Exhibit 10.1

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

LICENSE AGREEMENT

This License Agreement (this “Agreement”), dated as of June __, 2018
(the “Effective Date”), is made by and between Aerpio Pharmaceuticals, Inc., a
Delaware corporation having business offices at 9987 Carver Road, Suite 420,
Cincinnati, OH 45254 (“Aerpio”), and GB004, Inc., a Delaware corporation having
business offices at 3013 Science Park Road, Suite 200, San Diego, CA 92121
(“Licensee”). Aerpio and Licensee are sometimes hereinafter referred to each as
a “Party” and collectively as the “Parties.”

WHEREAS, Aerpio has been engaged in the development of AKB-4924, a compound that
binds to HIF prolyl hydroxylase resulting in HIF stabilization, and controls
certain patent rights and know-how with respect thereto;

WHEREAS, Licensee desires to obtain exclusive rights under the Aerpio Patent
Rights and Aerpio Know-How in order to continue the development thereof and
products containing same; and

WHEREAS, the Parties desire to enter into an agreement pursuant to which Aerpio
will grant an exclusive license to Licensee under the Aerpio Patent Rights and
Aerpio Know-How for Licensee to develop, manufacture and commercialize the
Licensed Compound and Licensed Products for initially the indications of
induction and maintenance in ulcerative colitis and the induction and
maintenance in Crohn’s Disease, all on the terms set forth below.

NOW, THEREFORE, the Parties hereby agree as follows:

Section 1. Definitions.

For the purpose of this Agreement, the following terms and phrases (and
cognates) will have the meanings set forth below:

1.1    “Accounting Standards” means generally accepted accounting principles as
practiced in the United States or IFRS (International Financial Reporting
Standards), in each case, consistently applied.

1.2    “Aerpio In-License” means the Non-Exclusive License Agreement by and
between Aerpio and The Regents of the University of Colorado (the “UC Regents”),
dated November 1, 2016, as amended or restated from time to time. A copy of the
Aerpio In-License is attached hereto as Exhibit F.

1.3    “Aerpio Know-How” means all Know-How, existing as of the Effective Date
or disclosed by Aerpio to the Licensee during Term, Controlled by Aerpio or any
of its Affiliates, that is necessary or useful for the research, manufacture,
use, sale, offer for sale, importation, development or commercialization of the
Licensed Compound or any Licensed Products for use in the Territory in the
Field.

1.4    “Aerpio Patent Rights” means (a) the patents and patent applications
listed in Exhibit A attached hereto and any other patents, patent applications
and other patent rights, Controlled by Aerpio or any of its Affiliates, that
Cover any Aerpio Know-How, plus (i) all divisionals, continuations,
continuations-in-part thereof or any other patent rights claiming priority
directly or indirectly to any of the patents or patent applications identified
on Exhibit A, and (ii) all patents issuing on any of the foregoing, together
with all registrations, re-issues, re-examinations, renewals, supplemental
protection certificates and extensions of any of the foregoing, and all foreign
counterparts thereof (under this clause (a), collectively, the “Aerpio Core
Patent Rights”), (b) any other patents, patent applications and other patent
rights, existing as of the Effective Date, Controlled by Aerpio or any of its
Affiliates, that are necessary for the manufacture, use, sale, offer for sale or
importation of the Licensed Compound or Licensed Products for use in the
Territory in the Field.

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.5    “Affiliate” of a person or entity means any other person or entity which
(directly or indirectly) is controlled by, controls or is under common control
with such first person or entity. For the purposes of this definition, the
term “control” (including, with correlative meanings, the terms “controlled by”
and “under common control with”) as used with respect to any entity means (a) in
the case of a corporate entity, direct or indirect ownership of voting
securities entitled to cast at least fifty percent (50%) of the votes in the
election of directors or (b) in the case of a non-corporate entity, direct or
indirect ownership of at least fifty percent (50%), including ownership by
trusts with substantially the same beneficial interest, of the equity interests
with the power to direct the management and policies of such entity, provided
that if local law restricts foreign ownership, control will be established by
direct or indirect ownership of the maximum ownership percentage that may, under
such local law, be owned by foreign interests.

1.6    “Change of Control” means with respect to a Party, in one transaction or
a series of related transactions, the merger, consolidation, reorganization,
business combination, sale of all (or substantially all) of the capital stock
(or other equity interests) or assets, the change in voting control (that is,
when the equity or other security holders of such Party or Affiliate immediately
preceding such transaction(s) hold less than fifty percent (50%) of the
outstanding equity or other securities, or less than fifty percent (50%) of the
outstanding voting power, respectively, of the ultimate company or entity
resulting from such transaction(s) immediately after consummation thereof),
liquidation or dissolution, the license, sublicense, sale, assignment or other
transfer of all or substantially all of such Party’s business or assets to which
this Agreement relates, or any other form of acquisition or liquidity event for
such Party.

1.7    “Commercially Reasonable Efforts” means, with respect to the Licensed
Compound or any Licensed Product, that level of efforts and resources commonly
dedicated in the pharmaceutical industry by [***].

1.8    “Commercialization Budget” means the budget for conducting
commercialization of any Licensed Product for use in the Territory and in the
Field pursuant to the Commercialization Plan during a given calendar year and
[***].

1.9    “Commercialization Plan” means the plan setting forth the activities and
timelines relating to the commercialization (and related manufacturing) of any
Licensed Product for use in the Territory and in the Field during a given
calendar year and the[***], including the Commercialization Budget and annual
Net Sales forecasts for the Territory.

1.10    “Competitive Infringement” means any allegedly infringing activity with
respect to an Aerpio Core Patent Right, which activity (i) falls within the
scope then in effect of the license granted by Aerpio to Licensee in
Section 5.1(a) and (ii) is reasonably expected to reduce the Net Sales of any
Licensed Product then being commercialized.

1.11    “Confidential Information” means all non-public Know-How, marketing
plans, strategies and customer lists, and other non-public information or
material that are disclosed or provided by a Party or its Affiliates to the
other Party or its Affiliates, regardless of whether any of the foregoing are
marked “confidential” or “proprietary” or communicated to the other by the
disclosing Party or its Affiliates in oral, written, graphic, or electronic
form.

1.12    “Confidentiality Agreement” means that certain Bilateral Confidential
and Non-Disclosure Agreement, dated August 4, 2017, by and between Aerpio and
Licensee d/b/a FSG Bio Inc.

 

2

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.13    “Control” or “Controlled” means, with respect to any patent right,
Know-How, or other intellectual property right, the possession (whether by
ownership or license, other than by a license or sublicense granted pursuant to
this Agreement) by a Party or its Affiliates of the ability to grant to the
other Party a license or access as provided herein to such item, without
violating the terms of any agreement or other arrangement with any Third Party
or, except for the Aerpio In-License or any patents or patent applications or
other intellectual property Covering Aerpio Know-How, being obligated to pay any
royalties or other consideration therefor, in existence as of the time such
Party or its Affiliates would first be required hereunder to grant the other
Party such license or access.

1.14    “Cover”, “Covered” or “Covering” means, with respect to a particular
compound, product or service and a particular issued patent or patent
application, that, but for rights granted hereunder, the making, using,
importing, offering for sale or selling of such product or service would
infringe a Valid Claim in such patent (or patent application, as if such claim
has issued).

1.15    “Development Budget” means a budget for conducting development pursuant
to each Development Plan (a) during a given calendar year and [***] and (b) an
overall estimate of the budget required for obtaining a first Regulatory
Approval of a first Licensed Product for the Indication of such Development
Plan.

1.16    “Development Plan(s)” means, on an Indication-by-Indication basis, the
plan setting forth the activities and timelines relating to the development (and
related manufacturing) of the Licensed Compound and Licensed Products in all
countries of the Territory for such Indication. An initial draft of each
Development Plan for the each of the Initial Indications, as well as any other
Indications contemplated for use in the Territory as of the Effective Date, is
set forth on Exhibit B-1.

1.17    “EMA” means the European Medicines Agency and any successor agency
thereto.

1.18    “European Union” or “EU” means the countries of the European Economic
Area, as it is constituted on the Effective Date, and as it may be expanded from
time to time after the Effective Date.

1.19    “Executive Officers” means (a) for Aerpio, the Chief Executive Officer
(or a senior executive officer of Aerpio designated by the Chief Executive
Officer), and (b) for Licensee, the Chief Executive Officer of Licensee. In the
event that the position of any of the Executive Officers identified in this
Section 1.19 no longer exists due to a corporate reorganization, corporate
restructuring or the like that results in the elimination of the identified
position, the applicable Executive Officer will be replaced with another
executive officer with responsibilities and seniority comparable to the
eliminated Executive Officer.

1.20    “FD&C Act” means the United States Federal Food, Drug and Cosmetic Act,
as amended.

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

1.22    “Field” means all applications.

1.23    “First Commercial Sale” means, with respect to any Licensed Product in a
given country or region in the Territory, the first sale of such Licensed
Product in such country or region (whether or not any pricing or reimbursement
approvals or decisions have occurred); provided that sales for clinical studies
purposes or compassionate or similar use will not be considered to constitute a
First Commercial Sale. For clarity, First Commercial Sale will be determined on
a Licensed Product-by-Licensed Product and country-by-country (or
region-by-region) basis, as applicable.

 

3

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.24    “Generic Product” means, with respect to a particular Licensed Product
in a country, a generic pharmaceutical product that: (a) contains the same
active ingredient as the Licensed Compound in the same chemical form as in such
Licensed Product; and (b) is approved for use in such country by a Regulatory
Authority through an Abbreviated New Drug Application as defined in the FD&C
Act, pursuant to Article 10.1 of Directive 2001/83/EC of the European Parliament
and Council of 6 November 2001, or any enabling legislation thereof, or pursuant
to any similar abbreviated route of approval in any other countries in the
Territory; or (c) (i) contains the same active ingredient as the Licensed
Compound in such Licensed Product; and (ii) is approved for use in such country
by a Regulatory Authority through a regulatory pathway referencing clinical data
first submitted by Licensee or its Affiliates or Sublicensees for obtaining
Regulatory Approval for such Licensed Product.

1.25    “Governmental Authority” means any United States federal, state or local
or any foreign government, or political subdivision thereof, or any
multinational organization or authority or any authority, agency or commission
entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power, any court or tribunal (or any
department, bureau or division thereof), or any governmental arbitrator or
arbitral body.

1.26    “IND” means an Investigational New Drug application, clinical study
application, clinical trial exemption, or similar application or submission for
approval to conduct human clinical investigations filed with or submitted to a
Regulatory Authority in conformance with the requirements of such Regulatory
Authority.

1.27    “Indication” means an application for a label or label expansion
indicating the applicable drug for an initial, expanded or additional patient
population, or indicating the drug for use in combination with another treatment
or drug, in each case that requires a new Pivotal Clinical Trial for Regulatory
Approval for such label or label expansion. It is understood and agreed that,
notwithstanding anything herein to the contrary, each of the Initial Indications
will be treated as separate Indications hereunder for all purposes.

1.28    “Initial Indications” means each of the following Indications:
(i) induction and maintenance in ulcerative colitis (or similar Indication
solely related to inflammatory bowel disease (“IBD”)), (ii) induction and
maintenance in Crohn’s Disease (or similar Indication solely related to IBD),
and (iii) any other Indication for which a Development Plan is attached to this
Agreement as of the Effective Date.

1.29    “Know-How” means know-how, trade secrets, chemical and biological
materials, formulations, information, documents, studies, results, data and
regulatory approvals, data (including from clinical studies), filings and
correspondence, including biological, chemical, pharmacological, toxicological,
pre-clinical, clinical and assay data, manufacturing processes and data,
specifications, sourcing information, assays, and quality control and testing
procedures, whether or not patented or patentable.

1.30    “Law” means any federal, state, provincial, local, international or
multinational law, statute, standard, ordinance, code, rule, regulation,
resolution or promulgation, or any order, writ, judgment, injunction, decree,
stipulation, ruling, determination or award entered by or with any Governmental
Authority, or any license, franchise, permit or similar right granted under any
of the foregoing, or any similar provision having the force or effect of law.

1.31    “Licensed Compound” means the compound known as AKB-4924, as further
described on Exhibit C, and any solvates (including hydrates), salts, prodrugs,
metabolites, acid forms, base forms, polymorphs and crystalline forms thereof.

 

4

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

1.32    “Licensed Product” means any pharmaceutical product containing either
(a) the Licensed Compound or (b) any other compound that is an active
pharmaceutical ingredient whose composition of matter is Covered by the Aerpio
Core Patent Rights in each case ((a) and (b)), alone or with other active
ingredients, and in all forms, presentations, formulations and dosage forms.

1.33    “Licensee Patent Rights” means all patents, patent applications and
other patent rights, existing as of the Effective Date or arising during the
Term, owned or in-licensed by Licensee or any of its Affiliates as of the
Effective Date or during the Term, that have a Valid Claim directed to and
Covering [***].

1.34    “MAA” means (a) a marketing authorization application filed with (i) the
EMA under the centralized EMA filing procedure or (ii) a Regulatory Authority in
any country of the EU if the centralized EMA filing procedure is not used or
(b) any other equivalent or related regulatory submission, in either case to
gain approval to market a Licensed Product in any country in the European Union,
in each case including, for clarity, amendments thereto and supplemental
applications.

1.35    “Major European Country” means any of the United Kingdom, France,
Germany, Italy or Spain.

1.36    “NDA” means a New Drug Application filed with the FDA (including
amendments and supplements thereto) to obtain Regulatory Approval in the United
States, or any corresponding applications or submissions filed with the relevant
Regulatory Authorities to obtain Regulatory Approvals in any other country or
region in the Territory (including any MAA).

1.37    “Net Sales” means, with respect to any Licensed Product, the gross
amounts invoiced on sales of such Licensed Product by Licensee or any of its
Affiliates or Sublicensees to a Third Party, less the following customary
deductions, determined in accordance with the Accounting Standards, to the
extent specifically and solely allocated to the sale of such Licensed Product
and actually taken, paid, accrued, allowed, or included in the gross sales
prices with respect to such sales:

(a)    [***];

(b)    [***];

(c)    [***];

(d)    [***];

(e)    [***]; and

(f)    [***].

[***]

1.38    “Patent Challenge” means any challenge to the patentability, validity or
enforceability of any of the Aerpio Patent Rights (or any claim thereof),
including by: (a) filing or pursuing a declaratory judgment action in which any
of the Aerpio Patent Rights is alleged to be invalid or unenforceable;
(b) citing prior art against any of the Aerpio Patent Rights, filing a request
for or pursuing a re-examination of any of the Aerpio Patent Rights, or becoming
a party to or pursuing an interference; or (c) filing or pursuing any
re-examination, opposition, cancellation, nullity or other like proceedings
against any of the Aerpio Patent Rights. Notwithstanding the foregoing, any of
the following situations shall not be deemed to be a Patent Challenge: (i) any
proceeding involving any Aerpio Patent Rights where Licensee, an Affiliate or
Sublicensee has been compelled to participate in, or has been involuntarily
drawn into, the proceeding by a court, patent office or third party,
(ii) routine patent office prosecution where Licensee, an Affiliate or
Sublicensee is prosecuting its own patent rights, and (iii) any

 

5

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

situation where Aerpio or its Affiliates assert or file a patent infringement
action against Licensee, an Affiliate or Sublicensee under any Aerpio Patent
Right outside of the scope of the license grant set forth in Section 5.1(a).

1.39    “Phase 1 Clinical Trial” means a human clinical trial of a Licensed
Product that would satisfy the requirements of 21 C.F.R. § 312.21(a), or a
comparable clinical study prescribed by the relevant Regulatory Authority in a
country other than the United States.

1.40    “Phase 2 Clinical Trial” means a human clinical trial of a Licensed
Product that would satisfy the requirements of 21 C.F.R. § 312.21(b), or a
comparable clinical study prescribed by the relevant Regulatory Authority in a
country other than the United States.

1.41    “Phase 3 Clinical Trial” means a human clinical trial of a Licensed
Product that would satisfy the requirements of 21 C.F.R. § 312.21(c), or a
comparable clinical study prescribed by the relevant Regulatory Authority in a
country other than the United States.

1.42    “Pivotal Clinical Trial” means a human clinical trial of a Licensed
Product (a) intended to establish that such Licensed Product is safe and
effective for its intended use and (b) intended to be sufficient for filing for
a Regulatory Approval for such Licensed Product in patients having the disease
or condition being studied, solely as evidenced by the acceptance for filing for
a Regulatory Approval for such Licensed Product after completion of such
clinical trial. For clarity, a Pivotal Clinical Trial is often referred to as a
“label enabling” trial.

1.43    “Program Transaction” means a (a) Change of Control of Licensee or
(b) Subsidiary/Parent Sale, excluding in each case an initial public offering of
Licensee or its Affiliate, as applicable.

1.44    “Prosecute”, “Prosecution” or “Prosecuting” means with respect to any
patent rights, (a) to prepare and file patent applications, including
re-examinations or re-issues thereof, and represent applicants or assignees
before relevant patent offices or other relevant Governmental Authorities during
examination, re-examination and re-issue thereof, in appeal processes and
interferences, or any equivalent proceedings or any other prosecution
activities, (b) to defend all such applications against Third Party oppositions
or other challenges (other than any challenges in response to an enforcement
against any Competitive Infringement pursuant to Section 7.2 that are not
administered by any patent office or like Governmental Authority), (c) to secure
the grant of any patents arising from such patent application, (d) to maintain
in force any issued patent (including through payment of any relevant
maintenance fees), (e) obtain and maintain patent term extension or supplemental
protection certificates or their equivalents, and (f) to make all decisions with
regard to any of the foregoing activities.

1.45    “Regulatory Approval” means, with respect to a country or region in the
Territory, approvals, licenses, registrations or authorizations from the
relevant Regulatory Authority necessary in order to import, distribute, market
or sell a pharmaceutical product (including any Licensed Product) in such
country or region, but not including any pricing or reimbursement approvals or
decisions.

1.46    “Regulatory Authority” means the FDA, the EMA, and any other analogous
government regulatory authority or agency involved in granting approvals
(including any required pricing or reimbursement approvals) for the development,
manufacture or commercialization of any pharmaceutical product (including any
Licensed Product) in the Territory.

1.47    “Regulatory Filing” means any documentation comprising or relating to or
supporting any filing or application with any Regulatory Authority with respect
to any compound or product (including the Licensed Compound or any Licensed
Product), or its use or potential use in humans,

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

including any documents submitted to any Regulatory Authority and all supporting
data, including INDs and NDAs, and all correspondence with any Regulatory
Authority with respect to such compound or product (including minutes of any
meetings, telephone conferences or discussions with any Regulatory Authority).

1.48    “Royalty Patent Rights” means the Aerpio Patent Rights and the Licensee
Patent Rights.

1.49    “Sublicensee” means any Affiliate of Licensee or any Third Party in each
case that has been granted a sublicense (or an option or right of negotiation or
refusal for a sublicense) by Licensee under Section 5.1(a) and in accordance
with Section 5.2.

1.50    “Subsidiary/Parent Sale” means, with regard to [***] any direct or
indirect parent Affiliate of Licensee, any transaction, [***] that would
constitute a Change of Control [***].

1.51    “Transaction Payments” means all consideration in any form, including
merger consideration, equity or other securities purchase price, exercise price,
option purchase price, option fee, upfront, marketing, distribution, franchise,
milestone, royalties or license payments, profit shares, fees, bonuses or other
payments, paid (directly or indirectly) to, or for the benefit of, Licensee, its
Affiliates, or equity or other security holders (or former equity or other
security holders) of Licensee or any of its Affiliates from any Sublicensees or
other Third Parties solely with respect to any (a) grant of license or other
rights by Licensee or any of its Affiliates to the Licensed Compound or any
Licensed Product, including any distribution rights or any sublicense under any
of the Aerpio Patent Rights or Aerpio Know-How (other than by any Program
Transaction) or (b) Program Transaction, in each case provided that to the
extent that the consideration from any such transaction includes contingent
payments related to future events or release of escrowed amounts, such payments
and amounts shall be included as Transaction Payments only as and when such
payments and amounts are received (directly or indirectly) by or on behalf of
Licensee or its Affiliates or such equity or other security holders (or former
equity or other security holders). Not included in Transaction Payments shall be
any consideration attributable to the sale or transfer of physical assets,
leases or inventory, and with respect to clause (a) (but not clause (b)) above,
the following will not be treated as Transaction Payments: (i) payments to
reimburse Licensee for research or development activities or for patent
prosecution costs specific to any Licensed Product, and (ii) payments made for
debt or securities of Licensee up to fair market value (with any premium on debt
or securities included as “Transaction Payments” hereunder).

1.52    “Territory” means worldwide.

1.53    “Third Party” means any person or entity other than Licensee or Aerpio
or any of their respective Affiliates.

1.54    “Valid Claim” means (a) a claim of an issued and unexpired patent, which
claim has not been held invalid or unenforceable by a court or other government
agency of competent jurisdiction from which no appeal can be or has been taken
and has not been held or admitted to be invalid or unenforceable through
re-examination or disclaimer, opposition procedure, nullity suit or otherwise
and (b) a claim of any patent application that has been pending for fewer than
seven (7) years after the earliest priority date of such patent application.

The following additional defined terms have the meanings set forth in the
section indicated:

 

Defined Term

   Section

AAA

   Section 11.8(b)

Additional Third Party Licenses

   Section 6.3(d)

Aerpio

   Introductory Paragraph

 

7

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Defined Term

  

Section

Aerpio Core Patent Rights

   Section 1.4

Aerpio Indemnitees

   Section 9.5(a)

Affected Party

   Section 10.4

Agreement

   Introductory Paragraph

Alliance Manager

   Section 2.2(f)

Bankruptcy Event

   Section 10.4

Claim

   Section 9.5(c)

CREATE Act

   Section 7.1(e)

Disclosing Party

   Section 8.1(a)

Effective Date

   Introductory Paragraph

Hatch-Waxman Time Period

   Section 7.2(b)

Indemnitee

   Section 9.5(c)

Indemnitor

   Section 9.5(c)

Issuing Party

   Section 8.2(c)

JDC

   Section 2.2(a)

Licensee

   Introductory Paragraph

Licensee Indemnitees

   Section 9.5(b)

Losses

   Section 9.5(a)

Milestone Events

   Section 6.2

Milestone Payments

   Section 6.2

Party

   Introductory Paragraph

Receiving Party

   Section 8.1(a)

Release

   Section 8.2(c)

Reversion IP

   Section 10.6(d)

Reviewing Party

   Section 8.2(c)

Royalty Term

   Section 6.3(b)

SEC

   Section 1.6

Sublicense

   Section 5.2(b)

Term

   Section 10.1

20% Amount

   Section 6.4(a)

Working Group

   Section 2.2(a)

Section 2. Development.

2.1    General. The JDC’s overall responsibility shall be to encourage and
facilitate ongoing cooperation between the Parties with respect to the
development activities contemplated by this Agreement and to coordinate the
development of the Licensed Products for the Indications covered by each
Development Plan.

2.2    Joint Development Committee.

(a)    Formation; Purposes. Within thirty (30) days after the Effective Date,
Aerpio and Licensee will establish a joint development committee (the “JDC”)
composed of no more than three (3) representatives of each Party. The JDC will
have responsibility for (i) reviewing and overseeing the overall progress of
development and manufacturing activities under this Agreement with respect to
Licensed Products for use in the Territory and in the Field, including oversight
of the various budgets and activities, (ii) overseeing the implementation of all
development operational

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

aspects of the arrangements established by this Agreement, and (iii) forming
various working group(s) (each, a “Working Group”) to oversee particular
projects or activities from time to time and delegating to such Working Group(s)
such operational responsibilities as the JDC may determine necessary or
desirable. In conducting its activities, including in the allocation of
activities to the Parties under each Development Plan, the JDC will operate and
make its decisions consistent with the terms of this Agreement.

(b)    Membership. The JDC will be composed of an equal number of
representatives appointed by each of Aerpio and Licensee. Each Party will have
the right, but not be obligated, to appoint the same number of representatives
to the various Working Groups as are appointed by the other Party; however, each
Party will have collectively one vote, as set forth in Section 2.2(e)(i),
regardless of the number or representatives from each Party. The Parties may
from time to time change the size of the JDC. Each Party may replace JDC and any
Working Group representatives at any time upon written notice to the other
Party. The JDC and the various Working Groups will be co-chaired by one
designated representative of each Party. The co-chairpersons of each committee
and Working Group will not have any greater authority than any other
representative on the committee or Working Group. The co-chairperson of Licensee
will be responsible for: (a) calling meetings; (b) preparing and circulating an
agenda in advance of each meeting, provided that the co-chairperson will include
any agenda items proposed by either Party on such agenda; (c) ensuring that all
decision-making is carried out in accordance with the voting and dispute
resolution mechanisms set forth in this Agreement; and (d) preparing and issuing
minutes of each meeting within thirty (30) days thereafter. Each Party may
designate the same individual as a representative on more than one committee or
Working Group, and such individual may be an employee or consultant of such
Party or any of its Affiliates. Each Party will be responsible for all costs and
expenses incurred by it in participating in the JDC and any Working Groups.

(c)    Meetings of the JDC and Working Groups. The JDC will hold meetings at
such times as the JDC will determine, but in no event will such meetings of the
JDC be held less frequently than once every six (6) months during the Term for
so long as the JDC exists. Each Working Group will hold meetings at such times
as the Working Group agrees, or as the JDC directs. Each of the JDC and the
Working Groups may meet in person or by audio or video conference as the Parties
may mutually agree. Other representatives of the Parties, their Affiliates and
Third Parties involved in the development, manufacture or commercialization of
the Licensed Compound and Licensed Products may attend such meetings of the JDC
or Working Groups as nonvoting observers. The JDC and Working Groups may upon
agreement meet on an ad hoc basis between regularly scheduled meetings in order
to address and resolve time-sensitive issues within their purview that may arise
from time to time. No action taken at a meeting of the JDC or any Working Group
will be effective unless a representative of each Party is present or
participating. Neither Party will unreasonably withhold attendance of at least
one representative of such Party at any meeting of a committee or Working Group
for which reasonable advance notice was provided.

(d)    JDC Specific Responsibilities. The JDC will:

(i)    review and discuss the research and development activities for the
Licensed Compound and Licensed Products;

(ii)    review and discuss the implementation of each Development Plan and the
corresponding Development Budget;

(iii)    review and discuss each Development Plan, including the corresponding
Development Budget set forth therein, on an annual basis, including new
Development Plans and corresponding Development Budgets, and review and discuss
amendments and updates to each Development Plan and corresponding Development
Budget;

 

9

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(iv)    review and discuss non-clinical research or development of the Licensed
Compound and Licensed Products;

(v)    review and discuss clinical development of the Licensed Compound and
Licensed Product in all Indications subject of a Development Plan, including
clinical study design, clinical study endpoints, clinical methodology and
monitoring requirements; and

(vi)    perform such other functions as are assigned to it in this Agreement or
as are appropriate to further the purposes of this Agreement as agreed in
writing by the Parties.

(e)    JDC Decision-Making.

(i)    Other than as set forth herein, in order to make any decision required of
it hereunder with respect to any approval, the JDC must have present (in person,
by videoconference or telephonically) at least one member of each Party. The
Parties will endeavor to make decisions of the JDC by consensus.

(ii)    The JDC will attempt in good faith to resolve any disputes or failure to
agree by unanimous consent (with each Party having one vote). If the JDC cannot
resolve such dispute or failure to agree within thirty (30) days of the matter
being referred to it, such matter will be resolved pursuant to Section 11.8(a)
by referral directly to a senior executive of each Party designated by such
Party’s Executive Officer (but not Section 11.8(b)). If such matter is not
resolved pursuant to the dispute resolution process set forth in
Section 11.8(a), then Licensee will have the tie-breaking vote, provided that no
decision by Licensee may be in conflict with any of the terms of this Agreement
(including by amending or increasing any obligations on Aerpio or any of its
Affiliates or by granting any licenses or other rights to Licensee or any of its
Affiliates that, in each case, are not expressly set forth in this Agreement).

(iii)    Notwithstanding anything herein to the contrary, with respect to any
decision to be made by any of the JDC or the various Working Groups, each Party
will exercise its voting right (including Licensee’s tie-breaking vote of
Section 2.2(e)(ii)) in good faith and in a manner consistent with its
obligations under this Agreement, including Sections 2.4(a) and 3.1(a).

(iv)    Neither the JDC nor any Working Group will have the authority to amend
or modify this Agreement.

(f)    Alliance Managers. Each Party will designate a single alliance manager
for all of the activities contemplated under this Agreement (“Alliance
Manager”). Such Alliance Managers will be responsible for the day-to-day
worldwide coordination of the arrangements contemplated by this Agreement and
will serve to facilitate communication between the Parties. Such Alliance
Managers will have experience and knowledge appropriate for managers with such
project management responsibilities. Each Party may change its designated
Alliance Manager from time to time upon notice to the other Party.

(g)    Term. The JDC, and any Alliance Manager relationship described in
Section 2.2(f), will continue until the initial Regulatory Approval of the
initial Licensed Product in the United States or a Major European Country,
unless otherwise agreed by the Parties in writing, provided that Aerpio may, at
its sole discretion, elect to dissolve the JDC or the Alliance Manager at any
time.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(h)    Notwithstanding anything to the contrary herein, Licensee may, in its
sole discretion, dissolve the JDC or any Working Groups or Alliance Manager in
the event of a Change of Control of Aerpio.

2.3    Development Plan; Amendments; Development Responsibilities.

(a)    Development Plan. The global development of the Licensed Products,
including pre-clinical development activities, will be governed on an
Indication-by-Indication basis by a Development Plan, and Licensee agrees to
conduct (and to cause its Affiliates and Sublicensees to conduct) all of
Licensee’s development activities relating to the Licensed Products in
accordance with each Development Plan at Licensee’s sole cost and expense. The
terms of and activities set forth in each Development Plan will at all times be
designed to be in compliance with all applicable Law and to be conducted in
accordance with professional and ethical standards customary in the
pharmaceutical industry.

(b)    Development Budget. A Development Budget will be included in each
Development Plan.

(c)    Updating and Amending Each Development Plan.

(i)    The JDC will review each Development Plan and develop updates as
necessary. Upon the JDC’s preliminary approval, such updates will be submitted
to Licensee for its internal budgeting process with a target for final approval
by the JDC. No amendments to updates to any Development Plan (including the
corresponding Development Budget), nor any new Development Plan (with
corresponding Development Budget), will be effective without the approval of the
JDC.

(ii)    Exhibit B-2 sets for the Development Budgets for the initial Development
Plans set forth in Exhibit B-1, and those Development Budgets include a
high-level forecast of anticipated budget amounts and associated timelines for
the applicable development.

2.4    Development Efforts; Manner of Performance; Reports.

(a)    Development Efforts. Licensee will use Commercially Reasonable Efforts to
develop, and seek Regulatory Approval for, Licensed Products containing the
Licensed Compound [***]. All other development and commercialization efforts
with respect to the Licensed Compound and Licensed Products shall be at the
discretion of Licensee. Without limiting the generality of the foregoing,
Licensee will use Commercially Reasonable Efforts to perform, or cause others to
perform, each Development Plan as set forth therein (including in accordance
with the applicable Development Budget and timelines set forth therein).
Licensee will conduct, and will cause its Affiliates and Sublicensees to conduct
(as applicable), all research and development activities in good scientific
manner and in compliance with applicable Law, including Laws regarding
environmental, safety and industrial hygiene, and GLP, GCP, current standards
for pharmacovigilance practice, and all applicable requirements relating to the
protection of human subjects.

(b)    Responsibility; Cost and Expense. As between the Parties, Licensee will
be solely responsible, at its sole cost and expense, for all research and
development activities under this Agreement (including the performance of each
Development Plan), and all associated manufacturing.

(c)    Development Reports. In the event that Licensee has not received
Regulatory Approval for a Licensed Product in [***], Licensee will prepare and
maintain, and will cause each of its Affiliates and Sublicensees to prepare and
maintain (as applicable), reasonably complete and accurate records regarding the
development activities on the Licensed Compound or Licensed Products that have
been performed. Each calendar year, Licensee will provide to Aerpio a written

 

11

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

progress report that includes information of Licensee and its Affiliates and
Sublicensees regarding accrual, site initiation, progress on protocol writing,
meeting requests and briefing documents, in the case of clinical or regulatory
activities, and in other cases such information as is reasonably necessary to
convey a reasonably comprehensive understanding of the status of the applicable
research or development activity. In addition to the foregoing, Licensee will
immediately provide notice to Aerpio in the event that the development of the
Licensed Compound or any of the Licensed Products, or any Indications in
development, is suspended or terminated, or if any significant adverse events
have occurred, as defined by the applicable Regulatory Authority.

(d)    Aerpio Know-How Transfer and Technical Assistance.

(i)    Know-How Transfer. During the [***] period following the Effective Date,
Aerpio will endeavor to provide to Licensee all tangible embodiments of all
Aerpio Know-How in its possession and Control, including one (1) electronic copy
of all documents, data or other information in Aerpio’s Control to the extent
that such documents, data or other information describe or contain Aerpio
Know-How (including any clinical studies on the Licensed Compound).

(ii)    Technical Assistance. During the six (6) month period following the
Effective Date, Aerpio will reasonably cooperate with Licensee to provide (i) up
to two hundred fifty (250) hours of technical assistance without charge to
Licensee (with travel and accommodation expenses to be borne by Licensee) and
(ii) any additional hours of technical assistance as Licensee may reasonably
request, for which Licensee will pay Aerpio a rate of [***] for C-level
executives, [***] for VP-level employees and [***] for other employees, in each
case per hour of such technical assistance and reimburse Aerpio for all
out-of-pocket expenses incurred in providing such technical assistance under
this clause (ii), in each case to facilitate the transfer of development efforts
related to the Licensed Compound and Licensed Products. Such cooperation will
include providing Licensee with reasonable access by teleconference or in-person
at Aerpio’s facilities to Aerpio personnel involved in the development of the
Licensed Compound and Licensed Products to provide Licensee with a reasonable
level of technical assistance and consultation in connection with the transfer
of Aerpio Know-How.

(iii)    Aerpio agrees that, during the Term and subject to Section 8.4, any
Aerpio Know-How disclosed to or required to be disclosed to Licensee shall be
treated as Licensee Confidential Information hereunder (in addition to being
treated as Aerpio Confidential Information), but only to the extent any such
Aerpio Know-How relates solely to the Licensed Compound and is not excepted from
the confidentiality obligations pursuant to Section 8.1(b). Notwithstanding the
foregoing or anything else contained herein, Licensee may publish or otherwise
disclose Aerpio Know-How to the extent reasonably related to any Licensed
Compound or Licensed Products.

2.5    Regulatory Filings and Regulatory Approvals.

(a)    Responsibility; Cost and Expense. As between the Parties, Licensee will
solely be responsible, at its sole cost and expense, for seeking and attempting
to obtain all Regulatory Approvals for the Licensed Products for use in the
Territory and in the Field, including in accordance with each Development Plan.

(b)    Ownership of Regulatory Approvals. As between the Parties, Licensee will
own all Regulatory Filings and Regulatory Approval for the Licensed Products for
use in the Territory and in the Field filed by Licensee or any of its Affiliates
or Sublicensees.

(c)    Regulatory Cooperation. Licensee will provide, and will cause its
Affiliates and Sublicensees to provide (as applicable), Aerpio with advance
drafts of any material documents or other material correspondence pertaining to
Regulatory Approvals, including any proposed labeling, that is

 

12

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

planned to be submitted to any Regulatory Authority. Aerpio may provide comments
regarding such documents and other correspondence prior to their submission,
which comments Licensee and its Affiliates and Sublicensees will consider in
good faith. Licensee will provide, and will cause its Affiliates and
Sublicensees to provide (as applicable), Aerpio with copies of all material
submissions it makes to, and all material correspondence it receives from, a
Regulatory Authority pertaining to a Regulatory Approval. Notices, copies of
submissions and correspondence, and other materials to be given in advance as
provided in this Section 2.5(c) will be provided at least [***] in advance
unless circumstances necessitate a shorter time period, and in any event not
less than a reasonable time in advance under the circumstances. For clarity,
during the Term, Aerpio shall have no right to, and shall not, make any
regulatory filings related to the Licensed Compound or Licensed Products or
otherwise interact with any Regulatory Authorities with respect to the Licensed
Compound or Licensed Product, unless compelled or involuntarily required by Law.

Section 3. Commercialization.

3.1    Commercialization Efforts; Manner of Performance; Reports; Pricing;
Markings.

(a)    Commercialization Efforts. Licensee will use Commercially Reasonable
Efforts to commercialize Licensed Products for use in the Territory and in the
Field in those countries and for those Indications for which Regulatory Approval
(and, if applicable, pricing or reimbursement approval or decision) has been
obtained. Without limiting the generality of the foregoing, Licensee will use
Commercially Reasonable Efforts to execute and to perform, or cause to be
performed, the Commercialization Plan.

(b)    Responsibility; Cost and Expense. As between the Parties, Licensee will
be solely responsible, at its sole cost and expense, for all commercialization
activities under this Agreement (including under the Commercialization Plan),
and all associated manufacturing.

(c)    Commercialization Reports. Licensee will prepare and maintain and will
cause its Affiliates and Sublicensees to prepare and maintain (as applicable),
reasonably complete and accurate records regarding the commercialization
activities for Licensed Products. Each calendar quarter, Licensee will provide
to Aerpio a written progress report that describes commercialization activities
that Licensee and its Affiliates and Sublicensees has performed or caused to be
performed since the last progress report submitted.

(d)    Pricing and Reimbursement. As between the Parties, Licensee will be
responsible for and have the exclusive right to seek and obtain pricing and
reimbursement approvals for the Licensed Products for use in the Territory and
in the Field.

(e)    Commercialization Markings. All promotional materials, packaging and
product labeling for Licensed Products will contain to the extent not prohibited
by applicable Law, the corporate name of Aerpio (in a form and manner to be
provided by Aerpio), and further will indicate that the Licensed Product was
in-licensed from Aerpio.

3.2    Commercialization Plan and Budget.

(a)    Commercialization Plan. Licensee will develop a Commercialization Plan
that sets forth the commercialization activities to be undertaken with respect
to Licensed Products for use in the Territory and in the Field (which may set
forth commercialization activities for use in the Territory and in the Field on
a regional basis, rather than a country-by-country basis, defining the regions
in a manner consistent with Licensee’s internal procedures). Licensee will use
Commercially Reasonable Efforts to commercialize the Licensed Compound and
Licensed Products in accordance

 

13

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

with the Commercialization Plan and this Agreement. The Commercialization Plan
(including the Commercialization Budget) will be provided to Aerpio and will be
updated at least annually by Licensee. The terms of and activities set forth in
the Commercialization Plan will at all times be designed to be in compliance
with all applicable Law and to be conducted in accordance with professional and
ethical standards customary in the pharmaceutical industry.

(b)    Commercialization Budget. The Commercialization Budget will be included
in the Commercialization Plan and will be a written budget setting forth the
budgeted amounts for costs with respect to activities set forth in the
Commercialization Plan during the then-current calendar year and [***], broken
down by calendar quarter for the then current calendar year. The
Commercialization Budget also will include a breakout of costs by functional
area or category (and may set forth budgets for commercialization activities in
the Territory on a regional basis, rather than a country-by-country basis,
defining the regions in a manner consistent with Licensee’s internal
procedures).

Section 4. Manufacturing.

Licensee will be solely responsible, at its sole cost and expense, for
manufacturing and supplying the worldwide requirements for the research,
development and commercialization of the Licensed Compound and Licensed Products
for use in the Territory and in the Field. The manufacturing contracts of Aerpio
for the Licensed Compound or Licensed Products listed on Exhibit G hereto will
be assigned to Licensee within [***] of the Effective Date. Notwithstanding the
foregoing, upon request by Licensee within [***] of the Effective Date, Aerpio
shall sell to Licensee at Aerpio’s cost of goods plus delivery costs some or
substantially all quantities (as requested by Licensee) of the Licensed Compound
or Licensed Product in its possession.

Section 5. Licenses and Other Rights.

5.1    Exclusive License Grants.

(a)    Aerpio Patents and Aerpio Know-How. Subject to the terms and conditions
of this Agreement, Aerpio hereby grants to Licensee a non-transferable (except
in accordance with Section 11.1), exclusive (even as to Aerpio), royalty- and
milestone-bearing license, with the right to sublicense in accordance with
Section 5.2 only, under the Aerpio Patent Rights and Aerpio Know-How, to make,
have made, use, sell, offer to sell, import, develop, and commercialize the
Licensed Compound and the Licensed Products, for use in the Territory and in the
Field.

(b)    INDs. Subject to the terms and conditions of this Agreement, Aerpio
hereby grants to Licensee a non-transferable (except in accordance with
Section 11.1), exclusive (even as to Aerpio), royalty- and milestone-bearing
right of reference, with the right to grant further rights of reference only to
those person or entities that have been granted a sublicense by Licensee under
the license grant in Section 5.1(a) in compliance with Section 5.2, to the INDs
listed on Exhibit D, solely for the Licensed Compound and Licensed Products, for
use in the Territory and in the Field.

(c)    Aerpio In-License. Subject to the terms and conditions of this Agreement
and the Aerpio In-License, Aerpio hereby grants to Licensee and its Affiliates a
non-transferable (except in accordance with Section 11.1), royalty- and
milestone-bearing (solely as set forth in Section 6 of this Agreement)
sublicense, with no right to sublicense further, under the Licensed Patents (as
defined in the Aerpio In-License), of the non-exclusive rights under those
Licensed Patents granted to Aerpio under the Aerpio In-License, up to but not
more than the scope and term of the license granted by Aerpio to Licensee under
Section 5.1(a) (and in any event not more than what was granted to Aerpio under
the Aerpio In-License). At Licensee’s reasonable request, Aerpio will grant to
Licensee’s

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Sublicensees a sublicense under the Aerpio In-License equivalent to the grant
above, subject to this Section 5.1(c) and the remainder of this Agreement and
pursuant to a mutually agreeable written agreement, without any requirements for
further consideration or additional obligations. Subject to the terms and
conditions of this Agreement, the foregoing sublicense by Aerpio to Licensee
will be exclusive as to Aerpio but, for clarity, not the UC Regents per the
Aerpio In-License, and save for the continuing right to grant sublicenses in
accordance with the immediately preceding sentence. Any sublicense under the
Aerpio In-License is subject to the terms of this Agreement and the Aerpio
In-License (including Article 4 thereof), and further and without limitation,
Section 4.3 thereof (and the provisions of the Aerpio In-License identified
therein) are hereby incorporated by reference and made applicable to Licensee as
a sublicensee for the benefit of the UC Regents. It is understood and agreed
that Licensee and no other sublicensee of Aerpio under the Aerpio In-License
will be a third party beneficiary of the Aerpio In-License. For clarity, any
sub-license under Section 5.1(a) under the Aerpio In-License will be subject to
the terms and conditions of the Aerpio In-License and this Section 5.1(c).
Aerpio represents and warrants that Licensee will not be obligated to make any
payments to UC Regents under the Aerpio In-License. Aerpio shall be liable for
any and all payments that may become due to UC Regents under the Aerpio
In-License with respect to Licensee’s activities under this Agreement, including
any activities related to the development or commercialization of Licensed
Products.

(d)    Scope Clarification. The licenses and other rights granted in this
Section 5.1 and the remainder of this Agreement will not grant or create (by
implication, estoppel or otherwise) any license or right under any Aerpio Patent
Rights, Aerpio Know-How, INDs listed on Exhibit D, or under the Aerpio
In-License, to research, develop, manufacture or commercialize, make, use, sell,
offer to sell or import any molecule that is not a Licensed Compound or any
other molecule Covered by the Aerpio Patent Rights (including any other
therapeutically active molecule in any Licensed Product).

5.2    Sublicenses.

(a)    Licensee may grant sublicenses (or any option or right of negotiation or
refusal for a sublicense) of the license granted under Section 5.1(a) and the
rights granted under Section 5.1(b) only as follows:

(i)    to any Affiliate of Licensee as a Sublicensee hereunder, provided such
sublicense (or any option or right of negotiation or refusal for a sublicense)
only remains in effect for as long as such Sublicensee remains an Affiliate of
Licensee;

(ii)    to non-Affiliated Third Parties that are clinical research
organizations, contract manufacturers, contract laboratory organizations, and
other similar organizations that support the development and commercialization
of the Licensed Compound and Licensed Products on a fee-for-service basis as
Sublicensees hereunder, provided that such sublicenses (or options or rights of
negotiation or refusal for a sublicense) include obligations of confidentiality
and non-use of Aerpio Patent Rights, Aerpio Know-How and Confidential
Information of Aerpio substantially in accordance with the terms of this
Agreement; and

(iii)    to other non-Affiliated Third Parties as a Sublicensee hereunder,
provided that only one (1) such non-Affiliated Third Party may be a Sublicensee
at any given time in any given geographic area in the Territory.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(b)    Each sublicense (or any option or right of negotiation or refusal for a
sublicense) granted by a Licensee to a non-Affiliated Third Party pursuant to
this Section 5.2 is required to (i) be in writing; and (ii) be subject and
subordinate to, and consistent with, the terms and conditions of this Agreement.
Licensee will provide Aerpio with a copy of each agreement containing any such
sublicense (or any option or right of negotiation or refusal for a sublicense)
within thirty (30) days of execution. No sublicense (or any option or right of
negotiation or refusal for a sublicense) will diminish, reduce or eliminate any
obligation of Licensee under this Agreement, and Licensee will remain
responsible for its obligations under this Agreement and will be responsible for
the performance of the relevant Sublicensee as if such Sublicensee were
“Licensee” hereunder. Each sublicense (or any option or right of negotiation or
refusal for a sublicense) granted by Licensee to any rights licensed to it
hereunder will, at the option of Aerpio, either be (i) assigned to Aerpio or
(ii) terminate immediately upon the termination of the license under
Section 5.1(a) from Aerpio to Licensee.

5.3    License Limitations. Except as expressly set forth in this Agreement, no
licenses or other rights are granted or created hereunder to use any patent
right, Know-How or other intellectual property rights owned or in-licensed by
Aerpio or any of its Affiliates or licensors. All licenses and other rights are
or will be granted only as expressly provided in this Agreement, and no other
licenses or other rights is or will be created or granted hereunder by
implication, estoppel or otherwise.

5.4    Exclusivity.

(a)    During the Term, Aerpio will not (either alone or with any of its
Affiliates), directly or indirectly, develop, manufacture or commercialize, or
collaborate with, enable or otherwise authorize, license, sublicense, or
otherwise grant any right to any Third Party, to develop, manufacture or
commercialize, any compound that primarily binds to HIF prolyl hydroxylase
resulting in HIF stabilization anywhere in the Territory.

(b)    During the Term, Licensee will not (either alone or with any of its
Affiliates), directly or indirectly, [***], enable or otherwise authorize,
license, sublicense, or otherwise grant any right to any Third Party, to [***],
any compound (except for Licensed Compounds and any compound contained in
Licensed Products) that [***].

Section 6. Payment.

6.1    Initial License Fee. Licensee will pay to Aerpio within five (5) days
after the Effective Date a one-time payment in cash of twenty million U.S.
dollars ($20,000,000), which payment will be non-refundable and non-creditable
and not subject to set-off.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

6.2    Milestone Payments. As set forth in the following table, Licensee will
make the following payments in cash (the “Milestone Payments”) to Aerpio upon
achievement of each of the milestone events set forth in the tables below (the
“Milestone Events”) by Licensee or its Affiliates or Sublicensees. Each
Milestone Payment will be payable by Licensee to Aerpio within [***] after the
achievement of the corresponding Milestone Event with respect to the first
Licensed Product in each of the first and second Initial Indications. Such
payments will be non-refundable and non-creditable and not subject to set-off.

 

“Clinical Development Milestones”

“Milestone Event”

  

“Milestone Payment”

Initiation (i.e., first patient, first dosing) of first Phase 2 Clinical Trial
for the first Licensed Product for the first Initial Indication to achieve such
milestone    [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***]

[***]

   [***] For clarity, each Clinical Development Milestone payment is due only
once regardless of the number of Licensed Products developed by Licensee.

If the first [***] for the first Licensed Product for the first [***] in the
foregoing table is skipped [***], then the[***] for the first Licensed Product
for the [***] will be deemed to have been achieved upon the achievement of [***]
for the first Licensed Product [***].

 

“Commercial Milestones”

“Milestone Event”

  

“Milestone Payment”

First Commercial Sale in the United States following achievement of Regulatory
Approval by the FDA for the first Licensed Product for the first Initial
Indication to achieve such milestone    [***] First Commercial Sale in the
United States following achievement of Regulatory Approval by the FDA for the
first Licensed Product for the second Initial Indication to achieve such
milestone    [***] First Commercial Sale in a Major European Country following
achievement of Regulatory Approval by the EMA for the first Licensed Product for
the first Initial Indication to achieve such milestone    [***] First Commercial
Sale in a Major European Country following achievement of Regulatory Approval by
the EMA for the first Licensed Product for the second Initial Indication to
achieve such milestone    [***] First Commercial Sale in Japan following
achievement of Regulatory Approval in Japan for the first Licensed Product for
the first Initial Indication to achieve such milestone    [***] First Commercial
Sale in Japan following achievement of Regulatory Approval in Japan for the
first Licensed Product for the second Initial Indication to achieve such
milestone    [***] For clarity, each Commercial Milestone payment is due only
once regardless of the number of Licensed Products developed by Licensee.

 

17

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

“Sales Milestones”

“Milestone Event”

   “Milestone Payment” First achievement of [***] of annual Net Sales of all
Licensed Products in the Territory in a particular Calendar Year    [***] First
achievement of [***] of annual Net Sales of all Licensed Products in the
Territory in a particular Calendar Year    [***] First achievement of [***] of
annual Net Sales of all Licensed Products in the Territory in a particular
Calendar Year    [***] First achievement of [***] of annual Net Sales of all
Licensed Products in the Territory in a particular Calendar Year    [***] For
clarity, each Sales Milestone payment is due only once regardless of the number
of Licensed Products commercialized by Licensee or the number of times the Sales
Milestone is met.

6.3    Royalties.

(a)    Royalties. Licensee will pay to Aerpio running royalties in cash at the
graduated royalty rates specified in the following table with respect to the
aggregate annual worldwide Net Sales of all Licensed Products in a calendar
year:

 

Aggregate Annual Worldwide Net Sales of All

Licensed Products in a calendar year

   Royalty Rate Portion of cumulative Calendar Year Net Sales of Licensed
Products in the Territory up to and including [***]    [***] Portion of
cumulative Calendar Year Net Sales of Licensed Products in the Territory between
[***]    [***] Portion of cumulative Calendar Year Net Sales of Licensed
Products in the Territory between [***]    [***] Portion of cumulative Calendar
Year Net Sales of Licensed Products in the Territory exceeding [***]    [***]

The applicable royalty rate will be calculated as provided in this
Section 6.3(a) by reference to the aggregate annual worldwide Net Sales of all
Licensed Products. By way of example, [***].

 

18

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(b)    Royalty Term. The royalties due under Section 6.3(a) will be payable on
Net Sales from the First Commercial Sale of a particular Licensed Product until
the later of, on a country-by-country basis, (i) the date of expiration of the
last-to-expire Valid Claim of any Aerpio Patent Right (including any applicable
patent term extension) that Covers the manufacture, use, sale, offer for sale or
importation of such Licensed Product in such country, (ii) [***], or
(iii) fifteen (15) years from such First Commercial Sale of such Licensed
Product in such country (the “Royalty Term”).

(c)    Only One Royalty. Only one royalty will be due with respect to the sale
of the same unit of Licensed Product. Only one royalty will be due hereunder on
the sale of the same unit of Licensed Product even if more than one claim of the
Royalty Patent Rights Covers such Licensed Product.

(d)    Anti-Stacking. In the event that Licensee reasonably determines that it
is necessary for Licensee to obtain a license to any patent rights from a Third
Party to commercialize (including to make, have made, use, sell, offer for sale,
have sold or import any Licensed Product for such commercialization)
(“Additional Third Party Licenses”) and Licensee obtains such an Additional
Third Party License, then Licensee may deduct from the royalty payment that
would otherwise have been due to Aerpio, an amount equal to [***] of the
royalties actually paid to such Third Party under such Additional Third Party
Licenses by Licensee to commercialize (including to make, have made, use, sell,
offer for sale, have sold or import for such commercialization, as applicable)
such Licensed Product, provided that pursuant to this Section 6.3(d) the
royalties owed by Licensee to Aerpio for a particular Licensed Product shall not
be reduced to less than [***] of the amount otherwise owed.

(e)    Know-How Royalty. In countries in the Territory where a Licensed Product
is not Covered by a Valid Claim of a Royalty Patent Right (i.e., under clause
(i) of Section 6.3(b)), Licensee shall pay royalties on Net Sales of such
Licensed Products in such countries with respect to the Royalty Term at royalty
rates that shall be set at [***] of the applicable royalty rate determined
according to Section 6.3(a), mutatis mutandis.

(f)    Generic Competition. In the event that, on a Licensed Product-by-Licensed
Product and country-by-country basis, a Generic Product(s) is commercially
available with respect to such Licensed Product in such country and the combined
market share for such Generic Product(s) is [***].

(a)    Payment Floor. In no event will any credits, deductions or reductions
permitted to be taken under this Agreement against any particular royalty
payment owed to Aerpio under this Section 6.3 (including under Section 6.3(d) or
6.3(e) or 6.3(f)) act to reduce such payment by more than [***] (or by more than
[***] if the reduction set forth in Section 6.3(f) is then in effect) than would
otherwise be payable hereunder in absent of any such credits, deductions or
reductions. Further, save for the permitted reductions pursuant to
Section 6.3(d), 6.3(e), and 6.3(f), all royalties payable hereunder shall be
non-refundable and non-creditable and not subject to set-off.

6.4    Transaction Payments.

(a)    Within [***] before or after the signing of any transaction that will (or
could) give rise to any [***] payment in excess of [***] (a “Qualifying
Transaction”), Licensee will notify Aerpio of such Qualifying Transaction and
provide Aerpio under confidentiality with (i) documentation regarding the nature
and amount of any Transaction Payments, including any upfront payments,
(ii) Licensee’s good faith calculation of the amount and projected payment dates
of those Transaction Payments, (iii) a calculation of [***] of the Transaction
Payments (including the

 

19

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

projected payment dates), with the only reductions allowed from such [***] as
permitted by Sections 1.51 and 6.4(d), or for taxes pursuant to Section 6.5(e),
in each case if applicable (such [***] of those Transaction Payments,
the “[***]”), (iv) the expected date of the signing of such transaction, or if
the signing has already occurred, the expected closing of such transaction, and
(v) notification of whether Licensee is exercising its option pursuant to
Section 6.4(b).

(b)    For any Qualifying Transaction, Licensee shall have the option in its
sole discretion to pay Aerpio the greater of (1) [***] or (2) the [***] of any
upfront Transaction Payment, within [***] days after closing the Qualifying
Transaction (or such earlier or later date when such upfront Transaction Payment
is received (directly or indirectly) by or on behalf of Licensee, its
Affiliates, or equity or other security holders (or former equity or other
security holders) of Licensee or any of its Affiliates), and Aerpio will no
longer be paid any amounts under Sections 6.2 and 6.3 accruing after the
notification is provided to Aerpio pursuant to Section 6.4(a), subject to such
Qualifying Transaction closing and (i) Licensee providing to Aerpio all of the
final documentation regarding such transaction, (ii) Aerpio receiving all of the
[***] for such Qualifying Transaction (but subject to and based upon the last
sentence of this Section 6.4(b)), and (iii) if applicable, the Parties
compliance with Section 6.4(d). To the extent the actual upfront Transaction
Payment for such transaction is less than [***], the portion of such [***]
payment that is in excess of the [***] of such upfront Transaction Payment shall
be creditable against any future [***] payments arising from any future
Transaction Payments received (directly or indirectly) by or on behalf of
Licensee, its Affiliates, or equity or other security holders (or former equity
or other security holders) of Licensee or any of its Affiliates for such
Qualifying Transaction. In the event that License exercises its option under
this Section 6.4(b), Licensee is obligated to pay, and will pay, to Aerpio such
[***] for such Qualifying Transaction, but only as and within [***] of any
Transaction Payments for such Qualifying Transaction actually being received
(directly or indirectly) by or on behalf of Licensee or its Affiliates or such
equity or other security holders (or former equity or other security holders).

(c)    For any Qualifying Transaction for which Licensee does not exercise its
rights pursuant to Section 6.4(b), within [***] following the notification
pursuant to Section 6.4(a), Aerpio will have the option in its sole discretion
to elect by written notice to Licensee to be paid the [***], and upon making
such election, and provided that Aerpio is paid at least [***] of the [***] of
the upfront payment amount provided pursuant to clause 6.4(a)(i), then Aerpio’s
election will be irrevocable and Aerpio will no longer be paid any amounts under
Sections 6.2 and 6.3 accruing after the notification is provided to Aerpio
pursuant to Section 6.4(a), subject to such Qualifying Transaction closing and
(i) Licensee providing to Aerpio all of the final documentation regarding such
transaction and (ii) Aerpio receiving all of the [***] for such Qualifying
Transaction (but subject to and based upon the last sentence of this
Section 6.4(c)), and (iii) if applicable, the Parties compliance with
Section 6.4(d). In the event that Licensor exercises its option under this
Section 6.4(c) to receive the applicable[***], Licensee is obligated to pay, and
will pay, to Aerpio such [***] for such Qualifying Transaction, but only as and
within [***] of any Transaction Payments for such Qualifying Transaction
actually being received (directly or indirectly) by or on behalf of Licensee or
its Affiliates or such equity or other security holders (or former equity or
other security holders).

(d)    If Licensee is reasonably of the view that any transaction subject to
Section 6.4 includes consideration attributable to any physical assets, leases
or inventory, or pharmaceutical products or drug candidates in addition to
consideration attributable to the Licensed Compound and Licensed Products,
[***], the portion of the consideration reasonably attributable to the Licensed
Compound and Licensed Products that will be the amount of the Transaction
Payment that is subject to such [***] payment to Aerpio. If Licensee elects to
exercise its option in Section 6.4(b), [***] on the

 

20

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

portion of the consideration reasonably attributable to the Licensed Compound
and Licensed Products that will be the amount of the Transaction Payment that is
subject to such[***] payment to Aerpio [***]. If the parties cannot agree on the
[***].

(e)    Notwithstanding the foregoing in this Section 6.4, if the ultimate parent
Affiliate of Licensee undergoes a Change of Control (where the reference to
“Party” in such “Change of Control” definition refers to such parent entity),
Licensee may by written notice to Aerpio notify Aerpio that this Section 6.4
will not apply to such Change of Control, [***].

(f)    All such payments to Aerpio under this Section 6.4 will be [***]. For
clarity, Aerpio shall not be entitled to receive any [***] payments for any
transaction that is not a Qualifying Transaction.

6.5    Payment Terms.

(a)    Manner of Payment. All payments to be made by Licensee hereunder will be
made in United States dollars by wire transfer to such bank account as Aerpio
may designate.

(b)    Reports and Royalty Payments. Subsequent to the First Commercial Sale
anywhere in the Territory and for as long as royalties are due under
Section 6.3(a), Licensee will furnish to Aerpio a written report, within [***]
days after the end of each calendar quarter, showing the amount of Net Sales of
Licensed Products and royalty due for such calendar quarter. Royalty payments
for each calendar quarter will be due at the same time as such written report
for the calendar quarter. The report will include, at a minimum, the following
information for the applicable calendar quarter, each listed by product and by
country of sale: (i) Net Sales for such Licensed Products sold by Licensee,
Affiliates and Sublicensees; (ii) the royalties and Milestone Payments owed to
Aerpio, listed by category; and (iii) the computations for any applicable
currency conversions pursuant to Section 6.5(d). All such reports will be
treated as Confidential Information of Licensee.

(c)    Records and Audits. Licensee will keep, and will cause each of its
Affiliates and Sublicensees to keep (as applicable), adequate books and records
of accounting for the purpose of calculating all amounts due to Aerpio
hereunder. For [***] next following the end of the calendar year to which each
will pertain, such books and records of accounting (including those of
Licensee’s Affiliates and Sublicensees, as applicable) will be made available
for inspection at reasonable times and upon reasonable notice by an independent
certified accountant selected by Aerpio, and which is reasonably acceptable to
Licensee, for the sole purpose of inspecting the amounts due to Aerpio under
this Agreement. In no event will such inspections be conducted hereunder more
frequently than once every [***] or cover more than [***] prior to the date of
request for inspection. Such accountant must have executed and delivered to
Licensee and its Affiliates and Sublicensees, as applicable, a confidentiality
agreement as reasonably requested by Licensee, which will include provisions
limiting such accountant’s disclosure to Aerpio to only whether the royalty
reports are correct or incorrect and the amount of any discrepancy. The results
of such inspection, if any, will be binding on both Parties if not disputed
within [***] following receipt by the Parties of the inspection report. Any such
dispute over an inspection report shall be subject to the dispute resolution
procedure of Section 11.8, and no payment shall be required until the dispute is
resolved. If it is determined that Licensee underpaid, Licensee shall pay to
Aerpio such amount it was determined to have underpaid plus interest as provided
in Section 6.5(g) within thirty [***] of such determination. If it is determined
that Licensee overpaid, Aerpio shall pay to Licensee such amount it was
determined to have been overpaid within [***] days following such determination.
Any undisputed underpayments will be paid by Licensee within [***] days of
notification of the results of such inspection. Any undisputed overpayments will
be fully creditable against amounts payable in subsequent payment periods.
Aerpio will pay for such

 

21

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

inspections, except that in the event there is any upward adjustment in amounts
payable for any calendar year shown by such inspection of more than the greater
of (i) [***] and (ii) [***] of the amount paid, Licensee will reimburse Aerpio
for any reasonable out-of-pocket costs of such accountant. Any underpayments or
overpayments under this Section 6.5(c) will be subject to the currency exchange
provisions set forth in Section 6.5(d) as applied to the calendar quarter during
which the payment obligations giving rise to such underpayment or overpayment
were incurred by Licensee.

(d)    Currency Exchange. With respect to Net Sales invoiced in United States
dollars, the Net Sales and the amounts due to Aerpio hereunder will be expressed
in United States dollars. With respect to Net Sales invoiced in a currency other
than United States dollars, the Net Sales will be expressed in the domestic
currency of the entity making the sale, together with the United States dollars
equivalent, calculated using the official rate of exchange of such domestic
currency as quoted in the Wall Street Journal, New York edition, for the last
business day of the calendar quarter for which payment is made.

(e)    Taxes. Aerpio shall be liable for all income and other taxes (including
interest) imposed upon any payments made by Licensee to Aerpio under this
Section 6 or otherwise pursuant to this Agreement. Licensee may withhold from
payments due to Aerpio amounts for payment of any withholding tax that is
required by Law to be paid to any taxing authority with respect to such
payments. Licensee will provide Aerpio all relevant documents and
correspondence, and will also provide to Aerpio any other cooperation or
assistance on a reasonable basis as may be necessary to enable Aerpio to claim
exemption from such withholding taxes and to receive a refund of such
withholding tax or claim a foreign tax credit. Licensee will give proper
evidence from time to time as to the payment of any such tax. The Parties will
cooperate with each other in seeking deductions under any double taxation or
other similar treaty or agreement from time to time in force. Such cooperation
may include Licensee making payments from a single source in the U.S., where
possible.

(f)    Blocked Payments. In the event that, by reason of applicable Law in any
country, it becomes impossible or illegal for Licensee to transfer, or have
transferred on its behalf, payments owed Aerpio hereunder, Licensee will
promptly notify Aerpio of the conditions preventing such transfer and such
payments will be deposited in local currency in the relevant country to the
credit of Aerpio in a recognized banking institution designated by Aerpio or, if
none is designated by Aerpio within a period of thirty (30) days, in a
recognized banking institution selected by Licensee, as the case may be, and
identified in a written notice given to Aerpio.

(g)    Interest Due. Licensee will pay Aerpio interest on any payments that are
not paid on or before the date such payments are due under this Agreement at a
rate of [***] per month or the maximum applicable legal rate, if less,
calculated on the total number of days payment is delinquent.

6.6    Mutual Convenience. The royalty and other payment obligations set forth
hereunder have been agreed to by the Parties for the purpose of reflecting and
advancing their mutual convenience, including the ease of calculating and paying
royalties and other amounts to Aerpio. Licensee hereby stipulates to the
fairness and reasonableness of such royalty and other payments obligations and
covenants not to allege or assert (and to require its Affiliates not to allege
or assert) that any such royalty or other payments obligations are unenforceable
or illegal in any way, and to include such covenant in any sublicense agreement.

 

22

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Section 7. Patent Prosecution, Infringement and Extensions.

7.1    Prosecution and Maintenance.

(a)    By the Parties Jointly. Promptly after the Effective Date, Aerpio will
provide Licensee with copies of the prosecution files for all patents and patent
applications listed on Exhibit A. The Parties will cooperate in the Prosecution
of the Aerpio Core Patent Rights, and Licensee will have final decision making
authority for those Prosecution activities. Licensee will act as the lead party
and the party of record with each applicable Governmental Authority, and
Licensee will select counsel reasonably acceptable to Aerpio (such acceptance
not to be unreasonably withheld) in the Territory for those Prosecution
activities (which counsel, for clarity, will represent Licensee but not the
Parties jointly). Each Party will provide to the other Party copies of any
papers relating to the Prosecution of Aerpio Core Patent Rights promptly upon
receipt, or reasonably in advance of their filing, for the other Party to review
and comment thereon, and Licensee will consider any Aerpio’s comments in good
faith. Licensee and its counsel will prepare the first draft of all papers for
submission. Each Party (and its counsel) will have the right to review, and all
reasonable comments will be accepted on, those papers. Licensee will be solely
responsible for all costs and expenses incurred in connection with those
Prosecution activities. Aerpio will be responsible for any costs and expenses
incurred by or on behalf of Aerpio. In Prosecuting the Aerpio Core Patent
Rights, the Parties will endeavor to the extent practicable to maximize the
patent term and patent protection for the Licensed Compound and Licensed
Products.

(b)    By Aerpio. In no event will any of the Aerpio Core Patent Rights fail to
be filed or be permitted to lapse or be abandoned in any country, or no new
patent application be filed claiming priority to a patent application with the
Aerpio Core Patent Rights before such patent application’s issuance, or
extended, without Aerpio first being given an opportunity to assume full
responsibility for the continued Prosecution of such Aerpio Core Patent Rights,
unless such failure to file, lapse, abandonment or filing is jointly agreed upon
by the Parties. In the event that the Parties acting jointly cannot agree on
whether or not to file or continue the Prosecution of or extend a patent
application or patent within the Aerpio Core Patent Rights in any country at
least [***] prior to any filing deadline or pending lapse or abandonment
thereof, Aerpio will have the right, but not the obligation, to assume sole
responsibility for the Prosecution of such patent rights, with counsel of
Aerpio’s own choice, by delivery by Aerpio of written notice to Licensee of its
election to assume such sole responsibility. Upon Aerpio’s delivery of the
foregoing written notice, any such patent applications and patents will no
longer be considered “Aerpio Patent Right” hereunder and will be excluded from
the license granted to Licensee under Section 5.1. Aerpio will assume sole
responsibility for all costs and expenses arising from the Prosecution
activities of such patent applications and patents.

(c)    Patent Extensions; Orange Book Listings; Patent Certifications.

(i)    Patent Term Extension. If elections with respect to obtaining patent term
extension or supplemental protection certificates or their equivalents in any
country with respect to any Licensed Product becomes available, upon Regulatory
Approval or otherwise, the Parties will discuss in good faith which issued
patent to extend, and Licensee will have final decision making authority for
which issued patent to extend, provided that the only patent rights owned or
in-licensed by Aerpio or any of its Affiliates that may be extended by Licensee
by operation of this Agreement are those Aerpio Core Patent Rights that Cover
the applicable Licensed Product.

(ii)    Data Exclusivity and Orange Book Listings. With respect to data
exclusivity periods (such as those periods listed in the Orange Book (including
any available pediatric extensions) or periods under national implementations of
Article 10.1(a)(iii) of Directive 2001/EC/83, and all

 

23

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

equivalents in any country), Licensee, in consultation with Aerpio, will seek
and maintain all such data exclusivity periods that may be available for any of
the Licensed Products. The Parties will discuss in good faith which Aerpio
Patent Rights, if any, will be listed in the Orange Book or any similar patent
listing in any country with respect to the Licensed Products, and Licensee will
have final decision making authority for which patents will be listed.

(iii)    Notification of Patent Certification. Each Party will notify and
provide the other Party with copies of any allegations of alleged patent
invalidity, unenforceability or non-infringement of an Aerpio Patent Right
pursuant to a Paragraph IV Patent Certification by a Third Party filing an
Abbreviated New Drug Application, an application under §505(b)(2) of the FD&C
Act, or any other similar patent certification by a Third Party, and any foreign
equivalent thereof. Such notification and copies will be provided within
five (5) business days after a Party receives such certification, and will be
sent to the other Party’ address set forth in Section 11.7.

(d)    Cooperation. Each Party will reasonably cooperate with the other Party in
the Prosecution of the Aerpio Core Patent Rights. Such cooperation includes
promptly executing all documents, or requiring inventors, subcontractors,
employees and consultants and agents of such Party and its Affiliates, and for
Licensee, Sublicensees, to execute all documents, including declarations and
assignments, as reasonable and appropriate so as to enable the Prosecution of
any such Aerpio Core Patent Rights in any country.

(e)    CREATE Act. Notwithstanding anything to the contrary in this Agreement,
each Party will have the right to invoke the Cooperative Research and Technology
Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3) (the “CREATE Act”) when
exercising its rights under this Agreement, but only with the prior written
consent of the other Party. In the event that a Party intends to invoke the
CREATE Act, once agreed to by the other Party as required by the preceding
sentence, it will notify the other Party and the other Party will cooperate and
coordinate its activities with such Party with respect to any filings or other
activities in support thereof.

7.2    Enforcement.

(a)    By Licensee. In the event that Aerpio or Licensee becomes aware of any
actual or suspected Competitive Infringement of any Aerpio Core Patent Right
within the scope of the license grant in Section 5.1, such Party will notify the
other Party promptly, and following such notification, the Parties will confer.
Licensee will have the initial right, but will not be obligated, to bring an
infringement action with respect to such Competitive Infringement at its own
expense, in its own name and under its own direction and control, or settle any
such action or proceeding. Aerpio will reasonably assist Licensee in any action
or proceeding being prosecuted if so requested, and will be named in or join
such action or proceeding if requested by Licensee, and if so requested by
Licensee, Licensee will bear all of Aerpio’s related legal costs and expenses.
If Aerpio otherwise elects to be represented by its own legal counsel, Aerpio
will bear all of Aerpio’s related legal costs and expenses.

(b)    By Aerpio. If Licensee elects not to bring any action for a Competitive
Infringement described in Section 7.2(a) within [***] after the becoming aware
of such suspected Competitive Infringement, (and in all events at least [***]
before the end of the applicable Hatch-Waxman Time Period, as defined below),
then Aerpio may bring such action at its own expense, in its own name and under
its own direction and control, subject to the following: Licensee will
reasonably assist Aerpio in any action or proceeding being defended or
prosecuted if so requested, and will join such action or proceeding at its own
expense if requested by Aerpio. Licensee will have the right to participate in
any such action or proceeding with its own counsel at its own expense. For
purposes of this Agreement, “Hatch-Waxman Time Period” means the applicable
period of time during which a

 

24

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

patent holder or licensee has the right to file an infringement suit to maintain
certain rights and privileges upon receipt of Paragraph IV Patent Certification
by a Third Party filing an Abbreviated New Drug Application or an application
under § 505(b)(2) of the FD&C Act, or any other similar patent certification by
a Third Party, or any foreign equivalent thereof.

(c)    Withdrawal. If either Party brings an action or proceeding under this
Section 7.2 and subsequently ceases to pursue or withdraws from such action or
proceeding (other than by settlement), it will promptly notify the other Party
and the other Party may substitute itself for the withdrawing Party under the
terms of this Section 7.2.

(d)    Damages. In the event that either Party exercises the rights conferred in
this Section 7.2 and recovers any damages or other sums in such action or
proceeding or in settlement thereof, such damages or other sums recovered will
first be applied to all out-of-pocket costs and expenses incurred by the Parties
in connection therewith (including attorney’s fees), unless expressly not
reimbursable hereunder. If such recovery is insufficient to cover all such costs
and expenses of both Parties, the controlling Party’s costs will be paid in full
first before any of the other Party’s costs. If after such reimbursement any
funds will remain from such damages or other sums recovered, such funds will be
allocated as follows: (i) to the extent such recovery reflects lost profits
damages, Licensee will retain such lost profits recovery, less the amounts that
would otherwise be payable to Aerpio by treating such lost profits recovery as
“Net Sales” with respect to such Licensed Product; (ii) to the extent such
recovery reflects reasonable royalty damages or other payments and Licensee is
the controlling Party, [***]; and (iii) to the extent such recovery reflects
reasonable royalty damages or other recoveries and Aerpio is the controlling
Party, [***].

(e)    Settlement of Litigation. No settlement, consent judgment or other final
disposition of an action for infringement or validity or misappropriation may be
entered into as to any Aerpio Core Patent Rights without the prior written
consent of Licensee, which consent shall not be unreasonably withheld.

7.3    Patent Marking. Licensee will mark, and will cause all of its Affiliates
and Sublicensees to mark, Licensed Products with all Aerpio Patent Rights in
accordance with applicable Law, which marking obligation will continue for as
long as required under applicable Law.

Section 8. Confidential Information and Publicity.

8.1    Confidentiality.

(a)    Confidential Information. Except as expressly provided herein, each of
the Parties agrees that, for itself and its Affiliates, and during the Term and
for a period of ten (10) years thereafter, a Party and its Affiliates
(the “Receiving Party”) receiving Confidential Information of the other Party or
its Affiliates (the “Disclosing Party”) will (i) not disclose such Confidential
Information to any Third Party without the prior written consent of the
Disclosing Party, except for disclosures expressly permitted below, and (ii) not
use such Confidential Information for any purpose except those licensed or
otherwise authorized or permitted by this Agreement.

(b)    Exceptions. The obligations in Section 8.1(a) will not apply with respect
to any portion of the Confidential Information that the Receiving Party can show
by competent proof:

(i)    is publicly disclosed by the Disclosing Party, either before or after it
is disclosed to the Receiving Party hereunder;

(ii)    was known to the Receiving Party or any of its Affiliates, without any
obligation to keep it confidential or any restriction on its use, prior to
disclosure by the Disclosing Party;

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(iii)    is subsequently disclosed to the Receiving Party or any of its
Affiliates by a Third Party lawfully in possession thereof and without any
obligation to keep it confidential or any restriction on its use;

(iv)    is published by a Third Party or otherwise becomes publicly available or
enters the public domain, either before or after it is disclosed to the
Receiving Party; or

(v)    has been independently developed by employees or contractors of the
Receiving Party or any of its Affiliates without the aid, application or use of
Confidential Information of the Disclosing Party.

(c)    Authorized Disclosures. The Receiving Party may disclose Confidential
Information belonging to the Disclosing Party to the extent (and only to the
extent) such disclosure is reasonably necessary in the following instances:

(i)    subject to Section 8.2 (including the exceptions provided therein), by
either Party in order to comply with applicable Law (including any securities
Laws or regulation or rules of a securities exchange) or with a legal or
administrative proceeding;

(ii)    by either Party, in connection with prosecuting or defending litigation,
making regulatory filings, and Prosecuting Aerpio Core Patent Rights in
accordance with Section 7;

(iii)    by Licensee, to its Affiliates, potential and future Sublicensees,
permitted acquirers or assignees under Section 11.1, subcontractors, investment
bankers, investors, lenders, and each of Licensee’s and its Affiliates’
respective directors, employees, contractors and agents; and

(iv)    by Aerpio to its Affiliates, permitted acquirers or assignees under
Section 11.1, subcontractors, investment bankers, investors (including royalty
purchasers), lenders, and each of Aerpio’s and its Affiliates’ respective
directors, employees, contractors and agents,

provided that (A) with respect to Section 8.1(c)(i) or 8.1(c)(ii), where
reasonably possible, the Receiving Party will notify the Disclosing Party of the
Receiving Party’s intent to make any disclosure pursuant thereto sufficiently
prior to making such disclosure so as to allow the Disclosing Party adequate
time to take whatever action it may deem appropriate to protect the
confidentiality of the information to be disclosed, and (B) with respect to
Sections 8.1(c)(iii) and 8.1(c)(iv), each of those named people and entities
must be bound prior to disclosure by confidentiality and non-use restrictions at
least as restrictive as those contained in this Section 8 (other than investment
bankers, investors and lenders, who must be bound prior to disclosure by
commercially reasonable obligations of confidentiality). Further, with respect
to Section 8.1(c)(i), in the event either Party intends to make a disclosure
pursuant thereto, the other Party will have a reasonable time period to review
and comment on the proposed disclosure or filing that relates to this Agreement
(including the right to request redaction of material terms to the extent
permitted by any applicable Law), and the Party intending to make such
disclosure will consider in good faith any reasonable comments thereon provided
by the other Party.

8.2    Terms of this Agreement; Publicity.

(a)    Terms of this Agreement. The Parties agree that the terms of this
Agreement will be treated as Confidential Information of both Parties, and thus
may be disclosed only as permitted by this Section 8.

(b)    Restrictions. Except as otherwise contemplated by this Section 8, neither
Party to this Agreement will originate any publicity, news release or other
public announcement, written or oral, relating to this Agreement, the
transactions contemplated hereby or the terms hereof, or the existence of any
arrangement between the Parties, without the prior written consent of the other
Party, whether named in such publicity, news release or other public
announcement or not, except as required by applicable Law.

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(c)    Review. In the event either Party (the “Issuing Party”) desires to issue
any publicity, new release or other public announcement relating to this
Agreement or the transactions contemplated hereby or the terms hereof, the
Issuing Party will provide the other Party (the “Reviewing Party”) with a copy
of the proposed release, announcement or statement (the “Release”). The Issuing
Party will specify with each such Release, taking into account the urgency of
the matter being disclosed, a reasonable period of time within which the
Reviewing Party may provide any comments on such Release and if the Receiving
Party fails to provide any comments during the response period called for by the
Issuing Party, the Reviewing Party will be deemed to have consented to the
issuance of such Release; provided, however, that as it relates to the
disclosure of the results of any clinical trial conducted by Licensee or any
health or safety matter related to a Licensed Product, each Party acknowledges
that announcements may need to be made on extremely short notice, and although a
Party will endeavor to provide the other Party adequate time for such a review,
such Party will be free to make necessary public disclosures as promptly as it
deems necessary and appropriate. If the Reviewing Party provides any comments,
the Parties will consult on such Release and work in good faith to prepare a
mutually acceptable Release. If the Reviewing Party does not provide its
consent, not to be unreasonably withheld, to the issuance of the Release, the
Issuing Party will not issue the Release except as required by Law (including to
comply with any securities Laws or regulation or rules of a securities exchange)
or as otherwise expressly set forth herein. Each Party acknowledges and agrees
that the other Party may submit this Agreement to the SEC and if a Party does
submit this Agreement to the SEC, such Party agrees to consult with the other
Party with respect to the preparation and submission of, a confidential
treatment request for this Agreement. Licensee acknowledges that Aerpio is a
publicly traded company and, as such, is legally obligated to make timely
disclosures of all material events relating to its business, and will be
required to file this Agreement with the SEC. If a Party is required by Law to
make a disclosure of the terms of this Agreement in a filing with or other
submission to the SEC, and it is understood and agreed that Aerpio will need to
make such public filing with the SEC, (i) such Party has provided copies of the
disclosure to the other Party reasonably in advance to the extent practicable
under the circumstances, (ii) such Party has promptly notified the other Party
in writing of such requirement and any respective timing constraints, and
(iii) such Party has given the other Party a reasonable time under the
circumstances from the date of notice by such Party of the required disclosure
to comment upon, request confidential treatment or approve such disclosure, then
such Party will have the right to make such public disclosure at the time and in
the manner reasonably determined by its counsel to be required by Law.
Notwithstanding anything to the contrary herein, it is hereby understood and
agreed that if a Party seeking to make a disclosure to the SEC as set forth in
this Section 8.2, and the other Party provides comments within the respective
time periods or constraints specified herein or within the respective notice,
the Party seeking to make such disclosure or its counsel, as the case may be,
will in good faith (A) consider incorporating such comments and (B) use
reasonable efforts to incorporate such comments, limit disclosure or obtain
confidential treatment to the extent reasonably requested by the other Party.

(d)    Press Release Regarding Execution of the Agreement. The Parties agree to
issue the joint press release in Exhibit E promptly following the Effective
Date.

8.3    Relationship to the Confidentiality Agreement. This Agreement supersedes
the Confidentiality Agreement, provided that all “Confidential Information”
disclosed or received by the Parties thereunder will be deemed “Confidential
Information” hereunder and will be subject to the terms and conditions of this
Agreement.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

8.4    Publications. In order to protect its investment hereunder, Licensee may
elect to maintain the confidentiality of its Confidential Information, and may
request that Aerpio maintain the confidentiality of the Aerpio Know-How that
relates primarily to the Licensed Compound and Licensed Products, until
applications for patent rights have been filed with respect thereto.
Accordingly, Aerpio shall not, and shall cause each of its Affiliates not to,
make any publications or public disclosures regarding any Licensee Confidential
Information, or Aerpio Know-How that relates primarily to the Licensed Compound
or Licensed Products, without Licensee’s prior written consent, for, in the case
of Aerpio Know-How, up to [***] from Licensee first being notified of any such
proposed publication or public disclosure, and in all events subject to any
disclosure required by applicable Law.

8.5    Clinical Trials. For clarity, Licensee shall have the right to publish
the results or summaries of results of any clinical trials conducted with
respect to a Licensed Product in its sole discretion and without needing the
consent of Aerpio.

8.6    Remedies. Each Party shall be entitled to seek, in addition to any other
right or remedy it may have, at law or in equity, a temporary injunction,
without the posting of any bond or other security, enjoining or restraining the
other Party from any violation or threatened violation of this Section 8.

Section 9. Warranties; Limitations of Liability; Indemnification.

9.1    Aerpio Representations and Warranties. Except as set forth on Schedule
9.1, Aerpio represents and warrants to Licensee that as of the Effective Date:

(a)    Aerpio is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized, and it has full right and
authority to enter into this Agreement and to grant the licenses and other
rights to Licensee as herein described.

(b)    This Agreement has been duly authorized by all requisite corporate
action, and when executed and delivered will become a valid and binding contract
of Aerpio enforceable against Aerpio in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other Law
affecting creditors’ rights generally from time to time in effect, and to
general principles of equity.

(c)    The execution, delivery and performance of this Agreement does not
conflict with any other agreement, contract, instrument or understanding, oral
or written, to which Aerpio is a party, or by which it is bound, nor will it
violate any applicable Law.

(d)    All necessary consents, approvals and authorizations of all Governmental
Authorities and other persons or entities required to be obtained by Aerpio in
connection with the execution and delivery of this Agreement and the performance
of its obligations hereunder have been obtained.

(e)    There is no litigation, proceeding or investigation pending or threatened
against or involving Aerpio in any court or before any agency or regulatory body
which could adversely affect Aerpio’s ability or right to enter into this
Agreement.

(f)    Neither Aerpio, nor to the knowledge of Aerpio any of its employees,
independent contractors or consultants or agents or officers: (i) has ever been
debarred or is subject to debarment or convicted of a crime for which a person
could be debarred before a Regulatory Authority under applicable Laws, or
(ii) has ever been under indictment for a crime for which a person could be
debarred under such Laws.

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

(g)    Aerpio is the sole and exclusive owner of the entire right, title and
interest in and to the Aerpio Core Patent Rights and the Aerpio Know-How free
and clear of all liens and other encumbrances, security interests, options and
licenses.

(h)    Aerpio is the non-exclusive licensee of the Aerpio In-License, and holds
such license for such patent rights free and clear of all liens and other
encumbrances, security interests, options and licenses. The Aerpio In-License is
in full force and effect and neither Aerpio nor, to the knowledge of Aerpio, UC
Regents is in breach of the Aerpio In-License, and neither party to that
agreement has accused the other party of being in breach of Aerpio In-License.

(i)    The Aerpio Patent Rights and the Licensed Patents (as defined in the
In-License Agreement) constitute all the patents and patent applications owned
or Controlled by Aerpio that Cover (or could Cover upon issuance of the patent
application) the Licensed Compound.

(j)    Aerpio has the right to grant the licenses and rights in the Aerpio
Patent Rights and grant the sublicense in the Licensed Patents (as defined in
the In-License Agreement) it purports to grant to Licensee hereunder.

(k)    During the Term, Aerpio shall maintain the Aerpio In-License in good
standing and shall not take any action, or omit to take any action (including
making necessary payments), which would result in a breach or early termination
of the Aerpio In-License or any rights thereunder. Aerpio covenants that it
shall not amend, modify or supplement the terms of, or waive any rights under,
the Aerpio In-License that would adversely impact Licensee’s rights hereunder
without the prior written consent of Licensee, such consent not to be
unreasonably withheld, delayed or conditioned. Aerpio shall promptly notify
Licensee upon receipt by Aerpio of any notice from UC Regents of any actual or
alleged breach under the Aerpio In-License and Aerpio shall endeavor to cure any
such breach within the allotted cure period and if it is unwilling or unable to
do so, Aerpio shall timely notify Licensee and Licensee shall have the right to
cure such breach on Aerpio’s behalf.

(l)    There are no adverse actions, suits or claims pending or, to the
knowledge of Aerpio, threatened against Aerpio in any court or by or before any
governmental entity with respect to the Licensed Compound, the Aerpio Patent
Rights, or the Aerpio Know-How and, to the knowledge of Aerpio, there are no
Third Party patents that would reasonably be expected to give rise to such
actions, suits or claims. No Third Party has challenged the ownership,
inventorship, scope, duration, validity, enforceability, priority or right to
use the Licensed Compound, the Aerpio Patent Rights, or the Aerpio Know-How
(other than in connection with routine patent office prosecution), and, to the
knowledge of Aerpio, there is no basis for any such challenge.

(m)    Except for the matter with UC Regents that resulted in the Aerpio
In-License, Aerpio has not initiated or been involved in any proceedings or
claims in which it alleges that any Third Party is or was infringing or
misappropriating the Aerpio Patent Rights or Aerpio Know-How, nor have any
proceedings been threatened by Aerpio, nor, to the knowledge of Aerpio, is there
any basis for any such proceeding.

(n)    To the knowledge of Aerpio and notwithstanding 35 U.S.C. § 271(e) or any
comparable Laws, the research, development, manufacture, use or sale of the
Licensed Compound does not infringe or misappropriate any patent rights,
know-how rights, or other intellectual property rights of any Third Party.

(o)    Aerpio has provided to Licensee complete and accurate copies of each of
the manufacturing agreements listed on Exhibit G.

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

For purposes of this Agreement, “to the knowledge of Aerpio” (and like phrases)
will mean the actual knowledge as of the Effective Date of the individuals
listed on Schedule 9.1(a), with no duty of inquiry other than inquiry of
(i) Aerpio’s current officers, directors, employees, consultants and legal
counsel and (ii) the individuals listed on Schedule 9.1(b).

9.2    Licensee Representations and Warranties. Licensee represents and warrants
to Aerpio that as of the Effective Date:

(a)    Licensee is duly organized, validly existing and in good standing under
the laws of jurisdiction in which it is organized, and it has full right and
authority to enter into this Agreement and to accept the rights and licenses
granted as herein described.

(b)    This Agreement has been duly authorized by all requisite corporate
action, and when executed and delivered will become a valid and binding contract
of Licensee enforceable against Licensee in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and other Law
affecting creditors’ rights generally from time to time in effect, and to
general principles of equity.

(c)    The execution, delivery and performance of this Agreement does not
conflict with any other agreement, contract, instrument or understanding, oral
or written, to which Licensee is a party, or by which it is bound, nor will it
violate any applicable Law.

(d)    All necessary consents, approvals and authorizations of all Governmental
Authorities and other persons or entities required to be obtained by Licensee in
connection with the execution and delivery of this Agreement and the performance
of its obligations hereunder have been obtained.

9.3    Disclaimer. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER AERPIO NOR
LICENSEE MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED, WITH RESPECT TO ANY AERPIO PATENT RIGHTS, AERPIO KNOW-HOW, PATENT
RIGHTS LICENSED TO AERPIO UNDER THE AERPIO IN-LICENSE, INDs LISTED ON EXHIBIT D,
THE LICENSED COMPOUND, OR ANY LICENSED PRODUCTS, INCLUDING ANY WARRANTIES OF
VALIDITY OR ENFORCEABILITY OF ANY PATENTS, TITLE, QUALITY, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, PERFORMANCE OR NONINFRINGEMENT OF ANY THIRD
PARTY PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS.

9.4    Performance by Affiliates and Subcontractors. Each Party will have the
right to utilize the services of its Affiliates or Third Party subcontractors in
connection with the performance of the activities for which it is responsible
under the Development Plan or the Commercialization Plan; provided, however,
that such Party will remain responsible under this Agreement for the performance
and compliance of such Affiliates and Third Party subcontractors and will, if
required, grant sublicenses to them in compliance with the terms of this
Agreement. The Party utilizing such subcontractors also will ensure that such
Affiliate or Third Party is subject to obligations protecting and limiting use
and disclosure of Confidential Information, the Licensed Compound, Licensed
Products, patent rights and Know-How at least to the same extent as set forth
under this Agreement.

9.5    Indemnification.

(a)    Licensee Indemnity. Licensee hereby agrees to indemnify, defend and hold
Aerpio and its Affiliates, and their respective employees, directors, agents and
consultants, and their respective successors, heirs and assigns and
representatives (“Aerpio Indemnitees”) harmless from and

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

against all claims, liability, threatened claims, damages, expenses (including
reasonable attorneys’ fees), suits, proceedings, losses or judgments, whether
for money or equitable relief, of any kind, including but not limited to death,
personal injury, illness, product liability or property damage or the failure to
comply with applicable Law (collectively, “Losses”), arising from any Third
Party claim due to (i) the research, development, commercialization (including
promotion, advertising, offering for sale, sale or other disposition), transfer,
importation or exportation, manufacture, labeling, handling or storage, or use
of, or exposure to, the Licensed Compound or any Licensed Products by or for
Licensee or any of its Affiliates, Sublicensees, subcontractors, agents and
consultants; or (ii) Licensee’s (or its Affiliates’ and Sublicensees’) use or
practice of Aerpio Patent Rights and Aerpio Know-How; or (iii) any material
breach of any obligation, representation or warranty of Licensee hereunder; or
(iv) Licensee’s (or its Affiliates’ and Sublicensees’) gross negligence,
recklessness or willful misconduct, except, in each case, to the extent that
such Losses arise from (A) infringement or misappropriation of patent or other
intellectual property rights or know-how by any Aerpio Indemnitees, (B) the
gross negligence, recklessness or willful misconduct of any Aerpio Indemnitees,
or (C) any material breach of any obligation, representation or warranty of
Aerpio hereunder.

(b)    Aerpio Indemnity. Aerpio hereby agrees to indemnify, defend and hold
Licensee and its Affiliates, and their respective employees, directors, agents
and consultants, and their respective successors, heirs and assigns and
representatives (“Licensee Indemnitees”) harmless from and against all Losses
arising from any Third Party claim due to (i) the research, development,
transfer, importation or exportation, manufacture, labeling, handling or
storage, or use of, or exposure to, the Licensed Compound or any Licensed
Products by or for Aerpio or any of its Affiliates, Sublicensees,
subcontractors, agents and consultants before, during, or after the Term; or
(ii) Aerpio’s (or its Affiliates’ and Sublicensees’) use or practice of Aerpio
Patent Rights and Aerpio Know-How; or (iii) any material breach of any
obligation, representation or warranty of Aerpio hereunder; or (iv) Aerpio’s (or
its Affiliates’ and licensees’) gross negligence, recklessness or willful
misconduct, except, in each case, to the extent that such Losses arise from
(A) infringement or misappropriation of patent or other intellectual property
rights or know-how by any Licensee Indemnitees, (B) the gross negligence,
recklessness or willful misconduct of any Licensee Indemnitees, or (C) any
material breach of any obligation, representation or warranty of Licensee
hereunder.

(c)    Indemnification Procedure. A claim to which indemnification applies under
Section 9.5(a) or Section 9.5(b) will be referred to herein as a “Claim”. If any
person or entity (each, an “Indemnitee”) intends to claim indemnification under
this Section 9.5, the Indemnitee will notify the other Party (the “Indemnitor”)
in writing promptly upon becoming aware of any claim that may be a Claim (it
being understood and agreed, however, that the failure by an Indemnitee to give
such notice will not relieve the Indemnitor of its indemnification obligation
under this Agreement except and only to the extent that the Indemnitor is
actually prejudiced as a result of such failure to give notice). The Indemnitor
will have the right to assume and control the defense of such Claim at its own
expense 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. If the Indemnitor does not assume the defense of such Claim as
aforesaid, the Indemnitee may defend such Claim but will have no obligation to
do so. The Indemnitee will not settle or compromise any Claim without the prior
written consent of the Indemnitor, and the Indemnitor will not settle or
compromise any Claim in any manner which would have an adverse effect on the
Indemnitee’s interests, without the prior written consent of the Indemnitee,
which consent, in each case, will not be unreasonably withheld. The Indemnitee
will

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

reasonably cooperate with the Indemnitor at the Indemnitor’s expense and will
make available to the Indemnitor all pertinent information under the control of
the Indemnitee, which information will be subject to Section 8.

9.6    Insurance. Each Party shall maintain in full force and effect during the
Term and for a period of [***] after expiration or termination of this
Agreement, worker’s compensation and general liability insurance coverage all in
such amounts and with such scope of coverages as are customary in the industry
for companies of like size and activities, and, in addition, Licensee shall
maintain clinical trial liability and product liability insurance coverage in
amounts no less that: (a) clinical trials coverage in a minimum amount of [***]
combined single limit per occurrence and in the aggregate and (b) product
liability coverage, in a minimum amount of [***] combined single limit per
occurrence and in the aggregate. The policies of insurance required by this
Section 9.6 will be issued by an insurance carrier with an A.M. Best rating of
“A” or better. Licensee will name Aerpio as an additional insured under such
policies. Upon written request, each Party shall provide evidence of such
insurance to the other Party and ensure that the other Party will receive no
less than thirty (30) days’ notice of any cancelation, non-renewal or material
change in such coverage. The coverage limits set forth herein will not create
any limitation on Licensee’s liability to Aerpio under this Agreement.

9.7    Licensee Planned Structure. As of the Effective Date, Licensee does not
have any rights to any pharmaceutical products or drug candidates other than the
Licensed Compound and Licensed Products and is wholly owned by its ultimate
parent Affiliate, Gossamer Bio, Inc.

Section 10. Term, Termination and Survival.

10.1    Term. This Agreement will become effective as of the Effective Date and,
unless sooner terminated in accordance with the terms hereof or by mutual
written agreement of the Parties, will continue on a country-by-country and
Licensed Product-by-Licensed Product basis until the end of the period during
which royalties are due hereunder on Net Sales of such Licensed Product in such
country (the “Term”). Upon the end of such period for such Licensed Product in
such country, the license grant contained in Section 5.1(a) will become
perpetual, royalty-free and fully paid up with respect to such Licensed Product
in such country.

10.2    Termination for Safety or Efficacy. Notwithstanding anything contained
herein to the contrary, Licensee shall have the right to terminate this
Agreement at any time in its sole discretion in the event of potential safety or
efficacy concerns affecting the Licensed Compound or Licensed Product. Any
termination under this Section 10.2 shall be accomplished by Licensee giving
[***] advance written notice to Aerpio.

10.3    Termination for Material Default. Either Party will have the right to
terminate this Agreement upon delivery of written notice to the other Party in
the event of any material default in the performance by such other Party of any
of such other Party’s material obligations under this Agreement, provided that
such default has not been cured [***], or, in the event such default results in
a failure to make any material payment when due hereunder, [***], after written
notice thereof is given by the non-defaulting Party to the defaulting Party
specifying the nature of the alleged default.

10.4    Termination for Insolvency. To the extent permitted by Law, upon the
filing or institution of bankruptcy, reorganization, liquidation or receivership
proceedings, or upon an assignment of a substantial portion of the assets for
the benefit of creditors (a “Bankruptcy Event”) by either Party, Aerpio, in the
case of a Bankruptcy Event by Licensee, or Licensee, in the case of a Bankruptcy
Event by Aerpio, may terminate this Agreement; provided, however, that, in the
case of any involuntary bankruptcy proceeding, such right to terminate will only
become effective if the subject Party consents to the

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

involuntary bankruptcy or such proceeding is not dismissed within [***] after
the filing thereof. All rights and licenses granted under or pursuant to this
agreement are and shall otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any
other country or jurisdiction, licenses of right to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code and Licensee as licensee
under this Agreement and Aerpio will retain and may fully exercise all of their
rights and elections under the U.S. Bankruptcy Code and foreign equivalents,
including that upon commencement of a bankruptcy proceeding by or against such
Party undergoing a bankruptcy proceeding (the “Affected Party”) under the U.S.
Bankruptcy Code or foreign equivalents, the non-Affected Party will be entitled
to complete duplicates of or complete access to, as such non-Affected Party
deems appropriate, any Know-How and patent and other intellectual property
rights and all embodiments hereof licensed or to be transferred to such
non-Affected Party hereunder by the Affected Party. Such Know-How, rights and
embodiments will be promptly delivered to the non-Affected Party (a) upon any
such commencement of a bankruptcy proceeding and upon written request thereof by
the non-Affected Party, unless the Affected Party elects to continue to perform
all of its obligations under this Agreement, or (b) if not delivered under the
foregoing clause (a), upon the rejection of this Agreement by or on behalf of
the Affected Party upon written request therefore by the non-Affected Party.
This Section 10.4 is without prejudice to any rights the non-Affected Party may
have arising under the U.S. Bankruptcy Code, foreign equivalents or other Law.

10.5    Termination by Aerpio for Patent Challenge.

(a)    Aerpio will have the right to terminate this Agreement upon written
notice to Licensee in the event that Licensee or any of its Affiliates or
Sublicensees directly or indirectly asserts a Patent Challenge; provided that
with respect to any such Patent Challenge by any non-Affiliate Sublicensee,
Aerpio will not have the right to terminate this Agreement under this
Section 10.5 if Licensee (i) causes such Patent Challenge to be terminated or
dismissed or (ii) terminates such Sublicensee’s sublicense to the Aerpio Patent
Rights being challenged by the Sublicensee, in each case within [***] of
Aerpio’s notice to Licensee under this Section 10.5. In the event Licensee or
any of its Affiliates intends to assert a Patent Challenge in any forum, not
less than [***] prior to making any such assertion, Licensee will provide to
Aerpio a written disclosure of such assertion. Notwithstanding the foregoing,
Aerpio’s termination right under this Section 10.5 will not apply to any
Affiliate of Licensee that first becomes an Affiliate of Licensee after the
Effective Date, where such Affiliate of Licensee was undertaking activities in
connection with a Patent Challenge prior to such Affiliate first becoming an
Affiliate of Licensee; provided however that Licensee uses commercially
reasonable efforts to cause such Patent Challenge to terminate within [***] of
such Affiliate first becoming an Affiliate of Licensee.

(b)    In lieu of exercising its rights to terminate under this Section 10.5,
Aerpio may elect upon written notice [***], which election will be effective
retroactively to the date of the commencement of the Patent Challenge.

(c)    Licensee acknowledges and agrees that this Section 10.5 is reasonable,
valid and necessary for the adequate protection of Aerpio’s interest in and to
the Aerpio Patent Rights, and that Aerpio would not have granted to Licensee the
licenses under those Aerpio Patent Rights, without this Section 10.5. Aerpio
will have the right, at any time in its sole discretion, to strike this
Section 10.5 (or any portion thereof) from this Agreement, and Aerpio will have
no liability whatsoever as a result of the presence or absence of this
Section 10.5 (or any struck portion thereof).

 

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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

10.6    Effect of Termination.

(a)    If this Agreement terminates for any reason (other than expiration),
except as may otherwise be agreed in writing by the Parties, Licensee will be
responsible at its own expense for an orderly wind-down, in accordance with
accepted pharmaceutical industry norms and ethical practices, of any then
on-going clinical studies hereunder for which it has responsibility. Licensee
will consider in good faith any reasonable request from Aerpio that Licensee
continue, at Aerpio’s cost and expense, any ongoing clinical studies at the time
of termination, except if safety issues would put patients at risk. Aerpio
reserves the right to continue any ongoing clinical studies for any Licensed
Products at its own expense at such time as Licensee is no longer responsible
therefor.

(b)    If this Agreement terminates for any reason (other than expiration),
Licensee and its Affiliates and Sublicensees will have [***] thereafter in which
to dispose of any inventory of Licensed Compound or Licensed Product, subject to
the payment to Aerpio of any royalties or other amounts due hereunder thereon.

(c)    If this Agreement terminates for any reason (other than expiration), all
licenses and other rights granted by Aerpio to Licensee hereunder will
automatically terminate (including any sublicenses to Licensee or any
Sublicensees under the Aerpio In-License), and Licensee and its Affiliates and
Sublicensees will have no further rights to practice or reference any Aerpio
Patent Rights, Aerpio Know-How or INDs listed on Exhibit D (except as expressly
permitted by Sections 10.6(a) and 10.6(b)). Each Party will promptly return to
the other Party (or as directed by such other Party destroy and certify to such
other Party in writing as to such destruction) all of such other Party’s
Confidential Information that are in such Party’s (or its Affiliates’ or in the
case of Licensee’s Sublicensees’) possession or control, save that such Party
will have the right to retain (i) one (1) copy of intangible Confidential
Information of such other Party for legal purposes, and (ii) any of the
foregoing that such Party retains any license or other right hereunder. Licensee
and its Affiliates and Sublicensees will not continue to develop, manufacture or
commercialize the Licensed Compound or any Licensed Products.

(d)    If this Agreement is terminated by Licensee pursuant to Section 10.2 or
by Aerpio pursuant to Sections 10.3 or 10.4 or 10.5 (but solely with respect to
a Patent Challenge of Aerpio Core Patent Rights), [***]. Licensee will provide
to Aerpio, at [***] cost and expense, one (1) copy of the foregoing (including
all other documents necessary to [***] (including all completed and ongoing
clinical studies)) and all documents contained in or referenced in any such
items, [***].

(e)    If this Agreement is terminated by Licensee pursuant to Section 10.2 or
by Aerpio pursuant to Sections 10.3 or 10.4 or 10.5 (but solely with respect to
a Patent Challenge of Aerpio Core Patent Rights), [***].

(f)    If this Agreement terminates for any reason (other than expiration),
[***].

(g)    As compensation for the rights and licenses of Aerpio set forth in
Sections 10.6(d) and 10.6(e), if before termination of this Agreement by
Licensee pursuant to Section 10.2 or by Aerpio pursuant to Sections 10.3 or 10.4
or 10.5 (but solely with respect to a Patent Challenge of Aerpio Core Patent
Rights) [***].

10.7    Survival. In addition to the termination consequences set forth in
Section 10.6, the following provisions will survive expiration or termination of
this Agreement for any reason: Section 1, Section 5.3, Section 6 (but only with
respect to payments accrued before any such expiration or termination),
Section 8, Sections 9.3, 9.4, 9.5 and 9.6, Section 10 and Section 11. Expiration
or termination of this Agreement for any reason will not relieve the Parties of
any liability or obligation

 

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SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

which accrued hereunder prior to the effective date of such termination or
expiration, nor preclude either Party from pursuing all rights and remedies it
may have hereunder or at law or in equity, with respect to any breach of this
Agreement nor prejudice either Party’s right to obtain performance of any
obligation. All other rights and obligations will terminate upon termination or
expiration of this Agreement.

Section 11. General Provisions.

11.1    Assignment.

(a)    This Agreement may not be assigned by either Party, nor may either Party
delegate its obligations or otherwise transfer licenses or other rights created
by this Agreement, except as expressly permitted hereunder or otherwise without
the prior written consent of the other Party, which consent will not be
unreasonably withheld; provided that without consent (i) Licensee may assign
this Agreement in full to (x) an Affiliate of Licensee, provided that Licensee
will remain fully liable for the performance of its obligations under this
Agreement by such Affiliate, and further that such assignee Affiliate will
assign this Agreement in full back to Licensee at such time as such assignee
Affiliate is no longer an Affiliate of Licensee, or (y) its successor in
connection with a Change of Control of Licensee, and (ii) Aerpio may assign this
Agreement in full to (m) an Affiliate of Aerpio, provided that Aerpio will
remain fully liable for the performance of its obligations under this Agreement
by such Affiliate, and further that such assignee Affiliate will assign this
Agreement in full back to Aerpio at such time as such assignee Affiliate is no
longer an Affiliate of Aerpio, or (n) its successor in connection with a Change
of Control of Aerpio. Each Party will provide prompt written notice to the other
Party of any such permitted assignment.

(b)    Notwithstanding anything to the contrary in this Agreement, Aerpio may
sell, transfer, lend or assign its rights to any Third Party(ies) to receive
payments under Section 6, and Aerpio may disclose Confidential Information of
Licensee to one or more Third Parties in connection with any such assignment to
enable the Third Party(ies) to evaluate and monitor any such purchase or loan;
provided that Licensee shall only be obligated to send payments due hereunder to
not more than two entities.

(c)    Any permitted assignee will assume all assigned obligations of its
assignor under this Agreement. The terms and conditions of this Agreement will
inure to the benefit of, and be binding upon, the legal representatives,
successors and permitted assigns of the Parties.

11.2    Limited Right to Set-Off. Without limiting Licensee’s rights under law
or in equity, Licensee may exercise a right of set-off against any and all
amounts paid by Licensee pursuant to Section 9.1(k) to cure a breach of the
Aerpio In-License by Aerpio.

11.3    Change of Control of Aerpio. Notwithstanding anything to the contrary
herein: (a) no patent rights, Know-How or other intellectual property rights not
Controlled by Aerpio or any of its Affiliates before a Change of Control of
Aerpio will be deemed Controlled for purposes of this Agreement after such
Change of Control, provided that any patent right that claims priority, directly
or indirectly, to any other patent right first Controlled by Aerpio or any of
its Affiliates before such Change of Control will be deemed Controlled by Aerpio
thereafter no matter when such patent right is filed or issued, and (b) only
those assets (including those items described in clause (a) above) of Aerpio and
its Affiliates (before a Change of Control) that are in existence at the time of
Change of Control will be subject to Section 5.4.

11.4    Severability. If any one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby, unless the absence
of the

 

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

invalidated provision(s) adversely affects the rights of the Parties. The
Parties will in such an instance use their reasonable best efforts to replace
the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, implement the purposes of
this Agreement.

11.5    Cumulative Remedies. All rights and remedies of the Parties hereunder
will be cumulative and in addition to all other rights and remedies provided
hereunder or available by agreement, at Law or otherwise.

11.6    Amendment; Waiver. This Agreement may not be modified, amended or
rescinded, in whole or part, except by a written instrument signed by the
Parties; provided that any unilateral undertaking or waiver made by one Party in
favor of the other will be enforceable if undertaken in a writing signed by the
Party to be charged with the undertaking or waiver. No delay or omission by
either Party hereto in exercising any right or power occurring upon any
noncompliance or default by the other Party with respect to any of the terms of
this Agreement will impair any such right or power or be construed to be a
waiver thereof. A waiver by either of the Parties of any of the covenants,
conditions or agreements to be performed by the other will not be construed to
be a waiver of any succeeding breach thereof or of any other covenant, condition
or agreement herein contained.

11.7    Notices. All notices which are required or permitted hereunder shall be
in writing and sufficient if delivered personally, sent by facsimile (and
promptly confirmed by personal delivery, registered or certified mail or
overnight courier), sent by nationally-recognized overnight courier or sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:

 

If to Licensee, to:    GB004, Inc.       3013 Science Park Road       Suite 200
      San Diego, CA 92121       Attention: General Counsel    With a required
copy to:    Latham & Watkins LLP       12670 High Bluff Drive       San Diego,
CA 92130       Attn: Steven T. Chinowsky, Esq.       Facsimile: (858) 523-5450
      Email: steven.chinowsky@lw.com    If to Aerpio, to:    Aerpio
Pharmaceuticals, Inc.       9987 Carver Road, Suite 420       Cincinnati, OH
45242       Attention: CEO    With a required copy to:    Goodwin Procter LLP   
   100 Northern Avenue       Boston, MA 02210       Attention: Kingsley L. Taft,
Esq.   

or to such address as each Party may hereafter designate by notice to the other
Party. A notice will be deemed to have been given on the date it is received by
all required recipients for the noticed Party.

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

11.8    Dispute Resolution.

(a)    In the event of any dispute between the Parties under this Agreement, the
Parties will first attempt in good faith to resolve such dispute by negotiation
and consultation between themselves. In the event that such dispute is not
resolved on an informal basis within [***] days, either Party may, by written
notice to the other, have such dispute referred to a senior executive of each
Party designated by such Party’s Executive Officer, which senior executives will
meet in person if requested by either such senior executive and attempt in good
faith to resolve such dispute by negotiation and consultation for a [***] day
period following receipt of such written notice. If such senior executives do
not resolve such dispute within such [***] day period, either Party may refer
the matter to the Parties’ Executive Officers for attempted resolution,
whereupon the Parties’ Executive Officers will meet in person, if requested by
either such Executive Officer and attempt in good faith to resolve such dispute
by negotiation and consultation for a thirty (30) day period following such
referral.

(b)    Subject to Section 2.2(e)(ii), if the Executive Officers do not resolve
such dispute within such [***] day period, either Party may at any time
thereafter submit such dispute to be finally settled by arbitration administered
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) in effect at the time of submission. The arbitration will be
heard and determined by three (3) arbitrators. Licensee and Aerpio will each
appoint one (1) arbitrator and the third arbitrator will be selected by the two
(2) Party-appointed arbitrators, or, failing agreement within [***] days
following the date of receipt by the respondent of the claim, by the AAA. Such
arbitration will take place in New York, NY. The award shall be made within
[***] months of the filing of the notice of arbitration, and the arbitrator(s)
shall agree to comply with this schedule before accepting appointment. However,
this time limit may be extended by agreement of the Parties or by the
arbitrator(s) if necessary. The arbitration award so given will be a final and
binding determination of the dispute, and will be fully enforceable in any court
of competent jurisdiction. Costs of arbitration are to be divided by the Parties
in the following manner: Licensee will pay for the arbitrator it chooses, Aerpio
will pay for the arbitrator it chooses, and the costs of the third arbitrator
will be divided equally between the Parties. Except in a proceeding to enforce
the results of the arbitration or as otherwise required by Law, neither Party
nor any arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of both Parties.
Notwithstanding this Section 11.8(b), any dispute between the Parties under this
Agreement regarding the scope, validity, enforceability of infringement of any
patent rights will subject to Section 11.8(a) and thereafter not this
Section 11.8(b) but rather any court or other forum.

(c)    Notwithstanding the dispute resolution procedures set forth in this
Section 11.8, in the event of an actual or threatened breach hereunder, the
aggrieved Party may seek equitable relief (including restraining orders,
specific performance or other injunctive relief) in any court or other forum,
without first submitting to any dispute resolution procedures hereunder.

(d)    Notwithstanding the provisions of this Section 11.8, disputes relating to
intellectual property rights, including disputes relating to the ownership,
inventorship, enforceability, validity or scope of patent or other intellectual
property rights, or other disputes for which a Party wishes to seek injunctive
or other equitable relief, but not any disputes under Section 6.4, shall not be
subject to the terms of this Section 11.8 and may be submitted for resolution to
a court of competent jurisdiction, and without the necessity of posting a bond
for such disputes seeking injunctive or other equitable relief (each, an
“Excluded Claim”). The Parties agree that any dispute concerning an Excluded
Claim that cannot be resolved by the Parties will be subject to the exclusive
jurisdiction of the U.S. federal or New York state courts within the New York
counties of New York, and the Parties

 

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

hereby submit to, and waive any objection to, personal jurisdiction and venue in
such courts for such purpose, and both Parties waive any right they may have
under applicable law or otherwise to a right to a trial by jury for such
purpose.

11.9    Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflicts of law provisions; provided that any dispute relating to the scope,
validity, enforceability or infringement of any patent rights will be governed
by, and construed and enforced in accordance with, the substantive laws of the
jurisdiction from which such patent rights arose.

11.10    Relationship of the Parties. Each Party is an independent contractor
under this Agreement. Nothing contained herein is intended or is to be construed
so as to constitute Aerpio and Licensee as partners, agents or joint venturers.
Neither Party will have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other Party or to bind
the other Party to any contract, agreement or undertaking with any Third Party.
There are no express or implied third party beneficiaries hereunder (except for
Licensee Indemnitees other than Licensee and Aerpio Indemnitees other than
Aerpio for purposes of Sections 9.5(a) or 9.5(b), as applicable).

11.11    Entire Agreement. This Agreement (along with the Exhibits) contains the
entire understanding of the Parties with respect to the subject matter hereof
and supersedes and replaces any and all previous arrangements and
understandings, including the Confidentiality Agreement, whether oral or
written, between the Parties with respect to the subject matter hereof.

11.12    Headings. The captions to the several Sections hereof are not a part of
this Agreement, but are merely guides or labels to assist in locating and
reading the several Sections hereof.

11.13    Waiver of Rule of Construction. Each Party has had the opportunity to
consult with counsel in connection with the review, drafting and negotiation of
this Agreement. Accordingly, the rule of construction that any ambiguity in this
Agreement will be construed against the drafting Party will not apply.

11.14    Interpretation. Whenever any provision of this Agreement uses the term
“including” (or “includes”), such term will be deemed to mean “including without
limitation” (or “includes without limitations”). “Herein,” “hereby,”
“hereunder,” “hereof” and other equivalent words refer to this Agreement as an
entirety and not solely to the particular portion of this Agreement in which any
such word is used. The term “or” means “and/or” hereunder. All definitions set
forth herein will be deemed applicable whether the words defined are used herein
in the singular or the plural. Unless otherwise provided, all references to
Sections and Exhibits in this Agreement are to Sections and Exhibits of this
Agreement. References to any Sections include Sections and subsections that are
part of the related Section (e.g., a section numbered “Section 5.2” would be
part of “Section 5”, and references to “Section 5.2” would also refer to
material contained in the subsection described as “Section 5.2(a)”).

11.15    Counterparts; Facsimiles or PDF. This Agreement may be executed in one
(1) or more counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument. Facsimile or PDF
execution and delivery of this Agreement by either Party will constitute a
legal, valid and binding execution and delivery of this Agreement by such Party.

[Remainder of this Page Intentionally Left Blank]

 

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

IN WITNESS WHEREOF, the Parties have caused this License Agreement to be
executed by their respective duly authorized representatives as of the Effective
Date.

 

AERPIO PHARMACEUTICALS, INC. By:  

/s/ Stephen Hoffman

  (Signature) Name:   Stephen Hoffman Title:   Chief Executive Officer GB004,
INC. By:  

/s/ Christian Waage

  (Signature) Name:   Christian Waage Title:   Treasurer & Secretary

 

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT A

AERPIO PATENT RIGHTS

 

Country

   Application
Number   Filing Date   Patent Number

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]  

[***]

   [***]   [***]  

[***]

   [***]   [***]  

[***]

   [***]   [***]   [***]

 

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SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]  

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

[***]

   [***]   [***]   [***]

 

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TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

[***]

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT B-1

INITIAL DEVELOPMENT PLANS

[***]

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT B-2

INITIAL DEVELOPMENT BUDGETS

[***]

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT C

LICENSED COMPOUND

AKB-4924

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT D

LICENSED COMPOUND INDs

Canada

 

  •   [***]

United States

 

  •   [***]

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT E

PRESS RELEASE

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

EXHIBIT F

AERPIO IN-LICENSE

 

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

LICENSE AGREEMENT

EXHIBIT G

ASSIGNED MANUFACTURING AGREEMENTS

 

  •   [***]

 

  •   [***]

 

  •   [***]

 

  •   [***]

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

LICENSE AGREEMENT

SCHEDULE 9.1(a)

For purposes of the last paragraph of Section 9.1:

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SCHEDULE 9.1(b)

For purposes of the last paragraph of Section 9.1:

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