Document:

Exhibit
10.24

 

CONFIDENTIAL

 

LICENSE AGREEMENT

 

Between:                                              THE
UNIVERSITY OF BRITISH COLUMBIA

 

and

 

NEWLINK GENETICS CORPORATION

 

Table of Contents

 

	
  Article

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.0

  	
  DEFINITIONS

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
  PROPERTY RIGHTS IN & TO THE PATENTS, TECHNOLOGY AND IMPROVEMENTS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
  GRANT OF LICENSE

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  4.0

  	
  SUBLICENSING

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  5.0

  	
  ROYALTIES

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
  MILESTONES AND ANNUAL PAYMENTS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  7.0

  	
  PATENTS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  8.0

  	
  DISCLAIMER OF WARRANTY

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  9.0

  	
  INDEMNITY & LIMITATION OF LIABILITY

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  10.0

  	
  PUBLICATION & CONFIDENTIALITY

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  11.0

  	
  PRODUCTION & MARKETING

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  12.0

  	
  ACCOUNTING RECORDS & REPORTS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  13.0

  	
  INSURANCE

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  14.0

  	
  ASSIGNMENT & CHANGE OF CONTROL

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  15.0

  	
  GOVERNING LAW

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  16.0

  	
  NOTICES

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  17.0

  	
  TERM

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  18.0

  	
  TERMINATION OF AGREEMENT

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  19.0

  	
  MISCELLANEOUS COVENANTS OF LICENSEE

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  20.0

  	
  MANAGEMENT OF CONFLICTS OF INTEREST

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  21.0

  	
  GENERAL

  	
   

  	
  30

  

 

Schedules

 

“A”                          Description of “Patents” and
“Technology”

“B”                            Notice of Exercise of Option

“C”                            Mandatory Sublicense
Provisions

“D”                           Payment Report

“E”                             UBC License Agreement Annual
Report

“F”                             Address for Notices &
Payment Instructions

 

 

LICENSE AGREEMENT

 

BETWEEN:

 

THE UNIVERSITY OF BRITISH COLUMBIA, a corporation continued
under the University Act of British Columbia with
its administrative offices at 2075 Wesbrook Mall, Vancouver, British Columbia,
V6T 1W5

 

(“UBC”)

 

AND:

 

NEWLINK GENETICS, a corporation incorporated under the laws
of Iowa, with a registered office at 2901 S. Loop Dr., Suite 3900, Ames, IA
50010.

 

(the “Licensee”)

 

WHEREAS:

 

UBC
has been engaged in research during the course of which it has invented,
developed and/or acquired certain technology relating to Indoleamine
2,3-Dioxygenase Inhibitors, which research was undertaken by Drs. Raymond
Andersen, Grant Mauk, and Michel Roberge (the “Investigators”)
and co-workers in the UBC Departments of Biochemistry, Chemistry, and Earth and
Ocean Sciences;

 

It
is UBC’s objective to exploit its technology for the public benefit, and to generate
further research in a manner consistent with its status as a non-profit, tax
exempt educational institution; and

 

The
Licensee and UBC have agreed to enter into this license under which UBC grants
Licensee the exclusive license rights under such technology and related
intellectual property on the terms and conditions set out in this agreement
(the “Agreement”).

 

THE PARTIES AGREE AS FOLLOWS:

 

1.0                                                                               DEFINITIONS

 

1.1                                                                                 In this
Agreement:

 

(a)                                  “Affiliated Company” or “Affiliated Companies”
means, with respect to Licensee, another corporation or other business entity
that controls, is controlled by, or is in common control with Licensee; where
the term “control” means (with correlative meanings for the terms “controlled
by” and “under common control with”) that the applicable entity owns fifty
percent (50%) or more of the voting shares of the subject entity, or otherwise
has the ability to direct and manage the business affairs of such subject
entity (whether through contract or otherwise);

 

(b)                                 “Annual Maintenance Fee” is defined in Article 6.5;

 

(c)                                  “Annual Payment” is defined in Article 6.1(d);

 

(d)                                 “Annual Report” means a report in the form referred to in
Article 12;

 

 

(e)                                  “Assigned Licensee Improvements” means any new compounds made
or discovered by Licensee or its Sublicensee(s) that are claimed or covered by
the Patents in existence prior to the initial manufacture or discovery of such
new compounds;

 

(f)                                    “Commercially Reasonable Efforts” means, with respect to the
efforts to be expended by Licensee to accomplish a particular objective in the
research, development or commercialization of a Product or Licensee Owned
Improvement Product, such efforts as are substantially equivalent to those
efforts and resources commonly used by Licensee for a comparable product,
acting reasonably promptly and taking into account commercially relevant
factors such as (as applicable) stage of development, product life, patent
position, market potential and regulatory issues. Commercially Reasonable
Efforts shall be determined on a market-by-market basis for any particular
Product or Licensee Owned Improvement Product, and it is anticipated that the
level of effort will be different for different markets, and will change over
time, reflecting changes in the status of the Product or Licensee Owned
Improvement Product and the market(s) involved;

 

(g)                                 “Confidential Information” means all information, regardless
of its form:

 

(i)                                     disclosed by
UBC to the Licensee, whether before or after the Effective Date, and which is
identified in writing as “Confidential”, which may include without limitation
information and documents related to the Patents, Improvement Patents,
Technology or any Improvements (including all derived analyses and
conclusions); or

 

(ii)                                  comprising the
terms and conditions of this Agreement; or

 

(iii)                               disclosed by
the Licensee to UBC and which is identified in writing as “Confidential”,

 

except that “Confidential
Information” does not include information:

 

(iv)                              possessed by
the recipient (the “Recipient”)
prior to receipt from the disclosing party (the “Discloser”),
other than through prior disclosure by the Discloser, as evidenced by the
Recipient’s business records;

 

(v)                                 published or
available to the general public otherwise than through a breach of this
Agreement;

 

(vi)                              obtained by the
Recipient from a third party with a valid right to disclose it, provided that
the third party is not under a confidentiality obligation to the Discloser; or

 

(vii)                           independently
developed by employees, agents or consultants of the Recipient who had no
knowledge of or access to the Discloser’s Confidential Information as evidenced
by the Recipient’s business records;

 

(h)                                 “Diagnostic Field of Use”; means any use of:

 

(i)                                     the Patents,
Improvement Patents, Technology, or any Improvements, or

 

3

 

(ii)                                  any
compositions, formulations, Products or Licensee Owned Improvement Products
containing or developed using the Patents, Improvement Patents, Technology or
any Improvements,

 

for the diagnosis in humans of the presence of
disease, for the prediction of the risk of disease or disease outcome, for the
prediction of the response to therapy, or for guiding, developing and
conducting a course of therapy;

 

(i)                                     “Dispute” is defined in Article 11.5;

 

(j)                                     “Effective Date” means February 1, 2007, the date on which
this Agreement is effective.

 

(k)                                  “Effective Termination Date” means the date on which this
Agreement is terminated under Article 18;

 

(l)                                     “FDA” means the United States Food and Drug Administration,
(or any other equivalent regulatory authority outside the U.S.);

 

(m)                               “First Use of the Technology” means the earlier of either:

 

(i)                                     the first use
of the Licensed Patents, Technology or any Improvement, or

 

(ii)                                  the first sale
of a Product or Licensee Owned Improvement Product in exchange for valuable
consideration;

 

(n)                                 “Human Clinical Trials” means any Product or Licensee Owned
Improvement Product testing involving human subjects;

 

(o)                                 “Improvements” means collectively: (a) all UBC Improvements,
(b) all Assigned Licensee Improvements; and (c) all Licensee Owned
Improvements.

 

(p)                                 “Improvements Patents” means any and all patents and patent
applications (anywhere in the world) owned or controlled by UBC or the Licensee
that claim or cover an Improvement;

 

(q)                                 [*] means [*] in accordance with the [*]
of [*] or [*]
of such [*];

 

(r)                                    “Indemnitees” is defined in Article 9.1;

 

(s)                                  “Initial License Fee” is defined in Article 3.5;

 

(t)                                    “Licensed Patents” means collectively: (a) the Patents, and
(b) all Improvements Patents that claim or cover UBC Improvements or Assigned
Licensee Improvements;

 

(u)                                 “Licensee Owned Improvements” means all improvements,
variations, updates, modifications, and enhancements relating to the Patents or
Technology made, discovered and/or acquired by the Licensee or any Sublicensee
at any time after the Effective Date, which are based on or incorporate the
Technology licensed under this Agreement, but excluding all Assigned Licensee
Improvements. For clarity Licensee Owned Improvements includes any new

 

4

 

compounds made or discovered
by Licensee or its Sublicensee(s) that: (i) are not claimed or covered by the
Patents in existence prior to the initial manufacture or discovery of such new
compounds, and (ii) are analogs of and synthesized based upon a compound, group
of compounds, or pharmacophore that is claimed or covered by the Patents in
existence prior to the initial manufacture or discovery of such new compounds;

 

(v)                                 “Licensee Owned Improvement Products” is defined in Article
5.2(b);

 

(w)                               “Mediator” is defined in Article 11.6;

 

(x)                                   “Milestone Events” is defined in Article 6.1(a);

 

(y)                                 “Milestone Payments” is defined in Article 6.1(a);

 

(z)                                   “Net Revenue” means all revenues, receipts, money, and the
fair market value of any shares or other securities, or other consideration
collected or received whether by way of cash, credit or other value received by
the Licensee and/or any Sublicensee from the marketing, manufacturing, sale,
distribution or other commercial disposition of Products or Licensee Owned
Improvement Products to third party purchasers, less the following deductions
to the extent actually accrued or allowed with respect to such sales:

 

(i)                                     Trade, quantity
and early payment discounts off of the invoice price;

 

(ii)                                  amounts
actually credited, rebated or allowed for rejections, returns or recalls of
Products or Licensee Owned Improvement Products;

 

(iii)                               governmental
and managed care rebates or chargebacks to the extent actually incurred or
allowed with respect to Products or Licensee Owned Improvement Products sold
during the relevant time period to group purchasing organizations, hospitals or
other buying groups;

 

(iv)                              retroactive
price reductions that are actually allowed or granted;

 

(v)                                 sales, excise
and other taxes (other than taxes on the income of the selling party), duties
and government charges;

 

(vi)                              transportation,
shipping and insurance to the extent separately reflected on the invoice; and

 

(vii)                           amounts written
off as uncollectible bad debt after making all commercially reasonable efforts
to collect such amounts.

 

Sales of Product and Licensee Owned Improvement
Products between or among Licensee and its Affiliated Companies or Sublicensees
will be excluded from the computation of Net Revenues, but the subsequent final
sales of such Product or Licensee Owned Improvement Products to Third Parties
by such parties will be included in the computation of Net Revenues. Further,
transfers or dispositions of Products or Licensee Owned Improvement Products in
commercially reasonable quantities for charitable, sampling or promotional
purposes or for preclinical, clinical, manufacturing scale-up, regulatory or
governmental purposes shall not be considered a “sale” and shall not be included
for purposes of calculating Net Revenues;

 

5

 

(aa)                            “New Technology” means [*], or [*], disclosed by the Investigators to UBC at any time
during the Term of this Agreement that:

 

(i)                                     relate to the
Patents or Technology in that they are [*] the
Patents, Technology or any Improvement licensed under this Agreement; and

 

(ii)                                  are not covered
or claimed by the Patents and do not directly incorporate the Technology
licensed under this Agreement;

 

For clarity, the term “New Technology” includes [*] where such [*];

 

(bb)                          “Objectionable Material” is defined in Article 10.3;

 

(cc)                            “Option” is defined in Article 2.4;

 

(dd)                          “Option Period” is defined in Article 2.5;

 

(ee)                            “Patents” mean collectively: the U.S., Canadian and foreign
patents and patent applications identified in Schedule “A”,
and including all rights in such patents and applications and to any and all
inventions that are disclosed in any such patent or application, and all:

 

(i)                                     counterparts,
continuations, divisionals, continuing prosecution applications, and requests
for continued examinations, extensions, term restorations, renewals, reissues,
re-examinations, or substitutions of any such patent or applications;

 

(ii)                                  corresponding
international patent applications;

 

(iii)                               corresponding
foreign patent applications, including supplementary protection certificates
and other administrative protections; and

 

(iv)                              international
and foreign counterpart patents resulting therefrom;

 

all of which will be deemed
added, from time to time, to Schedule “A”;

 

(ff)                                “Payment Report” means a report in the form referred to in
Article 12 setting out in detail how the amount of Revenue was determined;

 

(gg)                          “Phase I Clinical Trial” means a Human Clinical Trial that
would satisfy the requirements for a Phase 1 study as defined in U.S. FDA 21
C.F.R. 312.21(b) (or any U.S. successor legislation) or similar regulations in
a country outside the U.S.;

 

(hh)                          “Phase II Clinical Trial” means a Human Clinical Trial that
would satisfy the requirements for a Phase 2 study as defined in U.S. FDA 21
C.F.R. 312.21(b) (or any U.S. successor legislation) or similar regulations in
a country outside the U.S.;

 

(ii)                                  “Phase Ill Clinical Trial” means a Human Clinical Trial that
would satisfy the requirements for a Phase 3 study as defined in U.S. FDA 21
C.F.R. 312.21(c) (or any U.S. successor legislation) or similar regulations in
a country outside the U.S.;

 

6

 

(jj)                                  “Product” means a product, good or service: (i) that is
covered or claimed by, or the manufacture or use of which is covered or claimed
by, a Valid Claim in a Patent or Licensed Patent; and/or (ii) that incorporates
or is based upon any material aspect of the Technology and/or any Improvements
other than a Licensee Owned Improvement;

 

(kk)                            “Reagent Field of Use” means any use of:

 

(i)                                     the Patents,
Improvement Patents, Technology or any Improvements, or

 

(ii)                                  any
compositions, formulations, Products or Licensee Owned improvement Products containing
or developed using the Patents, Improvement Patents, Technology or any
Improvements,

 

outside the Diagnostic Field
of Use and the Therapeutic Field of Use. For greater clarity it is confirmed
that the Reagent Field of Use shall include all uses as chemical reagents or
fine chemicals and any use that is not listed in the FDA Orange Book, or the
Canadian or foreign equivalent of such listing as a drug product approved for
use in humans;

 

(ll)                                  “Royalty Due Dates” means the last day of March, June, September
and December of each year during the Term;

 

(mm)                      “Sublicense Agreement” means any agreement under which rights
are granted by the Licensee to a third party under the license rights granted
by UBC to Licensee hereunder for the use, research, development,
co-development, partnered development, manufacture, marketing or sale of
Products or granting rights to such third party in the Licensed Patents,
Technology, UBC Improvements or any Assigned Licensee Improvements;

 

(nn)                          “Sublicensee” means any third party who has directly or
indirectly entered into a Sublicense Agreement with the Licensee, and shall
include all sub-sublicensees of a particular Sublicensee;

 

(oo)                          “Sublicensing Fees” means all initial or periodic license
fees, development or commercialization fees, milestone payments or other
payments received by the Licensee from a Sublicensee under the terms of any
Sublicense Agreement to the extent such payments are based upon and are in
consideration for the grant by Licensee of the sublicense under Licensee’s
license rights granted by UBC under this Agreement, whether received in cash or
other form (such as shares or other securities or other consideration, which
for purposes of this Agreement shall be valued at fair market value at the time
of receipt by Licensee), but excluding royalties calculated on the sales or
other commercial disposition of Products or Licensee Owned Improvement Product
by any Sublicensee. For greater clarity, it is confirmed that Sublicensing Fees
will include any fees that are characterized as research or development fees but solely to the extent such
fees  are 
in  excess  of  the
direct reimbursement for the actual costs of research and development incurred
by the Licensee pursuant to a written research plan and agreement received by
the Licensee from any Sublicensee relating to the Licensed Patents, Technology,
Improvements, Products or any Licensee Owned Improvement Products (which direct
reimbursement may be in the form of reasonable and typical FTE rates), and that
any amounts received by Licensee from a Sublicensee as reimbursement for the
actual costs of such research and 

 

7

 

development shall not be
included in the term “Sublicensing Fees”. For further clarity, it is agreed
that any amounts received by Licensee as consideration for issuance by Licensee
to a Sublicensee of Licensee stock sold to Sublicensee at the fair market value
of such stock, or as an arms length loan on commercially reasonable terms, or
as direct reimbursement of patent prosecution costs, or as payment of a share
of amounts recovered in enforcing patent or other intellectual property rights,
shall be excluded from and not be included in the term “Sublicensing Fees”;

 

(pp)                          “Technology” means all knowledge, know-how and/or technique
or techniques invented, developed and/or acquired before the Effective Date by
UBC relating to any of inventions disclosed in the Patents, and including the
technology and materials described in Schedule “A”,
as amended from time to time, including, without limitation all related
research, data, specifications, instructions, manuals, papers or other related
materials of any nature at all, whether written or otherwise, and UBC’s
Confidential Information;

 

(qq)                          “Term” is defined in Article 17.1;

 

(rr)                                “Therapeutic Field of Use” means any use of:

 

(i)                                     the Patents,
Improvement Patents, Technology or any Improvements, or

 

(ii)                                  any
compositions, formulations, Products or Licensee Owned Improvement Products
containing or developed using the Patents, Improvement Patents, Technology or
any Improvements,

 

for use in the cure, mitigation, treatment, or
prevention of disease in humans, including the use of any Product or Licensee
Owned Improvement Product that is the subject of an FDA-Approved New Drug
Application and which is listed in the FDA Orange Book, or the Canadian or
foreign equivalent;

 

(ss)                            “UBC Improvements” means improvements, variations, updates,
modifications, and enhancements relating to the Patents or Technology made,
discovered and/or acquired by UBC at any time after the Effective Date, which
are claimed or covered by the Patents, or if not claimed or covered by the
Patents, are analogs of and synthesized based upon a compound, group of
compounds, or pharmacophore that is claimed or covered by the Patents in
existence prior to the initial manufacture or discovery of such new compounds.
For clarity UBC Improvements do not include New Technology;

 

(tt)                                “UBC Trade-marks” means any mark, trade-mark, service mark,
logo, insignia, seal, design, symbol or device used by UBC in any manner at
all;

 

(uu)                          “Valid Claim” is defined in Article 5.2(d); and

 

(vv)                          “Withholding Taxes” is defined in Article 5.7.

 

2.0                                                                               PROPERTY
RIGHTS IN & TO THE PATENTS, TECHNOLOGY AND      IMPROVEMENTS

 

2.1                                                                                 UBC and Licensee
acknowledge and agree that, as between the parties:

 

8

 

(a)                                  UBC owns all
right, title and interest in and to the Licensed Patents, Technology, all UBC
Improvements, all Assigned Licensee Improvements, and all New Technology,
subject only to the licensee rights and other rights granted by UBC to Licensee
under this Agreement; and

 

(b)                                 the Licensee
owns all right, title and interest in and to the Licensee Owned Improvements
and all patents that claim or cover such Licensee Owned Improvements.

 

2.2                                                                                 The parties
will each at the request of the other sign all documents as may be reasonably
required to ensure that ownership of the Technology, Improvements, Patents,
Improvement Patents and New Technology are assigned to and remain with the
party identified in Article 2.1 as owning such Technology, Patents, Improvement
Patents, and New Technology.

 

2.3                                                                                 On the last
working day of June and December of each year during the Term, the Licensee
will give notice to UBC of the details of all Assigned Licensee Improvements
and Licensee Owned Improvements that the Licensee and/or any Sublicensees of
the Licensee have made or developed during the previous six month period.

 

2.4                                                                                 UBC hereby
grants to the Licensee an option (the “Option”) to
obtain an exclusive, world-wide license to use and sublicense any New
Technology (and including any patent or other intellectual property covering
such New Technology), provided that:

 

(a)                                  the
Investigator is at the time of the discovery of such New Technology and its
disclosure to UBC still an employee of UBC and subject to UBC’s policies in
making such discovery, including UBC’s Patents and Licensing Policy 88; and

 

(b)                                 the Licensee is
not at the time of exercise of the Option in material breach of this Agreement
or any other agreement with UBC.

 

To
the extent that there are any inconsistencies between the Option as set out in
this Agreement and the terms of any collaborative research agreement under
which the development of any New Technology was sponsored by the Licensee, the
terms of the collaborative research agreement will prevail.

 

2.5                                                                                 The period for
exercise by the Licensee of the Option, with respect to particular New
Technology, will be 6 months starting from the date of disclosure by UBC to the
Licensee of the particular New Technology (the “Option
Period” with respect to such New Technology). Such disclosure shall
include reasonably relevant information relating to the New Technology as is in
the possession of UBC’s Industry Liaison Office and which it is able to
disclose to the Licensee.

 

2.6                                                                                 In order to
exercise the Option with respect to particular New Technology disclosed by UBC
to Licensee, the Licensee will sign and deliver to UBC prior to the expiry of
the Option Period applicable to such New Technology a Notice of Exercise of
Option in the form attached as Schedule “B”, together
with a summary business plan prepared in accordance with generally accepted
business standards that describes the steps that the Licensee proposes to take
to commercially exploit the New Technology including relevant market
information and revenue projections.

 

2.7                                                                                 During the
Option Period as to a particular New Technology, UBC will not grant any license
to commercially exploit the New Technology to any other party. If the Licensee
does not exercise the Option within the Option Period in accordance with
Article 2.6 as to such New 

 

9

 

Technology, the parties
agree that the Option will expire with respect to such item of New Technology,
and UBC will thereafter be free to deal with and commercialize such New
Technology in any way, and without further obligation to the Licensee.

 

2.8                                                                                 If the Licensee
validly exercises the Option for a particular item of New Technology as
provided in Article 2.6, then the parties will negotiate exclusively and in
good faith to determine the specific terms and conditions on which a new
exclusive (or, if elected by Licensee, non-exclusive) license will be granted
by UBC to the Licensee under such New Technology. Such new license agreement
shall be on commercially reasonable terms typical for similar license
agreements, including commercially reasonable royalty rates and other financial
terms and shall be generally consistent with the terms and conditions of this
Agreement. The parties shall seek in good faith and using diligent efforts to
reach agreement on such terms and to enter into such new license agreement as
soon as practicable after Licensee exercises the Option.

 

2.9                                                                                 If UBC and the
Licensee are unable, despite each party using good faith efforts, to agree upon
the specific terms and conditions of a new license agreement within a period of
6 months after the date when the Licensee exercises the Option pursuant to
Article 2.6 with respect to a particular item of New Technology, then the
Option as to such particular New Technology shall expire.

 

2.10                                                                           Any new license
granted by UBC with respect to any New Technology shall provide UBC the right
in perpetuity to use the New Technology without charge in any manner whatsoever
for research, scholarly publication, educational or other non-commercial uses.

 

3.0                                                                               GRANT
OF LICENSE

 

3.1                                                                                 Subject to
Article 3.4, UBC grants to the Licensee the worldwide, exclusive license to
use, practice and sublicense the Licensed Patents, Technology, UBC Improvements
and any Assigned Licensee Improvements, and to research, develop, manufacture,
have made, distribute, use, import, offer for sale and sell the Products and
Licensee Owned Improvement Products on the terms and conditions set out in this
Agreement.

 

3.2                                                                                 The license
granted under this Agreement is granted only to the Licensee and not to any
Affiliated Companies.

 

3.3                                                                                 The Licensee
will not enter into a Naked Cross-License Agreement involving the Licensed
Patents, Technology, UBC Improvements, or any Assigned Licensee Improvements
without the prior written consent of UBC, such consent not to be unreasonably
withheld. For the purposes of this section a “Naked Cross-License Agreement”
means an agreement between the Licensee and a third party possessing certain
technology, that:

 

(a)                                  involves the
Licensee granting license rights under the Licensed Patents, Technology, UBC
Improvements, or any Assigned Licensee Improvements to such third party, and
such third party granting to the Licensee, in consideration of such license
rights granted by Licensee, license right under the third party’s technology,
and

 

(b)                                 is entered into
by the Licensee and such third party without the third party agreeing to pay to
the Licensee and consideration other than the exchange of license rights
described in subsection (a) of this definition.

 

10

 

3.4                                                                                 The Licensee
acknowledges and agrees that, notwithstanding the  exclusive  license granted by UBC under Article 3.1, UBC may use the
Patents, Licensed Patents, Technology and any Improvements (other than Licensee
Owned Improvements) without charge in any manner at all for research, scholarly
publication, educational and all other non-commercial uses.

 

3.5                                                                                 As a condition
of UBC granting this license, the Licensee agrees to pay to UBC an initial
license fee of [*] (U.S. funds) (the “Initial License Fee”). The Initial License Fee will be paid
concurrently with the execution of this Agreement, and will not be refunded to
the Licensee (in whole or in part) under any circumstances.

 

3.6                                                                                 UBC may
register a financing statement regarding this Agreement under the Personal Property Security Act of British Columbia and/or
under similar legislation in those jurisdictions in which the Licensee carries
on business and/or has its chief place of business.

 

3.7                                                                                 The Licensee
will use reasonable efforts to give notice to UBC if it is carrying on business
and/or locates its chief place of business in a jurisdiction outside British
Columbia before starting business in that other jurisdiction. If UBC has
registered a financing statement under Article 3.6, the Licensee will use reasonable
efforts to provide UBC notice within 45 days of any change in jurisdiction.

 

3.8                                                                                 On execution of
this Agreement, the Licensee will pay to UBC the sum of [*]
(Canadian Funds) to reimburse UBC for all outside patent expenses invoiced to
UBC or its agents, directly in connection with the filing or prosecution of the
Patents prior to February 1, 2007, and UBC will confirm such amount by
providing to the Licensee copies of the invoices submitted to UBC for such
activities. To the extent that any such patent expenses have not been invoiced
to UBC prior to February 1, 2007, and are therefore not included in the [*] (Canadian Funds), amount, and to the extent that UBC
incurs any additional outside patent expenses after the Effective Date for
filing or prosecution of the Patents, the Licensee agrees that it will within
30 days of presentation by UBC to the Licensee of the invoices for such
activities, reimburse to UBC the balance of such patent expenses.

 

4.0                                                                               SUBLICENSING

 

4.1                                                                                 The Licensee
may enter into Sublicense Agreements with its Affiliated Companies or any other
third party, without UBC’s prior consent, provided that each such Sublicense
Agreement is consistent with the terms and conditions contained in this
Agreement, and that each such Sublicense Agreement shall contain the mandatory
sublicensing provisions contained in Schedule “C”
which provisions shall not be materially revised or amended without first
obtaining the prior written consent of UBC, which consent shall not be
unreasonably withheld. Within 10 business days of signing any Sublicense
Agreement, the Licensee will provide to UBC a fully executed unredacted copy of
each Sublicense Agreement and a certification signed by a senior officer of the
Licensee that such Sublicense Agreement is consistent with the terms and
conditions of this Agreement and includes the mandatory sublicensing provisions
contained in Schedule “C”.

 

4.2                                                                                 Any Sublicense
Agreement granted by the Licensee will be granted only to the Sublicensee and
cannot be assigned or further sub-sublicensed without the prior written consent
of UBC, such consent not to be unreasonably withheld.

 

4.3                                                                                 Promptly after
executing a Sublicense Agreement, the Licensee will use reasonable efforts to
give notice to UBC of the jurisdictions in which the Sublicensee is carrying on
business. If the Licensee, during the term of the Sublicense Agreement, becomes
aware of 

 

11

 

the Sublicensee carrying on business in another
jurisdiction, then the Licensee will use reasonable efforts to give notice to
UBC within 45 days.

 

5.0                                                                               ROYALTIES

 

5.1                                                                                 In
consideration of the license granted under this Agreement, the Licensee will
pay to UBC a royalty equal to:

 

(a)                                  [*] of the Net
Revenue arising from sales of Products in [*] in [*] where [*];

 

(b)                                 [*] of the Net
Revenue arising from sales of:

 

(i)                                     Licensee Owned
Improvement Products in the [*], and

 

(ii)                                  Products in the
[*] in [*]
where [*];

 

(c)                                  [*] of the Net
Revenue arising from sales of Products [*] in [*] where [*];

 

(d)                                 [*] of the Net
Revenue arising from sales of:

 

(i)                                     Licensee Owned
Improvement Products in the [*], and

 

(ii)                                  Products in the
[*] in [*]
where the [*];

 

(e)                                  [*] of the Net
Revenue arising from sales of Products in the [*]
in [*] where [*];
and

 

(f)                                    [*] of the Net
Revenue arising from sales of:

 

(i)                                     Licensee Owned
Improvement Products in the [*], and

 

(ii)                                  Products in the
[*] in [*]
where the [*].

 

5.2                                 For greater clarity it is
confirmed that:

 

(a)                                  the royalties
set out in Article 5.1 will be payable by the Licensee on all Revenue
regardless of whether such Revenue is received by the Licensee or any
Sublicensee(s);

 

(b)                                 “Licensee Owned Improvement Products” shall be defined as
meaning products, goods or services:

 

(i)                                     that are
covered or claimed by, or the manufacture or use of which is covered or claimed
by, a Valid Claim in a patent filed with respect to a Licensee Owned
Improvement; and/or

 

(ii)                                  that
incorporate or are based upon any material aspect of a Licensee Owned
Improvement

 

provided that such products, goods or services are
not also covered or claimed by a Patent or Licensed Patent;

 

(c)                                  if any Net
Revenue may be categorized as arising from one or more of the fields of use
listed in Articles 5.1(a) through (f) above, then the royalty rate applicable 

 

12

 

to such Net Revenue shall be
the one that is most favourable to UBC; for clarity, Licensee shall pay UBC
royalties under Article 5.1 based on sales of a particular Product or Licensee
Owned Improvement Product on a country by country basis at only one royalty
rate, as determined under one of the subsections in Article 5.1 above (and no
more than one rate with respect to sales in any single country);

 

(d)                                 “Valid Claim” shall be defined as meaning a claim in a
pending, issued or granted Patent or Improvement Patent that, at the time of
sale of the applicable Product or Licensee Owned Improvement Product:

 

(i)                                     has not
expired, lapsed, been cancelled or become abandoned;

 

(ii)                                  has not been
admitted to be invalid through reissue or disclaimer or otherwise; or

 

(iii)                               has not been
finally found to be invalid (or not valid) or unenforceable by an unreversed or
unappealable final decision or judgment of a court or other authority or agency
of competent jurisdiction.

 

Any
claim being presented in a pending patent application that is being prosecuted
in good faith shall be deemed to be the equivalent of a valid claim of an
issued, unexpired patent until disallowed, rejected or abandoned.

 

5.3                                                                                 The royalty is
due and payable within 60 days of each respective Royalty Due Date and is to be
calculated with respect to the Revenue in the three month period immediately
before the applicable Royalty Due Date.

 

5.4                                                                                 All royalties
paid by the Licensee to UBC under this Agreement will be in Canadian dollars
without any reduction or deduction of any nature or kind at all, except as
provided in Section 5.7. If the Licensee or any Sublicensee receives any
Revenue in a currency other than Canadian dollars, Licensee will calculate the
amount of royalties owed in such currency, and such amount will then be
converted to the equivalent in Canadian dollars on the date that any amount is
payable to UBC, at the rate of exchange set by the Bank of Montreal for buying
Canadian dollars with such currency. The amount of royalties owed in Canadian
dollars resulting from the conversion is to be paid to UBC.

 

5.5                                                                                 Products and
Licensee Owned Improvement Products are deemed to have been sold by the
Licensee or a Sublicensee and included in the Revenue when invoiced, delivered,
shipped, or paid for, whichever is the first.

 

5.6                                                                                 Any transaction
or other commercial disposition involving the Patents, Improvement Patents,
Technology, Improvements, Products or any Licensee Owned Improvement Products,
between the Licensee or any Sublicensee and another person, that is not made at
fair market value is deemed to have been made at fair market value, and the
fair market value of the transaction, disposition, or other dealing will be
added to and deemed part of the Revenue and will be included in the calculation
of royalties under this Agreement.

 

5.7                                                                                 The parties
acknowledge that, since UBC is a non-profit, tax exempt, publicly funded
educational institution, and as such UBC should not be subject to any
withholding or other similar taxes on any payments made by the Licensee to UBC
under this Agreement. However, if Licensee determines that it is required to
pay or withhold on account of UBC amounts of taxes which are otherwise payable
by UBC pursuant to any applicable law, including, but not limited to, United
States federal, state or local tax law (“Withholding Taxes”),

 

13

 

the Licensee will inform UBC of such determination
and the parties will discuss the matter in good faith and seek diligently to
determine if there is any legal mechanism (which does not impose any additional
costs or burdens on Licensee) to avoid paying or withholding such Withholding
Tax. Any such Withholding Taxes required by law to be paid or withheld shall be
an expense of, and borne solely by UBC if UBC is the party on which the
Withholding Taxes are levied, and if Licensee is required to withhold such
Withholding Tax, Licensee may deduct the tax from the applicable payment,
provided that Licensee submits to UBC reasonable proof of payment of such
Withholding Taxes, together with an accounting of the calculations of such
taxes, within 30 days after such Withholding Taxes are remitted to the proper
authority. The parties will cooperate reasonably in completing and filing
documents required under the provisions of any applicable tax laws or under any
other applicable law in connection with the making of any required tax payment
or withholding payment, or in connection with any claim to a refund of or
credit for any such payment.

 

6.0                                                                               MILESTONES
AND ANNUAL PAYMENTS

 

6.1                                                                                 In addition to
all other payments due pursuant to this Agreement, the Licensee shall pay to
UBC the following payments

 

(a)                                  if the Licensee
has not executed a Sublicense Agreement for use of the Licensed Patents,
Technology or any Improvements within the Therapeutic Field of Use, then the
Licensee shall pay to UBC the applicable of the following milestone payments
(the “Milestone Payments”) on Licensee’s
achievement of each of the following applicable events with respect to each
Product or Licensee Owned Improvement Product (the “Milestone
Events”):

 

	
   

  	
   

  	
  Milestone Payment Amount (in US $)

  	
   

  
	
  Milestone Event

  	
   

  	
  Product

  	
   

  	
  Licensee Owned

  Improvement Product

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

(b)                                 subject to
Article 6.2 and 6.3, all Milestone Payments shall be payable by the Licensee to
UBC within 30 days of December 31st of the year
during which the applicable Milestone Event was achieved;

 

(c)                                  if the Licensee
has executed a Sublicense Agreement for use of the Licensed Patents, Technology
or any Improvements within the Therapeutic Field of Use, and in addition to
entering into such Sublicense, the Licensee develops one or more Products or
Licensee Owned Improvement Products within the Therapeutic Field of Use
independent of the Sublicense Agreement, then the Licensee will 

 

14

 

pay to UBC the applicable
Milestone Payments set out in Article 6.1(a) on the Licensee’s achievement of
the Milestone Events for such Products or Licensee Owned Improvement Products
being developed by the Licensee independent of the Sublicense Agreement and on
executing any further Sublicense Agreement with respect to such Products or
Licensee Owned Improvement Products being developed by the Licensee, the
Licensee will pay to UBC the greater of the Milestone Payments or Sublicensing
Fees received by the Licensee in accordance with either Article 6.2 or 6.3
dependent on the stage of development of such Products or Licensee Owned
Improvement Products as of the date that such further Sublicense Agreement is
entered into. Such payments shall be paid to UBC regardless of whether there
are any amounts payable by the Licensee under Article 6.2 and 6.3 with respect
to the Sublicensee’s development of different Products or Licensee Owned
Improvement Products developed under the Sublicense Agreement;

 

(d)                                 each year
during the Term of this Agreement the Licensee will also pay to UBC on the
dates set out below an annual payment equal to the amounts set out

 

below (the “Annual Payment”).
This Annual Payment will not be refunded to the Licensee (in whole or in part)
under any circumstances:

 

	
  (i)

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (iv)

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (vi)

  	
   

  	
  [*], and on [*],

  of each subsequent year thereafter

  	
   

  	
  [*]

  

 

6.2                                                                                 Subject to
Article 6.3, if the Licensee has executed a Sublicense Agreement for use of the
Licensed Patents, Technology or any Improvements within the Therapeutic Field
of Use, then upon the Sublicensee achieving a Milestone Event (as listed in the
schedule in Article 6.1(a) above), the Licensee will pay to UBC the greater of
either:

 

(a)                                  the Milestone
Payment identified in the [*] column of
the table in Article 6.1(a) above with respect to achievement of such Milestone
Event, and

 

(b)                                 a percentage of
the total Sublicensing Fees received by Licensee from its Sublicensee under the
terms of such Sublicense Agreement (which percentage will be determined in
accordance with the following schedule) during the applicable period as
provided expressly in Section 6.4:

 

	
  Milestone Event

  	
   

  	
  Percentage of

  Sublicensing Fees

  
	
  If
  the Sublicense Agreement is executed prior to [*]

  	
   

  	
  [*]

  
	
  If
  the Sublicense Agreement is executed subsequent to [*]

  	
   

  	
  [*]

  

 

15

 

6.3                                                                                 If the Licensee
has executed a Sublicense Agreement within the Therapeutic Field of Use, that
grants such Sublicensee a license with respect to the Licensee Owned
Improvements, and such Sublicense Agreement does not include a grant of any
rights with respect to the Licensed Patents, Technology or any Improvements
(other than the Licensee Owned Improvements) then upon the Sublicensee
achieving a Milestone Event (as listed in the schedule in Article 6.1(a)
above), the Licensee will pay to UBC the greater of either:

 

(a)                                  the Milestone
Payment identified in the “Licensee Owned Improvement Product” column of the
table in Article 6.1(a) above with respect to achievement of such Milestone
Event, and

 

(b)                                 a percentage of
the total Sublicensing Fees received by Licensee from its Sublicensee under the
terms of such Sublicense Agreement (which percentage will be determined in
accordance with the following schedule) during the applicable period as
provided expressly in Section 6.4:

 

	
  Milestone Event

  	
   

  	
  Percentage of

  Sublicensing Fees

  
	
  If
  the Sublicense Agreement is executed prior to [*]
  

  	
   

  	
  [*]

  
	
  If
  the Sublicense Agreement is executed subsequent to [*]

  	
   

  	
  [*]

  

 

6.4                                                                                 With respect to
all Milestone Events achieved by a particular Sublicensee under a Sublicense
Agreement during a particular calendar year, Licensee shall make the
determination under Article 6.2 or 6.3, of whether Licensee will make payments
under Article 6.2(a) or 6.3(a) above for such Milestone Event achievements
(i.e., make the Milestone Payments under Article 6.1(a) owed with respect to
such Milestone Events) or will pay a percentage of the Sublicensing Fees
received under Article 6.2(b) or 6.3(b) from such Sublicensee, on an annual
basis and will make such calculation effective as of December 31st of such
year. For this purpose, the Licensee will prepare and deliver to UBC within 30
days of December 31st of each year a report and an accounting statement which
sets out a comparison of:

 

(a)                                  all of the
Sublicensing Fees received by the Licensee from such Sublicensee during the
period starting on the later of (i) the execution of the Sublicense Agreement
or (ii) December 31 of the year of achievement by the Sublicensee of the last
Milestone Event in respect of which the Licensee has made a payment to UBC
under Article 6.2 or 6.3; and ending on December 31 of the applicable year for
which the report is delivered to UBC, and

 

(b)                                 the Milestone
Event(s) that were achieved by the Sublicensee during the calendar year period
ending on such December 31; and

 

(c)                                  a calculation
showing the comparison of the total amounts that would be payable by Licensee
under Article 6.2(a) or 6.3(a) based on achievement of such Milestone Events
during such year, and the total amount that would be payable under Article
6.2(b) or 6.3(b), by applying the appropriate percentage to the total 

 

16

 

Sublicensing Fees received
by Licensee from such Sublicensee during the period specified in subsection (a)
above.

 

The
Licensee will also deliver to UBC along with the report and accounting
statement referred to above, the amount determined to be payable to UBC in
accordance with either Article 6.2(a) or (b); or 6.3(a) or 6.3(b).

 

For
example, if a Sublicensing Agreement is executed after [*],
and such Sublicensee [*] a Product
during a particular calendar year (and that completion is the first Milestone
Event achieved by such Sublicensee after executing the Sublicensing Agreement),
then for achievement of such Milestone Event the Licensee will pay to UBC, under
the terms of Article 6.2 and this Article 6.4, the greater of:

 

(i) [*] (the amount identified in Article 6.1(a) above for
achievement of such Milestone Event) and (ii) [*]
of all Sublicensing Fees paid to Licensee by such Sublicensee under such
Sublicensing Agreement through to December 31 of such calendar year. If such
Sublicensee subsequently [*] the same
Product, then for achievement of such Milestone Event the Licensee will shall
pay to UBC, under Article 6.2, the greater of: (i) [*] (the
amount identified in Article 6.1(a) above for achievement of such Milestone
Event), and (ii) an amount equal to [*] of all
Sublicensing Fees paid to Licensee by such Sublicensee under such Sublicensing
Agreement after December 31 of the year
in which the [*] Milestone Event was achieved
by such Sublicensee, through to
December 31 of the calendar year in which such [*]
Milestone Event was achieved by such Sublicensee.

 

6.5                                                                                 The Licensee
will pay to UBC, in addition to all other amounts due under this Agreement, an
annual maintenance fee of U.S. [*] (the “Annual Maintenance Fee”). The Annual Maintenance Fee is
payable on or before April 1 of each year during the Term, starting on April 1,
2007 and will not be refunded to the Licensee (in whole or in part) under any
circumstances.

 

7.0                                                                               PATENTS

 

7.1                                                                                 UBC will, on
the request of the Licensee, take reasonable steps to apply for a patent with
respect to the Technology, UBC Improvements, or any Assigned Licensee
Improvements in the name of UBC provided that the Licensee pays all costs of
applying for, registering and maintaining the patent in the jurisdictions in
which the Licensee designates that a patent is required, and such patent shall
be deemed included in the Licensed Patents. The Licensee will on UBC’s request
pay to UBC a reasonable payment as an advance against expected patent expenses
over the next 3 months with respect to any such requested filing.

 

7.2                                                                                 On the filing
(thereafter including after issuance) of a Licensed Patent filed under Article
7.1, the Licensee becomes the licensee of the Licensed Patent on the terms and
conditions set out in this Agreement.

 

7.3                                                                                 Throughout the
Term, the Licensee will within 30 days of presentation of receipts and/or
invoices by UBC to the Licensee showing the amounts actually charged by
Licensee’s external patent counsel of for filing fees or similar external
prosecution costs, reimburse to UBC the balance of all out-of-pocket patent
filing, prosecution and maintenance costs incurred to such date regarding the
Licensed Patents.

 

17

 

7.4                                                                                 The Licensee
will not contest the validity or scope of the Licensed Patents or the
Technology, Improvements or any New Technology, to the extent such restriction
is permitted by applicable law.

 

7.5                                                                                 To the extent
required by applicable law, the Licensee will ensure proper patent marking for
all uses of the Licensed Patents licensed under this Agreement and will clearly
mark the appropriate patent numbers on any Products covered by the Licensed
Patents.

 

8.0                                                                               DISCLAIMER
OF WARRANTY

 

8.1                                                                                 Except as
otherwise expressly provided in Article 8.3, UBC makes no representations,
conditions or warranties, either express or implied, regarding the Licensed
Patents, Technology, Improvements, Products or Licensee Owned Improvement
Products. Without limitation, UBC specifically disclaims any implied warranty,
condition or representation that the Licensed Patents, Technology,
Improvements, Products or Licensee Owned Improvement Product:

 

(a)                                  correspond with
a particular description;

 

(b)                                 are of
merchantable quality;

 

(c)                                  are fit for a
particular purpose; or

 

(d)                                 are durable for
a reasonable period of time.

 

UBC
is not liable for any loss, whether direct, consequential, incidental or
special, that the Licensee or other third parties suffer arising from any
defect, error or fault of, or failure to perform by, the Licensed Patents,
Technology, Improvements, Products or Licensee Owned Improvement Products, even
if UBC is aware of the possibility of the defect, error, fault or failure. The
Licensee acknowledges that it has been advised by UBC to undertake its own due
diligence regarding the Licensed Patents, Technology and any Improvements.

 

8.2                                                                                 Nothing in this
Agreement:

 

(a)                                  constitutes a
warranty or representation by UBC as to title to the Licensed Patents,
Technology or any Improvements, except as provided in Section 8.3 below, or
that anything made, used, sold or otherwise disposed of under the license
granted in this Agreement will not infringe the patents, copyrights,
trademarks, industrial designs or other intellectual property rights of any
third parties, including any patents, copyrights, trade-marks, industrial
design or other intellectual property rights owned, in whole or in part, by
UBC, or licensed by UBC to any third parties;

 

(b)                                 constitutes an
express or implied warranty or representation by UBC that the Licensee has, or
will have the freedom to operate or practice the Licensed Patents, Technology
or any Improvements, or the freedom to make, have made, use, sell or otherwise
dispose of Products or Licensee Owned Improvement Products; or

 

(c)                                  imposes an
obligation on UBC to bring, prosecute or defend actions or suits against third
parties for infringement of patents, copyrights, trade-marks, industrial
designs or other intellectual property or contractual rights.

 

18

 

8.3                                                                                 UBC hereby
represents and warrants to Licensee that as of the Effective Date to the best
of the knowledge of the UBC staff having responsibility for the
commercialization of this Technology at the UBC Industry Liaison Office, and
without having made any specific inquiry:

 

(a)                                  as between UBC
and the inventors or the Technology employed by UBC, UBC has been assigned
ownership of the Technology and the Patents;

 

(b)                                 UBC has
corporate power and authority to grant, and is not prohibited by any
legislation from granting, a license of technology under the Patents and the
Technology under this Agreement; and

 

(c)                                  UBC has not
previously granted to any third party any license to commercially exploit the
Patents and/or the Technology that materially conflict with the license rights
granted to the Licensee under this Agreement.

 

8.4                                                                                 Notwithstanding
Article 8.2, if there is an alleged infringement or misappropriation of
the Licensed Patents, Technology, UBC Improvements or any Assigned Licensee
Improvements or any right with respect to the Licensed Patents, Technology, UBC
Improvements or any Assigned Licensee Improvements, the Licensee may take all
appropriate steps, short of starting legal action, to stop or enjoin such
infringement or misappropriation of the Licensed Patents, Technology, UBC
Improvements or any Assigned Licensee Improvements, and will consult with UBC
regarding such steps. If it is necessary to start any legal action to stop or
enjoin any infringement or misappropriation of the Licensed Patents, Technology,
UBC Improvements or any Assigned Licensee Improvements and/or to recover
damages from such infringement or misappropriation, the Licensee may do so,
provided that the Licensee first obtains UBC’s prior written consent to
initiate such action, which consent shall not be unreasonably withheld or
delayed, and that the Licensee shall keep UBC reasonably informed regarding the
progress of such action and indemnify UBC against any claims made against UBC
by the defendant in such action based upon or relating to such action or the
Licensed Patents, Technology, UBC Improvements or any Assigned Licensee
Improvements. Provided that it has first granted its prior written consent,
such consent not to be unreasonably withheld, UBC agrees to reasonably co-operate
to the extent of signing all necessary documents or to join as a party
plaintiff if legally required. All the direct and indirect costs and expenses
of Licensee in bringing and conducting the legal action or settlement shall be
paid by the Licensee including any out-of-pocket costs and expenses of UBC in
its providing assistance. All recoveries from such legal action are for the
benefit of, and shall be retained by, the Licensee.

 

8.5                                                                                 If any
complaint alleging infringement of any patent or other proprietary rights is
made against the Licensee or a Sublicensee based upon the use of the Patents,
improvement Patents, Technology or any Improvements or the manufacture, use or
sale of the Products, the following procedure will be adopted:

 

(a)                                  the Licensee
will promptly notify UBC on receipt of the complaint and will use reasonable
efforts to keep UBC reasonably informed of the actions and positions taken by
the complainant and taken or proposed to be taken by the Licensee on behalf of
itself or a Sublicensee (to the extent such information can be disclosed
without breaching confidentiality obligations or court orders or destroying
privilege);

 

(b)                                 except as
provided in Article 8.5(d), all costs and expenses incurred by the
Licensee or any Sublicensee in investigating, resisting, litigating and
settling the

 

19

 

complaint, including the
payment of any award of damages and/or costs to any third party, will be paid
by the Licensee or any Sublicensee, as the case may be;

 

(c)                                  Licensee shall
not make any final disposition of the complaint in a manner that materially
negatively impacts the Licensed Patents, Technology, UBC Improvements or any
Assigned Licensee Improvements without full consultation with, and approval by,
UBC, such approval not to be unreasonably withheld;

 

(d)                                 UBC may elect
to participate as a party in any litigation involving the complaint to the
extent that the court may permit, provided that
UBC shall not take any actions that materially negatively impact Licensee’s
interests under this Agreement or in such litigation, and any direct additional
expenses incurred by the Licensee as the result of such participation will be
paid by UBC (subject to the possibility of recovery of some or all of the
additional expenses from the complainant); and

 

(e)                                  the Licensee
will pay all royalties payable under Article 5.1 of this Agreement to UBC
in trust from the date UBC receives notice of the complaint and until a
resolution of the complaint has been finalized. if the complainant is
successful, then the royalties paid to UBC in trust under this Article 8.5(e) will
be returned to the Licensee, provided that the amount being returned to the
Licensee is no more than the amount paid by the Licensee to the complainant in
the settlement or other disposition of the complaint. If the complainant does
not succeed, then UBC retains all royalties paid to it under this Article 8.5(e).

 

9.0                                                                               INDEMNITY &
LIMITATION OF LIABILITY

 

9.1                                                                                 The Licensee
indemnifies, holds harmless and defends UBC, its Board of Governors, officers,
employees, faculty, students, invitees and agents (the “Indemnitees”)
against any and all third party claims (including all associated legal fees and
disbursements actually incurred) against any such Indemnitee arising out of the
exercise by Licensee (or its Sublicensees) of any rights granted to Licensee
under this Agreement, including without limitation against any damages or
losses, consequential or otherwise, arising from any third party claim based in
any manner at all from or out of the use of the Licensed Patents, Technology, Improvements,
Products or Licensee Owned Improvement Product licensed under this Agreement,
by the Licensee or its Sublicensees or their customers or end-users.

 

9.2                                                                                 UBC’s total
liability, whether under the express or implied terms of this Agreement, in
tort (including negligence) or at common law, for any loss or damage suffered
by the Licensee, whether direct, indirect or special, or any other similar
damage that may arise or does arise from any breaches of this Agreement by UBC,
its Board of Governors, officers, employees, faculty, students or agents, is
limited to [*], less amounts actually paid by
UBC to the inventors of the Licensed Patents, Technology or Improvements out of
such payments received by UBC from the Licensee based on such inventorship in
accordance with UBC’s policies regarding payments to its inventors, and provided that any such liability on the part of UBC in
excess of CDN. [*] may be recovered by the
Licensee solely out of, and as a set off against, amounts payable by the
Licensee to UBC under this Agreement after the date of any award of such
damages or other liability.

 

9.3                                                                                 Subject to Article 9.1,
each Party acknowledges and agrees that the other Party will not be liable for
any special, punitive, consequential or incidental damages arising from any
breach or breaches of this Agreement.

 

20

 

9.4                                                                                 Notwithstanding
the termination or expiration of this Agreement, the rights and obligations in Article 9
will survive and continue to bind the each party and its successors and
assigns.

 

10.0                                                                        PUBLICATION &
CONFIDENTIALITY

 

10.1                                                                           Each party will
keep and use the other party’s Confidential Information in confidence and will
not, without the other party’s prior written consent, disclose the other party’s
Confidential Information to any person or entity, except to the party’s
permitted sublicensees (if such party is Licensee) directors, officers,
employees, faculty, students and professional advisors who require the
Confidential Information to assist such party in performing its obligations or
exercising its rights under this Agreement. Each party will use the other party’s
Confidential Information solely for the purposes permitted under this Agreement
and will not, without the other party’s prior written consent, use the other
party’s Confidential Information for any other purpose. The Licensee will
maintain an appropriate internal program limiting the distribution of JBC’s
Confidential Information to only those Sublicensees, officers, employees and
professional advisors who require such Confidential Information in performing
the Licensee’s obligations or exercising its rights under this Agreement and
who have signed appropriate nondisclosure agreements.

 

10.2                                                                           Notwithstanding
the foregoing, a party may disclose the other party’s Confidential Information
to the extent such disclosure is required by judicial or administrative
process, provided that such party will promptly notify the other party of such
requirement and allow it reasonable time to oppose the process before
disclosing the specific Confidential Information.

 

10.3                                                                           UBC is not
restricted from presenting at symposia, national or regional professional
meetings, or from publishing in journals or other publications, accounts of its
research relating to the Licensed Patents, Technology and any Improvements
(other than Licensee Owned Improvements), provided that with respect to the
Confidential Information only, the Licensee is provided with copies of the
proposed disclosure at least 60 days before the presentation or publication
date and does not, within 30 days after delivery of the proposed disclosure,
give notice to UBC indicating that it objects to the proposed disclosure. Any
objection to a proposed disclosure will specify the portions of the proposed
disclosure considered objectionable (the “Objectionable Material”). On
receiving notice from the Licensee that any proposed disclosure contains
Objectionable Material, UBC and the Licensee agree to work together to revise
the proposed disclosure to remove or alter the Objectionable Material in a
manner acceptable to both the Licensee and UBC, in which case the Licensee will
withdraw its objection. UBC is not restricted from publishing or presenting the
proposed disclosure as long as the Objectionable Material has been removed. Any
Objectionable Material will not be disclosed for six months from the date UBC
delivered the proposed disclosure to the Licensee. After six months from the
date UBC delivered the proposed disclosure to the Licensee, UBC is free to
present and/or publish the proposed disclosure whether or not it contains
Objectionable Material.

 

10.4                                                                           The Licensee
requires of UBC, and to the extent permitted by law UBC agrees, that this
Agreement, and each part of it, is confidential and will not be disclosed to
third parties, as the Licensee claims that the disclosure would or could reveal
commercial, scientific or technical information and would significantly harm
the Licensee’s competitive position and/or interfere with the Licensee’s
negotiations with prospective Sublicensees. Notwithstanding anything contained
in Article 10, the Licensee acknowledges and agrees that UBC may identify
the title of this Agreement, the parties to this Agreement and the names of the
inventors of the Licensed Patents, Technology and any Improvements, and that
UBC may also disclose to the

 

21

 

inventors of the Licensed
Patents and Technology the amount of all payments made to UBC by the Licensee
under this Agreement, the manner or method by which such payments were
calculated and all Payment Reports delivered to UBC by the Licensee in
connection with such payments.

 

10.5                                                                           Notwithstanding
the termination or expiration of this Agreement, the rights and obligations in Article 10
survive and continue to bind the parties, their successors and assigns.

 

11.0                                                                        PRODUCTION &
MARKETING

 

11.1                                                                           The Licensee
will not knowingly use the UBC Trade-marks or make reference to UBC or its name
in any advertising or publicity, without the prior written consent of UBC.
Without limitation, the Licensee will not issue a press release regarding this
Agreement or the ‘Licensed Patents, Technology, UBC Improvements or any
Assigned Licensee Improvements

 

without first obtaining UBC’s written approval, such
approval not to be unreasonably withheld or delay, and provided that Licensee
shall be permitted to make such public disclosures regarding the existence or
terms of this Agreement as are required to comply with applicable law or
regulation. If the Licensee is required by law or regulation to disclose the
Agreement or any of its terms, the Licensee will provide UBC with reasonable
prior notice to permit UBC to bring an application or other proceeding to
contest the requirement.

 

11.2                                                                           The Licensee
represents and warrants to UBC that it has the infrastructure, expertise and
resources to:

 

(a)                                  develop and
commercialize the Licensed Patents, Technology and any Improvements;

 

(b)                                 track and
monitor on an ongoing basis performance under the terms of each Sublicense
Agreement;

 

(c)                                  monitor patent
infringement regarding any patent relating to the Licensed Patents, Technology
and any Improvements licensed under this Agreement; and

 

(d)                                 handle the
Licensed Patents, Technology and any Improvements with care and without danger
to the Licensee, its employees, agents, or the public.

 

11.3                                                                           The Licensee
agrees that it will, throughout the Term:

 

(a)                                  use
Commercially Reasonable Efforts to develop and commercialize the Licensed
Patents, Technology and any Improvements allocating at least the same degree of
diligence, expertise, infrastructure, and resources as the Licensee is
allocating to other products developed and marketed by the Licensee that have a
similar profit potential, are at the same stage of development, and have
similar product life, patent position, market potential and regulatory issues;
and

 

(b)                                 use
Commercially Reasonable Efforts to promote, market and sell the Product and
Licensee Owned Improvement Product (once Regulatory Approval is achieved) in
the applicable countries and exploit the Licensed Patents, Technology and any
Improvements and to meet or cause to be met the market demand for the approved
Products and Licensee Owned Improvement Products and the potential use of the
Licensed Patents, Technology and any Improvements.

 

22

 

11.4                                                                           Without
Limiting the generality of the obligations set out in Article 11.3, the
Licensee will use Commercially Reasonable Efforts to [*]
according to the following development timeline:

 

(a)                                  Licensee will
use Commercially Reasonable Efforts to [*] within [*] of the Effective Date;

 

(b)                                 Licensee will
Use Commercially Reasonable Efforts to [*] within [*] of the Effective Date;

 

(c)                                  Licensee will
use Commercially Reasonable Efforts to [*] within [*] of the Effective Date; and

 

(d)                                 Licensee will
use Commercially Reasonable Efforts to [*] within [*] of the Effective Date.

 

It
is understood and agreed that actions by any Sublicensee may satisfy any of the
above timeline matters. The Licensee further acknowledges UBC’s objective in
licensing the Licensed Patents, Technology and any Improvements to the Licensee
is that the Licensee use Commercially Reasonable Efforts to promote, market and
sell Products (once Regulatory Approval is achieved) for use in several
therapeutic fields, including possible [*]. Therefore,
if the Licensee is developing a Product for a particular therapeutic field in
accordance with the timelines set out in Articles 11.4(a) through (d), but
is unable to develop, or cause to be developed other Product(s) within one
or more other therapeutic fields of use, then the Licensee will at the request
of UBC consider in good faith the grant by the Licensee of one or more
sublicenses of the Licensed Patents, Technology and any Improvements on
commercially reasonable terms to a third party or parties identified by UBC as
being able to develop, or cause to be developed Product(s) within one or
more of the therapeutic fields of use not being exploited by the Licensee.

 

11.5                                                                           If UBC believes
in good faith that the Licensee is in material breach of Article 11.3, UBC
may give notice to the Licensee under Article 18.3, which notice shall
specify particulars of the alleged breach. Within 30 days of receiving UBC’s
notice, the Licensee shall provide notice to UBC of its election to:

 

(a)                                  proceed with
remedying the breach in accordance with Article 18.3, or

 

(b)                                 dispute the
breach (“Dispute”) and refer the Dispute to
mediation in accordance with Articles 11.6; or

 

(c)                                  accept the
breach.

 

If
the Licensee elects to proceed with remedying the breach, then the Licensee
will be deemed to have waived any right to refer the matter to mediation in
accordance with Article 11.6. If the Licensee fails to make an election in
accordance with this Article, then the Licensee will be deemed to have accepted
the breach and UBC may terminate this Agreement.

 

11.6                                                                           If the Licensee
elects to refer the Dispute to mediation, UBC and Licensee will jointly appoint
an impartial, independent mediator with (to the extent available) expertise in
the research and development of pharmaceutical products and in licensing
agreements regarding such activities (the “Mediator”)
within 15 days of the Licensee’s election. On appointment of Mediator the
following rules and procedures will govern the conduct of the parties and
the Mediator before and during the mediation of a Dispute:

 

23

 

(a)                                  within 15 days
of the appointment of the Mediator, each party will provide to the Mediator and
to the other party a written summary of its position and copies of all
documents on which it intends to rely. On receiving a party’s summary and
documents, the other party then has 15 days to submit to the other party and
the Mediator a summary of such other party’s position in response to the party’s
position;

 

(b)                                 after each of
the Licensee and UBC has provided its summary and documents and response under Article 11.6(a),
but not more than 60 days from the appointment of the Mediator, the parties
agree to meet in the presence of the

 

Mediator with a view to
resolving the Dispute. The role of the Mediator will be to assist in
negotiating a resolution of a Dispute and will not make a binding decision without
the parties’ prior written agreement. Each party will use good faith, diligent
efforts to seek to agree to a resolution of the Dispute that is mutually
satisfactory and facilitates the diligent and profitable development and
commercialization of the Licensed Patents, Technology, Products and Licensee
Owned Improvement Products by or on behalf of Licensee;

 

(c)                                  the mediation
of a Dispute may be terminated by either party, by giving notice to the other
party:

 

(i)                                     if the other
party fails to comply with its obligations under Article 11.6; or

 

(ii)                                  if the parties
cannot agree on a resolution of the Dispute within 60 days from the appointment
of the Mediator;

 

(d)                                 any information
or documents disclosed by either party under this Article 11.6 must be
kept confidential and must not be used except to attempt to resolve the Dispute
in the context of the mediation; and

 

(e)                                  each party must
bear its own costs of complying with Article 11.6 and the parties must
bear equally the costs of any Mediator engaged.

 

11.7                                                                           If the parties
cannot agree on the resolution of the Dispute within 60 days from the
appointment of the Mediator, or if the mediation of the Dispute has been
terminated under Article 11.6(c), then the Licensee will (counting from
the end of the 60 day period) have a further 30 days to remedy the material
breach in accordance with Article 18.3(a) (if such breach in fact has
occurred). If the Licensee fails to remedy the breach (if such material breach
in fact has occurred) within such 30 day period then UBC may terminate this
Agreement, provided that it is understood and agreed if Licensee disputes that
such material breach has occurred, no such termination shall occur or be
permitted unless and until it is determined in a final judgment (which is no
longer subject to any appeal) that a material breach occurred and has not been
cured by Licensee.

 

12.0                                                                        ACCOUNTING
RECORDS & REPORTS

 

12.1                                                                           The Licensee
will maintain at its principal place of business, or another place as may be
most convenient, separate accounts and records of all Revenues, Sublicensing
Fees, Sublicense Agreements and all business done in connection with the
Patents, Improvement Patents, Technology or any Improvements. The accounts
and records will be in sufficient detail to enable proper returns to be made
under this Agreement and the Licensee will cause its Sublicensees to keep and
deliver to the Licensee similar accounts and records.

 

24

 

12.2                                                                           The Licensee
will complete and deliver to UBC:

 

(a)                                  within 60 days
of each and every Royalty Due Date, a completed Payment Report in the form
attached as Schedule “D”, (or an
amended form as required by UBC from time to time) together with the royalty
payable under this Agreement. A separate Payment Report shall be prepared and
delivered for each Sublicensee and Sublicense Agreement, including an
accounting statement setting out in detail how the amount of Revenue received
by such Sublicensee was determined and identifying each Sublicensee and the
location of the business of each Sublicensee. The first Payment Report will be
submitted within

 

60 days of the first Royalty
Due Date after the receipt of the first Revenue, and thereafter a Payment
Report shall be delivered every three months regardless of whether any Revenue
was received in the preceding period; and,

 

(b)                                 on or before December 1st
of each year during the Term, starting on December 1, 2007 an Annual
Report in the form attached as Schedule “D” (or an
amended form as required by UBC from time to time).

 

12.3                                                                           The calculation
of royalties will be carried out in accordance with generally accepted
accounting principles in the United States, or the standards and principles
adopted by the U.S. Financial Accounting Standards Board applied on a
consistent basis.

 

12.4                                                                           The Licensee
will retain the accounts and records referred to in Article 12.1 for at
least 6 years from when they were made and will permit a certified public
accountant from a nationally-recognized accounting firm selected by UBC, to
inspect, at UBC’s expense, the accounts and records during the Licensee’s
normal business hours. The Licensee will provide to accountant access to all
such accounts and records as necessary to verify the accounts and records
(including the accounts and records pertaining to Revenue received by any
Sublicensee(s)) and will allow copies to be made of the accounts, records and
agreements. If an inspection of the Licensee or Sublicensee’s records by such
accountant shows an underreporting or underpayment by the Licensee of any
amount to UBC, by more than five percent (5%) for any 12 month period, then the
Licensee will reimburse UBC for the cost of the inspection as well as pay to
UBC any amount found due (including any interest) within 30 days of notice by
UBC to the Licensee. If such inspection shows an overpayment by Licensee,
Licensee may credit such overpayment against any other amounts owed to UBC, provided that if there are no more payments owed then UBC
shall reimburse Licensee for the amount of such overpayment.

 

12.5                                                                           Any inspection
under Article 12.4 shall be subject to a confidentiality obligation under
which the inspecting accountant shall be under a confidentiality agreement to
ensure that all information provided to such Agreement under such Article remains
confidential and is treated as confidential by such accountant provided that
such accountant may disclose to UBC whether the royalty payments by Licensee
are accurate including all documentation supporting the accountant’s
determination, and any extent of any underpayment or overpayment.

 

13.0                                                                        INSURANCE

 

13.1                                                                           During the
Term, and for a period of three years thereafter, the Licensee will procure and
maintain insurance (including public liability and commercial general liability
insurance and insurance covering product liability), as would be acquired by a
reasonable and prudent businessperson carrying on a similar line of business at
a similar stage of development,

 

25

 

such insurance being at a
minimum sufficient to cover Licensee’s indemnification obligations under Section 9.1.

 

13.2                                                                           Without
limiting Article 13.1, one month before the start of any Human Clinical
Trials:

 

the
Licensee will give notice to UBC of the terms and amount of the product
liability, clinical trials, public liability, and commercial general liability
insurance and such other types of insurance which it has placed. This insurance
will:

 

(a)                                  be placed with
a reputable and financially secure insurance carrier;

 

(b)                                 include UBC,
its Board of Governors, faculty, officers, employees, students and agents as
additional insureds;

 

(c)                                  provide
coverage regarding all activities under this Agreement;

 

(d)                                 include a
waiver of subrogation against UBC, and a severability of interest and
cross-liability clauses; and

 

(e)                                  provide that
the policy cannot be cancelled or materially altered except on at least 30 days’
prior notice to UBC.

 

13.3                                                                           UBC may from
time to time request reasonable amendments to the terms or the amount of
coverage contained in the Licensee’s insurance policy, and Licensee will use
reasonable efforts to accommodate such reasonable requests. The Licensee will
provide to UBC for its approval certificates of insurance evidencing the
coverage seven days before the earlier of any Human Clinical Trials. The
Licensee will not:

 

(a)                                  start any Human
Clinical Trials, or

 

(b)                                 sell any
Product or Licensee Owned Improvement Products

 

at
any time unless, a certificate of insurance has been provided and approved by
UBC, and the insurance outlined in Article 13.2 is in effect.

 

13.4                                                                           The Licensee
will also require each Sublicensee to procure and maintain:

 

(a)                                  public
liability and commercial general liability insurance and such other types of
insurance as would be acquired by a reasonable and prudent businessperson
carrying on a similar line of business; and

 

(b)                                 in any event,
one month before the start of any Human Clinical Trials by the Sublicensee,
product liability, clinical trials, public liability and commercial general
liability insurance in reasonable amounts, with a reputable and financially
secure insurance carrier.

 

The
Licensee will ensure that all Sublicensees’ policies of insurance include UBC,
its Board of Governors, faculty, officers, employees, students and agents as
additional insureds.

 

14.0                                                                        ASSIGNMENT &
CHANGE OF CONTROL

 

14.1                                                                           The Licensee
will not assign or transfer this Agreement or any of its obligations under this
Agreement without the prior written consent of UBC, such consent not to be

 

26

 

unreasonably withheld or
delayed, provided that Licensee may assign this Agreement without such consent
to its Affiliate Company or to its successor in interest in connection with the
merger, acquisition or sale of all or substantially all of Licensee’s assets,
so long as such assignee provides to UBC in writing its agreement to undertake
and perform all of Licensee’s obligations under this Agreement as the assignee
of Licensee entire interests in the Agreement.

 

14.2                                                                           UBC will have
the right to assign its rights, duties and obligations under this Agreement to
a company of which it is the sole shareholder, or a society which it has
incorporated or which has purposes which are consistent with the objectives of
UBC. If UBC makes such an assignment, [*], provided that
UBC assigns to such company or society the entire right, title and interest in
and to all the Licensed Patents, Technology, UBC Improvements and any Assigned
Licensee Improvements and the company or society, as the case may be, signs a
written agreement which provides that the company or society assumes all
obligations or covenants from UBC and that the Licensee retains all rights
granted to the Licensee under this Agreement.

 

15.0                                                                        GOVERNING
LAW

 

15.1                                                                           This Agreement
is governed by, and will be construed in accordance with, the laws of the
Province of British Columbia and the federal laws of Canada, without regard to
any conflicts of law rules or principles that would require application of
different law. All parties agree that by executing this Agreement they have
attorned to the jurisdiction of the Supreme Court of British Columbia.

 

16.0                                                                        NOTICES

 

16.1                                                                           All reports and
notices or other documents that a party is required or may want to deliver to
any other party will be delivered:

 

(a)                                  in writing; and

 

(b)                                 either by
personal delivery or by registered or certified mail at the address for the
receiving party set out in Article 16.2 or as varied by any notice.

 

Any
notice personally delivered is deemed to have been received at the time of
delivery. Any notice mailed in accordance with this Article 16.1 is deemed
to have been received at the end of the fifth day after it is posted.

 

16.2                                                                           The address for
delivery of notices and instructions for making payments to UBC are set out in
the attached Schedule “F”. The address
for delivery of notices to the Licensee is set out below:

 

	
  Nicholas N. Vahanian,
  Chief Medical and Operations Officer

  
	
  NewLink Genetics
  Corporation

  
	
  Iowa State University
  Research Park

  
	
  2901 South Loop Drive,
  Suite # 3900

  
	
  Ames, Iowa 50010

  
	
   

  
	
  Telephone:

  	
  515-296-5555

  
	
  Fax:

  	
  515-296-5557

  

 

27

 

17.0                                                                        TERM

 

17.1                                                                           The term (the “Term”) of this Agreement starts on the Effective Date and
ends on:

 

(a)                                  the day that is
exactly 20 years later; or

 

(b)                                 the expiry of
the last Licensed Patent,

 

whichever is last to occur, unless terminated
earlier under Article 18.

 

18.0                                                                        TERMINATION
OF AGREEMENT

 

18.1                                                                           This Agreement
automatically and immediately terminates without notice to the Licensee if any
bankruptcy proceeding under the bankruptcy laws of the United States is started
by or against the Licensee.

 

18.2                                                                           UBC may, at its
option, immediately terminate this Agreement by giving notice to the Licensee
if one or more of the following occurs:

 

(a)                                  the Licensee
makes or suffers the appointment of a receiver or a receiver manager with
control of all or substantially all of Licensee’s assets; the termination of
all or substantially all of the Licensee’s employees; or the Licensee ceasing
or initiating a program intending to cease carrying on business;

 

(b)                                 any resolution
is passed or order made or other steps taken for the winding up, liquidation or
other termination of the existence of the Licensee;

 

(c)                                  if any
Sublicensee is in material breach of its Sublicense Agreement (and such breach
is causing harm to UBC), and the Licensee fails on receiving notice from UBC to
take all commercially reasonable steps under the terms of the Sublicense
Agreement to cause such Sublicensee to cure such breach; and

 

(d)                                 if the
Licensee, or any Affiliated Company, is in material breach of, any other
agreement between the Licensee or such Affiliated Company and UBC and the
material breach has not been cured within the time provided for the curing of
such breach under the terms of the other agreement.

 

18.3                                                                           Other than as
set out in Articles 18.1 and 18.2, a party may terminate this Agreement for any
material breach by the other party of its material obligation under this
Agreement provided that such material breach is
not cured by the breaching party after such party provides the following notice
to the party in breach:

 

(a)                                  45 days notice
(which notice provides particulars of the specific breach) in the case of any
breach which can reasonably be remedied within 45 days of the delivery of such
notice; or

 

(b)                                 if the breach
cannot be remedied within 45 days and the breach is not remedied within such
further period as may be reasonably necessary, or within 90 days after receipt
of notice (which notice provides particulars of the specific breach), whichever
is sooner.

 

28

 

18.4                                                                           If this
Agreement is terminated under Article 18.1 to 18.3, the Licensee will make
all outstanding royalty and other payments to UBC under Articles 5 and 6 that
have accrued and are owed prior to the date of termination, and UBC may proceed
to enforce payment of all outstanding royalties or other monies owed to UBC
that have accrued and are owed prior to the date of termination, and each party
may exercise any or all of the rights and remedies available under this
Agreement or otherwise available by law or in equity, successively or
concurrently, at the option of such party. Within five days of the Effective
Termination Date, the Licensee will deliver to UBC all Licensed Patents,
Technology, UBC Improvements and any Assigned Licensee Improvements in its
possession or control and has no further right of any nature at all in the
Licensed Patents, Technology, UBC Improvements or any Assigned Licensee
Improvements.

 

18.5                                                                           The Licensee
and all Sublicensees will cease to use the Licensed Patents, Technology, UBC
Improvements or any Assigned Licensee Improvements in any manner at all or to
manufacture or sell the Products within five days from the Effective
Termination Date. The Licensee will then deliver to UBC an accounting within 30
days from the Effective Termination Date. The accounting will specify the
inventory or stock of Products manufactured and remaining unsold on the
Effective Termination Date. Without limitation, if this Agreement is terminated
under Article 18.1, no Products will be sold without the prior written
consent of UBC. The Licensee will continue to make royalty and other payments
to UBC in the same manner specified in Articles 5 and 6 on all Products that
are sold in accordance with this Article 18.5, notwithstanding anything
contained in, or any exercise of rights by UBC, under Article 18.4.

 

18.6                                                                           Notwithstanding
the termination or expiration of this Agreement, Article 12 remains in
full force and effect until 6 years after:

 

(a)                                  all payments of
royalty required to be made by the Licensee to UBC under this Agreement have
been made by the Licensee to UBC; and

 

(b)                                 any other claim
or claims of any nature or kind at all made by UBC against the Licensee under
this Agreement has been settled or resolved in court.

 

19.0                                                                        MISCELLANEOUS
COVENANTS OF LICENSEE

 

19.1                                                                           The Licensee
represents and warrants to UBC that the Licensee is a corporation duly
organized, existing and in good standing under the laws of Iowa and has the
power, authority and capacity to enter into this Agreement and to carry out the
transactions contemplated by this Agreement, all of which have been duly and
validly authorized by all requisite corporate proceedings.

 

19.2                                                                           The Licensee
will comply with all applicable laws, regulations and ordinances, whether
Federal, State, Provincial, County, Municipal or otherwise, with respect to the
Patents, Improvement Patents, Technology and any Improvements and this
Agreement.

 

19.3                                                                           The royalties
specified in this Agreement are exclusive of taxes. If UBC is required to
collect a tax to be paid by the Licensee or any of its Sublicensees, the
Licensee will pay the tax to UBC on demand.

 

19.4                                                                           The Licensee
will pay interest on all amounts due and owing to UBC under this Agreement but
not paid by the Licensee on the due date, at the rate of 12.68% per annum,
calculated annually not in advance. The interest accrues on the balance of
unpaid amounts from time to time outstanding, from the date on which portions
of the amounts become due and owing until payment in full.

 

29

 

20.0                                                                        MANAGEMENT
OF CONFLICTS OF INTEREST

 

20.1                                                                           The Licensee
acknowledges that it is aware of UBC’s Conflict of Interest Policy #97, Patent
and Licensing Policy #88 and Research Policy #87 (http://www.policy.ubc.ca/),
and that UBC may amend these policies or introduce new policies from time to
time.

 

20.2                                                                           Subject to Article 20.3
the Licensee and UBC agree, that:

 

(a)                                  the facilities
and research programs of the Licensee will be conducted independently of all
UBC facilities, faculty, students or staff, and in particular, independently of
and from the Investigator and the laboratory facilities made available to the
Investigator by reason of the Investigator’s employment at UBC;

 

(b)                                 no students,
post-doctoral fellows or other UBC staff will participate or be involved in the
Licensee’s research, projects or utilize its facilities; and

 

(c)                                  any disclosures
of inventions made by the Investigator to the Licensee will be immediately
forwarded by the Licensee to UBC.

 

20.3                                                                           The Licensee
and UBC may, from time to time, enter into written agreements to permit
activities which would otherwise be prohibited by Article 20.2.

 

21.0                                                                        GENERAL

 

21.1                                                                           Nothing
contained in this Agreement is to be deemed or construed to create between the
parties a partnership or joint venture. No party has the authority to act on
behalf of any other party, or to commit any other party in any manner at all or
cause any other party’s name to be used in any way not specifically authorized
by this Agreement.

 

21.2                                                                           Subject to the
limitations in this Agreement, this Agreement operates for the benefit of and
is binding on the parties and their respective successors and permitted
assigns.

 

21.3                                                                           No condoning,
excusing or overlooking by any party of any default, breach or non-observance
by the other party at any time or times regarding any terms of this Agreement
operates as a waiver of that party’s rights under this Agreement. A waiver of
any term, or right under, this Agreement will be in writing signed by the party
entitled to the benefit of that term or right, and is effective only to the
extent set out in the written waiver.

 

21.4                                                                           No exercise of
a specific right or remedy by any party precludes it from or prejudices it in
exercising another right or pursuing another remedy or maintaining an action to
which it may otherwise be entitled either at law or in equity.

 

21.5                                                                           All terms which
require performance by the parties after the expiry or termination of this
Agreement, will remain in force despite this Agreement’s expiry or termination
for any reason.

 

21.6                                                                           Part or
all of any Article that is indefinite, invalid, illegal or otherwise
voidable or unenforceable may be severed and the balance of this Agreement will
continue in full force and effect.

 

21.7                                                                           The Licensee
acknowledges that UBC has represented to Licensee that the law firm of Richards
Buell Sutton LLP has acted solely for UBC in connection with this Agreement and
that all other parties have been advised to seek independent legal advice.

 

30

 

21.8                                                                           This Agreement
sets out the entire understanding between the parties and no changes are
binding unless signed in writing by the parties to this Agreement.

 

21.9                                                                           Time is of the
essence of this Agreement.

 

21.10                                                                     Unless the
contrary intention appears, the singular includes the plural and vice versa and
words importing a gender include other genders.

 

SIGNED BY THE PARTIES AS AN AGREEMENT on the 27 day of February,
2007, but effective as of the Effective Date.

 

	
  SIGNED FOR AND ON BEHALF of

  	
   

  
	
  THE UNIVERSITY OF BRITISH COLUMBIA

  	
   

  
	
  by its authorized signatories:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Barbara M. Campbell

  	
   

  
	
  Authorized Signatory

  	
  Barbara M. Campbell

  	
   

  
	
   

  	
  Associate Director

  	
   

  
	
   

  	
  University — Industry Liaison Office

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNED FOR AND ON BEHALF of

  	
   

  
	
  NEWLINK GENETICS CORPORATION

  	
   

  
	
  by its authorized signatories:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nicholas N. Vahanian

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  Nicholas N. Vahanian, Chief Medical & Operations Officer

  	
   

  
	
  Please print Name and Title of Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Please print Name and Title of Signatory

  	
   

  

 

31

 

CONFIDENTIAL

 

SCHEDULE “A”

 

DESCRIPTION OF “PATENTS” AND “TECHNOLOGY”

 

	
  UBC File #

  	
   

  	
  Inventor(s)

  	
   

  	
  Description

  	
   

  	
  Patent #

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  

 

 

SCHEDULE “B”

 

NOTICE OF EXERCISE OF OPTION

 

TO:                            THE UNIVERSITY
OF BRITISH COLUMBIA

 

NEWLINK GENETICS CORPORATION hereby exercises the Option
provided for in the License Agreement dated
                                ,
2006 (the “License Agreement”) to license the
following New Technology:

 

·                                                                                                                                                                 

 

·                                                                                                                                                                 

 

[IDENTIFY THE NEW TECHNOLOGY IN
RESPECT OF WHICH NEWLINK IS INTENDING TO EXERCISE ITS OPTION]

 

upon
the terms and conditions contained in Articles 2.4 et seq. of the License
Agreement between NewLink Genetics Corporation and The University of British
Columbia dated
                                  ,
2006.

 

Attached
hereto as is a Business Plan prepared in compliance with the License Agreement.

 

 

CONFIDENTIAL

 

SCHEDULE “C”

 

MANDATORY SUBLICENSING PROVISIONS

 

1.                                       The Sublicense
Agreement shall be personal to the Sublicensee, and shall not contain the right
to grant any further sub-sublicenses and shall not be assignable without the
prior written consent of UBC, such consent not to be unreasonably withheld],
except that the Sublicensee may assign such Sublicense Agreement without such
consent to its successor in interest pursuant to the acquisition or merger of
or sale of all or substantially all of the assets of such Sublicensee. In
addition, except as expressly provided herein, the Sublicensee shall not
transfer or otherwise dispose of any or all of the rights, duties or
obligations granted to it under the Sublicense Agreement (but provided that Sublicensee
may use third party contractors to perform routine functions on its behalf in
the development or commercialization of Products or Licensee Owned Improvement
Products).

 

2.                                       The Sublicensee
shall acknowledge all ownership of the sublicensed Technology, Improvements,
and Licensed Patents as set out in Article 2.1 of the License Agreement (in
this Schedule “C”, the “License
Agreement”).

 

3.                                       The Sublicensee
shall acknowledge that UBC has the right to use the Technology, Improvements
(other than Licensee Owned Improvements), and Licensed Patents without charge
in any manner whatsoever for research, scholarly publication, educational and
other non-commercial uses in all fields of use in accordance with the terms of
the License Agreement.

 

4.                                       Publication and
Confidentiality

 

(a)                                  The Sublicensee
shall keep and use all of UBC’s Confidential Information in confidence and will
not, without UBC’s prior written consent, disclose any of UBC’s Confidential
Information to any person or entity, except those of the Sublicensee’s
directors, officers, employees, technical consultants and professional advisors
who require said Confidential Information in connection with the Sublicensee
performing its obligations or exercising its rights under the Sublicense
Agreement. The Sublicensee shall also covenant and agree that it will initiate
and maintain an appropriate internal program limiting the internal distribution
of UBC’s Confidential Information to only those directors, officers, employees,
technical consultants and professional advisors who require said Confidential
Information in connection with the Sublicensee performing its obligations or
exercising its rights under the Sublicense Agreement and who are under
obligations of confidentiality consistent to those of the License Agreement.

 

(b)                                 The Sublicensee
shall acknowledge that UBC shall not be restricted from presenting at symposia,
national or regional professional meetings, or from publishing in journals or
other publications, accounts of its research relating to the Technology and any
Improvements (other than Licensee Owned Improvements) in accordance with the
terms of the License Agreement.

 

 

5.                                       The Sublicensee
shall agree not to use UBC’s name, trade-marks, service marks, logos, insignia,
seal, or designs without the prior written consent of UBC, such consent not to
be unreasonably withheld.

 

6.                                       The Sublicensee
shall procure and maintain insurance in accordance with Article 13.4 of the
License Agreement.

 

7.                                       The Sublicensee
shall acknowledge and agree that UBC makes no representations, conditions or
warranties, either express or implied, with respect to the Licensed Patents,
Technology, Improvements, Products or Licensee Owned Improvement Products.
Without limiting the generality of the foregoing, the Sublicensee shall
acknowledge that:

 

(i)                                     UBC
specifically disclaims any express or implied warranty, condition or
representation as to title to the Licensed Patents, Technology or any
Improvements or that anything made, used, sold or otherwise disposed of under
the license granted in the Sublicense Agreement will not infringe the patents,
copyrights, trade-marks, industrial designs or other intellectual property
rights of any third parties, including any patents, copyrights, trade-marks,
industrial design or other intellectual property rights owned, in whole or in
part, by UBC, or licensed by UBC to any third parties;

 

(ii)                                  UBC makes no
express or implied warranty, condition or representation that the Licensee or
Sublicensee has, or will have the freedom to operate or practice the Licensed
Patents, Technology or any Improvements, or the freedom to make, have made,
use, sell or otherwise dispose of Products or Licensee Owned Improvement
Products; or

 

(iii)                               UBC is under no
obligation to bring, prosecute or defend actions or suits against third parties
for infringement of patents, copyrights, trade-marks, industrial designs or
other intellectual property or contractual rights.

 

8.                                       The Sublicensee
shall acknowledge and agree that UBC will not be liable for any loss, whether
direct, consequential, incidental or special, which the Sublicensee or any
other third parties suffer, arising from any defect, error or fault of the
Licensed Patents, Technology, Improvements, Products or Licensee Owned
Improvement Products, or their failure to perform, even if UBC is aware of the
possibility of the defect, error, fault or failure. The Sublicensee will also
acknowledge that it has been advised to undertake its own due diligence
regarding the Licensed Patents, Technology, Improvements, Products or Licensee
Owned Improvement Products, and that UBC is under no obligation to bring,
prosecute or defend actions or suits against third parties for infringement of
patents, copyrights, trade-marks, industrial designs or other intellectual
property or contractual rights in relation to the Licensed Patents, Technology,
Improvements, Products or Licensee Owned Improvement Products.

 

9.                                       The Sublicensee
shall indemnify holds harmless and defends UBC and its Board of Governors,
officers, employees, faculty, students, invitees and agents against any and all
third party claims against such indemnitiees (including all associated legal
fees and disbursements actually incurred) arising out of the exercise by
Sublicensee of any rights under the Sublicense Agreement, including without
limitation against any damages or losses, consequential or otherwise, resulting
from such third party claims based in any manner at all from or out of the use
of the Licensed Patents, Technology, Improvements,

 

2

 

Products or Licensee Owned Improvement Products by
the Sublicensee or its customers or end-users.

 

10.                                 The Sublicensee
shall agree to limit its claims against UBC, whether under the express or
implied terms of the Sublicense Agreement or the License Agreement, in tort
(including negligence) or at common law, for any loss or damage suffered by the
Sublicensee, whether direct, indirect or special, or any other similar damage
that may arise or does arise from any actions or inactions, defaults or
breaches by UBC, its Board of Governors, officers, employees, faculty, students
or agents, to [*].

 

11.                                 The Sublicensee
shall also acknowledge and agree that UBC will not be liable for consequential
or incidental damages, including any consequential or incidental damages
arising from any breach or breaches of the Sublicense Agreement or the License
Agreement.

 

12.                                 The Sublicense
shall include termination provisions such that the Sublicense Agreement shall
terminate:

 

(a)                                  upon
termination of the License Agreement between UBC and the Licensee;

 

(b)                                 automatically
if any proceeding under any applicable bankruptcy or insolvency laws, or any
other legislation of similar purport, are started by or against the
Sublicensee;

 

(c)                                  if the
Sublicensee ceases to carry on business, or any resolution is passed or order
made or other steps taken for the winding up, liquidation or other termination
of the existence of the Sublicensee;

 

(d)                                 if the
Sublicensee is in material default under any term of the Sublicense Agreement
and:

 

(i)                                     if such default
is reasonably curable within thirty (30) days after receipt of notice of such
default and such default is not cured within thirty (30) days after receipt of
written notice thereof, or

 

(ii)                                  if such default
is not reasonably curable within thirty (30) days after receipt of written
notice thereof, and such default is not cured within such further reasonable
period of time as may be necessary for the curing of such default;

 

(e)                                  if the
Sublicensee fails to procure or maintain insurance as required under the
Sublicense Agreement.

 

13.                                 The Sublicensee
shall cease to use the Licensed Patents, Technology, Improvements in any manner
whatsoever and shall cease to manufacture Products within five days from the
effective date of termination of the Sublicense Agreement. If the Sublicense
Agreement is terminated due to a default of the Licensee, then the Sublicensee
will be entitled to dispose of all previously made Products, but no more, and
the terms of the Sublicense Agreement shall continue to be applicable during
the period that the Sublicensee carries out such disposition.

 

3

 

14.                                 The Sublicensee
shall maintain separate accounts and records of all business done in connection
with the Licensed Patents, Technology, Improvements, Products and Licensee
Owned Improvement Products. These accounts and records will be in sufficient
detail to enable proper returns to be made by the Licensee to UBC under the
License Agreement.

 

4

 

CONFIDENTIAL

 

SCHEDULE “D”

 

Payment Report for the Period
dd/mm/yy to dd/mm/yy

 

Instructions for Completing this Report

 

Please
fill out each section in full, identifying in the Royalty Summary Table the
unit sales and geographical sales areas. If the licence with UBC involves
several product lines, please prepare a separate Summary Table for each product
line. For licences involving one or more sublicenses, please prepare an
additional report for the Revenue received by each Sublicensee.

 

PLEASE NOTE: An interest rate of [*] per annum, calculated annually not
in advance will be assessed against all payments made after the due date.

 

	
  Licensee

  	
   

  	
  NewLink Genetics

  	
   

  	
  Agreement #

  	
   

  	
  UBC ID #

  
	
  (or sublicensee)

  	
   

  	
  Corporation

  	
   

  	
   

  	
   

  	
   

  

 

UBC Technology 

 

Report
Type (check one and complete as appropriate)

 

	
  Single Product Line

  	
  o

  	
  Product Line Trade Name                                                                                                         

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Multiple Products

  	
  o

  	
  Page             

  	
  Of        

  	
  Product Line Trade Name
                                                              

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sublicense Report

  	
  o

  	
  Page
              

  	
  Of         

  	
   

  

 

Payments
this Quarter (please complete separate tables for multiple product lines)
Royalties on Product Sales

 

	
   

  	
   

  	
  Units

  	
   

  	
  Unit Price

  (domestic

  	
   

  	
  Gross

  	
   

  	
  Less

  Allowances

  	
   

  	
  Net

  	
   

  	
  Royalty

  	
   

  	
  Conversion

  Rate (to

  	
   

  	
  Period Royalty

  Amount (Canadian

  $)

  	
   

  
	
  Country

  	
   

  	
  Sold

  	
   

  	
  currency)

  	
   

  	
  sales

  	
   

  	
  *

  	
   

  	
  Sales

  	
   

  	
  Rate

  	
   

  	
  Canadian $)

  	
   

  	
  This yr

  	
   

  	
  Last yr

  	
   

  
	
  Canada

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  US

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Europe

  (specify countries)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total Product Royalties

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Additional Payments (complete all that apply)

 

	
  Minimum Royalty Fee

  	
   

  	
  Amount 

  	
   

  	
   

  	
   

  	
   

  
	
  Milestone Payment

  	
   

  	
  Amount 

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Licence Maintenance Fee

  	
   

  	
  Amount 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  This Year

  	
   

  	
  Last Year

  
	
   

  	
   

  	
  Total Payments for Period 

  	
   

  	
   

  	
   

  	
   

  

 

*Please
indicate the reasons for returns or other allowances, if significant. Please
note any unusual occurrences that affected royalty amounts during the period.

 

	
  Prepared by

  	
   

  	
   

  	
  Date

  	
  Dd/mm/yy

  	
   

  	
  Phone

  	
   

  

 

I
                                      
(print name),                     
(title) hereby certify the foregoing information as true and correct.

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Date Signed

  

 

 

CONFIDENTIAL

 

SCHEDULE “E”

 

UBC License Agreement Annual
Report

 

The
information to be completed below shall constitute the annual report required
pursuant to the UBC License Agreement. Any information or documents provided by
the Licensee in this report shall not be interpreted as affecting the express
rights and obligations of the Licensee contained in the License Agreement. This
report is in addition to the Payment Report to accompany each royalty payment.

 

	
  Date of Report:

  	
  Person Preparing This Report:

  
	
   

  	
   

  
	
  Name of Licensee:

  	
  UBC File Number:

  
	
   

  	
   

  
	
  Jurisdiction of Corporation:

  	
  Head Office

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
  Contact Person for Company

  	
   

  
	
   

  	
   

  
	
  Licensed Technology:

  	
   

  
	
   

  	
   

  
	
  Telephone Number:

  	
  E-mail Address:

  

 

1.               Please provide a brief
report on the status of development of the UBC Technology, progress on creating
a commercial Product or Licensee Owned Improvement Product, or subsequent
marketing of the Product or Licensee Owned Improvement Product as appropriate.

 

 

2.               Has the Licensee filed any
patent applications for modifications or improvements relating to the original
UBC Technology?

 

 

3.               Has the Licensee become
aware of any potential 3rd party infringing on the UBC patents or related
intellectual property?  If so please
provide details and outline what the Licensee is doing about this.

 

 

4.               Has the Licensee met any
milestone or performance objectives in the past year as set forth in the
license agreement?  Please outline the
past year’s accomplishments.

 

 

5.               Does the Licensee expect to
meet any milestone or performance objective in the coming year as set forth in
the license agreement?  If so please
provide details.

 

 

6.               If applicable, has the
Licensee granted sublicenses to 3rd parties and
if so have copies of the sublicense agreement been provided to the Technology
Manager at UBC?  If not, please enclose a
copy of each sublicense agreement.

 

 

7.               Has the licensee made any
sales in the last 12 months?                                                          Yes o  No o

If so please submit a completed Royalty Payment
Report.

 

a)              Date of sales of Products or
Licensee Owned Improvement Products utilizing the Technology;

 

b)             Date of any clinical trials.

 

 

8.               Does your company have
public liability insurance?

 

 

9.               Please provide the Licensee’s
estimate or projection of gross sales revenue for products based on the UBC
Technology for the next 12 months by licensee and any sub-licensee.

 

 

10.         Is there any other
information relating to this License that you think we should be aware of?
Please summarize them below or contact us directly.

 

 

	
  Prepared by

  	
   

  	
   

  	
  Date

  	
  Dd/mm/yy

  	
   

  	
  Phone

  	
   

  

 

I
                                      
(print name),
                    
(title) hereby certify the foregoing information as true and correct.

 

	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  Date Signed

  

 

Once
completed, please submit this report to:

 

Managing Director c/o Licensing Compliance Officer

University — Industry Liaison Office

#103 — 6190 Agronomy Road,

Vancouver, BC

V6T 1Z3

 

2

 

SCHEDULE “F”

 

ADDRESS FOR NOTICES & PAYMENT
INSTRUCTIONS

 

1.                                       The address for
delivery of notices to UBC is:

 

The Director

University – Industry
Liaison Office

University of British Columbia

#103 – 6190
Agronomy Road

Vancouver, British Columbia

V6T 1Z3

Telephone:                                    (604) 822-8580

Fax:                                                                        (604) 822-8589

 

2.                                       Payment of all
amounts due to UBC under the terms of this license may be made as follows:

 

a)                                      by cheque made
payable to “The University of British Columbia” delivered to UBC at the above
address; or

 

b)                                     by wire
transfer in accordance with the instructions set out below:

 

Note:  Please ensure ALL of the information is
provided for efficient receipt of wire payments:

 

	
  For CAD $ Deposits via wire

  	
   

  	
  For USD Deposits via wire:

  
	
  (General:)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Pay Via: [*]

  	
   

  	
  Pay Via:  [*]

  
	
   

  	
   

  	
   

  
	
  Pay to:  [*]

  	
   

  	
  Pay to:  [*]

  
	
   

  	
   

  	
   

  
	
  Bank Address:

  [*]

  	
   

  	
  Bank Address:

  [*]

  
	
   

  	
   

  	
   

  
	
  For Account:  [*]

  	
   

  	
  For Account:  [*]

  
	
   

  	
   

  	
   

  
	
  Beneficiary: [*]

  Reference:  [*]

  Phone:  [*]

  Re: [*]

  For Royalties  [*]

  For Patent Fees  [*]

  Dept Name:  [*]

  	
   

  	
  Beneficiary:  [*]

  Reference:  [*]

  Phone:  [*]

  Re:  [*]

  For Royalties  [*]

  For Patent  Fees
  [*]

  Dept Name: [*]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cover/Reimbursement:  [*]

  Receiving Bank:      [*]

  Beneficiary Bank:   [*]

  

 

3Exhibit 10.25

 

LICENSE AGREEMENT

 

BETWEEN

NEWLINK GENETICS

 

 

AND

 

DREXEL UNIVERSITY

 

EFFECTIVE AS OF

 

 

OCTOBER 13th, 2004

 

 

LICENSE
AGREEMENT

 

This
License Agreement (this “Agreement”) is made on October, 13th, 2004, by and between
Drexel University, a Pennsylvania nonprofit corporation, with offices located
at 3201 Arch Street, Suite 100, Philadelphia, Pennsylvania 19104 (“DREXEL”),
and NewLink Genetics Corporation, a Delaware for-profit corporation (“LICENSEE”),
with its principal offices at Iowa State University Research Park, 2901 South
Loop Drive, Suite 3900. This Agreement is effective as of October, 13th, 2004 (the “Effective Date”).

 

BACKGROUND

 

1.                                       DREXEL owns
certain intellectual property developed by Dr. Uri Galili of DREXEL
relating to Compositions and methods for vaccines comprising .alpha.-galactosyl
epitopes, as described more fully in Attachment 1;

 

2.                                       DREXEL owns the
United States letters patent and/or applications therefore listed in Attachment
1 to this Agreement relating to the intellectual property developed by Drs. Uri
Galili and Patricia M. Repik as described above;

 

3.                                       LICENSEE
desires to obtain the exclusive right and license to use and exploit the
intellectual property developed by Drs. Uri Galili and Patricia M. Repik
described in Attachment 1.

 

4.                                       DREXEL has
determined that the exploitation of the intellectual property developed by Drs. Uri
Galili and Patricia M. Repik is in the best interest of DREXEL and is
consistent with its educational and research missions and goals.

 

NOW,
THEREFORE, in consideration of the promises and covenants contained in this
Agreement and intending to be legally bound, the parties agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.1.                              “Affiliate”
means any legal entity directly or indirectly controlling, controlled by or
under common control with LICENSEE that has executed (a) this Agreement or
(b) a written joiner agreement, in a form satisfactory to DREXEL, agreeing
to be bound by all of the terms and conditions of this Agreement as if such
Affiliate were an original party to this Agreement. For purposes of this
Agreement, “control” means the direct or indirect ownership of more than fifty
percent (50%) of the outstanding voting securities of a legal entity, or the
right to receive more than fifty percent (50%) of the profits or earnings of a
legal entity, or the right to control the policy decisions of a legal entity.

 

 

1.2.                              “Agreement”
shall have the meaning given in the first paragraph hereof.

 

1.3.                              “Calendar
Quarter” means each three-month period, or any portion thereof, beginning on January 1,
April 1, July 1 and October 1.

 

1.4.                              “Confidential
Information” means and includes all technical information, inventions,
developments, discoveries, software, know-how, methods, techniques, formulae,
data, processes and other proprietary ideas, whether or not patentable or
copyrightable, regardless whether DREXEL identifies such information as
confidential or proprietary at the time it is delivered or communicated to
LICENSEE.

 

1.5.                              “Default” shall
have the meaning given in Section 5.3

 

1.6.                              “Development
Plan” means a plan for the development and/or marketing of the Patent Rights
and Technical Information that demonstrates LICENSEE’s capability to bring the
Patent Rights and Technical Information to practical application and is more
fully set forth in Attachment 2.

 

1.7.                              “Effective Date”
shall have the meaning given in the preamble hereof.

 

1.8.                              “Fair Market
Value” means the cash consideration that LICENSEE or its Sublicensee would
realize from an unaffiliated, unrelated buyer in an arm’s length sale of an
identical item sold in the same quantity and at the same time and place of the
transaction.

 

1.9.                              “Indemnified
Party” shall have the meaning given in Section 8.2.

 

1.10.                        “Field of Use”
means Compositions and methods for vaccines comprising .alpha.-galactosyl
epitopes for diagnosis and treatment of cancer, viral and other infectious
diseases.

 

1.11.                        “Liability” and
“Liabilities” shall have the meaning given in Section 8.2.

 

1.12.                        “License” shall
mean the license granted by DREXEL to LICENSEE pursuant to Section 2.1.

 

1.13.                        “Licensed
Product(s)” means products that are made, made for, used or sold by LICENSEE or
any Sublicensees and that:  (a) in
the absence of this Agreement would infringe at least one claim of Patent Rights;
(b) use a process or machine covered by a claim of Patent Rights; or
(c) use, at least in part, any Technical Information.

 

1.14.                        “LICENSEE”
shall have the meaning given in the first paragraph of this Agreement.

 

1.15.                        “Net Sales”
means the consideration or Fair Market Value attributable to the Sale of any
Licensed Product(s), less qualifying costs directly attributable to such Sale
and actually

 

2

 

identified
on the invoice and borne by LICENSEE or its Sublicensee. Such qualifying costs
shall be limited to the following:

 

1.15.1                  Discounts, in amounts
customary in the trade, for quantity purchases, for prompt payments and for
wholesalers and distributors;

 

1.15.2                  Credits or refunds, not
exceeding the original invoice amount, for claims or returns;

 

1.15.3                  Prepaid outbound
transportation expenses and transportation insurance premiums; and

 

1.15.4                  Sales and use taxes and
other fees imposed by a governmental agency.

 

1.16.                        “Patent Rights”
means all patent rights represented by or issuing from the United States or
foreign patents listed in Attachment 1 or the patents issuing from the United
States or foreign patent applications listed in Attachment 1, and their foreign
counterparts and extensions, including continuation, divisional and re-issue
applications and continuation-in-part applications.

 

1.17.                        “Sale” means
any bona fide transaction for which consideration is received or expected for
the sale, use, lease, transfer or other disposition of Licensed Product(s) excluding
any sale, use, lease, transfer or other disposition to a Sublicensee unless
such Sublicensee is an end user. A Sale of Licensed Product(s) shall be
deemed completed at the time LICENSEE or its Sublicensee invoices, ships, or
receives payment for such Licensed Product(s), whichever occurs first. Sale
shall not include the non-compensated use, transfer or other disposition of
Licensed Product for research, development or clinical trial purposes.

 

1.18.                        “Sell Off Right”
shall have the meaning given in Section 5.8.

 

1.19.                        “Sublicense”
shall have the meaning given in Section 2.4.1.

 

1.20.                        “Sublicense
Assignment” shall have the meaning given in Section 2.4.2.

 

1.21.                        “Sublicensee”
shall have the meaning given in Section 2.4.1.

 

1.22.                        “Technical
Information” means all the information contained in the patents and the patent
applications listed in Attachment 1 (other than the information referenced
from patents and publications cited in such patents and patent applications)
and any other technical information disclosed or referenced in
Attachment 1, in each case that is necessary or useful for practicing the
invention(s) covered by Patent Rights.

 

1.23.                        “Transaction
Documents” means this Agreement.

 

1.24.                        “Trigger Event”
means any of the following:

 

3

 

1.24.1                  If LICENSEE becomes
insolvent, bankrupt or generally fails to pay its debts as such debts become
due; is adjudicated insolvent or bankrupt; admits in writing its inability to
pay its debts; or shall suffer a custodian, receiver or trustee for it or
substantially all of its property to be appointed and, if appointed without its
consent, not be discharged within thirty (30) days; makes an Assignment for the
benefit of creditors; or suffers proceedings under any law related to
bankruptcy, insolvency, liquidation or the reorganization, readjustment or the
release of debtors to be instituted against it and, if contested by it, not
dismissed or stayed within ten (10) days;

 

1.24.2                  If proceedings under any law
related to bankruptcy, insolvency, liquidation, or the reorganization,
readjustment or the release of debtors are instituted or commenced by LICENSEE;

 

1.24.3                  If LICENSEE shall by any act
or failure to act indicate its consent to, approval of or acquiescence in any
of the proceedings described in Sections 1.24.1 or 1.24.2; or [NOTE: The bankruptcy of a Sublicensee or an Affiliate may have no
effect whatsoever on NewLink’s ability to perform its obligations tinder this
Agreement.  Only NewLink’s own bankruptcy/non-performance
is an appropriate termination trigger.]

 

1.24.4                  If a Sublicensee or
Affiliate experiences the circumstances described in 1.24.1, 1.24.2 or 1.24.3
and the LICENSEE fails to terminate the Sublicense or provide adequate
assurances to DREXEL that LICENSEE will cover all royalty obligations that
would arise under such Sublicensee.

 

ARTICLE 2

 

LICENSE GRANT

 

2.1                                 License Grant.  DREXEL grants to LICENSEE and its Affiliates
for the term of this Agreement an exclusive, world-wide license under the Patent
Rights to make, have made, use, import, sell and offer for sale Licensed
Product(s) in the Field of Use, except that to the extent that any
Affiliate exercises any rights granted by DREXEL hereunder, LICENSEE remains
primarily liable to DREXEL for the duties and obligations of any Affiliate
hereunder, and any act or omission of an Affiliate would be deemed to be a
breach by LICENSEE of this Agreement. 
DREXEL grants to LICENSEE only the qualified right to grant sublicenses
as more fully described in Section 2.4. 
No other rights or licenses are granted.

 

2.2                                 Exclusivity. The License
is exclusive, except that DREXEL may use and permit other nonprofit
organizations to use the Patent Rights and the Technical Information for
educational and non-commercial research purposes.

 

2.3                                 U.S. Government
Rights. LICENSEE or its Affiliates acknowledge that pursuant to Public Laws
96-517, 97-256 and 98-620, codified at 35 U.S.C. 200-212, the United States

 

4

 

government
retains certain rights in intellectual property funded in whole or part under
any contract, grant or similar agreement with a Federal agency. Pursuant to
these laws, the government may impose certain requirements regarding such
intellectual property, including but not limited to the requirement that
products resulting from such intellectual property sold in the United States
must be substantially manufactured in the United States. The License is
expressly subject to all applicable United States government rights as provided
in the above-mentioned laws and any regulations issued under those laws, as
those laws or regulations may be amended from time to time.

 

2.4                                 Sublicense
Conditions. The right to sublicense granted to LICENSEE under Section 2.1
is subject to the following conditions:

 

2.4.1                        LICENSEE may
sublicense the rights granted in this Agreement by written sublicense agreement
in a form acceptable to DREXEL, which form shall (a) prohibit the
sublicensee (“Sublicensee”) from further sublicensing without DREXEL’s prior
consent and (b) require that the Sublicensee be subject to the terms and
conditions of the license granted to LICENSEE under this Agreement (each, a “Sublicense”).

 

2.4.2                        Within thirty
(30) days after LICENSEE enters into any Sublicense LICENSEE must deliver to
DREXEL a complete copy of the Sublicense written in the English language
(DREXEL’s receipt of the Sublicense shall not constitute an approval of the
Sublicense or a waiver of any of DREXEL’s rights or LICENSEE’s obligations
under this Agreement).

 

2.4.3                        In the event of
a default by LICENSEE under Section 5.3 hereunder, all payments then or
thereafter due to LICENSEE from each of its Sublicensees shall, upon notice
from DREXEL to any such Sublicensee, become owed directly to DREXEL for the
account of LICENSEE; provided that DREXEL shall remit to LICENSEE the amount by
which such payments in the aggregate exceed the total amount owed by LICENSEE
to DREXEL. If this Agreement is terminated, DREXEL has the right to accept as
successors to LICENSEE such consent not to be unreasonably withheld or delayed,
existing Sublicensees in good standing at the date of termination, provided
that the Sublicensees consent in writing to be bound by all the terms and
conditions of this Agreement.

 

2.4.4                        Even if
LICENSEE enters into Sublicenses, LICENSEE remains primarily liable to DREXEL
for all of LICENSEE’s duties and obligations contained in this Agreement.
LICENSEE shall diligently enforce the terms and conditions of each Sublicense,
and if any Sublicensee commits an act or omission that would be a breach of
this Agreement if performed by LICENSEE, LICENSEE shall exercise all rights and
remedies it has under the Sublicense.

 

5

 

ARTICLE 3

 

FEES AND ROYALTIES

 

3.1                                 License
Initiation Fee and Royalties.

 

3.1.1                        In partial
consideration of the License, LICENSEE shall pay to DREXEL on the Effective
Date of this Agreement, a non-refundable license initiation fee of [*].

 

3.1.2                        In partial
consideration of the License, LICENSEE shall pay to DREXEL on the Effective
Date of this Agreement, a non-refundable fee of [*] for
past patent costs.

 

3.1.3                        In further
consideration of the exclusive License granted to LICENSEE, LICENSEE shall pay
to DREXEL the below listed royalties based on the Net Sales of Licensed
Products made, made for, used or sold by LICENSEE, its Affiliates and/or
Sublicensees.

 

	
   

  	
   

  	
  [*] of Net Sales
  for each Licensed Product that is a [*] on Sales
  in [*]*

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*] of Net Sales
  for each Licensed Product that is a [*] on Sales
  in [*]*

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*] of Net Sales
  for each Licensed Product that is an [*] on Sales
  in [*]*

  

 

	
   

  	
   

  	
  *Reduced
  if combined with other technologies (defined in Stacking royalty below).

  
	
   

  	
   

  	
   

  
	
  Stacking
  royalty

  (if combined with other technologies)

  	
   

  	
  [*] of Net Sales 

  for each Licensed Product that is an [*] on Sales
  in [*].

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*] of Net Sales
  for each Licensed Product that is an [*] on Sales
  in [*].

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*] of Net Sales
  for each Licensed Product that is an [*] on Sales
  in [*].

  

 

3.1.4                        In further consideration
of the exclusive License granted to LICENSEE, LICENSEE shall pay to DREXEL the
following milestone payments:

 

3.1.4.1               Upon [*] for any
Licensed Product, the sum of: [*] on each [*] for [*]. Capped at [*].

 

3.1.4.2               Upon [*] for any
Licensed Product, the sum of: [*] on each [*] for the United States. Capped at [*].

 

3.1.4.3               Upon [*] for any
Licensed Product, the sum of: [*] on each [*] for [*].

 

3.1.4.4               Upon [*] for any
Licensed Product, the sum of: [*] on each [*] for the United States.

 

3.1.5                        LICENSEE shall
pay to DREXEL [*] of any Sublicense initiation
fee or other such consideration paid by each Sublicensee of this Agreement,
other than up front sums received: (i) for the purchase of an equity
interest in LICENSEE at Fair Market Value; 

 

6

 

(ii) for research and
development work performed by or for LICENSEE not to exceed Fair Market Value;
or (iii) for purchase of a supply of Licensed Product at Fair Market
Value. Any non-cash consideration received by the LICENSEE from such
Sublicensees shall be valued at its Fair Market Value as of the date of
receipt.

 

3.1.6                        Net Sales of
any Licensed Product shall not be subject to more than one assessment of the
scheduled royalty; such assessment shall be the highest applicable royalty.

 

3.2                                 Diligence and
Maintenance Fees.

 

3.2.1                        LICENSEE shall
use its commercially reasonable efforts to [*].
Notwithstanding the above, LICENSEE (a) [*]
within 5 years of the Effective Date and/or (b) shall demonstrate on the
5th anniversary of the Effective Date and on each anniversary thereafter that
LICENSEE has [*] to make [[*].

 

3.2.2                        LICENSEE shall
provide to DREXEL, on the Effective Date and on each anniversary thereafter,
written progress reports, setting forth in such detail as DREXEL may reasonably
request:  (a) the progress of the
development, evaluation, testing and commercialization of each Licensed
Product; and (b) the LICENSEE’S strategic alliances with industry
counterparts that, in the best judgment of the LICENSEE, represent effective
and beneficial business relationships. LICENSEE shall also notify DREXEL in
writing within thirty (30) days after the first commercial sale of each
Licensed Product.

 

3.2.3                        LICENSEE shall
provide to DREXEL, at least as frequently as they are distributed to the Board
of Directors and/or management of LICENSEE copies of: all Board and managerial
reports that relate to the Technical Information, Patent Rights and Licensed
Products.

 

3.2.4                        LICENSEE shall
pay to DREXEL a non-refundable annual license maintenance fee of [*] due and payable on the first anniversary of the
Effective Date. Thereafter, the LICENSEE shall pay to DREXEL a non-refundable
annual license maintenance

 

7

 

fee
of [*] due and payable on each anniversary
of the Effective Date until the end of this Agreement.

 

3.3                                 Royalty Reports
and Records.

 

3.3.1                        Prior to the
commencement of Sales of Licensed Products, LICENSEE shall deliver to DREXEL
within forty-five days after the end of LICENSEE’s fiscal year a statement
signed by the Chief Financial Officer indicating that there have been no Sales
of Licensed Product for such fiscal year. Once that Sales of Licensed Products
are realized, LICENSEE shall deliver to DREXEL within forty-five (45) days
after the end of each Calendar Quarter a written report, certified by the chief
financial officer of LICENSEE, setting forth the calculation of the royalties
due to DREXEL for such Calendar Quarter, including, without limitation:

 

3.3.1.1               Number of Licensed Products involved in
Sales, listed by country;

 

3.3.1.2               Gross consideration for Sales of Licensed
Products, including all amounts invoiced, billed, or received;

 

3.3.1.3               Qualifying costs, as defined in Section 1.15,
listed by category of cost;

 

3.3.1.4               Net Sales of Licensed Products listed by
country;

 

3.3.1.5               Royalties owed to DREXEL, listed by category,
including without limitation earned, Sublicensee derived, and minimum royalty
categories; and

 

3.3.2                        LICENSEE shall
pay the royalties due under Sections 3.1 and 3.3 to DREXEL within thirty (30)
days following the last day of the Calendar Quarter in which the royalties
accrue. LICENSEE shall send DREXEL with such royalties the report described in Section 3.3.1.

 

3.3.3                        LICENSEE shall
maintain and cause its Sublicensees to maintain, complete and accurate books
and records that enable the royalties payable under this Agreement to be
verified. The records for each Calendar Quarter shall be maintained for three (3) years
after the submission of each report under Article 3. Upon reasonable prior
notice to LICENSEE, LICENSEE shall provide an independent auditor selected by
DREXEL and reasonably acceptable to LICENSEE with access to all books and
records relating to the Sales of Licensed Products by LICENSEE and its
Sublicensees to conduct a review or audit of those books and records. The
auditor shall disclose to DREXEL the findings of the accuracy of any report
made or payment submitted by LICENSEE during the audited period, but shall not
disclose to any of DREXEL any confidential information of LICENSEE not
necessary for such purpose. Access to LICENSEE’s books and records shall be
made available no more than once each Calendar Year, during normal business
hours, and during each of three (3) years after the

 

8

 

expiration
or termination of this Agreement. If DREXEL determines that LICENSEE has
underpaid any royalty due by five percent (5%)  or
more, then LICENSEE shall pay to DREXEL promptly the costs and expenses of
DREXEL and its accountants in connection with their review or audit, in
addition to such underpayment.

 

3.4                                 Currency, Place
of Payment, Interest, Payment of Expenses.

 

3.4.1                        All dollar
amounts referred to in this Agreement are expressed in United States dollars.
All payments to DREXEL under this Agreement shall be made in United States
dollars by check payable to “Drexel University”. If LICENSEE receives revenues
from Sales of Licensed Products in currency other than United States dollars,
then revenues shall be converted into United States dollars at the conversion
rate for the foreign currency as published in the eastern edition of The Wall
Street Journal as of the last business day of the applicable Calendar Quarter.

 

3.4.2                        Amounts that
are not paid when due shall accrue interest from the due date until paid, at a
rate equal to [*] per month or part thereof (or
the maximum allowed by law, if less).

 

ARTICLE 4

 

CONFIDENTIALITY

 

4.1                                 Non-Disclosure
by LICENSEE.  LICENSEE
shall maintain in confidence and not disclose to any third party any
Confidential Information of DREXEL. LICENSEE shall ensure that its employees
have access to Confidential Information only on a need-to-know basis and are
obligated in writing to abide by LICENSEE’s obligations under this Agreement.
The foregoing obligation shall not apply to:

 

4.1.1                        Information
that is known to LICENSEE prior to the time of disclosure or independently
developed by LICENSEE without use of or reference to the Confidential
Information, in each case, to the extent evidenced by written records promptly
disclosed to DREXEL;

 

4.1.2                        Information
disclosed to LICENSEE by a third party that has aright to make such disclosure;

 

4.1.3                        Information
that is or becomes patented, published or otherwise part of the public domain
as a result of acts by DREXEL or a third person obtaining such information as a
matter of right; or

 

4.1.4                        Information
that is required to be disclosed by order of United States governmental
authority or a court of competent jurisdiction; provided that LICENSEE shall
use best efforts to obtain confidential treatment of such information as
permitted by the agency or court.

 

9

 

4.2                                 Limited
Non-Disclosure by DREXEL. 
DREXEL shall not be obligated to accept any confidential information
from LICENSEE except for the reports required in Sections 3.2 and 3.3. DREXEL
shall not disclose those reports to any third party other than DREXEL’s outside
advisors who are bound by obligations of confidentiality (subject to exceptions
similar to these applicable to LICENSEE under Section 4.1). DREXEL bears
no institutional responsibility for maintaining the confidentiality of any
other information of LICENSEE.

 

ARTICLE 5

 

TERM AND TERMINATION

 

5.1                                 Term.  This Agreement, unless sooner terminated as
provided in this Agreement, terminates upon expiration of the last to expire or
become abandoned of the Patent Rights.

 

5.2                                 Termination by
LICENSEE. LICENSEE may, upon sixty (60) days written notice
to DREXEL, terminate this Agreement by doing all of the following:

 

5.2.1                        Ceasing to
make, have made, use, import, sell and offer for sale all Licensed Products;

 

5.2.2                        Terminating all
Sublicenses, and causing all Sublicensees and Affiliates to cease making,
having made, using, importing, selling and offering for sale all Licensed
Products; and

 

5.2.3                        Paying all
monies owed to DREXEL under this Agreement, up to the date of termination of
this Agreement.

 

5.3                                 Termination by
DREXEL. DREXEL may terminate this Agreement if any of the following events of
default (“Default”) occur:

 

5.3.1                        LICENSEE is
more than thirty (60) days late in paying to DREXEL royalties, expenses, or any
other monies due under this Agreement and LICENSEE does not pay DREXEL in full
within ten (10) days after written notice of the failure to pay.

 

5.3.2                        LICENSEE
experiences a Trigger Event; or

 

5.3.3                        LICENSEE
breaches this Agreement (other than a breach solely under Sections 5.3.1 or
5.3.2) and does not cure the breach within sixty (60) days after written notice
of the breach.

 

5.4                                 Effect of
Termination. In the event of a termination under Sections 5.1
or 5.3 hereof, all duties of DREXEL and all rights (but not duties) of LICENSEE
and any Affiliate and/or Sublieensee under this Agreement shall immediately
terminate without the necessity of any action being taken either by DREXEL or
by LICENSEE or any Affiliate or Sublicensee. Upon and after any termination of
this Agreement, LICENSEE and any Affiliate and/or

 

10

 

Sublicensee shall refrain from further manufacture, sale, marketing,
importation and/or distribution of Licensed Product(s), except as provided in
this Article 5.

 

5.5                                 Return of
Confidential Information. Upon termination of this Agreement,
LICENSEE and any Affiliate and/or Sublicensee shall, at DREXEL’s request,
return to DREXEL all Confidential Information.

 

5.6                                 Inventories. Upon
termination of this Agreement, LICENSEE shall cause physical inventories to be
taken immediately of: (a) all completed Licensed Product(s) on hand
under the control of LICENSEE or any Affiliate or Sublicensee; and (b) such
Licensed Product(s) as are in the process of manufacture and component
parts thereof as of the date of termination of this Agreement, which
inventories shall be reduced to writing. LICENSEE shall deliver copies of such
written inventories, verified by an officer of LICENSEE forthwith to DREXEL.
DREXEL shall have 45 days after receipt of such verified inventories within
which to challenge the inventory and request an audit. Upon five days written
notice to LICENSEE, DREXEL and its agents shall be given access during business
hours to the premises of LICENSEE, its Affiliates and/or Sublicensees for the
purpose of conducting an audit. Upon the termination of this Agreement,
LICENSEE shall, at its own expense forthwith remove, efface or destroy all
references to DREXEL from all advertising or other materials used in the
promotion of LICENSEE’s business or the business of any Affiliate or
Sublicensee and LICENSEE and any Affiliate and/or Sublicensee shall not
thereafter represent in any manner that it has rights in or to the Patent
Rights or Licensed Product(s).

 

5.7                                 Sell Off Rights.
Notwithstanding the foregoing, if this Agreement terminates other than pursuant
to Section 5.1, 5,3.1 or 5.3.2, LICENSEE and its Affiliates shall have a period
of six (6) months to sell off its inventory of Licensed Product(s) existing
on the date of termination of this Agreement and shall pay royalties to DREXEL
with respect to such Licensed Product(s) within thirty (30) days following
the expiration of such six-month period (“Sell Off Right”).

 

5.8                                 Survival. LICENSEE’s
obligation to pay all monies owed accruing under this Agreement shall survive
termination of this Agreement. In addition, the provisions of Article 4 -
Confidentiality, Article 5 - Term and Termination, Article 8 -
Disclaimer of Warranties; Indemnification, Article 9 Use of DREXEL’s Name;
Independent Contractor and Article 10 - Additional Provisions shall
survive such termination.

 

ARTICLE 6

 

PATENT MAINTENANCE AND
REIMBURSEMENT

 

DREXEL
retains control over the prosecution and maintenance of Patent Rights.
Notwithstanding the foregoing, DREXEL shall obtain LICENSEE’s consent prior to
filing any

 

11

 

additional
patent application(s) in any country not identified on Attachment 1.
LICENSEE shall reimburse DREXEL for all reasonable documented attorneys fees,
expenses, official fees and other charges incident to the preparation,
prosecution and maintenance of Patent Rights within thirty (30) days after
LICENSEE’s receipt from time to time of invoices for such fees, expenses and
charges. DREXEL shall seek reasonable claims to protect the Patent Rights
consistent with DREXEL’s overall patent strategy. DREXEL’s patent counsel shall
keep LICENSEE advised as to the status of the Patent Rights by providing
LICENSEE, in a timely manner at least thirty (30) days prior to their due date,
with copies of all official documents and correspondence relating to the
filing, prosecution, maintenance, and validity of the Patent Rights. LICENSEE
shall have fifteen (15) calendar days to review and comment on patent-related
documents prior to the filing of such documents and correspondence. DREXEL
shall not abandon prosecution of any patent application or maintenance of any patent
with the Patent Rights without first notifying LICENSEE sixty (60) days prior
to any bar date, of DREXEL’s intention and reasons therefore, and providing
LICENSEE with reasonable opportunity to assume responsibility for prosecution
and maintenance of such patents and patent applications. However, with respect
to the issued patents, DREXEL’S patent counsel will send invoices directly to
LICENSEE for patent fees and taxes related to maintenance of such patents, with
copies to DREXEL, at least 60 days prior to a deadline. LICENSEE shall pay such
invoices directly to such patent counsel at least 30 days prior to the
deadline, with a copy of correspondence and payment to DREXEL.

 

ARTICLE 7

 

INFRINGEMENT AND
LITIGATION

 

7.1                                 Notification of
Infringement. DREXEL and LICENSEE are responsible for notifying
each other promptly of any infringement of Patent Rights which may come to
their attention. DREXEL and LICENSEE shall consult one another in a timely
manner concerning any appropriate response to the infringement.

 

7.2                                 Prosecution by
LICENSEE. LICENSEE may prosecute such infringement at its
own expense. LICENSEE shall not settle or compromise any such suit in a manner
that imposes any obligations or restrictions on DREXEL or grants any rights to
the Technical Information or the Patent Rights, without DREXEL’s prior written
permission. Except as otherwise provided in Section 7.3, financial
recoveries from any such litigation will first be applied to reimburse LICENSEE
for its litigation expenditures with additional recoveries being paid to
LICENSEE, subject to a royalty due DREXEL based on the provisions of Article 3.

 

7.3                                 Intervention by
DREXEL. LICENSEE’s rights under Section 7.2 are subject to the
continuing right of DREXEL to intervene at DREXEL’s own expense and join
LICENSEE in any claim or suit for infringement of the Patent Rights. Any
consideration received by LICENSEE in settlement of any claim or suit shall be
shared between DREXEL and LICENSEE in proportion with their share of the
litigation expenses in such infringement action.

 

12

 

7.4                                 Prosecution by
DREXEL. If LICENSEE fails to prosecute any infringement, then DREXEL may
prosecute such infringement at its own expense. In such event, financial
recoveries will be entirely retained by DREXEL.

 

7.5                                 Cooperation. In any action
to enforce any of the Patent Rights, either party, at the request and expense
of the other party shall cooperate to the fullest extent reasonably possible.
This provision shall not be construed to require either party to undertake any
activities, including legal discovery, at the request of any third party except
as may be required by lawful process of a court of competent jurisdiction.

 

ARTICLE 8

 

DISCLAIMER OF WARRANTIES;
INDEMNIFICATION

 

8.1                                 NO WARRANTIES. DREXEL
represents and warrants to LICENSEE that: 
(i) DREXEL has sufficient legal and/or beneficial title under its
interest in to the Patent Rights necessary to grant the License; and
(ii) it has not granted any right to a third party under the Patent
Rights. EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE PATENT RIGHTS, TECHNICAL
INFORMATION, LICENSED PRODUCTS AND ALL OTHER TECHNOLOGY LICENSED UNDER THIS
AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS, AND DREXEL MAKES NO REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT
NOT OF LIMITATION, DREXEL MAKES NO REPRESENTATIONS OR WARRANTIES:  (a) OF COMMERCIAL UTILITY; (b) OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (c) THAT THE USE
OF THE PATENT RIGHTS, TECHNICAL INFORMATION, LICENSED PRODUCTS OR ANY
TECHNOLOGY LICENSED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT,
COPYRIGHT, TRADE SECRET OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF
OTHERS. DREXEL SHALL NOT BE LIABLE TO LICENSEE, LICENSEE’S SUBLICENSEES OR
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO: ANY
CLAIM ARISING FROM USE OF THE PATENT RIGHTS, TECHNICAL INFORMATION, LICENSED
PRODUCTS OR ANY TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR FROM THE MANUFACTURE,
USE OR SALE OF LICENSED PRODUCTS; OR ANY CLAIM FOR LOSS OF PROFITS, LOSS OR
INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND.

 

8.2                                 Indemnification. LICENSEE
shall indemnify, defend and hold harmless DREXEL, its trustees, officers,
agents and employees (individually, an “Indemnified Party”, and collectively,
the “Indemnified Parties”), from and against any and all third party liability,
loss, damage, action, claim or expense suffered or incurred by the Indemnified
Parties

 

13

 

(including attorneys’ fees and expenses)
(individually, a “Liability”, and collectively, the “Liabilities”) that results
from or arises out of [*]; and
(c) the enforcement by an Indemnified Party of this Section 8.2.
Without limiting the foregoing, LICENSEE shall defend, indemnify and hold
harmless the Indemnified Parties from and against any Liabilities resulting
from:

 

8.2.1                        Any product
liability or other claim of any kind related to the use by a third party of a
Licensed Product that was manufactured, sold or otherwise disposed by LICENSEE,
its Affiliates, its assignees, Sublicensees, vendors or other third parties;

 

8.2.2                        A claim by a
third party that the Technical Information or Patent Rights or the design,
composition, manufacture, use, sale or other disposition of any Licensed
Product infringes or violates any patent, copyright, trade secret, trademark or
other intellectual property rights of such third party; and

 

8.2.3                        Clinical trials
or studies conducted by or on behalf of LICENSEE, its Affiliates, its
assignees, Sublicensees or agents relating to the Technical Information, Patent
Rights or Licensed Products, including, without limitation, any claim by or on
behalf of a human subject of any such clinical trial or study, any claim
arising from the procedures specified in any protocol used in any such clinical
trial or study, any claim of deviation, authorized or unauthorized, from the
protocols of any such clinical trial or study, and any claim resulting from or
arising out of the manufacture or quality control by a third party of any
substance administered in any clinical trial or study.

 

8.3                                 Rights of
DREXEL in Liability Action. LICENSEE is not permitted
to settle or compromise any claim or action giving rise to Liabilities in a
manner that imposes any restrictions or obligations on DREXEL or grants any
rights to the Technical Information, Patent Rights or Licensed Products without
DREXEL’s prior written consent. If LICENSEE fails or declines to assume the
defense of any such claim or action within thirty (30) days after notice
thereof, then DREXEL may assume the defense of such claim or action for the
account and at the risk of LICENSEE, and any Liabilities related thereto shall
be conclusively deemed a liability of LICENSEE. The indemnification rights of
DREXEL or other Indemnified Party contained herein are in addition to all other
rights that such Indemnified Party may have at law or in equity or otherwise.

 

8.4                                 Insurance

 

8.4.1                        LICENSEE and
any Affiliate shall procure and maintain a policy or policies of comprehensive
general liability insurance, including broad form and contractual liability, in
a minimum amount of $2,000,000 combined single limit per occurrence and in the
aggregate

 

14

 

as
respects personal injury, bodily injury and property damage arising out of such
party’s performance of this Agreement.

 

8.4.2                        LICENSEE and
any Affiliate shall, upon commencement of clinical trials involving Licensed
Products, procure and maintain a policy or policies of product liability
insurance in a minimum amount of $3,000,000 combined single limit per
occurrence and in the aggregate as respects bodily injury and property damage
arising out of such party’s performance of this Agreement.

 

8.4.3                        The policy or
policies of insurance described in this Section 8.4 shall be issued by an
insurance carrier with an A.M. Best rating of “A-” or better and shall
name DREXEL as an additional insured with respect to LICENSEE’s performance of
this Agreement. LICENSEE and any Affiliate shall provide DREXEL with
certificates evidencing the insurance coverage required herein and all
subsequent renewals thereof. Such certificates shall provide that the insurance
carrier(s) notify DREXEL in writing at least 30 days prior to cancellation
or material change in coverage.

 

8.4.4                        DREXEL may
periodically review the adequacy of the minimum limits of liability insurance
specified in this Section, and DREXEL reserves the right in its reasonable
discretion to require LICENSEE and any Affiliate to adjust the liability
insurance coverages, but may not require LICENSEE to maintain limits in excess
of what is deemed reasonable in the biopharmaceutical industry. The specified
minimum insurance amounts do not constitute a limitation on the obligation of
LICENSEE and any Affiliate to indemnify DREXEL under this Agreement.

 

ARTICLE 9

 

USE OF DREXEL’S NAME

 

LICENSEE
and its Affiliates, employees, Sublicensees and agents shall not use, and LICENSEE
shall not permit its Sublicensees to use, DREXEL’s name or any adaptation
thereof, in any advertising or promotional materials or any DREXEL seal,
logotype, trademark, or service mark, or the name, mark, or logotype of any
DREXEL representative or organization in any way, without the prior written
consent of DREXEL in it sole discretion. Notwithstanding the above, Drexel and
LICENSEE will work cooperatively to agree upon language for press releases and
public statements.

 

15

 

ARTICLE 10

 

ADDITIONAL PROVISIONS

 

10.1                           No Agency. Nothing in
this Agreement shall be deemed to establish a relationship of principal and
agent between DREXEL and LICENSEE or its Affiliates or Sublicensees, nor any of
their agents or employees for any purpose whatsoever, nor shall this Agreement
be construed as creating any other form of legal association or arrangement
which would impose liability upon one party for the act or failure to act of
the other party.

 

10.2                           No Assignment. None of
LICENSEE, its Affiliates and/or Sublicensees is permitted to assign this
Agreement or any part of it, either directly or by merger or other operation of
law, without the prior written consent of DREXEL not to be unreasonably
withheld or delayed. Any prohibited assignment of this Agreement or the rights
hereunder shall be null and void. No assignment relieves LICENSEE, its
Affiliates and/or Sublicensees of responsibility for the performance of any
accrued obligations that LICENSEE, its Affiliates and/or Sublicensees has prior
to such assignment.

 

10.3                           No Waiver. No waiver of
any breach or condition of this Agreement shall be deemed to be a waiver of any
other subsequent breach or condition, whether of like or different nature.

 

10.4                           Notices. All notices,
requests, consents and other communications hereunder shall be in writing and
shall be delivered in person or sent overnight delivery by Federal Express or
by certified or registered mail, return receipt requested, or telexed in the
case of non-U.S. residents, and shall be deemed to have been given when hand
delivered, one (1) day after mailing when mailed by overnight courier
(e.g. Federal Express or Express Mail) or five (5) days after mailing by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

 

If to DREXEL:

 

Office of Research

Drexel University

Technology Commercialization

3225 Arch Street, Ground Floor

Philadelphia, Pennsylvania 19104

Attention: Anil Rastogi

Vice President for Special Projects

 

If to LICENSEE:

 

Nicholas Vahanian

NewLink Genetics Corporation

2901 South Loop Dr, Suite 3900

Ames, IA 50010

 

16

 

or
to such other names or addresses as LICENSEE or DREXEL, as the case may be,
shall designate by notice to each other person entitled to receive notices in
the manner specified in this Section 10.4.

 

10.5                           Governing Law
and Jurisdiction. This Agreement shall be construed and governed in
accordance with the laws of the State of Delaware, without giving effect to
conflict of law provisions of any jurisdiction. In the event that a party to
this Agreement perceives the existence of a dispute with the other party
concerning any right or duty provided for herein, the parties will, as soon as
practicable, confer in an attempt to resolve the dispute. If the parties are
unable to resolve such dispute amicably, then the parties hereby submit to the
exclusive jurisdiction of and venue in the state and federal courts located in
Delaware with respect to any and all disputes concerning the subject of, or
arising out of, this Agreement.

 

10.6                           No
Discrimination. DREXEL and LICENSEE, its Affiliates and
Sublicensees shall not discriminate against any employee or applicant for
employment because of race, color, sex, sexual or affectional preference, age,
religion, national or ethnic origin, handicap, or because he or she is a
disabled veteran or a veteran of the Vietnam Era.

 

10.7                           Compliance with
Laws. LICENSEE, its Affiliates and Sublicensees shall comply with all
prevailing laws, rules and regulations that apply to its activities or
obligations under this Agreement. Without limiting the foregoing, it is
understood that this Agreement may be subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities, articles and information,
including the Arms Export Control Act as amended in the Export Administration
Act of 1979, and that the parties’ obligations are 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
agency of the United States Government and/or written assurances by LICENSEE, its
Affiliates and/or Sublicensees that LICENSEE shall not export data or
commodities to certain foreign countries without prior approval of such agency.
DREXEL neither represents that a license is not required nor that, if required,
it will issue.

 

10.8                           Binding Nature
of Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns, except that any assignment by LICENSEE
must comply with Section 10.2 to be effective.

 

10.9                           Counterparts,
Headings and Exhibits. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The headings used in this
Agreement are for convenience only and are not to be considered in construing
or interpreting any term or provision of this Agreement. All Schedules and
Exhibits hereto are hereby incorporated in this Agreement and made a part
hereof.

 

17

 

10.10                     Integration and
Amendment. This Agreement embodies the entire agreement and
understanding among the parties hereto and thereto and supersede all prior
agreements and understandings relating to the subject matter hereof or thereof.
This Agreement may not be changed, modified, extended or terminated except by
written amendment executed by an authorized representative of each party.

 

10.11                     Severability. If any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable, then such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

 

10.12                     Number of Days. In computing
the number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided that if the final day of
any time period falls on a Saturday, Sunday or holiday on which Federal banks
are or may elect to be closed, then the final day shall be deemed to be the
next day which is not a Saturday, Sunday or such holiday.

 

18

 

IN
WITNESS WHEREOF, the parties, intending to be legally bound, have caused this
Agreement to be executed by their duly authorized representatives.

 

 

	
  DREXEL UNIVERSITY

  	
   

  	
  LICENSEE:

  
	
   

  	
   

  	
  NEW
  LINK GENETICS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Anil
  Rastogi

  	
   

  	
  By:

  	
  /s/Nicholas
  Vahanian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Anil
  Rastogi, Ph.D.

  	
   

  	
  Name:

  	
  Nicholas
  Vahanian, M.D.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  	
  Title:

  	
  Chief
  Medical and Operations Officer

  
	
   

  	
  for
  Special Projects

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  October 13,
  2004

  	
   

  	
  Date:

  	
  October 14,
  2004

  

 

19

 

Attachment
1 - List of Patents and Patent Applications

 

Drexel Patents:

 

[*]

 

20

 

Attachment
2 - Development Plan

 

[*]

 

21

 

Drexel
University and NewLink Genetics

 

Term Sheet
for License Agreement

 

September 15,
2004

 

	
  [*]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  

 

	
  Accepted and agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DREXEL UNIVERSITY

  	
   

  	
  NEWLINK GENETICS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/Anil Rastogi

  	
   

  	
  By:

  	
  /s/Nicholas Vahanian

  
	
   

  	
  Anil Rastogi, Ph.D.

  	
   

  	
   

  	
  Nicholas Vahanian, M.D.

  
	
   

  	
  Vice Provost & Vice President

  	
   

  	
   

  	
  Chief Medical and Operations Officer

  
	
   

  	
  Entrepreneurship & Technology Commercialization

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  Sept. 20, 2004

  	
   

  	
  Date: 

  	
  Sept. 21, 2004

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]