RESEARCh, DEVELOPMENT, COLLABORATIOn AND LICENSE AGREEMENT

THIS RESEARCH, DEVELOPMENT, COLLABORATION AND LICENSE AGREEMENT (the “ Agreement ”) is entered into as of January 6, 2017 (the “ Execution Date ”).

PARTIES:

In this Agreement, Allergan and Assembly are collectively referred to as the “ Parties ” and each individually a “ Party ”.

BACKGROUND:

NOW, THEREFORE , in consideration of the respective covenants set forth herein, the Parties agree as follows:

ARTICLE 1
DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set forth below:

1.1.      “ 201 Compound Candidate ” shall mean a composition that [* * *] pursuant to the R&D Plan under this Agreement.

1.2.      “ 301 Compound Candidate ” shall mean a composition that [* * *] pursuant to the R&D Plan under this Agreement.

1.3.      “ [* * *] IND ” shall mean any IND for a Product Candidate filed by Assembly pursuant to this Agreement (a) for which within thirty (30) days of such filing, no clinical hold has been placed by a Regulatory Authority and no Regulatory Authority has otherwise prevented initiation of a Clinical Trial for such Product Candidate and (b) [* * *], during the course of at least one (1) Clinical Trial of such Product Candidate.

1.4.      “ Affiliate ” shall mean any individual, corporation, company, partnership, trust, limited liability company, association or other business entity (“ Person ”) that directly or indirectly controls, is controlled by or is under common control with the Party in question at any time for so long as such Party controls, is controlled by or is under common control with such first Person. As used in this definition of “Affiliate,” the term “control” and, with correlative meanings, the terms “controlled by” and “under common control with” shall mean, as to any Person, (a) direct or indirect ownership of at least fifty percent (50%) (or such lesser percentage that is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction, provided , that such Party has the ability, directly or indirectly, to direct or cause the direction of management or policies of such Person) of the voting interests or other ownership interests in the Person in question; (b) direct or indirect ownership of at least fifty percent (50%) of the interest in the income of the Person in question; or (c) possession, directly or indirectly, of the power to direct or cause the direction of management or policies of the Person in question (whether through ownership of securities or other ownership interests, by contract or otherwise).

1.5.      “ Agreement ” shall have the meaning set forth in the preamble hereto.

1.6.      “ Allergan ” shall have the meaning set forth in the preamble hereto.

1.7.      “ Allergan Collaboration IP ” shall mean all Patents or Know-How that are Controlled by Allergan or its Affiliates during the Term that arise out of Allergan’s activities under the R&D Plan. For clarity, the Allergan Collaboration IP includes Allergan’s interest in the Joint Intellectual Property Rights that are necessary or useful for Assembly to carry out Assembly’s activities under the R&D Plan.

1.8.      “ Allergan Indemnitees ” shall have the meaning set forth in Section 12.1.

1.9.      “ Alliance Manager ” shall have the meaning set forth in Section 3.9.

1.10.     “ Assembly ” shall have the meaning set forth in the preamble hereto.

1.11.     “ Assembly Indemnitees ” shall have the meaning set forth in Section 12.2.

1.12.     “ Assigned Regulatory Documentation ” shall have the meaning set forth in Section 6.2.

1.13.     “ Audited Party ” shall have the meaning set forth in Section 7.10.2.

1.14.     “ Auditing Party ” shall have the meaning set forth in Section 7.10.2.

1.15.     “ Backup Compound ” shall mean (a) any Backup Compound Candidate incorporated in a product administered to subjects in a first-in-human Clinical Trial or any Clinical Trial conducted under the R&D Plan, in each case for a Permitted Indication or (b) any other composition [* * *] (and no [* * *]) as a Backup Compound Candidate described in clause (a) of this Section 1.14 (including, for example, a composition [* * *] (and no [* * *]) as a composition described in (a) but differing [* * *]). A Backup Compound Candidate shall be a “Backup Compound” and no longer a “Backup Compound Candidate” at the time that such Backup Compound Candidate is administered to a subject in a first-in-human Clinical Trial or other Clinical Trial conducted under the R&D Plan. For clarity, [* * *] IND.

1.16.     “ Backup Compound Candidate ” shall mean any composition, other than an Initial Compound Candidate or New Compound Candidate, comprising [* * *] and that is selected for further Development by Allergan pursuant to the procedures set forth in Section 4.5, as [* * *] pursuant to the R&D Plan under this Agreement.

1.17.     “ Bankruptcy Code ” shall have the meaning set forth in Section 10.6.2.

1.18.     “ Biosimilar Application ” shall have the meaning set forth in Section 9.1.9(a).

1.19.     “ Biosimilar Product ” shall mean a biologic product (a) whose Regulatory Approval relies in whole or in part on a prior Regulatory Approval granted to a Licensed Product, (b) whose Regulatory Approval relies in whole or in part on any pivotal safety or efficacy data generated in support of a prior Regulatory Approval granted to a Licensed Product; or (c) otherwise meets the criteria for constituting a “biosimilar” or “interchangeable” product pursuant to Section 351(k) of the Public Health Service Act (42 U.S.C. § 262(k)) or a “similar biological medicinal product” pursuant to the EU Directive 2001/83/EC or any successors thereto or any other equivalent provision that comes into effect during the Term, or is the subject of an analogous determination or has otherwise achieved analogous regulatory approval from another applicable Regulatory Authority.  For clarity, a product may be a Biosimilar Product regardless of whether it is subject to regulation as a biologic or drug product and regardless of the route used to obtain approval (for example, whether by Abbreviated New Drug Application, BLA, or under 42 U.S.C. § 262).

1.20.     “ BLA ” means (a) in the United States, a Biologics License Application, as defined in the United States Public Health Service Act (42 U.S.C. § 262), and applicable regulations promulgated thereunder by the FDA, or any equivalent application that replaces such application, (b) in the EU, a marketing authorization application, as defined in applicable regulations of the EMA, and (c) in any other country, the relevant equivalent to the foregoing.

1.21.     “ Blocking Third Party IP ” shall mean, with respect to any country, any Patent or Know-How in such country controlled by a Third Party that is necessary or useful to Develop, manufacture, Commercialize or otherwise Exploit a Licensed Compound in the Field in or for such country.

1.22.     “ Business Day ” shall mean any Monday, Tuesday, Wednesday, Thursday or Friday that is not a public holiday in New York, New York.

1.23.     “ Calendar Quarter ” shall mean a period of three (3) consecutive months corresponding to the calendar quarters commencing on the first day of January, April, July or October, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date and the last Calendar Quarter shall end on the last day of the Term.

1.24.     “ Calendar Year ” shall mean a period of twelve (12) consecutive months corresponding to the calendar year commencing on the first day of January, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.

1.25.     “ Change of Control ”, with respect to a Party, shall mean (a) the closing of a sale of all or substantially all of the assets of such Party to which this Agreement relates to a Third Party in one transaction or series of transactions, (b) the closing of a merger or other business combination or transaction that results in a Third Party owning, directly or indirectly, of more than 50% of the voting securities of such Party or of its ultimate parent entity, or (c) the closing of a transaction, following which a Third Party acquires direct or indirect ability or power to direct or cause the direction of the management and policies of such Party or of its ultimate parent entity or otherwise direct the affairs of such Party or of its ultimate parent entity, whether through ownership of equity, voting securities, beneficial interest, by contract or otherwise.

1.26.     “ China Co-Promotion Option Right ” shall have the meaning set forth in Section 5.2.1.

1.27.     “ Clinical Quality Agreement ” shall have the meaning set forth in Section 6.4.2.

1.28.     “ Clinical Trial ” shall mean any of a Phase I Clinical Trial, Phase Ib Clinical Trial, Phase IIa Clinical Trial, Phase IIb Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial or a clinical trial conducted after obtaining Regulatory Approval.

1.29.     “ CMO ” shall have the meaning set forth in Section 6.4.1.

1.30.     “ Combination Product ” shall mean a Licensed Product that is comprised of or contains a Licensed Compound as an active ingredient together with one (1) or more other active ingredients and is sold either as a fixed dose/unit or as separate doses/units in a single package.

1.31.     “ Combination Sale ” shall have the meaning set forth in the definition of Net Sales.

1.32.     “ Commercialize ” shall mean any and all activities directed to the promotion, marketing, distribution or sale (and offer for sale or import or export for sale) for a product. “ Commercializing ” and “ Commercialization ” shall have corresponding meanings.

1.33.     “ Commercially Reasonable Efforts ” shall mean efforts that are not less than those discovery, research, development or commercialization efforts a Party makes with respect to other compounds or products in its portfolio at a similar stage of development or in a similar stage of product life, with similar developmental risk profiles and of similar market and commercial potential, based on conditions then-prevailing and taking into account all other relevant factors including issues of safety and efficacy, the nature and extent of market exclusivity (including regulatory exclusivity and the patent and other proprietary position of the product), product labeling or anticipated labeling, performance of other products that are of similar market potential and the likely timing of other product’s entry into the market, costs, timing, and the likelihood of success of technology transfer, process development and manufacturing validation and scale-up, the likelihood and cost of obtaining regulatory approval and of the anticipated or actual approved labeling, financial return, medical and clinical considerations, regulatory environment, the regulatory structure involved, and other relevant scientific, technical and commercial factors.

1.34.     “ Committee Deadlock ” shall have the meaning set forth in Section 3.7.

1.35.     “ Competing Compound ” shall mean any microbiome modulating product that is actually sold for the same Permitted Indication as any Licensed Product.

1.36.     “ Completion ” shall mean, with respect to a POC Trial, that top-line results for such POC Trial that have been generated in accordance with industry standards and provided to Allergan in accordance with the R&D Plan.

1.37.     “ Compound Candidate ” shall mean any Initial Compound Candidate, New Compound Candidate or Backup Compound Candidate.

1.38.     “ Compound R&D Term ” shall have the meaning set forth in Section 4.2.

1.39.     “ Confidential Information ” shall mean all secret, confidential or proprietary information, Know-How or data, whether provided in written, oral, graphic, video, computer or other form, that (a) is provided by one Party (the “ Disclosing Party ”) to the other Party (the “ Receiving Party ”) that is marked or otherwise identified as confidential or that by its nature a reasonable person would understand to be confidential in connection with this Agreement, or (b) constitutes Licensed Compound Know-How, in each case ((a) and (b)), including information, Know-How or data relating to the Disclosing Party’s existing or proposed research, development efforts, Patent applications, business, Licensed Compounds or Licensed Products, other compounds or products and any other materials that have not been made available by the Disclosing Party to Third Parties (other than under an obligation of confidentiality). Notwithstanding the foregoing sentences, Confidential Information shall not include any information or materials that:

(i)       were already known to the Receiving Party (other than under an obligation of confidentiality) at the time of disclosure by the Disclosing Party to the extent such Receiving Party has contemporaneous documentation or other competent evidence to that effect; provided , that the foregoing exception shall not apply with respect to Joint Know-How or Licensed Compound Know-How;

(ii)       were generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(iii)      became generally available to the public or otherwise part of the public domain after its disclosure, other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;

(iv)      were subsequently lawfully disclosed to the Receiving Party by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

(v)     were independently discovered or developed by or on behalf of the Receiving Party without the use of, reliance on or reference to the Confidential Information belonging to the other Party and the Receiving Party has contemporaneous documentation or other competent evidence to that effect; provided , that the foregoing exception shall not apply with respect to Joint Know-How or Licensed Compound Know-How.

Notwithstanding anything contained herein to the contrary, Confidential Information constituting (x) Licensed Compound Know-How that is material to the Exploitation of Licensed Compound or Licensed Product and (y) the terms of this Agreement shall each be deemed to be the Confidential Information of both Parties (and both Parties shall be deemed to be the Receiving Party and the Disclosing Party with respect thereto).

1.40.     “ Control ” and its correlative terms, “ Controlled ” or “ Controls ”, shall mean, with respect to any intellectual property right or other intangible property, that a Party owns or has a license or sublicense to such item or right, and has the ability to assign, grant access, license or sublicense, as applicable, in or to such right without violating the terms of any agreement or other arrangement with any Third Party. For the avoidance of doubt, Third Party intellectual property shall only be considered “Controlled” by a Party, if the Party has the right to disclose, assign, or grant a license, sublicense or other right to the other Party as provided for in this Agreement.

1.41.     “ Controlling Party ” shall have the meaning set forth in Section 9.2.2.

1.42.     “ Co-Promotion Agreement ” shall have the meaning set forth in Section 5.4.1.

1.43.     “ Co-Promotion Option Rights ” shall have the meaning set forth in Section 5.2.1.

1.44.     “ Cover ,” “ Covering ” or “ Covers ” means, as to a compound or product and Patent, that, in the absence of a license granted under, or ownership of, such Patent, the making, using, selling, offering for sale or importation of such compound or product would infringe such Patent or, as to a pending claim included in such Patent, the making, using, selling, offering for sale or importation of such compound or product would infringe such Patent if such pending claim were to issue in an issued patent without modification.

1.45.     “ CPI ” shall mean the Consumer Price Index – Urban Wage Earners and Clerical Workers, U.S. City Average, All Items, published by the US Department of Labor, Bureau of Labor Statistics (or its successor equivalent index) in the US.

1.46.     “ Defending Party ” shall have the meaning set forth in Section 9.3.2.

1.47.     “ Development ” shall mean any and all activities, including research, discovery, compound identification and generation, non-clinical, pre-clinical and clinical trials, post approval studies, supporting manufacturing, production process development and formulation and related regulatory activities directed to obtaining and maintaining Regulatory Approval for a product for an indication. Development shall include, with respect to any Licensed Compound or Licensed Product, the Optimization of a Compound Candidate or Product Candidate with the goal of further Developing such resultant Licensed Compound or Licensed Product. “ Develop ” and “ Developing ” shall have corresponding meanings.

1.48.     “ Development Costs ” shall mean the costs and expenses incurred by or on behalf of a Party or its Affiliates in connection with the Development of Licensed Compounds or Licensed Products in the Field, including without limitation (a) costs of each Party’s or its Affiliates’ employees supporting such efforts (calculated as the FTE Costs), (b) all out-of-pocket costs of procuring services, products or materials used in the Development of Licensed Compounds or Licensed Products in the Field, (c) any amounts paid to clinical research organizations or other Third Parties engaged to conduct Development activities and (d) amounts paid to Third Party contractors to supply Licensed Compounds or Licensed Products for Development. “Development Costs” shall include without limitation all costs of toxicological, pharmacokinetic, metabolical studies, Clinical Trials, the preparation, collation and/or validation of data from such studies and the preparation of medical writing and publishing, which include expenses for data management, statistical designs and studies, document preparation, and other administrative expenses associated with the clinical testing program or post-marketing studies required or necessary to maintain product approvals, development of quality assurance and quality control procedures and protocols, formulation development and other nonclinical and preclinical studies for Licensed Compounds or Licensed Products. For the avoidance of doubt, “Development Costs” shall not include any costs of procuring capital equipment used in Development.

1.49.     “ Development Milestone Events ” shall have the meaning set forth in Section 7.2.1.

1.50.     “ Development Milestone Payments ” shall have the meaning set forth in Section 7.2.1.

1.51.     “ Disclosing Party ” shall have the meaning set forth in Section 1.39.

1.52.     “ Distributor ” shall mean any Third Party that purchases its requirements for Licensed Product in final packaged form from Allergan or its Affiliates or Sublicensees and is appointed as a distributor to distribute, market and resell such Licensed Product in a country, regardless of whether such Third Party is granted ancillary rights to further develop, package or obtain regulatory approvals of Licensed Product in order to distribute, market or sell Licensed Product; provided that a Third Party that pays Allergan, or an Affiliate or Sublicensee of Allergan, a royalty or similar payment based on the sale or transfer by such Third Party of Licensed Product shall be a Sublicensee, and not a Distributor, for purposes of this Agreement.

1.53.     “ DOJ ” shall have the meaning set forth in Section 1.81.

1.54.     “ Effective Date ” shall mean (a) if Assembly delivers to Allergan representations and warranties that are identical to the representations and warranties delivered as of the Execution Date in accordance with clause (a) of Section 11.6, the second (2nd) Business Day following the date on which HSR Clearance occurs, (b) if Assembly is deemed to have delivered representations and warranties that are identical to the representations and warranties as of the Execution Date pursuant to Section 11.6, the third (3rd) Business Day following the date on which HSR Clearance occurs, or (c) if Assembly makes any supplement or amendment to its representations and warranties in accordance with clause (b) of Section 11.6 and Allergan does not exercise its right pursuant to Section 10.10 to cause the Agreement not to come into effect, the sixth (6th) Business Day following Assembly making such amendment or supplement.

1.55.     “ EMA ” shall mean the European Medicines Agency and any successor or replacement agency.

1.56.     “ Establishment of POC ” shall mean, as to a specific Licensed Product, the generation of data from the first POC Trial of such Licensed Product that demonstrates to Allergan’s satisfaction that such Licensed Product has efficacy for treatment of a particular indication using a specific dosing regimen with no adverse events that would reasonably warrant discontinuation of Development of such Licensed Product for such indication.

1.57.     “ EU ” shall mean the European Union as of the Effective Date.

1.58.     “ EU Major Markets ” shall mean the United Kingdom, Germany, France, Spain and Italy.

1.59.     “ Exclusivity Term ” shall have the meaning set forth in Section 2.4.1.

1.60.     “ Execution Date ” shall have the meaning set forth in the preamble hereto.

1.61.     “ Existing In-License Agreements ” shall have the meaning set forth in Section 11.2.10.

1.62.     “ Existing Regulatory Documentation ” shall mean the Regulatory Documentation Controlled by Assembly or any of its Affiliates as of the Effective Date.

1.63.     “ Exploit ” shall mean to make, have made, import, use, sell or offer for sale, including to Develop, Commercialize, register, hold or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market or have sold or otherwise dispose of. “ Exploitation ” shall mean the act of Exploiting a compound, product or process.

1.64.     “ Facility Deadline ” shall have the meaning set forth in Section 6.4.3(a).

1.65.     “ FD&C Act ” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time.

1.66.     “ FDA ” shall mean the US Food and Drug Administration, and any successor or replacement agency.

1.67.     “ Field ” shall mean the treatment, prevention or diagnosis of any human or animal disease or condition.

1.68.     “ FTC ” shall have the meaning set forth in the definition of HSR Filing.

1.69.     “ FTE ” shall mean the equivalent of the work of one (1) employee full time for one (1) Calendar Year (consisting of at least a total of [* * *] hours per Calendar Year) of work directly related to the Development of a Licensed Compound or a Licensed Product. Any person who works more than [* * *] hours per Calendar Year and any person who devotes less than [* * *] hours per Calendar Year (or such other number as may be agreed by the JDC) shall be treated as an FTE on a pro rata basis based upon the actual number of hours worked divided by eighteen hundred (1800).

1.70.     “ FTE Cost ” means, for any period, the FTE Rate multiplied by the number of FTEs in such period.

1.71.     “ FTE Rate ” shall mean a rate of USD $[* * *] per FTE per annum (reflecting the fully burdened cost of the FTE), exclusive of VAT and increasing on each January 1 following the first anniversary of the Effective Date during the R&D Term by a percentage increase equal to the percentage increase, if any, in the CPI reported for the immediately preceding Calendar Year. For the avoidance of doubt, such rate includes (a) all salaries, wages, bonuses, benefits, management fees, profit sharing, stock option grants and FICA costs and other similar costs, national insurance and pension contributions, meals and entertainment, training, recruiting, relocation, operating supplies and equipment, materials, consumables and other disposable goods to the extent required for the performance of the applicable services and (b) managerial and other overhead costs associated with such FTE and the performance of his or her activities hereunder.

1.72.     “ Force Majeure Event ” shall have the meaning set forth in Section 13.5.

1.73.     “ GAAP ” shall mean United States generally accepted accounting principles, consistently applied.

1.74.     “ Good Clinical Practice ” or “ GCP ” shall mean the then-current good clinical practice applicable to the clinical Development of a Licensed Product under applicable Law, including the ICH guidelines, U.S. Good Clinical Practice and clause 2 of ARTICLE 1 of European Union directive on the conduct of clinical trials 2001/20/EC.

1.75.     “ Good Laboratory Practice ” or “ GLP ” shall mean the then-current Good Laboratory Practice Standards promulgated or endorsed by the FDA or in the case of any other country in the Territory, comparable regulatory standards promulgated or endorsed by the Regulatory Authorities in that country.

1.76.     “ Good Manufacturing Practice ” or “ GMP ” shall mean the then-current Good Manufacturing Practices as specified in the United States Code of Federal Regulations, ICH Guideline Q7A, or equivalent Laws of an applicable Governmental Authority of any other relevant country at the time of manufacture.

1.77.     “ Governmental Authority ” shall mean any court, tribunal, arbitrator, agency, department, board, division, administration, legislative body, commission, official or other instrumentality of (a) any government of any country, (b) a federal, state, province, county, city or other political subdivision thereof or (c) any international, multinational or supranational body.

1.78.     “ Gross Combination Sale Amount ” shall have the meaning set forth in the definition of Net Sales.

1.79.     “ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

1.80.     “ HSR Clearance ” shall mean, with respect to this Agreement, the expiration or termination of all applicable waiting periods and requests for information (and any extensions thereof) under the HSR Act.

1.81.     “ HSR Filing ” shall mean filings by Allergan and Assembly with the United States Federal Trade Commission (the “ FTC ”) and the Antitrust Division of the United States Department of Justice (the “ DOJ ”) of a Notification and Report Form for Certain Mergers and Acquisitions (as that term is defined in the HSR Act) with respect to the matters set forth in this Agreement, together with all required documentary attachments thereto.

1.82.     “ ICC ” shall have the meaning set forth in Section 13.4.

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

1.84.     “ IND ” shall mean any Investigational New Drug application, as defined in Title 21 of the Code of Federal Regulations, on file with the FDA before commencement of Clinical Trials, or any comparable filing with any relevant Regulatory Authority in any country or jurisdiction in the Territory including a clinical trial application.

1.85.     “ Indemnification Claim Notice ” shall have the meaning set forth in Section 12.3.

1.86.     “ Indemnified Party ” shall have the meaning set forth in Section 12.3.

1.87.     “ Indemnifying Party ” shall have the meaning set forth in Section 12.3.

1.88.     “ Indemnitees ” shall have the meaning set forth in Section 12.3.

1.89.     “ Independent Price ” shall have the meaning set forth in Section 1.117.

1.90.     “ Initial Compound ” shall mean (a) any Initial Compound Candidate incorporated in a product administered to subjects in a first-in-human Clinical Trial or any Clinical Trial conducted under the R&D Plan, in each case for a Permitted Indication or (b) any other composition [* * *] (and no [* * *]) as an Initial Compound Candidate described in clause (a) of this Section (including, for example, [* * *] (and no [* * *]) as a composition described in (a) but differing [* * *]). An Initial Compound Candidate shall be an “Initial Compound” and no longer an “Initial Compound Candidate” at the time that such Initial Compound Candidate is administered to a subject in a first-in-human Clinical Trial or other Clinical Trial conducted under the R&D Plan. For clarity, multiple [* * *] IND.

1.91.     “ Initial Compound Candidate ” shall mean each and either of the 201 Compound Candidate or the 301 Compound Candidate.

1.92.     “ Initial Indication Development Costs ” shall have the meaning set forth in Section 4.8.2(a).

1.93.     “ Initial Indications ” shall mean (a) ulcerative colitis, (b) Crohn’s disease, (c) irritable bowel syndrome with constipation (IBS-c), (d) irritable bowel syndrome with diarrhea (IBS-d) and (e) and mixed irritable bowel syndrome (IBS-m). It is contemplated as of the Effective Date that the 201 Compound Candidate will initially be Developed for ulcerative colitis and that the 301 Compound Candidate will initially be Developed for Crohn’s disease.

1.94.     “ Initiation ” of a Clinical Trial shall mean the dosing of the first subject in the relevant Clinical Trial of a Licensed Product.

1.95.     “ In-License Agreements ” shall mean the Existing In-License Agreements and any other agreements deemed In-License Agreements pursuant to Section 2.3.4.

1.96.     “ Invalidity/Unenforceability Action ” shall have the meaning set forth in Section 9.2.1.

1.97.     “ Joint Intellectual Property Rights ” shall have the meaning set forth in Section 9.3.

1.98.     “ Joint Know-How ” shall have the meaning set forth in Section 9.3.

1.99.     “ Joint Patents ” shall have the meaning set forth in Section 9.3.

1.100.   “ Joint Co-Promotion Committee ” or “ JCC ” shall have the meaning set forth in Section 5.3.

1.101.    “ Joint Development Committee ” or “ JDC ” shall have the meaning set forth in Section 3.1.

1.102.    “ Know-How ” shall mean all technical, scientific and other know-how and information, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, ideas, concepts, designs, drawings, specifications, data, results and other material (together with all improvements to any of the foregoing).

1.103.    “ Knowledge ” shall mean, with respect to each Party, the actual knowledge of any of the individuals listed on Schedule 1.103, in each case after due inquiry of such named individuals’ files and records and of outside counsel (including patent counsel, as applicable) and those employees of such Party or its Affiliates who are such named individuals’ direct reports or are otherwise responsible for the relevant activity or subject matter.

1.104.    “ Launch ” shall mean, with respect to a Licensed Product for a particular Permitted Indication and a country in the Territory, the first invoiced commercial sale by Allergan, its Affiliates or their respective Sublicensees in the Territory for monetary value for use by the end user of such Licensed Product in such country for such Permitted Indication after receipt of all Regulatory Approvals for such Licensed Product for such Permitted Indication in such country, including, if applicable, commercially reasonable pricing and reimbursement approvals; provided that commercially reasonable pricing and reimbursement approvals shall be deemed to have been received with respect to a Licensed Product for a particular Permitted Indication in a country in the Territory in the event Net Sales of such Licensed Product for such Permitted Indication in any Calendar Year in such country exceed [* * *] USD ($[* * *]).

1.105.    “ Law ” shall mean all laws, statutes, ordinances, rules, rulings, treaties, procedures, notices, regulations, writs, judgments, decrees, injunctions (whether preliminary or final), orders and other pronouncements having the effect of law of any Governmental Authority that may be in effect from time to time.

1.106.     “ Licensed Compound ” shall mean any (a) Initial Compound, (b) New Compound and (c) Backup Compound.

1.107.     “ Licensed Compound Know-How ” shall mean, subject to Section 2.3.4, all Know-How (a) owned or Controlled by Assembly or any of its Affiliates (including Joint Know-How) as of the Effective Date or during the Term that is necessary or useful for the Development (including activities under any R&D Plan), manufacture, Commercialization or other Exploitation of Licensed Compounds or Licensed Products for the Initial Indications or any other indications set forth on Exhibit A and (b) Controlled by Assembly or any of its Affiliates (including Joint Know-How) upon or following the exercise by Allergan of an option pursuant to Section 2.7.1 that is necessary or useful for the Development (including activities under any R&D Plan), manufacture, Commercialization or other Exploitation of Licensed Compounds or Licensed Products for any Option Indication that becomes a Permitted Indication pursuant to the exercise of such option.

1.108.     “ Licensed Compound Patents ” shall mean, subject to Section 2.3.4, (a) the Patent(s) listed on Schedule 1.108 , and (b) any other Patents that are (i) owned or Controlled by Assembly or any of its Affiliates as of the Effective Date or during the Term (including Joint Patents) that would be infringed, absent a license, by Developing, making, using, selling, offering for sale, importing, or otherwise Exploiting any Licensed Compound or Licensed Product for the Initial Indications or any other indications set forth on Exhibit A and (ii) Controlled by Assembly or any of its Affiliates (including Joint Patents) upon or following the exercise by Allergan of an option pursuant to Section 2.7.1 that would be infringed, absent a license, by Developing, making, using, selling, offering for sale, importing, or otherwise Exploiting any Licensed Compound or Licensed Product for any Option Indication that becomes a Permitted Indication pursuant to the exercise of such option and, in each case (clauses (i) and (ii)), such additional Patents to be included on Schedule 1.108 as it may be updated from time to time; provided , that, a failure to so include a Patent on Schedule 1.108 that otherwise meets the definition of a Licensed Compound Patent shall not preclude such Patent from being deemed a Licensed Compound Patent hereunder.

1.109.      “ Licensed Product ” shall mean any product incorporating a Licensed Compound, in any form or formulation.

1.110.     “ Losses ” shall have the meaning set forth in Section 12.1.

1.111.     “ Manufacturing Facility ” shall have the meaning set forth in Section 6.4.3.

1.112.     “ Materials ” shall mean any tangible chemical or biological material, including any small molecules, DNA, RNA, clones, cells, and any expression product, progeny, derivative or other improvement thereto, along with any tangible chemical or biological material.

1.113.     “ Microbiome-Based Compound ” shall mean a compound [* * *]. For clarity, a compound that comprises [* * *], shall not be considered a Microbiome-Based Compound hereunder.

1.114.     “ Milestone Payments ” shall have the meaning set forth in Section 7.2.2.

1.115.     “ Milestone Events ” shall have the meaning set forth in Section 7.2.2.

1.116.     “ Mono Product ” shall have the meaning set forth in Section 1.117.

1.117.     “ Net Sales ” shall mean, with respect to a Licensed Product in a country in the Territory, the gross amount invoiced for sale or other disposition of such Licensed Product in such country by Allergan, its Affiliates or Sublicensees to Third Parties (including Distributors, wholesalers and end users), less the following deductions accounted for in accordance with GAAP:

(a)     sales returns and allowances actually paid, granted or accrued on the Licensed Product, including trade quantity, prompt pay and cash discounts and any other adjustments, including those granted on account of price adjustments or billing errors;

(b)      credits or allowances given or made for rejection, recall, return or wastage replacement of Licensed Products or for rebates or retroactive price reductions;

(c)      price reductions, rebates and chargeback payments granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), national, state/provincial, local, and other governments, their agencies and purchasers and reimbursers, or to trade customers (including Medicare, Medicaid, managed care and similar types of rebates and chargebacks);

(d)       costs of freight, insurance, and other transportation charges, as well as any administration fees or other fees for services provided by wholesalers, distributors, warehousing chains and other Third Parties related to the distribution of such Licensed Product;

(e)       taxes, duties or other governmental charges (including any tax such as a value added or similar tax, other than any taxes based on income) relating to the sale of such Licensed Product, as adjusted for rebates and refunds, including pharmaceutical excise taxes;

(f)       the portion of administrative fees paid during the relevant time period to group purchasing organizations or pharmaceutical benefit managers relating to such Licensed Product;

(g)       any consideration actually paid or payable for any delivery system which is reflected as a separate item in the applicable gross amount invoiced for such Licensed Product; and

(h)       any other similar and customary revenue deductions that are consistent with GAAP;

to the extent such deductions: (i) are applicable and in accordance with standard allocation procedures, (ii) have not already been deducted or excluded, (iii) are incurred in the ordinary course of business, and (iv) except with respect to the pharmaceutical excise taxes described in subsection (e) above, are determined in accordance with, and as recorded in revenues under GAAP. Net Sales shall not be imputed to transfers of Licensed Product without consideration or for nominal consideration for use in any clinical trial, or for any bona fide charitable, compassionate use or indigent patient program purpose or as a sample. For the avoidance of doubt, in the case of any transfer of any Licensed Product between or among Allergan and its Affiliates or Sublicensees for resale, Net Sales shall be determined based on the sale made by such Affiliate or Sublicensee to a Third Party.  In the case of any sale for value, such as barter or counter-trade, of a Licensed Product, or part thereof, other than in an arm’s length transaction exclusively for cash, Net Sales shall be deemed to be the Net Sales at which substantially similar quantities of such Licensed Product are sold for cash in an arm’s length transaction in the relevant country.

In the event that any Licensed Product is sold as a Combination Product (a “ Combination Sale ” ), the Net Sales amount for such Licensed Product sold in such a Combination Sale in any period and country shall be calculated by multiplying the gross amount invoiced for the Combination Sale (the “ Gross Combination Sale Amount ”), less all deductions in (a)-(i) above (“ Permitted Deductions ”), by the fraction, the numerator of which is the wholesale acquisition cost charged by Allergan or its Affiliates in such period and country for a Licensed Product containing the Licensed Compound(s) in the Combination Product as its sole active ingredients (the “ Mono Product(s) ”), if such Mono Product is sold separately by Allergan or its Affiliates in such period and country (the “ Independent Price(s) ”), and the denominator is the Independent Price(s) plus the wholesale acquisition cost charged by Allergan or its Affiliates for product(s) containing as their sole active ingredient(s) those active ingredients that are not Licensed Compounds included in the Combination Product (“ Other Product(s) ”) if such Other Product(s) are sold separately by Allergan or its Affiliates in such period and country, in each case for a quantity comparable to that used in such Combination Product and of substantially the same class, purity and potency or functionality, as applicable; provided that if any of such Other Product(s) are not sold separately by Allergan or its Affiliates, but are independently marketed by one or more Third Parties, in such period and country, then such product(s) shall be deemed to be separately sold by Allergan or its Affiliates at the average wholesale acquisition costs charged by such Third Parties for purposes of the calculations in this paragraph; and provided , further, if the calculation of Net Sales resulting from a Combination Sale cannot be determined by the foregoing method, the calculation of Net Sales for such Combination Sale shall be calculated based upon the relative value of the active components of such Combination Product as reasonably determined by the mutual agreement of the Parties in good faith.

Notwithstanding anything to the contrary contained herein, sales of a Licensed Product (w) that uses a Licensed Product as the reference - listed drug in a so-called 351(k) BLA or other similar filing under applicable Law by any Sublicensee, (x) by any Sublicensee that has received a license from Allergan in settlement of any dispute or pursuant to any judgment, (y) by a Sublicensee pursuant to a compulsory license or (z) as to which Allergan does not receive any monetary consideration tied to sales of such Licensed Product, shall not be considered Net Sales for purposes of this Agreement, in each case of clauses (w) through (z) except to the extent Allergan receives consideration based on such Sublicensee’s sales of the Licensed Product in which case such consideration received by Allergan shall be deemed Net Sales. 

1.118.      “ New Compound Candidate ” shall mean any composition comprising [* * *] based on or discovered using Assembly’s microbiome program platform that is intended to treat irritable bowel syndrome with constipation (IBS-c), irritable bowel syndrome with diarrhea (IBS-d) or mixed irritable bowel syndrome (IBS-m) and is selected for further Development by Allergan as a “New Compound Candidate” pursuant to the procedures set forth in Section 4.4, as such composition may be Optimized pursuant to the R&D Plan under this Agreement.

1.119.     “ New Compound ” shall mean (a) any New Compound Candidate incorporated in a product administered to subjects in a first-in-human Clinical Trial or any Clinical Trial conducted under the R&D Plan, in each case for a Permitted Indication or (b) any other composition [* * *] (and no [* * *]) as a New Compound Candidate described in clause (a) of this Section (including, for example, a composition [* * *] (and no [* * *]) as a composition described in (a) but differing [* * *]). A New Compound Candidate shall be a “New Compound” and no longer a “New Compound Candidate” at the time that such New Compound Candidate is administered to a subject in a first-in-human Clinical Trial or other Clinical Trial conducted under the R&D Plan. For clarity, [* * *] IND.

1.120.      “ Optimization ” shall mean, with respect to a Product Candidate and a particular Permitted Indication, Development activities conducted with respect to such Product Candidate under the R&D Plan in order to adjust the composition of such Product Candidate to optimize the safety or efficacy of such Product Candidate for such Permitted Indication prior to the Initiation of a POC Trial. “Optimization” shall include the following activities: (a) [* * *] the Compound Candidate included in such Product Candidate; (b) [* * *] the Compound Candidate included in such Product Candidate, such [* * *] then comprising the Compound Candidate, (c) [* * *] in the Compound Candidate included in such Product Candidate; (d) [* * *] to the Compound Candidate or [* * *] from the Compound Candidate, in each case included in such Product Candidate; or (e) [* * *] the Compound Candidate included in such Product Candidate, including [* * *].

1.121.      “ Option Exercise Fee ” shall have the meaning set forth in Section 2.7.1.

1.122.      “ Option Indications ” shall have the meaning set forth in Section 2.7.1.

1.123.      “ Option Indication Right ” shall have the meaning set forth in Section 2.7.1.

1.124.      “ Option Notice ” shall have the meaning set forth in Section 2.7.1.

1.125.      “ Other Product(s) ” shall have the meaning set forth in the definition of Net Sales.

1.126.      “ Party ” and “ Parties ” shall have the meaning set forth in the preamble hereto.

1.127.      “ Patents ” shall mean (a) all patents or patent applications, including any continuations, continuations-in-part, divisions, provisional, converted provisional, continued prosecution or substitute applications, (b) any patent issued with respect to any of the foregoing patent applications, including utility models, petty patents, innovation patents and design patents and certificates of invention, (c) any reissue, reexamination, renewal, restoration or extension (including any supplementary protection certificate and the like) of any of the foregoing patents or patent applications, (d) any confirmation patent or registration patent or patent of addition based on any such patent, (e) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents, and (f) all foreign counterparts of any of the foregoing, or as applicable portions thereof or individual claims therein.

1.128.      “ Patent Challenge ” shall have the meaning set forth in Section 10.5.

1.129.      “ Permitted Deductions ” shall have the meaning set forth in the definition of Net Sales.

1.130.      “ Permitted Indications ” shall mean (a) the Initial Indications (other than any Initial Indication with respect to which Allergan has provided a notice to Assembly pursuant to Section 2.4.2 following the delivery of any such notice), (b) any other indications set forth on Exhibit A hereto and (c) any Option Indications for which Allergan has exercised the Option Indication Right.

1.131.      “ Personal Information ” shall have the meaning set forth in Section 11.5.1.

1.132.      “ Phase of Development Multiple ” shall have the meaning set forth in Section 2.7.2.

1.133.      “ Phase I Clinical Trial ” shall mean, as to a specific Licensed Product, the first clinical study of such Licensed Product conducted in humans but excluding so-called “phase 0 trials” conducted using very small doses in fewer than twenty (20) people.

1.134.     “ Phase II Clinical Trial ” shall mean, as to a specific Licensed Product, a well-controlled, closely monitored human clinical trial that is intended to evaluate the safety and effectiveness of such Licensed Product for a particular indication or indications in patients with the disease or indication under study or would otherwise satisfy the requirements of 21 C.F.R. 312.21(b) as amended from time to time, or the corresponding regulation in jurisdictions other than the United States.

1.135.     “ Phase IIb Clinical Trial ” shall mean, as to a specific Licensed Product, a Phase II Clinical Trial that is intended to make a further determination of the effectiveness and safety of such Licensed Product for a particular indication or indications in patients with the disease or indication under study, at the intended clinical dose or doses or range of doses, on a sufficient number of subjects and for a sufficient duration to confirm the optimal manner of use of such Licensed Product (dose and dose regimen) prior to Initiation of one or more pivotal Phase III Clinical Trials or filing for a Regulatory Approval without the Initiation of such pivotal Phase III Clinical Trials.

1.136.      “ Phase III Clinical Trial ” shall mean, as to a specific Licensed Product, a clinical study in humans, performed to gain evidence of statistical significance of the efficacy of such Licensed Product in a target patient population, and to obtain expanded evidence of safety for such Licensed Product that is needed to evaluate the overall benefit-risk relationship of such Licensed Product and provide an adequate basis for obtaining Regulatory Approval, including physician labeling, as described in 21 C.F.R. 312.21(c) as amended from time to time, or the corresponding regulation in jurisdictions other than the United States.

1.137.      “ POC Trial ” shall mean, as to a specific Licensed Compound, the first Clinical Trial of a Licensed Product incorporating such Licensed Compound designed to demonstrate that a Licensed Product incorporating such Licensed Compound has efficacy for treatment of a particular indication using a specific dosing regimen.

1.138.      “ PPACA ” shall mean the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act.

1.139.      “ Product Candidate ” shall mean any product incorporating a Compound Candidate, in any form or formulation, prior to Completion of the first POC Trial for such product.

1.140.      “ Product Only Claims ” shall have the meaning set forth in Section 9.1.2.

1.141.      “ Product Only Patents ” shall mean any Licensed Compound Patent that solely Covers Licensed Compounds and/or Licensed Products, including the composition, method of use, delivery and manufacture of Licensed Compounds and/or Licensed Products. For clarity, whether a Licensed Compound Patent is a Product Only Patent shall be determined without regard [* * *] that the Licensed Compound Patent claims.

1.142.      “ Product Related Patents ” shall mean any Licensed Compound Patent that Covers Licensed Compounds and/or Licensed Products that are not Product Only Patents.

1.143.      “ Product Trademarks ” shall mean the Trademark(s) used or to be used by Allergan or its Affiliates or its or their Sublicensees for the Commercialization of Licensed Products in the Territory and any registrations thereof or any pending applications relating thereto in the Territory, including any unregistered Trademark rights related to the Licensed Products as may exist through use before, on or after the Effective Date (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of the Parties or their Affiliates or its or their Sublicensees).

1.144.      “ Prosecuting Party ” shall have the meaning set forth in Section 9.2.2.

1.145.      “ Regulatory Approval ” shall mean any and all approvals (including applicable pricing and reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority, necessary to commercially distribute, sell or market a product in a country.

1.146.      “ Regulatory Authority ” shall mean any national, supranational, regional, state or local regulatory agency, administration, department, bureau, commission, council or other governmental entity including the FDA and the EMA and any other agencies in any country involved in the granting or receipt of Regulatory Approvals.

1.147.      “ Regulatory Documentation ” shall mean all (a) applications (including all INDs), registrations, licenses, authorizations and Regulatory Approvals; (b) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all documents cited therein, including as applicable, all adverse event files and complaint files; and (c) clinical, chemistry, manufacturing and controls and other data contained or relied upon in any of the foregoing; in each case ((a), (b) and (c)) relating to a Licensed Compound or a Licensed Product.

1.148.      “ Regulatory Exclusivity ” shall mean any exclusive marketing rights or data exclusivity rights conferred by any Regulatory Authority, or otherwise by statute, with respect to a Licensed Product other than Patents, including rights conferred in the US under the Hatch-Waxman Act or rights similar thereto outside the US and including orphan drug designations or approvals.

1.149.      “ Restricted Party ” shall have the meaning set forth in Section 2.4.4.

1.150.      “ R&D Budget ” shall mean the R&D Budget (Initial Indications) and the R&D Budget (New Indications) collectively.

1.151.      “ R&D Budget (Initial Indications) ” shall mean the budget prepared by Assembly and mutually agreed upon by the Parties for Assembly’s activities with respect to a Compound Candidate, Product Candidate, Licensed Compound or Licensed Product being Developed for an Initial Indication under this Agreement, as such budget may be modified from time to time by mutual agreement of the Parties.

1.152.      “ R&D Budget (New Indications) ” shall mean the budget prepared by Assembly and mutually agreed upon by the Parties for Assembly’s activities with respect to a Compound Candidate, Product Candidate, Licensed Compound or Licensed Product being Developed for a Permitted Indication other than an Initial Indication under this Agreement, as such budget may be modified from time to time by mutual agreement of the Parties.

1.153.      “ R&D Plan ” shall mean the plan of work, a preliminary version of which is set out at Schedule 1.153 as such plan of work may be finalized and amended in accordance with this Agreement. The R&D Budget shall be a part of the R&D Plan.

1.154.      “ R&D Term ” shall mean the period beginning on the Effective Date and ending upon the first day on which there are no Compound R&D Terms in effect for any Compound Candidates or Licensed Compounds.

1.155.      “ Receiving Party ” shall have the meaning set forth in Section 1.39.

1.156.      “ Restricted Indication ” shall mean (a) in the event that the relevant Restricted Party is Allergan, any Initial Indication (other than any Initial Indication with respect to which Allergan has provided a notice to Assembly pursuant to Section 2.4.2 following the delivery of any such notice) and (b) in the event that the relevant Restricted Party is Assembly, any Permitted Indication that is not an Option Indication.

1.157.      “ Retained Regulatory Documentation ” has the meaning set forth in Section 6.2.

1.158.      “ Reversion IP ” shall have the meaning set forth in Section 10.8.4(c).

1.159.      “ Reversion Product ” shall have the meaning set forth in Section 10.8.4(c).

1.160.      “ Royalty Payment ” shall have the meaning set forth in Section 7.3.

1.161.      “ Royalty Term ” shall have the meaning set forth in Section 7.3.

1.162.      “ Sales Milestone Events ” shall have the meaning set forth in Section 7.2.2.

1.163.      “ Sales Milestone Payments ” shall have the meaning set forth in Section 7.2.2.

1.164.      “ Senior Officer ” shall mean the Chief Executive Officer of Assembly and Chief R&D Officer of Allergan or the functional successor in their respective organizations, or their respective designees at Senior Vice President level or above.

1.165.      “ Specifications ” shall have the meaning set forth in Section 6.4.2.

1.166.      “ [* * *] ” shall mean [* * *].

1.167.      “ Sublicensee ” shall mean a Third Party to whom Allergan has granted a right to Exploit a Licensed Product, excluding (a) Distributors and (b) wholesalers of biopharmaceutical products, including, for example, McKesson Corporation, AmerisourceBergen and Cardinal Health.

1.168.      “ Supply Agreement ” shall have the meaning set forth in Section 6.4.5.

1.169.      “ Term ” shall have the meaning set forth in Section 10.1.

1.170.      “ Termination Date ” shall mean the effective date of termination of this Agreement in accordance with its terms.

1.171.      “ Territory ” shall mean worldwide.

1.172.      “ [* * *] ” shall mean [* * *] and its successors and assigns under the [* * *] Agreement.

1.173.      “ [* * *] Agreement ” shall mean that certain License and Collaboration Agreement effective as of [* * *], by and between [* * *] and [* * *].

1.174.      “ [* * *] Letter ” shall mean the letter between [* * *] and Assembly dated as December 23, 2016.

1.175.      “ Third Party ” shall mean any Person who is not a Party or an Affiliate of a Party.

1.176.      “ Third Party Infringement Claim ” shall have the meaning set forth in Section 9.3.1.

1.177.      “ Third Party Claim ” shall have the meaning set forth in Section 12.1(a).

1.178.      “ Third Party Patents ” shall mean [* * *].

1.179.      “ Third Party Payments ” shall have the meaning set forth in Section 7.4.3.

1.180.      “ Trademark ” shall mean any word, name, symbol, color, shape, designation or any combination thereof, including any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product configuration, program name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business symbol, that functions as an identifier of source or origin, whether or not registered and all statutory and common law rights therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of the foregoing.

1.181.     “ US ” and “ USA ” shall mean the United States of America, including all of its territories and possessions.

1.182.     “ USA Co-Promotion Option Right ” shall have the meaning set forth in Section 5.1.1.

1.183.     “ USD ” shall mean United States Dollars.

1.184.     “ Valid Claim ” shall mean:

(a)     a claim of an issued and unexpired patent included within the Licensed Compound Patents that has not been abandoned, cancelled or held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction unappealed within the time allowed for appeal, or that has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or

(b)     a claim of a pending patent application included within the Licensed Compound Patents, which patent application was filed and is being prosecuted in good faith and has not been cancelled, withdrawn from consideration, abandoned or finally disallowed without the possibility of appeal or refiling of the application and that has not been pending for more than seven (7) years from the earliest date from which the patent application claims priority. If the patent application is a continuation, divisional or other continuing application, the seven (7) year period mentioned above shall be calculated from the first application filed in the series of applications.

(c)     If a claim of a pending patent application included within the Licensed Compound Patents that claims a Licensed Compound is pending in a country for more than seven (7) years from the earliest date from which the patent application claims priority but is subsequently issued, then such issued patent claim shall not be reinstated as a Valid Claim, unless such patent issues (i) prior to the Launch of a Licensed Product containing such Licensed Compound in such country, or (ii) following the Launch of a Licensed Product containing such Licensed Compound in such country, if during the entire time between Launch and such issuance, (A) the Royalty Term with respect to such Licensed Product in such country has been in effect due to events described in clause (a) or clause (b)(i) of Section 7.3 and (B) no reduction in the royalties due hereunder has occurred pursuant to Section 7.4.1 in such country.

1.185.     “ Value Added Tax ” or “ VAT ” shall mean any value added tax, ad valorem, goods and services or similar tax chargeable on the supply or deemed supply of goods or services, sales and use taxes, transaction taxes, consumption taxes and other similar taxes required by applicable Law including any interest, penalties or other additions to tax thereon, required under applicable Law.

1.186.     “ Year 5 Forecast ” shall mean either or both of the Year 5 Forecast of Option Indication and the Year 5 Forecast of IBS-d.

1.187.     “ Year 5 Forecast of Option Indication ” shall have the meaning set forth in Section 2.7.2.

1.188.     “ Year 5 Forecast of IBS-d ” shall have the meaning set forth in Section 2.7.2.

1.189.      “ Withholding Taxes ” shall have the meaning set forth in Section 7.5.

1.190.       Interpretation . Unless the context of this Agreement otherwise requires: (a) words of one gender include the other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby,” and other similar words refer to this entire Agreement; (d) the words “include”, “includes”, and “including” when used in this Agreement shall be deemed to be followed by the words “without limitation”, unless otherwise specified; (e) the terms “Article” and “Section” refer to the specified Article and Section of this Agreement (unless clear from the context that it refers to an Article or Section of some other document); (f) references to any “person” include individuals, sole proprietorships, partnerships, limited partnerships, limited liability partnerships, corporations, limited liability companies, business trusts, joint stock companies, trusts, incorporated associations, joint ventures or similar entities or organisations, and the successors and permitted assigns of that person, (g) “or” has the inclusive meaning represented by the phrase “and/or”; (h) the words “will” and “shall” shall have the same meaning; (i) The letter “M” used in connection with the USD figures in this Agreement denotes “million” and the letter “B” used in connection with the USD figures in this Agreement denotes “billion”; and (j) references to a Law include any amendment or modification to such Law and any rules or regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules or regulations occurs, before or, only with respect to events or developments occurring or actions taken or conditions existing after the date of such amendment, modification or issuance, after the date of this Agreement, but only to the extent such amendment or modification, to the extent it occurs after the date hereof, does not have a retroactive effect. Whenever this Agreement refers to a number of days, unless otherwise specified, such number shall refer to calendar days.

ARTICLE 2
LICENSE

2.1.         Licenses Granted by Assembly .

2.1.1.     Subject to the terms and conditions of this Agreement, as of the Effective Date, Assembly, on behalf of itself and its Affiliates, hereby grants to Allergan, and Allergan hereby accepts, a non-transferable (except as provided in Section 13.1), sublicensable (subject to Section 2.1.4), exclusive (including with regard to Assembly and its Affiliates), royalty-bearing, license under Assembly’s right, title and interest in and to the Licensed Compound Patents and the Licensed Compound Know-How solely to Develop, have Developed, use, Commercialize, have Commercialized, import into and export out of any country, have imported into and exported out of any country and otherwise Exploit (except to make or have made) the Licensed Compounds and Licensed Products in the Field in the Territory.

2.1.2.     Subject to the terms and conditions of this Agreement, as of the Effective Date, Assembly, on behalf of itself and its Affiliates, hereby grants to Allergan, and Allergan hereby accepts, a non-transferable (except as provided in Section 13.1), exclusive (including with regard to Assembly and its Affiliates), license and right of reference, with the right to grant further rights of reference solely to a Sublicensee in connection with the grant of a sublicense granted in accordance with Section 2.1.4, in and to the Retained Regulatory Documentation solely to Develop, have Developed, use, Commercialize, have Commercialized, import into and export out of any country, have imported into and exported out of any country and otherwise Exploit (except to make or have made) the Licensed Compounds and Licensed Products as permitted by Section 2.1.1.

2.1.3.     Subject to the terms and conditions of this Agreement, as of the Effective Date, Assembly, on behalf of itself and its Affiliates, hereby grants to Allergan, and Allergan hereby accepts, a non-transferable (except as provided in Section 13.1), sublicensable (subject to Section 2.1.4), worldwide, non-exclusive license under Assembly’s interest in and to the Licensed Compound Patents and the Licensed Compound Know-How to make or have made the Licensed Compounds and Licensed Products solely to Develop, have Developed, use, Commercialize, have Commercialized, import into and export out of any country, have imported into and exported out of any country and otherwise Exploit the Licensed Compounds and Licensed Products in the Field in the Territory.

2.1.4.     Allergan shall have the right to sublicense any of its rights under Section 2.1 to any Third Party (which sublicensed rights may be further sublicensable through multiple tiers) without the prior consent of Assembly, subject to the requirements of this Section 2.1.4. Each sublicense granted by Allergan pursuant to this Section 2.1.4 shall be subject and subordinate to the terms of this Agreement and shall contain provisions consistent with those in this Agreement. Except with respect to standard commercial vendor agreements that include a sublicense of any of Allergan’s rights under Sections 2.1.1 through 2.1.3, Allergan shall promptly provide Assembly with a copy of the fully executed sublicense agreement covering any sublicense granted hereunder (which copy may be redacted to remove provisions which are not necessary to monitor compliance with this Section 2.1.4). Each sublicense agreement shall contain the following provisions: (i) a requirement that the Sublicensee comply with the confidentiality and non-use provisions of ARTICLE 8 with respect to Assembly’s Confidential Information and (ii) a requirement that the Sublicensee submit applicable sales or other reports to Allergan to the extent necessary or relevant to the reports required to be made or records required to be maintained under this Agreement. Notwithstanding any sublicense, Allergan shall remain primarily liable to Assembly for the performance of all of Allergan’s obligations under, and Allergan’s compliance with all provisions of, this Agreement.

2.2.         Licenses Granted by Allergan .

2.2.1.     Subject to the terms and conditions of this Agreement, as of the Effective Date, Allergan, on behalf of itself and its Affiliates, hereby grants to Assembly, and Assembly hereby accepts, a non-exclusive, royalty-free, sublicensable (solely to permitted subcontractors under this Agreement) license and right of reference under Allergan’s right, title and interest in and to the Allergan Collaboration IP and the Assigned Regulatory Documentation solely to carry out Assembly’s activities under the R&D Plan.

2.2.2.     Subject to the terms and conditions of this Agreement, as of the Effective Date, Allergan, on behalf of itself and its Affiliates, hereby grants to Assembly, and Assembly hereby accepts, a non-transferable (except as provided in Section 13.1), exclusive (including with regard to Allergan and its Affiliates), license and right of reference, with the right to grant further rights of reference, in and to the Assigned Regulatory Documentation solely to Develop, have Developed, use, Commercialize, have Commercialized, import into and export out of any country, have imported into and exported out of any country and otherwise Exploit (except to make or have made) products comprising Microbiome-Based Compounds, including Reversion Products, subject to the limitations imposed by Section 2.4.

2.2.3.     Notwithstanding anything in this Agreement to the contrary, the licenses granted by Allergan pursuant to this Section 2.2 do not include any intellectual property rights relating to compounds that are not Licensed Compounds.

2.3.         Additional In-Licensed Intellectual Property .

2.3.1.     Assembly will use Commercially Reasonable Efforts to ensure that it or its Affiliate Controls any Patent or Know-How to which it is granted rights by a Third Party to the extent such Patent or Know-How would be deemed a Licensed Compound Patent or Licensed Compound Know-How, as applicable, if Controlled by Assembly or its Affiliate at the time of such grant of rights.

2.3.2.     If Assembly intends to secure rights pursuant to a license or similar agreement to any such Patent or Know-How, and the terms of the initial draft of the definitive agreement exchanged between Assembly and such Third Party would, if Allergan accepted a sublicense of such rights on such terms pursuant to Section 2.3.4, impose obligations or restrictions on Allergan in addition to Allergan’s existing obligations and restrictions hereunder, then [* * *].

2.3.3.     Without limiting any other obligation under this Section 2.3, Assembly shall promptly notify Allergan in the event (a) [* * *], (b) [* * *] or (c) [* * *], which notice, in the case of clause (b) or (c) shall be provided prior to entering into any such license or other agreement, and Assembly shall not enter into such license or other agreement prior to the Parties engaging in the discussions described in the next sentence. In the event of clause (b) or (c) under this Section 2.3.3, (y) the Parties shall discuss in good faith the underlying issues causing such inability on the part of Assembly and, [* * *] and (z) unless otherwise mutually agreed by the Parties, Assembly shall only be permitted to obtain a non-exclusive license (or an exclusive license of a scope that will not prevent Allergan from obtaining a license directly from such Third Party to exploit Licensed Compounds and Licensed Products under this Agreement) to such relevant Patent or Know-How with respect to the Licensed Compounds and Licensed Products in the Field in the Territory so that Allergan may, [* * *]. For the purposes of this Section 2.3.3 only, the Licensed Compounds and Licensed Products under this Agreement at any given time will include solely Compound Candidates and Product Candidates included in or contemplated by the then-current R&D Plan and then-current Licensed Compounds and Licensed Products and the Field shall be the then-current Permitted Indications.

2.3.4.     Notwithstanding anything to the contrary in this Agreement, in the event that Assembly enters into an agreement or arrangement under which Assembly or its Affiliate is granted rights to any Patent or Know-How that would be a Licensed Compound Patent or Licensed Compound Know-How hereunder, such Patent or Know-How is hereby deemed not to be a Licensed Compound Patent or Licensed Compound Know-How hereunder, as applicable, unless and until (a) Assembly provides Allergan with a written notice of all obligations, limitations and conditions to which Allergan would be subject pursuant to the terms of such agreement or arrangement if such Patent or Know-How were deemed, as applicable, a Licensed Compound Patent or Licensed Compound Know-How hereunder and (b) Allergan, at any time after receipt of such notice, provides written notice to Assembly that it agrees to such obligations, limitations and conditions (upon delivery of such notice, such relevant agreement or arrangement shall be deemed an “In-License Agreement” hereunder). Assembly shall be required to provide the notice described in clause (a) of this Section 2.3.4 within five (5) Business Days of its execution of an agreement or arrangement under which Assembly or its Affiliate is granted rights to any Patent or Know-How that would be a Licensed Compound Patent or Licensed Compound Know-How hereunder if accepted by Allergan. If Allergan does not provide the notice described in clause (b) of this Section 2.3.4 or indicates in such written notice that it does not wish to obtain a sublicense under the relevant Patent or Know-How, such Patent or Know-How is hereby deemed not to be a Licensed Compound Patent or Licensed Compound Know-How hereunder. In no event shall Allergan be responsible or liable for any obligation, limitation or condition under an agreement or arrangement under which Assembly or its Affiliate is granted rights to any Patent or Know-How unless Allergan has expressly agreed to such obligation, limitation or condition pursuant to this Section 2.3.4.

2.4.         Exclusivity .

2.4.1.     Except as otherwise expressly provided herein (including as provided in Section 2.7.4 and under the R&D Plan), Assembly shall not, and shall cause its Affiliates not to, either itself, or together with or through enabling (including through the grant of rights) any Third Party, [* * *] in the Territory prior to [* * *] (such period, the “ Exclusivity Term ”); provided that the restrictions in this Section 2.4.1 shall not apply during any time period during the Exclusivity Term that [* * *].

2.4.2.     Except with respect to activities under this Agreement and as otherwise expressly provided herein, [* * *], Allergan shall not, and shall cause its Affiliates not to, either itself, or together with or through enabling (including through the grant of rights) any Third Party, [* * *] in the Territory prior to [* * *]; provided that the restrictions in this Section 2.4.2 shall not apply with respect to [* * *].

2.4.3.     Except as expressly provided in Section 2.7, Allergan shall not, and shall cause its Affiliates not to, either itself, or together with or through enabling (including through the grant of rights) any Third Party, Exploit any Licensed Compound or Licensed Product outside of the Permitted Indications; provided , that, Allergan shall not be in breach of this Section 2.4.3 merely as a result of off-label use of a Licensed Product outside of a Permitted Indication for a Licensed Product that has only received Regulatory Approvals for, and has only been promoted by Allergan or its Affiliates for, one or more Permitted Indications.

2.4.4.     Notwithstanding anything to the contrary in this Agreement, the restrictions placed on a Party and its Affiliates in Sections 2.4.1 through 2.4.2, respectively (the relevant restricted Party, the “ Restricted Party ”), will not apply to any product Developed or Commercialized by any Third Party that becomes an Affiliate of the Restricted Party after the Effective Date (a) as a result of [* * *] or (b) if such product (i) is sold or marketed by such Third Party or its licensee and such sales (whether by such Third Party or a licensee of such Third Party) represents less than fifty percent (50%) of the worldwide sales of the acquired business at the time such Third Party becomes an Affiliate of such Restricted Party by direct or indirect acquisition of such Third Party by such Restricted Party or (ii) is not sold or marketed by such Third Party and represents less than fifty percent (50%) of the enterprise value of the acquired business at the time such Third Party becomes an Affiliate of such Restricted Party by direct or indirect acquisition of such Third Party by such Restricted Party, in each case solely (x) if a “firewall” of reasonable safeguards is put in place by the Restricted Party between individuals with access to Licensed Compound Know-How or Licensed Compound Patents (to the extent unpublished), on the one hand, and the personnel responsible for the Development or Commercialization of such product, on the other hand and (y) if such Development or Commercialization (i) was initiated prior to such Third Party becoming an Affiliate of such Restricted Party and without any access to Licensed Compound Know-How or Licensed Compound Patents (to the extent unpublished), and (ii) continues without the use of any Licensed Compound Know-How (to the extent not in the public domain) or Licensed Compound Patents after such Third Party becomes an Affiliate of the Restricted Party.

2.4.5.     Notwithstanding anything to the contrary in this Section 2.4, if a Third Party becomes an Affiliate of a Restricted Party by direct or indirect acquisition of such Third Party by such Restricted Party and such Third Party is, at the time of such acquisition, Developing or Commercializing a Microbiome-Based Compound for, with respect to such Party, a Restricted Indication, that (a) if sold or marketed, represents fifty percent (50%) or more of the worldwide sales of the acquired Third Party at the time of such acquisition or (b) if not sold or marketed, represents fifty percent (50%) or more of the enterprise value of the acquired Third Party at the time of such acquisition, then, within six (6) months after the closing of such acquisition, such Restricted Party shall divest all rights (other than the right to merely receive payments based on the Development or Commercialization of such Microbiome-Based Compound) or cease to Develop and Commercialize such Microbiome-Based Compound for the duration of the relevant restriction on such Restricted Party as set forth in Section 2.4.1 or 2.4.2, as applicable; provided that such Restricted Party shall ensure that: (x) no personnel of such Restricted Party or its Affiliates that is involved in the Development, manufacture or Commercialization of such Microbiome-Based Compound prior to such divestment or cessation obtains any rights or access to the Confidential Information of the other Party until completion of such divestment or cessation; and (y) all of such Party’s or its Affiliates’ Development and Commercialization activities related to any such Microbiome-Based Compound prior to such divestment or cessation are kept separate from the Development and Commercialization activities for the Licensed Compound and Licensed Products under this Agreement.

2.5.         Retention of Rights .

2.5.1.     Assembly retains the right under the Licensed Compound Patents, the Licensed Compound Know-How and the Retained Regulatory Documentation solely to perform its obligations as set forth in, and subject to, the R&D Plan. Except as expressly provided herein, Assembly grants no other right or license, including any rights or licenses to the Licensed Compound Patents, the Licensed Compound Know-How or any other Patent or intellectual property rights not otherwise expressly granted herein.

2.5.2.     Except as expressly provided herein, Allergan grants no other right or license, including any rights or licenses to the Allergan Collaboration IP, the Assigned Regulatory Documentation, Allergan’s interest in the Joint Patents and the Joint Know-How or any other Patent or intellectual property rights not otherwise expressly granted herein.

2.6.         Disclosure of Know-How and Regulatory Documentation .

2.6.1.     Assembly shall and shall cause its Affiliates to, without additional compensation, disclose and make available to Allergan, in electronic or hardcopy form, as Allergan may reasonably request, copies of all physical embodiments of Regulatory Documentation, Licensed Compound Know-How and Joint Know-How Controlled by Assembly or its Affiliates, including (a) all clinical and non-clinical data, (b) summaries of such data, research, analyses and other information relating to the Licensed Compounds or the Licensed Products (including the results achieved in the performance of the R&D Plan and the Development of a Compound Candidate, Product Candidate, Licensed Compound or Licensed Product), and (c) any other information claimed or covered by any Licensed Compound Patent or Joint Patent or otherwise relating to any Licensed Compound, any Licensed Product or the Exploitation of any Licensed Compound or Licensed Product requested by Allergan, in each case (x) that is in existence as of the Effective Date, promptly after (but in any case within thirty (30) calendar days following) the Effective Date and (y) that comes into existence after the Effective Date, promptly after the earlier of the development, making, conception or reduction to practice of such Regulatory Documentation, Licensed Compound Know-How or Joint Know-How.

2.6.2.     Assembly, at its sole cost and expense, shall provide Allergan with all reasonable assistance required in order to transfer to Allergan the Regulatory Documentation, Licensed Compound Know-How, Joint Know-How, and other information required to be produced pursuant to Section 2.6.1 above, in each case, in a timely manner. Without limiting the foregoing, Assembly shall make available to Allergan, those of Assembly’s representatives as Allergan may reasonably request for purposes of transferring the Regulatory Documentation, Licensed Compound Know-How, Joint Know-How, or other information to Allergan or for purposes of Allergan acquiring expertise on the practical application of such information or assisting on issues arising during such Exploitation, including through site visits to Allergan’s facility as reasonably required or useful.

2.6.3.     In connection with the foregoing disclosure obligation, Assembly will disclose to Allergan information relating to [* * *] by Assembly for use [* * *] by Assembly hereunder for selection by Allergan as a Compound Candidate, including Assembly’s [* * *], but, anything to the contrary in this Agreement notwithstanding, neither Assembly nor any of its Affiliates shall be required to disclose or make available to Allergan or any Third Party any [* * *] a compound.

2.7.         Option to Expand the Permitted Indications .

2.7.1.     Allergan shall have the right, at Allergan’s sole discretion at any time during the Term, to expand the Permitted Indications (the “ Option Indication Right ”) on an Option Indication-by-Option Indication basis by (i) providing written notice (an “ Option Notice ”) to Assembly specifying an additional indication or indications (each, an “ Option Indication ” and collectively, “ Option Indications ”) with respect to which Allergan desires to exercise the Option Indication Right and the identity of the Licensed Compound or Compound Candidate that Allergan initially intends to Develop for the relevant Option Indication(s) and (ii) paying the fee (the “ Option Exercise Fee ”) and committing to pay the development milestones (“ Option Indication Development Milestones ”) as described in Section 2.7.2. There shall be no limit to the number of times Allergan may exercise the Option Indication Right. Within ten (10) Business Days of receipt of an Option Notice, Assembly shall notify Allergan (a) if a proposed Option Indication is available, such Option Indication to only be deemed unavailable if [* * *] and (b) if such proposed Option Indication is available, whether any Licensed Compound Know-How described in clause (a) of Section 1.107 or any Licensed Compound Patents described in clause (b)(i) of Section 1.108 would not be Licensed Compound Know-How or Licensed Compound Patents with respect to such proposed Option Indication, assuming solely for the purposes of this Section 2.7.1 that any Compound Candidate subject to the Option Notice is a Licensed Compound. If Assembly does not provide notice to Allergan within such ten (10) Business Day period or otherwise notifies Allergan that such Option Indication is available under this Agreement (provided that, unless Assembly notifies Allergan that such Option Indication is not available, it shall provide to Allergan the information described in clause (b) of the preceding sentence), such Option Indication shall become a Permitted Indication upon payment by Allergan of the Option Exercise Fee.

2.7.2.      Option Exercise Fee .

(a)     The Option Exercise Fee shall be determined as follows:

Option Exercise Fee = [* * *]

[* * *]

[* * *]

[* * *]

[* * *]

[* * *]

The Option Exercise Fee for any Option Indication shall not be any greater than $[* * *], regardless of its calculated amount. If the Option Exercise Fee as calculated above results in an amount (a) that is less than $[* * *], then the Option Exercise Fee shall be adjusted to be equal to $[* * *] and (b) that is greater than $[* * *], then the Option Exercise Fee shall be payable as follows: (i) $[* * *] shall be payable at the time of exercise of the Option Indication Rights in accordance with this paragraph and (ii) the remainder (up to $[* * *]) shall be [* * * ] payable for the relevant Option Indication. The Option Exercise Fee shall be payable within [* * *] days after receipt by Allergan of an invoice therefor from Assembly, which invoice shall be delivered promptly following the determination of the Option Exercise Fee in accordance with this Section 2.7.2; provided that, Allergan may revoke its Option Notice within thirty (30) days after such determination is made and, in such case, the relevant Option Indication will not be deemed a Permitted Indication hereunder, Allergan shall have no obligation to pay the relevant Option Exercise Fee and Allergan shall maintain its Option Indication Right with respect to such Option Indication.

(b)     The Option Indication Development Milestones shall become due and payable upon the achievement of the Development Milestones set forth in Section 7.2.1 by the first Licensed Product in an Option Indication on and subject to the same terms as are applicable to Licensed Products that are in Development for use to treat IBS; provided that the amount of such Development Milestones (a) shall be determined by [* * *] and (b) with respect to the first two (2) Development Milestones owed, [* * *]; provided further that, with respect to immediately foregoing clause (a), [* * *].

2.7.3.     In the event the Parties are unable to agree on the calculation of a Year 5 Forecast under Section 2.7.2 within thirty (30) days of delivery of an Option Notice, either Party may provide written notice to the other Party (an “ Expert Resolution Notice ”), and such matter shall be resolved by a final, binding determination by an independent Third Party expert mutually acceptable to the Parties (the “ Expert ”). Once the Expert has been selected, each Party shall, within ten (10) Business Days following selection of the Expert, provide the Expert and the other Party with a written statement setting forth its proposed calculation with respect to the applicable Year 5 Forecast with any such supporting documentation as such Party may determine to provide. The Expert shall, no later than ten (10) Business Days (or such other period as the Parties may agree) after the submission of the Parties’ written statements, determine the appropriate amount for the Year 5 Forecast for the purposes of Section 2.7.2; provided , that, the Expert may only choose one of the relevant Year 5 Forecast proposals submitted by the Parties without modification as the relevant Year 5 Forecast. The decision of the Expert shall be the sole, exclusive and binding remedy between the Parties with respect to any dispute with respect to the calculation of any Year 5 Forecast under Section 2.7. The costs of the Expert shall be shared by the Parties.

2.7.4.     Notwithstanding anything to the contrary set forth herein, Assembly shall not be prevented from directly or indirectly Developing or Commercializing a Microbiome-Based Compound in any Option Indication.

ARTICLE 3
GOVERNANCE

3.1.         Establishment of Joint Development Committee . Within thirty (30) days of the Effective Date, the Parties shall establish a Joint Development Committee (the “ Joint Development Committee ” or “ JDC ”) consisting of an appropriate number of representatives as may be agreed upon by the Parties, with an equal number of representatives designated by each Party. The initial members of the JDC will be nominated by the Parties promptly following the Effective Date. Such representatives shall be individuals suitable in seniority and experience and having delegated authority to make decisions of the JDC with respect to matters within the scope of the JDC’s responsibilities. The JDC shall operate in accordance with the provisions of Sections 3.2 to 3.8, and shall have no authority to alter, amend or waive the terms and conditions of this Agreement, including any payment conditions or terms, periods for performance, or obligations of the Parties. A Party may change one or more of its representatives serving on the JDC at any time upon written notice to the other Party; provided that such replacement is of comparable authority and scope of functional responsibility within that Party’s organization as the person he or she is replacing. At its meetings, the JDC shall discuss the matters described below and such other matters as are reasonably requested by either Party’s Alliance Manager. The JDC shall remain in effect until the Launch of all Licensed Products.

3.2.        Responsibilities of JDC . Subject to the limitations set forth in Section 3.6, the JDC shall perform the following functions:

3.2.1.      oversee and direct the conduct of the R&D Plan, including (a) selection, prioritization, and Optimization of Compound Candidates and Product Candidates and (b) on a Licensed Compound-by-Licensed Compound basis, conduct of Clinical Trials with respect to any Licensed Product containing a Licensed Compound until the Completion of the first POC Trial for a Licensed Product containing such Licensed Compound;

3.2.2.     allocate (and reallocate from time to time) activities between the Parties under the R&D Plan;

3.2.3.     review and comment on any development plan produced by Allergan in respect of a Licensed Compound pursuant to Section 4.1.2;

3.2.4.     facilitate communication between the Parties regarding all material activities performed by such Party under the R&D Plan, including preclinical and clinical Development of Compound Candidates and Product Candidates, under or in connection with the R&D Plan;

3.2.5.     review, and provide a forum for the Parties to discuss, any subcontractors through which Assembly intends to conduct any Development or manufacturing activities hereunder, together with the subcontracts related thereto;

3.2.6.     provide a forum for the Parties to discuss Allergan’s Development of any Licensed Compound or Licensed Product containing such Licensed Compound; and

3.2.7.     perform such other functions as are specifically designated for the JDC in this Agreement.

3.3.         Co-Chairs . Each Party shall designate one of its representatives on the JDC to co-chair the meetings for the JDC (each, a “ Co-Chair ”). The Co-Chairs shall, through and with the assistance of the Alliance Managers, coordinate and prepare the agenda for, and ensure the orderly conduct of, the meetings of the JDC. The Co-Chairs shall, through and with the assistance of the Alliance Managers, solicit agenda items from the JDC members and provide an agenda, along with appropriate information for such agenda, reasonably in advance of any meeting. Such agenda shall include all items requested by either Co-Chair for inclusion therein. In the event the Co-Chairs or another JDC member from either Party is unable to attend or participate in a meeting of the JDC, the Party whose Co-Chair or member is unable to attend may designate a substitute co-chair or other representative for the meeting.

3.4.         Meetings . The JDC shall meet at least quarterly, or more or less frequently if determined by the JDC, during the R&D Term and JDC meetings can be called at other times by agreement between the Parties for any reason. JDC meetings may be conducted by telephone, videoconference or in person. Any in-person JDC meetings shall be held on an alternating basis between Assembly’s and Allergan’s facilities, unless otherwise agreed by the Parties. Each Party shall be responsible for the cost of such Party’s own personnel and for its own expenses in attending such meetings and carrying out the other activities contemplated under this ARTICLE 3. As appropriate, the JDC may invite a reasonable number of non-voting employees, consultants and scientific advisors to attend its meetings as non-voting observers; provided , that such invitees are bound by confidentiality obligations at least as stringent as the provisions set forth herein. Each Party may also call for special meetings of the JDC to discuss particular matters requested by such Party. The Alliance Managers shall provide the members of the JDC with no less than ten (10) Business Days’ notice of each regularly scheduled meeting and, to the extent reasonably practicable under the circumstances, no less than five (5) Business Days’ notice of any special meetings called by either Party.

3.5.      Minutes . Minutes will be kept of all JDC meetings by one of the Co-Chairs of the JDC (or his or her designees) on a rotating basis and sent to all members of the JDC by e-mail for review and approval within thirty (30) days after each such meeting. The JDC shall formally accept the minutes of the previous meeting at or before the next meeting of the JDC. Minutes will be deemed approved unless any member of the JDC objects to the accuracy of such minutes by providing written notice to the other members of the JDC prior to the next meeting of the JDC. Minutes shall list action items and shall designate any issues that need to be resolved by the JDC or applicable resolution process. In the event of any objection to the minutes that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

3.6.      Decision Making within JDC .

3.6.1.     During the R&D Term, decisions of the JDC pursuant to Sections 3.2.1 to 3.2.2 shall be made by unanimous vote, with each Party having one (1) vote. In order to make any decision, the JDC must have present (in person or via telephone or videoconference) and voting at least one (1) representative of each Party.

3.6.2.     On a Licensed Compound-by-Licensed Compound basis, following the end of the Compound R&D Term for such Licensed Compound, (a) the JDC shall cease to have any decision-making authority with respect to such Licensed Compound and any Licensed Product incorporating such Licensed Compound, (b) Allergan shall make all decisions, including Development decisions, regarding such Licensed Compound and any Licensed Products incorporating such Licensed Compound and (c) the JDC shall serve solely as a forum for the Parties to discuss Allergan’s Development with respect to such Licensed Compound and any Licensed Products incorporating such Licensed Compound.

3.6.3.      In the event there is a [* * *] during the R&D Term, immediately upon [* * *], the JDC shall thereafter serve solely as a forum for the Parties to discuss, on a Compound Candidate-by-Compound Candidate basis, the Development of a Compound Candidate prior to such Compound Candidate becoming a “Licensed Compound” hereunder, and Allergan shall have the right to make all decisions previously subject to Assembly’s final decision making authority under Section 3.7 with respect to the Development of each of the Compound Candidates following completion of [* * *] activities with respect thereto.

3.7.      Committee Deadlocks . Subject to the limitations set forth in Section 3.6 and the terms of this Agreement, if during the R&D Term, the JDC cannot resolve a matter described in Section 3.6.1 within thirty (30) days, or such shorter time as may be determined by the Parties, after it begins discussing any such delegated matter (a “ Committee Deadlock ”), then the JDC shall escalate such Committee Deadlock to the Senior Officers for resolution by consensus. If following consideration by the Senior Officers for a period of up to ten (10) Business Days there is still no consensus, then, [* * *].

3.8.      Joint Patent Committee .

3.8.1.       Formation; Composition . Within thirty (30) days of the Effective Date, the Parties will establish a joint patent committee (the “ Joint Patent Committee ”) comprised of an equal number of representatives from each Party (or appointed representatives of an Affiliate of such Party) with sufficient seniority within the applicable Party to make decisions arising within the scope of the Joint Patent Committee’s responsibilities.

3.8.2.       Specific Responsibilities . The Joint Patent Committee will:

(a)     provide a forum for discussing the preparation, filing, prosecution, and maintenance of Product Only Patents, Product Related Patents, and other Licensed Compound Patents, as set forth in Sections 9.1.1 to 9.1.3;

(b)     comply with the procedures set forth in Section 9.1.6(c); and

(c)     perform such other functions regarding Patents included in the Licensed Compound Patents as appropriate, to further the purposes of this Agreement, in each case as agreed in writing by the Parties.

3.8.3.       Meetings . The Joint Patent Committee shall meet at least one (1) time per Calendar Year, or more or less frequently if determined by the Joint Patent Committee.

3.9.         Alliance Managers .

Each Party shall designate an individual to serve as the main point of contact for such Party to exchange information, facilitate communication and coordinate the Parties’ activities under this Agreement (each, an “ Alliance Manager ”). The Alliance Managers shall attend meetings (or designate an appropriate representative to attend meetings on the Alliance Manager’s behalf) between the Parties, including JDC meetings. Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party.

ARTICLE 4
R&D PLAN, DEVELOPMENT AND DILIGENCE REQUIREMENTS

4.1.         R&D Plan .

4.1.1.       General . As at the Execution Date, the Parties have agreed to a preliminary version of the R&D Plan attached as Schedule 1.153 . Assembly will prepare, and the Parties will review and mutually agree to, a final R&D Plan within forty-five (45) days after the Effective Date. The R&D Plan, among other things as further specified in this Section 4.1, will specify the scientific direction and activities of, and allocate responsibilities and resources between, the Parties in a manner consistent with this Agreement. The R&D Plan will be updated from time-to-time during the Term to ensure that it reflects the then-current scope of activities planned by the Parties, with more detail being provided for activities that are to be conducted in the near-term and that are less contingent on the achievement of anticipated results of Development. The R&D Plan will include the information referenced in the outline attached to the R&D Plan attached as Schedule 1.153 , and will include information relevant to the following topics and events, as and when such information is determinable:

(a)      activities conducted in connection with the Optimization (including the goals of and strain selection methodology and gene sequence analysis protocols used to select and validate Initial Candidate Compounds in such Optimization) of each Initial Compound Candidate for its proposed Permitted Indication and the conduct of a POC Trial for the Licensed Product containing the Initial Compound resulting from such Optimization activities for such Permitted Indication and delivery to Allergan of top-line results for such POC Trial;

(b)     the delivery of, and timing of such delivery of, potential New Compound Candidates by Assembly to Allergan as further described in Section 4.4, the Optimization (including the goals of and strain selection methodology and gene sequence analysis protocols used to select and validate New Candidate Compounds in such Optimization) of each New Compound Candidate for its proposed Permitted Indication and the conduct of a POC Trial for the Licensed Product containing the New Compound resulting from such Optimization activities for such Permitted Indication and delivery to Allergan of top-line results for such POC Trial;

(c)     the delivery of potential Backup Compound Candidates by Assembly to Allergan following Allergan’s request as described in Section 4.5, the Optimization (including the goals of and strain selection methodology and gene sequence analysis protocols used to select and validate Backup Candidate Compounds in such Optimization) of each Backup Compound Candidate for its proposed Permitted Indication and the conduct of a POC Trial for the Licensed Product containing the Backup Compound resulting from such Optimization activities for such Permitted Indication and delivery to Allergan of top-line results for such POC Trial.

In the event that Allergan desires to Develop a Compound Candidate or Licensed Compound for a Permitted Indication other than an Initial Indication, the R&D Plan shall also contain a R&D Budget (New Indications) as further described in Section 4.8.3 for the Development activities required to conduct such Development until completion of all activities related to the first POC Trial of a Licensed Product incorporating such Licensed Compound, including Completion of such POC Trial and completion of the final clinical study report for such POC Trial for a Licensed Product incorporating such Licensed Compound. The terms of, and activities set forth in, the R&D Plan shall at all times be designed to be in compliance with all applicable Laws and to be conducted in accordance with professional and ethical standards customary in the pharmaceutical industry, and, where applicable, each Party’s respective health care compliance policies and applicable standard operating procedures.

4.1.2.      Responsibilities . Each Party shall only be obliged to perform activities under the R&D Plan if, and solely to the extent, expressly set forth and allocated to such Party in the R&D Plan or this Agreement. On a Permitted Indication-by-Permitted Indication basis, neither Party will undertake any material, ongoing Development activities in connection with any Compound Candidate or Licensed Compound prior to the Completion of the first POC Trial for such Licensed Compound, in such Permitted Indication, that are not provided for or consistent with the then-current R&D Plan. The JDC shall be responsible for reviewing and making recommendations in respect of any updates or amendments to the R&D Plan. Any amendments or modifications to the R&D Plan shall require the mutual agreement of the Parties. For the sake of clarity, from and after the Completion of a POC Trial for a Licensed Product, the R&D Plan shall not apply to, or govern in any way, Allergan’s Development efforts for such Licensed Product or the Licensed Compound incorporated into such Licensed Product. Following the Completion of a POC Trial for a Licensed Product, Allergan’s Development efforts, if any, in respect of such Licensed Product or the Licensed Compound incorporated in such Licensed Product for any Permitted Indication shall be set forth in a high-level development plan and biannual updates thereto produced by Allergan and presented to the JDC solely for review and comment.

4.2.         Compound R&D Term . On a Licensed Compound-by-Licensed Compound and Permitted Indication-by-Permitted Indication basis, the period starting on the Effective Date and ending on the earliest of (a) the Completion of the first POC Trial for a Licensed Product incorporating such Licensed Compound for such Permitted Indication, or earlier termination, of the Development activities for such Licensed Compound under the R&D Plan for such Permitted Indication pursuant to this Agreement and (b) early termination of this Agreement in accordance with ARTICLE 10 shall be the “ Compound R&D Term ” for such Licensed Compound for such Permitted Indication. For clarity, any Development activities conducted under the R&D Plan with respect to a Compound Candidate or Product Candidate shall be deemed to have occurred during the Compound R&D Term for the resultant Licensed Compound stemming from such Development.

4.3.         Development Efforts During the R&D Term .

4.3.1.     During the R&D Term, each Party shall devote the FTEs as designated pursuant to the R&D Plan, which FTEs shall be appropriately qualified research and development personnel possessing at least the level of skill and experience that such Party’s personnel engaged in discovery, research and other Development activities for such Party’s other programs possess. [* * *]. Each Party will conduct its activities under the R&D Plan in accordance with good scientific standards and practices and in compliance in all material respects with the requirements of GLP, GCP and all applicable Laws, including those regarding environmental, safety and industrial hygiene, quality assurance and quality control (including data integrity), standards for pharmacovigilance practice, and all requirements relating to the protection of human subjects. Each Party shall maintain laboratories, offices and all other facilities reasonably necessary to carry out the activities to be performed by it pursuant to the R&D Plan. In conformity with standard pharmaceutical and biotechnology industry practices and the terms and conditions of this Agreement, each Party shall prepare and maintain, or shall cause to be prepared and maintained, complete and accurate laboratory notebooks and other written records, accounts, notes, reports and data with respect to activities conducted pursuant to the R&D Plan and, upon such other Party’s written request and at its expense, will send legible copies of relevant portions of the aforesaid to such Party in such form(s) as such Party may reasonably request.

4.3.2.     When conducting Development under the R&D Plan to identify proposed Compound Candidates for a particular Permitted Indication, for clarity, in addition to any other potential compounds that Assembly may identify under the R&D Plan, Assembly will provide to Allergan, as proposed Compound Candidates, [* * *] that Assembly or its Affiliates have found to demonstrate, in the aggregate, characteristics that [* * *] most likely to have a favorable safety and efficacy profile for the treatment or maintenance of remission of such Permitted Indication. After selection of a proposed Compound Candidate, Assembly shall work to Optimize such Compound Candidates in accordance with the R&D Plan.

4.3.3.     During the applicable Compound R&D Term, subject to Allergan’s final decision-making authority set forth in Section 3.6 if applicable, Assembly shall be responsible for [* * *] and preclinical research of such Compound Candidate and Development of such Compound Candidate and resultant Licensed Compound through the completion of all activities related to the first POC Trial of a Licensed Product incorporating such Licensed Compound, including Completion of such POC Trial and completion of the final clinical study report for such POC Trial for such Licensed Product; provided that, notwithstanding anything to the contrary in this Agreement, an IND for a Product Candidate in a Permitted Indication may only be filed with a Regulatory Authority with the mutual consent of the Parties, such consent to be given or withheld in good faith.

4.4.        Development of New Compounds .

4.4.1.     Assembly shall use Commercially Reasonable Efforts to provide proposed New Compound Candidate(s) for selection by Allergan, including summaries of data, research, analyses, rationale for such selection and any other information relating to such proposed New Compound Candidate(s) required by the R&D Plan.

4.4.2.     Allergan shall have the right to select, in its sole discretion, up to two (2) candidates as New Compound Candidates for Optimization, one for the Initial Indication of irritable bowel syndrome with constipation (IBS-c) or mixed irritable bowel syndrome (IBS-m) and one for the Initial Indication of irritable bowel syndrome with diarrhea (IBS-d) or mixed irritable bowel syndrome (IBS-m) and, upon such selection, each such candidate will be deemed a New Compound Candidate hereunder. If Allergan, in its sole discretion, does not select two (2) candidates proposed by Assembly as New Compound Candidates for an Initial Indication, Assembly shall use Commercially Reasonable Efforts to provide other candidates for such New Compound for such Initial Indication reasonably thereafter. For clarity, the Development Costs incurred by Assembly in providing additional candidates to Allergan shall be included within and subject to the limitation on total Development Costs to be incurred by Assembly as set forth in Section 4.8.2(a). In the event Allergan does select a candidate to be a New Compound Candidate, Assembly shall submit to the JDC (which shall be re-established if disbanded pursuant to this Agreement at the time of such candidate selection), for approval by mutual agreement of the Parties, a proposed amendment to the R&D Plan providing for the activities for the Development (including Optimization) of such New Compound Candidate and resultant New Compound (and products incorporating each of such) for the applicable Initial Indication through the Completion of the first POC Trial for a Licensed Product incorporating such New Compound.