[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

Exhibit 10.2

CONFIDENTIAL

AMENDED & RESTATED EXCLUSIVE LICENSE AGREEMENT

THIS AMENDED & RESTATED EXCLUSIVE LICENSE AGREEMENT (“Agreement”) is entered
into this 13th day of May 2015 (“Effective Date”) by and between CEDARS-SINAI
MEDICAL CENTER, a California nonprofit public benefit corporation (“CSMC”), with
offices at 8700 Beverly Boulevard, Los Angeles, California 90048-1865, and
ImmunoCellular Therapeutics, Ltd., a Delaware limited liability company
(“Licensee”), with offices at 23622 Calabasas Road, Suite 300, Calabasas, CA
91302.

R E C I T A L S

A.CSMC owns Patent Rights and Technical Information (as defined below) invented
or developed in the course of certain research into the diagnosis of diseases
and disorders in humans and the prevention and treatment of disorders in humans
utilizing cellular therapies, including dendritic cell-based vaccines for brain
tumors and other cancers and neurodegenerative disorders at CSMC conducted under
the direction of Dr. John Yu (Dr. Yu, hereinafter, “Inventor”; the research,
hereinafter, “Research Project”).

B.CSMC and Licensee entered into that certain Exclusive License Agreement dated
November 17, 2006, as amended by the First Amendment dated June 16, 2008, the
Second Amendment dated August 1, 2009 and the Third Amendment dated March 26,
2010 (as amended, the “Original License Agreement.”)  Pursuant to the Original
License Agreement, CSMC granted to Licensee an exclusive, worldwide license to
conduct research in the Field of Use, and to develop, manufacture, use and sell
Products (as defined below) in the Field of Use, using the Patent Rights and
Technical Information.  

C.CSMC and Licensee wish to amend and restate the terms of the Original License
Agreement on the terms and subject to the conditions set forth in this
Agreement.

D.CSMC and Licensee intend that the execution, delivery and performance of this
Agreement by each party, and the consummation of the transactions contemplated
hereunder, shall not at any time threaten CSMC’s tax-exempt status under
Section 501(c)(3) of the Internal Revenue Code and Section 23701d of the
California Revenue and Taxation Code, or cause CSMC to be in default under any
of CSMC’s issued and outstanding tax-exempt bonds.

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

 

 

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1.

DEFINITIONS

1.1“Affiliate” or “Affiliates” shall mean any corporation, person or entity,
which controls, is controlled by, or is under common control with, a party to
this Agreement without regard to stock or other equity ownership.  For purposes
hereof, the terms “control” and “controls” mean the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a corporation, person or entity, whether through the ownership of
voting securities, by contract or otherwise.

1.2“Confidential Information” shall mean any confidential or proprietary
information furnished by one party (the “Disclosing Party”) to the other party
(the “Receiving Party”) in connection with this Agreement, including, without
limitation, all specifications, know how, trade secrets, technical information,
drawings, software, models, business information and patent applications
pertaining to the Patent Rights and Technical Information, and as further
provided in Section 10 hereof.  Without limitating the foregoing, Licensee’s
Confidential Information includes without limitation any and all progress
reports made hereunder, sublicense agreements, any reports or other information
regarding Sales and Gross Sales of Products and Royalties (whether from Licensee
or its Permitted Sublicensee), Sublicense Income and audits and audit reports of
Licensee and its Permitted Sublicensees.

1.3“FDA” shall mean the United States Food and Drug Administration, or any
successor agency thereof.

1.4“Field of Use” shall mean cellular therapies or diagnostics utilizing
cellular therapies, including dendritic cell-based vaccines for cancer.

1.5“Funding Agencies” shall mean any public or private granting agencies which
have provided funding to CSMC or to any of the inventors named on the Patent
Rights for the development of any of the Patent Rights or Technical Information
prior to the Effective Date.

1.6“CSMC Improvements” shall mean all improvements or enhancements to the Patent
Rights that, after the Effective Date, are conceived and reduced to practice if
patentable, or reduced to practice if not patentable, by the Inventor (except in
the case of Dr. John Yu working in his capacity as Licensee’s Chief Scientific
Officer and without using any facilities, resources or personnel of CSMC).

1.7“Invention” shall mean all unpatented, patentable and patented inventions,
discoveries, designs, apparatuses, systems, machines, methods, processes, uses,
devices, models, composition of matter, technical information, trade secrets,
know-how, codes, programs or configurations of any kind which are in the Field
of Use.

1.8“Licensee Developments” shall mean any and all processes, uses, designs,
applications, methods and compositions-of-matter, indications, improvements,
enhancements and modifications in the Field of Use directly based upon or
directly created using the Patent Rights and/or Technical Information and which
were discovered or developed by or on behalf of Licensee (exclusive of work
performed by CSMC or the Inventor, except in the case of Dr. John

- 2 –

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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Yu working in his capacity as Licensee’s Chief Scientific Officer and without
using any facilities, resources or personnel of CSMC) during the term of this
Agreement.

1.9“Patent Rights” shall mean the patents and/or patent applications existing on
the Effective Date which are described on Schedule A attached hereto, and all
patents and/or patent applications (including provisional patent applications)
existing as of the Effective Date in any other country corresponding to any of
the foregoing, and all divisions, continuations, reissues, reexaminations,
supplementary protection certificates and extensions thereof, whether domestic
or foreign, all claims of continuations-in-part that are entitled to the benefit
of the priority date of any of the foregoing, and any patent that issues
thereon, excluding any Licensee Developments or Inventions by Dr. John Yu
working in his capacity as Licensee’s Chief Scientific Officer and without using
any facilities, resources or personnel of CSMC.  The Patent Rights are all owned
by CSMC.

1.10“Product” or “Products” shall mean any products and/or services in the Field
of Use utilizing or derived in any manner whatsoever from any of the Patent
Rights, Technical Information or Licensee Developments, which Products, except
for the license granted hereunder, would infringe a Valid Claim.  As of the
Effective Date, Licensee is developing three (3) Products: ICT-107, ICT-121 and
ICT-140. All references to “Products” in this Agreement shall be deemed to
include the ICT-140 Product, as such term is defined in subsection 1(b) of
Schedule F hereto.

1.11“Technical Information” shall mean, as of the Effective Date, the following
information in the Field of Use which is described in the Patent Rights or
otherwise provided to Licensee:  Know-how, trade secrets, unpublished patent
applications, software, bioinformatics, unpatented technology, technical
information, statistical information and analyses, biological materials,
chemical reagents, preclinical and clinical information, in each case which has
been conceived or reduced to practice prior to the Effective Date, in the
conduct of the Research Project at CSMC under the direction of the
Inventor.  The Technical Information shall further include information in the
Field of Use described in Schedule B hereto which is embodied in the Patent
Rights and which has been reduced to practice prior to the Effective Date in the
conduct of the aforementioned research programs at CSMC under the direction of
the Inventor.  Technical Information is all owned by CSMC.

1.12“Territory” shall mean the entire world.

1.13“Valid Claim” shall mean a claim of a pending patent application or an
issued patent included within the Patent Rights or CSMC Improvements licensed to
Licensee, which claim has not (a) been pending for longer than seven (7) years
after the actual filing date of the patent application, (b) lapsed, been
canceled or become abandoned, (c) been declared invalid or unenforceable by a
non-appealable decision or judgment of a court or other appropriate body or
authority of competent jurisdiction, or (d) been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise.  

- 3 –

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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2.

LICENSE

2.1Grant of Exclusive Rights.  Subject to the terms of this Agreement, CSMC
hereby grants to Licensee, and Licensee hereby accepts from CSMC, the exclusive,
worldwide license, with the right to grant sublicenses (subject to the terms of
Section 2.2 hereof), during the term of this Agreement (as provided in Section 6
hereof) to conduct research in the Field of Use using the Patent Rights and the
Technical Information and to develop, use, make, have made, practice, import,
carry out, manufacture, have manufactured, offer for sale, sell and/or have sold
Products in the Field of Use in the Territory using the Patent Rights and the
Technical Information.  The foregoing grant of exclusivity is made expressly
subject to the following:

(a)All applicable laws and regulations, including, without limitation, the
requirements of federal law as pertains to the manufacture of products within
the United States;

(b)All applicable rules of the Funding Agencies which have provided funding to
CSMC or to any of its employees (including any of the inventors named on the
Patent Rights) for the development of the Patent Rights and Technical
Information; and

(c)The following non-exclusive rights to the Patent Rights and Technical
Information, which are retained by CSMC within the Field of Use:

(i)Subject to Licensee’s right to prior review to determine the patentability
thereof (which shall expire forty-five (45) days after Licensee’s receipt
thereof), the right to submit for publication the scientific findings from
research conducted by or through CSMC or its investigators (including the
Inventor) related to the Patent Rights and the Technical Information; and
provided further that if Licensee determines to file a patent application,
Licensee shall have a further thirty (30) day period thereafter to do so, and
CSMC shall delay any publication with respect thereto for that period.

(ii)the right (A) to use any tangible or intangible information contained in the
Patent Rights, the Technical Information or any CSMC Improvements (so long as
CSMC shall treat such information as Confidential Information and maintain its
confidentiality in accordance with Section 10 hereof), for CSMC’s research,
internal teaching and other educationally-related and non-commercial (except for
charges to its own patients) clinical purposes, where clinical use does not
involve a third party funding grant to commercialize such information, and (B)
to obtain research funding for further study and development thereof from
governmental and other nonprofit organizations (including grant applications).

(d)Except as provided by Section 2.3 hereof, CSMC shall not, under any
circumstances, grant and/or transfer any rights retained by CSMC under
Section 2.1(c) to any third party (other than to Licensee or, where required by
applicable law, rule, regulation, governmental policy or contract, to any
Funding Agency or the United States Government) to commercialize Inventions or
information related thereto derived directly from the Patent Rights or the
Technical Information in the Field of Use as a result of CSMC’s teaching and
internal

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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research and clinical activities with respect to the Patent Rights and Technical
Information otherwise permitted by Section 2.1(c)(ii) above.

(e)Notwithstanding any other provision hereof to the contrary, all rights to the
Patent Rights, Technical Information and CSMC Improvements outside of the Field
of Use are retained by CSMC. Furthermore, this Agreement confers no license or
rights by implication, estoppel, or otherwise under any patent applications or
patents of CSMC other than Patent Rights regardless of whether such patents are
dominant or subordinate to Patent Rights.

(f)The grant of exclusive rights hereunder is made expressly subject to any
non-exclusive license and any option granted by CSMC to the Torrey Pines
Institute of Molecular Studies (“TPIMS”) per the specific contractual
requirements of the April 4, 2006 Material Transfer Agreement (“TPIMS MTA”)
between CSMC and TPIMS.  CSMC has been informed by the Inventor that the
individual peptides included in the Materials (as defined in the TPIMS MTA)
consist solely of superagonist peptides that are epitopes of gp100 and HER-2
whose sequences are defined in Schedule C.  CSMC and Licensee acknowledge that
(a) to date, they have not been able to reacquire the rights of CSMC licensed to
TPIMS and any option granted to TPIMS pursuant to the specific contractual
requirements of the TPIMS MTA, and (ii) CSMC has re-initiated its efforts to
find a reasonable resolution of the issue with TPIMS.

2.2Right to Sublicense or Assign Rights.  Licensee shall have the right to grant
sublicenses or to assign any or all of the rights granted hereunder to (a) an
Affiliate; (b) a biopharmaceutical, pharmaceutical or bio-diagnostic company
which is generally recognized in such industries and which, at the time of the
sublicense, has a market capitalization of at least $100,000,000; and/or (c) a
party which has been approved by CSMC in writing, if such party has a market
capitalization of less than $100,000,000 at the time of the sublicense,  such
approval not to be unreasonably withheld (each, a “Permitted
Sublicensee”).  Licensee shall submit a written request for approval to CSMC’s
Technology Transfer Office by electronic mail at CSTechTransfer@cshs.org and by
courier or overnight mail at the following address: 8727 W. Third Street, Suite
#203, Los Angeles, CA 90048, and CSMC shall advise Licensee of its decision and
of the reason for its decision within thirty (30) days of receiving the request
from Licensee.  Any such Permitted Sublicensee shall be subject in all respects
to the provisions contained in this Agreement and Licensee will remain primarily
liable to CSMC for, and shall be responsible for monitoring and enforcing,
performance of all of Licensee’s obligations hereunder by any such Permitted
Sublicensee.  Without limiting the generality of the foregoing, as an express
condition of any such sublicense, any such Permitted Sublicensee shall be
required to agree in writing to be bound by commercially reasonable reporting
and record keeping, indemnification and inspection provisions, and the
applicable provisions of this Agreement, including, without limitation, those
pertaining to the use of CSMC’s name and marks, indemnification of CSMC and the
use of CSMC’s Confidential Information.  Permitted Sublicensees shall have the
right to further sublicense only to parties that meet the criteria set forth in
the first sentence of this Section 2.2.  Licensee shall promptly forward to CSMC
a copy of any and all fully executed sublicense agreements, any subsequent
amendments, and all copies of Permitted Sublicensees’ royalty reports, in no
event more than thirty (30) days following execution or receipt thereof, as
applicable provided that Licensee may redact sensitive

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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confidential information that is not directly related to Licensee’s obligations
to CSMC hereunder.  Licensee shall also keep CSMC reasonably informed with
respect to the progress of any relations entered into with any Permitted
Sublicensees.  If Licensee shall conduct one or more audits of its Permitted
Sublicensees hereunder during the term hereof, Licensee shall provide copies of
all audit reports to CSMC on a timely basis.  Licensee understands and agrees
that none of its permitted sublicenses hereunder shall reduce in any manner any
of its obligations set forth in this Agreement.  

2.3CSMC Improvements.  Subject to the rights and applicable rules of the Funding
Agencies, Licensee shall have, for a period of sixty (60) days after receipt by
Licensee of written notice from CSMC disclosing a CSMC Improvement, the
exclusive first right to negotiate with CSMC to obtain one or more licenses to
the CSMC Improvement in the Field of Use upon such terms and conditions as shall
be agreed by the parties hereto, which terms and conditions shall include
provisions for fair market value consideration for the grant of any such
licenses.  If Licensee declines or fails to pursue, or if the parties fail to
conclude negotiations for a license to, such CSMC Improvement in the Field of
Use during the sixty (60) day period specified above, then CSMC shall have the
right to commence discussions with any other party concerning such CSMC
Improvement.  Subject to the provisions of this Section 2.3, Licensee
acknowledges and agrees that CSMC expressly retains and reserves any and all
right, title and interest in and to the CSMC Improvement, whether or not in the
Field of Use and, accordingly, no license to any CSMC Improvement is granted to
Licensee under this Agreement.  

2.4Licensee Developments. Licensee hereby grants to CSMC the following
nonexclusive, royalty free, fully paid up rights and licenses to the Licensee
Developments:

(a)Subject to Licensee’s right to prior review to determine the patentability
thereof within forty-five (45) days following receipt by Licensee, the right and
license to publish the scientific findings from research conducted by or through
Licensee or on its behalf by CSMC or the Inventor related to the Licensee
Developments; and provided further that if Licensee determines to file a patent
application, Licensee shall have a further thirty (30) day period thereafter to
do so and CSMC’s right and license shall be delayed until completion of that
period.

(b)Except as provided below in this Section 2.4, the right (A) to use any
tangible or intangible information contained in the Licensee Developments (so
long as CSMC shall treat such information as Confidential Information and
maintain its confidentiality in accordance with Section 10 hereof), for CSMC’s
research, internal teaching and other educationally-related and non-commercial
(except for charges to its own patients) clinical purposes, where clinical use
does not involve a third party funding grant to commercialize such information,
and (B) to obtain research funding for further study and development thereof
from governmental and other nonprofit organizations (including grant
applications).

Except as provided in Section 2.3 hereof, CSMC shall not, under any
circumstances, grant and/or transfer any rights granted to CSMC under this
Section 2.4 to any third party (other than to Licensee or, where required by
applicable law, rule, regulation, governmental policy or contract, to any
Funding Agency or the United States Government) to commercialize Inventions in
the Field of Use resulting directly from the Licensee Developments as a result
of CSMC’s

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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internal research and clinical activities with respect to the Licensee
Developments otherwise permitted by Section 2.4(b) above.

2.5Milestones.  Licensee acknowledges that it is important to CSMC, and a
requirement of the United States Government under Title 35, Section 203 of the
United States Code, that Licensee pursue the development, commercialization and
marketing of Products and otherwise exercise commercially reasonable efforts to
maximize the value of this Agreement to CSMC.  CSMC and Licensee have agreed on
the Milestones set forth on Schedule D, with each such Milestone being deemed a
separate and independent condition.  Licensee represents and warrants to CSMC
that as of the Effective Date, Licensee has met all of the Milestones required
under the Original License Agreement, other than the Milestones set forth in
Schedule D to this Agreement.  Within sixty (60) days after each anniversary of
the Effective Date, Licensee shall prepare and deliver to CSMC an annual written
report (to be certified by an executive officer of Licensee) that provides an
overview of Licensee’s progress towards achieving each Milestone and its other
efforts with respect to the ongoing development, commercialization, and
marketing of the Products.  If Licensee believes that it is or will be unable to
achieve such Milestones despite its diligent efforts, Licensee may request
amendments or reasonable extensions to Schedule D in writing for CSMC’s
consideration. Licensee agrees to provide any additional information reasonably
required by CSMC to evaluate Licensee’s performance under this Agreement.  If
Licensee fails to meet any annual Milestone designated in Schedule D hereto, and
has not obtained an extension or amendment to such Milestone(s), CSMC may, at
its option and as its sole remedy for Licensee’ breach of this Section 2.5, upon
written notice to Licensee, convert the exclusive license granted under Section
2.1 hereof to a non-exclusive license or to a co-exclusive license, or terminate
the license.

2.6Rights in Bankruptcy.  All rights and licenses granted under or pursuant to
this Agreement by CSMC to Licensee are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code and other similar
international laws, licenses of rights to “intellectual property” as defined in
Section 101 of the U.S. Bankruptcy Code or such international laws.  CSMC agrees
that Licensee, as a licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code and other similar international laws.  CSMC further agrees that, in the
event of the commencement of a bankruptcy proceeding by or against CSMC under
the U.S. Bankruptcy Code, Licensee shall be entitled to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and the same, if not already in
Licensee’s possession, shall be promptly delivered to it (i) upon any such
commencement of a bankruptcy proceeding upon its written request therefore,
unless CSMC elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of CSMC upon written request therefore by Licensee.

3.

REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties of CSMC.  Except for the rights, if any, of
the Funding Agencies or the United States Government, CSMC represents and
warrants to Licensee

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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that, to the best of its actual, current knowledge (without investigation
outside of CSMC as to such representations and warranties) (a) it has the right
to grant the licenses in this Agreement, (b) except for the rights granted by
CSMC to TPIMS pursuant to the TPIMS MTA and the license described in Section
2.1(f), it has not granted licenses to the Patent Rights or Technical
Information to any other party that would restrict the rights granted hereunder
except as stated herein, (c) there are no claims, judgments or settlements to be
paid by CSMC with respect the Patent Rights or Technical Information or pending
claims or litigation relating to the Patent Rights or Technical Information,
(d) it is the sole owner of the Patent Rights and Technical Information, other
than the Patent Rights described in item VIII on Schedule A hereto, which are
jointly owned by CSMC and Licensee, (e) the patents and patent applications in
the Patent Rights have been applied for, and (f) it has not received notice from
any third party that the Patent Rights or Technical Information infringes the
proprietary rights of any third party.  Except for any potential or actual
rights of Funding Agencies or the United States Government and the rights of
TPIMS under the TPIMS MTA and the license described in Section 2.1(f), CSMC is
not aware that any additional rights or licenses are necessary for Licensee to
exercise its licensed rights granted by CSMC under this Agreement.

3.2Representations and Warranties of Licensee.  Licensee represents and warrants
to CSMC that (a) Licensee is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, is qualified to do
business in the State of California and has the corporate power and authority to
enter into this Agreement and to perform its obligations hereunder; (b) the
execution and delivery of this Agreement by Licensee and the performance by
Licensee of its obligations hereunder have been duly authorized by all necessary
corporate action; (c) this Agreement constitutes the legal, valid and binding
obligation of Licensee, enforceable against Licensee in accordance with its
terms; (d) neither the execution or delivery of this Agreement by Licensee, nor
the performance by Licensee of its obligations hereunder, (i) requires the
consent or approval of any third party, except the directors of Licensee, which
consent has been obtained; (ii) shall constitute a default under any material
contract by which Licensee or any of its material assets is bound (or any event
which, with notice or lapse of time, or both, would constitute such a default);
or (iii) shall constitute a violation of any judgment, order or decree of any
court, arbitrator, governmental agency or authority binding upon Licensee; (e)
to the best of Licensee’s actual, current knowledge (without investigation
outside of Licensee as to such representations and warranties), Licensee has not
granted, and will not grant, licenses to the Patent Rights to any third party
that would conflict with or otherwise compromise the rights reserved by CSMC
hereunder; and (f) as of the Effective Date, ICT-140 does not infringe a Valid
Claim of the Patent Rights.

3.3Limited Warranty; Certain Damages.  

(a)Limited Warranty.  CSMC makes no representation or warranty other than those
expressly specified in this Agreement.  Licensee accepts the Patent Rights and
the Technical Information on an “AS-IS” basis.  CSMC MAKES NO OTHER WARRANTIES
CONCERNING PATENT RIGHTS OR TECHNICAL INFORMATION COVERED BY THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE AS

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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TO PATENT RIGHTS, TECHNICAL INFORMATION OR ANY PRODUCT.  CSMC MAKES NO WARRANTY
OR REPRESENTATION AS TO THE VALIDITY OR SCOPE OF PATENT RIGHTS, OR THAT ANY
PRODUCT WILL BE FREE FROM AN INFRINGEMENT ON PATENTS OR OTHER INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY
INFRINGING PATENT RIGHTS COVERED BY THIS AGREEMENT. LICENSEE HEREBY AGREES THAT
LICENSEE WILL NOT GIVE, AND SHALL NOT PERMIT ANY PERMITTED SUBLICENSEES OR
AFFILIATES THEREOF TO GIVE, ANY SUCH WARRANTY OR REPRESENTATION TO THIRD PARTIES
ON BEHALF OF CSMC.

(b)Certain Damages.  EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN
SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN
SECTION 8, IN NO EVENT SHALL CSMC BE LIABLE FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
PROFITS OR EXPECTED SAVINGS OR OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS
OR PROPERTY) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT
MATTER, REGARDLESS OF WHETHER CSMC KNOWS OR SHOULD KNOW OF THE POSSIBILITY OF
SUCH DAMAGES.  EXCEPT FOR THE BREACH OF THE CONFIDENTIALITY PROVISIONS IN
SECTION 10 OR IN ACCORDANCE WITH THE OBLIGATION TO INDEMNIFY SET FORTH IN
SECTION 8, CSMC’S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO
THIS AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY
LICENSEE TO CSMC UNDER THIS AGREEMENT.  THE FOREGOING EXCLUSIONS AND LIMITATIONS
SHALL APPLY TO ALL CLAIMS AND ACTIONS OF ANY KIND, WHETHER BASED ON CONTRACT,
TORT (INCLUDING, BUT NOT LIMITED TO NEGLIGENCE), OR ANY OTHER GROUNDS.

3.4Rights Retained by Funding Agencies.  Licensee acknowledges that to the
extent that the Patent Rights and Technical Information have been developed in
part under one or more funding agreements (“Funding Agreements”) with one or
more Funding Agencies, such Funding Agencies have certain statutory,
non-exclusive rights relative thereto for use for government purposes as well as
regulatory or statutory “march-in rights” (collectively, “Statutory
Rights”).  Licensee also acknowledges that to the extent that the CSMC
Improvements may be developed in part under one or more Funding Agreements with
one or more Funding Agencies, such Funding Agencies may have certain Statutory
Rights relative thereto.  This Agreement is explicitly made subject to such
Statutory Rights and, to the extent of any conflict between any such Statutory
Rights and this Agreement, such Statutory Rights shall prevail.

4.

CONSIDERATION

In consideration of the execution and delivery by CSMC of this Agreement,
Licensee agrees as follows:

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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4.1Issuance of Stock; License Fee.  The parties acknowledge and agree that in
accordance with the Original License Agreement, Licensee (a) issued and sold to
CSMC shares of the voting common stock of Licensee (the “Shares”) described in
the Stock Purchase Agreement dated November 17, 2006 between Licensee and CSMC,
a copy of which is attached as Schedule E hereto; and (b) paid to CSMC a
non-refundable license fee in the amount of Sixty Two Thousand Dollars
($62,000).  

4.2Milestone Payments.  Licensee agrees to pay and shall pay to CSMC the
following one time only non-creditable, non-refundable milestone payments (each,
a “Milestone Payment”):

(a)Within thirty (30) days of the first patient dosing in a Phase III clinical
trial for the ICT-107 Product, Licensee shall pay CSMC a Milestone Payment in
the amount of [*].  

(b)Within thirty (30) days of the first commercial sale of the ICT-107 Product,
Licensee shall pay CSMC a Milestone Payment of [*].

(c)Within thirty (30) days of Licensee’s confirmation that total, aggregate
Gross Sales of all Products have exceeded [*], Licensee shall pay CSMC a
Milestone Payment of [*].

(d)Within thirty (30) days of Licensee’s confirmation that total, aggregate
Gross Sales of ICT-107 Products have exceeded [*], Licensee shall pay CSMC a
Milestone Payment of [*].

(e)Within thirty (30) days of receiving the first FDA marketing approval or
foreign equivalent for the ICT-121 Product, Licensee shall pay CSMC a Milestone
Payment in the amount of [*].  

(f)Within thirty (30) days of receiving the first FDA marketing approval or
foreign equivalent for the ICT-140 Product, Licensee shall pay CSMC a Milestone
Payment in the amount of [*].  

4.3Payment of Royalties.  Licensee shall pay to CSMC certain royalties, which
shall be determined and paid in accordance with Schedule F hereto.

4.4Value of License Consideration.  CSMC acknowledges and agrees that the
royalties and other obligations of Licensee under this Agreement constitute fair
market value for the rights granted to Licensee under this Agreement based on
arms’-length negotiations with Licensee and an independent evaluation made by
CSMC’s outside expert(s).

4.5Licensee Challenge of Patent Rights.  Should Licensee bring, directly or
through a third party indirectly, an action challenging the validity, scope or
enforceability of any Patent Rights, Licensee will first provide CSMC with at
least ninety (90) days’ prior written notice that it intends to do so before
filing such a challenge.  Following the giving of such notice,

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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Licensee will pay to CSMC the Royalties and Sublicense Fees due hereunder during
the pendency of such action.  Additionally, Licensee agrees to reimburse CSMC
for all costs actually incurred by CSMC in connection with the applicable legal
proceedings. Should the outcome of such action determine that any claim of a
patent challenged by Licensee is valid, infringed and enforceable, Licensee will
thereafter pay to CSMC the Royalties and Sublicense Fees due hereunder at the
rate of two (2) times the applicable rate for all Products sold that would
infringe such claim.  Such increased royalty reflects the increased value of the
Patent Rights upheld in such action.  In the event that a challenge of Licensed
Patents brought by Licensee is partially or entirely successful, Licensee will
have no right to recoup any Royalties or other amounts paid before or during the
period of the challenge.    

5.

PATENT RIGHTS

5.1Prosecution.  The parties acknowledge and agree that in accordance with the
Original License Agreement, Licensee has assumed full responsibility for the
application, maintenance, reexamination, reissue, opposition and prosecution of
any kind (collectively “Prosecution”) relating to the Patent Rights in the
Territory.  Licensee shall continue to diligently pursue the Prosecution of the
Patent Rights for the benefit of CSMC, using counsel approved by CSMC, at
Licensee’s sole expense.  For all purposes of the patent Prosecution, CSMC shall
be named the “client” of such patent counsel.  Each party shall provide the
other with copies of any and all material or communications with the United
States Patent and Trademark Office, or any foreign patent office, and CSMC shall
be afforded the opportunity of prior review and comment on such action or paper.

5.2Abandonment, Disclaimers, etc.  Licensee shall obtain the prior written
consent of CSMC (which consent shall not be unreasonably withheld), prior to
abandoning, disclaiming, withdrawing, seeking reissue, seeking reexamination or
allowing to lapse any patent or patent application within the Patent Rights.  In
the event that Licensee shall elect to abandon the Prosecution (including the
payment of maintenance fees or annuities) of any patent or patent application
included in the Patent Rights, Licensee shall notify CSMC of such election at
least forty-five (45) days before a final due date which would result in
abandonment or bar of patentability of the patent or patent application.  In
such event, CSMC may, at its sole option and expense, continue Prosecution of
the patent application or patent.  Licensee further agrees that it shall not
file any continuation-in-part application relating to the Patent Rights unless
the additional disclosure or material to be included in the continuation-in-part
application is necessary or appropriate to support the patentability of a claim
recited in a parent application on which the continuation-in-part application is
based.  Prior to filing any continuation-in-part application, Licensee shall
consult with CSMC to discuss the need for filing such an application.  If CSMC
shall disagree with Licensee’s conclusion that such a continuation-in-part
application is either necessary or appropriate to support the patentability of a
claim recited or capable of being recited in a patent application, then the
matter shall be submitted for resolution to independent patent counsel mutually
agreed upon by the parties, who will determine whether a continuation-in-part
application is necessary or appropriate in accordance with this
Section 5.2.  Any decision made by such independent patent counsel shall be
conclusive and binding on the parties hereto.

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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5.3Expenses.  Licensee shall pay all expenses resulting from its obligations in
Section 5.1 hereof.  CSMC shall exercise reasonable efforts to cause the
Inventor (to the extent he is available and on CSMC’s staff as an employee) to
cooperate fully with Licensee with respect to the Prosecution of the Patent
Rights, and CSMC shall be reimbursed for all reasonable out‑of‑pocket expenses
as such expenses are incurred.

5.4CREATE Act.  Licensee shall not invoke the Cooperative Research and
Technology Enhancement Act of 2004, as set forth under Title 35, Section 102(c)
of the United States Code (the “CREATE Act”), with respect to the Patent Rights
without first obtaining the prior written consent of CSMC.  

6.

TERM AND TERMINATION

6.1Term.  Unless earlier terminated as provided in Section 2.5 or 6.2 hereof,
the term of this Agreement shall commence on the Effective Date and shall
expire, on a country-by-country basis, on the date upon which the last to expire
of a Valid Claim within the Patent Rights in each such country shall expire.  

6.2Termination.  Except as provided by Section 6.3 hereof, and in addition to
the termination provisions of Section 2.5, this Agreement shall terminate upon
the earliest to occur of the following:

(a)Automatically if Licensee shall enter into a liquidating bankruptcy, be
adjudged insolvent, liquidate, dissolve and/or if the business of Licensee shall
be placed in the hands of a receiver, assignee, or trustee, whether by voluntary
act of Licensee or otherwise; provided, however, that if any such action is
involuntary, termination shall not take place unless the action is not reversed
within thirty (30) days.  Further, Licensee shall give CSMC at least forty-five
(45) days’ prior written notice before Licensee initiates any bankruptcy
proceeding, and CSMC shall have the right to terminate this Agreement
immediately upon receipt of such notice;

(b)Automatically if the performance by either party to this Agreement of any
term, covenant, condition or provision hereof (i) shall jeopardize (A) the
licensure of CSMC, (B) CSMC’s participation in the Medicare, Medi-Cal or other
reimbursement or payment programs, (C) the full accreditation of CSMC by the
Joint Commission of Accreditation of Healthcare Organizations or any other state
or nationally recognized accreditation organization, or (D) CSMC’s tax-exempt
status; or (ii) is deemed illegal or unethical by any recognized governmental
agency or body.  Upon the occurrence of any of the items set forth in this
subparagraph (b), CSMC shall provide written notice to Licensee setting forth
the reason for such proposed termination and the parties shall work in good
faith to attempt to revise the terms of this Agreement to mitigate the issues
described in (i) and (ii) of the preceding sentence while protecting Licensee’s
interest in the Patent Rights and Technical Information.  If CSMC and Licensee
cannot within thirty (30) days from the foregoing notice by CSMC resolve the
issues described in (i) and (ii) above through a revision to the terms of this
Agreement reasonably satisfactory to CSMC, CSMC may immediately terminate this
Agreement upon written notice to Licensee;

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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(c)Upon thirty (30) days’ written notice from CSMC that a required payment by
Licensee is delinquent if, within such thirty (30) day period, Licensee shall
fail to pay fully any royalty payment required by Section 4.3 hereof or Schedule
F hereto;

(d)Upon sixty (60) days’ written notice from CSMC if, within such sixty (60) day
period following notice from CSMC that it is in breach or default, Licensee
shall fail to cure fully any breach or default of any material obligation under
this Agreement as described in such written notice detailing the facts of such
breach with reasonable specificity; provided, however, that Licensee may avoid
such termination if, before the end of such 60-day period, such breach or
default has been cured by Licensee to the reasonable satisfaction of CSMC;

(e)Upon sixty (60) days’ written notice from Licensee if, within such sixty (60)
day period, CSMC shall fail to cure fully any breach or default of any material
obligation under this Agreement as described in such written notice detailing
the facts of such breach with reasonable specificity; provided, however, that
CSMC may avoid such termination if, before the end of such 60 day period, such
breach or default has been cured by CSMC to the reasonable satisfaction of
Licensee;

(f)Upon the mutual written agreement of the parties hereto (such termination to
be effective as of the date mutually agreed upon in such written agreement); or

(g)Upon sixty (60) days’ written notice from Licensee if Licensee voluntarily
elects to terminate this Agreement.

6.3Obligations Upon Termination.  Upon any termination of this Agreement
pursuant to Section 2.5 or 6.2 hereof, nothing herein shall be construed to
release any party from any liability for any obligation incurred through the
effective date of termination (e.g., confidentiality, reimbursement of patent
expenses incurred prior to such date, etc.) or for any breach of this Agreement
prior to the effective date of such termination.  Licensee may, for a period of
one (1) year after the effective date of such termination, sell all tangible
Products customarily classified as “inventory” that it has on hand at the date
of termination, subject to payment by Licensee to CSMC of the applicable Royalty
and Sublicense Fee, as set forth in Schedule F; provided, that any such action
by Licensee does not subject CSMC to any of the occurrences set forth in
Section 6.2(b) hereof.

6.4Effect of Termination.  In the event of any termination of this Agreement
pursuant to Section 6.2 hereof, where such termination has not been caused by
any action or inaction on the part of any Permitted Sublicensee of Licensee or
by any breach by such Permitted Sublicensee of its obligations under its
sublicense from Licensee, such termination of this Agreement shall be without
prejudice to the rights of each non-breaching Permitted Sublicensee of Licensee
and each non-breaching Permitted Sublicensee shall be deemed to be a licensee of
CSMC thereunder, and CSMC shall be entitled to all rights, but shall not be
subject to any obligations (other than the grant of license and appurtenant
obligations under this Agreement to the extent provided for in such Permitted
Sublicense) of Licensee thereunder.  This Section 6.4, however, shall not be
applicable if this Agreement has been terminated under Section 6.2(b)

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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under circumstances where the application of this Section 6.4 would subject CSMC
to any of the occurrences set forth in Section 6.2(b).

6.5Right to Institute Legal Actions.  Notwithstanding the provisions of
Section 6.2 hereof, but subject to Section 2.5 hereof, CSMC, on the one hand,
and Licensee, on the other hand, may institute any other legal action or pursue
any other remedy against the other party permitted by applicable law if the
other party does not substantially cure any breach or default of any material
obligation as provided herein.

6.6Reversion of Rights.  Notwithstanding anything to the contrary set forth
herein (including, but not limited to, Section 5 hereof), full responsibility
for Prosecution of the Patent Rights shall, at the option of CSMC (exercisable
in its sole and absolute discretion), and at its sole expense from the date of
reversion, revert to CSMC upon any termination of this Agreement.

7.

INFRINGEMENT BY THIRD PARTIES

7.1Enforcement.  Licensee shall have the first right and obligation to enforce,
at its sole expense, any Patent Rights to the extent licensed hereunder against
infringement by third parties and shall notify CSMC in writing in advance of all
such enforcement efforts; provided, that Licensee shall be obligated to enforce
the Patent Rights only if Licensee determines that it is commercially reasonable
to do so in light of all relevant business and economic factors. Upon Licensee’s
undertaking to pay all expenditures reasonably incurred by CSMC, CSMC shall
reasonably cooperate in any such enforcement and, as necessary, join as a party
therein.  Licensee shall reimburse CSMC for all expenses, including reasonable
attorneys’ fees, incurred in connection with any such enforcement.  In the event
that Licensee does not file suit against or commence and conclude settlement
negotiations with a substantial infringer of Patent Rights within ninety (90)
days of receipt of a written demand from CSMC that Licensee bring suit, then
CSMC shall have the right, at its own expense, to enforce any Patent Rights, and
such Patent Rights shall no longer be subject to this Agreement.  Any damages or
other recovery from an infringement action undertaken by Licensee shall first be
used to reimburse the parties, on a pro rata pari passu basis, for the costs and
expenses incurred in such action, and shall thereafter be treated as Sublicense
Income in accordance with Schedule F.  If Licensee fails to prosecute any such
action to completion, then any damages or other recovery net of the parties’
costs and expenses incurred in such infringement action shall be the sole
property of CSMC.  

7.2Defense Of Patent Rights.  In the event that any Patent Rights are the
subject of a legal action seeking declaratory relief or of any reexamination or
opposition proceeding instituted by a third party, the parties agree to promptly
consult with each other concerning the defense of such actions or
proceedings.  If the parties agree that such defense should be undertaken, then
Licensee shall bear the expenses, including attorneys’ fees, associated with
such defense and in any recoupment of expenses.  If the parties disagree, then
the party desiring to defend the action or proceeding may proceed with such
defense and will bear its own expenses, and be entitled to all sums
recovered.  Any damages or other recovery from any such defense undertaken by
Licensee shall first be used to reimburse the parties, on a pro rata pari

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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passu basis, for the costs and expenses incurred in such defense, and shall
thereafter be treated as Sublicense Income in accordance with Schedule F.

8.

INDEMNIFICATION

8.1Indemnification by Licensee.  Subject to Section 8.2 hereof, Licensee shall
hold harmless, defend and indemnify CSMC and each of its officers, directors,
employees (including the Inventor), agents and sponsors of the research (except
Licensee) (each, an “Indemnified Party”, and collectively, the “Indemnified
Parties”) from and against any and all claims, damages, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees and expenses and costs
of investigation, whether or not suit is filed) suffered or incurred by any of
the Indemnified Parties in any third party action, suit, litigation, arbitration
or dispute of any kind (“Action”) to the extent arising or resulting from any
negligence or willful acts or omissions on the part of Licensee, its Affiliates
or Permitted Sublicensees in connection with (a) their use of the Patent Rights
or Technical Information and/or (b) the exercise of their rights hereunder or
under any sublicense, including, but not limited to (i) the preclinical
development and clinical testing of Products, and (ii) the manufacture, sale,
use, marketing, or other disposition of Products developed, manufactured, sold,
marketed, used or otherwise disposed of under this Agreement.  The foregoing
indemnification shall not apply to any claim, damage, loss, liability, cost or
expense to the extent attributable to the acts or omissions of any licensee of
CSMC other than Licensee or a Permitted Sublicensee, or the negligent activities
or intentional misconduct of any of the Indemnified Parties.  As part of its
obligations hereunder, Licensee shall defend any Action brought against any of
the Indemnified Parties with counsel of its own choosing and reasonably
acceptable to CSMC, and neither CSMC nor any other Indemnified Party shall enter
into any settlement of any such Action without first obtaining prior approval of
Licensee.  Licensee shall pay all costs, including attorneys’ fees, incurred in
enforcing this indemnification action.  Should CSMC or any other Indemnified
Party not afford Licensee the right to defend any such Action, or should CSMC or
any other Indemnified Party not obtain the approval of Licensee to any such
settlement, Licensee shall have no obligation to indemnify CSMC or any other
Indemnified Party hereunder.  Should Licensee fail to provide a defense for the
Indemnified Parties as required hereunder, then Licensee shall reimburse CSMC
for its out-of-pocket expenses (including reasonable attorneys’ fees and
expenses and costs of investigation) which are incurred as a result of any
investigation, defense or settlement relating to the foregoing, which
reimbursement shall be made to CSMC upon receipt by Licensee of invoices
reflecting in reasonable detail such expenses incurred by CSMC.  Licensee shall
obtain and maintain insurance policies (including products liability and general
liability policies at such time as is appropriate) which are reasonable and
necessary to cover its activities and to comply with the indemnification
obligations set forth above.  Such insurance policies shall name CSMC as an
additional insured party, and shall provide a minimum of Three Million Dollars
($3,000,000) in coverage per occurrence.  Upon initiation of any human clinical
studies using a therapeutic molecule covered by the Patent Rights, Licensee
shall have first increased its insurance coverage to an aggregate amount that is
commercially reasonable and consistent with prevailing business practice for the
risks involved.  Licensee shall provide CSMC with Certificates of Insurance
within thirty (30) days of the Effective Date (subject to extension if
reasonably required) and annually thereafter, evidencing the policies required
in accordance with

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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this Section 8.1, together with copies of the endorsement which specifies CSMC
as an additional insured and the declarations page for each such insurance
policy. Licensee shall provide CSMC with prompt written notice of any material
change in coverage under such policies.  The certificate of insurance,
endorsements and declarations pages (and any renewals or replacements thereof),
if required, shall be sent to CSMC’s Technology Transfer Office by electronic
mail at CSTechTransfer@cshs.org and by prepaid, first class, certified mail,
return receipt requested, at the following address: 8727 W. Third Street, Suite
#203, Los Angeles, CA 90048.

8.2Notice of Claim.  CSMC shall promptly notify Licensee in writing of any claim
or Action or material threat thereof brought against any Indemnified Party in
respect of which indemnification may be sought and, to the extent allowed by
law, shall reasonably cooperate with Licensee in defending or settling any such
claim or Action.  No settlement of any claim, Action or threat thereof received
by CSMC and for which CSMC intends to seek indemnification (for itself or on
behalf of any other Indemnified Party) shall be made without the prior joint
written approval of Licensee and CSMC.

9.

USE OF NAMES

Licensee shall not, unless as required by any law or governmental regulation,
use the name of CSMC, and/or any of its trademarks, service marks, trade names
or fictitious business names without express prior written consent of the Vice
President for Public Relations and Marketing of CSMC.  Further, prior to any
reference by Licensee to the names or marks of CSMC in any manner, Licensee
shall provide CSMC with a writing reflecting the proposed reference so that CSMC
can review the reference within a reasonable period of time prior to the
proposed use thereof by Licensee.  This limitation includes, but is not limited
to, use by Licensee in any regulatory filing, advertising, offering circular,
prospectus, sales presentation, news release or trade publication.  Subject to
compliance by Licensee with the foregoing, which shall be deemed conditions
precedent to any use of CSMC’s name or marks by Licensee, Licensee shall ensure
that the name of CSMC is used as scientifically or academically appropriate in
the “byline” of any article, abstract, manuscript or any other publication
related to the subject matter hereof.

10.

CONFIDENTIALITY

10.1Non-Disclosure.  Except to the extent Licensee’s counsel determines that
disclosure of the terms of this Agreement is required by law, the parties hereto
shall keep the terms of this Agreement and all business and scientific
discussions relating to the business of the parties strictly confidential.  All
patient information to which a party is given access by the other party shall be
subject to the provisions of the Confidentiality of Medical Information Act
(Cal. Civ. Code §§56, et seq.) and the Health Insurance Portability and
Accountability Act of 1996, and all regulations promulgated thereunder.  It may,
from time to time, be necessary for the parties, in connection with performance
under this Agreement, to disclose Confidential Information (including know-how)
to each other.  The Receiving Party (as defined in Section 1.2 hereof) shall
keep in strictest confidence the Confidential Information of the Disclosing
Party (as defined in Section 1.2 hereof), using the standard of care it normally
uses for information of like character, and shall not disclose the Confidential
Information to any third party or use it except

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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as expressly authorized by the prior written consent of the Disclosing Party or
as otherwise permitted by this Agreement; provided, however, that Licensee may
disclose the Confidential Information received from CSMC to its Permitted
Sublicensees as shall be reasonably necessary to carry out the intent of this
Agreement or any sublicense granted by Licensee as contemplated by this
Agreement if, but only if, such Permitted Sublicensees each execute a
confidentiality agreement containing confidentiality provisions no less
restrictive than those confidentiality provisions contained in this
Section 10.  The Receiving Party’s obligation hereunder shall not apply to
Confidential Information that the Receiving Party can show:

(a)Is or later becomes part of the public domain through no fault or neglect of
the Receiving Party;

(b)Is received in good faith from a third party having no obligations of
confidentiality to the Disclosing Party, provided that the Receiving Party
complies with any restrictions imposed by the third party;

(c)Is independently developed by the Receiving Party without use of the
Disclosing Party’s Confidential Information; or

(d)Is required by law or regulation to be disclosed (including, without
limitation, in connection with FDA filings, filings with another government
agency or as required under the California Public Records Act), provided that
the Receiving Party uses reasonable efforts to restrict disclosure and to obtain
confidential treatment.

10.2Limits on Permitted Disclosures.  Each party agrees that any disclosure or
distribution of the other party’s Confidential Information within its own
organization shall be made only as is reasonably necessary to carry out the
intent of this Agreement.  The parties further agree that all of their
respective officers, employees, agents, representatives or Permitted
Sublicensees to whom any Confidential Information is disclosed or distributed
shall have agreed to maintain its confidentiality.  In such event, the Receiving
Party shall identify with reasonable particularity, upon request by the
Disclosing Party, each person within the Receiving Party’s organization to whom
the Receiving Party has disclosed or distributed Confidential Information.

10.3Legally Required Disclosures.  If a subpoena or other legal process
concerning Confidential Information is served upon any party hereto pertaining
to the subject matter hereof, the party served shall notify the other party
immediately, the other party shall cooperate with the party served, at the other
party’s expense, in any effort to contest the validity of such subpoena or other
legal process.  This Section 10.3 shall not be construed in any way to limit any
party’s ability to satisfy any disclosure of its relationship with the other
party required by any governmental authority.

10.4Patent Rights as Confidential Information.  The Patent Rights are understood
by Licensee to be the Confidential Information of CSMC to the extent
“unpublished” as such term is construed under the United States Patent Laws.  As
such, Licensee’s confidentiality obligations hereunder automatically extend to
any and all Technical Information and to any and all patent applications of CSMC
relating to any Patent Rights, Technical Information and CSMC

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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Improvements and to any and all communications with the United States Patent
Office, and any foreign patent office relating to any Patent Rights, Technical
Information or CSMC Improvements.

10.5Return of Confidential Information.  In the event of any termination of this
Agreement, the Receiving Party shall promptly return all Confidential
Information and any copies made thereof previously made available to the
Receiving Party by the Disclosing Party, except that the Receiving Party may
retain one copy of the Confidential Information in the custody of its chief
legal officer solely for the purpose of monitoring compliance with this
Agreement.

10.6Remedies.  Both parties acknowledge and agree that it would be difficult to
measure damages for breach by either party of the covenants set forth in this
Section 10, and that injury from any such breach would be incalculable, and that
money damages would therefore be an inadequate remedy for any such
breach.  Accordingly, either party shall be entitled, in addition to all other
remedies available hereunder or under law or equity, to injunctive or such other
equitable relief as a court may deem appropriate to restrain or remedy any
breach of such covenants.

11.

INFORMATION EXCHANGE

In addition to the Patent Rights and Technical Information, the parties shall
cooperate to exchange such non-confidential information as may be appropriate
and necessary to facilitate Licensee’s development and commercialization of
Products incorporating any Patent Rights or Technical Information.

12.

PATENT MARKING

In the event any Product is the subject of a patent under the Patent Rights,
Licensee shall actually or virtually mark all Products made, sold or otherwise
disposed of by or on behalf of it or any of its Permitted Sublicensees as set
forth under Title 35, Section 287(a) of the United States Code and shall respond
to any request or disclosure under Title 35, Section 287(b)(4)(B) of the United
States Code by only notifying CSMC of the request for disclosure.

13.

MISCELLANEOUS

13.1Notices.  Any notice, request, instruction or other document required by
this Agreement shall be in writing and shall be deemed to have been given (a) if
mailed with the United States Postal Service by prepaid, first class, certified
mail, return receipt requested, at the time of receipt by the intended
recipient, (b) if sent by Federal Express®, Airborne®, or other overnight
carrier, signature of delivery required, at the time of receipt by the intended
recipient, or (c) if sent by facsimile transmission, when so sent and when
receipt has been acknowledged by appropriate telephone or facsimile receipt,
addressed as follows:

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Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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In the case of CSMC to:

Cedars-Sinai Medical Center

8700 Beverly Boulevard
Los Angeles, California 90048-1865

Attn: Senior Vice President for Finance & CFO

Fax: 310-423-0120

With a copy to: Vice President for Legal & Technology Affairs

or in the case of the Licensee to:

ImmunoCellular Therapeutics, Ltd.
23622 Calabasas Road, Suite 300

Calabasas, CA 91302

Fax:  (818) 224-5287

or to such other address or to such other person(s) as may be given from time to
time under the terms of this Section 13.1.

13.2Compliance with Laws.  Each party shall comply with all applicable federal,
state and local laws and regulations in connection with its activities pursuant
to this Agreement.

13.3Governing Law; Venue.  For any dispute between the parties to this Agreement
which arises from or relates to this Agreement, the Agreement shall be construed
and enforced in accordance with the laws of the United States of America and of
the State of California, irrespective of choice of laws provisions.  The parties
agree that Los Angeles County, California shall be the situs of any legal
proceeding arising out of or relating to this Agreement.  Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this Section, and stipulates that the state and federal courts
located in Los Angeles, California shall have in personam jurisdiction and venue
over each of them for the purpose of litigating any dispute, controversy, or
proceeding arising out of or related to this Agreement.  Each party hereby
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this Section by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices as set forth in this Agreement.

13.4Waiver.  Failure of any party to enforce a right under this Agreement shall
not act as a waiver of that right or the ability to assert that right relative
to the particular situation involved.

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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13.5Enforceability.  If any provision of this Agreement shall be found by a
court of competent jurisdiction to be void, invalid or unenforceable, the same
shall be reformed to comply with applicable law or stricken if not so
conformable, so as not to affect the validity or enforceability of the remainder
of this Agreement.

13.6Modification.  No change, modification, or addition or amendment to this
Agreement, or waiver of any term or condition of this Agreement, is valid or
enforceable unless in writing and signed and dated by the authorized officers of
the parties to this Agreement.

13.7Entire Agreement.  This Agreement, the Schedules hereto (which are
incorporated herein by this reference as if fully set forth herein) and the
Stock Purchase Agreement constitute the entire agreements among the parties with
respect to the subject matter hereof and thereof, and replace and supersede as
of the date hereof and thereof any and all prior agreements and understandings,
whether oral or written, between the parties with respect to the subject matter
of such agreements.

13.8Successors.  Except as otherwise expressly provided in this Agreement, this
Agreement shall be binding upon, inures to the benefit of, and is enforceable
by, the parties and their respective heirs, legal representatives, successors
and permitted assigns.

13.9Construction.  This Agreement has been prepared, examined, negotiated and
revised by each party and their respective attorneys, and no implication shall
be drawn and no provision shall be construed against any party to this Agreement
by virtue of the purported identity of the drafter of this Agreement or any
portion thereof.

13.10Counterparts.  This Agreement may be executed simultaneously in one or more
counterparts, each of which shall constitute one and the same instrument.  This
Agreement may be executed by facsimile.

13.11Attorneys’ Fees.  In the event of any action at law or in equity between
the parties hereto to enforce any of the provisions hereof, the unsuccessful
party to such litigation shall pay to the successful party all reasonable costs
and expenses, including reasonable attorneys’ fees, incurred therein by such
successful party; and if such successful party shall recover a judgment in any
such action or proceeding, such reasonable costs, expenses and attorneys’ fees
may be included in and as part of such judgment.

13.12Assignment.

(a)This Agreement is personal to Licensee and only assignable by Licensee in
accordance with Section 2.2 or as part of a sale, regardless of whether such a
sale occurs through an asset sale, stock sale, merger or other combination, or
any other transfer of Licensee’s entire business, or that part of Licensee’s
business that exercises all rights granted under this Agreement, subject to
Section 13.12(b).  Any other attempt to assign this Agreement by Licensee is
null and void.  In the event of a bankruptcy, assignment is permitted only to a
party that can provide adequate assurance of future performance, including
diligent development and sales, of Products.

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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(b)Prior to any assignment, the following conditions must be met: (i) Licensee
must give CSMC thirty (30) days prior written notice of the assignment,
including the new assignee’s contact information, and (ii) the new assignee must
agree in writing to CSMC to be bound by this Agreement.  It is understood and
agreed that if Licensee is unable or is advised by its legal counsel not to give
CSMC prior written notice of any such assignment, then Licensee shall give
written notice of such assignment as promptly as possible thereafter and in any
event within thirty (30) days of the assignment.  

(c)Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefit of any successors in interest and assigns
of CSMC and Licensee.  CSMC shall have the right to assign its rights hereunder
as part of any reorganization or bond financing.

13.13Further Assurances.  At any time and from time to time after the Effective
Date, each party shall do, execute, acknowledge and deliver, and cause to be
done, executed, acknowledged or delivered, all such further acts, transfers,
conveyances, assignments or assurances as may be reasonably required to
consummate the transactions contemplated by this Agreement.

13.14Survival.  The following sections shall survive any expiration or earlier
termination of this Agreement:  6.3, 8, 9, 10, 12 and 13.  The provisions set
forth in Schedule F also shall survive any expiration or earlier termination of
this Agreement, to the extent set forth therein.

13.15Force Majeure.  Neither party will be responsible for delays resulting from
causes beyond its reasonable control, including without limitation fire,
earthquake, acts of terrorism, war or riot, provided that the nonperforming
party uses commercially reasonable efforts to avoid or remove these causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever the delaying causes are removed.

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the date first above written.

Date:  May 13, 2015

“LICENSEE”:

 

IMMUNOCELLULAR THERAPEUTICS, LTD., A DELAWARE LIMITED LIABILITY COMPANY

 

 

By:/s/ Andrew Gengos

Name:  Andrew Gengos

Title:  President & CEO

 

Date:  May 13, 2015

“CSMC”:

 

CEDARS SINAI MEDICAL CENTER,
A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION

 

 

By:/s/ James D. Laur

James D. Laur, Esq.

Vice President, Legal & Technology Affairs

 

Date:  May 14, 2015

By:/s/ Edward M. Prunchunas

Edward M. Prunchunas

Senior Vice President for Finance and CFO

 

 

 

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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SCHEDULE LISTING

Schedule APatent Rights

Schedule BTechnical Information

Schedule CPeptide Sequences

Schedule DMilestones

Schedule EStock Purchase Agreement dated November 17, 2006

Schedule FRoyalty Provisions

Schedule GRoyalty Reporting Form

 

 

 

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brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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SCHEDULE A

Patent Rights

 

[*]

A - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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SCHEDULE B

TECHNICAL INFORMATION

[*]

B - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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SCHEDULE C

PEPTIDE SEQUENCES

[*]

C - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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SCHEDULE D

MILESTONES

[*]

D - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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SCHEDULE E

STOCK PURCHASE AGREEMENT DATED NOVEMBER 17, 2006

 

Previously filed by us on November 22, 2006 as an exhibit to our Current Report
on Form 8-K and incorporated herein by reference.

E - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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SCHEDULE F

ROYALTY PROVISIONS

All capitalized terms not otherwise defined in this Schedule F shall have the
meanings ascribed to them in the Exclusive License Agreement to which this
Schedule F is attached (the “Agreement”).

1.Royalties.  

(a)Royalty Rates.  Licensee shall pay, or cause to be paid, to CSMC a running
royalty equal to the applicable percentage of the Gross Sales Price received by
Licensee or its Permitted Sublicensees from the Sale of Products, the
manufacture, use, sale or distribution of which infringes a Valid Claim within
the Patent Rights (or, in the case of ICT-140 Products, a Valid Claim within the
ICT-140 Patent Rights, as such terms are defined in subsection 1(b) of this
Schedule F below) in the country in which such Product is sold or distributed,
and which have been sold or otherwise distributed by Licensee or its Permitted
Sublicensees hereunder to a third party (other than a wholly-owned subsidiary of
Licensee) in such country (each, a “Royalty”) in the applicable amount set forth
in the following chart:

 

Product

Royalty Rate

ICT-107

[*] of Gross Sales of ICT-107 Products* until the gross amount of all revenues
received by Licensee or its Permitted Sublicensees from Sales of ICT-107,
ICT-121 and ICT-140 Products* in any year have reached [*]; thereafter, [*] of
Gross Sales of ICT-107 Products* for the remainder of such year

ICT-121

[*] of Gross Sales of ICT-121 Products* until the gross amount of all revenues
received by Licensee or its Permitted Sublicensees from of ICT-107, ICT-121 and
ICT-140 Products* in any year have reached [*]; thereafter, [*] of Gross Sales
of ICT-121 Products* for the remainder of such year

ICT-140

[*] of Gross Sales of ICT-140 Products* subject to subsection 1(b) of this
Schedule F below

*the manufacture, use, sale or distribution of which infringes a Valid Claim
within the Patent Rights (or, in the case of ICT-140 Products, a Valid Claim
within the ICT-140 Patent Rights, as such terms are defined in subsection 1(b)
of this Schedule F below) in the country in which such Product is sold or
distributed, and which have been sold or otherwise distributed by Licensee or
any Permitted Sublicensee hereunder to a third party (other than a wholly-owned
subsidiary of Licensee) in such country.

On Sales of Products which are made in other than an arms’-length transaction,
the value of the Gross Sales attributed under this Section 1 to such a
transaction shall be that which would

F - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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have been received in an arms’-length transaction, based on sales of like
quality and quantity products on or about the time of such transaction.

For the avoidance of doubt, the Royalty Rates provided for above for Gross Sales
of ICT-107 and ICT-121 Products shall be re-set at the beginning of each year,
such that at the beginning of each year during which Royalties are due and
payable under this Agreement, the Royalty Rate for each of ICT-107 and ICT-121
Products shall be [*] of Gross Sales until the gross amount of all revenues
received by Licensee or its Permitted Sublicensees from Sales of ICT-107,
ICT-121 and ICT-140 Products in such year have reached [*] and, thereafter for
the remainder of such year, the Royalty Rate shall be [*] of Gross Sales of
ICT-107 and ICT-121 Products.  

(b)Royalties Payable on ICT-140 Products.  Notwithstanding anything to the
contrary set forth in this Agreement, the parties agree that Licensee shall be
obligated to pay (or cause to be paid) Royalties on Gross Sales of ICT-140
Products at the royalty rate set forth in the table in Paragraph 1(a) above in
the event that the ICT-140 Product infringes a Valid Claim in the country of
sale, of either (i) the jointly-owned Patent Rights described in item VIII on
Schedule A hereto; or (ii) United States Patent Application No. 61/764,789 filed
on February 14, 2013 and United States Patent Application No. 14/181,417 filed
on February 14, 2014, each of which covers the invention titled “Cancer Vaccines
and Vaccination Methods” and each of which names James Bender and John Yu as
inventors, and all patents and/or patent applications (including provisional
patent applications) existing as of the Effective Date in any other country
corresponding to any of the foregoing, and all divisions, continuations,
reissues, reexaminations, supplementary protection certificates and extensions
thereof, whether domestic or foreign, all claims of continuations-in-part that
are entitled to the benefit of the priority date of any of the foregoing, and
any patent that issues thereon, excluding any Licensee Developments or
Inventions by Dr. John Yu working in his capacity as Licensee’s Chief Scientific
Officer and without using any facilities, resources or personnel of CSMC
(collectively, the patent rights described in subsections (i) and (ii) of this
sentence shall be referred to as the “ICT-140 Patent Rights”; any product which
infringes a Valid Claim in the country of sale of the ICT-140 Patent Rights
shall be referred to as an “ICT-140 Product”).  Licensee’s royalty obligations
as to the ICT-140 Product shall terminate on a country-by-country basis
concurrently with the expiration of the last to expire of a Valid Claim within
any of the ICT-140 Patent Rights in each such country, including any term
extensions thereof.  For purposes of this Paragraph only, the term “Valid Claim”
shall mean a claim of any of the ICT-140 Patent Rights, which claim has not, if
it is a pending patent application, been pending for longer than seven (7) years
after the actual filing date of the patent application, or, if it is a pending
patent application or a patent that has issued from the ICT-140 Patent Rights,
has not (a)  lapsed, been canceled or become abandoned, (b) been declared
invalid or unenforceable by a non-appealable decision or judgment of a court or
other appropriate body or authority of competent jurisdiction, or (c) been
admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise.  

2.Sublicense Fee.  Licensee shall pay CSMC the following sublicense fees on any
Sublicense Income received from any Permitted Sublicensee (“Sublicense Fee”):

F - 2

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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Product

Effective Date of

Sublicense Agreement

Percent of Non-Royalty Sublicense Revenues Payable to CSMC

ICT-107

Prior to receipt of FDA approval (or foreign equivalent) for ICT-107 Product

[*]

ICT-107

After receipt of FDA approval (or foreign equivalent) for ICT-107 Product

[*]

ICT-121

Prior to receipt of FDA approval (or foreign equivalent) for ICT-121 Product

[*]

ICT-121

After receipt of FDA approval (or foreign equivalent) for ICT-121 Product

[*]

ICT-140

At any time during the term

[*]

 

Any non-cash consideration received by Licensee from Permitted Sublicensees as
Sublicense Income shall be valued at its fair market value as of the date of
receipt and the Sublicense Fee reflecting such amount shall be paid in cash to
CSMC.  In the event that the Patent Rights are sublicensed in combination with
one or more patented technologies that are not covered under this Agreement,
Sublicense Income for the purposes of this Section 2 shall be calculated on a
pro-rata basis in a manner to be mutually agreed in good faith by CSMC and
Licensee (which agreement may be a condition of approval under Section 2.2).

3.No Duplicative Royalties.  Subject to the provisions of Paragraph 1 above, in
those circumstances in which a Royalty is payable to CSMC from the sale of a
Product by an Affiliate of Licensee which is a Permitted Sublicensee, and in
which a royalty is also payable to Licensee from the Sale of the same Product by
the same Affiliate, then Licensee shall not be required to pay a Royalty to CSMC
with respect to the royalties so received by Licensee on the same Product, if
and to the extent the required royalty is received by CSMC from the
Affiliate.  Only one Royalty shall be paid with respect to each unit of Product
sold, regardless of how many Patent Rights or Valid Claims cover such
Product.  This exclusion is intended to avoid the payment of duplicative
royalties, shall be strictly construed, and shall not apply to other forms of
compensation paid to Licensee by its Affiliates.

4.Suspension of Obligations.  In the event that Licensee is legally prevented
from commercializing one or more Products as a result of patent infringement
issues relating to the Patent Rights, all of Licensee’s obligations with respect
to such Products, including, without limitation, Royalty and other payment
obligations under this Schedule F, milestone and diligence obligations related
to that particular Product in that jurisdiction, shall be suspended unless and

F - 3

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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until such patent infringement issues are resolved.  In the event that any such
issues are not resolved during the term of the Agreement, or in the event that
such issues are resolved in a manner that would continue to prevent Licensee
from commercializing such Products, then Licensee shall have no further
obligations hereunder with respect to such Products.

5.Duration of Royalty Obligations. The royalty obligations of Licensee as to
each Product shall terminate on a country-by-country basis concurrently with the
expiration of the last to expire of a Valid Claim within the Patent Rights that
covers such Product in each such country, including any term extensions thereof;
provided, that notwithstanding the foregoing, Licensee’s royalty obligations as
to the ICT-140 Product shall terminate as set forth in subsection 1(b) of this
Schedule F.

6.

Payment and Accounting.

(i)Reports. Each payment of Royalties shall be accompanied by a report in the
form attached as Schedule G hereto, which sets forth in reasonable detail the
number and each type of Product sold and the calculation of Gross Sales
applicable thereto, and such additional details as may be reasonably requested
by CSMC for the determination of Royalties payable hereunder.  Products shall be
considered as being sold for the purpose of the calculation of Royalties under
this Agreement when revenues have been received from Sales of the
Products.  Each payment of Sublicense Fees shall be accompanied by a report in
the form attached as Schedule G hereto setting forth in reasonable detail the
basis for the calculation of such amounts, and such additional details as may be
reasonably requested by CSMC for the determination of Sublicense Fees payable
hereunder.  Hard copies of such reports shall be sent to CSMC’s address set
forth in Section 13.1 of the Agreement, while an electronic copy shall be sent
by electronic mail to CSTechTransfer@cshs.org.  Except as otherwise provided
herein, all amounts due hereunder shall be paid in United States dollars and
shall be made without set off and free and clear of (and without any deduction
or withholding for) any taxes, duties, levies, imposts or similar fees or
charges.  Royalties shall be payable by Licensee quarterly, within forty-five
(45) days after the end of each calendar quarter, based upon revenues accrued
during the immediately preceding calendar quarter.  Licensee agrees to pay and
shall pay to CSMC, or cause its Permitted Sublicensees to pay to CSMC, all
Royalties resulting from the activities of its Permitted Sublicensees, within
forty-five (45) days after the end of each calendar quarter.  

(ii)Notice of Payment.  Licensee shall provide prompt written notice to CSMC
that it has paid any Milestone Payment required by Section 4.2 by electronic
mail to CSTechTransfer@cshs.org.  

(iii)Wire Transfer Instructions.  All payments due hereunder shall be made by
Licensee to CSMC in accordance with the following wire transfer instructions:

[*]

(iv)Records and Audits.  Licensee shall create and maintain complete and
accurate records and documentation concerning all Sales of Products by Licensee
and its Permitted Sublicensees as well as transactions based upon which
Sublicense Fees are due, in sufficient detail to enable the Royalties and
Sublicense Fees, respectively, that is payable hereunder to be
determined.  Licensee shall retain such records and documentation for not less

F - 4

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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than seven (7) years from the date of their creation.  During the term of this
Agreement and for a period of three (3) years thereafter, CSMC and its
representatives shall have the right to audit such records and documentation as
shall pertain to the determination and payment of Royalties and Sublicense
Fees.  Such examiners shall have reasonable access during regular business hours
to Licensee’s offices and the relevant records, files and books of account, and
shall have the right to examine any other records reasonably necessary to
determine the accuracy of the calculations provided by Licensee.  The costs of
any such audit shall be borne by CSMC, unless as a result of such inspection it
is determined that the amounts payable by Licensee for any period are in error
by greater than five percent (5%), in which case the costs of such audit shall
be borne by Licensee.  CSMC shall report the results of any such audit to
Licensee within forty‑five (45) days of completion.  Thereafter, Licensee shall
promptly pay to CSMC the amount of any underpayment discovered in such audit, or
CSMC shall credit to Licensee against future Royalty payments the amount of any
overpayment discovered in such audit, as the case may be.  In addition, Licensee
shall pay interest on any underpayment at the rate that is the lower of (i) two
percent (2%) over the rate of interest announced by Bank of America in Los
Angeles, California (or any successor in interest thereto or any commercially
equivalent financial institution if no such successor exists) to be its “prime
rate”, or (ii) the highest rate permitted by applicable law, from the date such
amount was underpaid to the date payment is actually received.

(v)Currency Transfer Restrictions. If any restrictions on the transfer of
currency exist in any country or other jurisdiction so as to prevent Licensee
from making payments to CSMC, Licensee shall take all commercially reasonable
steps to obtain a waiver of such restrictions or to otherwise enable Licensee to
make such payments.  If Licensee is unable to do so, Licensee shall make such
payments to CSMC in a bank account or other depository designated by CSMC in
such country or jurisdiction, which payments shall be in the local currency of
such country or jurisdiction, unless payment in United States dollars is
permitted.  Any payment by Licensee to CSMC in currencies other than United
States dollars shall be calculated using the appropriate foreign exchange rate
for such currency quoted in the California edition of The Wall Street Journal
for the close of business of the last banking day of the calendar quarter in
which such payment is being made.

(vi)Late Charges. A service charge of two percent (2%) per month, not to exceed
the maximum rate allowed by applicable law, shall be payable by Licensee on any
portion of Licensee’s outstanding Royalty or Sublicense Fee balance or any other
amount payable by Licensee hereunder (including, without limitation,
reimbursement for Prosecution costs as set forth in Section 4.1 hereof) that is
not paid to CSMC within thirty (30) days past the due date.

(vii)Taxes.  Licensee shall pay, or cause to be paid, any and all taxes required
to be paid or withheld on any sales or other transfers for value of Products or
Patent Rights (other than taxes imposed on the income or revenues of CSMC);
provided, however, that under no circumstances shall the amounts of such taxes
be deducted from the total amount of payments otherwise due to CSMC
hereunder.  Upon CSMC’s request, Licensee shall secure and send to CSMC proof of
any such taxes withheld and paid by Licensee or its Permitted Sublicensees.

F - 5

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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(viii)No Escrow.  Licensee shall pay all Royalties and Sublicense Fees directly
to CSMC and shall not pay royalties into any escrow or other similar account,
including in the event of a validity or non-infringement challenge to the Patent
Rights.

7.Certain Definitions.

(a)“Gross Sales Price” means the gross amount of all revenues (whether in the
form of cash, property or otherwise) received by Licensee or its Permitted
Sublicensees from the Sale of Products less (but only to the extent separately
itemized as a part of the gross price charged):  (i) transportation, handling,
insurance and sales taxes, (ii) rebates and other allowances actually paid or
allowed and which are standard and customary in the industry, and (iii) sales
commissions to third party distributors actually paid; provided, however, that
no other deduction shall be made for royalties, commissions, costs of collection
or similar items payable with respect to the Royalty Bearing Products.  For the
purposes of the definition of “Gross Sales Price”, it is acknowledged and agreed
by the parties that Sales to wholly-owned subsidiaries of Licensee shall not be
included.  In the event that Product is sold in the form of a Combination
Product (a fixed-dose combination product containing two or more separate drug
components in a single dosage form) then the Gross Sales Price for such
Combination Product will be calculated by multiplying the actual Gross Sales
Price of such Combination Product by the fraction A/(A+B+C) where:  A is the
average sales price of the Product contained in the Combination Product if sold
separately by Licensee or its Permitted Sublicensee, B is the average sales
price of any other active ingredients in the Combination Product if sold
separately by Licensee, its Permitted Sublicensee or a third party, and C is the
cost of combining Product with the other active ingredient(s).  In the event
that the Product is sold in the form of a Combination Product containing one or
more active ingredients other than the Product and one or more such active
ingredients of the Combination Product are not sold separately, then the parties
shall jointly select an individual pricing expert who shall set the formula for
determining the Gross Sales Price for such Combination Product and such expert’s
determination shall be binding.  The cost of retaining the expert shall be
shared equally between the parties.

(b)“Sales” means the sale or other transfer for value.  Sales do not include the
sale of Products at or below the fully burdened cost of manufacturing solely for
research or clinical testing or for indigent or similar public support or
compassionate use programs.

(c)“Sublicense Income” means payments that Licensee received from a Permitted
Sublicensee  in consideration for any rights granted to Patent Rights under a
sublicense agreement, including without limitation upfront fees, license
maintenance fees, milestone payments or other payments, including the fair
market value of any non-cash consideration, but excluding the following
payments: (i) payments made in consideration for the issuance of equity or debt
securities of Licensee or other securities convertible into capital stock of
Licensee, (ii) payments specifically committed under the terms of Licensee’s
agreement with the Permitted Sublicensee for the research or development by
Licensee of Products, including reimbursement for past research or development
activities, (iii) payments received by Licensee from third parties for actual
direct and indirect costs incurred by Licensee (including reimbursement of
actual, identifiable past costs incurred by Licensee) related to product

F - 6

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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development and manufacturing activities, general and administrative expenses,
and co-development activities, including any amounts received by Licensee for
the manufacture and supply of Products or components thereof for any use, (iv)
milestone payments based on achievement of milestones for which Licensee is
required to make payments to CSMC pursuant to Section 4.2 of the Agreement, (v)
payments made to Licensee for the license or sublicense by Licensee of any
intellectual property other than the Patent Rights and the Technical
Information, (vi) payments made to Licensee to fund or reimburse the actual,
identifiable costs, expenses and fees incurred by Licensee for the filing,
prosecution and maintenance of patents or other intellectual property, (vii)
payments made to Licensee for sales of products other than Products, and (viii)
sublicense royalty payments made in connection with the sale of Products, so
long as Licensee pays or causes to be paid to CSMC Royalties on amounts received
by Licensee’s Permitted Sublicensees under Paragraph 1 hereof.  For clarity,
research or development activities include without limitation the design and
conduct of non-clinical and pre-clinical studies and clinical trials (including
in the conduct of any Phase IV trials or other post-marketing
studies).  Licensee shall provide written notice to CSMC in the event that
Licensee is required, under the terms of Licensee’s agreement with the Permitted
Sublicensee, to refund any Sublicense Income received to the Permitted
Sublicensee (the “Refunded Sublicense Income”); thereafter, CSMC shall provide a
credit to Licensee in an amount equal to the Sublicense Fee paid by Licensee to
CSMC under Paragraph 1 hereof with respect to such Refunded Sublicense Income,
which shall be creditable against Royalties otherwise payable under this
Agreement.

 

F - 7

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

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

SCHEDULE G

 

ROYALTY REPORTING FORM

 

Licensee name:

Reporting period:

Date of report:

Date of first commercial sale:

 

Royalty Report

Product (list products by name)

No. units sold

Invoiced price per unit

Gross sales

Allowable deductions (attached itemized detail)

Country of sale/foreign currency/ conversion rate

Net sales

Product name

 

 

 

 

 

 

Product name

 

 

 

 

 

 

Product name

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

Total net sales

$

Royalty rate

 

Royalty due

$

 

Total royalty due: $___________________________

 

Sublicense Revenue Report

Total Sublicense Income received

$

Date received

 

Applicable percentage payable to CSMC

 

Total Sublicense Fees payable to CSMC

$

 

Report prepared by:

Title:

Date:

 

G - 1

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

 

 

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

Please send report to:

Cedars-Sinai Medical Center
8700 Beverly Boulevard
Los Angeles, California  90048-1865
Attention:  Senior Vice President for Academic Affairs

with a copy to Senior Vice President for Legal Affairs & General Counsel

 

Please send electronic copy to CSTechTransfer@cshs.org.

 

G - 2

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.