Document:

Exhibit 10.9

 

	
TRACON Pharmaceuticals, Inc.
    	
***Text   Omitted and Filed Separately with

the   Securities and Exchange Commission.

Confidential   Treatment Requested Under

17 C.F.R. Sections   200.80(b)(4) and 230.406.
    

 

EXCLUSIVE LICENSE AGREEMENT

 

This Exclusive License Agreement (“Agreement”), effective as of November 1, 2005 (“Effective Date”), is entered into by and between Health Research, Inc., a New York corporation, with a principal place of business at Elm & Carlton Streets, Buffalo, New York 14263 (“HRI”) and ROSWELL PARK CANCER INSTITUTE (“Roswell”), with a place of business at Carlton and Elm Streets, Buffalo, New York 14263 (HRI and Roswell are collectively referred to as “Licensor”) and TRaCON Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of Delaware with offices at 787 Seventh Avenue, 48th Floor, New York, NY 10036 (“Company”).

 

Licensor has exclusive intellectual property rights to develop and commercialize Anti-Endoglin antibodies to treat or prevent disease (“Technology”), as claimed in Patent Rights (defined below).  Company is interested in obtaining such exclusive rights to use, produce, distribute, and market products derived from the Technology, and Licensor is willing to grant such rights so that the Technology may be developed and the benefits enjoyed by the public.

 

Therefore, in consideration of the premises and promises in this Agreement, the parties agree as follows:

 

 

ARTICLE 1 – DEFINITIONS

 

For the purposes of this Agreement, the following words and phrases shall have the following meanings:

 

1.1                            “Affiliate” means, with respect to any Entity, any Entity that directly or indirectly controls, is controlled by, or is under common Control with such Entity.

 

1.1.1                “Control” means, for this purpose, direct or indirect control of more than fifty percent (50%) of the voting securities of an Entity or, if such Entity does not have outstanding voting securities, the power to direct or control the affairs of such Entity.

 

1.1.2                “Entity” means any corporation, association, joint venture, partnership, trust, university, business, individual, government or political subdivision thereof, including an agency, or any other organization with independent legal standing.

 

1.2                            “Field” means all fields of use.

 

1.3                            “Improvement” means any modification of a Licensed Process or Licensed Product or any invention (whether patentable or not), information and data in the Field developed after the date of this Agreement, the manufacture, use, or sale of which would be useful or necessary in the practice of or would infringe upon the Patent Rights.

 

1.4                            “Know-how” means all tangible information (other than that contained in the Patent Rights) whether patentable or not (but which has not been patented) and physical objects related to any Licensed Product, including formulations, biological samples, tissues, 

 

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animals, organisms, compounds, intermediates, laboratory notebooks, in vitro, preclinical or clinical design, information or results, other proprietary materials, processes, including manufacturing processes, data, drawings and sketches, designs, testing and test results, regulatory information of a like nature, conceived or developed in the laboratory of Dr. Ben K. Seon, including by those post doctoral candidates working under Dr. Ben K. Seon, at Roswell Park Cancer Institute.

 

1.5                            “Licensed Product(s)” means any product the making, using, selling, offering to sell, or importing of which is covered, in whole or in part, by the Patent Rights.

 

1.6                            “Licensed Process(es)” means any process, use or method the making, using, selling, offering to sell or importing of which is covered, in whole, or in part, by the Patent Rights.

 

1.7                            “Net Sales” means the total gross receipts for sales to end users of Licensed Products or practice of Licensed Processes by or on behalf of Company and any of its Affiliates and Sublicensees, whether invoiced or not, less only the sum of the following:

 

1.7.1                Usual trade discounts to customers actually taken;

 

1.7.2                Sales taxes, tariff duties and/or other taxes to the extent separately stated on invoices and paid with reference to such sales;

 

1.7.3                Amounts allowed or credited on returns or rejections of Licensed Products or Licensed Processes;

 

1.7.4                Bad debt deductions actually written off during the accounting period following generally accepted accounting principles; and

 

1.7.5                Out-of-pocket packaging and outbound freight and insurance charges paid with reference to such sales.

 

If a Licensed Product is sold in the form of a combination product containing one or more products or technologies which are themselves not a Licensed Product (“Combination Product”), the Net Sales for such Combination Product shall be calculated by multiplying the sales price of the Combination Product by the fraction A/(A+B) where A is the invoice price of the Licensed Product or the fair market value of the Licensed Product if sold to an Affiliate, and B is the total invoice price of the other products or technologies or the fair market value of the other products or technologies if purchased from an Affiliate.

 

1.8                            “Patent Rights” means (i) all U.S. and foreign patents and patent applications set forth in Exhibit 1.8 and other intellectual property rights listed on Exhibit 1.8 including continuations, continuations in part, divisionals, reexaminations, extensions, and reissue applications; (ii) any and all US or foreign patents, patent applications, or other rights issuing from, or filed subsequent to the date of this Agreement, based on or claiming priority to the rights listed on Exhibit 1.8, including continuations, continuations in part, divisionals, 

 

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reexaminations, extensions, and reissue applications; and (iii) any other intellectual property rights owned or controlled by the Licensor or that Licensor has the right to license to Company relating to the Technology developed at Roswell, all as of the Effective Date.  Exhibit 1.8 shall be amended from time to time to reflect the foregoing.

 

1.9                            “Sublicensee” means a third party that has entered into a license agreement with Company to make, have made, use, lease, and/or sell the Licensed Products and to practice and have practiced the Licensed Processes.

 

1.10                    “Territory” means the world.

 

All Exhibits are incorporated by reference into this Agreement.  Any reference to “include” or “including” means “including but not limited to.”

 

 

ARTICLE 2 – GRANT

 

2.1                            Subject to the terms and conditions of this Agreement, Licensor hereby grants to Company, and Company accepts, (i) an exclusive sublicenseable license under the Patent Rights, and (ii) a non-exclusive sublicenseable license under the Know-how, in the Field in the Territory to develop, make, have made, use, sell, offer to sell, import, export, and lease Licensed Products and perform Licensed Processes (“License”).

 

2.2                            Company may grant Sublicenses to third parties under the License in its sole discretion.  Upon termination of this Agreement, other than by expiration in accordance with Article 7.6, any and all Sublicenses shall survive such termination, provided, however, Licensor shall not be obligated to incur any obligation to any former Sublicensee of Company not already incurred to Company by Licensor in this Agreement.  Notwithstanding the foregoing, if Company believes that Licensor has terminated this Agreement for the primary purpose of doing business directly with any Sublicensee, the termination may be disputed under the provisions of Article 8.

 

2.3                            Unless otherwise prohibited by law or government regulation, Licensor shall provide Company with and give Company access to the following with respect to the Technology to the extent Licensor has such access to such information: (i) copies of all regulatory submissions, (ii) copies of all patient records, (iii) copies of all computer data and reports pertaining to clinical trials, (iv) copies of all adverse event reports, (v) copies of all preclinical evaluations, (vi) any clinical trial material that has not expired, (vii) storage of and access permission to biological samples, (viii) access to physicians, CROs and health care administrators involved in trials; (ix) all drug manufacture files along with the right to use manufacturing process and the manufacturing source, (x) remaining quantities of any API (active pharmaceutical ingredient) intermediates and (xi) all other documents and information that Company may reasonably request regarding clinical trials, including those relating to the filing of an Investigative New Drug Application with the FDA.  All costs related to the duplication of such materials will be borne by Company.  In addition, Licensor shall cross reference or assign (if necessary) all regulatory filings, at Company’s option.  From time to time during the term of this Agreement, at the request of Company, Licensor shall execute and deliver to Company such

 

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documents and take such other action as Company may reasonably request to consummate more effectively the transactions contemplated hereby.  Licensor shall reasonably cooperate with Company and provide Company with such assistance as reasonably may be requested by Company, including with respect to the transfer of clinical data and filings with the FDA.  All such cooperation shall be at the expense of Company.  The documents itemized in this Article 2.3 shall be delivered to the Company promptly upon execution of this Agreement.

 

2.4                            Exclusive First Right to Negotiate A License to Improvements and Inventions. Subject to Licensor’s obligations to third parties on the date of this Agreement (each of which is disclosed on Disclosure Exhibit 2.4 to this Agreement), Company shall have an exclusive first right to negotiate an exclusive license to any Improvement(s) arising out of, in whole or in part, research of Dr. Ben K. Seon or his associates working in his lab or on his projects at the Licensor, sponsored, in whole or in part, by Company pursuant to the Research Agreement (defined in Article 4.7).  Accordingly and subject to the foregoing, Licensor shall disclose each Improvement to Company as contemplated by the Research Agreement, which Company shall keep confidential.  If Company requests, Company and Licensor shall negotiate, in good faith, a commercially reasonable exclusive license to Company of such Improvement(s).  If Company and Licensor do not enter into a definitive exclusive license within ninety (90) days from the date Company received notice of such Improvement(s) from Licensor, then Company shall have no further right under this Agreement to such Improvement(s).  The parties agree that the foregoing will not deprive Company of, or require it to pay any additional amount for, any rights to which it is entitled pursuant to the license grant in Article 2.1.

 

2.5                            Company may, in its discretion and after 60 days’ notice, elect to not license one of more of the Patent Rights.

 

2.6                            Notwithstanding the foregoing, Licensor retains the right to use the Patent Rights and Know-how for non-commercial research, teaching, and educational purposes, and Company acknowledges that the U.S. government retains a royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any Patent Rights as set forth in 35 U.S.C. §§ 201-211, and the regulations promulgated thereunder or any successor statutes or regulations.  Each funding agency with respect to the Patent Rights is identified on Disclosure Exhibit 2.6 to this Agreement.  Notwithstanding the foregoing, the Licensor agrees not to conduct human clinical trials with any compounds covered by the Patent Rights without the express written permission of Company, unless required by law.

 

ARTICLE 3 - COMMERCIALIZATION

 

Company shall, at its expense, use all commercially reasonable efforts to bring a Licensed Product to market through a thorough, vigorous, and diligent program to exploit the Technology as timely and efficiently as possible.  Such program shall include the preclinical and clinical development of Licensed Products at the Company’s expense including research and development, manufacturing, laboratory and clinical testing, and marketing and sales.  Company will use its best efforts to conduct [...***...] at [...***...] and Company will, in good faith, reasonably consider conducting [...***...] at

 

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[...***...].  Company shall continue active, diligent marketing efforts for Licensed Products throughout the term of this Agreement.  Company shall have the exclusive right to prepare and present all regulatory filings necessary or appropriate in any country in the Territory to obtain and maintain any regulatory approval required to market any Licensed Product in the Field in any such country.  The Company will provide the Licensor written reports on a semi - annual basis detailing its clinical, regulatory, and financial progress.  Licensor understands that these reports may contain material non-public information and that to such extent such reports will be considered “Confidential Information” pursuant to Article 15.

 

 

ARTICLE 4 - ROYALTIES AND OTHER CONSIDERATION

 

4.1                            Until the last-to-expire Patent Right or until this Agreement shall be terminated as hereinafter provided, Company and its Affiliates and Sublicensees shall, on a calendar quarter basis, pay to Licensor royalties equal to [...***...] percent ([...***...]%) of Net Sales.  Royalties for a calendar quarter shall be paid within sixty (60) days after the end of each such quarter.

 

4.2                            Intentionally deleted.

 

4.3                             Royalties shall be paid in United States dollars at such place as Licensor may reasonably designate consistent with the laws and regulations controlling in the United States and, if applicable, in any foreign country.  Any taxes which Company or its Affiliate or Sublicensee shall be required by law to withhold and pay on remittance of a royalty payment shall be deducted from such payment.  Company shall furnish Licensor with the original copies of all official receipts for such taxes.  If any currency conversion shall be required in connection with the payment of royalties, such conversion shall be made by using the exchange rate prevailing at Citibank, N.A. in New York, New York, on the last business day of the calendar quarterly reporting period to which such royalty payments relate and without any deduction of exchange, collection, or other charges.

 

4.4                            As further consideration for the license granted hereunder, Company shall pay to Licensor the following one-time milestone payments which shall not be deducted from or credited against royalties otherwise owed or which may be owed:

 

4.4.1                $[...***...] upon execution of this Agreement.

 

4.4.2                 [...***...] Dollars ($[...***...]) upon [...***...];

 

4.4.3                [...***...] Dollars ($[...***...]) upon [...***...];

 

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4.4.4                [...***...] Dollars ($[...***...]) upon [...***...];

 

4.4.5                [...***...] Dollars ($[...***...]) upon [...***...]; and

 

4.4.6                [...***...] Dollars ($[...***...]) upon [...***...].

 

4.5                            No payment obligations shall be due with respect to any Net Sales of a Licensed Product in a country if there is no Patent Right underlying such Licensed Product in such country.  No more than one royalty shall be paid on any Licensed Product even if it is covered by more than one claim under the Patent Rights.

 

4.6                            To the extent that Company or any Affiliate or Sublicensee is required (i) in its sole discretion after appropriate legal analysis, or (ii) by order or judgment of any court in any jurisdiction, to obtain a license from a third party to practice the rights purported to be granted to Company by Licensor hereunder under Patent Rights in such jurisdiction, then up to [...***...] percent ([...***...]%) of the royalties payable under such license in such jurisdiction may be deducted from royalties otherwise payable to Licensor hereunder, provided that in no event shall the aggregate royalties payable to Licensor in such jurisdiction be reduced by more than [...***...] percent ([...***...]%) as a result of any such deduction, provided further that any excess deduction remaining as a result of such limitation may be carried forward to subsequent periods.

 

4.7                            Upon [...***...] anniversary of [...***...], Company shall remit $[...***...] (“Sponsored Research Fee”) to Licensor for specific use of research and development in the lab of Dr. Ben K. Seon pursuant to a sponsored research agreement (the “Research Agreement”, attached hereto as Exhibit A) to be entered into between the parties immediately subsequent to [...***...].  The Sponsored Research Fee shall be used in research and development related to potential products that may be useful to Company.

 

ARTICLE 5 - REPORTS AND RECORDS

 

5.1                            Company shall keep at its principal place of business full, true and accurate books of account and the supporting data containing all particulars that may be necessary for the purpose of showing and confirming the amounts payable to Licensor (“Records”).  Licensor or a designated auditor selected by Licensor, except one to whom Company has reasonable objection, may inspect the Records not more than once per year upon reasonable notice for [...***...] years following the end of the calendar year to which the Records pertain for the purpose of verifying royalties or compliance in other respects with this Agreement.  If an inspection shows an under reporting or underpayment, Company shall promptly pay such amount within thirty (30) days after the date Licensor provides Company 

 

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notice of the payment due, together with a late charge equal to the amount set forth in Article 5.4 on the unpaid amount until paid in full.  If the underpayment was greater than [...***...] percent ([...***...]%) or exceeds $[...***...] for any twelve (12)-month period, Company shall also reimburse Licensor for the cost of the inspection within thirty (30) days after receipt of the invoice therefor.

 

5.2                            Within sixty (60) days from the end of each calendar quarter, Company shall deliver to Licensor complete and accurate reports, giving such particulars of the business conducted by Company during such quarter as shall be pertinent to a royalty accounting hereunder.  Each annual report shall include relevant information for the most recent calendar quarter and an annual summary on a Licensed Product/Process-by-Licensed Product/Process and county-by-country basis.  Quarterly reports shall include at least the following:

 

5.2.1                The number of Licensed Products and Licensed Processes used, leased or sold, by or for Company, Affiliates and Sublicensees, and the first commercial sale of a Licensed Product or performance of a Licensed Process in any country shall be reported within sixty (60) days thereof to Licensor;

 

5.2.2                Total amounts invoiced for Licensed Products and Licensed Processes used, leased or sold, by or for Company, Affiliates and Sublicensees;

 

5.2.3                Gross receipts and a calculation of Net Sales for the applicable reporting period, including a listing of deductions;

 

5.2.4                Total royalties due based on Net Sales, together with the exchange rates used for conversion, if any;

 

5.2.5                Names and addresses of all Sublicensees and Affiliates; and

 

5.2.6                On an annual basis, Company’s year-end financial statements.

 

5.3                            With each such quarterly report submitted, Company shall pay to Licensor the royalties due and payable.  If no royalties are due, Company shall not be required to make a report pursuant to this Article 5 but shall send a statement to such effect to Licensor.

 

5.4                            Any amount not paid when due to Licensor shall be subject to a late charge from the due date until paid at the primate rate (as defined in the U.S. Federal Reserve Bulletin H.15 or any successor thereto) on the last business day of the applicable quarter prior to the date on which such payment is due, plus [...***...] percent ([...***...]%) per annum.  If any such amount is disputed in good faith, Company shall pay all undisputed amounts when due.  Any amount which is ultimately determined to be due shall be subject to the late charge from the date such amount was due until it is paid.

 

5.5                            Company shall require Affiliates and Sublicensees to keep comparable records and to submit comparable quarterly and annual reports and shall forward to Licensor a copy of all such reports, together with all other documents received from any Affiliate or Sublicensee as Licensor may reasonably request.

 

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5.6                            Licensor shall hold in confidence each report delivered by Company or any Affiliate or Sublicensee pursuant to this Article 5 until that date that is [...***...] years subsequent to the termination of this Agreement.  Notwithstanding the foregoing, Licensor may disclose any such information required to be disclosed pursuant to any judicial, administrative or governmental subpoena, requirement or order, provided that Licensor takes reasonable steps to provide Company with the opportunity to contest such subpoena, requirement or order.  Licensor may also provide such information to any regulatory or other authority to which it is subject, provided, however, it uses its reasonable efforts to (i) ensure such authority keeps such information confidential and (ii) Licensor takes reasonable steps to provide Company with the opportunity to contest such disclosure.

 

ARTICLE 6 - PATENT PROSECUTION AND MAINTENANCE

 

6.1                            Following the Effective Date, Company shall, at Company’s expense, diligently prosecute and maintain the Patent Rights (as the same may be amended or supplemented from time to time after the date hereof), including the filing of patent applications, extensions, continuations, continuations in part, divisionals, re-examinations, or re-issue applications which Company determines may be required to advance the purposes of this Agreement or otherwise to protect the rights and licenses granted hereunder.  Company shall keep Licensor reasonably well informed with respect to the status and progress of any such applications, prosecutions and maintenance activities and will consult in good faith with the Licensor and take into account Licensor’s comments and requests with respect thereto.  Notwithstanding the foregoing, Company shall diligently seek and maintain broad intellectual property protection for the Licensed Products and Licensed Processes to protect Licensor’s rights and shall not reduce or narrow the scope of any claim of the Patent Rights without Licensor’s prior written consent, which shall not be unreasonably withheld.  Both parties shall reasonably cooperate with each other to facilitate the application and prosecution of the Patent Rights pursuant to this Agreement. As of the Effective Date, Licensor has incurred $[...***...] for fees and costs, including attorney’s fees, relating to the filing, prosecution and maintenance of the Patent Rights (the “Patent Costs”).  Company shall reimburse Licensor for [...***...] in two equal payments, one due on the Effective Date and the other on [...***...], provided, however, [...***...] percent ([...***...]%) of the Patent Costs ($[...***...]) shall be credited against the fee owed to Licensor under Article 4.4.3 and ([...***...]%) of the Patent Costs ($[...***...]) shall be credited against the fee owed to Licensor under Article 4.4.4.

 

6.2                            Subject to Company’s obligation to diligently seek and maintain patent protection for a Licensed Products and Licensed Processes, Company may elect to abandon any patent applications or issued patents in the Patent Rights.  Following such abandonment, Licensor shall have the right, but not the obligation, to commence or continue such prosecution and to maintain any such Patent Rights under its own control and at its own expense and Company shall no longer have any rights under or to such abandoned Patent Rights, except for those rights that any third party not a party to this Agreement would have relating to such abandoned Patent Rights.  Prior to any such abandonment, Company shall give Licensor at least sixty (60) days’ notice and a reasonable opportunity to take over prosecution and maintenance of such Patent Rights.  Company agrees to cooperate in such activities including execution of any assignments or other documents necessary to enable Licensor to obtain and retain sole ownership and control of such Patent Rights.

 

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ARTICLE 7 – TERMINATION

 

7.1                            If Company becomes bankrupt, or files a petition in bankruptcy, or if the business of Company is placed in the hands of a receiver, assignee or trustee for the benefit of creditors, whether by the voluntary act or otherwise, this Agreement shall automatically terminate.

 

7.2                            If Company fails to pay Licensor royalties or any other amount due which is not the subject of a bona fide dispute, Licensor shall have the right, upon ninety (90) days’ written notice to the Company, to terminate this Agreement, provided, however, subject to Article 8, such termination shall become effective at the expiration of such ninety (90)-day notice period only if the Company shall have failed to pay such royalty or other amount due prior to the expiration of such ninety (90)-day notice period.  A bona fide dispute over royalties shall be resolved in accordance with Article 8.  If the parties are resolving a dispute according to Article 8, this Agreement shall remain in full force and effect until such dispute is resolved pursuant thereto.

 

7.3                            Upon any material breach or default of this Agreement by Company, other than as set forth in Articles 7.1 and 7.2, Licensor shall have the right, upon ninety (90) days’ written notice to the Company, to terminate this Agreement, provided, however, subject to Article 8, such termination shall become effective at the expiration of such ninety (90)-day notice period only if the Company shall have failed to cure such breach or default prior to the expiration of such ninety (90)-day notice period.  If the parties are resolving a dispute according to Article 8, this Agreement shall remain in full force and effect until such dispute is resolved pursuant thereto.

 

7.4                            Company shall have the right at any time to terminate this Agreement in whole or as to any portion of the Patent Rights, for any reason or no reason, upon sixty (60) days’ written notice to Licensor.

 

7.5                            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, including under Articles 4, 5, 8, 10, 13, and 15.  Company, Affiliate, and/or any Sublicensee may, however, after the effective date of such termination and continuing for a period not to exceed twelve (12) months thereafter, complete any Licensed Products in the process of manufacture at the time of such termination and sell them and all completed Licensed Products, provided that Company shall pay or cause to be paid to Licensor the amounts due thereon and shall submit the reports required by Article 5 on such sales.

 

7.6                            If not terminated sooner, this Agreement shall terminate, on a country by country basis, on the date of the last to expire valid claim under the Patent Rights, at which time Company will have an irrevocable, paid up, royalty-free non-exclusive license under the Patent Rights to make, have made, use, have used, import, offer to sell, sell and have sold Licensed Products in each such country.

 

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ARTICLE 8 – DISPUTE RESOLUTION

 

8.1                            Any dispute under Article 7.2 or Article 7.3 which has not been resolved by good faith negotiations between the parties within the ninety (90) days allotted therein shall be resolved pursuant to this Article 8.1 if such dispute substantially relates to an amount of money owed that is less than (i) $[...***...] or (ii) [...***...] percent ([...***...]%) of the aggregate disputed payment amount.  All other disputes, including other financial disputes, shall be resolved according to Article 8.2 below.

 

8.1.1                Licensor shall promptly advise Company of such claim, dispute or controversy in a writing which describes in reasonable detail the nature of such dispute.  Not later than five (5) business days after Company has received such notice, each party shall select a representative (“Representative”), who shall have the authority to bind such party, and shall advise the other party in writing of the name and title of such Representative.  Not later than ten (10) business days after the date of such notice of dispute, Company shall select a mediation firm located in Buffalo, New York, reasonably acceptable to Licensor, and the Representatives shall meet with such firm for a mediation hearing within thirty (30) days.  The parties shall participate in such mediation in good faith and shall share the costs of the mediation firm equally.

 

8.1.2                  If the Representatives have not been able to resolve the dispute within thirty (30) days after such mediation hearing (or in any event within sixty (60) days after they should have appointed their Representatives pursuant to Article 8.1.1), then the parties shall submit to final and binding arbitration in Buffalo, New York, in accordance with the rules of the American Arbitration Association or such other arbitration organization agreed to by the parties. Within ten (10) business days after notice from one party, each party shall select an arbitrator, and if the two selected arbitrators have not agreed within fifteen (15) business days thereafter upon a third neutral arbitrator, the third arbitrator shall be appointed by the rules of the American Arbitration Association.  The arbitrators shall have no power to add to, subtract from, or modify any of the terms or conditions of this Agreement.  Any award rendered in such arbitration may be enforced in the courts of the State of New York located in Erie County or in the United States District Court for the Western District of New York, to whose exclusive personal jurisdiction for such purposes Licensor and Company each hereby irrevocably consents and submits.  The arbitrators shall have no authority to resolve any issue concerning the validity, enforceability, or infringement of any Patent Right, but the arbitrators shall not delay the arbitration proceeding for the purpose of obtaining or permitting either party to obtain judicial resolution of such issues, unless an order staying the arbitration proceeding shall be entered by a court of competent jurisdiction. The costs of the arbitration shall be borne proportionately to the finding of fault as determined by the arbitrators.

 

8.2                            Except as provided in Article 8.1 and except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, including any dispute relating to patent validity or infringement, which the parties are unable to resolve within the ninety (90) days described in Article 7.3 shall be mediated in good faith.  The party raising such dispute shall promptly notify the other party of the nature of its claim in reasonable detail.  The parties shall mediate such dispute in accordance with the

 

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procedures set forth in Article 8.1.1.  If the Representatives have not been able to resolve the dispute within thirty (30) days after such mediation hearing (or in any event within sixty (60) days after they should have appointed their Representatives pursuant to Article 8.1.1), the parties shall have the right to pursue any other remedies legally available to resolve such dispute in a court of law.

 

8.3                            All applicable statutes of limitation and time-based defenses (such as estoppel and laches) shall be tolled while any mediation procedures are pending and during any mediation.  The parties shall cooperate in taking any actions necessary to achieve this result.

 

ARTICLE 9 - INFRINGEMENT AND OTHER ACTIONS

 

9.1                            Company and Licensor shall promptly notify each other promptly after becoming aware of any alleged infringement of the Patent Rights, or any challenge or threatened challenge to the validity, enforceability, or priority of any of the Patent Rights, and provide each other with any available evidence of such infringement, challenge or threatened challenge.

 

9.2                            During the term of this Agreement, to the extent permitted by law for as long as Company is the exclusive licensee of the Patent Rights, Company shall have the right, but not the obligation, to prosecute or defend, at its own expense and using counsel of its choice, any infringement of and/or challenge to the Patent Rights.  In furtherance of such right, Company may join Licensor as a party in any such suit (and Licensor will join at Company’s request), provided that Company pay all of Licensor’s reasonable out-of-pocket expenses if Licensor is requested to join by Company.  Before commencing or responding to any such action, Company shall consult with Licensor regarding the advisability of the action.  Company shall indemnify and hold Licensor harmless against any costs, expenses (including attorneys’ fees, whether incurred as the result of a third party claim or a claim to enforce this provision), or liability that may be found or assessed against Licensor in any such suit other than to the extent resulting from Licensor’s gross negligence or willful misconduct.  Company may, in its sole discretion, settle or compromise any suit brought in connection with this Agreement, including under Articles 9.2 and 9.3, without the prior consent of Licensor unless such settlement or compromise would adversely affect the validity or enforceability of any Patent Right or would involve any additional obligation of Licensor not already undertaken by Licensor in this Agreement, in which case such settlement or compromise shall require the written consent of Licensor (such consent not to be unreasonably withheld).

 

9.3                            If a claim or suit is asserted or brought against Company alleging that the manufacture or sale of any Licensed Product or Licensed Process by Company, an Affiliate, or any Sublicensee, or the use of such Licensed Product or Licensed Process by any customer, infringes proprietary rights of a third party, Company shall notify Licensor.  Company may defend such suit, modify such Licensed Product or Licensed Process to avoid such infringement, and/or settle on terms that it deems advisable, unless such settlement would adversely affect the validity or enforceability of any Patent Right or would involve any additional obligation of Licensor not already undertaken by Licensor in this Agreement, in which case such settlement or compromise will require the written consent of Licensor (such consent not to be unreasonably withheld).  If within six (6) months after receiving notice of any alleged infringement, Company shall have been unsuccessful in persuading the alleged infringer to desist, or shall not have

 

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brought and shall not be diligently prosecuting an infringement action, or if Company shall notify Licensor, at any time prior thereto, of its intention not to bring suit against the alleged infringer, then, and in those events only, Licensor shall have the right, but not the obligation, to defend, at its own expense and use counsel of its choice, any such action.  The total cost of any such defense action undertaken solely by Licensor after such six-month period [...***...], and [...***...] any recovery or damages for infringement or otherwise derived therefrom.

 

9.4                            Any recovery of damages in any suit defended or prosecuted by Company shall be applied (i) pro rata, in satisfaction of any unreimbursed expenses and legal fees of the parties relating to the suit; (ii) to ordinary damages, which shall be equal to (a) Company’s lost profits, (b) a reasonable royalty on the infringing sales, or (c) whatever measure of damages the court shall have applied to compensate for such lost sales and/or profits, [...***...], and Company shall pay to Licensor [...***...]; and (iii) the balance shall be divided [...***...] percent ([...***...]%) to Company and [...***...] percent ([...***...]%) to Licensor.  However, notwithstanding the foregoing, if Licensor has defended or prosecuted a suit after the six-month period referred to in Article 9.3, then [...***...].

 

9.5                            Company may credit [...***...] of any litigation costs incurred by Company in a country in connection with any suit under Articles 9.2 and 9.3, including all amounts paid in judgment or settlement of litigation, against royalties or other fees thereafter payable to Licensor for such country.  If [...***...] of such litigation costs in a country exceed the royalties payable to Licensor in any year in which such costs are incurred, such amount shall be carried over and credited against royalty payments in future years for such country.

 

9.6                            In any suit to enforce and/or defend the Patent Rights pursuant to this Agreement, the party not in control of such suit shall, at the request and expense of the controlling party, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

 

ARTICLE 10 - LIMITATION OF LIABILITY, INDEMNITY, INSURANCE

 

10.1                    EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE 17, LICENSOR MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND VALIDITY AND ENFORCEABILITY OF THE PATENT RIGHTS, AND ANY CLAIMS THEREOF, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.  IN NO EVENT SHALL LICENSOR OR COMPANY, OR THEIR TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL, INDIRECT, PUNITIVE, CONSEQUENTIAL, OR OTHER DAMAGES OF ANY KIND, INCLUDING ECONOMIC

 

***Confidential Treatment Requested

 

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DAMAGES AND INJURY TO PROPERTY AND LOST PROFITS,  EXCEPT TO THE EXTENT SUCH DAMAGES, INJURY OR LOSS IS DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTY.

 

10.2                    Company shall defend, indemnify, and hold Licensor, its Affiliates, and their respective officers, trustees, employees, and agents (“Indemnified Parties”) harmless from and against all liabilities, demands, costs, claims, suits, expenses (including attorneys’ fees and expenses, whether incurred as a result of a third party claim or a claim to enforce this provision), and other damages (collectively, “Losses”) under any theory of liability to the extent arising out of or resulting from (i) any use of the Patent Rights or Know How or material breach or failure by Company (or any Affiliate or Sublicensee) in the performance or non-performance of Company’s obligations or covenants under this Agreement or any Sublicense; (ii) any breach by Company of any representation or warranty hereunder; (iii) the testing, manufacture, marketing, possession, use, sale or other disposition by Company or any Affiliate or Sublicensee of any Licensed Product or Licensed Process or the failure of any of the foregoing (or any contract manufacturer of any of the foregoing) to manufacture such Licensed Product in accordance with GMPs); (iv) FDA enforcement actions, inspections, product recalls or market withdrawals relating to a Licensed Product or Licensed Process to the extent arising out of or resulting from Company’s (or any Affiliate’s or Sublicensee’s) testing, manufacturing, marketing, possession, use, sale or other disposition of any Licensed Product or Licensed Process; (v) any personal or bodily injury, including death, illness, or property damage caused directly or indirectly by Company (or any Affiliate or Sublicensee) and (vi) failure to comply with any law, in each case to the extent such Loss was not the result of Licensor’s gross negligence or willful misconduct.  Company shall insure that every sublicense shall [...***...].

 

10.3                    Indemnitees will provide Company with prompt notice of any claim, suit, action, demand, or judgment for which indemnification is sought.  At its expense, Company shall provide attorneys reasonably acceptable to Licensor to defend against any such claim.  Indemnitees shall cooperate fully with Company in such defense and will permit Company to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided, however, that any Indemnitee shall have the right to retain its own counsel at the reasonable expense of Company, if, under the standards of professional conduct applicable to Company’s counsel without a waiver, representation of such Indemnitee by the counsel retained by Company would be inappropriate (a “Conflict”), provided however, such counsel selected by such Indemnitee shall be reasonably acceptable to the Company (such counsel the “Conflict Counsel”) and provided, further, however, that Conflict Counsel’s representation of Indemnitee in any matter shall be restricted solely to those issues where there is a Conflict.  Conflict Counsel and Company counsel shall communicate with each other in good faith to keep each other fully informed of the status of the proceeding at all stages thereof, and shall each use commercially reasonable efforts to avoid duplicative work in connection therewith, it being understood that expenses incurred by Conflict Counsel for duplicative work shall be deemed “unreasonable expense” under this Article 10.3, and Indemnitee shall be responsible for such expenses.  In no event shall the Company be liable for the fees and expenses of more than one Conflict Counsel in connection with any one action or claim or in connection with separate but similar or related actions or claims in the same

 

***Confidential Treatment Requested

 

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jurisdiction arising out of the same general allegations.  Indemnitee may not settle any action or claim affected pursuant to this Article 10.3 without the written consent of the Company, such consent not to be unreasonably withheld.

 

10.4                    Company shall maintain in full force and effect with a commercial insurance carrier commercial general liability insurance, having individual and aggregate limits appropriate to the conduct of Company’s business, and covering the marketing, sale and distribution of Licensed Products and Licensed Processes and reasonably satisfactory to Licensor.  Such insurance (i) shall be issued by an insurer licensed to practice in the State of New York or an insurer pre-approved by Licensor, such approval not to be unreasonably withheld; (ii) shall list Licensor as an additional insured, (iii) shall be endorsed to include product liability coverage, and (iv) shall require thirty (30) days’ written notice to be given to Licensor prior to any cancellation or material change thereof.  Company shall, upon request, provide Licensor with Certificates of Insurance evidencing compliance with this Article.  Company shall continue to maintain such insurance after the expiration or termination of this Agreement during any period in which Company or any Affiliate or Sublicensee continues (a) to make, use, or sell a product that was a Licensed Product under this Agreement or (b) to perform a service that was a Licensed Process under this Agreement, and thereafter for a period of five (5) years.

 

ARTICLE 11 – ASSIGNMENT

 

This Agreement and the rights and duties hereunder may not be assigned by either party without first obtaining the written consent of the other, which consent shall not be unreasonably withheld.  Any such purported assignment without such written consent shall be null and of no effect.  Notwithstanding the foregoing, Company may assign this Agreement without the consent of Licensor (i) to a purchaser, merging or consolidating corporation, or acquiror of substantially all of Company’s assets or business and/or pursuant to any reorganization qualifying under section 368 of the Internal Revenue Code of 1986 as amended, as may be in effect at such time, or (ii) to an Affiliate of Company.

 

ARTICLE 12 – COMPLIANCE WITH LAWS

 

12.1                    Company shall use its commercially reasonably efforts to comply with all commercially material local, state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of Licensed Products and Licensed Processes.

 

12.2  To the extent commercially feasible and consistent with prevailing business practices, Company shall use its commercially reasonable efforts to mark, and shall cause its Affiliates and Sublicensees to mark, all Licensed Products that are manufactured or sold under this Agreement with the number of each issued patent under the Patent Rights that applies to such Licensed Product.

 

ARTICLE 13 - USE OF NAMES; NO AGENCY; PUBLICATION

 

13.1                    Nothing contained in this Agreement shall be construed as granting any right to Company or any Affiliate or Sublicensee to use in advertising, publicity, or other

 

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promotional activities any name, trade name, trademark, or other designation of Licensor or any of its Affiliates or their respective employees or units (including contraction, abbreviation or simulation of any of the foregoing) without the prior, written consent of Licensor; provided, however, that Company may use the name of Licensor in various documents used by Company for capital raising and financing without such prior written consent where the use of such names is required by law or regulation.

 

13.2                    Nothing herein shall be deemed to establish a relationship of principal and agent between Licensor and Company, nor any of their agents or employees for any purpose whatsoever.

 

13.3                    If Licensor desires to publish or disclose, by written or other non-oral presentation, Patent Rights, Know-how, or any material information related thereto (“Written Presentation Information”), then Licensor shall notify Company in writing, which may be by facsimile where confirmed by the receiving machine, by first class, certified, or registered mail (return receipt requested), or by email if confirmed by one of the other permitted methods, of its intention at least thirty (30) days before any written or other non-oral publication or disclosure.  Licensor shall include with such notice a current draft of such proposed disclosure or abstract.  Company may request that Licensor, no later than fourteen (14) days following the receipt of such notice (“Notice Period”), delay such presentation, publication or disclosure of the Written Presentation Information”) for up to an additional thirty (30) days to enable Company to file, or have filed on its behalf, a patent application, copyright or other appropriate form of intellectual property protection related to the Written Presentation Information or request that Licensor do so.  If Licensor desires to publish or disclose, in an oral presentation to individuals other than Licensor’s employees, any Patent Rights, Know-how, or any material information related thereto (“Oral Presentation Information”), Licensor shall give Company not less than ten (10) days’ notice by one of the above permitted methods with respect to such proposed oral presentation and shall include a draft or abstract of such Oral Presentation Information.  If Company makes a request within such 10-day period for Licensor to modify the Oral Presentation Information so that no Confidential Information of Company is disclosed or so that no information for which Company desires to seek patent protection is disclosed, Licensor will modify such proposed Oral Presentation Information to achieve such purpose.  If Licensor does not receive any request from Company to delay or modify a presentation, publication or disclosure (whether written or oral) as described above, Licensor may publish or otherwise disclose such information as proposed.

 

ARTICLE 14 - NOTICE

 

Subject to Article 13, any notice or other communication required or permitted to be given pursuant to this Agreement shall be in writing and shall be delivered by hand; sent postage prepaid by first class mail or nationally recognized overnight courier service, or by facsimile if confirmed by another permitted method.  Notices are effective upon receipt, and shall be sent to a party at its address below or as otherwise designated by written notice:

 

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Licensor:

 

Roswell Park Cancer Institute

Elm and Carlton Streets

Buffalo, NY  14263

Attention:  General Counsel

Telephone:  (716) 845-8717

Facsimile:  (716) 845-8057

 

Company:

 

TRaCON Pharmaceuticals, Inc.

4510 Executive Drive, Suite 206

San Diego, CA  92121

ph.  858.550.0780 x222

fax  858.550.0786

Attn: President

 

 

With a copy to:

 

Paramount BioSciences, LLC

787 Seventh Avenue

48th Floor

New York, NY 10036

Attn: General Counsel

Tel: 212. 554.4300

Fax: 212.554-4355

 

 

ARTICLE 15 - CONFIDENTIALITY

 

15.1                    Any proprietary or confidential information relating to this Agreement collectively constitutes “Confidential Information”.  Neither party shall use the Confidential Information for any purpose unrelated to this Agreement and will hold it in confidence during the term of this Agreement and for a period of five (5) years after its termination or expiration.  However, such undertaking of confidentiality by each party shall not apply to any information or data which:

 

15.1.1        such party receives at any time from a third-party believed to be lawfully in possession of same and having the right to disclose same;

 

15.1.2        is, as of the date of this Agreement, in the public domain, or subsequently enters the public domain through no fault of such party;

 

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15.1.3        is independently developed by such party as demonstrated by written evidence without reference to information disclosed to such party by the other party;

 

15.1.4        is disclosed pursuant to the prior written approval of the other party hereto; or

 

15.1.5        is required to be disclosed pursuant to law or legal process (including to a governmental authority) provided, in the case of disclosure pursuant to legal process, reasonable notice of the impending disclosure is provided by the disclosing party to the non-disclosing party and the disclosing party reasonably cooperates with the non-disclosing party’s efforts to limit such disclosure.

 

ARTICLE 16 - MISCELLANEOUS PROVISIONS

 

16.1                    This Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, without regard to principles of conflicts of laws.

 

16.2                    If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, Company shall assume all legal obligations to do so and the costs in connection therewith and shall keep Licensor reasonably informed of such efforts.

 

16.3                    The parties acknowledge that this Agreement, including the Exhibits and documents incorporated by reference, sets forth the entire agreement and understanding of the parties, and supersedes all previous communications, representations or understandings, either oral or written, between the parties, as to its subject matter.  It may not be changed except by a written instrument signed by the parties.

 

16.4                    The provisions of this Agreement are severable, and if any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of its remaining provisions.

 

16.5                    The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party.

 

16.6                    The headings of the several articles are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

16.7                    This Agreement is effective as of the Effective Date after it has been signed below on behalf of each party.

 

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16.8                    Each party shall be excused from any breach of this Agreement to the extent such breach is proximately caused by governmental regulation, act of war, strike, act of God, or other similar circumstance normally deemed outside the control of such party.

 

ARTICLE 17-REPRESENTATIONS AND WARRANTIES AND COVENANTS

 

17.1                    Licensor represents and warrants that:

 

17.1.1                                                        It has legal power to enter into this Agreement and extend the rights granted to Company in this Agreement, and that Licensor has not made and will not make any commitments to others inconsistent with or in derogation of such rights;

 

17.1.2                                                        As of the Effective Date, to the knowledge of Roswell’s senior executives at the level of Vice President and above and HRI’s Director of Operations at Roswell (“Management”), there is no (i) intellectual property right of a third party that would prevent Company from exercising any of the rights granted under this Agreement, or (ii) claim by a third party that the exercise of any of the rights granted under this Agreement would infringe or misappropriate such third party’s intellectual property rights;

 

17.1.3                                                        As of the Effective Date, to the knowledge of Management, there is no claim, pending or threatened, of infringement, interference or invalidity regarding any part or all of the Patent Rights or Know-how or their use;

 

17.1.4                                                        It believes the U.S. and foreign patents and applications itemized on Exhibit 1.8 set forth all of the patents and patent applications relating to or useful to the Technology in the Field owned by or controlled by Licensor on the Effective Date;

 

17.1.5                                                        To the knowledge of Management as of the Effective Date, there are no inventors of Patent Rights other than those listed as inventors on the patent filings; and

 

17.1.6                                                        Licensor has provided Company with copies of representative documents reflecting support or funding for all or part of the research leading to Patent Rights and Know-How as of the Effective Date, and has listed all funding agencies on Exhibit 2.6.

 

17.2                    Licensor covenants that it shall not permit any person to perform any services pursuant to or in connection with a sponsored research agreement contemplated by Article 4.7 until and unless such person has entered into a legally binding agreement with Licensor, (a) agreeing to assign to Licensor all intellectual property rights in and to inventions conceived or reduced to practice by such person (i) during the term of any such sponsored research agreement, and/or (ii) during the term of any engagement of such person by Licensor (whether as officer, employee, student, consultant, volunteer or otherwise) and pertaining to the Patent Rights or Know-how; (b) agreeing to be bound by the provisions of Articles 13 and 15 of this Agreement; and (c) agreeing to cooperate, at Company’s expense, in Company’s execution of its rights and duties pursuant to Article 6 of this Agreement.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in triplicate by their duly authorized representatives.

 

	
TRACON PHARMACEUTICALS, INC.
    	
 
    	
ROSWELL PARK CANCER   INSTITUTE
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ J. Jay Lobell
    	
 
    	
 
    	
By:
    	
/s/ Michael B. Sexton
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
J. Jay Lobell
    	
 
    	
 
    	
Name:
    	
Michael B. Sexton
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Chairman of the Board
    	
 
    	
 
    	
Title:
    	
Secretary
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
11-8-05
    	
 
    	
 
    	
Date:
    	
11-1-05
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
HEALTH RESEARCH, INC.
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Joseph H. Jurkowski
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Joseph H. Jurkowski
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Director of Operations
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
11-1-05
    	
 
    	
 
    	
 
    

 

 

[EXECUTION PAGE TO THE EXCLUSIVE LICENSE AGREEMENT DATED AS OF NOVEMBER 1, 2005]

 

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EXHIBIT 1.8

 

Patent Rights

 

 

[...***...]

 

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EXHIBIT 2.4

 

Disclosure Exhibit 2.4

 

Licensor Obligations To Certain Third Parties

 

None.

 

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EXHIBIT 2.6

 

Disclosure Exhibit 2.6

 

Government Funding Support For Inventions

 

[...***...]

 

***Confidential Treatment Requested

 

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EXHIBIT A

 

Sponsored Research Agreement

 

Health Research, Inc.

Roswell Park Division

 

This Sponsored Research Agreement is entered into this ____ day of _______, 200__, between Health Research, Inc., Roswell Park Division (“Roswell”), and TRaCON Pharmaceuticals, Inc., with an office at 787 Seventh Avenue, 48th Floor, New York, NY 10036 (“Sponsor”), and Dr. Ben K. Seon, a Principal Investigator at Roswell (“Principal Investigator”).

 

The parties desire to support a research program which is of mutual interest and benefit to Roswell and to Sponsor and will further the mission and research objectives of Roswell in a manner consistent with its status as a non-profit, tax-exempt institution.  Therefore, in consideration of the premises and promises in this Agreement, and in conjunction with and pursuant to the Exclusive License Agreement between Roswell and Sponsor effective as of November 1, 2005 (“Exclusive License Agreement”), the parties agree as follows:

 

1.         STATEMENT OF WORK.  Roswell shall use its good faith reasonable efforts to perform the research program involving [...***...] which is further described in Exhibit A (“Research”).

 

2.         PRINCIPAL INVESTIGATOR.  The Research will be supervised by Principal Investigator.  If, for any reason, s(he) is unable to continue to serve as Principal Investigator , and a successor acceptable to both Roswell and Sponsor is not available, this Agreement shall be terminated as provided in Article 6.

 

3.         TECHNICAL REPRESENTATIVES.  Sponsor’s technical representative shall be Dr. Jeffrey Serbin, who shall have reasonable access to the PI regarding the Research.  Access to work carried on at Roswell’s facilities in the course of the Research shall be entirely under Roswell’s control, and Sponsor’s technical representatives shall be permitted to visit such facilities during reasonable times mutually agreeable to the parties.

 

4.         TECHNICAL REPORTS.  Subject to the preservation of intellectual property rights as contemplated by this Agreement, Principal Investigator shall make up to four (4) written or oral reports to Sponsor each year if requested by Sponsor and a final report to Sponsor within 90 days after the end of the Research or this Agreement.

 

5.         PAYMENT OF COSTS.  Sponsor will pay Roswell a yearly sum of $[...***...] for all direct and indirect costs incurred in the performance of the Research.  Sponsor shall pay Roswell in U.S. dollars in accordance with the terms set forth in Exhibit B, with the first year’s payment due within ten (10 days after the execution of this Agreement.  A final financial accounting or all costs incurred and all funds received by Roswell together with a check for the amount of the 

 

***Confidential Treatment Requested

 

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unexpended balance, if any, shall be submitted to Sponsor within ninety (90) days following the completion of the project.

 

6.         TERM; TERMINATION.  The Research shall be conducted during the period from the [...***...] through the date that is the fifth anniversary of the Exclusive License Agreement, provided, however, this Agreement may be terminated at any time by Sponsor upon sixty (60) days’ written notice.  Performance may be terminated by Roswell if circumstances beyond its control preclude continuation of the Research.  Upon termination, Roswell will be reimbursed as specified in Article 5 for all costs and non-cancelable commitments incurred in the performance of the Research, but such reimbursement will not exceed the total estimated project cost specified in Article 5 and Exhibit B.

 

7.         PUBLICATIONS.  Publication and confidentiality of any information relating to the Research shall be governed by Articles 13 and 15 of the Exclusive License Agreement.

 

8.         INTELLECTUAL PROPERTY.

 

A.        Subject to the Exclusive License Agreement, title to any invention conceived or first reduced  to practice in the performance of the Research program shall remain with Roswell.

 

B.        Subject to the terms of the Exclusive License Agreement, title to and the right to determine the disposition of any copyrights or copyrightable material (including without limitation computer software and its documentation) produced, composed, developed or delivered by Roswell in the performance of or in connection with the Research shall remain with Roswell.  Roswell shall grant to Sponsor the first right to negotiate the exclusive right and license to use, reproduce, display, distribute, and perform all such copyrightable materials, computer software and its documentation of the same scope and exclusivity as the license and other rights granted by Roswell to Sponsor in the Exclusive License Agreement under its Patent Rights and Know-How rights and with respect to Improvements.  Computer software and other copyrightable materials for which a patent application may be or is filed shall be subject to these same principles.

 

C.        If Roswell elects to establish property rights other than patents, copyrights or know-how rights to any tangible research property (TRP), e.g., biological materials, developed by Roswell during the course of the Research, Roswell shall grant to Sponsor the first right to negotiate  a right and license to under such property rights to make, have made, use, sell, offer to sell, import and otherwise exploit and license such tangible research property of the same scope and exclusivity as the license granted by Roswell to Sponsor in the Exclusive License Agreement under its Patent Rights and Know-How rights and with respect to Improvements.

 

9.         USE OF NAMES.  Except as provided in Article 13 of the Exclusive License Agreement, neither party will use the name of the other in any advertising or other form of publicity without the written permission of the other; in the case of Roswell, that of the Director of the News Office.

 

***Confidential Treatment Requested

 

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10.       NOTICES.  Any notices required to be given or which shall be given under this Agreement shall be in writing delivered by first class mail (air mail if not domestic) addressed to the parties as follows:

 

	
ROSWELL PARK CANCER
    	
SPONSOR
    
	
INSTITUTE and DR. SEON
    	
 
    
	
 
    	
 
    
	
Roswell Park Cancer Institute
    	
TRaCON Pharmaceuticals, Inc.
    
	
Elm and Carlton Streets
    	
4510 Executive Drive, Suite 206
    
	
Buffalo, NY 14263
    	
San Diego, CA    92121
    
	
Attention: General Counsel
    	
Telephone:  858.550.0780 x222
    
	
Telephone: (716) 845-8717
    	
Facsimile:  858.550.0786
    
	
Facsimile: (716) 845-8057
    	
Attn: President
    
	
 
    	
 
    
	
 
    	
With a copy to:
    
	
 
    	
 
    
	
 
    	
Paramount BioSciences, LLC
    
	
 
    	
787 Seventh Avenue
    
	
 
    	
48th Floor
    
	
 
    	
New York, NY 10036
    
	
 
    	
Attn: General Counsel
    
	
 
    	
Tel: 212.554.4345
    
	
 
    	
Fax: 212.554.4355
    

 

If notices, statements, and payments required under this Agreement are sent by certified or registered mail by one party to the other party at its above address, they shall be deemed to have been given or made three (3) business days after the date so mailed, otherwise as of the date received.

 

11.       ASSIGNMENT.  This Agreement and the rights and duties hereunder may not be assigned by any party without first obtaining the written consent of the other, which consent shall not be unreasonably withheld.  Any such purported assignment without such written consent shall be null and of no effect.  Notwithstanding the foregoing, Sponsor may assign this Agreement without the consent of Roswell (i) to a purchaser, merging or consolidating corporation, or acquiror of substantially all of Sponsor’s assets or business and/or pursuant to any reorganization qualifying under section 368 of the Internal Revenue Code of 1986 as amended, as may be in effect at such time, or (ii) to an affiliate of Sponsor.

 

12.       GOVERNING LAW.  The validity and interpretation of this Agreement and the legal relation of the parties to it shall be governed by the laws of the State of New York and the United States.

 

13.       GOVERNING LANGUAGE.  If a translation of this Agreement is prepared and signed by the parties for the convenience of Sponsor, this English language version shall be the official version and shall govern if there is a conflict between the two.

 

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14.       EXPORT CONTROLS.  It is understood that Roswell is subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities, and that its obligations hereunder are contingent on compliance with applicable U.S. export laws and regulations (including the Arms Export Control Act as amended, and the Export Administration Act of 1979).  The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by Sponsor that Sponsor will not re-export data or commodities to certain foreign countries without prior approval of the cognizant government agency.  While Roswell agrees to cooperate in securing any license which the cognizant agency deems necessary in connection with this Agreement, Roswell cannot guarantee that such licenses will be granted.

 

15.       FORCE MAJEURE.  Roswell shall not be responsible to Sponsor for failure, to perform any of the obligations imposed by this Agreement, provided such failure shall be occasioned by fire, flood, explosion, lightning, windstorm, earthquake, subsidence of soil, failure or destruction, in whole or in part, of machinery or equipment or failure of supply of materials, discontinuity in the supply of power, governmental interference, civil commotion, riot, war, strikes, labor disturbance. transportation difficulties, labor shortage, or any cause beyond the reasonable control of Roswell

 

16.       ENTIRE AGREEMENT.  Unless otherwise specified, this Agreement and the Exclusive License Agreement embody the entire understanding between Roswell and Sponsor for this project, and any prior or contemporaneous representations, either oral or written, are hereby superseded.  No amendments or changes to this Agreement, including without limitation, changes in the statement of work, total estimated cost, and period of performance, shall be effective unless made in writing and signed by authorized representatives of the parties.  Notwithstanding the foregoing, in the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Exclusive License Agreement, the terms and conditions of the Exclusive License Agreement shall control.

 

17.       COMPLIANCE BY RESEARCHERS.  Roswell and Principal Investigator individually covenant that each of them will not permit any person (including Principal Investigator) to perform any services pursuant to or in connection with the Research or this Agreement until and unless such person has entered into a legally binding agreement with Roswell, substantially in the form of Exhibit C to this Agreement, (a) agreeing to assign to Roswell all intellectual property rights in and to inventions conceived or reduced to practice by such person (i) during the term of the Research or this Agreement and/or (ii) during the term of any engagement of such person Roswell (whether as officer, employee, student, consultant, volunteer or otherwise) and in any way arising from or pertaining to the Patent Rights or Know-how under the Exclusive License Agreement; (b) agreeing to be bound by the provisions of this Agreement, including without limitation Articles 7 and 9; and (c) agreeing to cooperate, at Company expense, in Company’s execution of its rights and duties pursuant to Article 6 of the Exclusive License Agreement.

 

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In witness whereof, the parties have signed this Agreement.

 

	
HEALTH RESEARCH, INC. 
    	
 
    	
TRACON PHARMACEUTICALS, INC.
    
	
ROSWELL PARK DIVISION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Joseph H. Jurkowski
    	
 
    	
 
    	
By
    	
/s/ Bertrand C. Liang
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title
    	
Director of Operations
    	
 
    	
 
    	
Title
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date
    	
11/1/05
    	
 
    	
 
    	
Date
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
DR. BEN K. SEON
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Ben K. Seon
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date
    	
11/01/2005
    	
 
    	
 
    	
 
    	
 
    	
 
    
									

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

EXHIBIT A

 

Scope of Research

 

This research is the study of [...***...] in the laboratory of Dr. Ben K. Seon at Rowell Park Cancer Institute.  Such study is intended to [...***...], and is expected to lead to [...***...].

 

***Confidential Treatment Requested

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

EXHIBIT B

 

Payment Terms

 

I.                                        INFORMATION FOR WIRE TRANSFERS TO HEALTH RESEARCH

 

 

 

Bank Name:

 

 

Bank Address:

 

 

Bank Phone Number:

 

 

Bank SWIFT Code:

 

 

Bank ABA Number:

 

 

HRI Account Number:

 

 

HRI Account Type:

 

 

All deposits should be identified with the name of Dr. Ben K. Seon.  Amounts deposited for the purposes of this Agreement will be separated for use in the scope of research identified in Exhibit A of this Agreement.

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

EXHIBIT C

 

Roswell Invention Assignment Agreement

 

ROSWELL PARK CANCER INSTITUTE CORPORATION (RPCIC) AND

HEALTH RESEARCH, INC. (HRI)

 

PATENT AND TECHNOLOGY TRANSFER AGREEMENT FOR EMPLOYEES

 

 

In consideration of my employment and/or continued employment by RPCIC/HRI, and/or any successor or subsidiary organizations in which RPCIC/HRI may participate as owners, participants or holders of equity interests, I, the undersigned, hereby agree as follows:

 

1.              All inventions, discoveries, technologies and ideas and improvements thereto (hereafter referred to as inventions), whether patentable or not, relating to the activities and programs of RPCIC/HRI and derived from my participation therein, which I in whole or in part, individually or with others, have conceived or made or may hereafter conceive or make during or as a consequence of my employment by RPCIC/HRI or within one (1) year thereafter, together with all patent rights for said inventions, shall be the sole property of RPCIC/HRI and I shall promptly disclose to RPCIC/HRI the existence and nature of said inventions and assign to RPCIC/HRI my entire right, title and interest in said inventions.

 

2.              I will promptly, fully and without reservation execute, acknowledge and deliver to RPCIC/HRI or to any patent management organization or other properly constituted authority designated by RPCIC/HRI any instruments, including but not limited to patent applications and assignments of rights to patents, as may be necessary or required by RPCIC/HRI to effectuate this agreement.  I recognize RPCIC/HRI’s complete and sole responsibility and authority to administer any invention or technology developed by me at its discretion.

 

3.              I hereby acknowledge the receipt of a copy of the RPCIC/HRI Guide to Technology Transfer and my reading thereof.  I agree to conform with and adhere to both the letter and the spirit of such policy as the same may from time to time be amended.

 

4.              I agree not to publish or disclose or authorize anyone else to publish or disclose any secret or confidential matter relating to any aspect of the business or activities of RPCIC/HRI with which my service in any way acquaints me except as may be properly required in the conduct of the business of RPCIC/HRI or as may be authorized by RPCIC/HRI in writing.

 

5.              I understand and agree that on behalf of RPCIC, the President & CEO of RPCIC, as appropriate, acting by and through such officers or employees as they may from time to time designate, will determine matters of patent and technology transfer policy which will affect my participation in the benefits and proceeds of commercial exploitation of inventions covered by this agreement.

 

6.              I will not advise, organize, invest in, acquire any interest in, take part in the management of, accept employment in, or enter into contractual relationship, as a consultant or otherwise, with any organization, business, corporation, partnership or enterprise engaged in or established for the purpose of commercially exploiting an invention without the specific approval in writing of the President & CEO or RPCIC; and I will promptly and fully disclose to the President & CEO of RPCIC or his designated representative(s) any offers of such interests, participations, employments or contractual relationships as soon as I become aware of them.

 

7.              Upon termination of my employment for an reason, or at any time at RPCIC/HRI’s request, I shall deliver to RPCIC/HRI, all instruments, tools, devices, compositions of matter, micro-organisms, cells, parts and products thereof, cell lines and progeny and products thereof, made, obtained, used 

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

developed, or isolated by me, alone or with others during the term of my employment, as well as keys, materials, documents, plans, records, notebooks, drawings or papers, and any copies thereof, in any way relating to the business or activities of RPCIC/HRI which may be in my possession or under my control.

 

8.              The only inventions which shall be excluded from the scope of this agreement shall be those, if any, whether patented or not, which I represent as having been conceived prior to and outside the scope of this agreement.  Such inventions are listed on the attached schedule.  I understand that the absence of any invention from the attached schedule shall constitute a waiver of all right, title and interest in that invention or its subsequent development by RPCIC/HRI.

 

(Attach Schedule of Prior Inventions per Article #8 above)

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Date
    	
 
    	
Signature
    	
 
    

 

Proprietary & Confidential - Do Not Redistribute

 

 

AMENDMENT No.1 to LICENSE AGREEMENT

 

Amendment No.1 made and effective as of November 12, 2009 to the License Agreement dated November 1, 2005 entered into by and between Health Research, Inc., a New York corporation, with a principal place of business at Elm & Carlton Streets, Buffalo, New York 14263 (“HRI”) and ROSWELL PARK CANCER INSTITUTE (“Roswell”), with a place of business at Carlton and Elm Streets, Buffalo, New York 14263 (HRI and Roswell are collectively referred to as “Licensor”) and TRACON Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of Delaware with offices at 4500 Executive Drive, Suite 330, San Diego, California 92121 (“Company”).

 

WITNESSETH:

 

WHEREAS, Company and Licensor executed a License Agreement dated November 1, 2005 (“License Agreement”) pursuant to which Company is developing one or more Licensed Products;

 

WHEREAS, the parties now desire to amend the License Agreement in certain respects on the terms and conditions set forth below.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the parties amend the Agreement and otherwise agree as follows:

 

1.            Unless otherwise set forth in this Amendment No.1, each capitalized term and abbreviation has the meaning set forth in the License Agreement.

 

2.            Amendments

 

A.         In Section 1.8 of the License Agreement, the following text shall be inserted after the final sentence of such section:

 

“Except as otherwise provided for in this Agreement, Patent Rights shall further include HA Patent Rights”

 

B.          New Section 1.11 shall be inserted after the final sentence of Section 1.10 in the License Agreement as follows:

 

“1.11 “HA Patent Rights” means (i) all U.S. and foreign patents and patent applications set forth in Exhibit 1.11 and other intellectual property rights listed on Exhibit 1.11 including continuations, continuations in part (but only with respect to subject matter disclosed in the parent case), divisionals, reexaminations, extensions, and reissue applications; and (ii) any and all US or foreign patents, patent applications, or other rights issuing from, or filed subsequent to the date of this Agreement, based on or claiming priority to the rights listed on Exhibit 1.11, including continuations,

 

 

continuations in part (but only with respect to subject matter disclosed in the parent case), divisionals, reexaminations, extensions, and reissue applications.  Exhibit 1.11 shall be amended from time to time to reflect the foregoing.”

 

C.         In Section 4.1 of the License Agreement, the following text shall be inserted after the final sentence in such section:

 

“Notwithstanding anything to the contrary herein, with respect to Licensed Products covered only by one or more claims of the HA Patent Rights, Company and its Affiliates and Sublicensees shall, on a calendar quarter basis, pay to Licensor royalties equal to [...***...] percent ([...***...]%) of Net Sales”

 

D.         In Section 4.5 of the License Agreement, the following text shall be inserted after the final sentence in such section:

 

“For the avoidance of doubt, in the case of Licensed Products covered by one or more claims of the Patent Rights (whether or not covered by one or more claims of the HA Patent Rights), Company shall pay to Licensor royalties no greater than [...***...] percent ([...***...]%) of Net Sales. In the case of Licensed Products covered only by one or more claims of the HA Patent Rights, Company shall pay to Licensor royalties no greater than [...***...] percent ([...***...]%) of Net Sales.”

 

E.          In Section 4.7 of the License Agreement, the following text shall be inserted after the final sentence in such section:

 

“Notwithstanding the terms of this Agreement (or this Section 4.7) or the Sponsored Research Agreement entered into by and between Company and Licensor on January 29, 2008, the HA Patent Rights shall not extend the term of this Agreement or the Sponsored Research Agreement with respect to payment of the Sponsored Research Fee.”

 

3.            Milestones relating to Licensed Products Covered by HA Patent Rights.

 

Company shall pay to Licensor the following payments which shall not be deducted from or credited against royalties otherwise owed or which may be owed under the License Agreement:

 

(a)         if [...***...], Company shall pay Licensor [...***...] dollars ($[...***...]) upon [...***...], in addition to the [...***...] dollar ($[...***...]) payment that is due under section 4.4.2 of the License Agreement for [...***...].

 

(b)         if [...***...]

 

***Confidential Treatment Requested

 

 

[...***...], Company shall pay Licensor [...***...] dollars ($[...***...]) upon [...***...] in addition to the [...***...] dollar ($[...***...]) payment that is due under section 4.4.3 of the License Agreement for [...***...].

 

(c)          if [...***...], Company shall pay Licensor [...***...] dollars ($[...***...]) upon [...***...] in addition to the [...***...] dollar ($[...***...]) payment that is due under section 4.4.4 of the License Agreement for [...***...].

 

(d)         if [...***...], Company shall pay Licensor [...***...] dollars ($[...***...]) upon [...***...], in addition to the [...***...] dollar ($[...***...]) payment that is due under section 4.4.5 of the License Agreement for [...***...].

 

(e)          if [...***...], Company shall pay Licensor [...***...] dollars ($[...***...]) upon [...***...], in addition to the [...***...] dollar ($[...***...]) payment that is due under section 4.4.6 of the License Agreement for [...***...].

 

4.            Representations and Warranties.

 

(a)       Each party hereby represents and warrants to the other party as follows:

 

i)               This Amendment has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

 

ii)           All necessary consents, approvals and authorizations of all governmental authorities and other entities required to be obtained by such party in connection with this Amendment have been obtained.

 

(b)      Licensor hereby represents and warrants to Company as follows:

 

***Confidential Treatment Requested

 

 

i)               The License Agreement is in full force and effect in accordance with its terms. After giving effect to this Amendment, there exist no known breaches, defaults or events which would (with the giving of notice, the passage of time or both) give rise to a breach, default or other right to terminate or modify the License Agreement.

 

5.            Except as expressly modified by this Amendment No.1, all of the terms and conditions of the License Agreement shall continue in effect.

 

IN WITNESS WHEREOF, Company and Licensor, intending to be bound, have executed this Amendment No.1 by their duly authorized representatives, and this Amendment No.1 shall be part of the License Agreement between the parties as of the date first written above. This Amendment may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same agreement.

 

 

	
TRACON   PHARMACEUTICALS, INC.   
    	
 
    	
ROSWELL   PARK CANCER INSTITUTE  
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
  /s/ Charles Theuer
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Michael B. Sexton, Esq.
    
	
Name:
    	
 Charles Theuer
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Michael B. Sexton, Esq.  
    
	
Title
    	
CEO
    	
 
    	
 
    	
  Chief Institute Operations 
    
	
 
    	
 
    	
Title:
    	
Officer/Secretary  
    
	
Date:
    	
 20 Nov 2009
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
11/16/09
    
	
 
    	
 
    	
 
    
	
HEALTH   RESEARCH, INC.   
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
  /s/ Joseph H. Jurkowski  
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 Joseph H. Jurkowski
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title: 
    	
 Director of Operations
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 11/17/09
    	
 
    	
 
    
													

 

 

Exhibit 1.11

 

[...***...]

 

[...***...]

 

***Confidential Treatment Requested

 

 

AMENDMENT No.2 to LICENSE AGREEMENT

 

 

Amendment No.2 made and effective as of February 11, 2010, to the License Agreement dated November 1, 2005 entered into by and between Health Research, Inc., a New York corporation, with a principal place of business at Elm & Carlton Streets, Buffalo, New York 14263 (“HRI”) and ROSWELL PARK CANCER INSTITUTE (“Roswell”), with a place of business at Carlton and Elm Streets, Buffalo, New York 14263 (HRI and Roswell are collectively referred to as “Licensor”) and TRACON Pharmaceuticals, Inc., a corporation duly organized and existing under the laws of the State of Delaware with offices at 4500 Executive Drive, Suite 330, San Diego, California 92121 (“Company”).

 

WITNESSETH:

 

WHEREAS, Company and Licensor executed a License Agreement dated November 1, 2005 (“License Agreement”) pursuant to which Company and Licensor are developing one or more Licensed Products;

 

WHEREAS, the parties executed Amendment No. 1 to the License Agreement dated November 12, 2009;

 

WHEREAS, the parties now desire to further amend the License Agreement in certain respects on the terms and conditions set forth below.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, the parties amend the Agreement and otherwise agree as follows:

 

1.           Unless otherwise set forth in this Amendment No.1, each capitalized term and abbreviation has the meaning set forth in the License Agreement.

 

 

2.           Amendments

 

A   New Section 15.2 shall be inserted after the final sentence of Section 15.1.5 in the License Agreement as follows:

 

15.2 Subject to the terms of this Section 15.2, Company shall be permitted to disclose Confidential Information to the third parties listed on Exhibit A attached hereto (hereinafter “Recipients”), as Company considers reasonably necessary for purposes of soliciting or obtaining investments from such Recipients in furtherance of developing and commercializing Licensed Products and/or for purposes of discussing the potential sale or acquisition of Company’s assets to such Recipients (the “Purposes”).  Company shall ensure that all such Recipients are bound by a written confidentiality agreement limiting the use of Confidential Information to the Purposes.  The confidentiality agreements will contain a term of confidentiality no less than five years from the effective date of the subject written confidentiality agreement.  Nothing in the foregoing shall be construed to prevent Recipients from disclosing or using information which:  (a) Recipient can demonstrate by competent evidence was in Recipient’s possession or control prior to the date of disclosure; (b) Recipient can demonstrate was in the public domain or enters into the public domain through no improper act on the part of Recipient or its officers, employees, agents, affiliates and consultants; (c) Recipient can demonstrate by competent evidence is or was developed independent of the information derived from the Confidential Information; (d) Recipient is required to disclose by legal, administrative or judicial process, provided however, that Recipient shall give prompt notice of such request to Company so that Company may seek an appropriate protective order, and if Company is unable to secure a protective order, Recipient shall use reasonable efforts to disclose only those portions of Confidential Information reasonably necessary to comply with such process; and (f) Recipient receives from third parties having a right to possess and disclose such information.

 

 

Company shall provide notice to Licensor within thirty (30) days of

 

 

Company’s disclosure of Confidential Information to a Recipient.  Company shall immediately notify Licensor upon learning of any misuse or misappropriation of Confidential Information by such Recipient.

 

 

B.  New Section 15.1 shall be inserted after the final sentence of new Section 15.2 in the License Agreement as follows:

 

15.2  Company hereby assumes any and all liability resulting from its disclosure of Confidential Information under this Article 15.  Company shall promptly notify Licensor upon learning of any unauthorized use or disclosure of Confidential Information and will use its best efforts to minimize damages resulting therefrom.

 

 

3.  Representations and Warranties.

 

(a)    Each party hereby represents and warrants to the other party as follows:

 

i)             This Amendment has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

 

ii)        All necessary consents, approvals and authorizations of all governmental authorities and other entities required to be obtained by such party in connection with this Amendment have been obtained.

 

(b) Licensor hereby represents and warrants to Company as follows:

 

i)             The License Agreement is in full force and effect in accordance with its terms.  After giving effect to this Amendment, there exist no known breaches, defaults or events which would (with the giving of notice, the passage of time or both) give rise to a breach, default or other right to terminate or modify the License Agreement.

 

4.           Except as expressly modified by this Amendment No.2, all of the terms and conditions of the License Agreement shall continue in effect.

 

 

IN WITNESS WHEREOF, Company and Licensor, intending to be bound, have executed this Amendment No.2 by their duly authorized representatives, and this Amendment No.2 shall be part of the License Agreement between the parties as of the date first written above.  This Amendment may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same agreement.

 

 

 

	
TRACON PHARMACEUTICALS, INC.
    	
ROSWELL PARK CANCER INSTITUTE
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Charles Theuer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/ Michael B. Sexton, Esq.
    
	
Name:
    	
Charles Theuer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Michael B. Sexton, Esq.
    
	
Title:
    	
CEO
    	
 
    	
 
    	
Chief Institute Operations
    
	
 
    	
 
    	
 
    	
Title:
    	
Officer/Secretary
    
	
Date:
    	
23 Feb 2010
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
2/11/10
    
	
 
    	
 
    	
 
    
	
HEALTH RESEARCH, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John Blandino
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
John Blandino
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Director of Operations
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
2/17/10
    	
 
    	
 
    
										

 

 

APPENDIX A

 

[...***...]

 

***Confidential Treatment RequestedExhibit 10.10

 

***Text Omitted and Filed Separately with

the Securities and Exchange Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 230.406.

 

LICENSE AGREEMENT

 

Case Western Reserve University — Tracon Pharmaceuticals Inc.

 

This Agreement (hereinafter “this Agreement”) entered into as of this 2nd day of August, 2006 (“Effective Date”) by and between Case Western Reserve University, an Ohio non-profit corporation, having a principal place of business at 10900 Euclid Avenue, Cleveland, Ohio 44106 (“CASE”) and Tracon Pharmaceuticals, Inc., a Delaware for-profit corporation, having a principal place of business at 4510 Executive Drive, Suite 330, San Diego, California 92121 (“Licensee”).

 

WITNESSETH

 

WHEREAS, CASE owns certain rights in certain technology relating to the technology described in the patents and patent application itemized in Attachment A on an “as is” basis on the Effective Date and is interested in licensing same;

 

WHEREAS, Licensee desires to acquire rights in and to the technology upon the terms and conditions herein set forth;

 

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

 

1.                                    DEFINITIONS

 

1.1       The term “Acceptance for Review” shall mean the acceptance for review of the NDA (or Foreign Equivalent) representing the FDA’s (or Foreign Equivalent’s) determination that the application is sufficiently complete to permit a substantive review.

 

1.2       The term “Affiliate” shall mean any corporation or other legal entity “controlled,” “controlling,” or “under common control with,” another corporation or legal entity, where “control” means ownership, directly or indirectly, of greater than fifty percent (50%) or more of the voting capital shares or similar voting securities of the other entity that has signed an agreement with Licensee in the form of Attachment B and such entity shall be bound as a Licensee and have all of the rights and obligations of Licensee provided by this License Agreement after the date it (they) deliver to CASE a copy of Exhibit B attached hereto executed by a duly authorized representative.

 

1.3       The term “Biological Materials” shall mean any biological materials created through use of any Licensed Technology or supplied by CASE together with any Progeny or Unmodified Derivatives thereof created by Licensee. CASE may supply Biological Materials to Licensee pursuant to a separate materials transfer agreement to be negotiated in good faith by the parties that, among other terms, will incorporate the license terms of this Agreement by reference.

 

1

 

1.4       The term “Clinical Trial” shall mean the use of a Licensed Product(s) in Subjects in accordance with 21 C.F.R. §312.

 

1.5       The term “Combination Therapeutic” shall mean a first formulation comprising methoxyamine (or a methoxyamine derivative) and an additional formulation(s) (to be administered in conjunction with the first formulation, albeit not necessarily simultaneously) falling within the definition of Licensed Technology, comprising one or more therapeutic compounds distinct from methoxyamine (or a methoxyamine derivative) administered to a Subject

 

1.6       The term “Completion of the Phase II” shall mean the date on which the Food & Drug Administration and the Licensee agree that sufficient data and information have been submitted to the FDA to permit the initiation of a Phase III Clinical Trial of a Licensed Product(s) without requiring the conduct of further Clinical Trials or the submission of additional data or information as evidenced by the date on which the FDA and the Licensee complete an End-of-Phase 2 Meeting as defined by 21 CFR 312.47(b).

 

1.7       The term “Completion of the Phase III” shall mean the date on which the Food & Drug Administration and the Licensee agree that sufficient data and information have been submitted to the FDA to permit the initiation of an NDA of a Licensed Product(s) without requiring the conduct of further Clinical Trials or the submission of additional data or information as evidenced by the occurrence of an Acceptance for Review.

 

1.8       The term “Copyrights” shall mean CASE’s copyrights in the Licensed Technology.

 

1.9       The term “Derivative” shall mean intellectual property developed by Licensee, which includes, or is based in whole or in part on, the Licensed Technology, including, but not limited to computer software, translations of the Licensed Technology to other foreign languages, adaptation of the Licensed Technology to hardware platforms, abridgments, condensations, revisions, and software incorporating all or any part of the Licensed Technology which may also include Licensee-created modifications, enhancements or other software. Licensee shall be entitled to establish all proprietary rights for itself in the intellectual property represented by Derivatives, whether in the nature of trade secrets, copyrights, patents or other rights, provided (a) that Derivatives shall be [...***...], (b) Derivatives may not [...***...], unless the License granted under 2.1 of this Agreement is then in effect, and (c) Licensee shall promptly notify CASE of Licensee-originated bug fixes to the Licensed Technology, which shall be part of the Licensed Product and owned by CASE. Any copyright registration by Licensee for Derivatives shall give full attribution to CASE’s Copyrights. CASE, and any non-profit health care institution affiliated with it, shall have the right to use Derivatives for research, educational, academic and administrative purposes.

 

***Confidential Treatment Requested

 

2

 

1.10     The term “Dispose” or “Disposition” shall mean the sale, lease or other transfer of Licensed Product(s).

 

1.11     The term “Dollar,” “U.S. Dollar,” and “U.S. $” shall mean lawful money of the United States of America.

 

1.12     The term “EMEA” shall mean the European Agency for the Evaluation of Medicinal Products.

 

1.13     The term “FDA” shall mean the United States Food & Drug Administration.

 

1.14     The term “Field of Use” shall mean all mammalian therapeutic uses.

 

1.15     The term “First Dosing” shall mean the first date a Licensed Product is administered or dispensed to, or used involving, one or more human Subjects.

 

1.16     The term “Fiscal Quarter” or “Quarter” shall refer to the normal quarterly accounting periods of Licensee; if Licensee does not have normal quarterly accounting periods, then “Fiscal Quarters” shall mean the calendar three months periods commencing with January of each year.

 

1.17     The term “Foreign Equivalent” shall mean the performance or occurrence of activities in non-U.S. jurisdictions similar to the performance or occurrence of activities in the United States covered by the terms “Clinical Trial,” “Phase II Clinical Trial,” “Completion of a Phase II Clinical Trial,” “Phase III Clinical Trial,” “Completion of a Phase HI Clinical Trial,” “IND,” “NDA,” “Submit an NDA” “NDA Approval,” and “Regulatory Approval,” as each such term is defined in this Article.

 

1.18     The term “IND” shall mean an Investigational New Drug application submitted under 21 C.F.R. §312.

 

1.19     The term “Investigational New Drug” shall mean a new drug or biological drug that is used in a Clinical Trial.

 

1.20     The term “Launch” shall mean the same as Product Launch.

 

1.21     The term “Licensed Product” or “Product” shall mean any product, service and/or process which constitutes, is based on, incorporates or utilizes, wholly or in part, Licensed Technology and/or any and all Biological Materials.

 

1.22     The term “Licensed Technology” or “Technology” shall mean (i) the technology described in the patents and patent application itemized in Attachment A on an “as is” basis on the Effective Date; (ii) the trade secrets, know-how, design architecture and the software and algorithm related to the technology described in the Patents, including related code and related Copyrights, on an “as is” basis on the Effective Date; (iii) any claims issuing on Patents covering the foregoing parts (i) or (ii), and (iv) Derivatives. If Biological Materials which contain

 

3

 

Licensed Technology are provided to Licensee, they shall be considered (to the extent of such Licensed Technology) Licensed Technology.

 

1.23     The term “MHLW” shall mean the Japanese Ministry of Health, Labour and Welfare.

 

1.24     The term “NDA” shall mean a New Drug Application submitted under 21 C.F.R. §314.

 

1.25     The term “NDA Approval” shall mean the grant by the FDA under 21 C.F.R. §314 of the right to market commercially and distribute a Licensed Product(s) within the Field of Use.

 

1.26     The term “Net Sales” shall mean the total Revenues received by Licensee, its Affiliates, sublicensees or sub-sublicensees from the manufacture use or Disposition of Licensed Product(s), less the total of all:

a.         discounts allowed in amounts customary in the trade;

b.         sales tariffs, duties and/or taxes imposed on the Licensed Product(s);

c.         outbound transportation prepaid or allowed;

d.         shipping packaging and freight charges; and

e.         amounts allowed or credited on returns.

 

No deduction shall be made for commissions paid to individuals (whether independent sales agents or persons regularly employed by Licensee).

 

Notwithstanding anything herein to the contrary, the Disposition of a Licensed Product to a Third Party without consideration to Licensee in connection with the research, development or testing of a Licensed Product shall not be considered a Disposition of a Licensed Product under this Agreement. Nor shall the Disposition of a Licensed Product solely for indigent or similar public support programs be considered a Disposition of Licensed Product under this Agreement.

 

Notwithstanding anything herein to the contrary, the Disposition of a Licensed Product between the Licensee, its Affiliate, its sublicensee or its sub-sublicensee shall not be considered a sale of Licensed Product under this Agreement unless (i) such party is the end user of such Licensed Product or (ii) such Disposition is accompanied by an exchange of funds.

 

1.27     The term “Non Royalty Sublicensing Income” or “NRSI” shall mean all non royalty considerations received by Licensee related to a sublicense or sub-sublicense agreement. NRSI would include but not be limited to all sublicense or sub-sublicense issue fees, maintenance fees and non-sales related sublicense and sub-sublicense milestone payments received by Licensee directly related to the sublicensing or sub-sublicensing by Licensee of rights to commercialize Licensed Product(s), but shall exclude:

 

a.             [...***...];

 

***Confidential Treatment Requested

 

4

 

b.            [...***...];

c.             [...***...]; and

d.            [...***...].

 

1.28     The term “Patent(s)” shall mean the patents and patent application itemized in Attachment A: any patent, patent application, continuation, continuation-in-part, divisional, reissue or reexamination in the U.S.A. or in any other country, which issues to CASE and is based on intellectual property in existence at the date of the signing of this Agreement.

 

1.29     The term “Phase II Clinical Trial” shall mean a Clinical Trial either (i) designed to provide a preliminary evaluation of the activity or effectiveness, common short-term side effects, risks, or other characteristics of a Licensed Product for particular indications; or (ii) as otherwise indicated as being a Phase H Clinical Trial in its protocol and as defined in 21 C.F.R. § 312.21 (b).

 

1.30     The term “Phase HI Clinical Trial” shall mean a Clinical Trial conducted subsequent to Completion of Phase II, which the FDA and Licensee agree is “adequate and well-controlled” as those terms are defined in 21 C.F.R. § 314.126 in its design and conduct and is intended to demonstrate that a Licensed Product(s) has sufficient safety and effectiveness as necessary for NDA Approval of such Licensed Product(s) and as defined in 21 C.F.R. § 312.21 (c).

 

1.31     The term “Prime Rate” shall mean the interest rate per annum announced from time to time by Key Bank, Cleveland, Ohio, as its prime rate.

 

1.32     The term “Product Launch” shall mean the initial delivery to an end user of a Licensed Product(s) that is subject to, and in accordance with, an NDA Approval for such Licensed Product(s).

 

1.33     The term “Progeny” shall mean an unmodified descendant of Biological Material, such as virus from virus, cell from cell, or organism from organism, and any immediate or remote progeny of or descendant from organisms or cell lines containing the same genetic mutation(s) or lesion(s) as the Biological Material

 

1.34     The term “Regulatory Approval” shall mean FDA approval or Foreign. Equivalent.

 

1.35     The term “Revenue” shall mean the U.S. Dollar value of all consideration realized by Licensee for the Disposition of Licensed Product(s).

 

***Confidential Treatment Requested

 

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1.36     The term “Royalties” shall mean Disposition royalties which are calculated as a percentage of Net Sales and will be payable by Licensee to CASE under the provisions of this Agreement.

 

1.37     The term “Stand-Alone Therapeutic” shall mean a single formulation comprising methoxyamine (or a methoxyamine derivative) and one or more therapeutic compounds (falling within the definition of Licensed Technology) distinct from methoxyamine (or a methoxyamine derivative) administered to a Subject.

 

1.38     The term “Subject” shall mean a human who participates in a Clinical Trial, either as the recipient of the Investigational New Drug or as a control. A Subject may be a healthy human or a patient with a disease.

 

1.39     The term “Submit an NDA” shall mean the initial filing of an NDA with the FDA or Foreign Equivalent.

 

1.40     The term “Third Party(ies)” shall mean any party other than the Licensee or CASE.

 

1.41     The term “Unmodified Derivative” shall mean substances created by Licensee which constitute an important unmodified functional sub-unit or expression product of Biological Material, e.g., subclones of unmodified cell lines, purified or fractionated sub-sets of Biological Material such as novel plasmids or vectors, proteins expressed as DNA or RNA, or antibodies secreted by a hybridoma.

 

1.42     The term “Year” refers to contract years of the License Agreement, i.e., a 12-month period starting with the date (or anniversary) of the Effective Date of the License Agreement.

 

2.                                    LICENSE GRANT

 

2.1       CASE hereby grants to Licensee, and Licensee hereby accepts, an exclusive, world-wide right to use the Licensed Technology to make, have made, use, have used, offer to sell, produce, manufacture, distribute, market, import and Dispose of Licensed Product(s) and to create Derivatives and/or Biological Materials for the Field of Use.

 

2.2       Licensee shall have the right to sublicense the rights granted to Licensee to Third Parties in its sole discretion, subject to the following (i) Licensee shall give CASE prompt notice of the execution of any sublicense or sub-sublicense agreement and (ii) each sublicense and sub-sublicense agreement shall contain covenants by the sublicensee and sub-sublicensee for such sublicensee and sub-sublicensee to observe and perform the same terms and conditions as those set forth for Licensee in this Agreement. Licensee understands that any sublicense or sub-sublicense agreements granted by Licensee to entities other than customers must provide that the obligations to CASE under this Agreement, including but not limited to, Indemnification, Insurance, No Warranty, and procedures for Dispute Resolution shall be binding upon such sublicensee and sub-sublicensee as if it were a party to this Agreement. The Licensee shall be

 

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responsible for curing the acts or omissions of its sublicensees and sub-sublicensees and shall not grant any rights which are inconsistent with the rights granted to and obligations of the Licensee hereunder. Any act or omission of a sublicensee or sub-sublicensee which would be a breach of this License Agreement if committed by the Licensee must be cured by such sublicensee or sub-sublicensee within sixty (60) days of the date on which Licensee becomes aware of such breach by such sublicensee or sub-sublicensee. If such sublicensee or sub-sublicensee does not cure such breach within sixty (60) days, then Licensee shall terminate such sublicense or sub-sublicense agreement and, if practicable, shall cure such breach as soon as practicable.  Each sublicense agreement and sub-sublicense agreement granted by the Licensee shall include an audit right by CASE of the same scope as provided hereinbelow with respect to the Licensee. Should this Agreement terminate, sublicenses and sub-sublicenses granted prior to the termination shall become direct licenses from CASE. The Licensee shall give CASE prompt notification of the identity and address of each sublicensee and sub-sublicensee with whom it concludes a sublicense and sub-sublicense agreement and shall supply CASE with a copy of each such sublicense and sub-sublicense agreement.

 

2.3       CASE, and any non-profit health care institution affiliated with it, shall have the right to use, free of charge, any product or process, developed by Licensee which contains or is based on any of Licensed Technology, and/or Derivatives, for research, patient care, educational, academic, or administrative purposes, provided however, that such use does not generate a profit for CASE or any non-profit health care institution affiliated with it.

 

2.4       No provision of this Agreement shall restrict CASE’s ability to conduct further research and development in the area of Licensed Technology or other areas.

 

2.5       All Licensed Product(s) shall be manufactured, sold and performed by Licensee in compliance with all applicable governmental laws, rules and regulations. Licensee shall keep CASE fully informed of, and shall move expeditiously to resolve, any complaint by a governmental body relevant to Licensed Product(s), except for complaints subject to the Section of this Agreement entitled “Infringement”.

 

2.6       Each party shall promptly notify the other parties hereto of its receipt of any allegations that Licensed Products infringe the intellectual property rights of any Third Party’s allegations. Nothing in this Section 2.6 shall be construed as obligating CASE to resolve any dispute or to settle or defend any claim, suit or proceeding arising out of Licensee’s manufacture, use or sale of Licensed Product(s). CASE retains the right to grant either exclusive or non-exclusive licenses for the Licensed Technology in fields of use other than the Field of Use for which the license hereunder is granted. CASE retains the right, ultimately exercisable in the sole discretion of CASE, after conducting reasonable legal analysis with outside legal counsel, to grant nonexclusive licenses under the Licensed Technology in the Field of Use to Third Parties as a means to resolve disputes or settle claims, suits or proceedings arising out of allegations of infringement of the intellectual property rights of the Third Party; provided that before exercising such right CASE shall notify Licensee of the situation with the Third Party and permit Licensee to participate in negotiations with the Third Party and to provide CASE with legal analyses of the Third Party’s allegations. If CASE grants such non-exclusive license, the parties will negotiate

 

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in good faith to modify terms of this License Agreement, if necessary to address in an equitable manner the economic consequences of such non-exclusive license.

 

2.7       If Licensed Technology was supported under a United States Government funding agreement, then (a) the United States Government has been or will be granted licensing rights as required under the terms of those federal agreements, (b) all rights and requirements of the United States Government and others under Public Law 96-517, and Public Law 98-620, including but not limited to government purpose license, march-in rights, and obligations to provide materials to other researchers shall remain and shall in no way be affected by this Agreement and any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification as may be required to conform to the provisions of those statutes, and (c) products sold in the United States of America, embodying or produced through use of Licensed Technology, will be manufactured substantially in the United States of America, unless a waiver has been obtained from the federal funding agency under whose funding agreement the Licensed Technology was generated.

 

2.8       Retained Rights to the Licensed Technology. Notwithstanding the license granted in this Agreement, CASE, and any non-profit health care institution affiliated with it, shall retain all rights to use the Licensed Technology for non-commercial research, patient care, educational, academic, or administrative purposes, even in the Field of Use, provided however, that such use does not generate a profit for CASE or any non-profit health care institution affiliated with it.

 

2.9       Supply of Research Materials. At [...***...], and subject to one or more of a materials transfer, confidentiality, and/or supply agreement(s) to be negotiated in good faith by the parties, Licensee will provide to CASE reasonable quantities of all research materials produced, or in the future developed, by the Licensee for the use by CASE in a manner consistent with Section 2.8 above. Provided, however, that the total amount of each such research material supplied to CASE without charge in any calendar year be limited to [...***...]. Further requests for said research material (up to [...***...] of said material) within that calendar year shall be provided [...***...]. CASE shall not use such research materials in a manner detrimental to the Licensee’s legitimate commercial interests in the Licensed Technology granted under this Agreement or transfer such research materials obtained under this Section 2.9 to any Third Party(ies) without the prior written consent of the Licensee. Any sale, offer for sale, distribution or marketing of such research materials and their derivatives within the Field of Use shall be deemed “detrimental to the Licensee’s commercial interests” within the intent of this Section.

 

2.10     CASE-based Clinical Studies. The Licensee will use reasonable and good faith efforts to ensure that, under financial terms that are customary and reasonable and in accordance with the Licensee’s standard clinical research terms, CASE and its affiliated hospitals have, subject to applicable FDA and governmental regulations and policies pertaining to conflicts, [...***...]. The ultimate decision regarding the selection of [...***...] shall be made by Licensee after reasonable and good faith consideration of one or more factors

 

***Confidential Treatment Requested

 

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including, but not limited to: [...***...] (the “Decision Factors”). The [...***...] shall be made by Licensee after a reasonable and good faith analysis of [...***...] ability to meet the Decision Factors.

 

3.                                    TERM OF THIS AGREEMENT

 

The term of this Agreement shall cover the period commencing on the Effective Date and shall conclude at on the expiration date of the last-to-expire Patent on a country-by-country basis, whichever comes later, unless otherwise terminated pursuant to another provision of this Agreement.

 

4.                                    DUE DILIGENCE

 

4.1       Licensee shall use its best efforts to effect introduction of Licensed Technology into the commercial market as soon as possible; thereafter, until the termination of this Agreement, Licensee shall keep Licensed Technology reasonably available to the public.

 

4.2       Licensee shall, at a minimum, achieve the following milestones (“Diligence Milestones”):

 

(a)                               On or before the first anniversary of the Effective Date, a Development Committee (the “Committee”) shall be organized to monitor the clinical progress of the Licensed Products at Licensee’s expense. The Committee will consist of independent scientific and technical thought leaders that are highly regarded by the scientific community in the field of each Licensed Product and at least one representative from each of CASE and Licensee. The Committee will be responsible for (i) making recommendations to Licensee’s management relating to the pre-clinical and clinical development strategy; (ii) analyzing and assessing ongoing pre-clinical and clinical development of each Licensed Product; and (iii) assisting Licensee in preparing pre-clinical and clinical development budgets. The actions and opinions of the Committee will be confidential (specifically, CASE may be asked to enter into a separate confidentiality agreement to govern the Committee meetings), however, the CASE representative may report clinical updates to a designated senior official at CASE and the Technology Transfer Office of CASE who will agree to keep such information confidential. The Committee will meet at least once a year.

 

(b)                              On or before the [...***...] anniversary of the Effective Date, [...***...].

 

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(c)                               On or before the [...***...] anniversary of the Effective Date, [...***...].

 

(d)                              Within [...***...] years of [...***...].

 

(e)                               Within [...***...] years of [...***...].

 

(f)                                Within [...***...] years of [...***...].

 

4.3       Licensee’s default in performance in accordance with Section 4 herein shall be grounds for CASE to terminate this Agreement pursuant to the Section entitled “Termination”.

 

5.                                    ROYALTIES AND NRSI

 

5.1       Royalties payable by Licensee to CASE shall be [...***...] percent ([...***...]%) of Net Sales by Licensee or its Affiliates and [...***...] percent ([...***...]%) of all Royalties received by Licensee and its Affiliates from the Net Sales of Licensed Product(s) by sublicensees or sub-sublicensees, provided however, that in no event shall CASE receive less than [...***...] percent ([...***...]%) of Net Sales of Licensed Product(s) by such sublicensees or sub-sublicensees.

 

***Confidential Treatment Requested

 

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5.2       Licensee shall pay CASE a non-refundable up-front fee of [...***...] dollars ($[...***...]), due and payable thirty (30) days after the Effective Date of this Agreement. This up-front fee will not be credited against any other amounts due under this Agreement.

 

5.3       Licensee shall pay CASE a minimum royalty of [...***...] dollars ($[...***...]) per year (“Annual Minimum Royalty”), payable on each anniversary of the Effective Date commencing on the [...***...] anniversary of the Effective Date or the [...***...] anniversary of the Effective Date following the [...***...], whichever comes earlier. The Annual Minimum Royalty shall be credited against the Royalties payable in a Year.

 

5.4       Annual Minimum Royalty payments are to be adjusted by [...***...].

 

5.5       Milestone Payment Amounts. The Licensee will make a payment to CASE within thirty (30) days of each occurrence of the achievement of a Milestone as follows:

 

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MILESTONE
    	
MILESTONE PAYMENT 
   AMOUNT
    
	
[...***...]
    	
[...***...] 
   Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. 
   $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. $[...***...]) 
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] 
   Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] 
   Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. 
   $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. $[...***...])
    
	
 
    	
 
    

 

***Confidential Treatment Requested

 

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[...***...]
    	
[...***...] Dollars (U.S. 
   $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] 
   Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. 
   $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] 
   Dollars (U.S. $[...***...])
    
	
 
    	
 
    
	
[...***...]
    	
[...***...] Dollars (U.S. $[...***...])
    

 

5.6       Royalty Adjustments. If [...***...], and, after written notice to CASE and good faith negotiations with [...***...], the Licensee is required to [...***...], then the Licensee may deduct [...***...] from the Royalty(ies) payable to CASE pursuant to this Agreement up to, but no more than [...***...] percent ([...***...]%) of the Royalty(ies) otherwise payable to CASE under this Agreement, without a carryover to subsequent annual periods in which Royalties are payable.

 

5.7       Milestone Cure. If the Licensee fails to achieve any Diligence Milestone under Section 4.2, the Licensee has the right to cure such failure as provided under Section 11.2 of this Agreement. Upon expiration of the pertinent cure period, and in lieu of termination, CASE, at its sole option upon sixty (60) days prior written notice, may convert the Licensee’s exclusive 

 

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license under this Agreement into a non-exclusive license and may grant non-exclusive licenses and other rights to the Licensed Technology to Third Parties, even in the Field of Use, whether such be commercial entities, academic institutions or other persons.

 

5.8       NRSI Royalty. Licensee shall pay to CASE [...***...] percent ([...***...]%) of all NRSI.

 

5.9       In the event that a Licensed Product is Disposed in the form of a combination product containing the Licensed Product and one or more Useful Components (as hereinafter defined) which are not themselves a Licensed Product, the Net Sales for such combination product shall be calculated by multiplying the sales price of such combination product by the fraction (A+B) where: A is the invoice price of the Licensed Product, if sold separately, and if not sold separately, the fair market value of the Licensed Product; and B is the total invoice price of the Useful Component, if sold separately, and if not sold separately, the fair market value of the Useful Component.

 

For purposes of this Section 5.9 only, “Useful Component” means an ingredient that is used for enhancing the efficacy and/or safety of a Licensed Product; formulating a Licensed Product and/or delivering a Licensed Product.

 

5.10     No multiple Royalties. Multiple Royalties shall not be payable because the use or Disposition of any Licensed Product is or shall be covered by more than one of the group consisting of Patents, Derivatives, and/or Biological Materials. Royalties will not be payable on Disposition by a sublicensee if Royalties are or will be paid upon the Disposition by Licensee to the sublicensee in question.

 

6.                                    PAYMENT TERMS

 

6.1       Royalties shall be paid by Licensee to CASE, as defined in the Section entitled “Royalties” for each Fiscal Quarter within sixty (60) days of the end of such Fiscal Quarter, until this Agreement expires or is terminated in accordance with this Agreement. If this Agreement terminates before the end of a Fiscal Quarter, the payment for that terminal fractional portion of a Fiscal Quarter shall be made within ninety (90) days of the date of termination of this Agreement.

 

6.2       All Royalties hereunder shall be paid in U.S. Dollars and shall be made by wire transfer to CASE’s account, or by Licensee’s check sent in accordance with the Section entitled “Notices”.

 

6.3       All Royalties payable hereunder which are overdue shall bear interest until paid at a rate equal to the Prime Rate in effect at the date such Royalties were due plus [...***...] percent ([...***...]%) per annum, but in no event to exceed the maximum rate of interest permitted by applicable law. This provision for interest shall not be construed as a waiver of any rights CASE has as a result of Licensee’s failure to make timely payment of any amounts.

 

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7.                                    REPORTS AND AUDITS

 

7.1       Licensee shall report Quarterly to CASE its Net Sales and Revenues, which are subject to Royalty payments.

 

7.2       No later that sixty (60) days after June 30 of each calendar year, Licensee shall provide to CASE a written annual progress report (“Progress Report”) describing progress on research and development, Regulatory Approvals, manufacturing, sublicensing, marketing and sales during the most recent twelve (12) month period ending June 30 and plans for the forthcoming year. Specifically, Licensee shall provide to CASE written annual reports of progress towards Diligence Milestones with supporting documentation in addition to the Progress Report (the “Annual Report”). If multiple Licensed Product(s) are being developed, the Progress Report and the Annual Report shall provide the information set forth above for each Licensed Product.

 

7.3       No later than thirty (30) days after the completion of a Diligence Milestone, Licensee shall provide to CASE a written report on the completion of said Diligence Milestone.

 

7.4       Licensee shall maintain accurate books and records such that the Royalties due and payable hereunder can be easily ascertained. Such books and records shall be maintained at Licensee’s principal place of business and shall be available for inspection by CASE or its representatives during the normal business day upon not less than ten (10) days prior written notice, provided that CASE or its representatives agree to protect the confidentiality of the information as to the customers of Licensee.

 

7.5       Licensee shall make available Licensee’s books and records for audit by an accounting firm or representative of CASE’s selection, and Licensee agrees to cooperate fully in any such audit, provided that the auditors agree to protect the confidentiality of the information as to the customers of Licensee. Any such audit shall not be more frequent than annually. In the event that such audit determines that the amount of Royalties paid to CASE was in error by more than [...***...] ([...***...]%) percent, Licensee shall pay the costs of the audit.

 

7.6       CASE agrees to hold in confidence each such report delivered by Licensee pursuant to this Article 7 until the termination of this Agreement unless or until the information contained therein is or becomes public through no fault of CASE.

 

8.                                    IMPROVEMENTS AND COLLABORATIONS

 

8.1       Discussion of technical matters with each other by the parties will not create any rights to ownership of patents, copyrights, mask work rights, trade secrets or other intellectual property rights in solutions to the problem developed solely by employees or agents of the other party hereto.

 

8.2       Licensee will own all of the right, title and interest (including patents, copyrights, mask work rights, trade secrets and any other intellectual property rights, but 

 

***Confidential Treatment Requested

 

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excluding Patents) in and to the results of the collaboration between the parties that are developed solely by Licensee employees or agents.

 

8.3       CASE will own all of the right, title and interest (including patents, Patents, copyrights, mask work rights, trade secrets and any other intellectual property rights) in and to the results of the collaboration between the parties that are developed solely by CASE employees or agents.

 

8.4       All intellectual property that is not governed by a sponsored research, clinical research or other agreement with CASE, and which results in Patents or Licensed Technology developed jointly by employees or agents of CASE and Licensee shall be owned by CASE. Licensee may utilize such jointly developed property pursuant to the terms of this License Agreement. CASE may issue licenses to others regarding such jointly developed propertywhich result in Patents or Licensed Technology, as long as such licenses do not violate any exclusive license to Licensee then existing under the Section entitled “License Grant”.  If any other intellectual property is developed jointly by employees or agents of CASE and Licensee which would not constitute a Patent or Licensed Technology and which are not subject to another agreement between CASE and Licensee, CASE and Licensee shall jointly own (without any duty to account to the other for profits) all right, title and interest (including patents, copyrights, mask work rights, trade secrets, and other intellectual property rights) therein. If any patentable invention which would not constitute a Patent or Licensed Technology arises out of such joint development by employees or agents of CASE and Licensee, CASE and Licensee will engage in good faith efforts to mutually agree on whether and how to pursue patent, copyright or mask work protection of the invention in the U.S. and elsewhere.

 

8.5       Except as provided in this Section, nothing herein shall be deemed to grant any license or rights in any other technology in addition to the Licensed Technology.

 

9.                                    PATENTS AND OTHER INTELLECTUAL PROPERTY

 

9.1       CASE Property. Intellectual property rights to Licensed Technology such as Patent(s), patent(s), and Copyrights which may be obtainable will remain the property of CASE. Trademarks existing on the Effective Date of this License Agreement belong to CASE. CASE maintains the right to apply for and prosecute Patents.

 

9.2       Licensee shall bear all patenting and other intellectual property protection costs for protection of Licensed Technology (the “Patent Costs”). Licensee will reimburse CASE for all past and future fees and expenses related to the preparation, filing, prosecution and maintenance of the Patents, within thirty (30) days of the receipt of each notification or bill, provided however, that in no event shall the amount Licensee will reimburse CASE for expenses incurred prior to the Effective Date exceed [...***...] dollars ($[...***...]) if this Agreement is executed before July 1, 2006.

 

9.3       CASE shall provide Licensee with ample time in which to review any correspondence for which submission to any patent authority is intended, prior to such 

 

***Confidential Treatment Requested

 

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submission and CASE shall consider in good faith any comments regarding such submission provided to CASE by Licensee.

 

9.4       CASE shall retain patent counsel reasonably suitable to Licensee with respect to quality of work, cost and responsiveness.

 

9.5       CASE has applied for, and/or will apply for and prosecute Patent coverage, at Licensee’s expense, in any country if so requested by Licensee, for any and all Patents listed in Attachment A, to the extent that such protection is reasonably obtainable. Within one (1) year of the Effective Date, CASE and Licensee shall reasonably agree upon a budget with respect to the Patent Costs (the “Patent Budget”). CASE and Licensee shall update said Patent Budget every one (1) year thereafter. CASE and Licensee shall use reasonable efforts to maintain the Patent Costs actually incurred within fifteen percent (15%) of the Patent Costs forecast in the Patent Budget for any given one (1) year period, unless the prior written agreement of the Licensee is obtained.

 

9.6       CASE may, at its option and sole discretion and at its own expense, pursue patent, copyright and/or trademark rights for Licensed Technology in any country for which coverage has not been requested by Licensee in accordance with Subsection 9.5 above. If Licensee does not reimburse CASE for such fees within thirty (30) days of the receipt of each notification, then Licensee shall have no rights under any Patent in that country.

 

9.7       If CASE pursues a patent application or patent for which Licensee does not wish to assert any licensing rights, Licensee may terminate its obligations with respect to any such given patent application or patent upon thirty (30) days prior written notice to CASE and thereupon relinquish any rights to the specific technology covered by such patent; provided, however, any relinquishment of a patent application or patent by the Licensee under this section shall not affect in any way Licensee’s rights and obligations to CASE arising from Licensee’s continued use of any patent or patent application that is not so specifically relinquished. CASE will use its reasonable efforts to curtail such patent costs chargeable to the Licensee under this Agreement after this notice is received from Licensee. CASE may continue prosecution or maintenance of these application(s) or patent(s) at its sole discretion and expense, and Licensee will have no further rights or licenses to them. Licensee shall grant and hereby does grant CASE a world-wide, royalty-free, non-exclusive, irrevocable, sub-licensable commercial license to Patents and Licensed Technology, within the Field of Use, for the sole and exclusive purpose of being able to commercially practice and to sublicense for commercially practicing the rights relinquished by Licensee and gained by CASE under this Section 9.7.

 

10.                            MARKINGS, TRADEMARKS AND TRADE NAMES

 

10.1     Licensee shall have marked the appropriate portions of all Licensed Product with any applicable United States of America and foreign Patent numbers in accordance with the applicable laws of the countries in which the materials are intended to be used. Licensee shall neither register nor use any CASE trademarks or trade names.

 

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10.2     Licensee acknowledges that it does not have any rights or any title whatsoever in or to CASE’s technology, trade name or in or to any of CASE’s trademarks, except as provided under this Agreement. Any reference by Licensee to CASE beyond the above may only be done with express written permission of CASE’s Associate Vice President for Technology Transfer.

 

11.                            TERMINATION

 

11.1     In the event that Licensee defaults in the payment in full of any amount required to be paid under this Agreement on the date such payment is due, in addition to utilizing any other legal and/or equitable remedies, CASE shall have the right by written notice to Licensee after such default either (i) to terminate the exclusivity, if any, of the license hereunder (by amending the word “exclusive” in the License Grant to read “non-exclusive”) without any reduction in any of the payments due from Licensee, or (ii) to terminate this Agreement. CASE shall give written notice of the default (the “Notice of Default”) to Licensee. If Licensee has not cured such default by full payment of such amount, including any interest payable on amounts due hereunder, within ninety (90) days of the effective date of the Notice of Default, CASE shall have the right by a second written notice to Licensee to terminate the exclusivity of this Agreement or to terminate this Agreement (the “Notice of Termination”).  If CASE terminates this Agreement pursuant to this Section, Licensee shall still pay CASE any Annual Minimum Royalties due for the next Year thereafter, notwithstanding termination of Licensee’s rights hereunder.

 

11.2     In the event that either party to this Agreement defaults in the performance of any of its obligations hereunder (other than the defaults referred to in Section 4 (Due Diligence) and Section 11.1. (Termination), hereof) and fails to cure such default within sixty (60) days after written notice of such default from such other party, the other party shall have the right by written notice to the defaulting party within sixty (60) days after the expiration of such sixty (60) day cure period to terminate this Agreement.

 

11.3     The termination of this Agreement shall not terminate (i) the obligation of Licensee to pay any amounts, which have accrued or which are otherwise to be paid by Licensee under the terms of this Agreement, or (ii) the obligations of Licensee under the Sections entitled “Reports and Audits,” “Patents and Other Intellectual Property,” “Termination,” “Taxes,” “Confidentiality and Trade Secrets,” “Indemnification,” “Insurance,” “Dispute Resolution,” and “Infringement” hereunder.

 

11.4     Upon termination of this Agreement, Licensee will immediately discontinue any further use of Licensed Technology and discontinue production of any Licensed Product(s).

 

11.5     Provided that this Agreement has not been terminated by Licensee or CASE, then on a country by country basis (effective on the later of (a) fourteen (14) years and (b) the date of the last to expire Patent in such country) licensee shall have a royalty free non-exclusive license under Licensed Technology to make, have made, use, have used, offer to sell, produce, manufacture, distribute market and Dispose of Licensed Product(s) and to create Derivatives and/or Biological Materials for the Field of Use.

 

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11.6     Licensee shall have the right at any time to terminate this Agreement in its entirety for any reason or no reason, by giving thirty (30) days notice thereof in writing to CASE. Notwithstanding anything to the contrary, in the event that Licensee terminates this Agreement in its entirety, Licensee shall tender to CASE the termination fee of [...***...] dollars ($[...***...]) and shall further pay any amounts due and owing to CASE pursuant to this Agreement upon such termination. A termination pursuant to this section shall be subject to the provisions of Section 11.3 as with all other terminations.

 

12.                            TAXES

 

Licensee shall pay all taxes which may be assessed or levied on, or on account of, the Licensed Technology, Licensed Product made, used or Disposed of by Licensee or its Affiliates hereunder and all taxes (other than taxes imposed by the United States of America or the State of Ohio or jurisdictions within such State) levied on or on account of the amounts payable to, or for the account of, CASE under this Agreement.

 

13.                            REPRESENTATIONS AND WARRANTIES

 

13.1     Each party hereby represents and warrants to the other party as follows:

 

13.1.1  Corporate Existence. Such party is a corporation duly organized, validly existing and in good standing under the laws of the state in which it is incorporated.

 

13.1.2  Authorization and Enforcement of Obligations. Such party (a) has the corporate power and authority and the legal right to enter license agreements and (b) has taken all actions necessary under its governing documents and policies to execute this license agreement. This Agreement has been executed and delivered on behalf of such party as required by its governing documents and policies, and constitutes a legally binding obligation, enforceable against such party in accordance with its terms.

 

13.1.3  No Consents. No consents by governmental authorities are required to be obtained for execution of this Agreement.

 

13.1.4  Patents. Neither Dr. Stanton Gerson nor Michael Haag or Steve Tan, to the best of their knowledge, have received oral or written notice of a claim that any of the patents or patent application listed on Attachment A infringe the intellectual property rights of a Third Party other than claim(s) listed in Attachment C which CASE has previously disclosed to Licensee.

 

13.2     NO WARRANTY. ALL LICENSED TECHNOLOGY, INFORMATION, MATERIALS, SERVICES, INTELLECTUAL PROPERTY OR OTHER PROPERTY OR RIGHTS, GRANTED OR PROVIDED BY CASE PURSUANT TO THIS AGREEMENT (“DELIVERABLES”) ARE PROVIDED ON AN “AS IS” BASIS. CASE MAKES NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED, AS TO ANY MATTER INCLUDING, BUT NOT LIMITED TO, WARRANTY OF FITNESS FOR PARTICULAR PURPOSE, OR MERCHANTABILITY, EXCLUSIVITY OR RESULTS 

 

***Confidential Treatment Requested

 

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OBTAINED FROM USE. NOR SHALL EITHER PARTY HERETO BE LIABLE TO THE OTHER FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES SUCH AS LOSS OF PROFITS OR INABILITY TO USE SAID INTELLECTUAL PROPERTY OR ANY APPLICATIONS AND DERIVATIONS THEREOF. CASE DOES NOT MAKE ANY WARRANTY OF ANY KIND WITH RESPECT TO FREEDOM FROM PATENT, TRADEMARK, OR COPYRIGHT INFRINGEMENT, OR THEFT OF TRADE SECRETS AND DOES NOT ASSUME ANY LIABILITY HEREUNDER FOR ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, OR COPYRIGHT ARISING FROM THE USE OF DELIVERABLES. LICENSEE AGREES THAT IT WILL NOT MAKE ANY WARRANTY ON BEHALF OF CASE, EXPRESSED OR IMPLIED, TO ANY ENTITY CONCERNING THE APPLICATION OF OR THE RESULTS TO’BE OBTAINED WITH DELIVERABLES.

 

14.                            COSTS

 

All costs and expenses incurred by Licensee in carrying out Licensee’s obligations under this Agreement shall be paid by Licensee, and Licensee shall not be entitled to reimbursement from Royalties hereunder or otherwise therefor from CASE. Licensee shall possess or obtain at its own expense all necessary licenses and permits and shall comply with all laws, ordinances, rules or regulations affecting the exportation, use, and/or sale or transfer of the Licensed Product, Licensed Technology and/or Derivatives.

 

15.                            CONFIDENTIALITY, TRADE SECRETS, AND PUBLICATION

 

15.1     “Confidential Information” shall mean any information relating to the Licensed Technology, the terms of this Agreement (as from time to time amended), Patents, copyrights, algorithms, and software covered by this Agreement or information disclosed to Licensee in connection with performance of this Agreement, provided that such information is marked “Confidential” or designated in writing as “Confidential” within thirty (30) days after an oral disclosure to Licensee. All such information shall be Confidential Information, including information disclosed to Licensee prior to the date of this Agreement, unless such information (i) was already in Licensee’s possession prior to the disclosure thereof by CASE as provided in this Section I5.1; (ii) has been published or is published hereafter, unless such publication is a breach of this Agreement; (iii) is received by Licensee from a Third Party not under an obligation of confidentiality with respect thereto; (iv) is independently developed by Licensee; (v) is approved for disclosure in writing by CASE or (v) is required to be disclosed by law, provided however, in the case of disclosure pursuant to legal process, reasonable notice of the impending disclosure is provided to the disclosing party. In the event that such information shall be established to have been known to Licensee prior to the disclosure thereof by CASE by reference to any publication thereof by Licensee or by reference to any internal writing or other business record maintained by Licensee in the ordinary course of business, such information shall not be deemed to be Confidential Information for purposes of this Agreement following notification to CASE of such fact.

 

15.2     Licensee shall maintain in confidence and shall not disclose to any person not a party hereto, nor shall Licensee use or exploit in any way without CASE’s written agreement, any Confidential Information until three (3) years after the later of the date of the termination of

 

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this Agreement or the end of the term of the last to expire Patent, unless such information ceases to be Confidential Information prior to the end of such period through no fault of Licensee or Licensee and CASE enter into an agreement authorizing same.

 

15.3     Licensee shall maintain with respect to such Confidential Information a standard of care which is no less than that standard which Licensee maintains to prevent the disclosure of its own most valuable confidential information but in no event shall Licensee exercise less than reasonable care to prevent the disclosure of Confidential Information by its employees or representatives.

 

15.4     Upon termination of this Agreement for any reason, Licensee agrees to return at once to CASE, without copying, all originals and copies of all materials (other than this Agreement) containing any Confidential Information, provided however, Licensee shall be entitled to retain one (1) copy of all such Confidential Information solely for purposes of establishing its obligations hereunder.

 

15.5     For purposes of this Section the term “CASE” shall include inventors of the Licensed Technology and those working with or under them.

 

15.6     During the period five (5) years from the Effective Date, CASE will provide Licensee a copy of any proposed publication containing Licensed Technology fifteen (15) days before submission for publication other than for the submission of abstracts and concerning abstracts CASE will provide Licensee a copy of any proposed abstract containing Licensed Technology five (5) days before submission of said abstract.

 

16.                            INDEMNIFICATION

 

Licensee hereby agrees to defend, indemnify and hold harmless CASE, its trustees, officers, employees, attorneys and agents from all claims or demands made against them (and any related losses, expenses or attorney’s fees) arising out of or relating to Licensee’s and/or any of its sublicensee’s use of or conduct regarding Licensed Product(s), Licensed Technology, Deliverables or Derivatives, including but not limited to, any claims of product liability, personal injury, death, damage to property or violation of any laws or regulations.

 

17.                            INSURANCE

 

Before Licensed Technology is administered to human beings, Licensee shall obtain and maintain appropriate coverage of general liability, product liability, and public liability insurance in the amount of no less than Three Million Dollars (U.S. $3,000,000) to protect CASE, its trustees, officers, employees, attorneys, and agents under the indemnification provided hereunder. CASE, its trustees, officers, employees, attorneys, and agents shall be named as additional insureds on Licensee’s insurance policies and shall be provided appropriate certificates of insurance thereunder.

 

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18.                            BREACH

 

No acquiescence in any breach of this Agreement by either party shall operate to excuse any subsequent or prior breach.

 

19.                            PRIOR AGREEMENT

 

Except for any confidential disclosure agreement executed by the parties, this Agreement supersedes all previous agreements relating to the subject matter hereof, whether oral or in a writing, and constitutes the entire agreement of the parties hereto and shall not be amended or altered in any respect except in a writing executed by the parties.

 

20.                            INTERPRETATION

 

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Ohio, United States of America, without regard to conflict of law principles.

 

21.                            DISPUTE RESOLUTION

 

21.1                    Subject to Subsection 21.2, any controversy or dispute arising under this Agreement (including, but not limited to, the validity, scope and enforceability of this arbitration clause) shall be referred to and finally settled by arbitration in the City of Cleveland, Ohio, under the auspices of, and conducted in accordance with, the rules of the American Arbitration Association. All arbitration proceedings shall be before a board of three (3) arbitrators, for each of which each party shall select one (1) arbitrator and the selected arbitrators shall select the third arbitrator. The costs of the third arbitrator shall be divided equally between the parties, and each party shall pay the costs of the arbitrator selected by it. Any award of the arbitrators shall be final and conclusive on the parties to this Agreement, and judgment upon such award may be entered in any court having jurisdiction thereof

 

21.2                    Either party may seek injunction relief for: (a) violation by the other party of the Sections entitled “Reports and Audits, “Markings, Trademarks and Trade Names;” “Confidentiality and Trade Secrets,” “Insurance” and “Dispute Resolution”; (b) for enforcement of any arbitration award; or (c) for enforcement of any non-arbitrable matter. The prevailing party shall be entitled to recover from the other all costs, including attorney’s fees, related to the action for injunctive relief.

 

21.3                    Licensee hereby irrevocably and unconditionally:

 

(i)                                  Agrees that any legal action, suit or proceeding contemplated by this Section entitled “Dispute Resolution” hereof (collectively, “Related Litigation”) may be brought in any state or federal court of competent jurisdiction sitting in Cuyahoga County, Ohio, submits to the jurisdiction of such courts, and to the fullest extent permitted by law agrees that it will not bring any Related Litigation in any other forum (but nothing herein shall affect the right of CASE to bring any action, suit or proceeding in any other forum);

 

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(ii)                              Waives any objection which it may have at any time to the laying of venue of any Related Litigation brought in any such court located in Cuyahoga County, Ohio, waives any claim that any such Related Litigation has been brought in an inconvenient forum, and waives any right to object, with respect to any Related Litigation brought in any such court, that such court does not have jurisdiction over Licensee; and

 

(iii)                          Consents and agrees to service of any summons, complaint or other legal process in any Related Litigation by registered or certified mail, postage prepaid, to Licensee at the address for notices described in the Section entitled “Notices” hereof, and consents and agrees that such service shall constitute in every respect valid and effective service (but nothing herein shall affect the validity or effectiveness of process served in any other manner permitted by law).

 

22.                            INFRINGEMENT

 

22.1                    Licensee shall have the first right, but not the obligation, during the term of this Agreement to commence an action for infringement of the Patents against any Third Party for any infringement occurring within the Field of Use, provided that Licensee shall provide CASE thirty (30) days prior written notice of such infringement and of Licensee’s intent to file such action. CASE shall have the right at its own expense to appear in such action by counsel of its own selection. If required by the jurisdictional laws of the forum that any such action be prosecuted in the name of the owner of the Patent, CASE shall voluntarily appear at Licensee’s expense; provided that if such appearance subjects CASE to any unrelated action or claim of a Third Party or Licensee in such jurisdiction, then CASE shall have the right to decline such appearance. Settlement of any action brought by Licensee shall require the consent of CASE (if rights under the Patents or past or future economic recovery upon such rights are affected) and Licensee, which neither shall unreasonably withhold from the other, and any settlement amount or recovery for damages shall be applied as follows: (i) first, to reimburse the parties for their expenses in connection with the litigation; and (ii) second, CASE shall receive reasonable compensation for the time of any CASE personnel (in excess of [...***...] hours in aggregate) involved in the action at the request of Licensee; and (iii) third, CASE shall receive [...***...] percent of any portion of any amount received from such action which was calculated on the basis of payment of a reasonable royalty to Licensee and [...***...] percent of all other amounts received. For the avoidance of doubt the [...***...] percent shall not be calculated on [...***...].

 

22.2                    CASE shall have the right in its sole discretion during the term of this Agreement to commence an action for infringement of the Patents against any Third Party for any infringement occurring anywhere in the world, provided that, before commencing any such action concerning products within the Field of Use, CASE shall provide Licensee not less than thirty (30) days’ prior written notice of such infringement and of CASE’s intent to file such action and the option to commence an action for infringement of the Patents in its own name in accordance with Section 22.1. Licensee shall have the right at its own expense to appear in such

 

***Confidential Treatment Requested

 

23

 

CASE commenced action by counsel of its own selection. If CASE provides Licensee with such notice before instituting an action concerning products within the Field of Use and Licensee fails to initiate an action against such Third Party prior to the commencement of an action by CASE, then any settlement amount or recovery for damages shall [...***...] and [...***...].

 

22.3                    Notwithstanding the pendency of any infringement (or other) claim or action by or against Licensee, Licensee shall have no right to terminate or suspend (or escrow) payment of any amounts required to be paid to CASE pursuant to this Agreement.

 

22.4                    Cooperation. In any suit to enforce and/or defend the Patents pursuant to this Agreement, the party not in control of such suit shall, at the request and expense of the controlling party, cooperate in all respects and, to the extent reasonably practicable, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

 

23.                            NOTICES

 

Any notice under any of the provisions of this Agreement shall be deemed given when deposited in the mail, postage prepaid, registered or certified first class mail and addressed to the applicable party at the address stated on the signature page hereof, or such other address as such party shall specify for itself by like notice to other party. Each party shall transmit to the other a facsimile copy of each such notice promptly after such deposit in the mail.

 

24.                            ASSIGNMENT

 

Except in the instance of (a) a merger of Licensee with another entity or the sale of the Licensee (effectuated either by the sale or exchange of the Licensee’s stock or the sale or transfer of substantially all of the Licensee’s assets), in which the License is transferred to the surviving entity (b) the transfer of this Agreement along with or the sale or transfer of the assets of Licensee to which this Agreement relates or (c) to an Affiliate of Licensee, provided that any successor Affiliate entity must have a net asset value (using GAAP and not including the value of the Licensed Technology) of at least [...***...] dollars ($[...***...]), or shall have a net asset value (using GAAP and not including the value of the Licensed Technology) of at least [...***...] dollars ($[...***...]) within twelve (12) months of such assignment; if such successor entity does not have such net asset value within twelve (12) months of such assignment, the assignment shall be deemed null and void. Subject to the provisions of this Article 24, Licensee shall neither assign nor transfer this Agreement or any interest herein without the prior written consent of CASE.

 

25.                            HEADINGS

 

The section headings contained in this Agreement are set forth for the convenience of the parties only, do not form a part of this Agreement and are not to be considered a part hereof for the purpose of construction or interpretation hereof, or otherwise.

 

***Confidential Treatment Requested

 

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26.                            EXPORT CONTROLS

 

It is understood that CASE is subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by Member that Member shall not export data or commodities to certain foreign countries without prior approval of such agency. CASE neither represents that a license shall not be required nor that, if required, it shall be issued.

 

27.                            TECHNOLOGY TRANSFER

 

Within a reasonable period of time following the execution of this Agreement, CASE shall make a good faith effort to transfer to Licensee, at no additional cost, copies of relevant information regarding Licensed Technology from the following: (pre-clinical and clinical data; human safety data; preliminary efficacy data; INDs and other regulatory data and submissions; information relating to Patents, Licensed Products, or Licensed Technology; communications with the FDA, MHLW and/or EMEA (including the minutes of any meetings therewith); Clinical Trial master files, including case report forms; listings and tables of results from the Clinical Trials; treatment related serious adverse event reports from the Clinical Trials; and data and reports regarding manufacturing and drug substance relating to the Licensed Technology and/or Licensed Product(s),) except to the extent prohibited by governmental statutes or regulations or policies or protocols of CASE or any non-profit health care institutions affiliated with it. In the case of original laboratory or research notebooks CASE shall not be required to provide copies of the entire notebook, instead CASE may make copies of the relevant portions of said notebooks or provide written summaries of relevant information contained in said notebooks where appropriate. All such copies provided to Licensee under this Section 27 shall be considered Confidential Information.

 

28.                            USE OF NAMES

 

Unless otherwise required by law, at no time following the execution of this Agreement shall either party use the name of the other, or any person or entity affiliated with either party or discuss the terms hereof with any person or entity, without the prior written consent of the other or such person. Licensee may use CASE’s name only to designate CASE as the licensor of the Licensed Technology.

 

(The balance of this page is intentionally left blank)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed in duplicate counterparts, each of which shall be deemed to constitute an original, effective as of the date first above written.

 

The undersigned verify subject to the penalties of Section 2921.13 of the Ohio Revised Code relating to unsworn falsification to authorities that they have the authority to bind to this Agreement the party on behalf of which they are executing below.

 

	
Case Western Reserve University
    	
 
    	
Case Western Reserve University
    
	
 
    	
 
    	
 
    
	
By:
    	
   /s/ Arthur W. Roos
    	
 
    	
By:
    	
   /s/ Mark E. Coticchia
    
	
 
    	
 
    	
 
    
	
Title:
    	
   Treasurer
    	
 
    	
Title:
    	
   VP Research & Technology Mgmt.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
   9/20/06
    	
 
    	
Date:
    	
   9/20/06
    
							

 

Address for Notices:

 

Case Western Reserve University

 

10900 Euclid Avenue

Cleveland, Ohio 44106, USA

Attention: Assistant Vice President for Technology Transfer

 

Facsimile: 216-368-0196

 

 

 

Tracon Pharmaceuticals, Inc.

 

	
By:
    	
   /s/ Charles P. Theuer
    	
 
    
	
 
    	
 
    
	
Title:
    	
   CEO
    	
 
    
	
 
    	
 
    	
 
    
	
Date: 
    	
   18 Sep 2006
    	
 
    
				

 

Address for Notices:

 

4510 Executive Drive, Suite 330

San Diego, California 92121

 

Attention:  Frank Taffy, Esq.

 

Facsimile:  858-550-0786

 

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Attachment A

 

Description of Licensed Technology

 

[...***...]

 

***Confidential Treatment Requested

 

27

 

Attachment B

 

Agreement by Subsidiary regarding the License Agreement

between Case Western Reserve University and Tracon Pharmaceuticals, Inc.

dated                               , 2006

 

This Agreement is entered into by                                                                      (hereinafter “Licensee’s Subsidiary”), a corporation having the address of                                                           , which represents and warrants that it is a subsidiary of Tracon Pharmaceuticals, Inc., and that more than fifty percent (50%) of the stock of Licensee’s Subsidiary is owned directly by Tracon Pharmaceuticals, Inc. (or by a wholly owned Tracon Pharmaceuticals, Inc. subsidiary). Licensee’s Subsidiary agrees that it is a Licensee under the attached License Agreement between Licensee and Case Western Reserve University dated                                          (hereinafter the “License Agreement”) and further agrees to be bound as a Licensee and to have all of the rights and obligations of the Licensee provided by said License Agreement. This Agreement is executed by Licensee Subsidiary with the intent to be legally bound hereby.

 

The undersigned verifies subject to the penalties of Section 2921.13 of the Ohio Revised Code relating to unsworn falsification to authorities that he/she has the authority to bind Licensee’s Subsidiary to this Agreement.

 

	
Attest:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Name
    	
 
    	
 
    	
 Name
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title
    	
 
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    	
 
    
							

 

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