EXHIBIT 10.1

 

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LICENSE AGREEMENT

BY AND BETWEEN

CARA THERAPEUTICS, INC.

AND

VIFOR FRESENIUS MEDICAL CARE RENAL PHARMA LTD.

May 17, 2018

 

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LICENSE AGREEMENT

This License Agreement (the “Agreement”) is entered into as of  May 17, 2018
(the “Effective Date”), by and between Cara Therapeutics, Inc., a corporation
organized and existing under the laws of Delaware and having an office located
at offices at 4 Stamford Plaza,107 Elm Street, 9th Floor Stamford, CT 06902
(“Cara”), and Vifor Fresenius Medical Care Renal Pharma Ltd., a corporation
organized and existing under the laws of Switzerland and having an office
located at Rechenstrasse 37, CH-9014 St. Gallen, Switzerland (“VFMCRP”).  

INTRODUCTION

1.Cara is a biopharmaceutical company focused on, among other things, the
discovery, research and development of novel drugs to address unmet medical
needs.

2.VFMCRP is a pharmaceutical company focused on renal care that has expertise
and resources relating to, among other things, promotion, marketing, sale and
distribution of pharmaceutical products useful in treating patients with renal
diseases.

3.Cara has developed expertise, technology and intellectual property relating to
its drug candidate referred to as CR-845, in intravenous (or I.V.) form, and
wishes to license such drug candidate (solely in I.V. form, except as otherwise
provided per Section 2.7 below) on an exclusive basis in a specified territory
to a company for conducting certain further development, seeking regulatory
approval and commercializing such candidate in such territory (with certain
limitations on such license rights in the United States, as specified below).

5.VFMCRP desires to obtain such license rights in accordance with the terms of
this Agreement.  

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, Cara and VFMCRP agree as follows:  

Article I

DEFINITIONS

Unless specifically set forth to the contrary herein, the following capitalized
terms, when used in this Agreement and whether used in the singular or plural,
shall have the respective meanings set forth below:

1.1“Accounting Standards” means, (a) with respect to Cara or its Affiliates,
United States generally accepted accounting principles (GAAP), consistently
applied, (b) with respect to VFMCRP or its Affiliates, International Financial
Reporting Standards (IFRS), and (c) with respect to either Party’s
Sublicensees/(sub)licensees, GAAP or IFRS, in each case, as such standards exist
from time to time, consistently applied throughout the applicable entity or
organization.

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1.2“Affiliate” means, with respect to an entity, any corporation or other
business entity controlled by, controlling, or under common control with the
first entity, with term “controlling” (with correlative meanings for the terms
“controlled by” and “under common control with”) meaning that the applicable
entity has direct or indirect beneficial ownership of more than 50% of the
voting stock of, or the actual ability (direct or indirect) to direct and
control the management and business policies of, the applicable other
entity.  Notwithstanding the foregoing, the “Affiliates” of VFMCRP will not
include, FMC or any member of the FMC Group.

1.3“Alliance Manager” means a Party’s employee appointed as provided in Section
3.5 to be the primary contact of such Party with respect to Development
activities under this Agreement.  

1.4“API” means active pharmaceutical ingredient, which is also commonly referred
to as drug substance.  

1.5“Applicable Law” means all laws, statutes, rules, codes, regulations, orders,
judgments or ordinances applicable to a Party in connection with the applicable
activities of such Party as contemplated under this Agreement.

1.6“Business Day” means a day that is not a Saturday, Sunday or a day on which
national banking institutions in Stamford, Connecticut and in Zurich,
Switzerland are authorized by Law to remain closed.

1.7“Bundle” means a treatment protocol for which CMS has either (a) issued a
final ruling to include a Licensed Product in the bundled payment under the
End-Stage Renal Disease Prospective Payment System for renal dialysis services,
or (b) provided written confirmation that CMS considers the Licensed Product to
be included as part of the bundled payment under such End-Stage Renal Disease
Prospective Payment System.

1.8“Bundled Product” means one or more Licensed Products together with one or
more other products that are either (a) packaged together for sale or shipment
as a single unit or sold at a single price or (b) marketed or sold collectively
as a single product.

1.9 “Calendar Quarter” means any of the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31.

1.10“Calendar Year” means any successive period of twelve (12) consecutive
months commencing on a January 1 and ending on the following December 31.

1.11“Cara Product Technology” means all Licensed Patent Rights and Licensed
Know-How.  

 

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1.12“Clinical Trial” means a human study designed to measure the safety,
efficacy, tolerability and appropriate dosage of a Licensed Product or Compound
in support of achieving Regulatory Approval of such Licensed Product or
Compound, as the context requires, including a phase 1 clinical study, a phase 2
clinical study, a pivotal clinical study or a Phase 3 Study, as applicable, and
including, where applicable, post-Regulatory Approval clinical studies, such as
“phase 4” trials.    

1.13“CMS” means Center for Medicaid & Medicare Services.

1.14“Combination Product” means any Licensed Product that is comprised of two or
more APIs, at least one of which is the Licensed Compound.  

1.15 “Commercially Reasonable Efforts” means, with respect to particular efforts
to be expended by a Party with respect to any objective, including, without
limitation, Development, seeking Regulatory Approval or Reimbursement Approval,
Commercialization and manufacturing of the Licensed Products under the
Agreement, those efforts and resources commonly used and applied by a similarly
situated pharmaceutical company to conduct similar tasks or obligations for
compounds or pharmaceutical products at a similar stage of research,
development, commercialization and which are of similar market potential as the
Licensed Product and (if applicable) at a similar stage of product life, in each
case taking into account the Relevant Factors in effect at the time such efforts
are expended.  

1.16“Commercialization” or “Commercialize” means any activity directed to
obtaining pricing or reimbursement approvals, manufacturing, marketing,
promoting, distributing, importing, offering to sell or selling a Licensed
Product.

1.17“Completion” means, with respect to a Clinical Trial, that all activities
that are to be conducted under the complete protocol for such Clinical Trial
(including dosing, data collection and study subject follow-up) have been
completed for all study subjects to be enrolled in such Clinical Trial, that all
data and results of such Clinical Trial have been appropriately recorded and
analyzed as provided in the protocol, and the final clinical study report for
such Clinical Trial has been prepared in final form and provided to Cara and
VFMCRP.  

1.18“Compound” means the kappa opioid receptor agonist compound of  Cara known
as “CR-845”, having the chemical structure set forth in Exhibit 1.18 of this
Agreement,  including any salt, known pro-drug (i.e., a chemically modified form
of such agonist compound that is designed and intended to be metabolized in a
human to become such agonist compound), freebase, partially protonated or
deprotonated form, or crystal form of such compound or a stereoisomer thereof.  

1.19“Competing Product” means any pharmaceutical product, other than the
Licensed Product, that is an agonist of the kappa-opioid receptor and is
directed to the inhibition, prevention or treatment of uremic pruritus.

1.20“Confidential Information” means, with respect to a Party, any and all data,
results and other Know-How, which may include scientific, pre-clinical,
clinical, regulatory,

 

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manufacturing, marketing, financial and commercial results, data and other
information, that is or was provided or disclosed by such Party (or its
Affiliate) to the other Party (or its Affiliate), whether communicated in
writing or orally or by any other method, in connection with this Agreement
including all such  information that was disclosed under the Prior
Agreement.  Notwithstanding the foregoing, the term “Confidential Information”
excludes particular information that, in each case as demonstrated by competent
written documentation:

(a)is publicly disclosed and made generally available to the public, either
before or after it becomes known to the receiving Party, and other than through
any act or omission of the receiving Party or its Affiliates in breach of this
Agreement;

(b)was known to the receiving Party or its Affiliate, without obligation to a
Third Party to keep it confidential, prior to the date of first disclosure by
the disclosing Party to the receiving Party;

(c)is subsequently disclosed to the receiving Party or its Affiliate by a Third
Party lawfully in possession thereof without obligation to keep it confidential
and without a breach of such Third Party’s obligations of confidentiality; or

(d)has been independently developed by the receiving Party or its Affiliate
without the aid, application or use of the disclosing Party’s Confidential
Information (the competent written proof of which must be contemporaneous with
such independent development).

1.21“Control” means, with respect to any item of or right under Patent Rights or
Know-How, that the applicable Party owns or has a license (or sublicense, as
applicable) under (other than a license granted by the other Party pursuant to
this Agreement) such items or right, and has the actual rights to grant the
other Party access to and/or a license or sublicense (as applicable) under such
item or right, as provided for in this Agreement, without violating the terms of
any agreement or other arrangement with any Third Party existing at the time
such Party would be required hereunder to grant the other Party such access or
license or sublicense.  

1.22“Cover” means (with correlative meanings for the terms “Covering” or
“Covered”), with respect to a compound, composition of matter, formulation,
apparatus, article of manufacture, product, technology, process or method
(collectively, “Compositions or Technology”) that, in the absence of ownership
of or a license granted under a particular Valid Claim, the manufacture, use,
offer for sale, sale or importation of such Compositions or Technology would
infringe such Valid Claim, or, in the case of a Valid Claim that has not yet
issued, would infringe such Valid Claim if it were to issue.

1.23“Default” means, with respect to a Party, that (a) any material
representation and warranty of such Party set forth in this Agreement shall have
been untrue in any material respect when made, or (b) such Party shall have
failed to perform fully any material obligation of such Party set forth in this
Agreement.  

 

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1.24“Development” or “Develop” means all internal and external research,
development prior to receipt of Regulatory Approval in the applicable country,
including (as applicable):  research, preclinical testing, test method
development and stability testing, toxicology, formulation, process development,
manufacturing scale-up, development-stage manufacturing, quality
assurance/quality control procedure development and performance with respect to
clinical materials, statistical analysis and report writing and clinical
studies, regulatory affairs, and all other pre-Regulatory Approval
activities.  “Development” will also include development and regulatory
activities for additional forms, formulations or indications for a Licensed
Product after Regulatory Approval of such Licensed Product, and clinical trials
initiated following receipt of Regulatory Approval, or to be conducted after a
Regulatory Approval, that was mandated by the applicable Regulatory Authority as
a condition of such Regulatory Approval with respect to an approved indication.
When used as a verb, “Develop” means to engage in Development.

1.25“Development Plan” means the plan developed by JDC and approved by the JSC,
as set forth in Section 4.3, that sets forth the Development activities to be
undertaken by Cara and (if applicable) VFMCRP with respect to Licensed Product,
and as such plan may be amended or modified in writing by the Parties.  

1.26“Dollars” or “$” means the legal tender of the U.S.

1.27 “EEA” means, collectively, the countries that are members of the European
Union (as redefined from time to time) (the “EU”), and member states of the EFTA
(European Free Trade Association) such as Iceland, Liechtenstein, Norway and any
other country in the European Economic Area European Free Trade Association
(EEA-EFTA) in which a centralized marketing authorization issued by the EMA is
valid.

1.28“EMA” means the European Medicines Agency, or any successor agency.

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

1.30“Field” means all therapeutic uses relating to the inhibition, prevention or
treatment of itch associated with pruritus in hemodialysis and
peritoneal-dialysis patients in the Licensed Territory using the Licensed
Product.

1.31“First Commercial Sale” means, as to a particular Licensed Product in a
country in the Licensed Territory, on a country-by-country and Licensed
Product-by-Licensed Product basis, the first sale of such Licensed Product in a
bona fide arms-length transaction by or on behalf of VFMCRP or its Affiliate or
Sublicensee to a Third Party in such country in exchange for cash or some
equivalent to which value can be assigned after such Licensed Product has been
granted all necessary Regulatory Approvals by a Regulatory Authority having
jurisdiction for such country. First Commercial Sale excludes any sale or other
distribution for use in a clinical trial or other Development activity, or for
compassionate or named-patient use sold at or below seller’s costs.

 

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1.32“FMC Group” means FMC and FMC’s Affiliates and FMC US Dialysis Clinics,
which for purposes of this Agreement are not considered to be Affiliates of
VFMCRP.  

1.33“FMC” means Fresenius Medical Care, which for purposes of this Agreement is
not considered to be an Affiliate of VFMCRP.  

1.34“FMC US Dialysis Clinics” means mean Majority Owned Clinics and Formulary
Clinics (in each case, as defined below), and home hemodialysis and
peritoneal-dialysis programs administered through Majority Owned Clinics or
Formulary Clinics.

For the purposes of this Agreement:  (i) “Majority Owned Clinics” shall mean all
dialysis clinics and home dialysis programs in the U.S. that are Affiliates of
FMC; and (ii) “Formulary Clinics” shall mean, except as otherwise provided
below, all dialysis clinics (including home dialysis programs) in the U.S. that
purchase pharmaceutical products under FMC’s or FMC’s Affiliates’ formulary
guidelines and all dialysis clinics (including home dialysis programs) for which
FMC or its Affiliates provide management or administrative services that include
the purchase of pharmaceutical products.  For clarity, the Majority Owned
Clinics and Formulary Clinics existing on the Effective Date are all listed by
name and address on the “List of FMC US Dialysis Clinics” document provided to
Cara as of just prior to the Effective Date.  Notwithstanding the foregoing, the
term “Formulary Clinics” expressly excludes (except as otherwise agreed by the
Parties in writing) all dialysis clinics and home dialysis programs owned or
operated by any of the five dialysis providers listed on Exhibit 1.34 of this
Agreement or any affiliate of any such provider (and, for clarity, any sales of
Licensed Product by Cara (or its Affiliate) to any such clinics or programs
shall not be included in FMC Clinic Sales or in the calculation of “Net Profit”
hereunder).    

1.35“Generic Product” means, with respect to a Licensed Product, any other
product sold by a Third Party that (a) contains the same active ingredient (and
no other active ingredient(s)) and has regulatory approval for the same use as
the Licensed Product, (b) has received marketing approval in the Licensed
Territory by reference to any Regulatory Approval for the Licensed Product (or
any data therein) and (c) is sold in such country by a Third Party that is not a
sublicensee of Licensee or its Affiliates and did not purchase such product in a
chain of distribution that included Licensee, its Affiliates or sublicensees.  

1.36“Good Clinical Practices” or “GCP” means the then-current good clinical
practice standards, practices, and procedures promulgated or endorsed by the
applicable Regulatory Authority as set forth in the guidelines imposed by such
Regulatory Authority, as may be updated from time to time.

1.37“Good Laboratory Practices” or “GLP” means the then-current good laboratory
practice standards, practices, and procedures promulgated or endorsed by the
applicable Regulatory Authority as set forth in the guidelines imposed by such
Regulatory Authority, as may be updated from time to time.

 

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1.38“Good Manufacturing Practices” or “GMP” means the then-current good
manufacturing practice standards, practices and procedures promulgated or
endorsed by the applicable Regulatory Authority as set forth in the guidelines
imposed by such Regulatory Authority, as may be updated from time to time.

1.39 “Governmental Authority” means any United States federal, state or local
government agency or authority, or any governmental agency or authority of a
country or jurisdiction in the Licensed Territory outside the United States, or
political subdivision thereof, or any multinational organization or authority in
the Licensed Territory, or any authority, agency or commission entitled to
exercise any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power, any court or tribunal (or any
department, bureau or division thereof), or any governmental arbitrator or
arbitral body.

1.40“Improvement” means any data, results and other Know-How, including any
improvements, enhancements or modifications to Compound, Licensed Product,
and/or Cara Product Technology, patented or not, that are conceived, reduced to
practice or otherwise discovered, generated, invented or developed during the
Term by or on behalf of VFMCRP or its Affiliate or Sublicensee, alone or in
collaboration with a Third Party (which includes, for clarity, all clinical and
study data and results of research or Development conducted by any such party on
Compound or Licensed Product), provided, however, that an Improvement will not
include any Invention directed towards any compound (excluding, for clarity, the
Compound) that is proprietary to Licensee or any Affiliate of Licensee or that
is developed by or on behalf of Licensee or any Affiliate of Licensee outside of
the scope of this Agreement.  

1.41“Invention” means any new and useful method, process, article of
manufacture, compound, composition of matter, formulation, apparatus, discovery
or finding, or any improvement thereof, that is or may be patentable in at least
one country in the Licensed Territory.

1.42“Investigator-Sponsored Studies” (ISS) shall mean research efforts in which
the investigator designs and implements the study and the investigator or
his/her institution acts as the study sponsor. As the sponsor, the investigator
assumes all responsibilities for complying with applicable regulatory
requirements. ISS may be supported by Cara or VFMCRP in the form of
investigational product, funding, and/or technical input.

1.43“Joint Development Committee” or “JDC” means the committee formed by the
Parties as provided in Section 3.3, to supervise certain Development of the
Licensed Parties by the Parties under this Agreement.  

1.44“Joint Know-How” means any Know-How that is jointly made, identified,
discovered or created during the Term by at least one employee of Cara or its
Affiliate or person contractually required to assign or license such Know-How to
Cara and at least one employee of VFMCRP or its Affiliate or person
contractually required to assign such Know-How to VFMCRP, but excluding any
Improvements.

1.45“Joint Patents” mean all Patent Rights claiming Inventions in Joint
Know-How.

 

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1.46“Joint Technology” means Joint Know-How and Joint Patents

1.47 “Joint Steering Committee” or “JSC” means the committee formed by the
Parties as provided in Section 3.1, to oversee the activities of the Parties
under this Agreement.  

1.48“Know-How” means (a) any scientific or technical results, data and other
information of any type whatsoever, in any tangible or intangible form
whatsoever, that is not in the public domain, which may include databases,
practices, methods, techniques, specifications, formulations, formulae, protein
sequences, DNA sequences, knowledge, know-how, skill, experience, test data
including pharmacological, medicinal chemistry, biological, chemical,
biochemical, toxicological and clinical test data, analytical and quality
control data, stability data, studies and procedures, and manufacturing process
and development information, results and data, (b) any biological, chemical, or
physical material that is not in the public domain or otherwise generally
available to the public and (c) any dosage regimens, control assays, product
specifications, analytical and quality control data, marketing, pricing,
distribution cost and sales data or descriptions that are not in the public
domain or otherwise generally available to the public, and including, for
clarity, all Inventions.

1.49“Licensed Know-How” means all Know-How that (a) is Controlled by Cara as of
the Effective Date or during the Term and (b) is related to the development or
use of Licensed Product in the Field.  

1.50“Licensed Patent Rights” means all Patent Rights in the Licensed Territory
or the U.S. that (a) are Controlled by Cara as of the Effective Date or during
the Term, and (b) Cover Licensed Product or its manufacture or method of use in
the Field (which includes Cara’s rights in applicable Joint Patents).  

1.51“Licensed Product” means any intravenous (I.V.) pharmaceutical drug product,
including any appropriate IV preparation, formulation, or dosage form thereof,
that includes the Compound as at least one API therein.  

1.52“Licensed Territory” means all countries in the world excluding the U.S.,
Japan and South Korea (and subject to Section 10.2(e).  

1.53“Major Market” means any of the following territories: (a) the United
Kingdom; (b) Germany; (c) Spain; (d) Italy, or (e) France.  

1.54“NDA” means (a) a New Drug Application filed with the FDA, or (b) any
similar application required for the purpose of marketing or selling or
commercially using a drug product filed with a Regulatory Authority in a
non-U.S. country or group of countries in the Licensed Territory, including a
Product License Application or Marketing Authorization Application (“MAA”) in
the EEA, but excluding Reimbursement Approval applications.  

1.55“Net Sales” means the gross amount invoiced for sales (during the applicable
period) of Licensed Product in the Licensed Territory by VFMCRP or its
Affiliates or Sublicensees to unaffiliated Third Parties, or (as applicable) for
sales of Licensed Product by Cara to FMC US Dialysis Clinics based on orders
taken by VFMCRP (or its Sublicensee, if

 

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applicable) from such FMC US Dialysis Clinics for such Licensed Products, less
the following deductions from such amount to the extent actually allowed or
incurred with respect to such sales:

(1)[***]    

such deductions, in each case, to the extent allowable in calculating net sales
in accordance with the Accounting Standards, consistently applied through the
selling party’s corporate organization.  

Net Sales will be determined from books and records of sellers, maintained in
accordance with the Accounting Standards, as consistently applied, with respect
to sales of any Licensed Product.

[***].

Net Sales will not include [***].

Each of the foregoing deductions shall be permitted if incurred in the ordinary
course of business in type and amount consistent with good industry practice and
in accordance with the Accounting Standards on a basis consistent with VFMCRP’s
audited consolidated financial statements.

If Licensed Product is sold other than for cash, the Net Sales on such sale
shall be calculated by [***].

In the event that a Licensed Product is sold as part of a Combination Product
(which Combination Product has been approved by the Parties, as required in
Section 2.1), the Net Sales from such sale of the Combination Product, for the
purposes of determining royalty payments, will be determined (a) [***].  In such
event, Licensee will in good faith make a determination of the respective fair
market values of the Licensed Product and all other API(s) included in the
Combination Product, or (b) as otherwise agreed in writing by the Parties.

If a Licensed Product is sold as part of a Bundled Product, then the Seller will
[***].

1.56“Recognized Agent” or “Third Party Distributor” for the purpose of this
Agreement shall mean, with respect to a particular country, any Third Party that
is engaged by VFMCRP to distribute Products directly to customers in such
country (as permitted under the terms of this Agreement).  

1.57“Party” means VFMCRP or Cara individually, and “Parties” means VFMCRP and
Cara collectively.

1.58“Patent Rights” means patents, patent applications or provisional patent
applications, utility models and utility model applications, petty patents,
innovation patents, patents of addition, divisionals, continuations,
continuation-in-part applications, continued prosecution applications, requests
for continued examinations, reissues, renewals, reexaminations and extensions
and supplementary protection certificates granted in relation thereto, in any
country of the world.  

 

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1.59“Phase 3 Study” means a human Clinical Trial conducted in any country in the
Licensed Territory on Licensed Product that meets the requirements of 21 CFR
§312.21(c), and that, when the results of such trial are combined with the
clinical data from other Clinical Trials on Licensed Product completed as of the
Completion of such trial, are intended (by sponsor thereof) to be sufficient to
be able to prepare and file an NDA with the FDA covering Licensed Product.  A
Phase 3 Study typically is a large scale clinical study (usually several
hundreds of patients) performed after preliminary evidence suggesting
effectiveness of the drug has been obtained in phase 2 clinical studies, and it
is intended to gather the pivotal information about effectiveness and safety
that is needed to evaluate the overall benefit-risk relationship of the drug
and, along with other Clinical Trials, to provide an adequate basis for
Regulatory Approval.  

1.60“Phase IV Clinical Trial” means clinical study of a pharmaceutical product
on human subjects commenced after receipt of Regulatory Approval of such
pharmaceutical product for the purpose of satisfying a condition imposed by a
Regulatory Authority to obtain Regulatory Approval, or to support the marketing
of such pharmaceutical product, and not for the purpose of obtaining initial
Regulatory Approval of a pharmaceutical product. The term “Phase IV Clinical
Trials” shall not include Investigator-Sponsored Studies.

1.61“Prior Agreement” means the Confidentiality Agreement between Cara and
VFMCRP effective as of September 16, 2016.

1.62“Product Trademark” means the trademark of Cara set forth in Exhibit 1.62 of
this Agreement.  

1.63“Prosecution” means, with respect to a Patent Right, the preparation,
filing, prosecution and maintenance of such Patent Right (and all directly
related activities), as well as all activities relating to post grant review
proceedings, reexaminations, reissues and the like with respect to such Patent
Right, together with the conduct of interferences, the defense of oppositions
and other similar proceedings with respect to the particular Patent Right; the
term “Prosecute” shall have the correlative meaning.  

1.64“Regulatory Approval” means, with respect to a particular Licensed Product
in a specific country or regulatory jurisdiction, obtaining the technical,
medical and scientific licenses, registrations, authorizations and approvals
(including approvals of NDAs and labeling approvals), in each case as necessary
under Applicable Law for the promotion or sale of such Licensed Product in such
country or regulatory jurisdiction.  

1.65“Regulatory Authority” means any applicable Government Authority involved in
granting approvals, registrations or licenses for the manufacturing, marketing,
selling, reimbursement or pricing of a Licensed Product in the Licensed
Territory or any portion thereof, including but not limited to the FDA, EMA and
PMDA (in each case as applicable), and any successor governmental authority
having substantially the same function.

1.66“Reimbursement Approval” means an approval, agreement, determination or
other decision by the applicable Governmental Authority and/or Regulatory
Authority that establishes prices charged to end-users for biopharmaceutical
products that a Licensed Product will be reimbursed by the Governmental
Authorities and/or Regulatory Authorities in the Territory.

 

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1.67 “Relevant Factors” means, with respect to a particular activity or
obligation of a Party under this Agreement  relating to the Development,
Regulatory Approval, Reimbursement Approval, Commercialization or manufacturing
of a Licensed Product, the applicable of the following factors that likely apply
to or affect such activity or obligation (without taking into account any other
product or products that such Party may be developing, manufacturing or
commercializing): actual issues of safety, efficacy or stability; product
profile (including product modality, category and mechanism of action); stage of
development or life cycle status; actual projected costs of the applicable
development, Regulatory Approval, manufacturing or Commercialization activities
(without taking into account any payments under this Agreement); issues
regarding the ability to manufacture or have manufactured any Licensed Product;
the likelihood of obtaining Regulatory Approvals and the timing of such
Regulatory Approvals; the labeling and anticipated labeling of such Licensed
Product; present and future market potential of such Licensed Product; existing
or projected pricing, sales, reimbursement and profitability of such Licensed
Product; pricing or reimbursement changes in the relevant country in the
Licensed Territory; and proprietary position, strength and duration of patent
protection and anticipated exclusivity of such Licensed Product.  

1.68 “Royalty Term” means, with respect to a Licensed Product being sold in a
particular country or territory in the Licensed Territory, on a Licensed
Product-by-Licensed Product and a country-by-country basis, the period
commencing on First Commercial Sale of the Licensed Product in such country or
territory, and ending on the latest to occur of:  (a) the expiration of the last
Valid Claim within the Licensed Patent Rights that Covers (i) the composition of
matter of the Compound or Licensed Product in such country, or (ii) a method of
use of the Compound for which Licensed Product has obtained a Regulatory
Approval in such country, (b) expiration of marketing or regulatory exclusivity
in such country in the Territory, or (c) the tenth (10th) anniversary of the
date of the First Commercial Sale by VFMCRP or any of its Affiliates or
Sublicensees of such Licensed Product in such country.  

1.69“Senior Executive” means (a) in the case of Cara, the Chief Executive
Officer of Cara (or a senior executive officer designated by the Chief Executive
Officer of Cara), and (b) in the case of VFMCRP, the Chief Executive Officer of
VFMCRP, or such individual’s nominated designee who is a member of the
applicable Party’s senior management with appropriate decision making authority.

1.70“Sublicensee” means any Third Party or other entity that is granted a
sublicense under the license rights granted in Section 2.1, 2.2 or 2.3 of this
Agreement in compliance with Section 2.4.  

1.71“Supply Agreement” means a supply agreement covering manufacture and supply
of Licensed Product to VFMCRP, to be negotiated and entered into by the Parties
as provided in Section 5.4.

1.72“Term” means the term of this Agreement, as defined in Section 10.1 of this
Agreement.  

 

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1.73“Third Party” means an entity or person other than Cara, VFMCRP and their
respective Affiliates.

1.74“U.S.” means the United States of America, including all its territories.  

1.75“Valid Claim” means:  (a) a claim of an issued patent that has not expired
or been abandoned, and has not been revoked, held invalid or unenforceable by a
patent office, court or other governmental agency of competent jurisdiction in a
final judgment from which no further appeal can be taken, or (b) a claim within
a pending patent application which application has not been pending for more
than seven (7) years from the date of its priority filing date and which claim
has not been irretrievably revoked, irretrievably cancelled, irretrievably
withdrawn, held invalid or abandoned by a patent office, court or other
governmental agency of competent jurisdiction in a final judgment from which no
further appeal can be taken, or finally determined to be unallowable in a
decision from which an appeal cannot or can no longer be taken.  For clarity, a
claim of an issued patent that ceased to be a Valid Claim before it issued
because it had been pending too long, but subsequently issues and is otherwise
described by clause (a), shall again be considered to be a Valid Claim once it
issues.  The same principle shall apply in similar circumstances such as if, for
example (but without limitation), a final rejection of a claim is overcome.
“Valid Claim” does not include any claim in any issued and unexpired Cara Patent
in the Territory Covering (i) an alternative manufacturing process to produce
the Compound or the Licensed Product, including its components (i.e., a
manufacturing process other than the manufacturing process used by or on behalf
of Cara or its Affiliate to produce the Compound or the Licensed Product as of
the applicable time) or (ii) an Improvement made solely by one or more employees
of Licensee or its Affiliates or persons contractually required to assign or
license such Improvement (or Patent Covering such Improvement) to Licensee or an
Affiliate of Licensee.

1.76“VFMCRP Product Technology” means all Improvements and all Patent Rights and
other intellectual property rights that claim or cover or otherwise relate to
any Improvements.  

1.77Additional Definitions.  Each of the following definitions is set forth in
the section of this Agreement indicated below:  

 

Defined Term

Section

Additional Clinics

1.29

Additional I.V. Indications

2.9

Bankruptcy Code

2.8

Breach Notice

10.2(a)

Cara Indemnitees

9.5

Defaulting Party

10.2(a)

Dispute

11.1

EU

1.22

Europe Diligence Requirement

5.1(b)

Field Infringement

7.4(b)

FKC

2.2(c)

 

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Defined Term

Section

FMC Clinic Sales

6.6

Global Development Program

4.2(a)

Initiating Party

7.4(d)

Jointly-Owned Patent Rights

7.2

Knowledge

9.2

Local Trademark

5.5

Local Trade Dress

7.6

Losses

9.5

MAA

1.42

Mark Infringement

7.5

Non-Defaulting Party

10.2(a)

Non-Europe Diligence Requirement

5.1(b)

Net Profit

6.6

Patent Challenge

10.2(d)

Recognized Agent

1.43

Records

4.5

Royalty Term

6.4(b)

SEC Filing

8.3(c)

Supply Agreement

5.4

Supply Price

5.4

Taxes

6.9

Third Party Claim

9.5

Third Party Distributor

1.43

VAT

6.9(b)

VFMCRP Indemnitees

9.6

 

1.71Interpretation.  (a) Whenever any provision of this Agreement uses the term
“including” (or “includes”), such term will be deemed to mean “including without
limitation” and “including but not limited to” (or “includes without
limitations” and “includes but is not limited to”) regardless of whether the
words “without limitation” or “but not limited to” actually follow the term
“including” (or “includes”); (b) “herein,” “hereby,” “hereunder,” “hereof” and
other equivalent words will refer to this Agreement in its entirety and not
solely to the particular portion of this Agreement in which any such word is
used; (c) all definitions set forth herein will be deemed applicable whether the
words defined are used herein in the singular or the plural; (d) wherever used
herein, any pronoun or pronouns will be deemed to include both the singular and
plural and to cover all genders; (e) the recitals set forth at the start of this
Agreement, along with the schedules and exhibits to this Agreement, and the
terms and conditions incorporated in such recitals and schedules and exhibits
will be deemed integral parts of this Agreement and all references in this
Agreement to this Agreement will encompass such recitals and schedules and
exhibits and the terms and conditions incorporated in such recitals and
schedules and exhibits; provided that in the event of any conflict between the
terms and conditions of this Agreement and any terms and conditions set forth in
the recitals, schedules or exhibits, the terms of this Agreement will control;
(f) in the event of any conflict between the terms and conditions of this
Agreement and any terms and conditions that may be set forth on any order,
invoice, verbal

 

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agreement or otherwise, the terms and conditions of this Agreement will govern;
(g) this Agreement will be construed as if both Parties drafted it jointly, and
will not be construed against either Party as principal drafter; (h) unless
otherwise provided, all references to Sections, Articles and Schedules in this
Agreement are to Sections, Articles and Schedules of and to this Agreement;
(i) any reference to any federal, national, state, local or foreign statute or
law will be deemed to also refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise; (j) wherever used, the word
“shall” and the word “will” are each understood to be imperative or mandatory in
nature and are interchangeable with one another; (k) the word “or” will not be
exclusive; (l) references to a particular person include such person’s
successors and assigns to the extent not prohibited by this Agreement and
(m) the section headings and captions used herein are inserted for convenience
of reference only and will not be construed to create obligations, benefits or
limitations.

Article II

GRANTS OF RIGHTS; LIMITATIONS

2.1Development and Commercialization Licenses to VFMCRP in Territory.  Subject
to the terms and conditions of this Agreement, Cara hereby grants to VFMCRP an
exclusive (even as to Cara), royalty-bearing license in the Licensed Territory,
with the right to grant sublicenses as provided in Section 2.5 below, under the
Cara Product Technology  and its interest in the Joint Technology solely to:

(a)conduct those Development activities allocated to VFMCRP in the Development
Plan;

(b)seek Regulatory Approvals for the Commercialization of the Licensed Product
in the Field in the Licensed Territory; and  

(c)import and export solely into the Licensed Territory, use, distribute, offer
for sale, promote, sell and otherwise Commercialize the Licensed Product solely
for use in the Field in the Licensed Territory.  

Notwithstanding the above license, VFMCRP covenants and agrees that it and its
Affiliates and Sublicensees shall not Develop or Commercialize any Combination
Product except as agreed by the Parties in writing.  

 

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2.2Manufacture License. Subject to the terms and conditions of this Agreement,
Cara hereby grants to VFMCRP a non-exclusive, royalty-free (but subject to
payment of all consideration owed by VFMCRP with respect to Development or
Commercialization of Licensed Products hereunder) license, with the right to
grant sublicenses as provided in Section 2.5 below, under the Cara Product
Technology and its interest in the Joint Technology to manufacture and have
manufactured the Licensed Products in and outside the Licensed Territory subject
to and solely in accordance with Section 5.6 and solely for use in exercising
the licenses in Section 2.1.

2.3Promotion License Rights to VFMCRP in the U.S.  

(a)Subject to the terms and conditions of this Agreement, Cara hereby grants to
VFMCRP an exclusive (but subject to subsection (b) below) license under the Cara
Product Technology and its interest in the Joint Technology in the U.S. solely
to promote the Licensed Product to FMC US Dialysis Clinics and to take orders
for the Licensed Products solely for sale by Cara to FMC US Dialysis Clinics for
use in treating their customers in the Field.  

(b)Notwithstanding the license grant in Section 2.3(a) above, Cara retains and
shall retain the rights to promote Licensed Product in FMC US Dialysis Clinics,
in compliance with the relevant commercialization plan(s) as approved by the
JSC.

(c)Nothing in this Agreement will prohibit Fresenius Kidney Care (“FKC”) or any
entity in the FMC Group from including references to Licensed Product or
otherwise engaging in customary and routine clinical communications with their
respective patient care staff regarding License Product or dosing regimens that
include Licensed Product.

2.4License to Product Trademark.  Subject to the other terms and conditions of
this Agreement, Cara hereby grants to VFMCRP an exclusive (even as to Cara),
royalty-free license in the Licensed Territory, with the right to grant
sublicenses as provided in Section 2.5 below, under the Product Trademark solely
to promote and otherwise Commercialize the Licensed Product in the Licensed
Territory.  In exercising the foregoing license, VFMCRP shall comply with all
reasonable and typical restrictions and obligations (as provided in writing by
Cara) regarding use of the Product Trademark, and quality of the finished
Licensed Product (or related promotional or advertising materials) that bear the
Product Trademark.  Cara shall have the right to inspect samples of Finished
Licensed Product (and related promotional or advertising materials) that bear
the Product Trademark, to ensure compliance with such restrictions, and VFMCRP
agrees to provide such samples on reasonable request, for such purposes.  

2.5Sublicenses.  

(a)Subject to the terms of this Agreement, VFMCRP shall have the right to grant
sublicenses through multiple tiers, under the rights granted in Section 2.1,
2.2, 2.3 and 2.4 to its Affiliates and to Third Party sub-licensees, with Cara’s
prior written consent, which shall not be unreasonably withheld, delayed or
conditioned, provided that Cara’s prior consent shall not be required for VFMCRP
to grant such sublicenses to the following entities:

(i)VFMCRP's Affiliates in existence on the Effective Date, as listed in Exhibit
2.5(a) of the Agreement;

 

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(ii)Vifor Pharma's Affiliates in existence on the Effective Date, as listed in
Exhibit 2.5(a) of the Agreement;

(iii)FMC and its Affiliates solely to the extent operating as distributors of
VFMCRP; and

(iv)The specific Third Parties that are listed in subpart (c) of Exhibit 2.5(a)
of the Agreement.

(b)With respect to any such sublicenses granted, the sublicense agreement must
be expressly subject to and comply with all terms of this Agreement, and VFMCRP
is and shall remain fully responsible for the compliance by all Sublicensees
with all terms of the Agreement and for any breach of such terms by any
Sublicensee.

2.6Grantback License to Cara.  VFMCRP hereby grants to Cara a worldwide,
royalty-free, perpetual, irrevocable, non-exclusive license, with full rights to
grant sublicenses through multiple tiers, under the VFMCRP Product Technology
and its interest in the Joint Technology:  (a) to research, Develop, use,
import, offer for sale, sell and have sold and export Compound and Licensed
Products outside the Licensed Territory, and (b) to make and have made Licensed
Products worldwide, and (c) to conduct Development of Licensed Product in the
Licensed Territory as provided in the Development Plan.  

2.7[***]

2.8Rights Retained by the Parties; License Limitations.  

(a)Except as expressly set forth in this Agreement, neither Party shall be
granted, acquire or retain any license or other intellectual property interest,
by implication or otherwise, in any Confidential Information of the other Party
or under any Patent Right or proprietary Know-How in which such other Party or
its Affiliates has rights.  Without limiting the generality of the foregoing,
any of Cara’s rights to Cara Product Technology that is not specifically
licensed to VFMCRP shall be retained by Cara.  

(b)Without limiting the generality of Section 2.8(a) above, Cara retains and
shall retain the rights under the Cara Product Technology (i) to make and have
made Licensed Product, on a non-exclusive  basis (but subject to Section 5.6),
in the Licensed Territory for commercial sale of the Licensed Product for use in
the Field in or outside the Licensed Territory (in compliance with the terms of
this Agreement), (ii) to supply Licensed Products to VFMCRP under the terms of
the Supply Agreement (in compliance with the terms of the Supply Agreement) and
(iii) to import, distribute promote, sell and otherwise Commercialize the
Licensed Product on an exclusive  basis outside of the Field either in or
outside of the Licensed Territory.  

 

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(c)VFMCRP covenants and agrees that, unless otherwise agreed by Cara in writing,
VFMCRP shall not assign or otherwise sell or transfer to any Third Party any of
the Cara Product Technology and shall not practice or use the Cara Product
Technology (including to use, offer for sale or sell Licensed Product for use
outside the Field) except as permitted in the license rights (including the
rights to sublicense, subject to Section 2.5) expressly granted in Sections 2.1,
2.2, 2.3 and 2.4.  

(d)Cara covenants and agrees that, unless otherwise agreed by VFMCRP in writing,
Cara shall not assign or otherwise sell or transfer to any Third Party any of
the VFMCRP Product Technology and shall not practice or use the VFMCRP Product
Technology (including to use, offer for sale or sell Licensed Product for use in
the Field in the Licensed Territory) except as permitted in the license rights
(including the rights to sublicense) expressly granted in Section 2.6.

2.9Section 365(n) of the Bankruptcy Code.  All rights and licenses granted under
or pursuant to any section of this Agreement are and will otherwise be deemed to
be for purposes of Section 365(n) of the United States Bankruptcy Code (Title
11, U.S. Code), as amended (the “Bankruptcy Code”) or any comparable Law outside
the United States, licenses of rights to “intellectual property” as defined in
Section 101(35A) of the Bankruptcy Code.  Each of the Parties will retain and
may fully exercise all of its respective rights and elections under the
Bankruptcy Code and any comparable Law outside the United States.  Each Party
agrees that the other Party, as licensee of such rights under this Agreement,
will retain and may fully exercise all of its rights and elections under the
Bankruptcy Code or any other provisions of Applicable Law outside the United
States that provide similar protection for “intellectual property.” The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against a Party under the Bankruptcy Code or analogous provisions of
Applicable Law outside the United States, the other Party will be entitled to a
complete copy of (or complete access to, as appropriate) such intellectual
property and all embodiments of such intellectual property, which, if not
already in such other Party’s possession, will be promptly delivered to it upon
such other Party’s written request thereof.  

2.10Right of Negotiation.  Cara grants to VFMCRP a first right of negotiation to
obtain an exclusive license to develop and commercialize Licensed Product in the
Licensed Territory in therapeutic uses relating to the prevention or treatment
of acute pain in hospital settings (the “Additional I.V. Indications”).  To
exercise such right, VFMCRP shall give Cara written notice of its desire to
obtain such license, and such notice shall include its proposed main terms for
such license. Upon such exercise of such right by VFMCRP, the Parties shall
negotiate exclusively and in good faith the terms of an agreement under which
Cara would grant VFMCRP an exclusive license to develop, manufacture and
commercialize the Licensed Product in the Additional I.V. Indications in the
Licensed Territory, such negotiation for up to [***].

If, after VFMCRP exercises such right, the Parties cannot agree within [***]
after such exercise on a term sheet setting forth the main terms of an agreement
covering the desired license, then thereafter Cara shall be free to negotiate
and enter into any such license agreement(s) with one or more third parties.  If
the Parties agreed on such term sheet during such [***] period, then the Parties
shall negotiate in good faith a license agreement based on such

 

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term sheet during a further [***] period, during which Cara shall not be free to
negotiate and enter into any such license agreement(s) with one or more third
parties, and provided that if the Parties have not entered into such license
agreement by the end of such [*** period, then thereafter Cara shall be free to
negotiate and enter into any such license agreement(s) with one or more third
parties and shall not have any further obligations to VFMCRP with respect to any
Additional I.V. Indications.  

If Cara or its Affiliates Commercialize, or  grant a license to Third Party to
Commercialize, a Licensed Product for an Additional I.V. Indication and/or an
oral formulation of the Compound in the Licensed Territory, in compliance with
the above obligations of this Section 2.10, then the Parties shall agree in good
faith on an effective mechanism to (i) seek to prevent off-label sales in each
other’s respective field (for VFMCRP, in the Field, and for Cara (and its
Affiliates and Third Party licensees), outside the Field) in the Licensed
Territory of such Licensed Product and (ii) provide adequate compensation to the
other Party for off-label sales in its respective field in the Licensed
Territory of such Licensed Product.  If such an agreement is not reached, the
matter will be resolved as provided under Section 11.4.    

2.11Exclusivity.  

(a)Exclusive Efforts in the Field.  During the Term, and for [***] thereafter,
neither Party nor any of its Affiliates will directly, or indirectly through the
grant of rights to any Third Party, promote, sell, offer for sale or otherwise
commercialize any Competing Product in the Field in the Licensed Territory,
without the prior written consent of the other Party, provided that  the
foregoing provisions of this Section 2.11(a) shall have no force or effect (a)
in any country of the Licensed Territory where, and to the extent, such
provisions contravene any applicable antitrust or antimonopoly law, and (b) with
respect to any future Affiliate of either Party that becomes an Affiliate
through acquisition (or similar change of control transaction) of such Party, as
to any compound or product that is in a development or commercialization program
of such Affiliate that exists prior to such acquisition or similar transaction
closes.  

Article III

GOVERNANCE – JSC and JDC

3.1Formation of Joint Steering Committee.  As of the Effective Date, the Parties
establish a Joint Steering Committee, which shall have the responsibilities for
overall coordination and oversight of the activities of the Parties under this
Agreement and (as applicable) the Supply Agreement, including (i) discussing and
agreeing on indications in the Field to be pursued in Development; (ii)
reviewing, commenting on, and (when acceptable) approving the Development Plan
(including any proposed amendments or modifications thereto)); (iii) exchanging
appropriate information about the Development and Commercialization of the
Licensed Products in the Field outside the Licensed Territory; (iv) reviewing
and commenting on commercialization plans for the Licensed Product in the
Licensed Territory in the Field; and (v) otherwise reviewing and discussing each
Party’s activities under this Agreement as needed to ensure efficient and
effective progress towards achieving the goals and intention of the
Agreement.  The JSC can establish additional committees as it deems

 

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necessary to manage the business under the Agreement, which committees shall
have the responsibilities and authority as designated in writing by the JSC and
shall be subject to the direct oversight and control of the JSC.  The JSC may
also have such other authority or make such other decisions as may be delegated
to the JSC by written agreement of the Parties.  

3.2JSC Membership and Decisions.  Promptly after the Effective Date, each Party
shall designate, in its sole discretion, at least three(3) employees to serve as
members of the JSC, each with the requisite experience and seniority to make
decisions on behalf of the Parties with respect to issues falling within the
responsibility of the JSC.  The JSC shall meet at least once per Calendar
Quarter (in person, or by teleconference, if requested by a Party), or as
otherwise agreed by the Parties.  Promptly following formation of the JSC, each
Party shall nominate one of its JSC members as a co-chair of the JSC. The
co-chairpersons shall be responsible for agreeing on and circulating to all
members of the JSC (a) an agenda for each meeting, at least [***] before each
meeting, which agenda shall include all agenda items requested by any member.
The co-chairpersons shall also be responsible, on an alternating basis, for
preparing reasonably detailed accurate written minutes of each meeting of the
JSC, setting forth in reasonable detail all matters discussed and all decisions
made and actions taken by the JSC at the meeting, within [***] after the
meeting.  Each Party may invite a reasonable number of non-voting
representatives to attend JSC meetings; provided that such Party provides
advance notice to the other Party of such attendance, and such representatives
are bound by the confidentiality provisions of this Agreement.  The JSC shall
make decisions or take actions only with the unanimous consent of the Parties
with each Party having collectively one (1) vote.  The members of the JSC shall
use reasonable efforts to reach agreement on all matters requiring a decision or
action by the JSC.  If, despite such efforts, agreement on a particular matter
cannot be reached by the JSC within [***] after the JSC first considers such
matter (or such shorter time as may be reasonable in the circumstances), then
either Party shall have the right to refer such issue to the Senior Executives
of each Party for discussion and resolution by good faith negotiations during a
period of [***].  Any final decision mutually agreed to by the Senior Executives
shall be conclusive and binding on the Parties.  If such issue has not been
resolved by the Senior Officers within such [***] period, then:

(a)Cara shall have the final decision making authority to the extent that such
particular matter relates to (i) the Development of the Compound or the Licensed
Product anywhere in the world (to the extent that the Development matter may
affect the safety profile of the Licensed Product or the Commercialization of
the Licensed Product outside of the Licensed Territory, such as potentially
negatively affecting the risk/benefit relationship or assessment for the
Licensed Product), or (ii) obtaining or maintaining Regulatory Approvals for the
Compound or the Licensed Product outside of the Licensed Territory or
communicating with Regulatory Authorities outside of the Licensed Territory in
regards to the Compound or Licensed Product (subject to such decision will not
materially negatively impact the rights granted to VFMCRP under this Agreement),
and/or (iii) Commercialization of the Compound or the Licensed Product outside
of the Licensed Territory, including reimbursement by governmental and
non-governmental payers;

 

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(b)VFMCRP shall have final decision making authority to the extent that such
particular matter relates to (i) obtaining or maintaining Regulatory Approvals
for the Licensed Product in the Licensed Territory or communicating with
Regulatory Authorities in the Licensed Territory in regards to the Compound or
Licensed Product, and/or (ii) Commercialization of the Licensed Product in the
Licensed Territory, including reimbursement by governmental and non-governmental
payers.  and

(c)any other matter that is not described in subsection (a) or (b) above shall
be deadlocked and neither Party shall have final decision-making authority with
respect thereto and such dispute shall be resolved in accordance with the
procedures set forth in Article 11.  Without limiting the foregoing, the Parties
hereby agree that matters explicitly reserved to the consent, approval or other
decision-making authority of one or both Parties, as expressly provided in this
Agreement, are outside the jurisdiction and authority of the JSC or any
subcommittee thereof (including the JDC), including amendment, modification or
waiver of compliance with this Agreement.

For clarity, the JSC shall not have any authority to amend, modify or waive the
provisions of this Agreement.

3.3Formation of Joint Development Committee.  As of the Effective Date, the
Parties establish a Joint Development Committee, which shall have the
responsibilities for overall coordination and oversight of the Development
activities of the Parties under this Agreement, including (i) coordinating
communication and operations regarding the development of, and the making of
regulatory filings for the Licensed Products in the Licensed Territory in the
Field in order to obtain Regulatory Approvals of Licensed Products in the
Licensed Territory in the Field; (ii) preparing the Development Plan (including
regulatory filing plans), and any amendments or modifications of the approved
Development Plan for review and approval by the JSC; (iii) discussing and
establishing a regulatory strategy (and updates thereto) for Licensed Product,
for review and comment and, when acceptable, approval by the JSC; (iv)
exchanging appropriate information about the Development of the Licensed
Products in the Field in the countries outside the Licensed Territory; (v)
reviewing and discussing any regulatory, scientific and medical aspects of
Clinical Trials (including, but not limited to Phase IV Clinical Trials) in the
Licensed Territory, including but not limited to protocols and synopsis for such
Clinical Trials; (vi) reviewing progress reports on Development results and
providing direction and comments to the Alliance Managers regarding Development
tasks and strategy; and (vii) facilitating the flow of information between the
Parties with respect to Development activities being conducted for the Licensed
Product,  in or outside the Field, that are relevant to the Licensed Territory
and facilitating exchange of data and results arising in Clinical Trials of
Licensed Products relevant to the Licensed Territory, whether conducted in or
outside the Licensed Territory and in the Field.  The JDC shall be subject to
the direct oversight and control of the JSC.  The JDC may also have such other
authority or make such other decisions as may be delegated to the JDC by written
agreement of the Parties.  

3.4JDC Membership, Meetings and Decisions.  Promptly after the Effective Date,
each Party shall designate, in its sole discretion, at least three (3) employees
to serve as members of the JDC, each with the requisite experience and seniority
to make decisions on behalf of the

 

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Parties with respect to the Development matters and issues falling within the
responsibility of the JDC.  The JDC shall meet at least once per Calendar
Quarter (in person, or by teleconference, if requested by a Party), or as
otherwise agreed by the Parties.  Each Party may invite a reasonable number of
non-voting representatives to attend JDC meetings; provided that such Party
provides advance notice to the other Party of such attendance, and such
representatives are bound by the confidentiality provisions of this
Agreement.  The JDC shall elect a Chair, who shall be responsible for
circulating to all members of the JDC (a) an agenda for each meeting, at least
[***] before each meeting, which agenda shall include all agenda items requested
by any member, and (b) the accurate minutes of each meeting of the JDC, setting
forth in reasonable detail all matters discussed and all decisions made and
actions taken by the JDC at the meeting, within [***] after the meeting.  The
JDC shall make decisions or take actions only with the unanimous consent of its
members.  The members of the JDC shall use reasonable efforts to reach agreement
on all matters requiring a decision or action by the JDC.  If, despite such
efforts, agreement on a particular matter cannot be reached by the JDC within
[***] after the JDC first considers such matter (or such shorter time as may be
reasonable in the circumstances), then the matter shall be referred to the JSC
for discussion and resolution in accordance with Section 3.2.  

3.5Formation of Supply Chain Committee.  Within 120 days of the Effective Date,
the Parties shall establish a Supply Chain Committee (the “SCC”), which shall
have the responsibilities for overall coordination and oversight of the
manufacturing and supply of Licensed Product under this Agreement, including (i)
coordinating communication and operations regarding manufacturing of Licensed
Products, and resolving supply chain issues; and (ii) exchanging appropriate
information about manufacture and supply chain, both in and outside the Licensed
Territory.  The SCC shall be subject to the direct oversight and control of the
JSC.  The SCC may also have such other authority relating to manufacturing and
supply chain matters, or make such other related decisions, as may be delegated
to the SCC by written agreement of the Parties.  

3.6SCC Membership, Meetings and Decisions.  Within 120 days of the Effective
Date, each Party shall designate, in its sole discretion, at least three (3)
employees to serve as members of the SCC, each with the requisite experience and
seniority to make decisions on behalf of the Parties with respect to the
manufacturing, supply chain and quality matters and issues falling within the
responsibility of the SCC.  The SCC shall meet at least once per Calendar
Quarter (in person, or by teleconference, if requested by a Party), or as
otherwise agreed by the Parties.  Each Party may invite a reasonable number of
non-voting representatives to attend SCC meetings; provided that such Party
provides advance notice to the other Party of such attendance, and such
representatives are bound by the confidentiality provisions of this
Agreement.  The SCC shall elect a Chair, who shall be responsible for
circulating to all members of the SCC (a) an agenda for each meeting, at least
[***] before each meeting, which agenda shall include all agenda items requested
by any member, and (b) the accurate minutes of each meeting of the SCC, setting
forth in reasonable detail all matters discussed and all decisions made and
actions taken by the JDC at the meeting, within [***] after the meeting.  The
SCC shall make decisions or take actions only with the unanimous consent of its
members.  The members of the SCC shall use reasonable efforts to reach agreement
on all matters requiring a decision or action by the SCC.  If, despite such
efforts, agreement on a particular matter cannot be reached by the SCC within
[***] after the SCC first considers such matter (or such shorter

 

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time as may be reasonable in the circumstances), then the matter shall be
referred to the JSC for discussion and resolution in accordance with Section
3.2.  

3.7Alliance Managers.  Promptly after the Effective Date, each Party shall
appoint one of its employees, who is significantly involved on a managerial
level for Development and/or Commercialisation of Licensed Product, as such
Party’s Alliance Manager with respect to the Development and/or
Commercialisation project under this Agreement.  The Alliance Managers shall
serve coordinate and facilitate day-to-day communication between the Parties
about and exchange relevant information and progress on each Party’s Development
and/or Commercialisation activities hereunder.  Each Party shall ensure that its
Alliance Manager is reasonably available for meeting or discussions with the
other Alliance Manager and cooperates reasonably in all such communications and
information exchange.

3.8Discontinuation of Participation on a Committee.  For clarity, Cara’s
membership in the JSC, JDC or SCC shall be at its sole discretion, as a matter
of right and not obligation, for the sole purpose of participation in
governance, decision-making, and information exchange with respect to activities
within the jurisdiction of the Committee.  Cara shall have the right to
withdraw, at any time, from membership on any of the JSC, JDC or SCC upon [***]
prior written notice to VFMCRP, which notice shall be effective upon the
expiration of such [***] period.  Following the issuance of such notice: (a)
Cara’s membership in such committee shall be terminated and (b) each Party shall
have the obligation to provide and the right to continue to receive the
information it would otherwise be required to provide and entitled to receive
under the Agreement and to participate directly with the other Party in
discussions, reviews and approvals currently allocated to such committee
pursuant to this Article 3.  If, at any time following issuance of such a
withdrawal notice, Cara wishes to resume participation in the committee, Cara
shall notify VFMCRP in writing and, thereafter, Cara’s representatives to the
committee shall be entitled to attend any subsequent meeting of the committee
and to participate in the activities of, and decision-making by, the committee
as provided in this Article 3 as if such withdrawal notice had not been issued
by Cara pursuant to this Section 3.8.  If the JSC, JDC or SCC is disbanded, then
any data and information of the nature intended to be shared within such
committee  hereunder shall thereafter be provided by each Party directly to the
other Party.  

Article IV

DEVELOPMENT PROGRAM; REGULATORY MATTERS

4.1General.  The Parties intend to collaborate with respect to clinical
development to gain Regulatory Approvals of the Licensed Product by the
applicable Regulatory Authorities in the U.S., EU, Switzerland, United Kingdom
as well as outside the EU in the Licensed Territory, as provided herein.

4.2Development Program.  

(a)The Parties will collaborate (through the JDC) in defining and agreeing on
the details of the development program for the Licensed Product in the Field
with the applicable Regulatory Authorities in the U.S. (FDA) as well as in the
EU (EMA) (and in applicable other

 

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countries in the Licensed Territory), which program (the “Global Development
Program”) will be described in a comprehensive and detailed Development Plan
prepared by the JDC and approved by the JSC.  Cara shall be responsible, at its
own cost, to undertake any clinical and non-clinical development agreed with FDA
and EMA and set forth in the Development Plan to gain such Regulatory Approvals
of Licensed Product in the U.S. and in the EU for the indications in the Field
the JSC determined to pursue. VFMCRP shall on a regular basis be informed about
the progress on such Development activities performed by Cara.  VFMCRP shall
contribute and provide, at its own cost, to Cara VFMCRP’s clinical development
expertise as reasonably useful for such Development activities.  Notwithstanding
the foregoing, should Third Party costs  associated with Cara’s clinical EMA
Development exceed $20,000,000, Cara and VFMCRP shall split the Third Party
costs in excess of $20,000,000 on a 50%/50% basis (with VFMCRP reimbursing Cara
for such excess costs based on invoices for such costs as submitted by Cara,
within [***] of each invoice), provided that the Parties shall agree reasonably
and in good faith on a reasonable budget for such excess costs, such budget to
reflect the actual efforts needed to achieve the goals of such clinical EMA
Development, given the circumstances then prevailing.  Any and all clinical
studies on the Licensed Product to be undertaken in the Field in the Licensed
Territory by or on behalf of either Party (or its Affiliate or Sublicensee)
shall be jointly developed and discussed between the Parties (through the JDC)
and ultimately approved by the JSC, acting reasonably and in good faith, and
shall be set forth in detail in the Development Plan.  

(b)In the event that a Party desires to conduct local clinical studies in or
outside the Licensed Territory to obtain a Regulatory Approval and/or in support
of reimbursement for the Licensed Product (that is, studies that are in addition
to those set forth in the Development Plan), then such local clinical study
shall be performed (as applicable) by VFMCRP (if needed for the Licensed
Territory excluding the US) or by Cara, if needed for outside the Licensed
Territory, in each case at such Party’s own cost in accordance with an amended
Development Plan covering the details of such studies prepared by the JDC and as
approved by the JSC.  Should the other Party wish to get access to the data
resulting from such local clinical studies, then it shall participate by
reimbursing [***] of the cost for such local clinical study (provided that it
shall in any event have access to and rights to use any safety data or other
non-efficacy data required to be reported by such Party to a Regulatory
Authority).  

(c)If any Clinical Trial proposed to be conducted by VFMCRP is determined by the
JSC to be likely to generate efficacy data that will be useful for the
Regulatory Approval applications in countries outside the Licensed Territory,
other than trials or studies that are part of the Global Development Program,
then:  (i) if Cara desires to use the resulting data (other than safety data),
both Parties shall equally bear the cost for such study.  The Parties also shall
discuss reasonably and in good faith other Development activities that may be
conducted jointly by the Parties together (and co-founded by both Parties), or
by VFMCRP alone (funded by VFMCRP) in the Licensed Territory.  All such
Development activities need prior approval by the JSC, which shall not
unreasonably be withheld with the JSC acting in good faith, and which shall be
included in the Development Plan.  

(d)VFMCRP – through its joint venture partner FMC – shall use Commercially
Reasonable Efforts to accelerate the clinical Development process in the U.S.to

 

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the largest extent possible, as requested by Cara and consistent with the
Development Plan.  This includes engaging with Frenova (or the applicable other
Affiliate of FMC, as appropriate) to facilitate CRO services. For the avoidance
of doubt, Cara shall be liable for any cost and/or expenses charged by Frenova
for its CRO services performed for Cara hereunder.

(e)A separate Safety Data Exchange Agreement, on reasonable and typical terms,
shall be negotiated and entered into between the Parties, to specify each
Party’s respective responsibilities for exchanging safety data and information
and maintaining safety databases and safety and adverse event reporting
obligations.  

(f)Upon reasonable request by VFMCRP, with sufficient notice of no less than
[***], VFMCRP may conduct an audit of the Clinical Trials systems and data
supporting the filing and initial application for Regulatory Approval in the
Licensed Territory, such audit to be conducted in compliance with Cara’s
reasonable confidentiality and regulatory requirements. VFMCRP will bear the
cost of the audit.  In the event that such audit reveals significant issues and
concerns related to non-compliance of processes and validity of data with
Applicable Law, then on written notice of such issues and concerns, Cara will
use Commercially Reasonable Efforts to solve the noncompliance issues and to
inform VFMCRP of the corrective and preventative actions taken.  

4.3Development Plan.  The JDC shall be responsible for preparing, and submitting
to the JSC for review and comment and, when acceptable, approval, the initial
Development Plan, which sets forth in reasonable detail the tasks, timeline and
budget for Development activities of Licensed Product under the Global
Development Program (including regulatory approvals filing plans), and for
preparing, and submitting to the JSC for review and comment and, when
acceptable, approval, all subsequent amendments or modifications to the
Development Plan, as reasonably needed or appropriate for the Development of
Licensed Product consistent with this Agreement.  Each Party shall conduct its
respective Development activities on Licensed Product in strict accordance with
the approved Development Plan, including using Commercially Reasonable Efforts
to achieve the timelines set forth therein.  The Development Plan shall set
forth the tasks to be undertaken by each Party (including relevant technology to
be used and materials to be provided) under the Global Development Program, or
otherwise as provided in Section 4.2.  From time to time, either Party may
propose amendments or modifications to the Development Plan as needed based on
the progress or results of the Development of Licensed Products, and in such
case the JDC shall review in good faith and comment on the proposed amendments
or modifications, and if the JDC agrees, shall subject the agreed amendments or
modifications to the JSC for review and comment and, if acceptable, approval.  

4.4Conduct of Development.  

(a)Each Party shall use diligent Commercially Reasonable Efforts to conduct the
Development tasks assigned to it under the Development Plan, with the goal of
obtaining Regulatory Approvals in the Licensed Territory (in such countries
where it is commercially reasonable to seek such approvals) and in the U.S. as
soon as reasonably possible, with all such efforts in accordance with the
Development Plan.  Each Party shall comply with Applicable Law (including GLP
and/or GCP) in all such efforts.  

 

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(b)Each Party shall have the right to engage and utilize the services of
appropriate Third Party contractors to perform particular tasks or services
under the Development Plan on its behalf with the selection of any such Third
Party contractor to be specifically discussed and consulted with the JDC.  Any
such engagement shall be pursuant to contracts that are fully consistent with
this Agreement and protect all rights and interests under this Agreement of each
Party.  Cara and VFMCRP shall remain at all times fully responsible and liable
for its responsibilities and commitments under this Agreement.

(c)Each Party shall keep the other Party reasonably informed of its progress and
all data and results of its Development activities under the Agreement.  

4.5Records.  Each Party shall maintain, and shall ensure that its Affiliates or
Sublicensees involved in any Development activities hereunder maintains,
records, in sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes, which shall fully and accurately reflect all
work done and results achieved in the performance of the Development program
hereunder by or on behalf of such party (the “Records”), including the
procedures, techniques and methodologies used, the progress made, all data,
results and any Invention conceived or reduced to practice or otherwise created,
made or obtained within the scope of or in connection with such Development
program.  As part of keeping the Records, each such party shall ensure that all
of its personnel, and all of its agents that are involved in the Development
program, will keep accurate laboratory notebooks (which may be in electronic
form), which laboratory notebooks: (A) shall be duly signed, dated and
witnessed; and (B) shall be created and maintained in accordance with its
standard operating procedures that the Party reasonably believes will be
sufficient to allow for said laboratory notebooks to be used in any proceeding
before the United States Patent and Trademark Office or United States courts, in
order to establish the date of Invention for any Invention and to defend against
a charge of derivation in accordance with the United States patent laws.  During
the Term, each Party shall, upon reasonable written request by the other,
provide to such other Party copies of the Records or (if applicable) a requested
part or summary thereof.  

4.6Regulatory Matters.  

(a)The JDC shall discuss and establish (and update as needed) a reasonable
regulatory strategy for the Licensed Product in the Licensed Territory,
consistent with this Agreement, that ultimately shall be submitted to the JSC
for review and comment and, when acceptable, approval by the JSC.  

(b)VFMCRP shall have primary responsibility and obligation, at its cost, for
preparing the EMA dossier for registration in the EU with Cara having the
obligation to provide all the content and subject matter expertise required for
such registration process at its own cost, consistent with the Global
Development Program.  Upon completion of the dossier, VFMCRP shall file the
dossier with the competent authorities in the EU and be responsible for
adaptation of the dossier for other countries of the Licensed Territory.  

(c)Subject to any requirements of local legislation to the contrary, the holder
of Regulatory Approvals for the Licensed Products in the Licensed Territory
(excluding, for

 

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clarity, the U.S.) shall be VFMCRP, or its Affiliates or Sublicensees, as
applicable. As such, VFMCRP, or its applicable Affiliate or Sublicensee, shall
be responsible for the maintenance of all such Regulatory Approvals in the
Licensed Territory at its own cost.  VFMCRP shall keep Cara fully informed of
the progress and results of all regulatory activities for Licensed Products in
the Licensed Territory and shall provide to Cara copies of all relevant
regulatory filings and material correspondence relating to Licensed Product,
including copies of all Regulatory Approval applications (and approvals
thereof), in the United Kingdom, France, Italy, Spain, Switzerland, Germany,
Canada, Mexico, Australia, Brazil and China.  In addition, if requested by Cara
based on reasonable needed, VFMCRP shall provide to Cara copies of all relevant
regulatory filings and material correspondence relating to Licensed Product,
including copies of all Regulatory Approval applications (and approvals
thereof), in the other applicable countries in the Licensed Territory.  Cara
shall use Commercially Reasonable Efforts to support VFMCRP by sharing its
Licensed Product related expertise as reasonably needed by VFMCRP for its
regulatory activities, and shall participate in regulatory meetings in the
Licensed Territory as needed, provided such competent authorities allow for such
participation.  Cara shall use Commercially Reasonable Efforts to support, at is
own cost, VFMCRP in the maintenance of the Regulatory Approvals obtained in the
Licensed Territory.  

(d)Cara shall retain full rights for all regulatory activities and interactions
outside the Licensed Territory, including preparing, filing, pursuing and
maintaining Regulatory Approval applications outside the Licensed Territory and
shall own all such Regulatory Approvals for Licensed Product outside the
Licensed Territory (including for clarity in the U.S.).

(e)Information Rights Granted to Licensee.  Cara will provide access to a
complete electronic copy of all relevant filings with Regulatory Authorities
covering Licensed Product for use in the Field outside the Licensed Territory
that are Controlled by Cara  and are necessary or reasonably useful to VFMCRP in
support of VFMCRP’s preparation and filing of any applications for Regulatory
Approvals with respect to Licensed Product for use in the Field in the Licensed
Territory in accordance with this Agreement.  To the extent not already provided
by Cara to VFMCRP, Cara will make available to VFMCRP copies of material
documentation related directly to the Compound or Licensed Product, including
relevant material research data and reports, material regulatory materials and
correspondence (including INDs and MAA(s) in the U.S.), material clinical and
nonclinical data, and chemistry, manufacturing and controls (“CMC”) data
(collectively, the “Clinical Data”) to the extent the applicable such Clinical
Data is necessary to conduct clinical studies and/or obtain Regulatory Approvals
for Licensed Product in the Licensed Territory for use in the Field, in each
case, in accordance with a Development Plan approved or reviewed, as the case
may be, by the JSC.  VFMCRP and its Affiliates and permitted Sublicensees will
be entitled at no cost to access, use and reference the filings made to
Regulatory Authorities by Cara, and the applicable Clinical Data, that is
provided to VFMCRP by Cara under the above for all uses in the Development and
Commercialization of the Compound or Licensed Product in the Licensed Territory,
subject to and in accordance with the terms of this Agreement.  In furtherance
of the foregoing, subject to the rules of the relevant Regulatory Authority and
the terms and conditions of this Agreement, Cara hereby grants to VFMCRP a right
of reference to any Regulatory Approval that covers Licensed Product for use in
the Field outside the Licensed Territory and is Controlled by Cara during the
Term (including the right to rely upon and otherwise use all information and
data included in the application for

 

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such Regulatory Approval and used to support such Regulatory Approval), solely
for VFMCRP’s or its Affiliates’ or its permitted Sublicensees’ use in
Development and Commercialization of Licensed Product in the Licensed Territory
in the Field during the Term in accordance with this Agreement.  All such
filings with Regulatory Authorities and Clinical Data will be considered
Confidential Information of Cara for all purposes of this Agreement including
the rights and obligations under Article VIII hereof.  

4.7Changes to Applicable Laws.  In the event that following the Effective Date
there is a change in the Applicable Laws existing as of the Effective Date with
respect to any import or export of pharmaceutical products from Canada into the
US, the Parties shall promptly meet and discuss in good faith the consequences
of such new Applicable Laws or changes to current Applicable Laws as they relate
to the Parties’ respective rights and obligations under the License Agreement
and endeavor to find a mutual agreement on how to address these consequences (by
amendment to this agreement or otherwise) in a manner designed to preserve each
Party’s respective rights and obligations as such rights and obligations existed
prior to the relevant change in Applicable Laws.

4.8Investigator-Sponsored Studies. The JDC shall establish and implement a
policy regarding publications of investigator-sponsored trials of the Licensed
Product in the Field in the Licensed Territory, which shall include the ability
of the Parties to comment thereon, including without limitation with respect to
study design and endpoints, and to request delays to allow the filing of patent
applications on any patentable inventions disclosed therein in a manner
consistent with Section 7.  

4.9Adverse Drug Events.  The Parties will, within 90 days after the Effective
Date, finalize and enter into a reasonable and customary Safety Data Exchange
Agreement.  Such Safety Data Exchange Agreement will provide for the exchange by
the Parties of any information that a Party becomes aware of in the Licensed
Territory concerning any adverse event in or involving a research patient or
subject or, in the case of non-clinical studies, an animal in a toxicology
study, and the seriousness thereof, whether or not determined to be attributable
to the Compound or any Licensed Product, including any such safety information
received by either Party from a Third Party (subject to receipt of any required
consents from such Third Party) (such information, the “Safety Data”).  Cara
will own all of the Safety Data, and the Safety Data Exchange Agreement will
include provisions requiring the establishment of a global safety database owned
and maintained by Cara. It is understood that each Party and its Affiliates or
licensees/sublicensees will have the right to disclose such information if such
disclosure is reasonably necessary to comply with applicable laws and
regulations and requirements of Regulatory Authorities within its respective
territory with respect to its filings and activities related to the Compound and
the Licensed Products.

 

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Article V

COMMERCIALIZATION OF LICENSED PRODUCTS

5.1Responsibility for Commercialization in the Licensed Territory.  

(a)VFMCRP shall have the responsibility and obligation, at its sole expense and
using Commercially Reasonable Efforts (subject to subsection (b) below), for the
Commercialization (other than manufacturing, to the extent Cara is supplying
Licensed Product under the Supply Agreement) of Licensed Products throughout the
Licensed Territory, subject to the payment and other relevant obligations under
this Agreement.  VFMCRP shall conduct, and is responsible for ensuring that its
applicable Affiliates and Sublicensees conduct, all such responsibilities and
activities subject to and in compliance with the other terms of this Agreement
and all Applicable Law.  In particular, but without limiting the foregoing,
VFMCRP is solely responsible, at its sole cost, for the following activities on
Licensed Products in the Licensed Territory:  (i) developing and executing a
commercial launch and pre-launch plan for Licensed Product Commercialization in
the Licensed Territory, which would be reviewed and commented on by the JSC,
(ii) marketing and promotion activities; (iii) booking sales and distributing
Product and performing related activities; (iv) handling all aspects of order
processing, invoicing and collection, inventory and receivables; and (v)
providing customer support to all customers and end users in the Licensed
Territory.  

(b)VFMCRP shall use Commercially Reasonable Efforts to Commercialize the
Licensed Product in at least the following countries:  (i) within Europe in the
United Kingdom, France, Italy, Spain, Switzerland and Germany after receiving
required Regulatory Approvals and Reimbursement Approval therefor (“Europe
Diligence Requirement”), and (ii) outside of Europe in Canada, Mexico,
Australia, Brazil and China after receiving required Regulatory Approvals and
Reimbursement Approval in these countries (“Non-Europe Diligence Requirement”).
If VFMCRP determines that it will not seek Regulatory Approval and/or
Reimbursement Approval of any Licensed Product in any of the countries set forth
in this Section 5.1(b), then VFMCRP will promptly notify Cara of such
determination.  

5.2VFMCRP Promotion in U.S.  Pursuant to the rights granted in Section 2.2,
VFMCRP shall use Commercially Reasonable Efforts to promote sales of Licensed
Product to the FMC US Dialysis Clinics and to obtain orders for purchase of the
Licensed Product from the FMC US Dialysis Clinics.  All such promotion and
order-taking efforts shall be consistent with Applicable Law and reasonable
promotion and detailing guidelines of Cara.  Cara shall be responsible and have
sole rights for booking and fulfilling sales of Licensed Product based on orders
received by VFMCRP (or its Affiliate or its Sublicensee) from FMC US Dialysis
Clinics.  Cara shall use Commercially Reasonable Efforts to fulfil all orders
for Licensed Product that VFMCRP (or its Affiliate or its Sublicensee) receives
from FMC US Dialysis Clinics and submits to Cara.  The Parties acknowledge and
agree to use commercially reasonable efforts to work together in good faith to
establish appropriate market access for Licensed Product in the U.S., including
Medicare reimbursement (as a part of the Bundle or otherwise) and reimbursement
by other federal or state government payor programs.  Cara shall be responsible
for leading discussions with federal or state government payors, including but
not limited to CMS, regarding reimbursement for Licensed Product sold in the
U.S.  

 

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5.3Progress Reports and Reporting.  Until the First Commercial Sale of a Product
in each Major Market country, VFMCRP shall provide to Cara, within [***] after
the end of each Calendar Quarter, a reasonably detailed report that provides
reasonably detailed summaries of the activities undertaken in the prior twelve
(12) calendar months to Develop the Licensed Products and the results and
progress of all such activities and efforts.  In addition, VFMCRP shall promptly
disclose fully to Cara the discovery, development, invention or creation of any
Improvements and other VFMCRP Product Technology and shall transfer copies of
such Improvements and other VFCRP Product Technology.  VFMCRP agrees to make
reasonably available to Cara the VFMCRP project managers with responsibility for
managing or overseeing the Development of Licensed Product, no more than [***]
each Calendar Year, to discuss the reports and the Development efforts
hereunder.  After the date that the First Commercial Sale of a Product has
occurred in each Major Market country, VFMCRP shall provide to Cara, within
[***] after end of each Calendar Year, a reasonably detailed report that
provides reasonably detailed summaries of the activities undertaken in the prior
twelve (12) calendar months to Commercialize the Licensed Products in the
countries in the Licensed Territory where Regulatory Approval has been obtained)
and the results and progress of such activities and efforts.  In addition,
VFMCRP agrees to make reasonably available to Cara the VFMCRP project managers
with responsibility for managing or overseeing the Commercialization of Licensed
Product, no more than [***] each Calendar Year, to discuss the reports and the
Commercialization efforts hereunder.  

5.4Global Brand Plan; Promotional Materials.  Within [***] after the Effective
Date, Cara will submit to the JSC, for its review and discussion, a global brand
plan, including the key positioning and messaging strategy, for
commercialization of the Licensed Product in the Field (the “Global Brand
Plan”), and Cara shall update such plan annually.  VFMCRP will provide Cara with
copies of all its material promotional materials for the Licensed Product for
use in the United Kingdom, France, Italy, Spain, Switzerland, Germany, Canada,
Mexico, Australia, Brazil and China in the Field (and including English
translations of such materials (if the original is not in English)), and for use
in promoting Licensed Product to FMC Clinics in the United States as permitted
herein, for Cara’s prior review and approval.  VFMCRP will obtain Cara’s prior
written consent before using any particular promotional materials or information
for Licensed Product that have content or messaging that is inconsistent with
the approved Global Brand Plan or that is not already included in other VFMCRP
promotional materials that have been prior approved by Cara for use by
VFMCRP.  All promotional, advertising or other marketing materials used by
VFMCRP or its Affiliate or Sublicensee shall comply with all Applicable Law.  

5.5Trademark. VFMCRP will Commercialize Licensed Product under the Product
Trademarks using the global brand name for such Licensed Product selected by
Cara in the Global Brand Plan and under the trade dress set forth in the Global
Brand Plan, except to the extent that VFMCRP reasonably believes that the use or
registration of any particular Product Trademark in a particular country in the
Licensed Territory (i) would be commercially inappropriate due to such country’s
linguistic or cultural particularities or would violate the Applicable Laws of
such country, (ii) is rejected by local Regulatory Authorities or (iii) is in
conflict with any Third Party’s intellectual property rights in such
country.  If VFMCRP is unable to use any Product Trademark for the foregoing
reasons, then VFMCRP will use one of

 

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two alternative trademarks and trade dresses selected by Cara in the Global
Brand Plan, or if such alternative trademarks are unacceptable for the reasons
set forth in the preceding sentence, then VFMCRP will use another trademark and
trade dress to be agreed upon by VFMCRP and Cara acting reasonably (the “Local
Trademarks”).  Cara will own all such Local Trademarks, including all trademark
registrations and applications therefor and all goodwill associated
therewith.  Cara agrees to grant and hereby grants to VFMCRP an exclusive (even
as to Cara), royalty-free license in the Licensed Territory, with the right to
grant sublicenses as provided in Section 2.5 above, under the Local Trademarks
to promote and otherwise Commercialize Licensed Product in the Licensed
Territory.  Once the brand name for a Licensed Product has been selected for a
country pursuant to this Section 5.5, the Party that submits and files the
MAA(s) for such Licensed Product in such country will be responsible for
obtaining Regulatory Approval of such brand name for use in the
Commercialization of such Licensed Product in such country.

5.6Manufacture and Supply of Licensed Product to VFMCRP.  No later than 120 days
after the Effective Date of this Agreement, the Parties will discuss and use
good faith efforts to agree on the material terms to be included in the Supply
Agreement.  No later than 120 days before the filing of the NDA for Licensed
Product in a country in the Licensed Territory, the Parties will enter into a
supply agreement for the commercial supply to VFMCRP of the Licensed Products
that contains standard and customary terms for commercial supply arrangements
(the “Supply Agreement”), which Supply Agreement will include those material
terms on which the Parties have agreed pursuant to this Section.  The supply
price for the Licensed Products supplied by Cara to VFMCRP pursuant to the
Supply Agreement will be equal to Cara’s COGS (calculated according to U.S.
GAAP) plus [***] (but without allocation of idle costs)) (the “Supply Price”)
and the term of the Supply Agreement will be coterminous with the Term of the
Agreement.  The Parties acknowledge and agree that they shall discuss in good
faith the best solution for the supply chain, taking into account the interests
of both Parties (which may include the supply of bulk products and the right for
VFMCRP to package and label the Licensed Products for the Licensed Territory
(excluding for clarity the U.S.)).  The Supply Agreement shall provide that,
after the end of the Term (other than due to early termination of the
Agreement), Cara shall continue to supply VFMCRP with Product (on a
non-exclusive basis) under the terms of the Supply Agreement to ensure supply
continuity until VFMCRP has either set up its own manufacturing capacity or the
Parties have agreed on terms for continued supply by Cara after the Term.  For
clarity, VFMCRP shall not exercise the manufacturing license under Section 2.2,
unless the Parties fail to enter into the Supply Agreement, or as otherwise
provided in the Supply Agreement with respect to failure of Cara to supply on a
timely basis material amounts of Compound or Licensed Product ordered under the
Supply Agreement.  The Parties will also enter into a reasonable and customary
Quality Agreement.  Such Quality Agreement will establish each Party’s
manufacturing activities as well as responsibilities relating to recalls and
withdrawals of Licensed Products.  

 

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Article VI

PAYMENTS; ROYALTIES AND REPORTS

6.1Initial License Payment.  Upon execution of this Agreement, VFMCRP shall make
a non-refundable, non-creditable cash payment of fifty million U.S. dollars (USD
$50,000,000) to Cara.  

6.2Purchase of Cara Equity.  As part consideration for the rights granted
hereunder, an Affiliate of VFMCRP (Vifor (International) Ltd.) is purchasing
shares of Cara common stock pursuant to the Stock Purchase Agreement entered
into by the Cara and such Affiliate concurrently with this Agreement.  The
Parties agree that the rights granted by Cara to VFMCRP under this Agreement are
contingent upon closing of such equity purchase by Vifor (International) Ltd.)
under such Stock Purchase Agreement.    

6.3Milestone Payments.  Subject to Section 6.5, VFMCRP shall pay to Cara the
milestone payment amounts set forth in the tables below within [***] after the
achievement of the corresponding milestone event.  Each such payment shall be
made by wire transfer of immediately available funds into an account designated
by Cara.  Except as set forth in Section 6.5, each such payment is nonrefundable
and non-creditable against any other payments due hereunder. For the avoidance
of doubt, each such payment will only be payable one time upon the occurrence of
the indicated event in the Licensed Territory unless otherwise indicated, and
VFMCRP will not be obligated to pay any milestone payment more than once unless
otherwise indicated.

(a)Approval Milestones.  

Milestone Event

Milestone Payment

[***]

[***]

[***]

[***]

 

(b)Sales Milestones in the Licensed Territory.  

Milestone Event

Milestone Payment

(i)  Annual Net Sales exceed [***] in the Licensed Territory

[***]

(ii) Annual Net Sales exceed [***] in the Licensed Territory

[***]

 

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Milestone Event

Milestone Payment

(iii)  Annual Net Sales exceed [***] in the

Licensed Territory

[***]

(iv)  Annual Net Sales exceed [***] in the Licensed Territory

[***]

(v)  Annual Net Sales exceed [***] in the Licensed Territory

[***]

(vi)  Annual Net Sales exceed [***] in the Licensed Territory

[***]

(vii)  Annual Net Sales exceed [***] in the Licensed Territory

[***]

 

For the avoidance of doubt, any sales made by Cara to FMC US Dialysis Clinics
shall not be included in the calculation of Annual Net Sales.

6.4Royalties.  In part consideration of rights granted to VFMCRP and obligations
undertaken by Cara hereunder, VFMCRP shall pay to Cara royalties on Net Sales of
Licensed Products sold in the Licensed Territory as provided in this Section
6.4:

(a)Royalty Rate.  VFMCRP shall pay to Cara royalties on the Net Sales of all
Licensed Products sold  in the Licensed Territory at the applicable of following
incremental royalty rates, depending on the amount of such Net Sales in the
applicable Calendar Year:

Amount of Net Sales in Licensed Territory During Calendar Year

Royalty Rate Applicable to Net Sales Tier

Amount of Net Sales less than $[***] during the Calendar Year

[***]%

Amount of Net Sales greater than $[***] but less than $[***] during the Calendar
Year

[***]%

Amount of Net Sales greater than $[***] but less than $[***]  during the
Calendar Year

[***]%

Amount of Net Sales greater than $[***] but less than $[***] during the Calendar
Year

[***]%

Amount of Net Sales greater than $[***] during the Calendar Year

[***]%

 

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For example, if there is $[***] in aggregate annual Net Sales during the Royalty
Term in the Licensed Territory in a given calendar year, after conversion to
Dollars of the Net Sales in each country in the Licensed Territory, VFMCRP will
owe a royalty of [***].

(b)Royalty Terms.  VFMCRP’s royalty obligations to Cara under this Section 6.4
shall be in effect during the Royalty Terms.  Upon expiration of the Royalty
Term for a Licensed Product in a country, the license under Section 2.1 shall
thereafter  be fully paid-up, non-exclusive, perpetual, and irrevocable under
the relevant Cara Product Technology and its interests in the Joint Technology
solely for such Licensed Product in such country in the Field; and provided
that, for clarity, sales of such Licensed Product in other countries where the
applicable Royalty Term(s) has not expired shall continue to be royalty-bearing,
notwithstanding the foregoing limited license.  For the sake of clarity, no
multiple royalties shall be payable because more than one Valid Claim or more
than one Patent Right in the Cara Product Technology is applicable to the
Licensed Product (or its use) during the applicable Royalty Term.

(c)Third Party Royalties.  If VFMCRP, or its Affiliate or Sublicensee, is
required to pay third party royalty payments (directly to a Third Party) based
directly on the sale of Licensed Product in a country in the Licensed Territory
in consideration for a license from such Third Party under relevant patents
owned or controlled by such Third Party that claim the composition of matter of
the License Product, or method of use of the Licensed Product in the Field, or
the Compound as a “product by process” using the manufacturing method that is
used (as of the applicable time) by Cara to manufacture Compound, and that in
the absence of a license thereunder would be infringed by the sale, offer for
sale, use, or import of the Licensed Product in the Field in the applicable
country in the Licensed Territory, then VFMCRP shall be entitled to credit [***]
of such portion of such third party royalty payments against any Royalty
payments due under this Section 6.4 with respect to the Net Sales of the
applicable Licensed Product in such country to which such royalty payment to
such Third Party pertains; provided, however, in no event shall the Royalty
payment to Cara under this Section 6.4 for sales of such applicable Licensed
Product be reduced by more than [***] of the royalty amount otherwise owed under
Section 6.3(a) for such Licensed Product sales.  For the purposes of determining
if a royalty is required, reference shall be to the Licensed Product as supplied
by Cara, and not to the Licensed Product as it may finally be labeled or
packaged.  

(d)Generic Sales.  If, in any country or region (e.g., EU) in the Licensed
Territory, (a) one or more Generic Products being sold in such country or region
achieves during [***] Calendar Quarters a market share (calculated on a units
basis) for use in the Field in the aggregate equal to or higher than [***] of
the total unit sales of Licensed Products sold in such country or region, then
the Royalty payments with respect to the relevant Licensed Product in such
country or region shall thereafter be reduced by [***].  

(e)Joint Patent/Joint Improvement Valid Claim Reduction.  On a country by
country basis, in the event that the last to expire Valid Claim in a particular
country in the Licensed Territory that would, but for the licenses granted
hereunder, be infringed by the making, using, selling or importing of a Licensed
Product in such country is a claim of a Joint Patent or a Patent claim Covering
an Improvement made jointly by at least one employee of Cara

 

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or its Affiliate or person contractually required to assign or license such
Invention to Cara, and at least one employee of Licensee or its Affiliate or
person contractually required to assign or such Invention to Licensee, then in
each subsequent calendar quarter royalty payments on Net Sales attributable to
such Licensed Product in such country (based on the royalty rate applicable
under Section6.4(a) before taking into any reduction) will be reduced by [***].

(f)Blended Rates.  The Parties acknowledge and agree that the Licensed Patent
Rights and the Licensed Know-How licensed under this Agreement may justify
royalty rates and/or Royalty Terms of differing amounts for sales of Products,
which rates could be applied separately to Licensed Products involving the
exercise of Licensed Patent Rights and/or the incorporation of Licensed
Know-How, and that if such royalties were calculated separately, royalties
relating to the Licensed Patent Rights and royalties relating to the Licensed
Know-How would last for different terms. The Parties have determined in light of
such considerations and for reasons of mutual convenience that blended royalty
rates for the Licensed Patent Rights and the Licensed Know-How licensed
hereunder will apply during a single Royalty Term (which blended royalty rates
would be advantageous for both Parties) for sales of Licensed Products in a
country. Consequently, the Parties have agreed to adopt the royalty rates set
forth in this Section 6.4 with respect to the sales of Licensed Products as
blended royalty rates.

6.5[***]

6.6Cara Payment of Share of Certain Profits in U.S.  Except as provided in the
following sentence, for Cara’s sales of Licensed Products to FMC Dialysis
Clinics during a Calendar Year that are fulfilling orders taken by VFMCRP and
submitted to Cara for fulfillment (such sales, the “FMC Clinic Sales”), Cara
will pay to VFMCRP (on an annual basis) [***] of the annual Net Profit (as
defined below) resulting from such FMC Clinic Sales during such Calendar Year
using the below calculation for Net Profit.  If, for a particular Calendar Year,
the Annual FMC HD Patients (as defined below) number is more than [***] for such
Calendar Year, then the payment by Cara to VFMCRP of a share of Net Profits
resulting from FMC Clinic Sales shall be as follows:   Cara shall pay to VFMCRP,
for such Calendar Year a share of the Net Profit for such Calendar Year, in an
amount equal to (a) [***].  

As used in this Section, the following defined terms have the following
meanings:

“Net Profit” means, for a particular Calendar Year and the FMC Clinic Sales
during such Calendar Year, the Net Sales of Cara resulting from such FMC Clinic
Sales in such Calendar Year, minus Cara’s COGS (as such term is defined in the
Supply Agreement, calculated according to U.S. GAAP) for the Licensed Product
sold in such FMC Clinic Sales.  

“Total HD Patients” means, as of the particular time, the total number of kidney
disease patients in the United States receiving hemodialysis treatments.  

“Annual Total HD Patients” means, for a particular Calendar Year, the simple
arithmetic average of the Total HD Patients number existing at the beginning of
each month during such year.  

 

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“FMC HD Patients” means, as of a particular time, the number kidney disease
patients in the United States receiving hemodialysis treatments at FMC US
Dialysis Clinics.   \

“Annual FMC HD Patients” means, for a particular Calendar Year, the simple
arithmetic average of the FMC HD Patients number existing at the beginning of
each month during such year.  

“Baseline” means [***], which is the number of FMC HD Patients as of the
Effective Date.

[***].  

“50% Profit Share Ratio” means, for a particular Calendar Year where the Annual
FMC HD Patients number is more than [***] for such Calendar Year, the fraction
equal to:  (a) [***] for such Calendar Year, divided by (b) such Annual FMC HD
Patients number.

For example, if for a particular Calendar Year, the following numbers are
assumed:  [***].  Based on the foregoing assumptions, in such example, the
amount payable by Cara to VFMCRP as its share of such Net Profit for such
Calendar Year under this Section 6.6, would be calculated as follows:

[***]  

VFMCRP covenants that it shall obtain from the applicable member of the FMC
Group, on a quarterly basis, the actual total number for FMC HD Patients as of
the beginning of each Calendar Quarter during the Term and shall provide such
information to Cara for use under this Section 6.6.  VFMCRP warrants that all
such numbers shall be accurate, and that if it determines that any such number
provided to Cara underreported the actual number of FMC HD Patients for the
applicable period, then it shall immediately provide such actual number, and
Cara then will be able to recalculate the applicable split of Net Profit and
will be entitled to reimbursement by VFMCRP for any overpayment by Cara to
VFMCRP of a share in Net Profit, due to such inaccuracy in the number as
reported by VFMCRP.  Cara shall use the numbers reported in the United States
Renal Data System Annual Data Report (“USRDS Report”) as published on the
website at  https://www.usrds.org/reference.aspx  for determining the Total HD
Patients and the Annual Total HD Patients for each particular time point or
period, under the above.  In the event the Total HD Patients and Annual Total HD
Patients must be derived from multiple data sources in the report, Cara shall
use the average of the Total HD Patients and Annual Total HD Patients from such
data sources.  If the USRDS Report is no longer made, or if changes are made to
the USRDS Report so that such data is no longer available, then such number
shall be determined by the equivalent listing of Total HD Patients in the U.S.
as determined by the appropriate U.S. government agency, as reasonably agreed by
the Parties at such time.  

6.7Reports; Payments.  Within [***] after the end of each Calendar Quarter
during which there are sales of Licensed Product in the Licensed Territory
giving rise to a payment obligation under Section 6.4, (a) VFMCRP shall submit
to Cara a report listing the total Net Sales for Licensed Product for each
country in the Licensed Territory for such Calendar Quarter,

 

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the calculation of royalties owed (including listing the deductions taken from
gross sales to arrive at Net Sales), and the royalties payable to Cara under
Section 6.3, including the basis for any adjustments taken under Sections 6.3(c)
or (d), and (b) VFMCRP  shall pay to Cara the royalties owed under Section 6.3
on the date such report is due.  Within [***] after the end of each Calendar
Year during which there are sales by Cara of Licensed Product in the U.S. that
are FMC Clinic Sales (as defined in Section 6.5 above) giving rise to a payment
obligation under Section 6.5, (a) Cara shall submit to VFMCRP a report listing
the total Net Sales for such FMC Clinic Sales for such Calendar Year, the
calculation of COGS for the Licensed Product sold, and the share of the
resulting Net Profit that is payable to VFMCRP under Section 6.5, and (b) Cara
shall pay to VFMCRP the share of such Net Profit owed under Section 6.5 on the
date such report is due.  

6.8Books and Records; Audit Rights.  

(a)VFMCRP shall keep and shall cause its applicable Affiliates and Sublicensees
to keep complete, true and accurate books and records in accordance with
Accounting Standards in sufficient detail to determine the royalties due to Cara
under Section 6.4.  Cara shall keep complete, true and accurate books and
records in accordance with Accounting Standards in sufficient detail to
determine the amounts due to VFMCRP under Section 6.6.  

(b)Cara shall have the right, once annually at its own expense, to have an
independent, certified public accounting firm of nationally recognized standing,
selected by Cara and reasonably acceptable to VFMCRP, review (i) the applicable
records of VFMCRP and such Affiliates and Sublicensees, in the location(s) where
such records are maintained by the audited party, upon reasonable notice (which
shall be no less than [***] prior notice) and during regular business hours and
under obligations of confidence, for the sole purpose of verifying the accuracy
of, and determine any discrepancies in, the royalty amounts paid and payable
under this Agreement, and (ii) to the extent that such numbers are not in the
public domain (e.g., through public reporting obligations of the FMC Group), the
applicable records of the applicable member(s) of the FMC Group relating to the
numbers of FMC HD Patients existing during the applicable times, in each case
within a [***] Calendar Year period preceding the date of the request for
review.  VFMCRP also shall ensure that FMC shall provide Cara the right to
perform the review set forth in subclause (ii) above.  The report of such
accounting firm shall be limited to:  (x) for a review under subclause (i)
above, a certificate stating whether any report made or invoice or payment
submitted by VFMCRP during such period is accurate or inaccurate, the actual
amounts of royalty payments owed under Section 6.3, and the amount of any Net
Sales, royalty or other payment discrepancy, and a reasonable summary of the
factual basis for any such discrepancy, and (y) for a review under subclause
(ii) above, a certificate stating whether the reports of VFMCRP submitted under
Section 6.6 reporting the number of FMC HD Patients as of the applicable time(s)
during the inspected period were accurate or inaccurate, and if inaccurate, the
amount of the discrepancies and a reasonable summary of the factual basis for
such discrepancies.  VFMCRP shall receive a copy of each such report
concurrently with receipt by Cara.  Should such inspection lead to the discovery
of a discrepancy to Cara’s detriment, VFMCRP shall pay the amount of the
discrepancy (including, if applicable, a discrepancy in the reported FMC HD
Patients which results in overpayment to VFMCRP of Net Profits under

 

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Section 6.6) within [***] after its receipt from the accounting firm of the
certificate showing the amount of the discrepancy.  Cara shall pay the full cost
of the review unless the audit determined an underpayment of royalties and/or an
overpayment of VFMCRP’s share of Net Profits under Section 6.6 that is greater
than [***] of the amount actually due for the period audited, in which case
VFMCRP shall pay the costs charged by such accounting firm for such review.  Any
overpayment of royalties by VFMCRP revealed by an inspection shall be creditable
against future royalty payments under Section 6.3.  

(c)VFMCRP shall have the right, once annually at its own expense, to have an
independent, certified public accounting firm of nationally recognized standing,
selected by VFMCRP and reasonably acceptable to Cara, review the applicable
records of Cara, in the location(s) where such records are maintained by Cara,
upon reasonable notice (which shall be no less than [***] prior notice) and
during regular business hours and under obligations of confidence, for the sole
purpose of verifying the accuracy of, and determine any discrepancies in, the
amounts paid and payable under Section 6.6 within a three (3) Calendar Year
period preceding the date of the request for review.  The report of such
accounting firm shall be limited to a certificate stating whether any report
made or invoice or payment submitted by Cara during such period is accurate or
inaccurate, the actual amounts of payments owed by Cara under Section 6.5, and
the amount of any Net Profits for the applicable Calendar Year(s), share of Net
discrepancy, and a reasonable summary of the factual basis for any such
discrepancy.  Cara shall receive a copy of each such report concurrently with
receipt by VFMCRP.  Should such inspection lead to the discovery of a
discrepancy in Cara payment of shares of Net Profits to VFMCRP’s detriment, Cara
shall pay the amount of the discrepancy within [***] after its receipt from the
accounting firm of the certificate showing the amount of the
discrepancy.  VFMCRP shall pay the full cost of the review unless the audit
determined an underpayment of owed the share of Net Profit that is greater than
[***] of the amount actually due for the period audited, in which case Cara
shall pay the costs charged by such accounting firm for such review.  Any
overpayment by Cara of a shares of Net Profit revealed by an inspection shall be
refunded by VFMCRP within [***] of the report.  

6.9Taxes.  All payments under or in connection with this Agreement shall be
inclusive of any taxes, and each Party shall be responsible for its own taxes
assessed by a tax or other authority except as otherwise set forth in this
Agreement. “Taxes” mean all present and future taxes, import deposits
assessments, and other governmental charges and any related penalties and
interest not attributable to the fault or delay of a Party.

(a)Withholding Taxes:  If Applicable Law require withholding of any Taxes by
VFMCRP and imposed upon Cara on account of any royalties payable to Cara under
Section 6.4, and paid by VFMCRP under this Agreement, such Taxes shall be
deducted by VFMCRP as required by law from such remittable royalty payment and
shall be paid by VFMCRP to the proper Tax authorities.  Official receipts of
payment of any withholding Tax shall be secured and sent, upon request, to Cara
as evidence of such payment. The Parties shall exercise their good faith
reasonable efforts to ensure that any withholding Taxes imposed are reduced as
far as possible under the provisions of any relevant tax treaty, including
filing any needed certificates or documents with applicable tax authorities and
seeking to obtain the benefits of any such treaty.  Withholding Taxes have to be
paid in applicable local currency.  Any possible refund of

 

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withholding tax previously withheld will also be paid in local currency to the
Party on which such withholding was imposed.  Any currency conversion will be
based on the exchange rate applicable on the day of the withholding Tax
payment.  Resulting currency exchange losses shall be borne by Cara and not be
refunded by VFMCRP.

(b)VAT or similar Taxes: All payments due to the terms of this Agreement are
expressed to be exclusive of value added tax (“VAT”) or similar indirect Taxes
(e.g., goods and service tax), which shall be and remain the obligations of the
paying party.  

6.10Payment Method and Currency Conversion.  Except as otherwise provided
herein, all payments due to a Party hereunder shall be due and payable on the
date specified to be owed, and shall be paid via a bank wire transfer to such
bank account as such Party shall designate.  For the purposes of determining the
amount of royalties due for the relevant Calendar Quarter under Section 6.3, the
amount of Net Sales in any foreign currency shall be converted into U.S. dollars
in accordance with the normal business practice of VFMCRP consistently
applied.  In accordance with VFMCRP’s normal business practice, when Licensed
Products are sold for monies other than U.S. dollars, earned royalties in such
countries will be determined by (a) converting the Net Sales in each country in
the Licensed Territory into U.S. dollars, using the monthly exchange rates as
customarily used by VFMCRP in its regular accounting system and (b) calculating
the respective royalty payments per country based on the respective into U.S.
dollars values.

6.11Blocked Payments.  If, by reason of Applicable Law in any country in the
Licensed Territory, it becomes impossible or illegal for VFMCRP or any of its
Affiliates or Sublicensees to transfer, or have transferred on its behalf,
royalties or other payments to Cara, VFMCRP shall promptly notify Cara of the
conditions preventing such transfer and such royalties or other payments shall
be deposited in local currency in the relevant country to the credit of Cara in
a recognized banking institution with a good creditworthiness, such banking
institution to be designated by Cara or, if none is designated by Cara within
[***], in a recognized banking institution selected by VFMCRP, and identified in
a written notice given to Cara.  If so deposited in a foreign country, VFMCRP
shall provide reasonable cooperation to Cara so as to allow Cara to assume
control over such deposit as promptly as practicable.

6.12Late Payments.  Any payment not made within [***] after the due date for
such payment pursuant to the terms of this Agreement shall bear interest at a
rate of the thirty-day U.S. dollar LIBOR rate effective for the date that
payment was due (as published in The Wall Street Journal, Eastern Edition) plus
[***] per annum.  Calculation of interest will be made for the exact number of
days the payment was past due based on a year of 360 days (actual days/360).

 

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Article VII

PATENT MATTERS

7.1Ownership.

(a)As between the Parties, each Party shall exclusively own all Know-How
(including Inventions), Patent Rights, and other intellectual property rights
conceived, created, made, discovered, generated or invented solely by employees,
agents and consultants of such Party or its Affiliates either prior to the
Effective Date, or thereafter either pursuant activities conducted independent
of, or under and in connection with this Agreement, but in each case subject to
the licenses granted to the other Party under Article 2, as applicable.  

(b)The Parties will jointly own (i.e., each Party shall own an undivided
one-half interest in and to) the entire rights, title and interests in and to
all Joint Technology (except as may otherwise be agreed by the Parties under
Section 7.2).  The Parties will promptly disclose to each other any Joint
Technology conceived or reduced to practice no later than [***] after the
Intellectual Property or Legal Department of the Party receives a written
disclosure of such conception or reduction to practice.  Except to the extent
either Party is restricted by the licenses granted to the other Party under this
Agreement, each Party shall be entitled to practice, license, assign, and
otherwise exploit its interests in the Joint Technology without a duty of
accounting to or seeking consent from the other Party.

(c)The Parties intend that this Agreement is a joint research agreement under
the provisions of pre-AIA 35 U.S.C. 103(c) and AIA 35 U.S.C. 102(c).  The
Parties further agree to cooperate and to take reasonable actions to maximize
the protections available under the safe harbor provisions of 35 U.S.C. 100 et
seq. for U.S. Patent Rights. 

7.2Prosecution and Maintenance of Joint Patents.  With respect to any Inventions
in the Joint Know-How, Cara and VFMCRP shall discuss reasonably and endeavor to
agree on the Prosecution of any Joint Patents claiming potentially patentable
Inventions within the Joint Know-How.  All such Joint Patents shall be
jointly-owned by the Parties (i.e., each Party shall own an undivided one-half
interest in and to the entire rights, title and interests in and to the Joint
Patents), absent a written agreement of the Parties otherwise, in appropriate
countries throughout the world.  Absent agreement of the Parties otherwise,
VFMCRP shall be responsible for the Prosecution of any such Joint Patents in
countries and jurisdictions in the Licensed Territory, at its sole expense, and
Cara shall be responsible for the Prosecution of any such Joint Patents in
countries and jurisdictions outside the Licensed Territory, at its sole expense,
provided that Cara and VFMCRP shall discuss reasonably and endeavor to agree on
all filings and responses in the Licensed Territory.  Each Party shall keep the
other fully informed regarding the filing, prosecution, defense and maintenance
of the Joint Patents being prosecuted by such Party (including in any case, a
detailed update at least once per Calendar Quarter). If reasonably requested by
either Party, the other Party shall provide reasonable assistance and support to
such Party in the above Prosecution and Maintenance, provided that any
reasonable out-of-pocket costs of such assistance (including appearances at any
compelled hearings or preparation or attendance at discovery responses) shall be
paid for by the Party providing assistance.  

 

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7.3Prosecution and Maintenance of Licensed Patent Rights.  Cara shall have the
sole right (except as otherwise provided below and be responsible for the
Prosecution of the Licensed Patent Rights  throughout the Licensed Territory, at
its own expense (except as provided below) and at its reasonable
discretion.  VFMCRP shall reimburse Cara for [***] of annual maintenance fee
costs for Licensed Patents in the Licensed Territory, based on invoices
submitted.  Cara shall keep VFMCRP fully informed regarding the filing,
prosecution, defense and maintenance of such Licensed Patent Rights (including
in any case, a detailed update at least once per Calendar Year).  If reasonably
requested by Cara, VFMCRP shall provide reasonable assistance and support to
Cara in the above Prosecution and Maintenance, provided that any reasonable
out-of-pocket costs of such assistance (including appearances at any compelled
hearings or preparation or attendance at discovery responses) shall be paid for
by Cara.

7.4VFMCRP’s rights.  If Cara decides that it shall no longer continue the
Prosecution of a particular Licensed Patent Right in the Licensed Territory
during the Term, then it will promptly advise VFMCRP of this decision at least
[***] in advance of any Prosecution filing or response deadline that would
result in the loss of such Licensed Patent Right.  Thereafter VFMCRP may, upon
written notice to Cara, assume the Prosecution of such Licensed Patent Right in
the Licensed Territory at its sole expense and discretion.  Upon such written
notice, Cara will grant to VFMCRP the right to conduct the Prosecution, on
Cara’s behalf, of such Licensed Patent Right, and shall transfer copies of all
documents relating directly to Cara’s prior Prosecution of same, at VFMCRP’s
cost. Following such grant, such Licensed Patent Right will remained licensed to
VFMCRP under the license grants hereunder, but will no longer be considered a
Licensed Patent Right for the purpose of determining applicable Royalty
Terms.  Cara will reasonably cooperate, upon VFMCRP’s reasonable request and at
its expense, in connection with the prosecution of all patent applications
included within such Licensed Patent Right, including providing (at VFMCRP’s
expense) reasonable and related technical expertise, technical data, prosecution
history and other relevant expertise, to the extent required for VFMCRP to
conduct such Prosecution.  

7.5European Unified Patent System. With regard to any Licensed Patents Rights or
jointly-owned Patent Rights that fall under the new European Unified Patent
System, the Party prosecuting such Licensed Patent Right or jointly-owned Patent
Right will elect the opt-out option unless the Parties mutually agree otherwise.

7.6Patent Term Extensions. The Party prosecuting a Licensed Patent Right or
Joint Patent will be solely responsible for making all decisions regarding
patent term extensions, including supplementary protection certificates and any
other extensions, that are now available or become available in the future, that
are applicable to such Licensed Patent Right or jointly-owned Patent Right and
that become available directly as a result of the Regulatory Approval of a
Licensed Product by VFMCRP or any of its Affiliates or sublicensees; provided
that the prosecuting Party will consult the other Party with respect to such
decisions and will consider the comments and concerns of the other Party in good
faith, and further provided that, Cara will consult with VFMCRP with respect to
such decisions (including selection of the patent(s) for patent term extension,
supplementary protection certificates or any other extensions) as a result of
the first Regulatory Approval in territory of any product containing the
Compound, even if outside the Field and even if not by VFMCRP or any of its
Affiliates or sublicensees and that the

 

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patent(s) selected for patent term extension, supplementary protection
certificates or any other extensions in a territory within the Licensed
Territory shall Cover the Licensed Product.

7.7Third Party Infringement.  

(a)Notice.  Each Party shall promptly report in writing to the other Party any
known or reasonably suspected (i) infringement of any Licensed Patent Right or
Joint Patent, or (ii) unauthorized use or misappropriation of any of the
Licensed Know-How or Joint Know-How, of which such Party becomes aware and shall
provide the other Party with all material evidence in its possession regarding
such known or suspected infringement or unauthorized or  use misappopriation (to
the extent able to be disclosed).  

(b)Initial Right to Enforce.  Cara shall have the first right, but not the
obligation, to initiate a lawsuit or take other reasonable action to enforce the
applicable Licensed Patent Rights or Joint Patent with respect to an
infringement by a Third Party by making, using, importing or selling in the
Licensed Territory a product that contains a Compound or otherwise competes or
likely would compete with Licensed Product or a misappropriation or other
violation of the Licensed Know-How (in each case, a “Field Infringement”).  Cara
shall consult with VFMCRP and give good faith consideration to any reasonable
objection from VFMCRP regarding Cara’s proposed course of action prior to
initiating any such lawsuit or other enforcement action asserting any such
Licensed Patent Rights or Joint Patent against a Field Infringement in the
Licensed Territory.  VFMCRP shall reasonably cooperate in the prosecution of any
such suit or other action against a Field Infringement as may be reasonably
requested by Cara, including joining any action as party-plaintiff at Cara’s
request if needed for Cara to have standing to bring such suit; provided, that
Cara shall promptly reimburse all out-of-pocket expenses (including reasonable
counsel fees and expenses) incurred at Cara’s request and actually incurred by
VFMCRP in connection with such cooperation.  Cara shall keep VFMCRP reasonably
informed regarding the prosecution and results of any such enforcement suit or
action (including in any case, a detailed update at least once per Calendar
Quarter).  

(c)Step-In Right.  If Cara does not initiate a lawsuit or take other reasonable
action intended to cause a Field Infringement of Licensed Patent Rights or
jointly-owned Patent Rights against a Field Infringement in the Licensed
Territory to cease and obtain remedies for the harm resulting therefrom,
pursuant to Section 7.4(b), within one hundred [***] of actual notice provided
under Section 7.4(a) with respect to any such Field Infringement, then VFMCRP
shall have the right, but not the obligation, to initiate such lawsuit or take
such other action, after providing [***] notice to Cara and giving good faith
consideration to the Cara’s reason(s) for not initiating a lawsuit or taking
other action.  For this purpose, Cara shall cooperate in the prosecution of such
suit as may be reasonably requested by VFMCRP, including joining any action as
party-plaintiff at VFMCRP’s request if required for VFMCRP to have standing to
bring such suit; provided, that VFMCRP shall promptly reimburse all
out-of-pocket expenses (including reasonable counsel fees and expenses) of Cara
incurred in connection with such cooperation.

 

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(d)Conduct of Certain Actions; Costs.  The Party initiating legal action against
a Field Infringement shall have the sole and exclusive right to select counsel
for any suit initiated by it pursuant to Section 7.4(b) or 7.4(c) (the
“Initiating Party”).  The Initiating Party shall bear its own internal and
out-of-pocket costs incurred in any such legal action, including the fees and
expenses of the counsel selected by it.  The other Party shall have the right to
participate and be represented in any such legal action (in cases where such
other Party has standing) by its own counsel at its own expense, provided that
the Initiating Party shall in any event have the final say about the strategy
and decisions in the suit and any settlement.

(e)Recoveries.  Any amount recovered in any action or settlement of any such
action against a Field Infringement in the Licensed Territory shall be allocated
first to reimburse on a pro-rata basis each Party’s actual out-of-pocket costs
(including reasonable attorneys’ fees and expenses) incurred in such action and
any amount remaining shall be allocated as follows:  (i) if Cara is the
Initiating Party, then Cara shall provide to VFMCRP [***] of the net amount
remaining, and (ii) if VFMCRP is the Initiating Party, with respect to any
remaining portion of such recovery, such net amounts remaining shall be
considered as Net Sales and shall be subject to payment of the applicable
royalty thereon in accordance to Section 6.4.  For clarity, Cara shall retain
any amounts it recovers from enforcing all Cara Patent Rights, the Joint Patents
or its rights in any Cara Know-How outside the Licensed Territory.  For clarity,
Cara retains the sole and exclusive rights to enforce Cara Patent Rights, the
Joint Patents or its rights in any Cara Know-How outside the Licensed Territory.

(f) Responsibility for Third Party Licenses. At any time during the Term, if
Cara believes it is necessary or advisable to seek to acquire or obtain a
license from any Third Party in order to avoid infringement of Patents owned or
controlled by such Third Party during the exercise of the rights herein granted,
whether or not there has been the institution of any infringement claim, Cara
will have the sole right, but not the obligation, to negotiate and acquire or
obtain a license under such Patents from such Third Party. Cara will be
responsible for the amounts payable to such Third Party assignor, licensor or
grantor of rights pursuant to such agreement to the extent such payments arise
out of or relate to the research, Development, use, import, offer for sale or
sale of the Licensed Products (including Combination Products and Bundled
Products) in the Licensed Territory by VFMCRP or its Affiliates or
Sublicensee.  This section will not be interpreted as placing on either Party a
duty of inquiry regarding Third Party intellectual property rights.  Each Party
will keep the other Party informed of the status of any Third Party claim of
infringement.  

7.8Enforcement of Product Trademark.  Cara shall have the sole initial rights to
initiate lawsuits and/or take any other action to enforce the Product Trademark
or Local Trademark, against any infringement, dilution or other violation (a
“Mark Infringement”) anywhere in the world.  VFMCRP shall reasonably cooperate
in the prosecution of any such suit or other action brought by Cara against such
Mark Infringement as may be reasonably requested by Cara, including joining any
action as party-plaintiff at Cara’s request if needed for Cara to have standing
to bring such suit; provided, that Cara shall promptly reimburse all
out-of-pocket expenses (including reasonable counsel fees and expenses) incurred
at Cara’s request and actually incurred by VFMCRP in connection with such
cooperation.  Cara shall keep VFMCRP reasonably informed regarding the
prosecution and results of any such enforcement suit.  If Cara

 

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does not initiate a lawsuit or take other reasonable action intended to cause a
Mark Infringement in the Licensed Territory to cease and obtain remedies for the
harm resulting therefrom, pursuant to this Section 7.5, within one hundred [***]
of actual notice with respect to any such Mark Infringement, then VFMCRP shall
have the right, but not the obligation, to initiate such lawsuit or take such
other action, after providing [***] notice to Cara and giving good faith
consideration to the Cara’s reason(s) for not initiating a lawsuit or taking
other action, and shall keep Cara reasonably informed of the progress and
results of such action.  The Party that conducts an action against a Mark
Infringement shall retain any recoveries (including by settlement) of such
action.

7.9Patent Invalidity Claim.  

(a)Each Party shall promptly notify the other in the event of any legal or
administrative action by any Third Party against a Licensed Patent Right or
Joint Patent of which it becomes aware challenging the validity or
enforceability thereof, including any opposition, post-grant review,
inter-partes review, nullity, revocation, reexamination, third party
observations, or compulsory license proceeding.

(b)Cara shall have the first right, but not the obligation, at its expense, to
defend against any such action relating to a Licensed Patent Right or Joint
Patent in the Licensed Territory.  In such case, Cara shall keep VFMCRP
reasonably informed of the progress and results of such action and defense,
including providing copies of all substantive filings and orders in any such
action.  If Cara does not initiate a defense against any such action involving a
Licensed Patent Right or Joint Patent within [***] following such notice, then
VFMCRP shall have the right, but not the obligation, to defend such action at
its expense, provided that VFMCRP shall keep Cara regularly informed of all
actions taken and results of such defense.

7.10  Patent Marking.  VFMCRP shall ensure that all Licensed Products sold in
the Licensed Territory are appropriately marked to indicate all relevant Patent
Rights claiming the Licensed Product or its use, in accordance with Applicable
Law.  

Article VIII

CONFIDENTIALITY AND PUBLICATION

8.1Nondisclosure and Limited Use Obligations.  Each of the Parties agree that
during the Term, and for a period of [***] thereafter, each Party and its
Affiliates (and, with respect to VFMCRP, its Sublicensees) shall (a) maintain in
confidence the Confidential Information of the other Party, using efforts to
protect such information that are at least as strong as those that such Party
uses to maintains its own confidential information (but in no event less than
reasonable efforts), (b) not disclose such Confidential Information to any Third
Party without the prior written consent of the other Party, or as otherwise
expressly permitted in this Agreement, and (c) not use such Confidential
Information for any purpose except those permitted by this Agreement.

 

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8.2Authorized Disclosure.  Notwithstanding anything to the contrary in this
Article 8, a Party may disclose particular Confidential Information of the other
Party to the extent such disclosure is reasonably necessary in the following
instances:

(a)Prosecuting, enforcing or defending applicable Patent Rights that are the
subject of this Agreement in accordance with Article 7 of this Agreement;

(b)making filings covering Licensed Products with Regulatory Authorities in
accordance with this Agreement;

(c)complying with Applicable Law (including securities laws and the requirements
of the securities exchange on which Cara’s stock is traded) or submitting
information to tax or other Governmental Authorities; provided that if a Party
is required by Law to make any public disclosure of Confidential Information of
the other Party, to the extent it may legally do so, it will give reasonable
advance notice to the other Party of such disclosure and will use its reasonable
efforts to secure confidential treatment of such Confidential Information prior
to its disclosure (whether through protective orders or otherwise);

(d)to its Affiliates, and to employees, accountants, and lawyers, on a need to
know basis, each of whom prior to disclosure must be subject to appropriate
obligations of confidentiality and non-use equivalent in scope to those set
forth in this ARTICLE VIII and that are of reasonable duration in view of the
circumstances of the disclosure; or

(e)to the extent mutually agreed to in writing by the Parties.

8.3Press Releases and Other Permitted Disclosures.

(a)Cara and VFMCRP each agree not to disclose any of the terms and conditions of
this Agreement to any Third Party, except as described below in this Section
8.3.  The Parties will cooperate in the release of a mutually agreed upon press
release, within thirty (30) days following execution of the Agreement,
announcing the collaboration contemplated by this Agreement as soon as
practicable after the Effective Date.  Subject to the other provisions of this
Agreement, no other press release, public statement or public disclosure
concerning the existence or terms of this Agreement shall be made, either
directly or indirectly, by either Party, without first obtaining the written
approval of the other Party, such approval not to be unreasonably withheld;
provided, however, the foregoing limitation does not apply to the extent a press
release, public statement or public disclosure contains information that was
previously disclosed publicly.  

(b)Either Party may disclose the existence and terms of this Agreement in
confidence to its attorneys, professional accountants, auditors or other
professional advisors, under an agreement with terms of confidentiality and
non-use no less rigorous than the terms contained in this Agreement (or pursuant
to ethical requirements of the professional that require the recipient to
preserve the confidentiality of the disclosed information).  

(c)Notwithstanding the foregoing provisions of this ARTICLE VIII, a Party may
disclose the existence and terms of this Agreement (however, with it seeking to
exclude, as

 

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far as legally possible, any and all technical or financial information and
terms contained within the Agreement, including applicable information in
Exhibits hereto, to the extent such information and terms may be redacted under
a Confidential Treatment Request or similar application under Applicable Law),
or the Parties’ activities under this Agreement, where such disclosure is
required, as determined by the legal counsel of the disclosing Party, by
Applicable Law, by applicable stock exchange regulation or by order or other
ruling of a competent court, although, to the extent practicable, the other
Party shall be given [***] advance notice of any such legally required
disclosure to provide comments to the disclosing Party, and the disclosing Party
shall use its good faith diligent efforts to reasonably consider such comments
provided by such other Party on the proposed disclosure and seek to further
redact the information and terms contained within the Agreement in a consistent
manner, to the extent such redactions are permitted under Applicable Law.  In
case either Party is obliged to publish the Agreement as a “material agreement”
in accordance with the U.S. stock exchange regulations (“SEC Filing”), the
Agreement shall be redacted by the filing Party as far as legally possible, as
determined reasonably by the filing Party’s legal counsel, and the filing Party
shall cooperate with the other Party reasonably in advance to such SEC Filing to
enable the other Party to review and comment on the scope of such redaction, all
in accordance with the requirements found in the immediately preceding sentence.

8.4Data Security.  During the Term of this Agreement, each Party will maintain
(and, as applicable, cause its Affiliates to maintain) reasonable environmental,
safety and facility procedures, data security procedures and other safeguards
against the disclosure, destruction, loss, or alteration of the other Party’s
Confidential Information in the possession of such Party or its Affiliates,
which efforts shall in any event be no less rigorous than those maintained by
such Party for its own Confidential Information of a similar nature.

Article IX

REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

9.1Representations and Warranties of the Parties.  VFMCRP and Cara each
represent, warrant and covenant to each other Party that as of the Effective
Date:

(a)it has the authority and right to enter into and perform this Agreement and
grant the rights embodied herein, and it is not aware of any legal impediment
that could inhibit its ability to perform its obligations under this Agreement;

(b)its execution, delivery and performance of this Agreement does not constitute
a breach of any order, judgment, agreement or instrument to which it is a party
or is otherwise bound;

(c)such Party is a corporation duly organized, validly existing and in good
standing under the laws of the state or other jurisdiction of incorporation or
formation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof except where failure to be in
good standing would not materially impact the Party’s ability to meet its
obligations hereunder;

 

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(d)as of the Effective Date, no consent of any Third Party is required for such
Party to grant the licenses and rights granted to the other Party under this
Agreement or to perform its obligations hereunder;

(e)all of such Party’s personnel and employees and Third Parties, including
agents and consultants, hired by such Party and involved in the Development,
manufacture or Commercialization of Compounds or Licensed Products hereunder
are, or when hired will be, under a written agreement whereby they have
presently assigned to such Party any right they may have in any Invention first
invented, discovered, made, conceived or reduced to practice in the conduct of
activities pursuant to the Global Development Program or in the Development,
manufacture or Commercialization of any of such Compounds or Licensed Products,
and all intellectual property rights therein;

(f)it will not, after the Effective Date, enter into any written or oral
contractual obligation with any Third Party that would conflict with the
obligations that arise on its part out of this Agreement; and  

(g)no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of such Party in connection
with the valid execution, delivery and performance of this Agreement.

(h)In performing under this Agreement, it and its Affiliates agree to comply
with all applicable anti-corruption laws, including the Foreign Corrupt
Practices Act of 1977, as amended from time to time (“FCPA”); the
anti-corruption laws of the Territory; and all laws enacted to implement the
Organization for Economic Co-operation and Development Convention on Combating
Bribery of Foreign Officials in International Business Transactions;

(i)It is not aware of any Government Official or Other Covered Party having any
financial interest in the subject matter of this Agreement or in any way
personally benefiting, directly or indirectly, from this Agreement.

(j)No political contributions or charitable donations will be given, offered,
promised or paid by a Party (or its Affiliate) at the request of any Government
Official or Other Covered Party that is in any way related to this Agreement or
any activity conducted pursuant to this Agreement by such Party (or its
Affiliate), without the other Party’s prior written approval.

(k)It has not been debarred by the FDA, is not the subject of a conviction
described in Section 306 of the FD&C Act, and is not subject to any similar
sanction of other Governmental Authorities outside the Territory, and neither it
nor any of its Affiliates has used, in any capacity, any person who either has
been debarred by the FDA, is the subject of a conviction described in Section
306 of the FD&C Act or is subject to any such similar sanction.  Neither Party
will engage, in any capacity in connection with this Agreement or any ancillary
agreements, any person who either has been debarred by the FDA, is the subject
of a conviction described in Section 306 of the FD&C Act or is subject to any
such similar sanction. Each Party will inform the other Party in writing
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Affiliates who is performing services under this Agreement, or any ancillary
agreements, is debarred or is the subject of a conviction described in Section
306 of the FD&C Act, or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to each Party’s knowledge, is
threatened, relating to the debarment or conviction of a Party, any of its
Affiliates or any such person performing services hereunder or thereunder.

(l)It has been and will, for the Term, be in compliance with all applicable
global trade laws (including the Global Trade Control Laws), including those
related to import controls, export controls or economic sanctions, and it will
cause each of its Affiliates to remain in compliance with the same during the
Term.  Neither Party, nor any of its Affiliates or its or their respective
directors, officers, employees, agents or representatives is, or in the last
five years was, a Restricted Party.  Neither Licensee nor its Affiliates or
sublicensees will export, transfer, or sell the Licensed Product (i) to any
country or territory that is subject to comprehensive economic sanctions
administered by OFAC, which currently includes Cuba, Iran, North Korea, Sudan
and Syria, as well the Crimea region of Ukraine, unless the sale of the product
would be permissible if Licensee, its Affiliates or sublicensees were subject to
OFAC’s jurisdiction, (ii) to any Restricted Party unless the sale of the product
would be permissible if Licensee, its Affiliates or sublicensees was subject to
OFAC’s jurisdiction or (iii) in such a manner that would violate the Global
Trade Control Laws.

(m)It will comply with all Applicable Law in performing its activities
hereunder.  

9.2Representations and Warranties of Cara.  Cara represents, warrants and
covenants to VFMCRP, as of the Effective Date, that:

(a)the existing Licensed Patents Rights and Product Trademarks have been duly
filed in the applicable countries in the Licensed Territory (i.e., where such
rights exist);

(b)all applicable filing, maintenance and other fees have been timely paid for
all of the Licensed Patent Rights the Product Trademarks and any Local
Trademarks (if applicable), including all issued patents or registered
trademarks, and, to Cara’s Knowledge, all of the Licensed Patent Rights and
Product Trademarks that are issued patents or registered trademarks are in full
force and effect;

(c) (i) there is no pending or, to Cara’s Knowledge, threatened (in writing)
re-examination, opposition, interference, inter partes review or claim
challenging the inventorship, ownership, validity, enforceability or
patentability of the Licensed Patent Rights owned by Cara or other litigation or
proceeding relating to any of the Licensed Patents Rights owned by Cara and (ii)
to Cara’s Knowledge, there is no pending or threatened (in writing)
re-examination, opposition, interference, inter partes review or claim
challenging the inventorship, ownership, validity, enforceability or
patentability of the Licensed Patent Rights in-licensed by Cara or other
litigation or proceeding relating to any of the Licensed Patent Rights
in-licensed to Cara;

 

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(d)to Cara’s Knowledge, the making, having made, selling, offering for sale,
using or importing of a Compound or Licensed Product (as currently existing)
does not infringe any valid Patent Right or other intellectual property rights
of any Third Party in the Licensed Territory or the U.S.;

(e)Cara has received no written notice of any claim that a patent or trade
secret owned or controlled by a Third Party is or would be infringed or
misappropriated by the Development, manufacture, use, sale, offer or sale,
import or other Commercialization of the Licensed Compound or the Licensed
Products in the Territory or the U.S.;  

(f)to Cara’s Knowledge, all inventors of any Inventions that are claimed by the
Licensed Patent Rights have assigned their entire right, title and interest in
and to such Inventions and the corresponding Licensed Patent Rights to Cara (or
to its licensor);  

(g)Cara has not assigned, transferred, conveyed, granted rights to a Third Party
or otherwise encumbered its right, title and interest in Cara Product Technology
in a manner inconsistent with the license rights granted to VFMCRP under this
Agreement;

(h)Cara is the legal and beneficial owner of the Licensed Patent Rights existing
as of the Effective Date, free and clear of all liens, charges and encumbrances
(other than encumbrances that do not breach the warranty in Section 9.2(g));

(i)to Cara’s Knowledge, the conception, development and reduction to practice of
the material Cara Product Technology has not constituted or involved the
misappropriation of Know-How of any Third Party or the infringement of the
Patent Rights of any Third Party;

(j)Cara has not received any written notice of any unauthorized use,
infringement, or misappropriation of any material Cara Product Technology by any
person or entity, including any current or former employee or consultant of
Cara;

(k)Cara has no Knowledge of any information that it believes would render
unenforceable or unpatentable any claim in the Licensed Patent Rights existing
as of the Effective Date.

(l)the research, Development and manufacture of the Licensed Product conducted
by Cara or its Affiliates has been conducted in material compliance with
Applicable Law, and to Cara’s Knowledge, the research, Development and
manufacture of the Licensed Product conducted by Cara’s Third Party contractors
has been conducted in material compliance with Applicable Law.

As used herein, “Knowledge” means that, based on the actual knowledge of the
executive officers (including General Counsel and the Head of IP) of Cara, such
officers are not aware of facts that make the statement, by which the term
Knowledge is qualified, materially untrue.  

 

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9.3Representations and Warranties of VFMCRP.  VFMCRP represents, warrants and
covenants to Cara that:

(a)as of the Effective Date, it and its Affiliates do not have any ongoing
program to identify, research or Develop any drug products that may be
competitive with Licensed Product.  

9.4No Other Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN SECTIONS 9.1 – 9.3,
NEITHER OF THE PARTIES MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING AND PARTICULARLY THAT THE
INTELLECTUAL PROPERTY LICENSED HEREUNDER IS NON-INFRINGING OR THAT PRODUCT(S)
WILL BE SUCCESSFULLY DEVELOPED HEREUNDER, AND FURTHER, THE PARTIES HEREBY
DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF
TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  

9.5Indemnification by VFMCRP.  VFMCRP shall indemnify, hold harmless and defend
Cara, its Affiliates and all of their respective officers, directors, employees,
agents, licensors and shareholders (collectively, the “Cara Indemnitees”) from
and against any and all losses, damages, liabilities, judgments, fines, amounts
paid in settlement, expenses and costs of defense (including reasonable
attorneys’ fees) (“Losses”) resulting from any allegation, demand, claim, suit,
action or proceeding brought or initiated by a Third Party (each a “Third Party
Claim”) against any Cara Indemnitee to the extent arising out of (a) a Default
by VFMCRP or its Affiliates ; (b) the gross negligence or willful misconduct of,
or violation of Applicable Law by, VFMCRP or its Affiliate or Sublicensee; or
(c) the Development, offer for sale, sale or use or other Commercialization of
any Compound or Licensed Product by, on behalf of or under authority of, VFMCRP
or its Affiliate, Sublicensee, Third Party distributor, or end user; provided
that the foregoing defense, hold harmless and indemnity obligations shall not
apply to the extent such Third Party Claim is caused by the gross negligence,
willful misconduct or violation of Applicable Law by Cara or is due to any
action, omission or activity covered by Section 9.6(a) or (b) below, or by an
action or omission of Cara for which Cara has an indemnity obligation under the
terms of the Supply Agreement with respect to defective Licensed Product
supplied by Cara.  

9.6Indemnification by Cara.  Cara shall indemnify, hold harmless and defend
VFMCRP and its Affiliates and all of their respective officers, directors,
employees, agents, licensors and shareholders (collectively, the “VFMCRP
Indemnitees”) from and against any and all Losses resulting from any Third Party
Claim against any VFMCRP Indemnitee to the extent arising out of (a) a Default
by Cara or its Affiliates; (b) the gross negligence or willful misconduct of, or
violation of Applicable Law by, Cara or its Affiliates; or (c) the Development,
offer for sale, sale or use or other Commercialization of any Compound or
Licensed Product by, or on behalf of or under the authority of Cara or its
Affiliate or Third Party licensee (for clarity, other than VFMCRP or its
Affiliate or Sublicensee),  or the manufacture of any Compound or Licensed
Product by, on behalf of or under authority of, Cara or its Affiliate (for
clarity, other than VFMCRP or its Affiliate or Sublicensee); provided that the
foregoing defense, hold harmless and indemnity obligations shall not apply to
the extent such Third Party Claim is

 

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caused by the gross negligence, willful misconduct or violation of Law by a
VFMCRP Indemnitee or is due to any action, omission or activity covered by
Section 9.5(a) or (b) above.

9.7 Indemnification Procedure.

(a)To be eligible for the Cara Indemnitees to be indemnified hereunder, Cara
shall provide VFMCRP with prompt notice of the Third Party Claim giving rise to
the indemnification obligation under Section 9.5 (provided that any delay in
giving such notice shall not exempt VFMCRP from its indemnity, hold harmless and
defense obligations if such delay does not cause any material prejudice to
VFMCRP) and the exclusive (provided that VFMCRP timely undertakes and continues
to fully defend against the Third Party Claim) ability to defend or settle any
such claim; provided however that VFMCRP shall not enter into any settlement for
damages, or that imposes upon any Cara Indemnitee any obligation or liability,
without Cara’s prior written consent, such consent not to be unreasonably
withheld, delayed or conditioned.  Cara shall have the right to participate, at
its own expense and with counsel of its choice, in the defense of any claim or
suit that has been assumed by VFMCRP, provided that VFMCRP shall in any event
control the defense of the claim or suit.

(b)To be eligible for the VFMCRP Indemnitees to be indemnified hereunder, VFMCRP
shall provide Cara with prompt notice of the Third Party Claim giving rise to
the indemnification obligation under Section 9.6 (provided that any delay in
giving such notice shall not exempt Cara from its indemnity, hold harmless and
defense obligations if such delay does not cause any material prejudice to Cara)
and the exclusive (provided that Cara timely undertakes and continues to fully
defend against the Third Party Claim) ability to defend or settle any such
claim; provided however that Cara shall not enter into any settlement for
damages, or that imposes upon any VFMCRP Indemnitee any obligation or liability,
without VFMCRP’s prior written consent, such consent not to be unreasonably
withheld, delayed or conditioned.  VFMCRP shall have the right to participate,
at its own expense and with counsel of its choice, in the defense of any claim
or suit that has been assumed by Cara, provided that Cara shall in any event
control the defense of the claim or suit.

9.8Insurance.  Each Party will, at its own expense, obtain and maintain
insurance with respect to the Development and Commercialization of the Compound
and the Licensed Products under this Agreement in such amount and subject to
such deductibles and other limitations as biopharmaceutical companies in the
Territory customarily maintain with respect to the research, development, and
commercialization of similar products.  Each Party will provide a copy of such
insurance policy to the other Party upon request.

9.9No Consequential or Punitive Damages.  EXCEPT FOR DAMAGES RESULTING FROM (a)
A BREACH OF THE CONFIDENTIALITY OBLIGATIONS OF ARTICLE VIII, OR (b) A PARTY’S
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, NEITHER PARTY HERETO WILL BE LIABLE TO
THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY
OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, ARISING FROM OR RELATING TO THIS
AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  FOR CLARITY, THIS SECTION
9.9 SHALL NOT LIMIT EITHER PARTY’S RIGHTS OR OBLIGATIONS UNDER SECTIONS 9.5 OR
9.6.  

 

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Article X

TERM AND TERMINATION

10.1Term and Expiration.  This Agreement shall be effective as of the Effective
Date and shall continue in effect until expiration upon the expiration of all
Royalty Terms, or until earlier termination of the Agreement pursuant to Section
10.2 (the “Term”).  Upon expiration (but not earlier termination) of this
Agreement, VFMCRP shall have a fully paid-up, royalty-free, perpetual and
non-exclusive license (with the right to assign to Affiliates and Sublicensees),
to manufacture, import, market, promote, use, develop and sell the Licensed
Product in the Licensed Territory.  Following such expiration (but not earlier
termination) of this Agreement and for a period of [***] thereafter, Cara agrees
not to commercialize (whether directly or indirectly) the Licensed Product in
countries in the Licensed Territory in which VFMCRP has launched commercial
sales of the Licensed Product during the term of the Agreement

10.2Termination.

(a)Termination of Agreement for Cause. If at any time during the Term a Party
(the “Non-Defaulting Party”) believes that the other Party (the “Defaulting
Party”) has committed a Default, then the Non-Defaulting Party may provide
written notice (a “Breach Notice”) to the Defaulting Party, which Breach Notice
shall identify in detail the Default, the intent to terminate the Agreement if
the Default is not cured, and the actions or conduct that it considers would be
a cure of such Default.  If such a Breach Notice has been provided, and such
Default is not cured by the date sixty (60) days (thirty (30) days for breach of
a payment obligation) after such Breach Notice was provided, then the
Non-Defaulting Party may terminate the Agreement on written notice of
termination to Defaulting Party.  

(b)Termination for Bankruptcy.  Either Party shall have the right to terminate
this Agreement in the event of the commencement of any proceeding in or for
bankruptcy, insolvency, dissolution or winding up by or against the other Party
(other than pursuant to a corporate restructuring) that is not dismissed or
otherwise disposed of within sixty (60) days thereafter, subject to a Party’s
rights and licenses that are retained under Section 2.7.

(c)Termination by Consent.  The Parties may terminate this Agreement by mutual
written consent.  

(d)Termination for Patent Challenge. Except to the extent the following is
unenforceable under the laws of a particular jurisdiction, Cara may terminate
this Agreement on written notice if VFMCRP or its Affiliates or Sublicensees,
individually or in association with any other person or entity, commences a
legal action challenging the validity or enforceability of any of the Licensed
Patent Rights (a “Patent Challenge”); provided, however, that Cara may not
terminate this Agreement pursuant to this Section 10.2(d) as a result of any
Patent Challenge brought in response to an action brought against VFMCRP or its
Affiliates or Sublicensees by Cara for infringement of any Licensed Patent in
the Licensed Territory.

 

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(e)Termination by VFMCRP for Convenience.  Upon the earlier of (i) the
acceptance for filing of an NDA covering Licensed Product filed with the FDA
(after completion of the phase 3 program), or (ii) the third anniversary of the
Effective Date, VFMCRP may terminate this Agreement in its entirety, or in part
only with respect to particular countries within the Licensed Territory, by
providing written notice to Cara thereof, which termination will be effective 12
months following the date of such notice; provided, however, that such 12 month
notice period may be shortened by mutual agreement of the Parties.      

10.3Effect of Termination.  If this Agreement terminates early in its entirety
pursuant to a termination under Section 10.2 (that is, prior to expiration under
Section 10.1), then:

(a)Cara shall, within [***] after the effective date of such termination, return
or cause to be returned to VFMCRP copies of all VFMCRP’s Confidential
Information (other than VFMCRP Product Technology); for clarity, Cara may retain
(i) all copies of Joint Know-How, (ii) one copy of such returned VFMCRP
Confidential Information solely for legal archive purposes, and (iii) copies of
all VFMCRP Product Technology (for use in exercising the license rights granted
to Cara under the Agreement that survive termination of this Agreement;  

(b)VFMCRP’s licenses pursuant to Sections 2.1, 2.2 and 2.3 shall terminate as of
the effective date of termination;

(c)within [***] after the effective date of termination VFMCRP shall return or
cause to be returned to Cara, all copies of all Cara’s Confidential Information
and all Licensed Know-How; except that VFMCRP may retain (i) all copies of Joint
Know-How, and (ii) one copy of the Cara Confidential Information solely for
legal archive purposes;

(d)all of VFMCRP’s rights to use Cara Confidential Information and Cara
Know-How, including with respect to Compounds and Licensed Products, shall
terminate and revert exclusively to Cara, and VFMCRP covenants that, for [***]
after the date of such termination, VFMCRP and its Affiliates and Sublicensees
shall not market, promote, use, offer for sale or sell Compound or Licensed
Product (except as may otherwise be permitted in Section 10.3(f) with respect to
remaining inventory);  

(e)immediately and automatically upon termination, VFMCRP will be deemed to
grant to Cara, effective solely upon, and exercisable from and after, such
termination:  (A) the exclusive, worldwide license, with full rights to grant
sublicenses through multiple tiers, under VFMCRP’s and its Affiliates’ interest
in all applicable Joint Patents as specified by Cara, such license solely to
research, Develop, make, have made, use, offer for sale, sell, export and import
all Compounds and Licensed Products, in the Field in the Licensed Territory; and
(B) a worldwide, fully sublicenseable (through multiple tiers), non-exclusive
license, under all applicable VFMCRP Product Technology, including all
regulatory documentation and applications relating to Compound or Licensed
Product, such license to research, Develop, make, have made, use, offer for
sale, sell, export and import Compound and Licensed Products existing for all
purposes in the Licensed Territory.  

 

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(f)Cara shall have the option, exercisable within [***] following such
termination, to purchase and obtain VFMCRP’s and VFMCRP’s Affiliate’s or
Sublicensee’s existing inventory of Licensed Products (or a portion of any such
inventory) at the supply price paid for such Licensed Products by, and/or any
costs for manufacturing, formulating, tableting and packaging the Licensed
Products incurred by, VFMCRP, its Affiliates or their permitted Sublicensees
(such supply price or costs, the “Product Price” for the applicable Licensed
Product), provided that if Cara desires to exercise such option, VFMCRP shall
provide to Cara, within [***] of request, a listing of the expiration dates for
each lot in such inventory (with each lot identified by lot number), and for any
such inventory purchased by Cara hereunder, VFMCRP shall provide to Cara a
typical product warranty as to remaining shelf life, storage in accordance with
cGMP, and compliance with specifications and Applicable Law.  Cara may exercise
such option by written notice to VFMCRP during such [***] period.  In addition,
if this Agreement is terminated by Cara pursuant to Section 10.2(a), then the
purchase price for any Licensed Product purchased by Cara by exercise of this
option shall be [***] of the Product Price for the applicable Licensed Product
purchased hereunder by Cara.  If Cara does not exercise such option, VFMCRP, its
Affiliates or their respective permitted sublicensees will be permitted to sell,
subject to the payment to Cara in full of applicable royalties and any other
amounts due under this Agreement, any Licensed Products in inventory (including
completion for sale of any work in progress) as of the date of termination, such
sales solely during the [***] period following such termination, and provided
that VFMCRP covenants and warrants that any such sale of Licensed Product after
such termination shall comply with all Applicable Laws.

(g)Automatically and immediately upon termination of this Agreement in its
entirety VFMCRP shall assign and transfer and hereby assigns and transfers to
Cara all right, title and interest in any and all regulatory applications (such
as INDs and NDAs) and Regulatory Approval applications and Regulatory Approvals
in the Licensed Territory covering Licensed Product.  VFMCRP and VFMCRP’s
Affiliates each shall sign all documents and instruments and take all such
actions as reasonable needed to effect and perfect such assignments and
transfers.

(h)If VFMCRP terminates this Agreement solely with respect to a particular
country or countries in the Licensed Territory, rather than in its entirety,
pursuant to Section 10.2(e), then such countries are automatically excluded from
the Licensed Territory, and all rights hereunder as to Compound and Licensed
Product in such countries revert automatically and exclusively to Cara, and the
definition of the Licensed Territory for the purposes of this Agreement will
automatically be amended to remove such terminated country or countries.

10.4Partial Termination for Cara Uncured Material Breach.  If at any time during
the Term, Cara has committed a Default, then in lieu of proceeding under Section
10.2(a), VFMCRP may proceed under this Section 10.4, by providing to written
notice (a “Default Notice”) to Cara, which Default Notice shall identify in
detail the Default, the intent to terminate partially (pursuant to this Section
10.4) the Agreement if the Default is not cured, and the actions or conduct that
it considers would be a cure of such Default.  If such a Default Notice has been
provided with respect to an actual Default by Cara, and such Default is not
cured by the date sixty (60) days after such Default Notice was provided, then
on written notice to Cara VFMCRP may effect a partial, limited termination of
the Agreement, having the following effects:  (a) the Development provisions
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for Licensed Product in the Field, with respect to Licensed Territory, shall be
terminated and subject to the following provisions of this Section 10.4; (b)
VFMCRP shall undertake and commit to conduct such Development of Licensed
Product with respect to Licensed Territory, at its cost, and subject and
pursuant to the terms of Article 14, with each of the Party’s respective roles
under the terms of Article IV that apply to Cara conducting such Development
activities being reversed and (c) VFMCRP’s royalty obligations under Section 6.3
shall be reduced by [***].  For clarity, after a partial termination under this
Section 10.4, all terms of this Agreement, except as modified pursuant to the
foregoing sentence of this Section 10.4, shall remain in full force and
effect.  

10.5Effect of Expiration or Termination; Survival.

(a)Expiration or termination of the Agreement shall not relieve the Parties of
any obligation accruing prior to such expiration or termination.  Any expiration
or termination of this Agreement shall be without prejudice to the rights of
either Party against the other Party accrued or accruing under this Agreement
prior to expiration or termination, including the obligation to pay royalties
for Licensed Product(s) sold prior to such expiration or
termination.  Termination of this Agreement shall be in addition to, and shall
not prejudice, the Parties’ remedies at law or in equity, including the Parties’
ability to receive legal damages or equitable relief with respect to any breach
of this Agreement, regardless of whether or not such breach was the reason for
the termination.

(b)On a country-by-country and Licensed Product-by-Licensed Product basis, if
VFMCRP uses any Product Trademark or any Local Trademark in connection with the
Commercialization of the Licensed Products in a particular country of the
Licensed Territory, then following the expiration during the Term of the
applicable Royalty Term in such country and completion of payment of all amounts
owed to Cara for sales of Licensed Product in such country, the licenses granted
to VFMCRP under Sections 2.4 and 5.5 to use the Product Trademarks and Local
Trademarks in such will remain exclusive, subject to payment by VFMCRP of a
royalty of [***] of Net Sales of all Licensed Products in such country
thereafter.  

(c)The following Articles and Sections:  Articles I, VI (until completion of all
payments owed to Cara), VIII, X, XI and XII, and Sections 2.6, 2.8(a), 7.1, 7.2,
9.5, 9.6, 9.7 and 9.9, shall survive the expiration or termination of the
Agreement.  

Article XI

DISPUTE RESOLUTION

11.1Seeking Consensus.  If any dispute or issue between the Parties arises out
of, in connection with or related to this Agreement, including disputes over the
interpretation, performance, enforcement or breach of this Agreement, including
any disagreements at the JSC level described in Section 3.2(c), (any such
dispute or issue, a “Dispute”), then upon the written request of either Party,
the matter shall be referred to the Senior Executives, who shall meet in a good
faith effort to resolve the Dispute. Any final decision mutually agreed to by
the Senior Executives shall be conclusive and binding on the Parties.  If the
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to agree on the resolution of any such Dispute within [***] (or such other
period of time as mutually agreed by the Senior Executives) after such Dispute
was first referred to them, then such Dispute shall be resolved (if at all)
pursuant to the provisions of Section 11.2.

11.2Courts.  If the Parties do not fully settle or otherwise resolve a Dispute
pursuant to Section 11.1, and a Party wishes to pursue the further resolution of
such Dispute, each such Dispute shall be finally and exclusively resolved by
litigation in the courts in the State of New York.  Each Party hereby consents
to the jurisdiction and proper venue of the courts in the State of New York for
any such action or claim initiated by a Party in accordance with this Article
XI.  

11.3Preliminary Relief.  Notwithstanding Section 11.1, a Party may seek and
apply for preliminary and/or permanent injunctive relief through the equitable
powers of courts in the State of New York at any time to prevent ongoing or
threatened harm due to an applicable breach of this Agreement or other good
cause.  

Article XII

MISCELLANEOUS

12.1Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of New York and applicable federal laws of the U.S.,
other than any principle of conflict or choice of laws that would cause the
application of the laws of any other jurisdiction.

12.2Waiver.  Waiver by a Party of a breach hereunder by the other Party shall
not be construed as a waiver of any succeeding breach of the same or any other
provision.  No delay or omission by a Party to exercise or avail itself of any
right, power or privilege that it has or may have hereunder shall operate as a
waiver of any right, power or privilege by such Party.  No waiver shall be
effective unless made in writing with specific reference to the relevant
provision(s) of this Agreement and signed by a duly authorized representative of
the Party granting the waiver.

12.3Notices.  Unless otherwise provided for in this Agreement, all notices,
instructions and other communications hereunder or in connection herewith shall
be in writing, shall be sent to the address specified in this Section 12.3 and
shall be: (a) delivered personally; (b) transmitted by facsimile; (c) sent by
registered or certified mail, return receipt requested, postage prepaid; or
(d) sent via a reputable international overnight delivery service.  Any such
notice, instruction or communication shall be deemed to have been delivered (i)
upon receipt if delivered by hand or when transmitted with electronic
confirmation of receipt, if transmitted by facsimile (if such transmission is on
a Business Day; otherwise, on the next Business Day following such
transmission), provided that an original document is sent via an internationally
recognized overnight delivery service (receipt requested), (ii) three (3)
Business Days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or (iii) one (1) Business Day after it is sent via a
reputable international overnight delivery service.

 

 

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If to Cara, to:

Cara Therapeutics, Inc.

4 Stamford Plaza

107 Elm Street, 9th Floor

Stamford, CT 06902

Attention: Chief Executive Officer
Facsimile: +1 (203) 406-3770

with a copies to:

Cara Therapeutics, Inc.

4 Stamford Plaza

107 Elm Street, 9th Floor

Stamford, CT 06902

Attention: Office of the General Counsel
Facsimile: +1 (203) 406-3770

 

 

 

and:

Cooley LLP
3175 Hanover St.

Palo Alto, CA  94306

USA

Attn:  Babak Yaghmaie, Esq.

If to VFMCRP, to:

Vifor Fresenius Medical Care Renal Pharma Ltd

Rechenstrasse 37

9014 St. Gallen

Switzerland
Attn: CEO
Fax: +41 58 851 8001

 

with a copy to:

 

 

Vifor Pharma Management Ltd

Flughofstrasse 61

8152 Glattbrugg

Switzerland
Attn: Group General Counsel
Fax: +41 58 851 8001

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.

 

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12.4Entire Agreement; Amendment.  This Agreement (including its Exhibits and
Schedules) contains the complete understanding of the Parties with respect to
the subject matter of this Agreement and supersedes all prior understandings and
writings relating to such subject matter.  No amendment, change or addition to
this Agreement will be effective or binding on either Party unless reduced to
writing and duly executed on behalf of both Parties.

12.5Headings.  Headings in this Agreement are for convenience of reference only
and shall not be considered in construing this Agreement.

12.6Severability.  If any provision or portion thereof in this Agreement is for
any reason held to be invalid, illegal or unenforceable, the same shall not
affect any other portion of this Agreement, as it is the intent of the Parties
that this Agreement shall be construed in such fashion as to maintain its
existence, validity and enforceability to the greatest extent possible.  In any
such event, this Agreement shall be construed as if such clause of portion
thereof had never been contained in this Agreement, and there shall be deemed
substituted therefor such provision as will most nearly carry out the intent of
the Parties as expressed in this Agreement to the fullest extent permitted by
Applicable Law.

12.7Assignment.  Neither this Agreement nor any right or obligation hereunder
may be assigned or otherwise transferred by any Party without the consent of the
other Party, which consent shall not be unreasonably withheld; provided,
however, that (a) a Party may, without such consent, assign this Agreement, in
whole or in part to any of its respective Affiliates; provided that the
assigning Party shall remain jointly and severally liable with such Affiliate in
respect of all obligations so assigned, and (b) a Party may assign this
Agreement, without such consent, to its successor in interest in connection with
the merger, acquisition, sale of all or substantially all of the assets of or
similar transaction of such Party.  In addition, if a Party is acquired by or
mergers with a Third Party, any Patent Rights or other intellectual property
rights owned or controlled by such Third Party, as of just prior to the closing
of such transaction, shall be excluded from all rights licensed by such Party to
the other Party under this Agreement.

12.8Counterparts.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

12.9Force Majeure.  No Party shall be liable for failure of or delay in
performing obligations (other than payment obligations) set forth in this
Agreement, and no Party shall be deemed in breach of its obligations, if such
failure or delay is due to God, a public or natural disaster, explosion, fire,
flood, tornado, thunderstorm, hurricane, earthquake, war, terrorism, riot,
embargo, loss or shortage of power, labor stoppage, substance or material
shortage, events caused by reason of laws of any Governmental Authority, events
caused by acts or omissions of a Third Party or any other cause reasonably
beyond the control of such Party, if the Party affected gives prompt notice of
any such cause to the other Party.  The Party giving such notice shall thereupon
be excused from such of its obligations hereunder as it is thereby disabled from
performing for so long as it is so disabled; provided, however, that such
affected Party commences and continues to use its Commercially Reasonable
Efforts to cure or avoid the effects of such cause.  If any such delay resulting
from such a force majeure exceeds [***] (from

 

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the date the applicable obligation was required to be performed), then the Party
not affected by the force majeure will have the right to terminate this
Agreement on written notice to the other Party, with the consequences set out in
Section 10.3.

12.10Third Party Beneficiaries.  None of the provisions of this Agreement shall
be for the benefit of or enforceable by any Third Party, other than an Cara
Indemnitee under Section 9.5 or VFMCRP Indemnitee under Section 9.6.  No such
Third Party shall obtain any right under any provision of this Agreement or
shall by reason of any such provision make any claim in respect of any debt,
liability or obligation (or otherwise) against either Party.

12.11Relationship of the Parties.  Each Party shall bear its own costs incurred
in the performance of its obligations hereunder without charge or expense to the
other, except as expressly provided in this Agreement.  Neither Party shall have
any responsibility for the hiring, termination or compensation of the other
Party’s employees or for any employee compensation or benefits of the other
Party’s employees.  No employee or representative of a Party shall have any
authority to bind or obligate the other Party for any sum or in any manner
whatsoever, or to create or impose any contractual or other liability on the
other Party without said other Party’s approval.  For all purposes, and
notwithstanding any other provision of this Agreement to the contrary, the legal
relationship under this Agreement of each Party to the other Party shall be that
of independent contractor.  Nothing in this Agreement shall be construed to
establish a relationship of partners or joint ventures between the Parties, or
to grant a Party the right to bind the other Party to any obligations to any
Third Party.

12.12Performance by Affiliates.  To the extent that this Agreement imposes
obligations on Affiliates of a Party or permits a Party to exercise its rights
or perform its obligations through its Affiliates, such Party agrees to cause
its Affiliates to perform such obligations and shall guarantee performance of
this Agreement by its Affiliates. If any disagreement arises out of the
performance of this Agreement by an Affiliate of a Party, or the alleged failure
of an Affiliate to comply with the conditions and obligations of this Agreement,
the Party seeking to resolve such dispute shall have the right do so directly
with the other Party, without any obligation to first pursue an action against,
or recovery from, the Affiliate which is alleged to have caused a breach of this
Agreement.

12.13Construction.  Each Party acknowledges that it has been advised by counsel
during the course of negotiation of this Agreement, and, therefore, that this
Agreement shall be interpreted without regard to any presumption or rule
requiring construction against the Party causing this Agreement to be
drafted.  Any reference in this Agreement to an ARTICLE, Section, subsection,
paragraph, clause, Schedule or Exhibit shall be deemed to be a reference to any
article, section, subsection, paragraph, clause, schedule or exhibit, of or to,
as the case may be, this Agreement.  Except where the context otherwise
requires, (a) wherever used, the use of any gender will be applicable to all
genders; (b) the word “or” is used in the inclusive sense (and/or); (c) any
definition of or reference to any agreement, instrument or other document refers
to such agreement, instrument other document as from time to time amended,
supplemented or otherwise modified (subject to any restriction on such
amendments, supplements or modifications set forth herein or therein); (d) any
reference to any Law refers to such Law as from time to time enacted, repealed
or amended; (e) the words “herein”, “hereof” and

 

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hereunder”, and words of similar import, refer to this Agreement in its entirety
and not to any particular provision hereof; and (f) the words “include”,
“includes” and “including” shall not limit the scope of the matter coming before
such words and shall be deemed to be followed by the phrase “but not limited
to”, “without limitation” or words of similar import.

[Signature page follows]

 

 

 

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IN WITNESS WHEREOF, the Parties have executed this Collaboration and License
Agreement as of the Effective Date.

Cara Therapeutics, Inc.

 

 

BY: /s/ Derek Chalmers

NAME: Derek Chalmers

TITLE: CEO

Vifor Fresenius Medical Care Renal Pharma Ltd.

BY:/s/ Stefan Schulze

NAME:Stefan Schulze

TITLE:President of the Executive Committee and COO

 

 

 

 

 

Vifor Fresenius Medical Care Renal Pharma Ltd.

BY:/s/ Dr. Oliver P. Kronenberg

NAME:D. Oliver P. Kronenberg

TITLE:Group General Counsel

 

 

 

 

 

[Signature Page to License Agreement]

 

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Exhibit 1.18

 

 

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Exhibit 1.34

Excluded Clinics and Programs

 

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Exhibit 1.62

Product Trademark

 

KORSUVA

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Exhibit 2.5(a)

Permitted Sublicensees

(a)

VFMCRP Affiliates;

[***]

 

(b)

Vifor Pharma Affiliates;

[***]

 

(c)

Third Parties

[***]

 

 

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