EXHIBIT 10.1

 

MASTER DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

 

THIS MASTER DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the “Agreement”) is
made as of 23rd December, 2013 (the “Effective Date”), by and between Arno
Therapeutics, Inc., having a place of business at 200 Route 31 North, Suite 104,
Flemington, NJ 08822 (“ARNO”), and Leica Biosystems Newcastle Ltd., having a
place of business at Balliol Business Park West, Benton Lane, Newcastle upon
Tyne, United Kingdom NE12 8EW (“LBS”).

 

Whereas, ARNO is engaged in the business of the research, development and
commercialization of pharmaceutical products;

 

Whereas, LBS is a diagnostic product company with activities in the field of
development, production and sale of in vitro diagnostic products; and

 

WHEREAS, the Parties now desire to enter into this Agreement enabling LBS to
perform for ARNO multiple Projects as may be agreed by the Parties during the
Term in the field of developing diagnostics to be used in association with
certain pharmaceuticals in development by ARNO.

 

now, therefore, in consideration of the foregoing and the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound hereby, hereby agree as follows.

 

1Definitions

 

The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

 

1.1“Additional Work” means activities, work, material and studies (i) required
by the FDA or (ii) requested by ARNO and agreed to by LBS, that are outside the
work described in the then-current Project Agreement for a Project and that are
not included in the cost overview included in the Project Agreement.

 

1.2“Affiliate” means any Person that (directly or indirectly) through one or
more intermediaries, controls, is controlled by, or is under common control with
the Party specified. For the purposes of this definition, “control” means the
possession, direct or indirect, of the power to cause the direction of the
management and policies of a Person, whether through ownership of fifty percent
(50%) or more of the voting securities of such Person, by contract or otherwise.

 

1.3“Analytically Validated Product” means an analytically validated version of
the Product developed by LBS under this Agreement in accordance with the
applicable Project Agreement that (a) contains all reagents, including positive
and negative control materials (if required), needed to perform the Assay(s),
(b) is manufactured under GMP/GCP/GLP or in compliance with QSR, (c) is labeled
“Investigational Use Only, the performance characteristics of this product have
not been established” or “For Performance Evaluation” and (d) for which all
validation testing required under the Project Agreement has been completed, with
the exception of clinical validation studies.

 

 

 

 

1.4“Approval” and “Approved” means, with respect to the Product in the
applicable regulatory jurisdiction, approval (including the clearance,
certification or non-objection, as applicable) from the applicable Regulatory
Authorities (or otherwise in compliance with all relevant applicable laws in
regulatory jurisdictions where no approval is required) necessary and sufficient
for the manufacture, distribution, use and sale of the Product in such
jurisdiction, including receipt of pricing and reimbursement approvals, where
applicable.

 

1.5“Approval Application” means an application or submission for Approval
required by the Regulatory Authority in the applicable country or other
regulatory jurisdiction.

 

1.6“Approval Delay” means a situation where it is not possible, under applicable
law and/or approval systems of the relevant Regulatory Authorities and/or
otherwise for reasons beyond the reasonable control of the Parties using
commercially reasonable efforts, for the Product to be Approved in advance of or
simultaneously with the Approval of the Drug.

 

1.7“Assay” means the assay for the measurement of one or more Biomarkers.

 

1.8“Assay User Requirements” means the requirements for the design, performance,
manufacturing, regulatory approval and commercial distribution of the Assay and
Product as defined in the applicable Project Agreement. These requirements are
high-level and driven by business needs. For clarity, they are not “Design Input
Requirements” as defined by the QSRs or in ISO standards.

 

1.9“Biomarker” means a biomarker (i.e., the protein, RNA or DNA target) measured
by the Assay and Product as specified in the Project Agreement.

 

1.10“ARNO Background IP” has the meaning set forth in Section 10.1.

 

1.11“ARNO Claims” has the meaning set forth in Section 14.1.

 

1.12“ARNO Collaborator” means any Third Party that is working with ARNO with
respect to an Assay or Product, and with whom LBS desires to work in accordance
with and as specified in the Project Agreement. In no event shall a ARNO
Collaborator be a LBS Competitor without LBS’s written consent.

 

1.13“ARNO IP” means the ARNO Know-How and any Intellectual Property Rights
controlled by ARNO, including Know-How and any Intellectual Property Rights
relating to the Drug, and the ARNO Material, provided that ARNO IP shall not
include the Project Data or any LBS IP.

 

1.14“ARNO Market Countries” means the countries and regulatory jurisdictions
identified in the Project Agreement where ARNO is planning to develop and market
the Drug as of the applicable PA Effective Date.

 

1.15“ARNO Material” means any tangible materials and reagents (including without
limitation antibodies, cell lines and Patient Samples) provided by or on behalf
of ARNO to LBS for use in the Project.

 

1.16“BLS” has the meaning set forth in Section 9.1.

 

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1.17“Change of Control” means with respect to a Party (a) any sale, exchange,
transfer, or issuance to or acquisition in one transaction or a series of
related transactions by one or more Third Parties of shares representing more
than fifty percent (50%) of the aggregate ordinary voting power entitled to vote
for the election of directors represented by the issued and outstanding stock of
such Party or any Affiliate that directly or indirectly controls such Party,
whether such sale, exchange, transfer, issuance or acquisition is made directly
or indirectly, by merger or otherwise, or beneficially or of record, but
excluding the issuance of shares in a financing transaction; (b) a merger or
consolidation under relevant applicable laws of the applicable Party or an
Affiliate with a Third Party in which the shareholders of such Party or
Affiliate that directly or indirectly controls the applicable Party immediately
prior to such merger or consolidation do not continue to hold immediately
following the closing of such merger or consolidation at least fifty percent
(50%) of the aggregate ordinary voting power entitled to vote for the election
of directors represented by the issued and outstanding stock of the entity
surviving or resulting from such consolidation; or (c) a sale or other
disposition of all or substantially all of the assets of such Party to one or
more Third Parties in one transaction or a series of related transactions.

 

1.18“Clinical Diagnostic Product” means the Analytically Validated Product
and/or Prototype Product, as applicable, ordered by ARNO for use in Clinical
Trials.

 

1.19“Clinical Trial” means a clinical investigation of the Drug undertaken by or
in collaboration with ARNO under this Agreement to obtain information relating
to patient outcomes and/or patient selection for therapy with the Drug, from
which Patient Samples and Patient Data are to be obtained and tested using the
Product for purposes of supporting the development of the Product.

 

1.20“Commercialization Activities” has the meaning as set forth in Section 9.3.

 

1.21“Committee” means the JSC, JDC and/or the JCC.

 

1.22“Companion Diagnostic” means an approved in vitro diagnostic that is
designed, intended and labeled to assess a Biomarker, the status of which may be
used to determine whether a patient will or will not receive; and/or respond
favorably to a Drug or other medical treatment, or a degree to which a patient
will respond to a Drug or other medical treatment, or an in vitro diagnostic
without the use of which said Drug or said other medical treatment cannot be
prescribed under FDA rules and regulations.

 

1.23“Confidential Information” means all confidential, proprietary information
and materials received by or made available to either Party from or by or on
behalf of the other Party pursuant to or in connection with this Agreement
(including any applicable Project Agreement), including any such information
that is communicated by one Party to the other Party in oral, written, graphic,
electronic or other form. The terms of this Agreement (including any Project
Agreements) are deemed to be the Confidential Information of both Parties.

 

1.24“Contractor” has the meaning set forth in Section 4.7.

 

1.25“Defaulting Party” has the meaning set forth in Section 13.2.

 

1.26“Deliverables” means those items set forth in this Agreement or in a Project
Agreement to be delivered in connection with a Project.

 

1.27“Deviation” means the process used to document a departure from the
documented Device Master Record.

 

1.28“Designated Laboratory” has the meaning set forth in Section 7.2.

 

1.29“Device Master Record” means the master control record prepared by LBS for a
medical device which shall include, or refer to the location of, the following
information to the extent required under the Project Agreement: (a) device
specifications including appropriate drawings, composition, formulation,
component specifications, and software specifications; (b) production process
specifications including the appropriate equipment specifications, production
methods, production procedures, and production environment specifications; (c)
quality assurance procedures and specifications including acceptance criteria
and the quality assurance equipment to be used; (d) packaging and labeling
specifications, including methods and processes used; and (e) installation,
maintenance, and servicing procedures and methods.

 

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1.30“Drug” means any ARNO proprietary therapeutic agent or ARNO proprietary
therapeutic product.

 

1.31“510(k)” means premarket notification submission made to the FDA for a
medical device in accordance with the U.S. Food, Drug and Cosmetic Act and the
applicable regulations including 21 CFR 807.

 

1.32“FDA” means the United Stated Food and Drug Administration.

 

1.33“For-cause Inspection” means compliance inspections which are done to
investigate a Specific Problem that has come to the attention of ARNO or a
Regulatory Authority.

 

1.34“FTE” means the equivalent of the work of one qualified LBS employee (or
employee of a Contractor) working on a dedicated full time basis in performing
work in support of the Project during an hour. The LBS FTEs will be comprised of
full time LBS employees (or employees of Contractors) who are appropriately
qualified to perform the Project activities for which LBS is responsible.

 

1.35“FTE Rate” has the meaning set forth in the SOW.

 

1.36“FTE Payment” has the meaning set forth in the SOW.

 

1.37“GCP” and “GLP” mean, respectively, the current good clinical practice
regulations set forth at 21 CFR Part 50 and 312 and the current good laboratory
practice regulations set forth at 21 CFR Part 58, each as amended from time to
time, and other FDA regulations and guidelines issued under 21 CFR 10.90
otherwise relating to the conduct of laboratory studies for drug products
regulated by the FDA.

 

1.38“GMP” shall mean Good Manufacturing Practices as defined in 21 CFR Parts 210
and 211, and Parts 600 through 680.

 

1.39“IDE” means an investigational device exemption for a medical device as
described in 21 CFR Part 812.

 

1.40“Improvement(s)” means any enhancement, invention or discovery which
constitutes an improvement to the subject matter of an Intellectual Property
Right or Know-How.

 

1.41“Indemnifying Party” and “Indemnified Party” has the meaning set forth in
Section 14.2.

 

1.42“Indication” means the statement of the indication of use of the Product as
specified in the applicable Project Agreement.

 

1.43“Intellectual Property Rights” means the rights and interests in and to
Patents and any other intellectual property rights.

 

1.44“Intended Use” means the statement of the intended use of use of the Product
as specified in the applicable Project Agreement.

 

1.45“ISO” means International Organization for Standardization.

 

1.46“Joint Commercialization Committee” or “JCC” has the meaning set forth in
Section 8.3.

 

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1.47“Joint Development Committee” or “JDC” has the meaning set forth in Section
5.2.

 

1.48“Joint Steering Committee” or “JSC” has the meaning set forth in Section
5.1.

 

1.49“Know-How” means knowledge, scientific information, formulae, processes,
plans, technical information, new product information, test procedures,
experience, data, technology, design information and other information and
knowledge, regardless of whether or not patentable. The fact that a part of a
compilation of data is in the public domain shall not prevent the compilation of
data as such, or any one or more of the other elements of the compilation from
being Know-How.

 

1.50“Labeling” means the statement of the Intended Use of a Product, the
Indication and/or the labeling for the Product in any Regulatory Submission or
otherwise proposed to or by the Regulatory Authority in connection with any
Regulatory Submission for the Product. In a PMA or 510(k), the Labeling includes
the “Indications for Use” statement.

 

1.51“LBS Background IP” has the meaning set forth in Section 10.3.

 

1.52“LBS Competitor” means, for purposes of this Agreement, such entities as can
reasonably be regarded as direct participants in the field of development,
production and sale of in vitro diagnostics products including, but not limited
to, the following entities or their respective Affiliates or any acquirer of the
same: F. Hoffmann-La Roche Ltd. (and especially its Roche Diagnostics division);
Ventana Medical Systems, Inc.; Agilent Technologies, Inc.; Biocare Diagnostics
Ltd.; General Electric Company (and especially its GE Healthcare division);
Becton, Dickinson and Company (and especially its BD Biosciences segment); and
Abbott Laboratories (and especially the Abbott Molecular business).

 

1.53“LBS IP” means the LBS Know-How and any Intellectual Property Rights
(including Patents) controlled by LBS, including LBS Know-How and any LBS
Intellectual Property Rights relating to the Product (including, but not limited
to, patents relating to or arising from the Product), a LBS Companion Diagnostic
and/or LBS’s diagnostic platforms and workflow solutions, the Specifications,
and the Process(es), provided that LBS IP shall not include the Project Data or
any ARNO IP.

 

1.54“LBS Know-How” means the Know-How controlled by LBS, including Know-How
relating to the Product and/or LBS’s diagnostic platforms and workflow
solutions, the Specifications, and the Process(es).

 

1.55“LBS Material” means any tangible materials, reagents and tissue samples
that is proprietary to LBS and is provided by LBS for use in the Project.

 

1.56“Milestone” means the performance of certain specified services, delivery of
certain Deliverables or achievement of a stated result.

 

1.57“Milestone Fee” means the fee payable upon completion of a Milestone
pursuant to the terms of a Project Agreement.

 

1.58“Non-Defaulting Party” has the meaning set forth in Section 13.2.

 

1.59“Party” means ARNO and LBS, individually.

 

1.60“Parties” means ARNO and LBS, collectively.

 

1.61“Project Term” has the meaning set forth in the applicable Project
Agreement.

 

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1.62“Patents” means (a) patents and patent applications in any country or
jurisdiction, (b) all direct and indirect priority applications, divisionals,
continuations, and continuations-in-part of any of the foregoing, and (c) all
patents issuing on any of the foregoing patent applications; together with all
registrations, reissues, renewals, re-examinations, confirmations, supplementary
protection certificates and extensions, and applications therefor, of any of
(a), (b) or (c).

 

1.63“Patient Data” means relevant de-identified and/or anonymous patient medical
information associated with each Patient Sample. All such Patient Data shall be
ARNO Confidential Information.

 

1.64“Patient Sample” means any human tissue, blood, serum or other sample for
use in the Project under the Agreement, including but not limited to such human
samples from a Clinical Trial.

 

1.65“Permitted Recipients” has the meaning set forth in Section 11.1.

 

1.66“PMA” means premarket approval application (including a supplement thereto)
made to the FDA for a medical device in accordance with section 515 of the U.S.
Food, Drug and Cosmetic Act and the applicable regulations including 21 CFR Part
814.

 

1.67“Process” means the process by which LBS will manufacture the Clinical
Diagnostic Products (including the sampling plans and process descriptions used
to manufacture such Clinical Diagnostic Products).

 

1.68“Product” means a system containing all or substantially all reagents and
software specified in the Project Agreement to be developed by LBS or any LBS
Affiliate for the Intended Use for the Indication defined in a Project Agreement
in connection with the instrument platform, software and results reporting
system sold by or on behalf of LBS to perform the Assay.

 

1.69“Project” means the services to be performed by LBS for ARNO in connection
with the development of a Product as described in each Project Agreement entered
into by the Parties pursuant to this Agreement.

 

1.70“Project Agreement” means any given Project Proposal and the related Project
Specification pursuant to and subject to this Agreement setting forth a Project,
each executed by each Party.

 

1.71“Project Data” means any data, documentation and technical or scientific
information (whether or not of clinical relevance) resulting from or arising in
connection with the Project.

 

1.72“Project Specification” means the particular details of a Project pursuant
to and subject to this Agreement, setting forth a Project, including
Deliverables and where applicable Milestones, and Milestone Fees. Each Project
Specification shall be substantially in the form attached as Attachment 1.

 

1.73“Project Proposal” means a proposal requested by ARNO and provided by LBS
for a Project.

 

1.74“Prototype Product” means the prototype version of the Assay adapted on a
LBS platform.

 

1.75“Providing Party” has the meaning set forth in Section 11.1.

 

1.76“QSR” means Quality Systems Regulation, which are cGMP regulations for
medical devices, as set forth in 21 CFR Part 820 including applicable national
and international standards ISO 9001 and/or ISO 13485:2003, ISO 14971:2007, and
ISO 15197:2003, as the same may be amended from time to time.

 

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1.77“Regulatory Authority” means any and each governmental authority, including
without limitation the FDA, and any division thereof, that has responsibility
for granting any licenses or approvals or granting pricing and/or reimbursement
approvals necessary for the marketing and sale of a Product in any country. With
respect to the Drug, Regulatory Authority shall also mean any and each
governmental authority, including for example and without limitation, the FDA in
the U.S. and the European Medicines Agency in Europe, that has responsibility
for granting any licenses or approvals or granting pricing and/or reimbursement
approvals necessary for the marketing and sale of a Drug in any country.

 

1.78“Regulatory Submission” means any submission to or filing with any
Regulatory Authority relating to Approval for a Product or Drug, including but
not be limited to IDE submissions and Approval Applications.

 

1.79“Specific Problem” means a significant problem or concern with respect to
the manufacture of the Product that may lead to a field correction, recall
and/or market withdrawal of the Product and/or a disruption or shut down of the
production of the Product.

 

1.80“Specifications” means the final specifications for the Clinical Diagnostic
Product covering the design, manufacture, composition, packaging and/or quality
control of the Clinical Diagnostic Product that are set forth in the applicable
Project Agreement.

 

1.81“Statement of Work” or “SOW” shall mean that certain document outlining the
work activities, timelines and rates for the Project.

 

1.82“Term” has the meaning set forth in Section 13.1.

 

1.83“Third Party” means an individual or entity of any nature other than the
Parties or their Affiliates.

 

1.84“Tissue Samples” means any human tissue sample provided by or for ARNO to
LBS under the Agreement, including but not limited to human tissue samples from
a Clinical Trial.

 

2.Overview. Under this Agreement, from time to time, ARNO may request that LBS
perform certain research, development and/or commercial activities, in which
case it will send a reasonably detailed request for such activities. The Parties
will meet to agree whether it makes sense to perform such activities and, upon
written request from ARNO, LBS will develop a reasonably detailed Project
Proposal for the performance of the activities. If ARNO notifies LBS of its
desire to initiate a Project, the Parties will work in good faith to develop and
agree on a Project Agreement in accordance with Section 3 which will include the
Project Proposal. The primary purpose of each Project will be related to the
development, clinical validation, registration, manufacture and/or ultimate
commercialization of a Product for use as an aid in (1) identifying potential
responders to ARNO Drugs and/or (2) the selection of patients for treatment with
ARNO Drugs, and such other purposes as may be agreed by the Parties.

 

3.Project Agreements.

 

3.1          Project Agreements. Each Project Agreement will be agreed upon by
the Parties on a Project-by-Project basis, and may set forth:

 

(a) the Deliverables of the Project,

 

(b) the SOW,

 

(c) any reports required of either Party,

 

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(d) in the case of FTE-based payments by ARNO to LBS, the projected FTE-hours to
be incurred by LBS in the performance of the Project,

 

(e) in the case of Milestone-based payments by ARNO to LBS, the Milestone Fees
and Milestones, including definitions thereof, in the performance of the
Project,

 

(e) draft Specifications and Device Master Record, if applicable, for the
Deliverables, including with respect to labeling requirements,

 

(f) testing requirements for the pre-Approval versions of the Deliverables,

 

(g) a description of any ARNO Materials to be used by LBS in the performance of
the Project (as applicable),

 

(h) any projected other project costs (as applicable),

 

(i) identity of any Contractors to be used by LBS in the performance of the
Project and description of work to be carried out by such Contractor (as
applicable),

 

(j) as applicable, identity of any ARNO Collaborators to be consulted with by
LBS in the performance of the Project, the number of hours of consultation
required and the dates on which LBS is required to meet with such ARNO
Collaborators,

 

(k) any modifications of this Agreement, as applied to the particular Project
(but not applied any other Project) expressly agreed to in writing by the
Parties (as applicable), and

 

(l) any other matters that the Parties agree are pertinent to the Project (as
applicable).

 

3.2          The Project Agreement will be in the form attached hereto as
Attachment 1. The Project Agreement for each Project will only become effective
when signed by both Parties, and will then become effective in accordance with
its terms, subject to the terms and conditions of this Agreement, and will then
be incorporated herein and become a part of this Agreement.

 

4. Development

 

4.1          Overall Objectives and Conduct. The Parties will use reasonable
efforts to carry out their obligations under this Agreement and any given
Project Agreement(s). Subject to the obligation to use reasonable efforts and
the other terms and conditions of this Agreement, due to the scientific nature
of any given Project, neither Party warrants the feasibility and successful
completion of any Project.

 

4.2          Transfer of ARNO Materials and ARNO Know-How. To the extent
necessary or relevant for LBS’s performance of the work according to the Project
Agreement, ARNO shall provide to LBS certain ARNO Materials and ARNO Know-How in
ARNO’s possession and control as of the applicable Project Agreement Effective
Date for use by LBS in performing any given Project on or before the dates
required under the SOW. As applicable, ARNO shall be responsible for providing
the Patient Samples for use in the Project. LBS agrees that (a) it shall not use
such ARNO Materials and ARNO Know-How for any purpose other than exercising any
rights granted to it or reserved by it hereunder or under a relevant Project
Agreement; (b) it shall not transfer any such ARNO Materials and ARNO Know-How
to any Third Party without the prior written consent of ARNO, except as
expressly permitted hereby; (c) ARNO shall retain full ownership of all such
ARNO Materials and ARNO Know-How; and (d) upon the expiration or termination of
this Agreement or the relevant Project Agreement, LBS shall, at the instruction
of ARNO, either destroy or return any such ARNO Materials and ARNO Know-How
which are not the subject of the grant of a continuing license.

 

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4.3          Performance by LBS. LBS will use reasonable efforts to perform and
complete its obligations under any given Project Agreement, including in
accordance with the applicable SOW, and the terms and conditions of this
Agreement. LBS will perform each Project in accordance with the relevant
applicable laws. LBS will provide the materials (other than the ARNO Materials
provided by ARNO), equipment and personnel specified in the Project Agreement
(subject to payment by ARNO of the payments in accordance with Article 9).

 

4.4          Disclosure of Project Data. LBS will report to ARNO all Project
Data resulting from the performance of the Project together with other related
information that is reasonably necessary to verify and evaluate the Project Data
to the extent defined in the applicable Project Agreement. Such Project Data and
other related information will be disclosed and delivered to ARNO as they are
generated at joint Project review meetings. The Parties will participate in
joint Project review meetings, either in person or by teleconference or
videoconference, on a monthly basis (or more or less frequently as agreed to by
the Parties) or at other times as deemed necessary by the Parties.

 

4.5          Reports. LBS will provide to ARNO a written report in English
describing the Project Data resulting from the performance of each sub-part of
the SOW within fifteen (15) business days of completion of such sub-part.

 

4.6          Storage and Maintenance of Data. During the Project and upon
completion of the Project, LBS will store and maintain all Project Data in
accordance with relevant applicable laws. In the event that ARNO requires access
to the Project Data, LBS will provide ARNO appropriate access upon reasonable
notice by ARNO.

 

4.7          LBS Contractors. In accordance with the applicable Project
Agreement (or as approved by the JSC), certain work for which LBS is responsible
in furtherance of the Project may be performed by certain third party
contractors (“Contractors”). LBS will notify ARNO through the JDC in advance of
using any Contractors (and the specific Names and details) in the performance of
activities for the Project. LBS will at all times be responsible for the
performance of any Contractor. LBS will enter into a written agreement with each
Contractor that includes confidentiality obligations at least as stringent as
the obligations set forth in Section 11 (each, a “Contractor Agreement”).

 

5. Governance

 

5.1          Joint Steering Committee. The Parties will form a committee (the
“Joint Steering Committee” or “JSC”) comprised of one (1) representative of each
Party designated by such Party. Each Party will be free to replace its
representative to the JSC with a new representative, upon prior written notice
to the other Parties. Decisions of the JSC shall be by consensus, with each
Party having one (1) vote. If the JSC is unable to achieve consensus on an issue
within five (5) business days, either Party may escalate the issue to the
Alliance Managers (as defined in article 15.11 of this Agreement) for
resolution. The SOW will be equitably adjusted to reflect any delays arising
from the failure of the JSC to make decisions in a timely manner. The role and
responsibilities and decision-making authority of the JSC is to generally manage
and optimize the collaboration between the Parties to implement the Agreement
and to oversee preparation of the requests, Project Proposals and Project
Agreements as set forth in Section 3 and be solely responsible for the approval
of the completion of Milestones under any Milestone-base Project. The JSC will
have meetings as often as is necessary and is requested by one of the Parties
with meeting intervals no longer than three (3) months. Draft minutes of the
meetings of the JSC will be generated and circulated to its members within two
(2) weeks following each JSC meeting and such minutes will be finalized by the
JSC promptly thereafter. The JSC shall not have the authority to amend this
Agreement but has the authority to amend Project Agreements to the same extent
as the JDC as stated in Section 5.3.

 

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5.2          Joint Development Committee. The Parties will form a joint
development committee (the “Joint Development Committee” or “JDC”) for each
Project comprised of two (2) representatives of each Party, to be designated by
such Party. Each Party will be free to replace its representative(s) to the JDC
with a new representative from a member of its development team, lifecycle team
or project team with appropriate qualifications upon prior written notice to the
other Party. Decisions of (including approval by) the JDC shall be by consensus,
with each Party having one (1) vote. Each member of the JDC will use reasonable
efforts to reach consensus as promptly as possible. If the JDC is unable to
achieve consensus on an issue within five (5) business days, either Party may
escalate the issue to the JSC for resolution. The SOW will be equitably adjusted
to reflect any delays arising from the failure of the JDC to make decisions in a
timely manner. The JDC will have the role and responsibilities and
decision-making authority as set forth below. The JDC will have meetings as
often as is necessary and is requested by either of the Parties with meeting
intervals no longer than one (1) month. Draft minutes of the meetings of the JDC
will be generated and circulated to its members within two (2) weeks following
the JDC meeting and such minutes will be finalized by the JDC promptly
thereafter. The JDC shall not have the authority to amend this Agreement but has
the authority to amend Project Agreements as stated in Section 5.3.

 

5.3          Responsibilities of the Joint Development Committee. The JDC will:
(a) review and report on the progress of the Project including individual
Milestones, and ensure that the Project proceeds according to the Project
Agreement; (b) ensure the cooperation and participation of the Parties in the
performance of the Project and review the recommendations, plans and other
activities in support of the Project; (c) coordinate the activities of the
Parties to assure that the Project is aligned with Arno’s intended use of the
Deliverables; (d) in the case of an Approval Delay, cooperate to resolve such
Approval Delay; and (e) approve amendments to the applicable Project Agreement
(including the applicable SOW) and oversee regulatory activities with respect to
the Product as described further below.

 

The following decisions require approval of the JDC (which approval will not be
unreasonably withheld):

 

(i)         approval of the Assay User Requirements for the Deliverables (as
applicable);

 

(ii)        selection of the primary antibody or reagents (as applicable) for
the Deliverables and any standards for the Deliverables;

 

(iii)        the Labeling (including but not limited to the “Indication for Use”
statement) to be submitted in a Regulatory Submission or otherwise to be
presented to a Regulatory Authority for the Product (as applicable);

 

(iv)       approval of the Regulatory Submission for the Deliverables (including
any such modules thereof) that relate to the Intended Use or Indication, or that
relate or refer to the Drug) (as applicable);

 

(v)        approval of Other Product Development Costs; and

 

(vi)       any changes to the SOW including any changes to the Project Agreement
(and corresponding FTE Payments or Milestone Fees, as applicable).

 

If the JDC, JSC and Alliance Managers are unable to reach an agreement regarding
the Approval Application or Labeling, if applicable, then LBS shall have final
authority with respect to such decision.

 

6.         Clinical Trials

 

6.1        Conduct of Clinical Trials and Availability of Patient Samples. ARNO
shall be responsible at no cost to LBS for conducting the Clinical Trials
required for a Project, as applicable (including Clinical Trials for any
clinical validation of the Product), and providing all Patient Samples and
Patient Data necessary for the conduct of the Project, provided however, that
ARNO will have the sole discretion as to whether to conduct any such Clinical
Trials, and the extent of such Clinical Trials, or otherwise whether to obtain
such Patient Samples and Patient Data.

 

6.2        Clinical Trials and labeling for the Drug. For the avoidance of
doubt, LBS, the JDC, the JSC and the Alliance Managers will have no authority
over decisions regarding the Clinical Trials, labeling and other regulatory
activities and decisions for the Drug. ARNO will have sole responsibility and
authority with respect to such activities and decisions.

 

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6.3         Supply of Clinical Diagnostic Product for Clinical Trials. LBS will
manufacture and supply to ARNO’s Designated Laboratory(s) the Clinical
Diagnostic Product in the quantity specified in the Project Agreement for use in
Clinical Trials for the Drug (in accordance with Section 8.2.1 and the clinical
product request agreement, attached to this Agreement as and hereinafter
referred to as: “Clinical Product Request Agreement”) .

 

7.          Regulatory Matters

 

7.1        Access and Exchange of Information and Data.

 

(a)        LBS will provide to ARNO such information and data (including
performance data for a Product, if applicable) that it possesses or controls and
is deemed reasonably necessary to permit ARNO to obtain Approval and other
permissions or authorizations from Regulatory Authorities for or associated with
the use of the Drug with the Products, and will provide reasonable assistance to
ARNO, which costs shall be borne by ARNO provided that they are included in the
costs overview in the Project Agreement. ARNO shall consult with LBS on any
technical and/or scientific discussions of the diagnostic results obtained with
the Product with external advisory boards.

 

(b)        As reasonably requested by LBS for it to perform and plan its
obligations under each Project Agreement, and obtain Approval of the Product
from Regulatory Authorities and as otherwise required to provide services
relating to Products and Companion Diagnostics, ARNO shall provide LBS with (i)
information from the applicable Clinical Trial protocols that include the use of
the Product and related documents (including, for example, subject to Section
7.1(c), informed consent forms and the pathology reporting form or any other
instructions that will be sent to the Designated Laboratory(s)); (ii)
instructions to the Designated Laboratory(s) reasonably necessary and
appropriate to facilitate the collection under the Clinical Trial protocol of
information which is required by the Regulatory Authorities for obtaining
Approval for the Product; and (iii) information and data (which may include
performance data for the Product) that ARNO possesses and controls, that is
necessary and relevant for LBS to obtain Approval and other permissions or
authorizations from Regulatory Authorities for or associated with the use of the
Product with the Drug, and will provide reasonable assistance to LBS in
connection therewith.

 

(c)        ARNO shall de-identify and/or anonymize all Patient Data prior to
disclosure to LBS and shall disclose such Patient Data solely in accordance with
applicable laws.

 

7.2        Use of Designated Laboratory(s). In accordance with the Project
Agreement, it is understood that certain work in furtherance of any given
Project will be performed by certain Contractors. In particular, during the
Project, the Prototype Product, and Analytically Validated Product, as
applicable, will be supplied to one or more Third Party contract laboratory(ies)
(the “Designated Laboratory(s)”) selected by ARNO, and which pass any applicable
proficiency testing, for the purpose of the Designated Laboratory(s)testing
clinical patient samples using the Prototype Product or Analytically Validated
Product, as applicable. The results from the use of the Product by the
Designated Laboratory(s)will be included in the Project Data. To the extent
required under the applicable Project Agreement, LBS will train the Designated
Laboratory(s)in the use of the Prototype Product or Analytically Validated
Product, including but not limited to the scoring methodology. Before LBS is
required to use a specific Designated Laboratory(s), ARNO shall enter into a
written agreement reasonably acceptable to LBS that enables either a) the
Parties to inspect and audit the Designated Laboratory(ies)’s facility as
necessary; or b) LBS to inspect the Designated Laboratory(s)and audit, at LBS’s
sole expense, the facilities as necessary; and, in either case,that includes
confidentiality obligations at least as stringent as the obligations set forth
in Section 11 (each, a “ Designated Laboratory(s)Agreement”).

 

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7.3        Regulatory Activities and Submissions Generally. The Parties will
confer and cooperate with one another through the JDC (or, as directed by the
JDC, through a Subcommittee) and in accordance with this Article 7.3 with
respect to all dealings with Regulatory Authorities and with all aspects of
Approval for each Product as applicable, including discussions regarding the
regulatory documentation to be filed, the decision as to whether to make such
filings and the timing of such filings. LBS will report to the JDC regarding the
status of each pending or proposed Regulatory Submission for the Product and
will provide the JDC with copies of all correspondence LBS receives from the
Regulatory Authorities relating to the clinical validation part of the
Regulatory Submission for any given Product (or other correspondence that
references any given Drug or that concerns the Labeling of any given Product),
and will keep the JDC informed on an ongoing basis regarding the schedule and
process for the preparation of Regulatory Submissions for any given Product, and
will provide working drafts of proposed Regulatory Submissions related to the
clinical validation part of the Regulatory Submission for any given Product (or
other parts of the Regulatory Submission that reference any given Drug or that
concerns the Labeling of any given Product) to the JDC to provide ARNO an
opportunity to review and comment on such drafts. Likewise, ARNO shall provide
working drafts of proposed labeling for any given Drug that references any given
Product to the JDC to provide LBS an opportunity to review and comment on such
drafts. The purpose of such interaction is to identify and resolve any potential
concerns in advance of the proposed filing of such Regulatory Submission. In
accordance with the foregoing, LBS will not be obliged to provide to ARNO copies
of such correspondence and drafts that pertain to the manufacturing or
preclinical sections of the Regulatory Submissions (that do not include
information with respect to the clinical validation or Labeling of any given
Product and/or references to any given Drug), as ARNO acknowledges that the
manufacturing and preclinical part of the Regulatory Submission may contain
proprietary information (for example, manufacturing methods) that may not be
necessary to share for the purpose of this Agreement. All references to any
given Drug in Regulatory Submissions and other correspondence with Regulatory
Authorities by LBS for the corresponding Product will be subject to the prior
written approval of the JDC. The Labeling to be submitted in a Regulatory
Submission and/or approved by the applicable Regulatory Authority for any given
Product will be subject to the prior written approval of the JDC. In the absence
of a response, ARNO shall be deemed to approve any materials submitted to the
JDC under this Section 7.3 that are not approved within thirty (30) days after
such submission.

 

7.4        Regulatory Activities and Submissions in the U.S. If specified in any
Project Agreement, LBS will be responsible for the preparation of all
documentation necessary for a (complete) PMA submission for any given Product in
accordance with the applicable Project Agreement. Not less than thirty (30) days
prior to PMA submission, LBS will provide ARNO with a draft of the PMA
submission and supporting materials for review and comment. Subject to Section
6.1, LBS will be responsible for providing, in the format required by the FDA,
the data and information required to be submitted in connection with the PMA
submission required for PMA Approval of any given Product by the FDA. The PMA
submission will be filed by LBS in LBS’s name and LBS shall be the owner of such
PMA submission for any given Product unless otherwise agreed in the applicable
Project Agreement. LBS will keep ARNO informed about the process. LBS shall use
reasonable commercial efforts to provide ARNO with at least thirty (30) days’
advance notice of any material meeting with the FDA which is for the purpose of
obtaining PMA Approval for any Product, and ARNO may elect to send one person
reasonably acceptable to LBS to participate as an observer (at ARNO’s sole cost
and expense) in such meeting. In addition, LBS shall promptly provide ARNO with
copies of any material documents or other correspondence received from the FDA
directly related to any Product. The Parties will coordinate the development
activities and Regulatory Submissions for any given Product in the U.S. with the
objective of assuring that any given Product is Approved and commercially
available in the U.S. at the time that FDA approval is first obtained for an
Indication or other labeling for any given Drug that references the
corresponding Product. In the case of an Approval Delay, the Parties will
cooperate to assure that any given Product is Approved and commercially
available as soon as practicable after such Approval of the corresponding Drug.
Subject to the terms and conditions of this Agreement and specified in any
Project Agreement, LBS will use reasonable efforts to obtain PMA Approval of the
Product by the FDA, so long as ARNO desires to obtain such PMA Approval.

 

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7.5        Regulatory Activities and Submissions in the Other ARNO Market
Countries. LBS will be responsible for the preparation and filing of all
documentation necessary for a complete Regulatory Submission for any given
Product in the other ARNO Market Countries. LBS will provide, in the format
required by the Regulatory Authority, the data and information to be submitted
for Approval of any given Product by the Regulatory Authority. The Parties will
coordinate the development activities and Regulatory Submissions for any given
Product in such ARNO Market Countries with the objective of assuring that the
Product is Approved and commercially available in the ARNO Market Countries at
the time that Approval is first obtained in a ARNO Market Country for the
Indication or other labeling for any given Drug that references the
corresponding Product, in accordance with ARNO’s worldwide clinical development
and commercialization plans for any given Drug and the applicable Project
Agreement.

 

7.6        Regulatory Activities and Submissions Outside ARNO Market Countries.
If ARNO desires LBS to make any given Product commercially available in a
particular country outside the ARNO Market Countries, then ARNO shall notify LBS
in writing of such desire and give LBS a reasonable period of time to decide
whether it wishes or is able to do so, and if this is the case, then the Parties
shall amend the applicable Project Agreement or establish an additional Project
Agreement, which will specify the activities and associated costs required to
pursue and obtain Approval for the Product in countries or regulatory
jurisdictions outside the ARNO Market Countries. In such case, subject to the
terms and conditions of this Agreement, LBS shall be granted a reasonable period
of time to obtain such Approval and LBS shall use commercially reasonable
efforts to obtain Approval of the Product in such other countries or regulatory
jurisdictions, so long as ARNO desires to obtain such Approval. To the extent
possible, the Parties shall coordinate the development activities and Regulatory
Submissions for the Product outside the ARNO Market Countries with the objective
of assuring that the Product is Approved and commercially available in such
countries at the time that Approval is first obtained in such countries for an
indication or other labeling for the Drug that references the Product. In the
case of an Approval Delay, the Parties shall cooperate to assure that the
Product is Approved and commercially available as soon as practicable after such
Approval of the Drug. If LBS, in its discretion, decides that it will not make
the Product commercially available in a particular country outside the ARNO
Market Countries despite ARNO’s request to have LBS do so, LBS may choose to
either (i) identify a distributor to make the Product available in any such
country or (ii) provide to ARNO components of the Product reasonably necessary
to enable ARNO or its designee to develop a manual test for the Assay. Under no
circumstances shall such components include the instrument platform, software
and/or results reporting system used in performing the Assay.

 

7.7        Right of Reference. ARNO will have the right to use and reference
LBS’s Regulatory Submissions in connection with the development (including
regulatory filings) and commercialization of any given Drug. In the case where
ARNO makes any Regulatory Submissions, LBS shall have the right to use and
reference such Regulatory Submissions in connection with the development
(including regulatory filings) and commercialization of any corresponding
Products. Each Party will provide such written authorizations to the other Party
as reasonably necessary to carry out the intent of this Section 7.7.

 

7.8        Approval Delays. If any given Product is not Approved on or before
the date the corresponding Drug is Approved notwithstanding LBS’s reasonable
efforts to obtain such Approval, the Parties will cooperate to assure that such
Product is Approved and commercially available as soon as practicable after such
Approval of the corresponding Drug.

 

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7.9        Inspections; Audits. ARNO (either by itself or through a Third Party
reasonably acceptable to LBS) will have the right to at any time, by providing
twenty-four (24) hours prior notice to LBS conduct a For-cause Inspection of
LBS’s Product manufacturing processes and facilities. Additionally, ARNO will
have the right, during normal business hours, upon reasonable notice (which
shall be no less than thirty (30) days prior notice) to inspect and audit LBS’s
Product manufacturing process and facilities; provided, however, that such
inspection, audit or investigation shall not unreasonably interfere with the
operations at the Product production facility. LBS will cooperate in any such
inspection, audit or investigation. In connection with any such inspection or
audit, LBS shall have no obligation to provide ARNO and/or a Third Party access
to LBS confidential information related to any other LBS product that is not a
Product or to any facilities that are involved in the manufacture of a Product.
Additionally, LBS will inform ARNO within five (5) business days of any audit or
inspection by any Regulatory Authority which directly or indirectly relates to
any given Product or manufacturing facility involved in the production of a
Product, and LBS will promptly provide to ARNO in writing the results of any
such audits or inspections.

 

7.10      Medical Device Reporting Events. After Approval of the Product, on an
ongoing basis, LBS will be responsible for reporting any Medical Device
Reporting Events for any given Product to the applicable Regulatory
Authority(ies), with a copy of such report given simultaneously to ARNO, in
accordance with 21 C.F.R. Part 803.1 et. seq. in the United States, and
corresponding regulatory standards as may be required by other Regulatory
Authorities as applicable.

 

7.11      Medical Inquiries.

 

(a)         LBS will respond to and answer reasonable medical questions and
inquiries from members of the medical profession and consumers regarding any
given Product directed to either Party. ARNO shall comply with the directions
and policies reasonably established by LBS in connection therewith, including,
but not limited to, routing all requests for written responses to medical
inquiries regarding any given Product or any other LBS product to LBS for
answers.

 

(b)        ARNO will respond to and answer medical questions and inquiries from
members of the medical profession and consumers regarding any given Drug
directed to either Party. LBS will comply with the directions and policies
reasonably established by ARNO in connection therewith, including, but not
limited to, routing all requests for written responses to medical inquiries
regarding the Drug to ARNO for answers.

 

7.12.     Product and Drug Complaints.

 

(a)         LBS will have the sole authority and responsibility for: (i)
investigating and responding to any complaints relating to any given Product,
(ii) reporting any complaints relating to any given Product that are required to
be reported to the applicable Regulatory Authority(ies) and (iii) subject to the
other terms and conditions of this Agreement and the applicable Project
Agreement, responding to any Regulatory Authority inquiries regarding any given
Product.

 

(b)         ARNO will have the sole authority and responsibility for: (i)
investigating and responding to any complaints relating to any given Drug, (ii)
reporting any complaints relating to the Drug that are required to be reported
to the applicable Regulatory Authority(ies) and (iii) responding to any
Regulatory Authority inquiries regarding a Drug complaint.

  

7.13.    Recalls. 

 

The Parties each agree to share with each other any information that might lead
to a field corrections, recalls, and market withdrawals of any given Drug or any
given Product, within twenty-four (24) hours of its receipt of such
information. 

 

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(a)         LBS will have the responsibility to handle all field corrections,
recalls, and market withdrawals of the Product in accordance with applicable law
at LBS’s cost and expense; provided that in all cases, unless otherwise required
to comply with any applicable laws or any decision, order, request or directive
of a Regulatory Authority, or as necessary to protect the health and safety of
patients (as LBS determines in its reasonable discretion), LBS will release no
communication to the public regarding a Product field correction, recall or
market withdrawal without first providing ARNO with the opportunity to review
and comment on such communication, and provided further that if ARNO does not
respond to LBS’s request for review and comment within twenty-four (24) hours
(or such shorter time as LBS reasonably requests), LBS shall be free to release
such communications.

 

(b)         ARNO shall have the responsibility to handle all field corrections,
recalls, and market withdrawals of any given Drug in accordance with applicable
law at ARNO’s cost and expense; provided that in all cases, unless otherwise
required to comply with any applicable laws or any decision, order, request or
directive of a Regulatory Authority, or as necessary to protect the health and
safety of patients (as ARNO determines in its reasonable discretion), ARNO shall
release no communication to the public regarding a Drug field correction, recall
or market withdrawal without first providing LBS with the opportunity to review
and comment on such communication, and provided further that if LBS does not
respond to ARNO’s request for review and comment within twenty-four (24) hours
(or such shorter time as ARNO reasonably requests), ARNO will be free to release
such communications.

 

8         Manufacture, Supply and Commercialization of Product

 

The obligations of ARNO under this Section 8 and under the foregoing Section 7
will only apply to the extent that ARNO, at its reasonable discretion, desires
to continue the applicable development and Approval of any given Product. ARNO
shall provide LBS prompt notice of any decision to cease applicable development
and Approval.

 

8.1         Commercialization.

 

(a) Subject to the provisions in Section 7, the Parties, through the JCC, will
coordinate the development activities and Regulatory Submissions for any given
Product in the ARNO Market Countries with the objective of assuring that any
given Product is Approved and commercially available in the ARNO Market
Countries at the time that Approval is first obtained in a ARNO Market Country
for an indication or other labeling for any given Drug that references its
corresponding Product, in accordance with ARNO’s worldwide clinical development
and commercialization plans for the applicable Drug and the applicable Project
Agreement.

 

(b) If ARNO desires LBS to make any given Product commercially available in a
country outside the ARNO Countries, ARNO shall notify LBS in writing of such
desire giving LBS a reasonable period of time to decide whether it is able to do
so, (LBS will make commercially reasonable efforts to fulfill such request and
will not unreasonably withheld its approval thereof), and if this is the case,
LBS will obtain the necessary Approval as set forth in Section 7.6 and take the
necessary steps using commercially reasonable efforts in order to make the
Product commercially available in such country within a reasonable period, with
the objective of assuring that the Product is Approved and commercially
available in such country at the time that Approval is first obtained in the
country for an indication or other labeling for any given Drug that references a
corresponding Product.

 

(c) LBS will provide the Approved Product at competitive pricing in given
countries and subject to local reimbursement rules in that country.

 

(d) Subject to LBS’s obligation in Section 8.1(c), LBS shall have authority over
decisions regarding the marketing, promotion, distribution, sale and other
commercialization activities and decisions for any given Product.

 

15

 

 

(e) It is agreed that any commercialization will be contingent on and subject to
a commercialization agreement, including any necessary license(s) to Arno IP and
Arno Background IP, to be entered into by the Parties, and that this Agreement
does not provide LBS with the right to or license to commercialize any Product.

 

8.2         Supply of Product to ARNO for Development Purposes. The Parties will
work together in good faith to negotiate additional terms, to govern the
manufacture and supply of each Product to be supplied under a Project Agreement.
During the Term, LBS will supply to ARNO Clinical Diagnostic Product for use in
Clinical Trials in accordance with and subject to LBS’s standard supply terms
and Clinical Product Request Agreement. Alternatively, upon request by ARNO, LBS
will ship such Clinical Diagnostic Product to one or more Designated
Laboratory(s) or investigator(s) designated by ARNO. Any Product used by ARNO
and/or the Designated Laboratory(s) shall be used in accordance with all
applicable laws. Such Product supplied to ARNO and/or any clinical
laboratory(ies) (including any Designated Laboratory(s)) or investigator(s)
designated by ARNO under this Section 8.2 shall be at a price set forth in the
Project Agreement.

 

8.3         Joint Commercialization Committee. Upon request by either Party, the
Parties will form a joint commercialization committee (the “Joint
Commercialization Committee” or “JCC”) comprised of two (2) representatives of
each Party, to be designated by each Party in its sole discretion but will
include at least one (1) representative responsible for marketing from each
Party. Each Party will be free to replace its representative to the JCC with a
new representative, upon prior written notice to the other Party. The JCC will
have the role and responsibilities as set forth in Section 8.4, unless otherwise
mutually agreed in writing by the Parties.

 

8.4         Role and Responsibilities of the Joint Commercialization Committee.
The JCC will coordinate the activities of the Parties with respect to the
marketing and distribution of any given Product in order to: (a) supply, market,
promote, distribute and otherwise commercialize any given Product and its
corresponding Drug; (b) make any given Product and its corresponding Drug
commercially available and to supply and sell any given Product and its
corresponding Drug consistent with commercial demands; (c) discuss, coordinate
and align the launch, marketing and commercialization of the any given Product
and its corresponding Drug, including the exchange of information on the
objectives, methodology, considerations, expectations and forecasted sales of
the Drug and the corresponding Product; (d) coordinate LBS’s plans for
supporting the marketing, promotion, distribution and sale of any given Product,
such as sales training (including training for ARNO sales representatives),
promotion, customer service, support and education activities as and to the
extent required under this clause 8; and (e) discuss and monitor access and
reimbursement issues for any given Product and its corresponding Drug.

 

8.5         Responsibility for the Drug. For the avoidance of doubt, LBS and the
JCC will have no authority over decisions regarding the marketing, promotion,
distribution, sale, labeling and other commercialization activities and
decisions for any given Drug. ARNO shall have sole responsibility and authority
with respect to such activities and decisions.

 

9.           Payments

 

9.1         Payments for Performance of Time-and-Materials Projects. As
consideration for LBS’s performance of any given time-and-materials Project in
accordance with the applicable Project Agreement, ARNO shall reimburse LBS for
the FTE costs and out of pocket costs incurred by LBS in performance of any
given Project in accordance with the applicable Project Agreement. The projected
FTE costs and material costs for the conduct of the Project will be set forth in
the Project Agreement. ARNO will reimburse LBS for the FTE costs and other out
of pocket costs incurred by LBS for Additional Work, being activities not
included in the Project Agreement, and approved by the JDC/JCC (as applicable).
LBS may increase the FTE Rate on an annual basis upon thirty (30) days’ notice
to ARNO to reflect increases in its labor costs (including salary and benefits)
in accordance with the average consumer price data index as published by the
Bureau of Labor Statistics of the U.S. Department of Labor (“BLS”).

 

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9.2         Payments for Performance of Milestone-based Projects. As
consideration for LBS’s performance of any given Milestone-based Project in
accordance with the applicable Project Agreement, ARNO shall pay the appropriate
Milestone Fee to LBS upon (1) completion of the applicable Milestone and
approval by the JSC, which approval shall occur within three (3) business days
of presentation of supporting evidence of Milestone completion to the JSC, and
(2) delivery by LBS to ARNO of an invoice for said Milestone Fee. LBS may
increase the FTE Rate (if any) specifically included in a Milestone Fee on an
annual basis upon thirty (30) days’ notice to ARNO to reflect increases in its
labor costs (including salary and benefits) in accordance with the average
consumer price data index as published by the BLS. In the event a Milestone
payment is disputed, then the dispute shall be elevated to the CMO of Arno and
the VP of Pharma Partnerships of LBS for resolution within five (5) days. If the
dispute remains unresolved, then the dispute may be arbitrated pursuant to
Section 15.12.

 

9.3         Travel. For time-and-materials Projects, ARNO shall reimburse LBS
for any pre-approved travel and related costs for LBS’s representatives to
attend meetings of the JSC and JDC. ARNO shall reimburse LBS for the travel and
related costs for LBS’s representatives to travel to Designated Laboratory(s)
selected by ARNO under Section 7.2, for the travel and related costs for LBS’s
representatives to travel to meetings with regulatory authorities, and any
travel associated with Additional Work to the extent that (i) such travel and
related costs that have been preapproved in writing by ARNO; (iii) such costs
are made in accordance with ARNO’s employee travel and expense policy; and (iv)
such travel is exclusively for the execution of the Project. ARNO shall pay for
travel time spent by LBS’s employees, representatives and Contractors at half of
the FTE Rate and at a maximum of eight (8) hours per day. It is explicitly
agreed that the travel time and costs associated therewith are not included in
the cost overview included in any given time-and-materials Project Agreement and
shall not be subject to the total amounts for all the activities in the Project
as indicated in the budget, whereby the FTE rate may be indexed according to
article 9.1. For avoidance of doubt, for Milestone-based Projects, ARNO shall
not reimburse LBS for travel unless expressly stated otherwise in the applicable
Project Agreement.

 

9.4         Commercialization Payments. If specified in a Commercialization
Project, ARNO shall pay to LBS any costs, internal or otherwise, that LBS
actually incurs which were preapproved in writing by ARNO in conducting
commercialization activities, which may include sales training (including
training for ARNO sales representatives), promotion, customer service, support
and/or education activities with respect to any given Product, including without
limitation: a joint key opinion leader program where ARNO and LBS address a
joint customer base (for example, a program directed towards pathologists and
oncologists); joint presentations by LBS and ARNO at conferences or other
venues; and education activities regarding any given Drug and its corresponding
Product (such activities being the “Commercialization Activities”).

 

9.5         Milestone Payments. Each Project Agreement may specify reasonable
Milestone Fees to be paid by ARNO to LBS in connection with the applicable
Project.

 

9.6         Invoicing and Payment

 

9.6.1      For time-and-materials Projects, LBS will invoice ARNO for the
performed activities as described in the Project Agreement on a monthly basis.
For Milestone-based Projects, LBS will invoice ARNO for the performed activities
as described in the Project Agreement upon approval of the completion of a given
Milestone by the JSC, which approval shall occur within three (3) business days
of presentation of supporting evidence of Milestone completion to the JSC. In
the event a Milestone payment is disputed, then the dispute shall be elevated to
the CMO of Arno and the VP of Pharma Partnerships of LBS for resolution within
five (5) days. If the dispute remains unresolved, then the dispute may be
arbitrated pursuant to Section 15.12.

 

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9.6.2     All payments shall be made in U.S. Dollars. Terms of payment shall be
thirty (30) days from the date of invoice. Payment shall be effected by bank
transfer.

 

9.6.3     All undisputed invoices which are payable under this Article 9 for
which payments are not made when due shall automatically bear an interest,
calculated from the date such payment was due at the annual rate of 3% above the
applicable EURIBOR rate.

 

10.         Intellectual Property

 

10.1      Ownership and Control of ARNO Background IP. ARNO retains ownership
and control of the ARNO Material, ARNO IP and ARNO Know-How, including any
Improvement in such ARNO IP regardless of whether the Improvement occurs during
the Term of this Agreement (collectively “ARNO Background IP”). LBS shall
receive no rights to utilize ARNO Background IP, or rights with respect to use
of ARNO Background IP, except as expressly set forth herein. ARNO, at its sole
expense and acting through patent attorneys or agents of its choice, shall be
responsible for the preparation, filing, prosecution and maintenance of all
Patent rights relating to ARNO Background IP. At ARNO’s request, LBS shall
reasonably cooperate with and assist ARNO, at ARNO’s expense, in connection with
such activities.

 

10.2      License of ARNO Background IP to LBS. For any given Project, ARNO will
grant to LBS (and its authorized Contractors) a limited, non-transferable,
nonexclusive, worldwide, royalty free, fully-paid-up license to use necessary
and specified ARNO Background IP solely for the purpose to perform such Project
during the term of the Project. LBS will (i) use the ARNO Background IP in
compliance with applicable laws; (ii) not disclose the ARNO Background IP to any
Third Party (other than to LBS’s Contractors in accordance with Section 4.7, or
to successors and permitted assigns in accordance with Section 15.1) and/or
(iii) not use the ARNO Background for any purpose other than to perform the
Project. Upon request by ARNO, LBS will return to ARNO any unused or reusable
ARNO Materials that LBS does not require to perform the Project.

 

10.3      Ownership and Control of LBS Background IP. LBS retains ownership and
control of the LBS Material, LBS IP, and LBS Know-How, including any Improvement
in such LBS IP regardless of whether the Improvement occurs during the Term of
this Agreement or thereafter (collectively “LBS Background IP”). ARNO shall
receive no rights to utilize LBS Background IP, or rights with respect to use of
LBS Background IP, except as expressly set forth herein. LBS, at its sole
expense and acting through patent attorneys or agents of its choice, shall be
responsible for the preparation, filing, prosecution and maintenance of all
Patent rights relating to LBS Background IP. At LBS’s request, ARNO shall
reasonably cooperate with and assist LBS, at LBS’s expense, in connection with
such activities.

 

10.4      License of LBS Background to ARNO. For any given Project, LBS will
grant to ARNO a limited, non-transferable, nonexclusive, worldwide, royalty
free, fully paid-up and with the right to sublicense, license to use necessary
and specified LBS Background IP solely for the purpose to perform such Project
during the term of the Project. ARNO will (i) use the LBS Background IP in
compliance with applicable laws; (ii) not transfer the LBS Background IP to any
Third Party (other than to ARNO Collaborators in accordance with Section 4.7, or
to successors and permitted assigns in accordance with Section 15.1); and/or
(iii) not use the LBS Background for any purpose other than to perform the
Project. Upon request by LBS, ARNO will return to LBS any unused or reusable LBS
Materials that ARNO does not require to perform the Project.

 

10.5      Ownership and Use of Project Data; Technology Developed in Projects.

 

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(a)         Subject to Section 10.6 and de-identification of Patient Data per
Section 7.1(c), the Project Data will be jointly owned by the Parties, and will
be deemed to be Confidential Information of both Parties and will be used and
disclosed by the Parties solely for the purposes and solely to the extent
expressly permitted, and subject to the limitations, under this Agreement and
the Project Agreement. Accordingly, each Party will be considered the Receiving
Party with respect to the Project Data and will be subject to all of the
restrictions and obligations of this Agreement with respect to the disclosure
and use of such Project Data to the same extent as applicable to Confidential
Information disclosed to such Party by the other Party. Each Party consents to
the other Party using the Project Data as permitted in this Agreement.

 

(b)         Except for the purposes of performing the Project and the
development and commercialization of the Product under the terms and conditions
of this Agreement, LBS will not use or disclose any Project Data that include or
are based upon data from the testing of any Patient Samples (using the Assay or
Product or otherwise) and/or that relate to the Drug for any other purpose,
without the prior written approval of ARNO.

 

(c)         ARNO shall not use any results or Project Data that are developed
solely by LBS that are specific to the manufacture, analytical validation and/or
materials used in a Product derived from a specific Project in connection with
the development or commercialization of any Companion Diagnostic other than for
the corresponding Drug specified in the Project except in the case that the
results and/or Product derived from a specific Project is applicable to another,
similar Drug that could utilize such Product, in which case, ARNO will be
entitled to use said results for said similar Drug as specified in an additional
Project Agreement.

 

(d)         LBS shall not use any results or Project Data that are developed by
LBS that are specific to the analytical validation of a Product derived from a
specific Project in connection with the development of any Companion Diagnostic
other than for the corresponding Drug specified in the Project. For avoidance of
doubt, the use of LBS platform technology, LBS Background IP or LBS technology
with general applicability is not limited by the foregoing sentence.

 

(e)         Except for the purposes of performing a Project under the applicable
Project Agreement under this Agreement, LBS will not use or disclose the Project
Data for any purpose other than the LBS Purpose, without the prior written
approval of ARNO.

 

(f)         Each Party shall promptly provide the other Party with written
notice concerning all technology and Intellectual Property Rights that are
conceived, made or developed in the course of carrying out a Project by
employees or consultants of either of them or their Affiliates, alone or jointly
with employees or consultants of the other Party or its Affiliates. ARNO hereby
assigns to LBS all right, title and interest it may have in any Improvements in
LBS IP derived from any Project. LBS hereby assigns to ARNO all right, title and
interest it may have in any Improvements in ARNO IP derived from any Project.

 

(g)         In case of a dispute between the Parties over inventorship of
technology and/or Intellectual Property Rights that is conceived, made or
developed in the course of carrying out a Project, it shall be resolved by
independent patent counsel, not otherwise engaged by either of the Parties,
selected by the JSC. Expenses of such independent patent counsel shall be shared
equally by the Parties.

 

10.6      Enforcement of ARNO Background IP and ARNO Patents relating to a Drug
and Defense of Claims.

 

(a)         In accordance with a given Project, ARNO will have the sole and
exclusive right (but not the obligation), at its sole expense, to enforce ARNO
Background IP and ARNO Patents relating to the any given Drug. ARNO shall keep
LBS periodically informed regarding such enforcement relating to a corresponding
Drug specified in the Project, both prior to and during any such enforcement.
LBS will reasonably assist ARNO upon request and at ARNO’s sole expense in
taking action to enforce the ARNO Background IP and Patents against infringers
(including without limitation by joining as a party plaintiff and executing such
documents as ARNO may reasonably request). All monies recovered upon the final
judgment or settlement of any such action will be used first, to reimburse the
costs and expenses (including reasonable attorneys’ fees and costs) of ARNO,
with the remainder to be retained by ARNO. In the event LBS becomes aware of any
possible infringement or unauthorized possession, knowledge or use of any ARNO
Background IP or ARNO Patents relating to the any given Drug, LBS Party shall
promptly notify ARNO and provide it with such information.

 

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(b)         In the event that any action, suit or proceeding is brought alleging
the infringement of ARNO Background IP or ARNO Patents relating to the any given
Drug or Intellectual Property Rights of a Third Party by reason of the
discovery, development, manufacture, use, sale, importation or offer for sale of
a Product or use of ARNO Background IP and ARNO Patents relating to the any
given Drug, ARNO shall have the option to assume control of the defense of any
action, suit or proceeding which principally relates to the use of ARNO
Background IP or ARNO Patents relating to the any given Drug . The Parties will
give each other prompt written notice of the commencement of any such suit,
action or proceeding or claim of infringement and will furnish each other a copy
of each communication relating to the alleged infringement. LBS will reasonably
assist ARNO upon request and at ARNO’s sole expense in connection with such
action, suit or proceeding.

 

11.         Confidentiality

 

11.1       Nondisclosure and Restriction on Use. During the Term (as defined in
Section 13.1), and for a period of seven (7) years thereafter, each Party (the
"Receiving Party") will maintain all Confidential Information of the other Party
(the "Providing Party") as confidential and will not disclose any such
Confidential Information to any Third Party or use any Confidential Information
for any purpose other than the purpose of this Agreement, except (a) as
expressly authorized by this Agreement, or (b) to its Affiliate(s), employees,
agents, consultants, sub-contractors and other representatives, who have a need
to know such Confidential Information for purposes of this Agreement and who are
bound by written obligations no less restrictive than those set forth herein to
keep such information confidential and restricting the use of such information
(collectively, “Permitted Recipients”). The Receiving Party may use such
Confidential Information of the other Party only to the extent required to
fulfill its obligations or exercise its rights under this Agreement. Each Party
will use at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its Permitted Recipients do
not disclose or make any unauthorized use of such Confidential Information. For
avoidance of doubt it is understood that Confidential Information received under
a Project Agreement shall be subject to this Article 11.

 

11.2      Exceptions. Subject to and without limiting Section 10.5, the
obligations of the Receiving Party under this Agreement shall apply to all
Confidential Information of the Providing Party it receives or that is generated
hereunder, except for information that:

 

(a)         was already in the possession of Receiving Party or its Affiliates
prior to its receipt under or in connection with this Agreement, provided such
information or data was not obtained directly or indirectly from the Providing
Party under an obligation of confidentiality;

 

(b)         is or becomes part of the public domain by reason of acts not
attributable to the Receiving Party or its Affiliate(s), employees, agents,
consultants or other representatives who have received such Confidential
Information;

 

(c)         is or becomes available to Receiving Party or Affiliates from a
source other than the Providing Party which source, to the best of Receiving
Party’s knowledge, has rightfully obtained such information and data, and has no
obligation of non-disclosure or confidentiality to the Providing Party with
respect thereto; or

 

(d)         has been independently developed by the Receiving Party or its
Affiliates, their employees, without use, aid or application of the Confidential
Information of the Providing Party and without breach of this Agreement or use
of any Confidential Information of the Providing Party.

 

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11.3       Authorized Disclosure. Confidential Information may also be disclosed
by the Receiving Party to the extent such disclosure is required to comply with
applicable laws and/or a court order, provided that the Receiving Party gives
prior notice to the Providing Party regarding such disclosure and cooperates in
efforts of the Providing Party to obtain confidential treatment of such
disclosure to the maximum extent permitted by applicable laws.

 

11.4       Terms of this Agreement. The Parties acknowledge that the terms and
contents of this Agreement (including the Attachments hereto) shall be treated
as Confidential Information of both Parties, provided, however, that either
Party may make disclosure of the existence of this Agreement and Project
Agreements hereunder as well as certain key provisions (total value, drug,
product and term) to any investors, prospective investors, acquirers, potential
acquirers, lenders and other potential financing sources who are obligated to
keep such information confidential. Disclosure of the Agreement to an LBS
Competitor or competitor of ARNO shall require approval of LBS or ARNO,
respectively, which shall not be unreasonably withheld, and if approval is
reasonably withheld, the Party seeking disclosure may disclose that an agreement
exists, plus a general description of the agreement that does not contain any
economic terms.

 

11.5       Publicity. Upon the execution of this Agreement, either Party may
issue a press release announcing the existence or terms of this Agreement,
provided that the other Party will agree in writing on the content of such press
release in advance. However if, in the reasonable opinion of such Party’s
counsel, a public disclosure is required by applicable laws, or court order, the
disclosing Party will provide copies of the disclosure reasonably in advance of
such filing or other disclosure for the other Party’s prior review and comment,
and the other Party will provide its comments as soon as practicable. No
disclosure permitted by this Section 11.5 shall contain any Confidential
Information of the other Party unless otherwise permitted in accordance with
Article 11.

 

11.6       Use of Name. No right, express or implied, is granted to either Party
by this Agreement to use in any manner any trademark, logo or tradename of the
other Party without the prior written consent of the owning Party, except as
expressly provided herein. Neither Party will make, place or disseminate any
advertising, public relations, promotional material or any material of any kind
using the Name of the other Party and/or any subsidiary or Affiliate of the
other Party or using their trademark, logo or trade Name, without the prior
written approval of the other Party.

 

11.7       Publications. Any Party seeking to publish or present Project Data
(“Submitting Party”) must obtain prior written approval of the other Party
(“Reviewing Party”). The Submitting Party will provide the Reviewing Party with
the any proposed abstract, manuscript or presentation which discloses Project
Data not less than 30 days before its intended submission for publication or
presentation. The Reviewing Party will then have 30 days from its receipt of any
such abstract, manuscript or presentation in which to object to all or any part
of the disclosure. The Submitting Party agrees to delete from the proposed
disclosure any Confidential Information of the Reviewing Party upon request.
Notwithstanding the foregoing, no Party will unreasonably withhold, delay or
condition its consent with respect to the disclosure of the Project Data in any
such proposed disclosure.

 

11.8       Prior NDA. This Agreement supersedes any applicable prior
Confidentiality and Non-Disclosure Agreement (“NDA”) and information disclosed
by any Party prior to the Effective Date that would be Confidential Information
(as defined in the prior NDA) under the terms and conditions of the Prior NDA
shall be deemed Confidential Information under this Agreement and shall be
governed by the terms and conditions of this Agreement.

 

12.         Representations, Warranties and Covenants

 

12.1       Representations, Warranties and Covenants of LBS. LBS represents and
warrants to and covenants with ARNO that:

 

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(a) as of the Effective Date, LBS is a company duly organized, validly existing
and in corporate good standing under the laws of England and Wales;

 

(b) LBS has the corporate and legal right, authority and power to enter into
this Agreement, and to extend the rights granted to ARNO in this Agreement;

 

(c) LBS has taken all necessary action to authorize the execution, delivery and
performance of this Agreement;

 

(d) upon the execution and delivery of this Agreement, this Agreement shall
constitute a valid and binding obligation of LBS, enforceable in accordance with
its terms;

 

(e) the performance of LBS’s obligations under this Agreement will not conflict
with its charter documents or result in a breach of any agreements, contracts or
other arrangements to which it is a party; and no Third Party has, or has an
option to have, any rights in the Project Data that would limit, encumber or
conflict with LBS's obligations under this Agreement or the rights granted to
ARNO under this Agreement;

 

(f) LBS will not during the Term enter into any agreements, contracts or other
arrangements with others that would be in conflict with or in derogation of
ARNO’s rights and licenses under this Agreement or LBS’s obligations under this
Agreement;

 

(g) LBS has enforceable written agreements with all of its employees (and any of
its Permitted Recipients) who receive ARNO Confidential Information and/or
perform activities under this Agreement assigning to LBS ownership of all
Intellectual Property Rights created in the course of their employment and/or
engagement;

 

(h) LBS at all times shall hold any and all rights to the LBS IP sufficient to
grant the licenses and other rights granted to ARNO hereunder and as of the
Effective Date free from any liens, encumbrances, and/or other rights of Third
Parties, (x) LBS has not received written notice from any Third Party alleging
that the use of the LBS Material or LBS IP contemplated to be used under this
Agreement infringes the issued and non-expired patent of any Third Party, and
(y) to the best knowledge of LBS without any duty of investigation, neither the
use of the LBS Material nor the LBS IP hereunder infringes, misappropriates or
otherwise violates a valid issued patent, trade secret or other intellectual
property or contractual right of any Third Party;

 

(i) as of the Effective Date there is no legal proceeding pending or, to the
best knowledge of LBS, threatened that is reasonably likely to have a material
adverse effect on LBS's ability to perform its obligations under this Agreement;
and

 

(j) none of LBS, its officers, directors and employees who are materially
involved in the performance of this Agreement shall be a person or party
identified as a prohibited, denied or debarred party on a list maintained by the
United States or a similar list of an applicable Regulatory Authority, or
otherwise precluded from performing under this Agreement.

 

12.2      Representations, Warranties and Covenants of ARNO. ARNO represents and
warrants to and covenants with LBS that:

 

(a) as of the Effective Date, ARNO is a corporation duly organized, validly
existing and in corporate good standing under the laws of the Delaware;

 

(b) ARNO has the corporate and legal right, authority and power to enter into
this Agreement, and to extend the rights and licenses granted to LBS in this
Agreement;

 

(c) ARNO has taken all necessary action to authorize the execution, delivery and
performance of this Agreement;

 

(d) upon the execution and delivery of this Agreement, this Agreement
constitutes a valid and binding obligation of ARNO, enforceable in accordance
with its terms;

 

22

 

 

(e) the performance of ARNO’s obligations under this Agreement will not conflict
with its charter documents or result in a breach of any agreements, contracts or
other arrangements to which it is a party; and no Third Party has, or has an
option to have, any rights in the Project Data that would limit, encumber or
conflict with ARNO’ obligations under this Agreement or the rights granted to
LBS under this Agreement;

 

(f) ARNO will not during the Term enter into any agreements, contracts or other
arrangements with others that would be in conflict with or in derogation of
LBS’s rights and licenses under this Agreement or ARNO’s obligations under this
Agreement;

 

(g) ARNO has enforceable written agreements with all of its employees who
receive LBS Confidential Information and/or perform activities under this
Agreement assigning to ARNO ownership of all Intellectual Property Rights
created in the course of their employment;

 

(h) as of the Effective Date, (x) ARNO has not received written notice from any
Third Party alleging that the use of the ARNO Material or ARNO Know-How
contemplated to be used in the performance of this Agreement infringes the
issued and non-expired patent of any Third Party, and (y) to the current actual
knowledge of ARNO without any duty of investigation, the use of the ARNO
Material or ARNO IP as contemplated to be used in the performance of this
Agreement does not infringe the valid issued patent, trade secret or other
intellectual property or contractual right of any Third Party;

 

(i) as of the Effective Date, there is no legal proceeding pending or, to the
current actual knowledge of ARNO without any duty of investigation, threatened
that is reasonably likely to have a material adverse effect on ARNO’s ability to
perform its obligations under this Agreement; and

 

(j) none of ARNO, its officers, directors and employees shall be a person or
party identified as a prohibited, denied or debarred party on a list maintained
by the United States or a similar list of an applicable Regulatory Authority, or
otherwise precluded from performing under this Agreement.

 

12.3      Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTIES WITH RESPECT TO ANY PRODUCT, PATENT RIGHTS,
GOODS, SERVICES, MATERIALS, KNOW-HOW OR ANY OTHER SUBJECT MATTER OF THIS
AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO ANY AND
ALL OF THE FOREGOING.

 

12.4      Limited Liability. Except with respect to the willful misconduct OR
GROSS NEGLIGENCE by a Party, neither Party will be liable with respect to any
matter arising under this Agreement under any contract, negligence, strict
liability or other legal or equitable theory for (i) any punitive, exEmplAry,
incidental, indirect or consequential damages, including but not limited to,
loss of business or good will, loss of revenue or lost profits.

 

13.         Term and Termination

 

13.1      Term. The term of this Agreement (“Term”) commences as of the
Effective Date and shall continue in effect for five (5) years after which the
Parties may mutually agree in writing to extend the Term on an annual basis.

 

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13.2       Termination for Default. Either Party (the “Non-Defaulting Party”)
may, without prejudice to any other remedies available to it at law or in
equity, terminate this Agreement or any of the activities under a Project
Agreement, in whole or in part, in the event (i) the other Party (the
“Defaulting Party”) will have materially breached in the performance of any of
its material obligations hereunder or (ii) in the event that any warranty or
representation made by either Party under Article 12 will have turned out to be
untrue in any material respect (“Event of Default”), and such default shall have
continued for thirty (30) calendar days after written notice thereof was
provided to the Defaulting Party by the Non-Defaulting Party. Without limiting
the foregoing, non-payment by ARNO pursuant to the SOW in the timeframes set
forth shall be an Event of Default. Any such termination shall become effective
automatically at the end of such thirty (30) calendar day period unless the
Defaulting Party has cured any such breach or default prior to the expiration of
such thirty (30) calendar day period. Notwithstanding the foregoing, either
Party’s failure to communicate with the other for twelve (12) consecutive months
shall constitute an Event of Default and shall not be subject to any cure
period. The right of either Party to terminate this Agreement as provided in
this Section 13.2 shall not be affected in any way by such Party's waiver or
failure to take action with respect to any previous default.

 

13.3       Termination for Bankruptcy. This Agreement may be terminated by
either Party immediately by notice in writing in the event that the other Party
files a petition under any bankruptcy or insolvency act or has any such petition
filed against it which is not discharged within sixty (60) days of the filing
thereof, makes an assignment for the benefit of its creditors, is unable to pay
its debts, or if a trustee, receiver, administrative receiver or similar officer
is appointed in respect of all or any part of the business or assets of the
other party or if a petition is presented or a meeting is convened for the
purpose of considering a resolution or other steps are taken for the winding up
of the other Party.

 

13.4       Effect of Expiration or Termination.

 

13.4.1       Termination of this Agreement and/or an applicable Project
Agreement for whatever reason (by expiration of term or otherwise) shall not
affect the liabilities of the Parties hereunder in respect of matters
outstanding at the time of such termination. An expiration of this Agreement
shall not affect existing Project Agreements, which Project Agreements shall
remain in full force and continue to be governed by and subject to the terms of
this Agreement.

 

13.4.1.1            In the event of expiration of a Project Agreement or any
termination of a Project Agreement, with respect to such Project Agreement:

 

(i)Each Party, at its discretion, will return to the other Party or destroy
(with written confirmation thereof to the other Party) all of the other Party’s
Confidential Information, and will not retain any copies thereof, except one
copy of the information for the purpose of determining its ongoing obligations
hereunder and except if explicitly mentioned otherwise in this article;

 

(ii)ARNO shall not be relieved from its payment obligations under Article 9 for
any amounts payable as of the effective date of termination, including: FTE
Payments for all work performed (provided the associated work product is
delivered to ARNO) and any out of pocket costs incurred by LBS up to the
effective date of such termination, provided that such activities have been
conducted, and expenses incurred and reimbursable, in accordance with this
Agreement and the applicable Project Agreement.

 

13.4.2      Upon the (i) expiration of this Agreement (except with respect to
matters in a Project Agreement extending beyond the expiration of this
Agreement) or (ii) termination of this Agreement or the applicable Project
Agreement due to an unremedied breach of ARNO (Section 13.2), bankruptcy of ARNO
(Section 13.3):

 

(i)the licenses granted to the Parties by Sections 10.2 and 10.4 cease upon the
moment of termination;

 

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(ii)LBS will, as directed by ARNO, either (i) return to ARNO any unused or
reusable ARNO Materials provided to LBS by ARNO hereunder or (ii) destroy or
otherwise dispose in a manner to render inaccessible all such ARNO Materials
(with written confirmation thereof to ARNO) ;

 

(iii)ARNO shall, as directed by LBS, either (i) return to LBS any unused or
reusable LBS Materials that are proprietary to LBS provided to ARNO by LBS
hereunder or (ii) destroy or otherwise dispose in a manner to render
inaccessible all such LBS Materials that are proprietary to LBS (with written
confirmation thereof to LBS).

 

13.4.3     Upon the termination of this Agreement, an applicable Project
Agreement or the License agreement between the Parties due to any of (a) an
unremedied breach of LBS (Section 13.2 as relating to this Agreement), (b) the
bankruptcy of LBS (Section 13.3), or (c) the election by LBS to terminate
following a Change of Control of ARNO in which ARNO is acquired by an LBS
Competitor (Section 15.13):

 

(i)the license granted to LBS by Section 10.2 will cease upon the moment of
termination and the license granted to ARNO by Section 10.4 will become a
perpetual, fully-paid up and irrevocable license, with a right to sublicense or
assign, provided, however, that (A) rights under such license may be exercised,
as stated in Section 10.4, solely for the completion of Project activities and
Deliverables as described in the Project Specification, and (B) no rights shall
be granted under such license to, or for the use of, the LBS instrument
platform, software and/or results reporting system;

 

(ii)LBS shall provide to ARNO or its designees components of a Product
reasonably necessary to enable ARNO or its designee to develop a manual test for
an Assay, or, at ARNO’s election, license to ARNO or its designees the
Intellectual Property Rights for the components of a Product reasonably
necessary to enable ARNO or its designee to develop a manual test for an Assay.
Under no circumstances shall such components include the instrument platform,
software and/or results reporting system used in performing an Assay;

 

(iii)ARNO will have full access to any and all Project Data that is required for
ARNO to develop, market, sell, distribute and obtain Regulatory Approval for the
Drug and the Product (alone or with a Third Party of ARNO’s choosing) that are
essential to the Product;

 

(iv)LBS will, as directed by ARNO, either (i) return to ARNO any unused or
reusable ARNO Materials provided to LBS by ARNO hereunder or (ii) destroy or
otherwise dispose in a manner to render inaccessible all such ARNO Materials. In
addition, LBS will deliver to ARNO any and all LBS Materials as far as is
required for ARNO to develop and obtain Regulatory Approval for the Drug and the
Product and any remaining antibodies, cell lines and other reagents purchased by
LBS and reimbursed by ARNO (in accordance with Section 9.1) for use in the
Project; and

 

(vi)Section 11.1 (i) will not be applicable and ARNO will have the right to
disclose Confidential Information of LBS to the designated third party with whom
the Project will be continued only to the extent necessary for the continuation
of the Project, and that third party shall be bound to confidentiality
obligations as per Article 11 of this Agreement.

 

13.4.4     Survival. Sections 4.4, 4.6 and Articles 10, 11, 12, 13, 14 and 15
survive termination or expiration of this Agreement.

 

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14.         Indemnity

 

14.1

 

(a)        LBS agrees to indemnify, defend and hold harmless ARNO, its
Affiliates, and their respective officers, directors and employees from and
against all claims, demands, liabilities, suits, damages, costs and expenses of
every kind and description, including penalties and reasonable attorney’s fees,
(collectively “ARNO Claims”) to the extent arising out of or proximately
resulting from any willful misconduct or negligent act or omission of LBS or its
officers, directors, employees or contractors, or from any breach by LBS of any
obligation, representations or warranties under this Agreement; provided that
such indemnity shall not apply to the extent that a ARNO Claim arises out of or
results from the willful misconduct or negligent act or omission of ARNO or its
officers, directors or employees, or from any breach by ARNO of any obligation,
representation or warranty under this Agreement.

 

(b)       ARNO agrees to indemnify, defend and hold harmless LBS, its
Contractors, and LBS’s Affiliates, and their respective officers, directors and
employees from and against all claims, demands, liabilities, suits, damages,
costs and expenses of every kind and description, including penalties and
reasonable attorney’s fees, (collectively “LBS Claims”) to the extent arising
out of or proximately resulting from any willful misconduct or negligent act or
omission of ARNO or its officers, directors or employees, or from any breach by
ARNO of any obligation, representations or warranties under this Agreement;
provided that such indemnity shall not apply to the extent that a LBS Claim
arises out of or results from the willful misconduct or negligent act or
omission of LBS or its officers, directors or employees, or from any breach by
LBS of any obligation, representations or warranties under this Agreement.

 

14.2      The indemnified Party (“the “Indemnified Party”) shall (i) provide the
other Party (the “Indemnifying Party”) written notice of any Claim for which it
is seeking indemnification hereunder promptly after the Indemnified Party has
knowledge of such Claim; (ii) permit the Indemnifying Party to assume full
responsibility to investigate, prepare for and defend against any such Claim;
(iii) assist the Indemnifying Party, at the Indemnifying Party’s reasonable
expense, in the investigation of, preparation for, and defense of any such
Claim; and (iv) not compromise or settle such Claim without the Indemnifying
Party’s written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. “Claim” means any ARNO Claims or LBS Claims, as the case
may be.

 

14.3      For clarity, the Parties’ obligations under Section 14.1 and 14.2 are
subject to Section 12.4.

 

14.4      Insurance.

 

(a)        Each Party will maintain in full force and effect during the Term
valid and collectible insurance policies providing liability insurance coverage
to protect against potential liabilities and risk arising out of activities to
be performed under this Agreement.

 

(b)       During the Term and so long as each Party is commercially selling
Product or Drug as applicable, such Party will maintain comprehensive public or
commercial general liability insurance from a recognized, creditworthy insurance
company, on an occurrence basis, with endorsements for general and product
liability, and with coverage limits of not less than $5 million per occurrence.
The minimum level of insurance set forth herein shall not be construed to create
a limit on either Party’s liability hereunder. Upon a Party's written request,
the other Party will furnish to the requesting Party a certificate of insurance
evidencing such insurance coverage.

 

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15.         Miscellaneous

 

15.1       Assignment. Neither Party has the right to assign its rights or
obligations under this Agreement without the prior written consent of the other
Party; provided however, that (i) either Party may assign this Agreement and all
of its rights and obligations hereunder, without such consent, to an entity that
acquires all or majority of the shares or assets of such Party (or the business
or assets to which this Agreement pertains) whether by merger, consolidation,
reorganization, acquisition, sale, license or otherwise or to any successor
entity resulting from any merger or consolidation of such Party with or into
such entity, and (ii) each Party may assign this Agreement and all of its rights
and obligations hereunder, without such consent, to an Affiliate if the
assigning Party remains liable and responsible for the performance and
observance of all of the Affiliate’s duties and obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Parties to the extent necessary to carry out the intent
of this Agreement. Any assignment not in accordance with this Section 15.1 is
void. Disclosure of confidential information including the existence of and
general terms of this Agreement and related Projects may be disclosed to
potential permitted assignees provided that such parties are bound by
confidential terms at least as stringent as though between the Parties.

 

15.2       Compliance. Each Party shall comply with all applicable laws, rules
and regulations in connection with this Agreement. Each Party shall comply, upon
reasonable notice from the other Party, with all governmental requests directed
to either Party regarding the subject matter of this Agreement and provide all
information and assistance necessary to comply with such governmental requests.

 

15.3       Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signature of more than
one Party, but all such counterparts taken together shall constitute one and the
same instrument, and may be executed and delivered through the use of facsimiles
or email of pdf copies of the executed Agreement provided that such electronic
forms include all pages of the Agreement including the executed signature pages.

 

15.4       Entire Agreement. This Agreement (including all Attachments attached
hereto and Project Agreements, each of which are hereby incorporated herein by
reference) sets forth all of the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto;
constitutes and contains the complete, final, and exclusive understanding and
agreement of the Parties with respect to the subject matter herein; and cancels,
supersedes and terminates all prior agreements and understanding between the
Parties with respect to the subject matter hereof. There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
whether oral or written, between the Parties other than as set forth herein. No
subsequent alteration, amendment, change or addition to this Agreement will bind
the Parties hereto unless reduced to writing and signed by the respective
authorized officers of the Parties. In the event of a conflict between the terms
of any Project Agreement and the terms of this Agreement, the terms of this
Agreement shall control, unless the Project Agreement specifically describes
such conflict and expressly states that the Project Agreement shall control.

 

15.5       Force Majeure. Either Party shall be excused from delays in
performing or from its failure to perform hereunder to the extent that such
delays or failures result from causes beyond the reasonable control of such
Party; provided that, in order to be excused from delay or failure to perform,
such Party must act diligently to remedy the cause of such delay or failure.  If
as a result of the conditions referred to in the preceding sentence, a Party is
unable to fully perform its obligations for a period of ninety (90) calendar
days, the other Party shall have the right to terminate this Agreement upon
written notice to the Party unable to perform.

 

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15.6       Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of the
Agreement.

 

15.7       Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of Delaware, United States (excluding its
body of law controlling conflicts of law).

 

15.8       Independent Contractors. It is expressly agreed that the relationship
between LBS and ARNO created by this Agreement shall be one of independent
contractors, and neither Party shall have the power or authority to bind or
obligate the other Party except as expressly set forth in this Agreement.

 

15.9       Notices. Any notices and other communications provided for in this
Agreement to be made by either of the Parties to the other Party shall be in
writing and shall be deemed given if delivered personally or sent by facsimile
or email (and promptly confirmed by personal delivery, registered or certified
mail or overnight courier as provided herein), sent by nationally-recognized
overnight courier or sent by registered or certified mail, postage prepaid,
return receipt requested, at the following addresses (or at such other address
for a Party as shall be specified by like notice).

 

If to LBS:

Leica Biosystems Newcastle Ltd.

Balliol Business Park West

Benton Lane

Newcastle upon Tyne NE12 8EW

United Kingdom

Attention: President and CEO

 

If to ARNO:

Arno Therapeutics, Inc.

200 Route 31 North

Suite 104

Flemington, NJ 08822

Attention: President and CEO

 

15.10     Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then the remainder of this Agreement, or
the application of such term, covenant or condition to the Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by
applicable laws; and the Parties hereto covenant and agree to renegotiate any
such term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid or unenforceable, it being
the intent of the Parties that the basic purposes of this Agreement are to be
effectuated.

 

15.11     Alliance Managers. Promptly after the Effective Date, each Party will
appoint one senior representative who possesses a general understanding of the
scientific and business issues relevant to this Agreement to act as its
respective alliance manager (each, an “Alliance Manager”) for the relationship
of the Parties under this Agreement. Each Party may change its designated
Alliance Manager, who may be a member of the JSC or JCC, from time to time upon
notice to the other Parties. The Alliance Managers will be entitled to attend
meetings of the JSC and JCC, but will not have, or be deemed to have, any rights
or responsibilities of a member of the JSC or JCC unless the Alliance Manager is
also a member of the JSC or JCC. Each Alliance Manager may bring any matter to
the attention the JSC or JCC where such Alliance Manager reasonably believes
that such matter requires such attention. For purposes of clarification, in no
event will the Alliance Managers have the power or authority to amend any
provision of this Agreement.

 

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15.12     Arbitration.

 

Except as expressly otherwise provided in this Agreement, any dispute arising
out of or relating to the Agreement shall be finally settled by arbitration
under the then current commercial arbitration rules of the American Arbitration
Association in accordance with the following terms:

 

(a)The place of arbitration of any dispute shall be New York, New York.  Such
arbitration shall be conducted by three arbitrators, one appointed by each Party
and the third selected by those arbitrators appointed by the Parties.  Each
arbitrator shall be a person with relevant experience in the pharmaceutical and
medical diagnostics industries. 

(b)Any award rendered by the arbitrators shall be binding upon the
Parties. Judgment upon any award rendered may be entered in any court having
jurisdiction, or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be.  Each Party shall
pay its own expenses of arbitration, and the expenses of the arbitrators shall
be equally shared among the Parties unless the arbitrators assess as part of
their award all or any part of the arbitration expenses of a Party or Parties
(including reasonable attorneys’ fees) against the other Party or Parties, as
the case may be.

(c)This Section shall not prohibit a Party from seeking injunctive relief from a
court of competent jurisdiction in the event of a breach or prospective breach
of this Agreement by any other Party which would cause irreparable harm to the
first Party.

(d)Whenever a dispute arising out of or relating to the interpretation of any
provisions of this Agreement or the failure of any Party to perform or comply
with any obligations or conditions applicable to such Party pursuant to this
Agreement arises and such dispute is expressly designated as one to be resolved
through the Accelerated Arbitration Provisions, then such dispute shall be
finally settled by arbitration under the then current expedited procedures
applicable to the then current commercial arbitration rules of the American
Arbitration Association in accordance with the terms set forth in this Section.

 

15.13     Change of Control. In the event that subsequent to the Effective Date
there is a Change of Control of either Party, then, within thirty (30) days of
the other Party’s written request, the Party and/or the acquiring party will
provide a written assurance to the other Party, signed by duly authorized
officers of such Party and/or acquiring party, as applicable, affirming that the
Party and/or the acquiring Affiliate or Third Party, as applicable, will
continue to make commercially reasonable efforts in carrying out its obligations
under this Agreement. In the event that a Party and/or the acquiring party does
not comply with the provisions of this Section 15.13 or the acquiring party is
an LBS Competitor or a direct competitor of ARNO, the other Party may terminate
the Agreement and/or any ongoing Project Agreement upon thirty (30) days’ prior
written notice.

 

15.14     Interpretation of Agreement.

 

(a)         Each of the Parties acknowledges and agrees that this Agreement has
been reviewed by and negotiated by and between them, that in such negotiations
each of them has been represented by counsel and that the final agreement
contained herein, including the language whereby it has been expressed,
represents the joint efforts of the Parties hereto and their counsel.
Accordingly, in interpreting this Agreement or any provision hereof, no
presumption shall apply against any Party hereto as being responsible for the
wording or drafting of this Agreement or any such provision, and ambiguities, if
any, in this Agreement shall not be construed against any Party, irrespective of
which Party may be deemed to have authored the ambiguous provision.

 

(b)        The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word "any" shall mean "any
and all" unless otherwise clearly indicated by context.

 

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(c)         The headings of Articles and Sections of this Agreement are for ease
of reference only and shall not affect the meaning or interpretation of this
Agreement in any way.

 

15.15     Section 365(n). All licenses granted under this Agreement are deemed
to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
right to “intellectual property” as defined in Section 101 of such Code. The
Parties agree that each licensee may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code, regardless of whether either Party
files for bankruptcy in the United States or other jurisdiction.

 

In Witness Whereof, the Parties, intending to be legally bound hereby, have
caused their duly authorized representatives to execute this Agreement,
effective as of the Effective Date.

 

LEICA Biosystems Newcastle Ltd.     By: /s/ David Budd Name: David Budd Title:
Company Director Date: 30 Dec 2013      By: /s/ Kees Van Ophem Name: Kees Van
Ophem Title: General Counsel & VP Date:  23.12.`13     ARNO therapeutics, inc.  
  By: /s/ Glenn Mattes Name: Glenn Mattes Title: CEO Date: 1/6/2014

 

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Attachment 1

 

Form of Project Agreement

 

Project Agreement No. [ ]

 

Pursuant to Master FRAMEWORK Agreement 

 

This Project Agreement No. [ ] (“Project Agreement”) is entered into by and
between Leica Biosystems Newcastle Ltd. (“LBS”) and Partner Name (“ARNO”)
effective as of [                ] (“PA Effective Date”) pursuant to and subject
to the Development and Commercialization Agreement effective [ MONTH, DAY, YEAR
] between the Parties (the “Master Agreement”), which is incorporated by
reference herein.

 

Pursuant to the Master Agreement, LBS has agreed to perform certain activities
in accordance with written Project Agreements, such as this one, executed from
time-to-time.

 

The Parties hereby agree as follows:

 

1.Definitions. The terms in this Project Agreement with initial letters
capitalized, whether used in the singular or the plural, shall have the meaning
set forth herein, and if not defined herein, the meaning set forth in the Master
Agreement.

 

1.1“Biomarker” means [  ].

1.2“Drug” means [  ].

1.3“Indication” means, based on the Clinical Trials and the SOW as of the PA
Effective Date, the use of the Product as [              ].

1.4“Intended Use” means [                           ].

 

2.Project Agreement and Project. This Project Agreement constitutes a Project
Agreement under the Master Agreement and this Project Agreement and the Project
(as defined below) are subject to the terms and provisions of the Master
Agreement. The following information pertains to this Project Agreement and
Project.

 

Objective of Project    

Summary description of the specific work to be performed by LBS under this
Project Agreement and projected timelines for completion of work:

 

   

Summary description of Assay that is the subject of this Project Agreement and
Project:

 

    SOW   [Attachment 1 to Project Agreement] Budget for payments by ARNO for
conduct of Project  

[Copy Budget in table below]

[Attachment 2 to Project Agreement]

For fee-for-service Projects, LBS FTE-days for completion of work under this
Project Agreement:    

 

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Objective of Project     For fee-for-service Projects, total FTE Payment by ARNO
under this Project Agreement:     Projected out of pocket costs under this
Project Agreement:     ARNO Materials to be provided (as applicable):     For
Milestone-based Projects, Milestones Payments by ARNO (pursuant to Section 9.4
of the Master Agreement):     Identification of ARNO Collaborator(s) (as
applicable):     ARNO Market Countries     Projected Commercialization Payments
under Section 9.3 (as applicable):    

 

3.Budget and Cost Overview.

 

[Insert budget table]

 

4.Modification of the Master Agreement. The Parties expressly agree to the
following modifications of the Master Agreement that will only apply to this
particular Project Agreement (and this particular Project) and will not apply
any other Project Agreement or Project (unless expressly provided for in such
other Project Agreement): [this section would only be included, as applicable,
in the case of modifications to the Master Agreement].

 

5.Term. The term of this Project Agreement will commence on the PA Effective
Date set forth above and will continue until the services described in this
Project Agreement are completed, unless this Project Agreement is terminated in
accordance with the Master Agreement (such period being the “PA Term”).

 

6.Representations and Warranties. Each Party hereby restates and confirms the
representations and warranties as set forth in the Master Agreement, where
‘Effective Date’ is replaced by ‘PA Effective Date’.

 

7.Survival. Termination of this Project Agreement by either Party for any reason
shall not affect the rights and obligations of the Parties accrued prior to the
effective date of termination of this Project Agreement or the obligations that
survive such termination in accordance with the Master Agreement.

 

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In Witness Whereof, intending to be legally bound, the Parties hereto have duly
executed this Project Agreement effective as of the PA Effective Date.

  

LEICA Biosystems Newcastle Ltd.     By:   Name:   Title:   Date:       By:  
Name: Title:   Date:       ARNO therapeutics, inc.     By: Name: Title: Date:

 

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