Exhibit 10.48

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

LICENSE, MARKETING AND DEVELOPMENT AGREEMENT

 

BY AND BETWEEN

 

ANTHROGENESIS CORPORATION, D/B/A CCT

 

AND

 

ALLIQUA, INC.

 

NOVEMBER 14, 2013

 

 

 

 

TABLE OF CONTENTS

 

Article 1 DEFINITIONS 1     Article 2 LICENSES 10       2.1 License to Alliqua.
10       2.2 Exclusivity. 10       2.3 Alliqua Sublicense Rights. 11       2.4
Third Party Licenses. 11       2.5 CCT Retained Rights 12       2.6 Right of
First Offer. 12       Article 3 GOVERNANCE 13       3.1 Joint Steering
Committee. 13       3.2 Alliance Managers. 15       3.3 Commercial Launch Team
15       3.4 Promotional Materials. 15       Article 4 DEVELOPMENT 15       4.1
Joint Development Plan; Alliqua Activities. 15       4.2 Records and Reports. 16
      4.3 Subcontracts 16       Article 5 REGULATORY MATTERS 18       5.1
Regulatory Activities. 18       5.2 Regulatory Reports; Meetings with Regulatory
Authorities. 18       5.3 Regulatory Costs. 18       5.4 Notification of
Threatened Action. 19       5.5 Adverse Event Reporting and Safety Data
Exchange. 19       5.6 Remedial Actions. 19       5.7 Rebate Processing and
Government Price Reporting. 20       Article 6 COMMERCIALIZATION 20       6.1
Commercialization Responsibilities. 20       6.2 Commercialization Plan. 20    
  6.3 Commercial Diligence. 21       6.4 Records and Reports. 21       6.5
Commercialization Outside the Territory. 21

 

 

 

 

Article 7 COMPENSATION 21       7.1 Annual License Fee. 22       7.2 Milestone
Payments. 22       7.3 Royalties. 22       7.4 Market Condition Change. 23      
7.5 Payment Method; Late Payments. 23       7.6 Records 23       7.7 Audits. 23
      7.8 Taxes. 24       7.9 Annual Fee on Medical Device Manufacturers and
Importers. 24       Article 8 INTELLECTUAL PROPERTY MATTERS 24       8.1
Prosecution of Patents. 24       8.2 Inventions Generally. 25       8.3
Enforcement of CCT Patents. 25       8.4 Infringement of Third Party Rights in
the Territory. 26       8.5 Patent Marking. 27       8.6 Trademarks. 27      
Article 9 REPRESENTATIONS AND WARRANTIES; COVENANTS 28       9.1 Mutual
Representations and Warranties 28       9.2 Additional Representations and
Warranties of CCT 29       9.3 Mutual Covenants. 30       9.4 Disclaimer. 30    
  Article 10 INDEMNIFICATION 31       10.1 Indemnification by CCT 31       10.2
Indemnification by Alliqua 31       10.3 Indemnification Procedures. 31      
10.4 Limitation of Liability 32       10.5 Insurance 32       Article 11
CONFIDENTIALITY 33       11.1 Confidentiality. 33       11.2 Authorized
Disclosure 33       11.3 Return of Confidential Information 33       11.4
Publicity; Terms of the Agreement; Confidential Treatment. 34

 

 

 

 

11.5 Technical Publication. 35       11.6 Equitable Relief. 35       Article 12
TERM AND TERMINATION 35       12.1 Term. 35       12.2 Termination by CCT. 35  
    12.3 Termination for Breach. 36       12.4 Termination for Bankruptcy Code.
37       12.5 Termination for Safety, Legal or Economic Risks. 37       12.6
Effect of Termination. 38       12.7 Survival 40       Article 13 DISPUTE
RESOLUTION 40       13.1 Disputes. 40       13.2 Internal Resolution. 40      
13.3 Patent and Trademark Disputes. 40       13.4 Equitable Relief 40      
Article 14 MISCELLANEOUS 40       14.1 Entire Agreement; Amendment. 40      
14.2 Force Majeure. 41       14.3 Notices. 41       14.4 No Strict Construction;
Headings 42       14.5 Assignment 42       14.6 Performance by Affiliates. 43  
    14.7 Further Actions. 43       14.8 Severability. 43       14.9 No Waiver.
43       14.10 Independent Contractors. 43       14.11 Governing Law. 43      
14.12 Counterparts. 44

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

  

LICENSE, MARKETING AND DEVELOPMENT AGREEMENT

 

This License, MARKETING AND DEVELOPMENT Agreement (the “Agreement”) is entered
into as of November 14, 2013 (the “Effective Date”) by and between Anthrogenesis
Corporation, d/b/a CELGENE CELLULAR THERAPEUTICS (“CCT”), a New Jersey
corporation having a principal place of business at 33 Technology Drive, 2nd
Floor, Warren, NJ 07059 (“CCT”), and Alliqua, INC., a Florida corporation having
a principal place of business at 2150 Cabot Boulevard West, Langhorne,
Pennsylvania (“Alliqua”). Alliqua and CCT may each be referred to as a “Party”
or collectively be referred to as the “Parties”.

 

RECITALS

 

Whereas, CCT owns or has rights to placental based products, including
intellectual property relating thereto, and is willing to license such
intellectual property to Alliqua, and Alliqua desires to accept such license;

 

Whereas, CCT and Alliqua desire to establish a collaboration for the development
and commercialization of Licensed Products in the Field in the Territory (each,
as defined below), in accordance with the terms and conditions set forth herein;
and

 

Whereas, concurrently with the signing of this Agreement, Celgene Corporation
(“Investor”) and Alliqua are entering into a Stock Purchase Agreement (the
“Stock Purchase Agreement”) pursuant to which Investor intends to purchase
certain securities of Alliqua.

 

Now, Therefore, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the Parties
agree as follows:

 

Article 1
DEFINITIONS

 

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 elsewhere in this Agreement (and derivative
forms of them shall be interpreted accordingly). The terms “include,”
“includes,” “including” and derivative forms of them shall be deemed followed by
the phrase “without limitation” regardless of whether such phrase appears there
(and with no implication being drawn from its inconsistent inclusion or
non-inclusion).

 

“510(k)” means a marketing authorization issued by the FDA pursuant to Section
510(k) of the Act, whereby the FDA clears a medical device for sale in the
United States, determining that the medical device is substantially equivalent
to legally marketed predicate devices.

 

“Accounting Standards” has the meaning set forth in the definition of Net Sales.

 

“Acquired Entity” has the meaning set forth in Section 2.2(d).

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Acquiring Entity” has the meaning set forth in Section 2.2(c).

 

“Act” means the Federal Food, Drug, and Cosmetic Act, as amended, and the rules,
regulations, guidelines and requirements of the FDA as may be in effect from
time to time.

 

“Additional Territory Transaction” has the meaning set forth in Section 6.5.

 

“Affiliate” means, with respect to a Person, any Person that controls, is
controlled by or is under common control with such first Person. For purposes of
this definition only, “control” means (a) to possess, directly or indirectly,
the power to direct the management or policies of a Person, whether through
ownership of voting securities, by contract relating to voting rights or
corporate governance or otherwise, or (b) to own, directly or indirectly, fifty
percent (50%) or more of the outstanding securities or other ownership interest
of such Person. For the purposes of this Agreement, neither Party shall be
considered an Affiliate of the other, and the Affiliates of each Party shall not
be considered Affiliates of the other Party or of any of such other Party’s
Affiliates.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Alliance Manager” has the meaning set forth in Section 3.2.

 

“Alliqua” has the meaning set forth in the Preamble.

 

“Alliqua Indemnitees” has the meaning set forth in Section 10.1.

 

“Alliqua Permitted Subcontractor” has the meaning set forth in Section 4.3(e).

 

“Alliqua Sublicense Agreement” has the meaning set forth in Section 2.3(a).

 

“Annual License Fee(s)” has the meaning set forth in Section 7.1.

 

“Audited Party” has the meaning set forth in Section 7.7.

 

“Auditing Party” has the meaning set forth in Section 7.7.

 

“Bankrupt Party” has the meaning set forth in Section 12.4.

 

“Bankruptcy Code” has the meaning set forth in Section 12.4.

 

“Base Purchase Price” means, with respect to a Licensed Product, (i) the
purchase price of such Licensed Product on a per unit basis, as defined in the
Supply Agreement, or (ii) if the Licensed Product is manufactured on Alliqua’s
behalf by a Third Party in accordance with the Supply Agreement, the amount paid
to such Third Party on a per unit basis for such Licensed Product, or (iii) if
the Licensed Product is manufactured by Alliqua in accordance with the Supply
Agreement, [****].

 

-2-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Biovance” means decellularized, dehydrated human amniotic membrane, as produced
according to the CCT Technology as of the Effective Date or thereafter, which
are marketed under the Biovance name.

 

“Business Day” means any day (other than a Saturday, Sunday or a legal holiday)
on which banks are open for general business in New York, New York.

 

“CCT” has the meaning set forth in the Preamble.

 

“CCT Indemnitees” has the meaning set forth in Section 10.2.

 

“CCT Know-How” means all Know-How Controlled by CCT as of the Effective Date or
during the Term that is necessary or useful for the Development or
Commercialization of the Licensed Products.

 

“CCT Mark(s)” has the meaning set forth in Section 8.6(b).

 

“CCT Patents” means (i) the Patents listed in Exhibit A and (ii) any other
Patents in the Territory that issue from, or that claim the priority of, any of
the Patents listed in Exhibit A in the Field in the Territory.

 

“CCT Technology” means the CCT Know-How and the CCT Patents.

 

“Claims” has the meaning set forth in Section 10.1.

 

“Cost of Goods Sold” or “COGS” means, with respect to Licensed Products, the
cost of goods sold as determined in accordance with GAAP and as reflected on the
published financial statements of Alliqua.

 

“Commercialization Plan” has the meaning set forth in Section 6.2.

 

“Commercialize” or “Commercialization” means to package (from bulk to finished
form), label, market, promote, sell, offer for sale and/or distribute (but not
to manufacture or have manufactured, except to the extent packaging and labeling
hereunder is considered to be manufacturing).

 

“Commercially Reasonable Best Efforts” means, with respect to Alliqua’s
activities under this Agreement, the carrying out of such activities with a
level of effort and resources consistent with the commercially best reasonable
practices of a similarly situated company in the pharmaceutical device industry
that would be applied to the research, development, packaging, labeling or
commercialization of a pharmaceutical product comparable to the Licensed Product
at a similar stage of development or commercialization (but explicitly ignoring
the royalty, milestone and other payments due CCT under this Agreement),
provided that Alliqua’s effort with regard to the Development and
Commercialization of each Licensed Product shall be no less strenuous than the
effort exerted by [****] in the development and commercialization of any other
present or future product or compound.

 

-3-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Competing Product” means any advanced biologic wound care biological skin
substitute product [****] in the Field, other than a Licensed Product.

 

“Confidential Information” of a Party means any and all information of a
confidential or proprietary nature disclosed by such Party to the other Party
under this Agreement or under the Prior CDA, whether in oral, written, graphic
or electronic form.

 

“Control” means, with respect to any particular Know-How or Patent, that a Party
(a) owns or (b) has a license (other than a license granted to such Party under
this Agreement) to such Know-How or Patent and, in each case, has the ability to
grant to the other Party access, a license, or a sublicense (as applicable) to
such Know-How or Patent on the terms and conditions set forth in this Agreement
without violating the terms of any then-existing agreement or other arrangement
with any Third Party.

 

“Cover” means, with respect to a particular item and a particular Patent, that
such Patent claims or covers, in any of the countries of manufacture, use,
and/or sale, (a) the composition of such item, any of its ingredients or
formulations or any product containing or that is made using such item (by
virtue of such product containing or being made using such item); (b) a method
of making or using any of the foregoing things referred to in (a); (c) an item
used or present in the manufacture of any of the foregoing things referred to in
(a); and/or (d) the method by which such item was discovered or identified, or
another item present during or used in such method.

 

“Covered Opportunity” has the meaning set forth in Section 2.6.

 

“Develop” or “Development” means activities that relate to developing a Licensed
Product or a Competing Product, including clinical trials. Development (with
respect to Licensed Products, but not Competing Products) shall exclude
manufacturing, Commercialization, and obtaining and supporting Regulatory
Clearances and/or Approvals.

 

“Development Costs” means the out-of-pocket and internal costs and expenses
associated with particular Development activities for which Alliqua is
responsible under each Joint Development Plan.

 

“Development Records” has the meaning set forth in Section 4.2.

 

“Dollar” or “$” means a USA dollar.

 

“ECMs” means extracellular matrix derived from the human placenta, as produced
according to the CCT Technology as of the Effective Date or thereafter, which
may be (but is not necessarily) formulated into [****],[****], or [****].

 

“Event of Bankruptcy” has the meaning set forth in Section 12.4.

 

“Executive Officer” means, with respect to CCT, its Chief Executive Officer or
such Chief Executive Officer’s designee, or such other person holding a similar
position designated by CCT from time to time, and with respect to Alliqua, its
Chief Executive Officer or such Chief Executive Officer’s designee, or such
other person holding a similar position designated by Alliqua from time to time.

 

-4-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“FD&C Act” means the USA Federal Food, Drug and Cosmetic Act, as amended.

 

“FDA” means the USA Food and Drug Administration or any successor entity.

 

“Field” means acute and chronic non-healing wounds: pressure ulcers, venous
ulcers, diabetic ulcers, chronic vascular ulcers, tunnel/undermined wounds,
surgical wounds (donor sites/grafts, dehiscence), trauma wounds (abrasions,
lacerations, second degree burns, and skin tears), and draining wounds.

 

“First Commercial Sale” means, with respect to a Licensed Product, the first
sale, transfer or disposition for value or for end use to a Third Party of such
Licensed Product in a given regulatory jurisdiction after Regulatory Clearance
and/or Approval has been obtained in such jurisdiction.

 

“GAAP” means generally accepted accounting principles in the United States,
consistently applied.

 

“Governmental Authority” means any multi-national, federal, state, local,
municipal, provincial or other governmental authority of any nature (including
any governmental division, prefecture, subdivision, department, agency, bureau,
branch, office, commission, council, court or other tribunal).

 

“Government Price Reporting” has the meaning set forth in Section 5.7.

 

“Gross Margin” means Net Sales of a Licensed Product minus the Purchase Price,
as determined in accordance with GAAP.

 

“Improvements” means an invention, idea, concept, formula, design, technique or
improvement (whether or not patentable or subject to any other form of
intellectual property right registration) to a Licensed Product developed,
conceived or reduced to practice subsequent to the date hereof in the Field.

 

“Indemnified Party” has the meaning set forth in Section 10.3.

 

“Indemnifying Party” has the meaning set forth in Section 10.3.

 

“Infringement” has the meaning set forth in Section 8.3(a).

 

“Infringement Dispute” has the meaning set forth in Section 8.4(b).

 

“Initial Term” has the meaning set forth in Section 12.1.

 

“Investor” has the meaning set forth in the Recitals.

 

-5-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Joint Development Plan” means a plan established by the Parties as described in
Section 4.1 setting forth the activities to be conducted by or on behalf of
Alliqua to Develop the Licensed Products in accordance with the terms of Article
4.

 

“Joint Steering Committee” or “JSC” means the committee formed by the Parties as
described in Section 3.1.

 

“JSC Dispute” has the meaning set forth in Section 3.1(c)(i).

 

“JSC Selected Subcontractor” has the meaning set forth in Section 4.3(b).

 

“JSC Selected Subcontractor Agreement” has the meaning set forth in Section
4.3(b).

 

“Know-How” means all technical information, data and know-how, including
inventions, discoveries, trade secrets, specifications, instructions, processes,
formulae, expertise, materials, methods, protocols and other technology
applicable to formulations, compositions or products or to their manufacture,
development, registration, use or marketing or processes for their manufacture,
formulations containing them or compositions incorporating or comprising them,
and including all biological, chemical, pharmacological, biochemical,
toxicological, pharmaceutical, physical and analytical, safety, quality control,
manufacturing, preclinical and clinical data, instructions, processes, formula,
and expertise.

 

“Launch Year” means, for each of Biovance and ECMs, (i) with respect to the
first Launch Year, the 12-month period beginning on the first day of the
calendar month immediately preceding the first anniversary of the First
Commercial Sale of a Licensed Product and (ii) with respect to any subsequent
Launch Year, the 12-month period beginning on the first day of the relevant
anniversary of the first Launch Year. Solely by way of example, if the First
Commercial Sale occurs on April 15, 2014, the first Launch Year shall commence
on April 1, 2014 and each subsequent Launch Year shall commence on April 1 of
each subsequent year.

 

“Launch Year Quarter” means the first three (3) calendar month period, second
three (3) calendar month period, third three (3) calendar month period and
fourth three (3) calendar month period, in each case, commencing with the first
day of each Launch Year. Solely by way of example, if the Launch Year commences
on April 1, 2014, the first Launch Year Quarter shall mean the period commencing
on April 1 and ending on June 30, the second Launch Year Quarter shall mean the
period commencing on July 1 and ending on September 30, the third Launch Year
Quarter shall mean the period commencing on October 1 and ending on December 31
and the fourth Launch Year Quarter shall mean the period commencing January 1
and ending on March 31.

 

“Laws” means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any federal, national, multinational,
state, provincial, county, city or other political subdivision, domestic or
foreign.

 

“Liabilities” has the meaning set forth in Section 10.1.

 

-6-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Licensed Product” means each of Biovance and ECMs and any and all Improvements
thereof; “Licensed Products” shall mean Biovance and ECMs, collectively.

 

“Management Change Transaction” has the meaning set forth in Section 2.2(c).

 

“Market Condition Change” means, for Biovance, at any time during the [****] of
this Agreement, and for ECMs, at any time during the [****] after the First
Commercial Sale thereof, factors outside the reasonable control of Alliqua,
including supply shortages or outages, changes in any Governmental Authority or
Regulatory Authority regulation or reimbursement rate, and/or any Regulatory
Authority action which would adversely affect the Commercialization of such
Licensed Product in any material respect.

 

“Market Condition Financial Terms” has the meaning set forth in Section 7.4.

 

“Milestone Event” has the meaning set forth in Section 7.2.

 

“Milestone Payment” has the meaning set forth in Section 7.2.

 

“Minimum Sales Threshold” has the meaning set forth in Section 12.2(b)(i).

 

“Negotiation Period” has the meaning set forth in Section 2.6.

 

“Net Sales” means, with respect to any Licensed Product, gross amounts invoiced
by Alliqua or its Affiliates to Third Parties for the sale or other commercial
disposition of such Licensed Product anywhere within the Territory, including
sales to wholesale distributors, less deductions from such amounts calculated in
accordance with the Accounting Standards so as to arrive at “net sales” under
the Accounting Standards, and further reduced by write-offs of accounts
receivables or increased for collection of accounts that were previously written
off.

 

(a)          Net Sales, and any and all set-offs against gross amounts invoiced,
shall be determined from books and records maintained in accordance with the
Accounting Standards, consistently applied throughout the organization and
across all products of the entity whose sales of any Licensed Product are giving
rise to Net Sales. Sales or other commercial dispositions of Licensed Products
between Alliqua and its Affiliates, and Licensed Products provided to Third
Parties without charge, in connection with research and development, clinical
trials, compassionate use, humanitarian and charitable donations, or indigent
programs or for use as samples shall be excluded from the computation of Net
Sales, and no payments will be payable on such sales or such other commercial
dispositions, except where such an Affiliate is an end user of the Licensed
Product.

 

(b)          If a Licensed Product is sold or otherwise commercially disposed of
for consideration other than cash or in a transaction that is not at arm’s
length between the buyer and the seller, then the gross amount to be included in
the calculation of Net Sales shall be the amount that would have been invoiced
had the transaction been conducted at arm’s length and for cash. Such amount
that would have been invoiced shall be determined, wherever possible, by
reference to the average selling price of the relevant Licensed Product in arm’s
length transactions in the relevant country.

 

-7-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(c)          Notwithstanding the foregoing, in the event a Licensed Product is
sold as a Combination Product, Net Sales shall be calculated by multiplying the
Net Sales of the Combination Product by the fraction A/(A+B), where A is the
gross invoice price of the royalty- bearing product if sold separately in a
country and B is the gross invoice price of the other product(s) included in the
Combination Product if sold separately in such country. If no such separate
sales are made by Alliqua or its Affiliates in a country, Net Sales of the
Combination Product shall be calculated in a manner to be negotiated and agreed
upon by the Parties, reasonably and in good faith, prior to any sale of such
Combination Product, which shall be based upon the relative value of the active
components of such Combination Product.

 

As used in this definition: (i) “Accounting Standards” means GAAP (United States
Generally Accepted Accounting Principles), and (ii) “Combination Product” means
any product that comprises a Licensed Product sold in conjunction with another
active component so as to be a combination product (whether packaged together or
in the same therapeutic formulation).

 

“Non-Bankrupt Party” has the meaning set forth in Section 12.4.

 

“Notice of Interest” has the meaning set forth in Section 2.6.

 

“Party” or “Parties” has the meaning set forth in the Preamble.

 

“Patents” means, collectively, (a) pending patent applications (and patents
issuing therefrom), issued patents, regional patents, utility models and
designs; and (b) reissues, divisions, substitutions, confirmations, renewals,
extensions, provisionals, registrations, validations, re-examinations,
additions, continuations, continued prosecution applications,
continuations-in-part, divisionals, or any Supplementary Protection Certificates
or restoration of patent terms of or to any patents, patent applications,
utility models or designs, in each case being enforceable within the applicable
territory.

 

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

 

“Prior CDA” means that certain Mutual Confidentiality Agreement between the
Parties dated March 19, 2013.

 

“Product Marks” has the meaning set forth in Section 8.6(a).

 

“Promotional Materials” has the meaning set forth in Section 3.4.

 

“Purchase Price” means, with respect to a Licensed Product: (a) the Base
Purchase Price; plus (b) to the extent not included in amounts paid under the
Supply Agreement or a Third Party manufacturer and incurred by Alliqua in
connection with the manufacture of such Licensed Product, any [****] and [****]
incurred in connection with the procurement of such Licensed Product; plus (c)
any and all reasonable and documented costs actually incurred by Alliqua to
[****]; plus (d) all amounts paid by Alliqua in respect of [****] applied to the
sale of such Licensed Product; in each case, as determined in accordance with
GAAP.

 

-8-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“Regulatory Clearances and/or Approvals” means all approvals necessary for the
commercial sale of a Licensed Product for any indication in a given country or
regulatory jurisdiction in the Territory, which shall include satisfaction of
all applicable regulatory and notification requirements, and shall be deemed to
include any stockpiling by any Governmental Authority for civilian or military
use, but which shall exclude any pricing and reimbursement approvals.

 

“Regulatory Authority” means the FDA or any corollary agency or Governmental
Authority involved in granting Regulatory Clearances and/or Approvals in any
other country or jurisdiction in the Territory.

 

“Regulatory Materials” means regulatory applications, submissions,
notifications, communications, correspondence, registrations, Regulatory
Clearances and/or Approvals and/or other filings made to, received from or
otherwise conducted with a Regulatory Authority in order to Develop,
manufacture, market, sell or otherwise Commercialize a Licensed Product in a
particular country or jurisdiction.

 

“Remedial Action” has the meaning set forth in Section 5.6.

 

“Renewal Term” has the meaning set forth in Section 12.1.

 

“Revenue” has the meaning set forth in Section 8.3(e).

 

“Royalty Term” has the meaning set forth in Section 7.3(b).

 

“Safety Data and Exchange Agreement” has the meaning set forth in Section 5.5.

 

“Sales Threshold Default” has the meaning set forth in Section 12.2(b)(i).

 

“Sales Threshold Default Notice” has the meaning set forth in Section
12.2(b)(i).

 

“Secretary Designee” has the meaning set forth in Section 3.1(d).

 

“Selected Subcontractor” has the meaning set forth in Section 4.3(a).

 

“Selected Subcontractor Agreement” has the meaning set forth in Section 4.3(a).

 

“Sell-Off Period” has the meaning set forth in Section 12.6(d).

 

“Stock Purchase Agreement” has the meaning set forth in the Recitals.

 

“Subject Transaction” has the meaning set forth in Section 2.2(d).

 

“Supply Agreement” means that certain Supply Agreement entered into by the
Parties, dated November 14, 2013.

 

-9-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

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

 

“Territory” means USA.

 

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

 

“USA” or “United States” means the United States of America, including all
possessions and territories thereof.

 

Article 2
LICENSES

 

2.1          License to Alliqua.

 

(a)          Subject to the terms and conditions of this Agreement, CCT hereby
grants to Alliqua during the Term an exclusive, royalty-bearing license, with
the right to sublicense solely as provided in Section 2.3, under the CCT
Technology, to Develop and Commercialize, including to use, offer for sale and
sell Licensed Products in the Field in the Territory. Alliqua shall not, and
shall not permit any of its Affiliates to, use or practice any CCT Technology
outside the scope of the license granted to it under this Section 2.1(a). CCT
hereby expressly retains for itself and others exclusive rights under the CCT
Technology to manufacture Licensed Products for Alliqua (it being understood and
agreed that the Parties have entered into a Supply Agreement as of the Effective
Date to address the supply of Licensed Products). For the avoidance of doubt, as
of the Effective Date, the license grant set forth in this Section 2.1(a) is
solely in connection with Alliqua’s right to Develop and Commercialize Licensed
Products and is subject to CCT’s right to Develop ECMs pursuant to Section 4.1
below.

 

(b)          Alliqua may not enhance, decompile, disassemble, improve, modify,
change, reverse assemble or reverse engineer Licensed Products or any part
thereof, except as: (i) set forth in the Supply Agreement; (ii) expressly set
forth in the applicable Joint Development Plan; or (iii) otherwise agreed to by
the JSC.

 

2.2          Exclusivity.

 

(a)          As partial consideration for the grant of rights set forth in
Section 2.1(a), Alliqua agrees that during the Term of this Agreement, it and
its Affiliates shall not, directly or indirectly, Develop or Commercialize any
Competing Product in the Territory.

 

(b)          Subject to Section 2.2(c) and 2.2(d), as partial consideration for
the services to be performed by Alliqua hereunder, CCT agrees that during the
Term of this Agreement, it shall not, directly or indirectly, Commercialize any
Competing Product in the Territory.

 

(c)          Nothing in this Section 2.2 shall prohibit any Acquiring Entity of
CCT or any of its respective Affiliates or sublicensees from continuing,
furthering or performing (i) any activities in which it was engaged prior to the
effective date of a Management Change Transaction or (ii) any activities
relating to products developed by an Acquiring Entity or CCT (or any other Third
Party) without accessing or practicing technology or information made available
to Alliqua under this Agreement.  For purposes of this Section 2.2(c), (x)
“Management Change Transaction” shall mean a transfer to a Third Party of all or
substantially all of CCT’s assets to which this Agreement relates, or the merger
or consolidation with, or acquisition of CCT by a Third Party and (y) “Acquiring
Entity” shall mean such Third Party described in clause (x).

 

-10-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(d)          Nothing in this Section 2.2 shall prohibit CCT, Alliqua or any of
their respective Acquired Entities from continuing, furthering or performing (i)
any activities in which an Acquired Entity was engaged prior to the effective
date of a Subject Transaction or (ii) any activities relating to products
developed by an Acquired Entity, CCT or Alliqua (or any other Third Party)
without accessing or practicing technology or information made available to
Alliqua under this Agreement. For purposes of this Section 2.2(d), (x) “Subject
Transaction” shall mean a transfer to CCT or Alliqua, as the case may be, by a
Third Party of all or substantially all of such Third Party’s assets, or the
merger or consolidation with, or acquisition of, a Third Party by CCT or
Alliqua, as the case may be, and (y) “Acquired Entity” shall mean such Third
Party described in clause (x).

 

2.3          Alliqua Sublicense Rights.

 

(a)          Alliqua shall have the right to grant sublicenses of the licenses
granted in Section 2.1(a) to (i) its Affiliates without the consent of CCT and
(ii) any Third Party for the sole purpose of providing services directly to
Alliqua, so that Alliqua may perform its rights and/or obligations of Alliqua
hereunder (but which, for the avoidance of doubt, shall not include a wholesale
sublicense of the licenses granted in Section 2.1(a) for purposes of
transferring Alliqua’s rights and obligations hereunder in their entirety), upon
the prior written consent of CCT as determined by CCT in good faith, in each
case, solely as set forth in this Section 2.3 (each such sublicense, a “Alliqua
Sublicense Agreement”). Alliqua shall remain primarily responsible for all of
its Affiliates’ activities and any and all failures by its Affiliates to comply
with the applicable terms of this Agreement.

 

(b)          Alliqua shall, within thirty (30) days after granting any Alliqua
Sublicense Agreement, notify CCT of the grant of such sublicense and provide CCT
with a true and complete copy of the Alliqua Sublicense Agreement. Each Alliqua
Sublicense Agreement shall be consistent with the terms and conditions of this
Agreement and the Affiliate shall be bound by and subject to all applicable
terms and conditions of this Agreement in the same manner and to the same extent
as Alliqua is bound thereby.

 

2.4          Third Party Licenses.

 

(a)          For the avoidance of doubt, CCT shall be responsible for payment
obligations to Third Parties for Patents and Know-How within the CCT Technology
that are licensed to CCT by a Third Party prior to the Effective Date, if any.
Alliqua hereby acknowledges and agrees that its sublicense under such
in-licensed CCT Technology (if any) is subject to the terms and conditions of
the applicable license agreement governing CCT’s license of such in-licensed CCT
Technology.

 

-11-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          The responsibility, necessity and handling of any Third Party
license required as a result of Improvements to a Licensed Product after the
Effective Date shall be agreed upon by the JSC, provided that Alliqua shall have
the right to negotiate any third party license agreement that is required as a
result of any Improvement to the CCT Technology, subject to (i) information
sharing with CCT, including apprising CCT of any offers made by Third Parties,
the substance of such offer, the status of any negotiations with Third Parties
and any other information regarding such Third Party license as reasonably
requested by CCT and (ii) CCT’s prior written consent of such Third Party
license agreement. The costs associated with any Third Party license agreement
shall be allocated as follows: (x) if such Third Party license is required in
order to Develop or Commercialize the CCT Technology existing on or after the
Effective Date, the costs of such Third Party license shall be [****], and (y)
if such Third Party license is required in order to Develop or Commercialize the
CCT Technology made on or after the Effective Date, the costs of such Third
Party license shall be [****]. Alliqua may deduct up to [****] of the amount of
royalties paid by Alliqua to a Third Party for such license against amounts
payable to CCT hereunder, but in no event shall Alliqua deduct an amount greater
than [****] of any payment of the royalties due and payable to CCT for the
Licensed Products in accordance with Article 7 below. For the avoidance of
doubt, Alliqua may not carry over any amounts from any prior payment period.

 

2.5          CCT Retained Rights. The licenses granted by CCT under this
Agreement are limited to those grants specifically set forth in Section 2.1(a)
and Section 8.6(b). Nothing in this Agreement will be construed to grant any
rights or licenses to any other intellectual property rights of CCT. All rights,
licenses, benefits and privileges not expressly granted to Alliqua hereunder are
reserved by CCT. For the avoidance of doubt, CCT shall retain all rights in all
CCT intellectual property (including the CCT Technology) (i) outside the Field
in the Territory and (ii) in any field (including the Field) outside the
Territory. Further, CCT shall have the right to research, Develop, manufacture
and Commercialize any products other than Licensed Products in the Field in the
Territory.

 

2.6          Right of First Offer. CCT grants to Alliqua a right of first offer
(on the terms and conditions set forth in this Section 2.6) with respect to the
Commercialization of any Competing Product in the Field in the Territory
Developed by CCT (a “Covered Opportunity”). CCT will promptly notify Alliqua in
writing of each Covered Opportunity. If, within fifteen (15) Business Days of
receiving such notice from CCT, CCT receives a notice in writing from Alliqua
that Alliqua wishes to enter into negotiations regarding the Covered Opportunity
(the “Notice of Interest”), then CCT shall negotiate exclusively with Alliqua in
good faith for a period of sixty (60) days from the date of CCT’s notice to
Alliqua of the Covered Opportunity (or such longer period of time as may be
agreed to by the Parties in writing) (the “Negotiation Period”) with respect to
a definitive agreement for the Commercialization of the Covered Opportunity by
Alliqua. If (a) Alliqua indicates in writing that it does not wish to enter into
negotiations regarding such Covered Opportunity, (b) CCT fails to receive a
Notice of Interest within the fifteen (15) Business Day period described above,
or (c) the Parties have not entered into such a definitive agreement by the end
of the Negotiation Period, then (i) CCT shall be free to Commercialize the
Covered Opportunity itself and/or enter into one or more agreements regarding
the Covered Opportunity with any Third Party and (ii) the restrictions set forth
in Section 2.2(b) shall automatically terminate solely with respect to CCT’s
Commercialization of such Covered Opportunity.

 

-12-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

Article 3
GOVERNANCE

 

3.1          Joint Steering Committee.

 

(a)          Within 30 days after the Effective Date, the Parties shall
establish a joint steering committee (the “Joint Steering Committee” or “JSC”).
The JSC shall oversee the performance of the Parties’ activities under this
Agreement and under each Joint Development Plan, as set forth herein, and
provide a forum for sharing advice, progress, and results relating to such
activities and shall attempt to facilitate the resolution of any disputes
between the Parties. The JSC shall appoint and oversee subcommittees as it deems
appropriate for carrying out activities under this Agreement, and shall review
the overall progress of the Parties’ collaborative efforts under this Agreement.

 

(b)          Membership; Meetings. The JSC shall be composed of three (3)
members from each of CCT and Alliqua or such equal number of members as the
Parties may agree, and shall meet, in person, by teleconference, or by
video-teleconference, at least one time per calendar quarter, or more or less
often as unanimously agreed by both Parties’ JSC members (provided that in any
event, the Parties meet at least one time per year in person). Either Party may
reasonably call a meeting upon no less than fifteen (15) Business Days’ notice.
In-person meetings shall alternate between CCT and Alliqua locations, or as
mutually agreed upon by the Parties. Each Party shall be responsible for all of
its own personnel and travel costs and expenses relating to participation in JSC
meetings. The first such meeting shall be within sixty (60) days after the
Effective Date. Any member of the JSC may designate a substitute to attend with
prior written notice to the other Party. Ad hoc guests who are subject to
written confidentiality obligations commensurate in scope to the provisions in
Article 11 may be invited, upon prior joint consent of Alliqua and CCT, to the
JSC meetings. Each Party may replace its JSC members with other of its
employees, at any time, upon written notice to the other Party.

 

(c)          Decision-Making; Limitations on JSC; JSC Disputes. Decisions of the
JSC shall be made by unanimous vote or written consent, with each Party having
collectively one vote in all decisions. The presence of at least one (1) JSC
member representing each Party shall constitute a quorum in order for decisions
to be made. The JSC shall have only such powers as are specifically delegated to
it in this Agreement, and such powers shall be subject to the terms and
conditions set forth herein. Amendments or changes to this Agreement shall be
valid and binding only upon mutual written agreement of the Parties in
accordance with Section 14.1 and the JSC shall have no authority to amend,
change or modify the terms and conditions of this Agreement. The JSC shall use
reasonable best efforts to resolve the matters within its roles and functions or
otherwise referred to it.

 

(i)          If, with respect to a matter that is subject to the JSC’s
decision-making authority: (i) the JSC cannot reach consensus within five (5)
Business Days after it has met and attempted to reach such consensus or (ii) the
Parties cannot reach consensus on whether the JSC has decision-making authority
regarding a matter within three (3) Business Days after such matter was first
raised by either Party (each of the foregoing cases, a “JSC Dispute”); then in
each such instance, the JSC Dispute in question shall be referred to the
Executive Officer of CCT and the Executive Officer of Alliqua for resolution.
The Executive Officers shall use reasonable efforts to resolve the JSC Dispute
referred to them.

 

-13-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(ii)         If the Executive Officers are unable to resolve the JSC Dispute
within five (5) Business Days, the provisions of this Section 3.1(c)(ii) shall
control:

 

(1)         if the JSC Dispute solely relates to the [****] of Licensed Products
(in each case excluding any dispute to the extent relating to [****] (including
for the avoidance of doubt, [****]), any [****] in connection with any Licensed
Product or any [****]), and the Executive Officers cannot resolve the matter
within five (5) Business Days, then the matter shall be decided by the Executive
Officer of Alliqua in good faith, giving appropriate consideration to the
reasonable business and scientific concerns of CCT; and

 

(2)         if the JSC Dispute solely relates to [****] (in each case excluding
any dispute to the extent relating to any matters which are the subject of
[****]) and the Executive Officers cannot resolve the matters within five (5)
Business Days, then the matter shall be decided by the Executive Officer of CCT
in good faith, giving appropriate consideration to the reasonable business and
scientific concerns of Alliqua.

 

(3)         Notwithstanding Sections 3.1(c)(ii)(1) and 3.1(c)(ii)(2) above, any
dispute relating to Article 7 or any financial term of this Agreement
(including, for the avoidance of doubt, any increase or purported increase in
the Base Purchase Price for any Licensed Product as contemplated by the Supply
Agreement), shall be excluded from the provisions of this Section 3.1(c)(ii) and
shall be conclusively settled in accordance with Article 13 below.

 

(iii)        Any JSC Dispute that is not covered by 3.1(c)(ii) or resolved
pursuant to Section 3.1(c)(i) or Section 3.1(c)(ii) shall be conclusively
settled in accordance with Article 13 below. For all purposes under this
Agreement, any decision made pursuant to this Section 3.1(c) shall be deemed to
be the decision of the JSC.

 

(d)          Secretary; Agenda; Minutes. The Chairperson shall be designated by
CCT. The Chairperson (who shall be a CCT designee) shall designate a secretary
of the JSC (the “Secretary Designee”) who also will be a CCT designee and who
will be responsible for calling meetings and preparing and circulating an agenda
in advance of each meeting. The Secretary Designee shall solicit agenda items
from JSC members and provide an agenda along with appropriate information for
such agenda reasonably in advance of any meeting. It is understood that such
agenda will include all items reasonably requested by any JSC member for
inclusion therein. Additionally, the Secretary Designee shall be responsible for
preparing and circulating minutes within 15 days after each meeting of the JSC
setting forth, among other things, a description, in reasonable detail, of the
discussions at the meeting and a list of any actions, decisions, or
determinations approved by the JSC. Such minutes shall be effective only after
being approved by both Parties. Definitive minutes of all JSC meetings shall be
finalized no later than 30 days after the meeting to which the minutes pertain.

 

-14-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

3.2           Alliance Managers. Promptly after the Effective Date, each Party
shall appoint an individual to act as the alliance manager for such Party (each,
an “Alliance Manager”) (who may be a member of the JSC). Each Alliance Manager
shall thereafter be permitted to attend meetings of the JSC as a nonvoting
observer (if not a member), subject to the confidentiality provisions of Article
11. The Alliance Managers shall be the primary point of contact for the Parties
regarding the activities contemplated by this Agreement and shall facilitate
communication regarding all activities hereunder. The Alliance Managers shall
lead the communications between the Parties and shall be responsible for
following-up on decisions made by the JSC. The name and contact information for
such Alliance Manager, as well as any replacement(s) chosen by CCT or Alliqua,
in their sole discretion, from time to time, shall be promptly provided to the
other Party in accordance with Section 14.3.

 

3.3           Commercial Launch Team. Within thirty (30) days of the Effective
Date Alliqua shall establish a commercial launch team with respect to the
Commercialization of Licensed Products, and shall invite at least two (2)
employees of CCT, or such number as the Parties may agree, to participate in
such commercial launch team and Alliqua shall consider in good faith, any
advice, comments or recommendations given by the CCT participants. The
commercial launch team shall, among other things, provide the Parties with
technical and other related support with respect to Commercialization, as well
as recommendations in connection therewith.

 

3.4           Promotional Materials. Alliqua will not use any Promotional
Materials in connection with the marketing, sale or distribution of the Licensed
Products until after such Promotional Materials have been reviewed by the JSC
and by CCT, as needed, and Alliqua has considered in good faith any comments of
the JSC and CCT, except that Alliqua may use, without such review, in its
introduction announcements to the trade, bill sheets and product catalog
Promotional Materials that incorporate only the Licensed Product’s name, launch
date, available packaging configurations, and the pricing and delivery terms.
For purposes of clarity, CCT shall have final discretion to approve the content
of all Promotional Materials and will be solely responsible for all Promotional
Materials. For purposes of this Agreement, “Promotional Materials” means all
labeling and advertising materials as defined in the Act and the regulations of
the FDA thereunder. For the purposes of clarity, Alliqua will be responsible for
the filing of Promotional Materials with the FDA as directed by CCT or as
otherwise required by applicable Law.

 

Article 4
DEVELOPMENT

 

4.1           Joint Development Plan; Alliqua Activities. A Joint Development
Plan for Biovance, consistent with the material terms mutually agreed upon by
the Parties, attached hereto as Exhibit B, shall be prepared by Alliqua and
presented to the JSC within ninety (90) days of the Effective Date or such other
time agreed to by the JSC. In addition, Alliqua shall submit a Joint Development
Plan for ECMs (similar in nature to the Joint Development Plan submitted for
Biovance) to the JSC no later than ninety (90) days prior to anticipated 510(k)
or other Regulatory Clearance and/or Approval in each relevant jurisdiction
within the Territory, such Joint Development Plan to be discussed in good faith
between the Parties prior to JSC submission, it being understood and agreed that
following the Effective Date, CCT shall have the right to continue to Develop
ECMs. The Parties shall, and shall cause their respective members of the JSC to,
cooperate with each other in good faith to promptly finalize a mutually
acceptable Joint Development Plan for each Licensed Product. The Parties agree
to cooperate with each other in carrying out each Joint Development Plan
consistent with the activities set forth therein. Alliqua shall use Commercially
Reasonable Best Efforts to undertake the Development activities for the Licensed
Products (and conduct such related clinical studies and perform all such related
activities) set forth in, and in accordance with, each Joint Development Plan,
subject to CCT’s right to continue to Develop ECMs. Alliqua shall be responsible
for, and shall bear all Development Costs, including any additional activities
required by health authorities or following unexpected events.

 

-15-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

4.2          Records and Reports. Alliqua shall maintain complete, current and
accurate records of (a) all work conducted by it or its Affiliates under each
Joint Development Plan; (b) all data, Know-How and Patents resulting from such
work; and (c) all Development Costs incurred in connection therewith
(collectively, the “Development Records”). At each quarterly JSC meeting, to the
extent applicable, (i) CCT shall provide to Alliqua all written updates that CCT
has provided to its management team during the previous calendar quarter with
respect to any pre-clinical development of ECMs and all other information
reasonably requested by Alliqua, including but not limited to, written updates
on all work conducted by it or its Affiliates with respect to such development
during the previous calendar quarter and (ii) Alliqua shall provide to CCT all
written updates that Alliqua has provided to its management team during the
previous calendar quarter with respect to Development and all other information
reasonably requested by CCT, including but not limited to, written updates on
(1) all work conducted by it or its Affiliates under each Joint Development Plan
during the previous calendar quarter; (2) all data, Know-How and Patents
resulting from such work during the previous calendar quarter; and (3) all
Development Costs incurred in connection therewith during the previous calendar
quarter. CCT shall have the right to audit the financial records relating to the
Development Costs in accordance with Section 7.7, and shall have the right to
review Alliqua’s Development Records during regular business hours and not more
often than once each calendar year.

 

4.3          Subcontracts. Alliqua may perform any of its Development or
Commercialization activities under this Agreement through its Affiliates and
through one or more subcontractors or consultants pursuant to a written
subcontractor agreement without the prior written consent of CCT, provided that
with respect to each subcontractor agreement entered into on or after the
Effective Date:

 

(a)          Alliqua obtains CCT’s prior written consent to the selection of
each such subcontractor (i) that will perform contract research services or (ii)
that will perform contract manufacturing services, in each case, such consent
shall not be unreasonably withheld, conditioned or delayed, and, if requested by
CCT with respect to such a specific subcontractor (each, a “Selected
Subcontractor”), Alliqua shall provide to CCT such subcontractor’s subcontractor
agreement for CCT’s review and comment (each, a “Selected Subcontractor
Agreement”), solely for the purpose of approving such Selected Subcontractor to
perform Development and/or Commercialization activities on behalf of Alliqua
pursuant to this Agreement. CCT shall have a period of five (5) Business Days
(or such other period of time as mutually agreed to by the Parties in good
faith) following receipt of a Selected Subcontractor Agreement to review and
comment upon such Selected Subcontractor Agreement, which comments Alliqua shall
consider in good faith; provided, however, that in the event CCT fails to
provide or affirmatively deny consent to use such Selected Subcontractor within
such five (5) Business Day period, then Alliqua shall be free to enter into such
Selected Subcontractor Agreement. For the avoidance of doubt, CCT’s review and
comment shall be solely limited to approval of such Selected Subcontractor as a
subcontractor who may perform Development and/or Commercialization activities on
behalf of Alliqua under this Agreement. Any comments by CCT to a Selected
Subcontractor Agreement shall not be construed by Alliqua that CCT consents to
any term or condition in such Selected Subcontractor Agreement. Alliqua shall be
solely responsible for the terms and substance of each Selected Subcontractor
Agreement, including without limitation, that each Selected Subcontractor
Agreement conforms to the terms of this Agreement as required by this Section
4.3.

 

-16-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          Alliqua obtains the JSC’s prior written consent to the selection of
each such subcontractor if the aggregate payments to such subcontractor for
services rendered with respect to work performed by such subcontractor in
connection with, or related to, any Licensed Product exceed, or are expected to
exceed, $[****] (each, a “JSC Selected Subcontractor”). If the JSC approves the
selection of a JSC Selected Subcontractor, Alliqua shall provide, at CCT’s
request, such subcontractor’s subcontractor agreement to CCT for CCT’s review
and comment (each, a “JSC Selected Subcontractor Agreement”). CCT shall have a
period of five (5) Business Days (or such other period of time as mutually
agreed to by the Parties in good faith) following receipt of a JSC Selected
Subcontractor Agreement to review and comment upon such JSC Selected
Subcontractor Agreement, which comments Alliqua shall consider in good faith.
For the avoidance of doubt, any comments by CCT to a JSC Selected Subcontractor
Agreement shall not be construed by Alliqua that CCT consents to any term or
condition in such JSC Selected Subcontractor Agreement. Alliqua shall be solely
responsible for the terms and substance of each JSC Selected Subcontractor
Agreement, including without limitation, that each JSC Selected Subcontractor
Agreement conforms to the terms of this Agreement as required by this Section
4.3. If the JSC does not agree on a selection of a subcontractor under Section
4.3(b), the Parties shall resolve the dispute under Section 3.1(c)(ii)(1).

 

(c)          Alliqua remains responsible for the work allocated to such
Affiliates, subcontractors and consultants to the same extent it would if it had
done such work itself.

 

(d)          The Affiliate or subcontractor (as the case may be) undertakes in
writing obligations of confidentiality and non-use regarding Confidential
Information, that are substantially the same as those undertaken by the Parties
pursuant to Article 11 hereof.

 

(e)          If such Affiliate or subcontractor will develop intellectual
property related to any Licensed Product in the course of performing any such
work, the Affiliate or subcontractor (as the case may be) agrees in writing to
assign to Alliqua all data, inventions, other Know-How, Patents and other
intellectual property developed in the course of performing any such work, in
each case to the extent related to such Licensed Product. Each subcontractor who
performs any Development and/or Commercialization activities on behalf of
Alliqua under this Agreement is referred to herein as an “Alliqua Permitted
Subcontractor.”

 

-17-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

Without limiting the foregoing, each Alliqua Permitted Subcontractor shall be
subject to the applicable terms and conditions of this Agreement and no
agreement with any Alliqua Permitted Subcontractor shall release Alliqua from
any of its activities under this Agreement. For purposes of determining
Alliqua’s liability under this Agreement, any time the term “Alliqua” is used in
this Agreement it includes all subcontractors performing any part of this
Agreement on behalf of Alliqua unless otherwise agreed to by CCT in writing.
Upon CCT’s reasonable written request, Alliqua shall remove or replace any
Alliqua Permitted Subcontractor (subject to compliance with the terms of any
applicable agreement entered into by Alliqua with such Alliqua Permitted
Subcontractor), if CCT determines, in its reasonable and good faith judgment,
that the continued use of such Alliqua Permitted Subcontractor is not in the
best interests of CCT.

 

Article 5
REGULATORY MATTERS

 

5.1           Regulatory Activities. CCT shall be responsible for Regulatory
Clearances and/or Approvals and shall use commercially reasonable efforts to
obtain and support Regulatory Clearances and/or Approvals in at least the United
States for Licensed Products. CCT shall file and own all right, title and
interest in all Regulatory Materials designed to obtain or support such
Regulatory Clearances and/or Approvals. Upon CCT’s reasonable request and
expense, Alliqua shall cooperate fully with, and provide assistance to, CCT in
connection with the activities set forth in this Article 5.

 

5.2           Regulatory Reports; Meetings with Regulatory Authorities. Each
Party shall keep the other Party informed of material regulatory developments
relating to Licensed Products in the Territory through regular reports at the
JSC meetings. Each Party shall provide the other Party, for review and comment,
significant draft material regulatory filings at least twenty (20) Business Days
in advance of their intended date of submission to the extent possible and on a
rolling basis as needed to any Regulatory Authority in any country or
jurisdiction and shall consider any comments thereto provided by such other
Party. Each Party shall notify the other Party as soon as practical of any
Regulatory Materials (other than routine correspondence) submitted to or
received from any Regulatory Authority in any jurisdiction and shall provide
such other Party with copies thereof within twenty (20) Business Days after
submission or receipt. Each Party shall provide the other Party with reasonable
advance notice of all meetings scheduled with any Regulatory Authority in any
country or jurisdiction concerning a Licensed Product to the extent such meeting
effects this Agreement and/or such other Party’s obligations hereunder, and
shall consider any input from such other Party in preparing for such meetings,
and in the Party's sole discretion and if permitted by the relevant Regulatory
Authority, appropriate personnel from such other Party may have the right to
attend such meetings at its own expense.

 

5.3           Regulatory Costs. [****] shall be solely responsible for all costs
and expenses incurred by either Party in the maintenance of all Regulatory
Materials for Regulatory Clearances and/or Approvals for Licensed Products in
the Territory. For the avoidance of doubt, except as provided in the Development
Plan, [****] shall be solely responsible for all costs and expenses incurred by
either Party in connection with all actions relating to insurance or federal or
state health care program reimbursement, including but not limited to clinical
or other studies in furtherance of the foregoing.

 

-18-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

5.4           Notification of Threatened Action. Each Party shall immediately
notify the other Party of any information it receives regarding any threatened
or pending action, inspection or communication by or from any Third Party,
including a Regulatory Authority, which may materially affect the Development,
Commercialization or regulatory status of a Licensed Product. Upon receipt of
such information, the Parties shall consult with each other in an effort to
arrive at a mutually acceptable procedure for taking appropriate action.

 

5.5           Adverse Event Reporting and Safety Data Exchange. As soon as
practical, the Parties shall enter into a commercially reasonable
pharmacovigilance agreement (the “Safety Data and Exchange Agreement”). The
Safety Data and Exchange Agreement shall include customary guidelines and
procedures for the receipt, investigation, recordation, communication, and
exchange (as between the Parties) of adverse event reports, pregnancy reports,
and any other information concerning the safety of any Licensed Product. Such
guidelines and procedures shall be in accordance with, and enable the Parties to
fulfill, local and national regulatory reporting activities under applicable
Laws. Furthermore, such agreed procedure shall be consistent with relevant
guidelines of the International Conference on Harmonisation, except where such
guidelines may conflict with existing local regulatory reporting or safety
reporting requirements, in which case the local reporting requirements shall
prevail. The Safety Data and Exchange Agreement shall provide for an adverse
event database for Licensed Products in the Territory to be maintained by CCT at
[****] expense. CCT shall be responsible for reporting quality complaints,
adverse events and safety data related to Licensed Products to applicable
Regulatory Authorities in the Territory, as well as responding to safety issues
and to all requests of Regulatory Authorities relating to Licensed Products in
the Territory. Each Party hereby agrees to comply with its respective activities
under such Safety Data and Exchange Agreement and to cause its Affiliates to
comply with such activities.

 

5.6           Remedial Actions. Each Party shall notify the other Party
immediately, and promptly confirm such notice in writing, if it obtains
information indicating that any Licensed Product may be subject to any recall,
corrective action or other regulatory action with respect to a Licensed Product
taken by virtue of applicable Laws (a “Remedial Action”). The Parties shall
assist each other in gathering and evaluating such information as is necessary
to determine the necessity of conducting a Remedial Action. CCT shall, and shall
ensure that its Affiliates will, maintain adequate records to permit the Parties
to trace the distribution and use of the Licensed Products. CCT shall have the
right to decide whether any Remedial Action with respect to any Licensed Product
should be commenced and CCT shall, at its expense, control and coordinate all
efforts necessary to conduct such Remedial Action. Upon CCT’s reasonable
request, Alliqua shall reasonably cooperate with, and provide reasonable
assistance to, CCT in connection with any activities undertaken by CCT pursuant
to the immediately preceding sentence, at [****] sole cost and expense.

 

-19-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

5.7           Rebate Processing and Government Price Reporting. Alliqua will be
solely responsible for all federal, state and local government and private
purchasing, pricing or reimbursement programs with respect to the Licensed
Products, including taking all necessary and proper steps to execute agreements
and file other appropriate reports and other documents with Governmental
Authorities and private Persons and CCT shall provide reasonable assistance to
Alliqua to effectuate the same. Alliqua shall be solely responsible for payment
and processing of all discounts, rebates, and fees, whether required by contract
or Laws, for the Licensed Products. For the avoidance of doubt, with respect to
Licensed Products, Alliqua shall report all applicable data, including price,
rebate and discount data to the Centers for Medicare and Medicaid Services, data
to the Department of Veterans Affairs and any other pricing or reimbursement
related data required by Governmental Authorities under applicable Laws
(“Government Price Reporting”). Alliqua’s Government Price Reporting shall
comply with all applicable Laws and contracts. Alliqua shall pay the rebates,
chargebacks, discounts, and fees for the Licensed Products as required by
applicable Laws and contracts. If CCT notifies Alliqua that it is required to
refer to Licensed Products sales made by Alliqua, or other reimbursement or
Commercialization-related data maintained by Alliqua under this Agreement, in
CCT’s reports to Governmental Authorities, Alliqua shall provide CCT with
required sales figures or other data for Licensed Products sales made by
Alliqua, and CCT shall be entitled to use such data or information that Alliqua
provides under this Section 5.7 or otherwise for complying with CCT’s required
reports to Governmental Authorities.

 

Article 6
COMMERCIALIZATION

 

6.1           Commercialization Responsibilities. During the Term, Alliqua shall
use Commercially Reasonable Best Efforts to, and shall be responsible for, all
aspects of, the Commercialization of Licensed Products for all indications
throughout the Territory. Such Commercialization responsibilities for each
Licensed Product shall include: (a) developing and executing a Commercialization
Plan for each Licensed Product; (b) negotiating with applicable Governmental
Authorities and private Third Party payers regarding the price and reimbursement
status of each Licensed Product; (c) marketing and promotion; (d) booking sales
and distribution and performance of related services; (e) handling all aspects
of order processing, invoicing and collection, inventory and receivables;
(f) providing customer support, including handling medical queries, and
performing other related functions; and (g) conforming its practices and
procedures to applicable Laws relating to the marketing, detailing and promotion
of each Licensed Product in the Territory, in each case, unless otherwise
expressly provided in this Agreement, as determined by Alliqua in its sole
discretion; provided, however, that Alliqua shall promptly inform and provide
CCT with any material developments, updates and documentation related to
Alliqua’s obligations set forth in this Section 6.1(a)-(g). Alliqua shall bear
all of the costs and expenses incurred in connection with such Commercialization
activities.

 

6.2           Commercialization Plan. The strategy for the Commercialization of
each Licensed Product shall be described in a comprehensive plan that describes
the pre-launch, launch and subsequent Commercialization activities for such
Licensed Product in the Territory, which shall include, without limitation, (i)
the annual anticipated number of details to be conducted in each country within
the Territory, (ii) the annual anticipated marketing expenses to be incurred in
each of the countries within the Territory, (iii) the annual anticipated number
of FTEs to be assigned to Commercialize in each of the countries within the
Territory, and (iv) a report on pricing, advertising, education, planning,
marketing, and sales force training (the “Commercialization Plan”). An initial
Commercialization Plan for Biovance shall be prepared by Alliqua and presented
to the JSC as soon as practicable, but in any event, within ninety (90) days of
the Effective Date or such other time agreed to by the JSC. In addition, Alliqua
shall submit an initial Commercialization Plan for ECMs to the JSC no later than
ninety (90) days prior to anticipated 510(k) or other Regulatory Clearance
and/or Approval in each relevant jurisdiction within the Territory. The Parties
shall, and shall cause their respective members of the JSC to, cooperate with
each other in good faith to promptly finalize a mutually acceptable
Commercialization Plan for each Licensed Product. Alliqua shall deliver an
updated Commercialization Plan for each Licensed Product, as applicable, at each
meeting of the JSC or at such times as agreed to by the JSC.

 

-20-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

6.3           Commercial Diligence. During the Term, Alliqua shall use
Commercially Reasonable Best Efforts to Commercialize each Licensed Product in
the Field throughout the Territory, in each case as contemplated by the
applicable Commercialization Plan or as otherwise mutually agreed upon by the
Parties in writing.

 

6.4           Records and Reports. Alliqua shall maintain complete, current and
accurate records of all work conducted by it or its Affiliates under each
Commercialization Plan. At each quarterly JSC meeting, Alliqua shall provide all
written updates that Alliqua has provided to its management team during the
previous calendar quarter with respect to the Commercialization of the Licensed
Products and all other information reasonably requested by CCT, including but
not limited to, an update of all work conducted by it or its Affiliates under
each Commercialization Plan during the previous calendar quarter.

 

6.5           Commercialization Outside the Territory. CCT hereby grants to
Alliqua and Alliqua hereby accepts, the right of first negotiation, under
mutually acceptable terms between the Parties, to enter into an agreement to
market and/or sell the Licensed Products (whether on an exclusive or
non-exclusive basis) in the Field in any jurisdictions outside the Territory, in
the event that CCT intends to grant rights to a Third Party to market and/or
sell the Licensed Products in the Field in any such jurisdictions outside the
Territory (an “Additional Territory Transaction”). In the event that CCT desires
to enter into an Additional Territory Transaction, CCT shall notify Alliqua in
writing of CCT’s desire to enter into discussions regarding such a transaction.
Alliqua shall, within fifteen (15) Business Days after receipt of such notice,
indicate to CCT in writing whether it wishes to enter into discussions regarding
an Additional Territory Transaction and, if Alliqua indicates that it wishes to
enter into such discussions, the Parties shall in good faith negotiate a
definitive agreement for such Additional Territory Transaction. If either (a)
Alliqua indicates it does not wish to enter into such discussions regarding an
Additional Territory Transaction, (b) Alliqua fails to indicate its interest
within such fifteen (15) Business Day period or (c) Alliqua indicates it wishes
to enter into such discussions but the Parties fail to execute a definitive
agreement with respect to such Additional Territory Transaction within sixty
(60) calendar days after Alliqua’s indication of interest, then CCT shall have
no further obligation to Alliqua under this Agreement with respect to an
Additional Territory Transaction and CCT may, itself, or through an Affiliate or
Third Party, market and/or sell the Licensed Products, as the case may be, in
the Field outside the Territory.

 

-21-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

Article 7
COMPENSATION

 

7.1          Annual License Fee.

 

(a)          As partial consideration for the rights granted to Alliqua herein,
subject to Section 7.1(b), Alliqua shall pay to CCT the annual license fees set
forth on Schedule 7.1(a) hereto following the First Commercial Sale of each
Licensed Product (each, an “Annual License Fee,” and, collectively, the “Annual
License Fees”), provided that on a Licensed Product-by-Licensed Product basis,
if a Market Condition Change occurs in a Launch Year that an Annual License Fee
is due and payable, the Parties shall negotiate and mutually agree upon an
alternative Annual License Fee with respect to such Licensed Product in
accordance with Section 7.4 below. Alliqua shall pay to CCT each Annual License
Fee for each Launch Year in arrears with each such amount due and payable
forty-five (45) days following the end of such Launch Year.

 

(b)          Notwithstanding Section 7.1(a), on a Licensed Product-by-Licensed
Product basis, in the event that for any Launch Year: (i) the product of the
number of units of the Licensed Product acquired by Alliqua multiplied by the
Base Purchase Price of such Licensed Product is less than the Annual License Fee
due and payable to CCT for such Launch Year pursuant to Section 7.1(a), then
Alliqua shall, in accordance with Section 7.1(a), pay to CCT the Annual License
Fee; or (ii) if the product of the number of units of the Licensed Product
acquired by Alliqua multiplied by the Base Purchase Price of such Licensed
Product is equal to or greater than the Annual License Fee due and payable for
such Launch Year pursuant to Section 7.1(a), then Alliqua shall not be obligated
to pay any Annual License Fee to CCT for such Launch Year. Schedule 7.1(b) sets
forth by way of example the terms of this Section 7.1(b).

 

7.2          Milestone Payments. Alliqua shall make non-refundable,
non-creditable milestone payments (each, a “Milestone Payment”) to CCT upon the
achievement of certain milestone events (each a “Milestone Event”) in connection
with the sale of a Licensed Product as set forth on Schedule 7.2 hereto, with
the caveat that each individual Milestone Payment set forth in rows numbered (1)
through (9) of the table set forth on Schedule 7.2 shall be paid only once.
Alliqua shall pay to CCT each such amount within forty-five (45) days following
the end of such Launch Year in which achievement of the applicable Milestone
Event occurred. If any Milestone Event is achieved and Alliqua has not yet made
the prior Milestone Payment(s), all previous unpaid Milestone Payments shall be
due and payable together with the payment of the Milestone Payment for the first
such subsequent Milestone Event achieved.

 

7.3          Royalties.

 

(a)          Royalty Rates. Alliqua shall pay to CCT royalties on aggregate
annual Net Sales of all Licensed Products during the Royalty Term as set forth
on Schedule 7.3(a) hereto, such royalties to be calculated by multiplying the
applicable royalty rate in the applicable table for each Licensed Product on
Schedule 7.3(a) by the corresponding Gross Margin of such Licensed Product in
the Territory in each Launch Year, provided that if a Market Condition Change
occurs in a Launch Year that royalties are due and payable, the Parties shall
negotiate and mutually agree upon an alternative royalty rate in accordance with
Section 7.4 below.

 

(b)          Royalty Term. Royalties shall be due under this Section 7.3 during
the period of time beginning, on a country-by-country basis, from the First
Commercial Sale of a Licensed Product in such country until the termination or
expiration of this Agreement in accordance with Article 12, below, including
through any Sell-Off Period in accordance with Section 12.6(d) (the “Royalty
Term”).

 

-22-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(c)          Royalty Reports and Payments. Within sixty (60) days following the
end of each Launch Year Quarter, commencing with the Launch Year Quarter in
which the First Commercial Sale of any Licensed Product is made anywhere in the
Territory, Alliqua shall provide CCT with a report containing the following
information for the applicable Launch Year Quarter, on a country-by-country and
Licensed Product-by-Licensed Product basis: (i) the amount of gross sales of
such Licensed Product in the Territory, (ii) an itemized calculation of Net
Sales in the Territory showing deductions provided for in the definition of Net
Sales, (iii) a calculation of the royalty payment due on such sales, and (iv)
the exchange rate for such country. Contemporaneously with the delivery of the
applicable quarterly report, Alliqua shall pay in Dollars all amounts due to CCT
pursuant to Section 7.3(a) with respect to Net Sales by Alliqua and its
Affiliates for such Launch Year Quarter.

 

7.4          Market Condition Change. In the event of a Market Condition Change,
the Parties shall negotiate in good faith and mutually agree upon an alternative
(i) Annual License Fee for a Launch Year and (ii) Minimum Sales Threshold (as
defined below) to account for such Market Condition Change (the “Market
Condition Financial Terms”), provided that such Market Condition Financial Terms
shall not be reduced by more than [****] of the then-current financial terms set
forth in this Article 7 and provided further that, once such Market Condition
Change is cured, the Market Condition Financial Terms shall automatically expire
as of the end of the calendar year in which the Market Condition Change
occurred, and the terms and conditions set forth in this Article 7 shall
control.

 

7.5          Payment Method; Late Payments. All payments due hereunder shall be
made in Dollars by wire transfer of immediately available funds into an account
in the USA designated by the payee Party. If a Party does not receive payment of
any sum due to it on or before the due date, simple interest shall thereafter
accrue on the sum due until the date of payment at the per annum rate of [****]
over the then-current prime rate reported in The Wall Street Journal or the
maximum rate allowable by applicable Laws, whichever is lower.

 

7.6          Records. Alliqua and its Affiliates shall maintain complete and
accurate records in reasonably sufficient detail to permit CCT to confirm the
accuracy of the calculation of royalty payments. CCT shall have the right to
audit such records in accordance with Section 7.7.

 

7.7          Audits. For a period of two (2) years from the end of the Launch
Year in which a payment was due hereunder, upon thirty (30) days’ prior notice,
Alliqua (the “Audited Party”) shall (and shall require that its Affiliates) make
such records relating to such payment available, during regular business hours
and not more often than once each Launch Year, for examination by an independent
certified public accountant selected by CCT (the “Auditing Party”), for the
purposes of verifying compliance with this Agreement and the accuracy of the
financial reports and/or invoices furnished pursuant to this Agreement. The
results of any such audit shall be shared by the auditor with both Parties and
shall be considered Confidential Information of both Parties. Any amounts shown
to be owed to the other shall be paid within thirty (30) days from the auditor’s
report, plus interest (as set forth in Section 7.5) from the original due date.
The Auditing Party shall bear the full cost of such audit unless such audit
discloses a deficiency in the Audited Party’s payments of greater than [****]
(i.e., an under-payment by Alliqua pursuant to Section 7.3, or an over-charge by
CCT pursuant to Section 5.3), in which case the Audited Party shall bear the
full cost of such audit.

 

-23-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

7.8          Taxes.

 

(a)          Taxes on Income. Each Party shall be solely responsible for the
payment of all taxes imposed on its share of income arising directly or
indirectly from the efforts of the Parties under this Agreement.

 

(b)          Tax Cooperation. The Parties agree to cooperate with one another
and use reasonable efforts to reduce or eliminate tax withholding or similar
obligations in respect of royalties, Milestone Payments, and other payments made
by Alliqua to CCT under this Agreement. To the extent Alliqua is required to
deduct and withhold taxes on any payment to CCT, Alliqua shall pay the amounts
of such taxes to the proper Governmental Authority in a timely manner and
promptly transmit to CCT an official tax certificate or other evidence of such
withholding sufficient to enable CCT to claim such payment of taxes. CCT shall
provide Alliqua any tax forms that may be reasonably necessary in order for
Alliqua not to withhold tax or to withhold tax at a reduced rate under an
applicable bilateral income tax treaty. Each Party shall provide the other with
reasonable assistance to enable the recovery, as permitted by applicable Laws,
of withholding taxes, value added taxes, or similar obligations resulting from
payments made under this Agreement, such recovery to be for the benefit of the
Party bearing such withholding tax or value added tax. Alliqua shall require its
Affiliates in the Territory to cooperate with CCT in a manner consistent with
this Section 7.8(b).

 

7.9          Annual Fee on Medical Device Manufacturers and Importers. The
Parties acknowledge that the “Annual Fee on Medical Device Manufacturers and
Importers” was signed into United States law with the Patient Protection and
Affordable Care Act (PPACA) in 2010. For the avoidance of doubt, in the event
the Annual Fee on Medical Device Manufacturers and Importers or any similar fee
for a drug or biological product is applied to the sale of any Licensed Product
by Alliqua, the Parties hereby acknowledge and agree that (a) Alliqua shall be
solely responsible for full payment of such fee; and (b) Alliqua shall supply
CCT with reasonable documentation supporting the imposition of such fee,
including, but not limited to, as applicable, the annual invoice for such fee
received from the United States Internal Revenue Service.

 

Article 8
INTELLECTUAL PROPERTY MATTERS

 

8.1          Prosecution of Patents.

 

(a)          CCT Prosecuted Patents.

 

(i)          Subject to Section 8.1(a)(ii) below, as between the Parties, CCT
shall have the first right to (and shall use reasonably diligent efforts to)
prepare, file, prosecute and maintain the CCT Patents in the Territory. The
costs of preparation, filing, prosecution and maintenance of CCT Patents shall
be borne by [****].

 

-24-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(ii)         If CCT decides to cease the prosecution or maintenance of any CCT
Patent after the Effective Date, it shall notify Alliqua in writing sufficiently
in advance (but in no event less than twenty (20) Business Days prior to the
date on which the CCT Patent would become abandoned) so that Alliqua may, at its
discretion, assume the responsibility for the prosecution or maintenance of such
Patent, at [****] cost and expense.

 

(b)          Cooperation. Each Party shall provide the other Party all
reasonable assistance and cooperation, at the other Party’s request and expense,
in the patent prosecution efforts provide above in this Section 8.1, including
providing any necessary powers of attorney and executing any other required
documents or instruments for such prosecution.

 

8.2          Inventions Generally. Inventions conceived or reduced to practice
in the course of activities performed under or contemplated by this Agreement
(including those which are Improvements to CCT Know-How, CCT Patents or
otherwise to CCT’s biomaterials-related intellectual property, or which relate
to a Licensed Product), by either CCT or Alliqua (or both, jointly) shall be
owned by CCT. Alliqua hereby makes all assignments to CCT in order to effect the
foregoing, and agrees, at Alliqua’s cost and expense, to take all further
actions requested by CCT in order to perfect the foregoing assignment. All
rights assigned to CCT by Alliqua shall be deemed to be CCT Know-How or CCT
Patents, as applicable.

 

8.3          Enforcement of CCT Patents.

 

(a)          Notification. If either Party becomes aware of any existing or
threatened infringement of the CCT Patents (an “Infringement”), which infringing
activity involves the using, making, importing, offering for sale or selling of
any Licensed Product or a competitive product or otherwise adversely affects or
is reasonably expected to adversely affect the Commercialization of any Licensed
Product, it shall promptly notify the other Party in writing to that effect and
the Parties shall consult with each other regarding any actions to be taken with
respect to such Infringement.

 

(b)          Actions Controlled by CCT; Alliqua’s Back-Up Enforcement Right. CCT
shall have the first right to bring an appropriate suit or take other action
against any Third Party engaged in any Infringement, at CCT’s cost and expense.
If, after its receipt or delivery of notice thereof under Section 8.3(a), CCT
(i) notifies Alliqua that it will not bring any claim, suit or action to prevent
or abate such Infringement or (ii) fails to commence a suit to prevent or abate
such Infringement within one hundred and eighty (180) days, Alliqua shall have
the right, but not the obligation, to commence a suit or take action to prevent
or abate such Infringement under the CCT Patents at its own cost and expense.
Expenses of, and recoveries on, suits under this Section 8.3(b) shall be handled
as provided in Section 8.3(e).

 

-25-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(c)          Collaboration. Each Party shall provide to the enforcing Party
reasonable assistance in such enforcement, at such enforcing Party’s request and
expense, including joining such action as a party plaintiff if required by
applicable Laws to pursue such action. The enforcing Party shall keep the other
Party regularly informed of the status and progress of such enforcement efforts
and shall reasonably consider the other Party’s comments on any such efforts.
The enforcing Party shall consult with the other Party as to any important
aspects of such enforcement, including determination of litigation strategy and
filing of material papers to the competent court. The non-enforcing Party shall
be entitled to separate representation in such matter by counsel of its own
choice and at its own expense, but such Party shall at all times cooperate fully
with the enforcing Party.

 

(d)          Settlement. Neither Party shall settle any claim, suit or action
that it brings under Section 8.3(b) in a manner that would negatively impact the
applicable CCT Patents (e.g., shorten the life of such Patents or narrow their
scope) without the prior written consent of the other Party.

 

(e)          Expenses and Recoveries. The term “Revenue” includes all fees,
minimum royalties, payments, compensation, or consideration of any kind
(including without limitation in-kind payments, forbearance in connection with
settlement, equity amounts taken in lieu of cash, or discounts below fair market
value of equity) received by either Party or its Affiliates, without regard to
which entity pays, transfers or otherwise provides the Revenue, or how the
Revenue is structured, denominated, or paid transferred or provided. The
enforcing Party bringing a claim, suit or action under Section 8.3(b) shall be
solely responsible for any expenses incurred by such Party as a result of such
claim, suit or action. If such Party receives Revenue in such claim, suit or
action, such Revenue shall be allocated first to the reimbursement of any
expenses incurred by the Parties in such litigation (including, for this
purpose, a reasonable allocation of expenses of internal counsel), and any
remaining amounts shall be allocated as follows: (i) if CCT is the Party
bringing the suit, [****]; and (ii) if instead Alliqua exercised its back-up
right to enforce, then the [****].

 

8.4          Infringement of Third Party Rights in the Territory.

 

(a)          If any Licensed Product Commercialized by or on behalf of Alliqua
becomes the subject of a Third Party claim or assertion of infringement of such
Third Party’s intellectual property, including any Patent, issued in the
Territory, Alliqua shall promptly notify CCT and the Parties shall negotiate in
good faith and agree on and enter into a “common interest agreement” wherein the
Parties agree to their shared, mutual interest in the outcome of such potential
dispute, and thereafter, the Parties shall promptly meet to consider the claim
or assertion and the appropriate course of action. Subject to Sections 2.4 and
12.5, CCT shall have the right, but not the obligation, to defend any such
infringement claim, [****] all costs and expenses relating to, and arising from,
the defense of any such infringement claim shall be [****]. Alliqua shall
provide all reasonable assistance to CCT and reasonably cooperate in the defense
of any such action. At each quarterly JSC meeting, CCT shall provide to Alliqua
an update on the status and defense of such infringement claim during the
previous calendar quarter and any other information with respect thereto as
reasonably requested by Alliqua.

 

-26-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          CCT shall not settle or consent to judgment of any infringement
claim without the prior written consent of Alliqua, such consent not to be
unreasonably delayed, conditioned, or withheld; provided, however, that if such
settlement or consent to judgment does not impose any liability on, or
materially affect the rights or obligations of, Alliqua, CCT shall have the
right to settle such claim or consent to judgment (e.g., a monetary liability
that is fully satisfied by CCT on behalf of Alliqua). In the event the Parties
cannot reach consensus within five (5) Business Days after they have met and
attempted to reach consensus regarding settlement of any such infringement claim
(an “Infringement Dispute”), the settlement of such Infringement Dispute shall
be referred to the JSC for resolution; provided, however, that the provisions of
Section 3.1(c)(ii) shall not apply with respect to that particular matter and
the Parties’ resolution thereof.

 

8.5          Patent Marking. Alliqua and its Affiliates shall mark each Licensed
Product marketed and sold by Alliqua or its Affiliates hereunder with
appropriate patent numbers or indicia.

 

8.6          Trademarks.

 

(a)          Product Marks. Alliqua shall have the right to brand the Licensed
Products and create all Licensed Product labels using Alliqua-related trademarks
and any other trademarks and trade names it determines appropriate (including
the CCT Marks as set forth in Section 8.6(b) below) for the Licensed Products,
which may vary by country or within a country (collectively, the “Product
Marks”). The Parties acknowledge and agree that the Licensed Products shall be
co-branded as mutually agreed upon in writing by the Parties and that Alliqua
shall give the proper attribution on each Licensed Product to CCT as provider of
the CCT Technology or as otherwise mutually agreed upon by the Parties. The
Parties shall mutually agree upon the form and substance of such attribution
rights. In the event that Alliqua desires to brand a Licensed Product using an
alternative name, Alliqua shall first propose such alternative name to CCT,
which name may be approved by CCT in its sole discretion. For the avoidance of
doubt, in no event may Alliqua brand a Licensed Product under an alternative
name without the prior written consent of CCT.

 

-27-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          CCT Marks. Subject to the terms and conditions of this Agreement,
CCT hereby grants to Alliqua an exclusive license to use and display (with the
right to grant sublicenses to any (i) sublicensees permitted under Section 2.3
and (ii) contract research organizations, distributors and other Third Parties
who perform activities directly on behalf of Alliqua, provided that such
sublicense is incidental to the activities performed by such Third Party),
during the Term and in the Field in the Territory, to the Biovance and/or ECM
trademark, as applicable, as set forth in Exhibit C, to identify the Licensed
Products (each, a “CCT Mark” and collectively, the “CCT Marks”), (i) on the
Licensed Product itself, (ii) as part of the Product Marks and (iii) on any
other labels, promotional materials or Regulatory Materials used in connection
with any Licensed Product, provided that if Alliqua, upon the consent of CCT,
brings an enforcement action with respect to any CCT Mark, Alliqua shall
reimburse CCT fully for the expenses CCT incurs in connection therewith
(including, without limitation, costs associated with hiring consultants,
attorneys’ fees and preparation and filing of any applications, renewals or
other documentation with the United States Patent and Trademark Office, foreign
counterparts, or other relevant agency). Alliqua shall give reasonable prior
advance notice to CCT regarding any use or display of the CCT Marks and shall
provide CCT with a sample embodying such use or display, for CCT’s prior review
and approval to ensure such use or display complies with CCT’s reasonable
trademark guidelines, such approval not to be unreasonably withheld, conditioned
or delayed. Alliqua shall follow CCT’s reasonable trademark guidelines at all
times as to the use of the CCT Marks. If CCT changes such trademark guidelines:
(x) CCT shall, if practical, provide Alliqua with at least thirty (30) days
prior written notice of such changes, (y) such changes shall not apply to any
materials that are in inventory or on order as of the effective date of such
notice and (z) Alliqua shall be solely responsible for any expense of
implementing such changes, including on packaging, promotional materials and
other items if such changes are required by Law, and if such changes are not
required by Law, each Party shall bear equal responsibility for any expense of
implementing such changes. Other than as expressly set forth herein, use of the
CCT Marks shall not confer on Alliqua any right to or interest in such
trademark, and Alliqua acknowledges and agrees that all use of the CCT Marks and
the goodwill generated thereby shall inure solely to the benefit of CCT. Alliqua
shall not use, adopt, file, register, seek to register or take any other action
to use or establish rights in any mark anywhere in the world which is comprised
of, derivative of, a combination with, or otherwise confusingly similar to, any
CCT Mark or file any application to register any trademark or trade name that is
confusingly similar to the CCT Marks.

 

(c)          Ownership; No Challenge. Subject to Section 8.6(b), above, Alliqua
shall own all right, title and interest in and to the Product Marks (excluding
the CCT Marks). All use of the Product Marks (excluding the CCT Marks) and the
goodwill generated thereby shall inure solely to the benefit of Alliqua. Other
than in connection with the CCT Marks, CCT shall not use, adopt, file, register,
seek to register, or take any other action to use or establish rights in any
mark anywhere in the world which is comprised of, derivative of, a combination
with, or otherwise confusingly similar to, any Product Mark. For the avoidance
of doubt, this Section 8.6(c) does not grant Alliqua any right to or interest in
the CCT Marks, and Alliqua acknowledges and agrees that all use of the CCT Marks
and the goodwill generated thereby shall inure solely to the benefit of CCT.

 

Article 9
REPRESENTATIONS AND WARRANTIES; COVENANTS

 

9.1          Mutual Representations and Warranties. Each Party hereby represents
and warrants to the other Party as follows:

 

(a)          Organization. As of the Effective Date, such Party is an entity
duly organized, validly existing and in good standing under the laws of the
state of its incorporation or organization, with the requisite legal authority
to own and use its properties and assets and to carry on its business as
currently conducted. Such Party not in violation of any of the provisions of its
respective certificate or articles of incorporation, formation, bylaws or other
organizational or charter documents.

 

-28-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          Authorization; Enforcement. Such Party has the requisite corporate
authority to enter into and to consummate the transactions contemplated by this
Agreement and each of and otherwise to carry out its obligations hereunder. The
execution and delivery by it of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and no further consent or action is required by it, its Board
of Directors or its stockholders. This Agreement has been duly executed by such
Party and is the valid and binding obligation of such Party enforceable against
such Party in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.

 

(c)          No Conflicts. The execution, delivery and performance by such Party
of this Agreement and the consummation by such Party of the transactions
contemplated hereby does not, and will not, (i) conflict with or violate any
provision of such Party’s certificate or articles of incorporation, bylaws or
other organizational or charter documents, (ii) in any material respect,
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument or other understanding to which such Party is a party or by which any
property or asset of such Party is bound, or affected, or (iii) in any material
respect, result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which such Party is subject, or by which any property or asset of such Party
is bound or affected.

 

9.2          Additional Representations and Warranties of CCT. CCT represents
and warrants to Alliqua as follows, as of the Effective Date:

 

(a)          It has sufficient legal and/or beneficial title, ownership or
license to the CCT Technology to grant the licenses to Alliqua as purported to
be granted pursuant to this Agreement;

 

(b)          CCT has not licensed from any Third Party any intellectual property
rights included in the CCT Technology, and, to CCT’s knowledge, no such license
is required.

 

(c)          CCT has not received any written claim or notice from any Third
Party asserting or alleging that the CCT Technology infringes any intellectual
property rights of such Third Party, and, to CCT’s knowledge, the CCT Technology
does not infringe any intellectual property rights of any Third Party;

 

(d)          It has not received any written notice from any Third Party
asserting or alleging that any research or development of any Licensed Product
by CCT prior to the Effective Date infringed or misappropriated the intellectual
property rights of such Third Party;

 

(e)          There are no pending, and to CCT’s knowledge, no threatened,
adverse actions, suits or proceedings against CCT involving CCT Technology, or
any Licensed Product;

 

(f)          The CCT Patents include all Patents that Cover the Licensed
Products which are Controlled by CCT and/or its Affiliates on the Effective
Date;

 

(g)          Except as set forth on Schedule 9.2(e), to CCT’s knowledge (i) the
CCT Marks have been properly filed and registered with the U.S. Patent and
Trademark Office and is valid and in full force and effect, and (ii) CCT has the
right to use and license the CCT Marks, free and clear of any liens or
encumbrances;

 

-29-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(h)          To CCT’s knowledge, there are no pending legal suits or proceedings
involving the CCT Technology or any Licensed Product; and to there are no
threatened legal suits or proceedings in the Territory involving the CCT
Technology or any Licensed Product; and

 

(i)          There are no current pending, or to CCT’s knowledge, threatened in
writing, product liability, warranty or other similar claims by any Third Party
(whether based in contract or tort and whether relating to personal injury,
including death, property damage or economic loss) arising from the marketing or
sale of any Licensed Product.

 

9.3          Mutual Covenants.

 

(a)          No Debarment. In the course of, and with respect, the Development
and Commercialization of the Licensed Products, each Party shall not use any
employee or consultant who has been debarred , excluded or disqualified under
applicable Law by any Governmental Authority, or, to such Party’s knowledge, is
the subject of debarment, exclusion or disqualification proceedings by any
Governmental Authority. Each Party shall notify the other Party promptly upon
becoming aware that any of its employees or consultants has been debarred,
excluded or disqualified under applicable Law, or is the subject of debarment,
exclusion or disqualification proceedings by any Governmental Authority.

 

(b)          Compliance. Each Party and its Affiliates shall comply in all
material respects with all applicable Laws in the Development and
Commercialization of Licensed Products and performance of its obligations under
this Agreement, including the statutes, regulations and written directives of
the FDA and any Regulatory Authority having jurisdiction in the Territory, the
FD&C Act, the Prescription Drug Marketing Act, the federal Anti-Kickback Law (42
U.S.C. 1320a-7b(b)), the statutes, regulations and written directives of
Medicare, Medicaid and all other federal health care programs (as defined in 42
U.S.C. § 1320a-7b(f)), the civil False Claims Act (31 U.S.C. 3729 et. seq.), the
administrative False Claims Act (42 U.S.C. 1320a-7b(a)), the United States
Public Health Service Act, the Physician Payment Sunshine Act (42 U.S.C.
1320a-7h), the United States Health Insurance Portability and Accountability Act
of 1996 and the Foreign Corrupt Practices Act of 1977, and all regulations
promulgated thereunder, each as may be amended from time to time.

 

9.4          Disclaimer. Alliqua understands that the Licensed Products are the
subject of ongoing clinical research and development and that CCT cannot assure
the safety or efficacy of any Licensed Product. In addition, CCT makes no
warranties except as set forth in this Article 9 concerning the CCT Technology.
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS ARE MADE OR GIVEN BY OR ON BEHALF OF A
PARTY, AND ALL IMPLIED REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY
OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY DISCLAIMED.

 

-30-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

Article 10
INDEMNIFICATION

 

10.1         Indemnification by CCT. CCT shall indemnify and hold harmless
Alliqua, and its directors, officers, employees, agents, Affiliates and
contractors (collectively, the “Alliqua Indemnitees”), from and against all
losses, liabilities, damages and expenses, including reasonable attorneys’ fees
and costs (collectively, “Liabilities”), resulting from any claims, demands,
actions or other proceedings by any Third Party (including Claims based upon
products liability) (“Claims”) to the extent resulting from or relating to (a)
the breach or inaccuracy of any representation or warranty made by CCT in this
Agreement; (b) the breach by CCT of any covenant or any of its obligations under
this Agreement; (c) CCT’s failure to comply with any applicable federal, state
or local Laws in connection with the performance of its obligations hereunder;
(d) any design (latent, patent or inherent) defect of the Licensed Products,
provided that the Licensed Products are Commercialized in accordance with this
Agreement and are used in the Field in the Territory; or (e) any gross
negligence or willful misconduct of CCT or any of its Affiliates. The foregoing
indemnity obligation shall not apply to the extent that (i) the Alliqua
Indemnitees fail to comply with the indemnification procedures set forth in
Section 10.3 and CCT’s defense of the relevant Claims is prejudiced by such
failure, or (ii) any Claim arises from, is based on, or results from any
activity set forth in Sections 10.2(a), 10.2(b), 10.2(c), 10.2(d), 10.2(e) or
10(f) for which Alliqua is obligated to indemnify the CCT Indemnitees under
Section 10.2.

 

10.2         Indemnification by Alliqua. Alliqua shall indemnify and hold
harmless CCT, and its directors, officers, employees, agents, Affiliates and
contractors (collectively, the “CCT Indemnitees”), from and against all
Liabilities resulting from any Claims to the extent resulting from or relating
to (a) the breach or inaccuracy of any representation or warranty made by
Alliqua in this Agreement; (b) the breach by Alliqua of any covenant or any of
its obligations under this Agreement; (c) Alliqua’s failure to comply with any
applicable federal, state or local Laws in connection with the performance of
its obligations hereunder; (d) improper Commercialization of the Licensed
Products by or on behalf of Alliqua or any representations regarding the
Licensed Products made by Alliqua in breach of this Agreement; (e) any gross
negligence or willful misconduct of Alliqua or any of its Affiliates; or (f) any
manufacturing defects of the Licensed Products manufactured by Alliqua or by a
Third Party on behalf of Alliqua. The foregoing indemnity obligation shall not
apply to the extent that (i) the CCT Indemnitees fail to comply with the
indemnification procedures set forth in Section 10.3 and Alliqua’s defense of
the relevant Claims is prejudiced by such failure, or (ii) any Claim arises
from, is based on, or results from any activity set forth in Sections 10.1(a),
10.1(b), 10.1(c), 10.1(d) or 10.1(e) for which CCT is obligated to indemnify the
Alliqua Indemnitees under Section 10.1.

 

10.3         Indemnification Procedures. The Party claiming indemnity under this
Article 10 (the “Indemnified Party”) shall give written notice to the Party from
whom indemnity is being sought (the “Indemnifying Party”) promptly after
learning of such Claim. The Indemnifying Party shall have the right to assume
and conduct the defense of the Claim with counsel of its choice, and the
Indemnified Party may participate in and monitor such defense with counsel of
its own choosing at its sole expense. The Indemnified Party shall provide the
Indemnifying Party with reasonable assistance, at the Indemnifying Party’s
expense, in connection with the defense of the Claim for which indemnity is
being sought. Each Party shall not settle or compromise any Claim without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld, delayed or conditioned. If the Parties cannot agree as to
the application of the foregoing Sections 10.1 and 10.2, each may conduct
separate defenses of the Claim, and each Party reserves the right to claim
indemnity from the other in accordance with this Article 10 upon the resolution
of the underlying Claim.

 

-31-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

10.4        Limitation of Liability. NEITHER PARTY SHALL BE LIABLE FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING
LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT except
for fraud or willful misconduct, BREACH OF EITHER PARTY’S CONFIDENTIALITY
OBLIGATIONS, A PARTY’S INDEMNIFICATION OBLIGATIONS, A BREACH OF EACH PARTY’S
EXCLUSIVITY OBLIGATIONS OR A BREACH OF THE LICENSE GRANTS, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; provided, however, that any damages
claimed by or paid to a Third Party in a Third Party action shall not be
considered SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT Damages for
purposes of this Agreement.

 

10.5        Insurance. Each Party shall, at all times during the Term of this
Agreement and for five (5) years thereafter, obtain and maintain at its own
expense the following types of insurance, with limits of liability not less than
those specified below:

 

(a)          Commercial general liability insurance against claims for bodily
injury and property damage which shall include contractual coverage and product
liability coverage, with limits of not less than $[****] per occurrence and in
the aggregate. The other Party, its officers, directors, representatives and
agents shall be named as additional insureds.

 

(b)          Workers compensation and employers’ liability with limits to comply
with the statutory requirements of the state(s) in which the Agreement is to be
performed. The policy shall include employers’ liability for not less than
$[****] per accident.

 

All policies shall be issued by insurance companies with an A.M. Best’s rating
of Class A-:V (or its equivalent) or higher status. Each Party shall deliver
certificates of insurance evidencing coverage to the other Party promptly after
the execution of this Agreement and annually thereafter. All policies provided
for herein shall expressly provide that such policies shall not be cancelled,
terminated or altered without at least thirty (30) days prior written notice to
the insured Party, and each insuring Party shall immediately notify the insured
Party in the event that a policy provided for herein is cancelled, terminated or
altered.

 

-32-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

Article 11
CONFIDENTIALITY

 

11.1        Confidentiality. During the Term and for a period of five (5) years
thereafter, each Party shall maintain all Confidential Information of the other
Party in trust and confidence and shall not, without the written consent of the
other Party, disclose any Confidential Information of the other Party to any
Third Party or use any Confidential Information of the other Party for any
purpose other than as necessary in connection with the exercise of rights or
discharge of obligations under this Agreement. The confidentiality obligations
of this Section 11.1 shall not apply to Confidential Information to the extent
that the receiving Party can establish by competent evidence that such
Confidential Information: (a) is publicly known prior or subsequent to
disclosure without breach of confidentiality obligations by such Party or its
employees, consultants or agents; (b) was in such Party’s possession at the time
of disclosure without any restrictions on further disclosure; (c) is received by
such receiving Party, without any restrictions on further disclosure, from a
Third Party who has the lawful right to disclose it; or (d) is independently
developed by employees or agents of the receiving Party who had no access to the
disclosing Party’s Confidential Information.

 

11.2        Authorized Disclosure. Nothing herein shall preclude a Party from
disclosing the Confidential Information of the other Party to the extent:

 

(a)          such disclosure is reasonably necessary (i) for the filing or
prosecuting of Patents as contemplated by this Agreement; (ii) to comply with
the requirement of Regulatory Authorities with respect to obtaining and
maintaining Regulatory Clearance and/or Approval (or any pricing and
reimbursement approvals) of any Licensed Product; or (iii) for prosecuting or
defending litigations as contemplated by this Agreement;

 

(b)          such disclosure is reasonably necessary to its employees, agents,
consultants or contractors on a need-to-know basis for the sole purpose of
performing its obligations or exercising its rights under this Agreement;
provided that in each case, the disclosees are bound by written obligations of
confidentiality and non-use consistent with those contained in this Agreement;

 

(c)          such disclosure is reasonably necessary to any bona fide potential
or actual investor, acquiror, merger partner, or other financial or commercial
partner for the sole purpose of evaluating an actual or potential investment,
acquisition or other business relationship; provided that in each case, the
disclosees are bound by written obligations of confidentiality and non-use
consistent with those contained in this Agreement;

 

(d)          such disclosure is reasonably necessary to comply with applicable
Laws, including regulations promulgated by applicable security exchanges, a
valid order of a court of competent jurisdiction, administrative subpoena or
order.

 

Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party’s Confidential Information pursuant to any of
Sections 11.2(a) through 11.2(d), such Party shall promptly notify the other
Party of such required disclosure and shall use reasonable efforts to obtain, or
to assist the other Party in obtaining, a protective order preventing or
limiting the required disclosure.

 

11.3        Return of Confidential Information. Promptly after the termination
or expiration of this Agreement for any reason, each Party shall return to the
other Party all tangible manifestations of such other Party’s Confidential
Information at that time in the possession of the receiving Party.

 

-33-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

11.4        Publicity; Terms of the Agreement; Confidential Treatment.

 

(a)          The Parties agree that the terms of this Agreement (including
without limitation any exhibits and schedules hereto) shall be considered
Confidential Information of each Party, subject to the special authorized
disclosure provisions set forth in Section 11.2 and this Section 11.4.

 

(b)          If either Party desires to make a public announcement concerning
the material terms of this Agreement, such Party shall give reasonable prior
advance notice of the proposed text of such announcement to the other Party for
its prior review and approval (except as otherwise provided herein), such
approval not to be unreasonably withheld, conditioned or delayed. A Party
commenting on such a proposed press release shall provide its comments, if any,
within three (3) Business Days after receiving the press release for review. In
addition, to the extent required by applicable Laws, including regulations
promulgated by applicable security exchanges, each Party shall have the right to
make a press release announcing the achievement of each milestone under this
Agreement as it is achieved, and the achievements of Regulatory Clearances
and/or Approvals in the Territory as they occur, subject to the other Party’s
consent as to form and substance of such announcement, which shall not be
unreasonably withheld, conditioned or delayed. In relation to the other Party’s
review and approval of such an announcement, such other Party may make specific,
reasonable comments on such proposed press release within the prescribed time
for commentary, but shall not withhold its consent to disclosure of the
information that the relevant milestone has been achieved and triggered a
payment hereunder. Neither Party shall be required to seek the permission of the
other Party to repeat any information regarding the terms of this Agreement that
has already been publicly disclosed by such Party, or by the other Party, in
accordance with this Section 11.4, provided such information remains accurate as
of such time.

 

(c)          In addition, the Parties acknowledge that either or both Parties
may be obligated to file under applicable law and regulation a copy of this
Agreement with the USA Securities and Exchange Commission or similar stock
exchange authorities or other governmental authorities. Each Party shall be
entitled to make such a required filing; provided, however, that it requests
confidential treatment of the commercial terms and sensitive technical terms
hereof and thereof to the extent such confidential treatment is reasonably
available to such Party. In the event of any such filing, each Party shall
provide the other Party with a copy of this Agreement marked to show provisions
for which such Party intends to seek confidential treatment and shall reasonably
consider and incorporate the other Party’s comments thereon to the extent
consistent with the legal requirements, with respect to the filing Party,
governing disclosure of material agreements and material information that must
be publicly filed.

 

-34-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

11.5        Technical Publication. Neither Party may publish peer reviewed
manuscripts or give other forms of public disclosure such as abstracts and media
presentations (such disclosure collectively, for purposes of this Section 11.5,
“publication”), of results of studies carried out under this Agreement, without
the opportunity for prior review by the other Party, except to the extent
required by applicable Laws. A Party seeking publication shall provide the other
Party the opportunity to review and comment on any proposed publication that
relates to the Licensed Product at least thirty (30) days (or at least ten (10)
days in the case of abstracts and media presentations) prior to its intended
submission for publication. The other Party shall provide the Party seeking
publication with its comments in writing, if any, within twenty (20) days (or
within five (5) days in the case of abstracts and media presentations) after
receipt of such proposed publication. The Party seeking publication shall
consider in good faith any comments thereto provided by the other Party and
shall comply with the other Party’s reasonable request to remove any and all of
such other Party’s Confidential Information from the proposed publication. In
addition, the Party seeking publication shall delay the submission for a period
up to sixty (60) days in the event that the other Party can demonstrate
reasonable need for such delay in order to accommodate the preparation and
filing of a patent application. If the other Party fails to provide its comments
to the Party seeking publication within such twenty (20) day period (or five (5)
day period, as the case may be), such other Party shall be deemed not to have
any comments, and the Party seeking publication shall be free to publish in
accordance with this Section 11.5 after the thirty (30) day period (or ten (10)
day period, as the case may be) has elapsed. The Party seeking publication shall
provide the other Party a copy of the publication at the time of the submission.
Each Party agrees to acknowledge the contributions of the other Party and its
employees in all publications as scientifically appropriate.

 

11.6        Equitable Relief. Each Party acknowledges that its breach of Article
11 of this Agreement may cause irreparable injury to the other Party for which
monetary damages may not be an adequate remedy. Therefore, each Party shall be
entitled to seek injunctive and other appropriate equitable relief to prevent or
curtail any actual or threatened breach of the obligations relating to
Confidential Information set forth in this Article 11 by the other Party. The
rights and remedies provided to each Party in this Article 11 are cumulative and
in addition to any other rights and remedies available to such Party at law or
in equity.

 

Article 12
TERM AND TERMINATION

 

12.1        Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance with the terms of this Article 12, shall
continue for a period of ten (10) years (the “Initial Term”). Upon expiration of
the Initial Term, this Agreement will automatically renew for additional two (2)
year periods unless either Party gives written notice of termination at least
ninety (90) days prior to the expiration of the then-current term, which shall
cause this Agreement to terminate at the end of the then-current term (each
period, a “Renewal Term” and together with the Initial Term, the “Term”).

 

12.2        Termination by CCT.

 

(a)          For Patent Challenge. CCT may terminate this Agreement in its
entirety immediately upon written notice to Alliqua if Alliqua or its Affiliates
(directly or indirectly, individually or in association with any other person or
entity) challenges the validity, enforceability or scope of any CCT Patent
anywhere in the world.

 

-35-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          For Failure to Meet Thresholds.

 

(i)          In the event that gross sales of a Licensed Product during the
second Launch Year for such Licensed Product are less than (x) Five Million
Dollars ($5,000,000) or alternatively, (y) the new gross sales volume agreed to
by the Parties pursuant to Section 7.4, as the case may be (the “Minimum Sales
Threshold”), CCT shall have the right to terminate solely with respect to such
Licensed Product, on a Licensed Product-by-Licensed Product basis (but not with
respect to the Agreement in its entirety), on sixty (60) days’ written notice to
Alliqua (a “Sales Threshold Default”), which notice of such Sales Threshold
Default must be delivered to Alliqua within thirty (30) calendar days following
the delivery of the royalty report for the fourth Launch Year Quarter of the
second Launch Year (a “Sales Threshold Default Notice”). Upon receipt of a Sales
Threshold Default Notice, Alliqua may cure the Sales Threshold Default solely
for the second Launch Year by (i) paying to CCT an amount equal to the
difference between the Annual License Fee for the second Launch Year and the
aggregate royalties which would be due to CCT if gross annual sales of such
Licensed Product for the second Launch Year were Five Million Dollars
($5,000,000) (or the alternative Minimum Sales Threshold, as the case may be) or
(ii) by demonstrating to the reasonable satisfaction of CCT that the gross
annual sales of such Licensed Product will reach an annualized run rate of Five
Million Dollars ($5,000,000) (or the alternative Minimum Sales Threshold) as of
the second Launch Year Quarter of the third Launch Year.

 

(ii)         In the event gross annual sales of any Licensed Product for the
third Launch Year or any subsequent Launch Year thereafter are less than Five
Million Dollars ($5,000,000) (or the alternative Minimum Sales Threshold, as the
case may be) each of CCT and Alliqua shall have the right to terminate this
Agreement solely with respect to such Licensed Product, on a Licensed
Product-by-Licensed Product basis (but not with respect to the Agreement in its
entirety) upon six months’ prior written notice to the other Party, which notice
of such termination must be delivered to the other Party within sixty (60)
calendar days following the delivery of the royalty report for the fourth Launch
Year Quarter of the applicable Launch Year. Notwithstanding the foregoing, in
the event that in the third Launch Year the gross annual sales of a Licensed
Product are less than Five Million Dollars ($5,000,000) (or the alternative
Minimum Sales Threshold, as the case may be), the Parties may discuss
alternative options to the termination of this Agreement with respect to such
Licensed Product, including, without limitation, the sale of all rights in and
to such Licensed Product to Alliqua.

 

(c)          Termination by Either Party. This Agreement may be terminated by
either Party in its entirety upon the issuance of a final order or decree issued
in a bona fide proceeding by or before a competent judicial authority that a
Licensed Product infringed the intellectual property rights of a Third Party,
if, after receiving such issuance of a final order or decree of infringement,
CCT or Alliqua, as applicable, fails to or is unable to cure such infringement
within sixty (60) days from the date of issuance.

 

12.3        Termination for Breach.

 

(a)          Each Party shall have the right to terminate this Agreement in its
entirety immediately upon written notice to the other Party if the other Party
materially breaches its obligations under this Agreement (including, but not
limited to, failure of Alliqua to exert Commercially Reasonable Best Efforts in
accordance with the terms set forth in this Agreement) and, after receiving
written notice identifying such material breach in reasonable detail, fails to
cure such material breach within sixty (60) days from the date of such notice.

 

-36-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b)          If the alleged breaching Party disputes in good faith the existence
or materiality of a breach specified in a notice provided by the other Party in
accordance with Section 12.3(a), and such alleged breaching Party provides the
other Party notice of such dispute within the applicable cure period, then the
non-breaching Party shall not have the right to terminate this Agreement under
Section 12.3(a) unless and until an arbitrator, in accordance with Article 13,
has determined that the alleged breaching Party has materially breached the
Agreement and such breaching Party fails to cure such breach within the
applicable cure period (measured as commencing after the arbitrator’s decision).
It is understood and agreed that during the pendency of such dispute, all of the
terms and conditions of this Agreement shall remain in effect and the Parties
shall continue to perform all of their respective obligations hereunder.

 

12.4        Termination for Bankruptcy. To the extent permitted under applicable
Laws, if at any time during the Term of this Agreement, an Event of Bankruptcy
(as defined below) relating to either Party (the “Bankrupt Party”) occurs, the
other Party (the “Non-Bankrupt Party”) shall have, in addition to all other
legal and equitable rights and remedies available hereunder, the option to
terminate this Agreement upon sixty (60) days written notice to the Bankrupt
Party. It is agreed and understood that if the Non-Bankrupt Party does not elect
to terminate this Agreement upon the occurrence of an Event of Bankruptcy,
except as may otherwise be agreed with the trustee or receiver appointed to
manage the affairs of the Bankrupt Party, the Non-Bankrupt Party shall continue
to make all payments required of it under this Agreement as if the Event of
Bankruptcy had not occurred, and the Bankrupt Party shall not have the right to
terminate any license granted herein. The term “Event of Bankruptcy” means: (a)
filing, in any court or agency pursuant to any statute or regulation of any
state or country, (i) a petition in bankruptcy or insolvency, (ii) for
reorganization or (iii) for the appointment of (or for an arrangement for the
appointment of) a receiver or trustee of the Bankrupt Party or of its assets;
(b) with respect to the Bankrupt Party, being served with an involuntary
petition filed in any insolvency proceeding, which such petition is not
dismissed within sixty (60) days after the filing thereof; (c) proposing or
being a party to any dissolution or liquidation when insolvent; or (d) making an
assignment for the benefit of creditors. Without limitation, the Bankrupt
Party’s rights under this Agreement shall include those rights afforded by 11
USAC. § 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”) and
any successor thereto. If the bankruptcy trustee of a Bankrupt Party as a debtor
or debtor-in-possession rejects this Agreement under 11 USAC. § 365(o) of the
Bankruptcy Code, the Non-Bankrupt Party may elect to retain its rights licensed
from the Bankrupt Party hereunder (and any other supplementary agreements
hereto) for the duration of this Agreement and avail itself of all rights and
remedies to the full extent contemplated by this Agreement and 11 USAC. § 365(n)
of the Bankruptcy Code, and any other relevant Laws.

 

12.5        Termination for Safety, Legal or Economic Risks. Either Party may
terminate this Agreement on a Licensed Product-by-Licensed Product basis, or in
the entirety, immediately upon thirty (30) days prior written notice to the
other Party if the terminating Party is advised in writing by its outside legal
counsel that it is not advisable for Alliqua to continue the Commercialization
of such Licensed Product in the Territory as a result of an actual, threatened
or perceived significant safety, legal or economic risk regarding such Licensed
Product as the result of any Law, decree, resolution, Liabilities resulting from
any Claim, or any decision of a Governmental Authority or Regulatory Authority
or change in the interpretation of any current Law, decree, resolution or
decision by a Governmental Authority or Regulatory Authority, provided that a
Party may only terminate this Agreement in the entirety if the actual,
threatened or perceived significant safety, legal or economic risk relates to
the Licensed Products as a whole. Notwithstanding the foregoing, in the event
that CCT purports to terminate this Agreement with respect to a Licensed Product
pursuant to this Section 12.5, the Parties may discuss alternative options to
the termination of this Agreement with respect to such Licensed Product,
including, without limitation, the sale of all rights in and to such Licensed
Product to Alliqua.

 

-37-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

12.6        Effect of Termination.

 

(a)          General. Upon any termination (but not expiration) of this
Agreement in whole or in part, (i) all licenses and rights granted to Alliqua
under this Agreement or with respect to each Licensed Product, as applicable,
shall terminate, (ii) Alliqua shall immediately transfer and assign to CCT or
its designee all materials, Know-How, Regulatory Materials, licenses, Third
Party agreements and other items as are reasonably necessary for CCT to continue
the Development and Commercialization of the Licensed Product(s) and (iii)
Alliqua shall immediately cease all sales, marketing and distribution of the
Licensed Product(s), subject to Section 12.6(d), below.

 

(b)          Additional Effects of Termination. Without limiting the generality
of Section 12.6(a), the following rights and consequences shall apply upon any
termination of this Agreement, it being understood that if this Agreement
terminates on a Licensed Product-by-Licensed Product basis, that this Section
12.6(b) shall apply only with respect to the terminated Licensed Product,
provided that if this Agreement is terminated with respect to all License
Products hereunder, that this Agreement shall automatically terminate without
any further action by the Parties:

 

(i)          Regulatory Materials; Data. To the extent permitted by applicable
Laws, Alliqua shall transfer and assign to CCT all Regulatory Materials to
extent such Regulatory Materials are not owned by CCT, and related data and
Know-How relating to the Licensed Product(s) and shall treat the foregoing as
Confidential Information of CCT (and not of Alliqua) under Article 11; provided
that Alliqua shall be allowed to retain any such materials that a Regulatory
Authority requires Alliqua to retain under applicable Laws.

 

(ii)         Alliqua Assignment. Alliqua hereby irrevocably assigns to CCT,
effective upon such termination, a non-exclusive, fully paid, worldwide, fully
transferrable, irrevocable license (with the right to grant sublicenses through
multiple tiers) to all intellectual property, including all Patents and Know-How
(i) Controlled by Alliqua (or its Affiliates) as of the effective date of such
termination and (ii) related to or useful in connection with the Licensed
Product(s).

 

(iii)        Trademarks. Alliqua shall assign to CCT all right, title and
interest in and to the Product Marks (excluding any such marks that include, in
whole or part, any corporate name or logo of Alliqua) throughout the Territory.

 

-38-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(iv)        Transition Assistance. Alliqua shall provide such assistance, at no
cost to CCT, as may be reasonably necessary or useful for CCT to continue
Developing and/or Commercializing the Licensed Product(s) throughout the
Territory, including assigning or amending as appropriate, upon request of CCT,
any agreements or arrangements with Third Party vendors and/or distributors to
Develop and/or Commercialize the Licensed Product(s). To the extent that any
such contract between Alliqua and a Third Party is not assignable to CCT,
Alliqua shall reasonably cooperate with CCT to arrange to continue to provide
such services for a reasonable time after termination. Alliqua shall not, during
such applicable notice period, take any action that could reasonably be expected
to have a material adverse impact on the further Development and
Commercialization of any Licensed Product.

 

(c)          Inventories. Subject to Section 12.6(d), below, in the event this
Agreement terminates other than for CCT’s breach of the Agreement in accordance
with Section 12.3(a), then CCT shall have the right to purchase from Alliqua any
and all of the inventory of the Licensed Product(s) held by Alliqua as of the
effective date of termination at a price equal to Alliqua’s actual cost to
acquire or manufacture such inventory. CCT shall notify Alliqua within thirty
(30) days after the effective date of termination whether CCT elects to exercise
such right. Notwithstanding the foregoing, in the event this Agreement is
terminated in accordance with Sections 12.3 and 12.4 due to an Event of
Bankruptcy relating to Alliqua, Alliqua shall immediately transfer, at no cost
to CCT, any and all inventory of the Licensed Product(s) held by Alliqua as of
the effective date of termination.

 

(d)          Alliqua’s Right to Sell Off. In the event this Agreement terminates
other than for Alliqua’s breach of the Agreement in accordance with Section
12.3(a), then CCT, at its option, shall (i) have the right to purchase from
Alliqua any and all of the inventory of Licensed Products held by Alliqua as of
the effective date of termination in accordance with the terms of Section
12.6(c), above, or (ii) permit Alliqua, for a period of ninety days (90) from
the effective date of termination, to market, distribute, offer to sell and sell
off then-existing inventory of Licensed Products then on hand (the period
referred to in this Section 12.6(d)(ii), the “Sell-Off Period”). If CCT elects
to allow Alliqua to sell off its then-existing inventory of Licensed Products in
accordance with Section 12.6(d)(ii), following the expiration of the Sell Off
Period, Alliqua shall immediately cease all sales, marketing and distribution of
the then-existing inventory Licensed Products on hand as of the end of such
Sell-Off Period, and CCT, at its option, shall (x) have the right to purchase
from Alliqua any and all of the inventory of Licensed Products held by Alliqua
as of the last date of the Sell-Off Period at a price equal to Alliqua’s actual
cost to acquire or manufacture such inventory, or (y) instruct Alliqua to
destroy or donate (to a recognized not-for-profit charitable organization,
provided however, that such inventory is not further re-sold or distributed for
profit) such remaining inventory.

 

For clarity, Alliqua shall continue to perform all of its obligations under this
Agreement with respect to the Development and Commercialization of Licensed
Products until the effective date of termination and shall not modify in any
material respects such activities from past practices during such period.

 

-39-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

12.7         Survival. Termination or expiration of this Agreement shall not
affect any rights or obligations of the Parties under this Agreement that have
accrued prior to the date of termination or expiration. Notwithstanding anything
to the contrary, the following provisions shall survive any expiration or
termination of this Agreement: 1, 7.3, 8, 9.4, 10, 11, 12.6, 13, 14 and this
Section 12.7.

 

Article 13
DISPUTE RESOLUTION

 

13.1         Disputes. The Parties recognize that disputes as to certain matters
may from time to time arise that relate to either Party’s rights and/or
obligations hereunder. It is the objective of the Parties to establish
procedures to facilitate the resolution of disputes arising under this Agreement
in an expedient manner by mutual cooperation and without resort to litigation.
To accomplish this objective, the Parties agree to follow the procedures set
forth in this Article 13 to resolve any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, if and when a
dispute arises under this Agreement.

 

13.2         Internal Resolution. With respect to all disputes arising between
the Parties under this Agreement, including any alleged breach under this
Agreement or any issue relating to the interpretation or application of this
Agreement, if the Parties are unable to resolve such dispute within thirty (30)
days after such dispute is first identified by either Party in writing to the
other, the Parties shall refer such dispute to the Executive Officers of the
Parties for attempted resolution by good faith negotiations within thirty (30)
days after such notice is received, including at least one (1) in-person meeting
of the Executive Officers within twenty (20) days after such notice is received.
If the Executive Officers are not able to resolve such dispute referred to them
within such thirty (30) day period, then Section 14.11 shall control.

 

13.3         Patent and Trademark Disputes. Any dispute, controversy or claim
relating to the scope, validity, enforceability or infringement of any Patent
Covering the manufacture, use, importation, offer for sale or sale of any
Licensed Product or of any trademark rights relating to any Licensed Product
shall be submitted to a court of competent jurisdiction in the country in which
such Patent or trademark rights were granted or arose.

 

13.4         Equitable Relief. Nothing in this Article 13 shall prevent either
Party from seeking equitable or other relief in a court of competent
jurisdiction. All rights and remedies provided to each Party in this Agreement
are cumulative and in addition to any other rights and remedies available to
such Party at law or in equity.

 

Article 14
MISCELLANEOUS

 

14.1         Entire Agreement; Amendment. This Agreement, together with the
exhibits and schedules attached hereto, which are hereby incorporated herein,
represents the entire agreement and understanding between the Parties with
respect to its subject matter and supersedes and terminates any prior and/or
contemporaneous discussions, representations or agreements, whether written or
oral, of the Parties regarding the subject matter hereto, and supersedes, as of
the Effective Date, all prior and contemporaneous agreements and understandings
between the Parties with respect to the subject matter hereof (including for the
Prior CDA). There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as are set forth in this Agreement. Amendments or changes
to this Agreement shall be valid and binding only if in writing and signed by
duly authorized representatives of the Parties.

 

-40-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

14.2         Force Majeure. Both Parties shall be excused from the performance
of their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall mean conditions beyond the control of the
Parties, including an act of God, war, civil commotion, terrorist act, labor
strike or lock-out, epidemic, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe, and failure of plant or machinery (provided that such
failure could not have been prevented by the exercise of skill, diligence, and
prudence that would be reasonably and ordinarily expected from a skilled and
experienced person engaged in the same type of undertaking under the same or
similar circumstances). If a force majeure persists for more than ninety (90)
days, then the Parties shall discuss in good faith the modification of the
Parties’ obligations under this Agreement in order to mitigate the delays caused
by such force majeure, and if the force majeure prevents CCT from performing its
obligations under either Joint Development Plan for a period of more than one
hundred and eighty (180) days, Alliqua shall have the right to terminate this
Agreement pursuant to Section 12.3.

 

14.3         Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement, and
shall be addressed to the appropriate Party at the address specified below or
such other address as may be specified by such Party in writing in accordance
with this Section 14.3, and shall be deemed to have been given for all purposes
(a) when received, if hand-delivered or sent by confirmed facsimile or a
reputable courier service, or (b) five (5) Business Days after mailing, if
mailed by first class certified or registered airmail, postage prepaid, return
receipt requested.

 

If to CCT:Anthrogenesis Corporation, d/b/a Celgene Cellular Therapeutics

Attn.: Chief Executive Officer

33 Technology Drive

Warren, NJ  07059-5148 

Fax: [****]

 

With a copy to (which shall not constitute notice):

 

Proskauer Rose LLP

Eleven Times Square

New York, NY 10036

Attn: Robert A. Cantone, Esq.

Fax No.: (212) 969-2900

 

-41-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

and

 

Celgene Corporation

86 Morris Avenue

Summit, NJ 07901

Attention: General Counsel

Fax: [****]

 

If to Alliqua:Alliqua, Inc.

2150 Cabot Boulevard West

Langhorne, Pennsylvania 19047

Attention: Chief Executive Officer

Fax No.: [****]

 

With a copy to (which shall not constitute notice):

 

Lowenstein Sandler LLP

65 Livingston Avenue

Roseland, New Jersey 07068

Attention: Michael Lerner, Esq.

Fax No.: (973) 597-6395

 

14.4         No Strict Construction; Headings. This Agreement has been prepared
jointly by the Parties and shall not be strictly construed against either Party.
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. The headings of each Article and Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular Article or
Section. Except where the context otherwise requires, the use of any gender
shall be applicable to all genders, and the word “or” is used in the inclusive
sense (and/or). The term “including” as used herein means including, without
limiting the generality of any description preceding such term.

 

14.5         Assignment. Neither Party may assign this Agreement without the
prior written consent of the other Party, such consent not to be unreasonably
withheld, conditioned or delayed; provided, however, that either Party may
assign this Agreement without the consent of the other Party, effective upon
written notice to the other Party thereof, to (i) an Affiliate of such Party,
provided that the Party hereunder who assigns this Agreement agrees in writing
to continue to be bound by and subject to the terms and conditions of this
Agreement and (ii) any Person who acquires all or substantially all of such
Party’s assets or that is the surviving entity in a merger, recapitalization,
combination or other similar transaction with such assigning Party and who
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement. Further, CCT may assign without Alliqua’s consent its rights to
payments received under this Agreement. Any permitted assignment shall be
binding on the successors of the assigning Party. Any attempted or purported
assignment in violation of this Section 14.5 shall be null and void.

 

-42-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

14.6         Performance by Affiliates. Each Party may discharge any obligations
and exercise any right hereunder through any of its Affiliates. Each Party
hereby guarantees the performance by its Affiliates of such Party’s obligations
under this Agreement, and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance. Any breach by
a Party’s Affiliate of any of such Party’s obligations under this Agreement
shall be deemed a breach by such Party, and the other Party may proceed directly
against such Party without any obligation to first proceed against such Party’s
Affiliate.

 

14.7         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 this
Agreement.

 

14.8         Severability. If any provision of this Agreement is found by a
court of competent jurisdiction to be unenforceable, then such provision shall
be construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it shall be severed
from the remainder of this Agreement. The remainder of this Agreement shall
remain in full force and effect, unless the severed provision is essential and
material to the rights or benefits received by either Party. In such event, the
Parties shall negotiate, in good faith, and substitute a valid and enforceable
provision or agreement that most nearly implements the Parties’ intent in
entering into this Agreement.

 

14.9         No Waiver. No provision of this Agreement can be waived except by
the express written consent of the Party waiving compliance. Except as
specifically provided for herein, the waiver from time to time by either Party
of any of its rights or its failure to exercise any remedy shall not operate or
be construed as a continuing waiver of same or of any other of such Party’s
rights or remedies provided in this Agreement.

 

14.10         Independent Contractors. For all purposes under this Agreement,
Alliqua and CCT and their respective Affiliates are independent contractors with
respect to each other, and shall not be deemed to be an employee, agent, partner
or legal representative of the other Party. This Agreement does not grant any
Party or its employees, consultants or agents any authority (express or implied)
to do any of the following without the prior express written consent of the
other Party: create or assume any obligation; enter into any agreement; make any
representation or warranty; serve or accept legal process on behalf of the other
Party; settle any claim by or against the other Party; or bind or otherwise
render the other liable in any way.

 

14.11         Governing Law. This Agreement shall be governed by the laws of the
state of New York, without regard to its choice of law provisions that would
require the application of the laws of a different jurisdiction. The Parties
hereby irrevocably submit to the jurisdiction of the state and federal courts
sitting in the County and State of New York for the adjudication of disputes
arising out of or relating to this Agreement.

 

-43-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

14.12         Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same legal instrument. Facsimile or PDF execution
and delivery of this Agreement by any Party shall constitute a legal, valid and
binding execution and delivery of this Agreement by such Party. The Parties to
this document agree that a copy of the original signature (including an
electronic copy) may be used for any and all purposes for which the original
signature may have been used. The Parties agree they will have no rights to
challenge the use or authenticity of this document based solely on the absence
of an original signature.

 

[Signature page follows]

 

-44-

 

 

In Witness Whereof, the Parties have executed this Agreement by their duly
authorized officers as of the Effective Date.

 

Alliqua, Inc.   Anthrogenesis Corporation (D/B/A CCT)       By: /s/ David
Johnson   By: /s/ Perry Karsen Name: David Johnson   Name: Perry Karsen Title:
Chief Executive Officer   Title:  Chief Executive Officer          

[Signature Page to License, Marketing and Development Agreement]

 

 

 

 

Exhibit A

Patents

 

Docket No.   Country   Case
Status   Application
No.   Application
Date   Registration
No.   Registration
Date 009516-0148-999   United States of America   Abandoned   10/397,867  
Mar-26-2003         009516-0389-888   United States of America   Expired  
60/699,441   Jul-13-2005         009516-0389-999   United States of America  
Issued   11/485,840   Jul-12-2006   7,928,280   Apr-19-2011 012827-0102-999  
United States of America   Abandoned   13/089,029   Apr-18-2011        
012827-0372-999   United States of America   Pending   13/711,331   Dec-11-2012
       

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

Exhibit B

Joint Development Plan

 

 

[****] – [****] Study

 

Study Design:

 

[****]

 

Target Investigators:

 

[****]

 

Number of Patients:

 

[****]

 

Key Endpoints:

 

[****]

 

Timelines:

[****]

Contracts and Protocol:

[****]

Enrollment:

[****]

Clinical Study Report:

[****]

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

 

[****] Study

 

Study Design:

 

[****]

 

Target Investigators:

 

[****]

 

Number of Patients:

 

[****]

 

Key Endpoints:

 

[****]

 

Timelines:

[****]

Contracts and Protocol:

[****]

Enrollment:

[****]

Post Study Evaluations:

[****]

 

 

Ongoing Additional Clinical Plans:

[****]

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

Exhibit C

CCT Marks

 

BIOVANCE®

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

Schedule 7.1(a)

Annual License Fees

 

Annual License Fees for Biovance:

 

(a)          for the first Launch Year, the greater of (i) [****] (subject to
adjustment as provided in Section 7.4 of this Agreement); and

 

(b)          for the second Launch Year and each Launch Year thereafter, the
greater of (i) [****] or (ii) [****] (subject to adjustment as provided in
Section 7.4 of this Agreement).

 

Annual License Fees for ECMs:

 

(a)          for the first Launch Year, the greater of (i) [****] or (ii) [****]
(subject to adjustment as provided in Section 7.4 of this Agreement); and

 

(b)          for the second Launch Year and each Launch Year thereafter, the
greater of (i) [****] or (ii) [****] (subject to adjustment as provided in
Section 7.4 of this Agreement).

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

Schedule 7.1(b)

Annual License Fees and Base Purchase Price Examples

 

By way of example only for Biovance, assuming that the Base Purchase Price is
equal to [****]:

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall pay to CCT an Annual License Fee for that Launch Year of [****].

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall pay to CCT an Annual License Fee for that Launch Year of [****].

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall not be required pay to CCT any Annual License Fee for that Launch
Year.

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

Schedule 7.1(b) (cont’d)

Annual License Fees and Base Purchase Price Examples

 

By way of example only for ECMs, assuming that the Base Purchase Price is equal
to [****]:

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall pay to CCT an Annual License Fee for that Launch Year of [****].

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall pay to CCT an Annual License Fee for that Launch Year of [****].

 

If the Annual License Fee due for a Launch Year is [****] and the aggregate
amount paid by Alliqua in that Launch Year for such Licensed Product is [****],
Alliqua shall pay to CCT an Annual License Fee for that Launch Year of [****].

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

Schedule 7.2
Milestone Payments

 

 

  Milestone Event for Biovance   Milestone Payment 1 At such time as aggregate
annual Net Sales for any rolling twelve month period equal or exceed [****]  
[****] 2 At such time as aggregate annual Net Sales for any rolling twelve month
period equal or exceed [****]   [****] 3 At such time as aggregate annual Net
Sales for any rolling twelve month period equal or exceed [****]   [****] 4 At
such time as aggregate annual Net Sales for any rolling twelve month period
equal or exceed [****]   [****]

 

  Milestone Event for ECMs   Milestone Payment 5 510(k) or other Regulatory
Clearance and/or Approval   [****] 6 At such time as aggregate annual Net Sales
for any rolling twelve month period equal or exceed [****]   [****] 7 At such
time as aggregate annual Net Sales for any rolling twelve month period equal or
exceed [****]   [****] 8 At such time as aggregate annual Net Sales for any
rolling twelve month period equal or exceed [****]   [****] 9 At such time as
aggregate annual Net Sales for any rolling twelve month period equal or exceed
[****]   [****]

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

Schedule 7.3(a)

Royalties

 

Annual Net Sales of Biovance in the Territory   Royalty Rate [****]   [****]
Percent ([****]%) [****]   [****] Percent ([****]%) [****]   [****] Percent
([****]%) [****]   [****] Percent ([****]%)

 

Annual Net Sales of ECMs in the Territory   Royalty Rate [****]   [****] Percent
([****]%) [****]   [****] Percent ([****]%) [****]   [****] Percent ([****]%)
[****]   [****] Percent ([****]%)

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

[****]