Document:

Exhibit 10.15

 

EXECUTION COPY

 

TECHNOLOGY LICENSE AND COLLABORATION AGREEMENT

 

BY AND BETWEEN

 

SHENZHEN ARIMAB BIOPHARMACEUTICALS CO., LTD.

 

AND

 

ARIDIS PHARMACEUTICALS,INC.

 

Date: July 2, 2018

 

 

TABLE OF CONTENTS

 

	
Article 1   DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
Article 2   LICENSES AND OTHER RIGHTS
    	
9
    
	
 
    	
 
    	
 
    
	
2.1
    	
Grant of License to   Company
    	
9
    
	
2.2
    	
Grant of License to   Licensor
    	
9
    
	
2.3
    	
Right to Sublicense
    	
9
    
	
2.4
    	
Manufacturing   Technology Transfer
    	
10
    
	
2.5
    	
Procedures for   Manufacturing Technology Transfer
    	
10
    
	
2.6
    	
Exclusivity
    	
10
    
	
 
    	
 
    	
 
    
	
Article 3   GOVERNANCE
    	
10
    
	
 
    	
 
    	
 
    
	
3.1
    	
Formation and   Composition of Joint Advisory Committee
    	
10
    
	
3.2
    	
Function
    	
11
    
	
3.3
    	
Meetings
    	
11
    
	
3.4
    	
JAC Responsibilities
    	
11
    
	
3.5
    	
Minutes of Committee   Meetings
    	
11
    
	
3.6
    	
Urgent Matters
    	
11
    
	
 
    	
 
    	
 
    
	
Article 4   DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF PRODUCT
    	
11
    
	
 
    	
 
    	
 
    
	
4.1
    	
Development of Product
    	
11
    
	
4.2
    	
Development Support
    	
12
    
	
4.3
    	
Preparation of   Development Plans
    	
12
    
	
4.4
    	
Commercialization
    	
12
    
	
4.5
    	
Clinical and Commercial   Manufacturing
    	
13
    
	
4.6
    	
Diligence by Company
    	
14
    
	
4.7
    	
Compliance
    	
14
    
	
4.8
    	
Cooperation and   Coordination
    	
14
    
	
4.9
    	
Right to Subcontract of   Company
    	
14
    
	
4.10
    	
Trademarks
    	
14
    
	
4.11
    	
Reporting
    	
15
    
	
 
    	
 
    	
 
    
	
Article 5   REGULATORY MATTERS
    	
15
    
	
 
    	
 
    	
 
    
	
5.1
    	
Regulatory Filings
    	
15
    
	
5.2
    	
Communications with   Authorities
    	
15
    
	
5.3
    	
Support in Regulatory   Matters
    	
15
    
	
5.4
    	
Adverse Event Reporting
    	
15
    

 

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5.5
    	
Recalls
    	
15
    
	
5.6
    	
Pharmacovigilance   Agreement
    	
16
    
	
 
    	
 
    
	
Article 6   FINANCIAL PROVISIONS
    	
16
    
	
 
    	
 
    
	
No   Further Payment
    	
16
    
	
 
    	
 
    
	
Article 7   INVENTIONS AND PATENTS
    	
16
    
	
 
    	
 
    	
 
    
	
7.1
    	
Patent Ownership,   Prosecution and Maintenance
    	
16
    
	
7.2
    	
Enforcement of Patents   and Know-How
    	
18
    
	
7.3
    	
Third Party Actions   Claiming Infringement
    	
18
    
	
 
    	
 
    	
 
    
	
Article 8   CONFIDENTIALITY
    	
19
    
	
 
    	
 
    	
 
    
	
8.1
    	
Confidentiality   Obligations
    	
19
    
	
8.2
    	
Use
    	
20
    
	
8.3
    	
Notice
    	
20
    
	
8.4
    	
Required Disclosure
    	
20
    
	
 
    	
 
    	
 
    
	
Article 9   REPRESENTATIONS, WARRANTIES AND COVENANTS
    	
20
    
	
 
    	
 
    	
 
    
	
9.1
    	
Representations and Warranties
    	
20
    
	
9.2
    	
Additional   Representations and Warranties of Licensor
    	
21
    
	
9.3
    	
Licensor Covenants
    	
22
    
	
 
    	
 
    	
 
    
	
Article 10   INDEMNIFICATION AND INSURANCE
    	
22
    
	
 
    	
 
    	
 
    
	
10.1
    	
Indemnification by   Company
    	
22
    
	
10.2
    	
Indemnification by   Licensor
    	
23
    
	
10.3
    	
Certain Liabilities
    	
23
    
	
10.4
    	
No Consequential   Damages
    	
23
    
	
10.5
    	
Notification of Claims;   Conditions to Indemnification Obligations
    	
23
    
	
10.6
    	
Insurance
    	
23
    
	
 
    	
 
    
	
Article 11   TERM AND TERMINATION
    	
24
    
	
 
    	
 
    	
 
    
	
11.1
    	
Term and Expiration
    	
24
    
	
11.2
    	
Termination of the   Agreement
    	
24
    
	
11.3
    	
Effects of Termination
    	
24
    
	
11.4
    	
Continuing Rights in   Case of Licensor Bankruptcy or Insolvency; Right of First Refusal
    	
25
    
	
11.5
    	
Continuing Rights in   Case of Company Bankruptcy or Insolvency; Right of First Refusal
    	
25
    
	
11.6
    	
Other Remedies
    	
25
    
	
 
    	
 
    
	
Article 12   DISPUTE RESOLUTION
    	
25
    
	
 
    	
 
    
	
12.1
    	
Disputes
    	
25
    
	
12.2
    	
Escalation to Executive   Officers
    	
26
    
	
12.3
    	
Full Arbitration
    	
26
    

 

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Article 13   MISCELLANEOUS PROVISIONS
    	
27
    
	
 
    	
 
    	
 
    
	
13.1
    	
Relationship of the   Parties
    	
27
    
	
13.2
    	
Assignment
    	
27
    
	
13.3
    	
Performance and   Exercise by Affiliates
    	
27
    
	
13.4
    	
Change of Control
    	
27
    
	
13.5
    	
Further Actions
    	
27
    
	
13.6
    	
Accounting Procedures
    	
28
    
	
13.7
    	
Force Majeure
    	
28
    
	
13.8
    	
Entire Agreement of the   Parties; Amendments
    	
28
    
	
13.9
    	
Captions
    	
28
    
	
13.10
    	
Governing Law
    	
28
    
	
13.11
    	
Notices and Deliveries
    	
28
    
	
13.12
    	
Waiver
    	
28
    
	
13.13
    	
Severability
    	
28
    
	
13.14
    	
Interpretation
    	
28
    
	
13.15
    	
Counterparts
    	
29
    
	
13.16
    	
No Reliance
    	
29
    
	
 
    	
 
    	
 
    
	
Schedule 1.42
    	
 
    	
31
    
	
Schedule 1.43
    	
 
    	
32
    
	
Schedule 1.44
    	
 
    	
33
    
	
Schedule 1.62
    	
 
    	
34
    
	
Schedule 7.1.4
    	
 
    	
35
    
	
Schedule 9.2.13
    	
 
    	
36
    

 

iii

 

EXECUTION COPY

 

TECHNOLOGY LICENSE AND COLLABORATION AGREEMENT

 

This Technology License and Collaboration Agreement (this “Agreement”) is entered into as of July 2, 2018 (the “Effective Date”) by and between Shenzhen Arimab Biopharmaceuticals Co., Ltd., a corporation organized under the laws of the PRC having a place of business at Room 5044, No. 21, Langshan Lu, Song Ping Shan, Nanshan District, Shenzhen, China (“Company”), and Aridis Pharmaceuticals, Inc., a corporation organized under the laws of Delaware, USA, having a place of business at 5941 Optical Court, San Jose, California 95138, the USA (“Licensor”). Company and Licensor may be referred to herein respectively as a “Party” or collectively as “Parties.”

 

RECITALS:

 

WHEREAS, Company is a Sino-foreign equity joint venture company formed pursuant to the Joint Venture Contract and the Articles of Association, both dated as of the date thereof by and between Shenzhen Hepalink Pharmaceutical Co. Ltd. (“Hepalink”) and Licensor;

 

WHEREAS, Licensor has developed or acquired and controls certain technology and proprietary materials related to certain pharmaceutical products including the Product for infections treatment, and is and will continue to be engaged in the research, discovery, development, manufacture and commercialization of the Product for pulmonary infection, breathing machine infection, pneumonia and blood poisoning treatment;

 

WHEREAS, Company is interested in the research, development, manufacturing and commercialization of the Product in the Territory; and

 

WHEREAS, pursuant to Section 5.1(b) of the Joint Venture Contract, subject to the terms and conditions of this Agreement, Licensor hereby contributes to and grants Company exclusive rights to Develop and Commercialize the Products in the Field in the Territory (“Technology License”) and agrees to collaborate with Company for the purpose of developing, manufacturing and commercializing the Products (“Collaboration”);

 

NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein, the Parties agree as follows:

 

ARTICLE 1                           DEFINITIONS

 

Unless otherwise specifically provided herein, the following terms shall have the following meanings:

 

1.1                               “Adverse Event” means any serious untoward medical occurrence in a patient or subject who is administered Product.

 

1.2                               “Affiliate” or “Associated Company” means a Person that controls, is controlled by or is under common control with a Party, but only for so long as such control exists.  For the purposes of this Section 1.2, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct the management and policies of such Person or entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

 

1.3                               “Articles of Association” means the articles of association for the Company dated July 2, 2018 by and between Hepalink and Licensor.

 

1.4                               “Bankruptcy Event” means: (a) voluntary or involuntary proceedings by or against a Person are instituted in bankruptcy under any insolvency Law, which proceedings, if involuntary, shall not have been dismissed within sixty (60) days after the date of filing; (b) a receiver or custodian is appointed for a Person; (c) proceedings are instituted by or against a Person for reorganization, dissolution, liquidation or winding-up of the Person, which proceedings, if involuntary, shall not have been dismissed within sixty (60) days after the date of filing; or (d) substantially all of the assets of a Person are seized or attached and not released within sixty (60) days thereafter.

 

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1.5                               “Business Day” means a day other than Saturday or Sunday on which banking institutions in Shenzhen, China are open for business.

 

1.6                               “Calendar Quarter” means each three (3) month period commencing on January 1, April 1, July 1 or October 1 of any year; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter, and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement.

 

1.7                               “Calendar Year” means the period beginning on the 1st of January and ending on the 31st of December of the same year; provided, however, that (a) the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the same year and (b) the last Calendar Year of the Term shall commence on January 1 of the Calendar Year in which this Agreement terminates or expires and end on the date of termination or expiration of this Agreement.

 

1.8                               “CFDA” means the Chinese Food and Drug Administration or a successor agency thereto.

 

1.9                               “Challenge” means any challenge to the validity or enforceability of any of the Licensor Patents, including without limitation by (a) filing a declaratory judgment action in which any of the Licensor Patents is alleged to be invalid or unenforceable; or (b) filing or commencing any re-examination, interference, derivation proceeding, post-issuance proceeding, opposition, cancellation, nullity or similar proceedings against any of the Licensor Patents in the courts or patent offices in any country.

 

1.10                        “Change of Control” means, with respect to the Company, Licensor or its parent entity (the “Target”): (a) a transaction or series of related transactions that results in the sale or other disposition of all or substantially all of the Target’s  assets; or (b) a merger or consolidation in which, whether or not the Target is the surviving corporation, the shareholders of the Target immediately prior to the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, possess, directly or indirectly through one or more intermediaries, a majority of the voting power of all of the surviving entity’s outstanding stock and other securities and the power to elect a majority of the members of the surviving entity’s board of directors; or (c) a transaction or series of related transactions (which may include a tender offer for the Target’s stock or the issuance, sale or exchange of stock of the Target) if a single Person or group of Persons who are Affiliates (including, without limitation,  Affiliates that are venture capital or investment divisions of such Person) and who are engaged in the research, development, manufacturing and commercialization of pharmaceutical products acquire the Target’s stock in such transaction or series of related transactions that possesses a majority of the voting power of all of the Target’s outstanding stock and other securities and the power to elect a majority of the members of the Target’s board of directors.

 

1.11                        “Clinical Trial” means a clinical trial in human subjects that has been approved by a Regulatory Authority and Institutional Review Board or Ethics Committee, and is designed to measure the safety and/or efficacy of Product.  Clinical Trials shall include Phase I Clinical Trials, Phase II Clinical Trials, Phase III Clinical Trials and Phase IV Clinical Trials.

 

1.12                        “Commercialization” or “Commercialize” means activities relating specifically to the pre-launch, launch, promotion, marketing, sales force recruitment, pricing determination, sale and distribution of a pharmaceutical product and post-launch medical activities, including: (a) manufacturing and distribution for commercial sale, (b) strategic marketing, sales force detailing, advertising, and market and product support; (c) importing or exporting for sale, offering for sale; (d) medical education and liaison and any phase IV clinical trials; (e) all customer support and product distribution, invoicing and sales activities; (f) all post-approval regulatory activities, including those necessary to maintain Regulatory Approvals; and (g) target product profile, pricing, formulary and reimbursement related activities including pricing and reimbursement approvals.

 

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1.13                        “Commercialization Regulatory Approval” means, with respect to any Product, the Regulatory Approval required by Laws to sell such Product for use for an Indication, as well as, to the extent required by Laws for the sale of the Product, Price Approvals and government reimbursement approvals.  For purposes of clarity, (a) “Commercialization Regulatory Approval” in the PRC means final approval of an NDA or sNDA by CFDA permitting marketing of the applicable Product in PRC; (b) “Commercialization Regulatory Approval” in the United States means final approval of an NDA or sNDA by FDA permitting marketing of the applicable Product in interstate commerce in the United States; (c) “Commercialization Regulatory Approval” in the European Union means marketing authorization for the applicable Product granted either by a Regulatory Authority in any European country or by the EMA, together, if required by Laws, with the first Price Approval for the applicable Product granted by a Regulatory Authority in any major European country including Italy.

 

1.14                        “Commercially Reasonable Efforts” means: (a) with respect to the efforts to be expended by a Party with respect to any objective, such reasonable, diligent, and good faith efforts as such Party would normally use to accomplish a similar objective under similar circumstances; and (b) with respect to any objective relating to Development or Commercialization of Product by a Party, the application by such Party, consistent with the exercise of its prudent scientific and business judgment, of diligent efforts and resources to fulfill the obligation in issue, consistent with the level of efforts such Party would devote to a product at a similar stage in its product life as  Product and having profit potential and strategic value comparable to that of Product, taking into account, without limitation, commercial, legal and regulatory factors, target product profiles, product labeling, past performance, the regulatory environment and competitive market conditions in the therapeutic area, safety and efficacy of Product, and the strength of its proprietary position all based on conditions then prevailing.  For clarity, Commercially Reasonable Efforts will not mean that a Party guarantees that it will actually accomplish the applicable objective. Notwithstanding anything to the contrary, Commercially Reasonable Efforts shall be deemed in all cases to at least include a contribution of significant efforts and resources in every year of the Term toward execution of the Development Plan, and continued demonstration by the Company in each year that it has sufficient assets to continue those significant efforts.

 

1.15                        “Company Competitor” means any company that (itself or through an Affiliate) is developing or commercializing a product, including any Competing Product, that is, or could reasonably be expected to be, in competition with any product that Company (itself or through an Affiliate) is developing or commercializes.

 

1.16                        “Company Know-How” means all Know-How that is Controlled by Company or any of its Affiliates, as of the Effective Date or at any time thereafter during the Term, and that is necessary or useful in the research, Development, Manufacture, use, or Commercialization of the Product and is not invented or developed through the use or practice of Licensor Technology.

 

1.17                        “Company Materials” means all chemical, biological or physical materials that are Controlled by Company or any of its Affiliates, as of the Effective Date or at any time thereafter during the Term, and that are necessary or useful in the research, Development, Manufacture, use or Commercialization of the Product and are not invented or developed through the use or practice of Licensor Technology.

 

1.18                        “Company Patents” means all Patent Rights that are Controlled by Company or any of its Affiliates, as of the Effective Date or at any time thereafter during the Term, and that Cover the research, Development, Manufacture, use, or Commercialization of the Product and are not invented or developed through the use or practice of Licensor Technology.

 

1.19                        “Company Technology” means the Company Patents, the Company Know-How, and Company Materials.

 

1.20                        “Competing Product” means any pharmaceutical product in any dosage form, formulation, presentation or package configuration which contains AR-101 or AR-301.

 

1.21                        “Confidential Information” means non-public information relating to the business, operations or products, including any Know-How, of a party (“Disclosing Party”) or its Affiliates, regardless of its form or medium as provided to the other party (“Receiving Party”) or its Affiliates in connection with this Agreement or otherwise becomes known to the Receiving Party by virtue of this Agreement, provided that, Confidential

 

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Information shall not include any information that the Receiving Party can show by competent evidence: (a) is already known to the Receiving Party at the time it is disclosed to the Receiving Party by the Disclosing Party; (b) is or becomes generally known to the public through no act or omission of the Receiving Party in violation of the terms of this Agreement; (c) has been lawfully received by the Receiving Party from a Third Party without restriction on its disclosure and without, to the knowledge of the Receiving Party, a breach by such Third Party of an obligation of confidentiality to the Disclosing Party; or (d) has been independently developed by the Receiving Party without use of or reference to the Confidential Information of the Disclosing Party.

 

1.22                        “Controlled” means, with respect to (a) Patent Rights, (b) Know-How or (c) biological, chemical or physical material, that a Party or one of its Affiliates owns or has a license or sublicense to such Patent Rights, Know-How or material (or, in the case of material, has the right to physical possession of such material) and has the ability to grant a license or sublicense to, or assign its right, title and interest in and to, such Patent Rights, Know-How or material as provided for in this Agreement without violating the terms of any agreement or other arrangement with any Third Party.

 

1.23                        “Cover”, “Covering” or “Covered” means, with respect to Product, that the making, using, selling, or offering for sale of Product would, but for a license granted in this Agreement under the Licensor Patent Rights, infringe a Valid Claim of the Licensor Patent Rights in the country in which the activity occurs.

 

1.24                        “Development” or “Develop” means, with respect to Product, the performance of all pre-clinical and clinical development (including toxicology, pharmacology, test method development and stability testing, process development, formulation development, quality control development, statistical analysis), Clinical Trials, manufacturing and regulatory activities that are required to obtain Regulatory Approval of Product in the Territory.

 

1.25                        “Development Plan” means with respect to each Product, the written plan for the Development activities to be conducted for such Product, as such written plan may be prepared, amended, modified or updated in accordance with Section 4.3.

 

1.26                        “Development Program” means the Development activities to be conducted during the Term by each Party with respect to each Product pursuant to the Development Plans.

 

1.27                        “EMA” means the European Medicines Agency or a successor agency thereto.

 

1.28                        “European Commission” means the authority within the European Union that has the legal authority to grant Regulatory Approvals in the European Union based on input received from the EMA or other competent Regulatory Authorities.

 

1.29                        “Executive Officers” means, together, a member of the senior management of the Company and the Licensor.

 

1.30                        “Existing Third Party Agreement(s)” means a license agreement under which rights with respect to Product are granted to Licensor directly or indirectly as an assignee or sublicensee by a Third Party.

 

1.31                        “FDA” means the United States Food and Drug Administration or a successor federal agency thereto.

 

1.32                        “Field” means the diagnosis, treatment, palliation or prevention of all diseases or conditions in all Indications related to infections in humans.

 

1.33                        “First Commercial Sale” means, on a country-by-country basis, the first transfer or disposition for value of Product in such country to a Third Party by Company or the Licensor, or any of its Affiliates or Sublicensees, in each case, after Commercialization Regulatory Approval has been obtained in such country.

 

1.34                        “Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental

 

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division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national or supranational organization or body; or (e) individual, entity, or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

 

1.35                        “IFRS” means the International Financial Reporting Standards, the set of accounting standards and interpretations and the framework in force on the Effective Date and adopted by the European Union as issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), as such accounting standards may be amended from time to time.

 

1.36                        “Indication” means the prevention or treatment by AR-301 or AR-101 of a generally acknowledged disease or condition caused by a specific pathogen, a significant manifestation of a disease or condition caused by a specific pathogen, or symptoms associated with a disease or condition caused by a specific pathogen or a risk for a disease or condition caused by a specific pathogen for which a MAA may be obtained.

 

1.37                        “IND” means an investigational new drug application submitted to applicable Regulatory Authorities for approval to commence Clinical Trials in a given jurisdiction.

 

1.38                        “Joint Venture Contract” means the joint venture contract of the Company dated         , 2018 by and among Hepalink and Licensor.

 

1.39                        “Know-How” means any: (a) scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, that is not in the public domain or otherwise publicly known, including discoveries, inventions, trade secrets, devices, databases, practices, protocols, regulatory filings, methods, processes (including manufacturing processes, specifications and techniques), techniques, concepts, ideas, specifications, formulations, formulae, data (including pharmacological, biological, chemical, toxicological, clinical and analytical information, quality control, trial and stability data), case reports forms, medical records, data analyses, reports, studies and procedures, designs for experiments and tests and results of experimentation and testing (including results of research or development), summaries and information contained in submissions to and information from ethical committees, or Regulatory Authorities, and manufacturing process and development information, results and data, whether or not patentable, all to the extent not claimed or disclosed in a patent or patent application; and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material, including drug substance samples, intermediates of drug substance samples, drug product samples and intermediates of drug product samples and proprietary equipment, procedures or methodologies relating to the manufacturing of the Product.  The fact that an item is known to the public shall not be taken to exclude the possibility that a compilation including the item, and/or a development relating to the item, is (and remains) not known to the public.  “Know-How” includes any rights including copyright, database or design rights protecting such Know-How.  “Know-How” excludes Patent Rights.

 

1.40                        “Knowledge” means, with respect to a matter that is the subject of a given warranty of Licensor, the actual knowledge, information or belief of any officer of Licensor after making reasonable inquiry into the relevant subject matter of senior employees of Licensor.  “Knowingly” means with Knowledge.

 

1.41                        “Law” or “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the binding effect of law of any Governmental Body.

 

1.42                        “Licensor Know-How” means all Know-How that is Controlled by Licensor or any of its Affiliates, as of the Effective Date or at any time thereafter during the Term, and that is necessary or useful in the research, Development, Manufacture, use, or Commercialization of the Product but does not constitute Significant Improvements.  The Licensor Know-How as of the Effective Date shall include all Know-How set forth on Schedule 1.42.

 

1.43                        “Licensor Materials” means all chemical, biological or physical materials other than AR-101 and AR-301 that are Controlled by Licensor or any of its Affiliates, as of the Effective Date or at any time thereafter

 

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during the Term, and that are necessary or useful in the research, Development, manufacture, use or Commercialization of the Product but do not constitute Significant Improvements.  The Licensor Materials as of the Effective Date shall include all Licensor Materials set forth on Schedule 1.43.

 

1.44                        “Licensor Patents” means all Patent Rights that are Controlled by Licensor or any of its Affiliates, as of the Effective Date and at any time thereafter during the Term, and that Cover the research, Development, Manufacture, use, or Commercialization of the Product in the Territory but do not constitute Significant Improvements.  The Licensor Patents existing as of the Effective Date shall include all Licensor Patents set forth on Schedule 1.44; provided, that Licensor shall update Schedule 1.44 from time-to-time to include any new Patent Rights that come to be Controlled by Licensor or any of its Affiliates at any time during the Term on or following the Effective Date that Cover the research, Development, Manufacture, use, or Commercialization of the Product.

 

1.45                        “Licensor Technology” means the Licensor Patents, the Licensor Know-How, Licensor Materials, and Program IP (including Program Patents and Program Know-How).  For clarity and by way of example, Licensor Technology at least includes AR-101 and AR-301, cell line producing AR-301, AR-101 monoclonal antibody,culture medium producing monoclonal antibody, monoclonal purification process

 

1.46                        “MAA” means an NDA and any equivalent application for marketing approval submitted in any country in the Territory or outside of the Territory, including all additions, deletions or supplements thereto, and as any and all such requirements may be amended, or supplanted, at any time.

 

1.47                        “Manufacture” or “Manufacturing” or “Manufactured” means all operations involved in the manufacture, receipt, incoming inspection, storage and handling of raw materials, and the manufacture, processing, purification, packaging, labeling, warehousing, quality control testing (including in-process release and stability testing), shipping and release of Product.

 

1.48                        “Manufacturing Costs” means with respect to any Product Manufactured by or on behalf of a Party, such Party’s costs of Manufacturing such Product, which shall be the sum of the following components: (a) direct costs, including manufacturing labor and materials directly used in Manufacturing such Product by such Party or its Affiliates and allocated supervisory costs of the manufacturing department; (b) direct labor and allocated supervisory costs of non-manufacturing departments (such as quality and regulatory) attributable to such Product; (c) an allocation of depreciation of facilities, machinery and equipment used in Manufacture of such Product; (d) toll process and other charges incurred by such Party or its Affiliates for outsourcing the Manufacture of such Product and the cost of supervising and managing the Third Party Manufacturers, and of receipt, incoming inspections, storage, packaging, handling quality control testing and release of the outsourced items; (e) allocated general and administrative costs, including, without limitation, purchasing, human resources, payroll, legal, maintenance, information system and accounting, attributable to such Product; and (f) any other reasonable and customary Out-of-Pocket costs borne by such Party or its Affiliates for the testing, transport, customs clearance, duty, insurance and/or storage of such Product.  For purposes of clarity, all allocations under this Section shall be based on space occupied or head-count or other activity-based method.

 

1.49                        “Manufacturing Development” means, with respect to a Product, all activities related to the optimization of a commercial-grade Manufacturing process for the Manufacture of such Product including, without limitation, test method development and stability testing, formulation, validation, productivity, trouble shooting and next generation formulation, process development, Manufacturing scale-up, development-stage Manufacturing, and quality assurance/quality control development.

 

1.50                        “NDA” means a New Drug Application submitted pursuant to the requirements of the FDA, as more fully defined in 21 U.S. CFR§ 314.3 et seq, or a Biologics License Application submitted pursuant to the requirements of the FDA, as more fully defined in 21 U.S. CFR § 601, or counterpart rules in other countries or regions.

 

1.51                        “Out-of-Pocket Expenses” means expenses actually paid by a Party or its Affiliate to any Third Party; provided, that “Out-of-Pocket Expenses” shall not include expenses paid to any consultants (or service providers of like kind), except for travel expenses associated with a consultant (or service provider of like kind).

 

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1.52                        “Patent Rights” means: (a) an issued or granted patent, including any extension, supplemental protection certificate, registration, confirmation, reissue, reexamination or renewal thereof; (b) a pending patent application, including any continuation, divisional, continuation-in-part, substitute or provisional application thereof; and (c) all counterparts or foreign equivalents of any of the foregoing issued by or filed in any country or other jurisdiction.

 

1.53                        “Patent Prosecution” means the responsibility and authority for (a) preparing, filing and prosecuting applications (of all types) for any Patent, (b) paying, filing and maintenance fees relating to any Patent, (c) managing any interference, opposition, re-issue, reexamination, revocation, nullification, or cancellation proceeding relating to the foregoing, (d) deciding to abandon Patent(s) and (e) settling any interference, opposition, revocation, nullification or cancellation proceeding.

 

1.54                        “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government or agency or political subdivision thereof.

 

1.55                        “Phase I Clinical Trial” means a Clinical Trial in any country that would satisfy the US requirements of 21 CFR 312.21(a) or counterpart rules in other jurisdictions.

 

1.56                        “Phase II Clinical Trial” means, as to a particular Product for any Indication, a Clinical Trial conducted in any country that would satisfy the US requirements of 21 CFR 312.21(b) or counterpart rules in other jurisdictions.

 

1.57                        “Phase III Clinical Trial” means, as to a particular Product for any Indication, a Clinical Trial in any country that would satisfy the US requirements of 21 CFR 312.21(c) or counterpart rules in other jurisdictions.

 

1.58                        “Phase IV Clinical Trial” means a post-registrational Clinical Trial conducted in any country or countries and required as a condition to, or for the maintenance of, any Regulatory Approval for a Product in the Territory or outside the Territory.

 

1.59                        “PRC” means The People’s Republic of China.

 

1.60                        “PRC Laws” means all current effective laws, regulations, administrative rules, regulatory document, judicial interpretations and other legally-binding decisions formulated and published by the legislative bodies, governments at all levels and their functional departments, the Supreme People’s Court and the Supreme People’s Procuratorate.

 

1.61                        “Price Approvals” means, in those countries in the Territory or outside the Territory where Regulatory Authorities may approve or determine pricing and/or pricing reimbursement for pharmaceutical products, such pricing and/or pricing reimbursement approval or determination.

 

1.62                        “Product” means any pharmaceutical product, in any dosage form, formulation, presentation or package configuration that is commercialized or undergoing research or pre-clinical or clinical development that contains or comprises, in part or in whole, the AR-101 and AR-301, which are described in the attached Schedule 1.62.  For clarity, different formulations or dosage strengths of a given Product shall be considered the same Product for purposes of this Agreement.

 

1.63                        “Regulatory Authority” means: (a) in China, the CFDA; (b) in the US, the FDA; (c) in the EU, the EMA or the European Commission; or (d) in any other jurisdiction anywhere in the world, any regulatory body with similar regulatory authority over pharmaceutical or biotechnology products.

 

1.64                        “Regulatory Approval” means any and all approvals, licenses, registrations, or authorizations of the relevant Regulatory Authority, including Price Approvals, necessary for the Development, manufacture, use, storage, import, transport or Commercialization of Product in a particular country or jurisdiction.

 

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1.65                        “Regulatory Filings” means, collectively: (a) all INDs, NDAs, establishment license applications, DMFs, applications for designation as an “Orphan Product(s)” under the Orphan Drug Act, for “Fast Track” status under Section 506 of the FDCA (21 U.S.C. § 356) or for a Special Protocol Assessment under Section 505(b)(4)(B) and (C) of the FDCA (21 U.S.C. § 355(b)(4)(B)) and all other similar filings (including, without limitation, counterparts of any of the foregoing in any country or region in the Territory or outside the Territory); (b) all supplements and amendments to any of the foregoing; and (c) all data and other information contained in, and correspondence relating to, any of the foregoing.

 

1.66                        “Representatives” means employees, consultants, contractors, advisors and agents of a Party or its Affiliates.

 

1.67                        “Senior Executive” means a member of senior management of a Party who is designated by such Party to resolve disputes under this Agreement.

 

1.68                        “Significant Improvements” means any improvements which either (a) comprise such significantly new scope that new clinical trial(s) (i.e., more than a single equivalency trial) would be required, or (b) whose incorporation in the license rights granted herein would require the payment of new fees or royalties to third parties.  Significant Improvements does not include minor improvements, such as formulation, affinity, vector function, or shelf half-life, for which no new clinical trial (other than a single Product equivalency trial) is required.

 

1.69                        “Sublicensee” means a Person other than an Affiliate of a Party to which either Party (or its Affiliate) has, pursuant to Section 2.3, granted sublicense rights under any of the license rights granted under Section 2.1 and Section 2.2; provided, that “Sublicensee” shall exclude distributors and contract manufacturers.

 

1.70                        “Territory” means PRC, Hong Kong, Macau and Taiwan.

 

1.71                        “Third Party” means any Person other than Licensor and Company or any of their respective Affiliates.

 

1.72                        “Third Party Action” means any Action made by a Third Party against either Party that claims that the Product, or its use or Development, manufacture, importation, or sale, infringes or misappropriates such Third Party’s intellectual property rights.

 

1.73                        “Third Party Agreement” means any agreement entered into by a Party or its Affiliate with a Third Party, or any amendment or supplement thereto, in each case following the Effective Date, whereby royalties, fees or other payments are to be made by a Party or its Affiliate to such Third Party in connection with the grant of rights under intellectual property rights Controlled by such Third Party, which rights are necessary or useful for the Development, manufacture, use or Commercialization of the Product.

 

1.74                        “United States” or “US” means the United States of America, its territories and possessions.

 

1.75                        “USD” or “$” means the lawful currency of the United States.

 

1.76                        “Valid Claim” means a claim of (a) an issued and unexpired patent which has not lapsed or been revoked, abandoned or held unenforceable or invalid by a final decision of a court or governmental or supra-governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, reexamination or disclaimer or otherwise or (b) any patent application which was filed in good faith and which has not  been cancelled, withdrawn, abandoned, or disallowed without the possibility of appeal or re-filing of the application and that has not been pending for more than five (5) years from the first substantive office action on such patent application.  If the patent application has been refiled or is a divisional application, the five (5) year period mentioned above shall be calculated from the first application filed in the series of applications.

 

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ARTICLE 2                           LICENSES AND OTHER RIGHTS

 

2.1                               Grant of License to Company.

 

2.1.1                     Development License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Company an exclusive (even as to Licensor), revocable, and royalty-free right and license to the Licensor Technology during the Term (with the right to sublicense as provided in Section 2.3) in the Field in the Territory, including related clinical trial data for the purpose of Development of AR-101 and AR-301 and Products in the Field in the Territory, including without limitation, the Manufacture of AR-101 and AR-301 and Product for use in Development in the Field in the Territory. This license cannot be revoked unless it is revoked by the Licensor according to Section 11.2.

 

2.1.2                     Commercialization License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Company an exclusive (even as to Licensor), revocable, and royalty-free right and license to the Licensor Technology during the Term (with the right to sublicense as provided in Section 2.3) in the Field in the Territory, including related clinical trial data for the purpose of (i) Commercializing Products in the Field in the Territory and (ii) Manufacture of AR-101 and AR-301 and Product for use in Commercialization in the Field in the Territory.  This license cannot be revoked unless it is revoked by the Licensor according to Section 11.2.

 

2.2                               Grant of License to Licensor.

 

2.2.1                     Development License. Subject to the terms and conditions of this Agreement, Company hereby grants to Licensor an exclusive (even as to Company), and revocable right and license to the Company Technology (with the right to sublicense solely as provided in Section 2.3) including related clinical trial data for the sole purpose of Development of AR-101 and AR-301 and Products in the Field outside the Territory, including without limitation, the Manufacture of AR-101 and AR-301 and Product for use in Development outside the Territory.  This license cannot be revoked unless it is revoked by the Company according to Section 11.2.

 

2.2.2                     Commercialization License. Subject to the terms and conditions of this Agreement, Company hereby grants to Licensor an exclusive (even as to Company), and revocable right and license to the Company Technology (with the right to sublicense solely as provided in Section 2.3) including related clinical trial data for the sole purposes of (i) Commercializing the Product in the Field outside the Territory and (ii) Manufacture of AR-101 and AR-301 and Product for use in Commercialization in the Field outside the Territory.  This license cannot be revoked unless it is revoked by the Company according to Section 11.2.

 

2.2.3                     In the event that Company files a patent application based on Company Technology, the Licensor shall pay Company a royalty of RMB10,000 for the licenses granted under Section 2.2,  Other than the royalty provided herein, Company has no current or future obligation to make any form of payment, including upfront payment, royalties, milestone payments, commercial event payments to Company, or reward and remuneration to inventors for Company’s grant of the rights and licenses to Licensor pursuant to Section 2.2.

 

2.3                               Right to Sublicense.

 

2.3.1                     Sublicenses. Either Party shall have the right to grant sublicenses to Sublicensees under the Development and Commercialization licenses granted to it under Section 2.1 and 2.2 respectively, with respect to Product for sale in the Field in the Territory for Company, and, in the Field outside the Territory for Licensor; provided, that, (i) it shall be a condition of any such sublicense that each Sublicensee agrees to be bound by the terms of this Agreement applicable to the Commercialization of Products in the Field in the applicable territory; (ii) the Party that is the

 

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sublicensor shall provide written notice to the other Party of any such proposed sublicense at least 30 days prior to such extension and provide copies to such Party of each such sublicense within 30 days of its execution; (iii) if a Party grants a sublicense to a Sublicensee, the Party that is the sublicensor shall be deemed to have guaranteed that such Sublicensee will fulfill all of such Party’s obligations under this Agreement applicable to the subject matter of such sublicense; (iv) the Party that is the sublicensor shall not be relieved of its obligations pursuant to this Agreement as a result of such sublicense; and (v) the sublicenses to such Sublicensee are permissible under any preexisting agreements with a Third Party.

 

2.3.2                     No Other Rights. Company shall have no rights to use or otherwise exploit Licensor Technology, and, Licensor shall have no rights to use or otherwise exploit Company Technology, in each case, except as expressly set forth herein.

 

2.4                               Manufacturing Technology Transfer.  Within 30 days following Company’s written request, Licensor will transfer to Company, at Licensor’s cost and expense, written or electronic copies of all Licensor Know-How and reasonable quantities of Licensor Materials, including such Know-How that relates to the Development and Manufacture of the Product. Reasonable quantities of Licensor Materials when they relate to AR-101 and AR-301 do not refer to the amount of AR-101 and AR-301 that Company needs to use in its clinical trials or commercialization but refer to the amount of AR-101 and AR-301 that Company needs to use as reference antibodies.

 

2.5                               Procedures for Manufacturing Technology Transfer.  The technology transfer set forth in Section 2.4 shall occur in an orderly fashion and in a manner such that the usefulness and confidentiality of the transferred Licensor Know-How, Licensor Materials and regulatory documentation are preserved in all material respects. During the Term, Licensor shall provide to Company full and prompt disclosure, within 30 days from the date when any Licensor Technology become Controlled by Licensor or any of its Affiliates of any Licensor Technology that becomes Controlled by Licensor or any of its Affiliates after the Effective Date and that is necessary or useful to Company to conduct its activities or exercise its rights as contemplated hereunder and shall, in the case of Licensor Know-How or Licensor Materials, promptly following such disclosure, transfer to Company written or electronic copies of such Licensor Know-How and reasonable quantities of such Licensor Materials.

 

2.6                               Exclusivity.  Licensor and its Affiliates shall not, during the Term, develop, manufacture, have manufactured, use, sell, offer for sale, promote, import, export or distribute a Competing Product in the Field in the Territory nor enter into any relationship with any Third Party with respect thereto.  The aforementioned restriction shall remain in effect in the event of Change of Control of Licensor and shall apply to the successor or assignee of Licensor.

 

ARTICLE 3                           GOVERNANCE

 

3.1                               Formation and Composition of Joint Advisory Committee.  As soon as reasonably practicable after the Effective Date, but in no event later than sixty (60) days following the Effective Date, a joint advisory committee (“JAC”) shall be established, composed of two (2) representatives from Company (consisting of one (1) representative from each of the shareholder of Company), two (2) representatives from Licensor, and one (1) representative from Hepalink, all of whom shall be senior level personnel who will have the appropriate technical credentials, experience and knowledge in business, pharmaceutical drug discovery, development and/or commercialization, and will have ongoing familiarity with the Development Program. The Parties shall notify one another in writing of any change in their respective members of the JAC. An alternate member designated by a Party may serve temporarily in the absence of a permanent member of the JAC for such Party.  Company will designate one member of the JAC as the “Chairperson” and Licensor will designate one member of the JAC as the “Co-Chairperson”.  The Chairperson shall be responsible for (a) calling meetings, (b) preparing and issuing minutes of each such meeting within a reasonable time thereafter (but in any event not to exceed thirty (30) days following such meeting), and (c) preparing and circulating an agenda for any upcoming meeting. Each member of the JAC, and each substitute, shall be subject to the confidentiality obligations contained in Article 8.

 

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3.2                               Function.  The JAC shall be responsible for advising on a research and development strategy and Manufacturing for Product with respect to the Company in the Territory and Licensor outside the Territory. The Parties shall act reasonably and in good faith with respect of the timing of such development to avoid adverse impact on development, Manufacture and Commercialization of Product by Company in the Territory and Licensor outside the Territory. The JAC shall have no power to amend this Agreement and shall have only such powers as are specifically delegated to it hereunder.

 

3.3                               Meetings.  Subject to the provisions of Section 3.6, the JAC shall hold meetings at least once each Calendar Quarter (unless otherwise unanimously agreed by the JAC) at such times and places as shall be determined by the JAC (including by videoconference, telephone, or web conference) to the extent necessary to fulfill the functions described in Section 3.2 and below; provided, that, in no event, shall such meetings be held in person less frequently than once every year (unless otherwise unanimously agreed by the JAC). At least four (4) members of the JAC will constitute a quorum for any meeting. The Chairperson will be responsible for organizing the meetings of the JAC, but will have no additional powers or rights beyond those held by the other representatives to the JAC. The Chairperson will include on the agenda any item within the scope of the responsibility of the JAC that is requested to be included by a JAC member, and will distribute the agenda to the all JAC members no less than five (5) days before any meeting of the JAC. A Party may invite other senior personnel of their organization to attend meetings of the JAC, as appropriate; provided, however, that such other senior personnel shall not have any duties of a JAC member or be taken into account for purposes of achieving a quorum. The JAC may act without a meeting if, prior to such action, a unanimous written consent thereto is given by all JAC members.  Each JAC member shall be responsible for its travel costs incurred for attending JAC meetings.

 

3.4                               JAC Responsibilities.  Company shall have the ultimate right to determine the strategy with respect to Development and Commercialization of Product in the Territory (including Manufacturing for the foregoing purposes) and Licensor shall have the ultimate right to determine the strategy with respect to the Development and Commercialization of Product outside the Territory. The JAC shall be responsible for general oversight of the conduct and progress of the Collaboration. Without limiting the generality of the foregoing, the JAC shall have the following responsibilities: (i) reviewing Development Plans and Product Commercialization Plans; (ii) reviewing data, reports or other information submitted to it by the Parties from time to time; and (iii) appointing committees with specific responsibilities in connection with the foregoing activities; provided, however, that in no event shall the JAC have any authority to (x) resolve any disputes involving the breach or alleged breach of this Agreement, or (y) otherwise amend or modify this Agreement, or the Parties’ respective rights and obligations hereunder.

 

3.5                               Minutes of Committee Meetings.  Minutes will be kept of all JAC meetings by the Chairperson and sent to all members of the JAC for review and approval within fourteen (14) days after each meeting. Minutes will be deemed approved unless any member of the JAC objects to the accuracy of such minutes by providing written notice to the other members of the JAC within seven (7) days of receipt of the minutes. In the event of any such objection that is not resolved by mutual agreement of the Parties, such minutes will be amended to reflect such unresolved dispute.

 

3.6                               Urgent Matters.  Notwithstanding anything in Section 3.3 expressed or implied to the contrary, in the event that an urgent issue or matter arises that requires prompt action by the JAC, the JAC shall arrange for a teleconference (or otherwise meet) for the purpose of resolving such issue or matter. Such JAC teleconference or meeting shall take place as promptly as possible, with the immediacy of such issue or matter requiring JAC action determining the time, place and manner of such teleconference or meeting.

 

ARTICLE 4                           DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF PRODUCT

 

4.1                               Development of Product.

 

4.1.1                     Starting on the Effective Date, except as set forth in Article 3 above, Company shall have the exclusive right, and sole responsibility and decision-making authority, at Company’s own cost and expense, to research, Develop the Product in the Territory and to conduct (either itself or through its Affiliates, agents, subcontractors and/or Sublicensees) all Clinical Trials and non-

 

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clinical studies necessary to obtain Regulatory Approval for Product in the Field in the Territory in accordance with the Development Plan, and to Manufacture Product for Development and Commercialization in the Territory.

 

4.1.2                     Starting on the Effective Date, except as set forth in Article 3 above, Licensor shall retain all other rights not described in Section 2.1 above to research, Develop and Commercialize Product outside the Territory, at its own cost and expense, and to Manufacture Product for Development and Commercialization outside the Territory.

 

4.1.3                     Notwithstanding the foregoing, each Party shall disclose to the other Party all non-clinical and clinical data relating to Product generated by either Party in the Territory and Licensor outside the Territory.  Each Party hereby grants the other Party the right to use such data for Development and Commercialization of the Product and to obtain Regulatory Approval by Company in the Territory and Licensor outside the Territory, and to Manufacture Product for Development and Commercialization by Company in the Territory and by Licensor outside the Territory.

 

4.2                               Development Support.

 

4.2.1                     Each Party shall make its Representatives who are knowledgeable regarding the Licensor Technology, the Product (including the properties and functions thereof), available to the other Party for scientific and technical explanations, advice and support that may reasonably be required by the other Party relating to the Development of the Product (the “Development Support”).  The Development Support shall be provided by each Party to the other Party free-of-charge after the Effective Date of this Agreement, provided that the amount of free-of charge Development Support provided by the Licensor to the Company shall be reasonable under the circumstances, and if any additional Development Support is needed, the Licensor is entitled to charge a service fee at the prevailing market rate.

 

4.2.2                     In the event Company wishes Licensor to recruit patients and participate in a Clinical Trial outside the Territory as part of a Company sponsored Clinical Trial, Company may so notify Licensor in writing and the Parties will negotiate in good faith with respect to Licensor’s recruitment of patients and participation in such Clinical trial and the compensation to Licensor for such activities.

 

4.2.3                     In the event Licensor wishes Company to recruit patients and participate in a Clinical Trial in the Territory as part of a Licensor sponsored Clinical Trial, Licensor may so notify Company in writing and the Parties will negotiate in good faith with respect to Company’s recruitment of patients and participation in such Clinical trial and the compensation to Company for such activities.

 

4.3                               Preparation of Development Plans.  The initial Development Plan for each Party in its respective Territory shall be prepared within 60 days after the Effective Date.  During the Term, each Party may prepare a revised Development Plan, which shall be prepared by each Party for its respective territory and submitted to the JAC for review at least twenty (20) days before the meeting of the JAC at which it will be considered.  Each Development Plan shall: (a) set forth the Development objectives, including Clinical Trials to be conducted within the respective territory and the other Development activities to be conducted, and the timelines applicable to such activities for the period covered by such Development Plan, and (b) be consistent with the other terms of this Agreement.  Each amendment, modification and/or update to a Party’s Development Plan shall be set forth in a written document prepared by such Party, and submitted for review to the JAC.

 

4.4                               Commercialization.

 

4.4.1                     Company Product Commercialization Plans.  Company will make a reasonable effort to prepare and provide to the JAC for its review a Product Commercialization Plan for each Product thirty (30) days prior to the date Company anticipates filing a MAA in the Territory.  Failure to provide such Product Commercialization Plan prior to filing a MAA shall not be a breach of this

 

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Agreement, but in any event within thirty (30) days of filing a MAA in the Territory with respect to each Product, Company shall provide such Product Commercialization Plan to the JAC.  The Company Product Commercialization Plan(s) shall be updated and reviewed at least annually.

 

4.4.2                     Licensor Product Commercialization Plans.  Licensor shall prepare and provide to the JAC for its review a Product Commercialization Plan for each such Product within thirty (30) days of filing a MAA outside the Territory with respect to each Product.  Failure to provide such Product Commercialization Plan prior to filing a MAA shall not be a breach of this Agreement, but in any event within thirty (30) days of filing a MAA outside the Territory with respect to each Product, Licensor shall provide such Product Commercialization Plan to the JAC. The Licensor Product Commercialization Plan shall be updated and reviewed at least annually.

 

4.4.3                     Company Responsibility for Commercialization of Products. Company shall have the sole right and responsibility, at its sole expense, for all aspects of the Commercialization of Products in accordance with the applicable Product Commercialization Plan, in the Field and in the Territory and shall have the sole right and responsibility, at its sole expense, for order fulfillment and distribution of Product and for booking all sales of Product in the Territory, including, without limitation, the conduct of: (a) all activities relating to the Manufacture and supply of Products for Commercialization in the Territory; and (b) all marketing, promotion, sales, distribution, import and export activities (including securing reimbursement, conducting sales and marketing activities and any post-marketing trials or post-marketing safety surveillance and maintaining databases) in the Territory.  Company and its Affiliates shall have the right, in their sole discretion, to appoint Distributors to distribute Products in the Territory. For purposes of this Section 4.4.3, the term Distributor shall mean a Third Party which warehouses and distributes a Product for which Company or an Affiliate or Sublicensee (i) holds the Commercialization Regulatory Approval and (ii) is responsible for marketing the Product, and shall not include any entity which holds Commercialization Regulatory Approval for the Product or is responsible for marketing the Product, unless such entity was granted a sublicense pursuant to Section 2.3 above.

 

4.4.4                     Licensor Responsibility for Commercialization of Products.  Licensor shall have the sole right and responsibility, at its sole expense, for all aspects of the Commercialization of Products in accordance with the applicable Product Commercialization Plan, in the Field and outside the Territory and shall have the sole right and responsibility, at its sole expense, for order fulfillment and distribution of Product and for booking all sales of Product outside the Territory, including, without limitation, the conduct of: (a) all activities relating to the Manufacture and supply of Products for Commercialization outside the Territory; and (b) all marketing, promotion, sales, distribution, import and export activities (including securing reimbursement, conducting sales and marketing activities and any post-marketing trials or post-marketing safety surveillance and maintaining databases) outside the Territory.

 

4.5                               Clinical and Commercial Manufacturing.

 

4.5.1                     Development Supply for the Development Program. Company shall have the right to Manufacture AR-101 and AR-301 and/or finished Products in or outside the Territory necessary for the conduct of the Development Program in the Territory.  In an effort to establish efficient Manufacturing for AR-101 and AR-301 and/or finished Products, the Parties agree to use Commercially Reasonable Efforts to coordinate the Manufacturing activities through the JAC in their respective territories, provided that each Party shall retain the right to Manufacture AR-101 and AR-301 and/or finished Products in quantities necessary for the Development Program in their respective territories. In the event that one Party agrees to supply the other Party with its requirements of AR-101 and AR-301 and/or finished Products in quantities necessary for the Development Program in their respective territories, then the transfer price for such AR-101 and AR-301 and/or Products for the conduct of the Development Program shall be negotiated in good faith by the Parties on an arm’s-length basis.

 

4.5.2                     Commercial Supply for Commercialization Plans. The same coordination efforts referred to in the second sentence of paragraph 4.5.1 above shall be undertaken by the Parties with respect to

 

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Manufacture of AR-101 and AR-301 and/or Products for Commercialization of Product in the Territory and outside the Territory, and the Parties shall discuss in good faith through the JAC the location of such Manufacture. In the event that one Party agrees to supply the other Party with its requirements of AR-101 and AR-301 and/or finished Products in quantities necessary to Commercialize the Product according to the Commercialization Plan applicable in their respective territories, then the transfer price shall be determined in the manner set forth in paragraph 4.5.1 above.

 

4.5.3                     Sole Right and Decision. Notwithstanding the foregoing, each Party shall have the sole right and decision making authority with respect to the Manufacture of Product in the Territory by Company and outside the Territory by Licensor.

 

4.6                               Diligence by Company.  Company shall use Commercially Reasonable Efforts to (a) Develop at least one Product, (b) Commercialize at least one Product in the Territory after receiving Commercialization Regulatory Approval, and (c) correct, prevent or eliminate any adverse condition or event relating to the safety or efficacy of the Product.  Company shall have the exclusive right to determine, in its sole discretion, the launch strategy for Product in the Field in the Territory, subject to its exercise of Commercially Reasonable Efforts and the availability of any necessary Third Party licenses or other rights.  Company shall be expected to contribute at least fifty patients to Licensor’s global clinical trial package for each of AR-101 and AR-301.  Activities by Company’s Affiliates and Sublicensees will be considered as Company’s activities under this Agreement for purposes of determining whether Company has complied with its obligation to use Commercially Reasonably Efforts.  Company shall be relieved of its diligence obligations under this Section starting from the date Company provides Licensor with a termination notice.

 

4.7                               Compliance.  Each Party shall perform its obligations under each Development Plan and Product Commercialization Plan in good scientific manner and in compliance in all material respects with all Laws.  For purposes of clarity, with respect to each activity performed under a Development Plan and/or Product Commercialization Plan that will or would reasonably be expected to be submitted to a Regulatory Authority in support of a Regulatory Filing or MAA, the Party performing such activity shall comply in all material respects with GMPs or Good Manufacture Practices, GLPs or Good Clinical Practices (or, if and as appropriate under the circumstances, International Conference on Harmonization (ICH) guidance or other comparable regulation and guidance of any Regulatory Authority in any country or region in the Territory).

 

4.8                               Cooperation and Coordination.  Company and Licensor shall cooperate in the performance of the Development Program and, subject to the terms of this Agreement and any confidentiality obligations to Third Parties, shall exchange such data, information and materials as is reasonably necessary for the other Party to perform its obligations under any Development Plan and Product Commercialization Plan. Both Parties will review all significant Regulatory Filings applicable to the Commercialization of a Product prior to submission by either Party to the applicable Regulatory Authorities with respect to the Commercialization of a Product, and will receive copies of all correspondence from Regulatory Authorities with respect to the Commercialization of a Product in a timely manner.  For clarity, nothing in this Section 4.8 shall reduce a Party’s sole right and responsibility to Commercialize Products in its respective territory.

 

4.9                               Right to Subcontract of Company.  Company may exercise any of its rights, or perform any of its obligations, under this Agreement (including any of the rights granted in Section 2.1) by subcontracting the exercise or performance of all or any portion of such rights and obligations on Company’s behalf to an Affiliate or a Third Party, including, but not limited to, distributors and contract manufacturers.  For avoidance of doubt, any Company-designated distributors and contract manufacturers under Section 4.11 shall not be considered as Sublicensees.  Any subcontract granted or entered into by Company as contemplated by this Section 4.9 of the exercise or performance of all or any portion of the rights or obligations that Company may have under this Agreement shall not relieve Company from any of its obligations under this Agreement.

 

4.10                        Trademarks.  As between Licensor and Company, Company shall have the sole authority to select trademarks for Product in the Field in the Territory and shall own all such trademarks. Notwithstanding the foregoing, Company and Licensor shall coordinate the selection of trademarks for similar Products in and outside the Territory for the benefit of successful commercialization.

 

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4.11                        Reporting.  Each Party shall, within plus or minus two (2) months of each anniversary of the Effective Date, provide the other Party with a written report summarizing in reasonable detail its Commercialization activities conducted during the prior Calendar Year with respect to the Commercialization of Product in the Territory by Company and with respect to the Commercialization of Product outside the Territory by Licensor. All information and reports provided to a Party pursuant to this Section 4.11 shall be without any commitment from a Party and shall be treated as Confidential Information of such Party. Notwithstanding the foregoing, each Party’s obligation to provide reports under this Section 4.11 shall expire upon the tenth anniversary of the First Commercial Sale of Product in the Territory for Company and outside the Territory for Licensor.

 

ARTICLE 5                           REGULATORY MATTERS

 

5.1                               Regulatory Filings.  Company and Licensor shall own and maintain all regulatory filings and Regulatory Approvals for Product, including all INDs and MAAs, in the Territory and outside the Territory, respectively.  Company shall be responsible for conducting Clinical Trials in the Territory, and shall design the Clinical Trials in the Territory to be consistent with Clinical Trials conducted by Licensor outside the Territory.  Company shall be expected to contribute at least fifty patients to Licensor’s global clinical trial package for each of AR-101 and AR-301.

 

5.2                               Communications with Authorities.  Company (or one of its Affiliates or Sublicensees) shall be primarily responsible, and , for communications with Regulatory Authorities in connection with the Development, Commercialization, and Manufacturing of Product in the Territory.  Company shall provide Licensor with reasonable opportunities to communicate with Regulatory Authorities in the Territory.  Following the Effective Date, Licensor shall not initiate, with respect to Product, any meetings or contact with Regulatory Authorities in the Territory without reasonable consultation with Company or Company’s prior consent .  To the extent Licensor receives any written or oral communication from any Regulatory Authority in the Territory relating to Product, Licensor shall (a) refer such Regulatory Authority to Company, and (b) as soon as reasonably practicable (but in any event within 14 days, notify Company and provide Company with a copy of any written communication received by Licensor or, if applicable, complete and accurate minutes of such oral communication.  At the request of Company, Licensor shall make available to Company, free of charge, a qualified representative who shall, together with the representatives of Company, participate in and contribute to meetings with the Regulatory Authorities in the Territory with respect to regulatory matters relating to the Licensor Technology. Company shall reimburse Licensor for all Out-of-Pocket Expenses incurred in such participation.

 

5.3                               Support in Regulatory Matters.  Each Party shall make its Representatives that are knowledgeable regarding the Licensor Technology, the Product available to the other Party for regulatory explanations, advice and on-site support, that may reasonably be required by the other Party relating to regulatory matters (including preparation and filing for any INDs and MAAs and obtaining and maintaining Marketing Authorizations) (the “Regulatory Support”).  The Regulatory Support shall be provided by each Party to the other Party free-of-charge during the Term. The Party receiving Regulatory Support shall reimburse the Party providing Regulatory Support for all Out-of-Pocket Expenses incurred in such activities.

 

5.4                               Adverse Event Reporting.  The Parties agree to comply with any and all Laws that are applicable as of the Effective Date and thereafter during the Term in connection with Product safety data collection and reporting.  If either Party has or receives any information regarding any Adverse Event, then such Party shall provide the other Party with all such information in English within such timelines which is reasonably expected to enable the other Party to comply with all Laws and relevant regulations and requirements.  Each Party shall report to the other Party any Adverse Event culminating in death or permanent disability of a patient or subject who is administered Product within one day after becoming aware of the Adverse Event.

 

5.5                               Recalls.  Company shall have the sole right to determine whether and how to implement a recall or other market withdrawal of Product in the Territory and shall notify Licensor promptly of any recall or other market withdrawal of Product in the Territory.  Licensor shall notify Company promptly of any recall or other market withdrawal of Product outside the Territory.

 

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5.6                               Pharmacovigilance Agreement.  Without limitation of Section 5.4, the Parties shall meet to commence good faith negotiations to establish a detailed pharmacovigilance agreement relating to the Product, which shall set forth standard operating procedures governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions/adverse events sufficient to permit each Party to comply with its regulatory and other legal obligations within applicable timeframes.

 

ARTICLE 6                           FINANCIAL PROVISIONS

 

No Further Payment. Licensor’s grant of the rights and licenses to Company pursuant to Section 2.1 and $1 million USD cash constitute Licensor’s total contribution to Company under the Joint Venture Contract.  Company has no current or future obligation to make any form of payment, including upfront payment, royalties, milestone payments, commercial event payments to Licensor for Licensor’s grant of the rights and licenses to Company pursuant to Section 2.1, except milestone and/or royalty obligations due to Development and Commercialization of Licensed Technology in the Territory to Third Parties that may arise from the preexisting agreements as set forth in Schedule 9.2.13.

 

ARTICLE 7                           INVENTIONS AND PATENTS

 

7.1                               Patent Ownership, Prosecution and Maintenance.

 

7.1.1                     Program IP.  Any Patent Rights and Know-How invented or developed through the use or practice of Licensor Technology pursuant to this Agreement, whether invented jointly between the Parties, or solely by Company (“Program Patents” and “Program Know-How”, respectively), shall be owned by the Licensor (“Program IP”).  Any Patent Rights and Know-How invented solely by a Party not through the use or practice of Licensor Technology during the Term shall be solely owned by such Party.

 

(a)                                 Company agrees to assign and hereby assigns all of Company’s rights, title and interest in and to any Program IP that is invented or developed by Company or its Affiliates or Sublicensees or its or their contractors to Licensor.  Company shall obtain from such Affiliates, Sublicensees and contractors equivalent present assignments of such Affiliates’, Sublicensees’ and contractors’ rights, title and interest in any Program IP and promptly assign the same to Licensor.

 

(b)                                 Licensor agrees to grant a license of Licensor’s rights, title and interest in and to any Program IP to Company in the same manner as in Section 2.1.

 

7.1.2                     Patent Coordinators.  Licensor and Company shall, by written notice to the other Party, each appoint a patent coordinator reasonably acceptable to the other Party (each, a “Patent Coordinator”) to serve as such Party’s primary liaison with the other Party on matters relating to patent filing, prosecution, maintenance and enforcement.  Each Party may replace its Patent Coordinator at any time by notice in writing to the other Party.

 

7.1.3                     Inventorship.  Inventorship shall be determined under PRC patent law.  The Patent Coordinators shall initially determine inventorship of all inventions made in the Development and Commercialization of AR-101 and AR-301 and Products.  In case of a dispute between the Patent Coordinators over inventorship, such dispute shall be resolved according to PRC patent law.

 

7.1.4                     Licensor Patents and Program Patents. Licensor shall have the first right, and the obligation, to file, prosecute and maintain Licensor Patents (in Licensor’s name) and Program Patents (in both Parties’ names) in and outside the Territory, including the country/regions in Schedule 7.1.4.  Licensor shall bear all costs and expenses of filing, prosecuting and maintaining Licensor Patents and Program Patents in and outside the Territory except that Company shall reimburse 

 

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Licensor the costs and expenses of filing, prosecuting and maintaining joint Patents in the Territory.  Licensor shall keep Company informed of the status of the filing and prosecution of Licensor Patents and Program Patents or related proceedings (e.g. interferences, oppositions,  reexaminations, reissues, revocations or nullifications) in and outside the Territory.  At Licensor’s request, Company will provide Licensor with reasonable free-of-charge assistance in prosecuting Licensor Patents and Program Patents to the extent possible, including providing such data in Company’s Control that is, in Licensor’s reasonable judgment, needed to support the prosecution of a Licensor Patent and Program Patents in and outside the Territory.  If Licensor elects not to file or to continue to prosecute or maintain a Licensor Patent or Program Patent in the Territory, it shall provide Company with written notification. In such case Company shall have the right, at its own cost and expense, to pursue the filing or support the continued prosecution or maintenance of such Licensor Patent or Joint Patent solely in the Territory.

 

7.1.5                     Company Patents. Company shall have the first right, and the obligation, to file, prosecute and maintain Company Patents (in Company’s name) in and outside the Territory. Company shall bear all costs and expenses of filing, prosecuting and maintaining Company Patents in and outside the Territory.  Company shall keep Licensor informed of the status of the filing and prosecution of Company Patents or related proceedings (e.g. interferences, oppositions, reexaminations, reissues, revocations or nullifications) in and outside the Territory.  At Company’s request, Licensor will provide Company with reasonable free-of-charge assistance in prosecuting Company Patents to the extent possible, including providing such data in Licensor’s Control that is, in Company’s reasonable judgment, needed to support the prosecution of a Company Patent in and outside the Territory.  If Company elects not to file or to continue to prosecute or maintain a Company Patent in and outside the Territory, then it shall notify Licensor in writing at least three (3) months before any final deadline applicable to the filing, prosecution or maintenance of such Company Patent, as the case may be, or any other date by which an action must be taken to establish or preserve such Company Patent in and outside the Territory.  In such case, Licensor shall have the right, at its own cost and expense, to pursue the filing or support the continued prosecution or maintenance of such Company Patent in and outside the Territory.

 

7.1.6                     Patent Term Extension and Supplemental Protection Certificates.  When it is commercially reasonable, Company shall be responsible for obtaining patent term extensions available for in the Territory and for obtaining Supplemental Protection Certificates effectively extending a patent.  Licensor shall provide Company free-of-charge with all relevant information, documentation and assistance in this respect as may reasonably be requested by Company.  Any such assistance, supply of information and consultation shall be provided promptly.  In the event that any election with respect to obtaining patent term extensions or Supplemental Protection Certificates is to be made in the Territory, Company shall have the right to make such elections after reasonable consultation with Licensor, and Licensor shall abide by all such elections.

 

7.1.7                     Information and Cooperation.  Each Party that has responsibility for filing and prosecuting any Patent Rights under this Section 7.1 (a “Filing Party”) shall (a) regularly provide the other Party (the “Non-Filing Party”) with copies of all patent applications filed hereunder and other material submissions and correspondence with the patent offices, in sufficient time to allow for review and comment by the Non-Filing Party; and (b) provide the Non-Filing Party and its patent counsel with an opportunity to consult with the Filing Party and its patent counsel regarding the filing and contents of any such application, amendment, submission or response.  The advice and suggestions of the Non-Filing Party and its patent counsel shall be taken into consideration in good faith by such Filing Party and its patent counsel in connection with such filing.  Each Filing Party shall pursue in good faith all reasonable claims and take such other reasonable actions, as may be requested by the Non-Filing Party in the prosecution of any Patent Rights covering any Program Technology under this Section 7.1; provided, however, if the Filing Party incurs any additional expense as a result of any such request, the Non-Filing Party shall be responsible for the cost and expenses of pursuing any such additional claim or taking such other actions.

 

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7.2                               Enforcement of Patents and Know-How.

 

7.2.1                     Notice.  If either Party believes that an infringement, unauthorized use, misappropriation or ownership claim or threatened infringement or other such activity by a Third Party has occurred with respect to any Licensor Technology or Program IP in the Territory, or if a Third Party claims that any Licensor Patent or Program Patent is invalid or unenforceable in the Territory, the Party possessing such knowledge or belief shall notify the other Party and provide it with details of such infringement or claim that are known by such Party.

 

7.2.2                     Right to Bring an Action.  Licensor shall have the exclusive right to attempt to resolve any infringement or claim in the Territory, including by filing an infringement suit, defending against such claim or taking other similar action, with respect to a Licensor Patent or Program Patent (each, an “Action”) and to compromise or settle any such infringement or claim.  At Licensor’s request, Company shall promptly provide Licensor with all relevant documentation (as may be requested by Licensor) evidencing that Licensor is validly empowered by Company to take such an Action.  Company is obligated to join Licensor in such Action, or bring such Action on Licensor’s behalf upon Licensor’s request, in each case at Licensor’s expense, if Licensor determines that it is necessary to demonstrate “standing to sue”.   Company shall cooperate with Licensor in any such Action.  If Licensor does not intend to prosecute or defend an Action, Licensor shall promptly inform Company.

 

7.2.3                     Costs of an Action.  The Party taking an Action under Section 7.2.2 shall pay all costs associated with such Action, other than the expenses of the other Party if the other Party elects to join such Action (as provided in the last sentence of this paragraph).  Each Party shall have the right to join an Action relating to a Licensor Patent or Program Patent, at its own expense.

 

7.2.4                     Settlement.  Neither Party shall settle or otherwise compromise any Action by admitting that any Licensor Patent or Program Patent is invalid or unenforceable in the Territory without the other Party’s prior written consent, and, in the case of Company, Company may not settle or otherwise compromise an Action in a way that adversely affects or would be reasonably expected to adversely affect Licensor’s rights or benefits hereunder, without Licensor’s prior written consent.

 

7.2.5                     Reasonable Assistance.  The Party not enforcing or defending Licensor Patents or Program Patent shall provide reasonable assistance to the other Party, including providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any reasonable Out-of-Pocket Expenses incurred on an on-going basis by the non-enforcing or non-defending Party in providing such assistance.

 

7.2.6                     Distribution of Amounts Recovered.  Any amounts recovered by the Party taking an Action pursuant to this Section 7.2, whether by settlement or judgment, shall be allocated in the following order: (i) to reimburse the Party taking such Action for any costs incurred,  (ii) to reimburse the Party not taking such Action for its costs incurred in such Action, if it joins such Action as provided in the last sentence of Section 7.2.3; and (iii) the remaining amount of such recovery shall be allocated to Licensor.

 

7.3                               Third Party Actions Claiming Infringement.

 

7.3.1                     Notice.  If a Party becomes aware of any Third Party Action, such Party shall promptly notify the other Party of all details regarding such claim or action that is reasonably available to such Party.

 

7.3.2                     Right to Defend.  Licensor shall have the right and obligation, at its sole expense, to defend a Third Party Action in the Territory described in Section 7.3.1 and to compromise or settle such Third Party Action.  If Licensor declines or fails to assert its intention to defend such Third Party Action within 30 days of after sending (in the event that Company is the notifying Party) or receipt (in the event that Licensor is the notifying Party) of notice under Section 7.3.1, then Company shall have the right to defend such Third Party Action.  The Party defending such Third Party Action shall have the sole and exclusive right to select counsel for such Third Party Action.

 

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7.3.3                     Consultation.  The Party defending a Third Party Action pursuant to Section 7.3.2 shall be the “Controlling Party.”  The Controlling Party shall consult with the non-Controlling Party on all material aspects of the defense.  The non-Controlling Party shall have a reasonable opportunity for meaningful participation in decision-making and formulation of defense strategy.  The Parties shall reasonably cooperate with each other in all such actions or proceedings.  The non-Controlling Party will be entitled to be represented by independent counsel of its own choice at its own expense.

 

7.3.4                     Appeal.  In the event that a judgment in a Third Party Action is entered against the Controlling Party and an appeal is available, the Controlling Party shall have the first right, but not the obligation, to file such appeal.  In the event the Controlling Party does not desire to file such an appeal, it will promptly, in a reasonable time period (i.e., with sufficient time for the non-Controlling Party to take whatever action may be necessary) prior to the date on which such right to appeal will lapse or otherwise diminish, permit the non-Controlling Party to pursue such appeal at such non-Controlling Party’s own cost and expense. If Law requires the other Party’s involvement in an appeal, the other Party shall be a nominal party of the appeal and shall provide reasonable cooperation to such Party at such Party’s expense.

 

7.3.5                     Costs of an Action.  The Controlling Party shall pay all costs associated with such Third Party Action other than the expenses of the other Party if the other Party elects to join such Third Party Action (as provided in the last sentence of this paragraph). Each Party shall have the right to join a Third Party Action defended by the other Party, at its own expense.

 

7.3.6                     No Settlement Without Consent.  Neither Party shall settle or otherwise compromise any Third Party Action by admitting that any Licensor Patent is invalid or unenforceable without the other Party’s prior written consent, and, in the case of Company, Company may not settle or otherwise compromise a Third Party Action in a way that adversely affects or would be reasonably expected to adversely affect Licensor’s rights and benefits hereunder, without Licensor’s prior written consent.

 

ARTICLE 8                           CONFIDENTIALITY

 

8.1                               Confidentiality Obligations.  Each Party agrees that, for the Term and thereafter, such Party shall, and shall ensure that its Representatives, hold in confidence all Confidential Information disclosed to it by the other Party pursuant to this Agreement, unless the recipient of the Confidential Information demonstrates by written evidence that such information: (i) is or has become generally available to the public other than as a result of disclosure by the recipient; (ii) is already known by or in the possession of the recipient at the time of disclosure by the disclosing Party; (iii) is independently developed by recipient without use of or reference to the disclosing Party’s Confidential Information; or (iv) is obtained by recipient from a Third Party that has not breached any obligations of confidentiality.

 

The recipient shall not disclose any of the Confidential Information, except to Representatives of the recipient who need to know the Confidential Information for the purpose of performing the recipient’s obligations, or exercise its rights, under this Agreement and who will, prior to their access to such Confidential Information, be bound by written obligations of non-use and non-disclosure substantially similar to those set forth herein.  Each Party agrees to use, and to cause its Affiliates to use, reasonable efforts to enforce such obligations and to prohibit Representatives from using such Confidential Information except as expressly permitted hereunder. Each Party shall be liable to the other for any disclosure or use of the Confidential Information by such Representatives.  The recipient shall (i) protect Confidential Information using not less than the same care with which it treats its own confidential information, but at all times shall use at least reasonable care and (ii) not use, and cause its Affiliates and Representatives not to use, any Confidential Information of the other Party except as expressly permitted hereunder.  Each Party shall: (a) implement and maintain appropriate security measures to prevent unauthorized access to, or disclosure of, the other Party’s Confidential Information; (b) promptly notify the other Party of any unauthorized access or disclosure of such other Party’s Confidential Information; and (c) cooperate with such other Party in the investigation and remediation of any such unauthorized access or disclosure.

 

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8.2                               Use.  Notwithstanding Section 8.1, a Party may use the Confidential Information of the other Party for the purpose of performing its obligations, or exercising its rights, under this Agreement, including for purposes of: (i) filing or prosecuting patent applications; (ii) prosecuting or defending litigation; (iii) conducting pre-clinical studies or Clinical Trials pursuant to this Agreement; (iv) seeking or maintaining Regulatory Approval for Product; (v) complying with Law, including securities Law and the rules of any securities exchange or market on which a Party’s securities are listed or traded; (vi) disclosure to such other Party’s legal and financial advisors; (vii) in connection with an actual or potential (a) permitted sublicense of such other Party’s rights hereunder, (b) debt, equity or other financing of such other Party or (c) merger, acquisition, consolidation, share exchange or other similar transaction involving such Party and any Third Party; or (viii) for any other purpose with the other Party’s written consent, not to be unreasonably withheld.

 

8.3                               Notice. In making any disclosures set forth in clauses (i) through (viii) in Section 8.2, the disclosing Party shall, where reasonably practicable, give such advance notice to the other Party of such disclosure requirement as is reasonable under the circumstances and will use its reasonable efforts to cooperate with the other Party in order to secure confidential treatment of such Confidential Information required to be disclosed.  In addition, in connection with any permitted filing by either Party of this Agreement with any Governmental Body, the filing Party shall endeavor to obtain confidential treatment of economic, trade secret information and such other information as may be requested by the other Party, and shall provide the other Party with the proposed confidential treatment request with reasonable time for such other Party to provide comments, and shall include in such confidential treatment request all reasonable comments of the other Party.

 

8.4                               Required Disclosure.  The recipient may disclose the Confidential Information to the extent required by Law or court order; provided, however, that the recipient promptly provides to the disclosing party prior written notice of such disclosure and provides reasonable assistance in obtaining an order or other remedy protecting the Confidential Information from public disclosure.

 

8.5                               Return of Property.  All Licensor Technology, including any cell line and physical media embodying Confidential Information of the Licensor, is and shall remain the property of the Licensor. Upon the termination of this Agreement, Company shall return all cell lines, physical media embodying any Confidential information of the Licensor, and other physical property embodying Licensor Technology to the Licensor, regardless of how stored or maintained and including all originals, copies, compilations, cell line clones and derivatives.

 

ARTICLE 9                           REPRESENTATIONS, WARRANTIES AND COVENANTS

 

9.1                               Representations and Warranties.  Each Party represents and warrants to the other Party that, as of the Effective Date:

 

9.1.1                     such Party is duly organized and validly existing under the Laws of the jurisdiction of its incorporation or organization;

 

9.1.2                     such Party has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement;

 

9.1.3                     this Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable against such Party in accordance with the terms of this Agreement, except as enforcement may be limited by applicable bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles.  The execution, delivery and performance of this Agreement by such Party does not conflict with, breach or create in any Third Party the right to accelerate, terminate or modify any agreement or instrument to which such Party is a party or by which such Party is bound, and does not violate any Law of any Governmental Body having authority over such Party; and

 

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9.1.4                     such Party has all right, power and authority to enter into this Agreement, to perform its obligations under this Agreement.

 

9.2                               Additional Representations and Warranties of Licensor.  Licensor warrants to Company that, as of the Effective Date:

 

9.2.1                     no consent by any Third Party or Governmental Body is required with respect to the execution and delivery of this Agreement by Licensor or the consummation by Licensor of the transactions contemplated hereby.

 

9.2.2                     to the knowledge of Licensor, no claims have been asserted in writing, to the effect that the manufacture, use or sale of AR-101 and AR-301 infringes any issued Patent Right of any Third Party;

 

9.2.3                     the Licensor Patents are subsisting and to the knowledge of Licensor, are not the subject of any litigation procedure, discovery process, interference, reissue, reexamination, opposition, appeal proceedings or any other legal dispute;

 

9.2.4                     the Licensor Patents constitute all material Patent Rights owned or Controlled by Licensor as of the Effective Date that Cover the research, Development, Manufacture, use or Commercialization of the Product, are necessary for, the research, Development, Manufacture, use or Commercialization of the Product;

 

9.2.5                     the Licensor Know-How constitutes all material Know-How owned or Controlled by Licensor as of the Effective Date that is directly related to, and are necessary for, the research, Development, Manufacture, use or Commercialization of the Product;

 

9.2.6                     the Licensor Materials constitute all key materials owned or Controlled by Licensor as of the Effective Date that is directly related to, and are necessary for, the research, Development, Manufacture, use or Commercialization of the Product;

 

9.2.7                     Licensor has not licensed to a Third Party the right to develop a Competing Product within the Territory;

 

9.2.8                     to the knowledge of Licensor, no Third Party has filed or threatened in writing to file any lawsuit or other action alleging that any Licensor Patent is invalid or unenforceable;

 

9.2.9                     it has the full right to provide the Licensor Technology to Company pursuant to this Agreement, and to the knowledge of Licensor, neither Company’s use of the Licensor Material as contemplated by this Agreement, nor such transfer, will violate any agreement with any Third Party;

 

9.2.10              to the knowledge of Licensor, all Representatives of Licensor who have performed any activities on its behalf in connection with research regarding the Product have assigned to Licensor the whole of their rights in any intellectual property made, discovered or developed by them as a result of such research;

 

9.2.11              the Licensor Technology is free and clear of any liens, charges, encumbrances or rights of others to possession or use, in each case that were created by an action of Licensor, other than those liens, charges, encumbrances or rights of others to possession or use that do not individually or in the aggregate materially detract from the value or use of the Licensor Technology;

 

9.2.12              except with respect to rights granted to Company in the Territory, Licensor has not previously licensed, assigned, transferred, or otherwise conveyed any right, title or interest in and to the Licensor Technology to any Third Party in the Territory, including any rights with respect to any Product;

 

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9.2.13              there are no Third Party Agreements related to AR-101 and AR-301 except those in Schedule 9.2.13;

 

9.2.14              Licensor (and its Affiliates) has not employed or otherwise used in any capacity, and will not employ or otherwise use in any capacity, the services of any Person debarred under United States law, including under Section 21 USC 335a or any foreign equivalent thereof, with respect to the Product; and

 

9.2.15              to the knowledge of Licensor, all research and development related to the Product prior to the Effective Date has been conducted in accordance with all Laws in all material aspects.

 

Except as expressly set forth in this Section 9, Licensor does not make any representations, warranties or guarantee, whether expressed or implied, with respect to the Licensor Technology or other services provided by Licensor under this Agreement.

 

9.3                               Licensor Covenants.  Licensor covenants to Company that:

 

9.3.1                     Licensor shall fulfill all of its obligations in all material aspects, including but not limited to its payment obligations, under any Third Party Agreement set forth in Schedule 9.2.13 except milestone and/or royalty obligations due to Development and Commercialization of Licensed Technology in the Territory to Third Parties that may arise from preexisting agreements set forth in Schedule 9.2.13;

 

9.3.2                     Licensor shall cause the sublicense of technology in the Territory to the Company within 3 months after the Effective Date of this Agreement as to the following preexisting license agreements;

 

9.3.3                     Licensor shall not amend or waive, or take any action or omit to taking any action that would alter, any of Licensor’s rights under any Third Party License Agreement in any manner that adversely affects, or would reasonably be expected to adversely affect, Company’s rights and benefits under this Agreement.  Licensor shall promptly notify Company of any default under, termination or amendment of, Third Party License Agreement.

 

9.4                               Company Covenants. Company covenants to Licensor that it will not during the Term of this Agreement or thereafter, either contest or challenge the ownership by Licensor of the Licensor Technology, nor will it actively or passively aid any other person or third party in infringing or in challenging or contesting the ownership by Licensor of the Licensor Technology.

 

ARTICLE 10                    INDEMNIFICATION AND INSURANCE

 

10.1                        Indemnification by Company.  Company shall indemnify, defend and hold Licensor and its Affiliates and each of their respective employees, officers, directors and agents and their respective heirs, successors and assigns (the “Licensor Indemnitees”) harmless from and against any and all liability, damage, loss, cost or expense (including reasonable attorneys’ fees and expenses of litigation) to the extent arising out of Third Party claims, actions, demands, suits or judgments related to: (a) Company’s gross negligence or willful misconduct; (b) Company’s failure to perform its obligations under this Agreement; (c) breach by Company of its representations, warranties or covenants set forth in Article 9, or (d) the Development of any Product or the Commercialization (including, without limitation, the use by any Person) of any Product by Company or any of its Affiliates, Sublicensees, distributors or agents outside the Territory; provided, however, that Company’s obligations pursuant to this Section 10.1 shall not apply (i) to the extent such claims or suits result from the negligence or willful misconduct of any of the Licensor Indemnitees, (ii) with respect to claims or suits arising out of breach by Licensor of its representations, warranties or covenants set forth in Article 9.

 

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10.2                        Indemnification by Licensor.  Licensor shall indemnify, defend and hold Company and its Affiliates and each of their respective agents, employees, officers and directors and their respective heirs, successors and assigns (“Company Indemnitees”) harmless from and against any and all liability, damage, loss, cost or expense (including reasonable attorney’s fees and expenses of litigation) to the extent arising out of Third Party claims, actions, demands, suits or judgments related to: (a) Licensor’s gross negligence or willful misconduct; (b) Licensor’s failure to perform its obligations under this Agreement; (c)  breach by Licensor of its representations, warranties or covenants set forth in Article 9; or (d) the Development of any Product or the Commercialization (including, without limitation, the use by any Person) of any Product by Licensor or any of its Affiliates, Sublicensees, distributors or agents in the Territory; provided, however, that Licensor’s obligations pursuant to this Section 10.2 shall not apply (i) to the extent that such claims or suits result from the negligence or willful misconduct of any of Company Indemnitees, (ii) with respect to claims or suits arising out of breach by Company of its warranties set forth in Article 9, and (iii) with respect to claims or suits arising out of the use of the Products in the Territory.

 

10.3                        Certain Liabilities.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY’S LIABILITY IS LIMITED WITH RESPECT TO STATUTORY LIABILITY AS PRESCRIBED FOR BY THE MANDATORY PROVISIONS OF THE PRC LAWS.

 

10.4                        No Consequential Damages.  EXCEPT WITH RESPECT TO EACH PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.1 OR SECTION 10.2 FOR PAYMENTS TO THIRD PARTIES, AS APPLICABLE, AND SUBJECT ALWAYS TO SECTION 10.3 (CERTAIN LIABILITIES), TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFITS, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREIN OR ANY BREACH HEREOF.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS AGREEMENT SHALL LIMIT EITHER PARTY FROM SEEKING OR OBTAINING ANY REMEDY AVAILABLE UNDER LAW FOR ANY BREACH BY THE OTHER PARTY OF ITS CONFIDENTIALITY AND NON-USE OBLIGATIONS UNDER ARTICLE 8.

 

10.5                        Notification of Claims; Conditions to Indemnification Obligations.  As a condition to a Party’s right to receive indemnification under this Article 10, it shall: (a) promptly notify the other Party as soon as it becomes aware of a claim or suit for which indemnification may be sought pursuant hereto; (b) cooperate, and cause the individual indemnitees to cooperate, with the indemnifying Party in the defense, settlement or compromise of such claim or suit; and (c) permit the indemnifying Party to control the defense, settlement or compromise of such claim or suit, including the right to select defense counsel.  In no event, however, may the indemnifying Party compromise or settle any claim or suit in a manner which admits fault or negligence on the part of the indemnified Party or any indemnitee without the prior written consent of the indemnified Party.  Each Party shall reasonably cooperate with the other Party and its counsel in the course of the defense of any such suit, claim or demand, such cooperation to include without limitation using reasonable efforts to provide or make available documents, information and witnesses.  The indemnifying Party shall have no liability under this Article 10 with respect to claims or suits settled or compromised without its prior written consent.

 

10.6                        Insurance.  During the Term, each Party shall obtain and maintain, at its sole cost and expense, insurance (including any self-insured arrangements) in types and amounts that are reasonable and customary in the pharmaceutical and biotechnology industry for companies engaged in comparable activities.  It is understood and agreed that this insurance shall not be construed to limit either Party’s liability with respect to its indemnification obligations hereunder.  Each Party will, except to the extent self-insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this Section 10.6.

 

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ARTICLE 11                    TERM AND TERMINATION

 

11.1                        Term and Expiration.  The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless earlier terminated as provided in this Article 11, shall continue in full force and effect until the Joint Venture Contract expires.

 

11.2                        Termination of the Agreement.  At any time during the Term, Company may, at its convenience, terminate this Agreement in its entirety with ninety (90) days’ prior written notice to Licensor. Licensor may terminate this Agreement in its entirety with ninety (90) days’ prior written notice to Company in the event that Company has not complied with its obligation to use Commercially Reasonably Efforts under Section 4.6 (“Breach of Commercially Reasonable Efforts Event”) and the breach has not been remedied at the end of sixty (60) day period as set forth in the breach notice. Licensor may also immediately terminate this Agreement in its entirety in the event that Hepalink does not make the additional equity investment in the Company of no less than USD $9,000,000 in accordance with Section 5.4 of the Joint Venture Contract (“Breach of Future Financing Obligation Event”), that the Company materially breached its confidentiality obligations under Section 8.1 (“Breach of Confidentiality Obligation Event”) and the breach has not been remedied at the end of sixty (60) day period as set forth in the breach notice, or a Change of Control of the Company (“Company Change of Control Event”).

 

11.3                        Effects of Termination.

 

11.3.1              Survival.

 

(a)                                 Notwithstanding the expiration or termination of this Agreement, the following provisions shall survive the expiration or termination of this Agreement:  Article 1 (Definitions), Article 8 (Confidentiality), Article 10 (Indemnification and Insurance), Article 11 (Term and Termination), Article 12 (Dispute Resolution), and Article 13 (Miscellaneous).

 

(b)                                 Expiration or termination of this Agreement shall not relieve the Parties of any liability that accrued hereunder prior to the effective date of such termination.

 

11.3.2              Licenses, Contracts, Regulatory Matters and Other Obligations.  Upon termination of this Agreement, each Party shall promptly return all Confidential Information and proprietary materials of the other Party that are not subject to a continuing license hereunder; provided, that, each Party may retain one copy of the Confidential Information of the other Party in its archives solely for the purpose of establishing the contents thereof and ensuring compliance with its obligations hereunder. Documents and copies of Confidential Information which cannot be returned physically shall be completely destroyed and erased from any computer system.

 

11.3.3              Right of First Refusal.  In addition to the foregoing, in the event of Breach of Commercially Reasonable Efforts Event, Breach of Future Financing Obligation Event, Breach of Confidentiality Obligation Event, or Company Change of Control Event, Licensor shall, to the extent allowed by Law, have a right of first refusal to purchase all of Company’s interest in the Product and the Company Technology in the Territory (the “Right of First Refusal”).  The Right of First Refusal shall operate as follows:

 

(i)                                     Licensor shall promptly send to Company a reasonably detailed written notification of any Breach of Commercially Reasonable Efforts Event, Breach of Future Financing Obligation Event, Breach of Confidentiality Obligation Event, or Company Change of Control Event.

 

(ii)                                  Company shall promptly send to Licensor a written notification of any Third Party offer made for the Product or Company Technology in the Territory.  Licensor shall have a Right of First Refusal for a period of up to sixty (60) days after Licensor receives such notice (such period, the “Right of First Refusal Notice Period”). In the event Licensor exercises its Right of First Refusal, the terms of the Third Party offer shall become binding upon Company and Licensor.  For the avoidance of doubt, Company shall not enter into any agreement with a Third Party relating to Company’s interest in Products or Company Technology in the Territory during the Right of First Refusal Notice Period.

 

24

 

11.4                        Continuing Rights in Case of Licensor Bankruptcy or Insolvency; Right of First Refusal.

 

(a)                                 Continuing Rights.  The Parties agree that, in the event of a Licensor Bankruptcy Event, Company shall continue to be entitled to rights granted under Section 2.1 of this Agreement to Licensor Technology and all embodiments thereof, which, if not already in Company’s possession, shall be promptly delivered to it (a) following any such commencement of a bankruptcy proceeding upon Company’s written request therefor, unless Licensor elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under clause (a), following the rejection of this Agreement by Licensor  upon written request therefor by Company.

 

11.5                        Continuing Rights in Case of Company Bankruptcy or Insolvency; Right of First Refusal.

 

(a)                                 Continuing Rights.  The Parties agree that, in the event of a Company Bankruptcy Event, Licensor shall continue to be entitled to rights granted under section 2.2 of this Agreement to Company Technology and all embodiments thereof, which, if not already in Licensor’s possession, shall be promptly delivered to it (a) following any such commencement of a bankruptcy proceeding upon Licensor’s written request therefor, unless Company elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under clause (a), following the rejection of this Agreement by Company upon written request therefor by Licensor.

 

(b)                                 Right of First Refusal.  In addition to the foregoing, in the event of a Company Bankruptcy Event, Licensor shall, to the extent allowed by Law, have a right of first refusal to purchase all of Company’s interest in the Product and the Company Technology in the Territory (the “Right of First Refusal”).  The Right of First Refusal shall operate as follows:

 

(i)                                     Company (or other authorized representative of Company, including a bankruptcy trustee) shall promptly send to Licensor a reasonably detailed written notification of any Company Bankruptcy Event.

 

(ii)                                  Company (or other authorized representative of Company, including a bankruptcy trustee) shall promptly send to Licensor a written notification of any Third Party offer made for the Product or Company Technology in the Territory.  Licensor shall have a Right of First Refusal for a period of up to sixty (60) days after Licensor receives such notice (such period, the “Right of First Refusal Notice Period”). In the event Licensor exercises its Right of First Refusal, the terms of the Third Party offer shall become binding upon Company and Licensor.  For the avoidance of doubt, Company shall not enter into any agreement with a Third Party relating to Company’s interest in Products or Company Technology in the Territory during the Right of First Refusal Notice Period.

 

11.6                        Other Remedies.  Termination of this Agreement for any reason shall not release either Party from any liability or obligation that already has accrued prior to such termination.  Termination of this Agreement for any reason shall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect or limit, any rights or remedies that otherwise may be available at Law or in equity.

 

ARTICLE 12                    DISPUTE RESOLUTION

 

12.1                        Disputes.  The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations hereunder.  It is the objective of the Parties to establish under this Article 12 procedures to facilitate the resolution of disputes arising under this Agreement (other than any disputes relating to matters for which under this Agreement Company or Licensor has sole decision-making authority and/or discretion (each, a “Non-Escalable Dispute”), in which case, such matter shall be determined by Company or Licensor, as the case may be, and shall not be part of the dispute resolution procedure set forth in this Article 12) in an expedient manner by mutual cooperation and without 

 

25

 

resort to litigation.  In the event that the Parties are unable to resolve such dispute through diligent review and deliberation by the Senior Executives within thirty (30) days from the day that a Party had designated  the issue as a dispute in written notice to the other Party, then either Party shall have the right to escalate such matter to the Executive Officers as set forth in Section 12.2.

 

12.2                        Escalation to Executive Officers.  Either Party may, by written notice to the other Party, request that a dispute (other than a Non-Escalable Dispute) that remains unresolved by the Senior Executives for a period of thirty (30) days as set forth in Section 12.1 arising between the Parties in connection with this Agreement, or a dispute relating to material breach, be resolved by the Executive Officers, within fifteen (15) days after referral of such dispute to them.  If the Executive Officers cannot resolve such dispute within fifteen (15) days after referral of such dispute to them, then, at any time after such fifteen (15) day period, either Party may proceed to enforce any and all of its rights with respect to such dispute.

 

12.3                        Full Arbitration.  If the Parties are unable to resolve the dispute following the procedure set forth in Section 12.2, then the dispute for arbitration shall be referred to and finally resolved by arbitration in the following manner:

 

(a)                                 dispute shall be settled by arbitration in Hong Kong by the Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the Hong Kong International Arbitration Centre Administered Arbitration Rules (the “HKIAC Rules”) in force when the Arbitration Notice is submitted.  There shall be three (3) arbitrators.

 

(b)                                 Each Party shall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator within ten (10) days of their appointment.  If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the HKIAC.

 

(c)                                  No arbitrator shall have any past or present family, business or other relationship with the Parties or any Affiliate, director or officer thereof, unless following full disclosure of all such relationships, the Parties agree in writing to waive such requirement with respect to an individual in connection with any dispute.

 

(d)                                 No discovery other than an exchange of relevant documents may occur in any arbitration commenced under the provisions of this Article 12.  The Parties agree to act in good faith to promptly exchange relevant documents.

 

(e)                                  The arbitral proceedings shall be conducted in Chinese. A Party may request English translation and each Party bears half of cost.

 

(f)                                   To the extent that the HKIAC Rules are in conflict with the provisions of this Section 12.3, including the provisions concerning the appointment of the arbitrator, the provisions of this Section 12.3 shall prevail.

 

(g)                                  The award of the arbitral tribunal shall be final and binding upon the Parties a party thereto, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award.

 

(h)                                 Any Party that is a party to the dispute shall be entitled to seek preliminary injunctive relief, if possible, from any court of competent jurisdiction pending the constitution of the arbitral tribunal.

 

(i)                                     The Parties will each pay fifty percent (50%) of the initial compensation to be paid to the arbitrator in any such arbitration and fifty percent (50%) of the costs of transcripts and other normal and regular expenses of the arbitration proceedings; provided, however, that: (i) the prevailing Party in any arbitration will be entitled to an award of attorneys’ fees and costs; and (ii) all costs of arbitration, other than those provided for above, will be paid by the losing Party, and the arbitrator will be authorized to determine the identity of the prevailing Party and the losing Party.

 

(j)                                    The panel of the arbitrators chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or any other provisions contained in this Agreement.

 

26

 

ARTICLE 13                    MISCELLANEOUS PROVISIONS

 

13.1                        Relationship of the Parties.  The Parties hereto understand and agree that the Collaboration is limited to the activities, rights and obligations as set forth in this Agreement.  Nothing in this Agreement shall be construed or shall be deemed, for financial, tax, legal or other purposes (a) to create or imply a general partnership between the Parties, (b) to make either Party the agent of the other for any purpose, (c) to alter, amend, supersede or vitiate any other arrangements between the Parties with respect to any subject matters not covered hereunder, (d) to give either Party the right to bind the other, (e) to create any duties or obligations between the Parties except as expressly set forth herein, or (f) to grant any direct or implied licenses or any other right other than as expressly set forth herein.

 

13.2                        Assignment.

 

13.2.1              Assignment and Successors. Neither this Agreement nor any obligation of a Party hereunder may be assigned by either Party, except that upon the consent of the other which shall not be unreasonably withheld, each Party may assign this Agreement and the rights, obligations and interests of such Party, in whole, but not in part, to any purchaser of all of its assets or all of its assets to which this Agreement relates or shares representing a majority of its common stock voting rights or to any successor corporation resulting from any merger, consolidation, share exchange or other similar transaction.

 

13.2.2              Continuing Obligations.  No assignment under this Section 13.2 shall relieve the assigning Party of any of its responsibilities or obligations hereunder accruing prior to such assignment and, as a condition of such assignment, the assignee shall agree in writing to be bound by all obligations of the assigning Party hereunder.  This Agreement shall be binding upon the successors and permitted assigns of the Parties.

 

13.2.3              Void Assignments.  Any assignment not in accordance with this Section 13.2 shall be void.

 

13.2.4              Assignment of Licensor Technology.  Licensor shall not assign or transfer any Licensor Technology to any of its Affiliates or any Third Party without the prior written consent of Company, unless the assignee agrees in writing that such Licensor Technology shall be subject to this Agreement.

 

13.2.5              Assignment of Company Technology.  Company shall not assign or transfer any Company Technology to any of its Affiliates or any Third Party without the prior written consent of Licensor, unless the assignee agrees in writing that such Company Technology shall be subject to this Agreement.

 

13.3                        Performance and Exercise by Affiliates.  Either Party shall have the right to have any of its obligations hereunder performed, or its rights hereunder exercised, by, any of its Affiliates and the performance of such obligations by any such Affiliate shall be deemed to be performance by such Party; provided, however, that each Party  shall be responsible for ensuring the performance of its obligations under this Agreement and that any failure of any Affiliate performing obligations of such Party hereunder shall be deemed to be a failure by such Party to perform such obligations.  For clarity, either Party may designate an Affiliate to perform any of its obligations hereunder or to exercise any of its rights hereunder.

 

13.4                        Change of Control.  In the event of a Change of Control of Licensor by a Company Competitor, then as from the date of such Change of Control: (i) upon Company’s written request, the JAC shall disband; and (ii) Company shall no longer be obligated to provide Product Development and Commercialization Plans as set forth in Article 4 or any reporting obligations to Licensor or its successor entity pursuant to this Agreement.  In the event of a Change of Control of the Company, then as from the date of such Change of Control, the Licensor shall have the right to terminate this Agreement.

 

13.5                        Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

27

 

13.6                        Accounting Procedures.  Each Party shall calculate all amounts, and perform other accounting procedures required, under this Agreement and applicable to it in accordance with the accounting principles and standards applicable to it (for example IFRS or GAAP).

 

13.7                        Force Majeure.  Neither Party shall be liable to the other Party or be deemed to have breached or defaulted under this Agreement for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by or results from acts of God, earthquake, riot, civil commotion, terrorism, war, strikes or other labor disputes, fire, flood, failure or delay of transportation, omissions or delays in acting by a governmental authority, acts of a government or an agency thereof or judicial orders or decrees or restrictions or any other reason which is beyond the reasonable control of the respective Party.  The Party affected by force majeure shall provide the other Party with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use Commercially Reasonable Efforts to overcome the difficulties created thereby and to resume performance of its obligations hereunder as soon as practicable.

 

13.8                        Entire Agreement of the Parties; Amendments.  This Agreement and the Schedules hereto constitute and contain the entire understanding and agreement of the Parties respecting the subject matter hereof and cancel and supersede any and all prior negotiations, correspondence, understandings and agreements between the Parties, whether oral or written, regarding such subject matter.  No waiver, modification or amendment of any provision of this Agreement shall be valid or effective unless made in a writing referencing this Agreement and signed by a duly authorized officer of each Party.

 

13.9                        Captions.  The captions to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement.

 

13.10                 Governing Law.  This Agreement shall be governed by and interpreted in accordance with the PRC Laws, excluding application of any conflict of laws principles that would require application of the Law of a jurisdiction outside of PRC.

 

13.11                 Notices and Deliveries.  Any notice, request, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such Party shall have last given by notice to the other Party.

 

If to Company, addressed to: Room 5044, No. 21, Langshan Lu, Song Ping Shan, Nanshan District, Shenzhen, China

 

If to Licensor, addressed to: 5941 Optical Court, San Jose, California 95138, the USA

 

13.12                 Waiver.  A waiver by either Party of any of the terms and conditions of this Agreement in any instance shall apply only to the specific instance and shall not be deemed or construed to be an ongoing or future waiver of such term or condition or of any other term or condition hereof.  All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.

 

13.13                 Severability.  When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under Law, but if any provision of this Agreement is held to be prohibited by or invalid under Law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.  The Parties shall make a good faith effort to replace the invalid or unenforceable provision with a valid one which in its economic effect is most consistent with the invalid or unenforceable provision.

 

13.14                 Interpretation.  Except where the context expressly requires otherwise, (a) the use of any gender herein shall be deemed to encompass references to either or both genders, and the use of the singular shall be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” shall be deemed to 

 

28

 

be followed by the phrase “without limitation”, (c) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (d) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as  from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person shall be construed to include the person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, or Schedules shall be construed to refer to Articles, Sections, or Schedules of this Agreement, and references to this Agreement include all Schedules hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree”, “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” shall be interpreted in the inclusive sense commonly associated with the term “and/or.”

 

13.15                 Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument.  A facsimile or a portable document format (PDF) copy of this Agreement, including the signature pages, will be deemed an original.

 

13.16                 No Reliance.  Each Party acknowledges that, in entering into this Agreement (and any document referred to in it), it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement.  Nothing herein shall limit a party’s liability for fraud or fraudulent misrepresentation.

 

13.17                 Incorporation.  All Schedules referred to in this Agreement are intended to be and are hereby specifically incorporated into and made a part of this Agreement. All Schedules shall have the same force and effect as other provisions of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

29

 

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

 

	
Shenzhen Arimab Biopharmaceuticals Co., Ltd.
    	
 
    	
ARIDIS PHARMACEUTICALS INC.
    
	
 
    	
 
    	
 
    
	
Signature:
    	
/s/ Yuenian Shi
    	
 
    	
Signature:
    	
/s/ Vu Truong
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Printed Name: Yuenian Shi
    	
 
    	
Printed Name: Vu Truong
    
	
 
    	
 
    	
 
    
	
Title: Manager
    	
 
    	
Title: Founder & CEO
    

 

30

 

Schedule 1.42

 

Licensor Know-How

 

Method of manufacturing the Antibodies under GMP, including the manufacturing facility setup, manufacturing protocols, and optimization protocols.

 

Clinical study designs for the Antibodies including the use of certain adjuvant in enhancing effectiveness of AR-101 and AR-301 in treating infections in humans, the design of combination products, the selection of patients, statistics designs, and insights in disease indications suitable for the AR-101 and AR-301.

 

Existing clinical and preclinical data and knowledge for AR-101 and AR-301 including proof of concept, safety, and efficacy data.

 

Information about the Chemistry, Manufacturing and Controls of the Product.

 

Information about the formulation of the Product.

 

Information about all biochemical and biophysical analytical assays, both in vitro and in vivo, that relate to pharmacokinetic analytics, pharmacodynamics markers, bioanalytical methods for assaying the safety and efficacy of the AR-101 and AR-301 in clinical trials.

 

31

 

Schedule 1.43

 

Licensor Materials

 

1.                                      All cells lines, culture media and purification processes used for producing AR-101 and AR-301. (This includes commercially viable CHO cell line, scalable, high yield processes for cGMP manufacturing, and improved stable formulation).

 

2.                                      All regulatory filings and approvals related to the Clinical Programs.

 

3.                                      All inventory of the AR-101 and AR-301 used in clinical and preclinical studies to the extent sufficient for use as reference antibodies.

 

4.                                      All books, records, files, manuals, manufacturing protocols and other documents including clinical study reports, investigator brochures and laboratory books or portion thereof that relate to the AR-101 and AR-301.

 

32

 

Schedule 1.44

 

Licensor Patents

 

	
1. Patent Family
    	
 
    	
Country
    	
 
    	
Status
    	
 
    	
Appl. No.
    	
 
    	
Filing Date
    	
 
    	
Pat. No.
    	
 
    	
Issue Date
    
	
WO2006/084758
    [AR101]
    	
 
    	
Canada
    	
 
    	
granted
    	
 
    	
2,597,701
    	
 
    	
Feb 13, 2006
    	
 
    	
2,597,701
    	
 
    	
Jan 10, 2012
    
	
 
    	
 
    	
China
    	
 
    	
granted
    	
 
    	
200680004847
    	
 
    	
Feb 13, 2006
    	
 
    	
200680004847
    	
 
    	
July 25, 2010
    
	
 
    	
 
    	
Europe
    	
 
    	
granted
    	
 
    	
06 706 900
    	
 
    	
Feb 13, 2006
    	
 
    	
1848741
    	
 
    	
Sept 8,2010
    
	
 
    	
 
    	
Israel
    	
 
    	
granted
    	
 
    	
184774
    	
 
    	
Feb 13, 2006
    	
 
    	
184774
    	
 
    	
May 01, 2012
    
	
 
    	
 
    	
India
    	
 
    	
granted
    	
 
    	
5974/DELNP/2007
    	
 
    	
Feb 13, 2006
    	
 
    	
241746
    	
 
    	
July 22, 2010
    
	
 
    	
 
    	
Japan
    	
 
    	
granted
    	
 
    	
2007-554515
    	
 
    	
Feb 13, 2006
    	
 
    	
4944799
    	
 
    	
Mar 09, 2012
    
	
 
    	
 
    	
USA
    	
 
    	
granted
    	
 
    	
11/884,163
    	
 
    	
Feb 13, 2006
    	
 
    	
8,197,816
    	
 
    	
Jun 12, 2012
    

 

	
2. Patent Family
    	
 
    	
Country
    	
 
    	
Status
    	
 
    	
Appl. No.
    	
 
    	
Filing Date
    	
 
    	
Pat. No.
    	
 
    	
Issue Date
    
	
WO2011/018208
    [AR301]
    	
 
    	
Canada
    	
 
    	
pending
    	
 
    	
2,769,394
    	
 
    	
Aug 10, 2010
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
China
    	
 
    	
granted
    	
 
    	
201080044958
    	
 
    	
Aug 10, 2010
    	
 
    	
102549013
    	
 
    	
May 06, 2015
    
	
 
    	
 
    	
Europe
    	
 
    	
granted
    	
 
    	
10743037.3
    	
 
    	
Aug 10, 2010
    	
 
    	
2464665
    	
 
    	
Dec 03, 2014
    
	
 
    	
 
    	
Europe
    	
 
    	
granted
    	
 
    	
14195810.8
    	
 
    	
Aug 10, 2010
    	
 
    	
2860191
    	
 
    	
Oct 11, 2017
    
	
 
    	
 
    	
Israel
    	
 
    	
granted
    	
 
    	
217746
    	
 
    	
Aug 10, 2010
    	
 
    	
217746
    	
 
    	
Sept 01, 2016
    
	
 
    	
 
    	
India
    	
 
    	
pending
    	
 
    	
797/DELNP/2012
    	
 
    	
Aug 10, 2010
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Japan
    	
 
    	
granted
    	
 
    	
2012-524142
    	
 
    	
Aug 10, 2010
    	
 
    	
6064241
    	
 
    	
Jan 06, 2017
    
	
 
    	
 
    	
Korea
    	
 
    	
pending
    	
 
    	
10-2012-7004737
    	
 
    	
Aug 10, 2010
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Russia
    	
 
    	
granted
    	
 
    	
2012105045
    	
 
    	
Aug 10, 2010
    	
 
    	
2429946
    	
 
    	
April 11, 2014
    
	
 
    	
 
    	
USA
    	
 
    	
granted
    	
 
    	
13/388,254
    	
 
    	
Aug 10, 2010
    	
 
    	
9.249.215
    	
 
    	
Feb 02, 2016
    

 

33

 

Schedule 1.62

 

Products

 

AR-101:

 

A human monoclonal antibody specific to P.aeruginosa lipopolysaccharide serotype O11 (IATS O11) wherein the antibody exhibits high protective capacity effective against multidrug resistant P. aeruginosa clinical isolates. AR-101 is further characterized by SEQ ID NO 1-8 as disclosed in Licensor Patents;

 

AR-301:

 

A human monoclonal antibody specific to alpha-toxin derived from S. aureus, wherein the antibody has protective and therapeutic capacity in vivo against clinically complex S. aureus infections. AR-301 is further characterized by SEQ ID NO 1-8 as disclosed in Licensor Patents;

 

34

 

Schedule 7.1.4

 

Licensor Patents and Program Patents Country List

 

China, Hong Kong, Taiwan, and Macao

 

35

 

Schedule 9.2.13

Third Party Agreements related to AR-101 and AR-301

 

	
Index
    	
 
    	
Date
    	
 
    	
Parties
    	
 
    	
Title/Description
    
	
1
    	
 
    	
May 10, 2013
    	
 
    	
between Kenta Biotech, Ltd. and Aridis   Pharmaceuticals, LLC
    	
 
    	
Asset Purchase Agreement - covering assignment of   rights to Licensor of intellectual property relating to AR-101 and AR-301
    
	
2
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

36Exhibit 10.16

 

LICENSE and OPTION AGREEMENT

 

BRIGHAM YOUNG UNIVERSITY and ARIDIS, LLC

 

This Agreement, effective July 29, 2005 is entered into between Brigham Young University, a Utah non-profit corporation and institution of higher education, with its principal campus and place of business located at Provo, Utah 84602 (referred to in this Agreement as “BYU”) and Aridis, LLC, a California corporation with its principal place of business located at 350 Cervantes Road, Portola Valley, CA 94028, (referred to in this Agreement as “LICENSEE”).

 

RECITALS

 

I                                           BYU is the sole owner of certain intellectual property rights known as “Stabilization of Biological Agents” and has the right to grant licenses with respect to these rights.

 

A.                                    BYU is an institution of higher education and is not in the business of commercially developing ideas, inventions, or other types of intellectual property, but it does desire to have Stabilization of Biological Agents available to the public and is willing to grant a license for this purpose.

 

B.                                    LICENSEE has represented to BYU that LICENSEE has the technical and commercial ability, and the technical, financial and other resources necessary to successfully develop and sell products or services based upon Stabilization of Biological Agents.

 

C.                                    LICENSEE desires to obtain a license to Stabilization of Biological Agents upon the terms and conditions of this Agreement.

 

In consideration of the promises and mutual covenants contained in this Agreement the parties agree as follows:

 

TERMS OF AGREEMENT

 

1.                                      Definitions

 

For the purposes of this Agreement, the following terms, words and phrases shall have the meaning ascribed to them in this Section.

 

1.1                               “ADJUSTED GROSS SALES” shall mean actual gross receipts or the fair market monetary equivalent value of consideration received by LICENSEE, AN AFFILIATE OR A SUBLICENSEE for the sale, lease, license, transfer or use of LICENSED PRODUCTS, less qualifying costs directly attributable to such sale, lease, license or transfer actually allowed and ‘borne by LICENSEE, an AFFILIATE, or a SUBLICENSEE.  Such qualifying costs shall be limited to the costs of the following:

 

A.                                    Trade or quantity discounts and credits for free goods actually allowed and taken in such amounts as are customary in the trade;

 

1

 

B.                                    Sales, import and export duties (or other transportation taxes) and/or production, use, delivery and excise taxes directly imposed with reference to particular sales;

 

C.                                    Outbound transportation and insurance expenses prepaid or allowed; and

 

D.                                    Amounts allowed or credited by reason of timely rejections, recalls, destruction or returns, or for rebates or chargebacks.

 

No deductions shall be made for commissions paid to individuals, whether they be regularly employed by LICENSEE or by independent sales agents, or for the cost of collections.

 

1.2                               “AFFILIATE” shall mean any person or entity owned or controlled directly or indirectly by LICENSEE or a SUBLICENSEE or any person or other entity controlled by, controlling or under common control with LICENSEE or a SUBLICENSEE.  The term “control” means possession, direct or indirect, of the powers to direct or cause the direction of the management and policies of a person or entity; whether through ownership, voting securities, beneficial interests, by contract, by agreement, or otherwise.

 

1.3                               “FIELD OF APPLICATION-ANTIBODIES” means therapeutic antibodies for treatment of infectious diseases.

 

1.4                               “FIELD OF APPLICATION-VACCINES” means vaccines and prophylactic biologics.

 

1.5                               “IMPROVEMENT(S)” means any invention (not currently comprised by the LICENSED TECHNOLOGY described in Exhibit A) which is both (i) specific in its operation or use as dependent upon the use of the LICENSED TECHNOLOGY as described (i.e., not general to the field of stabilization of biological agents), and (ii) an enhancement or improvement of some portion of the LICENSED TECHNOLOGY.

 

1.6                               “INTELLECTUAL PROPERTY” means and includes all patent applications listed in Exhibit A and all patent applications claiming the inventions described in Exhibit A, including any divisional, continuation, or continuation-in-part to such applications to the extent comprising the inventions described therein, as well as any patent issued thereon, any reissue or extension of such patent, and any foreign counterparts to such patents and application.

 

1.7                               “LICENSED PRODUCT(S)” means and includes any drug or other product whose manufacture, use or sale in a country would but for this agreement comprise an infringement of a valid patent claim included in the INTELLECTUAL PROPERTY, the phrase “valid patent claim” meaning either (i) a claim issued and not expired, revoked, abandoned or held unenforceable, or (ii) a claim that is pending, made in good faith, and reasonably designed to cover inventions described in the INTELLECTUAL PROPERTY.  Solely for purposes of calculating ADJUSTED GROSS SALES above, LICENSED PRODUCT shall also include any drug or other product whose manufacture, use or sale in a country would, but for Aridis’s own ownership rights in a valid patent claim covering an IMPROVEMENT, comprise an infringement of that patent claim.

 

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1.8                               “LICENSED TECHNOLOGY” means and includes all of BYU’s rights in the INTELLECTUAL PROPERTY known as “Stabilization of Biological Agents” as more particularly described in Exhibit A, which is attached to this Agreement and by reference is incorporated and made part of this Agreement.

 

1.9                               “LICENSEE” is Aridis, LLC and its AFFILIATES and any other person or entity that becomes a successor in interest to, purchases, merges with, assumes control of, or becomes an assignee of LICENSEE.

 

1.10                        “SUBLICENSEE” is any person or entity sublicensed by LICENSEE under any of its license rights under this Agreement.

 

1.11                        “TERRITORY” means the world.

 

2.                                      BYU Grant

 

2.1                               Subject to the provisions of Section 2.6, BYU hereby grants LICENSEE an exclusive right and license to utilize the LICENSED TECHNOLOGY to develop LICENSED PRODUCTS, and IMPROVEMENTS, and to make, have made, use, have used, import, have imported, and sell, lease and otherwise transfer LICENSED PRODUCTS within the TERRITORY and the FIELD OF APPLICATION-VACCINES as authorized in this Agreement until such time as this Agreement expires or is terminated.  This grant will extend to the manufacture, sale, lease, transfer or other disposition of LICENSED PRODUCTS within the TERRITORY and the FIELD OF APPLICATION-VACCINES through an AFFILIATE or through LICENSEE’s use of any retail outlet or distributor.

 

2.2                               Subject to the provisions of Section 2.4, BYU hereby grants LICENSEE a non-exclusive right and license to utilize the LICENSED TECHNOLOGY to develop LICENSED PRODUCTS, and IMPROVEMENTS, and to make, have made, use, have used, import, have imported, and sell, lease and otherwise transfer LICENSED PRODUCTS within the TERRITORY and the FIELD OF APPLICATION-ANTIBODIES as authorized in this Agreement until such time as this Agreement expires or is terminated.  This grant will extend to the manufacture, sale, lease, transfer or other disposition of LICENSED PRODUCTS within the TERRITORY and the FIELD OF APPLICATION-ANTIBODIES through an AFFILIATE or through LICENSEE’s use of any retail outlet or distributor.

 

2.3                               BYU hereby grants LICENSEE an option to convert the non-exclusive grant of Section 2.2 for the FIELD OF APPLICATION-ANTIBODIES into an exclusive grant upon acceptance by BYU of a reasonable development plan for the exploitation of the FIELD OF APPLICATION-ANTIBODIES including financing and a development plan and schedule.  If the exclusive license is granted, LICENSEE shall agree to pay milestone payments for the FIELD OF  APPLICATION-ANTIBODIES equal to the payments specified in Section 6.1 for the HELD OF APPLICATION-VACCINES.  This option shall terminate on the fifth anniversary of the effective date of this Agreement, or if BYU receives a bona fide offer for license rights for the FIELD OF APPLICATION-ANTIBODIES from a third party and LICENSEE fails to exercise its option within ninety days of notice thereof, whichever event occurs earlier in time.

 

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2.4                               The grants provided under this Agreement shall specifically include the right for LICENSEE to sublicense to SUBLICENSEES its rights under this Agreement to the LICENSED TECHNOLOGY with respect to the TERRITORY, in the following fields:

 

(i)                                     the FIELD OF APPLICATION-VACCINES;

 

(ii)                                  the FIELD OF APPLICATION-ANTIBODIES, where the sublicense is made to cover LICENSED PRODUCTS developed or jointly developed by LICENSEE; and

 

(iii)                               the FIELD OF APPLICATION-ANTIBODIES, if the option described in section 2.3 above is exercised.

 

All sublicenses granted by LICENSEE shall be subject to the terms and conditions of this Agreement and any sublicense agreement shall have an express provision to this effect.  No sublicense shall relieve LICENSEE of any of its obligations under this Agreement.  Sublicenses under this Agreement shall be structured to guarantee the payment of royalties to BYU in an amount at least equal to the amount of royalties which BYU would have received from LICENSEE had LICENSEE made, sold, leased, or otherwise transferred the LICENSED PRODUCTS authorized in the sublicense.  LICENSEE agrees to forward to BYU a fully executed copy of each sublicense agreement within thirty (30) days of its execution, and to act as a fiduciary to protect BYU’s interests in the sublicense and to collect and transmit to BYU all royalties due.

 

2.5                               Nothing in this Agreement shall be considered as granting any rights, express or implied, in BYU’s patents, patent applications, inventions, methods, technical, confidential or proprietary information, expertise, know-how, trade secrets or knowledge not specifically licensed in this Agreement, and all rights not expressly granted by this Agreement to LICENSEE are expressly reserved by BYU.  The license granted by this Agreement shall not be construed to confer any rights upon LICENSEE by implication, estoppel or otherwise as to any existing, new or derivative technology not specifically licensed by this Agreement.  The reservation of rights described in this Section is intended to be broadly construed and not to be limited by the definitions set forth in this Agreement.

 

2.6                               Notwithstanding the exclusive license granted pursuant to this Agreement with respect to the TERRITORY and FIELD OF APPLICATION, BYU, the Church of Jesus Christ of Latter-day Saints and the Church Education System reserve the right to make, have made or use the LICENSED TECHNOLOGY, LICENSED PRODUCTS, and IMPROVEMENTS anywhere in the world for continuing research and non-commercial academic and ecclesiastical uses without cost.  Moreover, should BYU, The Church of Jesus Christ of Latter-day Saints or any educational institution within the Church Education System (collectively, the “Church”) wish to purchase any LICENSED PRODUCTS from LICENSEE or its AFFILIATES, LICENSEE agrees to sell such LICENSED PRODUCTS at the manufacturing cost plus 20% or the price given by LICENSEE to its most favored customers, whichever is less.  (The parties to this Agreement do not expect that these sales would comprise more than 1-2% of the overall LICENSED PRODUCT sales in any country.  If BYU or the Church were to require LICENSED

 

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PRODUCT in excess of this amount the parties agree to meet in order to agree upon fair consideration for the LICENSED PRODUCTS provided.)

 

3.                                      Rights in Improvements

 

3.1                               Upon any termination of this Agreement other than its termination due to expiration of the patent rights as described in section 16.1, and to the extent LICENSEE at that time has the legal right to grant such license, LICENSEE shall grant to BYU a non-exclusive, irrevocable, perpetual, worldwide license, to any of LICENSEE’s rights in IMPROVEMENTS.  LICENSEE agrees to disclose to BYU all information reasonably requested by BYU with respect to any such licensed IMPROVEMENTS and to provide to BYU all documents and data, in whatever form, reasonably necessary for BYU to exercise such license rights.  BYU’s license under this Section shall include the right to practice, license or sublicense IMPROVEMENTS for commercial use when done in conjunction with the practice, license or sublicense of INTELLECTUAL PROPERTY and LICENSED TECHNOLOGY, provided that BYU and LICENSEE shall agree in advance upon an appropriate sharing between them for royalties or other consideration received by BYU, in recognition of and to the extent of the value contributed to the INTELLECTUAL PROPERTY and LICENSED TECHNOLOGY by addition of the licensed IMPROVEMENTS.

 

3.2                               During the term of this Agreement, LICENSEE shall disclose to BYU (under appropriate confidentiality, where appropriate) information with respect to any IMPROVEMENTS developed by LICENSEE for which patent protection is being sought, in order that BYU may assess whether it has any legitimate ownership interest in the invention comprised by the IMPROVEMENT.

 

3.3                               During the term of this Agreement, any IMPROVEMENTS and associated patent rights which are developed by licensees of BYU other than LICENSEE, and for which BYU hereafter acquires ownership or license rights, shall be deemed to be included under the definition of INTELLECTUAL PROPERTY and LICENSED TECHNOLOGY above and included in the license herein.

 

4.                                      Activities of LICENSEE

 

4.1                               The parties acknowledge that LICENSEE may investigate or develop alternative approaches towards the stabilization of biological agents other than the LICENSED TECHNOLOGY.  LICENSEE represents that it enters into this Agreement, including its performance obligations under Section 5 hereunder, and its obligations to support and cooperate in BYU’s efforts to obtain properly patentable valid patent claims as set out in Section 12 hereunder, all in good faith.

 

5.                                      Performance Requirements

 

5.1                               LICENSEE shall, during the term of this Agreement, use its reasonable best efforts to bring one or more LICENSED PRODUCTS to market in order to maximize the ADJUSTED GROSS SALES through a thorough, vigorous and diligent commercial program.

 

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5.2                               LICENSEE has delivered to BYU a development plan and schedule which is attached hereto as Exhibit B.  LICENSEE shall use its reasonable best efforts to accomplish said development plan and schedule.

 

5.3                               LICENSEE shall provide biannual progress reports to BYU by the last day of January and the last day of July until LICENSEE’S first commercial sale.

 

5.4                               LICENSEE’s failure to perform in accordance with this Section of the Agreement to the reasonable satisfaction of BYU may be considered by BYU to be a material breach of this Agreement and as such may entitle BYU to exercise its termination rights in accordance with Section 16.4 below.

 

6.                                      Milestone Payments and Royalties

 

In consideration of the license granted under this Agreement, LICENSEE shall pay to BYU, in the manner designated below until the Agreement shall be terminated, as follows:

 

6.1                               Milestone Payments: LICENSEE shall make the following milestone payments for the first LICENSED PRODUCT to BYU according to the following schedule:

 

	
Upon the completion of Phase 2 clinical trials
    	
 
    	
$
    	
50,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Upon the   completion of Phase 3 clinical trials
    	
 
    	
$
    	
100,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Upon the first   commercial sale of a LICENSED PRODUCT
    	
 
    	
$
    	
250,000
    	
 
    

 

6.2                               Earned Royalties: Earned royalties shall be paid quarterly in the amount equal to Two Percent (2.0%) of the ADJUSTED GROSS SALES for LICENSED PRODUCT anywhere in the TERRITORY and FIELD OF APPLICATION-VACCINES or FIELD OF APPLICATION-ANTIBODIES.

 

6.3                               If LICENSEE judges it to be necessary to license and utilize additional rights from a third party which are reasonably considered to fall within the scope of the LICENSED TECHNOLOGY, LICENSEE may reduce the Earned Royalties due BYU on any such LICENSED PRODUCT sold which utilizes the third party’s licensed rights by one-half of the royalty paid to the third party for said rights provided prior notice is given to BYU by LICENSEE and BYU provides written consent thereto, which consent shall not be unreasonably withheld.  However, under no circumstances shall the Earned Royalties payable to BYU be less than One Percent (1.0%).

 

6.4                               Any royalty amount due to BYU arising out of this Agreement shall accrue at the time of receipt by LICENSEE of consideration for LICENSED PRODUCT or LICENSED PROCESS and shall be deemed to be held in trust for the benefit of BYU until actual payment of such amounts is made pursuant to this Agreement.

 

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7.                                      Reports, Records, Penalties and Interest

 

7.1                               LICENSEE shall keep, and shall require all SUBLICENSEES, AFFILIATES, and any other party responsible by the terms of this Agreement to make payments to BYU to keep, at their own expense, accurate books of account, using generally accepted accounting principles and practices, detailing all data necessary to calculate and easily audit any payments due to BYU under this Agreement.  These books of account shall be kept at LICENSEE’s, AFFILIATE’s or SUBLICENSEE’s principal place of business.  These books and supporting data shall be open at all reasonable times, upon ten (10) calendar days written notice, throughout the term of this Agreement and for a period of five (5) years following the end of the calendar year to which they pertain, to inspection by BYU or its agents for the purpose of verifying LICENSEE’s reports, royalty statements or other compliance with this Agreement.  In the event that any such inspection reveals any underpayment of royalties by LICENSEE, LICENSEE shall promptly rectify any such underpayment, reimburse BYU for the cost of such inspection if such inspection reveals a deficiency in any quarterly payment due to BYU hereunder in the amount of five percent (5%) or more of the amount payable to BYU, and shall pay the penalty and interest amounts specified in Section 7.4 below.

 

7.2                               LICENSEE, within sixty (60) days after the last day of each full calendar quarter subsequent to the effective date of this Agreement, shall deliver to BYU an accurate written report summarizing in sufficient detail to allow BYU to verify all payment amounts, the data used during the preceding three-month period under this Agreement to calculate the payments due to BYU during the applicable accounting period.  These records and reports shall include at least the following information for the accounting period:

 

A.                                    Calculation of ADJUSTED GROSS SALES, itemized as to the number and the identity of the LICENSED PRODUCTS sold.

 

B.                                    All qualifying deductible costs claimed as offsets as applicable.

 

C.                                    Calculation of earned royalties and total royalties due broken down by applicable category.

 

D.                                    Names and address of all AFFILIATES and SUBLICENSEES and full reports from them complying with the reporting requirements of Section A-C.

 

7.3                               With each such report submitted, LICENSEE shall pay to BYU all fees, royalties and all other amounts due, payable and arising pursuant to this Agreement.  If no amounts shall be due, LICENSEE shall so report.  All amounts paid to BYU pursuant to this Agreement shall be in United States Dollars unless otherwise agreed in writing between the parties, and the amount of all royalties to be paid to BYU shall be determined on the basis of the relevant currency exchange rate published by the Wall Street Journal on the last business day of the calendar quarter to which such royalties relate.

 

7.4                               A penalty will be assessed in an amount equal to three percent (3%) of any payment due to BYU arising out of this Agreement if the payment is made more than sixty (60) days late.  Interest will accrue from the thirtieth day after the payment was due at a rate of twelve percent (12%) per annum or the highest rate permitted by law, whichever is lower.  Any unpaid

 

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interest or penalty shall be compounded monthly at the applicable interest rate.  The penalty and interest provisions of this Section 7.4 shall not apply to any payment reasonably in dispute or any circumstance of force majeure as described in Section 22.6.

 

7.5                               In the event LICENSEE engages an independent auditor or employs an internal auditor for the purpose of verifying the accuracy of its books of account, LICENSEE shall cause said auditor to verify the accuracy of the quarterly reports required in Section 7.2 of this Agreement, and LICENSEE shall provide to BYU a copy of the report and any documentation generated in the verification process on or before ninety (90) days after the verification process is completed.

 

8.                                      Confidentiality

 

8.1                               If either party receives material provided by the other party which is marked as confidential, or is verbally so designated and confirmed in writing by the disclosing party within thirty (30) days of the receipt of the materials by the receiving party, the receiving party shall take reasonable precautions to protect such material and to preserve its confidential, proprietary or trade secret status during the term of this Agreement and for a period of five (5) years after termination of this Agreement.

 

8.2                               In determining whether or not information is confidential, the burden of proof shall be upon the receiving party to establish by competent proof and by preponderance of the evidence that such information to be non-confidential was:

 

A.                                    Already known to the receiving party at the time of disclosure by the disclosing party or independently developed by the receiving party, or

 

B.                                    Generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party, or

 

C.                                    Became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement, or

 

D.                                    Subsequently, lawfully disclosed to the receiving party by a third party, or

 

E.                                     Required by law to be disclosed.

 

8.3                               LICENSEE may disclose BYU’s confidential information to its agents, employees, independent contractors, officers, AFFILIATES and SUBLICENSEES where reasonably necessary to further the objectives of this Agreement, and otherwise only to the extent it is authorized in writing to do so by BYU.

 

8.4                               All of the receiving party’s SUBLICENSEE’s, employees and independent contractors with access to the disclosing party’s confidential information shall be bound in writing, copies of which shall be retained by the receiving party and submitted to the disclosing party upon request of the disclosing party, to make no unauthorized use or disclosure of the confidential information.

 

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8.5                               Both parties agree that a breach of its obligation to protect the other party’s confidential information shall cause immediate and irreparable harm which cannot be adequately compensated by monetary damages.  Accordingly, any breach or threatened breach of confidentiality shall entitle the disclosing party to preliminary and permanent injunctive relief in addition to such remedies as may be otherwise available.

 

9.                                      Separate Service Agreement

 

If BYU and LICENSEE mutually agree that BYU shall supply technical and engineering services required to effectively transfer to LICENSEE the LICENSED TECHNOLOGY licensed herein, then LICENSEE shall reimburse BYU for its expenses incurred in furnishing such technical and engineering services pursuant to the terms and conditions of a separate written agreement.

 

10.                               Export Controls and Applicable Laws

 

10.1                        It is understood that the LICENSED TECHNOLOGY may be subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended, and the Export Administration Act of 1979), and LICENSEE’s obligations under this Agreement may be contingent upon compliance with applicable United States export laws and regulations.  The transfer of certain technical data and commodities may require a license from the cognizant agent of the United States Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency.  BYU neither represents that a license shall not be required nor that, if required, it shall be issued.  LICENSEE shall observe and obey all export laws in countries in which it shall do business.

 

10.2                        In the exercise of its rights, and the performance of its obligations under this Agreement, LICENSEE shall comply with all applicable laws, regulations and governmental orders.  LICENSEE shall obtain, and shall maintain in full force and effect throughout the continuance of this Agreement, all licenses, permits, authorizations and approvals required under all applicable laws, regulations and governmental orders of the TERRITORY, and shall make all filings, notifications and reports to all relevant governmental agencies, which are necessary or appropriate in order for the performance by LICENSEE of all of its obligations under this Agreement.  In the event that the issuance of any such license, permit, authorization or approval is conditioned upon any material modification or amendment of BYU’s rights under this Agreement, and is sought without BYU’S agreement to that modification or amendment, then BYU shall have the right to terminate this Agreement with respect to the affected territory, and such TERRITORY shall be excluded from the definition of the TERRITORY herein

 

11.                               Patent Marking and Copyright Notice

 

If applicable, LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with all applicable United States patent numbers and copyright notices.  All LICENSED PRODUCTS shipped to or sold in other countries shall be marked in such a manner as to conform with the patent and/or copyright laws and practice of the country of manufacture or sale.

 

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12.          Patent Prosecution and Maintenance

 

12.1        BYU shall use its reasonable best efforts to apply for, seek prompt issuance of, and maintain during the term of this Agreement any patent rights to properly patentable INTELLECTUAL PROPERTY set forth in Exhibit A or to any enhancements and modifications thereto.  BYU shall diligently prosecute, file, perfect and maintain all such patent rights, patents or applications utilizing legal counsel of its choice.  LICENSEE shall cooperate with BYU in such prosecution, filing and maintenance.

 

12.2        Payment of one-third of all fees and costs relating to the filing, prosecution, perfection and maintenance of the patent rights, both domestic and foreign, shall be reimbursed by LICENSEE to BYU, whether such fees and costs were incurred before or after the date of this Agreement.  If the option for an exclusive license to the HELD OF APPLICATION-ANTIBODIES of Section 2.3 is granted, and if BYU has no other non-exclusive licensee in the FIELD OF APPLICATION-ANTIBODIES, LICENSEE shall pay an additional one-third of said patent-related costs.  For filings outside the United States not made in joint agreement between the parties, LICENSEE may elect not to reimburse BYU for such expenses by providing advance written notice to BYU, but any such filing in such country shall thereafter be excluded from INTELLECTUAL PROPERTY and LICENSED TECHNOLOGY as defined herein.

 

12.3        LICENSEE shall have the right to comment upon all patent prosecution or interference matters.  Strategic matters affecting potential breadth and term of any patent coverage, and all other material matters related to patent prosecution, shall be managed by joint agreement negotiated in good faith among BYU, LICENSEE and (where necessary) any third party BYU licensees.  Copies of all documentation and correspondence with governmental patent offices and patent counsel shall be provided to LICENSEE.

 

12.4        LICENSEE SHALL HAVE NO CLAIM OR DAMAGES AGAINST BYU, ITS  PERSONNEL, TRUSTEES OR STUDENTS FOR FAILURE TO PERFORM ITS  OBLIGATIONS PURSUANT TO SECTION 12 OF THIS AGREEMENT, AND SHALL NOT CONSIDER BYU’S FAILURE TO SO PERFORM A BREACH OF THIS AGREEMENT, PROVIDED THAT BYU COMPLIES WITH THE FOLLOWING TERMS: IF BYU SHALL ELECT NOT TO PERFORM ITS OBLIGATIONS HEREUNDER WITH RESPECT TO ANY  OR ALL PATENT APPLICATIONS AND PATENTS, THEN IT SHALL PROVIDE  LICENSEE WITH REASONABLE ADVANCE WRITTEN NOTICE OF ITS INTENT, AND  PROVIDE LICENSEE THE OPPORTUNITY THEREAFTER TO CONTINUE THE  PROSECUTION, FILING, PERFECTION AND MAINTENANCE OF SUCH PATENT  APPLICATIONS AND PATENTS INDEPENDENTLY OF BYU AND AT ITS OWN  EXPENSE.

 

13.          Infringement

 

LICENSEE will have the first right to pursue, prosecute and settle infringement matters in its exclusive field of use.  BYU shall have the first right to pursue all other infringement matters.  In either case the other party may pursue matters not elected by the party with the first right (provided the matter is within LICENSEES’ field of use).  Where LICENSEE takes first

 

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action, proceeds shall be divided, net of expenses, 75% to LICENSEE and 25% to BYU.  Where BYU takes first action, proceeds shall be divided 75% to BYU and 25% to LICENSEE.

 

14.          Warranty and Limitation of Remedy

 

14.1        BYU represents and warrants that to the best of its knowledge it is the owner of the entire right, title, and interest in and to and has the sole right to grant licenses under this Agreement to the LICENSED TECHNOLOGY as described on Exhibit A.  BYU makes no warranty or representation with respect to the application of the LICENSED TECHNOLOGY to any particular purpose.

 

14.2        BYU makes no representation that the manufacture, use, lease, or sale of the LICENSED TECHNOLOGY will not infringe a copyright or patent granted to others, other than to state that it knows of no such copyright, patent or other proprietary interests which would be so infringed.

 

14.3        Each party represents and warrants to the other that it has all of the requisite power and authority to enter into this Agreement and to perform each and every term, provision and obligation of this Agreement, and that neither the execution nor delivery of this Agreement will conflict with or result in a breach of the terms, provisions or obligations of, or constitute a default pursuant to, any other agreement or instrument under which such party is obligated.

 

14.4        ALL WARRANTIES MADE IN THIS AGREEMENT ARE EXCLUSIVE AND, TO THE EXTENT PERMITTED BY LAW, ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS  AND IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY WHETHER EXPRESS OR IMPLIED.

 

14.5        BYU will not be liable for any loss of profits or for any claim or demand against LICENSEE by any other party.  BYU’s liability, if any, for any damages to LICENSEE shall not exceed in any event the total earned royalties which have been paid by LICENSEE to BYU during the term of this Agreement.  IN NO EVENT WILL BYU BE LIABLE FOR INCIDENTAL OR  CONSEQUENTIAL DAMAGES EVEN IF BYU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  No action, regardless of form, arising out of the transaction subject of this Agreement may be brought against BYU more than one year after the cause of action is discovered.

 

15.          Product Liability and General Indemnification

 

15.1        BYU does not warrant the effectiveness or operation of any of the LICENSED PRODUCTS, and the parties to this Agreement agree and understand that BYU shall have no liability to any user of LICENSED PRODUCTS.  LICENSEE, therefore, agrees to hold BYU harmless and indemnify BYU, its trustees, officers, employees and agents from and against any and all litigation, claims, damages or actions (including reasonable attorneys’ fees) that may be instituted against BYU arising out of LICENSEE’s marketing, distribution, sale, production, manufacture, lease, consumption or advertisement of the LICENSED TECHNOLOGY or LICENSED PRODUCTS or arising from any obligation of LICENSEE under this Agreement, including, but not limited to, claims resulting from any alleged type of defect in the LICENSED

 

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TECHNOLOGY or LICENSED PRODUCTS or damages allegedly caused by any breach of contract by LICENSEE, its AFFILIATES or SUBLICENSEES, or the use or misuse of the LICENSED TECHNOLOGY or LICENSED PRODUCTS, notwithstanding any third-party allegation that their claims, injuries or damages were proximately caused in part or wholly by BYU’s negligence.  In the event BYU is sued as a party defendant or otherwise pursuant to claims identified in this Section as being subject to indemnification, LICENSEE agrees to defend BYU at LICENSEE’s sole expense in such action.  Should any award or decree be made against BYU, it shall be the obligation of LICENSEE to (a) appeal the decision and pay if the appeal is lost or (b) pay such award or make any settlement as may be warranted before or after the decision on appeal.  BYU shall have the right to elect to participate in any such action with counsel of its choosing; the costs of BYU’s participation shall be at its own expense.

 

15.2        LICENSEE shall immediately notify BYU of any litigation in which it, its officers or its directors, agents or employees may be involved if there is a reasonable possibility that this Agreement or BYU will be affected and afford BYU reasonable cooperation should BYU elect to make its own defense.

 

16.          Term and Termination

 

16.1        Subject to earlier termination in accordance with this Section, this Agreement shall commence on the effective date of this Agreement and remain in force until the expiration of the last valid patent claim contained in the LICENSED TECHNOLOGY.

 

16.2        The Agreement may be terminated immediately by written notice to LICENSEE by BYU at its election in the event of the occurrence of any one of the following circumstances:

 

A.            In the event LICENSEE is placed in the hands of a receiver or makes a general assignment for the benefit of creditors, such that LICENSEE is unable to perform its continuing obligations hereunder; or

 

B.            In the event that all or substantially all of the assets of LICENSEE or its successor-in-interest are seized or attached in a final, unappealed or unappealable order in conjunction with any action brought against it by a third party creditor, such that LICENSEE is unable to perform its continuing obligations hereunder.

 

16.3        This Agreement may be terminated effective upon thirty (30) days written notice from BYU and the failure of LICENSEE to cure any breach or default prior to the expiration of the thirty-day notice period in any of the following circumstances:

 

A.            In the event LICENSEE becomes insolvent or shall cease to carry on its business in the normal course; or

 

B.            In the event there is a transfer or sale of LICENSEE’s business purporting to transfer or assign this Agreement and/or the LICENSED TECHNOLOGY without the prior express written consent of BYU.

 

16.4        In the case of breach or default arising from LICENSEE’s failure to pay BYU royalties or other costs or expenses pursuant to the Agreement when due and payable, failure to

 

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complete the performance requirements of Section 5 of this Agreement, or from any other material breach or default of this Agreement, BYU shall have the right to terminate this Agreement upon thirty (30) days written notice to LICENSEE.  Termination shall become effective upon the failure of LICENSEE to cure such breach or default within such notice period.

 

16.5        LICENSEE may terminate this Agreement at any time by providing sixty (60) days written notice to BYU.

 

16.6        Upon termination of this Agreement for any reason, the parties shall not be released from any obligation that has matured prior to the effective date of the termination.  LICENSEE may, however, after the effective date of such termination, sell all LICENSED PRODUCTS in its inventory or in process as of the time of such termination, provided that LICENSEE shall pay to BYU the royalties and other consideration due on such products as required by this Agreement and shall submit the reports as required.

 

16.7        Upon the termination of this Agreement, any SUBLICENSEE which has not breached in any material way its sublicense agreement shall be offered by BYU the option of receiving a license directly from BYU on substantially the same terms and conditions as those provided herein.

 

16.8        Upon the termination of this Agreement, LICENSEE shall immediately cease using the INTELLECTUAL PROPERTY and return to BYU all documents and information as may have been provided by BYU pursuant to this Agreement, which contain information which is confidential or proprietary to BYU.

 

16.9        Nothing herein shall be construed to limit BYU’s legal or equitable remedies in the event of a default by LICENSEE and/or subsequent termination of this Agreement by BYU.

 

17.          Dispute Resolution and Mediation

 

17.1        With respect to any and all claims, disputes or controversies arising out of the performance of or in connection with this Agreement, the parties agree to attempt in good faith to resolve those claims, disputes or controversies by negotiations between the parties.  In the event either party believes the negotiation discussions are likely not to result in settlement, the parties must, in good faith, participate in mediation sessions with a professional mediator to be mutually selected by the parties and the expense of which is to be paid fifty percent (50%) by each party.  In the event, after one or more mediation sessions, either party believes the mediation process is not likely to resolve the dispute by mutual agreement, such party may seek any legal or equitable remedy available through a court of competent jurisdiction.

 

17.2        Nothing in this Section shall be construed to waive any rights of timely performance of any obligation existing under this Agreement.

 

18.          Licensee Assignment

 

Neither this Agreement nor the LICENSED TECHNOLOGY is assignable by LICENSEE without the express written consent of BYU, which shall not be unreasonably withheld.  Any attempt to make such an assignment without BYU’s written consent may be

 

13

 

voided at the election of BYU.  LICENSEE agrees that in the event BYU elects to void an unauthorized assignment that BYU will have suffered immediate and irreparable damage and shall be entitled to immediate injunctive relief.  In the event BYU does not elect to void an unauthorized assignment, LICENSEE agrees that the assignee will be treated in all respects as a LICENSEE for purposes of this Agreement.  Nothing in this section may be construed to preclude BYU from initiating an independent action against the assignee of the unauthorized assignment or to otherwise pursue other legal or equitable remedies against LICENSEE, the assignee or both.

 

19.          Non Use of BYU Name

 

LICENSEE shall not use the name of Brigham Young University nor of any of its employees, nor any adaptation thereof, in any advertisement, promotion or sales literature without the express prior written consent from BYU in each case, except that LICENSEE may state that it is licensed by BYU.

 

20.          Publication

 

BYU shall have the right to publish any academic paper, article or learned treatise and make public disclosure at professional meetings or seminars regarding any portion of the LICENSED TECHNOLOGY which has been or may be invented, conceived or developed by BYU.

 

21.          Payment, Notices and Other Communications

 

Any payment, notice or other communication pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent by certified first-class mail, postage prepaid, addressed to the receiving party at its address designated below or such address as shall be designated by written notice given to the other party.

 

	
BYU:
    	
Technology Transfer Office
    
	
 
    	
A-285 ASB
    
	
 
    	
Brigham Young University
    
	
 
    	
P.O. Box 21231
    
	
 
    	
Provo, Utah 84602-1231
    
	
 
    	
(801) 378-6266
    
	
 
    	
 
    
	
LICENSEE:
    	
Aridis, LLC
    
	
 
    	
350 Cervantes Road
    
	
 
    	
Portola Valley, CA 94028
    

 

22.          Miscellaneous Provisions

 

22.1        Independence of Parties.   BYU and LICENSEE are independent parties engaged in independent business and neither party nor any respective agent or employee of either party shall be regarded as an agent or an employee of the other.  Nothing in this Agreement shall be construed as reserving to either party the right to control the other in the conduct of its business,

 

14

 

nor shall either party have the authority to make any promise, guarantee, warranty or reservation which will create any obligation or liability whether express or implied on behalf of the other.

 

22.2        Attorneys’ Fees.  In the event a legal proceeding is commenced in a court of competent jurisdiction to construe or enforce any provision of this Agreement, the prevailing party, in addition to all other amounts to which such party may be entitled, shall be entitled to recover from the non-prevailing party its reasonable attorneys’ fees, expert witness fees and costs incurred in connection with the proceeding.

 

22.3        Waiver.  No waiver by either party, whether express or implied, of any provisions of this Agreement or of any breach or default of either party, shall constitute a continuing waiver of such provision or a waiver of any other provisions of this Agreement.

 

22.4        Governing Law.  This Agreement shall be interpreted and construed in accordance with the laws of the State of Utah.  Venue for any legal disputes shall be in Utah County, Utah.

 

22.5        Partial Invalidity.  Should any Section or any part of a Section of this Agreement be held unenforceable or in conflict with the law of any jurisdiction, the validity of the remaining Sections and Subsections shall not be affected by the invalidity of any other part of the Agreement.

 

22.6        Force Majeure.  Neither party to this Agreement shall be in default because of a delay or failure to perform which is not the result of the defaulting party’s intentional or negligent acts or omissions, but results from causes beyond the reasonable control of such party such as acts of God, terrorism, civil disobedience and war.

 

22.7        Entire Agreement.  This Agreement constitutes the entire Agreement and understanding between the parties and supersedes all prior agreements and understandings with respect to the LICENSED TECHNOLOGY, whether written or oral.  No modification or claimed waiver of any of the provisions of this Agreement shall be valid unless in writing and signed by authorized representatives of the party against whom such modification or waiver was sought to be enforced.

 

22.8        Full and Fair Meaning.  This Agreement shall be interpreted in accordance with its fair meaning and shall not be interpreted for or against any party on the ground that such party drafted or caused to be drafted this Agreement or any part thereof.

 

22.9        Binding Effect.  This License Agreement shall be binding upon and shall inure to the benefit of the successors, assigns and legal representatives of the parties.

 

22.10      Headings.  The paragraph and subparagraph headings contained in this Agreement are for convenience and reference only.  They are not intended to define, limit, or expand the scope of the provisions of this Agreement.

 

15

 

IN WITNESS WHEREOF, the parties have entered into this Agreement and it is effective this 29th day of July, 2005.

 

	
Date: 7/29/2005
    	
BRIGHAM YOUNG   UNIVERSITY
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Gary R. Hooper
    
	
 
    	
 
    	
Gary R. Hooper
    
	
 
    	
 
    	
Associate Academic Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
Date: 7/29/2005
    	
LICENSEE
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Eric J. Patzer
    
	
 
    	
 
    	
Eric J. Patzer
    
	
 
    	
 
    	
President
    

 

16

 

EXHIBIT A

 

LICENSED TECHNOLOGY

 

STABILIZATION OF BIOLOGICAL AGENTS

 

The LICENSED TECHNOLOGY includes U.S. patent application number 10/199,061, “Plasticized Hydrophilic Glasses for Improved Stabilization of Biological Agents”, the corresponding Patent Cooperation Treaty application number PCT/US02/28320, Canadian application number 2,458,794, European Patent Office application number 02795489.0 and any additional foreign counterparts thereof, as well as all continuations, continuations-in-part, divisions and renewals thereof, all patents which may be granted thereon, and all reissues, reexaminations and extensions; and any trade secrets and know-how which are in existence upon the effective date of this Agreement.

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