Exhibit
10.28


 


Confidential Materials omitted and filed separately with the


Securities and Exchange Commission. Asterisks denote omissions.


 


EXECUTION
COPY


 


LICENSE AGREEMENT


 


This License Agreement (the “Agreement”)
effective as of this 21st day of April, 2005, between Fred Hutchinson Cancer Research Center, a research
institution organized as a nonprofit corporation under the laws of the state of
Washington, having its principal offices at 1100 Fairview Avenue North,
Seattle, Washington 98109 (“FHCRC”) and Ikaria Inc., a
Delaware corporation, with principal offices currently at 1100 Fairview Avenue
North, Seattle, Washington 98109 (“Company”).


 


WHEREAS, FHCRC in accordance
herewith, is in possession of right, title, and interest in and to the Patent
Rights and Technical Data; and


 


WHEREAS, FHCRC has, in
accordance herewith, the right to grant licenses to the Patent Rights and
Technical Data, and wishes to have the Patent Rights and Technical Data
utilized in the public interest; and


 


WHEREAS, Company is a new
start-up company created by Dr. Mark Roth with business development assistance
from FHCRC and Company is desirous of acquiring a license to the Patent Rights
and Technical Data;


 


WHEREAS, Company has
acquired and is in the process of acquiring additional venture capital
financing to develop new products and services utilizing the Patent Rights and
Technical Data;


 


WHEREAS, FHCRC is willing to
grant a license to Company to the Patent Rights and Technical Data subject to
the terms and conditions set forth herein;


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants set forth herein, and
for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:


 


1.                                      Definitions


 


1.1          “Affiliate” or “Affiliates” means (i) any
corporation, company or other entity in which Company directly or indirectly
owns or controls at least fifty percent (50%) of the stock entitled to vote in
election of the Board of Directors; (ii) any corporation, company or other
entity which directly or indirectly owns or controls at least fifty percent
(50%) of the stock of Company entitled to vote in the election of
directors.  Affiliate or Affiliates also
means any corporation, company or other entity which is under common control
with Company.


 


1.2          “FHCRC Improvements” means FHCRC’s intellectual
property and proprietary rights in: (i) Assignor Inventions; and (ii) inventions
or discoveries, whether patentable or unpatentable, that (a) are owned by FHCRC
or its affiliates; (b) are invented in whole or in part by Dr. Mark Roth or
other FHCRC (or its affiliates’) employees or contractors under Dr. Roth’s
direct supervision during the Term of this Agreement; (c) are within the 


 

















 


Licensed Fields; (d) are directed only to the specific subject matter
disclosed in the patents and patent applications listed in Exhibit A; (e) are
not funded (excluding government funding) by any non-Affiliated third parties
having a claim, potential claim, or option of rights to such inventions and
discoveries funded by such third parties; and (f) are reasonably necessary to
develop and commercialize the Subject Technology consistent with the terms of
this Agreement.


 


1.3          “Licensed Fields” means any and every field
including, but not limited to, any preventative, therapeutic, diagnostic, or
other use.


 


1.4          “Licensed Product” means any product, process or use
thereof (including but not limited to the production, formulation,
administration and/or delivery of a compound or compounds to control, reduce,
inhibit, or otherwise moderate metabolic processes in animals, especially
humans, and devices, machinery or other apparatus used for the administration,
delivery or performance thereof): (a) which is covered by a Valid Claim
contained in the Patent Rights in the country in which the product, process or
use thereof is made, used, sold or transferred; (b) which is produced or
manufactured using a process or product which is covered by a Valid Claim
contained in the Patent Rights in the country in which the product, process or
use thereof is made, used, sold, or transferred; (c) the use of which is
covered by a Valid Claim contained in the Patent Rights in the country in which
the product, process or use thereof is made, used, sold, or transferred; (d) contains,
incorporates, includes, involves or otherwise uses the Technical Data; or (e) contains,
incorporates, includes, involves or otherwise uses a FHCRC Improvement.  For the removal of doubt, Licensed Product
includes, but is not limited to, the use of a compound or pro-drug which
contains, or is metabolized to make available, a reactive sulfur-containing
moiety, or other like chemical moiety, to reduce or limit respiration and/or
heart beat and/or body temperature in an animal, especially a human, as
described in the Patent Rights above and covered by a Valid Claim or including
Technical Data.


 


1.5          “Licensed Patented Product” means any Licensed
Product which is described, in whole or in part, by 1.4 (a), (b) or (c) above,
or which is described, in whole or in part, by 1.4(d) or (e) above and is
covered by a Valid Claim in the Patent Rights.


 


1.6          “Improvement Product” means a Licensed Patented
Product: (i) for which the active agent, compound, drug, or chemical entity, or
the use of such agent, compound, drug or chemical entity is not covered in the
territory where such agent, compound, drug or chemical entity is made, used or
sold by a Valid Claim in the Patent Rights in which the structure of such
agent, compound, drug or chemical is specifically recited or is a species of a
generic structure which is specifically recited; or (ii) for which the device
or apparatus is not covered in the territory where such device or apparatus is
made, used or sold by a Valid Claim in the Patent Rights which is a device or
apparatus claim.


 


1.7          “Major Country” means the United States of America,
any individual country within the European Union, or Japan.


 


2

















 


1.8          “Net Sales” means Company’s, its Affiliates’ and
their sublicensees’ gross receipts for the sale, license, lease, sublicense or
transfer of any Licensed Products to any third party, less the sum of the
following:


 


·      Discounts, credits, refunds and rebates actually
allowed in amounts customary in the trade;


 


·      Sales and value added taxes, tariffs, duties and use
taxes directly imposed on the sale of Licensed Products and actually paid by
Company, its Affiliates or any of their sublicensees;


 


·      Reasonable and customary rebates and similar
payments made with respect to sales paid for by any governmental or regulatory
authority such as, by way of illustration and not in limitation of the parties’
rights hereunder, programs in the applicable territory that are equivalent or
similar to Federal or state Medicaid, Medicare or similar state programs in the
United States;


 


·      Amounts allowed or credited on returns of sales of
Licensed Products; and


 


·      Amounts that are written off as non-collectible
after Company’s, its Affiliates’ or their sublicensees’ commercially reasonable
efforts to collect such amounts, exclusive of costs of collection.


 


1.8.1       No deductions may be made for commissions paid to
individuals for the sale of Licensed Products, whether they are independent
sales agents or regularly employed by Company, its Affiliates or their
sublicensees, nor for any other cost incurred in the manufacture, marketing,
sale, distribution, shipment, promotion, advertisement, exploitation or
commercialization of Licensed Products.


 


1.8.2       In the case of Licensed Products transferred by
Company or its Affiliate(s) to one another or to a third party where (i) such
transferee is using such Licensed Products for the purposes of selling products
or creating products for sale or for services in the commercial market (other
than under a written agreement pursuant to which the transferee’s use of the
Licensed Product(s) is limited to research purposes internal to such transferee
only for which such transferee does not derive a commercial or other economic
benefit) and (ii) such transferee has, in connection with such transfer, paid
consideration to Company in a form other than cash for Licensed Product, the
Net Sales shall mean the cash consideration that the selling party would
receive if they were sold to an unrelated, unaffiliated third party in an arm’s
length sale of the same product in similar quantities at the same time and
place (the “Fair-Market Value”).


 


1.8.3       Licensed Products will be considered “sold” when
delivered, billed out, or invoiced, whichever comes first.  For all Licensed Products used by Company as
premiums to promote, market, sell or lease products or processes other than
Licensed Products, the Licensed Products will be deemed to have been sold at
the Fair Market Value.


 


3

















 


1.8.4       A “sale” shall not include transfers or dispositions
for bona fide charitable purposes or when Licensed Products are distributed
alone, prior to receiving regulatory approval for sale or use of such Licensed
Products, for pre-clinical, clinical, regulatory or governmental regulatory
purposes for which no compensation or financial or economic benefit is received
by, or accrued to, Company, its Affiliates or sublicensees.


 


1.8.5       Individual samples of Licensed Products that are
provided by Company in reasonable and industry-standard quantities free of charge
and with no direct or indirect benefit to Company in a bona fide effort to
promote sales of the Licensed Products only shall not be considered transfers
or sales for the purposes of Section 1.8 above.


 


1.8.6       With respect to a Licensed Product that is sold as
part of a combination product with one or more other functional products or
functional product enhancements which are not Licensed Products, the Net Sales
of such Licensed Product, for the purposes of determining royalty payments,
shall be determined by multiplying the Net Sales of the combination product by
the fraction A/(A+B) where A is the average published sale price of such
Licensed Product when sold separately in finished form in like quantities and B
is the average published sale price of the other products in the combined
product sold separately in finished form in like quantities.  In the event such average published sale
price of the other products in the combined product cannot be determined, Net Sales
for the purposes of determining royalty payments for the combination product
shall be calculated by multiplying the Net Sales of the combination product by
the fraction A/C where A is the average published sale price of such Licensed
Product when sold separately in finished form and C is the average published
sale price of the combined product.


 


1.9          “Patent Rights” means: (a) the United States and
foreign patents and patent applications specified in Exhibit A and any other
patent applications currently filed or to be filed directed to the same subject
matter or FHCRC Improvements, wherever filed, including, without limitation,
continuation applications, continuation-in-part applications (only to the
extent the claims of the continuation-in-part are directed to the subject
matter disclosed in the patent and patents applications listed in Exhibit A or
FHCRC Improvements), divisional applications, substitute applications, reissue
applications or requests for examination and foreign applications; (b) all
patents (U.S. or foreign) now issued or hereafter issuing on any patent
applications described in (a); and (c) any revisions, renewals, reissues or
extensions of any such patents.


 


1.10        “Phase III Trial” means a human clinical trial
commonly referred to as a “phase III trial” which is (i) designed with a
patient population estimated to be large enough to provide
statistically-significant clinical data re-confirming previously acquired human
clinical data concerning the efficacy and tolerability of a Licensed Product;
and (ii) that is required by the US FDA or other like regulatory body or
governmental agency in a foreign country prior to approval of such Licensed
Product for such use in such country.


 


4

















 


1.11        “Subject Technology” means the Patent Rights, FHCRC
Improvements, and Technical Data.


 


1.12        “Technical Data” means any and all data,
information, know-how, and trade secrets, if any, which is contained or
disclosed in the patents and patent applications included in the Patent Rights
or which is owned by FHCRC and provided to Company by FHCRC under this
Agreement.


 


1.13        “FHCRC Inventors” means, collectively Dr. Mark Roth
and Dr. Pam Padilla.


 


1.14        “Valid Claim” means (a) any claim of an issued
patent which has not expired and which has not been held invalid or
unenforceable by decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal
having expired, and which has not been admitted to be invalid through reissue,
disclaimer or otherwise; or (b) any then-currently pending claim of a patent
application pending for less than nine years from its priority date.


 


1.15        “Effective Date” means the date in the first line of
this Agreement.


 


1.16        “Arbitration” means non-binding arbitration before a
panel of arbitrators with expertise in the general area of biotechnology and
life-sciences license agreements selected by mutual agreement of the parties in
Seattle, Washington, administered by the American Arbitration Association under
its Commercial Arbitration Rules.


 


1.17        “Major Breach” means any of the following events:


 


(i) Company defaults in any payment due to FHCRC under this Agreement,
including, but not limited to, a license fee, royalty, Milestone Payment or
other payment due under this Agreement;


 


(ii) Company commits two (2) or more distinct material breaches of its
confidentiality obligations to FHCRC under Section 7 of this Agreement within
any twelve (12) month period;


 


(iii) Company breaches its indemnity obligations under Section 13 of
this Agreement such that FHCRC reasonably believes that it may be subject to
liability exposure of greater than $500,000 and that Company, by its action or
inaction, continues to increase such liability exposure; or


 


(iv) Company materially breaches: (a) its obligations to include terms
and conditions in its sublicense agreements required pursuant to Section 5; (b)
the last sentence of Section 12.3 or the provisions of Section 12.5; (c) the
restriction against assignment in Section 14.


 


1.18        “Assignor Inventions” shall have the meaning
ascribed to it in that certain Assignment Agreement between Company and FHCRC
made as of April 8, 2005.


 


5

















 


2.                                      Grant
of License


 


2.1          Subject to the terms and conditions of this
Agreement including but not limited to Section 3, FHCRC, on behalf of itself
and its affiliates, hereby grants to Company and Company hereby accepts from
FHCRC, an exclusive (even as to FHCRC and its affiliates, subject to Section 2.2),
worldwide right and license to make, have made, use, research, lease, market,
offer to sell, sell, improve, import, and export Licensed Products, and to use
and practice the Patent Rights and FHCRC Improvements, including the right to
sublicense any and all such rights in the Licensed Fields.  FHCRC, on behalf of itself and its
affiliates, further grants to Company, and Company hereby accepts from FHCRC
upon the terms and conditions of this Agreement, a non-exclusive, worldwide right
and license to make, have made, use, practice, lease, offer to sell, sell,
import, export, modify, reproduce, distribute and create derivative works of
Technical Data, including the right to sublicense any and all such rights in
the Licensed Fields.  Further, Company’s
Affiliates that are sublicensed under the foregoing licenses shall have the
right to further sublicense such rights pursuant to the terms of this
Agreement.


 


2.2          The right and license granted to Company by FHCRC in
Section 2.1 above is subject to (i) a reservation of rights by the FHCRC and
its affiliates, including the Seattle Cancer Care Alliance (“SCCA”) to make,
have made, use and practice the Licensed Products, Technical Data, FHCRC
Improvements, and Patent Rights for the FHCRC’s, its affiliates and the SCCA’s
educational, academic, clinical and research purposes; (ii) any and all other
rights of FHCRC not expressly granted by them in this Agreement, and (iii) the
rights, if any, of the federal government under federal funding guidelines.


 


2.3          Company acknowledges that the United States
Government may retain certain rights in the inventions funded in whole or in
part under any contract, grant or similar agreement with a Federal agency.  The license granted under this Section 2 is
expressly subject to any such rights.  To
the extent that any such Federally-funded inventions are covered by any claims
of the Patent Rights, Company agrees that any products that embody such
Federally-funded inventions or that are produced through the use of such
Federally-funded inventions shall be manufactured or produced substantially in
the United States unless the Federal agency that funded such invention waives
the requirement for the manufacturing or production in the United States upon a
satisfactory showing that reasonable but unsuccessful efforts have been made to
grant a license under similar terms to potential licensees that would be likely
to manufacture or produce substantially in the United States or that under the
circumstances manufacturing or production in the United States is not commercially
feasible.  Upon Company’s request, FHCRC
will provide any documentation reasonably necessary for Company to determine
what inventions covered by the Patent Rights are Federally-funded.


 


2.4          Except as expressly provided for in this Agreement,
no license or other rights, either express or implied, are granted by FHCRC to
Company by the execution of this Agreement or the transfer of any materials or
information hereunder.


 


2.5          Company shall not cause or permit any lien,
mortgage, encumbrance, restriction, security interest or other legal or
equitable claims to be entered or placed upon this Agreement, 


 


6

















 


the license to Company under this Agreement or any rights, including
sublicensing rights (but excluding the Company’s rights to receive royalties
and payments from its sublicensees), under this Agreement.  Company shall not offer, pledge or claim, or
permit another to offer, pledge or claim, this Agreement, the license to
Company under this Agreement, or any rights, including sublicensing rights,
under this Agreement as security or a security interest for any purpose.


 


3.                                      Equity,
License Fees, Royalties and other Financial Consideration


 


3.1          In partial consideration for (a) the right and
license granted to Company pursuant to this Agreement to the Patents Rights and
Technical Data and transfer of the Technical Data, and (b) the right and
license granted to Company to FHCRC Improvements, Company will issue to FHCRC
upon execution of this Agreement eight hundred seven thousand five hundred
(807,500) shares of its common stock, $0.001 par value per share (“Common Stock”),
which, combined with the 142,500 shares of Series A preferred stock to be
issued pursuant to Section 10.2 below, is expected to represent approximately
10.41% of the fully diluted capitalization of the Company immediately following
the Initial Closing (as defined in the Series A Preferred Stock Purchase
Agreement, dated as of the date hereof, by and among the Company, FHCRC, and
certain investors in the Company), as set forth on the capitalization table of
Company attached hereto as Exhibit B.  If
Company deviates in any material way from the capitalization of the Company as
described in Exhibit B prior to consummation of the Initial Closing Company
agrees that it shall take all action (which must be reasonably satisfactory to
FHCRC) necessary to assure that FHCRC’s relative percent holdings of Company
following completion of the Series A financing are not substantively reduced
from those represented in Exhibit B.  If
at any time on or prior to the date of the Second Closing (as defined in such
Stock Purchase Agreement), the conversion price of the Series A preferred stock
is changed from the conversion price in effect on the date of the Initial
Closing, pursuant to the anti-dilution protections contained in Section 4(d) of
Article IV(B) of the Amended and Restated Certificate of Incorporation of the
Company or otherwise, for any event other than a capital raising financing,
such that the holders of Series A preferred stock are entitled to receive
additional shares of Common Stock upon conversion, then the Company shall issue
to FHCRC an additional number of shares of Common Stock in an amount equal to
the number of additional shares of Common Stock issuable upon conversion of one
share of Series A preferred stock as a result of the change in the Series A
preferred stock conversion rate multiplied by the number of shares of Common
Stock held by FHCRC.  For the avoidance
of doubt, FHCRC shall have no right to such additional shares at any time after
the Second Closing.


 


3.1.1       The shares of Common Stock issuable to FHCRC under
this Section 3.1 are referred to as the “FHCRC Shares.” Exhibit B attached
hereto sets forth the authorized and issued capital stock of Company as of the
Effective Date.  The agreed upon value of
the FHCRC Shares for income tax and financial reporting purposes is $80,750 and
the shares of Series A Preferred Stock is $ 142,500 for a total of
$223,250.  Upon issuance, the FHCRC Shares
will be duly authorized, validly issued, fully paid and nonassessable.  In conjunction with the issuance of FHCRC
Shares, FHCRC and Company as of the date hereof will enter into 


 


7

















 


agreements which will provide for, inter alia,
rights of co-sale and piggyback registration rights of FHCRC’s Shares and the
right for FHCRC to appoint a non-voting observer to attend Company Board of
Directors (“Company Board”) meetings and receive any and all material documents
provided to the members of the Company Board; provided, however, that such
observer shall hold in confidence and trust such information in accordance with
Section 7 below and any other agreements between the Company and FHCRC
regarding confidentiality and to comply with any applicable fiduciary
obligations, if any, with respect to all information so provided; and provided,
further, that the Company reserves the right to withhold certain information
and to exclude such observer from certain meetings or portions thereof if
access to such information or attendance at such meeting could reasonably
affect the attorney-client privilege between the Company and its counsel, if it
relates to any negotiations, disputes, or related matters between the Company and
FHCRC, or if the Company Board determines in its sole discretion to meet in
executive session.


 


3.1.2       The FHCRC Shares are attributed to FHCRC according
to the following formula:


 


(a)           [**] percent ([**]%) of the FHCRC Shares are
attributed to the right and license granted to the Company to the Patent Rights
and Technical Data;


 


(b)           [**] Percent ([**]%) of the FHCRC Shares are
attributable to the right and license to FHCRC Improvements.


 


3.2          In partial consideration for the license granted
under this Agreement and during the Term of this license, Company will pay to
FHCRC a royalty on Net Sales of any and all Licensed Products according to the
following formulas:


 


(i)            [**] percent ([**]%) on Net Sales by Company, its
Affiliates, and sublicensees of any Licensed Patented Products that are not
Improvement Products;


 


(ii)           [**] percent ([**]%) on Net Sales by Company and its
Affiliates and sublicensees, of any Licensed Patented Products that are
Improvement Products; and


 


(iii)          [**] percent ([**]%) on Net Sales by Company and its
Affiliates and sublicensees of any Licensed Products that are not Licensed
Patented Products.


 


3.2.1       If Company is a party to a bona fide license
agreement with an un-Affiliated third party for the right or license to a
product or process under which Company is obligated to pay to such third party
a royalty which is based on a royalty rate applied to Licensed Products sold in
particular territories, Company may reduce the royalty rate applicable on sales
of such Licensed Products in such territories payable to FHCRC hereunder by
[**]% for each [**]% of royalty rate Company is actually required to pay to
such third party, on each such Licensed Product in 


 


8

















 


the applicable territory; provided, however, that in no event will the
royalty rate otherwise due to FHCRC be reduced to less than [**]% of the
royalty rate otherwise accountable to FHCRC for such Licensed Product.  If such other license includes a royalty
stacking provision of like intent to this paragraph, the royalty rate reduction
provided for in this paragraph above will be decreased by the amount that the
royalty rate for each such Licensed Product payable to such third party is
decreased pursuant to such third party royalty stacking provision.


 


3.2.2       It is understood and agreed that Company is
principally obligated to pay to FHCRC royalties as required by this Agreement
accruing on the sale of Licensed Products by any Affiliates and sublicensees of
Company.  Company shall impose sufficient
obligations on any Affiliates or sublicenses of Company to insure that FHCRC is
properly paid all amounts due under this Agreement resulting from activities of
such Affiliates or sublicensees.  Company
shall cause any such Affiliates or sublicensees to be obligated to provide
reports of any milestone achievements under Section 3.3 of this Agreement to
FHCRC; to monitor and provide accounting reports of Net Sales under Section 9
of this Agreement to FHCRC; and to permit inspections and audits by FHCRC under
Section 9 of this Agreement.  Further,
Company will require each and every sublicensee to indemnify FHCRC consistent
with the indemnification provide under Article 13.1.


 


Company’s obligation to pay
royalties under this Section 3.2 is imposed only once with respect to the same
unit of a Licensed Product regardless of how many Patent Rights or Valid
Claims, FHCRC Improvements or Technical Data pertain thereto.


 


3.3          In further consideration for the right and license
granted to Company under this Agreement, Company will pay to FHCRC certain
milestone payments as provided for herein below.  Such milestones payments will be due and
payable to FHCRC together in the amount shown (either in cash or, at the
Company’s election, in liquid (i.e., can be liquidated within sixty days)
publicly traded shares of Company stock) within [**] days of Company, its
Affiliates or sublicensees, meeting or achieving each individual
milestone.  Milestone payments will be
paid as follows on the first five separately approvable indications, such
approvability as determined by the FDA or appropriate foreign regulatory body
or governmental agency in such foreign country, of a Licensed Patented Product
to meet any such milestone:


 


(i)            First filing of an Investigational Device Exemption
(“IDE”) or an Investigational New Drug Applications (“INDA”) with the United
States (“US”) Food and Drug Administration (“FDA”) or its foreign equivalent


 


·      $[**] US for [**] separately
approvable indications [**] for Licensed Patented Products; and


 


9














 


(ii)           First filing of a Phase III Trial with the FDA or
its foreign equivalent:


 


·      $[**] US for [**] separately
approvable indications [**]for Licensed Patented Products; and.


 


(iii)          First filing of a New Drug Application (“NDA”) with
the US FDA or its foreign equivalent in a Major Country:


 


·      $[**] US for [**] separately
approvable indications [**] for a Licensed Patented Products.


 


3.3.1       If any milestone listed in Section 3.3 above is not
applicable for the commercialization of any Licensed Product for a particular
indication, then the subsequent milestone payment will be increased by an
amount equal to the non-applicable milestone payment, and the combined
milestone payment shall be due and payable upon completion of such subsequent
milestone.


 


3.3.2       Any and all such milestone payments are not
refundable and are not creditable against any other payments which may be due
or payable to FHCRC.


 


4.             Research
and Development


 


4.1          Company will provide to FHCRC up to an aggregate of
Three Hundred Thousand Dollars ($300,000 US) per year but not less than One
Hundred Fifty Thousand Dollars ($150,000 US) per year of continuous research
funding for a period of two (2) years beginning within ninety (90) days of the
Effective Date, with an option, which, subject to Dr. Mark Roth’s consent, may
be exercised in the Company’s discretion, to extend such research for up to two
(2) consecutive additional one-year periods for a total of three (3) years or
four (4) years of continuous sponsored research.  Such research funding will be in the
laboratory of Dr. Roth, or under Dr. Roth’s’ supervision, at the FHCRC and used
for research projects related to the Subject Technology or otherwise in the
field of metabolic flexibility/suspended animation (the “Funded Research”).  Such research funding will be the subject of
a separate written research agreement between FHCRC and Company and shall
provide Company a worldwide, exclusive option, exercisable during the term of
this Agreement, to acquire a worldwide license to all inventions, discoveries
and intellectual property rights in the field of metabolic
flexibility/suspended animation, excluding FHCRC Improvements, made in the
performance of the Funded Research in part or in whole by Dr. Roth or under Dr.
Roth’s supervision during a particular calendar year of the Funded Research
(the “Funded Inventions”).  Under the
exclusive option described in the immediately preceding sentence, with respect
to each such particular calendar year’s Funded Inventions, Company may, within
[**] days of the later of the end such calendar year or when Company has been
provided reasonably complete documentation describing, in detail, such year’s
Funded Inventions and the executable license terms, (A) opt to pay a one-time
upfront license fee of $[**] in order to obtain a license to all of that
calendar year’s Funded Inventions that is: (i) exclusive under the same terms
as FHCRC Improvements are licensed to Company under this Agreement with respect
to each such Funded Invention invented solely by Dr. Roth or jointly by Dr. Roth
with co-inventors 


 


10

















 


who consent, at their option, to such an exclusive license; and (ii) non-exclusive,
with respect to each such Funded Invention that does not fall within (i) above,
under the same terms as FHCRC Improvements are licensed to Company under this
Agreement except with respect to the royalty rates, which shall be the
Nonexclusive License Royalty Rates (as defined below); or alternatively, (B) opt
to pay a one-time upfront license fee of $ [**] in order to obtain a
non-exclusive license to all of that calendar year’s Funded Inventions, whether
each such Funded Invention is invented solely or jointly by Dr. Roth, under the
same terms as FHCRC Improvements are licensed to Company hereunder except that
the royalty rates for each such Funded Invention shall be the Nonexclusive
License Royalty Rates (as defined below). 
All FHCRC Improvements made during the Funded Research are licensed to Company
pursuant to this Agreement.  The license(s)
acquired by Company under (A) or (B) above to each such Funded Invention shall
remain in effect for the term of this Agreement (as extended by the life of
patents directed to the Funded Inventions in the Patent Rights, if any), unless
earlier canceled or terminated as provided for in this Agreement, and may not
be converted one into the other (e.g. exclusive into non-exclusive), except on
mutual written agreement of the parties; provided, however, if Company opts to
take an license under Section 4.1(A) and the co-inventors of a particular
Funded Invention who initially refused to consent to an exclusive license under
Section 4.1(A)(i) above all subsequently grant consent to such exclusive
license, such Funded Invention will automatically be deemed licensed under Section
4.1(A)(i) and not Section 4.1(A)(ii), effective as of the date all co-inventors
have granted their consents to the exclusive license.  If Company chooses not to license any such
Funded Invention within the period provided for above, then Company thereby
forfeits its option to each such Funded Invention and FHCRC is free to license,
transfer or otherwise commercialize each such Funded Invention without
obligation to Company.


 


4.1.1       For the purposes of Section 4.1 above, “Nonexclusive
License Royalty Rates” means, with respect to a particular Funded Invention,
the lowest of (a) [**] of each applicable royalty rate under this Agreement, (b)
each applicable royalty rate under this Agreement multiplied by [**], and (c) the
most favorable royalty rates provided by FHCRC to a third party licensee for
such Funded Invention.


 


4.2          The research agreement will also grant Company a
worldwide, exclusive option to acquire a worldwide exclusive license to all
inventions, discoveries and intellectual property rights made in the
performance of the Funded Research that are not FHCRC Improvements or Funded
Inventions on mutually agreed terms to be negotiated between Company and FHCRC
in good faith.  If Company and FHCRC are
unable, after [**] days of good faith negotiations, to reach an agreement for
the purchase, license or other exploitation of such inventions, discoveries or
intellectual property rights, FHCRC shall have the right thereafter to cease
such negotiations and pursue any opportunities with third parties on better
aggregate financial terms than proposed by Company, in FHCRC’s sole discretion.


 


4.3          The research agreement discussed above will provide
for FHCRC to promptly disclose inventions, discoveries and intellectual
property made in the performance of the Funded Research (including related
documentation, samples, etc.) to the Company in a reasonable and customary
manner.  FHCRC shall use commercially
reasonable efforts to 


 


11

















 


provide Company written notice of any such inventions, discoveries and
intellectual property.


 


5.             Sublicenses


 


5.1          Subject to the terms and conditions of the this
Agreement, Company will have the exclusive right to grant sublicenses to others
for the Licensed Products, Technical Data and the Patent Rights in the Licensed
Fields to the extent of the license granted to Company hereunder.  Company will be responsible for the
performance of any and all sublicensees. 
Company will provide FHCRC a copy of any and all sublicense agreements
within [**] days of execution.  Company’s
sublicense agreements will be no less favorable to FHCRC than is this license
in terms of limiting FHCRC’s liability, protecting FHCRC’s intellectual
property and proprietary rights, and indemnities in favor of FHCRC.


 


5.2          Upon termination of the license granted to Company
by FHCRC under this Agreement, FHCRC shall assume any sublicenses granted by
Company as of the effective date of such termination, provided (i) such
sublicenses comply with the requirements of this Section 5, (ii) the
sublicensees agree to remove or amend the provisions of such, sublicenses that
place any financial, administrative or legal burden on FHCRC beyond that which
may be required under this Agreement; and (iii) the sublicensees agree in
writing to assume relative to FHCRC all the obligations, including obligations
for payment, contained in the sublicensee agreement with Company.


 


5.3          Any sublicense granted by Company must contain
provisions relative to termination and the conditions of continuance of any
sublicenses in accordance with the provisions of this Agreement.


 


6.             Efforts
and Due Diligence


 


6.1          Company will diligently pursue the development of
the Licensed Products and will use commercially reasonable efforts to bring
Licensed Products to market through a diligent program for exploitation of the
Patent Rights and the marketing and commercialization of the Licensed
Products.  During the first two years (or
three or four years if Company exercises its option to extend the Sponsored
Research for one or two additional years, respectively, pursuant to Section 4)
of this Agreement, Company’s continuous funding of research supporting the
Subject Technology pursuant to Article 4 will partially satisfy the diligence
requirement under this Article 6.1.


 


6.2          Company will prepare and submit to FHCRC within [**]
months of the Effective Date of this Agreement a business and development plan
of Company for bringing the Licensed Products to market.


 


6.3          Company will use commercially reasonable efforts to
meet the following milestones:


 


(A)          Company, its Affiliates or
sublicensees will initiate a first filing of a first INDA or a first approval
or filing of an IDE, or equivalent of either one, in a Major Country as
follows:


 


12

















 


(i)            a first Licensed Product within [**] years of the
Effective Date; and


 


(ii)           a second Licensed Product within [**] years of the
Effective Date.


 


(B)          Company, its Affiliates or
sublicensees will initiate a first human clinical trial for investigating
efficacy (or Phase II Trial) as follows:


 


(i)            of a first Licensed Product in a Major Country
within [**] years of the Effective Date; and


 


(ii)           of a second Licensed Product in a Major Country
within [**] years of the Effective Date


 


(C)          Company, its Affiliates or
sublicensees will initiate a first filing of a Phase III Trial as follows:


 


(i)            a first Licensed Product within [**] years of the
Effective Date; and


 


(ii)           a second Licensed Product within [**] years of the
Effective Date.


 


6.3.1       If Company, its Affiliates or sublicensees fail to
meet any of the technical milestones in 6.3(A), (B) or (C) above by the date
provided for therein, Company may extend such date for completion of such
milestone for a period of [**] upon prior written notice to FHCRC.  If Company, its Affiliates or sublicensees
fail to meet any of the technical milestones by the end of the [**] extension
period provided for in the preceding sentence, but Company can demonstrate it
is using commercially reasonable efforts to pursue and complete such milestone,
FHCRC will extend all of the milestones above for up to [**] additional [**]
periods ending [**] or [**] from the dates specified in 6.3(A), 6.3(B) and 6.3(
C) above respectively upon Company’s election and prior payment by Company to
FHCRC of [**] dollars ($[**] US) for the first such [**] additional extension
of all of the milestones and [**] dollars ($ [**] US) for the second such
additional [**] extension of all of the milestones (the “Extension Payments”).  Company shall be entitled to credit the
entire amount of the Extension Payments, if any, against its milestone payment
obligations under Section 3.3 relating to Company’s first Licensed Patented
Product satisfying such milestones.  Any
further extension can be made only upon the written agreement of the parties.


 


6.4          As a new business entity, Company’s ability to
diligently and effectively commercialize the Licensed Products requires it to
raise sufficient capital to do so. 
Company shall notify FHCRC in writing as it meets each capital milestone
specified herein below.  Should Company
fail to raise the capital according to the schedule herein below and neither
take the actions set forth in the following sentence nor receive a [**] day
extension as provided for in this Section 6.4, FHCRC shall, at its sole option,
have the right to terminate this Agreement upon forty five (45) days written
notice to Company.  If within said forty
five (45) day period, Company should fail to (i) raise the agreed upon capital,
or (ii) acquire a written commitment from a bona fide source for such capital
(provided such capital is actually provided to Company by such source within
[**] days 


 


13

















 


of the date of such written commitment), the termination of this
Agreement will be effective in accordance with said notice.  If Company does, within said forty five (45)
day period, either (i) raise the agreed upon capital, or (ii) acquire a signed
written commitment from a bona fide source of such capital (provided such
capital is actually provided to Company by such source within [**] days of the
date of such written commitment), then FHCRC shall not have the right to
terminate this Agreement for a failure to meet the applicable capital
milestone.  In the event it appears to
Company that it will not be able to achieve one or more of these capital
milestones, it may request a [**] day extension to achieve the applicable
milestone, which extension will not be unreasonably denied by FHCRC, provided
Company can demonstrate, to FHCRC reasonable satisfaction, a reasonable
diligence in pursuing such milestone. 
The capital milestones are as follows:


 


a)            Raise a cumulative [**]
Dollars ($[**] US) (for the avoidance of doubt, including but not limited to
all closings of the Series A preferred stock financing), within [**] of the
Effective Date; and


 


b)            Raise a cumulative [**]
Dollars ($[**] US) (for the avoidance of doubt, including but not limited to
all closings of the Series A preferred stock financing), within [**] after
Effective Date;


 


6.4.1       Notwithstanding anything in this Section 6.4, in the
event Company grants a royalty-bearing sublicense with a minimum upfront
payment or cumulative first year payments of at least [**] dollars ($[**] US) as
permitted under Section 5 to a sublicensee with assets of at least [**] dollars
($[**] US) for the purposes of diligently developing and commercializing a
Licensed Product, Company shall be deemed to have met its obligations under
this Section 6.4.


 


6.5          Company will use commercially reasonable efforts to
have the Licensed Products cleared for marketing in those countries in which
Company intends to sell Licensed Products by the responsible governmental
agencies requiring such clearance.  To
accomplish such clearances at the earliest possible date, Company will file,
according to the usual practice of Company, any necessary data with such
government agencies.  Should Company
terminate this Agreement for any reason other than a material breach by FHCRC,
Company will grant to FHCRC, to the fullest extent possible, a non-exclusive
license under such market clearance application, including a license to all
data relating thereto at no cost to FHCRC.


 


6.6          During the term of the Agreement, FHCRC or Dr. Roth
shall have the right to present to Company a bona fide offer, in writing, from
a third party to fund research, conduct research, or develop products relating
to the Subject Technology.  Upon the
receipt of such offer, Company shall meet with FHCRC or Dr. Roth, as
applicable, and discuss and consider in good faith whether to sublicense such
third party, fund such research, or grant rights under this Agreement back to
FHCRC.  Notwithstanding the foregoing,
Company shall have the sole discretion to pursue or not pursue such
opportunities and Company’s failure to pursue any such opportunities or agree
to grant or cede rights under this 


 


14

















 


Agreement back to FHCRC shall not alter or otherwise prejudice the
scope of Company’s rights hereunder.


 


7.             Confidentiality


 


7.1          FHCRC and Company recognize that each party may need
to provide confidential and proprietary information from time to time to the
other parties pursuant to this Agreement. 
In recognition of FHCRC as a non-commercial, academic institution,
Company agrees to limit to the extent possible the delivery of confidential
information to FHCRC.  FHCRC and Company
agree to hold in confidence, in accordance with this Section 7, any information
disclosed by one party to the other under this Agreement and clearly identified
as “confidential” at the time of disclosure (hereinafter “Information”).  Information will be provided in written or
other tangible form whenever possible marked as “confidential”, but if provided
orally or in an other non-tangible form, the Information must be summarized in
writing labeled as “confidential” and be provided to the receiving party with
[**] days of first disclosure to be considered confidential under this
Agreement.  For the purpose of this
Agreement, “hold in confidence” means that FHCRC and Company will not disclose
the Information of the other party to a third party and will protect the
Information provided to it by the other party in the same manner in which it
protects its own confidential information of similar nature, but in no event
less than reasonable care.  The
Information will remain the property of the party disclosing such Information.


 


7.2          The obligations of the receiving party to maintain
confidentiality under this Agreement will survive its expiration or termination
and will endure for [**] years from the date of first disclosure.


 


7.3          Information does not include:


 


(a)           information that is already
known to the receiving party prior to the Effective Date;


 


(b)           information that is or
becomes publicly known through no fault of receiving party;


 


(c)           information that has been or
is disclosed to the receiving party by a third party who was not or is not
under any obligation of confidence or secrecy to the disclosing party at the
time said third party discloses to the receiving party;


 


(d)           information that is
developed by employees of receiving party who had no knowledge of the
Information, as evidenced by the contemporaneous written records of the
receiving party;


 


(e)           information that is approved
for release by written authorization of the disclosing party; and


 


15

















 


(f)            information that is required
to be disclosed by law, provided the receiving party promptly notifies the
disclosing party in writing prior to such disclosure.


 


7.4          The parties further agree that Company shall have
the right to disclose the provisions of this Agreement to: (a) its Affiliates; (b)
potential sublicensees, assignees or subcontractors for the purpose of allowing
any such potential sublicensee, assignee or subcontractor to evaluate such
technologies and to determine whether to enter into a sublicense, assignment or
subcontracting arrangement; (c) sublicensees, assignees or subcontractors, for
the purpose of allowing such sublicensee, assignee or subcontractor, as the
case may be, to make, have made, use market, sell or distribute Licensed
Products; (d) a purchaser or potential purchaser of all or substantially all of
Company’s assets; and (e) an investor or lender or prospective investor in or
lender to the Company; provided, however, that, prior to any such
disclosure, Company shall obtain a confidentiality agreement (substantially
similar in form and content to the provisions of this Section 7) from the party
to which such disclosures are to be made.


 


8.             Representations
and Disclaimer


 


8.1          FHCRC represents to its actual knowledge that it is
the owner of all right, title and interest in and to the Patent Rights, free of
any liens, licenses, encumbrances, restrictions and other legal or equitable
claims other than the rights of the federal government under federal funding
guidelines.  FHCRC represents that to its
actual knowledge (1) FHCRC is validly existing and is in good standing and has
the authority to enter into this Agreement, to grant the license granted herein
and to perform its other obligations hereunder; (2) the execution, delivery and
performance of this Agreement by FHCRC have been duly authorized and approved
by all necessary corporate action; (3) this Agreement constitutes the valid,
legal and binding obligation of FHCRC, enforceable against it in accordance
with its terms.  Company acknowledges
that FHCRC has relied in part on the representations of Dr. Mark Roth, a
founder of the Company, in making the representations in this Section 8.1.  To the extent FHCRC’s representations above
are reasonably based in whole or in part on information provided by Dr. Roth,
Company acknowledges and agrees that FHCRC shall not be deemed in breach of
such representations if inaccuracies in such information from Dr. Roth would
otherwise have resulted in a breach.  “Knowledge”
as used in this Section 8.1, means the actual knowledge after reasonable
inquiry of officers of FHCRC of the level of vice president or higher including,
without limitation, the Vice President of Technology Transfer and the Vice
President and General Counsel.


 


8.2          Company represents that (1) Company is validly
existing and is in good standing and has the authority to enter into this
Agreement, to obtain the license granted herein and to perform its other
obligations hereunder; (2) the execution, delivery and performance of this
Agreement by Company have been duly authorized and approved by all necessary
corporate action; (3) this Agreement constitutes the valid, legal and binding
obligation of Company, enforceable against it in accordance with its terms; and
(4) Company will maintain and utilize adequate resources and personnel to
perform Company’s obligations under this Agreement in accordance with its
terms.


 


16

















 


8.3          All information, materials and property, whether
tangible or intangible, which may be delivered hereunder to Company, will be
delivered on an “as is, where is” basis without any express or implied
representation or warranty except as expressly set forth in Section 8.1
above.  EACH PARTY HEREBY DISCLAIMS ANY
AND ALL REPRESENTATIONS OR WARRANTIES OTHER THAN THOSE EXPRESSLY SET FORTH IN SECTION
8.1 AND 8.2, “WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
ANY IMPLIED WARRANTIES ARISING FROM ANY COURSE OF DEALING, USAGE, OR TRADE
PRACTICE.  FHCRC MAKES NO REPRESENTATIONS
AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AS TO THE
VALIDITY OF PATENT RIGHTS, INCLUDING CLAIMS ISSUED OR PENDING OR, EXCEPT THE
REPRESENTATION EXPRESSLY SET FORTH IN SECTION 8.1 REGARDING FHCRC’S OWNERSHIP
OF THE PATENT RIGHTS, THAT THE USE OF ANY TECHNOLOGY UNDER THE PATENT RIGHTS OR
TECHNICAL DATA WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT OF A
THIRD PARTY.  FHCRC ASSUMES NO
RESPONSIBILITY WITH RESPECT TO THE EXPLOITATION OR COMMERCIALIZATION OF THE
PATENT RIGHTS, LICENSED PRODUCTS OR TECHNICAL DATA OR THE MANUFACTURE, USE,
SALE, LEASE OR DISTRIBUTION OF ANY METHODS, PROCESSES, APPARATUS, DEVICES,
SYSTEMS, PRODUCTS, ARTICLES, AND/OR APPLIANCES DERIVED FROM OR USING THE
LICENSED PRODUCTS, PATENT RIGHTS OR TECHNICAL DATA BY COMPANY.


 


8.4          NO PARTY WILL BE LIABLE FOR LOSS OF PROFITS, LOSS OF
USE, OR ANY OTHER INCIDENTAL, CONSEQUENTIAL, OR EXEMPLARY DAMAGES UNDER ANY
THEORY OF LIABILITY IN CONNECTION WITH THIS AGREEMENT OR THE SUBJECT MATTER OF
THIS AGREEMENT.


 


9.             Records,
Reports, and Payments


 


9.1          Company will keep and maintain and will require any
and all of its Affiliates and sublicensees to keep and maintain complete,
accurate, and correct records and books relating to the sale or lease of the
Licensed Products for [**] years following the end of the calendar year to
which such records and books pertain.


 


9.2          Company will render to FHCRC calendar quarter
reports for each calendar quarter during the term of this Agreement.  Within [**] days following each such calendar
quarter, Company will provide to FHCRC on behalf of both FHCRC a written report
setting forth the following information with respect to the immediately
preceding calendar quarter or [**] day period as applicable:


 


(a)           accounting for all Licensed
Products sold, distributed, used or leased;


 


(b)           gross sales of Licensed
Products;


 


17














 


(c)           any applicable deductions,
allowances, and charges as provided in Section 1.4 of this Agreement;


 


(d)           total Net Sales;


 


(e)           total of all milestone
payments due and payable to FHCRC; and


 


(f)            total royalties, milestone
payments and other payments under this Agreement then due.


 


9.2.1        Company will remit to FHCRC on behalf of both FHCRC
with each such report the amount of royalty and other payments shown thereby to
be due.  If no sales or leases of the
Licensed Products were made during any calendar quarter, Company will provide
to FHCRC a statement to that effect.


 


9.3           During the term of this Agreement and for [**] years
thereafter, the books and records of account relating to sales of Licensed
Products kept by Company shall be made available upon reasonable notice, during
normal business hours for examination by one or more auditors of FHCRC’
choosing, who will be permitted to enter upon the premises of Company and, at
FHCRC’ expense, make and retain copies of any and all parts of said books and
records of account, including invoices that are relevant to any report required
to be rendered by Company.  Any amount
found to have been owed but not paid will be paid promptly to FHCRC with
interest at the rate of [**] percent ([**]%) per year.  In the event any such audit shows that
Company has underpaid its royalty obligation hereunder by $[**] or more during
any calendar quarter, Company will reimburse FHCRC for the out-of-pocket
expense for such audit.  FHCRC shall
conduct no more than [**] per calendar year.


 


9.4           Royalty or other payments will be paid in United
States dollars to FHCRC in Seattle Washington, or at such other place as FHCRC
may reasonably designate consistent with the laws and regulations controlling
in any foreign country.  Any withholding
taxes which Company is required by law to withhold on remittance of the royally
payments will be deducted from the royalty paid.  Company will furnish FHCRC through FHCRC with
original copies of all official receipts for such taxes.  If any royalties hereunder are based on Net
Sales converted from foreign currency, such conversion will be made by using
the average exchange rate at a first-class foreign exchange bank for the
calendar quarter period to which such royalty payments relate.


 


10.                               Patent
Prosecution


 


10.1         The filing and prosecution of the U.S. and foreign
patent applications and maintenance of all U.S. and foreign patents within the
Patent Rights will be the primary responsibility of FHCRC; provided, however,
that Company will have reasonable opportunities to advise FHCRC in such filing,
prosecution and/or maintenance and shall have the right, at its expense, to
require that foreign filings be made in specific jurisdictions in the Licensed
Fields.  FHCRC shall provide, or require
their patent counsel to provide, to Company copies of all substantive and
material papers and other materials relating to all patent applications and
registrations soon after receipt by FHCRC but in no event, if reasonably 


 


18

















 


possible, later than in time to allow Company a reasonable amount of
time to review relevant materials and comment on substantive patent prosecution
and strategy decisions in advance of any applicable deadlines.  FHCRC shall give due consideration to comments
of Company related to patent prosecution; provided, however, that with respect
to any reasonable comments and requests from Company regarding substantive
patent prosecution which are intended to maintain or expand the scope of
pending patent claims, strengthen the validity of pending patent claims, or
keep a pending patent application from being abandoned, FHCRC shall accept such
reasonable comments and comply with such reasonable requests so long as Company
is bearing the cost of such prosecution under this Section 10.


 


10.2         As of the Effective Date, FHCRC has received
invoices for and/or incurred expenses totaling at least Eighty Thousand Dollars
($80,000 US) in unreimbursed fees and other costs for the preparation, filing,
prosecution, and maintenance of the Patent Rights and an additional Fifty
Thousand Dollars ($50,000 US) in business development expenses in support of
Company formation and development. 
Rather than receive direct cash reimbursement of such $130,000 US in
costs in an effort to assist Company in its formation, FHCRC will accept and,
upon presentation of itemized statements to the Company substantiating such
costs, Company will issue to FHCRC 142,500 shares of the Company’s Series A
preferred stock as full reimbursement for such costs as provided in the Series A
Preferred Stock Purchase Agreement, dated as of the date hereof, by and among
the Company, FHCRC, and certain investors in the Company.


 


10.3         Upon presentation of itemized statements to Company,
Company will reimburse FHCRC for all reasonable fees and costs (in excess of
the fees and costs described in Section 10.2 above) relating to the
preparation, filing, prosecution, and maintenance of the U.S., PCT, and/or
foreign patent applications set forth in Section 1.9, including any oppositions,
interference, or cancellation proceedings and any U.S. and foreign patents
issuing thereon as well as any additional U.S. and foreign patent applications
and patents within the Patent Rights that are incurred following the Effective
Date which are requested or authorized by Company.  FHCRC will use their reasonable efforts to
notify Company prior to incurring any substantive expenses and allow Company an
opportunity to comment.  Upon Company’s
reasonable request, FHCRC shall provide itemized statements of patent
prosecution fees and costs in advance of FHCRC paying such fees and costs, if
possible, and require applicable patent counsel to provide estimates to Company
of prosecution fees and costs to be incurred relating to the Patent Rights, or any
portion thereof specifically identified by Company in its request.


 


10.4         In the event Company determines that filing,
prosecution or maintenance of any of the U.S. or foreign patent applications or
patents within the Patent Rights in the Licensed Fields is not justified, it
will advise FHCRC in writing and FHCRC will then have the option to file,
prosecute or maintain any such Patent Rights at its own expense, and further,
FHCRC will then have the option in such event to delete such U.S. or foreign patent
applications or patents within said Patent Rights from the license to Company
for the territory covered thereby such that Company will have no rights under
this license for any such deleted U.S. or foreign patent applications or
patents.  FHCRC will obtain all rights in
and to such deleted U.S. or foreign patent applications or patents.  FHCRC will 


 


19

















 


be free to exploit and to assign or license any such deleted U.S. or
foreign patent applications or patents to third parties without effect on the
amount of royalties or other payments due to FHCRC under the entirety of Article
3.  Notwithstanding the foregoing, prior
to filing a foreign patent application or a foreign counterpart, if possible,
which would have fallen within the Patent Rights but for the deletion of
patents or patent applications from the Patent Rights under this Section 10.4,
FHCRC will provide Company with written notice and a copy of such patent
application.  If Company, by written
notice to FHCRC within [**] days of such notification from FHCRC, elects to pay
the prosecution costs of such foreign patent application or foreign
counterpart, such foreign patent application or foreign counterpart, as
applicable, will be added back into, and licensed to Company hereunder under
the license terms pertaining to, the Patent Rights.


 


10.5         In the event that any claim of any application
within the Patent Rights is canceled, abandoned, or otherwise disallowed by a
final non-appealable or non-appealed action of a Patent Office having
jurisdiction, or in the event that any claim of any patent within the Patent
Rights is held invalid or unenforceable by a non-appealable or non-appealed
decision by any court of competent jurisdiction, such claim will be deemed to
have expired, as of the date of final disallowance or final decision of
invalidity or non-enforceability.


 


11.                               Termination


 


11.1         Unless sooner canceled or terminated as herein
provided, the license for Patent Rights will continue for the full term of the
last expiring patent or patent application within the Patent Rights.


 


11.2         If Company becomes bankrupt or insolvent, or files a
petition in bankruptcy, or if the business of Company is placed in the hands of
a receiver, assignee or trustee for the benefit of creditors, whether by the
voluntary act of Company or otherwise, and such proceeding continues unstayed
for sixty (60) days, this Agreement will automatically terminate without any
notice whatsoever to Company.


 


11.3         If Company at any time commits a Major Breach, FHCRC
will have the right, in addition to all other remedies available, to terminate
the license under this Agreement and revoke any and all licenses herein
granted, by giving Company thirty (30) days prior written notice of such
termination, provided, however, that if Company will have cured such default or
breach within such thirty (30) day period, then this Agreement will remain in
effect and the rights and licenses herein granted will be in force as if no
default or breach had occurred on the part of Company; and provided, further,
that if at the expiration of such 30-day period, Company can demonstrate by
written proof that it is working diligently and in good faith to cure such
default or breach, Company will be provided an additional period, not to exceed
thirty (30) days, to cure such breach. 
In the event of termination under this Section, Company will continue to
be obligated to pay to FHCRC any and all license fees, royalties, milestone
payments, or other payments payable at the time of termination pursuant to this
Section 11.


 


20

















 


11.4         Other than for Major Breaches which will be governed
by Section 11.3, and breaches of Section 11.9, which will be governed by that
Section, FHCRC shall not be entitled to terminate this Agreement for any breach
of any covenant or undertaking under this Agreement except as pursuant to this Section
11.4.  For any breach other than a Major
Breach or breaches of confidentiality that do not otherwise result in a Major
Breach, FHCRC must first obtain an determination in Arbitration that Company
materially breached the subject covenant or Undertaking.  Upon that determination, FHCRC will have the
right, in addition to all other remedies available, to terminate this Agreement
by giving Company sixty (30) days prior written notice of such termination,
provided, however, that if Company will have cured such default or breach
within such sixty (30) day period, then this Agreement will remain in effect
and the rights and licenses herein granted will be in force as if no default or
breach had occurred on the part of Company; and provided, further, that if at
the expiration of such 30-day period, Company can demonstrate by written proof
that it is working diligently and in good faith to cure such default or breach,
Company will be provided an additional period, not to exceed thirty (30) days,
to cure such breach.  For avoidance of
doubt, if any Arbitration results in a determination that Company did not
materially breach the subject covenant or undertaking, FHCRC shall not have the
right to terminate this Agreement pursuant to this Section 11.4 based on such
alleged breach; provided, however, that neither party will be collaterally
estopped based on any findings made in the Arbitration with respect to FHCRC
seeking or obtaining remedies other than termination of this Agreement,
including but not limited to damages, injunctive relief or any other legal or
equitable remedies, based on breach of contract or other legal theories, or
Company defending against such FHCRC claims or remedies.  Nothing in this Section 11.4 shall limit
FHCRC’s right to seek any remedy other than termination of this Agreement,
including without limitation, its right to seek damages, injunctive or other equitable
remedies.


 


11.5         Company shall have the right, in addition to all
other remedies available, to terminate this Agreement upon a material breach by
FHCRC of any material covenant or undertaking set forth herein that remains
uncured thirty (30) days following written notice thereof provided, however,
that if FHCRC will have cured such default or breach within such thirty (30)
day period, then this Agreement will remain in effect as if no default or
breach had occurred on the part of FHCRC; and provided, further, that if at the
expiration of such 30-day period, FHCRC can demonstrate by written proof that
it is working diligently and in good faith to cure such default or breach,
FHCRC will be provided an additional period, not to exceed thirty (30) days, to
cure such breach.


 


11.6         Company will have the right to terminate the license
under this Agreement with or without cause at any time on ninety (90) days
written notice to FHCRC delivered to FHCRC.


 


11.7         Upon termination of this Agreement for any reason,
nothing herein will be construed to release either party from any obligation
accrued prior to the effective date of such termination.  Subject to the applicable terms of this
Agreement, including the payment of applicable royalties to FHCRC hereunder,
Company and its Affiliates shall, for [**] days after the termination of this
Agreement, have the right to use, sell or otherwise dispose of Licensed
Products in its inventory as of the effective date of termination of this 


 


21

















 


Agreement (the “Sell Off Rights”). 
Any Licensed Products remaining in inventory of Company following such
[**] day period will he transferred and given to FHCRC without charge or cost
to FHCRC or will be destroyed by Company and Company will certify such
destruction by written notice to FHCRC. 
Any termination of this Agreement will not relieve Company of any
obligations to make any and all payments for any license fees, royalties or
other payments that may have accrued prior to the date of such termination or
any obligation concerning indemnity of FHCRC or requirement of liability
insurance in this Agreement


 


11.8         Upon termination of this Agreement for any reason,
any and all rights granted herein will immediately revert to FHCRC, except with
respect to the Sell Off Rights.


 


11.9         Notwithstanding any other provision of this
Agreement, if, at any time during this Agreement, Company directly or
indirectly opposes or assists any third party to oppose the grant of any
Letters Patent on any patent application within the Patent Rights or disputes
or directly or indirectly assists any third party to dispute the validity of
any patent within the Patent Rights, or any of the claims thereof, FHCRC may,
at their sole discretion, exercised within [**] days after FHCRC have notice of
such occurrence, terminate all or any portion of the license granted hereunder
upon thirty (30) days’ prior written notice thereof to Company.


 


12.                               Infringement


 


12.1         Each party will be obligated to promptly inform the
others in writing of any alleged infringement by a third party of any of the
patents within the Patent Rights in the Licensed Fields, and provide such other
parties with any available evidence of infringement (subject to any applicable
privileges or confidentiality obligations). 
No party will settle or compromise any claim or action in a manner that
imposes any restrictions or obligations on the other party or parties without
such other party’s or parties’ written consent, which consent will not be
unreasonably withheld.


 


12.2         During the term of this Agreement, Company will have
the first right in the Licensed Fields, but not the obligation, to either (i) prosecute
at its own expense any such in infringements of the Patent Rights and, in
furtherance of such prosecution, Company may request FHCRC join as a party
plaintiff in any such suit, without expense to FHCRC, and FHCRC’s consent to
such request will not be unreasonably withheld or (ii) subject to the
provisions of Section 12.1, settle the infringement suit by sublicensing the
alleged infringer or by other means.


 


12.3         In the event that Company undertakes the enforcement
and/or defense of the Patent Rights in the Licensed Fields by litigation,
including in any declaratory judgment action, the total cost of any such action
commenced or defended solely by Company shall be borne by Company.  Any recovery of damages by Company as a
result of such action shall be applied first in pro-rata satisfaction of any
unreimbursed expenses and attorneys’ fees of Company and of FHCRC, if any,
relating to the action.  The balance
remaining from any such recovery shall be distributed [**] percent ([**]%) to
Company and [**] percent ([**]%) to FHCRC. 
Company shall be entitled to settle any such litigation by 


 


22

















 


agreement, consent, judgment, voluntary dismissal, or otherwise, with
the consent of FHCRC, which consent shall not be withheld unless such
settlement imposes a material burden or responsibility on, or constitutes an
admission against interest by, FHCRC.


 


12.4         If, within [**] months after having been notified of
any alleged infringement, Company is unsuccessful in persuading the alleged
infringer to desist, and has not brought or is not diligently prosecuting an
infringement action, or if Company notifies FHCRC at any time prior thereto of
its intention not to bring suit against any alleged infringer, then, and in
those events only, FHCRC will have the right to prosecute at its own expense
any infringement of the Patent Rights, and FHCRC may, for such purposes, use
the name of Company as party plaintiff. 
Under this Section 12.3, settlement, consent judgment or other voluntary
final disposition of the suit may be entered into by FHCRC, with the consent of
Company, which consent shall not be withheld unless such settlement imposes a
material burden or responsibility on, or constitutes an admission against
interest by, Company.  The total cost of
any such infringement action commenced or defended solely by FHCRC will be
borne by FHCRC, and any recovery of damages by FHCRC as a result of such action
shall be applied first in pro-rata satisfaction of any unreimbursed expenses
and attorneys’ fees of FHCRC and of Company, if any, relating to the
action.  The balance remaining from any
such recovery shall be distributed [**] percent ([**]%) to FHCRC and [**]
percent ([**]%) to Company.


 


12.5         In the event an infringement action is brought
against Company arising from the use of the Licensed Products, Company will
defend such action and will be solely responsible for all attorneys’ fees,
costs of defense, and liability arising out of that action.


 


12.6         In the event that a declaratory judgment action
alleging invalidity or non-infringement of any of the Patent Rights is brought
against Company, FHCRC, at their option, will have the right to intervene and
take over the sole defense of the action. 
Such action shall be at FHCRC’s sole expense unless Company provides
written notice to FHCRC that it elects to share in half of the costs of such action.  Unless and until FHCRC elects to intervene
and take over the sole defense of the action, Company will be responsible, at
its sole expense, for the defense of the action.  FHCRC and Company will share in any recovery
or damages derived therefrom or from any counterclaims asserted therein in
proportion to the total costs contributed by each party.


 


12.7         In any infringement suit brought or declaratory
judgment action defended by any party to protect any of the Patent Rights
pursuant to this Agreement, the other party will, at the request and expense of
the party initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like.


 


13.                               Indemnification
and Insurance


 


13.1         Company, its Affiliates and any of their
sublicensees will, at all times during the term of this Agreement and
thereafter, indemnify, hold harmless, and defend the FHCRC, its trustees,
officers, directors, employees, agents, and affiliates (the “FHCRC Indemnified
Parties”) from and against any and all claims brought by a third party against
an FHCRC 


 


23

















 


Indemnified Party and any losses, damages, and/or liability of
whatsoever kind or nature, as well as all costs and expenses, including legal
expenses and reasonable attorneys’ fees incurred by the FHCRC Indemnified
Party, which arise or may arise at any time out of or in connection with any
activity of Company involving the Licensed Products, Technical Data or the
Patent Rights, including without limitation the manufacture, use, sale, lease,
commercialization, licensing or distribution of any system, method, process,
apparatus, device, product, article or appliance derived from or using the
Licensed Products, Technical Data or the Patent Rights, or out of or in
connection with this Agreement, excluding any legally established damage,
liability or loss to the extent arising from a claim by a third party or person
that is or was affiliated (e.g., employees, former employees, contractors,
former contractors, affiliates, etc.) with FHCRC regarding FHCRC’s ownership of
the Patent Rights.


 


13.2         Company and any of its sublicensees will carry
liability insurance at their own expense, adequate to assure its obligations to
FHCRC under Section 13.1 of this Agreement. 
Company will provide satisfactory evidence of adequate insurance
coverage to FHCRC upon the request of FHCRC.


 


14.                               Assignment


 


14.1         Company and FHCRC may each assign or otherwise
transfer this Agreement and the license granted hereby and the rights acquired
by it to and only to the assignee or transferee of Company’s entire business or
of that part of Company’s business to which the license granted hereby relates;
provided, however, that such assignee or transferee agrees in writing to be
bound by the terms and conditions of this Agreement.  If either party sells or otherwise transfers
its entire business or that part of its business to which the license granted
hereby relates and the assignee or transferee does not agree in writing to be
bound by the terms and conditions of this Agreement within thirty (30) days of
any such request by the other party, the other party will have the right to
terminate this Agreement by providing written notice of termination to such
transferee or assignee.


 


14.1.1      Notwithstanding Section 14.1 above, FHCRC’s prior
written consent will be required for any assignment by Company to the assignee
or transferee of Company’s entire business or of that part of Company’s
business to which the license granted hereby relates pursuant to a transaction
in which FHCRC will receive for its common shares in Company less than their
purchase price allocated to them as of the Effective Date.


 


15.                               Non-Use
of Names


 


Company will not use the
names of FHCRC or of FHCRC Inventors, nor any adaptation thereof in any
advertising, promotional or sales activities without prior written consent
obtained from FHCRC in each separate case, except that Company may state that
it is licensed under one or more of the patents or applications within the
Patent Rights.


 


24

















 


16.                               Export
Controls


 


It is understood mat FHCRC
are subject to United States laws and regulations controlling the export of
technical data, computer software, laboratory prototypes, and other commodities
that may require a license from the applicable agency of the United States
Government or may require written assurances by Company that Company will not
export data or commodities to certain foreign countries without prior approval
of such agency.  FHCRC neither represents
that a license will not be required nor that, if required, it will be issued.


 


17.                               Survival


 


Articles 1, 5.2, 7, 8, 9,
11, 12 (with respect to any actions pending as of the effective date of
termination or expiration), 13, 14, 17, 18 and 19 of this Agreement shall
survive termination or expiration of this Agreement.


 


18.                               Payments,
Notices and Other Communications


 


Any payment, notice, or
other communication pursuant to this Agreement will be sufficiently made or
given on the date of mailing if sent to such party by certified first class
mail or overnight express mail by recognized national carrier, postage prepaid,
addressed to it at its address below or as it will designate by written notice
given to the other party:


 


FHCRC:                  Vice President, Industry
Relations and Technology Transfer


 


Fred Hutchinson Cancer Research Center


 


1100 Fairview Avenue N., J6-200


 


Seattle, Washington 98109


 


Company:


 


 


 


19.                               Miscellaneous
Provisions


 


19.1         This Agreement will be construed, governed,
interpreted, and applied in accordance with the laws of the State of
Washington, U.S.A. without regard to conflicts-of-law rules and without giving
effect to the United Nations Convention on contracts for the International Sale
of Goods.  Notwithstanding the foregoing,
any questions affecting the construction and effect of any patent will be
determined by the law of the country in which the patent was granted.


 


25

















 


19.2         The parties hereto acknowledge that this Agreement
(including the Exhibits hereto) sets forth the entire agreement and
understanding of the parties hereto as to the subject matter hereof, and
supersedes and cancels any and all prior agreements between the parties
relating to the subject matter.  This
Agreement will not be subject to any change or modification except by the
execution of a written instrument subscribed to by the parties hereto.


 


19.3         The provisions of this Agreement are severable, and
in the event that any provision of this Agreement will be determined to be
invalid or unenforceable under any controlling body of law, such invalidity or
unenforceability will not in any way affect the validity or enforceability of
the remaining provisions hereof.


 


19.4         Company must mark the Licensed Products made, used
or sold in the United States with all applicable United States patent numbers
as required by any applicable United States patent laws.  All Licensed Products used, shipped to or
sold in other countries will be marked in such a manner as to conform with the
patent laws and practice of the country of use, shipment or sale.


 


19.5         The failure of either party to assert a right
hereunder or to insist upon compliance with any term or condition of this
Agreement will not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other party.


 


19.6         Except as otherwise specifically provided in Section
14 of this Agreement, neither this Agreement nor any of the licenses or rights
herein granted will be assignable or otherwise transferable by Company without
the prior written permission of FHCRC, provided that Company shall have the
right to sublicense its rights pursuant to Section 2 of this Agreement.


 


19.7         This Agreement will be binding and inure to the
benefit of the parties hereto and their respective affiliates, and permitted
successors and assigns.


 


19.8         The representations, warranties, covenants, and undertakings
contained in this Agreement are for the sole benefit of the parties hereto and
their permitted successors and assigns and such representations, warranties,
covenants, and undertakings will not be construed as conferring any rights on
any other party.


 


19.9         Nothing contained in this Agreement will be deemed
to place the parties hereto in a partnership, joint venture or agency
relationship and neither party will have the right or authority to obligate or
bind the other party in any manner.


 


19.10       This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which taken
together will constitute one and the same instrument.


 


19.11       In the event of any dispute between the parties that
arises from this Agreement, the prevailing party in any legal action that is
brought to resolve such dispute will be entitled to recover its attorneys’ fees
and costs from the other party.


 


26

















 


[Intentionally Left Blank]


 


27














 


IN WITNESS WHEREOF, the
parties hereto have hereunto set their hands and seals and duly executed this
License Agreement as of the day and year first set forth above.


 


 


	
  Fred
  Hutchinson Cancer Research Center

  	
  Ikaria,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/
  Spencer Lemons

  	
   

  	
  BY:

  	
  /s/
  Kevin Tomaselli

  
	
  NAME:

  	
  Spencer
  Lemons

  	
   

  	
  NAME:

  	
  Kevin
  Tomaselli

  
	
  TITLE:

  	
  Vice
  President, Industry Relations and

  Technology Transfer

  	
   

  	
  TITLE:

  	
  Chief
  Technology Officer

  
	
   

  	
   

  
	
  Date: April 21, 2005

  	
  Date: April 21, 2005

  



 


28

















 


List of Exhibits


 


Exhibit A                Patents and Patent
Applications


 


Exhibit B                Capitalization of Company


 

















 


EXHIBIT A


[**]


 


A total of two pages were
omitted pursuant to a request for confidential treatment.


 

















 


EXHIBIT
B


 


IKARIA,
INC. 


Post
Initial Closing Capitalization Table


 


	
   

  	
   

  	
  No. Shares

  	
   

  	
  % of

  Class

  	
   

  	
  % of

  Outstanding

  Shares

  	
   

  	
  % fully

  diluted cap

  	
   

  
	
  Common:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mark Roth

  	
   

  	
  2,187,790

  	
   

  	
  73.04

  	
  %

  	
  39.73

  	
  %

  	
  23.97

  	
  %

  
	
  FHCRC

  	
   

  	
  807,500

  	
   

  	
  26.96

  	
  %

  	
  14.66

  	
  %

  	
  8.85

  	
  %

  
	
  Total Common:

  	
   

  	
  2,995,290

  	
   

  	
  100

  	
  %

  	
  54.40

  	
  %

  	
  32.82

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Series A Preferred:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FHCRC

  	
   

  	
  142,500

  	
   

  	
  5.67

  	
  %

  	
  2.59

  	
  %

  	
  1.56

  	
  %

  
	
  Kailian (Board)

  	
   

  	
  20,000

  	
   

  	
  0.80

  	
  %

  	
  0.36

  	
  %

  	
  0.22

  	
  %

  
	
  Gantz (Board)

  	
   

  	
  5,000

  	
   

  	
  0.20

  	
  %

  	
  0.09

  	
  %

  	
  0.05

  	
  %

  
	
  Shapiro (Board)

  	
   

  	
  5,000

  	
   

  	
  0.20

  	
  %

  	
  0.09

  	
  %

  	
  0.05

  	
  %

  
	
  Shaw (Board)

  	
   

  	
  20,000

  	
   

  	
  0.80

  	
  %

  	
  0.36

  	
  %

  	
  0.22

  	
  %

  
	
  ARCH

  	
   

  	
  932,500

  	
   

  	
  37.13

  	
  %

  	
  16.93

  	
  %

  	
  10.22

  	
  %

  
	
  Venrock

  	
   

  	
  801,250

  	
   

  	
  31.91

  	
  %

  	
  14.55

  	
  %

  	
  8.78

  	
  %

  
	
  Sam

  	
   

  	
  400,000

  	
   

  	
  15.93

  	
  %

  	
  7.26

  	
  %

  	
  4.38

  	
  %

  
	
  Aravis

  	
   

  	
  100,000

  	
   

  	
  3.98

  	
  %

  	
  1.82

  	
  %

  	
  1.10

  	
  %

  
	
  Jim Roberts

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Steve McKnight

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Dan Gottschling

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  David Maki

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Steve Giliis

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Nancy Weintraub

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Ming Chao Yao

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Washington Research
  Foundation

  	
   

  	
  10,000

  	
   

  	
  0.40

  	
  %

  	
  0.18

  	
  %

  	
  0.11

  	
  %

  
	
  Other Investors

  	
   

  	
  5,000

  	
   

  	
  0.20

  	
  %

  	
  0.09

  	
  %

  	
  0.05

  	
  %

  
	
  Total Preferred:

  	
   

  	
  2,511,250

  	
   

  	
  100

  	
  %

  	
  45.60

  	
  %

  	
  27.51

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Shares Outstanding:

  	
   

  	
  5,506,540

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Option Pool:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Outstanding Options:

  	
   

  	
  1,443,190

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  15.81

  	
  %

  
	
  Available For Grant:

  	
   

  	
  2,177,913

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  23.86

  	
  %

  
	
  Total Pool:

  	
   

  	
  3,621,103

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  39.67

  	
  %

  
	
  Total Shares Fully Diluted:

  	
   

  	
  9,127,643

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100.00

  	
  %

  



 

















 


AMENDMENT
No. 1 TO LICENSE AGREEMENT


 


This is Amendment No. 1 (“Amendment
No. 1”) to that certain License Agreement effective April 21, 2005 (“License
Agreement”), between the Fred Hutchinson Cancer
Research Center, a research institution organized as a nonprofit
corporation under the laws of the state of Washington, having its principal
offices at 1100 Fairview Avenue North, Seattle, Washington 98108 (“FHCRC”) and Ikaria Inc., a Delaware corporation, with principal offices
at 1616 Eastlake Avenue East, Seattle, WA 98102(“Company”).  This Amendment No. 1 is entered into on July 21,
2005 (“Amendment Effective Date”) and shall be deemed effective as of the
Effective Date (as defined in the License Agreement).


 


WHEREAS, FHCRC and Company
wish to amend the License Agreement with respect to future developments of the
Subject Technology and the funding of research by Company in the laboratory of Dr.
Mark Roth (“Roth”) at FHCRC.


 


NOW,
THEREFORE, the parties do hereby agree as follows:


 


A.            Terms of Amendment.  The License Agreement is amended as follows:


 


1.)            By adding the following Section
1.19 in its entirety.


 


“1.19       “Metabolic Flexibility’’
means reversibly altering the metabolic rate of a cell, tissue, or
organism.  Metabolic Flexibility
includes, but is not limited to, creating a state of suspended animation or
metabolic stasis or reducing the metabolic rate of a cell, tissue or organism
to protect or preserve it from damage or injury.  For the purposes of this Agreement, Metabolic
Flexibility includes, but is not limited to, its use in the fields of tissue
transplantation, wound healing, cardiovascular injury, neurological disease,
degenerative disorders, cancer, and food preservation.”


 


2.)            By deleting Article 4 in its
entirely and substituting the following:


 


“4.          Research
and Development


 


4.1           FHCRC hereby grants to
Company and Company hereby accepts from FHCRC a worldwide, exclusive option (“Option”),
exercisable in accordance with Section 4.4, to acquire a worldwide license on
the terms stated in Section 4.4 of this Agreement to any and all inventions,
discoveries and intellectual property rights (excluding FHCRC Improvements)
which are (i) made by any one or more of Roth or those employees or contractors
of FHCRC under his direct supervision, in their respective capacities as
employees or contractors of FHCRC and (ii) related to the Subject Technology or
otherwise in the field of Metabolic Flexibility (“Inventions”).  The Option begins on the Effective Date and
ends two years thereafter, unless sooner canceled or terminated as provided for
in Section 4.2 below (“Option Period”), subject to the exercise period set
forth in Section 4.4.


 

















 


4.2           In consideration for the
Option, Company will pay to FHCRC [**] Dollars ($[**]) (“Option Fee”) in two (2)
equal installments.  The first
installment of the Option Fee of [**] Dollars ($[**]) is due and payable [**]
days after the Effective Date.  The
second installment of [**] Dollars ($[**]) is due and payable to FHCRC [**]
days after the first anniversary of the Effective Date.  In the event that Company at any time fails
to pay the Option Fee or any installment thereof to FHCRC when due, FHCRC may
terminate the Option upon thirty (30) days written notice to Company, unless
Company pays such Option Fee or installment thereof, within such thirty (30)
day period, provided that any such termination shall not affect the option
period for which the applicable option fee has been paid.


 


4.3           Company may fund research at
FHCRC in the laboratory of Dr. Mark Roth, for a period of one (1) year
beginning on the second anniversary of the Effective Date, with an option
which, subject to Dr. Mark Roth’s consent and FHCRC approval, may be exercised
in the Company’s discretion, to extend such research for an additional one-year
period for a total of two (2) years of continuous sponsored research on or
after the second anniversary of Effective Date. 
Such research funding will be in the laboratory of Dr. Roth, or under Dr.
Roth’s supervision, at the FHCRC for research projects related to the Subject
Technology or otherwise in the field of Metabolic Flexibility (the “Funded
Research”).  Such research funding, if
any, will be the subject of a separate written research agreement between FHCRC
and Company to be negotiated in good faith and shall include inter alia a mutually agreeable plan of research and budget
therefor and include a worldwide, exclusive option, granted to Company,
exercisable as provided in Section 4.4 below, to acquire a worldwide license to
all inventions, discoveries and intellectual property rights in Metabolic
Flexibility, excluding FHCRC Improvements, made in the performance of the Funded
Research in part or in whole by Dr. Roth or under Dr. Roth’s supervision during
a particular one-year period of the Funded Research (the “Funded Inventions”).  Notwithstanding the foregoing, any agreement
relating to the performance of Funded Research will be subject to review and
approval by FHCRC in accordance with its usual and customary policies and
procedures.


 


4.4           Under the exclusive options
described in Sections 4.1 and 4.3 above, with respect to each such particular
one-year period’s Inventions or Funded Inventions, as applicable, which are not
FHCRC Improvements, Company may, within [**] days of the later of the end of
each such one-year period or when Company has been provided reasonably complete
documentation describing, in detail, such year’s Inventions or Funded
Inventions, as applicable, (A) opt to pay a one-time upfront license fee of
$[**] in order to obtain a license to all of that year’s Inventions or Funded
Inventions that is:  (i) exclusive under
the same terms as FHCRC Improvements are licensed to Company under this
Agreement with respect to each such Invention or Funded Invention invented
solely by Dr. Roth or jointly by 


 

















 


Dr.
Roth with co-inventors who unanimously consent, at their option, to such an
exclusive license; and (ii) non-exclusive, with respect to each such Funded
Invention or Invention that does not fall within (i) above, under the same
terms as FHCRC Improvements are licensed to Company under this Agreement except
with respect to the royalty rates, which shall be the Nonexclusive License
Royalty Rates (as defined below); or alternatively, (B) opt to pay a one-time
upfront license fee of $[**] in order to obtain a non-exclusive license to all
of that year’s Funded Inventions or Inventions, whether each such Funded Invention
or Invention is invented solely or jointly by Dr. Roth, under the same terms as
FHCRC Improvements are licensed to Company hereunder except that the royalty
rates for each such Funded Invention or Invention shall be the Nonexclusive
License Royalty Rates (as defined below). 
All FHCRC Improvements made during the Option Period or in the
performance of the Funded Research are licensed to Company pursuant to Section 2
of this Agreement.  The license(s) acquired
by Company under (A) or (B) above to each such Invention or Funded Invention
shall remain in effect for the term of this Agreement (as extended by the life
of patents directed to the Inventions or Funded Inventions in the Patent
Rights, if any), unless earlier canceled or terminated as provided for in this
Agreement, and may not be converted one into the other (e.g. exclusive into
non-exclusive), except on mutual written agreement of the parties; provided,
however, if Company opts to take a license under Section 4.4(A) and the
co-inventors of a particular Invention or Funded Invention who initially
refused to consent to an exclusive license under Section 4.4(A)(i) above all
subsequently grant consent to such exclusive license, such Invention or Funded
Invention will automatically be deemed licensed under Section 4.4(A)(i) and not
Section 4.4(A)(ii), effective as of the date all co-inventors have granted
their consents to the exclusive license. 
If Company chooses not to license any Invention or Funded Invention
within the [**]day period provided for above, then Company thereby forfeits its
option and right to each such Invention or Funded Invention and FHCRC is free
to license, transfer or otherwise commercialize each such Invention or Funded
Invention without obligation to Company.


 


4.4.1        For the purposes of Section 4.4
above, “Nonexclusive License Royalty Rates” means, with respect to a particular
Invention or Funded Invention, the lowest of (a) [**] of each applicable
royalty rate under this Agreement, (b) each applicable royalty rate under this
Agreement multiplied by [**], and (c) the most favorable royalty rates provided
by FHCRC to a third party licensee for such Invention or Funded Invention.


 


4.5           The research agreement
referred to in Section 4.3 above will also grant Company a worldwide, exclusive
option to acquire a worldwide exclusive license to all inventions, discoveries
and intellectual property rights made in the performance of the Funded Research
that are not FHCRC 


 

















 


Improvements
or Inventions or Funded Inventions on mutually agreed terms to be negotiated
between Company and FHCRC in good faith. 
If Company and FHCRC are unable, after [**] days of good faith
negotiations, to reach an agreement for the purchase, license or other
exploitation of such inventions, discoveries or intellectual property rights,
FHCRC shall have the right thereafter to cease such negotiations and pursue any
opportunities with third parties on better aggregate financial terms than
proposed by Company, in FHCRC s sole discretion.


 


4.6           Consistent with the intent
of the parties, during the Option Period and within the research agreement
discussed in Article 4.3 above, FHCRC shall promptly disclose inventions,
discoveries and intellectual property made during the Option Period and in the
performance of the Funded Research (including related documentation, samples,
etc.) to the Company in a reasonable and customary manner.  FHCRC shall use commercially reasonable
efforts to provide Company written notice of any such inventions, discoveries
and intellectual property.”


 


3.)            The second sentence in Section
11.4 is hereby amended and restated as follows:


 


For any breach other than a
Major Breach or breaches of confidentiality that do not otherwise result in a
Major Breach, FHCRC must first obtain an determination in Arbitration that
Company materially breached the subject covenant or undertaking.  Upon that determination, FHCRC will have the
right, in addition to all other remedies available, to terminate this Agreement
by giving Company thirty (30) days prior written notice of such termination,
provided, however, that if Company will have cured such default or breach
within such thirty (30) day period, then this Agreement will remain in effect
and the rights and licenses herein granted will be in force as if no default or
breach had occurred on the part of Company; and provided, further, that if at
the expiration of such 30-day period, Company can demonstrate by written proof
that it is working diligently and in good faith to cure such default or breach,
Company will be provided an additional period, not to exceed thirty (30) days,
to cure such breach.


 


4.)            Exhibit A of the License
Agreement is hereby amended and restated with the updated patent chart attached
hereto as Schedule 1.


 


B.            Construction.  Except as expressly modified by this
Amendment, the remaining terms of the License Agreement shall remain in full
force and effect.  Capitalized terms used
in this Amendment but not defined herein shall have the meanings ascribed to
them in the License Agreement.


 


IN WITNESS WHEREOF, the
parties hereto have hereunto set their hands and seals and duly executed this
Amendment No. 1 as of the day and year first set forth above.


 














 


	
  Fred
  Hutchinson Cancer Research Center

  	
   

  	
  Ikaria,
  Inc.

  
	
   

  	
   

  	
   

  
	
  BY:
  

  	
  /s/
  Spencer Lemons

  	
   

  	
  BY:
  

  	
  /s/
  Kevin Tomaselli

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NAME:
  

  	
  Spencer
  Lemons

  	
   

  	
  NAME:
  

  	
  Kevin
  Tomaselli

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:
  

  	
  Vice President, Industry Relations

  And Technology Transfer

  	
   

  	
  TITLE:

  	
  CTO

  
	
   

  
	
  DATE:
  July 21, 2005

  	
   

  	
  DATE:
  July 28, 2005

  



 

















 


Schedule
1


 


[See attached updated patent chart]


 

















 


VENROCK-IKARIA


 


[**]


 


A total of two pages were omitted pursuant to a
request for confidential treatment.


 

















 


August 31, 2005


 


Fred Hutchinson Cancer
Research Center


Attn: Spencer Lemons


1100 Fairview Avenue North,
J6-200


Seattle, Washington 98109


 


Ikaria,
Inc. — Development Plan Deadline Extension


 


Dear Spencer,


 


As we’ve discussed, Section 6.2
of the License Agreement (the “License Agreement”) with an effective date of April
21, 2005 between Ikaria, Inc. (“Ikaria”) and Fred Hutchinson Cancer Research
Center (“FHCRC”) requires Ikaria to prepare and submit to FHCRC a business and
development plan prior to October 21, 2005. 
For the reasons we’ve discussed, Ikaria believes it would be mutually
beneficial to amend Section 6.2 of the License Agreement to extend the
submission deadline from October 21, 2005 to December 21, 2005.  Therefore, we hereby amend Section 6.2 of the
License Agreement by deleting “October 21, 2005” and replacing it with “December
21, 2005”.  Accordingly, we are
requesting that you consent to the foregoing amendment by signing this letter
where indicated below and returning a copy to Ikaria’s legal counsel via
facsimile (fax number (206) 447-0849, Attn: Sonya Erickson and Brian Finrow)
and mail at your earliest possible convenience.


 


This letter shall be
governed by and construed in accordance with the laws of Washington without
giving effect to principles of conflicts of laws.  This letter may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Except for the amendment expressly stated
above, all other terms and conditions of the Agreement remain in full force and
effect.


 


We appreciate your
assistance in this matter.  Please feel
free to contact me at (206) 957-7300 should you have any questions or concerns.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/
  Kevin Tomaselli

  
	
   

  	
   

  
	
   

  	
  Kevin
  Tomaselli

  
	
   

  	
  Chief
  Technology Officer

  
	
   

  	
  Ikaria, Inc.

  



 


ACCEPTED AND AGREED:


 


FRED HUTCHINSON CANCER
RESEARCH CENTER


 


	
  By:

  	
  /s/
  Spencer Lemons

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Spencer Lemons

  	
   

  



 

















 


	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
  Industry
  Relations & Technology Transfer

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  Sept.
  1, 2005

  	
   

  



 

















 


IKARIA CONFIDENTIAL


 


IKARIA, INC.


 


AMENDMENT NO. 2 TO LICENSE
AGREEMENT


 


This Amendment No. 2 to
License Agreement (the “Amendment”),
is made as of February 29, 2008 by Ikaria, Inc., a Delaware corporation (“Company”), and the Fred Hutchinson
Cancer Research Center, a Washington nonprofit corporation (“Center”).


 


RECITALS


 


A.            WHEREAS, Company and
Center are parties to that certain License Agreement with an effective date of April
21, 2005, which has been amended by Amendment No. 1 entered into July 21, 2005;
collectively, the original License Agreement as amended by Amendment No. 1 are
referred to herein as the “License Agreement”;
and


 


B.            WHEREAS, Company and
Center are parties to that certain Research Agreement dated as of April 21,
2007 by and between Company and Center (the “Research
Agreement”); and


 


C.            WHEREAS, concurrently
with the execution of this Amendment, Company and Center have executed that
certain Amendment No. 1 to Research Agreement, which provides for the Amendment
of the Research Agreement on the terms set forth therein; and


 


D.            WHEREAS, Company and
Center wish to amend the License Agreement in the manner set forth below in
this Amendment and effect certain other changes with respect to the
intellectual property contemplated by the License Agreement;


 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the mutual agreements and covenants set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Company and Center hereby agree as follows:


 


1.             Milestone Payment.  Company shall pay Center a one time fee in
the amount of $[**] within 20 business days following mutual execution of this
Amendment.


 


2.             Grant of
Exclusive License.  The
inventions described in or contemplated by the following United States
provisional patent application (and any conversions, continuations,
continuations-in-part, divisional applications, substitute applications,
reissue applications or requests for examination and foreign applications
relating thereto) shall be subject to the terms of the License Agreement on the
terms applicable to “Funded Inventions” and be included in Ikaria’s worldwide,
exclusive license set forth in Section 2.1 of the License Agreement: [**].


 


3.             Representations
and Warranties of Center. 
Center represents that to its actual knowledge it is the owner of all
right, title and interest in and to the Patent Rights (as defined in the
License Agreement) relating to the license granted in Section 2 of this
Amendment, free of any liens, licenses, encumbrances, restrictions and other
legal or equitable claims other than the rights of the federal government under
federal funding guidelines and applicable laws and 


 


1

















 


regulations.  Center represents that to its actual
knowledge (1) Center is validly existing and is in good standing and has the
authority to enter into this Agreement, to grant the license granted herein and
to perform its other obligations hereunder and under the License Agreement; (2)
the execution, delivery and performance of this Amendment by Center have been
duly authorized and approved by all necessary corporate action; (3) this
Agreement constitutes the valid, legal and binding obligation of Center,
enforceable against it in accordance with its terms.  Company acknowledges that Center has relied
in part on the representations of Dr. Mark Roth, a founder of Company, in
making the representations in this Section 4. 
To the extent Center’s representations above are reasonably based in
whole or in part on information provided by Dr. Roth, Company acknowledges and
agrees that Center shall not be deemed in breach of such representations if the
breach resulted from inaccuracies in the information from Dr. Roth that would
otherwise have resulted in a breach.  “Knowledge” as used in this Section 4,
means the actual knowledge after reasonable inquiry of officers of Center of
the level of vice president or higher including, without limitation, the Vice
President of Technology Transfer and the Vice President and General Counsel.


 


4.             Amendment of
License Agreement.  Section 1.2
of the License Agreement is amended and restated to read in its entirety as
follows (with new language appearing in underlined italics):


 


“1.2 “FHCRC Improvements”
means FHCRC’s intellectual property and proprietary rights in: (i) Assignor
Inventions: and (ii) inventions or discoveries, whether patentable or
unpatentable, that (a) are owned by FHCRC or its affiliates; (b) are invented
in whole or in part by Dr. Mark Roth or other FHCRC (or its affiliates’)
employees or contractors under Dr. Roth’s direct supervision during the Term of
this Agreement; (c) are within the Licensed Fields regardless
of whether they were funded in whole or in part by Company and/or any other
governmental, non-profit, commercial or other entities (but subject to any
third-party rights arising out of such funding arrangements), and
(d) are directed to the specific subject matter disclosed in the patents and
patent applications listed in Exhibit A. 
Without limiting the generality of the foregoing,
the term “FHCRC Improvements” includes any such inventions or discoveries,
whether patentable or unpatentable, that either (i) relate to a chalcogenide or
polychalcogenide formulation such as the one described in the [**]
Provisional (as such term is defined below) or (ii) all future improvements and
extensions made in the area of chalcogenides, polychalcogenides and other small
molecules or compounds described in the patents and patent applications
referenced in Exhibit A, and precursors thereof, including without limitation
additional chalcogenide, polychalcogenide molecules and other such extensions,
formulations and methods of use.  For the
purposes of this Agreement, the term “[**] Provisional” means the
following United states provisional patent application: [**].”


 


5.             Effect of this
Amendment.  Except as
specifically amended as set forth herein, each term and condition of the
License Agreement shall continue in full force and effect.


 


6.             Counterparts;
Facsimile Signatures.  This Amendment
may be executed in any number of counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one and the same
instrument.  This Amendment may be
executed and


 


2

















 


delivered
by facsimile and, upon such delivery, the facsimile will be deemed to have the
same effect as if the original signature had been delivered to the other party.


 


7.             Governing Law.  This Amendment shall be governed by and
construed under the laws of the State of Washington as applied to agreements
among Washington residents entered into and to be performed entirely within
Washington.


 


[Signature Pages Follow]


 


3

















 


IN WITNESS WHEREOF, the
parties have executed or otherwise consented to this Amendment as of the dale
first above written.


 


	
   

  	
  IKARIA,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Matthew M. Bennett

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Matthew
  M. Bennett

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Sr.
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FRED
  HUTCHINSON CANCER RESEARCH CENTER

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Elrich Mueller

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Elrich
  Mueller

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
  Industry
  Relations & Technology Transfer

  



 


[SIGNATURE
PAGE TO AMENDMENT NO. 2 TO LICENSE AGREEMENT]