Document:

Exhibit 10.34

 

EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT (the “Agreement”) is made and entered into by and between LANKENAU INSTITUTE FOR MEDICAL RESEARCH (“LIMR”) and NEWLINK GENETICS CORPORATION (“NewLink”) for the licensing of certain intellectual property rights to NewLink, effective on this 23 day of April, 2009 (the “Effective Date”).

 

WHEREAS, LIMR owns certain technology and intellectual property rights developed by Dr. George Prendergast at LIMR relating to [*] inhibitors of Indoleamine 2, 3 Dioxygenase (“IDO”), and

 

WHEREAS, LIMR filed U.S. provisional patent application no. [*] covering such IDO inhibitors and related inventions as of [*]; and

 

WHEREAS, NewLink and LIMR have conducted further collaborative research on such IDO inhibitors and intend to [*]; and

 

WHEREAS, NewLink would like to obtain the exclusive, worldwide license rights from LIMR, , [*] and LIMR desires to grant such rights to NewLink, under LIMR’s interest in such technology and intellectual property, and in any improvements or derivatives thereof developed by LIMR or jointly by LIMR and NewLink, for the purpose of developing the technology into marketable therapeutic or diagnostic products.

 

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

 

1.                                       Definitions.

 

a.                                       Affiliate(s).  “Affiliate” means, with respect to NewLink, any individual, company or other business entity, in whatever country organized, that directly or indirectly controls, is controlled by, or is under common control with NewLink.  For purposes of this Agreement, the term “control” (with correlative meanings for the terms “controlled by” and “under common with”) shall mean that the applicable individual, company or entity owns, directly or indirectly, more than thirty-three percent (33%) of the voting stock or equity of NewLink, or otherwise has the ability to direct and manage the business affairs of NewLink (whether through contract or otherwise).

 

b.                                      Consideration.  Subject to the other provisions of this Agreement, “Consideration” shall mean any and all revenues or payments in-kind received by NewLink or its Affiliates from a Sublicensee (as defined in Article 3) as consideration for the grant by NewLink of a sublicense under the rights granted to NewLink by LIMR pursuant to Article 2(a) hereof, but excluding sums or amounts received:  (i) for the purchase of an equity interest in NewLink (which for purposes of this Agreement shall be valued at fair market value at the time of receipt by NewLink); (ii) as fair market value payments or reimbursements for

 

 

research and development work performed by or on behalf of NewLink (which reimbursement may be in the form of reasonable and typical FTE rates); (iii) for purchase or supply of Licensed Product; and (iv) as a loan, or as reimbursement of patent prosecution costs, or as payment of a share of amounts recovered in enforcing a patent or other intellectual property rights.  Furthermore, if NewLink or an Affiliate receives from a Sublicensee payments or revenue or other consideration, and such payments or revenue or other consideration is in consideration both for the grant of a sublicense under the Licenses granted to NewLink hereunder as well as for the grant of a license or sublicense to other technology controlled by NewLink but not acquired from LIMR under this Agreement, then the “Consideration,” for purposes of this Agreement, shall be deemed to be such payments or revenue or other consideration multiplied by a percentage that fairly represents, as reasonably determined and mutually agreed upon by the parties, the percentage contribution of the LIMR Technology and the Patent Rights to the total value of the rights licenses or sublicensed by NewLink or its Affiliate to such Sublicensee.  Either party may request an independent third party fair market value determination of such reasonable percentage and in such a case the parties shall equally share the cost of obtaining such determination.

 

c.                                       [*] Claim.  “[*] Claim” shall mean a claim in [*] as filed with the United States Patent and Trademark Office on [*].

 

d.                                      Improvements.  “Improvement” shall mean any improvement, modification, derivative, and/or enhancement of the LIMR Technology or the Patent Rights developed, acquired or otherwise controlled by LIMR at any time after the Effective Date.

 

e.                                       Licensed Product.  “Licensed Product” shall mean any article, composition, apparatus, substance, chemical material, method, process or service whose manufacture, use, or sale is covered or claimed by a Valid Claim within the Patent Rights.  For clarity, a “Licensed Product” shall not include other product or material that (a) is used in combination with Licensed Product, and (b) does not constitute an article, composition, apparatus, substance, chemical material, method, process or service whose manufacture, use, or sale is covered or claimed by a Valid Claim within the Patent Rights.

 

f.                                         LIMR Technology.  “LIMR Technology” shall mean the technology and/or know-how owned or controlled by LIMR that specifically relates to the subject matter of the Patent Rights or is otherwise necessary or useful for the practice of the Patent Rights.

 

g.                                      Net Sales.  “Net Sales” shall mean the gross consideration actually received or collected by NewLink and/or any Affiliate from the transfer, sale or other commercial distribution of any Licensed Product to a third party customer, less:

 

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

 

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

 

(3)           transportation, shipping, insurance and delivery charges or allowances;

 

(4)           customs, duties;

 

(5)           sales, use, excise, value-added and other taxes (other than the taxes on the income of the selling party or NewLink) or other governmental charges measured by sales;

 

(6)           governmental and managed care rebates or chargebacks to the extent actually incurred or allowed with respect to Licensed Product sold during the relevant time period to group purchasing organizations, hospitals, or other buying groups; and

 

(7)           retroactive price reductions that are actually allowed or granted.

 

Sales between or among NewLink and its Affiliates will be excluded from the computation of Net Sales, but the subsequent final sales of such Licensed Product to third parties by NewLink or its Affiliates will be included in the computation of Net Sales.  In addition, transfers or dispositions of Licensed Products in commercially reasonable quantities for nominal consideration the use of which is restricted to either charitable, sampling or promotional purposes or for preclinical, clinical, manufacturing (without sale), scale-up, regulatory or governmental purposes shall not be considered a “sale” or “other commercial disposition” and shall not be included for purposes of calculating Net Sales under this Agreement.

 

If NewLink (or its Affiliate) sells a Licensed Product in combination with another active component or ingredient, which is not itself a Licensed Product (a “Combination Product”), for one selling price, then the “Net Sales of such Combination Product, for the purpose of determining the royalty owed, shall be the Net Sales resulting from such sale, as set forth above, multiplied by a factor that reflects the fair market value, in such Combination Product, of the Licensed Product therein, compared to the total market value of the Combination Product including its other active components or ingredients, such factor to be determined reasonably and in good faith by NewLink and LIMR.

 

h.                                      Patent Rights.  “Patent Rights” shall mean (a) the patent applications identified on Exhibit A of this Agreement; (b) all patents and patent applications of LIMR covering or claiming any improvement, modification, derivative, and or enhancement of the LIMR Technology or of any of the patent applications or rights or foreign counterparts described in subclauses (a), (c), (d) or (e) of this definition; (c) all continuing patent applications (including divisional, substitution, continuations and continuations-in-part) based on any of the foregoing applications; (d) all rights and interest held, acquired or otherwise

 

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controlled by LIMR in and to any patents issuing on any of the foregoing applications (including any reexaminations, reissues, renewals, inventors certifications, and extensions thereof); and (e) all foreign counterparts worldwide of any such patent applications and patents.

 

i.                                          Successful Completion.  “Successful Completion” of a particular clinical trial means that such trial has been completed on sufficient numbers of subjects to meet the regulatory requirements for proceeding to the next phase of clinical trials, the final report analyzing the data from such subjects in such trial has been completed, and the results of such data support initiating the next phase of clinical trials on the drug studied in such trial.

 

j.                                          Valid Claim.  A “Valid Claim” means (i) a claim of an issued patent in the Patent Rights that (a) has not expired or been abandoned; (b) has not been disclaimed; (c) has not been canceled or superseded, or if cancelled or superseded, has not been reasserted; (d) has not been revoked, held invalid or otherwise declared unenforceable or not allowable by a tribunal or patent authority of competent jurisdiction over such claim in any country in which such patent may have issued (from which no further appeal has or may be taken); and/or (e) abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written consent; or (ii) a claim included in a pending patent application under the Patent Rights, which claim is being actively prosecuted in accordance with this Agreement, has been subject to prosecution for protection for no more than five (5) years and has not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority in such country (and from which no appeal is or can be taken), and/or abandoned in accordance in accordance with or as permitted by the terms of this Agreement by mutual written consent.

 

2.                                       Exclusive License.

 

a.                                       License Grant.  Subject to the retained rights of LIMR and the government set forth in subsection 2(b) below, LIMR hereby grants to NewLink the exclusive, world-wide, royalty-bearing license, with the right to grant sublicenses, under LIMR’s interest in the LIMR Technology and the Patent Rights, to use and practice the LIMR Technology and the Patent Rights in all fields and to make, have made, use, sell, offer for sale, and/or import Licensed Product in all fields (the “License”).

 

With respect to any Licensed Products covered by Patent Rights that have been discovered using Federal funding, NewLink and its sublicensees shall comply (to the extent applicable) with the requirements of the Bayh-Dole Act which require that “any products embodying the invention or produced through the use of the subject invention will be manufactured substantially in the United States,” (United States Code, Title 35, Part II, Chapter 18, Section 204), except if there is an exception to such requirement, and provided that LIMR shall use

 

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reasonable efforts, if reasonably requested by NewLink, to request and obtain an exception to such requirement.

 

b.                                      Retained Rights.  Notwithstanding the foregoing, LIMR expressly reserves a non-exclusive, non-transferable, royalty-free right to use the Patent Rights and the LIMR Technology, including use by its staff and researchers and affiliates for its internal non-commercial, educational and research purposes only, including without limitation the right of LIMR to publish its research, subject to the reasonable prior review by NewLink to the extent such publication would disclose confidential LIMR Technology licensed hereunder.  LIMR shall temporarily refrain from publication for a reasonable period of time to accommodate any patent filings or other regulatory actions intended to protect any confidential LIMR Technology licensed hereunder, such period of time not to exceed the later of one year from (x) the date on which such confidential LIMR Technology was created, developed, discovered, conceived and/or reduced to practice or (y) the date on which such confidential LIMR Technology was licensed to NewLink hereunder.  Further, the licenses granted to NewLink in Section 2(a) are subject to certain rights reserved by the United States government pursuant to applicable law or regulation in any inventions in the Patent Rights made with federal funding pursuant to RO1CA109542.

 

3.                                       Sublicenses.  NewLink and its Affiliates shall have the right to grant sublicenses to third parties (each, a “Sublicensee”) under the LIMR Technology and Patent Rights (with the right to further sublicense) for all purposes including to research, develop, make, have made, use, sell, offer for sale, and import the Licensed Products.  Such sublicenses shall be in writing and expressly subject to the terms of this Agreement, and shall not grant rights under the Patent Rights that exceed the scope of the rights expressly granted under this Agreement.  Any such sublicense agreement that is materially inconsistent with this Agreement shall constitute a material breach of this Agreement by Company.  NewLink agrees to require that its Sublicensees must not violate the terms of this Agreement, and that such Sublicensees shall do the same with respect to any further subsublicenses, and NewLink shall use commercially reasonable efforts to enforce such obligations for the benefit of LIMR.  At LIMR’s request, NewLink will provide LIMR with a copy of each sublicense and subsublicense in order to allow LIMR to review such sublicenses and subsublicenses to assure consistency with this Agreement (which copy may be redacted to delete any confidential information that does not relate to the Patent Rights or LIMR Technology or the royalties, revenue or consideration thereunder or the sublicense of rights thereunder).  If LIMR performs such a review on any sublicense or subsublicense agreement, those agreements reviewed by LIMR, not including any subsequent amendments or changes to the agreements, shall be deemed to conform to this Agreement unless LIMR has raised an objection to one or more of such sublicense or subsublicense agreements.  If LIMR has requested copies of the Agreement, New Link shall automatically provide copies of any amendments in existence at the time of the request and subsequently at the time such amendments are entered into.  Upon termination of this Agreement in compliance with the notice and other provisions of this Agreement, and subject to Section 4(e) below, any such sublicenses between NewLink and its

 

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sublicensees will remain in effect and be assigned directly to LIMR, which shall have the right to cancel any such sublicense if such sublicensee is not then in compliance with the terms of its sublicense and the applicable terms of this Agreement.  Notwithstanding the foregoing, LIMR shall not be responsible for any obligation of NewLink under any such agreement which obligation accrued prior to the date of such assignment and if there is any such unperformed obligation which is ongoing or which affects the obligations of the subsublicensee or its ability to perform, LIMR may elect to cancel such sublicense agreement, without liability, upon written notice to such subsublicensee.  Upon such a cancellation, the subsublicensee may sell all Licensed Products in its inventory and complete Licensed Products in the process of manufacture at the time of such termination and sell the same, provided it is not in default under its subsublicense agreement and further provided it pays to LIMR all payments required to be paid to the sublicensor thereunder and provides one or more accountings of all such sales to LIMR (1) within thirty (30) days of LIMR’s request therefore and (ii) within thirty (30) days after the last such sale, such accountings to be certified as true, complete and correct by such sublicensee’s chief financial officer.

 

4.                                       Term and Termination.  The term of this Agreement shall commence as of the Effective Date and shall stay in effect until the last to expire issued Valid Claim covering Licensed Products included in the Patent Rights, unless otherwise terminated earlier as provided below in this Article 4 (collectively, the “Term”).

 

a.                                       If LIMR believes in good faith that NewLink has materially breached its obligations under Section 9(a), then LIMR shall, in accordance with the terms of this paragraph 4, have the right and option to reduce NewLink’s exclusive License to a nonexclusive license or revoke the License in its entirety (by terminating the Agreement), provided that prior to taking this action:

 

(1)           LIMR shall provide NewLink written notice of the perceived breach, describing in detail the basis for LIMR’s belief that such perceived breach has occurred, describing the preferred method of cure and the proposed action to be taken by LIMR in the event of non-cure; and

 

(2)           NewLink shall have ninety (90) days to establish that it has met or will, within such ninety (90) day period, meet the applicable obligations; if the parties are still in dispute as to whether NewLink has met such obligations or cured such breach within ninety (90) days after receipt of notice from LIMR, the dispute will be submitted to binding arbitration in accordance with Section 23(b) of this Agreement, and if such arbitration determines that NewLink materially breached its obligations under Section 9(a) and did not cure such breach, then LIMR shall have the option to terminate this Agreement or to convert the License granted to NewLink in Section 2(a) to a non-exclusive license, in each case, upon prior written notice to NewLink.

 

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

 

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(1)           NewLink ceases to function as a going concern;

 

(2)           a bankruptcy petition or action is filed or taken by or against NewLink under any United States bankruptcy law;

 

(3)           a receiver, assignee or other liquidating officer is appointed with control for all or substantially all of the assets of NewLink; or

 

(4)           NewLink makes an assignment for the benefit of creditors of all or substantially all its assets;

 

provided, that, in the case of subclauses (b)(2), (3) or (4) above, such aforementioned circumstance is not remedied, dismissed or stayed within the earlier of sixty (60) days of (x) occurrence of (b)(2), (3) or (4) or (y) LIMR’s notice of its intent to terminate this Agreement;

 

Notwithstanding anything in Sections 4(a) or (b) or 23 to the contrary, at any time that LIMR or NewLink believes that the other party has defaulted under this Agreement and that such default will irreparably harm such party, in addition to its rights under this Agreement and at law, such party shall have the right to seek all applicable equitable remedies.

 

c.                                       If NewLink fails to make any payment whatsoever due and payable to LIMR hereunder, LIMR shall have the right to terminate this Agreement effective on ninety (90) days written notice, unless NewLink shall make all such payments to LIMR within said ninety (90) day period, and provided that the payments demanded by LIMR are not disputed by NewLink.  In the event of a dispute of such payments by NewLink, the parties shall use good faith efforts to resolve the dispute, which if not resolved by the end of four (4) months either party may submit the dispute to binding arbitration pursuant to Section 23(b).  Any disputed payments submitted to arbitration hereunder be paid into escrow the arbitrator or other independent escrow agent acceptable to both parties in their reasonable discretion unless and until determined due by the arbitrator under Section 23(b), provided, however that if the arbitrator determines that amounts are payable by NewLink to LIMR, then such outstanding amounts will bear interest back to the date that they originally accrued at the default rate of Prime plus 4%.  Prime shall be the prime rate published by the Wall Street Journal or if the Wall Street Journal publishes more than one prime rate, then the average of the prime rates published by the Wall Street Journal, and if the Wall Street Journal does not publish a prime rate, then the prime rate of the largest bank in Philadelphia, Pennsylvania.

 

d.                                      NewLink shall have the right to terminate this Agreement at any time on ninety (90) days prior written notice to LIMR, provided that NewLink shall remain obligated to complete payment of all amounts that have accrued and are owed to LIMR through the effective date of the termination.  In the event NewLink terminates the Agreement, the license granted hereunder shall be deemed terminated, and all rights with respect to the subject matter thereof revert to LIMR

 

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and all further obligations of NewLink to LIMR (except for obligations accrued prior to such termination) shall automatically be terminated.

 

e.                                       Upon expiration or termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that has accrued prior to the effective date of such termination.  NewLink and any Sublicensee thereof may, however, after the effective date of such termination, sell all then existing Licensed Products, and complete Licensed Products in the process of manufacture at the time of such termination and sell the same, provided that NewLink shall make the payments to LIMR as required by Articles 8 & 9 of this Agreement and shall submit the reports as required by Article 11 hereof.

 

f.                                         Sections 4(e), 4(f), 7(b) (but solely with respect to sales made pursuant to Section 4(e)), 11, 12, 13 (solely for the period specified therein), 14, 18, 19, 20, 21 and 23 shall survive termination or expiration of this Agreement.

 

5.                                       Ownership.  LIMR represents and warrants to NewLink that LIMR owns the rights to the LIMR Technology and the Patent Rights (except to the extent any such LIMR Technology and Patent Rights are co-owned by NewLink) and has the right to license its interest in the LIMR Technology and the Patent Rights to NewLink, subject to the rights retained by the United States government and LIMR as described in Section 2(b).

 

6.                                       Patent Prosecution.  Commencing on the Effective Date, NewLink shall have the right and responsibility, at its expense and in its reasonable discretion, for the preparation, filing, prosecution and maintenance of any patent applications and patents included in the Patent Rights, in consultation with LIMR.  NewLink shall provide LIMR the opportunity to review and comment upon such patent applications prior to filing, and on all communications with patent offices in all applicable countries and jurisdictions, the selection of countries for filing of patent applications, responses to office actions, and other substantive patent documents prior to filing and the right to have such documents revised prior to filing to reflect such comments.  Promptly after the Effective Date, LIMR will transfer to NewLink (or its selected counsel) all patent prosecution files for the Patent Rights, shall provide to NewLink such executed documents or instruments as needed for NewLink to undertake such prosecution efforts, and shall provide NewLink all reasonable assistance in such prosecution.  NewLink shall reimburse LIMR for the reasonable out-of-pocket costs, based on detailed invoices of such costs, actually incurred in conducting such prosecution and maintenance of the Patent Rights prior to the Effective Date; provided that LIMR has provided NewLink with an invoice for such costs together with appropriate documentation outlining the costs incurred.  LIMR shall provide NewLink with all information necessary or useful for NewLink’s filing and prosecution of such Patent Rights and shall cooperate fully with NewLink so as to maximize NewLink’s rights.  NewLink shall not abandon or opt not to file any patent or patent application included in the Patent Rights without the prior notice to LIMR.  NewLink may elect in writing to cease the continued prosecution or maintenance of particular Patent Right in a country, and on such notice NewLink shall no longer have any further rights or responsibility for such prosecution or maintenance, or obligation to pay any amounts therefore, or any further rights under such specific Patent Right in such

 

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country, and LIMR may in its discretion continue such prosecution.  Any such notice shall be given by NewLink to LIMR in sufficient time to enable LIMR an adequate time period to protect its rights, but in no case less than three (3) months prior the filing deadline imposed or promulgated by any governing or regulatory authority for filing any such protective document.

 

7.                                       Royalties; Sublicense Payments.

 

a.                                       NewLink shall pay the following royalties to LIMR during the Term on a country-by-country and Licensed Product-by-Licensed Product basis, subject to Section 7(b) below:

 

(1)                                  For Licensed Product covered or claimed by a [*] Claim:  [*] of the Net Sales of such Licensed Product in countries where the Licensed Product is covered by a Valid Claim at the time of sale.

 

(2)                                  For Licensed Product not covered by a [*] Claim: [*] of the Net Sales of such Licensed Product in countries where the Licensed Product is covered by a Valid Claim at the time of sale.

 

b.                                      In the event:  (i) one or more additional technologies (including any patents related thereto) must be licensed (e.g. formulation, cross linking) by NewLink, its Affiliates, and/or Sublicensees from any third party to develop, make, use, import, sell, offer for sale, or import a Licensed Product in any country, or (ii) royalties are payable on the sale of a Licensed Product (as defined hereunder) pursuant to the Exclusive License Agreement between LIMR and NewLink, dated December 21, 2007, or pursuant to the License Agreement between LIMR and NewLink, dated July 7, 2005, (the “Prior Agreements”), NewLink shall be entitled to fully offset against royalties otherwise due to LIMR hereunder an amount equal to the aggregate royalties owed to such third party and owed to LIMR under the Prior Agreements; provided, however, that in no event shall NewLink pay LIMR a royalty hereunder of less than [*] of Net Sales.

 

c.                                       If NewLink grants a sublicense, under the License rights granted under this Agreement to NewLink, to a Sublicensee pursuant to Article 3 hereof, NewLink shall pay LIMR [*] of any Consideration received by NewLink from such Sublicensee, for each such sublicense during the Term.  For clarity, sales of Licensed Product by a Sublicensee shall not be included in Net Sales.

 

d.                                      No more than one royalty payment shall be due with respect to a sale of a particular Licensed Product.  No multiple royalties shall be payable because any Licensed Product, or its manufacture, sale or use is covered by more than one Valid Claim in a given country.

 

8.                                       Payment of Royalties.  Royalties and sublicense payments shall be payable by NewLink quarterly in U.S. dollars within forty-five (45) days of the end of the calendar quarter.  NewLink shall render quarterly reports to LIMR on or before the last day of April, July,

 

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October, and January, as applicable, showing the amount of Net Sales received by NewLink during the most recently concluded fiscal quarter and the appropriate royalties and sublicense payments due to LIMR certified by NewLink’s chief financial officer (or comparable financial officer) as true, correct and complete.  Each such report shall be accompanied by payment of the royalties and/or sublicense payments due for such fiscal quarter.  After the first commercial sale of any Licensed Product pursuant to this Agreement, and upon LIMR’s request and at its expense, NewLink shall provide LIMR with copies of NewLink’s then-existing standard audited financial statements covering the royalties and sublicense payments due under this Agreement within thirty (30) days of LIMR’s request.  NewLink shall pay estimated royalties payments quarterly with an annual reconciliation and of all payments performed within thirty (30) days of receipt of audited numbers.  For the purpose of determining royalties payable under this Agreement, any Consideration NewLink receives from Sublicensees in currencies other than U.S. dollars and any Net Sales denominated in currencies other than U.S. dollars shall be converted into U.S. dollars at the same conversion rate that NewLink actually receives on such conversion at the time of the transaction in question which gave rise the Consideration.

 

9.                                       Diligence; Milestones and Associated Payments.

 

a.                                       Diligence.  NewLink has represented to LIMR, to induce LIMR to issue this exclusive license, that it will commit itself to a diligent program of developing and exploiting [*] so that public utilization will result there from.  As part of the consideration for the exclusive license granted to NewLink hereunder, NewLink has agreed to use commercially reasonable efforts to develop and exploit [*].  Notwithstanding the foregoing, NewLink will not be deemed in breach of this Section 9(a) as long as it is using commercially reasonable efforts to develop and exploit [*] as defined under one or both of the Prior Agreements.

 

It is understood and agreed by the parties that the actions by any Affiliate or Sublicensee may satisfy the above obligations.

 

b.                                      Milestone Payments to LIMR.  Subject to Section 9(c) below, NewLink will pay to LIMR:

 

(1)                                  [*] for the [*] for a Licensed Product in [*];

 

(2)                                  [*] for the [*] on a Licensed Product;

 

(3)                                  [*] for the [*] on a Licensed Product;

 

(4)                                  [*] for the [*] on a Licensed Product;

 

(5)                                  [*] for the [*] for a Licensed Product in [*];

 

(6)                                  [*] for [*] for a Licensed Product [*] in [*].

 

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For clarity, each such milestone payment above shall be payable only once under this Agreement.

 

c.             In the event:  (i) one or more additional technologies (including any patents related thereto) must be licensed (e.g.  formulation, cross linking) by NewLink, its Affiliates, and/or Sublicensees from any third party to develop, make, use, import, sell, offer for sale, or import a Licensed Product in any country, or (ii) milestone payments are payable pursuant to the Prior Agreements in connection with [*], NewLink shall be entitled to fully offset against a milestone payment payable upon the occurrence of a milestone event under Section 9(b)(5) or 9(b)(6) above with respect to a Licensed Product, an amount equal to the aggregate amount of any milestone payments owed to such third party or owed to LIMR under the Prior Agreements upon the occurrence of such milestone event with respect to such Licensed Product; provided, however, that in no event shall the amount payable under Section 9(b)(5) or 9(b)(6), as applicable, be less than [*].

 

10.           Reports and Accounting.  NewLink shall provide to LIMR no less than once a year during the Term a written report regarding NewLink’s product development, royalty and sublicense payment (i.e., receipt of Consideration) information with respect to Licensed Products and milestone status.  The report shall be certified by an officer of NewLink as true, correct and complete.  This report is in addition to the reports required under Section 8 hereof.

 

11.           Indemnity.  NewLink shall defend and indemnify and hold LIMR, its parent corporations, affiliates, trustees, officers, agents and employees (the “Indemnitees”) harmless from any judgments and other liabilities based upon claims or causes of action brought by a third party against any Indemnitee which arise out of [*] by NewLink, its Affiliates or any Sublicensees, or from [*] by the end users of Licensed Products or from [*] by NewLink, its Affiliates or any Sublicensees of [*], except to the extent that [*], provided that LIMR promptly notifies NewLink of any such claim coming to its attention and that it cooperates with NewLink in the defense of such claim.  If any such claims or causes of action are made, NewLink counsel, the identity of whom LIMR does not have a reasonable objection, shall defend LIMR.  If LIMR has a reasonable objection to the counsel selected by NewLink, LIMR and NewLink shall cooperate with each other reasonably and in good faith so that NewLink can engage legal counsel to whom LIMR does not have reasonable objection.  LIMR reserves the right to be represented by its own counsel at its own expense.  NewLink shall not settle any claim that requires the payment of money or the cessation of research and development in each case by LIMR without the prior written consent of LIMR in its sole discretion.

 

12.           Limitations of Liability.  EXCEPT FOR THE INDEMNIFICATION OBLIGATIONS ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING LOST REVENUES OR LOST PROFITS, WHETHER BASED ON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT OR OTHERWISE ARISING OUT OF THIS AGREEMENT, AND REGARDLESS OF WHETHER SUCH PARTY

 

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HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREIN, NEWLINK’S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO [*]

 

13.           Insurance.  At such time as NewLink, its Affiliates, or Sublicensees, initiates or otherwise enters into clinical trials of any Licensed Product or commercially distributes or sells Licensed Products (other than for the purpose of obtaining regulatory approvals), NewLink shall at its sole cost and expense, procure and maintain comprehensive general liability insurance in amounts not less than $3,000,000 per incident and naming the Indemnitees (defined in Section 11 above) as additional insureds.  LIMR may require such minimum requirements to be increased from time to time if the minimum amounts of such insurance carried by prudent companies in the general size of NewLink and in similar industries as NewLink is higher, so that NewLink will at all times carry commercially reasonable amounts of insurance.  Such comprehensive general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for NewLink’s indemnification under this Agreement.  If NewLink elects to self-insure all or part of the limits described above (including deductibles or retentions, which are in excess of $250,000 annual aggregate) such self-insurance program must be acceptable to LIMR and Main Line Health Vice President Insurance and Main Line Health, Inc’s chief financial officer in each of their sole and absolute discretions.  Such insurance will be considered primary as to any other valid and collectible insurance, but only as to acts of the named insured.  The minimum amounts of insurance coverage required shall not be construed to create a limit of NewLink’s liability with respect to its indemnification and other obligations under this Agreement.  NewLink shall provide LIMR with written evidence of such insurance promptly upon written request of LIMR.  NewLink shall use provide LIMR with written notice at least thirty (30) days prior to the cancellation, non-renewal or material change in such insurance.  If NewLink does not obtain replacement insurance providing comparable coverage immediately, LIMR shall have the right to terminate this Agreement effective immediately without notice or any additional waiting periods.  NewLink shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any Licensed Product is being clinically tested, commercially distributed or sold by NewLink (or an agent on its behalf) or by a Sublicensee, Affiliate and (ii) a reasonable period after the period referred to in (i) above which in no event shall be less than five (5) years.

 

14.           Mutual Confidentiality.  NewLink and LIMR realize that certain confidential or proprietary information disclosed by one party (the “disclosing party”) to the other party (the “receiving party”) pursuant to this Agreement (“Confidential Information” of the disclosing party) shall be treated as confidential.  For purposes of this Agreement, the term “Confidential Information” of a party means any of the following:

 

a.                                       All information concerning the business or affairs of either party or its affiliates, including without limitation, all information relating to the LIMR Technology or to NewLink technology, the Patent Rights, the Licensed Product, and/or any and

 

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all existing and potential research parameters, program requirements, strategies, products, technology, know-how, information, data, processes, systems, inventions, developments, formulations, applications, and methods of rendition of services relating to any of the foregoing;

 

b.                                      All information received from third parties and held in confidence by either party or its affiliates, or

 

c.                                       All information pertaining to the proposed business relationship(s) and/or transactions(s) between the parties, including without limitation, the terms thereof.

 

The Confidential Information of the disclosing party shall not be disclosed by the receiving party to any third party and shall not be used by the receiving party for purposes other than those contemplated by this Agreement without the prior written consent of the disclosing party.  Any Confidential Information exchanged by the parties under this Agreement shall remain subject to such confidentiality and non-use obligations for a period of five (5) years from the termination or expiration of the Agreement.  The confidentiality and non-use obligations under this Article 14 shall not apply to any information that:

 

a.                                       Is or which later becomes publicly known through no fault of the receiving party, or

 

b.                                      Is already in the receiving party’s possession prior to the disclosure by the disclosing party to the receiving party as indicated in the receiving party’s competent written records, or

 

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

 

d.                                      Is independently developed by the receiving party without use of the Confidential Information of disclosing party or any other information from the disclosing party that is protected by any other confidentiality obligations.

 

In addition, the receiving party may disclose specific Confidential Information of the other party to the extent such disclosure is required to be disclosed by court order or governmental law, rule or regulation, provided that the receiving party first gives the disclosing party prompt written notice of any such requirement and cooperates with the disclosing party in attempting to limit or seek confidential treatment with respect to such disclosure of such Confidential Information.

 

The provisions of this Section 14 are subject to the publication rights of LIMR as described in Section 2(b) hereof.

 

15.                                Disclaimer.  Except as expressly set forth in Section 5 hereof, nothing contained in this Agreement shall be construed as:

 

13

 

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

 

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

 

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

 

16.           Third Party Infringement.

 

a.                                       Each party shall promptly notify the other party in writing of any alleged or actual infringement of the Patent Rights of which it becomes aware and which may adversely impact the rights of either party hereunder.

 

b.                                      NewLink shall have the first right but not the obligation, at its expense, to bring an appropriate action against any person or entity directly or contributorily infringing the Patent Rights.  LIMR shall cooperate reasonably with NewLink in such action, including by consenting to be named as a party to such action and furnishing a power of attorney upon request.  Except as otherwise set forth in this Agreement, NewLink shall have sole control of the action brought by it; provided, however, that LIMR shall have the right to participate in such action against a third party infringer through counsel of its own choice and at its own expense.

 

c.                                       In the event NewLink institutes legal action against an infringer hereunder, LIMR shall fully cooperate with and supply all assistance reasonably requested by NewLink, including, without limitation, by using commercially reasonable efforts to have its employees testify and grant interviews when requested and to make available relevant records, papers, information, samples, specimens, and similar items upon request of NewLink.  LIMR shall render such cooperation at its own cost and expense (“LIMR’s Costs”).  NewLink shall keep LIMR reasonably informed of the progress of such action, and LIMR shall be entitled to be represented by counsel in connection with such action at its own expense.

 

d.                                      NewLink shall bear the costs of all reasonable and customary expenses for such action (including attorneys’ fees and expert fees).  Any amounts paid to NewLink by third parties as a result of such action (in satisfaction of a judgment or pursuant to a settlement recovery) shall first be applied to the payment of NewLink’s out-of-pocket expenses (including attorneys’ fees and expert fees), second to LIMR’s Costs, third to LIMR’s other out-of-pocket expenses in connection with the matter (including attorneys’ fees and experts fees), and then the balance of any such amounts shall be included in NewLink’s calculation of Net Sales, applied to the quarter in which such recovery is obtained.  NewLink shall have the right to settle any claims, but provided that if such settlement materially negatively affects

 

14

 

LIMR’s interests such settlement shall be only upon terms and conditions that are reasonably acceptable to LIMR, such reasonable acceptance to be confirmed by LIMR in writing prior to NewLink’s agreement to such settlement.

 

e.                                       If NewLink elects to abandon such an action other than pursuant to a settlement with the alleged infringer that is reasonably acceptable to LIMR, NewLink shall give timely notice to LIMR who, if it so desires, may continue the action; provided, however, that the sharing of expenses and any recovery in such suit shall be as agreed upon between the parties.  Any such notice shall be given by NewLink to LIMR in sufficient advance of the expiration of the applicable statute of limitations to enable LIMR an adequate time period to protect its rights, but in no case less than twelve (12) months prior to the expiration of such statute of limitations.

 

17.           Technical Assistance.  Throughout the term of the Agreement, LIMR agrees to permit NewLink and its designees to consult with its employees and agents regarding the LIMR Technology or any Improvements made after the Effective Date relating to the Licensed Products, at such times and places as may be mutually agreed upon; provided that NewLink agrees to limit such consultation to five (5) employee-investigator hours per week and make suitable arrangements directly with LIMR employees and agents and to compensate for such consultation at LIMR’s then-current rates as communicated to NewLink.

 

18.           Name.  NewLink shall not use and shall not permit to be used by any other person or entity the name or logo of LIMR nor any adaptation thereof, or the name of LIMR’s employees, in any advertising, promotional or sales literature, or for any other purpose without prior written permission of LIMR, except as required by governmental authority or applicable law, and provided that the foregoing shall not prevent NewLink from disclosing to third parties the existence of this Agreement.

 

19.           Governing Law.  This Agreement shall be construed, governed, interpreted and enforced according to the laws of the Commonwealth of Pennsylvania without reference to principles of conflicts of laws.

 

20.           Notices.  Any notice or communication required or permitted to be given by either party hereunder, shall be deemed sufficiently given, (i) when mailed by certified mail, return receipt requested, and addressed as below to the party to whom notice is given or (ii) when transmitted by facsimile, email or other electronic means, provided that the sender receives confirmation of transmission, and sends a confirmation copy as provided in clause (1), addressed as below:

 

If to LIMR:

 

J. Todd Abrams, Ph.D.
 Director of Philanthropy and Business Development 
 Lankenau Institute for Medical Research

15

 

100 E. Lancaster Avenue
 Wynnewood, PA 19096

 

With a Copy to:

 

Office of the General Counsel
 Main Line Health
 Bryn Mawr Hospital Legal Department, 1st floor, D Wing 
 130 So. Bryn Mawr Avenue
 Bryn Mawr, PA 19010
 Attention: Senior Vice President and General Counsel

 

If to NewLink:

 

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

 

21.           Assignment.  This Agreement shall inure to the benefit of and be binding on the parties’ permitted assigns and successors in interest.  Except as provided in this Section 21, neither party shall assign or transfer this Agreement without the express prior written consent of the other, such consent not to be unreasonably withheld.  Notwithstanding the foregoing, an assignment of this Agreement by NewLink to an Affiliate or in connection with the transfer of all or substantially all of the business to which this Agreement relates, whether by acquisition, merger, consolidation, operation of law or other transaction, shall not require LIMR’s consent.

 

22.           Entire Agreement.  This Agreement, together with any exhibits attached hereto, represents the entire agreement between the parties with respect to the subject matter hereof, and may only be subsequently altered or modified by an instrument in writing.  This Agreement cancels and supersedes any and all prior oral or written agreements between the parties that relate to the subject matter of this Agreement.

 

23.           Mediation and Arbitration.

 

a.                                       Except as otherwise expressly provided herein, both parties agree that they shall use good faith, reasonable efforts to attempt to resolve any dispute arising from this Agreement, or the breach thereof, through mediation before proceeding to arbitration proceedings as set forth below.  Both parties agree that at least one employee (with respect to NewLink, an authorized executive officer of NewLink) who is authorized and capable of negotiating an agreement on behalf of such party, shall, within three (3) weeks of receipt of written notification of a dispute, meet with at least one employee (an executive officer in the case of NewLink) of the other party who is also authorized and capable of negotiating an agreement on behalf of such party.  If no agreement can be reached, both parties agree to meet

 

16

 

again within a four (4) week period after the initial meeting to negotiate in good faith to resolve the dispute.

 

b.                                      If no agreement can be reached after this second meeting or if otherwise expressly provided herein, both parties agree to submit the dispute to binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) before a panel of three (3) independent arbitrators each having at least ten (10) years experience in the biomedical licensing area.  The identity of the arbitrators shall be mutually agreed upon by the parties, provided, however, that if they are unable to agree on such arbitrators within ten (10) business days after the earlier of (i) the AAA providing them with a list of potential qualified arbitrators or (ii) the delivery of a list of at least ten potential qualified arbitrators by one party to the other party, then AAA shall select the arbitrators from the relevant list.  Discovery shall be permitted as set forth in the Federal Rules of Civil Procedure with respect to the performance by the parties of their obligations under this Agreement and such other matters as the arbitrators may determine.  Judgment upon an award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

 

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

 

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

 

26.           Force Majeure.  Neither party shall lose any rights under this Agreement or be liable to the other party for damages or losses on account of failure of performance by the defaulting party if the failure is occasioned by war, strike, fire, act of God, earthquake, flood, explosions, sabotage, strikes or labor disputes, lockout, riots, invasions, acts of war, embargo, governmental acts or orders or restrictions, disruptions of supplies of adequate raw materials, terrorist attacks, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence or intentional conduct or misconduct of the nonperforming party, and such party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance.

 

27.           Marking.  NewLink agrees to mark the Licensed Products covered by the Patent Rights in the United States with all applicable U.S. Patent numbers.  NewLink agrees to mark the Licensed Products covered by the Patent Rights in other countries with all applicable

 

17

 

patent numbers issued by such other countries to the extent required by applicable laws in order to preserve Patent Rights.

 

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

 

*********************************

 

[rest of page blank]

 

18

 

IN WITNESS WHEREOF, the parties have signed this Agreement on and as of the Effective Date.

 

	
LANKENAU INSTITUTE FOR MEDICAL
    	
 
    	
NEWLINK GENETICS CORPORATION
    
	
RESEARCH
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ George C. Prendergast, PhD
    	
 
    	
By: 
    	
/s/ Mario Mautino
    
	
 
    	
George C. Prendergast, PhD
    	
 
    	
 
    	
 
    
	
 
    	
Professor & President/CEO
    	
 
    	
Title: 
    	
VP of Drug Discovery &
    
	
 
    	
 
    	
 
    	
 
    	
Intellectual Property
    
	
Date:
    	
5/18/09
    	
 
    	
Date:
    	
5/19/09
    

 

19

 

Exhibit A

 

Patent Rights

 

1.                                       [*]

 

2.                                       [*]

 

20Exhibit 10.35

 

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
    	
9
    
	
 
    	
 
    	
 
    
	
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)           “IND” means an Investigational New Drug application in accordance with the rules and regulations of the FDA or foreign equivalents of such application;

 

(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 inhibitors of indoleamine 2,3-dioxygenase, or methods of inhibiting indoleamine 2,3-dioxygenase, 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 directly competitive with, or may be used as a direct substitute for 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 compounds identified by the Investigators that are inhibitors of indoleamine 2,3-dioxygenase where such compounds have different pharmacophores compared to the compounds claimed or covered by the Patents;

 

(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.;

 

6

 

(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.;

 

(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

 

7

 

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 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.

 

8

 

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

 

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

 

(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

 

9

 

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 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

 

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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.

 

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”.

 

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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 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

 

12

 

(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 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

 

13

 

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”), 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
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

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(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 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

 

15

 

(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 [*]
    	
 
    	
[*]
    

 

6.3                                                                                 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

 

16

 

(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 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.

 

17

 

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.

 

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

 

18

 

(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.

 

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);

 

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(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 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.

 

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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

 

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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.

 

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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:

 

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(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.

 

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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,

 

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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

 

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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
    

 

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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.

 

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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.

 

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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 #
    
	
[*]
    	
 
    	
[*]
    	
 
    	
Indoleamine 2,3-
    Dioxygenase [*]
    	
 
    	
[*] Indoleamine   2,3-
    Dioxygenase [*]
    

 

 

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.

 

2

 

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

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Period Royalty
   Amount (Canadian
   $)
    	
 
    
	
Country
    	
 
    	
Units
   Sold
    	
 
    	
Unit Price
   (domestic
   currency)
    	
 
    	
Gross
   sales
    	
 
    	
Less
   Allowances
   *
    	
 
    	
Net
   Sales
    	
 
    	
Royalty
   Rate
    	
 
    	
Conversion
   Rate (to
   Canadian $)
    	
 
    	
This yr
    	
 
    	
Last yr
    	
 
    
	
Canada  

US  

Europe  

(specify countries)  
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Total Product Royalties
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additional   Payments (complete all that apply)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Minimum   Royalty Fee
    	
o
    	
Amount
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Milestone   Payment
    	
o
    	
Amount
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Annual   Licence Maintenance Fee
    	
o
    	
Amount
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
o
    	
 
    	
 
    	
This Year
    	
 
    	
Last Year
    	
 
    
	
 
    	
o
    	
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:        [*]
    

 

3

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