Exhibit 10.28

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

LICENSE AGREEMENT

 

This License Agreement is effective as of August 8th, 2014 (the “Effective
Date”), by and between THE SCRIPPS RESEARCH INSTITUTE, a California nonprofit
public benefit corporation (“TSRI”), and FABRUS, INC., a Delaware corporation
(“Licensee”), each located at the respective address set forth in Section 13.16
below, with respect to the facts set forth below.

 

RECITALS

 

A.  TSRI is engaged in fundamental scientific biomedical and biochemical
research including research relating to stem cell transduction.

 

B.  Licensee is engaged in the research and development of therapeutic products
for rare and severe diseases.

 

C.  TSRI has disclosed to Licensee certain technology and TSRI has the right to
grant a license to the technology, subject to certain rights of the U.S.
Government resulting from the receipt by TSRI of certain funding from the U.S.
Government.

 

D.  TSRI desires to grant to Licensee, and Licensee wishes to acquire from TSRI,
a license to certain patent rights of TSRI, all subject to the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein, TSRI and Licensee hereby agree as follows:

 

1.           Definitions. Capitalized terms shall have the meaning set forth
herein.

 

1.1           Affiliate. The term “Affiliate” shall mean any entity which
directly or indirectly controls, or is controlled by Licensee. The term
“control” as used herein means (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares
entitled to vote for the election of directors; or (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interests with the power to direct the management and
policies of such non-corporate entities. The term “Licensee” as used throughout
this Agreement also includes its Affiliates.

 

1.2           Challenge. Licensee will be deemed to have made a “Challenge” of
the Licensed Patent Rights if Licensee or a Sublicensee: (a) institutes, or
causes its counsel to institute on Licensee’s or such Sublicensee’s behalf, any
interference, opposition, re-examination or similar proceeding with respect to
any Licensed Patent Right with the U.S. Patent and Trademark Office or any
foreign patent office; or (b) makes any filing or institutes any legal
proceeding, or causes its counsel to make any filing or institute any legal
proceeding on Licensee’s or such Sublicensee’s behalf, with a court or other
governmental body (including, without limitation, the U.S. Patent and Trademark
Office or any foreign patent office) in which one or more claims or allegations
challenges the validity or enforceability of any Licensed Patent Right;
provided, however, that, any such action described in ***.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

1.3           Confidential Information. The term “Confidential Information”
shall mean any and all proprietary or confidential information of TSRI or
Licensee that the applicable party (the “Disclosing Party”) discloses to the
other party (the “Receiving Party”) at any time and from time to time during the
term of this Agreement. The provisions of this Agreement shall be considered the
Confidential Information of both parties. Information shall not be considered
confidential to the extent that the Receiving Party can establish by competent
proof that such information:

 

(a)          is publicly disclosed through no fault of the Receiving Party,
either before or after it becomes known to the Receiving Party;

 

(b)          was known to the Receiving Party prior to the date of this
Agreement, which knowledge was acquired independently and not from the
Disclosing Party (or the Disclosing Party’s employees); or

 

(c)          is subsequently disclosed to the Receiving Party in good faith by a
third party who is not under any obligation to maintain the confidentiality of
such information, and without breach of this Agreement by the Receiving Party.

 

Specific Confidential Information disclosed to a Receiving Party shall not be
deemed to be within any of the foregoing exceptions merely because it is (i)
embraced by more general information in the public domain or in the Receiving
Party’s possession; (ii) a combination of features or data that can be pieced
together by combining individual features or data from multiple sources in the
public domain or in the Receiving Party’s possession to reconstruct the
Confidential Information, but none of which shows the entire combination; and/or
(iii) a selection or part of a document or embodiment where other information in
the same document or embodiment becomes part of the public domain or in the
Receiving Party’s possession.

 

1.4           Field. The term “Field” shall mean all fields of use.

 

1.5           Licensed Patent Rights. The term “Licensed Patent Rights” shall
mean Patent Rights Umbrella and Patent Rights Humanized.

 

1.6           Licensed Product. The term “Licensed Product” shall mean any
product the manufacture, use, sale, offer for sale or importation of which
would, in the absence of the license granted by this Agreement, infringe any of
the Licensed Patent Rights, but excluding products containing or comprising ***.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

1.7           Net Sales. The term “Net Sales” shall mean the gross amounts
invoiced by Licensee and its Sublicensees, or any of them, on all sales of
Licensed Products, less the following items, to the extent directly applicable
to such sales of Licensed Products (if not previously deducted from the amount
invoiced): (a) reasonable and customary trade, quantity and cash discounts
actually granted; (b) reasonable and customary rebates and retroactive price
reductions actually granted, including but not limited to rebates and chargeback
payments granted to managed health care organizations, pharmacy benefit managers
(or equivalents thereof), national, state/provincial, local, and other
governments, their agencies and purchasers and reimbursers, or to trade
customers; (c) credits or allowances actually granted upon claims of
nonconforming Licensed Products, rejections or returns of Licensed Products; (d)
prepaid freight charges for the delivery of Licensed Products; and (e) sales,
use or excise taxes imposed or other governmental taxes charged and actually
paid on the with sale of Licensed Products (but excluding any value added taxes
or taxes based on income or gross receipts Net Sales shall include all
consideration charged by Licensee or Sublicensees in exchange for any Licensed
Products, including without limitation any monetary payments or, with regard to
any other property paid in exchange for any Licensed Products, an amount in cash
equal to the fair market value of such property. For purposes of determining Net
Sales, a sale shall be deemed to have occurred when an invoice therefor is
generated or the Licensed Product is shipped for delivery, whichever occurs
first. Sales of Licensed Products by Licensee to a Sublicensee or Affiliate for
resale or by a Sublicensee to an Affiliate of Licensee for resale shall be
excluded, and only the subsequent sale of such Licensed Products by such
Affiliates or Sublicensees to unrelated parties shall be deemed Net Sales
hereunder. Notwithstanding the foregoing, Net Sales shall not include the use of
any Licensed Product in any clinical, pre-clinical or non-clinical research or
development activities, or provision of License Products in a sampling program
or compassionate use program in which no monetary or other consideration is paid
to or received by Licensee or any Sublicensee.

 

The deductible items listed in sub-clauses (a) – (e) above shall be either (i)
included as line items on the invoice, or (ii) documented as being specifically
attributable to actual sales of Licensed Products in accordance with United
States Generally Accepted Accounting Principles (“GAAP”) or International
Financing Reporting Standards (“IFRS”), as applicable, consistently applied
throughout the organization of the selling party, and provided that such amounts
are included in the quarterly Royalty Reports that Licensee sends to TSRI
pursuant to Section 5.4. If Licensee or other selling party receives refunds or
reimbursements of any amounts deducted as set forth herein, then such refunded
or reimbursed amounts shall be considered Net Sales in the applicable reporting
period in which such refunded or reimbursed amounts are received.

 

1.8           Patent Rights Humanized. The term “Patent Rights Humanized” shall
mean:

 

(a)          Patent application number ***;

 

(b)          United States and foreign counterpart patents or patent
applications claiming and entitled to the priority date of the respective
patents and patent application(s) referenced in sub-clause (a) above;

 

(c)          Divisionals, substitutions, continued prosecution applications,
including requests for continued examination, and continuations of any patents
or patent applications referenced in sub-clauses (a) and (b) above and any
patents issued thereon;

 

(d)          Any claim(s) of a continuation-in-part claiming and entitled to the
priority date of the respective patents and patent application(s) referenced in
sub-clauses (a) - (c) above and any patents issued thereon; and

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

(e)          Reissues, reexaminations, renewals and patent term extensions of
the patents referenced in sub-clauses (a) - (d) above.

 

1.9           Patent Rights Umbrella. The term “Patent Rights Umbrella” shall
mean:

 

(a)          Patent application number ***;

 

(b)          United States and foreign counterpart patents or patent
applications claiming and entitled to the priority date of the respective
patents and patent application(s) referenced in sub-clause (a) above;

 

(c)          Divisionals, substitutions, continued prosecution applications,
including requests for continued examination, and continuations of any patents
or patent applications referenced in sub-clauses (a) and (b) above and any
patents issued thereon;

 

(d)          Any claim(s) of a continuation-in-part claiming and entitled to the
priority date of the respective patents and patent application(s) referenced in
sub-clauses (a) - (c) above and any patents issued thereon; and

 

(e)          Reissues, reexaminations, renewals and patent term extensions of
the patents referenced in sub-clauses (a) - (d) above.

 

1.10         Royalty Report. The term “Royalty Report” shall have the meaning
ascribed to such term as provided in Section 5.4.

 

1.11         Sublicensee. The term “Sublicensee” shall mean any third party to
whom Licensee grants a sublicense or distribution or marketing rights with
respect to the rights conferred upon Licensee under this Agreement, as
contemplated by Section 2.2.

 

1.12         Sublicense Revenues. The term “Sublicense Revenues” shall mean all
revenues and other consideration paid to Licensee in consideration of (a) the
grant by Licensee of a sublicense to the Licensed Patent Rights to any Third
Party that is not an Affiliate, (b) the grant of distribution or marketing
rights with respect to Licensed Products, and/or (c) the sale or other transfer
of that portion of Licensee’s or an Affiliate’s business or assets that relates
to the rights granted under this Agreement. Without limiting the generality of
the foregoing, Sublicense Revenues shall include without limitation all upfront
fees, license fees, milestone payments, technology access fees, premiums above
the fair market value on sales of debt or equity securities of Licensee or of an
Affiliate, annual maintenance fees, and any other payments received in
consideration of such sublicense, distribution or marketing rights or sale or
other transfer. Sublicense Revenues shall include revenues and other
consideration paid to Licensee in consideration of the grant by Licensee of a
sublicense to the Licensed Patent Rights, whether under the agreement in which
the sublicense is granted or under any other agreement entered into between
Licensee as part of the same transaction in which such sublicense is granted.
However, Sublicense Revenues shall exclude: (i) all royalties on a Sublicensee’s
(and its sublicensees’) sales of Licensed Products; (ii) payments for debt or
equity securities of Licensee or of an Affiliate to the extent of the fair
market value of such securities as of the date of receipt of such payments, as
determined by Licensee’s or such Affiliate’s board of directors; (iii)
reimbursement for patent filing, prosecution and maintenance costs of the
Licensed Patent Rights incurred by Licensee; (iv) funding or reimbursement for
costs of research and development activities conducted by Licensee or for the
cost of goods of materials supplied by Licensee in each case to the extent
attributable to the Licensed Patent Rights and/or Licensed Products and which
are incurred after the execution of such sublicense; and (v) any proceeds from
the sale or other transfer of substantially all of Licensee’s business or
assets. Any non-cash Sublicense Revenues received by Licensee shall be valued at
its fair market value as of the date of receipt as mutually determined in good
faith by the parties.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

1.13         Valid Claim. The term “Valid Claim” shall mean a claim of an issued
and unexpired patent within the Licensed Patent Rights that has not been held
invalid or unenforceable by a court or other appropriate governmental body of
competent jurisdiction in a ruling that is unappealed or unappealable within the
time allowed for appeal. The term “Valid Claim” shall also include the claims of
a pending patent application within the Licensed Patent Rights which have not
been pending for a period of more than seven (7) years from the date of first
examination on the merits of that patent application.

 

2.           Grant of License.

 

2.1           Grant of License Under Licensed Patent Rights. TSRI hereby grants
and Licensee accepts, subject to the terms and conditions of this Agreement, a
worldwide, royalty-bearing license, with limited rights to sublicense pursuant
to Section 2.2, under the Licensed Patent Rights to practice the inventions
claimed in the Licensed Patent Rights to make, have made, use, have used, sell,
have sold, offer to sell and import Licensed Products in the Field.

 

2.2           Sublicensing. Licensee shall have the right to grant and authorize
sublicenses (with the right to grant further sublicenses) to any party with
respect to the rights conferred upon Licensee under this Agreement. Any
sublicense granted under this Section 2.2 shall be subject in all respects to
the applicable provisions contained in this Agreement (including without
limitation the provisions regarding governmental interest, reservation of
rights, development efforts, reporting, audit rights, indemnity, insurance,
Challenges, warranty disclaimer, limitation of liability, confidentiality, and
rights upon expiration or termination). In the event of a conflict between this
Agreement and the terms of any sublicense, the terms of this Agreement shall
control. Licensee shall forward to TSRI a copy of any and all fully executed
sublicense agreements within thirty (30) days of execution. Licensee shall at
all times be and remain responsible for the compliance by Sublicensees with the
terms and conditions of this Agreement as applicable to such Sublicensees,
including without limitation the payment of all amounts that may become due
hereunder as a result of any Sublicensees’ activities.

 

2.3           No Other License. This Agreement confers no license or rights by
implication, estoppel or otherwise under any patent applications or patents or
intellectual property of TSRI other than the Licensed Patent Rights regardless
of whether such patent applications, patents or intellectual property are
dominant or subordinate to the Licensed Patent Rights.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

2.4           *** TSRI agrees that it shall not grant any other licenses to
TSRI’s interest in the Licensed Patent Rights other than a license to ***.
***shall exclude products with respect to ***.

 

2.5           Governmental Interest. Licensee and TSRI acknowledge that TSRI has
received, and expects to continue to receive, funding from the United States
Government in support of TSRI’s research activities. Licensee and TSRI
acknowledge and agree that their respective rights and obligations under this
Agreement shall be subject to the rights of the United States Government,
existing and as amended, which may arise or result from TSRI’s receipt of
research support from the United States Government, including without limitation
37 C.F.R. Part 401, the National Institutes of Health (“NIH”) Grants Policy
Statement and the NIH Guidelines for Obtaining and Disseminating Biomedical
Research Resources.

 

2.6           Reservation of Rights. Notwithstanding the license granted under
Section 2.1, TSRI reserves the right to use for any internal research and
educational purposes any Licensed Patent Rights licensed hereunder, without TSRI
being obligated to pay Licensee any royalties or other compensation or to
account to Licensee in any way. In addition, TSRI reserves the right to grant
non-exclusive licenses to use the Licensed Patent Rights for internal research
and educational purposes to other nonprofit or academic institutions, without
the other nonprofit or academic institution being obligated to pay Licensee any
royalties or other compensation or to account to Licensee in any way.

 

3.           Royalties and Other Payments.

 

3.1           Annual Maintenance Fee. Licensee shall pay to TSRI a nonrefundable
minimum annual fee in the amount of ***. The first payment is due on January 1,
2015 and subsequent payments will be made on January 1 of each subsequent
calendar year during the term of this Agreement. Such payments may be credited
against running royalties due for that calendar year and Royalty Reports shall
reflect such a credit. The minimum annual fee shall not be credited against any
milestone payments, Sublicense Payments, royalties due for any preceding or
subsequent calendar year or against any other amounts due by Licensee under this
Agreement.

 

3.2           Running Royalties. Licensee shall pay to TSRI running royalties on
a Licensed Product-by-Licensed Product and country-by-country basis in the
amount of *** of Net Sales of Licensed Products in all countries in which the
manufacture, use, sale, offer for sale or import of such Licensed Product would,
in the absence of the license under the Licensed Patent Rights granted by this
Agreement, infringe one or more Valid Claims in that country.

 

3.3           Royalty Payments. Licensee shall pay to TSRI all royalties
required by Section 3.2 within *** days after the end of each calendar quarter,
based upon Net Sales during the immediately preceding calendar quarter. Licensee
shall make all such royalty payments itself to TSRI, and/or cause its Affiliates
or Sublicensees to pay to TSRI all royalties resulting from Net Sales by its
Affiliates or Sublicensees, within the time period specified in the preceding
sentence.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

3.4           Combination Products. If a Licensed Product is sold in any country
in combination with another active ingredient that is not a Licensed Product
(“Combination Product”), then Net Sales of the Licensed Product portion of such
Combination Product shall be calculated by multiplying the actual gross selling
price of the Combination Product, less the deductions in Section 1.7, by the
fraction A/(A+B), where A is the average gross sale price of the Licensed
Product in such country during the royalty period in question, when sold
separately from such other active ingredient in the same strength and dosage
form, and B is the average gross sale price of the other active ingredient in
that country during the royalty period in question, when sold separately from
the Licensed Product in the same strength and dosage form. If either the
Licensed Product or the other active ingredient is not sold separately in a
given country during that royalty period, or if the average gross sale price of
the Licensed Product or the other active ingredient when sold separately from
each other in such country cannot be determined, then Net Sales of such Licensed
Product portion of the Combination Product shall be as reasonably allocated by
Licensee between such Licensed Product and such other active ingredient based on
the relative value contributed by each component, and as agreed by TSRI, such
agreement not to be unreasonably withheld or delayed.

 

3.5           Royalty Credit. If Licensee, its Affiliate or its Sublicensee is
required to license or acquire technology from a third party because the
manufacture, use, sell, offer for sale or import of any Licensed Product
pursuant to the license to the Licensed Patent Rights granted in Section 2.1
would infringe that third party’s rights unless a license or other right to such
third party technology is obtained, then Licensee may deduct up to *** of
amounts paid to such third party from the payments owing to TSRI for such
Licensed Product. The above offset right is subject to the requirement that (i)
the royalty or other amounts owed to TSRI under this Agreement shall not be
reduced by more than *** of the amounts that would otherwise be due hereunder
without such credit and (ii) if payments to such third party are subject to a
royalty stacking credit, that credit shall be applied to determine the payments
due to the third party, which in turn shall be used to determine the Royalty
Credit applicable to Licensee’s payments to TSRI. Licensee will give TSRI prior
written notice of any third party arrangement prior to seeking to deduct any
payments to the third party under the terms of this Section 3.5 in order to
explain to TSRI the basis for licensing or acquiring rights to such third
party’s technology in accordance with the parameters set forth above.

 

3.6           No Multiple Royalties. No multiple royalties shall be due because
any Licensed Product is covered by more than one of the Licensed Patent Rights.
In such case, Licensee shall pay only one royalty at the applicable rate
pursuant to Section 3.2 above, as adjusted pursuant to Section 3.4 and/or
Section 3.5, as applicable.

 

3.7           Arms-Length Transactions. On sales of Licensed Products which are
made in other than an arm’s-length transaction, the value of the Net Sales
attributed under this Section 3 to such a transaction shall be that which would
have been received in an arm’s-length transaction, based on sales of like
quality and quantity of Licensed Products on or about the time of such
transaction in the applicable country.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

3.8          Payment Increase in the Event of a Challenge.

 

3.8.1           Royalty Increase. Notwithstanding anything to the contrary in
this Agreement, in the event Licensee or a Sublicensee directly or indirectly
institutes or makes any Challenges, the amount of the minimum annual fee and the
milestone payments and the percentage rate for royalties set forth in Section
3.2 shall be doubled during the pendency of such Challenges from the date the
Challenging party first institutes or makes such Challenges and during the
pendency of such Challenges, and shall continue to apply after the conclusion of
such Challenges in the event that at least one (1) Valid Claim that covers a
Licensed Product is held to be valid and enforceable.

 

3.8.2           No Right to Recoup. In the event Licensee or a Sublicensee
directly or indirectly institutes or makes any Challenges, Licensee shall have
no right to recoup, recover, set-off or otherwise get reimbursement of any
royalties, annual fees, Sublicense Payments, milestone payments, patent costs or
other monies paid hereunder to TSRI prior to or during the period of such
Challenges. Licensee hereby voluntarily and irrevocably waives any right to seek
return of such royalties, annual fees, Sublicense Payments, milestone payments,
patent costs or other monies in the event Licensee or a Sublicensee directly or
indirectly institutes or makes any Challenges.

 

3.8.3           Pre-Challenge Requirements. Licensee will provide written notice
to TSRI at least one hundred eighty (180) days prior to Licensee or a
Sublicensee instituting or making any Challenges. Licensee will include with
such written notice a summary description of facts and arguments that support
its contention that any of the Licensed Patent Rights are invalid or
unenforceable. During such one hundred eighty (180) day period, the parties will
discuss the same and attempt in good faith to mutually resolve such issues.

 

3.8.4           Reasonable Provisions. The parties agree that neither of them is
entering into this Agreement with the anticipation that Challenges will be
instituted or made by Licensee or any of its Sublicensees against TSRI, and
consequently the percentage rates for royalties and Sublicense Payments and the
other financial terms and conditions herein reflect that understanding. Licensee
and TSRI further agree that if the parties did expect that such Challenges would
be made against TSRI, the percentage rates for royalties and Sublicense Payments
and the other financial terms and conditions herein would be significantly
higher. Accordingly, the parties agree that the provisions for increasing the
percentage rates for royalties and Sublicense Payments and the other amounts
specified in Section 3.8.1 and the other provisions of this Section 3.8 are
reasonable and reflect a mutual adjustment of certain financial provisions of
this Agreement to accommodate those situations in which a Challenge is made
against TSRI in lieu of increasing the percentage rates for royalties and
Sublicense Payments and the other financial terms and conditions of this
Agreement as of the Effective Date.

 

3.9           Duration of Royalty Obligations. The royalty obligations of
Licensee as to each Licensed Product shall continue on a country-by-country
basis until the expiration of the last to expire Valid Claim that covers such
Licensed Product in that country.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

4.           Additional Consideration.

 

4.1           Sublicense Payments. All Sublicense Revenues shall be reported and
Sublicense Payments (defined below) paid to TSRI by Licensee within thirty (30)
days of Licensee’s receipt of such Sublicense Revenues. Licensee’s reports to
TSRI regarding Sublicense Revenues shall contain an explanation and calculation
of the amount of Sublicense Payments due to TSRI pursuant to the schedule below.
Licensee’s obligation to pay Sublicense Payments to TSRI shall continue for as
long as royalties are due to TSRI pursuant to Section 3.8. Licensee shall pay to
TSRI a non-creditable, non-refundable percentage of Sublicense Revenues
according to the following schedule (“Sublicense Payments”):

 

Date of Sublicense Grant   Percent of Sublicense (from Effective Date)  
Revenues Payable to TSRI       Sublicense agreement executed prior to ***   ***
      Sublicense agreement executed after ***   ***       Sublicense agreement
executed after ***   ***

 

Any milestone payment that Licensee makes to TSRI under Section 4.2 below upon
achievement of a given milestone event by a Sublicensee will be credited against
any payment due under this Section 4.1 only with respect to Sublicense Revenues
received in connection with achievement of the same milestone event and only up
to the amount of the Sublicense Payment due hereunder (i.e., no carry forward
credit if the credit from the milestone payment exceeds the amount of the
Sublicense Payment due for the same milestone event).

 

4.2           Product Development Milestones. Licensee shall pay to TSRI the
following non-creditable, non-refundable amounts for the achievement of the
following product development milestone events within thirty (30) days of the
first achievement of each milestone event with respect to each Licensed Product
by Licensee or its Affiliate or Sublicensee as follows:

 

Milestone Event   Payment       Initiation of ***   ***       Initiation of ***
  ***       Initiation of ***   ***       ***   ***

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

For clarification, each of the foregoing milestone payments shall be payable
only one time for each Licensed Product that is or contains a particular
molecular entity as an active ingredient, and only with respect to the first
achievement of the applicable milestone by a Licensed Product comprising or
containing that same molecular entity, regardless of the number of Licensed
Products comprising or containing that same molecular entity that achieve such
milestone.

 

For purposes of this Agreement, the following definitions shall apply

 

(a)          The term “FDA” means the United States Food and Drug
Administration.

 

(b)          The term “first commercial sale” means the first sale of a Licensed
Product by Licensee or its Affiliate or Sublicensee to a third party that is not
an Affiliate or Sublicensee in a given country after the receipt of all permits,
authorizations, licenses and approvals (or waivers) required for the
commercialization of such Licensed Product in such country (including pricing
and reimbursement approval if required).

 

(c)          The term “IND” means an Investigational New Drug application (as
more fully defined in 21 C.F.R. Part 312, et. seq.) filed with the FDA, or the
equivalent application filed with any equivalent agency or governmental
authority in the European Union or Japan.

 

(d)          The term “Initiation” means, with respect to a clinical trial, the
first dosing of the first patient in such trial.

 

(e)          The term “Phase 1 Trial” means a clinical trial that provides for
the first introduction into humans of a Licensed Product, conducted in normal
volunteers or patients, and would satisfy the requirements for a Phase 1 study
as defined in 21 C.F.R. §312.21(a) (or its successor regulation), or its
equivalent in the European Union or Japan.

 

(f)          The term “Phase 2 Trial” means a clinical trial that is conducted
in human patients to evaluate the safety, dose ranging and efficacy of a
Licensed Product and would satisfy the requirements for a Phase 2 study as
defined in 21 C.F.R. §312.21(b) (or its successor regulation), or its equivalent
in the European Union or Japan.

 

(g)          The term “Phase 3 Trial” means a pivotal clinical trial that is
conducted in human patients with a defined dose or a set of defined doses and
would satisfy the requirements for a Phase 3 study as defined in 21 C.F.R.
§312.21(c) (or its successor regulation), or its equivalent in the European
Union or Japan, and is designed to ascertain efficacy and safety of a Licensed
Product for the purpose of submitting an application for marketing authorization
to the applicable regulatory authority.

 

4.3 ***Sublicensing Payments. TSRI shall pay Licensee *** for the license of
***.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

5.           Development and Commercialization Activities.

 

5.1           Development Plan and Benchmarks. Attached hereto as Exhibit A is
Licensee’s development plan under which Licensee currently intends to bring the
subject matter of the Licensed Patent Rights to the point of commercial use
(“Commercial Development Plan”). Attached hereto as Exhibit B is a list of
benchmarks with respect to development of Licensed Products (“Benchmarks”) and
the target date for meeting such Benchmarks. Licensee shall use commercially
reasonable efforts, itself or through its Sublicensees, to develop and obtain
regulatory approvals to market and sell Licensed Products in the Field as
promptly as is reasonably and commercially feasible, and, subject to obtaining
necessary regulatory approvals, to produce and sell reasonable quantities of
Licensed Products.

 

5.2           Progress Reports. Licensee shall keep TSRI generally informed as
to Licensee’s progress with respect to its development of Licensed Products,
including without limitation its regulatory filings and approvals, marketing,
production, and sale of Licensed Products and its efforts to sublicense the
Licensed Patent Rights. Licensee shall also provide to TSRI written annual
reports on its progress in the development and commercialization of Licensed
Products in the Field by September 30 of each calendar year. These progress
reports shall include without limitation: progress on research and development
of Licensed Products; status of applications for regulatory approvals for
Licensed Products; progress towards achieving the Benchmarks; manufacturing of
Licensed Products; sublicensing of Licensed Patent Rights; marketing, importing
and sales efforts with respect to Licensed Products during the preceding
calendar year as well as plans for the present calendar year; and a summary of
the results of animal experiments and IND-enabling studies with respect to
Licensed Products. The parties hereto acknowledge and agree that achievement of
the Benchmarks on or before the target dates set forth on Exhibit B shall be
evidence of compliance by Licensee with its development obligations hereunder
for the time periods specified in Exhibit B. If reported progress in these
annual reports shows that the Benchmarks have not been achieved by the target
dates set forth on Exhibit B, Licensee shall explain the reasons for such
differences in its annual reports, and Licensee may amend Exhibit B upon written
consent by TSRI, such consent not to be unreasonably withheld, if such proposed
amendment is supported by a detailed showing by Licensee of its commercially
reasonable efforts at diligence in its performance of research and development
of Licensed Products. Licensee shall also report to TSRI the dates that Licensee
or its Sublicensees achieve the events described on Exhibit C attached hereto
within ninety (90) days of such occurrences.

 

5.3           Failure of Diligence Efforts. If Licensee does not achieve a
Benchmark within the time provided in Exhibit B (as may be amended as provided
above) following commercially reasonable efforts of Licensee to meet such
Benchmark, and does not achieve such Benchmark within a *** months cure period,
then Licensee may make the milestone payment under Section 4.2 corresponding to
such Benchmark, and Licensee and TSRI shall negotiate a new time for achievement
of such Benchmark and any subsequent timeframes relying upon the meeting of such
Benchmark. If Licensee fails to meet the revised time for achieving such
Benchmark, TSRI has the right, at its option, to terminate this Agreement,
terminate the licensed rights hereunder with respect to a particular Licensed
Product or country, or notwithstanding Section 2.4 shall have the right to grant
a license to any third party, upon *** days’ prior written notice to Licensee.
For clarification, failure to achieve the Benchmarks within the time provided in
Exhibit B (as may be amended as provided above) shall not constitute a breach of
this Agreement by Licensee.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

5.4           Royalty Reports. Licensee shall submit to TSRI, no later than ***
days after the end of each calendar quarter, following the first commercial sale
of the first Licensed Product, a royalty report (the “Royalty Report”) setting
forth for such quarter at least the following information on a
country-by-country and Licensed Product-by-Licensed Product basis:

 

(a)          the number of units of Licensed Products sold by Licensee and its
Sublicensees;

 

(b)          the gross amounts due or invoiced for such Licensed Products sold
by Licensee and its Sublicensees;

 

(c)          a detailed listing of any credits under Section 3.5 and deductions
applicable to determine Net Sales of Licensed Products pursuant to Section 1.7,
the calculation for Combination Products under Section 3.4, and any refunds or
reimbursed amounts previously deducted which are deemed Net Sales pursuant to
Section 1.7; and

 

(d)          the amount of royalties due under Section 3, or if no royalties are
due to TSRI for any reporting period, the statement that no royalties are due
and a detailed explanation why they are not due for that quarterly period.

 

Each Royalty Report shall be certified as correct by an officer of Licensee.

 

5.5           Payments. Licensee shall pay to TSRI with each Royalty Report the
amount of royalties due with respect to such quarter. Licensee shall specify
which Licensed Patent Rights are utilized for each Licensed Product included in
the Royalty Report. All payments due under this Agreement shall be deemed
received when funds are credited to TSRI’s bank account and shall be payable by
check or wire transfer in United States Dollars to an account designated by
TSRI.

 

5.6           Foreign Sales. The remittance of royalties payable on sales
outside the United States shall be payable to TSRI in United States Dollar
equivalents at the official rate of exchange of the currency of the country from
which the royalties are payable, as quoted in The Wall Street Journal for the
last business day of the calendar quarter in which the royalties are payable. If
the transfer of or the conversion into the United States Dollar equivalents of
any such remittance in any such instance is not lawful or possible, the payment
of such part of the royalties as is necessary shall be made by the deposit
thereof, in the currency of the country where the sale was made on which the
royalty was based, to the credit and account of TSRI or its nominee in any
commercial bank or trust company designated by TSRI and located in that country,
prompt written notice of which shall be given by Licensee to TSRI.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

6.           Record Keeping. Licensee shall keep, and shall require its
Affiliates and Sublicensees to keep, accurate records (together with supporting
documentation) of sales of Licensed Products under this Agreement, as
appropriate to determine the amount of royalties, Sublicense Payments and other
monies due to TSRI hereunder. Such records shall be retained for at least three
(3) years following the end of the reporting period to which such records
relate. Such records shall be available, upon prior written notice to Licensee,
during normal business hours for examination and copying by and independent
certified public accountant designated by TSRI for the purpose of verifying the
accuracy of Licensee’s reports and payments hereunder provided that such
accountant shall enter into a reasonable confidentiality agreement with Licensee
prior to conducting such examination. In conducting examinations pursuant to
this Section 6, such accountant shall have access to, and may disclose to TSRI
in confidence, all records which TSRI or its accountant reasonably believes to
be relevant to the calculation of royalties and other payments due to TSRI under
this Agreement. Except as set forth above, such accountant shall not disclose to
TSRI any information other than information relating to the accuracy of reports
and payments made under this Agreement. These examinations shall be at TSRI’s
expense, except that if an examination shows an underreporting or underpayment
of *** or more for any twelve (12) month period, then Licensee shall pay the
cost of such examination (including TSRI’s accountant’s fees and other
out-of-pocket costs), as well as any additional payments that would have been
payable to TSRI under this Agreement had Licensee reported correctly, plus
interest on such amounts at the rate of *** per month. All payments due
hereunder shall be made within thirty (30) days of Licensee’s receipt of a copy
of the audit report. TSRI may exercise its audit rights under this Section 6 no
more frequently than once in any calendar year, and TSRI may audit records of
any given financial period no more than once.

 

7.           Patent Matters.

 

7.1           Patent Prosecution and Maintenance. From and after the date of
this Agreement, the provisions of this Section 7 shall control the prosecution
of any patent application and maintenance of any patent included within Licensed
Patent Rights. *** shall (a) direct and control the preparation, filing and
prosecution of the United States and foreign patent applications within the ***
(including without limitation any reissues, reexaminations, appeals to
appropriate patent offices and/or courts, post-issuance proceedings,
interferences and foreign oppositions); and (b) maintain the patents issuing
therefrom. *** shall (i) direct and control the preparation, filing and
prosecution of the United States and foreign patent applications within the ***
(including without limitation any reissues, reexaminations, appeals to
appropriate patent offices and/or courts, post-issuance proceedings,
interferences and foreign oppositions); and (ii) maintain the patents issuing
therefrom. TSRI shall have the right to select the patent counsel reasonably
acceptable to Licensee with respect to Patent Rights Umbrella and TSRI may also
use TSRI’s Office of Patent Counsel (“OPC”) in addition to outside patent
counsel for the patent prosecution and maintenance described herein. The fees
and expenses associated with such work done by TSRI’s OPC and its outside patent
counsel shall be paid by Licensee as set forth below. Licensee shall have the
right to select patent counsel reasonably acceptable to TSRI with respect to
Patent Rights Humanized.

 

7.2           Information to Licensee. Each party shall keep the other party
timely informed with regard to the patent application and maintenance processes
with respect to Licensed Patent Rights. Each party shall deliver to the other
party copies of all patent applications, amendments, related correspondence and
other related patent documents with respect to Licensed Patent Rights. Licensee
shall have ***. TSRI, its patent counsel and OPC will use reasonable efforts to
implement all reasonable and timely requests made by Licensee with regard to the
preparation, filing, prosecution and/or maintenance of the patent applications
and/or patents within Patent Rights Umbrella; provided, however, that in the
event of a disagreement between TSRI and Licensee with respect to any such
patent prosecution or maintenance matters, TSRI shall have the final decision
making authority over all such matters.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

7.3           Patent Costs. Licensee acknowledges and agrees that the licenses
granted hereunder are in partial consideration for Licensee’s agreement to pay
patent fees and expenses as described herein. Licensee shall pay to TSRI all
fees and expenses for the work referenced in Sections 7.1 and 7.2 according to
the following schedule:

 

***   ***       *** excluding *** (and related application(s) as described in
clauses 1.9 (b)-(e)) and *** (and related application(s) as described in clauses
1.9 (b)-(e))   ***       *** (and related application(s) as described in clauses
1.9 (b)-(e))   ***       *** (and related application(s) as described in clauses
1.9 (b)-(e))   ***

 

***, in its sole discretion, will be responsible for all patent costs it incurs
for the filing and prosecution of ***. ***shall pay ***of the patent costs
incurred by *** for filing and prosecuting any patent applications comprising
the *** as referenced in ***, other than (i) *** (and related application(s) as
described in Section ***), for which *** shall pay all of the patent costs
incurred for filing and prosecuting, and (ii) *** (and related application(s) as
described in Section ***), for which *** shall pay none of the patent costs
incurred for filing and prosecuting. Licensee shall pay to TSRI such patent fees
and expenses associated with the work on the Patent Rights Umbrella performed by
TSRI’s OPC and/or its outside patent counsel payable by Licensee in accordance
with this Section 7.3 within thirty (30) days after Licensee receives an invoice
itemizing such expenses. Failure of Licensee to pay patent fees and expenses as
set forth in this Section 7.3 shall immediately relieve TSRI from its obligation
to incur any further patent fees and expenses. For clarity, if Licensee does not
pay any patent fees and expenses due to TSRI (for work performed by TSRI’s OPC
or by outside patent counsel) in accordance with this Section 7.3 within thirty
(30) days after Licensee’s receipt of an itemized invoice therefor, TSRI shall
have the right, in its sole discretion, to cease all patent prosecution and
maintenance and allow Patent Rights Umbrella to go abandoned. Such action by
TSRI shall not constitute a breach of this Agreement. Licensee may elect with a
minimum of *** days’ prior written notice to TSRI, to discontinue payment for
the filing, prosecution and/or maintenance of any patent application and/or
patent within Licensed Patent Rights (including but not limited to all expenses
for work performed by TSRI’s OPC or by outside patent counsel). Licensee shall
remain liable for all patent prosecution and maintenance fees and costs incurred
prior to the date of such notice of election and during the ninety (90)-day
period immediately following the date of such notice. Any such patent
application or patent so elected shall immediately be excluded from the
definition of Licensed Patent Rights and from the scope of the licenses granted
under this Agreement, and all rights relating thereto shall revert exclusively
to TSRI.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

7.4          Ownership. TSRI exclusively owns all right, title and interest in
and to the TSRI’s interest in the Licensed Patent Rights.

 

7.5          TSRI Right to Pursue Patent. If at any time during the term of this
Agreement, Licensee’s rights with respect to any of the Licensed Patent Rights
are terminated in accordance with the terms of this Agreement, TSRI has the
right, but not the obligation, to take whatever action TSRI deems appropriate to
obtain or maintain the corresponding patent protection. If TSRI pursues such
patent protection under this Section 7.5, Licensee agrees to cooperate fully,
including by providing, at no charge to TSRI, all appropriate technical data and
executing all necessary legal documents.

 

7.6          Infringement Actions.

 

7.6.1           Prosecution of Infringements. *** agrees to promptly notify ***
in the event that *** becomes aware of any infringement or threatened
infringement by a third party of any of the ***.  In order to maintain the
licenses granted hereunder in force, subject to the conditions set forth in this
Section 7.6.1, *** shall prosecute any and all infringements of any *** by third
parties that could reasonably be expected to have a material adverse impact on
any ***, unless otherwise agreed in writing by *** and ***.  ***does not have
any obligation to prosecute any infringements of any *** by third parties that
*** does not reasonably expect to have a material adverse impact on any ***.  If
any such infringement could reasonably be expected to have a material adverse
impact on any ***, *** shall have the right to bring and control any action or
proceeding with respect to infringement of any ***, at its own expense and by
counsel of its own choice.  If any such infringement could also reasonably be
expected to have a material adverse impact on any licensed product under the
***, *** would provide *** the right, at its own expense, to be represented in
any such action by counsel of its own choice.  *** may enter into settlements,
stipulated judgments or other arrangements respecting such infringement, at its
own expense, but only with *** prior written consent if such settlements,
stipulated judgments or other arrangements would affect *** business or its
rights in the ***; provided that such consent shall not be unreasonably withheld
or delayed.  *** shall permit any such action or proceeding by *** to be brought
in *** name if required by law or to join any action or proceeding as a
necessary party if required for prosecution of such action or proceeding (which
shall be a condition to any obligation of *** to prosecute infringement of any
*** to the extent necessary to enable *** to do so), and *** shall hold ***
harmless from all liabilities and expenses with respect to such infringement
action or proceeding brought by ***.  *** agrees to provide reasonable
assistance of a technical nature which *** may require in any action or
proceeding brought by *** as provided in this Section 7.6.1, for which *** shall
pay to *** a reasonable hourly rate of compensation. Beginning upon execution of
the *** ***, and at *** request, *** shall use commercially reasonably efforts
to have *** cooperate and if necessary cause *** to join any action or
proceeding brought by *** as a necessary party if required for prosecution of
such action or proceeding (which shall be a condition to any obligation of ***
to prosecute infringement).  If *** does not prosecute any such infringement of
***, *** shall promptly notify *** in writing.  In such events, *** will have
the right, but not the obligation, to prosecute such infringement itself.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

7.6.2           Allocation of Recovery. Any damages, settlements or other
recovery from an infringement action undertaken by *** pursuant to Section 7.6.1
shall first be used to reimburse the parties for the fees and expenses incurred
in such action, and shall thereafter be allocated between and paid to the
parties as follows: *** to ***, and *** to *** which may be allocated between
*** and *** as they may agree in writing in connection with any cost-sharing
arrangement with respect to such action. If *** fails to prosecute any such
action or fails to prosecute such action to completion, and *** instead
prosecutes such action, then any damages or other recoveries net of the parties’
fees and expenses incurred in such infringement action shall be allocated
entirely to ***.

 

7.6.3           Defense of Infringements. Licensee or its Sublicensees shall, at
its expense, have the sole right, but not the obligation, to defend any suits
against Licensee or Sublicensees alleging infringement of any third party
intellectual property right due to Licensee’s or its Sublicensee’s practice of
the Licensed Patent Rights or its development or commercialization of Licensed
Products. Licensee shall promptly notify TSRI in writing of such claims, and
TSRI and Licensee shall confer with each other and cooperate during the defense
of any such action. TSRI shall, at its expense, have the right to retain
separate independent counsel to assist in defending any such actions to the
extent involving TSRI. In no event shall TSRI have any liability whatsoever for
any damages, litigation costs or other amounts due to any third party in
connection with any such action or suit described in this Section 7.6.3 (except
for costs of TSRI’s own counsel as provided above). If the third party
intellectual property right is held not to be infringed or is held unenforceable
or invalid, any recovery of damages with respect to such suit shall first be
applied to reimburse all litigation fees and expenses of TSRI, next to reimburse
all litigation fees and expenses of Licensee, and thereafter Licensee shall be
entitled to keep the remaining balance from any such recovery. For clarity, the
parties agree that this Section 7.6.3 shall in no way limit Licensee’s
obligations under Section 8.1 to indemnify, defend and hold harmless Indemnitees
(as defined in Section 8.1 below) with respect to third party claims alleging
infringement of such third party’s intellectual property rights.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

8.           Indemnity and Insurance.

 

8.1           Indemnity. Licensee hereby agrees to indemnify, defend (by counsel
reasonably acceptable to TSRI) and hold harmless TSRI and any parent, subsidiary
or other affiliated entity of TSRI and their respective trustees, directors,
officers, employees, scientists, agents, students, successors, assigns and other
representatives (collectively, the “Indemnitees”) from and against all damages,
liabilities, losses and other expenses, including without limitation reasonable
attorney’s fees, expert witness fees and costs incurred by the Indemnitees, with
respect to any third party claim, suit or action asserted against any of the
Indemnitees, whether or not a lawsuit or other proceeding is filed (collectively
“Claims”), that arise out of or relate to (a) Licensee’s or any of its
Sublicensees’ practice of any invention claimed by the Licensed Patent Rights,
(b) alleged defects or other problems with any of the Licensed Products
manufactured, sold, distributed or rendered by or on behalf of Licensee or any
Sublicensee, including without limitation any personal injuries, death or
property damages related thereto, (c) the research, development, manufacture,
use, marketing, advertising, distribution, sale or importation of any Licensed
Product by or on behalf of Licensee or any of its Sublicensees, (d) the
negligent or willful acts or omissions of Licensee or any of its Sublicensees,
(e) any allegations that the Licensed Products developed, manufactured, sold,
distributed or rendered by or on behalf of Licensee or any Sublicensee and/or
any trademarks, service marks, logos, symbols, slogans or other materials used
in connection with or to market Licensed Products violate or infringe upon the
trademarks, service marks, trade dress, trade names, copyrights, patents, works
of authorship, inventorship rights, trade secrets, database rights, rights under
unfair competition laws, rights of publicity, privacy or defamation, or any
other intellectual or industrial property right of any third party, (f)
Licensee’s or any Sublicensee’s failure to comply with any applicable laws,
rules or regulations in connection with activities contemplated by this
Agreement, and/or (g) the labeling, packaging or patent marking of any Licensed
Product or containers thereof by or on behalf of Licensee or any Sublicensee. In
each case, Licensee’s liability for damages under its indemnity shall be reduced
or apportioned to the extent such Claim was proximately caused by or resulted
from the gross negligence or willful misconduct of any Indemnitee. Licensee
shall not enter into any settlement, stipulated judgment or other arrangement
with respect to such Claims that (i) imposes any obligation on Indemnitees, (ii)
does not unconditionally release Indemnitees from all liability, or (iii) would
have an adverse effect on TSRI’s reputation or business, without TSRI’s prior
written consent. Notwithstanding the above, Indemnitees, at their expense, shall
have the right to retain separate independent counsel to assist in defending any
such Claims. In the event Licensee fails to promptly indemnify and defend such
Claims and/or pay Indemnitees’ expenses as provided above, Indemnitees shall
have the right, but not the obligation, to defend themselves, and in that case,
Licensee shall reimburse Indemnitees for all of their reasonable attorney’s
fees, costs and damages incurred in settling or defending such Claims within
thirthy (30) days of each of Indemnitees’ written requests. This indemnity shall
be a direct payment obligation and not merely a reimbursement obligation of
Licensee to Indemnitees.

 

8.2          Insurance.

 

8.2.1           TSRI as Additional Insured. Licensee shall name TSRI and
Indemnitees as “additional insureds” on any commercial general liability and
product liability insurance policies maintained by Licensee, its Affiliates and
Sublicensees applicable to the Licensed Products.

 

8.2.2           Coverages. Beginning at the time any Licensed Product is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or a Sublicensee, Licensee shall, at its sole
expense, procure and maintain commercial general liability insurance with
reputable insurers in amounts not less than *** per occurrence and *** annual
aggregate. Prior to the initiation of the first clinical trial and continuing
throughout the clinical trials involving any Licensed Product, Licensee shall,
at its sole expense, procure and maintain commercial general liability insurance
with reputable insurers in the same amounts as specified above. . Such
commercial general liability insurance shall provide coverage for: (i) product
liability; (ii) completed operations; (iii) clinical trials, as applicable; (iv)
broad form property damage; (v) advertising injury; (vi) premises operation;
(vii) personal injury; and (viii) contractual liability coverage for Licensee’s
indemnification and other obligations under this Agreement. If Licensee desires
to self-insure all or part of the limits described above, such self-insurance
program must be approved in advance by TSRI in its sole discretion. The
insurance coverage amounts specified herein or the maintenance of such insurance
policies shall not in any way limit Licensee’s indemnity or other liability
under this Agreement.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

8.2.3           Waiver of Subrogation. Licensee, on behalf of itself and its
insurance carriers, waives any and all claims and rights of recovery against
TSRI and the Indemnitees, including without limitation all rights of
subrogation, with respect to either party’s performance under this Agreement or
for any loss of or damage to Licensee or its property or the property of others
under its control. Licensee’s commercial general liability insurance policy
shall also include a waiver of subrogation consistent with this Section in favor
of TSRI and the Indemnitees. Licensee shall be responsible for obtaining such
waiver of subrogation from its insurance carriers. Licensee’s insurance policies
shall be primary and not contributory to any insurance carried by its
Sublicensees or by TSRI. At the time when Licensee sends its annual progress
report to TSRI under Section 5.2 and upon TSRI’s additional request, Licensee
shall deliver to TSRI copies of insurance certificates and endorsements that
comply with the requirements of this Section 8.2.

 

8.2.4           Cancellation/Changes in Coverages. Licensee shall provide TSRI
with written notice at least fifteen (15) days prior to the cancellation,
non-renewal or material adverse change in any such insurance, provided that if
Licensee itself becomes aware of any such cancellation, non-renewal or material
adverse change less than fifteen (15) days before such cancellation, non-renewal
or material adverse change becomes effective, through no fault of Licensee, then
Licensee shall provide TSRI with written notice as promptly as possible after
Licensee becomes aware of the same. If Licensee does not obtain replacement
insurance providing comparable coverage within such fifteen (15) day period (or
prior to the cancellation, non-renewal or material change in the existing
policy), TSRI shall have the right to immediately terminate this Agreement by
providing written notice to Licensee and without any additional cure periods.

 

8.2.5           Continuation of Coverage. Licensee shall maintain such
commercial general liability and product liability insurance beyond the
expiration or termination of this Agreement during (a) the period that any
Licensed Product is being commercially distributed or sold by or on behalf of
Licensee or a Sublicensee; and (b) a reasonable period after the period referred
to in sub-clause (a) above, which in no event shall be less than ten (10) years.

 

9.           Limited Warranty, Disclaimer and Limitation of Liability.

 

9.1           Limited Warranty. TSRI hereby represents and warrants that it has
full right and power to enter into this Agreement and to grant the license and
rights granted to Licensee herein.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

9.2           Disclaimer. EXCEPT AS PROVIDED IN SECTION 9.1, NEITHER PARTY MAKES
ANY WARRANTIES OR REPRESENTATIONS CONCERNING LICENSED PATENT RIGHTS OR ANY OTHER
MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY EXPRESS, IMPLIED OR
STATUTORY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS, TITLE, ACCURACY OR ARISING OUT OF COURSE
OF CONDUCT OR TRADE CUSTOM OR USAGE, AND EACH PARTY DISCLAIMS ALL SUCH EXPRESS,
IMPLIED OR STATUTORY WARRANTIES. NEITHER PARTY MAKES ANY WARRANTY OR
REPRESENTATION AS TO THE VALIDITY, SCOPE OR ENFORCEABILITY OF ANY OF THE
LICENSED PATENT RIGHTS, OR THAT ANY LICENSED PRODUCT OR LICENSED PATENT RIGHTS
WILL NOT INFRINGE ANY THIRD PARTY RIGHTS, OR THAT NO THIRD PARTY IS IN ANY WAY
INFRINGING UPON OR MAY INFRINGE UPON ANY LICENSED PATENT RIGHTS COVERED BY THIS
AGREEMENT. FURTHER, TSRI HAS MADE NO INVESTIGATION AND MAKES NO REPRESENTATION
OR WARRANTY THAT THE LICENSED PATENT RIGHTS ARE SUITABLE FOR LICENSEE’S
PURPOSES.

 

9.3           Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES
(INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS OR EXPECTED SAVINGS)
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER,
EXCEPT WITH RESPECT TO LICENSEE’S INDEMNITY OBLIGATIONS UNDER SECTION 8.1.
TSRI’S AGGREGATE LIABILITY, IF ANY, FOR ALL DAMAGES OF ANY KIND RELATING TO THIS
AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO
TSRI UNDER THIS AGREEMENT. THE FOREGOING EXCLUSIONS AND LIMITATIONS SHALL APPLY
TO ALL CLAIMS AND ACTIONS OF ANY KIND AND ON ANY THEORY OF LIABILITY, WHETHER
BASED ON CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE OR STRICT
LIABILITY), OR ANY OTHER GROUNDS, AND REGARDLESS OF WHETHER A PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE PARTIES FURTHER AGREE THAT EACH
WARRANTY DISCLAIMER, EXCLUSION OF DAMAGES OR OTHER LIMITATION OF LIABILITY
HEREIN IS INTENDED TO BE SEVERABLE AND INDEPENDENT OF THE OTHER PROVISIONS
BECAUSE THEY EACH REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE
PARTIES.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

10.         Confidentiality and Publicity.

 

10.1         Treatment of Confidential Information. The parties agree that
during the term of this Agreement, and for a period of five (5) years after this
Agreement terminates, a party receiving Confidential Information of the other
party will (a) maintain in confidence such Confidential Information to the same
extent such party maintains its own proprietary information, but with no less
than a reasonable degree of care; (b) not disclose such Confidential Information
to any third party without the other party’s prior written consent; and (c) not
use such Confidential Information for any purpose except those permitted by this
Agreement. Notwithstanding the foregoing, if a party is required by law,
regulation or court order to disclose Confidential Information of the other
party, the party required to make such disclosure shall (i) promptly send a copy
of the order or notice to the other party not less than ten (10) days before the
proposed disclosure (or such shorter period of time as may be reasonably
practical under the circumstances); (ii) reasonably cooperate with the other
party if the other party wishes to object or condition such disclosure through a
protective order or otherwise; (iii) limit the extent of such disclosure to the
minimum required to comply with the order or notice; and (iv) use reasonable
efforts to seek confidential treatment (i.e., filing “under seal”) for that
disclosure. In addition, a party may disclose Confidential Information of the
other party to its Affiliates and employees, to Sublicensees and potential
Sublicensees, to investors or acquirers or potential investors or acquirers of a
party in connection with due diligence or similar investigations or in
confidential financing documents, to an organization to whom TSRI intends to
assign or transfer or does assign or transfer this Agreement or the payment
obligations due hereunder to TSRI, provided, in each case, that any such third
party agrees in writing to be bound by terms of confidentiality and non-use at
least as stringent as those set forth in this Section 10.1 (except that the
duration of the confidentiality obligation need not match the duration stated in
this Section 10.1), but with no further right to disclose or otherwise
distribute the other party’s Confidential Information.

 

10.2         Publications. Licensee agrees that TSRI shall have a right to
publish in accordance with its general policies, and that, subject to TSRI’s
compliance with Section 10.1 as it applies to Confidential Information of
Licensee, this Agreement shall not restrict, in any fashion, TSRI’s right to
publish.

 

10.3         Publicity. Except as otherwise required by applicable law, rule or
regulation (including, without limitations, rules of the Securities and Exchange
Commission and rules of any stock exchange upon which Licensee’s securities may
be listed), no party shall originate or distribute any publication, news release
or other public announcement, written or oral, whether in the public press,
stockholders’ reports or otherwise, relating to this Agreement or to any
sublicense hereunder, or to the performance hereunder or under any such
sublicense agreements, without the prior written approval of the other party,
which approval shall not be unreasonably withheld. Scientific publications
published in accordance with Section 10.2 of this Agreement shall not be
construed as publicity governed by this Section 10.3.

 

11.         Term and Termination.

 

11.1        Term. Unless terminated sooner in accordance with the terms set
forth herein, this Agreement shall expire upon the expiration of all Licensed
Patent Rights.

 

11.2        Termination Upon Mutual Agreement. This Agreement may be terminated
by mutual written consent of both parties.

 

11.3        Termination by TSRI. TSRI has the right to immediately terminate
this Agreement as follows (unless a further cure period is provided below):

 

(a)          If Licensee does not make a payment due hereunder and fails to cure
such non-payment (including the payment of interest in accordance with Section
13.2) within thirty (30) days after the date of TSRI’s written notice of such
non-payment;

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

(b)          If Licensee defaults upon any of its material obligations hereunder
(other than any payment obligation, which is subject to Section 11.3(a)),
including, without limitation, its indemnification or insurance obligations
under Section 8 and does not cure such default within thirty (30) days after
receipt of notice from TSRI specifying in reasonable detail the nature of such
default

 

(c)          As provided in Section 5.3;

 

(d)          Upon TSRI’s written notice to Licensee in the event Licensee has a
petition in bankruptcy filed for or against it, has a receiver appointed over
any of Licensee’s assets, makes an assignment for the benefit of creditors, or
has any other proceedings filed against Licensee under any bankruptcy or
insolvency laws;

 

(e)          If Licensee is convicted of a felony relating to the development,
manufacture, use, marketing, distribution or sale of Licensed Products; or

 

(f)          In the event Licensee or a Sublicensee directly or indirectly
institutes or makes any Challenges;

 

(g)         If an audit pursuant to Section 6 shows an underreporting or
underpayment by Licensee or any Sublicensee of fifteen percent (15%) or more for
any twelve (12) month period and Licensee or Sublicensee does not cure such
underpayment within thirty (30) days after the report of such underreporting or
underpayment; or

 

(h)         Except as provided in subparagphs (a) – (g) above, if Licensee
defaults in the performance of any other obligations under this Agreement and
the default has not been remedied within thirty (30) days after the date of
TSRI’s written notice of such default.

 

11.4         Termination by Licensee. Licensee may terminate this Agreement by
giving *** days’ advance written notice of such termination to TSRI.

 

11.5         Rights Upon Expiration. Upon the expiration of this Agreement,
neither party shall have any further rights or obligations, other than the
obligation of Licensee to make any and all reports and payments due under
Sections 3, 4, 7 and 11.8 with respect to events that occurred prior to such
expiration in accordance with Sections 3.3, 4, 5.4, 5.5, 5.6 and 7.3 (all of
which Sections referenced in this sentence shall survive such expiration for
such purposes). Notwithstanding the above, Sections 1, 2.3, 2.5, 2.6, 6 (for the
period described therein), 7.4, 8.1, 8.2 (for the period described therein),
9.2, 9.3, 10, 11.5, 12 and 13 shall also survive the expiration of this
Agreement.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

11.6        Rights Upon Termination.

 

11.6.1     Notwithstanding any other provision of this Agreement, upon any
termination of this Agreement prior to the regularly scheduled expiration date
of this Agreement, the licenses granted hereunder shall terminate and revert to
TSRI, and all sublicenses granted by Licensee shall also automatically
terminate. Except as otherwise provided in Section 11.7 of this Agreement with
respect to work-in-progress, upon such termination, Licensee and subject to
Section 11.6.2, its Sublicensees shall have no further right to develop,
manufacture, market, distribute or sell any Licensed Product or to otherwise
practice or use any Licensed Patent Rights. Upon any such termination, Licensee
shall promptly return all materials, samples, documents, information and other
items which embody or disclose any Licensed Patent Rights; provided, however,
that Licensee shall not be obligated to provide TSRI with Licensee’s proprietary
information which Licensee can show that it independently developed Any such
termination shall not relieve either party from any obligations accrued to the
date of such termination, including without limitation the obligation of
Licensee to make any and all reports and payments due under Sections 3, 4, 7 and
11.7 with respect to events that occurred prior to such termination or as
provided in Section 11.7, in accordance with Sections 3.4, 4, 5.4, 5.5, 5.6 and
7.3 (all of which Sections referenced in this sentence shall survive such
termination for such purposes). In addition, Sections 1, 2.3, 2.5, 6 (for the
period described therein), 7.4, 8.1, 8.2 (for the period described therein),
9.2, 9.3, 10, 11.6, 11.7, 12 and 13 shall also survive the termination of this
Agreement.

 

 

11.6.2     At the election of the applicable Sublicensee upon written notice to
TSRI, the sublicense granted hereunder to such Sublicensee that was in effect
immediately prior to termination of this Agreement will survive such
termination, with TSRI as the Sublicensee’s direct licensor, subject to the
following conditions:

 

(a)          such Sublicensee is not then in default under its sublicense;

 

(b)          Sublicensee must pay to TSRI all past due royalties, non-royalty
revenue, patent costs and all other monies owed by Licensee to TSRI under this
Agreement within thirty (30) days after receipt of an itemized invoice from TSRI
(or such Sublicensee’s pro rata share of such monies if there are multiple
Sublicensees); and

 

(c)          within sixty (60) days after termination of this Agreement, such
Sublicensee shall execute and deliver to TSRI, for signature by TSRI, a license
agreement between such Sublicensee and TSRI (the “New License Agreement”), which
New License Agreement shall be subject to the same non-financial terms and
conditions as those in this Agreement; provided, however, that each New License
Agreement shall contain substantially the same terms and conditions regarding
sublicense scope, sublicense territory, duration of sublicense grant, and
diligence obligations of the Sublicensee as the sublicense agreement between
such Sublicensee and Licensee; and (i) Sublicensee shall agree in the New
License Agreement to terms providing that in no event shall TSRI be liable to
Sublicensee for any actual or alleged breach of such sublicense agreement by
Licensee; (ii) TSRI shall not have any obligations to such Sublicensee other
than TSRI’s obligations to Licensee as set forth herein; (iii) such New License
Agreement shall be subordinate and comply in all respects to the applicable
provisions of this Agreement; (iv) such Sublicensee’s payment obligations with
respect to its surviving license to the Licensed Patent Rights shall be those
set forth in this Agreement (and not those set forth in the sublicense agreement
between such Sublicensee and Licensee); and (v) in no event shall TSRI be
obliged to accept provisions in the New License Agreement (A) unless such
provisions correspond to rights granted by Licensee to Sublicensee in
conformance with this Agreement, and such provisions are not in conflict with
the rights, duties and obligations accruing to Licensee under this Agreement; or
(B) where such provisions are inconsistent with the legal obligations under any
other sublicense agreement granted by Licensee, or by applicable federal, state
or local statute or regulation. Licensee must include or specifically reference
this Section 11.6.2 in each of its sublicense agreements in order for such
Sublicensee’s sublicense to survive termination of this Agreement.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

11.7         Work-in-Progress. Upon any early termination of the licenses
granted hereunder, Licensee shall be entitled to finish any work-in-progress and
to sell any completed inventory of Licensed Products which remain on hand as of
the termination date, so long as Licensee sells such inventory in the normal
course of business and at regular selling prices and pays to TSRI the royalties
applicable to such subsequent sales in accordance with the provisions of this
Agreement, provided that no such sales shall be permitted following the date
that is six (6) months after the termination date.

 

11.8         Final Royalty Report. Upon termination or expiration of this
Agreement, Licensee shall promptly submit a final report to TSRI, and any
payments due to TSRI under this Agreement that accrued prior to such termination
or expiration shall be paid by Licensee to TSRI at the time of delivery of the
final report.

 

12.         Assignment; Successors.

 

12.1         Assignment. Any and all assignments of this Agreement or any rights
granted hereunder by Licensee without TSRI’s prior written consent are void,
except Licensee may assign this Agreement or rights granted hereunder without
the prior written consent of TSRI (i) to an Affiliate of Licensee; or (ii) to a
successor in interest to all or substantially all of the assets of Licensee,
whether by way of a merger, consolidation, sale of assets, sale of stock, or
similar transaction. TSRI has the right to assign this Agreement or the Licensed
Patent Rights for monetization purposes or any or all of the payment obligations
due to TSRI under this Agreement to any third party without Licensee’s prior
written consent, provided that Licensee retains all rights set forth in this
Agreement and under the license to the Licensed Patent Rights granted herein.

 

12.2         Binding Upon Successors and Assigns. Subject to the limitations on
assignment in Section 12.1, this Agreement shall be binding upon and inure to
the benefit of any successors in interest and assigns of TSRI and Licensee. Any
successor or assignee of Licensee’s interest shall expressly assume in writing
the performance of all the terms and conditions of this Agreement to be
performed by Licensee and such written assumption shall be delivered to TSRI Any
such successor or assignee of TSRI’s interest shall expressly assume in writing
the performance of all the terms and conditions of this Agreement to be
performed by TSRI and such written assumption shall be delivered to Licensee.

 

13.         General Provisions.

 

13.1         Independent Contractors. The relationship between TSRI and Licensee
is that of independent contractors. TSRI and Licensee are not joint venturers,
partners, principal and agent, master and servant, employer and employee, and
have no other relationship other than independent contracting parties. TSRI and
Licensee shall have no power to bind or obligate each other in any manner, other
than as is expressly set forth in this Agreement.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

13.2         Late Payments. Late payments of any and all amounts due hereunder
shall bear interest from the due date until the date paid at a rate of one and
one-half percent (1½%) per month, or Two Hundred Fifty Dollars ($250), whichever
is greater.

 

13.3         Governmental Approvals and Compliance. Licensee shall, at its
expense, be responsible for obtaining all necessary governmental approvals for
the development, production, distribution, performance, sale and use of any
Licensed Product, and shall comply with all applicable laws, rules and
regulations in conducting its activities under this Agreement. Licensee shall,
at its expense, also be responsible for any warning labels, packaging and
instructions produced or distributed with respect to the use of Licensed
Products and for the quality control for any Licensed Products.

 

13.4         Patent Marking. To the extent required by applicable law, Licensee
and its Sublicensees shall properly mark all Licensed Products or their
containers in accordance with the applicable patent marking laws. Upon TSRI’s
request, Licensee shall provide to TSRI copies of its patent marking of all
Licensed Products.

 

13.5         No Use of Name. The use of the name “The Scripps Research
Institute”, “Scripps”, “TSRI” or any variation thereof in connection with the
marketing, advertising, distribution, sale or performance of Licensed Products
is expressly prohibited.

 

13.6         U.S. Manufacture. To the extent required, Licensee agrees that it
and its Sublicensees will abide by the Preference for United States Industry as
set forth in 37 C.F.R. Section 401.14 (I), which requires that any Licensed
Product sold in the United States shall be manufactured substantially in the
United States.

 

13.7         Foreign Registration. Licensee agrees, at its expense, to register
this Agreement with any foreign governmental agency which requires such
registration.

 

13.8         Dispute Resolution. Any dispute or claim between the parties
arising out of or relating to this Agreement, including without limitation the
breach thereof, shall be resolved according to the following dispute resolution
procedures:

 

(a)          Such dispute shall be first addressed by the representatives of
TSRI and Licensee who have primary responsibility for managing this Agreement.

 

(b)          If the dispute is not resolved by such representatives within
fifteen (15) days after the date either party gives written notice that such
dispute exists, then the dispute shall be referred to and addressed by the
senior management of each party.

 

(c)          If such dispute is not resolved by the parties’ senior management
within thirty (30) days after the date the dispute is referred to them, then the
dispute shall be submitted to mediation. The mediator shall be a retired judge
or other neutral third party mutually selected by TSRI and Licensee who has at
least ten (10) years’ experience in mediating or arbitrating cases in the
bio-pharmaceutical industry and regarding the same or substantially similar
subject matter as the dispute between Licensee and TSRI. If the parties are
unable to agree on such mediator within twenty (20) days after they exchange
initial lists of potential mediators, a mediator with the same qualifications
will be selected by the JAMS office in San Diego located at 401 B Street, San
Diego, CA 92101 (after consultation with the parties).

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

(d)          The location of the mediation shall be in the County of San Diego,
California. TSRI and Licensee hereby irrevocably submit to the exclusive
jurisdiction and venue of the mediator mutually selected by the parties or to
the neutral mediator selected by JAMS of San Diego for purposes of the
mediation, and to the exclusive jurisdiction and venue of the federal and state
courts located in San Diego County, California for any action or proceeding
regarding this Agreement in the event mediation is unsuccessful as provided in
sub-clause (e) below, or as provided in sub-clause (f) below, and waive any
right to contest or otherwise object to such exclusive jurisdiction or venue,
including without limitation any claim that such exclusive venue is not a
convenient forum.

 

(e)          If the dispute is not resolved through mediation, either party may
refer the dispute to a court of competent jurisdiction in San Diego County,
California.

 

(f)          Notwithstanding anything to the contrary in this Agreement, prior
to or while a mediation proceeding is pending, either party has the right to
seek and obtain injunctive and other equitable relief from a court of competent
jurisdiction to enforce that party’s rights hereunder.

 

13.9         Entire Agreement; Modification. This Agreement and all of the
attached Exhibits (which are incorporated herein) set forth the entire agreement
between the parties as to the subject matter hereof, and supersede all prior or
contemporaneous agreements or understandings, whether oral or written, regarding
this subject matter. This Agreement cannot be amended except by a written
instrument signed by both parties.

 

13.10        California Law. This Agreement shall be construed and enforced
according to the laws of the State of California without regard to its conflicts
or choice of law rules.

 

13.11        Headings. The headings for each Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular Section.

 

13.12        Severability. If any provision of this Agreement is judicially
determined to be invalid, void or unenforceable, the remaining provisions shall
remain in full force and effect, and the stricken provision shall be revised in
a manner that best reflects the original intent of the parties.

 

13.13        No Waiver. The failure of a party to enforce any of its rights
hereunder or at law or in equity shall not be deemed a waiver or a continuing
waiver of any of its rights or remedies against the other party, unless such
waiver is in writing and signed by the waiving party.

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

13.14         Name. Whenever there has been an assignment by Licensee as
permitted by this Agreement, the term “Licensee” as used in this Agreement shall
also include and refer to, if appropriate, such assignee.

 

13.15         Attorneys’ Fees. In the event of a dispute between the parties or
any default hereunder, the party prevailing in the resolution of such dispute or
default shall be entitled to recover its reasonable attorneys’ fees and other
costs incurred in connection with resolving such dispute or default, in addition
to any other relief to which it is entitled. Notwithstanding anything to the
contrary herein, the parties agree that this Section 13.15 shall not apply and
attorney’s fees and costs shall not be awarded to either party with respect to
any Challenge or any action where Licensee or a Sublicensee alleges that it is
not required to comply with or perform some or all of the provisions of this
Agreement based upon a good faith claim that any of the Licensed Patent Rights
are invalid or unenforceable.  TSRI and Licensee each represent that it has been
represented by its own counsel in the negotiation and execution of this
Agreement.   Each party further represents that it has relied solely on the
advice and representation of its respective counsel in agreeing to this Section
13.15 and all of the other provisions of this Agreement.

 

13.16         Notices. Any notices required or permitted by this Agreement shall
be in writing and shall be delivered as follows, with notice deemed given as
indicated: (a) by personal delivery, when received; (b) by overnight courier
guaranteeing next-day delivery, upon the next business day immediately following
delivery to such overnight courier; or (c) by registered or certified mail,
return receipt requested and postage prepaid, upon verification of receipt.
Notices shall be sent to the respective addresses set forth below, unless
subsequently changed by written notice to the other party:

 

For TSRI: The Scripps Research Institute   10550 North Torrey Pines Road, TPC-9
  La Jolla, California  92037   Attention: Vice President, Business Development
    with a copy to: The Scripps Research Institute   10550 North Torrey Pines
Road, TPC-8   La Jolla, California  92037   Attention: Chief Business Counsel  
  For Licensee: Fabrus, Inc.   11099 North Torrey Pines Road, Suite 230   La
Jolla, California 92037   Attention:  Chief Executive Officer     With a copy
to: Cooley llp   4401 Eastgate Mall   San Diego, California  92121   Attention:
L. Kay Chandler   Fax No.:  (858) 550-6014

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

13.17         Counterparts. This Agreement may be executed in several
counterparts that together shall constitute originals and one and the same
instrument.

 

13.18         Cumulative Remedies. The rights and remedies stated in this
Agreement shall be cumulative and in addition to any other rights and remedies
the parties may have at law or in equity.

 

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the Effective Date.

 

TSRI:   LICENSEE:       THE SCRIPPS RESEARCH INSTITUTE   FABRUS, INC.       By:
 /s/ Scott Forest   By: /s/ Ron Martell            Title:  VP, Business
Development   Title:       CEO

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

EXHIBIT A

 

LICENSEE’S COMMERCIAL DEVELOPMENT PLAN

 

***

***

***

***

***

***

***

***

***

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

EXHIBIT B

 

BENCHMARKS

 

Benchmarks   Date by which Licensee must meet Benchmarks Initiation of *** of a
Licensed Product   *** from the Effective Date Initiation of *** of a Licensed
Product   *** from the Effective Date Initiation of *** of a Licensed Product  
*** from the Effective Date

 

 

Confidential Treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as “***”. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

  

EXHIBIT C

 

REPORTING EVENTS

 

Licensee shall notify TSRI in writing of each of the following events with
respect to each Licensed Product in the United States, Europe or Japan within
thirty (30) days of such occurrence:

 

1.          ***

 

2.          ***

 

3.          ***

 

4.          ***