Exhibit 10.46

 

Text Marked By [* * *] Has Been Omitted Pursuant To A Request For Confidential
Treatment And Was Filed Separately With The Securities And Exchange Commission.

 

THE National Institutes of Health

 

PATENT LICENSE AGREEMENT – EXCLUSIVE

 

COVER PAGE

 

For the NIH internal use only:

 

License Number: L-108-2015/0

 

License Application Number: A-079-2014

 

Serial Number(s) of Licensed Patent(s) or Patent Application(s):

 

U.S. Patent Application No. 61/771,247 filed March 1, 2013 [E-059-2013/0-US-01]

PCT Patent Application No. PCT/US2013/038799 filed April 30, 2013
[E-059-2013/0-US-01]

 

Licensee: Lion Biotechnologies, Inc.

 

Cooperative Research and Development Agreement (CRADA) Number: C-057-2011 (NCI
02734)

 

Public Benefit(s):

 

The public will benefit from the development of Licensed Products by the
Licensee that are granted FDA approval. There is a long felt need for better
treatments for metastatic melanoma. The development of novel TIL-based therapies
will provide patients with new cancer treatment options in the realm of
personalized medicine to support public health.

 

This Patent License Agreement, hereinafter referred to as the “Agreement”,
consists of this Cover Page, an attached Agreement, a Signature Page, Appendix A
(List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance),
Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report),
and Appendix G (Royalty Payment Options). The Parties to this Agreement are:

 

1)The National Institutes of Health (“NIH”), an agency within the Department of
Health and Human Services (“HHS”); and

 

2)The person, corporation, or institution identified above or on the Signature
Page, having offices at the address indicated on the Signature Page, hereinafter
referred to as the “Licensee”.

 

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The NIH and the Licensee agree as follows:

 

1.BACKGROUND

 

1.1In the course of conducting biomedical and behavioral research, the NIH or
the FDA investigators made inventions that may have commercial applicability.

 

1.2By assignment of rights from NIH or FDA employees and other inventors, HHS,
on behalf of the Government, owns intellectual property rights claimed in any
United States or foreign patent applications or patents corresponding to the
assigned inventions. HHS also owns any tangible embodiments of these inventions
actually reduced to practice by the NIH or the FDA.

 

1.3The Secretary of HHS has delegated to the NIH the authority to enter into
this Agreement for the licensing of rights to these inventions.

 

1.4The NIH desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of products
and processes for public use and benefit.

 

1.5The Licensee desires to acquire commercialization rights to certain of these
inventions in order to develop processes, methods, or marketable products for
public use and benefit.

 

2.DEFINITIONS

 

2.1“Affiliate(s)” means a corporation or other business entity, which directly
or indirectly is controlled by or controls, or is under common control with the
Licensee. For this purpose, the term "control" shall mean ownership of more than
fifty percent (50%) of the voting stock or other ownership interest of the
corporation or other business entity, or the power to elect or appoint more than
fifty percent (50%) of the members of the governing body of the corporation or
other business entity.

 

2.2“Benchmarks” mean the performance milestones that are set forth in
Appendix D.

 

2.3“Commercial Development Plan” means the written commercialization plan
attached as Appendix E.

 

2.4“CRADA” means a Cooperative Research and Development Agreement.

 

2.5“FDA” means the Food and Drug Administration.

 

2.6“First Commercial Sale” means the initial transfer by or on behalf of the
Licensee or its sublicensees of the Licensed Products or the initial practice of
a Licensed Process by or on behalf of the Licensee or its sublicensees in a
country after obtaining regulatory approval by the U.S. Food and Drug
Administration or any foreign equivalent necessary for the marketing and sale of
such Licensed Product or practice of such Licensed Process in exchange for cash
or some equivalent consideration to which value can be assigned for the purpose
of determining Net Sales.

 

2.7“Government” means the Government of the United States of America.

 

2.8“Licensed Fields of Use” means the fields of use identified in Appendix B.

 

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2.9“Licensed Patent Rights” shall mean:

 

(a)Patent applications (including provisional patent applications and PCT patent
applications) or patents listed in Appendix A, all divisions and continuations
of these applications, all patents issuing from these applications, divisions,
and continuations, and any reissues, reexaminations, and extensions of these
patents;

 

(b)to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in 2.9(a):

 

(i)continuations-in-part of 2.9(a);

 

(ii)all divisions and continuations of these continuations-in-part;

 

(iii)all patents issuing from these continuations-in-part, divisions, and
continuations;

 

(iv)priority patent application(s) of 2.9(a); and

 

(v)any reissues, reexaminations, and extensions of these patents;

 

(c)to the extent that the following contain one or more claims directed to the
invention or inventions disclosed in 2.9(a): all counterpart foreign and U.S.
patent applications and patents to 2.9(a) and 2.9(b), including those listed in
Appendix A; and

 

(d)Licensed Patent Rights shall not include 2.9(b) or 2.9(c) to the extent that
they contain one or more claims directed to new matter which is not the subject
matter disclosed in 2.9(a).

 

2.10“Licensed Processes” means processes which, in the course of being
practiced, would be within the scope of one or more claims of the Licensed
Patent Rights that have not been held unpatentable, invalid or unenforceable by
an unappealed or unappealable judgment of a court of competent jurisdiction.

 

2.11“Licensed Products” means tangible materials which, in the course of
manufacture, use, sale, or importation, would be within the scope of one or more
claims of the Licensed Patent Rights that have not been held unpatentable,
invalid or unenforceable by an unappealed or unappealable judgment of a court of
competent jurisdiction.

 

2.12“Licensed Territory” means the geographical area identified in Appendix B.

 

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2.13“Net Sales” means the total gross receipts received by Licensee for sales of
Licensed Products or practice of Licensed Processes by or on behalf of the
Licensee or its sublicensees, and from leasing, renting, or otherwise making the
Licensed Products available to others for consideration without sale or other
dispositions, whether invoiced or not, less returns and allowances, packing
costs, insurance costs, freight out, taxes or excise duties imposed on the
transaction (if separately invoiced), and wholesaler and cash discounts in
amounts customary in the trade to the extent actually granted. No deductions
shall be made for commissions paid to individuals, whether they are with
independent sales agencies or regularly employed by the Licensee, or
sublicensees, and on its payroll, or for the cost of collections. “Net Sales”
shall not include the supply of Licensed Products or use of Licensed Processes,
for use in pre-clinical or clinical studies, or for process development, quality
control or assurance, storage as safety stock, transfer as a charitable donation
or any other transaction for which no gross revenue is received.

 

2.14“Practical Application” means to manufacture in the case of a composition or
product, to practice in the case of a process or method, or to operate in the
case of a machine or system; and in each case, under these conditions as to
establish that the invention is being utilized and that its benefits are to the
extent permitted by law or Government regulations available to the public on
reasonable terms not inconsistent with the terms applicable to similar products
or processes and taking into account the efficacy and safety profile of the
Licensed Product or the utility of the Licensed Process and other relevant
commercial, scientific, technical and other factors.

 

2.15“Research License” means a nontransferable, nonexclusive license to make and
to use the Licensed Products or the Licensed Processes as defined by the
Licensed Patent Rights for purposes of research only and not for purposes of
commercial sale, manufacture or distribution or in lieu of purchase.

 

2.16“Genesis License” means the PHS Patent License Agreement -Nonexclusive
(License No. L-129-2011/0) between PHS and Licensee, as may be amended from time
to time.

 

3.GRANT OF RIGHTS

 

3.1The NIH hereby grants and the Licensee accepts, subject to the terms and
conditions of this Agreement, an exclusive license under the Licensed Patent
Rights in the Licensed Territory to make and have made, to use and have used, to
sell and have sold, to offer to sell, and to import any Licensed Products in the
Licensed Fields of Use and to practice and have practiced any Licensed
Process(es) in the Licensed Fields of Use.

 

3.2This Agreement confers no license or rights by implication, estoppel, or
otherwise under any patent applications or patents of the NIH other than the
Licensed Patent Rights regardless of whether these patents are dominant or
subordinate to the Licensed Patent Rights.

 

4.SUBLICENSING

 

4.1Upon written approval, which shall include prior review of any sublicense
agreement by the NIH and which shall not be unreasonably withheld or delayed,
the Licensee may enter into sublicensing agreements under the Licensed Patent
Rights.

 

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4.2The Licensee agrees that any sublicenses shall provide that the obligations
to the NIH of Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10 of this
Agreement shall be binding upon the sublicensee as if it were a party to this
Agreement. The Licensee further agrees to attach copies of these Paragraphs to
all sublicense agreements.

 

4.3Any sublicenses granted by the Licensee shall provide for the termination of
the sublicense, or the conversion to a license directly between the sublicensees
and the NIH, at the option of the sublicensee, upon termination of this
Agreement under Article 13. This conversion is subject to the NIH approval,
which will not be unreasonably denied or delayed. and contingent upon acceptance
by the sublicensee of the remaining provisions of this Agreement.

 

4.4The Licensee agrees to forward to the NIH a complete copy of each fully
executed sublicense agreement postmarked within thirty (30) days of the
execution of the agreement. To the extent permitted by law, the NIH agrees to
maintain each sublicense agreement in confidence.

 

5.STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS

 

(a)the NIH reserves on behalf of the Government an irrevocable, nonexclusive,
nontransferable, royalty-free license for the practice of all inventions
licensed under the Licensed Patent Rights throughout the world by or on behalf
of the Government and on behalf of any foreign government or international
organization pursuant to any existing or future treaty or agreement to which the
Government is a signatory. Prior to the First Commercial Sale, the Licensee
agrees to provide the NIH with reasonable quantities of the Licensed Products or
materials made through the Licensed Processes for NIH research use, including
pre-clinical and clinical studies undertaken at the NIH; and

 

(b)in the event that the Licensed Patent Rights are Subject Inventions made
under CRADA, the Licensee grants to the Government, pursuant to 15 U.S.C.
§3710a(b)(1)(A), a nonexclusive, nontransferable, irrevocable, paid-up license
to practice the Licensed Patent Rights or have the Licensed Patent Rights
practiced throughout the world by or on behalf of the Government. In the
exercise of this license, the Government shall not publicly disclose trade
secrets or commercial or financial information that is privileged or
confidential within the meaning of 5 U.S.C. §552(b)(4) or which would be
considered as such if it had been obtained from a non-Federal party. Prior to
the First Commercial Sale, the Licensee agrees to provide the NIH with
reasonable quantities of the Licensed Products or materials made through the
Licensed Processes for NIH research use.

 

5.2The Licensee agrees that products used or sold in the United States embodying
the Licensed Products or produced through use of the Licensed Processes shall be
manufactured substantially in the United States, unless a written waiver is
obtained in advance from the NIH.

 

5.3The Licensee acknowledges that the NIH may enter into future CRADAs under the
Federal Technology Transfer Act of 1986 that relate to the subject matter of
this Agreement. The Licensee agrees not to unreasonably deny requests for a
Research License from future collaborators with the NIH when acquiring these
rights is necessary in order to make a CRADA project feasible. The Licensee may
request an opportunity to join as a party to the proposed CRADA.

 

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5.4              (a)         in addition to the reserved license of Paragraph
5.1, the NIH reserves the right to grant Research Licenses directly or to
require the Licensee to grant Research Licenses on reasonable terms. The purpose
of these Research Licenses is to encourage basic research, whether conducted at
an academic or corporate facility. In order to safeguard the Licensed Patent
Rights, however, the NIH shall consult with the Licensee before granting to
commercial entities a Research License or providing to them research samples of
materials made through the Licensed Processes; and

 

(b)in exceptional circumstances, and in the event that the Licensed Patent
Rights are Subject Inventions made under a CRADA, the Government, pursuant to 15
U.S.C. §3710a(b)(1)(B), retains the right to require the Licensee to grant to a
responsible applicant a nonexclusive, partially exclusive, or exclusive
sublicense to use the Licensed Patent Rights in the Licensed Field of Use on
terms that are reasonable under the circumstances, or if the Licensee fails to
grant this license, the Government retains the right to grant the license
itself. The exercise of these rights by the Government shall only be in
exceptional circumstances and only if the Government determines:

 

(i)the action is necessary to meet health or safety needs that are not
reasonably satisfied by the Licensee;

 

(ii)the action is necessary to meet requirements for public use specified by
Federal regulations, and these requirements are not reasonably satisfied by the
Licensee; or

 

(iii)the Licensee has failed to comply with an agreement containing provisions
described in 15 U.S.C. §3710a(c)(4)(B); and

 

(c)the determination made by the Government under this Paragraph 5.4 is subject
to administrative appeal and judicial review under 35 U.S.C. §203(b).

 

6.ROYALTIES AND REIMBURSEMENT

 

6.1The Licensee agrees to pay the NIH a noncreditable, nonrefundable license
issue royalty as set forth in Appendix C.

 

6.2The Licensee agrees to pay the NIH a nonrefundable minimum annual royalty as
set forth in Appendix C.

 

6.3The Licensee agrees to pay the NIH earned royalties as set forth in Appendix
C.

 

6.4The Licensee agrees to pay the NIH benchmark royalties as set forth in
Appendix C.

 

6.5The Licensee agrees to pay the NIH sublicensing royalties as set forth in
Appendix C.

 

6.6A patent or patent application licensed under this Agreement shall cease to
fall within the Licensed Patent Rights for the purpose of computing earned
royalty payments in any given country on the earliest of the dates that:

 

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(a)the application has been abandoned and not continued;

 

(b)the patent expires or irrevocably lapses, or

 

(c)the patent has been held to be invalid or unenforceable by an unappealed or
unappealable decision of a court of competent jurisdiction or administrative
agency.

 

6.7No multiple royalties shall be payable because any Licensed Products or
Licensed Processes are covered by more than one of the Licensed Patent Rights.

 

6.8On sales of the Licensed Products by the Licensee to sublicensees or on sales
made in other than an arms-length transaction, the value of the Net Sales
attributed under this Article 6 to this transaction shall be that which would
have been received in an arms-length transaction, based on sales of like
quantity and quality products on or about the time of this transaction.

 

6.9With regard to unreimbursed expenses associated with the preparation, filing,
prosecution, and maintenance of all patent applications and patents included
within the Licensed Patent Rights and paid by the NIH prior to the effective
date of this Agreement, the Licensee shall pay the NIH, as an additional
royalty, within sixty (60) days of the NIH’s submission of a statement and
request for payment to the Licensee, an amount equivalent to these unreimbursed
expenses previously paid by the NIH.

 

6.10With regard to unreimbursed expenses associated with the preparation,
filing, prosecution, and maintenance of all patent applications and patents
included within the Licensed Patent Rights and paid by the NIH on or after the
effective date of this Agreement, the NIH, at its sole option, may require the
Licensee:

 

(a)to pay the NIH on an annual basis, within sixty (60) days of the NIH’s
submission of a statement and request for payment, a royalty amount equivalent
to these unreimbursed expenses paid during the previous calendar year(s);

 

(b)to pay these unreimbursed expenses directly to the law firm employed by the
NIH to handle these functions. However, in this event, the NIH and not the
Licensee shall be the client of the law firm; or

 

(c)in limited circumstances, the Licensee may be given the right to assume
responsibility for the preparation, filing, prosecution, or maintenance of any
patent application or patent included with the Licensed Patent Rights. In that
event, the Licensee shall directly pay the attorneys or agents engaged to
prepare, file, prosecute, or maintain these patent applications or patents and
shall provide the NIH with copies of each invoice associated with these services
as well as documentation that these invoices have been paid.

 

6.11The NIH agrees, upon written request, to provide the Licensee with summaries
of patent prosecution invoices for which the NIH has requested payment from the
Licensee under Paragraphs 6.9 and 6.10. The Licensee agrees that all information
provided by the NIH related to patent prosecution costs shall be treated as
confidential commercial information and shall not be released to a third party
(other than its Affiliates) except as required by law or a court of competent
jurisdiction.

 

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6.12The Licensee may elect to surrender its rights in any country of the
Licensed Territory under any of the Licensed Patent Rights upon ninety (90) days
written notice to the NIH and owe no payment obligation under Paragraph 6.10 for
patent-related expenses incurred in that country after ninety (90) days of the
effective date of the written notice.

 

7.PATENT FILING, PROSECUTION, AND MAINTENANCE

 

7.1Except as otherwise provided in this Article 7, the NIH agrees to take
responsibility for, but to consult with, the Licensee in the preparation,
filing, prosecution, and maintenance of any and all patent applications or
patents included in the Licensed Patent Rights and shall furnish copies of
relevant patent-related documents to the Licensee.

 

7.2Upon the NIH’s written request, the Licensee shall assume the responsibility
for the preparation, filing, prosecution, and maintenance of any and all patent
applications or patents included in the Licensed Patent Rights and shall, on an
ongoing basis, promptly furnish copies of all patent-related documents to the
NIH. In this event, the Licensee shall, subject to the prior approval of the
NIH, select registered patent attorneys or patent agents to provide these
services on behalf of the Licensee and the NIH. The NIH shall provide
appropriate powers of attorney and other documents necessary to undertake this
action to the patent attorneys or patent agents providing these services. The
Licensee and its attorneys or agents shall consult with the NIH in all aspects
of the preparation, filing, prosecution and maintenance of patent applications
and patents included within the Licensed Patent Rights and shall provide the NIH
sufficient opportunity to comment on any document that the Licensee intends to
file or to cause to be filed with the relevant intellectual property or patent
office.

 

7.3At any time, after Licensee has assumed responsibility for the preparation,
filing, prosecution, and maintenance of Licensed Patent Rights as provided in
Section 7.2, the NIH may provide the Licensee with written notice that the NIH
wishes to re-assume control of the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included in the
Licensed Patent Rights. If the NIH elects to reassume these responsibilities,
the Licensee agrees to cooperate fully with the NIH, its attorneys, and agents
in the preparation, filing, prosecution, and maintenance of any and all patent
applications or patents included in the Licensed Patent Rights and to provide
the NIH with complete copies of any and all documents or other materials in
Licensee’s possession or control that the NIH deems necessary to undertake such
responsibilities. The Licensee shall be responsible for all costs associated
with transferring patent prosecution responsibilities to an attorney or agent of
the NIH’s choice.

 

7.4Each party shall promptly inform the other as to all material matters that
come to its attention that may affect the preparation, filing, prosecution, or
maintenance of the Licensed Patent Rights and permit each other to provide
comments and suggestions with respect to the preparation, filing, prosecution,
and maintenance of the Licensed Patent Rights, which comments and suggestions
shall be considered by the other party.

 

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8.RECORD KEEPING

 

8.1The Licensee agrees to keep accurate and correct records of the Licensed
Products made, used, sold, or imported and the Licensed Processes practiced
under this Agreement appropriate to determine the amount of royalties due the
NIH. These records shall be retained for at least five (5) years following a
given reporting period and shall be available during normal business hours for
inspection, at the expense of the NIH, by an accountant or other designated
auditor selected by the NIH for the sole purpose of verifying reports and
royalty payments hereunder. Licensee may require such auditor or accountant to
enter into a confidentiality agreement with Licensee containing reasonable terms
and conditions for the protection of Licensee’s non-public and proprietary
information. The accountant or auditor shall only disclose to the NIH
information relating to the accuracy of reports and royalty payments made under
this Agreement. If an inspection shows an underreporting or underpayment in
excess of five percent (5%) for any twelve (12) month period, then the Licensee
shall reimburse the NIH for the cost of the inspection at the time the Licensee
pays the unreported royalties, including any additional royalties as required by
Paragraph 9.8. All royalty payments required under this Paragraph shall be due
within sixty (60) days of the date the NIH provides to the Licensee notice of
the payment due.

 

9.REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS

 

9.1Prior to signing this Agreement, the Licensee has provided the NIH with the
Commercial Development Plan in Appendix E, under which the Licensee intends to
bring Licensed Product(s) or Licensed Process(es) within the subject matter of
the Licensed Patent Rights to the point of Practical Application. This
Commercial Development Plan is hereby incorporated by reference into this
Agreement. Based on this plan, performance Benchmarks are determined as
specified in Appendix D.

 

9.2The Licensee shall provide written annual reports on its product development
progress or efforts to commercialize under the Commercial Development Plan for
each of the Licensed Fields of Use within sixty (60) days after December 31 of
each calendar year. These progress reports shall include, but not be limited to:
progress on research and development, status of applications for regulatory
approvals, manufacturing, sublicensing, marketing, importing, and sales during
the preceding calendar year, as well as, plans for the present calendar year.
The NIH also encourages these reports to include information on any of the
Licensee's public service activities that relate to the Licensed Patent Rights.
If reported progress differs from that projected in the Commercial Development
Plan and Benchmarks, the Licensee shall explain the reasons for these
differences. In the annual report, the Licensee may propose amendments to the
Commercial Development Plan, acceptance of which by the NIH may not be denied
unreasonably. The Licensee agrees to provide any additional information
reasonably required by the NIH to evaluate the Licensee's performance under this
Agreement. The Licensee may amend the Benchmarks at any time upon written
approval by the NIH. The NIH shall not unreasonably withhold approval of any
request of the Licensee to extend the time periods of this schedule if the
request is supported by a reasonable showing by the Licensee of diligence in its
performance under the Commercial Development Plan and toward bringing the
Licensed Products to the point of Practical Application as defined in 37 C.F.R.
§404.3(d). The Licensee shall amend the Commercial Development Plan and
Benchmarks at the request of the NIH to address any Licensed Fields of Use not
specifically addressed in the plan originally submitted.

 

9.3The Licensee shall report to the NIH the dates for achieving Benchmarks
specified in Appendix D and the First Commercial Sale in each country in the
Licensed Territory within thirty (30) days of such occurrences.

 

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9.4Following the First Commercial Sale, the Licensee shall submit to the NIH,
within sixty (60) days after each calendar half-year ending June 30 and December
31, a royalty report, as described in the example in Appendix F, setting forth
for the preceding half-year period the amount of the Licensed Products sold or
Licensed Processes practiced by or on behalf of the Licensee in each country
within the Licensed Territory, the Net Sales, and the amount of royalty
accordingly due. With each royalty report, the Licensee shall submit payment of
earned royalties due. If no earned royalties are due to the NIH for any
reporting period, the written report shall so state. The royalty report shall be
certified as correct by an authorized officer of the Licensee and shall include
a detailed listing of all deductions made under Paragraph 2.13 to determine Net
Sales made under Article 6 to determine royalties due. The royalty report shall
also identify the site of manufacture for the Licensed Product(s) sold in the
United States.

 

9.5The Licensee agrees to forward semi-annually to the NIH a copy of these
reports received by the Licensee from its sublicensees during the preceding
half-year period as shall be pertinent to a royalty accounting to the NIH by the
Licensee for activities under the sublicense.

 

9.6Royalties due under Article 6 shall be paid in U.S. dollars and payment
options are listed in Appendix G. For conversion of foreign currency to U.S.
dollars, the conversion rate shall be the New York foreign exchange rate quoted
in The Wall Street Journal on the day preceding the day that the payment is due.
Any loss of exchange, value, taxes, or other expenses incurred in the transfer
or conversion to U.S. dollars shall be paid entirely by the Licensee. The
royalty report required by Paragraph 9.4 shall be mailed to the NIH at its
address for Agreement Notices indicated on the Signature Page.

 

9.7The Licensee shall be solely responsible for determining if any tax on
royalty income is owed outside the United States and shall pay the tax and be
responsible for all filings with appropriate agencies of foreign governments. As
reasonably requested by Licensee, NIH shall cooperate with Licensee in applying
for any valid exemption or obtaining any valid refund of such taxes paid by
Licensee.

 

9.8Additional royalties may be assessed by the NIH on any payment that is more
than ninety (90) days overdue at the rate of one percent (1%) per month. This
one percent (1%) per month rate may be applied retroactively from the original
due date until the date of receipt by the NIH of the overdue payment and
additional royalties. The payment of any additional royalties shall not prevent
the NIH from exercising any other rights it may have as a consequence of the
lateness of any payment.

 

9.9All plans and reports required by this Article 9 and marked “confidential” by
the Licensee shall, to the extent permitted by law, be treated by the NIH as
commercial and financial information obtained from a person and as privileged
and confidential, and any proposed disclosure of these records by the NIH under
the Freedom of Information Act (FOIA), 5 U.S.C. §552 shall be subject to the
predisclosure notification requirements of 45 C.F.R. §5.65(d).

 

10.PERFORMANCE

 

10.1The Licensee shall use its reasonable commercial efforts to bring the
Licensed Products and the Licensed Processes to Practical Application.
“Reasonable commercial efforts” for the purposes of this provision shall include
reasonable adherence to the Commercial Development Plan in Appendix E and
performance of the Benchmarks in Appendix D in each case as either may be
amended from time to time. The efforts of a sublicensee or an Affiliate of
Licensee shall be considered the efforts of the Licensee.

 

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10.2Upon the First Commercial Sale in the United States, until the expiration or
termination of this Agreement, the Licensee shall use its reasonable commercial
efforts to make the Licensed Products and the Licensed Processes reasonably
accessible to the United States public.

 

10.3The Licensee agrees, after its First Commercial Sale, to make reasonable
quantities of the Licensed Products or materials produced through the use of the
Licensed Processes within the Licensed Fields of Use available to patient
assistance programs.

 

10.4The Licensee agrees, after its First Commercial Sale and as part of its
marketing and product promotion, to develop educational materials (e.g.,
brochures, website, etc.) directed to patients and physicians detailing the
Licensed Products or medical aspects of the prophylactic and therapeutic uses of
the Licensed Products.

 

10.5The Licensee agrees to supply, to the Mailing Address for Agreement Notices
indicated on the Signature Page, the Office of Technology Transfer, NIH with
inert samples of the Licensed Products or the Licensed Processes or their
packaging for educational and display purposes only.

 

11.INFRINGEMENT AND PATENT ENFORCEMENT

 

11.1The NIH and the Licensee agree to notify each other promptly of each
infringement or possible infringement of the Licensed Patent Rights, as well as,
any facts which may affect the validity, scope, or enforceability of the
Licensed Patent Rights of which either party becomes aware.

 

11.2Pursuant to this Agreement and the provisions of 35 U.S.C. Chapter 29, the
Licensee may:

 

(a)bring suit in its own name, at its own expense, and on its own behalf for
infringement of presumably valid claims in the Licensed Patent Rights;

 

(b)in any suit, enjoin infringement and collect for its use, damages, profits,
and awards of whatever nature recoverable for the infringement; or

 

(c)settle any claim or suit for infringement of the Licensed Patent Rights
provided, however, that the NIH and appropriate Government authorities shall
have the first right to take such actions; and

 

(d)if the Licensee desires to initiate a suit for patent infringement, the
Licensee shall notify the NIH in writing. If the NIH does not notify the
Licensee of its intent to pursue legal action within ninety (90) days, the
Licensee shall be free to initiate suit. The NIH shall have a continuing right
to intervene in the suit. The Licensee shall take no action to compel the
Government either to initiate or to join in any suit for patent infringement.
The Licensee may request the Government to initiate or join in any suit if
necessary to avoid dismissal of the suit. Should the Government be made a party
to any suit, the Licensee shall reimburse the Government for any costs,
expenses, or fees which the Government incurs as a result of the motion or other
action, including all costs incurred by the Government in opposing the motion or
other action. In all cases, the Licensee agrees to keep the NIH reasonably
apprised of the status and progress of any litigation. Before the Licensee
commences an infringement action, the Licensee shall notify the NIH and give
careful consideration to the views of the NIH and to any potential effects of
the litigation on the public health in deciding whether to bring suit.

 

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11.3In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Licensed Patent Rights shall be brought against
the Licensee or raised by way of counterclaim or affirmative defense in an
infringement suit brought by the Licensee under Paragraph 11.2, pursuant to this
Agreement and the provisions of 35 U.S.C. Part 29 or other statutes, the
Licensee may:

 

(a)defend the suit in its own name, at its own expense, and on its own behalf
for presumably valid claims in the Licensed Patent Rights;

 

(b)in any suit, ultimately to enjoin infringement and to collect for its use,
damages, profits, and awards of whatever nature recoverable for the
infringement; and

 

(c)settle any claim or suit for declaratory judgment involving the Licensed
Patent Rights-provided, however, that the NIH and appropriate Government
authorities shall have the first right to take these actions and shall have a
continuing right to intervene in the suit; and

 

(d)if the NIH does not notify the Licensee of its intent to respond to the legal
action within a reasonable time, the Licensee shall be free to do so. The
Licensee shall take no action to compel the Government either to initiate or to
join in any declaratory judgment action. The Licensee may request the Government
to initiate or to join any suit if necessary to avoid dismissal of the suit.
Should the Government be made a party to any suit by motion or any other action
of the Licensee, the Licensee shall reimburse the Government for any costs,
expenses, or fees, which the Government incurs as a result of the motion or
other action. If the Licensee elects not to defend against the declaratory
judgment action, the NIH, at its option, may do so at its own expense. In all
cases, the Licensee agrees to keep the NIH reasonably apprised of the status and
progress of any litigation. Before the Licensee commences an infringement
action, the Licensee shall notify the NIH and give careful consideration to the
views of the NIH and to any potential effects of the litigation on the public
health in deciding whether to bring suit.

 

11.4In any action under Paragraphs 11.2 or 11.3 the expenses including costs,
fees, attorney fees, and disbursements, shall be paid by the Licensee. The value
of any recovery made by the Licensee through court judgment or settlement
actually collected shall first be applied by Licensee to reimburse it for all of
its costs and expenses (including attorneys’ fees, expert witness fees, and any
reimbursement payments made to NIH or the Government) and the balance shall be
treated as Net Sales and subject to earned royalties as provided in Appendix C
when and as collected.

 

11.5The NIH shall cooperate fully with the Licensee in connection with any
action under Paragraphs 11.2 or 11.3. The NIH agrees promptly to provide access
to all necessary documents and to render reasonable assistance in response to a
request by the Licensee.

 

12.NEGATION OF WARRANTIES AND INDEMNIFICATION

 

12.1The NIH offers no warranties other than those specified in Article 1.

 

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12.2The NIH does not warrant the validity of the Licensed Patent Rights and
makes no representations whatsoever with regard to the scope of the Licensed
Patent Rights, or that the Licensed Patent Rights may be exploited without
infringing other patents or other intellectual property rights of third parties.

 

12.3THE NIH MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF
THE LICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.

 

12.4The NIH does not represent that it shall commence legal actions against
third parties infringing the Licensed Patent Rights.

 

12.5The Licensee shall indemnify and hold the NIH, its employees, students,
fellows, agents, and consultants harmless from and against all liability,
demands, damages, expenses, and losses, including but not limited to death,
personal injury, illness, or property damage in connection with or arising out
of:

 

(a)the use by or on behalf of the Licensee, its sublicensees, directors,
employees, or third parties of any Licensed Patent Rights; or

 

(b)the design, manufacture, distribution, or use of any Licensed Products,
Licensed Processes or materials by the Licensee, or other products or processes
developed in connection with or arising out of the Licensed Patent Rights.

 

12.6The Licensee agrees to maintain a liability insurance program consistent
with sound business practice.

 

13.TERM, TERMINATION, AND MODIFICATION OF RIGHTS

 

13.1This Agreement is effective when signed by all parties, unless the
provisions of Paragraph 14.16 are not fulfilled, and shall extend to the
expiration of the last to expire of the Licensed Patent Rights unless sooner
terminated as provided in this Article 13.

 

13.2In the event that the Licensee is in default in the performance of any
material obligations under this Agreement, including but not limited to the
obligations listed in Paragraph 13.5, and if the default has not been remedied
within ninety (90) days after the date of notice in writing of the default, or
if not reasonably capable of remedy within such period, Licensee has not taken
substantial steps to remedy the alleged default within such ninety (90) day
period, the NIH may terminate this Agreement by written notice and pursue
outstanding royalties owed through procedures provided by the Federal Debt
Collection Act.

 

13.3In the event that the Licensee (i) becomes insolvent, (ii) files a petition
in bankruptcy, or has such a petition filed against it and, in either case, such
petition is not dismissed within sixty (60) days, the Licensee shall immediately
notify the NIH in writing.

 

13.4The Licensee shall have a unilateral right to terminate this Agreement or
any licenses in any country or territory by giving the NIH sixty (60) days
written notice to that effect.

 

13.5The NIH shall specifically have the right to terminate or modify, at its
option, this Agreement, if the NIH determines that the Licensee:

 

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(a)is not executing the Commercial Development Plan submitted with its request
for a license and the Licensee cannot otherwise demonstrate to the NIH’s
satisfaction that the Licensee has taken, or can be expected to take within a
reasonable time, effective steps to achieve the Practical Application of the
Licensed Products or the Licensed Processes;

 

(b)has not achieved and is not reasonably likely to achieve the Benchmarks as
may be modified under Paragraph 9.2;

 

(c)has willfully made a material false statement of, or willfully omitted a
material fact in the license application or in any report required by this
Agreement;

 

(d)has committed a material breach of a covenant or agreement contained in this
Agreement;

 

(e)is not keeping the Licensed Products or the Licensed Processes within the
scope of the Licensed Fields of Use reasonably accessible to the public after
commercial use commences;

 

(f)cannot reasonably satisfy unmet health and safety needs; or

 

(g)cannot reasonably justify a failure to comply with the domestic production
requirement of Paragraph 5.2 unless waived.

 

13.6In making the determination referenced in Paragraph 13.5, the NIH shall take
into account the normal course of such commercial development programs conducted
with sound and reasonable business practices and judgment and the annual reports
submitted by the Licensee under Paragraph 9.2. Prior to invoking termination or
modification of this Agreement under Paragraph 13.5, the NIH shall give written
notice to the Licensee providing the Licensee specific notice of, and a ninety
(90) day opportunity to respond to, the NIH’s concerns as to the items
referenced in 13.5(a)-13.5(g). If the Licensee fails to alleviate the NIH’s
reasonable concerns as to the items referenced in 13.5(a)-13.5(g) or fails to
initiate corrective action to the NIH’s reasonable satisfaction, the NIH may
terminate this Agreement.

 

13.7When the public health and safety so require, and after written notice to
the Licensee providing the Licensee a sixty (60) day opportunity to respond, the
NIH shall have the right to require the Licensee to grant sublicenses to
responsible applicants, on commercially reasonable terms, in any Licensed Fields
of Use under the Licensed Patent Rights, unless the Licensee can reasonably
demonstrate that the granting of the sublicense would not materially increase
the availability to the public of the subject matter of the Licensed Patent
Rights. The NIH shall not require the granting of a sublicense unless the
responsible applicant has first negotiated in good faith with the Licensee for a
sublicense on commercially reasonable terms and conditions.

 

13.8The NIH reserves the right according to 35 U.S.C. §209(d)(3) to terminate or
modify this Agreement if it is determined that this action is necessary to meet
the requirements for public use specified by federal regulations issued after
the date of the license and these requirements are not reasonably satisfied by
the Licensee.

 

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13.9Within thirty (30) days of receipt of written notice of the NIH's unilateral
decision to modify or terminate this Agreement, the Licensee may, consistent
with the provisions of 37 C.F.R. §404.11, appeal the decision by written
submission to the designated NIH official. The decision of the designated NIH
official shall be the final agency decision. The Licensee may thereafter
exercise any and all administrative or judicial remedies that may be available.

 

13.10Within ninety (90) days of expiration or termination of this Agreement
under this Article 13, a final report shall be submitted by the Licensee. Any
royalty payments, including those incurred but not yet paid (such as the full
minimum annual royalty), and those related to patent expenses, due to the NIH
shall become immediately due and payable upon termination or expiration. If
terminated under this Article 13, sublicensees may elect to convert their
sublicenses to direct licenses with the NIH pursuant to Paragraph 4.3. Unless
otherwise specifically provided for under this Agreement, upon termination or
expiration of this Agreement, the Licensee shall return all Licensed Products or
other materials included within the Licensed Patent Rights to the NIH or provide
the NIH with certification of the destruction thereof. The Licensee may not be
granted additional NIH licenses if the final reporting requirement is not
fulfilled.

 

14.GENERAL PROVISIONS

 

14.1Neither party may waive or release any of its rights or interests in this
Agreement except in writing. The failure of either party to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right by that party or excuse a
similar subsequent failure to perform any of these terms or conditions by the
that party.

 

14.2This Agreement constitutes the entire agreement between the parties relating
to the subject matter of the Licensed Patent Rights, the Licensed Products and
the Licensed Processes, and all prior negotiations, representations, agreements,
and understandings are merged into, extinguished by, and completely expressed by
this Agreement.

 

14.3The provisions of this Agreement are severable, and in the event that any
provision of this Agreement shall be determined to be invalid or unenforceable
under any controlling body of law, this determination shall not in any way
affect the validity or enforceability of the remaining provisions of this
Agreement.

 

14.4If either party desires a modification to this Agreement, the parties shall,
upon reasonable notice of the proposed modification by the party desiring the
change, confer in good faith to determine the desirability of the modification.
No modification shall be effective until a written amendment is signed by the
signatories to this Agreement or their designees.

 

14.5The construction, validity, performance, and effect of this Agreement shall
be governed by Federal law as applied by the Federal courts in the District of
Columbia.

 

14.6All Agreement notices required or permitted by this Agreement shall be given
by prepaid, first class, registered or certified mail or by an express/overnight
delivery service provided by a commercial carrier, properly addressed to the
other party at the address designated on the following Signature Page, or to
another address as may be designated in writing by the other party. Agreement
notices shall be considered timely if the notices are received on or before the
established deadline date or sent on or before the deadline date as verifiable
by U.S. Postal Service postmark or dated receipt from a commercial carrier.
Parties should request a legibly dated U.S. Postal Service postmark or obtain a
dated receipt from a commercial carrier or the U.S. Postal Service. Private
metered postmarks shall not be acceptable as proof of timely mailing.

 

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14.7This Agreement shall not be assigned or otherwise transferred (including any
transfer by legal process or by operation of law, and any transfer in bankruptcy
or insolvency, or in any other compulsory procedure or order of court) except to
the Licensee’s Affiliate(s) without the prior written consent of the NIH. The
parties agree that the identity of the parties is material to the formation of
this Agreement and that the obligations under this Agreement are nondelegable.
In the event that the NIH approves a proposed assignment, the Licensee shall pay
the NIH, as an additional royalty, one percent (1%) of the fair market value of
any consideration received for any assignment of this Agreement within sixty
(60) days of the assignment.

 

14.8The Licensee agrees in its use of any NIH-supplied biological materials that
are supplied under this Agreement to comply with all applicable statutes,
regulations, and guidelines, including NIH and HHS regulations and guidelines.
The Licensee agrees not to use such biological materials for research involving
human subjects or clinical trials in the United States without complying with 21
C.F.R. Part 50 and 45 C.F.R. Part 46. The Licensee agrees not to use such
biological materials for research involving human subjects or clinical trials
outside of the United States without notifying the NIH, in writing, of the
research or trials and complying with the applicable regulations of the
appropriate national control authorities. Written notification to the NIH of
research involving such biological materials in human subjects or clinical
trials outside of the United States shall be given no later than sixty (60) days
prior to commencement of the research or trials.

 

14.9The Licensee acknowledges that it is subject to and agrees to abide by the
United States laws and regulations (including the Export Administration Act of
1979 and Arms Export Control Act) controlling the export of technical data,
computer software, laboratory prototypes, biological material, and other
commodities. The transfer of these items may require a license from the
appropriate agency of the U.S. Government or written assurances by the Licensee
that it shall not export these items to certain foreign countries without prior
approval of this agency. The NIH neither represents that a license is or is not
required or that, if required, it shall be issued.

 

14.10The Licensee agrees to mark the Licensed Products or their packaging sold
in the United States with all applicable U.S. patent numbers and similarly to
indicate “Patent Pending” status. All the Licensed Products manufactured in,
shipped to, or sold in other countries shall be marked in a manner to preserve
the NIH’s patent rights in those countries.

 

14.11By entering into this Agreement, the NIH does not directly or indirectly
endorse any product or service provided, or to be provided, by the Licensee
whether directly or indirectly related to this Agreement. The Licensee shall not
state or imply that this Agreement is an endorsement by the Government, the NIH,
any other Government organizational unit, or any Government employee.
Additionally, the Licensee shall not use the names of the NIH, the FDA or the
HHS or the Government or their employees in any advertising, promotional, or
sales literature without the prior written approval of the NIH.

 

14.12The parties agree to attempt to settle amicably any controversy or claim
arising under this Agreement or a breach of this Agreement, except for appeals
of modifications or termination decisions provided for in Article 13. The
Licensee agrees first to appeal any unsettled claims or controversies to the
designated NIH official, or designee, whose decision shall be considered the
final agency decision. Thereafter, the Licensee may exercise any administrative
or judicial remedies that may be available.

 

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14.13Nothing relating to the grant of a license, nor the grant itself, shall be
construed to confer upon any person any immunity from or defenses under the
antitrust laws or from a charge of patent misuse, and the acquisition and use of
rights pursuant to 37 C.F.R. Part 404 shall not be immunized from the operation
of state or Federal law by reason of the source of the grant.

 

14.14Any formal recordation of this Agreement required by the laws of any
Licensed Territory as a prerequisite to enforceability of the Agreement in the
courts of any foreign jurisdiction or for other reasons shall be carried out by
the Licensee at its expense, and appropriately verified proof of recordation
shall be promptly furnished to the NIH.

 

14.15Paragraphs 4.3, 8.1, 9.5-9.8, 9.9 12.1-12.5, 13.9, 13.10, 14.12 and 14.15
of this Agreement shall survive termination of this Agreement.

 

14.16The terms and conditions of this Agreement shall, at the NIH’s sole option,
be considered by the NIH to be withdrawn from the Licensee’s consideration and
the terms and conditions of this Agreement, and the Agreement itself to be null
and void, unless this Agreement is executed by the Licensee and a fully executed
original is received by the NIH within sixty (60) days from the date of the
NIH’s signature found at the Signature Page.

 

SIGNATURES BEGIN ON NEXT PAGE

 

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NIH PATENT LICENSE AGREEMENT – EXCLUSIVE

 

SIGNATURE PAGE

 

For the NIH:

 

/s/ Richard U. Rodriguez ___2/9/2015____________ Richard U. Rodriguez Date
Director, Division of Technology Development and Transfer   Office of Technology
Transfer   National Institutes of Health  

 

Mailing Address or E-mail Address for Agreement notices and reports:

 

Chief, Monitoring & Enforcement Branch

Office of Technology Transfer

National Institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland  20852-3804 U.S.A.

 

E-mail: LicenseNotices_Reports@mail.nih.gov

 

For the Licensee (Upon, information and belief, the undersigned expressly
certifies or affirms that the contents of any statements of the Licensee made or
referred to in this document are truthful and accurate.):

 

by:

/s/ Elma Hawkins

___2/10/2015____________ Signature of Authorized Official Date     Elma Hawkins,
Ph.D.   Printed Name       President and CEO   Title  

 

I.Official and Mailing Address for Agreement notices:

 

Peter Ho, Ph.D.

Director, Business Development

21900 Burbank Blvd., 3rd Floor

Woodland Hills, CA 91367

Phone: 818-992-3127

Fax: 818-475-5194

Email: peter.ho@lionbio.com

 

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II.Official and Mailing Address for Financial notices (the Licensee’s contact
person for royalty payments)

 

Peter Ho, Ph.D.

Director, Business Development

21900 Burbank Blvd., 3rd Floor

Woodland Hills, CA 91367

Phone: 818-992-3127

Fax: 818-475-5194

Email: peter.ho@lionbio.com

 

Any false or misleading statements made, presented, or submitted to the
Government, including any relevant omissions, under this Agreement and during
the course of negotiation of this Agreement are subject to all applicable civil
and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil
liability) and 18 U.S.C. §1001 (criminal liability including fine(s) or
imprisonment).

 

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APPENDIX A – Patent(s) or Patent Application(s)

 

Patent(s) or Patent Application(s):

 

I.U.S. Patent Application No. 61/771,247 filed March 1, 2013
[E-059-2013/0-US-01]

 

II.PCT Patent Application No. PCT/US2013/038799 filed April 30, 2013
[E-059-2013/0-PCT-02]

 

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APPENDIX B – Licensed Fields of Use and Territory

 

I.Licensed Fields of Use:

 

The use of the Licensed Patent Rights to develop and manufacture autologous
tumor infiltrating lymphocyte adoptive cell therapy products for the treatment
of metastatic melanoma.

 

Tumor infiltrating lymphocytes (TIL) are a subset of T lymphocytes (T cells)
that migrate and are located within a tumor site. TIL isolated from these tumor
sites exhibit natural anti-tumor activity without genetic modifications. For the
avoidance of doubt, cell therapy products involving genetically modified tumor
infiltrating lymphocytes are excluded from Licensed Fields of Use.

 

II.Licensed Territory: Worldwide

 

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APPENDIX C – Royalties

 

Royalties:

 

I.The Licensee agrees to pay to the NIH a noncreditable, nonrefundable license
issue royalty in the amount of [* * *] within sixty (60) days from the effective
date of this Agreement.

 

II.The Licensee agrees to pay to the NIH a nonrefundable minimum annual royalty
in the amount of [* * *] as follows:

 

(a)The first minimum annual royalty is due within sixty (60) days of the
effective date of this Agreement and may be prorated according to the fraction
of the calendar year remaining between the effective date of this Agreement and
the next subsequent January 1; and

 

(b)Subsequent minimum annual royalty payments are due and payable on January 1
of each calendar year and may be credited against any earned royalties due for
sales made in that year.

 

(c)In the case of each of (a) and (b) above, such payments shall be due so long
a Licensee has not terminated this Agreement pursuant to Paragraph 13.4.

 

III.The Licensee agrees to pay the NIH earned royalties of [* * *] on Net Sales
by or on behalf of Licensee or its sublicensees. Licensee shall be entitled to a
credit of [* * *] against the earned royalty rate for each percent point in
excess of [* * *] that Licensee must pay to an unaffiliated licensor(s) for the
manufacture and sale of Licensed Product(s) and Licensed Process(es). Said
credit however, shall not reduce the earned royalty rate due to NIH for Licensed
Product(s) and Licensed Process(es) below [* * *].

 

Notwithstanding anything in this Agreement to the contrary, the earned royalties
set forth in this Section III do not apply to, and are not otherwise due or
payable with respect to, any Licensed Products or Licensed Processes that also
fall within the scope of one or more claims of the patents licensed to the
Licensee by the NIH under the Genesis License. In the event that any products
developed and sold or processes practiced by or on behalf of the Licensee or any
of its sublicensees under this Agreement both qualify as a Licensed Product or
Licensed Process under this Agreement and fall within the scope of one or more
claims of the patents licensed to the Licensee under the Genesis License, then
the Licensee will not be obligated to pay any of the earned royalties set forth
in this Section III with respect to such Licensed Products or Licensed Processes
and the only earned royalties payable by Licensee to the NIH with respect to
such Licensed Products and Processes (if any) will be due and payable in
accordance with and pursuant to the terms of the Genesis License.

 

IV.The Licensee agrees to pay the NIH Benchmark royalties within sixty (60) days
of achieving each Benchmark:

 

(a)[* * *] for successful completion of the first Phase 2 clinical study. For
purposes of this Agreement “successful completion” shall mean a clinical trial
that yields data that is statistically significant and otherwise sufficient to
permit Licensee to file a New Drug Application (NDA).

 

(b)[* * *] for successful completion of the first Phase 3 clinical study.

 

(c)[* * *] upon the first FDA approval or foreign equivalent for a Licensed
Product or Licensed Process.

 

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(d)[* * *] for the First Commercial Sale of a Licensed Product or Licensed
Process in the United States.

 

(e)[* * *] for the First Commercial Sale of a Licensed Product or Licensed
Process in any foreign country for either of Licensed Field of Use.

 

Notwithstanding anything in this Agreement to the contrary, the NIH Benchmark
royalties set forth in this Section IV do not apply to, and are not otherwise
due or payable with respect to, any Licensed Products that also fall within the
scope of one or more claims of the patents licensed to the Licensee by the NIH
under the Genesis License. In the event that any products developed and sold by
or on behalf of the Licensee or any of its sublicensees under this Agreement
both qualify as Licensed Products under this Agreement and fall within the scope
of one or more claims of the patents licensed to the Licensee under the Genesis
License, the Licensee will not be obligated to pay any of the NIH Benchmark
royalties set forth in this Section IV with respect to such Licensed Products
and the only NIH Benchmark royalties payable by the Licensee to the NIH with
respect to such Licensed Products (if any) will be due and payable in accordance
with and pursuant to the terms of the Genesis License.

 

V.The Licensee agrees to pay the NIH:

 

(a) additional sublicensing royalties of [* * *] on the fair market value of any
consideration received for granting each sublicense within sixty (60) days of
the execution of each sublicense if any such sublicense is executed prior to FDA
approval or foreign equivalent for a Licensed Product or Licensed Process within
each Licensed Field of Use from Appendix B; and

 

(b) additional sublicensing royalties of [* * *] on the fair market value of any
consideration received for granting each sublicense within sixty (60) days of
the execution of each sublicense if any such sublicense is executed following
FDA approval or foreign equivalent for a Licensed Product or Licensed Process
within each Licensed Field of Use from Appendix B.

 

(c) Notwithstanding anything in this Agreement to the contrary, any such
consideration will not include the following:

 

(1)Bona fide support for research and development activities corresponding
directly to the development of Licensed Product(s) and/or Licensed Process(es),
which do not exceed Licensee's fully-burdened cost for undertaking such research
and development, and limited to support which is received after the effective
date of this Agreement specifically excluding any support which is used by
Licensee to offset research and development expenses which are incurred prior to
the effective date of this Agreement;

 

(2)Proceeds derived from debt financing received after the effective date of
this Agreement, to the extent that such financing is at market rates;

 

(3)As earned royalties on Net Sales or sales by sublicensee(s).

 

Notwithstanding anything in this Agreement to the contrary, in the event that
the Licensee grants any third party a sublicense both under Article 4 of this
Agreement and under the license rights granted to it in the Background License,
then the Licensee will not be obligated to pay to the NIH any portion of any
Non-Royalty Sublicense Income received by it for granting such sublicense
pursuant to this Section V and the Licensee will only be obligated to pay to the
NIH the percentage of any such sublicensing royalties set forth in Appendix C to
the Background License, in accordance with the terms of the Background License.

 

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APPENDIX D – Benchmarks and Performance

 

The Licensee agrees to the following Benchmarks for its performance under this
Agreement and, within thirty (30) days of achieving a Benchmark, shall notify
the NIH that the Benchmark has been achieved.

 

Benchmark   Deadline         I. [* * *]   [* * *]         II. [* * *]   [* * *]
        III. [* * *]   [* * *]         IV. [* * *]   [* * *]         V. [* * *]
  [* * *]         VI. [* * *]   [* * *]

 

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APPENDIX E – Commercial Development Plan

 

Licensee intends to use the licensed technology to develop and commercialize a
product (based an enriched population of T cells from tumors or enriched TILs)
to treat melanoma.

 

[* * *]

 

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Appendix F – Example Royalty Report

 

Required royalty report information includes:

 

·OTT license reference number (L-XXX-200X/0)

·Reporting period

·Catalog number and units sold of each Licensed Product (domestic and foreign)

·Gross Sales per catalog number per country

·Total Gross Sales

·Itemized deductions from Gross Sales

·Total Net Sales

·Earned Royalty Rate and associated calculations

·Gross Earned Royalty

·Adjustments for Minimum Annual Royalty (MAR) and other creditable payments made

·Net Earned Royalty due

 

Example

Catalog Number   Product Name  Country  Units Sold   Gross Sales
(US$)   1   A  US   250    62,500   1   A  UK   32    16,500   1   A  France 
 25    15,625   2   B  US   0    0   3   C  US   57    57,125   4   D  US   12  
 1,500 

            Total Gross Sales   153,250              Less Deductions:           
      Freight   3,000              Returns   7,000              Total Net Sales 
 143,250              Royalty Rate   8%             Royalty Due   11,460       
      Less Creditable Payments   10,000              Net Royalty Due   1,460 

 

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Appendix G – Royalty Payment Options

 

The OTT License Number MUST appear on payments, reports and correspondence.

 

Automated Clearing House (ACH) for payments through U.S. banks only

 

The NIH encourages its licensees to submit electronic funds transfer payments
through the Automated Clearing House (ACH). Submit your ACH payment through the
U.S. Treasury web site located at: https://www.pay.gov. Locate the "NIH Agency
Form" through the Pay.gov "Agency List".

 

Electronic Funds Wire Transfers

 

The following account information is provided for wire payments. In order to
process payment via Electronic Funds Wire Transfer sender MUST supply the
following information within the transmission:

 

Drawn on a U.S. bank account via FEDWIRE should be sent directly to the
following account:

 

Beneficiary Account: Federal Reserve Bank of New York or TREAS NYC Bank: Federal
Reserve Bank of New York ABA# 021030004 Account Number: 75080031 Bank Address:
33 Liberty Street, New York, NY 10045 Payment Details: License Number
(L-XXX-XXXX)   Name of the Licensee

 

Drawn on a foreign bank account should be sent directly to the following
account. Payment must be sent in U.S. Dollars (USD) using the following
instructions:

 

Beneficiary Account: Federal Reserve Bank of New York/ITS or FRBNY/ITS Bank:
Citibank N.A. (New York) SWIFT Code: CITIUS33 Account Number: 36838868 Bank
Address: 388 Greenwich Street, New York, NY 10013 Payment Details (Line 70): NIH
75080031 License Number (L-XXX-XXXX) Name of the Licensee Detail of Charges
(line 71a): Charge Our

 

Checks

 

All checks should be made payable to “NIH Patent Licensing”

 

Checks drawn on a U.S. bank account and sent by US Postal Service should be sent
directly to the following address:

 

National Institutes of Health (NIH)

P.O. Box 979071

St. Louis, MO 63197-9000

 

Checks drawn on a U.S. bank account and sent by overnight or courier should be
sent to the following address:

 

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US Bank

Government Lockbox SL-MO-C2GL

1005 Convention Plaza

St. Louis, MO 63101

Phone: 314-418-4087

 

Checks drawn on a foreign bank account should be sent directly to the following
address:

 

National Institutes of Health (NIH)

Office of Technology Transfer

Royalties Administration Unit

6011 Executive Boulevard

Suite 325, MSC 7660

Rockville, Maryland 20852

 

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