Document:

Exhibit 10.11

 

INDEMNITY AGREEMENT

 

THIS INDEMNITY AGREEMENT (this “Agreement”) dated as of                          , is made by and between NEWLINK GENETICS CORPORATION, a Delaware  corporation (the “Company”), and                            (“Indemnitee”).

 

RECITALS

 

A.                                    The Company desires to attract and retain the services of highly qualified individuals as directors, officers, employees and agents.

 

B.                                    The Company’s bylaws (the “Bylaws”) require that the Company indemnify its directors, and empowers the Company to indemnify its  officers, employees and agents, as authorized by the Delaware General Corporation Law, as amended (the “Code”), under which the Company is organized and such Bylaws expressly provide that the indemnification provided therein is not exclusive and contemplates that the Company may enter into separate agreements with its directors, officers and other persons to set forth specific indemnification provisions.

 

C.                                    Indemnitee does not regard the protection currently provided by applicable law, the Company’s governing documents and available insurance as adequate under the present circumstances, and the Company has determined that Indemnitee and other directors, officers, employees and agents of the Company may not be willing to serve or continue to serve in such capacities without additional protection.

 

D.                                    The Company desires and has requested Indemnitee to serve or continue to serve as a director, officer, employee or agent of the Company, as the case may be, and has proffered this Agreement to Indemnitee as an additional inducement to serve in such capacity.

 

E.                                      Indemnitee is willing to serve, or to continue to serve, as a director, officer, employee or agent of the Company, as the case may be, if Indemnitee is furnished the indemnity provided for herein by the Company.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.                                      Definitions.

 

(a)                                  Agent.  For purposes of this Agreement, the term “agent” of the Company means any person who:  (i) is or was a director, officer, employee or other fiduciary of the Company or a subsidiary of the Company; or (ii) is or was serving at the request or for the convenience of, or representing the interests of, the Company or a subsidiary of the Company, as a director, officer, employee or other fiduciary of a foreign or domestic corporation, partnership,  joint venture, trust or other enterprise.

 

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(b)                                  Expenses.  For purposes of this Agreement, the term “expenses” shall be broadly construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’, witness, or other professional fees and related disbursements, and other out-of-pocket costs of whatever nature), actually and reasonably incurred by Indemnitee in connection with the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement, the Code or otherwise, and amounts paid in settlement by or on behalf of Indemnitee, but shall not include any judgments, fines or penalties actually levied against Indemnitee for such individual’s violations of law. The term “expenses” shall also include reasonable compensation for time spent by Indemnitee for which he is not compensated by the Company or any subsidiary or third party (i) for any period during which Indemnitee is not an agent, in the employment of, or providing services for compensation to, the Company or any subsidiary; and (ii) if the rate of compensation and estimated time involved is approved by the directors of the Company who are not parties to any action with respect to which expenses are incurred, for Indemnitee while an agent of, employed by, or providing services for compensation to, the Company or any subsidiary.

 

(c)                                  Proceedings.  For purposes of this Agreement, the term “proceeding” shall be broadly construed and shall include, without limitation, any threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and whether formal or informal in any case, in which Indemnitee was, is or will be involved as a party or otherwise by reason of:  (i) the fact that Indemnitee is or was a director or officer of the Company; (ii) the fact that any action taken by Indemnitee or of any action on Indemnitee’s part while acting as director, officer, employee or agent of the Company; or (iii) the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and in any such case described above, whether or not serving in any such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses may be provided under this Agreement.

 

(d)                                  Subsidiary.  For purposes of this Agreement, the term “subsidiary” means any corporation or limited liability company of which more than 50% of the outstanding voting securities or equity interests are owned, directly or indirectly, by the Company and one or more of its subsidiaries, and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.

 

(e)                                  Independent Counsel.  For purposes of this Agreement, the term “independent counsel” means a law firm, or a partner (or, if applicable, member) of such a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “independent counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

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2.                                      Agreement to Serve.  Indemnitee will serve, or continue to serve, as a director, officer, employee or agent of the Company or any subsidiary, as the case may be, faithfully and to the best of his or her ability, at the will of such corporation (or under separate agreement, if such agreement exists), in the capacity Indemnitee currently serves as an agent of such corporation, so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of the bylaws or other applicable charter documents of such corporation, or until such time as Indemnitee tenders his or her resignation in writing; provided, however, that nothing contained in this Agreement is intended as an employment agreement between Indemnitee and the Company or any of its subsidiaries or to create any right to continued employment of Indemnitee with the Company or any of its subsidiaries in any capacity.

 

The Company acknowledges that it has entered into this Agreement and assumes the obligations imposed on it hereby, in addition to and separate from its obligations to Indemnitee under the Bylaws, to induce Indemnitee to serve, or continue to serve, as a director,  officer, employee or agent of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee or agent of the Company.

 

3.                                      Indemnification.

 

(a)                                  Indemnification in Third Party Proceedings.  Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits Indemnitee to broader indemnification rights than the Code permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any proceeding, for any and all expenses, actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement or appeal of such proceeding.

 

(b)                                  Indemnification in Derivative Actions and Direct Actions by the Company.  Subject to Section 10 below, the Company shall indemnify Indemnitee to the fullest extent permitted by the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits Indemnitee to broader indemnification rights than the Code permitted prior to adoption of such amendment), if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any proceeding by or in the right of the Company to procure a judgment in its favor, against any and all expenses actually and reasonably incurred by Indemnitee in connection with the investigation, defense, settlement, or appeal of such proceedings.

 

4.                                      Indemnification of Expenses of Successful Party.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any proceeding or in defense of any claim, issue or matter therein, including the dismissal of any action without prejudice, the Company shall indemnify Indemnitee against all expenses actually and reasonably incurred in connection with the investigation, defense or appeal of such proceeding.

 

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5.                                      Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any expenses actually and reasonably incurred by Indemnitee in the investigation, defense, settlement or appeal of a proceeding, but is precluded by applicable law or the specific terms of this Agreement to indemnification for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

6.                                      Advancement of Expenses.  To the extent not prohibited by law, the Company shall advance the expenses incurred by Indemnitee in connection with any proceeding, and such advancement shall be made within twenty (20) days after the receipt by the Company of a statement or statements requesting such advances (which shall include invoices received by Indemnitee in connection with such expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice) and upon request of the Company, an undertaking to repay the advancement of expenses if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company.  Advances shall be unsecured, interest free and without regard to Indemnitee’s ability to repay the expenses. Advances shall include any and all expenses actually and reasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’s right to indemnification under this Agreement, or otherwise and this right of advancement, including expenses incurred preparing and forwarding statements to the Company to support the advances claimed.  Indemnitee acknowledges that the execution and delivery of this Agreement shall constitute an undertaking providing that Indemnitee shall, to the fullest extent required by law, repay the advance if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company.  The right to advances under this Section shall continue until final disposition of any proceeding, including any appeal therein.  This Section 6 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 10(b).

 

7.                                      Notice and Other Indemnification Procedures.

 

(a)                                  Notification of Proceeding.  Indemnitee will notify the Company in writing promptly upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any proceeding or matter which may be subject to indemnification or advancement of expenses covered hereunder.  The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

 

(b)                                  Request for Indemnification and Indemnification Payments.  Indemnitee shall notify the Company promptly in writing upon receiving notice of any demand, judgment or other requirement for payment that Indemnitee reasonably believes to be subject to indemnification under the terms of this Agreement, and shall request payment thereof by the Company.  Indemnification payments requested by Indemnitee under Section 3 hereof shall be made by the Company no later than sixty (60) days after receipt of the written request of Indemnitee.  Claims for advancement of expenses shall be made under the provisions of Section 6 herein.

 

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(c)                                  Application for Enforcement.  In the event the Company fails to make timely payments as set forth in Sections 6 or 7(b) above, Indemnitee shall have the right to apply to any court of competent jurisdiction for the purpose of enforcing Indemnitee’s right to indemnification or advancement of expenses pursuant to this Agreement.  In such an enforcement hearing or proceeding, the burden of proof shall be on the Company to prove that indemnification or advancement of expenses to Indemnitee is not required under this Agreement or permitted by applicable law.  Any determination by the Company (including its Board of Directors, stockholders or independent counsel) that Indemnitee is not entitled to indemnification hereunder, shall not be a defense by the Company to the action nor create any presumption that Indemnitee is not entitled to indemnification or advancement of expenses hereunder.

 

(d)                                  Indemnification of Certain Expenses.  The Company shall indemnify Indemnitee against all expenses incurred in connection with any hearing or proceeding under this Section 7 unless the Company prevails in such hearing or proceeding on the merits in all material respects.

 

8.                                      Assumption of Defense.  In the event the Company shall be requested by Indemnitee to pay the expenses of any proceeding, the Company, if appropriate, shall be entitled to assume the defense of such proceeding, or to participate to the extent permissible in such proceeding, with counsel reasonably acceptable to Indemnitee.  Upon assumption of the defense by the Company and the retention of such counsel by the Company, the Company shall not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same proceeding, provided that Indemnitee shall have the right to employ separate counsel in such proceeding at Indemnitee’s sole cost and expense.  Notwithstanding the foregoing, if Indemnitee’s counsel delivers a written notice to the Company stating that such counsel has reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense or the Company shall not, in fact, have employed counsel or otherwise actively pursued the defense of such proceeding within a reasonable time, then in any such event the fees and expenses of Indemnitee’s counsel to defend such proceeding shall be subject to the indemnification and advancement of expenses provisions of this Agreement.

 

9.                                      Insurance. To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any subsidiary (“D&O Insurance”), Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has D&O Insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

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10.                               Exceptions.

 

(a)                                  Certain Matters.  Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of any proceeding with respect to (i) remuneration paid to Indemnitee if it is determined by final judgment or other final adjudication that such remuneration was in violation of law (and, in this respect, both the Company and Indemnitee have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication, as indicated in Section 10(d) below); (ii) a final judgment rendered against Indemnitee for an accounting, disgorgement or repayment of profits made from the purchase or sale by Indemnitee of securities of the Company against Indemnitee or in connection with a settlement by or on behalf of Indemnitee to the extent it is acknowledged by Indemnitee and the Company that such amount paid in settlement resulted from Indemnitee’s conduct from which Indemnitee received monetary personal profit, pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or other provisions of any federal, state or local statute or rules and regulations thereunder; (iii) a final judgment or other final adjudication that Indemnitee’s conduct was in bad faith, knowingly fraudulent or deliberately dishonest or constituted willful misconduct (but only to the extent of such specific determination); or (iv) on account of conduct that is established by a final judgment as constituting a breach of Indemnitee’s duty of loyalty to the Company or resulting in any personal profit or advantage to which Indemnitee is not legally entitled.  For purposes of the foregoing sentence, a final judgment or other adjudication may be reached in either the underlying proceeding or action in connection with which indemnification is sought or a separate proceeding or action to establish rights and liabilities under this Agreement.

 

(b)                                  Claims Initiated by Indemnitee.  Any provision herein to the contrary notwithstanding, the Company shall not be obligated to indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought by Indemnitee against the Company or its directors, officers, employees or other agents and not by way of defense, except (i) with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or under any other agreement, provision in the Bylaws or Certificate of Incorporation or applicable law, or (ii) with respect to any other proceeding initiated by Indemnitee that is either approved by the Board of Directors or Indemnitee’s participation is required by applicable law.  However, indemnification or advancement of expenses may be provided by the Company in specific cases if the Board of Directors determines it to be appropriate.

 

(c)                                  Unauthorized Settlements.  Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee under this Agreement for any amounts paid in settlement of a proceeding effected without the Company’s written consent.  Neither the Company nor Indemnitee shall unreasonably withhold consent to any proposed settlement; provided, however, that the Company may in any event decline to consent to (or to otherwise admit or agree to any liability for indemnification hereunder in respect of) any proposed settlement if the Company is also a party in such proceeding and determines in good faith that such settlement is not in the best interests of the Company and its stockholders.

 

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(d)                                  Securities Act Liabilities.  Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee or otherwise act in violation of any undertaking appearing in and required by the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Act”), or in any registration statement filed with the SEC under the Act.  Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K currently generally requires the Company to undertake in connection with any registration statement filed under the Act to submit the issue of the enforceability of Indemnitee’s rights under this Agreement in connection with any liability under the Act on public policy grounds to a court of appropriate jurisdiction and to be governed by any final adjudication of such issue.  Indemnitee specifically agrees that any such undertaking shall supersede the provisions of this Agreement and to be bound by any such undertaking.

 

11.                               Nonexclusivity and Survival of Rights.  The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may at any time be entitled under any provision of applicable law, the Company’s Certificate of Incorporation, Bylaws or other agreements, both as to action in Indemnitee’s official capacity and Indemnitee’s action as an agent of the Company, in any court in which a proceeding is brought, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the heirs, executors, administrators and assigns of Indemnitee.  The obligations and duties of the Company to Indemnitee under this Agreement shall be binding on the Company and its successors and assigns until terminated in accordance with its terms.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

 

No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her corporate status prior to such amendment, alteration or repeal.  To the extent that a change in the Code, whether by statute or judicial decision, permits greater indemnification or advancement of expenses than would be afforded currently under the Company’s Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, by Indemnitee shall not prevent the concurrent assertion or employment of any other right or remedy by Indemnitee.

 

12.                               Term.  This Agreement shall continue until and terminate upon the later of: (a) five (5) years after the date that Indemnitee shall have ceased to serve as a director or and/or officer, employee or agent of the Company; or (b) one (1) year after the final termination of any proceeding, including any appeal then pending, in respect to which Indemnitee was granted rights of indemnification or advancement of expenses hereunder.

 

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No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against an Indemnitee or an Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of five (5) years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such five-year period; provided, however, that if any shorter period of limitations is otherwise applicable to such cause of action, such shorter period shall govern.

 

13.                               Subrogation.  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who, at the request and expense of the Company, shall execute all papers required and shall do everything that may be reasonably necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

 

14.                               Interpretation of Agreement.  It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

 

15.                               Severability.  If any provision of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (a) the validity, legality and enforceability of the remaining provisions of the Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable and to give effect to Section 14 hereof.

 

16.                               Amendment and Waiver.  No supplement, modification, amendment, or cancellation of this Agreement shall be binding unless executed in writing by the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

17.                               Notice.  Except as otherwise provided herein, any notice or demand which, by the provisions hereof, is required or which may be given to or served upon the parties hereto shall be in writing and, if by telegram, telecopy or telex, shall be deemed to have been validly served, given or delivered when sent, if by overnight delivery, courier or personal delivery, shall be deemed to have been validly served, given or delivered upon actual delivery and, if mailed, shall be deemed to have been validly served, given or delivered three (3) business days after deposit in the United States mail, as registered or certified mail, with proper postage prepaid and addressed to the party or parties to be notified at the addresses set forth on the signature page of this Agreement (or such other address(es) as a party may designate for itself by like notice).  If to the Company, notices and demands shall be delivered to the attention of the Secretary of the Company.

 

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18.                               Governing Law.  This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.

 

19.                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement.  Only one such counterpart need be produced to evidence the existence of this Agreement.

 

20.                               Headings.  The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

 

21.                               Entire Agreement.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, written and oral, between the parties with respect to the subject matter of this Agreement; provided, however, that this Agreement is a supplement to and in furtherance of the Company’s Certificate of Incorporation, Bylaws, the Code and any other applicable law, and shall not be deemed a substitute therefor, and does not diminish or abrogate any rights of Indemnitee thereunder.

 

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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement effective as of the date first above written.

 

	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NEWLINK GENETICS   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Charles   Link, Jr.
    
	
 
    	
 
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature   of Indemnitee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Print   or Type Name of IndemniteeExhibit 10.30

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

LICENSE AGREEMENT BETTWEEN LANKENAU INSTITUTE FOR MEDICAL
 RESEARCH
 AND NEWLINK GENETICS CORPORATION

 

This License Agreement between Lankenau Institute for Medical Research (“LIMR” or “Institute”) and NewLink Genetics Corporation.  (“NewLink” or “Company”) (referred to as “Agreement”) for the licensing of certain intellectual property rights to NewLink is made on this 7th day of July, 2005 (“Effective Date”).

 

WHEREAS, LIMR owns certain property rights developed by its employee-investigator, George Prendergast, PhD, and

 

WHEREAS, NewLink would like to license from LIMR certain technology developed by Dr. Prendergast for the purpose of developing the technology into a marketable therapeutic or diagnostic product.

 

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

 

1.             Definitions.

 

a.                                       Affiliate(s): Affiliate means any individual, company or entity, in whatever country organized, directly or indirectly, controlling, controlled by, or under common control with NewLink.  For purposes of this Agreement, “control” shall mean, direct or indirect beneficial ownership of more than fifty percent (50%) of the voting stock or equity of, or more than fifty percent (50%) interest in the income of, such individual, company or entity.

 

b.                                      Company: Company shall mean NewLink and its Affiliates as defined above.

 

c.                                       Consideration.  “Consideration” shall mean any and all revenues or payments in-kind received by NewLink from a third party as consideration for the grant of a sublicense under the rights granted to NewLink by LIMR pursuant to Article 2, excluding sums received: (i) for the purchase of an equity interest in NewLink at fair market

 

 

value; (ii) as payments or reimbursements for research and development work performed by or on behalf of NewLink; (iii) for purchase of a supply of Licensed Product; (iv) for repayment of any loans, credit or credit line extended by NewLink to such sublicensee; or (v) in the form of a loan, as credit or pursuant to a credit line to NewLink.  Notwithstanding the foregoing, if NewLink receives revenue in consideration for the grant of a sublicense under the licenses granted to NewLink hereunder and such sublicense also includes the grant of a license or sublicense to other technology controlled by NewLink but not acquired from LIMR, then the foregoing amount shall be adjusted by a percentage that fairly represents, as reasonably determined by the parties, the contribution of the LIMR Technology and the Patent Rights to the total revenue received by NewLink.

 

d.             Licensed Product: Licensed Product shall mean any article, composition, apparatus, substance, chemical material, method, process or service whose manufacture, use, or sale is covered by a Valid Claim within the Patent Rights.  Licensed Product shall not include other products used in combination with Licensed Product that do not constitute an article, composition, apparatus, substance, chemical material, method, process or service whose manufacture, use, or sale is covered by a Valid Claim within the Patent Rights.

 

e.             LIMR Technology.  “LIMR Technology” shall mean the technology described in [*].

 

f.              Net Sales.  “Net Sales” shall mean the gross consideration actually collected by COMPANY and/or any Affiliate from transfer of any Licensed Product to a third party customer, less:

 

1.                                       revenue credited or rebated on returns and allowances, and bad debts;

 

2.             discounts, in amounts customary in the trade and to the extent actually granted, for quantity purchases, for prompt payments and for wholesalers and distributors;

 

3.                                       transportation and delivery charges or allowances;

 

4.                                       customs, duties; and

 

5.                                       sales, use, excise, value-added and other taxes or other governmental charges measured by sales.

 

g.                                      Patent Rights: Patent Rights shall mean any and all rights and interest held, acquired or otherwise controlled by LIMR in and to any issued patents and patent applications, including provisional patent applications, any divisions, continuations and continuations

 

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-in-part thereof, and any foreign counterparts worldwide of such patents or patent applications, that directly arise from the prosecution of [*].

 

h.                                      Valid Claim: A Valid Claim means a claim of a patent under Patent Rights that (i) has not expired or been abandoned; (ii) has not been disclaimed; (iii) has not been canceled or superseded, or if cancelled or superseded, has not been reasserted; (iv) has not been revoked, held invalid or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in such country from which no further appeal has or may be taken ; and (v) a claim of a pending patent application under the Patent Rights, which claim has been subject to prosecution for protection for no more than five years.

 

2.             Exclusive License.

 

a.                                       LIMR hereby grants to Company an exclusive, world-wide, royalty-bearing license (“License”) under the LIMR Technology and the Patent Rights for LIMR Technology described in [*] and the Patent Rights to make, have made, use and/or sell Licensed Product in the field of  human and animal therapeutics and diagnostics ( the “Field”).  Notwithstanding the foregoing, LIMR expressly reserves a non-transferable royalty-free right to use the Patent Rights and LIMR Technology in the Field itself, including use by its staff and researchers, for non-commercial educational and research purposes only.  LIMR agrees to notify NewLink and provide NewLink a “first look” at any additional research findings that directly result from the use of the technology described in [*].

 

b.                                      RAND Compounds.  Pursuant to and subject to the terms of the RAND Agreement between LIMR and the National Cancer Institute (“NCI”) of the National Institutes of Health (NCI Contract No. High-Throughput Screening for Inhibitors of Indoleamine 2,3-dioxygenase (IDO)), the IDO inhibitory compounds that are identified by an ongoing screen of the compound collection at the NCI will be shared with NewLink.

 

3.             Sublicenses.  Company and its Affiliate(s) shall have the right to grant sublicenses to third parties under LIMR Technology and Patent Rights to make, have made, use and sell the Licensed Products.  Such sublicenses shall be in writing and expressly subject to the terms of this Agreement.  Any sublicense agreement that does not materially conform to this Agreement shall constitute a material breach of this Agreement by Company.  Company agrees to be

 

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responsible for the performance hereunder by its sub licensees.  At LIMR’s request, Company will provide LIMR with a copy of each sublicense in order to allow LIMR to audit such sublicenses to assure conformity with the Agreement.  If LIMR performs such a review on any sublicense agreements, those audited agreements, not including any subsequent amendments or changes to the agreements, shall be deemed to conform to this Agreement.  Upon termination of this Agreement, any such sublicenses will revert directly to LIMR, which shall have the right to cancel any such sublicense if such sublicensee is not then in compliance with the terms of its sublicense and the terms of this Agreement.

 

4.             Term and Termination.  The Term of this Agreement shall terminate upon expiration of the last to expire Valid Claim included in the Patent Rights.  In addition, the Agreement may terminate earlier than the end of the Term under the following circumstances:

 

A.                                   If NewLink is unable to achieve any of the milestones within the time periods set forth in Article 10, then LIMR shall, in accordance with the terms of this paragraph 4, have the right and option to reduce the NewLink’s exclusive license to a nonexclusive license or revoke the license in its entirety, provided that prior to making this determination, LIMR shall

 

1.                                       Give NewLink written notice of perceived failure to meet a milestone, describing the failure, describing the preferred method of cure and the proposed action to be taken by LIMR in the event of non-cure in writing at the address listed within this Agreement.

 

2.                                       Provide NewLink a 90-day cure period during which NewLink shall be allowed to establish that it has met or will meet the milestones.

 

B.            LIMR may terminate this Agreement immediately by providing NewLink written notice of termination, if

 

1.                                       NewLink ceases to function as a going concern;

 

2.                                       a petition or action is filed or taken by or against NewLink under any insolvency or bankruptcy law that is not dismissed within sixty (60) days;

 

3.                                       a receiver, assignee or other liquidating officer is appointed for all or substantially all of the assets of NewLink; or

 

4.                                       NewLink makes an assignment for the benefit of creditors.

 

C.                                     If NewLink fails to make any payment whatsoever due and payable to LIMR hereunder, LIMR shall have the right to terminate this Agreement effective on thirty (30) days written notice, unless, NewLink shall make all such payments to LIMR within said thirty (30) day period provided that the payments demanded by LIMR are not disputed by NewLink.  In that event, the parties shall have 90 days to solve the dispute at the end of which they shall submit to binding arbitration.

 

D.                                    NewLink shall have the right to terminate this Agreement at any time on 90 days’ notice to LIMR, and upon payment of all amounts due LIMR

 

4

 

through the effective date of the termination.  In the event NewLink terminates the Agreement, all rights and obligations hereunder revert to LIMR.

 

E.                                      Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination.  NewLink and any sub licensee thereof may, however, after the effective date of such termination, sell all LICENSED PRODUCTS, and complete LICENSED PRODUCTS in the process of manufacture at the time of such termination and sell the same, provided that NewLink shall make the payments to LIMR as required by Articles 8 & 9 of this Agreement and shall submit the reports as required by Article 12 hereof.

 

5.             Ownership.  LIMR represents that it owns the rights to the LIMR Technology and the Patent Rights and has the right to convey the LIMR Technology and the Patent Rights to Company.

 

6.             Patent Prosecution:  NewLink shall be responsible, at its sole cost and expense, for the preparation, filing, prosecution and maintenance of any patent applications filed by and patents issued to LIMR as assignee under the Patent Rights pursuant to this Agreement.  Upon execution of this Agreement, LIMR will make no further patent prosecution decisions and shall not incur additional expenses with respect to the Patent Rights without prior written consent of NewLink, which shall not be unreasonably withheld.  With respect to costs incurred prior to execution of this Agreement, NewLink shall reimburse LIMR provided LIMR has provided NewLink with appropriate documentation outlining the costs incurred.

 

7.             License Fee.

 

a.                                       Initial Fee.  Upon the Effective Date, NewLink shall pay LIMR a License Initiation Fee of [*].

 

b.                                      Annual Fee.  NewLink shall pay LIMR an annual license fee of [*] due on each anniversary of the Effective Date.

 

8.             Royalty:  Company shall pay LIMR an earned royalty of [*] based on the value of Net Sales of the Licensed Products, unless additional royalties must be paid for another technology to allow use of Licensed Products in humans.  In the event additional technologies must be licensed (e.g.  formulation, cross linking) by NewLink from any third party, NewLink shall be entitled to offset against royalties otherwise due to LIMR [*]; provided, however, in no event shall NewLink pay LIMR a [*] royalty of less than [*].  NewLink agrees to pay LIMR and [*], the potential licensor of related technologies, a total [*] royalty of [*].  If the aggregate of the [*] royalties paid to LIMR and [*] is less than [*], NewLink shall pay LIMR the additional percentage amount necessary to equal an aggregate [*] royalty of [*].  In the event NewLink sublicenses the Licensed Product,

 

5

 

NewLink shall pay LIMR an earned royalty of [*] of any Consideration received by NewLink for the sublicense during the Term.

 

9.             Payment:  Royalties shall be payable by NewLink quarterly in U.S. dollars within thirty (30) days of the end of the calendar quarter.  NewLink shall render quarterly reports to LIMR on or before the last day of April, July, October, and January showing the amount of Net Sales received by NewLink during the most recently concluded fiscal quarter and the appropriate Royalties due to LIMR. Each such report shall be accompanied by payment of the Royalties due for such fiscal quarter.  NewLink shall provide LIMR audited annual financials within 30 days of completion of NewLink’s audit, after the first commercial sale of any Licensed Product.  NewLink shall pay estimated royalties payments quarterly with an annual reconciliation and of all payments performed within 30 days of receipt of audited numbers.

 

10.           Milestones and Associated Payments:  NewLink has represented to LIMR, to induce LIMR to issue this exclusive license, that it will commit itself to a diligent program of developing and exploiting Licensed Product(s) so that public utilization will result there from.  As evidence thereof, Company shall adhere to the following milestones:

 

	
 
    	
Milestone
    	
 
    	
Payment
    
	
1
    	
NewLink will [*] within [*]
    	
 
    	
None
    
	
2
    	
NewLink will [*] within [*]
    	
 
    	
NewLink shall pay LIMR [*] upon   [*].
    
	
3
    	
Once [*] NewLink   shall [*]
    	
 
    	
NewLink shall pay LIMR [*]   upon [*].
    
	
4
    	
Upon [*], NewLink   shall [*]
    	
 
    	
NewLink shall pay LIMR [*]   upon [*].
    
	
5
    	
[*].   NewLink shall [*] within [*].
    	
 
    	
NewLink shall pay LIMR [*] at   the [*].
    

 

All milestone fees are payable only once, regardless of the number of times the milestone is achieved and regardless of the number of License Products developed by NewLink.

 

11.           Reports and Accounting.  NewLink shall report to LIMR once a year during which time it describes its product development, financial information and milestone status.

 

12.           Indemnity.  Company shall defend and indemnify and hold LIMR, its affiliates, parent corporation, trustees, officers, agents and employees (the “Indemnitees”) harmless from any judgments and other liabilities based upon claims or causes of action brought by a third party against LIMR or its employees which arise out of [*], or from the [*], except to the extent that such judgments or liabilities arise in whole or in part from [*], provided that LIMR promptly notifies Company of any such claim coming to its attention and that it cooperates with Company in the defense of such claim.  If any such claims or causes of action are made, Company’s counsel, subject to LIMR’s approval,

 

6

 

which shall not be unreasonably withheld, shall defend LIMR. LIMR reserves the right to be represented by its own counsel at its own expense.

 

13.           Insurance.  At such time as any product, process, service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Company or by a sub licensee, Affiliate or agent of Company, Company shall at its sole cost and expense, procure and maintain comprehensive general liability insurance in amounts not less than $3,000,000 per incident and naming the Indemnitees as additional insureds.  Such comprehensive general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for Company’s indemnification under this Agreement.  If Company elects to self-insure all or part of the limits described above (including deductibles or retentions

 

7

 

which are in excess of $250,000 annual aggregate) such self-insurance program must be acceptable to LIMR and Main Line Health Vice President Insurance.  Such insurance will be considered primary as to any other valid and collectible insurance, but only as to acts of the named insured.  The minimum amounts of insurance coverage required shall not be construed to create a limit of Company’s liability with respect to its indemnification under this Agreement.  Company shall provide LIMR with written evidence of such insurance upon request of LIMR. Company shall provide LIMR with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if Company does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, LIMR shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice or any additional waiting periods.  Company shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during (I) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by Company or by a sub licensee, Affiliate or agent of Company and (ii) a reasonable period after the period referred to in (i) above which in no event shall be less than fifteen (15) years.

 

14.           Mutual Confidentiality.  Company and LIMR realize that certain information received by one party from the other pursuant to this Agreement shall be confidential.  It is therefore agreed that any information received by one party from the other should be clearly designated in writing as “CONFIDENTIAL” at the time of transfer, shall not be disclosed by either party to any third party and shall not be used by either party for purposes other than those contemplated by this Agreement.  Any information exchanged by the parties under this Agreement shall remain confidential for a period of three (3) years from the termination of the Agreement, unless or until —

 

a.                                       Said information shall become known to third parties not under any obligation of confidentiality to the disclosing party, or shall become publicly known through no fault of the receiving party, or

 

b.                                      Said information was already in the receiving party’s possession prior to the disclosure of said information to the receiving party, except in cases when the information has been covered by a preexisting Confidentiality Agreement, or

 

c.                                       Said information shall be subsequently disclosed to the receiving party, by a third party not under any obligation of confidentiality to the disclosing party, or

 

d.                                      Said information is approved for disclosure by prior written consent of the disclosing party, or

 

e.                                       Said information is required to be disclosed by court order or governmental law or regulation, provided that the receiving party gives the disclosing party

 

8

 

prompt notice of any such requirement and cooperates with the disclosing party in attempting to limit such disclosure.

 

15.           Disclaimer.  Nothing contained in this Agreement shall be construed as:

 

A.                                   a warranty or representation by LIMR as to the validity or scope of any Patent Rights;

 

B.                                     a warranty or representation that any Licensed Products manufactured, used or sold will be free from infringement of patents, copyrights, or third parties, except that LIMR represents that it has no knowledge of any existing issued patents or copyrights which might be infringed;

 

C.                                     LIMR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF LICENSED PRODUCTS.

 

16.           Technical Assistance.  Throughout the term of the Agreement, LIMR agrees to permit Company and its designees to consult with its employees and agents regarding developments and enhancements made after the Effective Date relating to the Licensed Products, at such times and places as may be mutually agreed upon; provided that Company agrees to limit such consultation to five (5) employee-investigator hours per week and make suitable arrangements directly with LIMR employees and agents and to compensate for such consultation.

 

17.           Name.  Company shall not use and shall not permit to be used by any other person or entity the name or logo of LIMR nor any adaptation thereof, or the name of LIMR’s employees, in any advertising, promotional or sales literature, or for any other purpose without prior written permission of LIMR.

 

18.           Governing Law.  This Agreement shall be construed, governed, interpreted and enforced according to the laws of the Commonwealth of Pennsylvania.

 

19.           Notices.  Any notice or communication required or permitted to be given by either party hereunder, shall be deemed sufficiently given, if mailed by certified mail, return receipt requested, and addressed to the party to whom notice is given as follows:

 

If to LIMR:

 

Karen Knudsen, Ph.D.
 Director of Scientific Administration
 Lankenau Institute for Medical Research
 100 E. Lancaster Avenue
 Wynnewood, PA 19096

 

9

 

With a Copy to:

 

Office of the General Counsel
 Main Line Health
 130 So. Bryn Mawr Avenue
 Bryn Mawr, PA 19010

 

If to NewLink:

 

Dr. Nick Vahanian
 Chief Medical and Operations Officer
 2901 South Loop Drive
 Suite 3900
 Ames, Iowa 50010

 

20.           Assignment.  Neither party shall assign or transfer this Agreement without the express prior written consent of the other, such consent not to be unreasonably withheld.  For purposes of this Agreement, an assignment or transfer of this Agreement by NewLink shall be deemed to occur in connection with (a) an express assignment or transfer, (b) a general assignment for the benefit of creditors or in connection with any bankruptcy or other debtor relief law, (c) any merger or consolidation to which NewLink is a party, regardless of whether NewLink is the surviving corporation, or (d) any other transaction pursuant to which a change would occur in the “ultimate parent entity” of NewLink.  Notwithstanding the foregoing, an assignment of this Agreement by NewLink in connection with the transfer of all or substantially all of its assets or equity, or by reason of acquisition, merger, consolidation or operation of law shall not require LIMR’s consent.

 

21.           Entire Agreement.  This Agreement represents the entire agreement between the parties as of the effective date hereof, and may only be subsequently altered or modified by an instrument in writing.  This Agreement cancels and supersedes any and all prior oral or written agreements between the parties that relate to the subject matter of this Agreement.

 

22.           Mediation and Arbitration.  Both parties agree that they shall attempt to resolve any dispute arising from this Agreement through mediation.  Both parties agree that at least one company employee, capable of negotiating an agreement on behalf of his company, shall, within three weeks of receipt of written notification of a dispute, meet with at least one employee of the other party who is also capable of negotiating an agreement on behalf of his company.  If no agreement can be reached, both parties agree to meet again within a four week

 

10

 

period after the initial meeting to negotiate in good faith to resolve the dispute.  If no agreement can be reached after this second meeting, both parties agree to submit the dispute to binding arbitration under the Rules of The American Arbitration Association before a panel of three arbitrators.

 

23.           Waiver.  A failure by one of the parties to this Agreement to assert its rights for or upon any breach or default of this Agreement shall not be deemed a waiver of such rights nor shall any such waiver be implied from acceptance of any payment.  No such failure or waiver in writing by any one of the parties hereto with respect to any rights, shall extend to or affect any subsequent breach or impair any right consequent thereon.

 

24.           Severability.  The parties agree that it is the intention of neither party to violate any public policy, statutory or common laws, and governmental or supranational regulations; that if any sentence, paragraph, clause or combination of the same is in violation of any applicable law or regulation, or is unenforceable or void for any reason whatsoever, such sentence, paragraph, clause or combinations of the same shall be inoperative and the remainder of the Agreement shall remain binding upon the parties.

 

25.           Marking.  Company agrees to mark the Licensed Products in the United States with all applicable U.S. and state Trademarks, and U.S. Patent numbers.

 

26.           Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof.

 

 

	
Lankenau Institute for Medical Research
    	
NewLink Genetics Corporation
    
	
 
    	
 
    
	
By:
    	
/s/ Edward L. Jones, Jr.
    	
 
    	
Name:
    	
/s/ Nicholas N. Vahanian
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Chairman
    	
 
    	
Title:
    	
Chief Medical and Operations Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
July 8, 2005
    	
 
    	
Date:
    	
July 7, 2005
    

 

11

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