Exhibit 10.2

 

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisks denote omissions.

 

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PATENT ASSIGNMENT AGREEMENT

This PATENT ASSIGNMENT AGREEMENT (this “Agreement”) is entered into as of
September 8, 2011 (the “Effective Date”) by and between AUSPEX PHARMACEUTICALS,
INC., a Delaware corporation with its registered office at 3366 North Torrey
Pines Court, Suite 225, La Jolla, California, 92037 (“Auspex”), and CONCERT
PHARMACEUTICALS, INC., a Delaware corporation, with its registered office at 99
Hayden Avenue, Suite 500, Lexington, MA 02421 (“Concert”). Auspex and Concert
are sometimes referred to herein individually as a “Party” and collectively as
the “Parties”.

RECITALS

WHEREAS, Concert owns U.S. Patent Application Serial Number 12/283,290, which is
entitled “Deuterated Pirfenidone”, was filed on September 10, 2008, and was
published as US20090131485 on May 21, 2009 (such patent application, the
“Assigned Patent”); and

WHEREAS, Concert desires to assign the Assigned Patent to Auspex, and Auspex
desires to obtain such assignment.

NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the Parties
hereby agree as follows:

ARTICLE 1

DEFINITIONS.

As used herein, the following terms shall have the following meanings:

1.1 “Affiliate” shall mean, with respect to either Party, any person, firm,
trust, corporation, partnership or other entity or combination thereof that
directly or indirectly controls, is controlled by or is under common control
with such Party; the term “control” (including, with correlative meaning, the
terms “controlled by” or “under common control with”) meaning direct or indirect
ownership of fifty percent (50%) or more, including ownership by trusts with
substantially the same beneficial interests, of the voting and equity rights of
such person, firm, trust, corporation, partnership or other entity or
combination thereof, or the power to direct the management of such person, firm,
trust, corporation, partnership or other entity or combination thereof.

1.2 “Assigned Patent” shall have the meaning assigned in the first recital
above.

1.3 “Asset Purchase Agreement” shall mean any asset purchase agreement Auspex
enters into wherein it sells to a Third Party all of Auspex’s assets necessary
to commercialize a Product in the U.S. For clarity, an Asset Purchase Agreement
does not include any agreement that is entered into as part of, or otherwise
results in, an Auspex Change of Control.

1.4 “Auspex Change of Control” shall occur if Auspex shall sell, convey,
exclusively license or otherwise dispose of all or substantially all of its
property or business or merge with or into or consolidate with any other
corporation, limited liability company or other entity (other

 

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than a wholly-owned subsidiary of Auspex), or if any other transaction occurs
which results in (assuming an immediate and maximum exercise/conversion of all
derivative securities issued in the transaction) the stockholders of Auspex
immediately prior to the transaction owning less than 50% of the voting stock of
Auspex immediately following the transaction, unless the holders of at least 60%
of the Preferred Stock of Auspex, voting together as a single class on an
as-converted to Common Stock basis, affirmatively elect not to treat the
transaction as a triggering event for the payment of liquidation preferences
under the Certificate of Incorporation of Auspex, provided, however, that none
of the following shall be considered an Auspex Change of Control: (a) a merger
effected exclusively for the purpose of changing the domicile of Auspex or (b) a
transaction in which the stockholders of Auspex immediately prior to the
transaction own 50% or more of the voting stock of the surviving corporation
(or, if the surviving corporation is a wholly owned subsidiary, its parent)
following the transaction (taking into account only stock of Auspex held by such
stockholders prior to the transaction).

1.5 “Auspex Change of Control Consideration” means, with respect to the first
Auspex Change of Control to occur during the term of this Agreement, the sum of
(a) the aggregate amount of all cash and the fair market value of all securities
and/or other property paid or payable on or after the closing of the Auspex
Change of Control as consideration for or with respect to an Auspex Change of
Control, including without limitation all amounts paid or payable, distributed
or distributable or issued or issuable to stockholders of Auspex on or after the
closing of the Auspex Change of Control and/or holders of convertible
securities, options, warrants, stock appreciation rights or similar rights or
securities in Auspex, whether vested or unvested (collectively, the
“Securityholders”), including any consideration subject to an earn-out
provision, escrow agreement or similar arrangement which is actually paid to
Auspex or to the Securityholders following the achievement of the conditions
relating to such earn-out provision, the expiration of the escrow agreement or
satisfaction of a similar arrangement, and the aggregate amount of any
indebtedness for money borrowed that is outstanding as of the closing of such
Auspex Change of Control and/or assumed, retired or defeased by the surviving
entity resulting from such Auspex Change of Control, in each case as
consideration for or with respect to such Change of Control, and (b) any
consideration that would have otherwise been paid to stockholders of Auspex at
the closing of such Auspex Change of Control but for the payment obligations
described in Section 3.4 of this Agreement. If Auspex is the surviving entity in
the Auspex Change of Control and the issuer of equity securities held by the
stockholders of Auspex immediately prior to the date of the Auspex Change of
Control remains unchanged as a result of the Auspex Change of Control, then the
Auspex Change of Control Consideration shall include (in addition to the amounts
specified above) Auspex’s reasonable estimate of the fair market value of the
Common Stock of Auspex, Preferred Stock of Auspex, and options, warrants or
other rights to purchase Preferred Stock or Common Stock of Auspex owned by the
stockholders of Auspex immediately following the consummation of the Auspex
Change of Control.

1.6 “Auspex Indemnitee” has the meaning set forth in Section 6.2.

1.7 “Combination Product” shall mean any pharmaceutical product which contains
(a) deuterated pirfenidone and (b) at least one other ingredient which is
Therapeutically Active.

1.8 “Concert Indemnitee” has the meaning set forth in Section 6.1.

 

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1.9 “Confidential Information” shall mean any and all Information that (a) is
disclosed by Auspex or its Affiliates to Concert or its Affiliates under this
Agreement, whether in oral, written, graphic, or electronic form, or
(b) concerns the Assigned Patent or the inventions disclosed or claimed therein.

1.10 “European Union” or “EU” shall mean the European Union member states as
then constituted. As of the Effective Date, the European Union member states are
Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden, and the United Kingdom.

1.11 “Effective Date” shall mean the date first written above.

1.12 “Indemnitee” means either an Auspex Indemnitee or a Concert Indemnitee.

1.13 “Information” shall mean information, results and data whatsoever, in any
tangible or intangible form, including without limitation, inventions,
practices, methods, techniques, specifications, formulations, formulae,
copyrights, software, knowledge, know-how, skill, experience, trade secrets,
ideas, concepts, processes, protocols, materials, samples, analytical and
quality control data, any other results of experimentation and testing, studies,
procedures, drawings, and legal information and descriptions, and all
intellectual property rights therein.

1.14 “Inventors” has the meaning set forth in Section 2.2.

1.15 “License Agreement” shall mean any license agreement Auspex enters into
wherein it grants a Third Party a license to sell a Product in the U.S. For
clarity, a License Agreement does not include any agreement that is entered into
as part of, or otherwise results in, an Auspex Change of Control.

1.16 “Net Sales” means the revenue actually invoiced by Auspex or its Affiliates
for the sale in the U.S., by Auspex or its Affiliates to Third Parties that are
not sublicensees of the selling party, of Products for which the deuterated
pirfenidone contained therein or the manufacture or use of such deuterated
pirfenidone is claimed, at the time of sale, by a Valid Claim, less the
following amounts, all as determined in accordance with U.S. generally accepted
accounting principles as consistently applied by Auspex and all to the extent
relating to such U.S. sales of Products: uncollectible amounts or reasonable
reserves accrued therefor (it being understood that any subsequent reductions in
such accrual amounts due to collections in subsequent periods shall be included
in Net Sales when such reductions occur), transportation charges, commissions,
rebates, retroactive price reductions, discounts, credits, allowances
(including, without limitation, charge backs from wholesalers), adjustments,
insurance, and sales, VAT, use and other taxes based on sales prices, but not
including taxes assessed on income derived from such sales. For the purpose of
determining royalties due to Concert, Net Sales shall calculate Net Sales of
Combination Products by multiplying Net Sales of such Combination Product by a
fraction A/(A+B), where A is the sale price of the Product portion of such
Combination Product when sold separately and B is the sale price of the other
Therapeutically Active ingredient(s) in such Combination Product when sold
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if the Product portion of such Combination Product or any of the other
Therapeutically Active ingredients in such Combination Product is not then sold
separately, then Auspex shall calculate Net Sales of such Combination Products
by the fraction C/(C+D), where C is the fair market value of the Product portion
of such Combination Product (as determined by an independent expert mutually
agreed upon by the Parties if the Parties are unable to mutually agree on such
fair market value) and D is the fair market value of the other Therapeutically
Active ingredients in such Combination Product (as determined by an independent
expert mutually agreed upon by the Parties if the Parties are unable to mutually
agree on such fair market value).

1.17 “North America” shall mean the U.S., Canada and Mexico.

1.18 “Payment Term” has the meaning set forth in Section 3.3.

1.19 “Product” shall mean any pharmaceutical product containing deuterated
pirfenidone.

1.20 “Responsible Executive” shall mean the Chief Executive Officer or duly
appointed representative thereof.

1.21 “Sublicense” shall mean either a License Agreement or an Asset Purchase
Agreement.

1.22 “Sublicense Revenue” shall mean any revenue received by Auspex and its
Affiliates pursuant to a Sublicense as compensation for any license or sale, as
applicable, of the right to sell in the U.S. Products for which the deuterated
pirfenidone contained therein or the manufacture or use of such deuterated
pirfenidone is claimed, at the time such revenue is earned by Auspex and its
Affiliates, by a Valid Claim, including upfront payments, milestone payments,
and royalty payments but excluding any revenue received: (a) for equity or debt
securities of Auspex, to the extent that such consideration does not exceed the
then-current fair market value of such securities; (b) as reasonable cost-based
funding for research, development, manufacturing or commercialization activities
undertaken by or on behalf of Auspex following the execution of the Sublicense;
(c) for the right to sell such Products with respect to countries or
jurisdictions other than the United States; (d) with respect to products other
than such Products, provided that the Parties shall meet and negotiate in good
faith to agree upon any allocation of revenue between such Product and such
other products; (e) as a bona-fide loan, provided that any loan amounts that are
forgiven shall be included in Sublicense Revenue; or (f) as reimbursement for
patent, trademark or other expenses incurred by Auspex following execution of
the Sublicense.

1.23 “Sublicense Revenue Attributable To The U.S.” shall mean:

(a) in the case of a Sublicense in which the right to sell Products is limited
to the U.S., [**] percent ([**]%) of the Sublicense Revenue received by Auspex
and its Affiliates pursuant to such Sublicense; or

(b) in the case of a Sublicense which includes the right to sell Products in the
U.S. as well as in one or more additional countries or jurisdictions:

 

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(i) with respect to any Sublicense Revenue received by Auspex and its Affiliates
pursuant to such Sublicense that is attributable only to such additional
countries or jurisdictions and is not attributable to the U.S. portion of such
rights, such as royalty payments for sales of Products in such additional
countries or jurisdictions, [**] ([**]%) of such Sublicense Revenue received by
Auspex and its Affiliates;

(ii) with respect to any Sublicense Revenue received by Auspex and its
Affiliates pursuant to such Sublicense that is attributable only to the U.S.
portion of such rights, such as royalty payments for sales of Products in the
U.S., [**] percent ([**]%) of such Sublicense Revenue received by Auspex and its
Affiliates;

(iii) with respect to any Sublicense Revenue received by Auspex and its
Affiliates pursuant to such Sublicense that is attributable to both the U.S.
portion of such rights and such additional countries or jurisdictions:

(A) where such Sublicense includes the right to sell Products in all countries
and jurisdictions, [**] percent ([**]%) of such Sublicense Revenue received by
Auspex and its Affiliates;

(B) where such Sublicense only includes the right to sell Products in the U.S.
and the EU, [**] percent ([**]%) of such Sublicense Revenue received by Auspex
and its Affiliates;

(C) where such Sublicense only includes the right to sell Products in the U.S.
and Japan, [**] percent ([**]%) of such Sublicense Revenue received by Auspex
and its Affiliates;

(D) where such Sublicense only includes the right to sell Products in North
America, [**] percent ([**]%) of such Sublicense Revenue received by Auspex and
its Affiliates; or

(E) where such Sublicense only includes the right to sell Products in a
combination of the U.S. plus other countries or jurisdictions that is not
specifically addressed in (A)-(D) above, the percentage of such Sublicense
Revenue received by Auspex and its Affiliates [**].

1.24 “Therapeutically Active” shall mean that the ingredient is biologically
active but shall not include diluents, vehicles, or specific adjuvants or any
other ingredient which does not have any, or which has only incidental,
therapeutic properties when present alone.

1.25 “Third Party” shall mean a person or entity other than (a) Auspex or its
Affiliates, or (b) Concert or its Affiliates.

1.26 “U.S.” shall mean the United States of America, including all possessions
and territories thereof.

1.27 “Valid Claim” shall mean:

 

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(a) a claim of an issued and unexpired U.S. patent owned by Auspex or its
Affiliates, including any issued and unexpired patent issuing from the Assigned
Patent, that (i) is entitled to a priority date of [**], (ii) claims deuterated
pirfenidone or its manufacture or use, (iii) has not lapsed, been cancelled,
rejected or revoked, or been held to be invalid or unenforceable by an
unappealed or unappealable decision or judgment of a U.S. federal court of
competent jurisdiction or the United States Patent and Trademark Office, and
(iv) has not been abandoned, disclaimed or admitted to be invalid or
unenforceable through reissue or disclaimer; or

(b) a pending claim in a pending U.S. patent application owned by Auspex or its
Affiliates, including the Assigned Patent, that (i) is entitled to a priority
date of [**], (ii) claims deuterated pirfenidone or its manufacture or use, and
(iii) has not been finally determined to be unallowable by an unappealed or
unappealable decision of the United States Patent and Trademark Office.

ARTICLE 2

ASSIGNMENT TO AUSPEX

2.1 Assignment. Concert hereby assigns to Auspex all right, title and interest
in and to the Assigned Patent. On or about the Effective Date, Concert shall
execute the Assignment of Patents and Patent Applications attached hereto as
Exhibit A as evidence of such assignment.

2.2 Cooperation. As a result of the assignment pursuant to Section 2.1 above,
Auspex shall be the sole owner of the Assigned Patent and shall have sole
control and discretion over the filing, prosecution, maintenance, abandonment,
enforcement and defense of the Assigned Patent as well as all patent
applications claiming priority thereto and all patents arising from any of the
foregoing. Concert agrees to undertake any actions and execute and deliver any
documents and instruments that are reasonably necessary to perfect Auspex’s
title in and to the Assigned Patent. At Auspex’s request, Concert shall use
reasonable efforts to make the inventors of the Assigned Patent (the
“Inventors”) available to Auspex to provide reasonable assistance with respect
to such filing, prosecution, maintenance, abandonment, enforcement or defense.
In the event that Concert or the Inventors do not, for any reason, perform such
acts or execute any documents or instruments within a reasonable time of
Auspex’s request, Concert hereby irrevocably appoints Auspex as Concert’s
attorney-in-fact for the purpose of executing such documents on Concert’s
behalf, which appointment is coupled with an interest.

2.3 Transfer of Patent Files. Within [**] after the Effective Date, Concert
shall provide Auspex with all documents in its possession or the possession of
its outside patent counsel with respect to the filing, prosecution or
infringement of the Assigned Patent (including inventorship and patentability
analyses) or the conception, reduction to practice or assignment by the
inventors, of the inventions disclosed or claimed in the Assigned Patent,
including without limitation all files concerning the Assigned Patent, as such
files are maintained by Concert and its outside patent counsel.

 

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ARTICLE 3

COMMERCIAL TERMS

3.1 Royalties.

(a) Royalty Rate. Subject to Sections 3.1(b) and 3.4(d), Auspex shall pay to
Concert, within [**] after the end of each calendar quarter during the
applicable Payment Term, royalties equal to [**] percent ([**]%) of the Net
Sales invoiced during such calendar quarter on account of sales of Products in
the U.S.

(b) Royalty Reduction for Third Party License. If Auspex reasonably determines
that it is necessary to acquire rights to intellectual property owned by a Third
Party in order to develop, manufacture, use, import, sell or otherwise
commercialize the Product in the U.S., Auspex or its Affiliate shall have the
right to acquire such rights through a license or otherwise and Auspex shall
deduct, from the royalty payments due to Concert under this Agreement, an amount
equal to [**] percent ([**]%) of the royalties paid by Auspex and its Affiliates
to such Third Party(ies) with respect to the U.S.; provided, however, that in no
event shall the reduction provided for in this Section 3.1(b) reduce the
royalties payable to Concert during any calendar quarter by more than [**]
percent ([**]%).

(c) Royalty Reports and Payments. Each payment of royalties shall be accompanied
by a statement of the amount of Net Sales invoiced during the applicable
calendar quarter, containing reasonable detail regarding the calculation of the
royalties and the underlying sales data. Auspex shall also provide such a
statement with respect to each calendar quarter for which no royalty payment is
owed because Auspex’s remaining credit pursuant to Section 3.4(d) exceeds the
amount of the royalties that would otherwise be due to Concert, after
application of Section 3.1(b), on account of Net Sales for such calendar
quarter; each such statement shall specify the amount of credit that remains
after deduction of such royalty amount.

3.2 Sublicense Revenue. If Auspex in its sole discretion enters into a
Sublicense, subject to Section 3.4(d), Auspex shall pay to Concert, within [**]
after the end of each calendar quarter during the applicable Payment Term, [**]
percent ([**]%) of the Sublicense Revenue Attributable To The U.S. that is
received by Auspex and its Affiliates during such calendar quarter. Each such
payment shall be accompanied by a statement of the amount of Sublicense Revenue
received during such calendar quarter, and all other information reasonably
necessary to determine the appropriate amount of such payment. Auspex shall also
provide such a statement with respect to each calendar quarter for which no
Sublicense Revenue-based payment is owed because Auspex’s remaining credit
pursuant to Section 3.4(d) exceeds the amount of the Sublicense Revenue-based
payment that would otherwise be due to Concert pursuant to this Section 3.2 on
account of Sublicense Revenue Attributable To The U.S. that is received by
Auspex and its Affiliates during such calendar quarter; each such statement
shall specify the amount of credit that remains after deduction of such amount.
If such payment or statement is for Sublicensing Revenue that is the last
payment that Auspex is entitled to receive under (a) a License Agreement in
which the Third Party’s license to sell a Product in the U.S. is exclusive and
not limited to a particular indication or field or (b) an Asset Purchase
Agreement, then such payment or statement shall be accompanied by notice of such
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Sublicense Revenue Payment Notice”). This Agreement shall expire upon Concert’s
receipt of such payment or statement and accompanying Final Sublicense Revenue
Payment Notice, and Auspex will not have any further payment obligations to
Concert.

3.3 Payment Term. Auspex’s payment obligations under Sections 3.1 and 3.2 above
with respect to a particular Product shall commence on the Effective Date and
expire upon the expiration of the last to expire Valid Claim claiming the
deuterated pirfenidone contained in such Product or the manufacture or use of
such deuterated pirfenidone (such period, the “Payment Term”). For clarity, no
payments are owed pursuant to Section 3.1 or 3.2 at any time when there is no
Valid Claim claiming (i) the deuterated pirfenidone contained in the Product
(1) sold in the U.S. by Auspex or its Affiliate (in the case of payments
pursuant to Section 3.1) or (2) that is the subject of such Sublicense (in the
case of payments pursuant to Section 3.2) or (ii) the manufacture or use of such
deuterated pirfenidone.

3.4 Auspex Change of Control Payment.

(a) If an Auspex Change of Control occurs during the term of this Agreement,
then, with respect solely to the first such Auspex Change of Control to occur
during the term of this Agreement, Auspex shall pay to Concert, as described in
greater detail in this Section 3.4, the equivalent of [**] percent ([**]%) of
the value of Auspex Change of Control Consideration that is attributable to the
United States pirfenidone rights. Because the world-wide pirfenidone rights are
accepted by the Parties hereto to be [**] percent ([**]%) of Auspex’s total
value and the United States pirfenidone rights are accepted by the Parties
hereto to be [**] percent ([**]%) of the world-wide pirfenidone rights, the
equivalent of [**] percent ([**]%) of the value of Auspex Change of Control
Consideration attributable to the United States pirfenidone rights is equal to
[**], which equals one and forty-four-one hundredths percent (1.44%) of the
Auspex Change of Control Consideration. Within [**] after the consummation of
the Auspex Change of Control, provided that as of the date of the Auspex Change
of Control there is at such time at least one Valid Claim that claims the
deuterated pirfenidone contained in a Product or the manufacture or use of such
deuterated pirfenidone, Auspex shall pay to Concert one and forty-four-one
hundredths percent (1.44%) of the Auspex Change of Control Consideration that is
distributed to Auspex or its Securityholders at the closing of the Auspex Change
of Control in respect of such Securityholders’ ownership of Common Stock of
Auspex, Preferred Stock of Auspex, and options, warrants or other rights to
purchase Preferred Stock or Common Stock of Auspex. In addition, as soon as
administratively practicable (but in any event within [**]) following each date
on which any subsequent additional portion of the Auspex Change of Control
Consideration becomes available for distribution as a result of an actual
payment of such portion of the Auspex Change of Control Consideration to Auspex
or its Securityholders in respect of such Securityholders’ ownership of Common
Stock of Auspex, Preferred Stock of Auspex, and options, warrants or other
rights to purchase Preferred Stock or Common Stock of Auspex or the release of
any Auspex Change of Control Consideration subject to an escrow or other
contingency arrangement from the applicable escrow or contingency arrangement
(each, a “Subsequent Payment Date”), Auspex shall pay to Concert one and
forty-four-one hundredths percent (1.44%) of the Auspex Change of Control
Consideration that is distributed to Auspex or its Securityholders on such
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(b) The payments required by this Section 3.4 shall be payable in the same form
and proportion as the relevant Auspex Change of Control Consideration that
triggers the applicable payment under this Section 3.4; provided, however, that
[**], any or all of the payments required to be paid pursuant to this paragraph
may be [**].

(c) If, at any time during the term of this Agreement, the stockholders of
Auspex and its Affiliates are no longer eligible for additional distributions of
Auspex Change of Control Consideration in respect of such stockholders’
ownership of Common Stock of Auspex, Preferred Stock of Auspex, and options,
warrants or other rights to purchase Preferred Stock or Common Stock of Auspex,
then Auspex shall provide notice of such fact to Concert (such notice, the
“Final Change of Control Consideration Payment Notice”). Provided that Auspex
has made all payments under this Section 3.4 with respect to Auspex Change of
Control Consideration distributed to stockholders of Auspex and its Affiliates
prior to the date of such Final Change of Control Consideration Payment Notice,
Auspex will not have any further payment obligations to Concert pursuant to this
Section 3.4 after Concert’s receipt of such Final Change of Control
Consideration Payment Notice, even if a subsequent Auspex Change of Control
occurs during the term of this Agreement.

(d) Auspex shall automatically be entitled to a credit equal to the sum of all
payments made pursuant to this Section 3.4. Such credit may be applied solely
towards any royalty payments that become due in accordance with Section 3.1 or
Sublicense Revenue-based payments that become due in accordance with Section 3.2
after the payment amount pursuant to this Section 3.4 giving rise to the credit
has been made to Concert. Auspex shall not have any obligation to make any
payments pursuant to Section 3.1 or 3.2 at any time when it has any unused
credit for any payment made pursuant to this Section 3.4 that is in excess of
the payments otherwise due pursuant to Section 3.1 or 3.2.

(e) For the avoidance of doubt, nothing contained in this Agreement is intended
to create or convey to Concert any equity or ownership interest in Auspex or any
rights commonly associated with any such interest, including, but not limited
to, the right to vote on any matters put before Auspex’s stockholders. This
Agreement and the rights hereunder do not constitute securities of Auspex.

(f) For clarity, Auspex does not have any payment obligations pursuant to this
Section 3.4 if, as of the Auspex Change of Control, there is no Valid Claim
claiming the deuterated pirfenidone contained in a Product or the manufacture or
use of such deuterated pirfenidone.

(g) Neither Auspex nor any of its Affiliates shall enter into or execute any
agreement or instrument in connection with, or otherwise cooperate with or
permit, the first Auspex Change of Control transaction to occur during the term
of this Agreement unless Auspex and its Affiliates make proper provision so that
the acquiring entity and any other entity succeeding to any rights of Auspex or
its Affiliates in the Product in the United States assume and succeed to the
obligations of Auspex set forth in this Section 3.4 and, prior to or
simultaneously with the consummation of such Auspex Change of Control
transaction, Auspex delivers to Concert instrument(s) of assumption for the
benefit of Concert effecting the assumption and succession described in this
Section 3.4(g).

 

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3.5 Records and Audit. For a period of [**] after Net Sales is invoiced or
Sublicense Revenue or Auspex Change of Control Consideration is received, Auspex
shall keep complete and accurate records pertaining to the applicable revenue
invoiced or received, in sufficient detail to permit Concert to confirm the
accuracy of all payments made hereunder. Concert shall have the right to cause
an independent, certified public accountant to audit such records to confirm
Auspex’s payments pursuant to Sections 3.1, 3.2 and 3.4; provided, however, that
such auditor shall execute a confidentiality agreement with Auspex in customary
form and shall only disclose to Concert whether Auspex paid Concert the correct
amounts pursuant to Sections 3.1, 3.2 and 3.4 during the audit period and if
not, any information necessary to explain the source of the discrepancy. If such
audit determines that Auspex paid Concert less than the amount properly due and
such determination is not subject to a good faith dispute, then Auspex shall
promptly pay Concert an amount equal to such underpayment, and if the amount
underpaid exceeds [**] percent ([**]%) of the amount actually due over the
audited period, Auspex shall also reimburse Concert for the reasonable costs of
such audit (including the fees and expenses of the certified public accountant).
In the event such audit determines that Auspex paid Concert more than the amount
properly due in respect of any quarter, then Concert shall promptly issue a
refund to Auspex of such overpayment. Such audits may be exercised only [**] and
only once with respect each payment period, within [**] after the payment period
to which such records relate, upon reasonable advance notice to Auspex and
during normal business hours. The terms of this Section 3.5 shall survive any
expiration of this Agreement for a period of [**].

3.6 Withholding of Taxes. Each Party shall 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. Any withholding of taxes levied
by tax authorities on the payments by Auspex to Concert hereunder shall be borne
by Concert and deducted by Auspex from the sums otherwise payable by it
hereunder for payment to the proper tax authorities on behalf of Concert. Auspex
agrees to cooperate with Concert in the event Concert claims exemption from such
withholding or seeks deductions under any double taxation or other similar
treaty or agreement from time to time in force, such cooperation to consist of
providing receipts of payment of such withheld tax or other documents reasonably
available to Concert.

ARTICLE 4

CONFIDENTIALITY

4.1 Confidentiality. Except to the extent expressly authorized by this Agreement
or otherwise agreed in writing by Auspex, Concert agrees that it shall keep
confidential and shall not publish or otherwise disclose and shall not use for
any purpose other than as provided for in this Agreement any Confidential
Information unless Concert can demonstrate by competent proof that such
Confidential Information:

(a) was already known to Concert or its Affiliate, other than under an
obligation of confidentiality, at the time of disclosure by Auspex or its
Affiliate; provided, however, that this subsection shall not apply to
Confidential Information that relates to the Assigned Patent and was known by
Concert or its Affiliate as of the Effective Date;

 

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(b) was generally available to the public or otherwise part of the public domain
at the time of its disclosure to Concert or its Affiliate;

(c) became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of
Concert or its Affiliate in breach of this Agreement;

(d) was disclosed to Concert without any obligation of confidentiality by a
Third Party who had a legal right to make such disclosure and who did not obtain
such information directly or indirectly from Auspex or its Affiliate; or

(e) was independently discovered or developed by Concert or its Affiliate
without access to or aid, application or use of Confidential Information, as
evidenced by a contemporaneous writing.

4.2 Authorized Disclosure. Concert or its Affiliate may disclose Confidential
Information to the extent such disclosure is reasonably necessary to comply with
applicable laws, governmental regulations or court orders. In the event Concert
or its Affiliate is legally required to make a disclosure of Confidential
Information, Concert shall give reasonable advance notice to Auspex of such
required disclosure so that Auspex may seek a protective order or other measure
preventing or limiting the required disclosure or if, as between the Parties,
only Concert is permitted to seek such order or measure, so that Concert may
reasonably consider doing so at Auspex’s request and expense.

4.3 Terms of this Agreement. The Parties agree that the material financial terms
of this Agreement shall be considered confidential information of both Parties
and that each Party shall keep such terms confidential unless otherwise agreed
by the Parties; provided, however, that either Party may disclose such terms in
confidence to any bona fide potential or actual investor, lender, acquiror,
licensee and other financial or commercial partner solely for the purpose of
evaluating or participating in a potential or actual investment, loan,
acquisition, license or collaboration. The Parties will consult with one another
and use reasonable efforts to agree on the provisions of this Agreement to be
redacted in any filings required to be made by either Party with the Securities
and Exchange Commission or as otherwise required by law, provided that each
Party shall have the right to make any required disclosures as it deems
necessary in order to comply with applicable laws and regulations, the rules of
any stock exchange and other legal requirements.

4.4 Attorney-Client Privilege. Concert is not waiving, and will not be deemed to
have waived or diminished, any of its attorney work product protections,
attorney-client privileges or similar protections and privileges as a result of
disclosing Confidential Information concerning the Assigned Patent or the
inventions disclosed or claimed therein to Auspex, regardless of whether Concert
has asserted, or is or may be entitled to assert, such privileges and
protections. The Parties (a) share a common legal and commercial interest in all
of such Confidential Information that is subject to such privileges and
protections; (b) are or may become joint defendants in actions, suits or
proceedings to which the Confidential Information covered by such protections
and privileges relates; (c) intend that such privileges and protections remain
intact should either Party become subject to any actual or threatened actions,
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proceedings to which the Confidential Information covered by such protections
and privileges relates; and (d) intend that after the Effective Date that Auspex
shall have the right to assert such protections and privileges. Neither Party
shall admit, claim or contend, in actions, suits or proceedings involving either
Party or otherwise, that Concert waived any of its attorney work-product
protections, attorney-client privileges or similar protections and privileges
with respect to any information, documents or other material concerning the
Assigned Patent due to Concert disclosing such Confidential Information to
Auspex.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

5.1 Mutual Representations and Warranties. Each Party hereby represents,
warrants and covenants to the other Party as follows:

(a) Corporate Existence and Power. It is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated, and has full corporate power and authority and the legal right to
own and operate its property and assets and to carry on its business as it is
now being conducted and as contemplated by this Agreement, including without
limitation, the right to grant the rights granted hereunder.

(b) Authority and Binding Agreement. As of Effective Date, (i) it has the
corporate power and authority and the legal right to enter into this Agreement
and perform its obligations hereunder; (ii) it has taken all necessary corporate
action on its part required to authorize the execution and delivery of the
Agreement and the performance of its obligations hereunder; and (iii) the
Agreement has been duly executed and delivered on behalf of such Party, and
constitutes a legal, valid and binding obligation of such Party that is
enforceable against it in accordance with its terms.

5.2 Further Representations and Warranties by Concert. Concert hereby further
represents, warrants and covenants to Auspex as follows:

(a) Patents and Patent Applications.

(i) The Assigned Patent is the only U.S. patent or patent application owned or
controlled by Concert as of the Effective Date that relates specifically to
deuterated pirfenidone, its manufacture or use, or pharmaceutical products
containing deuterated pirfenidone.

(ii) The manufacture, use, import or sale of deuterated pirfenidone would not
infringe any U.S. patent or patent application (as if the pending claims were
issued) specifically relating to deuterated pirfendone, its manufacture or use,
or pharmaceutical products containing deuterated pirfenidone, other than the
Assigned Patent, that Concert owns or controls as of the Effective Date.

 

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(b) Assigned Patent. As of the Effective Date, Concert is the sole owner of the
entire right, title and interest in and to the Assigned Patent. Concert
represents that it has the full and legal rights and authority to assign to
Auspex the Assigned Patent.

(c) Obligation to Assign. All individuals who have performed research for
Concert regarding deuterated pirfenidone or the Assigned Patent have assigned to
Concert all inventions and other intellectual property arising from such
research.

(d) No Conflict. Concert has not entered, and shall not enter, into any
agreement with any Third Party that is in conflict with the rights granted to
Auspex under this Agreement, and has not taken and shall not take any action
that would in any way prevent it from granting the rights granted to Auspex
under this Agreement, or that would otherwise conflict with or adversely affect
the rights granted to Auspex under this Agreement. Its performance and execution
of this Agreement does not and will not result in a breach of any other contract
to which it is a party. It is aware of no action, suit, inquiry or investigation
instituted by any Third Party that threatens the validity of this Agreement.

(e) No Third Party Rights. No Third Party has or has ever had any license,
option, lien or other rights or interest in or to the Assigned Patent.

(f) Third Party Intellectual Property. To Concert’s knowledge as of the
Effective Date, no intellectual property of any Third Party was infringed or
misappropriated during the creation of the intellectual property that is the
subject matter of the Assigned Patent.

5.3 Disclaimers. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, NEITHER PARTY
MAKES, AND EACH PARTY HEREBY DISCLAIMS, ANY AND ALL REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER
OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY WARRANTY ARISING
OUT OF PRIOR COURSE OF DEALING AND USAGE OF TRADE.

ARTICLE 6

INDEMNIFICATION

6.1 Indemnification by Auspex. Auspex shall indemnify, defend and hold Concert
and its Affiliates and their respective officers, directors, trustees,
employees, agents and their respective successors, heirs and assigns
(collectively, the “Concert Indemnitees”) harmless from and against all damages,
costs, expenses and other liabilities, including reasonable attorney’s fees and
court costs (collectively, “Losses”), incurred by Concert Indemnitees in
connection with any Third Party claim, action, suit or proceeding (collectively,
“Claims”) to the extent that such Claims arise out of, are based on, or result
from (a) the breach of any of Auspex’s obligations under this Agreement,
including Auspex’s representations and warranties, covenants and agreements set
forth herein; (b) the willful misconduct or negligent or reckless acts, in

 

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connection with this Agreement, of Auspex, its Affiliates, or the officers,
directors, employees, or agents of Auspex or its Affiliates; or (c) the
manufacture, use, offer for sale, sale or importation of any pharmaceutical
product containing deuterated pirfenidone by Auspex, it Affiliates, licensees or
sublicensees; except, in each case, to the extent such Losses result from the
intentional misconduct, gross negligence or recklessness of any of the Concert
Indemnitees or breach by Concert of any of its obligations under this Agreement.

6.2 Indemnification by Concert. Concert shall indemnify, defend and hold Auspex
and its Affiliates and their respective officers, directors, trustees,
employees, agents and their respective successors, heirs and assigns
(collectively, the “Auspex Indemnitees”) harmless from and against all Losses
incurred by Auspex Indemnitees in connection with any Claim to the extent that
such Claims arise out of, are based on, or result from (a) the breach of any of
Concert’s obligations under this Agreement, including Concert’s representations
and warranties, covenants and agreements set forth herein; or (b) the willful
misconduct or negligent or reckless acts, in connection with this Agreement, of
Concert, its Affiliates, or the officers, directors, employees, or agents of
Concert or its Affiliates; except, in each case, to the extent such Losses
result from the intentional misconduct, gross negligence or recklessness of any
of the Auspex Indemnitees or breach by Auspex of any of its obligations under
this Agreement.

6.3 Procedure. To be eligible to be so indemnified as described in this Article
6, each of the Indemnitees seeking to be indemnified shall provide the
indemnifying Party with prompt notice of any claim (with a description of the
claim and the nature and amount of any such loss) giving rise to the
indemnification obligation pursuant to Sections 6.1 or 6.2, as the case may be,
and the exclusive ability to defend such claim (with the reasonable cooperation
of Indemnitee(s)). Each Indemnitee(s) shall have the right to retain its own
counsel, at its own expense, if representation of the counsel of the
indemnifying Party would be inappropriate due to actual or potential differing
interests between such Indemnitee(s) and the indemnifying Party. Neither the
Indemnitee(s) nor the indemnifying Party shall settle or consent to the entry of
any judgment with respect to any claim for losses for which indemnification is
sought without the prior written consent of the other Party (not to be
unreasonably withheld or delayed); provided however, that the indemnifying Party
shall have the right to settle or compromise any claim for losses without such
prior written consent if the settlement or compromise provides for a full and
unconditional release of the Indemnitee(s) and is not materially prejudicial to
any Indemnitee’s rights.

ARTICLE 7

TERM; EXPIRATION.

7.1 Term. The term of this Agreement shall commence upon the Effective Date and
shall expire on the earliest of (a) expiration of the last Valid Claim and
(b) Concert’s receipt of a Final Sublicense Revenue Payment Notice pursuant to
Section 3.2.

7.2 Accrued Rights; Surviving Obligations. Expiration of this Agreement shall
not affect any accrued rights of either Party. The terms of Section 3.5, this
Section 7.2, and Articles 4 and 6 of this Agreement shall survive expiration of
this Agreement.

 

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ARTICLE 8

GOVERNING LAW; DISPUTE RESOLUTION.

8.1 Governing Law. This Agreement shall be governed by the laws of the State of
New York, excluding its choice of law rules.

8.2 Legal Compliance. The Parties shall review in good faith and cooperate in
taking such actions to ensure compliance of this Agreement with all applicable
laws.

8.3 Dispute Resolution.

(a) In the event of any dispute arising out of or related to this Agreement or
any alleged breach hereof, the Parties shall refer such dispute to their
respective Responsible Executive for attempted resolution by good faith
negotiations within [**] after such referral is made. In the event such officers
are unable to resolve such dispute within such [**] period, either Party may
invoke the provisions of Section 8.3(b).

(b) Except as provided in Section 8.3(a), any claim or controversy arising out
of or related to this Agreement or any breach hereof shall be submitted to a
state or federal court of competent jurisdiction.

ARTICLE 9

GENERAL PROVISIONS.

9.1 Notices. Any notice required or permitted to be given under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
addressed to the appropriate Party at the address specified below or such other
address as may be specified by such Party in writing in accordance with this
Section 9.1, and shall be deemed to have been given for all purposes (a) when
received, if hand-delivered or sent by confirmed facsimile or a reputable
courier service, or (b) five (5) business days after mailing, if mailed by first
class certified or registered airmail, postage prepaid, return receipt
requested.

All notices to Auspex shall be addressed as follows:

Auspex Pharmaceuticals, Inc.

3366 North Torrey Pines Court, Suite 225

La Jolla, California, 92037

Attn: Chief Executive Officer

Fax: (858) 558-2401

 

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With a copy to (which shall not constitute notice):

Cooley LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

Attn: Marya A. Postner, Ph.D.

Fax: (650) 849-7400

All notices to Concert shall be addressed as follows:

Concert Pharmaceuticals, Inc.

99 Hayden Avenue, Suite 500,

Lexington, MA 02421

Attn: Chief Executive Officer

Fax: (781) 674-5309

With a copy to (which shall not constitute notice):

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attn: Steven D. Barrett, Esq.

Fax: (617) 526-5000

9.2 Force Majeure. Both Parties shall be excused from the performance of their
obligations under this Agreement to the extent that such performance is
prevented by force majeure and the non-performing Party promptly provides notice
of the prevention to the other Party. Such excuse shall continue for so long as
the condition constituting force majeure continues and the non-performing Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the control of the
Parties, including an act of God, war, civil commotion, terrorist act, epidemic,
failure or default of public utilities or common carriers, destruction of
production facilities or materials by fire, earthquake, storm or like
catastrophe, and failure of plant or machinery (provided that such failure could
not have been prevented by the exercise of skill, diligence, and prudence that
would be reasonably and ordinarily expected from a skilled and experienced
person engaged in the same type of undertaking under the same or similar
circumstances).

9.3 Entire Agreement; Amendment. This Agreement, including the Exhibits hereto,
sets forth the complete, final and exclusive agreement and all of the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto with respect to the subject matter hereof and
supersedes, as of the Effective Date, all prior and contemporaneous agreements
and understandings between the Parties with respect to the subject matter
hereof. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties with respect to the subject matter of this Agreement other than as
are set forth in this Agreement, including the Exhibits. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the Parties unless reduced to writing and signed by an authorized officer
of each Party.

 

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9.4 Non-Waiver. The failure of a Party in any one or more instances to insist
upon strict performance of any of the terms and conditions of this Agreement
shall not be construed as a waiver or relinquishment, to any extent, of the
right to assert or rely upon any such terms or conditions on any future
occasion.

9.5 Independent Contractors. Each Party shall act solely as an independent
contractor, and nothing in this Agreement shall be construed to give either
Party the power or authority to act for, bind, or commit the other Party in any
way. Nothing herein shall be construed to create the relationship of partners,
principal and agent, or joint-venture partners between the Parties.

9.6 Severability. If any one or more of the provisions of this Agreement is held
to be invalid or unenforceable by any court of competent jurisdiction from which
no appeal can be or is taken, the provision shall be considered severed from
this Agreement and shall not serve to invalidate any remaining provisions
hereof. The Parties shall make a good faith effort to replace any invalid or
unenforceable provision with a valid and enforceable one such that the
objectives contemplated by the Parties when entering this Agreement may be
realized.

9.7 Assignment.

(a) This Agreement and the rights and obligations under this Agreement may not
be assigned, delegated, or otherwise transferred, in whole or in part, by
operation of law or otherwise, by either Party without the other Party’s express
prior written consent; provided, however, that either Party may assign its
rights or delegate its obligations under this Agreement without such consent to
(a) its Affiliate or (b) its successor in interest in connection with any
merger, consolidation, or sale of all or substantially all of the assets of such
party. In the event of such assignment by Auspex that occurs concurrently with
or following the grant of a Sublicense, Auspex (i.e., the original Party to this
Agreement) shall remain liable for all payment obligations to Concert pursuant
to Section 3.2 with respect to such Sublicense to the extent such assignee does
not fulfill such payment obligations. In the event of such assignment by Auspex
that occurs concurrently with or following an Auspex Change of Control, Auspex
(i.e., the original Party to this Agreement) shall remain liable for all payment
obligations to Concert pursuant to Section 3.4 with respect to such Auspex
Change of Control to the extent such assignee does not fulfill such payment
obligations.

(b) In the event of such assignment by Auspex that is to an Affiliate of Auspex
and not concurrently with or following an Auspex Change of Control, the terms
“Auspex” and “Party” in this Agreement shall, for purposes of determining
Auspex’s subsequent obligations to Concert pursuant to Section 3.4, be
understood to refer to such Affiliate and to each direct and indirect parent
company of such Affiliate (i.e., a subsequent change of control event of such
Affiliate or any of its direct or indirect parent companies shall constitute an
Auspex Change of Control if the definition of Auspex Change of Control is
otherwise satisfied if such Affiliate or direct or indirect parent is
substituted for Auspex in the definition of Auspex Change of Control), and
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payment obligations to Concert pursuant to Section 3.4 with respect to such
Auspex Change of Control only for so long as Auspex is a direct or indirect
parent company of such Affiliate, following which time all payment obligations
hereunder shall be the responsibility of such assignee and not (Auspex (i.e.,
the original Party to this Agreement). In the event of an assignment by Auspex
to an Affiliate pursuant to this subsection (b) wherein in connection with such
assignment such Affiliate also receives only those of Auspex’s assets necessary
to commercialize a Product, each reference to 1.44% in Section 3.4 would
thereafter be replaced with [**]% (in reflection that world-wide pirfenidone
rights would be equal to [**]% of such Affiliate’s total value rather than the
[**]% set forth in Section 3.4). In the event of an assignment by Auspex to an
Affiliate pursuant to this subsection (b) wherein in connection with such
assignment such Affiliate would receive assets in addition to those of Auspex’s
assets necessary to commercialize a Product, the Parties would work in good
faith to agree in writing to the value of the world-wide pirfenidone rights as a
percentage of the total value of the Affiliate and such percentage would
thereafter be substituted in lieu of [**]% into the formula set forth in
Section 3.4 and the result of such calculation shall be the percentage of such
Auspex Change of Control Consideration to be paid, in lieu of 1.44%, to Concert
on account of such Auspex Change of Control. In the event that the Parties
hereto are unable to agree to such value as a percentage of the total value
within [**] of such assignment, then the Parties agree to jointly designate an
appraiser that shall determine such value as a percentage of the total value,
which shall thereafter be binding upon the Parties and such percentage would
thereafter be substituted in lieu of [**]% into the formula set forth in
Section 3.4 and the result of such calculation shall be the percentage of such
Auspex Change of Control Consideration to be paid, in lieu of 1.44%, to Concert
on account of such Auspex Change of Control. The costs associated with such
appraisal shall be shared equally by the Parties.

(c) Any successor or assignee of rights and/or obligations permitted hereunder
(including payment obligations) shall, in writing to the other Party, expressly
assume performance of such rights and/or obligations. In the case of any
permitted assignment or transfer of or under this Agreement, this Agreement
shall be binding upon, and inure to the benefit of, the successors, executors,
heirs, representatives, administrators and assigns of the Parties hereto and the
assigning Party shall remain liable for the obligations of its successor or
assignee as set forth herein. Any attempted assignment, delegation, or transfer
in violation of the foregoing will be null and void. For clarity, Auspex is free
to assign, transfer and grant licenses or other rights to the Assigned Patent in
its sole discretion and without the consent of Concert, and nothing in this
Section 9.7 shall be interpreted as a limitation on such assignment, transfer or
grant. Notwithstanding anything to the contrary in the foregoing, Auspex shall
not assign this Agreement to any Affiliate or Third Party unless Auspex also
assigns all Valid Claims to such Affiliate or Third Party.

9.8 Performance by Affiliates. Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates. Each Party hereby
guarantees the performance by its Affiliates of such Party’s obligations under
this Agreement, and shall cause its Affiliates to comply with the provisions of
this Agreement in connection with such performance. Any breach by a Party’s
Affiliate of any of such Party’s obligations under this Agreement shall be
deemed a breach by such Party, and the other Party may proceed directly against
such Party without any obligation to first proceed against such Party’s
Affiliate.

 

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9.9 Expenses. Each of the Parties will bear its own direct and indirect expenses
(including legal and accounting fees), if any, incurred in connection with the
negotiation and preparation of this Agreement and, except as set forth in this
Agreement, the performance of the obligations contemplated hereby and thereby.

9.10 No Strict Construction; Interpretation; Headings. 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 either Party by virtue of the
authorship of any provisions of this Agreement. The language in this Agreement
is to be construed in all cases according to its fair meaning. The definitions
of the terms herein apply equally to the singular and plural forms of the terms
defined. The headings of each Article and Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular Article or
Section.

9.11 Limitation of Liability. EXCEPT FOR DAMAGES AVAILABLE FOR BREACHES OF
CONFIDENTIALITY OBLIGATIONS UNDER SECTION 4 AND THE INDEMNIFICATION RIGHTS AND
OBLIGATIONS UNDER SECTION 6, NEITHER PARTY NOR ITS AFFILIATES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND REPRESENTATIVES WILL BE
LIABLE FOR, NOR WILL THE MEASURE OF DAMAGES INCLUDE ANY INCIDENTAL, SPECIAL,
CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO ITS
PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT, REGARDLESS OF THE BASIS
ON WHICH A PARTY IS ENTITLED TO CLAIM DAMAGES, WHETHER IN CONTRACT OR TORT
(INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT LIABILITY), EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.

9.12 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be an original and all of which shall constitute together
the same document. Copies of original signature pages sent by facsimile and/or
PDF shall have the same effect as signature pages containing original
signatures.

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement.

 

AUSPEX PHARMACEUTICALS, INC. CONCERT PHARMACEUTICALS, INC. /s/ Lawrence C. Fritz
/s/ Roger D. Tung By: By: Name: Lawrence C. Fritz Name: Roger D. Tung Title:
President & CEO Title: President & CEO

[Signature Page to Patent Assignment Agreement]

 

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EXHIBIT A

ASSIGNMENT OF PATENTS AND PATENT APPLICATIONS

WHEREAS, CONCERT PHARMACEUTICALS, INC., a Delaware corporation, with its
registered office at 99 Hayden Avenue, Suite 500, Lexington, MA 02421
(“Concert”) is the owner of certain inventions which are disclosed in the
patents, patent applications and/or provisional patent applications identified
on Schedule 1 attached hereto; and

WHEREAS, AUSPEX PHARMACEUTICALS, INC., a Delaware corporation with its
registered office at 3366 North Torrey Pines Court, Suite 225, La Jolla,
California, 92037 (“Auspex”) desires to acquire the entire, exclusive right,
title and interest in and to said inventions and any and all patents to be
obtained therefor.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Concert does hereby assign, sell and transfer
unto Auspex, its successors and assigns, the entire, exclusive right, title and
interest in and to said inventions, in any form or embodiment thereof, and in
and to said applications; and in and to any and all applications filed in any
country based thereon, including the right to file applications in countries
other than the country of priority filing under the provisions of any
international convention; also in and to any and all improvements on said
inventions now or hereafter made by employees, agents or contractors of Auspex;
also the entire, exclusive, right, title and interest in and to any and all
patents, including reissues and extensions thereof, to be obtained in any
country upon said inventions or improvements; and any and all continuing
applications, including divisional, continuation and continuation-in-part
applications, substitute applications, and applications claiming benefit of an
earlier filed provisional application, which may be filed upon said inventions
or improvements in any country; together with the right to sue and recover for,
and the right to profits or damages due or accrued arising out of or in
connection with, any and all past, present or future infringements of said
patent applications (and any patent(s) issuing thereon); and

Concert hereby authorizes and requests each issuing authority to issue any and
all patents on said applications to Auspex, as assignee of the entire interest.

 

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IN WITNESS WHEREOF, Concert by its duly authorized officer has executed this
assignment as an instrument under seal this              day of September 2011.

 

CONCERT PHARMACEUTICALS, INC. By:   Name:   Title:  

 

State of   ) ) ss. County of   )

On this              day of September 2011 before me personally appeared
                            , known to me to be the person who executed the
foregoing instrument and acknowledged that he/she executed the same as his/her
free act and deed; in testimony whereof I have hereto set my hand and official
seal on the day last above written.

 

  (seal )    Notary Public or Consular Officer        

My Commission expires                                                          

 

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Schedule 1

 

  1. U.S. Patent Application Serial Number 12/283,290

Title: “Deuterated Pirfenidone”

Filing Date: September 10, 2008

Publication Number: US20090131485

Publication Date: May 21, 2009