CONFIDENTIAL TREATMENT REQUESTED. Confidential portions of this document have
been redacted and have been separately filed with the Commission.

 

Exhibit No. 10.1

 

LICENSE AGREEMENT

 

Dated as of June 23, 2014

 

by and between

 

Ligand Pharmaceuticals Incorporated

 

and

 

TG Therapeutics, Inc.

 

 

 

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is dated as of June 23, 2014 (the
“Effective Date”) by and between Ligand Pharmaceuticals Incorporated, a Delaware
corporation organized having its place of business at 11119 North Torrey Pines
Road, Suite 200, La Jolla, California 92037 (including its successors and
permitted assigns, “Licensor”), and TG Therapeutics, Inc., a Delaware
corporation with its place of business at 3 Columbus Circle, 15th Floor, New
York, New York 10019 (including its successors and permitted assigns and all of
its Affiliates, “TGTX”). TGTX, on the one hand, and Licensor, on the other hand,
shall each be referred to herein as a “Party” or, collectively, as the
“Parties.”

 

RECITALS:

 

WHEREAS, TGTX is engaged in the research, development, manufacturing and
commercialization of pharmaceutical products, and TGTX is interested in
developing and commercializing products containing or comprising the Compounds;
and

 

WHEREAS, TGTX desires to license from Licensor and Licensor wishes to license to
TGTX, on an exclusive basis, the right to use, develop and commercialize
Licensor Technology in and for a defined field of use.

 

NOW, THEREFORE, in consideration of the foregoing and of the various promises
and undertakings set forth herein, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

Unless otherwise specifically provided herein, the following terms shall have
the following meanings:

 

1.1        “Affiliate” means a Person or entity that controls, is controlled by
or is under common control with a Party, but only for so long as such control
exists. For the purposes of this Section 1.1, the word “control” (including,
with correlative meaning, the terms “controlled by” or “under common control
with”) means the actual power, either directly or indirectly through one or more
intermediaries, to direct the management and policies of such Person or entity,
whether by the ownership of at least 50% of the voting stock of such entity, or
by contract or otherwise.

 

1.2       “Calendar Quarter” means each three month period commencing January 1,
April 1, July 1 or October 1, provided however that (a) the first Calendar
Quarter of the Term shall extend from the Effective Date to the end of the first
full Calendar Quarter thereafter, and (b) the last Calendar Quarter of the Term
shall end upon the termination or expiration of this Agreement.

 

1.3       “Calendar Year” means the period beginning on the 1st of January and
ending on the 31st of December of the same year, provided however that (a) the
first Calendar Year of the Term shall commence on the Effective Date and end on
December 31 of the same calendar year as the Effective Date, and (b) the last
Calendar Year of the Term shall commence on January 1 of the Calendar Year in
which this Agreement terminates or expires and end on the date of termination or
expiration of this Agreement.

 

 

 

 

 

1.4       “Combination Product” means a product (a) containing a Licensed
Product together with one or more other active ingredients, or (b) with one or
more products, devices, pieces of equipment or components, but sold for an
integrated price (e.g., with the purchase of one product the customer gets a
coupon for the other) or for a single price.

 

1.5       “Commercialization” or “Commercialize” means any and all activities
undertaken at any time for a particular Licensed Product and that relate to the
manufacturing, marketing, promoting, distributing, importing or exporting for
sale, offering for sale, and selling of the Licensed Product, and interacting
with Regulatory Authorities regarding the foregoing.

 

1.6       “Commercially Reasonable Efforts” means, with respect to the efforts
to be expended by a Party or such Party’s applicable Affiliate with respect to
any objective, such reasonable, diligent, and good faith efforts normally used
to accomplish a similar objective under similar circumstances by a
similarly-situated company. Commercially Reasonable Efforts will not mean that a
Party commits that it or such Party’s applicable Affiliate will actually
accomplish the applicable task.

 

1.7       “Compounds” means Licensor’s proprietary Interleukin-1 Receptor
Associated Kinase-4 (IRAK-4) inhibitors set forth on Schedule 1 and any other
salts, solvates, esters, metabolites, hydrates, intermediates, stereoisomers,
polymorphs, and derivatives of such compounds, and any other IRAK-4 inhibitors
discovered or developed by Licensor during the first six months after the
Effective Date and any other salts, solvates, esters, metabolites, hydrates,
intermediates, stereoisomers, polymorphs, and derivatives of such compounds.

 

1.8       “Controlled” means, with respect to (a) Patent Rights, (b) Know-How or
(c) biological, chemical or physical material, that a Party or one of its
Affiliates owns or has a license or sublicense to such Patent Rights, Know-How
or material (or in the case of material, has the right to physical possession of
such material) and has the ability to grant a license or sublicense to, or
assign its right, title and interest in and to, such Patent Rights, Know-How or
material as provided for in this Agreement without violating the terms of any
agreement or other arrangement with any Third Party.

 

1.9        “Covered” means, with respect to a Licensed Product, that the
manufacturing, importing, using, selling, or offering for sale of such Licensed
Product would, but for ownership of or a license granted hereunder under
Licensor’s relevant Patent Rights, infringe a Valid Claim of Licensor’s relevant
Patent Rights in the country in which the activity occurs.

 

1.10       “Development” or “Develop” means, with respect to a Licensed Product,
the performance of all preclinical and clinical development (including, without
limitation, toxicology, pharmacology, test method development and stability
testing, process development, formulation development, quality control
development, statistical analysis), clinical trials, and manufacturing and
regulatory activities that are required to obtain Regulatory Approval of such
Licensed Product.

 

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

 

1.12       “European Commission” means the authority within the European Union
that has the legal authority to grant Regulatory Approvals in the European Union
based on input received from the EMA or other competent Regulatory Authorities.

 

 

 

 

1.13       “FDA” means the United States Food and Drug Administration, or a
successor federal agency thereto.

 

1.14       “Field” means all prophylactic, palliative, therapeutic or diagnostic
uses in humans.

 

1.15       “First Commercial Sale” means, with respect to a Licensed Product in
any country, the first commercial transfer or disposition for value of such
Licensed Product in such country to a Third Party by TGTX, an Affiliate of TGTX
or a Sublicensee after Regulatory Approval therefor has been obtained in such
country.

 

1.16       “GAAP” means United States generally accepted accounting principles.

 

1.17       “Governmental Body” means any: (a) nation, principality, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; (c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official,
representative, organization, unit, body or entity and any court or other
tribunal); (d) multi-national or supranational organization or body; or
(e) individual, entity, or body exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.

 

1.18       “Know-How” means any scientific or technical information, results and
data of any type whatsoever, in any tangible or intangible form whatsoever, that
is not in the public domain or otherwise publicly known, including, without
limitation, discoveries, inventions, trade secrets, databases, practices,
protocols, regulatory filings, methods, processes, techniques, software, works
of authorship, plans, concepts, ideas, biological and other materials, reagents,
specifications, formulations, formulae, data (including, but not limited to,
pharmacological, biological, chemical, toxicological, clinical and analytical
information, quality control, trial and stability data), case reports forms,
data analyses, reports, studies and procedures, designs for experiments and
tests and results of experimentation and testing (including results of research
or development), summaries and information contained in submissions to and
information from ethical committees, the FDA or other Regulatory Authorities,
and manufacturing process and development information, results and data, whether
or not patentable, all to the extent not claimed or disclosed in a patent or
pending patent application. The fact that an item is known to the public shall
not be taken to exclude the possibility that a compilation including the item,
and/or a development relating to the item, is (and remains) not known to the
public. “Know-How” includes any rights including copyright, moral, trade-secret,
database or design rights protecting such Know-How. “Know-How” excludes Patent
Rights.

 

1.19       “Indication” means a generally acknowledged disease or condition, a
significant manifestation of a disease or condition, or symptoms associated with
a disease or condition or a risk for a disease or condition, which a Licensed
Product is intended to address; provided, however, that with respect to the each
of the Product Milestone Events, if each of the first two Indications for which
a particular Product Milestone Event has been achieved both involve oncology, no
further indication shall (with regard to such particular Product Milestone
Event) be deemed to be an Indication unless the further indication is for a
non-oncology indication. For the avoidance of doubt, in the event the first two
Indications for which a particular Product Milestone Event has been achieved
both involve oncology, no additional milestones shall be due under Section 5.2
for any subsequent, oncology-related Indication.

 

 

 

 

1.20       “Law” or “Laws” means all applicable laws, statutes, rules,
regulations, ordinances and other pronouncements having the binding effect of
law of any Governmental Body.

 

1.21       “Licensed Product” means any pharmaceutical product, in any dosage
form, preparation, composition, formulation, presentation or package
configuration, that is Commercialized or undergoing research or preclinical or
clinical Development that contains or comprises, in part or in whole, a
Compound. For clarity: if a product is described by the foregoing sentence it is
a “Licensed Product” for all purposes hereof whether or not it is Covered and
whether or not the manufacturing, importing, using, selling, or offering for
sale of such product would, but for a license granted under this Agreement under
the Licensor Technology, infringe any Licensor Technology in the country in
which the activity occurs.

 

1.22       “Licensor Know-How” means any and all Know-How that (a) is Controlled
by Licensor or any of its Affiliates as of the Effective Date or at any time
thereafter during the Term and (b) pertains directly and particularly to the
Compounds and (c) is from time to time expressly identified in writing by
Licensor to TGTX as constituting Licensor Know-How. For clarity: any and all
Know-How which Licensor determines, in its reasonable discretion, not to so
expressly identify as being within the definition of Licensor Know-How shall not
constitute Licensor Know-How. The Licensor Know-How shall include, but not be
limited to, the Know-How listed on Schedule 2 hereto.

 

1.23       “Licensor Patents” means all Patent Rights that are Controlled by
Licensor or any of its Affiliates as of the Effective Date or at any time
thereafter during the Term and that pertain directly and particularly to the
Compounds, other inhibitors of IRAK-4 and/or IRAK-4 inhibition. The Licensor
Patents shall include, but not be limited to, all Patent Rights set forth on
Schedule 3 hereto.

 

1.24       “Licensor Technology” means the Licensor Patents and the Licensor
Know-How.

 

1.25       “Major Market” means any of the (a) United States, (b) the European
Union (either in its entirety or including at least one Major Market EU Country,
as determined by TGTX in its sole discretion), or (c) Japan.

 

1.26       “Major Market EU Country” means any of France, Germany and the United
Kingdom.

 

1.27       “NDA” means a New Drug Application submitted pursuant to the
requirements of the FDA, as more fully defined in 21 U.S. CFR § 314.3 et seq., a
Biologics License Application submitted pursuant to the requirements of the FDA,
as more fully defined in 21 U.S. CFR § 601, and any equivalent application
submitted in any country, including a European Marketing Authorization
Application, together, in each case, with all additions, deletions or
supplements thereto.

 

1.28       “NDA Approval” means the receipt of notice from the relevant US
Regulatory Authority that an NDA for a Licensed Product has met all the criteria
for marketing approval.

 

1.29       “Net Sales” means the gross amount invoiced or otherwise charged by
TGTX, its Affiliates and Sublicensees to unrelated Third Parties for a Licensed
Product, less:

 

(a)Normal and customary trade, quantity, cash and discounts and credits allowed
and taken;

 

 

 

 

(b)Discounts, refunds, rebates, chargebacks, retroactive price adjustments, and
any other allowances given and taken which effectively reduce the net selling
price (other than such which have already diminished the gross amount invoiced
such as those outlined in Section 1.29(a) above), including, without limitation,
Medicaid rebates, institutional rebates or volume discounts;

 

(c)Product returns and allowances;

 

(d)Administrative fees paid to group purchasing organizations (e.g., Medicare)
and government-mandated rebates;

 

(e)Shipping, handling, freight, postage, insurance and transportation charges,
but all only to the extent included as a separate line item in the gross amount
invoiced;

 

(f)Any tax, tariff or duties imposed on the production, sale, delivery or use of
the Licensed Product, including, without limitation, sales, use, excise or value
added taxes and customs and duties, but all only to the extent included as a
separate line item (e.g., “taxes”) in the gross amount invoiced; and

 

(g)Bad debt actually written off during the accounting period (provided, that
any bad debt write-off so taken which is later reversed shall be added back to
Net Sales in the accounting period in which the reversal occurs).

 

Notwithstanding the foregoing, amounts invoiced by TGTX and its Affiliates and
Sublicensees for sales of Licensed Products among TGTX and its Sublicensees and
their respective Affiliates for resale shall not be included in the computation
of Net Sales.

 

In the event that a Licensed Product is commercialized as part of a Combination
Product for a single price, then for the purpose of determining Net Sales the
gross amount invoiced or otherwise charged by TGTX for such Licensed Product
shall be calculated by multiplying the sales price of such Combination Product
by the fraction A/(A+B) where A is the fair market value of the Licensed Product
and B is the fair market value of the other product(s) in the Combination
Product; and the applicable deductions from the gross amount invoiced or
otherwise charged by TGTX shall be allocated between the Licensed Product and
the other product(s) in the Combination Product in the same proportion.

 

1.30        “Patent Right” means: (a) an issued or granted patent, including any
extension, supplemental protection certificate, registration, confirmation,
reissue, reexamination, extension or renewal thereof; (b) a pending patent
application, including any continuation, divisional, continuation-in-part,
substitute or provisional application thereof; and (c) all counterparts or
foreign equivalents of any of the foregoing issued by or filed in any country or
other jurisdiction, provided however that, with respect to items (b) and (c), no
patent application shall be pending for a period of greater than seven years
from its actual date of filing.

 

1.31       “Person” means any natural person, corporation, firm, business trust,
joint venture, association, organization, company, partnership or other business
entity, or any government or agency or political subdivision thereof.

 

 

 

 

 

1.32        “Phase I Trial” means a clinical trial of a Licensed Product in
human patients conducted primarily for the purpose of determining the safety of
and/or the metabolism and pharmacologic actions of the Licensed Product in
humans, as described under 21 CFR § 312.21(a) (as hereafter modified or amended)
and any of its foreign equivalents.

 

1.33       “Phase III Trial” means a clinical trial of a Licensed Product in
human patients, which trial is designed (a) to establish that the Licensed
Product is safe and efficacious for its intended use; (b) to define warnings,
precautions and adverse reactions that are associated with the Licensed Product
in the dosage range to be prescribed; and (c) to be, either by itself or
together with one or more other clinical trials having a comparable design and
size, the final human clinical trial in support of Regulatory Approval of the
Licensed Product, and (d) consistent with 21 CFR § 312.21(c) (as hereafter
modified or amended) and any of its foreign equivalents. Provided that, and for
avoidance of doubt: any pivotal trial, which is intended to be or is in fact
used as one of the adequate and well-controlled trials for registration in any
jurisdiction, shall be deemed to be a Phase III Trial.

 

1.34       “Product Milestone Events” means the second, third, fourth, fifth,
sixth and seventh milestone events specified in Section 5.2.

 

1.35       “Regulatory Authority” means (a) the FDA, (b) the EMA or the European
Commission, or (c) any regulatory body with similar regulatory authority over
pharmaceutical or biotechnology products in any other jurisdiction anywhere in
the world.

 

1.36       “Regulatory Approval” means any and all approvals, licenses,
registrations, or authorizations of the relevant Regulatory Authority, necessary
for the Development, manufacture, use, storage, import, transport and
Commercialization of a given Licensed Product in a particular country or
jurisdiction. For the avoidance of doubt, Regulatory Approval outside of the
United States shall include any pricing or marketing approval needed prior to
the sale of a Licensed Product in the Field.

 

1.37       “Royalty Term” means, on a Licensed Product-by-Licensed Product and
country-by-country basis, the period from the First Commercial Sale of a given
Licensed Product in such country until the later of (a) expiry of the
last-to-expire Licensor Patent containing a Valid Claim to the Compound in such
country; or (b) the 10th anniversary of the First Commercial Sale of such
Licensed Product in such country. In a country where no Licensor Patent
containing a Valid Claim with respect to the Compound has ever existed nor ever
exists, the Royalty Term means on a product-by-product and country-by-country
basis, the period from the First Commercial Sale of such product in such country
until the 10th anniversary of such First Commercial Sale of such product in such
country.

 

1.38       “Sales Milestone Events” means the eighth and ninth milestone events
specified in Section 5.2.

 

1.39       “Share Value” as of a particular date means the mean average of the
respective trading days’ closing sale prices of the Shares on the Shares’
principal United States securities exchange for each of the eighteen trading
days immediately preceding such date; it being understood that any such closing
sale prices shall be adjusted appropriately to reflect the occurrence of any
stock split, reverse stock split, recapitalization, reorganization or other such
event.

  

 

 

 

1.40       “Shares” means shares of TGTX’s common stock, par value $0.001 per
share, as constituted on the Effective Date; the meaning of such term shall be
adjusted appropriately to reflect the occurrence of any stock split, reverse
stock split, recapitalization, reorganization or other such event.

 

1.41       “Sublicensee” means a Person, other than an Affiliate of TGTX, to
which TGTX (or its Affiliate) has, pursuant to Section 2.2, granted sublicense
rights under any of the license rights granted under Section 2.1. “Sublicense”
shall be construed accordingly.

 

1.42       “Tax” or “Taxes” means any federal, state, local or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.

 

1.43       “Third Party” means any Person other than Licensor, TGTX or
Affiliates of either of them, or any Sublicensees.

 

1.44       “Third Party Action” means any claim or action made by a Third Party
against a Party that claims that a Licensed Product, or its use, Development,
manufacture or sale infringes such Third Party’s intellectual property rights.

 

1.45        “United States” or “US” means the United States of America and its
territories and possessions.

 

1.46       “Upfront Shares” means 125,000 Shares.

 

1.47       “Valid Claim” means a claim of an issued and unexpired patent which
has not lapsed or been revoked, abandoned or held unenforceable or invalid by a
final decision of a court or governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has not
been disclaimed, denied or admitted to be invalid or unenforceable through
reissue, reexamination or disclaimer or otherwise.

 

1.48       The definition of each of the following terms is set forth in the
section of the Agreement indicated below:

 

“Action” has the meaning set forth in Section 6.5(b).

 

“Claim” has the meaning set forth in Section 9.1.

 

“Confidential Information” has the meaning set forth in Section 7.1.

 

“Controlling Party” has the meaning set forth in Section 6.6(c).

 

“Development Program” has the meaning set forth in Section 3.1.

 

“Disclosing Party” has the meaning set forth in Section 7.1.

 

“Generic Supply” has the meaning set forth in Section 5.4(b).

 

 

 

 

 

“Indemnified Party” has the meaning set forth in Section 9.4.

 

“Indemnifying Party” has the meaning set forth in Section 9.4.

 

“Licensor Indemnitees” has the meaning set forth in Section 9.1.

 

“Notice” has the meaning set forth in Section 7.6.

 

“Publishing Party” has the meaning set forth in Section 7.6.

 

“Receiving Party” has the meaning set forth in Section 7.1.

 

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

 

“TGTX Indemnitees” has the meaning set forth in Section 9.2.

 

ARTICLE II

LICENSES AND OTHER RIGHTS

 

2.1       Grant of License to TGTX. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to TGTX and its Affiliates, and TGTX and its
Affiliates hereby accept, an exclusive (even as to Licensor), worldwide,
royalty-bearing right and license (with the right to sublicense, and to further
sublicense, subject to the provisions of Section 2.2) under the Licensor
Technology to research, Develop, manufacture, have manufactured, use, import and
Commercialize and have Commercialized the Licensed Products in and for the
Field. Licensor and its Affiliates grant no licenses or rights to use other than
as expressly set forth herein.

 

2.2       Grant of Sublicenses by TGTX. TGTX shall have the right, in its sole
discretion, to grant Sublicenses, in whole or in part, under the license granted
in Section 2.1; provided, however, that the granting by TGTX of a Sublicense
shall not relieve TGTX of any of its obligations hereunder; and provided,
further, that TGTX’s right to grant a Person a Sublicense shall be subject to
TGTX including within such Sublicense express provisions binding the Sublicensee
to all of the duties, obligations, restrictions and acknowledgements hereunder
of TGTX (with Licensor being an express third-party beneficiary thereof), and
stating that the Sublicense shall (except as otherwise expressly provided in
Section 10.3 or 10.4(c)) automatically terminate upon the expiration or earlier
termination of this Agreement. Notwithstanding the foregoing sentence, it is not
required that a Sublicense include provisions for the Sublicensee to pay
Royalties or make milestone payments directly to Licensor or to provide royalty
reports directly to Licensor. TGTX shall ensure that all of its Sublicensees
shall comply with the terms and conditions of this Agreement (as applicable to
them) and TGTX shall be and remain fully responsible for the compliance by such
Sublicensees with the terms and conditions of this Agreement (as applicable to
them) as if such Sublicensees were TGTX hereunder. Except for Sublicenses as
expressly allowed herein, TGTX acknowledges that it has no right to, and agrees
not to purport to, grant to anyone a sublicense under the Licensor Technology.

 

2.3       Bankruptcy Code. All rights and licenses granted under or pursuant to
this Agreement by Licensor to TGTX are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the US Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101 of the US Bankruptcy Code.
The Parties agree that TGTX, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights and elections under the US
Bankruptcy Code.

 

 

 

 

 

2.4       Service Agreement. The Parties acknowledge that the Parties may choose
in the future to negotiate toward a research agreement in support of the
Development Program; however, neither Party shall be obligated to negotiate
toward, or to enter into, such a research agreement, and in the absence of any
such definitive written research agreement Licensor shall have no obligation to
assist TGTX’s research and development.

 

ARTICLE III

DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION

 

3.1       Diligence by TGTX. TGTX shall use Commercially Reasonable Efforts to
Develop and to Commercialize at least one Licensed Product in and for the Field
in at least one Major Market. In connection therewith, TGTX shall formulate and
execute a preclinical and clinical development program to Develop one or more
Licensed Products in and for the Field in at least one Major Market (the
“Development Program”).

 

3.2       No Guaranty of Favorable Results. Licensor does not warrant that the
Development Program, TGTX’s other preclinical studies and evaluation (if any)
and/or TGTX’s clinical studies (if any) will produce any particular results or
any favorable results.

 

3.3       TGTX Responsibility and Authority for Development. TGTX shall have the
exclusive right, and sole responsibility and decision-making authority, to
research and Develop any Licensed Products in and for the Field and to conduct
(either itself or through its Affiliates, agents, subcontractors and/or
Sublicensees) all clinical trials and non-clinical studies TGTX believes
appropriate to obtain Regulatory Approval for Licensed Products in and for the
Field.

 

3.4       Commercialization. TGTX shall have the exclusive right, and sole
responsibility and decision-making authority, to Commercialize any Licensed
Products in and for the Field itself or through one or more Sublicensees or
other Third Parties selected by TGTX and shall have the sole decision-making
authority and responsibility in all matters relating to the Commercialization of
Licensed Products.

 

3.5       Manufacturing. TGTX shall have the exclusive right, and sole
responsibility and decision-making authority, to manufacture, at the clinical
and/or commercial stage, any Licensed Product in and for the Field itself or
through one or more Sublicensees selected by TGTX.

 

3.6       Reporting to Licensor. TGTX shall, at least once each Calendar Year,
provide to Licensor an update report regarding the progress of all research and
Development efforts toward Licensed Products and regarding the progress of
Commercialization of Licensed Products.

 

3.7       Right to Subcontract of TGTX. Subject to any required compliance with
Section 2.2, TGTX may exercise any of the rights or obligations that TGTX may
have under this Agreement (including, without limitation, any of the rights
licensed in Section 2.1 hereof) by Sublicensing, but any Sublicense granted or
entered into by TGTX as contemplated by this Section 3.7 or any Sublicensee’s
exercise or performance of all or any portion of the rights or obligations that
TGTX may have under this Agreement shall not relieve TGTX from any of its
obligations under this Agreement.

 

 

 

 

 

3.8       Compliance with Law. TGTX undertakes and agrees that the conduct of
the Development Program, the use of the Licensor Technology, and all
Development, manufacture and Commercialization of Licensed Products by it and
its Affiliates and Sublicensees shall comply in all material respects with all
applicable international, federal, state and local laws, rules and regulations,
including, but not limited to, environmental, occupational safety/health, safety
and import/export restrictions, laws, rules and regulations.

 

3.9       Costs and Expenses. As between Licensor and TGTX, TGTX shall be solely
responsible for all costs and expenses related to Development, manufacture and
Commercialization of the Licensed Products, including without limitation costs
and expenses associated with all preclinical activities and clinical trials, and
all regulatory filings and proceedings relating to Licensed Product.

 

3.10       .Patent Marking. TGTX agrees that with respect to each unit or
package of Licensed Products sold in a given country, TGTX shall comply with the
customary patent marking laws and practices of such country as to the applicable
Licensor Patents.

 

3.11       Trademarks. As between Licensor and TGTX, TGTX shall have the sole
authority to select trademarks for Licensed Products and shall own all such
trademarks. Licensor does not grant TGTX the right to use any trademarks of
Licensor or its Affiliates.

 

ARTICLE IV

REGULATORY MATTERS

 

4.1       Regulatory Filings. As between TGTX and Licensor, TGTX (or its
applicable Affiliate) shall own and maintain all regulatory filings made after
the Effective Date for Licensed Products and all Regulatory Approvals for
Licensed Products.

 

4.2       Communications with Authorities. TGTX (or one of its Affiliates or
Sublicensees) shall be responsible for and act as the sole point of contact for
communications with Regulatory Authorities in connection with the Development,
Commercialization, and manufacturing of Licensed Products. At the request of
TGTX, Licensor shall make available to TGTX, at no more than a reasonable
charge, a qualified representative who shall, together with the representatives
of TGTX, participate in and contribute to meetings with the Regulatory
Authorities with respect to regulatory matters relating solely to the Licensor
Technology.

 

4.3       Adverse Event Reporting. TGTX agrees to comply with any and all Laws
that are applicable to it as of the Effective Date and thereafter during the
Term in connection with Licensed Product safety data collection and reporting
(and, if applicable, recalls). TGTX shall provide annually to Licensor a listing
of each serious untoward medical occurrence in a patient or subject who is
administered a Licensed Product and shall, should Licensor expressly so request
and TGTX approve (such approval not to be unreasonably withheld), provide
Licensor with additional detail as to such ones of such occurrences as Licensor
may designate.

 

ARTICLE V

Financial Provisions

 

5.1       Upfront Fee. TGTX becomes obligated on the Effective Date to pay
Licensor the Upfront Shares in partial consideration of the rights granted to
Company under this Agreement. TGTX shall deliver to Licensor a stock certificate
representing the Upfront Shares on the Effective Date or within five business
days thereafter, provided that in any event such stock certificate is delivered
on or before June 30, 2014. Such stock certificate shall be unlegended except
for a standard securities-law restrictive legend.

 

 

 

 

 

5.2       Commercial Milestone Payments. As further partial consideration for
Licensor’s grant of the rights and licenses to TGTX hereunder, TGTX shall pay to
Licensor the following one-time, non-refundable milestone payments (a) with
regard to the first Licensed Product to achieve the respective Product Milestone
Event, for each of the first * Indications for which a Licensed Product achieves
the respective Product Milestone Event, and (b) upon achievement of each
respective Sales Milestone Event by TGTX or its Affiliate or Sublicensee. TGTX
shall promptly, but in no event later than 15 days following TGTX or its
Affiliate’s receipt of actual knowledge of each achievement of a milestone
event, notify Licensor in writing of the achievement of such milestone event and
shall pay the relevant milestone payment within 20 days thereafter. All
milestone and other Article V payments shall be paid in cash except that in the
case of any achievement of the second Product Milestone Event (Enrollment of at
least 100 patients (combined) in all clinical trials for the indication), TGTX
shall have the right to elect (but only within the notice of achievement
referred to in the preceding sentence, and only if such notice of achievement is
not delivered untimely) to pay any amounts owed not in the form of cash but
rather in the form of a number of Shares equal to amount owed divided by the
Share Value as of the date such notice of achievement is delivered; or some
portion (designated and specified by TGTX in its discretion within such notice
of achievement, which such notice of achievement is not delivered untimely) of
the amount owed in cash and the remainder in the form of a number of Shares
equal to such remainder divided by the Share Value as of the date such notice of
achievement is delivered. (Any such election shall be irrevocable.) If TGTX
makes such election it shall deliver to Licensor a stock certificate
representing the Shares on the date such notice of achievement is delivered or
within five business days thereafter; such stock certificate shall be unlegended
except for a standard securities-law restrictive legend.

 

Milestone Event  Milestone Payment  Total Milestone
Payments (if achieved
with three
Indications)  First dosing of any patient in any Phase I Trial  * Shares   n/a 
Enrollment of at least 100 patients (combined) in all clinical trials for the
Indication  $* (per Indication)  $*  Enrollment of first patient in first Phase
III Trial  $* (per Indication)  $*  NDA filing in the United States for a
Licensed Product  $* (per Indication)  $*  Regulatory Approval in the United
States for a Licensed Product  $* (per Indication)  $*  Regulatory Approval in
or for a Major Market EU Country for a Licensed Product  $* (per Indication) 
$*  Regulatory Approval in Japan for a Licensed Product  $* (per Indication) 
$*  The first time aggregate worldwide Net Sales for all Licensed Products
exceeds $1,000,000,000 in any Calendar Year  $*   n/a  The first time aggregate
worldwide Net Sales for all Licensed Products exceeds $3,000,000,000 in any
Calendar Year  $*   n/a 

 

 

* Confidential material redacted and filed separately with the Commission.

 

 

 

 

For avoidance of doubt: it is possible that the first three Indications to
achieve a particular milestone event might not be identical with the first three
Indications to achieve a different particular milestone event; this non-identity
would not affect the validity of the three-time milestone event achievement for
either of the milestone events. For the avoidance of doubt, in the event the
first two Indications for which a particular Product Milestone Event has been
achieved both involve oncology, no additional milestones shall be due under
Section 5.2 for any subsequent, oncology-related Indication.

 

5.3         Deemed Achievement of Commercial Milestones. Upon achievement of any
respective Product Milestone Event with regard to a particular Indication, all
“prior” milestone events shall be deemed to be thereby achieved as to such
Indication; and if the milestone payment for any such “prior” milestone events
so deemed to be thereby achieved has not previously been paid, it shall
thereupon also be paid, forthwith (unless the deemed-achieved milestone event
has already been achieved and paid for three times).

 

5.4         Royalty, Etc. Payments for Licensed Products.

 

(a)       With respect to Net Sales of all Licensed Products which are Covered
under a Licensor Patent as of the time of the Net Sales: As further
consideration for Licensor’s grant of the rights and licenses to TGTX hereunder,
TGTX shall pay to Licensor a royalty on aggregate annual worldwide Net Sales of
all such Licensed Products by TGTX and its Affiliates and Sublicensees (but
excluding Net Sales of a given Licensed Product after its applicable Royalty
Term), at the percentage rates set forth below:

 

Annual Worldwide Net Sales of All (Covered) Licensed
Products per Calendar Year (US Dollars)  Incremental
Royalty Rate  For Net Sales of such Licensed Products from $0 up to and
including $1,000,000,000   6% For that portion of Net Sales of such Licensed
Products that is greater than $1,000,000,000   9.5%

 

By way of illustration, assume in a Calendar Year that aggregate worldwide
annual Net Sales of all such Licensed Products total $1,950,000,000. The total
royalties due and payable by TGTX to Licensor for such Net Sales would be
$150,250,000, calculated as follows:

 

$1,000,000,000 x 6%  = $60,000,000

$950,000,000 x 9.5%  = $90,250,000

Total Royalty  = $150,250,000

 

(b)       With respect to Net Sales of all Licensed Products which are not
Covered under any Licensor Patent as of the time of the Net Sales: In addition,
as further consideration for Licensor’s grant of the Licensed Know-How rights
and licenses to TGTX hereunder, TGTX shall pay to Licensor a payment in the
nature of royalties on aggregate annual worldwide Net Sales of all such Licensed
Products by TGTX and its Affiliates and Sublicensees (but excluding Net Sales of
a given Licensed Product after its applicable Royalty Term), at the percentage
rates set forth below:

 

 

 

 

Annual Worldwide Net Sales of All (Uncovered) Licensed
Products per Calendar Year (US Dollars)  Incremental
Royalty Rate  For Net Sales of such Licensed Products from $0 up to and
including $1,000,000,000   4.5% For that portion of Net Sales of such Licensed
Products that is greater than $1,000,000,000   7.125%

 

Provided, that for the purposes of this Section 5.4(b), only *% of the Net Sales
of a Licensed Product in a country during the time period when a Generic Supply
of such Licensed Product is being lawfully Commercialized in such country, shall
be subject to such payment in the nature of royalties and the other *% shall be
excluded. A “Generic Supply” of a Licensed Product shall be deemed to be being
Commercialized in a country if and only if the aggregate market share of all
generic versions of such Licensed Product in such country in the calendar year
in question is at least *%.

 

(c)       In establishing the royalty/payment in the nature of royalties
structure hereunder, the Parties recognize, and TGTX acknowledges, the
substantial value of the various obligations being undertaken by Licensor under
this Agreement, in addition to the grant of the license under the Licensor
Patents, to enable the rapid and effective market introduction of the Licensed
Products. The Parties have agreed to the payment structure set forth herein as a
convenient and fair mechanism to compensate Licensor for these obligations.

 

(d)       For purposes of determining whether the Section 5.4(a) or Section
5.4(b) royalty/payment in the nature of royalties threshold has been attained,
only Net Sales that are subject to a Section 5.4(a) payment or a Section 5.4(b)
payment, respectively, shall be included in the total amount of Net Sales and
any Net Sales that are not subject to such a respective payment shall be
excluded. In addition, in no event shall the manufacture of a Licensed Product
give rise to a royalty/payment in the nature of royalties obligation until the
particular unit of Licensed Product is sold; but if Net Sales of a particular
unit of Licensed Product might or might not be subject to a royalty/payment in
the nature of royalties payment (e.g., manufactured in Country A where the
Royalty Term has expired but sold in Country B where the Royalty Term has not
expired), the sale shall be deemed to be subject to a royalty/payment in the
nature of royalties payment. For clarity, TGTX’s obligation to pay royalties to
Licensor under Section 5.4(a) is imposed only once with respect to the same unit
of Licensed Product regardless of the number of Licensor Patents pertaining
thereto or the number of times such Licensed Product has been sold or
transferred to a Person.

 

(e)       On a Licensed Product by Licensed Product and country-by-country
basis, upon expiration of the Royalty Term for a Licensed Product in a country,
the rights, licenses and sublicenses granted to TGTX hereunder with respect to
such Licensed Product in such country shall continue in effect but become fully
paid-up, royalty-free, transferable (to the extent not transferable previously),
perpetual and irrevocable.

 

5.5       Timing of Payment. Royalties/payments in the nature of royalties
payable under Section 5.4 shall be payable on actual Net Sales and shall accrue
at the time provided therefor by US GAAP. Royalty/payment in the nature of
royalties obligations that have accrued during a particular Calendar Quarter
shall be paid, on a Calendar Quarter basis, within 30 days after the end of each
Calendar Quarter during which the royalty/payment in the nature of royalties
obligation accrued; provided that within 50 days after the conclusion of each
Calendar Year TGTX shall provide notice to Licensor of any adjustments necessary
to account for any royalties/payment in the nature of royalties which were
overpaid or underpaid for such prior Calendar Year’s Calendar Quarters, and the
Parties shall promptly true-up based on such adjustments, provided however, the
lapse of such 50-day period shall not impact the right of TGTX to credit any
over-payments discovered during an audit against future royalties due under
Section 5.7 hereof.

 

 

* Confidential material redacted and filed separately with the Commission.

 

 

 

 

5.6         Royalty (Etc.) Reports and Records Retention. Within 60 days after
the end of each Calendar Quarter during which Licensed Products have been sold,
TGTX shall deliver to Licensor, together with the applicable royalty/payment in
the nature of royalties payment due, a written report, on a Licensed
Product-by-Licensed Product (and specifying non-Covered status, as applicable)
and country-by-country basis, of (a) gross invoiced (or otherwise charged)
amounts of sales, by TGTX and its Affiliates and Sublicensees, of Licensed
Products subject to royalty payments for such Calendar Quarter (and, if
non-Covered, subject to royalty/payment in the nature of royalties payments for
such Calendar Quarter), (b) amounts deducted by category (following the
definition of Net Sales) from such gross invoiced amounts to calculate Net
Sales, (c) Net Sales subject to royalty or royalty/payment in the nature of
royalties payments for such Calendar Quarter and Calendar Year to date and (d)
the corresponding royalty or royalty/payment in the nature of royalties. Such
report shall be deemed “Confidential Information” of TGTX subject to the
obligations of Article VII of this Agreement. For three years after each sale of
a Licensed Product (whether Covered or not), TGTX shall keep (and shall ensure
that its Affiliates and Sublicensees shall keep) complete and accurate records
of such sale in sufficient detail to confirm the accuracy of the royalty or
royalty/payment in the nature of royalties calculations hereunder.

 

5.7         Audits.

 

(a)       From the First Commercial Sale (of the first Licensed Product to have
a First Commercial Sale) until one Calendar Year after the conclusion of the
final Royalty Term, upon the written request of Licensor, and not more than once
in each Calendar Year, TGTX shall permit, shall cause its Affiliates and
Sublicensees to permit, an independent certified public accounting firm of
nationally recognized standing selected by Licensor (who has not been engaged by
Licensor to provide services in any other capacity at any time during the
three-year period before such selection), and reasonably acceptable to TGTX or
such Affiliate or Sublicensee, to have access to and to review, during normal
business hours upon reasonable prior written notice, the applicable records of
TGTX and its Affiliates or Sublicensees to verify the accuracy of the royalty
and payment in the nature of royalties reports and payments under this Article
V. Such review may cover: (i) the records for sales made in any Calendar Year
ending not more than three years before the date of such request, and (ii) only
those periods that have not been subject to a prior audit.

 

(b)       If such accounting firm concludes that additional royalties and/or
royalties/payment in the nature of royalties were owed during such period, TGTX
shall pay the additional royalties and/or royalties/payment in the nature of
royalties within 15 days after the date such public accounting firm delivers to
TGTX such accounting firm’s written report. If such accounting firm concludes
that an overpayment was made, such overpayment shall be fully creditable against
amounts payable in subsequent payment periods or at TGTX’s request, shall be
reimbursed to TGTX within 30 days after the date such public accounting firm
delivers such report to TGTX. If TGTX disagrees with such calculation, TGTX may
contest such calculation in writing – at which point the parties will work in
good faith to submit the matter to a mediator for resolution. If the parties are
unable to reach an agreement via mediation, then TGTX may initiate a court
action to seek to recover the additional payment or to increase the amount of
credit or reimbursement. Licensor shall pay for the cost of any audit by
Licensor, unless TGTX has underpaid Licensor by 5% or more for a specific
royalty period, in which case TGTX shall pay for the reasonable costs of audit.

 

 

 

  

(c)       Each Party shall treat all information that it receives under this
Section 5.7 in accordance with the confidentiality provisions of Article VII of
this Agreement, and shall cause its accounting firm to enter into an acceptable
confidentiality agreement with the audited Party obligating such firm to retain
all such financial information in confidence pursuant to such confidentiality
agreement, except to the extent necessary for a Party to enforce its rights
under the Agreement.

 

5.8         Mode of Payment and Currency. All payments to Licensor under this
Agreement, whether or not in respect of Net Sales or milestone events, shall be
made by deposit of US Dollars in the requisite amount to such bank account as
Licensor may from time to time designate by advance written notice to TGTX.
Conversion of sales or expenses recorded in local currencies to Dollars will be
performed in a manner consistent with TGTX’s normal practices used to prepare
its audited financial statements for external reporting purposes, provided that
such practices use a widely accepted source of published exchange rates. Based
on the resulting Net Sales in US Dollars, the then applicable royalties/payment
in the nature of royalties shall be calculated.

 

5.9         Late Payments. If a Party does not receive payment of any sum due to
it on or before the due date therefor, simple interest shall thereafter accrue
on the sum due to such Party from the due date until the date of payment at a
rate equal to the lesser of (a) US dollar one-month LIBOR plus 500 basis points,
or (b) the maximum rate permissible under applicable Law. Accrual and payment of
interest shall not be deemed to excuse or cure breaches of contract arising from
late payment or nonpayment.

 

5.10       Taxes. All amounts due hereunder exclude all applicable sales, use,
and other taxes and duties, and TGTX shall be responsible for payment of all
such taxes (other than taxes based on Licensor’s income) and duties and any
related penalties and interest, arising from the payment of amounts due under
this Agreement. The Parties agree to cooperate with one another and use
Commercially Reasonable Efforts to avoid or reduce tax withholding or similar
obligations in respect of royalties, payments in the nature of royalties,
milestone payments, and other payments made by TGTX to Licensor under this
Agreement. To the extent TGTX is required to withhold taxes on any payment to
Licensor, TGTX shall pay the amounts of such taxes to the proper governmental
authority in a timely manner and promptly transmit to Licensor official receipts
issued by the appropriate taxing authority and/or an official tax certificate,
or such other evidence as Licensor may reasonably request, to establish that
such taxes have been paid. Licensor shall provide TGTX any tax forms that may be
reasonably necessary in order for TGTX to not withhold tax or to withhold tax at
a reduced rate under an applicable bilateral income tax treaty. Licensor shall
use Commercially Reasonable Efforts to provide any such tax forms to TGTX at
least 45 days before the due date for any payment for which Licensor desires
that TGTX apply a reduced withholding rate. Each Party shall provide the others
with reasonable assistance to enable the recovery, as permitted by applicable
law, of withholding taxes, value added taxes, or similar obligations resulting
from payments made under this Agreement, such recovery to be for the benefit of
the Party bearing such withholding tax or value added tax. Licensor shall
indemnify and hold TGTX harmless from and against any penalties, interest or
other tax liability arising from any failure by TGTX (at the express request of
Licensor) to withhold or by reduction (at the express request of Licensor) in
its withholding.

 

 

 

  

ARTICLE VI

Inventions and Patents

 

6.1        Third Party Inventions and Know-How. As between Licensor and TGTX,
all inventions and Know-How made by a Third Party in the course of the
Development Program shall be owned by TGTX.

 

6.2        Patent Prosecution and Maintenance.

 

(a)       Licensor Patents. Licensor shall have the first right to file,
prosecute and maintain Licensor Patents in Licensor’s name.

 

(b)       New or Revised Applications. Licensor will, upon forming an intention
to file or revise one or more patent applications which would become or are
Licensor Patent Rights subject to the License grant in Article II, promptly
inform TGTX of such intention, and will provide TGTX with the opportunity to
comment on the content of such Licensor patent application before so filing or
revising. Licensor shall consider any such reasonable TGTX comments in good
faith.

 

(c)       Liaising. Licensor shall keep TGTX promptly and regularly informed of
the course of the filing and prosecution of Licensor Patents or related
proceedings (e.g. interferences, oppositions, reexaminations, reissues,
revocations or nullifications) in a timely manner, and to take into
consideration the advice and recommendations of TGTX.

 

(d)       Election Not to File/Prosecute/Maintain Licensor Patents. TGTX
acknowledges and agrees that Licensor shall not be required to file, prosecute
or maintain Patent Rights for the Licensor Patents, provided, however, if
Licensor decides to not pursue or maintain any such Patent Rights then Licensor
shall provide TGTX with at least 30 days’ notice before discontinuing the
filing, prosecution or maintenance of such Patent Rights so that TGTX may assume
responsibility for such activities in Licensor’s name but at TGTX’s expense. In
such event, TGTX will no longer owe any royalty obligation on account of such
(country-level) Patent Rights assumed by TGTX.

 

6.3        Certification under Drug Price Competition and Patent Restoration
Act. Each of Licensor and TGTX shall immediately give written notice to the
other of any certification of which they become aware filed pursuant to 21
U.S.C. Section 355(b)(2)(A) (or any amendment or successor statute thereto)
claiming that any Licensor Patents covering a Compound or a Licensed Product, or
the manufacture or use of each of the foregoing, are invalid or unenforceable,
or that infringement will not arise from the manufacture, use or sale in the US
of a Licensed Product by a Third Party.

 

6.4        Listing of Patents. TGTX shall have the sole right to determine which
of the Licensor Patents, if any, shall be listed for inclusion in the Approved
Drug Products with Therapeutic Equivalence Evaluations publication pursuant to
21 U.S.C. Section 355, or any successor Law in the United States, together with
any comparable Laws in any other country. Licensor will co-operate with TGTX to
list any of said Licensor Patents.

 

6.5        Enforcement of Patents.

 

(a)       Notice. If either Licensor or TGTX believes that a Licensor Patent is
being infringed in the Field, or that Licensor Know-How has been misappropriated
in the Field, by a Third Party or if a Third Party claims that any Licensor
Patent is invalid or unenforceable, the Party possessing such knowledge or
belief shall notify the other and provide it with details of such infringement,
misappropriation or claim that are known by such Party.

 

 

 

  

(b)       Right to Bring an Action for Licensor’s Patents. If such infringement,
misappropriation or claim is in one or more of the Major Markets in respect of
Licensor Patents, Licensor shall have the right to attempt to resolve such
infringement, misappropriation or claim, including by filing an infringement
suit, defending against or bringing a declaratory judgment action as to such
claim or taking other similar action (each, “initiation” of an “Action”) and
(subject to Section 6.5(e)) to compromise or settle such infringement or claim.
TGTX may, in its sole discretion and at its expense, join in any such Action and
in such case shall reasonably cooperate with Licensor. If Licensor does not
intend to initiate an Action, Licensor shall promptly inform TGTX. If Licensor
does not initiate an Action with respect to such an infringement or claim within
180 days following notice thereof, TGTX shall have the right to attempt to
resolve such infringement, misappropriation or claim, including by initiating an
Action, and (subject to Section 6.5(e)) to compromise or settle such
infringement, misappropriation or claim. At TGTX’s request, Licensor shall
immediately provide TGTX with all relevant documentation (as may be requested by
TGTX) evidencing that TGTX is validly empowered by the Licensor to initiate an
Action. Licensor shall be under the obligation to join TGTX in its Action if
TGTX determines that this is necessary to demonstrate “standing to sue.” The
Party initiating such Action shall have the sole and exclusive right to select
counsel for any suit initiated by it pursuant to this Section 6.5. If a Party
initiates an Action but then elects not to pursue the Action, the other Party
shall have the right (but not the obligation) to take over the Action, in which
case the second Party shall be deemed to have been the initiating Party.

 

(c)       Costs of an Action. Subject to the respective indemnity obligations of
the Parties set forth in Article IX and subject to Section 6.5(f), each Party
involved in an Action under Section 6.5(b) shall pay its own costs and expenses
incurred in connection with such Action.

 

(d)       Settlement. No Party shall settle or otherwise compromise (or resolve
by consent to the entry of judgment upon) any Action by admitting that any
Licensor Patent is to any extent invalid or unenforceable, or that any Licensor
Know-How is not protected or has not been misappropriated, without the other
Party’s prior written consent, and, in the case of Licensor, Licensor may not
settle or otherwise compromise (or resolve by consent to the entry of judgment
upon) an Action in a way that adversely affects or would be reasonably expected
to adversely affect any of TGTX’s rights or benefits hereunder with respect to
any Licensor Technology or any Licensed Product, without TGTX’s prior written
consent.

 

(e)       Reasonable Assistance. Each Party (if it is not the Party enforcing or
defending Licensor’s Patent Rights) shall provide reasonable assistance to the
other Party, including providing access to relevant documents and other evidence
and making its employees and consultants available, subject to the other Party’s
reimbursement of any reasonable out-of-pocket expenses incurred on an on-going
basis by the non-enforcing or non-defending Party in providing such assistance.

 

(f)       Distribution of Amounts Recovered. Any amounts recovered by the Party
initiating an Action pursuant to this Section 6.5, whether by settlement or
judgment, shall be allocated in the following order: (i) to reimburse the Party
initiating such Action for any costs incurred; (ii) to reimburse the Party not
initiating such Action for its costs incurred in such Action, if it joins (as
opposed to taking over) such Action; and (iii) the remaining amount of such
recovery shall (A) if TGTX initiated the Action, the remainder shall be
allocated to TGTX and the portion thereof attributable to “lost sales” shall be
deemed to be Net Sales for the Calendar Quarter in which the amount is actually
received by TGTX and TGTX shall pay to Licensor a royalty on such portion based
on the royalty rates set forth in Section 5.4(a), and the portion thereof not
attributable to “lost sales” shall be allocated to TGTX and (B) if Licensor
initiated the Action, the remainder shall be allocated to TGTX and the portion
thereof attributable to “lost sales” shall be deemed to be Net Sales for the
Calendar Quarter in which the amount is actually received by TGTX and TGTX shall
pay to Licensor a royalty on such portion based on the royalty rates set forth
in Section 5.4(a), and the portion thereof not attributable to “lost sales”
shall be allocated to 50% to Licensor and 50% to TGTX.

 

 

 

 

6.6           Third Party Actions Claiming Infringement.

 

(a)          Notice. If either Licensor or TGTX becomes aware of any Third Party
Action, such Party shall promptly notify the other of all details regarding such
claim or action that is reasonably available to such Party.

 

(b)          Right to Defend. TGTX shall have the right, at its sole expense,
but not the obligation, to defend a Third Party Action described in Section
6.6(a) and (subject to Section 6.6(f)) to compromise or settle such Third Party
Action. If TGTX declines or fails to assert its intention to defend such Third
Party Action within 40 days of receipt/sending of notice under Section 6.6(a),
then Licensor shall have the right, at its sole expense, to defend such Third
Party Action and (subject to Section 6.6(f)) to compromise or settle such Third
Party Action. The Party defending such Third Party Action shall have the sole
and exclusive right to select counsel for such Third Party Action.

 

(c)          Consultation. The Party defending a Third Party Action pursuant to
Section 6.6(b) shall be the “Controlling Party”. The Controlling Party shall
consult with the non-Controlling Party, pursuant to an appropriate joint defense
or common interest agreement, on all material aspects of the defense. The
non-Controlling Party shall have a reasonable opportunity for meaningful
participation in decision-making and formulation of defense strategy. The
Parties shall reasonably cooperate with each other in all such actions or
proceedings. The non-Controlling Party will be entitled to join the Third Party
Action and be represented by independent counsel of its own choice at its own
expense.

 

(d)          Appeal. In the event that a judgment in a Third Party Action is
entered against either Party and an appeal is available, the Controlling Party
shall have the first right, but not the obligation, to file such appeal. In the
event the Controlling Party does not desire to file such an appeal, it will
promptly, in a reasonable time period (i.e., with sufficient time for the
non-Controlling Party to take whatever action may be necessary) before the date
on which such right to appeal will lapse or otherwise diminish, permit the
non-Controlling Party to pursue such appeal at such non-Controlling Party’s own
cost and expense. If applicable Law requires the other Party’s involvement in an
appeal, the other Party shall be a nominal party in the appeal and shall provide
reasonable cooperation to such Party at such Party’s expense.

 

(e)          Costs of an Action. Subject to the respective indemnity obligations
of the Parties set forth in Article IX, the Controlling Party shall pay all
costs and expenses associated with such Third Party Action other than the
expenses of the other Party if the other Party elects to join such Third Party
Action (as provided in the last sentence of Section 6.6(c)).

 

 

 

  

(f)          No Settlement without Consent. Neither Licensor or TGTX shall
settle or otherwise compromise (or resolve by consent to the entry of judgment
upon) any Third Party Action by admitting that any Licensor Patent is to any
extent invalid or unenforceable or that any Licensed Product, or its use,
Development, importation, manufacture or sale infringes such Third Party’s
intellectual property rights, in each case without the other Party’s prior
written consent, and, in the case of Licensor, Licensor may not settle or
otherwise compromise (or resolve by consent to the entry of judgment upon) a
Third Party Action in a way that adversely affects or would be reasonably
expected to adversely affect TGTX’s rights and benefits hereunder with respect
to any Licensor Technology or any Licensed Product, without TGTX’s prior written
consent.

 

ARTICLE VII
CONFIDENTIALITY

 

7.1           Definitions. The Parties recognize that disclosures of
Confidential Information between them before the Effective Date were subject to
the Confidential Disclosure Agreement between them dated April 29, 2014. TGTX
and Licensor each recognizes that during the Term, it may be necessary for a
Party (the “Disclosing Party”) to provide Confidential Information (as defined
herein) to another Party (the “Receiving Party”) that is highly valuable, the
disclosure of which would be highly prejudicial to such Party. The disclosure
and use of Confidential Information shall be governed by the provisions of this
Article VII. Neither TGTX nor Licensor shall use the other’s Confidential
Information except as expressly permitted in this Agreement. For purposes of
this Agreement, “Confidential Information” means all information (including
information relating to the business, operations and products of a Party or any
of its Affiliates) disclosed by the Disclosing Party to the Receiving Party and
which reasonably ought to have been understood to be confidential and/or
non-public information at the time disclosed to the Receiving Party, or which is
designated in writing by the Disclosing Party as “Confidential” (or equivalent),
or which when disclosed orally to the Receiving Party is declared to be
confidential by the Disclosing Party and is so confirmed in a writing delivered
to the Receiving Party within 30 days after such oral disclosure, including but
not limited to any technical information, Know-How, trade secrets, or inventions
(whether patentable or not), that such Party discloses to another Party under
this Agreement, or otherwise becomes known to another Party by virtue of or that
relates to this Agreement.

 

7.2           Obligation. Licensor and TGTX agree that they will disclose the
other Party’s Confidential Information to its own (or its respective
Affiliate’s, or with respect to TGTX, its Sublicensees’) officers, employees,
consultants and agents only if and to the extent necessary to carry out their
respective responsibilities under this Agreement or in accordance with the
exercise of their rights under this Agreement, and such disclosure shall be
limited to the maximum extent possible consistent with such responsibilities and
rights. Except as set forth in the foregoing sentence, no Party shall disclose
Confidential Information of the other to any Third Party without the other’s
prior written consent. In all events, however, any and all disclosure to a Third
Party (or to any such Affiliate or Sublicensee) shall be pursuant to the terms
of a non-disclosure/nonuse agreement no less restrictive than this Article VII.
The Party which disclosed Confidential Information of the other to any Third
Party (or to any such Affiliate or Sublicensee) shall be responsible and liable
for any disclosure or use by such Third Party, Affiliate or Sublicensee (or its
disclosees) which would have violated this Agreement if committed by the Party
itself. No Party shall use Confidential Information of the other except as
expressly allowed by and for the purposes of this Agreement. Each Party shall
take such action to preserve the confidentiality of each other’s Confidential
Information as it would customarily take to preserve the confidentiality of its
own Confidential Information (but in no event less than a reasonable standard of
care). Upon expiration or termination of this Agreement, each Party, upon the
other’s request, shall return or destroy (at Disclosing Party’s discretion) all
the Confidential Information disclosed to the other Party pursuant to this
Agreement, including all copies and extracts of documents, within 60 days after
the request, except for one archival copy (and such electronic copies that exist
as part of the Party’s computer systems, network storage systems and electronic
backup systems) of such materials solely to be able to monitor its obligations
that survive under this Agreement.

 

 

 

  

7.3           Exceptions. The non-use and non-disclosure obligations set forth
in this Article VII shall not apply to any Confidential Information, or portion
thereof, that the Receiving Party can demonstrate by competent evidence:

 

(a)          at the time of disclosure is in the public domain;

 

(b)          after disclosure, becomes part of the public domain, by publication
or otherwise, through no fault of the Receiving Party or its disclosees;

 

(c)          is made available to the Receiving Party by an independent Third
Party without obligation of confidentiality; provided, however, that to the
Receiving Party’s knowledge, such information was not obtained by said Third
Party, directly or indirectly, from the Disclosing Party hereunder; or

 

(d)          is independently developed by an employee of the Receiving Party
not accessing or utilizing the Disclosing Party’s information.

 

In addition, the Receiving Party may disclose information that is required to be
disclosed by law, by a valid order of a court or by order or regulation of a
governmental agency including but not limited to, regulations of the SEC or in
the course of arbitration or litigation; provided, however, that in all cases
the Receiving Party shall give the other party prompt notice of the pending
disclosure and make a reasonable effort to obtain, or to assist the Disclosing
Party in obtaining, a protective order or confidential-treatment order
preventing or limiting (to the greatest possible extent and for the longest
possible period) the disclosure and/or requiring that the Confidential
Information so disclosed be used only for the purposes for which the law or
regulation required, or for which the order was issued.

 

7.4           Third Party Information. The Parties acknowledge that the defined
term “Confidential Information” shall include not only a Disclosing Party’s own
Confidential Information but also Confidential Information of a Third Party
which is in the possession of a Disclosing Party. TGTX and Licensor agree not to
disclose to the other any Confidential Information of a Third Party which is in
the possession of such Party, unless the other has given an express prior
written consent (which specifies the owner of such Confidential Information) to
receive such particular Confidential Information.

 

7.5           Press Releases and Disclosure. Either Party may make press
releases or public announcements regarding this Agreement or any matter covered
by this Agreement, including the Development or Commercialization of Licensed
Products, but such Party shall use Commercially Reasonable Efforts to provide
the text of such planned disclosure to the other Party sufficiently in advance
of the scheduled disclosure to afford such other Party a reasonable opportunity
to review and comment upon the proposed text and the timing of such disclosure,
and shall consider all reasonable comments of the other Party regarding such
disclosure. (Provided, that no Party shall use the trademark or logo of the
other Party, its Affiliates or their respective employee(s) in any publicity,
promotion, news release or public disclosure relating to this Agreement or its
subject matter, except as may be required by Law or required by the rules of an
applicable US national securities exchange or except with the prior express
written permission of such other Party, such permission not to be unreasonably
withheld.) Notwithstanding the above, once a public disclosure has been made,
either Party shall be free to disclose to third parties any information
contained in said public disclosure, without further pre-review.

 

 

 

  

7.6           Publication Rights. Until the first anniversary of the Effective
Date, the following restrictions shall apply with respect to possible disclosure
by either Party of the other Party’s Confidential Information relating to
Licensed Products in any publication or presentation. A Party (the “Publishing
Party”) shall provide the other Party with a copy of any proposed publication or
presentation at least 30 days before submission for publication by the
Publishing Party or its Affiliates so as to provide such other Party with an
opportunity to recommend any changes it reasonably believes are necessary to
continue to maintain the Confidential Information disclosed by the other Party
to the Publishing Party in accordance with the requirements of this Agreement.
The incorporation of such recommended changes shall not be unreasonably refused;
and if such other Party notifies (“Notice”) the Publishing Party in writing,
within 30 days after receipt of the copy of the proposed publication or
presentation, that such publication or presentation in its reasonable judgment
(a) contains an invention, solely or jointly conceived or reduced to practice by
the other Party, for which the other Party reasonably desires to obtain patent
protection or (b) could be expected to have a material adverse effect on the
commercial value of any Confidential Information disclosed by the other Party to
the Publishing Party, the Publishing Party shall prevent such publication or
delay such publication for a mutually agreeable period of time. In the case of
inventions, a delay shall be for a period reasonably sufficient to permit the
timely preparation and filing of a patent application(s) on such invention, and
in no event less than 90 days after the date of the Notice. In the case of
Confidential Information, any of the non-publishing Party’s Confidential
Information shall be deleted as requested. The Parties hereby agree that the
need for such publication review may diminish over time and agree, every six
months, to discuss and attempt to agree upon whether and/or when the obligations
under this Section 7.6 may be discontinued.

 

ARTICLE VIII
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

8.1           Representations and Warranties. (a) TGTX represents and warrants
to Licensor, and (b) Licensor represents and warrants to TGTX, in each case as
of the Effective Date:

 

(a)          Such Party is a corporation duly organized and validly existing
under the Laws of the jurisdiction of its incorporation;

 

(b)          Such Party has all right, power and authority to enter into this
Agreement, and to perform its obligations under this Agreement;

 

(c)          Such Party has taken all action necessary to authorize the
execution and delivery of this Agreement and the performance of its obligations
under this Agreement;

 

(d)          This Agreement is a legal and valid obligation of such Party,
binding upon such Party and enforceable against such Party in accordance with
the terms of this Agreement, except as enforcement may be limited by applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other Laws relating to or affecting creditors’ rights generally and by general
equitable principles;

 

 

 

  

(e)          To the best of such party’s knowledge, the execution, delivery and
performance of this Agreement by such Party does not and will not conflict with,
breach or create in any Third Party the right to accelerate, terminate or modify
any agreement or instrument to which such Party is a party or by which such
Party is bound;

 

(f)          To the best of such party’s knowledge, all consents, approvals and
authorizations from all governmental authorities or other Third Parties required
to be obtained by such Party in connection with the execution and delivery of
this Agreement have been obtained; and the execution, delivery and performance
of this Agreement by such Party does not and will not violate any Law of any
Governmental Body having authority over such Party;

 

(g)          No person or entity has or will have, as a result of the execution
and delivery of or as a result of the transactions contemplated by this
Agreement, any right, interest or valid claim against or upon such Party for any
commission, fee or other compensation as a finder or broker because of any act
by such Party or its Affiliates, agents or Sublicensees; and

 

(h)          To the best of such party’s knowledge, no agreement between it and
any Third Party is in conflict with the rights granted to any other party
pursuant to this Agreement.

 

8.2          Additional Representations and Warranties of Licensor. Licensor
represents and warrants to TGTX that:

 

(a)          No consent by any Third Party or Governmental Body is required with
respect to the execution and delivery of this Agreement by Licensor or the
consummation by Licensor of the transactions contemplated hereby;

 

(b)          No claims have been asserted or threatened by any Person (i)
challenging the validity, effective status, or ownership of Licensor Technology,
and/or (ii) to the effect that the use, reproduction, modification,
manufacturing, distribution, licensing, sublicensing, sale or any other exercise
of rights in any of Licensor Technology infringes or will infringe on any
intellectual property right of any Person; and no such claims have been asserted
or are threatened;

 

(c)          The Licensor Patents are subsisting and are not the subject of any
litigation procedure, discovery process, interference, reissue, reexamination,
opposition, appeal proceedings or any other legal dispute;

 

(d)          The Licensor Patents constitute all Patent Rights owned or
Controlled by Licensor that pertain directly and particularly to the research,
Development, manufacture, use and Commercialization of the Licensed Products as
currently envisioned; and

 

(e)          No Third Party has filed, pursued or maintained or threatened in
writing to file, pursue or maintain any claim, lawsuit, charge, complaint or
other action alleging that any Licensor Technology is invalid or unenforceable.

 

 

 

  

8.3           Disclaimer. Notwithstanding the representations and warranties set
forth in this Article VIII, TGTX acknowledges and accepts the risks inherent in
attempting to Develop and Commercialize any pharmaceutical product. There is no
implied representation that the Compounds can be successfully Developed or
Commercialized. The representations and warranties set forth in this Article
VIII are provided in lieu of, and EACH PARTY HEREBY DISCLAIMS, all other
warranties, express and implied, relating to the subject matter of this
Agreement, the Licensor Technology, the Compounds and/or the Licensed Products,
including but not limited to the implied warranties of merchantability and
fitness for a particular purpose, title and non-infringement of third party
rights. Each Party’s representations and warranties under this Agreement are
solely for the benefit of the other Party and may be asserted only by the other
Party and not by any Affiliate, Sublicensee or any customer of the other Party,
its Affiliates or Sublicensees. Each Party, its Affiliates and Sublicensees
shall be solely responsible for all representations and warranties that it, its
Affiliates or Sublicensees make to any customer, Affiliates or Sublicensees.

 

ARTICLE IX
INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE

 

9.1           Indemnification by TGTX. TGTX shall indemnify, defend and hold
Licensor and its Affiliates, and each of their respective employees, officers,
directors and agents (the “Licensor Indemnitees”) harmless from and against any
and all actions, judgments, settlements, liabilities, damages, penalties, fines,
losses, costs and expenses (including reasonable attorneys’ fees and expenses)
to the extent arising out of any Third Party claim, demand, action or other
proceeding (each, a “Claim”) related to (a) TGTX’s performance of its
obligations or exercise (by it or its Affiliates or Sublicensees) of its rights
under this Agreement; or (b) breach by TGTX of its representations and
warranties set forth in Article VIII; provided, however, that TGTX’s obligations
pursuant to this Section 9.1 shall not apply (x) to the extent such claims or
suits result from the gross negligence or willful misconduct of any of the
Licensor Indemnitees, or (y) with respect to claims or suits arising out of
breach by Licensor of this Agreement, including without limitation of its or
their representations and warranties set forth in Article VIII.

 

9.2           Indemnification by Licensor. Licensor shall indemnify, defend and
hold TGTX and its Affiliates and each of their respective agents, employees,
officers and directors (the “TGTX Indemnitees”) harmless from and against any
and all actions, judgments, settlements, liabilities, damages, penalties, fines,
losses, costs and expenses (including reasonable attorneys’ fees and expenses)
to the extent arising out of any and all Claims related to (a) Licensor’s
performance of its obligations or exercise (by it or its Affiliates) of its or
their rights under this Agreement; or (b) breach by Licensor of its
representations and warranties set forth in Article VIII; provided, however,
that Licensor’s obligations pursuant to this Section 9.2 shall not apply (x) to
the extent that such claims or suits result from the gross negligence or willful
misconduct of any of the TGTX Indemnitees or (y) with respect to claims or suits
arising out of a breach by TGTX of this Agreement, including without limitation
its representations and warranties set forth in Article VIII.

 

9.3           No Consequential, Etc., Damages. EXCEPT FOR DAMAGES FOR WHICH A
PARTY IS RESPONSIBLE PURSUANT TO ITS INDEMNIFICATION OBLIGATIONS SET FORTH IN
ARTICLE IX, EACH PARTY SPECIFICALLY DISCLAIMS ALL LIABILITY FOR AND SHALL IN NO
EVENT BE LIABLE TO ANY OTHER PARTY OR TO ANY OTHER PARTY’S AFFILIATES FOR ANY
INCIDENTAL, SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS,
LOST SAVINGS, INTERRUPTIONS OF BUSINESS OR OTHER DAMAGES OF ANY KIND OR
CHARACTER WHATSOEVER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
DEVELOPMENT PROGRAM OR THE LICENSED TECHNOLOGY OR RESULTING FROM THE
MANUFACTURE, HANDLING, MARKETING, SALE, DISTRIBUTION OR USE OF LICENSED
PRODUCTS, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.

 

 

 

  

9.4           Procedure.

 

(a)          The Party or other Person intending to claim indemnification under
this Article IX (an “Indemnified Party”) shall promptly notify the opposed Party
(the “Indemnifying Party”) of any Claim in respect of which the Indemnified
Party intends to claim such indemnification (provided, that no delay or
deficiency on the part of the Indemnified Party in so notifying the Indemnifying
Party will relieve the Indemnifying Party of any liability or obligation under
this Agreement except to the extent the Indemnifying Party has suffered actual
prejudice directly caused by the delay or other deficiency), and the
Indemnifying Party shall assume the defense thereof (with counsel selected by
the Indemnifying Party and reasonably satisfactory to the Indemnified Party)
whether or not such Claim is rightfully brought; provided, however, that an
Indemnified Party shall have the right to retain its own counsel and to
participate in the defense thereof, with the fees and expenses to be paid by the
Indemnified Party unless the Indemnifying Party does not assume the defense or
unless a representation of both the Indemnified Party and the Indemnifying Party
by the same counsel would be inappropriate due to the actual or potential
differing interests between them, in which case the reasonable fees and expenses
of counsel retained by the Indemnified Party shall be paid by the Indemnifying
Party. (Provided, that in no event shall the Indemnifying Party be required to
pay for more than one separate counsel no matter the number or circumstances of
all Indemnified Parties.)

 

(b)          If the Indemnifying Party shall fail to timely assume the defense
of and reasonably defend such Claim, the Indemnified Party shall have the right
to retain or assume control of such defense and the Indemnifying Party shall pay
(as incurred and on demand) the fees and expenses of counsel retained by the
Indemnified Party.

 

(c)          The Indemnifying Party shall not be liable for the indemnification
of any Claim settled (or resolved by consent to the entry of judgment) without
the written consent of the Indemnifying Party. Also, if the Indemnifying Party
shall control the defense of any such Claim, the Indemnifying Party shall have
the right to settle such Claim; provided, that the Indemnifying Party shall
obtain the prior written consent (which shall not be unreasonably withheld or
delayed) of the Indemnified Party before entering into any settlement of (or
resolving by consent to the entry of judgment upon) such Claim unless (i) there
is no finding or admission of any violation of law or any violation of the
rights of any person by an Indemnified Party, no requirement that the
Indemnified Party admit negligence, fault or culpability, and no adverse effect
on any other claims that may be made by or against the Indemnified Party and
(ii) the sole relief provided is monetary damages that are paid in full by the
Indemnifying Party and such settlement does not require the Indemnified Party to
take (or refrain from taking) any action.

 

(d)          The Indemnified Party, and its employees and agents, shall
cooperate fully with the Indemnifying Party and its legal representatives in the
investigations of any Claim.

 

(e)          Regardless of who controls the defense, each Party hereto shall
reasonably cooperate in the defense as may be requested.

 

9.5           Expenses. As the Parties intend complete indemnification, all
costs and expenses of enforcing any provision of this Article IX shall also be
reimbursed by the Indemnifying Party..

 

 

 

  

9.6           Limitation of Liability. EACH PARTY SHALL HAVE NO REMEDY, AND EACH
PARTY SHALL HAVE NO LIABILITY, OTHER THAN AS EXPRESSLY SET FORTH IN THIS
AGREEMENT. EXCEPT WITH RESPECT TO THE INDEMNIFICATION SPECIFICALLY PROVIDED IN
ARTICLE IX OR CLAIMS FOR NON-PAYMENT, IN NO EVENT SHALL A PARTY’S TOTAL
AGGREGATE LIABILITY FOR ALL CLAIMS ARISING OUT OF OR RELATED TO THIS AGREEMENT
EXCEED 50% OF THE AMOUNT PAID BY TGTX TO LICENSOR UNDER THIS AGREEMENT IN THE
CASE OF LICENSOR OR EXCEED ONE MILLION DOLLARS IN THE CASE OF TGTX. NO ACTION,
REGARDLESS OF FORM, ARISING OUT OF OR RELATED TO THIS AGREEMENT MAY BE BROUGHT
BY EITHER PARTY MORE THAN TWO YEARS AFTER SUCH PARTY HAS KNOWLEDGE OF THE
OCCURRENCE THAT GAVE RISE TO THE CAUSE OF ACTION OR AFTER EXPIRATION OF THE
APPLICABLE STATUTORY LIMITATIONS PERIOD, WHICHEVER IS SOONER.

 

9.7           Insurance. During the Term and for three years thereafter, TGTX
shall obtain and maintain, at its own cost and expense, product liability
insurance (or TGTX’s parent company shall obtain and maintain coverage for TGTX
under its own product liability insurance policies) in amounts, that are
reasonable and customary in the United States pharmaceutical and biotechnology
industry for companies engaged in comparable activities, with Licensor
identified as an additional named insured. It is understood and agreed that this
insurance shall not be construed to limit TGTX’s liability with respect to its
indemnification obligations hereunder. TGTX shall upon request provide to
Licensor upon request a certificate evidencing the insurance TGTX is required to
obtain and keep in force under this Section 9.7.

 

ARTICLE X
TERM AND TERMINATION

 

10.1         Term and Expiration. The term of this Agreement shall commence on
the Effective Date and, unless earlier terminated as provided in this Article X,
shall continue in full force and effect, on a country-by-country and Licensed
Product-by-Licensed Product basis until the Royalty Term in such country with
respect to such Licensed Product expires, at which time this Agreement shall
expire in its entirety with respect to such Licensed Product in such country.
(The “Term” shall mean the period from the Effective Date until the earlier of
termination of this Agreement as provided in this Article X or expiration of
this Agreement upon the expiration of the last-to-expire Royalty Term.) The
Parties confirm that subject to the foregoing sentence, this Agreement shall not
be terminated or invalidated by any future determination that any or all of the
Licensor Patents have expired or been invalidated.

 

10.2         Termination upon Material Breach. If a Party breaches any of its
material obligations under this Agreement, the Party not in default may give to
the breaching Party a written notice specifying the nature of the default,
requiring it to cure such breach, and, if desired, stating its intention to
terminate this Agreement if such breach is not cured. If such breach is not
capable of being cured, or is capable of being cured but nonetheless has not
within 45 days after the receipt of such notice been cured, then the Party not
in default shall (in addition to and not in lieu of all other available rights
and remedies) be entitled to at its option either (a) terminate this Agreement
immediately by written notice to the other Party, or (b) continue this Agreement
in full force and effect and seek any legal or equitable remedies that the
non-breaching Party may have. In case of a breach of an obligation to pay money,
which obligation to pay is not disputed in good faith, the cure period shall be
15 days instead of 45 days. The Parties agree that any failure by TGTX to pay
when due 100% of such portion of any amount of money owing from TGTX to Licensor
as is not disputed in good faith by TGTX (subject to the 15-day cure period)
shall conclusively be deemed to constitute a “material” breach. Notwithstanding
the foregoing provisions, in the event of a good-faith dispute as to whether any
alleged breach is in fact a breach, termination under this Section 10.2 in
respect of such alleged breach shall not take effect unless and until (y) such
dispute is resolved (by court or arbitration decision or otherwise) in favor of
the Party alleging the breach or (z) the breaching Party’s denial that the
alleged breach is in fact a breach ceases to be in good faith.

 

 

 

  

10.3         Termination for Bankruptcy. Licensor may terminate this Agreement
immediately upon written notice to TGTX in the event that TGTX has a petition in
bankruptcy filed against it that is not dismissed within 60 days of such filing,
files a petition in bankruptcy, or makes an assignment for the benefit of
creditors. If TGTX has before such filing or such assignment entered into a
written Sublicense which complies with Section 2.2, then the Sublicensee
thereunder shall have the right to, by but only by delivering to Licensor within
30 days after such termination a written election to do so and a written
assumption of all of TGTX’s past and future obligations, liabilities and duties
under this Agreement, convert its Sublicense into a direct of license from
Licensor of the same technology, for the same field and for the same territory,
as had been provided for in the Sublicense and otherwise on the same terms and
conditions as are set forth in this Agreement as if such Sublicensee were TGTX
hereunder. TGTX may terminate this Agreement immediately upon written notice to
Licensor in the event that Licensor has a petition in bankruptcy filed against
it that is not dismissed within 60 days of such filing, files a petition in
bankruptcy, or makes an assignment for the benefit of creditors.

 

10.4         Effects of Termination/Expiration.

 

(a)          Articles I (Definitions), VII (Confidentiality), IX
(Indemnification; Limitation of Liability; Insurance) and XI (Miscellaneous
Provisions) and Sections 5.6 (Royalty Reports and Records Retention), 5.7
(Audits), 5.9 (Late Payments), 5.10 (Taxes) and 10.4 (Effects of
Termination/Expiration) hereof shall survive the expiration or termination of
this Agreement for any reason. In addition, upon termination of this Agreement
by TGTX pursuant to Sections 10.2 or 10.3, then Section 6.6 (Third Party Actions
Claiming Infringement) shall survive the expiration or termination of this
Agreement.

 

(b)          Termination or expiration of this Agreement shall not relieve the
Parties of any liability that accrued hereunder before the effective date of
such termination or expiration. In addition, termination or expiration of this
Agreement shall not preclude either Party from pursuing all rights and remedies
it may have hereunder or at Law or in equity with respect to any breach of this
Agreement nor prejudice either Party’s right to obtain performance of any
obligation.

 

(c)          Upon termination of this Agreement by Licensor pursuant to Section
10.2, all licenses granted to TGTX hereunder shall terminate. If TGTX has before
the breach entered into a written Sublicense which complies with Section 2.2,
then the Sublicensee thereunder shall have the right to, by but only by
delivering to Licensor within 30 days after such termination a written election
to do so and a written assumption of all of TGTX’s past and future obligations,
liabilities and duties under this Agreement and a tender of funds or other
action to directly and fully cure TGTX’s breach, convert its Sublicense into a
direct of license from Licensor of the same technology, for the same field and
for the same territory, as had been provided for in the Sublicense and otherwise
on the same terms and conditions as are set forth in this Agreement as if such
Sublicensee were TGTX hereunder. In the event of termination by TGTX pursuant to
Section 10.2, the licenses granted to TGTX hereunder shall continue in effect
but become fully paid-up, royalty-free, transferable (to the extent not
transferable previously), perpetual and irrevocable.

 

 

 

  

ARTICLE XI
MISCELLANEOUS PROVISIONS

 

11.1       Relationship of the Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, joint venture or
employer-employee relationship between the Parties. No Party shall have any
right or authority to commit or legally bind any other Party in any way
whatsoever including, without limitation, the making of any agreement,
representation or warranty and each Party agrees to not purport to do so.

 

11.2       Assignment.

 

(a)          Any assignment not in accordance with this Section 11.2 shall be
void.

 

(b)          No assignment shall relieve the assigning Party of any of its
responsibilities or obligations hereunder.

 

(c)          TGTX may not transfer or assign its rights or licenses or delegate
its obligations under this Agreement, in whole or in part, by operation of law
or otherwise, to any Third Party without the prior written consent of Licensor,
which consent shall not be unreasonably withheld, conditioned or delayed;
provided that, notwithstanding the foregoing, TGTX may assign its rights or
licenses and/or delegate its obligations under this Agreement to an Affiliate or
to a successor to all or substantially all of TGTX’s assets, whether by way of
merger, sale of all or substantially all of its assets, sale of stock or
otherwise, without Licensor’s prior written consent. As a condition to any
permitted assignment hereunder, the assignee must expressly assume, in a writing
delivered to Licensor (and in a form reasonably acceptable to Licensor) all of
TGTX’s obligations under this Agreement, whether arising before, at or after the
assignment.

 

(d)          Licensor may not transfer or assign its rights or delegate its
obligations under this Agreement, in whole or in part, by operation of law or
otherwise, to any Third Party without the prior written consent of TGTX, which
consent shall not be unreasonably withheld, conditioned or delayed; provided
that, notwithstanding the foregoing, Licensor may, without TGTX’s prior written
consent, assign its rights and/or delegate its obligations under this Agreement
to an Affiliate, or to any person in a transaction in which Licensor also
assigns all of its right, title and interest in all or substantially all of its
Licensor Technology assets, including without limitation, intellectual property
rights, to the same party contemporaneous with the assignment of this Agreement,
or to a successor, whether by way of merger, sale of all or substantially all of
its assets, sale of stock or otherwise. As a condition to any permitted
assignment hereunder, the assignee must expressly assume, in a writing delivered
to TGTX (and in a form reasonably acceptable to TGTX) all of Licensor’s
obligations under this Agreement, whether arising before, at or after the
assignment.

 

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

 

 

 

  

11.4         Force Majeure. No Party shall be liable to any other Party or be
deemed to have breached or defaulted under this Agreement for failure or delay
in the performance of any of its obligations under this Agreement (other than
obligations for the payment of money) for the time and to the extent such
failure or delay is caused by or results from acts of God, earthquake, riot,
civil commotion, terrorism, war, strikes or other labor disputes, fire, flood,
failure or delay of transportation, omissions or delays in acting by a
governmental authority, acts of a government or an agency thereof or judicial
orders or decrees or restrictions or any other like reason which is beyond the
control of the respective Party. The Party affected by force majeure shall
provide the other Party with full particulars thereof as soon as it becomes
aware of the same (including its best estimate of the likely extent and duration
of the interference with its activities), and shall use Commercially Reasonable
Efforts to overcome the difficulties created thereby and to resume performance
of its obligations hereunder as soon as practicable, and the time for
performance shall be extended for a number of days equal to the duration of the
force majeure.

 

11.5         Entire Agreement of the Parties; Amendments. This Agreement and the
Schedules hereto constitute and contain the entire understanding and agreement
of the Parties respecting the subject matter hereof and cancel and supersede any
and all prior or contemporaneous negotiations, correspondence, understandings
and agreements between the Parties, whether oral or written, regarding such
subject matter (provided, that any and all previous nondisclosure/nonuse
obligations are not superseded and remain in full force and effect in addition
to the nondisclosure/nonuse provisions hereof). Each Party acknowledges that it
has not relied, in deciding whether to enter into this Agreement on this
Agreement’s expressly stated terms and conditions, on any representations,
warranties, agreements, commitments or promises which are not expressly set
forth within this Agreement. No modification or amendment of any provision of
this Agreement shall be valid or effective unless made in a writing referencing
this Agreement and signed by a duly authorized officer of each Party.

 

11.6         Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York, excluding application of
any conflict of laws principles.

 

11.7         Notices and Deliveries. Any notice, request, approval or consent
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been sufficiently given if and only if delivered in
person, by email or by express courier service to the Party to which it is
directed at its physical or email address shown below or such other physical or
email address as such Party shall have last given by such written notice to the
other Party.

 

If to TGTX, addressed to:

 

TG Therapeutics, Inc.
3 Columbus Circle, 15th Floor

New York, NY 10019

Attention: Michael S. Weiss, Executive Chairman, Interim President and Chief
Executive Officer

Email: msw@opuspointpartners.com

 

If to Licensor, addressed to:

 

General Counsel

Ligand Pharmaceuticals Incorporated

11119 North Torrey Pines Road, Suite 200

La Jolla, CA 92037

Email: cberkman@ligand.com

 

 

 

  

11.8         Waiver. No waiver of any provision of this Agreement shall be valid
or effective unless made in a writing referencing this Agreement and signed by a
duly authorized officer of the waiving Party. A waiver by a Party of any of the
terms and conditions of this Agreement in any instance shall not be deemed or
construed to be a waiver of such term or condition for the future, or of any
other term or condition hereof.

 

11.9         Rights and Remedies are Cumulative. Except to the extent expressly
set forth herein, all rights, remedies, undertakings, obligations and agreements
contained in or available upon violation of this Agreement shall be cumulative
and none of them shall be in limitation of any other remedy or right authorized
in law or in equity, or any undertaking, obligation or agreement of the
applicable Party.

 

11.10         Severability. This Agreement is severable. When possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision of this Agreement
is held to be to any extent prohibited by or invalid under applicable Law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement (or of such
provision). The Parties shall make a good faith effort to replace the invalid or
unenforceable provision with a valid one which in its economic effect is most
consistent with the invalid or unenforceable provision.

 

11.11         Third Party Beneficiaries. Except for the rights of Indemnified
Parties pursuant to Article IX hereof and the rights of Sublicensees set forth
in Sections 10.2 and 10.4(c), the terms and provisions of this Agreement are
intended solely for the benefit of each Party hereto and their respective
successors or permitted assigns and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other person, including without
limitation Sublicensees. The enforcement of any obligation of Licensor under
this Agreement shall only be pursued by TGTX or such Indemnified Party, and not
Sublicensees (except as set forth in Sections 10.2 and 10.4(c)).

 

11.12         No Implied License. No right or license is granted to TGTX
hereunder by implication, estoppel, or otherwise to any know-how, patent or
other intellectual property right owned or controlled by Licensor or its
Affiliates, except by an express license granted hereunder. No right or license
is granted to Licensor hereunder by implication, estoppel, or otherwise to any
know-how, patent or other intellectual property right owned or controlled by
TGTX or its Affiliates, except by an express license granted hereunder.

 

11.13         No Right of Set-Off. Except as expressly provided in Section
5.7(b) of this Agreement, TGTX shall not have a right to set-off any royalties,
milestones or other amount due to Licensor under this Agreement against any
damages incurred by TGTX for a breach by Licensor of this Agreement.

 

11.14         Equitable Relief. Each Party recognizes that the covenants and
agreements herein and their continued performance as set forth in this Agreement
are necessary and critical to protect the legitimate interests of the other
Party, that the other Party would not have entered into this Agreement in the
absence of such covenants and agreements and the assurance of continued
performance as set forth in this Agreement, and that a Party’s breach or
threatened breach of such covenants and agreements may cause the opposed Party
irreparable harm and significant injury, the amount of which will be extremely
difficult to estimate and ascertain, thus potentially making any remedy at law
or in damages inadequate. Therefore, each Party agrees that an opposed Party
shall be entitled to seek specific performance, an order restraining any breach
or threatened breach of Article VII and all other provisions of this Agreement,
and any other equitable relief (including but not limited to temporary,
preliminary and/or permanent injunctive relief). This right shall be in addition
to and not exclusive of any other remedy available to such other Party at law or
in equity.

 

 

 

  

11.15         Interpretation. The language used in this Agreement is the
language chosen by the Parties to express their mutual intent, and no provision
of this Agreement shall be interpreted for or against a Party because that Party
or its attorney drafted the provision.

 

11.16         Construction. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” All
references herein to Articles, Sections and Schedules shall be deemed references
to Articles and Sections of, and Schedules to, this Agreement unless the context
shall otherwise require.

 

11.17         Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original, and all of which together will be deemed to
be one and the same instrument. A facsimile or a portable document format (.pdf)
copy of this Agreement, including the signature pages, will be deemed an
original.

 

[the remainder of this page has been left blank intentionally]

 

 

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this License Agreement to be
executed and delivered by their respective duly authorized officers as of the
day and year first above written.

 

LIGAND PHARMACEUTICALS INCORPORATED

 

By: /s/ Matthew W. Foehr  

 

Name: Matthew W. Foehr  

 

Title: EVP/COO  

 

TG THERAPEUTICS, INC.

 

By: /s/ Michael S. Weiss  

 

Name: Michael S. Weiss  

 

Title: Executive Chairman, Interim President and Chief Executive Officer  

 

 

 

  

Schedule 1

 

Compounds*

 

 

* Confidential material redacted and filed separately with the Commission.

 

 

 

  

Schedule 2

 

Licensor Know-How*

 

 

* Confidential material redacted and filed separately with the Commission.

 

 

 

  

Schedule 3

 

Licensor Patent Rights*

 

 

* Confidential material redacted and filed separately with the Commission.