Document:

Exhibit
10.18

 

NEWLINK
GENETICS

 

EMPLOYEE
PROPRIETARY INFORMATION, INVENTIONS,

NON-COMPETITION, AND NON-SOLICITATION AGREEMENT

 

This Employee Proprietary Information, Inventions,
Non-competition, and Non-solicitation Agreement (“Agreement”) is made in consideration
for my employment or continued employment by NEWLINK
GENETICS (the “Company”), and the compensation now and hereafter
paid to me. I hereby agree as follows:

 

1.             NONDISCLOSURE.

 

1.1          Recognition
of Company’s Rights;  Nondisclosure. At
all times during my employment and thereafter, I will hold in strictest
confidence and will not disclose, use, lecture upon or publish any of the
Company’s Proprietary Information (defined below), except as such disclosure,
use or publication may be required in connection with my work for the Company,
or unless an officer of the Company expressly authorizes such in writing. I
will obtain Company’s written approval before publishing or submitting for
publication any material (written, verbal, or otherwise) that relates to my
work at Company and/or incorporates any Proprietary Information. I hereby
assign to the Company any rights I may have or acquire in such Proprietary
Information and recognize that all Proprietary Information shall be the sole
property of the Company and its assigns.

 

1.2          Proprietary
Information. The term “Proprietary
Information” shall mean any and all confidential and/or proprietary
knowledge, data or information of the Company. By way of illustration but not
limitation, “Proprietary Information” includes (a) tangible and intangible
information relating to antibodies and other biological materials, cell lines,
samples of assay components, media and/or cell lines and procedures and
formulations for producing any such assay components, media and/or cell lines,
formulations, products, processes, know-how, designs, formulas, methods,
developmental or experimental work, clinical data, improvements, discoveries,
plans for research, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers, and information regarding the skills and compensation
of other employees of the Company; (b) trade secrets, inventions, mask
works, ideas, processes, formulas, source and object codes, data, programs,
other works of authorship, know-how, improvements, discoveries, developments,
designs and techniques (hereinafter collectively referred to as “Inventions”); (c) information
regarding plans for research, development, new products, marketing and selling,
business plans, budgets and unpublished financial statements, licenses, prices
and costs, suppliers and customers; and (d) information regarding the
skills and compensation of other employees of the Company. Notwithstanding the
foregoing, it is understood that, at all such times, I am free to use
information which is generally known in the trade or industry, which is not
gained as result of a breach of this Agreement, and my own, skill, knowledge,
know-how and experience to whatever extent and in whichever way I wish.

 

1.3          Third
Party Information. I understand, in addition, that the Company has
received and in the future will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on the
Company’s part to maintain the confidentiality of such information and to use
it only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with my work for the Company, Third Party Information
unless expressly authorized by an officer of the Company in writing.

 

1.4          No
Improper Use of Information of Prior  Employers and Others. During my employment by the Company I
will not improperly use or disclose any confidential information or trade
secrets, if any, of any former employer or any other person to whom I have an
obligation of confidentiality, and I will not bring onto the premises of the
Company any unpublished documents or any property belonging to any former
employer or any other person to whom I have an obligation of confidentiality
unless consented to in writing by that former employer or person. I

 

 

will use in the performance of my duties only information which is
generally known and used by persons with training and experience comparable to
my own, which is common knowledge in the industry or otherwise legally in the
public domain, or which is otherwise provided or developed by the Company.

 

2.             ASSIGNMENT OF INVENTIONS.

 

2.1          Proprietary Rights. The term “Proprietary
Rights” shall mean all trade secret, patent, copyright, mask work
and other intellectual property rights throughout the world.

 

2.2          Prior Inventions. Inventions, if
any, patented or unpatented, which I made prior to the commencement of my
employment with the Company are excluded from the scope of this Agreement. To
preclude any possible uncertainty, I have set forth on Exhibit A (Previous Inventions)
attached hereto a complete list of all Inventions that I have, alone or jointly
with others, conceived, developed or reduced to practice or caused to be
conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior Inventions”). If disclosure of
any such Prior Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in Exhibit A
but am only to disclose a cursory name for each such invention, a listing of
the party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Exhibit A
for such purpose. If no such disclosure is attached, I represent that
there are no Prior Inventions. If, in the course of my employment with the
Company, I incorporate a Prior Invention into a Company product, process
or machine, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license (with rights to
sublicense through multiple tiers of sublicensees) to make, have made, modify,
use and sell such Prior Invention. Notwithstanding the foregoing, I agree
that I will not incorporate, or permit to be incorporated, Prior Inventions in
any Company Inventions without the Company’s prior written consent.

 

2.3          Assignment
of Inventions. Subject to Sections 2.4, and 2.6, I hereby
assign and agree to assign in the future (when any such Inventions or Proprietary
Rights are first reduced to practice or first fixed in a tangible medium, as
applicable) to the Company all my right, title and interest in and to any and
all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by me, either alone or jointly with others,
during the period of my employment with the Company. Inventions assigned to the
Company, or to a third party as directed by the Company pursuant to this Section 2,
are hereinafter referred to as “Company Inventions.”

 

2.4          Nonassignable Inventions. I recognize that, in the
event of a specifically applicable state law, regulation, rule, or public
policy (“Specific Inventions Law”), this Agreement will not be deemed to require
assignment of any invention which qualifies fully for protection under a
Specific Inventions Law by virtue of the fact that any such invention was, for
example, developed entirely on my own time without using the Company’s
equipment, supplies, facilities, or trade secrets and neither related to the
Company’s actual or anticipated business, research or development, nor resulted
from work performed by me for the Company. In the absence of a Specific
Inventions Law, the preceding sentence will not apply.

 

2.5          Obligation to Keep Company Informed. During the
period of my employment and for six months after the last day of my employment
with the Company, I will promptly disclose to the Company fully and in
writing all Inventions authored, conceived or reduced to practice by me, either
alone or jointly with others. In addition, I will promptly disclose to the
Company all patent applications filed by me or on my behalf within a year after
termination of employment. At the time of each such disclosure, I will
advise the Company in writing of any Inventions that I believe fully qualify
for protection under the provisions of a Specific Inventions Law; and I will at
that time provide to the Company in writing all evidence necessary to
substantiate that belief. The Company will keep in confidence and will not use
for any purpose or disclose to third parties without my consent any
confidential information disclosed in writing to the Company pursuant to this
Agreement relating to Inventions that qualify fully for protection under a
Specific Inventions Law. I will preserve the confidentiality of any Invention
that does not fully qualify for protection under a Specific Inventions Law.

 

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2.6          Government or Third Party. I also agree to assign all
my right, title and interest in and to any particular Invention to a third
party, including without limitation the United States, as directed by the
Company.

 

2.7          Works for Hire. I acknowledge that all original
works of authorship which are made by me (solely or jointly with others) within
the scope of my employment and which are protectable by copyright are “works
made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).

 

2.8          Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain, and from time to
time enforce, United States and foreign Proprietary Rights relating to Company
Inventions in any and all countries. To that end I will execute, verify and
deliver such documents and perform such other acts (including appearances as a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its designee.
My obligation to assist the Company with respect to Proprietary Rights relating
to such Company Inventions in any and all countries shall continue beyond the termination
of my employment, but the Company shall compensate me at a reasonable rate
after my termination for the time actually spent by me at the Company’s request
on such assistance.

 

In the event the Company is unable for any reason, after reasonable effort,
to secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my agent and
attorney in fact, which appointment is coupled with an interest, to act for and
in my behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.

 

3.            NO CONFLICTS OR SOLICITATION. I acknowledge
that during my employment I will have access to and knowledge of Proprietary
Information. To protect the Company’s Proprietary Information, I agree
that during the period of my employment by the Company I will not, without the
Company’s express written consent, engage in any other employment or business
activity directly related to the business in which the Company is now involved
or becomes involved, nor will I engage in any other activities which conflict
with my obligations to the Company. For the period of my employment by the
Company and continuing until one year after my last day of employment with the
Company, I will not (a) directly or indirectly induce any employee of
the Company to terminate or negatively alter his or her relationship with the
Company or (b) solicit the business of any client or customer of the
Company (other than on behalf of the Company) or (c) induce any supplier,
vendor, consultant or independent contractor of the Company to terminate or
negatively alter his, her or its relationship with the Company. If any
restriction set forth in this Section is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range
of activities or geographic area as to which it may be enforceable.

 

4.             COVENANT
NOT TO COMPETE. I acknowledge that during my employment I will have
access to and knowledge of Proprietary Information. To protect the Company’s
Proprietary Information, I agree that during my employment with the
Company whether full-time or half-time and for a period of one year after my
last day of employment with the Company, I will not directly or indirectly
engage in (whether as an employee, consultant, proprietor, partner, director or
otherwise), or have any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm, corporation or business
that engages in a “Restricted Business” in a “Restricted Territory” (as defined
below). It is agreed that ownership of (i) no more than one percent (1%)
of the outstanding voting stock of a publicly traded corporation, or (ii) any
stock I presently own shall not constitute a violation of this provision.

 

4.1          Reasonable.
I agree and acknowledge that the time limitation on the restrictions in
this paragraph, combined with the geographic scope, is reasonable. I also
acknowledge and agree that this paragraph is reasonably necessary for the
protection of Company’s Proprietary Information as defined in paragraph 1.2
herein, that through my employment I shall receive adequate consideration for
any loss of

 

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opportunity associated with the provisions herein, and that these
provisions provide a reasonable way of protecting Company’s business value
which will be imparted to me. If any restriction set forth in this paragraph 4
is found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities
or in too broad a geographic area, it shall be interpreted to extend only over
the maximum period of time, range of activities or geographic area as to which
it may be enforceable.

 

4.2          As used herein,
the terms:

 

(i)            “Restricted Business” shall mean any
business engaged in areas similar to those the Company is pursuing, including
but not limited to companies engaged in substantially similar development or
commerce that competes with, or is perceived to be a competitor of, the Company’s
products or services, whether current or planned.

 

(ii)           “Restricted Territory” shall mean any
state, county, or locality in the United States in which the Company conducts
business and any other country, city, state, jurisdiction, or territory in
which the Company does business.

 

5.             RECORDS.
I agree to keep and maintain adequate and current records (in the form
of notes, sketches, drawings and in any other form that may be required by the
Company) of all Proprietary Information developed by me and all Inventions made
by me during the period of my employment at the Company, which records shall be
available to and remain the sole property of the Company at all times.

 

6.             NO
CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.

 

7.             RETURN
OF COMPANY MATERIALS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company
Inventions, Third Party Information or Proprietary Information of the Company.
I further agree that any property situated on the Company’s premises and owned
by the Company, including disks and other storage media, filing cabinets or
other work areas, is subject to inspection by Company personnel at any time
with or without notice.

 

8.             LEGAL
AND EQUITABLE REMEDIES. Because my services are personal and unique
and because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or
other equitable relief, without bond and without prejudice to any other rights
and remedies that the Company may have for a breach of this Agreement.

 

9.             NOTICES.
Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as
the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three days after the date of mailing.

 

10.          NOTIFICATION
OF NEW EMPLOYER. In the event that I leave the employ of the Company, I
hereby consent to the notification of my new employer of my rights and
obligations under this Agreement.

 

11.          GENERAL
PROVISIONS.

 

11.1        Governing
Law; Consent to Personal  Jurisdiction
and Exclusive Forum. This Agreement will be governed by and
construed according to the laws of the State of Iowa as such laws are applied
to agreements entered into and to be performed entirely within Iowa between
Iowa residents. I hereby expressly understand and consent that my employment is
a transaction of business in the State of Iowa and constitutes the minimum
contacts necessary to make me subject to the personal jurisdiction of the
federal courts located in the State of Iowa, and the state courts located in
the County of Story, Iowa, for any lawsuit filed against me by Company
arising from or related to this Agreement. I agree and acknowledge that any
controversy arising out of or relating to this Agreement or the breach thereof,
or any claim or action to enforce this Agreement or portion thereof, or any
controversy or claim requiring interpretation of this Agreement must be brought
in a forum located within the State of Iowa. No such action may be brought in
any forum

 

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outside the State of Iowa. Any action brought in contravention of this
paragraph by one party is subject to dismissal at any time and at any stage of
the proceedings by the other, and no action taken by the other in defending,
counter claiming or appealing shall be construed as a waiver of this right to
immediate dismissal. A party bringing an action in contravention of this
paragraph shall be liable to the other party for the costs, expenses and
attorney’s fees incurred in successfully dismissing the action or successfully
transferring the action to the federal courts located in the State of Iowa, or
the state courts located in the County of Story, Iowa.

 

11.2        Severability.
In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. If moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.

 

11.3        Successors
and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

 

11.4        Survival.
The provisions of this Agreement shall survive the termination of my
employment and the assignment of this Agreement by the Company to any successor
in interest or other assignee.

 

11.5        Employment.
I  agree and
understand that my employment is at-will which means I or the company each have
the right to terminate my employment at will, with or without advanced notice
and with or without cause. I further agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause.

 

11.6        Waiver.
No waiver by the Company of any breach of this Agreement shall be a
waiver of any preceding or succeeding breach. No waiver by the Company of any
right under this Agreement shall be construed as a waiver of any other right.
The Company shall not be required to give notice to enforce strict adherence to
all terms of this Agreement.

 

11.7        Entire
Agreement. The obligations pursuant to Sections 1 through 4 and
Sections 6 and 7 (including all subparts) of this Agreement shall apply to any
time during which I was previously employed, or am in the future employed, by
the Company as a consultant if no other agreement governs nondisclosure and
assignment of inventions during such period. This Agreement is the final,
complete and exclusive agreement of the parties with respect to the subject
matter hereof and supersedes and merges all prior discussions between us. No
modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, will be effective unless in writing and signed by the
party to be charged. Any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this Agreement

 

This Agreement shall be effective as of the first
day of my employment with the Company, 
namely:                 ,         .

 

5

 

I HAVE READ THIS AGREEMENT
CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT A
TO THIS AGREEMENT.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Printed Name

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED TO:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

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EXHIBIT A

 

	
  TO:

  	
  NEWLINK GENETICS

  	
   

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBJECT:

  	
  Previous Inventions

  	
   

  

 

1.             Except as listed in Section 2 below, the
following is a complete list of all inventions or improvements relevant to the
subject matter of my employment by NEWLINK
GENETICS that have been made or conceived or first reduced to
practice by me alone or jointly with others prior to my engagement by the
Company:

 

o            No inventions or improvements.

 

o            See below:

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

o            Additional sheets attached.

 

2.             Due to a prior confidentiality agreement, I
cannot complete the disclosure under Section 1 above with respect to
inventions or improvements generally listed below, the proprietary rights and
duty of confidentiality with respect to which I owe to the following
party(ies):

 

	
   

  	
   

  	
  Invention or Improvement

  	
   

  	
  Party(ies)

  	
   

  	
  Relationship

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

o            Additional sheets attached.

 

A-1Exhibit 10.19

 

LICENSE AGREEMENT BETTWEEN
LANKENAU INSTITUTE FOR MEDICAL

RESEARCH

AND NEWLINK GENETICS CORPORATION

 

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

 

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

 

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

 

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

 

1.                                       Definitions.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

3.                                       transportation
and delivery charges or allowances;

 

4.                                       customs,
duties; and

 

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

 

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

 

2

 

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

 

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

 

2.                                       Exclusive
License.

 

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

 

b.                                      RAND
Compounds.  Pursuant to and subject to
the terms of the [*] Agreement between LIMR and [*], the [*] that are
identified by an ongoing screen of the compound collection at [*] will be shared with NewLink.

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

1.                                       NewLink ceases
to function as a going concern;

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

7.                                       License Fee.

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

	
  Milestone

  	
   

  	
  Payment

  
	
  1

  	
   

  	
  NewLink will [*] within [*]

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  NewLink will [*] within [*]

  	
   

  	
  NewLink shall pay LIMR [*] upon [*].

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Once [*] NewLink shall [*]

  	
   

  	
  NewLink shall pay LIMR [*] upon [*].

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Upon [*], NewLink shall [*]

  	
   

  	
  NewLink shall pay LIMR [*] upon [*].

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  [*]. NewLink shall [*] within [*].

  	
   

  	
  NewLink shall pay LIMR [*] at the [*].

  

 

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

 

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

 

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

 

6

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

If
to LIMR:

 

Karen
Knudsen, Ph.D.

Director of Scientific Administration

Lankenau Institute for Medical Research

100 E. Lancaster Avenue

Wynnewood, PA 19096

 

9

 

With
a Copy to:

 

Office
of the General Counsel

Main Line Health

130 So. Bryn Mawr Avenue

Bryn Mawr, PA 19010

 

If
to NewLink:

 

Dr. Nick
Vahanian

Chief Medical and Operations Officer

2901 South Loop Drive

Suite 3900

Ames, Iowa 50010

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

 

	
  Lankenau Institute for
  Medical Research

  	
   

  	
  NewLink Genetics Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Edward L. Jones, Jr.

  	
   

  	
  Name:

  	
  /s/ Nicholas N. Vahanian

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman

  	
   

  	
  Title:

  	
  Chief Medical and Operations Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  July 8, 2005

  	
   

  	
  Date:

  	
  July 7, 2005

  

 

11

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