthority with respect to such Products without first notifying CureVac in writing and obtaining CureVac’s written consent for suchcontact or response. CureVac shall provide Arcturus with at least […***…] days (unless impractical) advance notification of any in-person meeting or teleconference with the Regulatory Authorities that relates to the Development of such Products. Arcturus shallhave the right, but not the obligation, to have its representatives attend (but, unless otherwise requested by CureVac, not activelyparticipate in) such meetings.5.4Pharmacovigilance. Within […***…] year after the Effective Date, the Parties shall enter into apharmacovigilance agreement regarding the Products setting forth the procedures and actions that the Parties shall employ with respectto safety data sharing and adverse event reporting for the Products (the “Pharmacovigilance Agreement”). The PharmacovigilanceAgreement shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, andexchange (as between the Parties) of adverse event reports and any other information concerning the safety of the Products. ThePharmacovigilance Agreement shall also cover adverse events related to the use of the Arcturus LMD Technology. Such guidelinesand procedures shall be in accordance with, and enable the Parties to fulfill, local and national regulatory reporting obligations underapplicable laws and regulations. Each Party hereby agrees to comply with its respective obligations under such PharmacovigilanceAgreement and to cause its Affiliates and sublicensees to comply with such obligations. 5.5Product Withdrawals and Recalls. (a)If any Regulatory Authority (a) threatens, initiates or advises any action regardingclinical holds of trials or any validated safety signals or to remove any Product from the market in the Territory or (b) requires oradvises a Party or its Affiliates to distribute a “Dear Doctor” letter or its equivalent regarding use of any Product in the Territory, thensuch Party shall notify the other Party of such event within […***…] Business Days (or sooner if required by applicable Laws) aftersuch Party becomes aware of the action, threat, advice or requirement (as applicable). The JSC will discuss and attempt to agree uponwhether to recall or withdraw a Product in the Territory; provided, however, that if the Parties fail to agree within an appropriate timeperiod, Arcturus shall decide whether to recall or withdraw any OTC Product or Co-Developed Arcturus Product in the Territory, andCureVac shall decide whether to recall or withdraw any Co-Developed CureVac Product in the Territory. ***Confidential Treatment Requested32 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (b)Any recall or withdrawal expenses with respect to Products shall be treated as ClinicalDevelopment Costs or Joint Commercialization Costs, as applicable, except to the extent that the recall or withdrawal is attributable tothe gross negligence or willful misconduct of a Party in which event (i) such Party shall bear such costs for which it is responsible and(ii) such costs shall not be included in Clinical Development Costs or Joint Commercialization Costs.ARTICLE 6MANUFACTURING AND SUPPLY6.1General. The Manufacture of the mRNA Constructs and Products, including all process and formulationdevelopment in connection therewith, including CMC activities, shall be overseen and coordinated by the JSC, and conductedpursuant to the sections of the Development Plans and the Commercialization Plans pertaining to such Manufacturing activities. Ateach regularly scheduled JSC meeting, as applicable, each Party shall provide reports summarizing its Manufacturing activities and theresults of such activities. Each Party shall use Diligent Efforts to conduct all Manufacturing activities allocated to such Party under thisAgreement, the Development Plans and the Commercialization Plans.6.2Allocation of Supply Obligations. (a)Preclinical and Clinical Supply.(i)mRNA Constructs. (1)Subject to subsection (ii), CureVac shallManufacture and supply all mRNA Constructs in the Products (whether using the CureVac mRNA Technology or (in case of theOTC Product) the Arcturus mRNA Technology) for use in Development activities under the Development Plans and for Commercialuse. The Parties shall negotiate in good faith and enter into preclinical and clinical supply agreements for mRNA Constructs within [*…***…] days after the Effective Date to enable the Manufacturing and supply for Development of Products.(2)If and to the extent the Parties agree to use theArcturus mRNA Technology (in case of the OTC Product), CureVac's obligation to Manufacture and supply mRNA Constructs shallbe subject to the successful establishment of the production process. The Parties will further specify the necessary activities, includingsufficient periods of testing, in the respective Development Plan.(ii)Products. Arcturus shall Manufacture and supply all Products,using mRNA Constructs supplied by CureVac, for use in Development activities under the Development Plans and for Commercialuse. Such activities include producing lipid-mediated delivery systems and formulating such lipid-mediated delivery systems withmRNA Constructs provided by CureVac. The Parties shall negotiate in good faith and enter into preclinical and clinical supplyagreements for the Products within […***…] days after the Effective Date to enable the Development and Commercialization ofProducts. Each such supply agreement shall contain provisions expressly providing for technology transfer, qualification and licenserights to a second source of Manufacture of Products designated by the Party Commercializing such Product (or OTC Product), subjectto reasonable approval not to be unreasonably withheld, conditioned or delayed.***Confidential Treatment Requested33 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (iii)Fill and Finish. The Parties will discuss and decide upon the use ofa sub-contractor for fill and finish in the JSC in accordance with section 2.5.(b)Commercial Supply. At a time to be determined by the JSC but in any event not laterthan [*…***…] following the completion of […***…] for a Product, the Parties shall negotiate in good faith and enter intocommercial supply agreements governing the Manufacture and supply of mRNA Constructs by CureVac and the Manufacture andsupply of Products by Arcturus, in each case for commercial use. Each such commercial supply agreement shall contain provisionsexpressly providing for technology transfer, qualification and license rights to a second source of Manufacture of Constructs orProducts, respectively, designated by the Party Commercializing such Product (or OTC Product), subject to reasonable approval not tobe unreasonably withheld, conditioned or delayed.(c)For clarification, regarding the Manufacture and supply for Development andCommercialization, CureVac shall have the casting vote in relation to the mRNA Constructs in accordance with Section 2.5(b)(i) andArcturus shall have the casting vote in relation to the Manufacture and supply of Products using mRNA Constructs supplied byCureVac in accordance with Section 2.5(a)(i), in particular in relation to the selection of a second source.6.3Allocation of Manufacturing Costs.(a)Preclinical Manufacture.(i)OTC Products.(1)Pre-Candidate Selection. For all […***…]activities conducted under the OTC Preclinical Development Plan prior to selection of a Development Candidate, […***…] shall be[…***…] responsible for […***…] costs (at the […***…]) and […***…] costs […***…] incurs to […***…], and […***…] shallbe initially responsible for […***…] costs (at the […***…]) and […***…] costs […***…] incurs to […***…] using […***…],provided that such […***…] shall be […***…].(2)Post-Candidate Selection. For […***…]activities conducted under the OTC Preclinical Development Plan from and after selection of an OTC Development Candidate, […***…] shall be […***…] responsible for […***…] costs incurred by […***…] to […***…] and […***…], and […***…] shall[…***…] (at the […***…]) incurred by […***…] for such activities, provided, however, in each case, that the costs have beenincluded in the respective Development Plan or have otherwise been approved by both Parties.(3)Process Development. Notwithstanding theforegoing, […***…] shall be […***…] responsible for […***…] costs (at the […***…]) and […***…] costs incurred by […***…] for process development necessary for establishing GMP production of mRNA Constructs.(4)Payment of Costs. To the extent that a Party isresponsible for costs under this Section 6.3(a)(i), the Parties shall reconcile and pay costs in***Confidential Treatment Requested34 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (1)accordance with the procedures of Section 8.1(a)and true up the costs as provided in Section 4.8. The costs under this Section 6.3(a)(i) shall be considered Manufacturing Costs.(ii)Co-Development Programs. All internal costs (at the FTE Costs)and all Third Party costs incurred by a Party to Manufacture Products under its respective program (i.e., the CureVac Programs or theArcturus Program) prior to IND filing will be borne by such Party and included in the Arcturus Preclinical Program Costs or CureVacPreclinical Program Costs, as applicable, and subject to fifty percent (50%) reimbursement by the other Party pursuant to Sections4.5(b) and 4.6(b) , provided, however, in each case, that the costs have been included in the respective Development Plan or haveotherwise been approved by both Parties.(b)Clinical Development Plans. The Manufacturing Costs incurred by or on behalf ofeither Party under the Clinical Development Plans shall be deemed Clinical Development Costs and shared equally between theParties, subject to a Party’s Opt-Out, provided, however, in each case, that the costs have been included in the respective DevelopmentPlan or have otherwise been approved by both Parties.(c)Commercial Supply. The Manufacturing Costs incurred by or on behalf of eitherParty for Commercialization in the Territory shall be included in Joint Commercialization Costs and shared between the Partiesaccordingly, provided, however, in each case, that the costs have been included in the respective Development Plan or have otherwisebeen approved by both Parties.(d)Contract Manufacturer. Each Party shall have the right to Manufacture the mRNAConstructs and Products under this Agreement through a CMO, provided that its agreement with such CMO shall(i)permit such Party to transfer the manufacturing process used by suchCMO to the other Party, in case and to the extent such technology transfer is required under this Agreement; and(ii)require such CMO to transfer to such Party engaging such CMO allrecords pertaining to such Manufacturing activities, so that such Party may satisfy its obligations under Section 6.5.6.4Transfer of Manufacturing Know-How. (a)Technology Transfer. Following the successful establishment of the productionprocess as described in Section 6.2(a)(i)(2), upon selection of the OTC Product or a Co-Developed Arcturus Product using ArcturusmRNA Technology, the Parties shall establish the procedures for Arcturus to effect the transfer to CureVac of the Arcturus Know-How that is then being used by Arcturus or its CMO in the Manufacture of mRNA Constructs using the Arcturus mRNATechnology. Arcturus shall conduct such technology transfer as soon as practicable in accordance with such procedures, at CureVac’sexpense.(b)Assistance. In connection with the transfer of Know-How under this Section 6.4,Arcturus shall provide reasonable technical assistance at CureVac’s request and expense. 35 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 6.5Manufacturing Records. Each Party shall promptly provide the other Party, upon its reasonable requestfor the purpose of this Agreement, copies of the Manufacturing records (including specifications, protocols, batch records, master batchrecords and other CMC information) maintained by the first Party, its Affiliates or Third Party contractors pertaining to mRNAConstructs and Products for such other Party’s use in connection with the Manufacture of the mRNA Constructs or Products under thisAgreement, to the extent reasonably necessary to perform obligations or exercise rights under this Agreement. Each Party herebygrants the other Party the right to reference (and have referenced by its CMO) the Drug Master Files, if any, maintained by the firstParty, its Affiliates or Third Party contractors pertaining to mRNA Constructs and Products for such other Party’s use in connectionwith the Manufacture of the mRNA Constructs and Products under this Agreement. For as long as a Party Manufactures any mRNAConstruct or Product under this Agreement for use in Development or Commercialization by the other Party, the other Party shall havethe right to inspect the facility where such mRNA Construct or Product is being Manufactured, upon reasonable request by such otherParty and at a time mutually agreed upon by the Parties, provided that neither Party shall have the right to conduct such inspection atany given facility more frequently than [*…***…] per calendar year. As between the Parties, all proprietary information pertaining tothe facility and personnel obtained by the inspecting Party through such inspection shall be deemed Confidential Information of theinspected Party.6.6Manufactured Products. Each Party represents and warrants that all mRNA Constructs and ProductsManufactured and supplied by such Party for clinical use under this Agreement shall at the time of delivery: (a) meet the applicablespecifications; (b) be Manufactured in accordance with current Good Manufacturing Practices; and (c) be Manufactured in accordancewith all applicable Laws.ARTICLE 7COMMERCIALIZATION7.1General. Subject to Section 7.5, Arcturus shall have the primary responsibility for all aspects of theCommercialization of OTC Products and Co-Developed Arcturus Products in the Field in the Territory, and CureVac shall have theprimary responsibility for all aspects of the Commercialization of Co-Developed CureVac Products in the Field in the Territory, suchactivities to include in each case: (a) developing and executing a commercial launch and pre-launch plan of a Product, (b) negotiatingwith applicable Governmental Authorities regarding the pricing and reimbursement status of the applicable Products; (c) strategicmarketing and promotion, sale force detailing, advertising, medical education and liaison; (d) offer for sale, booking sales, importation,product distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection,inventory and receivables and other sales activities; (f) providing customer support, including handling medical queries, and performingother related functions; (g) conforming its practices and procedures to applicable Laws relating to the marketing, detailing andpromotion of the applicable Products and (h) any Phase 4 Studies that are not Required Phase 4 Studies. 7.2Commercial Diligence. Arcturus shall use Diligent Efforts to Commercialize one (1) OTC Product and,if CureVac exercises the CureVac Option, one (1) Co-Developed Arcturus Product in each country in which it receives RegulatoryApproval. If Arcturus***Confidential Treatment Requested 36 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy exercises the Arcturus Option for one or both CureVac Programs, CureVac shall use Diligent Efforts to Commercialize one Co-Developed CureVac Product from each such CureVac Program in each country in which it receives Regulatory Approval.7.3Commercialization Plan. No later than [*…***…] after the Initiation of the first Phase 3 Clinical Trialof (a) each Co-Developed CureVac Product, but excluding Opt-Out Products, CureVac shall prepare and provide to Arcturus forreview and discussion a written plan for the Commercialization of such Product in the Territory and (b) the OTC Product and the Co-Developed Arcturus Product, but excluding Opt-Out Products, Arcturus shall prepare and provide to CureVac for review anddiscussion a written plan for the Commercialization of such Product in the Territory (with respect to each Product, a“Commercialization Plan”). Each Commercialization Plan shall include a reasonably detailed description of (i) the level of activitiesand support for, anticipated timeline and corresponding budget for the applicable Party’s Commercialization activities and (ii) thesupply by the other Party with respect to such Product, including mRNA Constructs. Each Party shall periodically (at least on anannual basis) prepare updates and amendments to its Commercialization Plans to reflect changes in its plans, including in response tochanges in the marketplaces, relative success of the Products and other relevant factors influencing such plans and activities. EachParty shall submit all updates and amendments to each Commercialization Plan to the other Party for review and discussion beforeadopting such updates and amendments.7.4Reports. Each Party shall update the JSC at each regularly scheduled JSC meeting regarding itsCommercialization activities with respect to the applicable Products in the Territory. Each such update shall be in a form to be agreedby the JSC and shall summarize such Party’s (either by itself or through its Affiliates and its sublicensees) Commercialization activitieswith respect to the applicable Products in the Territory. Each update will be at a level of detail reasonably requested by the other Partyand sufficient to enable such other Party to determine such Party’s compliance with its diligence obligations pursuant to Section 7.2.7.5Co-Commercialization. Promptly following the completion of Phase 2 Clinical Trials, the Parties shalldiscuss in good faith the potential for Co-Commercialization of a Co-Developed Product and shall negotiate […***…] to enter into aterm sheet specifying the terms pursuant to which the Parties may Co-Commercialize any such Co-Developed Product (such termsmay include a territorial split). In the event that the Parties are unable to agree, then the Party leading the Co-Development shall havethe right to Commercialize (but not license to or co-commercialize with a Third Party except in accordance with Section 7.6) such Co-Developed Product for the applicable share of Operating Profit (or Loss).7.6Partnering. With respect to any Co-Developed Products, the Parties shall mutually agree upon a strategyfor potential licensing and the lead Party to identify, negotiate and enter into a sublicense to a Third Party ("Partnering"). In the eventthat the Parties are unable to agree, then the Party leading the Co-Development shall be the lead Party. In the conduct of any suchlicensing activities by a Party, the other Party shall be kept informed in reasonable detail of the list of identified potential licensees, thestatus of inquiries and discussions and the progress of any negotiations. In addition, the non-lead Party shall be provided a copy of anyterm sheet or draft agreement for comment, which input shall be reasonably considered by the lead Party. For clarity, CommercialPartnering activities shall***Confidential Treatment Requested37 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy be considered "Commercialization" as defined in Section 1.23, provided, however, that costs associated with Partnering activities shallbe shared equally as Development Costs prior to the execution of a Partnering agreement and as Commercialization Costs after theexecution of a Partnering agreement.ARTICLE 8FINANCIAL PROVISIONS8.1Preclinical Costs for OTC Products.(a)Reporting. Within [*…***…] days after the end of each month during which eitherParty incurs any costs in accordance with the OTC Preclinical Development Plan that are subject to cost sharing under Sections 4.8(a)and 6.3(a)(i), each Party shall submit to the Finance Officers a report summarizing in reasonable detail all such internal costs (at theFTE Costs) and Third Party costs incurred by such Party to conduct the applicable activities in accordance with the OTC PreclinicalDevelopment Plan; provided that if there are any such costs incurred in such month that a Party is unable to timely include in suchfinancial report, such amount shall be included and reconciled in the financial report in a future month. Each such report shall specifyin reasonable detail all such costs, and if requested by the other Party, any invoices or other supporting documentation for anypayments to a Third Party that individually exceed […***…] Dollars ($[…***…]) or with respect to which documentation isotherwise reasonably requested shall be promptly provided. (b)Payment. Within […***…] Business Days after receipt of the reports under Section8.1(a), the Finance Officers shall conduct a reconciliation and determine if any reconciliation payment is due from one Party to anotherfor such calendar month and, if so, the amount of such reconciliation payment. If any such payment is owed, the applicable Party shallmake such payment to the other Party within […***…] days after the Finance Officer’s reconciliation; provided, however, that in theevent of any disagreement with respect to the calculation of such payment, any undisputed portion thereof shall be paid in accordancewith the foregoing timetable and the remaining, disputed portion shall be paid within […***…] Business Days after the date on whichthe Parties, using good faith efforts, resolve the dispute. In addition, within […***…] days after the end of each calendar quarterduring which a Party is conducting activities under the OTC Preclinical Development Plan, each Party shall submit to the FinanceOfficers a statement of all costs such Party incurred that are subject to cost sharing under Sections 4.8(a) and 6.3(a)(i), and to the extentthat such statements differ from the previously provided monthly statements, the Finance Officers will determine any true-up paymentdue from one Party to the other, which payments will be due within […***…] days after the Finance Officers’ determination.(c)True-Up. The Parties will provide all information and make payments necessary tocomply with any mechanism determined by the JSC pursuant to Section 4.8(b).8.2Clinical Development Costs. (a)Reconciliation of Clinical Development Costs. Within […***…] days after the endof each calendar quarter during which either Party incurs any Clinical Development Costs for any Product which have been includedin the respective Development***Confidential Treatment Requested38 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy Plan or have otherwise been approved by both Parties, unless an Opt-Out has become effective for such Product prior to such calendarquarter, each Party shall submit to the Finance Officers a report setting forth the Clinical Development Costs it incurred in suchcalendar quarter for each Product; provided that if there are any Clinical Development Costs incurred in such calendar quarter that aParty is unable to timely include in such financial report, such amount shall be included and reconciled in the financial report in a futurecalendar quarter. Each such report shall specify in reasonable detail all such costs, and if requested by the other Party, any invoices orother supporting documentation for any payments to a Third Party that individually exceed [*…***…] Dollars ($[…***…]) or withrespect to which documentation is otherwise reasonably requested shall be promptly provided. (b)Payment of Quarterly Aggregate Payment. Within […***…] Business Days afterreceipt of the reports under Section 8.2(a), the Finance Officers shall conduct a reconciliation of the actual costs incurred by the Partiesfor each Product and determine if any reconciliation payment is due from one Party to another for such Product for such calendarquarter and, if so, the amount of such reconciliation payment (the “Quarterly Reconciliation Payment” for a Product) such that eachParty bears fifty percent (50%) of the Clinical Developments Costs for each Product and calendar quarter. The Finance Officers shalldetermine, based on the Quarterly Reconciliation Payments for all Products for such calendar quarter, the overall payment due fromone Party to another (the “Quarterly Aggregate Payment”). If a Quarterly Aggregate Payment is owed, the applicable Party shallmake such payment to the other Party within […***…] days after the Finance Officer’s reconciliation; provided, however, that in theevent of any disagreement with respect to the calculation of any Quarterly Reconciliation Payment, any undisputed portion of suchQuarterly Aggregate Payment shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall bepaid within […***…] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute.8.3Joint Commercialization Cost Sharing Prior to First Commercial Sale.(a)Payment of Joint Commercialization Costs. Prior to First Commercial Sale of eachProduct, the Parties shall share all Joint Commercialization Costs incurred for such Product prior to an Opt-Out with respect to suchProduct, with each Party responsible for fifty percent (50%) of such costs, provided, however, that the costs have been included in therespective Commercialization Plan or have otherwise been approved by both Parties. Following the reconciliation of JointCommercialization Costs incurred for such Product during a calendar quarter prior to an Opt-Out for such Product pursuant to Section8.3(b), the Party owing a reconciliation payment shall make such payment in accordance with Section 8.3(b).(b)Reconciliation of Joint Commercialization Costs. Within […***…] days after theend of each calendar quarter prior to First Commercial Sale anywhere in the Territory and during which either Party incurs prior to anOpt-Out any Joint Commercialization Costs with respect to a Product, both Parties shall submit to the Finance Officers a report settingforth the Joint Commercialization Costs it incurred in such calendar quarter; provided that if there are any Joint CommercializationCosts incurred in such calendar quarter that a Party is unable to timely include in such financial report, such amount shall be includedand reconciled in the financial report in the next possible calendar quarter. Each such report shall specify in reasonable detail all suchcosts, and if requested by the other***Confidential Treatment Requested39 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy Party, any invoices or other supporting documentation for any payments to a Third Party that individually exceed [*…***…] Dollars($[…***…]) or with respect to which documentation is otherwise reasonably requested shall be promptly provided. Within […***…]Business Days after receipt of such reports, the Finance Officers shall confer and agree in writing on whether a reconciliation paymentis due from one Party to the other Party, and if so, the amount of such reconciliation payment, so that the Parties share equally the JointCommercialization Costs for such Product. The Party required to pay such reconciliation payment shall make such payment to theother Party within […***…] Business Days after the end of such […***…] Business Day conferral period; provided, however, thatin the event of any disagreement with respect to the calculation of such reconciliation payment, any undisputed portion of suchreconciliation payment shall be paid in accordance with the foregoing timetable and the remaining, disputed portion shall be paidwithin […***…] Business Days after the date on which the Parties, using good faith efforts, resolve the dispute. 8.4Operating Profit and Loss Sharing After First Commercial Sale.(a)Share of Operating Profits and Operating Losses. Following the first calendarquarter in which occurs the First Commercial Sale of each Product anywhere in the Territory, and for so long as such Product is beingsold in the Territory, and provided that an Opt-Out has not occurred with respect to such Product, the Parties shall share equally allOperating Profits and all Operating Losses (as applicable) for such Product in the Territory. The remainder of this Section 8.4 willapply only for Products for which an Opt-Out has not occurred.(b)Calculation and Payment.(i)Within […***…] days after the end of each calendar quarterbeginning with the calendar quarter in which the First Commercial Sale of each Product occurs in the Territory, the applicable Party(i.e., Arcturus, with respect to OTC Products and Co-Developed Arcturus Products, and CureVac, with respect to Co-DevelopedCureVac Products) shall report to the Finance Officers the Net Sales of the applicable Product in the Territory, and each Party shallreport to the Finance Officers the Joint Commercialization Costs incurred by it in such calendar quarter for such Product in theTerritory; provided that if there are any Joint Commercialization Costs incurred in such calendar quarter that a Party is unable to timelyinclude in such financial report, such amount shall be included and reconciled in the financial report for a future calendar quarter. Eachsuch report shall specify in reasonable detail all deductions to the extent allowed in the calculation of such Net Sales and all expensesincluded in Joint Commercialization Costs, and if requested by the other Party, any invoices or other supporting documentation for anypayments to a Third Party that individually exceed […***…] Dollars ($[…***…]) or with respect to which documentation isotherwise reasonably requested shall be promptly provided. (ii)Within […***…] Business Days after receipt of such reports, theFinance Officers shall confer and agree upon in writing a consolidated financial statement for each Product setting forth: (A) theOperating Profit or Operating Loss for such calendar quarter and (B) each Party’s fifty percent (50%) share of Operating Profit orOperating Loss. The Finance Officers will also determine, based on the amounts in the preceding clause (B) for all Products, theamount due from one Party to the other Party such that each Party bears fifty percent (50%) of Operating Loss and receives fiftypercent (50%) of Operating Profit for***Confidential Treatment Requested40 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy each Product. Within [*…***…] Business Days after such […***…] Business Day conferral period, Arcturus or CureVac, asapplicable, shall make such payment to the other Party; provided, however, that in the event of any disagreement with respect to thecalculation of such payment, any undisputed portion of such payment shall be paid in accordance with the foregoing timetable and theremaining, disputed portion shall be paid within […***…] Business Days after the date on which the Parties, using good faith efforts,resolve the dispute.8.5Royalty Payments for Products Following an Opt-Out.(a)Royalties. Subject to the other terms of this Section 8.5, the Party that is responsiblefor selling an Opt-Out Product shall make quarterly, non-refundable, non-creditable royalty payments to the other Party equal to theapplicable Royalty Rate of Net Sales of such Opt-Out Product in the Territory.(b)Royalty Term. A Party’s royalty payment obligations under this Section 8.5 withrespect to a particular Opt-Out Product and country shall commence upon the First Commercial Sale of such Opt-Out Product in suchcountry (by such Party or its respective Affiliates or sublicensees) and shall continue, on a Product-by-Product and country-by-countrybasis, until the latest of (i) the expiration of the last to expire Valid Claim in such country claiming the composition of, or the method ofmaking or using, such Opt-Out Product; (ii) the expiration of any Regulatory Exclusivity granted with respect to such Opt-Out Productin such country; and (iii) […***…] years after the First Commercial Sale of such Opt-Out Product in such country (the “RoyaltyTerm” for such Product and country).(c)Royalty Reduction upon Loss of Exclusivity. In any country in which there is noValid Claim claiming the composition of, or the method of making or using, a particular Opt-Out Product, and no RegulatoryExclusivity granted with respect to such Opt-Out Product, during the Royalty Term for such Opt-Out Product and country, theapplicable Party shall owe royalties under this Section 8.5 on Net Sales of such Opt-Out Product in such country at a rate that is […***…] ([…***…]%) of the applicable Royalty Rate.(d)Royalty Reports and Payment. Within […***…] days after each calendar quarter,commencing with the calendar quarter during which the First Commercial Sale of any Opt-Out Product is made anywhere in theTerritory, the Party responsible for making royalty payments shall provide the other Party with a report that contains the followinginformation for the applicable calendar quarter, on an Opt-Out Product-by-Opt-Out Product and country-by-country basis: (i) theamount of gross sales of the Opt-Out Products, (ii) a calculation of the royalty payment due on such sales, and (iii) the exchange ratefor such country. Concurrent with the delivery of the applicable quarterly report, the Party providing such report shall pay in Dollarsall royalties due to the other Party with respect to Net Sales of Opt-Out Products by such Party and its Affiliates and sublicensees forsuch calendar quarter.8.6Currency; Exchange Rate. All payments to be made by a Party to the other Party under this Agreementshall be made in Dollars or Euros, as appropriate, by bank wire transfer in immediately available funds to a bank account designated bywritten notice from the Party that receives the payment. The rate of exchange to be used in computing the amount of currencyequivalent in Dollars or Euros shall be made at the average of the closing exchange rates reported by the Wall Street Journal(http://quotes.wsj.com/fx/EURUSD), or***Confidential Treatment Requested41 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy such other source as the Parties may agree in writing, of the applicable reporting period for the payment due.8.7Late Payments. If a Party does not receive payment of any sum due to it on or before the due datetherefor, simple interest shall thereafter accrue on the sum due to such Party from the due date until the date of payment at a per-annumrate of U.S. prime plus [*…***…] percentage points or the maximum rate allowable by applicable Law, whichever is less.8.8Taxes.(a)Taxes on Income. Each Party shall be solely responsible for the payment of all taxesimposed on its share of income arising directly or indirectly from the activities of the Parties under this Agreement. (b)Tax Cooperation. The Parties agree to cooperate with one another and use reasonableefforts to avoid or reduce tax withholding or similar obligations in respect of royalties, milestone payments, and other payments madeby a Party to the other Party under this Agreement. To the extent a Party is required by applicable Laws to deduct and withhold taxeson any payment to the other Party, such Party shall (i) promptly notify the other Party of such requirement; (ii) pay the amounts of suchtaxes to the proper Governmental Authority in a timely manner, (iii) promptly provide the other party with an official receipt or otherdocument evidencing such payment of tax. Each Party shall provide the other Party any tax forms that may be reasonably necessary inorder for such other Party to not withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty, to theextent legally able to do so. Each Party shall use reasonable efforts to provide any such tax forms to the other Party in advance of thedue date. Each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by Law, of withholdingtaxes or similar obligations resulting from payments made under this Agreement.(c)Payor Withholding Tax Action. If a Party (the “Payor”) is required to make apayment to the other Party subject to a deduction or withholding of tax, then (A) if such deduction or withholding of tax obligationarises as a result of any action by Payor, including an assignment of this Agreement, or any failure on the part of Payor to comply withapplicable Law, that has the effect of modifying the tax treatment or increasing the tax of the other Party (a “Payor Withholding TaxAction”), then Payor shall increase the payment (in respect of which such deduction or withholding of tax is required to be made) bythe amount necessary (the “Additional Tax”) to ensure that the other Party receives an amount equal to the amount that it would havereceived had no such Payor Withholding Tax Action occurred, and (B) Payor shall deduct and withhold the Additional Tax from thepayment made by Payor to the other Party. Payor shall timely remit the Additional Tax, along with any other tax deducted andwithheld from the payment made by Payor, to the proper Governmental Authority for the account of the other Party in accordance withapplicable Law.8.9Records and Audit Rights. Each Party shall maintain complete and accurate records in sufficient detailto permit the other Party to confirm the accuracy of the amount of Clinical Development Costs, Operating Profit (and Loss), royaltiesand other amounts payable under this Agreement. Upon reasonable prior notice, such records shall be open during regular businesshours for a period of […***…] years from the creation of individual records for examination by an independent certified publicaccountant selected by the***Confidential Treatment Requested42 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy auditing Party and reasonably acceptable to the audited Party for the sole purpose of verifying for the auditing Party the accuracy of thefinancial reports furnished by the audited Party pursuant to this Agreement or of any payments made, or required to be made, by or tothe audited Party pursuant to this Agreement. Such audits not occur more often than [*…***…] each calendar year. Such auditorshall not disclose the audited Party’s Confidential Information to the auditing Party, except to the extent such disclosure is necessary toverify the accuracy of the financial reports furnished by the audited Party or the amount of payments to or by the audited Party underthis Agreement. Any amounts shown to be owed but unpaid shall be paid within […***…] days after the accountant’s report, plusinterest (as set forth in Section 8.7) from the original due date (unless challenged in good faith by the audited Party in which case anydispute with respect thereto shall be resolved in accordance with Section 14.6). The auditing Party shall bear the full cost of such auditunless such audit reveals an overpayment to, or an underpayment by, the audited Party that resulted from a discrepancy in the financialreport provided by the audited Party for the audited period, which underpayment or overpayment was more than […***…] percent([…***…]%) of the amount set forth in such report, in which case the audited Party shall reimburse the auditing Party for the costs forsuch audit. If any such overpayment exceeds such five percent amount, then the auditing Party will refund such amount to the auditingParty within […***…] days after the accountant’s report (unless challenged in good faith by the audited Party in which case anydispute with respect thereto shall be resolved in accordance with Section 14.7). ARTICLE 9INTELLECTUAL PROPERTY RIGHTS9.1Ownership of Inventions.(a)Inventorship of all Inventions shall be determined in accordance with appliable patentlaws. Notwithstanding the previous sentence, ownership of all Inventions, as between the Parties, will be determined and assigned inaccordance with Section 9.1(b) Section 9.1(c), respectively.(b)(i) Arcturus shall solely own any and all Inventions that are improvements,modifications, derivatives or enhancements to the Arcturus LMP Technology or the Arcturus mRNA Technology (but not also animprovement to the CureVac mRNA Technology) (the “Arcturus Improvement Technology”), (ii) CureVac shall solely own anyand all Inventions that are improvements, modifications, derivatives or enhancements to the CureVac mRNA Technology (but not alsoan improvement to the Arcturus LMP Technology or the Arcturus mRNA Technology) (the “CureVac Improvement Technology”),and (iii) Arcturus and CureVac shall jointly own any and all Inventions that are improvements, modifications, derivatives orenhancements to both (A) the CureVac mRNA technology and (B) the Arcturus LMP Technology and/or the Arcturus mRNATechnology (the “Joint Improvement Technology”).(c)CureVac hereby assigns to Arcturus all of its right, title and interest in and to any and allArcturus Improvement Technology, and agrees to take such actions reasonably requested by Arcturus to evidence suchassignment. Arcturus hereby assigns to CureVac all of its right, title and interest in and to any and all CureVac Improvement***Confidential Treatment Requested43 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy Technology, and agrees to take such actions reasonably requested by Arcturus to evidence such assignment. To the extent any JointImprovement Technology is made solely by one Party, such Party hereby assigns to the other Party, without any additional costs, anundivided one-half interest in and to such Joint Improvement Technology, and agrees to take such actions reasonably requested by theother Party to evidence such assignment; this assignment obligation shall apply accordingly if otherwise an assignment of a partialinterest is necessary for each Party to have an undivided one-half interest in and to such Joint Improvement Technology. (d)All jointly owned Inventions shall be referred to as “Joint IP”, and each Party shallown an undivided one-half interest in the Joint IP. Know-How included in Joint IP shall be referred to as “Joint Know-How” andPatent Rights included in Joint IP shall be referred to as “Joint Patents”. (e)Personnel Obligations. Prior to beginning work under this Agreement, each employee,agent or independent contractor of a Party or its respective Affiliates shall be bound by non-disclosure and invention assignmentobligations that are consistent with the obligations of such Party in this Article 9, including: (i) promptly reporting any invention,discovery, process or other intellectual property right; (ii) assigning to such Party, as appropriate, all of his or her right, title and interestin and to any invention, discovery, process or other intellectual property right; (iii) cooperating in the preparation, filing, prosecution,maintenance and enforcement of any patent and patent application; (iv) performing all acts and signing, executing, acknowledging anddelivering any and all documents required for effecting the obligations and purposes of this Agreement; and (v) abiding by theobligations of confidentiality and non-use set forth in Article 10. It is understood and agreed that such non-disclosure and inventionassignment agreement need not reference or be specific to this Agreement. Each Party shall be solely responsible for payments thatmay be required to any of such Party’s employees, agents or independent contractors in connection with or with respect to suchagreements, including moral rights (or droit moral) payments with respect to any Inventions hereunder.(f)Background Technology. Each Party shall continue to own all right, title and interestin and to its background technology and any technology or intellectual property that is not an Invention (i.e., Arcturus Technology andCureVac Technology, as applicable, excluding Inventions). 9.2Disclosure of Inventions. Each Party shall promptly disclose to the other Party all Inventions and shallalso respond promptly to reasonable requests from the other Party for additional information relating to such Inventions. 9.3Exploitation and Licenses of Joint IP. Each Party (i) shall have the right to license, and exploit suchJoint IP (including Joint Know-How and Joint Patents) anywhere in the world, without a duty of accounting or an obligation to seekconsent from the other Party for the exploitation or license of the Joint IP (subject to the licenses granted to the other Party under thisAgreement and subject to any other intellectual property held by such other Party), and (ii) hereby grants to the other Party a cost-free,perpetual, non-exclusive, transferable license, with the right to grant sublicenses in multiple tiers, under its interest in the Joint IP toenable the other Party to use the Joint IP as specified in (i).9.4Patent Prosecution. 44 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (a)Arcturus Patents.(i)Arcturus shall be responsible for filing, prosecuting and maintainingthe Arcturus Patents (excluding the Joint Patents), at its own cost and expense, and shall keep CureVac reasonably informed of thestatus of such Arcturus Patents. With respect to any Arcturus Patents (excluding Joint Patents) that specifically claim (i) a Co-Developed CureVac Product but not any other product or (ii) Joint Improvement Technology (the “Arcturus Product Patents”),Arcturus shall consult with CureVac and shall promptly provide CureVac with material correspondence received from any patentauthorities in connection therewith. In addition, Arcturus shall promptly provide CureVac with drafts of all proposed material filingsand correspondence to any patent authorities with respect to such Arcturus Product Patents for CureVac’s review and comment prior tothe submission of such proposed filings and correspondence. Arcturus shall confer with CureVac and take into considerationCureVac’s comments prior to submitting such filings and correspondence, provided that CureVac shall provide such comments within[*…***…] days of receiving the draft filings and correspondence from Arcturus. If CureVac does not provide comments within suchperiod of time, then CureVac shall be deemed to have no comment to such proposed filings or correspondence. In case ofdisagreement between the Parties with respect to the filing, prosecution and maintenance of such Arcturus Product Patents, the finaldecision shall be made by Arcturus. For the purpose of this Article 9, “prosecution” shall include any post-grant proceeding includingsupplemental examination, post grant review proceeding, inter parties review proceeding, patent interference proceeding, oppositionproceeding and reexamination.(ii)Arcturus shall notify CureVac of any decision to cease prosecutionor maintenance of any Arcturus Product Patents. Arcturus shall provide such notice at least […***…] days prior to any filing orpayment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such Arcturus ProductPatent. In such event, Arcturus shall permit CureVac, at its discretion and expense, to continue prosecution or maintenance of suchArcturus Product Patent. CureVac’s prosecution or maintenance of such Arcturus Product Patent shall not change the Parties’respective rights and obligations under this Agreement with respect to such Arcturus Product Patent other than those expressly set forthin this Section 9.4(a)(ii).(b)CureVac Patents.(i)CureVac shall be responsible for filing, prosecuting and maintainingthe CureVac Patents (excluding the Joint Patents), at its own cost and expense, and shall keep Arcturus reasonably informed of thestatus of such CureVac Patents. With respect to any CureVac Patents (excluding Joint Patents) that specifically claim (i) an OTCProduct or Co-Developed Arcturus Product but not any other product or (ii) Joint Improvement Technology (the “CureVac ProductPatents”), CureVac shall consult with Arcturus and shall promptly provide Arcturus with material correspondence received from anypatent authorities in connection therewith. In addition, CureVac shall promptly provide Arcturus with drafts of all proposed materialfilings and correspondence to any patent authorities with respect to such CureVac Product Patents for Arcturus’s review and commentprior to the submission of such proposed filings and correspondence. CureVac shall confer with Arcturus and take into considerationArcturus’s comments prior to submitting such filings and correspondence, provided that Arcturus shall provide such comments within[…***…] days of receiving the draft filings and correspondence from CureVac. If ***Confidential Treatment Requested45 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy Arcturus does not provide comments within such period of time, then Arcturus shall be deemed to have no comment to such proposedfilings or correspondence. In case of disagreement between the Parties with respect to the filing, prosecution and maintenance of suchCureVac Product Patents, the final decision shall be made by CureVac. (ii)CureVac shall notify Arcturus of any decision to cease prosecutionor maintenance of any CureVac Product Patents. CureVac shall provide such notice at least [*…***…] days prior to any filing orpayment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such CureVac ProductPatent. In such event, CureVac shall permit Arcturus, at its discretion and expense, to continue prosecution or maintenance of suchCureVac Product Patent. Arcturus’s prosecution or maintenance of such CureVac Product Patent shall not change the Parties’respective rights and obligations under this Agreement with respect to such CureVac Product Patent other than those expressly set forthin this Section 9.4(b)(ii).(c)Joint Patents.(i)The Parties shall determine which Party shall be responsible for filing,prosecuting and maintaining the Joint Patents worldwide and the Parties shall share equally the cost for the prosecution andmaintenance of Joint Patents, provided that unless agreed otherwise the Parties intend that the Party designated as the lead forCommercialization of an OTC or Co-Developed Product shall be responsible for prosecuting and maintaining applicable Joint Patents.The prosecuting Party shall consult with the other Party and keep the other Party reasonably informed of the status of the Joint Patentsand shall promptly provide the other Party with material correspondence received from any patent authorities in connectiontherewith. In addition, the prosecuting Party shall promptly provide the other Party with drafts of all proposed material filings andcorrespondence to any patent authorities with respect to Joint Patents for review and comment prior to the submission of such proposedfilings and correspondence. The prosecuting Party shall confer with the other Party and take into consideration such other Party’scomments prior to submitting such filings and correspondence, provided that the other Party shall provide such comments within […***…] days of receiving the draft filings and correspondence from the prosecuting Party. If the other Party does not providecomments within such period of time, then it shall be deemed to have no comment to such proposed filings or correspondence. In caseof disagreement between the Parties with respect to the filing, prosecution and maintenance of such Joint Patents, the final decisionshall be made the prosecuting Party.(ii)The prosecuting Party shall notify the other Party of any decision tocease prosecution or maintenance of any Joint Patents. The prosecuting Party shall provide such notice at least […***…] days prior toany filing or payment due date, or any other due date that requires action in order to avoid loss of rights, in connection with such JointPatent. In such event, the prosecuting Party shall permit the other Party, at its discretion and expense, to continue prosecution ormaintenance of such Joint Patent.(d)Collaboration. Each Party shall provide the other Party all reasonable assistance andcooperation in the patent prosecution efforts under this Section 9.4, including providing any necessary powers of attorney andexecuting any other required documents or instruments for such prosecution. When a Party assumes the responsibilities for theprosecution and maintenance of a Patent under Section 9.4(a)(ii), 9.4(b)(ii) or 9.4(c)(ii) above, the other Party shall promptly transfer tosuch Party the patent prosecution files for ***Confidential Treatment Requested46 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy such Patent and provide reasonable assistance in the transfer of the prosecution responsibilities. The Party assuming such prosecutionand maintenance responsibilities shall have the right to engage its own counsel to do so. 9.5Patent Enforcement.(a)If either Party becomes aware of (i) any existing or threatened infringement of anyArcturus Patent or CureVac Patents (including Joint Patents) in the Field in the Territory, which infringing activity involves the using,making, importing, exporting, offering for sale or selling Products or products that are competitive with Products, or the submission toa Party or a Regulatory Authority of an application for a product that references a Product, or (ii) a declaratory judgment actionasserting the invalidity, unenforceability or non-infringement of any Arcturus Patent or CureVac Patent (including a Joint Patents) inthe Territory in connection with any infringement described in clause (i) (each of (i) and (ii), a “Product Infringement”), it shallpromptly notify the other Party in writing to that effect, and the Parties will consult with each other regarding any actions to be takenwith respect to such Product Infringement.(b)CureVac shall have the first right to bring and control any legal action to enforceCureVac Patents (and Joint Patents prosecuted by CureVac) in connection with any Product Infringement (“CureVac ProductInfringement”) as it reasonably determines appropriate, and Arcturus shall have the right to be represented in any such action bycounsel of its choice. Prior to CureVac’s commencing any such action, and periodically during the course of such action, the Partiesshall meet to discuss CureVac’s proposed strategy for such action and the progress thereof, and CureVac shall reasonably consider anycomments thereto made by Arcturus. If CureVac decides not to bring such legal action, it shall so inform Arcturus promptly andArcturus shall have the right to bring and control any legal action to enforce CureVac Patent in connection with such CureVac ProductInfringement as it reasonably determines appropriate after consultation with CureVac.(c)Arcturus shall have the first right to bring and control any legal action to enforceArcturus Patents (and Joint Patents prosecuted by Arcturus) in connection with any Product Infringement (“Arcturus ProductInfringement”) as it reasonably determines appropriate, and CureVac shall have the right to be represented in any such action bycounsel of its choice. Prior to Arcturus’s commencing any such action, and periodically during the course of such action, the Partiesshall meet to discuss Arcturus’s proposed strategy for such action and the progress thereof, and Arcturus shall reasonably consider anycomments thereto made by CureVac. If Arcturus decides not to bring such legal action, it shall so inform CureVac promptly andCureVac shall have the right to bring and control any legal action to enforce Arcturus Patent in connection with such Arcturus ProductInfringement as it reasonably determines appropriate after consultation with Arcturus.(d)Arcturus shall have the exclusive right to enforce the Arcturus Patents (other than JointPatents) for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate. CureVacshall have the exclusive right to enforce the CureVac Patents (other than Joint Patents) for any infringement that is not a ProductInfringement at its own expense as it reasonably determines appropriate. Each Party shall have the right to enforce the Joint Patents forany infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate. 47 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (e)At the request of the Party bringing the action against any Product Infringement, theother Party shall provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents,cooperating in discovery and joining as a party to the action if required. In connection with any such proceeding, the Party bringingthe action shall not enter into any settlement admitting the invalidity of, or otherwise impairing any Patent Rights of the other Party.(f)All costs and expenses incurred in connection with an enforcement action relating to aclaim of Product Infringement shall be treated as Joint Commercialization Costs for the applicable Product, except that with respect toOpt-Out Products, the Party bringing the action will bear its costs and expenses, and those of the other Party if incurred at such Party’srequest. Any recoveries from such actions shall (i) in the case of Opt-Out Products, be used first to reimburse the Parties’ costs andexpenses in connection with such actions, and the remainder will be deemed Net Sales and retained by the selling Party, subject to aroyalty payment to the other Party in accordance with Section 8.5, and (ii) in the case of other Products, be deemed Net Sales andshared between the Parties as part of the Operating Profit (or Loss) for the applicable Product.9.6Orange Book. Each Party shall cooperate with the other Party to: (i) file appropriate information with theFDA listing any of the Arcturus Patents and CureVac Patents (including Joint Patents) in the Orange Book; and (ii) with respect toother countries in the Territory, file appropriate information with the applicable Regulatory Authority listing any such Patent Rights inthe listing source in such country.9.7Patent Extensions(a)The Parties shall cooperate in obtaining patent term restoration (under but not limited tothe U.S. Drug Price Competition and Patent Term Restoration Act and its foreign equivalent), supplemental protection certificates ortheir equivalents, and patent term extensions with respect to the Arcturus Patents and CureVac Patents (including Joint Patents) in anycountry and/or region where applicable.(b)CureVac shall determine which Arcturus Patents and CureVac Patents it shall apply toextend in any country and/or region for any Co-Developed CureVac Product; provided that CureVac shall not have the right to extendany Arcturus Patent that claims (generically or specifically) any product then being developed or commercialized other than a Co-Developed CureVac Product without the prior written consent of Arcturus, which shall not be unreasonably withheld, conditioned ordelayed. Arcturus shall determine which Arcturus Patents and CureVac Patents it shall apply to extend in any country and/or regionfor any OTC Product or Co-Developed Arcturus Product; provided that Arcturus shall not have the right to extend any CureVacPatent that claims (generically or specifically) any product then being developed or commercialized other than an OTC Product or Co-Developed Arcturus Product without the prior written consent of CureVac, which shall not be unreasonably withheld, conditioned ordelayed. 9.8Patents Licensed From Third Parties. Each Party’s rights under this Article 9 with respect to theprosecution and enforcement of any Arcturus Patent or CureVac Patent shall be subject to the rights retained by and/or any obligationsto any upstream licensor to prosecute and enforce such Patent Right, if such Arcturus Patent is subject to an upstream licenseagreement.48 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy 9.9Trademarks. CureVac shall have the right to brand the Co-Developed CureVac Products in Territoryusing CureVac trademarks and any other trademarks and trade names it determines appropriate for such Products (the “CureVacProduct Marks”), which may vary by country or within a country. CureVac shall own all rights in the CureVac Product Marks andshall register and maintain the CureVac Product Marks in the countries and regions in the Territory that it determines reasonablynecessary. Arcturus shall have the right to brand the OTC Products and Co-Developed Arcturus Products using Arcturus trademarksand any other trademarks and trade names it determines appropriate for such Products (the “Arcturus Product Marks”). Arcturusshall own all rights in the Arcturus Product Marks and shall register and maintain the Arcturus Product Marks in the countries andregions in the Territory that it determines reasonably necessary. Each Party shall not, and shall ensure that its Affiliates andsublicensees will not, make any use of the trademarks or house marks of the other Party or its Affiliates or licensees (including theircorporate names) or any trademark confusingly similar thereto.ARTICLE 10CONFIDENTIALITY; PUBLICATION10.1Duty of Confidence. Subject to the other provisions of this Article 10, all Confidential Information of aParty (the “Disclosing Party”) shall be maintained in confidence and otherwise safeguarded by the other Party (the “ReceivingParty”) and its Affiliates, using Diligent Efforts, but in any event no less than in the same manner and the same protections with whichthe Receiving Party maintains its own confidential information.10.2Exceptions. The foregoing obligations as to particular Confidential Information of a Disclosing Partyshall not apply to the extent that the Receiving Party can demonstrate that such Confidential Information:(a)is known by the Receiving Party at the time of its receipt without an obligation ofconfidentiality, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party’s business records;(b)is in the public domain before its receipt from the Disclosing Party, or thereafter entersthe public domain through no fault or omission of the Receiving Party or any of its Affiliates;(c)is subsequently disclosed to the Receiving Party by a Third Party who may lawfully doso and is not under an obligation of confidentiality to the Disclosing Party; or(d)is developed by the Receiving Party independently and without the aid, application oruse of or reference to any Confidential Information received from the Disclosing Party, as documented by the Receiving Party’sbusiness records.Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individualfeatures are published or available to the general public or in the rightful possession of the Receiving Party unless the combination itselfand principle49 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy of operation are published or available to the general public or in the rightful possession of the Receiving Party.10.3Authorized Disclosures. The Receiving Party may only use any such Confidential Information for thepurposes of performing its obligations or exercising its rights under this Agreement. Notwithstanding the obligations set forth inSections 10.1 and 10.5, a Party may disclose the other Party’s Confidential Information (including this Agreement and the termsherein)(a)if and to the extent such disclosure is reasonably necessary (i) for the filing orprosecuting Patent Rights as contemplated by this Agreement; (ii) in connection with regulatory filings for the Products; (iii) for theprosecuting or defending litigation as contemplated by this Agreement; (iv) in connection with the exercise of its rights or theperformance of its obligations hereunder, including in relation to Joint Know-How the Development and Commercialization inaccordance with this Agreement, provided that the recipient is bound by confidentiality obligations corresponding to the obligationsunder this Agreement; (v) to obtain advice in relation to this Agreement and the activities hereunder; (vi) for the purpose of evaluatingor carrying out an actual or potential investment, acquisition or collaboration to such Party’s attorneys, independent accountants orfinancial advisors, actual or potential investors and lenders, acquirers, licensees, assignees and other financial or commercial partners(“Recipients”), provided that in each such case such Recipients are bound by confidentiality and non-use obligations substantiallyconsistent with those contained in this Agreement; or(b)if and to the extent such disclosure is required by judicial or administrative process,provided that in such event such Party shall promptly inform the other Party of such required disclosure and provide the other Party anopportunity to challenge or limit the disclosure obligations. Confidential Information that is disclosed by judicial or administrativeprocess shall remain otherwise subject to the confidentiality and non-use provisions of this Article 10, and the Party disclosingConfidential Information pursuant to law or court order shall take all steps reasonably necessary, including seeking confidentialtreatment or a protective order to ensure the continued confidential treatment of such Confidential Information. 10.4Publications. The JSC (itself or through a subcommittee) shall establish a publication strategy and planfor the Products. Such strategy as it pertains to any particular clinical trial will be established prior to the Initiation of such trial, andupdated from time to time as the publication subcommittee may agree. Such publication subcommittee shall have the right to reviewand approve any publication relating to the Products, including scientific, health economic or pharmacoeconomic publications,considering CureVac’s and Arcturus’s interest in publishing the results of the Development work in order to obtain recognition withinthe scientific or other applicable community and to advance the state of knowledge in the field, the need to protect ConfidentialInformation and the Parties’ mutual interest in obtaining valid patent protection, and protecting reasonable business interests and tradesecret information. Consequently, except for disclosures permitted pursuant to Sections 10.2 and 10.3, each Party and its respectiveAffiliates, employee(s) and consultant(s) shall deliver to such publication subcommittee for review and comment a copy of anyproposed publication or presentation that pertains to any Product, pursuant to a procedure to be established by such publicationsubcommittee (but excluding general corporate publications and presentations). Such publication subcommittee shall have the right torequire modifications of the 50 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy publication or presentation: (a) to protect each Parties’ respective Confidential Information; (b) for trade secret reasons or businessreasons; and/or (c) to delay such submission for an additional [*…***…] days as may be reasonably necessary to seek patentprotection for the information disclosed in such proposed submission. 10.5Publicity; Use of Names. (a)The Parties intend to issue a mutually agreed joint press release announcing thisAgreement promptly after the mutual execution of the Agreement. Subject to Section 10.3 above, no other disclosure of the existenceor the terms of this Agreement may be made by either Party or its Affiliates except as provided in this Section 10.5, and no Party shalluse the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employees in any publicity, promotion,news release or disclosure relating to this Agreement or its subject matter, except as provided in this Section 10.5 or with the priorexpress written permission of the other Party, except as may be required by applicable Law. (b)A Party may disclose this Agreement in securities filings with the U.S. Securities andExchange Commission (the “SEC”) or equivalent foreign agency to the extent required by applicable Law. In such event, the Partyseeking such disclosure shall prepare a proposed redacted version of this Agreement to request confidential treatment for thisAgreement, and the other Party agrees to promptly (and in any event, no less than […***…] days after receipt of such proposedredactions) give its input in a reasonable manner in order to allow the Party seeking disclosure to file its request within the time linesproscribed by applicable Law. The Party seeking such disclosure shall reasonably consider any comments thereto provided by theother Party within such […***…] day period.(c)Each Party acknowledges that the other Party may be legally required to make publicdisclosures (including in filings with the Governmental Authorities) of certain terms of or material developments or materialinformation generated under this Agreement and agrees that each Party may make such disclosures as required by law, provided thatthe Party seeking such disclosure first provides the other Party a copy of the proposed disclosure, and shall reasonably consider anycomments thereto provided by the other Party within […***…] days after the receipt of such proposed disclosure, to the extentpracticable. (d)Other than the press release set forth in Exhibit 10.5, the Parties agree that the portionsof any other news release or other public announcement relating to this Agreement or the performance hereunder that would discloseinformation other than that already in the public domain, shall first be reviewed and approved by both Parties (with such approval notto be unreasonably withheld, conditioned or delayed). For each such disclosure, a Party shall provide the other Party with a draft ofsuch disclosure at least […***…] Business Days prior to its intended release for review and comment, and shall consider such otherParty’s comments in good faith. If a Party does not receive comments from the other Party within […***…] Business Days, suchParty shall have the right to make such disclosure without further delay. (e)The Parties agree that after a disclosure pursuant to Section 10.5(c), or after a pressrelease (including the initial press release) or other public announcement pursuant to Section 10.5(d) has been reviewed and approvedby the other Party, the disclosing Party may make subsequent public disclosures reiterating such information without having to obtainthe other Party’s prior consent and approval.***Confidential Treatment Requested 51 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (f)Each Party agrees that the other Party shall have the right to use such first Party’s nameand logo in presentations, the company’s website, collateral materials and corporate overviews to describe the collaborationrelationship, as well as in taglines of press releases issued pursuant to this Section 10.5.ARTICLE 11TERM AND TERMINATION11.1Term. The term of this Agreement shall commence upon the Effective Date and, unless earlierterminated pursuant to this Article 11, shall continue in full force and effect, on a country-by-country and Product-by-Product basis,until such time when the applicable Party (including its Affiliates and sublicensees) (i.e., CureVac with respect to Co-DevelopedCureVac Products and Arcturus with respect to OTC Products and Co-Developed CureVac Products) has permanently stopped sellingsuch Product in such country, or with respect to Opt-Out Products, the expiration of the Royalty Term for such Product and country(the “Term”). 11.2Termination.(a)Termination by a Party for Convenience. CureVac may terminate this Agreementwith respect to all OTC Products and/or all Co-Developed Arcturus Products, on one hundred eighty (180) days written notice toArcturus. Arcturus may terminate this Agreement with respect to all Co-Developed CureVac Products from one or both CureVacPrograms, on one hundred eighty (180) days written notice to CureVac.(b)Termination for Material Breach. (i)If either Party believes that the other is in breach of its materialobligations hereunder, then the non-breaching Party may deliver notice of such breach to the other Party. For all breaches other than afailure to make a payment as set forth in this Agreement, the allegedly breaching Party shall have [*…***…] from such notice todispute or cure such breach; provided that if such breach is not reasonably capable of cure within such time period, the breaching Partymay submit a cure plan reasonably acceptable to the non-breaching Party prior to the end of such time period, in which case the cureperiod shall be extended for up to an additional […***…], so long as the breaching Party is using Diligent Efforts to implement suchcure plan during such cure period. For any breach arising from a failure to make a payment set forth in this Agreement, the allegedlybreaching Party shall have […***…] from the receipt of the notice to dispute or cure such breach. If the Party receiving notice ofbreach fails to cure, or fails to dispute, that breach within the applicable period set forth above, then the Party originally delivering thenotice of breach may terminate this Agreement effective on written notice of termination to the other Party. (ii)If the allegedly breaching Party in good faith disputes such materialbreach or disputes the failure to cure or remedy such material breach and provides written notice of that dispute to the other Partywithin the applicable period set forth above, the matter shall be addressed under the dispute resolution provisions in Section 14.7, andthe notifying Party may not terminate this Agreement until it has been determined under Section 14.7 that the allegedly breaching Partyis in material breach of this Agreement, and: (i) the***Confidential Treatment Requested***Confidential Treatment Requested52 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy breach cannot be cured; or (ii) if the breach can be cured, such breaching Party further fails to cure such breach within [*…***…] afterthe conclusion of that dispute resolution procedure, and in each case such termination shall then be effective upon written notificationfrom the notifying Party to the breaching Party. (iii)Notwithstanding the foregoing, if the breach relates only to one ormore, but not all types of Product (i.e., OTC Products, Co-Developed Arcturus Products or Co-Developed CureVac Products fromeach CureVac Program), then the non-breaching Party’s termination right will be with respect to the affected Products only, and notthis Agreement in its entirety.(c)Termination for Patent Challenge. Arcturus may terminate, at its discretion, thisAgreement in its entirety or in relation to the affected Products, if CureVac or its Affiliates or sublicensees, individually or inassociation with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any ArcturusPatents. CureVac may terminate, at its discretion, this Agreement in its entirety or in relation to the affected Products, if Arcturus or itsAffiliates or sublicensees, individually or in association with any other person or entity, commences a legal action challenging thevalidity, enforceability or scope of any CureVac Patents.11.3Effects of Termination. Upon the termination (but not expiration) of this Agreement for any reason,the following provisions shall apply, provided that, if the Agreement is terminated with respect to particular Products only, thefollowing provisions shall only apply to such Products and the mRNA Constructs therein (collectively, “Terminated Products”): (a)Termination by a Party for Convenience. If this Agreement is terminated by eitherParty under Section 11.2(a) (the “Terminating Party”), then the following will apply:(i)All licenses and other rights granted to the Terminating Party forTerminated Products will terminate.(ii)All licenses and other rights granted to the other Party (the “Non-Terminating Party”) with respect to the Terminated Products shall survive and become fully paid and royalty free. In addition, ifCureVac is the Terminating Party, CureVac hereby grants Arcturus an exclusive, sublicensable, irrevocable, perpetual, fully paid up,royalty free license under the CureVac Technology to develop and commercialize Terminated Products in the Field in the Territory,and if Arcturus is the Terminating Party, Arcturus hereby grants CureVac an exclusive, sublicensable, irrevocable, perpetual, fully paidup, royalty free license under the Arcturus Technology to develop and commercialize Terminated Products in the Field in the Territory.(iii)The Terminating Party shall promptly return to the Non-TerminatingParty all Confidential Information of the Non-Terminating Party. (iv)With respect to mRNA Constructs or Products being Manufacturedby the Terminating Party or its Affiliate, such Party shall, at the Non-Terminating Party's discretion:***Confidential Treatment Requested53 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (1)continue to Manufacture and supply such mRNAConstructs or Products for a period of the earlier of (x) such time as technology transfer and qualification of a CMO designated by theNon-Terminating Party and reasonably acceptable to the Terminating Party is completed and (y) [*…***…] years after suchtermination, provided, however, that in such case the Terminating Party may charge a markup of […***…] percent on theManufacturing Costs in relation to mRNA Constructs or Products which are not included in the binding forecasts (as defined in therespective supply agreement) on the date the termination notice is received by the Non-Terminating Party;(2)assign or transfer to the Non-Terminating Partyany Manufacturing agreement between the Terminating Party and a CMO with respect to such mRNA Construct or Product; and/or(3)transfer to the Non-Terminating Party (or itsdesignee) all Know-How and materials to enable it to assume the Manufacture and supply of such mRNA Construct or Product for.The Terminating Party will make its personnel available during normal working hours without charge for a total of […***…] hoursfor such transfer, and for additional hours in excess of […***…] up to a total of […***…] hours to be invoiced monthly at the thencurrent FTE Cost. Such designee(s) may be an Affiliate, sublicensee or Third Party manufacturers selected by the Non-TerminatingParty and reasonably acceptable to the Terminating Party, and which Third Party manufacturers may, in case of commercial supply,also be a backup manufacturer or a second source manufacturer of mRNA Constructs or Products as required for the applicabletransferee of the then-current process. For clarity, the Non-Terminating Party shall retain the right of reference to any drug master file or other corresponding regulatory filinguntil such time as the transfer of Manufacture is completed hereunder.(v)In addition to the foregoing, the Terminating Party shall usereasonable efforts with respect to those activities for which it is responsible to ensure orderly transition and uninterrupted Development,Manufacturing and Commercialization of Terminated Products by the Non-Terminating Party.(b)Termination by a Party for Material Breach or Patent Challenge. If thisAgreement is terminated by either Party (the “Non-Breaching Party”) under Section 11.2(b) or 11.2(c), then Section 11.3(a) willapply, provided, however, that(i)the breaching or challenging Party will be deemed the TerminatingParty and the non-breaching or non-challenging Party will be deemed the Non-Terminating Party,(ii)the non-breaching or non-challenging Party shall not be required touse Diligent Efforts regarding the Development and Commercialization and shall no longer be bound by the Development Plan orCommercialization Plan, if any, and(iii)the non-breaching or non-challenging Party shall have the right, atits discretion, to select between the options (1)-(3) specified in Section 11.3(a)(iv).(iv)For clarity, if this Agreement is terminated in its entirety, then theconsequences set forth above will apply to each Terminated Product as provided above.***Confidential Treatment Requested54 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (c)Termination Press Releases. In the event of termination of this Agreement for anyreason and subject to the provisions of Section 10.5, the Parties shall cooperate in good faith to coordinate public disclosure of suchtermination and the reasons therefor, and shall not, except to the extent required by applicable Law, disclose such information withoutthe prior approval of the other Party. The principles to be observed in such disclosures shall be accuracy, compliance with applicableLaw and regulatory guidance documents, and reasonable sensitivity to potential negative reactions to such news.11.4Survival. Expiration or termination of this Agreement shall not relieve the Parties of any obligationaccruing prior to such expiration or termination. Without limiting the foregoing, the provisions of the following Articles and Sectionsshall survive the expiration or termination of this Agreement: 1 (to the extent applicable), 4.9 (if applicable), 5.5, 6 (in case of ongoingManufacture and supply obligations), 6.5, 8.1, 8.2(b), 8.4 (for these to the extent required to finally reconcile the equalization of costsor profit share), 8.5 – 8.9 (if applicable), 9.1, 9.3, 9.4(c), 10, 11.3-11.5, 13 and 14.11.5Termination Not Sole Remedy. Termination is not the sole remedy under this Agreement and,whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remediesshall remain available except as agreed to otherwise herein.ARTICLE 12REPRESENTATIONS AND WARRANTIES12.1Representations and Warranties of Each Party. Each Party represents and warrants to the other Partyas of the Effective Date that:(a)it has the full right, power and authority to enter into this Agreement, to perform itsobligations hereunder; and(b)this Agreement has been duly executed by it and is legally binding upon it, enforceablein accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is aparty or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative orother agency having jurisdiction over it.12.2Representations and Warranties by Arcturus. Arcturus represents and warrants to CureVac as ofthe Effective Date that:(a)it has not previously assigned, transferred, conveyed or otherwise encumbered its right,title and interest in Arcturus Technology in a manner that is inconsistent with the license granted to CureVac under Section 3.1;(b)to Arcturus’s knowledge, all Arcturus Patents existing as of the Effective Date are listedin Exhibit 1.5;(c)it has the right to grant the license and rights herein to CureVac and it has not grantedany license, right or interest in, to or under the Arcturus Technology to any Third Party that is inconsistent with the license granted toCureVac under Section 3.1; 55 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (d)it has not received any written notice from any Third Party asserting or alleging that thedevelopment of Arcturus Technology prior to the Effective Date infringed or misappropriated the intellectual property rights of suchThird Party;(e)to Arcturus’s knowledge, the development of Arcturus Technology prior to theEffective Date did not infringe any valid intellectual property rights owned or possessed by any Third Party and did not breach anyobligation of confidentiality or non-use owed by Arcturus to a Third Party; and(f)there are no judgments or settlements against or owed by Arcturus, and to Arcturus’sknowledge, there are no pending or threatened claims or litigation, in each case relating to Arcturus Technology.12.3Representations and Warranties by CureVac. CureVac represents and warrants to Arcturus as ofthe Effective Date, subject to the disclosures in Exhibit 12.3, that:(a)it has not previously assigned, transferred, conveyed or otherwise encumbered its right,title and interest in CureVac Technology in a manner that is inconsistent with the license granted to Arcturus under Section 3.2;(b)to CureVac’s knowledge, all CureVac Patents existing as of the Effective Date arelisted in Exhibit 1.32;(c)it has the right to grant the license and rights herein to Arcturus and it has not grantedany license, right or interest in, to or under the CureVac Technology to any Third Party that is inconsistent with the license granted toCureVac under Section 3.2;(d)it has not received any written notice from any Third Party asserting or alleging that thedevelopment of CureVac Technology prior to the Effective Date infringed or misappropriated the intellectual property rights of suchThird Party;(e)to CureVac’s knowledge, the development of CureVac Technology prior to theEffective Date did not infringe any valid intellectual property rights owned or possessed by any Third Party and did not breach anyobligation of confidentiality or non-use owed by CureVac to a Third Party; and(f)there are no judgments or settlements against or owed by CureVac, and to CureVac’sknowledge, there are no pending or threatened claims or litigation, in each case relating to CureVac Technology. 12.4Mutual Covenants.(a)No Debarment. In the course of the Development, Manufacture andCommercialization of the Products, neither Party nor its Affiliates shall use any employee or consultant who has been debarred by anyRegulatory Authority or, to such Party’s or its Affiliates’ knowledge, is the subject of debarment proceedings by a RegulatoryAuthority. Each Party shall notify the other Party promptly upon becoming aware that any of its or its Affiliates’ employees orconsultants has been debarred or is the subject of debarment proceedings by any Regulatory Authority. 56 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (b)Compliance. Each Party and its Affiliates shall comply in all material respects with allapplicable Laws (including all anti-bribery laws) in the Development, Manufacture and Commercialization of the Products andperformance of its obligations under this Agreement.12.5No Other Warranties. Except as expressly stated in this Article 12, (a) no representation, condition orwarranty whatsoever is made or given by or on behalf of Arcturus or CureVac; and (b) all other conditions and warranties whetherarising by operation of law or otherwise are hereby expressly excluded, including any conditions and warranties of merchantability,fitness for a particular purpose or non-infringement.ARTICLE 13INDEMNIFICATION; INSURANCE13.1Indemnification by Arcturus. Arcturus shall indemnify, defend and hold CureVac, its Affiliates andtheir respective officers, directors, agents, employees, licensees, sublicensees or contractors (“CureVac Indemnitees”) harmless fromand against any Claims arising under or related to this Agreement against them to the extent arising or resulting from: (a) the grossnegligence, recklessness or willful misconduct of any of the Arcturus Indemnitees; (b) the breach of any of the warranties orrepresentations made by Arcturus to CureVac under this Agreement; (c) the Development, Manufacture or Commercialization of Opt-Out Products that are OTC Products or Co-Developed Arcturus Products by or on behalf of Arcturus or any of its Affiliates, licensees,sublicensees or contractors;except, in each case (a)-(c), to the extent such Claims result from the breach by CureVac of any covenant, representation, warranty orother agreement made by CureVac in this Agreement or the gross negligence, recklessness or willful misconduct of any CureVacIndemnitee.13.2Indemnification by CureVac. CureVac shall indemnify, defend and hold Arcturus, its Affiliates, andtheir respective officers, directors, agents, employees, licensees, sublicensees or contractors (“Arcturus Indemnitees”) harmless fromand against any Claims arising under or related to this Agreement against them to the extent arising or resulting from (a) the, grossnegligence, recklessness or willful misconduct of any of the CureVac Indemnitees; (b) the breach of any of the warranties orrepresentations made by CureVac to Arcturus under this Agreement; (c) the Development, Manufacture or Commercialization of Opt-Out Products that are Co-Developed CureVac Products by or on behalf of CureVac or any of its Affiliates, licensees, sublicensees orcontractors;except, in each case (a)-(c), to the extent such Claims result from the breach by Arcturus of any covenant, representation, warranty orother agreement made by Arcturus in this Agreement or the gross negligence, recklessness or willful misconduct of any ArcturusIndemnitee.13.3Indemnification Procedure. If either Party is seeking indemnification under Sections 13.1 or 13.2 (the“Indemnified Party”), it shall inform the other Party (the “Indemnifying Party”) of the Claim giving rise to the obligation toindemnify pursuant to such Section as soon as reasonably practicable after receiving notice of the Claim. The Indemnifying Party shallhave the right to assume the defense of any such Claim for which it 57 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy is obligated to indemnify the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party and theIndemnifying Party’s insurer as the Indemnifying Party may reasonably request, and at the Indemnifying Party’s cost andexpense. The Indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense ofany Claim that has been assumed by the Indemnifying Party. Neither Party shall have the obligation to indemnify the other Party inconnection with any settlement made without the Indemnifying Party’s written consent, which consent shall not be unreasonablywithheld, conditioned or delayed. If the Parties cannot agree as to the application of Section 13.1 or 13.2 as to any Claim, pendingresolution of the dispute pursuant to Section 14.7, the Parties may conduct separate defenses of such Claims, with each Party retainingthe right to claim indemnification from the other Party in accordance with Section 13.1 or 13.2 upon resolution of the underlyingClaim. 13.4Third Party Claims Related To Products. Subject to Sections 5.5, 13.1 or 13.2, damages or otheramounts payable to a Third Party claimant, as well as any reasonable attorneys’ fees and costs of litigation incurred by either Party(collectively, “Damages”) from Third Party claims relating to the Development, Manufacture or Commercialization of any Productthat is not an Opt-Out Product, including Damages from claims of infringement of Third Party patent rights and product liability claimsof death or personal injury, shall be included within Clinical Development Costs or Joint Commercialization Costs (as the case may be)incurred by the affected Party and shared by the Parties accordingly. 13.5Mitigation of Loss. Each Indemnified Party shall take and shall procure that its Affiliates take all suchreasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate anyClaims (or potential losses or damages) under this Article 13. Nothing in this Agreement shall or shall be deemed to relieve any Partyof any common law or other duty to mitigate any losses incurred by it.13.6Limitation of Liability. Neither Party shall be liable to the other for any special, consequential,incidental, punitive or indirect damages arising from or relating to any breach of this Agreement, regardless of any notice of thepossibility of such damages. Notwithstanding the foregoing, nothing in this Section 13.6 is intended to or shall limit or restrict theindemnification rights or obligations of any Party under Sections 13.1 or 13.2, or damages available for a Party's breach of itsobligations relating to Confidentiality or intellectual property hereunder.13.7Insurance. Each Party shall procure and maintain insurance, including product liability insurance, withrespect to its activities hereunder and which is consistent with normal business practices of prudent companies similarly situated at alltimes during which any Product is being clinically tested in human subjects or commercially distributed or sold. Each Party shallprovide the other Party with evidence of such insurance upon request and shall provide the other Party with written notice at least [*…***…] days prior to the cancellation, non-renewal or material changes in such insurance. It is understood that such insurance shall notbe construed to create a limit of either Party’s liability with respect to its indemnification obligations under this Article 13. ***Confidential Treatment Requested58 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy ARTICLE 14GENERAL PROVISIONS14.1Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaultedunder or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure ordelay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including embargoes, war,acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labordisturbances, fire, floods, earthquakes or other acts of God, or acts, generally applicable action or inaction by any governmentalauthority (but excluding any government action or inaction that is specific to such Party, its Affiliates or sublicensees, such asrevocation or non-renewal of such Party’s license to conduct business), or omissions or delays in acting by the other Party, orunavailability of materials related to the Manufacture of the Products. The affected Party shall notify the other Party in writing of suchforce majeure circumstances as soon as reasonably practical, and shall promptly undertake and continue diligently all reasonable effortsnecessary to cure such force majeure circumstances or to perform its obligations in spite of the ongoing circumstances.14.2Assignment. This Agreement may not be assigned or otherwise transferred, nor may any right orobligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party. Notwithstandingthe foregoing, either Party may, without consent of the other Party, assign this Agreement and its rights and obligations hereunder inwhole or in part to an Affiliate of such Party, or in whole to its successor in interest in connection with the sale of all or substantially allof its stock or its assets to which this Agreement relates, or in connection with a merger, acquisition or similar transaction. Theintellectual property of any such successor in interest (an “Acquiror”) held or developed by such Acquiror (whether prior to or aftersuch acquisition) shall be excluded from the Arcturus Technology and the CureVac Technology, and such Acquiror (and Affiliates ofsuch Acquiror that are not controlled by (as defined in the definition of Affiliate) the acquired Party itself) shall be excluded from“Affiliate” solely for purposes of the applicable components of the foregoing intellectual property definitions, in all such cases if andonly if: (a) the acquired Party remains a wholly-owned subsidiary of the Acquiror; (b) all intellectual property of the acquired Party andall research and development assets and operations of the acquired Party, in each case relating to mRNA Constructs and Products,remain with the acquired Party and are not transferred to the Acquiror or another Affiliate of the Acquiror; (c) the scientific andDevelopment activities of the acquired Party and the Acquiror (if any) are maintained separate and distinct, and (d) there is noexchange of Know-How relating to mRNA Constructs or Products between the acquired Party and the Acquiror. Any attemptedassignment not in accordance with this Section 14.2 shall be null and void and of no legal effect. Any permitted assignee shall assumeall assigned obligations of its assignor under this Agreement. The terms and conditions of this Agreement shall be binding upon, andshall inure to the benefit of, the Parties and their respective successors and permitted assigns. 14.3Change of Control 59 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy (a)In case of a Change of Control of a Party, within [*…***…] days after the other Partyhas been informed about such Change of Control in writing, the other Party shall have the right to require the Party to opt out of futuresharing of Clinical Development Costs with respect to any or all of such other Party’s Products (i.e., Co-Developed CureVac Productsif the Change of Control Party is Arcturus, and OTC Products and Co-Developed Arcturus Product if the Change of Control party isCureVac) (a “Forced Opt-Out”).(b)In case of a Forced Opt-Out, the effects of the Opt-Out for the Party that Opts-Outspecified in Section 4.9(b) shall apply accordingly to the Party required to Opt-Out under this Section 14.3.14.4Severability. If any one or more of the provisions contained in this Agreement is held invalid, illegal orunenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any waybe affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of theParties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) withvalid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.14.5Notices. All notices which are required or permitted hereunder shall be in writing and sufficient ifdelivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier),sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested,addressed as follows:If to Arcturus:Arcturus Therapeutics, Inc.10628 Science Center DriveSuite 200San Diego, California 92121USAAttn:CEOFax:(858) 300-5028 with a copy to (which copy shall not constitute notice): Cooley LLP3175 Hanover St.Palo Alto, CA 94303Attn: Glen Y. SatoFax: (650) 849-7400 ***Confidential Treatment Requested60 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy If to CureVac:CureVac AGPaul-Ehrlich-Str. 1572076 TübingenGermanyAttention: CEO and General CounselFax:+49 7071 9883 - 1101 or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing inaccordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent byfacsimile on a Business Day (or if delivered or sent on a non-Business Day, then on the next Business Days); (b) on the Business Dayafter dispatch if sent by internationally-recognized overnight courier; or (c) on the [*…***…] Business Day following the date ofmailing, if sent by mail.14.6Governing Law. This Agreement shall be governed by and construed and any dispute under thisAgreement shall be resolved in accordance with the laws of the State of New York, USA, without reference to any rules of conflict oflaws.14.7Dispute Resolution. (a)Dispute Escalation. In the event of a dispute between the Parties, the Parties will firstattempt in good faith to resolve such dispute by negotiation and consultation between themselves or the co-chairpersons of the JSC. Inthe event that such dispute is not resolved on an informal basis within […***…] days, any Party may, by written notice to the other,have such dispute referred to each Party’s Chief Executive Officer or his or her designee (who will be a senior executive with theappropriate authority to determine the mater for such Party), who will attempt in good faith to resolve such dispute by negotiation andconsultation for a […***…] day period following receipt of such written notice.(b)Dispute Resolution. (i)In the event the Chief Executive Officers of the Parties are not able toresolve such dispute as set forth above, the Parties agree to try to solve such dispute amicably by mediation. The Parties shall conduct amediation procedure according to the Mediation Rules of the World Intellectual Property Organization (WIPO) in effect on the date ofthe commencement of the mediation proceedings. The location of the mediation proceedings will be New York City, New York,USA. The number of mediators will be one (1). The language of the mediation proceedings will be English.(ii)If the dispute has not been settled pursuant to the said rules within[…***…] days following the filing of a request for mediation or within such other period as the Parties may agree in writing, eitherParty may submit the dispute to final and binding arbitration. Any dispute relating to the validity performance, construction orinterpretation of this Agreement, which cannot be resolved amicably between the Parties after following the procedure set forth in thisSection 14.7, shall be submitted to arbitration in accordance with the Arbitration Rules of WIPO in effect on the date of thecommencement of the arbitration proceedings. The location of the arbitration proceedings will be New York***Confidential Treatment Requested61 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy City, New York, USA. The number of arbitrators will be [*…***…]. The language of the arbitration proceeding will be English. Thedecision of the arbitrators shall be final and binding upon the Parties (absent manifest error on the part of the arbitrator(s)) andenforceable in any court of competent jurisdiction.14.8Foreign Corrupt Practices Act Compliance.(a)Compliance with FCPA. The U.S. government imposes and enforces prohibitions onthe payment or transfer of anything of value to governments, government officials, political parties, political party officials (or relativesor associates of such officials), whether directly or indirectly, to obtain or retain business. This U.S. law is referred to as the ForeignCorrupt Practices Act (“FCPA”), and it can have application to conduct of a U.S. corporation’s foreign subsidiaries, employees,agents and distributors. A summary of the law and related information can be found at http://www.justice.gov/criminal/fraud/fcpa. Bysigning this Agreement, each Party warrants that:(i)It is familiar with the provisions and restrictions contained in theOECD Anti-Bribery Convention and FCPA and it has adopted and maintained an FCPA policy.(ii)It shall comply with the FCPA in marketing, selling and/or servicingthe Products under this Agreement. (iii)It shall not, in the course of its duties under the Agreement, offer,promise, give, demand, seek or accept, directly or indirectly, any gift or payment, consideration or benefit in kind that would or couldbe construed as an illegal or corrupt practice.(iv)It is not a government official (as the term is defined in the FCPA) oraffiliated with any government official.(v)It shall immediately notify the other Party of any attempt by agovernment official to directly or indirectly solicit, ask for, or attempt to extort anything of value from such Party, and shall refuse anysuch solicitation, request or extortionate demand.(b)No Action. In no event shall a Party be obligated under the Agreement to take anyaction or omit to take any action that such Party believes, in good faith, would cause it to be in violation of any applicable laws andregulations, including the anti-bribery laws referenced in this Section 14.8. (c)Due Diligence. Each Party shall have the right to visit the offices of the other Partyfrom time to time during the term of the Agreement on an “as needed” basis and conduct due diligence in relation to such other Party’sbusiness related to performance of its obligations under this Section 14.8 and may do so in the way it deems necessary, appropriate ordesirable so as to ensure that such other Party complies with this Section 14.8 and any other applicable laws and regulations in itsbusiness operations. Each Party shall make every effort to cooperate fully with the other Party in any such due diligence. (d)Audit. In the event that a Party has reason to believe that a breach of any obligation ofthe other Party under this Section 14.8 has occurred or may occur, such Party shall have the right to select an independent Third Partyto conduct an audit of the other***Confidential Treatment Requested62 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy Party and review relevant books and records of the other Party, to satisfy itself that no breach has occurred. Unless otherwise requiredunder applicable laws and regulations or by order of a competent court or regulatory authority, the auditing Party shall ensure that theselected independent Third Party will keep confidential all audited matters and the results of the audit. Each Party does reserve theright to disclose to the U.S. or foreign government, its agencies and/or any other government or non-government party, informationrelating to a possible violation by the other Party of any applicable law, including a violation of the FCPA or any other applicable anti-bribery law.(e)Material Breach. Each Party acknowledges that any material violation of this Section14.8 by such Party or any of its Affiliates, sublicensees or subcontractors shall be deemed a material breach of this Agreement by suchParty and shall give rise to the right for the other Party to terminate this Agreement immediately by written notice to such Party.14.9Entire Agreement; Amendments. This Agreement, together with the Exhibits hereto and theConfidentiality Agreement, contains the entire understanding of the Parties with respect to the collaboration and the licenses grantedhereunder. In case of conflict between this Agreement and the Confidentiality Agreement, this Agreement shall prevail. Any otherexpress or implied agreements and understandings, negotiations, writings and commitments, either oral or written, in respect to thecollaboration and the licenses granted hereunder are superseded by the terms of this Agreement. The Exhibits to this Agreement areincorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereofmodified, only by a written instrument duly executed by authorized representatives of both Parties hereto.14.10Headings. The captions to the several Articles, Sections and subsections hereof are not a part of thisAgreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.14.11Rights in Bankruptcy. All rights and licenses granted under or pursuant to this Agreement byCureVac and Arcturus are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, United States Code, asamended (the “U.S. Bankruptcy Code”), licenses of rights to “intellectual property” as defined under Section 101 of the U.S.Bankruptcy Code. The Parties agree that each Party, as licensee of certain rights under this Agreement, shall retain and may fullyexercise all of its rights and elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of thecommencement of a bankruptcy proceeding by or against a Party (such Party, the “Bankrupt Party”) under the U.S. BankruptcyCode or analogous provisions of applicable Law outside the U.S., (a) the other Party shall be entitled to a complete duplicate of (orcomplete access to, as appropriate) any intellectual property licensed to such other Party and all embodiments of such intellectualproperty, which, if not already in such other Party’s possession, shall be promptly delivered to it (x) upon any such commencement ofa bankruptcy proceeding upon such other Party’s written request therefor, unless the Bankrupt Party elects to continue to perform all ofits obligations under this Agreement or (y) if not delivered under clause (x), following the rejection of this Agreement by the BankruptParty upon written request therefor by the other Party and (b) the Bankrupt Party shall not interfere with the other Party’s rights tointellectual property and all embodiments of intellectual property, and shall assist and not interfere with the other Party in obtainingintellectual property and all embodiments of intellectual property from another entity. The “embodiments” of intellectual property 63 CO-DEVELOPMENT AND CO-COMMERCIALIZATION AGREEMENTbetween CUREVAC and ARCTURUSConfidential Execution Copy includes all tangible, intangible, electronic or other embodiments of rights and licenses hereunder, including all products embodyingintellectual property, mRNA Constructs, Products, filings with Regulatory Authorities and related rights and CureVac Know-How inthe case that CureVac is the Bankrupt Party and Arcturus Know-How in the case that Arcturus is the Bankrupt Party. 14.12Independent Contractors. It is expressly agreed that Arcturus and CureVac shall be independentcontractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. NeitherArcturus nor CureVac shall have the authority to make any statements, representations or commitments of any kind, or to take anyaction, which shall be binding on the other Party, without the prior written consent of the other Party.14.13Waiver. The waiver by either Party hereto of any right hereunder, or of any failure of the other Partyto perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by orfailure of such other Party whether of a similar nature or otherwise.14.14Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but eachshall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.14.15Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel inconnection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity inthis Agreement shall be construed against the drafting Party shall not apply.14.16Business Day Requirements. In the event that any notice or other action or omission is required to betaken by a Party under this Agreement on a day that is not a Business Day then such notice or other action or omission shall be deemedto be required to be taken on the next occurring Business Day.14.17Translations. This Agreement is in the English language only, which language shall be controlling inall respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon theParties. All communications and notices to be made or given pursuant to this Agreement, and any dispute proceeding related to orarising hereunder, shall be in the English language. If there is a discrepancy between any translation of this Agreement and thisAgreement, this Agreement shall prevail.14.18Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments,and to do all such other acts, as necessary or appropriate in order to carry out the purposes and intent of this Agreement.14.19Counterparts. This Agreement may be executed in two or more counterparts by original signature,facsimile or PDF files, each of which shall be deemed an original, but all of which together shall constitute one and the sameinstrument.
Continue reading text version or see original annual report in PDF format above