Exhibit 10.6

[***] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

LICENSE AGREEMENT

BETWEEN

ANNAPURNA THERAPEUTICS LIMITED

AND

CORNELL UNIVERSITY

FOR

[***]

CTL CONTRACT NO. C2016-11-10548

 

 

 

 

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TABLE OF CONTENTS

 

RECITALS

1

 

 

 

 

ARTICLE 1.

 

DEFINITIONS

1

 

 

 

 

ARTICLE 2.

 

GRANTS

4

 

 

 

 

ARTICLE 3.

 

CONSIDERATION

6

 

 

 

 

ARTICLE 4.

 

REPORTS, RECORDS AND PAYMENTS

10

 

 

 

 

ARTICLE 5.

 

INTELLECTUAL PROPERTY MATTERS

12

 

 

 

 

ARTICLE 6.

 

GOVERNMENTAL MATTERS

14

 

 

 

 

ARTICLE 7.

 

TERMINATION OF THE AGREEMENT

15

 

 

 

 

ARTICLE 8.

 

LIMITED WARRANTY AND INDEMNIFICATION

16

 

 

 

 

ARTICLE 9.

 

USE OF NAMES AND TRADEMARKS

18

 

 

 

 

ARTICLE 10.

 

MISCELLANEOUS PROVISIONS

18

 

 

 

 

Appendix A:

 

Original Material

23

 

 

 

 

Appendix B:

 

Convertible Note

24

 

 

 

 

Appendix C:

 

Development Report

31

 

 

 

 

Appendix D:

 

Commercialization Report

34

 

 

 

 

Appendix E:

 

Business Plan

37

 

 

 

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

 

 

LICENSE AGREEMENT

This agreement ("Agreement") is made by and between Annapurna Therapeutics
Limited, an Irish corporation having an address at 9 Upper Pembroke Street,
Dublin 2 ("LICENSEE") and Cornell University (“Cornell”) as represented by its
Center for Technology Licensing ("CTL") at Cornell University at 395 Pine Tree
Road, Ithaca, NY 14850.

This Agreement is effective on December 15, 2015 (“Effective Date”).

RECITALS

WHEREAS, the inventions disclosed in [***] ("Invention") were made in the course
of research at Cornell by Dr. Ronald Crystal and his associates (hereinafter and
collectively, the "Inventors") and are covered by Patent Rights as defined
below;

WHEREAS, the Inventors are employees of Cornell, and they are obligated to
assign all of their right, title and interest in the Invention to Cornell and
have done so;

WHEREAS, CTL is the officially authorized unit at Cornell to manage Invention
and to grant rights subsisting therein for Cornell;

WHEREAS, Cornell desires that the Invention be developed and utilized to the
fullest possible extent so that its benefits can be enjoyed by the general
public;

WHEREAS, LICENSEE has provided CTL a brief business plan, a copy of which is
attached herein as Appendix E, for the purpose of obtaining certain rights from
Cornell for the commercialization of the Inventions under this Agreement; and

WHEREAS, LICENSEE understands that Cornell may publish or otherwise disseminate
information concerning the Invention and Technology (as defined below) at any
time and that LICENSEE is paying consideration hereunder for its early access to
the Invention, the associated intellectual property rights and Technology, not
continued secrecy therein.

NOW, THEREFORE, the parties agree:

ARTICLE 1.  DEFINITIONS

The terms, as defined herein, shall have the same meanings in both their
singular and plural forms.

1.1

"Affiliate" means any corporation or other business entity in which LICENSEE
owns or controls, directly or indirectly, at least twenty percent (20%) of the
outstanding stock, units of membership, or other voting rights entitled to elect
directors or officers, or in which LICENSEE is owned or controlled directly or
indirectly by at least twenty percent (20%) of the outstanding stock, units of
membership, or other voting rights entitled to elect directors or officers; but
in any country where the local law does not

 

1

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permit foreign equity participation of at least twenty percent (20%), then an
"Affiliate" includes any company in which LICENSEE owns or controls or is owned
or controlled by, directly or indirectly, the maximum percentage of outstanding
stock, units of membership, or voting rights permitted by local law.  

1.2

"Sublicense" means an agreement into which LICENSEE enters with a third party
that is not an Affiliate for the purpose of (i) granting certain rights; (ii)
granting an option to certain rights; or (iii) forbearing the exercise of any
rights, granted to LICENSEE under this Agreement after Effective Date. For
clarity, a “Sublicense” will not include any such agreement entered into with
LICENEE’s successor, assignee or transferee in the context of or as a result of
any merger, acquisition, sale or change of control of LICENSEE.  "Sublicensee"
means a third party with whom LICENSEE enters into a Sublicense.

1.3

"Field" means all fields.

1.4

"Territory" means [***].

1.5

"Term" means, on a country-by-country and Licensed Product-by-Licensed Product
basis, the period of time beginning on Effective Date and ending on the later of
(i) the expiration date of the last to expire Valid Claim within the Patent
Rights which covers the manufacture, use or sale of the Licensed Product in the
country of sale; or (ii) the expiration date for orphan drug exclusivity or for
other regulatory exclusivity rights obtained by LICENSEE or by any Sublicensee
expire for the Licensed Product in that country; or (iii) the introduction of
any generic, biosimilar or other directly competing product.

1.6

"Patent Rights" means Cornell’s right in any of the following:  the US patent
application (serial number [***] titled [***]) disclosing and claiming the
Invention, filed by Inventors and assigned to Cornell and applications which
claim priority thereto, and continuing applications thereof including divisions,
substitutions, and continuations-in-part (but only to extent the claims thereof
are enabled by disclosure of the parent application); any patents issuing on
said applications including reissues, reexaminations and extensions; and any
corresponding foreign applications or patents, existing anywhere in the world.

1.7

"Technology" means Materials and technical information relating to any of the
Inventions that Cornell or the Inventor provide or disclose to LICENSEE prior to
the Effective Date or during the Term of this Agreement for the purpose of
researching, developing or manufacturing Licensed Products, and the first-mover
advantage imparted to LICENSEE by those provisions to LICENSEE.  

1.8

[This paragraph left intentionally blank.]  

1.9

"Licensed Method" means any method that uses Technology, or is claimed by a
Valid Claim within the Patent Rights the use of which would constitute, but for
the license granted to LICENSEE under this Agreement, misappropriation of
Technology or an infringement, an inducement to infringe or contributory
infringement, of any pending or issued Valid Claim within Patent Rights.

 

2

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1.10

"Licensed Product" means any service, composition or product that uses
Technology, or is claimed by a Valid Claim within the Patent Rights, or that is
produced or enabled by Licensed Method, or the manufacture, use, sale, offer for
sale, or importation of which would constitute, but for the license granted to
LICENSEE under this Agreement, misappropriation of Technology or an
infringement, an inducement to infringe or contributory infringement, of any
pending or issued Valid Claim within the Patent Rights.  

1.11

"Net Sales" means the total of the gross invoice prices of Licensed Products
sold or leased by LICENSEE, Sublicensee, Affiliate, or any combination thereof,
less the sum of the following actual and customary deductions where applicable
and separately listed:  cash, trade, or quantity discounts; sales, use, tariff,
import/export duties or other excise taxes imposed on particular sales (except
for value-added and income taxes imposed on the sales of Licensed Product in
foreign countries); transportation charges; or credits to customers because of
rejections or returns. For purposes of calculating Net Sales, transfers to a
Sublicensee or an Affiliate of Licensed Product under this Agreement for (i) end
use (but not resale) by the Sublicensee or Affiliate shall be treated as sales
by LICENSEE at the invoiced price of LICENSEE in an arm-length transaction, or
(ii) resale by a Sublicensee or an Affiliate shall be treated as sales at the
list price of the Sublicensee or Affiliate, but in no event shall both (i) and
(ii) be considered in cumulative fashion.  In addition any “compassionate use”
sales or other similar private benefit sales of Licensed Product permitted by
law in the relevant country before commercial launch in such country shall not
be deemed to be included within Net Sales hereunder for any such Licensed
Product that is transferred or sold at or below the cost of goods for producing
such Licensed Product and without any profit on the basis of such Net Sales with
the proviso that should LICENSEE include overhead or other non-customary costs
in such compassionate use sales then such overhead or other non-customary costs
will be treated as “Net Sales” and will be subject to the earned royalty
provision in Paragraph 3.1(d).

1.12

“Patent Costs” means all reasonable and documented expenses for the preparation,
filing, prosecution, and maintenance of all United States and foreign patents
included in Patent Rights. Patent Costs shall also include reasonable and
documented out-of-pocket expenses for patentability opinions, inventorship
review and determination, preparation and prosecution of patent application,
re-examination, re-issue, interference, opposition activities related to patents
or applications in Patent Rights.

1.13

"Materials" shall mean Original Material, Progeny, and Unmodified Derivatives,
and Modifications as defined in this Paragraph 1.13.  Materials shall not
include any other substances created by the LICENSEE through the use of the
Materials which are not Modifications, Progeny, or Unmodified Derivatives.

 

(a)

"Original Material" shall mean the material described in Appendix A, as provided
to LICENSEE by Inventor under this Agreement.

 

(b)

"Progeny" shall mean unmodified descendant from the Original Material, such as
virus from virus, cell from cell, or organism from organism.

 

3

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(c)

"Unmodified Derivatives" shall mean substances created by or at the behest of
LICENSEE, a Sublicensee, or an Affiliate, which constitute an unmodified
functional subunit or product expressed by the Original Material or its Progeny.
Some examples include: subclones of unmodified cell lines, purified or
fractionated subsets of the Original Material or Progeny, proteins expressed by
DNA/RNA, monoclonal antibodies secreted by a hybridoma cell line, or purified
proteins expressed or secreted by a cell line, or cells or other material
extracted from a model organism.  

 

(d)

"Modifications" shall mean substances created by or at the behest of LICENSEE, a
Sublicensee, or an Affiliate which contain or incorporate, in whole or in part,
the Original Material, Progeny, and/or Unmodified Derivatives.

1.14

"Major Market Region" shall mean any of the following countries or regions:
[***].

1.15

“Valid Claim” shall mean in the applicable country any claim of: (a) a pending
application within the Patent Rights which has not been pending for more than
seven (7) years from the earliest priority date claimed; and/or (b) an issued
and unexpired patent included in the Patent Rights that has not been abandoned,
lapsed, disclaimed, or held unenforceable, unpatentable or invalid by a decision
of a court or tribunal of competent jurisdiction, that is unappealable or
unappealed within the time allowed for appeal.

ARTICLE 2.  GRANTS

2.1License.  Subject to Article 5.1 ("patent costs reimbursement obligations")
and to the limitations set forth in this Agreement, Cornell hereby grants to
LICENSEE, and LICENSEE hereby accepts, an exclusive license under Patent Rights
to make and have made, to use and have used, to sell and have sold, to offer for
sale, and to import and have imported Licensed Products and to practice Licensed
Methods and to use Technology, in the Field within the Territory and during the
Term.

The license granted herein is exclusive for Patent Rights and is non-exclusive
for Technology.  Cornell hereby undertakes and covenants not to grant any
license with respect to Technology to any third party to use any of the
Technology within the Field during the Term. Upon the expiration of the Term,
the license granted herein shall be considered a fully-paid, perpetual and
royalty-free license.

LICENSEE may extend the rights granted above to its Affiliates provided that
LICENSEE shall first provide to Cornell a written assurance from each of its
Affiliates to comply with all applicable terms, conditions and obligations to
Cornell.

2.2Sublicense.  

(a)The license granted in Paragraph 2.1 includes the right of LICENSEE to grant
Sublicenses (including through multiple tiers) to third parties during the Term
but only for as long as, and only in parts of the Field, for which the license
for Patent Rights is exclusive.

 

4

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(b)With respect to Sublicense granted pursuant to Paragraph 2.2(a), LICENSEE
shall: 

(i)not receive, or agree to receive, anything of value in lieu of cash as
consideration from a third party under a Sublicense granted pursuant to
Paragraph 2.2(a) without the prior written consent of  Cornell, such consent not
to be unreasonably refused; provided, however, that in the event that, prior to
the execution of any such Sublicense, LICENSEE and Cornell discuss and agree in
good faith on the treatment of any such non-cash consideration and how to apply
an appropriate percentage of such non-cash consideration or the revenue
resulting to LICENSEE attributable to any such non-cash consideration in
percentages equal to the percentages as set forth below for Sublicense fees,
then the requirement to obtain the consent of Cornell under this subsection
2.2b(i) shall not apply;

(ii)to the extent applicable, include all of the rights of and obligations due
to Cornell (and, if applicable, the Sponsor's Rights) and contained in this
Agreement;

(iii)promptly provide Cornell with a copy of each Sublicense issued and any
amendment made to any Sublicense; and

(iv)collect and guarantee payment of all payments due, directly or indirectly,
to Cornell from Sublicensees and summarize and deliver all reports due, directly
or indirectly, to Cornell from Sublicensees.

(c)Unless a Sublicense receives written consent from Cornell prior to its
issuance by LICENSEE to the Sublicensee and becomes effective, upon termination
of this Agreement for any reason, Cornell, at its sole discretion, shall
determine whether LICENSEE shall cancel or assign to Cornell said Sublicense.

2.3Reservation of Rights.  Cornell reserves the right to:

(a)use the Invention, Technology and Patent Rights solely for its own
educational and academic research purposes, but not in the context of any
third-party commercially-sponsored research or with or for the benefit of any
third-party for-profit or third-party commercial entity;

(b)publish or otherwise disseminate any information about the Invention and
Technology at any time subject to the applicable publication provisions under
the related Sponsored Research Agreement referenced in Paragraph 3.4; and

(c)allow other nonprofit academic institutions to use Invention, Technology and
Patent Rights solely for their own educational and academic research purposes,
provided, however, that Cornell shall not grant affirmative rights to such
nonprofit institutions to use any Invention, Technology or Patent Rights for use
in the context of any commercially-sponsored research or with or for the benefit
of any for-profit or commercial entity.

 

5

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ARTICLE 3.  CONSIDERATION

3.1Fees and Royalties.  The parties hereto understand that the fees and
royalties payable by LICENSEE to Cornell under this Agreement are partial
consideration for the license granted herein to LICENSEE under Technology, and
Patent Rights. LICENSEE shall pay Cornell:

(a)in recognition of LICENSEE being a new start-up business, a license issue fee
of  [***], of which [***] shall be paid in cash within thirty (30) days of
Effective Date and [***] shall be paid in the form of a convertible promissory
note attached herein as Appendix B and issued by LICENSEE to Cornell
contemporaneously with the execution of this Agreement which shall be
convertible into cash or shares of stock in LICENSEE upon either the completion
of a Series B round of financing by LICENSEE which raises at least at [***] or
one year from the Effective Date, whichever shall occur sooner.

(b)license maintenance fees payable on each anniversary of the Effective Date
according to the following schedule;  provided however, that LICENSEE's
obligation to pay this fee shall end on the date when LICENSEE is commercially
selling a Licensed Product in the first country of the Territory, and the
license maintenance fee payable shall be pro-rated for the number of months
remaining in that license year.

 

Fee payable to Cornell

Date

[***]

1st - 3rd anniversaries of Effective Date

[***]

4th anniversary of Effective Date

[***]

5th anniversary of Effective Date

[***]

6th anniversary of Effective Date and each subsequent anniversary thereafter,
until the date of first commercial sale of a Licensed Product in the first
country of sale

 

(c)milestone payments in the amounts payable according to the following schedule
or events:

 

Amount

Date or Event

[***]

Filing of an IND

[***]

Completion of a Phase II clinical trial

[***]

Completion of a Phase III clinical trial

[***]

Marketing approval from the US FDA for first indication

[***]

Marketing approval in each non-US Major Market Region for first indication

[***]

Marketing approval from the US FDA for additional indications

[***]

Marketing approval in each non-US Major Market Region for each additional
indication

 

 

6

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(d)an earned royalty 

(i)of [***] on Net Sales of Licensed Products by LICENSEE and/or its
Affiliate(s) in countries where the manufacture, use or sale of the Licensed
Product is covered by a Valid Claim within the Patent Rights that exists in the
country of sale and at the time of sale, subject to the anti-stacking provisions
set forth in sub-paragraph (iii) below but provided, however, that in no event
shall the amount payable to Cornell under this sub-paragraph 3.1(d)(i) be less
than [***] of Net Sales.

(ii)[***] on Net Sales of Licensed Products by LICENSEE and/or its Affiliate(s)
in countries where a Valid Claim within the Patent Rights which covers the
manufacture, use or sale of the Licensed Product does not exist at the time of
sale, until the expiration of the Term, which is not subject to the
anti-stacking provisions set forth in sub-paragraph (iii) below.

(iii)In the event LICENSEE is required to pay royalties to one or more third
parties for patent rights necessary to manufacture, use or sell any Licensed
Products, and the total royalties payable by LICENSEE would exceed [***] of Net
Sales, then LICENSEE may deduct [***] from the earned royalties payable to
Cornell for every [***] LICENSEE actually pays to said third parties of the
amount LICENSEE pays above the [***] of Net Sales, but the said deduction shall
not be applicable once the royalties paid to Cornell are lowered to [***] of Net
Sales as described above in 3.1(d)(i).

(iv)For clarity, in the event that a royalty obligation would apply to a
Licensed Product under this Agreement as well as under any other license
agreement entered into between LICENSEE and Cornell or any of its Affiliates,
then only one royalty rate shall apply for such Licensed Product and the royalty
rates shall not be stacked or otherwise considered cumulative or additive upon
any such Licensed Product, and only the highest royalty rate applicable under
any such agreement between the Parties shall apply to Net Sales of such Licensed
Product.

(e)a percentage of all Sublicense fees received by LICENSEE from its
Sublicensees that are not earned royalties according to the following schedule;

 

Percentage of the Sublicense fees to be shared with and payable to Cornell

Events achieved by LICENSEE related to the timing of the issuance of each
Sublicense by LICENSEE

[***]

Prior to filing an IND

[***]

After filing an IND but before completion of the first human studies

[***]

After completion of first human studies but prior to submitting a BLA for
approval in a Major Market

 

(f)on each and every Sublicense royalty payment received by LICENSEE from its
Sublicensees on sales of Licensed Product by Sublicensee, the higher of (i) the
relevant percentage described in Paragraph 3.1(e) of the royalties received by
LICENSEE; or the (ii) royalties based on the royalty rate in Paragraph  3.1(d)
as applied to Net Sales of Sublicensee;  

 

7

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provided, however that, for clarity, in the event that a Sublicense fee or
Sublicense royalty would apply to a Licensed Product under this Agreement as
well as under any other license agreement entered into between LICENSEE and
Cornell or any of its Affiliates, then only one Sublicense fee or Sublicense
royalty rate shall apply for such Licensed Product and the Sublicense fees or
Sublicense royalties shall not be stacked or otherwise considered cumulative or
additive upon any such Licensed Product, and only the highest Sublicense fee or
Sublicense royalty rate applicable under any such agreement between the Parties
shall apply to Net Sales of such Licensed Product by any Sublicensee.   

(g)beginning the calendar year of commercial sales of the first License Product
by LICENSEE, its Sublicensee, or an Affiliate and if the total earned royalties
paid by LICENSEE under Paragraphs 3.1(d) and (f) to Cornell in any such year
cumulatively are less than the amount (“minimum annual royalty”) illustrated
below:

 

Year of Commercial Sale

Minimum Annual Royalty

First

[***]

Second

[***]

Third and each year thereafter

[***]

 

LICENSEE shall pay to Cornell on or before February 28 following the last
quarter of such year the difference between amount noted above and the total
earned royalty paid by LICENSEE for such year under Paragraphs 3.1(d) and (f);
provided, however, that for the year of commercial sales of the first Licensed
Product, the amount of minimum annual royalty payable shall be pro-rated for the
number of months remaining in that calendar year.

All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(g)
above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered
by LICENSEE to Cornell as noted in Paragraph 10.1. At Cornell’s election, all
fees and payments specified in Paragraphs 3.1(b), (c), and (g) shall be adjusted
to reflect any increase in the Consumer Price Index as announced by the Bureau
of Labor Statistics of the United States Department of Labor.

3.2Patent Costs.  LICENSEE shall reimburse Cornell all Patent Costs within
thirty (30) days following the date an itemized invoice is sent from Cornell to
LICENSEE.

3.3Due Diligence.

(a)LICENSEE shall, either directly or through its Affiliate(s) or
Sublicensee(s):

(i)use commercially reasonable diligent efforts to proceed with the development,
and commercialization of at least one Licensed Product in the Field and in at
least one Major Market Region;

(ii)raise [***] within [***] of the Effective Date and a further [***] within
[***] of the Effective Date.

 

8

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(iii)raise a total of [***] within [***] of the Effective Date. For clarity, any
portion or all of such amount shall be counted toward the [***] total required
regardless of whether any of such amounts are obtained from existing investors
in LICENSEE as of the Effective Date or from new investors, or whether such
amount represents the cash funds existing and available to any successor to
LICENSEE in the event of a merger, acquisition, consolidation or other business
combination.  

(iv)file an Investigational New Drug Application for a first Licensed Product
within [***] of the Effective Date

(v)commence human testing of a Licensed Product within [***] of the Effective
Date.

(vi)commence a clinical trial intended to provide safety and efficacy data for a
Biologics License Application or its foreign equivalent to the FDA or its
foreign equivalent for a Licensed Product within [***] of the Effective Date.

(vii)submit a Biologics License Application for a Licensed Product to the United
States FDA within [***] of the Effective Date;

(viii)submit the equivalent of a Biologics License Application to the equivalent
of the  FDA in a Major Market other than the US for a Licensed Product within
[***] of the Effective Date;

(ix)market Licensed Products in each country within the Territory within nine
(9) months of receiving regulatory approval to market such Licensed Products in
said country;

(x)reasonably fill the market demand for Licensed Products following
commencement of marketing at any time during the term of this Agreement; and

(xi)obtain and maintain all necessary governmental approvals and permits for the
manufacture, use and sale of Licensed Products.

(b)If LICENSEE fails to perform any of its obligations specified in Paragraphs
3.3(a)(i)-(xi), then Cornell shall issue a Notice of Default to LICENSEE and the
Parties shall discuss in good faith the key reasons for any such delay, and
where any such delay or failure to meet the goals set forth above is due to any
key scientific or technical challenges or complexities, or unexpected
development costs, challenges or complexities or safety issues, manufacturing
challenges or hurdles, commercial factors, IP issues or any other key aspects of
development and commercialization, the Parties shall discuss the matter in good
faith and within sixty (60) days of such Notice of Default, LICENSEE shall
propose in good faith a modified development plan in order to remedy or overcome
any such challenges. If in Cornell’s reasonable judgment, said plan is made in
good faith then, Cornell shall accept such modified development plan in good
faith; provided, however, that in the event that after LICENSEE initiates such
modified development plan, Cornell does not believe that LICENSEE or its
Sublicensee is applying its good faith diligent efforts towards the objectives,
Cornell shall have the right and option to either terminate this Agreement or
change LICENSEE's exclusive license to a nonexclusive license. This right, if
exercised by Cornell, supersedes the rights granted in Article 2.

 

9

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(c)If at any time during the Term, LICENSEE has not begun a genuine product
research and development or business development program for a specific Licensed
Product in any country within the Territory and Cornell receives one ore more
earnest inquiries to license Technology for the commercialization of said
specific Licensed Product in said country, Cornell shall refer such offers to
LICENSE. If LICENSEE fails to satisfy the market demand in said country of the
specific Licensed Product or fails to grant Sublicenses to the inquirers to
satisfy such market demand, Cornell may then exclude said country from the
Territory and license such rights to one or more third parties. 

3.4Research Support.  LICENSEE agrees to provide research support to Inventor to
further develop Invention at Cornell in the amount of [***] total costs per year
for four years under a Sponsored Research Agreement for research relating to the
further development of the Technology and the Patent Rights licensed under this
Agreement, to be negotiated by LICENSEE with the relevant office at Weill
Cornell Medical College.

ARTICLE 4.  REPORTS, RECORDS AND PAYMENTS

4.1Reports.  

(a)Development Reports.  Beginning six months after Effective Date and ending on
the date of first commercial sale of a Licensed Product in the United States,
LICENSEE shall report to Cornell progress covering LICENSEE's (and Affiliate's
and Sublicensee's) activities and efforts in the development of rights granted
to LICENSEE under this Agreement for the preceding six months. The report shall
include, but not be limited to, activities and efforts to develop and test all
Licensed Products and obtain governmental approvals necessary for marketing the
same.  Such semi-annual reports shall be due within sixty days (60) of the
reporting period and shall use the form as provided herein as Appendix C.

(b)Commercialization Reports.  After the first commercial sale of a Licensed
Product anywhere in the world, LICENSEE shall submit to Cornell semi-annual
reports on or before each February 28 and August 31 of each year. Each report
shall cover LICENSEE's (and each Affiliate's and Sublicensee's) most recently
completed calendar half and shall show:

(i)the gross sales and Net Sales (as defined in Paragraph 1.11) during the most
recently completed calendar quarter and the royalties, in US dollars, payable
with respect thereto;

(ii)the number of each type of Licensed Product sold;

(iii)Sublicense fees and royalties received during the most recently completed
calendar half in US dollars, payable with respect thereto;

(iv)the method used to calculate the royalties;

(v)the exchange rates used;

 

10

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(vi)relevant business and corporate development efforts relating to the rights
granted in this Agreement. 

LICENSEE shall provide the above information using the form as shown in Appendix
D and include information on the date of the first commercial sale of each
additional Licensed Product or in each additional country.

If no sales of Licensed Products have been made and no Sublicense revenue has
been received by LICENSEE during any reporting period, LICENSEE shall so report.

4.2Records & Audits.

(a)LICENSEE shall keep, and shall require its Affiliates and Sublicensees to
keep, accurate and correct records of all Licensed Products manufactured, used,
and sold, and Sublicense fees received under this Agreement.  Such records shall
be retained by LICENSEE for at least five (5) years following a given reporting
period.

(b)All records shall be available during normal business hours for inspection at
the expense of Cornell by Cornell’s Internal Audit Department or by a Certified
Public Accountant selected by Cornell and in compliance with the other terms of
this Agreement for the sole purpose of verifying reports and payments or other
compliance issues. Such inspector shall not disclose to Cornell any information
other than information relating to the accuracy of reports and payments made
under this Agreement or other compliance issues. In the event that any such
inspection shows an under reporting and underpayment in excess of five percent
(5%) for any twelve-month (12-month) period, then LICENSEE shall pay the cost of
the audit as well as any additional sum that would have been payable to Cornell
had the LICENSEE reported correctly, plus an interest charge at a rate of [***]
per year. Such interest shall be calculated from the date the correct payment
was due to Cornell up to the date when such payment is actually made by
LICENSEE. For underpayment not in excess of five percent (5%) for any
twelve-month (12-month) period, LICENSEE shall pay the difference within thirty
(30) days without inspection cost but with interest charge per the provisions of
Paragraph 4.3(c).

4.3Payments.

(a)All fees, reimbursements and royalties due Cornell shall be paid in United
States dollars and all checks shall be made payable to "Cornell University",
referencing Cornell's taxpayer identification number, 15-0532082, and sent to
Cornell according to Paragraph 10.1 (Correspondence). When Licensed Products are
sold in currencies other than United States dollars, LICENSEE shall first
determine the earned royalty in the currency of the country in which Licensed
Products were sold and then convert the amount into equivalent United States
funds, using the exchange rate quoted in the Wall Street Journal on the last
business day of the applicable reporting period.

(b)Royalty Payments.

(i)Royalties shall accrue when Licensed Products are invoiced, or if not
invoiced, when delivered to a third party or Affiliate.

 

11

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(ii)LICENSEE shall pay earned royalties semi-annually on or before February 28
and August 31 of each calendar year. Each such payment shall be for earned
royalties accrued within LICENSEE's most recently completed calendar half. 

(iii)Royalties earned on sales occurring or under Sublicense granted pursuant to
this Agreement in any country outside the United States shall not be reduced by
LICENSEE for any taxes, fees, or other charges imposed by the government of such
country on the payment of royalty income, except that all payments made by
LICENSEE in fulfillment of Cornell's tax liability in any particular country may
be credited against earned royalties or fees due Cornell for that country.
LICENSEE shall pay all bank charges resulting from the transfer of such royalty
payments.

(iv)If at any time legal restrictions prevent the prompt remittance of part or
all royalties by LICENSEE with respect to any country where a Licensed Product
is sold or a Sublicense is granted pursuant to this Agreement, LICENSEE shall
convert the amount owed to Cornell into US currency and shall pay Cornell
directly from its US sources of fund for as long as the legal restrictions
apply.

(v)In the event that any patent or patent claim within Patent Rights is held
invalid in a final decision by a patent office from which no appeal or
additional patent prosecution has been or can be taken, or by a court of
competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based solely on that patent or claim or
any claim patentably indistinct therefrom shall cease as of the date of such
final decision. LICENSEE shall not, however, be relieved from paying any
royalties that accrued before the date of such final decision, or that are based
on another patent or claim not involved in such final decision, or that are
based on the use of Technology.

(c)Late Payments.  In the event royalty, reimbursement and/or fee payments are
not received by Cornell when due, LICENSEE shall pay to Cornell interest charges
at a rate of [***] per year. Such interest shall be calculated from the date
payment was due until actually received by Cornell.

ARTICLE 5.  INTELLECTUAL PROPERTY MATTERS

5.1Patent Prosecution and Maintenance.

(a)Provided that LICENSEE has reimbursed Cornell for Patent Costs pursuant to
Paragraph 3.2, Cornell shall diligently prosecute and maintain the United States
and, if available, foreign patents, and applications in Patent Rights using
counsel of its choice. Cornell shall provide LICENSEE with copies of all
relevant documentation relating to such prosecution and to all material
correspondence with the relevant patent offices throughout the world, and
LICENSEE shall keep this documentation confidential. The counsel shall take
instructions only from Cornell, and all patents and patent applications in
Patent Rights shall be assigned solely to Cornell; provided, however, that
LICENSEE shall have the right to provide timely and meaningful input and
comments to Cornell and its selected counsel on the content of any proposed
patent application filings and for all material correspondence with the relevant
patent offices throughout the world for prosecution of the Patent Rights.  In
the event that Cornell declines to file any patent applications

 

12

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within the Patent Rights, Cornell shall notify LICENSEE in writing at least
forty-five days prior to the relevant filing deadlines, and LICENSEE shall have
the right, but not the obligation, to step-in and diligently prosecute and
maintain the United States and, if available, foreign patents, and applications
for such Patent Rights using counsel of its choice.   

(b)Cornell shall consider amending any patent application in Patent Rights to
include claims reasonably requested by LICENSEE to protect the products
contemplated to be sold as Licensed Products by LICENSEE under this Agreement.

(c)LICENSEE may elect to terminate its reimbursement obligations with respect to
any patent application or patent in Patent Rights upon ninety (90) days written
notice to Cornell. Cornell shall use reasonable efforts to curtail or avoid any
further Patent Costs for such application or patent when such notice of
termination is received from LICENSEE. Cornell, in its sole discretion and at
its sole expense, may continue prosecution and maintenance of said application
or patent, and LICENSEE shall have no further license with respect thereto.
Non-payment of any portion of Patent Costs with respect to any application or
patent may be deemed by Cornell as an election by LICENSEE to terminate its
reimbursement obligations with respect to such application or patent. Cornell is
not obligated to file, prosecute, or maintain Patent Rights outside of the
territory at any time or to file, prosecute, or maintain Patent Rights to which
Licensee has terminated its License hereunder.

(d)LICENSEE shall apply for an extension of the term of any patent in Patent
Rights if appropriate under the Drug Price Competition and Patent Term
Restoration Act of 1984 and/or European, Japanese and other foreign counterparts
of this law.  LICENSEE shall prepare all documents for such application, and
Cornell shall execute such documents and to take any other additional action as
LICENSEE reasonably requests in connection therewith.

5.2Patent Infringement.

(a)If either party learns of any substantial infringement of Patent Rights, the
party which first became aware of such infringement shall so inform the other
party and provide the other party with reasonable evidence of the infringement.
Neither party shall notify a third party of the infringement of Patent Rights
without the consent of the other party. Both parties shall use reasonable
efforts and cooperation to terminate infringement without litigation.

(b)LICENSEE may request Cornell to take legal action against such third party
for the infringement of Patent Rights in the Field and within the Territory.
Such request shall be made in writing and shall include reasonable evidence of
such infringement and damages to LICENSEE. If the infringing activity has not
abated ninety (90) days following LICENSEE’s request, Cornell shall elect to or
not to commence suit on its own account. Cornell shall give notice of its
election in writing to LICENSEE by the end of the one-hundredth (100th) day
after receiving notice of such request from LICENSEE. LICENSEE may thereafter
bring suit for patent infringement at its own expense, if and only if Cornell
elects not to commence suit and the infringement occurred in a jurisdiction
where LICENSEE has an exclusive license under this Agreement for the infringing
activity. If LICENSEE elects to bring suit, Cornell and/or CRF may join that
suit at its own expense.

 

13

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(c)Any recovery or settlement received in connection with any suit will (i)
first be shared by Cornell and LICENSEE equally until the actual out-of-pocket
litigation costs of one of the parties are fully recovered; (ii) thereafter, it
shall be provided to the party that has not yet fully recovered its actual
out-of-pocket litigation costs until all such costs are fully recovered; and
(iii) finally, any remaining amount shall then be shared between Cornell and
LICENSEE in a ratio that is proportionate to the actual out-of-pocket litigation
costs incurred by the parties.  If, however, Cornell has no out of pocket costs,
Cornell's share of any remaining amount shall be governed by Paragraph 3.1(f) as
sublicense royalty.  Cornell and LICENSEE agree to be bound by all
determinations of patent infringement, validity, and enforceability (but no
other issue) resolved by any adjudicated judgment in a suit brought in
compliance with this Section 5.2. 

(d)Not withstanding 5.2 (c), any agreement made by LICENSEE for purposes of
settling litigation or other dispute shall comply with the requirements of
Section 2.2 (Sublicenses) of this Agreement.

(e)Each party shall cooperate with the other in litigation proceedings at the
expense of the party bringing suit. Litigation shall be controlled by the party
bringing the suit, except that CRF and/or Cornell may be represented by counsel
of its choice in any suit brought by LICENSEE.

5.3Patent Marking.  LICENSEE shall mark all Licensed Products made, used or sold
under the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.

5.4Ownership of Technology

(a)Cornell retains ownership of Technology.

(b)LICENSEE shall make no use of Technology outside the scope of this Agreement
and the licenses granted hereunder.  Any such use shall be a material breach of
this Agreement.

ARTICLE 6.  GOVERNMENTAL MATTERS

6.1Governmental Approval or Registration.  If this Agreement or any associated
transaction is required by the law of any nation to be either approved or
registered with any governmental agency, LICENSEE shall assume all legal
obligations to do so. LICENSEE shall notify Cornell if it becomes aware that
this Agreement is subject to a United States or foreign government reporting or
approval requirement.  LICENSEE shall make all necessary filings and pay all
costs including fees, penalties, and all other out-of-pocket costs associated
with such reporting or approval process.

6.2Export Control Laws.  LICENSEE shall observe all applicable United States and
foreign laws with respect to the transfer of Licensed Products and related
technical data to foreign countries, including, without limitation, the
International Traffic in Arms Regulations and the Export Administration
Regulations.

 

14

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ARTICLE 7.  TERMINATION OF THE AGREEMENT

7.1Termination by Cornell.  

(a)If LICENSEE fails to perform or violates any term of this Agreement, then
Cornell may give written notice of default ("Notice of Default") to LICENSEE. If
LICENSEE fails to cure the default within forty five (45) days of the Notice of
Default, Cornell may terminate this Agreement and the license granted herein by
a second written notice ("Notice of Termination") to LICENSEE. If a Notice of
Termination is sent to LICENSEE, this Agreement shall automatically terminate on
the effective date of that notice. Termination shall not relieve LICENSEE of its
obligation to pay any fees owed at the time of termination and shall not impair
any accrued right of Cornell.

(b)This Agreement will terminate immediately, without the obligation to provide
written notices as set forth in Paragraph 7.1(a), if LICENSEE initiates a legal
proceeding and files a written claim including in any way the assertion that any
portion of Cornell’s Patent Rights is invalid or unenforceable where the filing
is by the LICENSEE, a third party on behalf of the LICENSEE, or a third party at
the written urging of the LICENSEE.

7.2Termination by LICENSEE.  

(a)LICENSEE shall have the right at any time and for any reason, or merely for
convenience, to terminate this Agreement upon a ninety (90) day written notice
to Cornell. Said notice shall state LICENSEE’s reason for terminating this
Agreement.

(b)Any termination under Paragraph 7.2(a) shall not relieve LICENSEE of any
obligation or liability accrued under this Agreement prior to termination or
rescind any payment made to Cornell or action by LICENSEE prior to the time
termination becomes effective. Termination shall not affect in any manner any
rights of Cornell arising under this Agreement prior to termination.

7.3Survival on Termination.  The following Paragraphs and Articles shall survive
the termination of this Agreement:

(a)Article 4 (REPORTS, RECORDS AND PAYMENTS);

(b)Paragraph 7.4 (Disposition of Licensed Products on Hand);

(c)Paragraph 8.2 (Indemnification);

(d)Article 9 (USE OF NAMES AND TRADEMARKS);

(e)Paragraph 10.2 hereof (Secrecy); and

(f)Paragraph 10.5 (Failure to Perform).

7.4Disposition of Licensed Products on Hand.  Upon termination of this
Agreement, LICENSEE may dispose of all previously made or partially made
Licensed Product within a

 

15

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period of one hundred and twenty (120) days of the effective date of such
termination provided that the sale of such Licensed Product by LICENSEE, its
Sublicensees, or Affiliates shall be subject to the terms of this Agreement,
including but not limited to the rendering of reports and payment of royalties
required under this Agreement.  At the end of such period, LICENSEE shall no
longer have rights to use Technology. 

ARTICLE 8.  LIMITED WARRANTY AND INDEMNIFICATION

8.1Limited Warranty.

(a)Cornell warrants that, without conducting any investigation or any inquiry,
it has the lawful right to grant this license, and that, as of the Effective
Date, its Center for Technology Licensing, has not received written notice from
any third party of any pending or threatened legal action or suit asserting that
the use of the Patent Rights or the Technology as contemplated hereunder for the
development and commercialization of any Licensed Product would infringe or
misappropriate the patent rights or intellectual property rights of any third
party.

(b)The license granted herein is provided “AS IS” and without WARRANTY OF
MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any other
warranty, express or implied. Other than as expressly stated in paragraph (a)
above, Cornell makes no representation or warranty that the Licensed Product,
Licensed Method or the use of Patent Rights or Technology will not infringe any
other patent or other proprietary rights.

(c)In no event shall Cornell be liable for any incidental, special or
consequential damages resulting from exercise of the license granted herein or
the use of the Invention, Licensed Product, Licensed Method or Technology.

(d)Nothing in this Agreement shall be construed as:

(i)a warranty or representation by Cornell  as to the validity or scope of any
Patent Rights;

(ii)a warranty or representation that anything made, used, sold or otherwise
disposed of under any license granted in this Agreement is or shall be free from
infringement of patents of third parties;

(iii)an obligation to bring or prosecute actions or suits against third parties
for patent infringement except as provided in Paragraph 5.2 hereof;

(iv)conferring by implication, estoppel or otherwise any license or rights under
any patents of Cornell Research Foundation, Inc. or Cornell other than Patent
Rights as defined in this Agreement; or

(v)an obligation to furnish any know-how not provided in Patent Rights or  
Technology; or

(vi)an obligation to update Technology.

 

16

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8.2Indemnification. 

(a)LICENSEE shall indemnify, hold harmless and defend Cornell, its officers,
employees, and agents; the sponsors of the research that led to the Invention;
and the Inventors of the patents and patent applications in Patent Rights and
their employers (the “Cornell Indemnitees”) against any and all claims, suits,
losses, damage, costs, fees, and expenses (“Claims”) resulting from or arising
out of exercise of this license by LICENSEE or any of its Affiliates or any
Sublicense by any Sublicensee. This indemnification shall include, but not be
limited to, any product liability Claims, but shall expressly exclude any Claims
to the extent attributable to (i) the willful misconduct or gross negligence of
any of the Cornell Indemnitees, or (ii) the breach by Cornell or any of the
Cornell Indemnitees of any provision of this Agreement or of any representation,
warranty or covenant made by Cornell hereunder.

(b)LICENSEE, at its sole cost and expense, shall insure its activities in
connection with the work under this Agreement and obtain, keep in force and
maintain insurance or an equivalent program of self insurance as follows:

(i)Prior to the first “in human” test of a Licensed Product:  comprehensive or
commercial general liability insurance (contractual liability included) with
limits of at least: (A) each occurrence, one million dollars (US$1,000,000); (B)
products/completed operations aggregate, five million dollars (US$5,000,000);
(C) personal and advertising injury, one million dollars (US$1,000,000); and (D)
general aggregate (commercial form only), five million dollars (US$5,000,000);
and

(ii)Commencing upon the first “in human” test of a Licensed
Product:  comprehensive or commercial general liability insurance (contractual
liability included) with limits of at least: (A) each occurrence, five million
dollars (US$5,000,000); (B) products/completed operations aggregate, ten million
dollars (US$10,000,000); (C) personal and advertising injury, five million
dollars (US$5,000,000); and (D) general aggregate (commercial form only), ten
million dollars (US$10,000,000); and

(ii)the coverage and limits referred to above shall not in any way limit the
liability of LICENSEE.

(c)LICENSEE shall, within ninety (90) days of Effective Date and annually
thereafter on anniversary of Effective Date for the life of the Agreement,
furnish Cornell with certificates of insurance showing compliance with all
requirements. Such certificates shall: (i) provide for seven (7) day advance
written notice to Cornell of any modification; (ii) indicate that Cornell has
been endorsed as an additionally insured party under the coverage referred to
above; and (iii) include a provision that the coverage shall be primary and
shall not participate with nor shall be excess over any valid and collectable
insurance or program of self-insurance carried or maintained by Cornell.

(d)Cornell shall notify LICENSEE in writing of any claim or suit brought against
Cornell in respect of which Cornell intends to invoke the provisions of this
Article. LICENSEE shall keep Cornell informed on a current basis of its defense
of any claims under this Article.

 

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ARTICLE 9.  USE OF NAMES AND TRADEMARKS

9.1Nothing contained in this Agreement confers any right to use in advertising,
publicity, or other promotional activities any name, trade name, trademark, or
other designation of either party hereto (including contraction, abbreviation or
simulation of any of the foregoing). Unless required by law, the use by LICENSEE
of the name, "Cornell University" is prohibited, without the express written
consent of Cornell.

9.2Cornell may disclose to the Inventors the terms and conditions of this
Agreement upon their request. If such disclosure is made, Cornell shall request
the Inventors not disclose such terms and conditions to others, and all such
Inventors shall be required to maintain such information as Confidential
Information, subject to the obligations of confidentiality and non-use set forth
in Section 10.2.  

9.3Cornell may acknowledge the existence of this Agreement and the extent of the
grant in Article 2 to third parties, but Cornell shall not disclose the
financial terms of this Agreement to third parties, except where Cornell is
required by law or the order of a court of competent jurisdiction to do so.

9.4LICENSEE may acknowledge or make press releases regarding the existence of
this Agreement and the extent of the grant in Article 2 but LICENSEE shall not
disclose the financial terms of this Agreement, except where LICENSEE is
required by law or by the order of a court of competent jurisdiction to do so,
or as is reasonably necessary to be disclosed to any of LICENSEEs existing or
bona fide potential investors, acquirers, or collaborators. To the extent
LICENSEE makes any forward-looking statement in its press releases mentioning
Cornell, LICENSEE shall receive prior consent of Cornell which shall not be
unreasonably withheld.

ARTICLE 10.  MISCELLANEOUS PROVISIONS

10.1Correspondence.  Any notice, invoice or payment required to be given to
either party under this Agreement shall be deemed to have been properly given
and effective:

(a)on the date of delivery if delivered in person;

(b)on the date of successful transmission if sent by facsimile,

(c)one (1) day after the successful transmission in pdf file format if sent by
electronic mail using the Internet; or

(d)five (5) days after mailing if mailed by first-class or certified mail,
postage paid, to the respective addresses given below, or to such other address
as is designated by written notice given to the other party.

 

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If sent to LICENSEE:

Reports and Notices Contact:

Annapurna Therapeutics

3711 Market Street, Suite 800

Philadelphia, PA 19104

Attention: Amber Salzman

Tel: [***]

email: amber@annapurnatx.com

Accounts Payable Contact:

Annapurna Therapeutics

3711 Market Street, Suite 800

Philadelphia, PA 19104

Attention: Amber Salzman

Tel: [***]

email: amber@annapurnatx.com

Intellectual Property Contact:

Annapurna Therapeutics

3711 Market Street, Suite 800

Philadelphia, PA 19104

Attention: Amber Salzman

Tel: [***]

email: amber@annapurnatx.com

If sent to Cornell:

For all correspondence except payments -

Center for Technology Licensing at Cornell University

Attention: Executive Director

395 Pine Tree Road, Suite 310

Ithaca, NY 14850

FAX:607-254-5454

TEL:607-254-5236

EMAIL: ctl-contracts@cornell.edu

For all payments -

If sent by mail:

Center for Technology Licensing at Cornell University

PO Box 6899

Ithaca, NY 14851-6899

 

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If remitted by electronic payments via ACH or Fed Wire:

 

Receiving bank name:

[***]

Bank account no.:

[***]

Bank routing (ABA) no.:

SWIFT code:

[***]

[***]

Bank account name:

[***]

Bank ACH format code:

[***]

Bank address:

[***]

Additional information:

[***]

[***]

 

An email or FAX copy of the wire transfer transaction receipt shall be sent to
Director for Finance and Operations at ctl-contracts@cornell.edu or
607-254-5454, respectively. LICENSEE is responsible for all bank charges of wire
transfer of funds for payments. The bank charges shall not be deducted from
total amount due to Cornell.

10.2Secrecy.

(a)"Confidential Information" shall mean information, including Technology,
relating to the Invention and disclosed by Cornell to LICENSEE during the term
of this Agreement, which if disclosed in writing shall be marked "Confidential",
or if first disclosed otherwise, shall within thirty (30) days of such
disclosure be reduced to writing by Cornell and sent to LICENSEE:

(b)Licensee shall:

(i)use the Confidential Information for the sole purpose of performing under the
terms of this Agreement;

(ii)safeguard Confidential Information against disclosure to others with the
same degree of care as it exercises with its own data of a similar nature;

(iii)not disclose Confidential Information to others (except to its employees,
agents or consultants who are bound to LICENSEE by a like obligation of
confidentiality) without the express written permission of Cornell, except that
LICENSEE shall not be prevented from using or disclosing any of the Confidential
Information that:

 

(A)

LICENSEE can demonstrate by written records was previously known to it;

 

(B)

is now, or becomes in the future, public knowledge other than through acts or
omissions of LICENSEE;

 

20

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(C)

is lawfully obtained by LICENSEE from sources independent of Cornell; or 

 

(D)

is required to be disclosed by law or a court of competent jurisdiction; and

(c)The secrecy obligations of LICENSEE with respect to Confidential Information
shall continue for a period ending five (5) years from the termination date of
this Agreement.

10.3Assignability.  This Agreement may be assigned by Cornell, but is personal
to LICENSEE and assignable by LICENSEE only with the written consent of Cornell,
such consent not to be unreasonably withheld; provided, however, that LICENSEE
shall, subject to an assignment fee payment of [***] paid in advance of the
assignment date by LICENSEE to Cornell, have the right to assign this Agreement
and any of its obligations hereunder, without the consent of Cornell, to any of
its Affiliates or to any successor or transferee in connection with a merger,
acquisition, consolidation or other business combination or sale or other
disposition of all or substantially all of LICENSEE’s business or assets
relating to the subject matter hereof so long as such of its Affiliates, or any
successor or transferee do not have any of the qualities or statuses set forth
in the following sentence and further provided that LICENSEE is in good standing
with respect to this Agreement.  As illustrative examples, withholding of
consent by Cornell shall be considered reasonable for a proposed assignment by
LICENSEE to a third party which does not have the necessary resources to
commercially develop the licensed Patent Rights, which is in active litigation,
arbitration proceedings or other contractual dispute with Cornell at the time of
assignment, which is associated with or is controlled by one or more
organizations known to be affiliated with countries that are considered by the
U.S. government as rogue, which is considered as a business that does not seek
to actively make technology available to the public in commerce, which is
engaged in “patent troll” activities, or whose association with Cornell will
materially negatively impact Cornell’s reputation as an academic
institution.  In all cases of permitted assignment the assignee must have agreed
in writing to assume and comply with LICENSEE’s obligations (or Cornell’s
obligations if Cornell is assigning this Agreement) under, and to be bound by,
this Agreement.

10.4No Waiver.  No waiver by either party of any breach or default of any
covenant or agreement set forth in this Agreement shall be deemed a waiver as to
any subsequent and/or similar breach or default.

10.5Failure to Perform.  In the event of a failure of performance due under this
Agreement and if it becomes necessary for either party to undertake legal action
against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.

10.6Governing Laws.  THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, but the scope and validity of
any patent or patent application shall be governed by the applicable laws of the
country of the patent or patent application.

 

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10.7Force Majeure.  A party to this Agreement may be excused from any
performance required herein if such performance is rendered impossible or
unfeasible due to any catastrophe or other major event beyond its reasonable
control, including, without limitation, war, riot, and insurrection; laws,
proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other
serious labor disputes; and floods, fires, explosions, or other natural
disasters.  When such events have abated, the non-performing party's obligations
herein shall resume. 

10.8Headings.  The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.

10.9Entire Agreement.  This Agreement embodies the entire understanding of the
parties and supersedes all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof.

10.10Amendments.  No amendment or modification of this Agreement shall be valid
or binding on the parties unless made in writing and signed on behalf of each
party.

10.11Severability.  In the event that any of the provisions contained in this
Agreement is held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, and this Agreement shall be construed as if the invalid,
illegal, or unenforceable provisions had never been contained in it.

IN WITNESS WHEREOF, both Cornell and LICENSEE have executed this Agreement, in
duplicate originals, by their respective and duly authorized officers on the day
and year written.

 

ANNAPURNA THERAPEUTICS LIMITED

 

CORNELL UNIVERSITY

 

 

 

By:

 

 

By:

 

(Signature of an authorized officer)

 

(Signature of an authorized officer)

 

Name: Amber Salzman, PhD

 

 

Name: Brian J. Kelly, PhD

Title:   CEO

 

Title:  Director, Technology Licensing

 

Date:

 

 

Date:

 

 

 

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Appendix A: Original Material

[***]

 

 

23

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Appendix B: Convertible Note

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.

Annapurna Therapeutics Limited

CONVERTIBLE PROMISSORY NOTE

[***]

December 15, 2015

Annapurna Therapeutics Limited, a registered business in Ireland, (the
"Company"), the principal office of which is located at 9 Upper Pembroke Street,
Dublin 2 for value received hereby and/or as partial consideration of an
intellectual property license (or an amendment to an intellectual property
license) entered into by and between the parties on December 15, 2015 (the
"Agreement:"), promises to pay, at the time and in the manner set forth below,
with interest at the rate set forth below, to the order of Cornell University or
its registered assigns (the "Holder"), the principal sum of [***] plus interest
or at the election of the Holder, the equivalent value in Stock (as later
defined).

The following is a statement of the obligations of the Company and the rights of
the Holder of this Note and the conditions to which this Note is subject, and to
which the Holder hereof, by the acceptance of this Note, and to which the
Company, by the issuance of this Note, mutually agree:

i)Principal and Interest.  Interest will accrue on the principal amount of this
Note at the rate of eight percent (8%) per annum and compounded annually. The
principal balance and all accrued interest thereon are due and payable to Holder
in Company's stock or in cash on the Maturity Date and at the sole discretion of
the Holder. Maturity Date shall be the sooner of:

(a)The date that is twelve (12) months from the date of this Note; or

(b)when Annapurna Therapeutics SAS, a French société par actions simplifiée (RCS
Paris No. 799 863 873) (the “Parent”) receives a bona fide equity investment
offers from one or more third parties that cumulatively with all other equity
investments received by the Parent after the date hereof, equals no less than
[***] in one or more arm-length transactions. An arm-length transaction shall
mean the sale of stock by company to one or more shareholders who, prior to the
sale of the Parent’s stock, do not control or are not controlled by, the Parent.

For the purpose of sub-paragraph (a) above, the principal balance and all
accrued interest shall be paid in cash within thirty (30) days of the Maturity
Date.

For the purpose of sub-paragraph (b) above, the principal balance and all
accrued interest shall be paid, at the sole discretion of the Holder, either in
cash, in the Parent’s stock, or in any

 

24

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combination thereof.  In the event of a payment in the Parent’s stock, the
conversion per share value and the stock class shall be the share price,
discounted at a rate of [***], and class of the stock issued by the Parent in
the equity financing that results in the cumulative sum cited in (b) above being
satisfied (the "Stock").

ii)Events of Default.  If any of the events specified in this Section 2 herein
below shall occur (individually referred to as an "Event of Default"
hereinafter), the Holder of the Note may, so long as such condition exists,
declare the entire principal and unpaid accrued interest hereon immediately due
and payable, by notice in writing to the Company:

(i)Default in the payment of the principal and unpaid accrued interest of this
Note when due and payable if such default is not cured by the Company within
twenty (20) days after the Holder has given the Company written notice of such
default; or

(ii)The institution by the Company of proceedings to be adjudicated as bankrupt
or insolvent, or the consent by it to institution of bankruptcy or insolvency
proceedings against it or the filing by it of a petition or answer or consent
seeking reorganization or release under the federal Bankruptcy Act, or any other
applicable federal or state law, or the consent by it to the filing of any such
petition or the appointment of a receiver, liquidator, assignee, trustee or
other similar official of the Company, or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the taking of corporate action by the Company in furtherance of any such action;
or

(iii)If, within sixty (60) days after the commencement of an action against the
Company (and service of process in connection therewith on the Company) seeking
any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such action shall
not have been resolved in favor of the Company or all orders or proceedings
thereunder affecting the operations or the business of the Company stayed, or if
the stay of any such order or proceeding shall thereafter be set aside, or if,
within sixty (60) days after the appointment without the consent or acquiescence
of the Company of any trustee, receiver or liquidator of the Company or of all
or any substantial part of the properties of the Company, such appointment shall
not have been vacated; or

(iv)Any material change in the Business Plan provided to CTL for the purpose of
negotiating the Agreement and attached the Agreement as Appendix E, to the
extent not approved by CTL.

iii)Prepayment (cash).  The Company may, at its option, at any time, prepay, in
whole or part, the principal and interest due under this Note.

iv)Conversion. In the event the Holder wishes to convert this Note into fully
paid and shares of Stock of the Parent (the "Stock") the following articles
shall apply:

(i)Information Exchange and Conversion Procedure.  Upon the Holder's expression
of an interest to convert this Note, in whole or in part, into shares of Stock
under the provision in paragraph 1(b) above, Company shall promptly provide the
Holders all relevant information regarding the Parent’s private equity financing
details, including but not limited to the share price and class of the Stock. If
the Holder, after evaluating the Stock offer elects to convert

 

25

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any portion of this Note into Stock, the Holder shall surrender this Note, duly
endorsed, at the principal office of the Company and shall give written notice
(Exhibit A) by mail, postage prepaid, to the Company at its principal corporate
office, of the election to convert the same pursuant to this Section 5, and
shall state therein the portion of the Note to be paid in cash and the portion
of the Note to be converted into Stock with the name or names in which the
certificate or certificates for shares of the Stock are to be issued. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of this Note, and the person or persons
entitled to receive the shares of Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of Stock
as of such date. 

(ii)Rights of the Holder.  Upon the conversion of this Note into the Stock, the
Parent shall issue to the Holder the same type or security, upon the same terms
and subject to the same contractual rights, including, without limitation,
redemption rights, co-sale rights, registration rights, and the Holder shall
execute any documents executed by the investors purchasing the Stock; provided,
however, that the Holder will not be required to:  (A) indemnify the Parent, the
Company or any third party; (B) enter into a voting agreement or otherwise grant
a proxy or power of attorney to any individual or entity; or (C)  agree to any
other provision that is inconsistent with Cornell University’s charter,
non-profit status or charitable purpose or in contradiction with Cornell
University’s role as a non-profit educational and research
institution.  Furthermore, in connection with such conversion, the Company shall
grant to the Holder in writing the following participation rights:

“Participation Rights.  If the Company proposes to sell any equity securities or
securities that are convertible into equity securities of the Company, to
investors in a financing (excluding any strategic, business partnership or
similar transaction), then Cornell University and/or its Assignee (as defined
below) will have the right to purchase up to that portion of the securities
issued in each offering that equals Cornell University’s then-current, fully
diluted percentage ownership of the Company on the same terms and conditions as
are offered to the others in each such financing.  The Company shall provide
Cornell University, and any Assignee of which the Company has notice, with
thirty (30) days’ advance written notice of each such financing, including
reasonable detail regarding the terms and purchasers in the financing.  The term
“Assignee” means (a) any entity that is controlled by Cornell University, or (b)
any entity to which Cornell University’s participation rights under this Section
have been assigned either by Cornell University or another entity.” These rights
will terminate immediately prior to an initial public offering or sale of the
Company.  Cornell University agrees to work with the Company to conform these
participation rights to applicable law and any existing agreements that the
Company may have with other investors, so as to ensure that Cornell University's
participation rights are neither more nor less favorable than those of the
Company's other similarly situated investors.

(iii)Delivery of Certificates.  As promptly as practicable after the conversion
of this Note, the Parent at its expense will issue and deliver to the Holder of
this Note a certificate or certificates for the number of full shares of the
Stock issuable upon such conversion (bearing such legends as are required by
applicable state and federal securities laws in the opinion of counsel to the
Parent), together with any other securities and property to which the Holder is
entitled upon such conversion under the terms of this Note, including a check
payable to the Holder for any cash amounts payable due to the election of the
Holder or of residual value as described in (iii) below.

 

26

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(iv)Fractional Shares; Effect of Conversion.  No fractional shares of the Stock
shall be issued upon conversion of this Note. In lieu of the Parent issuing any
fractional shares to the Holder upon the conversion of this Note, the Company
shall pay to the Holder the amount of outstanding principal that is not so
converted.  Upon conversion and/or payout in cash of the entire principal
balance of this Note, the Company shall be forever released from all its
obligations and liabilities under this Note, except that the Company shall be
obligated to pay the Holder, within ten (10) days after the date of such
conversion, any interest accrued and unpaid or unconverted to and including the
date of such conversion, and no more. 

6.Notices of Record Date, etc.  In the event of:

(i)Any taking by the Company of a record of the holders of any class of
securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend payable out of
earned surplus at the same rate as that of the last such cash dividend
theretofore paid) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or

(ii)Any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets of the Company to any other person or any
consolidation or merger involving the Company; or

(iii)Any voluntary or involuntary dissolution, liquidation or winding‑up of the
Company, the Company will mail to the holder of this Note at least ten (10) days
prior to the earliest date specified therein, a notice specifying:

(a)The date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right; and

(b)The date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding‑up is expected to
become effective and the record date for determining stockholders entitled to
vote thereon.

7.Reservation of Stock Issuable Upon Conversion.  The Parent shall at all times
reserve and keep available out of its authorized but unissued shares of the
proper class of the Stock, solely for the purpose of effecting the conversion of
the Note, such number of its shares of the Stock as shall from time to time be
sufficient to effect the conversion of the Note; and if at any time the number
of authorized but unissued shares of the proper class of the Stock shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of the Note, in addition to such other remedies as shall be available to the
holder of this Note, the Parent will use its best efforts to take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of the proper class of the Stock to such number
of shares as shall be sufficient for such purposes.  The Company shall cause the
Parent to take all actions required of the Parent pursuant to this Note.

 

27

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

 

8.Assignment.  The rights and obligations of the Company are binding and
personal and may only be assigned or transferred with the written consent by the
Holder, which consent shall not be unreasonably withheld. The rights and
obligations of the Holder of this Note shall be binding and the benefit be
inured, at the discretion of the Holder and in whole or in part, to its
successors, assigns, heirs, administrators and transferees. 

9.Waiver and Amendment.  Any provision of this Note may be amended, waived or
modified only upon the written consent of the Company and the Holder of this
Note.

10.Transfer of this Note or Securities Issuable on Conversion Hereof.  With
respect to any offer, sale or other disposition of this Notes or securities into
which such Note may be converted, the Holder will give written notice to the
Company prior thereto.

11.Treatment of Note.  To the extent permitted by generally accepted accounting
principles, the Company will treat, account and report the Note as debt and not
equity for accounting purposes and with respect to any returns filed with
federal, state or local tax authorities.

12.Notices.  Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or mailed registered or certified mail, postage prepaid, at
the respective address of the parties as set forth herein. Any party hereto may
by notice so given change its address for future notice hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail or telegraphed in the manner set forth above and shall be
deemed to have been received when delivered.

13.No Stockholder Rights.  Unless an election under the provision in
sub-paragraph 1(b) has been made by the Holder according to paragraph 5, nothing
contained in this Note shall be construed as conferring upon the Holder or any
other person the right to vote or to consent or to receive notice as a
stockholder in respect of meetings of stockholders for the election of directors
of the Parent or any other matters or any rights whatsoever as a stockholder of
the Parent; and no dividends shall be payable or accrued in respect of this
Note.

14.Governing law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, excluding that body of law
relating to conflict of laws.

15.Heading; References.  All headings used herein are used for convenience only
and shall not be used to construe or interpret this Note. Except where otherwise
indicated, all returns herein to Sections refer to Sections hereof.

 

28

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IN WITNESS WHEREOF, the Company has caused this Note be issued this fifteenth
day of December, 2015.

 

Annapurna Therapeutics Limited

 

By:

 

 

Its:

 

 

Name of Holder:

 

Cornell University

Address:

 

c/o Center for Technology Licensing at Cornell University

 

 

395 Pine Tree Road, Suite 310

 

 

Ithaca, New York 14850

 

 

 

29

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Exhibit A

NOTICE OF CONVERSION

(To Be Signed Only Upon Conversion of Note)

TO:  Annapurna Therapeutics Limited

The undersigned, the holder of the foregoing Note, hereby surrenders such Note
for conversion into __________ shares of _(class)______________ Stock to the
extent the amount of $____________ unpaid principal amount of such Note, and
requests that the certificates for such shares be issued in the name of, and
delivered to, __________________________ , whose address is
____________________________.

Dated:_____________________

 

 

(Signature must conform in all respects to name of holder as specified on the
face of the Note)

 

 

(Address)

 

 

 

30

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Appendix C: Development Report

 

Company Name

CTL Agreement No

Your Reference No

Reporting Period   ( mm / dd / yyyy )

 

From   ______ / ______ / ______  Through   _____ / ______ / _____

Expected Date of first sale of

Licensed Product(s)

( mm / dd / yyyy )            ______ / ______ / ______

Please Check One

 

Your Company Has:       o      less than 500 employees worldwide     o       500
or more employees worldwide

 

For the reporting period prescribed in the agreement, please provide detailed
answers to the questions listed below. Please attach a separate report to this
sheet if necessary.

 

1. Listing of milestones / performance requirements accomplished during the
reporting period

Done

Completed

Date

In Progress

Anticipated

Date

Not Done

Anticipated

Date

 

 

 

 

 

31

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

 

 

2.  List of Products being developed under this agreement

Product Name

 

Brief

Description

 

 

Status

 

Product Name

 

Brief

Description

 

Status

 

Product Name

 

Brief

Description

 

Status

 

Product Name

 

Brief

Description

 

Status

 

Product Name

 

Brief

Description

 

Status

 

 

3. Total expenditure spent in the reporting period (under this agreement)

 

 

4.Sublicense Activity (if applicable)

List of Sublicenses granted during reporting period

 

List of sublicenses terminated during reporting period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Number of active sublicenses during reporting period

 

 

 

Information reported below will only be used in an aggregated
manner.  Information related to individual licensee will not be released.

 

5. Jobs and Payroll Information

 

Number of Full Time Employee equivalents currently employed by company (do not
count consultants or contractors hired as independent agents)

 

Total current company payroll  for preceding 12 months

 

 

 

32

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

 

6. Financial Information

Amount of equity investment received :

a)For preceding 12 months

 

b)Cumulative total

 

Amount of investment received using other financial instrument to date excluding
equity investment above (e.g. loan, warrant, convertible note etc.)

     a) For preceding 12 months

 

b) Cumulative total

 

Amount of grants and awards received to date.  (e.g. Federal grants, Small
business, Foundation grants, Competition awards) Please list source, amount and
years if applicable.

     a) For preceding 12 months

 

 

 

 

 

 

 

 

 

b) Cumulative total

 

 

 

 

 

 

 

 

 

Estimated market value (private) or market capitalization (public) of company

 

 

 

Report Prepared & Approved By

Name  ( Please Print )

Title

Email

 

 

Signature

Date ( mm / dd / yyyy )

 

_______ / _______ / ___________  

 

Please submit completed report either via mail or email at address below:

Center for Technology Licensing

At Cornell University

395 Pine Tree Rd., Suite 310

Ithaca, NY 14850

ctl-contracts@cornell.edu

 

 

 

 

33

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Appendix D: Commercialization Report

 

Company Name

CTL Agreement No

Your Reference No

Reporting Period   ( mm / dd / yyyy )

 

From   _______ / _______ / _____________  Through   _______ / _______ /
______________  

Date of first sale of

Licensed Product(s)                      

( mm / dd / yyyy )                   ________ / ________ / _____________

 

 

Please list all trade names for product(s) incorporating licensed rights whether
or not you had sales during this reporting period.

Product Name

 

Licensed Invention or Patent Rights (No.) used if known or Docket No

Country

Number of Units Sold

Gross Sales

Net Sales

( A )

Royalty Rate1

( B )

 

 

 

Total Royalties

( A * B )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Please refer to the license agreement for:

· applicable royalty rate, please provide as decimal;

· how Net Sales should be calculated;

· applicable share of sublicense fees;

· application of minimum royalty rate

· If sales were in a currency other than United States Dollars, please specify
exchange rate used

2 Subtract minimum royalty already paid from royalty subtotal for Total Royalty
Owed

Royalty Subtotal

 

 

Minimum Royalty already paid*

 

 

Total Royalty Owed2

 

 

Total Sublicense Fees* (if applicable)

 

 

Total Payment

 

 

 

 

34

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

 

Sublicense Activity (if applicable)

List of sublicenses granted during the reporting period

 

List of sublicenses terminated or expired during the reporting period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Number of active sublicenses during reporting period

 

 

 

 

List of Products being developed under this agreement

Product Name

 

Brief Description

 

Status

 

Product Name

 

Brief Description

 

Status

 

Product Name

 

Brief Description

 

Status

 

Product Name

 

Brief Description

 

Status

 

Product Name

 

Brief Description

 

Status

 

 

 

List of Licensed Product(s) Not Manufactured in the US

Product Name

 

Product Name

 

Product Name

 

Product Name

 

 

 

35

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

 

 

Jobs and Payroll Information

Number of Full Time Employee equivalents currently employed by company (do not
count consultants or contractors hired as independent agents)

 

Total current company payroll  for preceding 12 months

 

 

Financial Information

Amount of equity investment received :

 

c)    For preceding 12 months

 

d)    Cumulative total

 

Amount of investment received using other financial instrument to date excluding
equity investment above (e.g. loan, warrant, convertible note etc.)

     a) For preceding 12 months

 

c) Cumulative total

 

Amount of grants and awards received to date.  (e.g. Federal Agency, Small
business, NSF grants) Please list source, amount and years if applicable.

     a) For preceding 12 months

 

 

 

 

 

 

 

b) Cumulative total

 

 

 

 

 

 

 

Estimated market value of company (best guess)

 

 

Report Prepared & Approved By

Name  ( Please Print )

Title

Email

 

 

Signature

Date ( mm / dd / yyyy )

 

 

_________ / _________ / ______________  

 

 

 

36

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Appendix E: Business Plan

[***]

THE REMAINDER OF THIS PAGE AND THE FOLLOWING 41 PAGES HAVE BEEN OMITTED AND
FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT.

 

 

37