Exhibit 10.13

Executed

FOIA CONFIDENTIAL TREATMENT REQUESTED

Confidential Materials omitted and filed separate with the Securities and
Exchange Commission

Triple asterisks denote omissions

LICENSE AGREEMENT

by and between

KINEX PHARMACEUTICALS, LLC

and

GUANGZHOU XIANGXUE NEW DRUG DISCOVERY AND DEVELOPMENT

COMPANY LIMITED

May 6th, 2012

 

 

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confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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FOIA CONFIDENTIAL TREATMENT REQUESTED

Confidential Materials omitted and filed separate with the Securities and
Exchange Commission

Triple asterisks denote omissions

TABLE OF CONTENTS

 

 

 

 

 

 

 

  

Page

 

Article 1 DEFINITIONS

  

 

1

  

 

 

Article 2 CONDITIONS PRECEDENT

  

 

6

  

 

 

Article 3 GRANT OF RIGHTS

  

 

6

  

 

 

Article 4 INFORMATION TRANSFER; DEVELOPMENT AND COMMERCIALIZATION; REGULATORY
MATTERS

  

 

7

  

 

 

Article 5 PAYMENTS AND STATEMENTS

  

 

10

  

 

 

Article 6 REPRESENTATIONS AND WARRANTIES

  

 

13

  

 

 

Article 7 PATENT MATTERS

  

 

14

  

 

 

Article 8 CONFIDENTIALITY AND PUBLICITY

  

 

17

  

 

 

Article 9 TERM AND TERMINATION

  

 

18

  

 

 

Article 10 INDEMNIFICATION AND INSURANCE

  

 

20

  

 

 

Article 11 MISCELLANEOUS

  

 

22

  

 

 

 

 

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THIS LICENSE AGREEMENT (this “Agreement”) is made as of May 6th, 2012, by and
between KINEX PHARMACEUTICALS, LLC, a limited liability company organized and
existing under the laws of the State of Delaware USA and having its principal
office at 701 Ellicott Street, Buffalo, New York 14203, USA (“Kinex”) and
GUANGZHOU XIANGXUE NEW DRUG DISCOVERY AND DEVELOPMENT COMPANY LIMITED, a Chinese
company existing under the laws of China and having its principal office at 2
Jinfengyuan Road, Guangzhou, CHINA 510663 (“XPH”).

B A C K G R O U N D:

Kinex owns or Controls the Kinex Intellectual Property of 10(02 (also known as
KX2-361) and is developing the Compound for oncology and other indications;

XPH and its Affiliates have experience in the development, marketing, promotion
and sale of pharmaceutical products predominately in China; and XPH desires to
obtain the exclusive right and license in the Territory to further develop and
thereafter commercialize a Licensed Compound and its product for oncology
indications in the Field; and

Kinex desires to grant to XPH such exclusive right and license in the Territory,
all on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual representations, warranties and
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

ARTICLE 1

DEFINITIONS

Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:

1.1 “Act” means the United States Food, Drug, and Cosmetic Act of 1938, as
amended, and the rules and regulations promulgated thereunder, or any successor
act, as the same shall be in effect from time to time.

1.2 “Affiliate” means with respect to a Party (a) any corporation or business
entity of which more than fifty percent (50%) of the securities or other
ownership interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or indirectly, by a
Party; (b) any corporation or business entity which, directly or indirectly,
owns, controls or holds more than fifty percent (50%) (or the maximum ownership
interest permitted by law) of the securities or other ownership interests
representing the equity, voting stock or general partnership interest of a
Party; (c) any corporation or business entity of which, directly or indirectly,
an entity described in the immediately preceding subsection (b) controls or
holds more than fifty percent (50%) (or the maximum ownership interest permitted
by law) of the securities or other ownership interests representing the equity,
voting stock or general partnership interest of such corporation or entity; or
(d) any corporation or business entity of which a Party has the right to
acquire, directly or indirectly, more than fifty percent (50%) of the securities
or other ownership interests representing the equity, voting stock or general
partnership interest thereof

1.3 “Agreement Term” has the meaning set forth in Section 9.1(a).

1.4 “Breaching Party” has the meaning set forth in Section 9.2(b).

1.5 “Business Day” means any calendar day, except that if an activity to be
performed or an event to occur falls on a Saturday, Sunday or a day which is
recognized as a national holiday in the place of performance of an applicable
activity or occurrence of an applicable event, then the activity may be
performed or the event may occur on the next day that is not a Saturday, Sunday
or nationally recognized holiday.

1.6 “Calendar Quarter” means for each Calendar Year, each of the three (3) month
periods ending on March 31, June 30, September 30 and December 31; provided,
however, that (i) the first Calendar Quarter of any period specified under this
Agreement shall extend from the commencement of such period to the end of the
first complete Calendar Quarter thereafter; and (ii) the last Calendar Quarter
shall end upon the expiration or termination of this Agreement.

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1.7 “Calendar Year” means, for the first Calendar Year, the period commencing on
the Effective Date and ending on December 31, 2012, and for each year
thereafter, each successive period beginning on January 1 and ending twelve
(12) consecutive calendar months later on December 31.

1.8 “CFR” means the United States Code of Federal Regulations.

1.9 “cGMP” means current good manufacturing practices.

1.10 “Claims” has the meaning set forth in Section 10.2.

1.11 “Clinical Studies” means any clinical studies of a Licensed Product
conducted on humans.

1.12 “Commercialize” or “Commercialization” means promotion, marketing, sale,
supply, manufacture, import, export and distribution of Licensed Products,
including any educational or prelaunch activities.

1.13 “Commercially Reasonable Efforts” means exerting such efforts and employing
such resources as would normally be exerted or employed by a Party for its other
drug candidates and pharmaceutical products of a comparable stage of development
and commercial potential and this includes all the milestones described in
Article 4.

1.14 “Completion” means, with respect to any Clinical Study, the completion of
treatment for the necessary number of patients required by the applicable
protocol and completion of the statistical analysis of the study data.

1.15 “Compound” means KX-02 (also known as KX2- 361) that cannot be developed,
manufactured, used, sold, offered for sale, or imported without infringing one
or more valid claims of the Intellectual Property related to the Compound and
the Licensed Product, as diagrammed on Schedule 1.1 attached hereto, and any
pharmaceutically acceptable salts, hydrates, solvates, and prodrugs of the
foregoing, or mixtures thereof.

1.16 “Control” means possession of the ability to grant the rights and licenses
as provided for herein without violating the terms of any agreement or
arrangement with any Third Party.

1.17 “Copyright” means the right granted to an author or creator of an original
work fixed in any tangible medium of expression, including without limitation,
books, literary works, computer programs, and pictorial, graphic, dramatic and
sculptured works, as well as derivative works and translations.

1.18 “Data“ means any and all research data, pharmacology data, preclinical
data, clinical data, chemistry, manufacturing and control (“CMC”) data and/or
all other similar documentation necessary or useful for the Development or
Commercialization of the Compound or Licensed Products.

1.19 “Develop” or “Development” means those activities undertaken with respect
to the Compound or Licensed Products which are devoted to the progression of a
potential pharmaceutical product in Clinical Studies and any other activities
directed toward quality issues, publication, Regulatory Approval, formulation,
production or CMC of the Compound or Licensed Products, including any other
pre-launch activities.

1.20 “Disputed Claim” has the meaning set forth in Section 10.4(b).

1.21 “Dollar” or “$” means the lawful currency of the United States.

1.22 “Drug Approval Application” means an application for Regulatory Approval of
a Licensed Product as a pharmaceutical product in a regulatory jurisdiction.

1.23 “Effective Date” means the date when all the conditions precedent specified
in 2.1 have been satisfied.

1.24 “Field” means all therapeutic or preventive indications for brain tumors,
including primary brain tumors and brain metastasis.

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1.25 “First Commercial Sale” means, with respect to any Licensed Product, the
first sale to a Third Party for end use or consumption of such Licensed Product
in a country in the Territory by XPH, its Affiliates or sublicensees after
receipt of Regulatory Approval in such country or, where Regulatory Approval is
not required, then the first sale for end use or consumption of a Licensed
Product to a Third Party in that country in the Territory in connection with the
nationwide introduction of such Licensed Product in that country in the
Territory by XPH, its Affiliates or sublicensees.

1.26 “Generic Competition” shall be deemed to exist for a specific Licensed
Product in a particular country as of any date if, during the two
(2) immediately preceding Calendar Years, (a) Generic Products have a market
share in the applicable country of at least thirty percent (30%) of the then
combined unit volume of the applicable Licensed Product and Generic Products, or
(b) at least one Generic Product is commercially introduced in such country and
the Net Sales by XPH of the applicable Licensed Product in the applicable
country decrease by at least thirty percent (30%) with each of (a) and
(b) measured as an average taken over such two (2) Calendar Years and compared
to the Calendar Year immediately preceding the beginning of such two
(2) Calendar Year period.

1.27 “Generic Product” means any pharmaceutical product that is (i) sold by a
Third Party that is not a licensee or Sublicensee of XPH or its Affiliates or
sublicensees, under a marketing authorization granted by a Regulatory Authority
to such Third Party, (ii) contains the Compound as an active pharmaceutical
ingredient, and (iii) is approved in reliance on the prior approval of a
Licensed Product as determined by the applicable Regulatory Authority in the
applicable country.

1.28 “IFRS” means International Financial Reporting Standards as adopted by the
International Accounting Standard Board, consistently applied.

1.29 “Improvements” means all inventions and Know-How, patentable or otherwise,
made, created, developed, conceived or reduced to practice by or on behalf of a
Party and/or any of its Affiliates pursuant to activities relating to or
contemplated by this Agreement during the Agreement Term, that are necessary or
useful for the Development or Commercialization of the Compound or Licensed
Product for use in the Field including developments in the manufacture,
formulation, ingredients, preparation, presentation, means of delivery or
administration, dosage, indication, methods of use or packaging and/or sale of
the Compound or Licensed Product.

1.30 “IND” means an Investigational New Drug application, this carries the same
meaning in each of the countries in the Territory similar to what is described
in the United States in 21 C.F.R. Section 312.23, obtained for purposes of
conducting Clinical Studies in accordance with the requirements of the Act and
the regulations promulgated thereunder, including all supplements and amendments
thereto relating to the use of the Compound or Licensed Product in the Field.

1.31 “Insurance” has the meaning set forth in Section 10.6(a).

1.32 “Intellectual Property” means Patent Rights, Know-How, Copyrights and
Trademarks collectively, that are necessary or useful for the Development or
Commercialization of the Compound or Licensed Products, including any
Improvements thereto.

1.33 “Kinex Indemnified Parties” has the meaning set forth in Section 10.1.

1.34 “Kinex Intellectual Property” means the Kinex Patent Rights, Kinex Know-How
and other Intellectual Property owned or Controlled by Kinex or any of its
Affiliates.

1.35 “Kinex Know-How” means all Know-How that are owned or Controlled by Kinex
or any of its Affiliates.

1.36 “Kinex Patent Rights” means all Patent Rights that are owned or Controlled
by Kinex or any of its Affiliates, including the Patent Rights listed in
Schedule 1.2 and as provided in Section 7.1.

1.37 “Know-How” means all proprietary information and technology, including
trade secret information, developments, discoveries, methods, techniques,
formulations, Data, and other information, whether or not patentable, that are
necessary or useful for the Development or Commercialization of the Compound or
Licensed Product, or any Improvement thereto, in the Field.

1.38 “Law(s)” means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the binding effect of law of any governmental authority.

1.39 “Licensed Product(s)” means any pharmaceutical preparation in final form
(or, where the context so indicates, the form under development) that contain
the Compound as an active pharmaceutical ingredient for use in the Territory.

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1.40 “Losses” means any and all damages, awards, deficiencies, settlement
amounts, defaults, assessments, fines, dues, penalties (including penalties
imposed by any governmental authority), costs, fees, liabilities, obligations,
taxes, liens, losses, lost profits and expenses (including court costs, interest
and reasonable fees of attorneys, accountants and other experts) awarded or
otherwise paid or payable to Third Parties.

1.41 “NDA” means a new drug application in any of the countries in the Territory
similar to the NDA submitted to the FDA to obtain approval for the marketing of
a Licensed Product in the United States, together with all subsequent
submissions, supplements and amendments thereto.

1.42 “Net Sales” means the gross sales amount of Licensed Products invoiced to
Third Parties by XPH, its Affiliates and sublicensees, less the following
deductions (to the extent included in such gross sales amount):

(a) quantity and/or cash discounts therefor;

(b) customs, duties, sales and similar taxes;

(c) amounts allowed or credited by reason of rejections, return of goods
(including as a result of recalls, market withdrawals and other corrective
actions), and retroactive price reductions or allowances specifically
identifiable as relating to a Licensed Product including allowances and credits
related to inventory management or similar agreements with wholesalers;

(d) amounts incurred resulting from government (or any agency thereof) mandated
rebate programs in the Territory;

(e) Third Party rebates, patient discount programs, administrative fees and
chargebacks or similar price concessions related to the sale of a Licensed
Product;

(f) bad debt actually included on XPH’s financial statements, provided that XPH
has made Commercially Reasonable Efforts to collect on such debts;

(g) the expenses for insurance, freight, packing, shipping and transportation;

(h) commissions paid to agents or distributors to secure tender offers or other
purchases by local authorities; and

(i) as agreed by the Parties, such agreement not to be unreasonably withheld,
any other specifically identifiable amounts included in a Licensed Product’s
gross sales amount that were or ultimately will be credited and that are similar
to those listed above, all in accordance with IFRS. All such discounts,
allowances, credits, rebates and other deductions shall be fairly and equitably
allocated to the Licensed Product, and, to the extent applicable, other products
or services of XPH, its Affiliates or sublicensees such that the Licensed
Products do not bear a disproportionate portion of such deductions. For the
avoidance of doubt, Net Sales shall not include sales by XPH to its Affiliates
or sublicensees for resale; provided that, if XPH sells a Licensed Product to an
Affiliate or sublicensee for resale, then the Net Sales calculation shall based
on the higher of (i) the amount invoiced XPH to such Affiliate or sublicensee or
(ii) the amount invoiced by such Affiliate or sublicensee to the Third Parties
on the resale of such Licensed Product. For purposes of this Agreement, “sale”
shall not include transfers or other distributions or dispositions of a Licensed
Product, at no charge, for regulatory purposes, clinical trials, samples, free
products or in connection with patient assistance programs or other charitable
purposes or to physicians or hospitals for promotional purposes. A Licensed
Product shall be considered “sold” only when billed or invoiced.

1.43 “Ongoing Clinical Studies” means Clinical Studies with enrolled patients
that are in the process of being conducted. For the avoidance of doubt, this
does not include Clinical Studies where no patient dosing has occurred.

1.44 “Party” means Kinex or XPH, as the context may require.

1.45 “Parties’ Patent Rights” has the meaning set forth in Section 7.3(a).

1.46 “Patent Rights” means any patents, patent applications, certificates of
invention, or applications for certificates of invention and any supplemental
protection certificates, together with any extensions, registrations,
confirmations, reissues, substitutions, divisions, continuations or
continuations-in-part, reexaminations or renewals thereof that claim or cover
the Compound, Licensed Product or any Improvement, including methods of
development, manufacture, formulation, preparation, presentation, means of
delivery or administration, dosage, packaging, sale or use thereof

1.47 “Phase I Clinical Study(ies)” means a Clinical Study that is intended to
initially evaluate the safety or pharmacological effect of a Licensed Product in
the Field in subjects or that would otherwise satisfy requirements of 21 CFR
312.2(a), or its foreign equivalent.

1.48 “Phase II Clinical Study(ies)” means a Clinical Study that is intended to
initially evaluate the effectiveness of a Licensed Product in the Field in
subjects or that would otherwise satisfy requirements of 21 CFR 312.21(b), or
its foreign equivalent.

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1.49 “Phase III Clinical Study(ies)” means a pivotal Clinical Study, the results
of which could be used to establish safety and efficacy of a Licensed Product in
the Field as a basis for Regulatory Approval or that would otherwise satisfy
requirements of 21 CFR 312.21(c), or its foreign equivalent.

1.50 “Prime Rate” means the rate announced from time to time by HSBC Bank, N.A.
as its “prime rate” in New York, New York USA which is the base rate upon which
other rates charged at such bank are based, and is the best rate available to
premium customers at such bank.

1.51 “Product Label(ing)” shall have the same meaning as defined in the
applicable law in the respective country in the Territory.

1.52 “Proprietary Information” means any and all scientific, clinical,
technological, regulatory, marketing, financial and commercial information or
data, whether communicated in writing, orally or by any other means, which is
owned and under the protection of one Party and is provided by that Party to the
other Party in connection with this Agreement, and shall include Kinex Know-How
and XPH Know-How, as applicable, and the Data.

1.53 “Regulatory Approval” means approval by the relevant Regulatory Authority
of an NDA or other Drug Approval Application, health registration, common
technical document, regulatory submission, notice of compliance and any other
license or permit required to be approved for the supply, manufacture, use,
storage, distribution, import, export, transport, promotion, marketing and sale
of a Licensed Product in a country, region or other regulatory jurisdiction.

1.54 “Regulatory Authority” means any governmental authority in a country,
region or other regulatory jurisdiction that regulates the supply, manufacture,
use, storage, distribution, import, export, transport, promotion, marketing and
sale of a Licensed Product.

1.55 “SEC” means the United States Securities and Exchange Commission and any
successor agency having substantially the same functions.

1.56 “SFDA” means the Regulatory Authority in China.

1.57 “Substantial Level Generic Competition” shall be deemed to exist for a
Licensed Product in a particular country as of any date if, during the two
(2) immediately preceding Calendar Years, (a) Generic Products have a market
share in the applicable country of at least sixty percent (60%) of the then
combined unit volume of the applicable Licensed Product and Generic Products, or
(b) at least one Generic Product is commercially introduced in such country and
Net Sales of the applicable Licensed Product by XPH in the applicable country
decrease by at least sixty percent (60%) with each of (a) and (b) measured as an
average taken over such two (2) Calendar Years and compared to the Calendar Year
immediately preceding the beginning of such two (2) Calendar Year period.

1.58 “Territory” means the following designated countries only: Greater China
(including Mainland China, Taiwan, and Hong Kong) and Singapore. All other
countries are expressly excluded and retained by Kinex. When referring to
Clinical Studies, any one of the countries or regions within the Territory shall
be considered as within the Territory.

1.59 “Third Party(ies)” means a person or entity who or which is neither a Party
nor an Affiliate of a Party.

1.60 “Trademark” means the trademark(s) for which either Party has sought
registration and all related service marks, domain names and other trademark
related rights that are necessary or useful for the Development or
Commercialization of the Licensed Products in the Field.

1.61 “Valid Claim” means any claim in an active patent application or issued in
an unexpired patent which has not been held unenforceable, unpatentable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction following exhaustion of all possible appeal processes, and which
has not been admitted to be invalid or unenforceable through reissue,
reexamination or disclaimer and has not been terminated for failure to pay
maintenance fees.

1.62 “XPH Indemnified Parties” has the meaning set forth in Section 10.1.

1.63 “XPH Know-How” means all Know-How that are owned or Controlled by XPH as of
the Effective Date and during the Agreement Term.

1.64 “XPH Patent Rights” means all Patent Rights that are owned or Controlled by
XPH as of the Effective Date and during the Agreement Term, including as
provided in Section 7.1.

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ARTICLE 2

CONDITIONS PRECEDENT

2.1 This Agreement is effective when executed and (a) Kinex will transfer all
technical documents that are currently available for US IND filing for XPH’s
assessment, and (b) that XPH will have a chance to assess the intellectual
property position of the Compound (as detailed in Schedule 2). XPH will have 90
calendar days to evaluate both of these aspects after receiving the documents.
If the assessment of either the scientific merits or intellectual property is
found to be unsatisfactory by XPH, this Agreement will be terminated
immediately. XPH is going to engage a CRO to access a path for Chinese SFDA IND
submission and if the CRO issues a report within 90 calendar days that the
Compound will not be accepted by Chinese SFDA despite best efforts, Kinex will
reimburse the upfront payment in Section 5.1. XPH also will access the patent
application of ICX02 in China and if there are major issues with regards to the
issuance of patent protection in China (as assessed within 90 calendar days),
Kinex will also reimburse the upfront payment in Article 5.1.

ARTICLE 3

GRANT OF RIGHTS

3.1 Grants by Kinex. Subject to the terms and conditions of this Agreement,
Kinex hereby grants to XPH an exclusive right and license throughout the
Territory (and with the right to grant sublicenses with the consent of Kinex
which will not be unreasonably withheld) in and to the Kinex Intellectual
Property, to develop, label, package, import, export, promote, distribute, make,
use, sell, offer for sale, register, commercialize and otherwise exploit the
Licensed Product(s) in the Field and a non-exclusive right to manufacture the
Compound in the Territory but solely for use in the Licensed Products; provided,
however, that, notwithstanding the exclusive rights granted to XPH hereunder,
Kinex shall retain the right to use the Kinex Intellectual Property in the
Territory other than for the promotion, distribution, sale, offer for sale,
registration, making, importing/exporting or commercialization of Licensed
Product(s) in the Field. Any Affiliates of XPH exercising any rights of XPH
under this Agreement shall be located within the Territory; provided, however,
that XPH may use Affiliates or Third Parties located outside the Territory to
assist in the development of Licensed Products with the prior written consent of
Kinex. With respect to sales to Third Party distributors or other parties
purchasing Licensed Product for resale, XPH shall use Commercially Reasonable
Efforts to restrict such resales to within the Territory, including termination
of sales to such parties if required by Kinex.

3.2 Retained Rights; No Implied Licenses. All rights not specifically granted to
XPH under this Agreement are reserved and retained by Kinex. Nothing in this
Agreement shall be deemed to constitute the grant of any license or other right
to XPH, to or in respect of any product, patent, trademark, Proprietary
Information, trade secret or other data or any other Intellectual Property of
the other Party, except as set forth under this Agreement (including, but not
limited to, the Mimetica and Opal discovery platforms or any compound or
molecule in the Kinex libraries other than the Compound). Kinex expressly
reserves and retains the right to develop or manufacture Licensed Products
within the Territory for sale outside the Territory.

3.3 Substitute Compound. If XPH abandons the Compound for Commercialization and
Development in the Territory, Kinex upon the payment of US$*** by XPH to Kinex,
shall select an alternative compound from the same chemical class and such
alternative compound shall be added to the definition of “Compound” for all
purposes under this Agreement (“Alternative Compound”). If Kinex has also
abandoned the Compound for Commercialization and Development in the Field
outside the Territory and is developing a substitute compound in the Field
outside the Territory, the Alternative Compound shall be the substitute compound
currently under Development and Commercialization by Kinex in the Field outside
the Territory. Kinex shall transfer all Data relating to the Alternative
Compound to XPH. XPH shall be responsible for all costs associated with the
Development and Commercialization of the Alternative Compound in the Territory
including preclinical and toxicology studies necessary to permit the filing of
an IND with SFDA for the Alternative Compound.

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ARTICLE 4

INFORMATION TRANSFER; DEVELOPMENT AND COMMERCIALIZATION;

REGULATORY MATTERS

4.1 Information and Transfer of Kinex Intellectual Property.

(a) As soon as practicable, but in no event later than thirty (30) days after
the Parties sign this Agreement, Kinex shall disclose and deliver to XPH
electronic copies (or, upon XPH‘s request, copy of the originals) of all Data
for continued Development and Commercialization in the Territory to be used for
XPH’s Chinese SFDA IND application which is available to Kinex at the time
(including without limitation to the all pre-clinical and manufacturing data
available to Kinex that is related to the Compound at the time) and any
registration documents of the Compound and its Licensed products, and the latest
Kinex Intellectual Property Rights. In addition to the foregoing, Kinex shall
provide XPH with such assistance as XPH may reasonably request (at XPH’s cost
and expenses) in connection with the foregoing disclosures, including making
available at their place of employment (or such other location as the Parties
may mutually agree upon) the assistance of such persons that were involved with
the Kinex Intellectual Property.

(b) During the term of this Agreement, Kinex shall, upon the request of XPH,
provide XPH with any Data which is available to Kinex and is required for the
application for the IND with SFDA within 60 calendar days. Failure to comply
with this provision by Kinex will entitle XPH to terminate this Agreement and to
require Kinex to repay all payment which has been made by XPH.

4.2 Development and Commercialization.

(a) General. XPH shall be responsible for and shall itself, or through its
Affiliates or sublicensees, conduct Development and Commercialization in the
Territory in the Field during the Agreement Term as described by this Agreement.
Within 60 days after the Effective Date, XPH shall prepare a draft plan and
budget (in English) for Development and Commercialization in each of the
countries within the Territory and submit such draft plan to the Development and
Commercialization Steering Committee (as defined in Section 4.4) which will
agree on and oversee the plan for Development and Commercialization during the
Agreement Term. If XPH fails to (i) prepare the draft plan and budget within
60 days of the Effective Date, (ii) file an IND with SFDA by June 30, 2013,
(iii) commence a Phase I Clinical Study with at least 40 tumor patients within
6 months after obtaining the approval of SFDA to initiate Phase I Clinical
Studies, (iv) commence a Phase II Clinical Study with at least 120 brain tumor
patients within six (6) months after SFDA endorses the study report for the
Phase I Clinical Study and approves the commencement of the Phase II Clinical
study by XPH, (v) commence at least a Phase III Registration Clinical Study that
has been agreed upon with Chinese SFDA within six (6) months of Completion of
the Phase II Clinical Study and approval of SFDA on the commencement of a Phase
III Registration Clinical Study by XPH, (vi) file a New Drug Application for
Regulatory Approval to Chinese SFDA within nine (9) months of Completion of the
Phase III Study, (vii) First Commercial Sale of Licensed Product in each country
in the Territory within 60 days of the Regulatory Approval in such country in
the Territory, all rights and licenses under this Agreement shall immediately
terminate, unless (i) Commercially Reasonable Efforts has been made by XPH; or,
(ii) Kinex’s failure to comply with Article 4.1 (information and transfer of
Kinex Intellectual Property) and 4.2 (d) (Referencing Data) is attributable to
such failure by XPH; or, iii) such failure results from the action on inaction
of SFDA; provided, however, Kinex shall grant a six month extension on any of
the foregoing timelines at the reasonable request of XPH prior to any
termination of this Agreement. Further, Kinex shall grant a second six month
extension of any of the foregoing timelines.

(b) Summary Reports. Upon Kinex’s sixty (60) day prior written request, made
within thirty (30) days of the end of the first Calendar Year following the
Effective Date and each year thereafter during the Agreement Term, XPH shall
provide Kinex with a written summary of Development and Commercialization
undertaken on a country by country basis during the then current Calendar Year
consistent with written reports issued by XPH in the ordinary course of its
business.

(c) Clinical Studies. XPH will be responsible for, and conduct and administer at
its sole cost and expense, all the studies required for Regulatory Approval in
each of countries within the Territory. Specifically, XPH will:

(i) Submit an IND to SFDA for phase 1 clinical studies by June 30, 2013;

(ii) Conduct Phase 1 Clinical Study in the Territory with the study to be
commenced within 6 months after obtaining the approval of SFDA to initiate Phase
1 Clinical Studies;

(iii) Conduct studies that are required to support Phase II Clinical Study(ies)
as well as commence Phase II Clinical Study for brain tumors within the
Territory within six months after SFDA endorses the study report for the Phase I
Clinical Study and approves the commencement of Phase II Study;

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confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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(iv) Conduct Clinical Studies in the Territory in support of the clinical
strategy for the appropriate indications as identified in the Development Plan
approved by the Development and Commercialization Steering Committee; and

(v) Conduct and/or participate in the global Phase III Studies in such a manner
in conjunction with Kinex that will support the approval of Licensed Product in
each of the countries within the Territory.

All study reports will be filed to regulatory authorities within 6 months of the
completion of the applicable Clinical Study

(d) Referencing Data. The Data and results of any Clinical Studies or other
studies conducted by a Party or its ex-Territory partners shall be made
available to the other Party for referencing at no cost to the requesting Party
for regulatory filing purposes, and each party hereby grants to the other Party
a right of reference to use such Data for the Development and Commercialization
of the Compound and Licensed Products, provided, however, that with respect to
the right granted to XPH, such right shall be limited to the Development and
Commercialization of the Compound and the Licensed Products in the Field in the
Territory.

(e) Payment of Development and Commercialization Costs. XPH shall be responsible
for all costs associated with Development and Commercialization of Licensed
Products in the Territory. Notwithstanding the generality of the foregoing, XPH
shall reimburse Kinex for the direct costs incurred by Kinex in carrying out any
Development within the Territory that was authorized or approved in writing in
advance by XPH.

(f) Records. Under this Agreement, XPH and Kinex shall maintain records, in
sufficient detail and in good scientific manner appropriate for patent and
regulatory purposes and in accordance with good industry practice, which shall
be complete and accurate in all material respects and shall fully and properly
reflect all work done and results achieved, including all Know-How and including
individual case report forms, in the form required by applicable Laws.

(g) Promotional Materials and Activities. XPH shall create and develop the
advertising and promotional materials for the Licensed Products in the Territory
with the written approval of Kinex (which shall not be unreasonably withheld)
with respect to all such materials. As holder of the Regulatory Approvals in the
Territory, XPH shall be responsible for all submissions and interactions with
the Regulatory Authorities regarding approval of all Licensed Product-related
promotional materials that require Regulatory Approval.

(h) Ownership of Copyrights and Trademarks. Kinex retains all rights to
establish a global brand for each Licensed Product and shall own all Copyrights
and Trademarks for the Licensed Product as specified in 7.1 (a) (i) in the
Territory. XPH shall be responsible for searching, clearing and filing
applications for registration of all such Copyrights, Trademarks and trade dress
at its sole cost in accordance with Kinex’s global branding strategy. Kinex
shall execute all documents and take all actions as are reasonably requested by
XPH with respect to such filings and registrations.

(i) Sales of Licensed Products. All sales of Licensed Products shall be made,
recorded, invoiced and collected by XPH. All terms regarding Licensed Product
sales, including terms respecting credit, pricing, cash discounts, rebates,
chargebacks, bad debt write-offs, and other fees and charges, and returns and
allowances shall be set solely by XPH.

(j) Compliance with Laws. XPH shall in all respects comply with all applicable
laws and applicable guidelines concerning the advertising, sales and marketing
of prescription drug products in Commercializing Licensed Products in the
Territory under this Agreement and (b) XPH shall obligate any sublicensees that
it or its Affiliates may engage with respect to Licensed Products to do the
same; to bring any non-compliance therewith (should it ever occur) by any of the
foregoing entities to XPH’s attention; and to promptly remedy any such
non-compliance. XPH and its Affiliates shall maintain such procedures throughout
the Agreement Term and shall promptly notify Kinex in writing with respect to
any material non-compliance regarding Commercialization of Licensed Products.

(k) Kinex shall also arrange, at XPH’S expense, required technical training to
XPH in the use, manufacture and development of the Compound and in expediting
the Development and Commercialization of the Compound and Licensed Product in
the Territory. The parties shall arrange the training at mutually agreed terms
from time to time;

(l) Kinex shall, upon the request of XPH and at the expense of XPH, assist XPH
in the preparation and filing of all registration in XPH Licensed Territory with
respect to the Development and Commercialization of the Licensed Product to the
extent permitted or made necessary by statute, regulation or government agency,
including, without limitation, executing and delivering all documents in
connection therewith; provided that XPH shall reimburse Kinex for reasonable
out-of-pocket costs and other expenses incurred by Kinex in connection with such
cooperation.

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confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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4.3 Regulatory Matters.

(a) XPH Responsibility.

From and after the Effective Date:

(i) XPH shall have sole authority and responsibility for the timely preparation,
filing and prosecution of all filings, submissions, authorizations or approvals
with Regulatory Authorities in the Territory, and shall own and control all such
filings, submissions, authorizations and approvals, including any IND, NDA or
other Drug Approval Application in the Territory. XPH shall provide copies of
all such filings, submissions, authorizations and approvals upon reasonable
request from Kinex, at Kinex’s sole cost and expense.

(ii) XPH shall be the primary contact with each Regulatory Authority in the
Territory and shall be solely responsible for all communications with each
Regulatory Authority that relate to any IND, NDA, or other Drug Approval
Application in the Territory, provided, however, that upon the reasonable
request of XPH, Kinex shall provide appropriate personnel to participate in
discussions with a Regulatory Authority regarding the regulatory review process
and shall assist and consult with XPH in applying for Regulatory Approval at
XPH’s cost and expense.

(iii) From and after receipt of each Regulatory Approval, XPH shall have
exclusive authority and responsibility to submit all reports or amendments
necessary to maintain Regulatory Approvals and to seek revisions of the
conditions of each such Regulatory Approval in the Territory and shall keep
Kinex promptly informed of any such actions. XPH shall have sole authority and
responsibility to seek and/or obtain any necessary approvals of any Product
Label, or prescribing information, package inserts, monographs and packaging
used in connection with a Licensed Product, as well as promotional material used
in connection with a Licensed Product, and for determining whether the same
requires Regulatory Approval in the Territory.

(b) Regulatory Cooperation. Each Party is responsible concerning adverse drug
reactions, safety information and compliance with regulatory requirements. XPH
is responsible for providing any such data to Kinex that is required by the
United States Regulatory Authority. Kinex is also responsible for providing any
such data to XPH that is required by the Regulatory Authority in the Territory.
The Parties hereby agree that they will each make Commercially Reasonable
Efforts in coordinating their respective regulatory, Development and
Commercialization efforts.

(c) Pharmacovigilence. During the Agreement Term, each of the Parties will
notify appropriate Regulatory Authorities in accordance with applicable law, and
the other Party, promptly after receipt of information with respect to any
serious adverse event (as defined by the ICH Harmonized Tripartite Guideline on
Clinical Safety Data Management), directly or indirectly attributable to the use
or application of any Compound or Licensed Product.

(d) Product Recalls. If any Regulatory Authority having jurisdiction in the
Territory requires or reasonably requests to recall a Licensed Product due to a
defect in the manufacture, processing, packaging or labeling of such Licensed
Product or for any other reason whatsoever, XPH shall immediately notify Kinex.
XPH shall have the sole right and responsibility, at its expense, to initiate
all recall procedures required or requested by any such Regulatory Agency. XPH
shall have be responsible, at its expense, for carrying out any such recall as
expeditiously as possible and in such a way as to cause the least disruption to
the sales of the Licensed Product and to preserve the goodwill and reputation
attached to the Licensed Product and to the names of XPH and Kinex. XPH agrees
to maintain the appropriate record and procedures to permit the recall of the
Licensed Product.

4.4 Appointment and Administration of Development and Commercialization Steering
Committee for the Territory

(a) As soon as practicable after the execution of this Agreement and in no event
later than thirty (30) days after the Effective Date, the Parties will establish
a four (4) person steering committee to oversee and review the Development and
Commercialization of the Products in the Territory, which will include two
(2) representatives of each of XPH and Kinex (the Development and
Commercialization Steering Committee) and will be chaired by one of the
representatives of XPH. All actions, decisions and approvals of the Development
and Commercialization Steering Committee shall be unanimous. One member
appointed by each Party will be a senior officer of such Party who is either
(i) responsible for product development or (ii) has substantial experience in
product development for similar products who is acceptable to the other Party.
Each Party, at its sole discretion, may at any time during the Term of this
Agreement replace a member it has the right to designate upon prior written
notice to the other Party. Each Party will use reasonable efforts to cause its
respective representatives to attend all meetings of the Development and
Commercialization Steering Committee. Each Party will bear the travel and
out-of-pocket expenses incurred by its members or representatives in connection
with the Development and Commercialization Steering Committee’s meetings.

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(b) The Development and Commercialization Steering Committee will meet at least
once every Calendar Quarter, or more or less frequently as the Parties mutually
deem appropriate, on dates and at times and places as agreed by the Parties. The
Development and Commercialization Steering Committee may also convene or be
polled or consulted from time to time by means of telecommunications, video
conferences or correspondence, as deemed by the Parties to be necessary or
appropriate.

(c) If there is a disagreement within the Development and Commercialization
Steering Committee, the members of the Development and Commercialization
Steering Committee shall promptly present the disagreement to the executive of
each of XPH and Kinex who has the principal responsibility for his respective
company’s work under this Agreement. Once informed, such executives shall meet
to discuss each party’s view and to explain the basis for such disagreement. If
such executives are unable to resolve such dispute with thirty (30) days of such
meeting, then (a) if the disagreement is within the framework of this Agreement,
XPH’s decision will be final and binding within the Territory, unless the
disagreement is related to regulatory issues in countries outside the Territory
or imposes negative impacts Kinex’s rights under this Agreement, or (b) if the
disagreement is not within the framework of this Agreement and is applicable
only to issues in the Territory, then XPH’s decision will be final and binding.

(d) The Development Steering and Commercialization Committee will have the
authority in the Territory concerning (i) approval and amendment, from time to
time, of the plan for Development and Commercialization, (ii) the protocols and
indications for Clinical Trials of Licensed Products, (ii) approval of all
contracts relating to the Development of Licensed Product, (Hi) the formulation
used in respect of Licensed Product, and (iv) contracts relating to the
Commercialization of Licensed Product. The approval for the abovementioned
issues by the Development Steering and Commercialization Committee shall not be
unreasonably withheld.

ARTICLE 5

PAYMENTS AND STATEMENTS

5.1 Milestone Fees. In consideration of the rights granted by Kinex hereunder,
XPH shall pay Kinex the following milestone fees, contingent upon the later of
i) the occurrence of the specified event and H) XPH has received the approval
for making such payment from the applicable foreign exchange authority, with
each milestone fee to be paid no more than once with respect to the achievement
of such milestone event (but payable the first time when such milestone event is
achieved and further XPH has received the approval for making such payment from
the applicable foreign exchange authority):

 

 

 

 

 

 

(a)

  

Transfer of Data to XPH under Section 4.1

  

US$750,000

 

 

 

(b)

  

Allowance by the United States Regulatory Authority of an IND application
submitted by Kinex for the Compound (if Kinex cannot get US FDA allowance for
the IND before December 31, 2012 to initiate Phase I Clinical Study for the
Compound, XPH shall have the following options: i) to terminate this contract
and the payment in (a) will be reimbursed to XPH; ii) to continue the
performance of this Agreement on the terms and conditions which shall be
otherwise agreed by the Parties.)

  

US$750,000

 

 

 

 

 

(c)

  

Completion of a Phase I Clinical Study for the Compound in the United States or
China

  

US$***

 

 

 

 

 

(d)

 

Completion of a Phase II Clinical Study that achieves the primary clinical
endpoint set forth in the protocol for an oncology indication

 

US$***

 

 

 

 

 

(e)

 

Completion of a Phase III Clinical Study that achieves the achieves the primary
endpoint set forth in the protocol for an oncology indication

 

US$***

 

 

 

 

 

(f)

 

Regulatory Approval in any country specified in the Territory

 

US$***

 

 

 

 

 

Each milestone fee shall be deemed earned as of the achievement of the related
milestone event and shall be paid by XPH within thirty (30) Business Days after
the later of the date when i) the achievement of each milestone event and ii)
XPH has received the approval for making such payment from the applicable
foreign exchange control authority. XPH will expedite the application for such
payment.

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confidential treatment. An unredacted version of this exhibit has been filed
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5.2 Equity Investment in Kinex.

In conjunction with the completion of the license agreement, one of the XPH
affiliates will also make an equity investment of USD $10 million in Kinex
series A Preferred Shares on the same share price as of June 2011 (USD $20 per
share). It is agreed upon that US$*** M will be invested within 30 calendar
days. XPH will invest the first tranche (USD $*** million) in 30 calendar days
with an option to extent by another 30 days if additional regulatory approval is
required for the effect of such transaction. If the transaction is not completed
within 60 days, Kinex will withdraw the offered stock price and XPH will
withdraw its investment.

The completion of the remaining investment transaction will be contingent upon
the following conditions:

(a) Article 2.1 is satisfied, and

(b) XPH being satisfied with the due diligence of the private placement
memorandum.

This second tranche of investment (USD $*** million) will be made if the
contingent conditions given above is satisfied and within 4 months after the
execution of this Agreement.

(c) All requisite waivers, consents and approvals from any relevant governments
or regulatory authorities or other relevant third parties in connection with
such investment transactions contemplated by this article and the effect the
obligation of payment by XPH required to be obtained on the part of XPH having
been obtained by XPH, which including but not limited to the approval from the
following entities:

(i) National Development and Reform Commission;

(ii) the Ministry of Commerce of the People’s Republic of China; and

(iii) the State Administration Foreign Exchange of China;

5.3 Royalties.

(a) XPH shall, pursuant to Section 5.4(a), pay to Kinex a royalty of *** percent
on annual (Calendar Year) aggregate Net Sales of Licensed Product (annual Net
Sales is the aggregated total of all sales in the Territory).

(b) The royalty rates set forth above shall be reduced by forty percent
(40%) for a Licensed Product sold in any country in which Generic Competition
exists for such Licensed Product; provided, however, that if Substantial Level
Generic Competition exists for such Licensed Product in a country, no further
royalties shall be payable by XPH to Kinex with respect to such Licensed Product
in the subject country.

(c) If XPH sublicensed KX02 to other parties, Kinex will be entitled to 10% of
the upfront and milestones that XPH will receive on top of the milestones set
forth in this agreement.

5.4 Royalty Reports and Payments.

(a) Royalty Payments. Within sixty (60) days following the end of each Calendar
Quarter that royalties are payable by XPH to Kinex, XPH shall submit to Kinex a
written report containing, with respect to such Calendar Quarter and for the
then-current Calendar Year through the end of such Calendar Quarter, an
accounting on a country-by-country basis of gross sales, Net Sales and the
royalties payable in accordance with Section 5.2(a) for such Calendar Quarter,
with a breakdown of all deductions taken in any such calculations, in accordance
with the definition of “Net Sales”. Any conversion to United States Dollars
shall be calculated in accordance with Section 5.4(c). In the event of any
royalty reduction during any Calendar Quarter due to Generic Competition in any
country in the Territory, the report for such Calendar Quarter shall also show
the basis for the determination of such Generic Competition. Royalties shown to
have accrued by each report shall be due and payable on the date such report is
due.

(b) Following the expiration of all royalties payable to Kinex on any Licensed
Product in a country, XPH shall continue to furnish Kinex a written report on a
country-by-country basis for the next four Calendar Quarters following
expiration of royalties with respect to such Licensed Product, and shall state
the basis for Net Sales then being free of royalty obligations hereunder. XPH
shall thereafter have no further obligation to include in a report the Net Sales
of such Licensed Product in such country for purposes of the royalty calculation
for any Calendar Quarter. This obligation shall survive the termination or
expiration of this Agreement in any country.

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(c) Each Party shall keep and shall require its Affiliates or sublicensees to
keep complete and accurate records in sufficient detail to permit accurate
determination of all amounts necessary for calculation and verification of all
payment obligations set forth in this Article 4 for a period of 36 months from
the end of the relevant Calendar Quarter.

5.5 General Payment Provisions.

(a) Payment Method. All payments under this Agreement shall be made in United
States Dollars by bank wire transfer in immediately available funds to an
account designated by Kinex.

(b) Withholding Taxes. XPH shall act as the tax agent of Kinex and make all
required withholding or other tax payments to, and file all appropriate tax form
with, the Chinese taxing authority(ies). XPH may deduct the amount of any taxes
imposed on Kinex which are required to be withheld or collected by XPH, its
Affiliates or sublicensees under the laws, rules or regulations of any country
on amounts owing from XPH to Kinex hereunder. Any such taxes required to be
withheld or collected shall be an expense of Kinex.

Kinex shall provide XPH any tax forms that may be reasonably necessary in order
for XPH to not withhold tax or to withhold tax at a reduced rate and XPH shall
apply the reduced rate of withholding, or dispense with withholding, as the case
may be. Each Party shall provide the other with reasonable assistance to enable
the recovery, as permitted by applicable laws, of withholding taxes, value added
taxes, and similar obligations resulting from payments made under this
Agreement, such recovery to be for the benefit of the Party bearing such
withholding tax or value added tax. To the extent XPH, its Affiliates or
sublicensees pay such withholding taxes to the appropriate governmental
authority on behalf of Kinex, XPH shall promptly deliver to Kinex proof of
payment of such taxes.

(c) Currency Exchange. For purposes of computing royalties on Net Sales in any
country outside the United States, the Net Sales shall be converted to United
States Dollars using the year-to-date average rate of exchange for United States
Dollars used by XPH for its internal financial accounting purposes; provided,
however, that if for any reason conversion into United States Dollars cannot be
made in a country in the Territory, then notwithstanding the provisions of
Section 4.4(a), payment may be made in the currency of such country by deposit
in the name of Kinex in a bank account designated by Kinex in such country.

(d) Except as otherwise defined herein, all financial calculations by either
Party under this Agreement shall be calculated in accordance with IFRS. In
addition, all calculations shall give pro rata effect to and shall
proportionally adjust (by giving effect to the number of applicable days in such
Calendar Quarter) (i) for any Calendar Quarter that is shorter than a standard
Calendar Quarter or any Calendar Year that is shorter than four consecutive full
Calendar Quarters, or (ii) as a result of a determination, in accordance with
the terms of this Agreement, that the first or last day of such Calendar Quarter
(including as a result of termination of this Agreement) shall be deemed other
than the actual first or last day of such Calendar Quarter, or that the first or
last day of such Calendar Year shall be deemed other than the actual first or
last day of such Calendar Year.

5.6 Audits. Upon the written request of Kinex, XPH shall permit an independent
certified public accounting film of recognized standing, selected by Kinex and
reasonably acceptable to XPH (provided that such accounting firm shall not be
retained or compensated on a contingency basis and shall have entered into a
confidentiality agreement with XPH in form and substance reasonably satisfactory
to XPH), to have access not more than once in any Calendar Year, during normal
business hours, to such of the records of XPH as may be reasonably necessary to
verify the accuracy of the reports under Section 5.3 hereof for any year ending
not more than twenty-four (24) months prior to the date of such request. The
accounting firm shall disclose to Kinex whether the reports are correct or
incorrect, the specific details concerning any discrepancies (including the
accuracy of the calculation of Net Sales and the resulting effect of such
calculations on the amounts payable by XPH under this Agreement) and such other
information that should properly be contained in a report required under this
Agreement (the “Audit Report”)

(a) If such accounting firm concludes that additional amounts were owed during
such year, and XPH agrees with such conclusion, then the XPH shall pay the
additional payments, together with interest at the Prime Rate on the amount of
such additional payments, within thirty (30) days of the date Kinex delivers the
Audit Report to XPH. If such accounting firm concludes that amounts were
overpaid by XPH during such period, Kinex shall repay XPH the amount of such
overpayment, together with interest at the Prime Rate on the amount of such
overpayment, within thirty (30) days of the date Kinex delivers the Audit Report
to XPH. The fees charged by such accounting firm shall be paid by Kinex;
provided, however, that if an error in favor of Kinex of more than five percent
(5%) of the payments due hereunder for the period being reviewed is discovered,
then the fees and expenses of the accounting firm shall be paid by XPH.

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(b) Upon the expiration of twenty-four (24) months following the end of any year
for which XPH or Kinex has made payment in full of amounts payable with respect
to such year, and in the absence of negligence or willful misconduct of XPH or
Kinex or a contrary finding by an accounting firm pursuant to Section 5.5(a),
such calculation shall be binding and conclusive upon XPH or Kinex, and XPH or
Kinex, as applicable, shall be released from any liability or accountability
with respect to royalties or other payments for such year.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

6.1 General Representations. Each Party hereby represents and warrants to the
other Party as follows:

(a) Such Party is a corporation duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation, is qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification and failure to have such would prevent it
from performing its obligations under this Agreement;

(b) The execution, delivery and performance by such Party of this Agreement has
been duly authorized by all necessary corporate action and do not and will not
(i) violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter or bylaws; or (ii) conflict
with or constitute a default under any other agreement to which such Party is a
party;

(c) This Agreement has been duly executed and is a legal, valid and binding
obligation of such Party, enforceable against it in accordance with the terms
and conditions hereof, except as enforceability may be limited by (i) any
applicable bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditor’s rights generally, or (ii) general principles of equity,
whether considered in a proceeding in equity or at law;

(d) Such Party is not under any obligation to any person or entity, contractual
or otherwise, that is in conflict with the terms of this Agreement, nor shall
such Party undertake any such obligation during the Agreement Term;

(e) Such Party has obtained all authorizations, consents and approvals,
governmental or otherwise, necessary for the execution and delivery of this
Agreement, and to otherwise perform such Party’s obligations under this
Agreement;

(f) Neither Party, nor any of its Affiliates, are a party to, or are otherwise
bound by, any oral or written contract that will result in any person or entity
obtaining any interest in, or that would give to any Third Party any right to
assert any claim in or with respect to, any of such Party’s or the other Party’s
rights under this Agreement; and

(g) Such Party shall perform its obligations hereunder in accordance with all
applicable Laws.

6.2 Additional Representations and Warranties of Kinex. Kinex represents and
warrants to XPH that:

(a) As of the Effective Date in the Territory, to the knowledge of Kinex,
(i) there is no Third Party infringement of any of the Kinex Intellectual
Property; and (ii) the Kinex Intellectual Property is in full force where filed;
(iii) the Kinex Patent Rights where filed are not subject to any pending or
threatened re-examination, re-issue, opposition, interference, challenge,
litigation proceeding or other claim, and (iv) Kinex has only filed or
prosecuted patent applications with respect to the Kinex Intellectual Property
in the countries in the Territory as set forth on Schedule 1.2 to this
Agreement;

(b) To the knowledge of Kinex, Kinex has not committed any act, or omitted to
commit any act, that may cause the Kinex Patent Rights where filed to expire
prematurely or be declared invalid or unenforceable, or that stops Kinex from
enforcing the Kinex Patent Rights where filed against any Third Party;

(c) As of the Effective Date in the Territory, (i) Kinex has the right to use
and disclose and to enable XPH to use and disclose (in each case under
appropriate conditions of confidentiality) the Kinex Know-How; and (ii) the
Kinex Intellectual Property is not subject to any encumbrance, lien, license or
claim of ownership by any Third Party that would conflict with the terms of this
Agreement; and

(d) At no time during the Agreement Term shall Kinex assign, transfer, encumber
or grant rights in or with respect to the Kinex Intellectual Property
inconsistent with the rights granted to XPH under this Agreement.

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6.3 Additional Representations and Warranties of XPH. XPH represents and
warrants to Kinex that:

(a) At no time during the Agreement Tenn shall XPH assign, transfer, encumber or
grant rights in or with respect to the XPH Intellectual Property inconsistent
with the rights granted to Kinex under this Agreement including under
Section 9.3(d).

ARTICLE 7

PATENT MATTERS

7.1 Ownership of Inventions.

(a) Except as otherwise provided in and subject to the terms of this Agreement,
as between the Parties:

(i) Kinex shall have and retain all right, title and interest in or Control
over, as applicable, all Intellectual Property (and Patent Rights arising
thereunder) (i) existing, owned or Controlled by it on the Effective Date,
subject to the licenses and other rights for the specified Territory granted to
XPH under this Agreement and (ii) which is discovered, made, first conceived,
reduced to practice or generated as a result of Development or otherwise during
the Agreement Term solely by Kinex employees, agents, or other persons acting
under or pursuant to its authority.

(ii) XPH shall have and retain all right, title and interest in or Control over
all Intellectual Property (and Patent Rights arising thereunder) which is
discovered, made, first conceived, reduced to practice or generated under this
Agreement as a result of Development or otherwise during the Agreement Term,
solely by XPH’s employees, agents, or other persons acting under or pursuant to
its authority. XPH hereby grants to Kinex a non-exclusive, worldwide (excluding
the Territory), royalty free license (including the right to sublicense) in any
such Intellectual Property including all XPH Patent Rights and XPH Know-How
related to the Compound and the Licensed Product.

(iii) Kinex and XPH shall jointly own all right, title and interest in or
Control over all Intellectual Property (and Patent Rights arising thereunder)
which is discovered, made, first conceived, reduced to practice or generated
under this Agreement in the Territory as a result of Development or otherwise
during the Agreement Term jointly by Kinex and XPH employees, agents, or other
persons acting under or pursuant to their authority (“Jointly Owned Intellectual
Property”). With respect to Jointly Owned Intellectual Property, both Parties
shall have the right to use Jointly Owned Intellectual Property within the
Territory subject to the terms of this Agreement. Kinex shall have the right to
use the Jointly Owned Intellectual Property in all other countries without
accounting or payment to XPH.

(b) Employees and Agents. Each of Kinex and XPH shall require all of its and its
Affiliates’ employees to assign all inventions and corresponding patent
applications and that are discovered, made, first conceived, reduced to practice
or generated by such employees during the Agreement Term to Kinex or XPH
according to the ownership principles described in Section 7.1(a). Each Party
shall use Commercially Reasonable Efforts to require any Third Parties working
on any Clinical Study or any Development under the Agreement or who receive
materials relating to Licensed Product or Know-How from a Party, to assign
ownership or grant a sublicenseable exclusive license on a fully paid-up,
royalty-free basis to all inventions and corresponding Patent Rights that are
developed, made or conceived by such Third Parties during the Agreement Term to
Kinex or XPH according to the ownership principles described in Section 7.1(a).

7.2 Maintenance and Prosecution.

(a) Kinex Patent Rights. Kinex shall have the right to file, prosecute and
maintain the Kinex Patent Rights in Kinex’s name, using patent counsel selected
by Kinex and shall be responsible for the payment of all patent prosecution and
maintenance costs. Kinex will inform XPH on the patent applications in the
Territory. As of the Effective Date, the Kinex Patent Rights in the Territory
include only those applications set forth in Schedule 1.2 to this Agreement and
Kinex retains the sole right to determine whether to file for additional patents
within the Territory. Kinex shall also have the right to file, prosecute and
maintain all Jointly Owned Intellectual Property in all countries outside the
Territory.

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(b) XPH Patent Rights. XPH shall have the first right to file, prosecute and
maintain the XPH Patent Rights in XPH’s name, using patent counsel selected by
XPH and shall be responsible for the payment of all patent prosecution and
maintenance costs. XPH will inform Kinex on the course of patent prosecution or
other proceedings and to furnish Kinex, upon request, with copies of office
actions received by XPH from the Regulatory Authority in countries outside the
Territory concerning XPH Patent Rights. XPH shall also have the first right to
file, prosecute and maintain all Jointly Owned Intellectual Property in all
countries in the Territory If XPH elects not to file, prosecute or maintain a
patent application or patent included in the XPH Patent Rights or the Jointly
Owned Intellectual Property, it shall provide Kinex with no less than forty-five
(45) days’ written advance notice sufficient to avoid any loss or forfeiture,
and Kinex shall then have the right, but not the obligation, at its sole
expense, to file, prosecute or maintain such Patent Right.

(c) The responsible Party under this Section 7.2 shall solicit the other Party’s
review of the nature and text of any patent applications within the Territory
resulting from Development or otherwise during the Agreement Term that are
necessary or useful for the Development or Commercialization of the Licensed
Products and important prosecution matters related thereto in reasonably
sufficient time prior to the filing thereof, and the responsible Party shall
take into account the other Party’s reasonable comments related thereto.

Each Party shall execute all documents and take all actions as are reasonably
requested by the other Party with respect to any filings and registrations.

7.3 Third Party Infringement.

(a) Each Party shall promptly give the other Party notice of any actual or
suspected infringement by a Third Party in the Territory of any patent included
in the Kinex Patent Rights or XPH Patent Rights relating to the Compound or
Licensed Products (collectively, the “Parties’ Patent Rights”), which comes to
such Party’s attention. In addition, both parties shall promptly give the other
party notice of any actual or suspected infringement by a Third Party outside
the Territory of any patent included in the Kinex or XPH Patent Rights. The
Parties shall thereafter consult and cooperate to determine a course of action,
including the commencement of legal action with respect to any infringement
within the Territory.

(b) Kinex shall have the first right, either directly or through its Affiliates
or licensees, to initiate and prosecute such legal action in the Territory at
its own expense and in the name of Kinex and/or XPH, or to control the defense
of any declaratory judgment action in the Territory relating to the Parties’
Patent Rights, and Kinex shall provide XPH with reasonable notice of any such
action it commences and keep XPH reasonably informed of any significant
developments in such action. XPH shall render, at Kinex’s expense (including
reasonable attorneys’ fees), all assistance reasonably requested in connection
with any action taken by Kinex or to prevent such infringement. However, the
control of such action, including whether to initiate any legal proceeding
and/or the settlement thereof, shall solely be under the control of Kinex;
provided that Kinex shall not settle any such claim or proceeding in a manner
that adversely affects XPH’s rights under this Agreement or which results in any
material monetary payment by or financial loss to XPH, without the prior written
consent of XPH, which consent shall not be unreasonably withheld.

(c) If Kinex elects not to initiate and prosecute an infringement or defend a
declaratory judgment action in any country in the Territory as provided in
Section 7.3(b) within sixty (60) days after having become aware of such
potential infringement, then XPH may elect, which election shall be subject to
the prior written consent of Kinex which consent shall not be unreasonably
withheld to take such action that is reasonably necessary and appropriate to
terminate or prevent such infringement, including instituting an infringement
proceeding, provided, however, that XPH shall not enter into any settlement or
compromise of any claim relating to the Parties’ Patent Rights licensed
hereunder or which results in any material monetary payment by or financial loss
to Kinex, without Kinex’s prior written consent, which consent shall not be
unreasonably withheld.

(d) Kinex shall have the sole right, either directly or through its Affiliates
or licensees to initiate and prosecute any legal action outside the Territory
with respect to the Kinex Patent Rights at its own expense or to control the
defense of any declaratory judgment action outside the Territory. XPH shall
render, at Kinex’s expense, all assistance reasonably requested in connection
with any action taken by Kinex or to prevent such infringement. However, the
control of such action, including whether to initiate any legal proceeding
and/or the settlement thereof, shall solely be under the control of Kinex.

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(e) For any legal action or defense contemplated by this Section 7.3, in the
event that any Party is unable to initiate, prosecute, or defend such action
solely in its own name, the other Party will join such action voluntarily and
will execute all documents necessary for the Party to prosecute, defend and
maintain such action. In connection with any such action, the Parties will
cooperate fully and will provide each other with any information or assistance
that either reasonably may request. Any recovery or award obtained by either
Party as a result of any action or settlement commenced with respect to
infringement within the Territory shall be shared as follows:

(i) the Party that initiated and prosecuted, or maintained the defense of, the
action shall recoup all of its costs and expenses (including reasonable
attorneys’ fees) incurred in connection with the action, whether the recovery is
by settlement or otherwise;

(ii) the other Party then shall, to the extent funds remain after payment set
forth in subsection (i) has been made, recover its reasonably documented costs
and expenses (including reasonable outside attorneys’ fees) incurred in
connection with the action;

(iii) if Kinex initiated and prosecuted, or maintained the defense of, the
action outside the Territory, the amount of any recovery remaining then shall be
retained by Kinex; and (iv) if XPH or Kinex initiated and prosecuted, or
maintained the defense of, the action in the Territory, the amount of any
recovery remaining then shall be shared equally by the parties.

7.4 Third Party Intellectual Property.

(a) In the event that a Party becomes aware of any claim that the development,
manufacture, import, use, marketing or sale of Licensed Product hereunder
infringes the intellectual property rights of any Third Party in the Territory,
such Party shall promptly notify the other Party. The Parties shall thereafter
discuss the situation, and to the extent reasonably necessary, attempt to agree
on a course of action.

(b) If within ten (10) Business Days the Parties fail to agree upon an
appropriate course of action in the Territory, Kinex shall have the first right,
but not the obligation, either directly or through its Affiliates or licensees
to defend any action in the Territory related to the intellectual property
rights of any Third Party or to initiate and prosecute legal action in the
Territory related to the intellectual property rights of any Third Party in the
name of XPH and/or Kinex. Kinex shall keep XPH reasonably informed as to the
progress of any such action. XPH shall render, at its expense, all assistance
reasonably requested in connection with any action taken by Kinex. However, the
control of such action, including whether to initiate any legal proceeding
and/or the settlement thereof, shall solely be under the control of Kinex;
provided that Kinex shall not settle any such claim or proceeding in a manner
that adversely affects XPH’s rights under this Agreement or which results in any
material monetary payment by or financial loss to XPH, without XPH’s written
consent, which consent shall not be unreasonably withheld. Kinex shall pay for
all costs and expenses incurred in such defense. In addition, Kinex shall pay
all damages awarded or settlement payments made (including future royalty or
similar payments) to such Third Party.

(c) If Kinex elects not to defend an infringement action in any country in the
Territory as provided in Section 7.4(b), and XPH elects to do so, which election
shall be subject to the prior written consent of Kinex which consent shall not
be unreasonably withheld, the cost of any agreed-upon course of action,
including the costs of any legal action commenced or any infringement action
defended, shall be borne solely by XPH, provided, however, that XPH shall not
enter into any settlement or compromise of any claim without the prior written
consent of Kinex, which consent shall not be unreasonably withheld.

(d) For any such legal action or defense, in the event that any Party is unable
to initiate, prosecute, or defend such action solely in its own name, the other
Party will join such action voluntarily and will execute all documents necessary
for the Party to prosecute, defend and maintain such action. In connection with
any such action, the Parties will cooperate fully and will provide each other
with any information or assistance that either reasonably may request.

(e) Kinex shall have the sole right, but not the obligation, either directly or
through its Affiliates or licensees to defend any action related to the
intellectual property rights outside the Territory of any Third Party or to
initiate and prosecute legal action outside the Territory related to the
intellectual property rights of any Third Party in the name of XPH and/or Kinex.
XPH shall render, at its expense, all assistance reasonably requested in
connection with any action taken by Kinex. However, the control of such action,
including whether to initiate any legal proceeding and/or the settlement
thereof, shall solely be under the control of Kinex.

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7.5 Patent Term Extensions. The Parties shall cooperate with each other in
obtaining patent term extensions or restorations or supplemental protection
certificates or their equivalents in any country in the Territory where
applicable and where desired by XPH. Elections with respect to obtaining such
extension or supplemental protection certificates shall be made in the same
manner and with the same relative priorities between the Parties as is
applicable to the prosecution and maintenance of Patent Rights pursuant to
Section 7.2.

7.6 Patent Marking. XPH shall mark, and shall require its Affiliates and
sublicensees to mark, all Licensed Products sold or distributed pursuant to this
Agreement in accordance with the applicable patent statutes or regulations in
the country or countries of manufacture and/or sale thereof.

ARTICLE 8

CONFIDENTIALITY AND PUBLICITY

8.1 Non-Disclosure and Non-Use Obligations. All Proprietary Information
disclosed by one Party to the other Party hereunder shall be maintained in
confidence and shall not be disclosed to any Third Party or used for any purpose
except as expressly permitted herein without the prior written consent of the
Party that disclosed the Proprietary Information to the other Party during the
term of this Agreement and for a period of ten (10) years thereafter. The
foregoing non-disclosure and non-use obligations shall not apply to the extent
that such Proprietary Information:

(a) is known by the receiving Party at the time of its receipt, and not through
a prior disclosure by the disclosing Party, as documented by records;

(b) is or becomes properly in the public domain or knowledge without breach by
either Party;

(c) is subsequently disclosed to a receiving Party by a Third Party who may
lawfully do so and is not under an obligation of confidentiality to the
disclosing Party; or

(d) is developed by the receiving Party independently of Proprietary Information
received from the disclosing Party, as documented by contemporary written
records.

8.2 Permitted Disclosure of Proprietary Information. Notwithstanding
Section 8.1, a Party receiving Proprietary Information of another Party may
disclose such Proprietary Information:

(a) to governmental or other regulatory agencies in order to obtain patents
pursuant to this Agreement, or to gain approval to conduct Clinical Studies or
to market Licensed Product, but such disclosure may be only to the extent
reasonably necessary to obtain such patents or authorizations and in accordance
with the terms of this Agreement or as otherwise requested by the Regulatory
Authorities;

(b) by XPH to its agents, consultants, sublicensees or Affiliates in connection
with the Development or Commercialization, or to otherwise enable XPH to fulfill
its obligations and responsibilities under this Agreement, on the condition that
such entities agree to be bound by confidentiality obligations consistent with
this Agreement; or

(c) if required to be disclosed by law or court order, provided that notice is
promptly delivered to the non-disclosing Party in order to provide an
opportunity to challenge or limit the disclosure obligations.

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(d) Certain Disclosures. Except as set forth in this Agreement or as required by
law, neither Party shall make any press release or other public announcement or
other public disclosure to a Third Party concerning the existence of or terms of
this Agreement, the subject matter of this Agreement or the activities
contemplated hereunder, without the prior written consent of the other Party,
which consent shall include agreement upon the nature and text of such release,
announcement or other disclosure and shall not be unreasonably withheld or
delayed. Each Party agrees to provide to the other Party a copy of any such
press release or other public announcement or disclosure as soon as reasonably
practicable under the circumstances prior to its scheduled release. Each Party
shall have the right to expeditiously (but in any event within forty-eight
(48) hours) review and recommend changes to any such press release or other
public announcement or disclosure; provided, however, that such right of review
and recommendation shall only apply for the first time that specific information
is to be disclosed, and shall not apply to the subsequent disclosure of
substantially similar information that has previously been disclosed unless
there have been material developments relating to Licensed Product since the
date of the previous disclosure; provided, further, that each Party shall
provide to the other Party reasonable advance notice of any such subsequent
disclosure. Without limiting the generality of any of the foregoing, it is
understood that the Parties or their Affiliates may make disclosure of this
Agreement and the terms hereof in accordance with the rules and regulations of
the SEC, other governmental authority, or securities exchange, may file this
Agreement as an exhibit to any filing with the SEC, other governmental
authority, or securities exchange, and may distribute any such disclosure or
filing in the ordinary course of its business, provided, further, that to the
maximum extent allowable by the rules and regulations of the SEC, other
governmental authority, or securities exchange, and except as required by
applicable Laws, Kinex and XPH shall seek to redact any confidential information
set forth in such filings, and each Party shall provide a draft of the redacted
version of this Agreement to the other Party no less than five (5) Business Days
prior to disclosure or filing with the SEC, other governmental authority, or
securities exchange, and give reasonable consideration to the other Party’s
comments regarding any proposed redaction.

8.3 Publications. XPH shall not submit for written or oral publication any
manuscript, abstract or the like relating to the Compound or Licensed Products,
without the prior approval or written request of Kinex. If XPH desires to submit
such publication, it shall first deliver to Kinex, for Kinex’s prior written
consent, the proposed publication or an outline of the oral disclosure at least
sixty (60) days prior to planned submission or presentation.

8.4 Publicity: Except as otherwise provided in this Agreement or required by law
or regulation, no Party will originate any news release or other public
announcement, written or oral, whether in the public press, stockholders’
reports or otherwise, relating to this Agreement or to any sublicense under this
Agreement, or to the performance under this Agreement or under any sublicense
under this Agreement, without the prior written approval of the other Party,
which approval will not be unreasonably withheld or delayed; provided that the
foregoing shall not restrict disclosures made in connection with any filing of
information or materials with a stock exchange or the SEC or any stockholders’
letter to private investors on the condition that if the information is for
investors, such investors agree to be bound by confidentiality obligations
consistent with this Agreement.

ARTICLE 9

TERM AND TERMINATION

9.1 Term and Expiration. This Agreement shall be binding on the Parties as of
the Effective Date. Thereafter, unless terminated earlier pursuant to
Section 9.2 below, this Agreement shall extend for one (1) year which may expire
on a country by country basis upon the earliest to occur of either (i) the
expiration of the Kinex Patent Rights or (ii) invalidation of the Kinex Patent
Rights (the “Agreement Term”) unless either Party gives written notice of its
intention not to extend the Agreement Term: (i) at least ninety (90) days prior
to the expiration date of the Kinex Patent Rights; or (ii) as soon as
practically possible in the case of an invalidation claim; and (iii) thereafter,
at least ninety (90) days prior to the then current annual expiration date of
the Agreement.

9.2 Early Termination of Agreement Term.

(a) This Agreement may be terminated upon mutual agreement of the Parties.

(b) Termination by XPH

XPH may terminate this Agreement in its sole discretion upon not less than six
(6) months prior written notice of termination provided anytime after the
Effective Date (provided, however, that no such termination shall be effective
until the completion of any then Ongoing Clinical Studies). The cost involved
during the six-months notice period plus any period needed for completion of any
Ongoing Clinical Studies will also be borne by XPH. In addition, if any
milestone is met XPH prior to the termination date, XPH will also be responsible
for the milestone payment.

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(c) Termination by Either Party.

Either Party may, without prejudice to any other remedies available to it under
this Agreement or at law or in equity, terminate this Agreement prior to
expiration of the Agreement Term in the event that the other Party (as used in
this subsection, the “Breaching Party”) shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
has not cured such breach within (i) thirty (30) days after notice of such
breach is provided to the Breaching Party in case the breach is a non-payment of
any amount due under this Agreement that is not being disputed in good faith or
Kinex’s failure to comply with 4.1 (both of which shall be deemed a material
breach of a material obligation) and (ii) sixty (60) days after notice of such
breach is provided to the Breaching Party for other cases of breach (or, if such
default cannot be cured within such 60-day period, if the Breaching Party does
not commence and diligently continue actions to cure such default during such
60-day period). The termination shall become effective at the end of the
(i) 30-day period in case the breach is a non-payment of any amount due under
this Agreement that is not being disputed in good faith or Kinex’s failure to
comply with 4.1 if the Breaching Party has not cured such breach by such date,
or (ii) for other cases of breach, 60-day period unless (a) the Breaching Party
cures such breach during such 60-day period, or (b) if such breach is not
susceptible to cure within such 60-day period, the Breaching Party has commenced
and is diligently pursuing a cure (unless such breach, by its nature, is
incurable, in which case the Agreement may not be terminated unless the
Breaching Party fails to use its best commercially reasonable efforts to prevent
a similar subsequent breach). The right of either Kinex or XPH to terminate this
Agreement as provided in this Section 9.2(c) shall not be affected in any way by
such Party’s waiver or failure to take action with respect to any previous
breach or default.

9.3 Effect of Expiration or Termination; Survival.

(a) Expiration or termination of this Agreement shall not relieve the Parties of
any obligation accruing prior to such expiration or termination, including all
accrued payment obligations arising under Article 4 hereof. In addition to any
other provisions of this Agreement which by their terms continue after the
expiration of this Agreement, the provisions of Article 4.2(h), 7.1(a), 8 and 10
shall survive the expiration or termination of this Agreement and shall continue
in effect after the date of expiration or termination unless otherwise expressly
indicated to the contrary in this Agreement. In addition, any other provisions
required interpreting and enforcing the Parties’ rights and obligations under
this Agreement shall also survive, but only to the extent required for the full
observation and performance of this Agreement. Any expiration or early
termination of this Agreement shall be without prejudice to the rights of any
Party against the other accrued or accruing under this Agreement prior to
termination. Except as expressly set forth herein, the rights to terminate as
set forth herein shall be in addition to all other rights and remedies available
under this Agreement, at law, or in equity, or otherwise.

(b) Payments of amounts owing to Kinex under this Agreement as of its expiration
or termination shall be due and payable either (i) to the extent such amounts
can be calculated and a fixed sum determined at the time of expiration or
termination of this Agreement, thirty (30) days after the date of such
expiration or termination, or (ii) to the extent such amounts cannot be
calculated and a fixed sum determined at the time of expiration or termination
of this Agreement, thirty (30) days after the date on which such amounts can be
calculated and a fixed sum determined.

(c) Subject to the payment of all amounts required hereunder, XPH and its
Affiliates and sublicensees shall have the right to sell or otherwise dispose of
the stock of any Licensed Product subject to this Agreement on hand or in
process of manufacture as of the expiration or termination of this Agreement.
Within thirty (30) days after the effective date of termination or expiration of
this Agreement, XPH shall notify Kinex of the amount of Licensed Product XPH,
its Affiliates and sublicensees then have on hand or in the process of
manufacture and shall have the right to sell in the Territory (except with
respect to any country in the Territory in which Licensed Product has been
withdrawn or there is no Regulatory Approval), its remaining stock of Licensed
Product for a period ending upon the earlier of: (i) XPH’s, its Affiliates’ and
sublicensees’ sale of all such remaining Licensed Product, or (ii) six
(6) months after such termination or expiration, and terms and conditions of
this Agreement shall apply to such Licensed Product so sold. Kinex hereby grants
a non-exclusive license under the Kinex Intellectual Property to XPH solely to
sell such Licensed Product in the Territory, subject to payment of all related
amounts due under this Agreement. Any remaining quantities of Licensed Product
not sold during this period shall, at Kinex’s election, either be destroyed by
XPH at XPH’s cost or sold to Kinex at XPH’s procurement cost for such Licensed
Product.

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(d) Upon the termination or expiration of this Agreement, the following shall
also be applicable: (i) at Kinex’s request, XPH shall promptly transfer and
return to Kinex copies of all Data, reports, records and materials in XPH’s
possession or control that relate to Compound or Licensed Products and return to
Kinex all relevant records and materials in XPH’s possession or control
containing Proprietary Information of Kinex (and provided however, Kinex shall,
upon such transfer, pay to XPH reasonable fee for transferring any Data,
reports, records and materials independently developed and discovered by XPH
employees, agents, or other persons acting under or pursuant to XPH’s authority,
which fee shall not be less than the out-of-pocket fee incurred by XPH in the
development and discovery of such Data, reports, records and materials; and
provided further that XPH may keep one copy of such Proprietary Information of
Kinex for archival purposes only); (ii) XPH shall transfer to Kinex any and all
INDs, Regulatory Approvals, Drug Approval Applications and any other regulatory
filings or submissions made or filed for Licensed Product by XPH or its
designees; and (iii) Kinex shall promptly return to XPH all relevant records and
materials in Kinex’s possession or control containing Proprietary Information of
XPH (provided that Kinex may keep one copy of such Proprietary Information of
XPH for archival purposes only).

ARTICLE 10

INDEMNIFICATION AND INSURANCE

10.1 Indemnity. For purposes of this Article 10, “Kinex Indemnified Parties”
refers to Kinex, its Affiliates and the officers, directors, employees,
shareholders, agents and successors and assigns of Kinex and its Affiliates, and
“XPH Indemnified Parties” refers to XPH, its Affiliates and officers, directors,
employees, shareholders, agents and successors and assigns of XPH and its
Affiliates.

10.2 XPH Indemnification. XPH shall defend the Kinex Indemnified Parties from
and against all suits, claims, actions, demands, complaints, lawsuits or other
proceedings, (collectively, “Claims”), that are brought by a Third Party, and
shall indemnify and hold harmless to the fullest extent permitted by law the
Kinex Indemnified Parties from and against any and all Losses, that arise out of
or are attributable to, (i) XPH’s negligence, recklessness or willful misconduct
in exercising or performing any of its rights or obligations under this
Agreement; or (ii) a material breach by XPH of any of its obligations,
representations, warranties or covenants under this Agreement; provided,
however, that XPH shall not be obligated under this Section 10.2, to the extent
it is shown by evidence acceptable in a court of law having jurisdiction over
the subject matter and meeting the appropriate degree of proof for such Claim
that the Claim arose out of the negligence or wrongdoing on the part of Kinex.

10.3 Kinex Indemnification. Kinex shall defend the XPH Indemnified Parties from
and against all Claims, in each case that are brought by a Third Party, and
shall indemnify and hold harmless to the fullest extent permitted by law the XPH
Indemnified Parties from and against any and all Losses that arise out of such
Claims that are attributable to, (i) Kinex’s negligence, recklessness or willful
misconduct in exercising or performing any of its rights or obligations under
this Agreement; or (ii) a material breach by Kinex of any of its obligations,
representations, warranties or covenants under this Agreement; provided,
however, that Kinex shall not be obligated under this Section 10.3, to the
extent it is shown by evidence acceptable in a court of law having jurisdiction
over the subject matter and meeting the appropriate degree of proof for such
Claim that the Claim arose out of the negligence or wrongdoing on the part of
XPH.

10.4 Indemnification Procedure.

(a) Each Party shall promptly notify the other Party in writing of any Claim.
Concurrent with the provision of notice pursuant to this Section 10.4(a), the
Indemnified Party shall provide to the other Party copies of any complaint,
summons, subpoena or other court filings or correspondence related to such Claim
and will give such other information with respect thereto as the other Party
shall reasonably request. The Indemnifying Party and Indemnified Party shall
meet to discuss how to respond to such Claim. Failure to provide prompt notice
shall not relieve any Party of the duty to defend or indemnify unless such
failure materially prejudices the defense of any matter. Each Party agrees that
it will take reasonable steps to minimize the burdens of the litigation on
witnesses and on the ongoing business of the Indemnified Parties including
making reasonable accommodations to witnesses’ schedules when possible and
seeking appropriate protective orders limiting the duration and/or location of
depositions.

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(b) Should either Party dispute that any Claim or portion of a Claim (“Disputed
Claim”) of which it receives notice pursuant to Section 10.4(a), is an
indemnified Claim, it shall so notify the other Party providing written notice
in sufficient time to permit such other Party to retain counsel and timely
appear, answer and/or move in any such action. In such event, such other Party
shall defend against such Claim; provided, however, that such other Party shall
not settle any Claim which it contends is an indemnified Claim without providing
the Indemnifying Party ten (10) Business Days’ notice prior to any such
settlement and an opportunity to assume the defense and indemnification of such
Claim pursuant to this Agreement. If it is determined that a Disputed Claim is
subject to indemnification, the Indemnifying Party will reimburse the costs and
expenses, including reasonable attorneys’ fees, of the Indemnified Party.

10.5 Settlement of Indemnified Claims. The Indemnifying Party under
Sections 10.2 or 10.3, as applicable, shall have the sole authority to settle
any Indemnified Claim without the consent of the other Party, provided, however,
that an Indemnifying Party shall not, without the written consent of the other
Party, as part of any settlement or compromise (i) admit to liability on the
part of the other Party; (ii) agree to an injunction against the other Party; or
(iii) settle any matter in a manner that separately apportions fault to the
other Party. The Parties further agree that as part of the settlement of any
Indemnified Claim, an Indemnifying Party shall obtain a full, complete and
unconditional release from the claimant on behalf of the Indemnified Parties.

10.6 Insurance.

(a) XPH shall, based on the operation necessity and the regulatory requirement
applicable including the appropriate liability and insurance policy in the
Territory, maintain in the Territory, commencing as of the Effective Date,
commercial general liability insurance (including coverage for product
liability, contractual liability, bodily injury, property damage and personal
injury), when such Clinical Studies are being conducted (the “Insurance”) If
such Insurance is written on a claims-made form, it shall continue for three
(3) years following the last sale of Licensed Product by XPH. The Insurance
shall have retroactive date to or coinciding with the Effective Date.
Notwithstanding the foregoing, XPH may satisfy the foregoing obligation with
respect to the Insurance through self-insurance.

(b) Such Insurance shall insure against all liability arising out of the
manufacture, use, sale, distribution, or marketing of Licensed Product in and
for the Territory. During the Agreement Term, XPH shall not permit such
Insurance to be reduced, expired, materially amended or canceled during the
period of the Insurance and/or the Agreement without reasonable prior written
notice that shall be sent by registered mail to Kinex. Upon request XPH shall
provide certificates of insurance to Kinex evidencing the coverage specified
herein.

(c) Except as expressly stated herein, a Party’s liability to the other is in no
way limited to the extent of the Party’s insurance coverage.

(d) The Insurance shall contain an explicit clause, stating that each Party and
its insurer waive their rights of subrogation against the other Party and its
directors, employees and/or any one on its behalf with respect to the Insurance.
Such waiver shall not apply in the event of a malicious act.

(e) The Insurance shall be primary to any other insurance maintained by each
Party and each Party hereby waives any claim or demand as to participation in
any such other insurance.

(f) The Insurance shall be valid in any location worldwide regarding the
activities performed by each Party hereunder (including worldwide jurisdictions)
for any destination or lawsuit which will be served against the other Party.

10.7 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT,
SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS, BUSINESS OR
GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES, WHETHER
BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY
OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT. THE FOREGOING
SENTENCE SHALL NOT LIMIT THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER
PARTY FROM AND AGAINST THIRD PARTY CLAIMS UNDER THIS ARTICLE

21

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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

 

ARTICLE 11

MISCELLANEOUS

11.1 Force Majeure. Neither Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached the Agreement for
failure or delay in fulfilling or performing any term of the Agreement during
the period of time when such failure or delay is caused by or results from
events beyond the reasonable control of a Party, including fire, flood,
earthquake, explosion, storm, blockage, embargo, war, acts of war (whether war
be declared or not), terrorism, insurrection, riot, civil commotion, strike,
lockout or other labor disturbance, failure of public utilities or common
carriers, act of God or act, omission or delay in acting by any governmental
authority or the other Party. The affected Party shall notify the other Party of
such force majeure circumstances as soon as reasonably practicable.

11.2 Assignment. The Agreement may not be assigned or otherwise transferred
without the prior written consent of the other Party; provided, however, that
either Party may assign this Agreement to an Affiliate or in connection with the
transfer or sale of its business or all or substantially all of its assets or in
the event of a merger, consolidation, change in control or similar corporate
transaction or, with respect to Kinex, the sale of all or substantially all its
rights in the Compound, without such consent; provided further, that such
assignment shall not relieve the Party of its responsibilities for performance
of its obligations under this Agreement. This Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the Parties.
Any assignment not in accordance with this Agreement shall be void.

11.3 Severability. In the event that any of the provisions contained in this
Agreement are held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affects the substantive rights of the
Parties. In such event, the Parties covenant and agree to renegotiate any such
term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid or unenforceable, it being
the intent of the Parties that the basic purposes of this Agreement are to be
effectuated.

11.4 Notices.

(a) Correspondence, reports, documentation, and any other communication in
writing between the Parties in the course of ordinary implementation of this
Agreement (but not including any notice required by this Agreement) shall be in
writing and delivered by hand, sent by email, or by overnight express mail
(e.g., FedEx) to any one (1) representative designated by the Party which is to
receive such written communication.

(b) Extraordinary notices and communications (including but not limited to
notices of termination, force majeure, material breach, change of address, or
any other notices required by this Agreement) shall be in writing and shall be
deemed to have been given when delivered in person, or sent by overnight courier
service (e.g., FedEx), postage prepaid, or by facsimile confirmed by prepaid
registered or certified air mail letter or by overnight express mail (e.g.,
FedEx), or sent by prepaid certified or registered air mail, return receipt
requested, to the following addresses of the Parties (or to such other address
or addresses as may be specified from time to time in a written notice), and
shall be deemed to have been properly served to the addressee upon receipt of
such written communication, to the following addresses of the Parties:

if to Kinex to:

KINEX PHARMACEUTICALS, LLC

701 Ellicott Street

Buffalo, New York 14203

USA

Attention: Chief Executive Officer

Fax No.: 716-849-6651

22

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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if to XPH to:

GUANGZHOU XIANGXUE NEW DRUG DISCOVERY AND

DEVELOPMENT COMPANY LIMITED

2 Jinfengyuan RoadGuangzhou,

CHINA 510663

Attention: CEO

Fax No.: 86-20-22211666

or to such other address as the Party to whom notice is to be given may have
furnished to the other Parties in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by facsimile on a Business Day, upon confirmed delivery by
nationally-recognized overnight courier if so delivered, and on the third
Business Day following the date of mailing if sent by registered or certified
mail.

11.5 Specific Performance. Each of the Parties acknowledges and agrees that the
other Party may suffer irreparable and continuing damage for which there is no
adequate remedy at law in the event of a breach or threatened breach of this
Agreement. Accordingly, and notwithstanding anything herein to the contrary,
each of the Parties agrees that the other Party shall be entitled to seek
injunctive relief to prevent breaches of the provisions of this Agreement,
and/or to enforce specifically this Agreement and the terms and provisions
hereof, in any action instituted in any court or tribunal having jurisdiction
over the Parties and the matter, without posting any bond or other security, and
that such injunctive relief shall be in addition to any other remedies to which
such Party may be entitled, at law or in equity.

11.6 Further Assurances. Each of the Parties shall take such further actions as
shall be necessary or desirable in order to effectuate the respective rights and
obligations hereunder.

11.7 Applicable Law, Venue and Dispute Resolution. This Agreement shall be
governed by the laws of the State of New York without regard to its conflict of
laws principles. The United Nations Convention on Contracts for the
International Sale of Goods shall not apply in any action, suit or proceeding
arising out of or relating to this Agreement. Except as provide in Section 11.5,
with regard to actions of specific performance, all disputes which arise in
connection with this Agreement and its interpretation shall be settled amicably
between the Parties. If the dispute cannot be settled in an amicable manner, it
will be settled by arbitration to be held in Hong Kong in conformity with
commercial arbitration rules of the International Chamber of Commerce. The award
rendered by arbitration shall be final and binding upon the Parties hereto.

11.8 Entire Agreement. This Agreement, including the exhibits and schedules
hereto, contains the entire understanding of the Parties with respect to the
subject matter. All express or implied agreements and understandings, either
oral or written, heretofore made, including any offering letters, letters of
intent, or term sheets, are expressly superseded by this Agreement. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by all Parties hereto.

11.9 Independent Contractors. It is expressly agreed that the Parties shall be
independent contractors and that the relationship between the Parties shall not
constitute a partnership, joint venture or agency. Neither Party shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other Party, without the prior
consent of such other Party.

11.10 Waiver. The waiver by a Party hereto of any right hereunder or the failure
to perform or of a breach by another Party shall not be deemed a waiver of any
other right hereunder or of any other breach or failure by said other Party
whether of a similar nature or otherwise.

11.11 Headings; References. The captions to the several Articles and Sections
hereof are not a part of the Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections hereof. Any
reference in this Agreement to an Article, Exhibit, Schedule or Section shall,
unless otherwise specifically provided, be to an Article, Exhibit, Schedule or
Section of this Agreement. The words “including”, “includes” and “such as” are
used in their non-limiting sense and have the same meaning as “including without
limitation” and “including but not limited to.” “Hereunder” and “hereto” means
under or pursuant to any provision of this Agreement.

23

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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

 

11.12 Interpretation. Both Parties have had the opportunity to have this
Agreement reviewed by an attorney; therefore, neither this Agreement nor any
provision hereof shall be construed against the drafter of this Agreement.

11.13 Counterparts. The Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. Signatures to the Agreement transmitted
by fax, by email in “portable document format” (“pdf”) or by any other
electronic means intended to preserve the original graphic and pictorial
appearance of the Agreement shall have the same effect as physical delivery of
the paper document bearing an original signature.

11.14 No Third Party Beneficiaries. Except as specifically set forth herein,
none of the provisions of this Agreement shall be for the benefit of or
enforceable by any Third Party, including any creditor of either Party hereto.
No such Third Party shall obtain any right under any provision of this Agreement
or shall by reasons of any such provision make any claim in respect of any debt,
liability or obligation (or otherwise) against either Party hereto.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.

 

 

 

 

KINEX PHARMACEUTICALS, LLC

 

 

By:

 

 /s/ Johnson YN Lau

Name:

 

Johnson YN Lau, MBBS, MD, FRCP

Title:

 

Chairman and CEO

 

GUANGZHOU XIANGXUE NEW DRUG DISCOVERY

 

AND DEVELOPMENT COMPANY LIMITED

 

 

By:

 

 /s/ YongHui Wang

Name:

 

YongHui Wang

Title:

 

Chairman

 

 

 

24

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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SCHEDULE 1.1         DIAGRAM OF COMPOUND

SCHEDULE 1.2         KINEX PATENT RIGHTS

 

 

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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SCHEDULE 1.1

DIAGRAM OF COMPOUND

***

***

 

 

 

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Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.

 

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SCHEDULE 1.2

PATENT RIGHTS

Kinex Patent Chart KX02

(March 21, 2012)

(1a) 28856-503 (Composition of Matter & Use)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Country

Code

 

Country

 

Status

 

Application

No.

 

Application

Data

 

National

Entry

Data

 

Related

WIPO

Publication

No.

 

Comments

 

Expected

Expiration

Date

***

 

***

 

***

 

***

 

***

 

***

 

***

 

***

 

***

***

 

***

 

***

 

***

 

***

 

***

 

 

 

***

 

***

***

 

***

 

***

 

***

 

***

 

***

 

 

 

***

 

***

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

(1b) 28856-503CIP (Composition of Matter & Use)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Country

Code

 

Country

 

Status

 

Application

No.

 

Application

Data

 

National

Entry

Data

 

Related

WIPO

Publication

No.

 

Comments

 

Expected

Expiration

Date

***

 

***

 

***

 

***

 

***

 

***

 

***

 

***

 

***

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

***

 

***

 

***

 

***

 

***

 

***

 

 

 

***

 

***

(1c) 28856-503003 (Use)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Country

Code

 

Country

 

Status

 

Application

No.

 

Application

Data

 

National

Entry

Data

 

Related

WIPO

Publication

No.

 

Comments

 

Expected

Expiration

Date

***

 

***

 

***

 

 

 

 

 

 

 

***

 

***

 

 

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

(1c) 28856-516 (Dosage of KX02 and immunoprotection)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Country

Code

 

Country

 

Status

 

Application

No.

 

Application

Data

 

National

Entry

Data

 

Related

WIPO

Publication

No.

 

Comments

 

Expected

Expiration

Date

***

 

***

 

***

 

 

 

 

 

***

 

***

 

***

 

***

***

 

***

 

***

 

 

 

 

 

***

 

 

 

 

 

***

***

 

***

 

***

 

 

 

 

 

***

 

 

 

 

 

***

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*** =

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment. An unredacted version of this exhibit has been filed
separately with the Commission.