Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisks denote omissions

 

Exhibit 10.56

Execution Version

 

LICENSE Agreement

 

 

This License Agreement (this “Agreement”) is made and entered into effective as
of November 28, 2016 (the “Effective Date”) by and between Idera
Pharmaceuticals, Inc.,  a Delaware corporation having a place of business at 167
Sidney Street, Cambridge, MA  02139 U.S.A. (“Idera”), and Vivelix
Pharmaceuticals, LTD., a Bermuda exempted company having a place of business at
Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda (“Vivelix”).  Vivelix
and Idera may be referred to herein individually as a “Party” or collectively as
the “Parties.”

 

Recitals

 

Whereas, Idera owns or otherwise controls certain intellectual property rights
relating to oligonucleotides that modulate (including as agonists or
antagonists) one or more toll-like receptors (“TLR”), including the compound
known as IMO-9200, which has demonstrated efficacy in [**], and has been tested
clinically, and potential backup compounds to IMO-9200;

 

Whereas, Vivelix is engaged in the development and commercialization of
pharmaceutical products, including those useful for the treatment of
gastrointestinal indications; and 

 

Whereas, Idera desires to grant an exclusive license under certain intellectual
property rights of Idera with respect to IMO-9200 and certain other compounds
that modulate TLR, and Vivelix desires to obtain such license from Idera, as set
forth in this Agreement below.

 

Now, Therefore, in consideration of the foregoing and of the mutual covenants
herein contained, the Parties, intending to be legally bound, hereby agree as
follows.

 

article 1

DEFINITIONS

The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, will have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.

 

1.1 “Acceptance” means, with respect to an IND for a Product, that thirty (30)
days have passed since such IND has been submitted to the FDA, unless the FDA
notifies the sponsor that the investigations described in the IND are subject to
a clinical hold.

1.2 “Actual Knowledge” means, with respect to the applicable Party, the actual
knowledge, without any obligation of inquiry, of the senior executive(s) of such
Party with responsibility for the subject area of the relevant fact or other
matter.    

1.3 “Affiliate” of a Person means any other Person that (directly or indirectly)
is controlled by, controls or is under common control with such initial
Person.  For the purposes of this definition, the term “control” (and, with
correlative meanings, the terms “controlled by” and “under common control with”)
as used with respect to a Person means:  (a) direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting interest in the Person
in question, or of interests in more than fifty percent (50%) of the income of
the Person in question; provided, however, that if local law requires a minimum
percentage of local ownership, control will be established by direct or indirect
beneficial ownership of one hundred percent (100%) of the maximum ownership
percentage that may, under such local law, be owned by foreign interests; or (b)
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of the Person in question (whether through
ownership of securities or other ownership interests, by contract, or
otherwise).

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1.4 “API Expense” means, with respect to any Compound, (a) the amount paid by
Vivelix for supply of the active pharmaceutical ingredient of such Compound by a
Third Party manufacturer, or (b) the fully  absorbed manufacturing costs and
expenses attributable to the manufacture and supply of bulk supplies of the
active pharmaceutical ingredient of such Compound by Vivelix or its Affiliate
calculated in accordance with GAAP, as applicable. 

1.5 “Applicable Law” means all laws, statutes, ordinances, codes, rules,
regulations, and other pronouncements that have been enacted by a Governmental
Authority and are in force as of the Effective Date or come into force during
the Term, in each case to the extent that the same are applicable to the
performance by a Party of its obligations, or exercise of its rights, under this
Agreement.

1.6 “Available Field” has the meaning set forth in Section 2.3.2.

1.7 “Backup Compound” means any oligonucleotide (whether or not including
modified bases), other than IMO-9200, that:  (a) is Controlled by Idera as of
the Effective Date and whose primary mechanism of action is as a TLR7, 8, or 9
antagonist, excluding any oligonucleotide set forth on Exhibit B; and/or (b)
whose primary mechanism of action is as a TLR7, 8, or 9 agonist or antagonist
and is created at Vivelix’s request under the Research Program.  

1.8 “Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31;
provided, however, that (a) the first Calendar Quarter of the Term will extend
from the Effective Date to the end of the first complete Calendar Quarter
thereafter, and (b) the last Calendar Quarter of the Term will end upon the
expiration or termination of this Agreement.

1.9 “Calendar Year” means (a) for the first Calendar Year of the Term, the
period beginning on the Effective Date and ending on December 31, 2016, (b) for
each Calendar Year of the Term thereafter, each successive period beginning on
January 1 and ending twelve (12) consecutive calendar months later on December
31, and (c) for the last Calendar Year of the Term, the period beginning on
January 1 of the Calendar Year in which this Agreement expires or terminates and
ending on the effective date of expiration or termination of this Agreement.

1.10 “Change of Control” means with respect to a Party:  (a) the sale or
exclusive license of all or substantially all of such Party’s assets or business
relating to this Agreement; (b) a merger, reorganization or consolidation
involving the Party in which the voting securities of the Party outstanding
immediately prior thereto cease to represent at least fifty percent (50%) of the
combined voting power of the resulting or surviving entity (or the parent of the
resulting or surviving entity) immediately after such merger, reorganization or
consolidation; or (c) a person, entity or group acquiring the beneficial
ownership of more than fifty percent (50%) of the voting equity securities of
such Party; provided, however, that, notwithstanding subsections (a), (b), or
(c) above, a sale of beneficial ownership of more than 50% of a Party’s voting
equity securities in a financing or public offering of such Party’s securities
to multiple non-affiliated investors will not constitute a Change of Control.

1.11 “Claims” has the meaning set forth in Section 8.1.

1.12 “COGS Expense” means the fully  absorbed manufacturing costs and
expenses attributable to the manufacture and supply of Products calculated in
accordance with GAAP.  For clarity, “COGS” includes the cost and expenses
incurred in manufacturing the final, finished packaged Product, including
the costs of material (other than API Expense), labor, packing, charges for
scrap, rework and expired goods, materials management, storage, handling and
maintenance and manufacturing overhead consumed (including depreciation and a
reasonable allocation of administrative costs), and costs incurred in connection
with the performance or provision of quality
 control and assurance activities, transportation, packaging and release, stability and other
testing, and any and all payments, including royalties, payable to Third Parties
in connection with the manufacture and supply of Products, in each case, to the
extent directly allocable to the Products.  For clarity, “COGS Expense” will not
include royalties payable to Idera under this Agreement or any costs or expenses
included in API Expense.

1.13 “Combination Product” means a Product containing a Compound and one or more
additional active pharmaceutical ingredients other than a Compound (each such
additional active pharmaceutical ingredient, an

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“Other Product”), whether co-formulated or co-packaged; provided however, in
order to be considered a Combination Product, such Other Product is required to
be supplied with or included as part of the Product per the Regulatory Approval
of such Product.

1.14 “Commercialize,” “Commercializing,” and “Commercialization” means
activities directed to manufacturing, obtaining pricing and reimbursement
approvals for, marketing, detailing, promoting, distributing, importing,
offering for sale, or selling a pharmaceutical product.

1.15 “Commercially Diligent Efforts” means the devotion of such expertise and
resources and such level of efforts as is required to carry out an obligation in
a diligent manner without undue interruption or delay, which is at least
commensurate with the effort, expertise, and resources that would be typically
devoted by a biopharmaceutical company of comparable size and capabilities in
pursuing the Development and Commercialization of similar products owned by or
exclusively licensed to such biopharmaceutical company that are of similar
market potential at a similar stage in its product life, taking into account
relevant factors, including intellectual property coverage, competitive
landscape, and technical, legal, scientific, regulatory or medical factors, but
excluding from such consideration any competitive programs also being
researched, Developed or Commercialized by Vivelix or its Affiliates and the
payments provided under this Agreement.

1.16 “Commencement”  means, when used with respect to a Phase III Trial, the
date on which the first patient is dosed with a Product that is the subject of
such Phase III Trial. 

1.17 “Completion”  means, when used with respect to a Phase I Trial, the date on
which Vivelix completes the statistical analysis for such Phase I Trial. 

1.18 “Compound” means:

(a) IMO-9200; and

(b) (i) during the period beginning on the Effective Date and ending on the
third (3rd) anniversary of the end of the Research Period, any and all Backup
Compound(s); or (ii) during the Term after the third (3rd) anniversary of the
end of the Research Period, any and all Designated Backup Compounds. 

For clarity, “Compound” will not include any Returned Compound.

1.19 “Compound Specific Confidential Information” has the meaning set forth in
Section ‎5.1.

1.20 “Confidential Information” means any and all technical, business or other
information or materials that are disclosed or provided by one Party to the
other Party under or in connection with this Agreement, whether disclosed or
provided in oral, written, graphic, or electronic form, which may include trade
secrets, processes, formulae, Data, Know-How, improvements, inventions, chemical
or biological materials, chemical structures, techniques, marketing plans,
strategies, customer lists, or other information.  The terms of this Agreement
shall be deemed the Confidential Information of each of the Parties.

1.21 “Control” or “Controlled” means, with respect to an item, information, or
an intellectual property right, that the applicable Party owns or has a license
to, and under such item, information, or intellectual property right and has the
ability to disclose and grant a license or sublicense to the other Party as
provided for in this Agreement in, to, and under such item, information, or
intellectual property right without violating the terms of any written agreement
with any Third Party. 

1.22 “Cover,” “Covered,” or “Covering” means, with respect to a Patent Right,
that the practice by a Person of an invention claimed in such Patent Right,
absent any license granted hereunder, would infringe a Valid Claim included in
such Patent Right.

1.23 “Data” means all information, data, or Know-How made, collected or
otherwise generated under or in connection with any pre-clinical, non-clinical,
or clinical trials for Compounds or Products under or in connection

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with this Agreement, including any data, reports and results with respect to any
of the foregoing.  Data refers to both historical as well as future data
generated.

1.24 “Designated Backup Compound” has the meaning set forth in Section 3.5.

1.25 “Development”  means pre-clinical, non-clinical, and clinical drug
discovery, research, or development activities, test method development and
stability testing, toxicology, formulation process development, manufacturing
scale-up, qualification and validation, including quality assurance and quality
control development, and any other activities reasonably related to or intended
to lead to the development and submission of information to a Regulatory
Authority.  When used as a verb, “Develop” means to engage in Development.   

1.26 “Development Milestone Payment” has the meaning set forth in Section 4.2.1.

1.27 “Disclosing Party” has the meaning set forth in Section 5.1.

1.28 “Dollars” or “US$” means the lawful currency of the United States.

1.29 “Enforcing Party” has the meaning set forth in Section 6.4.1.

1.30 “Excluded Field” has the meaning set forth in Section 2.3.3.

1.31 “Expanded Field” has the meaning set forth in Section 2.3.2.

1.32 “Expanded Field Payment Date” has the meaning set forth in Section 2.3.3.

1.33 “Expiration” has the meaning set forth in Section 7.1.

1.34 “EXW” has the meaning set forth in INCOTERMS 2010.

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

1.36 “Field” means any and all treatment, palliation, diagnosis, or prevention
of diseases, conditions, or indications in humans.

1.37 “Filing Party” has the meaning set forth in Section 6.3.1(c).

1.38  “First Commercial Sale” means, with respect to a particular Product, the
first commercial sale to a Third Party end user customer of such Product in the
Territory after Regulatory Approval of such Product has been granted in the
Territory.

1.39 “GAAP”  means generally accepted accounting principles in the United
States.

1.40 “Generic Product” means, on a country-by-country and Product-by-Product
basis, any pharmaceutical product sold by a Third Party, other than pursuant to
a sublicense from Vivelix, its Affiliates or Sublicensees, that:  (a) contains
the same active pharmaceutical ingredients as the applicable Product in a
fixed-dose combination (including a co-packaged, single prescription product)
and in the same dosage form (e.g., oral, injectable, intranasal, etc.) as the
applicable Product or (b) is A/B Rated with respect to such Product or otherwise
approved by the Regulatory Authority in such country as a substitutable generic
for such Product.  For the purposes of this definition, “A/B Rated” means,
inside the United States, “therapeutically equivalent” as determined by the FDA,
applying the definition of “therapeutically equivalent” set forth in the preface
to the then-current edition of the FDA publication “Approved Drug Products With
Therapeutic Equivalence Evaluations” and, outside the United States, such
equivalent determination by the applicable Regulatory Authorities in a country
as is necessary to permit pharmacists or other individuals authorized to
dispense pharmaceuticals under Applicable Law to substitute one product for
another product in the absence of specific instruction from a physician or other
authorized prescriber under Applicable Law.

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1.41 “GI Field” means any and all treatment, palliation, diagnosis, or
prevention of non-malignant gastrointestinal diseases, conditions, or
indications, including those relating to the mouth, esophagus, stomach, small
intestine, colon and rectum, pancreas, gallbladder, bile ducts and liver.  [**].

1.42 “GLP” means the then-current good laboratory practice standards promulgated
or endorsed by the FDA, as defined in U.S. 21 C.F.R. Part 58 (or such other
comparable regulatory standards in jurisdictions outside the United States, as
they may be updated from time to time).

1.43 “GMP” means the applicable current good manufacturing practices as
described in Parts 210 and 211 of Title 21 of the United States Code of Federal
Regulations, together with the latest FDA guidance documents pertaining to
manufacturing and quality control practice (including the FDA’s Guidance for
Industry, Manufacturing, Processing, or Holding Active Pharmaceutical
Ingredients), all as updated, amended and revised from time to time, and, as
applicable, (or such other comparable regulatory standards in jurisdictions
outside the United States, as they may be updated from time to time).

1.44 “Governmental Authority” will mean any supranational, federal, national,
multinational, regional, provincial, county, city, state, or local government,
court, governmental agency, authority, board, bureau, instrumentality,
regulatory body, or other political subdivision, domestic or foreign. 

1.45 “Idera Indemnitees” has the meaning set forth in Section 8.1.

1.46 “IMO-9200” means the compound set forth on Exhibit C.

1.47 “IND” means an Investigational New Drug Application (as defined in the US
Federal Food, Drug, and Cosmetic Act, as amended from time to time (21 U.S.C.
Section 301 et seq.), together with any rules and regulations promulgated
thereunder), or similar foreign application or submission that is required to be
filed with any Regulatory Authority in a foreign jurisdiction before beginning
clinical testing of a Product in human subjects in that jurisdiction.

1.48 “Indemnitee” has the meaning set forth in Section 8.4.

1.49 “Indemnitor” has the meaning set forth in Section 8.4.

1.50 “Inventions” means Sole Inventions and Joint Inventions.

1.51 “Joint Inventions” has the meaning set forth in Section 6.2.1.

1.52 “Joint Patent Committee” or “JPC” has the meaning set forth in Section 6.1.

1.53 “Joint Patent Rights” has the meaning set forth in Section 6.3.2.

1.54 “Joint Research Committee” or “JRC” has the meaning set forth in Section
3.3.

1.55 “Know-How” means technical information and materials, including technology,
software, instrumentation, devices, data, biological materials, assays,
constructs, compounds, inventions (patentable or otherwise), practices, methods,
algorithms, models, knowledge, know‑how, trade secrets, skill and experience
(including all biological, chemical, pharmacological, toxicological, clinical,
assay and related know-how and trade secrets, and all manufacturing data,
manufacturing processes, specifications, assays, quality control and testing
procedures, regulatory submissions and related know‑how and trade
secrets).  Know-How excludes technical information and materials Covered by
Patent Rights.

1.56 “Knowledge” means, with respect to the applicable Party, that such Party
will be deemed to have knowledge of a particular fact or other matter to the
extent that a reasonably prudent person with experience in or with the
biotechnology or pharmaceutical industry and with primary responsibility for the
applicable subject matter would know of such fact or other matter upon
reasonably diligent inquiry.    

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1.57 “Licensed Know-How” means all Know-How that is (i) Controlled by Idera or
its Affiliates as of the Effective Date and necessary to Develop, make, have
made, use, register, sell, offer for sale, Commercialize, import and export
Compounds or Products in the Field in the Territory or (ii) disclosed by Idera
to Vivelix under the terms of or otherwise in connection with this Agreement
during the Term and necessary or useful to Develop, make, have made, use,
register, sell, offer for sale, Commercialize, import and export Compounds or
Products in the Field in the Territory. 

1.58 “Licensed Patents” means any and all (a) patents and patent applications
set forth in Exhibit D, (b) Patent Rights that claim priority to the patents and
patent applications described in subsection (a) of this Section ‎1.58, (c)
Patent Rights that claim a Sole Invention owned by Idera and Idera’s interest in
any Patent Right that claims a Joint Invention, (d) Patent Rights Controlled by
Idera as of the Effective Date that claim inventions that are necessary to
Develop, make, have made, use, register, sell, offer for sale, Commercialize,
import and export Compounds or Products in the Field in the Territory; in each
case to the extent Controlled by Idera and (e) Third Party IP that is the
subject of a Third Party IP Agreement, but excluding (i) any Patent Rights of a
Third Party to which Idera gains Control after the Effective Date that are not
the subject of a Third Party IP Agreement pursuant to Section 6.9.3, and
(ii) any Patent Rights that as a result of a Change of Control with respect to
Idera would fall under the foregoing clause (d) after the effective date of a
Change of Control with respect to Idera if such Patent Rights are Controlled
prior to such effective date by a Third Party that is a party to such Change of
Control or are developed by such Third Party after such Change of Control
without use of Idera Know-How.    

1.59 “Licensed Technology” means Licensed Patents and Licensed Know-How. 

1.60 “Losses” has the meaning set forth in Section 8.1.

1.61 “NDA” means a New Drug Application filed with the FDA that is required for
approval for the applicable Product in the United States.

1.62 “Net Sales”  means, with respect to any Product, the amounts invoiced or
received by Vivelix and its Affiliates and Sublicensees for sales of such
Product in the Field in the Territory to a Third Party less the following
deductions solely to the extent incurred or allowed with respect to such sales,
and solely to the extent such deductions from amounts invoiced or received are
in accordance with GAAP applied consistently, and which are not already
reflected as a deduction from the invoiced price:

(a) charge-back payments, rebates, and fees granted or paid to managed health
care organizations or to federal, state and local governments, their agencies,
and purchasers and reimbursers or to trade customers, in all cases in customary
and reasonable amounts; 

(b) credits or allowances actually granted upon, or reimbursements for, damaged
goods, rejections, or returns of such Product, including returns of such Product
in connection with recalls or withdrawals; 

(c) freight out, postage, shipping, and insurance charges for delivery of such
Product, to the extent separately billed on the invoice; 

(d) taxes or duties levied on, absorbed, or otherwise imposed on and directly
linked to the sale of such Product, including value-added taxes, or other
governmental charges otherwise imposed upon the billed amount, as adjusted for
rebates and refunds, to the extent not paid by the Third Party and only to the
extent such taxes, charges and other amounts are not reimbursed to the paying
party, but excluding all income taxes;

(e) distribution fees allowed or paid to Third Party distributors, brokers, or
agents for Product sales outside the United States, other than sales personnel,
sales representatives, and sales agents employed by such Party (or its
Affiliate);

(f) the actual amount of any write-offs for bad debt relating to such sales
during the applicable period; and

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(g) any other deductions from gross invoiced sales amounts to determine product
sales as reported by Vivelix, its Affiliate, or Sublicensee, as applicable, in
its financial statements in accordance with GAAP; subject to Idera’s prior
written consent not to be unreasonably withheld, delayed, or conditioned. 

Net Sales will be determined in accordance with GAAP, applied consistently. 

Net Sales will not include any payments among Vivelix, its Affiliates and
Sublicensees, to the extent such payors are not the end users of the applicable
Product.  Further, use, supply or donation of Products by Vivelix or its
Affiliates or Sublicensees for no profit (i) in connection with patient
assistance programs, (ii) for charitable or promotional purposes, (iii) for
preclinical, clinical, regulatory or governmental purposes, expanded access,
or compassionate use or other similar programs, (iv) as bona fide samples or as
donations to non‑profit institutions or government agencies for non‑commercial
purposes,  or (v) for
tests or studies reasonably necessary to comply with any Applicable Law
or request by a Regulatory Authority will  not,  in  each
 case,  be  deemed  sales  of  such  Products for purposes of this definition of
“Net Sales.”

 

In the event that the Product is a Combination Product, the Net Sales of the
Combination Product, for the purposes of determining payments hereunder, will be
determined by multiplying the Net Sales of the Combination Product by the
fraction, A/(A+B) where A is the weighted average sale price of the Compound
when sold separately in finished form, and B is the weighted average sale price
of the Other Product(s) sold separately in finished form.

 

In the event that the weighted average sale price of the Compound or of the
Other Product(s) cannot be determined, the Parties will discuss in good faith
and agree, within thirty (30) days after the last day of the Calendar Quarter in
which the inability to determine Net Sales of the Product that is a Combination
Product arises, a commercially reasonable method of determining Net Sales of the
Product, for purposes of determining payments hereunder.  In the event the
Parties are unable to agree within such thirty (30) day period, the matter may
be submitted by either Party to the Chief Executive Officers of each of the
Parties for resolution in accordance with Section 11.1.  During any period in
which the Parties have not agreed on such commercially reasonable method,
Vivelix will make payments hereunder based on Net Sales using the commercially
reasonable method proposed by Vivelix, which method will be described in writing
to Idera at the time of such payment.

 

The weighted average sale price for a Compound or Other Product(s), will be
calculated once each Calendar Year, on a country-by-country basis and such price
will be used with respect to the relevant country during all applicable
reporting periods for the entire following Calendar Year.  When determining the
weighted average sale price of a Compound or Other Product(s), the weighted
average sale price will be calculated by dividing the sales dollars (translated
into U.S. dollars) by the units of active ingredient sold in the relevant
country during the twelve (12) months (or the number of months sold in a partial
Calendar Year) of the preceding Calendar Year for the respective Compound or
Other Product(s).  In the initial Calendar Year, a forecasted weighted average
sale price will be used for the Compound or Other Product(s).  Any over or under
payment due to a difference between forecasted and actual weighted average sale
prices will be paid or credited in the first payment of the following Calendar
Year.

 

1.63 “Non-Enforcing Party” has the meaning set forth in Section 6.4.1.

1.64 “Non-Prosecuting Party” has the meaning set forth in Section 6.3.2

1.65  “Patent Rights” means (a) patents and patent applications, and any foreign
counterparts thereof, (b) all divisionals, continuations, continuations-in-part
of any of the foregoing, and any foreign counterparts thereof, and (c) all
patents issuing on any of the foregoing, and any foreign counterparts thereof,
together with all registrations, reissues, re‑examinations, supplemental
protection certificates, substitutions or extensions thereof, and any foreign
counterparts thereof.

1.66 “Patent Challenge” means any direct dispute or challenge, or any knowing or
willful assistance in the dispute or challenge, of the validity, patentability,
or enforceability of any Licensed Patent or any claim thereof, or opposition or
assistance in the opposition of the grant of any letters patent within the
Licensed Patents, in any legal or administrative proceedings, including in a
court of law, before the PTO or other agency or tribunal in any jurisdiction, or
in arbitration including, without limitation, by reexamination, inter partes
review, opposition, interference, post-grant review, nullity proceeding,
preissuance submission, third party submission, derivation

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proceeding or declaratory judgment action; provided, however, that the term
Patent Challenge shall not include arguments, or any other statements or
allegations, made by or on behalf of Vivelix, a Vivelix Affiliate, or a
Sublicensee that (a) distinguish the inventions claimed in patents or patent
applications owned or controlled (except by virtue of this Agreement) by
Vivelix, a Vivelix Affiliate, or a Sublicensee from those claimed in the
Licensed Patents (i) in the ordinary course of ex parte prosecution of such
patents or patent applications owned or controlled by Vivelix, a Vivelix
Affiliate, or a Sublicensee, including any reissue or reexamination patents or
patent applications or (ii) in inter partes,  post grant review proceedings,
oppositions, nullity proceedings, reissue proceedings,
reexamination  proceedings, and other similar proceedings before the PTO or
other agency or tribunal in any jurisdiction, or in any arbitration or
litigation, wherein such patents or patent applications owned or controlled by
Vivelix, a Vivelix Affiliate, or a Sublicensee have been challenged; or (b) are
made in connection with a response to a claim or allegation that Vivelix, a
Vivelix Affiliate, a Sublicensee, or any of their respective direct or indirect
customers infringes or may infringe any Patent Rights owned, Controlled or
enforceable by Idera, its Affiliates, or any of their respective successors or
assigns. 

1.67 “Person” means any individual, firm, corporation, partnership, limited
liability company, trust, business trust, joint venture company, Governmental
Authority, association, or other entity.

1.68 “Phase I Trial” means a human clinical trial of a Product in any country,
the principal purpose of which is a preliminary determination of safety,
pharmacokinetics, and pharmacodynamic parameters in healthy individuals or
patients, as described in 21 C.F.R. 312.21(a), or equivalent clinical trial in a
country other than the United States.

1.69 “Phase III Trial” means a human clinical trial of a Product in any country
on a sufficient number of subjects that is designed to establish that a
pharmaceutical product is safe and efficacious for its intended use, and to
determine warnings, precautions, and adverse reactions that are associated with
such pharmaceutical product in the dosage range to be prescribed, which trial is
intended to support Regulatory Approval of  a Product, as described in 21 C.F.R.
§ 312.21(c).

1.70 “Product” means any product, including any Combination Product, containing
a Compound, regardless of its finished form, formulation or dosage.

1.71 “Prosecuting Party” has the meaning set forth in Section 6.3.2.

1.72 “PTO” means the United States Patent and Trademark Office.

1.73 “Receiving Party” has the meaning set forth in Section 5.1.

1.74 “Reference Level” has the meaning set forth in Section 4.3.4(c)(ii).

1.75 “Regulatory Approval” means approval of an NDA by the FDA for the
applicable Product in the United States, or approval by the applicable
Regulatory Authority of a Regulatory Approval Application that is equivalent to
an NDA in a country other than the United States.

1.76 “Regulatory Approval Application” means an application for approval of an
NDA by the FDA for the applicable Product in the United States, or an
application for approval by the applicable Regulatory Authority of an
application that is equivalent to an NDA in a country other than the United
States.

1.77 “Regulatory Authority” means any national or supranational Governmental
Authority, including the FDA, that has responsibility for granting any licenses
or approvals or granting pricing or reimbursement approvals necessary for the
development, marketing, and sale of a Product in any country.

1.78 “Regulatory Exclusivity” means any exclusive marketing rights or data
exclusivity rights conferred by any Governmental Authority under Applicable Law
with respect to a Product in a country or jurisdiction in the Territory to
prevent Third Parties from Commercializing such Product in such country or
jurisdiction, other than a Patent Right, including orphan drug exclusivity,
pediatric exclusivity, rights conferred in the U.S. under the Hatch-Waxman Act
or the FDA Modernization Act of 1997, in the EU under Directive 2001/83/EC, or
rights similar thereto

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in other countries or regulatory jurisdictions in the Territory. 

1.79 “Regulatory Filings” means any and all Regulatory Approval Applications,
filings, modifications, amendments, supplements, revisions, reports,
submissions, authorizations, and Regulatory Approvals, and associated
correspondence with any Regulatory Authority relating to Products anywhere in
the Territory, including any reports or amendments necessary to maintain
Regulatory Approvals. 

1.80 “Research Period” has the meaning set forth in Section 3.4.1.

1.81 “Research Program” has the meaning set forth in Section 3.4.1.

1.82 “Returned Compound” has the meaning set forth in Section 3.5.

1.83 “ROFN End Date” has the meaning set forth in Section 2.4.

1.84 “Royalties” has the meaning set forth in Section 4.3.1.

1.85 “Royalty Term” has the meaning set forth in Section 4.3.2. 

1.86 “Sales Milestone Payment” has the meaning set forth in Section 4.2.2.

1.87 “Sole Inventions” has the meaning set forth in Section 6.2.1.

1.88 “Sublicensee” means any Third Party that is sublicensed under the Licensed
Technology by Vivelix to Develop, make, have made, use, register, sell, offer
for sale, Commercialize, import and export Products, but will not include any
wholesaler or distributor or other contractor under Section ‎2.2.6.  

1.89 “Term” has the meaning set forth in Section 7.1.

1.90 “Territory” means worldwide.

1.91 “Third Party” means any Person other than Vivelix, Idera, and their
respective Affiliates.

1.92 “Third Party IP” has the meaning set forth in Section 6.9.1.

1.93 “Third Party IP Agreement” has the meaning set forth in Section 6.9.3.

1.94 “TLR7, 8, or 9” means TLR7, TLR8, or TRL9, and any combination of such
receptors.

1.95 “Transferred Materials” has the meaning set forth in Section 3.8.

1.96 “United States” or “U.S.” means the United States of America and all its
territories and possessions.

1.97 “Valid Claim”  means a claim of (a) an issued and unexpired patent or a
supplementary protection certificate within the Licensed Patents, that has not
been held permanently revoked, unenforceable, or invalid by a decision of a
court or other Governmental Authority of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal and that is not admitted to be
invalid or unenforceable through reissue, disclaimer, or otherwise (i.e., only
to the extent the subject matter is disclaimed or is sought to be deleted or
amended through reissue), and (b) a pending patent application that has not been
abandoned, finally rejected or expired without the possibility of appeal or
refiling, provided however, that “Valid Claim” will exclude any such pending
claim in an application that has not been granted within five (5) years
following the filing of such claim, or a claim not materially different
therefrom, in any application in the respective country (unless and until such
claim is granted).    

1.98 “Vivelix Indemnitee” has the meaning set forth in Section 8.2.

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article 2

LICENSE GRANT

2.1 License Grant.  Subject to the terms and conditions of this Agreement, Idera
hereby grants to Vivelix an exclusive (even as to Idera and its Affiliates),
transferable (in accordance with Section 12.1), perpetual, irrevocable (except
as provided for upon termination of this Agreement), royalty-bearing license,
with the right to grant sublicenses (in accordance with Section 2.2), under the
Licensed Technology, to Develop, make, have made, use, register, sell, offer for
sale, Commercialize, import and export Compounds or Products in the Field in the
Territory.    

2.2 Sublicensing.

2.2.1 Vivelix will have the right to grant sublicenses under the Licensed
Patents through multiple tiers of sublicenses; provided that:

(a) Vivelix will not have the right to grant any sublicenses under the Licensed
Technology with respect to IMO-9200 in the United States until the date of
Completion of the first Phase I Trial for IMO-9200 [**], except as may be
necessary to utilize the services of a Third Party in accordance with
Section ‎2.2.6; and

(b) any such sublicense shall include additional intellectual property rights
controlled by Vivelix that are not licensed to it by Idera under this
Agreement.  For clarity, such additional intellectual property rights include
data, results, or other know-how and need not be patent rights.

2.2.2 Vivelix will remain responsible for the performance of Sublicensees under
this Agreement, including for all payments due hereunder, and any act or
omission on the part of a Sublicensee that would constitute a breach of this
Agreement if such act or omission had been on the part of Vivelix will be deemed
a breach of this Agreement by Vivelix.  Idera agrees and acknowledges that in
the event (a) of an act or omission by a Sublicensee that has given rise to a
right of Idera to terminate this Agreement in accordance with Section 7.3 and
(b) Idera has provided notice of termination of this Agreement with respect to
the field and country that are the subject of the applicable sublicense in
accordance with Section 7.3, such termination shall not be effective if Vivelix
has cured the applicable material breach or terminated all sublicenses granted
to such Sublicensee hereunder prior to one hundred eighty (180) days after the
date on which Vivelix receives such notice from Idera.  Vivelix will provide
Idera with notice of each sublicense promptly, but in any case within ten (10)
business days, after execution of such sublicense agreement.  In addition,
Vivelix will provide to Idera with such notice a copy of any such sublicense
agreement, provided that Vivelix may redact confidential technical and financial
terms from such copy of such sublicense agreement.    

2.2.3 Each sublicense granted by Vivelix pursuant to Section 2.2.1 will be
subject and subordinate to the terms and conditions of this Agreement and will
contain terms and conditions consistent with those in this Agreement.  Without
limitation, each sublicense granted by Vivelix pursuant to Section 2.2.1 must
contain indemnification and insurance provisions in favor of Idera that are no
less protective of Idera as such provisions in this Agreement and a provision
stating that in the event of a Patent Challenge by the Sublicensee then Vivelix
shall be entitled to terminate the applicable sublicense.  Idera agrees and
acknowledges that in the event of a Patent Challenge by a Sublicensee, if
Vivelix has terminated all sublicenses granted to such Sublicensee hereunder
within ninety (90) days after Vivelix has knowledge of such Patent Challenge,
Idera shall not terminate this Agreement on account of such Patent Challenge by
such Sublicensee. 

2.2.4 Unless a sublicense provides that it shall terminate upon termination of
this Agreement, if this Agreement terminates for any reason other than
termination by Vivelix pursuant to Section ‎7.2, then at the option of any
Sublicensee not in breach of the applicable sublicense (or any provision of this
Agreement applicable to such Sublicensee) such Sublicensee shall, from the
effective date of such termination, automatically become a direct licensee of
Idera under, and subject to the terms and conditions of, this Agreement, subject
only to modifications with respect to territory, field and exclusivity
consistent with the scope of the applicable sublicense and so as to accommodate
all such Sublicensees; provided, however, that such Sublicensee cures all
breaches by Vivelix of this

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Agreement; and provided further, however that Idera (a) shall not have under any
such direct license any obligations that are greater than or inconsistent with
the obligations of Idera under this Agreement or any fewer rights than it has
under this Agreement, and (b) Idera shall have no liability for any obligations
arising prior to effective date of such direct license or for any obligations of
Vivelix whenever arising and Idera shall be released from any and all liability
relating to such obligations.

2.2.5 Such Sublicensees shall have the right to grant further sublicenses to
Third Parties of same or lesser scope as its sublicense from Vivelix under the
licenses contained in Section 2.1, provided that such further Sublicenses shall
be in accordance with and subject to all of the terms and conditions of this
Section 2.2 (i.e., such Sublicensee shall be subject to this Section 2.2 in the
same manner and to the same extent as Vivelix).  For clarity, any person or
entity to whom a Sublicensee grants a sublicense as permitted by the terms of
this Agreement shall be deemed to be a Sublicensee for purposes of this
Agreement.

2.2.6 Subcontracting.  Vivelix will be entitled to utilize the services of Third
Parties, including Third Party contract research organizations and service
providers to perform its Development, manufacturing, and Commercialization
activities; provided that Vivelix will remain at all times fully liable for its
respective responsibilities under this Agreement, and any act or omission on the
part of such Third Party that would constitute a breach of this Agreement if
such act or omission had been on the part of Vivelix will be deemed a breach of
this Agreement by Vivelix.     

2.3 Negative Covenants; Expanded Field.    

2.3.1 During the Term, neither Vivelix nor its Affiliates or Sublicensees will
Develop or Commercialize Products outside of the GI Field, except in accordance
with Section 2.3.2. 

2.3.2 During the Term, if Vivelix desires to Develop and Commercialize Products
in an additional field in the Field but outside of the GI Field, Vivelix will
notify Idera in writing of such request.  Idera shall respond to such request,
within thirty (30) days of receiving such request, by notifying Vivelix in
writing that  either (a) such additional field is not available (i) due to [**]
to Vivelix and/or (ii) because such additional field is not available on an
exclusive basis consistent with the exclusivity granted hereunder with respect
to Products in the GI Field or (b) such additional field is available.  If Idera
has notified Vivelix within such thirty (30) day period that such additional
field is available (such field, an “Available Field”), Vivelix will be permitted
to conduct Development work in such Available Field for the period of time prior
to the Expanded Field Payment Date unless Vivelix has paid the payment described
in the next sentence on or before the Expanded Field Payment Date. If Vivelix
has submitted an IND for a Product for such Available Field during such period
and makes a one-time payment of [**] Dollars (US$[**]) to Idera at any time
prior to the earlier of (A) four (4) years after the date of such availability
notice from Idera or (B) the date that is five (5) days after the date of the
first Acceptance of an IND for a Product in such Available Field, then,
effective as of the date of such payment (the “Expanded Field Payment Date”),
such Available Field will be defined as an “Expanded Field”, Vivelix, its
Affiliates and its Sublicensees will have the right to Develop or Commercialize
Products both in the GI Field and in the Expanded Field, and Section 2.3.3 will
apply with respect to the Expanded Field. 

2.3.3 During the Term, neither Idera nor its Affiliates will Develop or
Commercialize, nor shall Idera grant to any Third Party any right to Develop or
Commercialize, any oligonucleotide (whether or not using modified bases) whose
primary mechanism of action is as a TLR agonist or TLR antagonist, in any
territory for any indication in the Excluded Field (as defined in this Section
2.3.3 below) or any Expanded Field.  Prior to the applicable Expanded Field
Payment Date, Idera will have the right to Develop and/or Commercialize, and to
license to Third Parties the right to Develop and/or Commercialize, any
oligonucleotide (whether or not using modified bases) whose primary mechanism of
action is as a TLR agonist or TLR antagonist, other than a Compound, in any
field outside of the Excluded Field, including within the applicable potential
Expanded Field; provided that, prior to granting any such license to a Third
Party with respect to any Available Field, Idera will notify Vivelix and give
Vivelix thirty (30) days to convert such Available Field into the Expanded Field
in accordance with Section 2.3.2 by paying to Idera the [**] Dollars (US$[**])
payment set forth in Section 2.3.2.  If Idera has granted any rights to any
Third Party with respect to any oligonucleotide (whether or not using modified
bases) whose primary mechanism of action is as a TLR agonist or TLR antagonist,
other than a Compound, within a potential Expanded Field prior to the applicable
Expanded Field Payment Date, such grant shall not be reduced or otherwise
affected and the first sentence of this Section 2.3.3 shall

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not apply with respect to such product in such Expanded Field.  “Excluded Field”
means any and all treatment, palliation, diagnosis, or prevention of
non-malignant gastrointestinal diseases, conditions, or indications relating to
the mouth, esophagus, stomach, small intestine, colon and rectum.  [**]. 

2.3.4 The Parties acknowledge and agree that this Section 2.3 has been
negotiated by the Parties, the limitations on the Parties’ activities set forth
in this Section 2.3 are reasonable, valid, and necessary in light of the
Parties’ circumstances and necessary for the adequate protection of the
Products.  If, notwithstanding the foregoing, a court of competent jurisdiction
determines that the limitations set forth in this Section 2.3 are unenforceable
under Applicable Laws, the court is hereby requested and authorized by the
Parties to revise this Section 2.3 to include the maximum limitations allowable
under Applicable Laws.

2.4 Right of First Negotiation.  During the Term, Idera hereby grants to Vivelix
a right of first negotiation to obtain an exclusive, sublicensable license, to
Develop, make, have made, use, register, sell, have sold, offer for sale,
Commercialize, import and export any compound (other than Compounds) Controlled
by Idera during the Term that has activity (as evidenced in preclinical models
or in clinical development) in the field of inflammatory bowel disease and any
and all intellectual property rights Controlled by Idera at any time covering
the foregoing, and for which Idera has undertaken an active program to seek a
partner for such field; provided, however, that Vivelix shall have no such right
with respect to any compound that has activity in the field of inflammatory
bowel disease but for which Idera believes, in its good faith judgment based on
data, inflammatory bowel disease will not be a lead indication.  Idera will
notify Vivelix in writing when any such compound is available for license and
send to Vivelix all Data Controlled by Idera regarding such compound, which will
be Confidential Information of Idera and subject to the confidentiality
obligations set forth in Article 5.  If Vivelix provides to Idera, within
forty-five (45) days after receipt of such data, a notice that includes the
terms on which Vivelix would like to obtain such license under such intellectual
property rights to such compound in the field of inflammatory bowel disease or
the GI Field or, if agreed to by Idera any broader field, as determined by
Vivelix in such notice (the “Chosen Disease Field”), Idera will negotiate in
good faith exclusively with Vivelix for a period of ninety (90) days thereafter
(or longer if such period is extended upon mutual agreement of the Parties) (the
“ROFN End Date”) the terms of a definitive license agreement with respect to
such compound in the Chosen Disease Field.  If the Parties do not agree on the
terms of a definitive license agreement with respect to such compound during
such time period, Idera will be permitted to license such compounds to a Third
Party licensee, provided that prior to the date that is one (1) year after the
ROFN End Date, Idera will not be permitted to grant a license to such compound
in the Chosen Disease Field to a Third Party on terms that are less favorable to
Idera when taken as a whole than the terms last offered by Vivelix.  For
purposes of the immediately preceding sentence, if Idera has chosen to grant to
a Third Party a license to such compound in one or more fields that together are
more broad than the Chosen Disease Field, such broader field shall be considered
an element of such license that is more favorable to Idera.  If Idera does not
execute an agreement with a Third Party licensee during such one (1)-year
period, Vivelix’s right of first negotiation set forth above will again apply
with respect to such compound if since the date on which Idera last sent to
Vivelix all Data Controlled by Idera regarding such compound, Idera has
generated or obtained additional, material data with regard to such compound and
its use in the field of inflammatory bowel disease. 

2.5 Non-Assert.    Idera will not, and Idera shall cause its Affiliates not to,
assert against Vivelix, its Affiliates or Sublicensees, any claim, or institute
any action or proceeding, whether at law or equity, under any Patent Rights of
Idera or its Affiliates necessary to Develop, make, have made, use, register,
sell, offer for sale, Commercialize, import and export Compounds or Products in
the Field in the Territory, based on Vivelix’s, its Affiliates’ or Sublicensees’
Developing, making, having made, using, registering, selling, offering for sale,
Commercializing, importing and exporting any Compound or Product as permitted
under the terms of this Agreement.  This Section 2.5 shall be binding upon, and
inure to the benefit of, the Parties, their successors, and assigns; provided,
however, that such Patent Rights of Idera or its Affiliates exclude any Patent
Rights that would fall under the foregoing non-assert after the effective date
of a Change of Control with respect to Idera if such Patent Rights are
Controlled prior to such effective date by a Third Party that is a party to such
Change of Control or are developed by such Third Party after such Change of
Control without use of Idera Know-How. 

2.6 No Implied License; Retained Rights.    No right or license under any
intellectual property rights is granted or will be granted by either Party by
implication.  All rights or licenses are or will be granted only as expressly
provided in this Agreement. 

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article 3

DEVELOPMENT 

3.1 Responsibilities; Diligence Obligations.    

3.1.1 Responsibilities.  As between the Parties, Vivelix will have the sole
right to Develop and Commercialize Products, including determining the
regulatory strategy for seeking (if and when appropriate) Regulatory Approvals
and Regulatory Exclusivity for  Compounds or Products, seeking and (if
appropriate) filing for such Regulatory Approvals and Regulatory Exclusivity for
Compounds or Products, preparing, submitting, and maintaining any and all
Regulatory Filings, seeking any necessary Regulatory Approvals from Regulatory
Authorities for Product labeling and promotional materials to be used in the
applicable jurisdiction(s) in connection with Commercializing Products.  Idera
will not have the right to prepare, submit, or maintain any Regulatory Filings
or Regulatory Approvals for Compounds or Products.  Vivelix will be responsible
for all costs and expenses of preparing, maintaining, formatting, and filing
Regulatory Filings for Products and for all other costs and expenses in
connection with seeking and maintaining Regulatory Approval for Compounds or
Products. 

3.1.2 Diligence Obligations.  Vivelix will use Commercially Diligent Efforts to
Develop and Commercialize at least one Product in the Field in the Territory,
including seeking (if and when appropriate) Regulatory Approvals and Regulatory
Exclusivity for Compounds or Products, seeking and (if appropriate) filing for
such Regulatory Approvals and Regulatory Exclusivity for Compounds or Products,
preparing, submitting, and maintaining any and all Regulatory Filings, seeking
any necessary Regulatory Approvals from Regulatory Authorities for Product
labeling and promotional materials to be used in the applicable jurisdiction(s)
in connection with Commercializing Products.  Vivelix will deliver to Idera on
or before April 1 of each Calendar Year a written report summarizing in
reasonable detail the efforts of Vivelix in the prior year to meet its
obligations to Develop and Commercialize at least one Product in the Field in
the Territory and the planned Development and Commercialization activities to be
conducted by Vivelix in the current Calendar Year.  Vivelix will respond
promptly to any reasonable inquiries by Idera with regard to the substance of
any such report.

3.2 Development Information.  Within thirty (30) days after the Effective Date,
Idera will transfer in electronic format all Regulatory Filings, Data and all
information, materials, and other Licensed Know-How in a tangible form that can
be transferred, including copies of preclinical, non-clinical, and clinical Data
and information, databases, manufacturing Know-How and materials, and copies of
any and all relevant market research in Idera’s possession (such as competitive
landscape and market opportunity research) relating to Compounds or Products for
the GI Field or positive controls and information relating to all manufacturing
activities, relationships, and Know-How that are necessary to the Development,
manufacture, or Commercialization of Compounds or Products, including the
Transferred Materials, at no cost or expense to Vivelix.  Such information and
materials, other than Regulatory Filings, will be deemed to be within “Licensed
Know-How”.  For clarity, after transfer of such manufacturing information,
Vivelix will have sole responsibility for chemistry and manufacturing controls
activities related to Compounds or Products.  Thereafter, from time to time (but
in no event less than once per Calendar Quarter) during the Research Period and
thereafter until the earlier of (a) the date of filing of the first NDA for a
Product or (b) in the event of a Change of Control with respect to Idera, the
date that is the third (3rd) anniversary of the expiration date of the Research
Period, Idera, at Idera’s cost and expense, will use reasonable efforts to
provide Vivelix with access to any and all such information and materials
developed after the Effective Date and not previously provided to
Vivelix.  Vivelix will have the right to incorporate such Licensed Know-How in
any Regulatory Filing and to provide such Licensed Know-How to Regulatory
Authorities to the extent reasonably necessary in connection with the exercise
of the license granted to Vivelix in accordance with Sections 2.1 and 2.3;
provided, however, in either case, Vivelix uses diligent efforts to maintain, in
accordance with Article 5, the confidentiality of any Licensed Know-How that has
not been publicly disclosed by Idera through requests for confidential
treatment, protective orders or other lawful means. 

3.3 Joint Research Committee.  Promptly after the Effective Date, the Parties
will establish a joint research committee (the “JRC”) for managing activities
under the Research Program, consisting of two (2) representatives of each Party
with expertise relevant to research and Development of pharmaceutical
compounds.  In particular, the JRC will have the following tasks:  (a) if
requested by Vivelix pursuant to Section 3.4.1, agreeing on an initial Research
Program and coordinating the activities undertaken pursuant to such Research
Program, as modified from time to time pursuant to this Section 3.3 and Section
3.4; (b) ensuring timely performance of the

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activities under the Research Program; (c) making proposals on achievement of
scientific or technical objectives; (d) recommending potential Backup Compounds
for creation or characterization under the Research Program; (e) advising on
designating compounds as Designated Backup Compounds; (f) facilitating the
exchange of information between the Parties for purposes of patent filings; and
(g) preparing presentations to the Parties.  The JRC will meet not less than
twice per Calendar Year.  Meetings may be held in person or by means of
telecommunication (telephone, video, or web conference).  The JRC may meet more
frequently by agreement of the Parties or at the reasonable request of a Party
with not less than twenty (20) business days’ notice to the other.  Each Party
will alternately be responsible for organizing the meetings of the JRC and for
distributing the agenda of the meetings.  Such responsible Party will include on
the agenda any item within the scope of the responsibility of the JRC that is
requested to be included by a Party, and will distribute the agenda to the
Parties no less than one week before any meeting of the JRC.  Each Party may,
with the prior approval of the other Party (which will not be unreasonably
withheld), invite non-voting employees, consultants, or advisors (provided that
such employees, consultants, and advisors are under an obligation of
confidentiality no less stringent than the terms set forth in Article 5) to
attend any meeting of the JRC.  Each Party will bear its own costs associated
with holding and attending JRC meetings.  The Party that is responsible for the
organization of the respective JRC meeting will prepare the minutes, and send it
to all members of the JRC for review and approval within twenty (20) business
days after the meeting.  Each Party will send any objections against the
accuracy or completeness of such minutes by providing written notice to the
other members of the JRC within ten (10) business days after receipt of the
minutes.  In the event of any such objection that is not resolved by mutual
agreement of the Parties, such minutes will be amended to reflect such
unresolved dispute.  The JRC will take action by consensus, with each Party
having a single vote, irrespective of the number of representatives actually in
attendance at a meeting, or by a written resolution signed by the designated
representatives of each Party.  If the JRC is unable to reach consensus on a
particular matter, then such matter may be submitted by either Party to the
Chief Executive Officers of each of the Parties for resolution.  If the Chief
Executive Officers are unable to reach consensus on such matter within ten (10)
business days after such submission, then Vivelix will have the final
decision-making authority with respect to such matter.  The JRC will not have
any power to amend this Agreement, to impose any obligation on a Party that is
not set forth in this Agreement or to increase the scope of any obligation of a
Party that is set forth in this Agreement, and will have only such powers as are
specifically delegated to it under this Agreement.

3.4 Research Program. 

3.4.1 During the Research Period, Idera will create and characterize, at
Vivelix’s request, potential Backup Compounds and perform research on Backup
Compounds.  For clarity, such research and activities may include research on
IMO-9200, (a) in comparative testing of such Backup Compounds and in the
establishment or optimization of animal models and (b) in such newly established
assays as Idera may reasonably agree.  Such activities may include compound
synthesis, in vitro and ex vivo pharmacology, nonclinical in vivo efficacy and
pharmacokinetics, and non-GLP toxicology and toxicokinetics.  Such activities
are subject to modification as mutually agreed upon by the JRC and collectively
are referred to as the “Research Program”.  The Parties will conduct the
activities under the Research Program commencing on the Effective Date and
ending on the first (1st) anniversary of the Effective Date; provided that
Vivelix may extend such period by two one (1)-year periods by providing written
notice to Idera not later than thirty (30) days prior to the end of the
then-current year, for up to a total of three (3) years after the Effective Date
(such period, as extended if applicable, the “Research Period”).

3.4.2 No later than thirty (30) days prior to the first day of each year during
the Research Period, the Parties will mutually agree on the number of full-time
equivalent(s) (not to exceed [**] full-time equivalents) who will perform
activities under the Research Program during such year of the Research
Period.  Depending on resource availability and research priorities, the JRC may
also choose to outsource one or more of such activities.  Vivelix will
compensate Idera for work actually performed under the Research Program by its
mutually agreed upon full-time equivalent(s), on the first day of each Calendar
Quarter during which such full-time equivalent(s) will perform activities under
the Research Program, at an annualized rate commensurate with such full-time
employee equivalent(s)’ skill and background, such rate to be agreed by the
Parties no later than thirty (30) days prior to the first day of each year
during the Research Period, which rate shall not exceed [**] Dollars ($[**]) per
full-time employee equivalent for the first year during the Research Period and
no less than [**] Dollars ($[**]) per full-time employee equivalent for each
subsequent year during the Research Period, without the prior written agreement
of Vivelix.  Such annualized rate shall include the costs and expenses
associated with employment (e.g., salary, benefits, desk and laboratory space,
equipment usage, and any and all administrative expenses related to such
employment).  Vivelix will compensate Idera for supplies and third party costs
incurred by Idera for work actually performed under the

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Research Program.  All supplies and third party costs for the Research Program
must be approved by the JRC.  All pass-through costs must be invoiced without
markup.

3.4.3 All Data generated in the Research Program will be provided to Vivelix
promptly after it is generated, e.g., electronic lab books, and will be compiled
into study reports in a timely fashion.  Vivelix will be solely responsible for
formatting such Data in a manner considered appropriate for submission to
Regulatory Authorities.  The available Data and the overall progress of the
Research Program will be reviewed at each JRC meeting.  Vivelix will conduct all
subsequent work on such Backup Compounds (including IND-enabling work, all
additional clinical and non-clinical, regulatory, manufacturing, and
Commercialization activities).

3.5 Designation of Backup Compounds.  Any and all Backup Compounds that were the
subject of the Research Program will continue to be deemed to be Backup
Compounds during the Research Period and through the period ending on the third
(3rd) anniversary of the end of the Research Period.  Vivelix shall have the
right to designate, on or before the third (3rd) anniversary of the end of the
Research Period, any such Backup Compound to remain a Backup Compound during the
remainder of the Term after such third (3rd) anniversary, by making a payment of
[**] Dollars (US$[**]) per designated Backup Compound (each, a “Designated
Backup Compound”).  Exhibit D will be updated throughout the Term to include all
Patent Rights Controlled by Idera that Cover Designated Backup Compounds.  If
Vivelix does not so designate such a Backup Compound as a Designated Backup
Compound on or before the third (3rd) anniversary of the end of the Research
Period, all rights to such undesignated Backup Compound will revert to Idera,
effective as of the third (3rd) anniversary of the end of the Research Period,
and any such non-designated compound will no longer be deemed to be a “Backup
Compound” for purposes of this Agreement (such compound, a “Returned
Compound”).  Thereafter, in the event Vivelix elects to include such Returned
Compound as a Backup Compound subject to this Agreement, then, effective upon
payment by Vivelix of [**] Dollars (US$[**]), such Returned Compound will be
deemed to be a Designated Backup Compound; provided that neither Idera nor any
of its Affiliates is then conducting research, Development, or Commercialization
on such Returned Compound and that Idera has not licensed or sublicensed rights
with respect to such Returned Compound to a Third Party.  For clarity, any
Backup Compound set forth on Exhibit A that was not the subject of the Research
Program during the Research Period will become a Returned Compound upon the end
of the Research Period.  With respect to each Returned Compound, Vivelix agrees
to negotiate, and to cause any of its relevant Affiliates to negotiate, in good
faith an agreement pursuant to which Vivelix and such Affiliates would transfer,
deliver and assign to Idera all right, title and interest in any Regulatory
Approvals, regulatory communications and Regulatory Filings, Data, materials,
and Know-How relating to such Returned Compound Controlled by Vivelix and its
Affiliates, subject to payments to reimburse Vivelix’s costs and expenses
incurred in connection therewith and a reasonable royalty on sales of such
Related Compound and products incorporating it.

3.6 Regulatory Filings.  Vivelix, or its Affiliates or Sublicensees, will own
and control any and all Regulatory Approvals and any and all other Regulatory
communications and Regulatory Filings received and submitted in connection with
seeking and maintaining Regulatory Approvals for Products.  Within ten (10) days
after the Effective Date, Idera and any and all Affiliates of Idera hereby
assign, transfer, and deliver, and will assign, transfer, and deliver, to
Vivelix all right, title and interest in any such Regulatory Approvals,
regulatory communications and Regulatory Filings Controlled by Idera and its
Affiliates with respect to Products as of the Effective Date, including IND
Number [**]. 

3.7 Regulatory Communications.  As between the Parties, Vivelix will be the sole
contact with the applicable Regulatory Authorities and will be solely
responsible for all communications with such Regulatory Authorities that relate
to any Regulatory Approvals or other Regulatory Filings prior to and after any
Regulatory Approval with respect to the Products.  Except as may be required by
Applicable Law, Idera will not communicate regarding Products with any
Governmental Authority unless explicitly requested or permitted in writing to do
so by Vivelix or unless so ordered by such Governmental Authority, in which case
Idera will provide to Vivelix notice of such order as soon as practicable, but
in no event later than thirty-six (36) hours after receipt of such order, unless
legally prohibited from doing so.  Idera will provide to Vivelix, as soon as
reasonably possible, unless legally prohibited from doing so, copies of, and all
information in its Control pertaining to, any material notices, questions,
actions, and requests from or by any and all Regulatory Authorities, either
before or after the Effective Date, with respect to Products, including any
notices of non-compliance with Applicable Law in connection with any Product
(such as warning letters or other notices of alleged non-compliance), audit
notices, notices of initiation by Regulatory Authorities of investigations,
inspections, detentions, seizures, or injunctions concerning any Product.  If
Idera is

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required to respond to any requests from or by any and all Regulatory
Authorities with respect to any Product, Idera will provide Vivelix an
opportunity to comment on the response to the extent such response may affect
its rights or obligations under this Agreement before Idera submits such
response, unless legally prohibited from doing so. 

3.8 Material Transfer.  Within ninety (90) days after the Effective Date, Idera
will transfer to Vivelix, at no cost or expense to Vivelix, all available
quantities of GLP and GMP materials of IMO-9200 and Backup Compounds included in
Exhibit A (e.g., API and clinical trial material), provided that Idera may
withhold such amounts as reasonably necessary for regulatory, quality control,
reference and other customary purposes.  Idera will provide to Vivelix an
inventory of all materials and quantities that are actually transferred, (the
“Transferred Materials”).  Idera will transfer materials included in the
Transferred Materials in accordance with Applicable Law and the applicable
mutually agreed upon specifications therefor.  All GMP Transferred Materials
will be accompanied by any available certificate of analysis, certificate of
manufacturing, batch records and any and all other such documentation,
information and materials as may be in the possession of Idera and required
under Applicable Law to use the GMP Transferred Materials in human clinical
trials, including without limitation written certification that such GMP
Transferred Materials were both (a) manufactured, and (b) stored and handled at
all times following such manufacture, in accordance with GMP and the applicable
specifications. All GLP Transferred Materials will be accompanied by any
available certificate of analysis, certificate of manufacturing, batch records,
and any and all other such documentation, information and materials as may be in
the possession of Idera and required under Applicable Law to use the GLP
Transferred Materials in GLP clinical trials, including written certification
that such GLP Transferred Materials were both (i) manufactured, and (ii) stored
and handled at all times following such manufacture, in accordance with GLP and
the applicable specifications.  Idera will deliver the Transferred Materials to
Vivelix EXW (delivery location of Idera’s choice in the United States).  An
inventory of all non-GLP/GMP quantities of IMO-9200 and Backup Compounds will be
provided to Vivelix, accompanied by all available documentation and information
regarding synthesis, storage, and analysis of the materials.

article 4

PAYMENTS

4.1 Upfront Payment.  In consideration for the rights and licenses granted under
this Agreement, Vivelix will pay Idera a one-time, non-refundable,
non-creditable payment of Fifteen Million Dollars ($15,000,000) within ten (10)
business days after the Effective Date.

4.2 Milestone Payments. 

4.2.1 Development Milestones.  In consideration for the rights and licenses
granted under this Agreement, Vivelix will pay each one-time only,
non-refundable, non-creditable milestone payment set forth in the table in this
Section 4.2.1 below after the first achievement of the specified milestone event
by Vivelix or its Affiliates or Sublicensees for each Product that is Covered
(at the time of achievement of such milestone event, or at any time within three
(3) years after such achievement) by a Valid Claim described in Section ‎1.97(a)
(an “Issued Valid Claim”) in the applicable territory (if such milestone event
expressly lists a territory) listed in the table in this Section 4.2.1 below
(each, a “Development Milestone Payment”).  Promptly upon the achievement of any
milestone event, and in any event within ten (10) business days of such
achievement, Vivelix shall provide Idera with written notice of such
achievement.  Idera may submit an invoice to Vivelix for each Development
Milestone Payment at any time (a) after the corresponding milestone is achieved,
provided that such Product is Covered by an Issued Valid Claim at the time of
such achievement, or (b) if such Product is not Covered by an Issued Valid Claim
at the time of such achievement, but is later Covered by an Issued Valid Claim
within the three (3)-year period after such achievement, then after such Issued
Valid Claim is issued.  Vivelix will pay any Development Milestone Payments that
are payable within thirty (30) days after receipt of such invoice.  For clarity,
the Development Milestone Payments are due with respect to each Product first
containing IMO-9200 or each unique Backup Compound, as applicable, to achieve a
milestone event.

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Development Milestone Event

Payment for Product containing:

 

IMO-9200

Backup Compound

 

[**]

 

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

Total

US$65,000,000

US$35,000,000

 

4.2.2 Net Sales Milestones.  In consideration for the rights and licenses
granted under this Agreement, Vivelix will pay each one-time only,
non-refundable, non-creditable milestone payment set forth in the table below
after the first achievement of the specified milestone event by Vivelix or its
Affiliates or Sublicensees with respect to Net Sales of Product(s) during the
respective Royalty Term(s) for such Product(s) in the country in which such
Products are sold (each, a “Sales Milestone Payment”).  Vivelix will notify
Idera within thirty (30) days after the end of the calendar month in which a
Sales Milestone Event set forth in the table below is achieved.  Idera may
submit an invoice to Vivelix for each Sales Milestone Payment at any time after
the corresponding milestone is achieved.  Vivelix will pay any Sales Milestone
Payment that is payable within thirty (30) days after receipt of such invoice.
For clarity, the Sales Milestone Payments are due with respect to each Product
first containing IMO-9200 or each unique Backup Compound, as applicable.

 

 

 

 

Sales Milestone Event

Payment for Product containing:

 

IMO-9200

Backup Compound

 

Annual aggregate Net Sales of Products in a Calendar Year worldwide in excess of
US$[**]

 

[**]

[**]

Annual aggregate Net Sales of Products in a Calendar Year worldwide in excess of
US$[**]

 

[**]

[**]

Annual aggregate Net Sales of Products in a Calendar Year worldwide in excess of
US$[**]

 

[**]

[**]

Total

US$75,000,000

US$17,500,000

 

4.3 Royalty Payments.

4.3.1 Royalties on Products.  In consideration for the rights and licenses
granted under this Agreement, Vivelix will pay Idera non-creditable,
non-refundable royalties on aggregate annual Net Sales of all Products in the
Territory, as calculated by multiplying the applicable royalty rate in the table
in this Section 4.3.1, below, by the corresponding amount of incremental Net
Sales of all Products in the Territory in each Calendar Year, subject to this
Section 4.3, below (“Royalties”).

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Net Sales Tier

 

Royalty Rate

 

(a)  For that portion of annual aggregate Net Sales of Products containing
IMO-9200 in a Calendar Year that are less than or equal to US$[**]

 

[**]%

(b)  For that portion of annual aggregate Net Sales of Products containing
IMO-9200 in a Calendar Year that are greater than US$[**] and less than or equal
to US$[**]

 

[**]%

(c)  For that portion of annual aggregate Net Sales of Products containing
IMO-9200 in a Calendar Year that are greater than US$[**]

 

[**]%

(d)  For that portion of annual aggregate Net Sales of Products containing a
Backup Compound in a Calendar Year that are less than or equal to US$[**]

 

[**]%

(e)  For that portion of annual aggregate Net Sales of Products containing a
Backup Compound in a Calendar Year that are greater than US$[**] and less than
or equal to US$[**]

 

[**]%

(f)  For that portion of annual aggregate Net Sales of Products containing a
Backup Compound in a Calendar Year that are greater than US$[**]

[**]%

 

For example, and without limitation, if aggregate annual Net Sales of all
Products containing IMO-9200 in a Calendar Year are $[**], then royalties
payable by Vivelix on such Products equal [**].

4.3.2 Royalty Term.  Royalties will be paid under this Section 4.3, on a
country-by-country and Product-by-Product basis, commencing on First Commercial
Sale of such Product in such country until the latest of:  (a) the expiration of
the last-to-expire Valid Claim in such country that Covers the sale or use of
such Product; (b) the expiration of Regulatory Exclusivity in such country
covering such Product; and (c) the tenth (10th) anniversary of the First
Commercial Sale of such Product in such country (the “Royalty Term”). 

4.3.3 Know-How Royalty.  In any country in the Territory, during any period
during the Royalty Term for a Product in which there is no Valid Claim of a
Licensed Patent that Covers the manufacture, sale or use of such Product, and
there is no Regulatory Exclusivity covering such Product, the royalty rates on
the Net Sales of such Product in such country will be [**] percent ([**]%) of
the rates otherwise payable under Section 4.3.1.  Vivelix agrees that
notwithstanding the expiry of any of the Licensed Patents, the royalties payable
pursuant to this Section 4.3 in consideration for the license to the Licensed
Know-How to and the materials provided by Idera to Vivelix with respect to the
Products will continue to accrue and become due and payable until the expiry of
the applicable Royalty Term in accordance with the terms of this Agreement.    

4.3.4 Royalties Reduction.    

(a) With respect to the costs incurred in obtaining commercial supplies of
Product (including any Product made for Development or validation batch purposes
that can be Commercialized), if the average API Expense for any Calendar Quarter
exceeds $[**]/gram and the sum of COGS Expense plus API Expense exceeds [**]
percent ([**]%) of the Net Sales of a Product during such Calendar Quarter, then
the amounts that would otherwise have been payable as Royalties to Idera under
Section 4.3.1(a), (b), (d), and (e), taking into account Section 4.3.3, for such
Calendar Quarter will be reduced as follows.  The Royalties payable under these
circumstances will be reduced by an amount equal to [**] percent ([**]%) of the
greater of (i) such excess API Expense or (ii) such excess COGS Expense plus API
Expense; provided that in no event will the Royalties reduction described in
this Section 4.3.4(a) act to reduce the Royalties payable by Vivelix to Idera to
less than [**] percent ([**]%) of the Royalties payable by Vivelix to Idera
under Section 4.3.1(a), (b), (d), and (e), taking into account Section 4.3.3,
for a given Calendar Quarter.  If any such amount is not fully credited during a
Calendar Quarter, such amount may be carried forward and creditable [**].

(b) If (i) Vivelix, in its reasonable judgment, determines that it is required
to obtain a

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license from any Third Party, including under Section 6.6, or if Vivelix obtains
a sublicense under any Third Party IP pursuant to Section 6.9, in each case in
order to avoid infringement of such Third Party’s Patent Rights that is
attributable to the manufacture, use or sale of a Compound, and (ii) Vivelix is
required to pay to such Third Party any payments in consideration for the grant
or maintenance of such license or reimburse Idera any payments payable with
respect to any Third Party IP pursuant to Section 6.9.3 (“Third Party
Compensation”), then for the period during which Vivelix owes Royalties to Idera
hereunder, the amounts that would otherwise have been payable as Royalties to
Idera under Sections 4.3.1–4.3.4(a) will be reduced by an amount equal to [**]
percent ([**]%) of the Third Party Compensation paid by or on behalf of Vivelix
to such Third Party during such period; provided that in no event will the
Royalties reduction described in this Section 4.3.4(b) act to reduce the
Royalties payable by Vivelix to Idera to less than [**] percent ([**]%) of the
Royalties payable by Vivelix to Idera under Sections 4.3.1–4.3.4(a) for a given
Calendar Quarter.  Such royalty reduction provided for under this Section
4.3.4(b) shall not apply to any license obtained to avoid infringement of Third
Party Patent Rights that is attributable to a Combination Product and would not
otherwise arise due to the sale of a Compound alone.  If any such amount is not
fully credited during a Calendar Quarter, such amount may be carried forward and
creditable [**].

(c) If, for a given Product and in a given country in the Territory, one (1) or
more Generic Products are sold in such country and Vivelix had used diligent
efforts to enforce the applicable Licensed Patents listed in Section (a) of
Exhibit D, then the Royalties payable by Vivelix to Idera under Sections
4.3.1–4.3.4(b) for such Product in such country shall be reduced as follows:

(i) by [**] percent ([**]%) commencing with the Calendar Quarter immediately
following the Calendar Quarter during which such Generic Product(s) is first
sold in such country and ending with the Calendar Quarter immediately following
the Calendar Quarter in which all Generic Products are subsequently withdrawn
from the market in such country;

(ii) if subsequent to entry of such Generic Product(s) in such country, the
aggregate Net Sales of such Product in such country in any two consecutive
Calendar Quarters declined greater than [**] percent ([**]%) of the level of the
aggregate Net Sales of such Product achieved in the two consecutive Calendar
Quarters immediately prior to such entry (such Net Sales level prior to such
entry is referred to as the “Reference Level”), then by [**]%) commencing with
the second of such two consecutive Calendar Quarters; provided, however, that if
all Generic Products are subsequently withdrawn from the market in such country
and the aggregate Net Sales of such Product for any two consecutive Calendar
Quarters thereafter increase to more than [**] percent ([**]%) of the Reference
Level, the royalty reduction provided in this clause (ii) shall no longer apply
unless a subsequent Generic Product enters the market and the decline of the
aggregate Net Sales is subsequently again greater than [**] percent ([**]%) of
the applicable Reference Level; and

(iii) if subsequent to entry of such Generic Product(s) in such country, the
aggregate Net Sales of such Product in such country in any two consecutive
Calendar Quarters declined greater than [**] percent ([**]%) of the Reference
Level, then by [**] percent ([**]%) commencing with the second of such two
consecutive Calendar Quarters; provided, however, that if all Generic Products
are subsequently withdrawn from the market in such country and the aggregate Net
Sales of such Product for any two consecutive Calendar Quarters thereafter
increase to more than [**] percent ([**]%) of the Reference Level, the royalty
reduction provided in this clause (iii) shall no longer apply unless a
subsequent Generic Product enters the market and the decline of the aggregate
Net Sales is subsequently again greater than [**] percent ([**]%) of the
applicable Reference Level.

4.4 Royalty and Sublicense Payment Report and Payment.  During the Term
following the First Commercial Sale of any Product, within sixty (60) days after
the end of each Calendar Quarter, Vivelix will pay to Idera Royalties payable
for such Calendar Quarter and will provide a royalty report showing, on a
Product-by-Product basis:

4.4.1 the amount actually received and the Net Sales resulting from sales of
Products sold by Vivelix or its Affiliates or Sublicensees during such Calendar
Quarter reporting period, including the specific deductions applied in the
calculation of such Net Sales amounts;

4.4.2 that nature of, basis for (in reasonable detail) and amount of any
reductions in Royalties as a result of the application of the terms of Section
‎4.3.3 or ‎4.3.4;

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4.4.3 the Royalties payable in Dollars which will have accrued hereunder with
respect to such Net Sales;

4.4.4 withholding taxes, if any, required by Applicable Law to be deducted with
respect to such Royalties; and

4.4.5 the rate of exchange used by Vivelix in determining the amount of Dollars
payable hereunder.

If no Royalties are due for any Calendar Quarter hereunder, Vivelix will so
report.  Vivelix will keep, and will require its Affiliates and Sublicensees to
keep (all in accordance with GAAP, consistently applied), complete and accurate
records in sufficient detail to properly reflect the Net Sales to enable the
Royalties payable hereunder to be determined for a period of at least three (3)
Calendar Years.

4.5 Audits of Royalty Reports.

4.5.1 Upon the written request of Idera and not more than once in each Calendar
Year, Vivelix will permit an independent certified public accounting firm of
nationally recognized standing selected by Idera and reasonably acceptable to
Vivelix, at Idera’s expense and upon execution of a usual and reasonable
confidentiality agreement with Vivelix in accordance with Section 4.5.2, to have
access during normal business hours to such records of Vivelix as may be
necessary or reasonably useful to verify the accuracy of the payment reports
made and the amounts owed to Idera under this Agreement for any Calendar Year
period ending not more than three (3) years prior to the date of such
request.  These rights with respect to any Calendar Year will terminate three
(3) years after the end of any such Calendar Year.  Idera will provide Vivelix
with a copy of such accounting firm’s written report within thirty (30) days
after completion of such report.  If such accounting firm concludes that an
underpayment was made, then the Vivelix will pay the amount due within thirty
(30) days after the date Idera delivers to Vivelix such accounting firm’s
written report so concluding, and any accrued interest as determined in
accordance with Section 4.9 from the date such underpayment was originally due
until payment thereof.  If such accounting firm concludes that an overpayment
was made, then Vivelix may credit such overpayment against future payments due
under this Agreement.  Idera will bear the full cost of such audit unless such
audit discloses that the additional payment payable by Vivelix for the audited
period is more than [**] percent ([**]%) of the amount of the payments due for
that audited period, in which case Vivelix will pay the fees and expenses
charged by the accounting firm.  If the Parties dispute any such accounting
firm’s conclusion, they will resolve such issue pursuant to Article 11.

4.5.2 Idera will treat all information subject to review under Section 4.5.1 in
accordance with the confidentiality provisions of this Agreement, and will cause
its accounting firm to enter into a confidentiality agreement with Vivelix
containing obligations of confidentiality and non-use no less restrictive than
the obligations set forth in Article 5; provided that such accountant may in any
event disclose to Idera the extent of any underpayment by Vivelix, as determined
in Section 4.5.1. 

4.6 Currency of Payments.  Except as provided under Section 4.7, all payments
under this Agreement will be made in Dollars from a bank account domiciled in
the United States or Bermuda by wire transfer of immediately available funds
into an account designated by Idera.  Net Sales outside of the U.S. will be
first determined in the currency in which they are earned and will then be
converted into an amount in Dollars using Vivelix’s customary and usual
conversion procedures used in preparing its financial statements pursuant to
GAAP for the applicable reporting period.  

4.7 Blocked Currency.  In each country in the Territory where the local currency
is blocked and cannot be removed from the country, at the election of Idera,
royalties accrued on Net Sales in such country will be paid to Idera in local
currency by deposit in a local bank in such country designated by Idera.

4.8 Taxes.    Each Party will be solely responsible for the payment of all taxes
imposed on its share of income arising directly or indirectly from the efforts
of the Parties under this Agreement.  The Parties agree to cooperate with one
another and use reasonable efforts to reduce or eliminate tax withholding or
similar obligations in respect of Royalties, Development Milestone Payments,
Sales Milestone Payments, or other payments made by

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Vivelix to Idera under this Agreement.  To the extent Vivelix is required under
the Internal Revenue Code of 1986, as amended (the “Code”), or any other tax
laws to deduct and withhold taxes on any payment to Idera, Vivelix will pay the
amounts of such taxes to the proper Governmental Authority in a timely manner
and promptly transmit to Idera an official tax certificate or other evidence of
such withholding sufficient to enable Idera to claim such payment of
taxes.  Upon Vivelix’s reasonable request, Idera will provide Vivelix any tax
forms that may be reasonably necessary in order for Vivelix to determine whether
to withhold tax on any such payments or to withhold tax on such payments at a
reduced rate under the Code or any other tax laws, including any applicable
bilateral income tax treaty.  Each Party will provide the other with reasonable
assistance to enable the recovery, as permitted by Applicable Laws, of
withholding taxes, value added taxes, or similar obligations resulting from
payments made under this Agreement, such recovery to be for the benefit of the
Party bearing such withholding tax or value added tax.   

4.9 Interest Due.    Vivelix will pay Idera interest on any payments that are
not paid on the date on which such payments are due under this Agreement at a
monthly interest rate equal to the U.S. prime interest rate, as reported by The
Wall Street Journal (New York edition) for the first business day of each month
(starting with the month in which such payment was first due), plus [**]%, or
the maximum applicable legal rate, if less, calculated based on the total number
of days payment is delinquent.

article 5

NONDISCLOSURE OF CONFIDENTIAL INFORMATION

5.1 Nondisclosure.  Each Party agrees that, during the Term and for a period of
[**] years thereafter (or, for any trade secret, for so long as the Disclosing
Party maintains such trade secret as a trade secret), a Party (the “Receiving
Party”) receiving Confidential Information of the other Party (the “Disclosing
Party”) will (a) maintain in confidence such Confidential Information, (b) not
disclose such Confidential Information to any Third Party without the prior
written consent of the Disclosing Party, except for disclosures expressly
permitted in this Article 5 and (c) not use such Confidential Information for
any purpose except those expressly permitted by this Agreement.  Such permitted
purposes shall include a Party’s monitoring its and the other Party’s compliance
with the terms of this Agreement and making decisions and determinations as
contemplated hereunder.  The Parties agree that any Confidential Information
disclosed by the Parties or their Affiliates prior to the Effective Date will be
Confidential Information within the meaning of, and will be subject to, this
Article 5.  Notwithstanding the definition of “Confidential Information” in
Article 1, (a) all Confidential Information to the extent it relates solely to
the Development, making, having made, use, registering, selling, offering for
sale, Commercializing, importing and exporting of Compounds or Products in the
Field in the Territory (“Compound Specific Confidential Information”) , whether
generated or disclosed by one or both Parties, will be deemed to be Confidential
Information of Vivelix, and Vivelix will be deemed to be the Disclosing Party
with respect to such Confidential Information and (b) all Confidential
Information relating to Compounds or Products that is not Compound Specific
Confidential Information, whether generated or disclosed by one or both Parties,
will be deemed to be Confidential Information of both Parties, and each Party
will be deemed to be the Disclosing Party with respect to such Confidential
Information; provided, however, that (1) Idera shall have the right to use any
Confidential Information relating to Compounds or Products, whether Idera is
deemed the Disclosing Party or Receiving Party, for research purposes and
(2) Idera shall have the right to use any Confidential Information that is not
Compound Specific Confidential Information for any lawful purpose. 

5.2 Exceptions.  The obligations under Section 5.1 will not apply with respect
to any portion of Confidential Information of a Disclosing Party that the
Receiving Party can show by competent evidence:

5.2.1 at the time of disclosure to Receiving Party is in the public domain;

5.2.2 after disclosure to Receiving Party, becomes part of the public domain by
publication or otherwise, except by breach of this Agreement by the Receiving
Party;

5.2.3 was (a) in the Receiving Party’s possession at the time of disclosure
without any obligation to keep it confidential or any restriction on its use or
(b) subsequently and independently developed by the Receiving Party’s employees
who had no knowledge of and who did not use any of Disclosing Party’s
Confidential Information; or

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5.2.4 is received by the Receiving Party from a Third Party who has the lawful
right to disclose such Confidential Information and who has not obtained such
Confidential Information either directly or indirectly from the Disclosing
Party.

5.3 Authorized Disclosure.  To the extent (and only to the extent) that it is
reasonably necessary or appropriate to fulfill its obligations or exercise its
rights under this Agreement, the Receiving Party may disclose Confidential
Information belonging to the Disclosing Party in the following instances:

5.3.1 preparing, filing, prosecuting, or maintaining patent applications to the
extent permitted in this Agreement;

5.3.2 prosecuting or defending litigation;

5.3.3 subject to Sections 5.4 and 5.5, required by Applicable Laws (including
the rules and regulations of the Securities and Exchange Commission or any
national securities exchange) and with judicial process;

5.3.4 in the case where Vivelix is the Receiving Party, in connection with
Regulatory Filings; to Affiliates in connection with the performance of this
Agreement and solely on a need-to-know basis; to potential or actual
collaborators (including potential Sublicensees), who prior to disclosure must
be bound by written obligations of confidentiality and non-use no less
restrictive than the obligations set forth in this Article 5; to potential or
actual investment bankers, investors, lenders, acquirers, merger partners or
other potential financial partners, and their attorneys and agents), who prior
to disclosure must be bound by written obligations of confidentiality and
non-use no less restrictive than the obligations set forth in this Article 5; or
employees, independent contractors (including consultants and clinical
investigators) or agents, each of whom prior to disclosure must be bound by
written obligations of confidentiality and non-use no less restrictive than the
obligations set forth in this Article 5; provided, however, that the Receiving
Party will remain responsible for any failure by any Person who receives
Confidential Information pursuant to this Section 5.3.4 to treat such
Confidential Information as required under this Article 5;

5.3.5 in the case where Idera is the Receiving Party of Compound Specific
Confidential Information, in connection with regulatory filings and associated
correspondence with any regulatory authority; to Affiliates in connection with
the performance of this Agreement and solely on a need-to-know basis; or
employees, independent contractors (including consultants and clinical
investigators) or agents, each of whom prior to disclosure must be bound by
written obligations of confidentiality and non-use no less restrictive than the
obligations set forth in this Article 5; provided, however, that the Receiving
Party will remain responsible for any failure by any Person who receives
Confidential Information pursuant to this Section 5.3.5 to treat such
Confidential Information as required under this Article 5; and

5.3.6 in the case where Idera is the Receiving Party of Confidential Information
that is not Compound Specific Confidential Information, in connection with
regulatory filings and associated correspondence with any regulatory authority;
to Affiliates; to potential or actual collaborators (including potential
licensees), who prior to disclosure must be bound by written obligations of
confidentiality and non-use no less restrictive than the obligations set forth
in this Article 5; to potential or actual investment bankers, investors,
lenders, acquirers, merger partners or other potential financial partners, and
their attorneys and agents), who prior to disclosure must be bound by written
obligations of confidentiality and non-use no less restrictive than the
obligations set forth in this Article 5; or employees, independent contractors
(including consultants and clinical investigators) or agents, each of whom prior
to disclosure must be bound by written obligations of confidentiality and
non-use no less restrictive than the obligations set forth in this Article 5;
provided, however, that Idera will remain responsible for any failure by any
Person who receives Confidential Information pursuant to this Section 5.3.6 to
treat such Confidential Information as required under this Article 5.

If and whenever any Confidential Information is disclosed in accordance with
this Section 5.3, such disclosure will not cause any such information to cease
to be Confidential Information except to the extent that such disclosure results
in a public disclosure of such information (other than in breach of this
Agreement).  Where reasonably possible and subject to Sections 5.4 and 5.5, the
Receiving Party will notify the Disclosing Party of the Receiving Party’s intent
to make such disclosure pursuant to Sections 5.3.1–5.3.3 sufficiently prior to
making such disclosure so as to allow the Disclosing Party adequate time to take
whatever action appropriate to protect the confidentiality of the information

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while still permitting such disclosure, and the Receiving Party will cooperate
with the Disclosing Party in such efforts.

5.4 Required Disclosure.  A Receiving Party may disclose Confidential
Information of the Disclosing Party to the extent such disclosure is required
pursuant to interrogatories, judicial requests for information or documents,
subpoena, civil investigative demand issued by a court or Governmental Authority
or as otherwise required by Applicable Law; provided, however, that the
Receiving Party will notify the Disclosing Party promptly upon receipt thereof,
giving (where practicable) the Disclosing Party sufficient advance notice to
permit it to oppose, limit or seek confidential treatment for such disclosure;
and provided, further, that the Receiving Party will furnish only that portion
of the Confidential Information that it is advised by counsel is legally
required whether or not a protective order or other similar order is obtained by
the Disclosing Party.

5.5 Securities Filings.  In the event a Party proposes to file with the
Securities and Exchange Commission or the securities regulators of any state or
other jurisdiction a registration statement or any other disclosure document
which describes this Agreement under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, or any other Applicable Law
pertaining to securities, such Party will notify the other Party of such
intention and will provide such other Party with a copy of relevant portions of
the proposed filing not less than five (5) days prior to such filing (and any
revisions to such portions of the proposed filing a reasonable time prior to the
filing thereof), including any exhibits thereto relating to this Agreement, and
will consider in good faith any requested changes to the proposed description of
this Agreement and to any proposed redactions of the portions of this Agreement
for which confidential treatment shall be sought that are received at least two
(2) days prior to such filing.  No such notice will be required under this
Section 5.5 if the substance of the description of or reference to this
Agreement contained in the proposed filing has been included in any previous
filing made by the either Party hereunder or otherwise approved by the other
Party.

5.6 Disclosure of Agreement.  Except in accordance with Section 5.4 or 5.5,
neither Party may issue any press release or make any other public statement or
other disclosure disclosing to any Third Party any information relating to this
Agreement or its terms or the transactions contemplated hereby without the prior
written consent of the other Party, such consent not to be unreasonably
withheld, delayed, or conditioned.  Notwithstanding the foregoing, a Party may
disclose the terms of this Agreement in confidence to its Affiliates in
connection with the performance of this Agreement and solely on a need-to-know
basis; to potential or actual collaborators or licensees (including potential
Sublicensees), who, prior to such disclosure, must agree to bound by obligations
of confidentiality and non-use no less restrictive than the obligations set
forth in this Article 5; or in confidence to potential or actual investment
bankers, investors, lenders, acquirers, merger partners or other potential
financial or strategic partners, and their attorneys and agents); provided,
however, that the Receiving Party will remain responsible for any failure by any
Person who receives Confidential Information pursuant to this Section 5.6 to
treat such Confidential Information as required under this Article 5.  

article 6

INTELLECTUAL PROPERTY RIGHTS

6.1 JPC.  Promptly after the Effective Date, the Parties will establish a joint
patent committee, consisting of at least one (1) member from each of Idera and
Vivelix (the “JPC”), to review and discuss the preparation, filing, prosecution,
or maintenance of Licensed Patents.  Prior to filing any documentation relating
to the Licensed Patents with the PTO or submitting any correspondence relating
to the Licensed Patents to the PTO, the acting Party will inform the JPC of such
proposed filing or submission (which may be electronic) and, at the Parties’
discretion, discuss the foregoing in a meeting (which may be telephonic) of the
JPC at the other Party’s request.  Either Party may replace its respective JPC
representatives at any time, with prior written notice to the other Party.  The
JPC will meet quarterly, or as more or less often as otherwise agreed by the
Parties, by telephone or in person, as agreed by the Parties, at mutually
convenient locations.  For clarity, the JPC will have only the authority set
forth above and in no event will it have the authority to amend, modify, or
waive any term of this Agreement.

6.2 Inventions.    

6.2.1 General Principles.  All inventions and other Know-How made solely by
employees or independent contractors of one Party in the course of such Party’s
performance under this Agreement and all

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intellectual property rights therein (the “Sole Inventions” of such Party), will
be solely owned by such Party.  All inventions and other Know-How made jointly
by employees or independent contractors of each Party in the course of its
performance under this Agreement, and all intellectual property rights therein
(“Joint Inventions”) will be jointly owned by the Parties such that each Party
has an undivided one-half (1/2) interest, without a duty of accounting to the
other Party, in and to such Joint Invention.  In the event that a jurisdiction
requires consent of co-owners for one co-owner to grant license rights under or
otherwise exploit the Joint Inventions, each Party hereby grants the other Party
such license rights as may be required for such co-owner to make such grant
under or exploit such Joint Inventions without a requirement of
accounting.  Inventorship will be determined in accordance with U.S. patent
laws.  Each Party will promptly notify the other Party after it first learns of
the conception of any Joint Invention, or in the case of Idera, any Sole
Invention, and provide the other Party with a detailed report of relevant data,
results, experimental procedures, and inventors thereof. 

6.2.2 Further Acts.  Each Party will perform such reasonable additional actions
necessary to effect the intent of Section 6.2.1, and will reasonably cooperate
with the other Party in doing so.

6.3 Preparation, Filing, Prosecution, and Maintenance of Licensed Patents. 

6.3.1 Licensed Patents.    

(a) Vivelix will be responsible, at its own cost and expense, for the
preparation, filing, prosecution (including any interferences, reissue
proceedings, cancellations, oppositions, inter partes review, post grant review,
patent term extension applications, reexaminations, and other similar
proceedings) and maintenance of those Licensed Patents on Section (a) of Exhibit
D and any Patent Rights that claim priority to any of the patents and patent
applications described in Section (a) of Exhibit D.  Idera shall execute and
deliver to Vivelix, or Vivelix’s designee, any documents reasonably requested by
Vivelix to authorize Vivelix to perform such activities.    

(b) Idera will be responsible, at its own cost and expense, for the preparation,
filing, prosecution (including any interferences, reissue proceedings,
cancellations, oppositions and reexaminations) and maintenance of Licensed
Patents other than those subject to Section 6.3.1(a). 

(c) The Party having responsibility under Section 6.3.1(a), 6.3.1(b) or 6.3.1(d)
shall be referred to as the “Filing Party,” and the other Party shall be
referred to as the “Non-Filing Party.”  The Filing Party will reasonably consult
with the Non-Filing Party, and will consider in good faith any comments of the
Non-Filing Party with respect to the preparation, filing, prosecution and
maintenance of the Licensed Patents for which the Filing Party exercises its
responsibility under Section 6.3.1(a), 6.3.1(b) or 6.3.1(d), as applicable. The
Filing Party will provide to the Non-Filing Party copies of any papers relating
to the filing, prosecution or maintenance of the Licensed Patents promptly upon
their being filed or received, and will provide drafts of documents to be filed
sufficiently in advance of their filing dates so as to provide the other Party
with sufficient time to review and comment thereon prior to filing.  In the case
of Vivelix as the Filing Party, Vivelix shall not knowingly take any action
during prosecution and maintenance of the Licensed Patents subject to Section
6.3.1(a) or 6.3.1(d) that would result in any reduction in the scope of one or
more independent claims of such Licensed Patents, without the prior written
consent of Idera, which consent will not be unreasonably withheld, delayed or
conditioned.  In the case of Idera as the Filing Party, Idera will not knowingly
take any action during prosecution and maintenance of the Licensed Patents
subject to Section 6.3.1(b) that would result in any reduction in the scope of
one or more independent claims of such Licensed Patents, without the prior
written consent of Vivelix, which consent will not be unreasonably withheld,
delayed or conditioned.

(d) Vivelix may, from time to time, identify in writing to Idera certain
countries in which Vivelix desires that Idera file, prosecute and maintain
Licensed Patents subject to Section 6.3.1(b) and Idera may thereafter file, and,
subject to Section 6.3.3, prosecute and maintain such Licensed Patents in such
country or countries or Idera shall, subject to Section 6.3.3, transfer to
Vivelix the authority and responsibility to file, prosecute and maintain such
Licensed Patents; provided that any and all prosecution activities by Vivelix
will be at Vivelix’s sole cost and expense and will be in accordance with
Section 6.3.1(c). 

6.3.2 Joint Patent Rights. Vivelix will have the first right to prepare, file,
prosecute (including any interferences, reissue proceedings, cancellations,
oppositions post grant review, patent term extension

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applications, reexaminations, and other similar proceedings) and maintain (the
Party having such responsibility, the “Prosecuting Party”; the other Party, the
“Non-Prosecuting Party”) any Patent Rights that Cover a Joint Invention (“Joint
Patent Rights”), unless the Parties mutually agree that Idera will be the
Prosecuting Party with respect to such Joint Patent Rights.  If Vivelix does not
file a patent application Covering such Joint Invention within the one hundred
eighty (180) day period after either Party gives written notice to the other
Party of such Joint Invention pursuant to Section 6.2.1, Idera shall have the
right but not the obligation to become the Prosecuting Party with respect to
such Joint Patent Rights upon written notice to Vivelix.  The Prosecuting Party
will reasonably consult with the other Party and will consider any comments from
the other Party in good faith, with respect to the preparation, filing,
prosecution and maintenance of such Joint Patent Rights.  The Prosecuting Party
will provide to such other Party copies of any papers relating to the filing,
prosecution or maintenance of such Joint Patent Rights promptly upon their being
filed or received, and will provide drafts of documents to be filed sufficiently
in advance of their filing dates so as to provide the Non-Prosecuting Party with
sufficient time to review and comment thereon prior to filing.  The
Non-Prosecuting Party may, from time to time, identify in writing to the
Prosecuting Party certain countries in which the Non-Prosecuting Party desires
that the Prosecuting Party file, prosecute and maintain Joint Patent Rights and
the Prosecuting Party will, subject to Section 6.4.3, thereafter file, prosecute
and maintain such Joint Patent Rights in such country or countries. The
Prosecuting Party will not knowingly take any action during prosecution and
maintenance of such Joint Patent Rights that would result in any reduction in
the scope of one or more independent claims of such Licensed Patents, without
the prior written consent of the Non-Prosecuting Party, which consent will not
be unreasonably withheld, delayed or conditioned.  The Parties will share
equally all reasonable costs and expenses related to the preparation, filing,
prosecution and maintenance of any Joint Patent Rights.

6.3.3 Patent Abandonment.  In no event will (a) Idera, with respect to Licensed
Patents subject to Section 6.3.1(b) or Joint Patent Rights for which it is the
Prosecuting Party under Section 6.3.2, or (b) Vivelix, with respect to Licensed
Patents subject to Section 6.3.1(a), Licensed Patents for which it is the Filing
Party under Section 6.3.1(d) or Joint Patent Rights for which it is the
Prosecuting Party under Section 6.3.2, permit such Patent Rights to be abandoned
in any country in which such Patent Rights have been filed in the Territory,
without filing a new patent application directed to the subject matter of the
to-be-abandoned application and claiming priority to a patent application within
such Patent Rights without the Non-Prosecuting Party or Non-Filing Party, as the
case may be, first being given an opportunity to assume responsibility for the
continued prosecution and maintenance of such Patent Rights.  If a Prosecuting
Party or Filing Party, as the case may be, decides not to continue the
prosecution or maintenance of a patent application or patent in any country, the
Prosecuting Party or Filing Party, as the case may be, will provide the
Non-Prosecuting Party or Non-Filing Party, as the case may be, with written
notice of this decision at least thirty (30) days prior to any pending lapse or
abandonment thereof.  In such event, the Prosecuting Party or Filing Party, as
the case may be, will provide the Non-Prosecuting Party or Non-Filing Party, as
the case may be, with an opportunity to assume responsibility, at the
Non-Prosecuting Party’s or Non-Filing Party’s, as the case may be, own cost and
expense of the filing or further prosecution and maintenance of such patents or
patent applications and any patent issuing thereon; provided that any and all
prosecution activities by the Non-Prosecuting Party or Non-Filing Party, as the
case may be, will require the Prosecuting Party’s or Filing Party’s, as the case
may be, review and prior written consent, which consent will not be unreasonably
withheld, delayed or conditioned.  If the Non-Prosecuting Party or Non-Filing
Party, as the case may be, assumes such responsibility for such filing,
prosecution and maintenance costs, the Non-Prosecuting Party or Non-Filing
Party, as the case may be, will have the right to transfer the responsibility
for such filing, prosecution and maintenance of such patent applications and
patents to patent counsel selected by the Non-Prosecuting Party or Non-Filing
Party, as the case may be, and reasonably acceptable to the Prosecuting Party or
Non-Filing Party, as the case may be.  In the case of Vivelix as the Non-Filing
Party, Vivelix shall not prosecute such Patent Rights within the Licensed
Patents with respect to any claims other than those claims specifically Covering
a Product or Compound.

6.4 Enforcement of Licensed Patents Against Infringers. 

6.4.1 Procedures and Requirements.    In the event that either Party has cause
to believe that a Third Party may be infringing and/or misappropriating any of
the Licensed Technology in the GI Field or an Expanded Field in the Territory,
it will promptly notify the other Party in writing, identifying the alleged
infringer and the alleged infringement and/or misappropriation complained of and
furnishing the information upon which such determination is based.  Except as
otherwise provided in this Section 6.4.1, the Party first providing such notice
to the Other Party shall have the first right but not the obligation to take any
appropriate steps, including without limitation filing litigation or other
appropriate action(s), with respect to stopping the alleged infringement and/or
misappropriation

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reasonably identified in the notice.  In the event the Party providing such
notice does not take appropriate steps to address such alleged infringement
and/or misappropriation within sixty (60) days of the date of such notice, then
the right, but not the obligation, to address such alleged infringement and/or
misappropriation shall shift to the non-notifying Party.  Vivelix will have the
first right but not the obligation to take any appropriate steps, including
without limitation filing litigation or other appropriate action(s), with
respect to such infringement or misappropriation of such Licensed Patents by
such Third Party in the GI Field or an Expanded Field in the Territory, with
respect to the following:  (a) the Licensed Patents listed in Section (a) of
Exhibit D and any Patent Rights that claim priority to any of the patents and
patent applications described in Section (a) of Exhibit D; (b) any Licensed
Patents listed in the Orange Book pursuant to Section 6.8 of this Agreement and
an infringement relating to a Product; or (c) any Licensed Patent and an
infringement relating to a product that competes with a Product in the GI Field
or an Expanded Field.  If Vivelix fails to take action within sixty
(60) days following its receipt of a notice of such infringement or
misappropriation, then Idera
will have the right to take action to stop such infringement or
misappropriation; provided that such infringement or misappropriation is by a
product or a method involving making or using a product similar to or the same
as a Product or method of making or using a Product.  Vivelix shall not enforce,
or threaten to enforce, any Licensed Patents unless Vivelix also includes in
such enforcement, or threatened enforcement at least a substantial portion of
such other Patent Rights as may then be Controlled by Vivelix and have claims
that cover the purported infringement.  Upon reasonable request by the Party
enforcing Licensed Technology in the GI Field or an Expanded Field in the
Territory (the “Enforcing Party”), the other Party (the “Non-Enforcing Party”)
will give the Enforcing Party all reasonable information and assistance,
including (i) allowing the Enforcing Party access to the Non-Enforcing Party’s
files and documents and to the Non-Enforcing Party’s personnel who may have
possession of relevant information and, (ii) if necessary or desirable for the
Enforcing Party to prosecute any legal action, joining in the legal action as a
party using counsel of its own choosing.  Any such assistance provided by a
Non-Enforcing Party will be rendered at the Enforcing Party’s cost and expense,
the Enforcing Party will reimburse the Non-Enforcing Party for its reasonable
and documented costs and expenses upon the Non-Enforcing Party’s request and in
the case of joining in a legal action, the Enforcing Party will enter into a
commercially reasonable indemnification agreement with the Non-Enforcing Party
as a condition to such Non-Enforcing Party joining in such legal
action.  Vivelix shall have no right to enforce any Licensed Technology outside
of the GI Field or an Expanded Field.

6.4.2 Settlement of an Enforcement Claim.  The Enforcing Party will have the
right to control settlement of any claims that a Third Party may be infringing
or misappropriating any Licensed Technology in the GI Field or an Expanded Field
and in the Territory; provided, however, that if such settlement could
reasonably be deemed to have a material adverse effect on the Non-Enforcing
Party, the Enforcing Party will not enter into any such settlement with respect
to any Licensed Technology in the Territory without the prior written consent of
the Non-Enforcing Party. For the avoidance of doubt, if Vivelix is the Enforcing
Party it shall have no right to enter into a settlement that confers a license
or other access to Licensed Technology outside of the GI Field or an Expanded
Field without the prior consent of Idera, which Idera may grant or withhold in
its discretion.

6.4.3 Expenses and Recovery.  As between the Parties, the Enforcing Party will
bear all costs and expenses (including any costs or expenses incurred that
exceed the amounts recovered by the Enforcing Party pursuing any action under
this Section 6.4.3) and payments awarded against or agreed to be paid by the
Enforcing Party.  Any amounts recovered by either Party pursuant to Section
6.4.1 or 6.4.2, whether by settlement or judgment, will be allocated in
accordance with the following:  (a) such amounts first will be used to reimburse
the Parties for their reasonable costs and expenses in making such recovery and,
if insufficient to cover the totality of such costs and expenses, will be
allocated between the Parties in proportion to their respective costs and
expenses; and (b)(i) if Vivelix is the Enforcing Party, Vivelix will retain any
remainder to the extent specifically allocated to products, compounds or
technology in the GI Field or an Expanded Field, and Vivelix will retain [**]
percent ([**]%) and Idera will retain [**] percent ([**]%) of any remainder not
so allocated; provided that, solely for purposes of Section 4.3, such remaining
amount retained by Vivelix on account of its having been specifically allocated
to products, compounds or technology in the GI Field or an Expanded Field will
be deemed to be Net Sales of the applicable Product to which such action related
in the Calendar Quarter in which such amounts were received by or paid to
Vivelix, and thereby will be subject to the Royalties payments contemplated in
Section 4.3, and (ii) if Idera is the Enforcing Party, then to the extent such
enforcement relates to the GI Field or an Expanded Field, Idera will retain [**]
percent ([**]%) and Vivelix will retain [**] percent ([**]%) of any remainder to
the extent specifically allocated to products, compounds or technology in the GI
Field or an Expanded Field, and any remainder not so allocated shall be retained
entirely by Idera.

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6.5 Infringement Claims by Third Parties.  Idera and Vivelix will each promptly
inform the other Party in writing of any actual, threatened, or alleged
infringement or misappropriation, based on the making, using, selling or
offering for sale of a Product in the GI Field or an Expanded Field in the
Territory, of a Third Party’s intellectual property rights of which it becomes
aware.  Neither Party will acknowledge to a Third Party the validity of any such
allegation or admit liability with respect to any Product without the prior
written consent of the other Party.  Idera and Vivelix will each keep the other
advised of all material developments in the conduct of any proceedings in
defending any claim of such alleged infringement or misappropriation and will
cooperate with the other in the conduct of such defense.  In no event may either
Party settle any such infringement or misappropriation claim in a manner that
would materially adversely affect or impose any obligation on the other Party,
without such other Party’s prior written consent, such consent not to be
unreasonably withheld, delayed, or conditioned.  Each Party will have the sole
responsibility, at its cost and in its sole discretion, for defending any such
allegations or claims made against it.

6.6 Common Interest.  Idera and Vivelix, respectively on behalf of themselves
and their respective Affiliates, acknowledge and agree that they share a common
legal interest in the actual or potential claims, defenses, allegations and
issues that may arise under Section 6.4 or Section 6.5 and that common interest
will be furthered by the sharing of information, including without limitation
any otherwise privileged information that either Party may choose to share.  In
the event either Party determines, with respect to any claims, defense,
allegation or issue that may arise under Section 6.4 or Section 6.5, that such
Party does not share a common interest with the other Party with respect to such
issue, then the first Party shall promptly provide written notice thereof to the
other Party.

6.7 Third Party Licenses.

6.7.1 If either Party reasonably determines that (a) any licenses existing as of
the Effective Date to any Third Party intellectual property rights, or (b) on or
after the Effective Date, certain Third Party intellectual property rights, are
necessary for the Development, manufacture or Commercialization of a Product, or
for any license that may be required for the use or exploitation of Licensed
Technology as contemplated under this Agreement for the Research, manufacture,
or use of Compounds and Products, then such Party will notify the other Party. 

6.7.2 If the Parties jointly determine that they need to obtain one or more
licenses from one or more Third Parties as described in Section 6.7.1, Vivelix
will have the first right (but not the obligation) to negotiate and obtain such
license(s) at its sole cost and expense.  If Vivelix elects not to negotiate and
obtain such license(s), Idera will have the right (but not the obligation) to do
so at its sole cost and expense.  Subject to the foregoing, the terms and
conditions involved in obtaining such rights will be determined at such chosen
Party’s sole discretion. 

6.8 Patent Listings.  Vivelix will have the sole right to make all filings with
Regulatory Authorities with respect to the Licensed Patents in the Territory
solely in relation to the manufacture, use or sale of Products in the GI Field
or an Expanded Field.  Idera hereby grants to Vivelix the transferable (in
accordance with Section 12.1), perpetual, irrevocable (except as provided for
upon termination of this Agreement), right to list one or more of the Licensed
Patents in the U.S. FDA’s Approved Drug Products with Therapeutic Equivalence
Evaluations (i.e., the Orange Book) to the extent required or permitted by
applicable laws and regulations; provided, however, that the listing of any
Licensed Patent set forth in part (b) of Exhibit D that does not contain claims
covering a Product or Compound as a composition of matter or covering a method
of use of a Product or Compound primary in the GI Field or any Expanded Field
shall be subject to the prior written consent of Idera, which consent will not
be unreasonably withheld, delayed or conditioned.

6.9 Third Party IP. 

6.9.1 Subject to any confidentiality obligations that may be imposed upon Idera
by a Third Party, Idera shall use good faith efforts to notify Vivelix of any
Patent Rights of a Third Party that Idera believes, to its Knowledge and in its
good faith judgment, claim inventions that are necessary to Develop, make, have
made, use, register, sell, offer for sale, Commercialize, import and export
Compounds or Products in the Field in the Territory (the Patent Rights
contemplated under the foregoing sentence are referred to as “Third Party IP”)
and to which Idera has determined it shall seek a  sublicensable license after
the Effective Date; provided that, if the subject matter of such Third Party IP
primarily relates to the Compounds or Products or the GI Field or Expanded
Field, then Vivelix shall have the first right to obtain such license.  

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6.9.2 During the course of Idera’s discussions with such Third Party as
contemplated by Section 6.9.1, Idera shall disclose to Vivelix the material
obligations (including financial terms and confidentiality terms) that would be
applicable to Vivelix that are under discussion between Idera and such Third
Party for such license.  Idera shall consider in good faith Vivelix’s comments
on such terms, however, Idera shall not be under an obligation to secure terms
consistent with Vivelix’s comments.  Vivelix shall not be under an obligation to
take a sublicense under any such license, whether or not its terms had been
disclosed to it in accordance with this Section 6.9.2.    

6.9.3 Idera shall notify Vivelix within thirty (30) days after Idera obtains a
license to Third Party IP that would be available for sublicense to Vivelix and
shall disclose to Vivelix the material terms of such license agreement
containing such sublicense that would be applicable to Vivelix if Vivelix were
to take a sublicense from Idera under such license.  Within sixty (60) days
after such disclosure by Idera, Vivelix will notify Idera if it would like to
take a sublicense under such license, and, in such event, Idera and Vivelix
shall negotiate in good faith for a period of up to forty-five (45) days the
terms of a separate agreement (a “Third Party IP Agreement”) that will include
any terms necessary to comply with the terms of such license agreement and to
provide for the payment by Vivelix of amounts owing under such license agreement
as a result of the sublicense to Vivelix hereunder, including a reasonable share
of any non-contingent payments or reimbursements under such license
agreement.  Upon execution and delivery of a Third Party IP Agreement, the
applicable Third Party IP shall be included within Patent Rights as provided
under Section ‎1.58(e).  The financial terms of any such agreement shall not
include any premium or mark-up over the payments associated with such sublicense
under the terms of the license to such Third Party IP, unless otherwise agreed
by Vivelix.   If Vivelix does not so request within such thirty (30) day period,
Idera shall have no further obligations hereunder with respect to the applicable
Third Party IP.

6.9.4 The requirements imposed upon Idera to disclose or sublicense any further
Third Party IP under this Section ‎6.9 and include such Third Party IP within
Patent Rights pursuant to Section ‎1.58 shall expire and be of no further force
or effect after a Change of Control with respect to Idera.

article 7

TERM AND TERMINATION

7.1 Term and Expiration.  The term of this Agreement will commence on the
Effective Date, and will continue for as long as payments are payable under this
Agreement (the time at which there are no payments payable under this Agreement,
the “Expiration”), or until such date as this Agreement is sooner terminated in
accordance with Section 7.2, 7.3, or 7.4 or by mutual written consent of the
Parties (the “Term”). 

7.2 Termination by Vivelix.  Vivelix may terminate this Agreement for any or no
reason upon sixty (60) days prior written notice to Idera.  

7.3 Termination for Material Breach. 

7.3.1 If either Party believes that the other Party is in material breach of
this Agreement, then such Party may deliver notice of such breach to the
allegedly breaching Party.  In such notice such Party will identify with
specificity the alleged breach.  The allegedly breaching Party will have ninety
(90) days to cure such breach, except if such breach is of a payment obligation
under this Agreement, in which case such cure period shall be thirty (30)
days.  If the allegedly breaching Party fails to cure such breach within such
cure period, such other Party may, subject to Section 7.3.2, terminate this
Agreement immediately by providing the allegedly breaching Party a written
notice at the end of such cure period.  Notwithstanding anything to the contrary
in the foregoing, in the event that Idera elects to terminate this Agreement due
to a material breach caused by a Sublicensee as described in Section 2.2.2,
Idera shall have the right to terminate this Agreement solely with respect to
the field and territory that are the subject of the sublicense agreement with
such Sublicensee.  

7.3.2 Notwithstanding the foregoing, if the allegedly breaching Party disputes
in good faith the existence or materiality of such breach and provides notice to
the other Party of such dispute within such cure period, such other Party will
not have the right to terminate this Agreement in accordance with this Section
7.3 unless and until it has been determined in accordance with Article 11 that
this Agreement was materially breached by the

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allegedly breaching Party and failed to cure such breach within the applicable
cure period.  It is understood and acknowledged that during the pendency of such
a dispute, all of the terms and conditions of this Agreement will remain in
effect and the Parties will continue to perform all of their respective
obligations hereunder.  The Parties further agree that any payments that are
made by one Party to the other Party pursuant to this Agreement pending
resolution of the dispute will be promptly refunded if a court determines
pursuant to Article 11 that such payments are to be refunded by one Party to the
other Party.

7.4 Patent Challenge.    If Vivelix or any of its Affiliates or Sublicensees
brings, assumes, or participates in, or with Actual Knowledge or willfully or
recklessly assists in bringing, a Patent Challenge then, at Idera’s option upon
written notice within thirty (30) days after such Patent Challenge is brought,
Idera may either (a) required that (i) Vivelix shall pay all reasonable costs,
fees and expenses associated with such Patent Challenge that are incurred by
Idera and its current and former officers, agents, employees, and directors,
including reasonable attorneys’ fees and all reasonable costs associated with
administrative, judicial or other proceedings, within thirty (30) days after
receiving an invoice from Idera for same;  (ii) the exclusive licenses granted
in this Agreement, as of the date of initiation of said Patent Challenge, be
converted into a non-exclusive license for the remainder of the Term; and (iii)
any fees, royalties, milestones or revenues payable to Idera hereunder shall
double in amount if and when any Patent Right within the Licensed Patents
survives the Patent Challenge such that it remains valid in whole or in part; or
(b) terminate this Agreement; provided that if such Patent Challenge is brought
by a Sublicensee, Idera may not exercise the remedies provided in the foregoing
clauses (a) or (b) if Vivelix has terminated all sublicenses granted to such
Sublicensee hereunder within ninety (90) days after Vivelix has received written
notice from Idera of such Patent Challenge; and provided further that if any of
subsections (a) and (b) are held invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect any of the other said
subsections.  The Parties agree that any challenge or opposition to a Licensed
Patent by Vivelix or any of its Affiliates or Sublicensees may be detrimental to
Idera, and that the above provisions shall constitute reasonable liquidated
damages to reasonably compensate Idera for any loss they may incur as a result
of Vivelix or any of its Affiliates or Sublicensees taking such action.

7.5 Termination for Insolvency.    To the extent permitted under Applicable Law,
a Party may terminate this Agreement upon written notice to the other Party on
or after the occurrence of any of the following events:  (a) the appointment of
a trustee, receiver, or custodian for all or substantially all of the property
of the other Party, or for any lesser portion of such property, if the result
materially and adversely affects the ability of the other Party to fulfill its
obligations hereunder, which appointment is not dismissed within sixty (60)
days, (b) the determination by a court or tribunal of competent jurisdiction
that the other Party is insolvent such that a Party’s liabilities exceed the
fair market value of its assets, (c) the filing of a petition for relief in
bankruptcy by the other Party on its own behalf, or the filing of any such
petition against the other Party if the proceeding is not dismissed or withdrawn
within sixty (60) days thereafter, (d) an assignment by the other Party for the
benefit of creditors, or (e) the dissolution or liquidation of the other
Party.  

7.6 Effect of Expiration or Termination of Agreement.    

7.6.1 Upon Expiration, Vivelix will have a fully paid-up, perpetual,
irrevocable, non-exclusive license under the Licensed Technology to Develop,
make, have made, use, register, sell, offer to sell, import, export, and
Commercialize Products in the GI Field and any Expanded Field (as of the date of
Expiration) in the Territory.

7.6.2 Upon termination of this Agreement by Vivelix pursuant to Section 7.3 or
7.5, Vivelix will retain its milestone and royalty-bearing, licenses under the
Licensed Technology as set forth in Section ‎2.1 and all terms of this Agreement
shall continue to apply, provided that (a) the JRC and JPC shall be disbanded,
(b) Vivelix shall no longer be required to provide to Idera the annual report
contemplated under Section ‎3.1.2, (c) Sections 6.3, 6.4, and 6.5 will survive,
(d) solely in the event of a material breach relating to any provision of this
Agreement other than the provisions of Section 3.4, any and all of Vivelix’s
obligations to pay milestones and royalties under this Agreement will be reduced
by [**] percent ([**]%) and (e) in the event of a material breach relating to
any provision of Section 3.4, any and all of Vivelix’s obligations to pay
milestones and royalties under this Agreement will be reduced by [**] percent
([**]%).

7.6.3 Upon early termination of this Agreement by Idera pursuant to Section 7.3,
7.4 or 7.5, or by Vivelix pursuant to Section 7.2, all rights and licenses
granted to Vivelix under this Agreement will terminate and all rights of Vivelix
under the Licensed Patents will revert to Idera.  Upon such early termination,
provided that at

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such time there are issued Licensed Patents, Vivelix agrees to negotiate, and to
cause any of its relevant Affiliates to negotiate, in good faith an agreement
pursuant to which Vivelix and such Affiliates would transfer, deliver and assign
to Idera all right, title and interest in any Regulatory Approvals, regulatory
communications and Regulatory Filings, Data, materials, and Know-How that are
necessary for the development, manufacture, and commercialization of Compounds
and Products and Controlled by Vivelix and its Affiliates, subject to payments
to reimburse Vivelix’s costs and expenses incurred in connection therewith and a
reasonable royalty on sales of such Compounds and Products.  Notwithstanding
anything to the contrary in the foregoing, in the event that this Agreement is
terminated pursuant to Section 7.3 by Idera due to a material breach caused by a
Sublicensee as described in Section 2.2.2, the foregoing provisions of this
Section 7.6.3 shall apply solely with respect to the field and territory that
are the subject of the sublicense agreement with such Sublicensee.

7.6.4 Neither Party will be relieved of any obligation that accrued prior to the
effective date of expiration or termination.  All amounts due or payable to
Idera that were accrued prior to the effective date of termination will remain
due and payable.  Except as otherwise expressly provided herein, no additional
amounts will be payable based on events occurring after the effective date of
termination; provided that the foregoing will not be deemed to limit either
Party’s indemnification obligations under this Agreement for acts or omissions
incurring prior to the effective date of such termination that are the subject
of such indemnification even if the indemnification amount cannot be accrued or
determined as of the effective date of such termination.

7.7 Survival.  Expiration or termination of this Agreement for any reason will
not (a) release any Party from any obligation that has accrued prior to the
effective date of such expiration or termination, (b) preclude any Party from
claiming any other damages, compensation, or relief that it may be entitled to
upon such expiration or termination, or (c) terminate any right to obtain
performance of any obligation provided for in this Agreement that will survive
expiration or termination.  Without limiting the foregoing, upon expiration or
termination of this Agreement, the rights and obligations of the Parties under
Sections 2.6, 7.6 (as applicable), and 7.7 and Articles 1, 5 (for the term set
forth in Section 5.1), 8 (to the extent such Losses and Claims can be attributed
to actions or omissions during the Term), 10, 11, and 12 will survive such
termination.     

article 8

INDEMNITY

8.1 Vivelix Indemnity Obligations.    Vivelix will defend Idera, its Affiliates
and their respective directors, officers, employees, and agents (collectively,
the “Idera Indemnitees”), and will indemnify and hold harmless the Idera
Indemnitees, from and against any liabilities, losses, costs, damages, fees, or
expenses payable to a Third Party, and reasonable attorney’s fees and other
legal expenses with respect thereto (“Losses”) arising out of any allegation,
claim, action, lawsuit, or other proceeding (“Claims”) brought against any Idera
Indemnitee by a Third Party resulting from or relating to:  (a) any breach by
Vivelix of any of its representations, warranties, covenants, or obligations
pursuant to this Agreement, (b) the research, Development, manufacturing, or
Commercialization of Compounds or Products (including product liability) by
Vivelix, its Affiliates, or Sublicensees, (c) the practice by Vivelix, its
Affiliates, or Sublicensees (including a contract manufacturer) of any license
or sublicense granted to it under Article 2, or (d) the gross negligence,
willful misconduct, or violation of Applicable Law of any Vivelix Indemnitee;
except in any such case to the extent such Losses and Claims directly result
from: (i) the negligence or willful misconduct of any Idera Indemnitee or
contractor of Idera, (ii) any breach by Idera of any of its representations,
warranties, covenants, or obligations pursuant to this Agreement, or (iii) any
breach of Applicable Law by any Idera Indemnitee. 

8.2 Idera Indemnity Obligations.  Idera will defend Vivelix, its Affiliates,
Sublicensees and their respective directors, officers, employees, and agents
(collectively, the “Vivelix Indemnitees”), and will indemnify and hold harmless
the Vivelix Indemnitees, from and against any Losses arising out of any Claims
brought against any Vivelix Indemnitee by a Third Party resulting from or
relating to: (a) any breach by Idera of any of its representations, warranties,
covenants, or obligations pursuant to this Agreement, (b) any Transferred
Materials provided by Idera hereunder, but solely to the extent that Idera
recovers amounts from the applicable Third Party manufacturer or service
provider with respect to the Transferred Materials as provided in Section ‎8.3,
(c) the research, Development, manufacturing, or Commercialization of any
Returned Compounds (including product liability) by Idera, its Affiliates, or
sublicensees, or (d) the gross negligence, willful misconduct, or violation of
Applicable Law

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of any Idera Indemnitee; except in any such case to the extent such Losses and
Claims directly result from: (i) the negligence or willful misconduct of any
Vivelix Indemnitee or any licensee or contractor of Vivelix, (ii) any breach by
Vivelix of any of its representations, warranties, covenants, or obligations
pursuant to this Agreement, or (iii) any breach of Applicable Law by any Vivelix
Indemnitee.    

8.3 Additional Idera Obligation.  In the event of any claim for indemnification
made by a Vivelix Indemnitee arising under Section ‎8.2(b), Idera will use good
faith efforts to recover any damages or obtain indemnification for which Idera
has an enforceable claim against a Third Party manufacturer or service provider
with respect to such Transferred Materials under the applicable Third Party
manufacturer or service provider agreement, with the out-of-pocket costs of such
efforts to be borne by Vivelix.  Any such amounts so recovered will be made
available to satisfy the indemnification obligation provided in
Section ‎8.2(b). 

8.4 Procedure.  If any Vivelix Indemnitee or Idera Indemnitee (as applicable,
the “Indemnitee”) intends to claim indemnification under this Article 8, the
Indemnitee will promptly notify the other Party (the “Indemnitor”) of any Claim
in respect of which the Indemnitee intends to claim such indemnification, and
the Indemnitor will assume the defense thereof with counsel selected by the
Indemnitor and reasonably acceptable to the Indemnitee; provided, however, that
an Indemnitee will have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitee, if representation of such Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other Party
represented by such counsel in such proceedings.  The Indemnitor will have the
right to settle or compromise any claims for which it is providing
indemnification under this Article 8; provided that the consent of the
Indemnitee (which will not be unreasonably withheld, delayed, or conditioned)
will be required in the event any such settlement or compromise would adversely
affect the interests of the Indemnitee.  The indemnity agreement in this Article
8 will not apply to amounts paid in settlement of any loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Indemnitor.  The failure to deliver notice to the Indemnitor within a reasonable
time after the commencement of any such action, if prejudicial to the
Indemnitor’s ability to defend such action, will relieve such Indemnitor of any
liability to the Indemnitee under this Article 8, but the omission so to deliver
notice to the Indemnitor will not relieve it of any liability that it may have
to any Indemnitee otherwise than under this Article 8.  The Indemnitee under
this Article 8, its employees, and its agents, will cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim, or liability covered by this indemnification. 

8.5 Insurance.  Each Party shall, at its sole cost and expense, procure and
maintain insurance, including commercial general liability insurance and, with
respect to Vivelix starting at the time at which a Product first enters clinical
testing in human subjects by or on behalf of Vivelix or its Affiliates or
Sublicensees product liability insurance, in each case adequate to cover its
obligations hereunder and consistent with normal business practices of prudent
companies similarly situated.  Such commercial general liability insurance shall
provide broad form contractual liability coverage for such Party’s
indemnification obligations under this Agreement.  It is understood that any
such insurance shall not be construed to create a limit of such Party’s
liability with respect to its indemnification obligations under this Article
8.  Each Party shall provide the other Party with written evidence of such
insurance upon request.  Each Party shall provide the other Party with written
notice at least thirty (30) days prior to the cancellation, non-renewal or
material change in such insurance.  If a Party does not obtain replacement
insurance providing comparable coverage within fifteen (15) days thereafter, the
other Party shall have the right to terminate this Agreement for material breach
in accordance with Section 7.3.  Vivelix shall maintain such insurance beyond
the expiration or termination of this Agreement during:  (a) the period that any
Product is being commercially distributed or sold by Vivelix, an Affiliate or
Sublicensee; and (b) a reasonable period after the period referred to in (a)
above which in no event shall be less than five (5) years.

article 9

REPRESENTATIONS, WARRANTIES, AND COVENANTS

9.1 Mutual Representations and Warranties. Each Party hereby represents and
warrants to the other Party, as of the Effective Date, that:

9.1.1 such Party is duly organized, validly existing and in good standing under
the Applicable Laws of the jurisdiction of its incorporation and has full
corporate power and authority to enter into this Agreement

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and to carry out the provisions hereof;

9.1.2 execution of this Agreement and the performance by such Party of its
obligations hereunder have been duly authorized;

9.1.3 this Agreement has been duly executed and delivered on behalf of such
Party, and constitutes a legal, valid, binding obligation, enforceable against
it in accordance with the terms hereof;

9.1.4 such Party has the full right and authority to enter into and perform this
Agreement and that such Party is not aware of any impediment that would inhibit
such Party’s ability to perform the terms and conditions imposed on such Party
by this Agreement;

9.1.5 the execution, delivery and performance of this Agreement by such Party
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it is bound, nor violate any
Applicable Law or regulation of any court or Governmental Authority having
jurisdiction over such Party;

9.1.6 no government authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, under any
Applicable Laws currently in effect, is or will be necessary for, or in
connection with, the transaction contemplated by this Agreement or any other
agreement or instrument executed in connection herewith, or for the performance
by such Party of its obligations under this Agreement and such other agreements;
and

9.1.7 such Party has enforceable written agreements with all of its employees,
consultants, or independent contractors who receive Confidential Information
under this Agreement obligating them to keep such information confidential and
to use such information only as permitted in this Agreement, and assigning to
such Party ownership of all intellectual property rights created in the course
of their employment.

9.2 Further Representations, Warranties, and Covenants of Idera.  Idera
represents, warrants, and covenants that:

9.2.1 As of the Effective Date, the Patent Rights listed in Exhibit D are all of
the Patent Rights Controlled by Idera as of the Effective Date that are
necessary for making, using, registering, selling, offering for sale, importing,
Developing, and Commercializing (and having any of the foregoing performed) the
Compounds;

9.2.2 as of the Effective Date, it is entitled to grant the rights and licenses
granted to Vivelix under this Agreement, and is not currently bound by any
agreement with any Third Party, or by any outstanding order, judgment, or decree
of any court or administrative agency, that restricts it in any way from
granting to Vivelix the rights and licenses as set forth in this Agreement;

9.2.3 as of the Effective Date, Idera has received no written notice of any
threatened or pending actions, suits, judgments, settlements, or claims against
Idera that, if determined adversely to Idera, would have an adverse effect upon
(a) its ability to grant to Vivelix the licenses and rights granted under this
Agreement, (b) the ability of Vivelix to fully utilize the Licensed Technology
pursuant to this Agreement, or (c) Idera’s right to enter into and perform its
obligations under this Agreement;

9.2.4 it has not granted as of the Effective Date, and will not grant during the
Term, any right, option, license or interest in or to any of the Licensed
Technology that is in conflict with the rights or licenses granted to Vivelix
under this Agreement; and it has not granted, or permitted to be attached, as of
the Effective Date, any lien, security interest, or other encumbrance with
respect to the Licensed Technology;

9.2.5 to Idera’s Knowledge, there is no material prior art or any other fact
that would likely render the claims in the Licensed Patents issued as of the
Effective Date unpatentable, invalid, or unenforceable in whole or in part;  

9.2.6 as of the Effective Date, to Idera’s Knowledge, the Licensed Technology
does not include

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any trade secrets that have been misappropriated from any Third Party or
obtained in breach of any contractual obligation of Idera or its employees to a
Third Party;

9.2.7 Idera has no Knowledge of any infringement by any Third Party of any of
the Licensed Patents as of the Effective Date;

9.2.8 neither Idera, nor to Idera’s Actual Knowledge any Third Party licensor of
the Licensed Technology, has entered into any agreement binding as of the
Effective Date pursuant to which it has agreed to transfer, whether by asset
sale, operation of law or otherwise, title to any of the Licensed Technology;

9.2.9 to Idera’s Knowledge, Idera solely owns, and is unaware of any facts that
have lead Idera to suspect that it does not solely own, the Licensed Technology
existing as of the Effective Date, including all patents and patent applications
set forth on Exhibit D, and such ownership of Patent Rights has been duly
recorded with the PTO or corresponding Governmental Authorities;

9.2.10 as of the Effective Date, to Idera’s Actual Knowledge, neither the
Development, use, Commercialization, importation, making, sale, offer for sale
or exportation of the Compounds (such Compounds being only those in existence as
of the Effective Date) or Products incorporating such Compounds in the Field in
the Territory will infringe or has infringed any issued claim of any Patent
Rights owned or otherwise controlled by a Third Party;

9.2.11 to Idera’s Knowledge, all inventors of any inventions included within the
Licensed Patents or Licensed Know-How Controlled by Idera as of the Effective
Date have assigned their entire right, title, and interest in and to such
inventions and the corresponding Patent Rights to Idera or the Third Party
licensor of such rights to Idera;

9.2.12 to Idera’s Knowledge, no person, other than those persons named as
inventors on any Licensed Patents, is, or has alleged to Idera to be, an
inventor of the invention(s) claimed in such Licensed Patents;

9.2.13 with respect to all Licensed Patents as of the Effective Date to Idera’s
Knowledge: (a) each has been prosecuted in material compliance with all
applicable rules, policies, and procedures of the PTO and (b) each is subsisting
and in good standing;

9.2.14 Idera has not received from any Regulatory Authority any written notice
regarding Regulatory Approval of any Product, including any comment or notice
regarding approvability.  No Product has been withdrawn, suspended or
discontinued by Idera as a result of any action or communication by any
Regulatory Authority, either within or outside the United States and either
within or outside the Field;

9.2.15 Idera has not, to its Knowledge, utilized and will not utilize, in
conducting Development or Commercialization of Products, any person or entities
that at such time are debarred by FDA, or that, at such time, are under
investigation by FDA for debarment action pursuant to the provisions of the
Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335);

9.2.16 to Idera’s Knowledge, Idera has paid all unsatisfied obligations for the
payment of money incurred by Idera to Third Parties in respect of services
rendered or materials supplied for or in respect of Development, Manufacture or
any other activities related to the Compounds; and Idera will be responsible for
any and all unsatisfied obligations for the payment of money incurred by Idera
to Third Parties in respect of services rendered or materials supplied for or in
respect to the Development, Manufacture or any other activities related to the
Compounds and the unpaid amounts thereof;

9.2.17 any and all Transferred Materials provided to Vivelix under this
Agreement will, at the time of delivery to Vivelix meet the applicable mutually
agreed upon specifications therefor, manufactured and tested in accordance with
Applicable Laws, including GMP, and not be adulterated or misbranded within the
meaning of the United States Food, Drug and Cosmetic Act, 21 U.S.C. Section 301c
et. seq. or other Applicable Laws; and 

9.2.18 Idera’s has obtained, and during the Term will maintain, all licenses,
authorizations, and

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permissions necessary under Applicable Law for the meeting and performing its
obligations under this Agreement and all such licenses, authorizations, and
permissions are in full force and effect.

9.3 Further Representations, Warranties, and Covenants of Vivelix.  Vivelix
represents, warrants, and covenants that:

9.3.1 Vivelix has obtained, and during the Term will maintain, all licenses,
authorizations, and permissions necessary under Applicable Law for the meeting
and performing its obligations under this Agreement and all such licenses,
authorizations, and permissions are in full force and effect;

9.3.2 Vivelix will not assign, transfer, convey or otherwise encumber its right,
title and interest in the Licensed Technology in a manner that conflicts with
any rights granted to Idera hereunder; and

9.3.3 Vivelix will not utilize, in conducting Development or Commercialization
of Products, any person or entities that at such time are debarred by FDA, or
that, at such time, are under investigation by FDA for debarment action pursuant
to the provisions of the Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335).

article 10  

DISCLAIMER; LIMITATION OF LIABILITY

10.1 Disclaimer.  except as provided under ARTICLE 9, each Party expressly
disclaims any and all warranties of any kind, express or implied, including the
warranties of design, merchantability, fitness for a particular purpose,
noninfringement of the intellectual property rights of third Parties, or arising
from a course of dealing, usage or trade practices, in all cases with respect
thereto. 

10.2 Limitation of Liability.  Neither Party hereto will be liable for indirect,
incidental, consequential, special, exemplary, punitive or multiple damages
arising in connection with this Agreement or the exercise of its rights
hereunder, or for lost profits arising from or relating to any breach of this
Agreement, regardless of any notice of such damages; provided, however, that
this Section 10.2 will not limit or restrict (A) damages available for breaches
of confidentiality obligations UNDER Article 5, OR (B) the Parties’
indemnification obligations under Article 8.

article 11

DISPUTE RESOLUTION

11.1 Resolution by Senior Executives.  The Parties will seek to settle amicably
any and all disputes or differences arising out of or in connection with this
Agreement.  Any dispute between the Parties will be promptly presented to the
Chief Executive Officer of Vivelix and the Chief Executive Officer of Idera, or
their respective designees, for resolution.  Such officers, or their designees,
will attempt in good faith to promptly resolve such dispute.  If they are unable
to do so, either Party may submit such dispute for resolution in accordance with
Section 11.2

11.2 Applicable Law and Venue.  This Agreement will be governed by, enforced,
and will be construed in accordance with the laws of the State of Delaware,
United States of America without regard to any conflict of laws principle that
would result in the application of the laws of any other jurisdiction.  All
actions and proceedings arising out of or relating to this Agreement will be
heard and determined exclusively in any Delaware State or federal court sitting
in Delaware, and each Party hereby irrevocably consents to personal jurisdiction
and venue in, and agrees to service of process issued or authorized by, such
court in any such action or proceeding and irrevocably waive any defense of an
inconvenient forum to the maintenance of any such action or proceeding. 
Notwithstanding the foregoing, either Party may seek injunctive relief in any
court in any jurisdiction where appropriate.

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article 12

MISCELLANEOUS

12.1 Assignment.    

12.1.1 This Agreement may not be assigned or otherwise transferred by either
Party without the consent of the other Party; provided, however, that Idera or
Vivelix may, without such consent, assign this Agreement together with all of
its rights and obligations hereunder to its respective Affiliate, or to a
successor in interest in connection with the transfer or sale of all or
substantially all of its business to which this Agreement relates, whether by
merger, sale of assets or otherwise, subject to notice to the non-assigning
Party of such assignment and to the successor agreeing to be bound by the terms
of this Agreement, including the provisions of Section 2.3; and provided
further, however, that Idera may, without such consent of Vivelix, assign or
otherwise transfer Idera’s right to receive payments under this Agreement in
connection with a financing arrangement. 

12.1.2 Notwithstanding Section 12.1.1, if Idera assigns or otherwise transfers
this Agreement, including in connection with the transfer or sale of all or
substantially all of its business to which this Agreement relates, or in the
event of a Change of Control, to any Third Party pharmaceutical company that is
Developing or Commercializing a product in the GI Field that is or would be
competitive with a Product then being Developed or Commercialized by Vivelix,
then Idera will promptly notify Vivelix of such assignment, transfer or Change
of Control, and [**].

12.1.3 Any purported assignment in violation of the preceding sentences will be
void.  Any permitted assignee or successor will assume and be bound by all
obligations of its assignor or predecessor under this Agreement. 

12.2 Severability.  If any provision of this Agreement is held to be invalid or
unenforceable, all other provisions will continue in full force and effect, and
the Parties will substitute for the invalid or unenforceable provision a valid
and enforceable provision which conforms as nearly as possible with the original
intent of the Parties.

12.3 Notices.  Any notice or other communication to a Party pursuant to this
Agreement will be sufficiently made or given on the date it was sent; provided
that such notice or other communication is sent by facsimile (with paper copy
being sent by first class mail, postage prepaid), or is sent by first class
certified or registered mail, postage prepaid, or is sent by next day express
delivery service, addressed to it at its address in this Section 12.3, below, or
to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.

If to Idera:

Idera Pharmaceuticals, Inc.

167 Sidney Street

Cambridge, MA  02139

U.S.A.
Attention:    General Counsel

 

With a copy to (which alone will not constitute notice):

 

Goodwin Procter LLP

100 Northern Avenue
Boston, MA  02210

U.S.A.

Attn:  Richard Hoffman

Facsimile:  +1 (617) 977-9449

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If to Vivelix, to:

 

Vivelix Pharmaceuticals, Ltd.

Clarendon House, 2 Church Street

Hamilton, HM 11, Bermuda

Attention:  Chief Executive Officer

 

With a copy to (which alone will not constitute notice):

 

Latham & Watkins LLP

27th Floor

200 Clarendon Street
Boston, MA  02116

U.S.A.

Attn:  Johan V. Brigham

 

12.4 Force Majeure.  Neither Party will be charged with any liability for delay
in performance of an obligation under this Agreement to the extent such delay is
due to a cause beyond the reasonable control of the affected Party, such as war,
riots, labor disturbances, fire, explosion, and compliance in good faith with
any Applicable Laws; provided that the affected Party is using commercially
reasonable efforts to overcome or avoid the effects of such cause and to
recommence performing such obligation.  The Party affected will give prompt
written notice to the other Party of any material delay due to such
causes.  When such circumstances arise, the Parties will negotiate in good faith
any modifications of the terms of this Agreement that may be necessary or
appropriate in order to arrive at an equitable solution. 

12.5 Rights in Bankruptcy.  All rights and licenses granted under or pursuant to
this Agreement by Idera are, and will otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code (i.e., Title 11 of the U.S. Code) or
analogous provisions of Applicable Law outside the United States, licenses of
rights to “intellectual property” as defined under Section 101 of the U.S.
Bankruptcy Code or analogous provisions of Applicable Law outside the United
States.  The Parties agree that Vivelix, as licensee of such rights under this
Agreement, will retain and may fully exercise all of its rights and elections
under the U.S. Bankruptcy Code or any other provisions of Applicable Law outside
the United States that provide similar protection for “intellectual
property.”  The Parties further agree that, in the event of the commencement of
a bankruptcy proceeding by or against Idera under the U.S. Bankruptcy Code or
analogous provisions of Applicable Law outside the United States, Vivelix will
be entitled to a complete duplicate of (or complete access to, as appropriate)
any Licensed Technology and all embodiments of such Licensed Technology, which,
if not already in Vivelix’s possession, will be promptly delivered to it upon
Vivelix’s written request therefor.  Any agreements supplemental hereto will be
deemed to be “agreements supplementary to” this Agreement for purposes of
Section 365(n) of the U.S. Bankruptcy Code.

12.6 Expenses.  Except as expressly set forth in this Agreement or as may be
specifically agreed to in writing by Vivelix and Idera, each Party will be
responsible for all costs and expenses it incurs in connection with this
Agreement.

12.7 Headings.  The headings of Articles and Sections of this Agreement are for
ease of reference only and will not affect the meaning or interpretation of this
Agreement in any way.

12.8 Waiver.  The failure of either Party in any instance to insist upon the
strict performance of the terms of this Agreement will not be construed to be
waiver or relinquishment of any of the terms of this Agreement, either at the
time of the Party’s failure to insist upon strict performance or at any time in
the future, and such terms will continue in full force and effect.

12.9 Counterparts; Electronic Delivery.  This Agreement and any amendment may be
executed in one or more counterparts (including by way of PDF or electronic
transmission), each of which will be deemed an original, but all of which
together will constitute one and the same instrument.  When executed by the
Parties, this Agreement will constitute an original instrument, notwithstanding
any electronic transmission, storage and printing of copies of

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this Agreement from computers or printers.  For clarity, PDF signatures will be
treated as original signatures.

12.10 Use of Names.  Neither Party will, without prior written consent of the
other Party, use the name or any trademark or trade name owned by the other
Party, or owned by an affiliate or parent corporation of the other Party, in any
publication, publicity, advertising, or otherwise, except as expressly permitted
by Article 5.

12.11 Independent Contractors.  Nothing contained in this Agreement will be
deemed to constitute a joint venture, partnership, or employer-employee
relationship between Idera and Vivelix, or to constitute one as the agent of the
other.  Idera will not be entitled to any benefits applicable to employees of
Vivelix.  Both Parties will act solely as independent contractors, and nothing
in this Agreement will be construed to make one Party an agent, employee, or
legal representative of the other Party for any purpose or to give either Party
the power or authority to act for, bind, or commit the other Party.

12.12 Entire Agreement.  This Agreement, together with the Exhibits attached
hereto, constitutes the entire agreement and understanding between the Parties
with respect to the subject matter hereof, and supersede all prior and
contemporaneous proposals, oral or written, confidentiality agreements, and all
other communications between the Parties with respect to such subject matter. 

12.13 Modifications.  The terms and conditions of this Agreement may not be
amended or modified, except in writing signed by both Parties.

12.14 Exports.  The Parties acknowledge that the export of technical data,
materials, or products is subject to the exporting Party receiving any necessary
export licenses and that the Parties cannot be responsible for any delays
attributable to export controls which are beyond the reasonable control of
either Party.  Vivelix and Idera agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples, or equipment received or generated under this Agreement in violation of
any applicable export control laws.

12.15 Further Assurances.  Each Party agrees to do and perform all such
further  reasonable acts and things and will execute and deliver such other
agreements, certificates, instruments, and documents necessary to carry out the
intent and accomplish the purposes of this Agreement and to evidence, perfect,
or otherwise confirm its rights hereunder. 

12.16 Interpretation.

12.16.1 This Agreement was prepared in the English language, which language will
govern the interpretation of, and any dispute regarding, the terms of this
Agreement.

12.16.2 Each of the Parties acknowledges and agrees that this Agreement has been
diligently reviewed by and negotiated by and between them, that in such
negotiations each of them has been represented by competent counsel and that the
final agreement contained herein, including the language whereby it has been
expressed, represents the joint efforts of the Parties and their
counsel.  Accordingly, in the event an ambiguity or a question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party by virtue of the authorship of any provisions of this
Agreement.

12.16.3 The definitions of the terms herein will apply equally to the singular
and plural forms of the terms defined.  Whenever the context may require, any
pronoun will include the corresponding masculine, feminine, and neuter
forms.  The word “any” will mean “any and all” unless otherwise clearly
indicated by context.

12.16.4 Unless the context requires otherwise, (a) any definition of or
reference to any agreement, instrument, or other document herein will be
construed as referring to such agreement, instrument, or other document as from
time to time amended, supplemented, or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein
or therein), (b) any reference to any Applicable Laws herein will be construed
as referring to such Applicable Laws as from time to time enacted, repealed, or
amended, (c) any reference herein to any Person will be construed to mean the
Person’s successors and assigns (after any such

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succession or assignment), (d) the words “herein”, “hereof” and “hereunder”, and
words of similar import, will be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (e) the word “or” will be
interpreted to mean “and/or”, (f) all references herein to Articles, Sections,
or Appendices, unless otherwise specifically provided, will be construed to
refer to Articles, Sections, and Appendices of this Agreement, and (g) the words
“include” and “including” will be interpreted to mean “include without
limitation” and “including without limitation,” respectively.

12.16.5 References to sections of the Code of Federal Regulations and to the
United States Code will mean the cited sections, as these may be amended from
time to time.

[Signature Page Follows]

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In Witness Whereof, each of the Parties has caused its duly authorized officer
to execute and deliver this Agreement as of the Effective Date.

 

 

IDERA PHARMACEUTICALS, INC.

 

 

By:        /S/ VINCENT J. MILANO                         

Name:     VINCENT J. MILANO                             

Title:                  CEO                                                 

 

 

Vivelix PHARMACEUTICALS, LTD.

 

By:       /S/ WILIAM P. FORBES                            

Name:   WILLIAM P. FORBES                              

Title:      President & CEO                                       

 

 

[Signature Page to License Agreement]

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

 

 

Exhibit A

 

Backup Compounds

 

Oligo No.

Sequences

Modifications

Batch No

[**]

[**]

[**]

[**]

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. A total of 5 pages were omitted. [**]

 

 

 

 

 

 

 

 

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

 

 

Exhibit B

 

Excluded Compounds

 

 

 

 

 

Oligo No.

Sequences

Modifications

Batch No

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

 

 

 

 

 

 

 

 

 

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Exhibit C

 

IMO-9200 

 

 

[**].

 

 

 

 

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

 

Exhibit D

 

Licensed Patents 

 

(a) Section (a) Licensed Patents

 

 

 

PATENT/APPLICATION TITLE

PATENT/APPLICATION NUMBER

ISSUE/FILING DATE

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

 

 

(b) Section (b) Licensed Patents

 

 

 

PATENT/APPLICATION TITLE

PATENT/APPLICATION NUMBER

ISSUE/FILING DATE

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

 

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

[**]

 

 

CONFIDENTIAL

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