Exhibit 10.45

TEXT MARKED BY [* * *] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

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LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered into by and
between Apthera, Inc., a Delaware corporation having its principal offices at
8418 E. Shea Boulevard, Suite 100, Scottsdale, Arizona 85260 USA (the
“Licensor”), and Kwangdong Pharmaceutical Co., Ltd., a company incorporated in
Korea having its principal offices at 1577-4 Seocho-Dong, Seoul, Republic of
Korea (the “Licensee”), with such foregoing entities also referred to hereafter
individually as a “Party” or collectively as the “Parties.” The Agreement shall
be effective as of the Effective Date.

WHEREAS, the Licensor is the owner of or otherwise controls the Licensed
Intellectual Property (as defined below);

WHEREAS, Licensee desires to use, sell, offer for sale, and otherwise
commercialize the products using the Licensed Intellectual Property within the
Licensed Fields (as defined below);

WHEREAS, Licensee desires to acquire and the Licensor desires to grant to
Licensee a license under the Licensed Intellectual Property; and

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

1. Definitions.

1.1 Certain Definitions. The following terms shall have the following respective
meanings:

“Affiliates” shall mean, with respect to any specified Person, a Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified.

“Agreement” shall have the meaning set forth in the Introduction hereof.

“Bankruptcy” of either Party shall mean any of the following events:

(a) Such Party is unable to pay its debts as they come due or such Party fails
to have assets (both tangible and intangible) with a fair salable value in
excess of the amount required to pay the probable liability on its respective
existing debts for a period of more than ninety (90) days (“Insolvency”);

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(b) The institution by such Party of proceedings to be adjudicated as bankrupt,
or insolvent or the consent by such Party to the institution of bankruptcy or
Insolvency proceedings against such Party or the filing by such Party of a
petition or answer or consent seeking reorganization or release under any
applicable law, or the consent by such Party to the filing of any such petition
or the appointment of a receiver, liquidator, assignee, trustee, or other
similar official of such Party, or of any substantial part of such Party’s
property, or the making by such Party of an assignment for the benefit of
creditors, or the taking of action by such Party in furtherance of any such
action; or 8418 E. Shea Blvd., Suite 100, Scottsdale, AZ 85260 www.apthera.com

(c) The institution, consent, or the filing by (or against) such Party of any
composition, reorganization, or bankruptcy liquidation proceedings under
applicable law.

“Claims” shall mean any claim, action, arbitration, proceeding, review, audit,
hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, informal, or threatened).

“Confidential Information” shall have the meaning set forth in the Mutual
Confidential Disclosure Agreement.

“Disclosing Party” shall have the meaning set forth in the Mutual Confidential
Disclosure Agreement.

“Effective Date” shall mean the date on which this Agreement is signed by the
last Party to sign it.

“EMEA” shall mean the European Medicines Agency, and any successor thereto.

“FDA” shall mean the United States Food and Drug Administration, and any
successor thereto.

“Field of Use” shall mean for the treatment of breast cancer.

“Indemnified Party” shall mean the Party seeking indemnification.

“Indemnifying Party” shall mean the Party indemnifying the Indemnified Party.

“Infringes” shall mean impairs, dilutes, misappropriates, or otherwise violates.

“Insolvency” shall have the meaning set forth in the definition of Bankruptcy
hereof.

“Intellectual Property” shall mean all intellectual property rights of any
nature or form of protection of a similar nature or having equivalent or similar
effect to any of the foregoing, including, without limitation: (a) inventions,
discoveries, processes, designs, techniques, developments, technology, and
related improvements, whether or not patentable; (b) United States patents,
patent applications, divisional s, continuations, reissues, renewals,
registrations, confirmations, re-examinations, certificates of inventorship,
extensions, and the like, and any provision applications of any such patents or
patent applications, and any foreign or international equivalent of any of the
foregoing; (c) any word, name, symbol, color, designation, or device or

 

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any combination thereof, including, without limitation, any United States or
pending trademark, trade dress, service mark, service name, trade name, brand
name, logo, domain name, or business symbol, and any foreign or international
equivalent of any of the foregoing and all goodwill associated therewith;
(d) any work, whether or not registered in the United States or elsewhere, that
incorporate, is based upon, derived from, or otherwise uses any intellectual
property, including, without limitation, mechanical and electronic design
drawings (including, without limitation, computer-aided design files),
specification, software (including, without limitation, documentation and object
and source code listing), processes, technical or engineering data, test
procedures, schematics, writings, materials, products, artwork, packaging and
advertising materials; and (e) technical, scientific, and other know-how and
information, trade secrets, knowledge, technology, means, methods, processed,
practices, formulas, assembly procedures, computer programs, apparatuses,
specifications, books, records, production data, publications, databases,
reports, manuals, data and results, in written, electronic, or any other form
not known or hereafter developed.

“KFDA” shall mean the Korea Food & Drug Administration and any successor
thereto.

“Licensee” shall have the meaning set forth in the Introduction hereof.

“Licensee Financial Records” shall have the meaning set forth in Section 3.4
hereof.

“Licensee Indemnities” shall mean Licensee and its directors, officers,
employees, Affiliates and agents.

“Licensed Intellectual Property” shall mean any and all Intellectual Property
related to the Licensed Products as set forth on Exhibit B attached hereto, as
may be amended from time to time by the mutual written agreement of the Parties.

“Licensed Products” shall mean any product which: (a) in the absence of the
license granted in Section 2 hereof would infringe any of the Licensed
Intellectual Property; or (b) is made, at least in part, using any of the
Licensed Intellectual Property.

“Licensed Territory” shall mean the Republic of Korea.

“Licensor” shall have the meaning set forth in the Introduction hereof.

“Licensor Indemnitees” shall mean the Licensor and its directors, officers,
employees, Affiliates and agents.

“Losses” shall mean all Claims, losses, liabilities, damages, costs,
obligations, assessments, penalties and interest, demands and expenses
(including, without limitation, actual attorneys’ fees), whether direct or
indirect, known or unknown, absolute or contingent (including, without
limitation, settlement costs and any legal, accounting and other expenses for
investigation or defending any Claims).

“Mutual Confidential Disclosure Agreement” shall mean that certain Mutual
Confidential Disclosure Agreement entered into by and between the Licensor and
Licensee, dated April 2, 2009 attached hereto as Exhibit A.

 

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“Net Sales” shall mean Licensee’s invoice price for the sale of all Licensed
Products, less those taxes, duties, refunds, exchanges, promotional give-aways
and shipping charges actually incurred by Licensee and separately stated on such
invoice.

“Party” or “Parties” shall have the meaning set forth in the Introduction
hereof.

“Persons” shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization, or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d) of
the Securities Exchange Act of 1934, as amended.

“Phase III Clinical Trial” shall mean a clinical trial as defined in 21 C.F.R.
312.21(c), as may be amended from time to time, or any foreign equivalent
thereto. A Phase III Clinical Trial shall be deemed to have been initiated when
the first patient is dosed in such Phase III Clinical Trial.

“Quarterly Net Sales Report” shall have the meaning set forth in Section 3.5
hereof.

“Receiving Party” shall have the meaning set forth in the Mutual Confidential
Disclosure Agreement.

“Regulatory Authority” shall mean, with respect to any particular country,
territory or union, the governmental authority, body, commission, agency or
other instrumentality of such country, territory or union with the primary
responsibility for the evaluation or approval of pharmaceutical products before
such pharmaceutical product may be tested, marketed, promoted, distributed or
sold in such country, including such governmental bodies that have jurisdiction
over the pricing of such pharmaceutical product. The term “Regulatory Authority”
includes the KFDA, the FDA, and the European Agency for the Evaluation of
Medicinal Products or EMEA

“Reimbursement approval” shall mean the approval received for any Licensed
Product to be reimbursed by insurance. Once a Licensed Product is approved for
reimbursement by insurance, the royalty rate for Reimbursable Net Sales shall
apply to the Licensed Product.

“Reimbursable Net Sales” shall mean the Net Sales for any Licensed Products that
have been approved for reimbursement by insurance.

“Non-reimbursable Net Sales” shall mean the Net Sales for any Licensed Products
that have not been approved for reimbursement by insurance.

“Royalties” shall have the meaning set forth in Section 3.3 hereof.

“Term” shall have the meaning set forth in Section 12.1 hereof.

2. License Grant.

2.1 Grant of License. Subject to the terms and conditions of this Agreement, the
Licensor grants to Licensee and its Affiliates an exclusive, non-transferable
license, limited to the Licensed Territory and Field of Use, to the Licensed
Intellectual Property to use, sell, offer for sale, or otherwise commercially
exploit the Licensed Products supplied by Licensee within the Licensed Territory
and Field of Use for the Term of this Agreement.

 

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2.2 Right to Sub-license. Licensee shall not have the right to sub-license any
of the Licensed Intellectual Property in accordance with Section 2.1 hereof
without Licensor’s prior written consent and Licensor’s consent shall not be
unreasonably withheld.

2.3 Reservation of Rights. All rights in any Licensed Intellectual Property not
granted by the Licensor to Licensee in Sections 2.1 and 2.2 hereof are expressly
reserved to the Licensor and no additional licenses are granted or implied
hereunder.

3. Consideration and Reporting.

3.1 Equity Investment. Licensee shall make a [***] U.S. dollar ($[***]) equity
investment in Licensor payable as follows:

(a) a [***] U.S. dollar ($[***]) investment in Series B-1 Preferred Equity
Offering to be paid within fifteen (15) days after the Effective Date of the
Agreement, and

(b) a four hundred thousand U.S. dollar ($400,000.00) investment to be paid
within thirty (30) days from the date that the first patient is dosed in a Phase
III clinical study with the investment to be made in Licensor’s then current
preferred equity offering; provided that the conditions of the aforesaid
preferred equity offering shall be at least senior to or on parity with the
conditions of the Licensor’s most senior preferred equity at that time.

3.2 Milestone Payments. Licensee agrees to pay Licensor the following milestone
payments:

(a) [***] U.S. dollars ($[***]) to be paid within thirty (30) days of receiving
reimbursement approval in the Licensed Territory,

(b) [***] U.S. dollars ($[***]) to be paid within thirty (30) days after
Licensee achieves [***] U.S. dollars ($[***]) in Net Sales of all Licensed
Products, and

(c) [***] U.S. dollars ($[***]) to be paid within thirty (30) days after
Licensee achieves [***] U.S. dollars ($[***]) in Net Sales of all Licensed
Products.

3.3 Royalties. Licensee shall pay and the Licensor shall receive the following
percents of the Net Sales of all Licensed Products in the Licensed Territory for
the Term of this Agreement (the “Royalties”):

(a) for the first [***] U.S. dollars ($[***]) in Net Sales, Licensor shall
receive [***] ([***]%) of Reimbursable Net Sales and [***] ([***]%) of
Non-reimbursable Net Sales,

(b) for Net Sales over [***] U.S. dollars ($[***]) and up to [***] U.S. dollars
($[***]), Licensor shall receive [***] percent ([***]%) of Reimbursable Net
Sales and [***] percent ([***]%) of Non-reimbursable Net Sales,

(c) for Net Sales over [***] U.S. dollars ($[***]), Licensor shall receive [***]
percent ([***]%) of Reimbursable Net Sales and [***] percent ([***]%) of
Non-reimbursable Net Sales.

The Royalties due under this Section 3.3 shall be paid within sixty (60) days
after the end of the then-current quarter.

3.4 Financial Records and Auditing. Licensee shall, during the Term of this
Agreement and for a period of one (1) fiscal year thereafter, keep and maintain
financial statements and records relating

 

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exclusively to the subject matter of this Agreement solely for the purposes of
confirming the Net Sales of the Licensed Products to be reported according to
Section 3.5 hereof (the “Licensee Financial Records”). The Licensor, through an
independent certified public accountant (provided that such independent
certified public accountant is not compensated on a contingency basis), subject
to a written non-disclosure agreement with Licensee, shall have the right,
during normal business hours and upon ten (10) days advance written notice to
Licensee, and no more often than once per calendar year, to inspect the Licensee
Financial Records. Licensee shall have the right to have a representative
present at all such inspections. The Licensor warrants that all such audits
shall be carried out in a manner calculated not to unreasonably interfere with
Licensee’s conduct of business. Further, such certified public accountant agrees
to comply with all of Licensee’s safety and security requirements during any
visits to Licensee’s facilities. The cost of such inspection or audit shall be
borne by the Licensor, unless such inspection or audit reflects a discrepancy
adverse to the Licensor of five percent (5%) or more in the Net Sales reported
by Licensee. In the event that the inspection or audit reveals a discrepancy
adverse to the Licensor of five percent (5%) or more in the Net Sales reported
by Licensee in accordance with this Agreement, Licensee shall be responsible for
the reasonable costs of such inspection or audit. The Licensor acknowledges that
the Licensee’s Financial Records contain confidential trade information. Neither
the Licensor nor its representatives shall at any time communicate to others or
use any facts or information obtained as a result of such inspection or audit of
the Licensee Financial Records. Under no circumstances shall such independent
certified public accountant provide the Licensor with any information regarding
the identity of Licensee’s customers or provide the Licensor with any copies of
Licensee’s customer lists. The Licensor’s right to inspect the Licensee
Financial Records shall be limited to the current year for which Net Sales of
the Licensed Products are to be reported are payable and the immediately
preceding one (1) fiscal year period. Notwithstanding anything in this Agreement
to the contrary, such audit right shall extend only one (1) fiscal year beyond
termination of this Agreement.

3.5 Quarterly Reports. During the Term of this Agreement and for any calendar
quarter in which Licensee or its Affiliates have made any sales of the Licensed
Products, Licensee shall, within thirty (30) days after the end of each such
calendar quarter, furnish to the Licensor a written report showing the Net Sales
of the Licensed Products during such quarter (the “Quarterly Net Sales Report”)
including the following specific information: (a) total Net Sales of the
Licensed Products broken down into Reimbursable Net Sales and Non-reimbursable
Net Sales categories as may be reasonably requested by the Licensor, and
sufficient documentation to demonstrate the calculation of such Net Sales;
(b) the exchange rates used in determining the Net Sales in United States
dollars; and (c) a comparison of forecast to actual sales of the Licensed
Products, as customarily done by Licensee.

3.6 Payments. All payments due pursuant to this Agreement shall be made in
United States dollars. Any payments due pursuant to this Agreement unpaid within
the time period set forth in the corresponding Section shall bear interest at
the rate of one and one-half percent (1.5%) per month or the highest amount
permitted by law, whichever is lower, from the date when such payment was due
until payment in full, with interest, is made.

3.7 Withholding Taxes. Licensee shall make the payment of the milestone and
royalty payments owed to Licensor (defined in Sections 3.2 and 3.3) after
deduction of withholding taxes that are imposed on such payments under the laws
of the Licensed Territory and any of the bi-lateral tax treaties to which the
government of the Licensed Territory is a party. Licensee shall notify Licensor
of any such withholding taxes and the Parties shall cooperate to receive any
benefits under any double taxation treaty.

4. Ownership of Intellectual Property.

4.1 Ownership of Licensed Intellectual Property. Licensee acknowledges and
agrees, by and between the Parties, that the Licensor shall own all right, title
and interest in and to the Licensed Intellectual Property and Licensee shall
have no rights thereto beyond the licenses granted in Sections 2.1 and 2.2
hereof.

 

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4.2 Ownership of Improvements to Licensed Intellectual Property. Licensee
acknowledges and agrees, by and between the Parties, that Licensor shall own all
right, title and interest in and to any improvements in the Licensed
Intellectual Property regardless of which Party contributed to the improvements.
Licensor agrees to grant to Licensee and its Affiliates an exclusive,
non-transferable license, limited to the Licensed Territory and Field of Use, to
any such improvements in the Licensed Intellectual Property in accordance with
the same terms and conditions that apply to the licensed Intellectual Property.

5. Prosecution and Maintenance of Intellectual Property.

5.1 Prosecution and Maintenance of Licensed Intellectual Property. The Licensor
shall prosecute and maintain the Licensed Intellectual Property. The Licensor
shall be responsible for all costs, fees and other expenses related to such
prosecution and maintenance (including, without limitation, outside counsel
fees, patent, trademark and copyright office fees, annuities and maintenance
fees) with respect to any Licensed Intellectual Property. The Licensor shall
file, prosecute and maintain the Licensed Intellectual Property, at the
Licensor’s sole cost. The Licensor shall keep Licensee advised as to all
material developments with respect to all registrations and applications filed,
prosecuted and maintained under this Section 5.1.

6. Product Development and Clinical Trials.

6.1 Costs and Participation. Licensor shall be responsible for all product
development costs and all costs for clinical trials, and recruit enough patients
for filing with Regulatory Authorities in the Licensed Territory. Licensee shall
advise on regulatory aspects related to clearance of the sale of any Licensed
Product in the Licensed Territory and Licensee shall participate in Phase III
clinical trials in the Licensed Territory at sites mutually agreed upon by the
Parties.

6.2 Information and Data used for Regulatory Purposes. Licensor shall deliver to
Licensee documents, information and data which are and will remain in Licensor’s
possession and owned or controlled by Licensor and its Affiliates, which
Licensor deems may be reasonably needed by Licensee in developing, registering,
and marketing the Licensed Product in the Licensed Territory. During the term of
this Agreement, Licensor shall from time to time inform Licensee of new
information which Licensor may deem to be useful for Licensee in the development
and sale of the Licensed Product in the Licensed Territory.

7. Cost and Supply of Licensed Product.

7.1 Cost. Licensor shall supply Licensee with Licensed product known as the
commercial product NeuVax (E75 peptide in combination with GM-CSF) as a packaged
finished product at a price not to exceed [***] U.S. dollars ($[***]) per dose
under the terms of a Supply Agreement to be agreed upon by both Parties after
the Licensed Product NeuVax is approved for sale in the Licensed Territory. This
price can be adjusted for inflation on an annual basis based on rates set by the
U.S. Bureau of Labor Statistics. If an adjuvant biologically similar to GM-CSF
becomes available and approved to be packaged with E75, Licensor will supply
such packaged product to Licensee at Licensor’s cost plus [***] ([***]%) of
Licensor’s costs, provided that the sale of the commercial product NeuVax has
been launched by Licensee in the Licensed Territory for a period of at least
five (5) years.

7.2 Supply. Licensor agrees to supply Licensee with the Licensed Product having
more than 90% of shelf life remaining, within 3 months after its acceptance of
the orders. Licensor shall guarantee the Licensed Product was manufactured in a
qualified GMP facility of Licensor or any of its subcontractors.

 

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8. Representations, Warranties and Covenants.

8.1 Representations and Warranties.

(a) The Licensor’s Representations and Warranties. The Licensor represents and
warrants as follows:

(i) The Licensor has all necessary legal power, right and authority to enter
into and perform its obligations under this Agreement and has taken all
necessary corporate action under the laws of the State of Delaware and its
certificate of incorporation and bylaws to authorize the execution of this
Agreement and the consummation of the transactions contemplated hereunder.

(ii) No Claim has been brought or is threatened by any third party with respect
to any Licensed Intellectual Property that alleges that such Licensed
Intellectual Property Infringes the rights of any third party.

(iii) The Licensor has not threatened or initiated any Claim against any third
party alleging that such third party Infringes any Licensed Intellectual
Property.

(iv) The Licensor has taken all reasonable measures to protect and preserve the
security, confidentiality and value of all Licensed Intellectual Property,
including, without limitation, trade secrets and other Confidential Information.

(v) The Licensor has not previously granted any rights to any third party that
are inconsistent with the rights granted to Licensee under this Agreement.

(b) Licensee’s Representations and Warranties. Licensee represents and warrants
that Licensee has all necessary legal power to enter into and perform its
obligations under this Agreement and has taken all necessary corporate action
under all applicable Korean laws and its certificate of incorporation and bylaws
to authorize the execution of this Agreement and the consummation of the
transactions contemplated hereunder.

8.2 Covenants.

(a) The Licensor’s Covenants. The Licensor covenants as follows:

(i) The Licensor will comply with all applicable laws and regulations with
respect to the Licensed Intellectual Property, the Licensed Products, and this
Agreement.

(ii) The Licensor will take every reasonable action to preserve the security,
confidentiality and value of all Licensed Intellectual Property.

(iii) The Licensor will ensure that all of its employees, consultants, or agents
involved in creation of the Licensed Intellectual Property on behalf of the
Licensor shall assign to the Licensor all of their right, title and interest in
and to such Licensed Intellectual Property.

(iv) The Licensor will not grant for the Term of this Agreement any rights to
any third party that are inconsistent with the rights granted to Licensee under
this Agreement.

(v) The Licensor will collaborate with the Licensee in good faith if the
Licensee requests any supports for the successful marketing of the Licensed
Products in the Licensed Territory.

(b) Licensee’s Covenants. Licensee covenants that it will comply with all
applicable laws and regulations with respect to the Licensed Intellectual
Property and the Licensed Products.

 

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8.3 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 8 HEREOF, NO PARTY
MAKES ADDITIONAL WARRANTIES, REPRESENTATIONS, OR COVENANTS EXPRESS, IMPLIED, OR
STATUTORY AS TO ANY OTHER MATTER WHATSOEVER.

9. Infringement.

9.1 Notice of Infringement. Each Party shall immediately notify the other Party
in writing of any known or alleged infringement(s) of the Licensed Intellectual
Property and the Licensed Products and shall immediately inform the other Party
of any evidence of any such infringement(s).

9.2 Enforcement of Licensed Intellectual Property. The Licensor shall have the
first right, but not the obligation, to enforce any of the Licensed Intellectual
Property against any third party. Licensee agrees to join as a party plaintiff
in any Claim initiated by the Licensor if requested by the Licensor, at the sole
cost of the Licensor, and Licensee shall provide the Licensor all assistance the
Licensor may reasonably request in any such Claim, at the sole cost of the
Licensor. In the event that the Licensor fails or decides not to enforce such
Licensed Intellectual Property within thirty (30) days after written notice of
such possible infringement, the Licensor shall give Licensee written notice of
the decision or failure to take action and Licensee shall have the right, but
not the obligation to undertake such Claim in its own name, on its own behalf,
and at its own cost; provided, however, that the Licensor shall join as a party
plaintiff in any such Claim initiated by Licensee if requested by Licensee, at
the equal share of the cost of Licensor and Licensee, and the Licensor shall
provide Licensee all assistance Licensee may reasonably request in any such
Claim, at the equal share of the cost of Licensor and Licensee.

9.3 No Settlement. Notwithstanding anything in this Agreement to the contrary,
under no circumstances shall either Party settle or resolve any Claims of or by
the Licensed Intellectual Property and/or the Licensed Products without the
express written consent of the other Party, of which such consent shall not be
unreasonably withheld, delayed, or conditioned.

10. Indemnification.

10.1 Indemnification by Licensor. The Licensor shall defend, indemnify and hold
harmless Licensee Indemnitees from and against any and all Losses which any
Licensee Indemnitee may suffer or incur by reason of:

(a) Any breach by the Licensor of any of its representations, warranties,
agreements, or covenants contained in this Agreement or by the willful
misconduct of the Licensor, including, without limitation, by way of any
misappropriation, willful misstatement, or fraud on any government authority;

(b) Any third party Claim of harm or injury arising out of, related to, or in
connection with a product recall or the manufacture of the Licensed Products
that is attributable to any Licensed Product provided by Licensor.

10.2 Indemnification by Licensee. Licensee shall defend, indemnify and hold
harmless the Licensor Indemnitees from and against any and all Losses, which any
Licensor Indemnitee may suffer or incur by reason of:

(a) Any breach by Licensee of its representations, warranties, agreements, or
covenants contained in this Agreement or by the willful misconduct of Licensee,
including, without limitation, by way of any misappropriation, willful
misstatement, or fraud on any government authority.

 

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10.3 Indemnification Procedures.

(a) The Indemnified Party pursuant to this Article 10 shall promptly notify the
Indemnifying Party, in writing, of such Claim describing such Claim in
reasonable detail; provided, however, that the failure to provide such written
notice shall not affect the obligations of the Indemnifying Party unless and
only to the extent it is actually prejudiced thereby.

(b) The Indemnifying Party shall have a right within thirty (30) days after
receipt of such written notice to take control, through counsel of its own
choosing (but reasonably acceptable to the Indemnified Party) and at its own
cost, the settlement, or defense thereof unless: (i) the Indemnifying Party is
also a party to the proceeding and the Indemnified Party determines in good
faith that joint representation would be inappropriate; or (ii) the Indemnifying
Party fails to provide reasonable assurance to the Indemnified Party of its
financial capacity to defend such proceeding, and provide indemnification with
respect thereto. The Indemnifying Party shall not, without the written consent
of the Indemnified Party (which consent shall not be unreasonably withheld,
delayed, or conditioned), settle or compromise any Claim, unless such settlement
or compromise includes an unconditional release of the Indemnified Party. If the
Indemnifying Party does not notify the Indemnified Party within thirty (30) days
after the receipt of written notice of a Claim of indemnity hereunder that it
elects to undertake the defense thereof, the Indemnified Party shall have the
right to contest, settle, or compromise the Claim but shall not pay or settle
any such Claim without the consent of the Indemnifying Party (which consent
shall not be unreasonably withheld, delayed, or conditioned).

(c) The Indemnifying Party and the Indemnified Party shall cooperate fully in
all aspects of any investigation, defense, pre-trial activities, trial,
compromise, settlement, or discharge of any Claim in respect of which indemnity
is sought pursuant to this Article 10, including, without limitation, providing
the other Party with reasonable access to employees and officers (including,
without limitation, as witnesses) and other information. The remedies provided
in this Article 10 shall not be exclusive of or limit any other remedies that
may be available to the Indemnified Parties.

(d) The Indemnifying Party shall reimburse the Indemnified Party for all Losses
within five (5) days of receipt of written notice from the Indemnified Party
setting forth the amount of such Losses. The Indemnified Party shall also have a
right to offset such Losses against any payment due to the Indemnifying Party.

11. Confidential Information.

11.1 Confidential Information Generally. The existence and terms and conditions
of this Agreement are confidential, and neither Party may make any disclosures
regarding this Agreement without the express prior written consent of the other
Party, except:

(a) As may be required by law or legal process;

(b) During the course of litigation so long as the disclosure of such terms and
conditions are restricted in the same manner as is the confidential information
of other litigating parties and so long as: (i) the restrictions are embodied in
a court-entered protective order; and (ii) the Disclosing Party informs the
Receiving Party in writing in advance of the disclosure; or

(c) In confidence to its legal counsel, accountants, banks and financing sources
and their advisors solely in connection with complying with financial
transactions.

11.2 Restrictions on Confidential Information.

(a) The Receiving Party agrees not to disclose any Confidential Information of
the Disclosing Party and to maintain such Confidential Information in strictest
confidence, to take all reasonable precautions to prevent its unauthorized
dissemination and to refrain from sharing any or all of the

 

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information with any third party for any reason whatsoever except as required by
court order, both during and after the Term of this Agreement. Without limiting
the scope of this duty, the Receiving Party agrees to limit its internal
distribution of the Confidential Information of the Disclosing Party only on a
“need to know” basis solely in connection with the performance of this
Agreement, and to take steps to ensure that the dissemination is so limited.

(b) The Receiving Party agrees not to use the Confidential Information of the
Disclosing Party for its own benefit or for the benefit of any third party other
than in accordance with the terms and conditions of this Agreement.

(c) All the Licensor’s Confidential Information remains the sole property of the
Licensor and all Licensee’s Confidential Information remains the sole property
of Licensee.

(d) Upon written request of the Disclosing Party, or upon the expiration or
other termination of this Agreement for any reason whatsoever, the Receiving
Party agrees to return to the Disclosing Party all such provided Confidential
Information, including, without limitation, all copies thereof.

11.3 Survival. The obligations set forth in this Article 11 shall apply
throughout the Term of this Agreement and for a period of five (5) years after
the termination or expiration of this Agreement or any extensions hereof.

12. Term and Termination.

12.1 Term. This Agreement shall commence on the Effective Date, and, unless
extended by the mutual written agreement of the Parties (and then only upon the
terms and conditions set forth herein) or sooner terminated in accordance with
Section 12.2 hereof, shall continue for a period of 15 years from the launch of
the sale of any Licensed Product in the Licensed Territory or until the
expiration or invalidation of the last valid claim in the Licensed Intellectual
Property in the Licensed Territory, whichever occurs later (the “Term”). This
Agreement shall be automatically renewed thereafter on a yearly basis, unless
terminated pursuant to the terms of this Agreement.

12.2 Early Termination. Upon the occurrence of any of the following, this
Agreement may be terminated by:

(a) Either Party immediately upon written notice to the other Party if the other
Party breaches any material provision of this Agreement and such breach is:
(i) incapable of cure; or (ii) capable of cure, but not cured within ninety
(90) days of the breaching Party’s receipt of written notice of such default
from the non-breaching Party.

(b) Either Party immediately upon the Bankruptcy of the other Party.

(c) The Licensor immediately if Licensee does not pay the Consideration as
described in Article 3 hereof within ninety (90) days of the Licensor’s written
notice of such non-payment.

(d) The Licensee if no Licensed Product is approved for sale in the Licensed
Territory.

(e) Mutual written agreement of the Parties.

12.3 Effect of Early Termination: Upon expiration or early termination of this
Agreement by the Licensor or Licensee pursuant to Section 12.2 hereof, the
rights granted hereunder shall immediately terminate; provided, however, that
Licensee shall be permitted to use the Licensed Intellectual Property for a

 

11

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period of three (3) months to complete deliveries on contracts in force as of
the date of termination, to sell and to otherwise dispose of any existing
inventory of the Licensed Products provided under this Agreement.

12.4 Survival. Expiration or early termination of this Agreement shall not
relieve either Party of its obligations incurred prior to the expiration or
early termination. The following provisions shall survive expiration or early
termination of this Agreement or of any extensions thereof for a period of five
(5) years or for such period of time as indicated in the surviving provision:
Sections 4, 8, 10, 11, 13 hereof, Section 12.3 hereof and this Section 12.4.

13. Miscellaneous.

13.1 Notices. All notices, requests, demands and other communications required
to or permitted to be given under this Agreement shall be in writing and shall
be conclusively deemed to have been delivered: (a) when hand delivered to the
other Party; (b) when received when sent by facsimile at the address and number
set forth below (provided, however, any notice given by facsimile shall be
deemed received on the next business day if such notice is received after 5:00
p.m. recipient’s time, or on a non-business day); (c) three (3) business days
after the same have been deposited in a United States post office with first
class or certified mail return receipt requested postage prepaid and addressed
to the Parties as set forth below; or (d) the next business day after the same
have been deposited with a nationally recognized overnight delivery service
(i.e., Federal Express, DHL, or United Parcel Service) postage prepaid,
addressed to the Parties as set forth below with next business-day delivery
guaranteed. For the purposes of this Agreement, the delivery addresses of the
Parties are:

If to the Licensor:

Apthera, Inc.

8418 E. Shea Boulevard

Suite 100

Scottsdale, Arizona 85260

USA

Attention: Robert E. Kennedy, CFO

Phone: (480) 348-9705

Facsimile: (480) 348-9709

If to Licensee:

Kwangdong Pharmaceutical Co., Ltd.

1577-4 Seocho-Dong

Seoul, Republic of Korea

Attention: [Bo Hyung Lee, Director]

Phone: [82-2-2025-1360]

Facsimile: [82-2-2025-1350]

Each Party shall make an ordinary, good faith effort to ensure that it will
accept or receive notices that are given in accordance with this Section 11.1,
and to ensure that the receiving Party actually receives such notice. A Party
may change or supplement the addresses given above, or designate additional
addresses by giving the other Party written notice of the new address in the
manner set forth above. Any correctly addressed notice that is refused,
unclaimed, or undeliverable because of an act or omission of the Party to be
notified shall be deemed effective as of the first date that said notice was
refused, unclaimed, or deemed undeliverable by the postal authorities,
messenger, or overnight delivery service.

13.2 Entire Agreement. This Agreement, together with any exhibits and schedules
attached hereto and incorporated herein by this reference, and any other
agreements entered into pursuant to

 

12

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this Agreement, constitute the entire agreement between the Parties pertaining
to the subject matter contained herein, and supersede all prior or
contemporaneous agreements, representations and understandings of the Parties.

13.3 Delays or Omissions. No delay or omission to exercise any right, power, or
remedy accruing to either Party upon any breach or default under this Agreement
shall impair any such right, power, or remedy of such Party, nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent, or approval of any kind or character on the part of either Party of any
breach or default under this Agreement, or any waiver on the part of either
Party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing or
as provided in this Agreement. All remedies, either under this Agreement or by
law or otherwise afforded to either Party, shall be cumulative and not
alternative.

13.4 Severability. This Agreement shall be deemed severable, and the invalidity
or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Agreement or of any other term or provision
hereof. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the Parties intend that there shall be added as a part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible to be valid and enforceable.

13.5 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with the internal laws of the State of Arizona without
regard to its conflict of laws provisions. The Parties expressly and irrevocably
consent to the exclusive personal jurisdiction and venue of the federal courts
sitting within the County of Maricopa, Arizona, unless no federal subject matter
jurisdiction exists, in which case the Parties consent to the exclusive
jurisdiction and venue in the Superior Court of Maricopa County, Arizona. The
Parties expressly waive all defenses of lack of personal jurisdiction and forum
non conveniens with respect to the federal and state courts sitting within the
County of Maricopa, Arizona.

13.6 Commercial Impracticability. No Party shall be liable for any failure to
perform its obligations in connection with any action described in this
Agreement, only if such failure directly results from and is caused by any act
of God, riot, war, terrorist attack, civil unrest, flood, earthquake, or other
causes beyond such Party’s reasonable control, excluding a Party’s financial
condition or negligence.

13.7 Successors and Assigns; No Third Party Beneficiaries. Neither this
Agreement nor any of the rights or obligations arising under this Agreement may
be assigned or transferred by either Party, in whole or in part, without the
prior written consent of the other Party, and any attempted assignment or
transfer without such written consent shall be of no force or effect.

13.8 Entire Agreement; Amendment. Neither this Agreement nor any term hereof may
be amended, waived, discharged, or terminated other than by a written instrument
signed by the Party against whom enforcement of any such amendment, waiver,
discharge, or termination is sought.

13.9 Construction; Headings. The article, section and subsection headings in
this Agreement are inserted for convenience only and will not affect in any way
the meaning or interpretation of this Agreement. The language of this Agreement
shall be construed simply and according to its fair meaning, and shall not be
construed for or against any Party hereto as a result of the source of its
draftsmanship.

13.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one instrument. Signatures transmitted electronically
or by facsimile will be deemed original signatures.

 

13

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13.11 Independent Contractor. Each Party is an independent contractor and is not
and shall not be deemed to be the legal representative or agent of the other
Party for any purpose whatsoever, and neither Party is authorized by the other
Party to transact business, incur obligations (express or implied), bill goods,
or otherwise act in any manner, in the name or on behalf of the other Party, or
to make any promise, warranty, or representation in the name or on behalf of the
other Party except as permitted in this Agreement.

13.12 Injunctive Relief and Equitable Relief. The Parties acknowledge that a
breach of any of the provisions set forth in Article 11 hereof shall result in
irreparable and continuing damage for which there shall be no adequate remedy at
law, and the non-breaching Party shall be entitled to injunctive relief and/or a
decree for specific performance, and such other relief as may be proper
(including, without limitation, monetary damages if appropriate).

13.13 Further Assurances. Each Party hereto shall promptly execute and deliver
such further instruments and take such further actions as any other Party hereto
may reasonably require or request in order to carry out the intent of this
Agreement and to consummate the transactions contemplated hereby.

[The remainder of this page has been intentionally left blank; signature page
follows.]

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the Effective Date.

 

APTHERA, INC. By:  

/s/ Robert E. Kennedy

Name:   Robert E. Kennedy Title:   CFO Date:   April 22, 2009 KWANGDONG
PHARMACEUTICAL CO., LTD. By:  

/s/ Soo Boo Choi

Name:   Soo Boo Choi Title:   Chairman Date:   April 30, 2009

 

15

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EXHIBIT A

Non-Disclosure Agreement

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MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT

This MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT (hereinafter referred to as
“Agreement”), effective as of the 2nd day of April, 2009 (the “Effective Date”),
is made by and between:

Kwangdong Pharmaceutical Co., Ltd., a Korean corporation having its principal
offices at 1577-4 Seocho-Dong, Seoul, Republic of Korea, hereinafter referred to
as “COMPANY”

and

Apthera, Inc., a Delaware corporation having its principal place of business at
8418 Shea Blvd., Suite 100, Scottsdale, Arizona 85260-6667, hereinafter referred
to as “Apthera”

Hereinafter sometimes individually referred to as ‘Party’ and collectively as
‘Parties’. The party disclosing the Information shall hereinafter referred to as
the ‘Disclosing Party’ and the party receiving such Information shall be
referred to as the ‘Receiving Party’

WITNESSETH

WHEREAS, Apthera and COMPANY wish to discuss a potential business, scientific
and/or technical relationship between them (hereinafter referred to as the
“Purpose”); and

WHEREAS, during the course of such discussions, it may become desirable or
necessary for the Parties hereto to disclose to each other certain technical,
commercial or business information of a proprietary or confidential nature
(hereinafter referred to as “Confidential Information”); and

WHEREAS, Parties hereto are willing to provide for the conditions of such
disclosure of Confidential Information and the rules governing the use and the
protection thereof;

NOW, THEREFORE, Apthera and COMPANY, intending to be legally bound, hereby agree
as follows:

 

1. As used in this Agreement the term “Confidential Information” shall mean all
information including, where appropriate and without limitation, licenses,
business plans and data (including financial, manufacturing, marketing,
operations and strategic information), other data (including engineering,
scientific and technical information), patent disclosures, patent applications,
unpublished findings, know how, techniques, processes, structures, methods,
models, specifications, designs, drawings, algorithms, formulae, programs,
samples, compositions, biological material, and compounds relating to the same
disclosed by the Disclosing Party to the Receiving Party or obtained by the
Receiving Party through observation or examination of information or any means
of disclosing such Proprietary Information that the Disclosing Party hereto may
select to use during the life of this Agreement, but only to the extent that
such information is maintained as confidential by the Disclosing Party and is
marked or otherwise identified as “Confidential” when disclosed to the Receiving
Party. In the case of information given verbally, such Confidential Information
must be reduced to written form within 30 days of disclosure and likewise marked
“Confidential”.

 

2. During the period in which this Agreement is effective and also during the
period stated in Section 13 below, each Party is obliged to treat all
Confidential Information supplied or disclosed by the Disclosing Party as
strictly confidential and secret. Each Party shall use such Confidential
Information only for the Purpose and shall safeguard any such Confidential
Information as it safeguards its own confidential information and shall refrain
from unauthorized use by or disclosing it to third parties or disclosing it in
any other way. Furthermore, Parties will ensure every reasonable precaution to
prevent the unauthorized disclosure of said Confidential Information.

--------------------------------------------------------------------------------

3. Parties may only disclose or reveal the Confidential Information to the
minimum number of employees of Parties who have a need to know and solely for
the Purpose or, with prior written approval of the Disclosing Party, to the
minimum of employees of companies associated with the other Party or its
advisors who are actually engaged in the execution of activities requiring
access to the Confidential Information, on the condition that the Receiving
Party has in force an appropriate confidentiality agreement with such advisors
and associated company and their employees have signed appropriate agreements
requiring them to treat the Confidential Information as strictly confidential,
and treat such Confidential Information in accordance with this Agreement.

 

4. The Confidential Information of each Party, or any part thereof, whether
capable of being copyrighted, patented, or otherwise registered by law, or not,
is for the purpose of this Agreement acknowledged by the Receiving Party as
being the sole property of the Disclosing Party. Upon termination or expiration
as set forth in Section 13 below, or at such earlier time as it appears that the
Confidential Information is no longer required, each Party shall, at its own
expense, return to the other Party the originals and all copies of such
Confidential Information within a reasonable time or, if requested by the
Disclosing Party, shall destroy or return the originals and all copies of such
Confidential Information and certify to the destruction or return in writing
within thirty (30) days of the request thereto. Notwithstanding any contrary
foregoing provision, the Receiving Party may retain one copy of Confidential
Information in a secure location with appropriately restricted access for
evidentiary purposes. The parties acknowledge that it may not be feasible to
remove copies of information in electronic systems, such as email and system
archives and certain electronic media, and their continued presence shall not be
a breach of this obligation so long as such copies are treated as confidential.

 

5. The Receiving Party shall not analyze, copy, reverse engineer, or otherwise
attempt to derive the composition or underlying information of any Confidential
Information.

 

6. The Receiving Party shall have no obligations or restrictions with respect to
any Confidential Information, which the Receiving Party can prove:

 

  a. is or has become publicly and generally available or ascertainable prior
to, or after the disclosure thereof and in such case through no wrongful act of
the Receiving Party; or

 

  b. is already known to the Receiving Party, as evidenced by written
documentation in its files; or

 

  c. has been lawfully received at any time from a third party that the
Receiving Party reasonably believes possesses such information lawfully and has
the right to disclose such information; or

 

  d. has been or is published without violation of this Agreement; or

 

  e. is independently developed in good faith by employees of the Receiving
Party who did not have access to, nor had knowledge of the Confidential
Information; or

 

  f. is approved for release or use by written authorization of the Disclosing
Party; or

 

  g. is required to be disclosed by applicable law, regulations or order of a
governmental authority, agency or court of competent jurisdiction provided that
the Receiving Party takes reasonable steps to avoid disclosure or minimize its
extent and promptly notifies the other Party of such order to provide that Party
sufficient time to seek a protective order or other remedy to protect such
Confidential Information. The Receiving Party may disclose only the minimum
Confidential Information required to be disclosed, whether or not a protective
order or other remedy is in place.

 

2

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The Confidential Information shall not be deemed to be within one of the
foregoing exceptions merely because it is embraced by more general information
within the exception. In addition, any combination of features shall not be
deemed to be within one of the foregoing exceptions merely because individual
features are within the exception but only if the combination itself is within
the exception. The Receiving Party shall have the burden of proof in
establishing any of the above-mentioned exceptions.

 

7. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise to the Receiving Party, expressed
or implied, for any patent, trademark, copyright, know-how, invention or other
intellectual property, discovery or improvement prior to or after the date of
this Agreement, whether or not related to the subject matter of the Agreement.
All Confidential Information disclosed by one Party to the other shall remain
the intellectual property of the Disclosing Party. Furthermore while each Party
hereto agrees to act in good faith in disclosing information, which is accurate
and adequate for the purpose set forth herein, neither Party provides any
warranty as to the accuracy and completeness of the information disclosed by it
hereunder.

 

8. Nothing in this Agreement may be construed as compelling either Party hereto
to disclose any Confidential Information to the other, or to enter into any
further contractual relationship relating to the subject matter of this
Agreement.

 

9. Each Party hereto, to the extent of its right to do so, shall disclose to the
other Party only such Confidential Information, which the Disclosing Party deems
appropriate to fulfill the objectives of this Agreement. Any information or data
in whatever form disclosed by either Party hereto to the other shall be subject
to the relevant terms and conditions of this Agreement.

 

10. The Receiving Party shall be liable to Disclosing Party for any and all
damages suffered by Disclosing Party arising out of or in relation to any breach
of the Receiving Party undertakings herein. The Receiving Party understands that
any violation of this Agreement may cause immediate and irreparable harm to the
Disclosing Party, which monetary damages cannot adequately remedy. Without
prejudice to rights and remedies available to the Disclosing Party, Receiving
Party agrees that injunctive relief may be sought against it, in order to
remedy, or to prevent a violation hereof.

 

11. For each and every breach of this Agreement the Disclosing Party shall have
the right to seek specific performance and other injunctive and equitable
relief.

 

12. The execution, existence and performance of this Agreement shall be kept
confidential by the Parties hereto and shall not be disclosed by either Party
without the prior written consent of the other.

 

13. In consideration of the Purpose, Parties shall exchange Confidential
Information within one (1) year of signing this Agreement. That if, on whatever
grounds, an agreement between Parties would not be entered into, this Agreement
shall be terminated automatically after one (1) year and the obligations set
forth in this Agreement are continuing and shall survive the termination of any
discussions, evaluations, negotiations or this Agreement and remain in full
effect for a period of five (5) years from the date of termination. In the event
the Parties enter into an agreement related to the Purpose, this Agreement shall
continue in full effect until the longer of one (1) year of signing this
Agreement or the expiration of such agreement related to the Purpose, and the
obligations set forth in this Agreement are continuing and shall survive the
termination of this Agreement and remain in full effect for a period of five
(5) years from the date of termination.

 

3

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14. The Agreement shall be governed by and construed in accordance with the laws
of the State of Arizona, USA, without regard to the conflict of law principles
thereof.

 

15. None of the terms of this Agreement shall be amended or modified except in
writing and signed by persons authorized to bind Parties.

 

16. This Agreement shall be binding upon and inure to the benefit of each of the
Parties, their successors, legal representatives, and assigns. A Party may
assign this Agreement only to a successor of that Party to that portion of its
business relating to the subject matter of this Agreement and only after written
approval of the contracting Party under this Agreement. However, such assignment
shall not relieve said Party of any of the obligations of confidentiality set
forth above.

 

17. This Agreement may be rendered effective through facsimile or other
electronic transmission and/or may be executed in counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.

 

APTHERA, INC.    Kwangdong Pharmaceuticals, Co., Ltd.

/s/ Robert E. Kennedy

  

/s/ Bo-Hyung Lee

Signature    Signature

Robert E. Kennedy

  

Bo-Hyung Lee

Name    Name

CFO

  

Director, Business Development

Title    Title

 

4

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EXHIBIT B

Licensed Intellectual Property

PATENTS

Issued Patents

 

Patent Number

  

Title of Patent

   Jurisdiction    Filing Date

6,514,942

   Methods And Compositions For Stimulating T-Lymphocytes    U.S.    3/14/95

6,096,313

   Compositions Containing Immunogenic Molecules and Granulocyte-Macrophage
Colony Stimulating Factor, as an Adjuvant    U.S.    2/9/96

Pending Patent Applications

 

Application Number

  

Title of Patent

   Jurisdiction    Filing Date

10/507,009

   Controlled modulation of amino acid side chain length of peptide antigens   
U.S.    3/28/05

60/941,524

   Vaccine for the Prevention of Breast Cancer Relapse    U.S.    6/1/07

PCT/US08/60044

   Vaccine for the Prevention of Breast Cancer Relapse    PCT    4/11/08

TRADEMARKS

U.S. Serial No. 77/107,771 filed February 14, 2007 for the mark “NEUVAX”.