Exhibit 10.9

 

***OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

CONFIDENTIAL TREATMENT REQUESTED 

 

LICENSE AGREEMENT

 

This License Agreement (“Agreement”) is entered into as of this 21st day of
March, 2012 (the “Effective Date”), by and between Ember Therapeutics, Inc.,
having a place of business at 855 Boylston Street, 11th Floor, Boston, MA 02116
(“Licensee”), and Joslin Diabetes Center, having a place of business at One
Joslin Place, Boston, Massachusetts 02215 (“Joslin”).

 

WHEREAS, Joslin is the owner of the Licensed Patents (as defined below) and has
the right to grant licenses thereunder; and

 

WHEREAS, Licensee wishes to obtain a license under the Licensed Patents and
Joslin wishes to grant Licensee a license under the Licensed Patents, all in
accordance with the terms and conditions of this Agreement.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

 

1.Definitions.

 

Whenever used in this Agreement with an initial capital letter, the terms
defined in this Section 1, whether used in the singular or the plural, have the
meanings specified below.

 

1.1              “Affiliate” means, with respect to an entity, any person,
organization or entity controlling, controlled by or under common control with,
such entity. For purposes of this definition only, “control” of another person,
organization or entity will mean the possession, directly or indirectly, of the
power to direct or cause the direction of the activities, management or policies
of such person, organization or entity, whether through the ownership of voting
securities, by contract or otherwise. Without limiting the foregoing, control
will be presumed to exist when a person, organization or entity (a) owns or
directly controls fifty percent (50%) or more of the outstanding voting stock or
other ownership interest of the other organization or entity, or (b) possesses,
directly or indirectly, the power to elect or appoint fifty percent (50%) or
more of the members of the governing body of the organization or other entity.
The parties acknowledge that in the case of certain entities organized under the
laws of certain countries outside of the United States, the maximum percentage
ownership permitted by law for a foreign investor may be less than fifty percent
(50%), and that in such cases such lower percentage will be substituted in the
preceding sentence.

 

1.2              “Calendar Quarter” means each of the periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 and
December 31, for so long as this Agreement is in effect.

 

1.3              “Confidential Information” means any and all scientific,
technical, financial, operational, marketing, economic, business or other
information in whatever form (written, oral or visual) that is furnished or made
available to one party (a “Recipient”) by or on behalf of the other party (a
“Discloser”), and that (i) if in tangible form, is labeled in writing as
proprietary or confidential; (ii) if in oral

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or visual form, is identified as proprietary or confidential by the Discloser at
the time of disclosure or within thirty (30) days thereafter; or (iii) whether
or not labeled or otherwise identified by Discloser as confidential or
proprietary, should be deemed to be confidential or proprietary by a reasonable
person given the nature of the information and/or the circumstances under which
it was disclosed. Confidential Information includes, without limitation, trade
secrets, patterns, plans, compilations, programs, devices, formulas, designs,
prototypes, methods, techniques, processes, procedures, know-how, inventions,
codes, software, data and databases, product names, marks, marketing materials
and programs, specifications and materials.

 

1.4              “Derivative Information” means all copies, digests, summaries
and extracts of the Discloser’s Confidential Information created or maintained
by Recipient, its employees or consultants. Recipient agrees to treat any
Derivative Information in accordance with the non-disclosure and non-use
provisions of this Agreement that apply to Discloser’s Confidential Information.
Additionally, for the avoidance of doubt, any of the Discloser’s Confidential
Information included in any Derivative Information is owned by the Discloser of
such Confidential Information,

 

1.5              “FDA” means the United States Food and Drug Administration.

 

1.6              “Field” means discovery, development, and commercialization of
products and services for the prevention, palliation, treatment, or cure of
diseases in animals and humans.

 

1.7              “IND” means an application for approval to conduct human
clinical investigations that satisfies the requirements of 21 C.F.R. 312.

 

1.8              “Licensed Patents” means (a) the patents and patent
applications listed in Exhibit A (such applications hereafter referred to as
“Patent Applications”); (b) any patent issuing on any such Patent Applications;
and (c) all divisions, requests for continued examination, continuations,
continuations-in-part (but only to the extent that the claims of each such
continuation-in-part application are directed to subject matter specifically
described in the Patent Applications), re-examinations, reissues, substitutions,
or extensions thereof and patent issuing from those patent rights described in
(a) or (b) above and this (c), and (d) foreign counterparts (including
supplementary protection certificates) to any such patent rights.

 

1.9              “Licensed Product” means products, devices, or compositions,
the manufacture, use or sale of which falls within the scope of a Valid Claim in
the Field.

 

1.10          “Net Sales” means the gross amount billed or invoiced by or on
behalf of Licensee and its Affiliates and Sublicensees (in each case, the
“Invoicing Entity”) on sales of Licensed Products, less the following to the
extent applicable on such sales of Licensed Products and not previously deducted
from the gross invoice price: (a) customary trade, quantity or cash discounts,
rebates, allowances and retroactive price adjustments to the extent actually
allowed and taken; (b) amounts actually repaid or credited by reason of
rejection or, return or recall of any previously sold, leased or otherwise
transferred Licensed Products; (c) charge-backs and similar amounts paid to
distributors and wholesalers in the ordinary course of business, (d) customer
freight charges that are paid by or on behalf of the Invoicing Entity; (e)
invoiced

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amounts that are determined to be bad debt and (f) to the extent separately
stated on purchase orders, invoices or other documents of sale, any sales, value
added or similar taxes, custom duties or other similar governmental charges
levied directly on the production, sale, transportation, delivery or use of a
Licensed Product that are paid by or on behalf of the Invoicing Entity, but not
including any tax levied with respect to income; provided that (i) in any
transfers of Licensed Products between an Invoicing Entity and an Affiliate of
such Invoicing Entity not for the purpose of resale by such Affiliate, Net Sales
will be equal to the fair market value of the Licensed Products so transferred,
assuming an arm’s length transaction made in the ordinary course of business,
and (ii) sales of Licensed Products by an Invoicing Entity to its Affiliate or
Sublicensee for resale by such Affiliate or Sublicensee will not be deemed Net
Sales. Instead, Net Sales will be determined based on the gross amount billed or
invoiced by such Affiliate or Sublicensee on resale of Licensed Products to a
third party purchaser.

 

In the event Licensee or an Affiliate or Sublicensee (each a “Combination
Product Seller”) uses a proprietary (whether proprietary to a Combination
Product Seller or a third party) active ingredient or component not licensed by
Joslin to Licensee hereunder (“Other Components”) to form a product that is a
combination of a Licensed Product and an Other Component(s) (a “Combination
Product”), Net Sales for the purposes of calculating the royalty owed to Joslin
on sales of such Product shall be calculated as described in the subsections
below:

 

(i)                 If the Licensed Product and Other Components contained in
the Combination Product(s) are sold separately, Net Sales for sales of the
Licensed Product for the purposes of calculating royalty payments shall be
determined by multiplying the greater of the gross amount billed or invoiced, or
if no such bill or invoice is issued the amount received, by the Combination
Product Seller for or on account of sales of such Combination Product (the
“Gross Sales Price”) by the fraction A/(A+B), in which “A” is the Gross Sales
Price of the Licensed Product portion of the Combination Product when sold
separately during the most recent reporting period in the country in which the
sale was made, and “B” is the Gross Sales Price of the Other Components of the
Combination Product sold separately during said reporting period in said
country.

 

(ii)               If either the Licensed Product or the Other Components
constituting the Combination Product are not sold separately in the relevant
country during the most recent reporting period then the Parties shall negotiate
in good faith towards an allocation of the Net Sales of the Combination Product
between the Licensed Product (which amount shall be royalty bearing) and the
Other Components (which amount shall not be royalty bearing).

 

 

1.11          “Non-Royalty Sublicense Income” means any payments or other
consideration that Licensee or any of its Affiliates receives in consideration
for a Sublicense, other than

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royalties based on Net Sales, including without limitation license fees,
milestone payments, equity investments to the extent the amount paid for such
equity exceeds its fair market value, up front fees, success fees, minimum
annual payments and license maintenance fees, but excluding payments for patent
expenses, research, development, manufacturing or commercialization activities
(including payments for personnel, whether calculated or paid on a fulltime
equivalent basis or otherwise) or similar payments to the extent not in excess
of the actual cost to Licensee, loans, and equity investments to the extent the
amount paid for such equity does not exceed its fair market value. To the extent
that rights other than rights under the Licensed Patents are granted along with
a Sublicense, the consideration received by Licensee will be apportioned between
the Sublicense and such other rights pursuant to good faith negotiations between
Licensee and Joslin. In the event the parties are unable to reach agreement on
such apportionment, the apportionment shall be determined pursuant to Sections
12.6(b) and (c) of this Agreement. For the avoidance of doubt, Non-Royalty
Sublicense Income shall not include proceeds obtained from the sale of Licensee
or that portion of Licensee’s business to which this Agreement relates.

 

1.12          “Phase 2 Clinical Trial” means a human clinical trial that
satisfies the requirements of 21 C.F.R. § 312.21 (b).

 

1.13          “Regulatory Authority” means any applicable government regulatory
authority involved in granting approvals for the manufacturing, marketing,
reimbursement and/or pricing of a Licensed Product.

 

1.14          “Sublicense” means any license given or agreement entered into by
Licensee to or with any other person or entity, under or with respect to or
permitting any use of any of the Licensed Patents, or otherwise permitting the
development, manufacture, marketing, distribution and/or sale of Licensed
Products. For avoidance of doubt, sublicenses granted to service providers
acting for the benefit of Licensee shall not constitute “Sublicenses”.

 

1.15          “Sublicensee” means any person or entity granted a Sublicense.

 

1.16          “Third Party” means any person or entity other than Licensee or
Joslin or any of their Affiliates

 

1.17          “Valid Claim” will mean: (a) a claim of an issued and unexpired
patent within the Licensed Patents that has not been (i) held permanently
revoked, unenforceable, unpatentable or invalid by a decision of a court or
governmental body of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, (ii) rendered unenforceable through disclaimer or
otherwise, (iii) abandoned, or (iv) permanently lost through an interference or
opposition proceeding without any right of appeal or review; or (b) a pending
claim of a pending patent application within the Licensed Patents that (i) has
been asserted and continues to be prosecuted in good faith and (ii) has not been
pending in excess of five (5) years and (iii) has not been abandoned or finally
rejected without the possibility of appeal or refiling.

 

2.License Grants.

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2.1              Exclusive License. Subject to the terms and conditions set
forth in this Agreement, Joslin hereby grants to Licensee an exclusive (even as
to Joslin), worldwide license under the Licensed Patents to make, have made,
use, have used, sell, offer to sell, import, research, develop, commercialize
and otherwise exploit Licensed Products in the Field; provided, however, that:

 

(a)                Joslin will retain the right to practice the Licensed Patents
for non-commercial, non-clinical research (provided such research is not
sponsored by any for-profit entity), teaching and other educational purposes
only, and the right to permit governmental laboratories and other not-for-profit
research institutions to practice the Licensed Patents for the foregoing
purposes; and

 

(b)               the U.S. federal government will retain rights in the Licensed
Patents pursuant to 35 U.S.C. §§ 200-212 and 37 C.F.R. § 401 et seq., and any
right granted in this Agreement greater than that permitted under 35 U.S.C. §§
200-212 or 37 C.F.R. § 401 et seq. will be subject to modification as may be
required to conform to the provisions of those statutes and regulations.

 

2.2              Sublicenses.

 

(a)                Licensee is entitled to grant Sublicenses to third parties
under the license granted pursuant to Section 2.1. All Sublicenses will be on
terms and conditions in compliance with and not inconsistent with the terms of
this Agreement.

 

(b)               Sublicenses will be granted only pursuant to written
agreements, which will be subject and subordinate to the terms and conditions of
this Agreement. Such Sublicense agreements will contain, among other things, the
following:

 

(i)                 all provisions necessary to ensure Licensee’s ability to
perform its obligations under this Agreement;

 

(ii)               a section substantially the same as Section 9
(Indemnification), which also will state that the Indemnitees (as defined in
Section 9) are intended third party beneficiaries of such Sublicense agreement
for the purpose of enforcing such indemnification and insurance provisions;

 

(iii)             in the event of termination of this Agreement by Joslin
pursuant to Section 10.3, (in whole or in part (e.g., termination in a
particular country)), any existing Sublicense will terminate; provided, however,
that, such Sublicense will not terminate if, as of the effective date of such
termination by Joslin pursuant to Section 10.3, a Sublicensee is not in material
default of its obligations to Licensee under its Sublicense agreement, and
within thirty (30) days of such termination the Sublicensee agrees in writing to
be bound directly to Joslin under a license agreement

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substantially similar to this Agreement with respect to the rights Sublicensed
hereunder, substituting such Sublicensee for Licensee; and

 

(iv)             any permitted assignee must agree in writing to be bound by the
terms of the assigned Sublicense agreement.

 

(c)                Notwithstanding anything to the contrary in 2.2(b) above, (i)
Licensee shall furnish Joslin with a fully executed copy of any such Sublicense
agreement, within thirty (30) days after its execution, which copy may be
redacted to exclude financial and other sensitive terms and shall be treated as
Confidential Information of Licensee hereunder. Joslin shall keep any such
copies of Sublicense agreements in its confidential files and shall use them
solely for the purpose of monitoring Licensee’s and Sublicensees’ compliance
with their obligations hereunder and enforcing Joslin’s rights under this
Agreement; (ii) Licensee shall report to Joslin annually the progress of
Sublicensees’ in developing and marketing Licensed Products; and (iii) Licensee
shall monitor Sublicensees’ development efforts under the Sublicenses to assess
reasonable and continuous progress in developing Licensed Products to commercial
application.

 

(d)               During the term of this Agreement, Licensee shall be
responsible for any breach of a Sublicense agreement by any Sublicensee that
results in a material breach of this Agreement. Licensee may elect (a) to cure
such breach in accordance with Section 10.3 of this Agreement or (b) to enforce
its rights by terminating such Sublicense agreement in accordance with the terms
thereof.

 

2.3              Affiliates. The licenses granted to Licensee under Section 2.1
will include the right to have some or all of Licensee’s rights or obligations
under this Agreement exercised or performed by one or more of Licensee’s
Affiliates; provided that:

 

(a)                no such Affiliate will be entitled to grant, directly or
indirectly, to any third party any right of whatever nature under, or with
respect to or permitting any use or exploitation of any of the Licensed Patents,
including any right to develop, manufacture, market or sell Licensed Products;
and

 

(b)               any act or omission taken or made by an Affiliate of Licensee
under this Agreement will be deemed an act or omission by Licensee under this
Agreement.

 

3.Development and Commercialization.

 

3.1              Development Plan.

 

(a)                Licensee will deliver a written development plan to Joslin
within one hundred twenty (120) days of the Effective Date (the “Development
Plan”), which Development Plan will summarize Licensee’s plans to utilize the
Licensed Patents for the development and commercialization of a Licensed
Product.

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(b)               Adjustment of Development Plan. Licensee will be entitled,
from time to time, to make such adjustments to the then applicable Development
Plan as Licensee believes, in its good faith judgment, are needed in order to
improve Licensee's ability to meet its diligence obligations set forth in
Section 3.3. Licensee shall provide Joslin with copies of any such adjusted
Development Plans. 

 

3.2              Annual Reporting and Meetings.

 

(a)                Within forty-five (45) days after each anniversary of the
Effective Date, Licensee will furnish Joslin with a written report on the
progress of its efforts during the prior year to develop and commercialize
Licensed Products, including without limitation research and development
efforts, efforts to obtain approvals from the FDA or any other Regulatory
Authority, marketing efforts and sales figures. The written report will contain
a sufficient level of detail to assess whether Licensee is in compliance with
its obligations under Section 3.3 below and shall also contain a discussion of
intended efforts and sales projections for the then current year.

 

(b)               The parties will meet at least two (2) times per contract year
during the first two

(2) years following the Effective Date, and at least on an annual basis
thereafter, or as otherwise agreed by the parties, at such times as are agreed
by the parties. Such meetings may be in-person, via videoconference, or via
teleconference, provided that at least one (1) meeting per contract year will be
held in person. During such meetings, Licensee will provide Joslin with a
summary of (i) its efforts to develop and commercialize Licensed Products as
detailed in the annual report discussed in Section 3.2(a) during the period
since submission of the previous such annual report and/or since the last
meeting, (ii) its strategy and activities relating to the grant of Sublicenses,
including, for example, a description of the corporate profile of Sublicensees
it is actively pursuing, the anticipated Sublicense terms and the geographies in
respect of which it anticipates granting Sublicenses and (iii) progress towards
the accomplishment of any of the milestone events described in Section 4.3 that
Licensee reasonably anticipates achieving within the next twelve (12) month
period. 

 

3.3              Diligence. Licensee shall use commercially reasonable efforts,
and shall cause its Sublicensees to use commercially reasonable efforts: (a) to
develop Licensed Products in accordance with the Development Plan; (b) to
undertake research and/or development activities directly related to the
commercialization of a Licensed Product; (c) to prepare and file the appropriate
application(s) for each Licensed Product that requires the approval of the FDA
or any Regulatory Authority; (d) to introduce Licensed Products into the
commercial market; and (e) to market Licensed Products following such
introduction into the market.

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If Joslin determines that Licensee has not fulfilled its obligations under this
Section 3.3, Joslin shall furnish Licensee with written notice of the
determination. Within sixty (60) days after Licensee’s receipt of the notice
described in the preceding sentence, Licensee shall either (i) fulfill the
relevant obligation, (ii) negotiate with Joslin a mutually acceptable schedule
of revised commercialization obligations, or (iii) dispute Joslin’s assertions
and initiate dispute resolution under Section 12.6. Notwithstanding the
foregoing, Joslin shall not have the right to terminate this Agreement for a
failure to meet the requirements of this Section 3.3 if Licensee shows progress
in development or commercialization of at least one Licensed Product during the
preceding twelve (12) month period.

 

4.Consideration for Grant of License

 

4.1              Equity.

 

(a)                Within thirty (30) days after the Effective Date, Licensee
shall issue to Joslin fifty thousand (50,000) shares of common stock of Licensee
and Licensee shall provide Joslin with a copy of Licensee’s capitalization table
on the Effective Date.

 

(b)               Within thirty (30) days after the first IND for a Licensed
Product becomes effective (that is, Licensee is permitted to dose subjects with
a Licensed Product consistent with FDA regulations), Licensee shall issue to
Joslin one hundred thousand (100,000) shares of common stock of Licensee.

 

4.2              Upfront Fees. Licensee shall pay Joslin an upfront fee of
$25,000 within fifteen (15) days following the Effective Date (the “Upfront
Fee”).

 

4.3              Milestone Payments.

 

(a)                Licensee shall make milestone payments to Joslin upon
achievement of each of the milestones events as set forth below by Licensee, its
Affiliates or Sublicensees. Licensee shall notify Joslin in writing within
thirty (30) days following the achievement by Licensee, its Affiliates or
Sublicensees of each milestone event described in this Section 4.3, and shall
make the appropriate milestone payment within thirty (30) days after the
achievement of such milestone event with respect to the first Licensed Product.
Each milestone payment shall become payable hereunder a maximum of one time no
matter how many times any of the milestone events are achieved and no matter
whether the milestone events are achieved by Licensee, its Affiliates or
Sublicensees:

 

(i)                [***] after the first IND for a Licensed Product becomes
effective (that is, Licensee (or an Affiliate or Sublicensee) is permitted to
dose subjects with a Licensed Product consistent with FDA regulations);

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(ii)              [***] upon completion of the first Phase 2 Clinical Trial with
respect to a Licensed Product;

 

(iii)             [***] upon the grant of marketing approval by FDA with respect
to a Licensed Product; and 

 

(iv)             [***] upon reaching aggregate Net Sales of [***] of a Licensed
Product in a calendar year.

 

The milestones set forth in Section 4.3 are intended to be successive. In the
event that a Licensed Product is not required to undergo the testing associated
with a particular milestone (“Skipped Milestone”), such Skipped Milestone will
be deemed to have been achieved at the time it is determined that the Licensed
Product is not required to undergo the said testing. Payment for any Skipped
Milestone that is owed in accordance with the provisions of this Section 4.3
will be due within thirty (30) days from the date it is deemed to be a Skipped
Milestone. Any amounts paid under this Section 4.3 shall be fully creditable
against amounts that become due under Section 4.5.

 

4.4              Royalties.

 

(a)                Rate. Licensee shall pay to Joslin royalties, on a
country-by-country and product- by-product basis, an amount equal to [***]
percent ([***]%) of Net Sales of Licensed Products.

 

(b)               Third Party Payment Set-Off. Licensee may offset [***] percent
([***]%) of any payments made to a third party that are directly related to the
acquisition of intellectual property rights or technology used for the
development, manufacture or commercialization of Licensed Products, provided
that in no event shall the royalty payments to Joslin be reduced by more than
[***] percent ([***]%) of the amount otherwise due.

 

4.5              Non-Royalty Sublicense Income. Licensee shall pay Joslin a
percentage of all Non-Royalty Sublicense Income as specified in the following
table, provided that Licensee’s obligation to make payments under this Section
4.5 shall expire when Licensee has paid Joslin cumulative, total payments of
Non-Royalty Sublicense Income equal to [***].  

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Effective Date of Sublicense   Percentage of Non-Royalty Sublicense Income Prior
to the first anniversary of the Effective Date   [***]%       After the first
anniversary of the Effective Date but on or before the second anniversary of the
Effective Date   [***]%      

After the second anniversary of the Effective Date but on or before the fifth
anniversary of the Effective Date

  [***]%       After the fifth anniversary of the Effective Date   [***]%

  

5.Reports; Payments; Records.

 

5.1              Reports and Payments.

 

(a)                Within ninety (90) days after the conclusion of each Calendar
Quarter commencing with the first Calendar Quarter in which Net Sales are
generated or Non-Royalty Sublicense Income is received, Licensee shall deliver
to Joslin a report containing the following information (in each instance, with
a Licensed Product-by-Licensed Product and country-by-country breakdown):

 

(i)                 the number of units of Licensed Products sold by Licensee,
its Affiliates and Sublicensees for the applicable Calendar Quarter;

 

(ii)               the gross amount invoiced for Licensed Products sold by
Licensee, its Affiliates and Sublicensees during the applicable Calendar
Quarter;

 

(iii)             a calculation of Net Sales for the applicable Calendar
Quarter, including an itemized listing of allowable deductions;

 

(iv)             a detailed accounting of all Non-Royalty Sublicense Income
received during the applicable Calendar Quarter; and

 

(v)the total amount payable to Joslin in U.S. Dollars on Net Sales and Non-
Royalty Sublicense Income for the applicable Calendar Quarter, together with the
exchange rates used for conversion.

 

Each such report will be certified on behalf of Licensee as true, correct and
complete in all material respects. If no amounts are due to Joslin for a
particular Calendar Quarter, the report will so state.

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(b)               Within ninety (90) days of the end of each Calendar Quarter,
Licensee shall pay Joslin all amounts due with respect to Net Sales and
Non-Royalty Sublicense Income for the applicable Calendar Quarter.

 

(c)                All payments due under this Agreement will be payable in U.S.
Dollars. Conversion of foreign currency to U.S. Dollars will be made at the
conversion rate existing in the United States (as reported in the Wall Street
Journal) on the last working day of the applicable Calendar Quarter. Such
payments will be without deduction of exchange, collection, or other charges.

 

5.2              Records. Licensee shall maintain, and shall cause its
Affiliates and Sublicensees to maintain, complete and accurate records of
Licensed Products that are made, used or sold under this Agreement, any amounts
payable to Joslin in relation to such Licensed Products and all Non-Royalty
Sublicense Income received by Licensee and its Affiliates, which records will
contain sufficient information to permit Joslin to confirm the accuracy of any
reports or notifications delivered to Joslin under Section 5.1. Licensee, its
Affiliates and/or its Sublicensees, as applicable, shall retain such records
relating to a given Calendar Quarter for at least five (5) years after the
conclusion of that Calendar Quarter, during which time Joslin will have the
right, at its expense, to cause an independent, certified public accountant to
inspect such records during normal business hours for the sole purpose of
verifying any reports and payments delivered under this Agreement. Such
accountant shall not disclose to Joslin any information other than information
relating to the accuracy of reports and payments delivered under this Agreement.
The parties shall reconcile any underpayment or overpayment within thirty (30)
days after the accountant delivers the results of the audit. In the event that
any audit performed under this Section 5.2 reveals an underpayment in excess of
five percent (5%) in any calendar year, the audited entity shall reimburse
Joslin for the amounts charged by the independent auditor. Joslin may exercise
its rights under this Section 5.2 only once every year per audited entity and
only with reasonable prior notice to the audited entity.

 

5.3              Late Payments. Any payments by Licensee that are not paid on or
before the date such payments are due under this Agreement will bear interest at
the lower of (a) [***] percent ([***]%) per month and (b) the maximum rate
allowed by law. Interest will accrue beginning on the first day following the
due date for payment and will be compounded quarterly. Payment of such interest
by Licensee shall not limit, in any way, Joslin’s right to exercise any other
remedies Joslin may have as a consequence of the lateness of any payment.

 

5.4              Payment Method. Each payment due to Joslin under this Agreement
will be paid by check or wire transfer of funds to Joslin’s account in
accordance with written instructions provided by Joslin. If made by wire
transfer, such payments will be marked so as to refer to this Agreement.

 

5.5              Withholding and Similar Taxes. All amounts to be paid to Joslin
pursuant to this Agreement will be without deduction of exchange, collection, or
other charges, except as permitted in the definition of Net Sales. In the event
that Licensee is required to withhold any amounts payable hereunder to Joslin
due to the applicable laws of any country, such amount will

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be deducted from the payment to be made by Licensee and remitted to the
appropriate taxing authority for the benefit of Joslin. Licensee will withhold
only such amounts as are required to be withheld by applicable law in the
country from which payment is being made. Licensee shall submit to Joslin
originals of the remittance voucher and the official receipt evidencing the
payment of the corresponding taxes with the applicable royalty report, if
possible, or within ten

(10) business days thereafter. Licensee will cooperate with Joslin to provide
such information and records as Joslin may require in connection with any
application by Joslin to the tax authorities in any country, including attempt
to obtain an exemption or a credit for any withholding tax paid in any country.

 

6.Patent Filing, Prosecution and Maintenance.

 

6.1              Prosecution of Licensed Patents. Joslin shall be responsible
for the preparation, filing, prosecution and maintenance of all Licensed
Patents. With respect to Licensed Patents, Joslin shall: (a) use independent
patent counsel reasonably acceptable to Licensee and instruct such patent
counsel to furnish Licensee with copies of all correspondence relating to the
Licensed Patents from the United States Patent and Trademark Office (USPTO) and
any other patent office, as well as copies of all proposed responses to such
correspondence in time for Licensee to review and comment on such response; (b)
give Licensee thirty (30) days to review the text of each patent application
before filing; (c) consult with Licensee with respect thereto;

(d)  supply Licensee with a copy of the application as filed, together with
notice of its filing date and serial number; (e) keep Licensee advised of the
status of actual and prospective patent filings; and (f) provide copies of any
papers related to the filing, prosecution, protection and maintenance of such
patent filings at least thirty (30) days in advance of filing or use of same.
Joslin shall give Licensee the opportunity to provide comments on and make
requests of Joslin concerning the preparation, filing, prosecution and
maintenance of the Licensed Patents, and shall consider such comments and
requests in good faith.

 

6.2              Past Expenses. Within thirty (30) days after the Effective
Date, Licensee shall reimburse Joslin for all documented, unreimbursed,
out-of-pocket expenses, if any, incurred by Joslin prior to the Effective Date
with respect to the preparation, filing, prosecution, protection and maintenance
of the Licensed Patents, such expenses not to exceed Sixty Five Thousand Dollars
($65,000). As of March 1, 2012, such amount is equal to approximately Sixty
Three Thousand Dollars ($63,000) .

 

6.3              Future Expenses. Subject to Section 6.4 below, within thirty
(30) days after receipt of each invoice from Joslin, Licensee shall reimburse
Joslin for all documented, out-of- pocket expenses incurred by Joslin in
connection with the preparation, filing, prosecution and maintenance of the
Licensed Patents.

 

6.4              Abandonment. If Licensee decides that it does not wish to pay
for the preparation, filing, prosecution or maintenance of any Licensed Patents
in a country (“Abandoned Licensed Patents”), Licensee shall provide Joslin with
prompt written notice of such election. Sixty (60) days after receipt of such
notice by Joslin, Licensee will be released from its obligation to reimburse
Joslin for the expenses incurred thereafter as to such Abandoned

 12 

 

 

Licensed Patents. In the event of Licensee’s abandonment of any Licensed
Patents, any license granted by Joslin to Licensee hereunder with respect to
such Abandoned Licensed Patents will terminate, and Licensee will have no rights
whatsoever to exploit such Abandoned Licensed Patents. Joslin will then be free,
without further notice or obligation to Licensee, to grant rights in and to such
Abandoned Licensed Patents to third parties. The claims of any Abandoned
Licensed Patents will cease to constitute Valid Claims and such Abandoned
Licensed Patents will cease to be part of the Licensed Patents.

 

6.5              Small Entity Designation. If Licensee, its Affiliates, any
Sublicensee and/or any holder of an option to obtain a Sublicense does not
qualify, or at any point during the term of this Agreement ceases to qualify, as
an entity entitled to pay lesser fees as provided by the USPTO (i.e., a “small
entity”) or the patent office of any other country, Licensee shall so notify
Joslin immediately, in order to enable Joslin to comply with regulations
regarding payment of fees with respect to Licensed Patents.

 

7.Enforcement of Licensed Patents.

 

7.1              Notice. In the event either party becomes aware of any possible
or actual infringement of any Licensed Patents relating to Licensed Products (an
“Infringement”), that party shall promptly notify the other party and provide it
with details regarding such Infringement.

 

7.2              Enforcement of Licensed Patents; Suit by Licensee. Licensee
will have the first right, but not the obligation, to take action in the
prosecution, prevention or termination of any Infringement of the Licensed
Patents. Before Licensee commences an action with respect to any such
Infringement, Licensee shall consider in good faith the views of Joslin and
potential effects on the public interest in making its decision whether to sue.
If Licensee elects to bring suit against an infringer, Licensee shall keep
Joslin reasonably informed of the progress of the action and shall give Joslin a
reasonable opportunity in advance to consult with Licensee and offer its views
about major decisions affecting the litigation. Licensee shall give careful
consideration to those views, but will have the right to control the action;
provided, however, that if Licensee fails to defend in good faith the validity
and/or enforceability of the Licensed Patents in the action or, if Licensee’s
license to all Valid Claims in the suit terminates, Joslin may elect to take
control of the action pursuant to Section 7.3. If Licensee elects to bring suit
against an infringer and Joslin is joined as party plaintiff in any such suit,
Joslin will have the right to approve the counsel selected by Licensee to
represent Licensee, such approval not to be unreasonably withheld. Licensee
shall not compromise or settle such litigation without the prior written consent
of Joslin, which consent shall not be unreasonably withheld or delayed. If
Licensee exercises its right to sue pursuant to this Section 7.2, and recovers
any damages or other sums in such action, or in settlement thereof, such damages
or other sums recovered shall first be applied to all out-of- pocket costs and
expenses incurred by the parties in connection therewith, including, without
limitation, attorneys’ fees. If such recovery is insufficient to cover all such
costs and expenses of both parties, it shall be shared in proportion to the
total of such costs and expenses incurred by each party. If, after such
reimbursement, any funds shall remain from such damages or other

 13 

 

 

sums recovered, Joslin shall receive out of any such remaining recovery received
by Licensee an amount as follows: (i) as to ordinary damages, Joslin shall
receive payment equivalent to payments that would have been due to Joslin under
this Agreement had the infringing sales that Licensee lost to the infringer been
made by Licensee and (ii) as to special or punitive damages, such amount shall
be divided seventy-five percent (75%) to Licensee and twenty-five percent (25%)
to Joslin.

 

7.3              Enforcement of Licensed Patents; Suit by Joslin. If Licensee
does not take action in the prosecution, prevention, or termination of any
Infringement of the Licensed Patents pursuant to Section 7.2 above, and has not
commenced negotiations with the infringer for the discontinuance of said
Infringement, within ninety (90) days after receipt of notice to Licensee by
Joslin of the existence of such an Infringement, Joslin may elect to do so. If
Joslin elects to bring suit against an infringer and Licensee is joined as party
plaintiff in any such suit, Licensee will have the right to approve the counsel
selected by Joslin to represent Joslin, such approval not to be unreasonably
withheld. The expenses of such suit or suits that Joslin elects to bring,
including any expenses of Licensee incurred in conjunction with the prosecution
of such suits or the settlement thereof, shall be paid for entirely by Joslin
and Joslin shall hold Licensee free, clear and harmless from and against any and
all costs of such litigation, including attorney’s fees. Joslin shall not
compromise or settle such litigation without the prior written consent of
Licensee, which consent shall not be unreasonably withheld or delayed. If Joslin
exercises its right to sue pursuant to this Section 7.3, and recovers any
damages or other sums in such action, or in settlement thereof, such damages or
other sums recovered shall first be applied to all out-of- pocket costs and
expenses incurred by the parties in connection therewith, including, without
limitation, attorneys fees. If such recovery is insufficient to cover all such
costs and expenses of both parties, it shall be shared in proportion to the
total of such costs and expenses incurred by each party. If, after such
reimbursement, any funds shall remain from such damages or other sums recovered,
then such amount shall be divided seventy-five percent (75%) to Joslin and
twenty-five percent (25%) to Licensee.

 

7.4              Own Counsel. Each party will always have the right to be
represented by counsel of its own selection and at its own expense, in any suit
instituted as authorized under this Section 7 by the other party for
Infringement.

 

7.5              Cooperation. Each party agrees to cooperate fully in any action
under this Article 8 that is controlled by the other party, provided that the
controlling party reimburses the cooperating party promptly for any costs and
expenses incurred by the cooperating party in connection with providing such
assistance.

 

7.6              Standing. If a party lacks standing and the other party has
standing to bring any such suit, action or proceeding, then such other party
shall do so at the request of and at the expense of the requesting party. If
either party determines that it is necessary or desirable for another party to
join any such suit, action or proceeding, the other party shall execute all
papers and perform such other acts as may be reasonably required in the
circumstances.

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7.7              Declaratory Judgment. If a declaratory judgment action is
brought naming Licensee and/or any of its Affiliates or Sublicensees as a
defendant and alleging invalidity or unenforceability of any claims within the
Licensed Patents, Licensee shall promptly notify Joslin in writing and Joslin
may elect, upon written notice to Licensee within thirty (30) days after Joslin
receives notice of the commencement of such action, to take over the sole
defense of the invalidity or unenforceability aspect of the action at its own
expense.

 

8.Warranties; Limitation of Liability.

 

8.1           Warranties.

 

(a)            Licensee represents and warrants that it will comply, and will
ensure that its Affiliates and Sublicensees comply, with all local, state, and
international laws and regulations relating to the development, manufacture,
use, sale and importation of Licensed Products. Without limiting the foregoing,
Licensee represents and warrants that it will comply, and will ensure that its
Affiliates and Sublicensees will comply, with all United States export control
laws and regulations with respect to Licensed Products.

 

(b)           Joslin represents and warrants to Licensee that, to the best of
its knowledge, as of the Effective Date: (i) the Licensed Patents have been
prosecuted in good faith; (ii) all fees required to maintain the effectiveness
of all patent applications and patents within the Licensed Patents have been
paid; (iii) all inventors of the inventions disclosed in the Licensed Patents
have duly assigned their rights therein to Joslin; (iv) except for the rights
and licenses granted to Licensee herein, Joslin has not granted any Third Party
any rights, licenses or options to practice the inventions disclosed in the
Licensed Patents, and (vi) Joslin has no knowledge of any claims asserting that
the practice of the inventions claimed by the Licensed Patents constitutes an
infringement or misappropriation of the rights of any Third Party.

 

8.2           No Warranty.

 

(a)            NOTHING CONTAINED HEREIN WILL BE DEEMED TO BE A WARRANTY BY
JOSLIN THAT IT CAN OR WILL BE ABLE TO OBTAIN PATENTS ON PATENT APPLICATIONS
INCLUDED IN THE LICENSED PATENTS, OR THAT ANY OF THE LICENSED PATENTS WILL
AFFORD ADEQUATE OR COMMERCIALLY WORTHWHILE PROTECTION.

 

(b)           JOSLIN DOES NOT MAKE ANY REPRESENTATION THAT THE PRACTICE OF THE
LICENSED PATENTS, THE DEVELOPMENT, MANUFACTURE, USE, SALE OR IMPORTATION OF ANY
LICENSED PRODUCT OR ANY ELEMENT THEREOF, WILL NOT INFRINGE THE PATENT OR
PROPRIETARY RIGHTS OF ANY THIRD PARTY.

 15 

 

 

(c)            EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, JOSLIN
AND LICENSEE EACH MAKE NO WARRANTIES WITH RESPECT TO ANY TECHNOLOGY, PATENTS,
GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY
DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

 

8.3           Limitation of Liability. Except with respect to Licensee’s
indemnification obligations under Section 9, Joslin and Licensee each will not
be liable to the other with respect to any subject matter of this Agreement
under any contract, negligence, strict liability or other legal or equitable
theory for (i) any indirect, incidental, consequential or punitive damages or
lost profits or (ii) cost of procurement of substitute goods, technology or
services.

 

9.Indemnification.

 

9.1              Licensee Indemnity. Licensee shall indemnify, defend and hold
harmless Joslin and its current and former directors, governing board members,
trustees, officers, faculty, medical and professional staff, employees,
students, and agents and its successors, heirs and assigns (collectively, the
“Indemnitees”) from and against any claim, liability, cost, expense, damage,
deficiency, loss or obligation or any kind or nature (including, without
limitation, reasonable attorneys’ fees and other costs and expenses of
litigation) (collectively, “Losses”) incurred in connection with all suit,
claims or demands of Third Parties (collectively, “Third Party Claims”) arising
from or occurring as a result of: (a) the development or commercialization of
any product made, used or sold pursuant to any right or license granted under
this Agreement, (b) personal injury or other product liability concerning any
product made, used or sold pursuant to any right or license granted under this
Agreement, (c) a breach by Licensee of its obligations under this Agreeement or
of its warranties under Section 8.1 above, and (d) any gross negligence or
willful misconduct on the part of Licensee in performing its obligations under
this Agreement, except in each case (clauses (a) through (d)) for those Losses
that: (i) arise out of a breach of this Agreement by Joslin or (ii) arise out of
the negligence or intentional misconduct of an Indemnitee.

 

9.2              Notice of Claim. Any Indemnitee that is seeking indemnification
hereunder (each a “Claiming Indemnitee”) shall give Licensee prompt written
notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any
fact upon which the Claiming Indemnitee intends to base a request for
indemnification under Section 9.1, and in no event shall the Licensee be liable
for any Losses that result from any delay in providing such notice. Each
Indemnification Claim Notice must contain a description of the claim and the
nature and amount of such Loss (to the extent that the nature and amount of such
Loss is known at such time). The Claiming Indemnitee shall furnish promptly to
Licensee copies of all papers and official documents received in respect of any
Losses and Third Party Claims.

 

9.3              Control of Defense. At its option, Licensee may assume the
defense of any Third Party Claim by giving written notice to the Claiming
Indemnitee within thirty (30) days after

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Licensee’s receipt of an Indemnification Claim Notice. The assumption of the
defense of a Third Party Claim by Licensee shall not be construed as an
acknowledgment that Licensee is liable to indemnify the Claiming Indemnitee in
respect of the Third Party Claim, nor shall it constitute a waiver by Licensee
of any defenses it may assert against the Claiming Indemnitee’s claim for
indemnification. Upon assuming the defense of a Third Party Claim, Licensee may
appoint as lead counsel in the defense of the Third Party Claim any legal
counsel selected by Licensee. In the event Licensee assumes the defense of a
Third Party Claim, the Claiming Indemnitee shall immediately deliver to Licensee
all original notices and documents (including court papers) received by the
Claiming Indemnitee in connection with the Third Party Claim. If Licensee
assumes the defense of a Third Party Claim, Licensee shall not be liable to the
Claiming Indemnitee for any legal expenses subsequently incurred by such
Indemnified Party in connection with the analysis, defense or settlement of the
Third Party Claim. In the event that it is ultimately determined that Licensee
is not obligated to indemnify, defend or hold harmless the Claiming Indemnitee
from and against the Third Party Claim, the Claiming Indemnitee shall reimburse
Licensee for any and all costs and expenses (including attorneys’ fees and costs
of suit) and any Third Party Claims incurred by Licensee in its defense of the
Third Party Claim.

 

9.4              Right to Participate in Defense. Without limiting Section 9.3
above, the Claiming Indemnitee shall be entitled to participate in, but not
control, the defense of such Third Party Claim and to employ counsel of its
choice for such purpose; provided, however, that such employment shall be at the
Claiming Indemnitee’s own expense unless (a) the employment thereof has been
specifically authorized by Licensee in writing, (b) Licensee has failed to
assume the defense and employ counsel in accordance with Section 10.1.3 (in
which case the Claiming Indemnitee shall control the defense) or (c) the
interests of the Claiming Indemnitee and Licensee with respect to such Third
Party Claim are sufficiently adverse to prohibit the representation by the same
counsel of both parties under Applicable Law, ethical rules or equitable
principles.

 

9.5              Settlement. With respect to any Third Party Claims relating
solely to the payment of money damages in connection with a Third Party Claim
and that shall not result in the Claiming Indemnitee becoming subject to
injunctive or other relief or otherwise adversely affecting the Claiming
Indemnitee in any manner, and as to which Licensee shall have acknowledged in
writing the obligation to indemnify the Claiming Indemnitee hereunder, Licensee
shall have the sole right to consent to the entry of any judgment, enter into
any settlement or otherwise dispose of such Loss, on such terms as Licensee, in
its sole discretion, shall deem appropriate. With respect to all other Losses in
connection with Third Party Claims, where Licensee has assumed the defense of
the Third Party Claim in accordance with Section 9.3, Licensee shall have
authority to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Loss provided it obtains the prior written consent of
the Claiming Indemnitee (which consent shall not be unreasonably withheld or
delayed). Licensee shall not be liable for any settlement or other disposition
of a Loss by an Indemnified Party that is reached without the written consent of
Licensee. Regardless of whether Licensee chooses to defend or prosecute any
Third Party Claim, no Indemnified Party shall admit any liability with

 17 

 

 

respect to or settle, compromise or discharge, any Third Party Claim without the
prior written consent of Licensee, such consent not to be unreasonably withheld
or delayed.

 

9.6              Cooperation. Regardless of whether Licensee chooses to defend
or prosecute any Third Party Claim, the Claiming Indemnitee shall cooperate in
the defense or prosecution thereof and shall furnish such records, information
and testimony, provide such witnesses and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested in
connection therewith. Such cooperation shall include access during normal
business hours afforded to Licensee to records and information that are
reasonably relevant to such Third Party Claim, and making Indemnified Parties
and other employees and agents available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder, and Licensee shall reimburse the Claiming Indemnitee for all its
reasonable out-of-pocket expenses in connection therewith.

 

9.7              Expenses. Except as provided above in this Section 9, the costs
and expenses, including fees and disbursements of counsel, incurred by the
Claiming Indemnitee in connection with any claim shall be reimbursed on a
Calendar Quarter basis by Licensee, without prejudice to Licensee’s right to
contest the Claiming Indemnitee’s right to indemnification and subject to refund
in the event Licensee is ultimately held not to be obligated to indemnify
Indemnitee.

 

9.8              Insurance.

 

(a)                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 by an Affiliate, Sublicensee or agent of
Licensee, Licensee shall, at its sole cost and expense, procure and maintain
commercial general liability insurance in amounts not less than $1,000,000 per
incident and $2,000,000 annual aggregate and naming Joslin as an additional
insured. During clinical trials of any such Licensed Product, Licensee shall, at
its sole cost and expense, procure and maintain commercial general liability
insurance in such equal or lesser amount as Joslin will require, naming Joslin
as an additional insured. Such commercial general liability insurance will
provide: (i) product liability coverage and (ii) broad form contractual
liability coverage for Licensee’s indemnification under this Agreement.

 

(b)               If Licensee elects to self-insure all or part of the limits
described above in Section 10.2.1 (including deductibles or retentions which are
in excess of $250,000 annual aggregate) such self-insurance program must be
acceptable to Joslin in its sole discretion. The minimum amounts of insurance
coverage required will not be construed to create a limit of Licensee’s
liability with respect to its indemnification under this Agreement.

 

(c)                Licensee shall provide Joslin with written evidence of such
insurance upon request of Joslin. Licensee shall provide Joslin with written
notice at least fifteen (15) days prior to the cancellation, non-renewal or
material change in such

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insurance; if Licensee does not obtain replacement insurance providing
comparable coverage within such fifteen (15) day period, Joslin will have the
right to terminate this Agreement effective at the end of such fifteen (15) day
period without notice or any additional waiting periods.

 

(d)               Licensee shall maintain such commercial general liability
insurance beyond the expiration or termination of this Agreement during: (i) the
period that any Licensed Product is being commercially distributed or sold by
Licensee, or an Affiliate, Sublicensee or agent of Licensee; and (ii) a
reasonable period after the period referred to in (i)above.

 

10.Term and Termination.

 

10.1          Term. The term of this Agreement will commence on the Effective
Date and, unless earlier terminated as provided in this Section 10, will
continue in full force and effect until expiration of the last to expire Valid
Claim (the “Term”).

 

10.2          Termination by Licensee. Licensee may terminate this Agreement
upon sixty

(60) days prior written notice to Joslin.

 

10.3          Termination for Default. In the event that either party commits a
material breach of its obligations under this Agreement and fails to cure that
breach within one hundred and twenty (120) days after receiving written notice
thereof, the other party may terminate this Agreement immediately upon written
notice to the party in breach. If a party’s right to terminate this Agreement
pursuant to this Section 10.3 is being disputed by the other party, which
dispute is being diligently pursued by such other party by appropriate
proceedings hereunder, such termination shall not be deemed effective unless a
court having jurisdiction over such matter confirms a material breach of this
Agreement as described above and the breaching party fails to cure such breach
within sixty (60) days following such arbitration decision. Both parties will be
required to perform in accordance with this Agreement during the pendency of any
such dispute.

 

10.4          Effect of Termination.

 

(a)                Upon termination of this Agreement by Joslin pursuant to
Section 10.3, or by Licensee pursuant to Section 10.2, the rights and licenses
granted to Licensee under Section 2.1 will terminate and all rights in and to
and under Joslin’s interest in the Licensed Patents will revert to Joslin.

 

(b)               Upon commission by Joslin of an uncured breach of this
Agreement as provided in Section 10.3, Licensee shall be permitted to either:
(i) terminate this Agreement and the rights and licenses granted to Licensee
under Section 2.1 will terminate and all rights in and to and under Joslin’s
interest in the Licensed Patents will revert to Joslin; or (ii) Licensee may, by
notice to Joslin, opt to continue the effectiveness of the Agreement (the
“Continuation Option”), provided that all payment obligations under Section 4
shall be reduced by [***] percent ([***]%)

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commencing on the date of breach of this Agreement by Joslin and continuing for
the remainder of the term of this Agreement and the Agreement shall otherwise
remain in full force and effect in accordance with its terms.

 

(c)                Termination or expiration of this Agreement will not relieve
the parties of obligations accruing prior to such termination or expiration,
including obligations to pay amounts accruing hereunder up to the date of
termination or expiration. After the date of termination or expiration,
Licensee, its Affiliates and Sublicensees (i) may sell Licensed Products then in
stock and (ii) may complete the production of Licensed Products then in the
process of production and sell the same; provided in the case of both (i) and
(ii) that Licensee shall pay the applicable royalties and payments to Joslin in
accordance with Section 4.4, provide reports and audit rights to Joslin pursuant
to Section 5 and maintain insurance in accordance with the requirements of
Section 9.8.

 

(d)               In the event Joslin terminates this Agreement pursuant to
Section 10.3, Licensee shall promptly provide Joslin with the right to
reference, cross-reference, review, have access to, incorporate and use all
documents and other materials filed by or on behalf of Licensee and its
Affiliates with any Regulatory Authority in furtherance of applications for
marketing approval in the relevant country with respect to Licensed Products.
Joslin will be entitled to freely use and to grant others the right to use all
such materials, documents and know-how delivered pursuant to this Section
10.4(d).

 

10.5          The parties’ respective rights, obligations and duties under
Sections: 5.2, 5.3, 5.4, 8.3, 9.1 – 9.7 (inclusive), 10.4, 11.1 – 11.5
(inclusive), 12.2, 12.4, 12.5 and 12.6, as well as any rights, obligations and
duties which by their nature extend beyond the expiration or termination of this
Agreement, will survive any expiration or termination of this Agreement. In
addition, Licensee’s obligations under Section 5.5 with respect to Sublicenses
granted prior to termination of the Agreement will survive termination.

 

11.Confidentiality.

 

11.1          Obligations. Each party (“Recipient”), when receiving Confidential
Information of the other party (“Discloser”), agrees to (a) hold in confidence
all of Discloser’s Confidential Information and, except as expressly provided in
Section 11.2 below, not disclose such Confidential Information without the prior
written consent of Discloser; (b) use Discloser’s Confidential Information
solely for the purposes permitted under this Agreement; (c) treat Discloser’s
Confidential Information with the same degree of care Recipient uses to protect
Recipient’s own confidential information but in no event with less than a
reasonable degree of care; and (d) reproduce Discloser’s Confidential
Information solely to the extent necessary to accomplish the purposes permitted
under this Agreement, with all such reproductions being considered Discloser’s
Confidential Information. Each party shall, consistent with its own internal
procedures, maintain a log of all Confidential Information it discloses
hereunder.

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11.2          Permitted Disclosures. Recipient may provide Disclosed
Confidential Information (including any of Discloser’s Confidential Information
included in Derivative Information) solely to its employees or consultants on a
need-to-know basis; provided, however that (a) any such employees and
consultants are bound by written obligations of confidentiality at least as
restrictive as those set forth in this Agreement, and (b) Recipient remains
liable for the compliance of such employees and consultants with such
obligations. In addition to the foregoing, Licensee may disclose Confidential
Information of Joslin as and to the extent reasonably necessary or convenient in
connection with the exercise of Licensee’s rights hereunder, including without
limitation, through the disclosure to actual and potential contract service
providers and Sublicensees, provided that such disclosure shall be subject to
confidentiality obligations that are similar in scope to the terms set forth in
this Section 11.

 

11.3          Exceptions. Recipient’s obligations of non-disclosure and non-use
under this Agreement, will not apply to any portion of Discloser’s Confidential
Information that Recipient can demonstrate by competent proof:

 

(a)is generally known to the public at the time of disclosure or becomes
generally known through no wrongful act on the part of Recipient;

 

(b)is in Recipient’s possession at the time of disclosure other than as a result
of Recipient’s breach of any legal obligation;

 

(c)becomes known to Recipient on a non-confidential basis through disclosure by
sources other than Discloser having the legal right to disclose such
Confidential Information; or

 

(d)is independently developed by Recipient without reference to or reliance upon
Discloser’s Confidential Information.

 

If Recipient is required by a governmental authority or by order of a court of
competent jurisdiction to disclose any of Discloser’s Confidential Information,
Recipient will give Discloser prompt written notice thereof and Recipient will
take all reasonable and lawful actions to avoid or minimize the degree of such
disclosure. Recipient will cooperate reasonably with Discloser in any efforts to
seek a protective order.

 

11.4          Survival. The obligations in this Section 11 shall survive for a
period of five (5) years following the expiration or termination of this
Agreement; provided, however, that the non-disclosure and non-use obligations
imposed by this Agreement with respect to trade secrets included in the
Confidential Information will continue for as long as Discloser continues to
treat such Confidential Information as a trade secret. Upon the expiration or
termination of this Agreement, Recipient will promptly, at Discloser’s option,
either destroy or return to Discloser any and all of Discloser’s Confidential
Information as follows. If Discloser elects to have Recipient destroy
Discloser’s Confidential Information, Recipient will destroy Discloser’s
Confidential Information (which will include removing and destroying any of
Discloser’s Confidential Information included in Derivative Information) and
will provide a written certification to Discloser certifying that all of
Discloser’s Confidential Information has been destroyed. If Discloser elects to
have Recipient return Discloser’s Confidential Information,

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Recipient will return all of Discloser’s Confidential Information (which will
include returning any of Discloser’s Confidential Information included in
Derivative Information, with Recipient’s Confidential Information or third party
confidential information redacted) and will provide a written certification to
Discloser certifying that all of Discloser’s Confidential Information has been
returned. Recipient may, however, retain one (1) copy of Discloser’s
Confidential Information in its confidential files, solely for the purpose of
monitoring its continuing obligations of confidentiality and non-use under this
Agreement.

11.5          Remedies. Recipient agrees that (a) Discloser may be irreparably
injured by a breach of this Agreement by Recipient; (b) money damages would not
be an adequate remedy for any such breach; (c) as a remedy for any such breach
Discloser will be entitled to seek equitable relief, including injunctive relief
and specific performance, without being required by Recipient to post a bond;
and (d) such remedy will not be the exclusive remedy for any breach of this
Agreement.

 

12.Miscellaneous.

 

12.1          Preference for United States Industry. During the period of
exclusivity of this license in the United States, Licensee shall comply with 37
C.F.R. § 401.14 (i) or any successor rule or regulation. Upon Licensee’s
request, Joslin agrees to make reasonable efforts to assist Licensee in
obtaining a waiver of the requirements imposed by such rules or regulations.

 

12.2          Use of Name. Licensee shall not, and shall ensure that its
Affiliates and Sublicensees shall not, use the name or insignia of Joslin or the
name of any of Joslin officers, faculty, other researchers or students, or any
adaptation of such names, in any advertising, promotional or sales literature,
including without limitation any press release or any document employed to
obtain funds, without the prior written approval of Joslin. This restriction
will not apply to any information required by law to be disclosed to any
governmental entity.

 

12.3          Entire Agreement. This Agreement is the sole agreement with
respect to the subject matter hereof and except as expressly set forth herein,
supersedes all other agreements and understandings between the parties with
respect to the same.

 

12.4          Notices. Unless otherwise specifically provided, all notices
required or permitted by this Agreement will be in writing and may be delivered
personally, or may be sent by electronic transmission or certified mail, return
receipt requested, to the following addresses, unless the parties are
subsequently notified of any change of address in accordance with this Section
12.4:

 

If to Licensee: Ember Therapeutics, Inc.
855 Boylston Street, 11th Floor
Boston, MA 02116
Attn: Chief Executive Officer

  

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Copy to:

 

Goodwin Procter LLP

53 State Street

Boston, MA 02109

Attn: Christopher Denn

    If to Joslin:

Joslin Diabetes Center, Inc.

One Joslin Place

Boston, MA 02215

Attn: General Counsel

 

Any notice will be deemed to have been received as follows: (a) by personal
delivery, upon receipt; (b) by facsimile, one business day after transmission or
dispatch; (c) by airmail, seven (7) business days after delivery to the postal
authorities by the party serving notice. If notice is sent by facsimile, a
confirming copy of the same will be sent by mail to the same address.

 

12.5          Governing Law and Venue. Subject to Section 12.6, this Agreement
will be governed by, and construed in accordance with, the substantive laws of
the Commonwealth of Massachusetts, without giving effect to any choice or
conflict of law provision, except that questions affecting the construction and
effect of any patent will be determined by the law of the country in which the
patent will have been granted.

 

12.6          Dispute Resolution. Disputes arising under or in connection with
this Agreement shall be resolved pursuant to this Section 12.6; provided,
however, that in the event a dispute cannot be resolved without an adjudication
of the rights or obligations of a Third Party (other than an Indemnitee), the
dispute procedures set forth in this Section 12.6 shall be inapplicable as to
such dispute.

 

(a)                In the event of a dispute between the parties, the parties
shall first attempt in good faith to resolve such dispute by negotiation and
consultation between themselves. In the event that such dispute is not resolved
on an informal basis within forty- five (45) days, any party may, by written
notice to the other, have such dispute referred to each of the parties’
respective senior officers, who shall attempt in good faith to resolve such
dispute by negotiation and consultation for a thirty (30) day period following
receipt of such written notice.

 

(b)               In the event the parties’ senior officers are not able to
resolve such dispute, either party may at any time after such 30-day period
submit such dispute to be finally settled by arbitration administered in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) in effect at the time of submission. The arbitration shall
be heard and determined by three (3) arbitrators. Licensee and Joslin shall each
appoint one arbitrator and the third arbitrator shall

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be selected by the two party-appointed arbitrators, or, failing agreement within
sixty (60) days following the date of receipt by the respondent of the claim, by
the AAA. Such arbitration shall take place in Boston, Massachusetts. The
arbitration award so given shall be a final and binding determination of the
dispute, shall be fully enforceable in any court of competent jurisdiction, and
shall not include any damages expressly prohibited by Section 8.3.

 

(c)                Costs of arbitration are to be divided by the parties in the
following manner: Licensee shall pay for the arbitrator it chooses, Joslin shall
pay for the arbitrator it chooses, and the costs of the third arbitrator shall
be divided equally between the parties. Except in a proceeding to enforce the
results of the arbitration or as otherwise required by law, neither party nor
any arbitrator may disclose the existence, content or results of any arbitration
hereunder without the prior written consent of both parties.

 

(d)               Each party shall continue to performits obligations under this
Agreement pending final resolution of any dispute arising out of or relating to
this Agreement. However, a party may suspend performance of its obligations
during any period in which the other party fails or refused to perform its
obligations.

 

(e)                Although the procedures specified in this Section 12.6 are
the exclusive procedures for resolution of disputes arising out of or relating
to this Agreement, either party may seek a preliminary injunction or other
provisional equitable relief if, in its reasonable judgment, that action is
necessary to avoid irreparable harm to itself or to preserve its rights under
this Agreement.

 

(f)                The parties agree that all applicable statutes of limitation
and time-based defenses (such as estoppel and laches) are tolled while the
procedures set forth in this Section 12.6 are pending. The parties shall take
any actions necessary to effectuate this result.

 

12.7          Binding Effect. This Agreement will be binding upon and inure to
the benefit of the parties and their respective legal representatives,
successors and permitted assigns.

 

12.8          Headings. Section and subsection headings are inserted for
convenience of reference only and do not form a part of this Agreement.

 

12.9          Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original.

 

12.10      Amendment; Waiver. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party
waiving compliance. The delay or failure of any party at any time or times to
require performance of any provisions hereof will in no manner affect the rights
at a later time to enforce the same. No waiver by either party of any condition
or

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of the breach of any term contained in this Agreement, whether by conduct, or
otherwise, in any one or more instances, will be deemed to be, or considered as,
a further or continuing waiver of any such condition or of the breach of such
term or any other term of this Agreement.

 

12.11      No Agency or Partnership. Nothing contained in this Agreement will
give any party the right to bind another, or be deemed to constitute either of
the parties as agents for each other or as partners with each other or any third
party.

 

12.12      Assignment and Successors. This Agreement may not be assigned by
either party without the consent of the other, which consent shall not be
unreasonably withheld, except that each party may, without such consent, assign
this Agreement and the rights, obligations and interests of such party to any of
its Affiliates, to any purchaser of all or substantially all of its assets or
business to which the subject matter of this Agreement relates, or to any
successor corporation resulting from any merger or consolidation of such party
with or into such corporation; provided, in each case, that the assigning party
provides the other party with notice of such assignment within ten (10) days of
closing and the assignee agrees in writing to be bound by the terms of this
Agreement. Any assignment purported or attempted to be made in violation of the
terms of this Section 12.12 will be null and void and of no legal effect.

 

12.13      Force Majeure. Neither party will be responsible for delays resulting
from causes beyond the reasonable control of such party, including without
limitation fire, explosion, flood, war, strike, or riot, provided that the
nonperforming party uses commercially reasonable efforts to avoid or remove such
causes of nonperformance and continues performance under this Agreement with
reasonable dispatch whenever such causes are removed.

 

12.14      Interpretation. The parties hereto acknowledge and agree that: (a)
each party and its counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; (b) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (c) the terms and provisions of this Agreement shall be construed fairly as
to both parties hereto and not in favor of or against either party, regardless
of which party was generally responsible for the preparation of this Agreement.

 

12.15      Severability. If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of this
Agreement will not be affected.

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

 

By: /s/ Louis A. Tartaglia

Name: Louis A. Tartaglia

Title: CEO

 

By: /s/ Nandan Padukone

Name: Nandan Padukone

Title: VP Commercialization and Ventures

 

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Exhibit A Licensed Patents

 

Joslin No. Inventors IDR Title U.S. and foreign patent application/patent
numbers JDP-088

Joslin Diabetes Center: Ronald C. Kahn,

Yu-Hua Tseng.

 

Children’s Hospital: Atul Butte

“Methods and Compositions for Modulating Adipocye Function”

U.S. Patent App. No. 12/502551, file date Jul 14, 2009.

 

U.S. Patent, Granted, No 7576052, Grant Date 18-Aug- 2009; Original filing
10/968791, filing date 18- Oct-2004.

 

PCT Nationalized PCT/US2004/034491, file date 18-Oct-2004;

 

Nationalized PCT European Patent Office Serial No. 04795629.7, file date 05-
May-2006;

JDP-136 Joslin Diabetes Center: Yu-Hua Tseng; Efthymia Kokkotou “Bone
Morphogenetic Proteins for Appetite Control”

U.S. Prov. App. No. 61/179977, file date 20-May- 2009.

 

U.S. Patent App. No. 12/784228, file date May 20- 2010.

JDP-137 Joslin Diabetes Center: Yu-Hua Tseng; Ronald C. Kahn “Bone Morphogenetic
Proteins for The Treatment of Insulin Resistance”

U.S. Prov. App. No. 61/180371, file date 21-May- 2009.

 

PCT/US10/35831, file date 21-May-2010;

 

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